[Federal Register Volume 88, Number 123 (Wednesday, June 28, 2023)]
[Notices]
[Pages 41964-41966]
[FR Doc No: 2023-13729]

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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2023-N-0895]

Agency Information Collection Activities; Submission for Office
of Management and Budget Review; Comment Request; Imports and
Electronic Import Entries

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA) is announcing that a
proposed collection of information has been submitted to the Office of
Management and Budget (OMB) for review and clearance under the
Paperwork Reduction Act of 1995.

DATES: Submit written comments (including recommendations) on the
collection of information by July 28, 2023.

ADDRESSES: To ensure that comments on the information collection are
received, OMB recommends that written comments be submitted to https://www.reginfo.gov/public/do/PRAMain. Find this particular information
collection by selecting ``Currently under Review--Open for Public
Comments'' or by using the search function. The OMB control number for
this information collection is 0910-0046. Also include the FDA docket
number found in brackets in the heading of this document.

FOR FURTHER INFORMATION CONTACT: Domini Bean, Office of Operations,
Food and Drug Administration, Three White Flint North, 10A-12M, 11601
Landsdown St., North Bethesda, MD 20852,<PHONE_NUMBER>,
[email protected].

SUPPLEMENTARY INFORMATION: In compliance with 44 U.S.C. 3507, FDA has
submitted the following proposed collection of information to OMB for
review and clearance.

Imports and Electronic Import Entries

OMB Control Number 0910-0046--Revision

    This information collection supports Agency regulations found in 21
CFR part 1, subparts D (21 CFR 1.70 through 1.81) and E (21 CFR 1.83
through 1.101), governing FDA import activities and related Agency
guidance. Specifically, the regulations prescribe the required data
elements that respondents must submit when importing, or offering for
import, an FDA-regulated article into the United States. Review of the
data elements allows FDA to continue to meet its responsibilities
pertaining to current submission requirements established by the U.S.
Customs and Border Protection (CBP) related to the submission of entry
information in using its Automated Commercial Environment (ACE) system,
or any CBP-authorized electronic data interchange system. The
regulations were recently revised through rulemaking to include data
elements associated with import entries for veterinary devices (RIN
0910-AH66).
    Respondents (ACE filers) submit important and useful information
about FDA-regulated products being imported or offered for import into
the United States so that we may effectively and efficiently review
products and determine their admissibility. In addition, and as set
forth in the regulations, certain product types are subject to
additional data elements (for example, 21 CFR 1.77 prescribes
additional data elements for radiation-emitting products), as well as
those data elements applicable to all products.
    The information collection also includes our weekly entry filing
program (WEF). More detailed information on Foreign Trade Zones (FTZ)/
WEF, is available at https://www.fda.gov/industry/import-basics/foreign-trade-zonesweekly-entry-filing. The WEF program allows entry
filers to file a single entry estimating the amount of merchandise
anticipated to be removed from an FTZ and offered for U.S. consumption
during a 7-day period. To participate, we recommend respondents who
wish to file a weekly entry of FDA-regulated products with CBP to first
request a preliminary assessment from FDA. As part of the assessment,
we also recommend submitting specific data elements, as discussed in
the assessment. The information helps us appropriately route
submissions within the Agency. Information on whether a product is
stored or manufactured in the zone is necessary for FDA to determine
the applicable admissibility requirements. The FTZ and port information
is necessary to ensure that basic requirements in 19 CFR part 146 are
met. The importer of record (IOR) and manufacturer FDA establishment
identification number information is requested by FDA to expedite the
admissibility review. Requests to participate in the WEF process are
submitted to the FDA Import Division Office covering the intended port
of entry.
    The information collection also includes our Import Trade Auxiliary
Communication System (ITACS). ITACS is used by the import trade
community and was implemented to improve communication with FDA. By
utilizing ITACS, respondents to the information collection have the
ability to establish an account and electronically check the status of
FDA-regulated entries and lines, submit entry documentation, submit the
location of goods availability for those lines targeted for examination
by FDA, and check the estimated laboratory analysis completion dates
for lines that have been sampled. For further information regarding
ITACS, please visit our website at https://www.fda.gov/industry/import-systems/itacs.
    The information collection also includes burden associated with the
use of Form FDA 766 entitled ``Application for Authorization to Relabel
or Recondition Non-compliant Articles'' as the collection instrument
for 21 CFR 1.95. Form FDA 766 facilitates collection of information
associated with certain general enforcement provisions for importing
FDA-regulated articles into the United States. The form is available at
https://www.fda.gov/industry/actions-enforcement/reconditioning.
    Relatedly, we are revising the information collection to include
burden associated with the use of proposed electronic Form FDA 5054

entitled ``New Inquiry Form--Import Compliance Branch.'' Currently,
general drug import inquiries are submitted by email in random format.
We have developed Form FDA 5054 with accompanying instructions to
facilitate responding to drug import inquiries, as well as to track
receipts and responses. We have designed the form to interface with
current Agency IT systems for optimal utility.
    Finally, the information collection includes burden associated with
recommendations found in the procedural Agency guidance entitled ``Pre-
Launch Activities Importation Requests (PLAIR),'' (March 2022).
Historically, when applicants with a pending new drug application,
abbreviated new drug application, or Center for Drug Evaluation and
Research-regulated biologics licensing application (information
collection associated with these submissions is currently approved
under OMB control number 0910-0001) sought to import unapproved
finished dosage form drug products into the United States in
preparation for market launch, we considered such requests, informally
referred to as ``PLAIRs,'' on a case-by-case basis. Since implementing
the PLAIR program in 2013, interest continues to increase, so we have
developed a more formalized process as discussed in the guidance. The
guidance is available at https://www.fda.gov/regulatory-information/search-fda-guidance-documents/pre-launch-activities-importation-requests-plair and was issued consistent with our good guidance
practice regulations in 21 CFR 10.115, which provide for public comment
on Agency guidance documents at any time. The guidance instructs that
PLAIR submissions should be made using the applicant's letterhead and
submitted by email to [email protected] in a file compatible
with Portable Document Format (PDF).
    Description of Respondents: Respondents to the information
collection are domestic and foreign importers of FDA-regulated articles
being imported or offered for import into the United States and entry
filers who submit import entries on behalf of these importers.
    In the Federal Register of April 10, 2023 (88 FR 21195) we
published a 60-day notice requesting public comment on the proposed
collection of information. One comment was received suggesting FDA
underestimated burden that might be attributable to transactional data
entry and necessary preparation. We note that included in our estimate
is the time we believe necessary for associated recordkeeping, and that
we assume certain recordkeeping attendant to import activities is usual
and customary. At the same time, we have increased our estimate
associated with the preparation of line-item data to reflect this
comment. Another comment suggested FDA invest in utility enhancements
that might improve that Agency's electronic interface with importers'
systems. We appreciate this comment and continue to make process
improvements including upgrades in automated technology as our limited
resources permit.
    We estimate the burden of the information collection as follows:

                                                     Table 1--Estimated Annual Reporting Burden 1 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Number of
         21 CFR part 1, Subpart D              Number of     responses per   Total annual           Average  burden per  response           Total hours
                                              respondents     respondent       responses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Importers submission of data elements               95,307           10.14         967,069  0.08 (5 minutes)............................          77,366
 (preparing the required information).
Entry filers (unique lines only)..........           4,133          10,804      44,656,657  0.04466 (2.68 minutes)......................       1,994,336
WEF participants..........................              10               1              10  0.87 (52 minutes)...........................               9
ITACS; creation of new account............             500               1               1  0.5 (30 minutes)............................             250
Form FDA 766 as required under 21 CFR 1.95             324               1             324  0.25 (15 minutes)...........................              81
Form FDA 5054.............................           1,000               1           1,000  .083 (5 minutes)............................              83
Submissions in accordance w/PLAIR.........              80               4             320  16..........................................           5,120
                                           -------------------------------------------------------------------------------------------------------------
    Total.................................  ..............  ..............      45,625,381  ............................................       2,077,245
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of information.
\2\ Numbers have been rounded to reflect electronic submission data.

    Table 1, rows 1 and 2, reflects annual average filing submissions
through December 31, 2022. An IOR may be the owner or purchaser of the
article being imported or offered for import, or a customs broker
licensed by CBP under 19 U.S.C. 1641 who has been designated by the
owner, purchaser, or consignee to file the import entry. There is only
one IOR per entry.
    As reflected in table 1, row 3, we estimate 10 respondents will
submit WEFs. Persons wishing to file weekly entries of FDA-regulated
products are encouraged to provide the information identified so that
FDA can conduct a preliminary admissibility assessment of the
associated products and firms. This submission typically contains the
information FDA requests for multiple products (i.e., the respondent
wishes to file weekly entries for multiple products and submits the
information for each product together). Generally, submissions
involving multiple products are significantly less burdensome on a per-
product basis. Depending on the product and scale of submission, this
estimated burden may fluctuate. Filers submitting in ACE typically use
software that is developed to specifically automate and expedite the
entry submission process and allows filers to automatically upload
entry information. While the WEF submission includes an initial one-
time submission burden, we expect reduced burden over a long term
because filers can subsequently submit one entry covering multiple
withdrawals from the FTZ in any given 7-day period.
    As reflected in table 1, row 4, we estimate that 500 new ITACS
accounts will be created annually. Since developing and implementing
ITACS, we have adjusted this estimate downward to reflect the
transition from initial program interest to average annual maintenance-
level numbers.
    As reflected in table 1, row 5, we estimate the submission of 324
Forms FDA 766 in conjunction with FDA-regulated products. This figure
is based on Agency import data and our experience with the information
collection. We assume it takes respondents 15 minutes to complete and

submit Form FDA 766. Although current instructions communicate that
four copies be submitted (one copy to be returned to respondent), we
plan to update the form to reduce this number.
    Based on inquiries already received and processed by FDA, we
anticipate 1,000 respondents will annually submit Form 5054 pertaining
to general drug import information, as reflected in table 1, row 6.
    As shown in table 1, row 7, we estimate 80 respondents to the PLAIR
program annually, an increase of 10 since our last evaluation of the
information collection. At the same time, we estimate one fewer
submission per respondent to correspond with a decrease in submissions
received by FDA.
    Cumulatively these changes and adjustments result in an increase of
3,067,493 responses and 161,161 hours annually.

    Dated: June 23, 2023.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2023-13729 Filed 6-27-23; 8:45 am]
BILLING CODE 4164-01-P


[Federal Register Volume 86, Number 158 (Thursday, August 19, 2021)]
[Notices]
[Pages 46733-46737]
[FR Doc No: 2021-17760]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92667; File No. SR-NYSE-2020-98]

Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Granting Approval of Proposed Rule Change, as Modified by Amendment
Nos. 2 and 3, To Amend Its Rules To Prohibit Member Organizations From
Seeking Reimbursement, in Certain Circumstances, From Issuers for
Forwarding Proxy and Other Materials to Beneficial Owners

August 13, 2021.

I. Introduction

    On November 30, 2020, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend its rules to prohibit
member organizations from seeking reimbursement, in certain
circumstances, from issuers for

forwarding proxy and other materials to beneficial owners. The proposed
rule change was published for comment in the Federal Register on
December 18, 2020.\3\ On January 29, 2021, pursuant to Section 19(b)(2)
of the Act,\4\ the Commission designated a longer period within which
to either approve the proposed rule change, disapprove the proposed
rule change, or institute proceedings to determine whether to
disapprove the proposed rule change.\5\ On March 17, 2021, the
Commission instituted proceedings under Section 19(b)(2)(B) of the Act
\6\ to determine whether to approve or disapprove the proposed rule
change.\7\ On April 6, 2021, the Exchange filed Amendment No. 1 to the
proposed rule change; the Exchange withdrew that amendment on April 16,
2021. On April 16, 2021, the Exchange filed Amendment No. 2 to the
proposed rule change, which superseded the proposed rule change as
originally filed. The proposed rule change, as modified by Amendment
No. 2, was published for comment in the Federal Register on April 29,
2021.\8\ On June 11, 2021, the Commission designated a longer period
for Commission action on proceedings to determine whether to approve or
disapprove the proposed rule change.\9\ On June 22, 2021, the Exchange
filed partial Amendment No. 3 to the proposed rule change.\10\ This
order approves the proposed rule change, as modified by Amendment Nos.
2 and 3.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 90653 (December 14,
2020), 85 FR 82539 (December 18, 2020) (``Original Notice'').
Comments received on the proposal are available on the Commission's
website at: https://www.sec.gov/comments/sr-nyse-2020-98/srnyse202098.htm.
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 91011 (January 29,
2021), 86 FR 8246 (February 4, 2021).
    \6\ 15 U.S.C. 78s(b)(2)(B).
    \7\ See Securities Exchange Act Release No. 91343 (March 17,
2021), 86 FR 15536 (March 23, 2021) (``Order Instituting
Proceedings'').
    \8\ See Securities Exchange Act Release No. 91663 (April 23,
2021), 86 FR 22725 (April 29, 2021) (``Amendment No. 2'').
    \9\ See Securities Exchange Act Release No. 92155 (June 11,
2021), 86 FR 32302 (June 17, 2021).
    \10\ In Amendment No. 3, the Exchange stated that proposed Rule
451A, in specifically stating that no ``fee'' shall be imposed, is
meant to apply to the charges that are specified in Rule 451, and
would not limit a member organization's eligibility to receive
reimbursement for other expenses that are not covered by the
specified charges, namely (i) actual postage costs (including return
postage at the lowest available rate); (ii) the actual cost of
envelopes (provided they are not furnished by the person soliciting
proxies); and (iii) any actual communication expenses (excluding
overhead) incurred in receiving voting returns either telephonically
or electronically. The Exchange further stated that this approach is
consistent with the application of existing fee exclusions under
Rule 451. Because Amendment No. 3 does not materially alter the
substance of the proposed rule change, Amendment No. 3 is not
subject to notice and comment. The full text of Amendment No. 3 is
available on the Commission's website at: https://www.sec.gov/comments/sr-nyse-2020-98/srnyse202098-8944033-245707.pdf.
---------------------------------------------------------------------------

II. Description of the Proposal, as Modified by Amendment Nos. 2 and 3

    NYSE Rules (``Rule'') 451 and 465 require NYSE member organizations
that hold securities for beneficial owners in street name to solicit
proxies from, and deliver proxy and other materials to, beneficial
owners on behalf of issuers.\11\ For this service, issuers reimburse
NYSE member organizations for out-of-pocket, reasonable clerical,
postage, and other expenses incurred for a particular distribution.\12\
This reimbursement structure stems from Rules 14b-1 and 14b-2 under the
Act,\13\ which impose obligations on issuers and nominees to ensure
that beneficial owners receive proxy materials. These rules require
issuers to send their proxy materials to broker-dealers or banks that
hold securities in street name, for forwarding to beneficial owners,
and to pay nominees for reasonable expenses, both direct and indirect,
incurred in providing proxy information to beneficial owners.\14\ The
Commission's rules do not specify the fees that nominees can charge
issuers for proxy distribution; rather, they state that issuers must
reimburse the nominees for ``reasonable expenses'' incurred.\15\
---------------------------------------------------------------------------

    \11\ See Rules 451 and 465; Amendment No. 2, supra note 8, 86 FR
at 22726. The ownership of shares in street name means that a
shareholder, or ``beneficial owner,'' has purchased shares through a
broker-dealer or bank, also known as a ``nominee.'' In contrast to
direct ownership, where shares are directly registered in the name
of the shareholder, shares held in street name are registered in the
name of the nominee, or in the nominee name of a depository, such as
the Depository Trust Company. See Securities Exchange Act Release
No. 70720 (October 18, 2013), 78 FR 63530, 63531 n.14 (October 24,
2013) (order approving SR-NYSE-2013-07) (``2013 Approval Order'').
    \12\ See Rules 451 and 465; 2013 Approval Order, supra note 11,
78 FR at 63531.
    \13\ 17 CFR 240.14b-1; 17 CFR 240.14b-2.
    \14\ See 17 CFR 240.14b-1 and 14b-2; see also 2013 Approval
Order, supra note 11, 78 FR at 63531.
    \15\ See 17 CFR 240.14b-1 and 14b-2; see also 2013 Approval
Order, supra note 11, 78 FR at 63531. Currently, the Supplementary
Material to Rule 451, which is cross-referenced by the Supplementary
Material to Rule 465, establishes maximum rates at which a NYSE
member organization may be reimbursed for expenses incurred in
connection with distributing proxy and other materials to beneficial
owners.
---------------------------------------------------------------------------

    The Exchange has proposed to adopt Rule 451A, pursuant to which,
notwithstanding the applicable provisions of Rules 451 or 465 or what
may be permitted by the rules of any other national securities exchange
or national securities association of which a member organization is
also a member, no fee shall be imposed for a nominee account that
contains only shares or units of the securities involved that were
transferred to the account holder by the member organization at no
cost.\16\
---------------------------------------------------------------------------

    \16\ See proposed Rule 451A. None of the fees in the schedule in
the Supplementary Material .90 to Rule 451 would be imposable on
issuers in these circumstances, but issuers would still be
responsible for reimbursing member organizations for any actual
postage costs, envelope costs, and communication expenses (excluding
overhead) incurred in receiving voting returns, which is consistent
with what occurs currently in other contexts where no fees are
imposed, i.e., a managed account that contains five or fewer shares
or units of the security involved or an account that contains only a
fractional share. See Amendment No. 3, supra note 10. Accordingly,
references herein to the distribution costs or expenses for which
member organizations are prohibited from seeking reimbursement from
issuers under the proposal are meant to refer to the charges
specified in Supplementary Material .90 to Rule 451.
---------------------------------------------------------------------------

    According to the Exchange, the proposed rule is meant to address a
recent practice in which retail brokers provide customers, without
charge, a small number of shares with a very small dollar value as a
commercial incentive (for example, upon opening a new account or
referring a new customer to the broker).\17\ The Exchange stated that
Rule 451 does not distinguish between these beneficial owners and
beneficial owners that have paid for their shares, so brokers are
required to solicit proxies from these accounts and are entitled to
reimbursement of their expenses under NYSE and other self-regulatory
organization rules.\18\ The Exchange further stated that, in certain
cases, the issuer can experience a significant increase in its
distribution reimbursement expenses solely due to its shares being
included in these broker promotional schemes.\19\
---------------------------------------------------------------------------

    \17\ See Amendment No. 2, supra note 8, 86 FR at 22726.
    \18\ See id.; see also, e.g., FINRA Rule 2251.
    \19\ See Amendment No. 2, supra note 8, 86 FR at 22726.
---------------------------------------------------------------------------

    The Exchange believes that it would be more appropriate for the
broker to bear the proxy distribution costs in these circumstances.\20\
According to the Exchange, while the distribution of shares in these
broker promotions may result in a significant increase in the number of
beneficial owners of an issuer's stock, the generally very small size
of each of these positions means that they usually represent a very
small percentage of the voting power.\21\ As such, according to the
Exchange, the costs the issuer incurs in reimbursing the broker for
distributing proxies to these accounts is disproportionate to the

maximum potential vote such shares represent.\22\ The Exchange stated
that, by contrast, the broker using such a scheme chooses to engage in
it because it believes that it will result in a commercial benefit to
the broker.\23\ In addition, the Exchange stated that recipients of
shares without charge from the broker as part of such schemes typically
will not be given any choice as to which shares they receive and are
therefore not making any investment decision.\24\
---------------------------------------------------------------------------

    \20\ See id.
    \21\ See id.
    \22\ See id.
    \23\ See id.
    \24\ See id., 86 FR at 22727.
---------------------------------------------------------------------------

    The Exchange stated that proposed Rule 451A would not limit a
broker's right to reimbursement for distributions to any beneficial
owner if any part of that beneficial owner's position in an issuer's
securities was received by any means other than a transfer without
charge from the broker.\25\ The Exchange also stated that proposed Rule
451A would not limit a broker's right to receive reimbursement under
Rules 451 and 465 unless that broker itself transferred the issuer's
shares without charge into the account of the beneficial owner.\26\ The
Exchange further stated that Rules 451 and 465 would continue to apply
to all distributions, so the broker would continue to be fully
obligated to solicit votes from, and make other distributions on behalf
of issuers to, all beneficial owners notwithstanding the limitations on
reimbursement of expenses imposed by proposed Rule 451A.\27\
---------------------------------------------------------------------------

    \25\ See id., 86 FR at 22726.
    \26\ See id. Specifically, the Exchange stated that if a
beneficial owner transferred shares received in this manner into an
account at another broker, Rule 451A would not preclude that other
broker from claiming reimbursement under Rules 451 and 465.
    \27\ See id.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change, as modified by Amendment Nos. 2 and 3, is consistent with the
requirements of the Act and the rules and regulations thereunder.\28\
In particular, the Commission finds that the proposed rule change, as
modified by Amendment Nos. 2 and 3, is consistent with Section 6(b)(4)
of the Act,\29\ which requires that an exchange have rules that provide
for the equitable allocation of reasonable dues, fees, and other
charges among its members, issuers, and other persons using its
facilities; and with Section 6(b)(5) of the Act,\30\ which requires,
among other things, that the rules of a national securities exchange be
designed 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, and not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The Commission also believes
that the proposal as modified is consistent with Rule 14b-1 under the
Act.\31\
---------------------------------------------------------------------------

    \28\ In approving this proposed rule change, as modified by
Amendment Nos. 2 and 3, the Commission has considered the proposed
rule's impact on efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
    \29\ 15 U.S.C. 78f(b)(4).
    \30\ 15 U.S.C. 78f(b)(5).
    \31\ 17 CFR 240.14b-1.
---------------------------------------------------------------------------

    The Commission raised concerns about the proposal in the Order
Instituting Proceedings,\32\ but the Commission believes that the
Exchange has amended the proposal adequately to address those concerns.
Originally, proposed Rule 451A would have prohibited an NYSE member
organization from imposing distribution fees on an issuer in cases
where the member provided the shares or units of the securities held in
the beneficial owner's account at no cost or at a price ``substantially
less than the market price.'' \33\ In the Order Instituting
Proceedings, the Commission stated that the Exchange did not explain
how it would determine whether a price is ``substantially less than the
market price'' or otherwise provide guidance on the meaning of that
term.\34\ In Amendment No. 2, the Exchange addressed the Commission's
concern by eliminating that term from the proposed rule, resulting in a
rule with a more clearly defined application to nominee accounts that
contain only shares or units of the securities involved that were
transferred to the account holder by the member at no cost.
---------------------------------------------------------------------------

    \32\ See Order Instituting Proceedings, supra note 7.
    \33\ See Original Notice, supra note 3.
    \34\ See Order Instituting Proceedings, supra note 7, 86 FR at
15537.
---------------------------------------------------------------------------

    The Commission also stated in the Order Instituting Proceedings
that the initial proposal did not explain why it is consistent with the
Act for the proposed reimbursement prohibition not to apply if a
customer transferred its account to a new broker or held any shares of
the issuer in its account other than those received through a below-
market price transfer from the member seeking reimbursement.\35\
Additionally, the Commission stated that the initial proposal did not
address the feasibility of tracking shares held by a particular
beneficial owner where the eligibility for reimbursement may change
over time.\36\ The Exchange addressed these concerns in Amendment No. 2
by clarifying that it would be impossible for the new broker in these
circumstances to track whether the shares of a specific issuer
transferred into its custody had all been received by the beneficial
owner without charge from another broker.\37\ In addition, according to
the Exchange, the new broker would not have received the same
commercial benefit as the original broker that transferred the shares
without charge to its customers.\38\ For these reasons, the Exchange
stated that it is impracticable to extend the proposed reimbursement
prohibition to the new broker and reasonable to limit its application
to the original broker that transferred the shares without charge.\39\
---------------------------------------------------------------------------

    \35\ See id., 86 FR at 15537-38.
    \36\ See id., 86 FR at 15538.
    \37\ See Amendment No. 2, supra note 8, 86 FR at 22726.
    \38\ See id., 86 FR at 22726-27.
    \39\ See id., 86 FR at 22727.
---------------------------------------------------------------------------

    Further, in the Order Instituting Proceedings, the Commission
stated that the Exchange had not explained how the proposal would be
consistent with Rule 14b-1 under the Act \40\ in light of the fact that
a broker-dealer would be required to distribute proxies or other
materials but be precluded from seeking reimbursement of its expenses
in the applicable circumstances.\41\ In Amendment No. 2, the Exchange
stated that any broker that is prohibited from charging fees under the
proposal would continue to be reimbursed for its aggregate expenses
with respect to proxy distribution, as the prohibition on distribution
fees would be limited to those accounts in which the only shares of the
applicable issuer are shares received without charge from that
broker.\42\ The Exchange stated that, as such, the effect of the
proposal would be to reduce the overall reimbursement received by that
broker for a distribution, but not to eliminate that reimbursement.\43\
---------------------------------------------------------------------------

    \40\ 17 CFR 240.14b-1.
    \41\ See Order Instituting Proceedings, supra note 7, 86 FR at
15538.
    \42\ See Amendment No. 2, supra note 8, 86 FR at 22727.
    \43\ See id.
---------------------------------------------------------------------------

    Commenters broadly supported the proposal.\44\ One commenter stated
that

the recent broker practice of gifting small amounts of securities to
retail brokerage clients as a promotional measure has caused
significant increases in proxy costs for some issuers, and expressed
the view that the proposal would alleviate much of the cost impact to
issuers from this broker practice, particularly for accounts defaulted
to e-delivery.\45\ Two commenters are issuers that stated that they
experienced dramatic increases in proxy distribution costs for the 2020
proxy season, which they both attributed to the inclusion of their
shares in a retail broker's promotional free share program.\46\ Both
commenters asserted that the issuer should not bear the proxy
distribution costs that arise due to their shares being included in
such a broker promotional program.\47\ Another commenter stated that
the promotions the proposed rule change is designed to address provide
commercial benefits to broker-dealers without providing any parallel
benefits to public companies.\48\
---------------------------------------------------------------------------

    \44\ See letters from: Paul Conn, President, Global Capital
Markets, Computershare, dated January 11, 2021 (``First
Computershare Letter''), at 2-3; Niels Holch, Executive Director,
Shareholder Communications Coalition, dated January 20, 2021
(``Coalition Letter''), at 5 n.14; Paul Conn, President, Global
Capital Markets, Computershare, dated April 14, 2021 (``Second
Computershare Letter''), at 4; Kim Warnica, Senior Vice President,
General Counsel and Secretary, Marathon Oil Corporation, dated April
27, 2021 (``Marathon Letter''); Patrick J. McEnany, Chairman and
CEO, Catalyst Pharmaceuticals, Inc., dated June 9, 2021 (``Catalyst
Letter''). An additional commenter appears to suggest that member
organizations should be reimbursed in certain circumstances that are
not covered by the proposal or the rules the proposal is amending.
See letter from David, dated June 14, 2021.
    \45\ See First Computershare Letter at 2-3. This commenter also
stated that while it understood that the accounts that receive such
``gifted'' securities generally are set for electronic
communications, as a technical matter, if a street-name holder of
gifted securities receives hardcopy proxy communications rather than
electronic delivery, the issuer will still bear increased costs from
printing the materials to be disseminated by the broker. See id.
Even if an issuer bears increased printing costs due to its shares
being included in a broker promotional program, as discussed below,
the Commission believes that the proposal is consistent with the Act
because, among other things, the proposed rule's prohibition against
imposing fees on issuers would result in a more equitable and not
unfairly discriminatory reallocation to brokers of significant costs
typically associated with the distribution of proxies and other
materials in the circumstances addressed by the proposal.
    \46\ See Marathon Letter at 1-2; Catalyst Letter at 2. One of
these commenters stated that its 2020 proxy distribution bill was
2,402 percent higher than the 2019 bill, representing distribution
to 3,051 percent more stockholders in 2020 than in 2019. See
Marathon Letter at 1. The commenter noted that as of its 2020
stockholder meeting date, 80 percent of the stockholders that held
the commenter's shares through accounts at the particular retail
broker held five shares or less. See id. The commenter believes
that, for the vast majority of the accounts holding fewer than five
shares, the shares were chosen by that retail broker, not the
beneficial owners. See id. at 2. Similarly, the other issuer
commenter stated that the number of holders of its common shares who
hold their shares through that retail broker increased by more than
2,057 percent from 2019 to 2020, and its proxy distribution bill
from the distribution platform that services that retail broker grew
1,779 percent from 2019 to 2020 (from approximately $12,500 to
approximately $234,000). See Catalyst Letter at 1-2. The commenter
believes the increase in both shareholders and costs is directly
attributable to the retail broker and its promotional activities.
See id. at 2.
    \47\ See Marathon Letter at 2; Catalyst Letter at 2.
    \48\ See Coalition Letter at 5 n.14.
---------------------------------------------------------------------------

    The Commission believes that the proposal as modified is consistent
with Sections 6(b)(4) and 6(b)(5) of the Act, as well as Rule 14b-1.
The proposed rule would appropriately reallocate from an issuer to a
broker the fee-related expense of distributing proxy and other
materials to beneficial owners in the limited circumstance where the
beneficial owner's account contains only shares or units of the
issuer's securities that were transferred to the beneficial owner by
the broker at no cost.\49\ This circumstance would appear to arise
typically due to a broker promotional program that, as stated by the
Exchange, the broker chooses to engage in because it believes it will
result in a commercial benefit to the broker and, as noted by one
commenter,\50\ provides commercial benefits to the broker without
providing any parallel benefits to the issuer.\51\ The Commission
therefore believes that the proposal is reasonably designed to result
in a more equitable and not unfairly discriminatory allocation of the
costs of the distribution of proxy and other materials, consistent with
Sections 6(b)(4) and 6(b)(5) of the Act.
---------------------------------------------------------------------------

    \49\ See supra note 25 and accompanying text.
    \50\ See Coalition Letter at 5 n.14. See also Catalyst Letter at
2.
    \51\ One commenter stated that, if, after receiving gifted
shares, an investor subsequently chooses to increase its share
ownership and makes an investment decision to buy additional shares,
it would be appropriate to shift the cost of proxy distribution back
to the issuer. See Marathon Letter at 2. As stated above, the
Exchange's proposal would affect accounts that only include shares
that were transferred to the account holder by the broker at no
cost, and accordingly, if a street name investor were to be induced
to purchase or otherwise acquire any additional shares of the issuer
as a result of being gifted shares by a broker, the issuer would
then bear the proxy distribution costs for that investor's account.
See supra note 25 and accompanying text.
---------------------------------------------------------------------------

    The Commission also believes that the proposal is consistent with
the Section 6(b)(5) goal of protecting investors and the public
interest, and is consistent with Rule 14b-1, because the cost
reallocation effectuated by the proposal would not diminish brokers'
obligations to distribute issuer materials to accounts in which
securities are held in street name, including accounts covered by the
proposal, i.e., that contain only shares or units of the securities
involved that were transferred to the account holder by the member
organization at no cost. Moreover, this cost reallocation does not
preclude the broker from receiving assurance of reimbursement of its
``reasonable expenses,'' both direct and indirect, consistent with Rule
14b-1. In previously approving, in 2013, an Exchange proposal that,
among other things, eliminated fees for distributing issuer materials
to managed accounts with five or fewer shares of the issuer's
securities, the Commission acknowledged that any general rule setting
forth an industry-wide fee schedule for the reimbursement of reasonable
broker-dealer expenses necessarily will not precisely reimburse the
actual expenses incurred by individual firms.\52\ Here, a broker with
accounts covered by the proposal may not receive precise reimbursement
for its expenses incurred for a distribution pertaining to the issuer
whose shares it gave away at no cost, but the broker would continue to
be reasonably reimbursed for its expenses, both direct and indirect, in
the aggregate.\53\ The proposal would not eliminate a broker's ability
to charge reimbursement fees for distributing an issuer's materials to
accounts that hold any shares or units of the issuer's securities that
the beneficial owner purchased or acquired in any way other than from
the broker at no cost. Nor would the proposal affect the broker's
ability to charge reimbursement fees for distributing materials on
behalf of issuers whose shares it did not give away at no cost. Any
shortfall in precise reimbursement of expenses experienced by the
broker because of the proposal would be confined to fee-related
expenses attributable to distributing an issuer's materials to
beneficial owners that receive those materials solely due to the
broker's own promotional efforts.
---------------------------------------------------------------------------

    \52\ See Rule 451, Supplementary Material .90; 2013 Approval
Order, supra note 11, 78 FR at 63546 (stating that this rule with
respect to managed accounts was designed to provide reasonable
reimbursement of the overall expenses of broker-dealers in the
aggregate, and the extent of reimbursement of any individual firm
would vary depending on the specifics of its account population).
One commenter analogized the scenario presented by this proposal to
the Exchange's prior proposal to eliminate fees for distributing
issuer materials to managed accounts with five or fewer shares of
the issuer's securities. See Marathon Letter at 2.
    \53\ As clarified in Amendment No. 3, supra note 10, issuers
must reimburse brokers for any non-fee-related expenses--i.e., any
actual, out-of-pocket postage, envelope, and communication expenses
incurred in receiving voting returns--notwithstanding the proposed
rule.
---------------------------------------------------------------------------

    Based on the foregoing, the Commission finds that the proposed rule
change, as amended, is consistent with the Act and the rules and
regulations thereunder.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\54\ that the proposed rule change (SR-NYSE-2020-98), as amended by
Amendment Nos. 2 and 3, be and hereby is approved.
---------------------------------------------------------------------------

    \54\ 15 U.S.C. 78s(b)(2).
    \55\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\55\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-17760 Filed 8-18-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 165 (Monday, August 30, 2021)]
[Notices]
[Pages 48434-48435]
[FR Doc No: 2021-18580]

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

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

[Docket No. USCG-2021-0629; Control Number 1625-0003]

Information Collection Request to Office of Management and
Budget; OMB

AGENCY: Coast Guard, DHS.

ACTION: Sixty-day notice requesting comments.

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

SUMMARY: In compliance with the Paperwork Reduction Act of 1995, the
U.S. Coast Guard intends to submit an Information Collection Request
(ICR) to the Office of Management and Budget (OMB), Office of
Information and Regulatory Affairs (OIRA), requesting approval of an
extension for the following collection of information: 1625-0003,
Recreational Boating Accident Report; without change.
    Our ICR describes the information we seek to collect from the
public. Before submitting this ICR to OIRA, the Coast Guard is inviting
comments as described below.

DATES: Comments must reach the Coast Guard on or before October 29,
2021.

ADDRESSES: You may submit comments identified by Coast Guard docket
number [USCG-2021-0629] to the Coast Guard using the Federal
eRulemaking Portal at https://www.regulations.gov. See the ``Public
participation and request for comments'' portion of the SUPPLEMENTARY
INFORMATION section for further instructions on submitting comments.
    A copy of the ICR is available through the docket on the internet
at https://www.regulations.gov. Additionally, copies are available
from: COMMANDANT (CG-6P), ATTN: PAPERWORK REDUCTION ACT MANAGER, U.S.
COAST GUARD, 2703 MARTIN LUTHER KING JR. AVE. SE, STOP 7710,
WASHINGTON, DC 20593-7710.

FOR FURTHER INFORMATION CONTACT: A.L. Craig, Office of Privacy
Management, telephone<PHONE_NUMBER>, or fax<PHONE_NUMBER>, for questions
on these documents.

SUPPLEMENTARY INFORMATION:

Public Participation and Request for Comments

    This notice relies on the authority of the Paperwork Reduction Act
of 1995; 44 U.S.C. chapter 35, as amended. An ICR is an application to
OIRA seeking the approval, extension, or renewal of a Coast Guard
collection of information

(Collection). The ICR contains information describing the Collection's
purpose, the Collection's likely burden on the affected public, an
explanation of the necessity of the Collection, and other important
information describing the Collection. There is one ICR for each
Collection.
    The Coast Guard invites comments on whether this ICR should be
granted based on the Collection being necessary for the proper
performance of Departmental functions. In particular, the Coast Guard
would appreciate comments addressing: (1) The practical utility of the
Collection; (2) the accuracy of the estimated burden of the Collection;
(3) ways to enhance the quality, utility, and clarity of information
subject to the Collection; and (4) ways to minimize the burden of the
Collection on respondents, including the use of automated collection
techniques or other forms of information technology.
    In response to your comments, we may revise this ICR or decide not
to seek an extension of approval for the Collection. We will consider
all comments and material received during the comment period.
    We encourage you to respond to this request by submitting comments
and related materials. Comments must contain the OMB Control Number of
the ICR and the docket number of this request, [USCG-2021-0629], and
must be received by October 29, 2021.

Submitting Comments

    We encourage you to submit comments through the Federal eRulemaking
Portal at https://www.regulations.gov. If your material cannot be
submitted using https://www.regulations.gov, contact the person in the
FOR FURTHER INFORMATION CONTACT section of this document for alternate
instructions. Documents mentioned in this notice, and all public
comments, are in our online docket at https://www.regulations.gov and
can be viewed by following that website's instructions. Additionally,
if you go to the online docket and sign up for email alerts, you will
be notified when comments are posted.
    We accept anonymous comments. All comments received will be posted
without change to https://www.regulations.gov and will include any
personal information you have provided. For more about privacy and
submissions in response to this document, see DHS's eRulemaking System
of Records notice (85 FR 14226, March 11, 2020).

Information Collection Request

    Title: Recreational Boating Accident Report.
    OMB Control Number: 1625-0003.
    Summary: The Coast Guard Boating Accident Report form is the data
collection instrument that ensures compliance with the implementing
regulations and Title 46 U.S.C. 6102(b) that requires the Secretary to
collect, analyze and publish reports, information, and statistics on
marine casualties.
    Need: Title 46 U.S.C. 6102(a) requires a uniform marine casualty
reporting system, with regulations prescribing casualties to be
reported and the manner of reporting. The statute requires a state to
compile and submit to the Secretary (delegated to the Coast Guard)
reports, information, and statistics on casualties reported to the
State. Implementing regulations are contained in Title 33, Code of
Federal Regulations, SUBCHAPTER S--BOATING SAFETY, PART 173--VESSEL
NUMBERING AND CASUALTY AND ACCIDENT REPORTING, Subpart C--Casualty and
Accident Reporting and Part 174--STATE NUMBERING AND CASUALTY REPORTING
SYSTEMS, Subpart C--Casualty Reporting System Requirements, and Subpart
D--State reports.
    States are required to forward copies of the reports or
electronically transmit accident report data to the Coast Guard within
30 days of their receipt of the report as prescribed by 33 CFR 174.121
(Forwarding of casualty or accident reports). The accident report data
and statistical information obtained from the reports submitted by the
State reporting authorities are used by the Coast Guard in the
compilation of national recreational boating accident statistics.
    Forms: CG-3865, Recreational Boating Accident Report.
    Respondents: Federal regulations (33 CFR 173.55) require the
operator of any uninspected vessel that is numbered or used for
recreational purposes to submit an accident report to the State
authority when:
    (1) A person dies; or
    (2) A person is injured and requires medical treatment beyond first
aid; or
    (3) Damage to the vessel and other property totals $2,000 or more,
or there is a complete loss of the vessel; or
    (4) A person disappears from the vessel under circumstances that
indicate death or injury.
    Frequency: On occasion.
    Hour Burden Estimate: The estimated burden remains unchanged at
2,500 hours a year.
    Authority: The Paperwork Reduction Act of 1995; 44 U.S.C. chapter
35, as amended.

    Dated: August 24, 2021.
Kathleen Claffie,
Chief, Office of Privacy Management, U.S. Coast Guard.
[FR Doc. 2021-18580 Filed 8-27-21; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register: January 31, 2007 (Volume 72, Number 20)]
[Proposed Rules]
[Page 4472-4475]
[DOCID:fr31ja07-20]

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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R07-OAR-2006-0973; FRL-8274-8]

Approval and Promulgation of Implementation Plans; State of
Kansas

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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

SUMMARY: EPA is proposing to approve a request to revise the State
Implementation Plan (SIP) made by the state of Kansas to include
updates to its Prevention of Significant Deterioration (PSD) of Air
Quality rule. The Kansas revision adopts by reference provisions of 40
CFR 52.21 as in effect July 1, 2004, except for subsections with
references to Clean Unit Exemptions, Pollution Control Projects, and
the record keeping

provisions for the actual-to-projected-actual emissions projections.
Kansas did not adopt the latter provisions because of the June 24,
2005, United States Court of Appeals for the District of Columbia
Circuit's decision, which vacated the Clean Unit Exemption and
Pollution Control Project provisions and remanded back to EPA the
record keeping provisions for the actual-to-projected-actual emissions
projections standard for when a source must keep certain project
related records. If approved, EPA would incorporate the revisions into
the Kansas SIP.

DATES: Comments must be received on or before March 2, 2007.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R07-
OAR-2006-0973, by one of the following methods:
    1. http://www.regulations.gov: Follow the online instructions for

submitting comments.
    2. E-mail<EMAIL_ADDRESS>    3. Mail: Gina Grier, Environmental Protection Agency, Air Planning
and Development Branch, 901 North 5th Street, Kansas City, Kansas
66101.
    4. Hand Delivery or Courier: Deliver your comments to: Gina Grier,
Environmental Protection Agency, Air Planning and Development Branch,
901 North 5th Street, Kansas City, Kansas 66101.
    Instructions: Direct your comments to Docket ID No. EPA-R07-OAR-
2006-0973. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
http://www.regulations.gov, including any personal information

provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site

is an ``anonymous access'' system, which means EPA will not know your
identity or contact information unless you provide it in the body of
your comment. If you send an e-mail comment directly to EPA without
going through http://www.regulations.gov, your e-mail address will be

automatically captured and included as part of the comment that is
placed in the public docket and made available on the Internet. If you
submit an electronic comment, EPA recommends that you include your name
and other contact information in the body of your comment and with any
disk or CD-ROM you submit. If EPA cannot read your comment due to
technical difficulties and cannot contact you for clarification, EPA
may not be able to consider your comment. Electronic files should avoid
the use of special characters, any form of encryption, and be free of
any defects or viruses.
    Docket. All documents in the electronic docket are listed in the
http://www.regulations.gov index. Although listed in the index, some

information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in http://www.regulations.gov or in hard copy at the Environmental

Protection Agency, Air Planning and Development Branch, 901 North 5th
Street, Kansas City, Kansas. EPA requests that you contact the person
listed in the FOR FURTHER INFORMATION CONTACT section to schedule your
inspection. The interested persons wanting to examine these documents
should make an appointment with the office at least 24 hours in
advance.

FOR FURTHER INFORMATION CONTACT: Gina Grier at<PHONE_NUMBER>, or by e-
mail at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,''
``us,'' or ``our'' is used, we mean EPA. This section provides
additional information by addressing the following questions:

What is the Federal approval process for a SIP?
What is being addressed in this document?
What is the background for EPA's New Source Review (NSR) Reform
rule?
What is Kansas's NSR Reform rule and what action has Kansas
requested on the rule?
Have the requirements for approval of a SIP revision been met?
What action is EPA proposing?

What is the Federal approval process for a SIP?

    In order for State regulations to be incorporated into the
Federally-enforceable SIP, States must formally adopt the regulations
and control strategies consistent with State and Federal requirements.
This process generally includes a public notice, public hearing, public
comment period, and a formal adoption by a State-authorized rulemaking
body.
    Once a State rule, regulation, or control strategy is adopted, the
State submits it to us for inclusion into the SIP. We must provide
public notice and seek additional public comment regarding the proposed
Federal action on the State submission. If adverse comments are
received, they must be addressed prior to any final Federal action by
us.
    All State regulations and supporting information approved by EPA
under section 110 of the Clean Air Act (CAA or Act) are incorporated
into the Federally-approved SIP. Records of such SIP actions are
maintained in the Code of Federal Regulations (CFR) at title 40, part
52, entitled ``Approval and Promulgation of Implementation Plans.'' The
actual State regulations which are approved are not reproduced in their
entirety in the CFR outright but are ``incorporated by reference,''
which means that we have approved a given State regulation with a
specific effective date.

What is being addressed in this document?

    We are proposing to approve the Kansas Department of Health and
Environment's (KDHE) revision to Kansas Administrative Regulation
(K.A.R.) 28-19-350, Prevention of Significant Deterioration of Air
Quality. Kansas adopted the applicable provisions of 40 CFR 52.21,
except for subsections that are not applicable to Kansas or are stayed,
vacated, or remanded by Federal court order, or are reserved for future
use.
    The rules were submitted to EPA on July 25, 2006. The submission
included comments on the rules made during the state's adoption
process, the state's response to comments and other information
necessary to meet EPA's completeness criteria. For additional
information on completeness criteria, the reader should refer to 40 CFR
part 51, appendix V.

What is the background for EPA's New Source Review (NSR) Reform rule?

    The 2002 NSR Reform rules are part of EPA's implementation of Parts
C and D of title I of the CAA, 42 U.S.C. 7470-7515. Part C of title I
of the CAA, 42 U.S.C. 7470-7492, is the PSD program, which applies in
areas that meet the National Ambient Air Quality Standards (NAAQS),
also known as ``attainment areas'' and in areas for which there is
insufficient information to determine whether the area meets the NAAQS,
also known as, ``unclassifiable'' areas. Part D of Title I of the CAA,
42 U.S.C. 7501-7515, is the nonattainment New Source Review (NNSR)
program, which applies in areas that are not in attainment of the
NAAQS, also known as ``nonattainment areas.'' Collectively, the PSD and
NNSR programs are referred to as the ``New Source Review''

or NSR programs. EPA regulations implementing these programs are
contained in 40 CFR 51.165, 51.166, 52.21, 52.24, and part 51, appendix
S.
    The CAA NSR programs are preconstruction review and permitting
programs applicable to new and modified stationary sources of air
pollutants regulated under the CAA. The NSR programs of the CAA include
a combination of air quality planning and air pollution control
technology program requirements. Briefly, section 109 of the CAA, 42
U.S.C. 7409, requires EPA to promulgate primary NAAQS to protect public
health and secondary NAAQS to protect public welfare. Once EPA sets
those standards, States must develop, adopt, and submit to EPA for
approval, a SIP that contains emissions limitations and other control
measures to attain and maintain the NAAQS. Each SIP is required to
contain a preconstruction review program for the construction and
modification of any stationary source of air pollution to assure that
the NAAQS are achieved and maintained; to protect areas of clean air;
to protect air quality related values (such as visibility) in national
parks and other areas; to assure that appropriate emissions controls
are applied, to maximize opportunities for economic development
consistent with the preservation of clean air resources; and to ensure
that any decision to increase air pollution is made only after full
public consideration of the consequences of the decisions.
    The 2002 NSR Reform rules made changes to five areas of the NSR
programs. In summary, the 2002 rules: (1) Provide a new method for
determining baseline actual emissions; (2) adopt an actual-to-
projected-actual methodology for determining whether a major
modification has occurred; (3) allow major stationary sources to comply
with plant-wide applicability limits (PALs) to avoid having a
significant emission increase that triggers the requirements of the
major NSR program; (4) provide a new applicability provision for
emissions units that are designated clean units; and (5) exclude
pollution control projects (PCPs) from the definition of physical
change or change in the method of operation.
    After the 2002 NSR Reform rules were finalized and effective,
various petitioners challenged numerous aspects of the 2002 NSR Reform
rules, along with portions of EPA's 1980 NSR rules (45 FR 5276 August
7, 1980). On June 24, 2005, the District of Columbia Court of Appeals
issued a decision on the challenges to the 2002 NSR Reform Rules. New
York v. United States, 413 F.3d (DC Cir. 2005). In summary, the Court
of Appeals for the District of Columbia vacated portions of the rules
pertaining to clean units and pollution control projects, remanded a
portion of the rules regarding exemption from record keeping, e.g., 40
CFR 52.21(r)(6) and 40 CFR 51.166(r)(6), and let stand the other
provisions included as part of the 2002 NSR Reform rules. EPA has not
yet responded to the Court's remand regarding record keeping
provisions.

What is Kansas's NSR Reform rule and what action has Kansas requested
on the rule?

    In this action, we propose approval of revisions to Kansas's Air
Quality Regulation, K.A.R. 28-19-350, Prevention of Significant
Deterioration of Air Quality, into the SIP. This rule incorporates by
reference the Federal PSD program in 40 CFR 52.21, including the 2002
NSR Reform rules described above, with the exception of portions of the
rule relating to provisions vacated or remanded by the court.
    Under Part C of Title I of the CAA, states have the primary
responsibility for developing a SIP and issuing permits subject to the
emission limits and other control measures developed in the plan. NSR
ensures the protection of air quality because it designates a specific
plan customized to prevent significant deterioration of air quality
from individual major source emitters of air pollutants, such as power
plants, refineries or manufacturing facilities. The permit also
requires the application of Best Available Control Technology (BACT) to
new or modified facilities. The NSR permit program encompassed by
K.A.R. 28-19-350 is for sources located in areas where the air is
designated ``attainment'' or unclassifiable and meets the requirement
to protect human health. A major stationary source is required to
obtain a permit before it can begin construction or make a major
modification if the modification or construction will increase
emissions by an amount large enough to trigger NSR requirements.
    A PSD permit places allowable limits on pollution emissions from a
newly constructed or newly modified stationary source. As part of the
PSD permitting process, Kansas completes required air quality modeling
analysis of the project to ensure the project maintains compliance with
the NAAQS. Kansas also tracks and controls the emission of air
pollutants by calculating the maximum increase concentration allowed to
occur above an established background level, known as a PSD increment.
    The revision to K.A.R. 28-19-350 incorporates by reference the
provisions of the EPA NSR reform rule referenced above. This includes
(1) the new methodology for determining baseline actual emissions; (2)
the option of using the actual-to-projected-actual emissions for
determining emissions increases; and (3) the provisions relating to
plant-wide applicability limits. It does not incorporate the provisions
vacated or remanded by the court, described previously. In addition,
the state revision adds titles to each subsection for ease of reading.
Subsection (c) clarifies the term ``Administrator'' in the Federal
rule, to indicate where it means Administrator of EPA and where it
means KDHE, as separate from state agency administration. Subsection
(h) specifies that the state construction approval requirements also
apply to the PSD permit issued under the regulation. Subsection (k)
ensures that the public notice of PSD permit actions state whether the
action will adversely impact Federal class I areas.
    Because the Kansas rule adopts by reference relevant portions of
the Federal rule, EPA believes it meets the requirement of the CAA.

Have the requirements for approval of a SIP revision been met?

    The state submittal has met the public notice requirements for SIP
submissions in accordance with 40 CFR 51.102. The submittal also
satisfied the completeness criteria of 40 CFR part 51, appendix V. In
addition, as explained above and in more detail in the technical
support document that is part of this docket, EPA believes that the
revisions meet the substantive SIP requirements of the CAA, including
section 110 and implementing regulations.

What action is EPA proposing?

    We propose to approve revisions to Kansas's Air Quality Regulation,
K.A.R. 28-19-350, Prevention of Significant Deterioration of Air
Quality.

Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this
proposed action is not a ``significant regulatory action'' and
therefore is not subject to review by the Office of Management and
Budget. For this reason, this action is also not subject to Executive
Order 13211, ``Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This
proposed action merely proposes to approve state law as meeting Federal
requirements and imposes no additional requirements

beyond those imposed by State law. Accordingly, the Administrator
certifies that the proposed approvals in this proposed rule will not
have a significant economic impact on a substantial number of small
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
Because this rule proposes to approve pre-existing requirements under
state law and does not impose any additional enforceable duty beyond
that required by State law, it does not contain any unfunded mandate or
significantly or uniquely affect small governments, as described in the
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).
    This proposed rule also does not have tribal implications because
it will not have a substantial direct effect on one or more Indian
tribes, on the relationship between the Federal Government and Indian
tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian tribes, as specified by Executive
Order 13175 (65 FR 67249, November 9, 2000). This action also does not
have Federalism implications because it does not have substantial
direct effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government, as specified
in Executive Order 13132 (64 FR 43255, August 10, 1999). This action
merely proposes to approve a State rule implementing a Federal
standard, and does not alter the relationship or the distribution of
power and responsibilities established in the CAA. This proposed rule
also is not subject to Executive Order 13045 ``Protection of Children
from Environmental Health Risks and Safety Risks'' (62 FR 19885, April
23, 1997), because it is not economically significant.
    In reviewing SIP submissions, EPA's role is to approve State
choices, provided that they meet the criteria of the CAA. In this
context, in the absence of a prior existing requirement for the State
to use voluntary consensus standards (VCS), EPA has no authority to
disapprove a SIP submission for failure to use VCS. It would thus be
inconsistent with applicable law for EPA, when it reviews a SIP
submission to use VCS in place of a SIP submission that otherwise
satisfies the provisions of the CAA. Thus, the requirements of section
12(d) of the National Technology Transfer and Advancement Act of 1995
(15 U.S.C. 272 note) do not apply. This proposed rule does not impose
an information collection burden under the provisions of the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

List of Subjects in 40 CFR Part 52

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

    Dated: January 24, 2007.
John B. Askew,
Regional Administrator, Region 7.
[FR Doc. E7-1518 Filed 1-30-07; 8:45 am]

BILLING CODE 6560-50-P