[Federal Register: November 4, 2005 (Volume 70, Number 213)]
[Proposed Rules]
[Page 67120-67129]
[DOCID:fr04no05-14]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[OAR-2003-0228, FRL-7993-2]
RIN 2060-AN11

Protection of Stratospheric Ozone: Listing of Ozone Depleting
Substitutes in Foam Blowing

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: Today the Environmental Protection Agency (EPA) is proposing
to determine that HCFC-22 and HCFC-142b are unacceptable for use in the
foam sector under the Significant New Alternatives Policy (SNAP)
Program under section 612 of the Clean Air Act. The SNAP program
reviews alternatives to Class I and Class II ozone depleting substances
and approves use of alternatives which do not present a greater risk to
public health and the environment than the substance they replace or
than other available substitutes. Specifically, EPA is taking two
actions. First, in response to a court decision upholding a challenge
to EPA's July 2002 final rule finding HCFC-22 and HCFC-142b acceptable
subject to Narrowed Use Limits in three foam end uses, we are proposing
to find HCFC-22 and HCFC-142b unacceptable as substitutes for HCFC-141b
in the foam end uses of commercial refrigeration, sandwich panels,
slabstock and ``other'' foams. Second, in the July 2002 final rule, EPA
withdrew a proposed action to find HCFC-22 and HCFC-142b unacceptable
as substitutes for CFCs in all foam end uses. We are now issuing a new
proposal to find HCFC-22 and HCFC-142b unacceptable as substitutes for
CFCs in all foam end uses.

DATES: Comments on this proposed rule must be received on or before
December 5, 2005, unless a public hearing is requested. If requested by
November 21, 2005 a hearing will be held on December 5, 2005 and the
comment period will be extended until January 3, 2006 by a document
published in the Federal Register. Inquires regarding a public hearing
should be directed to the contact person listed under FOR FURTHER
INFORMATION CONTACT.

ADDRESSES: Submit your comments, identified by Docket ID No. OAR-2004-
0507 by one of the following methods:
     Federal eRulemaking portal http://www.regulations.gov. Follow the

on-line instructions for submitting comments;

     Agency Web site: http://www.epa.gov/edocket. EDOCKET,

EPA's electronic public docket and comment system, is EPA's preferred
method for receiving comments. Follow the on-line instructions for
submitting comments;
     Fax comments to<PHONE_NUMBER>; or
     Mail/hand delivery: Submit comments to Air and Radiation
Docket at EPA West, 1301 Constitution Avenue, NW., Room B108, Mail Code
6102T, Washington, DC 20460, Phone:<PHONE_NUMBER>.
    Instructions: Direct your comments to Docket ID No. OAR-2004-0507.
EPA's policy is that all comments received will be included in the
public docket without change and may be made available on-line at
http://www.epa.gov/edocket, including any personal information

provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through EDOCKET,
regulations.gov, or e-mail. The EPA EDOCKET and the federal
regulations.gov Web sites are ``anonymous access'' systems, which means
EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send an e-mail comment
directly to EPA without going through EDOCKET or regulations.gov, your
e-mail address will be automatically captured and included as part of
the comment that is placed in the public docket and made available on
the Internet. If you submit an electronic comment, EPA recommends that
you include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket visit EDOCKET on-line or see the
Federal Register of May 31, 2002 (67 FR 38102).
    Docket: All documents in the docket are listed in the EDOCKET index
at http://www.epa.gov/edocket. Although listed in the index, some

information is not publicly available, i.e., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically in EDOCKET or in hard
copy at the Air and Radiation Docket EPA/DC, EPA West, Room B102, 1301
Constitution Ave., NW., Washington, DC. The Public Reading Room is open
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The telephone number for the Public Reading Room is (202)
566-1744, and the telephone number for the Air Docket is (202) 566-
1742.

FOR FURTHER INFORMATION CONTACT: Suzie Kocchi, Stratospheric Protection
Division, Office of Atmospheric Programs (6205J), Environmental
Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460;
telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; e-mail
address<EMAIL_ADDRESS>The published versions of notices and
rulemakings under the SNAP program are available on EPA's Stratospheric
Ozone Web site at http://www.epa.gov/ozone/snap/regs.

SUPPLEMENTARY INFORMATION:

Table of Contents:

    This action is divided into six sections:
I. Regulated Entities
II. Section 612 Program
    A. Statutory Requirements
    B. Regulatory History
    C. Listing Decisions
III. Listing Decisions on HCFC-22 and HCFC-142b in the Foam Sector
    A. Background
    B. Proposal
IV. Summary
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination with
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health & Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
    I. National Technology Transfer Advancement Act
VI. Additional Information

I. Regulated Entities

    Today's rule regulates the use of HCFC-22 and HCFC-142b as foam
blowing agents used in the manufacture of rigid polyurethane/
polyisocyanurate and extruded polystyrene foam products. Businesses
that currently might be using HCFC-22 and HCFC-142bb, or might want to
use it in the future, include:

--Businesses that manufacture polyurethane/polyisocyanurate foam
systems
--Businesses that use polyurethane/polyisocyanurate systems to apply
insulation to buildings, roofs, pipes, etc.
--Businesses that use manufacture extruded polystyrene foam insulation
for buildings, roofs, pipes, etc.

    Table 1 lists potentially regulated entities:

 Table 1.--Potentially Regulated Entities, by North American Industrial
             Classification System (NAICS) Code or Subsector
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                                  NAICS code or       Description of
            Category                subsector       regulated entities
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Industry.......................          326150  Urethane and Other Foam
                                                  Product (except
                                                  Polystyrene)
                                                  Manufacturing.
Industry.......................          326140  Polystyrene Foam
                                                  Product Manufacturing.
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    This table is not intended to be exhaustive, but rather a guide
regarding entities likely to be regulated by this action. If you have
any questions about whether this action applies to a particular entity,
consult the person listed in the preceding section, FOR FURTHER
INFORMATION.

II. Section 612 Program

A. Statutory Requirements

    Section 612 of the Clean Air Act (CAA) requires EPA to develop a
program for evaluating alternatives to ozone depleting substances
(ODS). EPA refers to this program as the Significant New Alternatives
Policy (SNAP) program. The major provisions of section 612 are:
     Rulemaking--Section 612(c) requires EPA to promulgate
rules making it unlawful to replace any class I (chlorofluorocarbon,
halon, carbon tetrachloride, methyl chloroform,

methyl bromide, and hydrobromofluorocarbon) or class II
(hydrochlorofluorocarbon) substance with any substitute that the
Administrator determines may present adverse effects to human health or
the environment where the Administrator has identified an alternative
that (1) reduces the overall risk to human health and the environment,
and (2) is currently or potentially available.
     Listing of Unacceptable/Acceptable Substitutes--Section
612(c) also requires EPA to publish a list of the substitutes
unacceptable for specific uses. EPA must publish a corresponding list
of acceptable alternatives for specific uses.
     Petition Process--Section 612(d) grants the right to any
person to petition EPA to add a substitute to or delete a substitute
from the lists published in accordance with section 612(c). The Agency
has 90 days to grant or deny a petition. When the Agency grants a
petition, EPA must publish the revised lists within an additional six
months.
     90-day Notification--Section 612(e) directs EPA to require
any person who produces a chemical substitute for a class I substance
to notify EPA not less than 90 days before new or existing chemicals
are introduced into interstate commerce for significant new uses as
substitutes for a class I substance. The producer must also provide EPA
with the producer's health and safety studies on such substitutes.
     Outreach--Section 612(b)(1) states that the Administrator
shall seek to maximize the use of federal research facilities and
resources to assist users of class I and II substances in identifying
and developing alternatives to the use of such substances in key
commercial applications.
     Clearinghouse--Section 612(b)(4) requires the Agency to
set up a public clearinghouse of alternative chemicals, product
substitutes, and alternative manufacturing processes that are available
for products and manufacturing processes which use class I and II
substances.

B. Regulatory History

    On March 18, 1994, EPA published a rule (59 FR 13044) which
described the process for administering the SNAP program and issued
EPA's first acceptability lists for substitutes in the major industrial
use sectors. These sectors include: refrigeration and air conditioning,
foam manufacturing, solvents cleaning, fire suppression and explosion
protection, sterilants; aerosols, adhesives, coatings and inks; and
tobacco expansion. These sectors comprise the principal industrial
sectors that historically consumed large volumes of ozone depleting
compounds.
    EPA defines a ``substitute'' as any chemical, product substitute,
or alternative manufacturing process, whether existing or new, that
could replace a class I or class II substance (40 CFR 82.172). Anyone
who produces a substitute must provide EPA with health and safety
studies on the substitute at least 90 days before introducing it into
interstate commerce for significant new use as an alternative (40 CFR
82.174(a)). This requirement applies to chemical manufacturers, but may
include importers, formulators, or end-users when they are responsible
for introducing a substitute into commerce.

C. Listing Decisions

    Under section 612, EPA has considerable discretion in the risk
management decisions it can make under the SNAP program. In the 1994
SNAP rule, the Agency identified four possible decision categories:
acceptable; acceptable subject to use conditions; acceptable subject to
narrowed use limits; and unacceptable (40 CFR 82.180(b)). Fully
acceptable substitutes, i.e., those with no restrictions, can be used
for all applications within the relevant sector end-use.
    After reviewing a substitute, EPA may make a determination that a
substitute is acceptable only if certain conditions of use are met to
minimize risk to human health and the environment. Such substitutes are
described as ``acceptable subject to use conditions.''
    Even though EPA can restrict the use of a substitute based on the
potential for adverse effects, it may be necessary to permit a narrowed
range of use within a sector end-use because of the lack of
alternatives for specialized applications. Users intending to adopt a
substitute acceptable with narrowed use limits must first ascertain
that other acceptable alternatives are not technically feasible.
Companies must document the results of their evaluation, and retain the
results on file for the purpose of demonstrating compliance. This
documentation must include descriptions of substitutes examined and
rejected, processes or products in which the substitute is needed,
reason for rejection of other alternatives, e.g., performance,
technical or safety standards, and the anticipated date other
substitutes will be available and projected time for switching to other
available substitutes. The use of such substitutes in applications and
end-uses which are not specified as acceptable in the narrowed use
limit is unacceptable and violates Section 612 of the CAA and the SNAP
regulations. (40 CFR 82.174).
    EPA does not believe that notice and comment rulemaking procedures
are required to list alternatives as acceptable with no restrictions.
Such listings do not impose any sanction, nor do they remove any prior
license to use a substitute. Consequently, EPA adds substitutes to the
list of acceptable alternatives without first requesting comment on new
listings (59 FR 13044). Updates to the acceptable lists are published
as separate Notices of Acceptability in the Federal Register.
    As described in the original March 18, 1994 rule for the SNAP
program (59 FR 13044), EPA believes that notice-and-comment rulemaking
is required to place any alternative on the list of prohibited
substitutes, to list a substitute as acceptable only under certain use
conditions or narrowed use limits, or to remove an alternative from
either the list of prohibited or acceptable substitutes. In this
proposed rule, EPA is revising its determination regarding the
acceptability of HCFC-22 and HCFC-142b as substitutes for HCFC-141b and
CFCs in the foam blowing sector. The section below presents a detailed
discussion of the proposal being made today.

III. Listing Decisions on HCFC-22 and HCFC-142b in the Foam Sector

A. Background

    A major goal of the SNAP program is to facilitate the transition
away from ODS to alternatives that pose less risk to human health and
the environment. In 1994, EPA listed several HCFCs as acceptable
replacements for CFCs \1\ because the Agency believed that HCFCs
provided a temporary bridge to alternatives that do not deplete
stratospheric ozone (i.e., ``ozone-friendly'' alternatives). At that
time, EPA believed that HCFCs were necessary transitional alternatives
to CFC blowing agents in thermal insulating foam (59 FR 13083). As a
result, HCFC-22 and HCFC-142b have become common foam blowing agents in
place of CFCs. Pursuant to the CAA and the Montreal Protocol on
Substances that Deplete the Ozone Layer, HCFC-22 and HCFC-142b are
scheduled to be phased out of production and import in the United
States on January 1, 2010.\2\ Since the time EPA initially listed HCFC-
22 and

HCFC-142b as acceptable in certain foam blowing uses, the Agency has
listed several other non-ODS alternative blowing agents, including
hydrofluorocarbons (HFCs), hydrocarbons, carbon dioxide, and other
compounds, as acceptable substitutes in foam blowing.\3\
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    \1\ Historically, CFC-11, CFC-12, CFC-113 and CFC-114 have all
been used as blowing agents in the foam industry, with CFC-11 in
polyurethane applications and CFC-12 in extruded polystyrene
boardstock applications being the two most popular CFC blowing
agents (March 18, 1994, 59 FR 13082).
    \2\ The phaseout schedule was established on December 10, 1993
(58 FR 65018) as authorized under section 606 of the Clean Air Act.
    \3\ These listings are published in the following Federal
Register notices: September 3, 1996 (61 FR 47012), March 10, 1997
(62 FR 10700), June 3, 1997 (62 FR 30275), February 24, 1998 (63 FR
9151), June 8, 1998 (634 FR 30410), December 6, 1999 (64 FR 68039),
April 11, 2000 (65 FR 19327), June 19, 2000 (65 FR 37900), December
18, 2000 (65 FR 78977), August 21, 2003 (68 FR 50533) and October 1,
2004 (69 FR 58903).
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    In a final rule published on July 22, 2002, EPA did the following:
(1) Found HCFC-22 and HCFC-142b acceptable substitutes for HCFC-141b
with Narrowed Use Limits in the foam end uses of commercial
refrigeration, sandwich panels, and rigid polyurethane slabstock and
``other'' foams end uses; (2) withdrew a proposed decision to list
HCFC-22 and HCFC-142b as unacceptable substitutes for CFCs for all foam
end uses; (3) listed HCFC-22 and HCFC-142b as unacceptable substitutes
for HCFC-141b in the foam end uses of rigid polyurethane/
polyisocyanurate laminated boardstock, rigid polyurethane appliance
foam and rigid polyurethane spray foam; and (4) listed HCFC-124 as an
unacceptable substitute in all foam end uses. This proposal again takes
action with respect to two of the actions addressed in the July 2002
rule. First, in light of a recent court decision (Honeywell Int'l v.
EPA, 374 F.3d 1363 (D.C. Cir 2004), modified on rehearing 393 F.3d 1315
(D.C. Cir. 2005)), EPA is proposing to list HCFC-22 and HCFC-142b as
unacceptable substitutes for HCFC-141b in commercial refrigeration,
sandwich panels, and slabstock and ``other'' foam, but is proposing to
grandfather existing users until January 1, 2010. Second, EPA is once
again proposing to list HCFC-22 and HCFC-142b as unacceptable
substitutes for CFCs in all foam end uses, but is proposing to
grandfather existing users until January 1, 2010.
HCFC-22 and HCFC-142b Unacceptable as Substitutes for HCFC-141b
    After the publication of the July 22, 2002 final rule, Honeywell
International filed suit in the United States Court of Appeals for the
District of Columbia Circuit (the Court), challenging the Narrowed Use
Limits that the Agency established for HCFC-22 and HCFC-142b. Among
other things, Honeywell alleged that EPA improperly considered costs in
determining to establish Narrowed Use Limits instead of finding HCFC-22
and HCFC-142b unacceptable for certain end uses. EPA argued that the
decision was based solely on technical feasibility and, though not
precluded from considering costs, it had not done so as part of the
decision. The Court upheld Honeywell's challenge, explaining that
various preamble statements indicated that EPA had considered costs,
but that EPA had not explained the basis for doing so (Honeywell Int'l
v. EPA, 374 F.3d 1363 (DC Cir 2004), modified on rehearing 393 F.3d
1315 (D.C. Cir. 2005)). In light of the Court's decision, EPA is
required to reassess its action with respect to the acceptability of
HCFC-22 and HCFC-142b as substitutes for HCFC-141b in commercial
refrigeration, sandwich panels, and slabstock and ``other'' foam. After
considering new information on alternatives, the Agency is proposing to
find HCFC-22 and HCFC-142b unacceptable as substitutes for HCFC-141b in
commercial refrigeration, sandwich panels, and slabstock and ``other''
foam applications based on the technical viability of alternatives, as
detailed in a section below. Therefore, EPA does not need to address
whether other alternatives are so costly that they justify some limited
acceptability determination for these substitutes.
    The majority of the applications in the end uses covered by the
Narrowed Use Limits are applications referred to as ``pour foam''. Pour
foam represents a diverse sector of the polyurethane industry comprised
of a wide range of applications and fragmented HCFC use including:
commercial refrigeration (such as walk-in coolers), doors (such as
entry doors or garage doors), refrigerated transport, vending machines,
residential architectural panels, tank and pipe insulation, marine
flotation foams, floral foam and taxidermy foam.
    The pour foam sector operates differently than many other end uses
regulated under SNAP. Rather than the end user directly buying and
using an alternative, the alternative is first processed by a
formulator, known as a ``systems house''. The formulators purchase raw
materials, including the blowing agent (e.g. HCFC-22 or HCFC-142b),
isocyanates, surfactants, and fire retardants from suppliers, and then
blend the materials into a foam system. Formulators tend to sell pour
foam systems in drums or other containers where the isocyanate is kept
separate from the blowing agent and other ingredients. Because the re-
formulating and testing is done by the formulators, they are relied
upon for much of the technical expertise and support provided to the
ultimate end user, in this case, pour foam manufacturers. The pour foam
manufacturers purchase these systems from the formulators in order to
produce the actual foam product (e.g., walk-in coolers). Thus, in the
pour foam sector, formulators are responsible for implementing
alternatives to the ozone-depleting blowing agents and providing the
pour foam manufacturers with systems that produce foam meeting
technical, safety, and performance requirements. Both the formulators
and pour foam manufacturers are subject to SNAP regulations because
both use the blowing agent--formulators blend the blowing agent into a
foam formulation, and manufacturers produce the foam with aid of the
blowing agent.
    There are approximately 15-20 systems houses in the U.S. that
formulate pour foam systems and include both large and small
businesses. EPA concluded in the 2002 final rule, that at that time,
some pour foam applications, particularly those with thermal
performance requirements, did not have technically viable ozone-
friendly alternatives available. As the Agency explained, ``EPA
believes that ozone-friendly alternatives to HCFC-141b have not been
fully developed and implemented across the spectrum of applications
within these end-uses'' (67 FR 47707). Therefore, EPA established the
Narrowed Use Limits to provide the formulators of pour foam systems who
found alternatives were not technically viable in certain applications
the flexibility to switch to the less harmful ozone depleting chemicals
of HCFC-22 and HCFC-142b.
    EPA did not intend for the 2002 Narrowed Use Limits to remain in
place permanently. As the Agency stated in the final rule, ``EPA is
continuing to review the commercial refrigeration, sandwich panels, and
slabstock and other foams end-uses to determine the progress of non-
ozone depleting alternatives. As non-ozone depleting alternatives
become more widely available, the Agency will reevaluate the
acceptability of HCFCs in these end-uses. Therefore, foam manufacturers
within these applications that are using HCFCs should begin using non-
ozone depleting alternatives as soon as they are available in
anticipation of future EPA action restricting the use of HCFCs'' (67 FR
47704). Based on the information provided to EPA since the publication
of the final rule in July 2002, EPA believes today that, alternatives
are now widely available, technically viable, and in use in the end
uses covered by the Narrowed Use Limits determination that was vacated

by the Court (Docket  OAR-2004-0507, Documents 0004 through
0011).
HCFC-22 and HCFC-142b Unacceptable as Substitutes for CFCs
    The 2002 final rule withdrew a proposal published in 2000 to change
the listing of HCFC-22 and HCFC-142b as substitutes for CFCs from
acceptable to unacceptable. EPA had proposed to list these substitutes
as unacceptable for new users effective 60 days after publication of
the final rule in the Federal Register, but to allow existing users of
HCFC-22 and HCFC-142b to continue use of those substitutes (i.e., be
``grandfathered'') until January 1, 2005. The Agency explained that it
was appropriate to grandfather existing use of HCFC-22 and HCFC-142b,
because EPA believed ``that it could take foam manufacturers up to four
years to transition to alternatives'' (65 FR 42659).\4\ Commenters on
the proposal largely agreed with EPA's assessment of the amount of time
it takes to transition to alternatives in many foam applications.
Additionally, the recent phaseout of HCFC-141b and the implementation
of alternatives in those foam applications in which HCFC-141b was
previously used has further demonstrated the accuracy of that four-year
transition timeline. Grandfathering allows those who had made a good
faith transition to a SNAP-approved alternative sufficient time to
transition to a different alternative while prohibiting new investment
in an alternative that no longer meets the test for being SNAP-approved
(i.e., availability of other alternatives that provide less risk to
human health and the environment).
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    \4\ The decision to grandfather is based on the criteria
established in Sierra Club v. EPA (719 F.2D 436 (DC CIR. 1983)). The
criteria EPA examines to judge the appropriateness of grandfathering
includes: (1) Is the new rule an abrupt departure from Agency
practice, (2) what is the extent the interested parties relied on
the previous rule, (3) what is the burden of the new rule on the
interested parties and (4) what is the statutory interest in making
the new rule effective immediately, as opposed to grandfathering
interested parties (59 FR 13057).
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    At the time of the proposal, the information available to EPA
suggested that non-ozone depleting chemicals were technically viable as
replacements and existing users of HCFC-22 and HCFC-142b could switch
to these alternatives within four years. After the proposal, EPA
gathered additional information regarding the technical viability of
alternatives and presented that information in a Notice of Data
Availability (NODA) (May 23, 2001, 66 FR 28408). Based on all of the
information before the Agency, including comments on the proposed rule
and the information made available through the NODA, EPA withdrew the
proposal to list HCFC-22 and HCFC-142b as unacceptable substitutes for
CFCs in the July 22, 2002 final rule. In particular, the extruded
polystyrene industry, the largest user of HCFC-142b, and the
polyurethane manufacturers using HCFC-22, cited technical constraints
in implementing non-ODP alternatives. The Agency agreed and withdrew
that portion of the proposal because EPA believed, at that time, there
were technical constraints ``in switching to ozone-friendly
alternatives for these users within the next several years'' (67 FR
47707).
    Since the July 2002 final rule, the phaseout of HCFC-141b in 2003,
and the action of the Court in 2004, EPA has gathered new information
on the technical viability of non-ODP alternatives to HCFC-22 and HCFC-
142b in the foam industry (Docket  OAR-2004-0507, Documents
0004 through 0011). Today, EPA is proposing two actions regarding the
acceptability of HCFC-22 and HCFC-142b in the foam sector. First, EPA
is proposing to find HCFC-22 and HCFC-142b unacceptable as substitutes
for HCFC-141b in the foam end uses of commercial refrigeration,
sandwich panels, and slabstock and ``other'' foam, but is proposing to
grandfather existing users until January 1, 2010. Second, EPA is
proposing to find HCFC-22 and HCFC-142b unacceptable as substitutes for
CFCs in all foam end uses, but is proposing to grandfather existing
users until January 1, 2010. EPA's decisions are based on the technical
viability of alternatives.

B. Proposal

(1) HCFC-22, HCFC-142b and Blends Thereof Are Proposed as Unacceptable
as Substitutes for HCFC-141b in the Foam End-Uses of Commercial
Refrigeration, Sandwich Panels, and Slabstock and ``Other'' Foam
    This proposal would prohibit users of HCFC-141b to switch to HCFC-
22 and HCFC-142b in commercial refrigeration, sandwich panels, and
slabstock and ``other'' foams end uses. Based on the information EPA
has received since 2002, the Agency believes that ozone-friendly
alternatives are now technically viable and available in these three
end uses. The information found in docket OAR-2004-0507 demonstrates
that several SNAP-approved non-ODP alternatives, including
hydrocarbons, HFC-245fa, HFC-134a, methyl formate and water, are widely
available, technically viable in the foam end uses addressed by this
proposal, and are being sold in the market today across the commercial
refrigeration, sandwich panels, and slabstock and ``other'' foam end
uses (Docket  OAR-2004-0507, Documents 0004 through 0011).
    This listing would be effective 60 days following publication of a
final action in the Federal Register. However, EPA is proposing that
existing users of HCFC-22 and HCFC-142b as of the date of publication
of this proposal in the Federal Register be grandfathered (i.e.,
allowed to continue their use) until January 1, 2010.\5\ EPA is
proposing to grandfather existing users from the unacceptability
determination based on our analysis under the four-part test
established in Sierra Club v. EPA. The four parts of this test are
described earlier in the preamble and are discussed on page 13057 of
EPA's original SNAP rule (published on March 18, 1994). The Agency
believes it is appropriate to grandfather these users for the same
reasons provided below with respect to users of HCFC-22 and HCFC-142b
who switched to these substitutes as an alternative for CFCs.
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    \5\ In this context, existing use is defined as current use of
HCFC-22 and/or HCFC-142b to manufacture actual foam products that
are sold into commercial markets..
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(2) HCFC-22, HCFC-142b and Blends Thereof Are Proposed as Unacceptable
as Substitutes for CFCs in All Foam End Uses
    Due to the technical viability and availability of ozone-friendly
alternatives, this proposal, if finalized, would prohibit any new use
of HCFC-22 and HCFC-142b as substitutes for CFCs in all foam end uses.
This listing would be effective 60 days following publication of a
final action in the Federal Register. However, EPA is proposing that
existing users of HCFC-22 and HCFC-142b as of the date of publication
of this proposal in the Federal Register be grandfathered (i.e.,
allowed to continue their use) until January 1, 2010 based on our
analysis under the four-part test established in Sierra Club v. EPA.
    EPA listed HCFCs as acceptable substitutes for CFCs in 1994 and
although HCFCs are transitional substances, clearly users relied on the
Agency's prior acceptability listing of HCFC-22 and HCFC-142b when they
transitioned from CFCs in foam applications.\6\ Thus, for the existing

users of HCFC-22 and HCFC-142b that invested in good faith in these
chemicals as replacements for CFC blowing agents, EPA believes it is
appropriate to provide time for these users to transition to ozone-
friendly alternatives.
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    \6\ Similarly, even through the 2002 final rule was eventually
vacated by the Court in 2004, at that time users of HCFC-141b that
transitioned to HCFC-22 and HCFC-142b in commercial refrigeration,
sandwich panels, and slabstock and other foam relied on EPA's
acceptability determination as it appeared in the 2002 final rule.
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    As explained earlier, EPA believes that in some foam applications,
particularly thermal insulation applications, it can take up to four
years to complete a blowing agent transition. Requiring all existing
users of HCFC-22 and HCFC-142b to comply immediately with the proposed
unacceptability determination could place an undue burden on those
entities mainly due to the amount of time and actions necessary to
complete a successful blowing agent transition. For example, a recent
review of the extruded polystyrene foam sector (which encompasses the
largest use of HCFC-142b) found that companies in that industry would
``likely experience technical constraints with the alternatives'' if
they had to transition before January 1, 2010 because of the time it
takes to test and implement a new blowing agent, including completing
equipment and process modifications as well as gaining building code
approval for the new products (Docket  OAR-2004-0507-003).
Equally, many of the polyurethane manufacturers using HCFC-22 are
making foam products that have thermal insulation requirements, such as
walk-in coolers or metal panels. Before transitioning, those
manufacturers would need to undertake several preparatory actions, such
as:
    (1) Making changes to existing equipment in order to optimize
production and ensure worker safety;
    (2) Establish raw material suppliers;
    (3) Develop formulations;
    (4) Test final products; and
    (5) Obtain final product review and approval by industry and
governmental standard setting bodies for flammability, building codes,
and other safety and performance requirements).
    Based on the transition requirements described above, EPA believes
it is appropriate that existing users of HCFC-22 and HCFC-142b in foam
applications be allowed to continue using these chemicals until January
1, 2010 in order to ensure a safe transition to non-ODP alternative
blowing agents. The SNAP program is designed to encourage the
transition away from ozone depleting chemicals, however, the balance of
the factors related to existing users of HCFC-22 and HCFC-142b
discussed above outweigh EPA's statutory interest in applying the
unacceptability determination immediately to all users. EPA believes
its goal of encouraging the transition away from HCFC-22 and HCFC-142b
is still satisfied as new use of these substances will not be permitted
in the foam sector and existing users will begin their transition to
non-ODP alternatives. Due to the fact that ozone-friendly alternatives
are available in nearly all foam applications, EPA strongly encourages
all existing users of HCFC-22 and HCFC-142b to begin their transition
to alternatives immediately and to complete the transition as soon as
possible prior to January 1, 2010.
Request for Comments on Unique Applications Requiring HCFC-22 and HCFC-
142b
    In past rulemakings, where necessary, EPA has allowed specific,
unique applications to continue use of a substitute that EPA has found
to be unacceptable. For example, in the recent SNAP final rule
published on September 30, 2004, EPA found the use of HCFC-141b
unacceptable in all foam applications. However, based on technical
information submitted to EPA during the comment period, the Agency
exempted ``the use of HCFC-141b for space vehicle, nuclear and defense
foam applications from the unacceptability determination'' (69 FR
58272). EPA is not aware of any specialized foam applications that
would require continued use of HCFC-22 or HCFC-142b beyond January 1,
2010; however, the Agency is requesting comment about any applications
that would require the use of HCFC-22 or HCFC-142b as blowing agents
beyond January 1, 2010. When submitting information about such an
application, please provide as much detail as possible about the
application, the technical constraints to using alternatives, and the
specific plan to implement alternatives, as well as any other relevant
information.
    As discussed above, ozone-friendly alternatives exist for nearly
all foam applications, particularly in the pour foam products found in
the end uses of commercial refrigeration, sandwich panels, and
slabstock and ``other'' foam. Accordingly, EPA is proposing to (1) list
HCFC-22 and HCFC-142b as unacceptable substitutes for HCFC-141b in
commercial refrigeration, sandwich panels, and slabstock and ``other''
foam; and (2) list HCFC-22 and HCFC-142b as unacceptable substitutes
for CFCs in all foam end uses. These listings would be effective 60
days after the publication of the final rule in the Federal Register.
Existing users of HCFC-22 and HCFC-142b as of November 4, 2005 would be
grandfathered until January 1, 2010.

IV. Summary

    A major objective of the SNAP program is to facilitate the
transition from ozone-depleting chemicals by promoting the use of
substitutes which present a lower risk to human health and the
environment (40 CFR 82.170(a)). In this light, a key policy interest of
the SNAP program is promoting the shift from ODSs to alternatives
posing lower overall risk and that are currently or potentially
available (59 FR 13044). Today's proposal to list HCFC-22 and HCFC-142b
as unacceptable substitutes for HCFC-141b in certain foam applications
and as unacceptable substitutes for CFCs in all foam end uses is based
on EPA's finding that the use of HCFC-22 and HCFC-142b in applications
where non-ozone depleting alternatives are technically viable and
commercially available, would contribute to unnecessary depletion of
the ozone layer, and will delay the transition to alternatives that
pose lower overall risk to the health and the environment. EPA is
allowing existing users of HCFC-22 and HCFC-142b to continue use until
no later than January 1, 2010 to ensure that they will be able to
adjust their manufacturing processes to safely accommodate the use of
non-ODP alternatives.

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866, (58 FR 51,735 (October 4, 1993)) the
Agency must determine whether the regulatory action is ``significant''
and therefore subject to the Office of Management and Budget (OMB)
review and the requirements of the Executive Order. The Order defines
``significant regulatory action'' as one that is likely to result in a
rule that may:
    (1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
    (2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
    (4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.

    Pursuant to the terms of Executive Order 12866, OMB has notified
EPA that it considers this proposal a ``significant regulatory action''
within the meaning of the Executive Order. EPA has submitted this
action to OMB for review. Changes made in response to OMB suggestions
or recommendations will be documented in the public record.

B. Paperwork Reduction Act

    The Office of Management and Budget (OMB) has approved the
information collection requirements contained in this rule under the
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and
has assigned OMB control number 2060-0226.
    This action does not impose any new information collection burden.
OMB has previously approved the information collection requirements
contained in the existing regulations in subpart G of 40 CFR part 82
under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et
seq. and has assigned OMB control number 2060-0226. This Information
Collection Request (ICR) included five types of respondent reporting
and recordkeeping activities pursuant to SNAP regulations: submission
of a SNAP petition, filing a SNAP/Toxic Substances Control Act (TSCA)
Addendum, notification for test marketing activity, recordkeeping for
substitutes acceptable subject to use restrictions, and recordkeeping
for small volume uses.
    Copies of the ICR document(s) may be obtained from Susan Auby, by
mail at the Office of Environmental Information, Office of Information
Collection, Collection Strategies Division; U.S. Environmental
Protection Agency (2822T); 1200 Pennsylvania Ave., NW., Washington, DC
20460, by e-mail at<EMAIL_ADDRESS>or by calling<PHONE_NUMBER>. A
copy may also be downloaded off the internet at http://www.epa.gov/icr.

Include the ICR and/or OMB number in any correspondence.
    Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
    An Agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

C. Regulatory Flexibility Act

    The RFA requires an agency to prepare a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements under the Administrative Procedure Act (APA) or any other
statute unless the agency certifies that the rule will not have a
significant economic impact on a substantial number of small entities.
Small entities include small businesses, small organizations, and small
governmental jurisdictions.
    For purposes of assessing the impacts of today's rule, a small
entity is defined as:
    (1) A small business that has fewer than 500 employees;
    (2) A small governmental jurisdiction that is a government of a
city, county, town, school district or special district with a
population of less than 50,000; and
    (3) A small organization that is any not-for-profit enterprise
which is independently owned and operated and is not dominant in its
field.
    The types of businesses that are subject to today's final rule
include businesses that manufacture polyurethane/polyisocyanurate foam
systems (NAICS 326150) and businesses that use polyurethane/
polyisocyanurate systems to apply insulation to buildings, roofs,
pipes, etc. (NAICS 326150).
    After considering the economic impacts of today's proposed rule on
small entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. EPA does not
believe that small businesses will be adversely impacted by this
proposal. The majority of the small businesses in the foam industry
operate in the polyurethane foam sector as opposed to the extruded
polystyrene foam sector (this rule covers both sectors). In the context
of this proposal, small businesses (if they are still using an HCFC at
all) are likely using HCFC-22 to manufacture pour foam applications
such as commercial refrigeration, sandwich panels, and slabstock and
``other'' foam. As explained below, the polyurethane pour foam sector
operates differently than other SNAP sectors in that a small number of
companies supply a much larger number of actual pour foam
manufacturers.
    There are approximately 20 formulators in the U.S. that supply pour
foam manufacturers foam systems which consist of two drums of
ingredients including the blowing agent (e.g., HCFC-22). Some of the
formulators are large businesses but many are small and their
customers, the manufacturers, number in the thousands. The pour foam
manufacturers use the foam system to produce the actual foam product
(e.g., vending machine or metal panel). In this situation, the
formulators are responsible for implementing alternatives to the ozone-
depleting blowing agent and providing the pour foam manufacturers with
systems that produce foam meeting the necessary requirements, technical
or otherwise. However, both the formulators and pour foam manufacturers
are subject to SNAP regulations because both use the blowing agent.
    Information in the docket OAR-2004-0507 demonstrates that non-ODP
alternatives are technically viable and commercially available. In
fact, small businesses at both the formulator and pour foam
manufacturer levels are already supplying and using non-ODP
alternatives in applications such as commercial refrigeration, sandwich
panels and slabstock and ``other'' foam. Therefore, those small
businesses will not be adversely affected by the proposal to find HCFC-
22 and HCFC-142b unacceptable for use because they have already
implemented alternatives.
    Equally, those small businesses that are still using HCFC-22 in
pour foam applications will not be significantly impacted by this
rulemaking. It is estimated that there are thousands of pour foam
manufacturers, many of which are small businesses. However, these
manufacturers will not be adversely impacted by this proposed rule
because they buy their pour foam systems from the approximately 20 pour
foam formulators discussed above. It is those 20 formulators that are
responsible for implementing the alternatives to ozone depleting
blowing agents (HCFC-22 and HCFC-142b) and providing a foam system to
the pour foam manufacturers that meets all technical and performance
requirements.
    In addition, manufacturers and users of HCFCs have had more than 10
years to prepare for the January 1, 2010 deadline for phasing out
production of HCFC-22 and HCFC-142 in the U.S. since the HCFC phaseout
schedule was

established by a separate EPA regulation in 1993 (58 FR 65018). Today's
proposal does not effect that long-standing phaseout date but rather
would allow continued use of these chemicals until the phaseout
deadline of January 1, 2010. Furthermore, the costs of the HCFC
phaseout and the transition to non-ozone depleting alternatives were
accounted for in a Regulatory Impact Analysis (RIA) that was performed
in 1993 for the phaseout rule mentioned above. A memo found in the
docket at OAR-2004-0507-0012 details the impacts of this proposal,
including a discussion of the related 1993 phaseout rule and RIA, on
both the pour foam formulators and pour foam manufacturers and
concludes there will not be significant impact on a substantial number
of small businesses. In fact, most formulators that are still using
HCFC-22 and/or HCFC-142b have also implemented alternatives and sell
both types of systems to their customers, the manufacturers (OAR-2004-
0507-0008). Based on this, it is clear that alternatives to ODS have
been identified and there are no technical constraints to implementing
those alternatives.
    Although this proposed rule will not have a significant economic
impact on a substantial number of small entities, EPA nonetheless has
tried to further reduce the impact of this rule on small entities.
Based on acceptability decisions in previous final rules, the Agency
believes that some existing users of HCFC-22 and HCFC-142b, including
small businesses, invested in good faith in SNAP-approved alternatives
that EPA now finds unacceptable. Accordingly, it is appropriate for EPA
to balance their interest against our statutory obligation to
facilitate the transition away from ozone depleting chemicals as
required by the four part test established in Sierra Club v. EPA.
Grandfathering existing users of HCFC-22 and HCFC-142b, some of which
are small businesses, allows those users approximately four years to
transition to ozone-friendly alternatives. This is the time cited by
small businesses when explaining their transition process in comments
to separate but related rulemakings (see Air Docket A-2000-18) as well
as being the time that has been needed for the transitions from other
ODS, the most recent one being HCFC-141b.
    Grandfathering existing use of HCFC-22 and HCFC-142b until January
1, 2010 aligns the unacceptability determination with the production
phaseout date of those two chemicals. In many cases, companies plan
their transition to non-ODP alternatives around the production and
import phaseout deadline, due to both the greatly restricted supply and
higher prices associated with the phased out ODS. Companies, in
commenting on EPA's 2000 proposal to find HCFC-22 and HCFC-142b
unacceptable as substitutes for CFCs objected to the fact that EPA was
proposing an unacceptability determination before the production and
import phaseout. Those commenters suggested EPA move the
unacceptability determination to a later date that was in line with the
phaseout (i.e., January 1, 2010). The 2003 phaseout of HCFC-141b
demonstrated that restricted supply of that chemical resulted in higher
prices for the foam sector which inevitably had some impact on the
small businesses both at the formulator and manufacturer level. This
proposed unacceptability determination would avoid that situation and
level the playing field in the foam industry by requiring all
businesses to transition from HCFC-22 and HCFC-142b on the same date,
and in accordance with the production and import phaseout date (the
date many of them are likely planning on completing their transition).
Therefore, this proposal does not place any additional burden on
existing users of HCFC-22 and HCFC-142b in the foam sector that have
both had sufficient advance notice and had planned to transition to
non-ODP alternatives on or before the production phaseout date.
    As discussed in the preamble and noted in the docket, there are
numerous alternatives that are technically viable and available for all
foam applications. In fact, some users have already transitioned away
from HCFC-22 and HCFC-142b, particularly in pour foam applications
(Docket  OAR-2004-0507, Documents 0004 through 0011). The
actions proposed here may well provide benefits to small businesses who
have transitioned to alternatives and made good faith efforts and
investments in the transition because they will be able to compete on a
level playing field with those that are still using ODS blowing agents.
EPA continues to be interested in the potential impacts of the proposed
rule on small entities, and welcome comments on issues related to such
impacts.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires EPA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective or least burdensome alternative
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
Federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.
    EPA has determined that this rule does not contain a Federal
mandate that may result in expenditures of $100 million or more for
State, local, and tribal governments, in the aggregate, or the private
sector in any one year. Today's proposed rule does not affect State,
local, or tribal governments. The enforceable requirements of the rule
for the private sector affect only a small number of foam manufacturers
that could potentially have switched to use HCFC-22 and HCFC-142b in
the United States and those currently using HCFC-22 and HCFC-142b. With
regard to potential new users, there are technically viable
alternatives for those manufacturers. With regard to existing users,
there are viable alternatives that will be feasible to use once the
manufacturers have made the necessary adjustments to its facility and
products. The impact of this rule on the private sector is less than
$100 million per year. Thus, today's rule is not subject to the
requirements of sections 202 and 205 of the UMRA. EPA has determined
that this rule contains no regulatory

requirements that might significantly or uniquely affect small
governments. This regulation applies directly to facilities that use
these substances and not to governmental entities.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255 (August
10, 1999)), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
    This proposed rule does not have federalism implications. It will
not have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. This proposal applies directly
to facilities that use these substances and not to governmental
entities. Thus, Executive Order 13132 does not apply to this rule. In
the spirit of Executive Order 13132, and consistent with EPA policy to
promote communications between EPA and State and local governments, EPA
specifically solicits comment on this proposed rule from State and
local officials.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249 (November 9, 2000)),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' This proposed rule does not
have tribal implications, as specified in Executive Order 13175.
Today's proposal applies directly to facilities that use these
substances and does not significantly or uniquely affect the
communities of Indian tribal governments. Thus, Executive Order 13175
does not apply to this rule.

G. Executive Order 13045: Protection of Children From Environmental
Health & Safety Risks

    Executive Order 13045: Protection of Children from Environmental
Health & Safety Risks (62 FR 19885 (April 23, 1997)) applies to any
rule that: (1) Is determined to be ``economically significant'' as
defined under Executive Order 12866, and (2) concerns an environmental
health or safety risk that EPA has reason to believe may have a
disproportionate effect on children. If the regulatory action meets
both criteria, the Agency must evaluate the environmental health or
safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.
    This proposed rule is not subject to the Executive Order because it
is not economically significant as defined in Executive Order 12866,
and because the Agency does not have reason to believe the
environmental health or safety risks addressed by this action present a
disproportionate risk to children. The use of HCFC-22 and HCFC-142b in
foam manufacture occurs in the workplace where we expect adults are
more likely to be present than children, and thus, the agents do not
put children at risk disproportionately.

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

    This rule is not a ``significant energy action'' as defined in
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355
(May 22, 2001)) because it is not likely to have a significant adverse
effect on the supply, distribution, or use of energy. This action would
impact the manufacture of foam using HCFC-22 and HCFC-142b. Further, we
have concluded that this rule is not likely to have any adverse energy
effects.

I. National Technology Transfer Advancement Act

    As noted in the proposed rule, Section 12(d) of the National
Technology Transfer and Advancement Act of 1995 (``NTTAA''), Public Law
104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use
voluntary consensus standards in its regulatory activities unless to do
so would be inconsistent with applicable law or otherwise impractical.
Voluntary consensus standards are technical standards (e.g., materials
specifications, test methods, sampling procedures, and business
practices) that are developed or adopted by voluntary consensus
standards bodies. The NTTAA directs EPA to provide Congress, through
OMB, explanations when the Agency decides not to use available and
applicable voluntary consensus standards. This action does not involve
technical standards. Therefore, EPA did not consider the use of any
voluntary consensus standards.

VI. Additional Information

    For more information on EPA's process for administering the SNAP
program or criteria for evaluation of substitutes, refer to the SNAP
final rulemaking published in the Federal Register on March 18, 1994
(59 FR 13044). Notices and rulemakings under the SNAP program, as well
as EPA publications on protection of stratospheric ozone, are available
from EPA's Ozone Depletion Web site at ``http://www.epa.gov/ozone/''

and from the Stratospheric Protection Hotline number at<PHONE_NUMBER>.

List of Subjects in 40 CFR Part 82

    Environmental protection, Administrative practice and procedure,
Air pollution control, Reporting and recordkeeping requirements.

    Dated: October 28, 2005.
Stephen L. Johnson,
Administrator.
    For the reasons set out in the preamble, 40 CFR part 82 is proposed
to be amended as follows:

PART 82--PROTECTION OF STRATOSPHERIC OZONE

    1. The authority citation for part 82 continues to read as follows:

    Authority: 42 U.S.C. 7414, 7601, 7671-7671q.

Subpart G--Significant New Alternatives Policy Program

    2. Subpart G is amended by adding Appendix N to read as follows:
    Appendix N to Subpart G of Part 82--Unacceptable Substitutes Listed
in the [date of publication of final rule in the Federal Register]
final rule, effective [date 60 days after Federal Register publication
date of final rule].

                                      Foam Blowing Unacceptable Substitutes
----------------------------------------------------------------------------------------------------------------
            End-use                         Substitute                       Decision               Comments
----------------------------------------------------------------------------------------------------------------
Replacements for HCFC-141b in   HCFC-22, HCFC-142b................  Unacceptable \1\..........  Alternatives
 the following rigid                                                                             exist with
 polyurethane applications:                                                                      lower or zero-
                                                                                ODP.
    --Commercial Refrigeration
    --Sandwich Panels
    --Slabstock and Other
     Foams
Replacements for CFCs in the    HCFC-22, HCFC-142b................  Unacceptable \2\..........  Alternatives
 following foam applications:                                                                    exist with
                                                                                lower or zero-
                                                                                ODP.
    --Rigid polyurethane and
     polyisocyanurate
     laminated boardstock
    --Rigid polyurethane
     appliance
    --Rigid polyurethane spray
     and commercial
     refrigeration, and
     sandwich panels
    --Rigid polyurethane
     slabstock and other foams
    --Polystyrene extruded
     insulation boardstock and
     billet
    --Phenolic insulation
     board and bunstock
    --Flexible polyurethane
    --Polystyrene extruded
     sheet
----------------------------------------------------------------------------------------------------------------
\1\ The unacceptability determination is effective on January 1, 2010 for existing users of HCFC-22 and HCFC-
  142b as of November 4, 2005 of this proposed rule.
\2\ The unacceptability determination is effective on January 1, 2010 for existing users of HCFC-22 and HCFC-
  142b as of November 4, 2005 of this proposed rule.

[FR Doc. 05-21927 Filed 11-3-05; 8:45 am]

BILLING CODE 6560-50-P


[Federal Register: November 20, 2009 (Volume 74, Number 223)]
[Rules and Regulations]
[Page 60153-60154]
[DOCID:fr20no09-5]

=======================================================================
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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 358

[Docket No. RM07-1-002; Order No. 717-B]

Standards of Conduct for Transmission Providers; Order on
Rehearing and Clarification

Issued November 16, 2009.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Order on rehearing and clarification.

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

SUMMARY: The Federal Energy Regulatory Commission (Commission) issued
Order No. 717-A to make even clearer the Standards of Conduct as
implemented by Order No. 717. This order addresses requests for
rehearing and clarification concerning paragraph 80 of Order No. 717-A
and whether an employee who is not making business decisions about
contract non-price terms and conditions is considered a ``marketing
function employee.''

DATES: Effective Date: This rule will become effective November 23,
2009.

FOR FURTHER INFORMATION CONTACT: Leonard Tao, Office of the General
Counsel--Energy Markets, Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

129 FERC ] 61,123
Before Commissioners: Jon Wellinghoff, Chairman; Suedeen G. Kelly,
Marc Spitzer, and Philip D. Moeller.

I. Introduction

    1. On October 16, 2008, the Commission issued Order No. 717
amending the Standards of Conduct for Transmission Providers (the
Standards of Conduct or the Standards) to make them clearer and to
refocus the rules on the areas where there is the greatest potential
for abuse.\1\ On October 15, 2009, the Commission issued Order No. 717-
A to address requests for rehearing and clarification of Order No. 717,
largely affirming the reforms adopted in Order No. 717.\2\ In this
order, the Commission grants limited rehearing and clarification to
address certain specific matters petitioners raised regarding one of
the Commission's determinations in Order No. 717-A.
---------------------------------------------------------------------------

    \1\ Standards of Conduct for Transmission Providers, Order No.
717, 73 FR 63796 (Oct. 27, 2008), FERC Stats. & Regs. ] 31,280
(2008) (``Order No. 717'').
    \2\ Standards of Conduct for Transmission Providers, Order No.
717-A, 74 FR 54463 (Oct. 22, 2009), FERC Stats. & Regs. ] 31,297
(2009) (``Order No. 717-A'').
---------------------------------------------------------------------------

II. Discussion

Independent Functioning Rule: Marketing Function Employees

    2. In paragraph 80 of Order No. 717-A, the Commission stated the
following:

    The Commission clarifies that an employee in the legal, finance
or regulatory division of a jurisdictional entity, whose
intermittent day-to-day duties include the drafting and redrafting
of non-price terms and conditions of, or exemptions to, umbrella
agreements is a ``marketing function employee.'' ``Marketing
functions'' are not limited to only price terms and conditions of a
contract, because non-price terms and conditions of a contract could
contain information that an affiliate could use to its advantage.
For example, delivery or hub locations in a contract are non-price
terms that could be used to favor an affiliate. In addition,
negotiated terms and conditions could affect the substantive rights
of the parties. For this reason, we decline to make a generic
finding to limit ``marketing functions'' to only price terms and
conditions, but will consider waiver requests concerning an employee
whose intermittent duties involve drafting non-price terms and
conditions.\3\
---------------------------------------------------------------------------

    \3\ Order No. 717-A at P 80.
---------------------------------------------------------------------------

Requests for Rehearing and Clarification

    3. Several parties have requested expedited clarification regarding
paragraph 80 of Order No. 717-A.\4\ Specifically, EEI and Western
Utilities request that the Commission clarify that legal, finance, and
regulatory personnel can be shared between an entity's transmission and
marketing function units.\5\ Similarly, Otter Tail and Central Vermont
seek clarification that lawyers, finance, and regulatory personnel may
continue to provide support to

marketing function employees, including drafting and redrafting
contract non-price terms, without being classified as marketing
function employees.\6\
---------------------------------------------------------------------------

    \4\ Edison Electric Institute (EEI) Oct. 30, 2009 Request for
Clarification at 7; The Western Utilities Compliance Group (Western
Utilities) Nov. 2, 2009 Request for Clarification at 6; Otter Tail
Power Company (Otter Tail) Nov. 10, 2009 Request for Clarification
at 1; Central Vermont Public Service Corporation (Central Vermont)
Nov. 12, 2009 Request for Clarification at 1.
    \5\ EEI at 7; Western Utilities at 6.
    \6\ Otter Tail at 1; Central Vermont at 1.
---------------------------------------------------------------------------

    4. EEI also requests clarification that paragraph 80 in Order No.
717-A was ``intended to convey that making business decisions about
non-price terms and conditions can be a marketing function if the other
`marketing function' criteria are met.'' \7\
---------------------------------------------------------------------------

    \7\ EEI at 7-8.
---------------------------------------------------------------------------

    5. If the Commission does not grant these requested clarifications
prior to Order No. 717-A taking effect, EEI, Western Utilities, Otter
Tail, and Central Vermont request that the Commission change the
effective date of paragraph 80 until 90 days after the Commission
issues an order addressing the merits of the issue.

Commission Determination

    6. The Commission clarifies that the language in paragraph 80 of
Order No. 717-A was overly broad. The Commission further clarifies that
we intended to state in paragraph 80 of Order No. 717-A that an
employee making business decisions about non-price terms and conditions
can be considered a ``marketing function employee'' because that
employee is actively and personally engaged in marketing functions.
However, an employee who simply drafts or redrafts a contract,
including non-price terms and conditions, without making business
decisions is not a ``marketing function employee.'' In making our
findings in paragraph 80 in Order No. 717-A, the Commission did not
intend to depart from the finding in paragraph 131 in Order No. 717
that employees are not subject to the Independent Functioning Rule if
they do not perform transmission functions or marketing functions or to
depart from the following examples in P 131:

    [I]f an attorney is rendering legal advice, he may consult with
both transmission function employees and marketing function
employees. Likewise, a risk management employee may develop risk
guidelines for both transmission function employees and marketing
function employees. And regulatory personnel may present before
regulatory bodies filings that cover both transmission and marketing
issues. Of course, all such employees would remain subject to the No
Conduit Rule, and are prohibited from transmitting transmission
function information to marketing function employees.\8\
---------------------------------------------------------------------------

    \8\ Order No. 717 at P 131.

    7. In light of the above clarification to paragraph 80 of Order No.
717-A, we will deny the petitioners' request to extend the compliance
date with respect to paragraph 80.

III. Document Availability

    8. 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 FERC's Home Page (http://www.ferc.gov) and in FERC'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.
    9. From FERC'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 in the docket
number field.
    10. User assistance is available for eLibrary and the FERC's Web
site during normal business hours from FERC Online Support at 202-502-
6652 (toll free at 1-866-208-3676) or e-mail at
<EMAIL_ADDRESS>or the Public Reference Room at (202) 502-
8371, TTY<PHONE_NUMBER>. E-mail the Public Reference Room at
<EMAIL_ADDRESS>
IV. Effective Date

    11. Changes to Order No. 717-A adopted in this order on rehearing
and clarification are effective November 23, 2009.

    By the Commission.

Kimberly D. Bose,
Secretary.
[FR Doc. E9-27875 Filed 11-19-09; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register: January 2, 2008 (Volume 73, Number 1)]
[Proposed Rules]
[Page 125-126]
[DOCID:fr02ja08-24]

=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2007-1074, FRL-8504-7]

Revisions to the California State Implementation Plan, Monterey
Bay Unified Air Pollution Control District and San Joaquin Valley Air
Pollution Control District

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve revisions to the Monterey Bay
Unified Air Pollution Control District (MBUAPCD) and San Joaquin Valley
Air Pollution Control District (SJVAPCD) portions of the California
State Implementation Plan (SIP). Under authority of the Clean Air Act
as amended in 1990 (CAA or the Act), we are proposing to approve local
rules that address circumvention, reduction of animal matter, and
volatile organic compound (VOC) emissions from gasoline bulk storage
tanks, gasoline filling stations, petroleum refinery equipment, and
petroleum solvent dry cleaning.

DATES: Any comments on this proposal must arrive by February 1, 2008.

ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-
2007-1074, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.

Follow the on-line instructions.
     E-mail<EMAIL_ADDRESS>     Mail or deliver: Andrew Steckel (Air-4), U.S.
Environmental Protection Agency Region IX, 75 Hawthorne Street, San
Francisco, CA 94105.
    Instructions: All comments will be included in the public docket
without change and may be made available online at http://www.regulations.gov
, including any personal information provided,

unless the comment includes Confidential Business Information (CBI) or
other information whose disclosure is restricted by statute.
Information that you consider CBI or otherwise protected should be
clearly identified as such and should not be submitted through http:// www.regulations.gov or e-mail. http://www.regulations.gov is an

``anonymous access'' system, and EPA will not know your identity or
contact information unless you provide it in the body of your comment.
If you send e-mail directly to EPA, your e-mail address will be
automatically captured and included as part of the public comment. If
EPA cannot read your comment due to technical difficulties and cannot
contact you for clarification, EPA may not be able to consider your
comment.
    Docket: The index to the docket for this action is available
electronically at http://www.regulations.gov and in hard copy at EPA

Region IX, 75 Hawthorne Street, San Francisco, California. While all
documents in the docket are listed in the index, some information may
be publicly available only at the hard copy location (e.g., copyrighted
material), and some may not be publicly available in either location
(e.g., CBI). To inspect the hard copy materials, please schedule an
appointment during normal business hours with the contact listed in the
FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Al Petersen, Permits Office (AIR-4),
U.S. Environmental Protection Agency, Region IX,<PHONE_NUMBER>,
<EMAIL_ADDRESS>

SUPPLEMENTARY INFORMATION: This proposal addresses the approval of
MBUAPCD Rules 415, 418, and 1002 and SJVAPCD Rules 4104, 4402, 4404,
4453, 4454, 4625, 4641, and 4672. In the Rules and Regulations section
of this Federal Register, we are approving these local rules in a
direct final action without prior proposal because we believe this SIP
revision is not controversial. If we receive adverse comments, however,
we will publish a timely withdrawal of the direct final rule and
address the comments in subsequent action based on this proposed rule.
    Please note that if EPA receives adverse comment on an amendment,
paragraph, or section of this rule and if that provision may be severed
from the remainder of the rule, EPA may adopt as final those provisions
of the rule that are not the subject of an adverse comment.
    We do not plan to open a second comment period, so anyone
interested in commenting should do so at this time. If we do not
receive adverse comments, no further activity is planned. For further
information, please see the direct final action.

    Dated: November 16, 2007.
Laura Yoshii,
Acting Regional Administrator, Region IX.
 [FR Doc. E7-25100 Filed 12-31-07; 8:45 am]

BILLING CODE 6560-50-P


[Federal Register Volume 87, Number 204 (Monday, October 24, 2022)]
[Notices]
[Pages 64294-64295]
[FR Doc No: 2022-23071]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96102; File No. 4-698]

Joint Industry Plan; Notice of Withdrawal of Amendment to the
National Market System Plan Governing the Consolidated Audit Trail

October 19, 2022.

I. Introduction

    On May 20, 2022, the Operating Committee for Consolidated Audit
Trail, LLC (``CAT LLC''), on behalf of the following parties to the
National Market

System Plan Governing the Consolidated Audit Trail (the ``CAT NMS
Plan''): \1\ BOX Exchange LLC; Cboe BYX Exchange, Inc., Cboe BZX
Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc.,
Cboe C2 Exchange, Inc., Cboe Exchange, Inc., Financial Industry
Regulatory Authority, Inc., Investors Exchange LLC, Long-Term Stock
Exchange, Inc., Miami International Securities Exchange LLC, MEMX LLC,
MIAX Emerald, LLC, MIAX PEARL, LLC, Nasdaq BX, Inc., Nasdaq GEMX, LLC,
Nasdaq ISE, LLC, Nasdaq MRX, LLC, Nasdaq PHLX LLC, The NASDAQ Stock
Market LLC, New York Stock Exchange LLC, NYSE American LLC, NYSE Arca,
Inc., NYSE Chicago, Inc., and NYSE National, Inc. (collectively, the
``Participants'') filed with the Securities and Exchange Commission
(``Commission'') pursuant to Section 11A(a)(3) of the Exchange Act,\2\
and Rule 608 thereunder,\3\ a proposed amendment (``Proposed
Amendment'') to the CAT NMS Plan that would authorize CAT LLC to revise
the Consolidated Audit Trail Reporter Agreement and the Consolidated
Audit Trail Reporter Agent Agreement by: (1) removing the arbitration
provision from each agreement and replacing it with a forum selection
provision, which would require that any dispute regarding CAT reporting
be filed in a United States District Court for the Southern District of
New York, or, in the absence of federal subject matter jurisdiction, a
New York State Supreme Court within the First Judicial Department; (2)
adding a jury waiver provision; (3) adding a disclaimer of warranties
clause; and (4) revising the existing choice of law clause to provide
that any dispute will be governed by federal law (in addition to New
York law).\4\ The Proposed Amendment was published for comment in the
Federal Register on June 9, 2022.\5\
---------------------------------------------------------------------------

    \1\ The CAT NMS Plan is a national market system plan approved
by the Commission pursuant to Section 11A of the Securities Exchange
Act of 1934 (``Exchange Act'') and the rules and regulations
thereunder. See Securities Exchange Act Release No. 79318 (Nov. 15,
2016), 81 FR 84696 (Nov. 23, 2016). The CAT NMS Plan functions as
the limited liability company agreement of the jointly owned limited
liability company (CAT LLC) formed under Delaware state law through
which the Participants conduct the activities of the CAT. On August
29, 2019, the Participants replaced the CAT NMS Plan in its entirety
with the limited liability company agreement of a new limited
liability company named Consolidated Audit Trail, LLC. The latest
version of the CAT NMS Plan is available at https://catnmsplan.com/about-cat/cat-nms-plan.
    \2\ 15 U.S.C. 78k-1(a)(3).
    \3\ 17 CFR 242.608.
    \4\ See Letter from Michael Simon, Chair, CAT NMS Plan Operating
Committee, to Vanessa Countryman, Secretary, Commission, dated May
20, 2022.
    \5\ See Notice of Filing of Amendment to the National Market
System Plan Governing the Consolidated Audit Trail, Securities
Exchange Act Release No. 95031 (June 3, 2022), 87 FR 35273 (June 9,
2022) (``Notice''). Comments received in response to the Notice can
be found on the Commission's website at https://www.sec.gov/comments/4-698/4-698-b.htm.
---------------------------------------------------------------------------

    The Commission is publishing this notice to reflect that on
September 6, 2022, prior to the end of the 90-day period provided for
in Exchange Act Rule 608(b)(2)(i),\6\ the Participants withdrew the
Proposed Amendment.\7\
---------------------------------------------------------------------------

    \6\ 17 CFR 242.608(b)(2)(i).
    \7\ See Letter from Michael Simon, Chair, CAT NMS Plan Operating
Committee, to Vanessa Countryman, Secretary, Commission, dated
September 6, 2022.

    By the Commission.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-23071 Filed 10-21-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 26 (Wednesday, February 8, 2012)]
[Notices]
[Page 6610]
[FR Doc No: 2012-2812]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66308; File No. SR-NYSEAmex-2012-02]

Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex
Options Rule 902NY To Create a Reserve Floor Market Maker Amex Trading
Permit

AGENCY: Securities and Exchange Commission.

ACTION: Notice; correction.

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

SUMMARY: The Securities and Exchange Commission published a document in
the Federal Register on January 31, 2012 concerning a Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex
Options Rule 902NY To Create a Reserve Floor Market Maker Amex Trading
Permit by NYSEAmex LLC. An incorrect release number was assigned to
that document.

FOR FURTHER INFORMATION CONTACT: Office of the Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549, (202)
551-5400.

Correction

    In the Federal Register of January 31, 2012, in FR Doc. 2012-2036,
on page 4848, in the middle column, in the 14th line, the release
number is corrected to read as noted above.

    Dated: February 2, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-2812 Filed 2-7-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 77 (Wednesday, April 22, 2015)]
[Notices]
[Pages 22510-22511]
[FR Doc No: 2015-09223]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. AC15-78-000]

AEP Generation Resources Inc.; Notice of Request for Waiver

    Take notice that on April 10, 2015, AEP Generation Resources Inc.
submitted a request for a waiver of the reporting requirements for
Federal Energy Regulatory Commission (FERC) Form 1 and Form 3-Q for
calendar year 2015.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211 or 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as

appropriate. Such notices, motions, or protests must be filed on or
before the comment date. On or before the comment date, it is not
necessary to serve motions to intervene or protests on persons other
than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov. Persons unable to file electronically should submit an
original and 5 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive email
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please email
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5:00 p.m. Eastern Time on May 1, 2015.

    Dated: April 15, 2015.
Kimberly D. Bose,
 Secretary.
[FR Doc. 2015-09223 Filed 4-21-15; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 77, Number 247 (Wednesday, December 26, 2012)]
[Notices]
[Pages 76128-76129]
[FR Doc No: 2012-30981]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68473; File No. SR-Phlx-2012-140]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the Permit and Order Entry Port Fee

December 19, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 12, 2012, NASDAQ OMX PHLX LLC (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to amend the Permit Fee and Order Entry Port
Fee.
    While changes to the Pricing Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated the proposed
amendment to be operative on January 2, 2013.
    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxphlx.cchwallstreet.com/, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The purpose of the proposed rule change is to increase the Permit
Fee in Section VI, entitled ``Membership Fees'' at Part A entitled
``Permit and Registration Fees'' of the Pricing Schedule to recoup
costs associated with the administration of the Exchange's members. The
Exchange also proposes to amend Section VII entitled ``Other Member
Fees'' at Part B entitled ``Port Fees'' of the Pricing Schedule to
increase the Order Entry Port \3\ Fee. The Exchange believes that this
increase is necessary to keep pace with escalating technology costs.
---------------------------------------------------------------------------

    \3\ The Order Entry Port Fee is a connectivity fee assessed on
members in connection with routing orders to the Exchange via an
external order entry port. Members access the Exchange's network
through order entry ports. A member organization may have more than
one order entry port.
---------------------------------------------------------------------------

Permit Fee
    The Exchange assesses two different Permit Fees based on whether a
member or member organization is transacting business on the Exchange.
The Exchange assesses members and member organizations that are
transacting business on the Exchange a Permit Fee of $2,000 per month.
A member or member organization will be assessed the $2,000 monthly
Permit Fee if that member or member organization: (1) Transacts its
option orders in its assigned Phlx house account in a particular month;
or (2) is a clearing member of The Options Clearing Corporation or a
Floor Broker; or (3) for those member organizations which are under
common ownership, transacts at least one options trade in a Phlx house
account that is assigned to one of the member organizations under
common ownership.\4\ The Exchange assesses members and member
organizations that are not transacting business on the Exchange a
Permit Fee of $7,500 per month. A member or member organization is
assessed the $7,500 Permit Fee for not transacting business on the
Exchange if that member is either: (i) Not a PSX Only Participant; \5\
or (ii) not engaged in an options business at Phlx in a particular
month. In addition, a member or member organization that sponsors an
options participant \6\ would pay an additional Permit Fee for each
sponsored options participant.
---------------------------------------------------------------------------

    \4\ For purposes of the Permit Fee, ``common ownership'' is
defined as at least 75% common ownership between the member
organizations.
    \5\ Applicants that apply for membership solely to participate
in the NASDAQ OMX PSX equities market are not assessed a Permit Fee,
Application Fee, Initiation Fee, or Account Fee. See Securities
Exchange Act Release No. 61863 (April 7, 2010), 75 FR 20021 (April
16, 2010) (SR-Phlx-2010-54).
    \6\ See Exchange Rule 1094 titled Sponsored Participants. A
Sponsored Participant may obtain authorized access to the Exchange
only if such access is authorized in advance by one or more
Sponsoring Member Organizations. Sponsored Participants must enter
into and maintain participant agreements with one or more Sponsoring
Member Organizations establishing a proper relationship(s) and
account(s) through which the Sponsored Participant may trade on the
Exchange.
---------------------------------------------------------------------------

    The Exchange is proposing to increase the $2,000 Permit Fee for
members transacting business on the Exchange to $2,100 per month. The
Exchange is seeking to recoup costs incurred from the membership
administration function.\7\
---------------------------------------------------------------------------

    \7\ The Exchange is not amending the Permit Fee for members who
are not transacting business on the Exchange.
---------------------------------------------------------------------------

Order Entry Port Fee
    The Exchange currently assesses an Order Entry Port Fee per month,
per mnemonic \8\ of $500. This fee is assessed on members regardless of
whether the order entry mnemonic is active \9\ during the billing
month. The fee is assessed regardless of usage, and solely on the
number of order entry ports assigned to each member organization.\10\
The Exchange proposes to increase the Order Entry Port Fee from $500 to
$550 per month, per mnemonic. The Exchange believes that this increase
would allow the Exchange to keep pace with increasing technology costs.
---------------------------------------------------------------------------

    \8\ Order entry mnemonics are codes that identify member
organization order entry ports.
    \9\ An order entry mnemonic is considered active if a member
organization sends at least one order to the Exchange using that
order entry mnemonic during the applicable billing month. See
Securities Exchange Act Release No. 58728 (October 3, 2008), 73 FR
59695 (October 9, 2008) (SR-Phlx-2008-70).
    \10\ The Exchange waives the $500 per month per mnemonic Order
Entry Port Fee for mnemonics used exclusively for complex orders
where one of the components of the complex order is the underlying
security.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal to amend its Pricing
Schedule is consistent with Section 6(b) of the Act \11\ in general,
and furthers the objectives of Section 6(b)(4) of the Act \12\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members and other persons using its
facilities.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that the proposed increase to the Permit Fee
for members transacting business on the Exchange is reasonable because
the Exchange is seeking to recoup costs

related to membership administration. The proposed fee is in the range
of similar fees at other exchanges and less than other fees.\13\ In
addition, the Exchange believes that the Permit Fee is equitable and
not unfairly discriminatory, because unlike other exchanges, Phlx's
Permit Fees are the same for every options permit holder that is
conducting business at the Exchange. The Exchange also believes that
the increased fee is equitable and not unfairly discriminatory because
the Permit Fee for not transacting business on the Exchange remains
substantially higher as is the case today.
---------------------------------------------------------------------------

    \13\ See the Chicago Board Options Exchange, Incorporated's Fees
Schedule. Per month a Market Maker Trading Permit is $5,500, a SPX
Tier Appointment is $3,000, a VIX Tier Appointment if $2,000, a
Floor Broker Trading Permit is $9,000, an Electronic Access Permit
is $1,600 and there is no access fee for a CBSX Trading Permit. See
also the International Securities Exchange LLC's Schedule of Fees.
Per month an Electronic Access Member is assessed $500.00 for
membership and a market maker is assessed from $2,000 to $4,000 per
membership depending on the type of market maker. See also C2
Options Exchange, Incorporated's Fees Schedule. Per month, a market-
maker is assessed a $5,000 permit fee, an Electronic Access Permit
is assessed a $1,000 permit fee and a SPXM Tier appointment is
assessed a $4,000 fee after March 31, 2013. See also NYSE Arca,
Inc.'s Fee Schedule. Per month, a Floor Broker, Office and Clearing
Firm are assessed a $1,000 per month fee for the first Options
Trading Permit (``OTP'') and $250 thereafter, and a market maker is
assessed a $4,000 per month fee for one to four OTPs and $2,000
thereafter.
---------------------------------------------------------------------------

    The Exchange believes that the increase to the Order Entry Port Fee
is reasonable because it would allow the Exchange to keep pace with
increasing technology costs. The Exchange believes that the increase to
the Order Entry Port Fee is equitable and not unfairly discriminatory
because all members would be subject to the same fees and waivers
related to the Order Entry Port Fee.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed fee increases are
competitive with fees at other options exchanges.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\14\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-Phlx-2012-140 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2012-140. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml).
    Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly.
    All submissions should refer to File Number SR-Phlx-2012-140 and
should be submitted on or before January 16, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-30981 Filed 12-21-12; 4:15 pm]
BILLING CODE 8011-01-P