[Federal Register Volume 79, Number 191 (Thursday, October 2, 2014)]
[Notices]
[Pages 59530-59534]
[FR Doc No: 2014-23448]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 73233; File No. SR-NASDAQ-2014-053]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Granting Approval of Proposed Rule Change Relating to the Listing and
Trading of Shares of the iShares Commodities Strategy ETF iShares of
U.S. ETF Trust

September 26, 2014.

I. Introduction

    On July 31, 2014, The NASDAQ Stock Market LLC (``Nasdaq'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade the shares (``Shares'') of the
iShares Commodities Strategy ETF (``Fund'') under Nasdaq Rule 5735. The
proposed rule change was published for comment in the Federal Register
on August 18, 2014.\3\ The Commission received no comments on the
proposed rule change. This order grants approval of the proposed rule
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 72813 (Aug. 12,
2014), 79 FR 48787 (``Notice'').
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II. Description of Proposed Rule Change

    The Exchange proposes to list and trade the Shares pursuant to
Nasdaq Rule 5735, which governs the listing and trading of Managed Fund
Shares on the Exchange. The Shares will be offered by the iShares U.S.
ETF Trust (``Trust''), which was established as a Delaware statutory
trust on June 21, 2011.\4\ The Fund is a series of the Trust. BlackRock
Fund Advisors will be the investment adviser (``Adviser'') to the
Fund.\5\ BlackRock Investments, LCC (``Distributor'') will be the
principal underwriter and distributor of the Fund's Shares. State
Street Bank and Trust Company will act as the administrator, accounting
agent, custodian, and transfer agent to the Fund.
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    \4\ According to the Exchange, the Trust is registered with the
Commission as an investment company and has filed a registration
statement on Form N-1A (``Registration Statement'') with the
Commission. See Registration Statement on Form N-1A for the Trust,
dated January 24, 2014 (File Nos. 333-179904 and 811-22649). The
Exchange states that the Commission has issued an order granting
certain exemptive relief to the Trust under the Investment Company
Act of 1940 (``1940 Act''). See Investment Company Act Release No.
29571 (January 24, 2011) (File No. 812-13601).
    \5\ The Exchange states that, while the Adviser is not a broker-
dealer, the Adviser is affiliated with the Distributor, which is a
broker-dealer. The Exchange represents that the Adviser has
implemented a fire wall with respect to its broker-dealer affiliate
regarding access to information concerning the composition and
changes to the Fund's portfolio. Nasdaq Rule 5735(g) further
requires that personnel who make decisions on the open-end fund's
portfolio composition must be subject to procedures designed to
prevent the use and dissemination of material non-public information
regarding the open-end fund's portfolio (including the portfolio of
the Subsidiary, as defined herein). In addition, the Exchange
represents that in the event (a) the Adviser becomes newly
affiliated with a broker-dealer or registers as a broker-dealer, or
(b) any new adviser or sub-adviser is a registered broker-dealer or
becomes affiliated with a broker-dealer, the Adviser will implement
a fire wall with respect to its relevant personnel or such broker-
dealer affiliate, as applicable, regarding access to information
concerning the composition and changes to the portfolio, and the
Adviser will be subject to procedures designed to prevent the use
and dissemination of material non-public information regarding the
portfolio. The Exchange also states that the Fund does not currently
intend to use a sub-adviser.
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    The Exchange has made the following representations and statements
in describing the Fund and its principal investments (including those
of the Subsidiary, as defined herein), other investments, and
investment restrictions.\6\
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    \6\ The Commission notes that additional information regarding
the Trust, the Fund, and the Shares, including investment
strategies, risks, creation and redemption procedures, calculation
of net asset value (``NAV''), fees, portfolio holdings disclosure
policies, distributions, and taxes, among other things, can be found
in the Notice and Registration Statement, as applicable. See supra
notes 3 and 4, respectively.
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Principal Investments of the Fund

    According to the Exchange, the investment objective of the Fund
will be to seek total return by providing investors with broad
commodity exposure. The Fund will be an actively managed exchange-
traded fund (``ETF'') that seeks to achieve its investment objective by
investing in a combination of exchange-traded commodity futures
contracts, exchange-traded options on

futures contracts, and exchange-cleared swaps (collectively,
``Commodity-Linked Investments'') \7\ and exchange-traded commodity-
related equities (``Commodity-Related Equities''),\8\ thereby obtaining
exposure to the commodities markets. The Fund will seek to gain
exposure to Commodity-Linked Investments through investments in a
wholly-owned subsidiary controlled by the Fund and organized under the
laws of the Cayman Islands (``Subsidiary''), and will invest directly
in Commodity-Related Equities. The Fund's investment in the Subsidiary
may not exceed 25% of the Fund's total assets.
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    \7\ ``Commodity-Linked Investments'' will be comprised of
exchange-traded futures contracts on the 22 commodities that
comprise the S&P GSCI Index and index futures linked to commodities.
However, the Fund is not obligated to invest in such futures
contracts and does not seek to track the performance of the S&P GSCI
Index. Commodity-Linked Investments will also be comprised of
exchange-cleared swaps on commodities and exchange-traded options on
futures that provide exposure to the investment returns of the
commodities markets, without investing directly in physical
commodities. According to the Exchange, with respect to the futures
contracts and options on futures contracts held indirectly through
the Subsidiary, not more than 10% of the weight of such futures
contracts and options on futures contracts, in the aggregate, shall
consist of such instruments whose principal trading market is not a
member of the Intermarket Surveillance Group (``ISG'') or is a
market with which the Exchange does not have a comprehensive
surveillance sharing agreement. Nasdaq states that this 10%
limitation will be calculated using the value of the contract
divided by the total absolute notional value of the Subsidiary's
futures contracts.
    \8\ ``Commodity-Related Equities'' will be comprised of
exchange-traded common stocks of companies that operate in
commodities, natural resources and energy businesses, and in
associated businesses, as well as companies that provide services or
have exposure to such businesses.
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    The remainder of the Fund's assets will be invested, either
directly by the Fund or through the Subsidiary, in: (1) Short-term,
investment grade fixed income securities that include U.S. government
and agency securities,\9\ treasury inflation-protected securities,
sovereign debt obligations of non-U.S. countries, and repurchase
agreements; (2) money market instruments; \10\ and (3) cash and other
cash equivalents. The Fund will use such instruments as investments and
to collateralize the Subsidiary's Commodity-Linked Investments exposure
on a day-to-day basis.
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    \9\ Such securities will include securities that are issued or
guaranteed by the U.S. Treasury, by various agencies of the U.S.
government, or by various instrumentalities, which have been
established or sponsored by the U.S. government. U.S. Treasury
obligations are backed by the ``full faith and credit'' of the U.S.
government. Securities issued or guaranteed by federal agencies and
U.S. government-sponsored instrumentalities may or may not be backed
by the full faith and credit of the U.S. government.
    \10\ For the Fund's purposes, money market instruments will
include: Short-term, high-quality securities issued or guaranteed by
non-U.S. governments, agencies and instrumentalities; non-
convertible corporate debt securities with remaining maturities of
not more than 397 days that satisfy ratings requirements of Rule 2a-
7 under the 1940 Act; money market mutual funds; and deposits and
other obligations of U.S. and non-U.S. banks and financial
institutions. As a related matter, according to the Exchange, the
Fund may invest in shares of money market mutual funds to the extent
permitted by the 1940 Act.
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    The Exchange notes that the Fund will not invest directly in
physical commodities. The Fund may invest directly in exchange-traded
notes (``ETNs''),\11\ commodity-linked notes,\12\ ETFs \13\ and other
investment companies, including exchange-traded closed-end funds that
provide exposure to commodities, equity securities, and fixed income
securities to the extent permitted under the 1940 Act.\14\
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    \11\ According to the Exchange, ETNs are exchange-traded notes
as would be listed under Nasdaq Rule 5710.
    \12\ Such commodity-linked notes will not be exchange-traded.
The Fund's investments in such commodity-linked notes will generally
be limited to circumstances in which the Fund reaches position
limits, accountability levels, or price limits on one or more
exchange-traded futures contracts or index futures in which the Fund
invests.
    \13\ An ETF is an investment company registered under the 1940
Act that holds a portfolio of securities. Many ETFs are designed to
track the performance of a securities index, including industry,
sector, country, and region indexes. ETFs included in the Fund will
be listed and traded in the U.S. on registered exchanges. The Fund
may invest in the securities of ETFs in excess of the limits imposed
under the 1940 Act pursuant to exemptive orders obtained by other
ETFs and their sponsors from the Commission. The ETFs in which the
Fund may invest include Index Fund Shares (as described in Nasdaq
Rule 5705), Portfolio Depositary Receipts (as described in Nasdaq
Rule 5705), and Managed Fund Shares (as described in Nasdaq Rule
5735).
    \14\ Not more than 10% of the equity securities (including
shares of ETFs and closed-end funds) and ETNs in which the Fund may
invest will be invested in securities that trade in markets that are
not members of the ISG, which includes all U.S. national securities
exchanges, or are not parties to a comprehensive surveillance
sharing agreement with the Exchange.
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    According to the Exchange, the Fund's investment in the Subsidiary
will be designed to help the Fund achieve exposure to commodity returns
in a manner consistent with the federal tax requirements applicable to
the Fund and other regulated investment companies.

Investments of the Subsidiary

    The Subsidiary will seek to make investments generally in
Commodity-Linked Investments. The Adviser will use its discretion to
determine the percentage of the Fund's assets allocated to the
Commodity-Linked Investments held by the Subsidiary and the Commodity-
Related Equities portion of the Fund's portfolio. Generally, the
Adviser will take various factors into account on a periodic basis in
allocating the assets of the Fund, including, but not limited to, the
results of proprietary models developed by the Adviser, the performance
of index benchmarks for the Commodity-Linked Investments and Commodity-
Related Equities relative to each other, relative price differentials
for a range of commodity futures for current delivery as compared to
similar commodity futures for future delivery, and other market
conditions. The weightings of the Fund's portfolio will be reviewed and
updated at least annually.
    The Subsidiary will be advised by the Adviser \15\ and will have
the same investment objective as the Fund. However, unlike the Fund,
the Subsidiary may invest without limitation in Commodity-Linked
Investments. The Subsidiary's investments will provide the Fund with
exposure to domestic and international markets. The Subsidiary will
initially consider investing in futures contracts based on the table
outlined in the Notice.\16\ The Exchange notes that the list of
commodities futures and commodities markets considered for investment
can and will change over time.
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    \15\ The Exchange states that the Subsidiary will not be
registered under the 1940 Act and will not be directly subject to
its investor protections, except as noted in the Registration
Statement. However, the Subsidiary will be wholly-owned and
controlled by the Fund and will be advised by the Adviser.
Therefore, the Fund's ownership and control of the Subsidiary will
prevent the Subsidiary from taking action contrary to the interests
of the Fund or its shareholders. The Trust's board will have
oversight responsibility for the investment activities of the Fund,
including its expected investment in the Subsidiary, and the Fund's
role as the sole shareholder of the Subsidiary. The Adviser will
receive no additional compensation for managing the assets of the
Subsidiary. The Subsidiary will also enter into separate contracts
for the provision of custody, transfer agency, and accounting agent
services with the same or with affiliates of the same service
providers that provide those services to the Fund.
    \16\ See Notice, supra note 3, 79 FR at 48789-48790. In the
Notice, the Exchange states that as U.S. and London exchanges list
additional contracts, as currently listed contracts on those
exchanges gain sufficient liquidity, or as other exchanges list
sufficiently liquid contracts, the Adviser will include those
contracts in the list of possible investments of the Subsidiary.
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    The Fund and the Subsidiary are subject to regulation by the
Commodity Futures Trading Commission and National Futures Association
(``NFA'') and additional disclosure, reporting, and recordkeeping rules
imposed upon commodity pools.\17\
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    \17\ As a result of the instruments that will be indirectly held
by the Fund, the Exchange represents that the Adviser has registered
as a commodity pool operator and is also a member of the NFA.

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Investment Restrictions

    The Fund may not invest more than 25% of the value of its total
assets in securities of issuers in any one industry or group of
industries other than certain industries described in the Registration
Statement. This restriction will not apply to obligations issued or
guaranteed by the U.S. government, its agencies or instrumentalities,
or securities of other investment companies.
    The Subsidiary's shares will be offered only to the Fund, and the
Fund will not sell shares of the Subsidiary to other investors. The
Fund will not purchase securities of open-end or closed-end investment
companies except in compliance with the 1940 Act.
    The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment).\18\
The Fund will monitor its portfolio liquidity on an ongoing basis to
determine whether, in light of current circumstances, an adequate level
of liquidity is being maintained, and will consider taking appropriate
steps in order to maintain adequate liquidity if, through a change in
values, net assets, or other circumstances, more than 15% of the Fund's
net assets are held in illiquid assets.\19\
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    \18\ In reaching liquidity decisions, the Adviser may consider
the following factors: The frequency of trades and quotes for the
security; the number of dealers wishing to purchase or sell the
security and the number of other potential purchasers; dealer
undertakings to make a market in the security; and the nature of the
security and the nature of the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers,
and the mechanics of transfer).
    \19\ Illiquid assets include securities subject to contractual
or other restrictions on resale and other instruments that lack
readily available markets as determined in accordance with
Commission staff guidance.
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    The Fund intends to qualify for and to elect to be treated as a
separate regulated investment company under SubChapter M of the
Internal Revenue Code.
    Under the 1940 Act, the Fund's investment in investment companies
will be limited to, subject to certain exceptions: (i) 3% of the total
outstanding voting stock of any one investment company; (ii) 5% of the
Fund's total assets with respect to any one investment company; and
(iii) 10% of the Fund's total assets with respect to investment
companies in the aggregate.
    The Fund's and the Subsidiary's investments will be consistent with
the Fund's investment objective, and, although certain investments will
have a leveraging effect on the Fund, the Fund will not seek leveraged
returns (e.g., 2X or -3X).

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's
proposal to list and trade the Shares is consistent with the Act and
the rules and regulations thereunder applicable to a national
securities exchange.\20\ In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\21\
which requires, among other things, that the Exchange's rules be
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 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. The Commission notes that
the Fund and the Shares must comply with the requirements of Nasdaq
Rule 5735 to be listed and traded on the Exchange.
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    \20\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \21\ 15 U.S.C. 78f(b)(5).
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    The Commission finds that the proposal to list and trade the Shares
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the
Act,\22\ which sets forth Congress' finding that it is in the public
interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for, and transactions in, securities. Quotation and last-
sale information for the Shares will be available via Nasdaq
proprietary quote and trade services, as well as in accordance with the
Unlisted Trading Privileges and the Consolidated Tape Association plans
for the Shares. In addition, an Indicative Optimized Portfolio Value,
defined in Nasdaq Rule 5735(c)(3) as the ``Intraday Indicative Value,''
\23\ will be available on the NASDAQ OMX Information LLC proprietary
index data service, and will be updated and widely disseminated by one
or more major market data vendors and broadly displayed at least every
15 seconds during the Regular Market Session.\24\ On each business day,
before commencement of trading in Shares in the Regular Market Session
\25\ on the Exchange, the Fund will disclose on its Web site the
Disclosed Portfolio, as defined in Nasdaq Rule 5735(c)(2), that will
form the basis for the Fund's calculation of NAV at the end of the
business day.\26\ The Adviser, through the National Securities Clearing
Corporation, will make available on each business day, prior to the
opening of business of the New York Stock Exchange, the list of the
names and quantities of the instruments, as well as the estimated
amount of cash (if any), constituting the creation basket for the Fund
for that day. The NAV of the Fund will be determined as of the close of
trading (normally 4:00 p.m., Eastern Time) on each day the New York
Stock Exchange is open for business.\27\

Information regarding market price and trading volume of the Shares
will be continually available on a real-time basis throughout the day
on brokers' computer screens and other electronic services. Information
regarding the previous day's closing price and trading volume
information for the Shares will be published daily in the financial
section of newspapers. Quotation and last sale information for any
underlying exchange-traded equity will be available via the CTA high-
speed line, and will be available from the national securities exchange
on which they are listed. Quotation and last-sale information for any
underlying exchange-traded options or exchange-traded futures contracts
will be available via the quote and trade service of their respective
primary exchanges. Information on the S&P GSCI Index will be available
on the S&P Dow Jones Indices Web site. The Fund's Web site, which will
be publicly available prior to the public offering of Shares, will
include a form of the prospectus for the Fund and additional data
relating to NAV and other applicable quantitative information. The
Exchange further notes that intraday, executable price quotations on
the exchange-traded assets held by the Fund and the Subsidiary,
including the Commodity-Related Equities, futures contracts, options on
futures contracts, index futures, ETNs, ETFs, and other investment
companies, including closed-end funds, will be available on the
exchange on which they are traded. Intraday, executable price
quotations on swaps, money market instruments, commodity-linked notes,
and fixed-income instruments will be available from major broker-dealer
firms. Intraday price information will also be available through
subscription services, such as Bloomberg and Reuters. Additionally, the
Trade Reporting and Compliance Engine (``TRACE'') of the Financial
Industry Regulatory Authority (``FINRA'') will be a source of price
information for certain fixed income securities held by the Fund.
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    \22\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \23\ According to the Exchange, the Intraday Indicative Value
will reflect an estimated intraday value of the Fund's portfolio
(including the Subsidiary's portfolio) and will be based upon the
current value for the components of a Disclosed Portfolio. The
Exchange states that the Intraday Indicative Value will be based on
quotes and closing prices from the securities' local market and may
not reflect events that occur subsequent to the local market's
close, that premiums and discounts between the Intraday Indicative
Value and the market price may occur, and that the Intraday
Indicative Value should not be viewed as a ``real time'' update of
the NAV per Share of the Fund, which is calculated only once a day.
    \24\ Currently, the NASDAQ OMX Global Index Data Service
(``GIDS'') is the NASDAQ OMX global index data feed service. The
Exchange represents that GIDS offers real-time updates, daily
summary messages, and access to widely followed indexes and Intraday
Indicative Values for ETFs, and that GIDS provides investment
professionals with the daily information needed to track or trade
NASDAQ OMX indexes, listed ETFs, or third-party partner indexes and
ETFs.
    \25\ See Nasdaq Rule 4120(b)(4) (describing the three trading
sessions on the Exchange: (1) Pre-Market Session from 4:00 a.m. to
9:30 a.m., Eastern Time; (2) Regular Market Session from 9:30 a.m.
to 4:00 p.m. or 4:15 p.m., Eastern Time; and (3) Post-Market Session
from 4:00 p.m. or 4:15 p.m. to 8:00 p.m., Eastern Time).
    \26\ On a daily basis, the Fund will disclose the following
information regarding each portfolio holding, as applicable to the
type of holding: Ticker symbol, CUSIP number or other identifier, if
any; a description of the holding (including the type of holding);
the identity of the security, commodity, index, or other asset or
instrument underlying the holding, if any; for options, the option
strike price; quantity held (as measured by, for example, par value,
notional value or number of shares, contracts or units); maturity
date, if any; coupon rate, if any; effective date, if any; market
value of the holding; and the percentage weighting of the holding in
the Fund's portfolio. The Web site information will be publicly
available at no charge.
    \27\ NAV per Share will be calculated for the Fund by taking the
market price of the Fund's total assets, less all liabilities,
dividing such amount by the total number of Shares outstanding, and
rounding to the nearest cent. The value of the securities, other
assets, and liabilities held by the Fund will be determined pursuant
to valuation policies and procedures approved by the Trust's Board.
The Fund's assets and liabilities will be valued primarily on the
basis of market quotations. Equity securities and debt securities,
including ETNs, traded on a recognized securities exchange will be
valued at market value, which is determined using the last reported
official closing price or last trading price on the exchange or
other market on which the security is primarily traded at the time
of valuation. Fixed income securities, including money market
securities and U.S. government securities, for which market
quotations are readily available are generally valued using such
securities' most recent bid prices provided directly from one or
more broker-dealers, market makers, or independent third-party
pricing services, each of whom may use matrix pricing and valuation
models, as well as recent market transactions. Short-term
investments that mature in less than 60 days when purchased will be
valued at amortized cost. Exchange-traded futures contracts, options
on futures contracts, and index futures will be valued at their
settled price as of the close of such exchanges. Exchange-cleared
swap agreements and commodity-linked notes are generally valued
daily based on quotations from market makers or by a pricing service
in accordance with valuation procedures adopted by the Trust's
board. Shares of underlying ETFs and other investment companies,
including closed-end funds, will be valued at their most recent
closing price on the exchange on which they are traded. Shares of
underlying money market funds will be valued at their NAV.
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    The Commission further believes that the proposal to list and trade
the Shares is reasonably designed to promote fair disclosure of
information that may be necessary to price the Shares appropriately and
to prevent trading when a reasonable degree of transparency cannot be
assured. The Exchange will obtain a representation from the issuer of
the Shares that the NAV per Share will be calculated daily and that the
NAV and the Disclosed Portfolio will be made available to all market
participants at the same time. Trading in Shares of the Fund will be
halted under the conditions specified in Nasdaq Rules 4120 and 4121,
including the trading pause provisions under Nasdaq Rules 4120(a)(11)
and (12). Trading in the Shares may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable,\28\ and trading in the Shares will
be subject to Nasdaq Rule 5735(d)(2)(D), which sets forth additional
circumstances under which trading in Shares of the Fund may be halted.
The Exchange states that it has a general policy prohibiting the
distribution of material, non-public information by its employees.
Further, the Commission notes that the Reporting Authority, as defined
in Nasdaq Rule 5735(c)(4), that provides the Disclosed Portfolio must
implement and maintain, or be subject to, procedures designed to
prevent the use and dissemination of material, non-public information
regarding the actual components of the portfolio.\29\ In addition, the
Exchange states that, while the Adviser is not registered as a broker-
dealer, the Adviser is affiliated with a broker-dealer and has
implemented a fire wall with respect to that broker-dealer regarding
access to information concerning the composition of, or changes to, the
portfolio, and that personnel who make decisions on the Fund's
portfolio composition will be subject to procedures designed to prevent
the use and dissemination of material non-public information regarding
the Fund's portfolio.\30\
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    \28\ These reasons may include: (1) The extent to which trading
is not occurring in the securities and other assets constituting the
Disclosed Portfolio of the Fund and the Subsidiary; or (2) whether
other unusual conditions or circumstances detrimental to the
maintenance of a fair and orderly market are present. With respect
to trading halts, the Exchange may consider all relevant factors in
exercising its discretion to halt or suspend trading in the Shares
of the Fund.
    \29\ See Nasdaq Rule 5735(d)(2)(B)(ii).
    \30\ See supra note 5. The Exchange states that an investment
adviser to an open-end fund is required to be registered under the
Investment Advisers Act of 1940 (``Advisers Act''). As a result, the
Adviser and its related personnel are subject to the provisions of
Rule 204A-1 under the Advisers Act relating to codes of ethics. This
Rule requires investment advisers to adopt a code of ethics that
reflects the fiduciary nature of the relationship to clients, as
well as compliance with other applicable securities laws.
Accordingly, procedures designed to prevent the communication and
misuse of non- public information by an investment adviser must be
consistent with Rule 204A-1 under the Advisers Act. In addition,
Rule 206(4)-7 under the Advisers Act makes it unlawful for an
investment adviser to provide investment advice to clients unless
such investment adviser has (i) adopted and implemented written
policies and procedures reasonably designed to prevent violation, by
the investment adviser and its supervised persons, of the Advisers
Act and the Commission rules adopted thereunder; (ii) implemented,
at a minimum, an annual review regarding the adequacy of the
policies and procedures established pursuant to subparagraph (i)
above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above.
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    The Exchange represents that trading in the Shares will be subject
to the existing trading surveillances, administered by both Nasdaq and
FINRA on behalf of the Exchange, which are designed to detect
violations of Exchange rules and applicable federal securities
laws.\31\ Prior to the commencement of trading, the Exchange states
that it will inform its members in an Information Circular of the
special characteristics and risks associated with trading the Shares.
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    \31\ The Exchange states that FINRA surveils trading on the
Exchange pursuant to a regulatory services agreement and that the
Exchange is responsible for FINRA's performance under this
regulatory services agreement.
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    The Exchange represents that the Shares are deemed to be equity
securities, thus rendering trading in the Shares subject to the
Exchange's existing rules governing the trading of equity securities.
In support of this proposal, the Exchange has made the following
representations:
    (1) The Shares will be subject to Rule 5735, which sets forth the
initial and continued listing criteria applicable to Managed Fund
Shares.
    (2) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (3) Trading in the Shares will be subject to the existing trading
surveillances, administered by both Nasdaq and FINRA, on behalf of the
Exchange, which are designed to detect violations of Exchange rules and
applicable federal securities laws, and that these procedures are
adequate to properly monitor Exchange trading of

the Shares in all trading sessions and to deter and detect violations
of Exchange rules and applicable federal securities laws. FINRA, on
behalf of the Exchange, will communicate as needed regarding trading in
the Shares and the exchange-traded securities and instruments held by
the Fund and the Subsidiary, which include exchange-traded Commodity-
Related Equities, exchange-traded or exchange-cleared Commodity-Linked
Investments (with the exception of exchange-cleared swaps), ETNs, ETFs
and other exchange-traded investment companies, with other markets and
other entities that are members of ISG, and FINRA may obtain trading
information regarding trading in the Shares and such exchange-traded
securities and instruments held by the Fund and the Subsidiary from
such markets and other entities. In addition, the Exchange may obtain
information regarding trading in the Shares and such exchange-traded
securities and instruments held by the Fund and the Subsidiary from
markets and other entities that are members of ISG, which includes
securities and futures exchanges, or with which the Exchange has in
place a comprehensive surveillance sharing agreement. Moreover, FINRA,
on behalf of the Exchange, will be able to access, as needed, trade
information for certain fixed income securities held by the Fund
reported to FINRA's Trade Reporting and Compliance Engine.
    (4) Prior to the commencement of trading, the Exchange will inform
its members in an Information Circular of the special characteristics
and risks associated with trading the Shares. Specifically, the
Information Circular will discuss the following: (a) The procedures for
purchases and redemptions of Shares in creation units (and that Shares
are not individually redeemable); (b) Nasdaq Rule 2111A, which imposes
suitability obligations on Nasdaq members with respect to recommending
transactions in the Shares to customers; (c) how and by whom
information regarding the Intraday Indicative Value and Disclosed
Portfolio is disseminated; (d) the risks involved in trading the Shares
during the Pre-Market and Post-Market Sessions when an updated Intraday
Indicative Value will not be calculated or publicly disseminated; (e)
the requirement that members deliver a prospectus to investors
purchasing newly issued Shares prior to or concurrently with the
confirmation of a transaction; and (f) trading information.
    (5) For initial and continued listing, the Fund and the Subsidiary
must be in compliance with Rule 10A-3 under the Act.\32\
---------------------------------------------------------------------------

    \32\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (6) The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment). The
Fund will monitor its portfolio liquidity on an ongoing basis to
determine whether, in light of current circumstances, an adequate level
of liquidity is being maintained, and will consider taking appropriate
steps in order to maintain adequate liquidity if, through a change in
values, net assets, or other circumstances, more than 15% of the Fund's
net assets are held in illiquid assets.
    (7) The Fund will invest directly in Commodity-Related Equities and
will seek to gain exposure to Commodity-Linked Investments through
investments in the Subsidiary. The Fund's investment in the Subsidiary
will not exceed 25% of the Fund's total assets.
    (8) The Fund will not invest in directly in physical commodities
and may invest directly in ETNs, commodity-linked notes, ETFs, and
other investment companies.
    (9) The Subsidiary will seek to make investments in Commodity-
Linked Investments. The Subsidiary will initially consider investing in
futures contracts as outlined in the table in the Notice, though the
table is subject to change.
    (10) The Fund and the Subsidiary's investments will be consistent
with the Fund's investment objectives and although certain investments
will have a leveraging effect on the Fund, the Fund will not seek
leveraged returns.
    (11) With respect to the exchange-traded futures contracts and
options on futures contracts held indirectly through the Subsidiary,
not more than 10% of the weight \33\ of such futures contracts and
options on futures contracts in the aggregate shall consist of
instruments whose principal trading market is not a member of ISG or is
a market with which the Exchange does not have a comprehensive
surveillance sharing agreement. In addition, not more than 10% of the
equity securities (including shares of ETFs and closed-end funds) and
ETNs in which the Fund may invest will be invested in securities that
trade in markets that are not members of ISG or are parties to a
comprehensive surveillance sharing agreement with the Exchange.
---------------------------------------------------------------------------

    \33\ To be calculated as the value of the contract divided by
the total absolute notional value of the Subsidiary's futures
contracts.
---------------------------------------------------------------------------

    (12) A minimum of 100,000 Shares will be outstanding at the
commencement of trading on the Exchange.
    This approval order is based on all of the Exchange's
representations, including those set forth above and in the Notice, and
the Exchange's description of the Fund.
    For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act \34\ and the
rules and regulations thereunder applicable to a national securities
exchange.
---------------------------------------------------------------------------

    \34\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\35\ that the proposed rule change (SR-NASDAQ-2014-053), be, and it
hereby is, approved.
---------------------------------------------------------------------------

    \35\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
---------------------------------------------------------------------------

    \36\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-23448 Filed 10-1-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: July 24, 2009 (Volume 74, Number 141)]
[Notices]
[Page 36817-36819]
[DOCID:fr24jy09-163]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Notice of Passenger Facility Charge (PFC) Approvals and
Disapprovals

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Monthly Notice of PFC Approvals and Disapprovals. In May 2009,
there were no applications approved. This notice also includes
information on four applications, approved in April 2009, inadvertently
left off the April 2009 notice. Additionally, nine approved amendments
to previously approved applications are listed.

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SUMMARY: The FAA publishes a monthly notice, as appropriate, of PFC
approvals and disapprovals under the provisions of the Aviation Safety
and Capacity Expansion Act of 1990 (Title IX of the Omnibus Budget
Reconciliation Act of 1990) (Pub. L. No. 101-508) and Part 158 of the
Federal Aviation Regulations (14 CFR Part 158). This notice is
published pursuant to paragraph d of Sec.  158.29.

PFC Applications Approved

    Public Agency: City of Fayetteville, North Carolina.
    Application Number: 09-04-C-00-FAY.
    Application Type: Impose and use a PFC.
    PFC Level: $4.00.
    Total PFC Revenue Approved in This Decision: $3,796,330.
    Earliest Charge Effective Date: July 1, 2009.
    Estimated Charge Expiration Date: June 1, 2024.
    Class of Air Carriers Not Required to Collect PFC'S: None.
    Brief Description of Projects Approved for Collection and Use:

Terminal phase II.
Employee parking (non-revenue).
West general aviation ramp rehabilitation.
Land acquisition.
Handicap access to narrow body jets.
Fire training facility rehabilitation.
Runway 4/22 rehabilitation--design.
Aircraft rescue and firefighting rehabilitation--design.
Snow removal equipment building--design/construction.
Electrical vault upgrades--design, generator installation.
Stormwater improvement.
Vault construction.
Runway 4/22 construction.
Security fence and gates.
Replace aircraft rescue and firefighting truck.
Air carrier asphalt (rehabilitate apron)--design.
Taxiway A design, shoulder, overlay, lights.
Extend taxiway A design.
Construct taxiway A shoulders, overlay, lights.

    Brief Description of Project Partially Approved for Collection and
Use: Aircraft rescue and firefighting rehabilitation.
    Determination: The FAA determined that only two of the three bays
were PFC eligible.
    Brief Description of Projects Approved for Collection:

Replace B4 jet bridge.
Construct air carrier asphalt (rehabilitate apron).
Construct taxiway A extension.
Air carrier concrete (apron) repair--design.
Terminal phase IV.
Airline concrete (apron) repair--construction.
Runway 4/22 paved shoulders--design.
Land acquisition--runway 4 runway protection zone.
Construct runway 4/22 paved shoulders.
General aviation automobile parking (non-revenue).

Brief Description of Disapproved Projects:

Terminal phase III floor upgrade.
Terminal phase II public seating.
Public seating.

    Determination: The FAA determined that none of these projects were
PFC eligible as stand alone projects.
    Decision Date: April 8, 2009.

FOR FURTHER INFORMATION CONTACT: John Marshall, Atlanta Airports
District Office,<PHONE_NUMBER>.
    Public Agency: Metropolitan Nashville Airport Authority, Nashville,
Tennessee.
    Application Number: 09-15-C-00-BNA.

    Application Type: Impose and use a PFC.
    PFC Level: $4.50.
    Total PFC Revenue Approved in this Decision: $11,287,500.
    Earliest Charge Effective Date: January 1, 2016.
    Estimated Charge Expiration Date: January 1, 2017.
    Class of Air Carriers not Required to Collect PFC'S: Air taxi
operators that enplane fewer than 25,000 passengers per year and/or
provide unscheduled air service at Nashville International Airport.
    Determination: Approved. Based on information contained in the
public agency's application, the FM has determined that the proposed
class accounts for less than 1 percent of the total annual enplanements
at Nashville International Airport.
    Brief Description of Project Approved for Collection and Use at a
$4.50 PFC Level: Reconstruct runway 2L/20R (design and construction).
    Brief Description of Project Approved for Collection and Use at a
$3.00 PFC Level: Terminal roof replacement.
    Brief Description of Project Partially Approved for Collection and
Use at a $3.00 PFC Level: Sprinkler system in utility tunnels.
    Determination: The public agency requested that PFCs pay 100
percent of the project costs. However, the FAA determined that the
utilities serve both eligible and ineligible areas of the terminal.
Based on information provided by the public agency, the terminal is 85
percent eligible, thus, this PFC approval was limited to 85 percent of
the total project cost.
    Decision Date: April 28, 2009.
    For Further Information Contact: Cynthia Wills, Memphis Airports
District Office,<PHONE_NUMBER>.
    Public Agency: City of New Orleans and New Orleans Aviation Board,
New Orleans, Louisiana.
    Application Number: 09-09-C-00-MSY.
    Application Type: Impose and use a PFC.
    PFC Level: $4.50.
    Total PFC Revenue Approved in this Decision: $2,775,439.
    Earliest Charge Effective Date: January 1, 2020.
    Estimated Charge Expiration Date: April 1, 2020.
    Class of Air Carriers Not Required to Collect PFC's: Part 135 on-
demand air taxi/commercial operators filing FAA Form 1800-31.
    Determination: Approved. Based on information contained in the
public agency's application, the FAA has determined that the proposed
class accounts for less than 1 percent of the total annual enplanements
at Louis Armstrong New Orleans International Airport.
    Brief Description of Project Approved for Collection and Use at a
$4.50 PFC Level: Taxiway C extension--east.
    Brief Description of Project Approved for Collection and Use at a
$3.00 PFC Level: Hazardous wildlife study.
    Brief Description of Disapproved Project:
    Hazard mitigation study.
    Determination: This project does not meet the requirements of Sec.
158.15(b) and, therefore, is not PFC-eligible.
    Brief Description of Withdrawn Project:
    Auxiliary power facility.
    Date of Withdrawal: February 11, 2009.
    Decision Date: April 29, 2009.
    For Further Information Contact: Andy Velayos, Louisiana/New Mexico
Airports Development Office,<PHONE_NUMBER>.
    Public Agency: City of Phoenix, Arizona.
    Application Number: 09-09-C-00-PHX.
    Application Type: Impose and use a PFC.
    PFC Level: $4.50.
    Total PFC Revenue Approved in this Decision: $1,858,636,000.
    Earliest Charge Effective Date: August 1, 2010.
    Estimated Charge Expiration Date: November 1, 2028.
    Classes of Air Carriers Not Required to Collect PFC'S:
    (1) Nonscheduled/on-demand air carriers filing FAA Form 1800-31;
(2) commuters of small certified air carriers filing U.S. Department of
Transportation (DOT) Form T-100 with less than 7,500 enplanements each
annually at Phoenix Sky Harbor International Airport (PHX); (3) large
certified route air carriers filing DOT Form T-100 with less than 7,500
enplanements each annually at PHX; and (4) foreign air carriers filing
DOT Form T-100(f) with less than 7,500 enplanements each annually at
PHX.
    Determination: Approved. Based on information contained in the
public agency's application, the FAA has determined that each proposed
class accounts for less than 1 percent of the total annual enplanements
at PHX.
    Brief Description of Projects Approved for Collection and Use at a
$4.50 PFC Level:
    Automated train.
    Community noise reduction program.
    Terminal 4 apron rehabilitation.
    Airfield lighting and runway sign relocation.
    Brief Description of Projects Approved for Collection and Use at a
$3.00 PFC Level:
    Terminal capacity improvements.
    South infield paving.
    Decision Date: April 30, 2009.
    For Further Information Contact: Darlene Williams, Los Angeles
Airports District Office,<PHONE_NUMBER>.

                                           Amendment to PFC Approvals
----------------------------------------------------------------------------------------------------------------
                                                                                Original         Amended
                                     Amendment       Original         Amended        estimated       estimated
   Amendment No., city, state      approved date   approved net    approved net     charge exp.     charge exp.
                                                    PFC revenue     PFC revenue        date            date
----------------------------------------------------------------------------------------------------------------
06-05-C-02-BWI, Baltimore, MD...        04/28/09    $267,602,000    $256,062,000        01/01/16        01/01/16
07-06-U-01-BWI, Baltimore, MD...        04/28/09              NA              NA        01/01/16        01/01/16
03-01-C-02-RDU, Raleigh-Durham,         04/30/09       9,778,473       7,430,029        10/01/04        10/01/04
 NC.............................
03-03-C-01-UNV, State College,          04/30/09       1,510,612         804,936        07/01/06        07/01/06
 PA.............................
01-02-C-04-HRL, Harlingen, TX...        05/05/09       5,436,858       5,470,023        12/01/07        08/01/07
07-03-C-01-HRL, Harlingen, TX...        05/05/09       7,885,824       3,590,824        03/01/11        07/01/09
04-06-C-01-EAT, Wenatchee, WA...        05/06/09         356,000         356,000        11/01/06        11/01/06
95-03-C-03-SEA, Seattle, WA.....        05/14/09     288,930,000     292,882,278        03/01/03        03/01/03
05-05-C-01-LAN..................        05/15/09       4,137,468       1,414,664        02/01/22        01/01/19
----------------------------------------------------------------------------------------------------------------

    Issued in Washington, DC, on July 16, 2009.
Joe Hebert,
Manager, Financial Analysis and Passenger Facility Charge Branch.
[FR Doc. E9-17582 Filed 7-23-09; 8:45 am]

BILLING CODE 4910-13-M


[Federal Register Volume 81, Number 65 (Tuesday, April 5, 2016)]
[Notices]
[Page 19597]
[FR Doc No: 2016-07727]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL16-12-000]

Midcontinent Independent System Operator, Inc.; Notice of
Institution of Section 206 Proceeding and Refund Effective Date

    On March 29, 2016, the Commission issued an order in Docket No.
EL16-12-000, pursuant to section 206 of the Federal Power Act (FPA), 16
U.S.C. 824e (2012), instituting an investigation into the justness and
reasonableness of Midcontinent Independent System Operator, Inc.'s Open
Access Transmission, Energy and Operating Reserve Markets Tariff.
Midcontinent Independent System Operator, Inc., 154 FERC ] 61,248
(2016).
    The refund effective date in Docket No. EL16-12-000, established
pursuant to section 206(b) of the FPA, will be the date of publication
of this notice in the Federal Register.

    Dated: March 30, 2016.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2016-07727 Filed 4-4-16; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: January 16, 2007 (Volume 72, Number 9)]
[
Notices]
[Page 1714-1715]
[DOCID:fr16ja07-40]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. ER07-264-000 ER07-264-001]

MMC Mid-Sun, LLC; Notice of Issuance of Order

January 8, 2007.
    MMC Mid-Sun, LLC (Mid-Sun) filed an application for market-based
rate authority, with an accompanying rate schedule. The proposed
market-based rate schedule provides for the sale of energy, capacity
and ancillary at market-based rates. Mid-Sun also requested waivers of
various Commission regulations. In particular, Mid-Sun requested that
the Commission grant blanket approval under 18 CFR part 34 of all
future issuances of securities and assumptions of liability by Mid-Sun.
    On December 28, 2006, pursuant to delegated authority, the
Director, Division of Tariffs and Market Development--West, granted the
requests for blanket approval under Part 34. The Director's order also
stated that the Commission would publish a separate notice in the
Federal Register establishing a period of time for the filing of
protests. Accordingly, any person desiring to be heard or to protest
the blanket approvals of issuances of securities or assumptions of
liability by Mid-Sun should file a motion to intervene or protest with
the Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, in accordance with Rules 211 and 214 of the
Commission's Rules of Practice and Procedure. 18 CFR 385.211, 385.214
(2004).
    Notice is hereby given that the deadline for filing motions to
intervene or protest is January 29, 2007.
    Absent a request to be heard in opposition by the deadline above,
Mid-Sun is authorized to issue securities and assume obligations or
liabilities as a guarantor, endorser, surety, or otherwise in respect
of any security of another person; provided that such issuance or
assumption is for some lawful object within the corporate purposes of
Mid-Sun, compatible with the public interest, and is reasonably
necessary or appropriate for such purposes.
    The Commission reserves the right to require a further showing that
neither public nor private interests will be adversely affected by
continued approvals of Mid-Sun's issuance of securities or assumptions
of liability.
    Copies of the full text of the Director's Order are available from
the Commission's Public Reference Room, 888 First Street, NE.,
Washington, DC

20426. The Order may also be viewed on the Commission's Web site at
http://www.ferc.gov, using the eLibrary link. Enter the docket number

excluding the last three digits in the docket number filed to access
the document. Comments, protests, and interventions may be filed
electronically via the Internet in lieu of paper. See, 18 CFR
385.2001(a)(1)(iii) and the instructions on the Commission's Web site
under the ``e-Filing'' link. The Commission strongly encourages
electronic filings.

Magalie R. Salas,
Secretary.
[FR Doc. E7-434 Filed 1-12-07; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 86, Number 103 (Tuesday, June 1, 2021)]
[Proposed Rules]
[Pages 29222-29227]
[FR Doc No: 2021-11441]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R03-OAR-2021-0017; FRL-10023-69-Region 3]

Air Plan Approval; Maryland; Baltimore Area Base Year Inventory
for the 2015 Ozone National Ambient Air Quality Standards

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

SUMMARY: The Environmental Protection Agency (EPA) is proposing to
approve a state implementation plan (SIP) revision submitted by the
State of Maryland. This revision consists of the base year inventory
for the Baltimore, Maryland marginal nonattainment area (Baltimore
Area) for the 2015 ozone national ambient air quality standards
(NAAQS). This action is being taken under the Clean Air Act (CAA).

DATES: Written comments must be received on or before July 1, 2021.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R03-
OAR-2021-0017 at https://www.regulations.gov, or via email to
<EMAIL_ADDRESS>For comments submitted at Regulations.gov, follow
the online instructions for submitting comments. Once submitted,
comments cannot be edited or removed from Regulations.gov. For either
manner of submission, EPA may publish any comment received to its
public docket. Do not submit electronically any information you
consider to be confidential business information (CBI) or other
information whose disclosure is restricted by statute. Multimedia
submissions (audio, video, etc.) must be accompanied by a written
comment. The written comment is considered the official comment and
should include discussion of all points you wish to make. EPA will
generally not consider comments or comment contents located outside of
the primary submission (i.e., on the web, cloud, or other file sharing
system). For additional submission methods, please contact the person
identified in the FOR FURTHER INFORMATION CONTACT section. For the full
EPA public comment policy, information about CBI or multimedia
submissions, and general guidance on making effective comments, please
visit https://www.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Serena Nichols, Planning &
Implementation Branch (3AD30), Air & Radiation Division, U.S.
Environmental Protection Agency, Region III, 1650 Arch Street,
Philadelphia, Pennsylvania 19103. The telephone number is (215) 814-
2053. Ms. Nichols can also be reached via electronic mail at
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: On July 30, 2020, the Maryland Department of
the Environment (MDE), on behalf of the State of Maryland, submitted a
revision to the Maryland SIP entitled, ``2015 8-Hour Ozone NAAQS (0.070
ppm) Marginal Area State Implementation Plan for the Baltimore, MD
Nonattainment Area, SIP #20-08.'' This SIP revision, referred to in
this rulemaking action as the ``Baltimore base year inventory SIP,''
addresses the base year inventory requirement for the 2015 ozone NAAQS.

I. Background

    On October 1, 2015, EPA strengthened the 8-hour ozone NAAQS,
lowering the level of the NAAQS from 0.075 ppm parts per million (ppm)
to 0.070 ppm. 80 FR 65292 (October 26, 2015). Effective August 3, 2018,
EPA designated the Baltimore Area, consisting of Anne Arundel,
Baltimore, Carroll, Harford, and Howard Counties and the City of
Baltimore, all in Maryland, as marginal nonattainment for the 2015
ozone NAAQS. 83 FR 25776 (June 4, 2018). CAA section 182(a)(1) requires
ozone nonattainment areas classified as marginal or above to submit a
comprehensive, accurate, current inventory of actual emissions from all
emissions sources in the nonattainment area, known as a ``base year
inventory.'' The Baltimore base year inventory SIP addresses a base
year inventory requirement for the Baltimore Area.

II. Summary of SIP Revision and EPA Analysis

A. EPA's Evaluation of the Baltimore Base Year Inventory SIP

    EPA's review of Maryland's base year inventory SIP for the
Baltimore Area indicates that it meets the base year inventory
requirements for the 2015 ozone NAAQS. As required by 40 CFR
51.1315(a), MDE selected 2017 for the base year inventory, which is
consistent with the baseline year for the reasonable further progress
(RFP) plan because it is the year of the most recent triennial
inventory. MDE included actual ozone season emissions, pursuant to 40
CFR 51.1315(c).
    EPA prepared a Technical Support Document (TSD) in support of this
rulemaking. In that TSD, EPA reviewed the results, procedures, and

methodologies for the SIP base year, and found them to be acceptable
and developed in accordance with EPA's technical guidance. The TSD is
available online at http://www.regulations.gov, Docket ID No. EPA-R03-
OAR-2021-0017.

B. Base Year Inventory Requirements

    In EPA's December 6, 2018 (83 FR 62998) rule, ``Implementation of
the 2015 National Ambient Air Quality Standards for Ozone:
Nonattainment Area State Implementation Plan Requirements,'' known as
the ``SIP Requirements Rule,'' EPA set out nonattainment area
requirements for the 2015 ozone NAAQS. The SIP Requirements Rule
established base year inventory requirement, which were codified at 40
CFR 51.1315. As required by 40 CFR 51.1315(a), each 2015 ozone
nonattainment area to submit a base year inventory within 2 years of
designation, i.e., by no later than August 3, 2020.
    Also, 40 CFR 51.1315(a) requires that the inventory year be
selected consistent with the baseline year for the RFP plan as required
by 40 CFR 51.1310(b), which states that the baseline emissions
inventory shall be the emissions inventory for the most recent calendar
year for which a complete triennial inventory is required to be
submitted to EPA under the provisions of subpart A of 40 CFR 51, Air
Emissions Reporting Requirements, 40 CFR 51.1-50. The most recent
triennial inventory year conducted for the National Emissions Inventory
(NEI) pursuant to the Air Emissions Reporting Requirements (AERR) rule
is 2017. 73 FR 76539 (December 17, 2008). Maryland selected 2017 as
their baseline emissions inventory year for RFP. This selection
comports with EPA's implementation regulations for the 2015 ozone NAAQS
because 2017 is the inventory year. 40 CFR 51.1310(b).\1\ Further, 40
CFR 51.1315(c) requires emissions values included in the base year
inventory to be actual ozone season day emissions as defined by 40 CFR
51.1300(q), which sates: Ozone season day emissions means an average
day's emissions for a typical ozone season work weekday. The state
shall select, subject to EPA approval, the particular month(s) in the
ozone season and the day(s) in the work week to be represented,
considering the conditions assumed in the development of RFP plans and/
or emissions budgets for transportation conformity.
---------------------------------------------------------------------------

    \1\ On January 29, 2021, the Court of Appeals for the D.C.
Circuit issued its decision regarding multiple challenges to EPA's
implementation rule for the 2015 ozone NAAQS which included, among
other things, upholding this provision allowing states to use an
alternative baseline year for RFP. Sierra Club v. EPA, No. 15-1465
(D.C. Cir.) (mandate not yet issued). The other provisions of EPA's
ozone implantation rule at issue in the case are not relevant for
this rulemaking.
---------------------------------------------------------------------------

C. Baltimore Base Year Inventory SIP

    The Baltimore base year inventory SIP contains an explanation of
MDE's 2017 base year emissions inventory for Baltimore (2017 Baltimore
BYE) for stationary, non-point, non-road, and on-road anthropogenic
sources, as well as biogenic sources, in the Baltimore Area. MDE
estimated anthropogenic emissions for volatile organic compound (VOC),
nitrogen oxide (NOX), and carbon monoxide (CO) for a typical
ozone season workweek day.
    MDE developed the 2017 Baltimore BYE with the following source
categories of anthropogenic emissions sources: Point, quasi-point, non-
point, non-road, on-road, biogenic, and commercial marine vessels,
airport, and railroad emissions sources (MAR). Appendix A of the
Baltimore base year inventory SIP, 2017 Base Year SIP Emissions
Inventory Methodologies (Appendix A), sets out the methodologies MDE
used to develop its base year inventory.\2\
---------------------------------------------------------------------------

    \2\ The Appendix A--2017 Base Year SIP Emission Inventory
Methodologies, submitted with the 2015 8-Hour Ozone NAAQS Marginal
Area State Implementation Plan for the Baltimore, MD Nonattainment
Area is included in the docket for this rulemaking available online
at https://www.regulations.gov, Docket ID: EPA-R03-OAR-2021-0017.
---------------------------------------------------------------------------

1. Point Sources
    Point sources are larger sources that are located at a fixed,
stationary location. As defined by the AERR in 40 CFR 51.50, point
sources are large, stationary (non-mobile), identifiable sources of
emissions that release pollutants into the atmosphere. A point source
is a facility that is a major source under 40 CFR part 70 for one or
more of the pollutants for which reporting is required by 40 CFR 51.15
(a)(1). These point sources can be associated with a single point or
group of points in space. Examples of point source emissions categories
include power plants, industrial boilers, petroleum refineries, cement
plants, and other industrial plants.
    As stated in Appendix A, for the 2017 Baltimore BYE, MDE defined a
point source located within a designated ozone nonattainment area as a
stationary commercial or industrial facility that operations and emits
more than 10 tons per year (tpy) of VOC; or 25 tons per year of
NOX; or a 100 tpy of CO, sulfur oxides (SOX),
particulate matter with an aerodynamic diameter less than 10
micrometers (PM10), diameter less than 2.5 micrometers
(PM2.5), and total suspended particulates (TSP).
    In Appendix A, MDE explains that it used several methods of source
identification to ensure the point source inventory is as complete as
possible. MDE's primary data source is its permitting program. MDE's
compliance program identifies other point sources though facility
inspections and investigations. In addition, facilities are required by
Maryland's emissions statement regulations, Code of Maryland
Regulations (COMAR) <IP_ADDRESS>-1 and <IP_ADDRESS>D to certify the air
emissions for the past calendar year. The certified emissions are used
for inventory and planning purposes.
    MDE's Air and Radiation Management Administration (ARMA) developed
the point source data for the 2017 base year inventory. The point
source inventory contains emissions for electric generating units (EGU)
and Non-EGU sources in the nonattainment area (NAA). EPA guidance for
emissions inventory development provides that ozone season day
emissions are used for the base year inventory for the NAA. ARMA
developed their 2017 inventory by using emissions directly reported to
the agency by facilities as required by Maryland air quality
regulations. These emissions are also reported to EPA, and after going
through EPA's quality assurance (QA) and quality control (QC) process,
are included in EPA's National Emissions Inventory (NEI). The emissions
for this base year can be found in EPA's 2017 NEI.\3\
---------------------------------------------------------------------------

    \3\ The TSD for the Base Year Inventory Submitted with the 2015
8-Hour Ozone NAAQS Marginal Area State Implementation Plan for the
Baltimore, MD Nonattainment Area, included in the docket for this
rulemaking available online at https://www.regulations.gov, Docket
ID: EPA-R03-OAR-2021-0017.
---------------------------------------------------------------------------

2. Quasi-Point Sources
    MDE defines quasi-point sources as that are generally considered
part of the non-point or non-road emissions sectors but are included in
the point source emissions inventory for a particular reason. In
Appendix A, MDE states that such reasons include Federal guidance, as
in the case of certain airports, or to facilitate future general
conformity determinations, as in the case of military bases, ports, and
other similar facilities. EPA has reviewed the source categories
included in the quasi-point sources and has found this to be a
reasonable approach to handle these sources.

3. Non-Point Sources
    Non-point sources are also called ``area sources.'' These sources
collectively represent individual sources of emissions that have not
been inventoried as specific point or mobile sources. These individual
sources treated collectively as non-point sources are typically too
small, numerous, or difficult to inventory using the methods for the
other classes of sources.
    Non-point sources that MDE evaluated for the 2017 Baltimore BYE
include petroleum distribution losses (e.g., tank truck unloading and
auto refueling), stationary source solvent application (e.g., dry
cleaners, auto refinishing), bioprocess emissions sources (bakeries,
breweries, wineries, distilleries), catastrophic/accidental releases
(e.g., oil spills), solid waste disposal treatment, and recovery (e.g.,
open burning), small stationary source fossil fuel use (e.g., small
utility boilers), fugitive sources (e.g., construction activity and
unpaved roads), fire sources (e.g., agricultural burning and vehicle
fires), and ammonia sources (e.g., agricultural livestock production
operations). Appendix A sets out the methodologies MDE used to estimate
emissions for each of these non-point source categories. These methods
are consistent with the most recent EPA emission inventory guidance.
4. Non-Road Mobile Sources
    Non-road mobile sources are also called ``off-highway'' mobile
sources. These are defined as a non-road engine or non-road vehicle. As
per 40 CFR 51.50, a non-road engine is an internal combustion engine
(including the fuel system) that is not used in an on-road motor
vehicle or a vehicle used solely for competition, or that is not
affected by sections 111 or 202 of the CAA. Also defined by 40 CFR
51.50, a non-road vehicle (rather than engine) is a vehicle that is run
by a non-road engine and that is not an on-road motor vehicle or a
vehicle used solely for competition. Examples of non-road mobile
sources include airport ground support equipment, agricultural and
construction equipment powered by an internal combustion engine, and
lawn and garden engines and equipment.
    As explained in Appendix A, consistent with EPA's Emission
Inventory Guidance for Implementation of Ozone and Particulate Matter
NAAQS and Regional Haze Regulations, MDE used the most current version
of EPA's NONROAD2008a model, which is incorporated into EPA's Motor
Vehicle Emission Simulator (MOVES) model, specifically MOVES2014a, to
develop the inventory for non-road mobile sources. The NONROAD2008a
model includes more than 80 basic and 260 specific types of non-road
equipment and further stratifies equipment types by horsepower rating.
Fuel types include gasoline, diesel, compressed natural gas (CNG), and
liquefied petroleum gas (LPG).
5. Marine Vessels, Airport, Railroad Locomotives (MAR) Sources
    MAR is a non-road sub-category. MDE states in its Baltimore base
year inventory SIP that, for MAR sources, MDE calculated emissions by
collecting data directly from surveyed sources, or activity from state
and federal reporting agencies. To develop the commercial marine
vehicle emissions for the base year, Maryland used EPA's 2016 beta
modeling platform. This platform was used because it provided the most
recent descriptions and methodologies for calculation of marine vessel
emissions. To estimate emissions for aircraft, Maryland used airport
activity statistics from the Federal Aviation Administration (FAA),
landing and takeoff cycle information from the Maryland Aviation
Administration, and statewide survey information for landing and
takeoffs, engine type, location, and usage data. Railroad emission
estimates were developed using activity and fuel consumption estimates
collected from the rail companies and proportioned to each county by
the amount of track miles each company utilized in a county. MDE
applied EPA emission factors using EPA guidance and methodologies or
the best engineering method. These methods of calculating emissions are
consistent with the most recent EPA emission inventory guidance.\4\
Details of the development of emissions for these sources along with
other non-road model sources are provided in Appendix A of Maryland's
July 30, 2020 submittal.
---------------------------------------------------------------------------

    \4\ Emission Inventory Guidance for Implementation of Ozone and
Particulate Matter National Ambient Air Quality Standards (NAAQS)
and Regional Haze Regulations, Page 130, included in the docket for
this rulemaking available online at https://www.regulations.gov,
Docket ID: EPA-R03-OAR-2021-0017 PG 130.
---------------------------------------------------------------------------

6. On-Road Mobile Sources
    On-road mobile sources are also called ``highway mobile sources.''
These sources are the motor vehicles (e.g., automobiles, buses, trucks)
traveling on local and highway roads. On-road mobile sources should be
estimated by the latest recommended on-road mobile source models.
Currently, that means EPA's MOVES model for all states but California.
    In addition to emissions from vehicles' exhaust, the MOVES model
estimates evaporative emissions for mobile sources, which must be
included in the inventory. Volatile hydrocarbons evaporate from the
fuel system while a vehicle is refueling, parked, or driving.
Evaporative processes differ from exhaust emissions because they don't
directly involve combustion, which is the main process driving exhaust
emissions.
    As stated in Appendix A, MDE used EPA's MOVES2014a model to
estimate the 2017 annual emissions as well as 2017 daily emissions from
on-road vehicles and total energy consumption in Maryland. Emissions
were estimated based on emission factors and vehicle activity. Emission
factors for vehicles were based on vehicle type such as passenger cars,
passenger trucks, vehicle age and the vehicle's operating modes.
Operating modes for running, start, and idle emissions are included in
MOVES. The emission factors varied over a range of conditions, such as
the ambient air temperature, speed, traffic conditions, road types,
road topography, etc. The generated emission factors were then
multiplied by the appropriate vehicle miles traveled (VMT) to estimate
emission.
    In order to estimate both the rate at which emissions are being
generated and to calculate VMT, MDE examined its road network and fleet
to estimate vehicle activity. For the annual inventories, this was done
for each of the twelve months in 2017 and aggregated for the entire
year. MDE used computer models to perform these calculations by
simulating the travel of vehicles on the Maryland's roadway system.
    EPA has reviewed the results, procedures, and methodologies for the
SIP base year, as well as comparing the inventory with previously QA/
QC'd data in EPA's 2017 NEI for any data discrepancies and found none.
EPA has therefore determined the base year inventory to be acceptable
and developed in accordance with EPA's technical guidance.
7. Biogenic Emissions
    MDE also inventoried biogenic emissions, which are not included in
the anthropogenic total. Biogenic emissions come from natural sources,
including vegetation, soils, volcanic emissions, lightning, and sea
salt. They need to be accounted for in photochemical grid models, as
most types are widespread and ubiquitous contributors to background
formation of

ozone. However, they are not included in the RFP baseline.
    Biogenic emissions are typically computed using a model which
utilizes spatial information on vegetation and land use and
environmental conditions of temperature and solar radiation. The model
inputs are typically horizontally allocated (gridded) data, and the
outputs are gridded biogenic emissions which can then be speciated and
utilized as input to photochemical grid models. In Appendix A, MDE
explains that it used the data files created and made available by EPA.
MDE computed biogenic emissions with a modified version of EPA's
Biogenic Emission Inventory System (BEIS) model that utilized county
land use data from EPA's land use inventory and temperature and cloud
cover data from the National Weather Service. This method is acceptable
under EPA's emission inventory guidance.\5\
---------------------------------------------------------------------------

    \5\ Emission Inventory Guidance for Implementation of Ozone and
Particulate Matter National Ambient Air Quality Standards (NAAQS)
and Regional Haze Regulations, Page 100, included in the docket for
this rulemaking available online at https://www.regulations.gov,
Docket ID: EPA-R03-OAR-2021-0017 PG 130.
---------------------------------------------------------------------------

8. Emissions Summary
    The Baltimore base year inventory SIP contains a summary of 2017
ozone season day emissions by source category, which is presented in
Table 1 of this document. Tables 2 through 7 of this document present
the 2017 Baltimore BYE by source category and county. In the Baltimore
base year inventory SIP, MDE notes that the biogenic emissions in Table
1 are taken from EPA's NEI 2014 database. Total biogenic emissions for
July 2014 were divided by 31 days to develop average ozone season day
emissions for each jurisdiction in the Baltimore Area and then added
together to develop the Baltimore Area total.

                   Table 1--2017 Baltimore BYE Summary
                       [Tons per ozone season day]
------------------------------------------------------------------------
         Source category               VOC          NOX           CO
------------------------------------------------------------------------
Point............................        5.729       47.530       18.902
Quasi-Point......................        1.310        7.274        6.549
Non-Point........................       72.233       10.931       26.954
Non-Road.........................       21.314       13.164      330.888
MAR..............................        0.930        7.440        3.848
On-Road Mobile...................       25.860       53.720      365.010
                                  --------------------------------------
    Anthropogenic Total..........      127.379      140.060      752.152
Biogenic.........................      227.640        2.740       24.550
------------------------------------------------------------------------

           Table 2--2017 Baltimore BYE Point Source Emissions
                       [Tons per ozone season day]
------------------------------------------------------------------------
           County name                 VOC          NOX           CO
------------------------------------------------------------------------
Anne Arundel County..............        0.885       13.079        5.523
Baltimore County.................        0.876       11.531        2.788
Carroll County...................        0.390        8.342        5.568
Harford County...................        0.471        3.110        0.422
Howard County....................        1.036        1.266        0.920
Baltimore City...................        2.070       10.202        3.682
                                  --------------------------------------
    Baltimore Area Total.........        5.729       47.530       18.900
------------------------------------------------------------------------

        Table 3--2017 Baltimore BYE Quasi-Point Source Emissions
                       [Tons per ozone season day]
------------------------------------------------------------------------
           County name                 VOC          NOX           CO
------------------------------------------------------------------------
Anne Arundel County..............        0.793        4.009        4.554
Baltimore County.................
Carroll County...................
Harford County...................        0.451        2.451        1.634
Howard County....................
Baltimore City...................        0.066        0.815        0.361
                                  --------------------------------------
    Baltimore Area Total.........        1.310        7.274        6.549
------------------------------------------------------------------------

         Table 4--2017 Baltimore BYE Non-Point Source Emissions
                       [Tons per ozone season day]
------------------------------------------------------------------------
           County name                 VOC          NOX           CO
------------------------------------------------------------------------
Anne Arundel County..............       16.532        2.090        2.836
Baltimore County.................       20.168        3.200        4.206
Carroll County...................        4.810        0.595        2.922

Harford County...................        9.111        1.007       12.685
Howard County....................        7.745        1.375        1.617
Baltimore City...................       13.867        2.665        2.689
                                  --------------------------------------
    Baltimore Area Total.........       72.233       10.931       26.954
------------------------------------------------------------------------

          Table 5--2017 Baltimore BYE Non-Road Source Emissions
                       [Tons per ozone season day]
------------------------------------------------------------------------
           County name                 VOC          NOX           CO
------------------------------------------------------------------------
Anne Arundel County..............        5.818        3.263       80.901
Baltimore County.................        6.421        4.725      102.577
Carroll County...................        1.572        0.980       26.043
Harford County...................        2.645        1.590       30.234
Howard County....................        2.712        1.500       53.191
Baltimore City...................        2.145        1.107       37.943
                                  --------------------------------------
    Baltimore Area Total.........       21.314       13.164      330.888
------------------------------------------------------------------------

            Table 6--2017 Baltimore BYE MAR Source Emissions
                       [Tons per ozone season day]
------------------------------------------------------------------------
           County name                 VOC          NOX           CO
------------------------------------------------------------------------
Anne Arundel County..............        0.113        1.623        0.776
Baltimore County.................        0.634        2.277        1.833
Carroll County...................        0.027        0.188        0.497
Harford County...................        0.031        0.469        0.321
Howard County....................        0.013        0.302        0.075
Baltimore City *.................        0.112        2.582        0.348
                                  --------------------------------------
    Baltimore Area Total.........        0.930        7.440        3.848
------------------------------------------------------------------------
* Emissions from marine vessels at the Port of Baltimore are included
  here.

           Table 7--2017 Baltimore BYE Mobile Source Emissions
                       [Tons per ozone season day]
------------------------------------------------------------------------
           County name                 VOC          NOX           CO
------------------------------------------------------------------------
Anne Arundel County..............         6.17        12.33        85.88
Baltimore County.................         8.12        17.72       117.58
Carroll County...................         2.13         3.10        21.86
Harford County...................         2.73         5.26        35.31
Howard County....................         3.12         8.21        54.20
Baltimore City...................         3.60         7.10        50.18
                                  --------------------------------------
    Baltimore Area Total.........        25.86        53.72       365.01
------------------------------------------------------------------------

III. Proposed Action

    EPA's review of this material indicates the Baltimore base year
inventory SIP meets the base year inventory requirement for the 2015
ozone NAAQS for the Baltimore Area. Therefore, EPA is proposing to
approve the Baltimore base year inventory SIP, which was submitted on
July 30, 2020. EPA is soliciting public comments on the issues
discussed in this document. These comments will be considered before
taking final action.

IV. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the CAA and applicable
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in
reviewing SIP submissions, EPA's role is to approve state choices,
provided that they meet the criteria of the CAA. Accordingly, this
action merely approves state law as meeting Federal requirements and
does not impose additional requirements beyond those imposed by state
law. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Orders
12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21,
2011);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a

substantial number of small entities under the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this proposed rulemaking, proposing to approve
Maryland's base year inventory SIP for the 2015 ozone NAAQS, does not
have tribal implications as specified by Executive Order 13175 (65 FR
67249, November 9, 2000), because the SIP is not approved to apply in
Indian country located in the State, and EPA notes that it will not
impose substantial direct costs on tribal governments or preempt tribal
law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide,
Incorporation by reference, Intergovernmental relations, Ozone,
Reporting and recordkeeping requirements, Nitrogen dioxide, Volatile
organic compounds.

    Dated: May 19, 2021.
Diana Esher,
Acting Regional Administrator, Region III.
[FR Doc. 2021-11441 Filed 5-28-21; 8:45 am]
BILLING CODE 6560-50-P