"King, Heidi R."<EMAIL_ADDRESS> 12/17/2007 04:19 PM

To

Janet Cakir/RTP/USEPA/US@EPA

cc

Subject

RE: materials for our meeting today at 11:30 - call-in<PHONE_NUMBER> (Conference Code<PHONE_NUMBER>)

Perfect, cut and paste reduces my error rate ;-)  I sent out the

interagency invitation for 30 min (let me know if EPA feels more time is

necessary)

Thank you Janet!

heidi

-----Original Message-----

From<EMAIL_ADDRESS><EMAIL_ADDRESS> Sent: Monday, December 17, 2007 4:18 PM

To: King, Heidi R.

Subject: RE: materials for our meeting today at 11:30 - call-in

866-299-3188 (Conference Code<PHONE_NUMBER>)

It will be the same as in the subject line above.

-janet

_______________________________________

Janet F. Cakir, Ph.D.

Environmental Protection Specialist

Air Benefits Cost Group

109 TW Alexander Dr., (C439-02)

Research Triangle Park, NC 27711

Tel:<PHONE_NUMBER>

Fax:<PHONE_NUMBER>

email<EMAIL_ADDRESS>

             "King, Heidi R."

             <Heidi_R._King@o

             mb.eop.gov>                                             To

                                      Janet Cakir/RTP/USEPA/US@EPA

             12/17/2007 04:09                                        cc

             PM                       Ron Evans/RTP/USEPA/US@EPA

                                                                Subject

                                      RE: materials for our meeting

                                      today at 11:30 - call-in

<PHONE_NUMBER> (Conference Code

<PHONE_NUMBER>)

3pm Thu 12/20 works for us

Could you pls confirm call-in information, and I'll send out an

interagency invitation

Thank you Janet

heidi

-----Original Message-----

From<EMAIL_ADDRESS><EMAIL_ADDRESS> Sent: Monday, December 17, 2007 4:08 PM

To: King, Heidi R.

Cc<EMAIL_ADDRESS> Subject: RE: materials for our meeting today at 11:30 - call-in

866-299-3188 (Conference Code<PHONE_NUMBER>)

How about 3:00?

-Janet

_______________________________________

Janet F. Cakir, Ph.D.

Environmental Protection Specialist

Air Benefits Cost Group

109 TW Alexander Dr., (C439-02)

Research Triangle Park, NC 27711

Tel:<PHONE_NUMBER>

Fax:<PHONE_NUMBER>

email<EMAIL_ADDRESS>              "King, Heidi R."

             <Heidi_R._King@o

             mb.eop.gov>                                             To

                                      Janet Cakir/RTP/USEPA/US@EPA

             12/17/2007 03:37                                        cc

             PM                       Ron Evans/RTP/USEPA/US@EPA

                                                                Subject

                                      RE: materials for our meeting

                                      today at 11:30 - call-in

<PHONE_NUMBER> (Conference Code

<PHONE_NUMBER>)

Could we meet after 2:30?  Several of us have a Pb NAAQS Risk Assessment

briefing, rescheduled from last Friday morning.

Thanks,

heidi

-----Original Message-----

From<EMAIL_ADDRESS><EMAIL_ADDRESS> Sent: Monday, December 17, 2007 2:42 PM

To: King, Heidi R.

Cc<EMAIL_ADDRESS> Subject: RE: materials for our meeting today at 11:30 - call-in

866-299-3188 (Conference Code<PHONE_NUMBER>)

I have our key people availabe at 1:00 on Thursday.  Will that work for

you?  We would use the same call-in information.

_______________________________________

Janet F. Cakir, Ph.D.

Environmental Protection Specialist

Air Benefits Cost Group

109 TW Alexander Dr., (C439-02)

Research Triangle Park, NC 27711

Tel:<PHONE_NUMBER>

Fax:<PHONE_NUMBER>

email<EMAIL_ADDRESS>              "King, Heidi R."

             <Heidi_R._King@o

             mb.eop.gov>                                             To

                                      Janet Cakir/RTP/USEPA/US@EPA

             12/17/2007 02:18                                        cc

             PM

                                                                Subject

                                      RE: materials for our meeting

                                      today at 11:30 - call-in

<PHONE_NUMBER> (Conference Code

<PHONE_NUMBER>)

Hi Janet,

Would your team be available either Wed morning or Thu afternoon to

discuss Stefan's extrap costs proposal?

Thank you --

heidi

-----Original Message-----

From<EMAIL_ADDRESS><EMAIL_ADDRESS> Sent: Monday, December 17, 2007 10:14 AM

To: Johansson, Robert; King, Heidi R.

Cc<EMAIL_ADDRESS> Subject: materials for our meeting today at 11:30 - call-in<PHONE_NUMBER>

(Conference Code<PHONE_NUMBER>)

Heidi,

     Below is a powerpoint briefing that we'll be talking from today at

11:30 for our meeting on Extrapolated Costs.  Let me know if you have

any trouble with the file.

Thanks,

Janet

(See attached file: Extrapolated Costs for OMB 12-17-07.ppt)

_______________________________________

Janet F. Cakir, Ph.D.

Environmental Protection Specialist

Air Benefits Cost Group

109 TW Alexander Dr., (C439-02)

Research Triangle Park, NC 27711

Tel:<PHONE_NUMBER>

Fax:<PHONE_NUMBER>

email<EMAIL_ADDRESS>


Joseph Gambogi<EMAIL_ADDRESS> 07/16/2008 09:36 AM	To

Conrad Chin/RTP/USEPA/US@EPA

cc

bcc

Subject

Re: Fw: Ferrotitanium production using induction furnaces

	History:

This message has been replied to and forwarded.

Conrad,

I have reviewed numerous sources in regard to the term

"electrometallurgical."  Most refer in some way to the the use of electric

and electrolytic processes. I believe the term is primarily meant to

include electric or electrolytic processes that bring about the reduction

of metallic compounds (e.g. electric arc furnaces, electrolytic cells) or

the purification of the metals through

electrorefining/electrodeposition.   I do not consider induction melting

to be an "electrometallurgical" process.

Regards,

Joe Gambogi

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

Titanium/Zirconium/Hafnium Commodity Specialist

USGS Minerals Information

Phone:<PHONE_NUMBER>

Fax:<PHONE_NUMBER>

Email<EMAIL_ADDRESS> Web:   http://minerals.usgs.gov/minerals/

<EMAIL_ADDRESS>wrote: -----

To<EMAIL_ADDRESS> From<EMAIL_ADDRESS> Date: 07/08/2008 11:00AM

cc<EMAIL_ADDRESS><EMAIL_ADDRESS> Subject: Fw: Ferrotitanium production using induction furnaces

Hello Joseph,

I am following up on a voice message I left you a few minutes ago.  I am

a rulewriter developing the area source NESHAP for ferroalloys

production.  Our basis of applicability determination for this rule is

mostly based on the SIC code 3313.  Ferrotitanium is one of the

ferroalloys listed under SIC 3313.

However, Global Titanium, a ferrotitanium producer, informed us that its

process in FeTi production does not involve "electrometallurgical"

process, and therefore should not be in SIC 3313.  I am seeking your

opinion and expertise on this.  Could you please respond to my inquiry

upon your return?   Thanks.

P.S.  I also sent a similar inquiry to you colleague, Lisa Corathers.  I

am copying her on my inquiry to you.

Conrad K. Chin

Mail Code D243-02

Metals and Minerals Group

Sector Policies and Programs Division

Office of Air Quality Planning and Standards

U.S. Environmental Protection Agency

919-541-1512 (voice)

919-541-3207 (fax)


1 INFORMATION COLLECTION REQUEST EPA ICR Number 2178.01 Market based Stormwater Management in the Shepherd Creek Watershed in Cincinnati, Ohio.

September, 2005 Sustainable Environments Branch Sustainable Technology Division National Risk Management Research Laboratory Office of Research and Development The United States Environmental Protection Agency TABLE OF CONTENTS PART A OF THE SUPPORTING STATEMENT ............................................................................... 3 SECTION 1. IDENTIFICATION OF THE INFORMATION COLLECTION................................. 3 1. ( a) Title of the Information Collection ..................................................................................... 3 1. ( b) Short Characterization / Abstract:....................................................................................... 3 SECTION 2. NEED FOR AND USE OF THE COLLECTION...................................................... 4 2. ( a) Need / Authority for the Collection..................................................................................... 4 2. ( b) Practical Utility / Users of the Data .................................................................................... 5 SECTION 3. NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA...................................................................................................................................... 5 3. ( a) Nonduplication. .................................................................................................................. 5 3. ( b) Public Notice Required Prior to ICR Submissions to OMB ................................................ 6 3. ( c) Consultations...................................................................................................................... 6 ( i) Federal Register Announcement.......................................... Error! Bookmark not defined. ( ii) Consultations ..................................................................... Error! Bookmark not defined. 3. ( d) Effects of Less Frequent Collection.................................................................................... 6 3. ( e) General Guidelines ............................................................................................................. 6 3. ( f) Confidentiality.................................................................................................................... 6 3. ( g) Sensitive Questions ............................................................................................................ 7 SECTION 4. THE RESPONDENTS AND THE INFORMATION REQUESTED. ......................... 7 4. ( a) Respondents ....................................................................................................................... 7 4. ( b) Information Requested ....................................................................................................... 7 ( i) Data items, including record keeping requirements.............................................................. 7 ( ii) Respondent Activities ........................................................................................................ 7 SECTION 5. THE INFORMATION COLLECTED   AGENCY ACTIVITIES, COLLECTION METHODOLOGY AND INFORMATION MANAGEMENT. ....................................................... 8 5. ( a) Agency Activities ............................................................................................................... 8 5. ( b) Collection Methodology and Management ......................................................................... 8 5. ( c) Small Entity Flexibility....................................................................................................... 8 5. ( d) Collection Schedule............................................................................................................ 8 SECTION 6. ESTIMATING THE BURDEN AND COST OF THE COLLECTION....................... 9 6. ( a) Respondent Burden ............................................................................................................ 9 2 6. ( b) Respondent Costs............................................................................................................... 9 ( i) Labor Costs......................................................................................................................... 9 ( ii) Capital and Operations and Maintenance Costs .................................................................. 9 ( iii) Capital / Start up vs. Operating and Maintenance ( O& M) Costs........................................ 9 ( iv) Annualizing Capital Costs. ................................................................................................ 9 6. ( c) Agency Burden and Cost .................................................................................................... 9 6. ( d) Respondent Universe and Total Burden Hours and Costs ................................................... 9 6. ( e) Bottom Line Burden Hours and Costs............................................................................... 10 ( i) Respondents Tally............................................................................................................. 10 ( ii) Agency Tally ................................................................................................................... 10 6. ( f) Reasons for Change in Burden .......................................................................................... 10 6. ( g) Burden Statement ............................................................................................................. 10 PART B OF THE SUPPORTING STATEMENT ............................................................................. 11 SECTION 1. SURVEY OBJECTIVES, KEY VARIABLES, AND OTHER PRELIMINARIES ... 11 1. ( a) Survey Objectives............................................................................................................. 11 1. ( b) Key Variables................................................................................................................... 11 1. ( c) Statistical Approach.......................................................................................................... 12 1. ( d) Feasibility ........................................................................................................................ 12 SECTION 2. SURVEY DESIGN.................................................................................................. 12 2. ( a) Target Population and Coverage ....................................................................................... 12 2. ( b) Sample Design ................................................................................................................. 13 ( i) Sampling Frames .............................................................................................................. 13 ( ii) Sample Size ..................................................................................................................... 13 ( iii) Stratification Variables.................................................................................................... 13 ( iv) Sampling Method............................................................................................................ 13 ( v) Multi stage Sampling ....................................................................................................... 13 2. ( c) Precision Requirements .................................................................................................... 13 ( i) Precision Targets............................................................................................................... 13 ( ii) Nonsampling Error........................................................................................................... 13 2. ( d) Experimental Design ........................................................................................................ 14 ( i) Instruction text for experiments......................................................................................... 14 ( ii) Code for scenarios and users' decisions............................................................................ 18 2. ( e) Questionnaire Text ........................................................................................................... 21 ( i) General questions.............................................................................................................. 21 ( ii) Demographic Questions ................................................................................................... 22 ( iii) Questions related to the opportunity cost of stormwater easements.................................. 22 3 PART A OF THE SUPPORTING STATEMENT SECTION 1. IDENTIFICATION OF THE INFORMATION COLLECTION 1. ( a) Title of the Information Collection Market based Stormwater Management in the Shepherd Creek Watershed in Cincinnati, Ohio.

[ PLEASE NOTE: A Privacy Impact Assessment ( PIA) will be submitted to OMB separately for this collection of information.]

1. ( b) Short Characterization / Abstract:

The Sustainable Technology Division ( STD) of the National Risk Management Research Laboratory ( NRMRL) in the Office of Research and Development ( ORD) of the U. S. Environmental Protection Agency ( EPA) is proposing to conduct a survey of individual property owners in the Shepherd Creek watershed in Cincinnati, OH. The survey will elicit how residents value the voluntary adoption of onsite best management practices as part of a comprehensive stormwater runoff control policy. The focus will be on estimating the minimum payment required to induce individual landowners to devote a portion of their property to runoff reducing best management practices.

This data collection is motivated by the current stormwater related problems within the United States in general, and in the greater Cincinnati metropolitan area in particular. Urban and suburban development changes the natural landscape making it more impervious to rain and snow. The resulting stormwater runoff is one of the most significant contributors to water quality degradation in the United States through larger and more frequent floods, increased erosion of stream beds and banks, disruption of natural habitat in receiving waters, and increased pollution loadings of metals, toxics, and nutrients. Precipitation falls over large geographic areas, and the resulting runoff will flow across a myriad of parcels with varying land uses, which are, in turn, under the control of numerous property owners. Perhaps in reaction to these conditions, stormwater control policies have concentrated on solutions that build centralized capacity to direct and hold excess runoff within the storm sewer system. An alternative approach to stormwater control would be to develop a decentralized approach that disperses runoff detention throughout the watershed, thus reducing runoff before it reaches the sewer system. This approach promises both hydrological benefits of reducing the in stream damages that will continue to occur in a centralized system, as well as potential cost savings in terms of meeting environmental quality standards.

Although the installation, operation, and maintenance costs for best management practices are relatively well known, these are only a portion of the total costs of adoption. The opportunity costs ( e. g.: the costs of partial loss of use of property) associated with BMP adoption are privately held by individual landowners, and can potentially comprise the largest share of total abatement adoption costs. To better understand the economic potential of a voluntary and decentralized runoff control program, it is necessary to assess the opportunity costs associated with best management practice adoption. The proposed survey provides a means of gathering this information. 4 The survey will be conducted using six ( 6) groups of ten ( 10) residential landowners from the Shepherd Creek watershed. Participation will be completely voluntary. Residents who wish to participate in the study will be identified and recruited through a liaison from the Hamilton County Soil and Water Conservation District, who is familiar with the community. The survey will be conducted using a computer simulated uniform price, sequential auction for the procurement of best management practices. Participants will be presented with a selection of best management practices that are feasible for use on their actual parcel. Information regarding how each BMP will perform on their specific parcel, as well as the installation, operation, and maintenance costs will be provided. The auction is designed to compensate residents for their costs of adopting best management practices on their property. Participants who wish to adopt BMPs will submit bids that consist of the size and type of the BMPs and the minimum compensation that they require. The goal is to pay those landowners who adopt the most effective best management practices at the lowest price. A uniformprice auction is employed because of its theoretical " truth revelation" properties. The optimal bidding strategy in a uniform price auction is to bid the actual cost of BMP adoption. Survey results will then be used to estimate the minimum payments required to achieve control stormwater runoff through onsite best management practices.

The total number of participants is 60. The cost to participants will be their time, at a total of 120 hours. Participants will be compensated for their participation at a minimum rate of $ 24.95 per hour. An additional bonus amount of compensation will vary with their performance in the auction. This is a commonly accepted practice used in experimental economics, in order to overcome hypothetical survey bias. Data will be stored on US Environmental Protection Agency ( EPA) computer files that protect respondent confidentiality. Summary results will be made available to the public.

SECTION 2. NEED FOR AND USE OF THE COLLECTION 2. ( a) Need / Authority for the Collection The Federal Water Pollution Control Act (" Clean Water Act") Section 104 ( 33 U. S. C. 1254), subsection ( a)( 1) directs the EPA to " in cooperation with other Federal, State, and local agencies, conduct and promote the coordination and acceleration of, research, investigations, experiments, training, demonstrations, surveys, and studies relating to the causes, effects, extent, prevention, reduction, and elimination of pollution" and subsection ( a)( 6) states in part that EPA " initiate and promote the coordination and acceleration of research designed to develop the most effective practicable tools and techniques for measuring the social and economic costs and benefits of activities which are subject to regulation under this chapter." Under the National Pollutant Elimination Discharge program ( 33 U. S. C. 1342), municipal separate sewer systems ( MS4s) must implement six control measures that include ( 1) public education and outreach on stormwater impacts and ( 2) public participation. The information collected as a part of this study will involve both and so will assist the local community in evaluating and using the most effective and practicable tools and techniques for meeting Clean Water Act requirements.

The study for which this information collection will be used is being conducted in compliance with the Government Performance and Results Act ( GPRA) under EPA GPRA Goal # 8 Science, Improved 5 Understanding of Environmental Risks and Greater Innovation to Address Environmental Problems; the Office of Research and Development, National Risk Management Research Laboratory's Annual Performance Goal ( APG) # 5 Environmental Systems Management: " Deliver to local and state governmental agencies for their use, methods and models for evaluating conservation and restoration of ecosystems based on market incentives, GIS modeling, hydrologic models and legal constraints;" and its Annual Performance Measure ( APM) # 16" Deliver economics methodology using tradable credit market system for impervious surfaces to cost effectively reduce combined sewer over flows in urban areas so EPA Regions can minimize risk from sewer contaminated water." Though this information is not required by any Agency decision and will be primarily of use to the research community and state and local planners, within EPA this work supports ( 64 Federal Register 68722, 68736, Dec. 8, 1999): " An MS4 is required to implement six control measures under its NPDES permit: ( 1) public education and outreach on stormwater impacts; ( 2) public involvement/ participation; ( 3) illicit discharge detection and elimination; ( 4) construction site stormwater runoff control; ( 5) post construction stormwater management in new development and redevelopment; and ( 6) pollution prevention/ good housekeeping for municipal operations.

2. ( b) Practical Utility / Users of the Data The primary users of the data will be the residents and landowners within the Shepherd Creek watershed. Various public entities in charge of stormwater runoff, such as the Municipal Stormwater District, can use data results to meet current regulatory obligations regarding stormwater control. Multiple municipalities facing stormwater runoff and combined sewer overflow problems can benefit from a better understanding of best management adoption costs. A third set of end users is researchers and practitioners who want to investigate similar topics in other localities, either on a stand alone basis or as part of an integrated assessment. Based on the description of the survey development and implementation process, and on the results reported, others may adapt the experimental auction and survey for their own use. Data results will also be available for researchers and practitioners.

SECTION 3. NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA 3. ( a) Nonduplication. Two related articles were identified. The first   " Controlling Stormwater Runoff with Tradable Allowances for Impervious Surfaces" by Hale Thurston, Haynes Goddard, David Szlag, and Beth Lemberg, published in Journal of Water Resources Planning and Management, Sept/ Oct 2003, pp. 409 418.   describes work conducted earlier by members of the EPA research team ( Thurston and Goddard). The second   " A laboratory study of auctions for reducing non point source pollution" by Timothy N. Cason, Lata Gangadharan and Charlotte Duke, published in Journal of Environmental Economics and Management, Volume 46, Issue 3, November 2003, Pages 446 471   describes an experimental auction used to value rural landowner's adoption of best management practices for nonpoint source pollution reductions in rural Australia. Though the experimental protocol described in this article is similar to what we propose, the research focus was not related. 6 The following databases were reviewed and contained no related references: Government Information Locator Service ( GILS); Federal R& D Project summaries, including DOE R& D Project Summaries database, NIH CRISP Database, and NSF Awards database; Center for Research Libraries; EBSCO Online Citations; Proquest digital dissertations; Columbia earthscape; Cambridge Scientific abstracts; Information Science Abstracts Plus ( 1966 2000/ 06); ERIC ISA Subset ( 1966 2000/ 06); Philosopher's Index ( 1940 2000/ 09); Social Sciences Abstracts 2/ 83 10/ 00; Biological and Agricultural Index 7/ 83 10/ 00; ISA 1966 2000/ 03; MLA Directory of Periodicals 2000/ 08; MLA Bibliography 1963 1990; MLA Bibliography 1991 2000/ 11; EconLit 1969 2000/ 11; Applied Science and Technology Abstracts 10/ 83 12/ 95; Applied Science and Technology Abstracts 1/ 96 10/ 0; PAIS ( Public Affairs Information Service); GPO; Catalog of U. S. Government Publications ( CGP); and GOVBOT.

3. ( b) Public Notice Required Prior to ICR Submissions to OMB EPA / ORD / GCRP published a Federal Register Announcement on Wednesday, July 13, 2005, Vol. 70, No. 133 pp. 40329 40330. No public comments were received.

3. ( c) Consultations EPA has undertaken a number of consultations in developing this project including academic experts, intra agency staff and key stake holders. US EPA has a broad range of researchers included on the research team ( Drs. Mayer, Shuster, Stewart, Taylor, Thurston). Multiple meetings of the Shepherd Creek Occasional Meeting group have taken place, which include Mr. Dale Eicher of State of Ohio Environmental Proteciton Agency, Ms. Holly Utrata Halcomb of the Hamilton County Soil and Water Conservation District, Mr. Martin Umberg and Mr. Wes Wimmer of the Hamilton County Metropolitan Sewer District, Mr. Jim Godby, Mr. Tim Gilday of the Hamilton County Engineers Office, Dr. Suzie Greenhalgh Senior Economist World Resources, Dr. John Braden, University of Illinois.

3. ( d) Effects of Less Frequent Collection Not applicable; this is a one time data collection activity.

3. ( e) General Guidelines This ICR conforms to OMB's general guidelines for the collection of information described in the ICR Handbook.

3. ( f) Confidentiality Files containing personal identifiers will not be stored alongside files with individual responses. Confidentiality will be carefully protected, even though disclosure of human subjects' responses outside the research team would not place the respondents at risk of criminal or civil liability or be damaging to their financial standing, employability, or reputation. Once a subject has completed the experimental auction and survey, it will not be possible to link response data with information such as 7 name and address. Working data will be stored on computers in secure data files available only to the EPA research team members working on the experimental auction and survey project. Files with participants' names, mailing addresses and phone numbers will be stored separately under lock and key, and will not be part of working data files. Remaining hard copy files will have no personal or organizational identifiers. Through these mechanisms, confidentiality of subjects who agree to participate in the survey is assured.

3. ( g) Sensitive Questions The experimental auction and survey does not include any questions regarding sexual behavior or attitudes, religious beliefs, or other matters usually considered private. In the survey portion, the penultimate question asks participants to indicate which of several broad ranges their annual family income fits within; such categorical ( rather than specific, which would be considered private) information often is requested ( as in this case) so that the group of sample respondents can be compared with the target population. Response to this and all questions in the survey is strictly voluntary.

SECTION 4. THE RESPONDENTS AND THE INFORMATION REQUESTED.

4. ( a) Respondents The proposed information collection targets private landowners who are residents of the Mt. Airy community of Cincinnati, OH. A random and representative sample of the total 440 residences will be identified and recruited through the assistance of the Hamilton County Soil and Water Conservation Service ( SWCS). The SWCS has extensive experience within the community. Respondents will be household decision makers who are 18 years of age or older. The SWCS recruiting respondents will make it clear that participation is voluntary.

4. ( b) Information Requested ( i) Data items, including record keeping requirements The full text of the experimental auction and survey is attached at the end of this document and discussed in detail in Part B of this Supporting Statement. This survey seeks to gauge personal opinions and as such should not require respondents to search existing records or to reformat information to submit to the Agency. There will be no public record keeping activities under this ICR. ( ii) Respondent Activities Respondents will be asked to listen to a short presentation regarding the hydrological effects of stormwater runoff, and the use of small scale best management practices to control runoff. Respondents will then be asked to participate in a hypothetical auction in which they can request payment in exchange for adoption of best management practices on their property. Finally, the participants answer a brief exiting questionnaire. 8 SECTION 5. THE INFORMATION COLLECTED   AGENCY ACTIVITIES, COLLECTION METHODOLOGY AND INFORMATION MANAGEMENT.

5. ( a) Agency Activities The EPA will develop the experimental auction and survey, conduct the experimental auction and survey ( or arrange for its conduct through a subcontractor), and compile and store the data, analyze survey findings, and produce summary reports.

5. ( b) Collection Methodology and Management In collecting and analyzing the information associated with this ICR, the EPA will follow a number of procedures for collection and management of the data.   Data quality will be ensured via adequate training and supervision of data collectors.   Reliability of computer programs will be verified with test data prior to use.   Computer data coders will be adequately trained and supervised.   Data input will be stored on both secured hard drives and on another medium such as floppy disk or CD ROM. Data shared across EPA investigators will be shared on an access protected, dedicated website.   Public access to the final reports will be made available via the EPA/ NRMRL website. Final reports will disclose only aggregated, anonymous data.

5. ( c) Small Entity Flexibility The proposed survey is targeted at individual households in the Mt. Airy community of Cincinnati, OH. No significant economic impact will be imposed on any participant.

5. ( d) Collection Schedule Upon OMB approval, EPA will initiate the information collection, and will complete the following tasks:   Pre test the experimental auction software using six groups of ten undergraduate students recruited from the University of Cincinnati. ( One month after OMB approval)   Arrange with SWC to begin recruitment of private landowners for participation in the study. ( Three months after OMB approval)   Conduct data collection session using the experimental auction and survey ( Five months after OMB approval)   Make summary data tables and analysis available to the public three months after completion of the data collection ( Ten months after OMB approval). 9 SECTION 6. ESTIMATING THE BURDEN AND COST OF THE COLLECTION.

6. ( a) Respondent Burden It is estimated that there will be 60 participants in the experimental auctions and survey of resident landowners in the Mt. Airy community of Cincinnati, OH. EPA estimates that each participant will spend a maximum of two hours during the experimental auction and survey session. This includes time spent listening to an introductory information presentation ( 20 minutes), the experimental auction ( 85 minutes), and an exiting survey ( 15 minutes). The EPA estimates the total response burden of 120 hours ( 2 hours each participant x 60 participants). The current burden estimates are based on the researchers' experience and consultation with several of the experts listed in Section 3.( c) above. Interviewers conducting the pretests will record the amount of time taken for administration of the experimental auction and survey, to confirm or modify these estimates. The burden estimates for the surveys reflect a one time expenditure, so they are equal to annual expenditures during the single year that the survey is conducted.

6. ( b) Respondent Costs ( i) Labor Costs Wage estimates are based on the " Employer Cost for Employment Compensation" ( Bureau of Labor and Statistics USDL: 04 1105, March 2004). Labor costs are estimated at $ 24.95 per hour ( average total compensation [ inclusive of benefits] for all civilian workers). Burden activities include only a few steps: reading or listening to instructions, reading or listening to survey questions, responding to survey questions. ( ii) Capital and Operations and Maintenance Costs No capital expenditures are needed by the respondent to complete the survey. ( iii) Capital / Start up vs. Operating and Maintenance ( O& M) Costs Only incidental operating and maintenance costs are associated with the completion and analysis of the surveys, including: maintenance of computer files ($ 500). Other than these rather small expenses, no operating and maintenance costs ( ongoing non wage expenditures) are anticipated to complete the survey.

( iv) Annualizing Capital Costs. Not applicable. There are no capital costs.

6. ( c) Agency Burden and Cost To perform the activities described in section 5 ( a), GCRP estimates that two federal employee at the GS. 13 01 level will be needed, at an annual pay rate of $ 72,385. This estimate is based on the 2004 GS annual pay schedule for Cincinnati, OH. EPA estimates that the two federal employees each will work 25% of his time on this project during the six month life of the experiment or approximately ( 72,385 x 2)*( 6/ 12)*(. 5) for an estimated cost to manage this project of $ 36,193. The survey will be conducted by the HCSWCD, with no funding. The software for the experiment was written through order number 4C R121 NAEX with Department of Hydrology and Water Resources, University of Arizona, Tucson , AZ for $ 17,100. Total agency costs $ 17, 100 + $ 36,193 = $ 53,293 6. ( d) Respondent Universe and Total Burden Hours and Costs EPA estimates that 60 respondents will voluntarily participate in the experiments at a total burden of 120 hours and a total cost of $ 2,994. 10 6. ( e) Bottom Line Burden Hours and Costs ( i) Respondents Tally TOTAL $ 2,994 ( ii) Agency Tally TOTAL $ 53,293 6. ( f) Reasons for Change in Burden The surveys are a one time data collection activity, therefore, this section is not applicable.

6. ( g) Burden Statement The annual public reporting and recordkeeping burden for this collection of information is estimated to average 2 hours per response, as a one time burden. 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.

To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this ICR under Docket ID No. ORD 2005 0003, which is available for public viewing at the Office of Research and Development ( ORD) Docket in the EPA Docket Center ( EPA/ DC), EPA West, Room B102, 1301 Constitution Ave., NW, Washington, DC. The EPA Docket Center 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 Reading Room is ( 202) 566 1744, and the telephone number for the Office of Research and Development Docket is ( 202) 566 1752. An electronic version of the public docket is available through EPA Dockets ( EDOCKET) at http:// www. epa. gov/ edocket. Use EDOCKET to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronically. Once in the system, select " search," then key in the docket ID number identified above. Also, you can send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, DC 20503, Attention: Desk Office for EPA. Please include the EPA Docket ID No. ( ORD 2005 0003) in any correspondence. 11 PART B OF THE SUPPORTING STATEMENT SECTION 1. SURVEY OBJECTIVES, KEY VARIABLES, AND OTHER PRELIMINARIES 1. ( a) Survey Objectives Questionnaire responses are designed to provide answers to the following questions: Question 1. How do residents within the Shepherd Creek Watershed rate the relative importance of typical quality of life characteristics? Question 2. How do these residents value improvements in stormwater runoff control in Shepherd Creek? Question 3. What change in property value do these residents assign to the conversion of a portion of their yard to a best management practice, such as a rain garden? Question 4. What form of land use policy instrument ( mandatory or voluntary) do residents see as most appropriate for stormwater runoff control from private property? Question 5. Do residents think it is more likely than not that the Shepherd Creek watershed will experience damaging stormwater runoff in the next 5 or 25 years? Question 7. How do responses to the above questions vary by length of residence and location within the watershed ( e. g., within more vulnerable areas compared with outside the most vulnerable areas), and by standard socio economic measures such as employment status, age category and income category? Question 8. What are the residents' judgments about specified trade offs among quality of life characteristics such as habitat for wildlife, stream ecology, public health, drinking water quality, flood risk, restrictions on land development, and local taxes?

1. ( b) Key Variables Key variables for the survey of residents include quality of life characteristics, especially habitat for wildlife, stream ecology, public health, drinking water quality, flood risk, restrictions on land development, and local taxes and fees. Additional key variables for the survey of residents include:   Expectations about the level of commercial and residential development over the next 5 and 25 years   Whether this development can be done without harming the overall natural environment   Current assessment of water quality in Shepherd's Creek   Level of involvement within any environmental organizations and/ or activities   Age category of respondent   Employment status of respondent   General income category of respondent   Length of residence in the Mt. Airy community in Cincinnati, OH 12 1. ( c) Statistical Approach The U. S. Environmental Agency is interested in promoting the use of market mechanisms as incentives for environmentally sound water pollution reduction policies. This work is exploring the use of tradable allowances as a coordinating mechanism for controlling stormwater runoff from urban and urbanizing areas. Before actual implementation of the program can take place, a " calibration" needs to be done to give a benchmark for payments and to anticipate stakeholder behaviors, this is often done with experimental economics programs. To this end we require the development of an experimental auction that will allow for several stakeholders to participate in an interactive experimental economics exercise through networked laptop computers. The exercise will prompt participants to make choices based on several cost and benefit scenarios dealing with best management practices ( BMP) for stormwater runoff control. The information gleaned from the experimental data will be used to inform a subsequent effort involving auctions at a watershed level. The experiment is designed to elicit the privately held values of landowners regarding the adoption of stormwater runoff reducing best management practices on their actual property. The auction will simulate a uniformprice sequential auction for the procurement of best management practices ( BMPs) in Shepherd Creek. A uniform price auction is employed because of its theoretical " truth revelation" properties, ( i. e., the optimal bidding strategy is to bid the true value of BMP adoption). A sequential bidding format is adopted to accommodate the benefits of learning by doing. To accomplish this the expected performance of feasible site specific BMPs, as well as the associated installation, operation, and maintenance costs, must be provided to the participants within the simulation.

1. ( d) Feasibility Participants are not expected to face obstacles in completing the experimental auction and survey. Several steps have been taken to facilitate participation. The instructions will stress that most questions ask about their perceptions or judgments, so that there are no right or wrong answers. Pre testing the instruments will have ensured that respondents understand the words used and can answer the questions asked. The questionnaires will be able to accept a code for a " don't know" response to any given question. The relatively few questions of fact should be quite straight forward ( e. g., for residents: How long have you lived in this area? Are you presently employed? Which of the following age groups are you in?, etc.). Sufficient funds are available to complete the study as designed. In the absence of sufficient funds, the sample size might have to be reduced, diminishing the value of the data for answering the research questions and reporting back to the citizens and organizations of the Shepherd Creek Watershed.

SECTION 2. SURVEY DESIGN 2. ( a) Target Population and Coverage The target population is residents who own private property in the Mt. Airy community of Cincinnati. OH. This provides coverage of the majority of private property parcels existing within the study area 13 of the Shepherd Creek watershed, who have well formed preferences about ( and a strong interest in) its quality of life.

2. ( b) Sample Design ( i) Sampling Frames We will obtain the sampling frame for our study from the HCSWCD which has experience in contacting and recruiting local participants for such studies. The study sample will be a randomly chosen, representative sample of the 440 resident landowners that make up the Mt. Airy community of Cincinnati, OH.

( ii) Sample Size Sixty homeowners will participate.

( iii) Stratification Variables Not applicable.

( iv) Sampling Method Residents of the Mount Airy area of Cincinnati, OH, will be chosen at random by the HCSWCD and offered the opportunity to participate in the auction.

( v) Multi stage Sampling Not applicable 2. ( c) Precision Requirements ( i) Precision Targets As discussed in section 2.2.( b) above, decisions about sample size were made partly on the basis of desired precision. That discussion indicates that we expect to be 95% confident that our estimates for key variables will be within about 5% of the " true" values of these ( unknown) parameters. This level of precision will be ample for the research needs: to determine how residents think about interrelationships for the characteristics related to their quality of life and their trade offs among them. ( ii) Nonsampling Error. If non respondents have significantly different opinions compared with respondents, the survey will be biased in underestimating the opinions of non respondents. We shall pretest the instruments to examine for potential wording that might bias participants during the experimental auction and/ or survey. Aggregate responses to the socio economic questions asked of residents will be compared with census data, enabling judgment about whether the respondents differ from the rest of the Mt. Airy population. If so, weighting can be used so that the results more accurately reflect the county. 14 2. ( d) Experimental Design ( i) Instruction text for experiments Screen # 1 Informed Consent INFORMED CONSENT You are invited to participate in a research study. Your participation is entirely voluntary. You may refuse to participate at any time without penalty or loss of any benefit to which you are entitled.

BURDEN STATEMENT OMB Control No. 20XX XXXX Approval expires XX/ XX/ XX The public reporting and recordkeeping burden for this collection of information is estimated to average 2 hours per response. Send comments on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including through the use of automated collection techniques to the Director, Collection Strategies Division, U. S. Environmental Protection Agency ( 2822T), 1200 Pennsylvania Ave., NW, Washington, D. C. 20460. Include the OMB control number in any correspondence. Do not send the completed survey to this address.

INFORMATION This is an experiment in the economics of decision making. If you choose to participate you will be making decisions in response to information that is provided by the persons running the experiment. The experiment may last as long as 90 minutes. You will earn a participation payment of $ XXX for arriving at the scheduled time; you are guaranteed this payment. Beyond this, you will earn money based on the decisions that you make during the experiment, but you can expect to earn between $ XX and $ YY in total. These decisions and the earnings you receive as a result of your decisions will be confidential. You will receive your earnings in cash at the end of the session.

At the beginning of the session the person running the experiment will describe the specific instructions which will include a full description of the tasks, how payoffs are earned, and the length of time for the session. After the person running the experiment has explained the specific instructions for the session, you are free to continue or withdraw at that point. At any time during the experiment, you are free to stop participating and to leave the experiment. If you do discontinue participation, you still earn the participation payment. We do ask that you do not disrupt the other participants if you choose to leave before the end.

The information in the study records will be kept confidential. Your name and social security number will be provided to the Accounting Office for payment. This information WILL NOT be reported to the IRS unless your total earnings exceed $ 400, which is extremely unlikely. Data will be stored securely and will be made available only to persons conducting the study unless you specifically give permission in writing to do otherwise. Consent forms and any coded payment information will be 15 stored separately from the data. No reference will be made in oral or written reports which could link you in any way to the study. When the study is completed all records of your participation except for this consent form and a computerized data set stripped of all identifying information will be destroyed. You will receive a copy of this consent form.

If you have any questions concerning the market experiments or this research you may contact: Professor Steven Stewart of University of Arizona at 520 626 3892. If you have questions about your rights as a participant, contact the Compliance Section of the Office of Research at 974 3466. If you have any additional questions about your rights as a research subject you may also contact the Chair, ORAU/ ORNL Institutional Review Board at 576 1725.

Screen # 2 Background on Raingardens as a means of controlling stowmwater A " rain garden" is a garden that is designed to allow rain and snowmelt to seep naturally into the ground instead of running off into the stormwater sewer system. Rain gardens have a slight indentation in the center to increase the collection of rain water, and they are planted with hearty native species that do not require chemical fertilizers or pesticides. They are most effective when located in the path of stormwater runoff from impervious surfaces such as driveways, patios, and under gutters. The benefits provided by rain gardens extend far beyond their natural beauty and their ability to attract birds and butterflies. They also work to reduce flooding, reduce pollution in local streams and rivers, and recharge underground aquifers.

EPA/ City of Cincinnati is studying a new way to control runoff of stormwater in the Shepherd Creek watershed. This new method involves the use of " raingardens." A Raingardens is a site constructed basin made of rocks, sand, and vegetation. Some examples of raingardens are pictured on the page. We have asked you here today to figure out how much of a lease payment that you and other residents of the area would require in order to determine whether the raingardens are a cost effective alternative for controlling stormwater. The City would lease a portion of your land on which it would build a raingarden and perform all maintenance on it for each three year lease that you agree to.

Screen # 3 Background on Stormwater Control The standard way of controlling runoff from developed neighborhoods is through a centralized stormwater sewer system. This includes the construction of an underground system of drainage pipes and collection areas, as well as the acquisition of land to build large retention ponds to slow water down and allow some of it to percolate to the soil, and redirect the rest. As urban and suburban areas grow, there is a corresponding need to expand these systems to avoid problems of flooding, pollution, and combined sewer overflows. Expanding the standard system can be very expensive and would require access to large parcels of lands and the construction of diversion devices that must be paid for with public funds. Alternatively, an approach that encourages the adoption of small rain gardens by many property owners could provide the same level of runoff control at a much lower cost to the municipality because it would not involve the purchase of large tracts of land or the construction of diversion canals, weirs, etc. Instead the City is proposing to lease small portions of land from many willing individual property owners and construct small rain gardens in their front or back yards. 16 [ plus pictures depicting stormwater problems]

Screen # 4   Experiment Instructions We will ask you to play several rounds of an experiment in which we ask you about the payment you would require in order to allow the City to install a raingarden on your property. This is the screen that you will see throughout much of the experiment. The map on the lower right is a map of properties in your neighborhood ( 1). The top center box ( 2) ( stormwater fee version will have slightly different description) gives you information about the total amount of stormwater coming from your neighborhood that needs to be controlled as well as the amount that comes from your property. The box in the lower right ( 3) is where you tell us how much you would be willing to accept as compensation for allowing the City to build a raingarden on your property. Depending on the size of your lot, there may be several feasible raingarden sizes. After each round, the upper left box ( 4) will remind you of the results of the prior round's activities [ plus screen shot of experiment screens, with callouts to specific areas of screen]

Screen # 5   Instructions for practice rounds We will play two practice rounds so that you can learn how the experiment works To begin, think about how much you would be willing to accept as compensation to allow the City to install a raingarden on your property for a minimum of three years. Select whether you would allow a small, medium, large, or no raingarden at all on your property, submit your offer in the box provided, and click on the " submit offer" button. After the other players' offers have been received, you will see a screen that shows whether your offer was accepted as well as the number of other offers accepted. 17 Screen 6 [ PARCEL OWNER INFORMATION BOX]

[ SELECT RAINGARDE N SIZE & OFFER FOR YEAR 2004] [ LAST YEAR'S ACTIVITY BOX]

[ MAP] [ ACCOUNT ACTIVITY BOX] 18 ( ii) Code for scenarios and users' decisions [ LAST YEAR'S ACTIVITY BOX] + MESSAGE WHEN USER STARTS EXPERIMENT Offer acceptance and previous round summaries will be reported here after first round completion.

+ MESSAGE IF USER DOES NOT SELECT A RAINGARDEN You DID NOT select a raingarden for this year.

In Year 2004 the results of all the transactions in your neighborhood were: Total neighborhood reduction: 0.67% Number of users who have chosen to have raingardens installed on their property 1 of 2 Highest winning offer, Small $ 0.00 Highest winning offer, Medium $ 600.00 Highest winning offer, Large $ 0.00 + MESSAGE IF USER SELECTS A RAINGARDEN Congratulations! Your offer of $ 100.00/ year for a small raingarden HAS BEEN ACCEPTED.

In Year 2004 the results of all the transactions in your neighborhood were: Total neighborhood reduction: 1.33% Number of users who have chosen to have raingardens installed on their property 2 of 2 Highest winning offer, Small $ 100.00 Highest winning offer, Medium $ 600.00 Highest winning offer, Large $ 0.00 + NEXT ROUND MESSAGE IF USER SELECTED A RAINGARDEN You got a ( Small/ Medium/ Large) raingarden for $_______. Your contract was for 2 years. We are in Year 2005 and you will play again until Year 2007.

In Year 2004 the results of all the transactions in your neighborhood were: Total neighborhood reduction: 1.33% Number of users who have chosen to have raingardens installed on their property 2 of 2 Highest winning offer, Small $ 100.00 Highest winning offer, Medium $ 600.00 Highest winning offer, Large $ 0.00 + NEXT ROUND MESSAGE IF USER DID NOT SELECT A RAINGARDEN You didn't get a raingarden for Year 2004 In Year 2004 the results of all the transactions in your neighborhood were: Total neighborhood reduction: 0.67% Number of users who have chosen to have raingardens installed on their property 1 of 2 Highest winning offer, Small $ 0.00 19 Highest winning offer, Medium $ 600.00 Highest winning offer, Large $ 0.00 [ PARCEL OWNER INFORMATION BOX] + THIS INFO IS THE SAME IN ALL THE SCREENS Parcel Owner Information: Name: Steve Stewart Address: 2201 N Sunset Blvd Parcel: 009 Neighborhood Runoff: 30,000 af Your Parcel Contribution: 1,000 af [ ACCOUNT ACTIVITY BOX] ACCOUNT ACTIVITY Activity for last year Balance N/ A N/ A $ 100.00 all rounds account activity [ LINK]

[ SELECT RAINGARDEN SIZE & OFFER FOR YEAR 2004] + MESSAGE WHEN USER CAN MAKE AN OFFER SELECT RAINGARDEN SIZE & OFFER FOR YEAR ______ Select the size of raingarden you would be willing to have installed on your property. Select the minimum payment you would be willing to accept to have that raingarden installed. Select Raingarden Size Runoff Savings 0 None 200 Small 400 Medium 600 Large I would accept a yearly offer of $ _______

( CONTINUE > BUTTON)

+ ALERT MESSAGE IF USER DOES NOT SELECT A RAINGARDEN You have decided not to get a raingarden for this year. Do you want to proceed with this selection?

+ ALERT MESSAGE IF USER CANCELS HIS SELECTION Please make the necessary changes to your offer 20 + ALERT MESSAGE IF USER ENTERS AN INVALID NUMBER IN THE OFFER AMOUNT BOX Please enter a numeric value greater than zero as your yearly offer.

+ ALERT MESSAGE IF USER MAKES AN OFFER You are making an offer to accept $ ______ dollars yearly for ______ years. Do you want to proceed with this selection?

+ MESSAGE AFTER A USER HAS FINISHED A ROUND You have finished Year 2004!

PLEASE WAIT HERE UNTIL THE MODERATOR INDICATES YOU CAN CONTINUE.

Click here when the moderator indicates that you can start the next round + MESSAGE WHEN USER HAS AN ACTIVE CONTRACT YOU HAVE AN ACTIVE CONTRACT ( Year 2005)

You will not play this year.

You are in year 2 of a 2 year lease.

After you have reviewed this screen click " Continue >" an wait for the rest of the users to finish this round.

( CONTINUE > BUTTON)

[ LAST SCREEN] + MESSAGE AFTER USERS FINISH EXPERIMENT   go on to survey You have completed this experiment.

We appreciate your participation. 21 2. ( e) Questionnaire Text ( i) General questions Question 1. How do residents within the Shepherd Creek Watershed rate the relative importance of typical quality of life characteristics?

Using a scale where 1 = unimportant 2 = somewhat important, 3 = important, 4 = very important, 5 = extremely important, please rate the following characteristics of household landscaping Areas covered with grass Flower gardens Vegetable gardens Areas covered with hard landscaping   rocks, bricks, etc Water features Question 2. How do these residents value improvements in stormwater runoff control in Shepherd Creek?

Have you been impacted by stormwater events? If so, how? ( check all that apply) Flooding of home Flooding of car Auto accidents Traffic delays due to flooding Disruption to utilities ( water, sewer, electricity, gas, etc)

Question 3. What change in property value do these residents assign to the conversion of a portion of their yard to a best management practice, such as a rain garden?

Q: Positive, no change, or negative, then dollar or percentage change?

How do you think that the value of your property would change if you agreed to have a raingarden like the ones depicted in the experiment installed on your property? Increase, stay the same, decrease If you believe your property value would change, by how much ( report in dollars or percentage change.

How do you think that the value of your property would change if you AND OTHER PROPERTY OWNERS IN YOUR NEIGHBORHOOD agreed to have a raingarden like the ones depicted in the experiment installed on your property? Increase, stay the same, decrease 22 If you believe your property value would change, by how much ( report in dollars or percentage change.

Question 4. What form of land use policy instrument do ( mandatory or voluntary) do residents see as most appropriate for stormwater runoff control from private property?

The method of stormwater control that we have discussed so far is based on voluntary participation by property owners in the watershed. Do you believe that voluntary methods are acceptable or would you prefer a system of mandatory participation by all property owners?

Question 5. Do residents think it is more likely than not that the Shepherd Creek watershed will experience damaging stormwater runoff in the next 5 or 25 years?

Question 6. How do responses to the above questions vary by length of residence and location within the watershed ( e. g., within more vulnerable areas compared with outside the most vulnerable areas), and by standard socio economic measures such as employment status, age category and income category?

( ii) Demographic Questions Including yourself, how many people live in your household. Open response What is the age category of the head of household? 18 25, 26 35, 36 45, 46 55, 56 65, 66 75, 76 85, above 85 How would you describe the employment situation of the main breadwinner in the household? Retired Partially retired Working full time in chosen occupation Working full time in a temporaty occupation Working part time unemployed Household income Categorical < 10,000, 10000 20000, etc How long have you lived at your current address? Open response ( iii) Questions related to the opportunity cost of stormwater easements How likely is it that you will move or sell your house in the next five years? 1= will not move , 2= very unlikely to move, 3unlikely to move  etc. 23 Do you have plans for additions to your property that would be compromised if you were to install a raingarden?

Question 7. What are the residents' judgments about specified trade offs among quality of life characteristics such as habitat for wildlife, stream ecology, public health, drinking water quality, flood risk, restrictions on land development, and local taxes?


[Federal Register: October 26, 2006 (Volume 71, Number 207)]
[Notices]
[Page 62632-62634]
[DOCID:fr26oc06-77]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54622; File No. SR-FICC-2006-13]

Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing of a Proposed Rule Change Relating to the Federal
Reserve's National Settlement Service

October 18, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on July 11, 2006, Fixed
Income Clearing Corporation (``FICC'') filed with the Securities and
Exchange Commission (``Commission'') and on August 4, 2006, amended,
the proposed rule change as described in Items I, II, and III below,
which items have been prepared primarily by FICC. 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The proposed rule change would amend the rules of FICC's Mortgage-
Backed Securities Division (``MBSD'') to require clearing participants
to satisfy their cash settlement amounts ultimately through the Federal
Reserve's National Settlement Service (``NSS'').\2\
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    \2\ The Commission previously approved a proposed rule change
filed by FICC to make a similar amendment to the rules of its
Government Securities Division (``GSD''). Securities Exchange Act
No. 52853 (November 29, 2005), 70 FR 72682 (December 6, 2005) [File
No. SR-FICC-2005-14]. FICC's affiliates, The Depository Trust
Company (``DTC'') and the National Securities Clearing Corporation
(``NSCC'') also use NSS in their funds settlement processes.
However, DTC and NSCC do not currently use NSS for the payment of
credit. FICC is proposing to have the MBSD process both the debits
and credits of its cash settlement process through the NSS, as is
the case for the GSD.
    For a description of NSS, refer to http://www.frbservices.org/Wholesale/natsettle.html
.

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

    In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of such
statements.\3\
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    \3\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    Currently, the MBSD cash settlement process, which is contained in
Rule 8 of Article II of the MBSD's rules, works as follows. On a daily
basis, FICC computes a cash balance, which is either a debit amount or
a credit amount, per participant account and nets the cash balances
across aggregated accounts. Unlike at GSD where cash settlement occurs
on a daily basis, at MBSD there are specific dates on which debits and
credits are required to be made. Settlement dates at MBSD are based
upon the settlement dates of the different classes of MBSD-eligible
securities. There is a time deadline for the payment of debits to FICC
as announced by the MBSD from time to time. All payments of cash
settlement amounts by a clearing participant to FICC and all
collections of cash settlement amounts by a clearing participant from
FICC are done through depository institutions that are designated by
MBSD participant and by FICC to act on their behalf with regard to such
payments and collections. All payments are made by fund wires from one
depository institution to the other.
    Under the proposal, the required payment mechanism for the
satisfaction of cash settlement amounts would be the NSS. FICC would
appoint The Depository Trust Company (``DTC'') as its settlement agent
for purposes of interfacing with the NSS.\4\
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    \4\ DTC currently performs this service for the GSD and NSCC.
---------------------------------------------------------------------------

    In order to satisfy their cash settlement obligations through the
NSS process, each MBSD clearing participant would have to appoint a
``cash settling bank.'' An MBSD clearing participant that qualifies may
act as its own cash settling bank.
    The MBSD would establish a limited membership category for the cash
settling banks. Banks or trust companies that are DTC settling banks
(as defined in DTC's rules and procedures), GSD funds-only settling
bank members (as defined in the GSD's rules), or clearing participants
with direct access to a Federal Reserve Bank and NSS would be eligible
to become MBSD cash settling bank participants by executing the
requisite membership agreements for this purpose. Banks or trust
companies that do not fall into these categories and that desire to
become MBSD cash settling bank participants would need to apply to
FICC. Such banks or trust companies would also need to have direct
access to a Federal Reserve Bank and the NSS as well as satisfy the
financial responsibility standards and operational capability imposed
by FICC from time to time. Initially, these applicants would be
required to meet and to maintain a Tier 1 capital ratio of 6
percent.\5\
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    \5\ This is the same financial requirement for GSD funds-only
settling banks that fall into a similar category. As with the GSD,
FICC would retain the authority and discretion to change this
financial criterion by providing advanced notice to the settling
banks and the netting members through an important notice.
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    In addition to the membership agreement, each MBSD participant and
the cash settling bank it has selected would be required to execute an
agreement whereby the participant would appoint the bank to act on its
behalf for cash settlement purposes. The bank would also be required to
execute any agreements that may be required by the Federal Reserve Bank
for participation in the NSS for FICC's cash settlement process.
    The cash settling banks would be required to follow the procedures
for cash settlement payment processing set forth in the proposed rule
changes. This would include, for example, providing FICC or its
settlement agent with the requisite acknowledgement of the bank's
intention to settle the cash settlement amounts of the clearing
participant(s) it represents on a timely basis and to participate in
the NSS process. Cash settling banks would have the right to refuse to
settle for a particular participant and would also be able to opt out
of NSS for one business day if they were experiencing extenuating
circumstances.\6\ In such a situation, the clearing participant would
be responsible for ensuring that its cash settlement debit was wired to
the depository institution designated by FICC to receive such payments
by the payment deadline. The proposed rule change makes clear that the
obligation of a clearing participant to fulfill its cash settlement
would remain at all times with the clearing participant.
---------------------------------------------------------------------------

    \6\ These procedures are consistent with the GSD, NSCC, and DTC
procedures in this respect.
---------------------------------------------------------------------------

    As FICC's settlement agent, DTC would submit instructions to have
the Federal Reserve Bank accounts of the cash settlement banks charged
for the debit amounts and credited for the credit amounts. Utilization
of NSS would eliminate the need for the initiation of wire transfers in
satisfaction of MBSD settlement amounts, and FICC believes that it
would therefore reduce the risk that the clearing participant that
designated the bank would incur a late payment fine due to delay in
wiring funds. The proposal would also reduce operational burden for the
operations staff of FICC and of the participants.
    The NSS is governed by the Federal Reserve's Operating Circular No.
12 (``Circular''). Under the Circular, DTC, as FICC's settlement agent,
has certain responsibilities with respect to an indemnity claim made by
a relevant Federal Reserve Bank as a result of the NSS process. FICC
would apportion the entirety of any such liability to the clearing
participant or clearing participants for whom the cash settling bank to
which the indemnity claim relates is acting. This allocation would be
done in proportion to the amount of each participants' cash settlement
amounts on the business day in question. If for any reason such
allocation would not be sufficient to fully satisfy the Federal Reserve
Bank's indemnity claim, then the remaining loss would be allocated
among all clearing participants in proportion to their relative usage
of the facilities of the MBSD based on fees for services during the
period in which loss is incurred.
    The proposed rule change also amends the GSD's rules regarding the
use of the NSS. An additional category for eligible funds-only settling
banks would be added to include MBSD cash settling banks. This means
that an MBSD cash settling bank would be able to become a GSD funds-
only settling bank by signing the requisite agreements.
    FICC believes that the proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
because the proposed rule change would enhance the current operation of
the MBSD's cash settlement payment process by promoting the timely
processing of funds payments and credits. As such,

the proposed rule change would support the prompt and accurate
clearance and settlement of securities transactions.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    FICC does not believe that the proposed rule change would have any
impact or impose any burden on competition.

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

    Written comments relating to the proposed rule change have not yet
been solicited or received. FICC will notify the Commission of any
written comments received by FICC.

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 self-regulatory organization 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 Number SR-FICC-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-FICC-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 Section, 100 F Street,
NE., Washington, DC 20549. Copies of such filing also will be available
for inspection and copying at the principal office of FICC and on
FICC's Web site at http://www.ficc.com. 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-FICC-2006-13 and should be submitted on or before
November 16, 2006.

    For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-17913 Filed 10-25-06; 8:45 am]

BILLING CODE 8011-01-P