[Federal Register Volume 88, Number 65 (Wednesday, April 5, 2023)]
[Proposed Rules]
[Pages 20086-20092]
[FR Doc No: 2023-06829]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2023-0036; FRL-10790-01-R9]

Air Plan Revisions; California; Sacramento Metropolitan Air
Quality Management District

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to
partially approve and partially disapprove a revision to the Sacramento
Metropolitan Air Quality Management District (SMAQMD) portion of the
California State Implementation Plan (SIP) concerning the SMAQMD's
demonstration regarding reasonably available control technology (RACT)
requirements and negative declarations for the 2008 8-hour ozone
National Ambient Air Quality Standards (NAAQS or ``standards'') in the
portion of the Sacramento Metropolitan nonattainment area under the
jurisdiction of the SMAQMD. We are proposing action on a SIP revision
under the Clean Air Act (CAA or the Act). We are taking comments on
this proposal and plan to follow with a final action.

DATES: Comments must be received on or before May 5, 2023.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R09-
OAR-2023-0036 at https://www.regulations.gov. For comments submitted at
Regulations.gov, follow the online instructions for submitting
comments. Once submitted, comments cannot be edited or removed from
Regulations.gov. The EPA may publish any comment received to its public
docket. Do not submit electronically any information you consider to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Multimedia submissions (audio,
video, etc.) must be accompanied by a written comment. The written
comment is considered the official comment and should include
discussion of all points you wish to make. The EPA will generally not

consider comments or comment contents located outside of the primary
submission (i.e., on the web, cloud, or other file sharing system). For
additional submission methods, please contact the person identified in
the FOR FURTHER INFORMATION CONTACT section. For the full EPA public
comment policy, information about CBI or multimedia submissions, and
general guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets. If you need assistance in a
language other than English or if you are a person with disabilities
who needs a reasonable accommodation at no cost to you, please contact
the person identified in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Eugene Chen, EPA Region IX, 75
Hawthorne St., San Francisco, CA 94105. By phone:<PHONE_NUMBER> or by
email at [email protected].

SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and
``our'' refer to the EPA.

Table of Contents

I. The State's Submittal
    A. What documents did the State submit?
    B. Are there other versions of these documents?
    C. What is the purpose of the submitted documents?
II. The EPA's Evaluation and Action
    A. How is the EPA evaluating the submitted documents?
    B. Do the documents meet the evaluation criteria?
    C. What are the deficiencies?
    D. Proposed Action and Public Comment
III. Statutory and Executive Order Reviews

I. The State's Submittal

A. What documents did the State submit?

    Table 1 lists the documents addressed by this proposal with the
dates that they were adopted by the local air agency and submitted by
the California Air Resource Board (CARB).

                      Table 1--Submitted Documents
------------------------------------------------------------------------
     Local agency              Document           Adopted     Submitted
------------------------------------------------------------------------
SMAQMD................  Demonstration of         03/23/2017   05/05/2017
                         Reasonably Available
                         Control Technology
                         for the 2008 Ozone
                         National Ambient Air
                         Quality Standard
                         (NAAQS) (``2017 RACT
                         SIP'').
SMAQMD................  Negative Declaration     03/22/2018   06/11/2018
                         for Control Technique
                         Guidelines for
                         Miscellaneous Metal
                         and Plastic Parts
                         Coatings (Pleasure
                         Craft Coating Portion
                         Only) (``Pleasure
                         Craft Coating
                         Negative
                         Declaration'').
------------------------------------------------------------------------

    The submittals for the 2017 RACT SIP and Pleasure Craft Coating
Negative Declaration were determined to meet the completeness criteria
in 40 CFR part 51, Appendix V, in letters dated October 31, 2017 and
August 23, 2018, respectively.

B. Are there other versions of these documents?

    There are no previous versions of the RACT SIP or negative
declarations in the SMAQMD portion of the California SIP for the 2008
ozone NAAQS.

C. What is the purpose of the submitted documents?

    Emissions of volatile organic compounds (VOCs) and oxides of
nitrogen (NOX) contribute to the production of ground-level
ozone, smog and particulate matter (PM), which harm human health and
the environment. Section 110(a) of the CAA requires states to submit
regulations that control VOC and NOX emissions. Sections
182(b)(2) and (f) require that SIPs for ozone nonattainment areas
classified as Moderate or above implement RACT for any source covered
by a Control Techniques Guidelines (CTG) document and for any major
source of VOCs or NOX. The SMAQMD is subject to this
requirement as it regulates the Sacramento County portion of the
Sacramento Metropolitan ozone nonattainment area that was designated
and classified as a Severe nonattainment area for the 2008 8-hour ozone
NAAQS.\1\ Therefore, the SMAQMD must, at a minimum, adopt RACT-level
controls for all sources covered by a CTG document and for all major
non-CTG sources of VOCs or NOX within the ozone
nonattainment area that it regulates. Any stationary source that emits
or has the potential to emit at least 25 tons per year (tpy) of VOCs or
NOX is a major stationary source in a Severe ozone
nonattainment area (CAA section 182(d), (f) and 302(j)).
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    \1\ 77 FR 30088 (May 21, 2012).
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    Section III.D of the preamble to the EPA's final rule to implement
the 2008 ozone NAAQS discusses RACT requirements.\2\ It states, in
part, that RACT SIPs must contain adopted RACT regulations,
certifications (where appropriate) that existing provisions are RACT,
and/or negative declarations that no sources in the nonattainment area
are covered by a specific CTG.\3\ It also provides that states must
submit appropriate supporting information for their RACT submissions as
described in the EPA's implementation rule for the 1997 ozone NAAQS.\4\
The SMAQMD's RACT SIP submittal and negative declarations provide
SMAQMD's analyses of its compliance with the CAA section 182 RACT
requirements for the 2008 8-hour ozone NAAQS.
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    \2\ 80 FR 12264 (March 6, 2015).
    \3\ Id. at 12278.
    \4\ Id.; 70 FR 71612, 71652 (November 29, 2005).
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    The EPA's technical support document (TSD) has more information
about SMAQMD's RACT SIP, negative declarations, and the EPA's
evaluations thereof.

II. The EPA's Evaluation and Action

A. How is the EPA evaluating the submitted documents?

    Generally, SIP rules must require RACT for each category of sources
covered by a CTG document as well as each major source of VOCs or
NOX in ozone nonattainment areas classified as Moderate or
above (see CAA section 182(b)(2), (f)). The SMAQMD regulates the
Sacramento County portion of the Sacramento Metropolitan ozone
nonattainment area classified as Severe for the 2008 ozone standard (40
CFR 81.305). Therefore, SMAQMD rules must implement RACT.
    States should also submit for SIP approval negative declarations
for those CTGs for which they have no sources covered by the CTG,
regardless of whether such negative declarations were made in a SIP for
an earlier ozone standard.\5\ To do so, the submittal should provide
reasonable assurance that no sources that fall under the CTG currently
exist in the portion of the ozone nonattainment area that is regulated
by the SMAQMD.
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    \5\ 57 FR 13498, 13512 (April 16, 1992).
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    The District's analysis must demonstrate that each major source of
VOCs or NOX in the ozone nonattainment area is covered by a
RACT-level rule. In addition, for each CTG, the District must either

demonstrate that a RACT-level rule is in place or submit a negative
declaration. Guidance and policy documents that we use to evaluate CAA
section 182 RACT requirements include the following:
    1. ``State Implementation Plans; General Preamble for the
Implementation of Title I of the Clean Air Act Amendments of 1990,'' 57
FR 13498 (April 16, 1992); 57 FR 18070 (April 28, 1992).
    2. ``Issues Relating to VOC Regulation Cutpoints, Deficiencies, and
Deviations,'' EPA, May 25, 1988 (the Bluebook, revised January 11,
1990).
    3. ``Guidance Document for Correcting Common VOC & Other Rule
Deficiencies,'' EPA Region 9, August 21, 2001 (the Little Bluebook).
    4. ``State Implementation Plans; Nitrogen Oxides Supplement to the
General Preamble; Clean Air Act Amendments of 1990 Implementation of
Title I; Proposed Rule,'' (the NOX Supplement), 57 FR 55620,
November 25, 1992.
    5. Memorandum dated May 18, 2006, from William T. Harnett,
Director, Air Quality Policy Division, to Regional Air Division
Directors, Subject: ``RACT Qs & As--Reasonably Available Control
Technology (RACT): Questions and Answers.''
    6. ``Final Rule to Implement the 8-hour Ozone National Ambient Air
Quality Standard--Phase 2,'' 70 FR 71612 (November 29, 2005).
    7. ``Implementation of the 2008 National Ambient Air Quality
Standards for Ozone: State Implementation Plan Requirements,'' 80 FR
12264 (March 6, 2015).
    8. ``State Implementation Plans: Response to Petition for
Rulemaking; Restatement and Update of EPA's SSM (startup, shutdown,
malfunction) Policy Applicable to SIPs; Findings of Substantial
Inadequacy; and SIP Calls to Amend Provisions Applying to Excess
Emissions During Periods of Startup, Shutdown and Malfunction'' (80 FR
33839) June 12, 2015 (2015 SSM SIP Action).
    9. ``Inclusion of Provisions Governing Periods of Startup,
Shutdown, and Malfunctions in State Implementation Plans,'' EPA,
October 9, 2020.
    10. ``Withdrawal of the October 9, 2020, Memorandum Addressing
Startup, Shutdown, and Malfunctions in State Implementation Plans and
Implementation of the Prior Policy,'' EPA, September 30, 2021.

B. Do the documents meet the evaluation criteria?

    SMAQMD's 2017 RACT SIP provides the District's demonstration that
the applicable SIP for the SMAQMD satisfies CAA section 182 RACT
requirements for the 2008 8-hour ozone NAAQS. The District based its
demonstration on its analysis of SIP-approved requirements that apply
to the following: (1) sources covered by a CTG, and (2) major non-CTG
stationary sources of VOC or NOX emissions.
    With respect to CTG sources, SMAQMD identified several CTGs with
covered sources (i.e., sources covered by the CTG and operating within
the nonattainment area), and provided an evaluation of the District
rules it relies upon to meet RACT for these CTGs. We reviewed the
District's evaluation and agree that its rules implement RACT for the
applicable CTGs. Our TSD has additional information about our
evaluation of these rules.
    When there are no existing sources covered by a particular CTG
document, or no major non-CTG sources of NOX or VOC, states
may, in lieu of adopting RACT requirements for those sources, adopt
negative declarations certifying that there are no such sources in the
relevant nonattainment area. Appendix A of the 2017 RACT SIP lists
SMAQMD's negative declarations for those instances where it has no
sources subject to the applicable CTGs for the 2008 8-hour ozone NAAQS.
These negative declarations are listed in Table 2 below. SMAQMD
concludes that it has no sources subject to these listed CTGs based on
a review of its permit files, emission inventory, business listings,
and consultation with District permitting and enforcement staff. We
reviewed SMAQMD's list of negative declarations and California
Emissions Inventory data to verify the District's conclusion that it
has no stationary sources subject to the CTGs for which it has adopted
a negative declaration. We agree with the District's negative
declarations in the 2017 RACT SIP and propose to approve them into the
SIP.
    With respect to non-CTG major sources of NOX or VOC,
SMAQMD identified twelve major sources exceeding the major source
threshold for NOX or VOC, which is 25 tpy in Severe ozone
nonattainment areas. As described in more detail in our TSD, we
conclude that SMAQMD properly identified all major non-CTG sources of
NOX or VOC requiring RACT. SMAQMD also identified several
District rules, primarily NOX rules, that it relies upon to
implement RACT at these major sources. As discussed in more detail in
Section C below, we have noted certain deficiencies in several of the
identified District rules, and conclude that these District rules do
not fully satisfy the RACT requirement.

                                      Table 2--SMAQMD Negative Declarations
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                  CTG document No.                                        CTG document title
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EPA-450/2-77-008....................................  Control of Volatile Organic Emissions from Existing
                                                       Stationary Sources--Volume II: Surface Coating of Coils.
EPA-450/2-77-008....................................  Control of Volatile Organic Emissions from Existing
                                                       Stationary Sources--Volume II: Surface Coating of Paper.
EPA-450/2-77-008....................................  Control of Volatile Organic Emissions from Existing
                                                       Stationary Sources--Volume II: Surface Coating of
                                                       Fabrics.
EPA-450/2-77-008....................................  Control of Volatile Organic Emissions from Existing
                                                       Stationary Sources--Volume II: Surface Coating of
                                                       Automobiles and Light-Duty Trucks.
EPA-450/2-77-025....................................  Control of Refinery Vacuum Producing Systems, Wastewater
                                                       Separators, and Process Unit Turnarounds.
EPA-450/2-77-033....................................  Control of Volatile Organic Emissions from Existing
                                                       Stationary Sources--Volume IV: Surface Coating of
                                                       Insulation of Magnet Wire.
EPA-450/2-77-034....................................  Control of Volatile Organic Emissions from Existing
                                                       Stationary Sources--Volume V: Surface Coating of Large
                                                       Appliances.
EPA-450/2-78-030....................................  Manufacture of Pneumatic Rubber Tires.
EPA-450/2-78-032....................................  Factory Surface Coating of Flat Wood Paneling.
EPA-450/2-78-033....................................  Graphic Arts-Rotogravure and Flexography (Rotogravure
                                                       only).
EPA-450/2-78-03.....................................  Leaks from Petroleum Refinery Equipment.
EPA-450/3-82-009....................................  Large Petroleum Dry Cleaners.
EPA-450/3-83-007....................................  Leaks from Natural Gas/Gasoline Processing Plants.
EPA-450/3-83-008....................................  Manufacture of High-Density Polyethylene, Polypropylene,
                                                       and Polystyrene Resins.
EPA-450/3-84-015....................................  Air Oxidation Processes in Synthetic Organic Chemical
                                                       Manufacturing Industry.
EPA-453/R-94-032, 61 FR 44050; 8/27/96..............  ACT Surface Coating at Shipbuilding and Ship Repair
                                                       Facilities Shipbuilding and Ship Repair Operations
                                                       (Surface Coating).

EPA-453/R-97-004, 59 FR 29216; 6/06/94..............  Aerospace MACT and Aerospace (CTG & MACT).
EPA-453/R-06-004....................................  Flat Wood Paneling Coatings.
EPA 453/R-07-003....................................  Paper, Film, and Foil Coatings.
EPA 453/R-07-004....................................  Large Appliance Coatings.
EPA 453/R-08-003....................................  Miscellaneous Metal and Plastic Parts Coatings (Table 5--
                                                       Pleasure Craft Surface Coating).
EPA 453/R-08-004....................................  Fiberglass Boat Manufacturing Materials.
EPA 453/R-08-005....................................  Miscellaneous Industrial Adhesives.
EPA 453/R-08-006....................................  Automobile and Light-Duty Truck Assembly Coatings.
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C. What are the deficiencies?

    EPA's startup, shutdown and malfunction (SSM) policy, as defined in
the 2015 SSM SIP Action,\6\ notes that CAA Sec.  110(a)(2)(A) requires
SIPs to include enforceable emission limitations and other control
measures, means, or techniques as necessary to meet CAA requirements.
The term ``emission limitation'' is defined in CAA Sec.  302(k) as a
requirement that ``limits the quantity, rate, or concentration of
emissions of air pollution on a continuous basis [. . .].'' An emission
limitation or requirement that exempts a period of source operation,
such as startup, cannot be considered continuous and is not consistent
with CAA requirements (absent an alternative emission limitation that
applies during such periods). Since such rule limits cannot be
considered continuous limits given the presence of an exemption for
periods of startup and shutdown, they do not implement RACT during all
operating conditions, despite the level of stringency they may
establish outside of startup and shutdown periods. Moreover, section
110(a)(2) of the CAA requires SIP submissions to include enforceable
emission limitations and other control measures, means, or techniques
as may be necessary or appropriate to meet the applicable requirements
of the Act. If a rule provides for an emission limitation during
startup and shutdown, but that limitation is not enforceable, a state
may not rely on this limit to establish RACT during startup and
shutdown. Furthermore, if a rule establishes a limit during startup and
shutdown, but expressly forbids the use of data generated during these
times from use in establishing whether a violation occurred during
these times, this restriction is not consistent with the Credible
Evidence Rule.\7\
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    \6\ 80 FR 33839 (June 12, 2015).
    \7\ 62 FR 8314, February 24, 1997; 40 CFR 51.212. The Credible
Evidence Rule provides that a SIP may not preclude the use of any
credible evidence or information relevant to whether a source would
have been in compliance with applicable requirements if the
appropriate performance or compliance test procedure had been
performed.
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    As discussed in more detail in our TSD, several of the District
rules relied upon to implement RACT for non-CTG major sources of
NOX contain provisions that are not consistent with EPA's
SSM Policy. Rule 413 (Stationary Gas Turbines) contains a provision
that explicitly exempts affected units from complying with rule
standards during periods of startup and shutdown and does not provide
for an alternative emissions limitation during such periods. Rule 411
(NOX from Boilers, Process Heaters, and Steam Generators)
and Rule 419 (NOX from Miscellaneous Combustion Units) both
contain monitoring provisions that preclude the use of specified data
for compliance determinations during periods of startup and shutdown.
The deficiencies in these three rules represent the basis for our
partial disapproval of SMAQMD's 2017 RACT SIP for non-CTG major sources
of NOX, and must be remedied prior to full approval of the
District's RACT SIP.

D. Proposed Action and Public Comment

    For the reasons discussed above and explained in more detail in our
TSD, the EPA proposes to partially approve and partially disapprove the
SMAQMD 2017 RACT SIP. As authorized in section 110(k)(3) of the Act, we
are proposing to approve the SMAQMD 2017 RACT SIP for each of the CTGs
addressed either by District rule or by negative declaration, as well
as for non-CTG major sources of VOC. Also under section 110(k)(3), we
propose to disapprove the SMAQMD 2017 RACT SIP as it pertains to non-
CTG major sources of NOX, based upon our conclusion that
several of the District rules relied upon to implement RACT for this
element contain deficiencies related to startup and shutdown. Table 3
contains a listing of each RACT element, the District rule or negative
declaration relied upon to address RACT, as well as our proposed action
for that RACT element.
    The EPA is committed to working with SMAQMD to resolve the
identified RACT deficiencies. However, should we finalize the proposed
partial disapproval of the non-CTG major source NOX element
of SMAQMD's 2017 RACT SIP, section 110(c) would require the EPA to
promulgate a federal implementation plan (FIP) within 24 months unless
we approve subsequent SIP revisions that correct the deficiencies
identified in our final action. In this instance, we note that the EPA
already has an existing obligation to promulgate a FIP for any RACT SIP
elements that we have not taken final action to approve. This FIP
obligation originates from our February 3, 2017 (82 FR 9158) finding
that SMAQMD failed to submit a RACT SIP for the 2008 8-hour ozone NAAQS
by the required submittal deadline. This finding of failure to submit
established a FIP obligation deadline of February 3, 2019. In addition,
final action on the proposed partial disapproval would trigger the
offset sanction in CAA section 179(b)(2) 18 months after the effective
date of a final disapproval, and the highway funding sanction in CAA
section 179(b)(1) six months after the offset sanction is imposed. A
sanction will not be imposed if the EPA determines that a subsequent
SIP submission corrects the deficiencies identified in our final action
before the applicable deadline.\8\
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    \8\ Our February 7, 2017 finding of failure to submit also
triggered offset sanctions and highway funding sanctions. These
sanctions clocks were extinguished by SMAQMD's submittal of its 2017
RACT SIP and our October 31, 2017 and August 23, 2018 letters
determining that the District's RACT SIP submittal was complete.
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    We will accept comments from the public on this proposed partial
approval and partial disapproval until May 5, 2023. If finalized, this
action would incorporate the approved portions of the 2017 RACT SIP and
negative declarations into the SIP.

                                Table 3--List of RACT Elements--2008 Ozone NAAQS
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                                                        District rule
         CTG document No.             RACT element      implementing    Negative declaration     EPA proposed
                                                            RACT              submitted             action
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EPA-450/R-75-102..................  Design Criteria   448 (Gasoline     ....................  Approval.
                                     for Stage I       Transfer Into
                                     Vapor Control--   Stationary
                                     Gasoline          Storage
                                     Service           Containers).
                                     Stations.
EPA-450/2-77-008..................  Surface Coating   452 (Can          ....................  Approval.
                                     of Cans.          Coating).
EPA-450/2-77-008..................  Surface Coating   ................  Yes.................  Approval.
                                     of Coils.
EPA-450/2-77-008..................  Surface Coating   ................  Yes.................  Approval.
                                     of Paper.
EPA-450/2-77-008..................  Surface Coating   ................  Yes.................  Approval.
                                     of Fabric.
EPA-450/2-77-008..................  Surface Coating   ................  Yes.................  Approval.
                                     of Automobiles
                                     and Light-Duty
                                     Trucks.
EPA-450/2-77-022..................  Solvent Metal     454 (Degreasing   ....................  Approval.
                                     Cleaning.         Operations).
EPA-450/2-77-025..................  Refinery Vacuum   ................  Yes.................  Approval.
                                     Producing
                                     Systems,
                                     Wastewater
                                     Separators, and
                                     Process Unit
                                     Turnarounds.
EPA-450/2-77-026..................  Tank Truck        447 (Organic      ....................  Approval.
                                     Gasoline          Liquid Loading).
                                     Loading
                                     Terminals.
EPA-450/2-77-032..................  Surface Coating   451 (Surface      ....................  Approval.
                                     of Metal          Coating of
                                     Furniture.        Miscellaneous
                                                       Metal Parts and
                                                       Products).
EPA-450/2-77-033..................  Surface Coating   ................  Yes.................  Approval.
                                     of Insulation
                                     of Magnet Wire.
EPA-450/2-77-034..................  Surface Coating   ................  Yes.................  Approval.
                                     of Large
                                     Appliances.
EPA-450/2-77-035..................  Bulk Gasoline     447 (Organic      ....................  Approval.
                                     Plants.           Liquid Loading).
EPA-450/2-77-036..................  Storage of        446 (Storage of   ....................  Approval.
                                     Petroleum         Petroleum
                                     Liquids in        Products).
                                     Fixed-Roof
                                     Tanks.
EPA-450/2-77-037..................  Cutback Asphalt.  453 (Cutback and  ....................  Approval.
                                                       Emulsified
                                                       Asphalt Paving
                                                       Materials).
EPA-450/2-78-015..................  Surface Coating   451 (Surface      ....................  Approval.
                                     of                Coating of
                                     Miscellaneous     Miscellaneous
                                     Metal Parts and   Metal Parts and
                                     Products.         Products).
EPA-450/2-78-029..................  Manufacture of    464 (Organic      ....................  Approval.
                                     Synthesized       Chemical
                                     Pharmaceutical    Manufacturing
                                     Products.         Operations).
EPA-450/2-78-030..................  Manufacture of    ................  Yes.................  Approval.
                                     Pneumatic
                                     Rubber Tires.
EPA-450/2-78-032..................  Factory Surface   ................  Yes.................  Approval.
                                     Coating of Flat
                                     Wood Paneling.
EPA-450/2-78-033..................  Graphic Arts-     450 (Graphic      Yes--Rotogravure      Approval.
                                     Rotogravure and   Arts              only.
                                     Flexography.      Operations)--Fl
                                                       exography only.
EPA-450/2-78-036..................  Leaks from        ................  Yes.................  Approval.
                                     Petroleum
                                     Refinery
                                     Equipment.
EPA-450/2-78-047..................  Petroleum Liquid  446 (Storage of   ....................  Approval.
                                     Storage in        Petroleum
                                     External          Products).
                                     Floating Roof
                                     Tanks.
EPA-450/2-78-051..................  Leaks from        447 (Organic      ....................  Approval.
                                     Gasoline Tank     Liquid
                                     Trucks and        Loading), 448
                                     Vapor             (Gasoline
                                     Collection        Transfer Into
                                     Systems.          Stationary
                                                       Storage
                                                       Containers).
EPA-450/3-82-009..................  Large Petroleum   ................  Yes.................  Approval.
                                     Dry Cleaners.
EPA-450/3-83-006..................  Leaks from        443 (Leaks from   ....................  Approval.
                                     Synthetic         Synthetic
                                     Organic           Organic
                                     Chemical          Chemical and
                                     Polymer and       Polymer
                                     Resin             Manufacturing).
                                     Manufacturing
                                     Equipment.
EPA-450/3-83-007..................  Leaks from        ................  Yes.................  Approval.
                                     Natural Gas/
                                     Gasoline
                                     Processing
                                     Plants.
EPA-450/3-83-008..................  Manufacture of    ................  Yes.................  Approval.
                                     High-Density
                                     Polyethylene,
                                     Polypropylene,
                                     and Polystyrene
                                     Resins.
EPA-450/3-84-015..................  Air Oxidation     ................  Yes.................  Approval.
                                     Processes in
                                     Synthetic
                                     Organic
                                     Chemical
                                     Manufacturing
                                     Industry.
EPA-450/4-91-031..................  Reactor           464 (Organic      ....................  Approval.
                                     Processes and     Chemical
                                     Distillation      Manufacturing
                                     Operations in     Operations).
                                     Synthetic
                                     Organic
                                     Chemical
                                     Manufacturing
                                     Industry.
EPA-453/R-96-007..................  Wood Furniture    ................  Yes.................  Approval.
                                     Manufacturing
                                     Operations.
EPA-453/R-94-032, 61 FR 44050; 8/   ACT Surface       ................  Yes.................  Approval.
 27/96.                              Coating at
                                     Shipbuilding
                                     and Ship Repair
                                     Facilities
                                     Shipbuilding
                                     and Ship Repair
                                     Operations
                                     (Surface
                                     Coating).
EPA-453/R-97-004, 59 FR 29216; 6/   Aerospace MACT    ................  Yes.................  Approval.
 06/94.                              and Aerospace
                                     (CTG & MACT).
EPA-453/R-06-001..................  Industrial        466 (Solvent      ....................  Approval.
                                     Cleaning          Cleaning).
                                     Solvents.
EPA-453/R-06-002..................  Offset            450 (Graphic      ....................  Approval.
                                     Lithographic      Arts
                                     Printing and      Operations).
                                     Letterpress
                                     Printing.
EPA-453/R-06-003..................  Flexible Package  450 (Graphic      ....................  Approval.
                                     Printing.         Arts
                                                       Operations).
EPA-453/R-06-004..................  Flat Wood         ................  Yes.................  Approval.
                                     Paneling
                                     Coatings.
EPA 453/R-07-003..................  Paper, Film, and  ................  Yes.................  Approval.
                                     Foil Coatings.
EPA 453/R-07-004..................  Large Appliance   ................  Yes.................  Approval.
                                     Coatings.
EPA 453/R-07-005..................  Metal Furniture   451 (Surface      ....................  Approval.
                                     Coatings.         Coating of
                                                       Miscellaneous
                                                       Metal Parts and
                                                       Products).
EPA 453/R-08-003..................  Miscellaneous     451 (Surface      ....................  Approval.
                                     Metal Parts       Coating of
                                     Coatings: Table   Miscellaneous
                                     2--Metal Parts    Metal Parts and
                                     and Products.     Products).
EPA 453/R-08-003..................  Miscellaneous     468 (Surface      ....................  Approval.
                                     Plastic Parts     Coating of
                                     Coatings: Table   Plastic Parts
                                     3--Plastic        and Products).
                                     Parts and
                                     Products.
EPA 453/R-08-003..................  Miscellaneous     468 (Surface      ....................  Approval.
                                     Plastic Parts     Coating of
                                     Coatings: Table   Plastic Parts
                                     4--Automotive/    and Products).
                                     Transportation
                                     and Business
                                     Machine Plastic
                                     Parts.
EPA 453/R-08-003..................  Miscellaneous     ................  Yes.................  Approval.
                                     Plastic Parts
                                     Coatings: Table
                                     5--Pleasure
                                     Craft Surface
                                     Coating.
EPA 453/R-08-003..................  Miscellaneous     459 (Automotive,  ....................  Approval.
                                     Plastic Parts     Truck, and
                                     Coatings: Table   Heavy Equipment
                                     6--Motor          Refinishing
                                     Vehicle           Operations).
                                     Materials.
EPA 453/R-08-004..................  Fiberglass Boat   ................  Yes.................  Approval.
                                     Manufacturing
                                     Materials.
EPA 453/R-08-005..................  Miscellaneous     ................  Yes.................  Approval.
                                     Industrial
                                     Adhesives.

EPA 453/R-08-006..................  Automobile and    ................  Yes.................  Approval.
                                     Light-Duty
                                     Truck Assembly
                                     Coatings.
                                    Non-CTG Major     411 (NOX from     ....................  Disapproval.\9\
                                     Sources of NOX.   Boilers,
                                                       Process
                                                       Heaters, and
                                                       Steam
                                                       Generators),
                                                       412 (Stationary
                                                       Internal
                                                       Combustion
                                                       Engines), 413
                                                       (Stationary Gas
                                                       Turbines), 419
                                                       (NOX from
                                                       Miscellaneous
                                                       Combustion
                                                       Units).
                                    Non-CTG Major     Source-specific   ....................  Approval.
                                     Sources of VOC.   Requirements.
----------------------------------------------------------------------------------------------------------------

III. Statutory and Executive Order Reviews
---------------------------------------------------------------------------

    \9\ As described in greater detail in our Technical Support
Document (Docket Item B-01), the proposed disapproval for the non-
CTG major sources of NOX element is based in the
deficiencies noted in Rules 411 and 413, as well as the lack of SIP-
approved RACT level controls for the Mitsubishi Chemical and Carbon
Fiber Composites facility due to the deficiencies noted in the
submitted version of Rule 419.
---------------------------------------------------------------------------

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

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

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

B. Paperwork Reduction Act (PRA)

    This action does not impose an information collection burden under
the PRA because this action does not impose additional requirements
beyond those imposed by state law.

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. This
action will not impose any requirements on small entities beyond those
imposed by state law.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments. This action does not impose additional requirements
beyond those imposed by state law. Accordingly, no additional costs to
state, local, or tribal governments, or to the private sector, will
result from this action.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government.

F. Executive Order 13175: Coordination With Indian Tribal Governments

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

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

    The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. This action is not subject to
Executive Order 13045 because it does not impose additional
requirements beyond those imposed by state law.

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

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

I. National Technology Transfer and Advancement Act (NTTAA)

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

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

    Executive Order 12898 (Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations, 59 FR 7629,
February 16, 1994) directs Federal agencies to identify and address
``disproportionately high and adverse human health or environmental
effects'' of their actions on minority populations and low-income
populations to the greatest extent practicable and permitted by law.
EPA defines environmental justice (EJ) as ``the fair treatment and
meaningful involvement of all people regardless of race, color,
national origin, or income with respect to the development,
implementation, and enforcement of environmental laws, regulations, and
policies.'' EPA further defines the term fair treatment to mean that
``no group of people should bear a disproportionate burden of
environmental harms and risks, including those resulting from the
negative environmental consequences of industrial, governmental, and
commercial operations or programs and policies.''
    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provision of the Act and applicable
federal regulations. 42 U.S.C. 740(k); 40 CFR 52.02(a). Thus, in
reviewing SIP submissions, the EPA's role is to review state choices,
and approve those choices if they meet the minimum criteria of the Act.
Accordingly, this proposed action partially approves and partially
disapproves state law as meeting federal requirements and does not
impose additional requirements beyond those imposed by state law.

    The District did not evaluate environmental justice considerations
as part of its SIP submittal; the CAA and applicable implementing
regulations neither prohibit nor require such an evaluation. The EPA
did not perform an EJ analysis and did not consider EJ in this action.
Consideration of EJ is not required as part of this action, and there
is no information in the record inconsistent with the stated goals of
E.O. 12898 of achieving environmental justice for people of color, low-
income populations, and indigenous peoples.

List of Subjects in 40 CFR Part 52

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

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

    Dated: March 28, 2023.
Kerry Drake,
Acting Regional Administrator, Region IX.
[FR Doc. 2023-06829 Filed 4-4-23; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 83, Number 65 (Wednesday, April 4, 2018)]
[Rules and Regulations]
[Pages 14367-14369]
[FR Doc No: 2018-06888]

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

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket Number USCG-2018-0182]
RIN 1625-AA00

Safety Zone; Recurring Fireworks Display Within the Fifth Coast
Guard District

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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

SUMMARY: The Coast Guard is establishing a temporary safety zone for
certain waters of the Upper Potomac River. This action is necessary to
provide for the safety of life on navigable waters during the National
Cherry Blossom Festival fireworks display in the Washington Channel,
Washington, DC, on April 7, 2018. This rulemaking will prohibit persons
and vessels from entering the safety zone unless authorized by the
Captain of the Port Maryland-National Capital Region or a designated
representative.

DATES: This rule is effective from 8 p.m. on April 7, 2018 through 9:30
p.m. on April 8, 2018.

ADDRESSES: To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type USCG-
2018-0182 in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rule.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email Mr. Ronald Houck, Sector Maryland-National Capital Region
Waterways Management Division, U.S. Coast Guard; telephone 410-576-
2674, email [email protected].

SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
COTP Captain of the Port
DHS Department of Homeland Security
E.O. Executive Order
FR Federal Register
NPRM Notice of proposed rulemaking
Sec.  Section
U.S.C. United States Code

II. Background Information and Regulatory History

    On January 9, 2018, and February 2, 2018, the Coast Guard was
notified by the event sponsor that a change of location was necessary
to that currently listed for the annually scheduled National Cherry
Blossom Festival fireworks display in 33 CFR 165.506. Entry (b)(1) in
the Table to 33 CFR 165.506 for Recurring Fireworks Displays within the
Fifth Coast Guard District specifies the location of the regulated area
for this safety zone as a circular shaped area that includes all waters
of the Upper Potomac River, within 170 yard radius of the fireworks
barge in approximate position latitude 38[deg]52'20.3'' N, longitude
077[deg]01'17.5'' W, located within the Washington Channel, at
Washington Harbor, DC. The location of the fireworks display for this
year is changed approximately 1,000 yards upstream and its size is
reduced, to include all waters of the Washington Channel within 200
feet of the fireworks barge in approximate position latitude
38[deg]52'45.49'' N, longitude 077[deg]01'41.06'' W, located in
Washington, DC. Hazards from fireworks displays include accidental
discharge of fireworks, dangerous projectiles, and falling hot embers
or other debris. The COTP has determined that potential hazards
associated with the fireworks to be used in this display would be a
safety concern for anyone within 200 feet of the fireworks barge.
    The Coast Guard is issuing this temporary rule without prior notice
and opportunity to comment pursuant to authority under section 4(a) of
the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This
provision authorizes an agency to issue a rule without prior notice and
opportunity to

comment when the agency for good cause finds that those procedures are
``impracticable, unnecessary, or contrary to the public interest.''
Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists
for not publishing a notice of proposed rulemaking (NPRM) with respect
to this rule because it is impracticable to provide a sufficient
comment period and maintain the event as scheduled for April 7, 2018.
    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause
exists for making this rule effective less than 30 days after
publication in the Federal Register. Delaying the effective date of
this rule would be contrary to public interest because immediate action
is needed to respond to the potential safety hazards associated with a
fireworks display.

III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority in 33 U.S.C.
1231. The COTP has determined that potential hazards associated with
the fireworks to be used in this April 7, 2018 display will be a safety
concern for anyone on the Washington Channel near The Wharf DC. The
purpose of this rulemaking is to ensure the safety of vessels and the
navigable waters in the safety zone before, during, and after the
scheduled event.

IV. Discussion of the Rule

    This rule establishes a safety zone from 8 p.m. until 9:30 p.m. on
April 7, 2018, and if necessary due to inclement weather, from 8 p.m.
until 9:30 p.m. on April 8, 2018. The safety zone will cover all
navigable waters of the Washington Channel within 200 feet of the
fireworks barge in approximate position latitude 38[deg]52'45.49'' N,
longitude 077[deg]01'41.06'' W, located at Washington, DC. The duration
of the safety zone is intended to ensure the safety of vessels and
these navigable waters before, during, and after the scheduled 8:30
p.m. fireworks display. No vessel or person will be permitted to enter
the safety zone without obtaining permission from the COTP or a
designated representative.

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and
E.O.s related to rulemaking. Below we summarize our analyses based on a
number of these statutes and E.O.s, and we discuss First Amendment
rights of protestors.

A. Regulatory Planning and Review

    E.O. 12866 and 13563 direct agencies to assess the costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits.
E.O. 13771 directs agencies to control regulatory costs through a
budgeting process. This rule has not been designated a ``significant
regulatory action,'' under E.O. 12866. Accordingly, this rule has not
been reviewed by the Office of Management and Budget (OMB), and
pursuant to OMB guidance it is exempt from the requirements of E.O.
13771.
    This regulatory action determination is based on the size,
duration, time-of-year, and time-of-day of the safety zone. Although
vessel traffic will not be able to safely transit around this safety
zone, the impact will be for less than 2 hours during the late evening
when vessel traffic in Washington Channel is normally low. Moreover,
the Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM
marine channel 16 about the zone.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule
will not have a significant economic impact on a substantial number of
small entities.
    While some owners or operators of vessels intending to transit the
safety zone may be small entities, for the reasons stated in section
V.A above, this rule will not have a significant economic impact on any
vessel owner or operator.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT
section.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

C. Collection of Information

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

D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under E.O. 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and have
determined that it is consistent with the fundamental federalism
principles and preemption requirements described in E.O. 13132.
    Also, this rule does not have tribal implications under E.O. 13175,
Consultation and Coordination with Indian Tribal Governments, because
it does not have a substantial direct effect on one or more Indian
tribes, on the relationship between the Federal Government and Indian
tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian tribes. If you believe this rule has
implications for federalism or Indian tribes, please contact the person
listed in the FOR FURTHER INFORMATION CONTACT section above.

E. Unfunded Mandates Reform Act

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

F. Environment

    We have analyzed this rule under Department of Homeland Security
Directive 023-01, which guides the Coast Guard in complying with the
National Environmental Policy Act of

1969 (42 U.S.C. 4321-4370f), and have determined that this action is
one of a category of actions that do not individually or cumulatively
have a significant effect on the human environment. This rule involves
a safety zone lasting less than 2 hours that will prohibit entry within
a portion of the Washington Channel. It is categorically excluded from
further review under paragraph L60(a) of Appendix A, Table 1 of DHS
Instruction Manual 023-01-001-01, Rev. 01. A Record of Environmental
Consideration supporting this determination is available in the docket
where indicated under ADDRESSES.

G. Protest Activities

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

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.
    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

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

    Authority:  33 U.S.C. 1231; 50 U.S.C. 191, 33 CFR 1.05-1, 6.04-
1, 6.04-6, and 160.5; and; Department of Homeland Security
Delegation No. 0170.1.

0
2. Add Sec.  165.T05-0182 to read as follows:

Sec.  165.T05-0182  Safety Zone; Recurring Fireworks Display Within the
Fifth Coast Guard District.

    (a) Location. The following area is a safety zone: All navigable
waters of the Washington Channel, within 200 feet of the fireworks
barge in approximate position latitude 38[deg]52'45.49'' N, longitude
077[deg]01'41.06'' W, located at Washington, DC. All coordinates refer
to datum NAD 1983.
    (b) Definitions. As used in this section:
    (1) Captain of the Port means the Commander, U.S. Coast Guard
Sector Maryland-National Capital Region.
    (2) Designated representative means any Coast Guard commissioned,
warrant, or petty officer who has been authorized by the Captain of the
Port Maryland-National Capital Region to assist in enforcing the safety
zone described in paragraph (b) of this section.
    (c) Regulations. The general safety zone regulations found in 33
CFR 165 subpart C apply to the safety zone created by this section.
    (1) All persons are required to comply with the general regulations
governing safety zones found in 33 CFR 165.23.
    (2) Entry into or remaining in this zone is prohibited unless
authorized by the Coast Guard Captain of the Port Maryland-National
Capital Region. All vessels underway within this safety zone at the
time it is implemented are to depart the zone.
    (3) Persons desiring to transit the area of the safety zone must
first obtain authorization from the Captain of the Port Maryland-
National Capital Region or designated representative. To request
permission to transit the area, the Captain of the Port Maryland-
National Capital Region and or designated representatives can be
contacted at telephone number<PHONE_NUMBER> or on Marine Band Radio VHF-
FM channel 16 (156.8 MHz). The Coast Guard vessels enforcing this
section can be contacted on Marine Band Radio VHF-FM channel 16 (156.8
MHz). Upon being hailed by a U.S. Coast Guard vessel, or other Federal,
State, or local agency vessel, by siren, radio, flashing light, or
other means, the operator of a vessel shall proceed as directed. If
permission is granted, all persons and vessels must comply with the
instructions of the Captain of the Port Maryland-National Capital
Region or designated representative and proceed as directed while
within the zone.
    (4) Enforcement officials. The U.S. Coast Guard may be assisted in
the patrol and enforcement of the safety zone by Federal, State, and
local agencies.
    (d) Enforcement period. This section will be enforced from 8 p.m.
until 9:30 p.m. on April 7, 2018, and if necessary due to inclement
weather, from 8 p.m. until 9:30 p.m. on April 8, 2018.

    Dated: March 29, 2018
L. P. Harrison, Jr.,
Captain, U.S. Coast Guard Captain of the Port Maryland-National Capital
Region.
[FR Doc. 2018-06888 Filed 4-3-18; 8:45 am]
 BILLING CODE 9110-04-P


[Federal Register Volume 84, Number 163 (Thursday, August 22, 2019)]
[Notices]
[Pages 43833-43836]
[FR Doc No: 2019-18076]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86700; File No. SR-FINRA-2019-017]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Order Approving a Proposed Rule Change To Amend FINRA
Rules 2210 (Communications With the Public) and 2241 (Research Analysts
and Research Reports)

August 16, 2019.

I. Introduction

    On June 20, 2019, Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC or
Commission''), pursuant to Section 19(b)(1) of the Securities Exchange
Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend FINRA Rules 2210 (Communications with the
Public) and 2241 (Research Analysts and Research Reports) to conform to
the requirements of the Fair Access to Investment Research Act of 2017
(``FAIR Act'').\3\ The proposed rule change would eliminate the ``quiet
period'' restrictions in FINRA Rule 2241 on publishing a research
report or making a public appearance concerning a covered investment
fund and would create a filing exclusion under FINRA Rule 2210 for
covered investment fund research reports.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Fair Access to Investment Research Act of 2017, Public
Law 115-66, 131 Stat. 1196 (2017).
---------------------------------------------------------------------------

    The proposed rule change was published for comment in the Federal
Register on July 8, 2019.\4\ The public comment period closed on July
29, 2019. The Commission received one comment letter in response to the
Notice, supporting the proposed rule change.\5\ This order approves the
proposed rule change.
---------------------------------------------------------------------------

    \4\ See Exchange Act Release No. 86257 (Jul. 1, 2018), 84 FR
32492 (Jul. 8, 2019) (File No. SR-FINRA-2019-017 (``Notice'').
    \5\ See Letter from the Dorothy Donohue, Deputy General Counsel,
Investment Company Institute (``ICI''), dated July 29, 2019 (``ICI
Letter''), available at https://www.sec.gov.
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change 6
---------------------------------------------------------------------------

    \6\ The subsequent description of the proposed rule change is
substantially excerpted from FINRA's description in the Notice. See
Notice, 84 FR at 32492-32497.
---------------------------------------------------------------------------

    The FAIR Act requires the SEC to propose and adopt rule amendments
that would extend the current safe harbor under Securities Act of 1933
(``Securities Act'') Rule 139 \7\ to a ``covered investment fund
research report'' upon terms and conditions that the SEC determines are
necessary or appropriate in the public interest, for the protection of
investors, and for the promotion of capital formation.\8\ The FAIR Act
directs that in implementing the safe harbor for covered investment
fund research reports, the SEC is required to: (1) Meet specified
requirements concerning the safe harbor's conditions, (2) prohibit any
self-regulatory organization (``SRO'') from maintaining or enforcing
specified rules regarding such reports, and (3) provide that a covered
investment fund research report is not subject to the sales material
filing requirements in section 24(b) of the Investment Company Act of
1940 (``Investment Company Act'').\9\
---------------------------------------------------------------------------

    \7\ 17 CFR 230.139.
    \8\ See Section 2(a) of the FAIR Act.
    \9\ See Section 2(b) of the FAIR Act.
---------------------------------------------------------------------------

    On November 30, 2018, the SEC adopted its final rules and rule
amendments to implement the FAIR Act.\10\ New Rule 139b expanded the
Rule 139 safe harbor to include covered investment fund research
reports, subject to specified conditions. Specifically, Rule 139b
established a safe harbor for an unaffiliated broker or dealer
participating in a securities offering of a covered investment fund to
publish or distribute a covered investment fund research report. If the
conditions in Rule 139b are satisfied, the publication or distribution
of a covered investment fund research report would be deemed not to be
an offer for sale or offer to sell the covered investment fund's
securities for purposes of sections 2(a)(10) and 5(c) of the Securities
Act. Rule 139b also adopted the FAIR Act's definitions of ``covered
investment fund,'' ``covered investment fund research report,'' and
``research report,'' subject to minor non-substantive revisions.\11\
---------------------------------------------------------------------------

    \10\ See Securities Act Release No. 10580 (Nov. 30, 2018), 83 FR
64180 (Dec. 13, 2018) (the ``Release'').
    \11\ See 17 CFR 230.139b(c).
---------------------------------------------------------------------------

    The SEC also adopted new Rule 24b-4 under the Investment Company
Act, which specifies that a covered investment fund research report as
defined in Rule 139b that concerns a fund registered under the
Investment Company Act shall not be subject to section 24(b) of the
Investment Company Act or any rules or regulations thereunder, unless
the report is not subject to SRO rules relating to research reports,
including rules governing communications with the public.\12\ Section
24(b) of the Investment Company Act generally requires certain
registered investment companies and their underwriters to file sales
material concerning those funds with the SEC within 10 days of use.\13\
---------------------------------------------------------------------------

    \12\ See 17 CFR 270.24b-4.
    \13\ See 15 U.S.C. 80a-24(b). This filing requirement applies to
sales material concerning any registered open-end management
investment company, any registered unit investment trust (``UIT''),
or any registered face-amount certificate company (``FACC'').
---------------------------------------------------------------------------

Changes to FINRA Rules Required by the FAIR Act
    As discussed in the Notice, FINRA has interpreted the FAIR Act as
requiring it to make two changes to FINRA Rules. Therefore, FINRA has
proposed: (1) To amend Rule 2241 to eliminate the quiet period
restrictions on publishing a research report or making a public
appearance concerning a covered investment fund that is the subject of
such a report; and (2) to amend Rule 2210 to create a filing exclusion
for covered investment fund research reports that qualify for the
Securities Act Rule 139b safe harbor.
FINRA Equity Research Rules
    FINRA Rule 2241 governs the publication of research reports
concerning equity securities and the analysts that produce such
research. Rule 2241 requires members to establish, maintain and enforce
written policies and procedures reasonably designed to identify and
effectively manage conflicts of interest related to the preparation,
content and distribution of research reports and public appearances by
research

analysts.\14\ Among other things, these policies and procedures also
must define periods during which the member must not publish or
otherwise distribute research reports, and research analysts must not
make public appearances, related to the issuer (``quiet periods''). As
discussed in the Notice, these quiet periods restrict a member that has
participated as an underwriter or dealer in an initial public offering
(``IPO''), as well as managers and co-managers of secondary offerings,
from publishing research or having its research analysts make public
appearances.\15\
---------------------------------------------------------------------------

    \14\ See FINRA Rule 2241(b)(1).
    \15\ See Notice, 84 FR at 32493. See also, FINRA Rule
2241(b)(2)(I). This provision contains specified exceptions to the
quiet periods for research reports and public appearances following
an offering of securities of an Emerging Growth Company, for reports
or appearances that discuss significant news or events concerning a
subject company, and for reports and appearances regarding subject
companies with ``actively traded securities'' as defined in SEC
Regulation M.
---------------------------------------------------------------------------

    While Rule 2241 excludes from its definition of ``research report''
communications related to mutual funds, the Rule does apply to
communications that meet the definition of ``research report'' under
Rule 2241 concerning other covered investment funds, including closed-
end funds (``CEFs''), exchange-traded funds (``ETFs''), BDCs, UITs, and
commodity or currency funds.\16\ Therefore, research reports (as
defined under Rule 2241) on covered investment funds (other than mutual
funds) are subject to Rule 2241's quiet periods if such research
reports are published by an underwriter or dealer in the IPO or manager
or co-manager of a secondary offering.
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    \16\ See FINRA Rule 2241(a)(11).
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    As discussed above, Section 2(b) of the FAIR Act requires the SEC
to prohibit any SRO from maintaining or enforcing any rule that would
prohibit the ability of a member to:
     Publish or distribute a covered investment fund research
report solely because the member is also participating in a registered
offering or other distribution of the fund; or
     Participate in a registered offering or other distribution
of securities of a covered investment fund solely because the member
has published or distributed a covered investment fund research report
about the fund or its securities.\17\
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    \17\ See Section 2(b)(3) of the FAIR Act.
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    Therefore, FINRA's proposal to amend Rule 2241 excepts from the
Rule's quiet period requirements the publication or distribution of
research reports and research analysts' public appearances if the
member has participated in the offering of the subject company's
securities.\18\ Under this new proposed exception, the quiet period
requirements shall not apply to a research report or a public
appearance following any offering of the securities of a covered
investment fund that is the subject of a covered investment fund
research report.\19\ Although the FAIR Act does not address quiet
periods for public appearances by research analysts, FINRA also
proposes to eliminate such quiet periods for public appearances
concerning a covered investment fund. Under Rule 2241, quiet periods
for both research reports and public appearances are the same, and
FINRA believes elimination of both quiet periods would advance the
policy objectives of the FAIR Act.\20\
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    \18\ As discussed above, because the definition of ``research
report'' under Rule 2241 is narrower than the definition of
``research report'' under the FAIR Act, not all covered investment
fund research reports are subject to Rule 2241. Nevertheless, to the
extent that a covered investment fund research report is also a
research report subject to Rule 2241, the publication and
distribution of such reports will not be subject to the rule's quiet
periods.
    \19\ FINRA also proposes to define the terms ``covered
investment fund'' and ``covered investment fund research report'' as
having the same meanings as in Securities Act Rule 139b. See
Proposed FINRA Rules 2241(a)(15) and (16).
    \20\ FINRA rules do not prohibit a member from participating in
a registered offering or other distribution of securities of a
covered investment fund solely because the member has published
research about the fund. Accordingly, there is no need to amend any
FINRA rule to meet this requirement of section 2(b)(3) of the FAIR
Act or Securities Act Rule 139b(b).
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Elimination of Filing Requirement
    As discussed above, section 24(b) of the Investment Company Act
requires registered open-end management investment companies,
registered UITs, registered FACCs, and their underwriters to file sales
material for the funds with the SEC within 10 days of first use.
Investment Company Act Rule 24b-3 provides that any sales material
shall be deemed filed with the SEC for purposes of section 24(b) upon
filing with a registered national securities association that has
adopted rules providing standards for the investment company
advertising practices of its members and has established and
implemented procedures to review that advertising.\21\
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    \21\ FINRA is currently the only national securities association
registered under the Exchange Act that has adopted such rules and
procedures.
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    Accordingly, virtually all principal underwriters of mutual funds,
ETFs, UITs and FACCs satisfy the section 24(b) requirement by filing
their sales material with FINRA. Rule 2210 requires members to file
within 10 business days of first use or publication retail
communications that promote or recommend a specific registered
investment company or family of registered investment companies
(including mutual funds, ETFs, variable insurance products, CEFs and
UITs), as well as retail communications that concern any other
registered security that is derived from or based on a single security,
a basket of securities, an index, a commodity, a debt issuance or a
foreign currency.\22\
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    \22\ See FINRA Rules 2210(c)(3)(A) and (D). For a one-year
period beginning on the date reflected in FINRA's Central
Registration Depository (CRD) system as the date that FINRA
membership became effective, a member also must file with FINRA at
least 10 business days prior to first use any broadly disseminated
retail communication, regardless of whether it concerns a registered
investment company. See FINRA Rule 2210(c)(1)(A). In addition, a
member must file at least 10 business days prior to first use any
retail communication concerning registered investment companies that
includes performance rankings or comparisons that are not generally
published, or that were created by the investment company, its
underwriter, or an affiliate. See FINRA Rule 2210(c)(2)(A).
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    As discussed in the Notice, pursuant to section 2(b)(4) of the FAIR
Act, the SEC has adopted Investment Company Act Rule 24b-4, which
provides that a covered investment fund research report, as defined in
Securities Act Rule 139b(c)(3), of a covered investment fund registered
as an investment company under the Investment Company Act, shall not be
subject to section 24(b) of the Act or any rules or regulations
thereunder. However, a covered investment fund research report is still
subject to the section 24(b) filing requirement if the report is not
subject to the content standards of any SRO rules related to research
reports, including those contained in the SRO's rules governing
communications with the public regarding investment companies or
substantially similar standards.\23\
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    \23\ See 17 CFR 270.24b-4.
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    As discussed above, section 2(c)(2) of the FAIR Act provides that
nothing in the Investment Company Act shall be construed as in any way
limiting the authority of any SRO to examine or supervise a member's
practices in connection with the member's publication or distribution
of a covered investment fund research report for compliance with
applicable provisions of the Federal securities laws or SRO rules
related to research reports, including those contained in rules
governing communications with the public, or to ``require the filing of
communications with the public the purpose of which is not to provide
research and analysis of covered investment funds.'' \24\ Accordingly,

FINRA interpreted the FAIR Act as requiring FINRA to create a filing
exclusion in Rule 2210 for covered investment fund research reports,
but permits FINRA to require the filing of a covered investment fund
research report if the purpose of the report is not to provide research
and analysis of covered investment funds.\25\
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    \24\ See section 2(c)(2) of the FAIR Act.
    \25\ See Notice, 83 FR at 32494.
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    Further, FINRA stated it intended to create a rule that furthers
the purposes of the FAIR Act, protects investors, and is relatively
straightforward for broker-dealers to implement. FINRA believes that
these objectives could best be achieved if the filing exclusion applies
to any ``covered investment fund research report'' as defined by Rule
139b that qualifies for the Rule 139b safe harbor.\26\ Moreover, FINRA
believes that the SEC, through rulemaking, had determined which
research reports should be subject to the Rule 139b safe harbor, and
there is no policy reason to create a filing exclusion for covered
investment fund research reports that differed from this standard.
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    \26\ In the Notice, FINRA summarized comments that the
Commission had discussed in the Release that recommended that FINRA
modify its rules. FINRA also explained that it did not modify the
definition of ``research report'' under FINRA Rule 2241 to match the
definition of ``research report'' under the FAIR Act and Rule 139b
because FINRA believes that it would be inconsistent with the
requirements of Section 15D of the Exchange Act to do so. See
Notice, 83 FR at 32494-32495.
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    As stated above, the FAIR Act authorizes FINRA to require members
to file any covered investment fund research report the purpose of
which is not to provide research and analysis of covered investment
funds. As described more fully in the Notice, FINRA considered how and
whether to treat such reports.\27\ FINRA believes that the intent of
the FAIR Act and Rule 139b is to increase the volume and publication of
research reports on covered investment funds subject to appropriate
conditions, and thus believes that its proposed filing exclusion should
be consistent with this approach. Moreover, FINRA believes that Rule
139b's requirements reflect the Commission's careful consideration of
balancing the need for more fund research with investor protection.\28\
For these reasons, FINRA has proposed to exclude from filing all
covered investment fund research reports that qualify for the Rule 139b
safe harbor.\29\
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    \27\ See, Notice, 83 FR 32495.
    \28\ See generally Release, supra note 10, at 64183-64193.
    \29\ Of course, FINRA may still review such reports through
examinations, targeted sweeps, or spot checks, and such reports will
remain subject to the content standards of FINRA rules governing
communications with the public. See Section 2(c)(2) of the FAIR Act;
see also Release, supra note 10, at 64194 and fn. 185.
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    Therefore, FINRA has proposed to create a new filing exclusion
under Rule 2210 for ``any covered investment fund research report that
is deemed for purposes of sections 2(a)(10) and 5(c) of the Securities
Act not to constitute an offer for sale or offer to sell a security
under Securities Act Rule 139b.'' \30\ FINRA also proposed to define
``covered investment fund research report'' as having the same meaning
given that term in paragraph (c)(3) of Securities Act 139b.\31\
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    \30\ See Notice, proposed FINRA Rule 2210(c)(7)(P).
    \31\ See Notice, proposed FINRA Rule 2210(a)(7).
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Affiliated Research Reports
    The FAIR Act and Securities Act Rule 139b define ``covered
investment fund research report'' to exclude a research report to the
extent that the report is published or distributed by the covered
investment fund, any affiliate of the covered investment fund, or any
broker or dealer that is an investment adviser (or an affiliated person
of an investment adviser) for the covered investment fund.\32\ Thus,
research reports published or distributed by a covered investment fund,
its affiliate, or any broker-dealer that is an investment adviser (or
an affiliate of the investment adviser) for the covered investment fund
will still have to be filed under Investment Company Act section 24(b)
and FINRA Rule 2210.\33\
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    \32\ See Section 2(f)(3) of the FAIR Act and Securities Act Rule
139b(c)(3).
    \33\ If a research report concerns both a covered investment
fund that is an affiliate of the member that is publishing or
distributing the research report, as well as a third-party fund that
is not affiliated with the member publishing or distributing the
report, the research report would not qualify as a covered
investment fund research report. See Release, supra note 7, at 64191
(stating that ``[w]e believe extending the rule 139b safe harbor to
affiliated funds in industry research reports (whether industry
representation or comprehensive list reports) would not be
consistent with the intent and plain language of section 2(f)(3) of
the FAIR Act'').
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    In some cases, an investment adviser or another affiliate of a
registered investment company will enter into an agreement with an
unaffiliated broker-dealer to act as the principal underwriter for the
fund (``third-party distributor''). As described in the Notice, third-
party distributors provide a variety of services pursuant to their
distribution agreements with investment companies. Typically, these
funds' investment advisers or the funds themselves prepare the retail
communications, and then submit the communications to the third-party
distributor for compliance review and filing with FINRA and may be
posted on the investment adviser's or the fund's or an affiliate's
websites or through other media. As the SEC noted in the Release, one
factor to consider in evaluating whether a research report has been
published or distributed by a person covered by the affiliate exclusion
from the definition of covered investment fund research report is the
extent of such person's involvement in the preparation of the research
report.\34\ The Commission refers to such affiliate involvement or
endorsement as ``the entanglement or adoption theory, respectively.''
\35\
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    \34\ See Release, supra note 10, at 64182.
    \35\ See supra note 34.
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    Thus, FINRA stated that it will not consider research reports on
covered investment funds to be excluded from filing under the proposed
changes to Rule 2210 if personnel of the covered investment fund, any
affiliate of the fund, or any broker-dealer that is the investment
adviser or an affiliated person of the investment adviser were
entangled with the preparation of the report, or had adopted its
contents after it had been prepared.\36\
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    \36\ See Release, supra note 10, at 64181-64183 (discussion of
affiliate exclusion). For example, if a third-party distributor
publishes or distributes research concerning a fund that was written
by personnel of the fund's investment adviser, the report still
would be subject to filing under Rule 2210.
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III. Comment Summary

    As noted above, the Commission received one comment letter on the
proposed rule change, supporting the proposal.\37\ The commenter
strongly supports FINRA's proposed amendments, stating that the
proposal aligns FINRA's quiet period requirements and filing exclusion
applicable to covered investment funds with the SEC's rules adopted to
implement the FAIR Act and does so in a manner that is streamlined and
straightforward.\38\ The commenter believes FINRA's clarification of
the applicability of quiet periods of Rule 2241 removes a potential
ambiguity and impediment to broker-dealers' use of the safe harbor.\39\
The commenter agrees with FINRA's determination that the proposed
filing exclusion in FINRA Rule 2210 for covered investment fund
research reports not differ from the standard adopted by the SEC in
Rule 139b.\40\ The commenter strongly supports this streamlined
approach proposed by FINRA as benefitting investors, funds and broker-
dealers by

ensuring broker-dealers producing such reports need only conduct one
legal analysis to comply with both the SEC and FINRA rules.\41\
According to the commenter, the streamlined amendments would help
facilitate broker-dealers' use of the safe harbor which the commenter
believes would generate useful fund information for investors.\42\
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    \37\ See supra note 5.
    \38\ See ICI Letter.
    \39\ Id.
    \40\ Id.
    \41\ Id.
    \42\ Id.
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IV. Discussion and Commission Findings

    After careful review of the proposed rule change and the comment
letter, the Commission finds that the proposal is consistent with the
requirements of the Exchange Act and the rules and regulations
thereunder that are applicable to a national securities
association.\43\ Specifically, the Commission finds that the proposed
rule change is consistent with Section 15A(b)(6) of the Exchange
Act,\44\ which requires, among other things, that FINRA rules be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, and, in general, to
protect investors and the public interest.
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    \43\ In approving this rule change, the Commission has
considered the rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
    \44\ 15 U.S.C. 78o-3(b)(6).
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Protection of Investors and the Public Interest

    The Commission considers FINRA's proposed changes to the FINRA Rule
2241 quiet periods applicable to publication of covered investment fund
research reports to be consistent with the language and purposes of the
FAIR Act. In addition, the Commission believes that FINRA's additional
proposed change to eliminate quiet periods applicable to public
appearances involving an offering of covered investment fund securities
provides consistency and clarity with respects to members that produce
research reports for covered investment funds.
    The Commission believes that the proposed rule change would clarify
the applicability of FINRA Rule 2241 quiet periods to covered
investment funds that are subject of a research report, as well as
further the purposes of the FAIR Act which directed the SEC to extend
the current safe harbor available under Securities Act Rule 139 to a
covered investment fund research report. The Commission believes the
extension of the safe harbor in Rule 139b should improve investors'
access to potentially useful and timely information about such covered
investment funds which furthers the public interest. The consistency of
standards in Rule 139b and FINRA Rule 2241 provides clarity to broker-
dealers, funds and their affiliates which in turn reduces the cost of
compliance.
    The Commission also believes that the proposed filing exclusion
under FINRA Rule 2210 for covered investment fund research reports that
qualify for the Rule 139b safe harbor is consistent with the FAIR Act's
intent to increase the volume and publication of research reports on
covered investment funds subject to appropriate conditions. The
Commission believes that this proposed rule change will improve
efficiency and reduce regulatory burden without diminishing investor
protection. Specifically, the consistency of standards in Rule 139b and
FINRA Rule 2210 provides clarity to broker-dealers, funds and their
affiliates as to which research reports constitute ``covered investment
fund research reports,'' which in turn reduces the cost of compliance.
In addition, FINRA retains other methods to review covered investment
fund research reports, such as through examinations, targeted sweeps,
or spot checks. Thus, the Commission considers proposed FINRA Rule 2210
and its consistency with the Rule 139b safe harbor as a clear and
appropriate approach to furthering the purposes of the FAIR Act and is
consistent with protecting investors and the public interest.
    Taking into consideration FINRA's views and the commenter's
support, the Commission believes that the proposal is consistent with
the Exchange Act. In particular, the Commission believes that the
proposed rule change is appropriate and designed to protect investors
and the public interest, consistent with Section 15(A)(b)(6) of the
Exchange Act. For these reasons, the Commission finds that the proposed
rule change is consistent with the Exchange Act and the rules and
regulations thereunder.

V. Conclusion

    It is therefore ordered pursuant to Section 19(b)(2) of the
Exchange Act \45\ that the proposal (SR-FINRA-2018-019), be and hereby
is approved.
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    \45\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\46\
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    \46\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-18076 Filed 8-21-19; 8:45 am]
BILLING CODE 8011-01-P