[Federal Register Volume 80, Number 128 (Monday, July 6, 2015)]
[Notices]
[Pages 38483-38485]
[FR Doc No: 2015-16413]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75323; File No. SR-NYSEArca-2015-17]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving
Proposed Rule Change Amending Rule 6.35 to Modify the Appointment
Process Utilized by the Exchange

June 29, 2015.

I. Introduction

    On March 20, 2015, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE
Arca'') 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 modify the Market Maker appointment and
withdrawal process used by the Exchange. The proposed rule change was
published for comment in the Federal Register on April 8, 2015.\3\ On
May 21, 2015, pursuant to section 19(b)(2) of the Act,\4\ the
Commission designated a longer period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to approve or disapprove the proposed
rule change.\5\ The Commission received no comment letters on the
proposed rule change. This order approves 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. 74635 (April 2,
2015), 80 FR 18909 (``Notice'').
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 75032, 80 FR 30511
(May 28, 2015).
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II. Description of the Proposed Rule Change

    The Exchange proposes to amend Rule 6.35 to modify the options
Market Maker appointment and withdrawal process used by the Exchange.
Under the proposal, once an option trading permit (``OTP'') holder has
been approved as a Market Maker under Exchange Rule 6.33,\6\ the Market
Maker would, subject to certain conditions, be permitted to register
rather than apply for an appointment in one or more option classes, and
would be permitted to select or withdraw option issues included in its
appointment using an Exchange-approved electronic interface. The
Exchange also proposes to include a Market Maker's available financial
resources and operational capability as considerations in its periodic
evaluation of Market Maker performance, which factors currently are
considered when a Market Maker applies for an appointment.
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    \6\ See Rule 6.33 (``Registration of Market Makers''). See also
Rule 6.32(a) (defining ``Market Maker''). The Exchange is not
proposing any changes to Rule 6.33.
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A. Background

    Currently, a registered Market Maker may seek an appointment in one
or more option classes pursuant to Rule 6.35. Specifically, Rule
6.35(a) provides that ``[o]n a form or forms prescribed by the
Exchange, a Market Maker must apply for an appointment in one or more
classes of option contracts.'' \7\ In addition to having the authority
to appoint one Lead Market Maker (``LMM'') per option class,\8\ Rule
6.35(b) provides that ``[t]he Exchange may appoint an unlimited number
of Market Makers in each class unless the number of Market Makers
appointed to a particular option class should be limited'' based on the
Exchange's judgment.\9\ Further, current Rule 6.35(c) provides that
``Market Makers may select from among any option issues traded on the
Exchange for inclusion in their appointment, subject to the approval of
the Exchange.'' \10\ In considering the approval of the appointment of
a Market Maker in each security, ``the Exchange will consider the
Market Maker's preference; the financial resources available to the
Market Maker; the Market Maker's experience, expertise and past
performance in making markets, including the Market Maker's performance
in other securities; the Market Maker's operational capability; and the
maintenance and enhancement of competition among Market Makers in each
security in which they are appointed.'' \11\ Current Rule 6.35 also
sets forth the number of OTPs that the Market Maker must have in order
to have a specified number of option issues included in the Market
Maker's appointment.\12\
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    \7\ See Notice, supra note 3, at 18909.
    \8\ See Rule 6.82(a)(1) (defining ``LMM''). Any OTP Holder or
OTP Firm registered as a Market Maker with the Exchange is eligible
to be qualified as an LMM. Id. The Exchange is not proposing to
change Rule 6.82.
    \9\ See Notice, supra note 3, at 18909.
    \10\ See id.
    \11\ See id.
    \12\ See id. For example, 1 OTP affords a Market Maker up to 100
option issues included in their appointment, whereas 4 OTPS would
enable a Market Maker to have all option issues traded on the
Exchange included in their appointment. See id.
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    Under current Rule 6.35, ``Market Makers may change the option
issues in their appointment, subject to the approval of the Exchange,''
provided such requests are ``made in a form and

manner prescribed by the Exchange.''\13\ In addition, ``Market Makers
may withdraw from trading an option issue that is within their
appointment by providing the Exchange with three business days' written
notice of such withdrawal.'' \14\ If a Market Maker fails to provide
the required notice, the Market Maker ``may be subject to formal
disciplinary action pursuant to Rule 10.'' \15\ Moreover, the Exchange
``may suspend or terminate any appointment of a Market Maker in one or
more option issues under this Rule whenever, in the Exchanges'
judgment, the interests of a fair and orderly market are best served by
such action.'' \16\ A Market Maker may seek review of any action taken
by the Exchange.\17\
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    \13\ See id. In considering the change request, the Exchange
will consider the factors set forth in Rule 6.35(c). See id. at
18909, n.11.
    \14\ See Notice, supra note 3, at 18909.
    \15\ See Notice, supra note 3, at 18909-10.
    \16\ See id. at 18910.
    \17\ See id. Per Rule 6.35(i), Market Makers are also subject to
a trading requirement, such that ``[a]t least 75% of the trading
activity of a Market Maker (measured in terms of contract volume per
quarter) must be in classes within the Market Maker's appointment. A
failure to comply with the 75% contract volume requirement may
result in a fine pursuant to Rule 10.12; however, if aggravating
circumstances are present, formal disciplinary action may be taken
pursuant to Rule 10.4.'' The Exchange is not proposing any changes
to Rule 6.35(i).
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    The Exchange periodically evaluates whether Market Makers have
fulfilled performance standards, relating to, among other things,
quality of markets, competition of Market Makers, observance of ethical
standards and administrative factors.\18\ If the Exchange finds that a
Market Maker has not met the performance standards, the Exchange may
take action, including suspending, terminating or restricting a Market
Maker's appointment or registration, after providing the Market Maker
an opportunity to be heard.\19\
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    \18\ See Notice, supra note 3, at 18911, n.34.
    \19\ See Notice, supra note 3, at 18910, n.17 (describing
current Rule 6.35(j)). If a Market Maker's appointment in an option
issue or issues has been terminated pursuant to Rule 6.35(j), the
Market Maker may not be re-appointed as a Market Maker in that
option issue or issues for a period not to exceed 6 months. See id.
at 18910, n.17.
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B. Proposed Modifications

    The Exchange proposes to modify the current appointment and
withdrawal process. Specifically, the Exchange proposes to modify Rule
6.35 to provide that, rather than apply for an appointment, ``a Market
Maker may register for an appointment in one or more classes of option
contracts,'' in a form and manner prescribed the Exchange.\20\ The
Exchange would continue to have authority to appoint one LMM per option
class.\21\ Similarly, an unlimited number of Market Makers could
continue to be appointed to an options class, unless the Exchange
restricts such appointments following Commission review and
approval.\22\ The Exchange would retain the ability to suspend or
terminate any appointment of a Market Maker if necessary to maintain a
fair and orderly market.\23\
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    \20\ See proposed Rule 6.35(a). As discussed above, a Market
Maker must have the designated number of OTPs set forth in Rule
6.35(d) in order to have a trading appointment on the Exchange. See
proposed Rule 6.35(d).
    \21\ See proposed Rule 6.35(b).
    \22\ The Exchange is proposing a conforming change to the text
in Rule 6.35(b) to reflect the proposed changes in Rule 6.35(a), to
provide that ``[a]n unlimited number of Market Makers may register
in each class,'' subject to any limits imposed by the Exchange. See
proposed Rule 6.35(b).
    \23\ See Rule 6.35(g).
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    In addition, the Exchange proposes to modify Rule 6.35(c) to
provide that ``[a] Market Maker may select or withdraw option issues
included in their appointment by submitting a request via an Exchange-
approved electronic interface with the Exchange on a day when the
Exchange is open for business.'' \24\ The modified rule would provide
that a Market Maker's requested appointment would become effective by
no later than the following business day, whereas a Market Maker's
request to withdraw option issues from its appointment would not become
effective until the following business day.\25\ Thus, a Market Maker
could be appointed to an option issue on the same day it submits a
request to the Exchange, depending on the availability of Exchange
resources to process the request that day, but such request, if
properly made and received, would be effective no later than the
following business day. A Market Maker, however, would not be able to
withdraw an option issue from its appointment on the same day that it
submits the request; instead, the Exchange would only process such
requests on an overnight basis for effectiveness on the following
business day. Also, before any changes to a Market Maker's appointment
would become effective, the Exchange would be required to confirm that
the Market Maker's appointment would not exceed that permitted under
paragraph (d) of the rule, pertaining to the number of OTPs a Market
Maker would be required to have,\26\ and also confirm receipt of the
Market Maker's request.\27\ According to the Exchange, the confirmation
requirement, applicable to requests for additions, changes, and
withdrawals, is designed to ensure that the request was properly made
and also successfully transmitted to the Exchange.\28\ Market Makers
would be able to select issues in their appointment or make changes
thereto pursuant to proposed Rule 6.35(c) by submitting an email to the
Exchange, which is currently ``the Exchange-approved electronic
interface.'' \29\
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    \24\ See proposed Rule 6.35(c).
    \25\ Id.
    \26\ Id.
    \27\ See id.
    \28\ See Notice, supra note 3, at 18910.
    \29\ The Exchange will announce by Trader Update the email
address that Market Makers should utilize to make selections in, or
changes to, their appointment pursuant to this Rule. See Notice,
supra note 3, at 18910, n.24.
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    As noted above, paragraph (d) of current Rule 6.35 sets forth the
number of OTPs a Market Maker must have in order to have a specified
number of option issues included in the Market Maker's appointment. The
Exchange recently amended its fee schedule to include this information
on its Fee Schedule and therefore is proposing to delete the detailed
information set forth in Rule 6.35(d) and instead state that ``[a]
Market Maker must have the number of OTPs required under the Fee
Schedule for its appointment as a Market Maker in option issues.'' \30\
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    \30\ See proposed Rule 6.35(d).
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    Proposed Rule 6.35(h) would provide that a Market Maker may seek
review of any action taken by the Exchange under Rule 6.35.\31\
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    \31\ See Notice, supra note 3, at 18911.
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    Pursuant to current Rule 6.35(j), the Exchange conducts periodic
evaluations of Market Makers to determine whether they have fulfilled
performance standards. The Exchange proposes to modify Rule 6.35(j)(1)
to specify two additional factors it may consider in evaluating whether
a Market Maker has fulfilled performance standards pursuant to Rule
6.35(j): (1) The financial resources available to the Market Maker and
(2) the Market Maker's operational capability.\32\ These factors are
currently among the factors the Exchange considers when determining
whether to approve a Market Maker's appointment.\33\ In connection with
the other proposed changes to the Market Maker appointment process, the
Exchange proposes that these factors instead be considered as part of
the Exchange's periodic evaluation of a Market Maker.
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    \32\ See proposed Rule 6.35(j).
    \33\ See Notice, supra note 3, at 18911.
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    Further, the Exchange proposes to modify Rule 6.35(j)(2) to reflect
the proposed changes to the Market Maker appointment process.
Specifically, the Exchange proposes to change the reference to a Market
Maker being ``re-

appointed'' by the Exchange if an option issue or issues has been
terminated pursuant to this subsection (j), and to instead provide that
``the Exchange may restrict the Market Maker's registration as a Market
Maker in that option issue or issues for a period not to exceed 6
months.'' \34\ The Exchange would retain the discretion to suspend that
Market Maker's appointment in the affected option issue(s) for a full
six months, or to allow that Market Maker to resume that appointment
earlier than the prescribed six-month period, based on the Exchange's
evaluation of the facts and circumstances.\35\
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    \34\ See proposed Rule 6.35(j)(2) (``If a Market Maker's
appointment in an option issue or issues has been terminated
pursuant to this subsection (j), the Exchange may restrict the
Market Maker's registration as a Market Maker in that option issue
or issues for a period not to exceed 6 months.'').
    \35\ See Notice, supra note 3, at 18911.
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    Finally, the Exchange proposes certain clarifying technical changes
to Rule 6.35 as well as certain conforming changes so that there is
consistency throughout the rule text.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act \36\ and the
rules and regulations thereunder applicable to a national securities
exchange.\37\ In particular, the Commission finds that the proposed
rule change is consistent with section 6(b)(5) of the Act,\38\ 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.
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    \36\ 15 U.S.C. 78f.
    \37\ 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).
    \38\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the proposal to permit an OTP holder
approved as a registered Market Maker pursuant to Exchange Rule 6.33 to
register for and withdraw from options appointments, subject to the
proposed conditions and in accordance with the other provisions of Rule
6.35, is reasonably 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 Exchange states that the proposed changes regarding how Market
Makers select and modify their appointments would provide Market Makers
with more efficient access to the securities in which they want to make
markets, enabling them to quickly begin disseminating competitive
quotations in those securities which would provide additional liquidity
and enhanced competition in those securities on the Exchange.\39\ The
Exchange notes that the proposed rule change would enable Market Makers
to manage their appointments with more flexibility and in a timelier
manner, but that Market Makers still will be required to comply with
certain obligations to maintain their status as a Market Maker,
including that they provide continuous, two-sided quotations in their
appointed securities.\40\ The Exchange also believes that preventing
Market Makers from being able to withdraw an option issue from its
appointment on the same day that it submits the request (as such
requests, if properly made and received, are processed on an overnight
basis for effectiveness the following business day) will serve to
promote just and equitable principles of trade and benefit investors
and the public interest.\41\ Further, before any changes to a Market
Maker's appointment become effective, the Exchange will be required to
confirm that the Market Maker's appointment will not exceed the number
of OTPs a Market Maker is required to have and also will be required to
confirm receipt of the Market Maker's request.\42\
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    \39\ See Notice, supra note 3, at 18910. In addition, the
Exchange notes that other options exchanges permit market makers to
select their appointments in a similar manner via exchange-approved
electronic interfaces. See Notice, supra note 3, at 18911, n.28
(citing BATS Exchange, Inc. Rule 22.3(b) (``An Options Market Maker
may become registered in a series by entering a registration request
via an Exchange approved electronic interface with the Exchange's
systems by 9:00 a.m. Eastern time. Registration shall become
effective on the day the registration request is entered''); and
NASDAQ Options Market, Chapter VII, Section 3(b) (``An Options
Market Maker may become registered in an option by entering a
registration request via a Nasdaq approved electronic interface with
Nasdaq's systems. Registration shall become effective on the day the
registration request is entered.'').
    \40\ See Notice, supra note 3, at 18910.
    \41\ See id. at 18912.
    \42\ See text accompanying notes 26-27 supra.
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    The Commission notes that the Exchange has proposed to add a Market
Maker's available financial resources and operational capability as
factors the Exchange may consider during its periodic evaluation of a
Market Maker's performance, stating that these factors are important
considerations in evaluating a Market Maker's performance, and that
continued consideration of these factors would remove impediments to
and perfect the mechanism of a free and open market and would benefit
investors and the public interest.\43\ The Commission further notes
that the Exchange will continue to have authority to suspend or
terminate any appointment of a Market Maker in one or more options
issues whenever, in the Exchange's judgment, the interests of a fair
and orderly market are best served by such action.\44\ The Exchange
will also retain the ability to restrict a Market Maker's registration
in option issues for up to six months if a Market Maker's appointment
in that option issue or issues has been terminated under the rule, and
Rule 6.35 will continue to give the Exchange discretion to allow the
Market Maker to resume that appointment earlier than the prescribed
six-month period or to maintain the suspension for the entire period.
Finally, the Exchange is not proposing changes to the disciplinary and
appeals process for Market Makers that do not meet minimum performance
standards.\45\
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    \43\ See Notice, supra note 3, at 18912.
    \44\ See Rule 6.35(g). See also Notice, supra note 3, at 18912,
n.40 and Rule 6.33 (regarding the Exchange's ability to suspend or
terminate a Market Maker's registration based on ``a determination
of any substantial or continued failure by such Market Maker to
engage in dealings in accordance with Rules 6.37, 6.37A or 6.37B,''
which outline the obligations of Market Makers).
    \45\ See Notice, supra note 3, at 18912.
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    Based on the foregoing, the Commission finds the proposed rule
change is consistent with the Act.

IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\46\ that the proposed rule change (SR-NYSEArca-2015-17) be, and
hereby is, approved.
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    \46\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\47\
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    \47\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-16413 Filed 7-2-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 187 (Thursday, September 28, 2017)]
[Notices]
[Pages 45316-45317]
[FR Doc No: 2017-20760]

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DEPARTMENT OF LABOR

Occupational Safety and Health Administration

[Docket ID OSHA-2012-0029]

Hawaii State Plan for Occupational Safety and Health; Operational
Status Agreement

AGENCY: Occupational Safety and Health Administration, Department of
Labor.

ACTION: Notice.

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SUMMARY: This document announces a new Operational Status Agreement
between the Occupational Safety and Health Administration (OSHA) and
the Hawaii State Plan. This agreement specifies the respective areas of
federal and state authority, and under which Hawaii will reassume
enforcement coverage in the private sector.

DATES: Effective September 28, 2017.

FOR FURTHER INFORMATION CONTACT: For press inquiries: Francis
Meilinger, OSHA Office of Communications; telephone<PHONE_NUMBER>;
email<EMAIL_ADDRESS>    For general and technical information: Douglas J. Kalinowski,
Director, OSHA Directorate of Cooperative and State Programs;
telephone:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

    Hawaii administers an OSHA-approved State Plan to develop and
enforce occupational safety and health standards for public-sector and
private-sector employers, pursuant to the provisions of Section 18 of
the Occupational Safety and Health Act (OSH Act), 29 U.S.C. 667.
Pursuant to Section 18(e) of the Act, OSHA granted Hawaii ``final
approval'' in 1984 (49 FR 19182, May 4, 1984). A final approval
determination results in the relinquishment of federal concurrent
enforcement authority in the state with respect to occupational safety
and health issues covered by the plan, 29 U.S.C. 667(e).
    During the period 2009-2012, the Hawaii State Plan faced major
budgetary and staffing restraints that significantly affected its
program. Therefore, the Hawaii Director of Labor and Industrial
Relations requested a temporary modification of the State Plan's
approval status from final approval to initial approval, to permit
exercise of supplemental federal enforcement activity and to allow
Hawaii sufficient time and assistance to strengthen its State Plan. On
September 21, 2012, OSHA published a Final Rule in the Federal Register
(77 FR 58488) that modified the Hawaii State Plan's ``final approval''
determination under Section 18(e) of the Act, transitioned the Plan to
``initial approval'' status under Section 18(b) of the Act, and
reinstated concurrent federal enforcement authority over occupational
safety and health issues in the private sector. That Federal Register
notice also provided notice of the Operational Status Agreement (OSA)
between OSHA and the Hawaii Occupational Safety and Health Division
(HIOSH), which specified the respective areas of federal and state
authority.
    HIOSH and OSHA have since worked together to strengthen the State
Plan, and HIOSH has achieved the milestones established to resume
practically all private-sector enforcement authority.

Notice of New Operational Status Agreement

    OSHA and HIOSH signed a new OSA on April 13, 2017, which replaced
the prior 2012 OSA. Federal OSHA and HIOSH will exercise their
respective enforcement authorities according to the terms of the 2017
OSA between OSHA and HIOSH, which specifies the respective areas of
federal and state authority. Among other things, Federal OSHA retains
coverage over all federal employees, contractors, and subcontractors at
Hawaii National Parks and on any other federal establishment where the
land is determined to be under exclusive federal jurisdiction; private-
sector maritime activities; private-sector employees within the secured
borders of all military installations where access is controlled; the
U.S. Postal Service, its contract workers, and contractor-operated
facilities; and the enforcement of Section 11(c) of the Act, 29 U.S.C.
660(c), the Act's whistleblower provision. The Hawaii State Plan
retains coverage over all state and local government employers and
regains coverage over all private-sector employers not covered by
federal OSHA, including marine construction not performed on vessels or
other floating facilities. For further information please visit http://www.osha.gov/dcsp/osp/stateprogs/hawaii.html.

Authority and Signature

    Loren Sweatt, Deputy Assistant Secretary of Labor for Occupational
Safety and Health, U.S. Department of Labor, authorized the preparation
of this notice. OSHA is issuing this notice under the authority
specified by Section 18 of the Occupational Safety and Health Act of
1970 (29 U.S.C. 667),

Secretary of Labor's Order No. 1-2012 (76 FR 3912), and 29 CFR part
1902.

    Signed in Washington, DC, on September 21, 2017.
Loren Sweatt,
Deputy Assistant Secretary of Labor for Occupational Safety and Health.
[FR Doc. 2017-20760 Filed 9-27-17; 8:45 am]
 BILLING CODE 4510-26-P


[Federal Register Volume 81, Number 151 (Friday, August 5, 2016)]
[Notices]
[Page 51877]
[FR Doc No: 2016-18574]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 12449-013]

Neshkoro Power Associates, LLC, Wisconsin8, LLC; Notice of
Application for Transfer of License and Soliciting Comments, Motions To
Intervene, and Protests

    On July 13, 2016, Neshkoro Power Associates, LLC (transferor) and
Wisconsin8, LLC (transferee) filed an application for the transfer of
license of the Big Falls Milldam Hydroelectric Project No. 2550. The
project is located on the Little Wolf River in Waupaca County,
Wisconsin. The project does not occupy federal lands.
    The applicants seek Commission approval to transfer the license for
the Big Falls Milldam Hydroelectric Project from the transferor to the
transferee.
    Applicants Contact: For transferor: Mr. Bernard H. Cherry, Neshkoro
Power Associates, LLC, c/o Eagle Creek Renewable Energy, LLC, 65
Madison Avenue, Morristown, NJ 07960, Phone:<PHONE_NUMBER>, Email:
<EMAIL_ADDRESS>and Mr. Donald H. Clarke and Mr. Joshua E.
Adrian, Duncan, Weinberg, Genzer & Pembroke, P.C., 1615 M Street NW.,
Suite 800, Washington, DC 20036, Phone<PHONE_NUMBER>, Emails:
<EMAIL_ADDRESS>and<EMAIL_ADDRESS>For Transferee: Mr. Dwight Bowler,
Wisconsin8, LLC, 813 Jefferson Hill Road, Nassau, New York 12123,
Phone:<PHONE_NUMBER>, Email<EMAIL_ADDRESS>and Mr. Joshua A. Sabo,
287 North Greenbush Road, Troy, New York 12180, Phone:<PHONE_NUMBER>,
Email<EMAIL_ADDRESS>    FERC Contact: Patricia W. Gillis,<PHONE_NUMBER>,
<EMAIL_ADDRESS>    Deadline for filing comments, motions to intervene, and protests:
30 days from the date that the Commission issues this notice. The
Commission strongly encourages electronic filing. Please file comments,
motions to intervene, and protests using the Commission's eFiling
system at http://www.ferc.gov/docs-filing/efiling.asp. Commenters can
submit brief comments up to 6,000 characters, without prior
registration, using the eComment system at http://www.ferc.gov/docs-filing/ecomment.asp. You must include your name and contact information
at the end of your comments. For assistance, please contact FERC Online
Support at<EMAIL_ADDRESS>(866) 208-3676 (toll free), or
(202) 502-8659 (TTY). In lieu of electronic filing, please send a paper
copy to: Secretary, Federal Energy Regulatory Commission, 888 First
Street NE., Washington, DC 20426. The first page of any filing should
include docket number P-12449-013.

    Dated: July 26, 2016.
Kimberly D. Bose,
Secretary.
[FR Doc. 2016-18574 Filed 8-4-16; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 78, Number 237 (Tuesday, December 10, 2013)]
[Proposed Rules]
[Pages 74057-74063]
[FR Doc No: 2013-29450]

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

40 CFR Part 52

[EPA-R09-OAR-2013-0778; FRL-9904-00-Region 9]

Disapproval of State Implementation Plan Revisions; Clark County,
Nevada

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing to disapprove revisions to the Clark
County portion of the Nevada State Implementation Plan (SIP). The SIP
contains state and local regulations necessary to meet requirements of
the Clean Air Act (CAA or the Act). We are proposing to disapprove a
submission that would revise the SIP to include affirmative defense
provisions applicable to violations related to excess emissions during
equipment startup, shutdown and malfunction (SSM) events. We are taking
comments on this proposal and plan to follow with a final action.

DATES: Any comments must arrive by January 9, 2014.

ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-
2013-0778, by one of the following methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the on-
line instructions.
    2. Email<EMAIL_ADDRESS>    3. Mail or deliver: Andrew Steckel (Air-4), U.S. Environmental
Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA
94105-3901.
    Instructions: All comments will be included in the public docket
without change and may be made available online at www.regulations.gov,
including any personal information provided, unless the comment
includes Confidential Business Information (CBI) or other information
whose disclosure is restricted by statute. Information that you
consider CBI or otherwise protected should be clearly identified as
such and should not be submitted through www.regulations.gov or email.
www.regulations.gov is an ``anonymous access'' system, and EPA will not
know your identity or contact information unless you provide it in the
body of your comment. If you send email directly to EPA, your email
address will be automatically captured and included as part of the
public comment. If EPA cannot read your comment due to technical
difficulties and cannot contact you for clarification, EPA may not be
able to consider your comment. Electronic files should avoid the use of
special characters, any form of encryption, and be free of any defects
or viruses.
    Docket: Generally, documents in the docket for this action are
available electronically at www.regulations.gov and in hard copy at EPA
Region IX, 75 Hawthorne Street, San Francisco, California. While all
documents in the docket are listed at www.regulations.gov, some
information may be publicly available only at the hard copy location
(e.g., copyrighted material, large maps), and some may not be publicly
available in either location (e.g., CBI). To inspect the hard copy
materials, please schedule an appointment during normal business hours
with the contact listed in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Idalia Perez, EPA Region IX, (415)
972-3248<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document ``we,'' ``us,'' and
``our'' refer to EPA.

Outline

I. The State's Submittal
    A. What regulation did the State submit?
    B. Are there other versions of the submitted regulation?
    C. What is the purpose of the submitted regulation?
    D What does the submitted regulation provide?
II. EPA's Evaluation Criteria
    A. General Framework for State Submittal and EPA Review of SIP
Revisions
    B. Specific Framework for Evaluating SIP Provisions Regarding
Excess Emissions
    C. What documents did we use in our evaluation?
III. EPA's Evaluation and Action
    A. Does the regulation meet the evaluation criteria?
    B. EPA Recommendations To Improve the Regulation
    C. Proposed Action and Public Comment
IV. Statutory and Executive Order Reviews

I. The State's Submittal

A. What regulation did the State submit?

    Table 1 identifies the section of the Clark County Air Quality
Regulations (CCAQR) proposed for disapproval, with the dates that it
was amended by the Clark County Board of Commissioners (CCBC) and
submitted to EPA on behalf of the Clark County Department of Air
Quality and Environmental Management (DAQEM) by the State of Nevada
Division of Environmental Protection (NDEP).

                                          Table 1--Submitted Regulation
----------------------------------------------------------------------------------------------------------------
         Local agency              Regulation number and title         Amended                Submitted
----------------------------------------------------------------------------------------------------------------
DAQEM.........................  Section 25: Affirmative Defense   May 18, 2010.....  September 1, 2010.
                                 for Excess Emissions Due to
                                 Malfunctions, Startups, and
                                 Shutdown.
----------------------------------------------------------------------------------------------------------------

    On March 1, 2011, NDEP's September 1, 2010 submission was deemed
complete by operation of law, pursuant to CAA section 110(k)(1).
    The CCBC also decided to adopt or amend other sections of the
CCAQR, primarily addressing air pollution permit procedures, at the
same May 18, 2010 CCBC hearing, and included these revisions in the
same September 1, 2010 SIP submission. EPA has already taken action
upon the other revisions in the September 1, 2010 SIP submission. EPA
proposed a limited approval and limited disapproval of these other
revisions on July 24, 2012 (77 FR 43206) and finalized the limited
approval and limited disapproval on October 18, 2012 (77 FR 6403). EPA
did not address the revisions to CCAQR Section 25 in the July 24, 2012
proposal or October 18, 2012 final action. Today's action addresses the
remaining portion of NDEP's September 1, 2010 submission, specifically
CCAQR Section 25.

B. Are there other versions of the submitted regulation?

    We are not certain when CCBC originally adopted Section 25, but
CCBC has amended it at the local level many times, most recently on May
18, 2010.\1\ EPA has not previously approved a version of Section 25
into the Nevada SIP.\2\ Therefore, the May 18, 2010 version of Section
25 is a new submittal to the SIP and is not replacing or amending pre-
existing requirements already approved into the SIP. EPA is today
reviewing only the May 18, 2010 version of Section 25 and the relevant
materials associated with it that were included in NDEP's September 1,
2010 SIP submittal.
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    \1\ ``CCAQR Section 25: Affirmative Defense for Excess Emissions
Due to Malfunctions, Startups, and Shudown,'' as adopted by CCBC on
May 18, 2010, page 25-4.
    \2\ CCBC previously submitted a version of Section 25, which EPA
disapproved on March 20, 1984. See 49 FR 10259, March 20, 1984
(previous disapproval of Clark Section 25). See also 69 FR 54006 at
54007 and 54018, September 7, 2004 (partial approval/disapproval of
Clark New Source Review program); 77 FR 14862 at 14884, March 13,
2012 (revised format for Nevada SIP incorporation by reference); and
40 CFR 52.1483.
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C. What is the purpose of the submitted regulation?

    Section 25 and the other CCAQR sections submitted on September 1,
2010 are part of DAQEM's overall program intended to control the health
and environmental impacts of air pollution. Specifically, CCAQR Section
25 describes the procedures by which air pollution sources may assert
an affirmative defense for violations that result from excess emissions
due to SSM events. CAA Section 110 describes procedures for States to
develop and submit various air pollution regulations to EPA as part of
SIP revisions. EPA interprets the CAA to authorize a state to elect to
create narrowly drawn affirmative defense provisions applicable to
malfunctions, consistent with EPA guidance. Accordingly, the Section 25
provision submitted by Clark County is not required by the CAA, but may
be submitted to EPA under CAA section 110(a).

D. What does the submitted regulation provide?

    CCAQR Section 25 establishes affirmative defenses applicable to
violations that result from excess emissions. Section 25.1 states that
affirmative defenses for certain excess emissions are available in the
case of violations of all emission standards and limitations, except
those specifically listed in Section 25.1.1(a) through (d), which are
primarily emission limits or standards related to federal requirements
under the CAA. For example, EPA interprets the exceptions from
25.1.1(a) to provide that Section 25 does not operate to create any
affirmative defense applicable to violations of any EPA standards
promulgated pursuant to CAA section 111.
    Section 25.2 states that emissions in excess of emission limits
that were caused by equipment malfunction constitute a violation.
However, a source is provided an affirmative defense from civil and
administrative enforcement (except injunctive relief) for these
violations if it meets the reporting requirements in Section 25.6 and
demonstrates compliance with Sections 25.2.1(a) through (j), which
require that: (a) The excess emissions resulted from a sudden and
unavoidable equipment breakdown beyond reasonable control; (b)
equipment was well maintained and operated; (c) equipment was repaired
expeditiously; (d) excess emissions were minimized; (e) excess emission
impacts were minimized; (f) there was no recurring pattern of excess
emissions; (g) ambient air quality standards were not exceeded; (h) the
excess emissions could not have been foreseen or avoided; (i) emission
monitoring systems were operated if practicable; and (j) the response
to the excess emissions was documented by contemporaneous records.
    Section 25.3 similarly states that emissions in excess of emission
limits that were caused by equipment startup and shutdown constitute a
violation. However, a source is provided an affirmative defense from
civil and administrative enforcement (except injunctive relief) for
these violations if it meets the reporting requirements in Section 25.6
and demonstrates compliance with Sections 25.3.1(a) through (h), which
require that: (a) The excess emissions could not have been prevented
through prudent planning and design; (b) if the excess emissions
resulted from a bypass of control equipment, the bypass was unavoidable
to prevent loss of life, personal injury or severe property damage; (c)
equipment was well maintained and operated; (d) excess emissions were
minimized; (e) excess emission impacts were minimized; (f) ambient air
quality standards were not exceeded; (g) emission monitoring systems
were operated if practicable; and (h) the response to the excess
emissions was documented by contemporaneous records. Section 25.3.2
notes that if excess emissions occur during scheduled startup and
shutdown, then those instances shall be treated as other malfunctions
subject to Section 25.2.
    Section 25.4 states that if excess emissions occur due to a
malfunction during scheduled maintenance, then that exceedance will be
treated the same as other malfunctions subject to 25.2.
    To obtain an affirmative defense, Section 25.5 requires sources to
demonstrate, through information required by Section 25.6, that all
reasonable measures were implemented to prevent the excess emissions.
    Section 25.6 requires air pollution sources to report to DAQEM
regarding emissions in excess of permit limits by: (a) a notification
within 24 hours of learning of the excess emissions; and (b) a report
containing the information required by Section 25.6.3 within 72 hours
of the initial notification. Section 25.6.2 accelerates these reporting
deadlines where emissions pose imminent and substantial danger. Section
25.6.3 specifies that the report must describe the emissions including:
(a) location; (b) magnitude; (c) time and duration; (d) type of
equipment; (e) cause; (f) steps taken to remedy and prevent future
malfunction; (g) steps taken to limit emissions; and (h) steps taken to
comply with applicable permit procedures. In the case of continuing or
recurring excess emissions, Section 25.6.4 states that the notification
requirements in Sections 25.6.1 and 25.6.2 will be satisfied if the
source provides notification after excess emissions are first detected
and includes in the notification an estimate of the time the excess
emissions will continue.

II. EPA's Evaluation Criteria

A. General Framework for State Submittal and EPA Review of SIP
Revisions

    Under the principle of cooperative federalism, both states and EPA
have authorities and responsibilities under the CAA with respect to
SIPs. Pursuant to CAA section 109, 42 U.S.C. 7409, EPA promulgates
National Ambient Air Quality Standards (NAAQS) for criteria pollutants,
the attainment and maintenance of which are considered requisite to
protect the public health and welfare. CAA section 107(a) assigns
states the primary responsibility for assuring that the NAAQS are
attained and maintained, and CAA section 110(a)(1), 42 U.S.C.
7410(a)(1), requires states to develop and submit to EPA, SIPs which
provide for NAAQS implementation, maintenance, and enforcement. CAA
section 110(a)(2), 42 U.S.C. 7410(a)(2), requires each SIP to meet the
requirements listed in section 110(a)(2)(A) through (M).
    In developing SIPs, states have broad authority to develop the mix
of emission limitations they deem best suited for the particular
situation, but this discretion is not unbridled. Under CAA section
110(k), EPA is required to determine whether or not SIP submissions in
fact meet all applicable requirements of the Act. EPA is authorized to
approve, disapprove, partially approve and partially disapprove, or
conditionally approve each SIP submission, as appropriate. When a SIP
submission does not meet the applicable requirements of the CAA, EPA is
obligated to disapprove it, in whole or in part, as appropriate.
    CAA sections 110(l) and 193 impose additional requirements upon EPA
when reviewing a state's proposed SIP revision. CAA section 110(l), 42
U.S.C. 7410(l), provides that EPA may not approve a SIP revision if it
``would interfere with any applicable requirement concerning attainment
and reasonable further progress, or any other applicable requirement of
this chapter.'' In addition, CAA section 193 prohibits SIP revisions
that would affect control measures in effect prior to the 1990 CAA
amendments in any area that is designated nonattainment for any NAAQS,
unless the modification insures equivalent to greater emission
reductions of such air pollutant.

B. Specific Framework for Evaluating SIP Provisions Regarding Excess
Emissions

    The general framework summarized above underlies EPA's evaluation
of SIP submissions as they relate to provisions related to excess
emissions. EPA has a longstanding interpretation of the CAA with
respect to the treatment in SIPs of excess emissions during SSM events.
Central to EPA's interpretation are the definitions of ``emission
limitation'' and ``emission standard'' contained in CAA section 302(k),
42 U.S.C. 7602(k), which are defined as limitations that must be met on
a continuous basis. Under CAA section 110(a)(2)(A), 42 U.S.C.
7410(a)(2)(A), each SIP must include enforceable emission limitations
and other control measures as may be necessary or appropriate to meet
applicable CAA requirements. In addition, under CAA section
110(a)(2)(C), 42 U.S.C. 7410(a)(2)(C), each SIP must provide for the
enforcement of the measures described in CAA section 110(a)(2)(A) and
provide for the regulation of sources as necessary to ensure the
attainment and maintenance of the NAAQS and protection of Prevention of
Significant Deterioration (PSD) increments.
    While the CAA requires that emission limitations in a SIP must be
met on a ``continuous'' basis, practical realities or circumstances may
create difficulties in meeting a legally required emission limit
continuously 100% of the time. Case law holding that technology-based
standards should account for the practical realities of technology
supports EPA's view that an enforcement program under a SIP that
incorporates some level of flexibility is reasonable and consistent
with the overall intent of the CAA.\3\ While EPA views all excess
emissions as violations of emission limitations or emission standards,
we recognize that, in certain situations, imposition of a civil penalty
for sudden and unavoidable malfunctions caused by circumstances
entirely beyond a source's control may not be appropriate.
---------------------------------------------------------------------------

    \3\ See, e.g., Essex Chemical v. Ruckelshaus, 486 F.2d 427, 433
(D.C. Cir. 1973); and Portland Cement Association v. Ruckelshaus,
486 F.2d 375 (D.C. Cir. 1973).
---------------------------------------------------------------------------

    In addressing excess emissions due to sudden and unavoidable
malfunctions, EPA has provided guidance on three approaches states may
elect to use: (1) Traditional enforcement discretion; (2) SIP
provisions that address the exercise of enforcement discretion by state
personnel; and (3) SIP provisions that provide a narrowly tailored
affirmative defense to civil penalties. Under the first approach, the
State (or another entity, such as EPA, seeking to enforce a violation
of the SIP) may consider the circumstances surrounding the event in
determining whether to pursue enforcement. Under the second approach,
states may elect to create SIP provisions that provide parameters for
the exercise of enforcement discretion by state personnel, so long as
they do not adversely affect enforcement by EPA or citizens. Under the
third approach, states may elect to create SIP provisions that
establish an affirmative defense that may be raised by the defendant in
the context of an enforcement proceeding for civil penalties (not
injunctive relief), if the defendant has proven that certain criteria
have been met.
    Most relevant to this action, EPA interprets the CAA to allow SIP
provisions that provide an affirmative defense, so long as they are
appropriately drawn. EPA has issued guidance specifically concerning
affirmative defense provisions in SIPs.\4\ EPA guidance recommends
criteria that it considers necessary to assure that the affirmative
defense is consistent with CAA requirements for SIP provisions. EPA
believes that narrowly-tailored affirmative defense provisions can
supply flexibility both to ensure that emission limitations are
``continuous'' as required by CAA section 302(k), because any
violations remain subject to a claim for injunctive relief, and to
provide limited relief for penalties for malfunctions that are beyond
the source's control where the source has taken necessary steps to
minimize the likelihood and extent of any such violation. Several
courts have agreed with this approach.\5\ Neither the enforcement
discretion nor the affirmative defense approaches may waive reporting
requirements for the violation. States are not required to employ an
affirmative defense approach, but if they choose to do so,

EPA will evaluate the state's SIP provisions for consistency with the
Act as interpreted by our policy and guidance, including those
documents listed in section II.C below.
---------------------------------------------------------------------------

    \4\ See Memorandum dated September 20, 1999, from Steven A.
Herman, Assistant Administrator for Enforcement and Compliance
Assurance, and Robert Perciasepe, Assistant Administrator for Air
and Radiation, entitled ``State Implementation Plans: Policy
Regarding Excess Emissions During Malfunctions, Startup, and
Shutdown'' (``1999 Policy''), pg. 3 of the Attachment. EPA notes
that at the time of the 1999 SSM Policy, EPA interpreted the CAA to
allow such affirmative defense provisions not only in the case of
malfunctions, but also in the case of startup and shutdown. For the
reasons explained later in this proposal, EPA no longer interprets
the CAA to permit affirmative defense provisions for events other
than malfunctions, because it believes that sources should be
expected to meet applicable emission limits during normal modes of
source operation or for appropriate alternative emission limits to
apply during such normal modes of source operation.
    \5\ See, Luminant Generation Co. v. EPA, 714 F.3d 841 (5th Cir.
2013) (upholding the EPA's approval of an affirmative defense
applicable during malfunctions in a SIP submission as a permissible
interpretation of the statute under Chevron step 2 analysis), cert
denied, 187 L. Ed. 2d 45 (October 7, 2013); Mont. Sulphur & Chemical
Co. v. EPA, 666 F.3d 1174 (9th Cir. 2012); and Ariz. Public Service
Co. v. EPA, 562 F.3d 1116, 1130 (9th Cir. 2009).
---------------------------------------------------------------------------

    In CCAQR Section 25 as submitted, DAQEM has elected to create an
affirmative defense provision applicable to excess emissions for SSM
events. EPA acknowledges that DAQEM attempted to develop these
affirmative defenses in NDEP's September 1, 2010 SIP submittal
consistent with EPA guidance at that time. However, EPA has reexamined
its interpretation of the CAA with respect to affirmative defenses and
accordingly believes that such affirmative defenses are only
appropriate in the case of unplanned events like malfunctions, not in
the case of planned events such as startup and shutdown for which
sources should be expected to comply with applicable SIP emission
limitations. Under CAA sections 110(k) and 110(l), EPA is obligated to
determine whether SIP submissions in fact meet CAA requirements and our
interpretation of the Act at the time EPA takes action on a SIP
submission.

C. What documents did we use in our evaluation?

    EPA's interpretation of the Act as it applies to SIP provisions
that address excess emissions occurring during SSM periods is set forth
in a series of guidance documents. These include: (1) A memorandum
dated September 28, 1982, from Kathleen M. Bennett, Assistant
Administrator for Air, Noise, and Radiation, entitled ``Policy on
Excess Emissions During Startup, Shutdown, Maintenance, and
Malfunctions'' (1982 Policy); (2) a memorandum dated February 15, 1983,
from Kathleen M. Bennett, Assistant Administrator for Air, Noise, and
Radiation, also entitled, ``Policy on Excess Emissions During Startup,
Shutdown, Maintenance, and Malfunctions'' (1983 Policy); (3) a
memorandum dated September 20, 1999, from Steven A. Herman, Assistant
Administrator for Enforcement and Compliance Assurance, and Robert
Perciasepe, Assistant Administrator for Air and Radiation, entitled
``State Implementation Plans: Policy Regarding Excess Emissions During
Malfunctions, Startup, and Shutdown'' (1999 Policy); and (4) a
memorandum dated December 5, 2001, from Eric Schaeffer, Director,
Office of Regulatory Enforcement, Office of Enforcement and Compliance
Assurance, and John S. Seitz, Director, Office of Air Quality Planning
and Standards, Office of Air and Radiation, entitled, ``Re-Issuance of
Clarification--State Implementation Plans (SIPs): Policy Regarding
Excess Emissions During Malfunctions, Startup, and Shutdown'' (2001
Policy).
    EPA's interpretation of the CAA with respect to SIP provisions that
address excess emissions during SSM events has been applied in
rulemaking, including, but not limited to: (1) EPA's ``Approval and
Promulgation of Implementation Plans; Texas; Excess Emissions During
Startup, Shutdown, Maintenance, and Malfunction Activities,'' 75 FR
68989 (Nov. 10, 2010); (2) EPA's ``Federal Implementation Plan for the
Billings/Laurel, MT, Sulfur Dioxide Area,'' 73 FR 21418 (Apr. 21,
2008); and (3) EPA's ``Finding of Substantial Inadequacy of
Implementation Plan: Call for Utah State Implementation Plan
Revision,'' April 18, 2011 (76 FR 21639).
    In addition, EPA recently issued a proposal in response to a
petition for rulemaking concerning CAA requirements for SIP provisions
that address excess emissions, reiterating EPA's interpretation of the
CAA with respect to such provisions.\6\ In this recent action, EPA
specifically addressed the CAA requirements with respect to SIP
provisions that provide an affirmative defense for violations of
emission limitations due to excess emissions during SSM events.
---------------------------------------------------------------------------

    \6\ See State Implementation Plans: Response to Petition for
Rulemaking; Findings of Substantial Inadequacy; and SIP Calls To
Amend Provisions Applying to Excess Emissions During Periods of
Startup, Shutdown, and Malfunction, February 22, 2013 (78 FR 12460)
(``February 22, 2013 Proposed SSM SIP Calls''); see also EPA's
February 4, 2013 Statutory, Regulatory, and Policy Context
Memorandum for the February 22, 2013 Proposed SSM SIP Calls.
---------------------------------------------------------------------------

    A copy of each document listed in this section is available in the
docket for this rulemaking.

III. EPA's Evaluation and Action

A. Does the regulation meet the evaluation criteria?

    NDEP's September 1, 2010 submission of CCAQR Section 25 fails to
meet the evaluation criteria in at least two significant respects.
    First, Sections 25.1 and 25.3 are inconsistent with the
requirements provided in CAA section 110(a) and conflict with the
fundamental enforcement structure provided in CAA sections 113 and 304,
because they create an affirmative defense for violations due to excess
emissions during startup and shutdown. EPA believes that providing
affirmative defenses for avoidable violations, such as those resulting
from excess emissions during planned events such as startups and
shutdowns, that are within the source's control, is inconsistent with
the requirements provided in CAA section 110(a) and the fundamental
enforcement structure provided in CAA sections 113 and 304,\7\ which
provide for potential civil penalties for violations of SIP
requirements.\8\
---------------------------------------------------------------------------

    \7\ See, Luminant Generation Co. v. EPA, 714 F.3d 841 (5th Cir.
2013) (upholding the EPA's approval of an affirmative defense
applicable during malfunctions in a SIP submission as a permissible
interpretation of the statute under Chevron step 2 analysis), cert
denied, 187 L. Ed. 2d 45 (October 7, 2013); See also, EPA's February
22, 2013 Proposed SIP Calls (78 FR 12460, 12480).
    \8\ See EPA's February 22, 2013 Proposed SIP Calls (78 FR 12460,
12480).
---------------------------------------------------------------------------

    By contrast, SIP provisions providing affirmative defenses can be
appropriate for malfunctions because, by definition and unlike planned
startups and shutdowns, malfunctions are unforeseen and could not have
been avoided by the source, and the source will have taken steps to
prevent the violation and to minimize the effects of the violation
after it occurs. In such circumstances, EPA interprets the Act to allow
narrowly drawn affirmative defense provisions that may provide relief
from civil penalties (but not injunctive relief) to sources, when their
conduct justifies this relief.\9\ Such is not the case with planned and
predictable events, such as startups and shutdowns, during which
sources should be expected to comply with applicable SIP emission
limitations and should not be accorded relief from civil penalties if
they fail to do so.\10\ Providing an affirmative defense for monetary
penalties for violations that result from planned events is
inconsistent with the basic premise that the excess emissions were
beyond the source's control, and thus is diametrically opposed to the
intended purpose of such an affirmative defense to encourage better
compliance even by sources for which 100% compliance is not possible.
---------------------------------------------------------------------------

    \9\ See EPA's February 22, 2013 Proposed SIP Calls (78 FR 12460,
12478).
    \10\ EPA notes that a state can elect to adopt alternative
emission limitations that apply to normal modes of source operation,
such as startup and shutdown, so long as these provisions are
consistent with CAA requirements. EPA's February 22, 2013 Proposed
SSM SIP Calls provides guidance on how such SIP provisions may be
developed to meet CAA requirements.
---------------------------------------------------------------------------

    Second, the criteria for obtaining an affirmative defense for
excess emissions during malfunctions in CCAQR Section 25.2 are not
fully consistent with CAA requirements. EPA has guidance making
recommendations for criteria appropriate for affirmative defense
provisions that would be consistent with the CAA. EPA's 1999 Policy and
the February 22, 2013 Proposed SSM SIP Call lay out these criteria.
These are

guidance recommendations and states do not need to track EPA's
recommended wording verbatim, but states should have SIP provisions
that are consistent with these recommendations in order to assure that
the affirmative defense meets CAA requirements. The affirmative defense
criteria set forth in Section 25.2.1 are not sufficiently consistent
with these recommended criteria for affirmative defense provisions in
SIPs for malfunctions.
    Specifically, EPA's guidance notes that affirmative defenses are
``not appropriate for areas and pollutants where a single source or
small group of sources has the potential to cause an exceedance of the
NAAQS or PSD increments.'' \11\ CCAQR Section 25.2.1(g) states that
sources with emissions in excess of an applicable emission limitation
due to a malfunction have an affirmative defense if the source has
demonstrated (among other things) that ``During the period of excess
emissions there were no exceedances of the relevant ambient air quality
standards established in Section 11 that could be attributed to the
emitting source.'' This deviates from EPA's guidance because CCAQR
Section 11.2 was adopted and submitted in 2003 and lists ``relevant
ambient air quality standards'' that do not account for all of the
NAAQS promulgated since the regulation was approved into the SIP in
2004.\12\ As a result, CCAQR Section 25.2 would allow an affirmative
defense for an exceedance of an applicable emission limitation even if
that exceedance violated a NAAQS that is not listed in CCAQR Section
11.2.\13\
---------------------------------------------------------------------------

    \11\ See page 3 of the Attachment to EPA's 1999 Policy on SSM
events.
    \12\ See CCAQR Section 11.2, ``Ambient Air Quality Standards,''
adopted by CCBC on 10/7/03, submitted by NDEP to EPA on 10/23/03,
and approved by EPA on 9/7/04 (69 FR 54006); 40 CFR 50.4-50.13.
    \13\ See, e.g. the 24-hour standard for PM2.5 of 65
[micro]g/m\3\ in CCAQR Section 11.2, which is inconsistent with the
24-hour standard set on October 17, 2006 of 35 [micro]g/m\3\ (71 FR
61144).
---------------------------------------------------------------------------

    In addition, Section 25.2.1(g) is not fully consistent with CAA
requirements because it fails to include consideration of the impacts
of excess emissions during a malfunction on the PSD increments. As
noted above, Section 25.2.1(g) only mentions the relevant ambient air
quality standards in Section 11, and Section 11 also does not mention
the PSD increments. SIP requirements are not limited to those specific
requirements for designated nonattainment areas; SIPs must also meet
requirements related to PSD in attainment areas. Similarly, SIP
provisions addressing affirmative defense provisions cannot be limited
exclusively to impacts on nonattainment areas.

B. EPA Recommendations To Improve the Regulation

    CCAQR Section 25.6 requires sources to provide information to DAQEM
regarding excess emissions caused by SSM. Such reporting would enable
DAQEM to review, evaluate, and utilize the information as a tool in its
air quality planning and management efforts and help provide for
attainment and maintenance of the NAAQS and other applicable
requirements of the Act. This reporting would also facilitate effective
enforcement, if appropriate. As a result, while it is not appropriate
at this time for EPA to separately approve Section 25.6 as submitted in
context of the overall Section 25, EPA would support a SIP revision
creating such reporting requirements, independent of the problematic
affirmative defense provisions elsewhere in Section 25.
    As stated in Section II.B and elsewhere above, EPA interprets the
CAA to allow only narrowly drawn affirmative defense provisions that
are available for events that are entirely beyond a source's control.
Thus, an affirmative defense may be appropriate for events like
malfunctions, which are sudden and unavoidable events that cannot be
foreseen or planned for. The underlying premise for an affirmative
defense provision is that the source is properly designed, operated and
maintained, and could not have taken action to prevent the exceedance.
Because a qualifying source could not have foreseen or prevented the
event, the affirmative defense is available to provide relief from
monetary penalties that could result from an event beyond a source's
control. Therefore, it may be possible for DAQEM to revise Section 25
to provide an affirmative defense for malfunctions consistent with CAA
requirements, as recommended in EPA's SSM Policy.
    The legal and factual basis supporting the concept of an
affirmative defense for malfunctions does not support providing an
affirmative defense for normal modes of operation like startup and
shutdown. Such events are planned and predictable. Sources should be
designed, operated, and maintained to comply with applicable emission
limitations during normal and predictable source operation. Because
startup and shutdown periods are part of a source's normal operations,
the same approach to compliance with, and enforcement of, applicable
emission limitations during those periods should apply as otherwise
applies during a source's normal operations. If justified, the state
can develop and submit to EPA for approval as part of the SIP,
alternative emission limitations or control measures that apply during
startup and shutdown, if a source cannot meet the otherwise applicable
emission limitations in the SIP.
    However, even if a source is a suitable candidate for alternative
SIP emission limitations during startup and shutdown, that does not
justify the creation of an affirmative defense in the case of excess
emissions during such events. Because these events are planned, EPA
believes that sources should be able to comply with applicable emission
limitations during these periods of time. To provide an affirmative
defense for violations that occur during planned and predictable events
for which sources should have been expected to comply is tantamount to
providing relief from civil penalties for a planned violation.
Accordingly, EPA recommends that NDEP should eliminate the affirmative
defense provisions in Section 25 applicable to startup and shutdown.

C. Proposed Action and Public Comment

    As discussed in Section II.B and elsewhere above, affirmative
defense provisions that include periods of normal source operation that
are within a source's control, such as planned startup and shutdown,
are inconsistent with the requirements of CAA section 110(a) and the
enforcement structure provided in CAA sections 113 and 304. Therefore,
the affirmative defense provision for excess emissions during startup
and shutdown created in Sections 25.1, 25.3 and elsewhere in CCAQR
Section 25 do not meet CAA requirements for SIPs. In addition, the
affirmative defense provisions for malfunctions in Section 25.2 do not
fully comply with the CAA as discussed in Section III.A above, and thus
also do not meet CAA requirements.
    As authorized in CAA section 110(k)(3), we are proposing to
disapprove CCAQR Section 25 in NDEP's September 1, 2010 SIP submission
because of the deficiencies discussed in section III.A above.
Affirmative defenses for excess emissions and other elements of Section
25 are not required by the Act, and the lack of affirmative defenses
for excess emissions does not make a SIP deficient. Therefore, if this
disapproval is finalized as proposed, there would be no CAA sanction
implications as described in CAA section 179 and 40 CFR 52.31, and no
Federal

Implementation Plan (FIP) implications as described in CAA section
110(c).
    We will accept comments from the public on this proposed
disapproval for the next 30 days.

IV. Statutory and Executive Order Reviews

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

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

B. Paperwork Reduction Act

    This proposed action does not impose an information collection
burden under the provisions of the Paperwork Reduction Act (44 U.S.C.
3501 et seq.) because this proposed action under CAA section 110 will
not in and of itself create any new information collection burdens but
simply disapproves certain State requirements for inclusion into the
SIP. Burden is defined at 5 CFR 1320.3(b).

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA, 5 U.S.C. 601 et seq.)
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.\14\ This proposed SIP disapproval under section 110 and
subchapter I, part D of the CAA will not have a significant impact on a
substantial number of small entities because it will not create any new
requirements but simply disapproves certain State requirements for
inclusion in the SIP. Accordingly, it affords no opportunity for EPA to
fashion for small entities less burdensome compliance or reporting
requirements or timetables or exemptions from all or part of the rule.
Therefore, I certify that this action will not have a significant
economic impact on a substantial number of small entities under the
RFA. Moreover, due to the nature of the Federal-State relationship
under the CAA, preparation of flexibility analysis would constitute
Federal inquiry into the economic reasonableness of State action. The
CAA forbids EPA to base its actions concerning SIPs on such grounds.
Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C.
7410(a)(2).
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    \14\ Small entities include small businesses, small
organizations, and small governmental jurisdictions. For purposes of
assessing the impacts of this notice on small entities, small entity
is defined as: (1) A small business that is a small industrial
entity as defined in the U.S. Small Business Administration (SBA)
size standards (see 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;
or (3) a small organization that is any not-for-profit enterprise
that is independently owned and operated and is not dominant in its
field.
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D. Unfunded Mandates Reform Act

    This action contains no Federal mandates under Title II of the
Unfunded Mandates Reform Act of 1995 (UMRA, 2 U.S.C. 1531-1538), for
State, local, or tribal governments or the private sector. EPA has
determined that the proposed disapproval action does not include a
Federal mandate that may result in estimated costs of $100 million or
more to either State, local, or tribal governments in the aggregate, or
to the private sector. This action proposes to disapprove pre-existing
requirements under State or local law, and imposes no new requirements.
Accordingly, no additional costs to State, local or tribal governments,
or to the private sector, result from this action.

E. Executive Order 13132--Federalism

    EO 13132, entitled ``Federalism'' (64 FR 43255, August 10, 1999),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by State and local officials in the development of
regulatory policies that have federalism implications.'' ``Policies
that have federalism implications'' is defined in EO 13132 to include
regulations that 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.''
    This proposed action does not have Federalism implications as
specified in EO 13132. 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 EO 13132, because it
merely disapproves certain State requirements for inclusion into the
SIP and does not alter the relationship or the distribution of power
and responsibilities established in the CAA. Thus, EO 13132 does not
apply to this action.

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

    This action does not have tribal implications, as specified in EO
13175 (65 FR 67249, November 9, 2000). In this action, EPA is not
addressing any tribal implementation plans. This action is limited to
Clark County, Nevada, and the SIP provisions which are the subject of
the proposed action do not apply to sources of emissions located in
Indian country. Thus, EO 13175 does not apply to this action. However,
EPA invites comment on this proposed rule from tribal officials.

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

    EPA interprets EO 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 EO 13045 has the
potential to influence the regulation. This proposed action is not
subject to EO 13045 because it is not an economically significant
regulatory action based on health or safety risks subject to EO 13045.
This proposed action under section 110 and subchapter I, part D of the
CAA will not in and of itself create any new regulations but simply
disapproves certain State requirements for inclusion into the SIP.

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

    This proposed action is not a ``significant energy action'' as
defined in EO 13211 (66 FR 28355, May 22, 2001), because it is not
likely to have a significant adverse effect on the supply, distribution
or use of energy. This proposed action under section 110 and subchapter
I, part D of the CAA will not in and of itself create any new
regulations, but simply disapproves certain State requirements for
inclusion into the SIP.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 104-113, section 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. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
    EPA believes that this proposed action is not subject to
requirements of section 12(d) of NTTAA because application of those
requirements would be inconsistent with the CAA. We also note that this
proposed rulemaking does not involve technical standards. Therefore,
EPA is not considering the use of any voluntary consensus standards.

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

    EO 12898 (59 FR 7629, February 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 lacks the discretionary authority to address environmental
justice in this proposed action. In reviewing SIP submissions, EPA's
role is to approve or disapprove state choices, based on the criteria
of the CAA. Accordingly, this action merely proposes to disapprove
certain State requirements for inclusion into the SIP under section CAA
110 and will not in and of itself create any new requirements.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Hydrocarbons,
Incorporation by reference, Intergovernmental relations, Reporting and
recordkeeping requirements, State implementation plan, Volatile organic
compounds.

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

    Dated: November 26, 2013.
Jared Blumenfeld,
Regional Administrator, Region IX.
[FR Doc. 2013-29450 Filed 12-9-13; 8:45 am]
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[Federal Register: May 27, 2009 (Volume 74, Number 100)]
[Notices]
[Page 25234]
[DOCID:fr27my09-27]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 2079-063]

Placer County Water Agency; Notice Dismissing Pleading

May 19, 2009.
    On March 26, 2009, the Commission issued Placer County Water
Agency, licensee for the Middle Fork Hydroelectric Project No. 2079, a
Statement of Annual Charges for U.S. Lands for fiscal year (FY) 2009.
On April 26, 2009, the licensee filed a request for rehearing of the FY
2009 annual charge bill and on May 6, 2009, the licensee filed a timely
appeal of its FY 2009 annual charge bill, which is still pending.
    Pursuant to section 11.20 of the Commission's regulations,\1\ if
the licensee believes its annual charges bill is incorrect, the
licensee may seek an appeal of its bill with the Chief Financial
Officer within 45 days after the bill's rendition. Subsequently, the
licensee may seek rehearing within 30 days after the Chief Financial
Officer's decision on the appeal. As noted above, the licensee's appeal
for its FY 2009 annual charge bill is still pending. Therefore, the
licensee's request for rehearing is dismissed as premature.
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    \1\ 18 CFR 11.20 (2008).
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    This notice constitutes final agency action. Request for rehearing
of this dismissal notice must be filed within 30 days of the date of
issuance of this notice, pursuant to 18 CFR 385.713 (2008).

Kimberly D. Bose,
Secretary.
[FR Doc. E9-12213 Filed 5-26-09; 8:45 am]

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