8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

1 The Second Addendum to the Economic Assessment for the 8 hour Ozone Implementation Rule Phase 2, Final 8 hour Implementation Rule Estimated Differences in Cost, Emission Reductions, Energy, and Economic Impacts from Adopting a Less Flexible RACT and RFP Implementation Framework Relative to the Regulatory Baseline, A More Flexible Implementation Framework Including a Qualitative Assessment on Consultations Regarding The Clean Air Interstate Rule, Reasonable Further Progress Scenarios, and Reformulated Gasoline Requirements and Appendix A: Technical Support Document by E. H. Pechan & Associates, Inc. for the Difference Analysis as well as Appendix B: Impact of Selected Federal and Local Control Measures on Predicted 8 hour Design Values in the Eastern U. S.

Prepared by the Office of Air Quality Planning and Standards & Office of Policy Analysis & Review Office of Air and Radiation U. S. Environmental Protection Agency August 29, 2005 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

2 Table of Contents Sections of the Difference Analysis 1. Introduction and Summary 2. RACT and RFP Options 3. Data 4. Methodology 5. Estimated Differences and Limitations 6. Other Considerations Technical Appendices Appendix A: Technical Support Document for the Emission Reduction, Cost, Energy, and Economic Impact Assessment of RACT and RFP Options Appendix B: Impact of Selected Federal and Local Measures on Predicted 8 hour Design Values in the Eastern U. S. 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

3 1.0 Introduction and Summary 1.1 Background The second addendum to the 2003 Cost, Emission Reduction, Energy, and Economic Impact Assessment of the Proposed Rule Establishing the Implementation Framework for the 8 hour 0.08ppm Ozone National Ambient Air Quality Standard ( NAAQS) addresses the potential economic consequences of alternative interpretations of Clean Air Act requirements for reasonably available control technology ( RACT) and alternative reasonable further progress ( RFP) requirements. The word potential is used because of inherent uncertainties in projecting future environmental and economic factors. But, more importantly, the implementation of the RACT and RFP requirements will be carried out by the states in their implementation plan and rules development processes. Hence, the realized outcomes may be different than those projected in this assessment. RACT and RFP requirements are key elements of the Phase 2, ozone implementation rule.

1.1.1 Analytical Approach Used in the Proposal and Phase I Final Rule Assessment. The analytical approach used for the proposed rule as well as Phase 1 of the final rule compared the differences in potential cost, emission reduction, energy requirement, and economic impact of alternative implementation frameworks for the 8 hour ozone standard. The alternative frameworks were composed of different options for the required elements of state plans to attain and maintain the 8 hour O3 NAAQS.

In those analyses, the more flexible implementation framework which provided for expeditious attainment and maintenance of the 8 hr Ozone NAAQS served as the regulatory baseline. This reflects the fact that the law requires States to adopt plans to implement the 8 hour ozone standard even in the absence of this rule. The analyses compared the potential consequences of adopting an alternative, less flexible implementation framework with the consequences of adopting the more flexible framework. This yielded estimates of potential differences in cost, emission reduction, energy use, and economic impacts. There are inherent uncertainties in projecting future environmental and economic factors, and in projecting the way that the RACT and RFP requirements will be carried out by the states in their implementation plan and rules development processes.

1.1.2 Distinctions in the Approach Used in the Phase II Final Rule Assessment. The economic assessment for the Phase II final rule making, uses nonattainment area designations, regulatory status ( Subpart 1 versus Subpart 2), and classification ( e. g. marginal, moderate, etc.) that have been adopted in previous rulemakings. In addition, this assessment uses more recent 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

1A base case air quality simulation answers the question of what would happen in the absence of state implementation of the 8 hour standard. The base case air quality simulation used in this analysis was the same one used to simulate conditions in the absence of the Clean Air Interstate Rule. Ideally, the Clean Air Interstate Rule would be part of the base case simulation.

2http:// www. epa. gov/ oar/ oaqps/ greenbk/ gnca. html 3Subpart 1 " Marginal Like" areas meet the same ozone design value concentration requirements of Subpart 2 Moderate areas. Specifically, the design values are from 0.085ppm up to 0.092ppm for Subpart 1 " marginal like" and Subpart 2 marginal areas.

4The Clean Data Policy Memorandum. " RFP, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard," from John S. Seitz, Director, Office of Air Quality Planning and Standards. May 10, 1995 Available at http:// www. epa. gov/ ttn/ oarpg/ t1/ memoranda/ clean15. pdf.

4 emissions inventory projections and base case future air quality design value simulations. 1 Such information was not available at the time of the earlier economic assessments. That, however, does not take away from the findings of those earlier assessments. Specifically, provision of less flexible implementation frameworks to attain and maintain the 8 hour ozone NAAQS relative to more flexible frameworks results in greater cost, emission reduction, energy, and economic impacts.

1.2 Geographic, Administrative Requirements, and Methodological Scope 1.2.1 Geographic Scope. There are 126 designated 8 hour Ozone National Ambient Air Quality Standard ( 8 hr O3 NAAQS) non attainment areas. 2 For over 80% of these areas, the potential cost, emission, energy, and emission reduction impacts are not expected to be affected by the choice of less or more flexible RACT and RFP options. There are several reasons for this. ° Most designated 8 hr O3 NAAQS non attainment areas are Subpart 2 areas which are classified as marginal or Subpart 1 " marginal like" areas. 3 The Phase 2 final rule implementing the 8 hour O3 NAAQS, consistent with the Clean Air Act, does not mandate RACT and RFP emission reduction options or requirements for such areas beyond the emission reductions needed for attainment. ° For areas whose sources already meet RACT, there is no difference between the less flexible RACT and more Flexible RACT. options. ° For areas which meet the least flexible RFP requirements under base case conditions, there is no difference in requirements between the less flexible and more flexible options. ° Finally, under base case conditions, some Subpart 2 moderate and Subpart 1 moderate like areas are projected to come into attainment early enough ( and to stay that way) to use the clean data policy. 4 Hence, they can avoid some of the RFP requirements of both options. 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

5Administrative requirements refer to Congressional Mandates such as the Small Business Regulatory Enforcement Fairness , Unfunded Mandates and Reform, and Paperwork Reduction Acts as well as Executive Orders pertaining to regulatory review, distributional considerations ( children, low income and minority, populations, and tribes), and impacts ( energy).

5 Nonetheless, for 21 of the designated non attainment areas, there could be differences in cost, emission reduction, energy, and economic impacts.

1.2.3 Administrative Requirements. 5 The economic assessment done for the proposed 8 hour ozone NAAQS implementation rule addressed the various Administrative Requirements of the rule making. However, that assessment was not a substitute for what was included in the preambles to the proposed rule, the final Phase 1 implementation rule, the Phase 2 implementation rule. It was a complement.

Similarly, that assessment plus the first and second addendums also serve as complements to the language included in the Phase 2 final 8 hour ozone NAAQS implementation rule. This rule examines two sets of options to improve air quality in designated non attainment areas. The 8 hour O3 NAAQS is taken as a given. That rule, promulgated in 1997 was designed to be protective of public health and welfare with an adequate margin of safety. There is nothing in the Phase 2 implementation rule making that results in a degradation of air quality for people in nonattainment areas. Baseline air quality simulations indicate that air quality will improve in these and other areas over time as a result of federal rules reducing emissions of O3 precursors. The Phase 2 implementation rule will facilitate further reductions of such precursor emissions to foster further improvements in environmental quality for people in the designated non attainment areas. including children, low income and minority populations, and tribal members.

In the economic assessment for the proposed 8 hour ozone NAAQS implementation rule, the administrative requirements associated with federal rule development such as Executive Orders and other federal law requirements were addressed in the economic assessment as well as the Federal Register Notice. To avoid redundancies, the administrative requirements are addressed in the Administrative Requirements Section of the Federal Register Notice for the Final Phase 2, 8 hour Ozone NAAQS Rule making with references made to the second addendum and related assessments.

1.2.4 Methodological Scope. This second addendum contains both a qualitative and a quantitative analysis.

<IP_ADDRESS> Qualitative Analysis. The ability to conduct a quantitative analysis for these areas is dependent on information regarding the geographic boundaries of the non attainment 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

6Mandatory requirements such as RACT apply to emission sources of particular size. In this quantitative assessment, the assumed size was 100 tons per year of nitrogen oxides ( NOx) or volatile organic compounds ( VOCs) since this is the major source size cutoff for subpart 1 marginal and moderate areas.

6 areas, the coverage and/ or classification of the areas, base case conditions, and expected emissions and future 8 hour design values. For 9 of the 21 areas, estimates of future 8 hour design values were not available. Hence, the assessment for those areas is qualitative.

<IP_ADDRESS> Quantitative Analysis. But, estimated future 8 hour design values were available for the remaining 12 areas. A quantitative analysis is conducted for those areas.

1.3 Results 1.3.1 12 Area Quantitative Analysis. Surprisingly, not all 12 of these areas showed differences between the less flexible and more flexible RACT and RFP implementation frameworks. However, the technical assessment indicated that 1 of the 12 had no RACT eligible sources in the nonattainment area. 6 But, the assessment found that in 11 of the areas there would be a difference between the less flexible RACT and RFP options relative to the more flexible options, the regulatory baseline. ° Cost Differences. For those 11 areas, the less flexible option could mean more than $ 21.5 million ( 1997$' s) in control cost relative. The increase is not spread evenly across the 11 areas. Estimated costs of the less flexible option for the Providence, Rhode Island nonattainment areas is over $ 14 million ( 1997 $' s). The assessment suggests these costs could be reduced by adopting the regulatory baseline, the more flexible RACT and RFP otpions. ° Emission Reduction Differences. With more control cost, there is often more emission reductions. Such is the case in this assessment. The less flexible option results in 20,000 more annual tons reduction in volatile organic compounds ( VOC) in 2009 relative to the more flexible framework. But, if what is needed to attain and maintain the standard in a lower cost manner are NOx reductions, the additional reductions of VOC may not foster more expeditious attainment and maintenance of the 8 hour ozone NAAQS for such areas. The assessment also indicates the less flexible framework could result in 8400 more tons of NOx reductions in 2009. But, if those reductions are not needed to meet the standard, they may not foster expeditious attainment and maintenance of the standard. ° Energy Differences. The less flexible RACT and RFP implementation framework could mean an additional $ 1.4 million in energy expenditures. Ninety six percent of that is the result of anticipated additional natural gas use. In quantitative terms, the energy impacts of the less flexible RACT and RFP options represent about 14 million cubic meters of natural gas, 200 thousand kwhrs of electricity, and 1 thousand tons of coal. The monetized and quantified energy impacts could be averted by adopting the regulatory baseline, the more flexible RACT and RFP options. 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

7A situation is the application of controls to a particular establishment or to a sector ( e. g. gasoline service stations) or product ( e. g. consumer solvents, asphalt ).

7 ° Economic Impact Differences. The less flexible RACT and RFP options result in economic impacts affecting more sectors and facilities. Simulations suggest higher costs for facilities, products, or services in 18 source categories. Examples of source categories include consumer solvents, cutback asphalt, oil and natural gas production, municipal landfills, fabric printing, and gasoline service stations. Hundreds of establishments could be affected if the less flexible options were adopted. The additional cost as a percent of annual revenue surrogates is estimated to be < 0.5% in 86% of the situations, < 1.0% in 92% of the situations, and < 3% in 96% of the situations. 7 There were instances where the annualized cost as a percent of the revenue surrogate could be > 6%. These potential economic impacts could be averted with adoption of the regulatory baseline, the more flexible RACT and RFP options.

1.3.2 9 Area Qualitative Analysis. Of the 9 areas treated qualitatively, all are in California. For 8 of these areas, the cost and other impact differences may arise due only to the RFP provisions of the less flexible versus more flexible options. But, a comparison of the 2002 emissions inventory with projections and interpolations for 2008 indicates reductions in VOC and NOx emissions with controls in place. If those conditions represent base case, then some of these areas might meet RFP requirements of both options without additional cost. Hence, a cost and other impact difference would not be realized. The other area may have cost and other impact differences due both the RACT and RFP provisions of the less versus the more flexible options.

1.4 Limitations.

There are a variety of limitations to any forward looking analysis. Here are some examples.

1.4.1 Double Counting. In the case of this assessment, a recently promulgated economically significant rule, the " Clean Air Interstate Air Quality Rule," is omitted from the baseline. In addition, certain states have strengthened their implementation plans to address 1 hour ozone NAAQS obligations. Omission of these factors could impact projected design values and estimated difference between the less flexible RACT and RFP framework and the regulatory baseline, the more flexible RACT and RFP framework.

1.4.2. Not Reflecting What the States Will Actually Do. The second addendum is a simulation of what certain non attainment areas will do given a less flexible RACT and RFP options relative to the more flexible RACT and RFP implementation framework options. The actual level and distribution of costs and other impacts is dependent on what is in the state implementation plans. This in turn is dependent on other factors. For example, the states may have a richer or different 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

8 set of emission reduction choices than that assumed here. In addition, the states may choose to adopt cap and trade as opposed to command and control systems to satisfy their emission reduction requirements. And/ or, the states may focus more on the distribution of costs amongst the various sectors as opposed to overall level of cost to attain and maintain the 8 hour ozone NAAQS.

1.4.3. Not Doing and RFP Assessment for the California Areas. A comparison of 2002 versus 2010 VOC and NOx controlled emissions for the affected counties in the 9 California nonattainment areas indicates substantial reductions of the O3 precursor emissions. If those 2010 projections represent base case control levels, some of the 9 areas may not have cost and other impact differences due to RFP. This could happen if the areas meet the less flexible RFP option ( and hence also the more flexible option) under base case conditions. ( i. e., without developing additional local emission reduction requirements).

1.4.4. Not Factoring the Distinctions in the Timing of Control Costs. The first 6 year RFP requirements are to be met by 12 31 08. The RACT reductions must be met in spring of 2009. The control measures for the moderate area state implementation plan attainment demonstration are to be in place by the beginning of the ozone season of 2009. Of the 21 areas in the difference analysis 10 are either in Texas or California. The ozone season for those areas starts 1 01 09. Hence, there is not significant difference in the timing of the RFP control measure expenditures compared to the other controls measures. For the other nonattainment areas in the difference analysis, their ozone season in 2009 starts 4 01 09. Hence, there is a 4 month difference in the timing of the cost outlays for the RFP requirements on the one hand and RACT and the other measures needed for attainment on the other hand. This distinction in the timing of control expenditures is not reflected in this analysis. The result is a potential bias that could understate the cost difference between the less and more flexible RFP and RACT options. How big is this time difference in dollar terms? For example, with a real interest rate of 7%, control expenditures of $ 1 occurring 3 months in the future would be equivalent to $ 0.98 in expenditures today. With a 3% real interest rate, the present value of a dollar spent 3 months hence would be $ 0.99.

1.5 Structure of the Second Addendum Section 2 of the addendum describes in abbreviated fashion the RACT and RFP options as they pertain to designated Subpart 1 and Subpart 2 non attainment areas. However, the official description of those options is what is contained in the Federal Register Notice for the Final Phase II O3 8 hour NAAQS implementation rule making. Section 3 describes the data and identifies the references used to select the areas with potential differences and impacts and to conduct the impact analysis. Section 4 identifies the methodology used to identify two sets of areas. One set is comprised of areas that are likely to have impact differences. The other set includes that are unlikely to have differences in impacts. For the areas expected to have impact differences, this section also describes the methodology to assess potential cost, emission reduction, energy use, and 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

8 Appendix A. Technical Support Document: Potential Impacts of Less Flexible and More Flexible RFP and RACT Options in Implementation of the 8 hour Ozone NAAQS. E. H. Pechan & Associates, Inc. 5528 B Hempstead Way, Springfield, VA 22151, September 2005.

9 economic impacts. Section 5 describes the findings of the analysis. The limitations noted in section 1.4 apply to those findings. A technical support document is included as an appendix to the second addendum. 8 This document provides information on the base case RFP analysis for selected areas as well as the cost, emission reduction, energy, and economic impact calculations for 12 areas treated quantitatively in the difference analysis.

Section 6 provides a qualitative assessment regarding the potential consequences of the following: ° The Clean Air Interstate Rule and consultation recommendation; ° Alternative reasonable further progress ( RFP) scenarios ° year of the inventory used to calculate the first 6 year RFP requirement ° consequences of a Subpart 1 moderate area requesting and receiving an attainment date extension and the RFP requirements using a 2002 beginning year emissions inventory; and, ° the Reformulated Gasoline Requirement ( RFG).

There are 2 appendices to the Second Addendum.. ° Appendix A provides technical supporting information regarding the differences in cost, emission reduction, energy, and economic impacts between the more flexible option ( the regulatory baseline) and the less flexible RFP and RACT options ° Appendix B describes an assessment of selected federal and local measures on predicted 8 hour design values for in the eastern the U. S. 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

10 2.0 RACT and RFP Options The preambles to the 6/ 23/ 03 proposal ( Sections VI. I andVI. K) and the Phase 2 Final 8 hour ozone implementation rule ( Sections IV. E and IV. G) contain a thorough description of the RACT and RFP options. As noted in Section 1 of this addendum, the assessment in this second addendum compares the potential consequences of adopting the set of less flexible RACT and RFP options to the regulatory baseline, the set of more flexible options for RACT and RFP. The applicability of these options to any 8 hour designated non attainment area depends in part on the coverage and classification of the designated non attainment areas. The options are summarized and described in general terms in Table 2.1.

Table 2.1 General Description of the More Flexible and Less Flexible RACT and RFP Options Rule Element/ Type of Area More Flexible Less Flexible RACT/ Subpart 1 areas that are " moderate like." The designated non attainment areas have 8 hr design values > 92ppb * Areas attaining within 5 years meet RACT through attainment demonstration. If the area needs another 5 years from designation to attain, sources must comply with RACT by spring 2009. This corresponds to Option 1 in the proposal. Treated like Subpart 2 areas. RACT must be installed by spring 2009. This corresponds to Option 2 in the proposal.

RFP/ Subpart 1 areas that are " moderate like." They have 8 hr design values of > 92ppb RFP is what is needed to attain. This is corresponds to Option 1 in the preamble. RFP is a 15% reduction of 2002 VOC &/ or Nox emissions by 12 31 08. This corresponds to Option 2 in the preamble.

RFP/ Subpart 2 moderate areas** If RFP is met under the 1 hr NAAQS, 15% RFP is presumed met for the 8 hr and the area must then meet Subpart 1 RFP. If not, the 15% reduction of 2002 VOC emissions by 12 31 08 applies. This corresponds to Option 2 in the preamble. RFP is a 15% reduction in 2002 VOC emissions by 12 31 08.

* The Clean Air Act provides no discretion regarding RACT provisions for Subpart 2 moderate and above areas. Under the Phase 2 rule, sources in all designated Subpart 2 moderate and above areas must comply with RACT by spring of 2009. ** The subpart 2 areas covered in the quantitative difference anaysis are either classified as marginal or moderate. 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

11 3.0 Data Certain data help determine the set of areas in the difference analysis. Other data help determine the projected differences in cost, emissions, energy, and economic impacts. The other parts of section 3 describe these data in more detail as well as the associated data sources.

3.1 Data used to determine the designated nonattainment areas included in the difference analysis Table 3.1 presents descriptions, uses, and sources of the data which help determine which designated nonattainment areas included in the difference analysis.

Table 3.1 Areas in the Difference Analysis: Data Descriptions, Uses, & Sources Description Use( s) Source 8 hr and 1 hr O3 NAAQS nonattainment areas, geographic information, coverage, classification, design values, whether areas are in the ozone transport region ( OTR). Determine which designated 8 hr non attainment areas may not be subject to different RACT or RFP options because of their coverage and/ or classification. Also, determine which areas may have already met some of the requirements as a result of the requirements of their 1 hour classification. And, determine if area may have OTR requirements. The index for the information is found at: http:// www. epa. gov/ oar/ oaqps/ green bk/ o8index. html The pertinent links are " A. 1. d.": non attainment areas sorted Area/ State/ County and " B. 1.": currently designated 1 hr and 8 hr areas. OTR information at: http:// www. epa. gov/ oar/ caa/ caa184. txt Projected 8 hour O3 design values for non attainment areas in the Comprehensive Air Quality Model with Extensions ( CAMx) Determine which areas are simulated to come into attainment under base case condition by 2007 & are expected to stay that way thus using the Clean Data Policy to avert RFP requirements. Simulations and interpolations using CAM x*. See docketed excel file: 8hrEA_ diffanalysis_ projections. xls See docketed Word file: 8hrEA_ diffanalysis_ projections. doc Emissions inventory for 2002 with projections for other years Determine the amount of reductions off the 2002 emissions inventory to meet the RFP options Clean Air Interstate Rule ( CAIR) Emissions Inventory Technical Support Document. March 4, 2005 Comparison of RFP requirements net of creditable reductions** Determine which areas meet the most stringent RFP option under base case conditions Appendix A. Technical Support Document * Comprehensive Air Quality Model with Extensions. Simulations were conducted using the CAIR base case. 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

12 Interstate Rule). ** Includes deleting from creditability emission reductions due to pre 1990 mobile source controls.

3.2 Data used in the Difference Analysis There are 2 sets of areas included in the difference analysis. One set of areas is outside the CAM x domain. The assessment for the these areas is qualitative. Another set of areas is within the CAMx Domain and is treated quantitatively. The data used for the quantitative assessment are presented in Table 3.2.

Table 3.2. Difference Analysis: Data Descriptions, Uses, & Sources Description Use( s) Source( s)

Base case control levels for the sources. Identify what sources are presumed to meet RACT under the 1 hr. standard. Provide input for the control measure and cost ordering by measure, source category and ozone precursor. EPA/ gov/ air/ interstateairquality/ pdf s/ finaltechn01. pdf & Appendix A: Technical Support Document Control measures and cost ordering ($/ ton of emission reduction in ozone precursor( s) Design low cost means of meeting the less flexible RACT and RFP options relative to the regulatory baseline. Provide inputs for estimating difference in cost, emission reduction, & energy impacts. Referenced in Appendix A: Technical Support Document Economic Data: sectors, revenue for the affected geographic areas Develop surrogates for the annual revenue to reflect annualized cost as % of annual revenues where there is a difference between the less and more flexible options Economic Census. http:// www. census. gov/ epcd/ ec97/ u s/ US000. HTM Emission reduction targets ( ERTs) for 4 areas. ERTs are the amount estimated amount of reductions needed to attain the 8 hour standard. Helps avoid an overestimate of the differences since reductions from the less flexible RACT and/ or RFP requirements can be used to help fulfill emission reductions targets objectives. Docketed excel and word file describing the process and estimates. 8hrEA_ diffanalysis_ controltrargets. doc; and, Verification_ summarytable. xls Energy Data: the amount of control cost difference resulting in additional natural gas, electricity, coal and oil use. Assess the dollar and physical quantities of additional energy requirements of the less flexible RACT & RFP options relative to the more flexible options, Appendix A: Technical Support Document 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

13 1. Use the EPA Green book to determine there are 84 Subpart 1 Areas 2. Use the EPA Green book to determine that 63 of the areas are " marginal like" ( design value < 0.92ppb) and have no Subpart 1RACT or RFP requirements under the proposed Phase 2 rule making options.

3. For the remaining 21 areas, determine if there are base case RACT requirements or if creditable emission reductions can fulfill the RFP requirements under the most stringent RFP option. Where base case design value predictions are available, determine if the clean data policy may be used to avert the most stringent RFP requirements. 10 of the 21areas should not have impact differences due to the RACT and RFP options. That leaves 11 Subpart 1 areas with potential impact differences. 4.0 Methodology There are two major parts to the methodology. The first part allows one to determine the areas that may have cost and other impact differences. This is done by first determining those areas that are unlikely to have cost and other differences are identified. The remaining areas then are those that could have an impact difference. The second part of the methodology is used to determine the causes and nature of the impact differences.

4.1 Determining which of the designated 8 hour O3 NAAQS non attainment areas that are not expected to have a difference in impacts.

The methodology applied to the designated 8 hour O3 NAAQS Subpart 1 non attainment areas is described first followed by a description of the methodology for the Subpart 2 designated non attainment areas.

4.1.1 Methodology to determine Subpart 1 areas excluded from the difference analysis. The methodology involves 3 steps. See Figure 4.1. More information regarding step 3 is provided in Table 4.1.

Figure 4.1 Methodology to Determine the Excluded Subpart 1 Areas NEED TO INSERT ARROWS 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

14 Table 4.1 Applying the Methodology to the 21 Subpart 1 areas.

Designated Non Attainment Area RACT Requirement in Base Case RFP Met/ Averted* in Base Case Allegan, MI Not required Averted requirement Buffalo, NY* Yes, in an OTC state Yes, via NOx reductions Cincinnati, OH* Yes, was a 1 hr moderate area Averted requirement Columbus, OH Not required Yes, Via Combination of VOC and Nox Reductions Door, WI Not required No, but some creditable reductions Erie, PA* Yes, in an OTC state Averted requirement Franklin Co., PA* Yes, in an OTC state Averted requirement Hancock, Knox, Lincoln, Waldo Cos., ME* Yes, in an OTC state Averted requirement Indianapolis, IN Not required Averted requirement Jamestown, NY* Yes, in an OTC state Averted requirement Kern Co., CA Yes, was 1 hr serious area Not met. Could not determine if averted.

Kewaunee Co., WI* Yes, was 1 hr moderate area Averted requirement Knoxville, TN Not required Averted requirement Louisville, KY IN* Yes, was 1 hr moderate area Averted requirement Nevada Co. ( Western Part), CA Not required Not met. Could not determine if averted.

Pittsburgh Beaver Valley, PA* Yes, in an OTC state Averted requirement Raleigh Durham Chapel Hill, NC Not required in counties that were not part of the 1 hr moderate area Averted requirement San Diego, CA Yes, was 1 hr moderate area Not met. Could not determine if averted.

South Bend Elkhart, IN Not required ( 1 hr marginal) Averted requirement Toledo, OH* Yes, was 1 hr moderate Averted requirement Youngstown Warren Sharon, OHPA Not required for OH counties Averted requirement 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

15 1. Use the EPA Green book to determine there are 42 Subpart 2 areas 2. Use the EPA Green book to determine that there are 16 Subpart 2 marginal areas. These areas have no RFP ( or RACT) requirements under the either of the Proposed Phase 2 rule 3. For the remaining 26 moderate and above areas, determine if they meet or avert the 4. For the remaining 13 areas, determine if any did not get 15% VOC RFP for the 1 hr standard. For these areas, there is not difference between the RFP options. There are 3 such * No projected difference for these 10 areas ** Under the Clean Data Policy 4.1.2 Methodology to determine the Subpart 2 areas excluded from the difference analysis. The methodology involves 4 steps. See Figure 4.2. Table 4.2 presents more information regarding application of steps 3 and for each affected area.

Figure 4.2 Methodology to determine the excluded Subpart 2 areas Need to insert arrows 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

16 Table 4.2 Applying the methodology to 26 moderate or above Subpart 2 areas Area RFP met/ averted** in the base case Baltimore* Met requirement Boston Lawrence* Averted requirement Boston Portsmouth* Averted requirement Charlotte* Not met or averted. However, 1 hr RFP not met Chicago Not met or averted Cleveland* Not met or averted. However, 1 hr RFP not met Dallas Not met or averted Fredricksburg* Averted requirement Greater Connecticut* Met requirement Houston* Met requirement Jefferson* Averted requirement LA San Bernadino Could not determine if averted.

LA South Coast Could not determine if averted.

Milwaukee Not met or averted.

New York* Met requirement Philadelphia* Met requirement Poughkeepsie* Averted requirement Providence Not met or averted Riverside Could not determine if averted.

Sacramento Could not determine if averted.

San Joaquin Could not determine if averted.

Sheboygan* Not met or averted. However, 1 hr RFP not met.

Springfield* Averted requirement St. Louis* Averted requirement Ventura Could not determine if averted. 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

17 Washington* Met requirement.

* Excluded from the difference analysis. ** Under the Clean Data Policy 4.2 Determining the impact differences for selected designated non attainment areas between the more flexible and less flexible sets of RFP and RACT options.

Some areas in the difference analysis are addressed in a qualitative fashion. Others are addressed in a quantitative manner.

4.2.1 Methodology for areas treated qualitatively. The model ( CAM x) used to predict future ozone design values in the east meets certain performance criteria when applied there. That model does not consistently meet those performance criteria when applied in the west. Hence, the air quality model cannot be used in the west to predict base case future air quality design values and associated information used to help determine what the quantified cost and other differences might be. However, where those differences could arise ( e. g. RFP or RACT or both) can be determined by looking at the present and past 1 hour O3 NAAQS classifications for those areas. In addition, the base year ( 2002) and projected ( 2010) emissions inventory given controls can be compared to look at the direction and relative size of emission changes overtime.

The baseline RACT requirements and RFP are identified for these areas. For example, areas having a 1 hour classification of moderate had to meet RACT under the 1 hour standard and are assumed to meet it. If that is the case, there is no difference between the less and more flexible RACT requirements. An assessment was not performed to see if the least flexible RFP requirements could be met in the base case. Hence, there is a potential difference due the RFP options in all the areas. See Table 4.3 Table 4.3 Areas Treated Qualitatively and Where Impact Differences May Arise Area Difference Possible Because of RACT Options Difference Possible Because of RFP Options Kern CO.( eastern Kern only)* No Yes LA San Bernardino** No Yes LA South Coast** No Yes Nevada Co* Yes Yes Riverside** No Yes Sacramento** No Yes San Diego* No Yes 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

18 San Joaquin** No Yes Ventura** No Yes * Subpart 1 ** Subpart 2 4.2.2 Methodology for areas treated quantitatively. There are 8 Subpart 1 areas and 4 Subpart 2 areas in the quantitative difference analysis. The methodology for the Subpart 1 areas is described in section <IP_ADDRESS> while the methodology for the 4 Subpart 2 areas is described in section <IP_ADDRESS>.

<IP_ADDRESS> Methodology for the 8 Subpart 1 areas treated quantitatively. Each of the 8 areas has no cost in meeting the regulatory baseline, the more flexible RACT and RFP options. Table 4.4 identifies the area that have may have additional cost in meeting either the less flexible RACT or RFP options.

Table 4.4. Some of the features of the 8 Subpart 1 areas treated quantitatively in the difference analysis.

Area more flexible RACT more flexible RFP less flexible RACT less flexible RFP Allegan no cost no cost cost no cost Columbus no cost no cost cost no cost Door no cost no cost cost cost Indianapolis no cost no cost cost no cost Knoxville no cost no cost cost no cost Raleigh Durham* no cost no cost cost no cost South Bend no cost no cost cost no cost Youngstown* no cost no cost cost no cost * Parts of the non attainment area had prior RACT requirements. Cost differences are expected for parts of these areas. Those parts that did not have prior 1 hour O3 NAAQS or OTR requirements.

These 8 Subpart 1 " moderate like" areas are projected to meet the 8 hr O3 NAAQS under base case conditions. Hence, there are no further reductions in emissions required to attain and maintain the standard. The requirements for the more flexible set of options as described in general terms in Table 2.1 would define RACT and RFP as what is needed to meet the standard in an expeditious manner. Because these areas are projected in the base case to meet the standard in the time prescribed in the statute, they are presumed to incur no cost in adhering to the more flexible set of 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

9Appendix A: Technical Support Document 19 RACT and RFP options.

That is not the case for the less flexible option set. For the less flexible set of options, there may be RACT costs for all 8 areas. In addition, Door is not projected to avert the less flexible RFP requirements. Hence, under the less flexible option Door would have to contend with RACT and RFP requirements. However, the RACT would be creditable in meeting the RFP requirement.

RACT is specific determination for individual sources or groups of sources. What is provided in this second addendum difference analysis is illustrative and not a substitute for the RACT determinations made by the states. However, for purposes of this analysis, RACT is presumed unmet in the base case if the follow conditions apply for a particular source: ° Base case control efficiency is zero ° Base case emissions are greater than 100 tons ° Control measure exist that have an efficiency of < 80% ° Cost for the least costly measure getting reductions is <$ 1561/ ton ( 1997 dollars )

The assessment of RACT cost includes a search of control measures and emissions inventory data in view of the above conditions.

Emission reductions from RACT requirements are creditable in meeting remaining RFP requirements. The reductions from the 2002 base emission are compared to the interpolated emissions inventory values for 2008 with adjustments for emission reductions due to motor vehicle controls required prior to the 1990 Clean Air Act. The result is the net additional reductions in VOC or NOx to meet the 15% RFP requirement. Emission reductions to meet the less flexible RFP requirements for these areas can come from within as well as outside the non attainment area. If they come from outside the area certain restrictions apply. They must be within the state and no more than 200km away for NOx reductions and no more than 100 km away for VOC reductions. In addition, if reductions come from outside the non attainment area, the 2002 and projected base case 2008 emissions from those facilities must be added to the emissions from within the nonattainment area. AirControlNET is used to determine the lower cost way to meet the less flexible RFP option. The technical appendix describes the procedures and base case and difference analysis results. 9 With the cost estimates for RACT and where appropriate RFP ( i. e. Door) comes information on the amount of emission reductions as well as energy use relative to the regulatory baseline, the more flexible RACT and RFP options. The investment and operating cost estimates are put on an annual basis and compared to annual revenues associated with facilities of that type. The result would be a potential price increase needed to cover the cost of control ( not taking into account market 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

20 adjustments). These ( e. g. cost, emission reduction, energy requirements, economic impacts) are all the parts of the Phase 2 differences analysis results for these 8 areas.

<IP_ADDRESS> Methodology for the 4 Subpart 2 areas treated quantitatively in the difference analysis. The difference analysis for these areas is affected by consideration of emission reduction targets to attain and maintain the standard and estimated RACT requirements for a couple of counties in one of the areas. Table 4.5 provides a description of some of the features of the four areas.

Table 4.5. Some of the features of the 4 Subpart 2 areas treated quantitatively in the difference analysis.*

Area More Flexible RFP Less Flexible RFP*** Emission Reduction Target ( ERT)*

Chicago Expected to meet requirements in the base case. cost. 1731 tons of VOC reductions yes. 62,296 tons of NOx in counties other than Cook or Lake. 52,952 of VOC for those counties Dallas** 1370 tons of VOC from base case cost. 5931 tons of VOC reductions yes. 27,700 tons of NOx reductions Milwaukee Expected to meet requirements in the base case. cost. 803 tons of VOC reductions yes. 34,804 tons of NOx reductions Providence Expected to meet requirements in the base case cost. 8209 tons of VOC yes. 3684 tons of NOx reductions * The ERT is an estimate of what is required for attainment. The figures in the table are approximations. More detail is provided in the Technical Support Document. ** There are some counties in this non attainment area under the 8 hour standard that were not part of the nonattainment area under the 1 hour standard. That means that there is a mandatory RACT requirement for affected sources in those counties ( Ellis, Johnson, Kaufman, Parker, Rockwell). Application of RACT to those sources is expected to bring 2884 tons of NOx reductions. VOC RACT requirements appear met in the base case. Also, with the more flexible option the area has some choices in meeting the RFP requirement. It can get the reductions from the " new" counties. Or, bring the other counties into the base from which the 15% is determined and get the reductions from those counties. Bringing the old counties into the base would be 1370 + 4561 or 5931 tons of VOC reductions. *** These RFP tonnages do not reflect adjustments that would have to be made if the reductions are secured outside the non attainment area. See the Technical Support Document ( Appendix A). 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

21 5.0 Estimated Differences and Limitations 5.1 Areas with Quantitative Analysis Tables 5.1 through 5.4 present the estimated quantitative differences in cost, emission reduction, energy, and economic impacts for the less flexible RACT and RFP options relative to the regulatory baseline, the more flexible options. The detailed information is found in Appendix A: Technical Support Document..

5.1.1 Emission Reduction Differences. Eleven of the 12 areas are found to have emission reduction differences. For Allegan County, Michigan and Door, Wisconsin, although there were RACT requirements under the less flexible option, sources either did not meet the RACT size requirements and/ or the criteria used in this analysis and set forth in section <IP_ADDRESS>. The less flexible RACT and RACT options result in 20,155 more tons VOC and 8414 tons of NOx emissions reductions than the more flexible RACT and RFP options. The total estimated emission reductions of VOC and NOx under the less flexible RACT and RFP options were 75820 and128616 respectively.

Table 5.1 Emission Reductions Differences Between the Less Flexible & More Flexible RACT & RFP Options Area VOC Emissions ( TPY) NOx Emissions ( TPY) Cause Allegan Co., MI 0 0 No RACT sources Chicago Gary Lake Cook 2713 0 Less flexible RFP Columbus, OH 0 1061 Less flexible RACT Dallas, TX 7078 0 Less flexible RFP Door, WI 1025 0 Less flexible RFP Indianapolis, IN 0 723 Less flexible RACT 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

22 Knoxville, TN 0 4030 Less flexible RACT Milwaukee, WI 1085 0 Less flexible RFP Providence, RI 8254 0 Less Flexible RFP Raleigh Durham, NC 0 965 Less Flexible RACT South Bend Elkhart, IN 0 333 Less Flexible RACT Yngstown Warren Sharon 0 1302 Less Flexible RACT The desirability of these reductions is a function, in part, of their effectiveness in achieving 8 hour O3 NAAQS attainment and maintenance objective. For example, Dallas, Milwaukee, and Providence have a NOx emission reduction target to attain and maintain the standard. But, the less flexible options yields reductions of the VOC. All the areas with additional NOx reductions attributable to the less flexible option do need those reductions to meet the standard under base case conditions.

5.1.2 Cost Differences between the Less Flexible and More Flexible RACT & RFP Options The estimated cost to apply the less flexible RACT and RFP implementation framework options is $ 22 million more than the regulatory baseline, the more flexible RACT and RFP implementation framework options. Table 5.2 provides the estimates of the cost differences by area.

Table 5.2. Estimated Cost Difference by Area of the Less Flexible verus the More Flexible Option Area Cost Difference ( Millions of 1997$' s per year)

Allegan, MI 0 Chicago, ILL IN 0.5 Columbus, OH 1.0 Dallas, TX 2.1 Door, WI 0.3 Indianapolis, IN 0.8 Knoxville, TN 1.0 Milwaukee, WI < 0.05 Providence, RI 14.1 Raleigh Durham Chapel Hill, NC 0.4 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

23 South Bend Elkhart, IN 0.4 Youngstown Warren Sharon, OH PA 0.8 As suggested in section 5.1.1, these additional costs result from emission reductions that are not necessarily needed for expeditious attainment and maintenance of the 8 hr O3 NAAQS. Most of the additional cost from adopting the less flexible RACT and RFP implementation framework options occur in Providence for additional VOC reductions. This area has taken steps to reduce VOC emission as part of efforts to meet the 1 hour O3 NAAQS. Hence, the incremental cost of additional VOC reductions there may be higher relative to some of the other areas.

5.1.3. Energy Differences Between the Less and More Flexible RACT and RFP Options. More energy use is expected with the less flexible RACT and RFP implementation framework. The cost of this additional energy use is estimated at $ 1.4 million ( 1997 $' s). Eighty five percent of this is the result of estimated increases in natural gas use. The amount of anticipated direct additional electricity, natural gas, and coal use is about 200 thousand KWHrs, 14 million cubic meters, and 100 tons respectively. The percent of the cost associated with additional electricity, natural gas and coal use by control measure is presented in Table 5.3. More information regarding the allocation of the costs is presented in Appendix A: Technical Support Document.

Table 5.3. Estimated Additional Direct Energy Impacts of the Less Flexible RACT and RFP Options By Control Measure as a Percent of Energy Cost Control Measure Coal Electricity Natural Gas Natural Gas Reburning 0 0 85.45 Selective Catalytic Reduction 0 3.6 0 Selective Non Catalytic Reduction 3.8 1.3 0 Thermal Incineration 0 8.2 6.1 Water Injection 0 3.6 0 5.1.4. Estimated Additional Potential Economic Impacts of the Less Flexible RACT and RFP Options. These are only approximations of the sources that may have additional costs and hence the potential for additional economic impact relative to the regulatory baseline, the more flexible RACT and RFP implementation framework option. Estimates of annualized costs are compared to surrogates for annual revenue as explained in the Technical Support Document in Appendix A. Table 5.4 identifies the source categories to which controls are applied, the number of times that occurs, and the range of annualized cost to annualized revenue surrogate percentages. 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

24 In some instances controls may only be applied to some facilities within a category. An average revenue surrogate per facility is developed. This may or may not correspond to the actual revenues at the facility which may have to put on additional controls under the less flexible Phase 2 implementation framework option. The technical support document in Appendix A estimates the annualized cost to sales percentages in the for over 200 source categories. For most of these applications, annualized cost as a percent of the annual revenue proxy is less than 0.1%. However, for 8 of the applications for the source categories noted in Table 5.4, the percentage is between 1 and 3. And, for 4 of the applications the percentage is even higher, ranging from 3.1 to more than 17%.

5.2 Areas with a Qualitative Analysis. As noted in the methodology section, there are 9 areas where a qualitative analysis is conducted. We know from the quantitative assessment of 12 areas in section 5.2 that the less flexible option is likely to result in more emission reductions, higher costs, higher energy requirements, and more economic impacts. In Appendix B, there is a comparison of the 2002 emission inventories along with projected 2010 and interpolated 2008 emission of VOC and NOx. The information suggestions that the less flexible option's impacts may be diminished because of projected emissions with control requirements in place.

Table 5.4 Sources, Application of Additional Controls, Cost to Revenue Ratios Source Category Number of Applications*

Automobile Refinishing 6 Cement Manufacturing 1 Consumer Solvents 96 Cutback Asphalt 31 Fabric Printing & Coating 10 Glass Manufacture 9 IC Boilers 10 IC Engines 2 Industrial Maintenance Coatings 4 Municipal Landfills 11 Oil and Natural Gas Production 16 Rubber & Plastics Manufacture 4 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

25 Service Stations 4 Steel Production 1 Traffic Markings 1 Utilities 8 Wood Products & Furniture 5 * The number of applications totals 219. However, this may be less than the number of sources affected. For examples, controls applying to all service stations in an area could affect more than one service station.

6.0 Other Considerations The Phase 2 ozone implementation rule economic assessment included designated non attainment areas thought to have a potential difference in cost as a result of adopting a less flexible as opposed to a more flexible implementation framework. The scope of the quantitative assessment included estimates of the cost, emission reduction, energy, and economic impacts of adopting a less flexible framework relative to the regulatory baseline: the more flexible framework.

However, there are also other considerations which are addressed qualitatively. These include the potential consequences of the following : ° the Clean Air Interstate Rule ( CAIR) and consultation recommendation ° alternative reasonable further progress ( RFP) scenarios ° RFP requirements determined from an emissions inventory from a more recent year such as 2004, not a 2002 ° assuming a Subpart 1 area requests and receives an attainment date extension and has to comply with RFP requirements using a 2002 emissions inventory ° the Reformulated Gasoline Requirement ( RFG)

6.1 CAIR and Recommended Consultations.

EPA issued CAIR under Section 110( a)( 2)( d) to require states to control emissions that significantly contribute to nonattainment, or interfere with maintenance, of the PM2.5 or 8 hour ozone national ambient air quality standards by downwind areas in other states. Reductions are required in two phases; for NOx, compliance with the initial NOx cap must be achieved by 2009. EPA has encouraged states to achieve reductions in SO2 and NOx emissions from electrical generating units ( EGUs) 25MW and greater under an EPA administered multi state trading 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

10For example, 8 hour non attainment areas designated as moderate must fulfill their RFP obligations by 12 31 08.

11The NOx reduction outside the non attainment areas for the simulated local strategy had to be from the same state as the non attainment area but could be no farther than 200km from the nonattainment area.

26 program.

CAIR and the state plans designed to attain and maintain the 8 hour ozone standard in individual non attainment areas, will work together to promote attainment of the 8 hour ozone standard. For example, to the extent that CAIR controls improve air quality in a downwind state, the downwind state will have lower emission reduction targets for attaining and maintaining the 8 hour ozone standard. In addition, CAIR emission reductions in a state will help the state's own nonattainment areas meet the 8 hour ozone standard, and reductions closer to the violating monitor generally will have greater impact. Depending on the timing of the CAIR emission reductions, CAIR emission reductions in and nearby nonattainment areas also can help satisfy reasonable further progress requirements. 10 A simulated local control strategy looked a 16 areas projected to be in non attainment in 2009 and 2010 without CAIR in place. The strategy predicted reductions in NOx emissions from 25MW and larger EGUs of about 200 thousand tons per year within the non attainment areas and nearby. 11 The CAIR and local control strategy NOx reductions were estimated off the same " base case" emission inventory. However, the 200 thousand tons of local control strategy NOx reductions are not in addition to the NOx reductions resulting from the CAIR. But, the distribution of NOx emission reductions given only the CAIR requirement may be different from a situation where there is both the CAIR as well as ozone attainment plan requirements.

There is analytical uncertainty which clouds the comparison between CAIR and the local control strategy NOx emissions reductions for specific EGUs. Some of the analytical uncertainty stems from the fact that the CAIR simulations used a market framework and greater adjustment possibilities for the electrical generating units. For example, in those simulations, there could be reduced power output at some units. The local control strategy simulation used an engineering cost approach. This approach did not provide for price adjustments in factor markets or price demand elasticity effects in product markets. Perhaps more importantly, some of the analytical uncertainty results from the inability to accurately forecast what state and local air quality officials will require of the electrical generating units in their ozone NAAQS attainment plans.

Despite those uncertainties, NOx emissions for 25MW and above EGUs under the local control strategy analysis were compared to emissions for the same set of units under the CAIR. In some non attainment and nearby areas, there were no differences in the predicted NOx levels. For other areas, under the CAIR, there were lower predicted NOx emissions ( meaning more emission 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

27 reductions). And, for still other areas, there were lower predicted NOx emissions ( meaning more emission reductions) with the local control strategy simulation.

Regardless of the simulations and comparisons, the economic entities that own the electrical generating units must make decisions how to meet the CAIR as well as other state and local NOx emission reduction provisions. The CAIR implementation plans are due in 2006. Ozone nonattainment areas must submit plan requirements by 2007. Without consultation with state and local authorities, an optimal strategy for CAIR compliance alone may not be optimal for compliance with both the CAIR and O3 attainment plan requirements. Power companies can reduce regulatory uncertainty and lower cost by consulting with the state and local air quality officials early. Similarly, air quality officials who are concerned with meeting air quality improvement requirements at lower cost may also wish to engage power companies and other emission sources who may face multiple environmental requirements within a short time period. Achieving tarted reductions from certain EGUs can lower the overall cost of the local attainment strategy where the incremental cost of targeted EGU emission reductions is less than the cost of achieving similar reductions and air quality improvements from other types of sources.

The intent of these consultations would not be to upset market behavior or incentives. Furthermore, we anticipate that these consultations will affect individual control decisions for a few areas.

6.2 Alternative Reasonable Further Progress Scenarios 6.2.1 Using a 2004 Emissions Inventory, not 2002, for Calculating the RFP Requirement. RFP requirements apply to Subpart 2 moderate and above areas as well as Subpart 1 areas that require an attainment date beyond 5 years from designation. Emission reductions from state and federal rules promulgated since the passage of the 1990 amendments may be used as credits against the RFP requirement. However, emission reductions from meeting pre 1990 federal rules and state obligations are not creditable toward meeting the 15% RFP requirement.

The 15% is a percentage of certain ( e. g. VOC) anthropogenic emissions during the ozone season for a particular year. If the year is 2002, the RFP requirement is 15% of the 2002 ozone season emissions for VOC and/ or NOx. If the year is 2004, the requirement is 15% of 2004 ozone season emissions. If emissions are expected to decline overtime, a later year for calculating the 15% would mean a smaller absolute RFP requirement. For example, 15% of 1000 is more than 15% of 750.

But, certain non attainment areas may forego RFP emissions reduction credits by using a 2004 emissions inventory in lieu of a 2002 emissions inventory. For example, the State of Texas implemented its NOx emission reduction strategy between 2002 and 2004. In addition, New York 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

12The date for meeting the 15% RFP requirement is determined by 2 factors. The first is a date 6 years from the inventory used to calculate the requirement. That would be 2010 using the 2004 inventory. The second factor is assurance that the RFP requirement is met as expeditiously as practicable. For example, given that emission reductions to attain and maintain the 8 hour standard for Subpart 2 moderate areas must be met at the start of the 2009 ozone season, that is the binding factor. And, the RFP requirement based on a 2004 emissions inventory must be met by at least the start of the 2009 ozone season.

28 City invested heavily in low emitting diesel construction equipment after September 11, 2001. But, these emission reductions are not creditable toward achieving a 15% RFP requirement if the 2004 emissions inventory is used.

Another consideration in assessing use of a 2002 versus 2004 emissions inventory to determine the RFP requirement is how much time is provided for the regulated sources to meet the RFP requirement and how much time is provided the states to develop and submit the RFP plan to EPA. For Subpart 2 areas that are classified as moderate or higher, the first 6 year ( 15%) RFP requirement using the 2002 emissions inventory as a base must be met by 12 31 08. The state RFP plans are due to EPA by 6 15 07. For states using a 2004 emissions inventory, the RFP plan is also due 6 15 07. For Subpart 2 areas that are classified as moderate or higher choosing to use the 2004 emissions inventory, the RFP requirement must be met at the start of the ozone season in 2009.12 In areas with a 12 month ozone season, the RFP requirement would have to be met by 1 01 09. For affected areas with an ozone season starting in April, use of the 2004 inventory may afford regulated sources another 3 months to meet the RFP requirements.

Yet another consideration for states looking at the choice of a 2002 versus a 2004 emission inventory for calculating the 15% RFP requirement is the amount of additional effort to produce a quality assured emissions inventory. The 2002 emissions inventory is available. It was prepared to fulfill the triennial emissions inventory requirements under 40 CFR 51, subpart A. Under those provisions, the next triennial inventory will be developed for the year 2005. But, with a 1 to 3 year time lag for quality assurance and the need to have public review and comment on the RFP plan which is due to EPA 6 15 07, the use of the 2005 inventory for determining the 15% RFP requirements may not be feasible. However, with a willingness on the part of the state to spend the additional resources to expedite data collection and quality assurance activities, a quality assured 2004 emissions inventory may be available for use in determining the 15% RFP requirement.

But, a consideration that affected state and local governments may want to undertake before seriously considering an inventory other than 2002 is whether the RFP requirement using the 2002 emissions inventory presents a substantial burden. In simulations for many areas ( See Technical Appendix A Table 4), a projected 2008 inventory was compared to one for 2002. Taking into account the creditable and non creditable emission reductions over this period, the more flexible RFP requirements for most of the areas were met under base case conditions. 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

13See Technical Memo from Frank Divitta of E. H. Pechan to Allen C. Basala of EPA 7 27 05.

14Of course, this analysis does not include Subpart 1areas in California. For those areas, we do not know if they will meet the 15% in the base case or if they will submit a plan showing demonstrating attainment in 5 years.

29 6.2.2 RFP requirement for a Subpart 1 area requiring more than 5 years to attain the 8 hour standard. Base case air quality modeling ( without consideration of CAIR) suggests that Buffalo Niagra Falls, a Subpart 1 " moderate like" area, would remain above the standard in 2010 without further emission reductions. EPA does not know whether or not the state will submit an attainment demonstration showing attainment in 5 years. Whether or not attainment can be demonstrated in 5 years may be dependent upon reductions in upwind emissions as a result of the CAIR and Canadian emission reduction programs as well as reductions in mobile and area source emissions from additional local controls in and nearby Buffalo Niagra Falls.

However, to analyze the potential consequences if the area's attainment date was longer than 5 years, an assessment of the projected 2008 emissions inventory and the RFP requirement off the 2002 emissions inventory was conducted. The assessment showed that under base case conditions, a 15% VOC only RFP requirement would be met with an additional 116 tons of emission reductions in 2008. In the case of a 15% Nox requirement, the area would achieve emission reductions greater than the 15% requirement under base case conditions. 13 Subpart 1 moderate like areas can use percentage reductions in either VOC or NOx emission to fulfill the 15% requirement. In this assessment, the 15% requirement is estimated to be fulfilled without additional expenditures. 14 6.3 Reformulated Gasoline Requirements ( RFG)

The Clean Air Act of 1990 identifies criteria met by 9 areas that must meet RFG requirements. Those areas are Baltimore, Chicago, Hartford, Houston, Los Angeles, Milwaukee, New York, Philadelphia, and San Diego. See Section 211( k)( 10)( D). There are also areas which were reclassified as severe under the 1 hour standard under section 181( b) of the Clean Air Act. These areas include Atlanta, Baton Rouge, Sacramento, San Joaquin Valley, and Washington, DC ( which was already an opt in area). However, none of these bump up areas are classified as severe or above under the 8 hour ozone national ambient air quality standard ( NAAQS).

As stated in the preamble, today's rule specifies that the nine original RFG mandatory areas must continue to use RFG at least until they are redesignated to attainment for the 8 hour standard. Similarly, areas that have been reclassified as severe areas under section 181( b) of the Clean Air Act for the 1 hour ozone NAAQS, and which were not redesignated to attainment for the 1 hour NAAQS prior to its revocation, must continue to use RFG at least until they are redesignated to attainment for the 8 hour standard. This does not change or affect any discretion EPA may 8 29 05. Fifth Draft of the Second Addendum to the O3 Implementation Cost, Energy, and Economic Impact Assessment.

30 otherwise have under the RFG provisions to modify or remove RFG requirements. The EPA is reserving for future consideration what RFG requirements apply to areas that were reclassified as severe under the 1 hour standard, but were redesignated to attainment for that standard prior to its revocation. The only such area that was redesignated to attainment prior to revocation of the 1 hour standard is Atlanta, Georgia. The EPA is also reserving for future consideration whether areas must continue using RFG after they are redesignated to attainment for the 8 hour standard, for the original nine mandatory areas as well as the areas reclassified to severe.

The RFG requirements result from provisions in the Clean Air Act and should continue to deliver air quality improvement benefits for these 14 areas relative to no RFG requirement. The cost of a potential requirement to continue RFG after an area is redesignated in attainment of the 8 hour standard would depend on whether the area could maintain the standard without RFG and the state's choices regarding which control measures can be waived ( or moved to the contingency measures column). If the RFG measure were needed for an area to maintain air quality meeting the 8 hour standard, a potential requirement to continue RFG would impose no added cost relative to the cost of maintaining the standard. If the area could maintain the standard without RFG but with continuation of other emission reducing measures, the incremental cost of continuing the RFG requirement would depend on the cost of RFG versus the cost of alternative measures to maintain the air quality standard.


[Federal Register Volume 77, Number 56 (Thursday, March 22, 2012)]
[Notices]
[Pages 16871-16872]
[FR Doc No: 2012-6864]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 29982; File No. 812-13996]

Forward Funds, et al.; Notice of Application

March 15, 2012.
AGENCY:  Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from rule 12d1-2(a)
under the Act.

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Summary of Application:  Applicants request an order to permit open-end
management investment companies relying on rule 12d1-2 under the Act to
invest in certain financial instruments.

Applicants: Forward Funds (the ``Trust''), Forward Management, LLC (the
``Adviser''), and Forward Securities, LLC (``Forward Securities'').

DATES: Filing Dates: The application was filed on January 4, 2012.
    Hearing or Notification of Hearing: An order granting the
application will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on April 9, 2012, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Elizabeth M. Murphy, Secretary, Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090;

Applicants, 101 California Street, Suite 1600, San Francisco, CA 94111.

FOR FURTHER INFORMATION CONTACT: Lewis B. Reich, Senior Counsel, at
(202) 551-6919, or Jennifer L. Sawin, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Office of Investment Company
Regulation).

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

Applicants' Representations

    1. The Trust is organized as a Delaware statutory trust and is
registered under the Act as an open-end series management investment
company. The Adviser, a Delaware limited liability company, is an
investment adviser registered under the Investment Advisers Act of
1940, as amended (the ``Advisers Act'') and serves as investment
adviser to the current series of the Trust. Forward Securities, a
Delaware limited liability company, is a registered broker-dealer under
the Securities Exchange Act of 1934, as amended (``1934 Act'') and is
expected to become the Funds' distributor before the issuance of the
requested order.
    2. Applicants request the exemption to the extent necessary to
permit any existing or future series of the Trust and any other
existing or future registered open-end investment company or series
thereof that (i) is advised by the Adviser or any entity controlling,
controlled by or under common control the Adviser and is in the same
group of investment companies, as defined in section 12(d)(1)(G) of the
Act, as the Trust; (ii) invests in other registered open-end investment
companies (``Underlying Funds'') in reliance on section 12(d)(1)(G) of
the Act; and (iii) is also eligible to invest in securities (as defined
in section 2(a)(36) of the Act) in reliance on rule 12d1-2 under the
Act (each a ``Fund of Funds''), to also invest, to the extent
consistent with its investment objectives, policies, strategies and
limitations, in financial instruments that may not be securities within
the meaning of section 2(a)(36) of the Act (``Other Investments'').\1\
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    \1\ Every existing entity that currently intends to rely on the
requested order is named as an applicant. Any existing or future
entity that relies on the requested order will do so only in
accordance with the terms and condition in the application.
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    3. Consistent with its fiduciary obligations under the Act, each
Fund of Funds' board of directors will review the advisory fees charged
by the Fund of Funds' investment adviser to ensure that they are based
on services provided that are in addition to, rather than duplicative
of, services provided pursuant to the advisory agreement of any
investment company in which the Fund of Funds may invest.

Applicants' Legal Analysis

    1. Section 12(d)(1)(A) of the Act provides that no registered
investment company (``acquiring company'') may acquire securities of
another investment company (``acquired company'') if such securities
represent more than 3% of the acquired company's outstanding voting
stock or more than 5% of the acquiring company's total assets, or if
such securities, together with the securities of other investment
companies, represent more than 10% of the acquiring company's total
assets. Section 12(d)(1)(B) of the Act provides that no registered
open-end investment company may sell its securities to another
investment company if the sale will cause the acquiring company to own
more than 3% of the acquired company's voting stock, or cause more than
10% of the acquired company's voting stock to be owned by investment
companies and companies controlled by them.
    2. Section 12(d)(1)(G) of the Act provides, in part, that section
12(d)(1) will not apply to securities of an acquired company purchased
by an acquiring company if: (i) The acquired company and acquiring
company are part of the same group of investment companies; (ii) the
acquiring company holds only securities of acquired companies that are
part of the same group of investment companies, government securities,
and short-term paper; (iii) the aggregate sales loads and distribution-
related fees of the acquiring company and the acquired company are not
excessive under rules adopted pursuant to section 22(b) or section
22(c) of the Act by a securities association registered under section
15A of the 1934 Act, or by the Commission; and (iv) the acquired
company has a policy that prohibits it from acquiring securities of
registered open-end investment companies or registered unit investment
trusts in reliance on section 12(d)(1)(F) or (G) of the Act.
    3. Rule 12d1-2 under the Act permits a registered open-end
investment company or a registered unit investment trust that relies on
section 12(d)(1)(G) of the Act to acquire, in addition to securities
issued by another registered investment company in the same group of
investment companies, government securities, and short-term paper: (i)
Securities issued by an investment company that is not in the same
group of investment companies, when the acquisition is in reliance on
section 12(d)(1)(A) or 12(d)(1)(F) of the Act; (ii) securities (other
than securities issued by an investment company); and (iii) securities
issued by a money market fund, when the investment is in reliance on
rule 12d1-1 under the Act. For the purposes of rule 12d1-2,
``securities'' means any security as defined in section 2(a)(36) of the
Act.
    4. Section 6(c) of the Act provides that the Commission may exempt
any person, security, or transaction from any provision of the Act, or
from any rule under the Act, if such exemption is necessary or
appropriate in the public interest and consistent with the protection
of investors and the purposes fairly intended by the policies and
provisions of the Act.
    5. Applicants state that the Funds of Funds will comply with rule
12d1-2 under the Act, but for the fact that they may invest a portion
of their assets in Other Investments. Applicants request an order under
section 6(c) of the Act for an exemption from rule 12d1-2(a) to allow
the Funds of Funds to invest in Other Investments while investing in
Underlying Funds. Applicants assert that permitting the Funds of Funds
to invest in Other Investments as described in the application would
not raise any of the concerns that the requirements of section 12(d)(1)
were designed to address.

Applicants' Condition

    Applicants agree that any order granting the requested relief will
be subject to the following condition:
    Applicants will comply with all provisions of rule 12d1-2 under the
Act, except for paragraph (a)(2) to the extent that it restricts any
Fund of Funds from investing in Other Investments as described in the
application.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-6864 Filed 3-21-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 230 (Wednesday, November 30, 2016)]
[Notices]
[Pages 86346-86348]
[FR Doc No: 2016-28776]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79386; File No. SR-BatsBYX-2016-35]

Self-Regulatory Organizations; Bats BYX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Make
Ministerial and Corrective Changes to Rules 11.9, 11.13, 11.16, 11.22,
and 11.27

November 23, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November 16, 2016, Bats BYX Exchange, Inc. (the ``Exchange'' or
``BYX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III, below, which Items have been prepared by the Exchange. The
Exchange has designated this proposal as a ``non-controversial''
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(6)(iii) thereunder,\4\ which renders it effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange filed a proposal to make ministerial and corrective
changes to Exchange Rules 11.9(a)(2), 11.13(b), 11.16(g)(4), 11.22(f),
and 11.27(a)(7)(A)(i)2.
    The text of the proposed rule change is available at the Exchange's
Web site at www.batstrading.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to make ministerial and corrective changes to
Exchange Rules 11.9(a)(2), 11.13(b), 11.16(g)(4), 11.22(f), and
11.27(a)(7)(A)(i)2. First, the exchange proposes to harmonize the
description of BYX Market Orders under Exchange Rule 11.9(a)(2) with
the description of an identical order type on the Exchange's affiliate,
Bats BZX Exchange, Inc. (``BZX''). Exchange Rule 11.9(a)(2) currently
states that a BYX Market Order that is designated as BYX Only \5\ with
a time-in-force of Day \6\ will be cancelled if, when reaching the
Exchange, it cannot be executed on the System \7\ in accordance with
Exchange Rule 11.13(a)(4) unless the reason that such BYX Market Order
cannot be executed is because it is entered into the System and the NBO
(NBB) is greater (less) than the Upper (Lower) Price Band, in which
case such order will be posted by the System to the BYX Book, and
priced at the Upper (Lower) Price Band, and re-priced as set forth in
Rule 11.18(e)(5)(B). This mirrors the description of BZX Market Orders
under BZX Rule 11.9(a)(2), but for the BZX rule stating that the BZX
Market Order in the circumstance described in the text would be posted
by the System to the BZX Book, and displayed at the Upper (Lower) Price
Band. Therefore, in order to make the description of market orders
identical under both rules, the Exchange proposes to replace the phrase
``and priced'' with the term ``displayed.\8\
---------------------------------------------------------------------------

    \5\ See Exchange Rule 11.9(c)(4).
    \6\ See Exchange Rule 11.9(b)(2).
    \7\ See Exchange Rule 1.5(aa).
    \8\ See Securities Exchange Act Release No. 73875 (December 18,
2014), 79 FR 77552 (December 24, 2014) (SR-BATS-2014-068).
---------------------------------------------------------------------------

    Second, the Exchange proposed to amend Rule 11.13(b) to correct an
incorrect cross reference. Exchange Rule 11.13(b) states that depending
on the instructions set by the User \9\ when the incoming order was
originally entered, if a market or marketable limit order has not been
executed in its entirety pursuant to Exchange Rule 11.13(a) above, the
order shall be eligible for additional processing under one or more of
the routing options listed under paragraph (a)(3) of Rule 11.13. The
reference to paragraph (a)(3) of Rule 11.13 is incorrect as the routing
options

are listing under paragraph (b)(3) of Rule 11.13. Therefore, the
Exchange proposes to replace reference to paragraph (a)(3) with
paragraph (b)(3).
---------------------------------------------------------------------------

    \9\ See Exchange Rule 1.5(cc).
---------------------------------------------------------------------------

    Third, the Exchange proposes to amend Rule 11.16(g)(4) to delete an
unnecessary cross reference. Exchange Rule 11.16(a)(4) states that
``[t]he pass-through of any compensation to a Member in accordance with
this subparagraph (g) is unrelated to any other claims for compensation
that are made in accordance with, and subject to the limits of,
subparagraph (d) of this Rule 11.16.'' The Exchange now proposes to
delete reference to ``11.16'' as a specific reference to the rule is
not integral nor necessary to the meaning or application of Rule 11.16
generally.\10\
---------------------------------------------------------------------------

    \10\ Removal of the rule reference would also harmonize the rule
language with similar rule of the Exchange's affiliates, Bats EDGA
Exchange, Inc. and Bats EDGX Exchange, Inc. SR-Bats-EDGX-2016-65 and
SR-BatsEDGA-2016-28.
---------------------------------------------------------------------------

    Fourth, the Exchange proposes to amend Rule 11.22(f) to delete a
description of the Latency Monitoring data product, which the Exchange
ceased to offer in May 2015. The Exchange determined that the customer
demand at that time did not warrant the infrastructure and ongoing
maintenance expense required to support the product.
    Lastly, the Exchange proposes to amend Rule 11.27(a)(7)(A)(i)2. to
correct a typographical error by replacing the phrase ``one of more''
with ``one or more''.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \11\ in general, and furthers the objectives of Section
6(b)(5) of the Act \12\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest. The Exchange believes the proposed changes promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and a national market system
because they seek to correct an incorrect cross-reference and
typographical error, harmonize identical rules with the Exchange's
affiliates, as well as eliminate a reference to a market data product
that is no longer provided. The Exchange notes the changes to Exchange
Rules 11.9(a)(2), 11.13(b), 11.16(a)(4), and 11.27(a)(7)(A)(i)2. are
ministerial and do not alter the applications of each rule. In
addition, the deletion of references to the Latency Monitoring Data
product removes references to a product the Exchange no longer provides
and that the Exchange is not required by any rule or regulation to
offer. As such, the proposed amendments would foster cooperation and
coordination with persons engaged in facilitating transactions in
securities and would remove impediments to and perfect the mechanism of
a free and open market and a national market system.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. On the contrary, the
proposed rule change will have no impact on competition as it is simply
makes ministerial and corrective changes while not altering the meaning
or application of each rule.

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.

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

    Because the foregoing proposed rule change does not: (A)
Significantly affect the protection of investors or the public
interest; (B) impose any significant burden on competition; and (C) by
its terms, become operative for 30 days from the date on which it was
filed or such shorter time as the Commission may designate it has
become effective pursuant to Section 19(b)(3)(A) of the Act \13\ and
paragraph (f)(6) of Rule 19b-4 thereunder,\14\ the Exchange has
designated this rule filing as non-controversial. The Exchange has
given the Commission written notice of its intent to file the proposed
rule change, along with a brief description and text of the proposed
rule change at least five business days prior to the date of filing of
the proposed rule change, or such shorter time as designated by the
Commission.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (1)
Necessary or appropriate in the public interest; (2) for the protection
of investors; or (3) otherwise in furtherance of the purposes of the
Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File No. SR-BatsBYX-2016-35 on the subject line.

Paper Comments

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

All submissions should refer to File No. SR-BatsBYX-2016-35. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing will also be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only

information that you wish to make available publicly. All submissions
should refer to File No. SR-BatsBYX-2016-35 and should be submitted on
or before December 21, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-28776 Filed 11-29-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 98 (Wednesday, May 21, 2014)]
[Proposed Rules]
[Page 29149]
[FR Doc No: 2014-11789]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

46 CFR Part 69

[Docket No. USCG-2011-0522]
RIN 1625-AB74

Tonnage Regulations Amendments

AGENCY: Coast Guard, DHS.

ACTION: Notice of public meeting.

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SUMMARY: The Coast Guard announces a public meeting to take place on
June 5, 2014, in Arlington, Virginia to receive comments on a notice of
proposed rulemaking (NPRM) published in the Federal Register on April
8, 2014, under the title ``Tonnage Regulations Amendments.'' This
proposed rule would amend the tonnage regulations by implementing
amendments to the tonnage measurement law made by the Coast Guard
Authorization Act of 2010, codifying principal technical
interpretations issued by the Coast Guard, and incorporating
administrative, non-substantive clarifications of and updates to the
tonnage regulations.

DATES: The meeting will be held on June 5, 2014 from 10:00 a.m. to 1:00
p.m. The meeting may conclude before the allotted time if all matters
for discussion have been addressed.

ADDRESSES: The meeting will be held at the U.S. Coast Guard Recruiting
Command (CGRC), 4200 Wilson Boulevard, in the Alexander Hamilton Room,
6th floor, Arlington, VA 20598-7200.

FOR FURTHER INFORMATION CONTACT: If you have questions concerning the
meeting or the proposed rule, please call or email Mr. Marcus Akins,
Marine Safety Center, Tonnage Division (MSC-4), Coast Guard, telephone
(703)-872-6787, email<EMAIL_ADDRESS>If you have questions on
viewing or submitting material to the docket, call Ms. Cheryl F.
Collins, Program Manager, Docket Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Background and Purpose

    On April 8, 2014, the Coast Guard published an NPRM in the Federal
Register (79 FR 19420) entitled ``Tonnage Regulations Amendments''. The
tonnage regulations implement legislation concerning the measurement of
vessels to determine their tonnage (part J of 46 U.S.C. subtitle II).
Tonnage is used for a variety of purposes, including the application of
vessel safety, security, and environmental protection regulations and
the assessment of taxes and fees.
    You may view this NPRM, and public comments submitted thus far, in
the online docket by going to the Federal eRulemaking Portal at http://www.regulations.gov. Once there, search for the docket number USCG-
2011-0522, and then click ``Open Docket Folder.'' If you do not have
access to the internet, you may view the docket online by visiting the
Docket Management Facility in Room W12-140 on the ground floor of the
DOT West Building, 1200 New Jersey Avenue SE., Washington, DC 20590,
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. We have an agreement with the Department of Transportation to
use the Docket Management Facility.
    Anyone can search the electronic form of comments received into any
of our dockets by the name of the individual submitting the comment (or
signing the comment, if submitted on behalf of an association,
business, labor union, etc.). You may review a Privacy Act notice
regarding our public dockets in the January 17, 2008, issue of the
Federal Register (73 FR 3316).

Information on Service for Individuals With Disabilities

    For information on facilities or services for individuals with
disabilities or to request special assistance at the public meeting,
contact Mr. Marcus Akins at the telephone number or email address
indicated under the FOR FURTHER INFORMATION CONTACT section of this
notice.

Meeting Details

    Members of the public may attend this meeting up to the seating
capacity of the room. We plan to record the meeting using an audio-
digital recorder, and to make that audio recording available through a
link in our online docket.
    A valid government-issued photo identification (for example, a
driver's license) will be required for entrance to the building and
meeting space. To facilitate the building security process, and to
request reasonable accommodation, those who plan to attend should
contact the meeting coordinator, Mr. Marcus Akins, 7 days prior to the
meeting by using the contact information in the FOR FURTHER INFORMATION
CONTACT section of this notice. Requests made after May 29, 2014, might
not be able to be accommodated.
    We encourage you to participate in this meeting by commenting
orally, or submitting written comments to the Coast Guard personnel
attending the meeting who are identified to receive them. These
comments will be posted to the online docket and will include any
personal information you have provided.

Submitting Other Written Comments

    You may also submit written comments to the docket before or after
the meeting using any one of the following methods:
    (1) Federal eRulemaking Portal: http://www.regulations.gov.
    (2) Fax:<PHONE_NUMBER>.
    (3) Mail: Docket Management Facility (M-30), U.S. Department of
Transportation, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590-0001.
    (4) Hand Delivery: Same as mail address above, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. The telephone
number is<PHONE_NUMBER>.
    To avoid duplication, please use only one of these four methods.
All comments and related material submitted after the meeting must
either be submitted to the online docket on or before July 7, 2014, or
reach the Docket Management Facility by that date.

    Dated: May 15, 2014.
F.J. Sturm,
Acting Director of Commercial Regulations and Standards, U.S. Coast
Guard.
[FR Doc. 2014-11789 Filed 5-20-14; 8:45 am]
BILLING CODE 9110-04-P