people breathe”).  Such a limitation does not appear in the definition
of “regulated NSR pollutant.”  Furthermore, the language of that
definition in the current regulation demonstrates that EPA has already
taken a position on this issue that is contrary to one commenters
recommend.  Specifically the inclusion of ozone depleting substances
(ODS), which are regulated because of their global, not local, impacts,
as a specific category of pollutants that are regulated NSR pollutants
demonstrates EPA has previously rejected the local effects view.  Thus,
we believe that reading such a limitation into the fourth part of the
definition would be inconsistent with the definition as a whole.  The
notice of reconsideration did not raise the issue of whether EPA should
amend section 52.21(b)(50) to exclude ozone depleting substances.

EPA is also unable in this action to adopt the interpretation that the
phrase “subject to regulation” requires control only for sources
that are regulated under a MACT or NESHAP (or similar regulation)
covering the pollutant.  This interpretation is inconsistent with
portions of the existing definition of “regulated NSR pollutant”
that EPA did not address in the reconsideration notice.  First, MACT
standards and NSPS are covered by specific provisions of the definition
of “regulated NSR pollutant.”  NSPS pollutants are covered in
section 52.21(b)(50)(ii), while MACT pollutants are exempt under the
last sentence in section 52.21(b)(50) due to a statutory exemption of
MACT pollutants from PSD (42 U.S.C. §7412(b)(6)).  Second, the NSPS
provision in the definition of “regulated NSR pollutant” provides
that the definition includes “any pollutant that is subject to any
standard promulgated under section 111.”  See 40 CFR
52.21(b)(50)(ii).  Since it applies to any pollutant regulated in any
NSPS, this provision is not susceptible to an interpretation that it
means “any pollutant for which an NSPS has been promulgated for the
source category of the source obtaining a PSD permit.”

	Comments:

A state agency commenter (0091) supports EPA’s preferred option of
“actual control” or a regulated NSR pollutant as being “subject to
regulation under the Act,” and also supports EPA in their
interpretation that the remaining four options are not viable.  However,
this commenter believes that the actual control should be the control of
a stationary source, and not a mobile source tailpipe emissions
limitation.  The commenter understands that EPA is considering
development of an NSPS for GHG emissions from several industry sectors,
and states that promulgation of an NSPS for stationary sources would be
the most appropriate trigger for PSD applicability.

Ten industry commenters (0089 and others incorporating this submission
(0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) said that
the “actual control” interpretation safeguards the Administrator’s
authority to require such controls on individual pollutants under other
portions of the Act before triggering PSD requirements.  This is
important because it properly recognizes that promulgation of emission
control requirements with respect to a pollutant (such as CO2) under
another provision of the CAA (e.g., a provision in Title II of the Act)
does not automatically trigger PSD.

One commenter (0088), while generally agreeing with the December 18,
2008 EPA Memorandum, states that clearly the interpretation must be
further clarified, and strongly suggests EPA’s interpretation must
clarify that the PSD permitting program actions should be activated upon
stationary source regulations and the actual control of stationary
sources of missions – not a mobile source control rule such as the
LDVR

Commenters (0092, 0098) representing several groups of companies
(industry) argue that the proposed reconsideration implicitly promotes
EPA’s erroneous belief that the LDVR would automatically trigger PSD
permitting requirements for stationary sources, and this is by no means
the correct or the preferable interpretation of the CAA.  According to
these commenters, under a more logical interpretation of the CAA, the
LDVR would not trigger PSD, eliminating the need for millions of new
sources to obtain PSD permits and for much of the PSD Tailoring Rule.

Response:

	EPA has already established an interpretation that a pollutant
“subject to regulation” includes “all pollutants regulated under
Title II of the Act regarding emission standards for mobile sources.”
43 FR at 26397.  Thus, EPA has not previously considered PSD to be
limited only to pollutants regulated in stationary source standards.
Nor has EPA previously taken the position that Title II standards do not
automatically trigger PSD.  Since EPA’s reconsideration notice did not
address this precedent, EPA is unable to modify this interpretation
through this final action.

The Agency interprets the provisions of Section 165 to apply to any
pollutant that becomes “subject to regulation” under the Act.  The
D.C Circuit Court upheld this position. See Alabama Power Co. v. Costle,
636 F.2d 323, 403-406 (C.A.D.C., 1979) (rejecting arguments that Section
165 should not automatically apply to all pollutants subject to
regulation under the Act.).  We have continued to assert this position
since this time.  See, e.g., 67 FR 80240 (stating that The PSD program
applies automatically to newly regulated NSR pollutants); 61 FR 38307
(stating that the PSD regulations apply to all pollutants regulated
under the Act), and Memo. From John S. Seitz, Director Office of Air
Quality Planning and Standards to Regional Air Directors, “Interim
Implementation of New Source Review Requirements for PM2.5,”  April
5, 2005 (stating that Section 165(a)(1) of the Act provides that no new
or modified major source may be constructed without a PSD permit.).  We
are not changing our regulations, and did not open this interpretation
for reconsideration in this action.

9.9.   Need for Additional Process and Analysis Before Regulating
Stationary Source GHG Emissions

9.9.1.   Requests for More Orderly Process and Judgment Before EPA
Regulates GHGs Emissions from Stationary Sources

	Comment:

	Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107,
0108, 0109) state that the orderly regulatory process contemplated by
the CAA starts with information-gathering concerning the pollutant’s
emissions, continues with determinations (under the CAA’s non-PSD
provisions) regarding the effect of the pollutant on public health and
welfare and with development and issuance of proposed control
regulations, and ultimately culminates in final regulatory controls on
emissions of the pollutant, if justified and necessary.  The commenters
express concern that EPA’s recent proposals to regulate GHG emissions
from major stationary sources through PSD would undermine the orderly
approach contemplated by the CAA.  The commenters believe that
establishing GHG emission control requirements for stationary sources
through the back door of GHG rules for motor vehicles promulgated under
Title II simply does not allow the time necessary to assess emissions
and available controls and to prepare for compliance with any new
regulatory requirements.  Two of the commenters (0081, 0083) add that if
EPA wants to establish GHG emission controls on stationary sources, it
should do so through the orderly regulatory process set forth in the
CAA, which would allow sufficient time to assess emissions and controls
and provide sources the ability to work with the Agency in shaping the
regulations and time to meet any new requirements.

	One industry commenter (0109) state that the concerns expressed by EPA,
that it have adequate time to assess emissions of a pollutant and
determine appropriate controls before PSD and BACT requirements are
required for a pollutant, would seem to be at odds with EPA’s recent
efforts to regulate GHG emissions from large stationary sources through
the back door of GHG emission standards for motor vehicles promulgated
under Title II of the CAA, an approach which would appear to skip all of
the regulatory steps that EPA states are important.  The commenter
(0109) believes that if EPA believes it is necessary to establish
emission controls on large stationary sources of GHGs, it should heed
its own pronouncements and proceed directly through the orderly
regulatory process set forth under the CAA, which would allow the Agency
sufficient time to assess emissions and available controls and provide
major stationary sources with the ability to work with the Agency in
shaping the regulation, as well as giving those sources the necessary
time to meet any new requirements.

	Another industry commenter (0107) states that the PSD program is very
different than new motor vehicle standards, and pollutants regulated
under Title I have a different purpose than Title II national vehicle
standards.  On this basis, the commenter (0107) concludes that it is
logical and reasonable to conclude that Congress could not have intended
that a LDVR would operate as a trigger for the PSD program.

	One industry commenter (0113) states that EPA’s proposed regulation
of GHGs is one of the most consequential regulatory actions ever taken,
and the agency has deliberately taken it without consideration of the
consequences.  EPA’s response is, in effect, that it did not and does
not have to inform itself (or others) of the relevant environmental and
economic facts because it has had and will have no opportunities to make
use of facts— no opportunities for judgment and thus no need to inform
that judgment.  The outcome, under the CAA, was “triggered,”
“automatic” or “self-effectuating.”  According to the commenter
EPA’s opinion is that the statute made them do it.  The agency’s
defense, in effect, is that it made no choices—committed no acts of
judgment— that would have benefited from facts and analysis with
respect to the environmental and economic consequences of this historic,
contentious, intrusive and inefficient new frontier in regulation.  It
was only doing what the law required.  The commenter contends that the
agency had innumerable opportunities to do other than what it has done.
It could have shaped, conditioned delayed or phased this outcome.  Or,
it could have decided not to do this at all, and the Clean Air Act would
not have stood in the way – so long as its judgment was considered and
supported.  Informed judgment has been needed from the first step on
this regulatory path to PSD regulation, and the remaining steps likewise
require it.  Each of various EPA opportunities for judgment –
opportunities for action or inaction – would have benefited from
consideration of the environmental and economic consequences of their
exercise. According to the commenter, an agency cannot decide whether to
try to avoid, mitigate or prudentially delay a problem if it does not
assess the problem, and it cannot take an action without considering its
most fundamental aspects.  The commenter concludes that even if that
trigger operates just as automatically as the agency says it does (and
it clearly does not), the agency is not excused from informing itself of
the consequences of pulling the trigger.  The alleged mechanistic and
determinate character of that one step cannot be ascribed to the rest of
the decisional process.  At some point, before it effectuates it, the
agency had and has obligation to consider the impact of the outcome.

Response:

EPA understands commenters’ concerns but disagrees with how commenters
have characterized EPA’s efforts to implement the mandate delivered by
the United States Supreme Court in Massachusetts v. EPA.  EPA
acknowledges that there are challenges to using the existing CAA to
addressing the challenge of global climate change.  EPA supports
Congressional efforts to adopt comprehensive energy climate change
legislation, but under the circumstances has exercised its judgment with
great thought and care within the framework of the CAA to respond to the
Court’s direction and the Act’s provisions.  EPA is working within
the constraints of the Act to promulgate an approach that addresses
sources of GHGs in a common sense way that responds to the policy and
practical issues that have been raised in comments submitted on both
this action and proposed tailoring rule.

EPA has an obligation to respond to the Supreme Court remand in
Massachussetts v. EPA and make a determination regarding whether GHG
emissions from motor vehicles (i.e., on-highway vehicles) endanger
public health and welfare.  In response to that obligation, EPA
carefully reviewed the available science on climate change, proposed a
determination for public comment, and made an affirmative determination
after considering the information and comments provided by the public.
Having made a determination, based on sound science, that GHG emissions
from mobile sources endanger public health and welfare, EPA has an
obligation under the relevant CAA provision (section 202(a)) to
promulgate standards to address emissions from those sources.  As
discussed above, once GHGs are “subject to regulation under the
Act,” EPA does not believe it can wholly defer application of the PSD
program to GHG emissions from stationary sources until EPA can address
whether to promulgate categorical GHG standards for stationary sources
under other provisions in the CAA.

Under Title II or other provisions of the CAA, EPA is authorized to make
decisions to control pollutants (and regulate various categories of
sources) that the Agency (or Congress) has found endanger public health
or welfare.  The PSD program works to ensure that the same pollutants
are controlled when new major stationary sources are constructed or
major existing stationary sources are modified.  The case-by-case nature
of PSD control determinations ensures that these stationary source
emissions are limited based on real-world considerations of
technological availability, costs, energy impacts and other relevant
factors.  While there may be some advantages to PSD being triggered by a
decision to control stationary source GHG emissions, the statute and
practicality do not require it.  In fact, best available control
technology determinations in PSD can provide information and experience
that is useful in setting generally applicable stationary source
requirements under other CAA provisions.  Moreover, given the wide
variety of stationary sources that emit GHGs, it would take some time
before the Agency could promulgate national standards for all the
potentially relevant source categories.  PSD provides a basis for
limiting emissions when a large emitting facility constructs or modifies
in a way that significantly increases emissions, and so allows
permitting authorities, permit applicants and the public to consider
what controls make sense for that facility considering costs and other
relevant factors.

9.9.2.   Analysis of Effects on Large Stationary Sources

	Comment:

	Nine industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107,
0108, 0109, 0080) assert that EPA has not adequately analyzed the
impacts of GHG regulation on large stationary sources of GHG emissions.

	Eight of these industry commenters (primary comment by 0089;
incorporated or referenced by 0067, 0083, 0090, 0096, 0106/0107, 0108,
0109) assert that EPA should not proceed with actions that the Agency
believes will trigger PSD requirements for GHG emissions in the absence
of proper analysis of the effects of doing so, and public notice of
opportunity for comment on that analysis.  The commenters do not agree
that the proposed motor vehicle GHG rules, if made final, would
necessarily have PSD effects or that they would take place in the
timeframe discussed in the Reconsideration proposal package (i.e., 60
days after publication of the final GHG vehicle rules).  In addition,
these industry commenters believe that none of EPA’s current proposed
GHG-related rules addresses in any meaningful way how EPA believes those
rules would affect large stationary sources of GHG emissions and why EPA
believes it should use motor vehicle rules – rules that it has no
statutory obligation to promulgate at this time – to trigger
enormously complex, expensive, and burdensome PSD requirements.  The
commenters assert this is not good policy, and argue that the problem is
compounded by EPA’s failure to assess what the Agency believes the
effects of that policy will be on this nation’s large stationary
sources, including its electricity generating and manufacturing sectors,
and on the nation’s economy and international competitiveness.

These industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107,
0108, 0109) state that, although EPA properly recognizes in the proposed
PSD Interpretation that the need for adequate time to assess emission
levels and determine appropriate emission controls supports
reaffirmation of its actual control interpretation, EPA seems at the
same time wholly to ignore the dramatic implications of its plan to
impose – in the very near term – PSD requirements for GHGs on large
stationary sources, in the absence of guidance on and without time to
prepare for implementation of those requirements.  The commenters
believe that, at a minimum, EPA should make clear that any final motor
vehicle GHG rules under section 202(a) of the Act do not trigger PSD
requirements before those rules take effect, an event that would not
occur before October 2011.

	Response:

EPA included an extended discussion on the economic impacts of PSD
regulation for GHG emissions in the preamble to the proposed Tailoring
Rule and also prepared a cost-benefit analysis under EO 12866 for that
proposal.  See 55292 FR at 55337-340, 55343.  As part of the Tailoring
Rule docket, EPA also conducted the appropriate analysis required by the
RFA and undertook additional discretionary RFA outreach to further
assess the impacts of that rule.  See id. at 55349 and docket
EPA-HQ-OAR-2009-0517-19130 (summary of discretionary outreach available
in the docket for the Tailoring Rule).  These analyses were available
for comment as part of the Tailoring Rule proposal.  In that proposal,
EPA also took comment regarding the final permitting thresholds that
could be adopted for implementing the PSD program for GHG emissions,
including matters related to the selection of those thresholds.
Commenters that felt EPA’s analyses did not fully consider the costs
and/or benefits of GHG regulation for large sources were able to address
that issue in their comments on the proposed Tailoring rule.  EPA will
address concerns regarding the scope of these analyses in the final
action on the Tailoring Rule.

For response to the concerns raised by commenters regarding EPA’s
interpretation of “subject to regulation” as it relates to
applicability of PSD regulation following promulgation of the light duty
vehicle rule for GHG emissions, see EPA’s responses to related
comments in Chapters 8 and 9 of this RTC.

9.10.   Combustion of Biomass-Derived Fuels

	Comment:

Two industry commenters (0055, 0071) request that EPA exempt CO2
emissions from the combustion of fuels derived from biomass
(“biofuels”) from both counting towards the threshold for major
emitting facilities or major modification status from BACT analyses for
CO2 emissions.  These commenters stated that CO2 emissions from
combustion of biomass, because of the principle of carbon neutrality and
best carbon accounting practices, do not contribute climate change and
should not be counted as increasing emissions of a pollutant regulated
under the CAA.  Biomass CO2 neutrality is an inherent property of
biomass based on the natural carbon cycle.  The neutrality of CO2
emissions from biomass combustion has been recognized for many years by
an abundance of studies and is widely accepted by agencies,
institutions, regulations and legislation.  This is true for IPCC
Guidelines and Guidance for the UN Framework Convention on Climate
Change UNFCCC reporting protocols and an innumerable other agencies and
institutions (cites agencies and countries whose accounting practices
quantify biomass as CO2 -neutral).  EPA recently confirmed its position
that the combustion of biomass should be considered CO2-neutral,
regardless of the source of the biomass, in its proposed rule to
implement the Energy Independence and Security Act of 2007 through a new
Renewable Fuel Standard, RFS2.  In EPA’s Mandatory GHG Reporting Rule,
EPA clearly and intentionally excludes biomass CO2 emissions for the
calculation of thresholds for determining regulated facilities.

Another industry commenter (0071) stated that excluding CO2 emissions
from the oxidation of biomass would:

Avoid imposing PSD requirements on emissions that do not cause or
contribute to the air quality impact (increased CO2 concentration in the
global atmosphere) that application of PSD permitting is supposed to be
addressing, and

Encourage substitution of renewable fuels for fossil fuels, which EPA is
already seeking to accomplish through other measures, such as provisions
in the proposed GHG tailpipe standards that give manufacturers extra
credit for alternative fuel vehicles.

Response:

As explained elsewhere in this RTC, this action reconsiders an
interpretation of general regulatory text found in 40 CFR 52.21(b)(50)
and is not the appropriate forum to address the specific PSD
applicability and implementation issues presented by the regulation of
GHGs.  .  Similar comments and issues were raised in the context of the
Tailoring Rule. EPA will respond, as appropriate, to those comments in
that forum and in guidance that EPA is developing to address issues
raised by the CAAAC workgroup, permitting authorities, and the regulated
community

Chapter 10.   State Program Implementation

10.1.   Applicability of PSD Interpretive Memo to State PSD Programs

Comment:

One industry commenter (0055) requests that EPA make the PSD
interpretive memo binding on state PSD programs.  They state that if
states have the freedom to apply PSD permitting requirements to GHGs
even before they are subject to control measures under the CAA, the
harmful effects of overloading the PSD permitting system with thousands
of new PSD permit applications would be realized anyway, despite EPA’s
attempt to try to avoid the result.

One industry group (0071) commenter states that it is imperative to make
the PSD Interpretive Memo binding on state PSD programs.

Eight industry commenter (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108,
0109) said that EPA’s interpretation should apply both to
administration of the federal PSD permitting program under 40 CFR 52.21
and to EPA approval of (or other action on) new or revised state PSD
plans under 40 CFR 51.166.

Response:

EPA will apply the PSD Interpretive Memo, with the refinement described
in this action, when implementing the federal permitting program under
40 CFR 52.21.  Furthermore, we will expect that states that implement
the federal PSD permit program under delegation from an EPA Regional
Office will do the same.

In addition, EPA will apply the interpretation reflected in this notice
and the PSD Interpretive Memo in its oversight of existing state
programs and review and approval of new program submissions.  Many
states implement the PSD program pursuant to state laws that have been
approved by EPA as part of the SIP, pursuant to a determination by EPA
that such laws meet the PSD program criteria set forth in 40 CFR 51.166.
 The EPA regulation setting forth PSD program requirements for SIPs also
includes the same definition of the term “regulated NSR pollutant”
as the federal program regulation.  See 40 CFR 51.166(b)(49).  Because
this regulation uses the same language as contained in 40 CFR 52.21 and
the same considerations apply to implementation of the PSD program under
state laws, EPA will interpret section 51.166(b)(49) in the same manner
as section 52.21(b)(50).  However, in doing so, EPA will be mindful that
permitting authorities in SIP approved states have some independent
discretion to interpret state laws, provided those interpretations are
consistent with minimum requirements under the federal law.

To the extent approved SIPs contain the same language as used in 40 CFR
52.21(b)(50) or 40 CFR 51.166(b)(49), SIP-approved state permitting
authorities may interpret that language in state regulations in the same
manner reflected in the PSD Interpretive Memo and this notice.  However,
EPA will not seek to preclude actions to address GHGs in PSD permitting
actions prior to January 2, 2011 where a state permitting authority
feels it has the necessary legal foundation and resources to do so.

EPA has not called on any states to make a SIP submission that addresses
the interpretive issues addressed in this notice and the PSD
Interpretive Memo.  As long as states are applying their approved
program regulations consistent with the minimum program elements
established in 40 CFR 51.166, EPA does not believe it will be necessary
to issue a SIP call for all states to address this issue.  However,
permitting authorities in SIP-approved states do not have the discretion
to apply state laws in a manner that does not meet the minimum federal
standards in 40 CFR 51.166, as interpreted and applied by EPA.  Thus, if
a state is not applying the PSD requirements to GHGs for the required
sources after January 2, 2011, or lacks the legal authority to do so,
EPA will exercise its oversight authority as appropriate to call for
revisions to SIPs and to otherwise ensure sources do not commence
construction without permits that satisfy the minimum requirements of
the federal PSD program.

To enable EPA to assess the consistency of a state’s action with any
PSD program requirements for GHGs, states should ensure that the record
for each PSD permitting decision addresses whether the state has elected
to follow EPA’s interpretation or believes it is appropriate to apply
a different interpretation of state laws that is nonetheless consistent
with the requirements of EPA’s PSD program regulations.

10.2.   Need to Complete SIP Revision Process

Comment:

One industry commenter (0086) states that, because the federal and state
PSD rulemakings that established the regulatory language that is now
being interpreted as requiring GHGs to be subject to PSD did not
contemplate or address the massive impacts of that interpretation, the
PSD Interpretive Memorandum is, in effect, a new rule that has important
implications for timing and the CAA’s cooperative federalism.  The
commenter (0086) believes that EPA has overlooked the necessity of the
SIP revision process in this case where the existing state PSD rules and
EPA’s approval process for those rules did not construe the rules as
applying to GHGs.  The commenter (0086) believes, therefore, that the
normal SIP pattern under section 110 must be used: (1) 3 years for
adoption and submission of the necessary SIP revisions; (2) 1-2 years
for EPA action on the submission; and (3) possible 40 CFR 52.21 FIP
rulemakings.  While the commenter (0086) believes that the CAA requires
EPA to follow that pattern with respect to GHG emissions, the commenter
believes it is beyond doubt that the CAA at least affords EPA discretion
to follow it.  The commenter (0086) states that the alternative would be
for EPA to trigger a GHG-based PSD system initially in only those states
subject to 40 CFR 52.21, which would create huge adverse differences
between the states, at least for several years, an outcome Congress
strongly disfavored in establishing the PSD program in its present form
in 1977.  The commenter (0086) urges EPA to adopt the usual section 110
pattern because the commenter believes it is the only lawful pattern,
and would be more orderly.

Another industry commenter (0100) states that no matter what federal
pronouncements EPA may issue about whether and when it intends to
subject a pollutant to PSD permitting, it cannot purport to make GHG
emissions regulated until states have legally required time (through the
SIP call process) to amend their construction and operating permit rules
to include GHG as a regulated pollutant, and the process (in section
110(k) of the CAA) is followed for aligning state rules with changes in
EPA rules.  This commenter asserts that a change in federal law (i.e.,
adoption of the car rules) does not automatically result in a new
“pollutant” called “greenhouse gases” to be governed by state
permit rules and that further, any state rules that purport to regulate
new pollutants at the will of EPA without intervention by or guidance
from the state are unconstitutional because such provisions would
delegate lawmaking powers to a federal agency.

Response:

The applicability of PSD permitting requirements to a newly regulated
pollutant under SIP-approved PSD programs depends on whether states have
previously adopted laws that are sufficiently open-ended to apply to
additional pollutants without subsequent action by the state.  Many
States do not need to revise their SIPs or state laws to begin
implementing PSD for new pollutants.  Absent a unique requirement of
state law, EPA believes that state laws that use the same language that
is contained in EPA’s PSD program regulations at 52.21(b)(50) and
51.166(b)(50) are sufficiently open-ended to incorporate GHGs as a
regulated NSR pollutant at the appropriate time consistent with EPA’s
interpretation of these regulations.  As noted above, SIP-approved state
permitting authorities may interpret the same language in state
regulations in the same manner reflected in the PSD Interpretive Memo
and this notice.

The Agency interprets the provisions of Section 165 to apply to any
pollutant that becomes “subject to regulation” under the Act.  The
D.C Circuit Court upheld this position.  See Alabama Power Co. v.
Costle, 636 F.2d 323, 403-406 (C.A.D.C., 1979) (rejecting arguments that
Section 165 should not automatically apply to all pollutants subject to
regulation under the Act.).  We have continued to assert this position
since this time.  See, e.g., 67 FR 80240 (stating that The PSD program
applies automatically to newly regulated NSR pollutants); 61 FR 38307
(stating that the PSD regulations apply to all pollutants regulated
under the Act), and Memo. From John S. Seitz, Director Office of Air
Quality Planning and Standards to Regional Air Directors, “Interim
Implementation of New Source Review Requirements for PM2.5,”  April
5, 2005 (stating that Section 165(a)(1) of the Act provides that no new
or modified major source may be constructed without a PSD permit.).  We
are not changing our regulations, and did not open this interpretation
for reconsideration in this action.

The provisions in section 110 of the Act must be reconciled with the
requirements of section 165 of the Act, which preclude construction of a
major emitting facility without obtaining a permit in compliance with
the requirements of section 165.  EPA does not interpret CAA section 110
to preclude states from applying state laws that are sufficiently
open-ended to incorporate a pollutant that is subject to regulation at
the time of a permitting decision.  Furthermore, EPA has not promulgated
a NAAQS for GHGs that would implicate many of the procedural
requirements of section 110.  At the same time, EPA does not interpret
section 110 to mean that the requirements of 165 may be delayed for a
pollutant that is subject to regulation.  Thus, our approach provides
maximum flexibility for states to expeditiously adopt our interpretation
of subject to regulation, but does not allow for interpretation of that
phrase in a way that would circumvent section 165.

Specifically, as discussed above, EPA has not called on any states to
make a SIP submission that addresses the interpretive issues addressed
in this notice and the PSD Interpretive Memo.  As long as states are
applying their approved program regulations consistent with the minimum
program elements established in 40 CFR 51.166, EPA does not believe it
will be necessary to issue a SIP call under section 110(k) for all
states to address this issue.  However, EPA will exercise its oversight
authority as appropriate to call for revisions to the PSD permitting
provisions of SIPs and to otherwise ensure sources do not commence
construction without permits that satisfy the minimum requirements of
the federal PSD program.

In those cases where state laws are not sufficiently open-ended to
incorporate new PSD permitting requirements at the appropriate time, EPA
has often recognized and provided time for States to revise their
existing SIPs to implement new requirements.  See 67 FR 80240.  However,
EPA has also worked with States by issuing interim transition policies
that provide means for states to use existing state regulatory
authorities to assure that CAA requirements are met in the period before
any state that needs to do so may revise its SIP.  The PSD Interpretive
Memo and this final action on reconsideration of the memo does not
involve a revision of the PSD permitting regulations but rather involves
clarifications of how EPA interprets the existing regulatory text.
These actions articulate what has, in most respects, been EPA’s
longstanding practice.  Thus, many states may continue to proceed under
an interpretation of their rules after this action.  In light of
additional actions to be taken by EPA in the Tailoring Rule, states that
issue permits in the near term may want to preserve the discretion to
modify their approach after other EPA actions are finalized.  In light
of this contingency, one option states may consider is to establish that
the state will not interpret its laws to require PSD permits for sources
that are not required to obtain PSD permits under EPA regulations.

Comment:

An industry commenter (110) claims that EPA cannot, as it proposes in
its Tailoring Rule, retroactively change a SIP on the grounds that it is
the correction of a mistake without following all applicable procedural
requirements, citing a the Third Circuit decision in Concerned Citizens
of Bridesburg v. EPA that held that, because a state must have an
opportunity to pass first upon the mechanics of achieving compliance
with air quality standards, EPA cannot unilaterally revise a SIP without
following the CAA’s revision provisions.

Response:

 	Since this action does not involve the action described, this comment
is outside the scope of this reconsideration action.

Chapter 11.   Other Issues

11.1.   Combination of Interpretations

Comment:

One private citizen commenter (0048) believes that there should be a
combination of the proposed interpretations of “subject to
regulation.”  This commenter opines that monitoring and reporting is
necessary to interpreting pollutants that are “subject to
regulation.”  They state that with a combination of monitoring and
reporting, there should also be an EPA-approved SIP and a finding of
endangerment to develop limits.

	Response:

	For reasons discussed elsewhere in this document, EPA has decided to
continue applying the actual control interpretation and has rejected the
options of triggering PSD permitting requirements based solely on a
finding of endangerment or on regulation of a pollutant in an
EPA-approved SIP.  Thus, EPA is not adopting the commenters suggestion
to employ a combination of these interpretations.

11.2.   Municipal Solid Waste (MSW) Landfill Gas Emission Standards

Comment:

	Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107,
0108, 0109) indicate that environmental advocacy groups have alleged in
permit challenges that CO2 is subject to regulation for purposes of the
PSD program because CO2 is one of the constituents of MSW landfill
emissions that are regulated by EPA under section 111 of the CAA and 40
CFR 60.33c and 60.751.  The commenters state that EPA made clear in its
Deseret briefing that this argument has no merit.  The commenters assert
that both the regulatory text of, and the preamble to, the proposed
section 111 rules for MSW landfill emissions explicitly address the
issue and clarify that the term “MSW landfill emissions” refers to a
single designated composite pollutant, not its various individual
constituents, and that MSW landfill emissions is the only pollutant
subject to regulation.  See Deseret Surreply Brief of EPA Office of Air
and Radiation and Region VIII at 1-6.

	The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108,
0109) further note that the specific control options in the MSW landfill
regulations focus on control of NMOC emissions, which are used as a
surrogate for MSW landfill emissions, and that EPA recognized in issuing
the standards that control options identified as reducing overall MSW
landfill emissions may actually increase the secondary emissions of
individual components, including CO2.  Based on this, the commenters
state that EPA did not intend for the MSW landfill emission regulations
to address climate change considerations, but rather ambient ozone
problems, air toxic concerns, and potential explosion hazards.

	The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108,
0109) assert that EPA’s MSW landfill gas emission regulations do not
make CO2 or other GHGs “subject to regulation” under the CAA for
purposes of the PSD program, and that EPA in effect concurred with this
conclusion in the PSD Interpretive Memorandum, where it stated that MSW
landfill gas is an example of a pollutant regulated as a collective
group of emissions, and not by its individual components.  The
commenters suggest that EPA reaffirm its position on this issue in its
final action in the present proceeding.

	Response:

The PSD Interpretive Memorandum contains the following statement in
footnote 6 (page 6) that relates to this issue:

This memorandum does not seek to further define the specific nature or
scope of any individual “pollutant” that is subject to such
controls.  Any ambiguity as to whether some part, component, or
constituent of a substance or category of substances is controlled under
a regulation should be resolved in the context of interpreting the
individual rule that gives rise to the issue.  See, e.g., Regulating
Greenhouse Gas Emissions Under the Clean Air Act, Advance Notice of
Proposed Rulemaking (“ANPR”), 73 FR 44354 (July 30, 2008) at
44420-421 (describing the various consequences that could arise given
the definition of the “pollutant” that EPA may establish in a
regulation of one or many GHGs).  For example, in adopting the New
Source Performance Standard (NSPS) for municipal solid waste (MSW)
landfills, EPA was explicit that it was regulating only MSW landfill
emissions collectively, and not the individual components of those
emissions.  56 FR at 24468, 24470 (May 30, 1991) (“The pollutant to be
regulated under the proposed standards and guidelines is “MSW landfill
emissions.”); id. at 24474 (“The EPA views these emissions as a
complex aggregate of pollutants which together pose a threat to public
health and welfare based on the combined adverse effects of the various
components. . . . The EPA thus views the complex air emission mixture
from landfills to constitute a single designated pollutant.”).

Since EPA is not withdrawing the PSD Interpretive Memorandum, EPA’s
position on this issue is unchanged by this action.

11.3.   Section 821 of Public Law 101-549

	Comment:

	Ten industry commenters (0067, 0073, 0083, 0085, 0089, 0090, 0096,
0106/0107, 0108, 0109) asserts that section 821 of Public Law 101-549 is
not part of the CAA, and section 821 implementing regulations do not
constitute regulation under the CAA.  Eight of the commenters (0067,
0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) state that no basis
exists for EPA to change its carefully considered and well-supported
determination that section 821 is not part of the CAA and that section
821 implementing regulations do not constitute regulation under the CAA.
 The commenters state that EPA should confirm that determination in this
proceeding.

One industry commenter (0085) stated that section 821 was deliberately
excluded from the Act even though it was part of the overall bill that
amended the CAA in 1990.  The commenter (0085) asserts that this
exclusion was clearly intentional and cannot be ignored by interpreting
the CAA to include section 821.

	As a threshold matter, the industry commenters (0067, 0083, 0089, 0090,
0096, 0106/0107, 0108, 0109) note that the section 821 issue is moot,
assuming that EPA continues to maintain the actual control
interpretation – this issue becomes relevant only if the Agency
determines that monitoring and reporting requirements alone can make a
pollutant subject to the PSD program.  Nevertheless, the commenters
strongly disagree with any suggestion that EPA should change its
position on the issue of whether section 821 is part of the CAA.  The
commenters believe that it is clear that Congress did not make and never
intended to make section 821 part of the CAA.  See In re Deseret Power
Electric Coop., Response of EPA Office of Air and Radiation and Region
VIII to Briefs of Petitioner and Supporting Amici, at 45-46 (Mar. 21,
2008) (explaining why section 821 is not part of the CAA); Deseret UARG
Amicus Brief at 7-11 (same).  The commenters state that for several
reasons, specifically discussed by EPA and UARG in their submissions to
the EAB in Deseret, this conclusion is clear both from the language of
section 821 itself, which refers to the CAA as separate legislation, and
from contemporaneous Congressional statements.  The commenters add that
even a cursory review of the CAA makes clear that section 821 is not
part of that statute; the CAA begins with section 101 and continues
through section 618 and no further; it includes no section 821.  CAA
sections 101-618, 42 U.S.C. 7401-7671q.  The industry commenters (0067,
0073) similarly note that the language of Public Law 101-549 and the
legislative history clearly indicate that section 821 did not amend the
CAA and is not part of the CAA.

	The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108,
0109) state that no weight should be given to past assertions by EPA
that section 821 is part of the CAA.  The commenters note that those
statements did not address the point that is germane here, i.e., whether
the requirements of section 821 and section 821 regulations constitute
regulation under the CAA that may trigger PSD obligations.  In addition,
the commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109)
believe that ill-considered, incorrect past Agency characterizations of
section 821 or its implementing regulations could not possibly form the
basis for a new Agency interpretation concerning the effect of that
section or those regulations.  The industry commenters similarly noted
EPA’s inconsistent references to the legal status of section 821
cannot change the provisions of Public Law 101-549.

  SEQ CHAPTER \h \r 1 An environmental organization commenter (0095)
states that EPA properly recognizes section 821 of the CAA.  Commenter
notes that the Reconsideration states that in light of EPA’s
contradictory statements in assorted federal court proceedings as to
this point, EPA is now “less inclined to maintain” the position that
section 821 did not amend the CAA.. The commenter agrees that EPA should
abandon this theory.  The commenter adds that EPA has consistently
enforced the CO2 monitoring, reporting and recordkeeping obligations
imposed by section 821 and EPA’s own Part 75 regulations through the
enforcement provisions of the CAA.  (Case references are included and
attached.)  In four of these five cases, EPA has used section 113 of the
CAA to enforce the section 821 regulations.  In three of those cases, it
has assessed civil administrative penalties.  Thus, in those three
cases, EPA alleged that violations of section 821 and the implementing
regulations were violations of various parts “of this chapter”,
i.e., the Clean Air Act, and then imposed hundreds of thousands of
dollars in penalties for those violations.  EPA also enforced section
821 under section 113(b)(2), wherein the Administrator is authorized
“to commence a civil action for a permanent or temporary injunction,
or to assess and recover a civil penalty of not more than $25,000 per
day for each violation, or both.” And, consistent with its practice in
the administrative penalty cases, in at least one instance of violations
of section 821 (United States v. Block Island Power Co.), EPA duly
invoked federal court jurisdiction for violations “of this chapter.”

Finally, commenter (0095) asserts that EPA has also invoked its right
under Section 304(c)(2) to intervene in an ongoing citizen suit that
was, in turn, brought under Section 304(a)(1)(A) for violations of “an
emission standard or limitation under this chapter.” Thus EPA has
consistently contended that Section 821 is a regulatory provision of the
CAA and/or that violations of the Section 821 regulations are violations
of the CAA.

	Response:

In the October 7, 2009 notice, EPA solicited comment on the question of
whether section 821 of the CAA Amendments of 1990 is part of the CAA.
EPA indicated that the Agency was inclined against continuing to argue
that section 821 was not a part of the CAA, as the Office of Air and
Radiation and Region VIII had done in briefs submitted to the EAB in the
Deseret matter.  This question bears on the determination of whether the
CO2 monitoring requirements in EPA’s Part 75 regulations are
requirements “under the Act.”  In the proposed reconsideration
notice, EPA explained that it would be necessary to resolve whether or
not the CO2 monitoring and reporting regulations in Part 75 were
promulgated “under the Act” if EPA adopted the monitoring and
reporting interpretation.

EPA has not yet made a final decision on this question, and it is not
necessary for the Agency to do so at this time.  Since EPA is not
adopting the monitoring and reporting interpretation, the status of
section 821 is not material to the question of whether and when CO2 is
“subject to regulation under the Act.”  Because there are currently
no controls on CO2 emissions, the pollutant is not “subject to
regulation.”  Given that the provisions in Part 75 do not
“regulate” emissions of CO2, it is unnecessary determine whether
such provisions are “under the Act” or not to determine PSD
applicability.  Furthermore, the promulgation of EPA’s Reporting Rule
makes this issue even less material.  In that rule, which became
effective in December 2009 and required monitoring to begin in January
of this year, EPA established monitoring and reporting requirements for
CO2 and other GHGs under sections 114 and 208 of the CAA.  Thus, there
can be no dispute that monitoring and reporting of CO2 (as well as other
GHGs) is now occurring under the CAA, regardless of the status of
section 821 of the 1990 amendments.  At this point, the section 821
issue would only become relevant if a court were to find that the
monitoring and reporting interpretation is compelled by the CAA and a
party subsequently seeks to retroactively enforce such a finding against
sources that had not obtained a PSD permit with any limit on CO2
emissions.  If this situation were to arise, EPA will address the
section 821 issue as necessary.

11.4.   Alternatives Analysis Under Section 165 of the CAA

	Comment:

	Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107,
0108, 0109) observe that EPA did not address in the proposed PSD
Interpretation the argument that GHG emissions should be considered in
the alternatives analysis for a PSD permit under CAA section 165(a)(2),
and petitioners did not raise it in their Petition for Reconsideration.
The commenters note that EPA observed in the PSD Interpretive Memorandum
(at 4 n.4) that the EAB disposed of this argument in the Deseret
litigation.  The commenters opine that no legal support exists for any
argument that a PSD permit applicant or PSD permitting authority has an
affirmative obligation at this time to consider GHGs in an alternatives
analysis under section 165(a)(2) or EPA’s PSD regulations.

	Response:

As noted in the October 7 notice for this reconsideration, EPA’s
present action is focused on the interpretation of “subject to
regulation” as contained in 40 CFR 52.21(b)(50) (iv) and CAA sections
165(a)(4) and 169.  As such, this action is not the proper forum for
deciding whether GHGs may or may not be considered in the alternatives
analysis under CAA section 165(a)(2) or EPA’s PSD regulations.  While
we are declining to resolve this issue in this reconsideration action,
we want to clarify one aspect of the EAB Deseret decision referenced in
the comment.  The EAB’s decision found only that Region 8 was not
required to consider a particular alternative that may have reduced GHG
emissions on the grounds that this alternative was not identified in
public comments and that there is no affirmative duty to consider an
alternative not identified in public comments under section 165(a)(2) or
EPA’s PSD regulations.  EPA does not read the EAB’s decision to
conclude that there is never a duty to respond to GHG issues associated
with an alternative that is raised in public comments.  If it becomes
necessary, EPA will address the scope of consideration of GHG emissions
in the alternatives analysis when such an issue arises in a permitting
action or by issuing specific guidance on the issue.

11.5.   Broad Focus of Proposal

	Comment:

	Two industry commenters (0065, 0067) state that EPA has properly
focused on the application of the proposed interpretation to all
pollutants, instead of limiting the applicability to CO2 or GHGs.

In contrast, one state/local agency association (0062) believes that PSD
Interpretive Memo was crafted more narrowly than the proposed
reconsideration.  The commenter (0062) the proposed broadening of the
interpretation is unwise and recommended that any future determinations
of whether a pollutant is “subject to regulation” be made on a
case-by-case basis, considering all of the relevant facts.  The
commenter (0062) states that in discussing the proposed PSD
Interpretation, EPA has revived issues that were resolved (such as the
ammonia PM2.5 issue) and seeks to address a number of issues that will
be moot (such as the approval of the California waiver and the
endangerment finding issue) or are unrelated to the current issues (such
as whether a rule that only affects 49 states is sufficient to trigger
PSD and title V permitting).  The commenter (0062) believes that EPA’s
proposed standard for when a pollutant is subject to regulation
(“[t]hose pollutants subject to a nationwide standard, binding in all
states, that EPA promulgates on the basis of its CAA rulemaking
authority”) is at once too narrow and too broad.  As an illustration,
the commenter (0062) notes that California-certified vehicles do not
have to meet federal emissions standards, so it could be argued that the
federal motor vehicle GHG standard is not binding in all 50 states.  On
the other hand, the commenter (0062) asserts that it will likely be
argued that such a standard is impermissible under the CAA because the
statutory limitation would be too subject to gaming by the Agency (e.g.,
if EPA were to exempt a single state from an otherwise federally imposed
national control strategy for a pollutant); that is, if PSD
applicability for a pollutant is imposed only when EPA explicitly
chooses to do so, CAA section 165(a)(4) has no meaning.

	The state/local agency association (0062) agrees that PSD and title V
applicability should only arise based on a conscious decision to broadly
regulate emissions of a pollutant under the CAA, but expressed concern
that attempting to limit the form of future regulation will have adverse
consequences – one of the largest concerns is the amount of litigation
it is likely to engender.  The commenter (0062) asserts that EPA is far
more likely to achieve what is needed under these circumstances by
limiting its interpretation to the CO2 monitoring and light-duty vehicle
GHG rules at issue rather than issuing a sweeping pronouncement that
establishes a single factor that attempts to govern all future
pollutants; decisions respecting such future pollutants are better left
to a review at the time they arise based on all of the relevant facts at
the time.  The commenter (0062) believes that in the present
circumstance – where EPA is pursuing a rulemaking that clearly would
meet any reasonable reading of the term “subject to regulation” –
such a broad interpretation is not necessary, may produce inappropriate
results in the future, and may delay the overall implementation of the
program if it is challenged and overturned.

	Response:

In accordance with the position taken in the PSD Interpretive Memo and
supported by the first commenter above, EPA continues to believe it is
best to determine the full scope of pollutants “subject to
regulation” under the federal PSD program, in order to “resolve
ambiguity and reduce confusion among permitting authorities, the
regulated community, and other interested stakeholders.”  See Memo at
2.  Accordingly, this reconsideration action represents a broad
consideration of the most appropriate legal interpretation and policy
rationales for potentially applying PSD permitting requirements to all
pollutants regulated under the CAA.

At the outset, we disagree with the comment above that characterizes the
reconsideration as being broader than the original Memo.  In fact, this
reconsideration is seeking comment on issues specifically raised in the
Memo itself, such as the effect of an endangerment finding, control of a
pollutant in one SIP, and the interplay of this interpretation with our
PM2.5 rulemaking  (see Memo at 14-16), and on related issues brought to
EPA’s attention in other actions, such as comments in the California
waiver action seeking clarification of the impact of a waiver on PSD
implementation (see 74 FR 32744, 32783 (July 8, 2009). Accordingly, EPA
disagrees that the issues addressed in this reconsideration have been
resolved, will be moot, or are unrelated to the current issues.  As the
discussions in the notice of reconsideration and the resulting comments
make clear, each of these issues could have important impacts on our
consideration of PSD implementation for pollutants “subject to
regulation” under the relevant regulatory and statutory provisions.

With regard to the specific illustration raised in the comment, we note
that the commenter has misconstrued the impact of the grant of a section
209 waiver in California.  As explained in response to specific comments
regarding whether a pollutant addressed by a section 209 waiver is
“subject to regulation” above, while an automobile in compliance
with state standards is treated as in compliance with federal standards
under CAA section 209(a)(3), the federal standards are still applicable
– if a manufacturer fails to comply with a state standard adopted
pursuant to a section 209 waiver, EPA can still bring an enforcement
action if the federal standards are violated.

EPA also disagrees that the interpretation presented in this action is
either too narrow or too broad.  Rather we believe that it is an
interpretation that resolves general ambiguity in the PSD regulatory
program.  To the extent that the commenter requests that EPA interpret
“subject to regulation” on a case-by-case basis to avoid speculated
impacts of the chosen interpretation on future actions , we note that in
adopting the “takes effect” interpretation regarding the timing of
PSD implementation, the response to comments provided earlier in this
document acknowledged that it will be helpful in some contexts for EPA
to provide additional implementation information specific to each new
pollutant that becomes subject to regulation and we have provided such
information with regard to the forthcoming LDV Rule that is anticipated
to establish the first controls on GHGs.  Moreover, EPA has no desire to
conduct a case-specific notice and comment process each time there is
the potential for PSD requirements to apply to a newly regulated
pollutant.  We believe it is best to provide an overall interpretation
that can used to provide future consistency in PSD regulatory actions,
and reject the notion that we should limit the current action to
consideration of GHGs.

11.6.   Adequacy of Comment Opportunity

Comment:

One industry commenter (0111) states that the close timing of the GHG
Rulemakings made it difficult for them to submit meaningful comments on
these rulemakings, particularly on the Motor Vehicle GHG Rule.
Problematically, the GHG rulemakings were all published in the Federal
Register within just one month of each other.  Meanwhile, many
stakeholders, including the commenter (0111), were focused on and have
allocated substantial resources towards analyzing and preparing to
comply with the final mandatory GHG Reporting Rule, which was finalized
in the midst of all three GHG rulemaking comment periods, on October 30,
2009.  Further compounding the already tight timeline, the GHG
rulemaking comment deadlines fall within the holiday season—the Motor
Vehicle GHG Rule comments were due during the Thanksgiving holiday and
the PSD Tailoring Rule comments are due immediately after Christmas.
The GHG rulemakings are legally and technically complex, with
significant and likely unprecedented consequences for its members.  Each
rulemaking on its own requires significant time and resources to fully
evaluate, develop data and analyses, and formulate appropriate comments.
 Given the close timing of the publication of the GHG rulemakings, the
current comment periods were simply insufficient to allow the commenter
(0111) a fair opportunity to do so.

One industry organization representing many industries (0049, 0114)
requested an extension of the comment period for the LDVR, PSD and title
V GHG Tailoring Rule on, and this proposed “PSD Interpretive Memo
Reconsideration” on November 18, 2009 because the closing of the
comment periods and close timing of the GHG rulemakings makes it
difficult to fully analyze the rules, develop useful data, and submit
comments on all relevant aspects of the rule.  This commenter received a
reply from EPA’s Assistant Administrator (on November 25, 2009)
denying the extension request in its entirety.  The commenter (0114)
requested, on December 22, 2009, that EPA reconsider its denial.

One industry commenter (0078/0094) adds that the Reconsideration
Proposal, being framed as a stand alone section 307(d) rulemaking, but
not containing any proposed regulations to implement the interpretation
by force of law, may not be entitled to Chevron deference.  The
commenter claims that there is not sufficient opportunity to comment on
the Reconsideration Proposal, claims that U.S. EPA’s process
bifurcates the proposal from the proposed Tailoring Rule and any other
rulemaking necessary for its implementation, and argues that such
rulemaking is essential to evaluate and address the Reconsideration
Proposal’s legal, policy, technical and economic implications.  The
commenter (0078/0094) concludes that as a result, the proposal, standing
alone, does not embody the notice legally required to provide a fair
opportunity for comment.

	Response:

As explained in the Nov. 25, 2009 response from Assistant Administrator
Gina McCarthy to the National Association of Manufacturers (described
above)  we were not able to extend the normal comment period for this
and the EPA’s other GHG actions.  We have reviewed the comments on
related actions and made every effort to understand comments on each of
these important packages.  In addition, as explained in Chapter 2 of
this RTC, since the PSD Interpretive Memo is interpretive in nature, EPA
was not required to go through a notice and comment rulemaking process
to issue the document.  EPA’s action to take comment on
reconsideration of the memorandum was voluntary.  Nevertheless, EPA has
taken the appropriate steps to provide an adequate opportunity for
comment on the issue raised in the PSD Interpretive Memorandum,
including providing twice the amount of time for comment described in
CAA section 307(h).

   0075 comments were comments submitted by U.S. Chamber of Commerce in
response to the Advance Notice of Proposed Rulemaking “Regulating
Greenhouse Gas Emissions Under the Clean Air Act” published in the
Federal Register on July 30, 2008.

   Notably, the legislative record refers to “State” emission limit,
and makes no note of this State emission limitation having broader
applicability.

   For example, EPA has already assembled a workgroup consisting of
members of the Clean Air Act Advisory Committee (CAAAC) to discuss and
identify the major issues and potential barriers to implementing the PSD
program for GHGs, with a focus on the BACT determination.  The workgroup
presented their initial recommendations to the CAAAC at the CAAAC’s
February 3, 2010, meeting, and the CAAAC unanimously voted to pass the
recommendations on to EPA.  EPA is currently reviewing those
recommendations and developing guidance addressing the issues raised
therein.  The workgroup is continuing to meet to assess issues that were
deferred in their initial recommendations, including GHG-specific
consideration of netting similar to that identified in the comments
above, and EPA anticipates that the we will also issue guidance in
accordance with the additional recommendations that arise from the
workgroup’s continued deliberations, as well as other issues that it
might be necessary to address that arise from inquiries by permitting
authorities and the regulated community.  (Additional information
regarding the workgroup and its work in this area are available at
http://www.epa.gov/air/caaac/climatechangewg.html.)

   The increments for emissions of the various oxides of nitrogen are
expressed as concentrations of nitrogen dioxide (NO2).

  PAGE   \* MERGEFORMAT  i


[Federal Register Volume 84, Number 120 (Friday, June 21, 2019)]
[Proposed Rules]
[Pages 29102-29105]
[FR Doc No: 2019-13047]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2019-0437; Product Identifier 2019-NM-074-AD]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD)
for certain The Boeing Company Model 757-200, -200CB, and -300 series
airplanes. This proposed AD was prompted by reports of cracks in the
fuselage frame web at body station (STA) 1640. This proposed AD would
require, depending on configuration, a general visual inspection for
any previous repair, such as any reinforcing repair or local frame
replacement repair, repetitive open hole high frequency eddy current
(HFEC) inspections for any crack of the fuselage frame web fastener
holes, on the left and right side of the airplane, and applicable on-
condition actions. The FAA is proposing this AD to address the unsafe
condition on these products.

DATES: The FAA must receive comments on this proposed AD by August 5,
2019.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For Boeing service information identified in this NPRM, contact
Boeing Commercial Airplanes, Attention: Contractual & Data Services
(C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600;
phone:<PHONE_NUMBER>; internet: https://www.myboeingfleet.com.
    For Aviation Partners Boeing service information identified in this
NPRM, contact Aviation Partners Boeing, 2811 South 102nd St., Suite
200, Seattle, WA 98168; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>internet: http://www.aviationpartnersboeing.com.
    You may view this referenced service information at the FAA,
Transport Standards Branch, 2200 South 216th St., Des Moines, WA. For
information on the availability of this material at the FAA, call 206-
231-3195. Boeing Alert Requirements Bulletin 757-53A0112 RB, dated
November 16, 2018, is also available on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2019-
0437.

Examining the AD Docket

    You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2019-
0437; or in person at Docket Operations

between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this NPRM, the regulatory evaluation,
any comments received, and other information. The street address for
Docket Operations is listed above. Comments will be available in the AD
docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Peter Jarzomb, Aerospace Engineer,
Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount
Boulevard, Lakewood, CA 90712-4137; phone:<PHONE_NUMBER>; fax: 562-627-
5210; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under the ADDRESSES section. Include ``Docket No. FAA-2019-0437;
Product Identifier 2019-NM-074-AD'' at the beginning of your comments.
The FAA specifically invites comments on the overall regulatory,
economic, environmental, and energy aspects of this NPRM. The FAA will
consider all comments received by the closing date and may amend this
NPRM because of those comments.
    The FAA will post all comments, without change, to http://www.regulations.gov, including any personal information you provide.
The FAA will also post a report summarizing each substantive verbal
contact the agency receives about this proposed AD.

Discussion

    The FAA has received reports of cracks found on several airplanes
while performing inspections in an area adjacent to the inspection
areas specified in Boeing Alert Service Bulletin 757-53A0108. The
cracks reported were not considered in the inspections specified in
Boeing Alert Service Bulletin 757-53A0108 because the crack initiation
sites, at issue here, were discovered after the release of Boeing Alert
Service Bulletin 757-53A0108. The airplanes had between 20,536 and
39,850 total flight cycles at the time of reporting. Three of the
cracks were confirmed to have initiated at a fastener common to the STA
1640 fuselage frame web and intercostal tee clip at stringer 14, on the
left side. The fuselage frame web cracking is attributed to fatigue
caused by flight loads and fuselage pressurization with higher than
predicted stresses. This condition, if not addressed, could result in
reduced structural integrity of the airplane.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed the following service information.
     Aviation Partners Boeing (APB) Alert Service Bulletin
AP757-53-002, Revision 2, dated April 11, 2019.
     Boeing Alert Requirements Bulletin 757-53A0112 RB, dated
November 16, 2018.
    The service information describes procedures for, depending on
configuration, a general visual inspection for any previous repair,
such as any reinforcing repair or local frame replacement repair,
repetitive open hole HFEC inspections for any crack of the fuselage
frame web fastener holes, on the left and right side of the airplane,
and applicable on-condition actions. On-condition actions include
installation of fasteners and repair. These documents are distinct
since they apply to different airplane models in different
configurations.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

FAA's Determination

    The FAA is proposing this AD because the FAA evaluated all the
relevant information and determined the unsafe condition described
previously is likely to exist or develop in other products of the same
type design.

Proposed AD Requirements

    This proposed AD would require accomplishment of the actions
identified in Boeing Alert Requirements Bulletin 757-53A0112 RB, dated
November 16, 2018, described previously, except for any differences
identified as exceptions in the regulatory text of this proposed AD.
    This proposed AD would also require accomplishment of the actions
identified as ``RC'' (required for compliance) in the Accomplishment
Instructions of APB Alert Service Bulletin AP757-53-002, Revision 2,
dated April 11, 2019, described previously, except for any differences
identified as exceptions in the regulatory text of this proposed AD.
Please note that the initial compliance times for the airplanes
identified in APB Alert Service Bulletin AP757-53-002, Revision 2,
dated April 11, 2019, range from within 500 flight cycles after the
effective date of this AD, to within 16,000 flight cycles after the
installation of the local frame replacement or before 50,000 total
flight cycles, whichever occurs first depending on configuration. The
repetitive intervals range from 5,200 flight cycles to 9,900 flight
cycles, depending on configuration.
    For information on the procedures and compliance times, see Boeing
Alert Requirements Bulletin 757-53A0112 RB, dated November 16, 2018, at
http://www.regulations.gov by searching for and locating Docket No.
FAA-2019-0437.

Explanation of Requirements Bulletin

    The FAA worked in conjunction with industry, under the
Airworthiness Directive Implementation Aviation Rulemaking Committee
(AD ARC), to enhance the AD system. One enhancement is a process for
annotating which steps in the service information are RC with an AD.
Boeing has implemented this RC concept into Boeing service bulletins.
    In an effort to further improve the quality of ADs and AD-related
Boeing service information, a joint process improvement initiative was
worked between the FAA and Boeing. The initiative resulted in the
development of a new process in which the service information more
clearly identifies the actions needed to address the unsafe condition
in the ``Accomplishment Instructions.'' The new process results in a
Boeing Requirements Bulletin, which contains only the actions needed to
address the unsafe condition (i.e., only the RC actions).

Costs of Compliance

    The FAA estimates that this proposed AD affects 475 airplanes of
U.S. registry. The FAA estimates the following costs to comply with
this proposed AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost on U.S.
              Action                    Labor cost        Parts cost     Cost per  product        operators
----------------------------------------------------------------------------------------------------------------
General Visual Inspection........  35 work-hours x $85              $0  $2,975.............  $1,413,125.
                                    per hour = $2,975.

Open Hole HFEC Inspection........  35 work-hours x $85               0  $2,975 per           $1,413,125 per
                                    per hour = $2,975                    inspection cycle.    inspection cycle.
                                    per inspection
                                    cycle.
----------------------------------------------------------------------------------------------------------------

    The FAA estimates the following costs to do any necessary on-
condition fastener installations that would be required. The FAA has no
way of determining the number of aircraft that might need these on-
condition actions:

         Estimated Costs of On-Condition Fastener Installations
------------------------------------------------------------------------
                                                             Cost per
              Labor cost                   Parts cost        product
------------------------------------------------------------------------
1 work-hour x $85 per hour = $85......              $*            $85 *
------------------------------------------------------------------------
* The FAA has received no definitive data that would enable the agency
  to provide cost estimates for the parts cost of the on-condition
  fastener installation specified in this proposed AD.

    The FAA has received no definitive data that would enable the
agency to provide cost estimates for the on-condition repair specified
in this proposed AD.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.
    This proposed AD is issued in accordance with authority delegated
by the Executive Director, Aircraft Certification Service, as
authorized by FAA Order 8000.51C. In accordance with that order,
issuance of ADs is normally a function of the Compliance and
Airworthiness Division, but during this transition period, the
Executive Director has delegated the authority to issue ADs applicable
to transport category airplanes and associated appliances to the
Director of the System Oversight Division.

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

The Boeing Company: Docket No. FAA-2019-0437; Product Identifier
2019-NM-074-AD.

(a) Comments Due Date

    The FAA must receive comments by August 5, 2019.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to The Boeing Company Model 757-200, -200CB, and
-300 series airplanes, certificated in any category, as identified
in Boeing Alert Requirements Bulletin 757-53A0112 RB, dated November
16, 2018.

(d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

(e) Unsafe Condition

    This AD was prompted by reports of cracks in the fuselage frame
web at body station (STA) 1640. The FAA is issuing this AD to
address cracks in the fuselage frame web at STA 1640, which could
result in reduced structural integrity of the airplane.

(f) Compliance

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

(g) Required Actions

    (1) For all airplanes except those identified in paragraph
(g)(2) of this AD: Except as specified by paragraph (h) of this AD,
at the applicable times specified in the ``Compliance'' paragraph of
Boeing Alert Requirements Bulletin 757-53A0112 RB, dated November
16, 2018, do all applicable actions identified in, and in accordance
with, the Accomplishment Instructions of Boeing Alert Requirements
Bulletin 757-53A0112 RB, dated November 16, 2018.

    Note 1 to paragraphs (g)(1) and (g)(2): Guidance for
accomplishing the actions required by this AD can be found in Boeing
Alert Service Bulletin 757-53A0112, dated November 16, 2018, which
is referred to in Boeing Alert Requirements Bulletin 757-53A0112 RB,
dated November 16, 2018.

    (2) For airplanes on which Aviation Partners Boeing (APB)
blended or scimitar winglets are installed in accordance with
Supplemental Type Certificate (STC) ST01518SE: Except as specified
by paragraph (h) of this AD, at the applicable times

specified in paragraph 1.E., ``Compliance'' of APB Alert Service
Bulletin AP757-53-002, Revision 2, dated April 11, 2019, do all
applicable actions identified in, and in accordance with, the
Accomplishment Instructions of Boeing Alert Requirements Bulletin
757-53A0112 RB, dated November 16, 2018.

(h) Exceptions to Service Information Specifications

    (1) For purposes of determining compliance with the requirements
of this AD: Where Boeing Alert Requirements Bulletin 757-53A0112 RB,
dated November 16, 2018, uses the phrase ``the original issue date
of Requirements Bulletin 757-53A0112 RB,'' this AD requires using
``the effective date of this AD,'' except where Boeing Alert
Requirements Bulletin 757-53A0112 RB, dated November 16, 2018, uses
the phrase ``the original issue date of Requirements Bulletin 757-
53A0112 RB'' in a note or flag note.
    (2) Where Boeing Alert Requirements Bulletin 757-53A0112 RB,
dated November 16, 2018, specifies contacting Boeing for repair
instructions or for alternative inspections: This AD requires doing
the repair, or doing the alternative inspections and applicable on-
condition actions using a method approved in accordance with the
procedures specified in paragraph (i) of this AD.
    (3) For purposes of determining compliance with the requirements
of this AD: Where APB Alert Service Bulletin AP757-53-002, Revision
2, dated April 11, 2019, uses the phrase ``the original issue date
of this service bulletin,'' this AD requires using ``the effective
date of this AD,'' except where APB Alert Service Bulletin AP757-53-
002, Revision 2, dated April 11, 2019, uses the phrase ``the
original issue date of this Service Bulletin'' in a note or flag
note.
    (4) Where APB Alert Service Bulletin AP757-53-002, Revision 2,
dated April 11, 2019, specifies contacting Boeing for repair
instructions or for alternative inspections: This AD requires doing
the repair, or doing the alternative inspections and applicable on-
condition actions using a method approved in accordance with the
procedures specified in paragraph (i) of this AD.

(i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Los Angeles ACO Branch, FAA, has the authority
to approve AMOCs for this AD, if requested using the procedures
found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your
request to your principal inspector or local Flight Standards
District Office, as appropriate. If sending information directly to
the manager of the certification office, send it to the attention of
the person identified in paragraph (j)(1) of this AD. Information
may be emailed to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair, modification, or alteration required by this AD
if it is approved by The Boeing Company Organization Designation
Authorization (ODA) that has been authorized by the Manager, Los
Angeles ACO Branch, FAA, to make those findings. To be approved, the
repair method, modification deviation, or alteration deviation must
meet the certification basis of the airplane, and the approval must
specifically refer to this AD.
    (4) Except as specified by paragraph (h) of this AD: For service
information that contains steps that are labeled as Required for
Compliance (RC), the provisions of paragraphs (i)(4)(i) and
(i)(4)(ii) of this AD apply.
    (i) The steps labeled as RC, including substeps under an RC step
and any figures identified in an RC step, must be done to comply
with the AD. If a step or substep is labeled ``RC Exempt,'' then the
RC requirement is removed from that step or substep. An AMOC is
required for any deviations to RC steps, including substeps and
identified figures.
    (ii) Steps not labeled as RC may be deviated from using accepted
methods in accordance with the operator's maintenance or inspection
program without obtaining approval of an AMOC, provided the RC
steps, including substeps and identified figures, can still be done
as specified, and the airplane can be put back in an airworthy
condition.

(j) Related Information

    (1) For more information about this AD, contact Peter Jarzomb,
Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch,
3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-
5234; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>    (2) For Boeing service information identified in this AD,
contact Boeing Commercial Airplanes, Attention: Contractual & Data
Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA
90740-5600; telephone<PHONE_NUMBER>; internet https://www.myboeingfleet.com.
    (3) For Aviation Partners Boeing service information identified
in this AD, contact Aviation Partners Boeing, 2811 South 102nd St.,
Suite 200, Seattle, WA 98168; phone:<PHONE_NUMBER>; fax: 206-767-
3355; email<EMAIL_ADDRESS>internet: http://www.aviationpartnersboeing.com.
    (4) You may view this referenced service information at the FAA,
Transport Standards Branch, 2200 South 216th St., Des Moines, WA.
For information on the availability of this material at the FAA,
call<PHONE_NUMBER>.

    Issued in Des Moines, Washington, on June 10, 2019.
Michael Kaszycki,
Acting Director, System Oversight Division, Aircraft Certification
Service.
[FR Doc. 2019-13047 Filed 6-20-19; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: December 7, 2006 (Volume 71, Number 235)]
[Notices]
[Page 71010-71011]
[DOCID:fr07de06-104]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54818; File No. SR-NYSE-2006-57]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change Amending Rule 180 To Require
Member Organizations To Use the Automated Liability Notification System
of a Registered Clearing Agency

 November 27, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on August 3, 2006, the New
York Stock Exchange LLC (``NYSE'') filed with the Securities and
Exchange Commission (``Commission'') and on November 15, 2006, amended
the proposed rule change described in Items I, II, and III below, which
items have been prepared primarily by the NYSE.\2\ The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested parties.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ The exact text of the NYSE's proposed rule change is set
forth in its filing, which can be found at http://www.nyse.com.

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

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

    The NYSE proposes to amend Rule 180 to mandate that NYSE member
organizations utilize the automated liability notification system of a
clearing agency registered pursuant to Section 17A of the Exchange Act
when issuing liability notifications in connection with certain
securities transactions.

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

    In its filing with the Commission, the NYSE included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The NYSE has prepared summaries, set forth in sections
A, B, and C below, of the most significant aspects of these
statements.\3\
---------------------------------------------------------------------------

    \3\ The Commission has modified portions of the text of the
summaries prepared by the NYSE.
---------------------------------------------------------------------------

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

1. Purpose
    Currently, NYSE's Rule 180 provides that if securities are not
delivered within the required time frame, the party who fails to
deliver is liable for any resulting damages. Rule 180 also requires
that claims for damages must be made promptly. It is industry practice
when one party is owed and has not received securities that are the
subject of a voluntary corporate action for the owed party to send to
the failing counterparty a notice of the liability that will be
attendant with the failure to delver the securities in time for the
owed party to participate in the voluntary corporate action.
    It is also customary in the industry for the failing counterparty
that receives a liability notification either to reject the notice, to
deliver the securities that are the subject of the liability
notification, or to convert or exchange the securities to the
corresponding corporate actions proceeds and deliver the proceeds.
Liability notifications are usually sent by fax directly to the
responsible failing counterparty or to its designees.
    Failing counterparties are subjected to potential liability by
their failure to respond to liability notifications. Failure to respond
typically occurs because of processing errors, such as overlooking the
faxed liability notification or not receiving it all, and because of
the overall lack of centralized control over the process. There is
currently no uniform method of notifying and confirming the
transmission and receipt of liability notifications.
    In response to a need for a reliable and uniform method of
transmitting liability notifications, The Depository Trust Company
(``DTC'') developed the SMART/Track for Corporate Action

Liability Notification Service (SMART/Track''), a web-based system for
the communication of liability notifications that is currently
available to all DTC participants. SMART/Track allows DTC participants
to easily create, send, process, and track corporate action liability
notifications. Email notifications are automatically generated when
liability notifications or replies to liability notifications are sent.
SMART/Track helps reduce the risks, costs, and delays resulting from
the processing errors and missing or inaccurate information frequently
occurring with corporate action liability notifications. It also
provides participants with (1) more timely receipt and distribution of
corporate action liability notifications; (2) a centralized system to
manage and control all liability notifications on all issues; (3)
immediate identification of the security affected by a corporate action
liability notification; and (4) detailed disclosure and clearer
understanding of terms and conditions.
    In response to a petition from the Corporate Actions Division of
the Securities Industry Association urging NYSE to adopt a rule that
would mandate the use of a system that would make uniform the method by
which liability notifications are sent and received, NYSE is proposing
to amend Rule 180. As amended, Rule 180 clarifies that if securities
that were to be delivered pursuant to the rules of a registered
clearing agency are not so delivered, the contract may be closed as
provided by the rules of that clearing agency. If the contracts are not
so closed or if there is a failure to deliver securities which are to
be delivered pursuant to NYSE Rule 176 or 177 and in the absence of any
notice or agreement, the contract shall continue without interest until
the following business day. However, in every such case of non-
delivery, the party not delivering the securities shall be liable for
any damages which accrue thereby.
    Proposed Rule 180 is also being amended to require that when the
parties to a failed contract are both participants in a registered
clearing agency that has an automated service for notifying a failing
party of the liability that will be attendant to a failure to deliver
and the contract was to be settled through the facilities of that
registered clearing agency, the transmission of the liability
notification must be accomplished through the use of the registered
clearing agency's automated liability notification system.\4\
---------------------------------------------------------------------------

    \4\ Currently DTC is the only registered clearing agency
operating an automated liability notification service. At present,
approximately 155 DTC participants are voluntarily using SMART/
Track.
---------------------------------------------------------------------------

2. Statutory Basis
    The statutory basis under the Act for this proposed rule change is
the requirement under Section 6(b)(5) of the Act, which requires, among
other things, that the rules of an exchange are designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to perfect the mechanism of a free
and open market and a national market system, and, in general, to
protect investors and the public interest.\5\
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

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

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

    The NYSE has neither solicited nor received written comments on the
proposed rule change. The NYSE is making the proposed rule change in
part as a response to a petition from the Corporate Actions Dvision of
the Securities Industry Association that the NYSE amend its rules to
mandate that member organizatins use the SMART/Track system.

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

    Within thirty-five 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 ninety 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 change or
    (B) Institute proceedings to determine whether the proposed rule
change 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
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

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

File Number SR-NYSE-2006-57 in 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 Number SR-NYSE-2006-57. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments,

all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Section, 100 F Street,
NE., Washington, DC 20549. Copies of such filings also will be
available for inspection and copying at the principal office of the
NYSE and on the NYSE's Web site, http://www.nyse.com. 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-NYSE-2006-57 and should be
submitted on or before December 28, 2006.

    For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
 [FR Doc. E6-20727 Filed 12-6-06; 8:45 am]

BILLING CODE 8011-01-P