[Federal Register Volume 85, Number 24 (Wednesday, February 5, 2020)]
[Proposed Rules]
[Pages 6482-6490]
[FR Doc No: 2020-02143]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2018-0839; FRL-10004-92-Region 5]

Air Plan Approval; Minnesota; Revision to the Minnesota State
Implementation Plan

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) proposes to approve
a revision to the Minnesota State Implementation Plan (SIP) which
updates Minnesota's air program rules. The Minnesota Pollution Control
Agency (MPCA) submitted the request to EPA on November 14, 2018. The
revision to Minnesota's air quality rules will reflect changes that
have occurred to the state air program rules since August 10, 2011, and
updates on actions deferred from previous SIP submittals. EPA is
proposing to approve the majority of MPCA's submittal, which will
result in consistent requirements of rules at both the state and
Federal level.

DATES: Comments must be received on or before March 6, 2020.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2018-0839 at http://www.regulations.gov, or via email to
<EMAIL_ADDRESS>For comments submitted at Regulations.gov,
follow the online instructions for submitting comments. Once submitted,
comments cannot be edited or removed from Regulations.gov. For either
manner of submission, EPA may publish any comment received to its
public docket. Do not submit electronically any information you
consider to be Confidential Business Information (CBI) or other
information whose disclosure is restricted by statute. Multimedia
submissions (audio, video, etc.) must be accompanied by a written
comment. The written comment is considered the official comment and
should include discussion of all points you wish to make. EPA will
generally not consider comments or comment contents located outside of
the primary submission (i.e. on the web, cloud, or other file sharing
system). For additional submission methods, please contact the person
identified in the For Further Information Contact section. For the full
EPA public comment policy, information about CBI or multimedia
submissions, and general guidance on making effective comments, please
visit http://www2.epa.gov/dockets/commenting-epa-dockets.

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

I. Background
II. Review of State Submittal
III. What action is EPA taking?
IV. Incorporation by Reference
V. Statutory and Executive Order Reviews

I. Background

A. Overview of Revisions Made by Minnesota

    On November 14, 2018 MPCA submitted a SIP revision with numerous
rule updates. MPCA's submittal includes amendments to rules governing
air emission permits, the removal of regulations unnecessary for
Minnesota to attain and maintain the National Ambient Air Quality
Standards (NAAQS), and the addition of new and previously deferred air
program rules.
    The following chapters of Minnesota's air program rules have
undergone changes: Minnesota Rules Chapter 7000 Procedural Rules;
Chapter 7002 Permit Fees; Chapter 7005 Definitions and Abbreviations;
Chapter 7007 Permits and Offsets; Chapter 7008 Conditionally Exempt
Stationary Sources and Conditionally Insignificant Activities; Chapter
7009 Ambient Air Quality Standards; Chapter 7011 Standards for

Stationary Sources; Chapter 7017 Monitoring and Testing Requirements;
and Chapter 7019 Emission Inventory Requirements. All rule changes were
made under the MPCA's rulemaking authority and underwent appropriate
public participation procedures as required by state law. EPA proposes
to approve the majority of revisions to the Minnesota SIP and not take
action on several revisions.

B. Summary of Relevant Statutes

    Section 110 of the Clean Air Act (CAA), 42 U.S.C. 7410, as amended,
requires state and local air pollution control agencies to develop and
submit for EPA approval, SIPs that provide for the attainment,
maintenance, and enforcement of the NAAQS in each air quality control
region (or portion thereof) within each state. Section 110(l) of the
CAA states that a SIP revision cannot be approved if the revision would
interfere with any applicable requirements concerning attainment and
reasonable further progress toward attainment of a NAAQS or any other
applicable requirement of the CAA.
    Section 110(a)(2)(C) of the CAA requires that each SIP include a
program to provide for the regulation of construction and modification
of stationary sources as necessary to assure that the NAAQS are
achieved. Specific elements for an approvable construction permitting
plan are found in the implementing regulations at 40 CFR 51 subpart I--
Review of New Sources and Modifications. Requirements relevant to minor
construction programs are 40 CFR 51.160--51.163. EPA regulations have
several specific criteria for state minor new source review (NSR)
programs. Generally, state programs must set forth legally enforceable
procedures that allow the state to determine if a planned construction
activity would result in a violation of the state's SIP or a national
standard and prevent any activity that would. In accordance with 40 CFR
51.162, the state plan must identify the responsible agency for making
permitting decisions. 40 CFR 51.160 requires that the plan identify the
types and sizes of facilities and installations that are subject to
review under the plan, provide that sources undertaking an activity
submit adequate information regarding the location, design and emission
related information to enable the state to make a determination, and
discuss the air quality data and dispersion or other air quality
modeling used. 40 CFR 51.161 provides specific criteria for public
availability of information and opportunity for public comment.
Finally, 40 CFR 51.164 requires that the plan identify the
administrative procedures that will be followed in making permitting
decisions.
    The revisions to the Minnesota SIP are intended to recodify, refine
and update the Minnesota SIP, at 40 CFR 52.1220. This SIP revision
addresses the requirements of section 110(a) of the CAA.

II. Review of State Submittal

A. Administrative Changes

    As part of the submittal, several Minnesota rules (Minn. R.)
included administrative changes. These changes consist of updated or
corrected citations to the referenced rules, updated control equipment
codes, removal of duplicative or outdated references, spelling or
grammar corrections, and minor language changes, all which have no
impact on the substance of the rule. EPA proposes to approve the
administrative changes and corrections into the Minnesota SIP.

B. Chapter 7000: Procedural Rules and Minnesota Statute 116.11

    Chapter 7000 contains procedural rules regarding Minnesota's air
program. Changes to Chapter 7000 include the addition of Minn. R.
7000.5000 which outlines MPCA's declaration of emergency authority. In
the submittal, Minnesota requested the addition of both Minn. R.
7000.5000 and Minnesota Statute (Minn. Stat.) 116.11, which pertain to
the declaration of emergency and emergency powers. Minn. Stat. 116.11
provides emergency powers to MPCA, which are further discussed in Minn.
R. 7000.5000. Specifically, these regulations allow the Agency to
``direct the immediate discontinuance or abatement of the pollution
without notice and without a hearing or at the request of the agency,
the attorney general may bring an action in the name of the state in
the appropriate district court for a temporary restraining order to
immediately abate or prevent the pollution.'' MPCA added Minn. Stat.
116.11 and Minn. R. 7000.5000 and retained Minn. R.7009.1000 through
7009.1110, as these rules provide specific actions and contingency
measures during air pollution alerts that are required by CAA section
110(a)(2)(G). EPA proposes to approve the addition of Minn. R.
7000.5000 and Minn. Stat. 116.11 into the Minnesota SIP.

C. Chapter 7002: Permit Fees

    Chapter 7002 contains rules related to permit fees. MPCA amended
Minn. R. 7002.0005, which describes the general scope of permit fees,
and Minn. R. 7002.0015, which contains definitions for terms used
throughout Chapter 7002, to remove references to state rules that have
been repealed, and to clarify terms related to permit fees. EPA
proposes to approve these administrative revisions to Minn. R.
7002.0005 and 7002.0015 into the Minnesota SIP.

D. Chapter 7005: Definitions and Abbreviations

    Chapter 7005 contains numerous definitions and abbreviations
relevant to rules throughout the Minnesota SIP. In Chapter 7005, MPCA
amended several definitions in Minn. R. 7005.0100, to define new terms,
clarify definitions, and re-number definitions. EPA finds these
revisions approvable because they provide clarity to terms used in
various rules throughout the SIP and do not change the requirements of
the rules themselves. EPA proposes to approve the revisions to Minn. R.
7005.0100 into the Minnesota SIP

E. Chapter 7007: Permits and Offsets

    Chapter 7007 contains rules concerning permits and offsets and has
undergone various changes. Note that because Chapter 7007 combines the
state's preconstruction and operating permit programs into a single
permitting program, MPCA uses the broad term Part 70 permit to
reference several types of permits, including some permits that
authorize construction. However, this rulemaking is limited solely to
approval of revisions to the state's preconstruction permitting program
and federally enforceable state operating permit program. This is not a
rulemaking under 40 CFR part 70.
1. Air Emission Permits
    MPCA revised language in Chapter 7007, to clarify air emission
permit requirements. MPCA amended Minn. R. 7007.0050 to clarify the
scope of the air emission permit rules and the requirements to which
the owners and operators of stationary sources are subject. EPA finds
these revisions approvable as they do not change the applicability of
the rule and strengthen the requirements. EPA proposes to approve the
revisions to Minn. R. 7007.0050 in the Minnesota SIP.
    Minn. R. 7007.0100 has been revised to contain definitions and
references to other Federal requirements. EPA proposes to approve the
revisions to Minn. R. 7007.0100, with the exception of subparts 9b
through 9f, 12c, 24a, and 24b (See Section M. Items EPA is Not Taking
Acting On) into the Minnesota SIP. EPA finds these added and revised
definitions approvable as they clarify terms used throughout the rules

concerning air emission permits, and do not change the requirements of
the rules.
    Minn. R. 7007.0250 has been revised to include administrative
changes and the addition of a capped permit option for sources required
to obtain a state permit opting to limit their emissions to under the
threshold of the part 70 permit. Minn. R. 7007.0300 has been revised to
identify sources that are not required to obtain a permit, with
administrative changes and to limit the scope of sources not required
to obtain a permit. EPA finds these revisions approvable as they add
requirements to align the rules with Federal permitting requirements,
and do not relax any previously approved SIP provisions. EPA proposes
to approve the revisions to Minn. R. 7007.0250, and 7007.0300 into the
Minnesota SIP.
    Minn. R. 7007.0350 has been revised to contain updated definitions
and the removal of references to repealed rules. EPA finds these
revisions approvable as they provide clarity and do not change the
stringency of the rule. EPA proposes to approve the revisions to Minn.
R. 7007.0350 into the Minnesota SIP.
    Minn. R. 7007.0400 has been revised to include the addition of a
new subpart 5 which establishes the timeframe for the owner or operator
to submit an application if a new regulation would make a stationary
source subject to part 70 or a state permit. EPA finds these revisions
approvable as they strengthen current requirements in the SIP. EPA
proposes to approve the revisions to Minn. R. 7007.0400 into the
Minnesota SIP.
    Minn. R. 7007.0650 has been revised to include changes to the
electronic permit application process and removes references to
outdated submittal methods. Minor language changes were also made to
Minn. R. 7007.0600 and 7007.0700. EPA finds these revisions approvable
as they do not change the substance of the rules. EPA proposes to
approve the revisions to Minn. R. 7007.0600, 7007.0650, and 7007.0700
into the Minnesota SIP.
    Minn. R. 7007.0750 has been revised to include a clarification that
part 70 permits are applicable for operation, not construction, and
corrects language surrounding MPCA's two-step air permit issuance
process to be consistent with Federal rules. EPA proposes to approve
the revisions to Minn. R. 7007.0750 Subparts 1 through 7 into the
Minnesota SIP.
    Minn. R. 7007.0800 has been revised to confirm the required permit
content for Part 70 permits, including requirements for emission
limitations and standards and permit deviation reporting. MPCA
reorganized this section and provided clarifying language to subparts
2, 4, 5, 6, 7, 10, 11, 12, and 14. EPA finds these revisions approvable
as they make the rule consistent with the requirements at 40 CFR
70.6(a)(1). EPA proposes to approve the revisions to Minn. R. 7007.0800
into the Minnesota SIP.
    Minn. R. 7007.0850 subpart 3 has been revised to include a process
to petition for meetings and hearings, and a changing of the word
``request'' to the phrase ``petition for.'' EPA finds these revisions
approvable as they are minor wording changes that do not change the
applicability of the rule. EPA proposes to approve the revisions to
Minn. R. 7007.0850 into the Minnesota SIP.
    Minn. R. 7007.0950 has been revised to include administrative
changes, such as renumbering. EPA proposes to approve the updates to
Minn. R. 7007.0950 into the Minnesota SIP.
    Minn. R. 7007.1000 subpart 1 is reworded to provide clarity for
permit issuance and denial. MPCA did not make any substantive changes
to the rule. EPA proposes to approve the revisions to Minn. R.
7007.1000 into the Minnesota SIP.
    Minn. R. 7007.1050 has been revised to provide the duration of air
emission permits. EPA proposes to approve the revisions to Minn. R.
7007.1050 into the Minnesota SIP.
    Minn. R. 7007.1100 has been revised to provide a path forward for
sources that, due to changes to operations or in regulations,
invalidate the current permit. Minn. R. 7007.1100 now contains four new
subparts. Subpart 8 provides the process when undergoing a name change
or a change in ownership. Subpart 9 clarifies the requirements to
obtain a new permit prior to commencing the modification that will
invalidate the current permit. Subpart 10 provides the process for a
source that becomes subject to a new regulation, invalidating the
current permit. The amendment provides timeframes for the source to
contact the commissioner regarding the new regulation and the new
permit application, which the source must submit within 180 days of the
new regulation's effective date. Further, if a source does not submit a
new permit application within the timeframes specified in Minn. R.
7007.1100, the source will not hold a valid permit and will be in
violation of Minn. R. 7007.0150, subpart 1. Subpart 11 cites Minn. R.
7007.1150 to 7007.1250, and Minn. R. 7007.1350 to 7007.1500, as rules
that do not apply to certain general permits which cover an entire
stationary source. EPA finds these revisions approvable as they
strengthen MPCA's permitting rules to ensure continued compliance. EPA
proposes to approve the revisions to Minn. R. 7007.1100 into the
Minnesota SIP.
    MPCA made various changes to its registration permit rules.
Registration permits allow sources with low levels of actual emissions
greater flexibility to make changes, provided they can demonstrate
continued eligibility for a registration permit. In addition to
requiring eligible sources to comply with all applicable state or
Federal regulations, the rule includes specific compliance requirements
for each registration permit option.
    Minn. R. 7007.1110 has been revised to provide general requirements
for registration permits. MPCA added to the categories of new source
performance standards for which sources remain eligible for
registration permits. These include 40 CFR, part 60, subpart I, hot mix
asphalt facilities; subpart GG, stationary gas turbines; subpart IIII,
stationary compression ignition internal combustion engines with
displacement less than 30 liters per cylinder; and, subpart JJJJ,
stationary spark ignition combustion engines. Minn. R. 7007.1110 has
been revised to specify the calculation methodology to demonstrate
compliance with registration permit option C or D, when there is less
than 12 months of emissions data available and provides procedures and
allotted timeframes when a stationary source is no longer eligible for
a registration permit. Minn. R. 7007.1110 has been revised to address
requirements for sources holding a registration permit when a change in
ownership or control occurs, or when the source relocates. EPA finds
these revisions approvable as they add additional requirements a source
must comply with in order to receive a registration permit. EPA
proposes to approve the revisions to Minn. R. 7007.1110 into the
Minnesota SIP.
    MPCA updated registration permit options A and B. Minn. R.
7007.1115 registration permit option A has been revised to include
minor clarifications and corrections. Minn. R. 7007.1120 registration
permit option B has been revised to include the addition of subpart 4,
which describes the calculation method for volatile organic compounds
(VOCs). EPA finds these revisions approvable as they clarify the rule
language and do not change the substance of the rule. EPA proposes to
approve the revisions to Minn. R. 7007.1115 and 7007.1120 into the
Minnesota SIP.
    Minn. R. 7007.1125 was added to describe the requirements for
sources to obtain a new registration permit option

C. Option C is intended for sources consisting only of boilers,
reciprocating internal combustion engines, and/or emissions from VOC-
containing materials, and which meet additional limiting criteria. The
rule also excludes from eligibility any source that uses or generates
nitrous oxide (NOX) other than from combustion units and
insignificant activities, and any source that uses or generates
hydrofluorocarbons, perfluorocarbons, or sulfur hexafluoride other than
from insignificant activities.
    The SIP revision includes methods for calculating emissions from
boilers, internal combustion engines and the use of VOC-containing
materials. The rule also includes emission factors and calculations to
be used to determine eligibility and compliance under option C.
Further, it adds instructions for sources that may no longer qualify
for a registration permit due to regulatory changes.
    Minn. R. 7007.1130 has been revised to add compliance requirements
for registration permit option D sources. A source is eligible for a
registration permit option D if it has the potential to emit pollutants
at levels exceeding a state or Federal threshold but reduces emissions
by using pollution control equipment, or some other measure, so that
the annual actual emissions for each pollutant are less than half the
Federal permit threshold. Sources can demonstrate that actual emissions
are below the thresholds with actual emissions calculations based on
emission factors, performance tests, continuous emission monitoring and
material balance methodology. Additionally, MPCA updated the
registration permit option D by adding another eligible category of
sources--low-emitting option D sources. MPCA did not change existing
emissions thresholds under option D.
    EPA proposes to find that the addition of Minn. R. 7007.1125 and
revisions to Minn. R. 7007.1130 are consistent with CAA section 110(l)
as these changes do not relax any previously approved SIP provision.
Limitations are created in Minn. R. 7007.1125 and 7007.1130 that are
equivalent to the types of limits that would have been established in
an individual permit. Due to the low levels of actual emissions from
these sources, EPA believes that the SIP revision will not interfere
with attainment and maintenance of the NAAQS. EPA proposes to approve
the addition of Minn. R. 7007.1125 and revisions to Minn. R. 7007.1130
into the Minnesota SIP.
    MPCA added the following rules which pertain to capped permit
option requirements: Minn. R. 7007.1140, 7007.1141, 7007.1142,
7007.1143, 7007.1144, 7007.1145, 7007.1146, 7007.1147, and 7007.1148.
Minnesota's capped emission permit option is a rule-based permit in
which all requirements are contained in a rule rather than a site-
specific permit document. The capped permit restricts a facility's
emissions below Federal permitting thresholds and requires the facility
to comply with all applicable requirements. The capped permit allows
the facility to make changes as long as emissions remain below the
facility-wide thresholds and the facility is able to demonstrate
continued compliance with all requirements. The capped permit was
created to help reduce the permit backlog for small and medium-size
sources that do not qualify for Minnesota's registration permits, to
create incentives to reduce emissions to qualify for the capped permit,
and to reduce administrative costs related to permitting for facilities
and Minnesota.
    There are two options available to facilities that choose a capped
permit. Option 1 is for sources that will include actual emissions from
all emissions units and insignificant activities, for which emissions
factors or other calculation methods do not exist. Option 2 is for
sources that will include actual emissions from all emissions units,
insignificant activities and conditionally insignificant activities, as
described in chapter 7008. Option 1 has higher allowable facility-wide
emission limits than option 2.
    Certain types of sources, however, are not eligible for a capped
permit, even if their actual emissions fall below the capped permit
thresholds. The sources that are not eligible for a capped permit are
listed in Minn. R. 7007.1140, sub-paragraph 2. The rule also outlines
procedures for sources that no longer meet the eligibility requirements
of the capped permit option.
    The capped permit option includes a public participation process.
MPCA must electronically post notice of receipt of an application for a
capped permit. The notice must identify the name and location of the
facility to be permitted, the facility's SIC code, information on
whether the facility is new or existing, a brief description of the
comment period procedures, and contact information for additional
information. The public comment period must be at least 30 days. In
addition, during the public comment period, a contested case hearing on
the application may be requested. The public participation requirements
do not apply to applications in which a source is transferring from one
capped permit option to another or if there is a change in name,
mailing address, ownership, or control of the stationary source.
    EPA proposes to find that the addition of Minn. R. 7007.1140-
7007.1148 to the SIP is consistent with CAA section 110(l). These
revisions do not relax any previously approved SIP provision.
Limitations are created throughout Minn. R. 7007.1140-7007.1148 that
are equivalent to the types of limits that would have been established
in an individual permit. Because of the low levels of actual emissions
from these sources, the SIP revisions are not expected to interfere
with attainment and maintenance of the NAAQS. EPA proposes to approve
the addition of Minn. R. 7007.1140-7007.1148 into the Minnesota SIP.
    Minn. R. 7007.1150 has been revised to provide the criteria for a
source to qualify for a replacement of existing control equipment. The
replacement control equipment must be listed by MPCA as control
equipment with sufficient control efficiency. EPA finds these revisions
approvable as they do not relax the stringency of the rule. EPA
proposes to approve the revisions to Minn. R. 7007.1150 into the
Minnesota SIP.
    Minn. R. 7007.1200 has been revised to include subpart 4 which
describes recordkeeping requirements for calculations required by this
Minn. R. 7007.1200. EPA finds these revisions approvable as they add
recordkeeping requirements and do not change the applicability of the
rule. EPA proposes to approve the revisions to Minn. R. 7007.1200 into
the Minnesota SIP.
    Minn. R. 7007.1250 subpart 1 has been revised to include only
emission units and activities listed as insignificant activities in
Minn. R. 7007.1300 subparts 2 and 3, and to require the permittee to
initiate an administrative amendment within 30 days if a modification
triggers new monitoring, recordkeeping, or reporting requirements. EPA
finds these revisions approvable as they align the rule with Federal
permitting requirements. EPA proposes to approve the revisions to Minn.
R. 7007.1250 into the Minnesota SIP.
    EPA proposes to approve the removal of Minn. R. 7007.1251 from the
Minnesota SIP as it solely contains a table listing hazardous air
pollutants (HAPs). MPCA added the HAPs table to Minn. R. 7007.1300
subpart 5. Minn. R. 7007.1300 subpart 2 has been revised to add an
additional requirement for emissions calculations related to
insignificant activities to ensure that adequate information is
provided to

determine the applicability of the rules for various emissions sources.
Minn. R. 7007.1300 subpart 3 has been revised to specify and correct
insignificant activities. Minn. R. 7007.1300 subpart 4 has been revised
to clarify language for insignificant activities as they relate to the
initial issuance of part 70 permits. Subpart 4 does not apply to permit
amendments or reissuance. EPA finds these revisions approvable as they
add requirements and do not relax the stringency of the rule. EPA
proposes to approve the revisions to Minn. R. 7007.1300 into the
Minnesota SIP.
    Minn. R. 7007.1400 subpart 1 (D) has been revised to clarify
situations where certain monitoring, recordkeeping, or reporting
requirements are no longer applicable. Minn. R. 7007.1400 subpart 1 (H)
has been revised to allow an administrative amendment to extend a
testing deadline in a permit if the extension is needed to allow the
permittee to test at worst case conditions. Minn. R. 7007.1400 subpart
1 has been revised to add include subparts I, J, and H which amend
permit administrative requirements. EPA finds these revisions
approvable as they make the rule consistent with 40 CFR 70.7(d) and 40
CFR part 63 and part C requirements. EPA proposes to approve the
revisions to Minn. R. 7007.1400 into the Minnesota SIP.
    Both Minn. R. 7007.1450 and 7007.1500 have been revised to clarify
the differences between requirements of minor and major permit
amendments. Minn. R. 7007.1500 has been revised to clarify what changes
may be made by major permit amendment to make the rule compliant with
Federal permitting requirements. EPA proposes to approve the revisions
to Minn. R. 7007.1450 and 7007.1500 into the Minnesota SIP.
    Minn. R. 7007.1600 has been revised to require that a permittee
submit a permit application when additional Federal requirements become
applicable to a stationary source with a remaining permit term of three
or more years or with a non expiring permit. EPA finds these revisions
approvable as they make the rule consistent with Federal part 70 rule
requirements. EPA proposes to approve the revisions to Minn. R.
7007.1600 into the Minnesota SIP.
2. Miscellaneous
    Several miscellaneous changes were made to Minn. R. 7007.4010-
7007.5000. Minn. R. 7007.4010 has been revised to remove obsolete
definitions of terms no longer used in Minn. R. 7007.4000 to 7007.4030.
The conditions for permit at Minn. R. 7007.4020 was updated to add a
reference to appendix S, part (II), section (A). Minn. R. 7007.5000 has
been revised to incorporate by reference the Federal guidelines for
Best Available Retrofit Technology (BART) and describes the
requirements for BART determination and implementation. EPA proposes to
approve the revisions to Minn. R. 7007.4010-7007.4020 and the addition
of Minn. R. 7007.5000 into the Minnesota SIP.

F. Chapter 7008: Conditionally Exempt Stationary Sources and
Conditionally Insignificant Activities

    MPCA promulgated Chapter 7008 rules to streamline and simplify
Minnesota's air quality permitting program. The addition of Chapter
7008 establishes conditions under which sources are exempt from the
requirement to apply for and obtain an air emission permit. Chapter
7008 also establishes the conditions under which certain activities
will qualify as insignificant activities. The sources that may qualify
as conditionally exempt include gasoline service stations and concrete
manufacturing plants that have throughput and production limited to
below thresholds outlined in the rule. In addition, material usage in
coating and cleaning operations could be exempted from permitting
requirements if usage remains below thresholds for VOC and particulate
matter (PM). The rule cannot apply to any material activity with lead
as a component. PM and particulate matter 10 micrometers and smaller
(PM10) emitting operations that vent inside a building may
also qualify as conditionally insignificant activities. Activities such
as buffing, polishing, carving, cutting, drilling, machining, routing,
sanding, sawing, surface grinding or turning equipment must be filtered
through an air cleaning system and vented inside the building at all
times in order to be considered insignificant activities. Chapter 7008
requires sources who claim their operations are conditionally exempt or
conditionally insignificant to maintain records that demonstrate
eligibility with the rule.
    The minor NSR provisions at 40 CFR 51.160 require state programs to
determine if activities would violate an applicable SIP or national
standard and to prevent construction of an activity that would violate
an applicable SIP provision or national standard. Minnesota Rule 7008
exempts certain eligible stationary sources from air permitting
requirements. When determining adequacy of state rules, EPA is
concerned with the possibility that an exemption might allow an
activity that should be subject to major source permitting requirements
to escape appropriate review and permitting, that sources are required
to maintain information adequate for the state to ensure that
exemptions have been applied appropriately, and that the exemptions
would not interfere with any applicable requirement concerning
attainment and reasonable further progress, or any other applicable
requirement of the CAA.
    Minnesota Chapter 7008 provides limitations on the use of the
specific exemptions in Minn. R. 7008.0050-7008.4100 and requires
sources using the exemptions to maintain certain records to demonstrate
that the exemptions have been applied appropriately. Specific
conditionally exempt sources and conditionally insignificant sources
may be required to implement additional monitoring and recordkeeping as
required to ensure that the equipment is operating as required under
the exemption.
    Section 110(l) of the CAA states that a SIP revision cannot be
approved if the revision would interfere with any applicable
requirement concerning attainment and reasonable further progress
toward attainment of a NAAQS or any other applicable requirement of the
CAA. These conditionally exempt sources or conditionally insignificant
activities are expected to yield very low levels of actual emissions of
regulated pollutants and are not expected to interfere with attainment
and maintenance of the NAAQS. EPA proposes to approve the addition of
Minn. R. 7008.0050, 7008.0100, 7008.0200, 7008.0300, 7008.2000,
7008.2100, 7008.2200, 7008.2250, 7008.4000, 7008.4100, and 7008.4110
into the Minnesota SIP.

G. Chapter 7009: Ambient Air Quality Standards

    Chapter 7009 contains rules concerning ambient air quality
standards, air pollution episodes, and adoption of Federal regulations.
Changes to Chapter 7009 include amendments to Minn. R. 7009.0010,
7009.0020, and 7009.1060, the addition of Minn. R. 7009.0090, and the
removal of Minn. R. 7009.0060-7009.0080. EPA proposes to approve the
revisions to Chapter 7009 into the Minnesota SIP.
1. Ambient Air Quality Standards
    MPCA amended two rules, Minn. R. 7009.0010 and 7009.0020, which
pertain to ambient air quality standards. Minn. R. 7009.0010 has been
revised to define terms related to ambient air quality standards used
throughout Chapter 7009. Minn. R. 7009.0010 has been revised to add
three definitions for the terms ``averaging time'', ``form of the
standard'', and ``total suspended

particulate''. EPA finds the addition of these definitions approvable
as they are in line with Federal definitions of these terms and do not
lessen the stringency of the rules to which they apply. Minn. R.
7009.0020 has been revised to apply specifically to the Minnesota
Ambient Air Quality Standards (MAAQS) and to align the rule with the
Federal definition of ambient air. EPA proposes to approve the
revisions to Minn. R. 7009.0010 and 7009.0020 into the Minnesota SIP.
    MPCA removed several rules under Chapter 7009 as they were either
not NAAQS related or no longer relevant. Minn. R. 7009.0060 solely
described a measurement methodology for hydrogen sulfide, which is not
considered to be a criteria pollutant. Therefore, the removal of Minn.
R. 7009.0060 from Minnesota's SIP will not impact Minnesota's ability
to attain or maintain the NAAQS. Minn. R. 7009.0070 referred to the
time of compliance for attaining the ozone and sulfur dioxide
(SO2) standards by 1984. MPCA removed this rule because it
is outdated and unnecessary. Compliance dates for NAAQS pollutants are
set during the NAAQS revision process. Minnesota is also currently
attaining and maintaining the NAAQS for ozone and SO2.
Minnesota requested that Minn. R. 7009.0080, Minnesota Ambient Air
Quality Standards, be removed and replaced with Minn. R. 7009.0090.
Minn. R. 7009.0080 contains a table of the MAAQS which are tracked at
the state level. Minn. R. 7009.0090 incorporates by reference the NAAQS
for SO2, PM10, PM2.5, carbon monoxide
(CO), ozone, nitrogen dioxide, and lead as amended. Adding Minn. R.
7009.0090 will improve enforceability of the NAAQS and ensure that data
for those pollutants is collected. EPA proposes to approve the removal
of Minn. R. 7009.0060-7009.0080 and the addition of Minn. R. 7009.0090.
2. Air Pollution Episodes
    Minn. R. 7009.1060 has been revised to include the episode levels
for PM10 24-hour average, to add significant harm levels for
1-hour and 4-hour CO averaging times, and to remove the episode levels
for ``SO2 x Part'', all in the table containing alert levels
related to declaration of emergency. These revisions of Minn. R.
7009.1060 meet the requirements of CAA section 110(l) because the
revised episode levels are stricter than the original episode levels.
The removal of the ``SO2 x Part'' episode levels is
approvable because Minnesota is retaining separate episode levels for
SO2 and PM10. EPA proposes to approve the
revisions to Minn. R. 7009.1060 into Minnesota's SIP.

H. Chapter 7011: Standards for Stationary Sources

    Chapter 7011 contains rules concerning standards for stationary
sources. MPCA updated various rules throughout chapter 7011. Further,
MPCA requested the removal of Minn. R. 7011.0725 and 7011.1415.
    In the following rules, MPCA updated control equipment codes due to
irrelevance or unnecessary state duplication of EPA control equipment
codes: Minn. R. 7011.0070 and 7011.0080. EPA proposes to approve the
revisions to Minn. R. 7011.0070 and 7011.0080 into the Minnesota SIP.
    The following rules underwent minor language changes such as
changing the word ``shall'' to ``must'' or ``which'' to ``that'': Minn.
R. 7011.0065, 7011.0080, 7011.0510, 7011.0515, 7011.0530, 7011.0535,
7011.0610, 7011.0615, 7011.0620, 7011.0710, 7011.1105, 7011.1115,
7011.1135, 7011.1305, 7011.1310, 7011.1320, 7011.1405, 7011.1425,
7017.1080, 7017.1110, and 7017.1170. EPA finds these revisions
approvable as they are minor language changes that do not affect the
requirements of the rule. EPA proposes to approve the revised
aforementioned rules into the Minnesota SIP.
    Minn. R. 7011.0070 and 7017.2060 have been revised for spelling or
grammar corrections, such as changing the spelling of ``condensible''
to ``condensable.'' EPA finds these revisions approvable as they are
minor language changes that do not affect the requirements of the rule.
EPA proposes to approve the revisions to Minn. R. 7011.0070 and
7017.2060 into the Minnesota SIP.
    Minn. R. 7011.0065 has been revised to define the applicability of
the rules concerning control equipment for stationary sources, and to
clarify which state rules apply if a change regarding facility control
equipment triggers a notification requirement under part Minn. R.
7007.1150, item C, subitem (3). The revision to Minn. R. 7011.0065 will
assist permittees in determining compliance with notifications sent to
MPCA and does not affect the applicability of the rule. EPA proposes to
approve the revisions to Minn. R. 7011.0065 into the Minnesota SIP.
    Minn. R. 7011.0070 has been revised to specify that condensable PM
refers to both organic and inorganic compounds. EPA finds this revision
approvable as it is merely a clarification and does not affect the
applicability of the rule. EPA proposes to approve the revisions to
Minn. R. 7011.0070 into the Minnesota SIP.
    Several rules underwent minor language changes such as clarifying
the form of PM being measured. In Minn. R. 7011.0510, 7011.0515,
7011.0530, 7011. 0610, 7011.0615, 7011.0710, 7011.0715, 7011.0720,
7011.0905, 7011.1105, 7011.1115, 7011.1130, 7011.1305, 7011.1310,
7011.1320, 7017.2060, 7011.1425, 7011.1405, 7011.1410, and 7011.1425
the terms ``filterable'' and/or ``condensable'' were added to clarify
the form of PM referenced in these rules. Filterable PM is the fraction
of particles that are solid and captured on a filter in the stack
sampling procedure, which for indirect heating equipment sources is the
PM measured with reference Method 5 and, thus, is the fraction of
particles regulated by this standard. EPA proposes to approve the
revised aforementioned rules into the Minnesota SIP.
    Minn. R. 7011.0530, 7011.0615, 7011.0720, 7011.1320 and 7011.1425
have been revised to add the term ``to demonstrate compliance'' to
clarify the distinction in the forms of PM being measured and the
subset of data to be used to determine compliance. EPA proposes to
approve the revisions to Minn. R. 7011.0530, 7011.0615, 7011.0720,
7011.1320 and 7011.1425 into the Minnesota SIP.
    Minn. R. 7011.0535 has been revised to delete duplicative
references to Federal reference methods as it is unnecessary to state
in the state rule test procedures included in the reference methods.
EPA proposes to approve the revisions to Minn. R. 7011.0535 into the
Minnesota SIP.
    Minn. R. 7011.0551 and 7011.0625 have been revised to amend
references to regulatory provisions. EPA finds these revisions
approvable as they do not change the meaning of the rules or lessen
their stringency. EPA proposes to approve the revisions to Minn. R.
7011.0551 and 7011.0625 into the Minnesota SIP.
    Older versions of Minn. R. 7011.0725 set forth an outdated protocol
developed by MPCA in 1969 for recovering organic condensable material
samples and determining particulate emissions. Minn. R. 7011.0725 has
been revised to remove the outdated protocol and replace references to
the rule with specific instruction to use EPA Method 202 (40 CFR part
51, appendix M) for performance tests. EPA's Method 202--Dry Impinger
Method for Determining Condensable Particulate Emissions from
Stationary Sources provides a test method for measuring condensable
particulate matter. Replacing references of 7011.0725 with EPA Method
202 will

improve consistency and update precision for most emission sources.
Several rules were amended to incorporate Method 202 for measurement of
the organic portion of condensable PM, which replaced the procedures in
Minn. R. 7011.0725. The following rules have been revised to
incorporate EPA Method 202 for measurement of the organic portion of
condensable PM: Minn. R. 7011.0615, 7011.0620, 7011.0720, and
7017.2060. These changes align the rule with Federal methods. EPA
proposes to approve the removal of Minn. R. 7011.0725 and revisions to
Minn. R. 7011.0615, 7011.0620, 7011.0720, and 7017.2060 into the
Minnesota SIP.
    Minn. R. 7011.0620 has been revised to clarify that owners and
operators may request approval of smaller sampling times or volumes
when necessitated by process variables or site-specific limitations.
EPA proposes to approve the revisions to Minn. R. 7011.0620 into the
Minnesota SIP.
    Minn. R. 7011.1135 subpart 2 has been revised to restrict the
conditions under which a facility may modify a PM test, by requiring a
description of site-specific conditions necessitating the test
modification. These changes align the rule with Federal methods. EPA
proposes to approve the revisions to Minn. R. 7011.1135 into the
Minnesota SIP.
    Minn. R. 7011.1201 has been revised to update definitions for waste
combustors. Updates include rule citation corrections, renumbering
subparts, removal of obsolete definitions, addition of definitions for
terms used throughout sections of the SIP such as resinated wood and
retrofit, and other clarifying language. EPA finds these revisions
approvable as they do not change the meaning or lessen the stringency
of the rule. EPA proposes to approve the revisions to Minn. R.
7011.1201 into the Minnesota SIP.
    Minn. R. 7011.1205 has been revised to update the rule citations to
also include 7011.1290-7011.1294, since the documents incorporated by
reference in 7011.1205 are also relevant to these rules. EPA proposes
to approve the revisions to Minn. R. 7011.1205 into the Minnesota SIP.
    Minn. R. 7011.1405 and 7011.1410 have been revised to clarify which
contain the standards of performance for existing and new affected
facilities at petroleum refineries. In subpart 2 of Minn. R. 7011.1405
and 7011.1410, MPCA clarified that flares that are subject to the
conditions of 40 CFR part 60, subpart Ja, are not subject to the limits
of this subpart. In subpart 3 of Minn. R. 7011.1405 and 7011.1410, a
statement was added to clarify that the standards of performance for
indirect heating equipment in Minn. R. 7011.0500 to 7011.0530, do not
apply to indirect heating equipment at petroleum refineries, and that
the standards of performance for indirect heating equipment at
petroleum refineries is listed in Minn. R. 7011.1405 and 7011.1410
subpart 3. EPA proposes to approve the revisions to Minn. R. 7011.1405
and 7011.1410 into the Minnesota SIP.
    MPCA updated the definitions for liquid petroleum and volatile
organic liquid storage vessels in Minn. R. 7011.1500 to include the
definition of ``commenced.'' MPCA updated the definitions for sulfuric
acid plants in Minn. R. 7011.1600 to include a definition for
``existing sulfuric acid production unit.'' EPA proposes to approve the
revisions to Minn. R. 7011.1500 and 7011.1600 into the Minnesota SIP.

I. Chapter 7017: Monitoring and Testing Requirements

    Chapter 7017 contains rules regarding monitoring and testing
requirements. Several updates were made to the rules in Chapter 7017,
and both Minn. R. 7017.1210 and 7017.2018 were removed and replaced by
Minn. R. 7017.1215 and 7017.2017 respectively. EPA proposes to approve
these revisions into the Minnesota SIP.
1. Continuous Monitoring Systems
    Minn. R. 7017.1002 has been revised to include definitions relevant
to continuous monitoring systems, specifically, for the terms ``grace
period,'' ``quality assurance operating quarter,'' ``stack operating
hour,'' and ``unit operating hour.'' EPA finds these revisions
approvable as they clarify terms used in the SIP and do not change the
applicability or stringency of the rules. EPA proposes to approve the
revisions to Minn. R. 7017.1002 into the Minnesota SIP.
    Both Minn. R. 7007.1350 and 7017.1080 have been revised to clarify
that certification test reports must be submitted in the format
specified by the commissioner. Minn. R. 7017.1080 has been revised to
remove subpart 3, the microfiche submittal deadline, as it is outdated
and has since been repealed by the state. MPCA revised subparts 1-4 of
Minn. R. 7017.1120. Subpart 1 has been revised to delete the address
previously listed and require submittal ``in a physical or electronic
format as specified by the commissioner and to the address identified
on the required form or as provided by the agency.'' Subpart 2, which
had specified alternate formats for making submissions, e.g., facsimile
or CD ROM, has been repealed by the state because MPCA now includes
electronic format as a standard submission method in other subparts.
Subpart 3 has been revised to indicate that submittal dates may be
specified not only in a compliance document but also in a regulation.
Subpart 4 has been revised to more generally require certification
statements to be submitted ``in a format specified by the
commissioner,'' and to delete outdated submission procedures. Minn. R.
7017.2035 has been revised to remove an outdated submittal option that
allowed for performance test reports to be submitted as a microfiche.
EPA proposes to approve the revisions to Minn. R. 7007.1350, 7017.1080,
7017.1120, and 7017.2035 into the Minnesota SIP.
    Minn. R. 7017.1110 has been revised to add two requirements
regarding the contents of excess emissions reports. These new
requirements include a summary of the cylinder gas audit and relative
accuracy test audit (RATA) required by Minn. R. 7017.1180 and 7017.1220
if the audits were completed in the previous quarter and if applicable,
notifications of exceptions of applicability from audit frequencies as
allowed in Minn. R. 7017.1170, subparts 4a and 5a, and Minn. R.
7017.1215. EPA finds these revisions approvable as they do not change
the stringency of the rule. EPA proposes to approve the revisions to
Minn. R. 7017.1110 into the Minnesota SIP.
    Minn. R. 7017.1170 describes quality assurance and control
requirements for continuous emissions monitoring systems (CEMS). Minn.
R. 7017.1170 has been revised to remove subpart 1 and include 1a, which
states that the quality assurance and control requirements apply to
each CEMS unless otherwise specified by another applicable standard.
Minn. R. 7017.1170 subpart 2 has been revised by adding the requirement
that the quality assurance plan contain the information required by 40
CFR part 75, appendix B. Minn. R. 7017.1170 subpart 3 has been revised
by adding a requirement for facilities to conduct daily calibration
drift assessments and adjustments in accordance with the procedures in
40 CFR part 75, appendix B, section 2.1. Minn. R. 7017.1170 subpart 4
has been revised to remove the semiannual cylinder gas audit
requirements and replaced them with the cylinder gas audit provisions
of subpart 4a. Subpart 4 incorrectly cited procedures in 40 CFR part 60
appendix G, section 5.1.2 rather than 4 CFR part 60 appendix F, section
5.1.2 and contained an obsolete

compliance date. Subpart 4a requires cylinder gas audits according to
40 CFR part 60, appendix F, section 5.12, or 40 CFR part 75, appendix
A, section 6.2, for sources not subject to 40 CFR part 60. It also
provides a 168-hour grace period if the unit being monitored by the
CEMS is not in operation when the cylinder gas audit is due. Minn. R.
7017.1170 has been revised to remove subpart 5 and add subpart 5a which
contains the RATA requirements. Subpart 5a requires RATAs according to
40 CFR part 60, appendix B, or 40 CFR part 75, appendix A, sections 6.5
to <IP_ADDRESS>, and appendix B, sections <IP_ADDRESS> and <IP_ADDRESS>, as amended.
Minn. R. 7017.1170 subpart 6 has been revised to add a citation to 40
CFR part 75, appendix A, section 3.3, as amended. Minn. R. 7017.1170
has been revised to add subpart 8 which states that data collected
during out of control periods is not valid and may not be used for
compliance demonstrations. EPA finds the addition of subpart 8
approvable as it meets the requirements of 40 CFR part 60, appendix F,
sections 4.3.2 and 5.2.2. EPA proposes to approve the revisions to
Minn. R. 7017.1170.
    Minn. R. 7017.1210 includes outdated Continuous Opacity Monitoring
Systems (COMS) procedures used to demonstrate compliance with New
Source Performance Standards. Minn. R. 7017.1210 has been revised to
remove monitoring and testing requirements and replaced it with Minn.
R. 7017.1215, which incorporates by reference ``Procedure 3--Quality
Assurance Requirements for Continuous Opacity Monitoring Systems at
Stationary Sources, Code of Federal Regulations, title 40, part 60,
Appendix F'', as amended. Replacing Minn. R. 7017.1210 with Minn. R.
7017.1215 will ensure that MPCA's COMS procedures are up to date and in
compliance with EPA regulations. EPA proposes to approve the removal of
Minn. R. 7017.1210 and the addition of Minn. R. 7017.1215 into the
Minnesota SIP.
2. Performance Tests
    Minn. R. 7017.2001 has been revised to define the applicability for
performance tests, by removing subpart 2 because it referenced an
outdated transition period deadline for performance test procedures.
The deadline passed in 1993 and the transition has been implemented so
removal of this subpart does not affect Minnesota's air quality
management program. EPA proposes to approve the revisions to Minn. R.
7017.2001 into the Minnesota SIP.
    Minn. R. 7017.2018 has been removed and replaced with Minn. R.
7017.2017 as it provides the current procedure for submittals required
under Minn. R. 7017.2015 to 7017.2060. Minn. R. 7017.2015 subpart 4 has
been revised to reflect the repeal of part Minn. R. 7017.2018 and its
replacement by part Minn. R. 7017.2017. EPA proposes to approve the
removal of Minn. R. 7017.2018 and the addition of Minn. R. 7017.2017
into the Minnesota SIP.
    Minn. R. 7017.2025 has been revised to clarify rule language and
provide rule citations concerning operational requirements and
limitations. In subpart 3a part C, MPCA revised the language to state
that for new operating limits and pollution control equipment limits
not specified in item A or B, the averaging time and any extension of
the range of values must be defined in the test plan approved under
Minn. R. 7017.2030, subpart 2. EPA finds this revision approvable as it
does not change the requirements of the rule and clarifies the test
plan requirements by citing Minn. R. 7017.2030, subpart 2. EPA proposes
to approve the revisions to Minn. R. 7017.2025 into the Minnesota SIP.
    Minn. R. 7017.2050 subpart 1 has been revised to clarify that if
test methods incorporated by reference contain exemptions and
exclusions that do not meet the requirements of Minn. R. 7017.2001 to
7017.2060, the exemptions and exclusions do not apply. EPA proposes to
approve the revisions to Minn. R. 7017.2050 into the Minnesota SIP.
    MPCA made several updates to performance test procedures in Minn.
R. 7017.2060. MPCA removed language referring to emissions test
procedures for Federal methods, such as Method 5 Method 202 for
determining PM emissions, which has been revised to instruct owners and
operators to use the Federal methods as amended to avoid future
conflict with state rules if Federal methods are revised. Minn. R.
7017.2060 subpart 3.B. has been revised to provide clarity on how a
facility determines PM emissions, which is based on the sum of
filterable and organic condensable PM unless otherwise required in
chapter 7011. Minn. R. 7017.2060 subpart 3.C. has been revised to
clarify that a facility's compliance status is determined by the sum of
filterable and organic condensable PM. Minn. R. 7017.2060 has been
revised to add Subpart 3.D. which allows an owner or operator to apply
to the commissioner to exclude condensable PM from a performance test
for PM provided that previous performance test results show that the
emissions unit is not a source of organic condensable PM emissions or
an exception in Method 202, section 1.4(h), as amended, applies.
Further, Minn. R. 7017.2060 subpart 3.D. removes the ability of a
facility owner or operator to use a mass balance calculation as a
rationale for waiving measurement of condensable PM. Minn. R. 7017.2060
subpart 4 has been revised to clarify testing requirements for
PM10 by identifing the test methods used, and how to
demonstrate compliance with applicable PM10 emission limits.
Minn. R. 7017.2060 subpart 4 has been revised to allow an owner or
operator to apply to the commissioner to exclude organic and inorganic
condensable PM from a performance test for PM10 provided
that previous performance test results show that the emissions unit is
not a source of organic or inorganic condensable PM emissions or that
an exception in Method 202, section 1.4(h), as amended, applies. Minn.
R. 7017.2060 has been revised to add subpart 4a to establish testing
requirements for PM2.5, to describe how to demonstrate
compliance with PM2.5 emission limits. Minn. R. 7017.2060
subpart 4q will reference Federal rules for Methods 201A and 202,
establish how to report PM2.5 emissions, and define and
establish an emission facility's compliance status. Subpart 4a includes
a provision to allow an owner or operator to apply to the commissioner
to exclude organic and inorganic condensable PM from a performance test
for PM2.5 provided that previous performance test results
show that the emissions unit is not a source of organic or inorganic
condensable PM emissions or that an exception in Method 202, section
1.4(h), as amended, applies. EPA proposes to approve the revisions to
Minn. R. 7017.2060 into the Minnesota SIP.

J. Chapter 7019: Emission Inventory Requirements

    Minn. R. 7019.3020 has been revised to add different types of
registration permits, including requirements for calendar year actual
emission reporting for option A registration permits. EPA finds these
revisions approvable as they add requirements and do not reduce any
previously SIP approved requirements. EPA proposes to approve the
revisions to Minn. R. 7019.3020.
    Minn. R. 7019.3030 has been revised to add a mercury material
balance reference. Minn. R. 7019.3050 has been revised to add the
performance test requirements for mercury emission sources in Minn. R.
7019.3050. EPA proposes to approve the revisions to Minn. R. 7019.3030
and Minn. R. 7019.3050 into the Minnesota SIP.

K. Chapter 7023: Mobile and Indirect Sources

    No changes were made to Chapter 7023. EPA proposes to reapprove
Chapter 7023 into the Minnesota SIP.

L. EPA Corrections

    On August 10, 2011 (76 FR 49303), EPA approved the removal of all
of Chapter 7001 from Minnesota's SIP, however, 40 CFR 52.1220(c) was
not revised accordingly. EPA proposes to approve and take an
administrative action to correct the table at 40 CFR 52.1220(c) by
removing all entries for Chapter 7001.
    In addition to the correction mentioned above, the submittal also
included corrections to administrative errors contained in the
Minnesota PM10 designation table at 40 CFR 81.324 to help
clarify which areas in the state are listed as unclassifiable/
attainment. EPA proposes to approve and take an administrative action
to correct the table at 40 CFR 81.324.

M. Items EPA Is Not Taking Action On

    EPA proposes to take no action on the definitions at Minn. R.
7007.0100, subpart 9b through 9f, 12c and 24b. These definitions are
related to the environmental management system (EMS). Minnesota has not
submitted the EMS provisions as part of this SIP submittal. Since the
definitions do not reference provisions in the SIP and MPCA plans to
remove the EMS conditions from its rules at a later date, EPA proposes
to take no action on Minn. R. 7007.0100, subpart 9b through 9f, 12c and
24b.
    The following rules reference an outdated greenhouse threshold for
carbon dioxide equivalent which is less stringent than the current
Federal requirement: Minn. R. 7007.0100 subpart 24a, 7007.0150,
7007.0200, and 7007.0500. EPA proposes to take no action on the
revisions to Minn. R. 7007.0100 subpart 24a, 7007.0150, 7007.0200,
7007.0500.
    EPA proposes to take no action on the exemptions MPCA requested to
remove at Minn. R. 7011.1415 since they refer to exemptions for excess
emissions resulting from gas flaring at petroleum refineries during
periods of startup, shutdown, and malfunction. EPA is currently
deliberating on how to move forward on startup, shut down, and
malfunction related issues and will take no action on Minn. R.
7011.1415 in this SIP action. Subsequently, EPA proposes to take no
action on the revised definitions at Minn. R. 7011.1400 as the revised
definitions relate to the requested removal of Minn. R. 7011.1415.

III. What action is EPA taking?

    EPA is proposing to approve MPCA's November 14, 2018, submittal as
a revision to its existing SIP with exception to the definitions at
Minn. R. 7007.0100, paragraph 9b through 9f, 12c and 24b, Minn. R.
7011.1400, and Minn. R. 7011.1415, where EPA is taking no action.

IV. Incorporation by Reference

    In this rule, EPA is proposing to include in a final EPA rule
regulatory text that includes incorporation by reference. In accordance
with requirements of 1 CFR 51.5, EPA is proposing to incorporate by
reference revisions to Minnesota Rules Chapter 7000 Procedural Rules;
Chapter 7002 Permit Fees; Chapter 7005 Definitions and Abbreviations;
Chapter 7007 Permits and Offsets; Chapter 7008 Conditionally Exempt
Stationary Sources and Conditionally Insignificant Activities; Chapter
7009 Ambient Air Quality Standards; Chapter 7011 Standards for
Stationary Sources; Chapter 7017 Monitoring and Testing Requirements;
and Chapter 7019 Emission Inventory Requirements, as discussed in
section II. ``Review of State Submittal'' above. EPA has made, and will
continue to make, these documents generally available through
www.regulations.gov and at the EPA Region 5 Office (please contact the
person identified in the For Further Information Contact section of
this preamble for more information).

V. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the CAA 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 CAA. Accordingly, this
action merely approves 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 Orders 12866 (58
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     Is not an Executive Order 13771 (82 FR 9339, February 2,
2017) regulatory action because SIP approvals are exempted under
Executive Order 12866;
     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 CAA; 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, the SIP is not approved to apply on any Indian
reservation land or in any other area where EPA or an Indian tribe has
demonstrated that a tribe has jurisdiction. In those areas of Indian
country, the rule does not have tribal implications and will not impose
substantial direct costs on tribal governments or preempt tribal law as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide,
Incorporation by reference, Intergovernmental relations, Lead, Nitrogen
dioxide, Ozone, Particulate matter, Reporting and recordkeeping
requirements, Sulfur oxides, Volatile organic compounds.

    Dated: January 17, 2020.
Cheryl L. Newton,
Acting Regional Administrator, Region 5.
[FR Doc. 2020-02143 Filed 2-4-20; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 77, Number 120 (Thursday, June 21, 2012)]
[Notices]
[Pages 37472-37474]
[FR Doc No: 2012-15102]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

[Docket ID PHMSA-2012-0142]

Pipeline Safety: Notice of Public Workshop To Discuss
Implementing Incorporation by Reference Requirements of Section 24 of
the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
DOT.

ACTION: Request for information and notice of public workshop.

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SUMMARY: This notice is to advise interested and affected persons that
PHMSA will conduct a public workshop to discuss Section 24 of the
recently-passed Pipeline Safety, Regulatory Certainty, and Job Creation
Act of 2011 (Act) and PHMSA's implementation challenges with Section
24. Section 24 of the Act requires, within one year of enactment
(January 2013), that PHMSA no longer incorporate, in whole or in part,
voluntary consensus standards by reference into its regulations unless
those standards have been made available free of charge to the public
on the Internet. The workshop will provide interested persons with an
opportunity to submit written and oral comments and participate in
discussions concerning the legal, financial, policy, practical and
other challenges with implementing Section 24 by January 2013.

DATES: The public workshop will be held on July 13, 2012.

ADDRESSES: The public workshop will be held from 8:00 a.m. to 3:00 p.m.
EDT in the West Building, Oklahoma Room of the U.S. Department of
Transportation, 1200 New Jersey Avenue SE., Washington, DC 20590,
Phone:<PHONE_NUMBER>, Fax:<PHONE_NUMBER>. Please visit http://phmsa.dot.gov and click on this public workshop to register. There is
no registration fee to attend the public workshop. Name badge pickup
and onsite registration will be available starting at 7:30 a.m. Refer
to the meeting Web site for updated information, agenda, and times at
http://phmsa.dot.gov.
    The public workshop will include an overview of the issue in the
morning, and a panel discussion by various experts and stakeholders who
are affected by regulations promulgated by PHMSA. After the discussion,
time will be allotted for the general public to speak. All requests
from the public to speak at the workshop must include a description of
what will be said, contact information to be used to notify the
requestor of the status of his/her request (phone number on which a
message may be left, or email), and the subject/attention line (or on
the envelope if by mail): ``Implementing Incorporation by Reference
(IBR) Requirements of Section 24.'' Each participant will be allotted
five minutes to speak. Please contact Jewel Smith, Office of Chief
Counsel, to request to speak at the public workshop at<PHONE_NUMBER>, or
email at<EMAIL_ADDRESS>    Members of the public may submit written comments. Comments should
reference Docket No. PHMSA-2012-0142. Comments may be submitted in the
following ways:
     E-Gov Web Site: http://www.regulations.gov. This site
allows the public to enter comments on any Federal Register notice
issued by any agency. Follow the instructions for submitting comments.
     Fax: 1-202-493-2251.
     Mail: Docket Management System, U.S. Department of
Transportation (DOT), 1200 New Jersey Avenue SE., Room W12-140,
Washington, DC 20590.
     Hand Delivery: DOT, Docket Management System, Room W12-
140, on the ground floor of the West Building, 1200 New Jersey Avenue
SE., Washington, DC between 9:00 a.m. and 5:00 p.m., Monday through
Friday, except Federal holidays.
    Instructions: Identify Docket No. PHMSA-2012-0142 at the beginning
of your comments. If you submit your comments by mail, submit two
copies. If you wish to receive confirmation that PHMSA has received
your comments, include a self-addressed stamped postcard. Internet
users may submit comments at http://www.regulations.gov.
    Note: Comments will be posted without changes or edits to http://www.regulations.gov including any personal information provided. Please
see the Privacy Act statement immediately following for additional
information.
    Privacy Act Statement: Anyone may search the electronic form of all
comments received for any of our dockets. You may review DOT's complete
Privacy Act Statement in the Federal Register published April 11, 2000
(65 FR 19477).
    Information on Services for Individuals with Disabilities: For
information on facilities or services for individuals with disabilities
or to request special assistance during the workshop, please contact
Jewel Smith at

202-366-4400, or by email at<EMAIL_ADDRESS>    Copies of the presentations will be available on the public
workshop Web site and in the docket PHMSA-2012-0142 at http://www.regulations.gov, within 30 days following the workshop.
    Webcasting: The public workshop will be Webcast. Please refer to
this public workshop at http://phmsa.dot.gov for more information and
the link to the Webcast.

FOR FURTHER INFORMATION CONTACT: Jewel Smith at<PHONE_NUMBER>, or by
email at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: On January 3, 2012, President Obama signed
the Pipeline Safety, Regulatory Certainty, and Job Creation Act of
2011, Public Law 112-90 (Act). Section 24 of the Act requires, within
one year of enactment (January 2013), that PHMSA no longer incorporate,
in whole or in part, voluntary consensus standards by reference into
its regulations unless those standards have been made available free of
charge to the public on the Internet. Section 24 states ``Section
60102, as amended by this Act, is further amended by adding at the end
the following: `(p) Limitation on Incorporation of Documents by
Reference.--Beginning 1 year after the date of enactment of this
subsection, the Secretary may not issue guidance or a regulation
pursuant to this chapter that incorporates by reference any documents
or portions thereof unless the documents or portions thereof are made
available to the public, free of charge, on an Internet Web site.' ''
    When Federal agencies write regulations, the National Technology
Transfer and Advancement Act (NTTAA) of 1995 (Pub. L. 104-113; March 7,
1996) and Office of Management and Budget (OMB) Circular No. A-119
titled ``Federal Participation in the Development and Use of Voluntary
Consensus Standards and in Conformity Assessment Activities'' directs
them to use voluntary consensus standards, except when an agency
determines that such use ``is inconsistent with applicable law or
otherwise impractical.'' Voluntary consensus standards are technical
standards that are developed, published and adopted by domestic and
international organizations, which have collaborated to agree upon best
technical practices. Generally, these standards are updated
approximately every three to five years to reflect improvements to
previous technology or practices. The standards, which are often
hundreds or thousands of pages, are incorporated by reference into a
regulation in whole or in part, saving the government money and
shortening the length of the regulatory process by incorporating
existing standards instead of creating government-unique standards.
Incorporation by reference allows the voluntary consensus standards to
be treated as if they were written into the regulations and treated as
if they were published in the Federal Register and the Code of Federal
Regulations. Thus, these standards have the effect of law and can be
enforced accordingly.
    The policies in the Circular and the statutory language of the NTTA
were intended to reduce to a minimum the reliance by agencies on
government-unique standards and to rely on voluntary consensus
standards (VCS), whenever possible, as well as keep the time and costs
to write and issue standards reasonable on behalf of the Federal
government. Federal agencies also received guidance from the Circular
regarding agencies' participation in the various governmental and
private sector bodies that develop consensus standards, which are
referred to as standards developing organizations (SDOs).
    SDOs normally have a copyright or other intellectual property
interest in the standards they develop, and therefore often charge a
fee for access. Those who are governed by the regulations currently
purchase the standards, in the instances where they are not made
available for free. Without paying a fee, those who are affected by a
regulation that incorporates a standard but are not regulated by it,
may not have access to the laws that affect them. In some instances, a
regulation may only incorporate a section, a chapter or other portion
of the VCS; yet, an interested party must buy the entire VCS to access
the incorporated text.
    Currently, PHMSA incorporates approximately 60 VCS by reference
into 49 CFR Part 192--Transportation of Natural and Other Gas by
Pipeline: Minimum Federal Safety Standards; 49 CFR Part 193--Liquefied
Natural Gas Facilities: Federal Safety Standards; and 49 CFR Part 195--
Transportation of Hazardous Liquids by Pipeline. These VCS, in turn,
incorporate by reference additional consensus standards. Therefore,
purchasing all relevant standards could be significantly expensive for
a small business, a non-profit organization or a public citizen.
    PHMSA has received correspondence regarding the implementation of
Section 24 from stakeholders, including SDOs, regulated entities and
public safety groups. Based on the correspondence and on PHMSA's
operational capacity, budget and analyses, Section 24, at a minimum,
would have the following effects.

Financial

     Costs to government to purchase incorporated standards for
free public access would increase substantially.
     Impact to some SDOs for making their standards available
without compensation would be substantial and immediate.
     Costs to government would increase dramatically and
immediately if PHMSA must write its own standards or purchase the right
to freely publish standards from SDOs.

Practical

     Volume and complexity of regulations would increase if the
government wrote its own standards.
     There is a lack of government resources and technical
expertise to draft standards technically equivalent to those available
through existing SDOs.
     Time frames to write and promulgate rules would increase
significantly if the government created its own standards.
     Government regulations with government-unique standards
would not be likely to keep pace with technological and safety
advancements made in the private sector.
     SDOs standards may get more candid input, and broader
involvement, from stakeholders as standards are being developed in the
current model than would be true under a government-unique standards
process.

Legal

     Small businesses would likely look to the Small Business
Regulatory Enforcement Fairness Act, or other laws, to address any
adverse impact to them arising from either the availability of
standards, cost of standards, or increased time to promulgate
regulations following PHMSA's implementation of Section 24.
     The NTTAA and OMB Circular A-119 should be analyzed
further for reconciliation with the requirements of Section 24.
Intellectual property laws play a critical role for both in the
relationship between the government and the SDOs and in the
relationship between the SDOs and its licensors or licensees.

Policy

     Likely inconsistency of U.S. and international standards
would arise due to inability to incorporate VCS and difficulty in
harmonizing government-unique standards. This inconsistency would be
detrimental to safety,

businesses and trade, and promote increased reliance on international
standards.
     Safety, compliance and enforcement could be compromised if
the regulations become too unwieldy because government would be
required to write its own standards, or if a regulated entity does not
have access to free standards.
     Transparency in government requires that citizens have
access to the laws that govern and affect them.
     Meeting Section 508 requirements that govern the
accessibility of government documents for people with disabilities is
also a consideration.
    PHMSA and stakeholders must continue to strive to reach a
reasonable and feasible solution. Consequently, PHMSA will hold a
public workshop to provide an open forum for exchanging information on
the challenges associated with implementing the requirement of Section
24. Specifically, this public workshop will facilitate a discussion
among stakeholders to share their respective recommendations related to
the following objectives:
    1. Provide an overview to the public, regulated entities, other
Federal and state regulatory agencies, legislators in Congress,
advocacy groups, public safety professionals, the international
community and the standards developing organizations about the legal,
practical, financial and policy considerations involved with
implementing Section 24.
    2. Identify constraints, related costs and issues with implementing
Section 24 by January 2013.
    3. Collect public input that will help guide PHMSA and DOT to a
reasonable, efficient, and sound implementation strategy and plan.

Preliminary Agenda for the Public Workshop

     Event Objectives/Summary of Ongoing Activities.
     Panel 1--What is IBR? (Overview of the NTTAA, OMB Circular
A119, Section 24 of the Pipeline Safety, Regulatory Certainty, and Job
Creation Act of 2011, and Current Issues Related to Implementing
Section 24).
     Panel 2--Overview of PHMSA's IBR Usage and Its Impact on
Safety and Costs.
     Panel 3--Facilitated Discussion Among Participants.
    Please note that there are objectives for each panel and that they
are posted on the meeting Web site at http://phmsa.dot.gov.

    Issued in Washington, DC, on June 15, 2012.
Linda Daugherty,
Deputy Associate Administrator for Policy and Programs.
[FR Doc. 2012-15102 Filed 6-20-12; 8:45 am]
BILLING CODE 4910-60-P


[Federal Register Volume 76, Number 61 (Wednesday, March 30, 2011)]
[Notices]
[Pages 17718-17720]
[FR Doc No: 2011-7417]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29616; 812-13801]

Simple Alternatives, LLC and The RBB Fund, Inc.; Notice of
Application

Date: March 24, 2011.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from section 15(a) of
the Act and rule 18f-2 under the Act, as well as from certain
disclosure requirements.

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Summary of Application:  Applicants request an order that would permit
them to enter into and materially amend subadvisory agreements without
shareholder approval and would grant relief from certain disclosure
requirements.

Applicants:  Simple Alternatives, LLC (``Simple Alternatives'') and The
RBB Fund, Inc. (the ``Company'').

Filing Dates:  The application was filed on July 23, 2010, and amended
on December 22, 2010 and March 11, 2011.

Hearing or Notification of Hearing:  An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on April 18, 2011, and should be accompanied by proof of service
on the applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090. Applicants: c\o Gilbert H.
Davis, Esq., Sims Moss Kline & Davis LLP, Suite 1700, Three Ravinia
Drive, Atlanta, Georgia 30346.

FOR FURTHER INFORMATION CONTACT: Emerson S. Davis, Sr., Senior Counsel,
at<PHONE_NUMBER>, or Janet M. Grossnickle, Assistant Director, at
(202) 551-6821 (Division of Investment Management, Office of Investment
Company Regulation).

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

Applicants' Representations

    1. The Company, a Maryland corporation, is registered under the Act
as an open-end management investment company and offers eighteen
series, including the S1 Fund (``S1 Fund'').\1\ Simple Alternatives is
registered as an investment adviser under the Investment Advisers Act
of 1940 (``Advisers Act'') and serves as the investment adviser to the
S1 Fund. An Adviser will serve as the investment adviser to each Fund
pursuant to an investment advisory agreement (``Advisory Agreement'')
with the Fund. Each Advisory Agreement will be approved by the
Company's board of directors (``Board''), including a majority of the
directors who are not ``interested persons,'' as defined in section
2(a)(19) of the Act, of the Company or the Adviser (``Independent
Directors'') and by the initial shareholder of the Fund.
---------------------------------------------------------------------------

    \1\ Applicants also request relief with respect to existing and
future series of the Company and any other existing or future
registered open-end management investment company or series thereof
that: (a) Is advised by Simple Alternatives or any entity
controlling, controlled by or under common control with Simple
Alternatives (each, an ``Adviser''); (b) uses the manager of
managers structure described in the application (the ``Manager of
Managers Structure'') and (c) complies with the terms and conditions
of this application (together with the S1 Fund, the ``Funds'' and
each, individually, a ``Fund''). The only existing registered open-
end management investment company that currently intends to rely on
the requested order is named as an applicant. If the name of any
Fund contains the name of a Subadviser (as defined below), the name
of the Adviser that serves as the primary adviser to the Fund will
precede the name of the Subadviser.
---------------------------------------------------------------------------

    2. Under the terms of each Advisory Agreement, the Adviser will be
responsible for the overall management of the Fund's business affairs
and selecting the Funds' investments in accordance with its investment
objectives, policies and restrictions. For the investment management
services that it provides to the Fund, the Adviser will receive the fee
specified in the Advisory Agreement. The Advisory Agreement also
permits the Adviser to retain one or more subadvisers, at its own cost
and expense, for the purpose of managing the investments of the Funds.
Pursuant to this authority, the Adviser will enter into investment
subadvisory agreements (``Subadvisory Agreements'') with certain
unaffiliated subadvisers (each, a ``Subadviser'') to provide investment
advisory services to the Funds. Simple Alternatives currently employs
eight Subadvisers for the S1 Fund. Each Subadviser is and each future
Subadviser will be registered as an investment adviser under the
Advisers Act. The Adviser will supervise, evaluate and allocate assets
to the Subadvisers, and make recommendations to the Board about their
hiring, retention or termination, at all times subject to the authority
of the Board.
    3. Applicants request an order to permit the Adviser, subject to
Board approval, to enter into and materially amend Subadvisory
Agreements without obtaining shareholder approval. The requested relief
will not extend to any subadviser that is an affiliated person, as
defined in section 2(a)(3) of the Act, of the Company, a Fund or the
Adviser, other than by reason of serving as a subadviser to the Fund
(``Affiliated Subadviser'').

    4. Applicants also request an exemption from the various disclosure
provisions described below that may require the Funds to disclose fees
paid by the Adviser to the Subadvisers. An exemption is requested to
permit the each Fund to disclose (as both a dollar amount and as a
percentage of the respective Fund's net assets): (a) The aggregate fees
paid to the Adviser and any Affiliated Subadvisers; and (b) the
aggregate fees paid to Subadvisers (collectively, ``Aggregate Fee
Disclosure''). Any Fund that employs an Affiliated Subadviser also will
provide separate disclosure of any fees paid to any Affiliated
Subadviser.

Applicants' Legal Analysis

    1. Section 15(a) of the Act provides, in relevant part, that it is
unlawful for any person to act as an investment adviser to a registered
investment company except pursuant to a written contract that has been
approved by the vote of a majority of the company's outstanding voting
securities. Rule 18f-2 under the Act provides that each series or class
of stock in a series investment company affected by a matter must
approve that matter if the Act requires shareholder approval.
    2. Form N-1A is the registration statement used by open-end
investment companies. Item 19(a)(3) of Form N-1A requires disclosure of
the method and amount of the investment adviser's compensation.
    3. Rule 20a-1 under the Act requires proxies solicited with respect
to an investment company to comply with Schedule 14A under the
Securities Exchange Act of 1934 (``1934 Act''). Items 22(c)(1)(ii),
22(c)(1)(iii), 22(c)(8) and 22(c)(9) of Schedule 14A, taken together,
require a proxy statement for a shareholder meeting at which the
advisory contract will be voted upon to include the ``rate of
compensation of the investment adviser,'' the ``aggregate amount of the
investment adviser's fees,'' a description of the ``terms of the
contract to be acted upon,'' and, if a change in the advisory fee is
proposed, the existing and proposed fees and the difference between the
two fees.
    4. Regulation S-X sets forth the requirements for financial
statements required to be included as part of investment company
registration statements and shareholder reports filed with the
Commission. Sections 6-07(2)(a), (b) and (c) of Regulation S-X require
that investment companies include in their financial statements
information about investment advisory fees.
    5. Section 6(c) of the Act provides that the Commission may exempt
any person, security, or transaction or any class or classes of
persons, securities, or transactions from any provisions of the Act, or
from any rule thereunder, if such exemption is necessary or appropriate
in the public interest and consistent with the protection of investors
and the purposes fairly intended by the policy and provisions of the
Act. Applicants state that the requested relief meets this standard for
the reasons discussed below.
    6. Applicants assert that the shareholders are relying on the
Adviser's expertise to select one or more Subadvisers best suited to
achieve a Fund's investment objectives. Applicants assert that, from
the perspective of the shareholder, the role of the Subadvisers is
substantially equivalent to that of the individual portfolio managers
employed by traditional advisory firms. Applicants state that requiring
shareholder approval of each Subadvisory Agreement would subject a Fund
to expenses and delays and may preclude the Adviser from acting
promptly. Applicants note that the Advisory Agreement and any
subadvisory agreement with an Affiliated Subadviser will remain subject
to section 15(a) of the Act and rule 18f-2 under the Act.
    7. Applicants assert that Subadvisers use a ``posted'' rate
schedule to set their fees. Applicants state that, while Subadvisers
are willing to negotiate fees lower than those posted in the schedule,
they are reluctant to do so where the fees are disclosed to the public
and other Subadvisers. Applicants submit that the requested relief will
allow the Adviser to negotiate more effectively with Subadvisers.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will
be subject to the following conditions:
    1. Before a Fund may rely on the requested order, the operation of
the Fund in the manner described in the application will be approved by
a majority of the Fund's outstanding voting securities, as defined in
the Act, or in the case of a Fund whose public shareholders purchase
shares on the basis of a prospectus containing the disclosure
contemplated by condition 2 below, by the initial shareholder(s) before
offering shares of that Fund to the public.
    2. Each Fund relying on the requested order will disclose in its
prospectus the existence, substance, and effect of any order granted
pursuant to this application. Each Fund will hold itself out to the
public as utilizing the Manager of Managers Structure. The prospectus
will prominently disclose that the Adviser has ultimate responsibility
(subject to oversight by the Board) to oversee the Subadvisers and
recommend their hiring, termination, and replacement.
    3. Within 90 days of the hiring of a new Subadviser, Fund
shareholders will be furnished all information about the new Subadviser
that would be included in a proxy statement, except as modified to
permit Aggregate Fee Disclosure. This information will include
Aggregate Fee Disclosure and any change in disclosure caused by the
addition of the new Subadviser. To meet this obligation, each Fund will
provide shareholders, within 90 days of the hiring of a new Subadviser,
an information statement meeting the requirements of Regulation 14C,
Schedule 14C and Item 22 of Schedule 14A under the 1934 Act, except as
modified by the order to permit Aggregate Fee Disclosure.
    4. An Adviser will not enter into a Subadvisory Agreement with any
Affiliated Subadviser without such agreement, including the
compensation to be paid thereunder, being approved by the shareholders
of the applicable Fund.
    5. At all times, at least a majority of the Board will be
Independent Directors, and the nomination of new or additional
Independent Directors will be placed within the discretion of the then-
existing Independent Directors.
    6. Whenever a subadviser change is proposed for a Fund with an
Affiliated Subadviser, the Board, including a majority of the
Independent Directors, will make a separate finding, reflected in the
applicable Board minutes, that such change is in the best interests of
the Fund and its shareholders, and does not involve a conflict of
interest from which the Adviser or the Affiliated Subadviser derives an
inappropriate advantage.
    7. Independent legal counsel, as defined in rule 0-1(a)(6) under
the Act, will be engaged to represent the Independent Directors. The
selection of such counsel will be within the discretion of the then-
existing Independent Directors.
    8. Each Adviser will provide the Board, no less frequently than
quarterly, with information about the profitability of the Adviser on a
per-Fund basis. The information will reflect the impact on
profitability of the hiring or termination of any Subadviser during the
applicable quarter.
    9. Whenever a Subadviser is hired or terminated, the Adviser will
provide the Board with information showing the expected impact on the
profitability of the Adviser.

    10. An Adviser will provide general management services to each
Fund, including overall supervisory responsibility for the general
management and investment of each Fund's assets and, subject to review
and approval of the Board, will: (a) Set each Fund's overall investment
strategies; (b) evaluate, select and recommend Subadvisers to manage
all or a part of each Fund's assets; (c) allocate and, when
appropriate, reallocate each Fund's assets among one or more
Subadvisers; (d) monitor and evaluate the performance of Subadvisers;
and (e) implement procedures reasonably designed to ensure that the
Subadvisers comply with each Fund's investment objective, policies and
restrictions.
    11. No Director or officer of the Company or a Fund, or director,
manager, or officer of an Adviser, will own directly or indirectly
(other than through a pooled investment vehicle that is not controlled
by such person), any interest in a Subadviser, except for (a) ownership
of interests in the Adviser or any entity that controls, is controlled
by, or is under common control with the Adviser or (b) ownership of
less than 1% of the outstanding securities of any class of equity or
debt of any publicly traded company that is either a Subadviser or an
entity that controls, is controlled by, or is under common control with
a Subadviser.
    12. Each Fund will disclose in its registration statement the
Aggregate Fee Disclosure.
    13. In the event the Commission adopts a rule under the Act
providing substantially similar relief to that in the order requested
in the application, the requested order will expire on the effective
date of that rule.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-7417 Filed 3-29-11; 8:45 am]
BILLING CODE 8011-01-P