[Federal Register: December 28, 2006 (Volume 71, Number 249)]
[Rules and Regulations]
[Page 78086-78094]
[DOCID:fr28de06-13]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 80 and 86

[EPA-HQ-OAR-2006-0363; FRL-8263-4]
RIN 2060-AN66

Amendment to Tier 2 Vehicle Emission Standards and Gasoline
Sulfur Requirements: Partial Exemption for U.S. Pacific Island
Territories

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: EPA is taking direct final action to exempt the three U.S.
Pacific Island Territories--American Samoa, Guam, and the Commonwealth
of the Northern Mariana Islands (C.N.M.I.)--from the gasoline sulfur
requirements that EPA promulgated in the Tier 2 motor vehicle rule. The
Governor of American Samoa petitioned us for an exemption from the Tier
2 gasoline sulfur requirement because of the potential for gasoline
shortages, the added cost, and the minimal air quality benefits the
Tier 2 gasoline sulfur requirement would provide to American Samoa.
Representatives of the Governors of Guam and C.N.M.I. have also
requested an exemption referencing the petition submitted by American
Samoa. Generally, the Far East market, primarily Singapore, supplies
gasoline to the U.S. Pacific Island Territories. The Tier 2 sulfur
standard effectively requires special gasoline shipments, which would
increase the cost and could jeopardize the security of the gasoline
supply to the Pacific Island Territories. The air quality in American
Samoa, Guam, and C.N.M.I. is generally pristine, due to the wet
climate, strong prevailing winds, and considerable distance from any
pollution sources. We recognize that exempting the U.S. Pacific Island
Territories from the gasoline sulfur standard will result in smaller
emission reductions. However, Tier 2 vehicles using higher sulfur
gasoline still emit 30% less hydrocarbons and 60% less NOX than Tier 1
vehicles and negative effects on the catalytic converter due to the
higher sulfur levels are, in many cases, reversible. Additionally,
these reduced benefits are acceptable due to the pristine air quality,
the fact that gasoline quality will not change, and the cost and
difficulty of consistently acquiring Tier 2 compliant gasoline. The
Tier 2 motor vehicle rule also sets standards for vehicle emissions.
Vehicles in use on the U.S. Pacific Island Territories will not be
exempt from the Tier 2 vehicle emission standards. However, additional
flexibility will be afforded due to the lack of low sulfur gasoline.

DATES: This direct final rule is effective on March 28, 2007 without
further notice, unless EPA receives adverse comments by January 29,
2007. If we receive adverse comments, we will publish a timely
withdrawal in the Federal Register informing the public that this rule
will not take effect.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2006-0363, by one of the following methods:
     http://www.regulations.gov: Follow the on-line

instructions for submitting comments.
     Mail: Air Docket, Environmental Protection Agency,
Mailcode: 6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460,
Attention Docket ID No. EPA-HQ-OAR-2006-0363. In addition, please mail
a copy of your comments on the information collection provisions to the
Office of Information and Regulatory Affairs, Office of Management and
Budget (OMB), Attn: Desk Officer for EPA, 725 17th St. NW., Washington,
DC 20503.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2006-0363. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
http://www.regulations.gov, including any personal information

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

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

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

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

DC, EPA West, Room B102, 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
Air Docket is<PHONE_NUMBER>.

    Note: The EPA Docket Center suffered damage due to flooding
during the last week

of June 2006. The Docket Center is continuing to operate. However,
during the cleanup, there will be temporary changes to Docket Center
telephone numbers, addresses, and hours of operation for people who
wish to make hand deliveries or visit the Public Reading Room to
view documents. Consult EPA's Federal Register notice at 71 FR 38147
(July 5, 2006) or the EPA Web site at http://www.epa.gov/epahome/dockets.htm
 for current information on docket operations, locations

and telephone numbers. The Docket Center's mailing address for U.S.
mail and the procedure for submitting comments to
http://www.regulations.gov are not affected by the flooding and will remain

the same.

FOR FURTHER INFORMATION CONTACT: Sean Hillson, Office of Transportation
and Air Quality, Transportation and Regional Programs Division,
Mailcode AASMCG, Environmental Protection Agency, 2000 Traverwood
Drive, Ann Arbor, MI 48105; telephone number:<PHONE_NUMBER>; fax
number:<PHONE_NUMBER>; e-mail address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: EPA is publishing this rule without a prior
proposal because we view this action as noncontroversial and anticipate
no adverse comment. However, in the ``Proposed Rules'' section of
today's Federal Register publication, we are publishing a separate
document that will serve as the proposal to adopt the provisions in
this direct final rule if adverse comments are filed. This rule will be
effective on March 28, 2007 without further notice unless we receive
adverse comment by January 29, 2007 or a request for a public hearing
by January 12, 2007. If we receive adverse comment on one or more
distinct amendments, paragraphs, or sections of this rulemaking, we
will publish a timely withdrawal in the Federal Register indicating
which provisions are being withdrawn due to adverse comment. We may
address all adverse comments in a subsequent final rule based on the
proposed rule. We will not institute a second comment period on this
action. Any parties interested in commenting must do so at this time.
Any distinct amendment, paragraph, or section of today's rulemaking for
which we do not receive adverse comment will become effective on the
date set out above, notwithstanding any adverse comment on any other
distinct amendment, paragraph, or section of today's rule.
    Today's action is also available electronically on the date of
publication from EPA's Federal Register Internet Web site listed below.
This service is free of charge, except any cost that you already incur
for connecting to the Internet.
    EPA Federal Register Web Site: http://www.epa.gov/fedrgstr/EPA-AIR/

(Either select a desired date or use the Search feature).
    The contents of this preamble are listed in the following outline:

I. General Information
II. Background
III. American Samoa
IV. Guam
V. Commonwealth of the Northern Mariana Islands (C.N.M.I.)
VI. What Is EPA Promulgating?
VII. Statutory and Executive Order Reviews
VIII. Statutory Provisions and Legal Authority

I. General Information

A. Does this Action Apply to Me?

    This action will affect you if you produce new motor vehicles,
alter individual imported motor vehicles to address U.S. regulation, or
convert motor vehicles to use alternative fuels for use in the U.S.
Pacific Island Territories--American Samoa, Guam, and Commonwealth of
the Northern Mariana Islands (C.N.M.I.). It will also affect you if you
produce, import, distribute, or sell gasoline fuel for use in the U.S.
Pacific Island Territories. The following table gives some examples of
entities that may have to follow the regulations. But because these are
only examples, you should carefully examine the regulations in 40 CFR
parts 80 and 86. If you have questions, call the person listed in the
FOR FURTHER INFORMATION CONTACT section of this preamble.

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    Examples of potentially regulated       NAICS codes
                entities                        \a\        SIC codes \b\
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Motor Vehicle Manufacturers.............          336111            3711
                                                  336112
                                                  336120
Alternative Fuel Vehicle Converters.....          336311            3592
                                                  336312            3714
                                                  422720            5172
                                                  454312            5984
                                                  811198            7549
                                                  541514            8742
                                                  541690            8931
Commercial Importers of Vehicles and              811112            7533
 Vehicle Components.....................
                                                  811198            7549
                                                  541514            8742
Petroleum Refiners......................          324110            2911
Gasoline Marketers and Distributers.....          422710            5171
                                                  422720            5172
Gasoline Carriers.......................          484220            4212
                                                  484230           4213
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\a\ North American Industry Classification System (NAICS).
\b\ Standard Industrial Classification (SIC).

B. What Should I Consider as I Prepare My Comments for EPA?

1. Submitting CBI
    Do not submit confidential business information to EPA through
http://www.regulations.gov or e-mail. Clearly mark the part or all of

the information that you claim to be CBI. For CBI information in a disk
or CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM
as CBI and then identify electronically within the disk or CD-ROM the
specific information that is claimed as CBI. In addition to one
complete version of the comment that includes information claimed as
CBI, a copy of the comment that does not contain the information
claimed as CBI must be submitted for inclusion in the public docket.
Information so marked will not be disclosed except in accordance with
procedures set forth in 40 CFR part 2.

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

II. Background

A. What Is the Tier 2 Rule?

    The Tier 2 rule (65 FR 6697, February 10, 2000) instituted a
comprehensive regulatory program designed to significantly reduce the
emissions from new passenger cars and light trucks, including pickup
trucks, vans, minivans, and sport-utility vehicles. These reductions
provide for cleaner air and greater public health protection, primarily
by reducing ozone and PM pollution. The program treats vehicles and
fuels as a system, combining requirements for much cleaner vehicles
with requirements for much lower levels of sulfur in gasoline. The
program phases in a single set of tailpipe emission standards that
apply to all passenger cars, light trucks, and larger passenger
vehicles operated on any fuel. To enable the very clean Tier 2 vehicle
emission control technology to be introduced and to maintain its
effectiveness, we also require reduced gasoline sulfur levels. The
reduction in sulfur levels contributes directly to cleaner air in
addition to its beneficial effects on vehicle emission control systems.
Refiners have installed additional refining equipment to remove sulfur
in their refining processes. Importers of gasoline are required to
import and market only gasoline meeting the sulfur standards. These
standards currently apply to the U.S. Pacific Island Territories--
American Samoa, Guam, and the Commonwealth of the Northern Mariana
Islands (C.N.M.I.). However, these Territories have received
enforcement discretion \1\ from the Office of Enforcement and
Compliance Assurance which is applicable until November 1, 2007, or
once the final rule becomes effective, whichever is earlier.
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    \1\ EPA, ``Exercise of Enforcement Discretion for Gasoline
Sulfur Regulations for the Commonwealth of the Northern Mariana
Islands, American Samoa, and the Territory of Guam'', October 30,
2006.
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B. Summary of American Samoa's Petition

    Section 325(a)(1) of the Clean Air Act \2\ states in relevant part:
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    \2\ 42 U.S.C. 7625-l(a)(1).
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    Upon petition by the Governor of Guam, American Samoa, the
Virgin Islands, or the Commonwealth of the Northern Mariana Islands,
the Administrator is authorized to exempt any person or source or
class of persons in such territory from any requirement under this
chapter other than section 7412 of this title or any requirement
under section 7410 of this title or part D of subchapter I of this
chapter necessary to attain or maintain a national primary ambient
air quality standard. Such exemption may be granted if the
Administrator finds that the compliance with such requirement is not
feasible or is unreasonable due to unique geographical,
meteorological or economic factors of such territory, or such other
local factors as the Administrator deems significant.
    Pursuant to Section 325(a)(1) of the Clean Air Act, the Honorable
Togiola Tulafono, Governor of American Samoa, petitioned \3\ the EPA to
exempt all persons in American Samoa from the Tier 2 gasoline sulfur
requirements promulgated by the EPA pursuant to Section 211(c)(1) of
the Clean Air Act and set forth at 40 CFR Part 80, Subpart H
(``Gasoline Sulfur Regulations''). According to the petition,
compliance with these requirements in American Samoa is unreasonable
due to the unique geographical, meteorological and economic factors of
the Territory. The reasons supporting this petition include the
following:
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    \3\ Tulafono, T., Governor of American Samoa, ``Petition for
Exemption from the Gasoline Sulfur Regulations'', February 10, 2004.
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     Transportation costs dictate that gasoline be supplied to
American Samoa from Far East markets, and the imposition of the rules
would cause the American Samoan market to be even less attractive to
foreign suppliers in an already limited market and, therefore,
compromise the security of the American Samoa gasoline supply;
     Compliance with the Tier 2 gasoline sulfur regulations
would result in higher prices for gasoline in an already fragile
economy, resulting in added economic hardship to American Samoan
residents, the majority of which live below the poverty level; and
     The isolation and small volumes of gasoline used in
American Samoa obviate any measurable danger to the environment with
respect to an exemption for American Samoa from the Tier 2 rule.

C. Rationale for Guam and C.N.M.I. Tier 2 Exemption

    Representatives of the Governors of C.N.M.I. and Guam have also
filed requests 4 5 for exemption from the Tier 2 gasoline
sulfur standards. These territories have referenced the American Samoa
petition as they have the same fuel suppliers and similar geographical,
meteorological and economic factors as American Samoa. Gasoline is
transported to the U.S. Pacific Island Territories from Far East
markets. Imposing the Tier 2 regulations on the Territories would make
the market less attractive to foreign suppliers. This compromises the
security of the gasoline supply. One supplier has already pulled out of
the market due to difficulty in supplying compliant gasoline.
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    \4\ Rabauliman, F., Director of the C.N.M.I. Division of
Environmental Quality, ``Request for Exemption from Gasoline Sulfur
Requirements'', August 10, 2006.
    \5\ Soto, A., Acting Administrator of the Guam Environmental
Protection Agency, ``Request for Exemption from Gasoline Sulfur
Requirements'', August 14, 2006.
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III. American Samoa

A. American Samoa's Geography and Climate

    American Samoa is a group of five volcanic islands and two coral
atolls. It is located in Polynesia, approximately 2300 miles southwest
of Hawaii and 1600 miles north of New Zealand. American Samoa is an
unincorporated Territory of the United States.
    American Samoa is comprised of approximately 76 square miles, most
of which is mountainous. Over 96 percent of the population lives on the
largest island, Tutuila, which is approximately 53 square miles. The
small island of Annu'u lies near the east end of the Tutuila. The
Manu's Islands (Ta'u, Ofu and Olesega) are located approximately 60
miles east of Tutuila. Swains Island and the uninhabited Rose Atoll are
the two remaining islands in the American Samoan group.
    American Samoa's closest neighbor is Western Samoa, lying about 60
miles to the west. There are no major population centers in the
vicinity of American

Samoa--the nearest is New Zealand, 1600 miles away.
    American Samoa has a tropical maritime climate, with abundant rain,
winds, and warm, humid days and nights. Rainfall is about 125 inches a
year near the airport but varies greatly over small distances because
of the mountainous topography. The mean annual temperature is
approximately 80 degrees Fahrenheit and remains fairly constant
throughout the year. The prevailing winds throughout the year are the
Easterly Trades. The average wind speed is 12.1 miles per hour, and
does not vary to a great degree throughout the year. The lowest monthly
average wind speeds occur in February, March and April and average
about 8.5 miles per hour.

B. What Is the Air Quality Impact for American Samoa?

    Due to the wet climate, strong prevailing winds, and the remoteness
of American Samoa, the air quality is generally pristine. It is in
attainment with EPA's air quality standards, including the National
Ambient Air Quality Standards for ozone and SO2. Exempting
American Samoa from the Tier 2 gasoline sulfur standards would not
cause an increase in emissions. As noted above, American Samoa has
received enforcement discretion for the Tier 2 gasoline sulfur
standards from the onset of the program and therefore the gasoline sent
to American Samoa has not been required to meet the Tier 2 sulfur
levels. Emissions from older vehicles will remain unchanged. Tier 2
vehicles using high sulfur gasoline will be cleaner than Tier 1
vehicles. Tier 2 vehicles using gasoline with 330 ppm sulfur emit 30%
less hydrocarbons and 60% less NOX than Tier 1 vehicles \6\.
While this rule will lead to a smaller reduction in emissions than
would occur if the Tier 2 sulfur regulations are required, American
Samoa's current air quality does not require further reductions.
Because of American Samoa's remoteness, there are no cross border
issues.
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    \6\ EPA, ``EPA Staff Paper on Gasoline Sulfur Issues'', May 1,
1998, EPA420-R-98-005.
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C. Special Market Limitations for American Samoa

    American Samoa's gasoline market has unique characteristics due to
American Samoa's remoteness. It is not realistic to supply America
Samoa from the mainland United States. Consequently, the majority of
American Samoa's gasoline is supplied from the Far East market
(Singapore and Australia).
    The American Samoa petroleum market poses unique challenges, and
suppliers periodically withdraw from the market. The amount of fuel
purchased by American Samoa is so small that America Samoa is only a
minor part of the business of its current suppliers. These suppliers
may not be willing to modify their refineries to comply with the EPA's
Tier 2 gasoline sulfur requirements simply to supply the small American
Samoa market. For instance, Australia currently enforces a gasoline
sulfur standard higher than the Tier 2 standard and Singapore does not
regulate gasoline sulfur content \7\.
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    \7\ International Fuel Quality Center, ``Asia/Australasia: 2005
Regional Fuel Quality Overview and Outlook for 2006'', February 23,
2006.
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    In addition, American Samoa is economically challenged. According
to the 2000 U.S. Census, 61 percent of American Samoans lived below the
poverty level \8\. Its 2000 per capita gross domestic product
purchasing power parity was $5,825, compared to the 2005 U.S. per
capita GDP purchasing power parity of $41,800 \9\. Revenue transfers
from the U.S. government add substantially to its economic well-being.
American Samoa's economic activity is primarily fishing and processing
and canning of tuna.
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    \8\ U.S. Census Bureau, ``American Samoa: 2000 Social, Economic,
and Housing Characteristics'', 2001.
    \9\ Central Intelligence Agency, ``World Fact Book'', June 2006.
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IV. Guam

A. Guam's Geography and Climate

    Guam is the southern-most island in the Marianas Archipelago. It is
located in Polynesia, approximately 3,700 miles west-southwest of
Honolulu and 1,550 miles south of Tokyo. The island is about 28 miles
long and between 4 and 8.5 miles wide, with a total land area of 209
square miles, about three times the size of Washington, DC. It has a
tropical climate with consistently warm and humid weather and westward
prevailing trade winds. There is no land mass downwind of Guam within
600 miles.

B. What Is the Air Quality Impact for Guam?

    Guam is in attainment with the primary NAAQS, with the exception of
sulfur dioxide in two areas. This action is not expected to have any
significant impact on the ambient air quality status of Guam, including
the status of the two areas designated as nonattainment for sulfur
dioxide. Both areas are designated nonattainment for sulfur dioxide as
a result of monitored and modeled exceedences in the 1970's prior to
implementing changes to power generation facilities.
    In the 1990's both plants were rebuilt, upgrading their emission
controls. Guam has submitted a redesignation request to EPA. That
pending redesignation request shows that they are now in attainment. An
emissions inventory shows that the power plants are the major source of
SO2 on Guam. Both plants are on the western side of the
island. The Trade Winds blow persistently from east-to-west, further
lessening the impact of the SO2 emissions on the people of
Guam from the power plants.
    Mobile sources, like cars, are a minor contributor to the
SO2 emission budget. Exempting Guam from the Tier 2 gasoline
sulfur and vehicle emission standards would not cause an increase in
emissions. Guam has received enforcement discretion for the Tier 2
gasoline sulfur standards from the onset of the program and therefore
the gasoline sent to Guam has not been required to meet the Tier 2
sulfur levels. Emissions from older vehicles will remain unchanged.
Tier 2 vehicles using high sulfur gasoline will be cleaner than Tier 1
vehicles. Tier 2 vehicles using gasoline with 330 ppm sulfur emit 30%
less hydrocarbons and 60% less NOX than Tier 1 vehicles.
While this rule will lead to a smaller reduction in emissions than
would occur if the Tier 2 sulfur regulations are required, Guam's
current air quality does not require further reductions. Because of
Guam's remoteness, there are no cross border issues

C. Special Market Limitations for Guam

    The history of the Guam gasoline market has unique characteristics
due to its remoteness. It is not realistic to supply Guam from the
mainland United States. Consequently, the majority of Guam's gasoline
is supplied from Singapore refineries. The shipments to Guam are in
relatively small quantities because the island lacks the economy of
scale for bigger bulk purchases. These suppliers may not be willing to
modify their refineries to comply with the EPA's Tier 2 gasoline sulfur
standard simply to supply the small Guam market. As stated earlier,
Singapore currently does not regulate gasoline sulfur content.
    In addition, Guam is economically challenged. According to the 2000
U.S. Census, Guam's population was 148,060 with 23% living below
poverty \10\. Its 2005 per capita GDP purchasing power parity was
$15,000, compared to the

U.S. per capita GDP purchasing power parity in 2005 of $41,800 \11\.
Guam's economy depends significantly on U.S. military spending and on
revenue from the tourism industry. Most food and industrial goods are
imported, about 75% from the U.S.
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    \10\ U.S. Census Bureau, ``Guam: 2000 Social, Economic, and
Housing Characteristics'', 2003.
    \11\ Central Intelligence Agency, ``World Fact Book'', June
2006.
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V. Commonwealth of the Northern Mariana Islands (C.N.M.I.)

A. C.N.M.I. Geography and Climate

    The C.N.M.I. consists of 14 islands of volcanic origin that extend
in a general north-south direction for 388 nautical miles. It lies in
the Western part of the Pacific Ocean about 1,150 miles south of Tokyo,
108 miles north of Guam, and 5,280 miles from the U.S. mainland. The
land area is 176.5 square miles, about 2.5 times the size of
Washington, DC. It has a tropical climate with consistently warm and
humid weather and westward prevailing trade winds. According to the
U.S. Census Bureau, in 2000 the population was 68,775, with population
centers primarily on the western side of Saipan, and to a much lesser
extent on Tinian and Rota. C.N.M.I. has approximately 200 miles of
roads, of which approximately 50 percent are paved.

B. What is the Air Quality Impact for C.N.M.I.?

    The concentration of development on the west side of the islands,
meteorology (westward trade winds), and lack of heavy industry all have
a beneficial impact on C.N.M.I.'s air quality. C.N.M.I. is in
attainment with EPA's air quality standards, including the National
Ambient Air Quality standard for ozone and SO2. Exempting
C.N.M.I. from the Tier 2 gasoline sulfur and vehicle emission standards
would not cause an increase in emissions. C.N.M.I. has received
enforcement discretion for the Tier 2 gasoline sulfur standards from
the onset of the program and therefore the gasoline sent to C.N.M.I.
has not been required to meet the Tier 2 sulfur levels. Emissions from
older vehicles will remain unchanged. Tier 2 vehicles using high sulfur
gasoline will be cleaner than Tier 1 vehicles. Tier 2 vehicles using
gasoline with 330 ppm sulfur emit 30% less hydrocarbons and 60% less
NOX than Tier 1 vehicles. While this rule will lead to a
smaller reduction in emissions than would occur if the Tier 2 sulfur
regulations are required, C.N.M.I.'s current air quality does not
require further reductions. Because of its remoteness, there are no
cross border issues.

C. Special Market Limitations for C.N.M.I.

    The history of the C.N.M.I. gasoline market has unique
characteristics due to its remoteness. It is not realistic to supply
C.N.M.I. from the mainland United States. Consequently, the majority of
C.N.M.I. gasoline is supplied from the Far East market where gasoline
sulfur content may be unregulated or does not meet Tier 2 levels.
Gasoline is shipped from Singapore to Guam and then to C.N.M.I. in one
ship. Several factors impact the wholesale pricing of gasoline in
C.N.M.I., including small volumes, a lack of purchasing power leverage,
high transportation costs, and lack of competition. The Tier 2 gasoline
sulfur requirements would make the C.N.M.I. market even less attractive
to suppliers.
    In addition, C.N.M.I. is economically challenged, with 46% of the
population living below the poverty level in 2000 \12\. The GDP per
capita purchasing power parity in 2000 was $12,500, compared to the
United States per capita GDP purchasing power parity in 2005 of $41,800
\13\. The economy benefits substantially from financial assistance from
the United States, but this assistance has declined as locally
generated government revenues have grown. Chief sources of income are
tourism and garment production.
---------------------------------------------------------------------------

    \12\ U.S. Census Bureau, ``Commonwealth of the Northern Mariana
Islands: 2000 Social, Economic, and Housing Characteristics'', 2003.
    \13\ Central Intelligence Agency, ``World Fact Book'', June
2006.
---------------------------------------------------------------------------

VI. What Is EPA Promulgating?

A. Gasoline Sulfur Requirements

1. Standards
    We are exempting American Samoa, Guam, and C.N.M.I. from the Tier 2
gasoline sulfur standard due to the high economic burden of compliance,
isolated nature of the territories, both in terms of gasoline
importation and pollution transport, and minimal air quality effects.
American Samoa, Guam, and C.N.M.I. have each filed a request for
exemption from the Tier 2 gasoline sulfur standards. American Samoa has
also submitted a petition providing justification for the exemption,
which Guam and C.N.M.I. have referenced in their requests as they have
the same fuel suppliers and similar geographical, meteorological, and
economic factors as American Samoa.
2. Rationale
    EPA's Gasoline Sulfur Regulations were published on February 10,
2000. The rules are designed to lower sulfur levels in gasoline in
order to reduce emissions from mobile sources of sulfur compounds,
ozone, air toxics, and particulate matter. The rules currently apply to
the U.S. Pacific Island Territories (65 FR 6713, f.n. 24, February 10,
2000). However, the U.S. Pacific Island Territories have received
enforcement discretion of the Tier 2 gasoline sulfur standards until
November 1, 2007.
    Compliance with the EPA's Tier 2 gasoline sulfur standards would
result in undue economic hardship in the U.S. Pacific Island
Territories. All three of the territories lack internal petroleum
supplies and refining capabilities and rely on long distance imports.
Given their remote location from Hawaii and the U.S. mainland, most
petroleum products are imported from East Rim nations, particularly
Singapore where no gasoline sulfur regulations are in place.
    The economies of the Territories are underdeveloped compared with
the U.S. mainland, with poverty rates ranging between 23% and 61%.
Gasoline must be imported over long distances and in small cargo
parcels. This makes the cost of gasoline in the Pacific Island
Territories higher than on the mainland United States, exclusive of the
effects of taxes. Higher gasoline prices adversely affect the economies
of the Territories.
    Imposition of the low sulfur gasoline standards would result in a
further limitation in potential suppliers to the U.S. Pacific Island
Territories. Suppliers will either be dissuaded from supplying the
Territories at all, or they would charge prices that would make the
importation of the gasoline economically impracticable for its
residents. One supplier has pulled out of the market in American Samoa
because they were unable to provide compliant gasoline. The fact that a
major supplier of gasoline has pulled out of the market speaks to the
impracticality of supplying Tier 2 gasoline to the Territories.

B. Vehicle Emission Standards

1. Standards
    We are not exempting American Samoa, Guam, and C.N.M.I. from the
Tier 2 vehicle emission standards. However, we are providing additional
flexibilities for Tier 2 vehicles since low sulfur gasoline is
unavailable. These flexibilities are similar to the flexibilities which
EPA provided for 1999-2003 model vehicles meeting National Low Emission
Vehicle (NLEV) emission standards and 2004-2007 model year vehicles
meeting either Interim non-Tier 2 or Tier 2 vehicle

emission standards. Under current EPA regulations, these flexibilities
are set to expire at the end of the 2007 model year. Today's action
extends the flexibilities to 2008 and later model year vehicles
introduced into commerce in American Samoa, C.N.M.I., and Guam. The
flexibilities (1) allow additional preconditioning prior to conducting
exhaust emission tests (to remove sulfur deposits on the catalyst and
emission control system components) and (2) allow special OBD system
considerations to account for higher levels of sulfur present in
gasoline.
2. Sulfur Effects on Tier 2 and NLEV Vehicle Exhaust Emissions and OBD
Systems
    The effects of sulfur levels in gasoline on vehicle emissions and
OBD systems have been well documented in recent years in various
Society of Automotive Engineer (SAE) papers and other references. A
discussion of sulfur effects on vehicle emissions and OBD systems can
be found in the Tier 2 final rule (65 FR 6729, February 10, 2000). In
brief, sulfur in gasoline has a negative impact on vehicle emissions,
reducing the effectiveness of the catalytic converter. Sulfur compounds
attach to some of the precious metal sites in the catalyst,
neutralizing some of the catalytic action. Tier 2 and NLEV vehicles are
more sensitive to sulfur poisoning than Tier 1 and Tier 0 vehicles. The
amount of reduced activity depends on many factors such as the catalyst
precious metal formulation, the oxygen storage capacity of the
catalyst, the catalyst location, catalyst temperature environment, the
air/fuel calibration of the engine, vehicle speed, vehicle load, etc.
    Data presented in the Tier 2 final rule (65 FR 6729, February 10,
2000) indicates that for vehicles meeting LEV emission standards, NMHC
and NOX emissions can increase by approximately 150 percent
and 50 percent, respectively, on the FTP (city) test if the vehicle was
operated on gasoline containing 330 ppm sulfur. While sulfur poisoning
is reversible, the amount of reversibility also depends on many
factors. Sulfur can be removed from some catalysts by operating the
vehicle with a rich exhaust (absence of oxygen) while the catalyst
experiences a high temperature environment (above 700 [deg]C).
    As discussed in the Tier 2 final rule (65 FR 6729, February 10,
2000), sulfur poisoning has a potential to adversely affect the on-
board diagnostic (OBD) system of the vehicle. First, sulfur poisoning
can impair the decisions made by the OBD system, and affect the ability
of the OBD system to accurately detect catalyst efficiency problems.
For example, the OBD system could operate properly on low-sulfur
gasoline, but falsely indicate sulfur-induced passes when exposed to
high sulfur gasoline. Second, sulfur poisoning has a potential to
affect consumer confidence in the OBD system itself. For example, if
the OBD system were to detect a substantially higher rate of (sulfur
induced) catalyst efficiency problems when operating on high sulfur
gasoline, the more frequent illumination of the OBD warning light could
lead to a loss of consumer confidence in the OBD system itself. Thus,
consumers might become inclined to ignore the OBD warning light and
drive potentially high emitting vehicles with emission-related problems
unrelated to sulfur in gasoline.
3. Discussion of Vehicle Requirements
    Today's action extends the flexibilities of Tier 2 OBD and in-use
testing requirements while allowing American Samoa, Guam, and C.N.M.I.
to use in-use fuels with sulfur levels above the Tier 2 requirements.
We believe that it is appropriate to retain the Tier 2 vehicle emission
standards for many reasons, including the following:
    a. Exhaust emission benefits. EPA Tier 2 emission standards are
significantly lower than Tier 1 emission standards. For example, Tier 1
exhaust emission standards for passenger cars are approximately 5-6
times higher than Tier 2 standards. Tier 1 exhaust emission standards
for large light-duty trucks and medium duty passenger vehicles are
approximately 12 times higher than Tier 2 emission standards. Although
Tier 2 vehicles operating in American Samoa, Guam, and C.N.M.I. on high
sulfur gasoline would not be expected to achieve the same emissions
performance as Tier 2 vehicles operated on low sulfur fuel, the
emission reductions realized by Tier 2 vehicles even when operating on
high sulfur fuel remain significant relative to a fleet of Tier 1
vehicles operating on such fuels. As noted above, Tier 2 vehicles using
gasoline with 330 ppm sulfur emit 30% less hydrocarbons and 60% less
NOX than Tier 1 vehicles.
    b. Evaporative emission benefits and other benefits. EPA Tier 2
evaporative emission standards are approximately 50 percent lower than
Tier 1 evaporative emission standards (a reduction which is unaffected
by the sulfur level of in-use gasoline). Other beneficial requirements
of Tier 2 regulations include extending the passenger car useful life
mileage from 100,000 miles to 120,000 miles; eliminating redundant idle
CO emission standards for trucks; eliminating adjusted loaded weight
(ALVW) test requirements for heavy light-duty trucks; reducing the
Supplemental Federal Test Procedure emission standards; and requiring
vehicles to have leak-free exhaust systems.
    c. No significant in-use testing problems to date. EPA conducts
``as received'' in-use surveillance tests on approximately 50 classes
of vehicles each year. Three vehicles are normally tested in each
class, for a total of approximately 150 vehicles per year. Although EPA
tests have been instrumental in several emission-related recalls, we
have found that the vast majority of 1999 to 2004 model year vehicles
comply with the applicable NLEV/Tier 2 emission standards (even though
low sulfur fuel was not available during much of this period). In some
cases, the ``as received'' emission test failed to comply with
applicable emission standards and the vehicle was retested after
performing additional (sulfur removal) preconditioning. For the
majority of these retests, emissions changed very little, however in
one case, NOX emissions decreased by approximately 50
percent. There have been no sulfur-related OBD failures to date.
Beginning in the 2005 calendar year, automobile manufacturers were also
required to perform ``as received'' in-use testing on approximately
1500 vehicles per year. The results of the manufacturer tests generally
agree with the results of the EPA tests. The manufacturer tests also
showed a high level of compliance with the NLEV and Tier 2 emission
standards and no sulfur-related OBD problems. A list of vehicle recalls
is available at http://www.epa.gov/otaq/recall.htm.

    During the time when EPA and manufacturers were conducting their
in-use tests on NLEV and Tier 2 vehicles, the nationwide average sulfur
levels of gasoline in the United States ranged from approximately 300
ppm in 1999 to 80 ppm in 2004. We note that sulfur levels averaged 300
ppm in 2002 and 130 ppm in 2004 in the Detroit, Michigan area (where
test vehicles were recruited for all EPA tests and many manufacturer
tests).
    While EPA believes that the Tier 2 vehicle standards should
continue to apply for vehicles introduced in American Samoa, Guam, and
C.N.M.I., we believe that the pre-existing flexibilities provided for
vehicles that are exposed to high sulfur gasoline should be extended
for vehicles introduced in these Territories. Flexibilities provided in
the Tier 2 rule (1) allow additional preconditioning prior to
conducting exhaust emission

tests (to remove sulfur deposits on the catalyst and emission control
system components) and (2) allow special OBD system considerations to
account for sulfur which is present in gasoline. The specific
requirements of these flexibilities are found in the current
regulations (40 CFR 86.1806-05(d) and 40 CFR 86.1845-04(a)), and are
applicable to vehicles up to the 2007 model year. The revised
regulations provided with today's action extend these provisions beyond
the 2007 model year for vehicles in American Samoa, C.N.M.I., and Guam.
The flexibility to allow additional preconditioning prior to emission
testing is being extended to accommodate any possible emission testing
which may be performed on American Samoa, Guam, or C.N.M.I. vehicles.
The OBD flexibilities are being extended (even though current data
indicate that they will probably not be needed) because EPA cannot
conclude with certainty that they will not be needed for future
technology vehicles.

VII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    This action is not a ``significant regulatory action'' under the
terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and
is therefore not subject to OMB review.

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 rule does not create new requirements. Its purpose is to relieve a
burden imposed on the three U.S. Pacific Island Territories.
    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 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
Procedure Act or any other statute unless the agency certifies that 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 today's rule on small
entities, small entity is defined as: (1) A small business as defined
by 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 today's rule on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. This rule
would exempt the three U.S. Pacific Island Territories--American Samoa,
Guam and the Commonwealth of the Northern Mariana Islands--from the
Tier 2 rule for gasoline sulfur requirements and extend related
existing flexibilities to the vehicle emission standards for the three
territories. It does not create new requirements. Its purpose is to
relieve a burden imposed on the three U.S. Pacific Island Territories.
We have therefore concluded that today's rule will relieve regulatory
burden for all affected small entities.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.
L. 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
one 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.
    Today's rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, or tribal
governments or the private sector. This rule imposes no enforceable
duty on any State, local or tribal governments or the private sector.
It does not create new requirements. Its purpose is to relieve a burden
imposed on the three U.S. Pacific Island Territories.

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
Executive Order 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. Thus, Executive
Order 13132 does not apply to this rule. Although section 6 of
Executive Order 13132 does not apply to this rule, EPA did consult with
representatives of the U.S. Pacific Island Territories in developing
this rule. A summary of the concerns raised during that consultation
and EPA's response to those concerns is provided in previous sections
of this preamble.

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 rule does not have
tribal implications, as specified in Executive Order 13175. This rule
would exempt the three U.S. Pacific Island Territories--American Samoa,
Guam and the Commonwealth of the Northern Mariana Islands--from the
Tier 2 rule for gasoline sulfur requirements and extend related
existing flexibilities to the vehicle emission standards for the three
territories. It applies only to the three U.S. Pacific Island
Territories. Thus, Executive Order 13175 does not apply to this rule.

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

    Executive Order 13045: ``Protection of Children from Environmental
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies
to any rule that: (1) Is determined to be ``economically significant''
as defined under Executive Order 12866, and (2) concerns an
environmental health or safety risk that EPA has reason to believe may
have a 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.
    EPA interprets Executive Order 13045 as applying only to those
regulatory actions that are based on health or safety risks, such that
the analysis required under section 5-501 of the Order has the
potential to influence the regulation. This rule is not subject to
Executive Order 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 rule is not subject to Executive Order 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 Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law No. 104-113, 12(d) (15 U.S.C. 272
note) directs EPA to use voluntary consensus standards 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 voluntary consensus standards bodies. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
    This proposed rulemaking does not involve technical standards.
Therefore, EPA is not considering the use of any voluntary consensus
standards.

J. 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. 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 March 28, 2007.

VIII. Statutory Provisions and Legal Authority

    Statutory authority for today's final rule is found in the Clean
Air Act, 42 U.S.C. 7401 et seq., in particular, sections 325, 211 and
202 of the Act, 42 U.S.C. 7521. This rule is being promulgated under
the administrative and procedural provisions of Clean Air Act section
307(d), 42 U.S.C. 7607(d).

List of Subjects

40 CFR Part 80

    Environmental protection, Adminstrative practice and procedure,
Gasoline, Reporting and recordkeeping requirements.

40 CFR Part 86

    Environmental protection, Administrative practice and procedure,
Motor vehicle pollution.

    Dated: December 21, 2006.
Stephen L. Johnson,
Administrator.

0
For the reasons set forth in the preamble, chapter I, title 40 of the
Code of Federal Regulations is amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

0
1. The authority citation for part 80 continues to read as follows:

    Authority: 42 U.S.C. 7414, 7545, and 7601(a).

Subpart H--[Amended]

0
2. A new Sec.  80.382 is added to Subpart H to read as follows:

Sec.  80.382  What requirements apply to gasoline for use in American
Samoa, Guam and the Commonwealth of the Northern Mariana Islands?

    The gasoline sulfur standards of Sec. Sec.  80.195 and 80.240(a) do
not apply to gasoline that is produced, imported, sold, offered for
sale, supplied, offered for supply, stored, dispensed, or transported
for use in the Territories of Guam, American Samoa or the Commonwealth
of the Northern Mariana Islands, provided that such gasoline is:
    (a) Designated by the refiner or importer as high sulfur gasoline
only for use in Guam, American Samoa, or the Commonwealth of the
Northern Mariana Islands;
    (b) Used only in Guam, American Samoa, or the Commonwealth of the
Northern Mariana Islands;
    (c) Accompanied by documentation that complies with the product
transfer document requirements of Sec.  80.365; and
    (d) Segregated from non-exempt high sulfur fuel at all points in
the distribution system from the point the fuel is designated as exempt
fuel only for use in Guam, American Samoa, or the Commonwealth of the
Northern

Mariana Islands, while the exempt fuel is in the United States but
outside these Territories.

PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES
AND ENGINES

0
3. The authority citation for part 86 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart S--[Amended]

0
4. Section 86.1806-05 is amended by revising paragraph (d)(2) to read
as follows:

Sec.  86.1806-05  On-board diagnostics.

* * * * *
    (d) * * *
    (2)(i) For interim non-Tier 2 and Tier 2 LDV/LLDTs and HLDT/MDPVs
produced through the 2007 model year, upon a manufacturer's written
request, EPA will consider allowing the use of an on-board diagnostic
system during the certification process that functions properly on low-
sulfur gasoline but indicates sulfur-induced passes when exposed to
high sulfur gasoline. After the 2007 model year, this provision can be
used only for interim non-Tier 2 and Tier 2 LDV/LLDTs and HLDT/MDPVs
introduced into commerce in American Samoa, Guam, and the Commonwealth
of the Northern Mariana Islands, but this provision only can be used
for such vehicles in any of those locations if low sulfur gasoline is
determined by the Administrator to be unavailable in that specific
location.
    (ii) For interim non-Tier 2 and Tier 2 LDV/LLDTs and HLDT/MDPVs, if
vehicles produced through the 2007 model year exhibit illuminations of
the emission control diagnostic system malfunction indicator light due
to high sulfur gasoline, EPA will consider, upon a manufacturer's
written request, allowing modifications to such vehicles on a case-by-
case basis so as to eliminate the sulfur induced illumination. After
the 2007 model year, this provision can be used only for interim non-
Tier 2 and Tier 2 LDV/LLDTs and HLDT/MDPVs introduced into commerce in
American Samoa, Guam, and the Commonwealth of the Northern Mariana
Islands, but this provision only can be used for such vehicles in any
of those locations if low sulfur gasoline is determined by the
Administrator to be unavailable in that specific location.
* * * * *

0
5. Section 86.1845-04 is amended by revising paragraph (a)(3) to read
as follows:

Sec.  86.1845-04  Manufacturer in-use verification testing
requirements.

    (a) * * *
    (3) Upon a manufacturer's written request, prior to in-use testing,
that presents information to EPA regarding pre-conditioning procedures
designed solely to remove the effects of high sulfur in gasoline from
vehicles produced through the 2007 model year, EPA will consider
allowing such procedures on a case-by-case basis. EPA's decision will
apply to manufacturer in-use testing conducted under this section and
to any in-use testing conducted by EPA. Such procedures are not
available for complete HDVs. After the 2007 model year, this provision
can be used only for in-use vehicles in American Samoa, Guam, and the
Commonwealth of the Northern Mariana Islands, but this provision only
can be used for such vehicles in any of those locations if low sulfur
gasoline is determined by the Administrator to be unavailable in that
specific location.
* * * * *

0
6. Section 86.1846-01 is amended by revising paragraph (a)(4) to read
as follows:

Sec.  86.1846-01  Manufacturer in-use confirmatory testing
requirements.

    (a) * * *
    (4) Upon a manufacturer's written request, prior to in-use testing,
that presents information to EPA regarding pre-conditioning procedures
designed solely to remove the effects of high sulfur in gasoline from
vehicles produced through the 2007 model year, EPA will consider
allowing such procedures on a case-by-case basis. EPA's decision will
apply to manufacturer in-use testing conducted under this section and
to any in-use testing conducted by EPA. This provision does not apply
to heavy-duty vehicles and engines. After the 2007 model year, this
provision can be used only for in-use vehicles in American Samoa, Guam,
and the Commonwealth of the Northern Mariana Islands, but this
provision only can be used for such vehicles in any of those locations
if low sulfur gasoline is determined by the Administrator to be
unavailable in that specific location.
* * * * *
 [FR Doc. E6-22310 Filed 12-27-06; 8:45 am]

BILLING CODE 6560-50-P


  SEQ CHAPTER \h \r 1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C. 20460

June 12, 2006

OFFICE OF

	SOLID WASTE AND EMERGENCY

RESPONSE

 RE:  Subpart O:  Superfund Cooperative Agreements

TO:  Federally-Recognized Indian Tribes

This letter distributes the fact sheet, Amending 40 CFR Part 35 (Subpart O):

EPA’s Cooperative Agreements and Superfund State Contracts for Superfund Response Actions.

	EPA is currently making minor changes to subpart O. Subpart O prescribes the requirements for administering cooperative agreements to States, Indian Tribes, and political subdivisions to conduct remedial actions, non-time critical removal actions, pre-remedial activities and other response actions authorized by the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), commonly referred to as Superfund.  As part of EPA’s consultation policy, I am providing to you the proposed key changes that would make it easier for Indian Tribes and intertribal consortia to receive cooperative agreements under subpart O.

	If you have questions or comments, please contact Angelo Carasea, a member of my staff, at telephone number;<PHONE_NUMBER> or at e-mail address:   HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>.  His mailing address is:  EPA, 1200 Pennsylvania Avenue, NW (5204P), Washington, DC  20460.

					Sincerely,

Victoria van Roden, Chief

State, Tribal, Site Identification Branch

Office of Site Remediation and Technology Innovation

Enclosure

  PAGE  2

  PAGE  3


[Federal Register Volume 78, Number 68 (Tuesday, April 9, 2013)]
[Rules and Regulations]
[Pages 21044-21045]
[FR Doc No: 2013-08102]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2012-1270; Airspace Docket No. 12-AEA-16]

Amendment of Class D and Class E Airspace; Reading, PA

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: This action amends Class D and Class E Airspace at Reading,
PA, as the SHAPP OM navigation aid has been decommissioned, requiring
the modification of Standard Instrument Approach Procedures (SIAPs) at
Reading Regional/Carl A. Spaatz Field. This action enhances the safety
and management of Instrument Flight Rules (IFR) operations at the
airport.

DATES: Effective 0901 UTC, June 27, 2013. The Director of the Federal
Register approves this incorporation by reference action under title 1,
Code of Federal Regulations, part 51, subject to the annual revision of
FAA Order 7400.9 and publication of conforming amendments.

FOR FURTHER INFORMATION CONTACT: John Fornito, Operations Support
Group, Eastern Service Center, Federal Aviation Administration, P.O.
Box 20636, Atlanta, Georgia 30320; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

History

    On January 28, 2013, the FAA published in the Federal Register a
notice of proposed rulemaking to amend Class D and Class E airspace at
Reading, PA (78 FR 5754) Docket No. FAA-2012-1270. Interested parties
were invited to participate in this rulemaking effort by submitting
written comments on the proposal to the FAA. No comments were received.
Class D and Class E airspace designations are published in paragraphs
5000, 6002, 6004, and 6005 respectively of FAA Order 7400.9W dated
August 8, 2012, and effective September 15, 2012, which is incorporated
by reference in 14 CFR 71.1. The Class D and Class E airspace
designations listed in this document will be published subsequently in
the Order.

The Rule

    This amendment to Title 14, Code of Federal Regulations (14 CFR)
part 71 amends Class D airspace extending upward from the surface to
2,800 feet MSL within a 4.8-mile radius of Reading Regional/Carl A.
Spaatz Field, Reading, PA, and Class E surface airspace, Class E
airspace designated as an extension of Class D, and Class E airspace
extending upward from 700 feet above the surface at Reading, Regional/
Carl A. Spaatz Field, to accommodate the new Standard Instrument
Approach Procedures developed for the airport. Decommissioning of the
SHAPP OM navigation aid has made this action necessary for continued
safety and management of IFR operations at the airport.
    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current, is
non-controversial and unlikely to result in adverse or negative
comments. It, therefore, (1) is not a ``significant regulatory action''
under Executive Order 12866; (2) is not a ``significant rule'' under
DOT Regulatory Policies and Procedures (44 FR 11034; February 26,
1979); and (3) does not warrant preparation of a Regulatory Evaluation
as the anticipated impact is so minimal. Since this is a routine matter
that only affects air traffic procedures and air navigation, it is
certified that this rule, when promulgated, does not have a significant
economic impact on a substantial number of small entities under the
criteria of the Regulatory Flexibility Act.
    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. Subtitle I, Section 106
describes the authority of the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more detail the scope of the agency's
authority. This rulemaking is promulgated under the authority described
in Subtitle VII, Part A, Subpart I, Section 40103. Under that section,
the FAA is charged with prescribing regulations to assign the use of
airspace necessary to ensure the safety of aircraft and the efficient
use of airspace. This regulation is within the scope of that authority
as it amends controlled airspace at Reading Regional/Carl A. Spaatz
Field, Reading, PA.

Environmental Review

    The FAA has determined that this action qualifies for categorical
exclusion under the National Environmental Policy Act in accordance
with FAA Order 1050.1E, ``Environmental Impacts: Policies and
Procedures,'' paragraph 311a. This airspace action is not expected to
cause any potentially significant environmental impacts, and no
extraordinary circumstances exist that warrant preparation of an
environmental assessment.

Lists of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (Air).

Adoption of the Amendment

    In consideration of the foregoing, the Federal Aviation
Administration amends 14 CFR Part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for Part 71 continues to read as follows:

    Authority:  49 U.S.C. 106(g); 40103, 40113, 40120; E.O. 10854,
24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation
Administration Order 7400.9W, Airspace Designations and Reporting
Points, dated August 8, 2012, effective September 15, 2012, is amended
as follows:

Paragraph 5000 Class D airspace.

* * * * *

AEA PA D Reading, PA [Amended]

Reading Regional/Carl A. Spaatz Field, Reading, PA
    (Lat. 40[deg]22'42'' N., long. 75[deg]57'55'' W.)

    That airspace extending upward from the surface to and including
2,800 feet MSL within a 4.8-mile radius of Reading Regional/Carl A.
Spaatz Field. This Class D airspace area is effective during
specific dates and times established in advance by a Notice to
Airmen. The effective date and time will thereafter be continuously
published in the Airport/Facility Directory.
* * * * *

AEA PA E2 Reading, PA [Amended]

Reading Regional/Carl A. Spaatz Field, Reading, PA
    (Lat. 40[deg]22'42'' N., long. 75[deg]57'55'' W.)

    That airspace extending from the surface within a 4.8-mile
radius of Reading Regional/Carl A. Spaatz Field, and within 4- miles
either side of the 172[deg] bearing from the airport, extending from
the 4.8-mile radius, to 10.1-miles south of the airport. This Class
E airspace area is effective during specific dates and times
established in advance by a Notice to Airmen. The effective date and
time will thereafter be continuously published in the Airport/
Facility Directory.

Paragraph 6004 Class E airspace designated as an extension to a
class D surface area.

* * * * *

AEA PA E4 Reading, PA [Amended]

Reading Regional/Carl A. Spaatz Field, Reading, PA
    (Lat. 40[deg]22'42'' N., long. 75[deg]57'55'' W.)

    That airspace extending from the surface within 4 miles either
side of the 172[deg] bearing from Reading Regional/Carl A. Spaatz
Field extending from the 4.8-mile radius to 10.1 miles south of the
airport. This Class E airspace area is effective during specific
dates and times established in advance by a Notice to Airmen. The
effective date and time will thereafter be continuously published in
the Airport/Facility Directory.

Paragraph 6005 Class E airspace areas extending upward from 700
feet or more above the surface of the earth.

* * * * *

AEA PA E5 Reading, PA [Amended]

Reading Regional/Carl A. Spaatz Field, Reading, PA
    (Lat. 40[deg]22'42'' N., long. 75[deg]57'55'' W.)

    That airspace extending upward from 700 feet above the surface
within a 10.3-mile radius of Reading Regional/Carl A. Spaatz Field.

    Issued in College Park, Georgia, on April 1, 2013.
Barry A. Knight,
Manager, Operations Support Group, Eastern Service Center, Air Traffic
Organization.
[FR Doc. 2013-08102 Filed 4-8-13; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 86, Number 15 (Tuesday, January 26, 2021)]
[Notices]
[Pages 7152-7155]
[FR Doc No: 2021-01588]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90949; No. SR-NYSEArca-2021-06]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Modify the NYSE
Arca Options Fee Schedule Regarding the Limits on Fees for Options
Strategy Executions

January 19, 2021.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on January 13, 2021, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to modify the NYSE Arca Options Fee Schedule
(``Fee Schedule'') regarding the Limit of Fees on Options Strategy
Executions. The Exchange proposes to implement the fee change effective
January 13, 2021. The proposed rule change is available on the
Exchange's website at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The purpose of this filing is to amend the Fee Schedule to modify
the Limit of Fees on Options Strategy Executions (``Strategy Cap''),
effective January 13, 2021.
    Currently, the Fee Schedule provides that transaction fees for OTP
Holders and OTP Firms (collectively, ``OTP Holders'') are limited or
capped at $1,000 for certain options strategy executions ``on the same
trading day,'' meaning it is a daily fee cap.\4\ Strategy executions
that qualify for the Strategy Cap are (a) reversals and conversions,
(b) box spreads, (c) short stock interest spreads, (d) merger spreads,
and (e) jelly rolls, which are described in detail in the Fee Schedule
(the ``Strategy Executions'').\5\
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    \4\ See Fee Schedule, Limit of Fees on Options Strategy
Executions, available here: https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf.
    \5\ See id.
---------------------------------------------------------------------------

    The Exchange proposes to modify the Strategy Cap to offer a lower
cap of $200 for those OTP Holders that trade at least 25,000 monthly
billable contract sides in Strategy Executions.\6\ Thus, at the end of
the month, qualifying OTP Holders would have transaction fees for their
Strategy Executions for each day of the month capped at $200 (as
opposed to $1,000 for non-qualifying OTP Holders).\7\
---------------------------------------------------------------------------

    \6\ See proposed Fee Schedule, Limit of Fees on Options Strategy
Executions.
    \7\ See id.
---------------------------------------------------------------------------

    For example, assume an OTP Holder executes the following Strategy
Executions against interest in the Trading Crowd on the third business
day of the month on behalf of a non-Customer that is not a Lead Market
Maker, which participants are subject to a $0.25 per Manual transaction
fee. Under the current Fee Schedule, an OTP Holder would be charged a
total of $1,000 in options fees, per the daily fee cap:
     Trade 1: A Reversal Conversion in DEF comprised of 3,000
call options against 3,000 put options would be $1,500 (at $0.25 per
execution), absent the $1,000 Strategy Cap.
     Trade 2: A Reversal Conversion in ABC comprised of 1,000
call options against 1,000 put options would be $500 (at $0.25 per
execution), absent the Strategy Cap, but the OTP Holder, having reached
the daily cap, would not be charged for these transactions.
    However, if, in addition to the two trades above, the OTP Holder
executes a ``jelly roll'' consisting of 5,000 October puts and 5,000
October calls against 5,000 November calls and 5,000 November puts on
the fifteenth business day of the month, the total fees for these
qualifying Strategy Executions under the proposed Fee Schedule would be
capped at $200 for this trading day, given that the total number of
contracts on day three and day fifteen is above the minimum 25,000
billable contract sides threshold. Similarly, having met this
threshold, the fees charged on Trades 1 and 2 that were executed on the
third business day would likewise be capped at $200. Thus, the fees for
each of the third and fifteenth trading days would be capped at $200
each, for a monthly total of $400 for Strategy Executions.
    The Exchange's fees are constrained by intermarket competition, as
OTP Holders may direct their order flow to any of the 16 options
exchanges, including another exchange that provides a cap on fees for
strategy executions.\8\ Thus, OTP Holders have a choice of where they
direct their order flow. This proposed change is designed to incent OTP
Holders to increase their Strategy Execution volumes by executing
(often smaller) strategies that are not necessarily economically viable
on a per symbol basis, but which may be profitable when fees on
Strategy Executions--regardless of symbol--are capped for the trading
day. The Exchange notes that all market participants stand to benefit
from increased volume, which promotes market depth, facilitates tighter
spreads and enhances price discovery, and may lead to a corresponding
increase in order flow from other market participants.
---------------------------------------------------------------------------

    \8\ See, e.g., Cboe fee schedule, footnote 13. Cboe caps fees
for each participant at $0.00 for the following strategies executed
on the same trading day: Short stock interest, reversal, conversion,
jelly roll, and merger strategies.
---------------------------------------------------------------------------

    The Exchange cannot predict with certainty whether any, or how
many, OTP Holders would avail themselves of this proposed fee change.
The Exchange believes that OTP Holders that execute Strategy Executions
on the Exchange can achieve the proposed 25,000 minimum contract sides
threshold to qualify for the proposed (reduced) Strategy Cap and that
this proposal may encourage OTP Holders to execute (and aggregate)
Strategy Executions on the

Exchange, which order flow would enhance price discovery.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\10\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities and does not unfairly discriminate between
customers, issuers, brokers or dealers.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

The Proposed Rule Change Is Reasonable
    The Exchange operates in a highly competitive market. The
Commission has repeatedly expressed its preference for competition over
regulatory intervention in determining prices, products, and services
in the securities markets. In Regulation NMS, the Commission
highlighted the importance of market forces in determining prices and
SRO revenues and, also, recognized that current regulation of the
market system ``has been remarkably successful in promoting market
competition in its broader forms that are most important to investors
and listed companies.'' \11\
---------------------------------------------------------------------------

    \11\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (S7-10-04) (``Reg NMS
Adopting Release'').
---------------------------------------------------------------------------

    The Exchange is only one of 16 options venues to which market
participants may direct their order flow. Based on publicly available
information, no single options exchange has more than 16% of the market
share of executed volume of multiply-listed equity and ETF options
trades.\12\ Therefore, no exchange possesses significant pricing power
in the execution of multiply-listed equity and ETF options order flow.
More specifically, since November 2019, the Exchange has had less than
11% market share of executed volume of multiply-listed equity and ETF
options trades.\13\
---------------------------------------------------------------------------

    \12\ The OCC publishes options and futures volume in a variety
of formats, including daily and monthly volume by exchange,
available here: https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics.
    \13\ Based on a compilation of OCC data for monthly volume of
equity-based options and monthly volume of ETF-based options, see
id., the Exchange's market share in multiply-listed equity and ETF
options increased from 9.65% for the month of November 2019 to
10.35% for the month of November 2020.
---------------------------------------------------------------------------

    The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow, or discontinue or reduce use of certain categories of
products, in response to fee changes. Accordingly, competitive forces
constrain options exchange transaction fees. Stated otherwise,
modifications to exchange transaction fees can have a direct effect on
the ability of an exchange to compete for order flow.
    The Exchange believes that the proposed modification to the
Strategy Cap is reasonable because it is designed to incent OTP Holders
to increase their Strategy Executions submitted to and executed on the
Exchange's Trading Floor. The Exchange offers a hybrid market system
and aims to balance incentives for its OTP Holders to continue to
contribute to deep liquid markets for investors on both its electronic
and open outcry platforms. The Exchange notes that all market
participants stand to benefit from any increase in volume transacted on
the Trading Floor, which promotes market depth, facilitates tighter
spreads and enhances price discovery, and may lead to a corresponding
increase in order flow from other market participants.
    To the extent that the proposed change attracts more Strategy
Executions to the Exchange, this increased (open outcry) order flow
would continue to make the Exchange a more competitive venue for order
execution, which, in turn, promotes just and equitable principles of
trade and removes impediments to and perfects the mechanism of a free
and open market and a national market system.
    Finally, to the extent the proposed change continues to attract
greater volume and liquidity, the Exchange believes the proposed change
would improve the Exchange's overall competitiveness and strengthen its
market quality for all market participants. In the backdrop of the
competitive environment in which the Exchange operates, the proposed
rule change is a reasonable attempt by the Exchange to increase the
depth of its market and improve its market share relative to its
competitors. The Exchange's fees are constrained by intermarket
competition, as OTP Holders may direct their order flow to any of the
16 options exchanges, including another exchange that provides a cap on
fees for strategy executions.\14\ Thus, OTP Holders have a choice of
where they direct their order flow--including their Strategy
Executions. The proposed rule change is designed to incent OTP Holders
to direct liquidity, and specifically Strategy Executions, to the
Exchange, thereby promoting market depth, price discovery and
improvement and enhancing order execution opportunities for market
participants.
---------------------------------------------------------------------------

    \14\ See supra note 8 (regarding Cboe capped fees for
strategies).
---------------------------------------------------------------------------

    The Exchange cannot predict with certainty whether any, or how
many, OTP Holders would avail themselves of this proposed fee change.
The Exchange believes that OTP Holders that execute Strategy Executions
on the Exchange can achieve the proposed 25,000 minimum contract sides
threshold to qualify for the proposed (reduced) Strategy Cap and that
this proposal may encourage OTP Holders to execute (and aggregate)
Strategy Executions on the Exchange, which order flow would enhance
price discovery.
The Proposed Rule Change Is an Equitable Allocation of Credits and Fees
    The Exchange believes the proposed rule change is an equitable
allocation of its fees and credits. The proposal is based on the amount
and type of business transacted on the Exchange and OTP Holders can opt
to avail themselves of the Strategy Cap or not. The proposed Strategy
Cap, as modified, applies to all qualifying Strategy Executions
transacted on the Trading Floor. The Exchange believes that the
proposed change would facilitate the execution of orders via open
outcry, thus enhancing price discovery as a result of increased
liquidity. Moreover, the proposal is designed to encourage OTP Holders
to aggregate all Strategy Executions at the Exchange as a primary
execution venue. To the extent that the proposed change attracts more
Strategy Executions to the Exchange, this increased order flow would
continue to make the Exchange a more competitive venue for order
execution. Thus, the Exchange believes the proposed rule change would
improve market quality for all market participants on the Exchange and,
as a consequence, attract more order flow to the Exchange thereby
improving market-wide quality and price discovery.
The Proposed Rule Change Is Not Unfairly Discriminatory
    The Exchange believes it is not unfairly discriminatory to modify
the Strategy Cap because the proposed modification would be available
to all similarly-situated market participants on an equal and non-
discriminatory basis.
    The proposal is based on the amount and type of business transacted
on the Exchange and OTP Holders are not obligated to try to achieve the
modified Strategy Cap, nor are they obligated to

execute any Strategy Executions. Rather, the proposal is designed to
encourage OTP Holders to utilize the Exchange as a primary trading
venue for Strategy Executions (if they have not done so previously) or
increase volume sent to the Exchange. To the extent that the proposed
change attracts more Strategy Executions to the Exchange, this
increased order flow would continue to make the Exchange a more
competitive venue for, among other things, order execution. Thus, the
Exchange believes the proposed rule change would improve market quality
for all market participants on the Exchange and, as a consequence,
attract more order flow to the Exchange thereby improving market-wide
quality and price discovery. The resulting increased volume and
liquidity would provide more trading opportunities and tighter spreads
to all market participants and thus would promote just and equitable
principles of trade, remove impediments to and perfect the mechanism of
a free and open market and a national market system and, in general, to
protect investors and the public interest.
    Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition.
    For the foregoing reasons, the Exchange believes that the proposal
is consistent with the Act.

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

    In accordance with Section 6(b)(8) of the Act, the Exchange does
not believe that the proposed rule change would impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Instead, as discussed above, the Exchange believes
that the proposed changes would encourage the submission of additional
liquidity to a public exchange, thereby promoting market depth, price
discovery and transparency and enhancing order execution opportunities
for all market participants. As a result, the Exchange believes that
the proposed change furthers the Commission's goal in adopting
Regulation NMS of fostering integrated competition among orders, which
promotes ``more efficient pricing of individual stocks for all types of
orders, large and small.'' \15\
---------------------------------------------------------------------------

    \15\ See Reg NMS Adopting Release, supra note 11, at 37499.
---------------------------------------------------------------------------

    Intramarket Competition. The proposed change is designed to attract
additional order flow (particularly Strategy Executions) to the
Exchange. The Exchange believes that the proposed modification to the
Strategy Cap would incent market participants to direct their Strategy
Execution volume to the Exchange. Greater liquidity benefits all market
participants on the Exchange and increased Strategy Executions would
increase opportunities for execution of other trading interest. The
proposed reduced Strategy Cap would be available to all similarly-
situated market participants that incur transaction fees on Strategy
Executions, and, as such, the proposed change would not impose a
disparate burden on competition among market participants on the
Exchange.
    Intermarket Competition. The Exchange operates in a highly
competitive market in which market participants can readily favor one
of the 16 competing option exchanges if they deem fee levels at a
particular venue to be excessive. In such an environment, the Exchange
must continually adjust its fees to remain competitive with other
exchanges and to attract order flow to the Exchange. Based on publicly-
available information, and excluding index-based options, no single
exchange has more than 16% of the market share of executed volume of
multiply-listed equity and ETF options trades.\16\ Therefore, no
exchange possesses significant pricing power in the execution of
multiply-listed equity and ETF options order flow. More specifically,
in the third quarter of 2020, the Exchange had less than 11% market
share of executed volume of multiply-listed equity and ETF options
trades.\17\
---------------------------------------------------------------------------

    \16\ See supra note 12.
    \17\ Based on a compilation of OCC data for monthly volume of
equity-based options and monthly volume of ETF-based options, see
supra note 13, the Exchange's market share in multiply-listed equity
and ETF options increased from 9.65% for the month of November 2019
to 10.35% for the month of November 2020.
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change reflects this
competitive environment because it modifies the Exchange's fees in a
manner designed to encourage OTP Holders to direct trading interest
(particularly Strategy Executions) to the Exchange, to provide
liquidity and to attract order flow. To the extent that this purpose is
achieved, all the Exchange's market participants should benefit from
the improved market quality and increased opportunities for price
improvement.
    The Exchange believes that the proposed change could promote
competition between the Exchange and other execution venues, including
those that currently offer similar Strategy Caps, by encouraging
additional orders to be sent to the Exchange for execution.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \18\ of the Act and subparagraph (f)(2) of Rule
19b-4 \19\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \20\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2021-06 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2021-06. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use

only one method. The Commission will post all comments on the
Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEArca-2021-06, and should be
submitted on or before February 16, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
---------------------------------------------------------------------------

    \21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-01588 Filed 1-25-21; 8:45 am]
BILLING CODE 8011-01-P


Crops without current registration were removed by HED from the list provided by BEAD (D382732, Arthur H. Grube, 10/21/10).  Onions (Section 18 only) were also removed by HED since the proposed use on onions will be entered at 100% CT.  Alfalfa and tangelos were removed by HED since there are no entries for alfalfa and tangelos in DEEM.  Pistachios were removed by HED since percent crop treated was not calculated for pistachios.

2For chronic, the % CT was used in calculations; if the FHE value was greater than the product of residue level x processing factor x % crop treated, then the FHE value of 0.0002 ppm was used.

Abamectin	Dietary Exposure Assessment	DP Number:	D380796

PC Code: 122804 ___________________________________________________________________

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