[Federal Register Volume 86, Number 199 (Tuesday, October 19, 2021)]
[Notices]
[Pages 57879-57882]
[FR Doc No: 2021-22684]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93298; File No. SR-PEARL-2021-44]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX
Pearl Options Fee Schedule

October 13, 2021.
    Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on September 30, 2021, MIAX PEARL, LLC (``MIAX
Pearl'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') a proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange is filing a proposal to amend the MIAX Pearl Options
Fee Schedule (the ``Fee Schedule'').
    The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/pearl at MIAX
Pearl's principal office, and at the Commission's Public Reference
Room.

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

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

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

1. Purpose
    The Exchange proposes to amend the Add/Remove Tiered Rebates/Fees
set forth in Section 1)a) of the Fee Schedule

that apply to the Priority Customer \3\ Origin, to reduce the Maker
rebate in Tier 2 (defined below) for options transactions in Penny
Classes (defined below) from ($0.40) to ($0.25).
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    \3\ ``Priority Customer'' means a person or entity that (i) is
not a broker or dealer in securities, and (ii) does not place more
than 390 orders in listed options per day on average during a
calendar month for its own beneficial accounts(s). The number of
orders shall be counted in accordance with Interpretation and Policy
.01 of Exchange Rule 100. See Exchange Rule 100, including
Interpretation and Policy .01. See the Definitions Section of the
Fee Schedule.
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Background
    The Exchange currently assesses transaction rebates and fees to all
market participants which are based upon the total monthly volume
executed by the Member \4\ on MIAX Pearl in the relevant, respective
origin type (not including Excluded Contracts) \5\ (as the numerator)
expressed as a percentage of (divided by) TCV \6\ (as the denominator).
In addition, the per contract transaction rebates and fees are applied
retroactively to all eligible volume for that origin type once the
respective threshold tier (``Tier'') has been reached by the Member.
The Exchange aggregates the volume of Members and their Affiliates.\7\
Members that place resting liquidity, i.e., orders resting on the book
of the MIAX Pearl System,\8\ are paid the specified ``maker'' rebate
(each a ``Maker''), and Members that execute against resting liquidity
are assessed the specified ``taker'' fee (each a ``Taker''). For
opening transactions and ABBO \9\ uncrossing transactions, per contract
transaction rebates and fees are waived for all market participants.
Finally, Members are assessed lower transaction fees and receive lower
rebates for order executions in standard option classes in the Penny
Interval Program \10\ (``Penny Classes'') than for order executions in
standard option classes which are not in the Penny Interval Program
(``Non-Penny Classes''), where Members are assessed higher transaction
fees and receive higher rebates.
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    \4\ ``Member'' means an individual or organization that is
registered with the Exchange pursuant to Chapter II of the Exchange
Rules for purposes of trading on the Exchange as an ``Electronic
Exchange Member'' or ``Market Maker.'' Members are deemed
``members'' under the Exchange Act. See the Definitions Section of
the Fee Schedule and Exchange Rule 100.
    \5\ ``Excluded Contracts'' means any contracts routed to an away
market for execution. See the Definitions Section of the Fee
Schedule.
    \6\ ``TCV'' means total consolidated volume calculated as the
total national volume in those classes listed on MIAX Pearl for the
month for which the fees apply, excluding consolidated volume
executed during the period time in which the Exchange experiences an
``Exchange System Disruption'' (solely in the option classes of the
affected Matching Engine (as defined below)). The term Exchange
System Disruption, which is defined in the Definitions section of
the Fee Schedule, means an outage of a Matching Engine or collective
Matching Engines for a period of two consecutive hours or more,
during trading hours. The term Matching Engine, which is also
defined in the Definitions section of the Fee Schedule, is a part of
the MIAX Pearl electronic system that processes options orders and
trades on a symbol-by-symbol basis. Some Matching Engines will
process option classes with multiple root symbols, and other
Matching Engines may be dedicated to one single option root symbol
(for example, options on SPY may be processed by one single Matching
Engine that is dedicated only to SPY). A particular root symbol may
only be assigned to a single designated Matching Engine. A
particular root symbol may not be assigned to multiple Matching
Engines. The Exchange believes that it is reasonable and appropriate
to select two consecutive hours as the amount of time necessary to
constitute an Exchange System Disruption, as two hours equates to
approximately 1.4% of available trading time per month. The Exchange
notes that the term ``Exchange System Disruption'' and its meaning
have no applicability outside of the Fee Schedule, as it is used
solely for purposes of calculating volume for the threshold tiers in
the Fee Schedule. See the Definitions Section of the Fee Schedule.
    \7\ ``Affiliate'' means (i) an affiliate of a Member of at least
75% common ownership between the firms as reflected on each firm's
Form BD, Schedule A, or (ii) the Appointed Market Maker of an
Appointed EEM (or, conversely, the Appointed EEM of an Appointed
Market Maker). An ``Appointed Market Maker'' is a MIAX Pearl Market
Maker (who does not otherwise have a corporate affiliation based
upon common ownership with an EEM) that has been appointed by an EEM
and an ``Appointed EEM'' is an EEM (who does not otherwise have a
corporate affiliation based upon common ownership with a MIAX Pearl
Market Maker) that has been appointed by a MIAX Pearl Market Maker,
pursuant to the process described in the Fee Schedule. See the
Definitions Section of the Fee Schedule.
    \8\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
    \9\ ``ABBO'' means the best bid(s) or offer(s) disseminated by
other Eligible Exchanges (defined in Exchange Rule 1400(g) and
calculated by the Exchange based on market information received by
the Exchange from OPRA. See the Definitions Section of the Fee
Schedule and Exchange Rule 100.
    \10\ See Securities Exchange Act Release No. 88992 (June 2,
2020), 85 FR 35142 (June 8, 2020) (SR-PEARL-2020-06).
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Proposal
    The Exchange proposes to amend the Maker rebate in Tier 2 for
options transactions in Penny Classes for the Priority Customer Origin.
Currently, the Exchange offers a Maker rebate of ($0.40) in Tier 2 for
options transactions in Penny Classes for the Priority Customer Origin.
The Exchange now proposes to decrease the Maker rebate in Tier 2 for
options transactions in Penny Classes for the Priority Customer Origin
from ($0.40) to ($0.25).
    The purpose of this proposed change is for business and competitive
reasons. In order to attract order flow to the Exchange, the Exchange
initially set its Maker rebates and Takes fees so that they were
meaningfully higher/lower than other option exchanges that operate
comparable maker/taker price models. The Exchange believes that it is
appropriate to further adjust the specified Marker rebate so that it is
more in line with other exchanges,\11\ but will still remain
competitive such that it should enable the Exchange to continue to
attract order flow and maintain market share.
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    \11\ The Exchange notes that NYSE Arca Options provides a rebate
of $0.27 for similar transactions. See NYSE Arca Options Fee
Schedule for 9-1-21, CUSTOMER PENNY POSTING CREDIT TIERS at https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf. The Exchange also notes that the
Nasdaq Options Market provides a rebate of $0.25 for similar
transactions. See The Nasdaq Stock Market Fee Schedule, Options 7,
Section 2, Rebates to Add Liquidity in Penny Symbols, at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules/Nasdaq%20Options%207.
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    The Exchange has designated this change to be operative on October
1, 2021.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \12\ in general, and
furthers the objectives of Section 6(b)(4) of the Act,\13\ in that it
is an equitable allocation of reasonable dues, fees and other charges
among Exchange Members and issuers and other persons using its
facilities, and 6(b)(5) of the Act,\14\ in that it is designed to
prevent fraudulent and manipulative acts and practices, promote just
and equitable principles of trade, foster cooperation and coordination
with persons engaged in facilitating transactions in securities, remove
impediments to and perfect the mechanisms of a free and open market and
a national market system and, in general, protect investors and the
public interest.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4).
    \14\ 15 U.S.C. 78f(b)(1) and (b)(5).
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    The Exchange believes that its proposal provides for the equitable
allocation of reasonable dues and fees and is not unfairly
discriminatory for the following reasons. The Exchange operates in a
highly competitive market. The Commission has repeatedly expressed its
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its

broader forms that are most important to investors and listed
companies.'' \15\ There are currently 16 registered options exchanges
competing for order flow. Based on publicly-available information, and
excluding index-based options, for the month of September 2021, no
single exchange has more than approximately 11-12% of the market share
of executed volume of multiply-listed equity and exchange-traded fund
(``ETF'') options trades as of September 20, 2021.\16\ Therefore, no
exchange possesses significant pricing power in the execution of
multiply-listed equity and ETF options order flow. More specifically,
as of September 20, 2021, the Exchange had a market share of
approximately 3.55% of executed volume of multiply-listed equity and
ETF options for the month of September 2021.\17\
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    \15\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496 (June 29, 2005).
    \16\ See MIAX's ``The Market at a Glance'', available at https://www.miaxoptions.com/ (last visited September 20, 2021).
    \17\ See id.
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    The Exchange believes that the ever-shifting market shares among
the exchanges from month to month demonstrates that market participants
can shift order flow, or discontinue or reduce use of certain
categories of products, in response to transaction and/or non-
transaction fee changes. For example, on February 28, 2019, the
Exchange filed with the Commission a proposal to increase Taker fees in
certain Tiers for options transactions in certain Penny classes for
Priority Customers and decrease Maker rebates in certain Tiers for
options transactions in Penny classes for Priority Customers (which fee
was to be effective March 1, 2019).\18\ The Exchange experienced a
decrease in total market share between the months of February and March
of 2019, after the fees were in effect. Accordingly, the Exchange
believes that the March 1, 2019 fee change may have contributed to the
decrease in the Exchange's market share and, as such, the Exchange
believes competitive forces constrain options exchange transaction fees
and market participants can shift order flow based on fee changes
instituted by the exchanges.
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    \18\ See Securities Exchange Act Release No. 85304 (March 13,
2019), 84 FR 10144 (March 19, 2019) (SR-PEARL-2019-07).
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    The Exchange believes its proposal to decrease the Maker rebate in
Tier 2 for options transactions in Penny Classes for Priority Customers
is reasonable, equitable and not unfairly discriminatory because all
similarly situated market participants in the same Origin type are
subject to the same tiered Maker rebates and Taker fees and access to
the Exchange is offered on terms that are not unfairly discriminatory.
The Exchange believes it is equitable and not unfairly discriminatory
to reduce the Maker rebate to Priority Customer orders in Penny Classes
for business and competitive reasons because the Exchange initially set
its Maker rebates for such orders higher than certain other option
exchanges that operate comparable maker/taker pricing models. The
Exchange now believes that it is appropriate to further decrease the
specified Maker rebate so that it is more in line with other
exchanges,\19\ and will still remain competitive such that it should
enable the Exchange to continue to attract order flow and maintain
market share.
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    \19\ See supra note 11.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule changes will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
    The Exchange believes its proposal will not impose any burden on
intra-market competition because the Exchange believes that its
proposal will not place any category of Exchange market participant at
a competitive disadvantage. The Exchange believes that its proposal
will continue to encourage Priority Customer volume to be executed on
the Exchange, which will attract further liquidity to the Exchange and
benefit all market participants. Accordingly, the Exchange believes
that the proposed changes will continue to attract order flow to the
Exchange, thereby encouraging additional volume and liquidity to the
benefit of all market participants.
    The Exchange believes its proposal will not impose any burden on
inter-market competition because the Exchange notes that it operates in
a highly competitive market in which market participants can readily
favor competing venues if they deem fee levels at a particular venue to
be excessive, or rebate opportunities available at other venues to be
more favorable. In such an environment, the Exchange must continually
adjust its fees to remain competitive with other options exchanges.
Because competitors are free to modify their own fees in response, and
because market participants may readily adjust their order routing
practices, the Exchange believes that the degree to which fee changes
in this market may impose any burden on competition is extremely
limited. The Exchange believes that the proposed rule changes reflect
this competitive environment because they modify the Exchange's fees in
a manner that encourages market participants to continue to provide
liquidity and to send order flow to the Exchange.

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

    Written comments were neither solicited nor received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act,\20\ and Rule 19b-4(f)(2) \21\ thereunder.
At any time within 60 days of the filing of the proposed rule change,
the Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
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    \20\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \21\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-PEARL-2021-44 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-PEARL-2021-44. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will

post all comments on the Commission's internet website (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent
amendments, all written statements with respect to the proposed rule
change that are filed with the Commission, and all written
communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for website viewing and printing in the Commission's Public
Reference Room, 100 F Street NE, Washington, DC 20549, on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
the filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change. Persons submitting comments are cautioned that we do
not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
PEARL-2021-44, and should be submitted on or before November 9, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.''
[FR Doc. 2021-22684 Filed 10-18-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: November 30, 2009 (Volume 74, Number 228)]
[Rules and Regulations]
[Page 62503-62506]
[DOCID:fr30no09-14]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 190, 192, 195 and 198

[Docket No. PHMSA-2009-0265; Amdt Nos. 190-15; 192-111; 195-92, 198-5)]
RIN 2137-AE51

Pipeline Safety: Editorial Amendments to the Pipeline Safety
Regulations.

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

ACTION: Final rule.

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SUMMARY: This final rule corrects editorial errors, makes minor changes
in the regulatory text, reflects changes in governing laws, and
improves the clarity of certain provisions in the pipeline safety
regulations. This rule is intended to enhance the accuracy and reduce
misunderstandings of the specified regulations. The amendments
contained in this rule are non-substantive changes.

DATES: Effective date: The effective date of this final rule is January
29, 2010.

FOR FURTHER INFORMATION CONTACT: Dana Register at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Background

    PHMSA regularly reviews the Pipeline Safety Regulations (49 CFR
Parts 186-199) to identify typographical errors, outdated contact
information, or similar errors. In this final rule, we are correcting
typographical errors; incorrect CFR references and citations; and
clarifying certain regulatory requirements. Because these amendments do
not impose new requirements, notice and public comment procedures are
unnecessary.

II. Amendments Included in This Final Rule

    A. In 49 CFR 190.3, which contains definitions, we are now updating
the location of the Eastern Regional Office to reflect a recent
location change.
    1. In Sec.  190.3, under the definition of ``Regional Director'' we
are correcting the Eastern Regional Office location by replacing the
location ``Washington, DC'' with ``Trenton, NJ.''
    B. On October 17, 2008, PHMSA issued a final rule, under Docket No.
PHMSA-2005-23447, that amended the Pipeline Safety Regulations (49 CFR
Parts 186-199) to prescribe safety requirements for the operation of
certain gas transmission pipelines at pressures based on higher
operating stress levels. The rule allowed for an increase of maximum
allowable operating pressure (MAOP) over that previously allowed in the
regulations for pipelines that could meet certain criteria. On December
1, 2008, PHMSA stayed the effective date of this final rule until
December 22, 2008 (73 FR 72737).
    We are now correcting several editorial errors that we discovered
after this final rule was published. Specifically:
    2. In Sec.  192.112, we are correcting paragraph (c)(2)(i) by
replacing the phrase ``[the effective date of the final rule]'' with
``December 22, 2008.''
    3. In Sec.  192.112, we are correcting paragraph (e)(2) by
replacing the phrase ``November 17, 2008'' with ``December 22, 2008.''
    4. In Sec.  192.620, we are correcting the following paragraphs:
    (a) In paragraph (a)(1)(i), we are replacing the phrase ``November
17, 2008'' with ``December 22, 2008'';
    (b) In footnote 1 of paragraph (a)(2)(ii), we are replacing the
phrase ``November 17, 2008'' with ``December 22, 2008''
    (c) In paragraph (b)(3), we are adding a reference to Sec.
192.620(d)(3) to clarify the intent with respect to remotely operable
valves;
    (d) In paragraph (b)(7) we are replacing the phrase ``November 17,
2008'' with ``December 22, 2008'';
    (e) In paragraph (c)(4)(ii) we are replacing the phrase ``November
17, 2008'' with ``December 22, 2008'';
    (f) In paragraph (c)(6), we are clarifying that the construction
requirements only apply to construction that occurred after the
effective date of this rule, December 22, 2008;
    (g) In paragraph (d)(3)(i), we are correcting the reference from
``(d)(1)(i)'' to ``(d)(2)(i)'';
    (h) In paragraph (d)(5)(iv), we are clarifying the language to note
that sampling of accumulated liquids is required whenever cleaning pigs
are used and corrosion inhibitors are required if corrosive gas or
liquids are present;
    (i) In paragraph (d)(7)(iii), we are correcting the reference to
``paragraph (8)'' to ``(d)(9)'' and the reference from ``(6)(i)'' to
``(d)(7)(i)'';
    (j) In paragraph (d)(7)(iv)(C), we are correcting the reference
from ``(d)(8)'' and ``(d)(9)'' to ``(d)(9)'' and ``(d)(10)'';
    (k) In paragraph (d)(8)(ii), we are clarifying that a close
interval survey must be used to confirm restoration of cathodic
protection unless the problem is a rectifier connection or power input
remediation that can be verified by other means.
    (l) In the introductory text of (d)(9)(i), we are correcting the
reference from ``(d)(8)(iii)'' to ``(d)(9)(iii)'';
    (m) In paragraph (d)(9)(ii), we are correcting the reference from
``(d)(8)(iii)'' to ``(d)(9)(iii)'';
    (n) In paragraph (d)(10)(ii), we are correcting the reference from
``(d)(9)(i)'' to ``(d)(10)(i)'';
    (o) In paragraph (d)(10)(iii), we are correcting the reference from
``(d)(8)(iii)'' to ``(d)(9)(iii)'';
    (p) In paragraph (d)(11)(ii)(A), we are correcting the reference
from ``(d)(8)'' to ``(d)(9)'';
    (q) In the introductory text of (d)(11)(iii), we are correcting the
reference from ``(d)(10)(ii)'' to ``(d)(11)(ii)''; and
    (r) In paragraph (d)(11)(iv), we are correcting the reference from
``(d)(10)(ii) or (iii)'' to ``(d)(11)(ii) or (iii).''
    C. On December 24, 2008, PHMSA issued a final rule under Docket No.
PHMSA-2005-21305, that amended the pipeline safety regulations to allow
operators to design pipelines made from new Polyamide-11 (PA-11)
thermoplastic pipe using a higher design factor and to raise the design
pressure limit for such pipelines. PHMSA believes that the current
wording in 49 CFR 192.121 could be incorrectly interpreted to mean that
the 0.40 design factor is not limited only to PA-11 pipe. Therefore,
PHMSA has concluded that the formula should be clarified so that the
0.40 design factor only applies to PA-11. Therefore, we are making the
following clarification:

    ``= 0.40 for PA-11 pipe produced after January 23, 2009 with a
nominal pipe size (IPS or CTS) 4-inch or less, SDR-11 or greater (i.e.
thicker pipe wall).''

    D. In section 195.12, we are redesignating paragraph (d), entitled
Record Retention, as paragraph (e).
    E. The laws governing pipeline safety regulation provide the
authority for PHMSA to issue grants to states to carry out pipeline
safety programs under certification or agreement. The Pipeline
Inspection, Protection, Enforcement, and Safety Act of 2006 (Pub. L.
109-468) modified 49 U.S.C. 60107 to increase the maximum allowed
amount

for such grants from 50 percent to 80 percent of the costs incurred by
states for their safety programs. Accordingly, PHMSA is modifying 49
CFR 198.11, which implements this statutory mandate, to reflect the
increase in the allowed maximum amount for grants.

III. Regulatory Analyses and Notices

A. Statutory Authority for Rulemaking

    This final rule is published under the authority of 49 U.S.C. 60101
et seq. Specifically, 49 U.S.C. 60102(a) authorizes the Secretary of
Transportation to prescribe regulations related to pipeline safety.

B. Executive Order 12866 (Amended by E.O. 13258 and E.O. 13422) and DOT
Regulatory Policies and Procedures

    This final rule is not a significant action under section 3(f) of
Executive Order 12866 and therefore was not reviewed by the Office of
Management and Budget. This final rule is also not a significant action
under the Regulatory Policies and Procedures of the Department of
Transportation (44 FR 11034).

C. Executive Order 13132, Federalism (64 FR 43255, Aug. 10, 1999)

    PHMSA has analyzed the rulemaking according to the principles and
criteria of Executive Order 13132. The final rule makes editorial
corrections and therefore will not have a substantial direct effect on
the States, the relationship between the national government and the
States, or the distribution of power and responsibilities among the
various levels of government. The rule does not impose substantial
direct compliance costs on State or local governments and therefore,
the consultation and funding requirements of Executive Order 13132 do
not apply.

D. Executive Order 13175

    This final rule has been analyzed in accordance with the principles
and criteria contained in Executive order 13175 (``Consultation and
Coordination with Indian Tribal Governments''). Because this final rule
will not have tribal implications, does not impose substantial direct
compliance costs on Indian tribal governments, and does not preempt
tribal law, the funding and consultation requirements of Executive
Order 13175 do not apply. A tribal summary impact statement is not
required.

E. Regulatory Flexibility Act, Executive Order 13272, and DOT
Procedures and Policies

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.)
requires an agency to review regulations to assess their impact on
small entities unless the agency determines that a rule is not expected
to have a significant impact on a substantial number of small entities.
This final rule will not impose increased compliance costs on the
regulated industry. The revisions and corrections we are making to the
October 17, 2008, and December 24, 2008, final rules (Docket Nos.
PHMSA-2005-23447 and PHMSA-2005-21305) are clerical and do not impose
an additional impact on any small business. The changes we are making
to Part 198 affect grant amounts awarded to states. Thus, DOT has
determined that this final rule will not have a significant impact on a
substantial number of small entities. Therefore, I certify under
section 605 of the Regulatory Flexibility Act that this rule will not
have a significant economic impact on a substantial number of small
entities.
    This final rule has been developed in accordance with Executive
Order 13272 (``Proper Consideration of Small Entities in Agency
Rulemaking'') and DOT's procedures and policies to ensure that the
potential impacts of rulemakings on small entities are properly
considered.

F. Unfunded Mandates Reform Act of 1995

    This rule does not impose unfunded mandates under the Unfunded
Mandates Reform Act of 1995 (2 U.S.C. Ch. 25). It does not result in
costs of $132 million or more in any one year to either State, local,
or tribal governments, in the aggregate, or to the private sector, and
is the least burdensome alternative that achieves the objective of the
rulemaking.

G. Paperwork Reduction Act

    This final rule imposes no new information collection and
recordkeeping requirements and therefore the Paperwork Reduction Act
(44 U.S.C. 3501 et seq.) does not apply.

H. Executive Order 13211

    This rulemaking is not a ``significant energy action'' under
Executive Order 13211 since it is not a ``significant regulatory
action'' under Executive Order 12866, and it is not likely to have a
significant adverse effect on the supply, distribution, or use of
energy.

I. Regulation Identifier Number (RIN)

    A regulation identifier number (RIN) is assigned to each regulatory
action listed in the Unified Agenda of Federal Regulations. The
Regulatory Information Service Center publishes the Unified Agenda in
April and October of each year. The RIN number contained in the heading
of this document can be used to cross-reference this action with the
Unified Agenda.

J. Privacy Act

    Anyone is able to search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit
http://www.regulations.gov.

K. The National Environmental Policy Act

    The National Environmental Policy Act (42 U.S.C. Ch. 55) requires
that Federal agencies analyze proposed actions to determine whether the
action will have a significant impact on the human environment. PHMSA
has analyzed the effects of this final rule. Since this rule makes
editorial corrections and does not impose substantive changes, PHMSA
has determined that there are no environmental impacts associated with
this final rule.

List of Subjects

49 CFR Part 190

    Administrative practices and procedures, Definitions, Penalties.

49 CFR Part 192

    Design pressure, Incorporation by reference, Maximum allowable
operating pressure, and Pipeline safety.

49 CFR Part 195

    Anhydrous ammonia, Carbon dioxide, Incorporation by reference,
Petroleum, Pipeline safety, Reporting and recordkeeping requirements.

49 CFR Part 198

    Grant programs, Formula, Pipeline safety.

0
In consideration of the foregoing, PHMSA amends 49 CFR parts 190, 192,
195 and 198 as follows:

PART 190--PIPELINE SAFETY PROGRAMS AND RULEMAKING PROCEDURES

0
1. The authority citation for part 190 continues to read as follows:

    Authority:  33 U.S.C. 1321; 49 U.S.C. 5101-5127, 60101 et seq.;
49 CFR 1.53.

0
2. In Sec.  190.3, the definition of ``Regional Director'' is revised
to read as follows:

Sec.  190.3  Definitions.

* * * * *
    Regional Director means the head of any one of the Regional Offices
of the Office of Pipeline Safety, or a designee appointed by the
Regional Director. Regional Offices are located in Trenton, NJ (Eastern
Region); Atlanta, Georgia (Southern Region); Kansas City, Missouri
(Central Region); Houston, Texas (Southwest Region); and Lakewood,
Colorado (Western Region).
* * * * *

PART 192--TRANSPORTATION OF NATURAL AND OTHER GAS BY PIPELINE:
MINIMUM FEDERAL SAFETY STANDARDS

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3. The authority citation for part 192 is revised to read as follows:

    Authority:  49 U.S.C. 5103, 60102, 60104, 60108, 60109, 60110,
60113, 60116, 60118; and 60137; and 49 CFR 1.53.

0
4. In Sec.  192.112, paragraphs (c)(2)(i) and (e)(2) are revised to
read as follows:

Sec.  192.112  Additional design requirements for steel pipe using
alternative maximum allowable operating pressure.

    (c) * * *
    (2) * * *
    (i) An ultrasonic test of the ends and at least 35 percent of the
surface of the plate/coil or pipe to identify imperfections that impair
serviceability such as laminations, cracks, and inclusions. At least 95
percent of the lengths of pipe manufactured must be tested. For all
pipelines designed after December 22, 2008, the test must be done in
accordance with ASTM A578/A578M Level B, or API 5L Paragraph 7.8.10
(incorporated by reference, see Sec.  192.7) or equivalent method, and
either
* * * * *
    (e) * * *
    (2) Pipe in operation prior to December 22, 2008, must have been
hydrostatically tested at the mill at a test pressure corresponding to
a hoop stress of 90 percent SMYS for 10 seconds.
* * * * *
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5. Section 192.121 is revised to read as follows:

Sec.  192.121  Design of plastic pipe.

    Subject to the limitations of Sec.  192.123, the design pressure
for plastic pipe is determined by either of the following formulas:
[GRAPHIC] [TIFF OMITTED] TR30NO09.008

Where:

P = Design pressure, gauge, psig (kPa).
S = For thermoplastic pipe, the HDB is determined in accordance with
the listed specification at a temperature equal to 73[deg] F
(23[deg] C), 100[deg] F (38[deg] C), 120[deg] F (49[deg] C), or
140[deg] F (60[deg] C). In the absence of an HDB established at the
specified temperature, the HDB of a higher temperature may be used
in determining a design pressure rating at the specified temperature
by arithmetic interpolation using the procedure in Part D.2 of PPI
TR-3/2004, HDB/PDB/SDB/MRS Policies (incorporated by reference, see
Sec.  192.7). For reinforced thermosetting plastic pipe, 11,000 psig
(75,842 kPa). [Note: Arithmetic interpolation is not allowed for PA-
11 pipe.]

t = Specified wall thickness, inches (mm).
D = Specified outside diameter, inches (mm).
SDR = Standard dimension ratio, the ratio of the average specified
outside diameter to the minimum specified wall thickness,
corresponding to a value from a common numbering system that was
derived from the American National Standards Institute preferred
number series 10.
D F = 0.32 or
= 0.40 for PA-11 pipe produced after January 23, 2009 with a nominal
pipe size (IPS or CTS) 4-inch or less, and a SDR of 11 or greater
(i.e. thicker pipe wall).

0
6. In Sec.  192.620, paragraphs (a)(1)(i), (a)(2)(ii), (b)(3), (b)(7),
(c)(4)(ii), (c)(6), (d)(3)(i), (d)(5)(iv), (d)(7)(iii), (d)(7)(iv)(C),
(d)(8)(ii), the introductory text of (d)(9)(i), (d)(9)(ii),
(d)(10)(ii), (d)(10)(iii), (d)(11)(ii)(A), the introductory text of
(d)(11)(iii), and (d)(11)(iv), are revised to read as follows:

Sec.  192.620  Alternative maximum allowable operating pressure for
certain steel pipelines.

    (a) * * *
    (1) * * *
    (i) For facilities installed prior to December 22, 2008, for which
Sec.  192.111(b), (c), or (d) applies, use the following design factors
as alternatives for the factors specified in those paragraphs: Sec.
192.111(b)-0.67 or less; 192.111(c) and (d)-0.56 or less.
* * * * *
    (2) * * *
    (ii) The pressure obtained by dividing the pressure to which the
pipeline segment was tested after construction by a factor determined
in the following table:

------------------------------------------------------------------------
                                                            Alternative
                     Class location                         test factor
------------------------------------------------------------------------
1.......................................................            1.25
2.......................................................        \1\ 1.50
3.......................................................            1.50
------------------------------------------------------------------------
\1\ For Class 2 alternative maximum allowable operating pressure
  segments installed prior to December 22, 2008 the alternative test
  factor is 1.25.

    (b) * * *
    (3) A supervisory control and data acquisition system provides
remote monitoring and control of the pipeline segment. The control
provided must include monitoring of pressures and flows, monitoring
compressor start-ups and shut-downs, and remote closure of valves per
paragraph (d)(3) of this section;
* * * * *
    (7) At least 95 percent of girth welds on a segment that was
constructed prior to December 22, 2008, must have been non-
destructively examined in accordance with Sec.  192.243(b) and (c).
* * * * *
    (c) * * *
    (4) * * *
    (ii) For a pipeline segment in existence prior to December 22,
2008, certify, under paragraph (c)(2) of this section, that the
strength test performed under Sec.  192.505 was conducted at test
pressure calculated under paragraph (a) of this section, or conduct a
new strength test in accordance with paragraph (c)(4)(i) of this
section.
* * * * *
    (6) If the performance of a construction task associated with
implementing alternative MAOP that occurs after December 22, 2008, can
affect the integrity of the pipeline segment, treat that task as a
``covered task'', notwithstanding the definition in Sec.  192.801(b)
and implement the requirements of subpart N as appropriate.
* * * * *
    (d) * * *
    (3) * * *
    (i) Ensure that the identification of high consequence areas
reflects the larger potential impact circle recalculated under
paragraph (d)(2)(i) of this section.
* * * * *
    (5) * * *
* * * * *
    (iv) Use cleaning pigs and sample accumulated liquids. Use
inhibitors

when corrosive gas or liquids are present.
* * * * *
    (7)
    (iii) Within six months after completing the baseline internal
inspection required under paragraph (d)(9) of this section, integrate
the results of the indirect assessment required under paragraph
(d)(7)(i) of this section with the results of the baseline internal
inspection and take any needed remedial actions.
    (iv) * * *
* * * * *
    (C) Integrate the results with those of the baseline and periodic
assessments for integrity done under paragraphs (d)(9) and (d)(10) of
this section.
    (8) * * *
* * * * *
    (ii) After remedial action to address a failed reading, confirm
restoration of adequate corrosion control by a close interval survey on
either side of the affected test station to the next test station
unless the reason for the failed reading is determined to be a
rectifier connection or power input problem that can be remediated and
otherwise verified.
* * * * *
    (9) * * *
    (i) Except as provided in paragraph (d)(9)(iii) of this section,
for a new pipeline segment operating at the new alternative maximum
allowable operating pressure, perform a baseline internal inspection of
the entire pipeline segment as follows:
* * * * *
    (ii) Except as provided in paragraph (d)(9)(iii) of this section,
for an existing pipeline segment, perform a baseline internal
assessment using a geometry tool and a high resolution magnetic flux
tool before, but within two years prior to, raising pressure to the
alternative maximum allowable operating pressure as allowed under this
section.
* * * * *
    (10) * * *
* * * * *
    (ii) Conduct periodic internal inspections using a high resolution
magnetic flux tool on the frequency determined under paragraph
(d)(10)(i) of this section, or
    (iii) Use direct assessment (per Sec.  192.925, Sec.  192.927 and/
or Sec.  192.929) or pressure testing (per subpart J of this part) for
periodic assessment of a portion of a segment to the extent permitted
for a baseline assessment under paragraph (d)(9)(iii) of this section.
    (11) * * *
* * * * *
    (ii) * * *
    (A) The defect is a dent discovered during the baseline assessment
for integrity under paragraph (d)(9) of this section and the defect
meets the criteria for immediate repair in Sec.  192.309(b).
* * * * *
    (iii) If paragraph (d)(11)(ii) of this section does not require
immediate repair, repair a defect within one year if any of the
following apply:
* * * * *
    (iv) Evaluate any defect not required to be repaired under
paragraph (d)(11)(ii) or (iii) of this section to determine its growth
rate, set the maximum interval for repair or re-inspection, and repair
or re-inspect within that interval.

PART 195--TRANSPORTATION OF HAZARDOUS LIQUIDS BY PIPELINE

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7. The authority citation for part 195 is amended to read as follows:

    Authority:  49 U.S.C. 5103, 60102, 60104, 60108, 60109, 60116,
60118, and 60137; and 49 CFR 1.53.

Sec.  195.12  [Amended]

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8. In section 195.12, the second paragraph designated as paragraph (d),
``Record Retention'' is redesignated as paragraph (e).

PART 198--REGULATIONS FOR GRANTS TO AID STATE PIPELINE SAFETY
PROGRAMS

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9. The authority citation for Part 198 continues to read as follows:

    Authority:  49 U.S.C. 60105, 60106, 60107, 60114, and 49 CFR
1.53.

0
10. Section 198.11 is revised to read as follows:

Sec.  198.11  Grant Authority.

    The pipeline safety laws (49 U.S.C. 60101 et seq.) authorize the
Administrator to pay out funds appropriated or otherwise make available
up to 80 percent of the cost of the personnel, equipment, and
activities reasonably required for each state agency to carry out a
safety program for intrastate pipeline facilities under a certification
or agreement with the Administrator or to act as an agent of the
Administrator with respect to interstate pipeline facilities.

    Issued in Washington, DC on November 20, 2009 under authority
delegated in 49 CFR part 1.
Cynthia L. Quarterman,
Administrator.
[FR Doc. E9-28477 Filed 11-27-09; 8:45 am]

BILLING CODE 4910-60-P