[Federal Register Volume 83, Number 195 (Tuesday, October 9, 2018)]
[Rules and Regulations]
[Pages 50482-50484]
[FR Doc No: 2018-21464]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2018-0301; Product Identifier 2017-NM-112-AD; Amendment
39-19407; AD 2018-19-07]
RIN 2120-AA64

Airworthiness Directives; Airbus SAS Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule.

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SUMMARY: We are adopting a new airworthiness directive (AD) for all
Airbus SAS Model A300 series airplanes; Model A300 B4-600, B4-600R, and
F4-600R series airplanes, and Model A300 C4-605R Variant F airplanes
(collectively called Model A300-600 series airplanes); and Model A310
series airplanes. This AD was prompted by a report of yellow hydraulic
system failure, including both braking accumulators, due to failure of
the parking brake operated valve (PBOV). This AD requires replacement
of a certain PBOV with a different PBOV. We are issuing this AD to
address the unsafe condition on these products.

DATES: This AD is effective November 13, 2018.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in this AD as of November 13,
2018.

ADDRESSES: For service information identified in this final rule,
contact Airbus SAS, Airworthiness Office--EAW, Rond-Point Emile
Dewoitine No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36
96; fax +33 5 61 93 44 51; email [email protected];
internet http://www.airbus.com. You may view this service information
at the FAA, Transport Standards Branch, 2200 South 216th St., Des
Moines, WA. For information on the availability of this material at the
FAA, call<PHONE_NUMBER>. It is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-
0301.

Examining the AD Docket

    You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-
0301; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this final rule, the regulatory evaluation, any comments received, and
other information. The address for Docket Operations (phone: 800-647-
5527) is U.S. Department of Transportation, Docket Operations, M-30,
West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Dan Rodina, Aerospace Engineer,
International Section, Transport Standards Branch, FAA, 2200 South
216th St., Des Moines, WA 98198; telephone and fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 by adding an AD that would apply to all Airbus SAS Model A300
series airplanes; Model A300 B4-600, A300 B4-600R, and F4-600R series
airplanes, and Model A300 C4-605R Variant F airplanes (collectively
called Model A300-600 series airplanes); and Model A310 series
airplanes. The NPRM published in the Federal Register on April 27, 2018
(83 FR 18483). The NPRM was prompted by a report of yellow hydraulic
system failure, including both braking accumulators, due to failure of
the PBOV. The NPRM proposed to require replacement of a certain PBOV
with a different PBOV.
    We are issuing this AD to address failure of the PBOV, which could
result in no braking capability during ground operations, possibly
leading to damage to the airplane and injury to people on the ground.
    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Union, has issued EASA AD
2017-0153, dated August 17, 2017 (referred to after this as the
Mandatory Continuing Airworthiness Information, or ``the MCAI''), to
correct an unsafe condition for all Airbus SAS Model A300 series
airplanes; Model A300 B4-600, B4-600R, and F4-600R series airplanes,
and Model A300 C4-605R Variant F airplanes (collectively called Model
A300-600 series airplanes); and Model A310 series airplanes. The MCAI
states:

    An occurrence was reported where yellow hydraulic system,
including both braking accumulators, was lost. This was confirmed by
ECAM [electronic centralized aircraft monitor] warnings and single
chimes during taxiing. Normal braking on green hydraulic circuit was
used until aeroplane stopped at parking position. A few seconds
later, the aeroplane slowly accelerated, until colliding with a wall
and a bus. The crew reported that the parking brake was selected and
full braking pedals were applied, but with no effect since normal
braking was inhibited after Parking Brake was set to ON.
Investigation results identified that this occurrence was due to
failure of the parking brake operated valve (PBOV), Part Number (P/
N) A25315-1.
    This condition [parking brake failure], if not corrected, could
lead to further incidents, possibly resulting in damage to the
aeroplane and injury to persons on the ground.
    Prompted by this event, Airbus issued Service Bulletin (SB)
A300-32-0467, SB A310-32-2151, SB A300-32-6117 and SB A300-32-9023,
as applicable, to provide instructions for in-service installation
of the PBOV P/N A25315020-2 introduced by Airbus Modification 13201
for A300/A310/A300-600 and Airbus Modification 19601 for A300-600ST.
    For the reason described above, this [EASA] AD requires
replacement of the PBOV P/N A25315-1 by PBOV P/N A25315020-2.

    You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-
0301.

Comments

    We gave the public the opportunity to participate in developing
this final rule. The following presents the comments received on the
NPRM and the FAA's response to each comment.

Support for the NPRM

    The Air Line Pilots Association, International (ALPA) indicated its
support for the NPRM.

Request To Revise the Compliance Time in the Proposed AD

    Airbus requested that the compliance time of the proposed AD be
revised so operators would have all required actions completed by
August 31, 2022, instead of 60 months after the effective date of the
final rule. Airbus noted that August 31, 2022, is the calendar date
that corresponds with the compliance time in EASA AD 2017-0153, which
is 60 months after August 31, 2017 (the effective date of EASA AD 2017-
0153).
    We disagree with the commenter's request. In consideration of the
average utilization rate by the affected U.S. operators, the practical
aspects of an orderly modification of the U.S. fleet during regular
maintenance periods, and the availability of required parts, we have
determined that a 60-month compliance time is appropriate. However,
most ADs, including this one, permit operators to accomplish the
requirements of an AD at a time earlier then the specified compliance
time.
    Furthermore, using the compliance time proposed by Airbus would
effectively reduce the compliance time for this AD, and we would have
to provide an additional public comment period, which would further
delay the issuance of this AD. We have not changed this AD in regard to
this issue.

Conclusion

    We reviewed the relevant data, considered the comments received,
and determined that air safety and the public interest require adopting
this final rule as proposed, except for minor editorial changes. We
have determined that these minor changes:
     Are consistent with the intent that was proposed in the
NPRM for addressing the unsafe condition; and
     Do not add any additional burden upon the public than was
already proposed in the NPRM.

Related Service Information Under 1 CFR Part 51

    Airbus SAS has issued Service Bulletin A300-32-0467, dated July 4,
2017; Service Bulletin A300-32-6117, dated July 4, 2017; and Service
Bulletin A310-32-2151, dated July 4, 2017. This service information
describes procedures for replacing the PBOV. These documents are
distinct since they apply to different airplane models. This service
information is reasonably available because the interested parties have
access to it through their normal course of business or by the means
identified in the ADDRESSES section.

Costs of Compliance

    We estimate that this AD affects 147 airplanes of U.S. registry. We
estimate the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
                Action                         Labor cost           Parts cost        product        operators
----------------------------------------------------------------------------------------------------------------
PBOV replacement......................  6 work-hours x $85 per            $4,764          $5,274        $775,278
                                         hour = $510.
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Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    We are issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.
    This AD is issued in accordance with authority delegated by the
Executive Director, Aircraft Certification Service, as authorized by
FAA Order 8000.51C. In accordance with that order, issuance of ADs is
normally a function of the Compliance and Airworthiness Division, but
during this transition period, the Executive Director has delegated the
authority to issue ADs applicable to transport category airplanes and
associated appliances to the Director of the System Oversight Division.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

Adoption of the Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

2018-19-07 Airbus SAS: Amendment 39-19407; Docket No. FAA-2018-0301;
Product Identifier 2017-NM-112-AD.

(a) Effective Date

    This AD is effective November 13, 2018.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to the Airbus SAS airplanes identified in
paragraphs (c)(1) through (c)(6) of this AD, certificated in any
category, all manufacturer serial numbers.
    (1) Model A300 B2-1A, B2-1C, B2K-3C, B2-203, B4-2C, B4-103, and
B4-203 airplanes.
    (2) Model A300 B4-601, B4-603, B4-620, and B4-622 airplanes.

    (3) Model A300 B4-605R and B4-622R airplanes.
    (4) Model A300 F4-605R and F4-622R airplanes.
    (5) Model A300 C4-605R Variant F airplanes.
    (6) Model A310-203, -204, -221, -222, -304, -322, -324, and -325
airplanes.

(d) Subject

    Air Transport Association (ATA) of America Code 32, Landing
gear.

(e) Reason

    This AD was prompted by a report of yellow hydraulic system
failure, including both braking accumulators, due to failure of the
parking brake operated valve (PBOV). We are issuing this AD to
address failure of the PBOV, which could result in no braking
capability during ground operations, possibly leading to damage to
the airplane and injury to people on the ground.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) PBOV Replacement

    Within 60 months after the effective date of this AD, replace
the PBOV having part number (P/N) A25315-1 with a PBOV having P/N
A25315020-2, in accordance with the Accomplishment Instructions of
Airbus Service Bulletin A300-32-0467, dated July 4, 2017; Airbus
Service Bulletin A300-32-6117, dated July 4, 2017; or Airbus Service
Bulletin A310-32-2151, dated July 4, 2017; as applicable.

(h) Parts Prohibition

    (1) After modification of an airplane as required by paragraph
(g) of this AD, do not install any PBOV having P/N A25315-1 on that
airplane.
    (2) For an airplane that, as of the effective date of this AD,
has a PBOV having P/N A25315020-2 installed: As of the effective
date of this AD, do not install any PBOV having P/N A25315-1 on that
airplane.

(i) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Section, Transport Standards Branch, FAA, has the
authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the International Section, send it to the attention of
the person identified in paragraph (j)(2) of this AD. Information
may be emailed to: [email protected]. Before using any
approved AMOC, notify your appropriate principal inspector, or
lacking a principal inspector, the manager of the local flight
standards district office/certificate holding district office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain corrective actions from a manufacturer, the action must be
accomplished using a method approved by the Manager, International
Section, Transport Standards Branch, FAA; or the European Aviation
Safety Agency (EASA); or Airbus SAS's EASA Design Organization
Approval (DOA). If approved by the DOA, the approval must include
the DOA-authorized signature.
    (3) Required for Compliance (RC): If any service information
contains procedures or tests that are identified as RC, those
procedures and tests must be done to comply with this AD; any
procedures or tests that are not identified as RC are recommended.
Those procedures and tests that are not identified as RC may be
deviated from using accepted methods in accordance with the
operator's maintenance or inspection program without obtaining
approval of an AMOC, provided the procedures and tests identified as
RC can be done and the airplane can be put back in an airworthy
condition. Any substitutions or changes to procedures or tests
identified as RC require approval of an AMOC.

(j) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information
(MCAI) EASA AD 2017-0153, dated August 17, 2017, for related
information. This MCAI may be found in the AD docket on the internet
at http://www.regulations.gov by searching for and locating Docket
No. FAA-2018-0301.
    (2) For more information about this AD, contact Dan Rodina,
Aerospace Engineer, International Section, Transport Standards
Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone
and fax<PHONE_NUMBER>.

(k) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (i) Airbus Service Bulletin A300-32-0467, dated July 4, 2017.
    (ii) Airbus Service Bulletin A300-32-6117, dated July 4, 2017.
    (iii) Airbus Service Bulletin A310-32-2151, dated July 4, 2017.
    (3) For service information identified in this AD, contact
Airbus SAS, Airworthiness Office--EAW, Rond-Point Emile Dewoitine
No: 2, 31700 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax
+33 5 61 93 44 51; email [email protected]; internet
http://www.airbus.com.
    (4) You may view this service information at the FAA, Transport
Standards Branch, 2200 South 216th St., Des Moines, WA. For
information on the availability of this material at the FAA, call
206-231-3195.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Des Moines, Washington, on August 30, 2018.
Jeffrey E. Duven,
Director, System Oversight Division, Aircraft Certification Service.
[FR Doc. 2018-21464 Filed 10-5-18; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 77, Number 51 (Thursday, March 15, 2012)]
[Rules and Regulations]
[Pages 15267-15273]
[FR Doc No: 2012-6205]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[EPA-R08-OAR-2011-0015; FRL-9646-8]

Clean Air Act Full Approval of Title V Operating Permits Program;
Southern Ute Indian Tribe

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is promulgating full approval of the Title V Operating
Permits Program submitted by the Southern Ute Indian Tribe (Tribe). The
Tribe's Title V Operating Permit Program (Title V Program) was
submitted for the purpose of administering a tribal program for issuing
operating permits to all major stationary sources, and certain other
sources on the Southern Ute Indian Reservation (Reservation).

DATES: This final rule is effective March 15, 2012, and is applicable
beginning March 2, 2012.

ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-R08-OAR-2011-0015.
    All documents in the docket are listed in the www.regulations.gov
index. Although listed in the index, some information is not publicly
available, e.g., CBI or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, will be publicly available only in hard copy. Publicly-
available docket materials are available either electronically in
www.regulations.gov or in hard copy at the Air Program, Environmental
Protection Agency (EPA), Region 8, 1595 Wynkoop Street, Denver,
Colorado 80202-1129. EPA requests that if at all possible, you contact
the individual listed in the FOR FURTHER INFORMATION CONTACT section to
view the hard copy of the docket. You may view the hard copy of the
docket Monday through Friday, 8 a.m. to 4 p.m., excluding Federal
holidays.

FOR FURTHER INFORMATION CONTACT: Alexis North, Air Program, Mailcode
8ENF-AT, Environmental Protection Agency, Region 8, 1595 Wynkoop
Street, Denver, Colorado 80202-1129,<PHONE_NUMBER>, or
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Definitions

    For the purpose of this document, we are giving meaning to certain
words or initials as follows:
    (i) The word Act or initials CAA mean or refer to the Clean Air
Act, unless the context indicates otherwise.
    (ii) The word Commission means the joint Southern Ute Indian Tribe/
State of Colorado Environmental Commission.
    (iii) The words EPA, we, us or our mean or refer to the United
States Environmental Protection Agency.
    (iv) the word Title V Program means the Tribe's Application for
Approval of the Southern Ute Indian Tribe's 40 CFR Part 70 Operating
Permit Program dated January 14, 2009, the subsequent Supplement to
Application for Approval of the Southern Ute Indian Tribe's 40 CFR Part
70 Operating Permit Program dated September 28, 2010 and the
Application for Full Approval of the Southern Ute Indian Tribe's 40 CFR
Part 70 Operating Permits Program dated January 30, 2012.
    (v) The word Tribe means the Southern Ute Indian Tribe, unless the
context indicates otherwise.

Table of Contents

I. Background
II. Response to Comments
III. Evaluation of the Tribe's Authorities
    A. Current Tribal Authority
    B. Reasonably Severable Title V Program Elements
    C. Criminal Enforcement Memorandum of Understanding
IV. Evaluation of the Tribe's Title V Program Elements
    A. Summary of EPA's March 9, 2011 Proposed Interim Approval
    B. Analysis of the Tribe's Title V Program Submission Pursuant
to 40 CFR 70.4(b)
    1. Complete Title V Program Description
    2. Regulations Compromising the Title V Program
    3. Legal Opinion
    4. Relevant Title V Program Documentation
    5. Compliance Tracking
    6. Application Completeness Determination
    7. Fee Demonstration
    8. Statement of Adequate Personnel
    9. Submission Commitment
    10. Failure To Issue Permit in a Timely Manner
    11. Transition Plan
    12. Off Permit Changes
    13. Expeditious Permit Revisions and/or Modifications Review
    14. Tribe Only Revisions
    15. Permit Changes Subject to Title I and IV of the Act
    16. Permit Content and Permit Issuance, Renewal, Re-Openings and
Revisions
V. What action is EPA taking today?
VI. Statutory and Executive Order Reviews
    A. Executive Orders 12866: Regulatory Planning and Review, and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution or Use
    I. National Technology Transfer and Advancement Act (NTTAA)
    J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    K. Congressional Review Act (CRA)

I. Background

    Under Title V of the Clean Air Act (the Act or CAA) as amended
(1990), EPA has promulgated rules that define the minimum elements of a
full

approval of a Title V operating permits program for state and tribal
permitting authorities. The corresponding standards and procedures by
which the EPA will approve, oversee, and withdraw approval of state and
tribal title V operating permits programs can be found at 57 FR 32250
(July 21, 1992) and 63 FR 1322 (January 10, 2000) and are codified at
40 CFR part 70.
    In addition, as part of the 1990 Amendments to the CAA, Congress
enacted Section 301(d) authorizing EPA to ``treat Indian tribes as
states'' under the Act so that tribes may develop and implement CAA
programs in a similar manner as states within tribal reservations or in
other areas subject to tribal jurisdiction. Section 301(d)(2) of the
Act authorizes EPA to promulgate regulations specifying those
provisions of the CAA ``for which it is appropriate to treat Indian
tribes as States.'' 42 U.S.C. 7601(d)(2).
    On February 12, 1998, EPA issued a final rule specifying those
provisions of the CAA for which it is appropriate to treat eligible
Indian tribes in a similar manner as states, known as the Tribal
Authority Rule (TAR). 63 FR 7254, codified at 40 CFR part 49. As a
general matter, the regulations authorize eligible Indian tribes to
have the same rights and responsibilities as States under the CAA;
however, EPA also determined in the TAR that it is not appropriate to
treat Indian tribes in a similar manner as states for purposes of
specific CAA program submittal and implementation deadlines. This is
because, among other reasons (discussed at 59 FR at 43,964-65),
although the CAA contains many provisions mandating the submittal of
state plans, programs, or other requirements by certain dates, the Act
does not similarly require Indian tribes to develop and seek approval
of CAA programs.
    Thus, Indian tribes are generally not subject to CAA provisions
that specify a deadline by which something must be accomplished, e.g.,
provisions mandating the submission of state title V operating permits
programs under sections 502(d)(1), 502(d)(2)(B), and 502(d)(3)of the
Act. 40 CFR 49.4.
    A tribe that meets the eligibility criteria for treatment in a
similar manner as a state (TAS) may, however, choose to implement a CAA
program. A tribe may also submit reasonably severable portions of a CAA
program, if it can demonstrate that its proposed air program is not
integrally related to program elements not included in the plan
submittal and is consistent with applicable statutory and regulatory
requirements. 40 CFR 49.7(c); see also CAA Sec.  110(o). This modular
approach is intended to give Indian tribes the flexibility to address
their most pressing air quality issues and acknowledges that Indian
tribes often have limited resources with which to address their
environmental concerns. Consistent with the exceptions listed in 40 CFR
49.4, once submitted, an Indian tribe's proposed air program will be
evaluated in accordance with applicable statutory and regulatory
criteria in a manner similar to the way EPA would review a similar
state submittal. 40 CFR 49.9(h).
    EPA expects Indian tribes to fully implement and enforce their
approved CAA programs and, as with states, EPA retains its authority to
impose sanctions for failure to implement an approved air program. See
59 FR 43,956 at 43,965 (Aug. 25, 1994).
    The CAA allows Indian tribes to develop and submit title V
operating permit programs to EPA at their own discretion. The EPA's
title V operating permit program review occurs pursuant to section 502
of the Act and the part 70 regulations, which together outline criteria
for interim approval, full approval or disapproval. The Tribe has
requested operating permit program approval and this action is in
response to that request.

II. Response to Comments

    EPA did not receive any comments on our March 9, 2011 Federal
Register notice proposing interim approval of the Tribe's Title V
Program.

III. Evaluation of the Tribe's Authorities

    The EPA completed a review of the Tribe's authority to regulate air
pollution sources located within the exterior boundaries of the
Reservation. Under section 301(d) of the CAA and the TAR, EPA may treat
a tribe in a similar manner as a state for purposes of administering
certain CAA programs or grants if the tribe demonstrates that: (1) It
is a federally-recognized tribe; (2) it has a governing body carrying
out substantial governmental duties and powers; (3) the functions to be
exercised by the tribe pertain to the management and protection of air
resources within the exterior boundaries of the reservation (or in
other areas under the tribe's jurisdiction); and (4) it can reasonably
be expected to be capable, in EPA's judgment, of carrying out the
functions for which it seeks approval, consistent with the CAA and
applicable regulations. 40 CFR 49.6. The sections below outline the
details of EPA's review of the Tribe's authorities.

A. Current Tribal Authority

    In July 1998 the Southern Ute Indian Tribe applied for TAS seeking
approval to administer a CAA title V air quality operating permit
program throughout the Reservation. The State of Colorado challenged
the Tribe's CAA TAS application, asserting that the Act of May 21,
1984, Public Law 98-290, 25 U.S.C. 668, which defined the boundaries of
the Reservation, established the State's jurisdiction to regulate non-
Indian-owned air pollution sources located on fee lands within the
Reservation. The Tribe and the State, while continuing to disagree over
who has jurisdiction over these sources, formed the Southern Ute Indian
Tribe/State of Colorado Environmental Commission (Commission), and
executed an intergovernmental agreement (IGA) on December 13, 1999, to
establish a single air quality program applicable to all lands within
the exterior boundaries of the Reservation.
    In general, the IGA allows for the Tribe to implement and
administer CAA programs, on a Reservation-wide basis, through the joint
Commission. It also provides that the State will support the Tribe's
CAA TAS application as long as it is consistent with the IGA. Congress
then passed the Southern Ute and Colorado Intergovernmental Agreement
Implementation Act of 2004, Public Law 108-336 on October 18, 2004,
which codifies the basic framework of the IGA, and authorizes EPA to
grant TAS authority to the Tribe for air programs submitted under CAA
section 301(d). The Tribe has previously received TAS approval on April
26, 2000, for the purposes of grant funding under CAA Section 105.
    On January 20, 2009, the Tribe submitted its CAA TAS application
together with the Tribe's initial Title V Program. On July 14, 2009,
EPA found the Tribe's CAA program TAS application to be
administratively complete. This means the Tribe's CAA program TAS
application contains the basic information needed for EPA to make a TAS
eligibility determination.
    On March 2, 2012, EPA issued its determination finding that the
Tribe is eligible for TAS for the purposes of approval of the title V
program.

B. Reasonably Severable Title V Program Elements

    As previously discussed in Section I above, the TAR allows for
Indian tribes to seek approval of partial elements of CAA programs as
long as those portions are determined to be reasonably severable
elements, that is, not integrally related to program elements

that are not included in the plan submittal, and are consistent with
applicable statutory and regulatory requirements. 40 CFR 49.7(c). Each
submittal is evaluated for adequacy by EPA on a case-by-case basis.
    In the March 9, 2011 proposed interim approval, we stated that the
underlying Federal regulations at CAA sections 111 (Standards of
Performance for New Stationary Sources), 112 (National Emissions
Standards for Hazardous Air Pollutants) and the Acid Rain Program at
title IV of the CAA were reasonably severable elements of a title V
program. At that time, the Region's view was that the authority to
implement and enforce these regulations independent of title V, as
contrasted with the authority to include the requirements that apply to
a particular source in that source's title V permit and to enforce
those requirements, is a necessary part of an approvable title V
program.
    After careful consideration, we find that, where, as is the case
here, the title V permitting authority has the ability to include all
applicable requirements in a title V permit and to enforce all
requirements of a permit, the authority to implement CAA sections 111
and 112 as well as the Acid Rain Program directly (i.e., independently
of title V) is not a necessary element of an approvable title V program
and therefore does not require severing pursuant to 40 CFR 49.7(c).
While we believe that it is convenient in a number of respects for a
permitting authority to have the authority to implement and enforce the
Acid Rain Program and other underlying regulations outside of the
context of an approved title V program, we are not, at this juncture,
concluding that such authority is a necessary element of an approvable
title V program.
    Thus, it is not necessary to sever these CAA requirements in the
context of approving the Tribe's Title V Program.\1\ Nevertheless, we
note that the Tribe has submitted a letter to EPA expressing its intent
to incorporate CAA section 111 and 112 requirements into the
Reservation Air Code and pursue authorization from EPA to implement and
enforce those CAA programs.
---------------------------------------------------------------------------

    \1\ If direct implementation authority for CAA sections 111 and
112 and the Acid Rain Program was a necessary element of an
approvable title V program, EPA would find each of these authorities
to be a severable element of such a program.
---------------------------------------------------------------------------

C. Criminal Enforcement Memorandum of Agreement

    The TAR provides for a Federal role in criminal enforcement of a
program when the CAA or its implementing regulations mandate criminal
enforcement authority and the applicant tribe is precluded from
exercising such authority. 40 CFR 49.7(a)(6) and 49.8. In these
circumstances, the TAR allows EPA to approve a tribal application if
the tribe enters into a Memorandum of Agreement (MOA) with EPA that
provides for the Federal government to exercise primary criminal
enforcement responsibility. Id. These provisions of the TAR recognize
that Federal law places certain limitations on tribal criminal
jurisdiction and sanctions. In this instance, the IGA reached between
the Tribe and the State of Colorado contemplates that EPA will exercise
criminal enforcement within the Reservation boundary for air pollution
violations.
    On this basis, on February 10, 2009, the Tribe and EPA entered into
a MOA which provides a procedure by which the Tribe will supply
potential investigative leads to the Federal government in an
appropriate and timely manner when the Tribe is precluded from
asserting criminal enforcement authority.

IV. Evaluations of the Tribe's Title V Program Elements

    EPA conducted a thorough review of the Tribe's Title V Program
original and subsequent supplemental applications (Application for
Approval of the Southern Ute Indian Tribe's 40 CFR Part 70 Operating
Permit Program dated January 14, 2009; Supplement to Application for
Approval of the Southern Ute Indian Tribe's 40 CFR Part 70 Operating
Permit Program dated September 28, 2010; Application for Full Approval
of the Southern Ute Indian Tribe's 40 CFR Part 70 Operating Permits
Program dated January 30, 2012) according to 40 CFR 70.4(b) Elements of
the initial program submission. Upon review of those applications, EPA
concluded that the 16 elements found at 40 CFR 70.4(b) were adequately
addressed by the Tribe's Title V Program.

A. Summary of EPA's March 9, 2011 Proposed Interim Approval of the
Tribe's Title V Program

    The Southern Ute Indian Tribe submitted an initial and a
supplemental Title V Program to EPA on January 20, 2009 and September
28, 2010 respectively. The Title V Program submittals include a legal
opinion from the Tribe's legal counsel stating that the laws of the
Tribe and Southern Ute Indian Tribe/State of Colorado Environmental
Commission provide adequate legal authority to carry out all aspects of
the Title V Program, and a description of how the Tribe intends to
implement the Title V Program.
    EPA comments noting deficiencies in the Tribe's initial January 20,
2009 Title V Program submittal were sent to the Tribe in a letter dated
December 23, 2009. The deficiencies were segregated into those that
require corrective action prior to Title V Program approval, and those
that, if addressed, would serve to strengthen the Title V Program, but
were not necessary for approval.
    In the September 28, 2010 supplemental Title V Program application,
the Tribe addressed the deficiencies that required corrective action
prior to Title V Program approval as well as those that served to
strengthen the Title V Program. EPA reviewed these changes and
determined that they were adequate to allow for Title V Program interim
approval pursuant to 40 CFR 70.4(a).
    The EPA's March 9, 2011 proposed interim approval Federal Register
notice outlined two changes to the Tribe's Program to be made in order
for a final full approval to be granted. Those two changes were:
    [cir] Modify the ``emission unit'' definition to include pollutants
listed under 112(b) of the Act; and
    [cir] Modify the ``major source'' definition to include the updated
definition for purposes of regulating greenhouses gases as part of the
Prevention of Significant Deterioration/Title V Greenhouse Gas
Tailoring Rule (GHG Tailoring Rule). See 75 FR 106 at 31514-31608 (June
3, 2010).

Since the publishing of the March 9, 2011 proposed interim approval in
the Federal Register, the Tribe has made the recommended changes above
to its Program and resubmitted the Title V Program to the EPA
(Application for Full Approval of the Southern Ute Indian Tribe's 40
CFR Part 70 Operating Permits Program dated January 30, 2012). Thus,
the Title V Program meets the minimum requirements of 40 CFR 70.4(b).

B. Analysis of the Tribe's Title V Program Submission per 40 CFR
70.4(b)

1. Complete Title V Program Description
    The Tribe's Title V Program meets the requirements of 40 CFR
70.4(b)(1). The Tribe submitted a complete program description
(Application for Approval of the Southern Ute Indian Tribe's 40 CFR
Part 70 Operating Permit Program dated January 14, 2009, Tab 1, Program
Description) which describes how the Tribe intends to carry out its
responsibilities under part 70.

2. Regulations Comprising the Title V Program
    The Tribe's Title V Program, with the operating permit regulations
(Application for Full Approval of the Southern Ute Indian Tribe's 40
CFR Part 70 Operating Permits Program dated January 30, 2012, Tab 6,
Reservation Air Code, Articles I and II), meets the requirements of 40
CFR 70.4(b)(2) including evidence of procedurally correct adoption of
the Tribe's Reservation Air Code as well as public notice and comments
on its adoption. The Tribe's Title V Program satisfies the requirements
outlined in 40 CFR 70.4 and all other relevant sections of part 70.
3. Legal Opinion
    The Tribe's Title V Program meets the requirements of 40 CFR
70.4(b)(3). The Tribe's independent legal counsel, Maynes, Bradford,
Shipps & Sheftel, LLP Attorneys at Law, submitted an initial and a
supplemental legal opinion in both the initial and supplemental Title V
Program applications (Application for Approval of the Southern Ute
Indian Tribe's 40 CFR Part 70 Operating Permit Program dated January
14, 2009 and Supplement to Application for Approval of the Southern Ute
Indian Tribe's 40 CFR Part 70 Operating Permit Program dated September
28, 2010). The signatory of the legal opinion, the Tribe's legal
counsel, Sam Maynes of Maynes, Bradford, Shipps & Sheftel, LLP
Attorneys at Law, has full authority to independently represent the
Tribe in court on all matters pertaining to the Tribe's Title V
Program. The legal opinion includes a demonstration of adequate legal
authority to carry out the requirements of part 70, including authority
to carry out those activities listed at 40 CFR 70.4(b)(3)(i) through
(xiii).
    EPA notes that the Tribe's program provides for appropriate review
of final permit actions, consistent with 40 CFR Sec.  70.4(b)(3)(x), by
providing that final permit actions of the Commission are reviewable in
the United States Court of Appeals for the Tenth Circuit. See Pub. L.
108-336; Resolution No. 2008-01 dated January 31, 2008, Procedural
Rules of the Southern Ute Indian Tribe/State of Colorado Environmental
Commission, Section V. C.; see also 63 FR at 7261-62.
4. Relevant Title V Program Documentation
    The Tribe's Title V Program meets the requirements of 40 CFR
70.4(b)(4). The Tribe submitted extensive application forms
(Application for Approval of the Southern Ute Indian Tribe's 40 CFR
Part 70 Operating Permit Program dated January 14, 2009, Tab 4, Program
Forms) for review as well as comprehensive instructions for each form.
5. Compliance Tracking
    The Tribe's Title V Program meets the requirements of 40 CFR
70.4(b)(5). The Tribe submitted multiple compliance assurance
procedures and guidelines (Application for Approval of the Southern Ute
Indian Tribe's 40 CFR Part 70 Operating Permit Program dated January
14, 2009, Tab 5, Compliance Tracking).
6. Application Completeness Determination
    The Tribe's Title V Program meets the requirements of 40 CFR
70.4(b)(6). The Tribe's Reservation Air Code (Application for Full
Approval of the Southern Ute Indian Tribe's 40 CFR Part 70 Operating
Permits Program dated January 30, 2012, Tab 6, Reservation Air Code)
Article II, Sections 2-106(3) and 2-107(1)(a) demonstrates adequate
authority and procedures to determine within 60 days of receipt whether
applications (including renewal applications) are complete, to request
such other information as needed to process the application, and to
take final action on complete applications within 18 months of the date
of its submittal, except for initial permit applications, for which the
part 70 permitting authority may take up to 3 years from the effective
date of the Title V Program to take final action on the application,
consistent with 40 CFR 70.4(b)(11)(ii).
7. Fee Demonstration
    The Tribe's Title V Program includes a fee accounting, which
includes projected fee collection and programmatic costs (Application
for Full Approval of the Southern Ute Indian Tribe's 40 CFR Part 70
Operating Permits Program dated January 30, 2012, Tab 10 Revised Fee
Demonstration Figure 1 page 6 and Table 2 page 7) that set fees above
the presumptive minimum set forth in section 70.9.
    The Tribe's Title V Program requires that part 70 sources pay $50
per ton of fee pollutant (not including greenhouse gases (GHGs)) for
the first year of permit issuance and then $50 per ton plus any
percentage increase necessary to reflect any increase in the Consumer
Price Index (CPI) each year thereafter. The Tribe has adequately shown
in the Fee Demonstration, that $50 per ton is sufficient to cover the
permit program costs and that any fees generated will be used
exclusively for permit program costs. The $50 per ton is a slight
increase from the current annual part 71 fees, $47.11 per ton. EPA
notes that although the Tribe's Title V Program does not assess fees
for GHGs, the fee structure is expected to be adequate to cover all
program costs, provided that GHG sources below the threshold of 40 CFR
part 70 are not subject to the program. The Tribe will review resource
needs for GHG-emitting sources in its fee structure if necessary and
EPA will work with the Tribe if it requests assistance in establishing
title V fees related to GHG emissions.
8. Statement of Adequate Personnel
    The Tribe submitted a statement that adequate personnel and funding
have been made available to develop, administer, and enforce the Title
V Program (Supplement to Application for Approval of the Southern Ute
Indian Tribe's 40 CFR Part 70 Operating Permit Program dated September
28, 2010, Tab 10, 40 CFR 70.4(b)(8)). This demonstration, however, does
not include permit issuance to GHG sources at 100 tpy. In addition, the
Tribe has provided a supplemental staffing plan (January 4, 2011 email
from Brenda Jarrell) that outlines a staff of six individuals. Those
staff resumes can be found in Tab 11 of the Application for Full
Approval of the Southern Ute Indian Tribe's 40 CFR Part 70 Operating
Permit Program.
    EPA has reviewed the Tribe's statement and staffing plan and
concludes they are adequate. EPA notes that the Tribe's Title V Program
does not cover sources below the threshold of 40 CFR part 70 (i.e.,
only those sources that emit at least 100 tpy on a mass basis and
100,000 tpy on a Carbon Dioxide equivalent (CO2e) \2\ basis
will be treated as a major source subject to title V permitting as a
result of GHG emissions). Accordingly, applicability of the Tribe's
Title V Program is consistent with GHG permitting requirements. See 75
FR 82254 (December 30, 2010) (Title V GHG Narrowing Rule). We conclude
that the Tribe's Title V Program meets the requirements of 40 CFR
70.4(b)(8).
---------------------------------------------------------------------------

    \2\ CO2e is a measure of the global warming potential
of GHGs. Pursuant to the GHG Tailoring Rule, Table A-1 to subpart A
of 40 CFR part 98--Global Warming Potentials (74 FR 56395) should be
used in calculating CO2e for purposes of determining
whether a source's emissions exceed the major source threshold for
title V. See Prevention of Significant Deterioration and Title V
Greenhouse Gas Tailoring Rule, 75 FR 31522.
---------------------------------------------------------------------------

9. Submission Commitment
    The Tribe's Title V Program meets the requirements of 40 CFR
70.4(b)(9). The Tribe submitted a commitment

(Application for Approval of the Southern Ute Indian Tribe's 40 CFR
Part 70 Operating Permit Program dated January 14, 2009, Tab 9, 40 CFR
70.4(b)(9)) to submit, at least annually to the Administrator,
information regarding the Tribe's enforcement activities including, but
not limited to, the number of civil, judicial and administrative
enforcement actions either commenced or concluded; the penalties,
fines, and sentences obtained in those actions; and the number of
administrative orders issued.
10. Failure To Issue Permit in a Timely Manner
    The Tribe's Title V Program meets the requirements of 40 CFR
70.4(b)(10). The relevant provisions of the Tribe's Reservation Air
Code (Application for Full Approval of the Southern Ute Indian Tribe's
40 CFR Part 70 Operating Permits Program dated January 30, 2012, Tab 6,
Reservation Air Code) Article II, Sections 2-106 and 2-107 are
consistent with requirements outlined in 40 CFR 70.5(a)(2) and 70.6(f).
11. Transition Plan
    The Tribe's Title V Program meets the requirements of 40 CFR
70.4(b)(11). The Tribe's comprehensive Revised Transition Plan
(Application for Full Approval of the Southern Ute Indian Tribe's 40
CFR Part 70 Operating Permits Program dated January 30, 2012, Tab 9,
Revised Transition Plan) outlines a plan and schedule for submittal and
final action on initial permit applications for all part 70 (previously
part 71) sources within the exterior boundaries of the Reservation.
    Currently, EPA Region 8 has issued 44 part 71 permits on the
Southern Ute Indian Reservation. Transfer of primary responsibility for
permits is outlined in the Tribe's Revised Transition Plan. According
to the Tribe's Code, this Title V Program ``shall become effective upon
the date of the approval by the Administrator of the Tribe's
application for treatment as a state and part 70 program approval.''
(Application for Full Approval of the Southern Ute Indian Tribe's 40
CFR Part 70 Operating Permits Program dated January 30, 2012, Tab 6,
Reservation Air Code, Article II, Part I, 2-102).
    Thus, upon signature of this Federal Register notice and the
separate TAS application, the Tribe will begin the process of
contacting all part 71 sources and informing them of when each source
is expected to submit a part 70 permit application per the Tribe's
transition plan (Application for Full Approval of the Southern Ute
Indian Tribe's 40 CFR Part 70 Operating Permits Program dated January
30, 2012, Tab 9, Revised Transition Plan).
12. Off Permit Changes
    The Tribe's Title V Program meets the requirements of 40 CFR
70.4(b)(12). The Tribe's Reservation Air Code (Application for Full
Approval of the Southern Ute Indian Tribe's 40 CFR Part 70 Operating
Permits Program dated January 30, 2012, Tab 6, Reservation Air Code)
contains provisions, Article II, Sections 2-110, 2-111 and 2-116,
allowing for changes within a permitted facility without requiring a
permit revision, if the changes are not modifications under any
provision of title I of the Act and the changes do not exceed the
emissions allowable under the part 70 permit, provided the facility
provides written notification as required in section 70.4(b)(12)
consistent with 40 CFR 70.4(b)(12)(i) through (iii).
13. Expeditious Permit Revisions and/or Modifications Review
    The Tribe's Title V Program meets the requirements of 40 CFR
70.4(b)(13). The Tribe's Reservation Air Code (Application for Full
Approval of the Southern Ute Indian Tribe's 40 CFR Part 70 Operating
Permits Program dated January 30, 2012, Tab 6, Reservation Air Code)
Article II, Section 2-111 provides for adequate, streamlined and
reasonable procedures for expedited review of permit revisions or
modifications.
14. Tribe Only Revisions
    The Tribe's Title V Program does not allow changes that are not
addressed or that are prohibited as described in 40 CFR 70.4(b)(14).
Thus, this section does not apply to the Tribe's Title V Program.
15. Permit Changes Subject to Title I and IV of the Act
    The Tribe's Title V Program meets the requirements of 40 CFR
70.4(b)(15). The Tribe's Reservation Air Code (Application for Full
Approval of the Southern Ute Indian Tribe's 40 CFR Part 70 Operating
Permits Program dated January 30, 2012, Tab 6, Reservation Air Code)
Article II, Section 2-116(2) prohibits sources from making, without a
permit revision, changes that are not addressed or that are prohibited
by the part 70 permit, if such changes are subject to any requirements
under title IV of the Act or are modifications under any provision of
title I of the Act.
16. Permit Content and Permit Issuance, Renewal, Re-openings and
Revisions
    The Tribe's Title V Program meets the requirements of 40 CFR
70.4(b)(16). The Tribe's Reservation Air Code (Application for Full
Approval of the Southern Ute Indian Tribe's 40 CFR Part 70 Operating
Permits Program dated January 30, 2012, Tab 6, Reservation Air Code)
Article II, Sections 2-107, 2-110 and 2-112 requires the Tribe's Title
V Program to implement the requirements of 40 CFR 70.6 and 70.7.

V. What action is EPA taking today?

    EPA is promulgating a full approval rather than a full interim
approval because the issues identified in the proposed interim approval
have been addressed. Thus, the EPA is moving to a full approval in
today's action.
    The Title V Program issues identified in the EPA's March 9, 2011
proposed interim approval were addressed. The Tribe's updated RAC
became effective on August 8, 2011. An Application for Full Approval of
the Southern Ute Indian Tribe's 40 CFR Part 70 Operating Permits
Program was submitted to the EPA on January 30, 2012 for final action.
The following changes were made to the Tribe's Title V Program,
effective August 8, 2011:
    (1) The ``emission unit'' definition in the RAC (found at RAC
Section 1-103(26)) was modified to include pollutants listed under
section 112(b) of the CAA (42 U.S.C. 7412(b));
    (2) The ``major source'' definition in the RAC (found at RAC
Section 1-103(38)) was modified to include the code of Federal
regulations' updated definitions of ``major source'' and ``subject to
regulation'' (found at RAC Section 1-103(65)) for purposes of
addressing greenhouse gases as part of EPA's Prevention of
Signification Deterioration/Title V Greenhouse Gas Tailoring Rule (GHG
Tailoring Rule). See 75 FR 106 at 31514-31608 (June 3, 2010).
    The change to the ``emission unit'' definition clarified and made
the Tribe's Title V Program consistent with 40 CFR part 70. Although
the Tribe has the authority to regulate pollutants listed under 112(b)
of the Act through its ``major source'' and ``regulated air pollutant''
definitions, to be consistent, the ``emission unit'' definition should
include 112(b) pollutants as well.
    The change to the ``major source'' definition narrowed the number
of sources requiring Title V review for greenhouse gases (GHGs) after
July 1, 2011, by raising the major source threshold from 100 tons per
year (tpy) to 100,000 tpy for GHGs. With this modification, the Tribe
will be issuing Title V operating permits to sources with GHG emissions
in a manner consistent with the Federal regulations as set out in the
GHG Tailoring Rule.

VI. Statutory and Executive Order Reviews

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

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

B. Paperwork Reduction Act (PRA)

    This action does not impose any new information collection burden.
The information collection requirements in the Title V Program are all
mandated by 40 CFR part 70. The Office of Management and Budget (OMB)
previously approved the information collection requirements specified
in 40 CFR part 70 under the provisions of the Paperwork Reduction Act,
44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-0243.
The OMB control numbers for EPA's regulations in 40 CFR are listed in
40 CFR part 9.

C. Regulatory Flexibility Act (RFA)

    The RFA generally requires an agency to prepare a regulatory
flexibility analysis of any rule subject to notice and comment
rulemaking requirements under the Administrative Procedure Act, or any
other statute, unless the agency certifies that the rule will not have
a significant economic impact on a substantial number of small
entities. Small entities include small businesses, small organizations
and small governmental jurisdictions.
    For purposes of assessing the impact of this final rule on small
entities, small entity is defined as: (1) A small business as defined
by the Small Business Administration's regulations at 13 CFR 121.201;
(2) a small governmental jurisdiction that is a government of a city,
county, town, school district or special district with a population of
less than 50,000; and (3) a small organization that is any not-for-
profit enterprise which is independently owned and operated and is not
dominant in its field.
    After considering the economic impacts of this final rule on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities.

D. Unfunded Mandates Reform Act (UMRA)

    EPA's action in approving the Tribe's Title V Program does not
contain a Federal mandate that may result in expenditures of $100
million or more for state, local and tribal governments, in the
aggregate, or the private sector in any one year. Thus, this action is
not subject to the requirements of sections 202 or 205 of UMRA.
    This action is also not subject to the requirements of section 203
of UMRA because it contains no regulatory requirements that might
significantly or uniquely affect small governments.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132. The Title V Program primarily
affects private industry and does not impose significant economic costs
on state or local governments. Thus, Executive Order 13132 does not
apply to this action.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

    Subject to the Executive Order 13175 (65 FR 67249, November 9,
2000) EPA may not issue a regulation that has tribal implications, that
imposes substantial direct compliance costs, and that is not required
by statute, unless the Federal government provides the funds necessary
to pay the direct compliance costs incurred by tribal governments, or
EPA consults with tribal officials early in the process of developing
the proposed regulation and develops a tribal summary impact statement.
    EPA has concluded that this action will have tribal implications in
that it will result in responsibility for issuing title V permits being
transferred from EPA to the Tribe in that it will result in
responsibility for issuing title V permits being transferred from EPA
to the Tribe. However, it will neither impose substantial direct
compliance costs on tribal governments, nor preempt Tribal law. EPA's
action in approving the Title V Program will make the requirements of
the Title V Program enforceable under Federal law.
    EPA consulted with tribal officials early in the process of
developing this action to permit them to have meaningful and timely
input into its development. Government to Government consultation
occurred on November 3, 2010 between Region 8 Administrator, James B.
Martin and then Chairman Matthew Box. Additionally, routine staff level
conference calls and meetings have been held consistently throughout
the review process.

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

    EPA interprets E.O. 13045 (62 FR 19885, April 23, 1997) as applying
only to those regulatory actions that concern health or safety risks,
such that the analysis required under section 5-501 of the E.O. has the
potential to influence the regulation. This action is not subject to
E.O. 13045 because it approves the Title V Program submitted by the
Southern Ute Indian Tribe and thus does not concern health or safety
risks.

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

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

I. National Technology Transfer and Advancement Act (NTTAA)

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies. NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.
    This action does not involve technical standards. Therefore, EPA
did not consider the use of any voluntary consensus standards.

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

    Executive Order (E.O.) 12898 (59 FR 7629 (Feb. 16, 1994))
establishes Federal executive policy on environmental justice. Its main
provision directs Federal agencies, to the greatest extent practicable
and permitted by law, to make environmental justice part of their
mission by identifying and addressing, as appropriate,
disproportionately high and adverse human health or environmental
effects of their programs,

policies, and activities on minority populations and low-income
populations in the United States.
    EPA has determined that this final action will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it does not
affect the level of protection provided to human health or the
environment. This final action approves the Title V Program submitted
by the Southern Ute Indian Tribe and thus transfers responsibility for
issuing title V permits from EPA to the Tribe.

K. Congressional Review Act (CRA)

    The CRA, 5 U.S.C. 801, et seq., as added by the Small Business
Regulatory Enforcement Fairness Act of 1996, generally provides that,
before a rule may take effect, the agency promulgating the rule must
submit a rule report, which includes a copy of the rule, to each House
of the Congress and to the Comptroller General of the United States.
The EPA will submit a report containing this final rule and other
required information to the United States Senate, the United States
House of Representatives, and the Comptroller General of the United
States prior to publication of the final rule in the Federal Register.
A major rule cannot take effect until 60 days after it is published in
the Federal Register. This action is not a ``major rule'' as defined by
5 U.S.C. 804(2). The final rule will be effective upon approval by the
Region 8 Administrator.

    Dated: March 7, 2012.
James B. Martin,
Regional Administrator, Region 8.

    40 CFR part 70 is amended as follows:

PART 70--[AMENDED]

0
1. The authority citation for part 70 continues to read as follows:

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

0
2. In appendix A to part 70, in alphabetical order (after South Dakota
and before Tennessee), add the entry for Southern Ute Indian Tribe to
read as follows:

Appendix A to Part 70--Approval Status of State and Local Operating
Permits Programs

* * * * *

Southern Ute Indian Tribe

    (a) The Southern Ute Indian Tribe submitted an operating permits
program on January 20, 2009 with supplements on September 28, 2010
and January 30, 2012; full approval effective on March 2, 2012.
    (b) [Reserved].
* * * * *
[FR Doc. 2012-6205 Filed 3-14-12; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 86, Number 140 (Monday, July 26, 2021)]
[Notices]
[Pages 40108-40110]
[FR Doc No: 2021-15822]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92446; File No. SR-NYSENAT-2021-15]

Self-Regulatory Organizations; NYSE National, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Amending Its
Rules To Add New Subparagraph (i)(4) to Rule 7.31

July 20, 2021.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on July 6, 2021, NYSE National, Inc. (``NYSE National'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to its rules to add new subparagraph (i)(4)
to Rule 7.31 (Orders and Modifiers) regarding orders designated as
``Retail Orders.'' The proposed rule change is available on the
Exchange's website at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend its rules to add new subparagraph
(i)(4) to Rule 7.31 (Orders and Modifiers) to add a description of a
Retail Order modifier.
Proposed Rule Change
    The Exchange proposes to amend Rule 7.31 to add new subparagraph
(i)(4) to provide for ETP Holders \4\ to designate an order with a
retail modifier (``Retail Order''). The Exchange proposes that the new
``Retail Order'' modifier would be used only for purposes of such
orders being eligible for different rates on its Schedule of Fees and
Rebates (``Fee Schedule''), and is not proposing to add a retail price-
improvement program for orders designated as ``Retail Orders'' pursuant
to proposed Rule 7.31(i)(4). Instead, by adding the proposed Retail
Modifier to proposed Rule 7.31(i)(4) now, the Exchange will have
flexibility in the future to amend its Fee Schedule to add rates
designated for ``Retail Orders.''
---------------------------------------------------------------------------

    \4\ See Rules 1.1(h) (definition of ETP) & (i) (definition of
ETP Holder).

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

Proposed Modifier for ``Retail Orders''
    To define ``Retail Orders,'' the Exchange proposes to amend Rule
7.31 (Orders and Modifiers) to add a new subsection (i)(4), titled
``Retail Modifier'' to establish requirements for Retail Orders on the
Exchange. These requirements are based on the requirements to enter
orders with ``retail'' modifiers for purposes of rates available for
such orders on the Exchange's affiliates, NYSE American LLC (``NYSE
American''), New York Stock Exchange, LLC (``NYSE''), and NYSE Arca,
Inc. (``NYSE Arca'').\5\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release Nos. 92254 (June 24,
2021) (SR-NYSEAMER-2021-31) (approving the addition of ``retail''
order modifier at NYSE American Rule 7.31E(i)(4)); 72253 (May 27,
2014), 79 FR 31353 (June 2, 2014) (SR-NYSE-2014-26) (approving the
addition of ``retail'' order modifier at NYSE Rule 13(f)); and 67540
(July 30, 2012), 77 FR 46539 (August 3, 2012) (SR-NYSEArca-2012-77)
(approving the addition of ``retail'' order modifier on NYSE Arca).
These requirements are distinct from, but related to, the
requirements for a ``Retail Order'' on the Retail Liquidity Programs
available on NYSE and NYSE Arca. See NYSE Rule 7.44 and NYSE Arca
Rule 7.44-E. The Exchange does not offer a ``Retail Liquidity
Program.''
---------------------------------------------------------------------------

    Proposed Rule 7.31(i)(4)(A) would define ``Retail Order'' as an
agency order or a riskless principal order that meets the criteria of
FINRA Rule 5320.03 that originates from a natural person and is
submitted to the Exchange by an ETP Holder, provided that no change is
made to the terms of the order with respect to price or side of market
and the order does not originate from a trading algorithm or any other
computerized methodology. This proposed rule is based on NYSE American
Rule 7.31E(i)(4)(A) without any differences.
    Proposed Rule 7.31(i)(4)(B) would specify that in order for an ETP
Holder to access the proposed Retail Order pricing, the ETP Holder
would be required to designate an order as a Retail Order in the form
and/or manner prescribed by the Exchange. This proposed rule is based
on NYSE American Rule 7.31E(i)(4)(B) without any differences.
    Proposed Rule 7.31(i)(4)(C) would specify that in order to submit a
Retail Order, an ETP Holder must submit an attestation, in a form
prescribed by the Exchange, that substantially all orders designated as
``Retail Orders'' would meet the requirements set out in the definition
above. This proposed rule is based on NYSE American Rule 7.31E(i)(4)(C)
without any differences.
    Proposed Rule 7.31(i)(4)(D) would specify that an ETP Holder must
have written policies and procedures reasonably designed to assure that
it would only designate orders as ``Retail Orders'' if all requirements
of a Retail Order are met. Such written policies and procedures must
require the ETP Holder to (i) exercise due diligence before entering a
Retail Order to assure that entry as a Retail Order is in compliance
with the requirements specified by the Exchange, and (ii) monitor
whether orders entered as Retail Orders meet the applicable
requirements. If an ETP Holder represents Retail Orders from another
broker-dealer customer, the ETP Holder's supervisory procedures must be
reasonably designed to assure that the orders it receives from such
broker-dealer customer that it designates as Retail Orders meet the
definition of a Retail Order. The ETP Holder must (i) obtain an annual
written representation, in a form acceptable to the Exchange, from each
broker-dealer customer that sends it orders to be designated as Retail
Orders that entry of such orders as Retail Orders would be in
compliance with the requirements specified by the Exchange, and (ii)
monitor whether its broker-dealer customer's Retail Order flow
continues to meet the applicable requirements. This proposed rule is
based on NYSE American Rule 7.31E(i)(4)(D) without any differences.
    Proposed Rule 7.31(i)(4)(E) would specify that an ETP Holder that
fails to abide by the requirements specified in paragraphs (i)(4)(A)-
(D) of Rule 7.31 would not be eligible for the Retail Order rates for
orders it designates as ``Retail Orders.'' This proposed rule is based
on NYSE American Rule 7.31E(i)(4)(E) without any differences.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\6\ in general, and furthers the
objectives of Sections 6(b)(5) of the Act,\7\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, 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
and because it is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed amendment to Rule 7.31(i)
to add a Retail Modifier would remove impediments to and perfect the
mechanism of a free and open market and a national market system
because the proposed requirements are based on existing requirements
for orders designated as ``retail'' on NYSE American, NYSE, and NYSE
Arca for purposes of fees and credits on those exchanges, and therefore
are not novel. In addition, the proposed designation, attestation, and
written policies and procedures are also based on existing procedures
for similarly-defined orders on NYSE American, NYSE, and NYSE Arca, and
therefore are not novel.\8\ The Exchange believes that the proposed
requirements to submit attestations and to maintain written policies
and procedures are not unfairly discriminatory, because they would
apply equally to all ETP Holders that seek to enter Retail Orders.
---------------------------------------------------------------------------

    \8\ As noted above (see supra note 5), the proposed changes are
based not on the Retail Liquidity Programs available on NYSE and
NYSE Arca, but on the availability of retail fees on those exchanges
for orders properly designated as ``retail'' orders.
---------------------------------------------------------------------------

    The Exchange further believes that adding the proposed Retail
Modifier to its rules in advance of amending its Fee Schedule to add
rates for Retail Orders would remove impediments to and perfect the
mechanism of a free and open market and a national market system
because by adding the Retail Modifier now, the Exchange will have more
flexibility in the future to amend its Fee Schedule to add rates
specific to Retail Orders pursuant to a proposed rule change filed
under Section 19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(2) \10\
thereunder.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    The proposed retail modifier for purposes of providing different
rates for ``Retail Orders'' is also based in part on the availability
of such modifiers on the Nasdaq Stock Market LLC (``Nasdaq'') and Cboe
EDGX Exchange, Inc. (``EDGX''), which both offer pricing for orders
designated as ``retail'' under their respective rules, even in the
absence of a retail price improvement program. For example, Nasdaq
defines the term ``Designated Retail Order'' on its Price List as:
    [A]n agency or riskless principal order that meets the criteria of
FINRA Rule 5320.03 and that originates from a natural person and is
submitted to Nasdaq by a member that designates it pursuant to this
section, provided that no change is made to the terms of the order with
respect to price or side of market and the order does not originate

from a trading algorithm or any other computerized methodology. An
order from a ``natural person'' can include orders on behalf of
accounts that are held in a corporate legal form--such as an Individual
Retirement Account, Corporation, or a Limited Liability Company--that
has been established for the benefit of an individual or group of
related family members, provided that the order is submitted by an
individual. Members must submit a signed written attestation, in a form
prescribed by Nasdaq, that they have implemented policies and
procedures that are reasonably designed to ensure that substantially
all orders designated by the member as ``Designated Retail Orders''
comply with these requirements. Orders may be designated on an order
by-order basis, or by designating all orders on a particular order
entry port as Designated Retail Orders.\11\
---------------------------------------------------------------------------

    \11\ Nasdaq Equity 7, section 118; see also Cboe EDGX Rule 11.21
(defining ``Retail Order'' and establishing attestation requirement
to access preferential pricing for such orders).
---------------------------------------------------------------------------

    Nasdaq does not have a corresponding definition of ``Designated
Retail Order'' in its trading rules.

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

    In accordance with Section 6(b)(8) of the Act,\12\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Instead, the Exchange believes that the proposed
rule change would promote competition because it is based on the
availability of similar ``retail'' modifiers on NYSE American, NYSE,
NYSE Arca, Nasdaq, and EDGX. More specifically, multiple other cash
equity exchanges offer pricing for orders designated as ``retail''
orders, even in the absence of a retail price improvement program on
those exchanges.\13\ The Exchange believes that the proposed change
could promote competition between the Exchange and other execution
venues, including those that currently offer similar order types and
comparable transaction pricing, by providing the Exchange with the
flexibility to amend its Fee Schedule to similarly provide pricing for
orders designated as Retail Orders.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b)(8).
    \13\ See supra notes 5, 11.
---------------------------------------------------------------------------

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

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

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

    Because the foregoing proposed rule change does not (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and; (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-
4(f)(6) \15\ thereunder.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    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 necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSENAT-2021-15 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSENAT-2021-15. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSENAT-2021-15 and should be submitted
on or before August 16, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-15822 Filed 7-23-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: December 21, 2007 (Volume 72, Number 245)]
[Notices]
[Page 72692]
[DOCID:fr21de07-60]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL08-19-000]

Public Service Electric and Gas Company; Notice of Filing

December 14, 2007.
    Take notice that on December 7, 2007, Public Service Electric and
Gas Company tendered for filing a Petition for a Declaratory Order
confirming that its to-be-constructed electric transmission circuits
and related facilities are properly classified as transmission assets
for jurisdictional and ratemaking purposes.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date. On or
before the comment date, it is not necessary to serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov.
 Persons unable to file electronically should submit an

original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the

``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For

TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on January 7, 2008.

Kimberly D. Bose,
Secretary.
[FR Doc. E7-24751 Filed 12-20-07; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register: November 27, 2007 (Volume 72, Number 227)]
[Notices]
[Page 66211-66213]
[DOCID:fr27no07-125]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56813; File No. SR-CBOE-2007-52]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Granting Approval of Proposed Rule Change as
Modified by Amendment No. 1 Thereto Relating to $1 Strikes for VXD and
VXN Options and $1 Strikes for RVX, VIX, VXD and VXN LEAPs

November 19, 2007.

I. Introduction

    On July 11, 2007, the Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') a proposed rule change, pursuant to Section
19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule
19b-4 thereunder, \2\ to permit the Exchange to: (i) List and trade
CBOE Dow Jones Industrial Average Volatility Index (``VXD'') options
and Nasdaq-100 Volatility Index (``VXN'') options in $1 strike price
intervals; and (ii) list and trade CBOE Russell 2000 Volatility Index
(``RVX''), VXD, VXN and CBOE Volatility Index (``VIX'') LEAPs in $1
strike price intervals. On August 20, 2007, CBOE filed Amendment No. 1
to the proposed rule change. The proposed rule change, as modified by
Amendment No. 1, was published for comment in the Federal Register on
September 24, 2007. \3\ The Commission received one comment letter
regarding the proposal. \4\ This order approves the proposed rule
change, as amended.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 56449 (September 17,
2007), 72 FR 54306 (``Notice'').
    \4\ See Letter from John C. Nagel, Director & Associate General
Counsel, Citadel Investment Group, L.L.C. (``Citadel'') to Nancy
Morris, Secretary, Commission, dated November 2, 2007 (``Citadel
Comment'').
---------------------------------------------------------------------------

II. Description of the Proposal

    In its proposal, CBOE proposed rules to permit the Exchange to list
and trade options on the CBOE Dow Jones Industrial Average Volatility
Index (``VXD'') and the Nasdaq-100 Volatility Index (``VXN'') in $1
strike price intervals within certain parameters described below. \5\
Additionally, the rule change proposed to permit the Exchange

to list and trade CBOE Russell Volatility Index (``RVX''), CBOE
Volatility Index (``VIX''), VXD, and VXN LEAPs in $1 strike price
intervals within certain parameters also described below.
---------------------------------------------------------------------------

    \5\ The Commission previously approved the listing and trading
of VXD and VXN options, which the Exchange anticipates trading
shortly. See Securities Exchange Act Release No. 49563 (April 14,
2004), 69 FR 21589 (April 21, 2004) (approving SR-CBOE-2003-40).
---------------------------------------------------------------------------

 $1 Strikes for VXD and VXN Options

    Similar to other volatility indexes, VXD and VXN are calculated
using real-time quotes of out-of-the-money and at-the-money and second
nearly index puts and calls on the Dow Jones Industrial Index
(``DJIA'') and the Nasdaq-100 Index (``NDX'') respectively. VXD and VXN
are quoted in absolute numbers that represent the volatility of the
DJIA and the NDX respectively in percentage points per annum. For
example, a VXD level of 11.63 (the closing value of the VXD on April
26, 2007) represents an annualized volatility of 11.63% in the DJIA
Index and a VXN level of 15.97 (the closing value of the VXN on April
26, 2007) represents an annualized volatility of 15.97% in the NDX. \6\
---------------------------------------------------------------------------

    \6\ In its original filing, CBOE inadvertently reported
annualized volatility percentages of 11.637% (rather than 11.63%)
and 15.77% (rather than 15.97%). Telephone conversation between
Jennifer Yeadon, Senior Attorney, CBOE and Geoffrey Pemble, Special
Counsel, Division of Market Regulation, Commission, on November 15,
2007.
---------------------------------------------------------------------------

    According to CBOE, as with other proprietary CBOE volatility
indexes, VXD and VXN levels fluctuate quite differently than individual
equity securities or indexes of individual equity securities.
Specifically, indexes such as VXD and VXN that track volatility are
``mean-reverting,'' a statistical term used to describe a strong
tendency for the volatility index to move toward its long-term
historical average level. In other words, at historically low
volatility index levels, there is a higher probability that the next
big move will be up rather than down. Conversely, at historically high
volatility index levels, the next big move is more likely to be down
rather than up.
    Thus, as represented by CBOE, volatility indexes such as VXD and
VXN tend to move within set ranges, and even when a level moves outside
that range, the tendency towards mean-reversion often results in the
volatility index returning to a level within the range. In the case of
VXD, the historical average index value since January 2, 2002 is 16.92.
Since January 2002, VXD has fluctuated in a range between 9.28 and
41.85. Furthermore, VXD closed under 25 for 85% of the days on which
the level was calculated since 2002 (1,171 days out of a total of 1,372
days) and has closed under 30 for 91% of the days on which the level
was calculated since 2002 (1,245 days out of a total of 1,372 days).
VXD has closed between 10 and 25 for 82% of the days on which the level
was calculated since 2002 (1,130 days out of a total of 1,372 days).
    In the case of VXN, the historical average index value since
January 2, 2002 is 26.14. Since January 2002, VXN has fluctuated in a
range between 12.61 and 60.66. Furthermore, VXN closed under 25 for 61%
of the days on which the level was calculated since 2002 (822 days out
of a total of 1,355 days) and has closed under 30 for 73% of the days
on which the level was calculated since 2002 (987 days out of a total
of 1,355 days). VXN has closed between 15 and 30 for 66% of the days on
which the level was calculated since 2002 (895 days out of a total of
1,355 days).
    Because of the generally limited range in which VXD and VXN have
fluctuated, CBOE proposed to list series at $1 or greater strike price
intervals for each expiration on up to 5 VXD and VXN option series
above and 5 VXD and VXN option series below the current index level.
\7\ As the current index level of VXD and VXN moves from the exercise
price of those VXD and VXN option series that already have been opened
for trading on the Exchange, the Exchange may open for trading
additional series at $1.00 or greater strike price intervals for each
expiration on up to 5 VXD and VXN option series above and 5 VXD and VXN
option series below the current index level.
---------------------------------------------------------------------------

    \7\ The Commission previously approved the listing of VIX and
RVX options at $1 strike intervals. See Securities Exchange Act
Release No. 54192 (July 21, 2006), 71 FR 43251 (July 31, 2006)
(approving SR-CBOE-2006-27); see also Securities Exchange Act
Release No. 55425 (March 8, 2007), 72 FR 12238 (March 15, 2007)
(approving SR-CBOE-2006-73).
---------------------------------------------------------------------------

    Additionally, the Exchange proposed that it would not list series
with $1 intervals within $0.50 of an existing $2.50 strike price with
the same expiration month (e.g., if there is an existing 12.50 strike,
the Exchange would not list a 12 or 13 strike).

$1 Strike LEAPs for RVX, VIX, VXN and VXD

    Similarly, the Exchange proposed rules to permit $1 strike
intervals for RVX, VIX, VXD and VXN LEAPs. According to CBOE, typically
LEAPs strike prices moves in increments of $2.50 and $5.00 and such
incremental pricing is suited for long-term contracts on traditional
equity and stock index products. However, as discussed above, the
levels of volatility indexes fluctuate quite differently than equities
and stock indexes. As a ``mean-reverting'' product, volatility indexes
gravitate towards their historical average levels; thus, limiting the
range of movement.
    Consequently, the Exchange proposed to list series at $1 or greater
strike price intervals for each expiration on up to 5 RVX, VIX, VXD and
VXN LEAPs series above and 5 RVX, VIX, VXD and VXN LEAPs series below
the current index level. As the current index level of RVX, VIX, VXD
and VXN moves from the exercise price of those RVX, VIX, VXD and VXN
LEAPs series that already have been opened for trading on the Exchange,
the Exchange may open for trading additional series at $1.00 or greater
strike price intervals for each expiration on up to 5 RVX, VIX, VXD and
VXN LEAPs series above and 5 RVX, VIX, VXD and VXN LEAPs series below
the current index level.
    For purposes of adding strike prices at $1.00 or greater strike
price intervals, as well as at $2.50 or greater strike price intervals,
the ``current index level'' would be defined as the ``implied forward
level'' of RVX, VIX, VXN and VXD for each expiration. \8\
---------------------------------------------------------------------------

    \8\ See Notice, supra n. 3, for further discussion of this
methodology.
---------------------------------------------------------------------------

Capacity

    CBOE represented that it has analyzed its capacity and represents
that it believes the Exchange and the Options Price Reporting Authority
have the necessary systems capacity to handle the additional traffic
associated with the listing and trading of the $1 strikes for VXD and
VXN option and of the $1 strikes for RVX, VIX, VXD and VXN LEAPs.

III. Summary of Comment Received

    The Commission received one comment letter regarding the proposed
rule change, from Citadel. Citadel supported the adoption of the
proposal and, in general, the expansion of $1 strike price intervals,
stating that expansion of products available to exchanges and investors
was ``fundamentally pro-competitive'' and that, moreover, ``$1 strike
price intervals allow traders and investors to customize the risk
profiles of their trading positions more precisely, and thus reduce the
cost of trading.'' \9\ Citadel commented favorably about the
Commission's prior pilot program to allow $1 strike intervals,\10\ and
advocated that the Commission ``promote the expansion of $1 strike
programs even if doing so requires curtailing or slowing further
expansion of penny quoting.'' \11\ With regard to the

proposal, Citadel noted that ``permitting CBOE to list and trade
options that are the subject of the Proposal in $1 strike intervals
would benefit the public, including retail investors,'' for many of the
same reasons $1 strike options do, as well as for reasons specific to
volatility options, such a the ``mean-reverting'' characteristics of
volatility indexes.\12\ Similarly, Citadel supported the listing and
trading of LEAPs on certain volatility indexes, as proposed by CBOE,
arguing that the ``case for strike-intervals for LEAPs on volatility
indexes is even stronger than the case for narrow-interval LEAPs on
single stocks.''
---------------------------------------------------------------------------

    \9\ See Citadel Comment at 1.
    \10\ Id. at 2.
    \11\ Id. at 3.
    \12\ Id.
---------------------------------------------------------------------------

IV. Discussion

    After careful review, the Commission finds that CBOE's proposal to
(i) list and trade CBOE Dow Jones Industrial Average Volatility Index
(``VXD'') options and Nasdaq-100 Volatility Index (``VXN'') options in
$1 strike price intervals; and (ii) list and trade CBOE Russell 2000
Volatility Index (``RVX''), VXD, VXN and CBOE Volatility Index
(``VIX'') LEAPs in $1 strike price intervals is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange \13\ and, in particular,
the requirements of section 6 of the Act \14\ and the rules and
regulations thereunder. The Commission believes that CBOE's proposal
gives options investors the ability to make additional investment
choices in a manner consistent with the requirements of section 6(b)(5)
of the Act. \15\ The Commission further believes that trading options
and LEAPs in $1 strike price intervals on these volatility indexes
provides investors with an important trading and hedging mechanism.
---------------------------------------------------------------------------

    \13\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
    \14\ 15 U.S.C. 78f.
    \15\ 15 U.S.C. 78f(b)(5).
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    As explained by CBOE, volatility indexes such as the RVX, VIX, VXD
and VXN fluctuate in a narrow range, and thus, the Commission believes
that the implementation of $1 strike price intervals on options and
LEAPs based on these indexes, within the parameters detailed in CBOE's
proposal, is appropriate.
    The Commission also notes CBOE's representations that it possesses
the necessary systems capacity to support new series that would result
from the introduction of $1 strikes for VXD and VXN options and of the
$1 strikes for RVX, VIX, VXD and VXN LEAPs and that CBOE also has been
informed that OPRA has the capacity to support such offerings.

V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\16\ that the proposed rule change (SR-CBOE-2007-52), as amended,
be, and hereby is, approved.
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    \16\ 15 U.S.C. 78s(b)(2).
    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-23003 Filed 11-26-07; 8:45 am]

BILLING CODE 8011-01-P