[Federal Register Volume 81, Number 18 (Thursday, January 28, 2016)]
[Rules and Regulations]
[Pages 4889-4891]
[FR Doc No: 2016-01572]

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 ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2015-0545; FRL-9941-72-Region 9]

Disapproval of California Air Plan Revisions, South Coast Air
Quality Management District

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is finalizing
disapproval of revisions to the South Coast Air Quality Management
District (SCAQMD) portion of the California State Implementation Plan
(SIP). This action was proposed in the Federal Register on November 24,
2015 and concerns rules regulating Vehicle Scrapping, Employee Trip
Reduction, and procedures for the hearing board concerning variances
and subpoenas. The submitted SCAQMD rules are discretionary and this
disapproval does not reveal a deficiency in the SIP.

DATES: Effective Date: This rule is effective on February 29, 2016.

ADDRESSES: The EPA has established docket number EPA-R09-OAR-2015-0545
for this action. Generally, documents in the docket for this action are
available electronically at www.regulations.gov or in hard copy at EPA
Region IX, 75 Hawthorne Street, San Francisco, California 94015-3901.
While all documents in the docket are listed at www.regulations.gov,
some information may be publicly available only at the hard copy
location (e.g., copyrighted material, large maps), and some may not be
publicly available in either location (e.g., CBI). To inspect the hard
copy materials, please schedule an appointment during normal business
hours with the contact listed in the FOR FURTHER INFORMATION CONTACT
section.

FOR FURTHER INFORMATION CONTACT: Idalia P[eacute]rez, EPA Region IX,
(415) 972-3248<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and
``our'' refer to the EPA.

Table of Contents

I. Proposed Action
II. Public Comments and EPA Responses
III. EPA Action
IV. Statutory and Executive Order Reviews

I. Proposed Action

    On November 24, 2015 (80 FR 73156), the EPA proposed to disapprove
the following rules that were submitted for incorporation into the
California SIP.

----------------------------------------------------------------------------------------------------------------
                                                                                Adopted or
          Local agency                Rule #             Rule title              amended           Submitted
----------------------------------------------------------------------------------------------------------------
SCAQMD..........................            1610  Old-Vehicle Scrapping...  05/09/97.........  06/03/97
SCAQMD..........................            2202  On-Road Motor Vehicle     10/09/98.........  06/03/99
                                                   Mitigation Options.
SCAQMD..........................           503.1  Ex Parte Petitions for    02/05/88.........  02/07/89
                                                   Variances.
SCAQMD..........................             504  Rules from which          01/05/90.........  05/13/91
                                                   Variances Are Not
                                                   Allowed.
SCAQMD..........................           511.1  Subpoenas...............  02/05/88.........  02/07/89
----------------------------------------------------------------------------------------------------------------

    We proposed to disapprove these rules because some rule provisions
do not satisfy the requirements of section 110 and part D of the Act.
    We proposed to disapprove the SIP revision for Rule 1610 based at
least in part on the following deficiencies:
    1. The Section (e)(2) requirement that engines of scrapped vehicles
be destroyed is insufficiently federally enforceable for various
reasons.
    2. The Section (f)(2)(A) requirement that the vehicle be registered
for two years within SCAQMD is not fully enforceable by allowing the
Executive Officer to approve different documentation.
    3. The Section (g) requirement of a visual and functional
inspection of the vehicle has no recordkeeping requirements.
    4. There is no recordkeeping requirement to demonstrate compliance
with the Section (g)(1) requirement that vehicles be driven under their
own power to the scrapping site.
    5. There is no requirement to maintain records for the life of
Mobile Source Emission Reduction Credits.
    We proposed to disapprove the SIP revision for Rule 2202 based at
least in part on the following deficiencies:
    1. Per Section (f)(1), the rule relies on Regulation XVI, which is
not currently in the SIP.
    2. Per Section (f)(3), the rule relies on the Air Quality
Investment Program (Rule 2501), which is not currently in the SIP.
    3. Per Section (f)(4), the rule relies on emission reduction
strategies approved on a case-by-case basis by the Executive Officer.
    4. Per Section (g)(4), the rule relies on vehicle miles travelled
reduction programs approved on a case-by-case basis by the Executive
Officer.
    We proposed to disapprove the SIP revision for Rules 503.1 and 504
because they conflict with CAA sections 110(a) and (i) and fail to
address that a state- or district-issued variance has no effect on
enforcing the underlying federal requirement unless the variance is
submitted to and approved by EPA as a SIP revision.
    We proposed to disapprove the SIP revision for Rule 511.1 to avoid
potential conflict with EPA's independent authorities provided in CAA
section 113, section 114 and elsewhere.
    Our proposed action contains more information on the basis for this
rulemaking and on our evaluation of the submittal.

II. Public Comments and EPA Responses

    The EPA's proposed action provided a 30-day public comment period.
During this period, we received no comments.

III. EPA Action

    No comments were submitted that change our assessment of the rules
as described in our proposed action. Therefore, as authorized in
section 110(k)(3) of the Act, the EPA is finalizing a full disapproval
of the submitted rules. This final disapproval does not trigger
sanctions or a requirement for the EPA to issue a federal
implementation plan (FIP). Sanctions will not be imposed under CAA
179(b) because the submittal of Rules 1610, 2202, 503.1, 504 and 511.1
is discretionary (i.e., these rules are not required to be included in
the SIP), and the EPA will not promulgate a FIP in this instance under
CAA 110(c)(1) because the disapproval does not reveal a deficiency in
the SIP for the area that such a FIP must correct. Specifically: (1)
Rule 1610 is voluntary and only serves to provide for an alternative
method of compliance for stationary and other emission sources subject
to other District regulations that allow the use of credits as a
compliance option; and (2) Rule 2202 is not a required CAA submittal
because the CAA gives state and local agencies discretion, but does not
require, employers ``to implement programs to reduce work-related
vehicle trips and miles travelled by employees'' (see CAA section
182(d)(1)(B)). Additionally, at this time, we have not credited
emission reductions from Rules 1610 or 2202 in an approved SIP and we
are not aware of a SCAQMD plan submitted to EPA that relies on emission
reductions from these rules to fulfill a CAA requirement. Accordingly,
the failure of the SCAQMD to adopt revisions to Rules 1610 and 2202
would not adversely affect the SIP's compliance with the CAA's
requirements, such as the requirements for section 182 ozone RACT,
reasonable further progress, and attainment demonstrations. Rules
503.1, 504 and 511.1 regulate hearing board procedures and do not
control emission sources or otherwise generate emission reductions nor
are they required elements of the SIP. Thus, EPA does not need to
impose sanctions or promulgate a FIP upon their disapproval. Note that
the submitted rules have been adopted by the SCAQMD, and a final
disapproval by the EPA would not prevent the local agency from
enforcing them or the revised versions of these rules subsequently
adopted by SCAQMD as a matter of State law.

IV. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders
can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review

    This action is not a significant regulatory action and was
therefore not submitted to the Office of Management and Budget (OMB)
for review.

B. Paperwork Reduction Act (PRA)

    This action does not impose an information collection burden under
the PRA, because this SIP disapproval does not in-and-of itself create
any new information collection burdens, but simply disapproves certain
State requirements for inclusion in the SIP.

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. This
action will not impose any requirements on small entities. This SIP
disapproval does not in-and-of itself create any new requirements but
simply disapproves certain State requirements for inclusion in the SIP.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments. This action disapproves pre-existing requirements
under State or local law, and imposes no new requirements. Accordingly,
no additional costs to State, local, or tribal governments, or to the
private sector, result from this action.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will 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.

F. Executive Order 13175: Coordination With Indian Tribal Governments

    This action does not have tribal implications, as specified in
Executive Order 13175, because the SIP revision that the EPA is
disapproving would not apply on any Indian reservation land or in any
other area where the EPA or an Indian tribe has demonstrated that a
tribe has jurisdiction, and will not impose substantial direct costs on
tribal governments or preempt tribal law. Thus, Executive Order 13175
does not apply to this action.

G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks

    The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. This action is not subject to
Executive Order 13045 because this SIP disapproval does not in-and-of
itself create any new regulations, but simply disapproves certain State
requirements for inclusion in the SIP.

H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use

    This action is not subject to Executive Order 13211, because it is
not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act (NTTAA)

    Section 12(d) of the NTTAA directs the EPA to use voluntary
consensus standards in its regulatory activities unless to do so would
be inconsistent with applicable law or otherwise impractical. The EPA
believes that this action is not subject to the requirements of section
12(d) of the NTTAA because application of those requirements would be
inconsistent with the CAA.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Population

    The EPA lacks the discretionary authority to address environmental
justice in this rulemaking.

List of Subjects in 40 CFR Part 52

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

    Dated: January 14, 2016.
Jared Blumenfeld,
Regional Administrator, Region IX.

    Part 52, Chapter I, Title 40 of the Code of Federal Regulations is
amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

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

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

Subpart F--California

0
2. Section 52.242 is amended by adding paragraphs (a)(1)(iv), (v),
(vi), (vii) and (viii) to read as follows:

Sec.  52.242  Disapproved rules and regulations.

    (a) * * *
    (1) * * *
    (iv) Rule 511.1, ``Subpoenas,'' submitted on February 7, 1989.
    (v) Rule 503.1, ``Ex Parte Petitions for Variances,'' submitted on
February 7, 1989.
    (vi) Rule 504, ``Rules from which Variances Are Not Allowed,''
submitted on May 13, 1991.
    (vii) Rule 1610, ``Old-Vehicle Scrapping,'' submitted on June 3,
1997.
    (viii) Rule 2202, ``On-Road Motor Vehicle Mitigation Options,''
submitted on June 3, 1999.
* * * * *
[FR Doc. 2016-01572 Filed 1-27-16; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 77, Number 201 (Wednesday, October 17, 2012)]
[Rules and Regulations]
[Pages 63732-63734]
[FR Doc No: 2012-25552]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket No. USCG-2012-0904]
RIN 1625-AA00

Safety Zone; Bridge Demolition Project; Indiana Harbor Canal,
East Chicago, IN

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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SUMMARY: The Coast Guard is establishing a temporary safety zone on the
Indiana Harbor Canal in East Chicago, Indiana. This safety zone is
intended to restrict vessels from a portion of the Indiana Harbor Canal
due to the Demolition Project on the Cline Avenue Bridge. This
temporary safety zone is necessary to protect the surrounding public
and vessels from the hazards associated with the demolition project.

DATES: This rule will be effective between October 27 and November 10,
2012. This rule will be enforced from 6:00 to 8:00 a.m. on October 27
and November 10, 2012.

ADDRESSES: Documents indicated in this preamble as being available in
the docket are part of docket USCG-2012-0904 and are available online
by going to www.regulations.gov, inserting USCG-2012-0904 in the
``Search'' box, and then clicking ``search.'' They are also available
for inspection or copying at the Docket Management Facility (M-30),
U.S. Department of Transportation, West Building Ground floor, Room
W12-140, 1200 New Jersey Avenue SE., Washington DC 20590, between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this
temporary rule, contact or email MST1 Joseph McCollum, U.S. Coast Guard
Sector Lake Michigan, at<PHONE_NUMBER> or<EMAIL_ADDRESS>If
you have questions on viewing the docket, call Renee V. Wright, Program
Manager, Docket Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Acronyms

DHS Department of Homeland Security
FR Federal Register
NPRM Notice of Proposed Rulemaking

A. Regulatory History and Information

    The Coast Guard is issuing this temporary final rule without prior
notice and opportunity to comment pursuant to authority under section
4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This
provision authorizes an agency to issue a rule without prior notice and
opportunity to comment when the agency for good cause finds that those
procedures are ``impracticable, unnecessary, or contrary to the public
interest.'' Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good
cause exists for not publishing a notice of proposed rulemaking (NPRM)
with respect to this rule because doing so would be impracticable and
contrary to the public interest. The final details for this event were
not known to the Coast Guard until there was insufficient time
remaining before the event to publish an NPRM. Thus, delaying the
effective date of this rule to wait for a comment period to run would
be both impracticable and contrary to the public interest because it
would inhibit the Coast Guard's ability to protect vessels from the
hazards associated with the demolition project on the Cline Avenue
bridge, which are discussed further below.
    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause
exists for making this rule effective less than 30 days after
publication in the Federal Register. For the same reasons discussed in
the preceding paragraph, waiting for a 30 day notice period to run
would be impracticable and contrary to the public interest.

B. Basis and Purpose

    On October 27 and November 10, 2012, Walsh Construction Company
will be conducting demolition on portions of the Cline Avenue bridge in
East Chicago, IN. The Captain of the Port, Sector Lake Michigan, has
determined that this demolition project will pose a significant risk to
public safety and property. Such hazards include loss of life and
property in the proximity of explosives, and collisions among vessels
and contractors involved in the demolition project.

C. Discussion of Rule

    With the aforementioned hazards in mind, the Captain of the Port,
Sector

Lake Michigan, has determined that this temporary safety zone is
necessary to ensure the safety of persons and vessels during the
demolition project on the Cline Ave bridge. This zone will be enforced
between 6:00 a.m. and 8:00 a.m. on October 27 and November 10, 2012.
    The safety zone will encompass all waters of the Indiana Harbor
Canal in the vicinity of the Cline Avenue Bridge.
    Entry into, transiting, or anchoring within the safety zone is
prohibited unless authorized by the Captain of the Port, Sector Lake
Michigan, or his designated on-scene representative. The Captain of the
Port or his designated on-scene representative may be contacted via VHF
Channel 16.

D. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on numerous statutes and executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of Executive Order 12866 or
under section 1 of Executive Order 13563. The Office of Management and
Budget has not reviewed it under those Orders. It is not
``significant'' under the regulatory policies and procedures of the
Department of Homeland Security (DHS). We conclude that this rule is
not a significant regulatory action because we anticipate that it will
have minimal impact on the economy, will not interfere with other
agencies, will not adversely alter the budget of any grant or loan
recipients, and will not raise any novel legal or policy issues. The
safety zone created by this rule will be small and enforced for only
two hours on each day it is in effect. Under certain conditions,
moreover, vessels may still transit through the safety zone when
permitted by the Captain of the Port.

2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The Coast Guard
certifies under 5 U.S.C. 605(b) that this rule will not have a
significant economic impact on a substantial number of small entities.
    This rule will affect the following entities, some of which might
be small entities: the owners or operators of vessels intending to
transit or anchor in a portion of Indiana Harbor Canal on October 27
and November 10, 2012.
    This safety zone will not have a significant economic impact on a
substantial number of small entities for the following reasons: This
safety zone would be activated, and thus subject to enforcement, for
only 2 hours on 2 days. Traffic may be allowed to pass through the zone
with the permission of the Captain of the Port. The Captain of the Port
can be reached via VHF channel 16. Before the activation of the zone,
we would issue local Broadcast Notice to Mariners.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT
section above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and determined
that this rule does not have implications for federalism.

6. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

7. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

8. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

9. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

10. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

11. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does 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.

12. Energy Effects

    This action is not a ``significant energy action'' under Executive
Order

13211, Actions Concerning Regulations That Significantly Affect Energy
Supply, Distribution, or Use.

13. Technical Standards

    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

14. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined
that this action is one of a category of actions that do not
individually or cumulatively have a significant effect on the human
environment. This rule involves the establishment of a safety zone and,
therefore it is categorically excluded from further review under
paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An
environmental analysis checklist supporting this determination and a
Categorical Exclusion Determination are available in the docket where
indicated under ADDRESSES. We seek any comments or information that may
lead to the discovery of a significant environmental impact from this
rule.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for Part 165 continues to read as follows:

    Authority:  33 U.S.C. 1231; 46 U.S.C. Chapters 701, 3306, 3703;
50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Pub.
L. 107-295, 116 Stat. 2064; Department of Homeland Security
Delegation No. 0170.1.

0
2. Add Sec.  165.T09-0904 to read as follows:

Sec.  165.T09-0904  Safety Zone; Bridge Demolition Project, Indiana
Harbor Canal, East Chicago, Indiana.

    (a) Location. The safety zone will encompass all waters of the
Indiana Harbor Canal in the vicinity of the Cline Avenue Bridge.
    (b) Effective and enforcement period. This zone will be effective
and enforced between 6:00 a.m. and 8:00 a.m. on October 27 and November
10, 2012.
    (c) Regulations.
    (1) In accordance with the general regulations in Sec.  165.23 of
this part, entry into, transiting, or anchoring within this safety zone
is prohibited unless authorized by the Captain of the Port, Sector Lake
Michigan or his designated on-scene representative.
    (2) This safety zone is closed to all vessel traffic, except as may
be permitted by the Captain of the Port, Sector Lake Michigan or his
designated on-scene representative.
    (3) The ``on-scene representative'' of the Captain of the Port,
Sector Lake Michigan is any Coast Guard commissioned, warrant or petty
officer who has been designated by the Captain of the Port, Sector Lake
Michigan to act on his behalf.
    (4) Vessel operators desiring to enter or operate within the safety
zone shall contact the Captain of the Port, Sector Lake Michigan or his
on-scene representative to obtain permission to do so. The Captain of
the Port, Sector Lake Michigan or his on-scene representative may be
contacted via VHF Channel 16. Vessel operators given permission to
enter or operate in the safety zone must comply with all directions
given to them by the Captain of the Port, Sector Lake Michigan, or his
on-scene representative.

    Dated: September 27, 2012.
M. W. Sibley,
Captain, U.S. Coast Guard, Captain of the Port, Sector Lake Michigan.
[FR Doc. 2012-25552 Filed 10-16-12; 8:45 am]
BILLING CODE 9110-04-P


\35\ See Securities Act Release No. 8591 (July 19, 2005), 70 FR
44722 (August 3, 2005).
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    Second, the proposed rule changes would eliminate the quiet periods
around the expiration, waiver or termination of a lock-up agreement
provided, as discussed below, that members provide an additional
certification, similar to Regulation AC, to having a bona fide reason
for issuing research during such periods. According to NASD, the quiet
periods surrounding lock-up releases are intended to prevent abusive
``booster shot'' reports by members to raise the stock price of a
company just before previously locked-up shares become freely saleable
into the market by a company or its major shareholders.
    While NASD remains concerned that these periods pose heightened
concerns about biased research, the changes to internal structure of
investment banks and the other safeguards imposed by the current rules
appear to have addressed these concerns and obviate the need for a
quiet period that inhibits the flow of information to the marketplace.
NASD has observed, for example, that negative information about a
subject company is sometimes released by that company during the quiet
periods, but the quiet periods prevent some members from providing
analysis of this negative information to investors in a timely fashion.
NASD believes that elimination of the quiet periods around lock-ups
will permit such information to flow to investors without sacrificing
the overall objectivity of the research.\36\
---------------------------------------------------------------------------

    \36\ NASD believes that practical limitations inhibit effective
administration of the provision. Most notably, NASD rules do not
require lock-up agreements, and NASD often has no jurisdiction over
parties to them, including the subject company and its non-member
shareholders. NASD therefore cannot always be the arbiter of whether
certain facts constitute, for example, a waiver or termination of a
lock-up--a significant impediment to our ability to enforce this
provision.
---------------------------------------------------------------------------

    NASD Rule 2711(f) would continue to require a reasonable basis for
any recommendation or price target and the valuation method used to
determine a price target, while SEC Regulation AC requires
certification that any such recommendation or price target is genuinely
held. Accordingly, NASD believes that an effective alternative to the
quiet periods would be to require that members provide an additional
certification, similar to Regulation AC, to having a bona fide reason
for issuing research within 15 days before and after a lock-up
expiration and was not otherwise issued for any reason pertaining to
conditioning the market price of the security that was the subject of
the research report. NASD would set forth the language of the
certification in a Notice to Members upon approval of the proposed rule
change.
    In the Joint Report, NYSE recommends an alternative proposal to
reduce the duration of the quiet periods and expand the exception for
research concerning the effects of significant news or a significant
event on the subject company to include earnings related announcements.
NASD believes its proposal is a more viable means to ensure timely
information flow to investors than such an alternative approach. As the
SROs have previously noted in their March 2004 joint interpretive
memorandum, earnings announcements do not generally fall within the
exception because ``an earnings announcement itself generally is not a
causal event or news item that materially affects a company's
operations, earnings or financial condition.'' NASD believes that a
carve-out for earnings related announcements could lead to lock-up
expirations timed to coincide with such announcements--many of which
are scheduled regularly--thereby essentially negating the quiet period
altogether. NASD believes that this is problematic because the
significant news exception applies not only to quiet periods around
lock-up expirations, but also to the quiet periods after an IPO and the
blackout

periods during which analysts are prohibited from trading in securities
they cover.

Restrictions on Personal Trading by Research Analysts

    NASD Rule 2711(g) generally restricts the trading of securities by
``research analyst accounts.'' \37\ Specifically, the rule prohibits
any research analyst account from:
---------------------------------------------------------------------------

    \37\ NASD Rule 2711(a)(7) defines the term ``research analyst
account'' to include any account in which a research analyst or
member of the analyst's household has a financial interest, or over
which the analyst has discretion or control, other than an
investment company registered under the Investment Company Act of
1940. The proposed rule change would clarify that this definition is
intended to except from the definition those registered investment
companies that are managed by a research analyst or member of the
research analyst's household, provided that the research analyst or
household member has no financial interest in such investment other
than a performance or management fee. See infra page 46. The term
does not include a ``blind trust'' account that is controlled by a
person other than the research analyst or household member and
neither the analyst nor any household member knows of the account's
investments or investment transactions.
---------------------------------------------------------------------------

     Purchasing or receiving any securities before the issuer's
initial public offering if the issuer is principally engaged in the
same types of business as companies that the research analyst follows;
     Purchasing or selling any security issued by a company
that the research analyst follows, or any option or derivative of such
a security, for a period beginning 30 days before and ending five days
after the publication of a research report concerning the company or a
change in a rating or price target of the company's securities; and
     Purchasing or selling any security or option or derivative
of such a security in a manner inconsistent with the analyst's most
recent recommendation.
    NASD Rule 2711(g) includes certain limited exceptions to these
trading restrictions.
    The proposal would make two principal changes to the personal
trading restrictions. First, the proposed rule changes would revise the
exceptions to the personal trading restrictions for investment funds in
paragraph (g)(5). Under the proposed rule changes, the personal trading
restrictions would not apply to investments in any fund (including a
registered diversified investment company), so long as neither the
analyst nor a member of his or her household is aware of the fund's
holdings or transactions other than through periodic shareholder
reports and sales material based on such reports, and provided that the
research analyst account owns no more than 1% of the assets of the
fund.
    NASD believes that this change would simplify the ability of
analysts to invest in, for example, mutual funds and hedge funds that
do not disclose their holdings other than through periodic reports or
sales material based on such reports. According to NASD, absent
discretion or control of an account or the contemporaneous knowledge of
the account's transactions, a minimal investment by a research analyst
will not influence the analyst to compromise research objectivity to
benefit the account. NASD understands that NYSE is proposing to retain
the 20% asset diversification threshold to be eligible for the
exception. NASD seeks comment on whether to maintain that separate
requirement.
    Second, the proposed rule changes would create an exemption for
firms that voluntarily choose to prohibit their analysts from owning
shares of the companies they cover. The exemption would provide a means
for analysts at such firms to divest their holdings without violating
the blackout period and trading against recommendation prohibitions.
    The exemption would allow such a firm to adopt policies that permit
research analysts to divest their holdings in an orderly and controlled
way with the oversight of the firm's legal and compliance personnel.
The SROs permitted firms to allow their analysts to divest their
holdings in the same manner when the rule first became effective by
delaying for a certain time period implementation of the personal
trading restrictions for firms that wished to ban ownership. With the
recommended change, NASD Rule 2711(g) would allow firms that adopt
ownership bans to implement the same divestiture procedures regardless
of when they adopted such a policy.

Disclosure Requirements

    NASD Rule 2711(h) imposes a number of disclosure requirements on
member research reports and research analyst public appearances in
which the analyst makes a recommendation or offers an opinion
concerning an equity security. NASD Rule 2711(h) requires specific
disclosures of conflicts of interest, including where the member firm,
the research analyst or a member of the analyst's household has a
financial interest in the subject company's securities or the member or
its affiliates have received compensation from the subject company.
NASD Rule 2711(h) also requires a number of other disclosures in
research reports that are not directly related to conflicts of interest
with the subject company, including the meanings of ratings used in the
member's rating system, the distribution of buy, hold, and sell ratings
assigned by the member, and a price chart that plots the assignment or
changes of the analyst's ratings and price targets for the subject
company against the movement of the subject company's stock price over
time. The required disclosures must be presented on the front page of
research reports or the front page must refer to the page on which the
disclosures are found. Electronic research reports may utilize
hyperlinks to the disclosures. Disclosures and references to
disclosures must be clear, comprehensive and prominent.
    According to NASD, these required disclosures promote transparency
and provide important information to enable investors to assess the
value of the research in making their investment decision. However,
NASD believes that it would be equally effective and useful for
investors to know immediately whether the member firm or research
analyst producing the research report is conflicted, while providing
the reader the means to learn more about these conflicts if he or she
chooses to do so.
    To that end, the proposed rule changes would amend the rules to
permit members, in lieu of publication in the research report itself,
to disclose their conflicts of interest by including a prominent
warning on the cover of a research report that such conflicts of
interest exist, together with information on how the reader may obtain
more detail about these conflicts on the member's Web site. This
alternative method of disclosure would then require a member to include
detailed conflicts information on its Web site. Members could still opt
to make all of the disclosures in the report itself; however, NASD
believes that a Web-based disclosure system would be at least as
effective and would minimize costs for many firms.
    Specifically, the proposed rule changes would require any member
that has a conflict of interest or whose research analyst has a
conflict of interest to state prominently on the front page of the
research report the following:

    [Name of firm and/or the research analyst preparing this report]
has a conflict of interest that may affect the ability of the firm
or the analyst to provide objective analysis about the company. For
more information about this conflict of interest, please see
[Reference to the firm's Web site].

    The proposed rule changes would define ``conflict of interest'' to
include any of the circumstances that currently require disclosure
under NASD Rule

2711(h), including if the research analyst or member of the research
analyst's household has a financial interest in the subject company; if
the member owns 1% or more of any class of common equity securities of
the subject company; receipt by the member of investment banking and
other compensation from the subject company or the intention to seek
investment banking compensation; if the member makes a market in the
subject company's securities; if the research analyst or a member of
the research analyst's household serves as an officer, director or
advisory board member of the subject company; and any other actual,
material conflict of interest of the research analyst or member of
which the research analyst knows or has reason to know at the time of
publication of the research report.
    The proposed amendment would still require that Web-based
disclosure concern actual conflicts of interest, rather than the
possibility of such conflicts. A general ``health warning'' that
conflicts of interest ``may or may not'' exist are neither useful nor
effective.
    NASD specifically seeks comment on whether a similar approach could
be used for disclosure of conflicts in public appearances.
    The proposed rule changes would not permit Web site disclosure for
certain other disclosures, such as the meanings of the member's ratings
and the price chart showing the subject company's price movements
against the analyst's assignments of ratings and price targets. NASD
believes that those disclosures do not lend themselves easily to the
terse material conflict warning that would appear on the cover of the
report. Accordingly, NASD believes that they should be readily
available to investors in the report itself.

Prohibition on Retaliation Against Research Analysts

    NASD Rule 2711(j) currently prohibits any member and any employee
of a member who is involved with the member's investment banking
activities from directly or indirectly retaliating against a research
analyst as a result of an unfavorable research report or public
appearance that may adversely affect the member's current or
prospective investment banking relationship with a subject company.
    Under no circumstances is retaliation appropriate against a
research analyst who expresses his or her truly held beliefs about a
subject company. As such, the proposed rule changes would amend this
provision to extend the retaliation prohibition to all employees, not
just those involved in investment banking activities.

Other Changes

    The proposed rule changes also would make certain other changes.
First, the proposed rule change would amend the definition of
``research analyst account'' in NASD Rule 2711(a)(7) to clarify that it
excludes an investment company registered under the Investment Company
Act of 1940 over which the research analyst or household member has
discretion or control, provided that the research analyst or household
member has no financial interest in such investment company, other than
a performance or management fee.
    Second, the proposed rule changes would amend NASD Rule
2711(c)(5)(B) to extend the prohibition on research analysts from
engaging in communications about an investment banking services
transaction with a current or prospective customer in the presence of
investment banking department personnel or company management to also
apply to communications with internal sales personnel. NASD believes
such change would make the provision consistent with respect to a
research analyst's ability to educate investors and sales personnel
about an investment banking services transaction.
    Finally, the proposed rule changes would clarify that the annual
attestation required by NASD Rule 2711(i) must be filed with NASD's
Member Regulation Department. NASD notes that the Member Regulation
Department has developed a form, available on the NASD Web site, that
may be used to make the attestation electronically.
    NASD will announce the effective date of the proposed rule changes
in a Notice to Members to be published no later than 60 days following
Commission approval.
4. NASD's Statutory Basis
    NASD believes that the proposed rule changes are consistent with
the provisions of Section 15A(b)(6) of the Act,\38\ which requires,
among other things, that NASD rules be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. NASD believes that the proposed rule changes are
consistent with the provisions of the Act because it promotes both
objective research and increased information flow to investors and does
so in an efficient and effective manner.
---------------------------------------------------------------------------

    \38\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

B. Self-Regulatory Organizations' Statements on Burden on Competition

    The NYSE and NASD do not believe that the proposed rule changes
will result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organizations' Statements on Comments on the
Proposed Rule Changes Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule changes, or
    (B) Institute proceedings to determine whether the proposed rule
changes should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
changes are consistent with the Act and whether there are any
differences between the NYSE and NASD proposals that present compliance
or interpretive issues.
    We solicit comment as to how the proposals to relocate disclosures
to a member firm's Web site would affect the utility of this
information to investors. Please also provide comment on whether
relocating disclosures to a member firm's Web site would provide a
substantial cost benefit to firms.
    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Numbers SR-NYSE-2006-78 and/or SR-NASD-2006-113 on the subject
line.

Paper Comments

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

All submissions should refer to File Numbers SR-NYSE-2006-78 and/or SR-
NASD-2006-113. The file numbers should be included on the subject line
if e-mail is used. To help the Commission process and review your
comments more efficiently, please use only one method. The Commission
will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent

amendments, all written statements with respect to the proposed rule
changes that are filed with the Commission, and all written
communications relating to the proposed rule changes between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for inspection and copying in the Commission's Public
Reference Room. Copies of such filings also will be available for
inspection and copying at the principal office of the NYSE and NASD.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Numbers SR-NYSE-2006-78
and/or SR-NASD-2006-113 and should be submitted on or before March 5,
2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\39\
---------------------------------------------------------------------------

    \39\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-548 Filed 1-16-07; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 31 (Wednesday, February 15, 2012)]
[Notices]
[Pages 8938-8942]
[FR Doc No: 2012-3471]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66364; File No. SR-FINRA-2011-064]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Amendment No. 2 and Order Granting
Accelerated Approval of a Proposed Rule Change, as Modified by
Amendment No. 2, Adopting FINRA Rule 4524 (Supplemental FOCUS
Information) and Proposed Supplementary Schedule to the Statement of
Income (Loss) Page of FOCUS Reports

February 9, 2012.

I. Introduction

    On November 1, 2011, the Financial Industry Regulatory Authority,
Inc. (``FINRA'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ proposed FINRA Rule 4524 (Supplemental FOCUS
Information) to require each member, as FINRA shall designate, to file
such additional financial or operational schedules or reports as FINRA
may deem necessary as a supplement to the FOCUS report. The proposed
rule change was published for comment in the Federal Register on
November 14, 2011.\3\ The Commission received five comments on the
proposed rule change.\4\ FINRA filed Amendment No. 1 on February 8,
2012, which was subsequently withdrawn.\5\ FINRA filed Amendment No. 2
to the proposed rule change on February 8, 2012.\6\ The Commission is
publishing this notice and order to solicit comments on Amendment No. 2
and to approve the proposed rule change, as modified by Amendment No.
2, on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 65700 (November 7,
2011), 76 FR 70523 (November 14, 2011).
    \4\ See Letter from Pat Nelson, dated November 30, 2011
(``Nelson''); George Hessler, Stock USA Execution Services, Inc., to
Marcia Asquith, Secretary, FINRA, dated November 25, 2011 (``Stock
USA''); Holly H. Smith and Susan S. Krawczyk, Sutherland Asbill &
Brennan LLP, for the Committee of Annuity Insurers, to Elizabeth M.
Murphy, Secretary, SEC, dated December 5, 2011 (``CAI''); Howard
Spindel and Cassondra E. Joseph, Integrated Management Solutions USA
LLC, dated December 5, 2011 (``IMS letter''); Nancy Brda to
Elizabeth M. Murphy, Newedge USA, LLC, dated December 5, 2011
(``Newedge'') (Available at http://www.sec.gov/comments/sr-finra-2011-064/finra2011064.shtml).
    \5\ Amendment No. 1, dated February 8, 2012, was withdrawn on
February 8, 2012.
    \6\ See Amendment No. 2 dated February 8, 2012 (``Amendment No.
2''). The text of Amendment No. 2 is available on FINRA's Web site
at http:www.finra.org, at the principal office of FINRA, and on the
Commission's Web site, http://www.sec.gov/rules/sro.shtml.
---------------------------------------------------------------------------

II. Description of Proposed Rule Change

    Pursuant to Exchange Act Rule 17a-5, FINRA members are required to
file with FINRA reports concerning their financial and operational
status using SEC Form X-17A-5, Financial and Operational Combined
Uniform Single (FOCUS) Report.\7\ FINRA is proposing to adopt FINRA
Rule 4524, which provides that as a supplement to filing FOCUS reports
pursuant to Exchange Act Rule 17a-5 and FINRA Rule 2010, each member,
as FINRA shall designate, shall file such additional financial or
operational schedules or reports as FINRA may deem necessary or
appropriate for the protection of investors or in the public interest.
FINRA Rule 4524 also provides that FINRA will specify the content of
such additional schedules or reports, their format, and the timing and
the frequency of such supplemental filings in a Regulatory Notice (or
similar communication) issued pursuant to the Rule. Finally, FINRA Rule
4524 provides that FINRA will file with the Commission pursuant to
Exchange Act Section 19(b) the content of any such Regulatory Notice
(or similar communication) issued pursuant to the Rule.
---------------------------------------------------------------------------

    \7\ 17 CFR 240.17a-5.
---------------------------------------------------------------------------

    Pursuant to proposed FINRA Rule 4524, FINRA is proposing a
Supplemental Statement of Income (``SSOI'') to magnify the data from
the Statement of Income (Loss) page of the FOCUS Reports. The proposed
SSOI is intended to capture more granular detail of a firm's revenue
and expense information. The lack of more specific revenue and expense
categories for certain business activities on the Statement of Income
(Loss) page of the FOCUS Reports has led many firms to report much of
their revenue and expenses as ``other'' (miscellaneous), a very general
categorization that provides FINRA limited visibility into revenue and
expense trends. The proposed SSOI is divided into sections containing
line items that seek additional detail to permit FINRA to better
understand revenue sources and expense composition on an ongoing basis.
This additional detail would allow FINRA to better assess risk at a
firm, and as a result, better allocate examination resources. As
modified by Amendment No. 2, each member would be required

to file with FINRA the proposed SSOI within 20 business days of the end
of each calendar quarter.
    The proposed SSOI contains a de minimis exception for providing
details of revenue and expenses for certain designated sections. If a
member's total dollar amount for a designated section is $5,000 or less
for the reporting period, the member would only be required to enter
the total dollar amount to complete the section. As modified by
Amendment No. 2, the reporting threshold has been amended to include as
a component to the de minimis exception for certain designated sections
a percentage of gross revenue threshold. Additionally, not every line
item would apply to every member, especially those with limited product
offerings, thus limiting the burden of completing the form.
    The proposed SSOI includes a new Operational Page that would
collect additional information from certain members with respect to
participation in unregistered offerings during the reporting period.
Members whose revenue from unregistered offerings exceeds 10% of total
revenue for the reporting period would be required to complete the
Operational Page by providing specific information about each
unregistered offering. FINRA believes that such information would
provide it with greater transparency and a stronger understanding
regarding the types of unregistered offerings that generate significant
revenue for members.
    FINRA will announce the implementation dates of the proposed SSOI
in a Regulatory Notice to be published no later than 60 days following
Commission approval of the proposed rule change. The implementation
date of the proposed schedule will be no sooner than 180 days, and no
later than 365 days, following Commission approval of the proposed rule
change.

III. Summary of Comment Letters

    The proposed rule change was published for comment in the Federal
Register on November 14, 2011, and the comment period closed on
December 5, 2011. The Commission received five comment letters in
response to the proposed rule change.\8\ On February 8, 2012, FINRA
responded to the comments and filed Amendment No. 2 to the proposed
rule change.\9\
---------------------------------------------------------------------------

    \8\ See supra note 4.
    \9\ See supra note 5. On December 21, 2011, FINRA extended the
time period for Commission action until February 10, 2012. See
http://www.finra.org/web/groups/industry/@ip/<EMAIL_ADDRESS>---------------------------------------------------------------------------

A. Reporting Threshold

    Several commenters expressed concerns that the reporting threshold
was too low and should be raised.\10\ One commenter suggested moving to
a range that would allow a large firm with significant revenues to have
a de minimis exception in the range of $250,000-$500,000.\11\ Two
commenters thought the $5,000 threshold was too low and suggested a
reporting threshold of $10,000 or of 5% or 10% of gross revenue (i.e.,
firms would not be required to report any information on product lines
that represented less than 5% or 10% of their gross revenue).\12\ One
commenter suggested a de minimis exception for items less than
$25,000.\13\ This commenter also expressed concerns that the proposal
was anti-small business, because it required the same level of detail
for every broker-dealer.\14\
---------------------------------------------------------------------------

    \10\ CAI; Newedge; IMS; Stock USA.
    \11\ CAI.
    \12\ Newedge; IMS.
    \13\ Stock USA.
    \14\ Id.
---------------------------------------------------------------------------

    In its response to comments, FINRA stated that Amendment No. 2
amends the SSOI and the instructions to include as a component of the
de minimis exception for certain designated sections a percentage of
the gross revenue threshold.\15\ FINRA explained that if the aggregate
amount for the designated section is less than the greater of $5,000 or
5% of the firm's total revenue or total expense, as applicable, for a
reporting period, the member would only be required to enter the
aggregate amount to complete the section. FINRA also stated that it
added a de minimis exception for the revenue from sale of insurance
based products section on the SSOI. Finally, FINRA stated that it had
clarified language on the SSOI and the instructions regarding the
reporting thresholds for other expenses and other revenue.
---------------------------------------------------------------------------

    \15\ See Letter from Matthew E. Vitek, Counsel, FINRA, to
Elizabeth M. Murphy, Secretary, Commission dated February 8, 2012
(``Response to Comments'').
---------------------------------------------------------------------------

B. Filing Time Frame

    One commenter suggested that firms needed additional time to file
the SSOI.\16\ Since the FOCUS filings are due on the 17th business day
of the month, the commenter suggested an additional 3-5 days to submit
the Supplemental Filing after the FOCUS report would be helpful.\17\ In
its Response to Comments FINRA stated that it recognizes that the new
report will involve an additional amount of work for members and
believes that it is reasonable to give members an additional three
business days to file the SSOI. FINRA, therefore, amended its proposal
to require the SSOI to be filed within 20 business days after the end
of the calendar quarter.\18\
---------------------------------------------------------------------------

    \16\ Newedge.
    \17\ Id.
    \18\ Response to Comments.
---------------------------------------------------------------------------

C. Instructions and Definitions

    One commenter believes that FINRA should provide more precise
definitions for certain product lines on the SSOI, in order to avoid
duplicative or inconsistent reporting.\19\ This commenter also stated
that FINRA should define more precisely the product lines listed on the
SSOI.\20\ Another commenter believes that the instructions could be
construed as misleading, because of the choices available for a firm to
use ``firm selected methodology'' (i.e., firm discretion).\21\
---------------------------------------------------------------------------

    \19\ Newedge.
    \20\ Id.
    \21\ IMS.
---------------------------------------------------------------------------

    In its Response to Comments, FINRA stated that for certain revenue
items, where specific and/or detailed instructions are not provided on
the SSOI, FINRA expects firms to report the revenue in accordance with
the definition and/or methodology used for preparing the FOCUS report.
FINRA further stated that it believed the instructions to the SSOI
contained sufficient clarity for certain definitions, such as
``commodities,'' ``corporate debt,'' ``US Government and Agency
Securities,'' and ``asset backed securities;'' however, FINRA clarified
the instructions with respect to the term ``foreign exchange.'' FINRA
also added instructions regarding non-securities insurance based
products. Finally, FINRA stated that the term ``derivatives other than
listed or unlisted options'' does not appear in the proposed SSOI.\22\
---------------------------------------------------------------------------

    \22\ Response to Comments.
---------------------------------------------------------------------------

D. Small Firm Concerns

    One commenter believes that FINRA should make available a less
detailed SSOI to small broker-dealers.\23\ Another commenter was
concerned that the new categories of product lines will be difficult to
complete and that firms may make mistakes when completing the report,
leading to fines levied for late or incorrect submissions.\24\
---------------------------------------------------------------------------

    \23\ IMS.
    \24\ Stock USA.
---------------------------------------------------------------------------

    In its Response to Comments, FINRA stated that it believed the
information being required in the SSOI is important to identify
regulatory risks and trends, irrespective of firm size. FINRA also
explained that many of the line items will not apply to smaller firms
with limited product offerings. Further,

FINRA reiterated that it was modifying the SSOI to broaden the de
minimis exception, making the form much less complicated and time
consuming for smaller firms, and that the form should not require
sophisticated systems to generate the information.\25\
---------------------------------------------------------------------------

    \25\ Response to Comments.
---------------------------------------------------------------------------

E. Reporting Exemption

    One commenter believes that firms that ``do not engage in risky
business lines, and who provide financial information that is already
transparent'' should be exempted from completing the SSOI.\26\ As an
example, the commenter suggested that mutual fund wholesalers and
variable annuity principal underwriters and wholesalers that are
limited purpose broker-dealers are categories of firms that should be
exempted.\27\ One commenter also discussed the role the supplemental
filing would play with respect to a broker-dealer's annual audit.\28\
---------------------------------------------------------------------------

    \26\ CAI.
    \27\ Id.
    \28\ Id.
---------------------------------------------------------------------------

    In its Response to Comments, FINRA stated that it does not agree
that firms such as variable annuity principal underwriters and
wholesalers should be exempt. FINRA believes the required information
is important to identify revenue sources, enable FINRA to segment
firms, and identify regulatory risk and trends without regard to the
business model of the member or whether a particular business segment
or product line has raised recent regulatory concerns.\29\ FINRA also
noted that revenue streams of variable annuity principal underwriters
and wholesalers are not transparent from the FOCUS report as it
currently exists.\30\ Finally, FINRA noted that many of the line items
will not apply to firms with limited product offerings, such as mutual
fund wholesalers and variable annuity principal underwriters and
wholesalers.\31\
---------------------------------------------------------------------------

    \29\ Response to Comments.
    \30\ Id.
    \31\ Id.
---------------------------------------------------------------------------

F. Exemption From Operational Page Reporting

    One commenter, CAI, suggested that there was an inconsistency
between the proposed Operational Page and FINRA offering rules,
specifically FINRA Rule 5110.\32\ CAI notes that FINRA Rule 5110
exempts ten types of offerings from the rule, including offerings of
open and closed-end investment companies, offerings of variable
annuities, and offerings of modified guaranteed annuity contracts and
modified guaranteed life insurance policies.\33\ CAI suggested that
there is an inconsistency between the proposed Operational Page and
certain FINRA offering rules, stating, ``that offerings that are
exempted from FINRA offering rules should not be subject to the
Operational Page.'' \34\
---------------------------------------------------------------------------

    \32\ CAI.
    \33\ Id.
    \34\ Id.
---------------------------------------------------------------------------

    In response to these concerns, FINRA explained its view that the
commenter did not recognize the different purposes the Operational Page
serves from FINRA Rule 5110. The Operational Page of the SSOI is
intended to provide FINRA with greater transparency as to the source of
the revenues associated with unregistered offerings when such revenues
are a material percentage of a firm's overall revenues. FINRA Rule 5110
regulates the underwriting terms and arrangements of most public
offerings of securities sold through FINRA members. While not subject
to FINRA Rule 5110, information about the exempted offerings identified
by this commenter would provide FINRA with a better understanding
regarding the types of unregistered offerings that generate significant
revenue for members. In this regard, FINRA notes that it has found
significant problems in several recent examinations and investigations,
including fraud and sales practice abuses in Regulation D
offerings.\35\ FINRA further noted that the SSOI would not be a report
that is required to be audited under Exchange Act Rule 17a-5.
---------------------------------------------------------------------------

    \35\ Response to Comments (citing FINRA Regulatory Notice 10-22
(April 2010) in regard to Regulation D offerings and FINRA press
release regarding sanction of eight firms and ten individuals for
selling interests in troubled private placements).
---------------------------------------------------------------------------

G. Reporting Issues

    One commenter stated that FINRA should give more consideration to
member practices and procedures with respect to their books and
records.\36\ This commenter stated that firms organize ``revenue data
based on internal definitions of business lines and to comply with
generally accepted accounting principles (``GAAP''). These internal
categories allocate income based on how member firms view the nature
and scope of their business lines.'' \37\ The commenter believes,
therefore, that FINRA's proposed schedule, which requires reporting by
product lines, contradicts GAAP rules and procedures. The commenter
also believes that, ``FINRA is artificially forcing firms to
differentiate income generated by investments from that of trading by
requiring that revenue be reported by how the income might be taxed.''
\38\ Further, this commenter noted that FINRA's stated purpose of
obtaining more granular information is not achieved, because the
proposal allows for a dozen separate categories for trading income data
but only one line for capital gains or losses related to longer-term
investments.\39\
---------------------------------------------------------------------------

    \36\ IMS.
    \37\ Id.
    \38\ Id.
    \39\ Id.
---------------------------------------------------------------------------

    In its Response to Comments, FINRA disagreed that the proposal is
at odds with member practices. FINRA stated that the SSOI is similar to
the FOCUS Report in that it requires members to break-out revenues
based on product line and distinguishes between trading and investment
gains. FINRA also stated that requesting information to be reported by
product line is not inconsistent with GAAP. Further, the instructions
to the SSOI require that all revenue and expense items must be reported
in accordance with GAAP. With respect to breaking out trading revenue
data compared to investment capital gains or losses, FINRA believes
that more granular detail for trading revenue is warranted because the
regulatory risks associated with trading activities differ from the
regulatory risks associated with longer-term investment activities.

H. Alternatives

    Two commenters suggested alternatives to the SSOI. One commenter
asked if FINRA had researched and considered other alternatives to
obtain the same information on the SSOI in another manner.\40\ Another
commenter suggested that FINRA establish a joint task force to consider
producing a revised FOCUS report.\41\
---------------------------------------------------------------------------

    \40\ Nelson.
    \41\ IMS.
---------------------------------------------------------------------------

    In response to these objections to the SSOI, FINRA reiterated its
previous statement that it considered various alternatives and believes
that the SSOI is the most effective and timely way to obtain the
additional detail of revenues earned or expenses incurred by product or
more specific categories. Further, FINRA notes that it consulted with
its advisory committees in connection with the development of the
proposed SSOI.

I. Future Reports or Schedules

    Several commenters expressed concerns about the implementation of
future FINRA reports or schedules.\42\ These commenters thought that

publication via a Regulatory Notice was insufficient and suggested that
any future schedules or reports be done through the more typical self-
regulatory organization (``SRO'') proposed rule change process.\43\ In
its Response to Comments FINRA stated that it has modified the proposed
rule change to clarify that all future reports or schedules will be
filed with the Commission pursuant to Exchange Act Section 19(b).\44\
Thus, commenters will be assured of having an opportunity to comment on
any request for such additional substantive information made pursuant
to the proposed rule, which must be approved by the Commission before
it can become effective.
---------------------------------------------------------------------------

    \42\ CAI; Nelson; Stock USA.
    \43\ Stock USA; Nelson; CAI.
    \44\ Response to Comments.
---------------------------------------------------------------------------

J. Implementation Date

    One commenter suggested an alternative compliance effective date of
no sooner than 365 days following the Commission's approval of the
proposed rule change because members not already collecting this
information will require much more time than larger firms to implement
the operational and system changes the SSOI necessitates.\45\ The
commenter noted that many of its members are ``mid-sized firms that
will not have the granular, detailed financial information required by
the SSOI at their fingertips.'' \46\
---------------------------------------------------------------------------

    \45\ CAI.
    \46\ Id.
---------------------------------------------------------------------------

    In its Response to Comments, FINRA stated that it disagrees with
the commenter and believes that the proposed implementation date, which
would be no sooner than 180 days and no later than 365 days following
SEC approval, strikes the proper balance of ensuring FINRA receives
timely information while giving members sufficient time to file the
first proposed SSOI.

K. SRO Rulemaking

    Several commenters were concerned that FINRA did not conduct a
cost-benefit analysis in its rule proposal. Specifically, one commenter
stated that FINRA should conduct a more rigorous and detailed cost-
benefit analysis that the industry can use to consider alternatives to
the rule proposal.\47\ Other commenters were concerned about the
overall lack of a detailed cost-benefit analysis by both the Commission
and FINRA.\48\ Stock USA believes that a better justification is
needed, to show ``how the proposed rule will be used to enhance its
meeting of both the economic and protective provisions of Section
15A(b)(6) of the Exchange Act.'' \49\
---------------------------------------------------------------------------

    \47\ Id.
    \48\ Newedge; Nelson.
    \49\ Stock USA.
---------------------------------------------------------------------------

    In its Response to Comments, FINRA noted that it believed it had
complied with its rulemaking obligations under the Exchange Act, by
submitting a ``concise general statement of the basis and purpose'' of
its proposed rule. FINRA believes its proposed rule will ``further
strengthen FINRA's ability to protect investors through a more informed
understanding of the drivers of members' business that can be used for
more targeted examinations and to understand trends in those drivers
that may portend greater risk to the firm and the protection of
customer assets.'' \50\ FINRA also noted that the burden arising from
completing the SSOI is outweighed by FINRA's enhanced ability to
protect investors by having a more detailed understanding of members'
sources of revenue and expense drivers.\51\
---------------------------------------------------------------------------

    \50\ Response to Comments.
    \51\ Id.
---------------------------------------------------------------------------

L. Comment Period

    One commenter noted that the twenty-one day comment period did not
allow firms sufficient time to properly estimate the costs associated
with the operational and systems changes needed to complete the
SSOI.\52\ In its Response to Comments, FINRA noted that the length of a
comment period is determined by the SEC and therefore outside the scope
of its response.\53\
---------------------------------------------------------------------------

    \52\ CAI.
    \53\ Response to Comments.
---------------------------------------------------------------------------

M. FINRA's Authority

    One commenter questioned FINRA's authority to adopt a supplement to
the FOCUS report and stated that no one has addressed the role such a
supplement would play with respect to a broker-dealer's annual
audits.\54\ In response, FINRA stated that as a general matter the
proposed rule is consistent with Section 15A(b)(6) of the Exchange Act
and is ``designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade,'' and,
``in general, to protect investors and the public interest.'' \55\
FINRA further stated that with respect to the role the SSOI would play
with respect to a broker-dealer's annual audits, the SSOI is not one of
the reports required to be audited under Exchange Act Rule 17a-5 and
that FINRA does not expect or require the SSOI to be audited unless the
auditor believes there is a concern for such review.\56\
---------------------------------------------------------------------------

    \54\ CAI.
    \55\ Response to Comments.
    \56\ Id.
---------------------------------------------------------------------------

IV. Commission's Findings

    The Commission has carefully considered the proposed rule change,
the comments received, Amendment No. 2, and FINRA's Response to
Comments. The Commission finds that the proposed rule change is
consistent with the requirements of the Exchange Act, and the rules and
regulations thereunder that are applicable to a national securities
association.\57\ In particular, the Commission finds that the proposal
is consistent with Section 15A(b)(6) of the Act,\58\ which requires,
among other things, that the rules of a national securities association
be designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general, protect investors and the public
interest.
---------------------------------------------------------------------------

    \57\ In approving this proposed rule change, the Commission
notes that it has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
    \58\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

    Proposed FINRA Rule 4524 and the SSOI will provide FINRA with the
ability to obtain more specific information about the finances of a
member broker-dealer. The Commission believes that the proposed rule
change works in conjunction with the existing Commission broker-dealer
financial responsibility rules and will further FINRA's ability to
oversee its members by, among other things, increasing the transparency
of the various revenue streams and sources of income of broker-dealers.
For example, FINRA noted in its Response to Comments that FINRA has
found significant problems in several recent examinations and
investigations, including fraud and sales practice abuses in Regulation
D offerings.\59\ The Commission believes the proposed rule change will
give FINRA greater ability to examine the revenues of its members and
therefore improve its ability to, among other things, uncover
fraudulent and abusive practices that undermine public confidence in
the securities markets and thus impede efficiency and capital
formation.
---------------------------------------------------------------------------

    \59\ See Response to Comments.
---------------------------------------------------------------------------

    With respect to commenter concerns that the proposed rule change
would give FINRA the ability to circumvent filing proposed rule changes
with the Commission and thus avoid the notice and comment process
attendant thereto,

FINRA has clarified the proposed rule change in Amendment No. 2 to make
clear that any such new reports or schedules will be filed with the
Commission pursuant to Exchange Act Section 19(b).\60\ Accordingly, the
proposed rule change is clear that interested parties will have
opportunity to have notice of, and comment upon, future schedules or
reports issued by FINRA under FINRA Rule 4524.
---------------------------------------------------------------------------

    \60\ The Commission notes that such reports or schedules, or
changes to any existing reports or schedules, fall within the
definition of ``rules of an association'' under Exchange Act Section
3(a)(27), subject to the self-regulatory organization rulemaking
provisions set forth in Exchange Act Section 19(b) and Rule 19b-4
thereunder.
---------------------------------------------------------------------------

    The Commission believes that FINRA carefully considered all
comments on the proposal and has responded appropriately. FINRA's
Amendment No. 2 changed the proposed rule change in response to
commenter concerns to provide broker-dealers with additional time to
file the SSOI and to include an additional component to the de minimis
exception based on a percentage of gross revenue threshold. FINRA has
suitably explained its reasons for declining to amend Rule 4524 and the
SSOI in response to the remainder of comments it received.

V. Accelerated Approval

    The Commission finds goods cause, pursuant to Section 19(b)(2) of
the Act \61\ for approving the proposed rule change, as modified by
Amendment No. 2 thereto, prior to the 30th day after publication of
Amendment No. 2 in the Federal Register. The changes proposed in
Amendment No. 2 respond to specific concerns raised by the commenters
and do not raise regulatory concerns.
---------------------------------------------------------------------------

    \61\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    Accordingly, the Commission finds that good cause exists to approve
the proposal, as modified by Amendment No. 2, on an accelerated basis.

VI. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether Amendment No. 2
to 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-FINRA-2011-064 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090. All submissions should refer to File Number
SR-FINRA-2011-064. 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 Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent
amendments, all written statements with respect to the proposed rule
change that are filed with the Commission, and all written
communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for Web site viewing and printing in the Commission's Public
Reference Room, 100 F Street NE., Washington, DC 20549, on official
business days between the hours of 10 a.m. and 3 p.m. Copies of such
filing also will be available for inspection and copying at the
principal office of FINRA. All comments received will be posted without
change; the Commission does not edit personal identifying information
from submissions. You should submit only information that you wish to
make available publicly. All submissions should refer to File Number
SR-FINRA-2011-064 and should be submitted on or before March 7, 2012.

VII. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\62\ that the proposed rule change (SR-FINRA-2011-064), as modified
by Amendment No. 2, be, and hereby is, approved on an accelerated
basis.
---------------------------------------------------------------------------

    \62\ 15 U.S.C. 78(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\63\
---------------------------------------------------------------------------

    \63\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-3471 Filed 2-14-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: February 13, 2008 (Volume 73, Number 30)]
[Notices]
[Page 8396-8397]
[DOCID:fr13fe08-164]

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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

Petition for Waiver of Compliance

    In accordance with Part 211 of Title 49 Code of Federal Regulations
(CFR), notice is hereby given that the Federal Railroad Administration
(FRA) received a request for a waiver of compliance with certain
requirements of its safety standards. The individual petition is
described below, including the party seeking relief, the regulatory
provisions involved, the nature of the relief being requested, and the
petitioner's arguments in favor of relief.

The LB Railco

[Docket Number FRA-2007-28613]

    The LB Railco (LBRR), seeks a waiver of compliance from certain
provisions of Safety Glazing Standards, 49 CFR Part 223, that requires
certified glazing for two self-propelled switcher locomotives.
    LBRR has been operating for the past several years as an industrial
switcher for the Port of San Francisco. LBRR plans to expand its
operation from currently four (4) miles to seven (7) miles of track as
the primary shortline railroad operator for the Port of San Francisco
once a new bridge is completed. LBRR plans to continue to use the
Port's two historic ALCO S-2 switcher locomotives (LB 1 and LB 2) to
service their current two customers and any customers that may require
switching service at the Port in the future.
    LBRR operates at a maximum speed of 20 mph with an average speed of
5 mph. The two ALCO S-2 switcher locomotives both have their original
glass in the cabs, consisting of 13 separate windows in each cab. The
glazing in these windows do not conform to 49 CFR Part 223 Safety
Glazing Standards; however, the locomotives have been operating for the
past 62 years in and around the same area of San Francisco, in which
they currently operate and the glass has remained intact without
damage.
    LBRR requests a waiver from 49 CFR Part 223 requirements for these
two locomotives because the locomotives operate at very slow speeds in
a safe area. Both locomotives have historic significance and by
replacing the glazing would diminish the historic value with an
estimated cost of $15,000.00 to modify the glazing in each locomotive
which would be prohibitively expensive.
    Interested parties are invited to participate in these proceedings
by submitting written views, data, or comments. FRA does not anticipate
scheduling a public hearing in connection with these proceedings since
the facts do not appear to warrant a hearing. If any interested party
desires an opportunity for oral comment, they should notify FRA, in
writing, before the end of the comment period and specify the basis for
their request.
    All communications concerning these proceedings should identify the
appropriate docket number (e.g., Waiver Petition Docket Number FRA-
2007-28613) and may be submitted by any of the following methods:
     Web site: http://www.regulations.gov. Follow the online

instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: Docket Operations Facility, U.S. Department of
Transportation, 1200 New Jersey Avenue, SE., W12-140, Washington, DC
20590.

     Hand Delivery: 1200 New Jersey Avenue, SE., Room W12-140,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.
    Communications received within 45 days of the date of this notice
will be considered by FRA before final action is taken. Comments
received after that date will be considered as far as practicable. All
written communications concerning these proceedings are available for
examination during regular business hours (9 a.m.-5 p.m.) at the above
facility. All documents in the public docket are also available for
inspection and copying on the Internet at the docket facility's Web
site at http://www.regulations.gov.

    Anyone is able to search the electronic form of any written
communications and comments received into any of our dockets by the
name of the individual submitting the comment (or signing the comment,
if submitted on behalf of an association, business, labor union, etc.).
You may review DOT's complete Privacy Act Statement in the Federal
Register published on April 11, 2000 (Volume 65, Number 70; Pages
19477-78).

    Issued in Washington, DC on February 8, 2008.
Grady C. Cothen, Jr.,
Deputy Associate Administrator for Safety Standards and Program
Development.
[FR Doc. E8-2686 Filed 2-12-08; 8:45 am]

BILLING CODE 4910-06-P


[Federal Register: February 6, 2008 (Volume 73, Number 25)]
[Notices]
[Page 6961-6962]
[DOCID:fr06fe08-50]

=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-SFUND-2007-0888; FRL-8526-3]

Agency Information Collection Activities; Submission to OMB for
Review and Approval; Comment Request; Superfund Site Evaluation and
Hazard Ranking System (Renewal); EPA ICR No. 1488.07, OMB Control No.
2050-0095

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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

SUMMARY: In compliance with the Paperwork Reduction Act (PRA) (44
U.S.C. 3501 et seq.), this document announces that an Information
Collection Request (ICR) has been forwarded to the Office of Management
and Budget (OMB) for review and approval. This is a request to renew an
existing approved collection. The ICR, which is abstracted below,
describes the nature of the information collection and its estimated
burden and cost.

DATES: Additional comments may be submitted on or before March 7, 2008.

ADDRESSES: Submit your comments, referencing Docket ID No. EPA-HQ-
SFUND-2007-0888 to (1) EPA online using http://www.regulations.gov (our preferred method), by e-mail to<EMAIL_ADDRESS>or by mail

to: EPA Docket Center, Environmental Protection Agency, Superfund
Docket, Mail Code 2822T, 1200 Pennsylvania Ave., NW., Washington, DC
20460, and (2) OMB by mail to: Office of Information and Regulatory
Affairs, Office of Management and Budget (OMB), Attention: Desk Officer
for EPA, 725 17th Street, NW., Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Randy Hippen, Office of Superfund
Remediation and Technology Innovation, Mail Code 5204-P, Environmental
Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460;
telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; e-mail
address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: EPA has submitted the following ICR to OMB
for review and approval according to the procedures prescribed in 5 CFR
1320.12. On September 4, 2007 (72 FR 50679), EPA sought comments on
this ICR pursuant to 5 CFR 1320.8(d). EPA received no comments. Any
additional comments on this ICR should be submitted to EPA and OMB
within 30 days of this notice.
    EPA has established a public docket for this ICR under Docket ID
No. EPA-HQ-SFUND-2007-0888, which is available for online viewing at
http://www.regulations.gov, or in person viewing at the Superfund Docket in

the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution
Ave., NW., Washington, DC. The EPA/DC 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 Superfund Docket is<PHONE_NUMBER>.
    Use EPA's electronic docket and comment system at
http://www.regulations.gov, to submit or view public comments, access the

index listing of the contents of the docket, and to access those
documents in the docket that are available electronically. Once in the
system, select ``docket search,'' then key in the docket ID number
identified above. Please note that EPA's policy is that public
comments, whether submitted electronically or in paper, will be made
available for public viewing at http://www.regulations.gov as EPA receives

them and without change, unless the comment contains copyrighted
material, confidential business information (CBI), or other information
whose public disclosure is restricted by statute. For further
information about the electronic docket, go to http://www.regulations.gov.

    Title: Superfund Site Evaluation and Hazard Ranking System
(Renewal).
    ICR Numbers: EPA ICR No. 1488.07, OMB Control No. 2050-0095.
    ICR Status: This ICR is scheduled to expire on February 29, 2008.
Under OMB regulations, the Agency may continue to conduct or sponsor
the collection of information while this submission is pending at OMB.
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
in title 40 of the CFR, after appearing in the Federal Register when
approved, are listed in 40 CFR part 9, are displayed either by
publication in the Federal Register or by other appropriate means, such
as on the related collection instrument or form, if applicable. The
display of OMB control numbers in certain EPA regulations is
consolidated in 40 CFR part 9.
    Abstract: Section 105 of the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA, 1980 and 1986) amends the
National Oil and Hazardous Substances Pollution Contingency Plan (NCP)
to include criteria prioritizing releases throughout the U.S. before
undertaking remedial action at uncontrolled hazardous waste sites. The
Hazard Ranking System (HRS) is a model that is used to evaluate the
relative threats to human health and the environment posed by actual or
potential releases of hazardous substances, pollutants, and
contaminants. The HRS criteria take into account the population at
risk, the hazard potential of the substances, as well as the potential
for contamination of drinking water supplies, direct human contact,
destruction of sensitive ecosystems, damage to natural resources
affecting the human food chain, contamination of surface water used for
recreation or potable water consumption, and contamination of ambient
air.
    EPA Regional offices work with States and Tribes to determine those
sites for which the State or Tribe will conduct the Superfund site
evaluation activities and the HRS scoring. Under this ICR, State or
Tribal authorities will apply the HRS throughout a multi-phase site
evaluation process. Evaluation results are used to identify which sites
brought to the attention of the Superfund Program may warrant cleanup
work and to help determine whether a site is eligible to be included on
the National Priorities List (NPL). Only sites on the NPL are eligible
for Superfund-financed remedial actions. EPA reimburses the States and
Tribes 100 percent of their costs, except for record maintenance.
Responses to this collection are required to obtain or retain a
benefit.
    Burden Statement: The annual public reporting and recordkeeping
burden for this collection of information is estimated to average 226.9
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 which have subsequently changed; 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.
    Respondents/Affected Entities: States (including U.S. Territories)
and Tribes.

    Estimated Number of Respondents: 60.
    Frequency of Response: On occasion, averaging 11 responses per year
per respondent.
    Estimated Total Annual Hour Burden: 148,873.
    Estimated Total Annual Cost: $11,740,260, however all these costs
are reimbursed by the Federal Government through cooperative
agreements, resulting in no net cost to respondents for this ICR.
    Changes in the Estimates: There is a decrease of 1,412 hours in the
total estimated burden currently identified in the OMB Inventory of
Approved ICR Burdens. This decrease represents an adjustment to the
estimates and is primarily due to a decline in the estimated number of
assessment activities to be performed by respondents.

    Dated: January 30, 2008.
Sara Hisel-McCoy,
Director, Collection Strategies Division.
 [FR Doc. E8-2155 Filed 2-5-08; 8:45 am]

BILLING CODE 6560-50-P