[Federal Register Volume 85, Number 158 (Friday, August 14, 2020)]
[Proposed Rules]
[Pages 49611-49615]
[FR Doc No: 2020-17180]

=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 281

[EPA-R09-UST-2020-0258; FRL-10013-09-Region 9]

Hawaii: Proposed Authorization of Underground Storage Tank
Program Revisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

SUMMARY: Hawaii has applied to the Environmental Protection Agency
(EPA) for updated authorization of changes made to its underground
storage tank (UST) program under the Resource Conservation and Recovery
Act (RCRA), as amended, since the previous authorization of Hawaii's
UST program in September 2002. The EPA has reviewed Hawaii's
application and has

tentatively determined that these changes satisfy all requirements
needed to qualify for the requested updated authorization. Therefore,
we are proposing to authorize the State's changes. The EPA seeks public
comment prior to taking final action.

DATES: Comments must be received on or before September 14, 2020.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R09-
UST-2020-0258 at https://www.regulations.gov or via email to
<EMAIL_ADDRESS>For comments submitted at https://www.regulations.gov, follow the online instructions for submitting
comments. Once submitted, comments cannot be edited or removed from
https://www.regulations.gov. For either manner of submission, the 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. The 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 https://www.epa.gov/dockets/commenting-epa-dockets. Publicly available docket materials are
available at https://www.regulations.gov. We encourage electronic
submittals but if you are unable to submit electronically, need
assistance in a language other than English, are a person with
disabilities who needs a reasonable accommodation at no cost to you, or
need other assistance, please reach out to the person identified in the
FOR FURTHER INFORMATION CONTACT section.
    The federal www.regulations.gov website is an ``anonymous access''
system, which means EPA will not know your identity or contact
information unless you provide it in the body of your comment. If you
send an email comment directly to the EPA without going through
www.regulations.gov, your email address will be automatically captured
and included as part of the comment that is placed in the public docket
and made available on the internet. If you submit an electronic
comment, the EPA recommends that you include your name and other
contact information in the body of your comment and with any disk or
CD-ROM you submit. If the EPA cannot read your comment due to technical
difficulties and cannot contact you for clarification, the EPA may not
be able to consider your comment. Electronic files should avoid the use
of special characters, any form of encryption, and be free of any
defects or viruses.

FOR FURTHER INFORMATION CONTACT: Robert Pallarino, Project Officer,
Underground Storage Tank Program Office, LND-4-3, U.S. EPA Region 9, 75
Hawthorne Street, San Francisco, CA 94105<EMAIL_ADDRESS>(415)
947-4128.

SUPPLEMENTARY INFORMATION:

A. Why are State programs approved?

    Section 9004 of RCRA, 42 U.S.C. 6991c, authorizes the EPA to
approve State UST programs to operate in the State in lieu of the
federal UST program, subject to the authority retained by the EPA in
accordance with RCRA. Program approval may be granted by the EPA
pursuant to RCRA section 9004(b), if the EPA finds that the State
program: (1) Is ``no less stringent'' than the federal program for the
seven elements set forth at RCRA section 9004(a)(1) through (7); (2)
includes the notification requirements of RCRA section 9004(a)(8); and
(3) provides for adequate enforcement of compliance with UST standards
of RCRA section 9004(a). Note that RCRA sections 9005 (on information-
gathering) and 9006 (on federal enforcement) by their terms apply even
in states with programs approved by the EPA under RCRA section 9004.
Thus, the EPA retains its authority under RCRA sections 9005 and 9006,
42 U.S.C. 6991d and 6991e, and other applicable statutory and
regulatory provisions to undertake inspections and enforcement actions
in approved states. With respect to such an enforcement action, the EPA
will rely on federal sanctions, federal inspection authorities, and
federal procedures rather than the state authorized analogues to these
provisions.

B. Why are revisions to state programs necessary?

    States that have received final approval from the EPA under RCRA
section 9004(b) of RCRA, 42 U.S.C. 6991c(b), must maintain an UST
program that is equivalent to, consistent with, and no less stringent
than the Federal UST program. When the EPA makes revisions to the
regulations that govern the UST program, states must revise their
programs to comply with the updated regulations and submit these
revisions to the EPA for approval. Changes to state UST programs may be
necessary when Federal or State statutory or regulatory authority is
modified or when certain other changes occur. Most commonly, States
must change their programs because of changes to the EPA's regulations
in 40 Code of Federal Regulations (CFR) part 280. States can also
initiate changes on their own to their UST program and these changes
must then be approved by the EPA.

C. What decisions has the EPA made in this proposed rule?

    On October 8, 2018, in accordance with 40 CFR 281.51(a), Hawaii
submitted a complete program revision application seeking approval for
its UST program revisions corresponding to the EPA final rule published
on July 15, 2015 (80 FR 41566), which finalized revisions to the 1988
UST regulation and to the 1988 state program approval (SPA) regulation.
As required by 40 CFR 281.20, the State submitted the following: A
transmittal letter from the Governor requesting approval, a description
of the program and operating procedures, a demonstration of the State's
procedures to ensure adequate enforcement, a Memorandum of Agreement
outlining the roles and responsibilities of the EPA and the
implementing agency, a statement of certification from the Attorney
General, and copies of all relevant State statutes and regulations. The
EPA has reviewed the Hawaii application for updated UST Program
authorization and has tentatively determined that the revisions to
Hawaii's UST program are equivalent to, consistent with, and no less
stringent than the corresponding federal requirements in Subpart C of
40 CFR part 281, and that the Hawaii program provides for adequate
enforcement of compliance (40 CFR 281.11(b)). Therefore, the EPA is
proposing to grant Hawaii approval to operate its UST program with the
changes described in the program revision application as outlined
below.
    The EPA will consider all public comments on its proposed approval
received in writing during the public comment period. Issues raised by
those comments may be the basis for a decision to deny final approval
to Hawaii's request for updated authorization. The EPA will make a
final decision on whether to approve the subject changes to Hawaii's
program

after the close of the public comment period and will give notice of it
in the Federal Register. The document will include a summary of the
reasons for the final determination and a response to all major
comments.

D. What is the effect of this action?

    This action does not impose additional requirements on the
regulated community because the requirements that are the subject of
this proposed rule are already effective in the State of Hawaii, and
they are not changed by this action. This action merely proposes
approval of the existing State requirements as meeting the federal
requirements and would thereby render them federally enforceable.

E. What happens if the EPA receives comments that oppose this action?

    If the EPA receives comments on this proposed action, we will
address all such comments in a later final rule. You are unlikely to
have another opportunity to comment. If you want to comment on this
proposed authorization, you should do so at this time.

F. What has Hawaii previously been authorized for?

    Hawaii initially received final authorization on September 25,
2002, effective September 30, 2002 (67 FR 60161) to implement the UST
program. On September 17, 2008, the EPA codified the approved Hawaii
program that is subject to the EPA's inspection and enforcement
authorities under RCRA sections 9005 and 9006, 42 U.S.C. 6991d and
6991e, and other applicable statutory and regulatory provisions (73 FR
53742).

G. What changes are we proposing with today's action?

    In order to be approved, each state program application must meet
the general requirements in 40 CFR 281.11, and specific requirements in
40 CFR 281 Subpart B (Components of a Program Application); Subpart C
(Criteria for No Less Stringent); and Subpart D (Adequate Enforcement
of Compliance). This also is true for proposed revisions to approved
state programs.
    As more fully described below, the State has made the changes to
its approved UST program to reflect the 2015 Federal Revisions. The EPA
is proposing to approve the State's changes because they are equivalent
to, consistent with, and no less stringent than the federal UST program
and because the EPA has confirmed that the Hawaii UST program will
continue to provide for adequate enforcement of compliance, as required
by 40 CFR 281.11(b) and part 281, Subpart D.
    The Hawaii Department of Health (HDOH) is the lead implementing
agency for the UST program in Hawaii. The HDOH continues to have broad
statutory authority to regulate the installation, operation,
maintenance, and closure of USTs, as well as UST releases under Hawaii
Revised Statutes (HRS) 342L-1 through 342L-53. The Hawaii UST Program
gets its enforcement authority from the powers and duties of the HDOH
Director (Director) found in HRS 342L-8. Under HRS 342L-7 the Director
is authorized to require an owner to furnish records, conduct
monitoring or testing, and provide access to tanks. Under the powers
granted to the Director, the HDOH is authorized to issue installation
and operating permits (HRS342L-31). Permits must be renewed every five
years (HRS342L-4). Penalties for non-compliance with Hawaii's UST
statutes may be assessed under HRS342L-10. HRS342L-32.5 allows the HDOH
to place a delivery prohibition tag on a tank for failure to have, or
act in accordance with, a permit, spill and overfill prevention,
required tank and/or piping leak detection, corrosion protection, or
maintain financial responsibility.
    Specific authorities to regulate the installation, operation,
maintenance, and closure of USTs, as well as UST releases, are found
under Hawaii Administrative Rules (HAR), effective July 15, 2018,
section 11-280.1-1 through section 11-280.1-429 Underground Storage
Tanks. Reporting and recordkeeping authorities and requirements are
found under HRS section 342L-7, HRS section 342L-7.5, and HAR section
11.280.1-34. The EPA has tentatively determined that the aforementioned
statutory sections and regulations satisfy the requirements of 40 CFR
281.40 and 281.41.
    The State of Hawaii and the EPA have signed a Memorandum of
Agreement (MOA), which will be effective at the time the EPA publishes
its final decision to grant UST program approval to the changes to the
State's UST program. This MOA provides that the State will continue to
be the primary implementation agency for the UST Program in Hawaii and
will continue to allow the EPA to conduct oversight and reviews of the
State's efforts. The MOA also specifies how the EPA and the State will
continue to share information.
    The State's changes to its UST program do not affect the continued
compliance of the State's statutes and rules with the public
participation provisions contained in 40 CFR 281.42. HRS section 342L-
12.5 provides that any person may intervene in any civil action to
enforce the State's statutes and rules, if that person has an interest
that is, or may be, adversely affected.
    To qualify for approval, revisions to a state's program must be
``equivalent to, consistent with, and no less stringent'' than the
federal program, in this case, the 2015 Federal Revisions. In the 2015
Federal Revisions, EPA addressed UST systems deferred in the 1988 UST
regulations and added, among other things: New operation and
maintenance requirements; secondary containment requirements for new
and replaced tanks and piping; operator training requirements; and a
requirement to ensure UST system compatibility before storing certain
biofuel blends. In addition, the EPA removed past deferrals for
emergency generator tanks, field constructed tanks, and airport hydrant
systems. The EPA analyzes revisions to approved state programs pursuant
to the criteria found in 40 CFR 281.30 through 281.39.
    The HDOH has revised its regulations to help ensure that the
State's UST program revisions are equivalent to, consistent with, and
no less stringent than the 2015 Federal Revisions. The HDOH has
repealed its previous UST rules, chapter 11-281, Hawaii Administrative
Rules (HAR), and adopted a new chapter 11-280.1, HAR, effective July
15, 2018. The EPA has tentatively determined that the revised HAR
addresses all the requirements of 40 CFR 281.30-281.39 and are at least
as stringent, but in some cases more stringent or broader in scope,
than the federal UST regulations. Hawaii rules that are broader in
scope than the federal UST rules are discussed in more detail in
Section I.H. of this document.
    As part of the State Application, the Hawaii Attorney General
certified that the State revisions meet the requirements ``equivalent
to, consistent with, and no less stringent'' criteria in 40 CFR 281.30
through 281.39. The EPA is relying on this certification, the analysis
submitted by the State and our own review in making this decision to
propose approval of the State's updated authorization application.

H. Where are the State's revised rules different from the Federal
rules?

Broader in Scope Provisions

    Where an approved state program has a greater scope of coverage
than required by federal law, the additional coverage is not part of
the federally approved program and is not federally enforceable (40 CFR
281.12(a)(3)(ii)). The following paragraphs describe the

State rules that are considered broader in coverage than the federal
program, as these State-only regulations are not required by federal
regulation and are implemented by the State in addition to the
federally approved program.
    Hawaii's definitions of ``regulated substance'' at HRS section
342L-1 and section 11-280.1-12 are broader in scope than the federal
definitions of ``regulated substance.'' For the most part, the
definitions in the State and federal statutes and regulations are the
same except that the State includes in its definitions ``any other
substance designated by the department that, when released into the
environment, may present substantial danger to human health, welfare,
or the environment.'' These definitions are broader in scope to the
extent that Hawaii includes substances that are designated as regulated
substances by the HDOH, pursuant to subsection (3) of Hawaii's
definition of the term, which are neither (a) ``any substance defined
in section 101(14) of the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA) of 1980 (but not including any
substance regulated as a hazardous waste under subtitle C [of RCRA]''
or (b) ``[p]etroleum, including crude oil or any fraction thereof that
is liquid at standard conditions of temperature and pressure (60
degrees Fahrenheit and 14.7 pounds per square inch absolute).''
    HAR section 11-280.1-21 requires that all UST systems be upgraded
to secondary containment by a firm fixed date, July 15, 2028, except
for field constructed tanks and airport hydrant systems, which must be
provided with secondary containment by July 15, 2038. This aspect of
Hawaii's program is broader in scope than the federal program since the
federal UST program does not require all UST systems to be upgraded to
provide secondary containment, only newly (after the effective date of
the federal UST rule) installed or repaired tanks or piping.
    HAR section 11-280.1-23 and HAR section 11-280.1-42 require
hazardous substance USTs to use interstitial monitoring and be
secondarily contained with no exceptions. As long as the implementing
agency approves, the federal program allows hazardous substance USTs
installed prior to October 13, 2015 to use alternative release
detection methods if specific conditions are met. This aspect of
Hawaii's program, mandating the use of interstitial monitoring as the
only release detection method for all hazardous substance UST systems,
is broader in scope than the federal program to the extent it applies
to hazardous substance USTs installed prior to October 13, 2015, where
the specific conditions referenced in 40 CFR 280.42(e) of the federal
rules are met.
    HAR section 11-280.1-34(a) requires notifications to the HDOH when
changes are made to the UST system, which is broader in scope than the
federal requirements. Federal UST rules only require notification of
existing or newly installed UST systems or when UST systems are
switched to storing certain regulated substances.
    HAR section11-280.1-53(b)(2) and section 11-451-6(b)(4) establish a
``reportable quantity'' threshold for trichloropropane of 10 lbs. Since
the federal program does not require reporting of releases of
trichloropropane, this requirement of the State's program is broader in
scope than the federal program to this limited extent.
    HAR section 11-280.1-61.1 requires owners and operators to post
signs around the perimeter of a site where contamination poses an
immediate health risk or where contaminated media is exposed to the
surface, if the Department determines that the posting of such signs is
appropriate. This requirement is broader in scope than the federal UST
program, which does not include an analogous provision.
    HAR section 11-280.1-67 requires public notification in the event
of a confirmed release. This requirement is broader in scope than the
federal UST program, which only requires public notification when an
implementing agency requires a corrective action plan.
    HAR 11-280.1-300 through 11-280.1-335 require permits for the
installation and operation of USTs. Permits must be renewed regularly.
There is no federal requirement for USTs to be permitted either at
installation or during operation. This aspect of Hawaii's program is
broader in scope than the federal program since the federal UST program
does not include analogous permitting requirements.
    HRS 342L-14 allows the Director of the Department to establish fees
for department services. HAR 11-280.1-335 specifies the amounts for
various fees for permit and variance applications. This provision of
Hawaii's UST program is broader in scope because there are no federal
requirements which address the establishment of fees for services.
    Hawaii's UST program contains provisions that allow the State to
grant variances. The Hawaii Attorney General's Office has indicated
that such variances may be granted where State rules are broader in
scope than the federal regulations. To the extent that such variances
are granted, and the resulting requirements imposed pursuant to such
variances are broader in scope than the federal UST requirements, the
requirements imposed by such variances will not be federally
enforceable as part of the authorized State program. However, to the
extent that any variances are issued for aspects of the State's program
that result in the imposition of requirements which are merely more
stringent than the federal UST requirements, as opposed to broader in
scope, the resulting requirements of such variances will be federally
enforceable as part of the authorized State program. The following
provisions pertain to Hawaii's variance requirements: HRS section 342L-
1 (definition of ``variance''); HRS section 342L-5 (variance allowed);
HRS section 342L-6 (procedures for variances); HAR 11-280.1-12
(definition of ``variance''); HAR 11-280.1-332 (variance allowed); and
HAR 11-280.1-333 (variance applications).

II. Codification

A. What is codification, and will EPA codify Hawaii's UST program as
proposed in this rule?

    Codification is the process of placing citations and references to
the state's statutes and regulations that comprise the state's
authorized UST program into the Code of Federal Regulations. EPA does
this by adding those citations and references to the authorized state
rules in 40 CFR part 282. EPA is not proposing to codify the
authorization of Hawaii's changes at this time. However, EPA intends to
amend 40 CFR part 282, subpart B for any updated authorization of
Hawaii's program changes at a later date.

III. Statutory and Executive Order (E.O.) Reviews

    This action only applies to Hawaii's UST Program requirements
pursuant to RCRA Section 9004 and imposes no requirements other than
those imposed by state law. It complies with applicable EOs and
statutory provisions as follows:

A. Executive Order 12866 Regulatory Planning and Review, Executive
Order 13563: Improving Regulation and Regulatory Review

    The Office of Management and Budget (OMB) has exempted this action
from the requirements of Executive Order 12866 (58 FR 51735, Oct. 4,
1993) and 13563 (76 FR 3821, Jan. 21, 2011). This action proposes to
approve state requirements for the purpose of RCRA section 9004 and
imposes no additional requirements beyond those imposed by

state law. Therefore, this action is not subject to review by OMB.

B. Executive Order 13771: Reducing Regulations and Controlling
Regulatory Costs

    This action is not an Executive Order 13771 (82 FR 9339, February
3, 2017) regulatory action because actions such as this proposed
approval of Hawaii's revised underground storage tank program under
RCRA are exempted under Executive Order 12866. Accordingly, I certify
that this action will not have a significant economic impact on a
substantial number of small entities under the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.).

C. Unfunded Mandates Reform Act and Executive Order 13175: Consultation
and Coordination With Indian Tribal Governments

    Because this action proposes to approve and codify pre-existing
requirements under state law and does not impose any additional
enforceable duty beyond that required by state law, it does not contain
any unfunded mandate or significantly or uniquely affect small
governments, as described in the Unfunded Mandates Reform Act of 1995
(2 U.S.C. 1531-1538). For the same reason, and because there are no
federally recognized Tribes within the State, this proposed action also
does not significantly or uniquely affect the communities of tribal
governments, as specified by Executive Order 13175 (65 FR 67249,
November 9, 2000).

D. Executive Order 13132: Federalism

    This proposed action will not have substantial direct effects on
the states, on the relationship between the national government and the
states, or on the distribution of power and responsibilities among the
various levels of government, as specified in Executive Order 13132 (64
FR 43255, Aug. 10, 1999), because it merely proposes approval of state
requirements as part of the State RCRA Underground Storage Tank Program
without altering the relationship or the distribution of power and
responsibilities established by RCRA.

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

    This proposed action also is not subject to Executive Order 13045
(62 FR 19885, Apr. 23, 1997), because it is not economically
significant, and it does not make decisions based on environmental
health or safety risks.

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

    This proposed rule is not subject to Executive Order 13211 (66 FR
28355, May 22, 2001) because it is not a ``significant regulatory
action'' as defined under Executive Order 12866.

G. National Technology Transfer and Advancement Act

    Under RCRA section 9004(b), the EPA grants a state's application
for approval as long as the state meets the criteria required by RCRA.
It would thus be inconsistent with applicable law for the EPA, when it
reviews a state approval application, to require the use of any
particular voluntary consensus standard in place of another standard
that otherwise satisfies the requirements of RCRA. Thus, the
requirements of section 12(d) of the National Technology Transfer and
Advancement Act of 1995 (15 U.S.C. 272 note) do not apply.

H. Executive Order 12988: Civil Justice Reform

    As required by section 3 of Executive Order 12988 (61 FR 4729,
February 7, 1996), in issuing this proposed rule, the EPA has taken the
necessary steps to eliminate drafting errors and ambiguity, minimize
potential litigation, and provide a clear legal standard for affected
conduct.

I. Executive Order 12630: Governmental Actions and Interference With
Constitutionally Protected Property Rights

    The EPA has complied with Executive Order 12630 (53 FR 8859, Mar.
15, 1988) by examining the takings implications of the proposed rule in
accordance with the ``Attorney General's Supplemental Guidelines for
the Evaluation of Risk and Avoidance of Unanticipated Takings'' issued
under the executive order.

J. Paperwork Reduction Act

    This proposed rule would not impose an information collection
burden under the provisions of the Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.). ``Burden'' is defined at 5 CFR 1320.3(b).

K. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low Income Populations

    Executive Order 12898 (59 FR 7629, Feb. 16, 1994) establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States. Because this proposed rule would
approve pre-existing state rules which are at least equivalent to,
consistent with, and no less stringent than existing federal
requirements, and would impose no additional requirements beyond those
imposed by state law, and there would be no anticipated significant
adverse human health or environmental effects, the proposed rule is not
subject to Executive Order 12898.

L. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801-808, generally provides
that before a rule may take effect, the agency promulgating the rule
must submit a rule report, which includes a copy of the rule, to each
House of the Congress and to the Comptroller General of the United
States. The EPA seeks public comment prior to taking final action on
this proposal. The proposed rule will not become effective until the
EPA makes a final decision on whether or not to approve the subject
changes to Hawaii's program and gives notice of that final decision in
the Federal Register. At that time, the EPA will submit a report
containing the final decision document and other required information
to the U.S. Senate, the U.S. House of Representatives, and the
Comptroller General of the United States prior to publication in the
Federal Register. A major rule cannot take effect until 60 days after
it is published in the Federal Register. This action is not a ``major
rule'' as defined by 5 U.S.C. 804(2).

    Authority: This proposed rule is issued under the authority of
Sections 2002(a), 7004(b), and 9004, 9005 and 9006 of the Solid
Waste Disposal Act, as amended, 42 U.S.C. 6912(a), 6974(b), and
6991c, 6991d, and 6991e.

List of Subjects in 40 CFR Part 281

    Administrative practice and procedure, Hazardous substances, State
program approval, Program revisions update, and Underground storage
tanks.

    Dated: July 30, 2020.
John Busterud,
Regional Administrator, Region 9.
[FR Doc. 2020-17180 Filed 8-13-20; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 84, Number 38 (Tuesday, February 26, 2019)]
[Rules and Regulations]
[Pages 6062-6064]
[FR Doc No: 2019-03120]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2018-0964; Product Identifier 2018-NM-127-AD; Amendment
39-19571; AD 2019-03-19]
RIN 2120-AA64

Airworthiness Directives; Saab AB, Saab Aeronautics (Formerly
Known as Saab AB, Saab Aerosystems) Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for all
Saab AB, Saab Aeronautics Model SAAB 2000 airplanes. This AD was
prompted by reports that certain fuel probes indicated misleading fuel
quantities on the engine indicating and crew alerting system (EICAS).
This AD requires a functional check of certain fuel probes, and
replacement with a serviceable part if necessary. We are issuing this
AD to address the unsafe condition on these products.

DATES: This AD is effective April 2, 2019.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of April 2,
2019.

ADDRESSES: For service information identified in this final rule,
contact Saab AB, Saab Aeronautics, SE-581 88, Link[ouml]ping, Sweden;
telephone +46 13 18 5591; fax +46 13 18 4874; email
<EMAIL_ADDRESS>internet http://www.saabgroup.com.
You may view this service information at the FAA, Transport Standards
Branch, 2200 South 216th St., Des Moines, WA. For information on the
availability of this material at the FAA, call<PHONE_NUMBER>. It is also
available on the internet at http://www.regulations.gov by searching
for and locating Docket No. FAA-2018-0964.

Examining the AD Docket

    You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-
0964; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this final rule, the regulatory evaluation, any comments received, and
other information. The address for Docket Operations (phone: 800-647-
5527) is U.S. Department of Transportation, Docket Operations, M-30,
West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Shahram Daneshmandi, Aerospace
Engineer, International Section, Transport Standards Branch, FAA, 2200
South 216th St., Des Moines, WA 98198; telephone and fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 by adding an AD that would apply to all Saab AB, Saab
Aeronautics Model SAAB 2000 airplanes. The NPRM published in the
Federal Register on November 26, 2018 (83 FR 60374). The NPRM was
prompted by reports that certain fuel probes indicated misleading fuel
quantities on the EICAS. The NPRM proposed to require a functional
check of certain fuel probes, and replacement with a serviceable part
if necessary.
    We are issuing this AD to address deteriorated capacity of the fuel
probes, which could lead to incorrect fuel reading, possibly resulting
in fuel starvation and uncommanded engine in-flight shutdown, and
consequent reduced control of the airplane.
    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Union, has issued EASA
Airworthiness Directive 2018-0187, dated August 29, 2018 (referred to
after this as the Mandatory Continuing Airworthiness Information, or
``the MCAI''), to correct an unsafe condition for all Saab AB, Saab
Aeronautics Model SAAB 2000 airplanes. The MCAI states:

    Occurrences were reported that certain fuel probes, installed on
SAAB 2000 aeroplanes, indicated misleading fuel quantities on the
engine indicating and crew alerting system (EICAS). The
investigation results suggest that this may be an aging phenomenon,
leading to deteriorated capacity of the fuel probes.
    This condition, if not detected and corrected, could lead to
incorrect fuel reading, possibly resulting in fuel starvation and
uncommanded engine in-flight shut-down, with consequent reduced
control of the aeroplane.
    To address this potential unsafe condition, SAAB issued the SB
[service bulletin] to provide instructions for a functional check.
    For the reason described above, this [EASA] AD requires a one-
time functional check of the fuel quantity system and the fuel low
level EICAS warnings to determine whether any affected parts are out
of tolerance and, depending on findings, replacement of those
affected parts.

    You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-
0964.

Comments

    We gave the public the opportunity to participate in developing
this final rule. We received no comments on the NPRM or on the
determination of the cost to the public.

Clarification of Paragraph (g)(2) of This AD

    We have removed the words ``has reached'' from the definition in
paragraph (g)(2) of this AD for clarity and to match the MCAI.

Conclusion

    We reviewed the relevant data and determined that air safety and
the public interest require adopting this final rule with the change
described previously and minor editorial changes. We have determined
that these minor changes:
     Are consistent with the intent that was proposed in the
NPRM for addressing the unsafe condition; and
     Do not add any additional burden upon the public than was
already proposed in the NPRM.
    We also determined that these changes will not increase the
economic burden on any operator or increase the scope of this final
rule.

Related Service Information Under 1 CFR Part 51

    Saab AB, Saab Aeronautics has issued Service Bulletin 2000-28-028,
dated April 19, 2018. This service information describes procedures for
a functional check of the fuel indicator gauging accuracy and the low
level warning, and for replacing the affected part with a serviceable
part if necessary.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

Costs of Compliance

    We estimate that this AD affects 8 airplanes of U.S. registry. We
estimate the following costs to comply with this AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Cost on U.S.
                          Labor cost                              Parts cost        product         operators
----------------------------------------------------------------------------------------------------------------
8 work-hours x $85 per hour = $680...........................              $0             $680           $5,440
----------------------------------------------------------------------------------------------------------------

    We estimate the following costs to do any necessary on-condition
action that would be required based on the results of any required
actions. We have no way of determining the number of aircraft that
might need this on-condition action:

                 Estimated Costs of On-Condition Action
------------------------------------------------------------------------
                                                               Cost per
                   Labor cost                     Parts cost    product
------------------------------------------------------------------------
2 work-hours x $85 per hour = $170..............     $6,295      $6,465
------------------------------------------------------------------------

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    We are issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.
    This AD is issued in accordance with authority delegated by the
Executive Director, Aircraft Certification Service, as authorized by
FAA Order 8000.51C. In accordance with that order, issuance of ADs is
normally a function of the Compliance and Airworthiness Division, but
during this transition period, the Executive Director has delegated the
authority to issue ADs applicable to transport category airplanes and
associated appliances to the Director of the System Oversight Division.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

Adoption of the Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13   [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

2019-03-19 Saab AB, Saab Aeronautics (Formerly Known as Saab AB,
Saab Aerosystems): Amendment 39-19571; Docket No. FAA-2018-0964;
Product Identifier 2018-NM-127-AD.

(a) Effective Date

    This AD is effective April 2, 2019.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to all Saab AB, Saab Aeronautics (formerly known
as Saab AB, Saab Aerosystems) Model SAAB 2000 airplanes,
certificated in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 28, Fuel.

(e) Reason

    This AD was prompted by reports that certain fuel probes
indicated misleading fuel quantities on the engine indicating and
crew alerting system (EICAS). We are issuing this AD to address
deteriorated capacity of the fuel probes, which could lead to
incorrect fuel reading, possibly resulting in fuel starvation and
uncommanded engine in-flight shutdown, and consequent reduced
control of the airplane.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Definitions

    (1) An affected part is a fuel probe having part number (P/N)
20136-0101, P/N 20136-0102, P/N 20136-0103, P/N 20136-0104, P/N
20136-0105, or P/N 20136-0106; with fuel low level sensors having P/
N 20137-0101.
    (2) A serviceable part is an affected part that has accumulated
less than 1,500 total flight hours or 12 months since first
installation on an airplane.

(h) Functional Check

    Within 1,500 flight hours or 12 months after the effective date
of this AD, whichever

occurs first, accomplish a functional check of the fuel indicator
gauging accuracy and the low level warning, in accordance with the
Accomplishment Instructions of Saab Service Bulletin 2000-28-028,
dated April 19, 2018.

(i) Corrective Action

    If the functional check required by paragraph (h) of this AD is
found to be out of tolerance, within the limits and under the
applicable conditions, as specified in the operator's Minimum
Equipment List, replace the affected part with a serviceable part,
in accordance with the Accomplishment Instructions of Saab Service
Bulletin 2000-28-028, dated April 19, 2018.

(j) Parts Installation Limitation

    As of the effective date of this AD, no person may install, on
any airplane, an affected part, unless it is a serviceable part, as
defined in paragraph (g)(2) of this AD.

(k) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Section, Transport Standards Branch, FAA, has the
authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the International Section, send it to the attention of
the person identified in paragraph (l)(2) of this AD. Information
may be emailed to<EMAIL_ADDRESS>Before using any
approved AMOC, notify your appropriate principal inspector, or
lacking a principal inspector, the manager of the local flight
standards district office/certificate holding district office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain corrective actions from a manufacturer, the action must be
accomplished using a method approved by the Manager, International
Section, Transport Standards Branch, FAA; or the European Aviation
Safety Agency (EASA); or Saab AB, Saab Aeronautics's EASA Design
Organization Approval (DOA). If approved by the DOA, the approval
must include the DOA-authorized signature.

(l) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information
(MCAI) EASA Airworthiness Directive 2018-0187, dated August 29,
2018, for related information. This MCAI may be found in the AD
docket on the internet at http://www.regulations.gov by searching
for and locating Docket No. FAA-2018-0964.
    (2) For more information about this AD, contact Shahram
Daneshmandi, Aerospace Engineer, International Section, Transport
Standards Branch, FAA, 2200 South 216th St., Des Moines, WA 98198;
telephone and fax<PHONE_NUMBER>.

(m) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (i) Saab Service Bulletin 2000-28-028, dated April 19, 2018.
    (ii) [Reserved]
    (3) For service information identified in this AD, contact Saab
AB, Saab Aeronautics, SE-581 88, Link[ouml]ping, Sweden; telephone
+46 13 18 5591; fax +46 13 18 4874; email
<EMAIL_ADDRESS>internet http://www.saabgroup.com.
    (4) You may view this service information at the FAA, Transport
Standards Branch, 2200 South 216th St., Des Moines, WA. For
information on the availability of this material at the FAA, call
206-231-3195.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Des Moines, Washington, on February 14, 2019.
Michael Kaszycki,
Acting Director, System Oversight Division, Aircraft Certification
Service.
[FR Doc. 2019-03120 Filed 2-25-19; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 83, Number 31 (Wednesday, February 14, 2018)]
[Notices]
[Pages 6702-6704]
[FR Doc No: 2018-03045]

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

DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2016-0002]

Qualification of Drivers; Exemption Applications; Hearing

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of final disposition.

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

SUMMARY: FMCSA announces its decision to exempt 33 individuals from the
hearing requirement in the Federal Motor Carrier Safety Regulations
(FMCSRs) to operate a commercial motor vehicle (CMV) in interstate
commerce. The exemptions enable these hard of hearing and deaf
individuals to operate CMVs in interstate commerce.

DATES: The exemptions were applicable on September 6, 2016. The
exemptions expire on September 6, 2018.

FOR FURTHER INFORMATION CONTACT: Ms. Christine A. Hydock, Chief,
Medical Programs Division,<PHONE_NUMBER>, [email protected], FMCSA,
Department of Transportation, 1200 New Jersey Avenue SE, Room W64-224,
Washington, DC 20590-0001. Office

hours are from 8:30 a.m. to 5 p.m., e.t., Monday through Friday, except
Federal holidays. If you have questions regarding viewing or submitting
material to the docket, contact Docket Services, telephone (202) 366-
9826.

SUPPLEMENTARY INFORMATION:

I. Electronic Access

    You may see all the comments online through the Federal Document
Management System (FDMS) at: http://www.regulations.gov.
    Docket: For access to the docket to read background documents or
comments, go to http://www.regulations.gov and/or Room W12-140 on the
ground level of the West Building, 1200 New Jersey Avenue SE,
Washington, DC, between 9 a.m. and 5 p.m., e.t., Monday through Friday,
except Federal holidays.
    Privacy Act: In accordance with 5 U.S.C. 553(c), DOT solicits
comments from the public to better inform its rulemaking process. DOT
posts these comments, without edit, including any personal information
the commenter provides, to http://www.regulations.gov, as described in
the system of records notice (DOT/ALL-14 FDMS), which can be reviewed
at http://www.dot.gov/privacy.

II. Background

    On August 1, 2016 FMCSA published a notice announcing receipt of
applications from thirty three individuals requesting an exemption from
the hearing requirement in 49 CFR 391.41(b)(11) to operate a CMV in
interstate commerce and requested comments from the public (81 FR
50594). The public comment period ended on August 31, 2016 and one
comment was received.
    FMCSA has evaluated the eligibility of these applicants and
determined that granting exemptions to these individuals would achieve
a level of safety equivalent to or greater than the level that would be
achieved by complying with the current regulation 49 CFR 391.41(b)(11).
    The physical qualification standard for drivers regarding hearing
found in 49 CFR 391.41(b)(11) states that a person is physically
qualified to driver a CMV if that person: First perceives a forced
whispered voice in the better ear at not less than 5 feet with or
without the use of a hearing aid or, if tested by use of an audiometric
device, does not have an average hearing loss in the better ear greater
than 40 decibels at 500 Hz, 1,000 Hz, and 2,000 Hz with or without a
hearing aid when the audiometric device is calibrated to American
National Standard (formerly ASA Standard) Z24.5--1951.
    49 CFR 391.41(b)(11) was adopted in 1970, with a revision in 1971
to allow drivers to be qualified under this standard while wearing a
hearing aid, 35 FR 6458, 6463 (April 22, 1970) and 36 FR 12857 (July 3,
1971).

III. Discussion of Comments

    FMCSA received one comment in this preceeding. The Florida
Department Highway Safety and Motor Vehicles expressed concerns for the
far reaching ramifications of allowing deaf or hard of hearing drivers
to test, train and/or drive commercially and concerns regarding the
process by which hearing exemptions are granted from parts 49 CFR
394.41. FMCSA acknowledges the Florida Department of Highway Safety and
Motor Vehicles concerns and a response to these comments will be
published in a subsequent notice.

Basis for Exemption Determination

    Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption
from the hearing standard in 49 CFR 391.41(b)(11) if the exemption is
likely to achieve an equivalent or greater level of safety than would
be achieved without the exemption. The exemption allows the applicants
to operate CMVs in interstate commerce.
    The Agency's decision regarding these exemption applications is
based on current medical information and literature, and the 2008
Evidence Report, ``Executive Summary on Hearing, Vestibular Function
and Commercial Motor Driving Safety.'' The evidence report reached two
conclusions regarding the matter of hearing loss and CMV driver safety:
(1) No studies that examined the relationship between hearing loss and
crash risk exclusively among CMV drivers were identified; and (2)
evidence from studies of the private driver's license holder population
does not support the contention that individuals with hearing
impairment are at an increased risk for a crash. In addition, the
Agency reviewed each applicant's driving record found in the Commercial
Driver's License Information System (CDLIS), for commercial driver's
license (CDL) holders, and inspections recorded in the Motor Carrier
Management Information System (MCMIS). For non-CDL holders, the Agency
reviewed the driving records from the State Driver's Licensing Agency
(SDLA). Each applicant's record demonstrated a safe driving history.
Based on an individual assessment of each applicant that focused on
whether an equal or greater level of safety is likely to be achieved by
permitting each of these drivers to drive in interstate commerce as
opposed to restricting him or her to driving in intrastate commerce,
the Agency believes the drivers granted this exemption have
demonstrated that they do not pose a risk to public safety.
    Consequently, FMCSA finds that in each case exempting these
applicants from the hearing standard in 49 CFR 391.41(b)(11) is likely
to achieve a level of safety equal to that existing without the
exemption.

IV. Conditions and Requirements

    The terms and conditions of the exemption are provided to the
applicants in the exemption document and includes the following: (1)
Each driver must report any crashes or accidents as defined in 49 CFR
390.5; (2) each driver must report all citations and convictions for
disqualifying offenses under 49 CFR part 383 and 49 CFR 391 to FMCSA;
and (3) each driver is prohibited from operating a motorcoach or bus
with passengers in interstate commerce. The driver must also have a
copy of the exemption when driving, for presentation to a duly
authorized Federal, State, or local enforcement official. In addition,
the exemption does not exempt the individual from meeting the
applicable CDL testing requirements.

V. Preemption

    During the period the exemption is in effect, no State shall
enforce any law or regulation that conflicts with this exemption with
respect to a person operating under the exemption.

VI. Conclusion

    Based upon its evaluation of the thirty three exemption
applications, FMCSA exempts the following drivers from the hearing
standard, 49 CFR 391.41(b)(11), subject to the requirements cited
above:

Pricilla Brackenridge (IL)
David Balay Chappelear (TX)
Donald Coen (NY)
Mathias Conway (MI)
Gary A. Cordano (CA)
Harvey Culver (TX)
Charles DePriest (TX)
William R. English (TX)
Samuel Fernell (OH)
Richard Fisher (PA)
Russell Fleming (GA)
Ronald Freeze (OK)
Carlos Gonzales (GA)
Zachary Gullett (OH)
Richard Hoots (AZ)
Carlos Lee Jackson (TX)
Richard Kahalewai-Campbell (HI)
Randall Lutsey (PA)
Reynaldo Martinez (TX)
Julio C. Medrano (WA)

Keith Miller (MO)
Brian J. Minch (MA)
Katrina Parker (NJ)
Walt Pindor (AZ)
Robert Samarian (MI)
D'Nielle Smith (OH)
Michael Smith (CO)
Daniel Stroud (UT)
Michael Sweet (GA)
James Watters (OH)
Gerald Westfall (PA)
Derek Zamot (FL)

    In accordance with 49 U.S.C. 31315, each exemption will be valid
for two years from the effective date unless revoked earlier by FMCSA.
The exemption will be revoked if the following occurs: (1) The person
fails to comply with the terms and conditions of the exemption; (2) the
exemption has resulted in a lower level of safety than was maintained
prior to being granted; or (3) continuation of the exemption would not
be consistent with the goals and objectives of 49 U.S.C. 31136 and
31315.

    Issued on: February 8, 2018.
Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2018-03045 Filed 2-13-18; 8:45 am]
 BILLING CODE 4910-EX-P


[Federal Register Volume 77, Number 249 (Friday, December 28, 2012)]
[Notices]
[Pages 76574-76578]
[FR Doc No: 2012-31152]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68493; File No. SR-NASDAQ-2012-133]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to
Modify a Level 2 Subscriber Fee and Related Rule Clarifications

December 20, 2012.
    Pursuant to 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 December 18, 2012, The NASDAQ Stock Market LLC (``NASDAQ'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by NASDAQ. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------

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

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

    NASDAQ proposes to modify the NASDAQ Level 2 Professional
Subscriber fee, as well as to make certain clarifications to NASDAQ
Rule 7023(b)(1). NASDAQ will implement the proposed revised fee on
January 1, 2013.

* * * * *

7023. NASDAQ Depth-of-Book Data

    (a) No change.
    (b) Subscriber Fees.
    (1) NASDAQ Level 2
    (A) Non-Professional Subscribers pay a monthly fee of $9 each;
    (B) Professional Subscribers pay a monthly fee of $ [3]40 each
for [any] Display Usage based upon Direct or Indirect Access, or for
Non-Display Usage based upon Indirect Access only;
    (C) Professional Subscribers pay a monthly fee as set forth in
subsection (4) below for Non-Display Usage based upon Direct Access;
[and]
    (D) The [monthly Subscriber] fees for NASDAQ Level 2 are
separate from the fees for NASDAQ Level 1 as set forth in the NASDAQ
UTP Plan[.] ; and
    (E) Direct Access has the same meaning as set forth in NASDAQ
Rule 7019(d).
    (b)(2)--(4) No change.
    (c)--(e) No change.
* * * * *

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

    In its filing with the Commission, NASDAQ 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. NASDAQ 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
    NASDAQ is proposing a change to modify the NASDAQ Level 2
Professional Subscriber fee (``Level 2 fee''), as well as to make
certain modifications for clarity to NASDAQ Rule 7023(b)(1). NASDAQ
Rule 7023(b)(1) currently provides for a monthly fee of $30 for
Professional Subscribers each for any Display Usage or for Non-Display
Usage based upon Indirect Access. Specifically, NASDAQ proposes to
increase the display fee from $30 per month to $40 per month for
Professional Subscribers each for Direct or Indirect Access, or for
Non-Display usage based upon Indirect Access. NASDAQ Level 2 Non-

Professional Subscriber fees will remain unchanged.
    The NASDAQ Level 2 product is completely optional. NASDAQ has
enhanced this product through capacity upgrades and regulatory data
sets over the last approximately 30 years, but has not increased the
associated Professional Subscriber fee. During this year time period,
the network capacity for NASDAQ Level 2 has increased from a 56 Kb feed
in 1983 to the current 30 Mb feed. Additionally, since NASDAQ Level 2
is also used for market making functions, NASDAQ has invested over the
years to add regulatory data sets, such as Market Maker Mode and
Trading Action status. Such investments will continue in 2013 by the
addition of limit up--limit down and IPO data elements to the feed. The
only usage fee change NASDAQ has made in the last approximately 30
years was to add a Non-Professional fee option for NASDAQ Level 2,
which is widely used by online brokerage firms today. This increase
represents the first Professional Subscriber price change for display
usage of NASDAQ Level 2 user fees since its introduction in 1983.
    NASDAQ is also making certain clarifications to NASDAQ Rule
7023(b)(1). By specifically including the access methods for display
data into NASDAQ Rule 7023(b)(1)(B), it should serve to assist firms in
understanding the fees based upon access. This conforms to how other
Subscriber fees are described within the NASDAQ rules. Additionally,
the words ``monthly Subscriber'' are being deleted from NASDAQ Rule
7023(b)(1)(D) to clarify that not only Subscriber fees are separate
from the fees for NASDAQ Level 1 as set forth in the NASDAQ UTP Plan,
but distributor fees, access fees or any fees set forth in the NASDAQ
UTP Plan. Finally, NASDAQ Rule 7023(b)(1)(E) is a definitional
reference for the term ``Direct Access'' that is being added to improve
the clarity of the section.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\3\ in general, and with Section
6(b)(4) and 6(b)(5) of the Act,\4\ in particular, in that it provides
an equitable allocation of reasonable fees among Subscribers and
recipients of NASDAQ data and is not designed to permit unfair
discrimination between them. In adopting Regulation NMS, the Commission
granted self-regulatory organizations and broker-dealers increased
authority and flexibility to offer new and unique market data to the
public. It was believed that this authority would expand the amount of
data available to consumers, and also spur innovation and competition
for the provision of market data.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Commission concluded that Regulation NMS--by deregulating the
market in proprietary data--would itself further the Act's goals of
facilitating efficiency and competition:

    [E]fficiency is promoted when broker-dealers who do not need the
data beyond the prices, sizes, market center identifications of the
NBBO and consolidated last sale information are not required to
receive (and pay for) such data. The Commission also believes that
efficiency is promoted when broker-dealers may choose to receive
(and pay for) additional market data based on their own internal
analysis of the need for such data.\5\

    \5\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496 (June 29, 2005).
---------------------------------------------------------------------------

    By removing ``unnecessary regulatory restrictions'' on the ability
of exchanges to sell their own data, Regulation NMS advanced the goals
of the Act and the principles reflected in its legislative history. If
the free market should determine whether proprietary data is sold to
broker-dealers at all, it follows that the price at which such data is
sold should be set by the market as well. Level 2, TotalView and
OpenView are precisely the sort of market data products that the
Commission envisioned when it adopted Regulation NMS.
    On July 21, 2010, President Barack Obama signed into law H.R. 4173,
the Dodd- Frank Wall Street Reform and Consumer Protection Act of 2010
(``Dodd-Frank Act''), which amended Section 19 of the Act. Among other
things, Section 916 of the Dodd-Frank Act amended paragraph (A) of
Section 19(b)(3) of the Act by inserting the phrase ``on any person,
whether or not the person is a member of the self-regulatory
organization'' after ``due, fee or other charge imposed by the self-
regulatory organization.'' As a result, all self-regulatory
organization (``SRO'') rule proposals establishing or changing dues,
fees, or other charges are immediately effective upon filing regardless
of whether such dues, fees, or other charges are imposed on members of
the SRO, non-members, or both. Section 916 further amended paragraph
(C) of Section 19(b)(3) of the Act to read, in pertinent part, ``At any
time within the 60-day period beginning on the date of filing of such a
proposed rule change in accordance with the provisions of paragraph (1)
[of Section 19(b)], the Commission summarily may temporarily suspend
the change in the rules of the self-regulatory organization made
thereby, 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 this title. If the
Commission takes such action, the Commission shall institute
proceedings under paragraph (2)(B) [of Section 19(b)] to determine
whether the proposed rule should be approved or disapproved.''
    The decision of the United States Court of Appeals for the District
of Columbia Circuit in NetCoalition v. SEC, No. 09-1042 (D.C. Cir.
2010), although reviewing a Commission decision made prior to the
effective date of the Dodd-Frank Act, upheld the Commission's reliance
upon competitive markets to set reasonable and equitably allocated fees
for market data. ``In fact, the legislative history indicates that the
Congress intended that the market system `evolve through the interplay
of competitive forces as unnecessary regulatory restrictions are
removed' and that the SEC wield its regulatory power `in those
situations where competition may not be sufficient,' such as in the
creation of a `consolidated transactional reporting system.' ''
NetCoalition, at 15 (quoting H.R. Rep. No. 94-229, at 92 (1975), as
reprinted in 1975 U.S.C.C.A.N. 321, 323).
    For the reasons stated above, NASDAQ believes that the proposed fee
is fair and equitable in accordance with Section 6(b)(4) of the Act,
and not unreasonably discriminatory in accordance with Section 6(b)(5)
of the Act. As described above, the proposed fee is based on pricing
conventions and distinctions that exist in NASDAQ's current fee
schedule, and the fee schedules of other exchanges. These distinctions
(top-of-book versus Depth-of-Book, Professional versus non-Professional
Subscribers, Direct versus Indirect Access, Internal versus External
Distribution) are each based on principles of fairness and equity that
have helped for many years to maintain fair, equitable, and not
unreasonably discriminatory fees, and that apply with equal or greater
force to the current proposal.
    As described in greater detail below, if NASDAQ has calculated
improperly and the market deems the proposed fees to be unfair,
inequitable, or unreasonably discriminatory, firms can diminish or
discontinue the use of their data because the proposed product is
entirely optional to all parties. Firms are not required to purchase
Depth-of-Book

data or to utilize any specific pricing alternative if they do choose
to purchase Depth-of-Book data. NASDAQ is not required to make Depth-
of-Book data available or to offer specific pricing alternatives for
potential purchases. NASDAQ can discontinue offering a pricing
alternative (as it has in the past) and firms can discontinue their use
at any time and for any reason (as they often do), including due to
their assessment of the reasonableness of fees charged. NASDAQ
continues to establish and revise pricing policies aimed at increasing
fairness and equitable allocation of fees among Subscribers.
    NASDAQ believes that periodically it must adjust the Depth-of-Book
Enterprise Data Subscriber fees to reflect market forces. Given that
this fee change represents the first Professional Subscriber price
change for display usage of NASDAQ Level 2 user fees since its
introduction in 1983, NASDAQ believes it is an appropriate time to
adjust this fee to more accurately reflect the investments made to
enhance this product through capacity upgrades and regulatory data sets
added. Given that this fee could have been justifiably increased at any
point over the course of the past 29 years, NASDAQ believes that such
an increase is now long overdue. This also reflects that the market for
this Depth-of-Book information is highly competitive and continually
evolves as products develop and change.

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

    NASDAQ does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. Notwithstanding its
determination that the Commission may rely upon competition to
establish fair and equitably allocated fees for market data, the
NetCoalition court found that the Commission had not, in that case,
compiled a record that adequately supported its conclusion that the
market for the data at issue in the case was competitive. NASDAQ
believes that a record may readily be established to demonstrate the
competitive nature of the market in question.
    There is intense competition between trading platforms that provide
transaction execution and routing services and proprietary data
products. Transaction execution and proprietary data products are
complementary in that market data is both an input and a byproduct of
the execution service. In fact, market data and trade execution are a
paradigmatic example of joint products with joint costs. The decision
whether and on which platform to post an order will depend on the
attributes of the platform where the order can be posted, including the
execution fees, data quality and price and distribution of its data
products. Without the prospect of a taking order seeing and reacting to
a posted order on a particular platform, the posting of the order would
accomplish little. Without trade executions, exchange data products
cannot exist. Data products are valuable to many end Subscribers only
insofar as they provide information that end Subscribers expect will
assist them or their customers in making trading decisions.
    The costs of producing market data include not only the costs of
the data distribution infrastructure, but also the costs of designing,
maintaining, and operating the exchange's transaction execution
platform and the cost of regulating the exchange to ensure its fair
operation and maintain investor confidence. The total return that a
trading platform earns reflects the revenues it receives from both
products and the joint costs it incurs. Moreover, an exchange's
customers view the costs of transaction executions and of data as a
unified cost of doing business with the exchange. A broker-dealer will
direct orders to a particular exchange only if the expected revenues
from executing trades on the exchange exceed net transaction execution
costs and the cost of data that the broker-dealer chooses to buy to
support its trading decisions (or those of its customers). The choice
of data products is, in turn, a product of the value of the products in
making profitable trading decisions. If the cost of the product exceeds
its expected value, the broker-dealer will choose not to buy it.
Moreover, as a broker-dealer chooses to direct fewer orders to a
particular exchange, the value of the product to that broker-dealer
decreases, for two reasons. First, the product will contain less
information, because executions of the broker-dealer's orders will not
be reflected in it. Second, and perhaps more important, the product
will be less valuable to that broker-dealer because it does not provide
information about the venue to which it is directing its orders. Data
from the competing venue to which the broker-dealer is directing orders
will become correspondingly more valuable.
    Thus, an increase in the fees charged for either transactions or
data has the potential to impair revenues from both products. ``No one
disputes that competition for order flow is `fierce'.'' NetCoalition at
24. However, the existence of fierce competition for order flow implies
a high degree of price sensitivity on the part of broker-dealers with
order flow, since they may readily reduce costs by directing orders
toward the lowest-cost trading venues. A broker-dealer that shifted its
order flow from one platform to another in response to order execution
price differentials would both reduce the value of that platform's
market data and reduce its own need to consume data from the disfavored
platform. Similarly, if a platform increases its market data fees, the
change will affect the overall cost of doing business with the
platform, and affected broker-dealers will assess whether they can
lower their trading costs by directing orders elsewhere and thereby
lessening the need for the more expensive data.
    Analyzing the cost of market data distribution in isolation from
the cost of all of the inputs supporting the creation of market data
will inevitably underestimate the cost of the data. Thus, because it is
impossible to create data without a fast, technologically robust, and
well-regulated execution system, system costs and regulatory costs
affect the price of market data. It would be equally misleading,
however, to attribute all of the exchange's costs to the market data
portion of an exchange's joint product. Rather, all of the exchange's
costs are incurred for the unified purposes of attracting order flow,
executing and/or routing orders, and generating and selling data about
market activity. The total return that an exchange earns reflects the
revenues it receives from the joint products and the total costs of the
joint products.
    Competition among trading platforms can be expected to constrain
the aggregate return each platform earns from the sale of its joint
products, but different platforms may choose from a range of possible,
and equally reasonable, pricing strategies as the means of recovering
total costs. For example, some platforms may choose to pay rebates to
attract orders, charge relatively low prices for market information (or
provide information free of charge) and charge relatively high prices
for accessing posted liquidity. Other platforms may choose a strategy
of paying lower rebates (or no rebates) to attract orders, setting
relatively high prices for market information, and setting relatively
low prices for accessing posted liquidity. In this environment, there
is no economic basis for regulating maximum prices for one of the joint
products in an industry in which suppliers face competitive constraints
with regard to the joint offering. This would be akin to strictly

regulating the price that an automobile manufacturer can charge for car
sound systems despite the existence of a highly competitive market for
cars and the availability of after-market alternatives to the
manufacturer-supplied system.
    The market for market data products is competitive and inherently
contestable because there is fierce competition for the inputs
necessary to the creation of proprietary data and strict pricing
discipline for the proprietary products themselves. Numerous exchanges
compete with each other for listings, trades, and market data itself,
providing virtually limitless opportunities for entrepreneurs who wish
to produce and distribute their own market data. This proprietary data
is produced by each individual exchange, as well as other entities, in
a vigorously competitive market.
    Broker-dealers currently have numerous alternative venues for their
order flow, including thirteen SRO markets, as well as internalizing
broker-dealers (``BDs'') and various forms of alternative trading
systems (``ATSs''), including dark pools and electronic communication
networks (``ECNs''). Each SRO market competes to produce transaction
reports via trade executions, and two FINRA-regulated Trade Reporting
Facilities (``TRFs'') compete to attract internalized transaction
reports. Competitive markets for order flow, executions, and
transaction reports provide pricing discipline for the inputs of
proprietary data products.
    The large number of SROs, TRFs, BDs, and ATSs that currently
produce proprietary data or are currently capable of producing it
provides further pricing discipline for proprietary data products. Each
SRO, TRF, ATS, and BD is currently permitted to produce proprietary
data products, and many currently do or have announced plans to do so,
including NASDAQ, New York Stock Exchange LLC (``NYSE''), NYSE MKT LLC,
NYSE Arca LLC, and BATS Exchange, Inc. (``BATS'').
    Any ATS or BD can combine with any other ATS, BD, or multiple ATSs
or BDs to produce joint proprietary data products. Additionally, order
routers and market data vendors can facilitate single or multiple
broker-dealers' production of proprietary data products. The potential
sources of proprietary products are virtually limitless.
    The fact that proprietary data from ATSs, BDs, and vendors can by-
pass SROs is significant in two respects. First, non-SROs can compete
directly with SROs for the production and sale of proprietary data
products, as BATS and Arca did before registering as exchanges by
publishing Depth-of-Book data on the Internet. Second, because a single
order or transaction report can appear in an SRO proprietary product, a
non-SRO proprietary product, or both, the data available in proprietary
products is exponentially greater than the actual number of orders and
transaction reports that exist in the marketplace.
    Market data vendors provide another form of price discipline for
proprietary data products because they control the primary means of
access to end Subscribers. Vendors impose price restraints based upon
their business models. For example, vendors such as Bloomberg and
Thomson Reuters that assess a surcharge on data they sell may refuse to
offer proprietary products that end Subscribers will not purchase in
sufficient numbers. Internet portals, such as Google, impose a
discipline by providing only data that will enable them to attract
``eyeballs'' that contribute to their advertising revenue. Retail
broker-dealers, such as Schwab and Fidelity, offer their customers
proprietary data only if it promotes trading and generates sufficient
commission revenue. Although the business models may differ, these
vendors' pricing discipline is the same: they can simply refuse to
purchase any proprietary data product that fails to provide sufficient
value. NASDAQ and other producers of proprietary data products must
understand and respond to these varying business models and pricing
disciplines in order to market proprietary data products successfully.
    In addition to the competition and price discipline described
above, the market for proprietary data products is also highly
contestable because market entry is rapid, inexpensive, and profitable.
The history of electronic trading is replete with examples of entrants
that swiftly grew into some of the largest electronic trading platforms
and proprietary data producers: Archipelago, Bloomberg Tradebook,
Island, RediBook, Attain, TracECN, BATS Trading and Direct Edge. A
proliferation of dark pools and other ATSs operate profitably with
fragmentary shares of consolidated market volume.
    Regulation NMS, by deregulating the market for proprietary data,
has increased the contestability of that market. While broker-dealers
have previously published their proprietary data individually,
Regulation NMS encourages market data vendors and broker-dealers to
produce proprietary products cooperatively in a manner never before
possible. Multiple market data vendors already have the capability to
aggregate data and disseminate it on a profitable scale, including
Bloomberg, and Thomson Reuters.
    The court in NetCoalition concluded that the Commission had failed
to demonstrate that the market for market data was competitive based on
the reasoning of the Commission's NetCoalition order because, in the
court's view, the Commission had not adequately demonstrated that the
Depth-of-Book data at issue in the case is used to attract order flow.
NASDAQ believes, however, that evidence not before the court clearly
demonstrates that availability of data attracts order flow. For
example, as of July 2010, 92 of the top 100 broker-dealers by shares
executed on NASDAQ consumed Level 2 and 80 of the top 100 broker-
dealers consumed TotalView. During that month, the Level 2-Subscribers
were responsible for 94.44% of the orders entered into NASDAQ and
TotalView Subscribers were responsible for 92.98%.
    Competition among platforms has driven NASDAQ continually to
improve its platform data offerings and to cater to customers' data
needs. For example, NASDAQ has developed and maintained multiple
delivery mechanisms (IP, multi-cast, and compression) that enable
customers to receive data in the form and manner they prefer and at the
lowest cost to them. NASDAQ offers front end applications such as its
``Bookviewer'' to help customers utilize data. NASDAQ has created new
products like TotalView Aggregate to complement TotalView ITCH and/
Level 2, because offering data in multiple formatting allows NASDAQ to
better fit customer needs. NASDAQ offers data via multiple extranet
providers, thereby helping to reduce network and total cost for its
data products. NASDAQ has developed an online administrative system to
provide customers transparency into their data feed requests and
streamline data usage reporting. NASDAQ has also expanded its
Enterprise License options that reduce the administrative burden and
costs to firms that purchase market data.
    Despite these enhancements and a dramatic increase in message
traffic, NASDAQ's fees for market data have remained flat. In fact, as
a percent of total Subscriber costs, NASDAQ data fees have fallen
relative to other data usage costs--including bandwidth, programming,
and infrastructure--that have risen. The same holds true for execution
services; despite numerous enhancements to NASDAQ's trading platform,
absolute and relative trading costs have declined. Platform competition
has intensified as new

entrants have emerged, constraining prices for both executions and for
data.
    The vigor of competition for Depth-of-Book information is
significant and the Exchange believes that this proposal itself clearly
evidences such competition. NASDAQ is increasing the fee in order to
keep pace with changes in the industry and evolving customer needs.
This product is entirely optional and is geared towards attracting new
customers, as well as retaining existing customers.
    The Exchange has witnessed competitors creating new products and
innovative pricing in this space over the course of the past year.
NASDAQ continues to see firms challenge its pricing on the basis of the
Exchange's explicit fees being higher than the zero-priced fees from
other competitors such as BATS. In all cases, firms make decisions on
how much and what types of data to consume on the basis of the total
cost of interacting with NASDAQ or other exchanges. Of course, the
explicit data fees are but one factor in a total platform analysis.
Some competitors have lower transactions fees and higher data fees, and
others are vice versa. The market for this Depth-of-Book information is
highly competitive and continually evolves as products develop and
change.

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.\6\ 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(a)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2012-133 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2012-133. 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 Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of NASDAQ. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2012-133 and should
be submitted on or before January 18, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-31152 Filed 12-27-12; 8:45 am]
BILLING CODE 8011-01-P