Appendix C

Winter 2009 Model-to-Monitor Results

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Figure C-1.  Clarkson site – March 14 lead concentration by source.

Figure C-2.  East Tarmac site – March 14 lead concentrations (ng/m3).

Figure C-3.  Clarkson site – March 28 lead concentrations by source (ng/m3).

Figure C-4.  East Tarmac site – March 28 lead concentrations (ng/m3).

Figure C-5.  Clarkson site – March 29 lead concentrations by source (ng/m3).

Figure C-6.  East Tarmac site – March 29 lead concentrations (ng/m3).

Figure C-7.  All sources – March 14–15, 2009.

Figure C-8.  All sources – March 28–29, 2009.

Figure C-9.  All sources – March 29–30, 2009.

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  PAGE  ii

C-  PAGE  10


Re:	Response to Draft Delisting Petitions

Emerald Kalama Chemical, LLC (Emerald) submitted to the Washington State Department of Ecology (Ecology) and the United States Environmental Protection Agency Region 10 (EPA) the following draft delisting petitions on August 31, 2016:

 "DRAFT Delisting Petition for Mixed Material Stored at Fire Mountain Farms Big Hanaford Facility" (BH Petition)
 "DRAFT Delisting Petition for Mixed Material Stored at Fire Mountain Farms Burnt Ridge Facility" (BR Petition)
 "DRAFT Delisting Petition for Mixed Material Stored at Fire Mountain Farms Newaukum Prairie Facility" (NP Petition)
 "DRAFT Delisting Petition for Emerald Industrial Wastewater Treatment Plant Biological Solids" (IWBS Petition)
According to Emerald, the petitions have not been reviewed by Fire Mountain Farms, Inc. (FMF).

Ecology and EPA noticed several details in the draft petitions that need to be improved.  Ecology and EPA's comments on the draft petitions are shown below.  These comments are not imbedded in the PDFs because many items apply to all or most of the petitions.

Please address the comments below and resubmit the draft petitions.  Emerald and FMF may wait to resubmit the draft petitions after all the sample results are finalized according to the Waste Characterization Plan.

Many of the comments apply to all or most of the draft delisting petitions.  Each comment will specify which petition the comment is intended for.

Comment 1:  Applicable to BH, BR, NP, and IWBS Petitions

Define each acronym used in the petition at first use.  For example, but not limited to, "RCRA", "C.F.R.", "TCLP", "LDR", and "°C", should be defined whenever each is first used.

Comment 2:  Applicable to BH, BR, NP, and IWBS Petitions

On page one in the first paragraph, list Ecology as a recipient of the petition.  For example, change the paragraph to read, ". . . jointly petition the U.S. Environmental Protection Agency ("EPA") and the Washington State Department of Ecology ("Ecology") to exclude . . ."  Although the waste is federally listed, Ecology must approve the delisting petition as a separation action.

Comment 3:  Applicable to IWBS Petition

On page two in the second section, add "and Ecology" after EPA so the sentence starts, "Emerald requests EPA and Ecology to send the Kalama IWBS . . ."  Also, on page two in the third section, add "and Ecology" after EPA so the sentence starts, "Emerald is seeking EPA and Ecology approval to delist . . ."

Comment 4:  Applicable to BH, BR, and NP Petitions

On page two in the second section, add a period to the second sentence in paragraph two.

Comment 5:  Applicable to BH, BR, and NP Petitions

On page three in the first full section, add "and Ecology" after EPA so the sentence starts, "Emerald and FMF are seeking EPA and Ecology approval to delist . . ."

Comment 6:   Applicable to BR Petition

On page one in the first paragraph, correctly describe the mixture of material stored at Burnt Ridge.  For example, change the paragraph to read, ". . . to exclude the mixture of industrial wastewater biological solids ("IWBS") generated by Emerald at its Kalama facility, municipal wastewater treatment plant biosolids accepted by FMF, industrial wastewater treatment plant biological solids accepted by FMF, and cow manure barn runoff and currently stored . . ."

Comment 7:   Applicable to NP Petition

On page one in the first paragraph, correctly describe the mixture of material stored at Newaukum Prairie.  For example, change the paragraph to read, ". . . to exclude the mixture of industrial wastewater biological solids ("IWBS") generated by Emerald at its Kalama facility, municipal wastewater treatment plant biosolids accepted by FMF, and industrial wastewater treatment plant biological solids accepted by FMF and currently stored . . ."

Comment 8:   Applicable to BH, BR, and NP Petitions

On page one in the first paragraph, add "from designation as a RCRA hazardous waste" to the end of the sentence to specify what Emerald and FMF are wanting excluded.  See the IWBS Petition for an example.

Comment 9:   Applicable to BH, BR, NP, and IWBS Petitions

On page one in the third paragraph, change the first sentence to ". . . EPA and Ecology approval to send . . ."

Comment 10:   Applicable to BH and NP Petitions

On page one in the third paragraph, the petition says that "the waste meets applicable LDR treatment standards."  According to the Pacific Groundwater Group's (PGG) 2014 sample results, the mixed material is above the LDR treatment standard for toluene.  Update this sentence to correctly say which LDRs are met.

Comment 11:   Applicable to BH, BR, NP, and IWBS Petitions

Throughout the petition, whenever a Code of Federal Regulations (C.F.R.) is cited, include the full reference and corresponding Washington Administrative Code (WAC) citation as well, if applicable.  For example, on page two, the first section stating the name and address of petitioner(s) should be cited as "40 C.F.R. 260.20(b)(1); WAC 173-303-910(1)(b)(i)".  Also, in the section called, "Pertinent data on and discussion of the factors . . .", "Appendix VIII to Part 261  -  Hazardous Constituents" should also have WAC<PHONE_NUMBER> Dangerous waste constituents list.

Comment 12:   Applicable to BH, BR, NP, and IWBS Petitions

In the section called, "A description of the proposed action, including . . ." (page three in BH, BR, and NP Petitions and page two in IWBS Petition), add waste code F003 to the list with U019, U154, and U220.

Comment 13:   Applicable to IWBS Petition

On page two in the fourth section, add an "s" to the word "request" in the second sentence of the first paragraph.

Comment 14:   Applicable to BH, BR, and NP Petitions

On page four in the first full paragraph, remove the word "biosolids" from the second to last sentence.  Also, remove the word "Biosolids" from Table 1's title.  In Table 1, remove the extra "Municipal" from the "Camas Municipal Municipal Wastewater Treatment Plant" line.

Comment 15:  Applicable to BR Petition

On page four in Table 1, the total is given as 126.0 tons but the sum of the individual sources is 125.9 tons.  Change the total to accurately show the sum of the individual sources, or double check the individual sources amounts.  Also on page four, in the first paragraph, the petition says that, ". . . approximately 90 percent of the material in the Burnt Ridge impoundment is municipal biosolids . . ."  This is not correct.  According to Table 1, industrial sources compose 18.2 tons (Emerald and Darigold), municipal sources compose 103.9 tons, and other sources compose 3.8 tons (cow manure).  Out of the total 125.9 tons, municipal sources of 103.9 tons equals 82.5 percent.  Change the "90 percent" to "82.5 percent" or round up to "83 percent."

Comment 16:   Applicable to NP Petition

On page four in Table 1, the total is given as 340.0 tons but the sum of the individual sources is 339.9 tons.  Change the total to accurately show the sum of the individual sources, or double check the individual sources amounts.  Also on page four, in the first paragraph, the petition says that, ". . . approximately 93 percent of the material in the Newaukum Prairie impoundment is municipal biosolids . . ."  This is not correct.  According to Table 1, industrial sources compose 46.9 tons (Emerald, Darigold, and Port of Longview) and municipal sources compose 293.0 tons.  Out of the total 339.9 tons, municipal sources of 293.0 tons equals 86.2 percent.  Change the "93 percent" to "86.2 percent" or round down to "86 percent."  Also, capitalize the "l" in "longview".

Comment 17:   Applicable to BH, BR, NP, and IWBS Petitions

The language in the delisting petitions should be consistent with how Ecology and EPA would approve the delisting.  This means avoiding absolute statements.  For example, in the sentence, "The IWBS do not contain any other chemical constituent that would cause it to be hazardous" (page five in BH, BR, and NP Petitions and page three in IWBS Petition), the "do not contain" has an absolute meaning which is difficult to prove true without continuous monitoring.  An example of how to make this sentence more acceptable could be, "The IWBS likely do not contain any other chemical constituent that would cause it to be hazardous, according to waste sampling."  Review the draft petition and change those sentences/words that suggest an absolute meaning to something that is less absolute (such as conditional on sampling data).

Comment 18:   Applicable to IWBS Petition

On page three, remove the duplicate paragraph starting with, "The IWBS do not contain any other chemical constituent . . ."

Comment 19:   Applicable to BH, BR, and NP Petitions

The petition should focus on the mixed material and not rely solely (or significantly) on Emerald's IWBS.  For example, on page five in the paragraph starting with, "The mixed biosolid material must be acceptable for disposal in a Subtitle D landfill given that the IWBS has never . . .", the petition fails to take into account the other sources that FMF mixed with Emerald's IWBS.  Therefore, the basis for delisting cannot solely rely on information and test results from the IWBS.  According to the Code of Federal Regulations (CFR) in 40 CFR 260.22(b), the basis for delisting "must be made with respect to the waste mixture as a whole."  Ecology and EPA recognize the importance of and support the use of information and test results from the IWBS, but the entire mixture must be the main focus of the delisting analysis.  Throughout the entire petition, include more information about the mixed material and the other sources that FMF mixed with Emerald's IWBS when discussing how each delisting criteria is met.

Comment 20:   Applicable to BH, BR, and NP Petitions

On page five in the paragraph starting with, "The mixed biosolid material must be acceptable for disposal in a Subtitle D landfill given that the IWBS has never . . .", the word "never" is another example of using an absolute as described in Comment 17.  Also, the paragraph says that the IWBS did not exhibit any of the characteristics of the associated waste codes.  The RCRA toxic and state-only wastes should be addressed in this paragraph as well.  For example, the paragraph should be similar to the following:

      The mixed biosolid material should be acceptable for disposal in a Subtitle D landfill given that the IWBS have never contained above detection any of the chemicals that would cause it to be hazardous, exhibited any of the characteristics for which the waste was listed, designated as RCRA toxic waste or Washington State-only wastes, and comprises approximately five percent of the total mass of material in the Big Hanaford impoundment.

More information is needed about the mixed material and the other sources that FMF mixed with Emerald's IWBS in order to make the conclusion that the mixed material should be acceptable for disposal in a Subtitle D landfill as described in Comment 19.  Also, ensure the percent values are accurate according to Comments 15 and 16.  Also, toluene was detected in the IWBS so the statement "that the IWBS have never contained above detection" is not true.  Add a qualifier to the sentence, such as, "that the IWBS have never contained above detection (except for one isolated incident in January 2013)."

Comment 21:   Applicable to BH, BR, and NP Petitions

In the section called, "The waste does not exhibit the characteristic of ignitability . . ." (page five in BH Petition and page six in BR and NP Petitions), add the second and third paragraphs from the IWBS Petition's same section.  These two paragraphs are applicable to the BH, BR, and NP Petitions.

Comment 22:   Applicable to BH, BR, and NP Petitions

On page six, in the section called, "The waste does not exhibit the characteristic of ignitability . . .", the second to last paragraph says that municipal biosolids do not carry any RCRA waste codes.  Include additional explanation on how this was determined.

Comment 23:   Applicable to BH, BR, and NP Petitions

On page six, in the section called, "The waste does not exhibit the characteristic of ignitability . . .", update the percent values in the last paragraph according to Comments 15 and 16.

Comment 24:   Applicable to BH, BR, and NP Petitions

On page six, in the section called, "The waste does not exhibit the characteristic of ignitability . . .", in the last paragraph, preliminary delisting levels (PDLs) should be the standard to meet with respect to the delisting petition, not the LDRs.  Add language to include PDLs.  Also, this paragraph has absolute statements/words and should be changed according to Comment 17.  This paragraph should include more information about the mixed material, not only the sources that make up the mixture according to Comment 19.

Comment 25:   Applicable to BH, BR, NP, and IWBS Petitions

In the section called, "Demonstration samples must consist . . ." (page six in BH, BR, and NP Petitions and page four in IWBS Petition), in the first paragraph, change the second sentence to begin with, "All of these data are summarized . . ."  Check the petition for other instances where sentences with "data" need to be changed to a plural context.  For example, see the second paragraph of the same section.

Comment 26:   Applicable to BH, BR, and NP Petitions

In the section called, "Demonstration samples must consist . . ." (page six in BH Petition and page seven in BR and NP Petitions), in the third paragraph, change "biosolids" to "mixed material" or something similar.

Comment 27:   Applicable to BH Petition

On page seven in the section called, "Demonstration samples must consist . . .", in the paragraph starting with, "Most analytes and parameters . . .", only include analyses of PGG's results for those LDRs that are associated with the mixed material.  For example, remove 4-methyl phenol and phenol from the discussion since they are not applicable to the waste.

Comment 28:   Applicable to NP Petition

On page seven in the section called, "Demonstration samples must consist . . .", in the paragraph starting with, "All analytes and parameters . . .", change this paragraph to be similar to the BH Petition since toluene was detected at a concentration greater than the LDR treatment standard.

Comment 29:   Applicable to BH, BR, and NP Petitions

After the sample results are finalized according to the Waste Characterization Plan (currently in draft), the section called, "Demonstration samples must consist . . ." should be updated to include the new sample results and associated analysis.

Comment 30:   Applicable to BH, BR, NP, and IWBS Petitions

The required information from 40 CFR 260.22(i) is presented in the petition (starting on page eight for BH, BR, and NP Petitions and page five IWBS Petition).  The petition incorrectly uses 40 CFR 260.22(h) as the reference.  Change all the sections' references related to the information from 40 CFR 260.22(i) to the correct citation.  Also, in accordance with Comment 11, add the corresponding WAC reference.

Comment 31:   Applicable to BH, BR, NP, and IWBS Petitions

In the section called, "Names and qualifications . . ." (page eight in BH, BR, and NP Petitions and page five in IWBS Petition), the petition must include the qualifications of the persons sampling and testing the waste.  Describe the qualifications in the petition.  Also, see the definition of "person" in 40 CFR 260.10.

Comment 32:   Applicable to BH, BR, NP, and IWBS Petitions

In the section called, "The dates of sampling . . ." (page eight in BH Petition, page nine in BR and NP Petitions, and page five in IWBS Petition), the petition must include the dates of sampling and testing.  Ensure that the sample date and the test date are clearly specified in the tables referenced in the petition.

Comment 33:   Applicable to BH and NP Petitions

On page nine in the section called, "The location of the generating . . .", the business and physical locations should both be listed for the FMF generating facility.  The BH Petition should be listed similar to the following:

Business Location			Physical Location
Fire Mountain Farms, Inc.		Fire Mountain Farms, Inc.
856 Burnt Ridge Road		307 Big Hanaford Road
Onalaska, WA 98570			Centralia, WA 98531

The NP Petition should be listed similar to the following:

Business Location			Physical Location
Fire Mountain Farms, Inc.		Fire Mountain Farms, Inc.
856 Burnt Ridge Road		349 State Route 508
Onalaska, WA 98570			Chehalis, WA 98532

Comment 34:   Applicable to BH, BR, and NP Petitions

On page nine in the section called, "A description of the manufacturing . . .", in the first paragraph, change the beginning of the first sentence to, "There are approximately . . ."  Also, update the percent values according to Comments 15 and 16.

Comment 35:   Applicable to BH, BR, and NP Petitions

On page nine in the section called, "A description of the manufacturing . . .", in the second paragraph, change the second sentence to, "As part of that treatment process, the plant generates IWBS."  This is more clear and consistent with the IWBS Petition.

Comment 36:   Applicable to BH, BR, NP, and IWBS Petitions

In the section called, "A description of the manufacturing . . .", in the paragraph starting with, "The Kalama facility's biological . . . " (page nine in BH, BR, and NP Petitions and page six in IWBS Petition), do not use an absolute statement in the third sentence according to Comment 17.  Instead, start the sentence similar to, "Emerald's IWBS are basically the same material . . ."

Comment 37:   Applicable to BH, BR, NP, and IWBS Petitions

In the section called, "A description of the manufacturing . . .", in the paragraph starting with, "The Kalama facility periodically treats . . . " (page ten in BH, BR, and NP Petitions and page six in IWBS Petition), change the word "material" in the second sentence to "IWBS" to clarify what material is being referred to.  Also, clarify the second to last sentence which says LDRs must be met before a hazardous waste can be land applied.  More specifically, LDRs must be met before a hazardous waste can be disposed in a RCRA Subtitle C landfill.  The last sentence says that the, "Kalama facility regularly samples the IWBS for various constituents as previously discussed".  Is Emerald still sampling the IWBS for the various constituents and at the indicated frequencies as previously mentioned in the petition?  For example, does Emerald still test the IWBS for benzene and toluene annually; pH, lead, cadmium, arsenic, selenium, chromium, molybdenum, mercury, and barium quarterly; and total solids percent, copper, nickel, zinc, and cobalt monthly?  According to Table 1 in Appendix A, the last sample results are from March 21, 2014.  Include all sampling done on the IWBS.

Comment 38:   Applicable to BH, BR, NP, and IWBS Petitions

In the section called, "A description of the manufacturing . . .", in the paragraph starting with, "Emerald understands the nature of all . . ." (page ten in BH, BR, and NP Petitions and page six in IWBS Petition) and through the paragraph starting with, "Stormwater that falls along . . .", include the specific waste codes associated with the waste streams discussed.  Also indicate whether or not the waste code applies to the IWBS.  This clarification will help show how the waste codes discussed in previous sections of the petition are determined.

Comment 39:   Applicable to BH, BR, NP, and IWBS Petitions

In the chemical manufacturing process description section (starting on page ten in BH, BR, and NP Petitions and page seven in IWBS Petition), describe how the byproducts are managed.  For example, are the byproducts sent to through wastewater treatment system or used somehow else?  Separate the products and the byproducts to increase clarity.  Also, for those products and byproducts that go to the treatment system, describe the toxicity of each pollutant.  Discuss the treatment's ability to effectively treat the wastewaters.  Include treatment efficacy discussions for those chemicals sent to the treatment system that are do not have a PDL.  This is critical information for Ecology and EPA to make a delisting determination.

Comment 40:   Applicable to BH, BR, NP, and IWBS Petitions

In the specialty department processes section for hexaldehyde (page 15 in BH, BR, and NP Petitions and page 12 in IWBS Petition), a product or byproduct is listed as, "2-ethyl butanaldehyde  -  impurity ?"  Delete the "?" or explain why it should be retained.

Comment 41:   Applicable to IWBS Petition

On page 16 in the section called, "A description of the waste and an estimate . . .", do not use an absolute statement in the third sentence according to Comment 17.  Instead, start the sentence similar to, "Emerald's IWBS are basically the same material . . ."

Comment 42:   Applicable to BH, BR, and NP Petitions

On page 19 in the section called, "A description of the waste and an estimate . . .", update the percent values according to Comments 15 and 16.

Comment 43:   Applicable to BH, BR, NP, and IWBS Petitions

In the section called, "Pertinent data on and discussion . . ." (page 19 in BH, BR, and NP Petitions and page 17 in IWBS Petition), remove the extra "(" in the first factor.

Comment 44:   Applicable to BH, BR, NP, and IWBS Petitions

In the section called, "Pertinent data on and discussion . . ." (starting on page 19 in BH, BR, and NP Petitions and page 17 in IWBS Petition), the petition lists most of the factors from 40 CFR 261.11(a)(3).  Add the two missing factors from 40 CFR 261.11(a)(3) to the petition.  The petition must provide Ecology and EPA with sufficient information to evaluate the factors in 40 CFR 261.11(a)(3).  Include additional discussion that address the factors from 40 CFR 261.11(a)(3).  Include, but not limited to, a discussion on how the application of nitrogen in the mixed material may relate to factor (ix).

Comment 45:   Applicable to BH, BR, and NP Petitions

On page 20 in the section called, "A description of the methodologies and equipment . . .", in the second paragraph, clarify which appendix will describe the methodology and equipment that will be used.  The petition says Appendix C but that is PGG's 2014 sludge report.  Also, refer to the Waste Characterization Plan (currently in draft) in this section.  Change the "mixed biosolids" in the last sentence to "mixed material."

Comment 46:   Applicable to BH, BR, and NP Petitions

On page 20 in the section called, "A description of the sampling handling . . .", in the second paragraph, change "Biosolid" in the first sentence to "Mixed material."  Also, refer to the Waste Characterization Plan (currently in draft) in this section.  The first paragraph of this section is an exact copy of the first paragraph from the previous section.  Consider revising it to match the corresponding paragraph in the IWBS Petition.

Comment 47:   Applicable to BH, BR, and NP Petitions

The section called, "A description of the tests performed . . ." (starting on page 20 in BH Petition and page 21 in BR and NP Petitions) is very similar to the previous section called, "Demonstration samples must consist . . ." (starting on page six).  Since the earlier comments and discussion are also applicable, add the information to the section called, "A description of the tests performed . . ." (starting on page 20 in BH Petition and page 21 in BR and NP Petitions) or reference the previous section.  Also, check that all sentences have a period at the end of the sentence.

Comment 48:   Applicable to IWBS Petition

On page 18 in the section called, "A description of the tests performed . . .", include a reference back to the section citing 40 CFR 260.22(h) starting on page four since this previous section has more applicable information.  Also, analysis must be done to compare the IWBS test results to PDLs as was done in the Waste Characterization Plan (currently in draft) with the mixed material from each of the three FMF storage locations.  See the letter dated December 7, 2016 Re: Ecology and EPA Clarifications on Comments to the Waste Characterization Plan for more information.  The previous PDLs from the Waste Characterization Plan discussion can't be used to compare with the IWBS.  A new list of PDLs applicable to the IWBS is attached to the email with this letter.  An explanation of what settings and procedures where used for using EPA's Hazardous Waste Delisting Risk Assessment Software (DRAS) are shown in Enclosure 1.

Comment 50:   Applicable to BH, BR, NP, and IWBS Petitions

In the section called, "Certification" (page 22 in BH, BR, and NP Petitions and page 18 in IWBS Petition), the petition should be consistent with previous sections and use a formal section title with references.  The section title should say, "The following statement signed by the generator of the waste or his authorized representative: (40 C.F.R. 260.22(i)(12); WAC 173-303-910(3)(c)(xii))."

Comment 51:   Applicable to BH, BR, and NP Petitions

On page 22 in the section called, "Certification", signature blocks must be used for both Emerald and FMF.  An example of how the signature blocks could look is shown below.  For the final petition, Ecology and EPA must each receive "wet" ink signatures.  "Wet" ink signatures means not a copied signature.  Ecology and EPA prefer that the petition not be signed in counterparts.

______________________________		Date:  ________________________
Robert Thode
Fire Mountain Farms, Inc.
President

______________________________		Date:  ________________________
Edward Gotch
Emerald Kalama Chemical, LLC
Chief Executive Officer

Comment 52:   Applicable to IWBS Petition

On page 18 in the section called, "Certification", a signature block must be used.  An example of how the Emerald signature block could look is shown in Comment 51.  For the final petition, Ecology and EPA must each receive a "wet" ink signature.

Comment 53:   Applicable to BH, BR, NP, and IWBS Petitions

In Appendix A, Table 1, ensure all the test results are included.  In 2014, Emerald submitted a spreadsheet similar to Table 1 that had more test results than what the Appendix A Table 1 is showing.  For example, on January 16, 2013, Emerald sampled the IWBS and the toluene result was 69 parts per billion but this test result is not on the Appendix A Table 1.

Comment 54:   Applicable to BH, BR, NP, and IWBS Petitions

In Appendix A, Table 2, include the non-detect value for the sample results expressed as "ND."  Ecology and EPA must evaluate if low enough detection limits were used.

Comment 55:   Applicable to BH, BR, NP, and IWBS Petitions

In Appendix A, Table 4, include the non-detect value for the sample results expressed as "ND."  Ecology and EPA must evaluate if low enough detection limits were used.

Comment 56:   Applicable to BH, BR, NP, and IWBS Petitions

When the petition is ready for final signature, Ecology and EPA must each receive an original petition with "wet" ink signatures.  Send the petition to the following people:

Dave Bartus				Greg Gould
USEPA Region 10			Washington State Department of Ecology
1200 Sixth Avenue			PO Box 47600
Mail Code: AWT-150			Olympia, WA 98504-7600
Seattle, WA 98101

Comment 57:   Applicable to BH, BR, NP, and IWBS Petitions

Double check that WAC 173-303-072(3) and -072(4) are addressed according to WAC 173-303-910(3)(b).

Comment 58:   Applicable to BH, BR, NP, and IWBS Petitions

On page one, the sentence starting with, "In accordance with the treatment variance . . .", should be amended to say the waste likely meets applicable LDR treatment standards.  Since the treatment variance is submitted concurrently, a final decision has not been determined yet.

Comment 59:   Applicable to BH, BR, and NP Petitions

On page two in the second section, the last sentence in the first paragraph should be amended to something similar to, "The fourth  -  cleanup and closure of the three units in which the mixed material is being stored  -  will generate wastes requiring disposal that are the subject of and reason for this delisting petition."

Comment 60:   Applicable to BH, BR, and NP Petitions

On page three in the second paragraph, the last sentence should be amended to something similar to, "If the delisting petitions are granted, the parties intend to close the three units in accordance with an approved closure plan under the terms of the Agreement, and dispose of the mixed material to be generated during closure in a Subtitle D landfill."

Comment 61:   Applicable to BH, BR, NP, and IWBS Petitions

On page three (for BH, BR, and NP Petitions) and page two (for IWBS Petition) in the last paragraph, the last sentence should be amended to something similar to what Comment 36 says.
Comment 62:   Applicable to BH, BR, NP, and IWBS Petitions

In the section starting with, "The waste produced by a particular generating facility . . .", "data is" should be changed to "data are".  See the first and second paragraphs in this section.  Search the document for other cases.  Also, search for "this data" which should be "these data".

Comment 63:   Applicable to BH, BR, NP, and IWBS Petitions

Do not combine LDR authority with delisting authority.  The focus of the delisting petitions should not have anything to do with compliance of applicable LDR treatment standards.  Results should be compared with PDLs as appropriate.

Comment 64:   Applicable to BH, BR, and NP Petitions

In the section starting with, "Demonstration samples must consist . . .", include the pH EPA Method number on the second list of parameters.

Comment 65:   Applicable to BH, BR, NP, and IWBS Petitions

In the section starting with, "A description of the manufacturing processes . . .", the petition mainly discusses chemicals that are already considered dangerous constituents or listed wastes.  Given the range of organic chemicals associated with the production processes, there should be discussions as to why other chemicals listed as products and/or byproducts are not considered other factors that may cause the material to be retained as dangerous waste.  For example, in the Intermediates Department Processes for benzoic acid and benzaldehyde, formic acid is listed a byproduct.  Formic acid is a dangerous waste constituent as listed in WAC<PHONE_NUMBER>.  The discussion should include why the chemicals are not other factors that may cause the material to be retained as dangerous waste.

Comment 66:   Applicable to BH, BR, NP, and IWBS Petitions

Whenever percent solids are discussed, clarify if the basis is dry weight or wet weight.

                                  Enclosure 1

Procedures for Determining Preliminary Delisting Levels (PDLs) using EPA's Hazardous Waste Delisting Risk Assessment Software (DRAS)

For more information about DRAS and to download the software, visit https://www.epa.gov/hw/hazardous-waste-delisting-risk-assessment-software-dras.  A user guide is available online to help explain how to run the model.  Also, the website has the Delisting Technical Support Document which presents extensive information delineating all chemical release, exposure and risk assessment algorithms employed by the DRAS program.

After installing DRAS on a computer, open the DRAS model file provided called "PrelimDelistingLevels.DRS".  Alternatively, open DRAS and start with a new model file.  The chemicals and values have already been populated into the model file provided, which will save time later.

Ecology and EPA adjusted the main inputs in the Step 2 - Waste Management Unit and Risk/HQ Information section on the first screen (see Figure 1).  The inputs Ecology and EPA used are as follows:

Waste Management Unit Type
 Selected the `Landfill' option (indicates the final disposal unit type).
 Entered the Waste Volume as 2,000 cubic yards (this is approximately equivalent to 1,601 tons referenced in the IWBS Petition on page 16).
 1,601 tons/year equals 3,202,000 pounds/year
 IWBS are approximately 90% and water density is around 62.4 pounds/cubic feet
  3,202,000 pounds/year divided by 62.4 pounds/cubic feet equals 51,314 cubic feet/year
 51,314 cubic feet/year equals 1900 cubic yards/year
 Incorporate a factor of safety and use 2,000 cubic yards/year
Risk/HQ Values
 Set the Cancer Risk Level at 1E-6.
 Set the Hazard Quotient (HQ) at 0.1.
Waste Management Unit Active Life
 Selected the `Multiple Year Batch' option.
 Entered 20 for the Active Life (this is the default value for landfills according to the DRAS user guide).
Figure 1.  User-adjusted inputs to the DRAS model.

After setting the inputs to the correct options and values, click the `Update Information' button in Step 3 on in the main screen.  Next click the `Calculate Delisting Levels' button.  DRAS will automatically show a few new screens which can be ignored.  Click the maximization button on the minimized window (bottom left of screen) to open the main screen again.  Then click the `To Steps 4-5>>' button.

Now at Step 4 - Select Chemicals of Concern and Enter Concentrations, if the provided model file is opened, all of the available chemicals in the model should be populated.  If a new model file is started, the chemicals may need to be entered one at a time.  Also, fake values for the TCLP Concentration (mg/L) and Total Concentration (mg/kg) columns need to be entered for the model to work.  A value of 0.00001 should be low enough not to affect the model results.  Again, if the provided model file is used, the chemicals and values are already populated.

If the `Update Site COCs' button is available to select, click this first then select `Run DRAS'.  The model will generate a series of screens.  Find the screen called `Limiting Pathways'.  The values in this screen are the PDLs.  To export the table, make sure the Limiting Pathways screen is selected (at the forefront).  Go to `File' and select `Export to Table'.  When saving, use the `MS Excel Tab Delimited Text File' option.  This text file can be opened in Excel.

Ecology and EPA generated the site specific PDLs for the IWBS.  The PDLs are provided in the Excel file called "PrelimDelistingLevelsIWBS.xlsx".


[Federal Register Volume 77, Number 105 (Thursday, May 31, 2012)]
[Rules and Regulations]
[Page 32006]
[FR Doc No: 2012-13213]

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

Federal Aviation Administration

14 CFR Part 25

[Docket No. NM438 Special Conditions No. 25-423-SC]

Special Conditions: Gulfstream Model GVI Airplane; High Incidence
Protection

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final special conditions; correction.

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

SUMMARY: This document corrects an error that appeared in Docket No.
NM438, Special Conditions No. 25-423-SC, which were published in the
Federal Register on March 28, 2011. The error resulted in the omission
of two paragraphs of text in The Special Conditions section.

DATES: Effective May 31, 2012.

FOR FURTHER INFORMATION CONTACT: Joe Jacobsen, FAA, Airplane and Flight
Crew Interface Branch, ANM-111, Transport Standards Staff, Transport
Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue
SW., Renton, Washington 98057-3356; telephone<PHONE_NUMBER>; facsimile
(425) 227-1320.

SUPPLEMENTARY INFORMATION: The document designated as ``Docket No.
NM438, Special Conditions No. 25-423-SC'' was published in the Federal
Register on March 28, 2011 (76 FR 17022). The document issued special
conditions pertaining to a high incidence protection system that
replaces the stall warning system during normal operating conditions,
prohibits the airplane from stalling, limits the angle of attack at
which the airplane can be flown during normal low speed operations, and
cannot be overridden by the flight crew. These special conditions were,
and continue to be applicable to, Gulfstream Model GVI airplanes.
    As published, the document contained an error because paragraphs
3(e)(6) and 3(e)(7) were omitted. Due to its complexity the entire text
of paragraph 3(e) is included below, including paragraphs 3(e)(6) and
3(e)(7).
    3. Minimum Steady Flight Speed and Reference Stall Speed--In lieu
of the requirements of Sec.  25.103, the following special condition is
issued:
    (e) VSR must be determined with the following
conditions:
    (1) Engines idling, or, if that resultant thrust causes an
appreciable decrease in stall speed, not more than zero thrust at the
stall speed.
    (2) The airplane in other respects (such as flaps and landing gear)
in the condition existing in the test or performance standard in which
VSR is being used.
    (3) The weight used when VSR is being used as a factor
to determine compliance with a required performance standard.
    (4) The center of gravity position that results in the highest
value of reference stall speed.
    (5) The airplane trimmed for straight flight at a speed selected by
the applicant, but not less than 1.13 VSR and not greater
than 1.3 VSR.
    (6) The high incidence protection function disabled, or adjusted to
a high enough incidence to allow full development of the maneuver to
the angle of attack corresponding to VSR.
    (7) From the stabilized trim condition, apply the longitudinal
control to decelerate the airplane so that the speed reduction does not
exceed one knot per second.
    Since no other part of the regulatory information has been changed,
the special conditions are not being republished.

Correction

    In Final special conditions document [FR Doc. 2011-7144 Filed 3-25-
11; 8:45 a.m.] published on March 28, 2011 (76 FR 17022), make the
following correction:
    On page 17024, in the first column, which begins with (e), include
the following paragraphs after (5) and before (f):
    (6) The high incidence protection function disabled, or adjusted to
a high enough incidence to allow full development of the maneuver to
the angle of attack corresponding to VSR.
    (7) From the stabilized trim condition, apply the longitudinal
control to decelerate the airplane so that the speed reduction does not
exceed one knot per second.

    Issued in Renton, Washington, on May 18, 2012.
Michael J. Kaszycki,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2012-13213 Filed 5-30-12; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 83, Number 72 (Friday, April 13, 2018)]
[Rules and Regulations]
[Pages 15948-15950]
[FR Doc No: 2018-07694]

=======================================================================
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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket Number USCG-2017-0146]
RIN 1625-AA87

Security Zones; Port Canaveral Harbor, Cape Canaveral Air Force
Station, FL

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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

SUMMARY: The Coast Guard is revising a security zone to extend the
geographical boundaries of the permanent security zone at Port
Canaveral Harbor. This action is necessary to ensure the security of
vessels, facilities, and the surrounding areas within this zone. This
regulation prohibits persons and vessels from entering, transiting
through, anchoring in, or remaining within the security zone unless
authorized by the Captain of the Port (COTP) Jacksonville or a
designated representative.

DATES: This rule is effective May 14, 2018.

ADDRESSES: To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type USCG-
2017-0146 in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rule.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email Lieutenant Allan Storm, Sector Jacksonville, Waterways
Management Division, U.S. Coast Guard; telephone<PHONE_NUMBER>, email
[email protected].

SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
Sec.  Section
U.S.C. United States Code

II. Background Information and Regulatory History

    On October 3, 1988, the Coast Guard published a final rule creating
a permanent security zone at Port Canaveral Harbor, Cape Canaveral,
Florida, entitled, ``Security Zone; Port Canaveral Harbor, Cape
Canaveral, FL'' (53 FR 38718) to safeguard the waterfront and military
assets along the U.S. Navy's Poseidon Wharf inside the southeast
portion of Port Canaveral Harbor's Middle Basin. This waterfront area
is located on Cape Canaveral Air Force Station (CCAFS), a U.S. Air
Force military installation. Additionally, the northern and northeast
portion of the Middle Basin's waterfront is located almost entirely on
CCAFS property, and within this area are piers utilized by the U.S. Air
Force and U.S. Army. CCAFS routinely conducts operations critical to
national security.
    The U.S. Navy requested an amendment to the current regulation in
33 CFR 165.705(b) to expand the geographical boundaries to include the
northern and northeastern portion of the Middle Basin of Port Canaveral
Harbor in order to ensure the safety and security of military assets
and infrastructure along the entire CCAFS waterfront. In response, on
October 3, 2017, the Coast Guard published a notice of proposed
rulemaking (NPRM) entitled, ``Security Zones; Port Canaveral Harbor,
Cape Canaveral Air Force Station, FL'' (82 FR 46007). There we stated
why we issued the NPRM, and invited comments on our proposed regulatory
action related to revising the security zone. During the comment period
that ended November 3, 2017, we received 3 comments.

III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority 33 U.S.C.
1231. The COTP Jacksonville has determined it is necessary to expand
the security zone in the Middle Basin of Port Canaveral Harbor to
ensure the security of military assets and waterfront facilities from
destruction, loss, or injury from sabotage or other subversive acts,
accidents or other causes of a similar nature.

IV. Discussion of Comments, Changes, and the Rule

    As noted above, we received 3 comments on our NPRM published
October 3, 2017. One comment was in support of the rule. The other two
comments provided recommendations and feedback to the rule. One comment
provided a recommendation to conduct a safety study to ensure that the
likelihood for a collision has not increased. The Coast Guard does not
intend to conduct a safety study for the revised security zone, as
there have been no safety concerns raised during discussions within the
port community; including the Canaveral Pilots Association, the
Canaveral Port Authority, U.S. Navy, and Brevard County Sheriff's
Office. The other comment inquired about the inclusion of the U.S. Army
Corps of Engineers (USACE) to revise the restricted area outlined in 33
CFR 334.530 to match the Coast Guard's expanded security zone. The
Coast Guard intends to make a recommendation to USACE to revise the
restricted area in 33 CFR 334.530. There are no changes in the
regulatory text of this rule from the proposed rule in the NPRM.
    This rule expands the geographical boundaries of the current
regulated area in 33 CFR 165.705(b) to include the navigable waters of
the Port Canaveral Harbor's Middle Basin. This revision redesignates
Sec.  165.705(b) to new Sec.  165.705(a)(2).
    The rule also made the following amendments: (1) Changed the title
of the existing regulation in 33 CFR 165.705 from ``Port Canaveral
Harbor, Cape Canaveral, Florida'' to ``Security Zones: Port Canaveral
Harbor, Cape Canaveral Air Force Station, FL;'' (2) added a new
paragraph (c) and changed the title to ``Regulations;'' (3)
redesignated existing paragraph (d) as new paragraph (c)(1) with minor
non-substantive changes; (4) redesignated existing paragraph (c) as new
paragraph (c)(2) with minor non-substantive changes; (5) and added a
new paragraph (c)(3). Lastly, we added a new paragraph (b), entitled
``Definitions'' to define the term ``designated representative.''

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and
Executive orders related to rulemaking. Below we summarize our analyses
based on a number of these statutes and Executive orders, and we
discuss First Amendment rights of protestors.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. Executive Order 13771 directs agencies to control
regulatory costs through a budgeting process. This rule has not been
designated a ``significant regulatory action,'' under Executive Order
12866. Accordingly, this rule has not been reviewed by the Office of
Management and Budget (OMB), and pursuant to OMB guidance it is exempt
from the requirements of Executive Order 13771.

    This regulatory action determination is based on the fact that
although persons and vessels may not enter, transit through, anchor in,
or remain within the security zone without authorization from the COTP
Jacksonville or a designated representative, they may operate in the
navigable water adjacent to the security zone and the Federal channel.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard received no comments from the Small Business
Administration on this rulemaking. The Coast Guard certifies under 5
U.S.C. 605(b) that this rule will not have a significant economic
impact on a substantial number of small entities.
    While some owners or operators of vessels intending to transit the
safety zone may be small entities, for the reasons stated in section
V.A above, this rule will not have a significant economic impact on any
vessel owner or operator.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT
section.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

C. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and have
determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive
Order13132.
    Also, this rule does not have tribal implications under Executive
Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it does not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes. If
you believe this rule has implications for federalism or Indian tribes,
please contact the person listed in the FOR FURTHER INFORMATION CONTACT
section.

E. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

F. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that
this action is one of a category of actions that do not individually or
cumulatively have a significant effect on the human environment. This
rule involves expanding the geographical boundaries of a permanent
security zone that prohibit entry within certain navigable waters of
the Port of Canaveral Harbor's Middle Basin. It is categorically
excluded from further review under paragraph L60(a) of Appendix A,
Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 01. A Record of
Environmental Consideration supporting this determination is available
in the docket where indicated under ADDRESSES.

G. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measure, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 continues to read as follows:

    Authority: 33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1,
6.04-6, and 160.5; Department of Homeland Security Delegation No.
0170.1.

0
2. Revise Sec.  165.705 to read as follows:

Sec.  165.705  Security Zones: Port Canaveral Harbor, Cape Canaveral
Air Force Station, FL.

    (a) Regulated areas--(1) Security Zone A. East (Trident) Basin,
Port Canaveral Harbor, at Cape Canaveral Air Force Station, Brevard
County, Florida: All waters of the East Basin north of latitude
28[deg]24'36'' N.
    (2) Security Zone B. Middle Basin, Port Canaveral Harbor, at Cape
Canaveral Air Force Station, Brevard County, Florida: All waters within
the following coordinates inside the Middle Basin: Starting at Point 1
in position 28[deg]24'54.49'' N, 080[deg]36'39.13'' W; thence south to
Point 2 in position 28[deg]24'53.27'' N, 080[deg]36'39.15'' W; thence
east to Point 3 in position 28[deg]24'53.25'' N, 080[deg]36'30.41'' W;
thence south to Point 4 in position 28[deg]24'50.51'' N,
080[deg]36'30.41'' W; thence southeast to Point 5 in position
28[deg]24'38.15'' N, 080[deg]36'17.18'' W; thence east to Point 6 in
position 28[deg]24'38.16'' N, 080[deg]36'14.92'' W; thence northeast to
Point 7 in position 28[deg]24'39.36'' N,

080[deg]36'13.37'' W; thence following the land based perimeter
boundary to the point of origin. These coordinates are based on North
American Datum 1983.
    (b) Definitions. The term ``designated representative'' means
personnel designated by or assisting the Captain of the Port (COTP)
Jacksonville in the enforcement of the security zone. This includes
Coast Guard Patrol Commanders, Coast Guard coxswains, petty officers,
and other officers operating Coast Guard vessels and federal, state,
and local law officers designated by or assisting the COTP Jacksonville
in the enforcement of regulated navigation areas and security zones.
    (c) Regulations. (1) The general regulations governing security
zones found in Sec.  165.33 apply to the security zones described in
paragraph (a) of this section.
    (2) All persons and vessels are prohibited from entering,
transiting through, anchoring in, or remaining within the security zone
unless authorized by the COTP Jacksonville or a designated
representative.
    (3) Persons desiring to enter, transit through, anchor in, or
remain within the security zone may request permission from the COTP
Jacksonville by telephone at<PHONE_NUMBER>, or a designated
representative via VHF-FM radio on channel 16. If authorization is
granted, all persons and vessels receiving such authorization must
comply with the instructions of the COTP Jacksonville or the designated
representative.

    Dated: March 29, 2018.
Todd C. Wiemers,
Captain, U.S. Coast Guard, Captain of the Port Jacksonville.
[FR Doc. 2018-07694 Filed 4-12-18; 8:45 am]
 BILLING CODE 9110-04-P


[Federal Register: August 28, 2006 (Volume 71, Number 166)]
[Notices]
[Page 50959-50961]
[DOCID:fr28au06-82]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54339; File No. SR-NASD-2004-026]

 Self-Regulatory Organizations; National Association of
Securities Dealers, Inc.; Order Approving Proposed Rule Change as
Modified by Amendment Nos. 1-5 To Amend NASD Rule 2320(a) Governing
Best Execution

August 21, 2006.

I. Introduction

    On February 12, 2004, the National Association of Securities
Dealers, Inc. (``NASD'') filed with the Securities and Exchange
Commission (``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 amend NASD Rule 2320(a)
(``Best Execution Rule''). On May 11, 2004, NASD amended the proposed
rule change.\3\ On February 14, 2005, NASD amended the proposed rule
change a second time.\4\ The proposed rule change, as modified by
Amendment Nos. 1 and 2, was published for comment in the Federal
Register on February 25, 2005.\5\ The Commission received three comment
letters on the proposal.\6\ On June 22, 2005, NASD filed a response to
comments, and simultaneously amended the proposal.\7\ The Commission
received one comment

letter regarding NASD's response.\8\ On September 22, 2005, NASD filed
an amendment to modify the purpose section of the proposal, clarifying
the scope of a member's duty to provide best execution.\9\ The proposed
rule change, as modified by Amendment Nos. 3 and 4, was published for
comment in the Federal Register on October 26, 2005.\10\ The Commission
received one additional comment letter on the proposed rule change
after it was published for the second time.\11\ On May 17, 2006, NASD
filed Amendment No. 5.\12\ This order approves the proposed rule
change, as modified by Amendment Nos. 1-5.\13\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Amendment No. 1.
    \4\ See Amendment No. 2.
    \5\ See Securities Exchange Act Release No. 51229 (February 18,
2005), 70 FR 9416. The proposed rule change was published a second
time on October 26, 2005. See footnote 10 infra.
    \6\ See letters from Amal Aly, Vice President(``VP'') and
Associate General Counsel (``AGC''), and Ann Vlcek, VP and AGC,
Securities Industry Association (``SIA'') dated March 18, 2005
(``SIA Letter''); Paul A. Merolla, Executive Vice President and
General Counsel, Instinet Group, Inc. (``Instinet'') dated March 22,
2005 (``Instinet Letter''); Micah S. Green, President and Michele C.
David, VP and AGC, The Bond Market Association (``BMA'') dated April
5, 2005 (``BMA Letter''), to Jonathan G. Katz, Secretary,
Commission. The Commission received one additional comment letter
after NASD filed its response to comments, and another letter after
the proposed rule change was republished on October 26, 2005. See
footnotes 8, 10 and 11, infra.
    \7\ See Amendment No. 3.
    \8\ See letter from Marjorie Gross, Senior Vice President and
Regulatory Counsel, BMA, to Jonathan G. Katz, Secretary, Commission,
dated September 7, 2005 (``BMA Letter 2'').
    \9\ See Amendment No. 4.
    \10\ See Securities Exchange Act Release No. 52637 (October 19,
2005), 70 FR 61861.
    \11\ See letter from Michele C. David, VP and AGC, BMA, to
Jonathan G. Katz, Secretary, Commission, dated November 16, 2005
(``BMA Letter 3'').
    \12\ Amendment No. 5 is a technical amendment. With Amendment
No. 5, NASD took the substance of Amendment Nos. 3 and 4 and placed
that information in IM-2320.
    \13\ In August 2005, the Commission approved two related
proposed rule changes: SR-NASD-2004-045, which prohibits members
from trading ahead of customer market orders in certain
circumstances, and SR-NASD-2004-089, which provides additional limit
order protection by requiring members to provide price improvement
under certain circumstances. See Securities Exchange Act Release
Nos. 52226 (August 9, 2005), 70 FR 48219 (August 16, 2005), and
52210 (August 4, 2005), 70 FR 46897 (August 11, 2005).
---------------------------------------------------------------------------

II. Summary of Comments

    The Commission received a total of five comment letters from three
commenters on the proposed rule change.\14\ The SIA notes that NASD
made several positive changes to the proposed rule in Amendment No.
2.\15\ However, the SIA, the BMA and Instinet all take issue with NASD
requiring a member to provide best execution to the customer of another
broker-dealer. The commenters assert that the recipient broker-dealer
does not have a relationship with the customer and thus should not be
subject to the rule, or if subject to the rule, the SIA suggests that,
if the recipient broker-dealer complies with the terms and conditions
of the order, as communicated by the originating broker-dealer, the
recipient broker-dealer should have fulfilled its best execution
obligation under the rule.\16\
---------------------------------------------------------------------------

    \14\ See footnotes 6, 8 and 11, supra.
    \15\ See SIA Letter at 2.
    \16\ Id.
---------------------------------------------------------------------------

    The BMA, while objecting to this requirement, also believes that
the Best Execution Rule should not apply to the bond market.\17\
According to the BMA, the rule would cause problems in the bond market
because of the way the market operates.\18\ In addition, the BMA
believes that the wording of the rule demonstrates that it was not
intended to apply to the bond market.\19\ After the Commission's
receipt of Amendment No. 3, the BMA submitted a second comment letter
that reiterates its concerns with the proposal, and states its belief
that Amendment No. 3 does not adequately address the BMA's
concerns.\20\
---------------------------------------------------------------------------

    \17\ See BMA Letter at 2, 5.
    \18\ Id. at 1.
    \19\ Id. at 2.
    \20\ See BMA Letter 2. The Commission notes that the BMA
reasserts the concerns it raises in BMA Letters 1 and 2 in BMA
Letter 3, and further states that the proposed rule change is
deficient because it does not specifically address how certain
provisions of the proposal pertain to the bond market. BMA Letter 3
at 1-2.
---------------------------------------------------------------------------

    Instinet raises two additional points. First, Instinet argues that
use of the term ``market center'' creates a competitive disadvantage
because the rule would not apply to market centers operated by NASD and
other self-regulatory organizations (``SROs'').\21\ Instinet asks that
NASD either exclude member-operated electronic communications networks
(``ECNs'') or alternative trading systems (``ATSs'') that interact with
orders on a fully automated basis from the rule, or apply the same
obligations to the Nasdaq Market Center and the BRUT facility. Second,
Instinet asks that implementation of the proposed rule change be
delayed pending Commission action on Regulation NMS, including
interpretive guidance with respect to the obligations of market centers
under the trade through proposal.\22\
---------------------------------------------------------------------------

    \21\ See Instinet Letter at 2 and 3.
    \22\ Id. at 3.
---------------------------------------------------------------------------

III. NASD Response to Comments

    In response to the comments, NASD filed Amendment Nos. 3 and 4 to
the proposed rule change.\23\ In Amendment No. 3, NASD states that the
failure to apply the Best Execution Rule to recipient broker-dealers is
contrary to the interests of the investing public as well as the
general intent of the Best Execution Rule itself. As amended, the rule
requires a member to use reasonable diligence to ascertain the best
market for the particular security and to buy or sell in that market so
that the price to the customer is as favorable as possible under the
prevailing market conditions. The rule contains five factors that NASD
will consider in determining if the broker-dealer used reasonable
diligence to ascertain the best market for the security. Whether the
broker-dealer used reasonable diligence is factored into the
determination of whether the broker-dealer has met its best execution
obligation.
---------------------------------------------------------------------------

    \23\ See footnotes 7 and 9, supra.
---------------------------------------------------------------------------

    NASD amended the proposed rule change to replace the term ``market
center'' with the term ``market,'' which is a broader term. According
to NASD, this change was made to address the BMA's concern that the
term ``market center'' is not relevant in the bond market, as well as
Instinet's concern with respect to the proposed rule creating a
competitive disadvantage. As amended, the Best Execution Rule will
apply to all trading venues.
    In response to the BMA's assertion that the proposed rule should
not apply to the bond market, NASD stated the rule has ``never been
limited to equity securities.'' NASD cites to Rule 0116, which
enumerates the NASD rules that apply to government and other exempt
securities.\24\ The BMA argues that the bond market is not subject to
the same requirements as the equities markets, e.g. a firm quote
requirement, pre-trade quote transparency, a uniform, regulated inter-
dealer market and an inter-dealer linkage.\25\ NASD acknowledges the
differences in market structure and regulations between the equities
markets and the bond markets and notes that, at the time NASD adopted
the Best Execution Rule, the equities markets operated in a framework
similar to the current framework for bond trading. Furthermore, NASD
stated that the term ``quotation'' refers to either dollar (or other
currency) pricing or yield pricing, for purposes of debt, and that
accessibility of quotations is a factor in determining if the member
used reasonable diligence. If quotations are readily available for a
particular debt security, NASD will factor this into its assessment of
whether the member complied with its obligations under the rule. In
response to BMA Letter 2, NASD clarified the scope of the proposed rule
change by stating that a member's duty to provide best execution to
customer orders received from other broker-dealers arises when an order
is routed to the member for the

purpose of order handling and execution.\26\
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    \24\ See Securities Exchange Act Release No. 44631 (July 31,
2001), 66 FR 41283 (August 7, 2001)(SR-NASD-2000-38)(order approving
NASD Rule 0116)(''Exempted Securities Order''). See also, Securities
Exchange Act Release No. 37588 (August 20, 1996), 61 FR 44100
(August 27, 1996)(order approving NASD's proposal implementing the
expanded sales practice authority granted to NASD pursuant to the
Government Securities Act Amendments of 1993 and listing the NASD
rules that would apply to exempted securities. Among the rules was
the Best Execution Rule.
    \25\ See BMA Letter at 4.
    \26\ See footnote 9, supra.
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    Amendment No. 5 is purely a technical amendment, as its substance
was published for notice and comment in Amendment Nos. 3 and 4. With
Amendment No. 5, NASD took the substance of Amendment Nos. 3 and 4 and
placed that information in IM-2320.

IV. Discussion and Commission Findings

    The Commission has reviewed carefully the proposed rule change, the
comment letters, and NASD's response to the comments, and believes that
NASD has responded appropriately to the concerns raised by the
commenters. The Commission finds that the proposed rule change, as
amended, is consistent with the requirements of the Act and rules and
regulations thereunder applicable to a national securities association,
and, in particular, with Section 15A(b)(6) of the Act, which requires,
among other things, that the rules of a national securities association
be designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, and, in general, to
protect investors and the public interest.\27\ Regarding the
commenters' assertion that a recipient broker-dealer's compliance with
the terms and conditions of the order, as communicated by the
originating broker-dealer, solely, should constitute satisfaction of
the duty of best execution with regard to routed orders, the Commission
believes that such compliance should be considered a significant factor
in determining if the recipient broker-dealer has met its duty of best
execution, but should not be the sole factor to consider. In Amendment
Nos. 3 and 4, NASD addressed the concerns raised by commenters. In
response to issues raised by the BMA, NASD changed the terminology of
the proposed rule change, replacing ``market center'' with ``market''
and stating that it will interpret the term broadly. Additionally, the
Commission notes that the Best Execution Rule currently applies to the
bond markets.\28\ NASD indicated in its amendment how it intends to
apply the factors in the rule that provide evidence of reasonable
diligence in the context of the bond market, and how it will interpret
price in connection with debt. In Amendment No. 4, NASD made a clear
distinction between a member's duties when acting as provider of
liquidity versus acting as an order handler for another broker-dealer.
The Commission believes that the revisions clarify how the rule applies
in the context of the debt market. Furthermore, the Commission notes
that, at the time NASD adopted its Best Execution Rule, the equity
markets were subject to a regulatory regime similar to the one under
which the bond markets operate today.\29\ The Commission expects that
the NASD will take into account the structure and operation of the debt
markets when applying the rule to debt market participants.
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    \27\ 15 U.S.C. 78o-3(b)(6). In approving this proposed rule
change, the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
    \28\ See footnote 24, supra, and Exempted Securities Order.
    \29\ As NASD notes, in 1968 when the Best Execution Rule was
adopted, the market for equity securities was much different than it
is today. For example, there was no consolidated tape and thus no
readily available trade or quotation information. Market makers in
over-the-counter securities conducted transactions via telephone,
after checking prices either in the pink sheets or by information
they obtained using the telephone. In addition, there was no
requirement to report transactions to NASD within 90 seconds.
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    With regard to the commenters' claim that the proposal would create
an unfair competitive disparity between otherwise similarly situated
market centers that execute orders on an electronic agency basis, the
Commission notes that electronic communications networks (``ECNs'') are
subject to a different regulatory regime than SROs. ECNs are broker-
dealers by definition, and must be members of an SRO; consequently ECNs
are subject to SRO rules. Moreover, the Commission believes the
proposed rule change, as amended, will not unfairly affect ECN
operations.
    With respect to the commenters' concern that implementation of this
proposal should be delayed until after the Commission has adopted
guidance under the trade through proposal of Regulation NMS, the
Commission notes that the Commission adopted Regulation NMS subsequent
to the commenters filing their comment letters.
    Finally, the Commission views markup obligations and the duty of
best execution as separate and distinct requirements. NASD Rule 2320(f)
states that best execution obligations ``do not relate to the
reasonableness of commission rates, markups or markdowns which are
governed by Rule 2440 and IM-2440.''

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\30\ that the proposed rule change (SR-NASD-2004-026), as modified
by Amendment Nos. 1-5, be, and it hereby is, approved.
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    \30\ 30 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\31\
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    \31\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-14196 Filed 8-25-06; 8:45 am]

BILLING CODE 8010-01-P