[Federal Register Volume 78, Number 187 (Thursday, September 26, 2013)]
[Rules and Regulations]
[Pages 59223-59226]
[FR Doc No: 2013-22979]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2013-0597; Directorate Identifier 2013-CE-016-AD;
Amendment 39-17593; AD 2013-19-11]
RIN 2120-AA64

Airworthiness Directives; Diamond Aircraft Industries GmbH
Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule.

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SUMMARY: We are adopting a new airworthiness directive (AD) for Diamond
Aircraft Industries GmbH Models DA 42, DA 42 NG, and DA 42 M-NG
airplanes. This AD results from mandatory continuing airworthiness

information (MCAI) issued by an aviation authority of another country
to identify and correct an unsafe condition on an aviation product. The
MCAI describes the unsafe condition as insufficient clearance between
the rod end safety washer and the nose landing gear attachment lever
causes the rod end to bend at each gear retraction sequence. We are
issuing this AD to require actions to address the unsafe condition on
these products.

DATES: This AD is effective October 31, 2013.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in the AD as of October 31,
2013.

ADDRESSES: You may examine the AD on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2013-0597; or in person at
Document Management Facility, U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
    For service information identified in this AD, contact Diamond
Aircraft Industries GmbH, N.A. Otto-Str.5, A-2700 Wiener Neustadt,
Austria; telephone: +43 2622 26700; fax: +43 2622 26780; email:
<EMAIL_ADDRESS>Internet: http://www.diamondaircraft.com/contact/technical.php. You may review copies of the referenced service
information at the FAA, Small Airplane Directorate, 901 Locust, Kansas
City, Missouri 64106. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Mike Kiesov, Aerospace Engineer, FAA,
Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri
64106; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 to include an AD that would apply to the specified products.
That NPRM was published in the Federal Register on July 8, 2013 (78 FR
40642). That NPRM proposed to correct an unsafe condition for the
specified products. The MCAI states:

    An incident was reported where a Diamond DA 42 aeroplane
experienced an un-commanded rudder input and yaw after landing gear
retraction, followed by restricted rudder travel. This situation
caused the pilot to misinterpret this as an engine power loss. The
rudder restriction could be removed by extending the landing gear
and an uneventful landing was made.
    Subsequent investigation results showed that the rod end of the
nose landing gear (NLG) actuator, Part Number (P/N) X11-0006/2, had
broken, causing the actuator to block the nearby rudder steering
linkage. This failure was likely a result of insufficient clearance
between the rod end safety washer and the NLG attachment lever,
causing the rod end to bend at each gear retraction sequence.
    This condition, if not detected and corrected, could result in
reduced control of the aeroplane.
    Prompted by this event, Diamond Aircraft Industries (DAI) issued
Mandatory Service Bulletin (MSB) 42-099/MSB 42NG-035, including Work
Instruction (WI) WI-MSB-42-099/WI-MSB 42NG-035 (published as a
single document), providing instructions to identify and modify the
affected NLG actuators, which includes installation of a new rod end
bearing and safety washer.
    For the reasons described above, this AD requires an inspection
to identify the affected NLG actuators, P/N X11-0006/2, and, if an
affected unit is installed, modification of the actuator.
    This AD also prohibits installation of any affected P/N X11-
0006/2 NLG actuators that may be held as spares, unless they are
modified.

    The MCAI references DAI MSB 42-099 and MSB 42NG-035 (co-published
as one document), dated April 22, 2013, as the applicable service
information. DAI subsequently issued revised Mandatory Service
Bulletins MSB 42-099/1 and MSB 42NG-035/1 (co-published as one
document), dated May 3, 2013, based on a change to the applicable P/N
of the NLG actuator. This revision, MSB 42-099/1 and MSB 42NG-035/1
(co-published as one document), dated May 3, 2013, was referenced in
the NPRM (78 FR 40642, July 8, 2013). You may examine the MCAI in the
AD docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2013-0597-0002.

Comments

    We gave the public the opportunity to participate in developing
this AD. We received no comments on the NPRM (78 FR 40642, July 8,
2013) or on the determination of the cost to the public.

Conclusion

    We reviewed the relevant data and determined that air safety and
the public interest require adopting this AD as proposed. We have
determined that these minor changes:
     Are consistent with the intent that was proposed in the
NPRM (78 FR 40642, July 8, 2013) for correcting the unsafe condition;
and
     Do not add any additional burden upon the public than was
already proposed in the NPRM (78 FR 40642, July 8, 2013).

Costs of Compliance

    We estimate that this AD will affect 170 products of U.S. registry.
We also estimate that it would take about .5 work-hour per product to
comply with the basic requirements of this AD. The average labor rate
is $85 per work-hour.
    Based on these figures, we estimate the cost of the AD on U.S.
operators to be $7,225, or $42.50 per product.
    In addition, we estimate that any necessary follow-on actions would
take 2.5 work-hours and require parts costing $235, for a cost of
$447.50 per product. We have no way of determining the number of
products that may need these actions.
    According to the manufacturer, some of the costs of this AD may be
covered under warranty, thereby reducing the cost impact on affected
individuals. We do not control warranty coverage for affected
individuals. As a result, we have included all costs in our cost
estimate.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. ``Subtitle VII: Aviation
Programs,'' describes in more detail the scope of the Agency's
authority.
    We are issuing this rulemaking under the authority described in
``Subtitle VII, Part A, Subpart III, Section 44701: General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    We determined that this AD will not have federalism implications
under Executive Order 13132. This AD will not have a substantial direct
effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.
    For the reasons discussed above, I certify this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,

    (2) Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains the NPRM, the regulatory evaluation,
any comments received, and other information. The street address for
the Docket Office (telephone<PHONE_NUMBER>) is in the ADDRESSES
section. Comments will be available in the AD docket shortly after
receipt.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

Adoption of the Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new AD:

2013-19-11 Diamond Aircraft Industries GmbH: Amendment 39-17593;
Docket No. FAA-2013-0597; Directorate Identifier 2013-CE-016-AD.

(a) Effective Date

    This airworthiness directive (AD) becomes effective October 31,
2013.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Diamond Aircraft Industries GmbH Models DA
42, DA 42 NG, and DA 42 M-NG airplanes, all serial numbers,
certificated in any category.

(d) Subject

    Air Transport Association of America (ATA) Code 32: Landing
Gear.

(e) Reason

    This AD was prompted by mandatory continuing airworthiness
information (MCAI) originated by an aviation authority of another
country to identify and correct an unsafe condition on an aviation
product. The MCAI describes the unsafe condition as insufficient
clearance between the rod end safety washer and the nose landing
gear (NLG) attachment lever causes the rod end to bend at each gear
retraction sequence. We are issuing this AD to detect and correct
insufficient clearance between the rod end safety washer and the NLG
attachment lever, which may cause the NLG actuator to break and
possibly restrict rudder control, resulting in loss of control.

(f) Actions and Compliance

    Unless already done, do the following actions as specified in
paragraphs (f)(1) and (f)(2) of this AD:
    (1) Within 100 hours time-in-service after October 31, 2013 (the
effective date of this AD) or 6 calendar months after October 31,
2013 (the effective date of this AD), whichever occurs first,
inspect the NLG actuator to identify the part number (P/N) and
serial number (S/N). If a NLG actuator P/N X11-0006/2 is installed
with a S/N between 0001 and 0155 (inclusive), modify the actuator by
replacing the NLG rod end bearing and safety washer with new parts.
Follow the INSTRUCTIONS section of Diamond Aircraft Industries GmbH
Work Instructions WI-MSB 42-099 and WI-MSB 42NG-035 (co-published as
one document), Revision 1, dated May 3, 2013, as specified in the
Accomplishments/Instructions paragraph of Diamond Aircraft
Industries GmbH Mandatory Service Bulletins MSB 42-099/1 and MSB
42NG-035/1 (co-published as one document), dated May 3, 2013.
    (2) As of October 31, 2013 (the effective date of this AD), do
not install on any airplane an NLG actuator P/N X11-0006/2 with a S/
N between 0001 and 0155 (inclusive), unless the actuator has been
modified following the INSTRUCTIONS section of Diamond Aircraft
Industries GmbH Work Instructions WI-MSB 42-099 and WI-MSB 42NG-035
(co-published as one document), Revision 1, dated May 3, 2013, as
specified in the Accomplishments/Instructions paragraph of Diamond
Aircraft Industries GmbH Mandatory Service Bulletins MSB 42-099/1
and MSB 42NG-035/1 (co-published as one document), dated May 3,
2013.

(g) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
Standards Office, FAA, has the authority to approve AMOCs for this
AD, if requested using the procedures found in 14 CFR 39.19. Send
information to ATTN: Mike Kiesov, Aerospace Engineer, FAA, Small
Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri
64106; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>Before using any approved AMOC on any airplane
to which the AMOC applies, notify your appropriate principal
inspector (PI) in the FAA Flight Standards District Office (FSDO),
or lacking a PI, your local FSDO.
    (2) Airworthy Product: For any requirement in this AD to obtain
corrective actions from a manufacturer or other source, use these
actions if they are FAA-approved. Corrective actions are considered
FAA-approved if they are approved by the State of Design Authority
(or their delegated agent). You are required to assure the product
is airworthy before it is returned to service.

(h) Related Information

    Refer to MCAI European Aviation Safety Agency (EASA) AD No.:
2013-0121, dated June 4, 2013, for more information. You may examine
the MCAI in the AD docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2013-0597-0002.

(i) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Diamond Aircraft Industries GmbH Work Instruction WI-MSB 42-
099, Revision 1, dated May 3, 2013; and
    (ii) Diamond Aircraft Industries GmbH Work Instruction WI-MSB
42NG-035, Revision 1, dated May 3, 2013.

    Note 1 to paragraph (i)(2)(i) and (i)(2)(ii):  Diamond Aircraft
Industries GmbH Work Instructions WI-MSB 42-099, Revision 1, dated
May 3, 2013; and WI-MSB 42NG-035, Revision 1, dated May 3, 2013, are
co-published as one document.

    (iii) Diamond Aircraft Industries GmbH Mandatory Service
Bulletin MSB 42-099/1, dated May 3, 2013; and
    (iv) Diamond Aircraft Industries GmbH Mandatory Service Bulletin
MSB 42NG-035/1, dated May 3, 2013.

    Note 2 to paragraph (i)(2)(iii) and (i)(2)(iv):  Diamond
Aircraft Industries GmbH Mandatory Service Bulletins MSB 42-099/1,
dated May 3, 2013; and MSB 42NG-035/1, dated May 3, 2013, are co-
published as one document.

    (3) For Diamond Aircraft Industries GmbH service information
identified in this AD, contact Diamond Aircraft Industries GmbH,
N.A. Otto-Str.5, A-2700 Wiener Neustadt, Austria; telephone: +43
2622 26700; fax: +43 2622 26780; email<EMAIL_ADDRESS>
Internet: http://www.diamondaircraft.com/contact/technical.php.
    (4) You may view this service information at the FAA, Small
Airplane Directorate, 901 Locust, Kansas City, Missouri 64106. For
information on the availability of this material at the FAA, call
(816) 329-4148.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Kansas City, Missouri, on September 16, 2013.
Pat Mullen,
Acting Manager, Small Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2013-22979 Filed 9-25-13; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: March 29, 2010 (Volume 75, Number 59)]
[Notices]
[Page 15475-15476]
[DOCID:fr29mr10-104]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61752; File No. 4-594]

Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of
Filing of Proposed Minor Rule Violation Plan

March 22, 2010.
    Pursuant to Section 19(d)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19d-1(c)(2) thereunder,\2\ notice is hereby
given that on March 19, 2010, EDGX Exchange, Inc. (``EDGX Exchange'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') copies of proposed minor rule violations with
sanctions not exceeding $2,500 which would not be subject to the
provisions of Rule 19d-1(c)(1) of the Act \3\ requiring that a self-
regulatory organization promptly file notice with the Commission of any
final disciplinary action taken with respect to any person or
organization.\4\ In accordance with paragraph (c)(2) of Rule 19d-1 of
the Act, the Exchange proposed to designate certain specified rule
violations as minor rule violations, and requests that it be relieved
of the reporting requirements regarding such violations, provided it
gives notice of such violations to the Commission on a quarterly basis.
EDGX Exchange proposes to include in its proposed MRVP the policies and
procedures currently included in EDGX Exchange Rule 8.15 (``Imposition
of Fines for Minor Violation(s) of Rules'').\5\
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    \1\ 15 U.S.C. 78s(d)(1).
    \2\ 17 CFR 240.19d-1(c)(2).
    \3\ 17 CFR 240.19d-1(c)(1).
    \4\ The Commission adopted amendments to paragraph (c) of Rule
19d-1 to allow self-regulatory organizations (``SROs'') to submit
for Commission approval plans for the abbreviated reporting of minor
disciplinary infractions. See Securities Exchange Act Release No.
21013 (June 1, 1984), 49 FR 23828 (June 8, 1984). Any disciplinary
action taken by an SRO against any person for violation of a rule of
the SRO which has been designated as a minor rule violation pursuant
to such a plan filed with the Commission shall not be considered
``final'' for purposes of Section 19(d)(1) of the Act if the
sanction imposed consists of a fine not exceeding $2,500 and the
sanctioned person has not sought an adjudication, including a
hearing, or otherwise exhausted his administrative remedies.
    \5\ On March 12, 2010, the Commission approved EDGX Exchange's
application for registration as a national securities exchange,
including the rules governing EDGX Exchange. See Securities Exchange
Act Release No. 61698, 75 FR 13151 (March 18, 2010). In the approval
order, the Commission noted that EDGX Exchange Rule 8.15 provides
for the imposition of fines for minor rule violations pursuant to a
minor rule violation plan. Accordingly, the Commission noted that as
a condition to the operation of EDGX Exchange, the Exchange must
file a minor rule violation plan with the Commission.
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    According to the Exchange's proposed MRVP, under Rule 8.15, the
Exchange may impose a fine (not to exceed $2,500) on a member or an
associated person with respect to any rule listed in Rule 8.15.01. The
Exchange shall serve the person against whom a fine is imposed with a
written statement setting forth the rule or rules violated, the act or
omission constituting each such violation, the fine imposed, and the
date by which such determination becomes final or by which such
determination must be contested. If the person against whom the fine is
imposed pays the fine, such payment shall be deemed to be a waiver of
such person's right to a disciplinary proceeding and any review of the
matter under EDGX Exchange rules. Any person against whom a fine is
imposed may contest the Exchange's determination by filing with the
Exchange a written response, at which point the matter shall become a
disciplinary proceeding. Under Rule 8.15.01, violations of the
following rules would be appropriate for disposition under the minor
rule violations plan: Rule 2.5. Interpretation .04, Firm Element
Continuing Education Requirement; Rule 3.5 Advertising Practices; Rule
4.2 and Interpretations thereunder, requiring the submission of
responses to Exchange requests for trading data within specified time
period; Rule 4.2 and Interpretations thereunder, related to the
requirement to furnish Exchange-related order, market and transaction
data, as well as financial or regulatory records and information; Rule
11.15, requirement to identify short sale orders as such; Rule 11.16,
requirement to comply with locked and crossed market rules; and Rule
12.11, Interpretation .01 and Exchange Act Rule 604--Failure to
properly display limit orders.
    EDGX Exchange proposed to include the rule violations listed in
Rule 8.15.01 in its minor rule violation plan. Upon approval of the
plan, the Exchange will provide the Commission a quarterly report of
actions taken on minor rule violations under the plan. The quarterly
report will include: The Exchange's internal file number for the case,
the name of the individual and/or organization, the nature of the
violation, the specific rule provision violated, the sanction imposed,
the number of times the rule violation has occurred, and the date of
disposition.\6\
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    \6\ EDGX Exchange attached a sample form of the quarterly report
with its submission to the Commisision.
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I. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning EDGX Exchange's proposed Minor Rule Violation
Plan, including whether the proposed plan 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/other.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File No. 4-594 on the subject line.

Paper Comments

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

All submissions should refer to File No. 4-594. 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/other.shtml).

Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed Minor Rule Violation Plan that
are filed with the Commission, and all written communications relating
to the proposed Minor Rule Violation Plan between the Commission and
any person, other than those that may be withheld from the public in
accordance with the provisions of 5 U.S.C. 552, will be available for
Web site viewing and printing in the Commission's Public Reference
Room, 100 F Street, NE., Washington, DC 20549. 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 No. 4-594 and should be submitted on or before
April 28, 2010.

II. Date of Effectiveness of the Proposed Minor Rule Violation Plan and
Timing for Commission Action

    Pursuant to Section 19(d)(1) of the Act and Rule 19d-1(c)(2)
thereunder,\7\ after April 28, 2010, the Commission may, by order,
declare EDGX Exchange's proposed Minor Rule Violation Plan effective if
the plan is consistent with the public interest, the protection of
investors, or otherwise in furtherance of the purposes of the Act. The
Commission in its order may restrict the categories of violations to be
designated as minor rule violations and may impose any other terms or
conditions to the proposed Minor Rule Violation Plan, File No. 4-594,
and to the period of its effectiveness which the Commission deems
necessary or appropriate in the public interest, for the protection of
investors or otherwise in furtherance of the purposes of this Act.
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    \7\ 15 U.S.C. 78s(d)(1) and 17 CFR 240.19d-1(c)(2).
    \8\ 17 CFR 200.30-3(a)(44).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-6774 Filed 3-26-10; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 28 (Friday, February 10, 2012)]
[Notices]
[Pages 7215-7216]
[FR Doc No: 2012-3093]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66326; File No. SR-BYX-2012-005]

Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Related to
Fees for Use of BATS Y-Exchange, Inc.

February 6, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on February 1, 2012, BATS Y-Exchange, Inc. (the ``Exchange'' or
``BYX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Exchange has designated the proposed rule change as one establishing or
changing a member due, fee, or other charge imposed by the Exchange
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposed rule change effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend the fee schedule applicable to
Members \5\ and non-members of the Exchange pursuant to BYX Rules
15.1(a) and (c). Changes to the fee schedule pursuant to this proposal
will be effective upon filing.
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    \5\ A Member is any registered broker or dealer that has been
admitted to membership in the Exchange.
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    The text of the proposed rule change is available at the Exchange's
Web site at http://www.batstrading.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 parts of such
statements.

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

1. Purpose
    The Exchange proposes to modify its fee schedule in order to
accommodate an additional variation of the Exchange's ``TRIM'' routing
strategy. As defined in BYX Rule 11.13(a)(3)(G), TRIM is a routing
option under which an order checks the System \6\ for available shares
and then is sent to destinations on the System routing table.
Accordingly, the Exchange's current TRIM routing strategy will check
the Exchange's order book and then route to various venues on the
Exchange's routing table, including NASDAQ OMX BX, Inc. (``NASDAQ
BX''), EDGA EXCHANGE, Inc. (``EDGA''), the New York Stock Exchange LLC
(``NYSE''), BATS Exchange, Inc. (``BZX Exchange'') and certain
alternative trading systems available through the Exchange's ``DRT''
strategy (``DRT Venues'').\7\ In order to provide an additional option
related to the TRIM routing strategy to Exchange Users,\8\ the Exchange
is introducing TRIM2, which will route to fewer venues than the full
list of TRIM routing venues.\9\ Specifically, TRIM2 will limit the
routing table to NASDAQ BX, EDGA and DRT Venues.
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    \6\ As defined in BYX Rule 1.5(aa), the System is the electronic
communications and trading facility designated by the Board through
which securities orders of Users are consolidated for ranking,
execution and, when applicable, routing away.
    \7\ As set forth in BYX Rule 11.13(a)(3)(E), DRT is a routing
option in which the entering firm instructs the System to route to
alternative trading systems included in the System routing table.
Unless otherwise specified, DRT can be combined with and function
consistent with all other routing options.
    \8\ As defined in BYX Rule 1.5(cc), a User is any Member or
Sponsored Participant who is authorized to obtain access to the
System pursuant to Rule 11.3.
    \9\ See also SR-BYX-2012-004, available at www.batstrading.com/regulation.
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    All pricing currently applicable to the TRIM routing strategy will
apply to TRIM2, with the exception of TRIM2 orders executed at NASDAQ
BX. In order to fund the development and infrastructure cost of
creating and maintaining an additional TRIM routing strategy, the
Exchange proposes to provide a lower rebate for executions pursuant to
TRIM2 than the rebate actually received for orders executed at NASDAQ
BX, which are passed on in full for executions resulting from TRIM
routing. Specifically, the Exchange proposes to provide a rebate of
$0.0010 per share for executions at NASDAQ BX that result from TRIM2
routing, rather than the full rebate of $0.0014 per share.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder that are applicable to a national securities exchange, and,
in particular, with the requirements of Section 6 of the Act.\10\
Specifically, the Exchange believes that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\11\ in that it provides for
the equitable allocation of reasonable dues, fees and other charges
among members and other persons using any facility or system which the
Exchange operates or controls. The Exchange notes that it operates in a
highly competitive market in which market participants can readily
direct order flow to competing venues if they deem fee levels at a
particular venue to be excessive. The Exchange also notes that with
respect to the changes proposed in this filing, although routing
options are available to all Users, Users are not required to use the
Exchange's routing services, but instead, the Exchange's routing
services are completely optional. Members can manage their own routing
to different venues or can utilize a myriad of other routing solutions
that are available to market participants.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f.
    \11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rebates and fees for the
TRIM2 routing option are reasonable in that they are equivalent to the
fees charged by the Exchange for the TRIM routing strategy, with the
exception of executions at NASDAQ BX, as described above. As such, the
Exchange believes that the proposed non-standard routing fees are
competitive, fair and reasonable, and non-discriminatory in that they
are generally designed to mirror the rebate or fee applicable to the
execution if such routed orders were executed directly by the Member at
each applicable venue. The Exchange believes that the slightly lower
rebate provided for TRIM2 executions at NASDAQ BX is reasonable in
order to help the Exchange cover the cost of developing and maintaining
an additional routing strategy for Users of the Exchange. The Exchange
also

believes that the proposed rebates and fees for TRIM2 are fair and
equitable and not unreasonably discriminatory in that they apply
equally to all Exchange Users.

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

    The Exchange does not believe that the proposed rule change imposes
any burden on competition.

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

    No written comments were solicited or received.

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

    Pursuant to Section 19(b)(3)(A)(ii) of the Act \12\ and Rule 19b-
4(f)(2) thereunder,\13\ the Exchange has designated this proposal as
establishing or changing a due, fee, or other charge applicable to the
Exchange's Members and non-members, which renders the proposed rule
change effective upon filing.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-BYX-2012-005 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BYX-2012-005. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro/shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing will also 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 No. SR-BYX-2012-005 and should be
submitted on or before March 2, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-3093 Filed 2-9-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 50 (Wednesday, March 14, 2012)]
[Notices]
[Pages 15153-15155]
[FR Doc No: 2012-6289]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66571; File No. SR-BATS-2012-013]

 Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing of Proposed Rule Change by BATS Exchange, Inc. to Amend BATS
Rule 2.12, Entitled ``BATS Trading, Inc. as Inbound Router''

March 12, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 8, 2012, BATS Exchange, Inc. (the ``Exchange'' or ``BATS'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to amend Rule 2.12, to make permanent the
existing pilot program that permits the Exchange to receive inbound
routes of equities orders through BATS Trading, Inc. (``BATS
Trading''), the Exchange's routing broker-dealer, from BATS Y-Exchange,
Inc. (``BYX'').
    The text of the proposed rule change is available at the Exchange's
Web site at http://www.batstrading.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 parts of such
statements.

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

1. Purpose
    Currently, BATS Trading is the approved outbound order routing
facility of BYX.\3\ The Exchange has been authorized to receive inbound
routes of equities orders by BATS Trading from BYX.\4\ The Exchange's
authority to receive inbound routes of equities orders by BATS Trading
from BYX is currently subject to a pilot period of twelve months,
ending April 15, 2012.

The Exchange hereby seeks permanent approval to permit the Exchange to
accept inbound orders that BATS Trading routes in its capacity as a
facility of BYX. This is reflected in the proposed amendment to BATS
Rule 2.12(b).
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 62716 (August 13,
2010), 75 FR 51295 (August 19, 2010) (Order Approving Application of
BATS Y-Exchange, Inc. for Registration as a National Securities
Exchange).
    \4\ See Securities Exchange Act Release Nos. 62901 (September
13, 2010), 75 FR 57097 (September 17, 2010) (SR-BATS-2010-024)
(Notice of Filing and Immediate Effectiveness of Proposed Rule
Change to Adopt BATS Rule 2.12, Entitled ``BATS Trading, Inc. as
Inbound Router'' and To Make Related Changes); 65516 (October 7,
2011), 76 FR 63977 (October 14, 2011) (SR-BATS-2011-040) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to Extend
the Pilot Period of the Inbound Router, as Described in Rule 2.12).
---------------------------------------------------------------------------

    Under the pilot, the Exchange is committed to the following
obligations and conditions:
     The Exchange shall enter into a plan pursuant to Rule 17d-
2 under the Exchange Act with a non-affiliated self-regulatory
organization (``SRO'') to relieve the Exchange of regulatory
responsibilities for BATS Trading with respect to rules that are common
rules between the Exchange and the non-affiliated SRO, and enter into a
regulatory contract (``Regulatory Contract'') with a non-affiliated SRO
to perform regulatory responsibilities for BATS Trading for unique
Exchange rules.
     The Regulatory Contract shall require the Exchange to
provide the non-affiliated SRO with information, in an easily
accessible manner, regarding all exception reports, alerts, complaints,
trading errors, cancellations, investigations, and enforcement matters
(collectively ``Exceptions'') in which BATS Trading is identified as a
participant that has potentially violated Exchange or SEC Rules, and
shall require that the non-affiliated SRO provide a report, at least
quarterly, to the Exchange quantifying all Exceptions in which BATS
Trading is identified as a participant that has potentially violated
Exchange or SEC Rules.
     The Exchange, on behalf of BATS Global Markets, Inc.,
shall establish and maintain procedures and internal controls
reasonably designed to ensure that BATS Trading does not develop or
implement changes to its system on the basis of non-public information
regarding planned changes to Exchange systems, obtained as a result of
its affiliation with the Exchange, until such information is available
generally to similarly situated member organizations of the Exchange in
connection with the provision of inbound order routing to the Exchange.
     The Exchange may furnish to BATS Trading the same
information on the same terms that the Exchange makes available in the
normal course of business to any other member organization.
    The Exchange is in compliance with the above-listed obligations and
conditions. In meeting them, the Exchange has set up mechanisms that
protect the independence of the Exchange's regulatory responsibility
with respect to BATS Trading, as well as demonstrate that BATS Trading
cannot use any information that it may have because of its affiliation
with the Exchange to its advantage. Since the Exchange has met all the
above-listed obligations and conditions, it now seeks permanent
approval of the Exchange and BATS Trading's inbound routing
relationship. Upon approval of the proposed rule change, the Exchange
will continue to comply with the obligations and conditions as set
forth in proposed BATS Rule 2.12.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with the
requirements of the Act and the rules and regulations thereunder that
are applicable to a national securities exchange, and, in particular,
with the requirements of Section 6(b) of the Act.\5\ In particular, the
proposal is consistent with Section 6(b)(5) of the Act,\6\ because it
would promote just and equitable principles of trade, remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Specifically, the proposed rule change will allow the Exchange to
continue receiving inbound routes of equities orders from BATS Trading
acting in its capacity as a facility of BYX, in a manner consistent
with prior approvals and established protections. The Exchange believes
that meeting the commitments established during the pilot program
demonstrates that the Exchange has mechanisms that protect the
independence of the Exchange's regulatory responsibility with respect
to BATS Trading, as well as demonstrates that BATS Trading cannot use
any information that it may have because of its affiliation with the
Exchange to its advantage.

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

    The Exchange does not believe that the proposed rule change imposes
any burden on competition.

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 Changes and Timing for
Commission Action

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will: (a) By order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-BATS-2012-013 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BATS-2012-013. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of 10
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 publicly available. All submissions should refer to File Number
SR-BATS-2012-013 and should be submitted on or before April 4, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-6289 Filed 3-12-12; 4:15 pm]
BILLING CODE 8011-01-P


Response: We discussed a tiered analytical approach in the preamble to the proposed rule, beginning with relatively simple lookup tables and followed by increasingly more sitespecific but more resource intensive tiers of analysis, with each tier being more refined and less conservative. We are specifying a similar approach forIn today's final rule in Appendix B to subpart DDDD. Facilities can qualify for inclusion in the delisted subcategory by using site specific emissions test data and look up tables that were developed using conservative input parameters. These look up tables are included in Appendix B to subpart DDDD. Facilities that cannot demonstrate eligibility for the low risk subcategory 341 based on the conservative screening assessment ( i. e.,

lookup tables) may used more refined site specific risk assessments as described in appendix B to subpart DDDD of 40 CFR part 63 and in other analytical tools such as the " Air Toxics Risk Assessment Reference Library," ( which may be appropriate for specific sources). A more refined analysis requires more effort, but produces results that are less uncertain and less conservative ( i. e., less likely to overestimate risk). While appendix B to subpart DDDD of 40 CFR part 63 describes a process based on this air toxics approach particular to risk assessment for 112( c)( 9), the,

we are adopting a somewhat different approach for meeting the requirements of CAA section 112( c)( 9), as discussed elsewhere in this preamble. The basis for this processapproach stems from the general air toxics assessment approach presented in the Residual Risk Report to Congress,

which was developed with full consideration of EPA risk assessment policy, guidance, and methodology.

Section 112( c)( 9) of the CAA requires us to determine whether the public and the environment are protected. Any analyses we did to establish the feasibility of the riskbased approach or to develop health  protective look up tables included consideration of human health as well as ecological criteria. The supporting information to the final rule details the assessment we conducted to determine 342 the feasibility of delisting a low risk subcategory and the look up tables we developed to be used by facilities in their demonstrations, thereby providing a public demonstration of the method employed to ensure protection of the public health and environment in decisions associated with this rule. Additionally, protection against the potential for exposures via non inhalation pathways ( e. g.,

ingestion) is also inherent in the values for persistent,

bioaccumulative HAP is also inherent in the values in the look up tables. As discussed previously, and in the supporting information for the final rule, we conducted a screening assessment of multipathway and ecological effects for the PCWP source category. We concluded that multipathway risks are considerably lower than predicted maximum inhalation risks and that it is unlikely that PCWP facilities would pose any significant risk to nearby ecosystems. Therefore, facilities are not required to conduct site specific multipathway and ecological risk assessments as part of their low risk demonstrations.

We agree that the tools needed to identify sources eligible for the delisted low risk subcategory of PCWP facilities are the same tools necessary for a CAA section 112( f) residual risk assessment. And, as stated in the Residual Risk Report to Congress, we intend to rely on the general methodology and process illustrated by the framework 343 presented in that report in our risk assessment activities throughout the air toxics program. Facilities must demonstrate eligibility for the delisted low risk subcategory using either a look up table analysis ( based on the look up tables included in appendix B to subpart DDDD of this part) or using the suggested site specific methodology described together with the criteria in appendix B to subpart DDDD of this part. The " Air Toxics Risk Assessment Guidance Library" is the sameLibrary," developed specifically for EPA's Residual Risk program, is provided as an example of one document that could be used, where appropriate, for these facility specific residual risk assessments required under CAA section 112( f). This document has been peer reviewed and was developed according to the principles, tools and methods outlined in the Residual Risk Report to Congress. However, it may not be appropriate for all sources, and for that reason sources and EPA may consider alternative analytical tools for these risk assessments.

The comment that the new cancer guidelines are still under review is correct but, as stated in the November 29,

2001 Federal Register notice ( 66 FR 59593), these 1999 draft 344 8U. S. EPA. 1999. Guidelines for Carcinogen Risk Assessment. NCEA F 0644. Risk Assessment Forum, Washington, DC guidelines are to be considered the interim guidance. 8 4. Implementation State and local resources Comment: Several commenters contended that the proposal would place a very intensive resource demand on State and local agencies ( e. g., permitting authorities) to review sources' risk assessments. State and local agencies may not have expertise in risk assessment methodology or the resources needed to verify information submitted with each risk assessment. The commenters argued that, if EPA intends to have the affected industries conduct the analysis, then EPA must consider the cost incurred by States, which may lack the necessary expertise to evaluate and review these analyses.

One commenter pointed out that the proposal only considered cost for the regulated source category, and not for regulatory agencies. According to the commenter, EPA did not consider the cost and resources associated with the following: ( 1) the public process required in reviewing and approving the proposed approaches and, if approved, making substantial changes to existing regulations; ( 2) the development of methods and guidance for human health and 345 ecological risk assessments of affected sources; ( 3) the review by already budgetarily constrained State agencies of the assessments and assurance of adequate public participation in the process; and ( 4) the collection and verification of source specific data needed for conducting risk assessments ( e. g., emissions data and stack parameters). The commenter added that the proposal did not address the critical need for qualified risk assessors to evaluate the scientific and technical basis for exempting facilities from regulation on a case by case basis. The commenter estimated that if one additional full time employee ( FTE) were required per State to review risk based exemptions, then the cost would be an additional $ 7.5 million annually.

Another commenter pointed out that the ongoing assurance that low risk facilities remain low risk would also increase the burden for the State and local agencies. The commenter also stated that diverting State and local resources to focus on presumably insignificant sources would detract from efforts associated with significant sources.

A third commenter stated that, since States generally do not have the right staff or resources to hire additional staff to review lengthy and complex risk analyses, they may refuse delegation of the PCWP rule, which would shift the burden to EPA in a time of tight budgets. According to the 346 commenter, large expenditures are not justified when only a small number of facilities may end up qualifying for an exemption.

By contrast, several commenters stated that a risk based program approaches could be structured and implemented in a manner that would not impose a substantial cost or resource burden on States. One commenter stated that assuring compliance with risk based applicability criteria would be straightforward and would not entail an added resource burden. Another commenter suggested that EPA work closely with States and industry to implement the risk based approach in a non burdensome manner. Two commenters stated that the risk based approaches, like other MACT standards,

would simply be incorporated into each State's existing title V program. Because the title V framework already exists, the addition of a risk based MACT standard would not require States to overhaul existing permitting programs.

One commenter stated that the risk based approach would not increase the number of sources regulated by each State. The commenter believed that the final MACT rule itself should set forth the applicability criteria, including the threshold levels of exposure, that sources must meet to qualify for a risk based determination. Each source would have the burden of demonstrating that its exposures are below this limit, and, therefore, the States would not be 347 required to develop their own risk assessment guidance or to conduct source specific risk assessments. One commenter stated that the risk assessment guidance to be issued by EPA within the next several months would streamline the risk based approach and further reduce any burden on the States. Three commenters supported having States charge reasonable increased fees ( as a component of annual operating permit fees or other fees) to cover any significant additional workload demands associated with reviewing more detailed tier 2/ 3 modeling.

Response: We acknowledge that review of the eligibility demonstrations for the delisted low risk subcategory will require resources for verification of information and may require expertise in risk assessment methodology that is not yet available in some States. We also acknowledge that States may choose to reject delegation of the final PCWP rule. To alleviate these concerns and to ensure consistency in the applicability determinations for the delisted lowrisk subcategory from State to State, we will review and approve/ disapprove the low risk subcategory eligibility demonstrations submitted by PCWP facilities. As mentioned previously in this preamble, we encourage facilities to submit their assessments for review early to facilitate a timely review process.

We have considered the above comments in developing the 348 criteria defining the delisted low risk subcategory of PCWP facilities, and we feel that the approach that is included in today's final PCWP rule provides clear, flexible requirements and enforceable compliance parameters. Today's final PCWP rule provides two ways that a facility may demonstrate that it is part of the delisted low risk subcategory of PCWP facilities. First, look up tables,

which are included in appendix B to subpart DDDD of this part, allow facilities to determine, using a limited number of site specific input parameters, whether emissions from their sources might cause an HI limit to be exceeded.

Finally, a site specific modeling approach can be used by those facilities that cannot demonstrate that they are part of the delisted low risk subcategory using the look up tables. With respect to guidance for performing low risk demonstrations, one possible available set of procedures for performing risk assessments is discussed in EPA's " Air Toxics Risk Assessment Guidance Reference Library," and may be used, where appropriate.

Only a portion of the 223 PCWP major sources will submit eligibility demonstrations for low risk subcategory. Of this portion of major sources, we feel that most will find themselves in the low risk subcategory based on screening analyses ( e. g., look up table). However, it is likely that some facilities will submit more detailed risk modeling 349 results. We are experienced in reviewing emission test results and site specific risk assessments and will allocate resources for completion of these tasks. We will review and approve/ disapprove low risk subcategory eligibility demonstrations based on look up table analyses and low risk demonstrations. Following review of each low risk subcategory eligibility demonstration for a facility, we will issue a letter of approval/ disapproval to the facility and will send a carbon copy to the facility's title V permitting authority to be used to develop source specific permit terms and conditions that will ensure that the source remains eligible for the low risk subcategory. The letter of notification regarding approval/ disapproval of a facility's low risk demonstration will also be sent to any other interested stakeholders. The criteria for low risk subcategory delisting are clearly spelled out in today` s final PCWP rule, along with criteria needed to ensure that facilities in the low risk subcategory remain low risk.

Because these requirements are clearly spelled out in today's final PCWP rule and because any standards or requirements created under CAA section 112 are considered applicable requirements under 40 CFR part 70, the terms and conditions demonstrating eligibility for membership in the delisted low risk subcategory would be incorporated into title V permits, pursuant to State's existing permitting 350 programs.

With respect to the burden associated with ongoing assurance that facilities remain low risk, the burden to States of assuring that facilities continue to be low risk will be no more than the burden associated with ongoing title V enforcement because the parameters that rendered a facility low risk will be reflected in terms and conditions to be incorporated into the title V permit. We have developed continuous compliance requirements for facilities that initially qualify as low risk, and the facilities will be responsible for demonstrating that they continue to be low risk if changes are made to the facilities' operations that would affect the risk that the facilities pose to human health and the environment. We will review and approve/ disapprove revised low risk demonstrations.

With respect to our consideration of the public process required in reviewing/ approving the proposed approaches and making substantial changes to existing regulations, our inclusion of a risk based compliance option in today's final PCWP rule applies only to the PCWP rule and does not directly impact other regulations. Furthermore, the PCWP proposal provided the public with the opportunity to comment on the consideration of risk in the final PCWP rule.

Regarding the assurance of adequate public participation in the process of reviewing the risk analyses, the risk 351 based compliance options are part of a rule that was subject to public comment. The supporting information to the final rule details the assessment we conducted to determine the feasibility of delisting a low risk subcategory and the look up tables we developed to be used by facilities in their demonstrations, thereby providing a public demonstration of the method employed to ensure protection of the public health and environment in decisions associated with the final rule. We will be responsible for reviewing the low risk demonstrations, but, similar to facilities requesting applicability determinations regarding promulgated standards, individual low risk demonstrations will not be subject to public review and comment. We will,

however, periodically publish updating notices in the Federal Register identifying any additional members of the low risk PCWP subcategory ( or deletions therefrom), again,

similarly to how we update notices regarding applicability determinations. These actions will represent final agency actions for purposes of judicial review under CAA section 307( b)( 1). However, the parameters that rendered a facility of the low risk subcategory will be incorporated into a title V permit and subject to the public review process through title V.

Comment: One commenter stated that if EPA intends to have the affected industries conduct the analysis, then EPA 352 must consider the additional cost incurred by smaller sources to do the analysis.

Response: As mentioned previously, there are two ways that a PCWP facility may demonstrate eligibility for the delisted low risk subcategory: ( 1) look up tables, and ( 2)

a site specific modeling approach that can be used by facilities that cannot demonstrate eligibility for the delisted low risk subcategory using the look up tables. The look up tables included in appendix B to subpart DDDD of this part allow facilities to determine, using a limited number of site specific input parameters, whether they are eligible for the low risk subcategory. Attempting to demonstrate eligibility for the delisted low risk subcategory is completely voluntary. Facilities that are not eligible for the delisted low risk subcategory based on look up tables are not required to pursue a site specific analysis ( which can be increasingly complex and expensive as it becomes more refined). Each facility must weigh the costs of making a low risk demonstration with the costs of MACT compliance. We feel that in general the costs associated with demonstrating eligibility for the low risk subcategory will be lower than the costs associated with complying with MACT for many facilities, particularly smaller facilities and other facilities that have not already otherwise installed pollution controls. The 353 majority of the cost associated with demonstrating eligibility for the delisted low risk subcategory will be emissions testing costs. Smaller facilities have fewer process units to be tested, and, because of their lower production rates relative to larger facilities, they will also likely have lower emissions. Thus, smaller PCWP facilities may be more likely than their larger counterparts to fall into the delisted low risk subcategory.

Successfully demonstrating eligibility for the low risk provisions will result in cost savings for smaller facilities because these facilities will not have to expend the costs ( e. g., the costs of installing operating, and maintaining emission controls) for MACT compliance.

The cost and economic analyses developed as part of the MACT rulemaking were based on the costs to install controls and comply with the MACT requirements. The costs associated with voluntarily conducting risk analyses were not estimated. Therefore, our estimate of costs associated with today's final PCWP rule are conservative, because the control costs are significantly higher than the costs of conducting emissions tests and risk analyses.

Title V Comment: Two commenters opposed implementing the riskbased approaches through the States' existing title V programs. One commenter stated that risk based exemptions 354 are such an implausible interpretation of the CAA that States do not even have the authority to grant them under their title V permit programs. The commenter was not aware of any approach to ensure that emissions remain below specified levels. According to the commenter, MACT standard applicability is the gate keeper for being subject to a title V operating permit. Once a source is exempt from a MACT standard, it would be exempt from the monitoring,

reporting and recordkeeping requirements needed to demonstrate compliance.

The other commenter stated that implementing the CAA section 112( d)( 4) exemption interpretation through title V would be unlawful and unworkable. The commenter stated that Congress knew how to authorize States to establish case

bycase emission standards and implement them using postrulemaking title V permits because it did so in CAA section 112( j). However, it did not do so in section 112( d)( 4).

The commenter argued that EPA lacks the authority to delegate section 112( d)( 4) to the States and may not implement any section 112( d)( 4) applicability cutoff through a post rulemaking mechanism such as a title V permit. With the exception of carefully delineated compliance monitoring,

reporting, and certification provisions in the statute,

title V permits may not create applicable requirements or exemptions from applicable requirements. The commenter 355 added that, even if this approach is legal, it is still unworkable because of the resource challenges faced by States and the widespread delays in issuing title V permits.

The commenter noted that State permit engineers and officials that prepare and issue title V permits generally are not experts in risk assessment or air dispersion modeling. According to the commenter, States and the public would be confronted with more self serving facility arguments and data than could be adequately scrutinized,

which could cause important health and risk determinations to be rubber stamped or cause the permit process to grind to a halt. The commenter added that most State title V permit programs are already behind the statute's permit issuance deadlines, and implementation of EPA's risk based approach would exacerbate this unlawful situation further.

Several commenters supported implementing the risk based approaches in the PCWP rule as proposed through the States'

existing title V programs. One commenter suggested that States which qualify and choose to do so should be delegated the authority to implement the risk based alternatives. The commenter added that this would allow States to coordinate between the MACT alternatives and State air toxics requirements.

A second commenter stated that implementing the CAA section 112( d)( 4) risk based approach though title V would 356 be lawful and workable. According to the commenter, no facility specific post rulemaking mechanisms nor expansion of the scope of title V permit process would be necessary,

just the incorporation of the NESHAP's risk based compliance option, which would contain the criteria for showing what the source would have to meet to qualify for the risk based approach. The commenter stated that the objections from other commenters to the risk based criteria were invalid,

arguing that their objections were in tension with the conclusions of a CAAAC Workgroup on State/ Local/ Tribal air toxics issues and that their comments provided no basis for concluding that States lack the legal authority to implement the risk based approach.

A third commenter noted that title V permits could provide enforceable limitations, appropriate recordkeeping requirements, and periodic review upon renewal. The commenter added that, since the PCWP rule would apply only to major sources, title V permits already are required and would not be an added burden; title V could also be used to implement applicability cutoffs. However, the workload involved with the options requiring modeling, ambient monitoring, or other means to establish background concentrations would be a hindrance to any implementation mechanism. The commenter stated that, with respect to potential risk based provisions, monitoring is more useful 357 for demonstrating non compliance than compliance because the regulation would apply to potential emissions under any weather conditions, whereas monitoring reflects current weather and emission conditions.

A fourth commenter suggested changes to the § 63.2240 of the proposed rule that would incorporate permitting procedures similar to those under 40 CFR part 70, which would allow facilities that pose little risk in their respective airsheds to apply for a risk determination to be incorporated into their title V permits. Each source applying to be permitted as a subcategorized toxic emitter with an acceptable risk determination would be required to perform detailed risk analyses for review by the public at large, local citizens, State agencies, and Federal authorities. This permitting exercise would allow managers of the airshed to develop custom fit compliance plans that address source specific risks and would allow the most flexibility for forest producers to reduce their identified risks.

Response: As discussed previously, we have determined that a CAA section 112( d)( 4) risk based exemption would not be appropriate for the PCWP source category. Instead, using our discretion in establishing subcategories of sources based on size, type, class, or other appropriate criteria under CAA sections 112( d)( 1) and ( c)( 1), we have established 358 a low risk subcategory of PCWP facilities, and delisted that subcategory under CAA section 112( c)( 9)( B). The requirements for qualifying for and remaining in the delisted low risk subcategory are clearly spelled out in appendix B to subpart DDDD of this part, and any standards or requirements created under CAA section 112 are considered applicable requirements under 40 CFR part 70. Unless a PCWP source meets these conditions, it will remain subject to the PCWP MACT rules. Therefore, the parameters used to demonstrate that facilities are part of the delisted lowrisk subcategory would be incorporated into title V permits as federally enforceable permit terms, and States would not have to overhaul existing permitting programs. We note that our rules implementing title V of the CAA specifically provide for situations such as this. For example, in its provisions governing what types of permit revisions may proceed through the abbreviated " minor permit modification"

process, our rules state that such procedures may not be used " to establish or change a permit term or condition for which there is no corresponding underlying applicable requirement and that the source has assumed to avoid an applicable requirement to which the source would otherwise be subject." 40 CFR 70.7( e)( 2)( i)( A)( 4); 40 CFR 71.7( e)( 1)( i)( A)( 4). We feel that permit terms reflecting a low risk PCWP source's eligibility clearly represent such 359 terms, and are, therefore, allowed under title V. Also,

such terms would be required to be added or revised through the more formal " significant modification" procedures of 40 CFR 70.7( e)( 4) and 40 CFR 71.7( e)( 3).

Facilities that qualify as part of the delisted low risk subcategory will initially demonstrate that they are lowrisk using either the look up tables or site specific monitoring. They will demonstrate that risk does not increase by documenting that parameters that impact the risk analysis do not change in a way that increases risk.

Facilities will not be required to perform detailed risk analyses for public review, although the public will have an opportunity to comment on draft permit terms and conditions that reflect low risk demonstrations, and to judicially challenge final EPA approvals of eligibility demonstrations under CAA section 307( b)( 1).

We acknowledge the resource challenges faced by States,

and, therefore, we will retain the authority to review and approve/ disapprove the low risk subcategory eligibility demonstrations submitted by PCWP facilities.

With regard to the title V permit programs being behind the statute's permit issuance deadlines, the incorporation of the NESHAP requirements is a necessary step that will require some resources. Inclusion of the low risk subcategory delisting should be a straightforward part of 360 the process and should not cause significant delay.

V. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review Under Executive Order 12866 ( 58 FR 51735 ( October 4,

1993)), the Agency must determine whether the regulatory action is " significant" and, therefore, subject to OMB review and the requirements of the Executive Order. The Order defines " significant regulatory action" as one that is likely to result in a rule that may:

( 1) have an annual effect on the economy of $ 100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;

( 2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

( 3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligation of recipients thereof; or ( 4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

Pursuant to the terms of Executive Order 12866, it has been determined that the final rule is a " significant regulatory action" because the annual costs of complying 361 with the final rule are expected to exceed $ 100 million. As such, this action was submitted to OMB for EO 12866 review.

Changes made in response to OMB suggestions or recommendations are documented in the public record ( see ADDRESSEES section of this preamble).

We did not estimate health and welfare benefits associated with changes in emissions of HAP, CO, VOC, PM,

NOX and SO2 for the final rule.

B. Paperwork Reduction Act The information collection requirements in the final rule have been submitted for approval to the OMB under the Paperwork Reduction Act, 44 U. S. C. 3501 et seq. ( ICR 1984.02) The information collection requirements are not enforceable until OMB approves them.

The information requirements are based on notification,

recordkeeping, and reporting requirements in the NESHAP General Provisions ( 40 CFR part 63, subpart A), which are mandatory for all operators subject to national emission standards. These recordkeeping and reporting requirements are specifically authorized by section 114 of the CAA ( 42 U. S. C. 7414). All information submitted to the EPA pursuant to the recordkeeping and reporting requirements for which a claim of confidentiality is made is safeguarded according to Agency policies set forth in 40 CFR part 2,

subpart B. 362 Today's final rule will require maintenance inspections of the control devices but will not require any notifications or reports beyond those required by the NESHAP General Provisions. The recordkeeping requirements require only the specific information needed to assure compliance.

The annual monitoring, reporting, and recordkeeping burden for this collection ( averaged over the first 3 years after the effective date of the rule) is estimated to be 4,692 labor hours per year, at a total annual cost of $ 250,528. This estimate includes notifications that facilities are subject to the rule; notifications of performance tests; notifications of compliance status,

including the results of performance tests and other initial compliance demonstrations that do not include performance tests; SSM reports; semiannual compliance reports; and recordkeeping. In addition to the requirements of 40 CFR part 63, subpart A, facilities that wish to implement emissions averaging provisions must submit an EAP.

Facilities may also submit a request for a routine control device maintenance exemption to justify the need for routine maintenance on the control device and to show how the facilities plan to minimize emissions to the greatest extent possible during the maintenance. The average number of respondents during the 3 year period after the effective date of the rule is 220, and the average number of responses 363 estimated to be submitted is 197. The resulting estimated burden per response is 24 hours. Total capital/ startup costs associated with the testing, monitoring, reporting,

and recordkeeping requirements over the 3 year period of the ICR are estimated to be $ 122,040, with operation and maintenance costs of $ 5,178.

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain,

or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting,

validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15. The OMB control 364 numbers for the information collection requirements in the final rule will be listed in an amendment to 40 CFR part 9 in a subsequent Federal Register document after OMB approves the ICR.

C. Regulatory Flexibility Analysis The EPA has determined that it is not necessary to prepare a regulatory flexibility analysis in connection with this final rule. The EPA has also determined that the final rule will not have a significant economic impact on a substantial number of small entities.

For purposes of assessing the impacts of today's final rule on small entities, small entity is defined as: ( 1) a small business ranging from 500 to 750 employees depending on the businesses NAICS code; ( 2) a small governmental jurisdiction that is a government of a city, county, town,

school district or special district with a population of less than 50,000; and ( 3) a small organization that is any not for profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impact of today's final rule on small entities, EPA has concluded that this action will not have a significant economic impact on a substantial number of small entities. We have determined that, based on SBA size definitions for the affected industries and reported sales and employment data, 17 of the 52 companies, 365 or 32 percent, owning affected facilities are small businesses. Although small businesses represent 32 percent of the companies within the source category, they are expected to incur 8 percent of the total industry compliance costs of $ 142 million. There are three small firms with compliance costs equal to or greater than 3 percent of their sales. In addition, there are seven small firms with costto sales ratios between 1 and 3 percent.

We performed an economic impact analysis to estimate the changes in product price and production quantities for the firms affected by this rule. The analysis shows that of the 32 facilities owned by affected small firms, one small firm would be expected to shut down rather than incur the cost of compliance with the rule. Although any facility closure is cause for concern, it should be noted that the baseline economic condition of the facilities predicted to close affects the closure estimate provided by the economic model.

Facilities which are already experiencing adverse economic conditions for reasons unconnected to this rule are more vulnerable to the impact of any new costs than those that are not.

The analysis indicates that the final rule should not generate a significant economic impact on a substantial number of small entities for the PCWP manufacturing source category for the following reasons. First, of the ten small 366 firms that have compliance costs greater than 1 percent of sales, three small firms have compliance costs of greater than 3 percent of sales. Second, the results of the economic impact analysis show that one facility owned by a small firm out of the 32 facilities owned by affected small firms may close due to the implementation of the final rule.

The facility that may close rather than incur the cost of compliance appears to have low profitability levels currently. It also should be noted that the estimate of compliance costs for this facility is likely to be an overestimate due to the lack of facility specific data available to assign a precise control cost in this case.

Although the final rule will not have a significant economic impact on a substantial number of small entities,

EPA nonetheless has tried to reduce the impact of the rule on small entities. First, we considered subcategorization based on production and throughput level to determine whether smaller process units would have a different MACT floor than larger process units. Our data show that subcategorization based on size would not result in a less stringent level of control for the smaller process units.

Second, we chose to set the control requirements at the MACT floor control level and not at a control level more stringent. Thus, the control level specified in the final PCWP rule is the least stringent allowed by the CAA. Third, 367 the final rule contains multiple compliance options to provide facilities with the flexibility to comply in the least costly manner while maintaining a workable and enforceable rule. The compliance options include emissions averaging and PBCO which allow inherently low emitting process units to comply without installing add on control devices and facilities to use innovative technology and P2 methods. Fourth, the final rule includes multiple test method options for measuring methanol, formaldehyde, and total HAP. Fifth, the final rule allows PCWP facilities to demonstrate eligibility for the delisted low risk subcategory and thereby avoid MACT altogether. In addition,

we worked with various trade associations during the development of the final rule.

As discussed in earlier sections of this preamble, we present the impacts of the rule associated with allowing PCWP facilities to demonstrate eligibility for the delisted low risk subcategory and thereby avoid MACT altogether. The number of small businesses impacted is reduced to seven from the original 17, and the total number of businesses impacted is reduced to 42, down from the original 52. Small businesses represent 17 percent of the companies within the source category, which is down from the 32 percent estimate for the final rule. These small businesses are expected to incur 4 percent of the total industry compliance costs of 368 $ 75 million ( the costs considering inclusion of the delisted low risk subcategory). There are no small firms with compliance costs equal to or greater than 3 percent of their sales as compared to three for the final rule. In addition,

there are four small firms with cost to sales ratios between 1 and 3 percent, which is down from seven for the final rule.

D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 ( UMRA), Public Law 104 4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost benefit analysis, for proposed and final rules with " Federal mandates" that may result in expenditures by State,

local, and Tribal governments, in aggregate, or by the private sector, of $ 100 million or more in any 1 year.

Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with 369 applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments,

including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing,

educating, and advising small governments on compliance with the regulatory requirements.

Since the final rule is estimated to impose costs to the private sector in excess of $ 100 million per year, it is considered a significant regulatory action. Therefore, we have prepared the following statement with respect to sections 202 through 205 of the UMRA. 370 1. Statutory Authority This final rule establishes control requirements for existing and new PCWP sources pursuant to section 112 of the CAA. The CAA requires NESHAP to reflect the maximum degree of reduction in emissions of HAP that is achievable. This is commonly referred to as MACT. Section 112( d)( 3) of the CAA further defines a minimum level of control that can be considered for MACT standards, commonly referred to as the MACT floor, which for new sources is the level of control achieved by the best controlled similar source, and for existing sources is the level of control achieved by the average of the best performing 12 percent of sources in the category ( or the best performing five sources for categories with fewer than 30 sources).

Control technologies and their performance are discussed in the background information document for this proposal ( Docket numbers A 98 44 and OAR 2003 0048). We considered emission reductions, costs, environmental impacts, and energy impacts in selecting the MACT standards. The final