                                 Enclosure 5.
                            Copy of Legal Authority

                            Copy of Applicable Law

48-1-30. Promulgation of regulations; approval of alternatives.

The South Carolina Department of Health and Environmental Control ("Department") shall promulgate regulations to implement this chapter to govern the procedure of the Department with respect to meetings, hearings, filing of reports, the issuance of permits and all other matters relating to procedure. The regulations for preventing contamination of the air may not specify any particular method to be used to reduce undesirable levels, nor the type, design, or method of installation or type of construction of any manufacturing processes or other kinds of equipment. Except where the Department determines that it is not feasible to prescribe or enforce an emission standard or standard of performance, it may, by regulation, specify equipment, operational practice, or emission control method, or combination thereof. The Department may grant approval for alternate equipment, operational practice, or emission control method, or combination thereof, where the owner or operator of a source can demonstrate to the Department that such alternative is substantially equivalent to that specified.


POST-PROPOSAL CONTACTS WITH EXTERNAL PARTIES

Meeting/Call	Date	Topics	Attendees

National Association of Clean Air Agencies Phone Call	9/12/2007	Overview
of the proposal.

Preliminary discussion on several topics, including duration of Green
Group, Green Groups as a minimum requirement, effect of new/expired
requirements, enforceability of AOSs, advance approval of minor NSR
requirements, and comparison of Clean Units to Green Groups.

(See Attachment 1 for slides.)	NACAA: Mary Stewart Douglas, John Paul,
Bill O'Sullivan, Ursula Kramer, Other participating members

EPA: Bill Harnett, Mike Trutna, David Beck, Barrett Parker

Clean Air Act Advisory Committee (CAAAC) Phone Call	9/24/2007	Overview
of the proposal.

Preliminary discussion.

(See Attachment 2 for summary.)	 See Attachment 2

John Walke-NRDC Phone Call	9/27/2007	Overview of the proposal.

Preliminary discussions on several topics, including comparison of Clean
Units to Green Groups, advance approval of minor NSR requirements, need
for contemporaneous review, context of ongoing part 70 litigation,
value/need for FAPs, and appropriate use of resources.

(See Attachment 1 for slides used for this call.)	NRDC: John Walke

EPA: Mike Trutna

Shannon Broome Phone Call	10/4/2007	Preliminary discussions on
grandfathering of pilot approaches, scope of AOSs, and general
requirements of Green Groups.	Shannon Broome

EPA: Mike Trutna

Calls with Tribal Representatives	10/10/2007	Overview of the proposal.

(See Attachment 3 for summary.)	See Attachment 3

 	12/5/2007	 Reactions that EPA has received thus far from states and
industry regarding the proposal for Green Groups.	Tribes: Sam Kitto and
others

EPA:  Angel McCormick, Larry Wallace, Laura McKelvey, and others

EPA Contractor:  Nanishka Albaladejo, EC/R

Alliance of Automobile Manufacturers Phone Call	10/11/2007	Overview of
the proposal.

Preliminary discussion.

(See Attachment 4 for summary.)	See Attachment 4

National Environmental Development Association Clean Air Project Phone
Call	10/11/2007	Overview of the proposal.

Preliminary discussion.

(See Attachment 5 for summary.)	NEDA/CAP: Leslie Ritts and other
participating members

EPA: Mike Trutna

John Walke-Natural Resources Defense Council Phone Call	10/18/2007
Overview of the proposal.

Preliminary discussions on several topics, including expense of FAPs
(based on pilot experience), impacts to the current minor NSR programs,
Green Group legal issues, Green FAPs as a minimum requirement, and
possible extension of public comment period.	NRDC: John Walke

EPA: Mike Trutna, Rob Brenner, Steve Page, Teri Porterfield

American Chemistry Council Meeting	11/14/2007	Brief overview of the
proposal.

Some feedback received regarding the need for AOSs.	See Attachment 6

CAAAC Workgroup Meeting in RTP	11/15/2007	 Discussion of proposal.

(See Attachment 7 for summary.)	 See Attachment 7

Petroleum Refiners Phone Call	11/16/2007	Overview of the proposal and a
discussion of the utility of the proposed Green Group concept for
typical petroleum refining operations.	Refining Industry:  Shannon
Broome and other representatives

EPA : David Beck, Barrett Parker

Clean Air Forum Phone Call	12/3/2007	Brief overview of the proposal.
Clean Air Forum: Tim Hunt and other participating members

 EPA: Mike Trutna

Performance Track Internet Briefing	12/12/2007	Complete presentation of
proposal.

Question raised regarding the relative content of NSR permits versus
Title V permits with respect to ARMs.

(See Attachment 8 for slides.)	See Attachment 8

Regional Air Pollution Control Agency Phone Call	12/18/2007	Brief
follow-up on 11/15/2007 CAAAC Workgroup meeting.	RAPCA : John Paul

EPA: Mike Trutna

Hunton and Williams (representing Utility Air Regulatory Group) Phone
Call 	12/19/2007	Potential availability of Green Groups to new units.
H&W : Maida Lerner, Andrea Barefield

EPA: Mike Trutna

Robin Clark-Little Traverse Bay Band of Odawa Indians Phone Call
1/9/2008	Duration of pilot projects.

Ability to transition into a Green Group approach from a traditional NSR
approach.	Little Traverse Bay Band of Odawa Indians: Robin Clark

EPA: Mike Trutna

Indiana Department of Environmental Management Phone Call	1/24/2008
Potential benefits associated with the FAP rulemaking.	IDEM: Dan Murray

EPA: Mike Trutna, Dave Beck

CAAAC Permitting Subcommittee Meeting	1/30/2008	Possible alternative GG
approaches.

(See Attachment 9 for summary.)	See Attachment 9

CAAAC Permitting Subcommittee Meeting-Side Bar	1/30/2008	Administrative
advantages of FAPs with expansive emissions units.	3M: Jeff Muffat

EPA: Mike Trutna

CAAAC Permitting Subcommittee Meeting-Side Bar	1/30/2008	Further
elaboration on their concerns regarding Green Group proposal.	NRDC:
John Walke

NACAA: Mary Stewart Douglas

EPA: Mike Trutna

John Walke-NRDC Phone Call	12/18/2008	General discussion of timing and
potential concerns related to the final rulemaking	NRDC:  John Walke

EPA: Anna Wood

FLEXIBLE AIR PERMITS

RULEMAKING PROPOSAL

OUTREACH BRIEFING FOR NACAA

September 12, 2007

Purpose of Briefing

Provide some background information on the Flexible Air Permits (FAP)
rulemaking proposal

Briefly summarize clarifications and proposed revisions to parts 70/71
and parts 51/52

What Is A Flexible Air

Permit?

Title V operating permit issued that enables a source to make several
types of changes without requiring additional review or approval by the
Permitting Authority

FAPs use one or more flexible air permitting approach:

Advance Approvals for Minor NSR

Alternative Operating Scenarios (AOSs)

Approved Replicable Methodologies (ARMs)

Green Groups for Major NSR

Non-Applicability Limitations (e.g., PALs)

In FAPs, the Permitting Authority:

Identifies all relevant Applicable Requirements (ARs)

Drafts permit terms that assure compliance with these ARs

All authorized changes must be:

Within any approved emissions limit (e.g., plantwide caps)

Compatible with the relevant approved emissions reduction and monitoring
provisions of the permit

Consistent with any other permit limits needed to assure compliance with
a particular AR or to ensure one does not apply (e.g., no use of HAP
materials)

Background for Proposal

Over last 12 years, EPA and  States worked in partnership to develop a
limited number of flexible air permits under current rules

Draft White Paper Number 3 (WPN3) August 2000 – proposed guidance to
allow certain kinds of flexible permit approaches

(	Detailed evaluation found pilots to be enforceable and to have
substantial benefits

(	Achieved equal or greater environmental protection through enforceable
permit terms (e.g., additional emissions reductions between 30 – 85%
over term of permit)

(	Provided greater certainty and operational flexibility relied upon by
pilot companies

(	Substantially lower administrative costs incurred after permit
issuance for both permitting authorities and sources

S	Equivalent or greater information provided to public

(	Final NSR Improvement rulemaking established policy directions for
PALs and flexible permits, and these remain after decision from the D.C.
Court of Appeals

Rulemaking needed to facilitate mainstream use of FAPs and        to add
“Green Groups” as a complement to PALs

Overview of Flexible Air Permits Proposal

(	Clarifications regarding the circumstances under which Advance
Approvals may be appropriate

Examples of advance approvals implemented in pilots for Minor NSR

Parts 70/71

Definition and clarifications to current provisions for reasonably
anticipated Alternative Operating Scenarios

Definition and clarifications for Approved Replicable Methodologies

(	Parts 51/52

Addition of provisions for (Green Groups( to Major NSR regulations

Advance Approvals

Cornerstone of Flexible Air Permits

Advance approval is the specific authorization required to make certain
changes under a particular applicable requirement

Pilot techniques accomplished advance approval by obtaining  Minor NSR
permit approval for a wide spectrum of changes

Proposal discusses the circumstances under which it may be appropriate
to use advance approvals under Minor NSR

Level of detail needed for advance approval of changes depends upon

    _   Applicable requirements

     _     Boundary conditions placed on the changes

Title V permit

Incorporates specific advance approvals from NSR

Contains terms and conditions as necessary to assure compliance with
other applicable requirements under the changed conditions

A2 Example

Existing major source

Minor source for VOC due to PTE cap

Seeks approval to add up to ten volatile organic liquid (VOL) storage
tanks, but is not sure at this time what liquids  will be stored or what
tank sizes will be needed

Applicable requirements for added tanks

Minor NSR (protection of NAAQS; no control technology requirement)

NSPS (with cutoffs for size and VOC vapor pressure)

MACT (with cutoffs for size and HAP vapor pressure)

SIP (not applicable when NSPS or MACT require controls; otherwise
requires submerged fill pipe)

Major NSR does not apply because this is a minor source due to the VOC
PTE cap

Application for A2 construction permit

Describes proposal to construct up to ten VOL storage tanks

Includes boundary conditions to limit potentially applicable
requirements and allow determination of worst-case emissions

Maximum storage capacity (30,000 gal)

Maximum VOC vapor pressure

Provides analysis of possible combinations of tank capacity, material
stored (HAP or non-HAP), and vapor pressure, and the applicable
requirements associated with each combination

A2 Example (cont.)

Construction permit

Authorizes construction under minor NSR based on continuing to meet VOC
PTE cap (protects NAAQS)

Advance approves the projected combinations of tank capacity, material
stored, and vapor pressure, stipulating the applicable requirements that
apply in each case:

Solvent	Tank capacity	Vapor pressure	Applicable requirements

HAP	< SIP cutoff	Any	None

HAP	> SIP cutoff &

< MACT cutoff	Any	SIP

HAP	> MACT cutoff	< MACT cutoff	SIP

HAP	> MACT cutoff	> MACT cutoff	MACT

non-HAP	< SIP cutoff	Any	None

non-HAP	> SIP cutoff &

< NSPS cutoff	Any	SIP

non-HAP	> NSPS cutoff	< NSPS cutoff	SIP

non-HAP	> NSPS cutoff	> NSPS cutoff	NSPS

Clarifications to Provisions for Alternative Operating Scenarios

(AOSs)

(	Definition

(	Alternative Operating Scenario in a Title V permit authorizes a
physical or operational change to occur at a particular emissions unit,
which subjects the unit to one or more applicable requirements

_        Typically involves an existing emissions unit which reversible
shifts its operations (e.g., fuel switching from oil to gas) which
triggers different regulations at the unit

(	Application Content

(	New or modified emissions units subject to a cap can report aggregate
tpy

(	Must have obtained, or have submitted an application to obtain, all
required authorizations (e.g., NSR)

(	Permit Content

(	Description of AOSs, all necessary authorizations, and terms
sufficient to assure compliance with all applicable requirements

(	Log content

(	Includes the emissions unit(s) included under the scenario; the
triggering event; the associated applicable requirement(s); other
applicable permit terms used to assure compliance; and the dates when
the source operated the AOS

(	Compliance

(	Sources cannot use AOSs to circumvent enforcement applicable to prior
scenarios

AOS Example

Existing boiler with dual fuel capability

Constructed under a minor NSR permit

Permitted for and capable of accommodating natural gas and distillate
fuel oil

Applicable requirements

Different SIP limits (and associated MMRT requirements) for opacity,
particulate matter, SO2, NOX, and CO when firing natural gas and
distillate oil

Boiler NSPS standard not applicable due to size, date of construction,
and fuels combusted

MACT standard only requires initial notification

     (no control required)

Switching between fuels does not trigger minor or major NSR because the
boiler was permitted for and can accommodate both fuels

Compliance methods

Design of the burners, coupled with proper operation and maintenance, is
sufficient to meet the SIP limits for both fuels for opacity,
particulate matter, NOX, and CO

For SO2, purchase distillate oil at or below 1 percent sulfur, with
periodic analyses

Application for AOS in Title V permit

Identify combustion of natural gas as the baseline operating scenario,
with all associated applicable requirements

Request combustion of distillate oil as an AOS, identifying all
associated applicable requirements

AOS Example (cont.)

Title V permit content

Designates baseline operating scenario (firing natural gas) and
identifies associated applicable requirements (SIP limits and MRRT
requirements)

Authorizes firing distillate oil as an AOS and identifies associated
applicable requirements (again, SIP limits and MRRT)

Requires contemporaneous on-site log to record periods when the AOS is
in operation

Requires semi-annual report of monitoring data, including data
associated with authorized operating scenarios

Log content

Affected emissions unit (i.e., the boiler)

Reference to the applicable requirements applying to the boiler when
burning distillate oil

Reference to the applicable permit terms that assure compliance with the
applicable requirements

Dates the source began and ceased combustion of distillate oil

Comments

Should switching among MACT compliance options be an AOS?

   _ Need for AOSs to be triggered by                 “physical or
operational” changes

Should a future modification authorized for existing EU be an AOS (i.e.
the additional required controls are deferred until the change is
actually made)?

    _ Need for AOSs to be reversible

 Workability of this FAP approach

Approved Replicable Methodology

(	Proposed new term (Approved Replicable Methodology( (ARM)

(	Permit terms that incorporate a protocol and instructions for its use
in a title V permit to facilitate compliance with an applicable
requirement

(	Always provides same results with same input(s)

(	Function

(	Update information for determining compliance without the need for a
permit revision

(	Particularly useful in AOSs and advance approvals to avoid secondary
permit revisions

Examples:

Updating compliance information (emissions factors, parameters)

PTE cap tracking

(	Rationale

(	Consistent with section 502(b)(6) streamlining

(	Demonstrated in pilots

  SEQ CHAPTER \h \r 1 ARM Example 1

Updating an Operating Limit

(	Existing source with web-coating operations

Subject to the Paper and Other Web Coating MACT standard (subpart JJJJ)

Meets required 95% control using a thermal oxidizer

Monitoring required under subpart JJJJ

Continuous monitoring of oxidizer combustion temperature

Operating limit for this parameter determined during the performance
test used to demonstrate compliance

ARM placed in permit (instead of the current operating limit) to avoid a
permit revision after each performance test

Test methods and procedures from subpart JJJJ for determining the
operating limit

Requirement to use the ARM to determine the operating limit each time a
performance test (that demonstrates compliance) is performed

Requirement to maintain records documenting the current operating limit
and the use of the ARM

Requirement to use the current operating limit for all subpart JJJJ
compliance monitoring and reporting purposes

MACT General Provisions on testing continue to apply (notification, QA,
reporting, etc.)

ARM Example 2

Assuring Compliance with a PTE Limit

Existing source renewing title V permit

Seeks PTE limit on VOC of 99 tpy

PTE limit will prevent applicability of major NSR for VOC

Source proposes replicable VOC quantification methodology to determine
total VOC emissions on an ongoing basis

Permitting authority may approve and incorporate into the title V permit
as an ARM, including:

Instructions for use

Monitoring, as necessary, to ensure the accuracy of the quantification
methodology (e.g., parameter monitoring)

Appropriate recordkeeping

Comments

Additional examples of potential ARMs

Where necessary, how additional permit terms can focus scope and use of
ARMs

Workability of this FAP approach

Green Groups

(	Definition: Green Group is a group of emissions activities at a major
stationary source in which certain changes would be authorized in a
major NSR process to occur, provided that the new/existing emissions
activities are:

are ducted to a common air pollution control device which is determined
to meet BACT/LAER, as applicable; and

meet, in aggregate, an emissions level determined for these emission to
assure compliance with all relevant ambient requirements

(	Alternative to Plantwide Flexibility

(	PALs are plantwide strategy with limited growth potential

(	Green Groups are an alternative pathway that would allow significant
growth and greater operational flexibility in a certain clean area of a
plant

Additional Requirements for Green Groups

Permit’s description of authorized changes must be sufficient to
distinguish, when a change is subsequently made, whether that change was
authorized

            --  Description of future changes relative to baseline
              emissions activities

Baseline actual emissions for Green Groups                must be
adjusted for “non-compliant” emissions

Offsets required in Nonattainment Areas

PAL-equivalent monitoring of Green Group cap

Monitoring to ensure control device capacity not exceeded

BACT/LAER decision effective for 10 years

Option to meet by compliant coatings (pollution prevention)

Semi-annual report includes (among other things)

    emissions cap compliance status for each month (12-
month rolling total) and list of any emissions  activities
added during the preceding 6-month

Removal of a Green Group activity would
contemporaneously subject the unit to major NSR and the remaining units
to a downward adjustment

Green Groups Would Be A Mandatory Program Element

Mandatory element due to anticipated environmental benefits

__ Greater control of grandfathered units/ emissions activities,  minor
projects, and of excluded activities (e.g., under 40 tpy VOC, shift to
another more polluting raw material which source already could
accommodate)

     __Bias toward more stringent BACT/LAER
limitations due to $/ton ratio

     __Better monitoring, recordkeeping,
   reporting, and testing (MRRT) and emissions
information

     __Provide for regional “clean growth”  (Any
   increase in actual Emissions that does occur     would      meet
BACT/LAER and relevant ambient constraints)

States have discretion to grant Green Groups on a case-by-case basis

Green Group Example

Existing “magnetic tape manufacturing” facility in an ozone
attainment area

Building 1

Mature products (recording tapes) – static operations

7 web coating lines

Building 2

Developing products (data storage media) – dynamic operations

7 web coating lines

5 lines subject to MACT for magnetic tape industry – 95% HAP control
of lines and associated mixers, storage tanks, solvent recovery, etc.

2 of these 5 lines also subject to magnetic tape NSPS – up to 95% VOC
control of lines and associated mixers

Other 2 lines subject to SIP requirement – 80% VOC control from lines

All 7 coating lines and associated equipment currently controlled with a
very efficient (96% control) carbon adsorption system (installed to
comply with MACT and allow for future flexibility)

Current annual VOC emissions from Building 2: 500 tpy (includes over
control of 572 tpy)

Source seeks flexibility for Building 2 operations

Expects a range of changes, but the exact changes will depend upon
business conditions during the permit term

Overall, seeks flexibility for the following types of changes:

Use new raw materials in coating solutions

Use entirely new coating solutions

Modify the existing process equipment

Add new process equipment of a similar nature to existing equipment
(including new coating lines) within Building 2 (all limited to
equipment included in the definition of “magnetic tape manufacturing
operation” in the MACT standard)

Green Group (cont.)

Permitting strategy:

PSD permit that designates Building 2 as a Green Group and advance
approves the future changes

Part 70 permit revision (significant modification) to address all
applicable requirements for advance approved (A2) changes

PSD permitting for Green Group

Green Group requirements:

Description of emissions activities and common APCD (i.e., Building 2)

Description of A2 changes

Annual emissions limit (baseline actuals + increases from changes = 500
tpy + 100 tpy = 600 tpy)

MRRT for annual limit (PAL-like) and to assure APCD capacity not
exceeded

Normal PSD requirements:

BACT demonstration (permanent total enclosures and 96%-efficient carbon
absorber, with capacity for A2 changes)

MRRT for BACT

AQ analysis based on 600 tpy annual emissions limit

Other impacts analyses

Concurrent part 70 permit revision

Description of baseline operations and A2 changes

Streamlined emissions limit to address all applicable requirements –
96% control of VOC and HAP to meet BACT, MACT, NSPS, and SIP

Streamline MRRT (per Green Group PSD permit)

Comments

Appropriate duration of Green Group

   _10 or 15 years?

   _Other?

Whether Green Group should be mandatory

How an equivalent P2 approach can be implemented for the Green Group

How are Green Groups similar to PALs

Workability of this FAP approach

Implementation of Final Rule

FAP network within EPA

   _   Supports RO-based assistance

   _   National Leadership

Some priority assistance to Performance  Track

Website for FAPs

Training and Workshops

Summary

The FAP proposed rulemaking, if finalized, would clarify the use of
advance approvals, AOSs, and ARMs and provides a new alternative for
Major NSR through the Green Group approach

The FAP rulemaking is needed to make the benefits of pilot approaches
more broadly available

The FAP proposal addresses several of the criticisms received on draft
White Paper Number 3

Summary of CAAAC Meeting on EPA’s Proposed Flexible Air Permitting
Rule

On September 24, 2007 a teleconference of the Clean Air Act Advisory
Committee (CAAAC) was held to further discuss the proposed Flexible Air
Permitting Rule.  The teleconference was previously announced via a
Federal Register notice and on the CAAAC website and was open to all
callers.

A representative of EPA gave an overview of the proposed Flexible
Permitting Rule and mentioned that the rule was published just 12 days
prior to the call and asked if anyone on the call was likely to request
a public hearing.  After receiving no request for a hearing, Mr. Trutna
presented background information on the proposed rule.

The following summarizes EPA's understanding of the questions raised
during the call:

Where do the States stand on flexibility and how much flexibility
already exists in their current rules?  (State representatives on the
call believed that many States currently have adequate authority to
advance approve categories of changes under their existing minor new
source review programs.)

How were previous pilot projects similar to the approaches described in
the rule being proposed?

 How do the different parts of the proposal work together?

Are the proposed flexible permit approaches also available to smaller
sources (e.g., those not subject to Title V permitting)?

Why did EPA propose a 10-year duration for Green Groups?

Why should the concept of Green Groups be limited to emissions
activities ducted to one control device?

Why are some aspects of the proposed rule mandatory (e.g., Green
Groups)?

Is an extension of the public comment period would be needed for
discussion on the topic by the CAAAC?

List of Attendees

EPA

Pat Childers, DFO

Mike Trutna, OAQPS

Barrett Parker, OAQPS

CAAAC Subcommittee

Jeff Muffat, 3M

Shannon Broom for Chuck Knauss

Gary Jones, GATX

Dawson Lassiter, OK

Ursula Kramer, Pima County

Bernie Paul, Eli Lilly

Bill Whiten (sp), National Cotton

Ralph Marques, Texas

Other

John Seitz

Barbara Bankoff

Summary of the Proposed Flexible Air Permitting (FAP) Rule Discussion

National Tribal Air Association (NTAA) / EPA Tribal Air Call

October 10, 2007

EPA Attendees: Sara Barthlomew, Darrel Harmon, Tami Laplante, Angel
McCormick, Laura

McKelvey, Mike Papp, Charlene Spells, Mike Trutna

Tribal Attendees: Kevin Greenleaf, Stephen Hartsfield, Milly Holly, Mel
Joseph, Dan Katlin,

Sam Kitto, Charles J Lippert, Justin Raglin, Lisa Riner, Bill Thompson,
Marleen Thompson,

Brandy Toft, Joy Wiecks, Maureen Zeise

EPA Contractor: Beth Friedman, EC/R, Inc.

An EPA representative gave the participants a summary of the proposed
FAP rule.  The following summarizes the questions and concerns
understood to have been raised by the participants during the call:

Are there any provisions for allowing tribes or other potential
commenters a chance to comment on the nature and duration of an advance
approval once it has been authorized by the state?

How many of the pilot permits allowed a duration greater than 5 years
for an advance approval of minor NSR?

Would EPA in the final rulemaking agree to encourage states to conduct
effective tribal outreach and to provide check-ins every 5 years of an
advance approval, whether such advance approvals were given to a minor
source or to a major one requiring a title V permit?

What information flows from the source to the permitting authority (and
is thus available to concerned parties) during the term of the advance
approval that indicates how well the permit is being implemented?

PHONE MEETING WITH THE ALLIANCE OF AUTOMOBILE MANUFACTURERS ON THE
FLEXIBLE AIR PERMITTING (FAP) RULE

OCTOBER 11, 2007

	Michael Trutna, David Beck, and David Painter of EPA held a telephone
conference with Shannon Broome and three representatives of the
automotive manufacturing industry (Chris Bates of General Motors, Tammy
Broom (sp?) of Chrysler, and Duane Johnson of Ford).  The
representatives described their paint shop operations in the context of
the September 12, 2007 FAP proposal.  The following represents EPA's
understanding of the questions and comments of significance about EPA's
proposed rulemaking:

Ability of the proposed Green Group concept to encompass the related
operations of the paint shop using multiple control approaches instead
of just one common control device (e.g., oxidizer on ovens, pollution
prevention [P2] re enhanced spray booth transfer efficiency, carbon
adsorbers on dip tanks, etc.).

Does the proposal restrict candidates to only what is emitted from one
common control device, or does the sentence on page 52231 soliciting
comment on a P2 alternative approach in lieu of an add-on device also
open up other opportunities (e.g., use of multiple control devices)?

Certain pilots and other permits have defined an "emissions unit" more
broadly than just those emissions activities serviced by the same
control device.  Prior BACT determinations for these broader emissions
units allow for more flexibility in accomplishing the required
reductions.

Specific concerns were raised about preserving the BACT flexibility
available to their coating lines and foundry operations as contained in
current NSR permits.  These permits typically contain an overall rate of
reduction (e.g., pounds per gallon of applied coating) for a broadly
defined emissions unit.

One approach that might be useful would first define the required
overall rate of reduction for the broadly defined emissions unit (e.g.,
line or even entire paint shop) assuming the application of a single
highly efficient control device and then allow flexibility to the source
and permitting authority in defining a combination of control measures
(rather than one single device) which would be used to achieve this
rate.

Alternative operating scenarios (AOSs) should not be imposed on all fuel
switches, since they are not now treated as AOSs in most permits

EPA should also minimize the number of potential AOSs by following the
recommendations in the CAAAC Task Force Report relating to a broad
concept of "applicable requirement."

Notices should not be required for AOSs in any event, since they are not
useful.

	EPA asked that these initial comments and concerns be submitted in
writing to the docket for the rulemaking.  Industry participants agreed.

PHONE MEETING WITH THE NATIONAL ENVIRONMENTAL DEVELOPMENT ASSOCIATION
CLEAN AIR PROJECT (NEDA/CAP) ON THE FLEXIBLE AIR PERMITTING (FAP) RULE

OCTOBER 11, 2007

	In response to a prior request, EPA conducted a phone meeting with
Leslie Ritts and representatives of NEDA/CAP.  The following represents
EPA's understanding of the comments and concerns about the September 12,
2007 proposal that were raised:

EPA should suggest how states might adjust rules to facilitate advance
approval of minor NSR

Prior activities that could have been covered by an alternative
operating scenario (AOS) should be grandfathered

Unconvinced that most AOSs are of value and believe that, absent a
source's request, no additional requirements (e.g., logs, 6-month
reports) are appropriate

Changing materials or fuels should not be a physical or operational
change (i.e., a trigger for an AOS)

Not sure why any AOS is ever needed or useful

Need to allow for flexibility in defining changes covered by the Green
Group and other FAP approaches

Criteria for Green Group should be that its included activities meet
BACT or LAER, as applicable, not that they are ducted to a single common
control device

ATTENDEES AT THE MEETING WITH THE AMERICAN CHEMISTRY COUNCIL (ACC) ON
THE FLEXIBLE AIR PERMITTING (FAP) RULE

OCTOBER 14, 2007

American Chemistry Council

Name					Affiliation

Desi Chari				Rohm & Haas

Barry Christiansen*			OxyChem

Chuck Cooper				Ashland

Doug Deason*				ExxonMobil

John Dege				DuPont

Linda Farrington			Eli Lilly

Fred Fedri*				OxyChem

Clay Freeberg				Chevron Oronite

Lorraine Gershman*			ACC

Cindy Gleason				Chevron Phillips Chemical

Jack McClure				Shell Chemical

Laurie Miller 				ACC

Bob Morehouse			ExxonMobil

Rich Raiders				Arkema

Russell Wozniak			Dow

Elaine Zoeller				Eastman

U. S. Environmental Protection Agency

Tanya Johnson

Juan Santiago

Mike Trutna

* Participated by telephone

Meeting Summary

Flexible Air Permits Workgroup

CAAAC Permitting Subcommittee

Date:		November 15, 2007

Location:	National Computer Center

		Environmental Protection Agency

		Research Triangle Park, NC

Attendees:	See Below

The EPA initiated the meeting to gain a better understanding of the
perspectives on the rulemaking held by various representatives of
CAAAC’s Permitting Subcommittee.  The EPA has summarized below our
understanding of the major feedback received from the attendees.

Advance Approval of minor NSR:

In discussion, the group reaffirmed that a state’s authority to grant
advance approvals of minor NSR is a function of the state’s minor NSR
program and SIP.  Some attendees urged EPA to more actively encourage
states to grant advance approvals.  Attendees suggested that neither
sources nor states should waste time developing advance approvals for
changes that are unlikely to occur.

One attendee pointed out that advance approvals well in advance of a
change are in tension with requirements for contemporaneous review of
air quality and technology-forcing control technology review, though
this depends on the state minor NSR program.  Another attendee noted
that the FAP for his company included a requirement to reevaluate air
quality resources and the state BACT determination at the midpoint of
the 5-year permit.

Alternative Operating Scenarios (AOSs):

Several attendees expressed concerns with the proposal for AOSs,
believing that it is unnecessary because AOSs are being implemented in
the field now with no problems.  One attendee indicated that the
proposal would add new, unnecessary burdens – more detailed
AOS-specific logs and a 6-month report.  One attendee indicated that
applicable requirements such as MACT standards include requirements for
records, notifications, etc. that are adequate to document operations
without the use of AOSs.

Two attendees indicated that the proposed definition language that
refers to a “physical or operational change” is confusing with
respect to its relationship to NSR.  Moreover, one attendee said that
this language appears to suggest a way to advance approve major NSR.
Representatives of EPA stated their belief that this is not the intent.

Approved Replicable Methodologies (ARMs):

An attendee voiced the concern that an ARM could be used to modify
operating conditions established in minor or major NSR permits, with the
result that emissions would increase without undergoing proper NSR
review.  Representatives of EPA believed that operating conditions
established in minor or major NSR permits are not open to revision
through an ARM established solely in a title V permit.  It was noted
that some states are allowing ARMs now and that everything in an ARM
flows from the applicable requirement.

One attendee was concerned that the preamble may suggest that an ARM can
be used to create a limit on potential to emit (PTE).  Representatives
of EPA indicated their understanding that ARMs can be used to track
compliance with a PTE limit, but not to create such a limit.

One attendee concluded from the proposal preamble that ARMs are for
monitoring and compliance purposes only.  The EPA representatives
clarified that the proposal would allow ARMs to be used more broadly;
for example, an ARM may be used in some cases to determine whether a
requirement applies.

Green Groups:

States indicated that they are strongly opposed to Green Groups being
made a mandatory major NSR program element.  One attendee questioned
whether EPA has the authority to make Green Groups a mandatory program
element, given that Green Groups are not necessary to make the overall
program work.  One attendee indicated that the underlying issue seems to
be the delay in obtaining permits for plant changes, and suggested
faster permitting as a possible remedy.

Another attendee pointed out that poorly controlled sources can net out
of major NSR more easily than sources that are well controlled.  Green
Group provisions would encourage sources to be well controlled.  Two
participants saw the main advantage of Green Groups as not having to
track every change to determine whether it is subject to NSR permitting.
 In addition, changes would not have to be tracked in time for purposes
of future netting.

One attendee expressed concern about the legality of partial PALs and
Green Groups because they involve less than the entire plant.  In
particular, changes inside a Green Group must be included in plantwide
netting with changes outside the Green Group, contrary to the proposal.
The same attendee pointed out the following statutorily based concerns
with the proposal for Green Groups:

Major NSR is required if there is a significant net increase across the
plant

The definition of “commence construction” imposes limits on
construction schedules

BACT/LAER provisions require a contemporaneous review

Offsets must be obtained for Green Group emissions increases in
nonattainment areas – the proposed Green Group rules do not require
offsets (although the preamble does)

The stated differences between the legal basis for Clean Units and for
Green Groups are not convincing

One attendee thought that the Green Group concept might be acceptable if
a BACT true-up that followed the Act's procedural requirements occurred
with public process during the term of the Green Group.  Another
attendee indicated that the timing and the ability to make changes in
the Green Group without being delayed by a periodic BACT true-up process
is important to industry.  Others indicated that the primary benefit of
a Green Group would be the relief from the ministerial aspects of NSR,
that is, the freedom from having to track every change at the source.
These attendees indicated that the benefits of this relief might not be
enough to justify BACT true-ups on too frequent a basis (e.g., every 18
months).

An attendee noted that resources are also a concern to states with
regard to Green Groups.  States currently struggle to keep up with
permitting for definite projects and expressed concern that Green Groups
would add to the load for review of projects that might never occur.
The attendee added that states are concerned that sources would use
Green Groups to tie up increment rights that they might never use.

Attendees List

Flexible Air Permits Workgroup Meeting

November 15, 2007

Room N110 National Computer Center, EPA/RTP

Name	Affiliation	Contact Information

David Beck	EPA/OPEI	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
919-541-5421

Rob Brenner	EPA	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
202-564-7409

Shannon Broome	Bingham	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
510-985-1710

Tara Capobianco

(by telephone)	TCEQ

	Robert Gardner	Lyondell	  HYPERLINK
<EMAIL_ADDRESS><EMAIL_ADDRESS>
713-321-4847

Bill Harnett	EPA	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
919-541-4979

Michael Ling	EPA/OAQPS	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
919-541-4729

R. B. “Ralph” Marquez	ESP	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
512-809-5587

Jeff Muffet	3M Company	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
651-778-4450

Steve Page	EPA/OAQPS	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
919-541-5297

Barrett Parker	EPA/OAQPS	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
919-541-5635

Bernie Paul	Eli Lilly and Company<PHONE_NUMBER>

John Paul

(by telephone)	NACAA

	John Seitz	ES&P, LLC<PHONE_NUMBER>

Andrew Teplitzky	EPA/OPEI	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
202-566-2947

Michael Trutna	EPA/OAQPS<PHONE_NUMBER>

John Vermillion

(by telephone)	TCEQ

	John Walke	NRDC	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
202-289-2406

Larry Weinstock	EPA/OAR/IO	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
202-564-9226

William Willets	NC DAQ	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
919-715-6252

George Wyeth	EPA/OPEI/NCEI	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
202-566-2203

EPA Contractor Support

Stephen Edgerton	EC/R	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
919-484-0222 x240

Graham Fitzsimons	EC/R	  HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
919-484-0222

  SEQ CHAPTER \h \r 1

MEMORANDUM

Date:		December 21, 2007

To:		Flexible Air Permits Rulemaking Docket

		Docket No. EPA-HQ-OAR-2004-0087

From:		Stephen Edgerton

		EC/R Incorporated

Subject:	Documentation of Briefing Session for Performance Track Members

	The purpose of this memorandum is to document a briefing on the
proposed Flexible Air Permitting rulemaking held for members of EPA’s
Performance Track.  The specifics of the briefing are as follows:

Date and Time:	December 12, 2007

			12:00 – 1:30 p.m. EST

Medium:	Web conference in which attendees were able to call in to hear
the presentation and log in to view the slides over the Internet.

Presenters:	Michael Trutna, EPA

	David Beck, EPA

	Barrett Parker, EPA

	Stephen Edgerton, EC/R Incorporated

Attendees:	See Attachment 1

Slides:	See Attachment 2

Attachment 1

Attendees

Last Name	First Name	Organization

Amos	Joseph	Dow West Virginia Operations

Bahl	Alan	BASF

Brown	Larry	ADEM

Byrne	Mary A	U.S. EPA

Call	Roma	Ross & Associates Environmental Consulting

Casasnovas	Alex 	Hewlett-Packard Caribe

Casillas	Sandy 	Janssen Ortho LLC

Cranmer	Lauren	Johnson & Johnson Health Care Systems

Earley	Fred 	Vermeer Mfg

Ellis	Ginger 	Regulatory Strategies

Esposito	Michael	Johnson & Johnson

Figura	Michael	Navy Lakehurst

Flack	Hugh	Akzo Nobel Aerospace Coatings

Grubbs	Karen	TN Department of Env & Conservation

Hamilton	Briggs	BMW Manufacturing Co., LLC

Hart	Kristin	Wisconsin Department of Natural Resources

Hayden	Robert	3M

Hedstrom	Tom	3M

Huber	Scott	Xerox Corporation

Ibarra	Maribella	IBM

Innes	Al	Minnesota Pollution Control Agency

Jenkins	Brandi	U.S. EPA Region 4

Kelly	Tom	U.S. EPA Region 9

Khan	Mazeeda	U.S. EPA

Kiefer	Colin	Yamaha Motor Manufacturing Corporation

Kinter	John	Nucor

Kondos	Nina	AZ Dept. of Env. Quality - ADEQ

Lam	Ray	Boise Cascade

Larson	Tim	Ross & Associates Environmental Consulting

Leone	Rick	NYS DEC

Loschiavo	Joe	DuPont Company

Martin	Marilou

McCaslin	Steve	SC DHEC - Bureau of Air Quality

McGovern	E.

Messersmith	Mark

Moss	Kathi	Weyerhaeuser

Newman	Alan	Washington Department of Ecology

Nguyen	Dao	Michelin North America

Orr	Jason	3M Company Cynthiana KY

Reed	Ross	LP

Ruder	Eric	IEc

Shumaker	Jeffrey	International Paper

Smith	Sally	Washington Group - ANCDF

Smith	Jody	Denso Manufacturing MI, Inc.

Stepman	Marci 	Lockheed Martin

Stretchberry	Steve	3M Prairie du Chien

Talukder	Mary	GA P2AD

Thompson	Randall	TDEC

Trabbic-Pointer	Denise	DuPont

Trimmer	John	Tennessee Division of Air Pollution Control

Trivedi	Virendra	PA DEP

Vaaughn	Jimmy	Bridgestone Firestone Aiken County Facility

Villasenor	Andre	U.S. EPA

Warram	Jim	Xerox Corporation

Weinreich	Gary	International Paper - Georgetown Mill

Weir	Mark	FRCSW

Wholean	Kiernan	CT DEP

Williams	Jeff	Brookhaven National Laboratory/Environmental & Waste
Management Services Division

Willis	Matthew	Fleet Readiness Center East

Woodruff	Rodger 	Pacific Northwest National Laboratory

Attachment 2

On the following page, the slides that were used for the presentation
are inserted into this document as an Adobe Acrobat document.  To view
the slides, double click on the title page.  This will open the Acrobat
document and allow you to page through.

Clean Air Act Advisory Committee

January 30, 2008

Crowne Plaza Hotel

Arlington, VA

Permits, New Source Reviews, and Toxics Subcommittee

At this meeting, the Subcommittee limited its discussion of the proposed
Flexible Air Permitting (FAP) rule to the Green Group provisions.  The
EPA has summarized below our understanding of the major feedback
received from the attendees.

One attendee stated that the National Association of Clean Air Agencies
(NACAA) opposes the Green Group proposal.  In particular, NACAA opposes
making the Green Group provisions mandatory for state major NSR programs
and opposes the proposed 10-year term for Green Groups.  The attendee
suggested that Green Groups could be a voluntary program.  The attendee
noted that many state and local agencies have the ability to employ
flexible permitting under other rules and that Green Groups would hinder
states' abilities to carry out their normal activities.  Another
attendee indicated that states are concerned that the proposal would
allow increases in Green Group emissions without triggering NSR.

In discussing whether a time frame of less than 10 years for Green
Groups would address the concerns of those who oppose them, one attendee
noted that a shorter reevaluation period would reduce the incentive for
sources to install BACT level controls before they would otherwise be
required.  Another attendee stated that the reevaluation period should
be 10 years in order to get a material capital investment; 5 years is
too short.  The latter attendee added that in some areas of the country
states are reaching the point of limited returns and want sources to try
new technologies, but this would not be possible with a 5-year
reevaluation period.

Another attendee stated that the proposed Green Group provisions are not
legal under the Clean Air Act; to be legal, Green Groups would have to
include contemporaneous technology reviews, statutory constraints, and
significant net emission reductions.  In particular, the attendee
indicated that Green Groups are not legal because they allow a company
to draw a bubble around a certain part of its facility and because
lowest achievable emission rate (LAER) determinations should not be
locked into a 5- or 10-year review period.  This attendee thought that
no further consideration of Green Groups was appropriate in light of
these legal concerns.

Following are a list of meeting attendees and a handout that was
distributed at the meeting which summarizes the concerns raised in
public comments received on the Green Group proposal.

Clean Air Act Advisory Committee

January 30, 2008

Crowne Plaza Hotel

Arlington, VA

Permits, New Source Reviews, and Toxics Subcommittee

List of Attendees

Subcommittee Members

Name					Affiliation

Jeff Muffat				3M Corporation

Bob Wyman				Latham and Watkins, LLC

John McManus			American Electric Power Service Corporation

John Walke				Natural Resources Defense Council (NRDC)

Janet McCabe				Improving Kids Environment

Bernie Paul				Eli Lilly and Company

Elaine M. Barron			Paso Del Norte Air Quality

Bruce Rising				Siemens

Eddie Terrill				Oklahoma DEQ

Ursula Kramer				Pima County DEQ

Greg Dana				Environment and Public Policy Consultant

Karen St. John				BP America

Lisa Gomez				Sempra Utilities

Don Clay				Koch Industries, Inc.

Barbara Bankoff			Eli Lilly and Company

Carolyn Green				Sunoco, Inc.

Liz Naess				USEPA

Mike Trutna				USEPA

Robert Brenner			USEPA

Michael Ling				USEPA

Pat Childers				USEPA

Observers

Name					Affiliation

Valerie Aghetta			Alliance of Automobile Manufacturers

Patty Strabbing			Chrysler LLC

Katherine Boyle			Greenwire

Bill Becker				NACAA

Mary Stewart Douglas		NACAA

Clara Poffenberger			Exxon Mobil

Matt Kuryla				Baker & Botts

D. C. Scharbacher			TCEQ

Pam Gilbin				Baker & Botts

Christopher Menen			USEPA

  PAGE   \* MERGEFORMAT  3

DOES NOT REFLECT FINAL EPA POLICY
                 	DRAFT

SUBJECT TO CHANGE 		 9/12/07

ATTACHMENT 1			PAGE   PAGE   \* MERGEFORMAT  24

ATTACHMENT 2			PAGE   PAGE   \* MERGEFORMAT  2

ATTACHMENT 3			PAGE   PAGE   \* MERGEFORMAT  1

ATTACHMENT 4				PAGE   PAGE   \* MERGEFORMAT  1

ATTACHMENT 5					PAGE   PAGE   \* MERGEFORMAT  1

ATTACHMENT 6					PAGE   PAGE   \* MERGEFORMAT  1

 PAGE

ATTACHMENT 7					PAGE   PAGE   \* MERGEFORMAT  5

           	11/27/07

  PAGE   \* MERGEFORMAT  18

E C/R Incorporated	Providing Environmental Technical Support Since 1989

ATTACHMENT 8				PAGE   PAGE   \* MERGEFORMAT  1

ATTACHMENT 8					PAGE   PAGE   \* MERGEFORMAT  3

ATTACHMENT 8						PAGE   PAGE   \* MERGEFORMAT  5

ATTACHMENT 9		PAGE   PAGE   \* MERGEFORMAT  4


[Federal Register Volume 76, Number 136 (Friday, July 15, 2011)]
[Notices]
[Pages 41828-41829]
[FR Doc No: 2011-17815]

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

SECURITIES AND EXCHANGE COMMISSION

Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.

Extension:
    Rule 31a-1; SEC File No. 270-173; OMB Control No. 3235-0178.

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501-3520), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the collections
of information summarized below. The Commission plans to submit these
existing collections of information to the Office of Management and
Budget for extension.
    Rule 31a-1 (17 CFR 270.31a-1) under the Investment Company Act of
1940 (the ``Act'') (15 U.S.C. 80a) is entitled ``Records to be
maintained by registered investment companies, certain majority-owned
subsidiaries thereof, and other persons having transactions with
registered investment companies.'' Rule 31a-1 requires registered
investment companies (``funds''), and every underwriter, broker,
dealer, or investment adviser that is a majority-owned subsidiary of a
fund, to maintain and keep current accounts, books, and other documents
which constitute the record forming the basis for financial statements
required to be filed pursuant to section 31 of the Act (15 U.S.C. 80a-
30) and of the auditor's certificates relating thereto. The rule lists
specific

records to be maintained by funds. The rule also requires certain
underwriters, brokers, dealers, depositors, and investment advisers to
maintain the records that they are required to maintain under federal
securities laws.
    There are approximately 4218 investment companies registered with
the Commission, all of which are required to comply with rule 31a-1.
For purposes of determining the burden imposed by rule 31a-1, the
Commission staff estimates that each fund is divided into approximately
four series, on average, and that each series is required to comply
with the recordkeeping requirements of rule 31a-1. Based on
conversations with fund representatives, it is estimated that rule 31a-
1 imposes an average burden of approximately 1750 hours annually per
series for a total of 7000 annual hours per fund. The estimated total
annual burden for all 4218 funds subject to the rule therefore is
approximately 29,526,000 hours. Based on conversations with fund
representatives, however, the Commission staff estimates that even
absent the requirements of rule 31a-1, 90 percent of the records
created pursuant to the rule are the type that generally would be
created as a matter of normal business practice and to prepare
financial statements, estimated to be approximately 26,573,400 annual
hours. Thus, the Commission staff estimates that the total annual
burden associated with rule 31a-1 is 2,952,600 hours.
    The estimate of average burden hours is made solely for the
purposes of the Paperwork Reduction Act, and is not derived from a
comprehensive or even a representative survey or study. 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.
    Written comments are requested on: (a) Whether the collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information has practical
utility; (b) the accuracy of the Commission's estimate of the burden(s)
of the collection of information; (c) ways to enhance the quality,
utility, and clarity of the information collected; and (d) ways to
minimize the burden of the collection of information on respondents,
including through the use of automated collection techniques or other
forms of information technology. Consideration will be given to
comments and suggestions submitted in writing within 60 days of this
publication.
    Please direct your written comments to Thomas Bayer, Director/Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312; or send an
e-mail to<EMAIL_ADDRESS>
    Dated: July 7, 2011.
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-17815 Filed 7-14-11; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 72 (Monday, April 17, 2017)]
[Notices]
[Pages 18171-18173]
[FR Doc No: 2017-07634]

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80428; File No. SR-BOX-2017-10]

Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change to
Expand the Execution Range for a Customer Cross Order

April 11, 2017.
    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 March 29, 2017, BOX Options Exchange LLC (the ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the self-regulatory organization. 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 expand the execution range for a Customer
Cross Order. The text of the proposed rule change is available from the
principal office of the Exchange, at the Commission's Public Reference
Room and also on the Exchange's Internet Web site at http://boxexchange.com.

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

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
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
    Same as Item 3a in the 19b-4 Purpose section. [sic] Make sure all
the footnotes copy correctly. [sic] The Exchange proposes to amend BOX
Rule 7110(c)(5) (Customer Cross Order) to expand the execution range
for a Customer Cross Order. This is a competitive filing that is based
on the rules of another exchange.\3\
---------------------------------------------------------------------------

    \3\ See MIAX Rule 515(h)(1). The Exchange is not copying all
aspects of MIAX Rule 515(h)(1). Specifically, BOX is not copying the
references to a liquidity refresh pause or route timer because the
Exchange does not offer these functionalities.
---------------------------------------------------------------------------

    A Customer Cross Order is comprised of a non-Professional, Public
Customer Order to buy and a non-Professional, Public Customer Order to
sell at the same price and for the same quantity.\4\ Rule 7110(c)(5)
provides that Customer Cross Orders are automatically executed upon
entry provided that the execution is between the best bid and offer on
BOX and will not trade through the NBBO. Customer Cross Orders are
automatically canceled if they cannot be executed. Customer Cross
Orders may only be entered in the regular trading increments applicable
to the options classes under Rule 7050. IM-7140-1 \5\ applies to the
entry and execution of Customer Cross Orders.
---------------------------------------------------------------------------

    \4\ See Rule 7110(c)(5).
    \5\ This Rule prevents an Options Participant executing agency
orders to increase its economic gain from trading against the order
without first giving other trading interest on BOX an opportunity to
trade with the agency order pursuant to Rule 7150 (Price Improvement
Period), Rule 7245 (Complex Order Price Improvement Period) or Rule
7270 (Block Trades). However, the Exchange recognizes that it may be
possible for an Options Participant to establish a relationship with
a Customer or other person (including affiliates) to deny agency
orders the opportunity to interact on BOX and to realize similar
economic benefits as it would achieve by executing agency orders as
principal. It will be a violation of this Rule for an Options
Participant to circumvent this Rule by providing an opportunity for
a Customer or other person (including affiliates) to execute against
agency orders handled by the Options Participant immediately upon
their entry into the Trading Host.
---------------------------------------------------------------------------

    The Exchange is now proposing to expand the execution range for
Customer Cross Orders. Specifically, a Customer Cross Order will
automatically execute if the execution price is at or between the best
bid and offer on BOX, provided that it is not at the same price as a
Public Customer Order on the BOX Book. This is opposed to the current
requirement that the execution price be strictly between the best bid
and offer on BOX. The

requirement that the Customer Cross Order not trade through the NBBO
will remain the same. The Exchange notes this is the same execution
parameters of another exchange.\6\
---------------------------------------------------------------------------

    \6\ See supra, note 3.
---------------------------------------------------------------------------

    The following examples are designed to illustrate the current
behavior of a Customer Cross Order in addition to how a Customer Cross
Order will behave after the proposed change.
Example 1
    The Exchange receives a Customer Cross Order for 100 contracts in
ABC at 3.13. The NBBO for ABC is 3.08-3.13. The following interest is
present on the BOX Book when the Customer Cross Order is received.

                                                                    BOX Book for ABC
--------------------------------------------------------------------------------------------------------------------------------------------------------
                              Account                                    Quantity           Buy              Sell           Quantity         Account
--------------------------------------------------------------------------------------------------------------------------------------------------------
MM.................................................................              10             3.08             3.13               10               MM
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Pursuant to Rule 7110(c)(5), the Customer Cross Order would be
rejected because the execution price (3.13) is at the best offer on the
BOX Book, not between the best bid and offer on BOX. After the proposed
change is implemented, the Customer Cross Order would be accepted. The
Customer Cross Order will execute at 3.13 because, after the proposed
change, a Customer Cross Order can execute at a price at or between the
best bid and offer on BOX. Additionally, the execution price of 3.13
will not trade through the NBBO.
Example 2
    Assume the same situation as Example 1 with the exception that the
ABC sell order on the BOX Book is for the account of a Public Customer
not a Market Maker. Pursuant to Rule 7110(c)(5), the Customer Cross
Order would be rejected because the execution price (3.13) is at the
best offer on the BOX Book, not between the best bid and offer on BOX.
After the proposed change is implemented, the Customer Cross Order
would still be rejected; however, it would be due to the fact that
there is a Public Customer Order on the BOX Book at the execution
price, not because the execution price is equal to the best offer on
the BOX Book.
    Lastly, the Exchange proposes to detail the additional
circumstances of when a Customer Cross Order is rejected. Specifically,
the Exchange will reject a Customer Cross Order if there is an ongoing
auction \7\ or an exposed order on the option series. The Exchange
notes that this has been in place on the Exchange for PIP and exposed
orders.\8\ BOX now proposes to expand the rejection of Customer Cross
Orders to all ongoing auctions, including COPIP, Facilitation and
Solicitation Auctions.
---------------------------------------------------------------------------

    \7\ BOX's auction mechanisms include the Price Improvement
Period (``PIP''), Complex Order Price Improvement Period
(``COPIP''), Facilitation Auction and Solicitation Auction.
    \8\ See IC-2012-004 available at http://boxexchange.com/assets/Informational_Circular_2012-004_Customer_Cross_Orders.pdf. In this
Circular, BOX states that Customer Cross Orders are not accepted on
an option instrument while there is a PIP auction in progress or
while an order is being exposed for the same option instrument.
---------------------------------------------------------------------------

    The Exchange anticipates implementing the proposed change during
the second quarter of 2017. The Exchange will provide notice of the
exact implementation date, via Circular, prior to implementing the
proposed change.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Securities Exchange Act of 1934
(the ``Act''),\9\ in general, and Section 6(b)(5) of the Act,\10\ in
particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general to protect investors and the
public interest. In particular, the Exchange believes that the proposed
rule change to amend BOX Rule 7110(c)(5) to expand the execution range
of a Customer Cross Order on BOX is designed to help BOX remain
competitive among options exchanges. The proposal to expand the
execution range is designed to facilitate transactions, to remove
impediments to and perfect the mechanism for a free and open market to
the benefit of market participants by increasing opportunities for
Customer Cross Orders to execute on the Exchange. Further, the Exchange
believes that the proposed change is reasonable and appropriate as
another options exchange in the industry has a similar rule currently
in place at their exchange.\11\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ See supra, note 3.
---------------------------------------------------------------------------

    The Exchange believes that detailing the additional circumstances
for when a Customer Cross Order may be rejected is reasonable and
appropriate because it will make clear to Participants these
circumstances and in turn will eliminate any potential for investor
confusion.

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 not necessary or appropriate in
furtherance of the purposes of the Act. In this regard and as indicated
above, the Exchange notes that the rule change is being proposed as a
competitive response to the rules of another exchange.\12\ The Exchange
does not believe the proposal will impose any burden on intermarket
competition, as the proposed rule will allow BOX to compete with other
options exchanges in the industry. The Exchange notes that it operates
in a highly competitive market in which market participants can readily
direct order flow to competing venues who offer similar functionality.
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    \12\ Id.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

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

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

    Because the proposed rule change does not (i) significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate if

consistent with the protection of investors and the public interest,
the proposed rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
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    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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or 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-BOX-2017-10 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BOX-2017-10. 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
10:00 a.m. and 3:00 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-BOX-2017-10, and should be
submitted on or before May 8, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-07634 Filed 4-14-17; 8:45 am]
BILLING CODE 8011-01-P