[Federal Register Volume 82, Number 85 (Thursday, May 4, 2017)]
[Notices]
[Pages 20923-20926]
[FR Doc No: 2017-08983]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80558; File No. SR-NASDAQ-2016-120]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing of Amendments No. 1, 2, 3, 4, and 5 and Order Granting
Accelerated Approval of a Proposed Rule Change, as Amended, To
Establish the Third Party Connectivity Service

April 28, 2017.

I. Introduction

    On August 16, 2016, the Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) \1\ of the Securities
Exchange Act of 1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ a
proposed rule change to establish the third party connectivity service.
The proposed rule change was published for comment in the Federal
Register on September 2, 2016.\4\ The Commission received one comment
letter regarding the proposal on September 12, 2016.\5\ Nasdaq
responded to the comment letter on October 4, 2016.\6\ On October 5,
2016, the Commission designated a longer period for Commission action
on the proposed rule change.\7\ Subsequently, the Commission received
three additional comment letters regarding the proposal: One from Virtu
Financial, another from Bats responding to Nasdaq's Letter, and a third
from SIFMA.\8\ On November 30, 2016, the Commission instituted
proceedings to determine whether to approve or disapprove the proposed
rule change.\9\ Thereafter, the Commission received comments from IEX,
SIFMA, KCG Holdings, and Citadel Securities \10\ regarding the proposed
rule change and Nasdaq responded to the comments and filed Amendment
No. 1.\11\ On January 31, 2017, the Exchange filed Amendment No. 2 to
the proposed rule change.\12\ The Commission received two comment
letters one from Bats and another from IEX on the amended proposal.\13\
On April 3, 2017, the Exchange filed Amendment No. 3 to the proposed
rule change.\14\ On April 13, 2017, the Exchange filed Amendment No.
4.\15\ On April 18, 2017, the

Exchange filed Amendment No. 5 to the proposed rule change.\16\ The
Commission is publishing this notice to solicit comment on the proposed
rule change, as amended, and is approving the proposed rule change, as
amended, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ See Securities Exchange Act Release No. 78713 (August 29,
2016), 81 FR 60768 (``Notice'').
    \5\ See letter from Eric Swanson, Esq., General Counsel, Bats
Global Markets, Inc., to Brent J. Fields, Secretary, Commission,
dated September 12, 2016 (``Bats Letter I'').
    \6\ See letter from Jeffrey S. Davis, Vice President and General
Counsel, Nasdaq Stock Market LLC, to Brent J. Fields, Secretary,
Commission, dated October 4, 2016 (``Nasdaq Letter I'').
    \7\ See Securities Exchange Act Release No. 79049, 81 FR 70452
(October 12, 2016).
    \8\ See letters from Douglas A. Cifu, Chief Executive Officer,
Virtu Financial, dated October 6, 2016 (``Virtu Letter''), Eric
Swanson, General Counsel, Bats Global Markets, Inc., dated October
12, 2016 (``Bats Letter II''), and Melissa McGregor, Managing
Director and Associate General Counsel, Securities Industry and
Financial Markets Association (``SIFMA''), dated November 23, 2016
(``SIFMA Letter I''), to Brent J. Fields, Secretary, Commission.
    \9\ See Securities Exchange Act Release No. 79431, 81 FR 87981
(December 6, 2016) (``OIP'').
    \10\ See letters from John Ramsay, Chief Market Policy Officer,
IEX Group, Inc. (``IEX''), dated December 9, 2016 (``IEX Letter
I''), Melissa McGregor, Managing Director and Associate General
Counsel, SIFMA, dated December 20, 2016 (``SIFMA Letter II''), John
A. McCarthy, General Counsel, KCG Holdings, Inc. (``KCG Holdings''),
dated December 23, 2016 (``KCG Letter''), and Adam C. Cooper, senior
Managing Director and Chief Legal Officer, Citadel Securities
(``Citadel''), dated December 27, 2016 (``Citadel Letter''), to
Brent J. Fields, Secretary, Commission.
    \11\ See letter from T. Sean Bennett, Principal Associate
General Counsel, Nasdaq Inc., to Brent J. Fields, Secretary,
Commission, dated January 26, 2017 (``Nasdaq Letter II'').
    \12\ Amendment No. 1 was missing a required exhibit, therefore
it was withdrawn and replaced by Amendment No. 2. See Amendment No.
2. The substance of Amendment No. 1 was the same as the substance of
Amendment No. 2.
    \13\ See letters from Eric Swanson, Esq., General Counsel, Bats
Global Markets, Inc., dated February 6, 2017 (``Bats Letter III'')
and John Ramsay, Chief Market Policy Officer, IEX, dated February
15, 2017 (``IEX Letter II'') to Brent J. Fields, Secretary,
Commission.
    \14\ See Amendment No. 3. Amendment No. 3 amended the filing to
include the Assumption of Liability form.
    \15\ See Amendment No. 4 which was withdrawn and replaced by
Amendment No. 5.
    \16\ See Amendment No. 5. Amendment No. 5 amended the text of
the proposed rule change in response to the comments and withdrew
Amendment No. 4. Amendment No. 4 included the same substantive
changes to the rule change however, it was not properly filed.
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II. Description of the Proposed Rule Change

    The Exchange proposes to adopt the third party connectivity service
that will segregate connectivity to the Exchange and its proprietary
data feeds from connectivity to third party services and data feeds,
including the UTP SIP data feeds.\17\ Nasdaq states that this
segregation is necessary because of increased capacity requirements,
noting recent changes to the Consolidated Tape Association (``CTA'')
and Options Price Reporting Authority (``OPRA'') feeds \18\ as well as
planned changes to the Unlisted Trading Privileges (``UTP'') Plan data
feeds.\19\
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    \17\ Third party services include not only SIP data feeds, but
also data feeds from other exchanges and markets. For example, third
party connectivity will support connectivity to the FINRA/Nasdaq
Trade Reporting Facility, BATS Depth Feeds, and NYSE Feeds. See
Notice, 81 FR at 60769 n.10.
    \18\ See https://www.nyse.com/publicdocs/ctaplan/notifications/traderupdate/CTA%20SIP%201Q16%20Consolidated%20Data%20Operating%20Metrics%20Report.pdf; see also, http://www.opradata.com/specs/opra_bandwidth_apr2016.pdf.
    \19\ The UTP SIP feeds are comprised of a UTP Quote Data Feed
(``UQDF'') and a UTP Trade Data Feed (``UTDF''). The UQDF provides
continuous quotations from all market centers trading Nasdaq-listed
securities. The UTDF provides continuous last sale information from
all market centers trading Nasdaq-listed securities. See http://www.utpplan.com/.
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    The third party connectivity service will be available to non-co-
location and co-location customers and will enable customers to receive
third party market data feeds, including SIP data, and other non-
exchange services independent of Nasdaq proprietary feeds. In the
proposal, Nasdaq stated that customers using 1Gb circuits to connect to
the UTP SIP feeds would need to upgrade to a 10Gb Ultra circuit because
of the increase in bandwidth requirements for the new feeds.\20\
Customers seeking connectivity to the Exchange and its proprietary data
feeds may continue to do so through the existing connectivity options
under Rule 7034(b) and Rule 7051(a).\21\ Customers that do not wish to
subscribe to the third party connectivity service may connect through
an extranet provider or a market data redistributor. The Exchange is
proposing to offer services currently available to direct connectivity
subscribers under Rule 7051 to subscribers to third party connectivity
services because Nasdaq believes they may have the same connectivity
needs as customers of the existing direct connectivity service.\22\
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    \20\ In response to comments, Nasdaq amended the filing to
permit the use of 1Gb Ultra connections and proposed that
subscribers sign an Assumption of Liability form indicating that
they were aware of the risks of using a 1Gb connection and would
hold Nasdaq harmless. See Amendments No. 2 and 3. Nasdaq amended the
proposal again to replace the Assumption of Liability form with the
Capacity Acknowledgement form. See Amendment No. 5.
    \21\ See Notice, 81 FR at 60769.
    \22\ See id.
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    The Exchange proposes to assess fees for the third party
connectivity service. The fee for installation of either a 10Gb Ultra
or 1Gb Ultra third party services co-location or direct connectivity
subscription would be $1,500. The monthly fee for a 10Gb Ultra
connection would be $5,000 and for a 1Gb Ultra connection the fee would
be $2,000.
    The proposal as amended provides that every customer may receive
two third party circuit connections free of charge if used solely to
receive the UTP SIP feeds (i.e., the UTDF and UQDF feeds) (``UTP-only
use'').\23\ The Exchange proposes to provide UTP-only connectivity
beyond the two free connections, for an installation fee of $100 per
connection and an ongoing monthly fee of $100 per connection and will
offer UTP-only connectivity through either a 1Gb Ultra or a 10Gb Ultra
connection.\24\ The Exchange also proposes to allow customers to elect
to receive UTP SIP data through a 1Gb Ultra option in lieu of the 10Gb
Ultra option if the customer acknowledges that the subscriber is aware
of the risks associated with such an election.\25\ Finally, the
Exchange proposes to extend the waiver of the fees from February 28,
2017, through the end of April 2017.
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    \23\ See Amendment No. 5.
    \24\ See Amendment No. 5.
    \25\ See Amendment No. 5. Under the proposal, as amended by
Amendment No. 5, the Exchange replaced the Assumption of Liability
form with a Capacity Acknowledgement form, requiring each subscriber
that elects to use the 1Gb Ultra connectivity to receive UTP-only
data to acknowledge the risks associated with such connectivity.
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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change, as amended, is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to a national
securities exchange. In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(4) of the Act,\26\
which requires that the rules of a national securities exchange provide
for the equitable allocation of reasonable dues, fees, and other
charges among its members and issuers and other persons using its
facilities, Section 6(b)(5) of the Act,\27\ which requires, among other
things, that the rules of a national securities exchange be designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, to protect investors and the public interest, and not to
permit unfair discrimination between customers, issuers, brokers, or
dealers, and Section 6(b)(8) of the Act,\28\ which requires that the
rules of a national securities exchange not impose any burden on
competition not necessary or appropriate in furtherance of the purposes
of the Act.
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    \26\ 15 U.S.C. 78f(b)(4).
    \27\ 15 U.S.C. 78f(b)(5).
    \28\ 15 U.S.C. 78f(b)(8).
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    As noted above, the Commission received ten comment letters from
six commenters on the proposed rule change.\29\ All of the commenters
object to the proposal. The Commission also received two response
letters from Nasdaq: One responding to Bats, the second responding to
IEX, SIFMA, KCG Holdings, and Citadel.\30\ In addition, Nasdaq amended
its proposal to address the concerns raised by commenters.\31\
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    \29\ See supra notes 5, 8, 10, 13.
    \30\ See Nasdaq Letters I and II.
    \31\ See Amendments No. 2, 3 and 5.
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    The commenters raise three main concerns with the proposal. First,
commenters assert that the proposal addresses a matter properly
governed by the UTP Plan, the terms of which require approval of the
proposal by the UTP Operating Committee.\32\ Second, the commenters
assert that Nasdaq would benefit from the proposal to the detriment of
customers seeking access to UTP SIP data because subscribers who wish
to continue to receive the UTP SIP feed would incur additional costs to
receive data that they currently receive in a bundle with Nasdaq
proprietary

data.\33\ Third, the commenters question the need for enhanced
capacity.\34\
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    \32\ The Joint Self-Regulatory Organization Plan Governing the
Collection, Consolidation and Dissemination of Quotation and
Transaction Information for Nasdaq-Listed Securities Traded on
Exchanges on an Unlisted Trading Privileges Basis (``The UTP Plan'')
is administered by its participants through an operating committee
(``UTP Operating Committee'') which is composed of one
representative designated by each participant of the plan. See,
e.g., Sections IV.A., B.3, and IV.C.2 of the UTP Plan, and
Securities Exchange Act Release No. 55647 (April 19, 2007), 72 FR
20891 (April 26, 2007).
    \33\ See e.g., Bats Letter I at 3-5; Bats Letter II at 2-3; Bats
Letter III at 3-4; Virtu Letter at 1-2; SIFMA Letter I at 2-3; IEX
Letter I at 1; SIFMA Letter II at 2; KCG Letter at 2; Citadel Letter
at 2; IEX Letter II at 2.
    \34\ See Bats Letter I at 3-5; Bats Letter II at 2-3; Bats
Letter III at 3-4; Virtu Letter at 1-2; SIFMA Letter I at 2-3; IEX
Letter I at 1; SIFMA Letter II at 2; KCG Letter at 2; Citadel Letter
at 2; IEX Letter II at 2.
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    Commenters argue that the proposal constitutes an access fee for
direct access to UTP data which must be approved by the UTP operating
committee under the UTP Plan.\35\ In addition, according to commenters,
the proposal targets UTP data recipients and extends the scope of the
UTP system to include customer connectivity, because Nasdaq is the sole
provider of direct access to UTP data, and therefore firms seeking
direct access to UTP data would be required to subscribe to and pay for
the proposed third party connectivity service.\36\
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    \35\ See Bats Letter I at 1-2; Bats Letter II at 3-4; Bats
Letter III at 2-3; SIFMA Letter I at 2; IEX Letter I at 1; SIFMA
Letter II at 2; KCG Letter at 3-4; IEX Letter II at 1-2.
    \36\ See e.g., Bats Letter I at 3-5; Bats Letter II at 2-3; Bats
Letter III at 3-4; Virtu Letter at 1-2; SIFMA Letter I at 2-3; IEX
Letter I at 1; SIFMA Letter II at 2; KCG Letter at 2; Citadel Letter
at 2; IEX Letter II at 2.
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    In response, Nasdaq notes that it has controlled the network and
network connectivity without input from the UTP operating committee for
over 25 years,\37\ and that neither the UTP Plan nor the processor
agreement grants the UTP operating committee authority over the network
or network connectivity associated with SIP data.\38\ Nasdaq also
asserts that the proposal does not target UTP data recipients because
UTP SIP data is combined with, and carried on, the same network as data
from other sources.\39\ To further address these concerns, Nasdaq filed
Amendment No. 5.\40\ First, Nasdaq will offer every customer two third
party connections for UTP-only use at no cost.\41\ Second, Nasdaq will
allow customers to select a 1Gb Ultra or 10Gb Ultra port to connect to
SIP data, both for the free connections provided by Nasdaq and for
additional connections to which they subscribe.\42\ Furthermore,
connections for UTP-only use beyond the two free connections will be
available for $100 a month in addition to a $100 installation fee,
significantly below the charge to receive Nasdaq proprietary data.\43\
Subscribers electing to receive UTP-only data using a 1Gb Ultra
connection would be required to complete a Capacity Acknowledgement
form acknowledging in writing the risks associated with such
connectivity, though not relieving Nasdaq of liability.\44\ Nasdaq
believes these changes are responsive to the concerns raised by the
commenters.\45\
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    \37\ See Nasdaq Letter I at 2-4.
    \38\ Nasdaq noted that the UTP Plan does not explicitly address
connectivity fees. See Nasdaq Letter I at 2.
    \39\ See Nasdaq Letter I at 3.
    \40\ See Amendment No. 5.
    \41\ See e.g. Nasdaq Letter II at 2-3; Amendment No. 5.
    \42\ See id.
    \43\ See id.
    \44\ See Exhibit 3 to Amendment No. 5.
    \45\ See Nasdaq Letter II.
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    All commenters challenge the technical necessity of the proposal.
Bats asserts that the proposal is technically unnecessary and merely an
attempt to increase revenues by charging fees for UTP access. More
specifically, Bats argues that Nasdaq SIP bandwidth recommendations are
excessive, inconsistent with current peak UTP message traffic, and much
higher than recommendations for Nasdaq's own proprietary data
products.\46\ Citadel states that ``Nasdaq has failed to provide a
reasonable justification for requiring market participants to purchase
a high bandwidth 10Gb Ultra connection'' to access SIP data.\47\
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    \46\ See Bats Letter I at 3-5; Bats Letter II at 2-3; Bats
Letter III at 3-4. Virtu, SIFMA, KCG Holdings, and IEX agree with
Bats. See, e.g., Virtu Letter at 1-2; SIFMA Letter I at 2-3; IEX
Letter I at 1; SIFMA Letter II at 2; KCG Letter at 2; IEX Letter II
at 2.
    \47\ See Citadel Letter at 2. See also Amendment No. 2 which
amended the filing to permit the use of 1Gb connections.
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    In response, Nasdaq states that it has ``done substantial analysis
to support the recommendation and it believes the recommendation is
consistent with its limited experience with the new Processor.'' \48\
Nasdaq also states that ``[d]uring a one month period (23 trading days)
this summer, Nasdaq observed the new UTP Trade Data binary feed
exceeding a 1G capacity for a 1 microsecond timeframe in 18 of the
trading days. If you add the new UTP Quote Data binary feed to that
same connection, the combined feeds exceed 1G capacity for 1
microsecond timeframe in 23 trading days.'' \49\ In addition, Nasdaq
asserts that the UTP operating committee has ``input into the bandwidth
recommendation'' and could act to lower it further.\50\ Bats responds
stating its views that Nasdaq had not demonstrated that the proposal
was technically necessary, because in Bat's view, using a one
microsecond burst to determine a bandwidth recommendation is misplaced,
as the observed peak is not sustained over a full second.\51\ Bats
states that Nasdaq's bandwidth recommendation reflects the maximum
burst rate capability of the new system rather than the current
capacity requirement.\52\ SIFMA agrees with Bats on this issue, stating
that Nasdaq has not provided any ``reasonable justification for
requiring member firms to use a 10Gb connection to receive SIP data.''
\53\ SIFMA states that there is no compelling necessity, either
technical or otherwise, for creating a separate connection for access
to the SIP data.\54\
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    \48\ See Nasdaq Letter I at 5.
    \49\ See id.
    \50\ See id.
    \51\ See Bats Letter II at 2-3.
    \52\ See id.
    \53\ See SIFMA Letter I at 2.
    \54\ See id.
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    Nasdaq disagrees with these arguments, stating its belief that they
are reckless, because ``there is no disagreement that data feed
requirements have increased significantly, and will continue to do
so.'' \55\ Nasdaq further states that it continues to observe spikes in
the UTP feeds that exceed 1Gb, justifying the 10Gb offering.\56\ Nasdaq
also asserts that the proposal would segregate data for network
resiliency and ensure that connectivity is adequate for intended use.
In addition, Nasdaq states that it developed the isolated the network
carrying the SIP data to reduce potential conflicts of interest arising
from Nasdaq's operation of the Processor and its exchanges.\57\
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    \55\ See Nasdaq Letter II at 2.
    \56\ See id.
    \57\ See Nasdaq Letter II at 3.
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    Nasdaq responded to the comments and amended the filing such that
any customer that wishes to receive only the data from the UTP SIP will
be able receive two UTP-only data connections free of charge via a 1Gb
Ultra or 10Gb Ultra connection.\58\ Additional connections for UTP-only
use will be available for $100 per month with an installation fee of
$100 per port. Nasdaq represents that those costs are significantly
lower than the proposed fees to be assessed for other third party
connectivity and will cover some of the costs associated with providing
the connectivity.\59\ Nasdaq noted that current subscribers to three or
more connections under Rules 7034(b) and 7051 that contain a mix of
Nasdaq proprietary data and UTP data will pay more under the proposal
to receive the same data, however, Nasdaq believes that such a fee
increase is reasonable in light of the costs incurred by the Exchange
in offering separate networks for UTP data feed connectivity and
Nasdaq's proprietary data feed

connectivity, which will assist subscribers with risk management.\60\
Further, Nasdaq removed the requirement that subscribers absolve Nasdaq
of liability if they take a 1Gb Ultra connection.\61\
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    \58\ See Amendment No. 5 p. 6.
    \59\ See Amendment No. 5 p. 7 and 10.
    \60\ See Amendment No. 5.
    \61\ See Amendment No. 5.
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    Nasdaq noted that the UTP Plan does not explicitly address
connectivity fees. As to concerns raised by the commenters that Nasdaq
has not substantiated the need for the third party connectivity
service, Nasdaq noted that the ``UTP Operating Committee has had and
continues to have input into the bandwidth recommendation'' \62\ and
states that Nasdaq lowered the recommendation in response to the
Committee's recommendation and would be ready to lower the
recommendation again if the operating committee were to direct it to do
so.\63\ In addition, as noted above, Nasdaq amended the proposal to
provide two connections for UTP SIP data free of charge and additional
connections at lower fees that reflect some of the costs associated
with providing the connectivity.\64\ The Commission believes that
Nasdaq has adequately addressed the concerns raised by the comments in
its response letters and its amendments to the proposal.\65\
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    \62\ See Nasdaq Letter I at 5.
    \63\ See id.
    \64\ See Nasdaq Letter I and Nasdaq Letter II; Amendment No. 5.
    \65\ See Nasdaq Letter I and Nasdaq Letter II and amendments to
the proposal.
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IV. Solicitation of Comments on the Proposal as Amended

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2016-120 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2016-120. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room on official business
days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing
also will be available for inspection and copying at the principal
office of the Exchange. All comments received will be posted without
change; 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-NASDAQ-2016-120 and should be submitted on or before May 25, 2017.

V. Accelerated Approval of Proposed Rule Change, as Amended

    The Commission finds good cause to approve the proposed rule
change, as amended, prior to the 30th day after the date of publication
of the notice of the amended proposal in the Federal Register. As noted
above, Nasdaq amended the proposal to respond to the concerns raised by
the commenters. Specifically, the Exchange is proposing to offer two
free UTP-only connections via a 1Gb Ultra or 10Gb Ultra port. Nasdaq
also replaced the Assumption of Liability form with a Capacity
Acknowledgement form, such that customers are no longer required to
hold Nasdaq harmless if they choose to take a 1Gb Ultra connection. The
Exchange also proposes to provide additional UTP-only connectivity for
an installation fee of $100 per connection and an ongoing monthly fee
of $100 per connection. Because these changes address concerns raised
by the commenters, the Commission finds good cause for approving the
proposed rule change, as amended, on an accelerated basis, pursuant to
Section 19(b)(2) of the Act.\66\
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    \66\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (SR-NASDAQ-2016-120), as amended, be, and
hereby is, approved.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\67\
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    \67\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-08983 Filed 5-3-17; 8:45 am]
 BILLING CODE 8011-01-P


Delegation of Clean Air Act Authority
What is delegation for 40 CFR Parts 60, 61 and 63 Standards?
After individual NSPS and NESHAPs are promulgated, EPA may implement and enforce the requirements. State and local regulatory agencies often implement and enforce similar requirements by adopting analogous regulations under state or local authority. In addition, Clean Air Act sections 111 and 112 allow EPA to transfer primary implementation and enforcement authority for most of the federal standards to state, local, or tribal regulatory agencies. This transfer of authority is called delegation. Upon delegation of a standard, sources must send any required notifications or reports directly to the delegated agency. The delegated agency may also receive authority to make certain source-specific decisions that reflect flexibility allowed by the standard.
What is delegation for 40 CFR Part 60 Emission Guidelines and Part 62 State/Federal Plans?
Though 111(d)/129 delegations are similar to NSPS and NESHAP delegations, a primary difference is once individual Part 60 Emission Guidelines are promulgated, EPA or State and local regulatory agencies need a Federal Plan or State Plan approved in Part 62 to implement and enforce the requirements. EPA strongly encourages state and local agencies in states that do not submit approvable state plans to request delegation of the federal plan so that they can have primary responsibility.
What authorities does an agency receive with delegation?
The delegated agency becomes the primary implementation and enforcement authority for the delegated standard. In addition, the NSPS and NESHAPs programs provide some flexibility from the promulgated requirements in a number of ways, as specified in individual rules, General Provisions regulations, and the statute itself. Examples of authorities that may be delegated to State, local, or tribal agencies include the ability to issue or approve certain applicability determinations, compliance schedule extensions, or alternatives to testing or monitoring requirements. The level of EPA review for this flexibility is reflected in EPA's delegations of authority. The method for application and approval of this flexibility varies as specified in guidance or regulations.
How does delegation occur under 40 CFR Parts 60, 61 and 63 Standards?
In general, a state, local, or tribal agency must demonstrate adequate legal authorities and resources to receive delegation of federal standards. EPA Region 9 typically delegates NSPS and NESHAPs to state, local, or tribal agencies by letter. The delegation action is subsequently announced in the Federal Register and codified into 40 CFR 60.4(b), 61.04(b), or 63.99, as appropriate. Letters of delegation are posted if available in digital format.
How does delegation occur under 40 CFR Part 60 Emissions Guidelines and Part 62 State/Federal Plans?
There are two mechanisms for transferring implementation authority to State or Tribal agencies: (1) EPA approval of a State Plan; and (2) if a State does not submit or obtain approval of its own plan, EPA delegation to a State of the authority to implement certain portions of the Federal plan to the extent appropriate in a Memorandum of Agreement. The delegation action is approved in the Federal Register and codified into 40 CFR Part 62.
What authorities are not delegated?
In general, EPA does not delegate to state or local agencies the authority to make decisions that are likely to be nationally significant, or alter the stringency of the underlying standard. See Specific Authorities Retained by EPA.
Specific Authorities Retained By EPA
In general, EPA does not delegate to state or local agencies the authority to make decisions that are likely to be nationally significant, or alter the stringency of the underlying standards.
As additional assurance of national consistency, state and local agencies must send to the EPA Region's Air Enforcement program a copy of any written decisions made pursuant to the following delegated authorities:
 Applicability determinations that state a source is not subject to a rule or requirement;
 Approvals or determination of construction, reconstruction or modification;
 Minor or intermediate site-specific changes to test methods or monitoring requirements; or
 Site-specific changes or waivers of performance testing requirements.
40 CFR Part 60 NSPS
The following provisions of Subpart A are not delegated:
 Sections 60.4(b),
 60.8(b),
 60.9,
 60.11(b),
 60.11(e),
 60.13(a),
 60.13(d)(2),
 60.13(g), and
 60.13(i).
40 CFR Part 60 Emission Guidelines and Part 62 Federal and State Plans
40 CFR Part 60 Subpart B and Subpart C discuss the Adoption and Submittal of State Plans for Designated Facilities and the Emission Guidelines and Compliance Times. They have not been delegated to state and local agencies. They describe requirements for states to adopt and submit plans for designated facilities. These State Plans must be reviewed and approved by EPA. The authority to approve State Plans cannot be delegated to states.  Each Emission Guideline under 40 CFR Part 60 and each Federal Plan under Part 62 lists specific authorities retained by EPA.  Please refer to each one for more information.
40 CFR Part 61 NESHAP
The following provisions of Subpart A are not delegated:
 Sections 61.04(b),
 61.04(c),
 61.05(c),
 61.11,
 61.12(d),
 61.13(h)(1)(ii),
 61.14(d),
 61.14(g)(1)(ii), and
 61.16.
40 CFR Part 63 NESHAP for Source Categories (MACT Standards)
The following provisions of Subpart A are not delegated:
 Section 63.6(g), Approval of Alternative Non-Opacity Emission Standards,
 Section 63.6(h)(9), Approval of Alternative Opacity Standards,
 Sections 63.7(e)(2)(ii) and (f), Approval of Major Alternatives to Test Methods
 Section 63.8(f), Approval of Major Alternatives to Monitoring,
 Section 63.10(f), Approval of Major Alternatives to Recordkeeping and Reporting
 plus any other provisions specifically identified as non-delegable in each individual standard.
Subparts B, C, D, and E are not delegated to state and local agencies


[Federal Register Volume 75, Number 92 (Thursday, May 13, 2010)]
[Proposed Rules]
[Pages 26898-26904]
[FR Doc No: 2010-11139]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 81

[EPA-R10-OAR-2008-0391; FRL-9149-5]

Determination of Attainment for PM-10; Fort Hall PM-10
Nonattainment Area, Idaho

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing under the Clean Air Act (CAA) to determine
that the Fort Hall PM-10 nonattainment area on the Fort Hall Indian
Reservation in Idaho has attained the National Ambient Air Quality
Standards (NAAQS) for particulate matter with an aerodynamic diameter
of less than or equal to 10 microns (PM-10). EPA's proposed finding
that the Fort Hall PM-10 nonattainment area has attained the 24-hour
PM-10 NAAQS is based on EPA's review of complete, quality-assured
monitored air quality data for the three-year period ending December
31, 2009. Preliminary data for 2010 indicate that the area continues to
attain the standard.
    EPA's proposed determination of attainment is not equivalent to a
proposed redesignation to attainment under CAA section 107(d)(3). If
this proposal is finalized, the designation status for the Fort Hall
PM-10 nonattainment area would remain moderate nonattainment until such
time as the area is redesignated to attainment as provided in CAA
section 107(d)(3).

DATES: Written comments must be received on or before June 14, 2010.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R10-
OAR-2008-0391, by one of the following methods:
    A. http://www.regulations.gov. Follow the on-line instructions for
submitting comments.
    B. E- Mail<EMAIL_ADDRESS>    C. Mail: Donna Deneen, U.S. Environmental Protection Agency, Region
10, 1200 Sixth Avenue, Suite 900, Mail Stop: AWT-107, Seattle, WA
98101.
    D. Hand Delivery: U.S. Environmental Protection Agency, Region 10,
Attn: Donna Deneen (AWT-107), 1200 Sixth Avenue, Suite 900, Seattle,
Washington 98101, 9th Floor. Such deliveries are only accepted during
normal hours of operation, and special arrangements should be made for
deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-R10-OAR-
2008-0391. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
http://www.regulations.gov, including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site
is an ``anonymous access'' system, which means EPA will not know your
identity or contact information unless you provide it in the body of
your comment.

If you send an e-mail comment directly to EPA without going through
http://www.regulations.gov, your e-mail address will be automatically
captured and included as part of the comment that is placed in the
public docket and made available on the Internet. If you submit an
electronic comment, EPA recommends that you include your name and other
contact information in the body of your comment and with any disk or
CD-ROM you submit. If EPA cannot read your comment due to technical
difficulties and cannot contact you for clarification, EPA may not be
able to consider your comment. Electronic files should avoid the use of
special characters, any form of encryption, and be free of any defects
or viruses.
    Docket: All documents in the electronic docket are listed in the
http://www.regulations.gov index. Although listed in the index, some
information, i.e., CBI or other information whose disclosure is
restricted by statute, is not publicly available. Certain other
material, such as copyrighted material, is not placed on the Internet
and will be publicly available only in hard copy form. Publicly
available docket materials are available either electronically in
http://www.regulations.gov or in hard copy during normal business hours
at the Office of Air, Waste and Toxics, U.S. Environmental Protection
Agency, Region 10, 1200 Sixth Avenue, Suite 900, Seattle, Washington
98101.

FOR FURTHER INFORMATION CONTACT: Donna Deneen,<PHONE_NUMBER> or
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this notice, the words ``we'',
``us'', or ``our'' means the Environmental Protection Agency (EPA).

Table of Contents

I. Background
    A. PM-10 Standard
    B. Fort Hall PM-10 Nonattainment Area
    C. PM-10 Planning in the Fort Hall PM-10 Nonattainment Area
    D. Attainment Date for the Fort Hall PM-10 Nonattainment Area
    E. Reclassification Upon Failure to Attain
    F. Portneuf Environmental Council (PEC) Lawsuit
    G. Sierra Club Lawsuit
II. Proposed Attainment Determination
    A. What are the Requirements for Attainment Determinations?
    B. What Monitoring Data are Available for the Area?
    C. What Do the Air Quality Data Show for the Area?
    D. Determination of Attainment
III. Proposed Action
    A. Proposed Determination of Attainment
    B. Withdrawal of June 19, 1998 Proposal
IV. Statutory and Executive Order Reviews

I. Background

A. PM-10 Standard

    The NAAQS are levels for certain ambient air pollutants set by EPA
to protect public health and welfare. PM-10, or particulate matter with
an aerodynamic diameter less than or equal to a nominal 10 micrometers,
is among the ambient air pollutants for which EPA has established
health-based standards. On July 1, 1987 (52 FR 24634), EPA promulgated
two primary standards for PM-10: a 24-hour standard of 150 micrograms
per cubic meter ([mu]g/m\3\) and an annual PM-10 standard of 50 [mu]g/
m\3\. EPA also promulgated secondary PM-10 standards that were
identical to the primary standards.
    Effective December 18, 2006, EPA revoked the annual PM-10 standard
but retained the 24-hour PM-10 standard. 71 FR 61144 (October 17,
2006). The 24-hour PM-10 standard is attained when the expected number
of days per calendar year with a 24-hour concentration above 154 [mu]g/
m\3\, as determined in accordance with 40 CFR part 50, appendix K, is
equal to or less than one.\1\ 40 CFR 50.6 and 40 CFR part 50, appendix
K.
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    \1\ An exceedance is defined as a daily value that is above the
level of the 24-hour standard (150 [mu]g/m\3\) after rounding to the
nearest 10 [mu]g/m\3\ (i.e. values ending in 5 or greater are to be
rounded up). Thus, a recorded value of 154 [mu]g/m\3\ would not be
an exceedance since it would be rounded to 150[mu]/m\3\ whereas a
recorded value of 155 [mu]g/m\3\ would be an exceedance since it
would be rounded to 160 [mu]/m\3\. See 40 CFR part 50, appendix K,
section 1.0.
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B. Fort Hall PM-10 Nonattainment Area

    On August 7, 1987 (52 FR 29383), EPA identified a number of areas
across the country as PM-10 ``Group I'' areas of concern, that is,
areas with a 95% or greater likelihood of violating the PM-10 NAAQS and
requiring substantial planning efforts. What is now known as the Fort
Hall PM-10 nonattainment area was originally part of a Group I area
called ``Power-Bannock Counties (Pocatello).'' In accordance with
section 188(a) and (c)(1) of the CAA, at the time of designation all
PM-10 nonattainment areas were initially classified as ``moderate'' by
operation of law, with an attainment date of December 31, 1994. See
also 56 FR 11101 (March 15, 1991).
    This original nonattainment area has gone through two boundary
changes. First, on June 12, 1995, EPA corrected the ``Power-Bannock
Counties (Pocatello)'' boundaries to more closely represent the air
shed in which the City of Pocatello is located. 61 FR 29667. Second, on
November 5, 1998, EPA granted a request from the State of Idaho to
divide the nonattainment area (as corrected) into two areas separated
by the Fort Hall Indian Reservation boundary. 63 FR 59722. The area
consisting of land under State jurisdiction that was previously part of
the Power-Bannock Counties nonattainment area was renamed as the
Portneuf Valley nonattainment area. The Portneuf Valley nonattainment
area was redesignated to attainment on July 13, 2006 (71 FR 39574). The
area consisting of land within the exterior boundary of the Fort Hall
Indian Reservation that was previously part of the Power-Bannock
Counties nonattainment area is now identified as the Fort Hall PM-10
nonattainment area. See 40 CFR 81.313. Today's proposal applies only to
the Fort Hall PM-10 nonattainment area.

C. PM-10 Planning in the Fort Hall PM-10 Nonattainment Area

    In the early 1990s, EPA, the Shoshone-Bannock Tribes (Tribes), and
the Idaho Department of Environmental Quality (IDEQ) began to work
together to prepare the technical elements needed to bring the area
into attainment with the PM-10 NAAQS. Air quality and other information
from the 1980s and 1990s indicated that the elemental phosphorous
facility located on fee lands within the Fort Hall PM-10 nonattainment
area and owned and operated by FMC Corporation (FMC facility) \2\ was
the primary cause of the PM-10 nonattainment problem in the Fort Hall
nonattainment area. To address this nonattainment problem, EPA
promulgated a Federal Implementation Plan for PM-10 emissions from the
FMC facility in August 2000 (FMC FIP) under the authority of section
301(a) and (d)(4) of the CAA and 40 CFR 49.11(a). See 65 FR 51412
(August 23, 2000). The FMC FIP contained PM-10 emission limits and work
practice, recordkeeping, and reporting requirements designed to reduce
PM-10 emissions from the FMC facility to a level that would attain the
PM-10 standard.
---------------------------------------------------------------------------

    \2\ The property on which the FMC was located is now owned by
FMC Idaho, LLC (FMC).
---------------------------------------------------------------------------

    In December 2001, after operating under the FMC FIP for
approximately one year, the FMC facility ceased producing elemental
phosphorous from phosphate ore. The buildings and process equipment on
the property have since been decontaminated and demolished and the
construction debris has been taken off-site. Removal of all point
sources identified in the FMC FIP was completed in November 2006. The
storage piles specifically identified in

the FIP have been taken off-site or placed below grade and planted
over. In a letter dated November 1, 2007, EPA advised the Shoshone-
Bannock Tribes of EPA's view that there no longer are any sources
subject to the FMC FIP because the FMC FIP applies to the owner or
operator of an ``elemental phosphorous facility'' and because there is
no longer an ``elemental phosphorous facility'' located on the FMC
property. All sources in the Fort Hall nonattainment area, however, are
subject to the Federal Air Rules for Reservations (FARR) for Indian
reservations in Idaho, Oregon, and Washington, which are air quality
regulations designed to protect health and welfare on Indian
reservations located in the Pacific Northwest, including the Fort Hall
Indian Reservation. See 67 FR 18074 (April 8, 2005) (codified at 40 CFR
49.121 to 49.139).

D. Attainment Date for the Fort Hall PM-10 Nonattainment Area

    As discussed above, the original attainment date for the Fort Hall
nonattainment area was December 31, 1994. Section 188(d) authorizes the
EPA Administrator to grant up to two one-year extensions of the
moderate area attainment date, provided certain requirements are met.
Because the area was not attaining the PM-10 NAAQS at the time of the
December 31, 1994 attainment date, and finding that the area met the
requirements for an extension, EPA granted a request for a one-year
extension and extended the attainment date to December 31, 1995. See 61
FR 20730 (May 8, 1996). The area continued to violate the 24-hour PM-10
standard through December 31, 1995. After finding that the area met the
requirements for a second extension, EPA granted a second one-year
extension of the attainment date to December 31, 1996. See 61 FR 66602
(December 18, 1996).\3\
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    \3\ At the time of the extensions, the Fort Hall PM-10
nonattainment area was still part of the Power-Bannock County
nonattainment area.
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E. Reclassification Upon Failure to Attain

    Section 188(b)(2) of the CAA requires EPA to determine within six
months of the applicable attainment date whether PM-10 nonattainment
areas attained the PM-10 NAAQS by the attainment date. Under Section
188(b)(2)(A), a moderate PM-10 nonattainment area is reclassified as
serious by operation of law if EPA finds that the area was not in
attainment by the applicable attainment date. Section 188(b)(2)(B) of
the CAA states that EPA shall publish a notice in the Federal Register
within six months after the applicable attainment date identifying
those areas that failed to attain the standard and that have been
reclassified to serious by operation of law.

F. Portneuf Environmental Council (PEC) Lawsuit

    On November 20, 1997, the Portneuf Environmental Council (PEC)
filed a lawsuit against EPA, alleging that EPA had failed to make a
finding regarding whether the Fort Hall PM-10 nonattainment area \4\
had attained the PM-10 NAAQS by the December 31, 1996, extended
attainment date, as required by CAA section 188(b)(2)(A). Subsequently,
EPA published a Federal Register notice on June 18, 1998, in which EPA
proposed to find that the Fort Hall PM-10 nonattainment area had failed
to attain the PM-10 NAAQS by the applicable attainment date of December
31, 1996. See 63 FR 33605 (June 19, 1998).
---------------------------------------------------------------------------

    \4\ At the time of the lawsuit, the Fort Hall PM-10
nonattainment area was still part of the Power-Bannock County
nonattainment area.
---------------------------------------------------------------------------

    As part of a subsequent settlement with PEC, PEC agreed to dismiss
its lawsuit against EPA provided that EPA promulgated no later than
July 31, 2000 a Federal Implementation Plan to control PM-10 in the
Fort Hall PM-10 nonattainment area. EPA fulfilled its obligation to
promulgate the FMC FIP, and did not take final action on the June 19,
1998 proposal regarding the attainment status for the area.

G. Sierra Club Lawsuit

    On September 14, 2000, Sierra Club and Group Against Smog and
Pollution, Inc. (jointly referred to as ``Sierra Club'') filed suit
against EPA alleging that EPA had failed to carry out its statutory
obligations with respect to certain nonattainment areas throughout the
United States. The complaint included a claim that EPA had failed to
make a finding regarding whether the Fort Hall nonattainment area had
attained the PM-10 NAAQS by the extended attainment date of December
31, 1996, as required by CAA section 188(b)(2)(A). The Sierra Club
subsequently agreed in a Consent Decree in settlement of its lawsuit to
give EPA until July 31, 2004 to determine whether the Fort Hall area
had attained the PM-10 standard. The Consent Decree provided that if
EPA was not able to determine that the Fort Hall area had attained the
PM-10 standard by July 31, 2004, EPA had to determine that the area had
not attained the standard by December 31, 1996 (the extended attainment
date for the area), which would result in reclassification of the area
to serious nonattainment. EPA expected that the FMC FIP, which was
promulgated just prior to the Sierra Club's lawsuit, would be effective
in bringing the Fort Hall PM-10 nonattainment area into attainment of
the PM-10 NAAQS.
    Subsequent amendments to the Consent Decree gave EPA additional
time to make a determination of attainment or nonattainment for the
area. Under the terms of the most recent amendment to the Consent
Decree with Sierra Club, EPA is required to sign a notice for
publication in the Federal Register by August 31, 2010, containing
either EPA's final determination that the Fort Hall nonattainment area
has attained the PM-10 NAAQS or EPA's final determination that the area
did not attain the PM-10 NAAQS by the applicable attainment date of
December 31, 1996, and identifying the appropriate reclassification of
the area pursuant to 42 U.S.C. 7513(b)(2)(A).

II. Proposed Attainment Determination

A. What are the requirements for attainment determinations?

    Generally, EPA determines whether an area's air quality is meeting
the PM-10 NAAQS based upon complete, quality-assured data gathered at
established state and local air monitoring stations (SLAMS) and
national air monitoring stations (NAMS) in the nonattainment areas and
entered into the EPA Air Quality System (AQS). Data from air monitors
operated by state/local/tribal agencies in compliance with EPA
monitoring requirements must be submitted to AQS. EPA relies primarily
on data in AQS when determining the attainment status of an area. See
40 CFR 50.6; 40 CFR part 50, appendix J; 40 CFR part 53; 40 CFR part
58, appendix A. EPA will also consider air quality data from other air
monitoring stations in the nonattainment area provided that the
stations meet the federal monitoring requirements for SLAMS, including
the quality assurance and quality control criteria in 40 CFR part 58,
appendix A. 40 CFR 58.14 (2006) and 58.20 (2007); \5\ 71 FR 61236,
61242 (October 17, 2006). All valid data are reviewed to determine the
area's air quality status in

accordance with 40 CFR part 50, appendix K.
---------------------------------------------------------------------------

    \5\ EPA promulgated amendments to the ambient air monitoring
regulations in 40 CFR parts 53 and 58 on October 17, 2006. See 71 FR
61236. The requirements for Special Purpose Monitors were revised
and moved from 40 CFR 58.14 to 40 CFR 58.20.
---------------------------------------------------------------------------

    Attainment of the 24-hour PM-10 standard is determined by
calculating the expected number of exceedances of the standard in a
year. The 24-hour standard is attained when the expected exceedances
averaged over a three-year period is less than or equal to one.
Generally, three consecutive years of air quality data are required to
show attainment of the 24-hour PM-10 standard. See 40 CFR part 50 and
appendix K.\6\
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    \6\ Because the annual PM-10 standard was revoked effective
December 18, 2006, see 71 FR 61144 (October 17, 2006), this notice
discusses only attainment of the 24-hour PM-10 standard.
---------------------------------------------------------------------------

B. What monitoring data are available for the area?

    In 1994 the Tribes requested and EPA granted the Tribes program
support grant funds to enable the Tribes to establish their own
monitoring station to collect ambient air quality data representative
of conditions on the Fort Hall Indian Reservation and to generate data
to support Tribal air quality planning efforts.\7\ The first Tribal
monitor, located at the ``Sho-Ban site,'' was a Federal Reference
Monitor (FRM) that became operational in February 1995. The Sho-Ban
site was located approximately 100 feet north of the FMC facility
across a frontage road. Because of operational problems, this monitor
did not begin to collect valid data until October 1996. Also in October
1996, the Tribes initiated monitoring at two new sites. The ``primary
site'' contained an FRM located approximately 100 feet north of the FMC
facility across the frontage road, approximately 600 feet east of the
Sho-Ban site. There were two filter-based FRMs located at the primary
site: The primary FRM and a co-located audit FRM for quality assurance
purposes. Both the Sho-Ban and primary sites were located in the
general area of expected maximum concentrations of PM-10 in the ambient
air at the time the FMC facility was in operation. The ``background
site'' was an FRM site located approximately one and one-half miles
southwest of the FMC facility, upwind of the predominant wind direction
from FMC. All three monitoring sites met EPA SLAMS network design and
siting requirements set forth at 40 CFR part 58, appendices D and E.
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    \7\ Prior to this time, the Tribes relied on data from State-
operated samplers on State lands for area designations and
classifications.
---------------------------------------------------------------------------

    Because the data reported at the background site over a number of
years remained constant, with no discernible trends, both the Tribes
and EPA determined that background PM-10 concentrations were adequately
characterized. Therefore, to conserve resources, the Tribes and EPA
agreed to terminate operation of the FRM at the background site in
early 2000. Sampling ended at the Sho-Ban site at the end of March 2003
because the FMC facility had ceased production and, given the close
proximity of the Sho-Ban and primary monitoring sites, the
comparability of the data between the two sites, and a continued
interest in conserving resources, a single monitoring location was
considered sufficient to identify any remaining air quality concerns in
the area. The primary FRM and the audit FRM at the primary site
remained in operation through December 31, 2009, with the primary FRM
operating once every three days and the co-located audit FRM operating
once every six days, or once every three days, depending on whether or
not additional co-located data were needed to meet certain federal
monitoring requirements.\8\
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    \8\ At times a higher sampling frequency may be needed in order
to produce approximately 25 valid sample pairs per year. 40 CFR part
58 Appendix A, section <IP_ADDRESS>.
---------------------------------------------------------------------------

    In addition to the primary and audit filter-based FRMs, from
November 1998 through September 2008, a continuous PM-10 sampler,
called a Tapered Element Oscillating Microbalance monitor (TEOM), also
operated at the primary site. Whereas it generally takes a minimum of
several weeks to obtain PM-10 data from a filter-based FRM,\9\ a TEOM
monitors PM-10 levels on a continuous basis and provides real-time data
on PM-10 levels in an area. This TEOM monitor was shut down in
September 2008 because of a bad pump and other operational problems and
replaced by another type of continuous sampler, called a Beta
Attenuation Mass monitor (BAM). The BAM was installed at the primary
site at the beginning of 2009, but because of start-up problems, did
not begin to collect valid data until the fall of 2009.
---------------------------------------------------------------------------

    \9\ FRMs are manual samplers that pull air through a filter for
24 hours (midnight to midnight). The filters are then weighed in a
lab and a PM concentration is calculated based on the mass increase
of the filter and the volume of air drawn through it.
---------------------------------------------------------------------------

    In 2008, an additional filter-based PM-10 monitor began operating
in the Fort Hall PM-10 nonattainment area. This FRM monitor operates at
the ``Ballard site,'' which is located approximately 6 miles north of
the primary site and is closer than the primary site to the population
center of the Fort Hall PM-10 nonattainment area. The Ballard site was
established because of concerns that the primary site property might no
longer remain available for monitoring. With those concerns in mind, a
saturation study was conducted by the Tribes and EPA prior to the
establishment of the Ballard site to determine the correlation of
monitoring data between the primary site and several potential
alternate sites. The potential alternate sites represented locations
that were as close to the primary site as possible and to which the
Tribes had access. Temporary monitors were placed at these locations
and operated in the late summer and early fall of 2006. The study
showed that there was good correlation of data between the primary site
and several of the potential alternate site locations and that the
Ballard site was particularly desirable because a site pad and deck
were already established at that location.\10\ In light of the results
from the study, the relative proximity of the Ballard site to the
population center of the nonattainment area, and the lack of access to
property closer to the primary site, the Ballard site was selected as
an alternate site to the primary site. On April 21, 2008, the primary
FRM at the Ballard site became operational and continues to collect
data on a once-every-three-day schedule.\11\ Based on a review of
recent AQS data from April 2008 through January 2010 showing good
correlation between the Ballard site and the primary site, the fact
that the Ballard site is closer in proximity to the population center
of the nonattainment area than the primary site, and the fact that the
FMC facility is no longer operating as an elemental phosphorous
facility, EPA believes that the Ballard monitoring site is
representative of PM-10 levels in the Fort Hall nonattainment area.
---------------------------------------------------------------------------

    \10\ Memo from Chris Hall to Donna Deneen, dated January 19,
2007, regarding Fort Hall PM-10 Saturation Study.
    \11\ AQS raw data report for the Ballard site for 2010.
---------------------------------------------------------------------------

    Data collection at the primary site ended on December 31, 2009
because the property owner would not renew the lease. At the request of
the property owner, all monitoring and associated equipment was removed
from the primary site, and beginning on January 1, 2010, the Ballard
site became the only PM-10 monitoring site in the nonattainment area.
To meet monitoring network requirements, one of the FRMs from the
primary site was moved to the Ballard site and began operating as an
audit FRM in January 2010. The BAM from the primary site was moved to
the Ballard site and began operating in

April 2010. PM-10 monitoring for the Fort Hall PM-10 nonattainment area
continues at the Ballard site, with the PM-10 BAM operating daily, and
both the primary FRM and the audit FRM collecting data on a once-every-
three-day schedule.

C. What do the air quality data show for the area?

    The number of PM-10 exceedances in the Fort Hall PM-10
nonattainment area has dropped substantially since the area was
designated nonattainment in the early 1990s. There were 16 exceedances
recorded at the primary site in 1997, the first full year of monitoring
for the area. The number of exceedances had decreased to four in 1999,
when FMC began installing some control equipment and implementing some
emission reduction measures in anticipation of promulgation of the FMC
FIP.\12\ By 2001, the first full year the FMC FIP was in place and the
final year the FMC facility was fully operational, there were no
exceedances recorded on the FRMs and three exceedances recorded on the
TEOM. Beginning in 2002, the first year after the FMC facility ceased
production, the FRMs at the primary site reported one exceedance of the
24-hour PM-10 standard in 2002 and one in 2006.\13\ The TEOM at the
primary site, which operated every day, recorded one exceedance per
year in each of 2002, 2004, 2005, and 2006, and three in 2008. All of
the exceedances that have been recorded since FMC ceased production of
elemental phosphorous in December 2001 occurred on days with sustained
winds of more than 20 mph for several hours. The exceedances in the
relevant data years for this determination are discussed more fully in
section D below.
---------------------------------------------------------------------------

    \12\ Table dated April 26, 2010, summarizing the number of
exceedances of the 24-hour PM-10 standard in the Fort Hall
nonattainment area since 1997.
    \13\ Although EPA believes the data collected at the FRMs and
TEOM from 2004 through 2006 are generally indicative of air quality
in the Fort Hall PM-10 nonattainment area, they did not meet all
quality assurance/quality control (QA/QC) requirements and therefore
may not be used to determine whether or not the Fort Hall area is in
attainment with the 24-hour PM-10 standard. See 40 CFR 58.11(a) and
58.20; 71 FR 61242 (October 17, 2006); see also 40 CFR 58.14 (2006).
---------------------------------------------------------------------------

D. Determination of Attainment

    As discussed above, section 188(b)(2) of the CAA requires EPA to
determine within six months of the applicable attainment date whether
the Fort Hall PM-10 nonattainment area attained the PM-10 NAAQS by the
extended attainment date of December 31, 1996. Under the terms of the
most recent amendment to the Consent Decree with Sierra Club, EPA is
required to sign a notice for publication in the Federal Register by
August 31, 2010 containing either EPA's final determination that the
Fort Hall PM-10 nonattainment area has attained the PM-10 NAAQS or
EPA's final determination as to whether the area attained or failed to
attain the PM-10 NAAQS by the extended attainment date of December 31,
1996 and identifying the appropriate reclassification of the area
pursuant to 42 U.S.C. 7513(b)(2)(A).
    EPA is proposing to determine that the area has attained the PM-10
standard based on the most recent three years of complete, quality-
assured data for 2007-2009. Preliminary data for 2010 also indicate
that the area continues to attain the standard. EPA regulations require
that a determination of attainment be based on three consecutive years
of data that meet the quality assurance and quality control
requirements of 40 CFR part 58, appendix A. EPA has confirmed that
complete air quality data in AQS for 2007, 2008, and 2009 meet quality
assurance and quality control requirements for use in determining
attainment with the 24-hour PM-10 standard.
    For calendar years 2007 through 2009, the data recorded for the
Fort Hall PM-10 nonattainment area show generally low levels of PM-10,
with 99 percent of the daily average concentrations below 83 [mu]g/m\3\
(less than two-thirds of the standard) and annual average PM-10
concentrations of 23 [mu]g/m\3\, 28 [mu]g/m\3\ and 19 [mu]g/m\3\ for
2007, 2008, and 2009, respectively.\14\ There were no exceedances of
the standard in 2007, three exceedances in 2008, and no exceedances in
2009.
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    \14\ AQS PM-10 raw data report for primary site and Ballard
site, 2007-2009.
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    There were no exceedances of the PM-10 standard measured at the
primary site filter-based FRM monitors or at the Ballard site. Table 1
identifies all the monitors that were operating in the Fort Hall
nonattainment area during the 2007 through 2009 period, and the number
of PM-10 exceedances recorded at each.

  Table 1--Number of Exceedances of the 24-Hour PM-10 Standard in the Fort Hall PM-10 Nonattainment Area From January 1, 2007 Through December 31, 2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Primary site--      Primary site--
                                                          Primary FRM          Audit FRM        Primary site--    Primary site-- BAM  Ballard site-- FRM
                                                         160770011 \a\       160770011 \a\    TEOM 160770011 \b\     160770011 \b\       160050020 \a\
                        Year                           (Data from 01/01/   (Data from 01/01/   (Data from 01/01/   (Data from 09/01/   (Data from 04/21/
                                                      2007 through 12/31/ 2007 through 12/31/ 2007 through 09/23/ 2009 through 12/31/ 2008 through 12/31/
                                                             2009)               2009)               2008)               2009)               2009)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2007................................................                   0                   0                   0                  NA                  NA
2008................................................                   0                   0               \c\ 3                  NA                   0
2009................................................                   0                   0                   0                   0                   0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Every-three-day sampling.
\b\ Continuous monitor.
\c\ Hourly wind speeds of more than 26 mph and sustained hourly wind speeds of more than 20 mph for several hours on the day of each exceedance.

    The calculated number of expected exceedances of the PM-10 standard
(in days per year) for 2007-2009 is 0.0 for the primary site FRMs, 1.0
\15\ for the primary site TEOM and BAM,\16\ and 0.0 for the Ballard
site FRM. Because neither the primary site TEOM and BAM data nor the
Ballard site FRM data are complete for 2007-2009,\17\ the data from
these monitors may not be used for a determination of attainment. The
data from these monitors may, however, be

used to determine that an area has not attained the standard, a showing
that is less stringent than a showing that an area has attained the
standard. In this case, neither the expected exceedance rate of 1.0
(for the primary site TEOM and BAM) nor the exceedance rate of 0.0 (for
Ballard site FRM) show that the area has failed to attain the PM-10
standard,
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    \15\ The value of 1.0 accounts for the three exceedances that
occurred in 2008.
    \16\ The TEOM and BAM data are combined; the data for these two
monitors was submitted under the same code in AQS and is considered
one monitoring record.
    \17\ The primary site TEOM ceased operations on September 23,
2008, and the replacement primary site BAM did not begin collecting
valid data until September 1, 2009. The Ballard site FRM did not
begin operating until April 21, 2008.
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    The data from the primary site FRMs are complete for 2007-2009 and
therefore may be used for a determination of attainment. The expected
exceedance rate of 0.0 for the primary site FRMs is equal to or less
than the expected exceedance rate of 1.0 that is allowed under the PM-
10 NAAQS. Because complete data from the primary site FRMs show an
expected exceedance rate equal to or below the PM-10 standard, because
the other monitors at the primary and Ballard sites show expected
exceedance rates equal to or less than the PM-10 standard, and because,
based on data available to date, there have been no additional
exceedances of the PM-10 standard in the nonattainment area in 2010,
EPA concludes that the area has met the standard. EPA therefore
proposes to determine that the Fort Hall PM-10 nonattainment area has
attained the 24-hour PM-10 NAAQS.\18\
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    \18\ If this proposal is finalized, and EPA subsequently
determines, after notice-and-comment rulemaking, that the area no
longer is attaining the NAAQS, EPA will publish such determination
in the Federal Register.
---------------------------------------------------------------------------

    EPA has carefully reviewed the monitoring data, meteorological data
and other available information regarding the exceedances that occurred
at the TEOM in 2008. The meteorological data for this review came from
a meteorological station that was co-located with the PM-10 monitors at
the primary site. Because each of the PM-10 exceedances was recorded on
a continuous monitor, it is possible to compare hourly PM-10 levels on
the day of each exceedance with hourly wind speed measured at the
meteorological station. On all three days when exceedances were
recorded, hourly spikes in PM-10 levels corresponded to increases in
hourly wind speeds.\19\ Hourly wind speeds of more than 26 mph and
sustained hourly wind speeds of more than 20 mph for several hours were
measured on all three days.
---------------------------------------------------------------------------

    \19\ Memo from Donna Deneen to the Fort Hall Docket, dated April
26, 2010, regarding PM-10 Exceedances and Wind Speeds on April 15,
May 20, and August 26, 2008.
---------------------------------------------------------------------------

    All three exceedances were flagged timely by the Sho-Ban Tribes as
high wind events under EPA's Exceptional Events Rule (72 FR 13560,
March 22, 2007). Under EPA's Exceptional Events Rule, EPA may exclude
data from regulatory determinations related to exceedances or
violations of the NAAQS if it is adequately demonstrated that an
exceptional event caused the exceedance or violation. 40 CFR 50.1,
50.14. In this case, EPA need not determine whether the flagged
exceedances can be considered as caused by ``exceptional events'' under
the Exceptional Events Rule. For the purposes of the current attainment
determination, inclusion of these exceedances does not affect EPA's
determination of the area's attainment status. In other words, even if
EPA includes all three days of exceedances monitored at the TEOM in
2008, the data show that the area attained the PM-10 standard and under
the existing monitoring record, EPA's proposed determination that the
area has attained the standard is not dependent on whether the 2008
exceedances qualify for exclusion under the Exceptional Events Rule. If
in the future we determine that it is appropriate to evaluate whether
the exceedances qualify as caused by exceptional events and may be
excluded from regulatory determinations, we will do so at that time in
accordance with the Exceptional Events Rule.

III. Proposed Action

A. Proposed Determination of Attainment

    EPA is, by this document, proposing to determine that the Fort Hall
nonattainment area has attained the 24-hour PM-10 standard, based on
complete, quality-assured monitoring data for 2007-2009, and data
available to date for 2010. This proposed finding of attainment is not
a proposed redesignation to attainment under CAA section 107(d)(3). If
this proposal is finalized, the designation status in 40 CFR part 81
for the Fort Hall PM-10 nonattainment area would remain moderate
nonattainment until such time as the area is redesignated to attainment
as provided in CAA section 107(d)(3). If this proposal is finalized,
and EPA subsequently determines after notice and comment rulemaking,
that the area is no longer attaining the NAAQS, EPA will publish such
determination in the Federal Register.

B. Withdrawal of June 19, 1998 Proposal

    It has now been twelve years since EPA proposed to make a finding
of nonattainment for the Fort Hall PM-10 nonattainment area (63 FR
33605, June 19, 1998). In light of all the changes that have taken
place over that time, including the promulgation of the FIP, the
cessation of the production of elemental phosphorous at FMC, the low
levels of PM-10 recorded in the area, and the consent decree with
Sierra Club that provides for an attainment determination for the Fort
Hall PM-10 nonattainment area based on 2007-2009 data, EPA is
withdrawing its June 19, 1998 proposed rulemaking and issuing this
proposal in its place. Accordingly, EPA will not be responding to
comments on the June 19, 1998 proposal. Any person who wishes to
comment on EPA's proposed finding that the Fort Hall nonattainment area
attained the 24-hour PM-10 standard as of December 31, 2009 should do
so at this time.

IV. Statutory and Executive Order Reviews

    This action proposes to make a determination based on air quality
data, and would, if finalized, not result in the imposition of any
additional Federal requirements. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997); is not a significant regulatory action subject
to Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible

methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications, as specified
by Executive Order 13175 (65 FR 67249, November 9, 2000), because the
proposed rule merely makes a required determination based on air
quality data and would neither impose substantial direct compliance
costs on tribal governments, nor preempt tribal law, the requirements
of sections 5(b) and 5(c) of the Executive Order do not apply to this
rule. Consistent with EPA policy, EPA nonetheless provided a
consultation opportunity to the Shoshone-Bannock Tribes in a letter to
the Chairman of the Fort Hall Business Council, dated January 25, 2010,
offering the Tribes the opportunity to consult on this determination
and have meaningful and timely input into this proposed decision. In
the spirit of Executive Order 13175, and consistent with EPA policy to
promote communications between EPA and tribal governments, EPA
specifically solicits additional comment on this proposed rule from
tribal officials.

List of Subjects in 40 CFR Part 81

    Environmental protection, Air pollution control, Intergovernmental
relations, Particulate matter, Reporting and recordkeeping
requirements.

    Dated: May 3, 2010.
Dennis J. McLerran,
Regional Administrator, EPA Region 10.
[FR Doc. 2010-11139 Filed 5-12-10; 8:45 am]
BILLING CODE 6560-50-P