1 ENVIRONMENTAL PROTECTION AGENCY RESPONSE TO PUBLIC COMMENTS ON THE PROPOSED VARIANCE FOR WORLD RESOURCES COMPANY Summary of Proposal and Response to Comments 40 CFR 260.30 provides that the EPA Administrator may grant a variance from the classification of solid waste, on a case by case basis, for materials that have been reclaimed but must be reclaimed further before recovery is completed. Such a variance generally is contingent upon the material resulting from the initial reclamation being "commodity like." When this variance is effective, the concentrates partially reclaimed from metal bearing sludges F006 and F019 that are shipped to smelters may travel without a hazardous waste manifest and will not be subject to any RCRA controls other than the conditions of this variance (listed above in this notice). Incoming hazardous waste received by WRC at the Phoenix facility is not covered by the variance and must be manifested and managed as a hazardous waste until shipped to smelters for further reclamation.

EPA's rules at 40 CFR 260.31( c) specifies five criteria for evaluating whether a specific material qualifies for a "partially reclaimed material" variance from the definition of solid waste. In addition, 40 CFR 260.31( c)( 6) also allows EPA to consider "other relevant factors" when determining whether or not to grant a requested variance for materials that have been partially reclaimed. The criteria of 40 CFR 260.31( c) do not constitute separate legal thresholds, each of which must be met before EPA can grant a variance under this regulatory provision. Instead, EPA must consider all the criteria in their totality to determine whether the partially reclaimed concentrate is "commodity like". A strong demonstration that several criteria have been met may outweigh the fact that an applicant is weak in another area. Weighing all of the factors together, EPA has concluded that WRC's processed concentrates are more commodity like than waste like, and that it is reasonable to grant the variance.

This section sets out EPA's findings, describes the principal comments concerning these findings, and gives EPA's responses to these comments. All other comments, and the Agency's responses, may be found in the record for this rulemaking (see RCRA Docket Number F 2002 WRCF FFFFF).

A. Degree of Processing The first evaluation criterion (40 CFR 260.31( c)( 1)) is the degree of processing a material has undergone and the degree of further processing that is required for the material to be rendered "commodity like." Materials that have undergone substantial processing to reclaim valuable or recyclable materials (but still must undergo a degree of further processing) generally satisfy this criterion. Materials that are still substantially "waste like" and that need a significant degree of further processing or "treatment" to be rendered "commodity like" may not satisfy the evaluation criterion. 2 One commenter stated that the greater part of the processing is accomplished at the smelter rather than at the WRC facility and that WRC therefore does not meet the criteria for the variance. EPA agrees that this processing is not technically complicated. As discussed below, however, WRC has a sophisticated quality control program which allows it to blend sludges to meet smelter specifications. In fact, WRC has made a very strong showing that its processing adds substantial economic value to electroplating sludges. It takes in a material that has little or no market value (electroplaters pay WRC to take their sludges) and converts it into a material that smelters will buy (see the discussion of economic value in the following section of this notice). WRC also made a strong showing that it meets the fourth criterion, relating to a guaranteed end market for its reclaimed material. Weighing all the factors together, EPA has concluded that the amount of processing performed by WRC is sufficient to meet this criterion.

Another commenter said that evaporation and blending represent the most minimal form of waste handling and should not be interpreted to constitute significant value added processing. This commenter stated that any electroplater would be able to obtain a variance for hazardous waste that has been evaporated in a 90 day or other exempt unit, and any smelter would be able to accept it. Another commenter speculated that other 90 day generators would dewater other wastes and claim partially reclaimed variances.

EPA does not agree that any electroplater would be able to obtain a variance to dry sludges in onsite units. Although WRC's mechanical methods for sludge drying and blending may be technically simple, the company has a sophisticated quality control program used to ensure that the sludge from each generator meets contract specifications, and that the partially reclaimed material has also been formulated to meet purchaser specifications. The process involves a chemical analysis laboratory program and computer software programs which yield over 200,000 test results yearly to provide needed operational information to control WRC's recycling activities. These specifications and analyses also played a role in EPA's decision that the sludges undergo meaningful processing at WRC. EPA would not be likely to grant variances to electroplaters or other waste generators who could not show similarly strong indicators that they engaged in significant processing to create "commodities."

One commenter stated that using the value of services to generators as a measure for determining the degree of processing of a waste material does not appear in any regulation and is not discussed in any of the Agency's correspondence or guidance on this subject.

EPA did not consider the value of services that WRC provides to generators in its evaluation of this criterion. Although WRC urged EPA to take into account the amount of money it spends to process each ton of sludge, and although it is true that WRC does derive some of its profit from fees paid by generators, EPA's decision is based on the fact that WRC's activities make its concentrate marketable to smelters as discussed elsewhere in this notice (see section B below).

B. Economic Value of Material That Has Been Reclaimed The second evaluation criterion (§ 260.31( c)( 2)) requires an evaluation of the economic value of the material that has been reclaimed, but must be further reclaimed. This criterion is also 3 useful in determining whether a material is indeed "commodity like." To satisfy this criterion, petitioners must demonstrate that the initial reclamation process increases or contributes to the value of the material and that there is a market for the reclaimed material. Petitioners generally can demonstrate that this factor is met by providing sales information, including quantities of the material sold, additional demand for the material (if any), and the price paid for the material by purchasers.

In the proposal, EPA stated that the processed concentrate that WRC produces has positive economic value and is purchased by smelters. EPA based this conclusion primarily on sales data provided by WRC for January 1994 June 1995. EPA found that this data showed that WRC in fact sold its partially reclaimed material to smelters and received a positive economic value (taking into account average transportation costs).

One commenter stated that WRC and EPA have mis characterized the "economic value" of the concentrate. This commenter asserted that the true economic value of metal bearing sludges is determined by the value of the metals in the material at a given time, not by how much is spent to process the material or how much the processor charges for the material. The commenter asserted that, on this basis, WRC's process adds no value, because the amount of the metals in the sludges does not change.

EPA agrees that the presence of the valuable metals in metal bearing sludges is one factor to be used in determining whether WRC's partially reclaimed concentrate is commodity like. However, EPA does not agree that WRC must increase the amount of metal to add value to the materials that it processes. There are other ways to make these metal bearing materials more valuable. WRC's services in aggregating sludges into larger volumes which smelters are willing to accept and in custom blending sludges to meet specific smelter specifications add significant value. The fact that WRC is able to sell processed concentrates to smelters (while few electroplaters are able to persuade smelters to accept unprocessed sludges, and most who do have to pay smelters to accept their sludges), demonstrates that WRC's services add value.

One commenter questioned whether WRC would be able to claim positive economic value if it analyzed sales data for sludges that were reclaimed for common metals only. This commenter argued that the economic value would not be as high if only common metals were sold, instead of precious metals. Another commenter said that information in the record indicated that WRC's concentrate contained substantially lower levels of recoverable metals than virgin concentrates.

In response to these comments, Agency points out that the regulatory criteria for granting a variance under 40 CFR 260.30( c) do not require the Agency to distinguish between the common metals and precious metals contained in WRC's partially reclaimed concentrate, if in fact the concentrate contains both kinds of metals. The Agency also disagrees that recoverable levels for many metals are lower in WRC's concentrate than those found in virgin concentrate. If in some cases the levels of metals are lower, smelters are nevertheless willing to pay for the concentrates, demonstrating that they have positive economic value.

The commenter also pointed out that a significant portion of WRC's revenue comes from fees it charges generators, as opposed to the revenue received for selling its concentrate to 4 smelters. The commenter believed that this fact is indicative of sham recycling. If the commenter means that WRC's operation is a "sham", the issue is not relevant to this variance. The sham recycling criteria help EPA distinguish facilities that engage in recycling that is not subject to RCRA regulation from facilities that engage in waste treatment that is subject to RCRA. WRC is not claiming that its operation is exempt from RCRA; therefore, the sham recycling criteria do not apply. Similarly, the commenter may be suggesting that smelters using WRC concentrates are engaged in waste treatment rather than recycling. EPA does not believe that the fees generators pay to WRC are relevant to the legitimacy of the smelters' processes. The argument might have relevance if WRC paid smelters to take its concentrates; however, the record shows that WRC sells its concentrates to smelters.

Finally, the commenter may be suggesting that WRC's process adds so little value to the sludges that no variance is warranted, so that WRC concentrates should continue to be regulated as hazardous wastes during transportation and during storage at smelters. EPA disagrees. Data provided by WRC show that, during 1996 1999, WRC made more money from selling concentrates to smelters than from charging fees to generators. WRC received approximately $0.59 from generator fees for every $1.00 it received in metal sales (after adjusting generator fees to eliminate charges for optional transportation services).

This commenter also stated that EPA should not have used "average" transportation costs in assessing whether WRC received positive economic value for its concentrate. This commenter suggested that the Agency should require recordkeeping and auditing of WRC's records to ensure that each shipment generates a return. The commenter further suggested that EPA should assess the transportation cost of a single trip for each load, any administrative activities by the smelter, and smelter processing costs. These costs should then be compared to similar costs for asgenerated sludges shipped directly to smelters. The commenter also stated that EPA should determine monetary value to smelters of reducing sludge moisture content and blending sludges to meet smelter specifications.

In response to these comments, the Agency notes that it is not feasible to evaluate the profitability of each and every shipment made by WRC to smelters. Such profitability will depend on several factors, such as the concentration of metals in a particular shipment, the price of the metals at the time, and freight costs. We do not believe that the regulatory criteria at 40 CFR 260.31( c) require the Agency to examine all of these factors with respect to each shipment. For this reason, EPA instead assessed the average cost of transportation over the period covered by the variance application. We believe that such averaged costs are sufficient to help us assess the economic value of WRC's concentrate.

EPA believes that the record shows that smelters value the reduction of moisture content and the blending of sludges. Smelters will pay more for WRC's concentrates, which have undergone these steps, than they will pay for sludges marketed by electroplaters which have not been dried and blended. Contrary to the commenter's assertion, EPA does not need to determine precise values for each of these activities to make a finding on this issue. One commenter also stated that EPA's assertion that smelters are reluctant to accept F006 sludges directly from generators is not supported in the rulemaking record, and that at least one smelter takes "as generated" sludges directly from electroplaters. In response, the Agency notes 5 that we did not intend to imply that smelters refuse to take sludges directly from electroplaters. Rather, EPA meant that WRC's concentrates are more attractive to smelters than sludges shipped directly from electroplaters. EPA believes that the concentrates are more attractive for two reasons. First, WRC's shipments are much larger than typical shipments from electroplaters. For example, in 1995 the average amount of F006 generated from an individual electroplater was 120 tons (see Regulatory Impact Analysis for the Final Rule for a 180 Day Accumulation Time for F006 Wastewater Treatment Sludges, USEPA, Office Of Solid Waste, January 14, 2000). During the same year, WRC processed over 16,000 tons of F006 and related wastes for metal recovery (see Hazardous Waste Recycling in the United States: Summary Statistics and Trends for 1993 1997, USEPA, Office of Solid Waste, June 7, 2001, p. 18). Larger shipments reduce transaction costs for smelters, and smelters will penalize for smaller lots (see Pollution Prevention and Control Technology for Plating Operations, George C. Cushnie Jr., 1994). They also allow for economies of scale in shipping and handling costs. Second, smelter personnel contacted by EPA indicated that they believe that WRC more consistently meets specifications for metal content and impurities (see personal communication between Paul Borst, USEPA, Office of Solid Waste and Bob Sippel, Vice President for Recycling, Noranda Minerals, Inc., July 22 24, 1996).

C. Degree To Which Reclaimed Material Resembles Analogous Raw Material The third evaluation criterion (40 CFR 260.31( c)( 3)) is the degree to which the reclaimed material is like an analogous raw material. The partially reclaimed material should be similar to an analogous raw material or feedstock for which the material may be substituted in a production or reclamation process. In addition, the partially reclaimed material should not contain significant concentrations of hazardous constituents not found in an analogous raw material and that do not contribute to the value of the partially reclaimed material when used for its intended purpose.

As explained in the proposal, EPA conducted an analysis comparing levels of the inorganic constituents and cyanide in the processed concentrates that WRC sells with levels of constituents in virgin ore concentrates. EPA found that, with the exception of cyanide, the levels of constituents in WRC's concentrates are generally comparable to the levels of constituents found in concentrates made from virgin ores. Also, EPA considered data showing that toxic organic constituents are not likely to be prevalent or present in more than trace amounts in F006 being recycled (see EPA's Metal Finishing F006 Benchmark Study, September 1998, p. 23, and letter (with attachment) from D. Daniel Chandler of Browning, Kaleczyc, Berry and Hoven to Paul Borst, USEPA, June 2, 1993)). To make WRC's concentrate more commodity like, EPA decided to limit the levels of cyanide that could be allowed.

The 590 ppm total cyanide limit that we proposed is the current Universal Treatment Standard (UTS) for land disposal at 40 CFR §268.48 for total cyanide in hazardous wastes that are land disposed. This limit currently applies to any WRC concentrate that is stored on the land before smelting. In response to requests for clarification from two commenters, we are today stating that the limit refers to total cyanide, and we are adding the test method specified in 40 CFR 268.48.

Some commenters did not believe that the limit set for cyanide in WRC's concentrate should be 590 ppm. One commenter argued that EPA should limit cyanides to the amount 6 present in analogous "virgin" sources of metals. Another argued that the cyanide limit should be risk based, and asserted that EPA's assessment of risks did not ensure protection of human health and the environment.

This criterion is intended to help EPA distinguish materials that are waste like from materials that are commodity like. Where EPA finds a constituent at higher levels in the partially reclaimed, waste derived material, it does not have to conduct a risk assessment and impose a condition based on limiting risks to human health and the environment (as demonstrated through some type of risk assessment). Rather, EPA need only ensure that the constituent levels are commodity like.

Limiting constituent levels in the partially reclaimed material to levels in analogous virgin raw materials, as one commenter suggested, is an acceptable way to accomplish this. It is not, however, the only way. In this case, the analogous raw materials appear to have extremely low levels of cyanide. EPA is concerned that WRC might not be able to reduce cyanide levels in electroplating sludges to this level. EPA, however, is confident that WRC can meet the land disposal restriction level for cyanide, which currently applies while WRC's concentrates are classified as hazardous wastes. As previously stated, WRC makes strong showings for the second and fourth criteria of the variance, causing EPA to conclude that its concentrates are commoditylike Under these circumstances, EPA finds the 590 ppm limit to be sufficient to ensure that WRC's concentrates are more commodity like than waste like.

In spite of the fact that it was not legally required, EPA conducted a screening analysis to determine whether land storage of concentrates with cyanides at this level would pose ground water risks. The analysis suggested that cyanide concentration would not exceed the federal drinking water standard for cyanide at a downgradient drinking water well if cyanide underwent hydrolysis. The screening analyis did show some potential for risk if cyanide did not hydrolize. One commenter challenged EPA's assumption that hydrolysis was likely to occur. The Agency made this assumption because the scientific literature shows that cyanide is often amenable to that process, since it tends to break down or dissociate if it comes in contact with water (see Kollig P. Heinz et. al, Environmental Fate Constants for Organic Chemicals Under Consideration for EPA's Hazardous Waste Identification Projects, Office of Research and Development, USEPA).

Moreover, the screening analysis is likely to overestimate risks for several reasons. EPA conducted the screening assuming 200 to 300 metric tons of electroplating sludge stored outdoors, even though such sludge is usually stored indoors, with reduced likelihood of releases to groundwater, and even though volumes of concentrate at a single smelter at any one time are likely to be smaller. In addition, information available to the Agency indicate that WRC's metal concentrate is unlikely to remain in storage at a smelter for a long period of time. First, the cost and efficiency of the smelting process itself are negatively affected by water content; therefore, any stored materials are used as soon as possible to avoid inadvertent moistening by rainfall. Second, under the purchasing agreement, the smelter must pay WRC by a specified time after the concentrate is received, often before the material is fully unloaded. This practice would lead the smelter to assume the risk of metal price changes if the material is not used promptly. Consequently, it is difficult to conclude that the concentrates would pose unacceptable ground water risk even if hydrolysis occurred slowly or did not occur at all. 7 The Agency also notes that the other conditions of this variance will protect against air inhalation risks from cyanide. For example, a Material Safety Data Sheet must accompany the concentrate with a notification that the concentrate may contain up to 590 ppm cyanide and that low pH environments can result in the production of hydrogen cyanide gas. Moreover, Department of Transportation regulations for hazardous materials will continue to apply to WRC's processed concentrates even after the RCRA exemption takes effect. In addition, the Agency notes that WRC is not seeking a variance for its own operations. Hazardous waste regulations will continue to apply to processed concentrates held at WRC's facility One commenter questioned the validity of EPA's assessment of groundwater risks for cyanide, noting that EPA decided not to propose an "exit" level for hazardous wastes containing cyanide in the proposed hazardous waste identification rule (HWIR) due to technical concerns with predicting the fate of cyanide in the environment. However, for this variance EPA did not need to conduct a risk assessment. Moreover, the technical difficulties are less important in a simple groundwater screening analysis than in the complex, multipathway analysis conducted for the HWIR rule.

Another commenter suggested that EPA should set a toxic along for the ride limit for the cyanide in incoming sludges to WRC's facility, so that WRC would not be able to dilute high incoming cyanide concentrations to achieve specified concentration levels in the outgoing concentrate.

RCRA regulations do not prohibit dilution during reclamation. While dilution is impermissible in the LDR program to avoid a treatment standard (see 40 CFR Part 268.3 generally), dilution is permissible when done to facilitate treatment (i. e, adding cement to stabilize waste). The type of dilution that may occur at WRC in drying and blending is analogous to that which takes place to facilitate treatment, since drying and blending makes metal concentrates smelter ready and amenable for high temperature metal recovery. Whatever cyanide dilution takes place in WRC's blending process is incidental to the main purpose of the blending, which is to ensure that the concentrates contain sufficient metal content to assure high process efficiency and limit contaminant concentrations of tramp constituents that may interfere with the smelting process.

One commenter thought the limit for total organic hazardous constituents, including cyanides, should be 500 ppm, apparently because other organic hazardous constituents may be present in sludges received by WRC and because this value is the cutoff point for determining whether a smelter is burning solely for metal recovery, and thus eligible for an exemption to the current permitting rules for boilers and industrial furnaces (BIFs) (see CFR 266.100( c)( 2)( i)). Another commenter believed that even the 500 ppm limit was not sufficiently protective, because it could create health risks if burning were conducted improperly, and the limit was not intended for use in a delisting or a variance.

EPA established a 500 ppm limit for total organic constituents in secondary materials burned at smelters to distinguish smelters engaged in metals recovery from smelters engaged in the treatment of hazardous organic constituents. The limit is not risk based. Moreover, as stated earlier, EPA is not required to ensure that the concentrate will pose low risks before granting the 8 variance. However, EPA has also found that unprocessed electoplating sludges typically contain very low levels of organics (except cyanide) that are well below the cutoff point for smelter metals recovery (see EPA's Metal Finishing F006 Benchmark Study, September 1998, p. 23, and letter (with attachment) from D. Daniel Chandler of Browning, Kaleczyc, Berry and Hoven to Paul Borst, USEPA, June 2, 1993)). EPA is imposing a limit for cyanide.

Two commenters stated that EPA should evaluate risks presented by all toxic constituents potentially present in the waste, just as it does when considering delisting requests. One of these commenters suggested that EPA should set a "toxics along for the ride" threshold level for each toxic constituent in each incoming load of sludge that WRC receives, and that any level set for toxic constituents, including cyanide, should be risk based rather than technology based.

In response, EPA notes that we found no need for limits on any other constituents to demonstrate that the processed concentrates are commodity like. The relevant test is the degree to which the concentrate resembles analogous raw materials. To determine whether WRC's concentrate is similar to analogous raw materials, we compared its inorganic constituents to inorganic constituents found in primary copper and nickel concentrates. We concluded that cyanide was the sole hazardous constituent that was not present in the analogous raw material that did not contribute to the value of the WRC concentrate when sent for metals recovery. Moreover, with the exception of cyanide, the Agency concluded that the Appendix VIII metals typically contained in WRC's concentrate are similar to those found in virgin ore concentrates. In addition, we note that commercial contracts under which smelters purchase WRC's concentrate typically specify limits on several such metals (such as lead or chromium) to ensure that levels do not interfere with the extraction process. As noted above, we also found that organic constituents are not found in significant amounts in unprocessed electroplating sludges. Therefore, EPA does not need to set limits for other constituents, either to ensure that WRC's concentrates are commodity like or to ensure that WRC does not engage in sham recycling.

Some commenters suggested that EPA should place limits on Appendix VIII metals in incoming sludges at the WRC facility, at least for those metals in high concentrations that are not recovered and have no "ore equivalency" levels, such as chromium, cadmium or zinc. One commenter argued that recoverable metals could also be toxics along for the ride if the receiving smelter does not in fact recover all of them.

The Agency does not believe that such a limitation is necessary to ensure that WRC's concentrates resemble virgin ores. We did not find metals that are not present in virgin ores. We note that there are Appendix VIII metals at high concentrations in the analogous primary copper and nickel concentrates which are not recovered. Arsenic levels in primary copper concentrates are often present in levels as high as 3000 ppm and are not recovered. D. Extent To Which End Market is Guaranteed Under the fourth evaluation criterion (40 CFR 260.31( c)( 4)), petitioners must demonstrate that an end market for the partially reclaimed material is guaranteed. Petitioners must demonstrate that there is a secure demand and long term market for the partially reclaimed material and that the chance of large quantities of the material being stockpiled due to insufficient demand is unlikely. If a petitioner cannot demonstrate that the material enjoys a consistent level of demand, with reasonable expectations for the same or greater level of demand once a variance 9 is granted, there may be risk of the material being stockpiled or stored for a significant period of time in containers or other storage units that do not have to meet RCRA Subtitle C storage standards. Such situations may pose significant risks to human health or the environment.

In the proposal, EPA found that WRC demonstrated that it has multi year contracts for the sale of its processed concentrates with at least four smelters, and that these smelters have excess capacity exceeding WRC's production capabilities. The record also shows that the smelters have been customers for significant periods of time; contracts with one smelter extend back to the 1970's. Even the most recent customers have had contracts since the middle 1990's. At the same time, however, to help ensure that concentrates meet their end market, EPA proposed to require that WRC ship concentrates only to metal smelting facilities, that WRC comply with DOT regulations regarding shipments of hazardous materials, and that WRC document that all shipments reached their designated destination. To assist in ensuring compliance with these shipping conditions, EPA also proposed to require WRC to provide an annual audit to the Arizona Department of Environmental Quality (ADEQ). The annual audit, conducted by an independent third party, must certify that all shipments of WRC's partially reclaimed concentrate were made to metal smelting facilities, were documented and shipped in accordance with all applicable U. S. Department of Transportation regulations, and were documented to have reached the designated destination. EPA is retaining these conditions for the final variance.

One commenter thought that there was insufficient information in the proposal and in EPA's supporting analyses to fully evaluate the underlying economics of WRC's business. This commenter suggested that at a minimum (emphasis supplied in the original comments) EPA should conduct an analysis covering the entire 17 years of WRC's operations, reviewing all contracts over this time period, the primary and secondary metals market over the same period, and any other regulatory or enforcement actions EPA or authorized states have taken with respect to F006 and F019 recycling, including all prior interpretations of the legitimacy of F006 and F019 recycling activities. In particular, the commenter stated that EPA should analyze WRC's 17 year history to determine if there had ever been a period when metals prices were so low that the concentrate could not be sold. This commenter also felt that EPA's position was weakened by the fact that WRC has contracts with foreign smelters. Another commenter expressed similar concerns about fluctuations in metal prices, fearing bankruptcies, abandonments, and "stockpiling" when minerals become less valuable.

In response, EPA notes that the considerable amount of data submitted by WRC and available to the Agency from other sources have provided an accurate view of the nature of F006 recycling in general and of WRC's operations in particular. This information has been sufficient to allow the Agency to evaluate whether WRC's concentrate meets the regulatory criteria of 40 CFR §260.31( c). The Agency also believes that the existence of past fluctuations in commodity prices should not be a decisive or even strong consideration in evaluating variance applications under 40 CFR §260.30( c), especially since price fluctuations for these materials tend to be the rule rather than the exception. In addition, as noted above, WRC has numerous multi year, longterm contracts in place, indicating that WRC's processed sludges remain valuable to smelters over time, even with changes in the values of the metals they contain. 10 Moreover, we note that the variance does not apply to materials held at WRC prior to shipment. Storage there must comply with Subtitle C requirements. These requirements adequately address threats posed by materials "stockpiled" at WRC. With regard to the risks that a smelter might accept a shipment, but stockpile it at the smelting facility during a "down" market, we note that these materials are blended to specific smelter specifications, and smelters pay to receive them (often before the materials are processed). It therefore seems more likely that smelters will use them rather than store them for extended periods of time. These considerations are true for both domestic and foreign smelters.

The Agency notes that in the proposal, the introductory paragraph to the variance language included a reference to metal concentrate sold to "smelters or other metal recovery facilities", although the proposed numbered variance conditions referred only to "smelters" (see 64 FR 68968 at 68972). Today's final notice limits the variance to WRC's metal concentrate that is sold to smelters, since the available data submitted in support of the variance concerns sales to smelters rather than to other kinds of facilities.

One commenter opposed the requirement for an independent annual audit as an unnecessary expense and believed a statement signed by WRC would suffice. Two commenters believed that the audit should contain additional requirements, such as recordkeeping and evaluations of the management of WRC's concentrate at smelters, and one commenter suggested an audit every four months during the first two years. Some commenters were concerned that an independent audit would replace the role of a regulatory agency inspection.

In response to these comments, EPA notes that the conditions of all variances under 40 CFR 260.30 are site specific in nature. This audit was proposed as a mutual agreement between ADEQ and WRC to satisfy both parties' concerns about compliance with the terms of the variance. An independent annual audit ensures an objective review of the company's operations, and provides information on how the material is handled after partial reclamation. However, the fact that an audit is required as a condition of this variance does not mean that similar audits would be considered appropriate for all such variances. The Agency does not believe that the additional requirements for increased recordkeeping, evaluation at smelters, and more frequent review suggested by some commenters are necessary to help regulators determine whether WRC has complied with these variance conditions. EPA also notes that nothing in this variance would legally affect or preclude inspections or review of WRC's operations by the regulatory authority. The State or EPA Region can conduct the number of inspections and reviews it believes necessary to ascertain compliance with conditions of the variance, as well as compliance with other RCRA requirements applicable to the facility.

E. Handling to Minimize Loss The fifth evaluation criterion (40 CFR 260.31( c)( 5)) concerns the extent to which the partially reclaimed material is handled to minimize loss. Petitioners must demonstrate that the material is handled as if it were a valuable commodity and in a manner that is protective of human health and the environment. 11 In the proposal, EPA stated that the value of the concentrates and the contracts between WRC and both generators and smelters provide incentives for WRC to manage both the unprocessed sludges and the processed concentrates to prevent loss. EPA also noted that the processed concentrates will remain subject to Subtitle C storage regulations while held at WRC prior to shipment, because the variance will not take effect until the concentrates are loaded for shipment. Even after the RCRA variance takes effect, the concentrates will remain subject to DOT regulations for hazardous substances during shipment to smelters. The smelters' payments for the concentrates show that the smelters value them and have incentives to manage them carefully. The custom blending for each shipment also makes it more likely that smelters will value the concentrates and handle them appropriately.

EPA, however, also proposed to impose a condition that prohibits land placement of WRC's concentrates because land storage has a high potential for loss, and because EPA does not believe that analogous concentrates derived from virgin materials are stored on the land. EPA also proposed to ensure that smelters received notice of this limitation by requiring WRC to restate the condition in all contracts with smelters. In our proposal, EPA described this limit in its discussion of the third criterion, the extent to which constituents in the partially reclaimed material resemble constituents in the analogous raw material. EPA is clarifying here that we are imposing this condition to ensure that WRC's customers handle the exempt material in a manner that will minimize loss.

One commenter claimed that WRC's assertions that smelters handle concentrates to minimize loss are not a sufficient basis for EPA to make a conclusion about smelters' operations. EPA, however, is not basing its finding on this criterion on these assertions. Rather, EPA has independently evaluated the factors that would influence smelters' handling of these materials, and concluded that the smelter payments, WRC's custom blending activities, and the risks to the smelters from prolonged storage make it likely that smelters will minimize losses. Moreover, the Agency is imposing a condition which provides that concentrates stored on the land will not be excluded under the variance.

One commenter suggested that contracts between WRC and smelters could not be directly enforced by WRC, and that the Agency should therefore condition the variance on enforcement agreements between the smelters and ADEQ. EPA does not agree that enforcement agreements of the type suggested by the commenter are necessary to prevent land storage at smelters. The variance clearly makes land storage a violation of the variance conditions. Concentrates stored on the land would not be excluded from the definition of solid waste, and EPA and the State could take enforcement action if the storage did not comply with all applicable Subtitle C requirements. This commenter also suggested that EPA should promulgate a rule establishing management conditions at all metal recyclers and smelters. However, such a rule would far exceed the scope of our variance proposal.

F. Additional factors In addition to the five evaluation factors discussed above, EPA may consider other relevant factors in determining whether or not to grant a variance from the definition of solid waste for materials that have been reclaimed but must be reclaimed further before recovery is 12 complete (40 CFR 260.31( c)( 6)). These other factors may be raised by the petitioner, the Agency, or other interested parties. Such factors may be directly applicable to EPA's decision to grant a variance, or may be indirectly applicable, but relevant in assigning priorities for evaluating a particular petition.

1. Minimum Metals Content for Incoming Sludges In the proposal, EPA considered the possibility that WRC could engage in "sham recycling" by blending electroplating sludges with low metal concentrations into sludges with higher concentrations, and marketing the blended "product" to smelters. EPA was concerned that WRC's processing would be a form of treatment for sludges which would ultimately be disposed of in smelter wastes, without contributing any significant metal content to smelter products. To ensure that WRC would be engaged in legitimate recycling, the Agency proposed to require each incoming sludge to have a minimum content of either two percent of copper, nickel or tin (on a dry weight basis), or a precious metal content with monetary value equivalent to the copper, nickel or tin value.

One commenter stated that no non conforming shipments should be allowed, since this would be contrary to EPA's policy at other hazardous waste treatment, storage, and disposal facilities (TSDFs). In response, the Agency notes that our proposal to allow a certain number of non conforming shipments does not affect the status of the incoming material as a hazardous waste. Such shipments would still be subject to all applicable Subtitle C requirements, as is the case with all other TSDFs. We are allowing WRC to accept a minimum number of shipments below the normal minimum metal content which will still be eligible for the variance because, as a practical matter, some shipments from generators will (albeit very infrequently) contain less than the desired metal content, and there is a possibility that this may not be discovered until processing of the shipment has begun.

Some commenters questioned the use of a two percent dry weight limit for copper, nickel, or tin. One commenter stated that EPA should provide a broader discussion of the data which it used to require that the minimum copper, nickel, or tin content of a sludge arriving at WRC must be two percent dry weight in order for the dewatered sludge to be equivalent in quality to virgin ore feedstocks. This commenter appeared to believe that the levels of both base and precious metals in the incoming sludges should be the same as the levels found in virgin ore feedstocks sent to smelters.

For example, this commenter questioned why economic value was used to determine equivalency of precious metals with base metals in incoming sludges, rather than expected virgin ore quality with respect to precious metals. The commenter stated that the value of gold per unit weight is approximately 5, 000 times that of copper (based on current market prices). Therefore, the current economic equivalent of two percent copper (about 20,000 ppm) would be about 4 ppm gold, or about 0.09 troy ounce per ton. The commenter expressed doubt that ores containing such a low concentration of gold would be mined and smelted commercially. The commenter appeared to be suggesting that the required threshold level of precious metals in the incoming sludges be the same as the levels of such metals that smelters will accept in virgin ores. Two commenters stated that concentrate shipped by WRC to smelters can contain a 13 significant moisture content (up to 50%). Therefore, according to these commenters, if the metal concentration in the incoming sludges were two percent on a dry weight basis, the actual concentration as shipped to the smelter would be below two percent. If feedstock equivalency required a copper concentration of at least 2. 5 percent, the dry weight concentration in the sludge that WRC received would need to be at least four percent copper.

In response to this comment, EPA notes that we did not intend to require incoming sludges at the WRC facility to be equivalent to virgin ore feedstocks with respect to metal content. The purpose of this proposed requirement was to establish a minimum metal threshold below which little recovery of metals would occur. After reviewing available literature and discussing this issue with smelter representatives, the Agency concluded that the two percent limit appears to be a "smelter cutoff," meaning the lowest concentration of metal that a given smelter will allow through the gate on a dry weight basis (see memorandum from Paul Borst titled "Analysis of Minimum Metal Content of Secondary Feedstocks Destined for Primary Smelting Operations in North America," May 7, 1999).

The minimum metal content ensures that at least one smelter in North America would be able to receive and process all incoming sludges to the WRC facility. This condition on the variance ensures that secondary materials which have little or no recoverable metal may not be blended in with metal bearing secondary materials with higher metal content. The condition therefore prevents surrogate treatment and disposal of the secondary materials with little or no recoverable metal content. It is not necessary to require WRC's concentrates to contain as much metal as virgin ore concentrates. Similarly, with respect to the reduction of moisture content, even if significant moisture reduction of the incoming sludges occurs, WRC is still responsible for meeting the minimum metal content on a dry weight basis required under contract specifications for particular smelters. In addition, we note that moisture reduction tends to concentrate metals levels, rather than dilute them, as the commenter implied. It is therefore unnecessary to require higher metals levels in the incoming sludges to account for moisture reduction.

Similarly, EPA is not aware of any smelters that refuse to give credit for precious metals in secondary materials when their concentrations are lower than those considered acceptable for virgin ores, so long as the monetary values are equivalent. The Agency believes that it is reasonable to base minimum metal levels in the incoming sludges on smelter acceptance and pricing policies.

Another commenter said that EPA's choice of a two percent minimum metal content level for incoming sludges or an equivalent value in precious metals to assure the "legitimacy" of WRC's operation is based on faulty and incomplete analysis. This commenter suggested that the required minimum metal content should account for transportation and storage costs incurred by smelters receiving WRC concentrate, as well as WRC's processing costs. The commenter also stated that the highest rather than the lowest smelter cutoff should be used in determining legitimate recovery of metals from incoming material to WRC.

EPA does not agree that the highest smelter cutoff (i. e., the most stringent metal limit required by any smelter) is an appropriate number for the incoming limit on metals in the sludges. If other smelters are purchasing materials with lower metal concentrations and reclaiming metals 14 from these materials, there appears no reason to conclude that this is not legitimate reclamation. Nor does the Agency agree that transportation and storage costs should affect which level of metals allows legitimate recycling to occur.

Two commenters questioned how WRC would segregate its incoming loads into: (1) sludges containing the required minimum levels of recoverable metals, and (2) sludges with lower levels of metals. EPA notes that the conditions of the variance do not absolutely prohibit WRC from receiving sludges with lower metal concentrations than those specified in the variance. However, listed sludges used in producing the concentrate that is eligible for the variance must conform to the minimum metals limit (except for two non conforming loads). Sludges not used for this purpose need not contain minimum levels of metals. The Agency does not believe it is necessary to specify in the variance a particular method for segregating the two types of sludges. EPA notes that many facilities manage different wastestreams, some of which are regulated under RCRA and some of which are excluded. For purposes of retaining the regulatory exclusion, it often may be important to segregate wastestreams. However, EPA does not specify in its regulations a particular procedure for conducting such segregation.

Another commenter feared that waste streams containing recyclable levels of one metal could be diluted down to non recyclable levels when mixed with waste streams containing other metals. This commenter proposed an additional condition for the WRC variance that would be implemented according to the following example. The company receives a sludge that has three percent copper and five percent nickel, so that the sludge is above the two percent minimum metal threshold for both metals. Hypothetically, the company makes a business decision to blend this sludge with other nickel bearing sludges and ship the blended mixture to a nickel smelter for reclamation. The commenter is concerned that the copper in the original incoming shipment has been diluted below two percent and is non recoverable at the nickel smelter. The commenter believes that this procedure would constitute sham recycling. The condition that the commenter proposed would require that a nickel/ copper bearing sludge be only blended with other nickel/ copper bearing sludges and that the blend only be destined to a smelter or other recycling facility where both metals are recovered.

EPA does not agree that recovering nickel values would constitute sham recycling merely because the copper in the sludge could be diluted and possibly not recovered. WRC's processing would make the concentrate marketable by increasing the nickel value. Without WRC's drying, blending, and consolidating operations, the electroplating sludge most likely would not go to a smelter for recovery for either copper or nickel. So long as WRC increased the concentration for one metal, EPA does not think the fact that it diluted a second metal shows that recycling is not legitimate. Moreover, EPA believes that many virgin ores contain multiple metals that smelters do not extract.

2. Exports and Imports One commenter noted that changing the regulatory status of the partially reclaimed material removes RCRA import and export requirements, thus taking away a safeguard designed to put foreign governments on notice that these materials are hazardous. This commenter suggested that if EPA grants the variance, it should continue to require compliance with these 15 requirements. The same commenter was concerned that because WRC's facility is one of the top ten receivers of hazardous waste from Mexico, the granting of the variance may increase the flow of waste across the border, increasing the transportation risks inherent in long distance transport. The commenter believed that the variance could inadvertently discourage the development of much needed hazardous waste disposal and recycling facilities in Mexico by creating an incentive for shipping exempted waste from Mexico into the US. Finally, the commenter stated that EPA should evaluate whether waste shipments from Mexico are compatible with Mexican and other applicable international or bilateral agreements concerning these wastes.

The Agency believes that the conditions of this variance are adequate to provide notice to foreign governments. The variance contains a requirement that WRC must send a one time notification of the variance and its conditions to any country where metal smelters accepting WRC concentrates are located. WRC is also required to submit a Material Safety Data Sheet shipped with the concentrate and a notification that the concentrate may contain up to 590 ppm cyanide and that low pH environments can result in the production of hydrogen cyanide gas. EPA believes that this is sufficient notice to inform foreign governments of the nature of WRC's concentrate, and of the Agency's decision to exclude WRC's concentrate from the definition of solid waste. In addition, the Agency believes that the RCRA notification and consent requirements for imports and exports of hazardous waste are not necessary for materials that have been determined to resemble commodities more than wastes. We note that these requirements do not apply to any materials that are excluded from the definition of solid waste.

With respect to imports from Mexico, EPA believes that the commenter's concerns are speculative. The commenter gives no data or detailed theory to back up its concern that shipments from Mexico will increase or that Mexico will fail to develop needed waste management capacity. The status under RCRA of shipments of F006 imported from Mexico will not be affected by this variance. In addition, even though the Agency believes that RCRA export requirements should not apply to commodity like materials, we note that this variance does not automatically affect the status of WRC's concentrate under foreign jurisdictions. If the concentrate is classified as a hazardous waste in a foreign jurisdiction, it would retain that status unless the appropriate regulatory authority in that jurisdiction decided to change the classification G. Other Issues Raised By Commenters 1. Effect of the Variance in Other States One commenter asked about the effect of the variance in states which WRC's concentrate would have to pass through in order to reach a smelter. In response, we note that this variance is a variance from the federal definition of solid waste. States with authorized programs may sometimes have more stringent requirements than the federal requirements under RCRA. This variance therefore would not relieve WRC from the obligation to consult with "pass through" states to ascertain their requirements with respect to manifesting.

2. WRC Compliance History/ Permitting 16 One commenter stated that WRC has a poor compliance history, and that there is little reason to believe in the facility's future compliance with any conditions in the exemption. This commenter also was concerned that WRC has not bermed its Arizona facility, and has had at least one washout due to heavy rains. The commenter believed that EPA should wait until the TSD permitting process was complete before finalizing the proposed variance. This would ensure that a waste analysis plan is in place, that each incoming load is checked and nonconforming shipments are rejected. The permit would also allow public participation with regard to the management of the materials to minimize loss.

In response, the Agency notes that WRC's compliance with all environmental regulations has always been closely monitored by EPA and ADEQ. We have confidence that this oversight will continue after the variance is granted. All operations at WRC's Phoenix facility are governed by a Consent Agreement and Consent Order (CA/ CO) executed by EPA Region 1X, WRC, and ADEQ (see In the Matter of World Resources Company, EPA ID No. AZD980735500, United States Environmental Protection Agency, Region IX, September 3, 1996). The CA/ CO includes a requirement to submit an application for a treatment and storage permit to ADEQ. Issuance of the permit will allow full public participation with respect to the management of the facility under RCRA. In the meantime, the CA/ CO requires compliance with section R18 8 265 of the Arizona Administrative Code, which incorporates the requirements of 40 CFR Part 265. In addition, although not directly relevant to RCRA compliance, the facility operates under a Groundwater Quality Protection Permit issued by ADEQ and an air quality permit issued by Maricopa County, Arizona. EPA believes that these requirements are adequate to protect human health and the environment until a treatment and storage permit is issued.

3. Enforcement of the Variance Conditions One commenter stated that EPA did not provide enforcement options in the record when a condition of the variance is violated. This commenter said that in order for the conditions to be meaningful, it must be clearly stated and understood that if a condition is violated, the waste will lose its exemption status and thus all hazardous waste requirements will apply to the materials and all responsible parties will be found in violation of both the exemption and the applicable standards of RCRA.

In response, the Agency notes that if any of the variance conditions are violated, appropriate remedies will be decided by the regulatory authorities, as is the case with all violations of conditions for exclusions from the definition of solid or hazardous waste.

4. CBI Issues One commenter claimed that important information was withheld from the public because WRC claimed that it was confidential business information. Under 40 CFR part 2, EPA must protect such information from disclosure unless it determines that the information is not in fact entitled to protection or, under RCRA, unless it determines that its release is necessary to a proceeding. The commenter first argued that variance seekers should never be entitled to claim CBI for data submitted to support claims for variance. This commenter viewed a variance is as a privilege; therefore variance seekers are required to share all relevant data with the public. 17 EPA does not agree that variance seekers must reveal business secrets to competitors. EPA's CBI rules in 40 CFR part 2 do not prohibit CBI claims in data submitted to support a variance. Nor do EPA's requirements for partially reclaimed variances in 40 CFR part 260 inform applicants that they may not claim CBI protection for information submitted to support a variance. EPA may use discretion to determine whether commenters actually need to see an applicant's data. In this case, as explained below, EPA decided that public review of the data that WRC claimed as CBI was not necessary. Therefore, EPA withheld it it. EPA did not need to determine whether the data were in fact CBI.

The commenter also claims that withholding data claimed as CBI makes it impossible for it to evaluate the basis for EPA's findings for three of variance criteria. EPA disagrees, as explained below.

i) Second variance criterion  value of material after it has been reclaimed.

EPA agrees with the commenter that the relevant test is the market value of material before and after WRC processes it. The commenter claims that the record does not show that EPA looked at this factor. However, EPA did perform this comparison. The preamble to proposal states that "the Agency notes that WRC's concentrate has considerably higher value than `as generated' F006 sludges." Non CBI record materials show that electroplaters pay WRC to take their unprocessed sludges, while WRC sells the processed sludges. Only the dollar amounts have been withheld. See, e. g. WRC petition, non CBI version, p. A 2. The commenter does not need to see the actual dollar figures removed from this page, or the extrapolated data from actual contracts that EPA examined to corroborate WRC's petition.

The commenter also claims that EPA must compare the costs and revenues associated with electroplaters who send sludges directly to smelters with the costs and revenues associated with WRC's business. EPA disagrees. Whether WRC makes more money or less money than an electroplater who manages to sell sludge to a smelter is irrelevant. What matters is whether WRC increases the value of the material that it receives. Moreover, EPA did make a non quantitative comparison of the two types of operations. EPA found that "many smelters are reluctant" to take F006 sludges directly from electroplating operations (see Pollution Prevention and Control Technology for Plating Operations, George C. Cushnie, Jr., 1994). In contrast, EPA found that WRC has stable, long term sales relationships with its "customer" smelters. Data in Table 4 1 in WRC's application, indicate that contracts have been in place with one smelter since the 1970's and that the newest have been in place since the mid 1990's. This data is available to the public. Moreover, EPA found that WRC has "multi year" contracts with these smelters (although it withheld the precise number of years involved). These factors indicate that WRC's drying and blending activities, plus its larger shipments, make the processed sludges more valuable to smelters than unprocessed sludges. The commenter does not need to see WRC's contracts to evaluate these findings, as they involve no exercise of discretion on EPA's part, and there would be no additional value to notice and comment on this issue.

ii). Fourth criterion  guaranteed end market 18 The commenter expresses concern that mineral markets are volatile, with occasional bankruptcies and abandonments. They fear that materials processed by WRC will end up "stockpiled" when the minerals they contain become less valuable.

EPA does not understand how examination of the material withheld as CBI would improve the commenter's ability to address this issue. If a smelter is financially unstable, a contract with WRC would not be likely to significantly improve stability. If the commenter is really arguing that EPA should not grant a variance to a secondary material where the market for that material is volatile, EPA disagrees (although the Agency might in an extreme case use variability in value as an indicator that a recycling process is a "sham").

In addition, as noted above, EPA found that WRC's contracts were "long term" and "multi year." The non CBI petition shows that all of the current contracts have been in place since at least 1993, which indicates that WRC's processed sludges remain valuable to smelters over time, even with changes in the value of the metals that they contain. The commenter need not review individual contracts to confirm this.

Even more importantly, materials held at WRC's facility will not be covered by the variance. Instead, Subtitle C requirements continue to apply even to processed sludges stored at WRC prior to loading for shipment. This protects human health and the environment if WRC closes, or if processed material is still at WRC when a smelter closes. It is true that materials sent to smelters could be stored at those smelters without Subtitle C controls. However, WRC blends these materials to specific smelter specifications and smelters pay to obtain them; smelters also run risks of deterioration due to moisture or unanticipated changes in metals prices if the materials are not processed quickly. Hence it is more likely that smelters will use them quickly than store them for long periods of time.

iii) Fifth criterion  handled to minimize loss EPA has looked at the dollar value of the materials WRC sells to smelters. It shared with the public WRC's statement that it receives payments from the smelters, with only the actual dollar values masked. EPA does not agree that the commenter needs to see the actual dollar amounts to comment on this issue. EPA does not have a rule or policy establishing a specific threshold value that sales must meet. Moreover, EPA notes that publicly available data submitted by WRC indicates that the value of the processed material is not trivial. The total value of recovered metals contained in shipments made during 18 months in 1994 and 1995 was $3,051,851. (WRC variance application at 2 2). The commenter's concerns might have more merit if EPA was basing its findings on this criterion on dollar value alone. However, in this proceeding EPA has also examined the manner in which WRC, transporters and smelters actually handle the sludges.

At WRC, both unprocessed sludges and processed sludges remain subject to Subtitle C controls. These ensure that the materials will be handled carefully to prevent loss. Processed sludges become exempt only when WRC loads them on a transport vehicle. Prior to transport, loading of all the concentrate is performed by trained employees. Trucks and rail cars are only loaded if they are "sift proof" and in "good repair" under DOT regulations. Once loaded, they 19 are tarped to prevent losses during transit. DOT regulations for hazardous substances continue to apply to transportation, ensuring that the processed sludges will be handled carefully during transportation. All of the information regarding handling at WRC and during transportation is in the non CBI record. Moreover, to encourage smelters to handle these materials carefully, EPA is requiring WRC to place a clause in each contract with a smelter which indicates that the smelter agrees not to store the materials on the land.

5. Five Year Limit In its December 9, 1999 proposal, the Agency had proposed limiting the variance to five years. One commenter requested an explanation for this limitation. EPA proposed the limit because the variance would be the first one granted to this company, and a five year limit would require the regulatory authority to evaluate the effectiveness and appropriateness of the variance and, if appropriate, propose and take final agency action to renew it. At this time, EPA also could terminate the variance or change the conditions of the variance if appropriate. However, EPA has reconsidered this proposed limit and decided not to finalize it as proposed. EPA has the discretion to terminate the variance at any time if its conditions are violated, or if changed circumstances render the variance unnecessary or inappropriate. Therefore, it is not necessary to require EPA to conduct an evaluation after five years and to take new administrative action if it wishes to allow the variance to continue.


Contributions to PM2.5 Nonattainment from SO2 and NOx Emissions in Delaware and New Jersey, Combined Below is a table listing the combined contribution of emissions of SO2 and NOx from Delaware and New Jersey to annual average PM2.5 concentrations in projected 2010 nonattainment counties in other States within the Eastern United States. EPA determined the PM2.5 contributions listed in this table by applying the same " zero out" modeling technique used in the CAIR rule to the projected 2010 Base Case SO2 and NOx emissions from New Jersey and Delaware. The rationale for evaluating the contributions from Delaware and New Jersey using the combined SO2 and NOx emissions in both States is described in the proposed rule entitled, " Inclusion of Delaware and New Jersey in the Clean Air Act Interstate Rule" ( 70 FR 25408, May 12, 2005). Details on the PM2.5 modeling platform, zero out modeling technique, and procedures for calculating interstate contributions are provided in the report " Technical Support Document for the Final Clean Air Interstate Rule  Air Quality Modeling," March 2005 ( Docket Number OAR 2003 0053 2151). The 2010 Base Case emissions in Delaware and New Jersey and the procedures for calculating these emissions can be found in the report " Clean Air Interstate Rule Emissions Inventory Technical Support Document," March 2005 ( Docket number OAR 2003 0053 2047).

The table shows that the combined contribution of emissions of SO2 and NOx from Delaware and New Jersey to annual average 1 There are three counties in Pennsylvania for which the Delaware New Jersey contributions are projected to be close to the 0.2

g/ m3 air quality factor level. These are Lancaster and Philadelphia Counties ( at 0.18

g/ m3), and Delaware County ( at 0.19

g/ m3). PM2.5 concentrations in New York County, New York is projected to be 0.23

g/ m3, which is above the 0.2

g/ m3 used in the CAIR as the air quality factor for assessing significance of contribution to downwind States' nonattainment1. 70 FR at 25173.

Table 1. Contributions from SO2 and NOx emissions in Delaware and New Jersey to annual average PM2.5 in projected 2010 nonattainment counties in other States within the Eastern United States.

Downwind Nonattainment Counties PM2.5 Contributions from DE + NJ (

g/ m3) State County Alabama Jefferson Co < 0.05 Alabama Russell Co < 0.05 District of Columbia District of Columbia 0.09 Georgia Bibb Co < 0.05 Georgia Clarke Co < 0.05 Georgia Clayton Co < 0.05 Georgia Cobb Co < 0.05 Georgia DeKalb Co < 0.05 Georgia Floyd Co < 0.05 Georgia Fulton Co < 0.05 Georgia Walker Co < 0.05 Illinois Cook Co < 0.05 Illinois Madison Co < 0.05 Illinois St. Clair Co < 0.05 Indiana Clark Co < 0.05 Indiana Dubois Co < 0.05 Indiana Lake Co < 0.05 Indiana Marion Co < 0.05 Indiana Vanderburgh Co < 0.05 Kentucky Fayette Co < 0.05 Kentucky Jefferson Co < 0.05 Maryland Anne Arundel Co 0.12 Downwind Nonattainment Counties PM2.5 Contributions from DE + NJ (

g/ m3) State County Maryland Baltimore City 0.13 Michigan Wayne Co < 0.05 New York New York Co 0.23 North Carolina Catawba Co < 0.05 North Carolina Davidson Co < 0.05 Ohio Butler Co < 0.05 Ohio Cuyahoga Co < 0.05 Ohio Franklin Co < 0.05 Ohio Hamilton Co < 0.05 Ohio Jefferson Co < 0.05 Ohio Lawrence Co < 0.05 Ohio Mahoning Co < 0.05 Ohio Montgomery Co < 0.05 Ohio Scioto Co < 0.05 Ohio Stark Co < 0.05 Ohio Summit Co < 0.05 Pennsylvania Allegheny Co < 0.05 Pennsylvania Beaver Co < 0.05 Pennsylvania Berks Co 0.16 Pennsylvania Cambria Co < 0.05 Pennsylvania Dauphin Co 0.11 Pennsylvania Delaware Co 0.19 Pennsylvania Lancaster Co 0.18 Pennsylvania Philadelphia Co 0.18 Pennsylvania Washington Co < 0.05 Pennsylvania Westmoreland Co < 0.05 Pennsylvania York Co 0.14 Tennessee Hamilton Co < 0.05 Tennessee Knox Co < 0.05 West Virginia Berkeley Co 0.05 West Virginia Brooke Co < 0.05 West Virginia Cabell Co < 0.05 West Virginia Hancock Co < 0.05 West Virginia Kanawha Co < 0.05 West Virginia Marion Co < 0.05 West Virginia Marshall Co < 0.05 West Virginia Ohio Co < 0.05 West Virginia Wood Co < 0.05


[Federal Register Volume 76, Number 245 (Wednesday, December 21, 2011)]
[Notices]
[Pages 79198-79199]
[FR Doc No: 2011-32562]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2010-N-0381]

Generic Drug User Fee; Public Meeting; Correction

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice; correction.

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SUMMARY: The Food and Drug Administration (FDA) is correcting a notice
that appeared in the Federal Register of Thursday, December 8, 2011 (76
FR 76738). The document announced a public meeting entitled ``Generic
Drug User Fee.'' The document published with an inadvertent error in
the Dates section. This document corrects that error.

FOR FURTHER INFORMATION CONTACT: Joyce Strong, Office of Policy, Food
and Drug Administration, 10903 New Hampshire Ave., Bldg. 32, Rm. 3208,
Silver Spring, MD 20993-0002,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: In FR Doc. 2011-31630, appearing on page
76738

in the Federal Register of Thursday, December 8, 2011, the following
correction is made:
    On page 76738, in the third column, under the Dates section,
``January 6, 2011'' is corrected to read ``January 6, 2012''.

    Dated: December 15, 2011.
Leslie Kux,
Acting Assistant Commissioner for Policy.
[FR Doc. 2011-32562 Filed 12-20-11; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register Volume 83, Number 181 (Tuesday, September 18, 2018)]
[Rules and Regulations]
[Pages 47076-47077]
[FR Doc No: 2018-20163]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 300

[EPA-HQ-SFUND-1990-0011; FRL-9983-84--Region 5]

National Oil and Hazardous Substances Pollution Contingency Plan
National Priorities List: Partial Deletion of the Beloit Corporation
Superfund Site

AGENCY: Environmental Protection Agency (EPA).

ACTION: Withdrawal of direct final rule.

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SUMMARY: On July 16, 2018, the Environmental Protection Agency (EPA)
published a Notice of Intent for Partial Deletion and a direct final
Notice of Partial Deletion for the Research Center Property (RCP) of
the Beloit Superfund Site (Beloit Site) from the National Priorities
List (NPL). EPA is withdrawing the direct final Notice of Partial
Deletion because EPA did not provide timely notice of the publication
of this rulemaking through publication of an advertisement in a local
newspaper as required by EPA policy.

DATES: This withdrawal of the direct final action 83 FR 32798 (July 16,
2018) is effective as of September 14, 2018.

FOR FURTHER INFORMATION CONTACT: Randolph Cano, NPL Deletion
Coordinator, U.S. Environmental Protection Agency Region 5 (SR-6J), 77
West Jackson Boulevard, Chicago, IL 60604,<PHONE_NUMBER>, or via email
at [email protected].

SUPPLEMENTARY INFORMATION: On July 16, 2018, the EPA published a Notice
of Intent for Partial Deletion (83 FR 32825) and a direct final Notice
of Partial Deletion (83 FR 32798) for the Research Center Property
(RCP) of the Beloit Superfund Site (Beloit Site) from the National
Priorities List (NPL). After consideration of the comments received, if
appropriate, EPA will publish a Notice of Partial Deletion in the
Federal Register based on the parallel Notice of Intent for Partial
Deletion and place a

copy of the final partial deletion package, including a Responsiveness
Summary, if prepared, in docket EPA-HQ-SFUND-1990-0011, accessed
through the http://www.regulations.gov website and in the Beloit Site
repositories.
    Information Repositories: Comprehensive information on the Beloit
Site, as well as the comments that we received during the comment
period, are available in docket [EPA-HQ-SFUND-1990-0011], accessed
through the http://www.regulations.gov website. Although listed in the
docket index, some information is not publicly available, e.g., CBI or
other information whose disclosure is restricted by statue. Certain
other material, such as copyrighted material, will be publicly
available only in hard copy. Publicly available docket materials are
available either electronically in http://www.regulations.gov or in
hard copy at:
    U.S. Environmental Protection Agency, Region 5, Superfund Records
Center, 77 West Jackson Boulevard, 7th Floor South, Chicago, IL 60604,
Phone:<PHONE_NUMBER>, Hours: Monday through Friday, 8 a.m. to 4 p.m.,
excluding Federal holidays.
    Talcott Free Library, 101 East Main Street, Rockton, IL 61072,
Phone:<PHONE_NUMBER>, Hours: Monday, Tuesday and Thursday, 9 a.m. to 8
p.m., Wednesday and Friday 9 a.m. to 5:30 p.m., and Saturday 9 a.m. to
3 p.m.

List of Subjects in 40 CFR Part 300

    Environmental protection, Air pollution control, Chemicals,
Hazardous waste, Hazardous substances, Intergovernmental relations,
Penalties, Reporting and recordkeeping requirements, Superfund, Water
pollution control, Water supply.

    Authority: 33 U.S.C. 1321(d); 42 U.S.C. 9601-9657; E.O. 13626,
77 FR 56749, 3 CFR, 2013 Comp., p. 306; E.O. 12777, 56 FR 54757, 3
CFR, 1991 Comp., p. 351; E.O. 12580, 52 FR 2923, 3 CFR, 1987 Comp.,
p. 193.

    Dated: September 7, 2018.
James Payne,
Acting Regional Administrator, Region 5.

0
Accordingly, the amendment to Table 1 of Appendix B to 40 CFR part 300
to add a ``P'' in the Notes column in the entry ``IL'', ``Beloit
Corp.'', ``Rockton'', published on July 16, 2018 (83 FR 32798), is
withdrawn as of September 14, 2018.

[FR Doc. 2018-20163 Filed 9-14-18; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 77, Number 190 (Monday, October 1, 2012)]
[Rules and Regulations]
[Pages 59745-59747]
[FR Doc No: 2012-24104]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 375

[Docket No. RM12-20-000; Order No. 766]

Delegation of Authority Regarding Electric Reliability
Organization's Budget, Delegation Agreement, and Policy and Procedure
Filings

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

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SUMMARY: The Commission is issuing this Final Rule to revise its
delegations of authority to align with an internal Commission
reorganization, which reassigned certain responsibilities for specific
Electric Reliability Organization (ERO) filings. In particular, this
Final Rule transfers delegated authority, from the Director of the
Commission's Office of Electric Reliability to the Director of the
Commission's Office of Energy Market Regulation, to act on ERO filings
pertaining to ERO annual budgets, ERO delegation agreements, and ERO
policies and procedures.

DATES: This rule is effective October 1, 2012.

FOR FURTHER INFORMATION CONTACT: Christine A. Powell, Office of the
General Counsel, Federal Energy Regulatory Commission, Room 104-04, 888
First Street NE., Washington, DC 20426,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

140 FERC ] 61,202

Before Commissioners: Jon Wellinghoff, Chairman; Philip D. Moeller,
John R. Norris, Cheryl A. LaFleur, and Tony T. Clark.

    (Issued September 20, 2012)

I. Background

    1. The Energy Policy Act of 2005 added section 215 to the Federal
Power Act (FPA), which requires a Commission-certified Electric
Reliability Organization (ERO) to develop mandatory and enforceable
Reliability Standards, subject to Commission review and approval.\1\
Under this section, the ERO must, among other things, ``allocate
equitably reasonable dues, fees, and other charges among end users for
all activities under this section,'' \2\ and the Commission also must
issue regulations authorizing the ERO to enter into an agreement to
delegate authority to a Regional Entity if the Regional Entity meets
certain conditions.\3\
---------------------------------------------------------------------------

    \1\ 16 U.S.C. 824o.
    \2\ Id. 824o(c)(2)(B).
    \3\ Id. 840o(e)(4).
---------------------------------------------------------------------------

    2. In Order No. 672, the Commission adopted regulations in
accordance with FPA sections 215(c)(2)(B) and 215(e)(4): 39.4, Funding
of the Electric Reliability Organization; 39.8, Delegation to a
Regional Entity; and 39.10, Changes to an Electric Reliability
Organization Rule or Regional Entity Rule.\4\
---------------------------------------------------------------------------

    \4\ Id.
---------------------------------------------------------------------------

    3. Section 39.4 of the Commission's regulations requires the ERO to
file with

the Commission its proposed annual budget for statutory and non-
statutory activities 130 days before the beginning of its fiscal
year.\5\ This filing must also contain the line item budgets of each
Regional Entity for statutory and non-statutory activities, and include
supporting materials, including the ERO's and each Regional Entity's
complete business plan and organization chart, and an explanation of
the proposed collection of all dues, fees and charges and the proposed
expenditure of funds collected.\6\ After notice and opportunity for
hearing, the Commission will issue an order accepting, rejecting,
remanding or modifying the ERO's proposed budget and business plan no
later than sixty days in advance of the beginning of the ERO's fiscal
year.\7\ If the ERO requires additional funding before or after the
fiscal budget review process, it may file with the Commission for
authority to collect a special assessment; it must demonstrate that the
request is pursuant to an unforeseen, extraordinary circumstance.\8\
---------------------------------------------------------------------------

    \5\ 18 CFR 39.4(b).
    \6\ Id.
    \7\ Id. 39.4(c).
    \8\ Id. 39.4(d).
---------------------------------------------------------------------------

    4. Section 39.8 of the Commission's regulations requires the ERO to
submit to the Commission for Commission approval any proposal to
delegate the ERO's authority to a Regional Entity for the purpose of
proposing or enforcing Reliability Standards.\9\ Alternatively, if a
Regional Entity is unable to negotiate a delegation agreement with the
ERO within a reasonable amount of time, it may apply to the Commission
to assign to it the ERO's authority.\10\
---------------------------------------------------------------------------

    \9\ 18 CFR 39.8.
    \10\ Id. 39.8(f).
---------------------------------------------------------------------------

    5. Section 39.10 of the Commission's regulations requires the ERO
to file with the Commission for Commission approval any proposed
organization rule or rule change, including any Regional Entity rule or
rule change.\11\
---------------------------------------------------------------------------

    \11\ Id. 39.10(b).
---------------------------------------------------------------------------

II. Discussion

    6. Due to an internal Commission reorganization, the Office of
Energy Market Regulation (OEMR) will be responsible to review ERO
filings made pursuant to sections 39.4, 39.8, and 39.10 of the
Commission's regulations. Accordingly, this Final Rule revises the
delegations to the Director of OEMR, contained in section 375.307, to
add authority to act pursuant to delegated authority on filings made
pursuant to the aforementioned sections; thus, it reassigns from the
Director of the Office of Electric Reliability (OER) to the Director of
OEMR the delegations authorizing OER to act pursuant to sections 39.4,
39.8, and 39.10.
    7. New section 375.307(a)(2)(v) delegates to the Director of OEMR
the authority to take appropriate action on budget, business plan, and
special assessment filings made pursuant to section 39.4.
    8. New section 375.307(a)(2)(vi) delegates to the Director of OEMR
the authority to take appropriate action on proposed ERO or Regional
Entity organization rules or rule changes made pursuant to section
39.10.
    9. New section 375.307(a)(2)(vii) delegates to the Director of OEMR
the authority to take appropriate action on delegation agreement
filings by the ERO or a Regional Entity made pursuant to section 39.8.
    10. This Final Rule also revises that portion of section
375.303(a)(2)(i) stating that OER has the authority to approve
revisions to ERO and Regional Entity rules or procedures, to reflect
the change in Commission organization.

III. Information Collection Statement

    11. Office of Management and Budget (OMB) regulations require OMB
to approve certain information collection requirements imposed by
agency rule.\12\ This Final Rule contains no new or revised information
collections. Therefore, OMB review of this Final Rule is not required.
---------------------------------------------------------------------------

    \12\ 5 CFR 1320.
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IV. Environmental Analysis

    12. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\13\
Excluded from this requirement are rules that are procedural,
ministerial, or internal administrative and management actions,
programs or decisions.\14\ This Rule falls within this exception;
consequently, no environmental consideration is necessary.
---------------------------------------------------------------------------

    \13\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats.
& Regs. ] 30,783 (1987).
    \14\ 18 CFR 380.4(a)(1).
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V. Regulatory Flexibility Act

    13. The Regulatory Flexibility Act of 1980 (RFA) \15\ generally
requires a description and analysis of final rules that will have
significant economic impact on a substantial number of small entities.
This Final Rule concerns a matter of internal agency procedure and it
will not have such an impact. An analysis under the RFA is therefore
not required.
---------------------------------------------------------------------------

    \15\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

VI. Document Availability

    14. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through the Commission's Home Page (http://www.ferc.gov) and
in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5 p.m. Eastern time) at 888 First Street NE., Room 2A,
Washington, DC 20426.
    15. From the Commission's Home Page on the Internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the last three digits of this document
(i.e., the sub docket number, 000) in the docket number field.
    16. User assistance is available for eLibrary and the Commission's
Web site during normal business hours from FERC Online Support at (202)
502-6652 (toll free at<PHONE_NUMBER>) or email at
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. Email the Public Reference Room at
<EMAIL_ADDRESS>
VII. Effective Date and Congressional Notification

    17. The provisions of 5 U.S.C. 801 regarding Congressional review
of Final Rules do not apply to this Final Rule because the rule
concerns internal agency procedure and practice and will not
substantially affect the rights of non-agency parties.
    18. These regulations are effective on October 1, 2012. The
Commission finds that notice and public comments are unnecessary
because this Rule concerns only internal agency procedure and practice.
Therefore the Commission finds good cause to waive the notice period
otherwise required before the effective date of this Final Rule.

List of Subjects in 18 CFR Part 375

    The Commission.

    By the Commission.
Kimberly D. Bose,
Secretary.

    In consideration of the foregoing, the Commission amends Part 375,
Chapter I, Title 18, Code of Federal Regulations, as follows:

PART 375--THE COMMISSION

0
1. The authority citation for part 375 continues to read as follows:

    Authority: 5 U.S.C. 551-557; 15 U.S.C. 717-717w, 3301-3432; 16
U.S.C. 791-825r, 2601-2645; 42 U.S.C. 7101-7352.

0
2. In Sec.  375.303, paragraph (a)(2)(i) is revised to read as follows:

Sec.  375.303  Delegations to the Director of the Office of Electric
Reliability.

* * * * *
    (a) * * *
    (2) * * *
    (i) Approve uncontested applications.
* * * * *

0
3. Section 375.307 is amended by revising (a)(2)(iv) and adding
paragraphs (a)(2)(v), (vi), and (vii) to read as follows:

Sec.  375.307  Delegations to the Director of the Office of Energy
Market Regulation.

* * * * *
    (a) * * *
    (2) * * *
    (iv) Sign and issue deficiency letters for filings under Federal
Power Act sections 203, 204, 215, and 305(b).
    (v) Take appropriate action on uncontested Electric Reliability
Organization budget, business plan, and special assessment filings made
pursuant to Sec.  39.4 of this chapter.
    (vi) Take appropriate action on uncontested filings proposing
Electric Reliability Organization or Regional Entity organization rules
or rule changes made pursuant to Sec.  39.10 of this chapter.
    (vii) Take appropriate action on uncontested delegation agreement
filings by the Electric Reliability Organization or Regional Entity
made pursuant to section 39.8 of this chapter.
* * * * *
[FR Doc. 2012-24104 Filed 9-28-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 82, Number 145 (Monday, July 31, 2017)]
[Notices]
[Pages 35575-35576]
[FR Doc No: 2017-16013]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 32742; File No. 812-14740]

Capital Southwest Corporation

July 25, 2017.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of an application for an order under section 23(c)(3) of the
Investment Company Act of 1940 (the ``Act'') for an exemption from
section 23(c) of the Act.

Summary of the Application:  Capital Southwest Corporation
(``Company'') requests an order to amend a prior order \1\ that permits
the Company to issue Restricted Stock \2\ to the Company's Participants
\3\ under the terms of its 2010 Restricted Stock Award Plan, as amended
on January 25, 2017 (the ``Amended Plan''). The Company seeks to amend
the Prior Order to permit it to engage in certain transactions in
connection with the Amended Plan and the Company's 2009 Stock Incentive
Plan, as amended on May 23, 2017 (the ``Amended 2009 Plan'') that may
constitute purchases by the Company of its own securities within the
meaning of section 23(c) of the Act.
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    \1\ Investment Company Act Release Nos. 29450 (September 29,
2010) (notice) and 29491 (October 26, 2010) (order) (the ``Prior
Order'').
    \2\ As defined in the Prior Order.
    \3\ As defined in the Prior Order.

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Applicant:  Capital Southwest Corporation.

Filing Dates:  The application was filed on January 30, 2017, and
amended on May 23, 2017, June 19, 2017, and July 19, 2007.

Hearing or Notification of Hearing:  An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicant with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on August 21, 2017 and should be accompanied by proof of
service on applicant, in the form of an affidavit, or for lawyers, a
certificate of service. Pursuant to rule 0-5 under the Act, hearing
requests should state the nature of the writer's interest, any facts
bearing upon the desirability of a hearing on the matter, the reason
for the request, and the issues contested. Persons who wish to be
notified of a hearing may request notification by writing to the
Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street
NE., Washington, DC 20549-1090. Applicant: Bowen S. Deihl, Chief
Executive Officer and President, Capital Southwest Corporation, 5400
Lyndon B Johnson Freeway, Suite 1300, Dallas, Texas 75240.

FOR FURTHER INFORMATION CONTACT: Asen Parachkevov, Senior Counsel, or
Robert Shapiro, Branch Chief, at<PHONE_NUMBER>, (Division of
Investment Management, Chief Counsel's Office).

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

Applicant's Representations

    1. The Company is an internally managed, non-diversified, closed-
end investment company that has elected to be regulated as a business
development company (``BDC'') under the Act. The Amended Plan
authorizes the Company, among other things, to grant to Participants,
in accordance with the terms and conditions of the Prior Order,
Restricted Stock. Further, under the terms of the Amended 2009 Plan,
the Company is authorized, among other things to grant to Participants
options to acquire shares of the Company's common stock (``Common
Stock''). The Company seeks to amend the Prior Order to permit it to
withhold shares of the Company's Common Stock or purchase shares of
Common Stock from the Participants to satisfy tax withholding
obligations related to the vesting of Restricted Stock granted pursuant
to the Amended Plan or the exercise of options to purchase shares of
Common Stock granted pursuant to the Amended 2009 Plan. In addition,
the Company seeks to permit employees to pay the exercise price of
options to purchase shares of Common Stock granted pursuant to the
Amended 2009 Plan with shares of Common Stock already held by them or
pursuant to a net share settlement feature.\4\ The Company will
continue to comply with all of the terms and conditions of the Prior
Order.
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    \4\ Net share settlement allows the Company to deliver directly
to the optionee only the number of shares underlying the portion of
the option exercised less such number of shares as is equal to (X)
the aggregate exercise price for the portion of the option being
exercised divided by (Y) the Fair Market Value (as defined below) on
the date of exercise. The Company states that the Compensation
Committee of the Board has determined to use the closing sales price
of the Common Stock on the NASDAQ Global Select Market (or any other
such exchange on which the Common Stock may be traded in the future)
on the date of the applicable transaction or other event as the fair
market value (``Fair Market Value'') with respect to the Common
Stock for all purposes under the Amended 2009 Plan.
---------------------------------------------------------------------------

    2. On the date that the Restricted Stock vests (assuming no
election has been made under section 83(b) of the Internal Revenue Code
of 1986, as amended), the shares are released to the Participant and
are available for sale or transfer (subject to the Company's share
retention guidelines).\5\ The Company

states the value of the Restricted Stock will generally be taxable to
the recipient as ordinary income in the years in which the restrictions
on the shares lapse. Such value will be the fair market value of the
shares on the dates the restrictions lapse. The Company states that its
obligations to make cash payments pursuant to a Restricted Stock award
or deliver the shares is subject to the Participant's satisfaction of
all applicable federal, state and local income and employment tax
withholding obligations.
---------------------------------------------------------------------------

    \5\ During the restriction period (i.e., prior to the lapse of
the forfeiture restrictions), the Restricted Stock may not be sold,
transferred, pledged, hypothecated, margined, or otherwise
encumbered by a Participant.
---------------------------------------------------------------------------

    3. As discussed more fully in the application, upon the exercise of
an option, the amount by which the fair market value of the shares of
the Company's Common Stock received, determined as of the date of
exercise, exceeds the exercise price will be treated as ordinary income
to the recipient of the option in the year of exercise. The Company
states that in accordance with applicable regulations of the IRS, the
Company requires the optionee to pay to it an amount sufficient to
satisfy taxes required to be withheld in respect of such compensation
income at the time of the exercise of the option.
    4. The Amended Plan and the Amended 2009 Plan were approved by the
Company's board of directors (``Board''), including the required
majority of the Company's directors with the meaning of section 57(o)
of the Act. The Company states that the Compensation Committee of the
Board, in its discretion, may permit a Participant to irrevocably elect
to have the Company withhold Common Shares, or to deliver to the
Company Common Shares that the Participant already owns, having a value
equal to the amount required to be withheld to satisfy the
Participant's tax withholding obligations related to the vesting of
Restricted Stock under the Amended Plan, or the exercise of options to
acquire Common Stock granted pursuant to the Amended 2009 Plan. The
Company states that the Amended 2009 Plan further provides the
Compensation Committee of the Board with discretion to permit the
Company's employees to pay the exercise price of options to purchase
shares of Common Stock with shares of Common Stock already held by them
or pursuant to net share settlement.

Applicant's Legal Analysis

    1. Section 23(c) of the Act, which is made applicable to BDCs by
section 63 of the Act, generally prohibits a BDC from purchasing any
securities of which it is the issuer except in the open market,
pursuant to tender offers or under such other circumstances as the
Commission may permit to ensure that the purchase is made on a basis
that does not unfairly discriminate against any holders of the class or
classes of securities to be purchased. The Company states that the
withholding or purchase of shares of Common Stock in payment of
applicable withholding tax obligations or of Common Stock in payment
for the exercise price of a stock option might be deemed to be
purchases by the Company of its own securities within the meaning of
section 23(c) and therefore prohibited by the Act.
    2. Section 23(c)(3) provides that the Commission may issue an order
that would permit a BDC to purchase its shares in circumstances in
which the purchase is made in a manner or on a basis that does not
unfairly discriminate against any holders of the class or classes of
securities to be purchased. The Company states that it believes that
the requested relief meets the standards of section 23(c)(3).
    3. The Company states that these purchases will be made on a basis
which does not unfairly discriminate against the stockholders of the
Company because all purchases of Common Stock will be at the closing
sales price of the Common Stock on the NASDAQ Global Select Market (or
any primary exchange on which its shares of Common Stock may be traded
in the future) on the relevant date (i.e., the public market price on
the date of vesting of the Restricted Shares and the date of grant of
options). The Company further states that no transactions will be
conducted pursuant to the requested order on days where there are no
reported market transactions involving the Common Stock. The Company
submits that because all transactions would take place at the public
market price for the Company's Common Stock, the transactions would not
be significantly different than could be achieved by any shareholder on
the Nasdaq Global Select Market.
    4. The Company submits that the proposed purchases do not raise
concerns about preferential treatment of the Company's insiders because
the Amended Plan and the Amended 2009 Plan are bona fide compensation
plans of the type that is common among corporations generally. Further,
the Company argues that the vesting schedule is determined at the time
of the initial grant of the Restricted Stock and the option exercise
price is determined at the time of the initial grant of the options.
The Company represents that all purchases may be made only as permitted
by the Amended Plan and the Amended 2009 Plan, which were approved by
the Board prior to the application for relief. The Company argues that
granting the requested relief would be consistent with policies
underlying the provisions of the Act permitting the use of equity
compensationas well as prior exemptive relief granted by the Commission
for relief under section 23(c) of the Act.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-16013 Filed 7-28-17; 8:45 am]
BILLING CODE 8011-01-P