[Federal Register: August 7, 2007 (Volume 72, Number 151)]
[Notices]
[Page 44196-44201]
[DOCID:fr07au07-101]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56172; File No. SR-NASDAQ-2006-065]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Approving Proposed Rule Change as Modified by Amendments No. 1, 3, and
4 Thereto To Reestablish a Quotation and Trading System, The
PORTAL[supreg] Market, for Securities That Are Designated by Nasdaq as
PORTAL Securities

July 31, 2007.

I. Introduction

    On December 22, 2006, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange''), filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to reestablish a quotation and
trading system, The PORTAL[supreg] Market (``PORTAL'' or the ``PORTAL
Market''), for securities that are designated by Nasdaq as PORTAL
securities. The system would allow PORTAL Participants \3\ to trade
with one another in a closed system. On March 6, 2007, Nasdaq filed
Amendment No. 1 to the proposed rule change.\4\ On April 3, 2007,
Nasdaq filed Amendment No. 3 to the proposed rule change. The proposed
rule change was published for comment in the Federal Register on May 1,
2007.\5\ The Commission received seven comment letters on the proposal
from six commenters.\6\ On July 16, 2007, Nasdaq filed Amendment No. 4
to the proposed rule change.\7\ This order approves the proposed rule
change, as amended.
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    \1\ 15 U.S.C. 78s(b)(l).
    \2\ 17 CFR 240.19b-4.
    \3\ Defined infra.
    \4\ Amendment No. 2 was filed and withdrawn on April 3, 2007.
    \5\ See Securities Exchange Act Release No. 55669 (April 25,
2007), 72 FR 23874 (May 1, 2007) (the ``Notice'').
    \6\ See letters to Nancy M. Morris, Secretary, Commission, from
NYPPEX, dated May 18, 2007; Lezlee Westine, President and CEO,
TechNet, dated May 22, 2007; William J. Ginivan, General Counsel,
Friedman, Billings, Ramsey & Co., Inc. (``FBR''), dated May 22, 2007
and July 18, 2007; Deborah L. Wince-Smith, President, Council on
Competitiveness, dated May 25, 2007; and Mary Kuan, Managing
Director and Assistant General Counsel, Securities Industry and
Financial Markets Association (``SIFMA''), dated May 30, 2007. In
addition, an individual affiliated with Morgan Stanley, John
McGuire, submitted a general inquiry with respect to the filing via
e-mail on May 9, 2007.
    \7\ In response to a comment made by SIFMA, in Amendment No. 4,
Nasdaq amended proposed Rule 6513 (Compliance with Rules and
Registration Requirements) so that it applies only to PORTAL Dealers
and PORTAL Brokers. Nasdaq stated that the inclusion of PORTAL
Qualified Investors (defined infra) in this rule was an error. In
addition, Nasdaq stated that PORTAL would not be operational for
debt securities at this time. Once the necessary changes are in
place, Nasdaq will file a proposed rule change stating when PORTAL
will be available for debt trading. Finally, Nasdaq removed obsolete
references in the PORTAL Rules to CINS. This is a technical
amendment and is not subject to notice and comment.
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II. Description of the Proposal

    The National Association of Securities Dealers, Inc. (``NASD'')
created the PORTAL Market in 1990,\8\ simultaneously with the SEC's
adoption of Rule 144A (``Rule 144A'') under the Securities Act of 1933
(``Securities Act''),\9\ to be a new trading system for the purpose of
quoting, trading, and reporting trades in securities eligible for
resale by Qualified Institutional Buyers (``QIBs'') under Rule
144A.\10\
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    \8\ See Securities Exchange Act Release No. 27956 (April 27,
1990), 55 FR 18781 (May 4, 1990) (SR-NASD-88-23). The PORTAL Rules
were subsequently amended. See Securities Exchange Act Release Nos.
28678 (December 6, 1990), 55 FR 51194 (December 12, 1990) (SR-NASD-
90-50); 33326 (December 13, 1993), 58 FR 66388 (December 20, 1993)
(SR-NASD-91-5); 34562 (August 19, 1994), 59 FR 44210 (August 26,
1994) (SR-NASD-94-39); 35083 (December 12, 1994), 59 FR 65104
(December 16, 1994) (SR-NASD-94-65); 40424 (September 10, 1998), 63
FR 49623 (September 16, 1998) (SR-NASD-98-68); 43873 (January 23,
2001), 66 FR 8131 (January 29, 2001) (SR-NASD-99-65); 44042 (March
6, 2001), 66 FR 14969 (March 14, 2001) (SR-NASD-99-66).
    \9\ See Securities Act Release No. 6862 (April 23, 1990), 55 FR
17933 (April 30, 1990).
    \10\ 17 CFR 230.144A.
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    The PORTAL Market did not develop as anticipated. The Exchange
believes this is, in part, because PORTAL securities could only be
traded in the PORTAL Market and the original PORTAL rules imposed trade
reporting for all transactions in PORTAL securities at a time when
there were no trade reporting requirements for privately-placed
securities.\11\ In addition, Nasdaq believes PORTAL did not develop
because it required use of cumbersome technology for access to the
PORTAL Market computer system for reporting purposes, which was a
stand-alone computer system.
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    \11\ Currently, NASD Rule 6732 requires that transactions in
PORTAL equity securities be reported to the OTC Reporting Facility
and PORTAL debt securities be reported to the Trade Reporting and
Compliance Engine Service (``TRACE'').
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    After nearly a decade, NASD filed a proposed rule change to delete
many features of the PORTAL Market that had become obsolete including
rules governing the registration of PORTAL Dealers, PORTAL Brokers, and
PORTAL Qualified Investors and rules that were intended to regulate the
quotation and

trade reporting of PORTAL securities between PORTAL participants using
the PORTAL system.\12\ Following approval of this proposed rule change,
Nasdaq's primary role in the PORTAL Market became designating
securities as PORTAL eligible \13\ which made those securities eligible
for book entry services at The Depository Trust Company (``DTC'').\14\
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    \12\ See Securities Exchange Act Release No. 44042 (March 6,
2001), 66 FR 14969 (March 14, 2001) (order approving SR-NASD-99-66).
In this order, the Commission also approved rules replacing NASD's
trade reporting requirements with a requirement that NASD members
submit trade reports of secondary market transactions in PORTAL-
designated equity securities through the Automated Confirmation
Transaction Service (now know as the OTC Reporting Facility) and in
PORTAL U.S. high-yield debt securities through TRACE.
    \13\ Nasdaq staff historically had responsibility for review of
PORTAL Market applications to determine the eligibility of
securities and of PORTAL Participants (including broker-dealers and
investors). Upon the separation of Nasdaq from the NASD and the
approval of Nasdaq as a registered national securities exchange
under Section 6 of the Act, the review functions for PORTAL Market
eligibility were retained by Nasdaq, and the PORTAL Market rules in
the NASD Rule 5300 Series became the Nasdaq Rule 6500 Series. See
Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR
3550 (January 23, 2006).
    \14\ Securities Exchange Act Release No. 33327 (December 13,
1993), 58 FR 67878 (December 22, 1993) (order approving a proposed
rule change that authorized DTC to make securities sold pursuant to
Rule 144A depository eligible provided that such securities are
designated for inclusion in a system of a self-regulatory
organization (``SRO'') approved by the Commission for the reporting
of quotation and trade information on Rule 144A transactions).
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Nasdaq's PORTAL Proposal

    Nasdaq has proposed an updated version of the PORTAL Market, which
would operate as a facility of the Exchange.\15\ The proposed
amendments to the PORTAL rules would: (i) Establish qualification
requirements for brokers and dealers that are Nasdaq members, and QIBs
\16\ that wish to have access to PORTAL; and (ii) implement quotation,
trade negotiation, and trade reporting functions in the PORTAL Market
for PORTAL-designated securities. Many of the rules proposed by Nasdaq
are substantially the same as those approved by the Commission when the
PORTAL Market was first implemented by NASD in 1990.\17\ The proposed
PORTAL Market, described in detail in the Notice, is summarized below.
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    \15\ Because the PORTAL Market is a facility of Nasdaq, trades
done on the PORTAL Market could be considered trades done on a
national securities exchange and thus would be subject to Section
12(a) of the Exchange Act. This section provides that it ``shall be
unlawful for any member, broker or dealer to effect any transaction
in any security (other than an exempted security) on a national
securities exchange unless a registration is effective as to such
security.'' 15 U.S.C. 78l(a). Section 12(b) of the Act provides all
equity and debt securities must be registered before such securities
may be traded on a national securities exchange, unless they are
``exempted securities'' or are otherwise exempt from Exchange Act
registration requirements. In order to trade unregistered 144A
securities on the PORTAL Market, Nasdaq requested, and the
Commission provided, exemptive relief pursuant to Section 36 of the
Exchange Act from Section 12(a) of the Exchange Act to permit Nasdaq
members to trade PORTAL-designated securities that are not
registered under Section 12(b) of the Exchange Act. See note 55,
infra.
    \16\ The requirements for QIBs are set forth in Rule 144A.
    \17\ See note 8, supra.
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    Security Designation: PORTAL designation is limited to those Rule
144A securities that are initially sold to QIBs by a broker-dealer
acting as initial placement agent or initial purchaser. Nasdaq would
continue to qualify ``restricted securities,'' as that term is defined
in SEC Rule 144(a)(3),\18\ and securities that are restricted pursuant
to contract or through the terms of the security, for designation as
PORTAL securities based on, among other things, the requirements for
the resale of a security under Rule 144A(d)(3) and (d)(4).\19\ Nasdaq
would have authority under the PORTAL Rules to suspend or terminate the
designation of a PORTAL security, thus removing the ability to
negotiate trades in the security through PORTAL.
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    \18\ 17 CFR 230.144(a)(3).
    \19\ 17 CFR 230.144A(d)(3) and (d)(4). Nasdaq has represented
that in the future, it will consider allowing Regulation D
securities to participate in PORTAL so long as PORTAL Market
Information would continue to be available only to PORTAL
Participants. See Response to Comments, infra note 29, at 3.
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    Broker-Dealer Access: Nasdaq members that meet the PORTAL
qualification requirements would be designated as ``PORTAL Dealers,''
who could trade as principal, and ``PORTAL Brokers,'' who would act as
agent for customers. PORTAL Dealers and PORTAL Brokers would be
permitted to post anonymous one- or two-sided indicative quotations in
PORTAL securities. In addition, PORTAL Dealers and PORTAL Brokers would
be permitted to negotiate anonymously and execute trades in PORTAL
securities.
    QIB Access: An institution that executes a subscriber agreement,
agrees to comply with the PORTAL rules and meets the $100 million and
other standards in Rule 144A to be a QIB would be qualified by Nasdaq
as a ``PORTAL Qualified Investor.'' PORTAL Qualified Investors would be
permitted to access the PORTAL Market through a password protected
linkage and view quotations of PORTAL Dealers and PORTAL Brokers, and
confirm transactions when the PORTAL Qualified Investor uses a PORTAL
Dealer or PORTAL Broker to execute a trade in PORTAL. PORTAL Qualified
Investors would not be permitted to enter quotations in the PORTAL
system or enter orders directly into PORTAL.
    Trade Negotiation/Execution: PORTAL has electronic negotiation
features that allow PORTAL Dealers and PORTAL Brokers to negotiate both
openly and anonymously and execute trades in PORTAL securities. All
quotes in PORTAL would be indicative. PORTAL Qualified Investors would
not be permitted to participate in negotiations. Once an anonymous
trade was negotiated in PORTAL, the identity of the counter-parties
would be revealed to each other for purposes of comparison,
confirmation, and settlement of the trade.
    Trade Reporting: Trade reports in reportable PORTAL debt and equity
securities pursuant to NASD Rule 6732 would be forwarded by Nasdaq to
TRACE and the OTC Reporting Facility, respectively.
    Dissemination of PORTAL Trade Report Information: All trade report
information for trades negotiated via PORTAL would be disseminated in
PORTAL to PORTAL Brokers, PORTAL Dealers, and PORTAL Qualified
Investors (``PORTAL Participants''), but would not include the identity
of the parties and, in the case of PORTAL debt, would not aggregate or
otherwise follow the dissemination protocols applicable to debt trades
reported to TRACE.\20\ PORTAL Participants would be prohibited from
disclosing any PORTAL Market information, including quotations,
transactions, and other information \21\ displayed in the PORTAL Market
(``PORTAL Market Information''), to any party other than another PORTAL
Participant. Nasdaq would not disseminate PORTAL Market Information to
the public.
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    \20\ See Notice, 72 FR at 23877. To quote, execute, and view
trade report information on any Rule 144A investment-grade debt
security in PORTAL, the security must be qualified as a PORTAL
security. Trade report information on Rule 144A investment-grade
debt that is not a PORTAL security cannot be viewed in PORTAL.
    \21\ ``Other information'' may include information such as which
other PORTAL Participants are in the system, for example.
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    Settlement: Trades in equity securities that have been compared and
confirmed will be forwarded automatically to an appropriate subsidiary
of Depository Trust & Clearing Corporation (``DTCC'') for settlement.
Nasdaq also intends, at a future date, to provide the ability to
forward all PORTAL trades in debt securities to an appropriate
subsidiary of DTCC for settlement.
    Regulatory Surveillance: NASD currently provides and would continue

to provide surveillance of the trade reports in PORTAL securities that
are submitted through TRACE and the OTC Reporting Facility. Real-time
surveillance of quoting and trading activity in PORTAL will be
conducted by Nasdaq's MarketWatch Department.
    SEC Exemptions: Nasdaq has requested exemptions and no-action
relief so that the PORTAL Market can operate as described in this
filing.\22\ In summary, Nasdaq requested the following exemptions: Rule
15c2-11 under the Act to allow broker-dealers to post quotations in
PORTAL securities without gathering the information required by that
rule; \23\ Section 12(a) \24\ of the Act which requires securities
traded on a national securities exchange to be registered, to permit
Nasdaq members to trade securities that are not registered under
section 12(b) of the Act; \25\ and staff no-action relief from Section
12(g) of the Act \26\ to permit foreign private issuers to continue to
be eligible for the exemption under Rule 12g3-2(b) under the Exchange
Act.\27\
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    \22\ In connection with its approval of PORTAL in 1990 (see note
8, supra), the Commission issued similar exemptions. See letter to
Frank J. Wilson, Executive Vice President and General Counsel, NASD
(``Wilson''), from Mary E.T. Beach, Associate Director, Division of
Corporation Finance, Commission, dated January 16, 1990, and letter
to Wilson from Jonathan G. Katz, Secretary, Commission, dated April
27, 1990.
    \23\ 17 CFR 240.15c2-11. See letter from Thomas P. Moran,
Associate General Counsel, Nasdaq, to James A. Brigagliano,
Assistant Director, Division of Market Regulation, Commission, dated
June 28, 2007.
    \24\ 15 U.S.C. 78l(a).
    \25\ 15 U.S.C. 78l(a) and 15 U.S.C. 78l(b). See letter to Nancy
M. Morris, Secretary, Commission, from Thomas P. Moran, Associate
General Counsel, Nasdaq, dated June 28, 2007.
    \26\ 15 U.S.C. 78l(g).
    \27\ 17 CFR 240.12g3-2(b). See letter to Paul Dudek, Chief
Counsel, Division of Corporation Finance, Commission, from Thomas P.
Moran, Associate General Counsel, Nasdaq, dated July 24, 2007.
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III. Comments

    Seven comment letters were received on the proposal. The letters
from NYPPEX, TechNet, and the Council on Competitiveness expressed
general support for the proposal.\28\ The letters from SIFMA and FBR
raised questions and issues discussed below. Nasdaq responded to those
comments.\29\
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    \28\ Mr. McGuire submitted a one-line, non-substantive e-mail
regarding the proposal.
    \29\ See letters to Nancy M. Morris, Secretary, Commission, from
Thomas P. Moran, Associate General Counsel, Nasdaq, dated June 28,
2007 and July 23, 2007 (``Response to Comments'').
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A. SIFMA

    In its comment letter, SIFMA sought clarification on numerous
points, including: trade reporting (the scope of information that would
be reported, who would be responsible for submitting the information,
and the timing of submission); the information that would be
disseminated to PORTAL Participants; the role of third-party vendors in
the dissemination of PORTAL Market Information; the extent to which
PORTAL Qualified Investors would have direct access to the trading and
negotiation functionality of PORTAL; and the rationale for limiting
order size. In its Response to Comments, Nasdaq provided further
explanation and details regarding these points.\30\
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    \30\ See Response to Comments, supra note 29, at 2-4 and 7-8.
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    SIFMA expressed concern regarding dissemination of PORTAL Market
Information. SIFMA requested that Nasdaq consider whether dissemination
of any trade information regarding PORTAL securities is necessary or
beneficial and whether such dissemination would negatively affect
liquidity and the willingness of investors to commit capital in
unregistered securities. Nasdaq responded, in part, that it believes
dissemination of information to PORTAL Participants is likely to
increase their ability to make better informed decisions, thereby
increasing confidence and liquidity in the market for 144A securities.
    SIFMA also suggested that if trade report information is to be
disseminated to PORTAL Participants, dissemination should follow
protocols currently applicable to trade report information provided to
TRACE \31\ and the OTC Reporting Facility to avoid immediately exposing
``trading patterns and intentions of market participants.'' Nasdaq
responded that it disagrees and does not believe dissemination of
transaction information should be restricted based on limits or time
periods applicable to TRACE or the OTC Reporting Facility, because
participation in PORTAL is voluntary, and PORTAL Participants know that
their trades will be immediately disseminated to other PORTAL
Participants and, if required, reported for regulatory purposes.\32\
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    \31\ SIFMA states that TRACE provides that the volumes for
investment grade securities are capped at five million, and volumes
for non-investment grade securities are capped at one million.
    TRACE does not provide information on mortgage- or asset-backed
securities or collateralized mortgage obligations. See NASD Rule
6710. NASD Rule 6230 requires that trades be reported with 15
minutes.
    \32\ Nasdaq stated that it is willing to consider modifying the
dissemination parameters of PORTAL debt trades in the system to
follow current TRACE standards where the quantity for individual
debt trades disseminated is capped at five million for investment-
grade securities, and one million for non-investment grade
securities. See Response to Comments, supra note 29, at 3.
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    SIFMA also raised concerns with respect to regulatory jurisdiction.
First, SIFMA encouraged Nasdaq, the NASD, and the SEC to work together
with respect to PORTAL to avoid overlapping and potentially
inconsistent regulation. Nasdaq stated it agrees that regulatory
inconsistencies should be avoided where possible, and noted that the
proposal is not expected to materially increase any such burdens.
    Next, SIFMA took issue with the requirement that access to the
system as a PORTAL Broker or PORTAL Dealer is limited to Nasdaq members
and sought clarification of Nasdaq's scope of authority over PORTAL
Qualified Investors under proposed Rule 6513 (Compliance with Rules and
Registration Requirements). Nasdaq noted that since PORTAL is a trading
facility of the Nasdaq exchange, execution access to its system must be
limited to Nasdaq members registered as PORTAL Brokers and PORTAL
Dealers. Nasdaq has limited authority over non-members.
    With regard to SIFMA's request for clarification regarding the
appropriate scope of Nasdaq's authority over PORTAL Qualified
Investors, Nasdaq acknowledged that its regulatory authority over those
participating in PORTAL is limited to PORTAL Brokers and PORTAL
Dealers, as these would be the only PORTAL Participants that are
required to be Nasdaq members and thus subject to Nasdaq's regulatory
jurisdiction. Nasdaq stated that it had included PORTAL Qualified
Investors in the rule in error. In Amendment No. 4, Nasdaq amended Rule
6513 to reflect that Nasdaq's authority to discipline a participant for
failure to comply with any of the rules or requirements applicable to
the PORTAL Market extends only to PORTAL Brokers and PORTAL Dealers.
Nasdaq does not have authority to discipline PORTAL Qualified Investors
that are not Nasdaq members. It can enforce, however, the PORTAL rules
through its ability to approve, deny, suspend or terminate the
registration of an investor as a PORTAL Qualified Investor.\33\
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    \33\ See Proposed Rule 6506(c).
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    Finally, SIFMA argued that the subscriber and related agreements
should be included in the proposal. Nasdaq stated that the SEC does not
routinely require commercial agreements of an SRO to be filed, and
Nasdaq believes that nothing in the present proposal should require
inclusion of these agreements. SIFMA commented that Nasdaq should make
its exemptive requests public so that its members may review the legal
analysis

and policy basis for those requests. Nasdaq declined and noted that it
is not the general practice of the SEC to seek public comment on
exemptions, and Nasdaq does not believe that the Commission needs to do
so for this proposal.

B. FBR

    FBR's comments focused on three areas: The PORTAL Qualified
Investor concept; accredited investors; and depository eligibility.
    First, FBR argues that limiting participation in the PORTAL Market
to PORTAL Qualified Investors, and limiting access to PORTAL Market
Information to those participants, will create a hidden market. FBR
believes that PORTAL Brokers and PORTAL Dealers should be permitted to
share PORTAL Market Information with anyone who is eligible to sell
restricted shares pursuant to Rule 144A, including Accredited Investors
and all QIBs. FBR states that its inability to share PORTAL Market
Information with its customers is in conflict with its obligations
under the securities laws and rules and NASD Rules, to treat customers,
who are qualified to buy and sell under Rule 144A, fairly.
    Nasdaq responds that nothing in its proposal prevents FBR from
sharing PORTAL Market Information with its QIB customers so long as
those customers are qualified as PORTAL Qualified Investors by Nasdaq.
Nasdaq states that the limitation exists to ensure that Nasdaq has
reasonable procedures to prevent pricing information from reaching non-
QIBs, given that it is an SRO responsible for enforcing its rules.
Further, Nasdaq notes that the dissemination by PORTAL Dealers and
PORTAL Brokers of PORTAL Market quotations and last sale report
information of other PORTAL Dealers and PORTAL Brokers to investors not
qualified by Nasdaq could constitute a prohibited general solicitation
under Rule 144A.
    Nasdaq does, however, agree that restrictions on dissemination of
PORTAL Market Information could prohibit a PORTAL Dealer from sharing
its own quote in a PORTAL security with its own customers.\34\ Nasdaq
stated it would consider how to modify the rules before PORTAL is
operational so that restrictions on transmission of PORTAL information
do not apply to a PORTAL Dealer's provision of its proprietary quote
information to an established customer of that dealer,\35\ however, FBR
argues that this is not an acceptable modification because it could
result in a situation in which a PORTAL Broker or PORTAL Dealer is
permitted to disclose to its customers certain prices that are
available but are not the best price if the PORTAL Broker or PORTAL
Dealer is not itself quoting at the best price. Further, FBR notes, the
modification would not permit disclosure of last sale information. FBR
believes that such a result would not be in the best interest of
investors and could violate a broker-dealer's duty of fair dealing and
subject them to liability under Rule 10b-5 under the Exchange Act.
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    \34\ See Response to Comments, supra note 29, at 10.
    \35\ Id. Any such change must be filed as a proposed rule change
with the Commission.
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    FBR also believes that Nasdaq's proposed requirement that QIBs be
approved by Nasdaq in order to have access to PORTAL Market Information
is a departure from the PORTAL Rules that were approved by the
Commission when the PORTAL Market was first established.\36\ Nasdaq
notes that PORTAL will operate under uniform, explicit standards
governing access and information receipt, and a QIB would incur only
modest costs to become a PORTAL Qualified Investor if it wants access
to PORTAL Market Information. Further, Nasdaq points out that the
original PORTAL Market was intended to be an entirely ``closed''
system. Investors were only permitted to execute a transaction in a
PORTAL security if the investor registered as a PORTAL Qualified
Investor and then executed the transaction through a PORTAL Dealer or
PORTAL Broker through the PORTAL system. Therefore, Nasdaq argues,
there was no need in the original PORTAL system to restrict the
dissemination of PORTAL Market Information outside of the PORTAL
Market.
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    \36\ See note 6, supra.
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    Finally, FBR argues that depository eligibility of a security
should not be premised on PORTAL eligibility. FBR argues that DTC's
rule requiring Rule 144A securities to be included in an SRO system for
the reporting of quotation and trade information of resale
transactions, in order for those securities to be eligible for DTC's
depository services is unnecessary and could impede competition between
Nasdaq and alternative trading systems (``ATSs''). Currently, PORTAL is
the only facility that satisfies the eligibility standard. Nasdaq
disagrees and points out that nothing in DTC's rules would preclude
another SRO from establishing and operating a system for quoting,
trading, and reporting Rule 144A securities and thereby be eligible to
obtain DTC's depository services on behalf of such securities.

IV. Discussion and Commission Findings

A. Sections 6 and 11A(a)(1) of the Act

    After careful consideration of the proposal, the comment letters,
and Nasdaq's Response to Comments, the Commission finds that the
proposed rule change is consistent with the provisions of section 6 of
the Act,\37\ in general and with section 6(b)(5) of the Act,\38\ in
particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to a free and open market
and a national market system, and, in general, to protect investors and
the public interest. The PORTAL Market will facilitate the trading of
Rule 144A securities and will provide a centralized system for the
display of interest in Rule 144A securities. Rule 144A(d) conditions
the exemption from registration of securities pursuant to Section 5 of
the Securities Act \39\ on offering and selling the securities only to
QIBs. Consequently, Nasdaq structured the PORTAL Market as a closed
system for trading of Rule 144A securities among QIBs. Nasdaq has
implemented procedures to qualify QIBs under its rules. In light of
Nasdaq's procedures as described in the proposed rule change, PORTAL
Participants may rely on Nasdaq's procedures for establishing a
reasonable belief that a prospective purchaser is a QIB.\40\
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    \37\ 15 U.S.C. 78f.
    \38\ 15 U.S.C. 78f(b)(5).
    \39\ 15 U.S.C. 77e.
    \40\ If all the conditions in Rule 144A(d) are not met,
transactions in restricted securities may be deemed distributions
and persons offering or selling such securities may be deemed
underwriters within the meaning of Sections 2(a)(11) and 4(1) of the
Securities Act or a participant in a distribution of securities with
the meaning of Section 4(3)(C) of the Securities Act. See discussion
at nn. 9-13, supra.
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    In addition, the Commission believes that the proposed rule change
is consistent with the goals of section 11A(a)(1) of the Act.\41\
Section 11A(a)(1) articulates the Congressional findings and policy
goals and objectives respecting the development of a national market
system. Essentially, Congress found that new data processing and
communication techniques should be applied to improve the efficiency of
market operations, broaden the distribution of market information,
enhance opportunities to achieve best execution

and promote competition among market participants. That provision
stresses the importance of implementing communication enhancements that
will advance the efficiency and effectiveness of a securities market in
servicing the needs of investors. The Commission believes that the
changes to the PORTAL Market contained in this proposed rule change
should provide these benefits and help to enhance the efficiency of the
market for Rule 144A-eligible securities.
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    \41\ 15 U.S.C. 78k-1(a)(1).
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B. Rule 144A Under the Securities Act

    Because Nasdaq has designed the amendments to the PORTAL Market to
facilitate compliance with Rule 144A, section 6(b)(1) of the Act \42\
also requires a determination as to whether it is reasonably designed
to accomplish this purpose.\43\ The Commission believes that the PORTAL
system is designed so that participants who comply with its
requirements will also be in compliance with the requirements of Rule
144A, assuming they also provide information upon request in compliance
with Rule 144A(d)(4).
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    \42\ 15 U.S.C. 78f(b)(1).
    \43\ Section 6(b)(1) of the Act requires that Nasdaq, as a
national securities exchange, be so organized and have the capacity
to enforce compliance with, among other things, the federal
securities laws. See 15 U.S.C. 78f(b)(1).
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    Rule 144A is available only to institutional investors meeting the
definition of QIB in Rule 144A(a)(1). A seller is required to form a
reasonable belief that a purchaser is a QIB as the term is defined in
Rule 144A(a)(1). With the exception of broker-dealers, a QIB is
required to, in the aggregate, own and invest on a discretionary basis
at least $100 million in securities of non-affiliated issuers. The
proposed amendments to the PORTAL rules require that any investor
applying to qualify as a PORTAL Qualified Investor meet the Rule 144A
standards for QIBs.
    Rule 144A(d)(2) requires that the seller of 144A securities take
reasonable steps to ensure that the purchaser is aware that the seller
may rely on Rule 144A. To meet this requirement of Rule 144A, the
proposed amendments to the PORTAL rules also provide in the designation
requirements for PORTAL Qualified Investors that applicants sign an
undertaking in a subscriber agreement that states that they are aware
that they may purchase a PORTAL security from another QIB who may rely
on an exemption from the provisions of section 5 of the Securities Act
\44\ pursuant to Rule 144A.
---------------------------------------------------------------------------

    \44\ 15 U.S.C. 77(e).
---------------------------------------------------------------------------

    The PORTAL rules also have eligibility requirements for admitting
securities into PORTAL that parallel the Rule 144A eligibility
requirements for securities. The PORTAL rules require that the security
be eligible to be sold pursuant to Rule 144A under the Securities Act.
The application for designation of a PORTAL security requires the
submission of specific information to Nasdaq necessary to support the
applicant's claim that the security meets the requirements of Rule
144A.
    Furthermore, Rule 144A conditions the availability of the exemption
on certain information being available to holders and prospective
purchasers. Rule 144A(d)(4) provides that, with respect to securities
of an issuer that is not subject to section 13 of the Act,\45\ section
15(d) of the Act,\46\ exempt from reporting pursuant to Rule 12g3-2(b)
under the Act,\47\ or a foreign government eligible to register
securities under Schedule B of the Securities Act, the holder and a
prospective purchaser designated by the holder must have the right to
obtain from the issuer, upon request of the holder, and the purchaser
must have received at or prior to the time of sale, upon such
purchaser's request to the holder, certain information about the
issuer. Nasdaq has designed PORTAL to comply with this aspect of Rule
144A because the PORTAL rules currently require that a security meet
these Rule 144A requirements and that the issuer undertake to provide
the information required by Rule 144A(d)(4) where applicable.
---------------------------------------------------------------------------

    \45\ 15 U.S.C. 78m.
    \46\ 15 U.S.C. 78o(d).
    \47\ 17 CFR 240.12g3-2(b).
---------------------------------------------------------------------------

    PORTAL is designed to be a trading market in restricted securities
limited to highly sophisticated investors. In adopting Rule 144A, the
Commission noted that ``[t]he transactions covered by the safe harbor
are private transactions'' that do not require the protections of
section 5 of the Securities Act.\48\ The Commission believes that broad
dissemination of trading information in this limited context is not
desirable. Nasdaq's restricting the information to PORTAL Qualified
Investors to allow Nasdaq to prevent PORTAL Market Information from
reaching non-QIBs in this context is reasonable.
---------------------------------------------------------------------------

    \48\ See note 9, supra.
---------------------------------------------------------------------------

    In addition to designing the PORTAL rules to facilitate compliance
with the requirements of Rule 144A, the proposed rule change would
structure PORTAL to limit the possibility that restricted securities
enter the U.S. retail market by requiring that PORTAL-designated
securities be assigned a CUSIP \49\ number that is different than the
CUSIP number assigned to any securities of the same class that do not
satisfy the eligibility requirements for PORTAL securities. The
security explanation protocol employed by Standard & Poor's related to
the CUSIP number assigned to PORTAL securities specifically
distinguishes those securities from all other publicly-traded and
restricted securities by using the words ``Rule 144A'' and ``PORTAL.''
For these reasons, the Commission believes that PORTAL, as proposed, is
reasonably designed to facilitate compliance with Rule 144A, so long as
there is compliance with the PORTAL rules and procedures.\50\
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    \49\ Committee on Uniform Securities Identification Procedures.
    \50\ The Commission notes that information shall still be
provided on request, regardless of the exemption for PORTAL
securities, as applicable, pursuant to Rule 144A(d)(4). Further,
Rule 6502 authorizes Nasdaq to suspend or terminate a security's
PORTAL designation if a holder or prospective purchaser did not
receive information as required by Rule 144A(d)(4).
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C. Exemptions and No-Action Relief Requests

    The Commission has granted Nasdaq exemptions from Rule 15c2-11
under the Act \51\ to allow brokers and dealers to post quotations in
PORTAL securities without first gathering information required by that
rule \52\ and Section 12(a) \53\ of the Act to permit trading of
securities not registered under section 12(b) \54\ of the Act; \55\ and
the staff has granted no-action relief with respect to section 12(g)
\56\ of the Act to permit foreign private issuers to continue to be
eligible for the exemption under Rule 12g3-2(b) \57\ of the Act.\58\
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    \51\ 17 CFR 240.15c2-11.
    \52\ See letter from James A. Brigagliano, Associate Director,
Division of Market Regulation, Commission, to Thomas P. Moran,
Associate General Counsel, Nasdaq, dated July 31, 2007.
    \53\ 15 U.S.C. 78l(a).
    \54\ 15 U.S.C. 78l(b).
    \55\ See Securities Exchange Act Release No. 56176, (July 31,
2007), Order Granting The NASDAQ Stock Market, LLC's Application for
an Exemption Pursuant to Section 36 of the Securities Exchange Act
of 1934 (``Exemption Order'').
    \56\ 15 U.S.C. 78l(g).
    \57\ 17 CFR 240.12g3-2(b).
    \58\ See letter from Paul Dudek, Chief, Office of International
Corporate Finance, Division of Corporation Finance, Commission, to
Thomas P. Moran, Associate General Counsel, Nasdaq, dated July 31,
2007.
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D. Impact on Competition, Efficiency and Capital Formation

    Section 3(f) of the Act requires that the Commission consider
whether Nasdaq's proposal will promote efficiency, competition, and
capital

formation.\59\ The Commission has considered the merits of the issues
raised by each of the commenters and has concluded that the PORTAL
rules, as proposed, are consistent with the Act.
---------------------------------------------------------------------------

    \59\ 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    The Commission notes that in its response to comments, Nasdaq
provided SIFMA with additional information regarding the operation of
the PORTAL Market and believes Nasdaq sufficiently responded to SIFMA's
comments. The Commission agrees with Nasdaq, in particular, that the
prompt and complete dissemination of PORTAL Market Information to
PORTAL Participants should allow PORTAL Participants to better evaluate
their decisions regarding trading in the PORTAL Market and should
result in increased investor confidence and liquidity in the PORTAL
Market. The Commission also notes that if a PORTAL Participant does not
want its trade information disseminated to other PORTAL Participants,
there is no requirement that the Participant utilize Nasdaq's system
for effecting its trade; use of the PORTAL Market is voluntary.
Furthermore, the Commission agrees that Nasdaq need not make the
subscriber and related agreements part of this proposal, nor does
Nasdaq need to make its exemption requests public.
    The Commission does not believe that Nasdaq's proposal is anti-
competitive because of the eligibility standard in DTC's rules. Nasdaq
does not have any authority with respect to DTC's rules. DTC's rules
provide that DTC is authorized to make 144A securities eligible for
deposit, book-entry delivery, and other depository services, provided
that any such Rule 144A securities are designated for inclusion in a
system of an SRO approved by the Commission for the reporting of
quotation and trade information of Rule 144A transactions.\60\ In
approving the proposed rule change establishing the DTC eligibility
requirement that Rule 144A securities must be included in an SRO Rule
144A System, such as the PORTAL Market, the Commission noted a crucial
feature of any such system would be a requirement that the SRO's
members report trades involving securities using the system on a
routine basis to the SRO, along with information that will facilitate
detection of securities law violations.\61\
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    \60\ See Securities Exchange Act Release No. 33327 (December 13,
1993); 58 FR 57878 (December 22, 1993) (SR-DTC-90-06).
    \61\ Given the evolution in the market for these securities
since DTC's rule was adopted, the Commission believes it would be
reasonable for DTC to review this requirement.
---------------------------------------------------------------------------

    The Commission believes that re-establishing the PORTAL Market as a
quoting and trading system is a reasonable effort by Nasdaq to enhance
the quality of the Rule 144A market by providing a centralized market
and information to QIBs, promoting greater efficiency in executions,
and increasing overall market transparency. While the PORTAL Market
will provide a system for quoting and trading Rule 144A securities, it
does not represent an exclusive means for selling or purchasing Rule
144A securities, nor does it prevent broker-dealers from seeking
alternative trading venues for such transactions.

V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\62\ that the proposed rule change (SR-NASDAQ-2006-065), as
amended, be, and hereby is, approved.
---------------------------------------------------------------------------

    \62\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\63\
---------------------------------------------------------------------------

    \63\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-15288 Filed 8-6-07; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 75, Number 227 (Friday, November 26, 2010)]
[Rules and Regulations]
[Pages 72688-72695]
[FR Doc No: 2010-29397]

=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2009-0656; FRL-9230-3]

Approval and Promulgation of Implementation Plans; New Mexico;
Interstate Transport of Pollution

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: EPA is approving a State Implementation Plan (SIP) revision
submitted by the State of New Mexico

for the purpose of addressing the ``good neighbor'' provisions of the
Clean Air Act (Act or CAA) section 110(a)(2)(D)(i) for the 1997 8-hour
ozone National Ambient Air Quality Standard (NAAQS or standards) and
the 1997 PM2.5 NAAQS. This SIP revision addresses the
requirement that New Mexico's SIP has adequate provisions to prohibit
air emissions from adversely affecting another state's air quality
through interstate transport. In this action, EPA is approving the New
Mexico Interstate Transport SIP provisions that address the requirement
of CAA section 110 (a)(2)(D)(i)(I) that emissions from New Mexico
sources do not interfere with maintenance of the 1997 8-hour ozone
NAAQS and the 1997 PM2.5 NAAQS in any other state. In
addition, EPA is approving the provisions of this SIP submission that
address the requirement of section 110(a)(2)(D)(i)(II) that emissions
from the State's sources do not interfere with measures required in the
SIP of any other state under part C of the CAA to prevent ``significant
deterioration of air quality.'' For purposes of the 8-hour ozone NAAQS,
EPA is also approving a SIP revision that modifies New Mexico's
Prevention of Significant Deterioration (PSD) SIP for the 1997 8-hour
ozone NAAQS to include nitrogen oxides (NOX) as an ozone
precursor. This action is being taken under section 110 and part C of
the Act.

DATES: This final rule will be effective December 27, 2010.

ADDRESSES: EPA has established a docket for this action under Docket
Identification No. EPA-R06-OAR-2009-0656. All documents in the docket
are listed at http://www.regulations.gov. 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 Planning Section (6PD-L), 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 (FOIA) 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.

FOR FURTHER INFORMATION CONTACT: Emad Shahin, Air Planning Section
(6PD-L), Environmental Protection Agency, Region 6, 1445 Ross Avenue,
Suite 700, Dallas, Texas 75202-2733, telephone<PHONE_NUMBER>; fax
number<PHONE_NUMBER>; e-mail address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,''
``us,'' or ``our'' is used, we mean the EPA.

Outline

I. What action is EPA taking?
II. What is the background for this action?
III. What comments did EPA receive and how has EPA responded to
them?
IV. Final Action
V. Statutory and Executive Order Reviews

I. What action is EPA taking?

    We are approving a submission from the State of New Mexico
demonstrating that New Mexico has adequately addressed two of the
required elements of the CAA section 110(a)(2)(D)(i), the element that
prohibits air pollutant emissions from sources within a state from
interfering with the maintenance of the relevant NAAQS in any other
state, and the element that prohibits those pollutants from interfering
with measures required in the SIP of any other state under part C of
the CAA to prevent significant deterioration of air quality.
    We have determined that emissions from sources in New Mexico do not
interfere with the maintenance of the 1997 8-hour ozone NAAQS or the
1997 PM2.5 NAAQS or with measures required to prevent
significant deterioration of air quality with regards to these ozone or
PM2.5 NAAQS in any other state. Because we have determined
that emissions from New Mexico sources do not interfere with
maintenance of these NAAQS, or interfere with measures required to
prevent significant deterioration of air quality in any other state,
sections 110(a)(2)(D)(i)(I) and (II) do not require any substantive
changes to New Mexico's SIP for these purposes. EPA published a prior
final rule (75 FR 33174) on June 11, 2010 approving the New Mexico SIP
submission for the ``significant contribution to nonattainment'' prong
of section 110(a)(2)(D)(i). The remaining element of section
110(a)(2)(D)(i), which pertains to interference with measures required
to protect visibility in any other state, will be addressed in a future
rulemaking.
    In conjunction with our finding that emissions from sources in New
Mexico are not interfering with any other state's PSD program, we are
also approving New Mexico's submitted rule revisions to regulate
NOX emissions as a precursor to ozone in its PSD permit
program. EPA intends to act on the other revisions submitted together
with the PSD program revisions at a later time.

II. What is the background for this action?

    On July 18, 1997, EPA promulgated new NAAQS for 8-hour ozone and
fine particulate matter (PM2.5). This action is being taken
in response to the 1997 8-hour ozone NAAQS and PM2.5 NAAQS.
This action does not address the requirements for the 2006
PM2.5 NAAQS or the 2008 8-hour ozone NAAQS; those standards
will be addressed in later actions.
    Section 110(a)(1) of the CAA requires states to submit SIPs to
address a new or revised NAAQS within 3 years after promulgation of
such standards, or within such shorter period as EPA may prescribe.
Section 110(a)(2) lists the elements that such new SIPs must address,
as applicable, including section 110(a)(2)(D)(i), which pertains to
interstate transport of certain emissions. On August 15, 2006, EPA
issued its ``Guidance for State Implementation Plan (SIP) Submission to
Meet Current Outstanding Obligations Under Section 110(a)(2)(D)(i) for
the 8-Hour Ozone and PM2.5 National Ambient Air Quality
Standards'' (2006 Guidance). EPA developed the 2006 Guidance to make
recommendations to states for making submissions to meet the
requirements of section 110(a)(2)(D)(i) for the 1997 8-hour ozone NAAQS
and 1997 PM2.5 NAAQS. As identified in the 2006 Guidance,
the ``good neighbor'' provisions in section 110(a)(2)(D)(i) require
each state to submit a SIP that prohibits emissions that adversely
affect another state in the ways contemplated in the statute. Section
110(a)(2)(D)(i) contains four distinct requirements related to the
impacts of interstate transport. The SIP must prevent sources in the
state from emitting pollutants in amounts which will: (1) Contribute
significantly to nonattainment of the NAAQS in other states; (2)
interfere with maintenance of the NAAQS in other states; (3) interfere
with provisions to prevent significant deterioration of air

quality in other states; or (4) interfere with efforts to protect
visibility in other states.
    On September 17, 2007, EPA received a SIP revision from the State
of New Mexico intended to address the requirements of section
110(a)(2)(D)(i) for both the 1997 8-hour ozone standards and the 1997
PM2.5 standards. On June 11, 2010, EPA found that emissions
from New Mexico do not contribute significantly to nonattainment of the
NAAQS in other states (75 FR 33174). In this rulemaking, EPA is
addressing the requirements that pertain to preventing sources in New
Mexico from emitting pollutants that will interfere with maintenance of
the 1997 8-hour ozone NAAQS and the 1997 PM2.5 NAAQS in
other states, or that will interfere with measures required to prevent
significant deterioration of air quality in other states with respect
to these NAAQS. In its submission, the State of New Mexico demonstrated
that its current SIP is adequate to prevent such interference, and thus
argued that no additional emissions controls are necessary at this time
to alleviate interstate transport for the 1997 8-hour ozone NAAQS or
the 1997 PM2.5 NAAQS. With the submission, the State meets
the second and third elements of section 110(a)(2)(D)(i). On August 27,
2010, we published a proposed rule to approve the portion of New
Mexico's SIP submission that addressed the two elements that pertain to
prohibiting air pollutant emissions from within New Mexico from
interfering with maintenance of the 1997 8-hour ozone and 1997
PM2.5 NAAQS or with measures required in the SIP of any
other state under part C of the CAA to prevent significant
deterioration of air quality in any other state (75 FR 52692). We
simultaneously proposed to approve New Mexico's September 21, 2009
submittal that adds NOX as an ozone precursor in its PSD
rules. For EPA's full analysis on the approvability of these SIP
submittals, please see that proposal. EPA received adverse comments
regarding the ``interfere with maintenance'' element during the comment
period, and accordingly EPA is responding to those comments in today's
final action.

III. What comments did EPA receive and how has EPA responded to them?

    EPA received one comment letter on the August 27, 2010 proposed
rule. The letter can be found on the internet in the electronic docket
for this action. To access the letters, please go to http://www.regulations.gov and search for Docket No. EPA-R06-OAR-2007-0993, or
contact the person listed in the FOR FURTHER INFORMATION CONTACT
paragraph above. The discussion below addresses those comments and our
response.
    Comments from WildEarth Guardians.
    Comment No. 1--The commenter stated that EPA inappropriately
defined the term ``interfere with maintenance.'' It argued that EPA's
definition appeared to be ``inappropriately conflated with the
definition of nonattainment.'' It argued that the definition of
maintenance appeared to be tied to nonattainment, asserting that
``unless an area has violated or is in violation of the NAAQS, the
agency will not consider whether New Mexico is interfering with that
area's ability to maintain compliance with the NAAQS.'' For this
reason, it argued EPA did not give independent meaning to the
``interfere with maintenance'' prong of section 110(a)(2)(D)(i)(I).
    EPA Response: The definition of maintenance used by EPA is
consistent with the direction given to EPA by the Court of Appeals for
the DC Circuit in North Carolina v.  EPA, 531 F.3d 896 (DC Cir.
2008).\1\ In that case, the court analyzed the definition of
``interfere with maintenance'' used in the Clean Air Interstate Rule
(CAIR). The court found that the definition EPA used ``gave no
independent significance to the `interfere with maintenance' prong of
section 110(a)(2)(D)(i)(I) to separately identify upwind sources
interfering with downwind maintenance.'' Id. at 910. It further
reasoned that ``[u]nder EPA's reading of the statute, a state can never
`interfere with maintenance' '' unless EPA determines that at one point
it ``contribute[d] significantly to nonattainment.'' Id. at 910. Based
on this analysis, the court found the definition unlawful holding that
``[b]ecause EPA describes CAIR as a complete remedy to a section
110(a)(2)(D)(i)(I) violation and does not give independent significance
to the `interfere with maintenance' language to identify upwind states
that interfere with downwind maintenance, EPA unlawfully nullifies that
aspect of the statute and provides no protection for downwind areas
that, despite EPA's predictions, still find themselves struggling to
meet NAAQS due to upwind interference in 2010.'' Id. at 910-911.
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    \1\ As EPA noted in the proposal, the term ``interfere with
maintenance'' is not defined in the CAA. As such, the term is
ambiguous and EPA's interpretation of that term in this action is
both reasonable and consistent with the overall goals of the CAA. By
this approach, EPA is giving independent meaning to the term and
supporting that interpretation with technical analysis to apply it
to the facts of this action.
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    The approach used by EPA to evaluate New Mexico's SIP submission
and to determine whether emissions from sources in New Mexico interfere
with maintenance in any other state directly addresses these flaws. It
gives significant independent meaning to the term ``interfere with
maintenance.'' It establishes a process to identify any specific
receptors in downwind states that, even though they are projected to be
in attainment and thus would not be nonattainment receptors, may have
difficulty maintaining the NAAQS in question. These receptors are
referred to as maintenance receptors.
    The methodology EPA used to identify maintenance receptors gives
independent meaning to the term ``interfere with maintenance'' and
establishes a process to identify projected attainment receptors that,
based on the historic variability of air quality at that site (which
may be due to variability in emissions and/or meteorology), may have
difficulty maintaining the standard. As explained in greater detail
below, the commenter's objection to EPA's approach appears to be based
on the misconception that the methodology EPA used to identify
maintenance sites was dependent on base year NAAQS violations.
    The commenter's statement that EPA's designation of maintenance
receptors is ``firmly hitched to a finding that the maximum design
value based on a single three-year period between 2003 and 2007 is in
excess of the NAAQS'' appears to be based on a misunderstanding of the
methodology used by EPA to identify maintenance receptors. EPA's
methodology did not, as the commenter appears to assume, require a site
to have a design value above the NAAQS for one of the three base
periods (2003-2005, 2004-2006, 2005-2007) to be considered a
maintenance site. The methodology is based on an analysis of the future
year average and future year maximum design values. It does not depend
on whether the base year design values exceed the NAAQS. In the
proposal, EPA explained that ``EPA identified those sites that are
projected to be attainment based on the 5-year weighted average design
value, but that have a maximum design value (based on a single three-
year period) that exceeds the NAAQS, as maintenance sites.'' (75 FR
52697). The maximum design value referenced in this sentence is the
maximum future design value calculated using each of the three base
design value periods separately. Whether or not one of the three base

period design values exceeded the NAAQS was not a factor considered in
determining whether a site was a maintenance receptor.
    To better understand this concept, it is useful to compare the
methodologies used in the Transport Rule (TR) proposal (75 FR 45210
(August 2, 2010)) to identify nonattainment and maintenance receptors.
In the TR proposal, base period (2003-2007) ambient data were projected
to the future (using model outputs), to identify both nonattainment and
maintenance receptors. In both cases, receptors were identified by
projected future design values; however, because more conservative data
were used for the maintenance analysis, this analysis could identify
receptors that were projected by the nonattainment analysis to be in
attainment, yet might have difficulty attaining the standard due to
historic variability of air quality at that site. To identify future
nonattainment sites EPA calculated the future year design values by
projecting the 5-year weighted average design value for each site. Only
if this future year design value exceeded the NAAQS was the site
considered to be a nonattainment receptor. However, to identify
projected maintenance sites EPA used a different methodology that took
into account historic variability in air quality at each receptor. For
this approach EPA calculated the maximum future year design value by
processing each of the three base design value periods (2003-2005,
2004-2006, and 2005-2007) separately. The highest of the three future
values is the maximum design value, which is used to determine
maintenance receptors.
    In this way, EPA's analysis identifies those areas that are
projected to be in attainment, but may have difficulty maintaining
attainment of the standard, for example in a year with particularly
severe meteorology (weather that is conducive to ozone and/or
particulate formation). In other words, this analysis does exactly what
the DC Circuit directed EPA to do in North Carolina, 531 F.3d 896. It
gave independent meaning to the ``interfere with maintenance'' prong of
110(a)(2)(D) and is providing protection to any areas that, although
they are predicted to attain the standard (and thus upwind sources
could not be found to significantly contribute to nonattainment in that
area) may have difficulty maintaining the standard. Id. at 911.
    EPA used this same approach to identify any potential maintenance
receptors for purposes of evaluating New Mexico's SIP submission. For
the reasons explained above, this approach is both reasonable and
consistent with the direction given to EPA by the DC Circuit in North
Carolina, 531 F.3d 896.
    Comment No. 2--The commenter cited a variety of information
suggesting that receptors in the Denver/North Front Range (Denver/NFR)
area should also be considered for maintenance purposes under
110(a)(2)(D)(i) in this action. The commenter points out that as EPA
itself has stated that ``Data for 2005-2007 and 2006-2008 reflect
violations of the 8-hour ozone NAAQS at the Rocky Flats North monitor
(values of {0.085{time}  and 0.086 ppm, respectively).'' The commenter
also argued that modeling prepared in conjunction with Colorado's
Denver/NFR attainment demonstration shows that by 2010, the three-year
design value is only projected to be lowered to 0.084 parts per
million, barely in compliance with the NAAQS, and that certain portions
of the Denver/NFR area of Colorado would violate the 1997 ozone NAAQS
in 2010 at grid cells west of Fort Collins. The commenter referenced
several documents that are part of the Colorado's Denver/NFR 8-hour
Ozone Attainment Demonstration in support of its arguments. The
commenter cited the report's language that indicated that the modeling
projection of a value above the 1997 8-hour standard to the west of
Fort Collins is not ``implausible'' explaining, ``In the case of the
Denver ozone modeling, higher ozone concentrations are estimated west
of Fort Collins than at the locations of the two monitors in Fort
Collins on some days and this does not appear to be an error in the
modeling system''.\2\
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    \2\ Commenter referenced the Colorado Department of Public
Health and Environment's ``2010 Ozone Attainment Demonstration
Modeling for the Denver 8-hour Ozone State Implementation Plan
Control Strategy'' and the Environ modeling report ``Final 2010
Ozone Attainment Demonstration Modeling for the Denver 8-hour Ozone
State Implementation Plan.''
---------------------------------------------------------------------------

    The commenter argued that EPA's failure to consider the Denver/NFR
area as a receptor for evaluating interference with maintenance in this
action reflects the very problem that the DC Circuit warned could
result without giving independent meaning to the term ``interfere with
maintenance.'' The commenter asserted that EPA's own modeling (CENRAP
modeling with 2002 emission inventory) indicated that sources in New
Mexico contribute more than 2 parts per billion (up to 5% of Denver/NFR
area's total concentrations) of ozone on days when exceedances of the
1997 8-hour standard are projected in Denver/NFR.\3\ The commenter
stated that EPA has rejected this modeling information because it used
outdated emission data without any indication that it is invalid or
fails to indicate that sources within New Mexico may interfere with
maintenance in Colorado.\4\
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    \3\ EPA Source Apportionment Modeling using a version of the
CENRAP modeling database with a 2002 Emission Inventory.
    \4\ Commenter referenced 75 FR pages 33182-33183.
---------------------------------------------------------------------------

    EPA's Response--EPA disagrees with the commenter's argument that
EPA has inappropriately identified the correct monitors for maintenance
receptors. As discussed in greater detail in the previous response to
comment, EPA has selected a method that identifies maintenance
receptors separately from nonattainment receptors and gives an
independent meaning to the interfere with maintenance prong of section
110(a)(2)(D)(i). EPA has consistently applied this method to all
potential receptors in States potentially impacted by New Mexico's
emissions including those in the Denver/NFR area.
    The commenter's argument EPA did not consistently identify
maintenance receptors is premised on the same fundamental
misunderstanding discussed in response to comment 1--that
EPA's identification of nonattainment receptors was based on current or
past NAAQS violations. As explained above, this is not correct. EPA did
not base its identification of maintenance receptors on an analysis of
whether air quality at those receptors exceeded the NAAQS in the base
years. The methodology EPA used to identify maintenance areas takes
into account historic variability of emissions at specific monitoring
sites to analyze whether or not monitoring sites projected to be in
attainment in 2012 will nonetheless remain at risk of slipping into
nonattainment in that year. The commenter provided a number of modeling
or monitoring analyses for 2010 or earlier. As we have addressed in
responses elsewhere in this notice, EPA continues to believe 2012 is
the appropriate year for this analysis. Thus, modeling or monitoring
data for other years is not directly relevant to this rulemaking.
Nonetheless, below we address the commenter's specific assertions about
the modeling.
    The commenter asserts that monitoring data for 2005-07 and 2006-08
for the Rocky Flats North monitor reflect violations of the 8-hour
NAAQS and therefore EPA should consider this Rocky Flats North monitor
as a ``maintenance receptor.'' The commenter further cites modeling
prepared in conjunction with Colorado's Denver/NFR attainment
demonstration to support its assertion that EPA has

applied inconsistently its definition of interference with maintenance.
The modeling data referenced by the commenter, however, only identifies
monitors that, in the commenter's view, are at risk of being in
nonattainment or having maintenance problems in 2010. The monitoring
data cited indicates high ozone levels in the past. The underlying
issue raised is thus substantively the same as that raised in comment
no. 3 below which argues that EPA's analysis is faulty because it
identifies receptors likely to have difficulty maintaining the standard
in 2012 and not at the present or in the past. EPA's response to
comment no. 3 below, illustrates how its approach, based on modeling
analyses that identify receptors at risk for maintenance in the year
2012, is appropriate and consistent with the DC Circuit decision in
North Carolina v. EPA.
    EPA's method is based on model projection values that take into
account multi-year variability in ozone data at specific monitors. For
identification of maintenance receptors, EPA utilized the monitoring
data from the 2003-2007 period to calculate 2012 future year modeling
design value projections. The 2003-07 period includes three Design
Value (DV) periods (2003-2005, 2004-2006, and 2005-2007). The 2012
future year DVs were calculated by multiplying a 3-year DV (base year)
by the ratio of the Future Year average of the daily 8-hour ozone
maximums around a monitor over the Base Year average of the daily 8-
hour ozone maximums around a monitor. This calculation was performed
for each of the three 3-year DVs (2003-2005, 2004-2006, and 2005-2007).
This approach yielded three different projected 2012 design values and
thus, tests for variability in meteorology. If any of the three 2012
projections was above the 1997 ozone standard, then the receptor would
be considered a maintenance receptor. None of the 2012 projections for
the Denver/NFR area was above the standard so the area was not
considered a maintenance area. This approach was the same as the
approach used for every potential receptor evaluated. It is worth
noting that EPA's analysis included the 2005-2007 data for the Rocky
Flats monitor (which is one of the highest monitored DVs in recent
years for this monitor) that the commenter raised as a concern and
pursuant to its methodology as previously described EPA's analysis
determined that the Rocky Flats monitor would not be a maintenance
receptor in 2012.
    Further, EPA disagrees with commenter's conclusion that the
modeling performed for the Denver/NFR attainment demonstration with the
2010 model projections establishes that any of the areas identified
will have maintenance problems for the 1997 8-hour ozone NAAQS. We
disagree with the commenter's conclusion that the Denver/NFR area
monitors should be identified as ``maintenance receptors'' in large
part because he bases his conclusion on projections for 2010 instead of
2012. This modeling used projections for 2010 not 2012, which as
explained above and in response to comment no. 3 below is not the
correct year for comparison, given the approach EPA has developed for
determining maintenance receptors. EPA's analysis of maintenance
receptors, which is based on the approach developed in the Transport
Rule Proposal to be consistent with the DC Circuit's opinion in North
Carolina v. EPA and uses projections for 2012, did not identify any
maintenance receptors in the Denver/NFR area. This conclusion is
consistent with evidence suggesting emissions are likely to trend
downward (for example, with two more years of fleet turnover, this
modeling would likely have projected lower levels of ozone in 2012) and
preliminary monitoring data for 2010, which indicates that the Denver/
NFR area is meeting the 1997 ozone standard. Further, EPA has reviewed
Colorado's attainment demonstration for the Denver/NFR area and
proposed that the combination of the modeling and Weight of Evidence
analyses demonstrates that Denver will be in attainment in
2010.5 6
---------------------------------------------------------------------------

    \5\ EPA's ``Guidance on the Use of Models and Other Analyses for
Demonstrating Attainment of Air Quality Goals for Ozone, PM2.5, and
Regional Haze,'' EPA-454/B-07-002, April 2007.
    \6\ 75 Federal Register 40 CFR part 52 [EPA-R08-OAR-2010-0285;
FRL-9177-2], Proposed Rule, ``Approval and Promulgation of Air
Quality Implementation Plans; Colorado; Attainment Demonstration for
the 1997 8-Hour Ozone Standard, and Approval of Related Revisions'';
pages 42346-42361.
---------------------------------------------------------------------------

    In addition, the commenter's concern that an area west of Fort
Collins might exceed 84 ppb in 2010 is based on exceedance values in
the Colorado modeling analysis from a special analysis, called the
Unmonitored Area Analysis (UAA), that is recommended for model grid
cells that are not analyzed in the monitor based attainment
demonstration because they are not located near a monitor. EPA does not
believe that the UAA establishes that this area should be considered a
maintenance receptor area for the purposes of 110(a)(2)(D)(i).
    First, the UAA analysis is for 2010, which as noted above is not
the correct analysis year. Second, EPA guidance indicates that NAAQS
violations in the UAA should be handled on a case by case basis.\7\ The
guidance stresses that due to the lack of measured data, the
examination of ozone concentrations as part of the unmonitored area
analysis is more uncertain than the monitor based attainment test. This
is true even in situations such as this where, as the commenter points
out; no known errors were identified by the contractor in the modeling
analysis. As a result, the UAA results are recommended to be treated as
a separate test from the monitor based attainment test with less weight
put on the conclusions of the UAA analysis. EPA's attainment
demonstration guidance indicates ``While it is expected that States
will implement additional emission controls to eliminate predicted
violations of the monitor based test, the same requirements may not be
appropriate in unmonitored areas.'' \8\ The guidance recommends that it
may be appropriate to deploy additional monitors in an area where the
unmonitored analysis indicates a potential future year violation.
---------------------------------------------------------------------------

    \7\ Id.
    \8\ Id., page 32.
---------------------------------------------------------------------------

    To address the concerns raised by the UAA, Colorado installed an
additional ozone monitor in the area West of Fort Collins to determine
whether the model predicted ozone concentrations are, in fact, valid.
The special purpose monitor, located in Rist Canyon, began operation on
May 14, 2009. The Rist Canyon monitoring station has collected data for
two ozone seasons (approximately 16 months) since it began operating
and the fourth highest daily maximum 8-hour average ozone concentration
reading is 69 ppb for May through December of 2009 and 72 ppb for
January through August 2010.\9\
---------------------------------------------------------------------------

    \9\ The Rist Canyon monitoring station uses a Federal Equivalent
Method (FEM) and follows the quality assurance requirements of 40
CFR part 58 Appendix A. Ozone data collected at this monitoring
station is eligible for comparison to the ozone NAAQS after the
monitor has operated for more than 24 months per 40 CFR 58.30(c).
Design values, however, are based on the 3-year average of the
annual fourth highest daily maximum 8-hour average ozone
concentration (see 40 CFR part 50, Appendix D).
---------------------------------------------------------------------------

    Therefore, EPA does not believe the modeling performed for the
State of Colorado's Denver/NFR area SIP can support the conclusion that
this area should be considered a maintenance receptor area for the
purposes of 110(a)(2)(D)(i). The methodology developed to identify
maintenance receptors for the purpose of analyzing interference with
maintenance with respect to the 1997 ozone and PM2.5 NAAQS
relies on base period monitoring data to identify monitor

locations that are projected to have maintenance problems in 2012. The
methodology does not identify receptors based on modeling data alone.
While the monitor has not operated long enough to account for
variability in ozone levels, the newly installed monitor in the
relevant area is reading well below the standard and this fact further
confirms that the modeling results and the UAA results do not support
the conclusion that receptors in the Denver/NFR area should be
considered maintenance receptors for the purpose of CAA section
110(2)(D)(i).
    EPA also disagrees with the commenter's comments that the 2002
CENRAP based modeling that evaluated New Mexico's impacts demonstrates
a maintenance problem since the analysis was based on emission and
meteorological conditions in 2002, not the analysis year of 2012. The
CENRAP modeling used a 2002 emission inventory which is likely to
project higher ozone levels and is therefore very conservative compared
to modeling projections with a 2012 emission inventory analysis. The
CENRAP modeling was performed to provide a conservative test using
source apportionment modeling with a readily available modeling system
(since construction of a complete modeling system from scratch requires
significantly much more time and resources) to determine whether
further analysis was warranted to determine if emissions from sources
in New Mexico (and other states) could potentially interfere with
maintenance in downwind nonattainment areas. The sole purpose of the
modeling was to provide a very conservative technical analysis that
would provide a basis for determining that an area did not have a
significant impact upon the Denver/NFR area. Therefore, the CENRAP
modeling cannot serve to provide a basis for determining that an area
has an impact on other areas in 2012. It also cannot be relied upon to
provide a basis to determine which areas should be considered as
maintenance for the purposes of 110(a)(2)(D)(i).
    In conclusion, EPA disagrees with the commenter. We have used a
fully consistent approach in identifying areas that may have difficulty
in maintaining attainment of the NAAQS. It is these areas that we have
further evaluated to see if New Mexico's emissions would interfere with
maintenance of the NAAQS.
    Comment No. 3--The commenter also argued that EPA's analysis
ignores whether emissions from New Mexico sources are at present
interfering with maintenance in other States. The commenter argued that
EPA erred by considering only whether New Mexico emissions will
interfere with maintenance of the NAAQS in 2012 at monitors that would
then be considered ``maintenance receptors.'' It argues that this
approach is inconsistent with the approach taken to determine whether
New Mexico significantly contributes to nonattainment in other States
(citing 75 FR 33174-33190). The commenter agreed that ``EPA should
ensure that New Mexico does not interfere with maintenance or
contribute significantly to nonattainment in other states in the
future,'' but argued that ``the agency's duties under Section
110(a)(2)(D)(i)(I) apply both in the present and the future.'' In
short, the commenter argued that EPA's approach is flawed simply
because EPA evaluated whether or not there is significant contribution
to nonattainment in other states looking at current data, whereas EPA
evaluated whether there is interference with maintenance looking at
future projected data.
    EPA Response: EPA disagrees with the commenter concerning the
evaluation of significant contribution versus interference with
maintenance. Section 110(a)(2)(D)(I)(i) of the Clean Air Act requires
states to submit SIPs within 3 years of promulgation or revision of a
NAAQS that:
    (D) Contain adequate provisions-
    (i) Prohibiting * * * any source or other type of emissions
activity within the state from emitting any air pollutant in amounts
which will--
    (I) Contribute significantly to nonattainment or, interfere with
maintenance by, any other State with respect to any such national
primary or secondary ambient air quality standard, or
    (II) Interfere with measures required to be included in the
applicable implementation plan for any other State under part C of this
subchapter to prevent significant deterioration of air quality or to
protect visibility.
    In determining the appropriate year to analyze in determining
whether emissions from New Mexico will interfere with maintenance by
any other State, EPA used an approach upheld by the DC Circuit in North
Carolina v. EPA. In that case, the Court examined EPA's definition of
``will'' in ``will contribute significantly.'' The placement of the
word ``will'' at the end of section 110(a)(2)(D)(i) clarifies that it
applies to all of the provisions that follow--both those in
110(a)(2)(D)(i)(I) and those in 110(a)(2)(D)(i)(II). Thus the DC
Circuit's discussion of the meaning of the word ``will'' in ``will
significantly contribute'' also applies to the meaning of the word
``will'' in ``will * * * interfere with maintenance.''
    In North Carolina v. EPA, the DC Circuit rejected North Carolina's
argument that EPA erred in limiting its analysis of downwind areas by
excluding areas that were currently monitored nonattainment but
projected to be in attainment at a future date. Like the commenter
argues here, North Carolina had argued that EPA was obligated to
analyze the significant contribution of states that were contributing
to areas of North Carolina that were in nonattainment at the time the
rule was promulgated, even though those areas were projected to come
into attainment by the year selected for the future base case analysis.
In rejecting this argument, the DC Circuit explained that the approach
used by EPA was identical to the one used previously in the NOx SIP
Call and that ``because `will' can mean either certainty or indicate
the future tense,'' EPA's approach was reasonable. In other words, the
court approved EPA's approach that entailed the evaluation of
interstate transport impacts at a future date in time.
    Contrary to the assertions of the commenter, EPA believes that
evaluation of interference with maintenance using a future date is the
most appropriate approach for that requirement. As explained in the
proposed action, the court decision affecting the CAIR rule required
EPA to reevaluate its approach to the interfere with maintenance
requirement of section 110(a)(2)(D) and to develop a new approach to
give that requirement separate meaning. In doing so, EPA has developed
an approach that necessarily requires a number of years of data, and an
analysis that evaluates where there may be difficulties with
maintaining attainment at a specific point in time, in this instance
2012. EPA's prior evaluation of whether emissions from New Mexico were
significantly contributing to nonattainment in other states was based
on the data available at the time of that evaluation and before EPA had
developed its approach for evaluating interference with maintenance. It
is reasonable and appropriate for EPA to use, in this rulemaking, the
current approach to identifying maintenance receptors for purposes of
section 110(a)(2)(D) that EPA developed to be consistent with the
direction given to EPA in North Carolina v. EPA.
    Finally, we note that comments on the validity or reasonableness of
EPA's approach to determining significant contribution in the prior
action are not directly relevant to this rulemaking.

This rulemaking addresses only the ``interfere with maintenance'' and
PSD prongs of section 110(a)(2)(D)(i).

IV. Final Action

    We are approving two elements of the Interstate Transport SIP
submitted by the State of New Mexico on September 17, 2007.
Specifically, in this action we are approving the New Mexico Interstate
Transport SIP provision that address the requirement of Section
110(a)(2)(D)(i)(I) that emissions from sources in New Mexico do not
interfere with maintenance of the 1997 8-hour ozone or 1997
PM2.5 NAAQS in any other state, and the provision that
addresses the requirement of Section 110(a)(2)(D)(i)(II) that emissions
from New Mexico's sources do not interfere with measures required in
the SIP of any other state under part C of the CAA to prevent
``significant deterioration of air quality.'' For purposes of the 1997
8-hour ozone NAAQS, EPA also is approving a SIP revision adopted by
NMED on August 31, 2009, that modifies New Mexico's PSD SIP for the
1997 8-hour ozone NAAQS to include nitrogen oxides as an ozone
precursor.
    After fully considering all comments received on the proposed rule,
we have concluded that the State's submission, and additional evidence
evaluated by EPA, establishes that emissions from New Mexico sources do
not interfere with the maintenance of the ozone and PM2.5
NAAQS of 1997 in any other states or with measures required by SIPs of
other states to prevent significant deterioration of air quality.
Accordingly, New Mexico does not need to include additional emission
limitations on its sources to eliminate any such contribution to other
states for purposes of these NAAQS.

V. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the 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 Clean Air Act.
Accordingly, this action merely approves 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.
    The Congressional Review Act, 5 U.S.C. 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 action 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).
    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 25, 2011. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this action 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, Nitrogen oxides, Ozone,
Particulate matter, Reporting and recordkeeping requirements, Volatile
organic compounds.

    Dated: November 10, 2010.
Lawrence E. Starfield,
Acting Regional Administrator, Region 6.

0
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. 7401 et seq.

Subpart GG--New Mexico

0
2. Section 52.1620 is amended:
0
a. In paragraph (c) by revising the entry for Part 74 under ``New
Mexico Administrative Code (NMAC) Title 20--Environment Protection
Chapter 2--Air Quality''.
0
b. In paragraph (e) revising the entry in the second table for
``Interstate transport for the 1997 ozone and PM2.5 NAAQS''
and adding a new entry immediately after it.
    The amendments read as follows:

Sec.  52.1620  Identification of plan.

* * * * *
    (c) * * *

                                       EPA-Approved New Mexico Regulations
----------------------------------------------------------------------------------------------------------------
                                                   State approval/
        State citation            Title/subject    submittal date       EPA approval date          Explanation
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
Part 74.......................  Permits--Preventi       8/31/2009  11/26/2010 [Insert citation  ................
                                 on of                              of publication].
                                 Significant
                                 Deterioration.

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

     (e) * * *

           EPA-Approved Non-Regulatory Provisions and Quasi-Regulatory Measures in the New Mexico SIP
----------------------------------------------------------------------------------------------------------------
                                    Applicable
                                  geographic or         State
     Name of SIP provision        nonattainment      submittal/         EPA approval date          Explanation
                                       area        effective date
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
Interstate transport for the    New Mexico.......       9/17/2007  6/10/2010..................  Revisions to
 1997 ozone and                                                                                prohibit
 PM[ihel2].[ihel5] NAAQS.                                                                        significant
                                                                                contribution to
                                                                                nonattainment
                                                                                in any other
                                                                                state.
                                                                                Approval for
                                                                                revisions to
                                                                                prohibit
                                                                                interference
                                                                                with
                                                                                maintenance and
                                                                                PSD measures in
                                                                                any other
                                                                                state.
Interstate transport for the    New Mexico.......       9/17/2007  11/26/2010 [Insert citation  Revisions to
 1997 ozone and                                                     of publication].             prohibit
 PM[ihel2].[ihel5] NAAQS.                                                                        interference
                                                                                with
                                                                                maintenance and
                                                                                PSD measures in
                                                                                any other
                                                                                state.
----------------------------------------------------------------------------------------------------------------

[FR Doc. 2010-29397 Filed 11-24-10; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register: August 3, 2010 (Volume 75, Number 148)]
[Notices]
[Page 45625]
[DOCID:fr03au10-65]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 13356-000-RI]

Slatersville Hydro, LLC; Notice of Availability of Environmental
Assessment

July 27, 2010.
    In accordance with the National Environmental Policy Act of 1969
and the Federal Energy Regulatory Commission's regulations, 18 CFR part
380 (Order No. 486, 52 FR 47879), the Office of Energy Projects has
reviewed the application for exemption from licensing for the
Slatersville Hydroelectric Project, to be located on the Branch River,
in Providence County, Rhode Island, and has prepared an Environmental
Assessment (EA). In the EA, Commission staff analyze the potential
environmental effects of the project and conclude that issuing an
exemption for the project, with appropriate environmental measures,
would not constitute a major Federal action significantly affecting the
quality of the human environment.
    A copy of the EA is on file with the Commission and is available
for public inspection. The EA may also be viewed on the Commission's
Web site at http://www.ferc.gov using the ``eLibrary'' link. Enter the
docket number excluding the last three digits in the docket number
field to access the document. For assistance, contact FERC Online
Support at<EMAIL_ADDRESS>or toll-free at 1-866-208-3676,
or for TTY,<PHONE_NUMBER>.
    Any comments should be filed within 30 days from the date of this
notice. Comments may be filed electronically via the Internet. See 18
CFR 385.2001(a)(1)(iii) and the instructions on the Commission's Web
site (http://www.ferc.gov/docs-filing/ferconline.asp) under the
``eFiling'' link. For a simpler method of submitting text only
comments, click on ``eComment.'' For assistance, please contact FERC
Online Support at<EMAIL_ADDRESS>call toll-free at (866)
208-3676; or, for TTY, contact<PHONE_NUMBER>. Although the Commission
strongly encourages electronic filing, documents may also be paper-
filed. To paper-file, mail an original and eight copies to: Kimberly D.
Bose, Secretary, Federal Energy Regulatory Commission, 888 First
Street, NE., Washington, DC 20426. Please affix Project No. 13356-000
to all comments. For further information, contact Tom Dean at (202)
502-6041.

Kimberly D. Bose,
Secretary.
[FR Doc. 2010-18973 Filed 8-2-10; 8:45 am]
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