[Federal Register: December 16, 2009 (Volume 74, Number 240)]
[Notices]
[Page 66711-66715]
[DOCID:fr16de09-108]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61136; File No. SR-CBOE-2009-022]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of Amendment No. 1 and Order Granting
Accelerated Approval of Proposed Rule Change, as Modified by Amendment
No. 1, To List and Trade S&P 500 Dividend Index Options

December 10, 2009.

I. Introduction

    On March 25, 2009, the Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to list and trade cash-settled
options that overlie the S&P 500 Dividend Index. The proposed rule
change was published for comment in the Federal Register on April 6,
2009.\3\ On May 4, 2009, the Commission received one comment on the
proposal.\4\ On May 19, 2009, the Exchange responded to the comment
letter \5\ and filed Amendment No. 1 to the proposed rule change. The
Commission is publishing this notice to solicit comments on the
proposed rule change, as modified by Amendment No. 1, and
simultaneously is approving the proposed rule change, as modified by
Amendment No. 1, on an accelerated basis.
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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. 59667 (March 31,
2009), 74 FR 15528 (``Notice'').
    \4\ See e-mail from Julian E. Hammar, Assistant General Counsel,
Commodity Futures Trading Commission (``CFTC''), to James Eastman,
Chief Counsel and Associate Director, and Elizabeth King, Associate
Director, Division of Trading and Markets, Commission, dated May 4,
2009 (``CFTC Comment Letter'').
    \5\ See letter from Jenny L. Klebes, Senior Attorney, CBOE, to
Elizabeth M. Murphy, Secretary, Commission, dated May 19, 2009.
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II. Description of the Proposal

    CBOE proposes to list and trade cash-settled, European-style
options that overlie the S&P 500 Dividend Index.

Index Design

    The S&P 500 Dividend Index represents the accumulated ex-dividend
amounts of all S&P 500 Index component securities over a specified
accrual period. Each day Standard & Poor's calculates the aggregate
daily dividend totals for the S&P 500 Index

component securities, which are summed over any given calendar quarter
and are the basis of the S&P 500 Dividend Index. On any given day, the
index dividend is calculated as the total dividend value for all
constituents of the S&P 500 Index divided by the S&P 500 Index divisor.
The total dividend value is calculated as the sum of dividends per
share multiplied by the shares outstanding for all constituents of the
S&P 500 Index that are trading ``ex-dividend'' on that day.
    The Exchange will set the accrual period for S&P 500 Dividend Index
options at listing (e.g., quarterly, semi-annually, annually), which
will be reset to zero at the end of the specified accrual period.\6\ A
One-Year S&P 500 Dividend Index will be expressed in S&P 500 Index
points and will reset to zero at the end of each annual accrual
period.\7\
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    \6\ See Amendment No. 1. In its original proposal, CBOE
described that the S&P 500 Dividend Index represents the accumulated
ex-dividend amounts of all S&P 500 Index (dividend paying) component
securities over a specified quarterly accrual period and that the
index is reset to zero at the end of each quarterly accrual period.
    \7\ Standard & Poor's has not committed to creating a One-Year
S&P 500 Dividend Index. In the event that S&P does not calculate the
index, the Exchange plans to calculate an annual index from
published values of the quarterly S&P 500 Dividend Index.
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    The S&P 500 Dividend Index is currently calculated by Standard &
Poor's and is disseminated by Standard and Poor's once per day.\8\ The
S&P 500 Dividend Index is reported in absolute numbers (e.g., 3, 5, 7),
and the Exchange proposes to trade option contracts on the S&P 500
Dividend Index level with an applied scaling factor of 10.\9\ Once
daily, CBOE will disseminate the underlying S&P 500 Dividend Index
value with the applied scaling factor of 10 through the Options Price
Reporting Authority (``OPRA'') and/or one or more major market data
vendors.
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    \8\ The daily values can be accessed on Bloomberg under the
symbol: SPXDIV.
    \9\ For example, where the S&P 500 Dividend Index is 3, the
underlying will have an index value of 30 (3 x 10).
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Options Trading

    The exercise-settlement value for S&P 500 Dividend Index options
will be the S&P 500 Dividend Index that is calculated by Standard &
Poor's with an applied scaling factor. The underlying S&P Dividend
Index will be quoted in decimals and one point will be equal to
$100.\10\ The minimum tick size for options trading at or below 3.00
will be 0.05 point ($5.00) and for all other series, it will be 0.10
($10.00).
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    \10\ The contract multiplier will be $100.
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    The Exchange proposes to list series at 1 point ($1.00) or greater
strike price intervals if the strike price is equal to or less than 200
scaled index points on S&P 500 Dividend Index options. When the strike
price exceeds 200 scaled index points, strike price intervals will be
no less than 2.5 points.
    Initially, the Exchange will list in-, at- and out-of-the-money
strike prices and may open for trading up to five series above and five
series below the calculated forward value of the S&P 500 Dividend
Index, which is the anticipated value of the S&P 500 Dividend Index at
the end of the specified accrual period.\11\ In addition, either in
response to customer demand or as calculated forward value of the S&P
500 Dividend Index moves from the initial exercise prices of options
and LEAPs series that have been opened for trading, the Exchange may
open for trading up to an additional twenty series. The Exchange will
not be permitted to open for trading series with 1 point ($1.00)
intervals within 0.50 of an existing 2.5 point ($2.50) strike price
with the same expiration month. The Exchange will not be permitted to
list LEAPS on S&P 500 Dividend Index options at intervals less than 1
point.
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    \11\ See Amendment No. 1. In its original proposal, CBOE
proposed to use the related S&P 500 Dividend Index futures price as
the level for setting strikes. Because no related futures contract
is currently trading, CBOE now proposes to use the calculated
forward value of the S&P 500 Dividend Index. The Exchange states
that the calculated forward value of the S&P 500 Dividend Index is a
market derived estimate based on things such as: (1) The historical
dividend policy of the components stocks on the S&P 500 Index, (2)
the anticipated date of dividend payment, and (3) the expected start
or increase of a dividend payment or the expected elimination or
decrease of a dividend payment.
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    The Exchange also proposes to add new Interpretation and Policy .13
to Rule 5.5, Series of Option Contracts Open for Trading, which will be
an internal cross reference stating that the intervals between strike
prices for S&P 500 Dividend Index option series will be determined in
accordance with proposed new Interpretation and Policy .01(h) to Rule
24.9.

Exercise and Settlement

    The proposed options will expire on the Saturday following the
third Friday of the expiring month. Trading in the expiring contract
month will normally cease at 3:15 p.m. Chicago time on the last day of
trading (ordinarily the Thursday before expiration Saturday, unless
there is an intervening holiday). When the last trading day is moved
because of an Exchange holiday (such as when CBOE is closed on the
Friday before expiration), the last trading day for expiring options
will be Wednesday.
    Exercise will result in delivery of cash on the business day
following expiration. S&P 500 Dividend Index options will be A.M.-
settled. The exercise-settlement amount will be equal to the difference
between the exercise-settlement value and the exercise price of the
option, multiplied by the contract multiplier ($100).
    If the exercise settlement value is not available or the normal
settlement procedure cannot be utilized due to a trading disruption or
other unusual circumstance, the settlement value will be determined in
accordance with the rules and bylaws of the OCC.

Surveillance

    The Exchange states that it will use the same surveillance
procedures currently utilized for each of the Exchange's other index
options to monitor trading in S&P 500 Dividend Index options. The
Exchange further represents that these surveillance procedures shall be
adequate to monitor trading in options on these option products. For
surveillance purposes, the Exchange will have complete access to
information regarding trading activity in the securities the
accumulated ex-dividend amounts of which are represented by the S&P 500
Dividend Index (i.e., S&P 500 Index component securities).

Position Limits

    The Exchange is not proposing to establish any position limits for
S&P 500 Dividend Index options. Because the S&P 500 Dividend Index
represents the accumulated ``ex-dividend'' amounts of all S&P 500 Index
component securities, the Exchange believes that the position and
exercise limits for these new products should be the same as those for
broad-based index options, e.g., SPX, for which there are no position
limits. S&P 500 Dividend Index options will be subject to the same
reporting and other requirements triggered for other options dealt in
on the Exchange.\12\
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    \12\ See Rule 4.13, Reports Related to Position Limits.
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Exchange Rules Applicable

    Except as modified in this proposed rule change, the rules in
Chapters I through XIX, XXIV, XXIVA, and XXIVB will equally apply to
S&P 500 Dividend Index options.
    S&P 500 Dividend Index options will be margined as ``broad-based
index'' options, and under CBOE rules, especially, Rule 12.3(c)(5)(A),
the margin requirement for a short put or call shall be 100% of the
current market value of the contract plus up to 15% of the aggregate
contract value. Additional

margin may be required pursuant to Exchange Rule 12.10.
    The Exchange proposed to designate S&P 500 Dividend Index options
as eligible for trading as Flexible Exchange Options as provided for in
Chapters XXIVA (Flexible Exchange Options) and XXIVB (FLEX Hybrid
Trading System).

Capacity

    CBOE represents that it believes the Exchange and OPRA have the
necessary systems capacity to handle the additional traffic associated
with the listing of new series that will result from the introduction
of S&P 500 Dividend Index options.

III. Summary of Comments

    The CFTC Comment Letter raised several concerns the CFTC staff has
regarding the proposed rule change. First, the CFTC staff questioned
whether the S&P 500 Dividend Index is an index composed of securities.
Specifically, the CFTC staff asserted that a securities index is
traditionally based on a weighted average of constituent stock prices,
while the S&P 500 Dividend Index represents accrued dividend amounts.
As such, the CFTC staff suggested that the S&P 500 Dividend Index may
be more akin to an event contract than to a securities index.
    The Exchange disagrees with the CFTC staff's comment. The CBOE
notes that the S&P 500 Dividend Index measures stock price changes of
S&P 500 Index component securities on their respective ex-dividend
dates. In addition, as described by the Exchange, the S&P 500 Dividend
Index is calculated using the ex-dividend amount of the same set of
component securities, same shares outstanding, same capitalization
weighting methodology and the same index divisor that is used to
calculate the S&P 500 Index. Based on these factors, the Exchange
concluded that its proposed product is an option based on a security
``including any interest therein or based on the value thereof'' as
defined under Sec.  2(a)(1) of the Securities Act of 1933 and Sec.
3(a)(10) of the Act.
    Second, the CFTC staff noted that while CBOE's proposal provides
that the Exchange will list strike prices based on the related S&P 500
Dividend Index futures contract, no such futures contract currently
exists. In Amendment No. 1, the Exchange modified its methodology for
setting strike prices. As discussed above, rather than basing strike
prices on the S&P 500 Dividend Index futures contract, which does not
exist, the Exchange proposes to use the calculated forward value of the
S&P 500 Dividend Index at the end of the specified accrual period as
the measure for setting strikes.
    Finally, the CFTC Comment Letter expressed a concern regarding the
Exchange's surveillance of the proposed product for manipulation. In
particular, the CFTC staff questioned the Exchange's assertion that it
will have access to information regarding trading in the underlying
securities, stating that the S&P 500 Dividend Index represents accrued
dividends, which are determined by the boards of directors of the
constituent securities. In response, the Exchange represented that it
has adequate tools in place, such as large options positions reports to
surveil for market manipulation and will continue to use the same
surveillance procedures currently utilized for each of the Exchange's
other index options to monitor trading in S&P 500 Dividend Index
options. In addition, the CBOE noted that it shares its specific
surveillance procedures with the Commission and that as a member of the
Intermarket Surveillance Group (``ISG''), the Exchange is able to
obtain information from the exchanges listing the issuers in the S&P
500 Dividend Index pertaining to specific issuers. The Exchange may
also obtain from the exchanges and FINRA, the necessary information
pertaining to trading in the stock comprising the index.

IV. Discussion

    The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\13\
Specifically, the Commission finds that the proposal is consistent with
Section 6(b)(5) of the Act,\14\ which requires, among other things,
that the rules of a national securities exchange be designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
The Commission believes that CBOE's proposal gives options investors
the ability to make an additional investment choice in a manner
consistent with the requirements of Section 6(b)(5) of the Act.\15\
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    \13\ 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).
    \14\ 15 U.S.C. 78f(b)(5).
    \15\ 15 U.S.C. 78f(b)(5).
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    As a threshold matter, the Commission finds that the S&P 500
Dividend Index Options proposed by CBOE are securities. Section
3(a)(10) of the Act \16\ defines security to include, in part, ``any
put, call, straddle, option or privilege on any security, certificate
of deposit, or group or index of securities (including any interest
therein or based on the value thereof).'' \17\ As the Commission has
previously noted, ``[t]he concept of an `interest in' a security
plainly includes rights generating a pecuniary interest in a security,
such as the right to a dividend payout or bond (coupon) payment.'' \18\
Accordingly, options on the value of dividends declared by the issuers
of component securities of a group or index of securities are options
on an interest in, or based on the value of an interest in, that group
or index of securities.
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    \16\ 15 U.S.C. 78c(a)(10).
    \17\ In determining whether a derivative is a security, the
Commission and the courts have looked to the economic reality of the
product. See Caiola v. Citibank, N.A., New York, 295 F.3d 312, 325
(2d Cir. 2002), quoting United Housing Foundation v. Foreman, 421
U.S. 837, 848 (1975) (``In searching for the meaning and scope of
the word `security' * * * the emphasis should be on economic
reality''). Construing the definition of a security in this manner
permits the Commission and the courts ``sufficient flexibility to
ensure that those who market investments are not able to escape the
coverage of the Securities Acts by creating new instruments that
would not be covered by a more determinate definition.'' Reves v.
Ernst & Young, 494 U.S. 56, 63 n.2 (1990).
    \18\ Exchange Act Release No. 55781 (June 6, 2007), 72 FR 32372,
32376 (June 12, 2007) (emphasis added).
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    The S&P 500 Dividend Index Option is a cash-settled option based on
the value of the dividends of the S&P 500 securities.
    If a dividend is declared by the issuer of a component security of
the S&P 500 Index, the value of the S&P 500 Dividend Index increases.
Upon expiration of an option, a buyer of a call option on the S&P 500
Dividend Index will receive (and the seller of the call option will
pay) cash equal to the difference between the value of the index and
the strike price of the option, if the index value exceeds the strike
price of the option. If the value of the index exceeds the strike price
of the option, the option seller makes a payment and the option buyer
receives a payment. In other words, the S&P 500 Dividend Index Option
payout is based on the dividends paid by issuers of the component
securities of the S&P 500 Index.
    The value of the dividends of the securities composing the S&P 500
Index is calculated based on price changes of such securities resulting
solely from the distribution of ordinary cash dividends, multiplied by
the number of float adjusted shares outstanding and divided by the S&P
500 Index divisor.

    The Commission understands that, prior to its ``ex-dividend'' date,
the component security's price reflects the right to receive the
dividend amount declared by the issuing company. As of the ex-dividend
date, the component security trades without the right to receive that
dividend payment. The component security's listing exchange makes
internal price adjustments and notifies data vendors and other parties
of the per share amount of the dividend for informational purposes, in
order to ensure that the reported ``net change'' from the previous
closing price excludes the drop in share value that results from the
dividend payment.
    The Commission understands that, as it pertains to the S&P 500
Dividend Index, such price adjustments will be equal to the amount of
the component securities' ordinary cash dividends. Therefore, the S&P
500 Dividend Index Options are, in effect, options on the accumulated
ex-dividend adjustments to the prices of the weighted index component
securities.
    For these reasons, the Commission finds that S&P 500 Dividend Index
Options are options on interests in, or based on the value of interests
in, a group or index of securities and, therefore, are securities under
Section 3(a)(10) of the Act.\19\
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    \19\ 15 U.S.C. 78c(a)(10).
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    Further, the Commission believes that the listing rules proposed by
CBOE for S&P 500 Dividend Index options are reasonable and consistent
with the Act. The S&P 500 Dividend Index Options will provide a
mechanism for purchasers to hedge their exposure to changes in the
dividend payment policies of issuers of securities that compose the S&P
500 Dividend Index.
    The Commission believes that permitting $1.00 strike price
intervals for S&P 500 Dividend Index options if the strike price is
equal to or less than 200 scaled index points will provide investors
with added flexibility in the trading of these options and further the
public interest by allowing investors to establish positions that are
better tailored to meet their investment objectives. As explained by
CBOE, the S&P 500 Dividend Index will fluctuate around a limited index
value range, and therefore the implementation of $1 strike price
intervals is designed to better serve investors by providing greater
flexibility. Because of this unique characteristic, the Commission
believes that the implementation of $1 strike price intervals for S&P
500 Dividend Index options, within the parameters of the rule, is
appropriate. The Commission also notes that CBOE's proposed use of the
calculated forward value of the S&P 500 Dividend Index for purposes of
adding strike price intervals is a methodology reasonably designed to
reflect the unique properties of the index (in particular, that the
current index level is reset to zero at the end of each accrual
period).
    The Commission also finds that the Exchange's proposal to set the
accrual period for S&P 500 Dividend Index options at the time of
listing is reasonable and consistent with the Act. The Commission
believes that this will provide the Exchange flexibility in designing
the product to meet the needs of market participants to hedge their
exposure to changes in dividend payments of S&P 500 Index stocks.
    The Commission notes that the S&P 500 Dividend Index is currently
calculated and disseminated by Standard and Poor's once per day.
Further, CBOE will disseminate the underlying S&P 500 Dividend Index
value with the applied scaling factor of 10 through OPRA and/or one or
more major market data vendors once daily.
    The Exchange has proposed to establish no position or exercise
limits for S&P 500 Dividend Index options and to require the same
margin as for broad-based index options.\20\ The Commission believes
that CBOE's proposed rules relating to position limits, exercise
limits, and margin requirements are appropriate.
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    \20\ The Exchange's decision to apply its broad-based index
option position and exercise limits and margin requirements to these
new products is unrelated to whether the S&P 500 Dividend Index is a
narrow-based security index under Section 3(a)(55) of the Exchange
Act.
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    The Commission also believes that the Exchange's proposal to allow
S&P 500 Dividend Index options to be eligible for trading as FLEX
options is consistent with the Act. The Commission previously approved
rules relating to the listing and trading of FLEX Options on CBOE,
which gives investors and other market participants the ability to
individually tailor, within specified limits, certain terms of those
options.\21\ The current proposal incorporates S&P 500 Dividend Index
options that trade as FLEX Options into these existing rules and
regulatory framework.
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    \21\ See Securities Exchange Act Release No. 31910 (February 23,
1993), 58 FR 12056 (March 2, 1993).
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    The Commission notes that CBOE represented that it had an adequate
surveillance program to monitor trading of S&P 500 Dividend Index
options and intends to apply its existing surveillance program to
support the trading of these options. As with other securities, there
is a potential risk that a corporate insider may exploit his or her
advance knowledge of changes to an issuer's dividend policy through the
purchase or sale of an S&P 500 Dividend Index Option. In recent years,
the Commission has taken a number of enforcement actions in cases where
insiders executed securities transactions to exploit their knowledge of
changes in issuers' dividend policies.\22\ Accordingly, adequate
surveillance is an important responsibility of the CBOE. The CFTC
Comment Letter took issue with this representation, questioning CBOE's
ability to adequately surveil for manipulation in S&P 500 Dividend
Index options. In its response, the Exchange stated that its access to
information provided by the ISG, coupled with its tools such as large
options positions reports prove more than sufficient for surveillance
of market manipulation, particularly given that the very broad
composition of the S&P 500 Dividend Index would render manipulation of
options on the index to be extremely difficult. The Commission agrees
with CBOE that it should have the ability and resources to adequately
surveil for manipulation in S&P 500 Dividend Index options.
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    \22\ See, e.g., SEC v. David L. Johnson, Civil Action No. 05-CV-
4789 (USDC E.D. Pa.) (Sept. 7, 2005) (consent to permanent
injunction, disgorgement and civil penalty for a person who
allegedly sold shares of an issuer based on inside information of a
dividend cut, and tipped his son to do likewise); SEC v. Barry
Hertz, Civil Action No. 05-2848 (USDC E.D.N.Y.) (Mar. 16, 2007)
(consent to final judgment, including an injunction and two-year bar
from serving as an officer or director of a public corporation, for
a person alleged to have traded on inside information, including
purchasing shares of an issuer while in possession of positive news
of a first time dividend issuance).
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    In approving the proposed rule change, the Commission has also
relied upon the Exchange's representation that it has the necessary
systems capacity to support new options series that will result from
this proposal.
    The Commission finds good cause for approving this proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after publishing notice of Amendment No. 1 in the Federal Register. In
Amendment No. 1, the Exchange: (i) Revised the methodology for setting
strike prices so that strike prices will no longer be based on a
futures product value but rather on the calculated forward value of the
S&P 500 Dividend Index, and (ii) determined that the accrual period for
the S&P 500 Dividend Index options will be set at listing and could be
quarterly, semi-annually, annually, etc. to provide investors and other
market participants with a more flexible product to hedge their
exposure to changes in dividend payments (either up or down) of S&P

500 Index stocks. Thus, the Commission believes that it is appropriate
to allow CBOE to immediately list and trade options on the S&P 500
Dividend Index, providing investors with additional means to manage
their risk exposure and carry out their investment objectives.
Accordingly, the Commission finds good cause, consistent with Section
19(b)(2) of the Act,\23\ to approve the proposal, as modified by
Amendment No. 1, on an accelerated basis.
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    \23\ 15 U.S.C. 78s(b)(2).
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V. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning Amendment No. 1, including whether Amendment No. 1
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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-CBOE-2009-022 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CBOE-2009-022. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, on official business
days between the hours of 10 a.m. and 3 p.m. Copies of the filing also
will be available for inspection and copying at the principal office of
the Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
CBOE-2009-022 and should be submitted on or before January 6, 2010.

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\24\ that the proposed rule change (SR-CBOE-2009-022), as modified
by Amendment No. 1, be, and hereby is, approved on an accelerated
basis.
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    \24\ 15 U.S.C. 78s(b)(2).

    By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-29826 Filed 12-15-09; 8:45 am]

BILLING CODE 8011-01-P


                 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                            WASHINGTON D.C., 20460

                                                      OFFICE OF CHEMICAL SAFETY
                                                       AND POLLUTION PREVENTION

                                       January 31, 2020
MEMORANDUM

SUBJECT:	Aminopyralid Potassium Salt (005219) and Aminopyralid triisopropanolamine (005209) Pesticide Use and Usage Reports in Support of Registration Review Draft Risk Assessment (DRA)

FROM:	Rafael A. Prieto, Environmental Protection Specialist
            Science Information and Analysis Branch (7503-P)

TO:		Veronica Dutch, Chemical Review Manager
                        Risk Management and Implementation Branch 5
                        Pesticide Re-evaluation Division (7508-P)

This memorandum transmits the pesticide use and usage reports in support of Registration Review Draft Risk Assessment (DRA). The Aminopyralid Potassium Salt (005219) PLUS report is a Refined report, consisting of four (4) Section 3 EPA accepted registrations, containing this ingredient.  The information in these reports is representative of all registered use sites, application methods, and maximum use rates for this active ingredient as of the date of this report. There are no technical and/or manufacturing use products included in this report.

The Aminopyralid triisopropanolamine (005209) PLUS report is a Refined report, consisting of six (6) Section 3 and eleven (11) Special Local Need (SLN) EPA accepted registrations, containing this ingredient.   The information in these reports is representative of all registered use sites, application methods, and maximum use rates for this active ingredient as of the date of this report. There are no technical and/or manufacturing use products included in this report.

This deliverable contains two Pesticide Label Use Summary (PLUS) reports that can be used across the Science Divisions. The reports are intended to promote consistency in review and risk analysis.  The reports are as follows:
 Pesticides Label Use Summary Line by Line Report
 contains non-aggregated use pattern and restriction information, for individual application methods, at the maximum labeled rate for each included product label.
 Maximum Use Scenario Report
 presents an aggregation of use pattern and restriction information for aggregated application methods at the maximum rate across currently registered product labels.

Additionally, there are two reports on pesticide usage statistics included in this deliverable. This includes the SIAB Use and Usage Matrix (SUUM) and the Screening-level Usage Analysis (SLUA).  Please see user notes that accompany each report.

For questions, comments and other usage or label use information requests, please contact Steve Jarboe at<PHONE_NUMBER>. Other requests for information may be addressed to: OPP Usage and Label Use<EMAIL_ADDRESS>
ATTACHMENTS:
 PLUS  -  Line by Line Report
 PLUS  -  Maximum Use Scenario Report
 Label Tracking
 (Read Me) New Plus Vocabulary Guide
 SIAB Use and Usage Matrix (SUUM)
 Screening-level Usage Analysis (SLUA)
 Hyperlink to Labels Used to Develop the PLUS Report:
 H:\BEAD-EFED Link\Labels\Aminopyralid CASE\005209 Aminopyralid triisopropanolamine (005209)
 H:\BEAD-EFED Link\Labels\Aminopyralid CASE\005219 Aminopyralid Potassium Salt (005219)


P-20-0183 Sanitized Support Documents Index:
 P-20-0183 Sanitized Premanufacture Notice (linked)
 P-20-0183 Sanitized Determination Document (linked)
 P-20-0183 Sanitized CHEM Report (attached)
 P-20-0183 Sanitized ECO Report (attached)
 P-20-0183 Sanitized ENG Report (attached)
 P-20-0183 Sanitized EXP Report (attached)
 P-20-0183 Sanitized Fate Report (attached)
 P-20-0183 Sanitized HLTH Report_POST-FOCUS FINAL (attached)


[Federal Register Volume 85, Number 201 (Friday, October 16, 2020)]
[Rules and Regulations]
[Pages 65672-65674]
[FR Doc No: 2020-22792]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2020-0676; Product Identifier 2020-NM-085-AD; Amendment
39-21287; AD 2020-21-14]
RIN 2120-AA64

Airworthiness Directives; ATR--GIE Avions de Transport
R[eacute]gional Airplanes

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

ACTION: Final rule.

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

SUMMARY: The FAA is adopting a new airworthiness directive (AD) for all
ATR--GIE Avions de Transport R[eacute]gional Model ATR72 airplanes.
This AD was prompted by reports of main landing gear (MLG) hinge pins
found cracked or thermally abused. This AD requires replacing certain
MLG hinge pins with serviceable parts, or replacing an MLG equipped
with any affected MLG hinge pin with an MLG equipped with serviceable
MLG hinge pins, as specified in a European Union Aviation Safety Agency
(EASA) AD, which is incorporated by reference. The FAA is issuing this
AD to address the unsafe condition on these products.

DATES: This AD is effective November 20, 2020.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of November 20,
2020.

ADDRESSES: For material incorporated by reference (IBR) in this AD,
contact the EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany;
telephone +49 221 8999 000; email<EMAIL_ADDRESS>internet
www.easa.europa.eu. You may find this IBR material on the EASA website
at https://ad.easa.europa.eu. You may view this IBR material at the
FAA, Airworthiness Products Section, Operational Safety Branch, 2200
South 216th St., Des Moines, WA. For information on the availability of
this material at the FAA, call<PHONE_NUMBER>. It is also available in
the AD docket on the internet at https://www.regulations.gov by
searching for and locating Docket No. FAA-2020-0676.

Examining the AD Docket

    You may examine the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-
0676; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this final rule, any comments received, and other information. The
address for Docket Operations is U.S. Department of Transportation,
Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200
New Jersey Avenue SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Shahram Daneshmandi, Aerospace
Engineer, Large Aircraft Section, International Validation Branch, FAA,
2200 South 216th St., Des Moines, WA 98198; telephone and fax 206-231-
3220; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    The EASA, which is the Technical Agent for the Member States of the
European Union, has issued EASA AD 2020-0101, dated May 5, 2020 (``EASA
AD 2020-0101'') (also referred to as the Mandatory Continuing
Airworthiness Information, or ``the MCAI''), to correct an unsafe
condition for all ATR--GIE Avions de Transport R[eacute]gional Model
ATR72 airplanes.
    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by adding an AD that would apply to all ATR--GIE Avions de
Transport R[eacute]gional Model ATR72 airplanes. The NPRM published in
the Federal Register on July 31, 2020 (85 FR 46010). The NPRM was
prompted by MLG hinge pins found cracked or thermally abused. The NPRM
proposed to require replacing certain MLG hinge pins with serviceable
parts, or replacing an MLG equipped with any affected MLG hinge pin
with an MLG equipped with serviceable MLG hinge pins, as specified in
EASA AD 2020-0101.
    The FAA is issuing this AD to address MLG hinge pins subjected to a
non-detected thermal abuse during production, which could lead to
structural failure and consequent collapse of the MLG, resulting in
damage to the airplane and injury to the occupants. See the MCAI for
additional background information.

Comments

    The FAA gave the public the opportunity to participate in
developing this final rule. The FAA received no comments on the NPRM or
on the determination of the cost to the public.

Conclusion

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

Related IBR Material Under 1 CFR Part 51

    EASA AD 2020-0101 describes procedures for replacing certain MLG
hinge pins with serviceable parts, or replacing an MLG equipped with
any affected MLG hinge pin with an MLG equipped with serviceable MLG
hinge pins. This material is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

Costs of Compliance

    The FAA estimates that this AD affects 23 airplanes of U.S.
registry. The FAA estimates the following costs to comply with this AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Cost on U.S.
                          Labor cost                              Parts cost        product         operators
----------------------------------------------------------------------------------------------------------------
4 work-hours x $85 per hour = $340...........................             $ *             $340           $7,820
----------------------------------------------------------------------------------------------------------------
* The FAA has received no definitive data that would enable providing parts cost estimates for the replacements
  specified in this AD.

    According to the manufacturer, some or all of the costs of this AD
may be covered under warranty, thereby reducing the cost impact on
affected individuals. The FAA does not control warranty coverage for
affected individuals. As a result, the FAA has included all known costs
in the cost estimate.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

2020-21-14 ATR--GIE Avions de Transport R[eacute]gional: Amendment
39-21287; Docket No. FAA-2020-0676; Product Identifier 2020-NM-085-
AD.

(a) Effective Date

    This AD is effective November 20, 2020.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to ATR--GIE Avions de Transport R[eacute]gional
Model ATR72-101, -102, -201, -202, -211, -212, and -212A airplanes,
certificated in any category, all manufacturer serial numbers.

(d) Subject

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

(e) Reason

    This AD was prompted by reports of main landing gear (MLG) hinge
pins found cracked or thermally abused. The FAA is issuing this AD
to address MLG hinge pins subjected to a non-detected thermal abuse
during production, which could lead to structural failure and
consequent collapse of the MLG, resulting in damage to the airplane
and injury to the occupants.

(f) Compliance

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

(g) Requirements

    Except as specified in paragraph (h) of this AD: Comply with all
required actions and compliance times specified in, and in
accordance with, European Union Aviation Safety Agency (EASA) AD
2020-0101, dated May 5, 2020 (``EASA AD 2020-0101'').

(h) Exceptions to EASA AD 2020-0101

    (1) Where EASA AD 2020-0101 refers to its effective date, this
AD requires using the effective date of this AD.
    (2) The ``Remarks'' section of EASA AD 2020-0101 does not apply
to this AD.

(i) No Reporting or Returning Parts Requirement

    Although the service information referenced in EASA AD 2020-0101
specifies to submit certain information and to return affected parts
to the manufacturer, this AD does not include those requirements.

(j) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
Large Aircraft Section, International Validation Branch, FAA, has
the authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or responsible Flight
Standards Office, as appropriate. If sending information directly to
the Large Aircraft Section, International Validation Branch, send it
to the attention of the person identified in paragraph (k) of this
AD. Information may be emailed to<EMAIL_ADDRESS>
Before using any approved AMOC, notify your appropriate principal
inspector, or lacking a principal inspector, the manager of the
responsible Flight Standards Office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain instructions from a manufacturer, the instructions must be
accomplished using a method approved by the Manager, Large Aircraft
Section, International Validation Branch, FAA; or EASA; or ATR--GIE
Avions de Transport R[eacute]gional's EASA Design Organization
Approval (DOA). If approved by the DOA, the approval must include
the DOA-authorized signature.

(k) Related Information

    For more information about this AD, contact Shahram Daneshmandi,
Aerospace Engineer, Large Aircraft Section, International Validation
Branch, FAA, 2200

South 216th St., Des Moines, WA 98198; telephone and fax 206-231-
3220; email<EMAIL_ADDRESS>
(l) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (i) European Union Aviation Safety Agency (EASA) AD 2020-0101,
dated May 5, 2020.
    (ii) [Reserved]
    (3) For EASA AD 2020-0101, contact the EASA, Konrad-Adenauer-
Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
<EMAIL_ADDRESS>Internet www.easa.europa.eu. You may find this
EASA AD on the EASA website at https://ad.easa.europa.eu.
    (4) You may view this material at the FAA, Airworthiness
Products Section, Operational Safety Branch, 2200 South 216th St.,
Des Moines, WA. For information on the availability of this material
at the FAA, call<PHONE_NUMBER>. This material may be found in the AD
docket on the internet at https://www.regulations.gov by searching
for and locating Docket No. FAA-2020-0676.
    (5) You may view this material that is incorporated by reference
at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, email
<EMAIL_ADDRESS>or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on October 6, 2020.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2020-22792 Filed 10-15-20; 8:45 am]
BILLING CODE 4910-13-P


--------------------------------------------------------------------------------
 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
--------------------------------------------------------------------------------
REGION 8
--------------------------------------------------------------------------------
1595 Wynkoop Street
--------------------------------------------------------------------------------
Denver, CO  80202-1129
--------------------------------------------------------------------------------
Phone<PHONE_NUMBER>
--------------------------------------------------------------------------------
www.epa.gov/region8
Ref: 8ARD-PM

Mr. Danny Powers
Air Quality Program Manager
Southern Ute Indian Tribe Environmental Programs
P.O. Box 737, Mail Slot #84
Ignacio, Colorado  81137-0737
Via email<EMAIL_ADDRESS>
Re:	Red Cedar Gathering Company, Antler Power Station, Permit # SMNSR-SU-000476-2021.001, Proposed Synthetic Minor New Source Review Permit

Dear Mr. Powers:

The U.S. Environmental Protection Agency Region 8 is proposing to issue a synthetic minor source permit pursuant to the Tribal Minor New Source Review (MNSR) Permit Program at 40 CFR part 49 for the Antler Power Station located on Indian country lands within the Southern Ute Indian Reservation, in La Plata County, Colorado. As requested by Red Cedar, this permit would incorporate requested limits on NOX emissions and operating hours for the four natural gas fired turbine units used for electric power generation. The hours of operation would be reduced by 50% of full-time operation, but the reduced hours may not be evenly distributed between each of the four units. As such, to allow operational flexibility, the proposed permit, at Red Cedar's request, limits the combined run hours of all four natural gas-fired turbines to 17,520 hours, a facility-wide NOX emissions limit of 230 tons per year (tpy) and a 25.4 lb/hr NOX emissions limit for each turbine to establish the source as a synthetic minor source for the purpose of the Prevention of Significant Deterioration (PSD) Permit Program at 40 CFR part 52. Proposed limitations do not include any add-on emission controls to meet the emission limits described above.

A public comment period for the proposed permit will begin on August 10, 2022 and end on September 8, 2022.

The proposed permit and supporting documentation are available in the electronic docket at Regulations.gov (Docket ID #EPA-R08-OAR-2021-0041), and we ask that you please assist members of the public who contact you with instructions on how to access the material available for public review until the end of the public comment period. Comments may be submitted via email to<EMAIL_ADDRESS>or through https://www.regulations.gov (Docket ID #EPA-R08-OAR-2021-0041). In addition, we have enclosed a copy of the bulletin board public notice announcement and would appreciate it if you could post this announcement in prominent locations in your area. All of these documents will also be available for review in electronic format on our website at: https://www.epa.gov/caa-permitting/caa-permit-public-comment-opportunities-region-8.

If you have any questions concerning the proposed permit or technical support documents, please contact Lohitaksha (Lo.) Rao, of my staff, at<PHONE_NUMBER> or at<EMAIL_ADDRESS>

                                       Sincerely,

                                    Monica Morales
                                    Acting Director
                                    Air and Radiation Division

Enclosure