[Federal Register Volume 86, Number 12 (Thursday, January 21, 2021)]
[Notices]
[Page 6321]
[FR Doc No: 2021-01254]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OW-2020-0673; FRL-10019-78-OW]

Applying the Supreme Court's County of Maui v. Hawaii Wildlife
Fund Decision in the Clean Water Act Section 402 National Pollutant
Discharge Elimination System Permit Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of availability of guidance.

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SUMMARY: The Environmental Protection Agency (EPA or the Agency) is
issuing a memorandum to provide guidance to the regulated community and
permitting authorities on applying the recent decision of the United
States Supreme Court in County of Maui v. Hawaii Wildlife Fund, 140 S.
Ct. 1462 (2020), in the Clean Water Act Section 402 National Pollutant
Discharge Elimination System (NPDES) permit program for point source
discharges that travel through groundwater before reaching a water of
the United States. Consistent with EPA Guidance; Administrative
Procedures for Issuance and Public Petitions, published in the Federal
Register on October 19, 2020, EPA solicited public comments on the
draft guidance for thirty days, beginning on December 10, 2020. EPA has
developed a responsiveness summary to address major concerns and
comments, and it is available in the docket for this action. This
guidance does not have the force and effect of law and it does not bind
the public in any way. By issuing this guidance, the Agency intends
only to provide clarity to the public regarding existing requirements
under the law or Agency policies.

FOR FURTHER INFORMATION CONTACT: Scott Wilson, Office of Wastewater
Management, Water Permits Division (MC4203M), Environmental Protection
Agency. 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone
number:<PHONE_NUMBER>; email address<EMAIL_ADDRESS>
A. How can I get copies of this document and other related information?

    You may access this document electronically at https://www.epa.gov/npdes/releases-point-source-groundwater or at https://www.federalregister.gov. EPA established an official public docket
under Docket ID No. EPA-HQ-OW-2020-0673 which is accessible
electronically at http://www.regulations.gov that will also contain
copies of this Federal Register notice. The public docket does not
include CBI or other information whose disclosure is restricted by
statute. The telephone number for the Water Docket is<PHONE_NUMBER>.

    Dated: January 13, 2021.
Anna Wildeman,
Acting Assistant Administrator, Office of Water.
[FR Doc. 2021-01254 Filed 1-19-21; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 79, Number 158 (Friday, August 15, 2014)]
[Notices]
[Pages 48276-48279]
[FR Doc No: 2014-19331]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72804; File No. SR-OCC-2014-804]

Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing of an Advance Notice To Permit OCC To Adjust the Size
of Its Clearing Fund Intra-Month and Clearing Member's Clearing Fund
Contributions Intra-Month

August 11, 2014.
    Pursuant to Section 806(e)(1) of Title VIII of the Dodd-Frank Wall
Street Reform and Consumer Protection Act entitled the Payment,
Clearing, and Settlement Supervision Act of 2010 (``Clearing
Supervision Act'') \1\ and Rule 19b-4(n)(1)(i) of the Securities
Exchange Act of 1934 \2\ notice is hereby given that on July 22, 2014,
The Options Clearing Corporation (``OCC'') filed with the Securities
and Exchange Commission (``Commission'') the advance notice as
described in Items I and II below, which Items have been prepared by
OCC.\3\ The Commission is publishing this notice to solicit comments on
the advance notice from interested persons.
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    \1\ 12 U.S.C. 5465(e)(1).
    \2\ 17 CFR 240.19b-4(n)(1)(i).
    \3\ OCC also filed the proposals contained in this advance
notice as a proposed rule change under Section 19(b)(1) of the
Securities Exchange Act of 1934 and Rule 19b-4 thereunder. See SR-
OCC-2014-17; 15 U.S.C. 78s(b)(1); 17 CFR 240.19b-4.
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I. Clearing Agency's Statement of the Terms of Substance of the Advance
Notice

    This advance notice is filed by OCC in connection with a proposed
change that would permit OCC to increase the size of its clearing fund
intra-month based upon observed changes in OCC's projected exposure and
on an emergency basis. In addition, the proposed change provide [sic]
that under certain circumstances OCC will increase a clearing member's
required contribution to OCC's clearing fund intra-month.

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Advance Notice

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

(A) Clearing Agency's Statement on Comments on the Advance Notice
Received From Members, Participants or Others

    Written comments on the advance notice were not and are not
intended to be solicited with respect to the advance notice and none
have been received.

(B) Advance Notices Filed Pursuant to Section 806(e) of the Payment,
Clearing and Settlement Supervision Act

    The proposed change would permit OCC to increase the size of its
clearing fund intra-month based upon observed changes in OCC's
projected exposure or on an emergency basis as well as permit
adjustments to a clearing member's required contribution to the
clearing fund at any time, including between regular monthly
calculations, under certain circumstances. OCC is filing this advance
notice pursuant to Section 806(e)(1) of the Clearing Supervision Act
\4\ because the change could be deemed to materially affect the nature
or level of risks presented by OCC. The proposed change will also be
filed as a proposed rule change filing.
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    \4\ 12 U.S.C. 5465(e)(1).
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Purpose of the Proposed Change
    OCC is proposing to modify Rule 1001, which concerns the sizing of
OCC's clearing fund and the allocation of clearing member contributions
thereto. First, by adding Interpretation and Policy .05, Rule 1001
would be revised to permit OCC to increase the size of its clearing
fund intra-month based upon observed changes in OCC's projected
exposure or on an emergency basis. Second, by adding Interpretation and
Policy .06, Rule 1001 would be revised to permit increases to a
clearing member's required contribution to the clearing fund at any
time, including between regular monthly calculations, under certain
circumstances. Rule 1001(b) and 1001(f) would also be revised to
clarify certain terminology relating to the calculation of clearing
fund contributions, and an Interpretation and Policy would be added to
Article VIII, Section 2 of the By-Laws to clarify that this section,
which addresses rule changes that increase a clearing member's required
clearing fund contributions, does not apply to actions taken under
Interpretations and Policies .05 or .06 to Rule 1001.
Background
    The primary purpose of OCC's clearing fund is to provide a high
degree of assurance that market integrity will be maintained in the
event that one or more clearing members fails to meet its obligations
to OCC.\5\ The clearing fund can also be used to meet the obligations
resulting from the default of any bank or securities or commodities
clearing organization to which OCC is exposed. The clearing fund
supplements the financial safeguards afforded by OCC's membership
standards and margin requirements.
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    \5\ See, Article VIII, Section 1 of OCC's By-Laws which sets
forth the purpose of the clearing fund.
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    Currently, the size of the clearing fund is adjusted monthly. On
each business day OCC calculates its hypothetical exposure, at a
confidence level of at least 99%, under simulated default scenarios
that include an ``idiosyncratic default'' of a single clearing member
group \6\ and a ``minor systemic event'' involving the near-
simultaneous default of two random clearing members. OCC then treats
the greater of these two hypothetical exposures as that day's projected
peak exposure. OCC also computes the projected draws from the clearing
fund that would be necessary in connection with each business day's
projected peak exposure. To determine the overall size of the clearing
fund, on the first business day of each month, OCC averages these daily
projected clearing fund draws over the prior month and uses that
average as the required size of the clearing fund for that month.
However, notwithstanding this calculation, in no event will the size of
the clearing fund be set at less than 110% of the size of OCC's
committed credit facilities secured by the clearing fund, in order to
assure that at all times OCC will have collateral to pledge sufficient
to draw the entire amount of such facilities. OCC publishes the new
clearing fund requirement on the first business day of each month and
clearing members have five business days to meet the new
requirement.\7\
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    \6\ A Clearing Member Group is a clearing member and any other
clearing member that is affiliated with such clearing member. See
Article 1, Section 1, C. (15) of OCC's By-Laws.
    \7\ See OCC Rules 1002 and 1003, respectively.

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    The foregoing calculations and the allocations among clearing
members are based on the prescribed formulas included in Rules 1001(a)
and 1001(b), respectively, as supplemented by Interpretation and Policy
.01 to Rule 1001. These formulas were adopted pursuant to a change
effective April 18, 2013.\8\ The Rules do not, however, provide for
increases to the overall size of the clearing fund between such monthly
adjustments, nor do the Rules provide for adjustments to a clearing
member's required contribution between such monthly calculations.
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    \8\ Securities Exchange Act Release No. 69403 (April 18, 2013),
78 FR 24257 (April 24, 2013) (SR-OCC-2013-02).
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Proposed Change To Authorize Certain Adjustments to the Total Size of
the Clearing Fund and Individual Clearing Members' Required
Contributions
    In order to mitigate the risks of an underfunding of the clearing
fund, the proposed changes to the Rules would provide OCC with the
authority to increase the total size of the clearing fund intra-month
upon a significant and sustained increase in exposure based on daily
projected clearing fund draw calculations, as described above, and on
an emergency basis for the protection of OCC or in the public interest.
The proposed changes would also provide OCC with the authority to
increase a clearing member's required clearing fund contribution under
certain circumstances reflecting a change in the clearing member's
financial condition or risk profile.
Adjustments to the Overall Size of the Clearing Fund
    OCC would have the authority to increase the overall size of the
clearing fund intra-month in the event that the five-day rolling
average of the projected draws against the clearing fund are 150% or
more of the size of the clearing fund. This threshold is intended to
ensure that intra-month increases in clearing fund size are limited to
occasions in which the increase in exposure is significant and
prolonged. Based on OCC staff's analysis of historical clearing fund
data beginning in July 2011, the use of this 150% threshold would have
resulted in only four changes to the clearing fund's size during this
period, one of which related to firm-specific changes and three of
which related to increased volatility prior to and during the events
related to the downgrade of the U.S. Government's credit rating and the
ongoing debt crisis of that period. In the event that the 150%
threshold is exceeded over a five-day period, OCC's Executive Chairman
or President would have the authority to approve an increase in the
clearing fund's size. The Risk Committee of OCC's Board would be
informed of such officer's determination as soon as practicable. OCC
would also provide notification to the SEC and CFTC in the same manner
as if an emergency waiver or suspension of OCC's Rules occurred.\9\
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    \9\ See OCC's By-Laws Article IX, Section 14.
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    The Risk Committee would also be permitted to approve an increase
in the clearing fund's size on an emergency basis upon its
determination that such action is necessary for the protection of OCC
or in the public interest, and OCC would then provide notification to
the Board of Directors, SEC and CFTC in the same manner as if an
emergency waiver or suspension of OCC's Rules occurred.\10\ OCC
believes that these processes ensure proper management and board-level
oversight regarding decisions to increase the clearing fund size.
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    \10\ In recommending that the Risk Committee approve an
emergency increase in the size of the clearing fund, OCC would
follow the process set forth in OCC's By-Laws Article IX, Section 14
in that the Executive Chairman, Management Vice Chairman or
President, in his, her or their judgment, would determine that: (1)
An emergency exists, and (2) such an increase is necessary or
advisable for the protection of OCC or otherwise in the public
interest.
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    Upon an intra-month increase in the clearing fund's size, clearing
members would generally be given two business days to satisfy any
deficit,\11\ and the increase would generally remain in effect until
the next regular monthly calculation occurs unless the Risk Committee
determines that a further increase is warranted or the 150% threshold
is triggered more than once during the same month. The foregoing
changes to OCC's Rules would not affect the basic clearing fund
methodology as previously approved by the SEC, nor would they affect
allocation of the clearing fund among clearing members.\12\ OCC has
discussed the proposed changes with its Financial Risk Advisory
Council, a working group consisting of representatives of clearing
members and exchanges formed by OCC to review and comment on various
risk management proposals. They additionally were discussed with the
OCC Operations Roundtable, also consisting of representatives of
clearing members and exchanges, which considers operational
efficiencies and improvements. No concerns were raised by either
working group during the course of these discussions.
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    \11\ Intra-month clearing fund adjustments will only occur in
limited circumstances and will be due to certain events that could
materially affect the overall liquidity of OCC. Based on feedback
OCC received from clearing members, OCC believes that providing a
clearing member with one day to absorb the increase, including
determining the most effective manner in which to collateralize the
increase, and a second day to fund the increase strikes the proper
balance between effective risk management and not causing material
disruptions to a clearing member's business.
    \12\ In particular, the contributions of futures-only affiliated
clearing members and clearing members depositing the required
minimum clearing fund contribution, respectively, would not be
adjusted in connection with any increase in the clearing fund size.
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Adjustments to Individual Clearing Members' Required Contributions
    The proposed change would also permit OCC to increase individual
clearing members' required clearing fund contributions in three
circumstances. The first circumstance exists when a clearing member's
required clearing fund contribution exceeds its net capital.\13\ In
this situation, the clearing member is placed on OCC's ``Watch Level
III'' surveillance, which is used to assess a clearing member's ability
to meet a call to replenish its clearing fund contribution and requires
certain OCC executive officers to consider protective measures with
respect to such clearing member. One such protective measure would be
to add the amount of such excess to the clearing member's required
clearing fund contribution, thereby funding such difference in advance
of the regular monthly calculation.\14\ No subsequent adjustment
thereunder would be permitted under the applicable Rule provision until
the earlier of the next adjustment of the clearing fund (either as a
result of the next monthly adjustment or as a result of an increase in
the total clearing fund pursuant to the changes described above) or the
next required reporting of the clearing member's net capital.
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    \13\ In this context, and for clearing members that are
registered broker-dealers, net capital means net capital computed in
accordance with Securities Exchange Act Rule 15c3-1. For clearing
members that are futures commission merchants, net capital means
adjusted net capital computed in accordance with CFTC Regulation
Section 1.17 and for Canadian clearing members, net capital means
risk-adjusted capital computed in accordance with Investment
Industry Regulatory Organization of Canada Rule 17.1.
    \14\ Pursuant to Interpretation and Policy .01 to Article VIII,
Section 5 of OCC's By-Laws, a clearing member's clearing fund
contribution is used to determine the clearing member's share of any
clearing fund deficiency resulting from a clearing member
insolvency.
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    The second circumstance is the merger or consolidation of two or
more clearing members, in which case the variable amount of the
required clearing fund contribution for the surviving clearing member
would be adjusted so that it equals the sum of such amount

for the surviving clearing member and the total of such amounts for all
other clearing members involved in the transaction. Such adjusted
amount would be substituted for the variable amount previously
calculated for the surviving clearing member.
    The third circumstance is the transfer of positions between
clearing members, in which case OCC would be able to adjust the
clearing fund contributions of the transferor clearing member and the
transferee clearing member after giving effect to the transfer, subject
to the agreement of the two clearing members. The amount of such
adjustment would affect the variable amount of each clearing member's
required clearing fund contribution and, irrespective of the amount or
size of the positions transferred, each clearing member would continue
to be required to maintain OCC's minimum clearing fund contribution.
Proposed Changes to By-Laws and Rules
    OCC is proposing to add an Interpretation and Policy .05 under Rule
1001 to provide for the authority to increase the size of the clearing
fund on an intra-month basis. Subparagraph (a) of proposed
Interpretation and Policy .05 would authorize OCC's Executive Chairman
or President, or the Risk Committee, to increase the clearing fund size
as described above (i.e., based on the daily calculations or by the
Risk Committee on an emergency basis). Proposed Interpretation and
Policy .06 under Rule 1001 would provide for the authority to increase
individual clearing members' required clearing fund contributions in
certain circumstances. Subparagraph (a) would provide for an increase
when a clearing member's required clearing fund contribution exceeds
its net capital, subparagraph (b) would provide for an increase in the
event of a merger or consolidation involving clearing members and
subparagraph (c) would provide for an increase in the event of a
transfer of positions between clearing members, in each case as
described above.
    Subparagraph (b) of proposed Interpretation and Policy .05 and
subparagraphs (a), (b) and (c) of proposed Interpretation and Policy
.06 would provide that if the total size of the clearing fund size or
an individual clearing member's required contribution is increased, as
applicable, the variable amount would be increased accordingly for each
clearing member, and this increase would be effective for all purposes
under OCC's By-Laws and Rules, including each clearing member's
required contribution in the event the clearing fund is fully depleted
in connection with the insolvency of a clearing member.\15\ However,
subparagraph (b) of proposed Interpretation and Policy .05 and
subparagraphs (a), (b) and (c) of proposed Interpretation and Policy
.06 would specify that the variable amount would remain subject to
nonstandard calculations for futures-only affiliated clearing members
and clearing members that have deposited the minimum required clearing
fund contribution.
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    \15\ See Interpretation and Policy .01 to Article VIII, Section
5 of OCC's By-Laws.
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    An example will illustrate the manner in which the total size of
the clearing fund and individual clearing members' contributions could
be adjusted pursuant to Interpretation and Policy .05 to Rule 1001. The
example assumes that OCC's total clearing fund requirement is $1
million divided among five clearing members. Member One has the minimum
requirement of $150,000, Member Two has a requirement of $212,500 and
the other three comprise the remainder in differing amounts. If OCC
determined, based on the most recent five-day rolling average of
clearing fund draws, that it should resize the fund to $1.5 million,
Member One would maintain the minimum requirement of $150,000 and the
other four members would be assessed the incremental amount totaling
$500,000. Member Two would be assessed $125,000 because the firm's pro
rata share of the original clearing fund requirement excluding Member
One's minimum requirement equaled 25%, i.e., $212,500 divided by
$850,000. Member Two's new clearing fund requirement would be $337,500
until the next clearing fund sizing calculation. The other three
members would be assessed their share of the remaining $375,000 (using
a denominator of $850,000 as with Member Two) so that the total
clearing fund requirement of $1.5 million is satisfied.
    Subparagraph (c) of proposed Interpretation and Policy .05 and
subparagraph (d) of proposed Interpretation and Policy .06 would
provide that as soon as practicable after any increase in the total
size of the clearing fund size or an individual clearing member's
required contribution, as applicable, OCC would provide notice to the
affected clearing members, and such clearing members would be required
to satisfy their deficits within two business days of such notice in
the case of adjustments pursuant to Interpretation and Policy .05 and
one business day in the case of adjustments pursuant to Interpretation
and Policy .06. If, however, any deficit would be required to be
satisfied on the first, second, third or fourth business day of a
calendar month, it may instead be satisfied by the fifth business day
of the calendar month. These subparagraphs also set forth that a
resulting change in a clearing member's contribution to the clearing
fund due to an increase in the clearing fund's size or an individual
adjustment will be reflected on one or more reports made available by
OCC, but that OCC will not revise the clearing member's Clearing Fund
Statement.
    Subparagraph (d) of proposed Interpretation and Policy .06 would
further specify that OCC may require any deficit resulting from a
merger of clearing members or the transfer of positions between
clearing members to be satisfied prior to the occurrence of the merger
or transfer. Moreover, subparagraph (e) of proposed Interpretation and
Policy .06 would clarify that the individual adjustments under
subparagraphs (a), (b), and (c) of proposed Interpretation and Policy
.06 may result in an adjustment to the total size of the clearing fund.
    To enhance the readability of the new Interpretations and Policies
added to Rule 1001, the term ``fixed amount'' would be used to refer to
the portion of a clearing member's clearing fund contribution
calculated pursuant to clause (x) of Rule 1001(b), and the term
``variable amount'' would be used to refer to the portion of a clearing
member's clearing fund contribution calculated pursuant to clause (y)
of Rule 1001(b). Rule 1001(b) and 1001(f) would be amended solely for
the purpose of introducing these defined terms.
    Article VIII, Section 2(b) of OCC's By-Laws provides, among other
things, that if a clearing member's clearing fund contribution is
increased as a result of an amendment of the Rules, the increase will
not be effective until the clearing member is given five business days'
notice of the amendment. OCC proposes to add Interpretation and Policy
.01 to Article VIII, Section 2 to clarify that such section shall not
apply to increases in the total size of the clearing fund pursuant to
Interpretation and Policy .05 of Rule 1001, nor to an increase in an
individual clearing member's contribution pursuant to Interpretation
and Policy .05 or .06 of Rule 1001.
    While the proposed change may require clearing members to increase
their clearing fund contributions at any time during a month, any such
increase in the overall size of the clearing fund would correspond to a
material change in OCC's projected exposure and would affect all
clearing members

proportionally in the same manner as a monthly adjustment, and any such
increase in an individual clearing member's required contribution would
correspond to a material change in the clearing member's business or
financial condition, as well as use of OCC's resources. OCC therefore
does not believe that clearing members will have significant problems
in complying with the change. In addition to the prior communications
with clearing members described above, in connection with the filing of
this change, OCC will inform clearing members of the proposed change
via an information memorandum, in order to advise clearing members of
the procedures OCC intends to implement in support of the proposed
change, including notice procedures to advise clearing members of any
increases in contribution amounts.
Statutory Basis for the Proposed Change
    OCC believes that the proposed change to OCC's Rules is consistent
with Section 805(b) of the Clearing Supervision Act \16\ because the
proposed change will reduce systemic risk.\17\ OCC believes that the
proposed changes to its clearing fund sizing, as described above, will
reduce the risk that the size of OCC's clearing fund would be
insufficient should OCC need to use clearing fund assets to close-out
positions of a defaulted clearing member. For the same reasons, the
proposed change will reduce systemic risk because it will promote
confidence that OCC will be able to timely meet its settlement
obligations because the proposed change will diminish the likelihood
that OCC's clearing fund would be insufficient in the event of a
clearing member default. The proposed change is not inconsistent with
the existing Rules of OCC, including any other Rules proposed to be
amended or any advance notice filings pending with the Commission.
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    \16\ 12 U.S.C. 5464(b).
    \17\ 12 U.S.C. 5464(b)(3).
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Anticipated Effect On and Management of Risk
    OCC believes that the proposed change will reduce OCC's overall
level of risk because the proposed change makes it less likely that
OCC's clearing fund would be insufficient should OCC need to use its
clearing fund to manage a clearing member default. As described above,
the proposed change would provide OCC with the ability to increase the
overall size of its clearing fund as result of a projected increase in
anticipated draws or for the protection of OCC. In addition, OCC would
have the ability to increase individual clearing member's clearing fund
contribution as a result of certain events such as a change in net
capital, a merger or a transfer of positions. This flexibility will
allow OCC to adjust the size of its clearing fund in response to events
that may occur in between normal monthly clearing fund calculations,
and therefore makes it less likely that OCC's clearing fund would be
insufficient should OCC need to use its clearing fund to manage a
clearing member default. Accordingly, OCC's overall level of risk will
be reduced as a result of this proposed change. Moreover, and for the
same reasons, the proposed change will facilitate OCC's ability to
manage risk.

III. Date of Effectiveness of the Advance Notice and Timing for
Commission Action

    The designated clearing agency may implement this change if it has
not received an objection to the proposed change within 60 days of the
later of (i) the date that the Commission receives the notice of
proposed change, or (ii) the date the Commission receives any further
information it requests for consideration of the notice. The designated
clearing agency shall not implement this change if the Commission has
an objection.
    The Commission may, during the 60-day review period, extend the
review period for an additional 60 days for proposed changes that raise
novel or complex issues, subject to the Commission providing the
designated clearing agency with prompt written notice of the extension.
The designated clearing agency may implement a change in less than 60
days from the date of receipt of the notice of proposed change by the
Commission, or the date the Commission receives any further information
it requested, if the Commission notifies the designated clearing agency
in writing that it does not object to the proposed change and
authorizes the designated clearing agency to implement the change on an
earlier date, subject to any conditions imposed by the Commission.
    The designated clearing agency shall post notice on its Web site of
proposed changes that are implemented.
    The proposal shall not take effect until all regulatory actions
required with respect to the proposal are completed.\18\
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    \18\ OCC also filed the the proposals contained in this advance
notice as a proposed rule change under Section 19(b)(1) of the
Securities Exchange Act of 1934 and Rule 19b-4 thereunder. See supra
note 3.
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing. 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-OCC-2014-804 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-OCC-2014-804. 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 advance notice that are filed
with the Commission, and all written communications relating to the
advance notice 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 the filing also will be available for inspection
and copying at the principal office of OCC and on OCC's Web site at
http://www.theocc.com/components/docs/legal/rules_and_bylaws/sr_occ_14_804.pdf. 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-OCC-
2014-804 and should be submitted on or before September 5, 2014.

    By the Commission.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-19331 Filed 8-14-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 4 (Friday, January 6, 2012)]
[Notices]
[Pages 826-828]
[FR Doc No: 2011-33859]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29896; 812-13781]

Cantilever Capital, LLC and Cantilever Group, LLC; Notice of
Application

December 29, 2011.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTIONS: Notice of application for an order under section 6(c) of the
Investment Company Act of 1940 (the ``Act'') granting an exemption from
section 12(d)(3) of the Act.

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Applicants: Cantilever Capital, LLC (``Cantilever'' or the ``Company'')
and Cantilever Group, LLC (the ``Adviser'').

Summary of Application: Cantilever, or any successor to Cantilever, and
the Adviser, or any successor to the Adviser (each, an ``Applicant''
and collectively, the ``Applicants'') seek an order under section 6(c)
of the Act to permit Cantilever to acquire the securities of various
investment managers that each derives more than 15% of its gross
revenues from securities related activities as defined in rule 12d3-
1(d)(1) under the Act, in excess of the limitations in rule 12d3-
1(b).\1\
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    \1\ For the purposes of the requested order, ``successor'' is
limited to an entity or entities that result from a reorganization
into another jurisdiction or a change in the type of business
organization.

DATES: Filing Dates: The application was filed on June 8, 2010, and
amended on October 18, 2010, and December 5, 2011. Applicants have
agreed to file an amendment during the notice period, the substance of
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which is reflected in this notice.

Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on January 23, 2012, and should be accompanied by proof of
service on the applicants, in the form of an affidavit or, for lawyers,
a certificate of service. Hearing requests should state the nature of
the writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street
NE. Washington, DC 20549-1090. Applicants, c/o Mr. David Ballard,
Cantilever Capital, LLC, 137 Rowayton Ave., Third Floor, Rowayton, CT
06853.

FOR FURTHER INFORMATION CONTACT: Jean E. Minarick, Senior Counsel, at
(202) 551-6811, or Janet M. Grossnickle, Assistant Director, at (202)
551-6821 (Division of Investment Management, Office of Investment
Company Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling<PHONE_NUMBER>.

Applicants' Representations

    1. The Company, a Delaware limited liability company, intends to
operate as a non-diversified, closed-end management investment company
under the Act. The Company intends to elect to be treated as a business
development company under section 54 of the Act on or before June 30,
2014.\2\ The Adviser is a Delaware limited liability company organized
to manage the Company, which will be the sole client of the Adviser,
and will not engage in any other business. Cantilever will invest more
than 70% of the total value of its assets in securities of private
companies engaged exclusively in the investment management business
(each, an ``Investment Manager''), with the exception that certain
Investment Managers may, through affiliates (as defined below) or
subsidiaries, also provide limited broker-dealer services in connection
with distribution of their investment products or as part of a wealth
management business. Applicants expect that more than 15% of the
revenues of each Investment Manager will be from ``securities related
activities'' as defined in rule 12d3-1(d)(1) under the Act.\3\
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    \2\ Section 2(a)(48) of the 1940 Act defines a business
development company to be any closed-end investment company that
operates for the purposes of making investment in securities
described in sections 55(a)(1) through 55(a)(3) of the Act, makes
available significant managerial assistance with respect to the
issuers of such securities and has elected to be subject to the
provisions of section 55 through 65 of the 1940 Act.
    \3\ Subparagraph (d)(1) of rule 12d3-1 defines ``securities
related activities'' to mean a person's activities as a broker,
dealer, underwriter, registered investment adviser or investment
adviser to a registered investment company.
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    2. Applicants will offer to make available to the Investment
Managers, and if desired by the Investment Managers provide, managerial
services including distribution and marketing advice; guidance on
industry best practices; advice on planning, strategy and product
development; geographic expansion and mergers and acquisitions, joint
ventures, and liftouts; advice on operations, accounting, legal,
capital structure, human resources and compensation, general management
and industry networking. Neither the Applicants nor their affiliates
will provide any managerial assistance that includes any activity
involving any Investment Manager's investment process or investment
decisions.
    3. The Company will provide debt capital to Investment Managers,

including Investment Managers that are or may become registered under
the Investment Advisers Act of 1940. In exchange for a non-voting, non-
controlling loan from the Company or its affiliates (as defined below),
the Investment Manager will issue a participating convertible debt
security to the Company (each, a ``Note'' and such loan, a ``Loan'').
Each Note will have a coupon and will provide for repayment of
principal at the Note's maturity (such maturity is contemplated to be
20 years after the issue date) in the event that it is not converted
into equity of the underlying Investment Manager at such time. If
converted into equity, it is expected that in most cases the equity
security received from the conversion of the Notes would consist of
non-voting securities and in any case would not represent more than 25%
of outstanding voting securities, or otherwise constitute control, of
the underlying Investment Manager. The Notes will not be actively or
publicly traded; they will be purchased by the Company in private
transactions and, generally, held to maturity.
    4. Applicants represent that most of the Investment Managers
issuing the Notes will be registered investment advisers and the vast
majority of each Investment Manager's revenue will be earned by
charging a fee on assets under management or possibly also through a
performance fee. The amount of the Company's investments in each of the
Notes, which Applicants believe will be treated as equity securities
for purposes of rule 12d3-1, will likely constitute more than 5% of the
outstanding equity securities of each Investment Manager at the time of
the investment. In the event the Company invests in Notes of an
Investment Manager that are treated as debt securities for purposes of
rule 12d3-1, the principal amount of that debt will likely exceed 10%
of the outstanding principal amount of the Investment Manager's debt
securities. In addition, Applicants believe that there will be
instances whereby more than 5% of the value of Applicant's total assets
will be invested in each of several of the Investment Managers.\4\
---------------------------------------------------------------------------

    \4\ In order to comply with the Internal Revenue Code's
diversification requirements for regulated investment companies, it
is contemplated that, with respect to at least 50% of the Company's
total assets, each of the investments in an Investment Manager will
not constitute more 5% of the Company's total assets at the time of
investment. However, with respect to the remaining 50% of the
Company's total assets, the Company intends to make investments that
each constitute more than 5% but less than 25% of the value of the
Company's total assets, as measured at the time of the acquisition.
---------------------------------------------------------------------------

    5. Applicants believe that permitting the Company to invest in the
equity and debt securities of various Investment Managers, each of
which the Applicants believe will be an issuer that derives more than
15% of its gross revenues from ``securities related activities,'' in
excess of the quantitative limitations set forth in rule 12d3-1(b)
would be in the best interests of the Company's shareholders.
Applicants will comply with all other requirements of rule 12d3-1.
Applicants will require each of the Investment Managers to
contractually agree to be bound by the terms of the conditions of the
application.

Applicants' Legal Analysis

    1. Section 12(d)(3) of the Act, with limited exceptions, prohibits
a registered investment company from purchasing or otherwise acquiring
any securities issued by any person who is a broker, a dealer, is
engaged in the business of underwriting, or is either an investment
adviser of a registered investment company or a registered investment
adviser. Rule 12d3-1 under the Act exempts the acquisition of
securities of an issuer that derived more than 15% of its gross
revenues in its most recent fiscal year from ``securities related
activities,'' provided that, among other things, immediately after the
acquisition of such issuer's equity or debt securities, (i) the
acquiring company has invested not more than 5% of the value of its
total assets in securities of the issuer and (ii) the acquiring company
owns (a) with respect to that class of the issuer's equity securities,
not more than 5% of the outstanding securities of that class or (b)
with respect to the issuer's debt securities, not more than 10% of the
outstanding principal amount of the issuer's debt securities. Section
6(c) of the Act provides that the Commission may conditionally or
unconditionally exempt any person, security or transaction from any
provision of the Act or any rule thereunder, if and to the extent that
such exemption is necessary or appropriate in the public interest and
consistent with the protection of investors and the purposes fairly
intended by the policy and provisions of the Act.
    2. The Applicants request an order pursuant to section 6(c) of the
Act exempting the Applicants from the provisions of section 12(d)(3) of
the Act to the extent necessary to permit the Applicants to invest in
the equity and debt securities of various Investment Managers, each an
issuer that derives more than 15% of its gross revenues from
``securities related activities,'' in excess of the quantitative
limitations set forth in rule 12d3-1(b).
    3. The Applicants state that section 12(d)(3) was intended (a) to
prevent investment companies from exposing their assets to the
entrepreneurial risks of securities related businesses, (b) to prevent
potential conflicts of interest and to eliminate certain reciprocal
practices between investment companies and securities related
businesses, and (c) to ensure that investment companies maintain
adequate liquidity in their portfolios.
    4. The Applicants believe that the Company's investment in various
Investment Managers does not raise the same type of entrepreneurial
risks that may have concerned Congress in enacting section 12(d)(3).
The Applicants state that the ownership structure of most securities
related businesses has changed since the time of enactment from
partnership to a corporate form resulting in the limited liability
status of these entities. In this case, the Company states that it will
invest only in Investment Managers organized as corporations or other
limited liability entities. The Applicants argue that shareholders
choosing to invest in the Company will have sought exposure to a
vehicle that that provides a non-diversified investment in one or more
Investment Managers, and the Company's shareholders will be informed of
the risks, including entrepreneurial risk, of investing in the Company
by disclosure in the Company's prospectus in connection with its
initial public offering and its ongoing disclosure as a public company
following the offering.
    5. The Applicants also believe that the proposed investments in
various Investment Managers will not create potential conflicts of
interest for the Applicants or their respective shareholders. One
potential conflict could occur if an investment company purchased
securities or other interests in a broker-dealer to reward that broker-
dealer for selling fund shares, rather than solely on investment merit.
The Applicants note that, as a condition to the granting of exemptive
relief, the Investment Managers and their affiliated persons within the
meaning of section 2(a)(3) of the Act and affiliated persons of such
affiliated persons (collectively, ``Affiliates'') and the clients of
the Investment Manager will not buy, sell or otherwise trade any
securities issued by the Applicants or any of its Affiliates.
    6. Applicant states that another potential conflict of interest is
that investment advisers could be influenced to recommend to their
clients certain investment companies that invest in

such investment adviser or its affiliates, thereby using the assets of
the investment companies to boost the price of the investment adviser's
securities. Applicant notes that, as a condition to the requested
order, the Investment Managers and their Affiliates will not sell any
securities issued by the Applicants as an underwriter, will not make a
market in any securities issued by the Applicants, will not act as
agent or a broker in connection with the sale of any shares of the
Applicants and will not recommend investing in securities of the
Applicants.
    7. The Applicants state that another purpose of section 12(d)(3) is
to prevent investment companies from directing brokerage to a broker-
dealer in which the investment company has invested to enhance the
broker-dealer's profitability or to assist it during financial
difficulty, even though that broker-dealer may not offer the best price
and execution. The Company represents that its business is to provide
specialized debt capital to Investment Managers. The Applicants also
represent that Investment Managers today typically do not serve as
underwriters and broker-dealers (except as noted above) and thus it is
highly unlikely that there would be any opportunity to engage in any
transaction with an Investment Manager or its Affiliates, other than
the Company's investment (and any follow-on investment) in such
Investment Manager. Further, as a condition to the requested order, the
Applicants will not use any Investment Manager or any Affiliate thereof
as a broker-dealer for the purchase or sale of any portfolio
securities.
    8. The Applicants also believe that section 12(d)(3) reflects a
concern with respect to the liquidity of an investment company's
portfolio. Because the shareholders that will invest in the Company
prior to its initial public offering (each of which will be intimately
familiar with the business of the Company) will have done so for the
specific purpose of buying and holding a vehicle that would provide for
an investment in Investment Managers, liquidity of the Company's
portfolio is not a concern for the Company's shareholders. Furthermore,
shareholders that invest in the Company during or following the initial
public offering will receive disclosure (i) in the Company's prospectus
in connection with its initial public offering and (ii) pursuant to its
ongoing reporting requirements as a public company following its
initial public offering. Such disclosure will describe the fact that
the Company's business (like that of business development companies
generally) is investing in illiquid investments of small, developing
companies, and more specifically, purchasing Notes in Investment
Managers. Moreover, the Company is a closed-end investment company that
does not offer redeemable securities; therefore, there are no minimum
liquidity standards applicable to the Company under the Act.
    9. Applicant believes that its proposed acquisitions of the
securities of various Investment Managers do not present the potential
for the risks and abuses section 12(d)(3) is intended to eliminate,
including the risk of reciprocal practices. The Applicants believe that
the standards set forth in section 6(c) have been met.

Applicants' Conditions

    The Applicants agree that the order granting the requested relief
will be subject to the following conditions:
    1. Neither of the Applicants and none of their respective
Affiliates will engage in any transaction with an Investment Manager
other than (i) the Company's investment in the Investment Manager (and
any follow-on investment) and (ii) the Company's providing managerial
assistance to an Investment Manager. The managerial assistance provided
by the Company or any of its Affiliates will not include any activity
involving any Investment Manager's investment process or investment
decisions.
    2. No Investment Manager or its Affiliates or client of an
Investment Manager or its Affiliates will (i) buy, sell or otherwise
trade securities issued by the Applicants or any of their respective
Affiliates, or (ii) buy, sell or otherwise trade securities owned by
the Applicants or any of their respective Affiliates in transactions
involving the Applicants or any of their respective Affiliates. Nor
will any Investment Manager or its Affiliates sell any securities
issued or owned by the Applicants or any of their respective Affiliates
as an underwriter, make a market in any securities issued or owned by
the Applicants or act as agent or as a broker in connection with the
sale of any securities issued or owned by the Applicants or any of
their respective Affiliates or recommend to their clients the purchase
of any such securities.
    3. Neither of the Applicants nor any of their respective Affiliates
will use any Investment Manager or any Affiliate thereof as a broker-
dealer for the purchase or sale of any portfolio securities.
    4. No Investment Manager or its Affiliates will provide any
services to the Applicants or any of their respective Affiliates.
    5. No officer of the Applicants or member of the Applicants' board
of managers (``Board'') will be affiliated with an Investment Manager
or its Affiliates. The Applicants, their respective Affiliates or their
officers or directors will not (i) serve on the board of directors of
an Investment Manager, (ii) participate in the management of an
Investment Manager (except for providing managerial assistance) or
(iii) have other indicia of control as defined in the Act (other than
typical rights of debt holders, including, but not limited to, access
to certain information). The only affiliation the Applicants (or any of
their respective officers or members) will have will be as a provider
of debt capital.
    6. The Applicants' respective Chief Compliance Officers will
monitor and report to the applicable Applicant's Board no less than
annually on compliance with these conditions.
    7. The Applicants will comply with the provisions of rule 12d3-1
under the Act, except for paragraph (b) solely to the extent necessary
to permit the Company to invest (i) more than 5% of the value of its
total assets in equity securities issued by a registered investment
adviser, (ii) in more than 5% of the outstanding equity securities of a
registered investment adviser, and (iii) in more than 10% of the
outstanding principal amount of a registered investment adviser's debt
securities, provided that, (aa) immediately after the Company makes an
investment permitted by (i) and/or (ii), not more than 50% of the value
of the Company's total assets will consist of investments permitted by
(i) and/or (ii), (bb) in no event will the Company acquire more than
25% of the outstanding voting securities of a registered investment
adviser or otherwise control a registered investment adviser, and (cc)
immediately after the Company makes an investment permitted by (iii),
not more than 10% of the value of the Company's total assets will
consist of investments permitted by (iii).\5\
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    \5\ For the purposes of this paragraph, the terms ``equity
security'' and ``debt securities'' have the meanings given them in
Rule 12d3-1.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-33859 Filed 1-5-12; 8:45 am]
BILLING CODE 8011-01-P


MEMORANDUM

DATE:		February 15, 2019

SUBJECT:	Proposed Requirement for Periodic Testing of Emission Capture Systems and Control Devices

FROM:		Barrett Parker, OAQPS/SPPD/MPG
            Paula Hirtz, OAQPS/SPPD/MMG

TO:			Surface Coating of Metal Cans and Metal Coil Dockets

      As part of an ongoing effort to improve compliance with various federal air emission regulations, the EPA reviewed the testing and monitoring requirements of the National Emission Standards for Hazardous Air Pollutants (NESHAP) for the Surface Coating of Metal Cans, 40 CFR part 63, Subpart KKKK (Metal Cans) and the Surface Coating of Metal Coil, 40 CFR part 63, Subpart SSSS (Metal Coil).

      The Metal Cans and Metal Coil NESHAP provide owners or operators with several options for demonstrating compliance with hazardous air pollutant (HAP) emission limits, including the use of compliant coatings, i.e., coatings with formulations meeting the NESHAP emission limits. Capture or add-on control devices are not needed for processes using these compliant coatings.

      If compliant coatings are not used, owners or operators have the option of using capture and add-on devices to demonstrate compliance, as listed in Table 4 of the Metal Cans NESHAP and Table 1 of the Metal Coil NESHAP. Such add-on HAP control devices include those associated with combustion (i.e., thermal oxidizers, regenerative oxidizers, and catalytic oxidizers), and recovery (i.e., carbon adsorbers, condensers, and concentrators (including absorbers)).   To demonstrate compliance with the HAP destruction or removal efficiencies required by the NESHAP, owners or operators choosing to use add-on control devices are also required to demonstrate 100 percent capture efficiency of the HAP-laden exhaust streams.

      Currently, the Metal Cans and Metal Coil NESHAP require owners or operators who choose to use capture and add-on control devices to comply with the rules to conduct a one-time initial performance test to demonstrate the destruction or removal efficiency test of the control device coupled with capture efficiency testing. No additional performance tests are required by the NESHAP; instead the NESHAP require the ongoing monitoring of operating parameters. The operating parameters to be monitored are identified during the one-time initial performance test (when the capture system and control device efficiencies are measured). In addition, the range of the operating parameters, typically associated with temperature or flow or both, is established during the initial testing. As long as the initial performance test demonstrates the NESHAP required capture and HAP destruction/recovery efficiencies, then operation in accordance with the operating parameters established at that time is accepted as ongoing compliance with HAP emission limits.
      Although ongoing monitoring of operating parameters is required by the NESHAP and is conducted by owners or operators, as the control device ages over time, the destruction efficiency of the control device can be compromised due to various factors. The EPA published several documents that identify potential control device operational problems that could decrease emission reduction efficiency, including, but not limited to: corrosion due to halogens in HAP exhaust for thermal oxidizers, catalyst deactivation or poisoning for catalytic oxidizers, leaking valves for regenerative oxidizers, adsorbent plugging and fouling for adsorbers, and changing waste stream temperatures and absorption characteristics for condensers and concentrators (see Control Technologies for Hazardous Air Pollutants, EPA/625/6-91/014, June 1991, available at https://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey =30004CRL.PDF; Control Technologies for Volatile Organic Compound Emissions from Stationary Sources, EPA 453/R-92-018, December 1992, available at https://nepis.epa.gov/ Exe/ZyPDF.cgi?Dockey=2000HI7Q.PDF; and Survey of Control Technologies for Low Concentration Organic Vapor Gas Streams, EPA-456/R-95-003, May 1995, available at https://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=2000F17T.PDF).
      The Institute of Clean Air Companies (ICAC), an industry trade group currently representing 50 emission control device equipment manufacturers, corroborated the fact that control equipment degrades over time in their comments in a prior rulemaking. In their comments, ICAC included information about potential control device operational problems and case histories in which control device degradation or failure led to CAA violations and enforcement actions. ICAC also stated that emissions control systems are complex, consisting of chemical, electrical, and mechanical devices that can fail in each of these component areas, if not adequately maintained. ICAC discussed the causes of degradation for devices commonly used for HAP control, providing examples for thermal and catalytic oxidizers. ICAC stated that extreme operating temperatures, the corrosive nature of chemical-laden air, exposure to weather, and the wear and tear of non-stop use affects thermal oxidizers such that, left unchecked, the corrosive nature of the HAP-laden gases will create equipment downtime, loss of operational efficiency, and eventual failure of the thermal oxidizer. Moreover, ICAC stated that catalysts from catalytic oxidizers need to be checked periodically to verify the activity of the catalyst because the overall ability of the catalyst to convert target emissions to other by-products will naturally diminish over time.

      Routine maintenance checks and preventative maintenance procedures are specified by the equipment manufacturers to maintain optimal performance of the control device. These procedures are required to be conducted weekly, monthly, semi-annually, and annually and include all components of the control device. ICAC stated that it is more expensive to operate an oxidizer at optimal performance, and if not maintained, performance will deteriorate yielding less destruction of HAP. ICAC also stated that maintenance of the electrical components ensures the combustion temperature, and therefore, the destruction efficiency, is maintained. ICAC also stated that mechanically, failure of a fan bearing, a burner, or a heat exchanger would result in higher emission levels.

      Operational changes after the initial performance test also may affect the destruction efficiency of the control device. These changes include but are not limited to: ongoing reformulation of coatings that change the chemistry of the flue gases; changes in production capacity (i.e., addition, expansion, redistribution, or removal of coating lines); switching of fuels; and improper maintenance leading to the gradual degradation of the capture and/or control device.

      The EPA also recently reviewed emission violations in Ohio and Massachusetts by owners and operators of sources that did not achieve compliance even though they maintained the operating parameter values (in these cases, thermal oxidizer operating temperatures) that were established during previous performance tests. As shown in Table 1 below, subsequent performance tests resulted in diminished emission reduction efficiencies, possibly as a result of control device degradation due to elevated temperatures and/or other factors identified above.

Table 1  -  Facilities in Ohio and Mass that Met Previously-set Temperature Limits but Failed to Meet Destruction Efficiency (DE) Requirements
                                    Source
                                Control Device
                         Average Oxidizer Temp (ºF)
                                Required DE (%)
                          DE measured during Test (%)
A (Ohio)
                               Thermal oxidizer
                                     1540
                                      95
                                     88.4
A (Ohio)
                               Thermal oxidizer
                                     1572
                                      95
                                     49.3
B (Ohio)
                               Thermal oxidizer
                                     1537
                                      98
                                      63
C (Ohio)
                               Thermal oxidizer
                                     1326
                                      90
                                     87.7
D (Massachusetts)
                               Thermal oxidizer
                                     1500
                                      98
                                      96

      As a result of these findings and in order to improve compliance with the Metal Can and Metal Coil NESHAP, the EPA proposes to require owners or operators who choose to demonstrate facility compliance with the standards by using emission capture systems and add-on controls to conduct periodic air emissions performance testing, with the first of the periodic performance tests to be conducted within 3 years of the effective date of the revised standards and thereafter no longer than 5 years following the previous performance test. The 5-year period corresponds to the renewal period for title V air operating permits required under 40 CFR part 70 or 71.

      We recognize that ongoing periodic performance tests are already required by some state and local permitting authorities for facilities subject to these regulations. These state and local requirements satisfy the NESHAP requirements as long as the performance tests are conducted at least every 5 years. The addition of a periodic performance testing requirement to these federal regulations will require all facility owners or operators to conduct periodic testing, reestablish operating limits if needed, and ensure that capture and control systems are properly maintained over time, thereby reducing the potential for acute emissions episodes or non-compliance. The EPA expects periodic testing of the actual destruction efficiency (versus the monitoring of operating parameters) could result in the increase of the operating temperature to compensate for oxidizer inefficiency, or if the required destruction efficiency cannot be achieved, additional oxidizer maintenance will be conducted, supplemental control will be installed, or replacement of the oxidizer will be required.