[Federal Register: March 16, 2007 (Volume 72, Number 51)]
[Notices]
[Page 12653-12654]
[DOCID:fr16mr07-114]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55435; File No. SR-NYSEArca-2007-23]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending Fees for
Round-Lot Transactions in NYSE-Listed Securities (Other Than ETFs)
Routed Outside the Book

March 9, 2007.
    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 February 26, 2007, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange''),
through its wholly owned subsidiary NYSE Arca Equities, Inc. (``NYSE
Arca Equities''), 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 substantially prepared by NYSE
Arca. NYSE Arca has filed the proposal pursuant to Section 19(b)(3)(A)
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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(2).
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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 section of its Schedule of Fees
and Charges for Exchange Services (``Fee Schedule'') that applies to
round-lot transactions by ETP Holders \5\ in securities (other than
exchange-traded funds, or ``ETFs'') listed on the New York Stock
Exchange LLC (``NYSE''). While changes to the Fee Schedule pursuant to
this proposal will be effective upon filing, the changes will become
operative on March 1, 2007. The text of the proposed rule change is
available at NYSE Arca, the Commission's Public Reference Room, and
http://www.nysearca.com.

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    \5\ See NYSE Arca Equities Rule 1.1(n).
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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, NYSE Arca 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. NYSE Arca 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 proposes to amend the section of its Fee Schedule that
applies to round-lot transactions by ETP Holders in NYSE-listed
securities (other than ETFs). While changes to the Fee Schedule
pursuant to this proposal will be effective upon filing, the changes
will become operative on March 1, 2007.
    The Fee Schedule currently provides that ETP Holders are charged
$0.001 per share for round-lot transactions in NYSE-listed securities
that are routed outside the NYSE Arca Book. The Exchange proposes to
amend its Fee Schedule to increase this fee to $0.003 per share for
such routed orders executed at any away market center other than the
NYSE. ETP Holders will continue to be charged $0.001 per share for
round-lot transactions in NYSE-listed securities that are routed to,
and executed on, the NYSE. The Exchange proposes to increase this fee
in direct response to the recent fee announced by The NASDAQ Stock
Market LLC (``Nasdaq'') of $0.003 per share for orders that remove
liquidity from the Nasdaq Market Center for NYSE-, Amex- and regional-
listed securities (excluding ETFs), effective January 1, 2007.\6\
Specifically, the Exchange proposes this increase so that it may pass
through to its ETP Holders the increased fee that Nasdaq is charging
the Exchange for such ETP Holders' transactions.
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    \6\ See Securities Exchange Act Release No. 54742 (November 13,
2006), 71 FR 67179 (November 20, 2006) (SR-NASD-2006-122). See also
Securities Exchange Act Release Nos. 54932 (December 13, 2006), 71
FR 76406 (December 20, 2006) (SR-NASD-2006-132); 55137 (January 19,
2007), 72 FR 3452 (January 25, 2007) (SR-NASDAQ-2006-068); and 55284
(February 13, 2007), 72 FR 8231 (February 23, 2007) (SR-NASDAQ-2007-
003).
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with the
provisions of Section 6(b) of the Act,\7\ in general, and with Section
6(b)(4) of the Act,\8\ in particular, in that the proposal

provides for the equitable allocation of reasonable dues, fees, and
other charges among its members and other persons using its facilities.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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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
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

    Written comments on the proposed rule change were neither solicited
nor received.

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

    The foregoing proposed rule change is subject to Section
19(b)(3)(A)(ii) of the Act \9\ and subparagraph (f)(2) of Rule 19b-4
thereunder \10\ because it establishes or changes a due, fee, or other
charge applicable only to a member imposed by the self-regulatory
organization. Accordingly, the proposal is effective upon Commission
receipt of the filing. 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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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-NYSEArca-2007-23 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-NYSEArca-2007-23.
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 the
filing also will be available for inspection and copying at the
principal office of NYSE Arca. 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-NYSEArca-2007-23 and should be submitted on or before
April 6, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-4787 Filed 3-15-07; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 84, Number 52 (Monday, March 18, 2019)]
[Notices]
[Pages 9851-9854]
[FR Doc No: 2019-04946]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85295; File No. SR-CBOE-2019-015]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing of a Proposed Rule Change To Allow $1 Strike Price Intervals
Above $200 on Options on the QQQ and IWM Exchange-Traded Funds

March 12, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on March 6, 2019, Cboe Exchange, Inc. (the ``Exchange'')
filed with the Securities and Exchange Commission (the ``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\ 15 U.S.C. 78a.
    \3\ 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

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to allow for $1 strike prices above $200 on additional options on Units
of certain exchange-traded fund (``ETF'') products. The text of the
proposed rule change is provided below.
(additions are italicized; deletions are [bracketed])
* * * * *
Rules of Cboe Exchange, Inc.
* * * * *
Rule 5.5. Series of Option Contracts Open for Trading
    (a)-(e) (No change).
    . . .Interpretations and Policies:
    .01-.07 (No change).
    .08
    (a) Notwithstanding Interpretation and Policy .01 above, and except
for options on Units covered under Interpretation and Policies .06 and
.07 above, the interval between strike prices of series of options on
Units, as defined under Interpretation and Policy .06 to Rule 5.3, will
be $1 or greater where the strike price is $200 or less and $5.00 or
greater where the strike price is greater than $200. For options on
Units that are used to calculate a volatility index, the Exchange may
open for trading $0.50 strike price intervals as provided for in
Interpretation and Policy .19 to this Rule 5.5.
    (b) Notwithstanding Interpretation and Policy .01 and
Interpretation and Policy .08(a) above, the interval between strike
prices of series of options on Units of the Standard & Poor's
Depository Receipts Trust (``SPY''), iShares S&P 500 Index ETF
(``IVV''), PowerShares QQQ Trust (``QQQ''), iShares Russell 2000 Index
Fund (``IWM''), and The DIAMONDS Trust (``DIA'') will be $1 or greater.
    .09-.23 (No change)
* * * * *
    The text of the proposed rule change is also available on the
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.

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

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

the most significant aspects of such statements.

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

1. Purpose
    The Exchange proposes to amend Interpretation and Policy .08(b) to
Rule 5.5 to allow for the interval between strike prices of series of
options on Units of QQQ and IWM to be $1 or greater where the strike
price is greater than $200.
    Currently, Interpretation and Policy .08(b) to Rule 5.5 allows for
the interval between strike prices of series of options on Units of
SPY, IVV, and DIA to be $1 or greater where the strike price is greater
than $200. Under Rule 5.5 Interpretation and Policy .08(a), the
interval between strike prices of series of options on all other Units
is currently $5.00 or greater where the strike price is greater than
$200. Specifically, the Exchange proposes to modify the interval
setting regime to allow $1 strike price intervals where the strike
price is above $200 for IWM and QQQ options. The Exchange believes that
the proposed rule change would make QQQ and IWM options easier for
investors and traders to use and more tailored to their investment
needs.
    The QQQ and IWM are designed to provide investors different ways to
efficiently gain exposure to the equity markets and execute risk
management, hedging, asset allocation and income generation strategies.
The QQQ is a Unit investment trust designed to closely track the price
and performance of a the Nasdaq-100 Index (``NDX''), which represents
the largest and most active non-financial domestic and international
issues listed on The Nasdaq Stock Market based on market
capitalization. Likewise, the IWM is an index ETF designed to closely
track the price and performance of the Russell 2000 Index (``RUT''),
which represents the small capitalization sector of the U.S. equity
market. In general, QQQ and IWM options provide investors with the
benefit of trading broader markets in a manageably sized contract.
    The value of QQQ is designed to approximate 1/40 the value of the
underlying NDX. For example, if the NDX price level is 1400, QQQ strike
prices generally would be expected to be priced around $35. The value
of IWM is designed to approximate 1/10 the value of the underlying RUT.
In the past year, the NDX has climbed above a price level of 7500, and
the RUT climbed to a price level of approximately 1700 \4\ (both prior
to the December 2018 market-wide decline). As the value of the
underlying ETF (and the index the ETF tracks) and resulting strike
prices for each option continues to appreciate, the Exchange has
received Trading Permit Holder (``TPH'') requests to list additional
strike prices ($1 increments) in QQQ and IWM options above $200. The
QQQ is among the most actively traded ETFs on the market. It is widely
quoted as an indicator of technology stock prices and investor
confidence in the technology and telecommunication market spaces, a
significant indicator of overall economic health. Similarly, IWM is
among the most actively traded ETFs on the market and provides
investors with an investment tool to gain exposure to small U.S. public
companies. Industry-wide trade volume in QQQ more than doubled from
2017 to 2018. As a result, QQQ options and IWM options have grown to
become two of the largest options contracts in terms of trading volume.
Investors use these products to diversify their portfolios and benefit
from market trends.
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    \4\ See Securities Exchange Act Release No. 72990 (September 4,
2014), 79 FR 53799 (September 10, 2014) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change Relating to the
Strike Setting Regimes for SPY and DIA Options) (SR-CBOE-2014-068)
(noting that at the time Interpretation and Policy .08 to Rule 5.5
was amended to modify the interval setting regimes for SPY and DIA
to allow $1 strike price intervals above $200, the price levels for
their respective underlying ETFs hovered around 2000 and 1700,
comparable to the current NDX and RUT price levels).
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    Accordingly, the Exchange believes that offering a wider base of
QQQ and IWM options affords traders and investors important hedging and
trading opportunities, particularly in the midst of current price
trends. The Exchange believes that not having the proposed $1 strike
price intervals above $200 in QQQ and IWM significantly constricts
investors' hedging and trading possibilities. The Exchange therefore
believes that by having smaller strike intervals in QQQ and IWM,
investors would have more efficient hedging and trading opportunities
due to the lower $1 interval ascension. The proposed $1 intervals above
the $200 strike price, will result in having at-the-money series based
upon the underlying ETFs moving less than 1%. The Exchange believes
that the proposed strike setting regime is in line with the slower
movements of broad-based indices. Considering the fact that $1
intervals already exist below the $200 price point and that both QQQ
and IWM have consistently inclined in price toward the $200 level, the
Exchange believes that continuing to maintain the current $200 level
(above which intervals increase 500% to $5), may have a negative effect
on investing, trading and hedging opportunities, and volume. The
Exchange believes that the investing, trading, and hedging
opportunities available with QQQ and IWM options far outweighs any
potential negative impact of allowing QQQ and IWM options to trade in
more finely tailored intervals above the $200 price point.
    The proposed strike setting regime would permit strikes to be set
to more closely reflect the increasing values in the underlying indices
and allow investors and traders to roll open positions from a lower
strike to a higher strike in conjunction with the price movements of
the underlying ETFs. Under the current rule, where the next higher
available series would be $5 away above a $200 strike price, the
ability to roll such positions is effectively negated. Accordingly, to
move a position from a $200 strike to a $205 strike under the current
rule, an investor would need for the underlying product to move 2.5%,
and would not be able to execute a roll up until such a large movement
occurred. As stated, the NDX and RUT have experienced continued, steady
growth. The Exchange believes that with the proposed rule change, the
investor would be in a significantly safer position of being able to
roll his open options position from a $200 to a $201 strike price,
which is only a 0.5% move for the underlying. As a result, the proposed
rule change will allow the Exchange to better respond to customer
demand for QQQ and IWM strike prices more precisely aligned with the
smaller, longer-term incremental increases in respective underlying
ETFs. The Exchange believes that the proposed rule change, like the
other strike price programs currently offered by the Exchange, will
benefit investors by providing investors the flexibility to more
closely tailor their investment and hedging decisions using QQQ and IWM
options. Moreover, by allowing series of QQQ and IWM options to be
listed in $1 intervals between strike prices over $200, the proposal
will moderately augment the potential total number of options series
available on the Exchange. However, the Exchange believes it and the
Options Price Reporting Authority (``OPRA'') have the necessary systems
capacity to handle any potential additional traffic associated with
this proposed rule change. The Exchange also believes that TPHs will
not have a capacity issue due to the proposed rule change. In addition,
the Exchange represents that it

does not believe that this expansion will cause fragmentation of
liquidity, but rather, believes that finer strike intervals will serve
to increase liquidity available as well as price efficiency by
providing more trading opportunities for all market participants.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\5\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \6\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, 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.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    In particular, the proposed rule change to Interpretation and
Policy .08(b) to Rule 5.5 will allow investors to more easily use QQQ
and IWM options. Moreover, the proposed rule change would allow
investors to better trade and hedge positions in QQQ and IWM options
where the strike price is greater than $200, and ensure that investors
in both options are not at a disadvantage simply because of the strike
price.
    The Exchange believes the proposed rule change is consistent with
Section 6(b)(1) of the Act, which provides that the Exchange be
organized and have the capacity to be able to carry out the purposes of
the Act and the rules and regulations thereunder, and the rules of the
Exchange. The rule change proposal allows the Exchange to respond to
customer demand to allow QQQ and IWM options to trade in $1 intervals
above a $200 strike price. The Exchange does not believe that the
proposed rule would create additional capacity issues or affect market
functionality.
    As noted above, ETF options trade in wider $5 intervals above a
$200 strike price, whereby options at or below a $200 strike price
trade in $1 intervals. This creates a situation where contracts on the
same option class effectively may not be able to execute certain
strategies such as, for example, rolling to a higher strike price,
simply because of the $200 strike price above which options intervals
increase by 500%. This proposal remedies the situation by establishing
an exception to the current ETF interval regime for QQQ and IWM options
to allow such options to trade in $1 or greater intervals at all strike
prices.
    The Exchange believes that the proposed rule change, like other
strike price programs currently offered by the Exchange, will benefit
investors by giving them increased flexibility to more closely tailor
their investment and hedging decisions. Moreover, the proposed rule
change is consistent with changes adopted by other exchanges.\7\
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    \7\ See Securities Exchange Act Release No. 72664 (July 24,
2014), 79 FR 44231 (July 30, 2014) (Notice of Filing of Proposed
Rule Change, as Modified by Amendment No. 1, Relating to SPY and DIA
Options) (SR-Phlx-2014-46).
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    With regard to the impact of this proposal on system capacity, the
Exchange believes it and OPRA have the necessary systems capacity to
handle any potential additional traffic associated with this proposed
rule change. The Exchange believes that its members will not have a
capacity issue as a result of this proposal.

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

    The Exchange does not believe that the proposed rule change to
Interpretation and Policy .08(b) to Rule 5.5 will impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Rather, the Exchange believes that the proposed
rule change will result in additional investment options and
opportunities to achieve the investment and trading objectives of
market participants seeking efficient trading and hedging vehicles, to
the benefit of investors, market participants, and the marketplace in
general. Specifically, the Exchange believes that QQQ and IWM options
investors and traders will significantly benefit from the availability
of finer strike price intervals above a $200 price point. In addition,
the interval setting regime the Exchange proposes to apply to QQQ and
IWM options is currently applied to SPY, IVV, and DIA options, which
are similarly popular and widely traded ETF products and track indexes
at similarly high price levels. Thus, the proposed strike setting
regime for QQQ and IWM options will allow options on the most actively
traded ETFs with index levels at corresponding price levels to trade
pursuant to the same strike setting regime. This will permit investors
to employ similar investment and hedging strategies for each of these
options.

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

    The Exchange 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 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate 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 or disapprove such 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 email to<EMAIL_ADDRESS>Please include
File Number SR-CBOE-2019-015 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CBOE-2019-015. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (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 website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-CBOE-2019-015 and should be
submitted on or before April 8, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-04946 Filed 3-15-19; 8:45 am]
BILLING CODE 8011-01-P


                  UNITED STATES ENVIRONMENTAL PROTECTION AGENCY                                   REGION III                                1650 Arch Street                        Philadelphia, Pennsylvania  19103

DATE:	 SUBJECT:    Technical Support Document (TSD) for the State of West Virginia State Implementation Plan for Section 110(a)(2) Infrastructure Requirements for the 2008 8-hour Ozone  National Ambient Air Quality Standards

FROM:	Ellen Schmitt, Environmental Scientist	/s/ 5/16/2013                         Office of Air Program Planning

TO:		File

THRU:	Cristina Fernandez,   	/s/ 5/16/2013 		Associate Director, Office of Air Program Planning

A.   INTRODUCTION         The Environmental Protection Agency (EPA) is taking action on the State of West Virginia State Implementation Plan (SIP) revisions submitted by the West Virginia Department of Environmental Protection (WVDEP) to meet the Clean Air Act (CAA) section 110(a)(2) requirements for the revised 2008 8-hour ozone national ambient air quality standards (NAAQS).

B.  BACKGROUND

      On March 27, 2008, EPA promulgated a revised NAAQS for ozone based on 8-hour average concentrations.  EPA revised the level of the 8-hour ozone NAAQS to 0.075 parts per million (ppm).  Pursuant to section 110(a) of the CAA, states are required to submit SIPs to provide for the implementation, maintenance, and enforcement of a new or revised NAAQS within three years following the promulgation of such NAAQS, or within a shorter period as EPA may prescribe.  More specifically, section 110(a)(1) provides the procedural and timing requirements for SIPs.  Section 110(a)(2) lists specific elements that states must meet for ``infrastructure'' SIP requirements related to a newly established or revised NAAQS.  These requirements include basic SIP elements such as requirements for monitoring, basic program requirements and legal authority that are designed to assure attainment and maintenance of the NAAQS.              Section 110(a) imposes the obligation upon states to make a SIP submission to EPA for a new or revised NAAQS, but the contents of that submission may vary depending upon the facts and circumstances.  In particular, the data and analytical tools available at the time the state develops and submits the SIP for a new or revised NAAQS affects the content of the submission.  The contents of such SIP submissions may also vary depending upon what provisions the state's existing SIP already contains.  In the case of the 2008 8-hour ozone NAAQS, states typically have met the basic program elements required in section 110(a)(2) through earlier SIP submissions in connection with the 1997 8-hour ozone NAAQS.

C.  EPA REQUIREMENTS

      As discussed above, for the 2008 ozone NAAQS, states must provide SIP submissions, or provide certification that the existing SIP contains provisions addressing relevant infrastructure SIP elements from sections 110(a)(2)(A) through (M) of the CAA.

D.  STATE'S SUBMITTAL

      On February 17, 2012, West Virginia provided a submittal to satisfy the requirements of section 110(a)(2) of the CAA for the 2008 ozone NAAQS.  This submittal addressed the following infrastructure elements, or portions thereof, that EPA is proposing to approve:  section 110(a)(2)(A), (B), (C), (D), (E), (F), (G), (H), (J), (K), (L), and (M) of the CAA.  EPA has taken separate action on the portions of CAA section 110(a)(2) infrastructure elements for the 2008 ozone NAAQS as they relate to the West Virginia's Prevention of Significant Deterioration (PSD) program, as required by part C of Title I of the CAA, including portions of CAA section 110(a)(2)(C), (D) and (J).  EPA will take later separate action on CAA section 110(a)(2)(E)(ii) for the 2008 ozone NAAQS as it relates to CAA section 128, "State Boards."

E.  EVALUATION OF STATE SUBMITTAL

1.  Section 110(a)(2)(A)

      West Virginia has established laws and regulations applicable to the 2008 ozone NAAQS that include enforceable emissions limitations and other control measures, means or techniques, as well as schedules and timetables for compliance to meet the applicable requirements of the CAA.  The Secretary of WVDEP (hereafter the Secretary) holds the legislative authority to promulgate regulations concerning air pollution control in accordance with the Administrative Procedures Act (W.Va. Code section 29A3-1 et seq.) and W.Va. Code sections 22-1-3(a), 22-5-4(a)(4) and 22-5-4(a)(17).  Enforceable emission limitations and other control measures for nitrogen oxides (NOx) and volatile organic compounds (VOC) to meet the applicable requirements of the CAA include the following SIP-approved regulations:           *    45CSR13 - "Permits for Construction, Modification, Relocation and Operation of Stationary Sources of Air Pollutants, Notification Requirements, Temporary Permits, General Permits, and Procedures for Evaluation"    *    45CSR14 - "Permits for Construction and Major Modification of Major Stationary Sources of Air Pollution for the Prevention of Significant Deterioration"    *    45CSR19 -  "Permits for Construction and Major Modification of Major Stationary Sources of Air Pollution Which Cause or Contribute to Nonattainment"

	Additionally,  the following state rules are applicable to NOx and VOC emission limitations and control measures: 45CSR30 ("Requirements for Operating Permits"), EPA-approved operating program (66 FR 50325) pursuant to Title V of the CAA, which includes all the enforceable emission limitations or control measures pursuant to 45CSR13, 45CSR14, and 45CSR19, as well as 45CSR21 "Regulation to Prevent and Control Air Pollution from the Emission of Volatile Organic Compounds," 45CSR 29 "Rule Requiring the Submission of Emission Statements for Volatile Organic Compound Emissions and Oxides of Nitrogen Emissions," and 45CSR33 "Acid Rain Provisions and Permits."                On May 9, 2013, EPA finalized a narrow disapproval of West Virginia SIP submittals for the PSD and Clean Air Act section 110 infrastructure elements related to PSD.  The West Virginia PSD submittal did not properly address condensable emissions of particulate matter within the definition of "regulated NSR pollutant."  There are no sanctions associated with this disapproval; however, EPA is required to promulgate a Federal Implementation Plan within two years of final disapproval if the definition of "regulated NSR pollutant" is not corrected.

      In this action, EPA is not proposing to approve or disapprove any existing State provisions with regard to excess emissions during Startup, Shutdown, and Malfunction (SSM) of operations at a facility. EPA believes that a number of states have SSM provisions which are contrary to the CAA and existing EPA guidance (August 11, 1999 Steven Herman and Robert Perciasepe Guidance Memorandum, "State Implementation Plans: Policy Regarding Excess Emissions During Malfunctions, Startup, and Shutdown"), and the Agency is addressing such state regulations in a separate rulemaking.  In the meantime, EPA encourages any State having a deficient SSM provision to take steps to correct it as soon as possible.              Also in this action, EPA is not proposing to approve or disapprove any existing West Virginia rules with regard to director's discretion or variance provisions.  EPA believes that a number of states have such provisions which are contrary to the CAA and existing EPA guidance (see 52 FR 45109, November 1987), and the Agency is taking separate action to address such state regulations.  In the meantime, EPA encourages any state having director's discretion or variance provision which is contrary to the CAA and EPA guidance to take steps to correct the deficiency as soon as possible.              EPA is proposing to determine that the State of West Virginia has met its obligations pursuant to section 110(a)(2)(A) of the CAA.

2.  Section 110(a)(2)(B)

      The Secretary of WVDEP has the authority under W.Va. Code sections 22-5-4(a)(1) & (3) "to develop ways and means for the regulation and control of pollution of the air of the state" and "conduct such studies and research relating to air pollution and its control and abatement."  The Division of Air Quality (DAQ) of WVDEP currently operates and maintains an established network of ambient air monitors in West Virginia for the purpose of assessing compliance with the 2008 ozone NAAQS.  All ambient air monitors within West Virginia's network are a) subject to the Quality Assurance requirements of 40 CFR Part 58, Appendix A and b) have met the minimum siting requirements of 40 CFR part 58, appendix E.                WVDEP informs EPA of planned changes to the monitoring site by providing adequate prior notification.  Pursuant to 40 CFR 58.10, WVDEP submits to EPA, on an annual basis, a monitoring network plan, which describes how West Virginia is complying with monitoring requirements and explains any changes to the monitoring network.  West Virginia's 2011 Annual Air Quality Monitoring Network Design Plan was submitted to EPA on June 22, 2011, and was consequently approved by EPA on December 6, 2011.  EPA approved West Virginia's 2012 Annual Air Quality Monitoring Network Design Plan on February 21, 2013.              As provided in W.Va. Code sections 22-5-4(a)(2), 22-5-10 and CAA section 110(a)(2)(B), WVDEP collects and reports to EPA ambient air quality data for ozone.  West Virginia submits to EPA quarterly reports of air quality data to comply with the requirements of 40 CFR 58.16.  The air quality data for ozone is reviewed, edited, validated, and entered into the EPA air quality system (AQS) for updating pursuant to prescribed AQS procedures, and is certified annually as required under 40 CFR 58.15.                EPA concludes that West Virginia's monitoring network and data system for ozone satisfy the requirements of CAA section 110(a)(2)(B) for the 2008 ozone NAAQS.

3.  Section 110(a)(2)(C)

      The Secretary has the statutory authority to enforce any control measures for the 2008 ozone NAAQS, pursuant to W.Va. Code sections 22-1-3(a), 22-5-4(a)(4), 22-5-4(a)(5), 22-5-4(a)(9), 22-5-4(a)(16) and 22-5-4(a)(17), 22-5-5, and 22-5-6.  West Virginia has an established legal framework and ability to provide for the enforcement of the measures described in the CAA section 110(a)(2)(A) infrastructure element, contained in the SIP-approved regulations: 45CSR13, 45CSR14, and 45CSR19, as well as in the EPA-approved Title V program codified in 45CSR30.  The provisions described meet the requirements for enforcement of the measures described in section 110(a)(2)(C) of the CAA, which EPA is proposing to approve.  EPA has taken separate action on the portion of section 110(a)(2)(C) of the CAA for the 2008 ozone NAAQS as it relates to West Virginia's PSD program as required by part C of Title I of the CAA.  EPA has approved West Virginia's PSD program with the narrow exception of the definition of regulated new source review pollutant for its failure to include condensables.  See (77 FR 63736, October 17, 2012) and (78 FR 27062, May 9, 2013).              EPA is proposing to determine that the state of West Virginia has met its obligations pursuant to section 110(a)(2)(C) of the CAA.         4.  Section 110(a)(2)(D)(i)(I)

      In accordance with the Homer City decision from the U.S. Court of Appeals for the D.C. Circuit,  a state is not required to submit a SIP pursuant to Section 110(a) which addresses section 110(a)(2)(D)(i)(I) until EPA has defined a state's contribution to nonattainment or interference with maintenance in another state. See EME Homer City Generation, LP v. EPA, 696 F.3d 7 (D.C. Cir. 2012), reh'g denied  2013 U.S. App. LEXIS 1623 (Jan. 24., 2013).  Unless the EME Homer City decision is reversed or otherwise modified by the Supreme Court, states such as West Virginia are not required to submit 110(a)(2)(D)(i)(I) SIPs until the EPA has quantified their obligations under that section.  West Virginia's February 17, 2012 infrastructure SIP submission for the 2008 ozone NAAQS did not include a component to address 110(a)(2)(D)(i)(I).  Therefore, in this notice, EPA is not proposing to act on 110(a)(2)(D)(i)(I) for West Virginia's February 17, 2012 infrastructure SIP submission for the 2008 ozone NAAQS.          5.  Section 110(a)(2)(D)(i)(II)

      As mentioned previously for 110(a)(2)(C), EPA has taken separate action on the portion of section 110(a)(2)(D)(i)(II) of the CAA for the 2008 ozone NAAQS as it relates to West Virginia's PSD program as required by part C of Title I of the CAA.               Prong 4 of section 110(a)(2)(D)(i) requires that SIPs include provisions prohibiting any source or other type of emissions activity in one state from interfering with measures to protect visibility required to be included in another state's SIP.  In describing how its submission meets this requirement, West Virginia referred to its June 18, 2008 Regional Haze SIP submittal which included reliance on the Clean Air Interstate Rule (CAIR) for electrical generating units (EGUs).  EPA granted limited approval and limited disapproval of West Virginia's regional haze SIP.  See (77 FR 16932, March 23, 2012).  Although West Virginia's regional haze SIP has not been fully approved, EPA believes that the infrastructure SIP submission together with previously approved SIP provisions, specifically those provisions that require EGUs to comply with CAIR and the additional measures in the regional haze SIP addressing best available retrofit technology (BART) and reasonable progress requirements for other sources or pollutants, are adequate to demonstrate compliance with prong 4, thus, EPA is proposing to fully approve this aspect of the submission.               West Virginia's regional haze SIP relied on West Virginia's previous incorporation of the CAIR into the EPA-approved SIP for West Virginia as an alternative to the requirement that the regional haze SIPs provide for source-specific BART emission limits for SO2 and NOx emissions from EGUs.  At the time the West Virginia regional haze SIP was being developed, the State's reliance on CAIR was fully consistent with EPA's regulations.  CAIR, as originally promulgated, requires significant reductions in emissions of SO2 and NOx to limit the interstate transport of these pollutants, and EPA's determination that states could rely on CAIR as an alternative to requiring BART for CAIR-subject EGUs had specifically been upheld in Utility Air Regulatory Group v. EPA, 471 F.3d 1333 (D.C. Cir. 2006).  Moreover, the states with Class I areas affected by emissions from sources in West Virginia had adopted reasonable progress goals for visibility protection that were consistent with the EGU emission limits resulting from CAIR.               In 2008, however, the D.C. Circuit remanded CAIR back to EPA.  See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008).  The court found CAIR to be inconsistent with the requirements of the CAA, see North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), but ultimately remanded the rule to EPA without vacatur because it found that "allowing CAIR to remain in effect until it is replaced by a rule consistent with [the court's] opinion would at least temporarily preserve the environmental values covered by CAIR." North Carolina, 550 F.3d at 1178.               After the remand of CAIR by the D.C. Circuit and the promulgation by EPA of a new rule  -  the Cross State Air Pollution Rule (CSAPR)  -  to replace CAIR, EPA issued a limited disapproval of West Virginia's regional haze SIP (and other states' regional haze SIPs that relied similarly on CAIR) because EPA believed that full approval of the SIP was not appropriate in light of the court's remand of CAIR and the uncertain but limited remaining period of operation of CAIR.  EPA finalized a limited approval of the West Virginia regional haze SIP, indicating that except for its reliance on CAIR, the SIP met CAA requirements for the first planning period of the regional haze program.  See 77 FR 16932 (March23, 2012).  EPA also finalized a limited FIP for West Virginia, which merely substituted reliance on EPA's more recent CSAPR NOx and SO2 trading programs for EGUs for the SIP's reliance on CAIR.  See (77 FR 33642, June 7, 2012).              Since the above-described developments with regard to West Virginia's regional haze SIP, the situation has changed.  In August 2012, the D.C. Circuit issued a decision to vacate CSAPR.  EME Homer City Generation, LP v. EPA, 696 F.3d 7 (D.C. Cir. 2012), reh'g denied  2013 U.S. App. LEXIS 1623 (Jan. 24., 2013).  In this decision, the court ordered EPA to "continue administering CAIR pending the promulgation of a valid replacement."  Thus, EPA has been ordered by the court to develop a new rule, and to continue implementing CAIR in the meantime, and the opinion makes clear that after promulgating that new rule EPA must provide states an opportunity to draft and submit SIPs to implement that rule.  Implementation of CAIR thus cannot be replaced until EPA has promulgated a final rule through a notice-and-comment rulemaking process; states have had an opportunity to draft and submit SIPs; EPA has reviewed the SIPs to determine if they can be approved; and EPA has taken action on the SIPs, including promulgating a FIP, if appropriate.               Based on the current direction from the court to continue administering CAIR, EPA believes that it is appropriate to rely on CAIR emission reductions as permanent and enforceable for purposes of assessing the adequacy of West Virginia's infrastructure SIP with respect to prong 4 while a valid replacement rule is developed and until implementation plans complying with any new rule are submitted by the states and acted upon by EPA or until any subsequent litigation  provides different direction regarding CAIR and CSAPR.  In addition, EPA believes that based on the court's decision on CSAPR it would be appropriate to propose to rescind its limited disapproval of West Virginia's regional haze SIP and propose a full approval, but EPA will proceed to do so in a separate action.               As neither West Virginia nor EPA has taken any action to remove CAIR from the West Virginia SIP, CAIR remains part of the EPA-approved SIP and can be considered in determining whether the SIP as a whole meets the requirement of prong 4 of 110(a)(2)(D)(i).  EPA is proposing to approve the infrastructure SIP submission with respect to prong 4 because West Virginia's regional haze SIP which EPA has given a limited approval in combination with its SIP provisions to implement CAIR adequately prevent sources in West Virginia from interfering with measures adopted by other states to protect visibility during the first planning period.  While EPA is not at this time proposing to change the March 23, 2012, limited approval and limited disapproval of West Virginia's regional haze SIP, EPA expects to propose an appropriate action regarding West Virginia's regional haze SIP in a separate action.

6.  Section 110(a)(2)(D)(ii)

      West Virginia has met its obligations pursuant to CAA section 126 and it has no currently pending obligations pursuant to CAA Section 126(b) related to the 2008 ozone NAAQS.  According to the submittals, the state has adequate provisions insuring future compliance with the requirements of sections 126 and 115 of the CAA as may be necessary.              EPA is proposing to determine that the state has met its obligations pursuant to 110(a)(2)(D)(ii).          7.  Section 110(a)(2)(E)(i) and (iii)

      As required under W.Va. Code section 22-5-4(a)(8), WVDEP has demonstrated to have adequate personnel to carry out the implementation plan with respect to the 2008 ozone NAAQS requirements.  At present, a staff of approximately 90 full time employees is employed at WVDEP's Division of Air Quality (DAQ).  West Virginia's Air Director supervises the air monitoring, compliance and enforcement, hazardous waste, permitting and planning sections, as well as three regional DAQ offices, and answers to the Secretary.  DAQ believes its funding sources are sufficient to provide adequate personnel for those purposes and does not anticipate any changes in resources considered necessary during 5 years following SIP submittal.               The Air Pollution Control Act of West Virginia (APCA) provides adequate funding under W.Va. Code sections 22-1-10(a) and 22-5-4(a)(17) to carry out West Virginia SIP.  W.Va. Code section 22-5-12 sets forth the statutory operating permit requirements for stationary sources under Title V of the CAA.  EPA-approved rule 45CSR30 establishes fees sufficient to cover the direct and indirect costs of administering the air pollution control planning process, Title V operating permit program, and support the air pollution control program authorized by statute.  The APCA also authorizes the establishment of fees to cover non-Title V permitting costs under 45CSR22 "Air Quality Management Fee Program."  Additionally, the air quality program receives revenue from fines and penalties (Air Pollution Control Fund) and federal funds under sections 105 and 103 of the CAA, and state general appropriations.               The APCA, under W.Va. Code section 22-5-1, declares the state's policy "to fulfill its primary responsibility for assuring air quality" pursuant to the CAA.  The Secretary is authorized under W.Va. Code sections 22-1-6(c)(1) and 22-5-4(a)(12) to carry out and represent the state in any and all matters pertaining to the implementation plan.  The Secretary has the authority under W.Va. Code section 22-5-4(a)(16) "to do all things necessary and convenient to prepare and submit a plan or plans for the implementation, maintenance and enforcement of the Federal Clean Air Act."  The Secretary is not prohibited by any provision of federal or state law from carrying out the implementation plan or portion thereof.                The Secretary has the authority under W.Va. Code sections 22-1-3(a), 22-5-4(a)(4) and 22-5-4(a)(17) to promulgate rules in accordance with the Administrative Procedures Act (W.Va. Code section 29A3-1 et seq.).  Approximately forty rules revised under the auspices of the APCA are currently in effect and codified at Title 45 of the Code of State Rules, including the ambient air quality standards for ozone and other criteria pollutants contained in 45 CSR 8.  West Virginia has an EPA-approved air permitting program for both major and minor facilities, under state rules 45CSR13, 45CSR14, 45CSR19 and 45CSR30 (as applicable).                EPA finds that West Virginia satisfies the requirements described in CAA section 110(a)(2)(E)(i) and (iii).               As to CAA section 110(a)(2)(E)(ii), EPA will take later separate action on this portion of section 110(a)(2)(E) for the 2008 ozone NAAQS as it relates to CAA section 128, "State Boards."        8.  Section 110(a)(2)(F)

      W.Va. Code section 22-5-4(a)(15) authorizes the Secretary to require the installation, maintenance and replacement of equipment, and the implementation of other necessary steps by owners or operators of stationary sources to monitor and report emissions of NOx or VOC from such sources as the Secretary may prescribe, through permits issued under 45CSR13, 45CSR14, 45CSR19, 45CSR30, and via compliance orders.  Pursuant to the 40 CFR part 51, subpart A, "Air Emission Reporting Rule" (AERR), DAQ's emissions inventory program provides source-specific emissions data to EPA.  These sources monitor their annual and ozone season NOx emissions in accordance with 40 CFR Part 75.               In accordance with the emission reports and recordkeeping requirements set forth in 40 CFR part 51, subpart K, W.Va. Code section 22-5-4(a)(15) authorizes the Secretary to require periodic reports on the nature and amounts of emissions and emissions-related data from owners or operators of stationary sources (monitoring data) of NOx or VOC emissions through permits issued under 45CSR13, 45CSR14, 45CSR19, 45CSR39, 45CSR40, and via compliance orders.  Pursuant to W.Va. Code section 22-5-4(a)(14), the Secretary is authorized to require such information as the Secretary may require in a form or manner prescribed by the Secretary (emissions inventory program).  DAQ periodically reports emission inventory information to EPA as required by 40 CFR part 51, subparts A and K.              W.Va. Code section 22-1-6(d)(3) authorizes the Secretary to "investigate for violations of statutes or rules which the department is charged with enforcing."  W.Va. Code section 22-5-4(a)(3) authorizes the Secretary to correlate periodic emissions reports with any NOx or VOC emission limitations or standards established pursuant to 45CSR13, 45CSR14, 45CSR19, 45CSR30, via compliance orders or the CAA.  As set forth in W.Va. Code section 22-5-10, the Secretary makes available at reasonable times for public inspection the periodic emissions reported under W.Va. Code sections 22-5-4(a)(14) & (15).  The Secretary has the responsibility of making all records, reports or information obtained by the WVDEP or referred to at public hearings under the provisions of the APCA, available to the public, except to the extent the records, reports or information are protected by confidentiality.  The types of records WVDEP routinely provides access to include notifications, inspection reports, notices of violation, enforcement orders, applications, permit review letters, sample results, monitoring reports, permits, approvals and denials that would relate to section110(a)(2)(F) of the CAA.  WVDEP generally makes information available for public access through its website, but also makes hard copy reports available upon written request.               Based upon EPA's review of the above referenced provisions, EPA finds West Virginia's SIP revision meets the obligations of CAA section 110(a)(2)(F).

9.  Section 110(a)(2)(G)

      West Virginia has authority comparable to that in section 303 of the CAA and adequate contingency plans to implement such authority.  Section 303 of the CAA provides authority to the EPA's Administrator to restrain any source from causing or contributing to emissions which present an "imminent and substantial endangerment to public health or welfare, or the environment."  W.Va. Code section 22-5-5 authorizes the Secretary to issue an order to cease and desist any activity that violates the APCA.  The Secretary may also suspend, modify or revoke a source's permit.  Under W.Va. Code section 22-5-6, the Secretary may also institute lawsuits for civil penalties.  W.Va. Code section 22-5-7 authorizes the Secretary to seek applications for injunctive relief.  W.Va. Code section 22-5-8 authorizes the Secretary, with the written authorization of the Governor, to shut down a source of NOx or VOC emissions, thereby preventing the emission of air pollutants which substantially contributes to an emergency that requires immediate action to protect public health.  As provided in W.Va. Code sections 22-5-4(a)(2) and 22-5-10, the Secretary may consult with EPA to affirm accuracy of any information considered while executing authority under W.Va. Code sections 22-5-5, 22-5-6, 22-5-7 or 22-5-8.                West Virginia's SIP approved rule 45 CSR 11 provides a mechanism to prevent the buildup of ozone concentrations during periods of adverse meteorological conditions in which air pollutants may accumulate, thereby preventing the occurrence of an emergency due to the effects of these pollutants on health.  West Virginia initiates the use of specific emission reduction plans for three stages of pollutant concentration levels to prevent further deterioration of the air quality in the state.                Pursuant to 40 CFR 51.152(c), West Virginia does not need to develop episode contingency plans as it is classified as a Priority III Region for ozone.                EPA finds that West Virginia has met the requirements of section 110(a)(2)(G) of the CAA.                10.  Section 110(a)(2)(H)

      EPA finds that West Virginia has demonstrated that it has adequate authority to satisfy CAA Section 110(a)(2)(H).  West Virginia has adequate authority to address revisions to SIPs, as set forth in 40 CFR 51.104.  Specifically, W.Va. Code section 22-5-4(a)(16) authorizes the Secretary to do all things necessary and convenient to prepare and submit a plan for the implementation, maintenance and enforcement of the CAA.  WVDEP has historically revised, and will continue to revise its NAAQS rules as necessary to take account of revisions of the national primary or secondary ambient air quality standards or improved or more expeditious methods of attaining the standards.  West Virginia has promulgated various versions of the rule 45CSR8 "Ambient Air Quality Standards" to take account of revisions of, and maintain, the primary and secondary NAAQS.                Based upon EPA's review of the above referenced submittals, EPA is proposing to determine that West Virginia has met its obligations pursuant to 110(a)(2)(H).        11.  Section 110(a)(2)(I):

      EPA does not expect infrastructure SIP submissions to address this element.  Nonattainment area plans required under part D of Title I of the CAA are required on a different schedule from the CAA section 110(a)(2) infrastructure elements and, thus, will be reviewed and acted upon through a separate process.

12.  Section 110(a)(2)(J)

      As mentioned previously for 110(a)(2)(C), EPA has taken separate action on the portion of section 110(a)(2)(J) of the CAA for the 2008 ozone NAAQS as it relates to West Virginia's PSD program as required by part C of Title I of the CAA.         		West Virginia satisfies the applicable requirements of section 121 of the CAA.  The APCA provides adequate authority under W.Va. Code section 22-5-4(a)(2) for West Virginia's practices of consultation with local governments, organizations and Land Managers for purposes of air pollution control.  WVDEP also consults with such entities regarding implementation plans for air quality maintenance requirements, preconstruction review of direct sources, nonattainment requirements, and prevention of significant deterioration.  For the 2008 ozone NAAQS, West Virginia's permitting program includes three SIP-approved rules: minor NSR rule 45CSR13 (68 FR 9559), PSD rule 45CSR14 (76 FR 30832), and major NSR rule 45CSR19 (71 FR 64468).  West Virginia also has an approved Title V operating permit program (66 FR 50325).

      W.Va. Code section 22-4-(a)(10) authorizes the WVDEP's DAQ to notify the public of imminent and serious hazards to public health.  W.Va. Code section 22-1-12 provides authority for the public notification of NAAQS violations and education efforts as required by CAA section 127.  Each year, WVDEP issues a comprehensive Air Quality Annual Report, which compares monitored air quality data with the NAAQS and tracks the Air Quality Index.  The Air Quality Annual Report contains emissions information and air quality highlights from the previous year, provides public awareness of criteria pollutants and their effects on health, and provides educational website links to tips that improve air quality, links to technical websites and outreach efforts.              With regard to the visibility protection aspect of 110(a)(2)(J), EPA recognizes that states are subject to visibility and regional haze program requirements under part C of the Act (which includes sections 169A and 169B).  In the event of the establishment of a new NAAQS, however, the visibility and regional haze program requirements under part C do not change.  Thus, EPA finds that there are no applicable visibility obligations under part C "triggered" under section 110(a)(2)(J) when a new NAAQS becomes effective.  West Virginia has submitted SIP revisions to satisfy the requirements of the CAA Section 169A and 169B, and the regional haze and BART rules contained in 40 CFR 51.308.  On March 23, 2012, EPA published a final rulemaking regarding West Virginia's regional haze program, consisting of a limited approval and a limited disapproval.  See 77 FR 16932.  In EPA's view, the current status of West Virginia's regional haze SIP as having not been fully approved is not a bar to full approval of the infrastructure SIP submission with respect to the visibility protection aspect of 110(a)(2)(J), and EPA is proposing to fully approve the infrastructure SIP for this aspect.  While EPA is not at this time proposing to change the March 23, 2012 limited approval and limited disapproval of West Virginia's Regional haze SIP itself, EPA expects to address the approval status of the regional haze SIP in a separate action.              EPA is proposing to determine that the state has met its obligations pursuant to CAA Section 110(a)(2)(J) (except for the portion of this element related to PSD upon which EPA has taken separate action).

13.  Section 110(a)(2)(K)

      EPA proposes to find that West Virginia has the authority and technical capability to conduct air quality modeling in order to assess the effect on ambient air quality relevant pollutant emissions.  W.Va. Code sections 2-5-4(a)(1) & (3) authorize the Secretary to "develop ways and means for the regulation and control of pollution of the air of the state" and "conduct such studies and research relating to air pollution and its control and abatement."  Inherent in West Virginia's authority to meet the NAAQS and to conduct studies and research is the obligation for WVDEP to perform modeling as required under the CAA to demonstrate attainment of the NAAQS, as prescribed by the EPA's Administrator.  WVDEP's DAQ employs one full time technical employee who is responsible for air quality modeling.  West Virginia will perform modeling, as required under the CAA to demonstrate attainment of the 2008 8-hour ozone NAAQS.  Air quality modeling to be conducted with respect to the 2008 ozone NAAQS may utilize regional scale photochemical models such as Community Multiscale Air Quality Modeling System (CMAQ) and Comprehensive Air Quality Model with Extensions (CAMx).              Also, West Virginia can provide relevant ambient air quality data as part of the permitting and NAAQS interpretation process.  W.Va. Code sections 22-5-10, 22-5-4(a)(2) and 22-5-4(a)(16) authorize the Secretary to submit, upon request by the EPA's Administrator, modeling data predicting the effect on ambient air quality of any emissions of any air pollutant for which the Administrator has established a NAAQS.  West Virginia will submit to EPA current and future air quality modeling data as part of its relevant SIP submissions and through Federal grant commitments or in other ways that EPA may request.              Based upon EPA's review of the above referenced submittals, EPA is proposing to determine that  West Virginia has met its obligations pursuant to CAA section 110(a)(2)(K).

14.  Section 110(a)(2)(L)

      West Virginia's program permit fees are contained in the SIP-approved major NSR rule 45CSR19 (71 FR 64468).  Program permit fees are also contained in West Virginia's PSD rule, on which, as mentioned previously, EPA has taken separate action.  West Virginia also has an approved Title V operating permit program under 45CSR30 (66 FR 50325).  Title V program's permit fees, which satisfy the fee determination and certification requirements set forth in 40 CFR 70.9, are contained in 45CSR30.  The collected fees in West Virginia have been sufficient to cover the costs of permit review and implementation and enforcement of permit terms and conditions.                Based upon EPA's review of the above referenced submittals, EPA is proposing to determine that the State has met its obligations pursuant to 110(a)(2)(L).

15.  Section 110(a)(2)(M)

      The Secretary has the authority under W.Va. Code section 22-5-4(a)(16) "to do all things necessary and convenient to prepare and submit a plan or plans for the implementation, maintenance and enforcement of the Federal Clean Air Act."  Under this statute, and pursuant to the General Plan Requirements set forth in 40 CFR 51.240, the WVDEP's DAQ is the organization authorized to develop, implement and enforce West Virginia SIP.  W.Va. Code section 22-5-4(a)(2) authorizes the Secretary to advise, consult, and cooperate with local political subdivisions affected by the implementation plan.  West Virginia consults with local governments, organizations and Land Managers with respect to SIP development.  DAQ also consults with such entities regarding implementation plans for air quality maintenance requirements, preconstruction review of direct sources, nonattainment requirements, and PSD.              In accordance with the federal procedural requirements at 40 CFR 51.102, any plan or plan revision, or individual compliance schedule, prepared by DAQ is subject to a 30 day public notice period with public hearing, or in cases where there is little anticipated public interest, the opportunity for a public hearing.  State rules which contain such public notice procedures include permitting rules 45CSR13, 45CSR14, 45CSR19 and 45CSR30.  The public notice and hearing processes fulfill the requirements for consultation with local political subdivisions affected by the SIP.               Based upon EPA's review of the above referenced submittals, EPA is proposing to determine that the State has met its obligations pursuant to 110(a)(2)(M).                F.  CONCLUSIONS AND RECOMMENDED AGENCY ACTION

      EPA has analyzed West Virginia's infrastructure submittal for the 2008 ozone NAAQS and the Agency proposes to conclude that West Virginia's submittal meets the requirements of section 110(a)(2)(A), (B), (C), (D), (E), (F), (G), (H), (J), (K), (L), and (M), or portions thereof, of the CAA.  EPA has taken separate action on the portions of CAA section 110(a)(2) infrastructure elements for the 2008 ozone NAAQS as they relate to the West Virginia's PSD program, as required by part C of Title I of the CAA, including portions of CAA section 110(a)(2)(C), (D) and (J).                It is recommended that a notice of proposed rulemaking be prepared approving West Virginia's infrastructure submittal for the 2008 8-hour ozone NAAQS.


[Federal Register: July 19, 2010 (Volume 75, Number 137)]
[Notices]
[Page 41916-41918]
[DOCID:fr19jy10-127]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62490; File No. SR-NASDAQ-2010-078]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of a Proposed Rule Change as Modified by Amendment No.
1 Thereto To Modify Rule 7019 Governing Market Data Distribution Fees

July 13, 2010.
    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 June 29, 2010, The NASDAQ Stock Market LLC (``Nasdaq'' or the
``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. On July
13, 2010, Nasdaq filed Amendment No. 1 to the proposed rule change. The
Commission is publishing this notice to solicit comments on the
proposed rule change as amended 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

    Nasdaq proposes to modify Rule 7019 governing market data
distribution fees to harmonize distributor and direct access fees for
depth products.
    The text of the proposed rule change is below. Proposed new
language is in italics; proposed deletions are in brackets.\3\
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    \3\ Changes are marked to the rule text that appears in the
electronic Nasdaq Manual found at http://
nasdaqomx.cchwallstreet.com.
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* * * * *
7019. Market Data Distributor Fees
    (a) No change.
    (b) The charge to be paid by Distributors of the following Nasdaq
Market Center real time data feeds shall be:

----------------------------------------------------------------------------------------------------------------
                                                           Monthly direct    Monthly internal   Monthly external
                                                             access fee      distributor fee    distributor fee
----------------------------------------------------------------------------------------------------------------
Issue Specific Data
Dynamic Intraday
NASDAQ-listed security depth entitlements [TotalView]..             $2,000             $1,000             $2,500
Non NASDAQ-listed security depth entitlements                        1,000                500              1,250
 [OpenView]............................................
----------------------------------------------------------------------------------------------------------------

     (c)-(d) No change.
* * * * *

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

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

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

1. Purpose
    Nasdaq is proposing to modify Rule 7019 governing market data
distribution fees to harmonize the depth distributor fees by including
Level 2, also known as NQDS, into the current fee (TotalView) for
Nasdaq-listed securities. Currently, the data feed that contains the
Nasdaq Level 2 entitlement and OpenView entitlement includes
distributor fees for non-Nasdaq listed securities (under the OpenView
entitlement) but does not include distributor fees for Nasdaq listed
securities as TotalView does. Harmonization of the depth distributor
fee entitlement for Nasdaq-listed securities on the Level 2 data
product, consistent with other Nasdaq depth products such as TotalView,
ensures product and policy consistency. As mentioned above, the Nasdaq
Level 2 data feed contains two different entitlements (the OpenView
entitlement and Level 2 entitlement). The data feed is the physical
stream of data, whereas the entitlement is the subscription for which
customers sign-up.
    The Nasdaq Level 2 entitlement was created in 1983 at a time that
all real-time products fell under the auspices of the UTP Plan.
Subsequently, Nasdaq created a separate security information processor
for UTP data in 2002 and petitioned the SEC to remove the Level 2
entitlement from the UTP Plan. When Nasdaq received exchange status in
2006, Level 2 data was removed from the UTP plan. Currently, the Level
2 data feed carries top-of-file exchange participant quotations for
both Nasdaq and Consolidated Quotation System issues. This information
is also carried in TotalView along with the full participant quotes. As
such, Level 2 is a subset of TotalView data.
    Like Nasdaq's other products, the Level 2 data feed is fed directly
by the Nasdaq execution system and is offered in a full range of
network protocols just as with TotalView. Meaning the Nasdaq Level 2
data feed uses the same system infrastructure as TotalView and as such,
the entitlement for the distributor fees should be the same.
    In addition to the new distributor fees, Nasdaq is looking to
expand the direct access fee to customers who subscribe to the Level 2
entitlement. As with the disparity in the TotalView distributor fee,
customers who only access the Level 2 information through the Level 2
entitlement directly from the Exchange are not charged a direct access
fee (as ``Direct Access'' is defined in Nasdaq Rule 7019). Nasdaq is
seeking to remedy this so that these customers are

charged the same direct access fee as are customers of TotalView and
OpenView. It is important to note that customers will only be charged
one direct access fee for Nasdaq listed securities and one direct
access fee for non-Nasdaq listed securities mimicking the TotalView and
OpenView direct access entitlements.
    The Exchange believes that the harmonization of the distributor fee
and direct access fee makes Nasdaq's depth distributor fees and direct
access fees consistent across products and allows Nasdaq to assess a
fair price for the value delivered among all of Nasdaq's depth
products. Firms would only pay one distributor fee and one direct
access fee for a non-Nasdaq listed securities entitlement, regardless
of the number of feeds consumed. Additionally, Firms would only pay one
distributor fee and one direct access fee for a Nasdaq listed
securities entitlement, regardless of the number of feeds consumed.
This proposed rule change also has no affect on professional and non-
professional user fees as this change is designed for the harmonization
of distributor and direct access fees only.
    If the Commission approves the filing in August 2010 but after
August 1, 2010, the distributor fees as set forth herein will be in
effect and cover the full month and will not be prorated.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\4\ in general and with Section
6(b)(4) of the Act,\5\ as stated above, in that it provides an
equitable allocation of reasonable fees among users and recipients of
Nasdaq data. In adopting Regulation NMS, the Commission granted self-
regulatory organizations and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data.
---------------------------------------------------------------------------

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

    The proposed rule change in this instance appears to be precisely
the sort of rule change that the Commission envisioned when it adopted
Regulation NMS. The Commission concluded that Regulation NMS--by
deregulating the market in proprietary data--would itself further the
Act's goals of facilitating efficiency and competition:

    [E]fficiency is promoted when broker-dealers who do not need the
data beyond the prices, sizes, market center identifications of the
NBBO and consolidated last sale information are not required to
receive (and pay for) such data. The Commission also believes that
efficiency is promoted when broker-dealers may choose to receive
(and pay for) additional market data based on their own internal
analysis of the need for such data.\6\
---------------------------------------------------------------------------

    \6\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496 (June 29, 2005).

    By removing ``unnecessary regulatory restrictions'' on the ability
of exchanges to sell their own data, Regulation NMS advanced the goals
of the Act and the principles reflected in its legislative history. If
the free market should determine whether, proprietary data is sold to
broker-dealers at all, it follows that the price at which such data is
sold should be set by the market as well.

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

    Nasdaq does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. As the Commission
has recognized,\7\ the market for transaction execution and routing
services is highly competitive, and the market for proprietary data
products is complementary to it, since the ultimate goal of such
products is to attract further order flow to an exchange. Thus,
exchanges lack the ability to set fees for executions or data at
inappropriately high levels. Order flow is immediately transportable to
other venues in response to differences in cost or value. Similarly, if
data fees are set at inappropriate levels, customers that control order
flow will not make use of the data and will be more inclined to send
order flow to exchanges providing data at fees they consider more
reasonable.
---------------------------------------------------------------------------

    \7\ Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21).
---------------------------------------------------------------------------

    The market for market data products is currently competitive and
inherently contestable because there is fierce competition for the
inputs necessary to the creation of proprietary data and strict pricing
discipline for the proprietary products themselves. Numerous exchanges
compete with each other for listings, trades, and market data itself,
providing virtually limitless opportunities for entrepreneurs who wish
to produce and distribute their own market data. This proprietary data
is produced by each individual exchange, as well as other entities, in
a vigorously competitive market.
    With regard to the market for executions, broker-dealers currently
have numerous alternative venues for their order flow, including
multiple competing self-regulatory organization (``SRO'') markets, as
well as broker-dealers (``BDs'') and aggregators such as the Direct
Edge and LavaFlow electronic communications network (``ECN''). Each SRO
market competes to produce transaction reports via trade executions,
and FINRA-regulated Trade Reporting Facilities (``TRFs'') compete to
attract internalized transaction reports. It is common for BDs to
further and exploit this competition by sending their order flow and
transaction reports to multiple markets, rather than providing them all
to a single market.
    Competitive markets for order flow, executions, and transaction
reports provide pricing discipline for the inputs of proprietary data
products. The large number of SROs, TRFs, and ECNs that currently
produce proprietary data or are currently capable of producing it
provides further pricing discipline for proprietary data products. Each
SRO, TRF, ECN and BD is currently permitted to produce proprietary data
products, and many currently do or have announced plans to do so,
including Nasdaq, NYSE, Alternext, NYSEArca, and BATS.
    Any ECN or BD can combine with any other ECN, broker-dealer, or
multiple ECNs or BDs to produce jointly proprietary data products.
Additionally, non-broker-dealers such as order routers like LAVA, as
well as market data vendors can facilitate single or multiple broker-
dealers' production of proprietary data products. The potential sources
of proprietary products are virtually limitless.
    The fact that proprietary data from ECNs, BDs, and vendors can by-
pass SROs is significant in two respects. First, non-SROs can compete
directly with SROs for the production and sale of proprietary data
products, as BATS and Arca did before registering as exchanges by
publishing proprietary book data on the Internet. Second, because a
single order or transaction report can appear in an SRO proprietary
product, a non-SRO proprietary product, or both, the data available in
proprietary products is exponentially greater than the actual number of
orders and transaction reports that exist in the marketplace writ
large.
    Market data vendors provide another form of price discipline for
proprietary data products because they control the primary means of
access to end users. Vendors impose price restraints based upon their
business models. For example, vendors such as Bloomberg and Reuters
that assess a surcharge on data they sell may refuse to offer
proprietary products that end users will

not purchase in sufficient numbers. Internet portals, such as Google,
impose a discipline by providing only that data which will enable them
to attract ``eyeballs'' that contribute to their advertising revenue.
Retail broker-dealers, such as Schwab and Fidelity, offer their
customers proprietary data only if it promotes trading and generates
sufficient commission revenue. Although the business models may differ,
these vendors' pricing discipline is the same: They can simply refuse
to purchase any proprietary data product that fails to provide
sufficient value. Nasdaq and other producers of proprietary data
products must understand and respond to these varying business models
and pricing disciplines in order to successfully market proprietary
data products.
    In addition to the competition and price discipline described
above, the market for proprietary data products is also highly
contestable because market entry is rapid, inexpensive, and profitable.
The history of electronic trading is replete with examples entrants
that swiftly grew into some of the largest electronic trading platforms
and proprietary data producers: Archipelago, Bloomberg Tradebook,
Island, RediBook, Attain, TracECN, and BATS Trading. Several ECNs have
existed profitably for many years with a minimal share of trading,
including Bloomberg Tradebook and NexTrade.
    Regulation NMS, by deregulating the market for proprietary data,
has increased the contestability of that market. While broker-dealers
have previously published their proprietary data individually,
Regulation NMS encourages market data vendors and broker-dealers to
produce proprietary products cooperatively in a manner never before
possible. Multiple market data vendors already have the capability to
aggregate data and disseminate it on a profitable scale, including
Bloomberg, Reuters and Thomson. New entrants are already on the
horizon, including ``Project BOAT,'' a consortium of financial
institutions that is assembling a cooperative trade collection facility
in Europe. These institutions are active in the United States and could
rapidly and profitably export the Project Boat technology to exploit
the opportunities offered by Regulation NMS.
    In establishing the price for market data products, Nasdaq
considered the competitiveness of the market for market data and all of
the implications of that competition. Nasdaq believes that it has
considered all relevant factors and has not considered irrelevant
factors in order to establish a fair, reasonable, and not unreasonably
discriminatory fee and an equitable allocation of fees among all users.

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

    No written comments were either solicited or received.

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

    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 such 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-NASDAQ-2010-078 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2010-078. 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 Web site
viewing and printing in the Commission's Public Reference Room, on
official business days between the hours of 10 a.m. and 3 p.m. Copies
of the filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NASDAQ-2010-078 and should be submitted on or before
August 9, 2010.
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    \8\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-17493 Filed 7-16-10; 8:45 am]
BILLING CODE 8010-01-P