[Federal Register Volume 85, Number 98 (Wednesday, May 20, 2020)]
[Notices]
[Pages 30770-30774]
[FR Doc No: 2020-10821]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88878; File No. SR-NYSEAMER-2020-38]

Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its
Rules To Add New Rule 7.19E

May 14, 2020.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on May 7, 2020, NYSE American LLC (``NYSE American'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend its rules to add new Rule 7.19E
(Pre-Trade Risk Controls). The proposed rule change is available on the
Exchange's website at www.nyse.com, at the principal office of the
Exchange, 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 self-regulatory organization
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 those 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 parts of such statements.

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

1. Purpose
    In order to assist ETP Holders' efforts to manage their risk, the
Exchange proposes to amend its rules to add new Rule 7.19E (Pre-Trade
Risk Controls) to establish a set of pre-trade risk controls by which
Entering Firms and their designated Clearing Firms (as defined below)
may set credit limits and other pre-trade risk controls for an Entering
Firm's trading on the Exchange and authorize the Exchange to take
action if those credit limits or other pre-trade risk controls are
exceeded.
    For purposes of this proposed rule change, the Exchange proposes to
define the term ``Entering Firm'' to mean an ETP Holder that either has
a correspondent relationship with a Clearing Firm whereby it executes
trades and the clearing function is the responsibility of the Clearing
Firm or clears for its own account \4\ and to define the term
``Clearing Firm'' to mean an ETP Holder that acts as principal for
clearing and settling a trade, whether for its own account or for an
Entering Firm.\5\
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    \4\ See proposed Rule 7.19E(a)(1).
    \5\ See proposed Rule 7.19E(a)(2). As required by Rule 7.14E, an
ETP Holder is required to give up the name of the clearing firm
through which each transaction on the Exchange will be cleared.
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a. Overview
    In order to help firms manage their risk, the Exchange proposes to
offer optional pre-trade risk controls that would authorize the
Exchange to take automated actions if a designated credit limit or
other pre-trade risk control for a firm is breached. Because Clearing
Firms bear the risk on behalf of their correspondent Entering Firms,
the Exchange proposes to make the proposed pre-trade risk controls
available not only to Entering Firms, but also to their Clearing Firms,
if so authorized by the Entering Firm. These pre-trade risk controls
would provide Entering Firms and their Clearing Firms with enhanced
abilities to manage their risk with respect to orders on the Exchange.
    As proposed, these optional controls would allow Entering Firms and
their Clearing Firms (if designated by the Entering Firm) to each
define different pre-set risk thresholds and to choose the automated
action the Exchange would take if those thresholds are breached, which
would range from notifying the Entering Firm and Clearing Firm that a
limit has been breached, blocking new orders, or canceling orders until
the Entering Firm has been reinstated to trade on the Exchange.
    Although use of the proposed Exchange-provided pre-trade risk
controls are optional, all orders on the Exchange will pass through
risk checks. As such, an Entering Firm that does not choose to set
limits or permit its Clearing Firm to set limits on its behalf will not
achieve any latency advantage with respect to its trading activity on
the Exchange. In addition, the Exchange expects that any latency added
by the pre-trade risk controls will be de minimis.
    The proposed pre-trade risk controls described are meant to
supplement, and not replace, the ETP Holders' own internal systems,
monitoring and procedures related to risk management. The Exchange does
not guarantee that these controls will be sufficiently comprehensive to
meet all of an ETP Holder's needs, the controls are not designed to be
the sole means of risk management, and using these controls will not
necessarily meet an ETP Holder's obligations required by Exchange or
federal rules (including, without limitation, the Rule 15c3-5 under the
Act \6\ (``Rule 15c3-5'')). Use of the Exchange's pre-trade risk
controls will not automatically constitute compliance with Exchange or
federal rules and responsibility for compliance with all Exchange and
Commission rules remains with the ETP Holder.\7\
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    \6\ See 17 CFR 240.15c3-5.
    \7\ The Exchange proposes Commentary .01 to Rule 7.19E to
provide that ``[t]he pre-trade risk controls described in this Rule
are meant to supplement, and not replace, the ETP Holder's own
internal systems, monitoring and procedures related to risk
management and are not designed for compliance with Rule 15c3-5
under the Exchange Act. Responsibility for compliance with all
Exchange and SEC rules remains with the ETP Holder.''
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b. Proposed Rule Change
    Proposed Rule 7.19E(a) would set forth the definitions that would
be used for purposes of the Rule. In addition to the defined terms of
``Entering Firm'' and ``Clearing Firm,'' as described above, the
Exchange proposes the following definitions:
     The term ``Single Order Maximum Notional Value Risk
Limit'' would mean a pre-established maximum dollar amount for a single
order before it can be traded.
     The term ``Single Order Maximum Quantity Risk Limit''
would mean a pre-established maximum number of shares that may be
included in a single order before it can be traded.
     The term ``Gross Credit Risk Limit'' would mean a pre-
established maximum daily dollar amount for purchases and sales across
all symbols, where both buy and sell orders are counted as positive
values. For purposes of calculating the Gross Credit Risk Limit,
unexecuted orders in the Exchange Book,\8\ orders routed on arrival
pursuant to Rule 7.37E(a)(1), and executed orders are included.
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    \8\ The term ``Exchange Book'' is defined in Rule 1.1E to refer
to the Exchange's electronic file of orders, which contains all
orders entered on the Exchange.
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    Proposed Rule 7.19E(b) would set forth the Pre-Trade Risk Controls
that would be available to Entering Firms and Clearing Firms. Under
proposed Rule 7.19E(b)(1), an Entering Firm may select one or more of
the following optional pre-trade risk controls with respect to its
trading activity on the Exchange: (i) Gross Credit Risk Limits; (ii)
Single Order Maximum Notional Value Risk Limits; and (iii) Single Order
Maximum Quantity Risk Limits, which would collectively be referred to
as the ``Pre-Trade Risk Controls.''
    In addition, under proposed Rule 7.19E(b)(2)(A), an Entering Firm
that does not self-clear may designate its Clearing Firm to (i) view
any Pre-Trade Risk Controls set by the Entering Firm, or (ii) set one
or more Pre-Trade Risk Controls on the Entering Firm's behalf, or both.
Proposed Rule 7.19E(b)(2)(B) provides that an Entering Firm would be
able to view any Pre-Trade Risk Controls that its Clearing Firm sets
with respect to the Entering Firm's trading activity on the Exchange.
Because both an Entering Firm and Clearing Firm (if so designated by
the Entering Firm) would be able to access information about Pre-Trade
Risk Controls, this mechanism would foster transparency between an
Entering Firm and its Clearing Firm regarding which Pre-Trade Risk
Control limits may have been set. For example, if an Entering Firm
designates its Clearing Firm to view the Pre-Trade Risk Controls set by
that Entering Firm, its Clearing Firm

may determine that it does not need to separately set Pre-Trade Risk
Controls on behalf of such Entering Firm.
    Because the Entering Firm is the ETP Holder that is entering orders
on the Exchange, the Exchange will not take action based on a Clearing
Firm's instructions about the Entering Firm's trading activities on the
Exchange without first receiving consent from the Entering Firm.
Accordingly, proposed Rule 7.19E(b)(2)(C) would provide that if an
Entering Firm designates a Clearing Firm to set Pre-Trade Risk Controls
for the Entering Firm, the Entering Firm would be consenting to the
Exchange taking certain prescribed actions (discussed further below)
with respect to the Entering Firm's trading activity as provided for in
proposed Rules 7.19E(c) and (d), described below. The Exchange would
consider an Entering Firm to provide such consent by authorizing a
Clearing Firm to enter Pre-Trade Risk Controls via the risk management
tool that will be provided to Entering Firms in connection with this
proposed rule change. Once such authorization is provided by the
Entering Firm, the Clearing Firm would have access to the Pre-Trade
Risk Controls that the Entering Firm designates. The proposed Rule
makes clear that by designating a Clearing Firm to set limits on its
trading activities, the Entering Firm will have authorized the Exchange
to act pursuant to the Clearing Firm's instructions if the limits set
by the Clearing Firm are breached.
    Proposed Rule 7.19E(b)(3) would set forth how the Pre-Trade Risk
Controls could be set or adjusted. Proposed Rule 7.19E(b)(3)(A) would
provide that Pre-Trade Risk Controls may be set before the beginning of
a trading day and may be adjusted during the trading day. Proposed Rule
7.19E(b)(3)(B) would provide that Entering Firms or Clearing Firms may
set Pre-Trade Risk Controls at the MPID level or at one or more sub-IDs
associated with that MPID.\9\ The Exchange believes that supporting
Pre-Trade Risk Controls at both an MPID and sub-ID level would provide
both Entering Firms, and if designated, their Clearing Firms, more
granular control over how such risk controls are determined and
monitored.
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    \9\ Entering Firms may request that the Exchange create sub-IDs
associated with their MPIDs.
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    Proposed Rule 7.19E(b)(4) would provide that with respect to Gross
Credit Risk Limits, an Entering Firm and, if so designated, its
Clearing Firm, will receive notifications when the Entering Firm is
approaching or has breached a limit set by itself or by the Clearing
Firm. The Exchange believes that by providing such notifications, the
Entering Firm, and if designated, its Clearing Firm, would have advance
notice that the Entering Firm is approaching a designated limit and
could take steps to mitigate the potential that an automated breach
action would be triggered.
    Proposed Rule 7.19E(c) would set forth the actions the Exchange
would be authorized to take when a Pre-Trade Risk Control set by an
Entering Firm or a Clearing Firm is breached, which would be referred
to as ``Automated Breach Actions.'' These proposed actions would be
automated; if a Pre-Trade Risk Control is breached, the Exchange would
automatically take the designated action and would not need further
direction from either the Entering Firm or Clearing Firm to take such
action.
    At the outset, proposed Rule 7.19E(c)(1) would provide that if both
an Entering Firm and its Clearing Firm set the same type of Pre-Trade
Risk Control for the Entering Firm but have set different limits, the
Exchange would enforce the more restrictive limit. For example, if an
Entering Firm sets a Single Order Maximum Notional Value Risk Limit of
$20 million and its Clearing Firm sets the same risk limit at $15
million, the Exchange will take action when the more restrictive limit
is breached--i.e., $15 million.
    Proposed Rule 7.19E(c)(2) would set forth the Automated Breach
Action the Exchange would take if an order would breach the designated
limit of either a Single Order Maximum Notional Value Risk Limit or
Single Order Maximum Quantity Risk Limit. As proposed, the Exchange
would reject the incoming order that would have breached the applicable
limit.
    Proposed Rule 7.19E(c)(3)(A) would set forth the Automated Breach
Actions the Exchange would take if a designated Gross Credit Risk Limit
is breached. The Exchange proposes to provide options of which
Automated Breach Action the Exchange would be authorized to take if a
Gross Credit Risk Limit is breached. Such Automated Breach Actions
would be taken at the MPID or sub-ID level that is associated with the
designated Gross Credit Risk Limit. As proposed, when setting Gross
Credit Risk Limits, the Entering Firm or Clearing Firm setting the
limit would be required to indicate one of the following actions that
the Exchange would take if such limit is breached:
     ``Notification Only.'' As set forth in proposed Rule
7.19E(c)(3)(A)(i), if this option is selected, the Exchange would
continue to accept new orders and order instructions and would not
cancel any unexecuted orders in the Exchange Book. Proposed Rule
7.19E(b)(4), described above, sets forth the notifications that would
be provided to an Entering Firm, and if designated, a Clearing Firm
regarding the Pre-Trade Risk Controls that have been set. With the
``Notification Only'' action, the Exchange would provide such
notifications, but would not take any other automated actions with
respect to new or unexecuted orders.
     ``Block Only.'' As set forth in proposed Rule
7.19E(c)(3)(A)(ii), if this option is selected, the Exchange would
reject new orders and order instructions but would not cancel any
unexecuted orders in the Exchange Book. The Exchange would continue to
accept instructions from the Entering Firm to cancel one or more orders
in full (including Auction-Only Orders) or any instructions specified
in proposed Rule 7.19E(e) (described below), but would not take any
automated action to cancel orders.
     ``Cancel and Block.'' As set forth in proposed Rule
7.19E(c)(3)(A)(iii), if this option is selected, in addition to the
Block actions described above, the Exchange would also cancel all
unexecuted orders in the Exchange Book other than Auction-Only Orders.
    If an Entering Firm and its Clearing Firm each set different limits
for a Gross Credit Risk Limit for the Entering Firm's activities on the
Exchange, proposed Rule 7.19E(c)(3)(B) would provide that the Exchange
would enforce the action that was chosen by the party that set the
limit that was breached. For example, if a Clearing Firm sets a lower
limit and designates the ``Cancel and Block'' Automated Breach Action,
if that limit is breached, the Exchange will implement that ``Cancel
and Block'' action even if the Entering Firm designated a different
Automated Breach Action.
    Proposed Rule 7.19E(c)(3)(C) would provide that if both the
Entering Firm and Clearing Firm set the same Gross Credit Risk Limit
and that limit is breached, the Exchange would enforce the most
restrictive Automated Breach Action. As further proposed, for purposes
of this Rule, the ``Cancel and Block'' action would be more restrictive
than ``Block Only,'' which would be more restrictive than
``Notification Only.'' For example, if the Entering Firm selects the
``Block Only'' action for a Gross Credit Risk Limit and its Clearing
Firm selects the ``Cancel and Block'' action for the same Gross Credit
Risk Limit, if the limit is breached, the Exchange would take the
``Cancel and Block'' action for the Entering Firm's orders.

    Proposed Rule 7.19E(c)(4) would provide that if a Pre-Trade Risk
Control set at the MPID level is breached, the Automated Breach Action
specified at the MPID level would be applied to all sub-IDs associated
with that MPID. For instance, if a Clearing Firm sets a Gross Credit
Risk Limit for an MPID at $500 million and the Entering Firm sets Gross
Credit Risk Limits for each of three sub-IDs associated with that MPID
at $500 million each, if two of the sub-IDs reach a $250 million limit,
which combined is the Gross Credit Risk Limit at the MPID level, the
Automated Breach Action associated with the limit at the MPID level
would be triggered and would apply also to the associated sub-IDs, even
though none of the sub-IDs have breached their separate $500 million
limits. This functionality ensures that an Entering Firm cannot
effectively override a Pre-Trade Risk Control set at the MPID level by
setting risk limits for each of the MPID's associated sub-IDs that
cumulatively equal more than the MPID's total Gross Credit Risk Limit.
    Proposed Rule 7.19E(d) concerns how an Entering Firm's ability to
enter orders and order instructions would be reinstated after a ``Block
Only'' or ``Cancel and Block'' Automated Breach Action has been
triggered. In such case, proposed Rule 7.19E(d) provides that the
Exchange would not reinstate the Entering Firm's ability to enter
orders and order instructions on the Exchange (other than instructions
to cancel one or more orders (including Auction-Only Orders) in full)
without the consent of (1) the Entering Firm, and (2) the Clearing
Firm, if the Entering Firm has designated that the Clearing Firm's
consent is required. The Exchange proposes to include this
functionality because the Clearing Firm bears the risk of any exposure
of its correspondent Entering Firms.
    Finally, proposed Rule 7.19E(e) would set forth ``kill switch''
functionality, which would allow an Entering Firm or its designated
Clearing Firm to direct the Exchange to take certain bulk Kill Switch
Actions with respect to orders. In contrast to the Automated Breach
Actions described above, which the Exchange would take automatically
after the breach of a credit limit, the Exchange would not take any of
the Kill Switch Actions without express direction from the Entering
Firm or its designated Clearing Firm.
    Specifically, Proposed Rule 7.19E(e) would specify that an Entering
Firm, or if authorized pursuant to proposed Rule 7.19E(b)(2)(A), its
Clearing Firm, could direct the Exchange to take one or more of the
following actions with respect to orders at either an MPID, or if
designated, sub-ID Level: (1) Cancel all Auction-Only Orders; (2)
Cancel all unexecuted orders in the Exchange Book other than Auction-
Only Orders; or (3) Block the entry of any new orders and order
instructions, provided that the Exchange would continue to accept
instructions from Entering Firms to cancel one or more orders
(including Auction-Only Orders) in full, and later, reverse that block.
    The Exchange proposes that the Kill Switch functionality proposed
in Rule 7.19E(e) would supersede and replace the Exchange's previously
filed proposed rule change,\10\ which provided certain post-trade risk
management tools to ETP Holders, but not to their Clearing Firms.
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    \10\ See Securities Exchange Act Release No. 71165 (December 20,
2013), 78 FR 79053 (December 27, 2013) (SR-NYSEMKT-2013-102) (Notice
of filing and immediate effectiveness of proposed rule change) (the
``2013 Risk Control Filing'').
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    The Exchange proposes to provide these post-trade Kill Switch
Actions in addition to the pre-trade Automated Breach Actions described
above in order to give Entering Firms and their Clearing Firms more
flexibility in setting risk controls. An Entering Firm that wants more
control over when and which actions are taken with respect to its
orders may choose to use these Kill Switch Actions instead of the
``Block'' or ``Cancel and Block'' Automated Breach Actions described
above. For example, for an Entering Firm that selects the
``Notification Only'' Automated Breach Action, if it receives
notification of a credit breach, it could choose to direct the Exchange
to take a Kill Switch Action described in proposed Rule 7.19E(e).
c. Proposed Rule Commentary
    The Exchange proposes Commentary .01 to Rule 7.19E to specify that
the Pre-Trade Risk Controls described in this Rule are meant to
supplement, and not replace, the ETP Holder's own internal systems,
monitoring and procedures related to risk management and are not
designed for compliance with Rule 15c3-5 under the Act.\11\ This
proposed Commentary specifies that use of the Exchange's pre-trade risk
controls would not automatically constitute compliance with Exchange or
federal rules and responsibility for compliance with all Exchange and
SEC rules remains with the ETP Holder. The Exchange does not guarantee
that these controls will be sufficiently comprehensive to meet all of
an ETP Holder's needs, the controls are not designed to be the sole
means of risk management, and using these controls will not necessarily
meet an ETP Holder's obligations required by Exchange or federal rules
(including, without limitation, the Rule 15c3-5).
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    \11\ See 17 CFR 240.15c3-5.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\12\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\13\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest,
and because it is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that the proposed rule will
remove impediments to and perfect the mechanism of a free and open
market and a national market system because the proposed optional Pre-
Trade Risk Controls would provide both Entering Firms, and if
designated, Clearing Firms, with the ability to manage risk, while also
providing an alert system that would help to ensure that such firms are
aware of developing issues. In addition, the Pre-Trade Risk Controls
would provide Clearing Firms, who have assumed certain risks of the
Entering Firms, greater control and flexibility over setting risk
tolerance and exposure on behalf of their correspondent Entering Firms.
As such, the Exchange believes that the Pre-Trade Risk Controls would
provide a means to address potentially market-impacting events, helping
to ensure the proper functioning of the market.
    In addition, the Exchange believes that the proposed rule change is
designed to protect investors and the public interest because the Pre-
Trade Risk Controls are a form of impact mitigation that will aid
Entering Firms and Clearing Firms in minimizing their risk exposure and
reduce the potential for disruptive, market-wide events. The Exchange
understands that ETP Holders implement a number of different risk-based
controls, including those required by Rule 15c3-5. The proposed
controls will serve as an additional tool for Entering Firms and
Clearing Firms to

assist them in identifying any risk exposure. The Exchange believes the
Pre-Trade Risk Controls will assist Entering Firms and Clearing Firms
in managing their financial exposure which, in turn, could enhance the
integrity of trading on the securities markets and help to assure the
stability of the financial system.
    Further, the Exchange believes that the proposed rule will foster
cooperation and coordination with persons facilitating transactions in
securities because the Exchange will provide alerts to Entering Firms
and their Clearing Firms when the Entering Firm's trading reaches
certain thresholds. As such, the Exchange will help Clearing Firms
monitor the risk levels of their correspondent Entering Firms and
provide tools for Clearing Firms, if designated, to take action.
    The Exchange believes that proposed Commentary .01 to Rule 7.19 is
designed to prevent fraudulent and manipulative acts and practices and
promote just and equitable principles of trade because it provides
clarity in Exchange rules that the proposed Pre-Trade Risk Controls are
intended to supplement, and not replace, an ETP Holder's own internal
systems, monitoring, and procedures related to compliance with Rule
15c3-5.
    Finally, the Exchange believes that the proposed rule change does
not unfairly discriminate among the Exchange's ETP Holders because use
of the Pre-Trade Risk Controls is optional and is not a prerequisite
for participation on the Exchange. In addition, because all orders on
the Exchange would pass through the risk checks, there would be no
difference in the latency experienced by ETP Holders who have opted to
use the Pre-Trade Risk Controls versus those who have not opted to use
them.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. In fact, the Exchange
believes that the proposal will have a positive effect on competition
because, by providing Entering Firms and their Clearing Firms
additional means to monitor and control risk, the proposed rule will
increase confidence in the proper functioning of the markets. The
Exchange believes the proposed Pre-Trade Risk Controls will assist
Entering Firms and Clearing Firms in managing their financial exposure
which, in turn, could enhance the integrity of trading on the
securities markets and help to assure the stability of the financial
system. As a result, the level of competition should increase as public
confidence in the markets is solidified.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    Because the foregoing proposed rule does not (i) significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate if consistent with the protection of
investors and the public interest, provided that the self-regulatory
organization has given 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,\14\ the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6) thereunder.\16\
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    \14\ The Exchange has fulfilled this requirement.
    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \17\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \17\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEAMER-2020-38 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEAMER-2020-38. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEAMER-2020-38 and should be submitted
on or before June 10, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-10821 Filed 5-19-20; 8:45 am]
BILLING CODE 8011-01-P


Prepared by Pat Fair, OW/ OGWDW 8/ 10/ 05 Chlorate Ion in Drinking Water Sources and Control of Chlorate Ion Chlorate ion ( ClO 3 ) is primarily present in drinking water as a result of the use of chlorine dioxide or hypochlorite solutions for oxidation/ disinfection in the treatment process. It may also be present in the untreated source water, but the ClO 3  concentrations contributed to drinking water by ambient water are generally much lower than those resulting from the treatment process.

The American Water Works Association ( AWWA) Disinfection Systems Committee tracks disinfection practices in US community water systems. Their most recent comprehensive survey ( completed in 1998) estimated that approximately 20% of the systems serving populations greater than 10,000 use sodium hypochlorite ( 2% generated it on site), 8% use chlorine dioxide, and < 1% use calcium hypochlorite. ( AWWA, 2000a) For systems serving populations less than 10,000, the survey estimated that approximately 34% use sodium hypochlorite, none use chlorine dioxide, and at least 4.5% use calcium hypochlorite. ( AWWA, 2000b)

Chlorine Dioxide: The use of chlorine dioxide can introduce ClO 3  into the finished water by several routes. Drinking water plants generally use sodium chlorite as a starting material in the production of chlorine dioxide. Chlorate ion may be present as a contaminant in the feedstock material ( usually less than four percent of the active chlorite is chlorate). A typical range of ClO 3

carryover to the finished water from chlorite feedstock contamination is about 50 µ g/ L for a 1 mg/ L dose of chlorine dioxide. ( Gates, 1998) Technology to generate chlorine dioxide using sodium chlorate is now available to the drinking water industry, which introduces the possibility of ClO 3  carryover to the finished water from the chlorate feedstock.

Chlorate ion may also be produced due to inefficient generation of chlorine dioxide. Excess chlorine will favor the production of ClO 3  over chlorine dioxide, as will keeping the generator mixtures at highly alkaline ( pH > 11) or acidic ( pH < 3) conditions. If the concentrations of feedstock reactants are too low or too much dilution water is added during the reaction, ClO 3

formation is also favored.

Chlorite ion ( ClO 2 ) is a major degradation product resulting from the reaction of chlorine dioxide with inorganic and organic constituents in the water. When free chlorine is used after the application of chlorine dioxide in the treatment process, ClO 2  is oxidized to ClO 3 . This conversion will continue over time as the water travels through the distribution system. Chlorate ion is also formed by photodecomposition of chlorine dioxide when treated water is exposed to bright sunlight in open basins.

The primary ways in which water systems can control the levels of ClO 3  in the finished water is through high efficiency operation of their chlorine dioxide generators and by reducing ClO 2

concentrations prior to the addition of free chlorine. Careful control of the generation process minimizes ClO 3  formation. Ferrous ion, which is a coagulant aid, can be used to convert ClO 2  to chloride ion and thus prevent it from reacting with free chlorine to form ClO 3 . Prepared by Pat Fair, OW/ OGWDW 8/ 10/ 05 Hypochlorite: Some water systems use sodium hypochlorite or calcium hypochlorite as their source of free chlorine. Chlorate ion can be formed in these products during the manufacturing process, but the decomposition of hypochlorite solutions during storage is the more significant source of ClO 3  in systems using hypochlorite. Sodium hypochlorite is usually purchased as a solution, and ClO 3  concentrations increase between the time of manufacture and delivery to the water plant. Calcium hypochlorite is a solid, and thus ClO 3  concentrations don't increase until calcium hypochlorite solutions are prepared for use at the water treatment plant.

The rate at which hypochlorite ion ( OCl) disproportionates to ClO 3  is influenced by concentration of OCl, pH, and temperature. The rate of decomposition increases as the concentration of OCl increases, so water systems can use dilution as one control strategy. The pH should be in the 12 to 13 range to minimize decomposition; a pH below 11 greatly increases the rate of decomposition. Hypochlorite solutions should be protected from high temperatures and sunlight. Storage time should be minimized; both from the time of manufacture to delivery and from the time of delivery to use.

Chlorate Ion Occurrence Data Data on the occurrence of ClO 3  in drinking water are available from two primary sources: the Information Collection Rule ( ICR) Auxiliary 1 Database, Version 5.0 ( USEPA, 2000) and the AwwaRF research study on the control of ClO 3  in hypochlorite solutions ( Gordon et al, 1995).

Information Collection Rule: The most extensive data on the occurrence of ClO 3  in drinking water is from the ICR ( USEPA, 1996). Source water and drinking water were monitored for ClO 3  between July 1997 and December 1998. Water systems serving a population of at least 100,000 were required to monitor for ClO 3  at treatment plants using chlorine dioxide or hypochlorite solutions in the treatment process. Plants using chlorine dioxide collected monthly samples of the source water entering the plant, the finished water leaving the plant, and at three sample points in the distribution system ( near the first customer, an average residence time and a maximum residence time). Plants using hypochlorite solutions were only required to collect quarterly samples of the water entering and leaving the plant. If chlorine dioxide or hypochlorite solutions were used intermittently at a plant, ClO 3  samples were only required in sample periods in which they were in use.

Chlorine dioxide was used by 22 water systems ( 29 treatment plants) during at least one of the 18 monthly ICR sampling periods. Data from 413 samples collected at the entry point to the distribution system showed ClO 3  concentrations ranging from < 20 µ g/ L to 1,600 µ g/ L. The ClO 3  concentrations ranged from < 20 µ g/ L to 2,200 µ g/ L in the 1084 samples collected in the distribution system. The distribution of average ClO 3  concentrations calculated for each treatment plant and sample point are summarized in Table 1. The distribution system average concentrations determined for each water plant by averaging the data from the three distribution system sample points are summarized in the last column of Table 1. The median distribution system average concentration is 129 µ g/ L with a range from < 20 µ g/ L to 691 µ g/ L. Prepared by Pat Fair, OW/ OGWDW 8/ 10/ 05 Sodium hypochlorite solutions were in use in 44 water systems ( 61 treatment plants) during the six quarterly ICR sampling periods. ( None of the systems reported using calcium hypochlorite as the source of their chlorine solutions.) Data from 312 samples were reported with concentrations ranging from < 20 µ g/ L to a maximum of 1,400 µ g/ L. The average ClO 3  concentration in the finished drinking water for each treatment plant ranged from < 20 µ g/ L to 502 µ g/ L with a median concentration of 99 µ g/ L. Table 1 summarizes the distribution of average ClO 3

concentrations calculated for each plant.

Table 1. Chlorate Concentrations1 ( µ g/ L)  ICR Data Hypochlorite Plants Chlorine Dioxide Treatment Plants Finished Finished Near First Customer Average Retention Time Maximum Retention Time Distribution System Average2 10th Percentile 23 56 52 55 35 52 20th Percentile 37 77 95 84 71 79 50th Percentile 99 119 126 132 138 129 80th Percentile 155 195 203 232 230 217 90th Percentile 239 226 239 282 301 264 Maximum 502 687 632 735 707 691 # WTPs 61 29 27 27 27 27 # PWSs 44 22 21 21 21 21 1The average chlorate concentration was calculated for each sample point at each WTP over the entire ICR monitoring program. The distribution of these averages is presented in this table. 2The distribution system average chlorate concentration was calculated for each WTP using the three distribution system sample points. The distribution of these averages is presented in this column.

AwwaRF Hypochlorite Project: The American Water Works Association Research Foundation sponsored a project to study how water systems could minimize ClO 3  formation in the hypochlorite solutions they use for disinfection. As part of the data gathering effort, they obtained information from 185 water systems concerning their use of hypochlorite solutions. Samples of source water, hypochlorite solution, and finished drinking water from 111 of the water systems were analyzed for ClO 3 . Only one set of samples was collected for each system.

Background information on the subset of 111 water systems that provided samples was not reported separately from the 185 systems who answered the questionnaire. Therefore, the ClO 3  Prepared by Pat Fair, OW/ OGWDW 8/ 10/ 05 concentrations cannot be directly related to the size of the water system or type of hypochlorite solution in use. However, 73.5 % of the systems who responded to the questionnaire served populations less than 100,000 with a subset of 66% serving populations less than 10,000. There is a possibility that a few systems using calcium hypochlorite were sampled in the AwwaRF project, since 13% of the 185 systems reported using calcium hypochlorite and 85% reported using sodium hypochlorite.

The ClO 3  concentrations reported in the finished water are summarized in Table 2. The median concentration in the finished water is 161 µ g/ L. The ClO 3  concentrations in the hypochlorite solutions ranged from 0.03 to 113 g/ L.

Table 2. Chlorate Concentrations  AwwaRF Project ( PWSs using Hypochlorite Solutions)

Finished Water Chlorate Concentration ( µ g/ L)

Minimum < 10 10th Percentile 15 20th Percentile 41 50th Percentile 161 80th Percentile 611 90th Percentile 1,160 Max 9,180 # PWSs 111 # States 13 Chronic Exposure to Chlorate Ion Even though the ICR ClO 3  sampling was targeted to systems suspected of having ClO 3

contamination due to the treatment process in use, it is reasonable to assume that there were not significant ClO 3  levels in the systems in the same size category that were not sampled. This is based on earlier drinking water studies that found ClO 3  concentrations in source water were too low to impact the levels in drinking water on the same scale as treating the water with either chlorine dioxide or hypochlorite ( Bolyard et al, 1993).

The ICR data confirm the presence of ClO 3  in source water ( 75 of 744 samples of water entering the treatment plants contained measurable ClO 3 ), but also demonstrate that the concentrations are Prepared by Pat Fair, OW/ OGWDW 8/ 10/ 05 generally very low, can vary considerably over time at the same sample site, and are minor compared to those observed from chlorine dioxide or hypochlorite use. Data were reported from 105 treatment plant influent sample points in the ICR and samples from 33 of those sites contained ClO 3  concentrations of 20 µ g/ L or greater. Chlorate concentrations were reported in influent samples from both surface and ground water sources. Samples from fifteen of the 33 sites contained measurable ClO 3  in more than one sampling period, but with one exception, the concentrations were all # 120 µ g/ L; 70% were between 20 and 50 µ g/ L. One influent water had a ClO 3  concentration of 944 µ g/ L in one sample period, but the concentrations were # 100 µ g/ L in the other sample periods. Three influent waters contained a high ClO 3  concentration ( 1,300 to 1,600 µ g/ L) in one sample period and none in the other sample periods. The ICR data indicate that the influence of source water ClO 3  ( as reflected by the influent samples) on the concentrations in finished drinking water is minimal compared to the contribution from using chlorine dioxide or hypochlorite solutions in the treatment process.

The ICR data set provides the best available estimate of long term exposure to ClO 3  from drinking water, because multiple samples were collected over an 18 month period. Only systems serving populations of at least 100,000 were sampled during the ICR. Even though this size category includes roughly one percent of the total number of drinking water systems in the United States, it serves almost 60 percent of the population. During the ICR, there were 296 water systems in this size category; 7% used chlorine dioxide and 15% used hypochlorite solutions.

When chlorine dioxide is the source of ClO 3  in drinking water, it is appropriate to use the average concentration in the distribution system to estimate exposure. This is because the concentration is expected to change within the system due to the conversion of ClO 2  to ClO 3  in the presence of chlorine. Fifty percent of the chlorine dioxide plants had average distribution system ClO 3

concentrations of # 129 µ g/ L. Ninety percent had concentrations # 264 µ g/ L.

The average ClO 3  concentration at the entry point to the distribution system can be used to estimate exposure when hypochlorite solutions are the source of the ClO 3  contamination. No additional ClO 3  is expected to be formed in the distribution system. Fifty percent of the plants using hypochlorite solutions had finished water ClO 3  concentrations of # 99 µ g/ L. Ninety percent had concentrations # 239 µ g/ L.

The AwwaRF data set is much smaller than the ICR data set, because the 111 systems from 13 states were only sampled once. Low levels of ClO 3  were measured in almost 20% of the source waters with 90 percent of the samples having concentrations less than 35 µ / L. ( Over 30% of the source waters sampled during the ICR contained measurable concentrations of ClO 3  with 90 percent having concentrations less than 23 µ / L.) The finished water ClO 3  concentrations measured in the AwwaRF study are generally higher than those observed in the ICR. This difference could be the result of a number of factors such as: 1) The AwwaRF data represents a single point in time while the ICR data reflects an average over 18 months; 2) Most of the AwwaRF samples were collected from utilities that served population of less than 100,000, while all of the ICR samples were from utilities serving at least 100,000; and 3) Hypochlorite treatment Prepared by Pat Fair, OW/ OGWDW 8/ 10/ 05 practices may have changed between when the AwwaRF samples were collected ( 1993) and the ICR samples were collected ( 1997 98).

References AWWA Water Quality Division Disinfection Systems Committee, Committee Report: Disinfection at Large and Medium Size Systems, May 2000a, p 32 43.

AWWA Water Quality Division Disinfection Systems Committee, Committee Report: Disinfection at Small Systems, May 2000b, p 24 31.

Bolyard, M., Fair, P. S., and Hautman, D. P. " Sources of Chlorate Ion in US Drinking Water," Journal AWWA Vol 85( 9) 81 88, 1993.

Gates, D. J. The Chlorine Dioxide Handbook. American Water Works Association, Denver, CO, 1998.

Gordon, G. G., Adam, L., and Bubnis, B. Minimizing Chlorate Ion Formation in Drinking Water When Hypochlorite Ion is the Chlorinating Agent. American Water Works Association Research Foundation, Denver, CO, 1995.

USEPA, 1996. National Primary Drinking Water Regulation: Monitoring Requirements for Public Drinking Water Supplies: Cryptosporidium, Giardia, Viruses, Disinfection Byproducts, Water Treatment Plant Data and Other Information Requirements. Final Rule. FR 61: 94: 24354 24388 ( May 14, 1996).

USEPA, 2000. ICR Auxiliary 1 Database. EPA 815 C 00 002. Office of Water, Cincinnati, OH, April 2000.


                  SUPPORTING STATEMENT FOR STANDARD FORM 83-1
                   REPORTING AND RECORDKEEPING REQUIREMENTS
                          FOR THE COLLECTION REQUEST
                    FOR THE CLEAN AIR ACT TRIBAL AUTHORITY

                              TABLE  OF CONTENTS

1.  Identification of the Information Collection

      1(a)  Title of Information Collection
      1(b)  Short Characterization/Abstract

2.  Need for and use of the Collection

      2(a)  Need/Authority for the Collection
      2(b)  Practical Utility Users of the Data

3.  Non duplication, Consultations, and Other Collection Criteria

      3(a)  Non-duplication
      3(b)  Public Notice Required Prior to ICR Submission to OMB
      3(c)  Consultations
      3(d)  Effects of Less Frequent Collection
      3(e)  General Guidelines
      3(f)  Confidentiality
      3(g)  Sensitive Questions

4.  The Respondents and the Information Requested

      4(a)  Respondents/SIC Codes
      4(b)  Information Requested
            (i)              Data items, including record keeping requirements
            (ii)             Respondent Activities

5.  The Information Collected-Agency Activities, Collection Methodology, and Information Management

      5(a)  Agency Activities
      5(b)  Collection Methodology and Information Management
      5(c)  Small Entity Flexibility
      5(d)  Collection Schedule

6.  Estimating The Burden and Cost of the Collaboration

      6(a)  Estimating Respondent Burden
      6(b)  Estimating Respondent Costs
            (i)              Estimating Labor Costs
            (ii)             Estimating Capital and Operation and Maintenance Costs
            (iii)             Capital/Start-up Operating and Maintenance (O&M) Costs
            (iv)             Annualizing Capital Costs
      6(c)  Estimating the Agency Burden
      6(d)  Estimating the Respondent Universe and Total Burden and Costs
      6(e)  Bottom Line Burden Hours and Cost Tables
            (i)             Respondent Talley
            (ii)             The Agency Talley
            (iii)              Variations in the Annual Bottom Line
      6(f)  Reasons for Change in Burden
      6(g)  Burden Statement

SUPPORTING STATEMENT FOR STANDARD FORM 83-1
                   REPORTING AND RECORDKEEPING REQUIREMENTS
                          FOR THE COLLECTION REQUEST
                    FOR THE CLEAN AIR ACT TRIBAL AUTHORITY

                      PART A OF THE SUPPORTING STATEMENT

   1.    IDENTIFICATION OF THE INFORMATION COLLECTION

       1(a)  Title of Information Collection

       Reporting and Recordkeeping Requirements for Clean Air Act Tribal Authority (40 CFR part 35, subpart B; parts 9, 49, 50 and 81).  This Information Collection Request (ICR) Number is 1676.06.   The OMB control number is 2060-0306.  This is a renewal ICR is for implementing Section 301(d) of the Clean Air Act.

       1(b)  Short Characterization/Abstract

 	The purpose of this ICR is to estimate the burden associated with the regulation governing the treatment of Indian tribes in the same manner as states as authorized in Section 301 (d) of the Clean Air Act.  The reporting burden is a one-time application for authorization to adopt Clean Air Act programs through regional program offices.

      This Information Collection Request (ICR) seeks authorization for tribes to demonstrate their eligibility to be treated in the same manner as states under the Clean Air Act (CAA) and to submit applications to implement a CAA program.  This ICR extends the collection period of information for determining eligibility, which expires May 31, 2011.  The ICR also is revising the estimates of burden costs for tribes in completing a CAA application.

	The program regulation provides for Indian tribes, if they so choose, to assume responsibility for the development and implementation of CAA programs.  The regulation, Indian Tribes: Air Quality Planning and Management (Tribal Authority Rule [TAR] 40 CFR parts 9, 35, 49, 50 and 81), sets forth how tribes may seek authority to implement their own air quality planning and management programs.  The rule establishes: 1) which CAA provisions Indian tribes may seek authority to implement, 2) what requirements the tribes must meet when seeking such authorization, and 3) what Federal financial assistance may be available to help tribes establish and manage their air quality programs. The TAR provides tribes the authority to administer air quality programs over all air resources, including non-Indian owned fee lands, within the exterior boundaries of a reservation and other areas over which the tribe can demonstrate jurisdiction. An Indian tribe that takes responsibility for a CAA program would essentially be treated in the same way a state would be treated for that program.

	The TAR adopts EPA's "streamlined" eligibility review and approval process for tribes to implement CAA programs.  The ICR was prepared according to the guidance contained in the Office of Information Collection (OIC) December 1996 ICR Handbook.  This handbook is the Agency's most current guidance document for preparing an ICR and follows the provisions of the Paperwork Reduction Act (4 U.S.C. section 1320) and the Office of Management and Budget (OMB) guidelines.

   1.    NEED FOR AND USE OF THE COLLECTION

       2(a)  Need/Authority for the Collection

       Implementation of regulations includes a collection of information by EPA from Indian tribes for purposes of determining if a tribe is qualified for delegation of the CAA Program. Section 114 of the CAA is the authority for the collection of information.

      Section 301(d) of the Clean Air Act (CAA) directs the Administrator of the Environmental Protection Agency (EPA) to promulgate regulations specifying those provisions of the Act which are appropriate for treating tribes in the same manner as states.  The regulations, which were approved in 1998, give tribes the opportunity, if they choose, to carry out virtually all Clean Air Act (CAA) programs.  The rule authorizes eligible tribes to implement CAA programs over all air resources within the exterior boundaries of their reservations, including non-Indian owned fee lands, or other areas within the tribes' jurisdiction.  This ICR requests clearance for tribes to apply for authority to administer CAA programs.

       2(b)  Practical Utility Users of the Data

 	EPA uses the submitted information to determine if the tribe meets the statutory criteria under CAA Section 301 (d) and is qualified for program delegation.

   1.    NON-DUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA

       3(a)  Non-duplication

       To avoid requiring submission of duplicate information, EPA will accept
 information previously submitted by an Indian tribe (i.e., information included in an application for treatment in the same manner as a State under another Act).

       3(b) Public Notice Required Prior to ICR Submission to OMB

       In compliance with the Paperwork Reduction Act, EPA solicited comments for a 60-day period prior to submission of the ICR to OMB.  Comments were requested by January 31, 2011 via a Federal Register announcement (11/29/2010, 75 FR 73076).  No comments were received.

       3(c) Consultations

 	An EPA workgroup drafted the proposed regulation following consultation with various tribal representatives and extensive internal review.  In developing this regulation EPA consulted with tribal representatives at the National Tribal Conference on Environmental Management in Cherokee, N.C. in May 1992 and at three "outreach meetings" in Chicago, Denver and San Francisco in November 1992.  A final set of outreach meetings was held with tribal representatives and with members of the State and Territorial Air Pollution Administrators and the Association of Local Air Pollution Control Officials (STAPPA/ALAPCO, now renamed National Association of Clean Air Agencies or NACAA) in September 1993.  Suggestions and comments articulated during these exchanges, most supporting the delegation of the CAA authority to tribes, were incorporated as appropriate into the proposed rule. The proposed rule was published on August 25, 1994 and solicited additional comments from the general public. These comments were addressed in the final rule promulgated in 1998.

           Prior to this renewal, each Regional EPA Office was contacted and asked to provide estimates to support the action.  The Regional Offices confirmed the estimated average burden of nine actions per year for each of the next three years.  Members of the public were also consulted during this renewal and asked to comment.  Three respondents, representing the public, tribes and tribal organizations responded and had no comments.  These respondents were Ryan Callison of Gore Oklahoma, Brandy Toft of Bemidji Minnesota, and Mehrdad Khatibi, Assistant Director of the Institute for Tribal Environmental Professionals at Northern Arizona University in Flagstaff Arizona.  This consultation indicates that tribes and the public continue to be comfortable with the process as it is being conducted and have a good understanding of the requirements.

       3(d)  Effects of Less Frequent Collection

 	Applications by Indian tribes for eligibility in air quality programs are a one-time collection of information per respondent.

       3(e)  General Guidelines

       No paperwork reduction guidelines contained in 5 CFR 1320.5 are exceeded by this information collection.

       3(f)  Confidentiality

       Any information submitted to the Agency for which a claim of confidentiality is made will be safeguarded according to the Agency policies set forth in Title 40, Chapter 1, part 2, subpart B - Confidentiality of Business Information (see 40 CFR 2; 41 FR 36902, September 1, 1976; amended by 43 FR 40000, September 8, 1978; 43 FR 42251, September 20, 1978; 44 FR 17674, March 23, 1979).

 	3(g)  Sensitive Questions

 	There are no sensitive questions.

   1.    THE RESPONDENTS AND THE INFORMATION REQUESTED

       4(a)  Respondents/SIC Codes

       Indian Tribes would be the sole respondents to this ICR. EPA estimates that 27 of the 570 tribes -- over the three year clearance period -- will apply for eligibility for CAA programs. Based on a survey of regional offices and basic knowledge of tribes, EPA assumes that 9 tribes will submit applications in Year 1, 8 in Year 2, and 8 in year 3. The assumption is based on projections provided by each Regional Office.  The TAR was promulgated in 1998, and tribes are just now building air quality programs.  Therefore, EPA expects the number of applications to remain relatively constant in the out years as additional tribes build capacity. However, since tribes have the option of applying for CAA programs, and it is ultimately up to the EPA to implement the Act where there is a gap, more or less tribes may be interested in seeking eligibility. If more tribes express an interest during the public comment period, EPA will revise this ICR and the estimated burden accordingly.

       4(b)  Information Requested.

            (i)             Data items, including record keeping requirements
               Recommend tribe maintain a copy of all documents produced on file in the tribal government offices.  No data is collected as part of this action.

            (ii) Respondent Activities

 	To be eligible for delegation of CAA programs, an Indian tribe must submit documentation showing they meet the following criteria: 1) be recognized by the Federal government (CAA section 302(r);  2) have an existing governing body which carries out governmental duties (such as tax and police functions);  3) show that the management and protection of air resources applies within the exterior boundaries of the reservation or other areas within the tribe's jurisdiction, and 4) be reasonably expected to be capable of implementing all applicable regulations.  Meeting the definition of "Federally recognized tribe" (Section 302(r)) can be achieved in two ways: 1) approval by the Secretary of Interior (or in the process of doing so) as documented in the Federal Register notices periodically published by the Secretary; or 2) previous EPA approval for implementation of another program under another environmental statute. Previous eligibility determination under another EPA program (such as the CWA, SDWA, or other CAA program) satisfies the governing body requirement as well.  If an initial declaration has not yet been approved, this can be shown by demonstrating that the tribe is performing governmental functions to promote the public health, safety and welfare of the population, including such things as levying taxes, acquiring land by exercising the power of eminent domain, and police powers.

 	As for the third criterion, demonstration of appropriate jurisdiction, identifying tribal jurisdictions clearly and with precision, can be done with the use of maps and a legal description of the area; if the tribe is asserting jurisdiction over off-reservation lands, it must demonstrate the legal and factual basis for its jurisdiction consistent with applicable principles of Indian law.
 	In evaluating a tribal demonstration of program implementation capability, EPA considers their management and technical skills by reviewing the following factors: 1) tribe's previous management experience, 2) existing environmental or public health programs administered, 3) mechanism(s) in place for carrying out the executive, legislative and judicial functions of the tribal government, 4) the relationship between regulated entities and regulating administrative agency, and 5) the technical and administrative capabilities of the staff. Tribes with limited management and technical skills can also submit a plan detailing steps for acquiring those skills.

   1. THE INFORMATION COLLECTED -- AGENCY ACTIVITIES, COLLECTIONS METHODOLOGY AND INFORMATION MANAGEMENT

       5(a)  Agency Activities

       EPA will review the applications to determine if they meet the eligibility criteria.

       5(b)  Collection Methodology and Management

 	The collection methodology for this ICR maintains that a tribal application for implementation of a CAA program is a one-time submission that does not lend itself to electronic formatting. For example, tribal boundary information would be difficult to translate electronically. These applications will be reviewed and retained by the regional program offices.

       5(c)  Small Entity Flexibility

       Information collection requirements covered in this ICR will not affect small businesses. All respondents are Indian tribes.

       5(d)  Collection Schedule

       Tribes can apply on a voluntary basis for eligibility under the CAA Tribal Authority Rule.  Therefore, a collection schedule is not applicable.

   1. ESTIMATING THE BURDEN AND COST OF THE COLLECTION

      This section provides information on the cost and burden associated with the information collection for both the respondents and the Agency.  I present these cost and burden estimates as individual costs per respondent, and as an aggregate cost for the entire respondent universe and the Agency on an annual basis and over the entire period covered by the ICR.

       6(a) Estimating Respondent Burden

       The annual burden to the respondent Indian tribes is a function of the requirements of the eligibility application and average time required for tribes to complete each information item. The average burden per respondent varies, depending on whether the tribe has received approval under another environmental program, i.e., Clean Water Act, Safe Drinking Water Act.  The annual burden per tribe is estimated at 40 hours at a cost of $2,362.00. The estimated annual burden is 320 hours at a cost of $18,896.00.  See Exhibit I.

                                   Exhibit 1
                       Annual Respondent Burden and Costs

                                    Activity
                                    (A)Tech
                                      hrs.
                                  ($59.05 hr.)
                                   (B)Burden
                                      hrs.
                                 (C)Collection
                                      Cost
                                  (D)* Annual
                                   collection

                                     Annual
                                     Burden
                                     (hrs)
                                    (B)*(D)
                                     Total
                                     Annual
                                      Cost
                                    (C)*(D)
                                   Collecting

                                   Compiling

                                   Reporting

                                     Total
                                       13

                                       11

                                       16

                                       40
                                       13

                                       11

                                       16

                                       40
                                    $767.65

                                    $649.55

                                    $944.80

                                   $2,362.00
                                      N/A

                                      N/A

                                      N/A

                                       8*
                                      N/A

                                      N/A

                                      N/A

                                      320

                                   $18,896.00
 * Annual collection is the average number of collections per year. For the three-year period, EPA expects a total of 25 respondents.  25 respondents / 3 years = 8 collections annually.
 The annualized responses per year over the three-year period: 25/3=8.
 The annualized burden hours over the three year period: 960/3=320.

       6(b)  Estimating Respondent Costs

       The cost imposed on the tribes as respondents includes the burden placed on collecting, compiling, and reporting the information and the wages of the typical tribal worker performing these activities.  The cost is associated with salaries and overhead for tribal employees will probably vary significantly.  The average respondent per hour labor cost is $59.05 ($28.12*110%) for an Environmental Scientist. The rates include a factor of 110%, added to each labor rate per Office of Management and Budget (OMB) policy.  The labor rates are based on hourly wages for the appropriate government (tribal) employees as determined by using the Bureau of Labor and Statistics (BLS) employment cost trends tables for government (tribal) workers, May 2009.  A 110% factor was added to the original rates per OMB policy.  The cost per respondent is estimated to be $2,362.00; the total annual respondent cost is $18,896.00.  The total cost for the three-year collection period is. $56,688.00

            (i)              Estimating Labor Costs

      This rule incorporates the Agency's streamlined process for treating tribes in manner similar to the States. Since tribes are not required to participate in this program, the number of applications will vary depending upon air quality conditions, presence of major sources of air pollution on reservations, and the tribes' interest in and capacity to carry out CAA programs. For the purposes of estimating the total burden associated with the regulation, EPA has derived the following estimates:

         * The estimated number of respondent tribes applying for CAA programs over the next three years is 25.  The annual average is 8 (25 respondents divided by 3 years).

         * EPA estimates 40 hours per respondent for an annual burden of 360 hours.

         * The average respondent labor cost is $59.05 per hour for Professional/Technical.  A factor of 110% was added to each labor cost category per Office of Management and Budget policy.

         * The annual per respondent cost is $2,362.00.  The annual total cost is estimated to be $18,896.00 per year for a total of $56,688.00 over the three-year collection period.

            (i)             Estimating Capital and Operations and Maintenance Costs

      There are no capital and operations and maintenance costs since the information collection only requires an application for eligibility to be filed so as to participate in a program. No capital investments are required to develop the application and no operations and maintenance costs are encountered.

            (ii)               Capital/Start-up Operating and Maintenance (O&M) Costs

            (iii)               Annualizing Capital Costs

       6(c) Estimating Agency Burden and Costs

       The burden and cost imposed on the Federal government is a function of 1) the average number of responses to each information collection and reporting requirements, for this EPA expects 8; and 2) the time required for the Federal government to review and process that information, and EPA estimates it will take an average of 40 hours per respondent.  EPA expects to review, on an annual basis, 8 responses at 40 hours per response for an annual burden of 320 hours. EPA's review of the 25 tribal applications -- over the three-year clearance period -- is 1,000 hours.  The review time will be considerably less if the Indian tribe has already established eligibility with another EPA program, but it also may be higher.  Each individual respondent has separate and unique circumstances that affect the amount of time required of the EPA to process an application.  Therefore, additional time may be required, but the EPA estimates that it takes on average, 40 hours per respondent to review, publish, consult, and finalize a single request.

 	Annual Burden: 8 responses *40 hrs./response= 320 hrs.
 	Total Burden: 25 responses * 40 hrs./response = 1000 hrs.

 	The cost imposed on the Federal government for review of the information requirements is the burden of reviewing information (described above) and the wages of the typical Federal worker performing these activities.  The cost associated with salaries and overhead for Federal employees will probably vary significantly.  As preciously mentioned, it is difficult to predict the number of hours EPA will spend on any given respondent. On average it will take 40 hours.

 	This ICR uses estimates from the hourly rate for federal workers as per the Office of Personnel Management's (OMB) rate for General Service (GS) federal employees, May, 2010.  The average rate for a GS-10, $30.88, plus a factor of 160% to include employee benefits as per OMB policy, amounts to $80.29 per hour labor cost.  The annual Agency cost is $22,481.20.  The total Agency cost over the three-year collection period is estimated to be $70,253.75.  See Exhibit 2.

                                   Exhibit 2
                         Annual Agency Burden and Costs
                                    Activity
                                    (A)GS-10
                                      hrs.
                                  ($80.29 hr.)
                                   (B)Burden
                                      hrs.
                                 (C)Collection
                                      Cost
                                      (D)*
                                     Annual
                                   Collection
                                     Annual
                                  Burden (hrs)
                                    (B)*(D)
                                     Annual
                                      Cost
                                    (C)*(D)
                                   Collecting

                                   Compiling

                                    Comments

                                     Total
                                       9

                                       9

                                       17

                                       35
                                       9

                                       9

                                       17

                                       35
                                    $722.61

                                    $722.61

                                   $1,364.93

                                   $2,810.15
                                      N/A

                                      N/A

                                      N/A

                                       8*

                                      280

                                   $22,481.20
 * Annual collection is the average number of collections per year. For the three-year period, EPA expects a total of 25 respondents. 25 respondents / 3 years = 8 collections annually.
 The annualized responses per year over the three year period: 25/3=8.
 The annualized burden hours over the three year period is 840/3=280.

       6(d)  Estimating the Respondent Universe and Total Burden and Costs

       The annual burden for the respondents is 320 hours.  The annual cost for the respondents is $18,896.  The total burden and cost for the respondents is, 1,080 hours at a cost of $56,688.00 for the three-year collection period.  The annual burden for the Agency is 280 hours.  The annual cost for the Agency is $22,481.20.  The total burden and cost for the Agency is 875 hours at a cost of $70,253.75.for the three-year collection period.

       6(e)  Bottom Line Burden Hours and Cost Tables

       The bottom line burden hours and cost tables for respondents are the summaries of all the hours and costs incurred for all activities

      (i)        Respondent Tally
      The bottom line Respondent Tally is presented in Exhibit 1

      (ii)       The Agency Tally
      The bottom line Agency Tally is presented in Exhibit 2

      (iii)       Variations in the Annual Bottom Line
      The burden and cost estimates are not expected to vary from year to year over the collection period for this ICR.  That is, the bottom line tallies presented in Exhibit 1 and 2 are not expected to change over the course of the next 3 years.

       6(f)  Reasons for Change in Burden

       The total burden hours have been updated to reflect new estimates that are based on the number of applications the EPA received under the previous ICR and what EPA estimates it will receive in the upcoming years. There is no difference between the active ICR and this ICR in the number of hours per response.  EPA estimates that it takes a respondent an average of 40 hours to process a single request.
 	Tribes are not required to seek this eligibility and therefore it is possible that the actual number of respondents will differ from the estimates. These numbers represent EPA estimates based on discussion with regional offices and expectations of the capacity of tribes to actively seek eligibility.

       6(g)  Burden Statement

	The annual public reporting and recordkeeping burden for this collection of information is estimated to average 40 hours per response.  Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency.  This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.  An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.  The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

 	To comment on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, including the use of automated collection techniques, EPA has established a public docket for this ICR under Docket ID Number EPA-HQ-OAR-2004-0093, which is available for online viewing at www.regulations.gov, or in person viewing at the Air and Radiation Docket and Information Center  in the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution Avenue, NW, Washington, D.C.  The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays.  The telephone number for the Reading Room is<PHONE_NUMBER>, and the telephone number for the Clean Air Act Tribal Authority is<PHONE_NUMBER>.  An electronic version of the public docket is available at www.regulations.gov.  This site can be used to submit or view public comments, access the index listing of the contents of the public docket, and to access those documents in the public docket that are available electronically.  When in the system, select "search," then key in the Docket ID Number identified above.  Also, you can send comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, D.C. 20503, Attention: Desk Officer for EPA.  Please include the EPA Docket ID Number EPA-HQ-OAR-2004-0093 and OMB Control Number 2060-0306 in any correspondence.

 Part B of the Supporting Statement

	This part is not applicable because no statistical methods were used in collecting this information.