ENVIRONMENTAL MODELING for HALOHYDANTOINS PDM4 MODEL Page 2 of 10 INTRODUCTION This document provides estimated environmental concentrations ( EECs) in the receiving body of water from the use of hydantoins in once through industrial water systems. The Probabilistic Distribution Model version 4 ( PDM4), part of the new EFAST model that Versar is currently developing, to be publically released in the future, was used to evaluate the hydantoin concentration in stream water. The probabilistic dilution algorithm remains the same as that used in EFAST v2.0, but the underlying dataset of facilities/ reaches for this version is more accurate. Using a steam electric power plant as the representative facility, the number of days that the concentration in the water body exceeded threshold levels was determined.

Overview Of PDM4 PDM4 calculates downstream chemical concentrations from a chemical discharge using the probabilistic distribution model. The algorithm used is taken from DiToro, 1984. A simple mass balance approach forms the basis of PDM; however, the input variables are not single point estimates, because, in reality, these variables are not constant. Streams follow a highly variable seasonal flow pattern and numerous variables in a manufacturing process can affect the chemical concentration and flow rate of the effluent. PDM4 models the stream flow as constantly changing and calculates the probability that the concentration in given target stream will exceed some target value. Specifically, it calculates the percent of days per year that the concentration of concern is exceeded. PDM4 uses probability distributions as inputs and calculates the resulting probability distribution of the concentration in the stream.

INPUTS Power Plant Information In modeling the fate of Hydantoins in the receiving body of water, the following assumptions were made regarding the representative power plant to be modeled:

° The 7Q10 flow rate ( a flow rate that, once every ten years, a stream is expected to be below for seven consecutive days) was assumed to be the normal cooling water flow rate. This value was chosen because it is assumed that electric plants would need to have a steady supply of cooling water, and the 7Q10 flow reflects a rate that could be maintained continuously by the power plant. This may is not a conservative assumption, since electric plants may use more cooling water under normal conditions, though at a greater risk of running out of usable water. For lack of better data, these values were used. ° It is assumed that the system is running without any noticeable fouling, so that only maintenance applications of the chemical are necessary. ° The application rate of the chemical is the maximum rate listed on the label for use in maintaining once through cooling water systems. The application rate is 0.3 lbs product/ 1000 gallons of water contained in the system. Since the product is 98% a. i., the application rate can be expressed as 0.294 lbs a. i./ 1000 gallons. ( The label also notes that, Page 3 of 10 for systems that are noticeably fouled, up to 0.6 lbs product/ 1000 gallons should be used as an initial dose, to be followed later by the regular maintenance dose. This initial dose application rate was not modeled). ° The label specifies that the application of the chemical should be repeated as needed " to maintain one to three ppm chlorine residual for at least 4 hours." For this model, it is assumed that one application per day is sufficient to attain this level.

PDM4 Model Inputs A summary of the input parameters is described below. To see the complete input and output files, please refer to the appendix of this report ° Release Days  Dang ( 1996) has produced a document that includes estimates for typical operating conditions of once through industrial cooling systems. According to Dang ( 1996), it is expected that the product will be applied between 100 and 250 days a year, though there may be seasonal differences in the rate of use. Although typical applications are applied within the time frames above, PDM4 runs the model on the basis of 365 days or a full year.

° Pretreatment Release  The amount released per day can be calculated by multiplying the application rate ( 0.294 lbs a. i./ 1000 gallons) by the amount of water contained in the system. This volume ( the water contained between the inlet and the outlet) is difficult to determine, since power plants will vary greatly. In general, it is expected that there will be pipes leading from the water body to the heat exchanger, that the heat exchanger must be of sufficient volume to adequately condense the boiler steam, and that there will be pipes leading from the heat exchanger back to the water body. The variables that are difficult to determine include the number of heat exchangers and inlet/ outlet pipes in the system, the existence of reservoirs and sumps, the types of heat exchangers that are used, and the distance between the heat exchangers and the water body. A search on the Internet revealed no estimates of the volume in question, nor did it reveal typical dimensions for either the inlet pipes, the heat exchangers, or any of the variables listed above. Therefore, a different approach, estimating the volume by using retention times, was used. A study was performed in which a conventional cooling water system was used as a biofilm reactor for wastewater ( Cloete et al, 1999). In this study, the cooling system was operated at different wastewater flow regimes. The hydraulic retention times used in this model varied between 8 minutes 20 seconds and 26 minutes 2 seconds. Virginia's Dominion Power Company was contacted and estimates on retention times of 8 to 12 minutes were also obtained. The range was based on the number of units in operation and stream flow conditions at time of operation. Data from Dominion Power Company, though anecdotal, were chosen over the data from Cloete et al, 1999, since Cloete et al describes retention times for much smaller scale cooling systems. Loads were calculated assuming a retention time of 12 minutes, to be conservative. The volumes of the cooling water systems were calculated by multiplying the retention time by the flow rate of cooling water. For Page 4 of 10 example, for a water system with a flow rate of 725 MGD, the calculations yield a volume of 6.04 million gallons for the cooling water system. Multiplying by the application rate of 0.294 lbs a. i. per 1000 gallons of water leads to a final input load of 807 kg/ day.

° Concentration of Concern  PDM4 is designed to report the number of days that the concentration in the water body exceeds a concentration of concern that has been specified by the user. For this study, the model was run multiple times using different concentrations of concern to determine a curve. The concentration of concern for each flow regime was as follows: 0.5, 0.025, 0.005, 0.025, 0.050, 0.25, 0.50, 2.5, 5.0, 25, 50, 250, 500, 2500, and 5000 ppb.

The input parameters are summarized in Table 1 below.

Table 1. PDM4 Model Inputs Parameter Value Rationale Industry Type Steam Electric Power Plants ( SIC # 4911) Various NPDES EPA Assumption as being the representative facility for once through industrial water systems using hydantoins.

Release Days 250, 365 Dang, 1996, and PDM4 Model.

Pretreatment Release 807 kg/ day for 725 MGD cooling water system. Lower values used for smaller systems. Based on an 12 minute hydraulic residence time and the maximum application rate listed on the label.

Concentration of Concern 0.5 ppb to 5000 ppb A range was used to determine a curve.

The three different flow regimes consisted of power plants with stream flow rates of 100 ± 10 MGD ( million gallons per day), 500 ± 50 MGD, and 1000 ± 50 MGD. The low, medium, and high stream flow rates correspond to 378.5 ± 37.85, 1982.5 ± 189.25, and 3785 ± 189.25 million liters per day. These plants were pulled from a database of NPDES plant codes based on the above criterion. Tables 2, 3, and 4 below show details regarding the power plants and their cooling streams. Page 5 of 10 Table 2. Low Flow ( 100 MGD) Stream Specifications NPDES Mean Stream Flow ( MLD) Mean7Q101 Stream Flow ( MLD) Mean Effluent Flow ( MLD) Pretreatment Release ( kg/ day) IA0033235 401.08 2.84 0.11 0.833 PA0002062 391.05 4.09 51.97 1.20 LA0003042 383.57 44.57 2.56 13.1 MI0038172 379.25 13.97 1980.49 4.10 OK0002682 363.06 3.37 4.66 1.00 WV0005525 358.67 14.56 4212.65 4.28 IL0036919 355.83 3.89 2407.06 1.14 LA0036145 354.06 13.56 0.23 3.99 UT0000116 351.97 32.39 0.59 9.52 TX0054500 351.57 26.85 9.08 7.89 PA0008443 336.52 12.64 28.94 3.71 IL0048321 336.36 97.05 46.38 28.5 1. Seven consecutive days of lowest stream flows over a ten year period Table 3. Medium Flow ( 500 MGD) Stream Specifications NPDES Mean Stream Flow ( MLD) Mean7Q101 Stream Flow ( MLD) Mean Effluent Flow ( MLD) Pretreatment Release ( kg/ day) MA0004367 2029.15 226.776 21.259 66.6 IA0000108 1973.2 61.301 1.737 18.0 NM0000108 1970.38 5.924 4.353 1.74 FL0025526 1959.16 653.078 443.652 192 IN0032948 1948.06 152.814 0.053 44.9 TX0001163 1867.21 11.373 1911.43 3.34 OH0010421 1840.04 59.802 34.878 17.6 IN0041246 1819.99 167.187 90.014 49.1 PA0002054 1792.41 114.968 711.913 33.8 MN0000906 1749.68 28.936 3.693 8.50 NH0001431 1733.51 75.685 30.28 22.2 IN0038806 1715.15 58.192 0.32 17.1 1. Seven consecutive days of lowest stream flows over a ten year period Table 4. High Flow ( 1000 MGD) Stream Specifications NPDES Mean Stream Flow ( MLD) Mean7Q101 Stream Flow ( MLD) Mean Effluent Flow ( MLD) Pretreatment Release ( kg/ day) GA0004341 3964.96 837.511 0.545 246 WA0003280 3831.92 591.866 129.447 174 KS0079057 3757.2 20.42 2452.56 6.00 NC0005088 3693.64 812.478 165.318 239 SC0001104 3652.9 50.251 3.687 14.7 IL0002186 3635.95 1169.28 1557.46 344 1. Seven consecutive days of lowest stream flows over a ten year period Page 6 of 10 Twelve different sites throughout the United States were tested in the model from the low and medium stream regimes, and six were tested from the high flow regime.

RESULTS PDM4 calculates, for each reach, the percent of days per year that a reach would have concentrations above a particular concentration of concern. These values were averaged by Versar among the three different flow regimes, giving average percentages of exceedence. Versar also looked at the worst case scenarios for the low, middle, and high stream flows considered.

Results are presented in Tables 5 and 6. Taking these percentages and multiplying by 365 days a year, one can calculate the number of days out of the year the hydantoin ion concentration in the water will be greater than any given COC. For all stream flow categories, the average exceedance rate is less than one day per ten years ( 0.027%) if the concentration of concern is 2500 ppb or above. The relationship between the concentration of concern and the exceedance rates appear to be very similar for all three steam sizes considered. Standard deviations are presented in Table 5, but should be interpreted with care. Coefficients of variation ( standard deviation divided by average) are small for small COCs because the exceedance rates are very near 100% in all cases. At larger COCs, the coefficients of variation become larger, as differences in stream flows become more pronounced.

Table 5. Average Percent of Days COC Exceeded COC1 ( ppb) LF2 Percent Days COC Exceeded (%) LFStandard Deviation (%) MF3 Percent Days COC Exceeded (%) MFStandard Deviation (%) HF4 Percent Days COC Exceeded (%) HFStandard Deviation (%) 0.5 82.9 30.1 96.1 7.93 97.4 4.80 2.5 65.1 40.4 83.1 26.1 82.0 33.6 5 56.9 39.6 74.6 28.7 76.8 39.3 25 31.1 29.7 41.3 24.7 57.8 37.0 50 19.1 21.3 25.4 19.4 40.8 28.0 250 2.49 3.52 3.33 2.99 5.52 4.44 500 0.663 1.05 0.875 0.929 1.31 1.31 2500 0.0118 0.0253 0.0188 0.0375 0.0119 0.0190 5000 1.24x10 3 2.75x10 3 2.56x10 3 5.56x10 3 8.29x10 4 1.54x10 3 1. COC = Concentration of Concern 2. LF = Low Flow Regime ( 100 MGD) 3. MF = Medium Flow Regime ( 500 MGD) 4. HF = High Flow Regime ( 1000 MGD)

Figure 1 shows the same data as Table 1. As expected, the general trend in all three flow regimes is that the percent of days the COC is exceeded tends to decrease faster as the COC is increased. Figure 1 also shows clearly the similarities between the three steam flow size categories modeled. Page 7 of 10 Figure 1. Average Exceedance Rates 0.0001 0.001 0.01 0.1 1 10 100 0.1 1 10 100 1000 10000 Concentration of Concern ( ppb) Percent of Days Exceeded per Year (%)

Low ( 100 MGD)

Middle ( 500 MGD)

High ( 1000 MGD)

Table 6 lists the calculations for those power plants with the highest exceedance rates for each of the three stream flow sizes considered. If the COC is 2500 ppb, the worst case power plant considered in this model ( see MF column in Table 7) exceeds the COC about once every two years.

Table 6. Worst Case Scenarios: Percent of Days COC Exceeded COC1 ( ppb) LF2 Percent Days COC Exceeded (%) MF3 Percent Days COC Exceeded (%) HF4 Percent Days COC Exceeded (%) 0.5 100 100 100 2.5 100 100 100 5 99.8 99.9 100 25 87.7 91.2 91.4 50 65.8 70.6 68.2 250 9.78 8.97 11.3 500 3.33 3.21 3.39 2500 0.0756 0.126 0.0494 5000 7.22x10 3 0.0186 3.93x10 3 1. COC = Concentration of Concern 2. LF = Low Flow Regime ( 100 MGD) 3. MF = Medium Flow Regime ( 500 MGD) 4. HF = High Flow Regime ( 1000 MGD) Page 8 of 10 Table 7 shows the average of all power plants modeled, and compares these values to the average of the three worst case scenarios that were presented in Table 6. At high COCs, the difference between the average and worst case scenarios is about one order of magnitude. This table can be used to determine an appropriate COC, based on the level of risk that is deemed acceptable. The choice between using either the total average column or the worst case scenarios average column will depend on how conservative a value is deemed necessary.

Table 7. Total Average Exceedance Rates vs. Worst Case Exceedance Rates COC ( ppb) Percent of Days COC Exceeded (%)

Total Average Average of the Three Worst Case Scenarios ( Table 6)

0.5 91.1 100 2.5 75.7 100 5 68.0 99.9 25 40.5 90.1 50 26.0 68.2 250 3.43 9.90 500 0.876 3.31 2500 0.0146 0.0837 5000 0.00169 0.00993 Point Estimates of Peak Concentrations: In order to provide point estimates for calculating risk quotients ( RQs) to be used in the risk assessment, point estimates of peak concentrations over time were determined from the model output. The low flow power plant facility treating at the application rate once per day was used as a worst case scenario, and provided the following estimated environmental concentrations ( EECs):

Table 8: Summary of Estimated Environmental Concentrations of DMH in Rivers Receiving Outfall from Low Flow Power Plants Using Once Through Cooling Systems Time Period Modeled Peak Concentration of DMH Duration of Peak Concentration 4 days 36.0 ppb 24 hours 30 days 210 ppb 24 hours 60 days 313 ppb 24 hours Actual concentrations in receiving waters are likely lower, and will likely not show the increasing trend indicated in Table 8, due to higher flow rates and possible degradation/ dissipation of DMH Page 9 of 10 by mechanisms other than hydrolysis.

UNCERTAINTIES/ LIMITATIONS The following limitations apply to the results of this model:

° Dominion Power Company estimates for retention times vary according to stream flow conditions and the number of units in operation on that given day.

° The PDM4 database contains data on steam electric powerplants in the United States. In the database, no differentiation was made between those powerplants that used a oncethrough cooling water system and those that did not. In the absence of better data, it was assumed that all powerplants in the database used once through cooling water systems, and that the amount of cooling water used in normal conditions was equal to the 7Q10 flow. These assumptions may not be conservative.

° It has been assumed that a maintenance dose of the chemical is required daily. It is unclear from the label whether or not treatment is needed this frequently.

° PDM4 is a screening level model. Screening level models are rarely if ever used as the sole justification for regulatory decision making at EPA. Additional data and more rigorous tools are used to improve the estimates of exposures and risks for such decisions. Thus, although PDM4 may be very useful to industry, its results may not accurately reflect all of the information and data used by EPA to make a regulatory decision on a chemical. Page 10 of 10 REFERENCES Cloete TE, Smith Z, Saayman G. A Cooling Water System as a Biofilm Reactor for the Treatment of Municipal Wastewater. Water SA Vol. 25 No. 3 July 1999. Available on website http:// www. wrc. org. za.

Dang W, 1996. Antimicrobial Pesticides, Uses, Human Exposures, and Risk Assessments. March, 1996.

DiToro, D. M. 1984. Probability Model of Stream Quality Due to Runoff. ASCE. Journal of Environmental Engineering. 110( 3): 607 628.

EFAST Help, beta version, 2004.

Genest, Dan, Dominion Power. Telephone interview. June 14, 2004.


[Federal Register Volume 78, Number 200 (Wednesday, October 16, 2013)]
[Notices]
[Pages 62317-62319]
[FR Doc No: 2013-24469]

========================================================================
Notices
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains documents other than rules
or proposed rules that are applicable to the public. Notices of hearings
and investigations, committee meetings, agency decisions and rulings,
delegations of authority, filing of petitions and applications and agency
statements of organization and functions are examples of documents
appearing in this section.

========================================================================

Federal Register / Vol. 78, No. 200 / Wednesday, October 16, 2013 /
Notices

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. PF13-17-000]

Clarksville Gas and Water; Notice of Intent To Prepare an
Environmental Assessment for the Planned Interconnect Pipeline Project,
Request for Comments on Environmental Issues, and Notice of Public
Scoping Meeting

    The staff of the Federal Energy Regulatory Commission (FERC or
Commission) will prepare an environmental assessment (EA) that will
discuss the environmental impacts of the Interconnect Pipeline Project
(Project) involving construction and operation of facilities by
Clarksville Gas and Water (Clarksville) in Todd County, Kentucky and
Montgomery County, Tennessee. The Commission will use this EA in its
decision-making process to determine whether the Project is in the
public convenience and necessity.
    This notice announces the opening of the scoping process the
Commission will use to gather input from the public and interested
agencies on the Project. Your input will help the Commission staff
determine what issues they need to evaluate in the EA. Please note that
the scoping period will close on November 7, 2013.
    You may submit comments in written form or verbally. Further
details on how to submit written comments are in the Public
Participation section of this notice. In lieu of or in addition to
sending written comments, the Commission invites you to attend the
public scoping meeting scheduled as follows:

------------------------------------------------------------------------
             Date and time                           Location
------------------------------------------------------------------------
October 22, 2013, 7:00 p.m.............  Todd County Central High
                                          School, 806 South Main Street,
                                          Elkton, KY 42220.
------------------------------------------------------------------------

    The scoping meeting will commence at the time listed above;
however, representatives from Clarksville will be present one hour
before the meeting to describe their proposal, present maps, and answer
questions.
    This notice is being sent to the Commission's current environmental
mailing list for this Project. State and local government
representatives should notify their constituents of this planned
project and encourage them to comment on their areas of concern.
    If you are a landowner receiving this notice, a pipeline company
representative may contact you about the acquisition of an easement to
construct, operate, and maintain the planned facilities. The company
would seek to negotiate a mutually acceptable agreement. However, if
the Commission approves the Project, that approval conveys with it the
right of eminent domain. Therefore, if easement negotiations fail to
produce an agreement, the pipeline company could initiate condemnation
proceedings where compensation would be determined in accordance with
state law.
    A fact sheet prepared by the FERC entitled ``An Interstate Natural
Gas Facility On My Land? What Do I Need To Know?'' is available for
viewing on the FERC Web site (www.ferc.gov). This fact sheet addresses
a number of typically-asked questions, including the use of eminent
domain and how to participate in the Commission's proceedings.

Summary of the Planned Project

    Clarksville plans to build and operate a 23-mile-long 12-inch-
diameter natural gas pipeline along with associated valves and
appurtenant facilities in Todd County, Kentucky and Montgomery County,
Tennessee. The planned pipeline would connect to Texas Gas Transmission
LLC's pipeline in Kentucky and extend southward to Clarksville's local
distribution system in Tennessee. The Project would provide access to
additional natural gas sources to serve its retail distribution system.
    The Project would consist of the following facilities:
     Pipeline Segment 1--19.7 miles of 24-inch-diameter
pipeline in Todd County, Kentucky;
     Pipeline Segment 2--3.1 miles of 24-inch-diameter pipeline
in Montgomery County, Tennessee; and
     a pressure-reducing valve at each of mileposts 0.0 and
19.8.
    A map depicting the general location of the Project facilities is
included in appendix 1 \1\.
---------------------------------------------------------------------------

    \1\ The appendices referenced in this notice are not being
printed in the Federal Register. Copies of appendices were sent to
all those receiving this notice in the mail and are available at
www.ferc.gov using the link called ``eLibrary'' or from the
Commission's Public Reference Room, 888 First Street NE.,
Washington, DC 20426, or call<PHONE_NUMBER>. For instructions on
connecting to eLibrary, refer to the last page of this notice.
---------------------------------------------------------------------------

    Clarksville plans to begin construction of the Project in October
2014 and place the facilities in service by October 2015.

Land Requirements for Construction and Operation

    Clarksville is still in the planning phase for the Project, and
workspace requirements have not been finalized at this time. As
currently planned, construction would disturb approximately 313 acres
of land. Following construction, about 83 acres along Clarksville's
planned easement would be maintained for permanent operation of the
project facilities. The remaining acreage would be restored and allowed
to revert to former uses. About 82 percent of the planned pipeline
route overlaps or parallels existing pipeline, utility, or road rights-
of-way.

The EA Process

    The National Environmental Policy Act (NEPA) requires the
Commission to take into account the environmental impacts that could
result from an action whenever it considers the issuance of a
Certificate of Public Convenience and Necessity. NEPA also requires us
\2\ to discover and address concerns the public may have about
proposals. This process is referred to as ``scoping.'' The main goal of
the scoping process is to focus the analysis in the EA on the important
environmental issues. By this notice, the Commission requests public
comments on the scope of the issues to address in the EA. We will
consider all filed comments during the preparation of the EA.
---------------------------------------------------------------------------

    \2\ ``Us,'' ``we,'' and ``our'' refer to the environmental staff
of the Commission's Office of Energy Projects.
---------------------------------------------------------------------------

    In the EA we will discuss impacts that could occur as a result of
the construction and operation of the

planned Project under these general headings:
     Geology and soils;
     water resources, fisheries, and wetlands;
     vegetation, wildlife, and threatened and endangered
species;
     socioeconomics;
     cultural resources;
     land use and cumulative impacts;
     air quality and noise; and
     public safety.
    We will also evaluate reasonable alternatives to the planned
Project or portions of the Project, and make recommendations on how to
lessen or avoid impacts on the various resource areas.
    Although no formal application has been filed, we have already
initiated our NEPA review under the Commission's Pre-filing Process.
The purpose of the Pre-filing Process is to encourage early involvement
of interested stakeholders and to identify and resolve issues before an
application is filed with the FERC. As part of our pre-filing review,
we have begun to contact some federal and state agencies to discuss
their involvement in the scoping process and the preparation of the EA.
In addition, representatives from FERC participated in the public open
houses sponsored by Clarksville in the Project area in September 2013
to explain the environmental review process to interested stakeholders.
    The EA will present our independent analysis of the issues. The EA
will be available in the public record through eLibrary. We will
consider all comments on the EA before making our recommendations to
the Commission. To ensure we have the opportunity to consider and
address your comments, please carefully follow the instructions in the
Public Participation section beginning on page 5.
    With this notice, we are asking agencies with jurisdiction by law
and/or special expertise with respect to the environmental issues of
this Project to formally cooperate with us in the preparation of the
EA.\3\ Agencies that would like to request cooperating agency status
should follow the instructions for filing comments provided under the
Public Participation section of this notice.
---------------------------------------------------------------------------

    \3\ The Council on Environmental Quality regulations addressing
cooperating agency responsibilities are at 40 CFR 1501.6.
---------------------------------------------------------------------------

Consultations Under Section 106 of the National Historic Preservation
Act

    In accordance with the Advisory Council on Historic Preservation's
implementing regulations for section 106 of the National Historic
Preservation Act, we are using this notice to initiate consultation
with applicable State Historic Preservation Offices (SHPO), and to
solicit their views and those of other government agencies, interested
Indian tribes, and the public on the Project's potential effects on
historic properties.\4\ We will define the project-specific Area of
Potential Effects (APE) in consultation with the SHPOs as the Project
is further developed. On natural gas facility projects, the APE at a
minimum encompasses all areas subject to ground disturbance (examples
include construction right-of-way, contractor/pipe storage yards, and
access roads). Our EA for this Project will document our findings on
the impacts on historic properties and summarize the status of
consultations under section 106.
---------------------------------------------------------------------------

    \4\ The Advisory Council on Historic Preservation's regulations
are at 36 CFR Part 800. Historic properties are defined in those
regulations as any prehistoric or historic district, site, building,
structure, or object included in or eligible for inclusion in the
National Register for Historic Places.
---------------------------------------------------------------------------

Currently Identified Environmental Issues

    We have already identified several issues that we think deserve
attention based on a preliminary review of the planned facilities, the
environmental information provided by Clarksville, and comments
received by the public. This preliminary list of issues may be changed
based on your comments and our analysis:
     Residential impacts, including the potential for decreased
property values;
     impacts on agriculture, livestock, and wells;
     impacts on forest and streams;
     impact on hidden karst features/sinkholes;
     impacts on property value;
     restoration of property;
     consideration of routing alternatives;
     the purpose and need for the Project; and
     safety during pipeline operations.

Public Participation

    You can make a difference by providing us with your specific
comments or concerns about the project. Your comments should focus on
the potential environmental effects, reasonable alternatives, and
measures to avoid or lessen environmental impacts. The more specific
your comments, the more useful they will be. To ensure that your
comments are timely and properly recorded, please send your comments so
that they will be received in Washington, DC on or before November 6,
2013. However, this is not your only public input opportunity; please
refer to the Review Process flow chart in appendix 2.
    For your convenience, there are four methods you can use to submit
your comments to the Commission. In all instances, please reference the
project docket number (PF13-17-000) with your submission. The
Commission encourages electronic filing of comments and has expert
eFiling staff available to assist you at<PHONE_NUMBER> or
<EMAIL_ADDRESS>    1. You can file your comments electronically by using the eComment
feature, which is located on the Commission's Web site at www.ferc.gov
under the link to Documents and Filings. This is an easy method for
interested persons to submit brief, text-only comments on a project;
    2. You can file your comments electronically by using the eFiling
feature, which is located on the Commission's Web site at www.ferc.gov
under the link to Documents and Filings. With eFiling, you can provide
comments in a variety of formats by attaching them as a file with your
submission. New eFiling users must first create an account by clicking
on ``eRegister.'' You must select the type of filing you are making. If
you are filing a comment on a particular project, please select
``Comment on a Filing'';
    3. You can attend and provide either oral or written comments at a
public scoping meeting. A transcript of each meeting will be made so
that your comments will be accurately recorded and included in the
public record; or
    4. You can file a paper copy of your comments by mailing them to
the following address: Kimberly D. Bose, Secretary, Federal Energy
Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC
20426.

Environmental Mailing List

    The environmental mailing list includes federal, state, and local
government representatives and agencies; elected officials;
environmental and public interest groups; Native American Tribes; other
interested parties; and local libraries and newspapers. This list also
includes all affected landowners (as defined in the Commission's
regulations) who are potential right-of-way grantors, whose property
may be used temporarily for project purposes, or who own homes within
certain distances of aboveground facilities, and anyone who submits
comments on the Project. We will update the environmental mailing list
as the analysis proceeds to ensure that we send the information related
to this

environmental review to all individuals, organizations, and government
entities interested in and/or potentially affected by the planned
Project.
    When the EA is published for distribution, copies will be sent to
the environmental mailing list for public review and comment. If you
would prefer to receive a paper copy of the document instead of the CD
version, or would like to remove your name from the mailing list,
please return the attached Information Request (appendix 3).

Becoming an Intervenor

    Once Clarksville files its application with the Commission, you may
want to become an ``intervenor'' which is an official party to the
Commission's proceeding. Intervenors play a more formal role in the
process and are able to file briefs, appear at hearings, and be heard
by the courts if they choose to appeal the Commission's final ruling.
An intervenor formally participates in the proceeding by filing a
request to intervene. Instructions for becoming an intervenor are
included in the User's Guide under the ``e-Filing'' link on the
Commission's Web site. Please note that the Commission will not accept
requests for intervenor status at this time. You must wait until a
formal application for the project is filed with the Commission.

Additional Information

    Additional information about the project is available from the
Commission's Office of External Affairs, at (866) 208-FERC, or on the
FERC Web site (www.ferc.gov) using the eLibrary link. Click on the
eLibrary link, click on ``General Search'' and enter the docket number,
excluding the last three digits in the Docket Number field (i.e., PF13-
17). Be sure you have selected an appropriate date range. For
assistance, please contact FERC Online Support at
<EMAIL_ADDRESS>or toll free at<PHONE_NUMBER>, or for TTY,
contact<PHONE_NUMBER>. The eLibrary link also provides access to the
text of formal documents issued by the Commission, such as orders,
notices, and rulemakings.
    In addition, the Commission offers a free service called
eSubscription which allows you to keep track of all formal issuances
and submittals in specific dockets. This can reduce the amount of time
you spend researching proceedings by automatically providing you with
notification of these filings, document summaries, and direct links to
the documents. Go to www.ferc.gov/esubscribenow.htm.
    Public meetings or site visits will be posted on the Commission's
calendar located at www.ferc.gov/EventCalendar/EventsList.aspx along
with other related information.
    Finally, Clarksville has established a Web site for this Project at
http://www.cityofclarksville.com/index.aspx?page=643. The Web site
includes a project overview, environmental information, and information
for affected stakeholders.

    Dated: October 8, 2013.
Kimberly D. Bose,
Secretary.
[FR Doc. 2013-24469 Filed 10-15-13; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 82, Number 11 (Wednesday, January 18, 2017)]
[Notices]
[Pages 5563-5564]
[FR Doc No: 2017-00996]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Notice of Commission Staff Attendance

    The Federal Energy Regulatory Commission (Commission) hereby gives

notice that members of the Commission's staff may attend the following
meetings related to the transmission planning activities of Tucson
Electric Power Company, UNS Electric, Inc., Public Service Company of
New Mexico, Arizona Public Service Company, El Paso Electric Company,
Black Hills Power, Inc., Black Hills Colorado Electric Utility Company,
LP, Cheyenne Light, Fuel, & Power Company, NV Energy, Inc., and Xcel
Energy Services, Inc. on behalf of Public Service Company of Colorado:

Planning Management Committee Meeting
    January 18, 2017, 9 a.m.-3 p.m. (MST)
Regional Stakeholder Meeting
    February 16, 2017, 9 a.m.-4 p.m. (MST)

    The Planning Management Committee Meeting will be held at: Ocotillo
Training Center, 1701 E. Rio Salado Pkwy., Tempe, AZ 85281.
    The Regional Stakeholder Meeting will be held at: SRP PERA Club, 1
E. Continental Drive Tempe, Arizona 85281.
    The above-referenced meetings will be available via web conference
and teleconference.
    The above-referenced meetings are open to stakeholders.
    Further information may be found at http://www.westconnect.com/.
    The discussions at the meetings described above may address matters
at issue in the following proceeding:

ER13-75, Public Service Company of New Mexico; El Paso Electric Company

    For more information contact Nicole Cramer, Office of Energy Market
Regulation, Federal Energy Regulatory Commission at<PHONE_NUMBER> or
<EMAIL_ADDRESS>
    Dated: January 11, 2017.
Kimberly D. Bose,
Secretary.
[FR Doc. 2017-00996 Filed 1-17-17; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 77, Number 125 (Thursday, June 28, 2012)]
[Notices]
[Pages 38684-38690]
[FR Doc No: 2012-15804]

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67238; File No. SR-MSRB-2012-04]

Self-Regulatory Organizations; Municipal Securities Rulemaking
Board; Order Granting Approval of a Proposed Rule Change, as Modified
by Amendment No. 1, Relating to Proposed Rule G-43, on Broker's
Brokers; Proposed Amendments to Rule G-8, on Books and Records, Rule G-
9, on Record Retention, and Rule G-18, on Execution of Transactions;
and a Proposed Interpretive Notice on the Duties of Dealers That Use
the Services of Broker's Brokers

June 22, 2012.

I. Introduction

    On March 5, 2012, the Municipal Securities Rulemaking Board
(``MSRB'') filed with the Securities and Exchange Commission
(``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 consisting of proposed MSRB Rule
G-43, on broker's brokers; amendments to MSRB Rule G-8, on books and
records; amendments to MSRB Rule G-9, on record retention; amendments
to MSRB Rule G-18, on execution of transactions; and a proposed
interpretive notice on duties of dealers that use the services of
broker's brokers (``Proposed Notice''). The proposed rule change was
published for comment in the Federal Register on March 26, 2012.\3\ The
Commission received six comment letters regarding the proposal.\4\ On
May 3, 2012, the MSRB submitted a response to the comment letters \5\
and filed Amendment No. 1 to the proposed rule change.\6\ On May 9,
2012, the Commission designated a longer period to act on the proposed
rule change, until June 22, 2012.\7\ This order grants approval of the
proposed rule change, as modified by Amendment No. 1 thereto.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 66625 (March 20,
2012), 77 FR 17548 (``Notice'').
    \4\ See Letters to Elizabeth M. Murphy, Secretary, Commission,
from John Webber, Chief Compliance Officer, Advisors Asset
Management, Inc., dated April 16, 2012 (``AAM Letter''); Michael
Nicholas, Chief Executive Officer, Bond Dealers of America, dated
April 16, 2012 (``BDA Letter''); Thomas S. Vales, Chief Executive
Officer, TMC Bonds, LLC, received April 16, 2012 (``TMC Letter'');
Mark J. Epstein, President & Chief Executive Officer, Hartfield,
Titus & Donnelly, dated April 18, 2012 (``HTD Letter''); Paige W.
Pierce, President & Chief Executive Officer, RW Smith & Associates,
Inc., received April 19, 2012 (``RWS Letter''); and August J.
Hoerrner, Senior Managing Director, Chapdelaine Tullett Prebon, LLC,
dated May 16, 2012 (``CTP Letter''). The comment letters received by
the Commission are available at http://www.sec.gov/comments/sr-msrb-2012-04/msrb201204.shtml.
    \5\ See Letter to Elizabeth M. Murphy, Secretary, Commission,
from Margaret C. Henry, General Counsel, Market Regulation, MSRB,
dated May 3, 2012 (``MSRB Response'').
    \6\ Amendment No. 1 would partially amend the text of the
original proposed rule change to clarify that (i) MSRB Rule G-
43(c)(i)(N) would only prohibit a broker's broker from accepting a
new bid or a changed bid from a bidder in a bid-wanted after the
broker's broker has notified that same bidder whether its bid was
the high bid (i.e., ``being used'') in the same bid-wanted; and (ii)
a municipal security would be considered ``traded'' through a
broker's broker within the meaning of MSRB Rule G-43(d)(iv) when it
has been purchased by the broker's broker from the seller and sold
to the bidder by the broker's broker, as an intermediary. Because
the changes made in Amendment No. 1 do not materially alter the
substance of the proposed rule change or raise any novel regulatory
issues, Amendment No. 1 is not subject to notice and comment.
    \7\ Securities Exchange Act Release No. 66954, 77 FR 28653 (May
15, 2012).
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    Broker's brokers, who act as intermediaries between selling dealers
and bidding dealers, serve an important function in providing liquidity
for investors in the municipal securities

market. Broker's brokers are subject to general standards, such as MSRB
Rules G-17 and G-18, concerning their conduct in the municipal
securities market. MSRB Rule G-17 requires broker's brokers to deal
fairly and not engage in any ``deceptive, dishonest, or unfair
practice.'' \8\ MSRB Rule G-18 requires that they make reasonable
efforts to obtain a fair and reasonable price in relation to prevailing
market conditions.\9\
---------------------------------------------------------------------------

    \8\ See MSRB Rule G-17.
    \9\ See MSRB Rule G-18.
---------------------------------------------------------------------------

    Despite these general standards of care, concerns have arisen
regarding the conduct of broker's brokers. Recent Commission and
Financial Industry Regulatory Authority (``FINRA'') enforcement actions
have highlighted misconduct in the broker's broker industry with
respect to their municipal securities activities.\10\ This has raised
concerns about the integrity of broker's brokers bid-wanted and
offering processes.
---------------------------------------------------------------------------

    \10\ See Notice, 77 FR at 17549 n.4. See also FINRA v.
Associated Bond Brokers, Inc. Letter of Acceptance, Waiver and
Consent No. E052004018001 (November 19, 2007) (settlement in
connection with alleged violation of MSRB Rule G-17 by broker's
broker due to lowering the highest bids to prices closer to the
cover bids without informing either bidders or sellers); FINRA v.
Butler Muni, LLC Letter of Acceptance, Waiver and Consent No.
2006007537201 (May 28, 2010) (settlement in connection with alleged
violation of MSRB Rule G-17 by broker's broker due to failure to
inform the seller of higher bids submitted by the highest bidders);
D. M. Keck & Company, Inc. d/b/a Discount Munibrokers, et al.,
Securities Exchange Act Release No. 56543 (September 27, 2007)
(settlement in connection with alleged violation of MSRB Rules G-13
and G-17 by broker's broker for dissemination of fake cover bids to
both seller and winning bidder; also settlement in connection with
alleged violation of MSRB Rules G-14 and G-17 by broker's broker due
to payment to seller of more than highest bid on some trades in
return for a price lower than the highest bid on other trades, in
each case reporting the fictitious trade prices to the MSRB's Real-
Time Trade Reporting System); Regional Brokers, Inc. et al.,
Securities Exchange Act Release No. 56542 (September 27, 2007)
(settlement in connection with alleged violation of Rules G-13 and
G-17 by broker's broker for dissemination of fake cover bids to both
seller and winning bidder; broker's broker allegedly violated MSRB
Rule G-17 by accepting bids after bid deadline); SEC v. Wolfe &
Hurst Bond Brokers, Inc. et al., Securities Exchange Act Release No.
59913 (May 13, 2009) (settlement in connection with alleged
violation of MSRB Rule G-17 by broker's broker for dissemination of
fake cover bids to both seller and winning bidder and for lowering
of the highest bids to prices closer to the cover bids without
informing either bidders or sellers). These cases also involved
violations of MSRB Rules G-8, G-9, and G-28.
---------------------------------------------------------------------------

    As a result, the MSRB has proposed additional, detailed rules and
interpretive guidance that apply to the conduct of broker's brokers and
other brokers, dealers, and municipal securities dealers (collectively
``dealers'') in the municipal securities market. Specifically, the MSRB
proposes new MSRB Rule G-43; to amend MSRB Rules G-8, G-9, and G-18;
and to issue interpretive guidance for dealers that use broker's
brokers. The MSRB has requested that the proposed rule change be made
effective six months after approval by the Commission.

A. MSRB Rule G-43

    Definition of Broker's Broker. The MSRB proposes to define a
broker's broker as ``a dealer, or a separately operated and supervised
division or unit of a dealer, that principally effects transactions for
other dealers or that holds itself out as a broker's broker,'' whether
as a separate company or as part of a larger company.\11\ An
alternative trading system (``ATS'') registered with the Commission
will not be considered a broker's broker for purposes of MSRB Rule G-43
if it meets the following criteria with respect to its municipal
securities activities: (1) The ATS utilizes only automated and
electronic means to communicate with bidders and sellers in a
systematic and non-discretionary fashion (with the exception of
communications that are solely clerical or ministerial in nature and
communications that occur after a trade has been executed); (2) the ATS
limits customers to sophisticated municipal market professionals
(SMMPs), as defined in MSRB Rule D-9; and (3) the ATS adopts and
complies with specified policies and procedures.\12\
---------------------------------------------------------------------------

    \11\ See MSRB Rule G-43(d)(iii).
    \12\ See id. As proposed, the policies and procedures an ATS
adopts must, at a minimum, require the ATS to (1) disclose the
nature of its undertakings for the seller and bidder in bid-wanteds
and offerings; (2) disclose the manner in which it will conduct bid-
wanteds and offerings; and (3) prohibit the ATS from engaging in the
conduct described in MSRB Rule G-43(c)(i)(H)-(O) (described more
fully below).
---------------------------------------------------------------------------

    Duty of Broker's Broker. MSRB Rule G-43(a)(i) would require a
broker's broker, in executing a transaction in municipal securities for
or on behalf of another dealer, to make a reasonable effort to obtain a
price for the dealer that was fair and reasonable in relation to
prevailing market conditions and employ the same care and diligence in
doing so as if the transaction were being done for its own account. The
MSRB states that MSRB Rule G-43(a)(i) incorporates the same basic duty
currently found in MSRB Rule G-18.\13\
---------------------------------------------------------------------------

    \13\ The MSRB has proposed deleting text from MSRB Rule G-18 to
eliminate duplication relating to this pricing duty as it will be
covered by MSRB Rule G-43(a)(i). See Notice, 77 FR at 17550.
---------------------------------------------------------------------------

    Under MSRB Rule G-43(a)(ii), a broker's broker that undertakes to
act for or on behalf of another dealer in connection with a transaction
or potential transaction in municipal securities would be prohibited
from taking any action that would work against that dealer's interest
to receive advantageous pricing. MSRB Rule G-43(a)(iii) would establish
a presumption that a broker's broker is acting for or on behalf of the
seller\14\ in a bid-wanted, unless both the seller and bidders agreed
otherwise in writing in advance of the bid-wanted.
---------------------------------------------------------------------------

    \14\ The MSRB proposes to define a ``seller'' as the selling
dealer, or potentially selling dealer, in a bid-wanted or offering
and would not include the customer of a selling dealer. See MSRB
Rule G-43(d)(ix).
---------------------------------------------------------------------------

    Safe Harbor in Conduct of Bid-Wanteds. The MSRB proposes to create
a safe harbor for broker's brokers in conducting bid-wanteds. Under the
safe harbor, a broker's broker would satisfy its pricing duty under
proposed subsection (a)(i) if it conducts bid-wanteds in the manner
described in MSRB Rule G-43(b). A broker's broker, unless otherwise
directed by the seller,\15\ would be required to make a reasonable
effort to disseminate a bid-wanted widely.\16\ If securities are of
limited interest, the broker's broker must make a reasonable effort to
reach dealers with specific knowledge of the issue or known interest in
comparable securities.\17\ Further, each bid-wanted must have either a
``sharp'' deadline or an ``around time'' deadline for the acceptance of
bids or changes to bids.\18\
---------------------------------------------------------------------------

    \15\ See infra Section I.C (summarizing interpretive guidance
noting that selling dealers that direct broker's brokers to filter
certain bidders from the receipt of bid-wanteds or offerings should
be able to demonstrate the reasons for filtering, that it is for
valid business reasons, and that it is not anti-competitive).
    \16\ See MSRB Rule G-43(b)(i).
    \17\ See MSRB Rule G-43(b)(ii).
    \18\ See MSRB Rule G-43(b)(iii).
---------------------------------------------------------------------------

    To avail itself of the safe harbor, a broker's broker must adopt
predetermined parameters designed to identify possible bids that do not
represent the fair market value of the municipal securities subject to
the bid-wanted.\19\ In addition, the broker's broker must test the
predetermined parameters periodically to determine whether they are
achieving their purpose.\20\ If the high bid is outside of the
predetermined parameters and the broker's broker believes that the bid
might have been submitted in error, the broker's broker may contact the
high bidder about its bid price prior to the deadline for bids without
the seller's consent.\21\ However, if the high bid is

within the predetermined parameters, the broker's broker must obtain
the seller's oral or written consent before contacting the bidder to
determine whether the bid was submitted in error.\22\
---------------------------------------------------------------------------

    \19\ See MSRB Rule G-43(c)(i)(F).
    \20\ See id.
    \21\ See MSRB Rule G-43(b)(iv).
    \22\ See id. In all events, under MSRB Rule G-43(c)(i)(D), the
broker's broker must notify the seller if the high bidder's bid or
the cover bid had been changed prior to execution and provide the
seller with the original and changed bids.
---------------------------------------------------------------------------

    Finally, the broker's broker would be required to disclose to the
seller if the highest bid received in a bid-wanted is below the
predetermined parameters and receive the seller's oral or written
acknowledgement of the disclosure before proceeding with the trade.\23\
According to the MSRB, this notice would inform the selling dealer that
the high bid in a bid-wanted might be off-market and not representative
of the fair market value.\24\ The selling dealer would then need to
satisfy itself that the high bid was, in fact, fair and reasonable if
it wished to purchase the securities from its customer at that price as
a principal.\25\
---------------------------------------------------------------------------

    \23\ See MSRB Rule G-43(b)(v).
    \24\ See Notice, 77 FR at 17550.
    \25\ See id. See also infra Section I.C. (highlighting existing
duties of dealers regarding fair and reasonable prices).
---------------------------------------------------------------------------

    Policies and Procedures. The MSRB proposes to establish policies
and procedures that a broker's broker must adopt and comply with in the
operation of bid-wanteds and offerings for municipal securities.\26\
According to the MSRB, MSRB Rule G-43(c) is designed to ensure that
bid-wanteds and offerings are conducted in a fair manner.\27\ MSRB Rule
G-43(c) would apply to all bid-wanteds and offerings, including bid-
wanteds conducted under the safe harbor in MSRB Rule G-43(b).\28\ While
many of the requirements of MSRB Rule G-43(c) address behavior that
would also be a violation of MSRB Rule G-17, MSRB Rule G-43(c) would
not supplant the requirements of MSRB Rule G-17.\29\
---------------------------------------------------------------------------

    \26\ See MSRB Rule G-43(c)(i).
    \27\ See Notice, 77 FR at 17550.
    \28\ See id.
    \29\ See id.
---------------------------------------------------------------------------

    A broker's broker would be required, among other things, to
describe the manner in which it will conduct its bid-wanteds and
offerings.\30\ Additionally, if a broker's broker conducts bid-wanteds
not in accordance with the safe harbor under MSRB Rule G-43(b), it must
describe in detail how it will satisfy its obligations under MSRB Rule
G-43(a)(i).\31\ If a broker's broker allows customers or affiliates of
the broker's broker to place bids, the broker's broker must disclose
that fact to both sellers and bidders in writing, and must disclose to
the seller prior to a transaction if the high bid in a bid-wanted or
offering is from a customer or an affiliate (but would not need to
disclose the name of the customer or affiliate).\32\ MSRB Rule G-
43(c)(i)(H) would prohibit a broker's broker from maintaining municipal
securities in any proprietary or other accounts, other than for
clearance and settlement purposes.
---------------------------------------------------------------------------

    \30\ See MSRB Rule G-43(c)(i)(B).
    \31\ See MSRB Rule G-43(c)(i)(G).
    \32\ See MSRB Rule G-43(c)(i)(E).
---------------------------------------------------------------------------

    Once a broker's broker has selectively informed a bidder whether
its bid is being used in the bid-wanted, the broker's broker cannot
accept a changed bid or a new bid in the same bid-wanted.\33\ In
Amendment No. 1, the MSRB proposed amending MSRB Rule G-43(c)(i)(N) to
clarify that it would prohibit a broker's broker only from accepting a
new bid or a changed bid from a bidder in a bid-wanted after the
broker's broker has notified that same bidder whether its bid was the
high bid (``being used'') in the same bid-wanted. According to the
MSRB's statements in Amendment No. 1, MSRB Rule G-43(c)(i)(N), as
originally proposed, might otherwise have been read to prohibit new or
changed bids from any bidders after another bidder has been informed of
whether its bid was being used in a bid-wanted, which was not the
MSRB's intent.
---------------------------------------------------------------------------

    \33\ See MSRB Rule G-43(c)(i)(N).
---------------------------------------------------------------------------

    Until the completion of a bid-wanted, a broker's broker would be
prohibited from disclosing information about bid prices to anyone other
than the seller and winning bidder unless the broker's broker makes
such information available to all market participants on an equal basis
at no cost while disclosing that the bids may not be representative of
fair market value and that it is making this information public.\34\ A
bid-wanted will be considered ``completed'' when either (A) the
security is traded, whether through the broker's broker or otherwise,
or (B) the broker's broker is notified by the seller that the security
will not trade.\35\ In Amendment No. 1, the MSRB proposed adding
paragraph (x) to MSRB Rule G-43(d), which would clarify that a
municipal security would be considered to have ``traded'' through a
broker's broker when it has been purchased by the broker's broker from
the seller and sold to the bidder by the broker's broker, as an
intermediary.\36\
---------------------------------------------------------------------------

    \34\ See MSRB Rule G-43(c)(i)(O).
    \35\ See MSRB Rule G-43(d)(iv).
    \36\ Because a broker's broker is an intermediary and would be
prohibited by MSRB Rule G-43(c)(i)(H) from engaging in proprietary
trading, a trade through a broker's broker would have two sides: a
purchase from the seller and a sale to the bidder. The term
``traded'' would be used in MSRB Rule G-43(d)(iv), which would
define when a bid-wanted is considered ``completed.'' This
characterization of a trade for purposes of MSRB Rule G-43 does not
affect how trades are to be treated under any other MSRB rule,
including but not limited to MSRB Rule G-14 on reports of sales or
purchases.
---------------------------------------------------------------------------

B. Recordkeeping Requirements

    The MSRB proposes amending MSRB Rules G-8 and G-9 to establish
recordkeeping requirements for broker's brokers and ATSs in connection
with their municipal securities activities. According to the MSRB, the
proposed amendments would assist in the enforcement of MSRB Rule G-
43.\37\ A broker's broker would be required to keep records of bids;
offers; changed bids and offers; the time of notification to the seller
of the high bid; the policies and procedures of the broker's broker
concerning bid-wanteds and offerings; and any agreements by which
bidders and sellers agree to joint representation by the broker's
broker.\38\ In addition, a broker's broker would be required to keep
records of communications with bidders and sellers regarding possibly
erroneous bids; \39\ communications with sellers when the high bid is
below predetermined parameters; \40\ and the setting of predetermined
parameters.\41\ The MSRB proposes requiring these records be maintained
for six years.\42\
---------------------------------------------------------------------------

    \37\ See Notice, 77 FR at 17550.
    \38\ See id. The MSRB also proposes recordkeeping requirements
for ATSs with respect to their municipal securities activities. See
MSRB Rule G-8(a)(xxvi). A broker's broker or ATS that is a
separately operated and supervised division or unit of another
dealer must keep separately maintained or separately extractable
records of its municipal securities activities. See MSRB Rule G-
8(a)(xxv)(K), (xxvi)(D). See also infra note 65 and accompanying
text (discussing the comparability in recordkeeping requirements for
broker's brokers and ATSs).
    \39\ See MSRB Rule G-8(a)(xxv)(D).
    \40\ See MSRB Rule G-8(a)(xxv)(E).
    \41\ See MSRB Rule G-8(a)(xxv)(J).
    \42\ See MSRB Rule G-9(a)(xii)-(xiii).
---------------------------------------------------------------------------

C. Notice to Dealers that Use the Services of Broker's Brokers

    The Proposed Notice provides guidance on the roles and duties of
other transaction participants (i.e., brokers, dealers, and municipal
securities dealers) that sell and bid for municipal securities in bid-
wanteds and offerings conducted by broker's brokers. Dealers that
submit bids to broker's brokers that they believe are below the fair
market value of the securities or that submit ``throw-away'' bids to
broker's brokers would violate MSRB Rule G-13.\43\ The Proposed Notice
would also remind selling dealers that use the services of broker's
brokers that they have an independent duty under MSRB Rule G-30 to
determine that the prices

at which they purchase municipal securities as principal from their
customers are fair and reasonable.\44\ In addition, a selling dealer
that directs broker's brokers to filter certain bidders from the
receipt of bid-wanteds should be able to demonstrate the reasons for
filtering and that it is for valid business reasons, not anti-
competitive behavior.\45\ The Proposed Notice also urges selling
dealers not to assume that their customers need to liquidate their
securities immediately without inquiring as to their customers'
particular circumstances and discussing with their customers the
possible improved pricing benefit associated with taking additional
time to liquidate their securities.\46\ Finally, the Proposed Notice
provides that, depending upon the facts and circumstances, the use of
bid-wanteds by selling dealers solely for price discovery purposes,
with no intention of selling the securities through the broker's
brokers, may be an unfair practice within the meaning of MSRB Rule G-
17.\47\
---------------------------------------------------------------------------

    \43\ See Notice, 77 FR at 17551.
    \44\ See Notice, 77 FR at 17550.
    \45\ See id.
    \46\ See id.
    \47\ See Notice, 77 FR at 17550-51.
---------------------------------------------------------------------------

III. Summary of Comments Received and the MSRB's Response

    As previously noted, the Commission received six comment letters on
the proposed rule change.\48\ Three of the commenters expressed general
support for the proposed rule change.\49\ However, two of the
commenters questioned the need for the proposed rule change; \50\ one
objected to the definition of ``broker's broker''; \51\ two asked for
clarification related to the exemption for ATSs from the definition of
broker's broker; \52\ one questioned the presumption that a broker's
broker acts for the seller in a bid-wanted; \53\ four expressed
concerns with the requirement to adopt policies and procedures to
disclose customers and affiliates; \54\ two objected to the
predetermined parameters aspect of the safe harbor; \55\ one objected
to the prohibition on holding municipal securities; \56\ and one
opposed the recordkeeping requirement of MSRB Rule G-8.\57\
---------------------------------------------------------------------------

    \48\ See supra note 4.
    \49\ See CTP Letter, RWS Letter, TMC Letter.
    \50\ See AAM Letter, BDA Letter.
    \51\ See AAM Letter.
    \52\ See BDA Letter, TMC Letter.
    \53\ See BDA Letter.
    \54\ See BDA Letter, CTP Letter, HTD Letter, RWS Letter.
    \55\ See BDA Letter, TMC Letter.
    \56\ See AAM Letter.
    \57\ See BDA Letter.
---------------------------------------------------------------------------

A. General Opposition to the Proposed Rule Change

    Advisors Asset Management, Inc. (``AAM'') and the Bond Dealers of
America (``BDA'') questioned the need for MSRB Rule G-43 and said
current MSRB rules and prior enforcement actions have proven sufficient
to address the behaviors the proposed rule change is intended to
address.\58\ In its response, the MSRB stated its belief that a
specific rule governing the conduct of broker's brokers is warranted.
While MSRB Rule G-17 is broad in its scope and could be used to address
much of the conduct of broker's brokers described in Commission and
FINRA enforcement proceedings, the MSRB believes that broker's brokers
need more explicit direction as to the appropriate conduct of bid-
wanteds and offerings. The MSRB believes it can sometimes be difficult
for enforcement agencies to prove that conduct is fraudulent, and
alleged violators of MSRB Rule G-17 sometimes argue that they have not
been put properly on notice of the type of conduct that is considered
unfair. The MSRB notes that MSRB Rule G-43 would not replace MSRB Rule
G-17, which is an overarching rule and applies even when there is a
more specific rule on point.
---------------------------------------------------------------------------

    \58\ See AAM Letter, BDA Letter.
---------------------------------------------------------------------------

B. Definition of Broker's Broker

    AAM believes that the proposed definition of broker's broker is
extraordinarily broad, and suggested a more detailed definition of
broker's broker that includes the nature, role, duties, and
responsibilities of a broker's broker. The MSRB stated its continued
belief that a functional definition of broker's broker is appropriate.
According to the MSRB, the Securities Industry and Financial Markets
Association (``SIFMA'') made a similar comment in response to an
earlier draft of MSRB Rule G-43. The MSRB responded then that the
definition proposed by SIFMA would make it easy for a firm to escape
classification as a broker's broker and, accordingly, avoid application
of the rules for broker's brokers. For example, a firm could simply
carry customer accounts and avoid classification as a broker's broker
because part of SIFMA's proposed definition is that the firm does not
carry customer accounts. In comparison, the MSRB believes its
definition focuses on the key function of a broker's broker--effecting
transactions in municipal securities on behalf of other dealers.
    AAM also believes that the MSRB has not defined or provided
sufficient guidance regarding what it means for a dealer to ``hold[]
itself out as a broker's broker'' and should be omitted. The MSRB has
previously noted that selling dealers rely on broker's brokers as
trusted intermediaries and that a selling dealer should be entitled to
rely on the representations of another dealer that it is functioning as
a broker's broker. According to the MSRB, a dealer should not call
itself a broker's broker if it does not want to be subject to MSRB Rule
G-43 (and should not be able to avoid the provisions of MSRB Rule G-43
simply by not calling itself a broker's broker).

C. ATS Exemption From Definition of Broker's Broker

    BDA requested that the MSRB clarify the types of communications
engaged in by ATSs that would be considered ``clerical or
ministerial.'' The MSRB noted that MSRB Rule G-3 (which provides that
an individual whose duties are solely clerical and ministerial is not
required to pass an MSRB professional qualifications examination)
already provides guidance on what communications are clerical or
ministerial. Examples of clerical or ministerial communications would
be customer service types of communications, such as IT questions. Any
type of communication that could only be engaged in by an individual
that is licensed under MSRB Rule G-3 would not be considered to be
clerical or ministerial.
    TMC Bonds, LLC (``TMC'') stated its belief that an ATS should be
allowed to provide voice support without being considered a broker's
broker, and suggested that software support that helps users navigate a
large amount of data would be precluded under the definition. In its
response, the MSRB expressed concerns regarding voice communication
between ATS traders and bidders. If traders have access to information
about bids, there is no way to ensure that they do not engage in the
same types of activities that have been the subject of enforcement
actions against traditional voice brokers (e.g., bid coaching by the
broker). The MSRB noted that some purely electronic ATSs have developed
mechanisms for bidders to request automatic electronic alerts when
securities of the type in which they have interest are available on the
ATS. Software support, in comparison, would likely fall into the
category of clerical or ministerial communications, which are not
precluded by the definition.

D. Broker's Broker As Representative of Seller

    BDA believes that the presumption that a broker's broker acts for
or on behalf of the seller in a bid-wanted for municipal securities
unless both the seller and bidders agree otherwise in writing in
advance of the bid-wanted may discourage potential buyers from bidding
and reduce liquidity in the municipal securities market. The MSRB
disagreed with BDA's comment. According to the MSRB, many broker's
brokers require their clients, including dealers, to sign agreements
prior to effecting trades through them. If a broker's broker desires to
represent bidders as well as sellers in bid-wanteds, it could simply
include a clause in client agreements. Sellers and bidders could then
decide whether to execute the agreement and thereby agree to dual
representation.

E. Disclosure of Customers and Affiliates

    BDA, Chapdelaine Tullett Prebon, LLC (``CTP''), Hartfield, Titus &
Donnelly (``HTD''), and RW Smith & Associates, Inc. (``RWS'') objected
to the portion of MSRB Rule G-43(c)(i)(E) concerning pre-trade
disclosure by the broker's broker to the selling dealer of the fact
that the high bidder is a customer of the broker's broker. BDA also
objected to the portion of that rule requiring pre-trade disclosure if
the high bidder is an affiliate of the broker's broker. One concern was
that such disclosures would be inconsistent with the counter-party
anonymity provided by most broker's brokers. In its response, the MSRB
reiterated that the primary role of a broker's broker is that of a
trusted intermediary between selling and bidding dealers. The MSRB is
concerned that a broker's broker effecting trades with a customer or an
affiliate is presented with conflicts of interest that should be
disclosed, but noted that the proposed rule would not require
disclosure of the name of the customer or affiliate.

F. Predetermined Parameters

    BDA disagreed with the premise that it is the obligation of a
broker's broker to determine what is a fair price, or a range of fair
prices. In its response, the MSRB reiterated that existing MSRB Rule G-
18 already requires broker's brokers to ``make a reasonable effort to
obtain a price for the customer that is fair and reasonable in relation
to prevailing market conditions.'' The MSRB has simply proposed to move
that same pricing obligation into MSRB Rule G-43(a)(i). The proposed
rule does not adopt the stricter pricing obligation found in MSRB Rule
G-30, which prohibits dealers from purchasing or selling municipal
securities to customers as principals at prices that are not fair and
reasonable. However, MSRB Rule G-30 does apply if a broker's broker
engages in municipal securities transactions with customers as a
principal.
    In addition, BDA expressed concerns that in times of volatile
markets, many bids could be outside the predetermined parameters, which
would require the broker's broker to contact numerous bidders or
sellers. The MSRB responded that in times of volatile markets, a
broker's broker may adjust its predetermined parameters as necessary to
achieve their purpose of identifying most bids that do not represent
fair market value. Furthermore, broker's brokers using the safe harbor
would not be required to contact bidders under any circumstances; they
are simply permitted to do so under certain circumstances if they use
predetermined parameters. Broker's brokers would be required, however,
to contact sellers when the high bid is below the predetermined
parameters. According to the MSRB, this notice would draw potentially
below market bids to the attention of selling dealers and is important
to facilitating the receipt of fair market prices by retail investors.
The actual determination of whether the high bid is, in fact, below
market, however, would remain the obligation of the selling dealer.
Finally, the MSRB stated that the safe harbor is completely optional.
    BDA also said that a broker's broker could set the pricing too
broadly on the upper end (which could affect the outcome of the bid-
wanted and future bids, thereby reducing liquidity and leading to lower
prices) or too narrowly on the lower end (which could lead a selling
broker not to go through with a trade, or risk litigation risk if it
did). In response, the MSRB stated its belief that the requirements
related to predetermined parameters should be sufficient to avoid the
situations described by BDA. By definition, the predetermined
parameters must be reasonably designed to identify most bids that may
not represent the fair market value of municipal securities that are
the subject of bid-wanteds to which they are applied. Furthermore,
broker's brokers that use predetermined parameters would be required to
test them periodically to determine whether they have identified most
bids that did not represent the fair market value of municipal
securities.
    TMC believes that establishing predetermined parameters would force
broker's brokers to subscribe to pricing services, as they do not have
the resources to create their own pricing models for all outstanding
securities. In addition, TMC believes that intermediaries, whether
ATSs, broker's brokers, or exchanges, should not be responsible for
setting prices or price bands, but instead should be responsible for
running fair and efficient auctions. According to the MSRB, the use of
predetermined parameters was suggested by a broker's broker as part of
the comment process on an earlier version of MSRB Rule G-43. The MSRB
noted that many broker's brokers and ATSs already notify sellers when
bids differ significantly from bids received in previous bid-wanteds or
offerings, recent trade prices on EMMA, or prices from pricing
services. Furthermore, bidders using one ATS's software already receive
an electronic notification if their bids are outside of certain pricing
parameters and are required to take affirmative steps to resubmit their
bids in such cases. Finally, the MSRB stated that the predetermined
parameters established by broker's brokers pursuant to MSRB Rule G-43
are intended to assist broker's brokers in their duties with respect to
their clients and are not dispositive of the fair market value of the
securities that are the subject of bid-wanteds.

G. Prohibition on Holding Municipal Securities

    AAM believes that the current definition of broker's broker,
coupled with MSRB Rule G-43(c)(i)(H), would require broker-dealers that
have historically participated in new issue syndicates and proprietary
trading to exit those portions of their businesses. The MSRB disagreed
with AAM's concern and noted that it would be highly unlikely for such
firms to be considered to ``principally effect transactions for other
dealers'' or to ``hold themselves out as broker's broker,'' either of
which is required for a dealer to be considered a ``broker's broker''
under MSRB Rule G-43(d)(iii). The MSRB reiterated that it has proposed
a separate restriction on proprietary trading by broker's brokers,
rather than incorporating the concept of proprietary trading into the
definition of ``broker's broker,'' because the latter approach would
allow a dealer to avoid characterization as a broker's broker simply by
executing a handful of proprietary trades.

H. Recordkeeping Requirements

    BDA believes the record-keeping requirements are burdensome,
especially those concerning offerings. According to the MSRB, the
recordkeeping provisions of the proposed rule change are designed to
permit effective enforcement of MSRB Rule G-43, and many were
recommended by broker's brokers themselves. The MSRB noted that the
proposed rule change already reflects a change from a previous version
made at the request of broker's brokers concerned with the
recordkeeping provisions for offerings. As the MSRB noted in its
filing, ``The MSRB agrees with the comments concerning records of
offers and has amended the rule to require that a broker's brokers'
[sic] records concerning offers must include the time of first receipt
and the time the offering has been updated for display or
distribution.'' \59\ A broker's broker would not need to keep records
for every change in offering price throughout the course of the day.
---------------------------------------------------------------------------

    \59\ See Notice, 77 FR at 17556.
---------------------------------------------------------------------------

IV. Discussion and Commission Findings

    The Commission has carefully considered the proposed rule change,
as modified by Amendment No. 1 thereto, as well as the comment letters
received and the MSRB's response, and finds that the proposed rule
change, as amended, is consistent with the requirements of the Exchange
Act and the rules and regulations thereunder applicable to the
MSRB.\60\ In particular, the proposed rule change is consistent with
Section 15B(b)(2)(C) of the Exchange Act, which provides that the
MSRB's rules shall be designed to prevent fraudulent and manipulative
acts and practices, to promote just and equitable principles of trade,
to foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect to,
and facilitating transactions in municipal securities and municipal
financial products, to remove impediments to and perfect the mechanism
of a free and open market in municipal securities and municipal
financial products, and, in general, to protect investors, municipal
entities, obligated persons, and the public interest.\61\
---------------------------------------------------------------------------

    \60\ In approving the proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
    \61\ 15 U.S.C. 78o-4(b)(2)(C).
---------------------------------------------------------------------------

    The Commission believes the proposed rule change is reasonably
designed to prevent fraudulent and manipulative acts and practices,
protect investors, and to remove impediments to and perfect the
mechanism of a free and open market in municipal securities by
providing more explicit direction to broker's brokers in conducting
bid-wanteds and offerings and by promoting additional transparency
concerning the services of and prices received from broker's brokers. A
number of recent Commission and FINRA enforcement actions alleged
conduct in bid-wanteds and offerings in violation of MSRB Rule G-17 and
other MSRB rules.\62\ According to the MSRB, enforcement agencies
continue to observe transactions and trading patterns of broker's
brokers that may cause customers to receive unfair prices when
liquidating their municipal securities through broker's brokers.\63\
The proposed rule change is designed to address these issues by
providing broker's brokers with advance notice of the type of conduct
that is considered unfair in the conduct of bid-wanteds and offerings,
and by promoting additional transparency to dealers concerning prices
received through broker's brokers.
---------------------------------------------------------------------------

    \62\ See supra note 10. See also Notice, 77 FR at 17549 n.4.
    \63\ See Notice, 77 FR at 17551.
---------------------------------------------------------------------------

    In addition, the proposed rule change is reasonably designed to
prevent fraudulent and manipulative acts and practices and to protect
investors by promoting better understanding of conduct in the municipal
securities market, which should in turn promote more efficient
compliance with and enforcement of Rule G-43. Specifically, MSRB Rules
G-8 and G-9 would require broker's brokers and ATSs to keep records of
their activities in bid-wanteds. According to the MSRB, many of the
recordkeeping provisions were recommended by broker's brokers. While
MSRB Rule G-8 establishes different recordkeeping requirements for
broker's brokers and ATSs,\64\ the Commission believes the
recordkeeping requirements are appropriately tailored to ensure the
availability of records pertaining to the municipal securities
activities of broker's brokers and ATSs. The Commission notes that, in
addition to the recordkeeping requirements of MSRB Rule G-8(a)(xxvi),
ATSs are also subject to the recordkeeping requirements of Regulation
ATS.\65\ When taken together, the recordkeeping requirements for ATSs
under Regulation ATS and MSRB Rule G-8(a)(xxvi) are comparable to the
applicable requirements for broker's brokers under MSRB Rule G-
8(a)(xxv).
---------------------------------------------------------------------------

    \64\ Cf. infra note 65 and accompanying text (discussing
additional recordkeeping requirements imposed by Regulation ATS).
    \65\ See 17 CFR 242.300 et seq. For example, Rule 302 of
Regulation ATS requires an ATS to make and keep time-sequenced
records of order information in the ATS, including, among other
things, the date and time that an order was received; the identity
of the security; the principal amount of bonds to which the order
applies; any designation(s) related to the order; any instructions
to modify or cancel the order; the date and time that an order was
executed; the price at which an order was executed; the size of the
order executed; and the identity of the parties to the transaction.
See 17 CFR 242.302(c).
---------------------------------------------------------------------------

    In light of the MSRB's responses to comments received, the
Commission does not believe that any comment raises an issue that would
preclude approval of this proposal. According to the MSRB, it has
worked extensively with broker's brokers and other dealers to refine
the proposed rule change so that it targets abuses more accurately,
while minimizing the likelihood of adversely affecting liquidity.\66\
MSRB Rule G-43 should promote improved pricing in the secondary market
for retail investors in municipal securities by encouraging the wide
dissemination of bid-wanteds and identifying fraudulent and unfair
conduct that may result in retail investors receiving lower prices than
would otherwise be available. In addition, the Proposed Notice, which
would remind dealers of their pricing obligations, appears reasonably
designed to provide investors with fair and reasonable prices for
municipal securities.
---------------------------------------------------------------------------

    \66\ See Notice, 77 FR at 17551. The MSRB has proposed three
versions of proposed MSRB Rule G-43 that would apply to broker's
brokers. See MSRB Notice 2010-35, Request for Comment on MSRB
Guidance on Broker's Brokers (Sep. 9, 2010); MSRB Notice 2011-18,
Request for Comment on Draft Rule G-43 (on Broker's Brokers) and
Associated Amendments to Rules G-8 (on Books and Records), G-9 (on
Preservation of Records), and on G-18 (on Execution of Transactions)
(Feb. 24, 2011); MSRB Notice 2011-50, Request for Comment on Revised
Draft Rule G-43 (on Broker's Brokers), Associated Revised Draft
Amendments to Rule G-8 (on Books and Records) and Rule G-9 (on
Preservation of Records), and Draft Interpretive Notice on the
Obligations of Dealers that Use the Services of Broker's Brokers
(Sep. 8, 2011).
---------------------------------------------------------------------------

    The Commission also believes that the proposed exemption from the
definition of broker's broker for certain ATSs does not impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Exchange Act.\67\ The Commission notes that an ATS
will not be considered a broker's broker only if it meets the
requirements of MSRB Rule G-43(d)(iii). To satisfy this exemption, the
ATS must conform its conduct to certain conditions. First, the ATS must
utilize only automated and electronic means to communicate with bidders
and sellers in a systematic and non-discretionary

fashion, with the exception of communications that are solely clerical
or ministerial in nature and communications that occur after a trade
has been executed. Second, all customers of the ATS, if any, must be
SMMPs. Third, the ATS must adopt and comply with specified policies and
procedures \68\ that would, among other things, require that the ATS
disclose the nature of its undertaking for the seller and bidders in
bid-wanteds and offerings and the manner in which it will conduct bid-
wanteds and offerings,\69\ as well as prohibit the ATS from giving
preferential information to bidders in bid-wanteds, including but not
limited to ``last looks'' (e.g., directions to a bidder that it
``review'' its bid or that its bid is ``sticking out'').\70\ These
policies and procedures are substantially similar to those applicable
to broker's brokers. To the extent an ATS fails to meet any of the
requirements of the exemption under MSRB Rule G-43(d)(iii), the ATS
will be considered a broker's broker and thus subject to all of the
requirements of MSRB Rule G-43. The Commission agrees with the MSRB
that ATSs subject to the exemption from the definition of broker's
broker will remain subject to most of the requirements of MSRB Rule G-
43(c).\71\ For these reasons, the Commission believes that the proposed
exemption from the definition of broker's broker for certain ATSs does
not impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Exchange Act.\72\
---------------------------------------------------------------------------

    \67\ 15 U.S.C. 78o-4(b)(2)(C).
    \68\ See supra note 12 and accompanying text.
    \69\ See MSRB Rule G-43(d)(iii)(C)(1)-(2). The Commission notes
that a broker's broker also must disclose the nature of its
undertaking for the seller and bidders in bid-wanteds and offerings
and the manner in which it will conduct bid-wanteds and offerings,
and describe in detail how such broker's broker will satisfy its
obligations under the rule if it chooses not to conduct bid-wanteds
in accordance with MSRB Rule G-43(b). See MSRB Rule G-43(c)(i)(A)-
(B) and (G). The Commission believes broker's brokers and ATSs
should provide clear and transparent disclosure sufficient to
understand their conduct of bid-wanteds and offerings.
    \70\ See MSRB Rule G-43(d)(iii)(C)(3); MSRB Rule G-43(c)(i)(K).
    \71\ See Notice, 77 FR at 17550. See also supra note 65 and
accompanying text (discussing the combined recordkeeping obligations
of ATSs in MSRB Rule G-8 and Regulation ATS).
    \72\ 15 U.S.C. 78o-4(b)(2)(C).
---------------------------------------------------------------------------

V. Conclusion

    For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment No. 1, is consistent with the
requirements of the Exchange Act and the rules and regulations
thereunder applicable to the MSRB, and in particular, Section
15B(b)(2)(C) \73\ of the Exchange Act. The proposal will become
effective six months after the date of this order.
---------------------------------------------------------------------------

    \73\ 15 U.S.C. 78o-4(b)(2)(C).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\74\ that the proposed rule change (SR-MSRB-2012-04), as
modified by Amendment No. 1, is approved.
---------------------------------------------------------------------------

    \74\ 15 U.S.C. 78s(b)(2).
    \75\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\75\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-15804 Filed 6-27-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 27 (Friday, February 8, 2019)]
[Proposed Rules]
[Pages 2799-2800]
[FR Doc No: 2019-01591]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 154

[Docket Number USCG-1999-5705]
RIN 1625-AA-12 and 2115-AE87

Marine Transportation-Related Facility Response Plans for
Hazardous Substances

AGENCY: Coast Guard, DHS.

ACTION: Proposed rule; withdrawal.

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

SUMMARY: The Coast Guard is withdrawing its notice of proposed
rulemaking entitled ``Marine Transportation-Related Facility Response
Plans for Hazardous Substances'' that we published on March 31, 2000.
The Coast Guard is withdrawing this rulemaking based on findings that
the proposed rules are no longer appropriate to the current state of
spill response in the chemical industry.

DATES: The notice of proposed rulemaking published March 31, 2000, at
65 FR 17416, is withdrawn as of February 8, 2019.

ADDRESSES: The docket for this withdrawn rulemaking is available by
searching docket number USCG-1999-5705 using the Federal portal at
http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: If you have questions about this
notice of withdrawal, call or email Mr. Christopher Friese, Commercial
Vessel Safety Specialist, Office of Marine Environmental Response
Policy (CG-MER-1), Coast Guard; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

FR Federal Register
NPRM Notice of Proposed Rulemaking
OPA 90 Oil Pollution Act of 1990
CTAC Chemical Transportation Advisory Committee

II. Background

    The Clean Water Act,\1\ as amended by section 4202(a)(6) of the Oil
Pollution Act of 1990 (OPA 90),\2\ requires owners or operators of tank
vessels, offshore facilities, and onshore facilities to prepare
response plans to mitigate spills of both oils and hazardous
substances. These plans must address measures to respond, to the
maximum extent practicable, to a worst-case discharge or a substantial
threat of such a discharge, of oil or a hazardous substance into or on
navigable waters, adjoining shorelines, or the exclusive economic zone
of the United States. The primary purpose of requiring response plans
is to minimize the impact of a discharge of oil or hazardous substances
into the navigable waters of the United States.
---------------------------------------------------------------------------

    \1\ 33 U.S.C. 1321(j)(5).
    \2\ Public Law 101-380, 104 Stat. 484.
---------------------------------------------------------------------------

    On May 3, 1996, we published an advance notice of proposed
rulemaking soliciting public input on regulations concerning response
plans for certain tank vessels and marine transportation-related
facilities (61 FR 20083), and subsequently held two public meetings on
the subject that were announced in the Federal Register (61 FR 34775).
On March 31, 2000, we published a notice of proposed rulemaking (NPRM)
in the Federal Register entitled ``Marine Transportation-Related
Facility Response Plans for Hazardous Substances'' (65 FR 17416). In
the NPRM, we proposed regulations requiring response plans for certain
Marine Transportation-Related facilities. The Coast Guard received
feedback from concerned citizens, commercial entities, and trade
associations regarding the proposed rulemaking. These comments were
made available in the docket. Since then, further analysis by the Coast
Guard and the Chemical Transportation Advisory Committee (CTAC) has
shown that implementation of the rules as laid out in the 2000 NPRM
would not significantly increase response effectiveness at this time.
    CTAC also identified many areas in which the NPRM may overlap with
existing local and state regulatory schemes as well as current industry
practice. Most coastal states already have regulations in place
governing spill response at facilities that handle hazardous
substances. Area Planning Committees have also been voluntarily
incorporating hazardous substances into their contingency plans, as
facilities that handle hazardous chemicals are often located near sites
that process oil. Furthermore, organizations like the Chemical
Transportation Emergency Center and Spill Center have demonstrated that
synergies from oil response may also be utilized in hazardous substance
response. Marine transportation related facilities handling oil
products must also comply with the Coast Guard's Facility Response Plan
requirements.\3\ Although these requirements address planning for oil
spill response, these best practices may also be applied to hazardous
substance response to an extent. Due to the services and requirements
industry frequently engages in to satisfy

insurance requirements and company sustainability polices, together
with the existence of new terminal inspection protocols like that
developed by the Chemical Distribution Institute, CTAC was unable to
identify any significant gaps in hazardous substance spill response
planning at marine transportation-related facilities that would be
reduced by the 2000 proposed rulemaking.
---------------------------------------------------------------------------

    \3\ 33 CFR part 154, subpart F.
---------------------------------------------------------------------------

III. Withdrawal

    The Coast Guard is withdrawing the proposed rulemaking so as to
better analyze the current spill response capabilities of the chemical
industry before conducting any further rulemaking on hazardous
substance response plans for marine transportation-related facilities.
The Coast Guard remains committed to fulfilling its OPA 90 mandate,
however we believe the proposed rules are no longer appropriate as
proposed.
    The Coast Guard has determined that withdrawing the proposed rule
is appropriate based on findings that the proposed rules are no longer
applicable to the current state of spill response in the chemical
industry. Accordingly, the Coast Guard is withdrawing the ``Marine
Transportation-Related Facility Response Plans for Hazardous
Substances'' proposed rulemaking announced in an NPRM published March
31, 2000 (65 FR 17416).

IV. Executive Order 13771

    The withdrawal of the NPRM qualifies as a deregulatory action under
Executive Order 13771 (Reducing Regulation and Controlling Regulatory
Costs), which directs agencies to reduce regulation and control
regulatory costs and provides that ``for every one new regulation
issued, at least two prior regulations be identified for elimination,
and that the cost of planned regulations be prudently managed and
controlled through a budgeting process.'' See the OMB Memorandum titled
``Guidance Implementing Executive Order 13771, Titled `Reducing
Regulation and Controlling Regulatory Costs' '' (April 5, 2017).

     Dated: February 4, 2019.
Anthony J. Vogt,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Response
Policy.
[FR Doc. 2019-01591 Filed 2-7-19; 8:45 am]
 BILLING CODE 9110-04-P