[Federal Register Volume 84, Number 57 (Monday, March 25, 2019)]
[Rules and Regulations]
[Pages 11198-11208]
[FR Doc No: 2019-05159]

Vol. 84

Monday,

No. 57

March 25, 2019

Part III

 Environmental Protection Agency

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40 CFR Part 52

Clean Air Plans; 2008 8-Hour Ozone Nonattainment Area Requirements; San
Joaquin Valley, California and Approval and Promulgation of Air Quality
State Implementation Plans; California; Plumas County; Moderate Area
Plan for the 2012 PM2.5 NAAQS; Final Rule

Federal Register / Vol. 84 , No. 57 / Monday, March 25, 2019 / Rules
and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2018-0535; FRL-9990-13-Region 9]

Clean Air Plans; 2008 8-Hour Ozone Nonattainment Area
Requirements; San Joaquin Valley, California

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is taking final
action to approve portions of two state implementation plan (SIP)
revisions submitted by the State of California to meet Clean Air Act
(CAA or ``the Act'') requirements for the 2008 8-hour ozone national
ambient air quality standards (NAAQS or ``standards'') in the San
Joaquin Valley, California ozone nonattainment area. First, the EPA is
approving the portion of the ``2016 Ozone Plan for the 2008 8-Hour
Ozone Standard'' (``2016 Ozone Plan'') that addresses the requirement
for a base year emissions inventory. Second, the EPA is approving the
portions of the ``2018 Updates to the California State Implementation
Plan'' (``2018 SIP Update'') that address the requirements for a
reasonable further progress (RFP) demonstration and motor vehicle
emissions budgets (MVEBs or ``budgets'') for the San Joaquin Valley for
the 2008 ozone standards. Lastly, the EPA is conditionally approving
the contingency measure element of the 2016 Ozone Plan, as modified by
the 2018 SIP Update. The approval is conditional because a key portion
of the element relies on commitments by the State air agency and
regional air district to supplement the contingency measure element
with submission of a specific contingency measure within one year of
the EPA's final conditional approval.

DATES: This rule is effective on April 24, 2019.

ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-R09-OAR-2018-0535. All documents in the docket are
listed on the https://www.regulations.gov website. Although listed in
the index, some information is not publicly available, e.g.,
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Certain other material, such as
copyrighted material, is not placed on the internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available through https://www.regulations.gov, or please
contact the person identified in the FOR FURTHER INFORMATION CONTACT
section for additional availability information.

FOR FURTHER INFORMATION CONTACT: Laura Lawrence, EPA Region IX, (415)
972-3407.

SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and
``our'' refer to the EPA.

Table of Contents

I. Summary of the Proposed Action
II. Changes and Corrections to Proposed Action
III. Public Comments and EPA Responses
IV. Final Action
V. Statutory and Executive Order Reviews

I. Summary of the Proposed Action

    On November 29, 2018 (83 FR 61346), the EPA proposed to approve,
under CAA section 110(k)(3), and to conditionally approve, under CAA
section 110(k)(4), portions of submittals from the California Air
Resources Board (CARB or ``State'') and the San Joaquin Valley Air
Pollution Control District (SJVAPCD or ``District'') as revisions to
the California SIP for the San Joaquin Valley 2008 ozone nonattainment
area.\1\ The relevant SIP revisions include the 2016 Ozone Plan and the
2018 SIP Update. With respect to the 2018 SIP Update, our proposal was
based on a public draft version of this document and a request from
CARB that the EPA accept the public draft for parallel processing with
respect to the portions of the 2018 SIP Update that apply to the San
Joaquin Valley 2008 ozone nonattainment area.\2\ The State has since
adopted and submitted the 2018 SIP Update, and this submittal is
discussed in more detail in section II of this preamble.
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    \1\ The San Joaquin Valley nonattainment area for the 2008 ozone
standards generally covers the southern half of California's Central
Valley and consists of San Joaquin, Stanislaus, Merced, Madera,
Fresno, Tulare, and Kings counties, and the western portion of Kern
County. A precise description of the San Joaquin Valley ozone
nonattainment area is contained in 40 CFR 81.305.
    \2\ Letter from Richard Corey, CARB Executive Officer, to
Michael Stoker, EPA Region IX Regional Administrator, dated October
3, 2018.
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    Our proposal also relied on a specific commitment from the District
to revise the District's architectural coatings rule to create a
contingency measure that will be triggered if the area fails to meet
reasonable further progress (RFP) or to attain by the applicable
attainment date, and a commitment from CARB to submit the revised
District rule to the EPA as a SIP revision within 12 months of our
final action.\3\ \4\ For more information on these submittals, please
see our November 29, 2018 proposed rulemaking.
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    \3\ Letter from Sheraz Gill, SJVAPCD Deputy Air Pollution
Control Officer, to Richard Corey, CARB Executive Officer, and to
Michael Stoker, EPA Region IX Regional Administrator, dated October
18, 2018.
    \4\ Letter from Dr. Michael Benjamin, Chief, Air Quality
Planning and Science Division, CARB, to Michael Stoker, EPA Region
IX Regional Administrator, dated October 30, 2018.
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    In our proposed rulemaking, we provided background material on the
ozone standards,\5\ area designations, and related SIP revision
requirements under the CAA, and the EPA's implementing regulations for
the 2008 ozone standards, referred to as the 2008 Ozone SIP
Requirements Rule (``2008 Ozone SRR''). In short, the San Joaquin
Valley nonattainment area is classified as Extreme for the 2008 ozone
standards, and the 2016 Ozone Plan was developed to address the
requirements for this Extreme nonattainment area.
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    \5\ Ground-level ozone pollution is formed from the reaction of
volatile organic compounds (VOC) and oxides of nitrogen
(NOX) in the presence of sunlight. The 2008 ozone
standard is 0.075 parts per million (ppm) average over an 8-hour
period. 73 FR 16436 (March 27, 2008). The State of California
typically refers to reactive organic gases (ROG) in its ozone-
related submittals. The CAA and the EPA's regulations refer to VOC,
rather than ROG, but both terms cover essentially the same set of
gases. In this final rule, we use the term federal term (VOC) to
refer to this set of gases.
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    In our proposed rulemaking, we also discussed a decision issued by
the DC Circuit Court of Appeals in South Coast Air Quality Management
Dist. v. EPA, (``South Coast II'') \6\ that vacated certain portions of
the EPA's 2008 Ozone SRR. The only aspect of the South Coast II
decision that affects this action is the vacatur of the provision in
the 2008 Ozone SRR that allowed states to use an alternative baseline
year for demonstrating RFP. To address this, in the 2018 SIP Update,
CARB submitted an updated RFP demonstration that relied on a 2011
baseline year as required, along with updated motor vehicle emissions
budgets (MVEBs) associated with the new RFP milestone years. Portions
of the 2016 Ozone Plan not affected by the South Coast II decision were
addressed in previous rulemakings.\7\
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    \6\ South Coast Air Quality Management Dist. v. EPA, 882 F.3d
1138 (D.C. Cir. 2018). The term ``South Coast II'' is used in
reference to the 2018 court decision to distinguish it from a
decision published in 2006 also referred to as ``South Coast.'' The
earlier decision involved a challenge to the EPA's Phase 1
implementation rule for the 1997 ozone standard. South Coast Air
Quality Management Dist. v. EPA, 472 F.3d 882 (D.C. Cir. 2006).
    \7\ For approval of the elements related to the RACT SIP
requirement, see 83 FR 41006 (August 17, 2018). For approval of the
attainment demonstration and other associated requirements, see 84
FR 3302 (February 12, 2019).

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    For our November 29, 2018 proposed rulemaking, we reviewed the base
year emissions inventory contained in the 2016 Ozone Plan, the RFP
demonstration, the RFP and attainment year MVEBs contained in the 2018
SIP Update, and the contingency measure element contained in the 2016
Ozone Plan, as modified by the 2018 SIP Update and supplemented by the
CARB and District commitment letters, and evaluated them for compliance
with statutory and regulatory requirements.
    With respect to the contingency measure requirement, in our
proposed rulemaking, we noted that the EPA's longstanding
interpretation of section 172(c)(9) that states may rely on already-
implemented measures as contingency measures (if they provide emissions
reductions in excess of those needed to meet any other nonattainment
plan requirements) was rejected by the Ninth Circuit Court of Appeals
in a case referred to as Bahr v. EPA.\8\ In Bahr, the Ninth Circuit
concluded that contingency measures must be measures that would take
effect at the time the area fails to make RFP or to attain by the
applicable attainment date, not before.\9\ Thus, within the geographic
jurisdiction of the Ninth Circuit, states cannot rely on already-
implemented control measures to comply with the contingency measure
requirements under CAA sections 172(c)(9) and 182(c)(9).\10\
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    \8\ Bahr v. EPA, 836 F.3d 1218, at 1235-1237 (9th Cir. 2016).
    \9\ Id. at 1235-1237.
    \10\ The Bahr v. EPA decision involved a challenge to an EPA
approval of contingency measures under the general nonattainment
area plan provisions for contingency measures in CAA section
172(c)(9), but, given the similarity between the statutory language
in section 172(c)(9) and the ozone-specific contingency measure
provision in section 182(c)(9), we find that the decision affects
how both sections of the Act must be interpreted.
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    Based on our review of the relevant portions of the 2016 Ozone Plan
and 2018 SIP Update, commitment letters and other technical
documentation provided by CARB, we proposed the following:
     We proposed to approve the 2012 base year emissions
inventory from the 2016 Ozone Plan because we determined that it is
comprehensive, accurate, and current, and thereby meets the
requirements of CAA sections 172(c)(3) and 182(a)(1) and 40 CFR
51.1115.
     We proposed to approve the RFP demonstration in the 2018
SIP Update because we determined that it provides for emissions
reductions of VOC or NOX of at least 3 percent per year on
average for each three-year period from a 2011 baseline year through
the attainment year and thereby meets the requirements of CAA sections
172(c)(2), 182(b)(1), and 182(c)(2)(B), and 40 CFR 51.1110(a)(2)(ii);
and
     We proposed to find adequate and approve MVEBs for the RFP
milestone years of 2020, 2023, 2026, 2029, and the attainment year of
2031 from the 2018 SIP Update because we determined that they are
consistent with the RFP demonstration proposed for approval and the
attainment demonstration previously approved, are clearly identified
and precisely quantified, and meet all other applicable statutory and
regulatory requirements in 40 CFR 93.118(e), including the adequacy
criteria in 40 CFR 93.118(e)(4) and (5).
     Finally, we proposed to conditionally approve the
contingency measure element of the 2016 Ozone Plan, as modified by the
2018 SIP Update, as meeting the requirements of CAA sections 172(c)(9)
and 182(c)(9), based on commitments by CARB and the District to
supplement the element through submission of a SIP revision within one
year of final conditional approval action that will include a revised
District architectural coatings rule.
    Please see our November 29, 2018 proposed rulemaking and the
related Technical Support Document for more information concerning the
background for this action and for a more detailed discussion of the
rationale for approval or conditional approval of the above-listed
elements of the 2016 Ozone Plan and 2018 SIP Update.

II. Changes and Corrections to Proposed Action

A. Submittal of Adopted 2018 SIP Update

    As noted above, we proposed to approve portions of the 2018 SIP
Update based on a public draft of the plan and an October 3, 2018
request from CARB that the EPA accept the draft 2018 SIP Update for
parallel processing with respect to the portions of the 2018 SIP Update
that apply to the San Joaquin Valley nonattainment area. Under the
EPA's parallel processing procedure, the EPA may propose action on a
public draft version of a SIP revision but will take final action only
after the state adopts and submits the final version to the EPA for
approval.\11\ If there are no significant changes from the draft
version of the SIP revision to the final version, the EPA may elect to
take final action on the proposal.
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    \11\ See 40 CFR part 51, appendix V, section 2.3.
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    In this case, CARB adopted the 2018 SIP Update, previously released
for public review, without significant modifications on October 25,
2018, and submitted the adopted 2018 SIP Update to the EPA as a
revision to the California SIP on December 5, 2018.\12\ The submittal
includes CARB Resolution 18-50 adopting the 2018 SIP Update, the 2018
SIP Update itself, and documentation of public notice and opportunity
to comment on the draft plan update. With respect to the San Joaquin
Valley, the 2018 SIP Update includes an RFP demonstration with a 2011
baseline year, MVEBs for RFP milestone years and the attainment year,
and modifications to the contingency measure element of the 2016 Ozone
Plan. The modifications to the contingency measure element include
CARB's Enhanced Enforcement Activities Program and updated emissions
estimates for surplus emissions reductions in the RFP milestone years
and in the year following the attainment year. We proposed action based
on the draft version of the 2018 SIP Update submitted to us on October
3, 2018, and the contents of CARB Resolution 18-50, and are now
finalizing action based on the December 5, 2018 submittal of the final
adopted version of the 2018 SIP Update and CARB Resolution 18-50.
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    \12\ Letter from Richard Corey, CARB Executive Officer, to
Michael Stoker, EPA Region IX Regional Administrator, dated December
5, 2018.
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    For this final rule, we have evaluated the December 5, 2018
submittal for compliance with CAA procedural requirements for adoption
and submission of SIP revisions. Specifically, CAA sections 110(a)(1)
and (2) and 110(l) require a state to provide reasonable public notice
and opportunity for public hearing prior to the adoption and submission
of a SIP or SIP revision. To meet this requirement, every SIP submittal
should include evidence that adequate public notice was given and an
opportunity for a public hearing was provided consistent with the EPA's
implementing regulations in 40 CFR 51.102.
    CARB has satisfied the applicable statutory and regulatory
requirements for reasonable public notice and hearing prior to the
adoption and submittal of the 2018 SIP Update. Concurrent with the
release of the draft 2018 SIP Update, CARB published a notice of public
hearing to be held on October 25, 2018, to consider approval of the
2018 SIP Update.\13\ On October 25, 2018, CARB held the hearing,
approved the 2018 SIP Update, and directed its Executive Officer to
submit the 2018 SIP Update

to the EPA for approval into the California SIP.\14\ On December 5,
2018, the CARB Executive Officer submitted the 2018 SIP Update to the
EPA and included the transcript of the hearing held on October 25,
2018.\15\
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    \13\ See Notice of Public Meeting to Consider the 2018 Updates
to the California State Implementation Plan, September 21, 2018.
    \14\ See CARB Resolution 18-50.
    \15\ See Letter from Richard Corey, CARB Executive Officer, to
Michael Stoker, EPA Region IX Regional Administrator, dated December
5, 2018, transmitting the following enclosures: (1) 2018 SIP Update,
(2) CARB SIP Completeness Checklist, (3) CARB Resolution 18-50
adopting the 2018 SIP Update as a revision to the California SIP,
(4) Evidence of public notice and transcript of public meeting to
consider approval of the 2018 SIP Update, Board Meeting Comments Log
and written comments regarding the 2018 SIP Update.
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B. Enhanced Enforcement Activities Program as Stand-Alone Contingency
Measure

    In our November 29, 2018 proposed rulemaking, we proposed to
approve conditionally the contingency measure element of the 2016 Ozone
Plan, as modified by the 2018 SIP Update, and as supplemented by the
District's and CARB's commitments to submit a revised District rule as
a contingency measure, as meeting the requirements of CAA sections
172(c)(9) and 182(c)(9). In our proposal, we considered two elements of
the overall contingency measure package as meeting the requirements of
CAA sections 172(c)(9) and 182(c)(9)--the CARB contingency measure,
i.e., the Enhanced Enforcement Activities Program described in Chapter
X of the 2018 SIP Update, and the District's forthcoming contingency
measure, i.e., the removal of the small container exemption from the
current District architectural coatings rule in the SIP upon a
triggering event (i.e., failure to meet RFP or attainment deadlines).
We considered these two elements in the context of additional
reductions from ongoing implementation of the existing control program,
and CARB's commitment in the 2016 State Strategy to achieve an
additional 8 tons per day (tpd) of emissions reductions of
NOX in the San Joaquin Valley nonattainment area in 2031.
    In response to comments received during the comment period for this
proposed action, and as discussed in more detail in section III of this
preamble, we are conditionally approving only the District's intended
contingency measure as meeting the requirements of CAA sections
172(c)(9) and 182(c)(9). Though we are not approving the CARB Enhanced
Enforcement Activities Program as submitted to fulfill the requirements
of CAA 172(c)(9) and 182(c)(9), we consider the program to have merit
in achieving additional emissions reductions in the San Joaquin Valley
nonattainment area in the event that the area fails to meet an RFP
milestone or to attain the 2008 ozone NAAQS by the attainment date. For
that reason, we find that the CARB Enhanced Enforcement Activities
Program strengthens the SIP and we are approving it conditionally as
part of the overall contingency measure element. Our rationale is
discussed in section III of this preamble. Our overall conclusion--that
the contingency measure element in the 2016 Ozone Plan, as modified by
the 2018 SIP Update and supplemented by the forthcoming District
measure (once adopted and submitted), meets the contingency measure
requirements for the 2008 ozone NAAQS--remains unchanged.

C. Corrections to Motor Vehicle Emissions Budgets

    In our November 29, 2018 proposed rulemaking, we proposed to find
adequate and approve MVEBs for the San Joaquin Valley for RFP milestone
years 2020, 2023, 2026, 2029 and the 2031 attainment year.\16\ In our
proposal, we inadvertently introduced typographical errors in table 5,
which detailed the MVEBs for each county. Table 1 below corrects these
errors, making them consistent with tables VIII-3 through VIII-10 of
the 2018 SIP Update. Because the changes in Table 1 below are
consistent with the source tables in the public draft version of the
2018 SIP Update, and those source tables were cited in the proposal
rule, we are correcting this error without re-proposing approval of the
budgets. The approved MVEBs (in tons per day (tpd), average summer
weekday) are as follows:
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    \16\ See table 5, Budgets in the 2018 SIP Update, 83 FR 61346
(November 29, 2018) at 61354.

                                                             Table 1--Motor Vehicle Emissions Budgets (MVEBs) in the 2018 SIP Update
                                                                                [Tons per day]
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                                                                          2020                      2023                      2026                      2029                      2031
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                            County                                            NOX (tpd)                 NOX (tpd)                 NOX (tpd)                 NOX (tpd)                 NOX (tpd)
                                                                 VOC (tpd)                 VOC (tpd)                 VOC (tpd)                 VOC (tpd)                 VOC (tpd)
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Fresno........................................................          6.7         23.9          5.5         14.1          4.9         13.2          4.5         12.4          4.2         12.1
Kern (SJV)....................................................          5.4         20.9          4.5         14.5          4.2         14.4          4.0         14.3          3.9         14.3
Kings.........................................................          1.2          4.5          1.0          2.7          0.9          2.6          0.8          2.6          0.8          2.6
Madera........................................................          1.5          4.3          1.1          2.7          1.0          2.5          0.9          2.4          0.8          2.3
Merced........................................................          2.2          8.8          1.7          6.0          1.5          5.9          1.3          5.6          1.2          5.4
San Joaquin...................................................          4.7         11.2          3.9          7.4          3.5          7.0          3.1          6.6          2.8          6.3
Stanislaus....................................................          3.1          8.8          2.6          5.6          2.2          4.9          2.0          4.5          1.8          4.3
Tulare........................................................          3.0          7.6          2.4          4.6          2.1          4.0          1.8          3.7          1.7          3.5
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Source: Tables VIII-3 through VIII-10 of the 2018 SIP Update.

    Also, with regards to the MVEBs, in its December 5, 2018 letter
submitting the adopted 2018 SIP Update to the EPA as a revision to the
California SIP, CARB requested that we limit the duration of our
approval of the budgets only until the effective date of the EPA's
adequacy finding for any subsequently submitted budgets.\17\ The
request to limit duration of our approval of the budgets was not
included in the October 3, 2018 letter requesting parallel processing
of the 2018 SIP Update, and therefore was not addressed in our November
29, 2018 proposal.
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    \17\ Letter, Richard W. Corey, Executive Officer, California Air
Resources Board, to Michael Stoker, Regional Administrator, EPA
Region IX, December 5, 2018.
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    The transportation conformity rule allows the EPA to limit the
duration of the approval of budgets.\18\ We will consider a state's
request to limit an approval of its MVEB if the request includes the
following elements: \19\
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    \18\ 40 CFR 93.118(e)(1).
    \19\ 67 FR 69141 (November 15, 2002), limiting our prior
approval of MVEB in certain California SIPs.
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     An acknowledgement and explanation as to why the budgets
under consideration have become outdated or deficient;
     A commitment to update the budgets as part of a
comprehensive SIP update; and

     A request that the EPA limit the duration of its approval
to the time when new budgets have been found to be adequate for
transportation conformity purposes.

Because CARB's request does not include a commitment to update the
budgets as part of a comprehensive SIP update, we cannot at this time
limit the duration of our approval of the submitted budgets until new
budgets have been found adequate. Once CARB provides that commitment,
we intend to review the request and take appropriate action. If we
propose to limit the duration of our approval of the motor vehicle
emissions budgets in the 2018 SIP Update, we will provide the public an
opportunity to comment. The duration of the approval of the budgets,
however, would not be limited until we complete such a rulemaking.

III. Public Comments and EPA Responses

    The public comment period on the proposed rulemaking opened on
November 29, 2018, the date of its publication in the Federal Register,
and closed on December 31, 2018. During this period, the EPA received
five anonymous comments, and a comment letter submitted on behalf of
the Association of Irritated Residents (AIR). Three of the anonymous
commenters express overall support for the proposed action. One of the
anonymous commenters questions the existence of global warming, an
issue that is outside the scope of this rulemaking. The EPA is not
responding to these four comments, either because they are not adverse
to, or because they are not relevant to, the proposed action.
    The fifth anonymous comment and the comment letter from AIR are
germane to this action and are addressed below. All of the comments
received are included in the docket for this action. In addition to
written comments received during the comment period, EPA staff
participated in a conference call with CARB staff during which aspects
of the proposed rulemaking were discussed. A summary of this call is
included in a memo to the docket.
    Comment #1: An anonymous commenter seeks clarification on the
repercussions of a failure by San Joaquin Valley to achieve an RFP
milestone given that the contingency measure element of the 2016 Ozone
Plan, as modified by the 2018 SIP Update, would be conditionally,
rather than fully, approved.
    Response #1: In our November 29, 2018 proposed rulemaking, we
proposed to approve conditionally the contingency measure element of
the 2016 Ozone Plan, as modified by CARB in the 2018 SIP Update, and as
supplemented by commitments by the District and CARB to adopt and
submit a specific contingency measure for the San Joaquin Valley for
the 2008 ozone NAAQS. The contingency measure element of the 2016 Ozone
Plan (as modified and supplemented) includes a measure that would be
implemented by CARB (i.e., the Enhanced Enforcement Activities Program)
and a measure, that, upon adoption, would be implemented by the
District (i.e., the removal of the small container exemption from the
current District architectural coatings rule). In this document, we are
taking final action to approve conditionally the contingency measure
element of the nonattainment plan for the San Joaquin Valley
nonattainment area for the 2008 ozone NAAQS.
    As allowed under section 110(k)(4) of the CAA, the District
contingency measure has not yet been adopted or submitted by the
District and CARB to the EPA for approval as part of the California
SIP. Rather, the District has submitted a commitment to CARB and the
EPA to adopt a specific contingency measure and to submit the measure
to CARB in sufficient time to allow for its adoption and submittal by
CARB to the EPA within one year of the EPA's conditional approval of
the contingency measure element for the San Joaquin Valley
nonattainment area in this final action. More specifically, the
District has committed to amend its existing architectural coatings
rule to provide that the small container exemption will no longer be
available upon a failure to meet an RFP milestone or upon a failure to
attain the 2008 ozone NAAQS by the applicable attainment date. This
means that if such a triggering event occurs, the VOC emissions from
small containers of architectural coatings would immediately be subject
to regulation in the District. For its part, CARB has committed to the
EPA to submit the District's revised architectural coatings rule to the
EPA within one year of the effective date of the final conditional
approval. Assuming this action is published by the end of February
2019, and made effective 30 days from publication, the District's and
CARB commitments as to the District contingency measure should be
fulfilled well before the next relevant triggering event will occur,
i.e., the EPA's determination of whether the San Joaquin Valley ozone
nonattainment area met the RFP milestone in 2020.\20\
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    \20\ Section 182(g)(2) of the CAA requires states to submit a
demonstration that the milestone has been met not later than 90 days
after the date on which an applicable milestone occurs. The EPA has
90 days thereafter to determine whether or not a state's
demonstration is adequate.
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    In addition, while the EPA has concluded that CARB's Enhanced
Enforcement Activities Program does not meet all of the requirements
for a stand-alone contingency measure, the program will strengthen the
SIP and is part of the conditional approval of the overall contingency
measure element. Like the forthcoming District contingency measure, the
Enhanced Enforcement Activities Program would be triggered upon a
failure to achieve an RFP milestone or failure to attain the ozone
NAAQS by the applicable attainment date in San Joaquin Valley. As
discussed in more detail in chapter X (``Contingency Measures'') of the
2018 SIP Update and our November 29, 2018 proposed rulemaking, under
CARB's Enhanced Enforcement Activities Program, within 60 days of the
triggering event the CARB Executive Officer would implement enhanced
enforcement activities in the San Joaquin Valley nonattainment area
consistent with the findings and recommendations in a report (referred
to as the Enhanced Enforcement Report) that CARB will prepare and
publish. Per the terms of the Enhanced Enforcement Activities Program,
the report will identify the probable causes of the failure to meet RFP
or attain by the applicable attainment date and identify specific
enhanced enforcement activities to reduce emissions and health impacts
in the area, and it requires CARB to implement those activities within
60 days of the triggering event. The focus of CARB's enhanced
enforcement would be regulations for which CARB has the authority to
enforce under State law, such as mobile source and consumer product
regulations.
    Under CAA section 110(k)(4), if the District and CARB fulfill their
commitments, then the conditional approval would become a full approval
upon the EPA's approval of the District's contingency measure as part
of the SIP, and both the District's contingency measure (removal of the
small container exemption in the architectural coatings rule) and
CARB's Enhanced Enforcement Activities Program would be triggered upon
a failure to achieve an RFP milestone, or failure to attain the 2008
ozone NAAQS by the applicable attainment date, in the San Joaquin
Valley nonattainment area.
    If, on the other hand, the District or CARB fail to meet their
commitments to adopt and submit the District

contingency measure within one year, then the final conditional
approval of the contingency measure element would become a disapproval
upon the EPA's determination that the agencies had failed to fulfill
their commitments and would thereby trigger the imposition of certain
sanctions if the contingency measure SIP deficiency is not remedied
within 18 months or 24 months (depending on the specific sanction).\21\
The disapproval would also trigger a 24-month clock for the EPA to
promulgate a Federal Implementation Plan (FIP) to remedy the deficiency
if CARB and the District do not remedy the deficiency within that time
frame.\22\
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    \21\ See CAA section 179(a) and (b); 40 CFR 52.31.
    \22\ See CAA section 110(c).
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    Comment #2: AIR asserts that the 2016 Ozone Plan, as amended by the
2018 SIP Update, fails to meet the CAA requirements for base year
inventories because it provides emissions inventory information for
year 2012 whereas a recent court decision requires that such
inventories reflect emissions for year 2011.
    Response #2: The commenter appears to be confused as to the purpose
for which we are approving the various inventories prepared in this
package and under which specific CAA requirements those inventories
must be evaluated. In our November 29, 2018 proposed rulemaking, we
proposed to approve the 2012 base year emissions inventory provided in
the 2016 Ozone Plan as meeting the base year requirements of CAA
sections 172(c)(3) and 182(a)(1) and 40 CFR 51.1115. We also are
approving the portion of the 2018 SIP Update that starts with 2011 as
the baseline year and future baseline emissions inventories out to 2032
as appropriate for use in developing the RFP demonstration, motor
vehicle emissions budgets, and the contingency measure element. The
base year emissions inventory requirement and the RFP demonstration are
two separate SIP revision requirements under the CAA and the EPA's
regulations.
    As described in our November 29, 2018 proposed rulemaking, the EPA
issued the 2008 Ozone SRR to assist states in developing effective
plans to address ozone nonattainment problems. The 2008 Ozone SRR
addresses implementation of the 2008 ozone NAAQS, including
requirements for base year emissions inventories and RFP
demonstrations, among other requirements. As AIR notes, the 2008 Ozone
SRR was challenged and certain portions of the SRR were vacated in the
South Coast II decision. In relevant part, the court decision vacated
the option for a state to select an alternative baseline year for RFP
demonstrations.
    More specifically, the 2008 Ozone SRR required states to develop
the baseline emissions inventory for RFP plans using the emissions for
the most recent calendar year for which states submit a triennial
inventory to the EPA under subpart A (``Air Emissions Reporting
Requirements'') of 40 CFR part 51, which was 2011. However, the 2008
Ozone SRR allowed states to use an alternative year, between 2008 and
2012, for the baseline emissions inventory provided that the state
demonstrated why the alternative baseline year was appropriate. In the
South Coast II decision, the D.C. Circuit vacated the provisions of the
2008 Ozone SRR that allowed states to use an alternative baseline year
for demonstrating RFP.
    However, the provisions in the 2008 Ozone SRR addressing the base
year emissions inventory, in contrast to the RFP demonstration, were
not at issue in the South Coast II case and, thus, remain in effect.
The 2008 Ozone SRR defines the base year emissions inventory as a
comprehensive, accurate, current inventory of actual emissions and
requires that the base year emissions inventory year be selected
``consistent'' with the baseline year for the RFP plan.\23\ In
promulgating the 2008 Ozone SRR, we indicated that we generally expect
that the year used for the base year emissions inventory for the
nonattainment area would be the same as the year used for the RFP plan
baseline,\24\ but we did not require that they be the same.
---------------------------------------------------------------------------

    \23\ 40 CFR 51.1100(bb) and 40 CFR 51.1115(a).
    \24\ 80 FR 12264, at 12290 (March 6, 2015).
---------------------------------------------------------------------------

    In this case, CARB selected 2012 as the year for the base year
emissions inventory in the 2016 Ozone Plan. Although this means that
the state is not using the same year for the base year inventory and
the RFP baseline, we believe that using 2012 for the base year
inventory is consistent with the 2011 baseline year for the RFP
demonstration because the 2011 emission inventory is backcast from the
2012 base year inventory, and therefore is based on the same data.
    Comment #3: AIR asserts that the 2011 emissions inventory does not
meet the requirements for base year emissions inventories because it
does not represent actual emissions but, rather, represents emissions
that have been backcast from actual emissions in year 2012.
    Response #3: First, we did not review the 2011 emissions inventory
for compliance with the requirements for base year emissions
inventories under CAA sections 172(c)(3) and 182(a)(1) and 40 CFR
51.1115. We reviewed the 2012 emissions inventory for compliance with
those base year requirements, and for the reasons set forth in our
proposed rulemaking, we found that the 2012 emissions inventory
represents a comprehensive, accurate, and current inventory of actual
emissions during that year in the San Joaquin Valley nonattainment
area.\25\
---------------------------------------------------------------------------

    \25\ 83 FR 61346, 61352 (November 29, 2018).
---------------------------------------------------------------------------

    Second, we reviewed the 2011 emissions inventory as part of our
review of the RFP demonstration, and we found it to be appropriate for
that purpose. With respect to the derivation of the 2011 RFP baseline
year emissions inventory, CARB has explained that the 2011 RFP baseline
year emissions inventory reflects actual emissions (in 2011) from the
large stationary sources and that, with respect to areawide and small
stationary sources, the inventory reflects emissions backcast from the
2012 base year emissions inventory.\26\ Backcasting emissions based on
differences in emissions controls and source activity levels is a
standard method for estimating emissions in previous years, just as
forecasting emissions on the same basis is a standard method for
estimating emissions in future years. On-road motor vehicle emissions
in 2011 were calculated using the same model (EMFAC2014) and the same
source for transportation activity data (2014 Regional Transportation
Plan) as that used for the corresponding emissions in the 2012 base
year emissions inventory for the 2016 Ozone Plan.
---------------------------------------------------------------------------

    \26\ Richard W. Corey, Executive Officer, CARB, to Michael
Stoker, Regional Administrator, EPA Region IX, December 5, 2018,
enclosure titled ``San Joaquin Valley Emission Projections Technical
Clarification.''
---------------------------------------------------------------------------

    Comment #4: AIR asserts that the 2011 emissions inventory fails to
meet the CAA requirements for base year emissions inventories because
the on-road motor vehicle portion of the emissions inventory is based
on an outdated emissions model (EMFAC2014) and, thus, is not current.
    Response #4: As noted in response to comment #3, we did not review
the 2011 emissions inventory for compliance with the requirements for
base year emissions inventories under CAA sections 172(c)(3) and
182(a)(1) and 40 CFR 51.1115. We reviewed the 2012 emissions inventory
for compliance with those base year requirements, and for the reasons
set forth in our proposed rulemaking, we found that the 2012 emissions
inventory represents a comprehensive, accurate,

and current inventory of actual emissions during that year in the San
Joaquin Valley nonattainment area. We acknowledge that the on-road
motor vehicle emissions portions of the 2012 base year emissions
inventory and 2011 RFP baseline emissions inventory are based on
EMFAC2014 and that CARB has released an updated version of that model
(EMFAC2017). We disagree, however, that the motor vehicle emissions
estimates for the 2012 base year emissions inventory or the 2011 RFP
baseline emissions inventory are thereby outdated.
    The 2008 Ozone SRR states that the latest approved models should be
used to estimate emissions from on-road sources.\27\ EMFAC2014 was
approved in December 2015 and is the most recently approved version of
CARB's motor vehicle emissions model, and as such, is the appropriate
model to use for SIP development purposes.\28\ CARB submitted EMFAC2017
to the EPA for approval in July 2018, but the EPA has not yet taken
action to approve it, and until the Agency takes such action, EMFAC2014
will remain the appropriate model to use for SIP development
purposes.\29\ Moreover, based on the timing of the EPA's review of
submittals of previous versions of EMFAC, it would not have been
reasonable for CARB to assume that EMFAC2017 would have been approved
by the time the 2018 SIP Update was adopted and submitted to the
EPA.\30\ As such, the continued use by CARB of EMFAC2014 for the on-
road motor vehicle portion of the emissions inventories in the 2018 SIP
Update is reasonable and appropriate.
---------------------------------------------------------------------------

    \27\ 80 FR 12264, at 12290 (March 6, 2015).
    \28\ 80 FR 77337 (December 14, 2015).
    \29\ AIR cites the EPA's SRR for the 2015 ozone NAAQS as
evidence of the EPA's knowledge about EMFAC2017. EPA's SRR for the
2015 ozone NAAQS does refer to the EPA's on-going review of
EMFAC2017, but it also notes that ``EMFAC2017 should not be used for
any conformity analyses until the EPA officially approves the model
for that purpose.'' 83 FR 62998, at 63022 n.54 (December 6, 2018).
    \30\ EMFAC2007 was submitted on April 18, 2007 and approved on
January 18, 2008 (73 FR 3464); EMFAC2011 was submitted on April 6,
2012 and approved on March 6, 2013 (78 FR 14533); and EMFAC2014 was
submitted on May 21, 2015, and approved on December 14, 2015 (80 FR
77337).
---------------------------------------------------------------------------

    Nonetheless, the EPA is aware of differences in on-road motor
vehicle emissions estimates between the two models. Preliminary data
developed by CARB indicate that, within the San Joaquin Valley
nonattainment area, on-road emissions estimates of NOX using
EMFAC2017 would be slightly higher than the corresponding emissions
estimates using EMFAC2014 in years 2011 and 2012.\31\
---------------------------------------------------------------------------

    \31\ See page 250 of CARB's EMFAC2017 Volume III--Technical
Documentation, July 20, 2018.
---------------------------------------------------------------------------

    Comment #5: AIR asserts that CARB's Enhanced Enforcement Activities
Program does not meet the requirements for contingency measures under
CAA sections 172(c)(9) and 182(c)(9) because it fails to require
adoption by CARB of any specific strategies and is thus unenforceable.
AIR acknowledges that, in adopting the 2018 SIP Update, CARB required
that the Enhanced Enforcement Program for a given area include some of
the enhanced enforcement actions listed in a menu of actions attached
to CARB's resolution of adoption, but asserts that the requirement to
include such actions does not make the plan enforceable because CARB
retains discretion to select among the menu of activities and include
activities not listed in the menu.
    Response #5: As noted by AIR, CARB's enhanced enforcement approach
includes a menu of enhanced enforcement actions, one or more of which
must be included in an Enhanced Enforcement Report developed under the
program and implemented within 60 days of a triggering event. This menu
was included as Attachment B to CARB Resolution 18-50 (October 25,
2018) through which CARB adopted the 2018 SIP Update as a revision to
the California SIP. The menu lists eight source categories over which
CARB retains primary enforcement authority--including on- and off-road
mobile sources, fuels, marine vessels and consumer products--and
includes options for enhanced enforcement actions applicable to each
source category. Examples of the types of specific actions listed in
the menu of actions included as Attachment B include additional audits
of commercial truck and bus fleets operating in the region; additional
investigations of manufacturers, retailers and installers of
aftermarket ``defeat devices''; and use of additional data, including
remote sensing data, to identify high-emitting off-road vehicles and
equipment.
    We acknowledge that CARB retains the discretion to select among the
actions and to supplement the selected actions with additional actions
not listed in Attachment B; however, Resolution 18-50 contains certain
limits on that discretion. For example, Resolution 18-50 states that
the Enhanced Enforcement Report cannot conclude that no enhanced
enforcement action is appropriate.\32\ Resolution 18-50 also states
that the Enhanced Enforcement Program must include at least some of the
menu of actions included in Attachment B.\33\ As such, the menu in
Attachment B serves as a floor for enforcement responses to a
triggering event under the program. Moreover, the enforcement actions
must be implemented within 60 days of the triggering event. Because
CARB's Enhanced Enforcement Activities Program can be utilized on a
state-wide basis, it is not feasible to predict the specific events
that would lead to triggering of this measure in a specific
nonattainment area (i.e., failure to meet RFP or attainment deadlines.
In light of the variety of conditions that could lead to a specific
triggering event, we believe a menu-based approach is reasonable and
that the menu of enhanced enforcement actions in Attachment B includes
reasonable and appropriate responses to potential triggering events.
---------------------------------------------------------------------------

    \32\ See page 7 of CARB Resolution 18-50.
    \33\ Id.
---------------------------------------------------------------------------

    We note that the EPA has approved other rules that include a menu
of specific control measures from which affected sources have the
discretion to select a single measure for implementation, where the
need for flexibility was clearly demonstrated, and the EPA's approval
of those rules has withstood legal challenge.\34\ In this case, the
need for flexibility is clear because it is not feasible to know the
exact nature of any potential future violations of SIP requirements at
this time.
---------------------------------------------------------------------------

    \34\ See Vigil v. Leavitt, 381 F.3d 826 (9th Cir. 2004)
(Upholding the EPA's approval of Arizona's general permit rule for
agricultural sources) and Latino Issues Forum v. EPA, 558 F.3d 936
(9th Cir. 2009) (Upholding the EPA's approval of San Joaquin Valley
Unified Air Pollution Control District Rule 4550).
---------------------------------------------------------------------------

    Nonetheless, we recognize that the enforcement actions listed in
Attachment B are themselves general in nature and lack the specificity
found in menu-type rules that the EPA has approved in the past. The
lack of specificity, while understandable for the reasons described
above, means that the program itself does not ``provide for the
implementation of specific measures'' to address ozone emissions that
would ``take effect . . . without further action by the State or the
Administrator'' upon a triggering event as required under CAA sections
172(c)(9) and 182(c)(9). Accordingly, we find the program to be a SIP-
strengthening portion of the contingency measure element that we are
approving conditionally today, rather than as a stand-alone contingency
measure. We believe CARB's program is meritorious and that the reports
and enhanced enforcement actions would likely achieve additional
emissions

reductions to address a failure to meet an RFP milestone or a failure
to attain; however, the program, as currently conceived, fails to
include all of the characteristics necessary to provide for a stand-
alone contingency measure.
    Likewise, while we recognize that the lack of specificity in the
program does limit some enforcement of specific enhanced enforcement
actions CARB may identify after a future triggering event, the
discretion afforded to CARB under Resolution 18-50 to select specific
actions listed in the menu does not preclude all enforcement against
CARB. First, CARB's Resolution 18-50 is being conditionally approved as
part of the SIP in today's action; therefore, its provisions will be
enforceable by the EPA and the public. Accordingly, if CARB were to
fail to implement the Enhanced Enforcement Activities Program after a
triggering event, the EPA or the public could initiate an enforcement
action. Furthermore, Resolution 18-50 requires CARB to implement the
specific Enhanced Enforcement Program selected by CARB for a given area
as documented in the report.\35\ In addition, to the extent that CARB's
Enhanced Enforcement Report fails to include any of the actions
included in the menu of actions listed in Attachment B and/or failed to
implement the enhanced enforcement actions within 60 days of the
triggering event, that would not comply with the SIP-approved
program,\36\ and the EPA or the public could initiate an enforcement
action against CARB to compel the inclusion and implementation of at
least one of the actions from the menu.
---------------------------------------------------------------------------

    \35\ See page 6, paragraph 1.b. of CARB Resolution 18-50
(October 25, 2018).
    \36\ See id. at page 7, paragraph 4.
---------------------------------------------------------------------------

    Although we have decided that, for the specific reasons described
above, the Enhanced Enforcement Activities Program as defined in the
2018 SIP Update and Resolution 18-50 does not meet all of the
characteristics needed for a stand-alone contingency measure under CAA
sections 172(c)(9) and 182(c)(9), we continue to find the contingency
measure element for San Joaquin Valley nonattainment area for the 2008
ozone standard acceptable for conditional approval on the basis of the
District's and CARB's commitment to submit a District measure that will
eliminate an exemption in the event of a failure to achieve an RFP
milestone or failure to attain by the applicable attainment date. In
other words, we find the Enhanced Enforcement Activities Program to be
a SIP-strengthening portion of the contingency measure element for San
Joaquin Valley nonattainment area for the 2008 ozone standard that we
are conditionally approving in this action.
    Comment #6: AIR asserts that the contents of the Enhanced
Enforcement Program will not be independently enforceable by the EPA or
citizens because the Enhanced Enforcement Activities Program has not
and will not be submitted to the EPA for review or approval into the
SIP.
    Response #6: While there are parts of the Enhanced Enforcement
Activities Program that will be approved into the SIP, we agree that
the Enhanced Enforcement Program resulting from any specific triggering
event, as set forth in the Enhanced Enforcement Report, will not be
submitted to the EPA for review and approval into the SIP. In this
context, the Enhanced Enforcement Program refers to the specific
enforcement actions that CARB selects after consideration of various
factors such as the enforcement history, inspection locations and
compliance status of emissions sources in the area.\37\ The menu of
enforcement actions listed in Attachment B lacks specificity (as
described in Response #5) and so the specific actions that would make
up the Enhanced Enforcement Program would not have been defined and
adopted in the SIP. CARB has obligated itself to implementing the
Enhanced Enforcement Program documented in the Enhanced Enforcement
Report,\38\ and thus could be compelled through citizen enforcement to
implement the actions set forth in the Enhanced Enforcement Report.
However, we agree that the specific contents of the Enhanced
Enforcement Program as documented in the Enhanced Enforcement Report
remain largely at CARB's discretion due to the program's structure and
the general nature of enforcement actions listed in Attachment B. Thus,
due to the lack of specificity of the measures as described in our
response to comment #5, we no longer consider the Enhanced Enforcement
Activities Program (in its current form) to include all of the
necessary characteristics of a stand-alone contingency measure, but we
find it to be a SIP-strengthening portion of the contingency measure
element that we are approving conditionally in today's action.
---------------------------------------------------------------------------

    \37\ The ``Enhanced Enforcement Program'' is distinct from the
``Enhanced Enforcement Activities Program.'' As noted above, the
``Enhanced Enforcement Program'' refers to the specific enforcement
actions described in the ``Enhanced Enforcement Report.'' In our
notice of proposed rulemaking, 83 FR 61346 (November 29, 2018), at
page 61356, we define the ``Enhanced Enforcement Activities
Program'' as an umbrella term describing the program that CARB has
set forth in Chapter X of the 2018 SIP Update and Resolution 18-50.
Though the Enhanced Enforcement Program as described in the Enhanced
Enforcement Report will not be submitted into the SIP, the Enhanced
Enforcement Activities Program is being conditionally approved into
the SIP in today's action.
    \38\ See page 77 of the 2018 SIP Update.
---------------------------------------------------------------------------

    Comment #7: AIR asserts that the EPA does not have the Enhanced
Enforcement Activities Program before it now for review, and therefore
the EPA cannot evaluate the Enhanced Enforcement Activities Program to
determine whether it meets EPA's SIP measure criteria standards
(quantifiable, enforceable, surplus and permanent).
    Response #7: Though CARB has submitted the Enhanced Enforcement
Activities Program to the EPA as a revision to the SIP, we agree that
the Enhanced Enforcement Program (refer to footnote 37) as set forth in
the Enhanced Enforcement Report will not be submitted to the EPA for
review and approval into the SIP. As explained more fully in our
response to comment #5, although we continue to find that the Enhanced
Enforcement Activities Program has merit and will likely achieve
emissions reductions beyond those that would otherwise occur to address
a failure to meet an RFP milestone or failure to attain, we no longer
consider the Enhanced Enforcement Activities Program (in its current
form) to include all of the characteristics necessary for a stand-alone
contingency measure to fulfill the requirements of CAA section
172(c)(9) and 182(c)(9), but we find the program to be SIP-
strengthening and are including it as part of our conditional approval
of the contingency measure element.
    Comment #8: AIR asserts that the Enhanced Enforcement Activities
Program fails as a contingency measure because such measures must be
included as part of the SIP and must take effect (after the triggering
event) without further action by the state or the EPA, and, in
contrast, the Enhanced Enforcement Activities Program would not be
included in the SIP and would require CARB to, among other things, take
several additional actions prior to implementation, such as adoption of
a report, commitment of enforcement resources, investigation of
responsible parties for enforcement, prosecution of any identified
violations, and filing of a final report documenting the activities and
emissions reductions resulting from enhanced enforcement.
    Response #8: AIR is correct that sections 172(c)(9) and 182(c)(9)
specify that the EPA must approve the contingency measures as part of
the SIP

and the measures must be structured so as to take effect without
further significant action by the state or the EPA. As noted above, we
are no longer approving the Enhanced Enforcement Activities Program as
a stand-alone contingency measure, but we find the program to be SIP-
strengthening and are including it as part of our conditional approval
of the contingency measure element.
    We disagree, however, that the Enhanced Enforcement Activities
Program is not structured so as to take effect without further action
by the state or the EPA. The EPA has long interpreted the phrase
``without further action'' in section 172(c)(9), and section 182(c)(9),
not to preclude contingency measures that may require some additional
actions, so long as those pertain to effective implementation of the
measures within a short period of time. The EPA provided its
interpretation of this requirement in the General Preamble (57 FR 13498
(April 16, 1992)) published in the wake of the Clean Air Act Amendments
of 1990. In the General Preamble, we stated the following in connection
with the requirement to take effect without further action by the state
or EPA:

    The EPA interprets this requirement to be that no further
rulemaking activities by the State or EPA would be needed to
implement the contingency measures. The EPA recognizes that certain
actions, such as notification of sources, modification of permits,
etc., would probably be needed before a measure could be implemented
effectively. States must show that their contingency measures can be
implemented with minimal further action on their part and with no
additional rulemaking actions such as public hearings or legislative
review. In general, EPA will expect all actions needed to affect
full implementation of the measures to occur with 60 days after EPA
notifies the State of its failure. \39\
---------------------------------------------------------------------------

    \39\ 57 FR 13498, at 13512 (April 16, 1992).

    The EPA has reiterated this interpretation of the contingency
measure requirements many times in the intervening years, including the
2008 Ozone SRR applicable to this action.\40\
---------------------------------------------------------------------------

    \40\ 80 FR 12264, 12285 (March 6, 2015).
---------------------------------------------------------------------------

    Under the Enhanced Enforcement Activities Program, once triggered,
implementation would occur within 60 days without the need for
additional rulemaking activity by CARB or the EPA.\41\ CARB would,
however, need to undertake certain actions prior to implementation,
primarily the preparation of a report titled ``Enhanced Enforcement
Report.'' In the Enhanced Enforcement Report, CARB enforcement staff
will evaluate a number of factors (e.g., enforcement history and
compliance status), identify the probable causes of the failure (to
meet the RFP milestone or to attain the NAAQS), and specify the type
and quantity of additional enforcement resources that will be
reallocated to the particular area (referred to as the ``Enhanced
Enforcement Program'' for the area). The Executive Officer will then
direct enhanced enforcement activities in accordance with the Enhanced
Enforcement Program (as documented in the Enhanced Enforcement Report)
that is selected for the area.\42\ We believe that the preparation by
CARB enforcement staff of the Enhanced Enforcement Report and the role
of the CARB Executive Officer to direct enhanced enforcement activities
in accordance with the report are minimal administrative types of
actions that are consistent with our interpretation of the requirement
for contingency measures to take effect without further action by the
state or the EPA. As noted by the EPA in the General Preamble, actions
by a state such as modification of permits may be needed for effective
implementation of a contingency measure, and we conclude that the
Enhanced Enforcement Report and identification of specific actions for
additional enforcement are analogous implementation actions. We believe
that the 60-day period for this process assures that the contingency
measure will take effect in a timely fashion as intended.
---------------------------------------------------------------------------

    \41\ See page 7 of CARB Resolution 18-50: ``A given Enhanced
Enforcement Report (as described above) may not conclude that no
enhanced enforcement action is appropriate; U.S. EPA's finding that
a covered area has failed to meet an RFP milestone or failed to
attain must result in some enhanced enforcement action for the
relevant district and those actions must begin within 60 days of the
finding.''
    \42\ See page 77 of the 2018 SIP Update for a full description
of the actions CARB will take in the event of a triggering event.
---------------------------------------------------------------------------

    Comment #9: AIR asserts that the EPA interprets the CAA to mean
that the 2018 SIP Update must include contingency measures that would
result in emissions reductions equivalent to at least one year's worth
of RFP. AIR states that the EPA has failed to articulate a factual
basis on which it could make the finding that the Enhanced Enforcement
Activities Program and the District's architectural coating exemption
removal rule would together achieve that quantity of emission
reductions.
    Response #9: As noted in our November 29, 2018 proposed rulemaking,
neither the CAA nor the EPA's implementing regulations for the ozone
NAAQS establish a specific amount of emissions reductions that
implementation of contingency measures must achieve. AIR is correct,
however, that the EPA has recommended in guidance that contingency
measures should provide emissions reductions approximately equivalent
to one year's worth of RFP, which, with respect to ozone in the San
Joaquin Valley nonattainment area, amounts to approximately 11.4 tpd of
VOC or NOX reductions.\43\
---------------------------------------------------------------------------

    \43\ 83 FR 61346, at 61357 (November 29, 2018).
---------------------------------------------------------------------------

    In making the recommendation that contingency measures achieve one
year's worth of RFP, the EPA has considered the overarching purpose of
such measures in the context of attainment planning. The purpose of
emissions reductions from implementation of contingency measures is to
ensure that, in the event of a failure to meet an RFP milestone or a
failure to attain the NAAQS by the applicable attainment date, the
state will continue to make progress toward attainment at a rate
similar to that specified under the RFP requirements and that the state
will achieve these reductions while conducting additional control
measure development and implementation as necessary to correct the RFP
shortfall or as part of a new attainment demonstration plan.\44\ The
facts and circumstances of a given nonattainment area may justify
larger or smaller amounts of emission reductions.
---------------------------------------------------------------------------

    \44\ 57 FR 13498, at 13512 (April 16, 1992).
---------------------------------------------------------------------------

    The EPA has also interpreted the Act to allow already-implemented
measures to qualify as contingency measures so long as the emissions
reductions from such measures are surplus to those necessary for RFP or
attainment. In light of the Bahr decision, already-implemented measures
no longer qualify as contingency measures for SIP purposes in the
states located within the jurisdiction of the Ninth Circuit Court of
Appeals. Thus, in the states affected by the Bahr decision, the EPA
evaluates contingency measure SIP elements to determine whether they
include contingency measures that are structured to meet the statutory
requirements set forth in CAA section 172(c)(9) and 182(c)(9) (e.g.,
structured to take effect prospectively in the event of a failure to
achieve an RFP milestone or to attain by the applicable attainment
date) and whether the contingency measure or measures would provide
emissions reductions that, when considered with emissions reductions
from already-implemented measures or other extenuating circumstances,
ensure sufficient continued progress in the

event of a failure to achieve an RFP milestone or to attain the ozone
NAAQS by the applicable attainment date. We continue to evaluate the
sufficiency of continued progress that will result from contingency
measures in light of our guidance, but in appropriate circumstances, do
not believe that the contingency measures themselves must provide for
one year's worth of RFP so long as sufficient progress would be
maintained by the contingency measures plus other sources of surplus
emissions reductions while the state conducts additional control
measure development and implementation as necessary to correct the RFP
shortfall or as part of a new attainment demonstration plan. In other
words, if there are additional emission reductions projected to occur
that a state has not relied upon for purposes of RFP or attainment or
to meet other nonattainment plan requirements, and that result from
measures the state has not adopted as contingency measures, then those
reductions may support EPA approval of contingency measures identified
by the state even if they would result in less than one year's worth of
RFP in appropriate circumstances.
    In this instance, the contingency measure element of the 2016 Ozone
Plan, as modified by the 2018 SIP Update, and supplemented by the
commitments to adopt and submit a local contingency measure, relies
upon a to-be-adopted District contingency measure (i.e., the removal of
the small container exemption from the current District architectural
coatings rule). In our proposed rulemaking, we identify an analogous
rulemaking by the South Coast Air Quality Management District as the
source for our estimate of 1-tpd of emissions reductions from the to-
be-adopted District contingency measure. As for the Enhanced
Enforcement Activities Program, although we believe that the measure
would result in emissions reductions, we found that the reductions are
not reasonably quantifiable at this time given the range of potential
enforcement actions that could be taken. While we consider the
program's potential value in mitigating the effects of a failure to
meet an RFP milestone or to attain the standard by the attainment date,
we did not credit the Enhanced Enforcement Activities Program as
achieving any emissions reductions.
    As to whether the 1-tpd of emissions reductions from the
contingency measures would provide for sufficient continued progress in
the event of a failure to achieve an RFP milestone or failure to
attain, we reviewed the documentation provided in the 2018 SIP Update
of ``surplus'' (i.e., those over and above the emissions reductions
necessary to demonstrate RFP in the San Joaquin Valley nonattainment
area) reductions from CARB's already-adopted mobile source control
program in the RFP milestone years and the year-over-year emissions
reductions expected in the year following the attainment year. For the
San Joaquin Valley nonattainment area, CARB's estimates of ``surplus''
reductions in the various RFP milestones years (ranging from 92.4 tpd
to 157.4 tpd) provide the factual basis for us to conclude that the to-
be-adopted District contingency measure need not in itself achieve one
year's worth of RFP. The 1 tpd reduction from the contingency measures
would be sufficient even though it is far less than 11.4 tpd (i.e., one
year's worth of RFP) because already-implemented measures (although not
relied upon for the purposes of meeting the statutory contingency
measure requirement) will also ensure sufficient continued progress in
the event of a failure to achieve an RFP milestone.
    For attainment contingency measure purposes, we noted that overall
regional emissions are expected to be approximately 1 tpd of
NOX lower in 2032 than in 2031 and that the contingency
measures (1 tpd) plus the year-over-year reduction in regional
emissions (1 tpd) would not provide for sufficient progress during the
time when a new attainment demonstration plan is being prepared, absent
countervailing circumstances. However, we also noted CARB had made an 8
tpd NOX aggregate emissions reduction commitment in the 2016
State Strategy for the San Joaquin Valley nonattainment area in year
2031, and that CARB's aggregate commitment would result in emissions
reductions beyond those needed for RFP or attainment, and thus would
reduce the potential for the San Joaquin Valley to fail to attain the
2008 ozone NAAQS by the 2031 attainment date.\45\ (We recently took
final action in a separate action to approve CARB's 8 tpd aggregate
commitment from the 2016 State Strategy as part of the SIP.\46\) The 1
tpd year-over-year reduction in regional emissions--in addition to the
8 tpd reduction in emissions from CARB's aggregate commitment and the
additional potential emission reductions of the SIP-strengthening
Enhanced Enforcement Activities Program--provide us with the factual
basis to conclude that the 1 tpd reduction from the contingency measure
would be sufficient to ensure continued progress in the event of a
failure to attain the ozone NAAQS by the applicable attainment date
notwithstanding the fact that the District contingency measure itself
does not provide one year's worth of RFP.
---------------------------------------------------------------------------

    \45\ To be clear, the 8 tpd NOX aggregate emissions
reduction commitment by CARB in the 2016 State Strategy was not
submitted, and was not approved, as a contingency measure. Rather,
we consider the existence of the aggregate commitment in the context
of evaluating whether the reductions associated with the contingency
measure element would be sufficient to provide the EPA with the
basis to approve the contingency measure element as meeting the
applicable requirements of the CAA for San Joaquin Valley for the
2008 ozone NAAQS.
    \46\ See 84 FR 3302 (February 12, 2019).
---------------------------------------------------------------------------

IV. Final Action

    For the reasons discussed in our proposed action and in responses
to comments above, the EPA is taking final action under CAA section
110(k)(3) to approve as a revision to the California SIP the following
portion of the San Joaquin Valley 2016 Ozone Plan submitted by CARB on
August 24, 2016: \47\
---------------------------------------------------------------------------

    \47\ As noted previously, the EPA has already approved the
portions of the 2016 Ozone Plan that relate to the Reasonably
Available Control Technology (RACT), Reasonably Available Control
Measure (RACM), attainment demonstration, and vehicle miles traveled
(VMT) offset demonstration requirements, among others. For approval
of the elements related to the RACT SIP requirement see 83 FR 41006
(August 31, 2018). For approval of other elements see 84 FR 3302
(February 12, 2019).
---------------------------------------------------------------------------

     Base year emissions inventory as meeting the requirements
of CAA sections 172(c)(3) and 182(a)(1) and 40 CFR 51.1115.
    The EPA is also taking final action to approve as a revision to the
California SIP the following portions of the 2018 SIP Update to the
California State Implementation Plan, submitted by CARB on December 5,
2018:
     RFP demonstration for the San Joaquin Valley as meeting
the requirements of CAA sections 172(c)(2), 182(b)(1), and
182(c)(2)(B), and 40 CFR 51.1110(a)(2)(ii); and
     Motor vehicle emissions budgets for the RFP milestone
years of 2020, 2023, 2026, 2029, and the attainment year of 2031 (see
Table 1, above) for the San Joaquin Valley nonattainment area because
they are consistent with the RFP demonstration approved herein and the
attainment demonstration previously approved and meet the other
adequacy criteria in 40 CFR 93.118(e).\48\
---------------------------------------------------------------------------

    \48\ On February 12, 2019, the EPA finalized approval of motor
vehicle emissions budgets for year 2031 for San Joaquin Valley for
the 2008 ozone standards. See 84 FR 3302. The revised budgets for
2031 that we are approving in this action replace the budgets that
we approved through our action published on February 12, 2019. In
addition, the MVEBs that we are finding adequate and approving today
are also replacing the MVEBs from the 2016 Ozone Plan that we
previously found adequate (see 82 FR 29547, June 29, 2017) for use
in conformity determinations by transportation agencies in the San
Joaquin Valley.

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

    Lastly, we are taking final action to approve conditionally the
contingency measure element of the 2016 Ozone Plan, as modified by the
2018 SIP Update, as meeting the requirements of CAA sections 172(c)(9)
and 182(c)(9) based on commitments by CARB and the District to
supplement the element through submission of a SIP revision within one
year of final conditional approval that will include a revised District
architectural coatings rule removing an exemption upon a failure to
achieve an RFP milestone or to attain the 2008 ozone NAAQS by the
applicable attainment date.

V. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Act and
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, the EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this action merely approves or conditionally approves
state law as meeting Federal requirements and does not impose
additional requirements beyond those imposed by state law. For that
reason, this action:
     Is not a significant regulatory action subject to review
by the Office of Management and Budget under Executive Orders 12866 (58
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     Is not an Executive Order 13771 (82 FR 9339, February 2,
2017) regulatory action because SIP approvals are exempted under
Executive Order 12866;
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the Clean Air Act; and
     Does not provide the EPA with the discretionary authority
to address, as appropriate, disproportionate human health or
environmental effects, using practicable and legally permissible
methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, the SIP is not approved to apply on any Indian
reservation land or in any other area where the EPA or an Indian tribe
has demonstrated that a tribe has jurisdiction. In those areas of
Indian country, this final rule does not have tribal implications and
will not impose substantial direct costs on tribal governments or
preempt tribal law as specified by Executive Order 13175 (65 FR 67249,
November 9, 2000).
    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. The EPA will submit a report containing this action 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 May 24, 2019. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this action 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 in 40 CFR Part 52

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

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

    Dated: February 15, 2019.
Deborah Jordan,
Acting Regional Administrator, Region IX.

    Chapter I, title 40 of the Code of Federal Regulations is amended
as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

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

Subpart F--California

0
2. Section 52.220 is amended by adding paragraphs (c)(496)(ii)(B)(4),
and (c)(514) to read as follows:

Sec.  52.220   Identification of plan--in part.

* * * * *
    (c) * * *
    (496) * * *
    (ii) * * *
    (B) * * *
    (4) 2016 Ozone Plan for 2008 8-Hour Ozone Standard, adopted June
16, 2016, subchapters 3.11.1 (``Emission Inventory Requirements'') and
6.4 (``Contingency for Attainment''), only.
* * * * *
    (514) The following plan was submitted on December 5, 2018, by the
Governor's designee.
    (i) [Reserved]
    (ii) Additional materials. (A) California Air Resources Board.
    (1) Resolution 18-50, 2018 Updates to the California State
Implementation Plan, October 25, 2018, including Attachments A
(``Covered Districts''), B (``Menu of Enhanced Enforcement Actions''),
and C (``Correction of Typographical Error'').
    (2) 2018 Updates to the California State Implementation Plan,
adopted on October 25, 2018, chapter VIII (``SIP Elements for the San
Joaquin Valley''), chapter X (``Contingency Measures''), and Appendix A
(``Nonattainment Area Inventories''), pages A-1, A-2 and A-27 through
A-30, only.

0
3. Section 52.248 is amended by adding paragraph (g) to read as
follows:

Sec.  52.248   Identification of plan--conditional approval.

* * * * *
    (g) The EPA is conditionally approving the California State
Implementation Plan (SIP) for San

Joaquin Valley for the 2008 ozone NAAQS with respect to the contingency
measure requirements of CAA sections 172(c)(9) and 182(c)(9). The
conditional approval is based on a commitment from the San Joaquin
Valley Unified Air Pollution Control District (District) dated October
18, 2018 to adopt specific rule revisions, and a commitment from the
California Air Resources Board (CARB) dated October 30, 2018 to submit
the amended District rule to the EPA within 12 months of the effective
date of the final conditional approval. If the District or CARB fail to
meet their commitment within one year of the effective date of the
final conditional approval, the conditional approval is treated as a
disapproval.

[FR Doc. 2019-05159 Filed 3-22-19; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 76, Number 155 (Thursday, August 11, 2011)]
[Notices]
[Pages 49807-49809]
[FR Doc No: 2011-20357]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65042; File No. SR-BX-2011-051]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the Proprietary Trader Examination

August 5, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on August 2, 2011, NASDAQ OMX BX, Inc. (``Exchange'' or ``BX'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I and
II, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    BX is filing with the Commission a proposed rule change to amend
its Rule 1032, Categories of Representative Registration, to adopt a
new limited category of representative registration for proprietary
traders, as described further below. BX will implement the proposal
upon notice to its membership.
    The text of the proposed rule change is available at http:/
nasdaqomxbx.cchwallstreet.com, at BX's principal office, and at the
Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange 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. The Exchange 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
    The purpose of the proposed rule change is to recognize a new
category of limited representative registration for proprietary
traders. Currently, under BX rules, persons performing proprietary
trading functions fall within the definition of representative in Rule
1011, because Rule 1011 includes persons who are engaged in the
investment banking or securities business of a member. A
``Representative'' means an Associated Person \3\ of a registered
broker or dealer who is engaged in the investment banking or securities
business for the member including the functions of supervision,
solicitation or conduct of business in securities or who is engaged in
the training of persons associated with a broker or dealer for any of
these functions are designated as representatives. As provided in Rule
1031, all Representatives of BX members are required to be registered
with the Exchange, and Representatives that are so registered are
referred to as ``Registered Representatives.''
---------------------------------------------------------------------------

    \3\ Pursuant to Rule 1011(b), the term ``Associated Person''
means any partner, officer, director, or branch manager of a BX
member or Applicant (or person occupying a similar status or
performing similar functions), any person directly or indirectly
controlling, controlled by, or under common control with such BX
member or Applicant, or any employee of such BX member or Applicant,
except that any person associated with a BX member or Applicant
whose functions are solely clerical or ministerial shall not be
included in the meaning of such term for purposes of the BX Equity
Rules.
---------------------------------------------------------------------------

    BX has been working with FINRA and certain other exchanges, many of
which have recently enhanced their registration requirements to require
the registration of associated persons,\4\ to develop the content
outline and qualification examination that would be applicable to
proprietary traders. This new qualification examination, the Series 56,
was recently filed with the Commission; \5\ BX expects to file the
content outline with the Commission as well and make it available upon
availability in WebCRD. Accordingly, BX is amending its rules to
recognize the new registration category ``Proprietary Trader'' and,
separately, the new examination, the Series 56.
---------------------------------------------------------------------------

    \4\ See e.g., Securities Exchange Act Release Nos. 63843
(February 4, 2011), 76 FR 7884 (February 11, 2011) (SR-ISE-2010-
115); and 63314 (November 12, 2010), 75 FR 70957 (November 19,
2010)(SR-CBOE-2010-084).
    \5\ One exchange has thus far filed a proposed rule change
respecting the Series 56 content outline, which has become
effective. See Securities Exchange Act Release No. 64699 (June 17,
2011), 76 FR 36945 (June 23, 2011)(SR-CBOE-2011-056).
---------------------------------------------------------------------------

    Specifically, BX proposes to adopt new subparagraph (b) to Rule
1032 to recognize the ``Proprietary Trader'' category of registration.
The new Proprietary Trader category would be limited to persons
performing the functions specified in new Rule 1032(b), which is
proprietary trading. Persons who deal with the public do not fit in
this registration category and must continue to register as General
Securities Representatives. BX believes that the new limited
registration category and qualification examination are appropriate,
because they are tailored to proprietary trading functions. Today,
these persons are required to register as a General Securities
Representative and pass the Series 7 examination, which the Exchange
believes covers a great deal of material that is not relevant to
proprietary trading functions. Instead, the Series 56 covers both
equities and options trading rules, but not all of the rules applicable
to firms and persons conducting a public business. As stated above, BX
will describe the Series 56 in greater detail in a separate proposed
rule change.
    Of course, persons registered in the new category would be subject
to the continuing education requirements of Rule 1120.\6\ In addition,
the process for registering continues to be covered by Rule 1140, which
provides that WebCRD must be used.
---------------------------------------------------------------------------

    \6\ See BX Rule 1120(a)(5).
---------------------------------------------------------------------------

    Today, because BX rules require it, persons associated with BX
members are already registered as General Securities Representatives
and have passed the Series 7 examination.\7\ This proposal does not
require proprietary traders who have already registered as General
Securities Representatives and have passed the Series 7 examination to
register under the new category as Proprietary Traders or to pass the
Series 56, because BX believes this would be redundant. Persons who are
registered as General Securities Representatives and have passed the
Series 7 may, of course, perform the functions of a Proprietary Trader,
because the new Proprietary Trader registration category is a limited
registration category. This

proposal does not preclude associated persons from registering as
General Securities Representatives and passing the Series 7 examination
and then functioning as a Proprietary Trader.
---------------------------------------------------------------------------

    \7\ See BX Rule 1031.
---------------------------------------------------------------------------

    BX expects that new members might consider the new category when
applying for BX membership, once the new category and examination
become available to BX members in WebCRD. Accordingly, BX believes that
the new category should be helpful to attracting new members to BX,
while at the same time preserving the important goals of appropriate
registration and qualification for persons in the securities business.
Additionally, members who hire new associated persons might choose to
register those persons in the new category.
    Unlike the associated persons of proprietary trading firms covered
by this proposal, associated persons of firms that are NOT proprietary
trading firms continue to be subject to registration as General
Securities Representatives and have to pass the Series 7 examination.
They are not eligible for the new registration category and
examination.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \8\ in general, and furthers the objectives of: (1)
Section 6(c)(3)(B) of the Act,\9\ pursuant to which a national
securities exchange prescribes standards of training, experience and
competence for members and their associated persons; and (2) Section
6(b)(5) of the Act,\10\ in that it is designed, among other things, to
prevent fraudulent and manipulative acts and practices, 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, by
offering a new, limited registration category to certain associated
persons of BX members. The Exchange believes that these new
requirements should help ensure that all associated persons engaged in
a securities business are, and will continue to be, properly trained
and qualified to perform their functions, because the new category and
examination are limited and tailored to persons performing proprietary
trading functions.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78(c)(3)(B) [sic].
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    BX does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act.

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

    No written comments were either solicited or received.

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

    Pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) \12\ thereunder, the Exchange has designated this proposal as
one that effects a change that: (i) Does not significantly affect the
protection of investors or the public interest; (ii) does not impose
any significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest. Rule 19b-4(f)(6) \13\
requires a self-regulatory organization to give the Commission written
notice of its intent to file the proposed rule change at least five
business days prior to the date of filing of the proposed rule change,
or such shorter time as designated by the Commission. The Exchange has
satisfied this requirement.
    Under Rule 19b-4(f)(6) of the Act,\14\ a proposal does not become
operative for 30 days after the date of its filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest. The Exchange requests that the
Commission waive the 30 day operative period for this filing so that it
may become effective and operative upon filing with the Commission
pursuant to Section 19(b)(3)(A) \15\ of the Act and subparagraph (f)(6)
thereunder. The Exchange believes waiving the 30-day operative delay is
consistent with the protection of investors and the public interest as
the waiver will allow the Exchange to make the new registration
category available near the same time as other exchanges.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ Id.
    \14\ Id.
    \15\ 15 U.S.C. 78s(b)(3)(A).
---------------------------------------------------------------------------

    For the reason stated above, the Commission believes that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest and designates the proposal as
operative upon filing.\16\
---------------------------------------------------------------------------

    \16\ For purposes only of waiving the operative delay of this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f). See also 17 CFR 200.30-3(a)(59).
---------------------------------------------------------------------------

    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.

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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-BX-2011-051 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-BX-2011-051. 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 Web site 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

a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of BX. 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 publicly available. All
submissions should refer to File Number SR-BX-2011-051 and should be
submitted on or before September 1, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-20357 Filed 8-10-11; 8:45 am]
BILLING CODE 8011-01-P