[Federal Register: June 29, 2009 (Volume 74, Number 123)]
[Notices]
[Page 31081-31085]
[DOCID:fr29jn09-114]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60158; File No. SR-BX-2009-028]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing of Proposed Rule Change To Adopt Rules To Implement the Options
Order Protection and Locked/Crossed Market Plan

June 22, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 16, 2009, the NASDAQ OMX BX, Inc. (``BX'' or
``Exchange''), filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend the Rules of the Boston Options
Exchange Group, LLC (``BOX'') to reflect the Exchange's filing to
become a participant in the proposed Options Order Protection and
Locked/Crossed Market Plan (``Decentralized Plan''). The text of the
proposed rule change is available from the principal office of the
Exchange, at the Commission's Public Reference Room and also on the
Exchange's Internet Web site at http://nasdaqomxbx.cchwallstreet.com/
NASDAQOMXBX/Filings/.

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 self-regulatory organization
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 those 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 parts of such statements.

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

1. Purpose
    The Exchange proposes to adopt certain rules and definitions
necessary to implement the proposed Decentralized Plan. The proposed
definitions and rules will replace current Chapter XII of the BOX Rules
in its entirety. The proposed rule changes will also amend various
other BOX Rules to accommodate the Decentralized Plan.

Background of the Decentralized Plan and Implementing Rules

    The Exchange is presently a party to the Plan for the Purpose of
Creating and Operating an InterMarket Option Linkage (``Linkage
Plan'').\3\ The purpose of the Linkage Plan is to enable the options
exchanges to act jointly in planning, developing, operating and
regulating the systems and data communications network that
electronically links the options exchanges to one another.\4\
Accordingly, current Chapter XII of the BOX Rules contains rule text
adopted specifically to achieve the purpose of the Linkage Plan.
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    \3\ See Securities Exchange Act Release No. 43086 (July 28,
2000), 65 FR 48023 (August 4, 2000) (File No. 4-429) (Order
approving the Linkage Plan and the original parties thereto). The
Exchange became a party to the Linkage Plan on January 14, 2004 by
executing a copy of said Linkage Plan with the Commission as well as
completing the other steps required. Terms not otherwise defined
herein shall have the meaning assigned to them in the BOX Rules, the
Decentralized Plan, or the Linkage Plan, respectively.
    \4\ The systems and data communications network that link
electronically the Eligible Exchanges for the purposes specified in
the former Linkage Plan shall be referred to as the ``OCC Hub''. See
proposed Chapter XII, Section 4(g)(3) of the BOX Rules. See also
proposed Chapter I, Section 1(a)(35) of the BOX Rules.
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    The Exchange proposes to amend Chapter XII of the BOX Rules, as
necessary, to reflect the Exchange's filing to become a plan
participant (``Plan Participant'') in the proposed Decentralized
Plan.\5\ Unlike the Linkage Plan which exclusively required use of the
OCC Hub, the purpose of the Decentralized Plan is to enable the Plan
Participants thereto to act jointly in establishing a framework for a
non-exclusive method of providing and achieving order protection and
addressing Locked and Crossed Markets in Eligible Options Classes. If
approved, the Decentralized Plan would completely replace the current
Linkage Plan.
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    \5\ See Securities Exchange Act Release No. 59647 (March 30,
2009), 74 FR 15010 (April 2, 2009) (File No. 4-546) (Joint Industry
Plan; Notice of Filing of Proposed Options Order Protection and
Locked/Crossed Market Plan). The Exchange will also seek, upon
approval of the Exchange's participation in the Decentralized Plan,
the Commission's approval to contemporaneously withdraw from the
Linkage Plan. This proposed rule change, if approved, will become
effective upon the Exchange's withdrawal from the current Linkage
Plan and the effectiveness of the new Decentralized Plan.
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Operation of the Decentralized Plan

    The Decentralized Plan essentially would apply the Regulation NMS
\6\ price-protection provisions to the options markets. Similar to
Regulation NMS, the Decentralized Plan would require Plan Participants
to adopt rules ``reasonably designed to prevent Trade-Throughs'', while
exempting Intermarket Sweep Orders (``ISOs'') from that prohibition.\7\
The proposed definition of an ISO is essentially the same as under
Regulation NMS.\8\ The remaining exceptions to the trade-through
prohibition, discussed more specifically below, either track those
under Regulation NMS or correspond to unique aspects of the options
market, or both.
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    \6\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496 (June 29, 2005).
    \7\ See Sections 5(a)(i) and 5(b)(iv) of the proposed
Decentralized Plan. See also proposed Chapter XII, Section 2(b)(4)
of the BOX Rules.
    \8\ See Section 2(9) of the proposed Decentralized Plan. See
also proposed Chapter XII, Section 1(g) of the BOX Rules which, as
proposed, defines the term ISO as ``a Limit Order for an options
series that, simultaneously with the routing of the ISO, one or more
additional ISOs, as necessary, are routed to execute against the
full displayed size of any Protected Bid, in the case of a Limit
order to sell, or any Protected Offer, in the case of a Limit order
to buy, for the options series with a price that is superior to the
limit price of the ISO''.
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Description of the Implementing Rules

    The proposal seeks to include rule text and definitions for certain
terms within Chapter XII designed to accomplish the purpose of the new
Decentralized Plan. As proposed, current Chapter XII rule text will be
removed and replaced completely with new Chapter XII rule text titled
``Order Protection; Locked and Crossed Markets''. The proposed `new'
Chapter XII will contain the following rules:

Chapter XII, Section 1--Definitions

    The proposed rule change incorporates all the operative definitions
from the Decentralized Plan into the BOX Rules. With one exception, the
parties to the Decentralized Plan derived all such definitions either
from the Linkage Plan\9\ or Regulation NMS.\10\ The one exception is
the definition of ``Complex Trade'' in Section 1(d). A ``Complex
Trade'' is exempt from trade-through liability. The exemption in the
Linkage Plan simply refers to complex trades ``as that term may be
defined by the [Linkage] Operating Committee from time to time.'' Based
on that provision, the Exchange adopted current Chapter XII, Section
1(c) of the BOX Rules, which is substantially identical to the rules of
the other options exchanges. The Exchange proposes to carry forward
that definition unchanged into the new proposed Chapter XII.
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    \9\ See e.g. the definitions of ``Broker/Dealer'' in Section
1(c), ``NBBO'' in Section 1(i), ``Non-Firm'' in Section 1(j), and
``OPRA Plan'' in Section 1(k).
    \10\ See e.g. the definitions of ``Best Bid'' and ``Best Offer''
in Section 1(a), ``Bid'' or ''Offer'' in Section 1(b), ``Intermarket
Sweep Order (``ISO'')'' in Section 1(g), and ``Quotation'' in
Section 1(p).
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Chapter XII, Section 2--Order Protection

    Proposed Chapter XII, Section 2(a) provides that, subject to
certain specified exceptions, Options Participants shall not effect
trade-throughs. Proposed paragraph (b) provides for the following
trade-through exceptions:
     System Issues: Section 5(b)(i) of the proposed
Decentralized Plan corresponds to the system-failure exception in
Regulation NMS \11\ for equity securities and permits trading through
an Eligible Exchange that is experiencing system problems.
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    \11\ See Rule 611(b)(l) under the Exchange Act.
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     Trading Rotations: Section 5(b)(ii) of the proposed
Decentralized Plan carries forward the current Trade-Through exception
in the Linkage Plan \12\ and is the options equivalent to the single
price opening exception in Regulation NMS for equity securities.\13\
Options exchanges use a trading rotation to open an option for trading,
or to reopen an option after a trading halt. The rotation is
effectively a single price auction to price the option and there are no
practical means to include prices on other exchanges in that auction.
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    \12\ See Section 8(c)(iii)(E) of the Linkage Plan.
    \13\ See Rule 611(b)(3) under the Exchange Act.
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     Crossed Markets: Section 5(b)(iii) corresponds to the
crossed quote exception in Regulation NMS for equity securities.\14\ If
a Protected Bid is higher than a Protected Offer, it indicates that
there is some form of market dislocation or inaccurate quoting.
Permitting transactions to be executed without regard to Trade-Throughs
in a Crossed Market will allow the market to quickly return to
equilibrium.
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    \14\ See Rule 611(b)(4) under the Exchange Act.
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     Intermarket Sweep Orders (``ISOs''): These two exceptions
correspond to the ISO exceptions in Regulation NMS for

equity securities.\15\ Section 5(b)(iv) of the proposed Decentralized
Plan permits a Plan Participant to execute orders it receives from
other Plan Participants or members that are marked as ISO even when it
is not at the NBBO. Section 5(b)(v) of the proposed Decentralized Plan
allows a Plan Participant to execute inbound orders when it is not at
the NBBO, provided it simultaneously ``sweeps'' all better-priced
interest displayed by Eligible Exchanges.
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    \15\ See Rule 611(b)(5) and (6) under the Exchange Act.
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     Quote Flickering: Section 5(b)(vi) of the proposed
Decentralized Plan corresponds to the flickering quote exception in
Regulation NMS for equity securities.\16\ Options quotations change as
rapidly, if not more rapidly, than equity quotations. Indeed, they
track the price of the underlying security and thus change when the
price of the underlying security changes. This exception provides a
form of ``safe harbor'' to market participants to allow them to trade
through prices that have changed within a second of the transaction
causing a nominal Trade-Through.
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    \16\ See Rule 611(b)(8) under the Exchange Act.
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     Non-Firm Quotes: Section 5(b)(vii) of the proposed
Decentralized Plan carries forward the current non-firm quote Trade-
Through exception in the Linkage Plan.\17\ By definition, an Eligible
Exchange's quotations may not be firm for automatic execution during
this trading state and thus should not be protected from Trade-
Throughs. In effect, these quotations are akin to ``manual quotations''
under Regulation NMS.
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    \17\ See Section 8(c)(iii)(C) of the Linkage Plan.
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     Complex Trades: Section 5(b)(viii) of the proposed
Decentralized Plan carries forward the current complex trade exception
in the Linkage Plan \18\ and will be implemented through rules adopted
by the Plan Participants and approved by the Commission. Complex trades
consist of multiple transactions (``legs'') effected at a net price,
and it is not practical to price each leg at a price that does not
constitute a Trade-Through. Narrowly-crafted implementing rules will
ensure that this exception does not undercut Trade-Through protections.
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    \18\ See Section 8(c)(iii)(G) of the Linkage Plan.
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     Customer Stopped Orders: Section 5(b)(ix) of the proposed
Decentralized Plan corresponds to the customer stopped order exception
in Regulation NMS for equity securities.\19\ It permits broker dealers
to execute large orders over time at a price agreed upon by a customer,
even though the price of the option may change before the order is
executed in its entirety.\20\
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    \19\ See Rule 611(b)(9) under the Exchange Act.
    \20\ For a further discussion on how this exemption operates
refer to the Regulation NMS Adopting Release. See Securities
Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496 (June 29,
2005) at notes 322-325.
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     Stopped Orders and Price Improvement: Section 5(b)(x) of
the proposed Decentralized Plan would apply if an order is stopped at
price that did not constitute a Trade-Through at the time of the stop.
In this case, an exchange could seek price improvement for that order,
even if the market moves in the interim, and the transaction ultimately
is effected at a price that would trade through the then currently-
displayed market. This exception would be particularly useful for
executions effected pursuant to such mechanisms as BOX's Price
Improvement Period (``PIP'').\21\
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    \21\ See Chapter V, Section 18 of the BOX Rules.
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     Benchmark Trades: Section 5(b)(xi) of the proposed
Decentralized Plan would cover trades executed at a price not tied to
the price of an option at the time of execution, and for which the
material terms were not reasonably determinable at the time of the
commitment to make the trade. An example would be a volume-weighted
average price trade, or ``VWAP''. This corresponds to a Trade-Through
exemption in Regulation NMS for equity trades.\22\ BOX does not
currently permit these types of options trades, and any transaction-
type relying on this exemption would require the Plan Participant to
adopt implementing rules, subject to Commission review and approval.
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    \22\ See Rule 611(b)(7) under the Exchange Act.
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Chapter XII, Section 3--Locked and Crossed Markets

    The proposed Decentralized Plan also addresses locked and crossed
markets.\23\ Similar to Regulation NMS, the proposed Decentralized Plan
requires the Plan Participants to adopt, maintain and enforce rules
requiring exchange Options Participants: to reasonably avoid displaying
locked and crossed markets; to reconcile such markets; and to prohibit
Options Participants from engaging in a pattern or practice of
displaying locked and crossed markets. However, the Plan Participants
in the proposed Decentralized Plan, including the Exchange, have
proposed certain exceptions, as detailed below, from the aforementioned
prohibition. The Exchange's proposed exceptions are as follows:
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    \23\ See Section 6 of the proposed Decentralized Plan. See also
proposed Chapter XII, Section 3 of the BOX Rules.
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     The locking or crossing Quotation was displayed at a time
when BOX was experiencing a failure, material delay, or malfunction of
its systems or equipment;
     The locking or crossing Quotation was displayed at a time
when there is a Crossed Market;
     The BOX Options Participant simultaneously routed an ISO
to execute against the full displayed size of any locked or crossed
Protected Bid or Protected Offer; or
     With respect to a locking Quotation, the order entered on
the Eligible Exchange that will lock a Protected Bid or Protected
Offer, is:
    [cir] Not a Public Customer order, and the Eligible Exchange can
determine via identification available pursuant to the Options Price
Reporting Authority (``OPRA'') Plan that such Protected Bid or
Protected Offer does not represent, in whole or in part, a Public
Customer order; or
    [cir] A Public Customer order, and the Eligible Exchange can
determine via identification available pursuant to the OPRA Plan that
such Protected Bid or Protected Offer does not represent, in whole or
in part, a Public Customer order, and, on a case-by-case basis, the
Public Customer specifically authorizes the Participant to lock such
Protected Bid or Protected Offer.

Chapter XII, Temporary Sec. 4--Temporary Rules Governing P and P/A
Orders

    If this proposal is approved, the current text within Chapter XII
corresponding to the Linkage Plan will be completely removed and
replaced with the new proposed rule text corresponding to the proposed
Decentralized Plan. Included within the proposed rule changes is
certain rule text from current Chapter XII which the Exchange proposes
to retain and continue to enforce regarding the sending and receipt of
P and P/A orders.\24\ BOX and BOX Options Participants currently
utilize the sending of P and P/A orders to fulfill their obligations to
seek the best price available for their customers and to prevent Trade-
Throughs. Although ISOs will be accepted and executed on the BOX market
as of the Decentralized Plan's implementation date, the BOX facility
itself will not send ISOs or route orders through private routing

arrangements to away exchanges until some time after such
implementation.\25\
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    \24\ These rules are within proposed Chapter XII, Temporary
Section 4.
    \25\ This period of delay is anticipated to last approximately
2-8 weeks past the prospective implementation date. Although the BOX
facility does not contemplate sending ISOs itself immediately upon
implementation of the Decentralized Plan, BOX Options Participants
that have developed the systems capability to send ISOs will
immediately be able to do so via their own order routing
arrangements, separate and independent from BOX, on the prospective
implementation date. See Supplementary Material .01 to proposed
Chapter XII, Section 2.
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    In connection with approval of this proposal the Exchange will also
request, under separate cover, that the Commission grant a temporary
limited exemption from Section 5(a) of the proposed Decentralized Plan
to permit BOX Options Participants to send P and P/A Orders to prevent
Trade-Throughs on the BOX market. Subject to the Commission's approval
of the aforementioned request for exemption from Section 5(a) of the
Decentralized Plan, BOX and its Options Participants will continue to
utilize the sending of P and P/A orders to away markets in order to
fulfill their obligations to seek the best available price for
customers.
    BOX has negotiated with the OCC to arrange for the continued
maintenance, operation and functionality of the OCC Hub during this
period of time to accommodate BOX. Additionally, the other options
exchanges which have similarly filed proposals to become Plan
Participants in the proposed Decentralized Plan have agreed to accept
and execute P and P/A Orders, and maintain and enforce pertinent rule
text, for so long as BOX shall continue to send them through the OCC
Hub. The Exchange proposes to include Temporary Section 4 within
Chapter XII until BOX no longer sends or receives P and P/A Orders and
such rules are no longer deemed necessary, at which point, upon
approval of the Commission, they will be removed from Chapter XII.\26\
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    \26\ The Exchange will submit a proposed rule change seeking
Commission approval for such rule change.
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    When BOX develops the ability to send ISOs, or a similar order type
to accomplish the same end result, and the ability to route orders
through private routing arrangements,\27\ the Exchange will submit a
proposal to remove Temporary Section 4 of Chapter XII, at which point,
if approved by the Commission, this requested exemption shall lapse and
the Exchange will no longer utilize P and P/A Orders to prevent Trade-
Throughs on the BOX market.
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    \27\ The Exchange will submit a separate filing with the
Commission discussing the details of the BOX private routing
arrangements and certain proposed rule text pertaining to such
routing.
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Other Proposed Amendments to BOX Rules To Accommodate Decentralized
Plan

    The Exchange additionally proposes to amend several sections of the
BOX Rules other than within Chapter XII. These changes are as follows:
     Chapter I, Section 1: Section 1 defines certain terms
which are referenced throughout the BOX Rules. The Exchange proposes to
include ``OCC Hub'' as a defined term, not only within Chapter XII, but
within the entirety of the BOX Rules.
     Chapter V, Section 14: Section 14 governs order entry on
BOX and the types of orders permissible for entry. The Exchange
proposes to include ``ISO'' as a permissible order type for entry on
BOX.
     Chapter V, Section 16: Section 16 governs execution and
price/time priority and, in particular, the circumstances under which
inbound orders will be `filtered' against the NBBO. The Exchange
proposes to exclude ISOs from those orders that are filtered against
NBBO. The Exchange also proposes to remove references to ``Intermarket
Linkage'', as such a term will not exist upon implementation of the
Decentralized Plan, and, where appropriate, replace such term with
``OCC Hub''. The Exchange also proposes to correct cross-references to
certain sections of Chapter XII, as the referenced text within Chapter
[sic] will continue to exist, but will be located in updated
subsections. The Exchange also proposes to remove references to ``Firm
Principal Quote Size'' and replace such references with the term
``Displayed Size'', as this term is defined in proposed Chapter XII,
Section 4(g).
     Chapter V, Section 20: Section 20 governs Obvious and
Catastrophic Errors. The Exchange proposes to revise a cross-reference
to the defined term, ``primary market,'' resulting from the renumbering
of certain defined terms in Chapter I, Section 1.
     Chapter V, Section 29: Section 29 governs the Universal
Price Improvement Period (``UPIP'') and, in particular, when BOX, upon
satisfaction of certain conditions, will automatically initiate a UPIP
auction. The Exchange proposes to add to the list of conditions that
the eligible order not (emphasis added) be an ISO. Section 29 also
includes rule text describing the filtering of UPIP Orders to prevent
trade throughs. The Exchange proposes to replace specific circumstances
upon which UPIP Orders will be filtered with a general reference to the
trade through exceptions in proposed Chapter XII, Section 2(b).
     Chapter VI, Section 5: Section 5 governs the obligations
of BOX Market Makers and certain of these obligations with respect to P
and P/A Orders. As described above, the Exchange proposes to remove
references to Intermarket Linkage and replace them with OCC Hub where
appropriate.
     Chapter X, Section 2: Section 2 governs penalties for
violations of the BOX Minor Rule Violation Plan and such penalties as
they pertain to violations of the respective rules governing locked and
crossed markets and trade throughs on BOX. As described above, the
Exchange proposes to correct cross-references to the locked and crossed
markets and trade through rules, as the respective subsection numbering
is modified in proposed Chapter XII.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\28\ in general, and Section
6(b)(5) of the Act,\29\ in particular, in that it is designed to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, to prevent fraudulent and manipulative acts, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system and, in general, to protect investors and the
public interest. Specifically, the proposed rule change will allow the
Exchange to implement and enforce the rules as made necessary by its
filing to become a Plan Participant in the proposed Decentralized Plan.
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    \28\ 15 U.S.C. 78f(b).
    \29\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.

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

    The Exchange has neither solicited nor received comments on the
proposed rule change.

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule
change should be disapproved.

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 e-mail to<EMAIL_ADDRESS>Please include
File No. SR-BX-2009-028 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BX-2009-028. This file
number should be included on the subject line if e-mail 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 inspection and
copying in the Commission's Public Reference Room, on official business
days between the hours of 10 a.m. and 3 p.m. Copies of such 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-BX-
2009-028 and should be submitted on or before July 20, 2009.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
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    \30\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-15267 Filed 6-26-09; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 79, Number 25 (Thursday, February 6, 2014)]
[Rules and Regulations]
[Pages 7070-7072]
[FR Doc No: 2014-02083]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R08-OAR-2012-0300; FRL-9903-27-Region 8]

Approval and Promulgation of State Implementation Plans; Utah:
Prevention of Significant Deterioration; Greenhouse Gas Permitting
Authority and Tailoring Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is partially
approving and partially disapproving revisions to the Utah State
Implementation Plan (SIP) relating to regulation of Greenhouse Gases
(GHGs) under Utah's Prevention of Significant Deterioration (PSD)
program and other SIP provisions. These revisions were submitted to EPA
on April 14, 2011 by the Governor. The GHG-related SIP revisions are
designed to align Utah's regulations with the GHG emission thresholds
established in EPA's ``PSD and Title V Greenhouse Gas Tailoring Final
Rule,'' which EPA issued by notice dated June 3, 2010. In today's
action, EPA is approving the GHG (as it relates to the PSD program)
revisions because the Agency has determined that this SIP revision,
which is already adopted by Utah as a final effective rule, is in
accordance with the Clean Air Act (CAA or Act) and EPA regulations
regarding PSD permitting for GHGs.

DATES: This final rule is effective March 10, 2014.

ADDRESSES: EPA has established a docket for this action under Docket
Identification No. EPA-R08-OAR-2012-0300. All documents in the docket
are listed in the www.regulations.gov index. Although listed in the
index, some information is not publicly available, e.g., CBI or other
information whose disclosure is restricted by statute. Certain other
material, such as copyrighted material, will be publicly available only
in hard copy. Publicly available docket materials are available either
electronically in www.regulations.gov or in hard copy at the Air
Program, Environmental Protection Agency (EPA), Region 8, 1595 Wynkoop
St., Denver, Colorado 80202-1129. EPA requests that if at all possible,
you contact the individual listed in the FOR FURTHER INFORMATION
CONTACT section to view the hard copy of the docket. You may view the
hard copy of the docket Monday through Friday, 8:00 a.m. to 4:00 p.m.,
excluding Federal holidays.

FOR FURTHER INFORMATION CONTACT: Jody Ostendorf, Air Program, Mailcode
8P-AR, Environmental Protection Agency (EPA), Region 8, 1595 Wynkoop
St., Denver, Colorado 80202-1129,<PHONE_NUMBER>,
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document ``we,'' ``us,'' or
``our'' refer to EPA.

Table of Contents

I. Background for Our Final Action
II. What final action is EPA taking?
III. Statutory and Executive Order Reviews

I. Background for Our Final Action

    The background for today's final rule and EPA's national actions
pertaining to GHGs is discussed in detail in our September 5, 2013
proposal (see 78 FR 54602). The comment period was open for 21 days and
we received no written comments. However, we did receive a phone call
of clarification from the State of Utah, which is explained below and
documented in a Memo to the Docket dated September 30, 2013.

II. What final action is EPA taking?

    Utah has adopted and submitted regulations that are substantively
similar to the federal requirements for the permitting of GHG-emitting
sources subject to PSD. As presented in our proposed notice, we
conclude that the revisions are consistent with the requirements of 40
CFR 51.166, in particular the requirements set out in EPA's final GHG
Tailoring Rule, and that the revisions should be approved into Utah's
SIP.
    R307-401-9 (Small Source Exemption), was revised by the State to
exclude sources from the requirement to obtain an approval order if
their GHG emissions are below the thresholds established by EPA, and
adopted into the State rules (R307-401-9(5)). Therefore,
preconstruction permits for GHGs are only required under the PSD
permitting program, thus exempting minor sources from GHG permitting.
We are approving the rule amendment as submitted by the State and this
revision.
    R307-405-3 (Definitions), was also revised by the State to amend
the definition of ``subject to regulation'' to include ``greenhouse
gases (GHGs)'' as defined in 40 CFR 86.1818-12(a). R307-405-3 was
modified to establish thresholds for permitting of GHGs under the PSD
program. Definitions for the terms ``GHGs'', ``emissions increase'' and
``tpy CO2 equivalent emissions (CO2e)'', were
added to this rule. Applicability thresholds for several different
types of permitting scenarios were also added. Therefore, we are
approving the state's additions to R307-405-3(9) as they are consistent
with the federal rule provisions in 40 CFR 51.166(b)(48).
    Our final review determines that there are eight provisions in the
R307-405-3 in the State submittal that are identical in rule number and
language to the definitions we approved in our July 15, 2011 approval
(76 FR 41712) and we are approving these definitions as resubmitted.
These provisions include: R307-405-3(1)(adopting by reference the
definitions in 40 CFR 52.21(b) with exceptions as noted in the rules);
R307-405-3(2)(c)(definition of ``Reviewing Authority''); R307-405-
3(2)(d)(definition of ``Administrator''); R307-405-3(2)(e)(definitions
or portions of definitions vacated by the DC Circuit Court of Appeals
on March 17, 2006); R307-405-3(3)(definition of ``Air Quality Related
Values''); R307-405-3(4)(definition of ``Heat Input''); R307-405-
3(7)(definition of ``Good Engineering Practice''); and R307-405-
3(8)(definition of ``Dispersion Technique'').
    We proposed to approve R307-405-3(2)(e) and indicated in our
proposal that this is a new rule that is not currently in the SIP. The
rule explains that ``certain definitions or portions of definitions
that apply to the equipment repair and replacement provisions are not
incorporated into the SIP because these provisions were vacated by the
DC Circuit Court of Appeals.'' Upon further research we found that we
previously approved this rule in our final action on July 15, 2011 (76
FR 41712). Therefore, we are reapproving the resubmittal of this
provision.
    Additionally, in our proposed action we indicated there is a
definition that had a new rule number, and upon further research we
found that we had previously approved the definition with that rule
number in our July 15, 2011

approval, R307-405-3(3)(definition of ``Air Quality Related Values'').
Therefore, we are reapproving the resubmittal of this provision.
    We are not acting on four provisions in R307-405-3 because we took
final action on these provisions on October 25, 2013 (78 FR 63883).
Specifically, these provisions include: R307-405-3(2)(a)(definitions of
``major source baseline area'' and ``minor source baseline area'');
R307-405-3(b)(definition of ``baseline area'')' R307-403-
3(f)(definition of ``regulated NSR pollutant'').
    We are not acting on rule provisions related to the Title V
program. There are two specific definitions we are not acting on: R307-
405-3(5)(definition of ``Title V Permit'') and R307-405-3(6)(definition
of ``Title V Operating Permit Program''). The State also submitted
R307-415-3 (all the definitions for the Operating Permit Program). We
are not acting on these definitions and rule in this notice because
approval of the Title V program revisions is handled separately and
Title V is not part of the SIP.
    Additionally, consistent with our June 12, 2013 proposal (78 FR
35181), we are disapproving the State's submittal of R307-401-7
(Permit: New and Modified Sources, Public Notice), which was effective
in the Utah Administrative Code on December 1, 2010.\1\
---------------------------------------------------------------------------

    \1\ As we explained in our June 12, 2013 notice of proposed
rulemaking, R307-401-7 revised Utah's public notice procedures to
allow for a 10-day public comment period for an approval or
disapproval order issued under R307-401-8. The rule allows for the
public comment period to be increased to 30 days under certain
conditions. We note that the public comment period for an approval
or disapproval order currently in Utah's federally approved SIP is
30 days. (See R307-1-3.1.3) Federal regulations for Public
Availability of Information found at 40 CFR 51.161(b)(2) require at
a minimum a 30-day public comment period for the permitting of a
source, including minor source permits. In addition, the 30-day
comment period is important to allow adequate opportunity for
comment by other affected states, federal agencies, and the public.
---------------------------------------------------------------------------

    Also consistent with our June 2013 proposal we are partially
approving and partially disapproving R307-401-9 (Permit: New and
Modified Sources, Small Source Exemption). We are approving R307-401-
9(5), which excludes sources whose GHG emission are below established
EPA thresholds for GHG from the requirement to obtain an Approval
Order. However, we are disapproving paragraph (b) and the portions of
paragraph (c) that reference paragraph (b). We are disapproving R307-
401-9(b) and the phrase ``or (b)'' in paragraph (c) because EPA lacks
authority in an action on a SIP revision under CAA section 110 to
approve provisions addressing hazardous air pollutants. Thus, we are
disapproving these specific provisions.
    Finally, we proposed to disapprove R307-405-3(2)(a)(i), consistent
with our final action on July 15, 2011 (76 FR 41712), because it
defines ``Major Source Baseline Date'' in a manner inconsistent with
the federal definition. However, as the State explained to us in a
phone call,\2\ Utah removed the Major Source Baseline Date in a
subsequent March 19, 2012 SIP submittal. In our October 25, 2013 final
action (78 FR 63883) on that submittal, we incorporated into the SIP
the required definition for State programs at 40 CFR 51.166(b)(14).
Therefore, we are not taking action on the State's definition of Major
Source Baseline Date in this final action.
---------------------------------------------------------------------------

    \2\ Information regarding the phone conversation with the State
appears in the Docket in the Memo dated September 30, 2013.
---------------------------------------------------------------------------

III. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the Act and applicable
federal regulations (42 U.S.C. 7410(k), 40 CFR 52.02(a)). Thus, in
reviewing SIP submissions, EPA's role is to approve state choices,
provided that they meet the criteria of the CAA. Accordingly, this
final action merely approves some state law as meeting federal
requirements and disapproves other state law because it does not meet
federal requirements; this final action does not impose additional
requirements beyond those imposed by state law. For that reason, this
final action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Public Law 104-4);
     Does not have federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999); is not an
economically significant regulatory action based on health or safety
risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and,
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have Tribal implications as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the State, and EPA notes that it will not impose substantial direct
costs on Tribal governments or preempt Tribal law.
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this action and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).
    Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by April 7, 2014. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this action for the purposes of
judicial review nor does it extend the time within which a petition for
judicial review may be filed, and shall not postpone the effectiveness
of such rule or action. This action may not be challenged later in
proceedings to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations,

Reporting and recordkeeping requirements.

    Authority:  42 U.S.C. 7401 et seq.

    Dated: November 7, 2013.
Shaun L. McGrath,
Regional Administrator, Region 8.

    For the reasons set forth above, 40 CFR part 52 is amended as
follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart TT--[AMENDED]

0
2. Amend Sec.  52.2320 by adding paragraph (c)(76) to read as follows:

Sec.  52.2320  Identification of plan.

* * * * *
    (c) * * *
    (76) On April 14, 2011 the State of Utah submitted revisions to its
State Implementation Plan (SIP) that contained revised rules, submitted
in their entirety, pertaining to regulation of Greenhouse Gases (GHGs)
under the State's Prevention of Significant Deterioration (PSD)
program.
    (i) Incorporation by reference.
    (A) Title R307 of the Utah Administrative Code (UAC), Environmental
Quality, Air Quality, R307-401, Permit: New and Modified Sources, R307-
401-9, Small Source Exemption, (5); and R307-405, Permits: Major
Sources in Attainment or Unclassified Areas (PSD), R307-405-3,
Definitions, except (2)(a), (b), (f), (5), and (6); effective January
1, 2011, as published in the Utah State Bulletin on September 15, 2010
and December 15, 2010.

[FR Doc. 2014-02083 Filed 2-5-14; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register: March 23, 2006 (Volume 71, Number 56)]
[Notices]
[Page 14757-14758]
[DOCID:fr23mr06-81]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53491; File No. SR-ISE-2006-13]

Self-Regulatory Organizations; International Securities Exchange,
Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change Relating to Fee Changes

March 16, 2006.
    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 March 13, 2006, the International Securities Exchange, Inc. (``ISE''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which items have been prepared by ISE. ISE has
designated the proposed rule change as one establishing or changing a
due, fee, or other charge, pursuant to Section 19(b)(3)(A)(ii) of the
Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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

    ISE is proposing to amend its Schedule of Fees to establish fees
for transactions in options on 3 Premium Products.\5\ The text of the
proposed rule change is available on ISE's Web site at http://www.iseoptions.com
, at the Office of the Secretary at ISE, and at the

Commission's Public Reference Room.
---------------------------------------------------------------------------

    \5\ ``Premium Products'' are defined in the Schedule of Fees as
the products enumerated therein.
---------------------------------------------------------------------------

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 proposal. The text of these
statements may be examined at the places specified in Item IV below.
The Exchange has prepared summaries, set forth in Sections A, B, and C
below, of the most significant aspects of such statements.

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

1. Purpose
    The Exchange is proposing to amend its Schedule of Fees to
establish fees for transactions in options on the following 3 Premium
Products: Standard & Poor's MidCap 400 Depository Receipts
(``MDY''),\6\ iShares MSCI Canada Index Fund (``EWC''),\7\ and iShares
MSCI EAFE Index Fund (``EFA'').\8\ Specifically, the Exchange is
proposing to adopt an execution fee and a comparison fee for all
transactions in options on MDY, EWC and EFA.\9\ The amount of the
execution fee and comparison fee for products covered by this filing
would be $0.15 and $0.03 per contract, respectively, for all Public

Customer Orders \10\ and Firm Proprietary orders. The amount of the
execution fee and comparison fee for all Market Maker transactions
would be equal to the execution fee and comparison fee currently
charged by the Exchange for Market Maker transactions in equity
options.\11\ The Exchange believes the proposed rule change will
further the Exchange's goal of introducing new products to the
marketplace that are competitively priced.
---------------------------------------------------------------------------

    \6\ ``Standard & Poor's[reg],'' ``S&P[reg],'' ``S&P 400[reg],''
``Standard & Poor's Depositary Receipts[reg],'' ``SPDR[reg],''
``Standard & Poor's MidCap 400 Depositary Receipts\TM\,'' and
``MidCap SPDRs\TM\,'' are trademarks of The McGraw-Hill Companies,
Inc. (``McGraw-Hill'') and have been licensed for use by PDR
Services LLC and the American Stock Exchange LLC (``Amex'') in
connection with the listing and trading of MidCap SPDRs (``MDY'') on
the Amex. MDY is not sponsored, sold, or endorsed by Standard &
Poor's, (``S&P''), a division of McGraw-Hill, and S&P makes no
representation regarding the advisability of investing in MDY.
McGraw-Hill and S&P have not licensed or authorized ISE to (i)
engage in the creation, listing, provision of a market for trading,
marketing, and promotion of options on MDY or (ii) to use and refer
to any of their trademarks or service marks in connection with the
listing, provision of a market for trading, marketing, and promotion
of options on MDY or with making disclosures concerning options on
MDY under any applicable federal or state laws, rules, or
regulations. McGraw-Hill and S&P do not sponsor, endorse, or promote
such activity by ISE and are not affiliated in any manner with ISE.
    \7\ iShares[reg] is a registered trademark of Barclays Global
Investors, N.A. (``BGI''), a wholly owned subsidiary of Barclays
Bank PLC. ``MSCI Canada Index'' and ``MSCI EAFE Index'' are service
marks of Morgan Stanley Capital International (``MSCI'') and have
been licensed for use for certain purposes by BGI. All other
trademarks and service marks are the property of their respective
owners. Neither MSCI Canada Index Fund (``EWC'') nor MSCI EAFE Index
Fund (``EFA'') are sponsored, endorsed, issued, sold or promoted by
MSCI. BGI and MSCI have not licensed or authorized ISE to (i) engage
in the creation, listing, provision of a market for trading,
marketing, and promotion of options on EWC and EFA or (ii) to use
and refer to any of their trademarks or service marks in connection
with the listing, provision of a market for trading, marketing, and
promotion of options on EWC and EFA or with making disclosures
concerning options on EWC and EFA under any applicable federal or
state laws, rules or regulations. BGI and MSCI do not sponsor,
endorse, or promote such activity by ISE, and are not affiliated in
any manner with ISE.
    \8\ See id.
    \9\ These fees will be charged to Exchange members. Under a
pilot program that is set to expire on July 31, 2006, these fees
will also be charged to Linkage Orders (as defined in ISE Rule
1900).
    \10\ Public Customer Order is defined in Exchange Rule
100(a)(33) as an order for the account of a Public Customer. Public
Customer is defined in Exchange Rule 100(a)(32) as a person that is
not a broker or dealer in securities.
    \11\ The execution fee is currently between $.21 and $.12 per
contract side, depending on the Exchange Average Daily Volume, and
the comparison fee is currently $.03 per contract side.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the statutory basis for the proposal is
the requirement under Section 6(b)(4) of the Act \12\ that an exchange
have an equitable allocation of reasonable dues, fees, and other
charges among its members and other persons using its facilities.
---------------------------------------------------------------------------

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

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

    ISE believes that the proposed rule change does not impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

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 \13\ and subparagraph (f)(2) of Rule 19b-4
thereunder \14\ because it establishes or changes a due, fee, or other
charge. At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate 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.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \14\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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 e-mail to<EMAIL_ADDRESS>Please include

File Number SR-ISE-2006-13 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-ISE-2006-13. This
file number should be included on the subject line if e-mail 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 inspection
and copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of ISE. 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-ISE-2006-13 and should be submitted on or before April 13, 2006.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

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

Nancy M. Morris,
Secretary.
[FR Doc. E6-4184 Filed 3-22-06; 8:45 am]

BILLING CODE 8010-01-P


Inter-Agency Comments on Draft 2008 CUE NPRM

July 12, 2007

p. 16, CEQ Comment: What is NPMA?

p. 17, The Agency is proposing to amend the table of critical uses
based, in part, on the technical analysis contained in the 2008 U.S.
nomination that assesses data submitted by applicants to the critical
use exemption program as well as public and proprietary data on the use
of methyl bromide and its alternatives. CEQ Comment: Where is this
available?  Would be helpful to have this referenced or available since
specific comment are requested on it.

p. 17, EPA is seeking comment on the aforementioned analysis and, in
particular, any information regarding changes to the registration or use
of alternatives that may have transpired after the 2008 U.S.  CEQ
Comment: Request for comments are scattered throughout the Notice.
Would help immensely to have list of comments in one section.

p. 18, USDA Comment:  It is time to propose and finalize a domestic
Emergency Exemption rule to conform with the provisions of the Montreal
Protocol.  Failure to do so places CUE users at risk if they move to an
alternative, and then have the use of that alternative restricted.

p.18, DOS Comment: what about the recent NPMA letter on cocoa- how does
that change the table for critical uses and the amounts allocated?

p. 23, Comment about limiting critical conditions for Dry Cured Pork
Products: As there are no alternative treatments, doesn’t the presence
of these pests constitute a “severe” infestation requiring
treatment?

p. 24, removing California from the approved locations for pepper
growers because the United States Government did not support this
location in its 2008 Critical Use Nomination; CEQ Comment: What does
“USG did not support this location” mean?  Reads like it is
arbitrary?

p. 24, Section V.D.5. also explains the reasoning for and implications
of EPA’s use of the term “field trial purposes” in this proposed
action, instead of the term “research purposes,” which EPA used in
previous CUE rulemakings. CEQ Comment: This sentence appears out of
place here. Might consider one section on “changes from previous
rulemakings.”

p. 26, In this section, EPA proposes to change certain aspects of the
Agency’s approach for determining the amount of methyl bromide that
may be produced or imported for critical uses each year, and the amount
of material that may be sold from stocks for critical uses each year.
CEQ Comment: Should this be “this action”?  Also, why are there
changes? –based on comments received, problems with last years
approach, etc.

p.28, USDA comment: However, the provisions of the CAA amendments of
1998 also require EPA to be no more restrictive than as required by the
Parties to the Montreal Protocol.  For this reason, the Agency continues
to propose and grant these CUEs while taking available stocks into
account.

p.28, USDA Comment: This aggregated amount, however, does not address
the physical availability (location), or form (100% technical methyl
bromide versus methyl bromide formulated with chloropicrin) of methyl
bromide held in stocks.

p. 29, Given this uncertainty, and the continuing decline in inventory
levels, EPA is exercising caution in this year’s CSA allocation.  EPA
will consider various approaches to this issue in the future based on
the data received during this notice and comment rulemaking process and
other information obtained by the Agency” (71 FR 75399).  CEQ Comment:
First, wording “exercising caution” is awkward for a rulemaking;
second, this appears contradictory with what is being done since the
proposal is recommending taking MORE from the stockpile/inventory than
recommended by the Parties.

p.30, DOS Comment: the EPA data shows that mebr levels in 2008 will be
4754 MT or 19% of baseline- is that less than one year?

p. 30, DOS Comment: Not clear what intent of including the meeting
report language is. DOS recommends deleting mention of the 18th meeting
report

p. 30, “The Parties did not take a decision at the 18th MOP on whether
it would be appropriate for a member country to maintain a reserve, or
what size inventory would be adequate; however, in other instances,
namely the Essential Use Exemption process for CFC inhalers, the Parties
have allowed for working stocks up to one year’s supply (USDA
addition).”

p.31, The proposed methods for determining the critical use amounts,
described in Section V.D.2. and V.D.3. of this preamble, form a new
approach for determining how much critical use methyl bromide may be
produced and imported and how much may be sold to critical users from
existing inventories in a given year, should inventories be available
(DOS addition)

p. 31, Preamble: In addition to providing a clear and robust method for
determining CUE production and import levels, the proposed new approach
addresses the decline in methyl bromide inventories by considering the
amount of existing stocks that is available for critical uses. in a
manner that better reflects what may be reasonably available within a
future control period based on data collected from an earlier control
period (USDA addition).

USDA comment: The Agency has previously considered the amount
“available”, so this in itself is not new.

p.33, EPA is considering new information it has gathered about the
availability of stocks for critical uses, because that information helps
the Agency balance the environmental and economic implications of
exempting amounts of methyl bromide production, importation, and
consumption for critical uses.  CEQ Comment: What new information;
should reference source.

p. 33, EPA’s proposed methodology for calculating the amount of
available stocks can be expressed as follows: AS = ES – D – SCF,
where AS = available stocks ; ES = existing stocks of methyl bromide
held in the United States by producers, importers, and distributors on
January 1, 2007; D = estimated drawdown of existing stocks during
calendar year 2007; and SCF = a supply chain factor, the calculation of
which is described below and in more detail in the Technical Support
Document available in the public docket for this rulemaking. CEQ
Comment: Since proposing to use for subsequent years, shouldn’t this
be “previous calendar year” and not specify exact year? NOTE –
used “year in question” later in document

p. 34, Where AS = ES – D – SCF formula is described

USDA comment: This formula fails to take into account that Post-harvest
sectors require only pure (100% technical) methyl bromide that is NOT
formulated with chloropicrin.  Failure to account for existing stocks so
formulated will potentially place post-harvest users at risk of
undersupply using this calculation, unless separate calculations are
made for the various sectors, including the geographic distribution of
such stocks.

p. 34, The term “existing stocks” does not include methyl bromide
produced under the exemption for quarantine and preshipment (QPS),
methyl bromide produced with Article 5 allowances to meet the basic
domestic needs of Article 5 countries, or methyl bromide produced for
feedstock or transformation purposes.  CEQ Comment: How much is this
annually?  Is it a small percentage of total produced?

p. 34, USDA addition: Such amounts have been removed from the
calculation of existing stocks from which the “available stocks”
were estimated.

p. 34-35, EPA CHANGE: The paragraph about the drawdown estimate revised
to clarify EPA’s estimation methods.  Certain years and numbers were
corrected, as they were incorrect due to a version-control problem.

p. 35, EPA estimates that following an unforeseen shutdown of the
domestic production facility, it would take 6-12 months to restart
production, but only 15 -weeks for significant imports of methyl bromide
to reach the U.S.  CEQ Comment: Add (About 4 months)” to relate to the
6-12 months.

p. 35, Preamble: EPA estimates that following an unforeseen shutdown of
the domestic production facility, it would take 6-12 months to restart
production, but only 15-weeks for significant imports of methyl bromide
to reach the U.S.

USDA Comment: Based on limited foreign production, is 15 weeks equally
applicable to the East and West Coasts?  What is the expected
transportation cost differential? (e.g. all ocean shipping versus
ocean/transcontinental truck or ocean/transcontinental rail/truck)

p.37, USDA Comment: Recall that existing formulated stocks would not be
available to Post-harvest users, regardless of the cause of any supply
disruption.  Also, even if a manufacturing or other storage facility had
a catastrophic loss of product (e.g. tank failure) without losing
production capacity, there is a need to replace this product into the
supply chain within the control period for which the product was
produced.

p. 38, Furthermore, factors such as the small number of methyl bromide
production facilities around the world, and the continued drawdown of
existing methyl bromide inventories make a major supply disruption
possible an issue for Agency consideration (DOS insertion).

p.39, Furthermore, factors such as the small number of methyl bromide
production facilities around the world, and the continued drawdown of
existing methyl bromide inventories make a major supply disruption
possible more likely than before due to more limited global production
capacity.

p.39, USDA Comment: Define this or bring a number to the proposal.
Although previous capacity may have existed, it is difficult to say what
can be brought back online in a given period of time.  As these
decisions are made on the basis of cost-effectiveness, independent
companies may not view the recommissioning of a moth-balled plant as
being cost-effective for 6 months unless they are controlled by the same
entity that lost the capacity!!

p. 39, In fact, EPA estimates that in the event of a plant production
failure, importing methyl bromide from abroad is likely to be the
fastest and most practical way to replace the lost production (but not
necessarily the most cost-effective over the long-run).

p.43, USDA Comment: Because of the time-lag between the decision of the
Parties and the beginning of the control period for which the decision
applies, it has been the experience of the United States that the level
of inventories cannot be known with certainty in advance.  Even when the
allocation rule for a control period is

p., 45, USDA Comment: The provisions of the Montreal Protocol concerning
the use of existing stocks fails to recognize that perfect information
about the status of closing stocks from one control period are not
available instantaneously at the beginning of the next control period.
An overly aggressive allocation of estimated stocks could result in a
failure to meet the legitimate approved needs of CUE users if the
estimates proved to be too optimistic.  As there is no provision in the
Protocol to ask for a revised production allocation within the control
period (and no practical means within the domestic rulemaking framework
employed by EPA to reallocate from CSAs to CUAs), it is imperative that
EPA not overallocate CSAs and underallocate CUAs for FUTURE control
periods, including 2008.  This supports EPA’s ongoing efforts to
determine what constitutes “available stocks”.

p. 45, DOS Comment: Equating "available" with "existing" would read the
relevant language out of IX/6, effectively replacing "methyl bromide is
not available in sufficient quality and quantity from existing stocks"
with "there are existing stocks."  Such a reading would not be true to
the negotiated text, therefore we would not simply replace
“existing” with “available” in terms of our discussion of
amounts from stocks.  Another possible line of argument might include:
Decision IX/6 states that stocks should be used if they are "available
in sufficient quality and quantity from existing stocks."  Thus, a
determination has to be made about whether existing stocks are of
"sufficient quality and quantity" to meet the CUE need.  This is the
essence of "availability" -- looking at the existing stocks to determine
whether they are "available" to end-users, both in quality (that is, the
right formulation for end-users) and in quantity (that is, enough to
actually reach the end-users).  When determining whether there is
sufficient quantity available to end-users, using a supply-chain factor
would therefore be an appropriate means to reach such a determination.

p. 47, DOS proposes deleting: For example, EPA anticipates that that at
the 19th Meeting of the Parties in September 2007, the Parties may
discuss the future when it is likely that there will be no more, or very
little, pre-phaseout inventory remaining.  At this point in time EPA is
not proposing specific approaches that the Agency might take when
pre-phaseout inventories are gone.  EPA is, however, seeking advance
comment on approaches that the Agency might consider when very little or
no pre-phaseout inventory remains.

DOS Comment: Is this part necessary- EPA already stated how they will
use the formula even when AS is less than authorized level

p. 48, As described in the Framework Rule, after applying this reduction
to the total volumes of allowable new production or import, EPA is
pro-rating critical use allowances (CUAs) to each company based on their
1991 baseline market share.  CEQ Comment: Was this done in past years or
is it a change?

p. 49, USDA Comment: For 2008, EPA is proposing to reduce the total
level of new production and import for critical uses by 539,428 kg to
reflect the total level of carry-over material available at the end of
2006 unless reliable information is provided to show that this
overestimates the carryover from 2006.

p. 50, USDA Comment: Does this cover QPS and CUE research conducted
solely in a laboratory?

p. 50, USDA Comment: Would the term “CUE field efficacy trial” be
better suited to describe both pre-plant and post-harvest research uses
outside of a laboratory?

p. 50, A common example of a field trial use of methyl bromide is an
experiment that requires methyl bromide as a standard control treatment
with which to compare the trial alternatives’ results that occurs
outside of a laboratory.

p. 51, USDA Comment: Does this apply to work looking solely at QPS uses?

p. 51, DOS Comment: Can EPA clarify the timeline on this point- when did
we begin imposing a transition rate in the nominations???

p.51, DOS Comment: delete “finalized from the phrase “finalized
transition rates”

p. 52, USDA Comment: NPMA Cocoa:  Are we waiting for NPMA to provide
comments on the amount they believe they can reduce their use in 2007
before making any adjustments?

p. 52, USDA Comment: Furthermore, the 2009 CUN, which represents the
most recent analysis and the best available data for methyl bromide
alternatives, does not conclude that transition rates should be
increased for 2008 (except, possibly for a one-time adjustment for NPMA
cocoa).

p. 53, USDA Comment: In section V.C. the Agency is soliciting comments
from the public on the technical [and economic?] basis for determining
that the uses listed in this proposed rule meet the criteria of the
critical use exemption (CUE).

p. 53, USDA Comment: Based on the way this is worded, does this require
applicants to reestablish their claims for a CUE, or is EPA merely
trying to solicit alternative comments to its analysis, and the Decision
of the Parties, that the CUE sectors in this proposed rule meet the
criteria of a CUE?  Why not economic basis as well?

p. 54, DOS Change: Users of methyl bromide should make every effort to
decrease minimize overall emissions

p. 54, DOS Comment: 1) What about VIF/metalized films research underway
in Florida etc.- we should include a paragraph on these significant
developments in this section and perhaps describe how new  information
in this area will be considered?  2) In recent decisions, we indicated
that we'd request the use of these kinds of technologies- it would be
helpful to rephrase the preambular language to make this request  on the
understanding that compliance is obviously voluntary.

p. 56, USDA Comment: Has TriCal actually submitted any data showing that
it has sold Post-Harvest CUAs since 2005 or is this an artifact of the
original global allocation of CUA to each of the four
producers/importers?  Although this is only a 0.4% difference for the
post-harvest sector, this could become more important as production
amounts become ever smaller.

p. 58, USDA Comment: Will EPA check to see that the CSA amount allocated
to a company does not exceed the amount of existing stock detailed in
its 2006 report to EPA?  Will EPA utilize its “least squares”
analysis to estimate drawdown from existing stocks by each entity
reporting ending stocks in 2004, 2005 and 2006, and thereby determine
whether any stock is likely to be held by an individual company at the
end of 2007 for use in 2008?

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