[Federal Register Volume 76, Number 222 (Thursday, November 17, 2011)]
[Rules and Regulations]
[Pages 71260-71267]
[FR Doc No: 2011-29641]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2005-TX-0025; FRL-9489-8]

Approval and Promulgation of Implementation Plans; Texas;
Revisions to the New Source Review (NSR) State Implementation Plan
(SIP); General Definitions; Definition of Modification of Existing
Facility

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is approving, as proposed July 18, 2011, several revisions
to the State Implementation Plan (SIP) for the State of Texas that
relate to severable portions of the definition of ``modification of
existing facility'' in the general definitions for the Texas NSR
Program. EPA finds that these changes 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 also disapproving a severable
portion of the definition that was proposed for disapproval on
September 23, 2009. EPA is taking these actions under section 110 of
the Act.

DATES: This final rule is effective December 19, 2011.

ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-R06-OAR-2005-TX-0025. All documents in the docket are listed on
the http://www.regulations.gov Web site. Although listed in the index,
some information is not publicly available, e.g., confidential business
information or other information whose disclosure is restricted by
statute. Certain other material, such as copyrighted material, is not
placed on the Internet and will be publicly available only in hard copy
form. Publicly available docket materials are available either
electronically through http://www.regulations.gov or in hard copy at
the Air Permits Section (6PD-R), Environmental Protection Agency, 1445
Ross Avenue, Suite 700, Dallas, Texas 75202-2733. The file will be made
available by appointment for public inspection in the Region 6 Freedom
of Information Act Review Room between the hours of 8:30 a.m. and 4:30
p.m. weekdays except for legal holidays. Contact the person listed in
the FOR FURTHER INFORMATION CONTACT paragraph below or Mr. Bill Deese
at<PHONE_NUMBER> to make an appointment. If possible, please make the
appointment at least two working

days in advance of your visit. There will be a 15 cent per page fee for
making photocopies of documents. On the day of the visit, please check
in at the EPA Region 6 reception area at 1445 Ross Avenue, Suite 700,
Dallas, Texas.
    The State submittal is also available for public inspection at the
State Air Agency listed below during official business hours by
appointment:
    Texas Commission on Environmental Quality (TCEQ), Office of Air
Quality, 12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: Mr. Stanley M. Spruiell, Air Permits
Section (6PD-R), Environmental Protection Agency, Region 6, 1445 Ross
Avenue, Suite 700, Dallas, Texas 75202-2733, telephone<PHONE_NUMBER>;
fax number<PHONE_NUMBER>; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document wherever any
reference to ``we,'' ``us,'' or ``our'' is used, we mean EPA.

Table of Contents

I. The State's Submittals
II. What action is EPA taking?
III. EPA's Evaluation of the Severable Portions of the Definition of
``Modification of Existing Facility''
    A. Approval of 30 TAC 116.10(11)--Introductory Paragraph of the
Definition of ``Modification of Existing Facility''
    1. What is the background of the introductory paragraph of 30
TAC 116.10(11)?
    2. What is EPA's evaluation of the submitted revisions to the
introductory paragraph of 30 TAC 116.10(11)?
    B. Approval of 30 TAC 116.10(11)(C)--Exclusion for Maintenance
and Replacement of Equipment
    1. What is the background of 30 TAC 116.10(11)(C)?
    2. What is EPA's evaluation of the submitted revisions to 30 TAC
116.11(C)?
    C. Approval of 30 TAC 116.10(11)(D)--Exclusion for an Increase
in Annual Hours of Operation
    1. What is the background of 30 TAC 116.10(11)(D)?
    2. What is EPA's evaluation of the submitted revisions to 30 TAC
116.10(11)(D)?
    D. Disapproval of 30 TAC 116.10(11)(G)--Exclusion of Changes at
Certain Natural Gas Processing, Treating, or Compression Facilities
    1. What is the background of 30 TAC 116.10(11)(G)?
    2. What is EPA's evaluation of the submitted revisions to 30 TAC
116.10(11)(G)?
    3. What are the grounds for disapproval of 30 TAC 116.10(11)(G)?
    E. Response to Other Comments on the July 18, 2011, Proposal
IV. Final Action
V. Statutory and Executive Order Reviews

I. The State's Submittals

    On March 13, 1996; July 22, 1998; and September 4, 2002; the State
of Texas submitted revisions to the Texas State Implementation Plan
(SIP) concerning the definition of ``modification of existing
facility'' for minor source permitting under Title 30 of the Texas
Administrative Code (30 TAC), Chapter 116--Control of Air Pollution by
Permits for New Construction or Modification, Subchapter A--
Definitions. The definition of ``modification of existing facility''
for minor NSR permitting is located at 30 TAC 116.10(11) in the
September 4, 2002, submittal. The March 13, 1996, revisions to this
definition were repealed and readopted, and new versions were submitted
to EPA on July 22, 1998. This definition was later recodified from 30
TAC 116.10(9) to 116.10(11) in a SIP submittal dated September 4, 2002.
    Section 30 TAC 116.10--General Definitions--is currently approved
as adopted by Texas on August 21, 2002, and as approved April 14, 2010
(75 FR 19468). As approved, the current SIP does not include all the
definitions under Section 116.10, including the definition of
``modification of existing facility'' found in Section 116.10(11). On
July 18, 2011 (76 FR 42078), EPA proposed to approve severable portions
of this definition first adopted by Texas on February 14, 1996
(submitted March 13, 1996). The next submittal reflects the Texas
repeal and readoption of this definition as Section 116.10(9) on June
17, 1998 (submitted July 22, 1998). The regulatory history of the March
13, 1996 submittal was used to evaluate the later submittals. On July
18, 2011 (76 FR 42078), we proposed to approve severable portions of
the definition ``modification of existing facility'' as submitted on
July 22, 1998, and the redesignation of this definition to Section
116.10(11) adopted August 21, 2002 (submitted September 4, 2002). We
also proposed to approve Subparagraphs (C) and (D) of this definition
as submitted July 22, 1998, and September 4, 2002. In response to this
proposal, we received comments from the Texas Industry Project (TIP)
and the BCCA Appeal Group (BCCAAG).
    On September 23, 2009 (74 FR 48450), EPA proposed to disapprove
severable portions of the definition of ``modification of existing
facility'' under Subparagraph (G). In response to this proposal, we
received comments from the University of Texas at Austin, Environmental
Clinic (UT Environmental Clinic).\1\ Today, we finalize our disapproval
of Subparagraph (G) as not meeting the requirements of the CAA.
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    \1\ The UT Environmental Clinic forwarded its comments on behalf
of: Environmental Integrity Project: Environmental Defense Fund;
Galveston-Houston Association for Smog Prevention; Public Citizen;
Citizens for Environmental Justice; Sierra Club Lone Star Chapter;
Community-In-Power and Development Association; KIDS for Clean Air;
Clean Air Institute of Texas; Sustainable Energy and Economic
Development Coalition; Robertson County: Our Land, Our Lives; Texas
Protecting Our Land, Water, and Environment; Citizens for a Clean
Environment; Multi-County Coalition; and Citizens Opposing Power
Plants for Clean Air.
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    EPA is taking these actions under section 110 of the Act.
    Finally, please note that Texas submitted further revisions to 30
TAC 116.10 on October 5, 2010. This includes the removal of two
definitions, the renumbering of other definitions, and revisions to
certain definitions. In this October 2010 submittal, TCEQ renumbered
the definition of ``modification of existing facility'' to Section
116.10(9) and relettered Subparagraphs (C) and (D) to Subparagraphs (B)
and (C), respectively, with no other changes. We are not acting on the
October 5, 2010, SIP submittal here. We will address the October 2010
SIP revisions in a separate action.
    Additional information related to these SIP submittals is contained
in the Technical Support Documents (TSD) for the September 23, 2009,\2\
and July 18, 2011,\3\ proposals, which are in the docket for this
action.
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    \2\ The TSD for the September 23, 2009, proposal is in the
docket as document EPA-R06-OAR-2005-TX-0025-0007. You can access
this TSD on line at: http://www.regulations.gov/#!documentDetail;D=EPA-R06-OAR-2005-TX-0025-0007.
    \3\ The TSD for the July 18, 2011, proposal is in the docket as
document EPA-R06-OAR-2005-TX-0025-0378. You can access this TSD on
line at: http://www.regulations.gov/#!documentDetail;D=EPA-R06-OAR-
2005-TX-0025-0378.
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    The table below summarizes the changes that were submitted and are
affected by this action. A summary of EPA's evaluation of each section
and the basis for this proposal is discussed in section III of this
preamble. The TSD includes a detailed evaluation of the referenced SIP
submittals.

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                                                                            Date
              Section                       Title              Date      adopted by  Description of change   Date of EPA proposed     Final EPA action
                                                            submitted       TCEQ                                    action
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30 TAC 116.10(11).................  Definition of            3/13/1996    2/14/1996  Initial adoption.....  7/18/2011--proposed    Approval.
                                     modification of         7/22/1998    6/17/1998  Repeal and readoption   approval.
                                     existing facility--                              as Section 116.10(9).
                                     Introductory
                                     paragraph.
                                                              9/4/2002    8/21/2002  Recodification to
                                                                                Section 116.10(11).
30 TAC 116.10(11)(C)..............  Exclusion of             3/13/1996    2/14/1996  Initial adoption.....  7/18/2011--proposed    Approval.
                                     maintenance and         7/22/1998    6/17/1998  Repeal and readoption   approval.
                                     replacement of                                   as Section
                                     equipment.                                       116.10(9)(C).
                                                              9/4/2002    8/21/2002  Recodification to
                                                                                Section
                                                                                116.10(11)(C).
30 TAC 116.10(11)(D)..............  Exclusion of increase    3/13/1996    2/14/1996  Initial adoption.....  7/18/2011--proposed    Approval.
                                     in annual hours of      7/22/1998    6/17/1998  Repeal and readoption   approval.
                                     operation.                                       as Section
                                                                                116.10(9)(D).
                                                              9/4/2002    8/21/2002  Recodification to
                                                                                Section
                                                                                116.10(11)(D).
30 TAC 116.10(11)(G)..............  Exclusion of certain     3/13/1996    2/14/1996  Initial adoption.....  9/23/2009--proposed    Disapproval.
                                     changes natural gas     7/22/1998    6/17/1998  Repeal and readoption   disapproval.
                                     processing,                                      as Section
                                     treating, or                                     116.10(9)(G).
                                     compression
                                     facilities.
                                                              9/4/2002    8/21/2002  Recodification to
                                                                                Section
                                                                                116.10(11)(G).
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    In a separate proposal published on September 23, 2009, 74 FR
48450, EPA proposed to disapprove severable provisions in Subparagraphs
(A), (B), and (G) of the definition of ``modification of existing
facility'' at 30 TAC 116.10(11). In light of revisions that were
submitted on October 5, 2010, revising the language of Subparagraph (A)
and eliminating Subparagraph (B), EPA will withdraw its proposed
actions on Subparagraphs (A) and (B) in a separate action. Subparagraph
(A) as it appears in the October 5, 2010, submittal will be evaluated
and will be addressed in a separate future action. Based upon our
proposed disapproval of 30 TAC 116.10(11)(G) and our evaluation of the
comments received on that proposal, EPA is taking final action to
disapprove 30 TAC 116.10(11)(G) submitted March 13, 1996; July 22,
1998; and September 4, 2002.

II. What action is EPA taking?

    We have evaluated severable portions of the SIP submissions of 30
TAC 116.10(11), which include the introductory paragraph of the
definition of ``modification of existing facility,'' and Subparagraphs
(C) and (D) of that definition for consistency with the CAA, and NSR
regulations for new and modified sources in 40 CFR part 51. We have
also reviewed the rules for enforceability and legal sufficiency.
    This action addresses severable portions of the definition of
modification of existing facility under 30 TAC 116.10(11), including
the introductory paragraph and Subparagraphs (C) and (D) of the
definition submitted March 13, 1996; July 22, 1998; and September 4,
2002. A technical analysis of the submittals for this definition has
found that these changes meet the CAA and 40 CFR part 51. EPA received
two comments in support of this proposal and did not receive any
adverse comments. Therefore, EPA approves as proposed the severable
portions of the definition of ``modification of existing facility''
under 30 TAC 116.10(11), including the introductory paragraph of
Section 116.10(11) and Subparagraphs (C) and (D) of this definition,
submitted on March 13, 1996; July 22, 1998; and September 4, 2002. As
discussed earlier, in a separate SIP submittal dated October 5, 2010,
30 TAC 116.10(11) Subparagraphs (C) and (D) were renamed as 30 TAC
116.10(9) and Subparagraphs (B) and (C), respectively. EPA is not
acting on the changes submitted October 2010, and will address these
revisions in a separate action.
    In a separate proposal published on September 23, 2009 (74 FR
48450), EPA proposed to disapprove 30 TAC 116.10(11)(G). Based upon our
proposed disapproval of this rule and our evaluation of the comments
received on our proposed disapproval of Subsection (G), EPA is taking
final action to disapprove 30 TAC 116.10(11)(G) submitted March 13,
1996; July 22, 1998; and September 4, 2002.
    On September 23, 2009, 74 FR 48450, EPA also proposed to disapprove
severable provisions in Subparagraphs (A) and (B) of the definition of
``modification of existing facility.'' In light of revisions that were
submitted on October 5, 2010, revising the language of Subparagraph (A)
and eliminating Subparagraph (B), EPA will withdraw its proposed
actions on Subparagraphs (A) and (B) in a separate action. Subparagraph
(A) as it appears in the October 5, 2010, submittal will be evaluated
and will be addressed in a separate future action.

III. EPA's Evaluation of Severable Portions of the Definition of
``Modification of Existing Facility''

A. Approval of 30 TAC 116.10(11)--Introductory Paragraph of the
Definition of ``Modification of Existing Facility''

1. What is the background of the introductory paragraph of 30 TAC
116.10(11)--introductory paragraph?
    The TCEQ initially submitted the introductory paragraph of the
general definition of ``modification of existing facility'' on March
13, 1996. On July 22, 1998, TCEQ repealed and resubmitted this
definition as readopted at 30 TAC 116.10(9). On September 4, 2002, TCEQ
submitted revisions that redesignated this definition to 30 TAC
116.10(11). The submitted regulatory definition of the introductory
paragraph that we are addressing here provides that a modification of
an existing facility is ``any physical change in, or change in

the method of operation of, a facility in a manner that increases the
amount of air contaminants emitted by the facility into the atmosphere
or which results in the emission of any air contaminant not previously
emitted.''
2. What is EPA's evaluation of the submitted revisions to the
introductory paragraph of 30 TAC 116.10(11)?
    EPA approved the definition of ``facility'' in Subchapter A:
Definitions on September 6, 2006 (71 FR 52698) as part of the Texas
SIP. ``Facility'' is defined as ``[a] discrete or identifiable
structure, device, item, equipment, or enclosure that constitutes or
contains a stationary source, including appurtenances other than
emission control equipment. A mine, quarry, well test, or road is not a
facility.'' See approved SIP at 30 TAC 116.10(6). The submitted
regulatory definition for ``modification of existing facility'' also is
in Subchapter A, Section 116.10. Therefore, ``existing facility'' is
limited by the terms of the SIP definition of ``facility.'' In our
evaluation of this introductory paragraph in the submitted regulatory
definition of modification of existing facility, we compared it to how
``modification'' is defined in the CAA and in our regulations.
    The CAA defines modification in Section 111(a)(4) as ``any physical
change in, or change in the method of operation of, a stationary source
which increases the amount of any air pollutant emitted by such source
or which results in the emission of any pollutant not previously
emitted.'' In 40 CFR 52.01(d), the phrases ``modification'' and
``modified source'' are defined as any physical change in, or change in
the method of operation of, a stationary source which increases the
emission rate of any air pollutant for which a national standard has
been promulgated under part 50 of this chapter or which results in the
emission of any such pollutant not previously emitted.
    The introductory paragraph of 30 TAC 116.10(11) is substantially
the same as the definitions in section 111(a)(4) of the Act and 40 CFR
52.01(d).
    The existence of a different definition for ``major modification,''
in Section 116.12--Nonattainment and Prevention of Significant Review
Definitions--that is applicable for Major NSR \4\ serves to distinguish
the provisions in the introductory paragraph of section 116.10(11) from
the Major NSR Program and limit its application to Minor NSR.
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    \4\ Section 116.12 as currently approved in the Texas SIP
applies only to the Major NSR Program for Nonattainment Review. SIP
revisions submitted February 1, 2006, and March 11, 2011, revised
the definition to apply to both Nonattainment Review and Prevention
of Significant Deterioration. EPA is currently reviewing these
revisions and plans to act upon them shortly. The definitions in
Section 116.12 are effective as State rules and the TCEQ implements
them as part of its Major NSR Program.
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    In response to our proposed approval, we received comments from TIP
and BCCAAG. The commenters agree that the regulatory language in 30 TAC
116.10(11) is consistent with the CAA and EPA regulations and that SIP
approval is warranted.
    Based upon the proposal and consideration of the comments we
received, we are approving the introductory paragraph of 30 TAC
116.10(11), as submitted March 13, 1996; July 22, 1998; and September
4, 2002.

B. Approval of 30 TAC 116.10(11)(C)--Exclusion for Maintenance and
Replacement of Equipment

1. What is the background of 30 TAC 116.10(11)(C)?
    On March 13, 1996, this provision was submitted as Subparagraph (C)
under the definition of ``modification of existing facility.'' In the
July 22, 1998, submittal, the provision was repealed and resubmitted as
30 TAC 116.10(9)(C). On September 4, 2002, TCEQ submitted revisions
that redesignated this definition to 30 TAC 116.10(11)(C). As
submitted, Subparagraph (C) provides that maintenance or replacement of
equipment components that do not increase or tend to increase the
amount or change the characteristics of the air contaminants emitted
into the atmosphere is not a modification to an existing facility.
2. What is EPA's evaluation of the submitted revisions to 30 TAC
116.10(11)(C)?
    The submitted Subparagraph (C) mirrors the definition in the Texas
Clean Air Act (TCCA). Under Subparagraph (C), any maintenance and
repair of equipment components that increases emissions, or tends to
increase emissions, will be considered a modification consistent with
the introductory paragraph of 30 TAC 116.10(11). Accordingly, the
limitation in Subparagraph (C) protects against increases in emissions
and thereby does not interfere with attainment or reasonable further
progress. The definition of ``major modification'' in Section 116.12
has a different exclusion for routine maintenance, repair, and
replacement. The existence of a different exclusion in the Section
116.12 that is applicable for Major NSR serves to distinguish the
provisions in paragraph (C) from the Major NSR Program and limit its
application to Minor NSR.
    In response to our proposed approval, we received comments from TIP
and BCCAAG. The commenters agree that the regulatory language in 30 TAC
116.10(11)(C) is consistent with the CAA and EPA regulations and that
SIP approval is warranted.
    Based upon the proposal and consideration of the comments we
received, we are finalizing our approval of 30 TAC 116.10(11)(C), as
submitted March 13, 1996; July 22, 1998; and September 4, 2002.

C. Approval of 30 TAC 116.10(11)(D)--Exclusion for an Increase in
Annual Hours of Operation

1. What is the background of 30 TAC 116.10(11)(D)?
    On March 13, 1996, this provision was submitted as Subparagraph (D)
under the definition of ``modification of existing facility.'' In the
July 22, 1998, submittal, the provision was repealed and resubmitted as
30 TAC 116.10(9)(D). On September 4, 2002, TCEQ submitted revisions
that redesignated this definition to 30 TAC 116.10(11)(D). As
submitted, Subparagraph (D) provides that an increase in the annual
hours of operation is not a modification to an existing facility,
unless the existing facility has received a preconstruction permit or
has been exempted, under TCAA, Sec.  382.057, from preconstruction
permit requirements.
2. What is EPA's evaluation of the submitted revisions to 30 TAC
116.10(11)(D)?
    The submitted Subparagraph (D) mirrors the definition in the Texas
Clean Air Act (TCCA). Subparagraph (D) is similar to 40 CFR
52.01(d)(2)(ii), which provides that an increase in the hours of
operation shall not be considered a change in the method of operation.
The operative language in the submitted Subparagraph (D) is
substantially the same as 40 CFR 52.01(d)(2)(ii). Furthermore,
Subparagraph (D) includes additional language that clarifies that an
increase in hours of operation may be a modification for existing minor
facilities having preconstruction permits or exemptions, under TCAA
Sec.  382.057 \5\ for preconstruction permit requirements. This
language limits the reach of the

exclusion in scenarios where an existing facility is subject to
limitations on hours of operation under the terms of a preconstruction
permit or an exemption. This is consistent with Federal requirements in
40 CFR 52.01(d)(2)(ii). Subparagraph (D) meets the Federal requirements
as described above. Again, the definition of ``major modification'' in
Section 116.12 has a different exclusion for an increase in the annual
hours of operation. The existence of a different exclusion in the
Section 116.12 that is applicable for Major NSR serves to distinguish
the provisions in paragraph (D) from the Major NSR Program and limit
its application to Minor NSR.
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    \5\ The term ``exemptions'' is a misnomer. Exemptions in Texas
now are called Permits by Rule. An ``exemption'' since 1972 in Texas
and in the Texas SIP, is an authorization to construct and/or modify
if certain conditions are met.
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    In response to our proposed approval, we received comments from TIP
and BCCAAG. The commenters agree that the regulatory language in 30 TAC
116.10(11)(D) is consistent with the CAA and EPA regulations and that
SIP approval is warranted.
    Based upon the proposal and consideration of the comments we
received, we are finalizing our approval of 30 TAC 116.10(11)(D), as
submitted March 13, 1996; July 22, 1998; and September 4, 2002.

D. Disapproval of 30 TAC 116.10(11)(G)--Exclusions for Changes at
Certain Natural Gas Processing, Treating, or Compression Facilities

1. What is the background of 30 TAC 116.10(11)(G)?
    On March 13, 1996, this provision was submitted as Subparagraph (G)
under the definition of ``modification of existing facility.'' In the
July 22, 1998, submittal, the provision was repealed and resubmitted as
30 TAC 116.10(9)(D). On September 4, 2002, TCEQ submitted revisions
that redesignated this definition to 30 TAC 116.10(11)(D). On September
23, 2009, EPA proposed to disapprove the submitted revisions relating
to 30 TAC 116.10(11)(G).
2. What is EPA's evaluation of the submitted revisions to 30 TAC
116.10(11)(G)?
    The submittals provide that changes at certain natural gas
processing, treating, or compression facilities are not modifications
if the change does not result in an annual emissions rate of any air
contaminant in excess of the volume for grandfathered facilities. The
``annual emissions rate'' is the same as the ``volume emitted at
maximum design capacity;'' therefore, this would provide an exemption
for those sources from permit review for any emission increases at
these facilities. The requirements of 40 CFR 51.160(e) allow a State to
identify facilities which will be subject to review under its minor NSR
program and require its minor NSR SIP to discuss the basis for
determining which facilities will be subject to review. The submittals,
however, do not contain an applicability statement or regulatory
provision limiting this type of change to minor NSR. There is no
explanation of the reason for exempting this type of change from the
permitting SIP requirements. Without the submittal by the State of an
analysis describing how this exemption does not negate the major NSR
SIP requirements and meets the minor NSR SIP requirements in 40 CFR
51.160 and the Act's antibacksliding requirements in section 110(l),
EPA proposed to disapprove this submitted definition.
    In response to our proposed disapproval, we received comments from
the UT Environmental Clinic (Clinic) and TCEQ. The Clinic supported the
disapproval of this exemption from the definition of modification of
existing facility because the exemption could apply to major
modifications and because TCEQ did not demonstrate that the exemption
will not interfere with attainment or cause a violation of a control
strategy. EPA acknowledges that these comments support its basis for
proposing disapproval of this exemption because it could allow major
modifications without undergoing review that satisfies the applicable
permitting requirements for Major NSR under 40 CFR 51.165 and/or
51.166, as applicable. The exemption may also allow a source to
increase emissions without a demonstration that such change will not
interfere with attainment or maintenance of a National Ambient Air
Quality Standard (NAAQS) or cause a violation of a control strategy.
The TCEQ commented that it will consider EPA's comments regarding its
proposed disapproval of 30 TAC 116.10(11)(G), but provided no
information which demonstrates that this provision meets the
requirements for SIP approval.\6\
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    \6\ On October 5, 2010, TCEQ submitted a revision that
renumbered 30 TAC 116.10(11)(G) to 30 TAC 116.10(9)(F), but made no
changes to the substance of this provision.
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3. What are the grounds for disapproval of 30 TAC 116.10(11)(G)?
    Based upon the September 23, 2009, proposal and the consideration
of comments provided, EPA is disapproving the exemption in 30 TAC
116.10(11)(G) on the following grounds:
     This definition exempts changes at certain natural gas
processing, treating, or compression facilities as non-modifications if
the change does not result in an annual emissions rate of any air
contaminant in excess of the volume for grandfathered facilities from
the definition of modification of existing facility. However, TCEQ did
not provide any discussion of the basis for this exemption as required
by 40 CFR 51.160(e).
     The submitted definition includes no applicability
statement or regulatory provision limiting this type of change to minor
NSR.
     The submitted rule includes no demonstration that the
exempted change at a natural gas processing, treating, or compression
facility does not result in an annual emissions rate of any air
contaminant in excess of the volume for grandfathered facilities, and
does not interfere with attainment or maintenance of a NAAQS or cause a
violation of a control strategy as required under 40 CFR 51.161(a).
    Based upon the September 23, 2009, proposal, and consideration of
the comments received, we are finalizing our disapproval of 30 TAC
116.10(11)(G) as submitted March 11, 1996; July 22, 1998; and September
4, 2002.

E. Response to Other Comments on the July 18, 2011, Proposal

    TIP and BCCAAG commented that EPA should take into account the
dramatic improvements in Texas's air quality in acting on the
definition of ``modification of existing facility'' and other SIP
revisions. The commenters assert that Texas's integrated air permitting
program, including the definition which EPA now proposes to approve,
has played a key role in Texas's air quality success. TIP and BCCAAG
urge EPA to approve the entire ``modification of existing facility'' as
part of this integrated program. The commenters cite to substantial
reductions in several air pollutants and reductions in ambient
concentrations in monitored levels of ozone, nitrogen dioxide, sulfur
dioxide, and carbon monoxide from 1990 to 2009.
    Our actions on the severable parts of the definition of
``modification of existing facility'' are based upon whether the
definition meets the applicable requirements of the CAA, as discussed
herein. EPA is required to review a SIP revision submission for
compliance with the CAA and EPA regulations. CAA 110(k)(3). See also
BCCA Appeal Group v. EPA, 355 F 3d. 817, 822 (5th Cir. 2003), Natural
Resource Defense Council v. Browner, 57 F.3d 1122, 1123 (DC Cir. 1995).

    The submitted data, even if accepted, does not show that gains are
attributable to the definition of ``modification of existing
facility,'' and the commenter's claim regarding the data does not take
account of SIP-approved control strategies (both State and Federal
programs) and other Federal and State programs. The approvals of
revisions which we finalize today are based on our review of the Texas
submittals following the analysis furnished in the proposal in
accordance with the CAA.

IV. Final Action

    Today, EPA is approving the following revisions to the Texas SIP to
include severable provisions of the definition of ``modification of
existing facility'' under 30 TAC 116.10(11), submitted March 13, 1996;
July 22, 1998; and September 4, 2002. This includes the following:
     30 TAC 116.10(11)--the introductory paragraph of the
definition of ``modification of existing facility;''
     30 TAC 116.10(11)(C)--Exclusion for maintenance and
replacement of equipment; and
     30 TAC 116.10(11)(D)--Exclusion for an increase in annual
hours of operation.
    Today, EPA is also disapproving the severable portion of definition
of ``modification of existing facility'' under 30 TAC 116.10(11)(G),
submitted March 13, 1996; July 22, 1998; and September 4, 2002.
    Final action on these revisions on or before October 31, 2011, will
meet EPA's obligation on the NSR Rules Revisions; 112(g) Revisions
component of the May 21, 2009, Settlement Agreement between EPA and the
Business Coalition for Clean Air Appeal Group, Texas Association of
Business, and Texas Oil and Gas Association.
    EPA is not taking further action on the following severable
provisions of 30 TAC 116.10(11):
     30 TAC 116.10(11)(E). EPA disapproved Subparagraph (E) in
a separate action on April 14, 2010, 75 FR 19468. EPA will address any
subsequent submittals containing Subparagraph (E) as newly revised in a
separate action.
     30 TAC 116.10(11)(F). EPA disapproved Subparagraph (F) in
a separate action on July 15, 2010, 75 FR 41312. EPA will address any
subsequent submittals containing Subparagraph (F) as newly revised in a
separate action.

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review

    This action is not a ``significant regulatory action'' under the
terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is
therefore not subject to review under Executive Orders 12866 and 13563
(76 FR 3821, January 21, 2011).

B. Paperwork Reduction Act

    This action does not impose an information collection burden under
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.,
because this SIP approval and disapproval under section 110 and
subchapter I, part D of the Clean Air Act will not in-and-of itself
create any new information collection burdens but simply approves and
disapproves certain State severable requirements for inclusion into the
SIP. Burden is defined at 5 CFR 1320.3(b). Because this final action
does not impose an information collection burden, the Paperwork
Reduction Act does not apply.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency
to conduct a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. Small entities include small
businesses, small not-for-profit enterprises, and small governmental
jurisdictions. For purposes of assessing the impacts of today's rule on
small entities, small entity is defined as: (1) A small business as
defined by the Small Business Administration's (SBA) regulations at 13
CFR 121.201; (2) a small governmental jurisdiction that is a government
of a city, county, town, school district or special district with a
population of less than 50,000; and (3) a small organization that is
any not-for-profit enterprise which is independently owned and operated
and is not dominant in its field. This rule will not have a significant
impact on a substantial number of small entities because SIP approvals
and disapprovals under section 110 of the Clean Air Act do not create
any new requirements but simply approve or disapprove requirements that
the States are already imposing.
    Furthermore, as explained in this action, a severable portion of
the submissions does not meet the requirements of the Act and EPA
cannot approve the severable portion of the submissions. The final
disapproval will not affect any existing State requirements applicable
to small entities in the State of Texas. Federal disapproval of a
severable portion of a State submittal does not affect its State
enforceability. After considering the economic impacts of today's
rulemaking on small entities, and because the Federal SIP disapproval
does not create any new requirements or impact a substantial number of
small entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. Moreover,
due to the nature of the Federal-State relationship under the Clean Air
Act, preparation of flexibility analysis would constitute Federal
inquiry into the economic reasonableness of state action. The Clean Air
Act forbids EPA to base its actions concerning SIPs on such grounds.
Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C.
7410(a)(2).

D. Unfunded Mandates Reform Act

    This action contains no Federal mandates under the provisions of
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C.
1531-1538 ``for State, local, or tribal governments or the private
sector.'' EPA has determined that the approval and disapproval action
does not include a Federal mandate that may result in estimated costs
of $100 million or more to either State, local, or tribal governments
in the aggregate, or to the private sector. This Federal action
determines that pre-existing requirements under State or local law
should not be approved as part of the Federally-approved SIP. It
imposes no new requirements. Accordingly, no additional costs to State,
local, or tribal governments, or to the private sector, result from
this action.

E. Executive Order 13132, Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have Federalism implications.''
``Policies that have Federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of

power and responsibilities among the various levels of government.''
    This action does not have Federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132, because it merely approves and
disapproves severable portions of certain State requirements for
inclusion into the SIP and does not alter the relationship or the
distribution of power and responsibilities established in the Clean Air
Act. Thus, Executive Order 13132 does not apply to this action.

F. Executive Order 13175, Coordination With Indian Tribal Governments

    This action does not have tribal implications as specified by
Executive Order 13175 (65 FR 67249, November 9, 2000) because the rule
neither imposes substantial direct compliance costs on tribal
governments, nor preempts tribal law. Therefore, the requirements of
sections 5(b) and 5(c) of the Executive Order do not apply to this
action.

G. Executive Order 13045, Protection of Children From Environmental
Health Risks and Safety Risks

    EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997)
as applying only to those regulatory actions that concern health or
safety risks, such that the analysis required under section 5-501 of
the Executive Order has the potential to influence the regulation. This
action is not subject to Executive Order 13045 because it is not an
economically significant regulatory action based on health or safety
risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997).
This SIP approval and disapproval under section 110 and subchapter I,
part D of the Clean Air Act will not in-and-of itself create any new
regulations but simply disapproves certain State requirements for
inclusion into the SIP.

H. Executive Order 13211, Actions That Significantly Affect Energy
Supply, Distribution, or Use

    This rule is not subject to Executive Order 13211 (66 FR 28355, May
22, 2001) because it is not a significant regulatory action under
Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C.
272 note) directs EPA to use voluntary consensus standards in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standards bodies. NTTAA directs EPA to
provide Congress, through the Office of Management and Budget,
explanations when the Agency decides not to use available and
applicable voluntary consensus standards.
    The EPA believes that this action is not subject to requirements of
Section 12(d) of NTTAA because application of those requirements would
be inconsistent with the Clean Air Act. Today's action does not require
the public to perform activities conducive to the use of VCS.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629, (February 16, 1994)) establishes
Federal executive policy on environmental justice. Its main provision
directs Federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.
    EPA lacks the discretionary authority to address environmental
justice in this action. In reviewing SIP submissions, EPA's role is to
approve or disapprove state choices, based on the criteria of the Clean
Air Act. Accordingly, this action merely disapproves certain State
requirements for inclusion into the SIP under section 110 and
subchapter I of the Clean Air Act and will not in-and-of itself create
any new requirements. Accordingly, it 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.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. section 801 et seq., as
added by the Small Business Regulatory Enforcement Fairness Act of
1996, generally provides that before a rule may take effect, the agency
promulgating the rule must submit a rule report, which includes a copy
of the rule, to each House of the Congress and to the Comptroller
General of the United States. EPA will submit a report containing this
rule and other required information to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States
prior to publication of the rule in the Federal Register. A major rule
cannot take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).

L. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by January 17, 2012. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this rule for the purposes of judicial
review nor does it extend the time within which a petition for judicial
review may be filed, and shall not postpone the effectiveness of such
rule or action. This action may not be challenged later in proceedings
to enforce its requirements. See section 307(b)(2).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations.

    Dated: October 31, 2011.
Al Armendariz,
Regional Administrator, Region 6.

    40 CFR part 52 is amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7402 et seq.

Subpart SS--Texas

0
2. The table in Sec.  52.2270(c) entitled ``EPA Approved Regulations in
the Texas SIP'' is amended under Chapter 116, Subchapter A, by revising
the entry for Section 116.10 to read as follows:

Sec.  52.2270  Identification of plan.

* * * * *
    (c) * * *

                                    EPA-Approved Regulations in the Texas SIP
----------------------------------------------------------------------------------------------------------------
                                                       State- approval/
         State citation              Title/subject      submittal  date   EPA approval date       Explanation
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
              Chapter 116--Control of Air Pollution by Permits for New Construction or Modification
                                            Subchapter A--Definitions
----------------------------------------------------------------------------------------------------------------
Section 116.10..................  General Definitions         8/21/2002  November 17, 2011,   The SIP does not
                                                                          [Insert FR page      include
                                                                          number where         paragraphs (1),
                                                                          document begins].    (2), (3), (7)(F),
                                                                                (11)(A), (11)(B),
                                                                                (11)(E), (11)(F),
                                                                                (11)(G), and
                                                                                (16).

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

0
3. Section 52.2273 is revised by adding a new paragraph (g) to read as
follows:

Sec.  52.2273  Approval status.

* * * * *
    (g) EPA has disapproved the Texas SIP revision submittals under 30
TAC Chapter 116--Control of Air Pollution by Permits for New
Construction or Modification--Subchapter A--Definitions--Section
116.10(11)(G), adopted February 14, 1996, and submitted March 13, 1996;
repealed and re-adopted June 17, 1998, and submitted July 22, 1998; and
adopted August 21, 2002, and submitted September 4, 2002.

[FR Doc. 2011-29641 Filed 11-16-11; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 83, Number 15 (Tuesday, January 23, 2018)]
[Notices]
[Pages 3196-3199]
[FR Doc No: 2018-01094]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82523; File No. SR-MRX-2018-02]

Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Relating to Market
Maker Orders

January 17, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 5, 2018, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------

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

    The text of the proposed rule change is set forth below. Proposed
new language is italicized; deleted text is in [brackets].

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

    The Exchange proposes to amend MRX Rule 805 to permit Market Makers
\3\ to enter additional order types in the options classes to which
they are appointed.
---------------------------------------------------------------------------

    \3\ Market Makers refers to ``Competitive Market Makers'' and
``Primary Market Makers'' collectively. See MRX Rule 100(a)(25).
---------------------------------------------------------------------------

* * * * *

Nasdaq MRX Rulebook

* * * * *

Rule 805. Market Maker Orders

    (a) Options Classes to Which Appointed. Market makers may enter all
order types defined in Rule 715 in the options classes to which they
are appointed under Rule 802, except Stopped Orders, Reserve Orders and
Customer Cross Orders.[not place principal orders to buy or sell
options in the options classes to which they are appointed under Rule
802, other than opening only orders, immediate-or-cancel orders, market
orders, fill-or-kill orders, sweep orders, and block-size orders
executed through the Block Order Mechanism pursuant to Rule 716(c).]
Competitive Market Makers shall comply with the provisions of Rule
804(e)(2)(iii) upon the entry of such orders if they were not
previously quoting in the series.
    (b) Options Classes Other Than Those to Which Appointed.
    (1) A market maker may enter all order types permitted to be
entered by non-customer participants under the Rules to buy or sell
options in classes of options listed on the Exchange to which the
market maker is not appointed under Rule 802, except for Reserve
Orders, provided that:
    (i) and (ii) No change.
    (2) and (3) No change.
* * * * *

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

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

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

1. Purpose
    The purpose of this rule change is to permit Market Makers to enter
principal orders to buy or sell options in the options classes to which
they are appointed under Rule 802 \4\ for all order types listed in
Rule 715 except for Stopped Orders,\5\ Reserve Orders \6\ and Customer
Cross Orders.\7\ This filing is intended to permit Market Makers to
execute most of the same order types, which today they are permitted to
enter on other options markets.\8\ In addition, this filing is intended
to amend MRX Rule 805(b)(1) to indicate that Reserve Orders are not
permitted to be entered by MRX Market Makers in non-

appointed options classes. Today, MRX Market Makers may not enter
Reserve Orders in either appointed or non-appointed options classes.
Today, while the System prohibits MRX Market Makers from entering
Reserve Orders, MRX Rule 805(b)(1) does not indicate the restriction.
---------------------------------------------------------------------------

    \4\ MRX Rule 802 concerns the appointment of Market Makers.
    \5\ A stopped order is a limit order that meets the requirements
of Rule 1901(b)(8). To execute stopped orders, Members must enter
them into the Facilitation Mechanism or Solicited Order Mechanism
pursuant to Rule 716. See MRX Rule 715(b)(6).
    \6\ A Reserve Order is a limit order that contains both a
displayed portion and a non-displayed portion. Both the displayed
and non-displayed portions of a Reserve Order are available for
potential execution against incoming marketable orders. A non-
marketable Reserve Order will rest on the order book. The displayed
portion of a Reserve Order shall be ranked at the specified limit
price and the time of order entry. The displayed portion of a
Reserve Order will trade in accordance with Rule 713(c) and (d) for
Priority Customer Orders, and Rule 713(e) and Supplementary Material
.01, for Professional Orders. When the displayed portion of a
Reserve Order is decremented, either in full or in part, it shall be
refreshed from the non-displayed portion of the resting Reserve
Order. If the displayed portion is refreshed in part, the new
displayed portion shall include the previously displayed portion.
Upon any refresh, the entire displayed portion shall be ranked at
the specified limit price and obtain a new time stamp, i.e., the
time that the new displayed portion of the order was refreshed. The
new displayed portion will trade in accordance with Rule 713(c) and
(d) for Priority Customer Orders, and Rule 713(e) and Supplementary
Material .01, for Professional Orders. The initial non-displayed
portion of a Reserve Order rests on the order book and is ranked
based on the specified limit price and time of order entry.
Thereafter, non-displayed portions, if any, always obtain the same
time stamp as that of the new displayed portion in subparagraph 4
above. The non-displayed portion of any Reserve Order is available
for execution only after all displayed interest has been executed.
The non-displayed portion of any Reserve Order will trade in
accordance with Rule 713(c) and (d) for Priority Customer Orders,
and Rule 713(e) and Supplementary Material .01, for Professional
Orders. See MRX Rule 715(g).
    \7\ A Customer Cross Order is comprised of a Priority Customer
Order to buy and a Priority Customer Order to sell at the same price
and for the same quantity. See MRX Rule 715(i).
    \8\ NYSE Arca, Inc. (``NYSE Arca'') and NYSE American LLC
(``NYSE American'') do not limit the types of orders that can be
entered by market makers. See NYSE Arca Rule 6.37C-O and NYSE
American Rule 925.2NY.
---------------------------------------------------------------------------

Appointed Options Classes
    Today, as noted in MRX Rule 805(a), a Market Maker may not place
principal orders to buy or sell options in the options classes to which
they are appointed under Rule 802, other than opening only orders,\9\
immediate-or-cancel orders,\10\ market orders, fill-or-kill orders,\11\
sweep orders,\12\ and block-size orders \13\ executed through the Block
Order Mechanism \14\ pursuant to Rule 716(c). At this time, the
Exchange proposes to expand the order types which Market Makers are
permitted to enter on MRX.\15\ The Exchange is amending MRX Rule 805(a)
to make clear which order types a Market Maker in an appointed options
class may submit. Additionally, ISO Orders, All-Or-None Orders, Stop
Orders, Qualified Contingent Cross Orders, Attributable Orders, Do-Not-
Route Orders, Opening Sweep Orders, Cancel and Replace Orders,\16\ and
Add Liquidity Orders are accepted on MRX today from Market Makers as
principal orders as modifiers of the allowable non-resting order types,
although they are not specifically detailed in the rule. This rule
change will further detail and align the rule text with the system
functionality by making clear that Maker Makers may enter all order
types defined in Rule 715 in the options classes to which they are
appointed under Rule 802, except Stopped Orders, Reserve Orders and
Customer Cross Orders.
---------------------------------------------------------------------------

    \9\ An Opening Only order is a limit order that can be entered
for the opening rotation only. Any portion of the order that is not
executed during the opening rotation is cancelled. See MRX Rules
717(o).
    \10\ An immediate-or-cancel order is a limit order that is to be
executed in whole or in part upon receipt. Any portion not so
executed is to be treated as cancelled. An immediate-or-cancel order
entered by a Market Maker through the Specialized Quote Feed
protocol will not be subject to the Limit Order Price Protection and
Size Limitation Protection as defined in MRX Rule 714(b)(2) and (3).
See MRX Rule 715(b)(2).
    \11\ A fill-or-kill order is a limit order that is to be
executed in its entirety as soon as it is received and, if not so
executed, treated as cancelled. See MRX Rule 715(b)(2).
    \12\ A Sweep Order is a limit order that is to be executed in
whole or in part on the Exchange and the portion not so executed
shall be routed pursuant to Supplementary Material .05 to Rule 1901
to Eligible Exchange(s) for immediate execution as soon as the order
is received by the Eligible Exchange(s). Any portion not immediately
executed by the Eligible Exchange(s) shall be canceled. If a Sweep
Order is not marketable when it is submitted to the Exchange, it
shall be canceled. See MRX Rule 715(s).
    \13\ Block-size orders are orders for fifty (50) contracts or
more. See MRX Rule 716(a).
    \14\ The Block Order Mechanism is a process by which a Member
can obtain liquidity for the execution of block-size orders. See MRX
Rule 716(c).
    \15\ This expansion would include Good-Till-Date Orders, GTC
Orders, Limit Orders, and Stop Limit Orders as new acceptable order
types.
    \16\ Cancel and Replace Orders shall mean a single message for
the immediate cancellation of a previously received order and the
replacement of that order with a new order. If the previously placed
order is already filled partially or in its entirety, the
replacement order is automatically canceled or reduced by the number
of contracts that were executed. The replacement order will retain
the priority of the cancelled order, if the order posts to the Order
Book, provided the price is not amended, size is not increased, or
in the case of Reserve Orders, size is not changed. If the
replacement portion of a Cancel and Replace order does not satisfy
the system's price or other reasonability checks (e.g., MRX Rule
710; MRX Rule 711(c); MRX Rule 714(b)(2); and MRX Rule 722(b)(1) and
Supplementary Material .07 (b), (c) and (d) to Rule 722) the
existing order shall be cancelled and not replaced. See
Supplementary Material .02 to MRX Rule 715.
---------------------------------------------------------------------------

    Today, MRX Market Makers, who are appointed and non-appointed in a
particular options class, may submit orders without limitation, unless
otherwise restricted by the order type as discussed herein. The
Exchange proposes to permit Market Makers to enter all order types,
which are listed in MRX Rule 715, except for Stopped Orders, Reserve
Orders and Customer Cross Orders. The Exchange notes that today Market
Makers are not eligible to execute either Customer Cross Orders, which
are Customer orders, or Stopped Orders, which are intended for the
account of a customer.\17\ With respect to Reserve Orders, the Exchange
proposes to continue to restrict Market Makers from entering Reserve
Orders in their appointed options class. The Exchange believes that
Market Maker liquidity should be displayed liquidity. For these
reasons, and to remain competitive with other markets, the Exchange
proposes to permit Market Makers to enter all orders they are eligible
to submit in their appointed class with the exception of Reserve Orders
and also restrict Reserve Orders in the non-appointed classes.
---------------------------------------------------------------------------

    \17\ MRX Rule 1901(b)(8) states, ``The transaction that
constituted the Trade-Through was the execution of an order for
which, at the time of receipt of the order, a Member had guaranteed
an execution at no worse than a specified price (a ``stopped
order''), where: (i) The stopped order was for the account of a
Customer; (ii) the Customer agreed to the specified price on an
order-by-order basis; and (iii) the price of the Trade-Through was,
for a stopped buy order, lower than the national Best Bid in the
options series at the time of execution, or, for a stopped sell
order, higher than the national Best Offer in the options series at
the time of execution . . .''
---------------------------------------------------------------------------

Non-Appointed Options Classes
    Today, for the reasons noted above, the Exchange does not permit
Market Makers to enter Reserve Orders in non-appointed options classes.
However, the current rule text does not provide this limitation. The
Exchange proposes to amend the current rule text at MRX Rule 805(b)(1)
to codify this limitation.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\18\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\19\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest, by providing Market Makers access to trade order types which
are currently permissible to be traded in on other options exchanges
today.\20\ The Exchange believes that permitting Market Makers to enter
all eligible order types, except Reserve Orders, in both appointed and
non-appointed options classes offers no advantage to Market Makers
under the Exchange's market structure, including, but not limited to,
under the priority and trade allocation rules in MRX Rule 713 and
various risk protection mechanism rules applicable to Market Makers in
MRX Rule 804.\21\ Today, other non-Market Maker participants may submit
these order types on MRX.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(5).
    \20\ See note 8 above.
    \21\ Today, Market Makers are not eligible to execute either
Customer Cross Orders, which are Customer orders, or Stopped Orders,
which are intended for the account of a customer.
---------------------------------------------------------------------------

    The Exchange notes that previously, Nasdaq ISE, LLC prohibited non-
customer trading by Electronic Access Members (``EAMs'') for principal
or agent transactions.\22\ At that time, ISE represented that, in an
electronic market, non-customer market orders have the potential to
create market volatility by trading at different price levels until
their order is fully executed. ISE further noted that, without this
restriction, non-customers would be able to use large-size orders to
quickly take out ISE's entire order book without giving other market
participants an

opportunity to react.\23\ Today, EAMs on ISE may submit non-customer
limit orders regardless of the size of the order where previously EAMs
were prohibited from submitting orders for non-customers that caused
ISE's best bid and offer to be for less than 10 contracts.\24\
---------------------------------------------------------------------------

    \22\ See Securities Exchange Act Release No. 42455 (February 24,
2000), 65 FR 11388 (March 2, 2000) (File No. 10-127) (In the Matter
of the Application of The International Securities Exchange LLC for
Registration as a National Securities Exchange; Findings and Opinion
of the Commission).
    \23\ Id. When the restriction was adopted, there were various
limitations imposed on non-customer trading. For example, displayed
quotes were firm only for public customer orders. Since that time,
electronic options trading has evolved. With the adoption of trade-
through protection under the intermarket linkage, every order must
be executed at the best quoted price. Further, ISE has also removed
restrictions on non-customer trading.
    \24\ See Securities Exchange Act Release No. 49602 (April 22,
2004), 69 FR 23841 (April 30, 2004) (SR-ISE-2003-26).
---------------------------------------------------------------------------

    The Exchange notes that these restrictions never existed on MRX.
MRX believes that these restrictions should not exist today because
there is no reason to restrict Market Makers in entering order types,
except for the restriction related to Reserve Orders, in options
classes in which they are appointed. Unlike other order types, the
Reserve Order is a limit order that contains both a displayed portion
and a non-displayed portion.\25\ Both the displayed and non-displayed
portions of a Reserve Order are available for potential execution
against incoming marketable orders. When the displayed portion of a
Reserve Order is decremented, either in full or in part, it shall be
refreshed from the non-displayed portion of the resting Reserve Order.
The Exchange believes that because a Reserve Order contains a non-
displayed portion, Market Makers should not be permitted to enter this
order. Market Makers are required to make markets that, absent changed
market conditions, will be honored for the number of contracts entered
into the Exchange's System in all series of options classes to which
the market maker is appointed.\26\ The Exchange believes that these
markets should be transparent. Today, MRX Market Makers are not
permitted to enter Reserve Orders in either appointed or non-appointed
options classes. The Exchange proposes to specifically note this
limitation in both Rule 805(a) and (b) as an exception. The Exchange
notes that this limitation is specifically not noted in Rule 805(b)
today despite the fact that the limitation exists in the System today.
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    \25\ See MRX Rule 715(g).
    \26\ See MRX Rule 803(b)(2).
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    The Exchange is also amending MRX Rule 805(a) to detail the types
of non-resting order types and their modifiers with respect to ISO
Orders, All-Or-None Orders, Stop Orders, Qualified Contingent Cross
Orders, Attributable Orders, Do-Not-Route Orders, Opening Sweep Orders,
Cancel and Replace Orders, and Add Liquidity Orders. This rule change
will detail and align the rule text with the system functionality and
make clear which order types a Market Maker may submit in appointed
options classes.
    MRX Market Makers continue to be obligated to add liquidity on MRX.
The Exchange also notes that MRX Rule 805(b)(2) and (3) restricts the
number of contracts that a Market Maker may enter in an options class
to which the Market Maker is not appointed.\27\ The Exchange notes that
it also requires Market Makers to abide by certain quoting
requirements, in the options classes in which they are appointed
pursuant to MRX Rule 802, in order to maintain the status of a Market
Maker.\28\ The Exchange believes that permitting a Market Maker to
enter additional order types, except Reserve Orders, in their appointed
options class will permit Market Makers additional latitude to conduct
business on MRX and effectively compete with other market makers on
other options exchanges. Quotes and orders entered by a Market Maker
may not interact against quotes and orders entered on the opposite side
of the market by the same Market Maker.\29\
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    \27\ The total number of contracts executed during a quarter by
a Competitive Market Maker in options classes to which it is not
appointed may not exceed twenty-five percent (25%) of the total
number of contracts traded by such Competitive Market Maker in
classes to which it is appointed and with respect to which it was
quoting pursuant to Rule 804(e)(2). See MRX Rule 805(b)(2).
    The total number of contracts executed during a quarter by a
Primary Market Maker in options classes to which it is not appointed
may not exceed ten percent (10%) of the total number of contracts
traded per each Primary Market Maker Membership. See MRX Rule
805(b)(3).
    \28\ See MRX Rule 804(e) and Supplementary Material .01 to Rule
804. Orders do not count toward meeting continuous quoting
obligations.
    \29\ See MRX Rule 804(b).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. Today, NYSE Arca and NYSE
American place no limitation on the types of orders that can be entered
by market makers in their appointed class.\30\ Accordingly, the
Exchange believes that this proposal does not impose an undue burden on
inter-market competition because each options exchange generally
determines permissible order types for market makers in its trading
environment based on the exchange's individual business policy,
objectives, and trading system. The Exchange's proposal reflects its
policy and objectives, and does not impose an undue burden on intra-
market competition because it treats all market makers uniformly with
respect to permissible order types. Further, this rule change will
align the system functionality with the rule text to reflect the types
of orders a Market Maker in both appointed and non-appointed options
class may submit. The current rule text is not accurate. This rule
filing is intended to detail and align the rule text with the system
functionality in the current text of Rule 805(a) and (b). This proposal
will make clear which order types a Market Maker may submit in both
appointed and non-appointed options classes.
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    \30\ See note 8 above.
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    Further, Market Makers, unlike other market participants, are
required to abide by certain quoting requirements, in the options
classes in which they are appointed pursuant to MRX Rule 802, in order
to maintain the status of a Market Maker.\31\ The Exchange also notes
that MRX Rule 805(b)(2) and (3) restricts the number of orders that a
Market Maker may enter in an options class to which the Market Maker is
not appointed.\32\ The Exchange believes that permitting a Market Maker
to enter additional order types, except Reserve Orders, in their
appointed options class will permit Market Makers additional latitude
to conduct business on MRX and effectively compete with other market
makers on other options exchanges.
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    \31\ See note 28 above.
    \32\ See note 27 above.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \33\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\34\
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    \33\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \34\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and the text of the proposed rule change,
at least five business days prior to the date of filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Exchange has satisfied this requirement.

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    A proposed rule change filed under Rule 19b-4(f)(6) \35\ normally
does not become operative prior to 30 days after the date of the
filing. However, Rule 19b-4(f)(6)(iii) \36\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Exchange states that
the proposed rule change will permit Market Makers additional latitude
to conduct business on MRX and effectively compete with other market
makers on other options exchanges. The Exchange further states that the
proposed rule will detail and align the rule text with the system
functionality. The Commission believes that waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest. Accordingly, the Commission hereby waives the
operative delay and designates the proposed rule change as operative
upon filing.\37\
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    \35\ 17 CFR 240.19b-4(f)(6).
    \36\ 17 CFR 240.19b-4(f)(6)(iii).
    \37\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-MRX-2018-02 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-MRX-2018-02. 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-MRX-2018-02 and should be submitted on
or before February 13, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
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    \38\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-01094 Filed 1-22-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 129 (Friday, July 7, 2017)]
[Rules and Regulations]
[Page 31440]
[FR Doc No: 2017-14223]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 13

[Docket No. FAA-2016-70104; Amdt. Nos. 13-39A]
RIN 2120-AK90

2017 Revisions to the Civil Penalty Inflation Adjustment Tables;
Correction

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule; correction.

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SUMMARY: The FAA is correcting a final rule published on April 10,
2017. In that rule, the FAA amended its regulations to provide the 2017
inflation adjustment to civil penalty amounts that may be imposed for
violations of FAA regulations and the Hazardous Materials Regulations,
as required by the Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015. It also finalized the catch-up inflation
adjustment interim final rule required by the same Act. The FAA
inadvertently stated the effective date for the new maximums/minimums
was January 15, 2017, instead of April 10, 2017. This document amends
the FAA's regulations to correct that error.

DATES: Effective July 7, 2017.

FOR FURTHER INFORMATION CONTACT: Cole R. Milliard, Attorney, Office of
the Chief Counsel, Enforcement Division, AGC-300, Federal Aviation
Administration, 800 Independence Avenue SW., Washington, DC 20591;
telephone<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

    On April 10, 2017, the FAA published a final rule entitled, ``2017
Revisions to the Civil Penalty Inflation Adjustment Tables'' (82 FR
17097). In that final rule the FAA amended its regulations to provide
the 2017 inflation adjustment to civil penalty maximums and minimums
provided in title 14 Code of Federal Regulations (14 CFR) 13.301 and
406.9, as required by the Federal Civil Penalties Inflation Adjustment
Act Improvements Act of 2015.
    In the regulatory text, the FAA inadvertently stated the effective
date for the new maximums/minimums was January 15, 2017. However, the
FAA intended only to apply the newly inflated maximums/minimums for
violations occurring on or after April 10, 2017. Therefore, the FAA
amends Sec.  13.301(c) to reflect the intended date of April 10, 2017.

List of Subjects in 14 CFR Part 13

    Administrative practice and procedure, Air transportation,
Hazardous materials transportation, Investigations, Law enforcement,
Penalties.

The Correcting Amendment

    In consideration of the foregoing, the Federal Aviation
Administration amends Chapters I of title 14, Code of Federal
Regulations by making the following correction:

PART 13--INVESTIGATIVE AND ENFORCEMENT PROCEDURES

0
1. The authority citation for part 13 continues to read as follows:

    Authority: 18 U.S.C. 6002, 28 U.S.C. 2461 (note); 49 U.S.C.
106(g), 5121-5124, 40113-40114, 44103-44106, 44701-44703, 44709-
44710, 44713, 44725, 46101-46111, 46301, 46302 (for a violation of
49 U.S.C. 46504), 46304-46316, 46318, 46501-46502, 46504-46507,
47106, 47107, 47111, 47122, 47306, 47531-47532; 49 CFR 1.83.

0
2. In Sec.  13.301, revise the heading of the table in paragraph (c) to
read as follows:

Sec.  13.301   Inflation adjustments of civil monetary penalties.

* * * * *
    (c) * * *
    Table of Minimum and Maximum Civil Monetary Penalty Amounts for
Certain Violations Occurring on or after April 10, 2017
* * * * *
    Issued under the authority provided by 28 U.S.C. 2461 note, 49
U.S.C. 106(f) and 44701(a), and 51 U.S.C. 50901 in Washington, DC, on
June 28, 2017.

Lirio Liu,
Director, Office of Rulemaking.
[FR Doc. 2017-14223 Filed 7-6-17; 8:45 am]
 BILLING CODE 4910-13-P