<EPA REGISTRATION DIVISION COMPANY NOTICE OF FILING FOR PESTICIDE PETITIONS PUBLISHED IN THE FEDERAL REGISTER  (7/1/2007) >

<EPA Registration Division contact: [insert name and telephone number with area code] >

<INSTRUCTIONS:  Please utilize this outline in preparing the pesticide petition.  In cases where the outline element does not apply, please insert “NA-Remove” and maintain the outline. Please do not change the margins, font, or format in your pesticide petition. Simply replace the instructions that appear in green, i.e., “[insert company name],” with the information specific to your action. >

<TEMPLATE: >

<Bayer CropScience >

< PP# 3F8180 >

<	EPA has received a pesticide petition (PP#3F8180) from Bayer CropScience, 2 T.W. Alexander Drive, P.O. Box 12014, Research Triangle Park, NC  27709 proposing, pursuant to section 408(d) of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a(d), to amend 40 CFR part 180.555 >

<	by establishing tolerances and/or changing existing tolerances for residues of>

<	trifloxystrobin (benzeneacetic acid, (E,E)-α-(methoxyimino)-2-[[[[1-[3- (trifluoromethyl) phenyl]ethylidene]amino]oxy]methyl]-methyl ester) and the free form of its acid metabolite CGA–321113 ((E,E)-methoxyimino-[2-[1-(3-trifluoromethyl-phenyl)-ethylideneaminooxym ethyl]-phenyl]acetic acid) in or on the raw agricultural commodity [pea, dry, seed] at 0.06 parts per million (ppm); [pea, field, hay] at 15 parts per million (ppm); [pea, field, vines] at 4.0 parts per million (ppm); [chickpea, seed] at 0.06 parts per million (ppm); and [lentil, seed] at 0.06 parts per million (ppm).  EPA has determined that the petition contains data or information regarding the elements set forth in section 408 (d)(2) of  FDDCA; however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data supports granting of the petition. Additional data may be needed before EPA rules on the petition. >

<A. Residue Chemistry>

<	1. Plant metabolism.   SEQ CHAPTER \h \r 1 The metabolism of trifloxystrobin in plants (cucumbers, apples, wheat, sugar beets and peanuts) is well understood. Identified metabolic pathways are substantially similar in plants and animals (goat, rat and hen). EPA has determined that trifloxystrobin parent and its metabolite CGA-321113 are the residue of concern for tolerance setting purposes. >

<	2. Analytical method.   SEQ CHAPTER \h \r 1 A practical analytical methodology for detecting and measuring levels of trifloxystrobin in or on raw agricultural commodities has been submitted. The limit of detection (LOD) for each analyte of this method is 0.08 ng injected, and the limit of quantitation (LOQ) is 0.02 ppm. The method is based on crop specific cleanup procedures and determination by gas chromatography with nitrogen-phosphorus detection.  A newer analytical method is available employing identical solvent mixtures and solvent to matrix ratio (as the first method), deuterated internal standards, and liquid chromatography/mass spectrometry-mass spectrometry (LC/MS-MS) with an electrospray interface, operated in the positive ion mode.  The LODs for trifloxystrobin range from 0.002 ppm to 0.01 ppm, depending on the crops, and the LOQ of each analyte is 0.01 ppm. >

<	3. Magnitude of residues.

Nine field-residue trials (eight harvest, one decline) were established across Canada (three trials in Crop Growing Region 7, five in Crop Growing Region 14) and the US (1 in Crop Growing Regions 7) where dry peas are commonly grown. The treated plot received two foliar spray applications of FOX 325 SC at 0.88 L FOX 325 SC/ha/application (286 g ai/ha/application) for a total target seasonal rate of 572 g ai/ha. FOX 325 SC active ingredient is comprised of 150 g trifloxystrobin/L and 175 g prothioconazole/L. The corresponding target rate for trifloxystrobin was 132 g trifloxystrobin/ha/application for a total seasonal rate of 264 g trifloxystrobin/ha.  The residue data from this study with dry peas is intended to support proposed tolerances for dry peas, chickpeas and lentils.

Dry pea vines (forage) and hay were collected at PHIs of 6 to 8 days in the eight harvest trials and at 0, 3, 7, and 13 days in the single decline trial. Dry pea seed was collected at PHIs of 29 to 31 days in the harvest trials and at 20, 25, 31, 34, and 40 days in the decline trial. Vines, hay, and seed samples were collected from the control plots at the same time the 7 day vine and pea and the 30-day seed samples were collected from the treated plots.  All samples were placed in frozen storage within 8¼ hours after collection.  The samples were analyzed for residue of total trifloxystrobin (sum of trifloxystrobin and trifloxystrobin acid). The residue of total trifloxystrobin was quantitated by high-pressure liquid chromatography/triple stage quadrupole mass spectrometry (LC/MS/MS) using stable-labeled internal standards. The limit of quantitation (LOQ) for total trifloxystrobin residue was 0.02 ppm for dry pea vines, hay, and seed.

Total trifloxystrobin residue in dry pea seed ranged from <0.020 ppm to a maximum of 0.033 ppm for individual samples collected at the desired PHI of 30 days. The HAFT residue found in/on dry pea seed was 0.032 ppm.

Total trifloxystrobin residue in dry pea hay ranged from 2.1 ppm to a maximum of 8.4 ppm for individual samples collected at the desired PHI of 7 days. The HAFT residue found in/on dry pea hay was 7.1 ppm.

Total trifloxystrobin residue in dry pea vines ranged from 0.58 ppm to a maximum of 2.3 ppm for individual samples collected at the desired PHI of 7 days. The HAFT residue found in/on dry pea vines was 2.0 ppm.

<B. Toxicological Profile>

<	1. Acute toxicity.  There is a full battery of acute toxicity studies for trifloxystrobin. Trifloxystrobin is of mild acute toxicity by oral, dermal, or inhalation routes of exposure (Cat. IV), however it is a strong dermal sensitizer. Trifloxystrobin is a mild ocular (Cat III) and dermal irritant (Cat IV). >

<	2. Genotoxicty.   SEQ CHAPTER \h \r 1 No genotoxic activity is expected of trifloxystrobin under in-vivo or physiological conditions. The compound has been tested for its potential to induce gene mutation and chromosomal changes in five different test systems. The only positive finding was seen in the in vitro test system (Chinese hamster V79 cells) as a slight increase in mutant frequency at a very narrow range (250 – 278 (g/mL) of cytotoxic and precipitating concentrations (compound solubility in water was reported to be 0.61 (g/mL; precipitate was visually noted in culture medium at 150 (g/mL).  The chemical was found to be non-mutagenic in the in vivo system or all other in vitro systems. Consequently, the limited gene mutation activity in the V79 cell line is considered a nonspecific effect under non-physiological in vitro conditions and not indicative of a real mutagenic hazard. >

<	3. Reproductive and developmental toxicity.   SEQ CHAPTER \h \r 1 In a developmental study in rats, reductions in body weight gain and food consumption were observed in the dams at (100 mg/kg/day. No teratogenic effects or any other effects were seen on pregnancy or fetal parameters except for the increased incidence of enlarged thymus at 1000 mg/kg/day. The developmental NOEL was 1000 mg/kg/day.

	In the rabbit developmental study, body weight loss and reduced food consumption were observed in the dams at 50 mg/kg/day, resulting in a maternal NOEL of 50 mg/kg/day. No teratogenic effects or any other effects were seen on pregnancy or fetal parameters except for the increase in skeletal anomaly of fused sternebrae-3 and -4 at the top dose level of 500 mg/kg/day. This finding is regarded as a marginal effect on skeletal development that could have resulted from the 40-65% lower food intake during treatment at this dose level. The developmental NOEL was 250 mg/kg/day.

	In the 2-generation rat reproduction study, body weight gain and food consumption were decreased at 750 ppm (55.3 mg/kg/day), especially in females during lactation. Consequently, the reduced pup weight gain during lactation (750 ppm) and the slight delay in eye opening (1500 ppm; 110.6 mg/kg/day) were judged to be a secondary effect of maternal toxicity. No other fetal effects or any reproductive changes were noted.  The low developmental NOEL, 50 ppm (3.8 mg/kg/day) seen in this study was probably due to the lack of intermediate dose levels between 50 and 750 ppm. The reproductive NOAEL was 1500 ppm (110.6 mg/kg/day). >

<	4. Subchronic toxicity.   SEQ CHAPTER \h \r 1 In a subchronic study in rats a NOAEL of 500 ppm (30.6-32.8 mg/kg/day) was found based on decreased body weights (males), hypertrophy of hepatocytes (males), and pancreatic atrophy observed at the LOAEL of 2000 ppm (127-133 mg/kg/day).

In mice, a NOAEL was determined at 500 ppm (76.9-110 mg/kg/day) based on increased liver weights and necrosis of hepatocytes observed at the LOAEL of 2000 ppm (315-425 mg/kg/day).

A subchronic feeding study in dogs resulted in a NOAEL of 30 mg/kg/day. Increased liver weight and hepatocyte hypertrophy in males were observed at the LOAEL of 150 mg/kg/day.

In a 28–day dermal toxicity study in rats the NOAEL was found at 100 mg/kg/day. Increased liver and kidney weight were observed at the LOAEL of 1000 mg/kg/day. >

<	5. Chronic toxicity. A chronic feeding study in dogs established a NOAEL of 5 mg/kg/day. The LOAEL for this study was found at 50 mg/kg/day, based on clinical signs, increased liver weight and hepatocellular hypertrophy.

In a carcinogenicity study in mice liver effects were observed at doses at and above the LOAEL of 1000 ppm (131.1 mg/kg/day). The NOAEL was determined to be 300 ppm (39.4 mg/kg/day).

A chronic toxicity/carcinogenicity study in rats established a NOAEL of 250 ppm (9.81–11.37 mg/kg/day). Decreased mean body weight and decreased mean body weight gain (compared to control) were observed at the LOAEL of 750 ppm (29.7–34.5 mg/kg/day).

The compound did not cause any treatment-related increase in general tumor incidence, any elevated incidence of rare tumors, or shortened time to the development of palpable or rapidly lethal tumors in the 18-month mouse and the 24-month rat studies.  An ad hoc subcommittee of the Cancer Assessment Review Committee on May 27, 1999 determined that trifloxystrobin should be classified as a "Not Likely Human Carcinogen," based on the lack of evidence for carcinogenicity in rats and mice.  >

<	6. Animal metabolism.   SEQ CHAPTER \h \r 1 Trifloxystrobin is moderately absorbed from the gastrointestinal tract of rats and is rapidly distributed. Subsequent to a single oral dose, the elimination half life is about 2 days and excretion is primarily via bile. Trifloxystrobin is extensively metabolized by the rat into about 35 metabolites, but the primary actions are on the methyl ester (hydrolysis into an acid), the methoxyimino group (O-demethylation), and the methyl side chain (oxidation to a primary alcohol). Metabolism is dose dependent as it was almost complete at low doses but only about 60% complete at high doses.

In the goat, elimination of orally administered trifloxystrobin is primarily via the feces. The major residues were the parent compound and the acid metabolite (CGA-321113) plus its conjugates. In the hen, trifloxystrobin is found as the major compound in tissues and in the excreta, but hydroxylation of the trifluormethyl-phenyl moiety and other transformations, including methyl ester hydrolysis and demethylation of the methoxyimino group, are also seen. In conclusion, the major pathways of metabolism in the rat, goat, and hen are the same.  >

<	7. Metabolite toxicology.   SEQ CHAPTER \h \r 1 Metabolism of trifloxystrobin has been well characterized in plants, soil, and animals. In plants and soil, photolytically induced isomerization results in a few minor metabolites not seen in the rat; however, most of the applied material remained as parent compound as shown in the apple and cucumber studies. All quantitatively major plant and/or soil metabolites were also seen in the rat. The toxicity of the major acid metabolite, CGA-321113 (formed by hydrolysis of the methyl ester), has been evaluated in cultured rat hepatocytes and found to be 20-times less cytotoxic than the parent compound. Additional toxicity studies were conducted for several minor metabolites seen uniquely in plants and/or soil. The studies indicate that these metabolites, including CGA-357261, CGA-373466, and NOA-414412, are not mutagenic to bacteria and are of low acute toxicity (LD50 >2000 mg/kg). In conclusion, the metabolism and toxicity profiles support the use of an analytical enforcement method that accounts for parent trifloxystrobin. >

<	8. Endocrine disruption.   SEQ CHAPTER \h \r 1 Trifloxystrobin does not belong to a class of chemicals known for having adverse effects on the endocrine system. Developmental toxicity studies in rats and rabbits and reproduction study in rats gave no indication that trifloxystrobin might have any effects on endocrine function related to development and reproduction. The subchronic and chronic studies also showed no evidence of a long-term effect related to the endocrine system. >

<C. Aggregate Exposure>

<	1. Dietary exposure.   SEQ CHAPTER \h \r 1  Dietary risk assessments, using the DEEM-FCID software Version 3.14 with USDA’s National Health and Nutrition Examination Survey (NHANES) from 2003 to 2008 nationwide continuing surveys of food intake by individuals, were conducted to evaluate potential risks due to chronic and acute dietary exposure of the U.S. population and selected population subgroups to residues of trifloxystrobin.  These analyses cover all registered and pending uses including the proposed uses on dry peas, chickpeas and lentils.

A Tier 1 dietary assessment was evaluated based on established tolerances for all registered uses and 100% crop treated.  For the proposed use on dry peas, chickpeas and lentils, the proposed tolerance of 0.06 ppm was used in this assessment.  Chickpeas and dry peas can be used as alternative feedstuff serving as a source of roughage and protein.  The proposed uses are not feed to feedlot beef.  Addition of the proposed uses on feed items will have minimal effect on total burden for dairy cattle.  The current risk assessments are based on established livestock tolerances (milk = 0.02 ppm) which are more conservative than residues estimated from Maximum Reasonably Balanced Diets (MRBD).

The EPA has established an acute Population Adjusted Dose (aPAD) of 2.5 mg/kg/day for acute dietary risk assessments based on a NOAEL of 250 mg/kg bw/day from a rabbit developmental toxicity study and an uncertainty factor or 100. The FQPA SF was reduced to 1x based on toxicological considerations by the FQPA Safety Factor Committee (HED Doc. No. 013545, B. Tarplee, 01/JUL/1999), the conservative residue assumptions used in the dietary and residential exposure risk assessments, and the completeness of the residue chemistry and environmental fate databases (DP Num: 3 17330, B. O'Keefe,1 6/AUG/2006).  For chronic dietary analyses, the EPA established a chronic Population Adjusted Dose (cPAD) of 0.038 mg/kg/day based on a NOAEL of 3.8 mg/kg bw/day from the rat reproduction toxicity study and an uncertainty factor of 100.

Results from the acute and chronic dietary exposure analyses described below demonstrate a reasonable certainty that no harm to the overall U.S. population or any population subgroup will result from the use of trifloxystrobin on currently registered uses and proposed uses on dry peas, chickpeas and lentils.

<	i. Food.    SEQ CHAPTER \h \r 1 For food, a Tier 1 acute and chronic dietary exposure assessments were performed. Acute exposure for food only, expressed at the 95th percentile of exposure, was 1.3% of the aPAD for Females 13-49 years old (only population subgroup of concern).  The chronic exposure for food only was 27% cPAD for the Total US Population and 59% cPAD for the most sensitive population, Children 1-2 years old. >

<	ii. Drinking water. Acute and chronic exposure estimates from water are included in the exposure values given above for food. These exposure estimates for water are based on EPA’s surface water estimated environmental concentrations (EECs) of trifloxystrobin and CGA-321113 for acute exposure and for chronic exposures at 48 ppb and 47 ppb respectively as given in EPA’s Human Health Risk Assessment for a Section 3 Petition Proposing Increased Tolerances for Residues in/on Field, Sweet, and Pop Corn (February 25, 2010, DP Barcode 369104). >

<	2. Non-dietary exposure. There is no potential for dermal or incidental oral exposure during or post application of trifloxystrobin when applied to dry peas, chickpeas and lentils.   As such, non-dietary exposure from this new tolerance is covered by previous non-dietary risk assessments performed by EPA.   SEQ CHAPTER \h \r 1 As published in the Federal Register (FR Vol 68, no. 175, 10-Sep-03, FR Vol 73, no. 1, 02-Jan-08), the EPA considered chronic, short term and intermediate term risk from residential uses of trifloxystrobin. The EPA determined that the risk did not exceed the Agency’s level of concern. >

<D. Cumulative Effects>

<	  SEQ CHAPTER \h \r 1 EPA has determined, as published in the Federal Register (FR Vol 73, no. 1, 02-Jan-08)), that unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, trifloxystrobin does not appear to produce a toxic metabolite produced by other substances. Therefore EPA has not assumed that trifloxystrobin has a common mechanism of toxicity with other substances. >

<E. Safety Determination>

<	1. U.S. population.   SEQ CHAPTER \h \r 1  Acute and chronic dietary risk estimates associated with exposure to trifloxystrobin in food and water are expected to be well below the Agency's level of concern.  The Tier I acute exposure analysis performed for all currently registered and proposed food uses show that exposure to trifloxystrobin utilizes 2% of the aPAD for Females 13-49 years old (only population subgroup of concern).  The Tier I chronic exposure analysis performed for all currently registered and proposed food uses show that exposure to trifloxystrobin utilizes 30% of the cPAD for the U.S. population and 62% of the cPAD for children

1-2 years old, the subpopulation at greatest exposure.  This analysis was conducted assuming 100% crop treated and tolerance level residue values for all crops.  The contribution of trifloxystrobin residues in drinking water to acute and chronic aggregate exposure was minimal.  Therefore, Bayer CropScience concludes that even when considering the potential incremental risk resulting from the proposed use on dry peas, chickpeas and lentils, there is a reasonable certainty that no harm will result from aggregate exposure to trifloxystrobin residues. >

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ᜀn drinking water and from non-dietary, non-occupational exposure, the aggregate exposure to trifloxystrobin is expected to be well below the level of concern. Bayer CropScience concludes that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to trifloxystrobin residues. >

<F. International Tolerances>

<	International and CODEX tolerances (MRLs) for trifloxystrobin are established for many crops in various countries. At this time, there are no international tolerances established for trifloxystrobin on dry pea, chickpea, or lentil.

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Printed on 100% recycled/ recyclable paper with 100% post consumer fiber and process chlorine free. Customer Service Hotline: 1 800 438 2474 1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION III 1650 Arch Street Philadelphia, Pennsylvania 19103 2029 SUBJECT: Technical Support Document for the Proposed Rule West Virginia; PM 10 Redesignation Request and Limited Maintenance Plan For the City of Weirton in Hancock County, West Virginia April 6, 2006 FROM: Linda Miller / s/ Air Quality Planning Branch TO: File THRU: Makeba Morris, Chief / s/ Air Quality Planning Branch I. BACKGROUND On May 24, 2004, the State of West Virginia submitted a request that EPA redesignate the Weirton nonattainment area ( Weirton Area) to attainment for the national ambient air quality standards ( NAAQS) for particulate matter with an aerodynamic diameter less than or equal to a nominal 10 micrometers ( PM 10), and concurrently requested approval of a limited maintenance plan ( LMP) as a revision to the West Virginia State Implementation Plan ( SIP). Nonattainment areas can be redesignated to attainment after the area has measured air quality data showing it has attained the NAAQS and when certain additional requirements are met. Section 107( d)( 3)( E) of the Act provides the criteria for redesignation. These criteria are further clarified in the " General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990"( 57 FR 13498, April 16, 1992, as supplemented 57 FR 18070, April 28, 1992) ( the General Preamble), and in a guidance memorandum from John Calcagni, Director, Air Quality Management Division, EPA Office of Air Quality Planning and Standards dated September 4, 1992, " Procedures for Processing Requests to Redesignate Areas to Attainment." The criteria for redesignation are:

( 1) A determination that the area has attained the applicable NAAQS; ( 2) Full approval of the applicable SIP for the area under section 110( k) of the Act; ( 3) The state containing the area has met all requirements applicable to the area under section 110 and part D of the Act; ( 4) A determination that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable implementation plan, applicable Federal air pollution control regulations, and other permanent and enforceable reductions; and ( 5) Full approval of a maintenance plan for the area as meeting the requirements of section 175A 2 of the Act.

The Weirton Area, consisting of Hancock County and part of Brooke County, West Virginia, was designated by EPA as a moderate PM 10 nonattainment area on December 21, 1993 ( 58 FR 67334).

On May 16, 2001 ( 66 FR 27034), EPA promulgated a final rule entitled, " Determination of Attainment of the NAAQS for PM 10 in the Weirton, West Virginia Nonattainment Area" finding that the Weirton PM 10 nonattainment had attained the NAAQS for PM 10 by its applicable December 31, 2000 attainment date.

The determination was made based on certified ambient air quality data for the years 1998 through 2000. The data, in which each quarter sampled had at least 85% of the scheduled data samples, met the quality assurance requirements to be sufficient to determine attainment. The maximum annual concentration from all the monitors in the area for the years 1998 2000 was 35.2 : g/ m ³ meeting the 50ug/ m3 standard specified by the NAAQS. The maximum 24 hour concentration was 130 : g/ m ³ , below the NAAQS standard of 150 : g/ m ³ . Both the annual and 24 hour maximum values were recorded in 1998. The determination of attainment became effective on July 2, 2001.

In order to be redesignated from nonattainment to attainment, West Virginia requested that EPA apply its Clean Data Policy to the Weirton Area in a letter dated October 14, 2003. West Virginia submitted a request to redesignate the Weirton Area to attainment for PM 10 and a SIP submittal for the related maintenance plan as a limited maintenance plan on May 24, 2004.

EPA published a direct final rule ( DFR) and notice of proposed rulemaking ( NPR) in which we determined that certain attainment demonstration requirements, along with other related requirements of the Act, are not applicable to the Weirton Area. In the same October 27, 2004 DFR and NPR, EPA also approved the request from the State of West Virginia to redesignate the Weirton Area from nonattainment to attainment of the NAAQS for PM 10, and to approve the 10 year maintenance plan for the area submitted by the WVDEP as a revision to the West Virginia SIP. ( October 27, 2004, 69 FR 62591 and 69 FR 62637 ).

EPA published a correction notice for the DFR and NPR on November 9, 2004 ( 69 FR 64860) to include additional information regarding why motor vehicle emissions do not contribute significantly to nonattainment within the Weirton Area. The correction provided clarification on PM 10 motor vehicle emissions budgets, for purposes of transportation conformity, and why they are not required to be part of the maintenance plan for the area. The ambient impact of PM 10 emissions from onroad motor vehicles was not and is not significant as it has been and continues to be less than five percent of the total PM 10 ambient concentrations in the area. Stationary ( point) source emissions are responsible for the remaining impacts.

EPA received adverse comments on the October 27, 2004 DFR/ NPR from one commenter. 3 Therefore, EPA withdrew the DFR on December 20, 2004 ( 69 FR 75847). The withdrawal of the DFR converted EPA's action to a proposal based on the October 27, 2004 NPR.

This technical support document has been prepared to support a new proposed rulemaking which will provide a concise rationale for EPA's action using the most recent data available at this time. The previous NPR ( 69 FR 62637) should be withdrawn by EPA and replaced by this rulemaking.

As noted above, the Weirton redesignation request relies on an interpretation of the CAA requirements As defined in the Clean Data Policy. The Region 3 Office of Regional Counsel provided legal interpretation in consultation with the Office of General Counsel. A discussion of EPA's clean data policy follows.

Clean Data Policy In some designated nonattainment areas, monitored data demonstrates that the NAAQS has already been achieved. Based on its interpretation of the Act, EPA has determined that certain requirements of part D, subpart 1 and 2 of the Act do not apply and therefore do not require certain submissions for an area that has attained the NAAQS. These include reasonable further progress ( RFP) requirements, attainment demonstrations and contingency measures, because these provisions have the purpose of helping achieve attainment of the NAAQS.

The so called Clean Data Policy is the subject of two EPA memoranda setting forth our interpretation of the provisions of the Act as they apply to areas that have attained the relevant NAAQS. EPA also finalized the statutory interpretation set forth in the policy in a final rule, 40 CFR 51.918, as part of its Final Rule to Implement the 8 hour Ozone National Ambient Air Quality Standard  Phase 2 ( Phase 2 Final Rule). The legal bases set forth in detail in our Phase 2 Final rule, our May 10, 1995 memorandum from John S. Seitz, entitled " Reasonable Further Progress, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard," and our December 14, 2004 memorandum from Stephen D. Page entitled " Clean Data Policy for the Fine Particle National Ambient Air Quality Standards," are equally pertinent to the interpretation of provisions of subparts 1 and 4 applicable to PM 10. EPA's interpretation of how the provisions of the Act apply to areas with " clean data" is not logically limited to ozone and PM 2.5, because the rationale is not dependent upon the type of pollutant. Our interpretation that an area that is attaining the standard is relieved of obligations to demonstrate reasonable further progress ( RFP) and provide an attainment demonstration and contingency measures pursuant to part D of the CAA, pertains whether the standard is PM 10, ozone or PM 2.5.

The reasons for relieving an area that has attained the relevant standard of certain part D, subpart 1 and 2 ( sections 171 and 172) obligations, applies equally as well to part D, subpart 4, which contains specific attainment demonstration and RFP provisions for PM 10 nonattainment areas. As we have explained in the Phase 2 Final Rule and our ozone and PM 2.5 clean data memoranda, EPA believes it is reasonable to interpret provisions regarding RFP and attainment 4 demonstrations, along with related requirements, so as not to require SIP submissions if an area subject to those requirements is already attaining the NAAQS ( i. e., attainment of the NAAQS is demonstrated with three consecutive years of complete, quality assured air quality monitoring data). Three U. S. Circuit Courts of Appeals have upheld EPA rulemakings applying its interpretation of subparts 1 and 2 with respect to ozone. Sierra Club v. EPA, 99F. 3d 1551 ( 10th Cir. 1996); Sierra Club v. EPA, 375 F. 3d 537 ( 7th Cir. 2004); Our Children's Earth Foundation v. EPA, N. 04 73032 ( 9th Cir. June 28, 2005) ( memorandum opinion). It has been EPA's longstanding interpretation that the general provisions of part D, subpart 1 of the Act ( sections 171 and 172) do not to require the submission of SIP revisions concerning RFP for areas already attaining the ozone NAAQS. In the General Preamble, we stated:

[ R] equirements for RFP will not apply in evaluating a request for redesignation to attainment, since, at a minimum, the air quality data for the area must show that the area has already attained. A showing that the State will make RFP toward attainment will, therefore, have no meaning at that point. 57 FR at 13564.

EPA believes the same reasoning applies to the PM 10 provisions of part D, subpart 4.

With respect to RFP, section 171( 1) states that, for purposes of part D of title I, RFP " means such annual incremental reductions in emissions of the relevant air pollutant as are required by this part or may reasonably be required by the Administrator for the purpose of ensuring attainment of the applicable NAAQS by the applicable date. Thus, whether dealing with the general RFP requirement of section 172( c)( 2), the ozone specific RFP requirements of Sections 182( b) and ( c), or the specific RFP requirements for PM 10 areas of part D, subpart 4, section 189( c)( 1), the stated purpose of RFP is to ensure attainment by the applicable attainment date. Section 189( c)( 1) states that:

Plan revisions demonstrating attainment submitted to the Administrator for approval under this subpart shall contain quantitative milestones which are to be achieved every 3 years until the area is redesignated attainment and which demonstrate reasonable further progress, as defined in section 7501( l) of this title, toward attainment by the applicable date.

Although this section states that revisions shall contain milestones which are to be achieved until the area is redesignated to attainment, such milestones are designed to show reasonable further progress " toward attainment by the applicable date", as defined by section 171. Thus it is clear that once the area has attained the standard, no further milestones are necessary or meaningful. This interpretation is supported by language in section 189( c)( 3), which mandates that a state that fails to achieve a milestone must submit a plan that assures that the state achieve the next milestone or attain the NAAQS if there is no next milestone. Section 189( c)( 3) assumes that the requirement to submit and achieve milestones does not continue after attainment of the NAAQS.

If an area has in fact attained the standard, the stated purpose of the RFP requirement will have 5 already been fulfilled. EPA took this position with respect to the general RFP requirement of section 172( c)( 2) in the April 16, 1992 General Preamble and also in the May 10, 1995 memorandum with respect to the requirement of section 182( c)( b) and ( c). We are extending that interpretation to the specific provisions of part D, subpart 4. In the General Preamble, we stated, in the context of a discussion of the requirements applicable to the evaluation of requests to redesignate nonattainment areas to attainment, that the " requirements for RFP will not apply in evaluating a request for redesignation to attainment since, at a minimum, the air quality data for the area must show that the area has already attained. Showing that the State will make RFP towards attainment will, therefore, have no meaning at that point." ( 57 FR at 13564). See also " Procedures for Processing Requests to Redesignate Areas to Attainment" memorandum from John Calcagni, Director, Air Quality Management Division, September 7, 1992 at 6.

With respect to the attainment demonstration requirements of section 189( a)( 1)( B) an analogous rationale leads to the same result. Section 189( a)( 1)( B) requires that the plan provide for " a demonstration ( including air quality modeling) that the [ SIP] will provide for attainment by the applicable attainment date. . . ." As with the RFP requirements, if an area is already monitoring attainment of the standard, EPA believes there is no need for an area to make a further submission containing additional measures to achieve attainment. This is also consistent with the interpretation of the section 172( c) requirements provided by EPA in the General Preamble, the December 14, 2004 memorandum and of the section 182( b) and ( c) requirements set forth in the May 10, 1995 memorandum. As EPA stated in the General Preamble, no other measures to provide for attainment would be needed by areas seeking redesignation to attainment since " attainment will have been reached." ( 57 FR at 13564).

Other SIP submission requirements are linked with these attainment demonstration and RFP requirements, and similar reasoning applies to them. These requirements include the contingency measure requirements of section 172( c)( 9) and 182( c)( 9). We have interpreted the contingency measure requirements of section 172( c)( 9) and 182( c)( 9) as no longer applying when an area has attained the standard because those " contingency measures are directed at ensuring RFP and attainment by the applicable date." ( 57 FR at 13564); May 10, 1995 memorandum at 5 6.

Both sections 172( c) and 189( a)( 1)( c) require " provisions to assure that reasonable available control measures" ( i. e, RACM) are implemented in a nonattainment area. However, the Weirton Area was able to attain the PM 10 NAAQS without any additional measures being implemented. The General Preamble, 57 FR 13560 ( April 16, 1992) states that EPA interprets section 172( c)( 1) so that RACM requirements are a " component" of an area's attainment demonstration. Thus, for the same reason the attainment demonstration no longer applies by its own terms, the requirement for RACM no longer applies. EPA has consistently interpreted this provision to require only implementation of potential RACM measures that could contribute to reasonable further progress or to attainment. General Preamble, 57 FR 13498. Thus, where an area is already attaining the standard, no additional RACM measures are required. EPA is interpreting section 187( 1)( c) consistent with its interpretation of section 172( c)( 1). Therefore, there is no requirement for the West Virginia SIP to contain RACM for the Weirton Area in order for EPA to redesignate that 6 area as attainment for the PM 10 NAAQS.

The suspension of a requirement to submit SIP revisions concerning these RFP, attainment demonstration, RACM, and other related requirements exists only for as long as a nonattainment area continues to monitor attainment of the standard. If such an area experiences a violation of the NAAQS, the basis for the requirements being suspended would no longer exist. Therefore, the area would again be subject to a requirement to submit the pertinent SIP revision or revisions and would need to address those requirements. Thus, a determination that an area need not submit one of the SIP submittals amounts to no more than a suspension of the requirement for so long as the area continues to attain the standard. However, once EPA ultimately redesignates the area to attainment, the area will be entirely relieved of these requirements to the extent the maintenance plan for the area does not rely on them.

As established in our prior " clean data" memoranda and rulemakings, a PM 10 nonattainment area that has " clean data," should be relieved of the part D, subpart 4 obligations to provide an attainment demonstration pursuant to section 189( a)( 1)( B) the RACM provisions of 189( a)( 1)( c), and the RFP provisions established by section 189( c)( 1) of the Act, as well as the aforementioned attainment demonstration, RACM, RFP and contingency measure provisions of part D, subpart 1 contained in section 172 of the Act.

II. TECHNICAL REVIEW OF THE REQUEST FOR REDESIGNATION The Air Quality Analysis Branch, of the Air Protection Division, Region III provided technical assistance in the review of the May 24, 2004 submittal. A discussion of the analysis of the redesignation request, based on the criteria for redesignation discussed in the background section of this TSD, is discussed below.

1. A determination that the area has attained the applicable NAAQS The primary years used by EPA for the purposes of establishing PM 10 designations and classifications were 1987 to 1989. For this base year period, the Weirton Area 24 hour average PM 10 design value was 198 : g/ m ³ . This value exceeded the NAAQS of 150 : g/ m3. The Weirton Area has never exceeded the annual average standard of 50 : g/ m3. Data provided in the SIP submittal shows that for the 2000 to 2002 period, the comparable 24 hour average design value is 112 : g/ m ³ and the PM 10 annual average design value is 32 : g/ m ³ . Both values meet the NAAQS. The State of West Virginia certified the ambient air quality data ( 2005 PM 10 SLAMS data) for the monitors in Brooke and Hancock Counties in a letter dated February 16, 2006. Based on quality assured data through the end of 2005, no exceedances of the 24 hour PM 10 standard or the annual PM 10 standard have been recorded since 1998.

There are four monitoring sites ( with one co located monitor) within the Weirton nonattainment area. The results of the monitoring, obtained from the EPA's Aerometric Information Retrieval System, since 1995 are summarized in the table on the following two pages. 7 PM 10 Concentrations 1995 through 2005 Weirton, West Virginia Summit Circle Site ( 540290009)

Year 1st Max. (: g/ m ³ ) 2nd Max. (: g/ m ³ ) 3rd Max. (: g/ m ³ ) 4th Max. (: g/ m ³ ) Yearly Estimated Exceedances 3 yr. avg. Estimated Exceedances Annual Average (: g/ m ³ )

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 225 218 132 129 98 84 112 104 112 113 100 160 169 112 118 93 82 103 104 110 108 99 150 146 101 108 92 77 100 96 108 95 95 127 140 98 106 83 77 97 94 106 95 91 2.2 2.2 0 0 0 0 0 0 0 0 0 2.2 2.2 1.5 0.7 0 0 0 0 0 0 0 35 36 32 35 29 29 32 31 30 28 25 Marland Heights Site ( 540290011)

Year 1st Max. (: g/ m ³ ) 2nd Max. (: g/ m ³ ) 3rd Max. (: g/ m ³ ) 4th Max. (: g/ m ³ ) Yearly Estimated Exceedances 3 yr. avg. Estimated Exceedances Annual Average (: g/ m ³ )

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 142 80 116 101 131 83 82 88 111 135 96 134 79 79 91 97 71 80 82 109 133 84 133 78 78 83 95 70 75 78 94 91 75 119 78 75 81 86 69 75 77 93 91 73 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 32 27 24 28 27 26 29 28 28 29 25 8 Skyview Site ( 540290014)

Year 1st Max. (: g/ m ³ ) 2nd Max. (: g/ m ³ ) 3rd Max. (: g/ m ³ ) 4th Max. (: g/ m ³ ) Yearly Estimated Exceedances 3 yr. avg. Estimated Exceedances Annual Average (: g/ m ³ )

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 120 167 144 112 83 97 77 94 94 108 147 107 93 82 95 76 84 92 104 132 100 89 72 80 74 84 91 101 129 95 88 70 76 70 82 90 0 1 0 0 0 0 0 0 0 0 0.5 0.3 0.3 0 0 0 0 0 30 31 27 30 27 25 26 26 26 Oak Street 1 Site ( 540291004)

Year 1st Max. (: g/ m ³ ) 2nd Max. (: g/ m ³ ) 3rd Max. (: g/ m ³ ) 4th Max. (: g/ m ³ ) Yearly Estimated Exceedances 3 yr. avg. Estimated Exceedances Annual Average (: g/ m ³ )

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 187 221 110 119 102 101 87 89 121 96 69 148 129 105 110 88 77 85 89 88 90 61 136 125 102 108 85 77 68 73 63 73 58 127 107 84 94 62 72 53 72 57 68 46 1.2 1.0 0 0 0 0 0 0 0 0 0 1.2 1.1 0.7 0.3 0 0 0 0 0 0 0 40 36 32 32 31 31 30 31 32 28 25 9 Oak Street 2 Site ( 540291004 co located site)

Year 1st Max. (: g/ m ³ ) 2nd Max. (: g/ m ³ ) 3rd Max. (: g/ m ³ ) 4th Max. (: g/ m ³ ) Yearly Estimated. Exceedances 3 yr. avg. Estimated Exceedances Annual Average (: g/ m ³ )

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 164 185 101 109 107 103 109 111 106 112 88 159 141 92 108 97 81 97 101 104 103 85 128 121 87 108 94 79 86 98 92 91 73 118 141 141 113 107 107 97 101 104 86 71 2.1 1.0 0 0 0 0 0 0 0 0 0 2.1 1.6 1.0 0.3 0 0 0 0 0 0 0 40 36 30 31 27 28 31 30 27 25 20 As demonstrated above, the Weirton area continues to attain the PM 10 NAAQS.

2. Fully Approved SIP under Section 110( k) of the Act that Meets All Requirements Applicable under Section 110 and Part D West Virginia has met all SIP requirements applicable for purposes of redesignation under section 110 of the CAA and part D, Title I of the CAA. EPA has analyzed the West Virginia SIP codified at 40 CFR part 52, subpart XX, and determined that it is consistent with the applicable redesignation requirements found in section 110.

The air quality planning requirements for moderate PM 10 nonattainment areas under part D of Title I of the CAA are outlined in subparts 1 and 4. Subpart 1 of part D, found in sections 172 176 of the CAA, sets forth the basic requirements applicable to all nonattainment areas. Subpart 4 of part D, found in Section 189 of the CAA, establishes additional specific requirements for PM 10 areas depending upon the area's nonattainment classification.

The part D provisions that West Virginia must evaluate for the Weirton Area prior to redesignation to attainment include an emissions inventory, conformity, new source review ( NSR), Reasonably Available Control Measure ( RACM), reasonable further progress ( RFP), an attainment demonstration, and contingency measures. Utilization of the clean data policy, as discussed in the background section of this TSD, has been determined to be appropriate for Weirton redesignation request. Therefore, RACM, RFP, attainment demonstration and contingency measure requirements are not applicable to the Weirton area redesignation request. 10 With respect to the conformity analysis, Section 176( c) of the CAA, requires states to establish criteria and procedures to ensure the Federally supported or funded projects " conform" to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs, and projects developed, funded or approved under Title 23 U. S. C and the Federal Transit Act (" transportation conformity") as well as to other Federally supported or funded projects (" general conformity"). State conformity revisions must be consistent with Federal conformity regulations relating to consultation, enforcement and enforceability that the CAA required the EPA to promulgate.

As upheld in Wall v. EPA, 265F 3d 426 ( 6th Cir. 2001), the conformity SIP requirements have been interpreted by EPA as not applying for purposes of evaluating a redesignation request under 107( d) because state conformity rules are still required after redesignation and federal conformity rules apply where state rules have not been approved.

As for the emissions inventory requirement, the Calcagni memo notes that the requirements for an emission inventory will be satisfied by the inventory requirements of the maintenance plan. An attainment year emissions inventory ( 2001) for the Weirton Area has been included in the maintenance plan submitted with this redesignation request and determined to be approvable.

With respect to the NSR program requirement, EPA has determined that areas being redesignated need not have an approved NSR program prior to redesignation, provided that the area demonstrates maintenance of the standard without part D NSR in effect. The rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator of Air and Radiation, dated October 14, 1994, entitled " part D New Source Review Requirements of Areas Requesting Redesignation to Attainment." The State has demonstrated that the area will be able to maintain the standard without part D NSR in effect, and therefore the State need not have a fully approved part D NSR program prior to approval of the redesignation request. The State's Prevention of Significant Deterioration ( PSD) program will become effective in the area upon redesignation to attainment.

Based on the Agency's review of Weirton redesignation request and the applicable West Virginia SIP it has been determined that for the purposes of redesignation of the Weirton area the applicable provisions of CAA 110 and part D have been approved into the West Virginia SIP.

3. Air Quality Improvement Is Due to Permanent and Enforceable Reductions As a part of the redesignation request the State must be able to reasonably attribute the improvement in air quality to permanent and enforceable emission reductions. In making this showing, the State must demonstrate that air quality improvements are the result of actual enforceable emission reductions. The control measures for the area, which were responsible generating sufficient emission reduction to bringing the area into attainment, are contained in two enforceable documents; one between the West Virginia and the Weirton Steel Corporation and one between West Virginia and Wheeling Pittsburgh Steel Corporation. On December 29, 2003, Printed on 100% recycled/ recyclable paper with 100% post consumer fiber and process chlorine free. Customer Service Hotline: 1 800 438 2474 11 West Virginia submitted a sulfur dioxide ( SO 2 ) SIP revision for the City of Weirton including the Clay and Butler Magisterial District SO 2 nonattainment area in Hancock County, West Virginia. The SIP revision consisted of an enforceable operating permit for the Wheeling Pittsburgh Steel Corporation, and an individual consent order ( CO) entered into between the State of West Virginia and the Weirton Steel Corporation in Hancock County, West Virginia, establishing SO 2 emission limits for numerous emission points at both facilities. The SO 2 SIP submittal is significant because many of the operational limits to control SO 2 also limits the emissions of PM 10. The control measures and emission limits established in the CO and the operating permit were made permanent and enforceable when EPA approved them into the West Virginia SIP on May 5, 2004 ( 69 FR 24986). These control measures resulted in a reduction of 1345.5 tons per year of allowable PM 10 emissions and a reduction of 886 tons per year of actual PM 10 emissions.

Control Measure 1: Weirton Steel Consent Order The CO stipulates the following emission limitations for the Weirton Steel Corporation facility:

Weirton Steel Corporation, Weirton Facility SO 2 Emission Limits SO 2 Emissions Unit SO 2 Emission Limit Sinter Plant Shall not be operated by the Company High Pressure Boilers 1 and 2 Shall not be operated by the Company.

Low Pressure Boilers LP1, LP2, LP3, LP4, and LP15 Shall not be operated by the Company.

Coal Shall not be fired at any boiler operated by the Company.

SO 2 emissions from High Pressure Boilers 3, 4 and 5 Shall be limited by restricting the firing of fuel oil to a rate dependent upon the sulfur content of the fuel oil fired as described in Appendix A to the CO. The allowable fuel oil firing rate shall be the 3 hour block average derived from Appendix A expressed in total gallons of fuel oil fired at High Pressure Boilers 3, 4, and 5 over a 3 hour period.

The percentage of sulfur contained in the fuel oil purchased to be fired at the company's high pressure boilers Shall not exceed 3%. 12 Total fuel oil and sulfur content fired at boilers 3, 4 and 5 Shall be limited to the product of ( gpm * (% S) being less than or equal to the emission factor of 91.7 as per the curve in Appendix A of the CO.

The BOP Waste Heat Boiler Shall be pre heated using steam sparging. Fuel fired at the Waste Heat Boiler shall be limited to Natural Gas, Mixed Gas, or steel making process gas.

Foster Wheeler Boilers # 101 and # 102 Shall have a combined limit of 109.73 lbs per hour of SO 2. These boilers shall be limited to firing only blast furnace gas, natural gas, and mixed gas ( comprised of approximately 70% natural gas and 30% air.

Hot Mill Reheat Furnaces, Hydrochloric Acid Regeneration Plant combustion sources, and Annealing Furnaces Shall be limited to firing only natural gas and mixed gas ( comprised of approximately 70% natural gas and 30% air).

Blast Furnaces designated # 2 and # 3 Shall not recommence operation.

Blast Furnace # 1 Stoves Shall be limited to 60.1 lbs. per hour of SO 2 .

Blast Furnace # 1 Shall be limited to 42.1 lbs per hour of SO 2 .

Blast Furnace # 4 Stoves Shall be limited to 60.1 lbs per hour of SO 2 .

Blast Furnace # 4 Flare Shall be limited to 42.1 lbs per hour of SO 2 .

Slag Granulator Shall be limited to 50 lbs per hour of SO 2 .

Control Measure 2: Wheeling Pittsburgh Steel operating permit The essential compliance provisions of the operating permit issued by the WVDEP to Wheeling Pittsburgh Steel Corporation which directly impact the emissions of PM 10 are listed below.

1. Maximum emissions to the atmosphere from the Excess Coke Oven Gas ( COG) Flare ( Emission Point 1EF) shall not exceed the following limits:

Hourly Emissions ( lb/ hr) Maximum Hourly Emissions during the Desulfurization Outage Annual Emissions ( tpy)

39.8 396* 294.0 * Annual emissions account for the desulfurization unit being down 672 hours per year for 13 scheduled maintenance and maximum hydrogen sulfide concentration of 479 grains per 100 cu. ft. of COG.

2. .

3. Maximum SO 2 emissions to the atmosphere from boilers # 6 and # 7 ( emission point) shall not exceed the following limits:

Hourly SO 2 Rate ( lb/ hr) Boiler # 6 Boiler # 7 20.4 20.4 Hourly SO 2 Rate during Desulfurization Outage ( lb/ hr) 203.1* 203.1*

Annual SO 2 Rate* ( TPY) 150.7 150.7 * Annual Emission accounts for the desulfurization unit being down 672 hours per year for scheduled maintenance and maximum hydrogen sulfide concentration of 479 grains per 100 cu. ft. of COG.

4. Boilers # 5, 6 and 7 shall only combust COG.

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11.

12. Visible emissions from the excess COG flare shall not exceed twenty percent ( 20%) opacity except upon the first eight ( 8) minutes of starting the thermal oxidizer. After this point, visible emissions from this emission point shall not exceed forty percent ( 40%) opacity for this time period. The permittee shall demonstrate compliance with this condition by taking visual observations using EPA Method 22 once a month. If the permittee observes visible emissions from the flare using Method 22, the permittee shall conduct an additional observation within 24 hours using EPA Method 9 to determine the opacity of the visible emissions being emitted from the flare. 14 13. The Sinter Plant shall not be operated by the permittee unless the proper permit is obtained from the Director.

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18. No later than ninety ( 90) days after issuance of the permit, the permittee shall continuously maintain a system around the facility to prevent public access.

19. Compliance with the allowable emission limits of this permit shall be calculated using the appropriate amount of COG combustion by the excess COG flare on a volumetric basis, higher heat value of 568 Btu/ cu. ft. for COG, and the following factors: Carbon Monoxide ( 0.37 lb/ MM Btu), Nitrogen oxides ( 0.068 lb/ MM Btu), Particulate Matter ( 0.012 lb/ MM Btu), Particulate Matter 10 microns ( 0.012 lb/ MM Btu), Volatile Organic Compounds ( 0.14 lb/ MM Btu). The permittee shall determine the amount of each pollutant emitted on a monthly basis using the above mentioned information and appropriate engineering calculations. The permittee shall keep a 12 month rolling total for each of the above mentioned pollutants.

20. .

21. Boiler # 5 ( emission point 1D S11) shall not be operated unless the permittee obtains the proper permit from the Director prior to restarting the boiler.

22. The permittee shall fire only natural gas at coke plant boiler # 8 ( emission point 1D, S11), unless an applicable permit is obtained from the Director.

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As shown above, the control measures for the area are permanent and enforceable.

4. A fully approved maintenance plan 15 As a criteria for redesignation, the Weirton Area is required to have a fully approved maintenance plan under section 175A of the CAA. A maintenance plan should identify the level of air emissions from cars, industry and other sources which is sufficient to attain the NAAQS. The State must commit to re evaluate the maintenance plan. The plan must also show that the area will maintain clean air for at least 10 years after redesignation. Additionally, the plan must include a list of contingency measures to be implemented should the NAAQS be violated. The maintenance plan submitted with the redesignation request has been evaluated and meets the requirements for full approval. A discussion is found in the next section of this TSD.

In summary, the Weirton Area redesignation request meets the criteria for redesignation.

III. REVIEW OF THE LIMITED MAINTENANCE PLAN West Virginia submitted a maintenance plan, entitled " PM 10 Maintenance Plan for the Weirton, West Virginia Area, May 24, 2004", for approval into the SIP. The maintenance plan references use of the Limited Maintenance Plan Option.

On August 9, 2001, EPA issued guidance on streamlined maintenance plan provisions for certain moderate PM 10 nonattainment areas seeking redesignation to attainment ( Memorandum from Lydia Wegman, Director, Air Quality Standards and Strategies Division, entitled " Limited Maintenance Plan Option for Moderate PM 10 Nonattainment Areas. " This memo contains a statistical demonstrates that areas meeting certain air quality criteria will, with a high degree of probability, maintain compliance with the standard 10 years into the future. Thus, EPA has already articulated the procedure for developing a maintenance demonstration for areas that meet the air quality criteria outlined in the Wegman memo. The Wegman memo streamlines the full maintenance plan requirements and establishes the LMP option. The LMP option does not require air quality modeling estimates that attainment can be maintained, a projection of emissions into the future, or some of the standard analyses to determine conformity with the air quality standards. The Wegman memo identifies core provisions that must be included in the LMP. These provisions include an attainment year emission inventory, assurance of continued operation of an EPA approved air quality monitoring network, and contingency provisions.

To qualify for the LMP option, the area must have attained the PM 10 NAAQS, and the average annual PM 10 design value for the area, based upon the most recent 5 years of air quality data at all monitors in the area, should be at or below 40 : g/ m3, and the 24 hour design value should be at or below 98 : g/ m3. If an area cannot meet this test, it may still be able to qualify for the LMP Option if the average design value ( ADV) for the site is less than the site specific critical design values ( CDV). In addition, the area should expect only limited growth in on road motor vehicle PM 10 emissions ( including fugitive dust) and should have passed a motor vehicle regional emissions analysis test.

To demonstrate that future emissions will not exceed the level of the attainment inventory, the 16 WVDEP determined the CDV. The CDV is a statistical technique based upon the average design value and its observed variability to estimate the probability of exceeding the NAAQS in the future. When applied specifically to the Weirton Area 24 hour data for the years 2000 through 2004, the CDV is 137 : g/ m ³ . The actual 5 year average design value for the Weirton Area is 96.8 : g/ m ³ which is below the level of 98 : g/ m ³ established for the LMP option. Furthermore, the maximum site average design value of 105.2 : g/ m ³ is less than the area specific CDV of 137 : g/ m ³ . These values qualify the Weirton Area to use the LMP option.

The Weirton Area meets the applicability criteria for using a LMP for redesignation. The LMP does not require a modeling demonstration to show maintenance of the NAAQS. A projected emissions inventory is also not required. The LMP does require the following: 1. An attainment year emissions inventory 2. Assurance of continued operation of an EPA approved air quality monitoring network 3. Contingency provisions.

The May 24, 2005 Maintenance Plan SIP submittal was reviewed based on the above criteria for a fully approved maintenance plan pursuant to the Limited Maintenance Plan option.

1. Attainment year emission inventory The May 24, 2004 submittal included an inventory of allowable emissions of sources in the nonattainment area. The following inventory will be approved into the SIP as part of the LMP.

2001 Weirton PM 10 Emission Inventory Source AFS ID Enforceability Allowable Emission Limit ( lb/ hr)

Foster Wheelers 029 00018 FW# 1 R13 515 11.00 FW# 2 CO SIP C 2003 28 11.00 Weirton Steel 029 00001 HP# 1 CO SIP C 2003 28 0.00 HP# 2 CO SIP C 2003 28 0.00 HP# 3 CO SIP C 2003 28 34.51 HP# 4 CO SIP C 2003 28 34.51 Source AFS ID Enforceability Allowable Emission Limit ( lb/ hr)

17 HP# 5 CO SIP C 2003 28 38.34 LP# 15 CO SIP C 2003 28 0.00 LP# 1 CO SIP C 2003 28 0.00 LP# 2 CO SIP C 2003 28 0.00 LP# 3 CO SIP C 2003 28 0.00 LP# 4 CO SIP C 2003 28 0.00 BOP Boiler CO SIP C 2003 28 N/ A BF# 1 Reg 7 3.48 BF# 2 CO SIP C 2003 28 0.00 BF# 3 CO SIP C 2003 28 0.00 BF# 4 Reg 7 3.48 BF# 1 Stoves Reg 7 38.07 BF# 2 Stoves CO SIP C 2003 28 0.00 BF# 3 Stoves CO SIP C 2003 28 0.00 Weirton Steel ( Cont.)

BF# 4 Stoves Reg 7 38.07 BF# 1, # 2, # 3 Flares Reg 7 0.17 BF# 4 Flare Reg 7 0.17 Desulf Baghouse Reg 7 6.73 BOF Scrubber Reg 7 36.19 Hot metal transfer BH Reg 7 5.72 Sinter Plant CO SIP C 2003 28 0.00 Reheat # 1 R13 1310 60.70 Reheat # 2 R13 1317 60.70 Source AFS ID Enforceability Allowable Emission Limit ( lb/ hr)

18 HCL Plant Reg 7 3.20 Blooming Mill Scarfer Reg 7 0.00 CAS OB R13 1433 0.42 The area attained the standard with the emission represented 2001 inventory submitted as part of the plan. The requirement for a prevention of significant deterioration ( PSD) review and permitting for any future major source construction or modification will ensure the air quality is not adversely affected by emissions growth.

Because the Weirton area is nonattainment for PM 10 any major source wishing to construct or make a modification is required to obtain a NSR permit through State Regulation 45CSR19. Subsequent to redesignation of the area to attainment any major construction or modification will be required to obtain a PSD permit through State Regulation 45CSR14. The PSD review would require a modeling demonstration to ensure maintenance of the NAAQS as well as compliance with applicable PSD increments.

The primary sources of PM 10 in the Weirton area are the steel manufacturing and processing facilities located in or near the area. Over the past six years, when the area has been monitoring attainment, facility shutdowns have substantially lowered PM 10 emissions. The shutdowns were made permanent and enforceable through a Consent Order ( CO SIP C 2003 28) which was approved as part of the West Virginia SIP on May 5, 2004.

No new growth is anticipated to impact emissions in the area. There is a projected 3.69% decrease in population for the metropolitan area for the years 1990  2025, along with a 1.89% decrease in occupied households. The West Virginia Department of Transportation has provided data which estimates the average daily traffic in the area has slightly decreased since 1990. In a letter dated April 6, 1995, EPA Region 3 confirmed that the worst case impact of motor vehicles in the Weirton area is less than 5% of the total ambient concentrations.

The WVDEP will review the monitored PM 10 data annually to verify continued attainment in the area. The WVDEP will also assess compliance of local targeted facilities to ensure compliance with the State regulations and Consent Agreements. The PM 10 emission inventory for the Weirton area will be reviewed at least every three years.

2. Continued operation of air quality monitoring network The LMP includes a commitment to continue to monitor PM 10 in the Weirton Area throughout 19 the 10 year term of the maintenance plan to verify continued attainment of the NAAQS. The monitoring procedures will be determined in accordance with 40 CFR 53 and 58.

3. Contingency measures Pursuant to section 175A of the Act, 42 U. S. C. 7505A, a maintenance plan must include such contingency measures, as EPA deems necessary, to promptly correct any violation of the NAAQS which may occur after redesignation of the area to attainment. As explained in the Wegman and Calcagni memos, these contingency measures do not have to be fully adopted at the time of redesignation.

The State will rely on monitored ambient air data to determine the need to implement contingency measures. In the event of an exceedance of the PM 10 standard, the State will review the monitored data, the local meteorological data, and the compliance of certain local facilities identified in the maintenance plan. If all such facilities are in compliance with applicable SIP and permit emission limits, the State will then determine the additional control measures the state will need to impose on the area's stationary sources in order to continue to maintain the NAAQS.

In the event of three exceedances of the 24 hour PM 10 standard within a three year period, the State will notify the stationary sources in the Weirton Area that the potential exists for a NAAQS violation, and that if a violation occurs, these sources will need to implement the measures previously identified. Within six months of receiving notice from the State, the stationary sources must submit a detailed plan of action to WVDEP to implement the identified additional control measures within 18 months after the state notifies the source of an actual violation of the NAAQS. The sources' additional control measure plans will be submitted to EPA for approval and incorporation into the SIP.

Conformity Requirements The transportation conformity rule ( 40 CFR 51 and 93) and the general conformity rule ( 40 CFR 51 and 93) apply to nonattainment areas and maintenance areas covered by an approved maintenance plan. Under either conformity rule, an acceptable method of demonstrating that a federal action conforms to the applicable SIP is to demonstrate that expected emissions from the planned action are consistent with the emissions budget for the area.

While EPA's LMP policy does not exempt an area from the need to demonstrate conformity, it explains that the area may demonstrate conformity without submitting an emissions budget. Under the LMP policy, emissions budgets are treated as essentially not constraining for the length of the maintenance period because it is unreasonable to expect that the qualifying areas would experience so much growth in that period that a violation of the PM 10 NAAQS would result. For transportation conformity purposes, EPA concludes that mobile source emissions in these areas need not be capped at any level for the maintenance period, and therefore the requirement for a regional emissions analysis would be considered to be met. Similarly, Federal actions subject 20 to the general conformity rule could be considered to satisfy the " budget test" specified in section 93.158 ( a)( 5)( i)( A) for the same reasons that the budgets are essentially considered to be unlimited.

For Federal actions which are required to address the specific requirements of the general conformity rule, one set of requirements applies particularly to ensuring that emissions from the action will not cause or contribute to new violations of the NAAQS, exacerbate current violations, or delay timely attainment. One way that this requirement can be met is to demonstrate that " the total of direct and indirect emissions from the action ( or portion thereof) is determined and documented by the State agency primarily responsible for the applicable SIP to result in a level of emissions which, together with all other emissions in the nonattainment area, would not exceed the emissions budgets specified in the applicable SIP." 40 CFR 93.158( a)( 5)( i)( A).

The decision about whether to include specific allocations of allowable emissions increases to sources is one made by the State and local air quality agencies. These emissions budgets are not the same as those used in transportation conformity. Emissions budgets in transportation conformity are required to limit and restrain emissions. Emissions budgets in general conformity allow increases in emissions up to specified levels. West Virginia has chosen not to include specific emissions allocations for federal projects that would be subject to the provisions of general conformity.

While areas with maintenance plans approved under the LMP option are thus essentially not subject to the budget test, the areas remain subject to other transportation conformity requirements of 40 CFR part 93, subpart A. Thus, the metropolitan planning organization ( MPO) in the area or the State will still need to document and ensure that: ( a) transportation plans and projects provide for timely implementation of SIP transportation control measures in accordance with 40 CFR 93.113; ( b) transportation plans and projects comply with the fiscal constraint element per 40 CFR 93.108; ( c) the MPO's interagency consultation procedures meet applicable requirements of 40 CFR 93.105; ( d) conformity of transportation plans is determined no less frequently than every four years, and conformity of plan amendments and transportation projects is demonstrated in accordance with the timing requirements specified in 40 CFR 93.104; ( e) the latest planning assumptions and emissions model are used as set forth in 40 CFR 93.110 and 40 CFR 93.111; ( 6) projects do not cause or contribute to any new localized carbon monoxide or particulate matter violations, in accordance with procedures specified in 40 CFR 93.123; and, ( 7) project sponsors and/ or operators provide appropriate written commitments as specified in 40 CFR 93.125.

The " PM 10 Maintenance Plan for the Weirton, West Virginia Area, May 24, 2004" meets the requirements for a fully approved maintenance plan. The Weirton area maintenance plan will be reassessed not later than eight years after the area is redesignated to attainment, provided that the PM 10 standard continues to be in effect.

IV. CONCLUSIONS AND RECOMMENDED AGENCY ACTION 21 The West Virginia Redesignation Request and Limited Maintenance Plan for the Weirton Area fulfills the criteria for redesignation to attainment with the PM 10 NAAQS. The submitted maintenance plan meets the requirements of the Act, and the Weirton Area fulfills the criteria for redesignation to attainment for the PM 10 NAAQS based on the State's May 24, 2004 submission. The area has continued to attain the PM 10 NAAQS and therefore certain attainment demonstration requirements, along with other related requirements of Part D Title I of the CAA as set forth above, are not applicable to the area. I recommend a notice of proposed rulemaking to redesignate the Weirton PM 10 moderate nonattainment area to attainment and to approve the West Virginia SIP revision for the 10 year maintenance plan for the Weirton Area, submitted on May 24, 2004.


[Federal Register Volume 77, Number 239 (Wednesday, December 12, 2012)]
[Rules and Regulations]
[Pages 73911-73912]
[FR Doc No: 2012-29941]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Parts 117, 119 and 121

[Docket No. FAA-2009-1093]
RIN 2120-AJ58

Flightcrew Member Duty and Rest Requirements

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Availability of Initial Supplemental Regulatory Impact
Analysis.

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SUMMARY: The FAA is issuing an Initial Supplemental Regulatory Impact
Analysis of its final rule amending its existing flight, duty and rest
regulations applicable to certain certificate holders and their
flightcrew members. That document may be found in the docket listed
above. The Initial Supplemental Regulatory Impact Analysis serves to
provide more detail on the potential impacts the final rule would have
on cargo-only operations. In addition, the Initial Supplemental
Regulatory Impact Analysis provides expanded discussion of the
methodology and information sources used in the original Regulatory
Impact Analysis, corrects some reporting of results and minor
calculation errors present in that document, and presents sensitivity
analysis on key assumptions used in the analysis.

DATES: Comments are due February 11, 2013.

FOR FURTHER INFORMATION CONTACT: For technical issues: Nan
Shellabarger, Aviation Policy and Plans (APO-1), Federal Aviation
Administration, 800 Independence Avenue SW., Washington, DC 20591;
telephone<PHONE_NUMBER>; email<EMAIL_ADDRESS>For legal
issues: Rebecca MacPherson, Office of the Chief Counsel, International
Law, Legislation, and Regulations Division (AGC-200), Federal Aviation
Administration, 800 Independence Avenue SW., Washington, DC 20591;
telephone<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: On December 21, 2011, the Federal Aviation
Administration (FAA) issued a final rule that was published in the
Federal Register as Flight Crew Member Duty and Rest Requirements on
January 4, 2012. 77 FR 330. The regulations, which are limited to
passenger operations conducted under 14 CFR part 121 (part 121), become
effective on January 4, 2014. On December 21, 2011, the FAA also issued
a Regulatory Impact Analysis (original RIA) dated November 18, 2011
(FAA-2009-1093-2477). The original RIA provides the basis for the FAA's
decision to (1) promulgate the final rule establishing new flight, duty
and rest requirements for flight crews in passenger operations; and (2)
exclude flight crews in cargo-only operations from the new mandatory
requirements. While cargo-only operations are not required to meet the
new regulations, the rule permits these operators to opt in to the rule
if they so choose.
    On December 22, 2011 the Independent Pilots Association (IPA) filed
a timely petition for review. During the course of reviewing the
administrative record for the purpose of preparing the government's
brief, the FAA discovered errors in the original RIA that supports the
final rule. The errors were associated with the scope of costs related
to the implementation of the regulations for cargo-only operations.
These errors appeared to be of a sufficient amount that the FAA
concluded it was prudent to review the portion of the cost-benefit
analysis related to cargo-only operations and allow interested parties
an opportunity to comment on the corrected analysis.
    On May 17, 2012, the FAA asked the United States Court of Appeals
for the District of Columbia Circuit to suspend the litigation of the
final rule while the agency corrected the inadvertent errors it had
discovered. The court granted the FAA's motion on June 8, 2012. While
the passenger operations rule is not at issue in the court proceedings,
the FAA, in an abundance of caution, decided to have that portion of
the original RIA reevaluated as well. The FAA contracted with the John
A. Volpe National Transportation Systems Center to review the original
RIA for accuracy, correct any errors identified, and prepare a
supplemental regulatory evaluation laying out the revised analysis.
This Initial Supplemental RIA is the product of that review.
    The FAA does not believe that it is statutorily foreclosed from
issuing an RIA and considering the costs and benefits of the flight,
duty, and rest rule. Section 212 of Public Law 111-216 contains a list
of factors that Congress wanted the FAA to consider as part of this
rulemaking. There is no indication in the statutory text of this
section that this list was intended to be exhaustive. However, in its
motion to the Court of Appeals, the FAA stated that it would provide
petitioner with an opportunity to present its view that Public Law 111-
216 prohibits the FAA from conducting a cost-benefit analysis.
Accordingly, the FAA seeks comment on whether Public Law 111-216
permits the FAA to conduct a cost-benefit analysis.
    Turning to the Initial Supplemental RIA, while this Initial
Supplemental RIA largely mirrors the original RIA in both content and
organizational structure, it does not re-evaluate the policy decisions
behind the FAA's decision to issue a final rule implementing new
flight, duty and rest requirements for part 121 carriers engaged in
passenger operations. Rather, this Initial Supplemental RIA provides
expanded discussion of the methodology and information sources used in
the rulemaking analysis, corrects reporting and calculation errors
identified in the original RIA, and presents sensitivity analysis on
key assumptions used in the analysis.\1\ A new Appendix B contains the
results of those sensitivity analyses while Appendix C contains
detailed data tables, which are summarized in the body of this Initial
Supplemental RIA. The Initial Supplemental RIA results in data that
provides greater justification for the exclusion of cargo operations
from the final rule, and continues to provide justification for the
final rule on passenger operations. As a result, the FAA has determined
that no revisions to the final rule on either cargo or passenger
operations is warranted.
---------------------------------------------------------------------------

    \1\ Wherever possible, this Initial Supplemental RIA relies on
the same data used for the original RIA. In some cases, new
estimates were developed and more recent data sources were used.
---------------------------------------------------------------------------

    In the original RIA, the portion of scheduling costs related to
cargo-only operations of air carriers that conduct both passenger and
cargo-only operations (mixed operations carriers) were inadvertently
excluded from the reported costs of extending the final rule to cargo-
only operations. This Initial Supplemental RIA fixes that omission and
that revision has significantly increased the estimates of the stated
costs of extending the final rule to cargo-only operations. Due to
inclusion of impacts on cargo-only operations, a few air carriers were
reclassified for ease of explication.
    Table 1 and Table 2 summarize the differences between the original
RIA and the Initial Supplemental RIA.

              Table 1--Passenger Operations Nominal Costs and Benefits Over 12-Year Analysis Period
----------------------------------------------------------------------------------------------------------------
                                                         Original RIA      Supplemental RIA       Difference
                                                          (millions)          (millions)          (millions)
----------------------------------------------------------------------------------------------------------------
Total Benefits--Base Case...........................                $376                $401                 $25
Total Benefits--High case...........................                 716                 757                  41
Total Costs.........................................                 390                 457                  67
----------------------------------------------------------------------------------------------------------------

                   Table 2--Cargo-Only Nominal Costs and Benefits Over 12-Year Analysis Period
----------------------------------------------------------------------------------------------------------------
                                                         Original RIA      Supplemental RIA       Difference
                                                          (millions)          (millions)          (millions)
----------------------------------------------------------------------------------------------------------------
Total Benefits--Base Case..........................            ** $20.35                  $5
Total Benefits--High Case..........................             ** 32.55                  31
Total Costs........................................               306                    550                $244
----------------------------------------------------------------------------------------------------------------
** The FAA did not detail potential benefits to cargo-only operations in the original RIA. Rather, the FAA
  assumed that benefits associated with averting a single catastrophic accident involving a cargo plane would
  range between $20.35 million and $32.55 million.

Comments Invited

    The FAA invites interested persons to review the Initial
Supplemental RIA and submit written comments, data, or views. The most
helpful comments reference a specific portion of the Initial
Supplemental RIA, explain the reason for any recommended change, and
include supporting data. To ensure the docket does not contain
duplicate comments, please send only one copy of written comments, or
if filing comments electronically, please submit your comments only one
time.
    The FAA will file in the docket all comments we receive, as well as
a report summarizing each substantive public contact with FAA personnel
concerning the Initial Supplemental RIA. Before issuing the Final
Supplemental RIA, the agency will consider all comments we receive on
or before the closing date for comments. It will consider comments
filed after the comment period has closed if it is possible to do so
without incurring expense or delay. The FAA may change the Final
Supplemental RIA in light of the comments we receive.

Proprietary or Confidential Business Information

    Do not file in the docket information that you consider to be
proprietary or confidential business information. Send or deliver this
information directly to the legal contact person identified in the FOR
FURTHER INFORMATION CONTACT section of this document. You must mark the
information that you consider proprietary or confidential. If you send
the information on a disk or CD ROM, mark the outside of the disk or CD
ROM and also identify electronically within the disk or CD ROM the
specific information that is proprietary or confidential.
    Under 14 CFR 11.35(b), when the FAA is aware of proprietary
information filed with a comment, the agency does not place it in the
docket. It is held in a separate file to which the public does not have
access, and a note is placed in the docket that the agency has received
it. If the agency receives a request to examine or copy this
information, it treats it as any other request under the Freedom of
Information Act (5 U.S.C. 552). The FAA processes such a request under
the DOT procedures found in 49 CFR part 7.

Availability of Rulemaking Documents

    An electronic copy of rulemaking documents may be obtained using
the Internet by--
    1. Searching the Federal eRulemaking Portal (http://www.regulations.gov);
    2. Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies/; or
    3. Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html.
    Alternatively, a copy may be requested directly from the FAA by
sending a request to the Federal Aviation Administration, Office of
Rulemaking, ARM-1, 800 Independence Avenue SW., Washington, DC 20591,
or by calling<PHONE_NUMBER>. Make sure to identify the docket number
or notice number of this rulemaking.
    All documents the FAA considered in developing the underlying final
rule, Flight Crew Member Duty and Rest Requirements and this Initial
Supplemental RIA, including economic analyses and technical reports,
are located in the docket for this rulemaking and may be viewed on the
internet through the Federal eRulemaking Portal referenced in paragraph
(1).

    Issued on: December 6, 2012.
Rebecca MacPherson,
Assistant Chief Counsel for International Law, Legislation and
Regulations.
[FR Doc. 2012-29941 Filed 12-7-12; 4:15 pm]
BILLING CODE P


[Federal Register: August 8, 2007 (Volume 72, Number 152)]
[Notices]
[Page 44601-44603]
[DOCID:fr08au07-118]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56183; File No. SR-NYSE-2007-42]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change as Modified by Amendment No. 1
Thereto Relating to Rule 103B (``Specialist Stock Allocation'')

    August 2, 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 April 20, 2007, the New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been substantially prepared by NYSE.
NYSE filed Amendment No. 1 to the proposed rule change on July 20,

2007. The Commission is publishing this notice to solicit comments on
the proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange is filing with the Commission an amendment to Rule
103B (``Specialist Stock Allocation'') to permit specialist member
organizations to trade Exchange-Traded Funds (``ETFs'') in a specialist
capacity while at the same time registered as a specialist in
securities which are a component thereof, subject to Exchange approval
of policies and procedures demonstrably isolating information regarding
the respective issues. The text of the proposed rule change is
available on the Exchange's Web site (http://www.nyse.com), at the

principal office of the Exchange, and at the Commission's Public
Reference Room.

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

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

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

1. Purpose
    When approved by the Commission on May 7, 2001,\3\ section VIII of
Rule 103B prohibited member organizations from applying for allocation
of an ETF where such member organization was already registered as a
specialist in any component security of such ETF, and conversely that
where a member organization is already registered as a specialist in an
ETF and a security in which it is also registered as a specialist
becomes a component security of such ETF, the member organization must
withdraw one or the other of such registrations or establish a separate
member organization for the ETF. The Exchange explained the reason for
this separation:
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 44272 (May 7, 2001),
66 FR 26898 (May 15, 2001) (SR-NYSE-2001-07).

    This restriction is necessary to avoid the possibility of ``wash
sales'' in a situation where the specialist in the ETF needs to
hedge by buying or selling component stock of the ETF, and could
inadvertently be trading with a proprietary bid or offer made by a
specialist in the same member organization who is making a market in
the component security.\4\
---------------------------------------------------------------------------

    \4\ Id. at 26900.

    The rule amendment proposed a solution to the problem by providing
that member organizations could conduct the ETF activities in a
separate member organization. The Exchange states that, while concerns
regarding wash sales in the context of ETF and component security
trading remain real, the costs and expenses of maintaining two separate
member organizations, both to the member organization \5\ and to the
Exchange,\6\ are seen to strongly recommend a second resolution of this
problem.
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    \5\ Because of the requirement for two separate organizations,
firms are required to have two broker-dealer registrations, file
separate monthly financial reports, support two accounting and
compliance departments, and maintain separate management and
reporting structures.
    \6\ In 2005, the Exchange estimated that approximately 2,100
examiner hours were devoted to the examination of ETF specialists.
Such numbers would be sharply reduced if member organizations were
allowed, as proposed, to include such functions within the same
organization, as the combination of activities in one entity instead
of two would, by its nature, reduce the member organizations
examined and eliminate review of duplicative functions.
---------------------------------------------------------------------------

    Accordingly, the Exchange is proposing to permit member
organizations, subject to Exchange approval, to establish policies and
procedures to isolate \7\ the activities of such member organization in
the trading of ETFs and any component securities in which it may be
registered, thus eliminating the required redundancies and attendant
expense inherent in the current rule requirement for separate firms.
Such policies and procedures must, at a minimum, include information
barriers that prevent the flow of non-public information between a
member organization's ETF specialist on the one hand and the member
organization's specialist in an associated component security on the
other hand.
---------------------------------------------------------------------------

    \7\ See, for example, comparable provisions of NYSE Information
Memo 91-22 (June 21, 1991), the NASD/NYSE Joint Memo on Chinese Wall
Policies and Procedures for procedural structures to assure the
effective containment of trading information.
---------------------------------------------------------------------------

    The Exchange states that its Division of Member Firm Regulation has
a Chinese Wall examination program to evaluate the integrity of
information barriers to ensure confidentiality of trading information
among the various trading departments at its member firms and their
approved persons and will adapt it to the review of specialist firms
also trading ETFs along with component securities. These information
barriers are, and will continue to be, tested and reviewed on site for
breaches and weaknesses by Exchange examination staff on an annual
basis and for cause, when warranted. To determine whether the firm has
developed and implemented adequate information barriers between its
Specialist Equity and ETF Trading Operations, examiners will review,
on-site, the combined specialist firm's written policies and procedures
and physical layout for adequacy. In addition, appropriate individuals
both within the affected departments as well as other areas of the
specialist firm will be interviewed to determine whether firm policies
have been appropriately disseminated and implemented. Also, the
examiners will test member organization controls and will determine,
based upon their review, whether the firm's relevant information
barriers and related policies and procedures are adequate to preclude
the improper sharing of trading information (both equity and ETF) and
whether there have been any apparent breaches of those barriers. In
addition, the Exchange will periodically assess its surveillance and
examination procedures to determine whether they are adequate to assure
that member organizations and market participants do not engage in
manipulative or improper trading. The Exchange believes that these
measures will assure the adequate and appropriate surveillance of the
single member organization permitted by the proposed amendments.
    The isolation of trading activities acts to address the issue of
``wash sales'' in the context of ETF and component securities. The rule
does not, however, prohibit usual and customary sharing of information
regarding trades after the fact, and so allows appropriate risk and
hedging activity, treasury management and other such similar
activities.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of section 6(b)(5) of the Act \8\ because it is
designed to promote just and equitable principles of trade, 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b)(5).

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

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

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

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the 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-NYSE-2007-42 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2007-42. 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, 100 F. Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSE-2007-42 and should be
submitted on or before August 29, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
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    \9\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E7-15432 Filed 8-7-07; 8:45 am]

BILLING CODE 8010-01-P