[Federal Register Volume 77, Number 198 (Friday, October 12, 2012)]
[Proposed Rules]
[Pages 62191-62200]
[FR Doc No: 2012-25158]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2009-0710; FRL-9740-4]

Approval and Promulgation of Air Quality Implementation Plans;
New Mexico; Infrastructure and Interstate Transport Requirements for
the 2006 PM2.5 NAAQS

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve the submittal from the State of
New Mexico pursuant to the Clean Air Act (CAA or Act) that addresses
the infrastructure elements specified in the CAA necessary to
implement, maintain, and enforce the 2006 fine particulate matter
(PM2.5) national ambient air quality standard (NAAQS or
standard). We are proposing to find that the current New Mexico State
Implementation Plan (SIP) meets the infrastructure elements for the
2006 PM2.5 NAAQS. We are also proposing to find that the
current New Mexico SIP meets the CAA requirement which addresses the
requirement that emissions from sources in the area do not interfere
with prevention of significant deterioration (PSD) measures required in
the SIP of any other state, with regard to the 2006 PM2.5
NAAQS.

DATES: Comments must be received on or before November 13, 2012.

ADDRESSES: Submit your comments, identified by Docket No. EPA-R06-OAR-
2009-0710, by one of the following methods:
     Federal Rulemaking Portal: http://www.regulations.gov.
Follow the online instructions for submitting comments.
     Email: Mr. Guy Donaldson at<EMAIL_ADDRESS>Please
also send a copy by email to the person listed in the FOR FURTHER
INFORMATION CONTACT section below.
     Fax: Mr. Guy Donaldson, Chief, Air Planning Section (6PD-
L), at fax number<PHONE_NUMBER>.
     Mail: Mr. Guy Donaldson, Chief, Air Planning Section (6PD-
L), Environmental Protection Agency, 1445 Ross Avenue, Suite 1200,
Dallas, Texas 75202-2733.
     Hand or Courier Delivery: Mr. Guy Donaldson, Chief, Air
Planning Section (6PD-L), Environmental Protection Agency, 1445 Ross
Avenue, Suite 1200, Dallas, Texas 75202-2733. Such deliveries are
accepted only between the hours of 8 a.m. and 4 p.m. weekdays, and not
on legal holidays. Special arrangements should be made for deliveries
of boxed information.

    Instructions: Direct your comments to Docket ID No. EPA-R06-OAR-
2009-0710. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
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 www.regulations.gov or email. The
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 email comment
directly to EPA without going through www.regulations.gov, your email
address will be automatically captured and included as part of the
comment that is placed in the public docket and made available on the
Internet. If you submit an electronic comment, EPA recommends that you
include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket visit the EPA Docket Center
homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: All documents in the docket are listed in the
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 www.regulations.gov or in hard copy at the Air Planning Section
(6PD-L), Environmental Protection Agency, 1445 Ross Avenue, Suite 700,
Dallas, Texas 75202-2733. The file will be made available by
appointment for public inspection in the Region 6 FOIA Review Room
between the hours of 8:30 a.m. and 4:30 p.m. weekdays except for legal
holidays. Contact the person listed in the FOR FURTHER INFORMATION
CONTACT paragraph below or Mr. Bill Deese at<PHONE_NUMBER> to make an
appointment. If possible, please make the appointment at least two
working days in advance of your visit. There will be a fee of 15 cents
per page for making photocopies of documents. On the day of the visit,
please check in at the EPA Region 6 reception area at 1445 Ross Avenue,
Suite 700, Dallas, Texas.
    The State submittal is also available for public inspection during
official business hours by appointment: New Mexico Environment
Department (NMED), Air Quality Bureau, 1301 Siler Road, Building B,
Santa Fe, New Mexico 87507, telephone<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Mr. John Walser, Air Planning Section
(6PD-L), Environmental Protection Agency, Region 6, 1445 Ross Avenue,
Suite 700, Dallas, Texas 75202-2733, telephone<PHONE_NUMBER>; fax number
214-665-6762; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us,''
and ``our'' means EPA.

Table of Contents

I. Background
    A. What is the background for this rulemaking?
    B. What elements are required under Section 110(a)(2)?
II. The State's Submittal
III. EPA's Evaluation
IV. Proposed Action
V. Statutory and Executive Order Reviews

I. Background

A. What is the background for this rulemaking?

    On October 17, 2006, we published revised standards for PM (71 FR
61144). For PM2.5, the annual standard of 15 [mu]g/m\3\ was
retained, and the 24-hour standard was revised to 35 [mu]g/m\3\. For
PM10 the annual standard was revoked, and the 24-hour
standard (150 [mu]g/m\3\) was retained.

    Under sections 110(a)(1) and (2) of the Act, states are required to
submit SIPs \1\ that provide for the implementation, maintenance, and
enforcement (the infrastructure) of a new or revised NAAQS within three
years following the promulgation of the NAAQS, or within such shorter
period as EPA may prescribe. Section 110(a)(2) lists the specific
infrastructure elements that must be incorporated into the SIPs,
including for example, requirements for air pollution control measures,
and monitoring that are designed to assure attainment and maintenance
of the NAAQS. A table listing all 14 infrastructure elements is
included in subsection B of section I of this proposed rulemaking. Thus
states were required to submit such SIPs for the 2006 PM2.5
NAAQS to EPA no later than September 21, 2009.
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    \1\ State Implementation Plans only apply on State lands and do
not apply in Indian Country.
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    On September 25, 2009, we issued ``Guidance on SIP Elements
Required Under Sections 110(a)(1) and (2) for the 2006 24-Hour Fine
Particle (PM2.5) National Ambient Air Quality Standards
(NAAQS),'' Memorandum also from William T. Harnett, Director, AQPD,
OAQPS. Each of these guidance memos addresses the SIP elements found in
110(a)(2). The guidance states that, to the extent that existing SIPs
already meet the requirements, states need only certify that fact to
us.
    On June 12, 2009, the Governor of New Mexico submitted a letter
certifying that NMED has evaluated the New Mexico SIP and found that
the SIP does satisfy all the requirements of section 110(a)(1) and (2)
for the 2006 PM2.5 NAAQS. The June 12, 2009 submittal
included a table with an explanation of how the current New Mexico SIP
meets the requirements of section 110(a)(2) for the 2006
PM2.5 NAAQS. On July 15, 2011, we found that New Mexico's
current SIP met all the requirements of section 110(a)(2) for the 1997
8-hour ozone and 1997 PM2.5 NAAQS (see 76 FR 41698). For
detailed information concerning the background for our previous
approval, please see Docket I.D. No. EPA-R06-OAR-2009-0647 for that
rulemaking.
    On July 6, 2011, WildEarth Guardians and Sierra Club filed an
amended complaint related to EPA's failure to take action on the SIP
submittal related to the ``infrastructure'' requirements for the 2006
24-hour PM2.5 NAAQS. On October 20, 2011, EPA entered into a
consent decree with WildEarth Guardians and Sierra Club which required
EPA, among other things, to complete a Federal Register notice of the
Agency's proposed action either approving, disapproving, or approving
in part and disapproving in part New Mexico's 2006 24-hour
PM2.5 NAAQS Infrastructure SIP submittal addressing the
applicable requirements of sections 110(a)(2)(A)-(H), (J)-(M), and
section 110(a)(2)(D)(i) interstate transport requirements, by September
30, 2012.
    In today's action, we are proposing to approve New Mexico's 2006
24-hour PM2.5 NAAQS Infrastructure SIP submittal addressing
the applicable requirements of sections 110(a)(2)(A)-(H), (J)-(M), and
section 110(a)(2)(D)(i) interstate transport requirements. This action
is not approving any specific rule, but rather proposing that New
Mexico's already approved SIP, meets certain CAA requirements.
    Additional information: This rulemaking will not cover four
substantive issues that are not integral to acting on a state's
infrastructure SIP submission: (i) Existing provisions related to
excess emissions during periods of start-up, shutdown, or malfunction
at sources, that may be contrary to the CAA and EPA's policies
addressing such excess emissions (``SSM''); (ii) existing provisions
related to ``director's variance'' or ``director's discretion'' that
purport to permit revisions to SIP approved emissions limits with
limited public process or without requiring further approval by EPA,
that may be contrary to the CAA (``director's discretion''); (iii)
existing provisions for minor source NSR programs that may be
inconsistent with the requirements of the CAA and EPA's regulations
that pertain to such programs (``minor source NSR''); and, (iv)
existing provisions for PSD programs that may be inconsistent with
current requirements of EPA's ``Final NSR Improvement Rule'' (67 FR
80186, December 31, 2002), as amended by 72 FR 32526 (June 13, 2007)
(``NSR Reform''). Instead, EPA has indicated that it has other
authority to address any such existing SIP defects in other
rulemakings, as appropriate. A detailed rationale for why these four
substantive issues are not part of the scope of infrastructure SIP
rulemakings can be found in EPA's July 13, 2011, final rule entitled,
``Infrastructure SIP Requirements for the 1997 8-hour Ozone and
PM2.5 National Ambient Air Quality Standards'' in the
section entitled, ``What is the scope of this final rulemaking?'' (see
76 FR 41076).

B. What elements are required under section 110(a)(2)?

    Section 110(a) of the Clean Air Act (Act) requires that each state
adopt and submit to EPA, within 3 years (or such shorter time period as
the Administrator may prescribe) after the promulgation of a primary or
secondary NAAQS or any revision thereof, a SIP that provides for the
implementation, maintenance, and enforcement of such NAAQS. EPA refers
to these specific submissions as ``infrastructure'' SIPs because they
are intended to address basic structural SIP requirements for new or
revised NAAQS.
    Pursuant to the September 25, 2009, EPA guidance for addressing the
SIP infrastructure elements required under sections 110(a)(1) and (2)
for the 2006 PM2.5 NAAQS, there are 14 essential structural
elements that that must be included in the SIP. These are listed in
Table 1 below.
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    \2\ Section 110(a)(2)(D)(ii) of the Act requires compliance with
sections 115 and 126 of the Act, relating to international and
interstate pollution abatement, respectively. Under section
126(a)(1), SIPs must require notification to nearby, affected states
of ``major proposed new (or modified) sources'' in either of two
instances: (1) when the source is subject to PSD (section
126(a)(1)(A)); or (2) when the source ``may significantly contribute
to levels of air pollution in excess'' of the NAAQS in air quality
control regions in other states (section 126(a)(1)(B)). Any new
major stationary source or major modification in an attainment or
unclassifiable area is subject to PSD. Therefore, in attainment or
unclassifiable areas, any source that potentially falls under
section 126(a)(1)(B) must also fall under (A). Thus, to the extent
that section 126(a)(1)(B) provides any requirements separate from
those in section 126(a)(1)(A), it does so only for major proposed
new or modified sources in nonattainment areas, that is, for sources
subject to nonattainment NSR. The requirements of section
126(a)(1)(B) should therefore be addressed in states with
nonattainment areas through those states' nonattainment NSR
programs. As explained elsewhere in this proposed rulemaking,
nonattainment NSR programs are not a subject of this action, so EPA
will not address the requirements of section 126(a)(1)(B) in the
infrastructure SIPs.
    \3\ Section 110(a)(2)(I) pertains to the nonattainment planning
requirements of part D, Title I of the Act. This section is not
governed by the 3-year submission deadline of section 110(a)(1)
because SIPs incorporating necessary local nonattainment area
controls are not due within 3 years after promulgation of a new or
revised NAAQS, but are due at the time the nonattainment area plan
requirements are due pursuant to section 172. Thus this action does
not cover section 110(a)(2)(I).

          Table 1--Section 110(a)(2) Elements Required in SIPs
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      Clean Air Act citation                  Brief description
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Section 110(a)(2)(A)..............  Emission limits and other control
                                     measures.
Section 110(a)(2)(B)..............  Ambient air quality monitoring/data
                                     system.
Section 110(a)(2)(C)..............  Program for enforcement of control
                                     measures.
Section 110(a)(2)(D)(ii) \2\......  Interstate and international
                                     transport.
Section 110(a)(2)(E)..............  Adequate resources.
Section 110(a)(2)(F)..............  Stationary source monitoring system.
Section 110(a)(2)(G)..............  Emergency power.
Section 110(a)(2)(H)..............  Future SIP revisions.
Section 110(a)(2)(J) \3\..........  Consultation with government
                                     officials.
Section 110(a)(2)(J)..............  Public notification.
Section 110(a)(2)(J)..............  Prevention of significant
                                     deterioration (PSD) and visibility
                                     protection.
Section 110(a)(2)(K)..............  Air quality modeling/data.
Section 110(a)(2)(L)..............  Permitting fees.
Section 110(a)(2)(M)..............  Consultation/participation by
                                     affected local entities.
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    Two elements identified in section 110(a)(2) are not governed by
the three-year submission deadline of section 110(a)(1) and are
therefore not addressed in this action. These elements relate to part D
of title I of the CAA, and submissions to satisfy them are not due
within three years after promulgation of a new or revised NAAQS, but
rather are due at the same time nonattainment area plan requirements
are due under section 172. The two elements are: (i) Section
110(a)(2)(C) to the extent it refers to permit programs required under
part D (nonattainment New Source Review (NSR)), and (ii) section
110(a)(2)(I), pertaining to the nonattainment planning requirements of
part D. As a result, this action does not address infrastructure
elements related to the nonattainment NSR portion of section
110(a)(2)(C) or related to 110(a)(2)(I).

II. The State's Submittal

    New Mexico certified that the New Mexico SIP contains provisions
that ensure the 2006 PM2.5 NAAQS are implemented,
maintained, and enforced in New Mexico. On June 12, 2009, the Governor
of New Mexico submitted to EPA the Clean Air Act Section 110(a)(1) and
(2) requirements in the current New Mexico SIP that address the
infrastructure elements specified in the CAA section 110(a)(2),
necessary to implement, maintain, and enforce the 2006 PM2.5
NAAQS. The June 12, 2009 submittal included a cover letter from the
Governor of New Mexico to the EPA Region 6 Regional Administrator, an
executive summary discussion, and a SIP matrix listing New Mexico's
compliance with state regulations and each section 110(a)(2)
infrastructure element for PM2.5.
    We are proposing to approve the June 12, 2009 submittal since it
addresses the infrastructure SIP requirements for the 2006
PM2.5 NAAQS. A copy of the submittal can be found in the
electronic docket for this action (Docket ID No. EPA-R06-OAR-2009-
0710).

III. EPA's Evaluation

    The New Mexico submittal addresses the elements of Section
110(a)(2) as described below. We provide additional background
information and a more detailed review and analysis of the New Mexico
infrastructure SIP elements in the Technical Support Document (TSD),
located in the electronic docket for this proposed rulemaking.
    Enforceable emission limits and other control measures, pursuant to
section 110(a)(2)(A): Section 110(a)(2)(A) requires that all measures
and other elements in the SIP be enforceable. This provision does not
require the submittal of regulations or emission limits developed
specifically for attaining the 2006 PM2.5 standards. Those
regulations are due later as part of attainment demonstrations.
    The New Mexico Environmental Improvement Act, found in Chapter 74,
Article 1 of the New Mexico Statutes Annotated 1978 (denoted NMSA 1978
74-1), created the New Mexico Environment Department (NMED) and the New
Mexico Environmental Improvement Board (EIB). The New Mexico Air
Quality Control Act codified at NMSA 1978 74-2, delegates authority to
the EIB to adopt, promulgate, publish, amend and repeal regulations
consistent with the Air Quality Control Act to attain and maintain
NAAQS and prevent or abate air pollution. See NMSA 1978 74-2-5(B)(1).
The Air Quality Control Act also designates the NMED as the State's air
pollution control agency and the Environmental Improvement Act provides
the NMED with enforcement authority. The SIP rule at Title 20 of the
New Mexico Administrative Code (denoted as 20 NMAC) describes NMED as
the State's air pollution control agency and its enforcement authority,
referencing the NMSA 1978 (44 FR 21019, April 9, 1979; revised 49 FR
44101, November 2, 1984; recodification approved in 62 FR 50518,
September 26, 1997).
    The NMED has promulgated rules to limit and control emissions of
fine particulate matter (PM2.5), sulfur dioxide
(SO2), nitrogen oxides (NOX) and volatile organic
compounds (VOCs).\4\ These rules include emission limits, control
measures, permits, fees, and compliance schedules and are found in
Title 20, chapter 2 of the NMAC \5\ (denoted 20.2 NMAC): 20.2 NMAC
parts 3, 5, 7-8, 10-22, 30-34, 40-41, 72-75, and 98-99.
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    \4\ NOX and VOCs are precursors to ozone. PM can be
emitted directly and secondarily formed; the latter is the result of
NOX and SO2 precursors combining with ammonia
to form ammonium nitrate and ammonium sulfate.
    \5\ Title 20 addresses Environmental Protection and chapter 2
addresses Air Quality.
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    In this proposed action, EPA is not proposing to approve or
disapprove any existing New Mexico SIP provisions with regard to excess
emissions during startup, shutdown, or malfunction (SSM) of operations
at a facility.\6\ EPA believes that a number of states may have SSM SIP
provisions that are contrary to the Act and existing EPA guidance,\7\
and the Agency plans to address such state regulations in the future.
In the meantime, EPA encourages any state having a deficient SSM
provision to take steps to correct it as soon as possible. Similarly,
in this proposed action, EPA is not proposing to approve or disapprove
any existing

state rules with regard to director's discretion or variance
provisions. EPA believes that a number of states may have such
provisions that are contrary to the Act and existing EPA guidance (52
FR 45044, November 24, 1987),\8\ and the Agency plans to take action in
the future to address such state regulations. In the meantime, EPA
encourages any state having a director's discretion or variance
provision in its SIP which is contrary to the Act and EPA guidance to
take steps to correct the deficiency as soon as possible.
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    \6\ EPA approved New Mexico's current provisions regarding
excess emissions occurring during startup, shutdown, and malfunction
(SSM) of operations at a facility on September 14, 2009 (74 FR
46910).
    \7\ ``State Implementation Plans (SIPs): Policy Regarding Excess
Emissions During Malfunctions, Startup, and Shutdown,'' Memorandum
from Steven A. Herman, Assistant Administrator for Enforcement and
Compliance Assurance, and Robert Perciasepe, Assistant Administrator
for Air and Radiation, dated August 11, 1999.
    \8\ The section addressing exemptions and variances is found on
p. 45109 of the 1987 rulemaking.
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    A detailed list of the applicable 20.2 NMAC parts discussed above
is provided in the TSD. New Mexico's SIP clearly contains enforceable
emission limits and other control measures, which are in the federally
enforceable SIP. EPA is proposing to find that the New Mexico SIP meets
the requirements of section 110(a)(2)(A) with respect to the 2006
PM2.5 NAAQS.
    Ambient air quality monitoring/data analysis system, pursuant to
section 110(a)(2)(B): Section 110(a)(2)(B) requires SIPs to include
provisions for establishment and operation of ambient air quality
monitors, collecting and analyzing ambient air quality data, and making
these data available to EPA upon request. The NMED operates and
maintains a statewide network of air quality monitors; data are
collected, results are quality assured, and the data are submitted to
EPA's Air Quality System \9\ on a regular basis. New Mexico's Statewide
Air Quality Surveillance Network was approved by EPA on August 6, 1981
(46 FR 40005), and consists of stations that measure ambient
concentrations of the six criteria pollutants, including
PM2.5. The air quality surveillance network undergoes annual
review by EPA. On July 7, 2011, NMED submitted its 2011 Annual Air
Monitoring Network Plan (AAMNP) that included the plans for the 2006
PM2.5 NAAQS. EPA approved New Mexico's 2011 AAMNP on January
13, 2012.\10\ The NMED Web site provides the PM2.5 monitor
locations, and current and historical data (http://air.nmenv.state.nm.us/).
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    \9\ The Air Quality System (AQS) is EPA's repository of ambient
air quality data. AQS stores data from over 10,000 monitors, 5000 of
which are currently active. State, Local and Tribal agencies collect
the data and submit it to AQS on a periodic basis.
    \10\ A copy of our approval letter is available in the docket
for this rulemaking.
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    In summary, New Mexico meets the requirement to establish, operate,
and maintain an ambient air monitoring network, collect and analyze the
monitoring data, and make the data available to EPA upon request. EPA
is proposing to find that the current New Mexico SIP meets the
requirements of section 110(a)(2)(B) with respect to the 2006
PM2.5 NAAQS.
    Program for enforcement of control measures and regulation of the
modification and construction of any stationary source within the areas
covered by the plan as necessary to assure that NAAQS are achieved,
including a permit program, as required by Parts C and D, pursuant to
section 110(a)(2)(C): Regarding a program for enforcement of control
measures, as stated previously, the Air Quality Control Act designates
the NMED as the State's air pollution control agency and the
Environmental Improvement Act provides the NMED with authority to
enforce the state's environmental quality rules. The NMED established
rules governing emissions of the criteria pollutants and their
precursors throughout the State and these rules are in the federally
enforceable SIP. The rules in 20.2 NMAC parts 3, 5, 7-8, 10-22, 30-34,
40-41, 72-75, and 98-99 include allowable emission rates, compliance,
control plan requirements, actual and allowable emissions, monitoring
and testing requirements, recordkeeping and reporting requirements, and
control schedules. These rules clarify the boundaries beyond which
regulated entities in New Mexico can expect enforcement action.
    To meet the requirement for having a program for the regulation of
the modification and construction of any stationary source within the
areas covered by the plan as necessary to assure that national ambient
air quality standards are achieved, including a permit program as
required by Parts C and D of the CAA, generally, the State is required
to have SIP-approved PSD, Nonattainment, and Minor NSR permitting
programs adequate to implement the 2006 PM2.5 NAAQS. We are
not evaluating nonattainment-related provisions, such as the
Nonattainment NSR (NNSR) program required by part D in 110(a)(2)(C) and
measures for attainment required by section 110(a)(2)(I), as part of
the infrastructure SIPs for this NAAQS because these submittals are
required beyond the date (3 years from NAAQS promulgation) that section
110 infrastructure SIP submittals are required.
    PSD programs apply in areas that are meeting the NAAQS, referred to
as areas in attainment, and in areas for which there is insufficient
information to designate as either attainment or nonattainment,
referred to as unclassifiable areas. New Mexico's PSD program was
conditionally approved into the SIP on February 27, 1987 (52 FR 5964)
and fully approved on August 15, 2011 (76 FR 41698). In addition,
revisions to New Mexico's PSD program were approved into the SIP on
August 21, 1990 (55 FR 34013), May 2, 1991 (56 FR 20137), October 15,
1996 (61 FR 53639), March 10, 2003 (68 FR 11316), December 24, 2003 (68
FR 74483), September 5, 2007 (72 FR 50879), November 26, 2010 (75 FR
72688) and July 20, 2011 (76 FR 43149). Additionally, on June 11, 2009
and May 23, 2011, New Mexico submitted to EPA SIP revisions that revise
the state's PSD and NNSR permitting regulations to address the
permitting requirements associated with the NAAQS for 8-hour ozone and
PM2.5, respectively. EPA approved the portions of the June
11, 2009 submittal associated with implementing NOX as a
precursor (75 FR 72688) as necessary to implement the 1997 ozone
standard. EPA has proposed approval of the May 23, 2011 revision in a
Federal Register notice signed on September 28, 2012, as these elements
are necessary for implementation of the PM2.5 standard.
Specific details regarding our proposed approval of these submittals is
available in a separate rulemaking and can be found in the Docket ID
EPA-R06-OAR-2011-0033.
    PM2.5 PSD Permitting: To implement the PSD permitting component of
section 110(a)(2)(C) for the 2006 PM2.5 NAAQS, states were
required to submit the necessary SIP revisions to EPA by May 16, 2011
and July 20, 2012 pursuant to EPA's NSR PM2.5 Rule finalized
May 16, 2008 (73 FR 28321) and EPA's PM2.5 Increment--
Significant Impact Levels (SILs)--Significant Monitoring Concentrations
(SMC) Rule (75 FR 64864) finalized October 20, 2010, respectively. On
May 23, 2011, the Governor submitted necessary revisions to the New
Mexico SIP to amend the PSD program to meet the 2006 PM2.5
NAAQS implementation requirements. To address the requirements of EPA's
May 16, 2008 NSR PM2.5 Rule, New Mexico adopted rule
revisions to establish (1) The requirement for NSR permits to address
directly emitted PM2.5 and precursor pollutants; (2)
significant emission rates for direct PM2.5 and precursor
pollutants (SO2 and NOX) and (3) the requirement
that condensable PM be addressed in enforceable PM, PM10 and
PM2.5 emission limits included in PSD permits. To address
the requirements of EPA's October 20, 2010 PM2.5 PSD
Increment--SILs--SMC Rule, New

Mexico updated its PSD rules to establish the allowable
PM2.5 increments,\11\ and the optional screening tools
called significant impact levels (SILs), and significant monitoring
concentrations (SMCs).
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    \11\ Under section 165(a)(3) of the Act, a PSD permit applicant
must demonstrate that emissions from the proposed construction and
operation of a facility ``will not cause, or contribute to, air
pollution in excess of any (A) maximum allowable increase or maximum
allowable concentration for any pollutant * * *.'' The ``maximum
allowable increase'' of an air pollutant that is allowed to occur
above the applicable baseline concentration for that pollutant is
known as the PSD increment. New Mexico revised their PSD program
(20.2.74 NMAC) to include the allowable PSD increments. For example,
for Class II areas, the allowable PM2.5 PSD increment is
4 [mu]g/m\3\ annual arithmetic mean, and 9 [mu]g/m\3\ 24-hour
maximum, as outlined in Table 4 of <IP_ADDRESS>4 NMAC.
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    In a separate rulemaking, EPA proposes to approve the May 23, 2011
SIP revisions to New Mexico's PSD permitting regulations that implement
the provisions for PM2.5 permitting because EPA found those
rule revisions adequate and necessary to implement the 2006
PM2.5 NAAQS. We have proposed the New Mexico PSD program
satisfies both the May 16, 2008 (73 FR 28321) and October 20, 2010
PM2.5 PSD rulemakings (75 FR 64864, effective December 20,
2010) and a complete analysis is provided in the TSD for the proposed
action signed on September 28, 2012.
    GHG PSD Permitting: New Mexico has the authority to issue permits
under the SIP-approved PSD program to sources of GHG emissions (75 FR
82536, December 30, 2010).\12\ The Tailoring Rule established
thresholds that phase in the applicability of PSD requirements to GHG
sources, starting with the largest GHG emitters, and were designed to
relieve the overwhelming administrative burdens and costs associated
with the dramatic increase in permitting burden that would have
resulted from applying PSD requirements to GHG emission increases at or
above only the mass-based statutory thresholds of 100/250 tpy generally
applicable to all PSD-regulated pollutants starting on January 2, 2011.
However, EPA recognized that even after it finalized the Tailoring
Rule, many SIPs with approved PSD programs would, until they were
revised, continue to apply PSD at the statutory thresholds, even though
the states would not have sufficient resources to implement the PSD
program at those levels. EPA consequently implemented its ``PSD SIP
Narrowing Rule'' and narrowed its approval of those provisions of
previously approved SIPs of 24 states, including New Mexico, that apply
PSD to GHG emission increases from sources emitting GHGs below the
Tailoring Rule thresholds (75 FR 82536, December 30, 2010). Through the
PSD SIP Narrowing Rule, EPA withdrew its previous approvals of those
programs to the extent the SIPs apply PSD to increases in GHG emissions
from GHG-emitting sources below the Tailoring Rule thresholds. The
portions of the PSD programs regulating GHGs from GHG-emitting sources
with emission increases at or above the Tailoring Rule thresholds
remained approved. The effect of EPA narrowing its approval in this
manner is that the provisions of previously approved SIPs that apply
PSD to GHG emissions increases from sources emitting GHGs below the
Tailoring Rule thresholds have the status of having been submitted by
the state but not yet acted upon by EPA (75 FR 82536, December 30,
2010).
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    \12\ On June 24, 2010, the State submitted a letter to EPA
stating that current New Mexico rules require regulating GHGs at the
existing 100/250 tpy threshold, rather than at the higher thresholds
set in the Tailoring Rule because the State does not have the
authority to apply the meaning of the term ``subject to regulation''
established in the Tailoring Rule. New Mexico also submitted a
letter on September 14, 2010, in response to the proposed GHG SIP
Call again confirming that EPA correctly classified New Mexico as a
State with authority to apply PSD requirements to GHGs. The
September 14, 2010, letter also identifies that NMED is pursuing
rulemaking activity to define the terms ``greenhouse gas'' and
``subject to regulation.'' These two letters are in the docket for
this rulemaking. As explained elsewhere in this rulemaking, on
November 10, 2010, New Mexico adopted revisions to the State's PSD
rules to implement the GHG thresholds established in EPA's GHG
Tailoring Rule and submitted the corresponding SIP revision to EPA
on December 1, 2010. On April 14, 2011, EPA proposed approval of New
Mexico's GHG rules submitted on December 1, 2010 (76 FR 20907). EPA
approved the December 1, 2010 submittal on August 19, 2011 (76 FR
43149).
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    On November 10, 2010, New Mexico adopted revisions to the State's
PSD rules to implement the GHG thresholds established in EPA's GHG
Tailoring Rule and submitted the corresponding SIP revision to EPA on
December 1, 2010. On April 14, 2011, EPA proposed approval of New
Mexico's GHG rules submitted on December 1, 2010 (76 FR 20907). On
August 19, 2011, EPA approved New Mexico's GHG rules submitted on
December 1, 2010 (see 76 FR 43149 dated July 20, 2011).
    Minor Source Permitting: Section 110(a)(2)(C) creates ``a general
duty on States to include a program in their SIP that regulates the
modification and construction of any stationary source as necessary to
assure that the NAAQS are achieved'' (70 FR 71612, 71677). EPA provides
states with a ``broad degree of discretion'' in implementing their
Minor NSR programs (71 FR 48696, 48700). The ``considerably less
detailed'' regulations for minor NSR are provided in 40 CFR 51.160
through 51.164. EPA has determined that New Mexico's Minor NSR program
adopted pursuant to section 110(a)(2)(C) of the Act regulates emissions
of all regulated air contaminants for which there is a NAAQS
(<IP_ADDRESS> NMAC). New Mexico's Minor NSR permitting requirements are
found at 20.2.72 NMAC and were approved into the SIP on May 14, 1973
(38 FR 12702).\13\ In this action, EPA is proposing to approve New
Mexico's infrastructure SIP for the 2006 PM2.5 NAAQS with
respect to the general requirement of section 110(a)(2)(C) to include a
program in the SIP that regulates the modification and construction of
any stationary source as necessary to assure that the NAAQS are
achieved.
---------------------------------------------------------------------------

    \13\ Revisions to New Mexico's minor source permitting program
were most recently approved by EPA into the SIP on September 26,
1997 (62 FR 50514).
---------------------------------------------------------------------------

    It is important to stress that EPA is not proposing to approve or
disapprove the State's existing Minor NSR program itself to the extent
that it is inconsistent with EPA's regulations governing this program.
EPA believes that a number of states may have Minor NSR provisions that
are contrary to the existing EPA regulations for this program. EPA
intends to work with states to reconcile state Minor NSR programs with
EPA's regulatory provisions for the program. The statutory requirements
of section 110(a)(2)(C) provide for considerable flexibility in
designing Minor NSR programs, and EPA believes it may be time to
revisit the regulatory requirements for this program to give the states
an appropriate level of flexibility to design a program that meets
their particular air quality concerns, while assuring reasonable
consistency across the country in protecting the NAAQS with respect to
new and modified minor sources.
    Based on the above, we are proposing to find that the current New
Mexico SIP meets the requirements of section 110(a)(2)(C) with respect
to the 2006 PM2.5 NAAQS.
    Interstate transport, pursuant to section 110(a)(2)(D): Section
110(a)(2)(D) has two components, 110(a)(2)(D)(i) and 110(a)(2)(D)(ii).
Section 110(a)(2)(D)(i) requires SIPs to include provisions prohibiting
any source or other type of emissions activity in one state from
contributing significantly to nonattainment, interfering with
maintenance of the NAAQS in another state, or from interfering with
measures required to prevent significant deterioration of air quality
or to protect visibility in another state. Section 110(a)(2)(D)(ii)
requires

SIPs to include provisions insuring compliance with sections 115 and
126 of the Act, relating to interstate and international pollution
abatement.
    PSD and interstate transport, pursuant to section 110(a)(2)(D)(i):
One of the four elements (or prongs) in section 110(a)(2)(D)(i)
requires a SIP to contain adequate provisions prohibiting emissions
that interfere with any other state's required measures to prevent
significant deterioration of its air quality. This is the only element
of 110(a)(2)(D)(i) on which EPA is proposing action in this rulemaking.
EPA's 2009 Guidance made recommendations for SIP submissions to meet
this requirement with respect to the 2006 PM2.5 NAAQS.
    The 2009 Guidance states that the PSD permitting program is the
primary measure that each state must include to prevent interference
with any other state's required measures to prevent significant
deterioration of its air quality in accordance with section
110(a)(2)(D)(i)(II).
    As discussed previously in this rulemaking with regards to section
110(a)(2)(C) and in the TSD, the New Mexico PSD program has been
approved into the SIP. New Mexico has provided necessary revisions to
its PSD program to implement the PM2.5 standards and EPA has
proposed approval of these revisions. Therefore, EPA is proposing that
the New Mexico SIP meets the basic requirements for implementing the
2006 PM2.5 NAAQS. We are proposing to find the SIP has
adequately addressed section 110(a)(2)(D)(i)(II) of the CAA, for the
element that requires that the SIP prohibit air pollutant emissions
from sources within a state from interfering with measures required to
prevent significant deterioration of air quality in any other state.
    The remaining three elements of section 110(a)(2)(D)(i): (1) Do not
significantly contribute to nonattainment of the relevant NAAQS in any
other state for the 2006 PM2.5 NAAQS; (2) interference with
the maintenance of the NAAQS in any other state; (3) interference with
measures required to protect visibility in any other state will be
evaluated and addressed in future rulemakings.
    Interstate and international transport, pursuant to section
110(a)(2)(D)(ii): Section 110(a)(2)(D)(ii) of the Act requires
compliance with sections 115 and 126 of the Act, relating to interstate
and international pollution abatement. Section 115(a) addresses
endangerment of public health or welfare in foreign countries from
pollution emitted in the United States. Pursuant to section 115, the
Administrator has neither received nor issued a formal notification
that emissions from New Mexico are endangering public health or welfare
in a foreign country. Section 126(a) of the Act requires new or
modified sources to notify neighboring states of potential impacts from
such sources. Under section 126(a)(1)(A), SIPs must require
notification to nearby, affected states of ``major proposed new (or
modified) sources'' when the source is subject to PSD. New Mexico's SIP
approved PSD program rules at <IP_ADDRESS>0 NMAC satisfy the requirements
of section 126(a)(1)(A) by providing that the NMED must send notice of
the proposed action on PSD permits to, among others, ``any state * * *
whose lands may be affected by emissions from the source or
modification.'' The State also has no pending obligations under section
126 of the Act.
    EPA is proposing to find that the New Mexico SIP meets the
requirements of section 110(a)(2)(D)(ii) with respect to the 2006
PM2.5 NAAQS.
    Adequate personnel, funding, and authority, pursuant to section
110(a)(2)(E): The Department of the Environment Act provides that the
secretary of the NMED ``shall * * * employ and fix the compensation of
those persons necessary to discharge his duties * * *'' See NMSA 1978
9-7A-6(B). The NMED is also authorized to receive State appropriations
to implement environmental programs. See generally, NMSA 1978 9-7A.
There are federal sources of funding for the implementation of the 2006
PM2.5 NAAQS, through, for example, the CAA sections 103 and
105 grant funds. The NMED receives federal funds on an annual basis,
under sections 103 and 105 of the Act, to support its air quality
programs. Additionally, the State provides funds equal to 40 percent of
the 105 grant fees it receives.
    Fees collected for the Title V and non-Title V permit programs, and
other inspections, maintenance and renewals required of other air
pollution sources also provide necessary funds to help implement the
State's air programs. Information on permitting fees is provided in the
discussion for section 110(a)(2)(L) below. The Air Quality Control Act
designates the NMED as the State air pollution control agency for all
purposes under federal legislation relating to air pollution and
provides the NMED with the power ``to accept, receive and administer
grants or other funds or gifts from public and private agencies,
including the federal government, or from any person * * *'' See NMSA
1978 74-2-5.1(F). For more detail on funding sources, please see the
TSD.
    The Air Quality Control Act delegates authority to the EIB to
adopt, promulgate, publish, amend and repeal regulations consistent
with the Air Quality Control Act to attain and maintain national
ambient air quality standards and prevent or abate air pollution. See
NMSA 1978 74-2-5(B)(1). The Environmental Improvement Act provides the
NMED with the power ``to enforce the rules, regulations and orders
promulgated by the board * * *'' See NMSA 1978 74-1-6(F). The Air
Quality Control Act also gives the NMED the duty to ``develop and
present to the environmental improvement board or the local board a
plan for the regulation, control, prevention or abatement of air
pollution * * *'' and gives the EIB the authority to adopt such a plan.
See NMSA 1978 74-2-5.1(H) and NMSA 1978 74-2-5(B)(2). Therefore, the
State has demonstrated it has adequate authority under its rules and
regulations to carry out its SIP obligations with respect to the 2006
PM2.5 NAAQS.
    EPA is proposing to find that the New Mexico SIP meets the
requirements of section 110(a)(2)(E) with respect to the 2006
PM2.5 NAAQS.
    Stationary source monitoring system, pursuant to section
110(a)(2)(F): New Mexico's regulations at 20.2 NMAC parts 5, 7-8, 10-
20, 30-34, 40-41, and 72-74 require source monitoring for compliance,
recordkeeping and reporting, and provide for enforcement with respect
to all the NAAQS and their precursors. These source monitoring program
requirements generate data for, among other pollutants, ozone,
PM2.5, and the precursors to these pollutants (VOCs,
NOX, and SO2).
    Under the New Mexico SIP rules, the NMED is required to analyze the
emissions data from point, area, mobile, and biogenic (natural)
sources. The NMED uses this data to track progress towards maintaining
the NAAQS, develop control and maintenance strategies, identify sources
and general emission levels, and determine compliance with New Mexico
and EPA requirements. The State's emissions data are available on the
NMED Web site (http://www.nmenv.state.nm.us). These rules have been
approved by EPA into the SIP. A list of the rules and Federal Register
citations are provided in the TSD.
    There are two requirements that New Mexico must meet regarding
emissions inventories (EIs): The EI requirement for nonattainment
areas, and the requirement to submit annual EI data to EPA's National
Emissions Inventory (NEI) database. Because Nonattainment NSR is
outside the scope of this

rulemaking, we are not addressing New Mexico's EI for nonattainment
areas in this proposed action. The NEI is EPA's central repository for
air emissions data. EPA published the Air Emissions Reporting Rule
(AERR) on December 5, 2008, which modified the requirements for
collecting and reporting air emissions data (73 FR 76539). The AERR
shortened the time states are given to report emissions data from 17 to
12 months, giving states one calendar year to submit emissions data.
All states are required to submit a comprehensive emissions inventory
every three years and report emissions for certain larger sources
annually through EPA's online Emissions Inventory System (EIS). States
report emissions data for the six criteria pollutants and the
precursors that form them--nitrogen oxides, sulfur dioxide, ammonia,
lead, carbon monoxide, particulate matter, and volatile organic
compounds. EPA compiles the emissions data, supplementing it where
necessary, and releases it to the general public through the Web site
http://www.epa.gov/ttn/chief/eiinformation.html. The NMED is current
with their submittals to the NEI database; the 2010 data for larger
sources was submitted to EPA in 2011. The State's emissions data are
also available on EPA's AirData Web site (http://www.epa.gov/air/data/index.html).\14\
---------------------------------------------------------------------------

    \14\ The AirData Web site provides access to air pollution data
for the entire United States and produces reports and maps of air
pollution data based on criteria specified by the user.
---------------------------------------------------------------------------

    EPA is proposing to find that the New Mexico SIP meets the
requirements of section 110(a)(2)(F) with respect to the 2006
PM2.5 NAAQS.
    Emergency power, pursuant to section 110(a)(2)(G): Section
110(a)(2)(G) requires States to provide for authority to address
activities causing imminent and substantial endangerment to public
health, including contingency plans to implement the emergency episode
provisions in their SIPs. The Air Quality Control Act provides the NMED
with authority to address environmental emergencies, and the NMED has
contingency plans to implement emergency episode provisions in the SIP.
New Mexico promulgated the ``Air Pollution Episode Contingency Plan for
New Mexico,'' which includes contingency measures, and these provisions
were approved into the SIP on August 21, 1990 (55 FR 34013).
    The 2009 Infrastructure SIP Guidance for PM2.5
recommends that a state with at least one monitored 24-hour
PM2.5 value exceeding 140.4 [micro]g/m\3\ since 2006
establish an emergency episode plan and contingency measures to be
implemented should such level be exceeded again. The 2006-2011 ambient
air quality monitoring data \15\ for New Mexico do not exceed 140.4
[micro]g/m\3\. The PM2.5 levels have consistently remained
below this level (140.4 [micro]g/m\3\), and furthermore, the State has
appropriate general emergency powers to address PM2.5
related episodes to protect the environment and public health. Given
the State's low monitored PM2.5 levels, EPA is proposing the
State is not required to submit an emergency episode plan and
contingency measures at this time, for the 2006 PM2.5
standard. Additional detail is provided in the TSD.
---------------------------------------------------------------------------

    \15\ The ozone and PM data are available through AQS. The AQS
data for PM are provided in the docket for this rulemaking.
---------------------------------------------------------------------------

    EPA is proposing to find that the New Mexico SIP meets the
requirements of section 110(a)(2)(G) with respect to the 2006
PM2.5 NAAQS.
    Future SIP revisions, pursuant to section 110(a)(2)(H): The Air
Quality Control Act provides that the EIB shall ``* * * adopt,
promulgate, publish, amend, and repeal regulations consistent with the
Air Quality Control Act to attain and maintain national ambient air
quality standards and prevent or abate air pollution * * *.'' See NMSA
1978 74-2-5(B)(1). The Environmental Improvement Act provides that the
NMED shall, ``* * * enforce the rules, regulations and orders
promulgated by the board * * *.'' See NMSA 1978 74-1-6(F). In addition,
the Air Quality Control Act requires the NMED to, ``* * * advise,
consult, contract with and cooperate with local authorities, other
states, the federal government and other interested persons or groups
in regard to matters of common interest in the field of air quality
control * * *'' See NMSA 1978 74-2-5.2(B). Thus, New Mexico has the
authority to revise its SIP from time to time as may be necessary to
take into account revisions of primary or secondary NAAQS, or the
availability of improved or more expeditious methods of attaining such
standards. Furthermore, New Mexico also has the authority under the
above provisions to revise its SIP in the event the EPA, pursuant to
the Act, finds the SIP to be substantially inadequate to attain the
NAAQS.
    EPA is proposing to find that the New Mexico SIP meets the
requirements of section 110(a)(2)(H) with respect to the 2006
PM2.5 NAAQS.
    Consultation with government officials, pursuant to section
110(a)(2)(J): \16\ The Air Quality Control Act, as codified at NMSA
1978 74-2-6, provides that, ``no regulations or emission control
requirement shall be adopted until after a public hearing by the
environmental improvement board or the local board'' and provides that,
``at the hearing, the environmental improvement board or the local
board shall allow all interested persons reasonable opportunity to
submit data, views, or arguments orally or in writing and to examine
witnesses testifying at the hearing.'' See NMSA 1978 74-2-6(B) and (D).
In addition, the Air Quality Control Act provides that the NMED shall
have the power and duty to ``advise, consult, contract with and
cooperate with local authorities, other states, the federal government
and other interested persons or groups in regard to matters of common
interest in the field of air quality control* * *'' See NMSA 1978 74-2-
5.2(B). The State's SIP approved PSD rules at <IP_ADDRESS>0 NMAC mandate
that the NMED shall provide for public participation and notification
regarding permitting applications to any other state or local air
pollution control agencies, local government officials of the city or
county where the source will be located, and Federal Land Managers
(FLM) whose lands may be affected by emissions from the source or
modification. The State's SIP approved PSD rules at <IP_ADDRESS>3 NMAC
require the NMED to consult with FLMs regarding permit applications for
sources impacting Class I Federal areas.\17\ Furthermore, the State of
New Mexico has committed in the SIP to consult continually with the
FLMs on the review and implementation of the visibility program and to
notify the FLM of any advance notification or early consultation with a
major new or modifying source prior to the submission of the permit
application.\18\ The State's SIP approved Transportation Conformity
rules at <IP_ADDRESS> and <IP_ADDRESS> NMAC require that interagency
consultation and opportunity for public involvement be provided before
making transportation conformity determinations and before adopting
applicable SIP revisions on

transportation-related SIPs.\19\ These rules are in the Federally-
approved SIP.
---------------------------------------------------------------------------

    \16\ Section 110(a)(2)(J) is divided into three segments:
Consultation with government officials; public notification; and PSD
and visibility protection.
    \17\ Areas designated as mandatory Class I Federal areas consist
of national parks exceeding 6,000 acres, wilderness areas and
national memorial parks exceeding 5,000 acres, and all international
parks that were in existence on August 7, 1977. CAA section 162(a).
    \18\ See 71 FR 4490, January 27, 2006.
    \19\ See 65 FR 14877.
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    EPA is proposing to find that the New Mexico SIP meets the
requirements of this portion of section 110(a)(2)(J) with respect to
the 2006 PM2.5 NAAQS.
    Public notification if NAAQS are exceeded, pursuant to section
110(a)(2)(J): Public notification begins with the air quality forecast,
which advises the public of conditions capable of exceeding the NAAQS
(see 54 FR 9783). New Mexico's provisions regarding public notification
of instances or areas in which any primary NAAQS was exceeded were
approved into the SIP on August 24, 1983 (48 FR 38466). In addition,
the NMED air monitoring Web site provides live air quality data for
each of the monitoring stations in New Mexico.\20\ The Web site also
provides information on the health effects of ozone, particulate
matter, and other criteria pollutants.
---------------------------------------------------------------------------

    \20\ Please see http://air.nmenv.state.nm.us/.
---------------------------------------------------------------------------

    EPA is proposing to find that the New Mexico SIP meets the
requirements of this portion of section 110(a)(2)(J) with respect to
the 2006 PM2.5 NAAQS.
    PSD and visibility protection, pursuant to section 110(a)(2)(J):
This portion of section 110(a)(2)(J) in part requires that a state's
SIP meet the applicable requirements of section 110(a)(2)(C) as
relating to PSD programs. As detailed in the subsection titled
``Program for enforcement of control measures and regulation of the
modification and construction of any stationary source * * * pursuant
to section 110(a)(2)(C)'' of this rulemaking and in the TSD, New
Mexico's PSD program was conditionally approved into the SIP on
February 27, 1987 (52 FR 5964). New Mexico has since then met the
conditions of our conditional approval, so we converted our conditional
approval into a full approval effective August 15, 2011 (76 FR 41698).
The State's PSD program is in the SIP (52 FR 5964, 53 FR 44191, 55 FR
43013, 56 FR 20137, 61 FR 53639, 68 FR 11316, 68 FR 74483, 72 FR 50879,
and 75 FR 72688). Furthermore, the State revised their rules to address
PM2.5 in their PSD program, and submitted those SIP
revisions on May 23, 2011 to address the permitting requirements for
direct PM2.5 emissions and its precursors as promulgated by
EPA on May 16, 2008 and adopting the PM2.5 increment,
significant impact levels (SILs), and significant monitoring
concentrations (SMCs) as promulgated by EPA on October 20, 2010 (75 FR
64864). The State's minor source permitting requirements were approved
at 38 FR 12702.
    EPA approved New Mexico's Visibility Protection Plan and approved a
Long-Term Strategy for Visibility Protection into the New Mexico SIP on
January 27, 2006 (71 FR 4490). The State submitted a Regional Haze SIP
to EPA on December 1, 2003. On January 15, 2009, we published a
``Finding of Failure to Submit State Implementation Plans Required by
the 1999 regional haze rule'' (74 FR 2392). We found that New Mexico
had failed to submit for our review and approval a complete SIP for
improving visibility in the nation's national parks and wilderness
areas by the required date of December 17, 2007. Specifically, we found
that New Mexico had failed to submit the plan elements required by 40
CFR 51.309(g),\21\ and the plan element required by 40 CFR
51.309(d)(4), which requires BART for stationary source emissions of
NOX and PM under either 40 CFR 51.308(e)(1) or
51.308(e)(2).\22\ On January 13, 2009, New Mexico submitted a letter to
EPA, clarifying that they intended to submit a Regional Haze (RH) SIP
revision in 2009 to address the requirements of 40 CFR 51.309(d)(4) and
40 CFR 51.309(g).\23\
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    \21\ 40 CFR 51.309(g) concerns the reasonable progress
requirements for areas other than the 16 Class I areas covered by
the Grand Canyon Visibility Transport Commission Report.
    \22\ New Mexico has the option to submit a Regional Haze SIP
under either section 51.308 or section 51.309.
    \23\ January 13, 2009, letter from Bill Richardson, Governor of
New Mexico, to Mayor Richard Greene, Regional Administrator, EPA
Region 6. This letter is in the docket for this rulemaking.
---------------------------------------------------------------------------

    On September 17, 2007, New Mexico submitted a SIP revision
addressing the ``good neighbor'' requirement of section 110(a)(2)(D)(i)
of the CAA for the 1997 8-hour ozone and 1997 PM2.5 NAAQS.
On August 22, 2011, EPA disapproved the New Mexico Interstate Transport
SIP provisions that address the requirement of 110(a)(2)(D)(II) that
emissions from New Mexico sources do not interfere with measures
required in the SIP of any other state under part C of the CAA to
protect visibility. EPA found that New Mexico sources, except the San
Juan Generating Station, are sufficiently controlled to eliminate
interference with the visibility programs of other states. Therefore,
EPA finalized a Federal Implementation Plan (FIP) for New Mexico to
address emissions from one source: The San Juan Generating Station
(SJGS) coal-fired power plant (76 FR 52388, effective September 21,
2011). The FIP addresses the RH Best Available Retrofit Technology
(BART) requirements for NOX for the SJGS. In that action,
EPA found that the other New Mexico pollution sources are adequately
controlled to eliminate interference with the clean air visibility
programs of other states.
    On July 5, 2011, New Mexico submitted a revised Regional Haze (RH)
SIP to the EPA. EPA has reviewed the submittal and proposed approval of
the submittal, except for the submitted nitrogen oxides NOX
Best Available Retrofit Technology (BART) determination for the San
Juan Generating Station, on June 15, 2012 (77 FR 36044).
    With regard to the applicable requirements for visibility
protection, EPA recognizes that States are subject to visibility and
regional haze program requirements under Part C of the Act (which
includes sections 169A and 169B). In the event of the establishment of
a new NAAQS, however, the visibility and regional haze program
requirements under part C do not change. Thus, we find that there is no
new visibility obligation ``triggered'' under section 110(a)(2)(J) when
a new NAAQS becomes effective; and as such, visibility protection
requirements are not relevant for purposes of this action. This would
be the case even in the event a secondary PM2.5 NAAQS for
visibility is established, because this NAAQS would not affect
visibility requirements under part C.
    EPA is therefore proposing to find that the New Mexico SIP meets
the requirements of this portion of section 110(a)(2)(J) with respect
to the 2006 PM2.5 NAAQS.
    Air quality modeling and submission of data, pursuant to section
110(a)(2)(K): The Air Quality Control Act authorizes NMED to ``develop
facts and make investigations and studies,'' thereby providing for the
functions of environmental air quality assessment. As an example, New
Mexico has the ability to perform modeling for the primary and
secondary PM2.5 standards on a case-by-case permit basis
consistent with their SIP-approved PSD rules and consistent with EPA
guidance and 40 CFR part 51, Appendix W, Guideline on Air Quality
Models.
    This section of the Act also requires that a SIP provide for the
submission of data related to such air quality modeling to the EPA upon
request. The Air Quality Control Act authorizes NMED to cooperate with
the federal government in regard to matters of common interest in the
field of air quality control, thereby allowing it to make this
submission to EPA. See NMSA 1978 74-2-5.2(B).
    EPA is proposing to find that the New Mexico SIP meets the
requirements of

section 110(a)(2)(K) with respect to the 2006 PM2.5 NAAQS.
    Permitting fees, pursuant to section 110(a)(2)(L): The Air Quality
Control Act provides the EIB with the legal authority for establishing
an emission fee schedule and a construction permit fee schedule to
recover the reasonable costs of acting on permit applications,
implementing, and enforcing permits. See NMSA 1978 74-2-7. New Mexico's
Permit Fee System was approved by EPA on July 17, 1991 (56 FR 32511).
New Mexico's Permit Fee System implements a fee system for all
preconstruction air permits issued by NMED. New Mexico's regulations
for construction permit fees are found at 20.2.75 NMAC. The State's
Title V program and associated fees legally are not part of the SIP,
but were approved by EPA on November 26, 1996 (61 FR 60032) as part of
the New Mexico Title V Program.
    EPA is proposing to find that the New Mexico SIP meets the
requirements of section 110(a)(2)(L) with respect to the 2006
PM2.5 NAAQS.
    Consultation/participation by affected local entities, pursuant to
section 110(a)(2)(M): As indicated above, the Air Quality Control Act
provides that, ``no regulations or emission control requirement shall
be adopted until after a public hearing by the environmental
improvement board or the local board'' and provides that, ``at the
hearing, the environmental improvement board or the local board shall
allow all interested persons reasonable opportunity to submit data,
views, or arguments orally or in writing and to examine witnesses
testifying at the hearing.'' See NMSA 1978 74-2-6(B) and (D). In
addition, the Air Quality Control Act provides that the NMED shall have
the power and duty to ``advise, consult, contract with and cooperate
with local authorities, other states, the federal government and other
interested persons or groups in regard to matters of common interest in
the field of air quality control* * *'' See NMSA 1978 74-2-5.2(B). New
Mexico's SIP approved PSD regulations at <IP_ADDRESS>0 NMAC mandate that
the NMED shall provide for public participation and notification
regarding permitting applications to any other state or local air
pollution control agencies, local government officials of the city or
county where the source will be located, and FLMs whose lands may be
affected by emissions from the source or modification. New Mexico's SIP
approved Transportation Conformity regulations at <IP_ADDRESS> and
<IP_ADDRESS> NMAC require that interagency consultation and opportunity
for public involvement be provided before making transportation
conformity determinations and before adopting applicable SIP revisions
on transportation-related SIPs.\24\
---------------------------------------------------------------------------

    \24\ See 65 FR 14877.
---------------------------------------------------------------------------

    EPA is proposing to find that the New Mexico SIP meets the
requirements of section 110(a)(2)(M) with respect to the 2006
PM2.5 NAAQS.

IV. Proposed Action

    We are proposing to approve the submittal provided by the State of
New Mexico to demonstrate that the New Mexico SIP meets the
requirements of Section 110(a)(1) and (2) of the Act for the 2006
PM2.5 NAAQS. We are proposing to find that the current New
Mexico SIP meets the infrastructure elements listed below:

Emission limits and other control measures (110(a)(2)(A) of the Act);
Ambient air quality monitoring/data system (110(a)(2)(B) of the Act);
Program for enforcement of control measures (110(a)(2)(C) of the Act);
Interstate and international transport (110(a)(2)(D)(ii) of the Act);
Adequate resources (110(a)(2)(E) of the Act);
Stationary source monitoring system (110(a)(2)(F) of the Act);
Emergency power (110(a)(2)(G) of the Act);
Future SIP revisions (110(a)(2)(H) of the Act);
Consultation with government officials (110(a)(2)(J) of the Act);
Public notification (110(a)(2)(J) of the Act);
Prevention of significant deterioration and visibility protection
(110(a)(2)(J) of the Act);
Air quality modeling data (110(a)(2)(K) of the Act);
Permitting fees (110(a)(2)(L) of the Act); and
Consultation/participation by affected local entities (110(a)(2)(M) of
the Act).
    We are also proposing to approve the portion of the New Mexico
submittal that addresses the requirement of section
(110)(a)(2)(D)(i)(II) of the Act that emissions from sources in New
Mexico do not interfere with measures required in the SIP of any other
state under part C of the Act regarding PSD for the 2006
PM2.5 NAAQS.
    EPA is proposing these actions in accordance with section 110 and
part C of the Act and EPA's regulations and consistent with EPA
guidance. EPA's proposed approval does not extend to areas within
Indian country as defined in 18 U.S.C. 1151. EPA, or eligible Indian
tribes, as appropriate, will retain jurisdiction and responsibilities
under the Clean Air Act, Section 110 within Indian country.

V. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Act and
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this action merely proposes to approve state law as
meeting Federal requirements and does not impose additional
requirements beyond those imposed by state law. For that reason, this
action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified
by Executive Order 13175 (65 FR 67249, November 9, 2000), because the
SIP is not approved to apply in Indian country located in the state,
and EPA notes that it will not impose substantial direct

costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Nitrogen dioxides, Ozone,
Particulate matter, Reporting and recordkeeping requirements, Volatile
organic compounds.

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

    Dated: September 28, 2012.
Ron Curry,
Regional Administrator, Region 6.
[FR Doc. 2012-25158 Filed 10-11-12; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 88, Number 181 (Wednesday, September 20, 2023)]
[Notices]
[Page 64899]
[FR Doc No: 2023-20347]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 1858-000]

Beaver City Corporation; Notice of Authorization for Continued
Project Operation

    The license for the Beaver City Canyon Plant No. 2 Project No. 1858
was issued for a period ending July 31, 2023.
    Section 15(a)(1) of the FPA, 16 U.S.C. 808(a)(1), requires the
Commission, at the expiration of a license term, to issue from year-to-
year an annual license to the then licensee(s) under the terms and
conditions of the prior license until a new license is issued, or the
project is otherwise disposed of as provided in section 15 or any other
applicable section of the FPA. If the project's prior license waived
the applicability of section 15 of the FPA, then, based on section 9(b)
of the Administrative Procedure Act, 5 U.S.C. 558(c), and as set forth
at 18 CFR 16.21(a), if the licensee of such project has filed an
application for a subsequent license, the licensee may continue to
operate the project in accordance with the terms and conditions of the
license after the minor or minor part license expires, until the
Commission acts on its application. If the licensee of such a project
has not filed an application for a subsequent license, then it may be
required, pursuant to 18 CFR 16.21(b), to continue project operations
until the Commission issues someone else a license for the project or
otherwise orders disposition of the project.
    If the project is subject to section 15 of the FPA, notice is
hereby given that an annual license for Project No. 1858 is issued to
Beaver City Corporation for a period effective August 1, 2023, through
July 31, 2024, or until the issuance of a new license for the project
or other disposition under the FPA, whichever comes first. If issuance
of a new license (or other disposition) does not take place on or
before July 31, 2024, notice is hereby given that, pursuant to 18 CFR
16.18(c), an annual license under section 15(a)(1) of the FPA is
renewed automatically without further order or notice by the
Commission, unless the Commission orders otherwise.
    If the project is not subject to section 15 of the FPA, notice is
hereby given that Beaver City Corporation is authorized to continue
operation of the Beaver City Canyon Plant No. 2 Hydroelectric Project
under the terms and conditions of the prior license until the issuance
of a new license for the project or other disposition under the FPA,
whichever comes first.

    Dated: September 14, 2023.
Kimberly D. Bose,
Secretary.
[FR Doc. 2023-20347 Filed 9-19-23; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 85, Number 239 (Friday, December 11, 2020)]
[Notices]
[Pages 80223-80224]
[FR Doc No: 2020-27270]

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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

[Docket Number FRA-2020-0092]

Petition for Waiver of Compliance

    Under part 211 of title 49 of the Code of Federal Regulations
(CFR), this document provides the public notice that on November 12,
2020, the Southeastern Pennsylvania Transportation Authority (SEPTA)
petitioned the Federal Railroad Administration (FRA) for a waiver of
compliance from certain provisions of the Federal railroad safety
regulations contained at 49 CFR part 238, Passenger Equipment Safety
Standards. FRA

assigned the petition Docket Number FRA-2020-0092.
    Specifically, SEPTA requests relief from 49 CFR 238.131, Exterior
side door safety systems--new passenger cars and locomotives used in
passenger service, and 49 CFR 238.133, Exterior side door safety
systems--all passenger cars and locomotives used in a passenger
service, as they pertain to the exterior side door safety system
interface with the Siemens ACS-64 ``Sprinter'' electric locomotives.
SEPTA notes the ACS-64 ``Sprinter'' locomotive uses similar operating
controls and software to the SC-44 ``Charger'' diesel-electric
locomotives, for which FRA granted relief in Docket Number FRA-2018-
0029.
    SEPTA proposes installing similar software in the ACS-64
locomotives, as that developed for the SC-44, to allow such locomotives
to be operated in ``Yard Mode.'' When ``Yard Mode'' is activated, it
allows low speed operation of the locomotive without activating the
door by-pass device. The ``Yard Mode'' software monitors the door
summary circuit trainline, along with other trainlines and locomotive
operating parameters, determining whether the locomotive is operating
in a lite consist (locomotives only) or a passenger car consist. This
solution involves multi-step software verification along with multiple
deliberate acts and confirmations by an operator to enable ``Yard
Mode.'' When ``Yard Mode'' is active, the locomotive may not be
operated above 10 miles per hour.
    A copy of the petition, as well as any written communications
concerning the petition, is available for review online at
www.regulations.gov.
    Interested parties are invited to participate in these proceedings
by submitting written views, data, or comments. FRA does not anticipate
scheduling a public hearing in connection with these proceedings since
the facts do not appear to warrant a hearing. If any interested parties
desire an opportunity for oral comment and a public hearing, they
should notify FRA, in writing, before the end of the comment period and
specify the basis for their request.
    All communications concerning these proceedings should identify the
appropriate docket number and may be submitted by any of the following
methods:
     Website: http://www.regulations.gov. Follow the online
instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: Docket Operations Facility, U.S. Department of
Transportation (DOT), 1200 New Jersey Ave., SE, W12-140, Washington, DC
20590.
     Hand Delivery: 1200 New Jersey Ave. SE, Room W12-140,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal Holidays.
    Communications received by January 25, 2021 will be considered by
FRA before final action is taken. Comments received after that date
will be considered as far as practicable.
    Anyone can search the electronic form of any written communications
and comments received into any of our dockets by the name of the
individual submitting the comment (or signing the document, if
submitted on behalf of an association, business, labor union, etc.).
Under 5 U.S.C. 553(c), DOT solicits comments from the public to better
inform its processes. DOT posts these comments, without edit, including
any personal information the commenter provides, to
www.regulations.gov, as described in the system of records notice (DOT/
ALL-14 FDMS), which can be reviewed at https://www.transportation.gov/privacy. See also https://www.regulations.gov/privacyNotice for the
privacy notice of regulations.gov.

    Issued in Washington, DC.
John Karl Alexy,
Associate Administrator for Railroad Safety, Chief Safety Officer.
[FR Doc. 2020-27270 Filed 12-10-20; 8:45 am]
BILLING CODE 4910-06-P


[Federal Register: October 19, 2010 (Volume 75, Number 201)]
[Notices]
[Page 64384-64387]
[DOCID:fr19oc10-98]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63098; File No. SR-NASDAQ-2010-074]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Instituting Proceedings To Determine Whether To Disapprove Proposed
Rule Change, as Modified by Amendment No. 1, To Adopt Rule 4753(c) as a
Six Month Pilot in 100 NASDAQ-Listed Securities

October 13, 2010.

I. Introduction

    On June 18, 2010, The NASDAQ Stock Market LLC (``Nasdaq'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to implement, on a six-month pilot basis, a
volatility-based trading pause in 100 Nasdaq-listed securities
(``Volatility Guard''). On June 25, 2010, Nasdaq filed Amendment No. 1
to the proposed rule change. The proposed rule change, as amended, was
published for comment in the Federal Register on July 15,

2010.\3\ The Commission received four comment letters on the
proposal.\4\ Nasdaq responded to these comments on August 12, 2010.\5\
The Commission subsequently extended the time period in which to either
approve the proposed rule change, or to institute proceedings to
determine whether to disapprove the proposed rule change, to October
13, 2010.\6\ This order institutes proceedings to determine whether to
disapprove the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 62468 (July 7,
2010), 75 FR 41258.
    \4\ See Letter from Joe Ratterman, Chairman and Chief Executive
Officer, BATS Global Markets, Inc., to Hon. Mary Schapiro, Chairman,
Commission, dated July 1, 2010 (``BATS Letter''); Letter from Jose
Marques, Managing Director, Deutsche Bank Securities Inc., to
Elizabeth M. Murphy, Secretary, Commission, dated July 21, 2010
(``Deutsche Bank Letter''); Letter from Janet M. Kissane, Senior
Vice President, Legal and Corporate Secretary, NYSE Euronext, to
Elizabeth Murphy, Secretary, Commission, dated August 3, 2010
(``NYSE Letter''); Letter from Ann L. Vlcek, Managing Director and
Associate General Counsel, Securities Industry and Financial Markets
Association, to Elizabeth M. Murphy, Secretary, Commission, dated
June 25, 2010 (``SIFMA Letter'').
    \5\ See Letter from T. Sean Bennett, Assistant General Counsel,
Nasdaq, to Elizabeth M. Murphy, Secretary, Commission (``Nasdaq
response'').
    \6\ See Securities Exchange Act Release No. 62740 (August 18,
2010), 75 FR 52049 (August 24, 2010).
---------------------------------------------------------------------------

II. Description of the Proposal

    Nasdaq proposes to adopt, on a pilot basis, a volatility-based
trading halt for 100 Nasdaq-listed securities. Under this proposal,
Nasdaq would suspend trading in a security if a trade in that security
is executed at a price that exceeds a certain threshold, as measured
over the preceding 30 seconds. The triggering threshold varies
according to the price of the security, i.e., 15% for securities with
an execution price of $1.75 and under; 10% for securities over $1.75
and up to $25; 5% for securities over $25 and up to $50; and 3% for
securities over $50. If the Volatility Guard were triggered, Nasdaq
would suspend trading in that security for a period of 60 seconds, but
would maintain all current quotes and orders during that time, and
would continue to accept quotes and orders. Following this 60-second
period, Nasdaq would re-open the market using its Halt Cross mechanism.
According to Nasdaq, the Volatility Guard is similar in purpose to the
Liquidity Replenishment Points (``LRPs'') rules that currently exist on
the New York Stock Exchange (``NYSE'').

III. Comment Letters

    Three of the four commenters expressed concerns about the effect of
this proposal upon market volatility. These commenters stated that the
Volatility Guard could actually increase volatility marketwide by re-
directing trading in a security to other potentially less liquid venues
once trading in that security had been halted on Nasdaq.\7\ One
commenter argued that this proposal, coupled with the LRPs currently in
effect on the NYSE, would result in disparate market approaches towards
dampening volatility that may create confusion among market
participants, particularly in times of market stress, and exacerbate
market volatility.\8\
---------------------------------------------------------------------------

    \7\ See BATS Letter at 2; Deutsche Bank Letter at 4; SIFMA
Letter at 3.
    \8\ See Deutsche Bank Letter at 4.
---------------------------------------------------------------------------

    The fourth commenter, however, supported Nasdaq's ``right to design
the controls it believes are best for trading on its market.'' \9\ This
commenter stated that the national market system was designed to
encourage competitive distinctions such as Nasdaq's Volatility Guard
and NYSE's LRPs.\10\ According to this commenter, both the Nasdaq
proposal and the NYSE LRPs ``provide certainty and predictability of
operation,'' and permit those markets to pursue strategies where the
quality of price need not always defer to speed of execution.\11\
---------------------------------------------------------------------------

    \9\ See NYSE Letter at 2. In its comment letter, NYSE also
addressed what it perceived as Nasdaq's inaccurate description of
the LRPs. NYSE provided additional detail about the LRPs, the role
of the LRPs during the events of May 6, 2010, and the interaction
between LRPs and the recently approved single-stock circuit
breakers.
    \10\ Id.
    \11\ Id. at 3-4.
---------------------------------------------------------------------------

    In its response, Nasdaq rejected the argument that the proposed
Volatility Guard would exacerbate market volatility.\12\ Nasdaq stated
that it specifically designed the Volatility Guard to work within the
parameters of the recently adopted single-stock circuit breakers, and
to avoid the potential for conflicting standards between the two
mechanisms.\13\ Nasdaq also asserted that there is no evidence that the
Volatility Guard would increase volatility in a particular security;
rather, Nasdaq stated that the Volatility Guard would actually keep
aberrant volatility on Nasdaq from spreading to other markets.\14\
---------------------------------------------------------------------------

    \12\ Nasdaq response at 2.
    \13\ Id.
    \14\ Id.
---------------------------------------------------------------------------

    Nasdaq also argued that the proposed Volatility Guard differed
significantly from the NYSE LRPs, and that criticizing the Volatility
Guard by comparing it to the LRPs was misleading. Nasdaq stated that
the Volatility Guard, unlike the LRPs, would be based on clear and
predictable criteria that would trigger a pause only in the event of a
significant imbalance.\15\ Accordingly, Nasdaq did not believe it
appropriate to make a generic assertion that all market-based single-
stock circuit breakers are detrimental.\16\
---------------------------------------------------------------------------

    \15\ Id. at 3.
    \16\ Id.
---------------------------------------------------------------------------

    Finally, Nasdaq stated that it was employing prudent precautions in
implementing the Volatility Guard. In particular, Nasdaq would
implement the Volatility Guard as a pilot, limited in time and scope,
during which time the Volatility Guard could be adjusted as needed.
Nasdaq would also provide data to the Commission during the pilot
period about the efficiency and effect of the Volatility Guard.\17\
---------------------------------------------------------------------------

    \17\ Id.
---------------------------------------------------------------------------

IV. Proceedings To Determine Whether To Disapprove SR-NASDAQ-2010-074
and Grounds for Disapproval Under Consideration

    Nasdaq's proposal is presented by the Exchange as an effort to
protect Nasdaq-listed securities and Nasdaq market participants from
aberrant volatility, such as that witnessed on May 6, 2010. As noted
above, however, several commenters argued that individual exchange-
specific mechanisms to moderate volatility may in fact exacerbate the
volatility of the market overall, create confusion, and complicate the
operation of the market-wide single stock circuit breakers.
    Although the events of May 6, 2010 provide but one example of the
effect of an individual exchange volatility moderator, the Report of
the Staff of the Commodity Futures Trading Commission and the
Commission (the ``May 6 Staff Report'') \18\ did not find that NYSE
LRPs caused or created the broad-based liquidity crisis on that
day.\19\ However, the May 6 Staff Report noted, among other things,
that there were a few LRP events affecting certain stocks in which
available liquidity on the NYSE may have been sufficient to absorb some
of the selling pressure felt by other markets.\20\ In addition, there
were reports from market participants that the increasing number of
LRPs on May 6 played into their decisions to reduce liquidity, pause
trading, or withdraw from the markets.\21\ More

broadly, the Commission notes that it is not yet clear whether the
market-wide single-stock circuit breakers, as they may be expanded or
adjusted, are likely to interact with individual exchange volatility
moderators such as the NYSE LRPs or, if approved, Nasdaq's Volatility
Guard, in a positive, neutral or negative way.
---------------------------------------------------------------------------

    \18\ See Report of the Staffs of the CFTC and SEC to the Joint
Advisory Committee on Emerging Regulatory Issues, ``Findings
Regarding the Market Events of May 6, 2010'', dated September 30,
2010.
    \19\ Id. at 70.
    \20\ Id. Specifically, the May 6 Staff Report notes that there
were 19 LRP events affecting 12 stocks in which available liquidity
within 500 basis points of the national best bid or offer may have
been able to absorb sell pressure.
    \21\ Id. at 70-71.
---------------------------------------------------------------------------

    The Commission, therefore, is instituting proceedings pursuant to
Section 19(b)(2)(B) of the Act to determine whether the proposed rule
change should be disapproved. Institution of disapproval proceedings
appears appropriate at this time in view of the legal and policy issues
raised by the proposal. Institution of disapproval proceedings,
however, does not indicate that the Commission has formulated any
conclusions with respect to any of the issues involved. Rather, as
described in greater detail below, the Commission seeks and encourages
interested persons to comment on the proposed rule change.
    The section of the Act applicable to the proposed rule change that
provides the grounds for disapproval under consideration is Section
6(b)(5),\22\ which requires that the rules of an exchange be designed,
among other things, to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to 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. Specifically, the Commission believes the proposal
raises issues as to whether the Volatility Guard, by halting trading on
Nasdaq when the price of a security moves quickly over a short period
of time, will exacerbate the volatility of trading in that security on
the other exchanges and over-the-counter trading centers that remain
open. In addition, because the thresholds for triggering the Volatility
Guard, and the length of the trading halt that results, differ from
those of the recently approved, market-wide single-stock circuit
breakers, the Commission believes the proposal raises issues as to
whether the operation of the Volatility Guard will interfere with, or
otherwise limit the effectiveness of, the circuit breakers, the goal of
which is to prevent potentially destabilizing price volatility across
the U.S. securities markets.\23\
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78f(b)(5).
    \23\ In 2008, the Commission approved a similar Nasdaq proposal
to establish a volatility-based trading pause for a one-year pilot
period. See Securities Exchange Act Release No. 58386 (August 19,
2008), 73 FR 50380 (August 26, 2008) (SR-NASDAQ-2007-067). Nasdaq
never implemented that pilot. The initial proposal was, however,
considered and approved by the Commission before the events of May
6, 2010, at which time questions were raised about the market-wide
impact of individual exchange volatility moderators in times of
market stress. In addition, as noted above, there are questions
about the way in which the newly-implemented single-stock circuit
breakers, as they may be expanded or adjusted, will interact with
exchange-specific volatility moderators.
---------------------------------------------------------------------------

V. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their views, data and arguments with respect to the
concerns identified above, as well as any others they may have with the
proposal. In particular, the Commission invites the written views of
interested persons concerning whether the proposed rule change is
inconsistent with the Section 6(b)(5) or any other provision of the
Act, or the rules and regulations thereunder. Although there do not
appear to be any issues relevant to approval or disapproval which would
be facilitated by an oral presentation of views, data, and arguments,
the Commission will consider, pursuant to Rule 19b-4, any request for
an opportunity to make an oral presentation.\24\
---------------------------------------------------------------------------

    \24\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views and
arguments regarding whether the proposed rule change should be
disapproved by December 3, 2010. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
December 20, 2010.
    The Commission specifically reiterates its request for comment on
the following items:
     A stated purpose of the proposal is to protect Nasdaq-
listed securities and market participants from ``aberrant'' volatility,
such as that which occurred on May 6, 2010 and may be caused by
operational or structural factors beyond the control of issuers and
individual markets. To what extent do the price changes that would
trigger a trading halt under the proposal indicate the potential
existence of ``aberrant'' volatility, as opposed to the normal
operation of the markets? If these price changes indicate potentially
``aberrant'' volatility, to what extent will the proposal address such
volatility in a manner appropriate and consistent with the purposes of
the Act?
     Will a trading halt at Nasdaq under the proposal restrict
liquidity or increase volatility in the affected stock, since other
markets can continue to trade the stock and may not have comparable
volatility halts?
     In what respects are the consequences of this proposal
likely to be similar to, or different from, the effects of other
exchange-specific mechanisms that currently restrict trading on the
relevant exchange under certain circumstances?
     More generally, to what extent is it appropriate for the
various exchanges to adopt different and potentially inconsistent
approaches to trading pauses or restrictions that might affect the same
stock?
     To what extent does the answer change based on whether the
affected stock is already subject to a market-wide single-stock circuit
breaker that applies consistently across all trading venues?
    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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2010-074 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2010-074. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room, 100 F
Street, NE., Washington, DC 20549, on official business days between
the hours of 10 a.m. and 3 p.m. Copies of such filing

also will be available for inspection and copying at the principal
office of Nasdaq. All comments received will be posted without change;
the Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
publicly available. All submissions should refer to File Number SR-
NASDAQ-2010-074 and should be submitted on or before December 3, 2010.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
---------------------------------------------------------------------------

    \25\ 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-26215 Filed 10-18-10; 8:45 am]
BILLING CODE 8011-01-P