[Federal Register Volume 78, Number 247 (Tuesday, December 24, 2013)]
[Proposed Rules]
[Pages 77621-77628]
[FR Doc No: 2013-30729]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2011-0528; FRL--9904-67--Region 6]

Approval and Promulgation of Implementation Plans; Texas;
Revisions to the New Source Review (NSR) State Implementation Plan
(SIP); Standard Permit for Oil and Gas Facilities and Standard Permit
Applicability

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve revisions to the Texas New Source
Review (NSR) State Implementation Plan (SIP) submitted by the Texas
Commission on Environmental Quality (TCEQ) on September 20, 1995; April
19, 1996; July 22, 1998; and September 11, 2000. These revisions to the
Texas SIP establish the Standard Permit for Installation and/or
Modification of Oil and Gas Facilities. EPA also proposes to approve
non-substantive revisions to the Texas Standard Permit SIP rules
relating to applicability, submitted on February 1, 2006, and March 11,
2011. EPA proposes to find that these revisions to the Texas SIP comply
with the Federal Clean Air Act (the Act or CAA) and EPA regulations and
are consistent with EPA policies. EPA is proposing these actions under
section 110 of the Act.

DATES: Comments must be received on or before January 23, 2014.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R06-
OAR-2011-0528, by one of the following methods:
     www.regulations.gov. Follow the on-line instructions for
submitted comments.
     Email: Ms. Adina Wiley at<EMAIL_ADDRESS>     Mail or delivery: Ms. Adina Wiley, Air Permits Section
(6PD-R), Environmental Protection Agency, 1445 Ross Avenue, Suite 1200,
Dallas, Texas 75202-2733.
    Instructions: Direct your comments to Docket ID No. EPA-R06-OAR-
2011-0528. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
http://www.regulations.gov, including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information the
disclosure of which is restricted by statute. Do not submit information
through http://www.regulations.gov or email, if you believe that it is
CBI or otherwise protected from disclosure. The http://www.regulations.gov Web site is an ``anonymous access'' system, which
means that EPA will not know your identity or contact information
unless you provide it in the body of your comment. If you send an email
comment directly to EPA without going through http://www.regulations.gov, your email address will be automatically captured
and included as part of the comment that is placed in the public docket
and made available on the Internet. If you submit an electronic
comment, EPA recommends that you include your name and other contact
information in the body of your comment along with any disk or CD-ROM
submitted. If EPA cannot read your comment due to technical
difficulties and cannot contact you for clarification, EPA may not be
able to consider your comment. Electronic files should avoid the use of
special characters and any form of encryption and should be free of any
defects or viruses. For additional information about EPA's public
docket, visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: The index to the docket for this action is available
electronically at www.regulations.gov and in hard copy at EPA Region 6,
1445 Ross Avenue, Suite 700, Dallas, Texas. While all documents in the
docket are listed in the index, some information may be publicly
available only at the hard copy location (e.g., copyrighted material),
and some may not be publicly available at either location (e.g., CBI).
To inspect the hard copy materials, please schedule an appointment with
the person listed in the FOR FURTHER INFORMATION CONTACT paragraph
below or Mr. Bill Deese at<PHONE_NUMBER>.
    The State submittal related to this SIP revision, and which is part
of the EPA docket, is also available for public inspection at the State
Air Agency listed below during official business hours by appointment:
    The State submittals, which are part of the EPA docket, are also
available for public inspection at the State Air Agency during official
business hours by appointment: Texas Commission on Environmental
Quality, Office of Air Quality, 12124 Park 35 Circle, Austin, Texas
78753.

FOR FURTHER INFORMATION CONTACT: Ms. Adina Wiley, Air Permits Section,
telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>; email
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:
    Throughout this document, the following terms have the meanings
described below:
     ``we,'' ``us,'' and ``our'' refer to EPA.
     ``Act'' and ``CAA'' means Clean Air Act.
     ``40 CFR'' means Title 40 of the Code of Federal
Regulations--Protection of the Environment.
     ``SIP'' means State Implementation Plan as established
under section 110 of the Act.
     ``NSR'' means new source review, a phrase intended to
encompass the statutory and regulatory programs that regulate the
construction and modification of stationary sources as provided under
CAA section 110(a)(2)(C), CAA Title I, parts C and D, and 40 CFR 51.160
through 51.166.
     ``Minor NSR'' means NSR established under section 110 of
the Act and 40 CFR 51.160.
     ``NNSR'' means nonattainment NSR established under Title
I, section 110 and part D of the Act and 40 CFR 51.165.
     ``PSD'' means prevention of significant deterioration of
air quality established under Title I, section 110 and part C of the
Act and 40 CFR 51.166.
     ``Major NSR'' means any new or modified source that is
subject to NNSR and/or PSD.
     ``TSD'' means the Technical Support Document for this
action.
     ``NAAQS'' means national ambient air quality standards
promulgated under section 109 of that Act and 40 CFR part 50.
     ``TCEQ'' means ``Texas Commission on Environmental
Quality.''

Table of Contents

I. What action is EPA proposing?
II. What has the State submitted?
III. EPA's Evaluation
IV. Proposed Action
V. Statutory and Executive Order Reviews

I. What action is EPA proposing?

    EPA is proposing to approve four submittals from the State of Texas
as revisions to the Texas New Source Review (NSR) State Implementation
Plan (SIP) that incorporate the Standard Permit for Installation and/or
Modification of Oil and Gas Facilities (hereafter referred to as the
``Oil and Gas Standard Permit''). Texas initially submitted the
Standard Permit provisions on September 20, 1995, and submitted
subsequent revisions to those provisions on April 19, 1996; July 22,
1998; and September 11; 2000. We also are proposing to approve
submittals from the State of Texas as a revision to the NSR SIP that
contain non-substantive changes to the applicability provisions of the
Standard Permits SIP permitting program. Texas submitted revisions to
the Standard Permit applicability provisions on February 1, 2006 and
resubmitted them on March 11, 2011.
    We have evaluated the SIP submissions for whether they meet the Act
and 40 CFR part 51, and are consistent with EPA's interpretation of the
relevant provisions. Based upon our evaluation, EPA has concluded that
the SIP revision submittals for the Oil and Gas Standard Permit and the
non-substantive revisions to the Standard Permit applicability
provisions meet the applicable requirements of the Act and 40 CFR part
51. Therefore, EPA is proposing to approve the provisions of

the submittals relating to the Oil and Gas Standard Permit SIP
revisions and to the Standard Permit applicability provisions. EPA is
proposing this action under section 110 of the Clean Air Act (CAA).

II. What has the State submitted?

A. Submittals Relating to the Oil and Gas Standard Permit

    The TCEQ has developed and submitted the Oil and Gas Standard
Permit as a revision to the Texas Minor NSR permit program. The
Standard Permit was initially developed by TCEQ in 1995, and TCEQ has
adopted subsequent amendments and submitted these as revisions to the
Texas SIP since that time. As discussed in Section I of this
rulemaking, EPA is proposing approval of the Oil and Gas Standard
Permit--from the date of the initial submittal, dated September 20,
1995, through the September 11, 2000 SIP revision. This Section
contains a brief summary of each of the SIP revisions pertaining to the
Oil and Gas Standard Permit that is subject to our proposed approval.
i. September 20, 1995 SIP Submittal
    On July 26, 1995, the Texas Natural Resources Conservation
Commission (TNRCC) \1\ adopted revisions to the state regulations to
establish the Oil and Gas Standard Permit. The Standard Permit was
adopted at Title 30 of the Texas Administrative Code (30 TAC) Chapter
116.617(3). Note that the September 20, 1995 SIP submittal contained
additional, severable, revisions to 30 TAC Chapter 116, which are not
addressed as part of this rulemaking.
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    \1\ TNRCC is the predecessor agency of the TCEQ.
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ii. April 19, 1996 SIP Submittal
    On March 27, 1996, the TNRCC adopted amendments to the state
regulations to delete 30 TAC 116.617(3)--Installation and/or
Modification of Oil and Gas Facilities and move the Standard Permit to
30 TAC 116.620. The Standard Permit previously contained in 30 TAC
116.617(3) was moved and renumbered to conform these sections to Texas
Register style conventions and to allow ease in revising the section in
the future. Note that the April 19, 1996 SIP submittal contained
additional, severable, revisions to 30 TAC Chapter 116, which are not
addressed as part of this rulemaking.
iii. July 22, 1998 SIP Submittal
    On June 17, 1998, the TNRCC adopted amendments to the state
regulations that included amendments to 30 TAC 116.620. These revisions
added a requirement that sources subject to National Emission Standards
for Hazardous Air Pollutants (NESHAPs) show compliance with Maximum
Achievable Control Technology (MACT) standards, and also made non-
substantive changes. Note that the July 22, 1998 SIP submittal
contained additional, severable, revisions to 30 TAC Chapter 116, which
are not addressed as part of this rulemaking.
iv. September 11, 2000 SIP Submittal
    On August 9, 2000, the TNRCC adopted amendments to the state
regulations that included amendments to 30 TAC 116.620. These revisions
made non-substantive changes. Note that the September 11, 2000 SIP
submittal contained additional, severable, revisions to 30 TAC Chapters
101 and 116, which are not addressed as part of this rulemaking.

B. Relating to Standard Permit Applicability Provisions

i. February 1, 2006 SIP Submittal
    On January 11, 2006, the TCEQ adopted revisions to the Standard
Permit SIP rules, which made non-substantive changes to the
applicability provisions in 30 TAC 116.610(a) and (b). Note that the
February 1, 2006 SIP submittal contained additional, severable,
revisions to 30 TAC Chapter 116, which are not addressed as part of
this rulemaking.
ii. March 11, 2011 SIP Submittal
    On March 11, 2011, the same changes that were submitted on February
1, 2006, to 30 TAC 116.610(a) and (b) were resubmitted. Note that the
March 11, 2011 SIP submittal contained additional, severable, revisions
to 30 TAC Chapter 116, which are not addressed as part of this
rulemaking.

                       Table 1--Summary of Pending SIP Submittals Addressed in This Action
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                                                                            Sections related to standard permit
        Date submitted to EPA          Date adopted by   Date effective    for installation and/or modification
                                            State         as State rule         of oil  and gas facilities
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9/20/1995...........................         7/26/1995          9/1/1995  Submittal of new Section 116.617(3).
4/19/1996...........................         3/27/1996         4/19/1996  Deletion of Section 116.617(3);
                                                                           Standard Permit moved and renumbered
                                                                           to new Section 116.620 to conform to
                                                                           Texas Register style conventions.
7/22/1998...........................         6/17/1998          7/8/1998  Revisions to Section 116.620.
9/11/2000...........................          8/9/2000          9/4/2000  Revisions to Section 116.620.
02/01/2006..........................        01/11/2006        02/01/2006  Revisions to Section 116.610.
03/11/2011..........................        01/11/2006        02/01/2006  Revisions to Section 116.610.
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                     Table 2--Summary of the Individual Revisions to Each Section Evaluated
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                                             Date
            Section--title               submitted  to   Date adopted   Date effective          Comments
                                              EPA          by State      as State rule
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          30 TAC Chapter 116--Control of Air Pollution by Permits for New Construction or Modification
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                                         Subchapter F--Standard Permits
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Section 116.610--Standard Permit              02/01/06        01/11/06        02/01/06   Non-substantive
 Applicability.                                                                          changes to 116.610(a).
                                                                                Non-substantive
                                                                                changes to 116.610(b).
                                              03/11/11        01/11/06        02/01/06  Resubmittal of the
                                                                                January 11, 2006
                                                                                adopted changes to
                                                                                116.610(a) and (b).
Section 116.617--Standard Permit List.       9/20/1995       7/26/1995        9/1/1995  Initial adoption of
                                                                                Standard Permit at
                                                                                116.617(3).

                                             4/19/1996       3/27/1996       4/19/1996  Deletion of 116.617(3).
Section 116.620--Installation and/or         4/19/1996       3/27/1996       4/19/1996  Initial adoption of this
 Modification of Oil and Gas                                                             section; Standard
 Facilities.                                                                             Permit moved from
                                                                                116.617(3).
                                             7/22/1998       6/17/1998        7/8/1998   116.620(a)(4)
                                                                                removed reference to
                                                                                standard exemption (SE)
                                                                                6 and replaced with
                                                                                reference to PBR
                                                                                106.512.
                                                                                116.620(a)(13)
                                                                                was updated to include
                                                                                reference to case-by-
                                                                                case MACT review under
                                                                                Subchapter C.
                                                                                116.620(a)(14)
                                                                                was subdivided into
                                                                                sections 116.620(a)(14)-
                                                                                (15).
                                                                                116.620(a)(16)
                                                                                was added to require
                                                                                sources subject to
                                                                                NESHAPs to show
                                                                                compliance with MACT
                                                                                standards.
                                                                                116.620(a)(15)-
                                                                                (16) were renumbered to
                                                                                (17) and (18).
                                                                                116.620(b)(1)
                                                                                removed reference to SE
                                                                                83 and replaced with
                                                                                reference to PBR
                                                                                106.476.

                                                                                116.620(c)(1)(A) uses
                                                                                EPA acronym in place of
                                                                                formal name.

                                                                                116.620(c)(1)(J) adds
                                                                                ``Permits'' to division
                                                                                name.

                                                                                116.620(c)(2)(J) adds
                                                                                ``Permits'' to division
                                                                                name.
                                                                                116.620(d)(3)
                                                                                changes office name.
                                                                                116.620(e)(1)
                                                                                changes office name and
                                                                                removes ``his or her
                                                                                designated
                                                                                representative''.
                                             9/11/2000        8/9/2000        9/4/2000   116.620(a)(4)
                                                                                eliminated the
                                                                                parenthetical reference
                                                                                to the former standard
                                                                                exemption 6.
                                                                                116.620(a)(11)
                                                                                eliminated parentheses
                                                                                around H2S.
                                                                                116.620(b)(1)
                                                                                eliminated the
                                                                                parenthetical reference
                                                                                to previous SE 83.
                                                                                116.620(b)(E)
                                                                                eliminated reference to
                                                                                ``exemptions'' and now
                                                                                refers to ``permits by
                                                                                rule'' consistent with
                                                                                the other rule language
                                                                                updates.

                                                                                116.620(c)(1)(J)
                                                                                changes office name.
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C. Overview of the Oil and Gas Standard Permit

    EPA approved Texas' general regulations for Standard Permits in 30
TAC Subchapter F of 30 TAC Chapter 116 on November 14, 2003 (68 FR
64543) as meeting the federal requirements for Minor NSR.\2\ The
November 14, 2003, action describes how those rules meet EPA's
requirements for new minor sources and minor modifications. A Standard
Permit is a minor NSR permit that is adopted under Chapter 116,
Subchapter F. Subchapter F provides an alternative process for
approving the construction of certain categories of new and modified
sources for which TCEQ has adopted a Standard Permit. These provisions
provide for a streamlined minor NSR mechanism for authorizing the
construction of certain sources within source categories for which TCEQ
has adopted a Standard Permit. A Standard Permit is not available to a
facility or group of facilities that undergo a change that constitutes
a new major source or major modification under Title I of the Act, part
C (Prevention of Significant Deterioration of Air Quality) or part D
(Nonattainment Review). Such major source or major modification must
comply with the applicable permitting requirements under Chapter 116,
Subchapter B, which meet the new source review requirements in Title I,
part C or part D of the Act. A facility that qualifies for a minor NSR
Standard Permit must also comply with all applicable provisions of
section 111 of the Act (NSPS) and section 112 of the Act (NESHAP).
Furthermore, a facility that qualifies for a minor NSR Standard Permit
must comply with all rules and regulations of TCEQ.
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    \2\ EPA did not approve the Standard Permit for Installation
and/or Modification of Oil and Gas Facilities in the November 14,
2003, action as part of the Texas SIP (68 FR 64543, at 64547).
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    A Standard Permit is not a case-by-case Minor NSR SIP permit, but
rather it is a streamlined mechanism with all permitting requirements
for construction and operation of a certain source category. Therefore,
each Standard Permit approved in a SIP should contain all terms and
conditions on the face of it (combined with the SIP general
requirements), and it should not be used to address site-specific
determinations.
    The Oil and Gas Standard Permit was developed to provide a
streamlined permitting process for oil and gas facilities. The Standard
Permit contained in 30 TAC 116.620 simplifies the permit review process
for these facilities by establishing standardized

conditions applicable to the oil and gas industry, which help to
streamline the agency review process and allow more rapid approval than
would be possible under case-by-case minor NSR review permitting.
    The standardized conditions contained in the Oil and Gas Standard
Permit include emission specifications, control requirements,
inspection requirements, approved test methods provisions, and
monitoring and recordkeeping requirements. In addition, a source
applying for authorization under 30 TAC 116.620 must also meet the
applicable requirements contained in the other Sections under 30 TAC
Chapter 116, Subchapter F--Standard Permits, which include registration
and fee requirements and general permit conditions for Standard
Permits. In accordance with 30 TAC 116.610(b), the Oil and Gas Standard
Permit is limited to Minor NSR and cannot be used to authorize a
project that constitutes a new major stationary source or major
modification. Therefore, as discussed in the following section, the Oil
and Gas Standard Permit provisions are evaluated with respect to the
applicable Minor NSR requirements.
    As previously mentioned, the Oil and Gas Standard Permit includes
standardized conditions for the emission units located at oil and gas
facilities that may be authorized by the Standard Permit. The types of
emission units that may be authorized by the Standard Permit are the
following:
     Internal combustion engines (ICEs),
     Natural gas turbines (NG turbines),
     Flares,
     Other combustion units (design heat input > 40 million Btu
per hour),
     Natural gas glycol dehydration units,
     Storage tanks,
     Separators,
     Condensers,
     Vapor recovery units,
     Process vents, and
     Process fugitives.
    In order for one of the previously-listed emission units to be
authorized by the Standard Permit, that unit must meet the applicable
unit-specific standardized conditions, and, the oil and gas facility as
a whole must meet any applicable site-wide standardized conditions
contained in the Standard Permit. If a proposed project at an oil and
gas facility includes any emission units that are not explicitly
covered by the Oil and Gas Standard Permit, the permit applicant would
turn to another type of Standard Permit authorization or a permit-by-
rule (PBR) or, if necessary, case-by-case NSR permitting for
authorization. For example, the Oil and Gas Standard Permit does not
provide authorization for cooling towers. Therefore, an oil and gas
facility with a cooling tower on-site would not be able to use the Oil
and Gas Standard Permit to authorize the emissions from that emission
unit, but could rely upon the separate cooling tower SP or PBR.\3\ Any
other emission units not specifically authorized under the Oil and Gas
Standard Permit also could obtain authorization through either a SP or
PBR that explicitly addresses it or obtain a case-by-case minor NSR
permit. In addition to cooling towers, other examples of emission units
that may be found at oil and gas facilities that are not covered by the
Oil & Gas Standard Permit include, but are not limited to, truck
loading emissions, heat exchangers, amine sweetening units, and sulfur
recovery units. If EPA discovers evidence to support the determination
that the TCEQ were found to be misapplying the Oil and Gas Standard
Permit or a permittee obtained authorization under this Standard Permit
for emission units that are outside the scope of 116.620, then EPA or
the public could address this implementation failure on a permit
specific basis or other CAA remedy mechanism, such as a finding of
failure to implement.
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    \3\ For example, cooling towers, including those located at oil
and gas facilities, that meet all of the applicable PBR requirements
may be authorized under the SIP-approved Cooling-Water Unit PBR
found at 30 TAC 116.371.
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III. EPA's Evaluation

    The Act at Section 110(a)(2)(C) requires states to develop and
submit to EPA for approval into the state SIP, preconstruction review
and permitting programs applicable to certain new and modified
stationary sources of air pollutants for attainment and nonattainment
areas that cover both major and minor new sources and modifications,
collectively referred to as the NSR SIP. The CAA NSR SIP program is
composed of three separate programs: Prevention of Significant
Deterioration (PSD), Nonattainment New Source Review (NNSR), and Minor
NSR. PSD is established in part C of title I of the CAA and applies in
areas that meet the NAAQS--``attainment areas''--as well as areas where
there is insufficient information to determine if the area meets the
NAAQS--``unclassifiable areas.'' The NNSR SIP program is established in
part D of title I of the CAA and applies in areas that are not in
attainment of the NAAQS--``nonattainment areas.'' The Minor NSR SIP
program addresses construction or modification activities that do not
emit, or have the potential to emit, beyond certain major source/major
modification thresholds and thus do not qualify as ``major'' and
applies regardless of the designation of the area in which a source is
located. Any submitted SIP revision, including revisions to a Minor NSR
program, must meet the applicable requirements for SIP elements in
section 110 of the Act, and be consistent with all applicable statutory
and regulatory requirements.
    EPA regulations governing the criteria that states must satisfy for
EPA approval of the NSR programs as part of the SIP are contained in 40
CFR Sections 51.160-51.166. Regulations specific to Minor NSR programs
are contained in 40 CFR Section 51.160-51.164. The TCEQ has developed
the Oil and Gas Standard Permit as a component of the Texas Minor NSR
program; therefore we will evaluate the Standard Permit as submitted on
September 20, 1995; April 19, 1996; July 22, 1998; and September 11,
2000, against the federal requirements for Minor NSR programs.
    40 CFR Section 51.160 establishes the requirements that all Minor
NSR programs must meet. We will address these specific requirements in
Section III.A. 40 CFR Section 51.161 establishes the public notice
requirements for Minor NSR programs. We will address the public notice
requirements more fully in Section III.B. Section 51.160-51.164
requires that a SIP revision demonstrate that the adopted rules will
not interfere with any applicable requirement concerning attainment and
reasonable further progress, or any other applicable requirement of the
CAA. We will address the specific requirements for permitting
activities that ensure attainment more fully in Section III.C.

A. EPA's Evaluation of Requirements for Minor NSR

    EPA's regulations addressing a Minor NSR program as part of a
state's SIP are included at 40 CFR 51.160, which applies to all
programs under Title I of the CAA. These provisions of a Minor NSR
program must provide that the permitting authority will not permit the
construction of a facility or modification that will cause a violation
of applicable portions of the control strategy or interfere with
attainment or maintenance of a NAAQS. To accomplish this goal, the
state's Minor NSR program must include the means by which the state
agency will review and take final action on proposed new construction
or modification to be protective of the control strategy and NAAQS. As
stated in 40 CFR 51.160, all NSR programs, including the Minor

NSR program, must include legally enforceable \4\ procedures that meet
the following requirements:
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    \4\ A requirement is ``legally enforceable'' if some authority
has the right to enforce the restriction. 67 FR 80186, at 80190.
---------------------------------------------------------------------------

     Provide for the submission, by the owner or operator of
the building, facility, structure or installation to be constructed or
modified of such information on the nature and amounts of emissions to
be emitted by it or emitted by associated mobile sources; and the
design, construction and operation of such facility, building,
structure, or installation as may be necessary to allow the permitting
authority to make a determination on approvability. 40 CFR 51.160(c).
     The Minor NSR program must provide that approval of any
construction or modification must not affect the responsibility of the
owner or operator to comply with applicable portions of the control
strategy. 40 CFR 51.160(d).
     The Minor NSR program must include procedures to identify
the types and sizes of facilities, buildings, structures, or
installations which will be subject to review. The Minor NSR program
must also discuss the basis for determining which facilities will be
subject to review. 40 CFR 51.160(e).
     The Minor NSR program must also discuss the air quality
data and the dispersion or other air quality modeling used to meet the
NSR requirements. 40 CFR 51.160(f).
    The SIP submittals being evaluated as part of this rulemaking are
for a Standard Permit that is submitted as part of Texas's Minor NSR
program; therefore, the provisions from the Oil and Gas Standard Permit
are evaluated against the federal requirements for Minor NSR and in
conjunction with the existing SIP-approved provisions of the Standard
Permitting Program found in 30 TAC Chapter 116, Subchapter F--Standard
Permits that provides the basic requirements that a facility must meet
to qualify for a Standard Permit.
    Based on our evaluation, we propose to find that the Oil and Gas
Standard Permit provisions found in 30 TAC 116.620 provide for the
necessary procedures and applicable requirements that are required for
Minor NSR programs. Our evaluation is summarized below with additional
details regarding our evaluation available in the TSD accompanying this
rulemaking.
    In accordance with 30 TAC 116.611, sources seeking authorization
via the Oil and Gas Standard Permit are required to submit a Standard
Permit registration to TCEQ, which is to include information regarding
the proposed project to be authorized (e.g., emission estimates,
description of project and related process, description of equipment
being installed). 30 TAC 116.615 includes general conditions that must
be met by sources authorized via a Standard Permit, including the Oil
and Gas Standard Permit. These general conditions specifically require
that sources authorized under a Standard Permit comply with all
``rules, regulations, and orders of the commission issued in conformity
with the [Texas Clean Air Act].'' See 30 TAC 116.615(10). In the case
where more than one state or federal rule of regulation or permit
condition are applicable, the source must comply with the most
stringent requirement or limit. See 30 TAC 116.615(10). Therefore, the
conditions of the Standard Permit in no way supersede or relax other
applicable state or federal requirements. In addition, the provisions
found in the Oil and Gas Standard Permit under 30 TAC 116.620 also
require that sources authorized under the Standard Permit submit
appropriate documentation to demonstrate compliance with state and
federal provisions, including PSD, NNSR, NSPS, and NESHAP. The Standard
Permit also requires that new or increased emissions authorized under
the permit shall not cause or contribute to a violation of any NAAQS
and references that engineering judgment and/or air dispersion modeling
may be used to demonstrate NAAQS compliance for the specific minor
construction project. See 30 TAC 116.620(a)(13)-(17). Regarding
testing, recordkeeping, reporting and monitoring provisions, the Oil
and Gas Standard Permit contains provisions that include these
requirements for the emission sources that can be authorized under the
Standard Permit. See 30 TAC 116.620(c)-(e). As discussed in Section I.E
of this rulemaking and the accompanying TSD, the Oil and Gas Standard
Permit may be used to authorize only those emission sources that are
specifically covered by the Standard Permit provisions. Therefore, the
Standard Permit contains testing, recordkeeping, reporting and
monitoring provisions for the covered emission sources as necessary to
ensure compliance with applicable requirements for those covered
sources.
    Based on our evaluation of the proposed provisions found in the
Standard Permit, in conjunction with the underlying SIP-approved
provisions of the Texas Standard Permitting Program found in Chapter
116, Subchapter F, we propose to find that the Oil and Gas Standard
Permit meets the requirements that are applicable to Minor NSR.

B. EPA's Evaluation of Public Availability of Information Requirements
for Minor NSR

    Federal requirements for public notice of Minor NSR programs are
found at 40 CFR 51.160 and 51.161. The procedures for a Minor NSR
program in 40 CFR 51.160 require an opportunity for public comment on
information submitted by the permit applicant and on the permitting
authority's analysis of the application, submitted materials and
proposed approval or disapproval of the permit application. EPA further
explains at 40 CFR 51.161(b) that opportunity for public comment is, at
a minimum, the availability for public inspection in at least one
location in the area affected of the information submitted by the
owner/operator and of the permitting authority's analysis of the effect
on air quality; a 30-day period for submittal of public comment; and a
notice by prominent advertisement in the area affected of the location
where the public can see the submitted materials and analysis. The SIP
submittals being evaluated as part of this rulemaking are for a
Standard Permit; therefore, the provisions from the Oil and Gas
Standard Permit are evaluated against the federal requirements
regarding public notice in conjunction with the existing SIP-approved
provisions of the Standard Permits Program found in 30 TAC Chapter 116,
Subchapter F--Standard Permits that provides the basic requirements
that a facility must meet to qualify for a Standard Permit, including
public participation requirements. See 30 TAC 116.603.
    Based on our evaluation, we propose to find that the SIP's general
provisions for all Standard Permits found at 30 TAC 116.603 apply to
the Oil and Gas Standard Permit. These general provisions were found to
meet EPA's requirements for public participation for minor NSR permits
and in some cases are more stringent. (73 FR 53716, September 17,
2008). As required by 30 TAC 116.603, a Standard Permit must comply
with the following public notice requirements:
     Notice of a proposed Standard Permit is required to be
published in the Texas Register, the commission's publicly accessible
electronic media, and in a daily or weekly newspaper of general
circulation in the area affected by the activity that is subject to the
proposed permit. If the proposed

standard permit will have statewide applicability, notice will be
published in the daily newspaper of largest general circulation within
each of the following metropolitan areas: Austin, Dallas, and Houston
and any other regional newspapers designated by the executive director
on a case-by-case basis. Additionally, the commission will publish
notice in the Texas Register and issue a press release;
     The notice must provide for a public comment period on the
proposed Standard Permit of at least 30 days;
     A public meeting is required to be held to provide an
additional opportunity for public comment;
     Written responses must be prepared to all public comments
received from the public related to the issuance of a Standard Permit,
which will be made available to the public;
     Notice of the final action on the proposed Standard Permit
is required to be published in the Texas Register, including the text
of the response to comments; and
     Copies of the final issued Standard Permit along with the
response to public comments received on the draft permit are required
to be made available at the TCEQ Austin office and appropriate TCEQ
regional offices.

Subsequent amendments or revocation of an issued Standard Permit must
also meet the public notice procedures contained in Section 603, as
required by 30 TAC 116.605.
    Based on our evaluation of the proposed provisions found in the Oil
& Gas Standard Permit, as well as the underlying SIP-approved
provisions of the Texas Standard Permitting Program found in Chapter
116, Subchapter F, we propose to find that the Oil and Gas Standard
Permit meets the federal public notice requirements that are applicable
to Minor NSR for those emission sources that are specifically covered
by the Standard Permit provisions. In addition, Texas has provided
documentation within their SIP revision submittals to document that the
SIP-approved public notice process was followed consistent with the 30
TAC 116.603 requirements when the Oil and Gas Standard Permit was
initially issued and subsequently amended. The SIP submittals are
available in the docket accompanying this rulemaking.

C. EPA's Evaluation of the Oil and Gas Standard Permit With Respect to
Attainment, Reasonable Further Progress, and Other Applicable
Requirements of the Act

    Under Section 110(l), the regulations submitted as SIP revisions
establishing the Oil and Gas Standard Permit must meet the procedural
requirements of Section 110(l) by demonstrating that the State followed
all necessary procedural requirements such as providing reasonable
notice and public hearing of the SIP revision. Additionally, the SIP
revision must demonstrate that the adopted rules will not interfere
with any applicable requirement concerning attainment and reasonable
further progress, or any other applicable requirement of the CAA. We
propose to find that the TCEQ satisfied all procedural requirements
pursuant to Section 110(l) as detailed in our accompanying TSD.
    A Minor NSR program is a requirement of the CAA and EPA's
regulations at 40 CFR 51.160-51.164. As discussed in this proposed
action and in the accompanying TSD, EPA proposes that the Oil and Gas
Standard Permit as submitted on September 20, 1995, and revised through
SIP submittals dated April 19, 1996; July 22, 1998; and September 11,
2000, satisfies the minimum requirements for a Minor NSR program,
including adequate provisions for legal enforceability and public
participation to ensure protection of the control strategy and any
applicable NAAQS. The Oil and Gas Standard Permit also contains
sufficient safeguards to prevent circumvention of Major NSR permitting
requirements. Therefore, we propose that the Oil and Gas Standard
Permit is protective of the NAAQS and applicable control strategy
requirements and satisfies the requirements of 110(l) of the Act.

D. Summary of EPA's Evaluation of the Oil and Gas Standard Permit

    For the reasons presented above, EPA proposes to find that the Oil
and Gas Standard Permit, as submitted on September 20, 1995, and
revisions submitted on April 19, 1996; July 22, 1998; and September 11,
2000, is limited to Minor NSR. EPA proposes to find that the program
satisfies the federal requirements for Minor NSR and contains
sufficient enforceable safeguards to ensure that the NAAQS and
applicable control strategies are protected.

E. Summary of EPA's Evaluation of the Revisions to the Standard Permit
Applicability Provisions

    On February 1, 2006, and March 11, 2011, the State of Texas
submitted revisions to the Standard Permit SIP rules, which made non-
substantive changes to the applicability provisions in 30 TAC
116.610(a) and (b). The revisions include changes such as defining
acronyms, changing capitalization, rephrasing, and updating and
deleting cross-references as appropriate due to revisions to other
sections. EPA proposes to approve the revisions to 30 TAC 116.610(a)
and (b) because these changes are ministerial and non-substantive in
nature.

IV. Proposed Action

    We are proposing to approve the submittals for a Minor NSR Oil and
Gas Standard Permit submitted September 20, 1995; April 19, 1996; July
22, 1998; and September 11, 2000. We also are proposing to approve the
submittals for the Standard Permit SIP rules making non-substantive
changes to the Standard Permit applicability provisions in 30 TAC
116.610(a) and (b) as submitted February 1, 2006, and resubmitted March
11, 2011. EPA is proposing this action in accordance with section 110
of the Act.
    After review and consideration of public comments, we will take
final action on the SIP revisions that are identified herein.

V. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the Clean Air Act and
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the CAA. Accordingly,
this notice merely proposes to approve state law as meeting Federal
requirements and does not impose additional requirements beyond those
imposed by state law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);

     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the state, and EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide,
Incorporation by reference, Hydrocarbons, Intergovernmental relations,
Lead, Nitrogen oxides, Ozone, Particulate matter, Reporting and
recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: December 16, 2013.
Ron Curry,
Regional Administrator, EPA Region 6.
[FR Doc. 2013-30729 Filed 12-23-13; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 82, Number 49 (Wednesday, March 15, 2017)]
[Notices]
[Pages 13816-13817]
[FR Doc No: 2017-05104]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2013-D-0575]

Agency Information Collection Activities; Submission for Office
of Management and Budget Review; Comment Request; Guidance for Industry
on Expedited Programs for Serious Conditions--Drugs and Biologics

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA or we) is announcing
that a proposed collection of information has been submitted to the
Office of Management and Budget (OMB) for review and clearance under
the Paperwork Reduction Act of 1995.

DATES: Fax written comments on the collection of information by April
14, 2017.

ADDRESSES: To ensure that comments on the information collection are
received, OMB recommends that written comments be faxed to the Office
of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer,
FAX:

202-395-7285, or emailed to<EMAIL_ADDRESS>All comments
should be identified with the OMB control number 0910-0765. Also
include the FDA docket number found in brackets in the heading of this
document.

FOR FURTHER INFORMATION CONTACT: FDA PRA Staff, Office of Operations,
Food and Drug Administration, Three White Flint North, 10A63, 11601
Landsdown St., North Bethesda, MD 20852<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: In compliance with 44 U.S.C. 3507, FDA has
submitted the following proposed collection of information to OMB for
review and clearance.

Guidance for Industry (GFI) on Expedited Programs for Serious
Conditions--Drugs and Biologics

OMB Control Number 0910-0765--Extension

    The FDA has established four programs intended to facilitate and
expedite development and review of new drugs to address unmet medical
needs in the treatment of serious or life-threatening conditions: (1)
Fast track designation including rolling review, (2) Breakthrough
therapy designation, (3) Accelerated approval, and (4) Priority review
designation. In support of these, the Agency has developed the guidance
document, ``GFI: Expedited Programs for Serious Conditions--Drugs and
Biologics.'' The guidance outlines the programs' policies and
procedures and describes applicable threshold criteria, including when
to submit information to FDA. Respondents to the information collection
are sponsors of drug and biological products appropriate for these
expedited programs.
    Priority Review Designation Request. The guidance describes that a
sponsor may expressly request priority review of an application. Based
on information from FDA's databases and information available to FDA,
we estimate that approximately 48 sponsors will prepare and submit
approximately 1.7 priority review designation submissions that receive
a priority review in accordance with the guidance and that the added
burden for each submission will be approximately 30 hours to develop
and submit to FDA as part of the application (totaling 2,400 hours).
    Breakthrough Therapy Designation Request. The guidance describes
the process for sponsors to request breakthrough therapy designation in
an application. Based on information from FDA's databases and
information available to FDA, we estimate that approximately 87
sponsors will prepare approximately 1.29 breakthrough therapy
designation submissions in accordance with the guidance and that the
added burden for each submission will be approximately 70 hours to
prepare and submit (totaling 7,910 hours).
    In the Federal Register of November 29, 2016 (81 FR 85973), we
published a 60-day notice requesting public comment on the proposed
extension of this collection of information. No comments were received
in response to the notice.
    FDA estimates the burden of this collection as follows:

                                 Table 1--Estimated Annual Reporting Burden \1\
----------------------------------------------------------------------------------------------------------------
                                                     Number of
 Guidance on expedited programs      Number of     responses per   Total annual   Average burden    Total hours
                                    respondents     respondent       responses     per response
----------------------------------------------------------------------------------------------------------------
Priority Review Designation                   48             1.7              80              30           2,400
 Request........................
Breakthrough Therapy Designation              87            1.29             113              70           7,910
 Request........................
                                 -------------------------------------------------------------------------------
    Total.......................  ..............  ..............  ..............  ..............          10,310
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with the information collection.

    The guidance also refers to previously approved collections of
information found in FDA regulations. The collections of information in
21 CFR parts 202.1, 314, and 601; sections 505(a), 506(a)(1), 735, and
736 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(a),
356(a)(1), 379(g), and 379(h)) have been approved under OMB control
numbers 0910-0686, 0910-0001, 0910-0338, 0910-0014, and 0910-0297.

    Dated: March 9, 2017.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2017-05104 Filed 3-14-17; 8:45 am]
 BILLING CODE 4164-01-P


[Federal Register Volume 84, Number 146 (Tuesday, July 30, 2019)]
[Notices]
[Pages 36994-36998]
[FR Doc No: 2019-16095]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86458; File No. SR-NYSEARCA-2019-52]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Modify the NYSE
Arca Options Fee Schedule

July 24, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on July 11, 2019, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the 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\ 15 U.S.C. 78a.
    \3\ 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 modify the NYSE Arca Options Fee Schedule
(``Fee Schedule''). The Exchange proposes to implement the fee change
effective July 11, 2019.\4\ The proposed rule change is available on
the Exchange's website at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
---------------------------------------------------------------------------

    \4\ The Exchange filed to amend the Fee Schedule for
effectiveness on July 1, 2019, (SR-NYSEArca-2019-48) and withdrew
such filing on July 11, 2019.
---------------------------------------------------------------------------

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 those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
    The purpose of this filing is to amend the Fee Schedule to modify
the criteria for Market Makers to qualify for enhanced posting credits
in Penny Pilot issues and SPY (the ``Penny Credit Tiers'').
Specifically, to encourage Market Makers and Lead Market Makers
(collectively, ``Market Makers'') to direct orders and quotes to the
Exchange, this proposed rule change would lower the minimum volume
threshold that Market Makers are required to trade in order to receive
the credits in the highest of the Penny Credit Tiers (i.e., Super Tier
II), thus making it easier to qualify for these credits. The associated
per contract credit remains the same. The Exchange proposes to
implement the fee changes effective July 11, 2019.
Background
    The Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. In Regulation NMS,
the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \5\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
---------------------------------------------------------------------------

    There are currently 16 registered options exchanges competing for
order flow. Based on publicly-available information, and excluding
index-based options, no single exchange has more than 16% of the market
share of executed volume of multiply-listed equity and ETF options
trades.\6\ Therefore, no exchange possesses significant pricing power
in the execution of multiply-listed equity & ETF options order flow.
More specifically, in the first quarter of 2019, the Exchange had less
than 10% market share of executed volume of multiply-listed equity &
ETF options trades.\7\ Similarly, the equities markets too face stark
competition, which is relevant because the Exchange offers ``cross-
asset pricing,'' which is designed to incentivize participants to
execute a certain amount of volume on both the Exchange's equities and
options platform. As the Commission itself recognized, the market for
trading services in NMS stocks has become ``more fragmented and
competitive.'' Indeed, equity trading is currently dispersed across 13
exchanges, 32 alternative trading systems, and numerous broker-dealer
internalizers and wholesalers, all competing for order flow. Based on
publicly-available information, no single exchange has more than 18%
market share (whether including or excluding auction volume).
Therefore, no exchange possesses significant pricing power in the
execution of equity order flow. More specifically, in the first quarter
of 2019, the Exchange averaged less than 9%

market share of executed volume of equity trades (excluding auction
volume).
---------------------------------------------------------------------------

    \6\ The Options Clearing Corporation (``OCC'') publishes options
and futures volume in a variety of formats, including daily and
monthly volume by exchange, available here: https://www.theocc.com/market-data/volume/default.jsp.
    \7\ Based on OCC data, see id., the Exchange's market share in
equity-based options declined from 9.57% for the month of January to
9.52% for the month of April.
---------------------------------------------------------------------------

    The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow, or discontinue or reduce use of certain categories of
products, in response to fee changes. Accordingly, competitive forces
constrain options exchange transaction fees. And, as such, the Exchange
has employed cross-asset pricing to encourage Market Makers and their
and their affiliated or Appointed OFP(s) (collectively, their OFP(s))
to direct volume to both NYSE Arca Options (``Arca Options'') and NYSE
Arca Equity (``Arca Equity'').\8\ The Exchange notes that others
Exchanges offer tiers with cross-asset criteria requirements.\9\
---------------------------------------------------------------------------

    \8\ An OFP refers to any OTP that submits, as agent, orders to
the Exchange, per Rule 6.1A-O(a)(21). See Fee Schedule, infra note
9, Endnote 15. An ``affiliate'' of an OTP is ``a person that
directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, the person
specified,'' per Rule 1.1(a). See id., Endnote 8. An ``Appointed
OFP'' is an OFP that has been designated by an NYSE Arca Market
Maker. See id., Endnote 15.
    \9\ See, e.g., Cboe BZX U.S. Equities Exchange Fee Schedule,
Footnote 1 and Cboe EDGX Options Exchange Fee Schedule, Footnote 4.
---------------------------------------------------------------------------

    In response to this competitive environment, the Exchange has
established incentives to encourage Market Makers to provide liquid and
active markets on the Exchange, including the Penny Credit Tiers.
Pursuant to the Penny Credit Tiers, Market Makers receive additional
credits (beyond the base credit of $0.28 per contract) if their trading
exceeds certain minimum volume thresholds on the Exchange.\10\ To
receive these additional credits, Market Makers may aggregate their
volume traded on Arca Options and Arca Equities with any of their
OFP(s). By allowing Market Makers to include these other participants'
trading volume in calculating the Market Makers' eligibility for
additional credits, Market Makers may encourage an increased level of
activity from these other participants.
---------------------------------------------------------------------------

    \10\ The base credit is available for executions of Market Maker
posted interest in Penny Pilot Issues and SPY and has no minimum
volume threshold requirement. See Fee Schedule, NYSE Arca OPTIONS:
TRADE-RELATED CHARGES FOR STANDARD OPTIONS, Market Maker Penny Pilot
and SPY Posting Credit Tiers, available here, https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf.
---------------------------------------------------------------------------

    Super Tier II has the highest volume requirements, includes cross-
asset pricing, and the largest associated credit ($0.42 per contract)
of the Penny Credit Tiers. The Exchange is proposing to modify the
minimum options volume threshold for one of the Super Tier II
qualification methods.
Proposed Rule Change
    The Exchange proposes to modify one of the qualification volume
thresholds for Super Tier II, and will not modify the $0.42 per
contract credit associated with this Tier. Specifically, the Exchange
proposes to change the method of qualifying for Super Tier II that
currently requires:
     A Market Maker to trade at least 0.20% of Total Customer
Average Daily Volume (``TCADV'') \11\ on the Exchange against such
Market Maker's posted interest in all issues (the ``options
threshold''), and
---------------------------------------------------------------------------

    \11\ TCADV refers to Total Industry Customer equity and ETF
option average daily volume. TCADV includes OCC calculated Customer
volume of all types, including Complex Order transactions and QCC
transactions, in equity and ETF options.
---------------------------------------------------------------------------

     A Market Maker and its OFP(s) \12\ to post and trade in
Tape B Securities at least 1.50% of US Tape B consolidated average
daily volume (``CADV'') \13\ for the billing month on the Arca Equity
market (the ``equities threshold'').\14\
---------------------------------------------------------------------------

    \12\ The Fee Schedule refers to ETP Holders and not OFPs, but
the relationship between a Market Maker and an ETP must be by
affiliation or appointment in order to allow volume to be
aggregated. See Fee Schedule, supra note 10, Endnote 15.
    \13\ CADV means Consolidated Average Daily Volume for
transactions reported to the Consolidated Tape, excluding odd lots
through January 31, 2014 (except for purposes of Lead Market Maker
pricing), and excludes volume on days when the market closes early
and on the date of the annual reconstitution of the Russell
Investments Indexes. Transactions that are not reported to the
Consolidated Tape are not included in CADV.
    \14\ The Exchange is not modifying the other two bases for a
Market Maker to receive the enhanced credit under Super Tier II,
which require (1) a Market Maker to trade at least 0.10% of TCADV on
the Exchange against such Market Maker's posted interest in all
issues, and the Market Maker and its OFP, collectively, post and
trade at least 0.42% ADV of Retail Orders of U.S. Equity Market
Share Posted on the Arca Equity market; or (2) a Market Maker to
trade at least 1.60% of TCADV on the Exchange against such Market
Maker's interest in all issues, with at least 0.90% of TCADV from
such Market Maker's posted interest in all issues.
---------------------------------------------------------------------------

    The Exchange proposes to reduce from 0.20% to 0.10% of TCADV for
the options threshold requirement. The Exchange is not proposing to
alter the equities threshold, which will remain 1.50% of US Tape B
CADV.
    As noted above, the Exchange operates in a competitive environment.
This proposed change is designed to incent Market Makers to increase
their trading volume on the Arca Equities market to qualify for Super
Tier II (while making it easier to meet the options volume threshold to
qualify for the based on the lower minimum threshold). The Exchange
believes Market Makers may, in turn, encourage their OFPs to direct
additional order flow to both the Arca Equities and Arca Options
platforms. The Exchange notes that Market Makers as well as non-Market
Makers stand to benefit from an increase in orders and quotes on the
Exchange, which facilitates tighter spreads and enhances price
discovery, and may lead to a corresponding increase in order flow from
other market participants.
    This proposed fee change is targeted at Market Makers. Market
Makers serve a crucial role in the options markets by providing
liquidity to facilitate market efficiency and functioning. Market
Makers add additional value beyond other market participants through
continuous quoting and the commitment of capital. Because Market Makers
have obligations and regulatory requirements that are not applicable to
other market participants, the Exchange believes that the proposed
change to make it easier for Market Makers to qualify for Super Tier
II, is equitable and not unfairly discriminatory in light of their
obligations and the costs associated therewith. The Exchange's fees are
constrained by intermarket competition, as Market Makers can register
on any or all of the 16 options exchanges. Thus, Market Makers that are
also members of other exchanges have a choice of where they post orders
and quotes. The proposed rule change is designed to incentivize Market
Makers to post liquidity to the Exchange, thereby promoting market
depth, price discovery and transparency and enhancing order execution
opportunities for market participants. Moreover, because Market Makers
are able to aggregate qualifying volume of their OFPs, Market Makers
may encourage their OFPs to direct order flow to the Exchange as well
as to NYSE Arca Equities, which would likewise support the quality of
price discovery and transparency on the Exchange.
    The Exchange cannot predict with certainty whether any Market Maker
would avail themselves of this proposed fee change. Market Makers may
be registered on other options exchanges and may choose to post their
orders and quotes to those exchanges based on available incentives.
That said, there is currently one firm that receives the Super Tier II
credit under the current options (and equities) threshold(s). Assuming
historical behavior can be predictive of future behavior, the Exchange
believes that at least one additional firm may qualify for Super Tier
II as proposed to be modified

herein. The Exchange believes the proposed lower options threshold
(with the equity volume threshold unchanged and the same $0.42 per
contract credit) would provide an incentive for Market Makers to
provide additional liquidity to the exchange to qualify for the higher
Super Tier II credit.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\15\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\16\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities and does not unfairly discriminate between
customers, issuers, brokers or dealers.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

The Proposed Rule Change Is Reasonable
    The Exchange operates in a highly competitive market. The
Commission has repeatedly expressed its preference for competition over
regulatory intervention in determining prices, products, and services
in the securities markets. In Regulation NMS, the Commission
highlighted the importance of market forces in determining prices and
SRO revenues and, also, recognized that current regulation of the
market system ``has been remarkably successful in promoting market
competition in its broader forms that are most important to investors
and listed companies.'' \17\
---------------------------------------------------------------------------

    \17\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
---------------------------------------------------------------------------

    There are currently 16 registered options exchanges competing for
order flow. Based on publicly-available information, and excluding
index-based options, no single exchange has more than 16% of the market
share of executed volume of multiply-listed equity and ETF options
trades.\18\ Therefore, no exchange possesses significant pricing power
in the execution of multiply-listed equity & ETF options order flow.
More specifically, in the first quarter of 2019, the Exchange had less
than 10% market share of executed volume of multiply-listed equity &
ETF options trades.\19\ In addition, give the cross-asset component of
Super Tier II, it is important to note that the equities market is
likewise subject to stark competition. As the Commission itself
recognized, the market for trading services in NMS stocks has become
``more fragmented and competitive.'' Indeed, equity trading is
currently dispersed across 13 exchanges, 32 alternative trading
systems, and numerous broker-dealer internalizers and wholesalers, all
competing for order flow. Based on publicly-available information, no
single exchange has more than 18% market share (whether including or
excluding auction volume). Therefore, no exchange possesses significant
pricing power in the execution of equity order flow. More specifically,
in the first quarter of 2019, the Exchange averaged less than 9% market
share of executed volume of equity trades (excluding auction volume).
---------------------------------------------------------------------------

    \18\ See supra note 6.
    \19\ Based on OCC data, see supra note 7, in 2019, the
Exchange's market share in equity-based options declined from 9.57%
for the month of January to 9.52% for the month of April.
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    The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow, or discontinue or reduce use of certain categories of
products, in response to fee changes. Accordingly, competitive forces
constrain options exchange transaction fees. Stated otherwise, changes
to exchange transaction fees can have a direct effect on the ability of
an exchange to compete for order flow.
    The Exchange believes that the proposed modification to Super Tier
II is reasonable because reducing the options threshold makes it easier
for Market Makers to qualify for the Tier, which in turn, should
attract more liquidity to the Exchange (as well as to the Arca Equities
market), which benefits all market participants. In addition, the
Exchange believes the proposed modification would encourage
participants to increase their order flow to interact with Market Maker
orders and quotes, which potential increase in order flow would benefit
all market participants by improving order execution and price
discovery, which, in turn, promotes just and equitable principles of
trade and removes impediments to and perfects the mechanism of a free
and open market and a national market system.
    The Exchange cannot predict with certainty whether any Market Maker
would avail themselves of this proposed fee change. Market Makers may
be registered on other options exchanges and may choose to post orders
and quotes to those exchanges based on available incentives. That said,
there is currently one firm that receives the Super Tier II credit
under the current options (and equities) threshold(s). Assuming
historical behavior can be predictive of future behavior, the Exchange
believes that at least one additional firm may qualify for Super Tier
II as modified herein. The Exchange believes the proposed lower options
threshold (with the equity volume threshold unchanged and the same
$0.42 per contract credit) would provide an incentive for Market Makers
to post their orders and quotes to the Exchange to qualify for the
higher Super Tier II credit.
    On the backdrop of the competitive environment in which the
Exchange operates, the proposed rule change is a reasonable attempt by
the Exchange to increase the depth of its market and improve its market
share relative to its competitors.
The Proposed Rule Change Is an Equitable Allocation of Credits and Fees
    The Exchange believes the proposed rule change is an equitable
allocation of its fees and credits. The Exchange is constrained by
intermarket competition, as Market Makers are free to register on any
one of the 16 option exchanges. Market Makers serve a crucial role in
financial markets by providing liquidity to facilitate market
efficiency and price discovery. Market Makers, unlike other market
participants, add additional value through continuous quoting and the
commitment of capital and have specified obligations and regulatory
requirements that are not required of other participants. As noted
above, the Exchange is subject to competitive forces such that Market
Makers may post their orders and quotes to any of the other 15 option
exchanges of which they are a member. The proposed change, which is
targeted at Market Makers, is designed to encourage Market Makers to
post their orders and quotes to the Exchange, thereby promoting market
quality, price discovery and transparency and enhancing order execution
opportunities for all market participants--Marker Maker and non-Market
Maker alike. Further, encouraging Market Maker activity on the Exchange
would also contribute to the Exchange's depth of book as well as to the
top of book liquidity to the benefit of all market participants.
    The Exchange believes the proposed rule change would improve market
quality for all market participants on the Exchange and, as a
consequence, attract more Market Maker orders and quotes to the
Exchange thereby improving market-wide quality and price discovery.
The Proposed Rule Change Is Not Unfairly Discriminatory
    The Exchange believes it is not unfairly discriminatory to reduce
the minimum options volume trading activity associated with Super Tier
II as

discussed herein because the proposed modification would be available
to all similarly-situated market participants on an equal and non-
discriminatory basis. Further the proposal should incent Market Makers
to qualify for Super Tier II, including by increasing trading on the
equities market. The Exchange notes that Market Makers are still
eligible to qualify for Super Tier II under the other two existing
qualification methods (see supra note 14). By continuing to provide
such alternative (unchanged) methods to qualify for a Tier, and
reducing the options threshold for one of the methods to qualify for
Super Tier II, the Exchange believes the opportunities to qualify for
credits is increased, which benefits all participants through increased
Market Maker activity. Further, encouraging Market Maker activity on
the Exchange would also contribute to the Exchange's depth of book as
well as to the top of book liquidity.
    To the extent that Market Maker activity is increased by the
proposal, market participants will increasingly compete for the
opportunity to trade on the Exchange. The resulting increased volume
and liquidity would provide more trading opportunities and tighter
spreads to all market participants and thus would promote just and
equitable principles of trade, remove impediments to and perfect the
mechanism of a free and open market and a national market system and,
in general, to protect investors and the public interest.
    Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition.
    For the foregoing reasons, the Exchange believes that the proposal
is consistent with the Act.

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

    In accordance with Section 6(b)(8) of the Act,\20\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Instead, as discussed above, the Exchange believes
that the proposed changes would encourage the submission of additional
liquidity to a public exchange, thereby promoting market depth, price
discovery and transparency and enhancing order execution opportunities
for all market participants. As a result, the Exchange believes that
the proposed change furthers the Commission's goal in adopting
Regulation NMS of fostering integrated competition among orders, which
promotes ``more efficient pricing of individual stocks for all types of
orders, large and small.'' \21\
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    \20\ 15 U.S.C. 78f(b)(8).
    \21\ Securities Exchange Act Release No. 51808, 70 FR 37495,
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
---------------------------------------------------------------------------

    Intramarket Competition. The proposed change is designed to attract
additional order flow to the Exchange. The Exchange believes that the
proposed reduced options threshold to meet one of the qualifying bases
of Super Tier II would continue to incentivize market participants,
Market Makers in particular, to direct their orders and quotes to the
Exchange. Greater liquidity benefits all market participants on the
Exchange by encouraging OFPs to send orders to the Exchange which
results in providing more trading opportunities for all market
participants on the Exchange. The proposed reduced options threshold
(and Super Tier II credit) would be available to all similarly-situated
market participants, and, as such, the proposed change would not impose
a disparate burden on competition among market participants on the
Exchange.
    The Exchange further notes that Market Makers, unlike other market
participants, add additional value through continuous quoting and the
commitment of capital and are subject to unique regulatory obligations.
Because other market participants do not need to occur the same costs
to begin trading on the Exchange, the Exchange believes that offering
the proposed fee change to Market Makers would not create an undue
burden on non-Market Makers.
    Intermarket Competition. The Exchange operates in a highly
competitive market in which market participants can readily favor one
of the 16 competing option exchanges if they deem fee levels at a
particular venue to be excessive. Market Maker have the option of
registering on more than one exchange, including NYSE Arca, and may
post their orders and quotes to the most attractive venue. In such an
environment, the Exchange must continually adjust its fees to remain
competitive with other exchanges and to attract order flow to the
Exchange. And with regard to the cross-asset component of Super Tier
II, the Arca Equities exchange similarly operates in a competitive
environment. Based on publicly-available information, no single
exchange has more than 18% market share (whether including or excluding
auction volume). Therefore, no exchange possesses significant pricing
power in the execution of equity order flow. More specifically, in the
first quarter of 2019, the Exchange averaged less than 9% market share
of executed volume of equity trades (excluding auction volume). The
Exchange believes that the proposed rule change reflects this
competitive environment because it modifies the Exchange's fees in a
manner designed to encourage Market Makers to direct trading interest
to the Exchange, to provide liquidity and to attract order flow. To the
extent that this purpose is achieved, all the Exchange's market
participants should benefit from the improved market quality.
    The Exchange further believes that the proposed pricing changes
would increase both intermarket and intramarket competition by
attracting new entrants to the Exchange at a lower fee for a limited
time. By offering the reduced Covered Fees, the Exchange believes that
it would retain and attract Market Makers, which participants are an
integral component of the option industry marketplace. Further, the
incentive would be available to all similarly-situated participants,
and, as such, the proposed change would not impose a disparate burden
on competition either among or between classes of market participants
and may, in fact, encourage intermarket competition.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \22\ of the Act and subparagraph (f)(2) of Rule
19b-4 \23\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78s(b)(3)(A).
    \23\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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 under Section 19(b)(2)(B) \24\ of the Act to determine
whether the proposed rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-NYSEARCA-2019-52 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-NYSEARCA-2019-52. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEARCA-2019-52 and should be submitted
on or before August 20, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
---------------------------------------------------------------------------

    \25\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-16095 Filed 7-29-19; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: October 14, 2008 (Volume 73, Number 199)]
[Notices]
[Page 60737-60738]
[DOCID:fr14oc08-97]

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SECURITIES AND EXCHANGE COMMISSION

[Release Nos. 33-8975; 34-58747; File No. 4-573]

SEC Study of Mark to Market Accounting

AGENCY: Securities and Exchange Commission.

ACTION: Request for comment.

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SUMMARY: The Securities and Exchange Commission is requesting public
comment related to the study to be conducted by the Commission under
the Emergency Economic Stabilization Act of 2008 of ``mark-to-market''
accounting applicable to financial institutions, including depository
institutions.

DATES: Comments should be received on or before November 13, 2008.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/other.shtml); or
     Send an e-mail message to<EMAIL_ADDRESS>Please
include File Number 4-573 on the subject line.

Paper Comments

     Send paper comments in triplicate to Florence E. Harmon,
Acting Secretary, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-1090.
    All submissions should refer to File No. 4-573. This file number
should be included on the subject line if e-mail is used. To help us
process and review your comments more efficiently, please use only one
method. The Commission will post all comments on its Internet Web site
(http://www.sec.gov/rules/other.shtml). Comments are also available for
public inspection and copying in the Commission's Public Reference
Room, 100 F Street, NE., Washington, DC 20549, on official business
days between the hours of 10 a.m. and 3 p.m. All comments received will
be posted without change; we do not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: Jenifer Minke-Girard, Senior Associate
Chief Accountant, at<PHONE_NUMBER>, Office of the Chief Accountant,
Securities and Exchange Commission, 100 F Street, NE., Washington, DC
20549-6561.

SUPPLEMENTARY INFORMATION: In connection with the study to be conducted
by the Securities and Exchange Commission (``Commission'') under the
Emergency Economic Stabilization Act of 2008 (the ``Act'') \1\ of
``mark-to-market'' accounting applicable to financial institutions,
including depository institutions, the Commission welcomes public
comments on the issues, point-of-view, research and opinions that the
Commission's staff should consider in conducting the study.
---------------------------------------------------------------------------

    \1\ H.R. 1424.
---------------------------------------------------------------------------

    The Act, which was enacted and signed by the President on October
3, 2008, requires the Commission to conduct a study of ``mark-to-
market'' accounting and submit a report to Congress with the findings
and determinations within 90 days. Specifically Section 133 of the Act
provides as follows:

Study on Mark-to-Market Accounting

    (a) STUDY.--The Securities and Exchange Commission, in consultation
with the Board [of Governors of the Federal Reserve System] and the
Secretary [of the Treasury], shall conduct a study on mark-to-market
accounting standards as provided in Statement Number 157 of the
Financial Accounting Standards Board, as such standards are applicable
to financial institutions, including depository institutions. Such a
study shall consider at a minimum--
    (1) The effects of such accounting standards on a financial
institution's balance sheet;
    (2) The impacts of such accounting on bank failures in 2008;
    (3) The impact of such standards on the quality of financial
information available to investors;
    (4) The process used by the Financial Accounting Standards Board in
developing accounting standards;
    (5) The advisability and feasibility of modifications to such
standards; and
    (6) Alternative accounting standards to those provided in such
Statement Number 157.
    (b) REPORT.--The Securities and Exchange Commission shall submit to
Congress a report of such study before the end of the 90-day period
beginning on the date of the enactment of this Act containing the
findings and determinations of the Commission, including such
administrative and legislative recommendations as the Commission
determines appropriate.
    All interested parties are invited to submit their views, in
writing, on any or all of the subjects identified, whether subjects in
addition to those identified should be included in the study for any
reason or on any other matter relating to the current use of fair value
accounting (including mark-to-market) in the U.S. financial reporting
system that should be considered.

    Dated: October 8, 2008.

    By the Commission.
Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-24245 Filed 10-10-08; 8:45 am]

BILLING CODE 8011-01-P