[Federal Register Volume 87, Number 112 (Friday, June 10, 2022)]
[Notices]
[Pages 35582-35585]
[FR Doc No: 2022-12483]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95048; File No. SR-FINRA-2022-014]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend FINRA Rules 4111 (Restricted Firm
Obligations) and 9561 (Procedures for Regulating Activities Under Rule
4111)

June 6, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 26, 2022, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by FINRA. FINRA has
designated the proposed rule change as constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under
the Act,\3\ which renders the proposal effective upon receipt of this
filing by the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    FINRA is proposing to amend FINRA Rules 4111 and 9561 to make non-
substantive and technical amendments.
    The text of the proposed rule change is available on FINRA's
website at http://www.finra.org, at the principal office of FINRA and
at the Commission's Public Reference Room.

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

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

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

1. Purpose
    On July 30, 2021, the Commission approved rules concerning firms
with a significant history of misconduct, including new Rule 4111
(Restricted Firm Obligations), amendments to Rule 9559 (Hearing
Procedures for Expedited Proceedings Under the Rule 9550 Series), and
new Rule 9561 (Procedures for Regulating Activities Under Rule
4111).\4\ The rules allow FINRA to impose obligations on broker-dealers
with significantly higher levels of risk-related disclosures than other
similarly sized peers based on numeric, threshold-based criteria.\5\
Specifically, Rule 4111 requires members that are identified as
``Restricted Firms'' to deposit cash or qualified securities in a
segregated account, adhere to specified conditions or restrictions, or
comply with a combination of such obligations.\6\
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    \4\ See Securities Exchange Act Release No. 92525 (July 30,
2021), 86 FR 42925 (August 5, 2021) (Order Approving File No. SR-
FINRA-2020-041, as Modified by Amendment Nos. 1 and 2) (``SEC
Order''); see also Securities Exchange Act Release No. 92525 (July
30, 2021), 86 FR 49589 (September 3, 2021) (Order Approving File No.
SR-FINRA-2020-041, as Modified by Amendment Nos. 1 and 2)
(Correction).
    \5\ See SEC Order, 86 FR 42925, 42926.
    \6\ See SEC Order, 86 FR 42925, 42926; see also Rule 4111(i)(16)
(defining ``Restricted Firm'').
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    The annual Rule 4111 process through which FINRA will determine
which members are Restricted Firms, and the obligations to impose on
them, has several steps and includes features that narrowly focus the
obligations on the firms of most concern.\7\ The first step is the
annual calculation.\8\ Specifically, for each member, the Department of
Member Regulation (``Department'') will compute annually the member's
``Preliminary Identification Metrics'' to determine if it meets the
``Preliminary Criteria for Identification.'' \9\ The date, each
calendar year, as of which the Department calculates the Preliminary
Identification Metrics to determine if the member meets the Preliminary
Criteria for Identification is the ``Evaluation Date.'' \10\
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    \7\ See SEC Order, 86 FR 42925, 42927.
    \8\ See Rule 4111(b).
    \9\ See Rule 4111(b); Rule 4111(i)(9) (definition of
``Preliminary Criteria for Identification'') and (i)(10) (definition
of ``Preliminary Identification Metrics'').
    \10\ See Rule 4111(i)(5).
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    For a member that meets the Preliminary Criteria for Identification
during the annual calculation, the Department will conduct an Initial

Department Evaluation.\11\ If the Department determines that the member
warrants further review, and such member has met the Preliminary
Criteria for the first time, the member will have a one-time staff-
reduction opportunity to no longer meet the Preliminary Criteria for
Identification.\12\ A member that still meets the Preliminary Criteria
for Identification after the staff-reduction opportunity, or that does
not have a one-time staff-reduction opportunity available, will proceed
to a Consultation.\13\
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    \11\ See Rule 4111(c)(1).
    \12\ See Rule 4111(c)(2).
    \13\ See Rule 4111(c); 4111(d).
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    After the Consultation, the Department will issue a Department
decision concerning the member.\14\ A Department decision will indicate
whether the member is designated as a Restricted Firm.\15\ For a member
that is designated as a Restricted Firm, the Department decision also
will state the obligations that are imposed on that member.\16\ These
obligations can include a ``Restricted Deposit Requirement,'' specified
conditions or restrictions on the operations and activities of the
member and its associated persons, or both.\17\ Rule 4111(e) includes
provisions concerning, in pertinent part, the Department's 30-day
deadline for rendering, and issuing notice of, its decision.\18\
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    \14\ See Rule 4111(e).
    \15\ See Rule 4111(e)(1).
    \16\ See Rule 4111(e)(1)(B) and (C).
    \17\ See Rule 4111(e)(1)(B) and (C); see also Rule 4111(d)(1);
Rule 4111(i)(15) (defining ``Restricted Deposit Requirement'').
    \18\ See Rule 4111(e)(1) and (e)(2).
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    To implement Rule 4111, FINRA created two new expedited
proceedings.\19\ Rule 9561(a) governs a new expedited proceeding that
allows a member to request a prompt review of the Department's
determinations. Rule 9561(b) governs a new expedited proceeding to
address a member's failure to comply with any requirements, conditions
or restrictions imposed on it pursuant to Rule 4111 and Rule 9561(a).
The procedures for the Rule 9561(b) expedited proceeding include, in
pertinent part, provisions concerning the notices that the Department
may issue to commence a Rule 9561(b) expedited proceeding and the
contents of those notices.\20\ Rule 9561(b) is expressly referenced in
Rule 4111(h), which concerns notices of a member's failures to comply
with a Restricted Deposit Requirement or conditions or restrictions
imposed pursuant to Rule 4111.
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    \19\ See SEC Order, 86 FR 42925, 42926.
    \20\ See Rule 9561(b)(1) and (3).
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    Rules 4111 and 9561, and the amendments to Rule 9559, became
effective on January 1, 2022.\21\ The first Evaluation Date for Rule
4111 will be June 1, 2022.\22\
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    \21\ See Regulatory Notice 21-34 (September 2021).
    \22\ See Information Notice, February 1, 2022 (FINRA Announces
Rule 4111 (Restricted Firm Obligations) Evaluation Date). As FINRA
explained in that Information Notice, FINRA plans to actually
perform the annual calculation at least 30 days after the June 1,
2022 Evaluation Date, to account for the time between when relevant
disclosure events occurred and when firms must report those events
on the Uniform Registration Forms. See Rule 4111(i)(17) (defining
``Uniform Registration Forms'' for purposes of Rule 4111).
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    FINRA is proposing technical, non-substantive changes to Rules 4111
and 9561, for clarity and consistency, and to avoid unintended
consequences of the 30-day deadline currently specified in Rule
4111(e). Specifically, FINRA is proposing amendments to: (1) Rule
4111(b), which concerns the annual calculation of the Preliminary
Criteria for Identification, to delete the reference to ``on a
calendar-year basis,'' as the Evaluation Date establishes the operative
time periods under the rule; (2) Rule 4111(e), to modify and clarify
when the 30-day time period commences for the Department to render, and
issue notice of, its decisions; (3) Rule 4111(h), to more closely align
its description of the notices issued pursuant to Rule 9561(b) with the
text of Rule 9561(b); (4) Rule 9561(b)(3), to modify the second
sentence to use the phrase ``suspension or cancellation of
membership,'' to be consistent with how the phrase ``suspension or
cancellation of membership'' is used throughout Rule 9561; and (5)
Rules 4111(f)(3), (i)(2), and (i)(15), to remove the capitalization
from the term ``Associated Person,'' to be consistent with how the term
is used throughout the FINRA Rulebook.
Proposed Amendments to Rule 4111(b)
    Rule 4111(b) currently provides that, for each member, the
Department will compute ``annually (on a calendar-year basis) the
Preliminary Identification Metrics to determine if the member meets the
Preliminary Criteria for Identification.'' FINRA proposes to delete
from Rule 4111(b) the words ``on a calendar-year basis.''
    What establishes the relevant time periods for the Rule 4111 annual
calculation is the Evaluation Date. The Evaluation Date is defined as
``the date, each calendar year, as of which the Department calculates
the Preliminary Identification Metrics to determine if the member meets
the Preliminary Criteria for Identification.'' \23\ The first
Evaluation Date under Rule 4111 will be June 1, 2022, and FINRA expects
that, in subsequent years, the Evaluation Dates also will be on June
1.\24\ Because the Evaluation Date establishes the operative time
periods for the Rule 4111 annual calculation, FINRA is proposing to
delete from Rule 4111(b) the words ``on a calendar-year basis.''
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    \23\ See Rule 4111(i)(5). The Evaluation Date impacts numerous
aspects of the annual Rule 4111 calculation--including, among other
things, the dates of the ``Evaluation Period,'' the ``Preliminary
Identification Metrics,'' the number of ``Registered Persons In-
Scope,'' and the number of ``Registered Persons Associated with
Previously Expelled Firms''--and which firm-size ``Preliminary
Identification Metrics Thresholds'' apply. See Rule 4111(i)(6)
(defining the ``Evaluation Period''); 4111(i)(10) (defining
``Preliminary Identification Metrics''); 4111(i)(13) (defining
``Registered Persons In-Scope''); 4111(i)(4)(F) (defining
``Registered Persons Associated with Previously Expelled Firms'');
4111(i)(11) (defining the ``Preliminary Identification Metrics
Thresholds'').
    \24\ See Information Notice, February 1, 2022 (FINRA Announces
Rule 4111 (Restricted Firm Obligations) Evaluation Date). FINRA also
has explained, both in Regulatory Notice 21-34 and Information
Notice, February 1, 2022, that FINRA will evaluate whether future
adjustments of the annual Evaluation Date are warranted and would
announce any changes in such date sufficiently in advance.
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Proposed Amendments to Rule 4111(e)
    FINRA is proposing to make technical, non-substantive changes to
the provisions in Rule 4111(e) that concern the timing of the
Department decisions, to modify and clarify when the 30-day time period
commences for the Department to render, and issue notice of, its
decisions.
    Currently, Rule 4111(e)(1) provides, in pertinent part, that
``[f]ollowing the Consultation, but no later than 30 days from the date
of the latest letter provided to the member under paragraph (d)(2) of
this Rule, the Department shall render a Department Decision . . . .''
Similarly, Rule 4111(e)(2) provides, in pertinent part, that ``[n]o
later than 30 days following the latest letter provided to the member
under paragraph (d)(2) of this Rule, the Department shall issue a
notice of the Department's decision pursuant to Rule 9561(a) . . . .''
The letters that FINRA can provide pursuant to Rule 4111(d)(2) include
ones that schedule the Consultation and ones that postpone the
commencement of the Consultation for good cause shown.\25\ Rule
4111(d)(2) requires that the Department provide the written
Consultation scheduling letter to the member firm ``at least seven days
prior to the Consultation.'' Rule 4111(d)(2) further provides that
``[p]ostponements shall not exceed 30 days unless the member
establishes the

reasons a longer postponement is necessary.''
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    \25\ See Rule 4111(d)(2).
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    FINRA's intent was to provide the Department with a reasonable
amount of time following the Consultation to evaluate the information
that a member provides during the Consultation and prepare its
decision. However, commencing the 30-day deadline period from the
``date of the latest letter to the member under [Rule 4111(d)(2)]''
could result in the Department having little to no time to prepare its
decision after the Consultation, especially when the Department sends a
written letter granting a postponement of a Consultation for good cause
shown. When a postponement is granted, the amount of time the
Department would have to prepare its decision would depend on how far
in advance of the postponed Consultation the Department sends the
letter granting the postponement request. In some cases, depending on
how long a postponement is granted, postponement letters could be
provided 30 days or more before a postponed Consultation, leaving the
Department with no time to prepare a decision following the postponed
Consultation or evaluate the information provided by the member during
the Consultation.\26\
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    \26\ See Rule 4111(d)(2).
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    Commencing the 30-day decision deadline period from the ``date of
the latest letter provided to the member under [Rule 4111(d)(2)]'' also
could have other unintended impacts on the Rule 4111 process. Rule
4111(d)(2) requires the Department to provide a written letter
scheduling the Consultation ``at least seven days prior to the
Consultation,'' but the ``latest letter'' provisions in Rule 4111(e)
could create a disincentive for the Department to provide more than
seven days' notice of the Consultation; each additional day of notice
provided would translate into one less day for the Department to
prepare its decision following the Consultation. Likewise, Rule
4111(d)(2) provides that postponements of Consultations ``shall not
exceed 30 days unless the member establishes the reasons a longer
postponement is necessary,'' but the ``latest letter'' provisions could
create a disincentive for the Department to grant postponements of a
length that would leave it with little or no time to prepare its
decisions.
    FINRA is also seeking to provide clarity to members on when the 30-
day decision deadline period would begin, because the ``latest letter''
provisions may create potential ambiguity as to what communication
starts, or restarts, the 30-day clock. For example, there could be
occasions when the Department, after sending an initial letter
scheduling the Consultation, needs to send subsequent scheduling
letters that revise minor scheduling details (e.g., adjustments to the
day, starting time, or location of the Consultation; changes to audio
or video conferencing details). In such situations, it may not be clear
which scheduling letter would qualify as the ``latest'' letter from
which the 30-day decision deadline period commences.
    For these reasons, FINRA is proposing to amend Rule 4111(e)(1) and
(e)(2) to require that the Department decision be rendered, and that
notice of that decision be issued, no later than 30 days from the
Consultation. This would ensure that the Department always has a
reasonable amount of time to evaluate the information provided by a
member during, and prepare its decisions after, the Consultation, and
clarify when the 30-day decision deadline period begins.
Proposed Amendments to Rule 4111(h)
    FINRA also is proposing non-substantive, technical changes to Rule
4111(h), to more closely align its description of the notices issued
pursuant to Rule 9561(b) with the text of Rule 9561(b).
    Currently, Rule 4111(h) provides that FINRA may issue a notice
``pursuant to Rule 9561(b)'' directing a member that is not in
compliance with the Restricted Deposit Requirement or the conditions or
restrictions imposed to ``suspend all or a portion of its business.''
The general description in Rule 4111(h) of the notices that may be
issued pursuant to Rule 9561(b), however, does not align with how Rule
9561(b) describes them. In this regard, the phrase ``suspension or
cancellation of membership'' (and, likewise, the phrase ``suspension or
cancellation'') is used throughout Rule 9561(b). For example, Rule
9561(b)(1) provides that if a member fails to comply with any Rule 4111
Requirements imposed,\27\ the Department, after receiving authorization
from FINRA's Chief Executive Officer or such other executive officer as
the Chief Executive Officer may designate, may issue a ``suspension or
cancellation'' notice to such member stating that the failure to comply
with the Rule 4111 Requirements within seven days of service of the
notice will result in a ``suspension or cancellation of membership.''
These phrases also are used in the title of Rule 9561(b)(1), as well as
in Rule 9561(b)(3), (4), and (6).\28\ In addition, Rule 4111(h) does
not currently describe how notices issued pursuant to Rule 9561(b)
shall state that the failure to comply within seven days of service of
the notice will result in a suspension or cancellation of
membership.\29\
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    \27\ In Rule 9561, ``the Rule 4111 Requirements'' refer
collectively to the requirements, conditions or restrictions to
which a Restricted Firm is subject. See Rule 9561(a)(1).
    \28\ See Rule 9561(b)(1) (titled ``Notice of Suspension or
Cancellation''), 9561(b)(3) (explaining that the notice shall
explain that a Hearing Officer ``may approve or withdraw the
suspension or cancellation of membership''), 9561(b)(4) (explaining
the effective date of a ``suspension or cancellation''), and
9561(b)(6) (explaining the effective date of a ``suspension or
cancellation'' when no hearing is timely requested); see also Rule
9559(n)(6) (``In any action brought under Rule 9561(b), the Hearing
Officer may approve or withdraw the suspension or cancellation of
membership . . . .'').
    \29\ See Rule 9561(b)(1).
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    Rule 4111(h) was intended to be entirely consistent with Rule
9561(b), as reflected by the fact that Rule 4111(h) expressly provides
that FINRA may issue a notice ``pursuant to Rule 9561(b).'' Thus, for
purposes of consistency and clarity, FINRA proposes to amend Rule
4111(h) to provide that, pursuant to the procedure set forth in Rule
9561(b), FINRA may issue a suspension or cancellation notice to a
member that is not in compliance with a Restricted Deposit Requirement
or conditions or restrictions imposed by Rule 4111, stating that the
failure to comply within seven days of service of the notice will
result in a suspension or cancellation of membership.
Proposed Amendments to Rule 9561(b)(3)
    FINRA also is proposing technical amendments to modify the second
sentence of Rule 9561(b)(3) to use the phrase ``suspension or
cancellation of membership,'' to be consistent with how the phrase
``suspension or cancellation of membership'' is used throughout Rule
9561.
    Rule 9561(b)(3) governs the contents of a Rule 9561(b)(1) notice of
suspension or cancellation of membership. Currently, the second
sentence of Rule 9561(b)(3) provides, in pertinent part, that ``[t]he
notice shall state when the suspension will take effect and explain
what the respondent must do to avoid such suspension.'' This use of the
word ``suspension'' is inconsistent with how the phrase ``suspension or
cancellation'' (and, similarly, ``suspension or cancellation of
membership'') is used throughout Rule 9561(b), including in a later
sentence in

Rule 9561(b)(3).\30\ Accordingly, for consistency and clarity, FINRA
proposes to modify the second sentence of Rule 9561(b)(3) to use the
phrase ``suspension or cancellation of membership.''
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    \30\ See Rule 9561(b)(1), (3), (4) and (6); see also Rule
9559(n)(6).
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Other Technical, Non-Substantive Changes
    FINRA also proposes to amend various provisions in Rule 4111 to
remove the capitalization of the term ``Associated Persons.'' \31\ This
would be consistent with how, throughout the FINRA Rulebook, the term
``associated person'' is generally not capitalized.\32\
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    \31\ The capitalized term ``Associated Persons'' is in Rule
4111(f)(3) (concerning requests by Previously Designated Restricted
Firms for withdrawals from a Restricted Deposit Requirement), (i)(2)
(defining ``Covered Pending Arbitration Claim''), and (i)(15)
(defining ``Restricted Deposit Requirement'').
    \32\ The definition of ``Covered Pending Arbitration Claim'' in
Rule 4111(i)(2) was modeled on the definition of the same term in
Rule 1011(c), which is in the Rule 1000 Series (Member Application
and Associated Person Registration). See Securities Exchange Act
Release No. 90527 (November 27, 2020), 85 FR 78540, 78541-42 n.10
(December 4, 2020) (Notice of Filing of SR-FINRA-2020-041). In Rule
1011(c), as well as in some other provisions in the Rule 1000
Series, the term ``Associated Person'' is capitalized. The Rule 1000
Series, however, has a specific definition of the term ``Associated
Person'' that applies specifically to the Rule 1000 Series. See Rule
1011(b).
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    FINRA has filed the proposed rule change for immediate
effectiveness and has requested that the SEC waive the requirement that
the proposed rule change not become operative for 30 days after the
date of the filing, so FINRA can implement the proposed rule change
immediately.\33\
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    \33\ FINRA notes that the proposed rule change would impact all
members, including members that have elected to be treated as
capital acquisition brokers (``CABs''), given that the CAB rule set
incorporates the impacted FINRA rules by reference. The proposed
rule change would not impact, however, member firms that are funding
portals, because the Funding Portal rule set neither incorporates
the impacted FINRA rules by reference nor contains parallel rule
provisions. See Funding Portal Rule 900(a) (excepting FINRA Rule
9561 from the application of the FINRA Rule 9000 Series to funding
portals).
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2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\34\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. The proposed rule change will make non-substantive,
technical amendments that FINRA believes will provide greater clarity
and consistency to its rules.
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    \34\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change brings
clarity and consistency to FINRA rules without adding any burden on
firms.

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

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \35\ and Rule 19b-
4(f)(6) thereunder.\36\
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    \35\ 15 U.S.C. 78s(b)(3)(A).
    \36\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-FINRA-2022-014 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2022-014. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal office of FINRA. All comments received
will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-FINRA-2022-014 and should be submitted
on or before July 1, 2022.
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    \37\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\37\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-12483 Filed 6-9-22; 8:45 am]
BILLING CODE 8011-01-P


``[t]his exceedance was flagged by CARB as a high wind natural event
[and] EPA concurred with CARB's request to exclude this data from
consideration in attainment findings on July 7, 2005.'' However, ``even
if EPA had not concurred with the exclusion of this data, the Corcoran
site would still attain the 24-hour NAAQS because the expected number
of exceedances \25\ is less than or equal to one per year, averaged
over the three year period 2003-2005.'' 71 FR 40952, 40954. In other
words, EPA believes that it need not address here the issue of whether
or not the September 3, 2004 exceedance should be flagged, because in
any event the SJV would still be attaining the PM-10 standards. In
addition, whether the SJV is ``at the limit'' of exceedances allowed
under the NAAQS is not a criterion for making an attainment
determination. Areas are either attaining or not attaining. EPA found
that the area would still be attaining even if this exceedance were
included, and on that basis determined that the area was in attainment.
As noted above, EPA believes that preliminary data indicating a
September 22, 2006 exceedance at the Corcoran monitor should also not
be included in this attainment determination for the reasons stated
previously relating to quality assured data and natural events.
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    \25\ EPA determines attainment of the 24 hour PM-10 NAAQS based
on the number of ``expected'' exceedances in a given year. Because
most manual PM-10 samplers do not operate every day but on a one in
six day schedule, EPA regulations at 40 CFR part 50, Appendix K
require an adjustment to the observed or actual number of
exceedances to account for days that are not sampled. In the
simplest case, when a monitor operating once every six days, with
100% data capture, records a single observed exceedance, that
exceedance would be adjusted to six expected exceedances. In the
specific case of the Corcoran monitoring site and its one in three
day schedule, EPA calculated the expected exceedances, based on the
single observed exceedance on September 3, 2004, to be three over a
three year period which averages to one exceedance per year. This
expected exceedance rate of one per year shows that the Corcoran
site is still in attainment of the 24-hour NAAQS. See 40 CFR part
50, Appendix K, section 3.1 for a complete discussion on how EPA
adjusts data.
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    Nevertheless, EPA notes that the attainment determination does not
mean the air quality problem is solved in the SJV. In order to be
redesignated as a PM-10 attainment area, the District and CARB will
need to address CAA section 107(d)(3)(E) requirements. In addition, the
SJV is nonattainment for the PM-2.5 and 8-hour ozone standards and will
need to achieve substantial further reductions in pollution levels to
attain these NAAQS. The commenter's implicit concern is that EPA's
action will somehow allow the SJV to relax its efforts to reduce air
pollution; however, EPA does not believe that is the case.
2. Data From BAM and TEOM Monitors
    Comment 15: The commenter states that there are four Beta
Attenuation Mass (BAM) monitors (designated by EPA as federal
equivalent methods and also referred to as ``special purpose
monitors'') in the Valley that monitor PM-10 concentrations and that
two of these monitors (Bakersfield-Golden State Highway and Corcoran-
Patterson Avenue) have recorded multiple exceedances of the Federal PM-
10 standard from 2003 to 2005. The commenter states that all valid data
from special purpose monitors must be considered within the regulatory
process and that EPA's rationale (that the District did not perform
quality control checks every two weeks and that CARB did not perform
independent field audits of the BAM sampler) for not considering data
from the Corcoran BAM monitor is not adequate.
    Response: The District and CARB have operated automated equivalent
(continuous) method monitors in the SJV at a number of PM-10 SLAMS
sites. The following table summarizes the type (BAM or TEOM), location
and history of operation of the PM-10 continuous monitors operated in
the Valley.

------------------------------------------------------------------------
                                 BAM operational      TEOM operational
       Monitoring site               period                period
------------------------------------------------------------------------
Bakersfield Golden State Hwy  7/28/2005-8/8/2006..  8/27/2006-Present.
Corcoran....................  Before 1/1/2003-7/22/ 1/1/2003-3/31/2005.
                               06.                  8/24/2006-Present.
Fresno 1st Street...........  Before 1/1/2003-      Before 1/1/2003-
                               Present.              Present.
Stockton....................  NA..................  Before 1/1/2003-June
                                                     28, 2005.
Tracy.......................  10/25/2005-9/26/2006  10/1/2006-Present.
------------------------------------------------------------------------

    EPA regulations at 40 CFR part 50, appendix K, section 2.3 address
the data requirements that must be met in order for EPA to determine
the attainment status of a particular monitoring site. In general EPA
needs three years worth of monitoring data in order to declare a site
in attainment of the NAAQS. Of the four BAM monitors operated in the
Valley, only Fresno 1st Street and Corcoran have been in operation long
enough to have accumulated three years of data.\26\ The Bakersfield-
Golden State Highway site operated a BAM monitor from July 28, 2005 to
August 8, 2006. The BAM was replaced by a TEOM monitor on August 27,
2006. The Tracy site operated a BAM monitor from October 26, 2005 to
September 26, 2006. The Tracy BAM was replaced by a TEOM monitor on
October 1, 2006. EPA's attainment determination is based on three
complete years of data from 2003-2005. Therefore, the data from these
BAM and TEOM monitors at Bakersfield Golden State Highway and Tracy
cannot be used to determine that these sites are in attainment.
---------------------------------------------------------------------------

    \26\ While it is necessary to have three years of representative
monitoring data to demonstrate that a monitor is attaining the
standard, 40 CFR part 50, appendix K, section 2.3(c) states that
there are less stringent data requirements for showing that a
monitor has failed to attain. Since the 24-hour PM-10 standard is
violated once a monitor averages more than one expected exceedance
per year (averaged over three years), a monitor with four or more
observed or expected exceedances has violated the 24-hour NAAQS even
if there is less than three years of data (four exceedances divided
by three years is greater than one per year).
---------------------------------------------------------------------------

    Furthermore, the BAM monitor at Tracy did not record any
exceedances of the 24-hour PM-10 NAAQS in 2005, though an exceedance
was recorded on September 22, 2006 (160 [mu]g/m\3\). The Bakersfield-
Golden State Highway automated equivalent monitors recorded three
exceedances of the NAAQS during their operation, a value of 156 [mu]g/
m3 on November 22, 2005 and a value of 180 [mu]g/
m3 on November 23, 2005 (recorded on BAM monitors). Another
exceedance (169 [mu]g/m3) was recorded by the Bakersfield-
Golden State Highway TEOM on September 22, 2006.\27\ Under 40 CFR 50.6,
``[t]he standards are attained when the expected number of days per
calendar year with a 24-hour average concentration above 150 [mu]g/
m3 * * * is equal or less than one.'' Therefore, because
neither the Tracy nor the Bakersfield-Golden State Highway BAM monitor
has averaged more than one exceedance per year, the exceedances
recorded at these monitors do not show that the area is in violation of
the 24-hour NAAQS. Even if the Bakersfield-Golden State Highway BAM and
TEOM data are considered together (and even if they were quality-
assured data not subject to natural events), the exceedances recorded
at these monitors would not show that the area is in violation of the
standard. See Responses 18 and 19.
---------------------------------------------------------------------------

    \27\ As noted previously the District and CARB have informed EPA
that they believe that exceedances recorded on September 22, 2006
are due to high wind and wildfire natural events.
---------------------------------------------------------------------------

    Automated equivalent analyzers are also operated at the Fresno 1st
site and the Corcoran site. See table on BAM and TEOM operating
histories above. The Fresno 1st site has operated both a BAM monitor
and a TEOM monitor for long enough that there is a three year data set
for both analyzers. Neither the BAM nor the TEOM operated at Fresno 1st
Street recorded any exceedances of the 24-hour NAAQS during the 2003-
2005 period, and both continue to show attainment through October 11,
2006.
    The Corcoran site operated both a BAM monitor and a TEOM monitor
during its history. See the table above on BAM and TEOM operating
histories. The automated equivalent analyzers operated at the Corcoran
site did record exceedances \28\ as summarized in the following table:
---------------------------------------------------------------------------

    \28\ An exceedance is defined as a daily value that is above the
level of the 24-hour standard (150 [mu]g/m3) after
rounding to the nearest 10 [mu]g/m3 (i.e. values ending
in 5 or greater are to be rounded up. See 40 CFR part 50, appendix
K, section 1.0.

   Corcoran Automated Equivalent Analyzer--PM-10 Exceedances 2003-2006
------------------------------------------------------------------------
                                                         Concentration
               Date  (type of analyzer)                    ([mu]g/m3)
------------------------------------------------------------------------
10/10/2003 (BAM).....................................                182
10/18/2003 (BAM).....................................                156
10/21/2003 (BAM).....................................                157
10/28/2003 (BAM).....................................                158
9/3/2004 (BAM).......................................               *217
11/21/2005 (BAM).....................................                166
11/22/2005 (BAM).....................................                177
11/23/2005 (BAM).....................................                185
11/26/2005 (BAM).....................................                166
2/27/2006 (BAM)......................................                179
9/22/2006 (TEOM).....................................              **261
------------------------------------------------------------------------
*The manual reference method monitor at Corcoran also recorded an
  exceedance of the NAAQS on this day that the State flagged as a high
  wind event under EPA's Natural Events Policy.
**As noted previously the District and CARB have informed EPA that they
  believe that exceedances recorded on September 22, 2006 are due to
  high wind and wildfire natural events.

    However, the data was not considered by EPA in its attainment
determination because the District did not perform the flow rate checks
of the BAM monitors as required by EPA regulations at 40 CFR part 58,
appendix A, section 3.1.2 and CARB did not perform independent flow
rate audits as required by 40 CFR part 58 appendix A, section 3.2.2.
See Response to comments 7 and 13 above.\29\
---------------------------------------------------------------------------

    \29\ Under 40 CFR 58.14, because the District did not intend
that data from these continuous monitors would be used for
determining attainment or nonattainment, flow rate checks and audits
were not required to be conducted. See May 8, 2006 letter to Wayne
Nastri, Regional Administrator, EPA Region 9, from Catherine
Witherspoon, Executive Officer, CARB with attached letter dated
April 24, 2006 to Catherine Witherspoon, Executive Officer, CARB
from Seyed Sadredin, Executive Director/Air Pollution Control
Officer, San Joaquin Valley Air Pollution Control District.
---------------------------------------------------------------------------

    In determining which data to use in regulatory actions, EPA needs
to determine whether the data meets our basic requirements. If it does
not then we cannot use the data in regulatory decisions. During the
three-year period of 2003-2005, the District only performed 10 of the
78 required bi-weekly flow rate checks and CARB never performed an
independent audit of the BAM monitor's flow rate, which is required
annually. While the commenter implies that this is a minor

deficiency, EPA believes the lack of QA/QC raises significant questions
about the reliability of the Corcoran BAM monitor data and therefore
concluded that it would not be appropriate to rely on data from this
monitor that did not meet our regulatory requirements.
    Comment 16: The commenter states that EPA cannot ignore the
Corcoran BAM monitor data due to the lack of precision check of the
flow meter. The commenter states that 40 CFR part 58, appendix A,
section <IP_ADDRESS> offers an alternative procedure at section <IP_ADDRESS>.1
for complying with the section 3.1.2 requirement for a precision check
of the operational flow rate of the analyzer. The alternative procedure
involves checking the BAM monitor's internal flow meter (vs. using an
external flow rate transfer standard) and requires an external audit of
the flow rate at least every six months, records of the past three
audits showing that the flow meter is stable, and no indication of
improper operation. Section <IP_ADDRESS>.2 even allows for the precision
check to be carried out remotely. The commenter states that EPA has not
analyzed whether the District properly maintained the Corcoran-
Patterson Avenue BAM monitor in accordance with section <IP_ADDRESS> and
that the District's maintenance records show regular weekly
maintenance, including checks of the on-screen flow rate, and also show
regular external flow audits.
    Response: As stated above, there are two routine quality assurance
checks that need to be made to monitoring instruments to ensure that
the data they are producing is reliable. One of these is a precision
check. The precision check for automated PM-10 analyzers, of which the
BAM monitor is one, is addressed in 40 CFR part 58, appendix A, section
3.1.2. See response to comment 13. This section requires a one-point
precision check to be performed at least once every two weeks. There
are two procedures that can be used to satisfy this requirement. The
standard procedure is explained in section <IP_ADDRESS> of appendix A and
the alternative procedure is explained in section <IP_ADDRESS> of appendix
A. One of our reasons for not using data from the Corcoran BAM monitor
is that the District did not perform the precision checks of its BAM
monitor and submit the resulting QA data to the AQS database. The
District performed neither the standard procedure nor the alternative
procedure.
    The commenter implies that EPA rejected the Corcoran BAM monitor
data even though the District had performed the sanctioned alternative
procedure. This is not true. EPA reviewed all the maintenance records
from the Corcoran-Patterson Avenue site and found that neither
precision check was being performed. While the operator did check the
BAM monitor's internal flow rate indicator routinely, the other
requirements of 40 CFR part 58, appendix A, section <IP_ADDRESS> were not
being met, i.e., the flow rate meter was not audited every six months
and there was no documentation that the flow meter is stable,
verifiable, and accurate to 4 percent (sections
<IP_ADDRESS>.1.1, <IP_ADDRESS>.1.2, <IP_ADDRESS>.1.3). See also response to comment 13
above. As stated in that response the precision check is one of the
critical measurement quality checks that are needed to ensure that the
device is performing as designed.
    Comment 17: The commenter states that EPA also cannot dismiss the
Corcoran BAM data because CARB did not perform independent field audits
as described in section 3.2.2 without explaining why these audits are
important in determining the reasonableness of the data. Moreover, the
commenter also states that EPA must demonstrate that the FRM monitors
were appropriately audited or explain why it is reasonable for the FRM
monitors to not be audited while excluding the BAM monitor data due to
this oversight. EPA needs a compelling rational basis for continuing to
exclude all of the BAM data or EPA must consider the data in
determining the Valley's attainment status.
    Response: Regular audits of monitoring equipment are important in
establishing the validity and accuracy of the data collected by an
agency. Section <IP_ADDRESS> of EPA's QA Guidance document ``Quality
Assurance Handbook,'' Volume II, Part II, September 1997, states that:

    [t]he primary goal of an auditing program is to identify system
errors that may result in suspect or invalid data. The efficiency of
the monitoring system (i.e., labor input vs. valid data output) is
contingent upon effective quality assurance (QA) activities. This
true assessment of the accuracy and efficiency of the PM-10
measurement system can only be achieved by conducting an audit under
the following guidelines:
     Without special preparation or adjustment of the system
to be audited.
     By an individual with a thorough knowledge of the
instrument or process being evaluated, but not by the routine
operator.
     With accurate, calibrated NIST-traceable transfer
standards that are completely independent of those used for routine
calibration and QC flow checks.
     With complete documentation of audit information for
submission to the operating agency. The audit information includes,
but is not limited to, types of instruments and audit transfer
standards, instrument model and serial numbers, transfer-standard
traceability, calibration information, and collected audit data.
    The audit procedures described in this section produce two
quantitative estimates of a PM-10 sampler's performance: The audit
flow-rate percentage difference and the design flow-rate percentage
difference. The audit flow-rate percentage difference determines the
accuracy of the sampler's indicated flow rate by comparing it with a
flow rate from the audit transfer standard. The design flow-rate
percentage difference determines how closely the sampler's flow rate
matches the inlet design flow rate under normal operational
conditions.

    It is not clear to EPA why the commenter believes the FRM
monitoring network operations do not meet EPA requirements. As
discussed previously, the PM-10 SLAMS monitoring network meets EPA's QA
requirements, including the requirement for independent field audits.
See also Response to Comment 13 above.
    Comment 18: The commenter states that neither EPA nor the District
addresses the violations recorded at the Bakersfield BAM monitor. No
attempt is made to discredit the data coming from that BAM monitor and
no rational basis is provided by EPA for completely disregarding those
data.
    Response: The Bakersfield Golden State Highway BAM monitor never
recorded any violations of the NAAQS. As explained above, the
Bakersfield Golden State Highway automated equivalent method analyzers
recorded three exceedances since the District began operation of these
monitors at the site in July 28, 2005 while sampling every day.
According to 40 CFR part 50, appendix K, this does not constitute a
violation of the NAAQS and therefore we did not discuss it in our
proposal. Since there are no violations at this BAM monitor, EPA did
not need to determine whether the data was usable in making the
attainment determination for the SJV. See response to comment 15.
    Comment 19: The commenter states that EPA does not justify ignoring
data from the three tapered element oscillating microbalance (TEOM)
monitors that were operated in the Valley during the 2003-2005 time
period.
    Response: The three TEOM monitors operated during the 2003-2005
period were located at Fresno 1st Street, Stockton Hazelton Street, and
Corcoran Patterson Avenue. The TEOMs at Fresno and Stockton were
operated by CARB as special purpose monitors that supplement the SLAMS
high volume FRM samplers. The Corcoran TEOM was operated by the
District, also as a special purpose monitor. In addition, as

discussed in response to comment 15 above, the District now operates
TEOMs at its Tracy, Bakersfield-Golden State Hwy. and Corcoran
monitoring sites.
    CARB has submitted and certified the TEOM data from the Stockton
site to EPA's AQS database up to the date June 28, 2005, which is when
CARB discontinued the operation of this TEOM. During the 2003 to 2005
period, the TEOM at Stockton recorded a single exceedance of the 24-
hour NAAQS. Because of its everyday sampling schedule, this single
exceedance at Stockton does not constitute a violation of the NAAQS.
See response to comment 15.
    No data from any other TEOMs operating in the San Joaquin Valley
PM-10 network has been submitted to AQS. However, EPA has obtained data
from these TEOMs from 2003-2005 as well as a portion of 2006 and these
data show no violations of the PM-10 NAAQS have been recorded for this
period.
    As discussed above in response to comment 15 EPA is aware of TEOMs
currently operating at four monitoring sites in the San Joaquin PM-10
network: Bakersfield-Golden State Highway, Corcoran, Fresno 1st Street
and Tracy. Two of these TEOMs, Fresno and Tracy,\30\ recorded no
exceedances of the NAAQS. Two other TEOMS, Bakersfield and Corcoran,
recorded exceedances on September 22, 2006, which, as noted above, is a
date associated with a high wind and fire event. This is the only
exceedance day we are aware of for these TEOMS. All data EPA has
received from the District and CARB collected by BAMs and TEOMs have
been included in the Docket. Thus, in sum these TEOM monitors would not
show that the area is in violation of the standard.
---------------------------------------------------------------------------

    \30\ The Tracy TEOM began monitoring on October 1, 2006.
---------------------------------------------------------------------------

    Comment 20: The commenter states that EPA must also consider all
publicly available data, including ``data available from other sources
including those special purpose monitors operated by third parties''
(1997 Seitz memo) and that EPA has not made any assertion regarding
data from third party monitors. If such data exists, EPA must consider
it or must explain why it is reasonable to exclude this information.
    Response: The commenter has not provided any data from any so-
called ``third party monitors.'' Nor is EPA aware of any data available
from third parties that meets our regulatory requirements and could be
used in this action.
    Comment 21: The commenter maintains that ``[t]hese continuous
monitors demonstrate an ongoing PM-10 problem in the Valley'' and that
monitoring professionals within EPA and CARB know that these monitors
provide the most accurate, realistic picture of Valley air quality.
These monitors are used for detailed air quality studies, public health
alerts, and modeling in the State implementation plan. In fact, CARB
performed a comparison study of BAM technology versus FRM technology
and found that, far from the dramatic picture the District paints of
wildly inaccurate monitor readings, BAM monitors enjoy ``good
precision'' and may actually capture certain semi-volatile pollutants
that FRM monitors do not.
    Response: The CARB study cited by the commenter is one that
compared PM-2.5 BAM and PM-2.5 FRM performance. PM-2.5 is a different
pollutant from PM-10 even though both are based on particulates, but
the type of particles that make up PM-10 versus PM-2.5 can be very
different. The issue for EPA is not what type of equipment was used by
the State or District to collect PM-10 data, but whether the data and
the monitors used to collect it met EPA's quality assurance
requirements.
    The BAM monitor is a designated Federal equivalent method for PM-
10. If the District had performed the appropriate QA procedures, as
discussed elsewhere in this action, EPA would have considered the BAM
data when making our attainment finding.
    Comment 22: If EPA now wants to ignore and dismiss this data, EPA
needs to provide a reasonable explanation, not hide behind
technicalities it picks and chooses in order to support its political
agenda. EPA's proposal provides none of the necessary technical
analysis needed to give this reasonable basis. As a result, commenters
are unable to provide meaningful comment on that basis. EPA must
prepare a supplemental notice of proposed rulemaking to provide the
missing analysis.
    Response: EPA did provide a reasonable explanation for not using
the BAM data in its decision to find that the SJV has attained the PM-
10 NAAQS. As set forth in the proposal to this action, the BAM data did
not meet our QA/QC requirements. The SLAMS data from the FRM network
met our requirements. Thus EPA believes it does not need to prepare a
supplemental notice of proposed rulemaking because the substance of its
analysis was adequately included in its proposal.

G. Representativeness of Data

    Comment 23: The commenter states that ``EPA should determine
whether conditions of [the] last three years are typical'' or ``whether
conditions during this period are representative of normal conditions
for the Valley.'' The commenter points to a 1997 progress report and
statements made by the District recommending caution regarding any
improvements in monitored PM-10 levels in the SJV. The commenter also
cites a Pittsburgh-Beaver Valley, Pennsylvania area rule (61 FR 28061,
28063) in which EPA revoked an attainment determination and pointed to
the varied number of exceedances over the preceding years and the
failure of the area to adequately reduce emissions as grounds for not
dismissing new data indicating a continued pollution problem. Finally,
the commenter notes that the District recently argued to EPA and the
Ninth Circuit Court of Appeals that there was absolutely no way the SJV
could attain the PM-10 standard by 2006, further emphasizing the need
to evaluate whether the conditions of the last few years are an
anomaly.
    Response: The requirement to determine that clean air is the result
of permanent and enforceable emissions reductions is a criterion for
the redesignation of an area to attainment under CAA section
107(d)(3)(E).\31\ This criterion need not be met for a determination of
attainment or for the suspension of the associated RFP, attainment
demonstration, and/or contingency measure requirements.
---------------------------------------------------------------------------

    \31\ The redesignation of an area to attainment under CAA
section 107(d)(3)(E) is a separate process from a finding of
attainment. Unlike an attainment finding where we need only
determine that the area has had the prerequisite number of clean
years, a redesignation requires multiple determinations. Under
section 107(d)(3)(E) these determinations are: (1) We must
determine, at the time of the redesignation, that the area has
attained the relevant NAAQS; (2) The state must have a fully
approved SIP for the area; (3) We must determine that the
improvements in air quality are due to permanent and enforceable
reductions in emissions resulting from implementation of the SIP and
applicable federal regulations and other permanent and enforceable
reductions; (4) We must have fully approved a maintenance plan for
the area under section 175A; (5) The state must have met all the
nonattainment area requirements applicable to the area.
---------------------------------------------------------------------------

    That aside, we believe that the attainment determination itself
addresses in part the concern about unusually favorable meteorological
conditions. We have long recognized that yearly variations in
meteorological conditions can have a profound effect on ambient PM-10
concentrations. In setting the PM-10 standards in 1987, we changed the
form of the 24-hour and annual standards to a statistical form which is
based on exceedances and annual averages over 3 consecutive years. EPA
stated that ``[t]he problem of

year-to-year variability is * * * reduced by averaging three years of
data.'' See proposed and final actions promulgating the PM-10 standards
at 49 FR 10408, 10413 (March 20, 1984) and 52 FR 24635, 24639-24641
(July 1, 1987).
    In the case of the Pittsburgh-Beaver Valley, Pennsylvania area rule
(61 FR 28061, 28063), EPA revoked an attainment determination due to
violations of the ozone NAAQS that occurred after the determination was
made. In response to a comment suggesting that EPA should ignore the
violations due to year-to-year variability, EPA stated that ``[b]ecause
the area has not adequately reduced its VOC and NOX
emissions, it is subject to ozone exceedances whenever meteorological
conditions are conducive to ozone formation.'' The commenter on our
proposed attainment determination for the SJV implies that because EPA
recognizes year-to-year variability in data and that both the SJV and
the Pittsburgh-Beaver Valley areas had variable data over the years,
EPA should address whether conditions were typical or normal before
making the attainment determination for SJV. However, the SJV has 3
recent years (2003-2005) of clean data whereas the Pittsburgh-Beaver
Valley area did not have clean data at the time of the attainment
determination revocation.
    The 2003 PM-10 Plan demonstrates attainment of the PM-10 standards
by 2010. 69 FR 30006. The 2003 PM-10 Plan's attainment demonstration is
based on air quality modeling of emissions reductions from State and
District measures. As such it is a prediction of what ambient
conditions will be in the future. In contrast, as discussed above, a
determination of attainment, based on monitored air quality data,
reflects actual ambient conditions over a three year period. Given the
margin of error in air quality modeling, particularly for PM-10, a
disparity between modeling and monitored data is not unusual. While, as
stated above, the three year requirement does to a certain extent
address anomalous meteorological conditions, an analysis of whether ``*
* * the improvements in air quality are due to permanent and
enforceable reductions in emissions * * *'' is primarily addressed as a
prerequisite for redesignation of an area to attainment under CAA
section 107(d)(3)(E) to ensure that reductions will remain in place
even where weather variations occur.
    Finally, the commenter also points to statements made in a SJV 1997
PM-10 progress report in which the District discusses the favorable
meteorological conditions (i.e., rain) during 1993-1998 which may or
may not have led to fewer PM-10 exceedances. However, our PM-10
attainment determination is based on the years 2003-2005. Again,
whether or not 2003-2005 was a period of normal conditions and whether
the SJV could continue to demonstrate attainment under all predicted
weather conditions is a criterion that must be addressed in connection
with a redesignation, but not for an attainment determination.
    Comment 24: The commenter contends that EPA's decision is not
reasonable, and that EPA has never attempted to make an attainment
determination based on so few years of monitoring and in the face of
such countervailing evidence. The commenter further contends that EPA
is motivated by a desire to avoid legal deadlines.
    Response: As set forth above, in responses to comments, EPA
believes that its decision is a reasonable one, based on three complete
years of quality-assured data, and supported by the evidence. Moreover,
the commenter is wrong in alleging that EPA has never before based a
determination of attainment on three years of data. EPA has in numerous
instances done so. See, for example, 60 FR 37366 (July 20, 1995) (Grand
Rapids), 66 FR 1925 (January 10, 2001) and 66 FR 53094 (October 19,
2001) (Pittsburgh-Beaver Valley), 66 FR 27583 (May 17, 2001) and 66 FR
53655 (October 23, 2001) (Louisville), 68 FR 25418, 25429 (May 12,
2003) (St. Louis), 69 FR 21717 (April 22, 2004) (Bay Area). The
commenter's speculation as to EPA's motivation is irrelevant. EPA's
determination that the SJV area has attained the standards is, as shown
elsewhere in this notice, supported by quality assured data and in
compliance with statutory and regulatory requirements.

H. Other Comments

    Comment 25: Approximately two thousand commenters sent letters (all
via e-mail except one via postcard) to EPA stating that they are
concerned about the attainment determination. All commenters were
specifically concerned about the air quality in the Valley, about a
monitoring network that reads only once every six days and does not
account for the agriculture-heavy west side and about EPA ignoring
violations from monitors. Commenters were also concerned that the
finding would relieve EPA and the District of obligations to continue
to address the particulate matter problem and air pollution problems in
general. Many commenters provided personal accounts of health issues
(e.g., asthma, difficulty breathing, hospital visits, use of inhalers)
while living in the San Joaquin Valley.
    Response: As noted above, the comments of individual citizens
raised many of the same issues set forth in the comments of
Earthjustice, and EPA has addressed those comments in the context of
its responses to Earthjustice. Like the commenters, EPA is concerned
about the air quality of the SJV and the health of its residents. The
SJV is a nonattainment area for ozone as well as for PM-10 and PM-2.5.
In general in the SJV, ozone is a summertime problem and PM is a fall
and wintertime problem. EPA has invested significant resources in
developing clean air plans and measures to reduce the air pollution in
the SJV to levels considered safe by Federal standards. EPA's
determination that the SJV has attained the PM-10 standards does not in
any way relieve the District, State, or EPA of any of the strategies
currently in place to achieve cleaner air.\32\ CARB and the District
have stated this in their request for an attainment determination (May
8, 2006 letter to Wayne Nastri, Regional Administrator, EPA Region 9,
from Catherine Witherspoon, Executive Officer, CARB) and the District
has restated it in its comment letter in connection with this
rulemaking (August 14, 2006 letter to Doris Lo, EPA Region 9, from
Seyed Sadredin, Executive Director/Air Pollution Control Officer, San
Joaquin Valley Unified Air Pollution Control District). The measures
and commitments approved by EPA in the 2003 PM-10 Plan continue to be
implemented, and EPA expects more strategies and measures that will
lead to further reductions as the District and CARB develop plans to
meet the more stringent PM-2.5 NAAQS and the 8-hour ozone standard.
---------------------------------------------------------------------------

    \32\ In addition, CARB or the District cannot revise their SIP
to drop any SIP-approved strategies unless they can demonstrate that
the revision will not ``* * * interfere with any applicable
requirement concerning attainment and reasonable further progress *
* * or any other applicable requirement * * *'' of the Act. See
section 110(l) of the CAA.
---------------------------------------------------------------------------

    Furthermore, while some monitors may only take ambient air quality
readings once every six days, the data from these monitors is adjusted
to account for the days that are not monitored. Thus, as a simplified
example, if a one in six day monitor records an exceedance of the PM-10
NAAQS, that exceedance must be multiplied by six to account for the
days it did not monitor. In addition, EPA disagrees with the
commenter's assertion that the agricultural sources of the western side
of the Valley are not accounted for. The Corcoran monitoring

site does monitor emissions from agricultural sources and is thus
representative of air quality levels in the western portion of the
Valley. In addition, the agricultural regulations for the SJV are
applicable to sources throughout the Valley, including those in the
western portion of the SJV. Finally, EPA does not ignore actual
violations, but as discussed in response to comments above, certain
data purporting to show exceedances of the PM-10 standard may be
excluded in determining whether an actual violation has occurred for
various reasons, including the need to assure that data are reliable
and accurate.
    Comment 26: One commenter sent pictures of dust from combines on an
agricultural field and stated that incentives were needed to help keep
the dust on the ground. The commenter also discussed dusty conditions
during the almond and cotton harvest in November 2005 throughout the
SJV. The commenter is a farmer and believes that farmers are doing a
good job of keeping dust (laden with pesticides and other residues) on
the ground during the growing season because it benefits the farmer,
but that there are no incentives for controlling the dust from roads.
Finally, the commenter is concerned that even with the new NAAQS in the
future, the attainment determination will lead to relaxation of
enforcement and monitoring when more progressive and innovative steps
are needed.
    Response: The SJV has requirements that control dust from
agricultural sources such as those discussed by the commenter. See
District Rules 4550 and 8081. These requirements cover almond, cotton
and other types of farming operations in the SJV and include measures
that reduce dust from roads. The new more stringent PM-2.5 standards
will lead to additional measures; however, even without these new
standards, because the 24-hour PM-10 standard remains in effect, the
enforcement of measures to reduce PM-10 and monitoring of PM-10 will
still be required (see also above response to comment 14).

III. Final Action

    Based on 2003-2005 quality-assured data meeting the requirements of
40 CFR part 50, appendix K, as well as data showing continued
attainment, EPA is finalizing its determination that the SJV has
attained the 24-hour and annual PM-10 NAAQS. The SJV continues to
attain the PM-10 NAAQS in 2006 based on all available quality assured
data. This action does not constitute a redesignation to attainment
under CAA section 107(d)(3), because we do not yet have an approved
maintenance plan as required under section 175(A) of the CAA or a
determination that the area has met the other CAA requirements for
redesignation. The classification and designation status in 40 CFR part
81 remains serious nonattainment for this area until such time as
California meets the CAA requirements for redesignation of the SJV to
attainment.
    Consistent with the Agency's Clean Data Policy and its
interpretation that the attainment determination suspends certain
requirements as set forth in detail above, EPA is also finalizing its
finding that the contingency measure requirements of CAA section
172(c)(9) no longer apply to the San Joaquin Valley PM-10 nonattainment
area for so long as the area continues to attain the PM-10 NAAQS. If we
subsequently determine, after notice and comment rulemaking in the
Federal Register, that the area has violated the standard (prior to a
redesignation to attainment), the requirement for contingency measures
would once again be applicable.

IV. Effective Date of This Final Action

    The EPA finds that there is good cause for this action to become
effective immediately upon publication because a delayed effective date
is unnecessary due to the nature of this action, which is a
determination, based on air quality data, that certain Act requirements
do not apply for so long as the area continues to attain the standard.
The immediate effective date for this action is authorized under both 5
U.S.C. 553(d)(1) which provides that rulemaking actions may become
effective less than 30 days after publication if the rule ``grants or
recognizes an exemption or relieves a restriction'' and 5 U.S.C.
553(d)(3), which allows an effective date less than 30 days after
publication ``as otherwise provided by the agency for good cause found
and published with the rule.''

V. Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this
action is not a ``significant regulatory action'' and therefore is not
subject to review by the Office of Management and Budget. For this
reason, this action is also not subject to Executive Order 13211,
``Actions Concerning Regulations That Significantly Affect Energy
Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This action
merely makes a determination based on air quality data, suspends
certain requirements, and imposes no additional requirements.
Accordingly, the Administrator certifies that this rule will not have a
significant economic impact on a substantial number of small entities
under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because
this rule does not impose any additional enforceable duty, it 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).
    This rule also does not have tribal implications because it will
not have a substantial direct effect on one or more Indian tribes, on
the relationship between the Federal Government and Indian tribes, or
on the distribution of power and responsibilities between the Federal
Government and Indian tribes, as specified by Executive Order 13175 (65
FR 67249, November 9, 2000). This action also does not have Federalism
implications because it does not have substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government, as specified in Executive Order 13132 (64
FR 43255, August 10, 1999). This action merely makes a determination
based on air quality data and suspends certain requirements, and does
not alter the relationship or the distribution of power and
responsibilities established in the Clean Air Act. This rule also is
not subject to Executive Order 13045 ``Protection of Children from
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23,
1997), because it is not economically significant.
    The requirements of section 12(d) of the National Technology
Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply
because it would be inconsistent with applicable law for EPA, when
determining the attainment status of an area, to use voluntary
consensus standards in place of promulgated air quality standards and
monitoring procedures that otherwise satisfy the provisions of the
Clean Air Act. This rule does not impose an information collection
burden under the provisions of the Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.).
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate,

the U.S. House of Representatives, and the Comptroller General of the
United States prior to publication of the rule in the Federal Register.
A major rule cannot take effect until 60 days after it is published in
the Federal Register. This action is not a ``major rule'' as defined by
5 U.S.C. 804(2).
    Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by December 29, 2006. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this rule for the purposes of judicial
review nor does it extend the time within which a petition for judicial
review may be filed, and shall not postpone the effectiveness of such
rule or action. This action may not be challenged later in proceedings
to enforce its requirements. (See section 307(b)(2).)

List of Subjects

40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Particulate matter, Reporting and recordkeeping
requirements.

40 CFR Part 81

    Environmental protection, Air pollution control, National parks,
Wilderness areas.

    Dated: October 17, 2006.
Laura Yoshii,
Acting Regional Administrator, Region 9.
[FR Doc. 06-8902 Filed 10-27-06; 8:45 am]

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[Federal Register: August 19, 2010 (Volume 75, Number 160)]
[Notices]
[Page 51327-51328]
[DOCID:fr19au10-96]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

Aviation Proceedings, Agreements Filed the Week Ending August 7,
2010

    The following Agreements were filed with the Department of
Transportation under the Sections 412 and 414 of the Federal Aviation
Act, as amended (49

U.S.C. 1382 and 1384) and procedures governing proceedings to enforce
these provisions. Answers may be filed within 21 days after the filing
of the application.
    Docket Number: DOT-OST-2010-0198.
    Date Filed: August 3, 2010.
    Parties: Members of the International Air Transport Association.
    Subject: Mail Vote 642--Resolutions: 024a--Establishing Passenger
Fares and Related Charges; 024e--Rules for Payment of Local Currency
Fares (Memo 1578). Intended effective date: 1 December 2010.

Renee V. Wright,
Program Manager, Docket Operations, Federal Register Liaison.
[FR Doc. 2010-20577 Filed 8-18-10; 8:45 am]
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[Federal Register: November 9, 2007 (Volume 72, Number 217)]
[Notices]
[Page 63577-63578]
[DOCID:fr09no07-62]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. AD08-2-000]

Interconnection Queuing Practices; Notice of Technical Conference

November 2, 2007.
    Take notice that a staff-led technical conference will be held on
Tuesday, December 11, 2007 from approximately 9 a.m. to 4 p.m. (EST) in
the Commission Meeting Room of the Federal Energy Regulatory Commission
at 888 First Street NE., Washington, DC 20426. Commissioners may
attend. An additional notice of this technical conference will be
issued at a later date finalizing the agenda.
    In 2003, the Commission issued Order No. 2003 to standardize the
agreements and procedures related to the interconnection of large
generating facilities.\1\ The industry has now had four years of
experience with the management of interconnection queues since the
issuance of Order No. 2003, during which time a number of queue-related
issues have arisen. The Commission understands that a large amount of
new generation is planned to be added to the nation's elecrtric system
in the near future, including unprecedented levels of renewable
generation that may face queue-related challenges in addition to those
faced by traditional generation.
---------------------------------------------------------------------------

    \1\ Standardization of Generator Interconnection Agreements and
Procedures, Order No. 2003, 18 CFR Sec.  35, FERC Stats. & Regs. ]
31,146 (2003), order on reh'g, Order No. 2003-A, FERC Stats. & Regs.
] 31,160, order on reh'g, Order No. 2003-B, FERC Stats. & Regs. ]
31,171 (2004), order on reh'g, Order No. 2003-C, FERC Stats. & Regs.
] 31,190 (2005), aff'd sub nom. Nat'l Ass'n of Regulatory Util.
Comm'rs v. FERC, 475 F.3d 1277 (D.C. Cir. 2007). See also
Standardization of Small Generator Interconnection Agreements and
Procedures, Order No. 2006, FERC Stats. & Regs. ] 31,180, order on
reh'g, Order No. 2006-A, FERC Stats. & Regs. ] 31,196 (2005), order
granting clarification, Order No. 2006-B, FERC Stats. & Regs. ]
31,221 (2006), appeal pending sub nom. Consol. Edison Co. of N.Y.,
Inc. v. FERC, Nos. 06-1275, et al. (D.C. Cir. filed July 14, 2006
and later); Interconnection for Wind Energy, Order No. 661, FERC
Stats. & Regs. ] 31,186 (2005), order on reh'g, Order No. 661-A,
FERC Stats. & Regs. ] 31,198 (2005).
---------------------------------------------------------------------------

    Through this conference, Commission staff seeks information as to
any queue issues that may have arisen since issuance of Order No. 2003
and solutions that may have been developed or proposed to deal with
those queue issues. Staff wishes to explore any existing practices that
have proven effective in addressing interconnection queue problems
experienced by both traditional and renewable generation.
    Commission staff is now soliciting nominations for speakers at the
technical conference. Persons wishing to nominate themselves as
speakers should do so using the following electronic link: https://www.ferc.gov/whats-new/registration/inter-queuing-practices-12-11-speaker-form.asp.
 Such nominations must be made before the close of

business on Friday, November 15, 2007, so that an agenda for the
technical conference can be drafted and published. Speakers may propose
specific topics that they believe should be addressed at the
conference.
    Transcripts of the conference will be immediately available from
Ace Reporting Company<PHONE_NUMBER> or 1-800-336-6646) for a fee. They
will be available for the public on the Commission's eLibrary system
seven calendar days after FERC receives the transcript.
    A free webcast of this event will be available through http://www.ferc.gov.
 Anyone with Internet access who desires to view this

event can do so by navigating to http://www.ferc.gov's Calendar of Events and

locating this event in the Calendar. The event will contain a link to
its Web cast. The Capitol Connection provides technical support for the
free Web casts. It also offers access to this event via television in
the DC area and via phone bridge for a fee. If you have any questions,
visit http://www.CapitolConnection.org or contact

Danelle Perkowski or David Reininger at<PHONE_NUMBER>.
    FERC conferences are accessible under section 508 of the
Rehabilitation Act of 1973. For accessibility accommodations please
send an e-mail to<EMAIL_ADDRESS>or call toll free 1-866-208-
3372 (voice) or<PHONE_NUMBER> (TTY), or send a FAX to<PHONE_NUMBER> with
the required accommodations.
    For further information about these conferences, please contact:
Sarah McKinley, Office of External Affairs, 888 First Street, NE.,
Washington, DC 20426,<PHONE_NUMBER><EMAIL_ADDRESS>
Kimberly D. Bose,
Secretary.
[FR Doc. E7-22017 Filed 11-8-07; 8:45 am]

BILLING CODE 6717-01-P