Census Bureau
Foreign-Trade Zones Board
Industry and Security Bureau
International Trade Administration
National Oceanic and Atmospheric Administration
Air Force Department
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Food and Drug Administration
Health Resources and Services Administration
National Institutes of Health
Coast Guard
Federal Emergency Management Agency
Indian Affairs Bureau
National Park Service
Ocean Energy Management Bureau
Federal Bureau of Investigation
Justice Programs Office
Employee Benefits Security Administration
National Endowment for the Arts
Federal Aviation Administration
Federal Motor Carrier Safety Administration
Federal Railroad Administration
National Highway Traffic Safety Administration
Foreign Assets Control Office
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription.
Consumer Financial Protection Bureau.
Final rule; correction.
On March 20, 2023, the Consumer Financial Protection Bureau (Bureau or CFPB) published the “Agency Contact Information” final rule in the
This correction is effective on September 25, 2023.
Luke Diamond, Counsel or Ruth Van Veldhuizen, Senior Counsel, Office of Regulations, at 202-435-7700. If you require this document in an alternative electronic format, please contact
On March 20, 2023, the Consumer Financial Protection Bureau (Bureau or CFPB) published the “Agency Contact Information” final rule in the
The Bureau has identified four clerical errors in the final rule. First, in appendix A to Regulation B, “National Credit Union Administration, Office of Consumer Financial Protection (OCFP), Division of Consumer Compliance Policy and Outreach, 1775 Duke Street, Alexandria, VA 22314” should read “National Credit Union Administration, Office of Consumer Financial Protection (OCFP), 1775 Duke Street, Alexandria, VA 22314.” Second, on page two of the Fair Credit Reporting Act Summary of Consumer Rights (found in appendix K to Regulation V), the toll-free opt out phone number listed as 1-800-XXX-XXXX should read 1-888-567-8688. Third, on page four of the Fair Credit Reporting Act Summary of Consumer Rights, “Assistant General Counsel for Office of Aviation Protection” should read “Assistant General Counsel for Office of Aviation Consumer Protection.” Fourth, in comment appendix J-2 to Regulation Z,
Aged, Banks, Banking, Civil rights, Consumer protection, Credit, Credit unions, Discrimination, Fair lending, Marital status discrimination, National banks, National origin discrimination, Penalties, Race discrimination, Religious discrimination, Reporting and recordkeeping requirements, Savings associations, Sex discrimination.
Banks, Banking, Consumer protection, Credit unions, Fair Credit Reporting Act, Holding companies, National banks, Privacy, Reporting and recordkeeping requirements, Savings associations, State member banks.
Advertising, Appraisal, Appraiser, Banking, banks, Consumer protection, Credit, Credit unions, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations, Truth in lending.
For the reasons set forth above, the Bureau amends 12 CFR chapter X, as set forth below:
12 U.S.C. 5512, 5581; 15 U.S.C. 1691b.
The following list indicates the Federal agency or agencies that should be listed in notices provided by creditors pursuant to § 1002.9(b)(1). Any questions concerning a particular creditor may be directed to such agencies. This list is not intended to describe agencies' enforcement authority for ECOA and Regulation B. Terms that are not defined in the Federal Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the meaning given to them in the International Banking Act of 1978 (12 U.S.C. 3101).
1.
2. To the extent not included in item 1 above:
a.
b.
c.
d.
3.
4.
5.
6.
7.
8.
9.
12 U.S.C. 5512, 5581; 15 U.S.C. 1681a, 1681b, 1681c, 1681c-1, 1681c-3, 1681e, 1681g, 1681i, 1681j, 1681m, 1681s, 1681s-2, 1681s-3, and 1681t; Sec. 214, Pub. L. 108-159, 117 Stat. 1952.
The prescribed form for this summary is a disclosure that is substantially similar to the Bureau's model summary with all information clearly and prominently displayed. The list of Federal regulators that is included in the Bureau's prescribed summary may be provided separately so long as this is done in a clear and conspicuous way. A summary should accurately reflect changes to those items that may change over time (
12 U.S.C. 2601, 2603-2605, 2607, 2609, 2617, 3353, 5511, 5512, 5532, 5581; 15 U.S.C. 1601
Federal Aviation Administration (FAA), DOT.
Final rule.
This action amends 14 CFR part 71 relating to airspace designations to reflect the approval by the Director of the Federal Register of the incorporation by reference of FAA Order JO 7400.11H, Airspace Designations and Reporting Points. This action also explains the procedures the FAA will use to amend the listings of Class A, B, C, D, and E airspace areas; air traffic service routes; and reporting points incorporated by reference.
These regulations are effective September 15, 2023, through September 15, 2024. The incorporation by reference of FAA Order JO 7400.11H is approved by the Director of the Federal Register as of September 15, 2023, through September 15, 2024.
A copy of this final rule, and all background material may be viewed online at
FAA Order JO 7400.11H, Airspace Designations and Reporting Points, and subsequent amendments can be viewed online at
Sarah A. Combs, Rules and Regulations Group, Office of Policy, Federal Aviation Administration, 800 Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-8783.
FAA Order JO 7400.11G, Airspace Designations and Reporting Points, effective September 15, 2022, listed Class A, B, C, D and E airspace areas; air traffic service routes; and reporting points. Due to the length of these descriptions, the FAA requested approval from the Office of the Federal Register to incorporate the material by reference in the Federal Aviation Regulations, section 71.1, effective September 15, 2022, through September 15, 2023. During the incorporation by reference period, the FAA processed all proposed changes of the airspace listings in FAA Order JO 7400.11G in full text as proposed rule documents in the
This document incorporates by reference FAA Order JO 7400.11H, Airspace Designations and Reporting Points, dated August 11, 2023, and effective September 15, 2023, in section 71.1. FAA Order JO 7400.11H is publicly available as listed in the
This action amends 14 CFR part 71 to reflect the approval by the Director of the Federal Register of the incorporation by reference of FAA Order JO 7400.11H, effective September 15, 2023, through September 15, 2024. During the incorporation by reference period, the FAA will continue to process all proposed changes of the airspace listings in FAA Order JO 7400.11H in full text as proposed rule documents in the
FAA Order JO 7400.11, Airspace Designations and Reporting Points is published yearly and effective on September 15.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Airspace, Incorporation by reference, Navigation (air).
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:
49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
A listing for Class A, B, C, D, and E airspace areas; air traffic service routes; and reporting points can be found in FAA Order JO 7400.11H, Airspace Designations and Reporting Points, dated August 11, 2023. This incorporation by reference was approved by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. The approval to incorporate by reference FAA Order JO 7400.11H is effective September 15, 2023, through September 15, 2024. During the incorporation by reference period, proposed changes to the listings of Class A, B, C, D, and E airspace areas; air traffic service routes; and reporting points will be published in full text as proposed rule documents in the
Department of State.
Final rule.
The Department of State is removing Email Archive Management Records, State-01, from the list of system of records notices (SORNs) for which Privacy Act exemptions are claimed. The Department has determined that the system covered by this SORN, eRecords Archive, does not constitute a system of records under the Privacy Act of 1974.
This rule is effective on August 25, 2023.
Eric F. Stein, Senior Agency Official for Privacy; U.S. Department of State; Office of Global Information Services, A/GIS; Room 4534, 2201 C St. NW, Washington, DC 20520 or by calling on (202) 485-2051.
Email Archive Management Records, State-01 must be rescinded because the characteristics of the eRecords Archive system, which State-01 covers, do not render it a system of records within the meaning of 5 U.S.C. 552a. The millions of emails, diplomatic cables, and other files that the system ingests are not “records” as defined by § 552a(a)(4), as they are not records “about” the individuals incidentally mentioned in the files. eRecords is not a “system of records” as defined by section 552a(a)(5) because it (1) does not index files by personal identifier and (2) is not used to retrieve data by using a personal identifier.
Pursuant to 5 U.S.C. 552a (j)(2), records in State-01 were exempted from subsections (c)(3) and (4), (d), (e)(1), (2), (3), and (e)(4)(G), (H), and (I), and (f) of the Privacy Act. Pursuant to 5 U.S.C. 552a (k)(1), (k)(2), (k)(3), (k)(4), (k)(5), (k)(6), and (k)(7), records in State-01 were exempted from subsections (c)(3), (d)(1), (d)(2), (d)(3), (d)(4), (d)(5), (e)(1), (e)(4)(G), (e)(4)(H), (e)(4)(I), (f)(1), (f)(2), (f)(3), (f)(4), and (f)(5). This rulemaking amends 22 CFR 171.26 by removing STATE-01 from the lists of exemptions.
This rulemaking is published as a final rule with immediate effect due to the good cause exemption of the Administrative Procedure Act, 5 U.S.C.
Privacy.
For the reasons stated in the preamble, 22 CFR part 171 is amended as follows:
22 U.S.C. 2651a; 5 U.S.C. 552, 552a; 5 U.S.C. Ch. 131; E.O. 12600, 52 FR 23781, 3 CFR, 1987 Comp., p. 235; 5 CFR part 2634.
(a) * * *
(2) * * *
(iii) Reports identifiable to an individual compiled at any stage of the process of enforcement of the criminal laws from arrest or indictment through release from supervision. The reason for invoking these exemptions is to ensure effective criminal law enforcement processes. Records maintained by the Department in the following systems of records are exempt from all of the provisions of the PA except paragraphs (b), (c)(1) and (2), (e)(4)(A) through (F), (e)(6), (e)(7), (e)(9), (e)(10), and (e)(11), and (i), to the extent to which they meet the criteria of section (j)(2) of 5 U.S.C. 552a. The names of the systems correspond to those published in the
(b) * * *
(1)
(2)
(3)
(4)
(5)
(6)
(7)
National Labor Relations Board.
Final rule; stay of effective date.
On March 10, 2023, the National Labor Relations Board (Board) stayed two provisions of its 2019 final rule (“2019 Final Rule”) amending its representation case procedures. The two provisions, which have never been in effect, were stayed until September 10, 2023 to account for new court decisions and because the Board was considering whether to revise or rescind the 2019 Final Rule, including potential revisions to the two provisions. In a rule that published in this edition of the
As of August 25, 2023, the amendments to 29 CFR 102.64(a) and 29 CFR 102.67(b) in the final rule that published at 84 FR 69524, on December 18, 2019, and delayed at 85 FR 17500 (March 30, 2020) and 88 FR 14913 (March 10, 2023), are stayed from September 10, 2023, until December 26, 2023.
Roxanne L. Rothschild, Executive Secretary, National Labor Relations Board, 1015 Half St. SE, Washington, DC 20570-0001, (202) 273-2940 (this is not a toll-free number), 1-866-315-6572 (TTY/TDD).
On December 18, 2019, the Board published the 2019 Final Rule amending various aspects of its representation case procedures.
On May 30, 2020, the United States District Court for the District of Columbia issued an order in
On January 17, 2023, the United States Court of Appeals for the District of Columbia Circuit issued a decision and order reversing the District Court as to two of the five provisions, agreeing with the Board that those provisions were procedural in nature and not subject to notice and comment rulemaking.
Due to the District Court's injunction, these two provisions had never taken effect. Accordingly, before the D.C. Circuit's mandate issued on March 13, 2023 and the District Court's injunction was lifted, the Board changed the effective date of the two provisions from the original May 31, 2020 effective date to September 10, 2023, approximately six months from the D.C. Circuit's mandate.
In a final rule published in this issue of the
This change in effective date is published as a final rule. The Board considers this rule to be a procedural rule that is exempt from notice and public comment, pursuant to 5 U.S.C. 553(b)(A), because it concerns a rule of “agency organization, procedure, or practice.”
Today, my colleagues once again stay the implementation of the unit-scope-and-eligibility and 20-days rules, both of which were part of the 2019 Final Rule. They do so because, in a companion final rule issued today, they have decided to repeal these two provisions, along with other provisions of the 2019 Final Rule. I disagree with my colleagues' decision to rescind these two provisions and with their concomitant decision to stay implementation for the reasons stated in my dissent to their earlier stay,
National Labor Relations Board.
Direct final rule.
The National Labor Relations Board has decided to issue this final rule for the purpose of carrying out the National Labor Relations Act, which protects the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection. While retaining the essentials of existing representation case procedures, this rule substantially rescinds the amendments made by a rule the Board promulgated in 2019 (which has been the subject of ongoing litigation) and thereby substantially returns representation case procedures to those that existed following the Board's promulgation of a rule concerning representation case procedures in 2014 (which was uniformly upheld by the federal courts). By doing so, this rule effectuates what the Board deems to be appropriate policy choices that enhance the fair, efficient, and expeditious resolution of representation cases.
This rule is effective December 26, 2023.
Roxanne L. Rothschild, Executive Secretary, National Labor Relations Board, 1015 Half Street SE, Washington, DC 20570-0001, (202) 273-2917 (this is not a toll-free number), 1-866-315-6572 (TTY/TDD).
The National Labor Relations Board (the Board) administers the National Labor Relations Act (the Act) which, among other things, governs the formation of collective-bargaining relationships between employers and groups of employees in the private sector. Section 7 of the Act, 29 U.S.C. 157, gives employees the right to bargain collectively through representatives of their own choosing and to refrain from such activity.
When employees and employers are unable to agree whether employees should be represented for purposes of collective bargaining, Section 9 of the Act, 29 U.S.C. 159, gives the Board the authority to resolve the question of representation. The Supreme Court has recognized that “Congress has entrusted the Board with a wide degree of discretion in establishing the procedure and safeguards necessary to insure the fair and free choice of bargaining representatives by employees.”
Representation case procedures are set forth in the Act, Board regulations, and Board case law.
Section 9 of the Act, 29 U.S.C. 159, itself sets forth the basic steps for resolving a question of representation. They are as follows. First, a petition is filed by an employee, a labor organization, or an employer. Second, the Board investigates the petition and, if there is reasonable cause, an appropriate hearing is held to determine whether a question of representation exists, unless the parties agree that an election should be conducted and agree concerning election details. Hearing officers are authorized to conduct pre-election hearings but may not make recommendations as to the result. Third, if there is a question of representation, an election by secret ballot is conducted in an appropriate unit. Fourth, the results of the election are certified.
The Act also permits the Board to delegate its authority to the regional directors who lead the Board's regional offices across the country and provides that, upon request, the Board may review any action of a regional director but that such requests do not stay regional proceedings unless specifically ordered by the Board. 29 U.S.C. 153(b).
Underlying these basic provisions is the essential animating principle that representation cases should be resolved quickly and fairly. As the Supreme Court has recognized, the Act secures a “democratic framework” in which “the Board must adopt policies and promulgate rules and regulations in order that employees' votes may be recorded accurately, efficiently and speedily.”
To further these goals, in 2014 the Board issued a final rule that, while retaining the essentials of then-existing representation case procedures, implemented amendments that removed unnecessary barriers to the fair and expeditious resolution of representation cases.
In short, the 2014 rule was intended, in significant part, to help the Board better achieve its statutory duty to accurately, efficiently, and speedily resolve questions of representation.
The 2014 rule thus did a successful job of furthering the Board's statutory mandate. And it resulted from a careful and comprehensive notice and comment process. Specifically, the Board, over the course of three-and-a-half years, considered tens of thousands of public comments generated over two separate comment periods totaling 141 days, including four days of hearings with live questioning by Board Members.
The 2014 rule was also subjected to legal challenges, which included arguments that it went beyond the Board's statutory authority and was inconsistent with the Act, the Constitution, and/or the Administrative Procedure Act (APA). The courts uniformly rejected these claims and upheld the 2014 rule. See
In 2017, about two-and-a-half years after the effective date of the 2014 rule, a newly composed Board majority issued a Request for Information (RFI) to evaluate whether the 2014 rule should be retained, retained with modifications, or rescinded.
In 2019, the Board issued a final rule that substantially frustrated the 2014 rule's amendments that were responsible for the improvements in the Board's ability to fairly and expeditiously resolve questions of representation.
After a notable decline in representation case processing times that followed the enactment of the 2014 rule, there has been an increase in case processing times following the enactment of the 2019 rule. In fiscal years 2018 and 2019—the last full two years that the 2014 rule was in effect—88.8% and 90.7%, respectively, of representation cases were resolved within 100 days.
The 2019 rule was challenged in court. The district court vacated five of its provisions before they could take effect. Those provisions had (1) extended the time for an employer to furnish the voter list following issuance of a decision and direction of an election or the approval of an election agreement;
The United States Court of Appeals for the District of Columbia Circuit affirmed the district court's ruling in part and reversed it in part. Specifically, it affirmed the district court's vacatur of the provisions regarding the extended time for furnishing the voter list, the delayed certification of election results, and the restrictions on choice of election observers.
In a final rule issued on March 10, 2023, the Board, in compliance with the D.C. Circuit's decision, rescinded the four provisions of the 2019 rule that the court had vacated.
Having now carefully reconsidered the two provisions yet to take effect as well as the other provisions in effect from the 2019 rule, the Board has decided to substantially rescind those provisions in order to return the Board's representation case procedures substantially to those in effect following the implementation of the 2014 rule.
For provisions of the 2019 rule that have not yet taken effect because of the district court's order and the Board's subsequent decision to extend the effective date, there is obviously no relevant data following implementation of the 2019 rule. Accordingly, to assess the likely impact that letting those provisions take effect would have, the most relevant data for the analysis is that from the period preceding implementation of the 2014 rule as compared to the data from the period following implementation of the 2014 rule. That is because allowing those provisions from the 2019 to take effect would return the Board's procedures essentially to the pre-2014 status quo. And because the Board's NxGen case processing database does not include full fiscal year data for years more distant than 2013, the pre-2014 rule data is mostly limited to fiscal years 2013 and 2014. As there is only complete data for those two years prior to the implementation of the 2014 rule, we deemed it most rational to compare the data from those two years to the data from the two fiscal years (2016 and 2017) immediately following implementation of the 2014 rule. Also, because the 2014 rule was implemented in the middle of fiscal year 2015, making it difficult to untangle pre-2014 rule data from post-2014 rule data for that year, we have not included data from that year in the analysis.
This list provides a concise statement of the ways in which this final rule changes or codifies current practice and the general reasoning in support of those steps. It is not “an elaborate analysis of [the] rules or of the detailed considerations upon which they are based”; rather, it “is designed to enable the public to obtain a general idea of the purpose of, and a statement of the basic justification for, the rules.”
1. The pre-election hearing will generally be scheduled to open 8 calendar days from service of the Notice of Hearing. Under the 2019 rule, the pre-election hearing would generally be scheduled to open 14 business days from service of the Notice of Hearing. Restoring the 8 calendar days timeline established by the 2014 rule (which represented an effort to codify and make uniform preexisting best practices) will help the Board to more expeditiously resolve questions of representation while still allowing adequate time for a nonpetitioning party to prepare a Statement of Position and otherwise prepare and make arrangements before the pre-election hearing.
2. Regional directors have discretion to postpone a pre-election hearing for up to 2 business days upon request of a party showing special circumstances and for more than 2 business days upon request of a party showing extraordinary circumstances. Under the 2019 rule, regional directors could postpone a pre-election hearing for an unlimited amount of time upon request of a party showing good cause. Restoring the extension provisions established by the 2014 rule ensures that the pre-election hearing will not be unnecessarily delayed.
3. A nonpetitioning party's Statement of Position responding to the petition generally will be due to be filed by noon the business day before the opening of the pre-election hearing. Because the pre-election hearing will normally open 8 calendar days after service of the Notice of Hearing, the Statement of Position is normally due 7 calendar days after service of the Notice of Hearing. Under the 2019 rule, a nonpetitioning party's Statement of Position was due to be filed 8 business days (or 10 calendar days) after service
4. Regional directors have discretion to postpone the due date for the filing of a Statement of Position for up to 2 business days upon request of a party showing special circumstances and for more than 2 business days upon request of a party showing extraordinary circumstances. Under the 2019 rule, regional directors could postpone the due date for an unlimited amount of time upon request of a party showing good cause. Restoring the extension provisions established by the 2014 rule ensures that the Statement of Position (and the pre-election hearing) will not be unnecessarily delayed.
5. A petitioner shall respond orally to the nonpetitioning party's Statement of Position at the start of the pre-election hearing. Under the 2019 rule, a petitioner was required to file and serve a responsive written Statement of Position 3 business days prior to the pre-election hearing. Restoring the 2014 rule's requirement that the petitioner respond orally at the hearing—rather than in writing 3 business days in advance of the hearing—to the nonpetitioning party's Statement of Position eliminates an unnecessary barrier to the fair and expeditious resolution of representation cases and preserves for the petitioner an adequate opportunity to respond to the nonpetitioning party's Statement of Position, thus continuing to facilitate orderly litigation.
6. An employer has 2 business days after service of the Notice of Hearing to post the Notice of Petition for Election in conspicuous places in the workplace and to electronically distribute it to employees if the employer customarily communicates with its employees electronically. Under the 2019 rule, an employer had 5 business days for the requisite posting and electronic distribution. The restored shorter time frame ensures that the important information contained in the notice will be disseminated earlier to employees and employers alike, while preserving adequate time for employers to achieve posting and distribution.
7. The purpose of the pre-election hearing is to determine whether a question of representation exists. Accordingly, disputes concerning individuals' eligibility to vote or inclusion in an appropriate unit ordinarily do not need to be litigated or resolved prior to an election, and regional directors have authority to exclude evidence that is not relevant to determining whether there is a question of representation and thereby avoid unnecessary litigation on collateral issues that can result in substantial waste of resources. Under the 2019 rule, individual eligibility and inclusion issues were “normally” to be litigated at the pre-election hearing and resolved by the regional director prior to the election. Restoring the 2014 rule language more efficiently avoids litigating and resolving issues that are often mooted by the election results or amicably resolved following an election and permits fairer and more expeditious resolution of representation cases.
8. Parties may file post-hearing briefs with the regional director only with the regional director's special permission (following
9. Regional directors ordinarily should specify the election details—(the type, date(s), time(s), and location(s) of the election and the eligibility period)—in the decision and direction of election and should ordinarily simultaneously transmit the Notice of Election with the decision and direction of election. The parties will have already taken positions with respect to the election details in writing prior to the hearing and on the record at the hearing. Under the 2019 rule, regional directors were allowed to convey election details in the decision and direction of election (and to simultaneously transmit the Notice of Election with the decision and direction of election), but emphasis was placed on their discretion to convey them in a later-issued Notice of Election. By leaving no doubt that the ordinary course is to convey election details in the decision and direction of election and to simultaneously transmit the Notice of Election, the restored standard eliminates redundant and wasteful post-decision consultation regarding election details and, in turn, furthers the expeditious resolution of representation cases, while leaving regional directors free to engage in additional consultation where necessary.
10. Regional directors shall schedule elections for “the earliest date practicable” after issuance of a decision and direction of election. While the 2019 rule contained the same language, it also imposed a 20-business day waiting period between the decision and direction of election and the election that the 2014 rule had eliminated. The elimination of the mandatory waiting period language will reduce delay and eliminate an unnecessary barrier to the fair and expeditious resolution of questions of representation.
Before explaining the specific provisions of the final rule, we address the general issues of the Board's rulemaking authority; the shortcomings of the 2019 rule; and the desirability of this final rule to substantially rescind the 2019 rule and reinstitute the 2014 rule.
Congress delegated both general and specific rulemaking authority to the Board. Generally, Section 6 of the Act, 29 U.S.C. 156, provides that the Board “shall have authority from time to time to make, amend, and rescind, in the manner prescribed by the Administrative Procedure Act . . . such rules and regulations as may be necessary to carry out the provisions of this Act.” Specifically, Section 9(c), 29 U.S.C. 159(c)(1), contemplates rules concerning representation case procedures, stating that elections will be held “in accordance with such regulations as may be prescribed by the Board.”
The Supreme Court unanimously held in
In
We draw two lessons from
The 2019 rule was promulgated without notice and comment, in contrast to the 2014 rule. We believe that the process that culminated in the 2014 rule was superior, even if, aside from the provisions vacated by the D.C. Circuit, notice and comment was not legally required. In any case, in our policy judgment, the 2014 rule was superior to the 2019 rule. The shortcomings that mark the 2019 rule and the improvements made by reverting to the 2014 rule are largely addressed in the provision-specific discussion below but are previewed here.
As explained, the Board's 2014 rule, to which we return in this rulemaking, was the product of extensive notice and comment. The 2019 rule, which significantly altered the 2014 rule, was not. Even if notice and comment was not required by the APA for most provisions addressed in the 2014 and 2019 rules, it provided useful guidance in crafting of the 2014 rule. In our view, because the 2019 Board was contemplating substantially altering important representation case procedures that were the product of notice and comment, it may have been preferable if the Board had sought and relied on the input of relevant stakeholders, including workers, unions, employers, and legal practitioners, as the Board did in 2014.
The 2019 Board seemed to recognize the value of gathering the perspectives of stakeholders in at least some instances. Indeed, the same majority invited notice and comment in four other rulemaking proceedings.
The 2019 Board also did not assess empirical data that the agency maintains. The 2019 Board conducted no analysis of more than four years of available agency data and records that provide insight into the impact of the 2014 rule, and it did not invoke its own experience administering the 2014 rule. Instead, the 2019 Board simply asserted that it was making changes to promote “fairness, accuracy, transparency, uniformity, efficiency, certainty, and finality” even though there was no data—empirical, anecdotal, experiential, or otherwise—substantiating its conclusion that the 2014 rule impaired those interests or that its rule would promote them.
Section 9 of the Act is animated by the principle that representation cases should be resolved quickly and fairly. As the Supreme Court has recognized, the Board “must” adopt policies and promulgate rules and regulations in order that “employees' votes may be recorded accurately, efficiently and speedily.”
There is no precedent for the deliberate decision of the 2019 Board to lengthen, rather than shorten, the representation case process. Even with certain of the 2019 rule's delay-causing provisions enjoined by court order, the data tends to show that it still has caused substantial delay. For instance, in the last two full years that the 2014 rule was fully in effect, 88.8% and 90.7% of representation cases were resolved within 100 days,
The 2019 Board was willing to accept the delay that it knew its amendments would cause because it said those amendments would “advance fairness, accuracy, transparency, uniformity, efficiency, and finality,” which it characterized as a “worthwhile tradeoff.”
The 2019 rule, by design, contemplated a slower representation case process, notwithstanding the Board's statutory mission to speedily and efficiently process representation cases. In the absence of any evidence that the 2019 rule has had, or might reasonably be expected to have, countervailing policy benefits that outweighed the clear potential for increased delay, and based on our determination that the policies of the Act are better served by the 2014 rule, the Board has decided to promulgate the instant rule that substantially rescinds the 2019 rule and reinstates the 2014 rule. Doing so will enhance the speed and efficiency with which the Board processes representation cases with, as noted in the previous paragraph, no discernible diminishment of fairness, accuracy, transparency, uniformity, and finality. The Board makes this change, “conscious” of its “change of course,” because “there are good reasons” for returning to the 2014 rule, and based on those reasons, we believe that that rule does a better job of advancing the purposes of the Act than the 2019 rule. See
The provisions of the Board's representation case procedures that we address in this rule are all procedural as defined in 5 U.S.C. 553(b)(A) and so this rule is exempt from notice and comment.
Unless the parties enter into an election agreement, the Board may not conduct an election without first holding a pre-election hearing to
The 2014 rule provided that a pre-election hearing would commence 8 calendar days from the date of the service of the Notice of Hearing, except in cases presenting unusually complex issues.
The 2019 rule, however, more than doubled the applicable time frame, delaying the opening of the pre-election hearing from 8 calendar days to 14 business days from service of the Notice of Hearing.
The 2019 Board provided no empirical basis for concluding that the 2014 rule time frame for the opening of the pre-election hearing needed changing. Rather, the 2019 Board principally asserted that revision of the timeline was “essentially dictated” by the other changes that the 2019 Board had voluntarily decided to make to the Statement of Position provisions of the 2014 rule.
The 2019 Board's secondary rationales for extending the timeline are not compelling. The assertion that a longer timeline would allow parties to better deal with “preliminary arrangements,” like retaining counsel, identifying and preparing witnesses, gathering information, and arranging any travel, and other “procedural obligations,”
We reject our dissenting colleague's contention that our assessment of policy priorities in setting the time frame for opening of the pre-election hearing amounts to a denial of due process. He quotes one generalized statement of due process requirements but then does not explain why the time frame we set does not satisfy those requirements. He also fails to meaningfully engage with the relevant legal discussion on this issue in the 2014 rule. See 79 FR at 74371-74373. Moreover, as noted in fn.51, the courts have uniformly rejected due process challenges to the 2014 hearing scheduling provisions.
The 2019 Board also speculated that additional time would give parties “better opportunity to reach election agreements.”
The 2019 Board also asserted that a 14-business day timeline “may” ease “logistical burdens” on the agency's regional personnel.
The 2019 Board's final justification—that a 14-business day timeline brings the pre-election hearing schedule “into closer alignment” with the post-election hearing schedule
To further expedite the resolution of representation cases and promote uniformity and transparency, this final rule also reinstates the 2014 rule's standard for postponement of a pre-election hearing. Accordingly, a regional director can postpone a pre-election hearing for up to 2 business days upon request of a party showing special circumstances and for more than 2 business days upon request of a party showing extraordinary circumstances.
The final rule also reinstitutes the 2014 rule's requirement that the nonpetitioning party's Statement of Position is due to be filed by noon the business day before the opening of the pre-election hearing.
This 7-day time frame is sufficient for completion of the Statement of Position.
Our dissenting colleague is no more persuasive in contending that “due process demands” more than 7 calendar days for a nonpetitioning party to prepare a Statement of Position. He fails to engage with due process case law or to explain how the 3-day difference between our 7-day provision of preparation time and his preferred 10-day standard crosses over to a standard that falls short of constitutional guarantees.
The 2019 Board did not rely on empirical evidence or other data to extend the due date for the nonpetitioning party's Statement of Position to 8 business days after service of the Notice of Hearing. The 2019 Board speculated that giving parties
To further expedite the resolution of representation cases and promote uniformity and transparency, this rule also reinstitutes the 2014 rule's standard for an extension of time for the filing of a Statement of Position. Accordingly, a regional director may postpone the due date for the filing of a Statement of Position up to 2 business days upon request of a party showing special circumstances and for more than 2 business days upon request of a party showing extraordinary circumstances.
This rule also rescinds the 2019 rule's requirement that a petitioner file a written responsive Statement of Position by noon 3 business days after the nonpetitioning party's filing of its Statement of Position and 3 business days before the opening of the pre-election hearing.
The gains in terms of expedition are substantial. By eliminating the 3 business days that a petitioning party has to formulate a written response to a nonpetitioning party's Statement of Position and further eliminating the additional 3 business days of mandated waiting that follows, the Board has eliminated 6 business days from the representation case process. This delay—and the responsive Statement of Position that the 2019 Board used to justify it—was unnecessary.
As the 2019 Board itself admitted, the petitioner already takes a written position on certain key issues to be resolved at the pre-election hearing in its petition.
The 2019 Board also asserted that the “[m]ost important[]” feature of requiring a written responsive Statement of Position was “greater efficiency.”
In sum, the 2019 rule's requirement of a written responsive Statement of Position plus delay of 6 additional business days has hindered the expeditious resolution of representation cases. Accordingly, this rule—to further the agency's statutory mission of expeditious and efficient resolution of representation cases—eliminates the responsive Statement of Position requirement and its attendant 6-business day delay.
The posting and electronic distribution of the Notice of Petition for Election serves the important purpose of quickly and clearly communicating to employees and employers alike important information about the representation case process. This effective mechanism for accurate information sharing—which the 2019 Board admitted serves a “laudatory purpose”
Given the straightforward but essentially important information conveyed by this Notice of Petition for Election, the 2014 rule provided for the employer to post it within 2 business days after service of the Notice of Hearing in conspicuous places in the workplace and to electronically distribute it to employees if the employer customarily communicates with its employees electronically. That timeline is warranted.
Accordingly, this rule rescinds and replaces the 5-business day time frame that the 2019 rule gave employers to post the Notice of Petition for Election after service of the Notice of Hearing.
The 2019 Board's other rationale for a 5-business day time frame was that quick dissemination of the Notice was “less urgent” because of the delay its rule had imposed in the opening of the pre-election hearing.
Section 9(c)(1) of the Act establishes the purpose of a pre-election hearing: to determine whether a question of representation exists.
It is inefficient to encourage parties to litigate individual eligibility and inclusion issues at the pre-election hearing. By not addressing these individual eligibility and inclusion issues in the ordinary course at the pre-election hearing, unnecessary litigation is eliminated. Specifically, if a majority of employees votes against representation in the election, even assuming all the disputed votes were cast in favor of representation, then the disputed eligibility and inclusion questions become moot and therefore never have to be litigated or decided. If, on the other hand, a majority of employees chooses to be represented, even assuming all the disputed votes were cast against representation, then the Board's experience suggests that the parties are often able to resolve the resulting unit placement questions in the course of bargaining once they are free of the tactical considerations that exist pre-election.
The gains in efficiency and expedition are not just accrued in the minority of representation cases that require a pre-election hearing. Bargaining between the parties always takes place in the shadow of the law—that is, against the backdrop of what
The 2019 rule's directive that individual eligibility and inclusion issues ordinarily should be litigated at the pre-election hearing and decided prior to the election has never taken effect because of the district court's order enjoining it,
Further, the 2019 Board ignored the 2014 Board's explanation of why permitting regional directors to deny litigating a small number of individual eligibility or inclusion issues was unlikely to increase the number of determinative challenge cases requiring post-election litigation of those issues.
Significantly, the Board's experience since the 2014 rule provisions went into effect confirms the validity of the 2014 Board's judgment in this regard and undermines the 2019 Board's conclusion that the 2014 rule's benefits of avoiding unnecessary litigation that also delays elections comes at the expense of certainty, finality, and efficiency. After the 2014 rule went into effect, the number of elections resulting in determinative challenges remained stable, despite a significant increase in regional directors approving election agreements in which certain individuals vote subject to challenge.
The 2019 Board provided several justifications for its expansion of litigation at the pre-election hearing but none of them is compelling. Its justification articulated in terms of enhanced finality and certainty
The 2019 Board's concern that individual questions of supervisory status, if not decided pre-election, would prevent employers from knowing who they can use to campaign against a union in the pre-election campaign and would increase the possibility of post-election objections based on conduct attributable to an individual whose eligibility and/or supervisory status was not resolved prior to an election is similarly unpersuasive.
Information produced from searches in the Board's NxGen case processing software shows that in fiscal years 2016 and 2017, which were the first two full fiscal years after the implementation of the 2014 rule, there were 114 cases requiring a regional decision on objections following an election and 61 cases in which regional directors directed rerun elections, as compared to 3,203 total elections, amounting to objections in 3.56% of all elections and reruns in 1.9% of all elections. For fiscal years 2013 and 2014, which were the last two full fiscal years prior to the implementation of the 2014 rule, there were 118 objections cases and 59 reruns as compared to 3,240 total elections, amounting to objections in 3.64% of all elections and reruns in 1.82% of all elections. Thus, the implementation of the 2014 rule did not cause a spike in either post-election objections or in elections needing to be rerun.
The 2019 Board's justification grounded in fair and accurate voting and transparency—namely, that resolving individual eligibility or inclusion issues before the election would permit employees to know the “precise contours” of the unit in which they are voting
In sum, by rescinding the 2019 amendments and restoring the 2014 rule language, we reduce unnecessary litigation and eliminate an unnecessary barrier to the fair and expeditious resolution of questions concerning representation.
Consistent with the modifications to Section 102.64 explained immediately above and for the reasons discussed there, this reinstated rule reverts Section 102.66(a) to the version that resulted from the 2014 rule to clarify that the evidence admissible at a pre-election hearing is normally limited to the existence of a question of representation and is not admissible as to other issues. Further consistent with that and for the same reasons, this rule modifies Section 102.66(c) to eliminate the introduction of evidence that is not consistent with the offer of proof procedure for the receipt of evidence concerning the existence of a question of representation.
Generally, in formal agency adjudication, parties are entitled to briefing.
Rescission of the blanket entitlement to post-hearing briefing is warranted given the recurring and uncomplicated legal and factual issues arising in pre-election hearings. There is a relatively contained body of law applicable in the repeated factual contexts that present issues at pre-election hearings, and, accordingly, in the vast majority of cases, regional directors can properly resolve the issues without briefing.
We also note that, just as was the case under the 2014 rule, parties remain entitled to file a brief with the Board in support of any request for review of the regional director's decision and direction of election. 79 FR at 74402.
The Board thus has no reason to believe that the quality of regional director decisions will decline. Regional directors infrequently make incorrect decisions in the pre-election context. Since the 2019 rule took effect, there has been no decline in the proportion of cases in which the Board grants review or reverses regional director pre-election decisions, which tends to show that the default entitlement to post-hearing briefing has not helped regional directors reach the right results or avoid prejudicial errors to an even greater degree.
An election cannot be conducted until the details of the election are set and the Notice of Election advises the employees of when, where, and how they may vote. Prior to the 2014 rule, these details were resolved after the decision and direction of election issued in sometimes lengthy telephone consultations and negotiations with the various parties.
This amendment thus reverts to the standard of the 2014 rule
Both the 2014 rule and the 2019 rule provided that regional directors shall schedule elections for the earliest date practicable.
The scheduling of an election for the earliest date practicable furthers the Board's statutory mission to expeditiously process representation cases. A mandated waiting period—which effectively stays the election in every contested case for a set period of time—is, as a threshold statutory matter, in tension with Congress's instruction in Section 3(b) of the Act that the grant of review of a regional director's action “shall not, unless specifically ordered by the Board, operate as a stay of any action taken by the regional director.”
Rescinding the mandatory waiting period—which, on its terms, exists solely to permit the Board to rule on any request for review that may be filed with 10 business days of a direction of election
The 2019 Board admitted that its mandated waiting period would run counter to the statutory goal of expeditious resolution of representation cases.
We further note that the 2019 Board conceded that “[i]n many respects,” its waiting period amendment “goes hand-in-hand with [its] amendment permitting litigation of eligibility and inclusion issues at the pre-election hearing and serves the same policy interests.”
The 2019 Board's speculations that a mandated month-long waiting period would promote finality, certainty, uniformity, transparency, and fairness and accuracy are unavailing for additional reasons. First, in the vast majority of representation cases, the parties are able to reach an election agreement that necessarily precludes the possibility of a pre-election request for review. In the majority of the comparatively small percentage of contested cases, parties choose not to file a request for review.
In sum, there is a very small number of cases where: (1) a party files a request for review before the election; (2) the Board rules on the request for review prior to the election; and (3) the Board's ruling reverses the regional director's decision. That means that the 2019 rule's waiting period would cause delay in every contested case (and every stipulated election case—comprising the vast majority of the Board's representation case docket—whose terms are impacted by parties' estimations of how much time would transpire before the election if the nonpetitioning party insisted on a pre-election hearing) in order to claim a nebulous and unproven enhancement of finality, certainty, uniformity, transparency, and fairness and accuracy in the tiny number of cases that meet these three uncommon conditions. We do not judge that tradeoff to be worthwhile. Delay for no benefit in the vast majority of cases would not be offset by improved finality, certainty, uniformity, transparency, and fairness and accuracy in a tiny number of cases.
Accordingly, to eliminate an unnecessary barrier to the fair and expeditious resolution of questions of representation, with the necessary flexibility for regional director adjustment to the circumstances of any particular case, this rule rescinds the month-long waiting period and directs regional directors to schedule an election for as soon as practicable after the direction of an election.
To further enhance the expeditious resolution of questions concerning representation without any countervailing decline in other policy interests, this rule also rescinds the 2019 rule's blanket entitlement for parties to file post-hearing briefs with the hearing officer in all cases.
Certification of the results of a Board-conducted election cannot issue until any determinative challenges or election objections are resolved. Thus, by giving parties an entitlement of 5 business days—and up to an additional 10 business days upon a showing of good cause—to file briefs following the close of the post-election hearing, the 2019 rule built in another layer of delay. Rescinding this blanket entitlement for briefing thus further reduces delay and thereby promotes finality and, by avoiding another round of briefing, saves the Board and the parties resources expended on repetitive argument. The parties will already have had a chance to present argument on the challenges and objections at the hearing itself. Many of these challenges and objections issues are straightforward and frequently reoccurring. Hearing officers thus gain expertise in resolving them and only rarely need to resort to briefing to do so. When such briefing would be helpful, they can allow it.
Our dissenting colleague makes a number of provision-specific arguments that we have rebutted in the discussion above. Generally, these arguments assert that our reinstatement of some aspect of the 2014 rule will have various negative consequences. But those arguments suffer from the same defect as the rationale for the 2019 rule itself: They lack factual support, notwithstanding that the 2014 rule was in effect for five years. If there were negative consequences arising from it, our dissenting colleague should be able to demonstrate as much.
The balance of the dissent makes two broader arguments, each claiming that we have failed to engage in reasoned decision making. Thus, our colleague argues (1) that we have improperly prioritized expedition in the representation case process at the supposed expense of employees being fully informed and (2) that we have improperly considered representation case data that was likely impacted by the COVID-19 pandemic. As we explain below, each of these arguments misses the mark.
The Board has a statutory duty to ensure that representation cases are resolved expeditiously. As we have noted, Congress has described “the exceptional need for expedition” in representation cases,
In fulfilling that statutory duty, we have not sacrificed employees' ability to become fully informed voters. As extensively explained in the 2014 rule's preamble, the changes to the Board's election procedures will continue to provide a meaningful opportunity for campaign speech before the election, and thus a sufficient opportunity for employees to become fully informed voters.
The dissent's other argument—questioning the data we have considered—is equally unfounded. Even putting aside the data which support our policy choice here, we would still choose to substantially rescind the 2019 rule and reinstate the 2014 rule. As we have explained above, the 2019 Board necessarily acknowledged it was adding time to the representation case process
Our dissenting colleague's argument also disregards the fact that, in addition to the more recent data we cite, our policy choice is supported by a substantial amount of data from both the period immediately prior to the effective date of the 2014 rule and the period when the 2014 rule was in effect.
Indeed, we note that, because some of the 2019 rule provisions—regarding the scope of the pre-election hearing and the waiting period between issuance of the decision and direction of election and the election itself—did not go into effect and because the 2019 rule stated that those provisions largely restored the pre-2014 rule status quo (84 FR at 69525, 69539-69542, 69544-69545), the relevant comparison with respect to those provisions is not between the pre-2019 rule and the post-2019 rule COVID-19 periods, but between the periods before and after the implementation of the 2014 rule.
As for the more recent data from fiscal years during the COVID-19 pandemic, that data only provides further confirmatory support for our policy judgment. We have fully acknowledged that some of the recent delay in representation cases is likely attributable to the effects of the COVID-19 pandemic, but, as we have explained, we believe that some of the delay, as borne out in the data, is also due to the 2019 rule, given the 2019 Board's concession that its rule would lengthen the representation case process. Moreover, as we have demonstrated above, the recent data also provides confirmatory support for the conclusion that the 2019 rule has not demonstrably improved fairness, accuracy, transparency, uniformity, and finality. As we have explained, the 2019 Board never provided any evidence that there was a problem related to these policy values under the 2014 rule. Nor, examining pre-COVID-19 data, have we found such evidence. That the recent data is consistent with those prior conclusions simply confirms that our policy judgment is more than amply supported.
Member Marvin E. Kaplan, dissenting.
My colleagues reinstate the
As just one example, the Board has expressly recognized that “ensuring that all employees are fully informed about the arguments concerning representation and can freely and fully exercise their Section 7 rights” is an
Further, my colleagues are revoking the 2019 Rule before there has been any opportunity to obtain relevant data pertaining to the effects of that rule. In
My colleagues repeatedly state that the Board's internal data regarding the processing of representation petitions after the implementation of the 2019 Rule demonstrate that the rule lengthened election times without any appreciable improvement in the other interests upon which the Board relied in promulgating that rule. In doing so, my colleagues chiefly rely on data taken from the first two years that the 2019 Rule was effective. However, the COVID-19 pandemic began shortly after the Board implemented the 2019 Rule. It cannot reasonably be disputed that the pandemic caused the Board to conduct elections in a manner so different from the norm that any data derived therefrom, especially with regard to the time that it took to hold elections, is not representative data. Accordingly, because that data does not exist, my colleagues fail to establish that their decision to revoke the 2019 Rule is based on any relevant data, as required by the Supreme Court.
“Due to the extraordinary circumstances related to the pandemic,” the Board was forced to temporarily suspend elections in March 2020 in order to “ensure the health and safety of Board employees as well as members of the public involved in the election process.”
Despite the truly unprecedented circumstances faced by the Board in conducting elections after the implementation of the 2019 Rule, my colleagues attempt to rely on data from that period, acknowledging only that the effects of the COVID-19 pandemic
Because no representative data yet exists with regard to the effect on the 2019 Rule on election processes, there is no data to support my colleagues' conclusion that the 2019 Rule is a “failure.” Nor is there evidence to suggest that the “increased delay apparently attributable to the 2019 [R]ule has [not] been offset by meaningful improvements in furthering the interests cited by the Board.” Accordingly, my colleagues have failed to establish that data justifies their decision to revoke the 2019 Rule.
As a participant in the promulgation of the 2019 Rule, I have already explained, at length, why the revocation of the 2014 Rule was necessary and why the 2019 better effectuated the purposes of the Act. See 84 FR at 69526-69587. My additional comments in this dissent are not meant to replace those explanations but rather to supplement them.
My colleagues reinstate the 2014 Rule's significant contraction of the time period between the filing of a petition
Their explanation for reimposing such a strict limitation on the time available to parties to prepare for the hearing and file a statement of position
Throughout the 2014 Rule, the Board justifies its significant overhaul of the Board's representation rules by saying that the amendments reflect “best practices.” In fact, the 2014 Rule uses this phrase at least ten times without providing any basis whatsoever for concluding that the amendments being proposed have been found to be “best practices” by anyone other than the Board in writing its rules. See,
Thereafter, the 2014 Rule cites to that Report frequently as evidence that aspects of the rule are consistent with what was considered a “best practice.” See id. at 74401 n.434; 74415 n.470; 74416; 74427 n.528. Unlike other aspects of the 2014 Rule, however, the Board did not adopt the “best practice” set forth in the Report in establishing the deadline for scheduling the pre-election hearing. The 1997 Report indicated that, as a best practice, hearings should open between ten and fourteen days after the filing of the petitions.
The pre-election hearing will generally be scheduled to open 8 days from notice of the hearing. This largely codifies
79 FR at 74309 (emphasis added).
It is also worth noting that my colleagues fail to give significant weight to the negative effects that their rules will have on employers in general, and small businesses in particular. My colleagues attempt to minimize these effects, accusing the 2019 Rule of unnecessarily sacrificing “the statutory interest in expeditiously resolving questions of representation” to, among other things, the “non-statutory interest in maximizing employer convenience.” Among these “non-statutory interests” that the 2019 Rule sought to protect are the “convenience” of retaining legal counsel, the “convenience” of adequately gathering the facts, the “convenience” of fully researching the applicable law, the “convenience” of securing witnesses; the “convenience” of adequately coordinating with regional personnel; and the “convenience” of having sufficient time to secure an election agreement with the other parties. What my colleagues characterize as “conveniences,” I characterize as basic fairness and due process.
As mentioned above, my colleagues place significant emphasis on an “observation” made by the Supreme Court in
But more importantly, my colleagues completely disregard the actual holding in
The principle of majority rule, however, does not foreclose practical adjustments designed to protect the election machinery from the ever-present dangers of abuse and fraud. Indeed, unless such adjustments are made, the democratic process may be perverted, and the election may fail to reflect the will of the majority of the electorate.
Long experience has demonstrated the fairness and efficaciousness of the general rule that once a ballot has been cast without challenge and its identity has been lost; its validity cannot later be challenged. This rule is universally recognized as consistent with the democratic process. And it is generally followed in corporate elections.
Moreover, the rule in question is one that is peculiarly appropriate to the situations confronting the Board in these elections. In an atmosphere that may be charged with animosity, post-election challenges would tempt a losing union or an employer to make undue attacks on the eligibility of voters so as to delay the finality and statutory effect of the election results. Such challenges would also extend an opportunity for the inclusion of ineligible pro-union or anti-union men on the pay-roll list in the hope that they might escape challenge before voting, thereafter, giving rise to a charge that the election was void because of their ineligibility and the possibility that they had voted with the majority and were a decisive factor. The privacy of the voting process, which is of great importance in the industrial world, would frequently be destroyed by post-election challenges. And voters would often incur union or employer disfavor through their reaction to the inquiries.
Accordingly, my colleagues ignore the inconvenient fact that the Supreme Court found—
Because my colleagues would limit the scope of the pre-election hearing consistent with the 2014 Rule, they would also rescind the 2019 Rule's provisions pertaining to the parties' right to introduce relevant facts into the record and call, examine, and cross-examine witnesses at the pre-election hearing. For the reasons summarized above and more fully stated in the 2019 Rule, I would retain these additional provisions as well. 84 FR at 69542.
Finally, my colleagues argue that “[s]upervisory status issues exist only at the margin because in most cases where there is uncertainty concerning the supervisory status of one or more individuals, the employer nevertheless has in its employ managers and supervisors whose status is not in dispute . . . . [and who] may . . . be utilized in a pre-election campaign against a union.” As the 2019 Rule observed, however, this issue is not simply about an employer disseminating its message to employees, it is about “post-election complications where the putative supervisors engage in conduct during the critical period
As discussed above, my colleagues have failed to establish that the 2014 Rule met the requirement under the Administrative Procedures Act by providing a non-arbitrary, reasoned basis for requiring regional directors to schedule pre-election hearings no more than eight calendar days from the service of the Notice of Hearing.
As explained in the 2019 Rule, I disagree with this provision of the 2014 Rule. See 84 FR at 69534-69538. The 2019 Board determined that the statement of position is an effective tool in narrowing the issues to be litigated and even in facilitating election agreements. However, the statement of position can only be effective if the parties have adequate time to prepare it. Parties must craft a statement of position while simultaneously retaining counsel, researching facts and law, identifying potential witness, and possibly negotiating election agreements. But even if my colleagues are, in effect, deciding that it is not important that parties have sufficient time to prepare statements of position, it is then arbitrary and capricious for them also to preclude parties from later raising an argument that did not appear in its statement of position. Either statements of position play an important role in representation case procedures or they do not. If the latter is true, then I'm not sure why my colleagues continue to require parties to file them at all. If the former is true, then due process demands that parties have an adequate time to consider all possible concerns that they might wish to raise with regard to the election, given that those concerns will be deemed waived if they are not set forth in the Statement of Position.
My colleagues also rescind the 2019 Rule provision requiring the petitioner to file a written responsive statement of position, instead requiring the petitioner to respond orally at the pre-election hearing, as was done under the 2014 Rule. For the reasons stated in the 2019 Rule, retention of the right to file a written responsive statement of position better supports the interests of timeliness, efficiency, transparency, and uniformity in elections. 84 FR at 69536-69538
My colleagues rescind the 2019 Rule's requirement that employers post and distribute the notice of petition for election within five business days after service of the notice of hearing and return to the 2014 Rule, which required the posting and distribution of the notice to be done within two business days. The majority argues that because the information contained in the notice is “straightforward,” an employer should have no problem promptly completing this task.
Although the majority views the posting and distribution as a simple task, this ignores the realities of the modern workplace. As more fully explained in the 2019 Rule, employers can easily encounter logistical difficulties in posting and distributing the notice. 84 FR at 69538. Large employers, especially large multi-location employers, need time to determine all of the places where the notice will need to be posted and all of the employees to whom it must be electronically distributed. Such information cannot always be easily ascertained by a few keystrokes at some far-off centralized human resources department, as my colleagues so readily believe. Smaller employers, who may not be well versed in the intricacies of the Board's election rules, too will need time to consult with legal counsel to fully understand their obligations to post and distribute the notice in addition to securing the information necessary to satisfy that obligation. Getting these decisions right is critical because failure to properly post and distribute the notice of petition for election in a timely manner may result in setting aside the election. Moreover, with the expanded timeframe under the 2019 Rule, the notice will be posted for longer than under the 2014 Rule, thereby better informing employees of their rights and the election procedures. As a result, the few extra days to comply with this important requirement better serves the purposes of the Act.
Prior to the 2014 Rule, the Board's statements of procedure provided that the regional director would not normally schedule an election until a date between the 25th and 30th day after the date of the decision and direction of election, which allowed the Board time to act on any requests for review. The 2019 Rule slightly modified this traditional timeline, requiring regional directors to schedule elections no sooner than twenty business days after issuance of the decision and direction. As mentioned above, this period following the issuance of the decision and direction of election is critical to protect employees' rights under the Act to freely choose whether or not to be represented by a union. Again, the Board has expressly recognized that “ensuring that all employees are fully informed about the arguments concerning representation and can freely and fully exercise their Section 7 rights” is an
Simply put, no one can say for certain how much time in sufficient time to allow an electorate to become fully informed voters. However, I think it is fair to say that it is difficult to imagine a rule that would more directly infringe on employees' rights in this regard than requiring that elections be scheduled “as soon as practicable.” For the reasons set forth in the 2019 Rule, 84 FR at 69538-69542, 69544-69547, and summarized in my dissent to the final rule staying the implementation of these provisions, 88 FR at 14915, I believe that the majority has failed to adequately consider the important statutory interest in allowing employees to become “fully informed” voters in reinstating the unprecedented requirement that regional directors schedule elections as soon as possible.
Because my colleagues would limit the scope of the pre-election hearing consistent with the 2014 Rule, they would also rescind the 2019 Rule's provisions pertaining to the parties' right to introduce relevant facts into the record and call, examine, and cross-examine witnesses at the pre-election hearing. For the reasons summarized above and more fully stated in the 2019 Rule, I would retain these additional provisions as well. 84 FR at 69542.
My colleagues simply echo the arguments advanced in the 2014 Rule to support their conclusion that employees will have the opportunity to become fully informed even under their shortened timeframe. However, the dissenters to the 2014 Rule ably discussed the flawed evidence and analysis on which the 2014 majority relied. 79 FR at 74439-74440.
My colleagues also rescind provisions of the 2019 Rule that reinstated the parties' right to file briefs after close of the pre-election hearings and extended that right to post-election hearings.
My colleagues attempt to downplay the significance of the elimination of parties' opportunity to file post-hearing briefs by asserting that, the regional directors and hearing officers can grant “special permission” in the “rare complex case” in which they deem such briefing is needed. With due respect, it is cold comfort to parties to learn that their ability to advocate for their position in writing is only available should the regional director or hearing officer grant them permission to do so.
Finally, my colleagues rescind the 2019 Rule provision that clarified the regional directors' discretion to issue the direction of election separately from the notice of election by expressly stating that they “may” do so and return to the 2014 Rule, which stated that regional directors will “ordinarily” do so. As the 2019 Rule correctly observed, by clarifying the regional directors' discretion to issue a direction of election and resolve election details later without having to justify a bifurcated action based on the existence of “unusual circumstances,” the 2019 Rule made the process more
My colleagues' efforts are, at best, unnecessary and premature and, at worst, arbitrary and capricious. The Final Rule forces regional directors to run elections as quickly as possible, without providing adequate safeguards to preserve the rights of all parties involved. My colleagues have failed to provide a reasoned basis for concluding that speedy elections protect employees' right to fully exercise their statutory rights under the Act. Nor have my colleagues established any representative data to support their view that the 2019 Rule must be revoked. For the reasons discussed in this dissent, as well as the analyses set forth in the Board's 2019 Rule and the cited portions of the dissent to the 2014 Rule, I cannot join my colleagues in promulgating the amendments set forth in this Rule.
The Board is not required to prepare a final regulatory flexibility analysis for this final rule under the Regulatory Flexibility Act, as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 601,
The amended regulations are exempt from the Paperwork Reduction Act of 1995, 44 U.S.C. 3501
This rule is published as a final rule. As discussed above in the preamble, and consistent with the decision in
Administrative practice and procedure, Labor management relations.
For the reasons stated in the preamble, the National Labor Relations Board amends 29 CFR part 102 as follows:
29 U.S.C. 151, 156. Section 102.117 also issued under 5 U.S.C. 552(a)(4)(A), and Section 102.119 also issued under 5 U.S.C. 552a(j) and (k). Sections 102.143 through 102.155 also issued under 5 U.S.C. 504(c)(1).
(a)
(2) Within 2 business days after service of the Notice of Hearing, the employer shall post the Notice of Petition for Election in conspicuous places, including all places where notices to employees are customarily posted, and shall also distribute it electronically to employees in the petitioned-for unit if the employer customarily communicates with its employees electronically. The Notice of Petition for Election shall indicate that no final decisions have been made yet regarding the appropriateness of the petitioned-for bargaining unit and whether an election shall be conducted. The employer shall maintain the posting until the petition is dismissed or withdrawn or the Notice of Petition for Election is replaced by the Notice of Election. The employer's failure properly to post or distribute the Notice of Petition for Election may be grounds for setting aside the election whenever proper and timely objections are filed under the provisions of § 102.69(a)(8). A party shall be estopped from objecting to the nonposting of notices if it is responsible for the nonposting, and likewise shall be estopped from objecting to the nondistribution of notices if it is responsible for the nondistribution.
(b)
(i)
(B) The Statement of Position shall also state the name, title, address, telephone number, facsimile number, and email address of the individual who will serve as the representative of the employer and accept service of all papers for purposes of the representation proceeding and be signed by a representative of the employer.
(C) The Statement of Position shall include a list of the full names, work locations, shifts, and job classifications of all individuals in the proposed unit as of the payroll period preceding the filing of the petition who remain employed at the time of filing, and if the employer contends that the proposed unit is inappropriate, the employer shall separately list the full names, work locations, shifts, and job classifications of all individuals that the employer contends must be added to the proposed unit to make it an appropriate unit. The employer shall also indicate those
(2)
(i)
(ii)
(iii)
(3)
(B) The Statements of Position of the employer and the certified or recognized representative shall state each party's position concerning the Board's jurisdiction over the employer; state whether each agrees that the proposed unit is appropriate, and, if not, state the basis for the contention that the proposed unit is inappropriate, and state the classifications, locations, or other employee groupings that must be added to or excluded from the proposed unit to make it an appropriate unit; identify any individuals whose eligibility to vote each party intends to contest at the pre-election hearing and the basis of each such contention; raise any election bar; and state each party's respective positions concerning the type, date(s), time(s), and location(s) of the election and the eligibility period; and describe all other issues each party intends to raise at the hearing.
(C) The Statements of Position shall also state the name, title, address, telephone number, facsimile number, and email address of the individual who will serve as the representative of the employer or the certified or recognized representative of the employees and accept service of all papers for purposes of the representation proceeding and be signed by a representative of the employer or the certified or recognized representative, respectively.
(D) The employer's Statement of Position shall also include a list of the full names, work locations, shifts, and job classifications of all individuals in the proposed unit as of the payroll period preceding the filing of the petition who remain employed at the time of filing, and if the employer contends that the proposed unit is inappropriate, the employer shall separately list the full names, work locations, shifts, and job classifications of all individuals that the employer contends must be added to the proposed unit to make it an appropriate unit. The
(c)
(a) The purpose of a hearing conducted under Section 9(c) of the Act is to determine if a question of representation exists. A question of representation exists if a proper petition has been filed concerning a unit appropriate for the purpose of collective bargaining or concerning a unit in which an individual or labor organization has been certified or is being currently recognized by the employer as the bargaining representative. Disputes concerning individuals' eligibility to vote or inclusion in an appropriate unit ordinarily need not be litigated or resolved before an election is conducted. If, upon the record of the hearing, the Regional Director finds that a question of representation exists, the director shall direct an election to resolve the question.
(a)
(c)
(h)
(b)
(c) * * * (1) * * *
(iii)
This rule is being published by the Office of the Federal Register to correct an editorial or technical error that appeared in the most recent annual revision of the Code of Federal Regulations.
Coast Guard, Department of Homeland Security (DHS).
Notification of enforcement of regulation.
The Coast Guard will enforce special local regulations for the Olympia Harbor Days Tug Boat Races, Budd Inlet, WA, from 11 a.m. until 4 p.m. on September 2, 2023. This action is necessary to prevent injury and to protect life and property of the maritime public from the hazards associated with the tug boat races. During the enforcement periods, the operator of any vessel in the regulated area must comply with directions from the Patrol Commander or any Official Patrol displaying a Coast Guard ensign.
The regulations in 33 CFR 100.1309 will be enforced from 11 a.m. until 4 p.m. on September 2, 2023.
If you have questions about this notification of enforcement, call or email Lieutenant Peter McAndrew, Sector Puget Sound Waterways Management Division, U.S. Coast Guard; telephone 206-217-6045, email
The Coast Guard will enforce special local regulations in 33 CFR 100.1309 for the Olympia Harbor Days Tug Boat Races, Budd Inlet, WA, regulated area from 11 a.m. until 4 p.m. on September 2, 2023. This action is being taken to provide for the safety of life on navigable waterways during this event. District Thirteen regulation 33 CFR 100.1309(a) specifies the location of the regulated area which encompasses approximately 2 nautical miles of the navigable waters in Budd Inlet. During the enforcement periods, if you are the operator of a vessel in the regulated area you must comply with directions from the Patrol Commander or any Official Patrol displaying a Coast Guard ensign. All persons or vessels who desire to enter the race area while it is enforced must obtain permission from the on-scene patrol craft on VHF-FM channel 16.
In addition to this notification of enforcement in the
Coast Guard, Department of Homeland Security (DHS).
Temporary interim rule and request for comments.
The Coast Guard is temporarily modifying the operating schedule that governs the Bayville Highway Bridge across the Mill Neck Creek, mile 0.1, at Bayville, NY. This action is necessary to allow the bridge owner to complete the remaining replacements and repairs.
This temporary interim rule is effective from August 25, 2023, through January 31, 2024.
Comments and related material must reach the Coast Guard on or before September 25, 2023.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Stephanie E. Lopez, Bridge Management Specialist, First Coast Guard District; telephone (212) 514-4335, email
The Coast Guard is issuing this temporary interim rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable. This bridge is operating under single leaf openings and will continue to operate in this way until rehabilitation work can be completed in January 2024.
On May 10, 2022, the Coast Guard issued a General Deviation which allowed the bridge owner, Nassau County, to deviate from the current operating schedule in 33 CFR 117.800 to conduct major mechanical rehabilitation of the bridge. Due to delays in procuring materials, the project has run past the end date of April 12, 2023, of the General Deviation. The bridge cannot be brought back to operating condition until the completion of the mechanical rehabilitation. Therefore, there is insufficient time to provide a reasonable comment period and then consider those comments before issuing the modification.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making it effective in less than 30 days after publication in the
We are soliciting comments on this rulemaking. If the Coast Guard determines that changes to the temporary interim rule are necessary, we will publish a temporary final rule or other appropriate document.
The Coast Guard is issuing this temporary interim rule under authority in 33 U.S.C. 499. The Coast Guard is modifying the operating schedule that governs the Bayville Highway Bridge across the Mill Neck Creek, mile 0.1, Bayville, New York. The Bayville highway bridge has a vertical clearance, in the closed position, of 9 feet at mean high water and unlimited vertical clearance when opened.
The existing drawbridge regulation, 33 CFR 117.800, states that the draw of the Bayville highway bridge, mile 0.1, shall open on signal from May 1 through October 31 and at all other times at least two-hour advance notice. Nassau County, the bridge owner, has requested to operate under single leaf openings so they may continue rehabilitation on the bridge while providing minimal impact on marine traffic.
The Coast Guard is issuing this rule, which permits a temporary deviation from the operating schedule that governs the Bayville Highway Bridge across the Mill Neck Creek, mile 0.1, Bayville, New York. The rule is necessary to accommodate the completion of the bridge mechanical repairs. This rule allows the bridge to operate under single leaf openings until January 31, 2024. Vessels that can transit under the bridge without an opening may do so.
We developed this temporary interim rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This temporary interim rule has not been designated a “significant regulatory action,” under Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, the temporary interim rule has not been reviewed by the Office of Management and Budget (OMB).
This regulatory action determination is based on the ability that vessels can still transit the bridge through a single leaf operation as well as all vessels that do not require an opening may transit.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule would not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the bridge may be small entities, for the reasons stated in section V.A. above, this rule would not have a significant economic impact on any vessel owner or operator.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment explaining why you think it qualifies and how and to what degree this rule would economically affect it.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This rule calls for no new collection of information under the Paperwork
A rule has implications for federalism under Executive Order 13132 (Federalism), if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01, Rev.1, associated implementing instructions, and Environmental Planning Policy COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f). The Coast Guard has determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule promulgates the operating regulations or procedures for drawbridges. Normally such actions are categorically excluded from further review, under paragraph L49, of Chapter 3, Table 3-1 of the U.S. Coast Guard Environmental Planning Implementation Procedures.
Neither a Record of Environmental Consideration nor a Memorandum for the Record are required for this rule.
We view public participation as essential to effective rulemaking and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.
We encourage you to submit comments through the Federal Decision-Making Portal at
To view documents mentioned in this rule as being available in the docket, find the docket as described in the previous paragraph, and then select “Supporting & Related Material” in the Document Type column. Public comments will also be placed in our online docket and can be viewed by following instructions on the
We accept anonymous comments. Comments we post to
Bridges.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows:
33 U.S.C. 499; 33 CFR 1.05-1; and DHS Delegation No. 00170.1, Revision No. 01.3.
The draw shall operate on single leaf operations from August 25, 2023, to 11:59 p.m. on January 31, 2024.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for all navigable waters within a 560-foot radius of a fireworks launch barge at Mile Marker (MM) 8 on Lake of the Ozarks. The safety zone is needed to protect personnel, vessels, and the marine environment from potential hazards created by the fireworks display. Entry of vessels or persons into the zone is prohibited unless specifically authorized by the Captain of the Port Sector Upper Mississippi River or a designated representative.
This rule is effective from 9 p.m. on August 25, 2023, through 9:30 p.m. on August 26, 2023. This rule will be enforced from 9 p.m. to 9:30 p.m. on August 25, 2023, or, if necessary due to inclement weather, on August 25, from 9 p.m. to 9:30 p.m. on August 26, 2023.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email MSTC Nathaniel Dibley, Sector Upper Mississippi River Waterways Management Division, U.S. Coast Guard; telephone 314-269-2550, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because we must establish this safety zone by August 25, 2023, and lack sufficient time to provide a reasonable comment period and then consider those comments before issuing the rule.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port Sector Upper Mississippi River (COTP) has determined that potential hazards associated with the Super Cat Fireworks Display, on August 25, 2023, will be a safety concern for anyone within the fallout zone. This rule is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone during the fireworks display.
This rule establishes a safety zone from 9 p.m. until 9:30 p.m. on August 25, 2023. The safety zone will cover all navigable waters within a 560-foot radius of a fireworks launch barge located at mile marker 8 on the Lake of the Ozarks. The duration of the zone is intended to protect personnel, vessels, and the marine environment in these navigable waters during the fireworks display. No vessel or person will be permitted to transit the safety zone without obtaining permission from the COTP or a designated representative. The COTP or a designated representative will inform the public of the effective period for the safety zone as well as any changes in the dates and times of enforcement, as well as reductions in the size of the safety zone through Local Notice to Mariners (LNMs), Broadcast Notices to Mariners (BNMs), and/or Safety Marine Information Broadcast (SMIB), as appropriate.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB).
This regulatory action determination is based on the size, duration and location of the safety zone. The safety zone is for a fireworks display that impacts a 560 ft radius of a fireworks barge located at Lake of the Ozarks MM 8 on August 25, 2023 from 9 p.m. to 9:30 p.m. Moreover, the Coast Guard will issue a Broadcast Notice to Mariners via VHF-FM marine channel 16 about the safety zone, mariners may seek permission to enter the zone.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator because the zone will be enforced only when work is being conducted.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a safety zone encompassing lasting from 9 p.m. to 9:30 p.m. that will prohibit entry around a 560 ft radius of a fireworks barge at Lake of the Ozarks MM 8. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the
Harbors, Marine Safety, Navigation (water), Reporting and recordkeeping requirements, Security Measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051, 70124; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.3.
(a)
(b)
(2) To seek permission to enter, contact the COTP or a designated representative via VHF-FM channel 16, or through USCG Sector Upper Mississippi River at 314-269-2332. Persons and vessels permitted to enter the safety zone must comply with all lawful orders or directions issued by the COTP or designated representative.
(c)
(d)
Coast Guard, Department of Homeland Security (DHS).
Temporary final rule.
The Coast Guard will be establishing a temporary safety zone for certain waters of Lake Erie. This action is necessary to provide for the safety of life on waters of the Black River, a tributary of Lake Erie, during the Cleveland Dragon Boat Festival. This rulemaking would prohibit persons and vessels from being in the safety zone unless authorized by the Captain of the Port Buffalo or a designated representative.
This rule is effective from 7:45 a.m. through 5:15 p.m. on September 10, 2023.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Lieutenant Jared Stevens, Waterways Management Division, MSU Cleveland, U.S. Coast Guard; telephone 216-937-0124, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because delaying the effective date of this rule to wait for a comment period to run would be contrary to the public interest by inhibiting the Coast Guard's ability to protect participants in these navigable waters before, during, and after the boat festival.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port (COTP) has determined that a safety zone is needed to protect the participants during the Cleveland Dragon Boat Festival occurring on the Black River in Lorain, Ohio, on September 10, 2023.
This rule establishes a safety zone from 7:45 a.m. until 5:15 p.m. on September 10, 2023. The safety zone will cover all navigable waters of the Black River, a tributary of Lake Erie in Lorain, Ohio, south of East Erie Avenue Bridge and adjacent to the Black River Landing. The duration of the zone is intended to ensure the safety of participants in these navigable waters before, during, and after the Cleveland Dragon Boat Festival. Dates and times of enforcement will be made public via broadcast notice to mariners prior to the event. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB).
This regulatory action determination is based on size, location, and duration of the rule. This safety zone will restrict navigation through the boat festival area.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishment of a safety zone that will prohibit entry in, out or through navigable waters south of the East Erie Avenue Bridge and adjacent to the Black River Landing, located on the Black River in Lorain, OH. It is categorically excluded from further review under paragraph L63(b) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051, 70124; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.3.
(a)
(b)
(c)
(d)
(2) All persons and vessels not registered with the sponsor as participants or official patrol vessels are considered spectators.
(3) Spectator vessels desiring to transit the regulated area may do so only with prior approval of the Patrol Commander and when so directed by that officer and will be operated at a no wake speed in a manner which will not endanger participants in the event or any other craft.
(4) No spectator shall anchor, block, loiter, or impede the through transit of official patrol vessels in the regulated area during the enforcement period listed in paragraph (b) of this section unless cleared for entry by or through an official patrol vessel.
(5) The Patrol Commander may forbid and control the movement of all vessels in the regulated area. When hailed or signaled by an official patrol vessel, a vessel shall come to an immediate stop and comply with the directions given. Failure to do so may result in expulsion from the area, citation for failure to comply, or both.
(6) Any spectator vessel may anchor outside the regulated areas specified in this section, but may not anchor in, block, or loiter in a navigable channel.
(7) The Patrol Commander may terminate the event or the operation of any vessel at any time it is deemed necessary for the protection of life or property.
(8) The Patrol Commander will terminate enforcement of the special regulations in this section at the conclusion of the event.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for the Ohio River from September 12 through September 15, 2023, at mile marker 79.5 to mile marker 80 from 8 a.m. through 5 p.m. each day. This action is necessary to provide for the safety of life on the navigable waters during a helicopter operation. This rule prohibits persons and vessels from being in the safety zone unless authorized by the Captain of the Port Pittsburgh (COTP) or a designated representative.
This rule is effective from 8 a.m. on September 12, 2023 through 5 p.m. on September 15, 2023. This rule will be enforced from 8 a.m. through 5 p.m. each day it is effective.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email LTJG Eyobe Mills, Marine Safety Unit Pittsburgh, U.S. Coast Guard, at telephone 412-221-0807, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable and contrary to the public interest. This safety zone must be established by September 12, 2023, to provide for the safety of life on the navigable waters during a helicopter operation, and we lack sufficient time to provide a reasonable comment period and then consider those comments before issuing this rule. The NPRM process would delay the establishment of the safety zone until after the date of the helicopter operation. Vessels inside of the safety zone have the potential of getting hit by debris from the helicopter.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port Pittsburgh (COTP) has determined that potential hazards associated with a helicopter operation on September 12 through September 15, 2023, will be a safety concern for anyone on the Ohio River from mile markers 79.5 to mile marker 80 from 8 a.m. to 5 p.m. The purpose of this rule is to ensure safety of the participant, vessels, and the navigable waters in the safety zone before, during, and after the scheduled event.
This rule establishes a temporary safety zone each day from 8 a.m. until 5 p.m. on September 12 through September 15, 2023. The safety zone will cover all navigable waters on the Ohio River from mile markers 79.5 to mile marker 80. The duration of the zone is intended to protect personnel, vessels, and the marine environment in the navigable waters during an installation of nine aerial transverse wirelines using a helicopter.
No vessel or person is permitted to enter the safety zone without obtaining permission from the COTP or a designated representative of the COTP. A designated representative is a commissioned, warrant, or petty officer of the U.S. Coast Guard (USCG) assigned to units under the operational control of the COTP. To seek permission to enter, contact the COTP or a designated representative via VHF-FM channel 16, or through Marine Safety Unit Pittsburgh at 412-221-0807. Persons and vessels permitted to enter the safety zone must comply with all lawful orders or directions issued by the COTP or designated representative. The COTP or a designated representative will inform the public of the effective period for the safety zone as well as any changes in the dates and times of enforcement through Local Notice to Mariners (LNMs), Broadcast Notices to Mariners (BNMs), and/or Marine Safety Information Bulletins (MSIBs), as appropriate.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB).
This regulatory action determination is based on size, location, and duration of the temporary safety zone. This safety zone only impacts a 0.5 mile stretch on the Ohio River for 9 hours each day from September 12 through September 15, 2023. Moreover, the Coast Guard will issue Local Notice to Mariners and Broadcast Notice to Mariners via VHF-FM marine channel 16 about the zone and the rule allows vessels to seek permission from the COTP to transit the zone.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a temporary safety zone lasting 9 hours each day from September 12 through September 15, 2023, on the Ohio River. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the
Marine Safety, Navigation (water), Reporting, and recordkeeping requirements, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051, 70124; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.3.
(a)
(b)
(c)
(2) To seek permission to enter, contact the COTP or the COTP's representative on Channel 16 or at 412-670-4288. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.
(d)
Coast Guard, Department of Homeland Security (DHS).
Temporary final rule.
The Coast Guard is establishing a temporary safety zone for a fireworks display occurring on September 12, 2023, on the Ohio River, Ashland, KY. The safety zone will cover all navigable waters between mile marker 322.5 and 323 to protect personnel, vessels, and the marine environment from potential hazards associated with a fireworks event. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port Sector Ohio Valley (COTP) or a designated representative.
This rule is effective from 7:30 p.m. through 8:15 p.m. on September 12, 2023.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, call or email Petty Officer Chelsea Zimmerman, Marine Safety Unit Huntington, U.S. Coast Guard, telephone 304-733-0198, email
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034. The Captain of the Port Sector Ohio Valley (COTP) has determined that safety needs associated with a fireworks display on September 12, 2023, present a safety concern. The purpose of this rulemaking is to ensure the safety of the public surrounding the regulated area before, during, and after the fireworks event.
This rule establishes a safety zone that will be enforced from 7:30 p.m. until 8:15 p.m. on September 12, 2023. The safety zone will cover all navigable waters between mile markers 322.5 to 323 on the Ohio River. The duration of the zone is intended to protect personnel, vessels, and the marine environment in these navigable waters during the fireworks display. No vessel or person will be permitted to enter the safety zone without obtaining permission from the COTP or a designated representative. A designated representative means a Coast Guard Patrol Commander, including a Coast Guard coxswain, petty officer, or other officer operating a Coast Guard vessel and a Federal, State, and local officer designated by or assisting the COTP in the enforcement of the safety zone.
Persons or vessels seeking to enter the safety zone must request permission from the COTP on VHF-FM channel 16 or by telephone at 1-502-779-5424. If permission is granted, all persons and vessels shall comply with the instructions of the COTP or designated representative.
The COTP or a designated representative will inform the public of the enforcement times and date for this safety zone through Broadcast Notices to Mariners, Local Notices to Mariners, and/or Safety Marine Information Broadcasts as appropriate.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under section 3(f) of Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB).
This regulatory action determination is based on the size, location, duration, and time-of-day of the regulated area. This rule is limited to the Ohio River from mile 322.5 to 323 on September 12, 2023, and will be enforced only for a forty-five-minute duration. Moreover, the Coast Guard will issue Broadcast Notice to Mariners via VHF-FM marine channel 16 about the regulated area and the rule allows vessels to seek permission to enter the area.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the safety zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes,
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves establishing a temporary safety zone lasting only forty-five minutes on the Ohio River at mile 322.5 to 323 on September 12, 2023. It is categorically excluded from further review under paragraph L60(a) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to call or email the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C. 70034, 70051, 70124; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.3.
(a)
(b)
(c)
(2) To seek permission to enter, the COTP or the COTP's representative may be contacted on Channel 16 VHF-FM (156.8 MHz) by the call sign “PATCOM”, or phone at 1-606-923-4884. Those in the safety zone must comply with all lawful orders or directions given to them by the COTP or the COTP's designated representative.
(3) The Patrol Commander may forbid and control the movement of all vessels in the regulated area. When hailed or signaled by an official patrol vessel, a vessel shall come to an immediate stop and comply with the directions given. Failure to do so may result in expulsion from the area, citation for failure to comply, or both.
(4) The Patrol Commander may terminate the event or the operation of any vessel at any time it is deemed necessary for the protection of life or property.
(5) The COTP will provide notice of the regulated area through advanced notice via local notice to mariners and broadcast notice to mariners and by on-scene designated representatives.
(d)
Coast Guard, DHS.
Notification of enforcement of regulations; correction.
This document corrects dates in a notification of enforcement published June 27, 2023. The Coast Guard will enforce a safety zone that encompasses certain navigable waters of the Cleveland Inner Harbor East Basin on Lake Erie, for the 2023 Cleveland National Airshow in Cleveland, Ohio. This action is necessary and intended for the safety of life and property on the navigable waters during this event. During the enforcement periods, no person or vessel may enter the respective safety zone without the permission of the Captain of the Port Buffalo or a designated representative.
The regulations listed in 33 CFR 165.939, Table 165.939(d)(2) will be enforced from 8 a.m. through 6 p.m. on Wednesday August 30, 2023, through Monday September 4, 2023.
If you have questions about this notice of enforcement, call or email LT Jared Stevens, Waterways Management Division, U.S. Coast Guard Marine Safety Unit Cleveland; telephone 216-937-0124, email
The Coast Guard will enforce “Safety Zones; Annual Events in the Captain of the Port Buffalo Zone”, as listed in 33 CFR 165.939, Table 165.939(d)(2). This safety zone will be enforced for all U.S. waters of Lake Erie near Burke Lakefront Airport in Cleveland, Ohio from position 41°30′20″ N and 081°42′20″ W to 41°30′50″ N and 081°42′49″ W, to 41°32′09″ N and 081°39′49″ W, to 41°31′53″ N and 081°39′24″ W, then return to the original position (NAD 83).
Pursuant to 33 CFR 165.23, entry into, transiting, or anchoring within the safety zone during an enforcement
This notice of enforcement is issued under authority of 33 CFR 165.939 and 5 U.S.C. 552(a). In addition to this notice of enforcement in the
In rule document 2023-17592, beginning on page 56527 in the of Friday, August 18, 2023, make the following correction:
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for all Pratt & Whitney (PW) Model PW2037, PW2037M, and PW2040 engines with a certain high-pressure turbine (HPT) 2nd stage blade assembly installed. This proposed AD was prompted by an in-flight shutdown (IFSD) caused by the fracture of HPT 2nd stage turbine hub assembly lugs, which resulted in blade liberation and a titanium fire in the high-pressure compressor (HPC). This proposed AD would require a visual inspection of the HPT 2nd stage blade assemblies for missing contact marks, a dimensional shadowgraph inspection of the HPT 2nd stage blade assemblies for blade root profile dimensional inspection, and an eddy current inspection (ECI) of the HPT 2nd stage turbine hub assembly for conforming slot flatness. This proposed AD would also require removal and replacement of any HPT 2nd stage turbine hub assembly or HPT 2nd stage blade assembly that does not pass any inspection. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by September 25, 2023.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
• For service information identified in this NPRM, contact Pratt & Whitney, 400 Main Street, East Hartford, CT 06118; phone: (800) 565-0140; email:
• You may view this service information at the FAA, Airworthiness Products Section, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call (817) 222-5110.
Carol Nguyen, Aviation Safety Engineer, FAA, 2200 South 216th Street, Des Moines, WA 98198; phone: (781) 238-7655; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
The FAA has been informed that PW has done some outreach with affected operators regarding the proposed corrective actions for this unsafe condition. As a result, affected operators are already aware of the proposed corrective actions and, in some cases, have already begun planning for replacement of certain HPT 2nd stage turbine hub assemblies and HPT 2nd stage blade assemblies. Therefore, the FAA has determined that a 30-day comment period is appropriate given the particular circumstances related to the proposed correction of this unsafe condition.
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Carol Nguyen, Aviation Safety Engineer, FAA, 2200 South 216th Street, Des Moines, WA 98198. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.
The FAA received a report of an IFSD of a Model PW2037 engine installed on a Boeing Model 757 airplane that occurred on September 8, 2020. Subsequent investigation by the manufacturer found that two turbine hub assembly lug fractures on the HPT 2nd stage turbine hub assembly caused
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
The FAA reviewed PW Turbojet Engine Service Bulletin PW2000 A72-777, Revision 2, dated April 11, 2023 (PW2000 A72-777 Rev. 2). This service information specifies procedures for performing a visual inspection of the HPT 2nd stage blade assemblies, dimensional shadowgraph inspection of the HPT 2nd stage blade assemblies, and an ECI of the HPT 2nd stage turbine hub assembly. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in
This proposed AD would require accomplishing the actions identified as “RC” (required for compliance) in the Accomplishment Instructions of PW2000 A72-777 Rev. 2, except for any differences identified as exceptions in the regulatory text of this proposed AD.
The FAA estimates that this AD, if adopted as proposed, would affect 425 engines installed on airplanes of U.S. registry.
The FAA estimates the following costs to comply with this proposed AD:
The FAA estimates the following costs to do any necessary replacements that would be required based on the results of the proposed inspections. The agency has no way of determining the number of aircraft that might need these replacements:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by September 25, 2023.
None.
This AD applies to Pratt & Whitney (PW) Model PW2037, PW2037M, and PW2040 engines with a high-pressure turbine (HPT) 2nd stage blade assembly, part number (P/N) 1B7522 installed.
Joint Aircraft System Component (JASC) Code 7250, Turbine Section.
This AD was prompted by an in-flight shutdown caused by the fracture of HPT 2nd stage turbine hub assembly lugs. The FAA is issuing this AD to prevent failure of the HPT 2nd stage turbine hub assembly lug and HPT 2nd stage blade assemblies. The unsafe condition, if not addressed, could result in the uncontained release of the HPT 2nd stage blade assemblies, damage to the engine, and damage to the airplane.
Comply with this AD within the compliance times specified, unless already done.
Before exceeding the applicable compliance times specified in Planning Information, Compliance, page 2, of PW Turbojet Engine Service Bulletin PW2000 A72-777, Revision 2, dated April 11, 2023 (PW2000 A72-777 Rev. 2), or before accumulating 500 cycles after the effective date of this AD, whichever occurs later, perform all applicable actions identified as “RC” (required for compliance) in, and in accordance with, the Accomplishment Instructions of PW2000 A72-777 Rev. 2.
You may take credit for the actions required by paragraph (g) of this AD if you performed these actions before the effective date of this AD in accordance with PW Turbojet Engine Service Bulletin PW2000 A72-777, Initial Issue, dated September 29, 2021, or PW Turbojet Engine Service Bulletin PW2000 A72-777, Revision 1, dated December 21, 2022.
(1) The Manager, AIR-520 Continued Operational Safety Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (j) of this AD and email to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) Except as required by paragraph (g) of this AD: For service information that contains steps that are labeled as Required for Compliance (RC), the following provisions apply.
(i) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD. An AMOC is required for any deviations to RC steps, including substeps and identified figures.
(ii) Steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.
For more information about this AD, contact Carol Nguyen, Aviation Safety Engineer, FAA, 2200 South 216th Street, Des Moines, WA 98198; phone: (781) 238-7655; email:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Pratt & Whitney Turbojet Engine Service Bulletin PW2000 A72-777, Revision 2, dated April 11, 2023.
(ii) [Reserved]
(3) For service information identified in this AD, contact Pratt & Whitney, 400 Main Street, East Hartford, CT 06118; phone: (800) 565-0140; email:
(4) You may view this service information at FAA, Airworthiness Products Section, Operational Safety Branch, 1200 District Avenue, Burlington, MA 01803. For information on the availability of this material at the FAA, call (817) 222-5110.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email:
Federal Aviation Administration (FAA), DOT.
Supplemental notice of proposed rulemaking (SNPRM).
The FAA is revising a notice of proposed rulemaking (NPRM) that would have applied to certain Airbus SAS Model A319-115 airplanes; Model A320-214, -216, -232, -251N, and -271N airplanes; and Model A321-211, -231, -251N, -251NX, -252NX, -253N, -253NX, -271N, -271NX, and -272N airplanes. This action revises the NPRM by adding Model A321-213 airplanes, which were inadvertently left out of the applicability. The FAA is proposing this airworthiness directive (AD) to address the unsafe condition on these products. Since these actions would impose an additional burden over those in the NPRM, the FAA is requesting comments on this SNPRM.
The FAA must receive comments on this SNPRM by October 10, 2023.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
•
•
•
•
• For European Union Aviation Safety Agency (EASA) material that is proposed for incorporation by reference (IBR) in this SNPRM, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
• You may view this service information at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
Timothy P. Dowling, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; phone: 206-231-3667; email
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this SNPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this SNPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this SNPRM. Submissions containing CBI should be sent to Timothy P. Dowling, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; phone: 206-231-3667; email
The FAA issued AD 2020-05-16, Amendment 39-19866 (85 FR 15938, March 20, 2020) (AD 2020-05-16) for certain Airbus SAS Model A319-115 airplanes; Model A320-214, -216, -232, -251N, and -271N airplanes; and Model A321-211, -231, -251N, -251NX, -253N, -271N, -271NX, and -272N airplanes. AD 2020-05-16 requires a one-time detailed inspection of certain attaching points on the left-hand and right-hand wings for the correct installation of certain hardware, and, depending on findings, accomplishment of applicable corrective actions. The FAA issued AD 2020-05-16 to address incomplete installations of the over wing panel lug attachments in the production assembly line, which, if not detected and corrected, could reduce the structural integrity of the wing.
The FAA issued an NPRM to amend 14 CFR part 39 by adding an AD to supersede AD 2020-05-16 that would apply to certain Airbus SAS Model A319-115 airplanes; Model A320-214, -216, -232, -251N, and -271N airplanes; and Model A321-211, -231, -251N, -251NX, -252NX, -253N, -253NX, -271N, -271NX, and -272N airplanes. The NPRM published in the
Since the FAA issued the NPRM, it was determined that although the serial numbers of the affected airplanes appear in Appendix 1 of EASA AD 2022-0111, Model A321-213 airplanes were inadvertently left out of the applicability of EASA AD 2022-0111. EASA has since revised AD 2022-0111. EASA AD 2022-0111R1, dated July 26, 2023 (EASA AD 2022-0111R1), was issued because some reports highlighted the omission in the Applicability of Model A321-213 airplanes, whereas the MSNs relevant to this model were correctly listed in Appendix 1 of EASA AD 2022-0111 (among Group 1 aeroplanes). Consequently, EASA AD 2022-0111R1 includes Model A321-213 airplanes in the Applicability. Paragraph (c) of this proposed AD was therefore revised to include Model A321-213 airplanes to match the applicability of EASA AD 2022-0111R1.
You may examine the MCAI in the AD docket at
The FAA received a comment from Air Line Pilots Association, International (ALPA) who supported the NPRM without change.
The FAA received additional comments from Delta Air Lines (DAL). The following presents the comments received on the NPRM and the FAA's response to each comment.
DAL requested that an exception be added to the proposed AD to change the structural repair manual (SRM) reference specified in paragraphs C.(2)(b)3.a and C.(4)(b)3.a of the Accomplishment Instructions of Airbus Service Bulletin A320-57-1234, dated December 13, 2021, from SRM 51-11-13 to SRM 51-11-00. DAL stated that SRM task 51-11-13 details the process for damage reporting, while SRM task 51-11-00 details the process for classifying damage, which is the required task.
The FAA does not agree with the requested change because SRM 51-11-13 references SRM 51-11-00, which includes the damage assessment procedure. This proposed AD has not been changed regarding this request.
DAL requested that an exception be added to allow compliance to be taken for any Group 2 airplanes that have already been inspected using Airbus Alert Operators Transmission (AOT) A57N012-19 Rev 01, dated April 18, 2019. DAL stated that the inspection specified in Airbus AOT A57N012-19 Rev 01, dated April 18, 2019, is identical to the inspection specified in Airbus Service Bulletin (SB) A320-57-1234, dated December 13, 2021.
The FAA does not agree with this request. If the inspection procedure provided in Airbus AOT A57N012-19 Rev 01, dated April 18, 2019, is the same as the required procedures in the Airbus SB A320-57-1234, dated December 13, 2021, then accomplishing its procedure would be the same as accomplishing procedures of the SB, therefore it meets the mandatory action requirements of the AD. This proposed AD has not been changed regarding this request.
DAL requested that the proposed AD include a compliance time grace period of 6 months for the required actions specified in paragraph (2) of EASA AD 2022-0111 because several airplanes will be immediately out of compliance on the effective date of the AD. DAL noted that EASA AD 2022-0111 does not include any grace period for Group 2 airplanes and that operators will require a grace period to update their documentation and process to show compliance with the FAA AD.
The FAA agrees with changing the requested grace period to prevent grounding of airplanes that have exceeded the maximum flight hours or flight cycles. Paragraph (h)(5) of the proposed AD (in the NPRM) included a 30-day grace period. However, a 6-month grace period would be necessary to prevent the grounding of the airplanes that have already exceeded 14,000 flight hours or 7,000 flight cycles, whichever occurs first. Paragraph (h)(5) of this proposed AD has been changed to specify a 6-month grace period. (Paragraph (2) of EASA AD 2022-0111R1 does not include a grace period.)
DAL requested that Airbus SAS Model A321-213 airplanes be added to the applicability of the proposed AD because some of the serial numbers listed in the appendix of the MCAI are Airbus SAS Model A321-213 airplanes, although that model does not appear in the Applicability section of the MCAI.
The FAA agrees to add Airbus SAS Model A321-213 airplanes to the applicability of this proposed AD. As stated previously, EASA AD 2022-0111R1 was issued to correct the Applicability to include Model A321-213 airplanes. Therefore, Airbus SAS Model A321-213 airplanes have been added to paragraph (c) of this proposed AD.
EASA AD 2022-0111R1 specifies procedures for a one-time detailed inspection of certain attaching points on the left-hand and right-hand wings for the correct installation of certain hardware (bolt, nut, washer, and cotter pin), and, depending on findings, accomplishment of applicable corrective actions. Corrective actions include installing missing hardware, properly orienting hardware, and performing a damage assessment for cracks and deformed parts in the event of missing hardware, and repair. For certain airplanes, EASA AD 2022-0111R1 also specifies reporting the inspection results to Airbus. This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This product has been approved by the aviation authority of another country and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA is issuing this SNPRM after determining that the unsafe condition described previously is likely to exist or develop in other products of the same type design.
Certain changes described above expand the scope of the NPRM. As a result, it is necessary to reopen the comment period to provide additional opportunity for the public to comment on this SNPRM.
This proposed AD would retain all requirements of AD 2020-05-16. This proposed AD would require accomplishing the actions specified in EASA AD 2022-0111R1 described previously, except for any differences identified as exceptions in the regulatory text of this proposed AD.
In the FAA's ongoing efforts to improve the efficiency of the AD process, the FAA developed a process to use some civil aviation authority (CAA) ADs as the primary source of information for compliance with requirements for corresponding FAA ADs. The FAA has been coordinating this process with manufacturers and CAAs. As a result, the FAA proposes to incorporate EASA AD 2022-0111R1 by reference in the FAA final rule. This proposed AD would, therefore, require compliance with EASA AD 2022-0111R1 in its entirety through that incorporation, except for any differences identified as exceptions in the regulatory text of this proposed AD. Using common terms that are the same as the heading of a particular section in EASA AD 2022-0111R1 does not mean that operators need comply only with that section. For example, where the AD requirement refers to “all required actions and compliance times,” compliance with this AD requirement is not limited to the section titled “Required Action(s) and Compliance Time(s)” in EASA AD 2022-0111R1. Service information required by EASA AD 2022-0111R1 for compliance will be available at
The FAA estimates that this AD, if adopted as proposed, would affect 131 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
The FAA estimates that it would take about 1 work-hour per product to comply with the reporting requirement in this proposed AD. The average labor rate is $85 per hour. Based on these figures, the FAA estimates the cost of reporting the inspection results on U.S. operators to be up to $11,135, or $85 per product.
The FAA estimates the following costs to do any necessary on-condition actions that would be required based on the results of any required actions. The FAA has no way of determining the number of aircraft that might need these on-condition actions:
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to take approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by October 10, 2023.
This AD replaces AD 2020-05-16, Amendment 39-19866 (85 FR 15938, March 20, 2020) (AD 2020-05-16).
This AD applies to the Airbus SAS airplanes specified in paragraphs (c)(1) through (3) of this AD, certificated in any category, as identified in European Union Aviation Safety Agency (EASA) AD 2022-0111R1, dated July 26, 2023 (EASA AD 2022-0111R1).
(1) Model A319-115 airplanes.
(2) Model A320-214, -216, -232, -251N, and -271N airplanes.
(3) Model A321-211, -213, -231, -251N, -251NX, -252NX, -253N, -253NX, -271N, -271NX, and -272N airplanes.
Air Transport Association (ATA) of America Code 57, Wings.
This AD was prompted by reports of incomplete installations of the over wing panel lug attachments in the production
Comply with this AD within the compliance times specified, unless already done.
Except as specified in paragraph (h) of this AD: Comply with all required actions and compliance times specified in, and in accordance with, EASA AD 2022-0111R1.
(1) Where EASA AD 2022-0111R1 refers to its effective date, this AD requires using the effective date of this AD.
(2) Where EASA AD 2022-0111R1 refers to October 2, 2019 (the effective date of EASA AD 2019-0233, dated September 18, 2019), this AD requires using April 24, 2022 (the effective date of AD 2020-05-16).
(3) Where paragraph (5) of EASA AD 2022-0111R1 specifies to “or contact Airbus for approved instructions, and within the compliance time identified therein, accomplish those instructions accordingly” this AD requires replacing those words with “or contact Airbus for approved instructions, and within the compliance time identified therein, accomplish those instructions accordingly, except if any cracking is detected, the cracking must be repaired before further flight using a method approved by the Manager, International Validation Branch, FAA; or EASA; or Airbus SAS's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.”
(4) This AD does not adopt the “Remarks” section of EASA AD 2022-0111R1.
(5) Where paragraph (2) of EASA AD specifies a compliance time of “before exceeding 14,000 flight hours or 7,000 flight cycles, whichever occurs first since aeroplane first flight,” this AD requires replacing those words with “before exceeding 14,000 flight hours or 7,000 flight cycles, whichever occurs first since airplane first flight; or within 6 months after the effective date of this AD; whichever occurs later.”
For Group 1 airplanes, as identified in EASA AD 2022-0111R1, this AD does not require reporting.
The following provisions also apply to this AD:
(1)
(i) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(ii) AMOCs approved previously for AD 2020-05-16 are approved as AMOCs for the corresponding provisions of EASA AD 2022-0111R1 that are required by paragraph (g) of this AD.
(2)
(3)
For more information about this AD, contact Timothy P. Dowling, Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; phone: 206-231-3667; email
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless this AD specifies otherwise.
(i) European Union Aviation Safety Agency (EASA) AD 2022-0111R1, dated July 26, 2023.
(ii) [Reserved]
(3) For EASA AD 2022-0111R1, contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone +49 221 8999 000; email
(4) You may view this service information at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email
Federal Aviation Administration (FAA), DOT.
Notice of proposed rulemaking (NPRM).
The FAA proposes to adopt a new airworthiness directive (AD) for certain The Boeing Company Model 747-8 and 747-8F series airplanes. This proposed AD was prompted by a report that all six Integrated Display Units (IDUs) became blank when new flight plan data was entered in the Flight Management System (FMS), and by a determination that indication of decaying airspeed in certain scenarios is required. This proposed AD would require installing updated software. The FAA is proposing this AD to address the unsafe condition on these products.
The FAA must receive comments on this proposed AD by October 10, 2023.
You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:
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• For service information identified in this NPRM, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; website:
• You may view this service information at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th Street, Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195. It is also available at
Douglas Tsuji, Aviation Safety Engineer, FAA, 2200 South 216th Street, Des Moines, WA 98198; telephone: 206-231-3548; email:
The FAA invites you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under
Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to
CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this NPRM. Submissions containing CBI should be sent to Douglas Tsuji, Aviation Safety Engineer, FAA, 2200 South 216th Street, Des Moines, WA 98198; telephone: 206-231-3548; email:
The FAA has received a report indicating all six IDUs became blank when new flight plan data was entered in the FMS. It was determined that the Jeppesen airport map database (AMDB) had an error in the data structure tied to the Sydney airport (YSSY). The Electronic Flight Instrumentation System (EFIS)/Engine Indicating and Crew Alerting System (EICAS) Interface Units (EIUs) were unable to process the data structure, resulting in the displays blanking. Jeppesen subsequently fixed the AMDB to address the issue with YSSY and additional airport codes with an incorrect data structure. The current EIU software is unable to process incorrect data structures, which results in an EIU fault that cannot be cleared by the automated reset function of an EIU. After five resets the EIU defaults to shut down, resulting in all six IDUs, which are controlled by the EIUs, becoming blank. The EIU shut down can also result in an autothrottle disconnect and a degraded autopilot mode. The problem can occur on the ground when an airport code with an incorrect data structure in the AMDB is entered as an origin or destination and the flight plan is then put into operation by the FMS. In flight, the problem can occur when an airport code with an incorrect data structure in the AMDB is entered as the selected diversion airport.
Additionally, the existing software does not provide an earlier indication of decaying airspeed during the landing phase for flap settings 25 and 30. The revised software specified in this proposed AD provides an earlier threshold for triggering the low airspeed alerting EICAS Caution message.
This condition, if not addressed, could result in loss of all flight deck displays (Primary Flight Display (PFD)/EICAS/Navigation Display (ND), not including standby displays) combined with potential impact to the autopilot and auto-throttle functionality and lack of crew visibility of any subsequent system failures, which can prevent continued safe flight and landing; it could also result in inadequate alerting of decaying airspeed, unacceptably low airspeed, and loss of control of the airplane.
The FAA is issuing this NPRM after determining that the unsafe condition described previously is likely to exist or develop on other products of the same type design.
The FAA reviewed Boeing Alert Requirements Bulletin 747-31A2544 RB, dated March 31, 2020. This service information specifies procedures for installing Integrated Display System (IDS) 804 software in each of the six LCD IDUs and in each of the three EIUs, if not already installed; followed by installing IDS 805 software, which includes EIU software part number COL3F-0034-E805 and Liquid Crystal Display (LCD) software part number 3177-COL-DL8-05.
This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in
This proposed AD would require accomplishing the actions specified in the service information already described except for any differences identified as exceptions in the regulatory text of this proposed AD. For information on the procedures and compliance times, see this service information at
The FAA estimates that this AD, if adopted as proposed, would affect 19 airplanes of U.S. registry. The FAA estimates the following costs to comply with this proposed AD:
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.
The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
The FAA determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would not have a substantial direct effect on the States, on the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this proposed regulation:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Would not affect intrastate aviation in Alaska, and
(3) Would not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA proposes to amend 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
The FAA must receive comments on this airworthiness directive (AD) by October 10, 2023.
None.
This AD applies to The Boeing Company Model 747-8 and 747-8F series airplanes, certificated in any category, as identified in Boeing Alert Requirements Bulletin 747-31A2544 RB, dated March 31, 2020.
Air Transport Association (ATA) of America Code: 31, Instruments.
This AD was prompted by a report that all six Integrated Display Units (IDUs) became blank when new flight plan data was entered in the Flight Management System (FMS), and by a determination that indication of decaying airspeed in certain scenarios is required. The FAA is issuing this AD to address problems with the Electronic Flight Instrumentation System (EFIS)/Engine Indicating and Crew Alerting System (EICAS) Interface Units (EIUs), which control the IDUs. The unsafe condition, if not addressed, could result in loss of all flight deck displays (Primary Flight Display (PFD)/EICAS/Navigation Display (ND), not including standby displays) combined with potential impact to the autopilot and auto-throttle functionality and lack of crew visibility of any subsequent system failures, which can prevent continued safe flight and landing; it could also result in inadequate alerting of decaying airspeed, unacceptably low airspeed, and loss of control of the airplane.
Comply with this AD within the compliance times specified, unless already done.
Except as specified by paragraph (h) of this AD: At the applicable times specified in the “Compliance” paragraph of Boeing Alert Requirements Bulletin 747-31A2544 RB, dated March 31, 2020, do all applicable actions identified in, and in accordance with, the Accomplishment Instructions of Boeing Alert Requirements Bulletin 747-31A2544 RB, dated March 31, 2020.
(1) Where the Compliance Time column of the table in the “Compliance” paragraph of Boeing Alert Requirements Bulletin 747-31A2544 RB, dated March 31, 2020, uses the phrase “the original issue date of Requirements Bulletin 747-31A2544 RB,” this AD requires using “the effective date of this AD.”
(2) For Group 2 airplanes identified in Boeing Alert Requirements Bulletin 747-31A2544 RB, dated March 31, 2020: The concurrent requirements specified in Action 1 of Table 1 of the Accomplishment Instructions of Boeing Alert Requirements Bulletin 747-31A2544 RB, dated March 31, 2020, do not apply.
(1) The Manager, AIR-520 Continued Operational Safety Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or responsible Flight Standards Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in paragraph (j) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the responsible Flight Standards Office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair, modification, or alteration required by this AD if it is approved by The Boeing Company Organization Designation Authorization (ODA) that has been authorized by the Manager, AIR-520 Continued Operational Safety Branch, FAA, to make those findings. To be approved, the repair method, modification deviation, or alteration deviation must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
For more information about this AD, contact Douglas Tsuji, Aviation Safety Engineer, FAA, 2200 South 216th Street, Des Moines, WA 98198; telephone: 206-231-3548; email:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Boeing Alert Requirements Bulletin 747-31A2544 RB, dated March 31, 2020.
(ii) [Reserved]
(3) For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Contractual & Data Services (C&DS), 2600 Westminster Boulevard, MC 110-SK57, Seal Beach, CA 90740-5600; telephone 562-797-1717; website:
(4) You may view this service information at the FAA, Airworthiness Products Section, Operational Safety Branch, 2200 South 216th Street, Des Moines, WA. For information on the availability of this material at the FAA, call 206-231-3195.
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA,
Office of National Marine Sanctuaries (ONMS), National Ocean Service, National Oceanic and Atmospheric Administration (NOAA), Department of Commerce.
Proposed rule; notification of availability of draft environmental impact statement and draft management plan; request for public comment.
NOAA proposes to designate Chumash Heritage National Marine Sanctuary (CHNMS) in the waters along and offshore of the coast of central California to recognize the national significance of the area's ecological, historical, archaeological, and cultural resources and to manage this special place as part of the National Marine Sanctuary System. The sanctuary boundary would encompass 5,617 square miles (mi
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NOAA may substitute a virtual meeting platform rather than a public meeting if public safety concerns remain to prevent the spread of COVID-19. NOAA may take audio recordings of the public meetings, including the public comment portion of the meetings. Please check
Paul Michel, Regional Policy Coordinator, 99 Pacific Street, Suite 100F, Monterey, CA 93940, 831-647-6450,
The National Marine Sanctuaries Act (NMSA; 16 U.S.C. 1431
NOAA proposes to designate CHNMS in the waters along and offshore of the coast of central California to recognize the national significance of the area's ecological, historical, archaeological, and cultural resources and to manage this special place as part of the National Marine Sanctuary System. The proposed sanctuary boundary would encompass 5,617 mi
The specific area proposed for national marine sanctuary designation includes the coastline of central California from Hazard Canyon Reef at the north end of Montaña de Oro State Park, south along the San Luis Obispo County coast and a portion of Santa Barbara County to approximately two miles south of Dos Pueblos Creek near the township of Naples along the Gaviota Coast. Roughly 134 miles of the mainland coast (163 miles if including the shoreline of offshore rocks and islands) are part of the area proposed for sanctuary designation. The sanctuary's proposed boundaries also include the offshore marine waters from the western end of Channel Islands National Marine Sanctuary (CINMS), northwards to within approximately 2.5 miles of the southern end of Morro Bay Wind Energy Area (WEA; as referenced in the Bureau of Ocean Energy Management (BOEM)'s Final Sale Notice for Pacific Wind Lease Sale 1, 87 FR 64093, October 21, 2022), and then east and southeast to the point of origin at Hazard Canyon Reef. This area out to approximately 66 miles (50 nmi) from shore includes numerous offshore features including the Santa Lucia Bank, portions of its escarpment, Rodriguez Seamount, Arguello Canyon, and other offshore features and resources. Coastal watersheds drain into this area via multiple outlets, including the Santa Maria and Santa Ynez river mouths and several other coastal streams and rivers. Strong coastal winds drive seasonal upwelling which fuels the area's high biological productivity, supporting dense aggregations of marine life. Specifically, winds offshore of Point Arguello/Point Conception initiate a powerful upwelling process that nourishes other nearby productive ecosystems such as CINMS. The presence of a biogeographic transition zone around Point Conception, where temperate waters from the north meet waters from the subtropics, creates an area of nationally-significant biodiversity in sea birds, marine mammals, invertebrates, and fishes.
For more than 10,000 years, the productive and diverse ecosystems in the region have been essential to the way of life of Indigenous peoples in the region, in particular the Chumash, one of the few ocean-going bands among the First Peoples of the Pacific Coast. The Salinan tribes have also relied on marine resources along the coast in this region Tribes' connections to the region include their traditional and ancestral homelands, customary uses of marine resources for food and cultural connections, and stewardship of resources and ecosystems within their ancestral homelands and waters. Coastal landscapes and seascapes, including viewsheds, are integral and sacred elements of Native American cultural connections to the region”). Additionally, during the last glacial maximum, the region's coastline extended beyond the present-day coast to include now-submerged areas that were likely inhabited by ancestors of California Tribes before the last sea level rise. As ocean-going Indigenous people on the California coast, the Chumash traveled to sea, to the Channel Islands, and along the coast in traditional redwood plank canoes called “tomols.” Coastal Chumash traditionally harvested an array of marine resources such as abalone and other shellfish,
The marine environment of the proposed sanctuary has provided and continues to provide a special sense of place to its changing coastal communities and visitors because of its historical, archaeological, cultural, aesthetic, and biological resources. The Indigenous peoples along this coast were the first people living in present-day California to have contact with Europeans when Spanish explorers arrived on the Pacific Coast in the mid-1500s. Subsequent waves of Spanish, Mexican, English, Russian, and American explorers and settlers traveled to this region over the next 300 years. The region was shaped by development of a mission system from San Diego to San Francisco, the California gold rush in the mid-1800s, ranching for cattle and the hide/tallow trade, military training and operations, a coastal and offshore oil boom, and, more recently, coastal and offshore renewable energy development. Maritime shipping has been prominent in this portion of California, with treacherous weather and currents leading to over 200 reported ship and aircraft wrecks; at least 20 prominent shipwrecks alone have been found in the area between Point Conception and Point Sal. Two shipwrecks that lie within the proposed sanctuary—the
Coastal tourism, recreational activities, and commercial fishing are prominent components of the coastal and marine economy in this region, particularly in San Luis Obispo County. Coastal and offshore energy and military activities are more prominent in the portion of this region along the Santa Barbara County coastline. More public access is available for the portion of the area proposed for the sanctuary in San Luis Obispo County than in Santa Barbara County, where access is more limited due to the large military base and private land holdings along this stretch of coast. Marine research is a small but growing sector of the ocean uses in this area.
The National Marine Sanctuaries Act (NMSA; 16 U.S.C. 1431
• “to identify and designate as national marine sanctuaries areas of the marine environment which are of special national significance and to manage these areas as the National Marine Sanctuary System” (16 U.S.C. 1431(b)(1));
• “to provide authority for comprehensive and coordinated conservation and management of these marine areas, and activities affecting them, in a manner which complements existing regulatory authorities” (16 U.S.C. 1431(b)(2));
• “to facilitate to the extent compatible with the primary objective of resource protection, all public and private uses of the resources of these marine areas not prohibited pursuant to other authorities” (16 U.S.C. 1431(b)(6));
• “to develop and implement coordinated plans for the protection and
• “to create models of, and incentives for, ways to conserve and manage these areas, including the application of innovative management techniques” (16 U.S.C. 1431(b)(8)).
The nationally-significant natural resources, physical features and habitats, and the cultural and historical resources within the proposed sanctuary warrant long-term protection and management to reduce threats that would adversely affect their historical, cultural, archaeological, recreational, and educational value. For example, many threatened or endangered species, such as blue whales, snowy plovers, black abalone, white sharks, and leatherback sea turtles, rely on habitats, physical features, or prey found in the proposed sanctuary rely on habitats, physical features, or prey found in the proposed sanctuary. This area also contains hundreds of known or suspected shipwrecks of historical importance, including several on the National Register of Historic Places. Moreover, this region and its abundant resources have been home to coastal, ocean-going Indigenous tribes for tens of thousands of years, and submerged village sites may exist along paleoshorelines in the submerged lands of the proposed sanctuary. Several key threats to these natural, cultural, and historical resources include: various levels of human development and activity from: offshore energy development; decommissioning and removal of coastal and offshore industrial facilities; sound, discharges and whale strikes from vessel traffic; plastics, marine debris and pollutants from coastal runoff; and most of all, acute and cumulative impacts of climate change.
Accordingly, NOAA is proposing to designate this area as a national marine sanctuary to: (1) manage and protect nationally-significant natural resources, physical features and habitats, and cultural and historical resources through a regulatory and nonregulatory framework; (2) document, characterize, monitor, study, and conserve these resources; (3) provide interpretation of their natural, cultural, historical, and educational value to the public; (4) promote public stewardship and responsible use of these resources for various purposes to the extent compatible with the sanctuary's principal goal of resource protection; (5) develop a coordinated, community-based, ecosystem-based management regime with partner Federal agencies, State and local governments, and Indigenous tribes and tribal organizations; and (6) develop and carry out an innovative collaborative management structure to involve Indigenous communities, including federally-recognized tribes and other tribal groups and organizations, in important management programs and initiatives of the sanctuary.
Designating a new national marine sanctuary along the coast of central California would allow NOAA to complement and supplement existing Federal and State resource management programs, policies, and regulations. For instance, proposed discharge regulations to establish more comprehensive water quality protection across the geographic range proposed for sanctuary protection under NMSA would bolster existing authorities under the Clean Water Act (CWA; 33 U.S.C. 1251
In July 2015, a broad community consortium led by the Northern Chumash Tribal Council submitted a nomination through the Sanctuary Nomination Process. The nomination identified opportunities for NOAA to expand upon existing local and State efforts to study, interpret, and manage the area's unique cultural and biological resources. The nomination also highlighted the maritime history and cultural heritage of the Chumash tribal nation, who, along with other Native American tribes, have deep cultural connections to this area of central California. NOAA completed its review of the nomination and, on October 5, 2015, added the area to the inventory of successful nominations eligible for designation. All nominations submitted to NOAA can be found at:
On November 10, 2021, NOAA began the sanctuary designation process for the proposed CHNMS by publishing a notice of intent (86 FR 62512) to prepare a draft EIS as well as other pertinent designation materials such as a draft management plan, terms of designation, and this proposed rule, as required by NMSA and the National Environmental Policy Act (NEPA; 42 U.S.C. 4321
Following the notice of intent, NOAA conducted three virtual public meetings, hearing oral comments from 100 participants, and received thousands of written comments during an 83-day public comment period. The majority of comments supported the goals of sanctuary designation, including protecting the cultural heritage of Chumash tribal communities and protecting the coastal California ecosystem's health and resilience. Many commenters also noted the importance of managing the area to promote recreation and tourism to support the local economy, to foster education and research programs, and to establish a shared management approach with Indigenous communities. Commenters also voiced concerns about overlapping existing and potential uses of the area such as fishing and offshore energy development. Overall, comments covered a diversity of other topics including views on: the proposed boundary and name for the proposed sanctuary; alternatives to consider for the boundary and name for the proposed sanctuary; activities that should be regulated; what non-regulatory programs the proposed sanctuary should have; and different ways to structure collaborative or co-management with Native American tribes. More detail about the scoping comments are contained in the draft EIS, section 3.11 and appendix A.
Section 304(a)(4) of the NMSA requires that the terms of designation
The purpose and need for the sanctuary provide the overarching basis for developing the proposed regulations. NOAA developed this proposed rulemaking and the proposed sanctuary terms of designation based on information received during public scoping comments, cooperating agency review, and government-to-government consultation with Tribal Nations under Executive Order 13175, as well as on information from analysis of issues in the draft EIS, interagency coordination, and internal staff analysis and expertise. Scoping comments from tribal representatives, governmental agencies, users such as the fishing industry and offshore wind energy industry, other interested organizations, and the public addressed the need for regulations and exemptions for certain activities. NOAA consulted with the Pacific Fishery Management Council as required under NMSA section 304(a)(5). NOAA also considered existing regulations for other west coast national marine sanctuaries, including Monterey Bay, Greater Farallones, Channel Islands, and Olympic Coast national marine sanctuaries, and developed terms of designation and a set of proposed regulations that are generally consistent with other sanctuary provisions in similar resource areas. In developing the proposed regulations, NOAA evaluated resource sensitivity, industry practices, and feasibility of implementing certain regulations, to balance resource protection regulations with existing and future compatible activities that may occur in the sanctuary.
A detailed discussion of the proposed regulations is contained below in section II, subsections A through I. The proposed terms of designation are in section VI below and appendix B to the draft EIS, and would ultimately be incorporated as an appendix to the sanctuary management plan upon completion of designation.
When designating a national marine sanctuary, NOAA also develops and presents a management plan that describes the management activities and initiatives that it proposes to conduct. The draft management plan for the proposed designation of CHNMS describes actions that NOAA will take to manage the sanctuary, summarized in 11 action plans, such as research and monitoring, education and outreach, sanctuary resource protection, and sanctuary operations, as well as practical programs to address certain issue areas, such as climate change, offshore energy, water quality, and wildlife disturbance. NOAA has developed the draft management plan for the largest boundary alternative as noted in the notice of intent and analyzed in the draft EIS as the “Initial Boundary Alternative,” so the public may evaluate the full suite of management measures for the proposed sanctuary; however, the final management plan could include fewer or reduced management actions if a boundary smaller than the Initial Boundary Alternative is ultimately designated.
In addition to engaging in government-to-government consultation with the only federally-recognized tribe in the area, the Santa Ynez Band of Chumash Indians (SYBCI), as described in section V, Classification, below, NOAA has conducted meetings with non-federally-recognized tribes and tribal organizations along the central California coast, including the Northern Chumash Tribal Council, yak tityu tityu yak tiłhini Northern Chumash Tribe, Coastal Band of the Chumash Nation, Xolon Salinan Tribe, Salinan Tribe of Monterey and San Luis Obispo Counties, Wishtoyo Chumash Foundation, and Barbareño/Ventureño Band of Mission Indians. Close, deliberate collaboration between NOAA and these tribes has been an essential element of this sanctuary designation process. NOAA intends to incorporate input from interested federally-recognized Indian tribes and all interested tribal entities, into the sanctuary designation process, as well as sanctuary management after the proposed designation. The draft management plan includes an Indigenous Cultural Engagement Action Plan that describes how sanctuary management would involve tribal perspectives and collaboration in a number of specific sanctuary management actions.
Additionally, NOAA is proposing a framework for collaborative management with Native American tribes and tribal groups for the proposed CHNMS. A detailed explanation of that proposed framework and an outline of opportunities for tribal collaboration in management of the proposed sanctuary are found in the introduction to the draft management plan. In summary, the proposed framework, built upon extensive input from SYBCI, non-federally-recognized tribes, and tribal organizations in this area of coast, envisions relying on government-to-government consultation with federally-recognized Indian tribes; an Intergovernmental Policy Council involving federally-recognized Indian tribes and the State of California; a Sanctuary Advisory Council (to be established after designation) that has one or more voting seats for federally-recognized Indian tribes and one or more voting seats to represent the knowledge, history, and culture of Indigenous communities; and an Indigenous Cultures Advisory Panel, as a working group of the Sanctuary Advisory Council, to provide advice to the Sanctuary Advisory Council, with coordination and communication with other groups as appropriate, about cultural issues important to these coastal tribes. NOAA also envisions a role for one or more non-profit foundations to support joint projects between NOAA and federally-recognized Indian tribes and/or non-federally recognized tribes. The proposed framework was presented to SYBCI and other tribes in meetings during August 2022 and separately shared with the public in a workshop held on August 26, 2022. NOAA welcomes further comment on the proposed framework, as described in the draft management plan, through this rulemaking process.
In accordance with NEPA (42 U.S.C. 4321
The draft EIS analyzes the Initial Boundary Alternative (7,573 mi
• Alternative 1, Bank to Coast, which focuses management from the Santa Lucia Bank to the coast (6,098 mi
• Alternative 2, Cropped Bank to Coast (5,553 mi
• Alternative 3, Diablo to Gaviota Creek, also excludes more (relative to Alternative 2) northern waters that BOEM has identified for potential offshore wind development by removing the Diablo Canyon Call Area from the boundaries of the proposed sanctuary, and focuses management on the area from the Diablo Canyon Call Area and nuclear power plant south to Gaviota Creek (5,952 mi
• Alternative 4, Combined Smallest, excludes both the western and northern offshore areas focusing management on the smallest area (4,476 mi
The draft EIS also analyzes two small expansion areas:
• Sub-alternative 5a, Morro Bay Estuary (2.5 mi
• Sub-alternative 5b, Gaviota Coast Extension (64 mi
The draft EIS also includes a “No Action Alternative” in which NOAA would not designate the area as a national marine sanctuary.
NOAA has identified as the Agency-Preferred Alternative in the draft EIS the combination of Alternative 2 and Sub-alternative 5b. This is the boundary alternative that is reflected in this proposed rule.
Based on public comments received on the draft designation documents and NOAA's experience administering the national marine sanctuary program, pursuant to NEPA and the Administrative Procedure Act, NOAA may choose to select a new alternative in the final rule and final EIS that is within the geographic and regulatory scope of these alternatives currently considered in the draft EIS, and that is a logical outgrowth of this proposed rule. See, for example, sections 3.1.1 and 3.9.2 of the draft EIS.
The draft EIS evaluates and considers the potential impacts of implementing the proposed regulations that would be adopted as part of the preferred alternative and conducting the various management programs and initiatives described in the draft management plan.
The draft EIS focuses on eight issue areas: physical resources; biological resources; commercial fishing and aquaculture; cultural heritage and maritime heritage resources; socioeconomics, human uses, and environmental justice; offshore energy; marine transportation; and homeland security and Department of Defense (DoD) activities.
The BOEM, the Bureau of Safety and Environmental Enforcement (BSEE), the DoD and the Santa Ynez Band of Chumash Indians (SYBCI) are all cooperating agencies for the NEPA review.
In accordance with NEPA (42 U.S.C. 4321
The Agency-Preferred Alternative (
In identifying the preferred alternative, NOAA has considered which boundary alternatives NOAA could effectively manage while allowing for compatible uses and providing increased protection and conservation for sanctuary resources, which is the proposed sanctuary's principal purpose. As such, the preferred alternative reflects NOAA's consideration of key issues, including those pertaining to subsea electrical transmission cables and the name of the proposed sanctuary. The sanctuary boundary proposed under the preferred alternative would allow NOAA to focus its management on key areas historically important to the Chumash Peoples and natural resources important to their heritage, while appropriately managing for other resources and uses.
NOAA's identification of Alternative 2 rather than Alternative 1 as part of the preferred alternative (in addition to Sub-alternative 5b, discussed below) is based on two principal concer ns about designating the area from Montaña de Oro north to Cambria as a sanctuary. The first concern, described in more detail in section 5.4.9 of the draft EIS, derives from BOEM's estimation that offshore wind development in the Morro Bay WEA could require up to 20-30 subsea electrical transmission cables and possibly floating substations in the area offshore of Morro Bay. While NOAA's proposed regulations contain a permit process that could be used to allow for the placement and continued presence of subsea electrical transmission cables within the sanctuary boundaries (for additional details please refer to part III, section D below), provided that the applicable
The second consideration for NOAA's choice of Alternative 2 as part of the preferred alternative relates to the lack of agreement regarding the name for the portion of the proposed sanctuary from roughly Cambria to south of Morro Bay. During the scoping process and informational meetings, the Salinan bands objected to naming the sanctuary “Chumash” in that area which they identify as being part of their ancestral homeland. Chumash bands have also considered this section of coast part of their ancestral homeland. The Xolon Salinan have expressed support for sanctuary designation of this area, provided it had a different name. Chumash bands were unwavering in their view that the entirety of the sanctuary should be named “Chumash Heritage.” Alternative 2 is responsive to Indigenous community input by delineating a geographic option that would ameliorate these concerns.
Including the Gaviota Coast Extension (Sub-alternative 5b) within the preferred alternative would provide additional protection to important coastal resources. It would include waters off three popular State beaches and parks—Gaviota, Refugio and El Capitan—and include all of Kashtayit and Naples State Marine Conservation Areas within the sanctuary. It would include additional beaches, kelp forests, and rocky and soft substrate reefs. As discussed in detail in section 4.5 of the draft EIS, that portion of the Gaviota Coast was home to numerous, large Chumash villages at the time of European first contact. Conservation of these resources is an important benefit to including this sub-alternative in the preferred alternative. Offshore structures including those necessary for existing oil and gas production in this area, such as pipelines and cables related to the Santa Ynez Unit, could be accommodated via the certification process included in the proposed regulations. Repair, replacement, or removal of the structures necessary for existing oil and gas production could be considered via an ONMS authorization process. For more details regarding the proposed permitting, authorization, and certification processes for existing oil and gas production and repair, maintenance, and removal of oil and gas structures, please refer below to section III.D.1., as well as section III.H.
Section 304(a)(4) of NMSA as amended, 16 U.S.C. 1434(a)(4), requires that the terms of designation be described at the time a new sanctuary is designated, including the geographic area proposed to be included within the sanctuary, the characteristics of the area that give it conservation, recreational, ecological, historical, research, educational, or aesthetic value, and the types of activities that will be subject to regulation to protect those characteristics.
The following represents the proposed terms of designation:
Under the authority of the NMSA, approximately 5,600 mi
The NMSA authorizes the issuance of such regulations as are necessary and reasonable to implement the designation, including managing and protecting the ecological, cultural, and historical resources and the conservation, recreational, scientific, educational, and aesthetic qualities of Chumash Heritage National Marine Sanctuary (the “Sanctuary”). Section 1 of article IV of these terms of designation lists those activities that may have to be regulated on the effective date of designation, or at some later date, in order to protect Sanctuary resources and qualities. Listing an activity does not necessarily mean that it will be regulated. However, if an activity is not listed it may not be regulated, except on an emergency basis, unless section 1 of article IV is amended by the same procedures by which the original Sanctuary designation was made.
CHNMS covers approximately 5,600 mi
For well over 10,000 years, First Peoples along North America have resided on the coast and in inland valleys adjacent to central California. Caves and other village sites at the nearby Channel Islands indicate occupation in this region as much as 13,000 years before present. At that time, due to glaciation at northern latitudes, the sea level was as much as 10 miles offshore from the present coastline. Paleoshorelines may exist in this area that could provide further evidence of early human occupation. The Native Americans who live in this
The special characteristics of the coast east of Point Conception, consisting of a south-facing coast with a channel sheltered by offshore islands, allowed Chumash to develop and make use of the plank canoe, called a “tomol,” for fishing and trade with other Chumash groups. Chumash villages north of Point Conception could not make use of the plank canoe in the rough waters and instead relied on the abundance of shellfish in this area and reed canoes. There were approximately 14 Chumash villages within the area of the sanctuary at the time of contact with Europeans, nearly 500 years ago. The largest Chumash village on the California coast at that time was “Mikiw,” located on the west bluff of Dos Pueblos Canyon. Most of the inhabited sites were located at the mouths of rivers or along the seashore where there was an abundance of food. The range of sites documented along or near the Sanctuary's coast includes rock art, shrines, village sites, camp sites, cemeteries, organic remains, evidence of trade systems, and evidence of various forms of subsistence, including hunting, fishing, and extraction.
Serial use and development along this coastline, beginning with Indigenous peoples, then Spanish exploration and occupation, Russian fur trading, ranching and the trade for hides and tallow, discovery of gold, commercial fishing, and onshore and offshore oil and gas development have all had a hand in shaping this region's coast and human use of resources. All of these uses have been dependent on marine transportation, and as a result over 200 ship and aircraft wrecks are recorded in this area, including several of national significance such as the
The natural resources of the ocean have been a principal element of most of the human occupation and exploitation of the region. Strong and persistent coastal winds drive upwelling, an oceanographic process critical to the highly productive marine ecosystem. Large kelp forests, vast sandy beaches, rocky shorelines, shallow and deep reefs, and coastal wetlands are interconnected, co-dependent biological communities prominent in this region. Important, large-scale features include the Santa Lucia Bank, a highly productive, approximately 1,000-square mile area in the heart of the Sanctuary, and thriving deep sea communities at Rodriguez Seamount and in Arguello Canyon. These productive waters complement other protected portions of the California Current by serving as critical foraging habitat for huge populations of shearwaters from New Zealand, humpback whales born offshore of Central America, leatherback sea turtles that migrate from and back to Indonesian islands, and albatross from Hawaii. More sedentary, local species depend on healthy communities in the Sanctuary, including the endangered snowy plover and black abalone, and commercially-important fish species like Dungeness crab, sablefish, spot prawn, squid, salmon, and lingcod. An estimated 33 species of marine mammals are found in the area, 18 of which can be seen on a regular basis. The Sanctuary is considered a seabird hot spot, with a higher richness of bird species than other sanctuaries offshore California. At least 400 species of fish have been documented in the area, which is also a higher richness of species than in nearby areas, likely because the Sanctuary includes warmer waters south and east of the ecological transition zone around Point Conception—Point Arguello and colder waters to the north.
The nationally significant ecological transition zone in the area around Point Conception—Point Arguello, where species more common in sub-tropical waters to the south meet with species more common in colder temperate waters to the north, is a central feature of the Sanctuary. The northern range of many warmer water species and the southern range of many colder water species meet in the area between Point Conception and Point Arguello. Increasing ocean temperatures and other impacts from climate change intensify the need to study biogeographic shifts in this area and affirm the importance of protecting the habitats on which these species depend.
Rodriguez Seamount, 38 nmi southwest of Point Conception, formed 10-12 million years ago through volcanic activity. It rises more than a mile above the seafloor to a relatively shallow depth of around 2,000 ft. below sea level. Scientists consider it to be relatively rare in that it may once have been an island, rising to possibly 200 ft. above sea level; due to sea level rise and seafloor subsidence, the seamount is now fully submerged. From its time as an island, it has remnants of sandy beach features and from its time as a seamount, it has large coral and sponge colonies. Preliminary studies indicate a high percentage of invertebrate species as well as fish species found on Rodriguez Seamount that are not found on other nearby seamounts. Some surveys have uncovered substantial aggregations of coral colonies, with large individuals likely decades old, indicating a low level of disturbance to date. A special management zone for Rodriguez Seamount has been designated by Sanctuary regulations to allow for special protection in the water column 500 ft. above the seamount and to complement regulations adopted separately under the Magnuson-Stevens Fishery Conservation and Management Act (MSA) to protect benthic habitats.
The area contains dramatic coastlines consisting of rocky shorelines, large bluffs, and sweeping sandy beaches. Other than an approximately 10-mile stretch of urban development along the coast from Port San Luis through Oceano, most of the 134 miles of Sanctuary coastline is undeveloped due to State and county park ownership, a large stretch owned by the U.S. Government as a military installation, and private landholdings of large and small ranches or dispersed single-family dwellings. This lack of development creates a sense of wildness and highly-valued aesthetics of a natural coastal setting worthy of national marine sanctuary designation.
The following activities are subject to regulation, including prohibition, as may be necessary to ensure the protection and effective management of the ecological, cultural, historical, conservation, recreational, scientific, educational, or aesthetic resources or qualities of the area:
a. Exploring for, developing, or producing oil, gas, or minerals (
b. Discharging or depositing, from within or into the boundary of the Sanctuary, or from beyond the boundary of the Sanctuary, any material or other matter;
c. Taking, removing, moving, catching, collecting, harvesting, feeding, injuring, destroying, attracting, possessing, or causing the loss of, or attempting to take, remove, move, catch,
d. Drilling into, dredging, or otherwise altering the submerged lands of the Sanctuary; or constructing, placing, or abandoning any structure, material, or other matter on or in the submerged lands of the Sanctuary;
e. Flying a motorized aircraft above the Sanctuary;
f. Operating a vessel (
g. Aquaculture or kelp harvesting within the Sanctuary;
h. Introducing or otherwise releasing from within or into the Sanctuary an introduced species; and,
i. Interfering with, obstructing, delaying, or preventing an investigation, search, seizure, or disposition of seized property in connection with enforcement of the NMSA or any regulation or permit issued under the NMSA.
Listing an activity here means that Secretary of Commerce can regulate the activity, after complying with all applicable regulatory laws, without going through the designation procedures required by paragraphs (a) and (b) of section 304 of the NMSA, 16 U.S.C. 1434(a) and (b). No term of designation issued under the authority of the NMSA may take effect in California State waters within the Sanctuary if the Governor of California certifies to the Secretary of Commerce that such term of designation is unacceptable within the review period specified in the NMSA.
Where necessary to prevent or minimize the destruction of, loss of, or injury to a Sanctuary resource or quality, or to minimize the imminent risk of such destruction, loss, or injury, any and all activities, including those not listed in section 1, are subject to immediate temporary regulation, including prohibition.
Pursuant to section 304(c)(1) of the NMSA, no valid lease, permit, license, approval, or other authorization issued by any Federal, State, or local authority of competent jurisdiction, or any right of subsistence use or access, may be terminated by the Secretary of Commerce or designee as a result of this designation or as a result of any Sanctuary regulation if such authorization or right was in existence on the effective date of this designation. The Secretary of Commerce or designee, however, may regulate the exercise (including, but not limited to, the imposition of terms and conditions) of such authorization or right consistent with the purposes for which the Sanctuary is designated.
In no event may the Secretary or designee issue a permit authorizing, or otherwise approve: (1) The exploration for, development of, or production of oil, gas, or minerals within the Sanctuary except for existing oil and gas production of existing reservoirs under production prior to the effective date of Sanctuary designation from Platform Irene and Platform Heritage; (2) the discharge of primary-treated sewage except for regulation, pursuant to section 304(c)(1) of the Act, of the exercise of valid authorizations in existence on the effective date of Sanctuary designation and issued by other authorities of competent jurisdiction; or (3) the disposal of dredged material within the Sanctuary other than at sites authorized by the U.S. Environmental Protection Agency (EPA) prior to the effective date of designation. The disposal of dredged material does not include the beneficial use of dredged material. Any purported authorizations issued by other authorities after the effective date of Sanctuary designation for any of these activities within the Sanctuary shall be invalid.
Article IV does not authorize the direct regulation of lawful fishing activities within the Sanctuary, such as setting catch quotas, establishing spatial closures for fishing, or setting fishing seasons. However, all activities listed in article IV could apply to a person engaged in the act of fishing, such as but not limited to vessel operations, wildlife disturbance, discharges, introduction of an introduced species, or disturbance of cultural or historical resources. Aquaculture and kelp harvesting are not subject to this limitation and are subject to regulation under these terms of designation. Fishing in the Sanctuary may be regulated by other Federal or State authorities of competent jurisdiction, and designation of the Sanctuary shall have no effect on any fishery management regulation, permit, or license issued thereunder.
The terms of designation, as defined under section 304(a)(4) of the NMSA, may be modified only by the same procedures by which the original designation is made, including public hearings, consultations with interested Federal, State, Tribal, regional, and local authorities and agencies, review by the appropriate congressional committees, and approval by the Secretary of Commerce, or his or her designee.
NOAA is proposing to amend 15 CFR part 922 by adding a new subpart (subpart V) that contains site-specific regulations for the proposed sanctuary. This subpart would include the proposed boundary, contain definitions of common terms used in the new subpart, identify prohibited activities and exceptions, and establish procedures for certification of existing uses and permitting otherwise prohibited activities.
NOAA proposes to designate Chumash Heritage National Marine Sanctuary, consisting of an area of approximately 5,600 square miles (mi
This proposed rule incorporates and adopts common terms defined in the national regulations at 15 CFR 922.11. In addition, NOAA proposes to include two site-specific definitions.
NOAA has proposed to define “beneficial use of dredged material” to distinguish between suitable dredge material that is discharged into the sanctuary for the purpose of protecting or restoring habitat of the sanctuary, which could be permitted, versus disposal of dredge material at a new disposal site within the sanctuary for purposes other than habitat protection or restoration, which would not be permittable. Dredged material eligible for this definition can come from a public harbor adjacent to the sanctuary, which for the Agency-Preferred Alternative would mean Port San Luis. Beneficial use of dredged material is not disposal of dredged material.
NOAA is proposing a definition for the “Rodriguez Seamount Management Zone” to define the special marine area immediately on top of, around, and adjacent to the Rodriguez Seamount. This definition is necessary because NOAA is proposing a regulation that specifically prohibits the collection or other injury of any sanctuary resource below 1,500 ft. water depth in this area from any activity other than from lawful fishing. This corresponds to the water depth about 500 ft. above the very top of the seamount. Existing fishing regulations, separately established under the Magnuson-Stevens Fishery Conservation and Management Act (MSA), already restrict bottom trawling in much of the Rodriguez Seamount Management Zone. This special area, entirely within the boundaries of the proposed sanctuary, is bounded by geodetic lines connecting a heptagon generally centered on the top of the Rodriguez Seamount, and consists of approximately 570 mi
NOAA is proposing to supplement and complement existing management of this area by proposing the following regulations in § 922.232 to protect sanctuary resources and qualities.
The central California coast has hosted offshore oil and gas development for over 60 years and the area proposed for designation as a national marine sanctuary has hosted oil and gas development for nearly 40 years. There have been oil spills from platforms and pipelines in this area, and spills from onshore development and onshore pipeline transportation, all of which have caused significant environmental harm. Additional information about these spill incidents is contained in section 4.7 of the draft EIS. NOAA is proposing to prohibit exploration, development, and production of offshore oil and gas resources within the sanctuary to reduce the risk of offshore spills from oil and gas development in the area. Continued oil and gas production of existing reservoirs under production prior to the effective date of sanctuary designation from Platform Irene (as part of the Point Pedernales Unit development) and Platform Heritage (as part of the Santa Ynez Unit development), including well abandonment, and including transportation in pipelines of product to shore, would be allowed to continue after sanctuary designation until those fields are exhausted and/or the developer ends operation. However, this regulation would prevent development of new reservoirs from these existing platforms.
Constructing and operating offshore platforms and pipelines also can cause direct impacts on natural, historical, and cultural resources, particularly from disturbance to the seafloor and benthic species. Those impacts would also be prevented because this regulation would not allow new oil and gas exploration, development, or production. Any construction, repair, replacement, or removal of existing pipelines would require a ONMS authorization or other approval in order to allow disturbance to the submerged lands.
Most if not all of the platforms and pipelines within the sanctuary are likely to be decommissioned and removed within 5-10 years of sanctuary designation. The prohibition on new oil and gas development would not preclude the removal of these structures and restoration, if necessary, of any damage caused by removal, although a sanctuary permit, authorization, or other approval would be required in order to allow disturbance to the submerged lands during decommissioning, removal, and restoration activities. NOAA would be integrally involved in the planning and conduct of such decommissioning, removal, and restoration activities for structures within the sanctuary.
This prohibition would also not allow for development, including exploratory activities, of any seafloor minerals. While seafloor mining has not been proposed in this area, this regulation would ensure that the disturbance to benthic habitat and species likely to result from seafloor mining would not occur in the sanctuary.
This proposed prohibition on discharges has three main elements: prohibition on any discharge within or into the sanctuary; discharge from beyond the sanctuary boundary that subsequently enters and injures sanctuary resources; and discharges from cruise ships. Each is explained in separate paragraphs below. All three sub-elements of this prohibition are consistent with discharge prohibitions in adjacent national marine sanctuaries.
The proposed prohibition on discharges within or into the sanctuary is proposed in recognition that various substances can be discharged from vessels or from infrastructure or individuals along the shoreline that can harm sanctuary resources or quality. The proposed discharge regulations would bolster existing authorities such as the Clean Water Act (CWA; 33 U.S.C. 1251
Oil discharged from vessels or from shore can cause acute toxicity in organisms, and can foul feathers of seabirds leading to illness or death. Discharging other debris from vessels, by accident or on purpose, can lead to long-term impacts on resources. A chronic accumulation of plastics in marine ecosystems, for instance, can lead to an accumulation of plastic in marine organisms including those that are eventually ingested by humans.
NOAA is proposing some exceptions for this prohibition consistent with those exceptions at adjacent sanctuaries. For instance, NOAA is proposing to except discharge of fish, fish parts, chumming materials, or bait used in and resulting from lawful fishing activities within the sanctuary. NOAA is also proposing to except discharge of sewage waste that has been treated by a Type I or Type II marine sanitation device, as these systems provide effective treatment for sewage as to mitigate any impact their discharge can have on marine resources. Normal vessel operations can also involve washing down the deck or the anchor, which is exempted provided the wash down qualifies as “clean” per the definition at 15 CFR 922.11. There are also normal discharges from operating motorized vessels that are excepted, such as clean vessel engine cooling water, clean vessel generator water, and clean bilge water, as well as exhaust from an engine or generator. Provided that these discharges are clean, they may be discharged within or into the sanctuary. The more common threat to sanctuary resources can come from oily bilge water, soiled by oil that drips or leaks into an engine compartment. Oily bilge water may not be discharged into the sanctuary under this proposed prohibition, and would have to be disposed of at onshore pumpout stations. NOAA will coordinate with harbormasters to ensure existing onshore pumpout facilities remain operable, and, if necessary, to explore if other facilities are needed.
NOAA is proposing to except the disposal of dredged material within the proposed sanctuary at disposal sites approved by the EPA prior to designation. The proposed sanctuary boundaries do not include the two known EPA-approved dredge disposal sites used for Morro Bay dredging. NOAA is not aware of any other such sites. Nonetheless, this exception would allow an agency to demonstrate, after sanctuary designation, that a disposal site approved by the EPA existed prior to sanctuary designation.
Within the proposed sanctuary, NOAA would also consider allowing via permit the beneficial use of material removed from dredging Port San Luis, specifically to protect or restore habitat such as a sandy beach. The beneficial use of dredged material for habitat protection or restoration purposes is different from the disposal, or discarding, of dredged material. A proposed project involving the beneficial use of dredged material from Port San Luis may be eligible for approval by NOAA if the project demonstrates a sanctuary habitat protection or restoration purpose and if the permit requirements and criteria are met.
NOAA is proposing an exception for routine discharges from U.S. Coast Guard operations. One part of the exception would allow U.S. Coast Guard vessels that lack sufficient holding tank capacity and lack a Type I or II marine sanitation device to discharge sewage and non-clean graywater beyond 3 nmi from shore. A second part of the exception would allow discharge of ammunition, pyrotechnics, and other material directly related to training from beyond 12 nmi from shore from U.S. Coast Guard vessels and aircraft conducting training activities for search and rescue and live ammunition fire in the sanctuary. NOAA recognizes that these exceptions are necessary to ensure existing U.S. Coast Guard patrols, operations, and training can be maintained in the new sanctuary. U.S. Coast Guard patrol vessels provide a tremendous benefit to NOAA by assisting with enforcement of national marine sanctuary regulations. Moreover, the U.S. Coast Guard is an essential element of marine safety to all mariners operating offshore in central California, and they also provide enforcement of other Federal laws, conduct drug smuggling interdiction activities, and protect the homeland. ONMS has developed plans with U.S. Coast Guard District 11 leadership through informal discussions and NMSA section 304(d) consultation to limit discharges into other west coast national marine sanctuaries and anticipates similar approaches could be explored for U.S. Coast Guard operations in the proposed sanctuary. Therefore, NOAA considers the proposed discharge exception for U.S. Coast Guard vessels appropriate.
Finally, NOAA is proposing an exception that would allow discharges incidental and necessary to normal oil and gas production activities from Platforms Irene and Heritage into reservoirs already in production. These could include drill cuttings and mud to maintain well pressure and control during drilling as well as other materials necessary to force oil and gas products from one part of the reservoir into producing wells. The last step in the life of an oil and gas well is to abandon the well, with the operator pumping cement into the well to prevent release of hydrocarbons in the future; this activity would be part of the proposed exception. Use of the depleted reservoirs for injection or storage of any material not considered incidental and necessary to normal oil and gas production would not be covered by the exception yet could be considered via proposed permit processes.
Discharges from beyond the boundary of the sanctuary would also be prohibited when those discharges subsequently enter the sanctuary and harm a sanctuary resource or quality. An example of this could be a spill from an onshore oil pipeline that flows down a creek, enters the sanctuary at the MHWL, and injures seabirds, fish, algae, or the sanctuary seafloor or other habitat. Unlike a discharge directly within or into the sanctuary, for a discharge to violate this prohibition, the discharge must injure a sanctuary resource or quality. This prohibition could also be applied to a spill or other discharge that originated from the marine environment and subsequently entered the sanctuary and injured a sanctuary resource or quality. The same exceptions that are proposed for the sub-element prohibiting discharge directly within or into the sanctuary would also apply for a discharge from beyond the boundary, except for the exception for dredge disposal and the exception for discharges incidental and necessary to oil and gas production. NOAA intends that dredge disposal discharges beyond the boundary of the sanctuary need to be designed in such a manner that they do not enter the sanctuary and injure sanctuary resources or qualities.
The third sub-element of this discharge regulation would prohibit discharge from cruise ships. Across most national marine sanctuaries, NOAA has applied consistent regulations that allow for fewer exceptions for cruise ship discharges than for other vessel discharges within or into sanctuaries because cruise ships can generate very large volumes of waste or other discharges. Even if treated, the volume of sewage and graywater, for instance, on a cruise ship of more than 2,000 passengers can reach several million gallons a day. Sewage discharge may contain bacteria or viruses that can cause disease in humans and wildlife, and can cause excessive growth and decomposition of
The seabed is a large and important habitat in the ecosystem within the proposed sanctuary, and NOAA proposes to prohibit activities that would drill into, dredge, or otherwise alter or disturb the submerged lands of the sanctuary. This prohibition would include constructing, placing or abandoning any structure, material, or other matter on the submerged lands. This is a common regulatory prohibition that NOAA has applied to most national marine sanctuaries. The purpose is to prevent activities that cause harm to habitat and species on or near the seafloor, such as drilling into or dredging into the seafloor. The proposed regulation includes exceptions for certain activities including disturbance during the conduct of lawful fishing activities, kelp harvesting, or anchoring a vessel. NOAA also proposes to except from this prohibition the installation of an aid to navigation, as well as the repair, replacement, or other maintenance on existing structures, specifically docks, piers, breakwaters, or jetties. Also, NOAA proposes an exception for maintenance dredging of the entrance channels for Port San Luis in existence at the time the sanctuary is designated. Vandenberg Space Force Base periodically conducts dredging near its coastal loading dock, with onshore disposal of the sand, but that dredging disturbance would be exempted with the general exemption for existing Department of Defense activities. NOAA has also proposed an exception to allow for drilling, maintaining, and abandoning wells incidental and necessary to normal oil and gas production activities within or into existing reservoirs in production at the time of sanctuary designation from Platforms Irene or Heritage.
In proposing these exceptions, NOAA has considered both the anticipated level of disturbance to the submerged lands and the purpose of the specified activities, most of which are related to maritime safety. The proposed exceptions are intended to further the policy of the NMSA to facilitate public and private uses of sanctuary resources to the extent compatible with the primary objective of resource protection. However, in order to conserve and protect populations of coral and sponge colonies, NOAA proposes to not apply any of these exceptions within the Rodriguez Seamount Management Zone. The only exception that would apply within the Rodriguez Seamount Management Zone is the exception for seabed disturbance conducted during lawful fishing activity as regulated under the MSA. Note, however, that most of the Rodriguez Seamount Management Zone has been designated by the Pacific Fishery Management Council as groundfish essential fish habitat under the MSA, and areas in and around the zone are currently closed to bottom trawling under regulations at 50 CFR part 660, subpart C.
Certain currently proposed or contemplated future activities could result in disturbance to the submerged lands in the area proposed for sanctuary designation. Procedures described below in the section on General Permits, Authorizations, Certifications, and Special Use Permits could be used to allow such an activity that is otherwise prohibited, provided that the applicable criteria and requirements are met and that any permit conditions can be satisfied by developers. Examples of such activities that would be prohibited by the proposed seabed disturbance regulation unless a sanctuary general permit, ONMS authorization, or certification were issued include construction and operation of subsea electrical transmission cables from wind development in Federal waters beyond the sanctuary, or construction and operation of wind platforms in State waters near Vandenberg Space Force Base. Disturbance of submerged lands during repair and maintenance of existing structures not listed as being exempted, such as oil pipelines to shore from Platform Irene, or trans-oceanic fiber-optic telecommunications cables, would also require a permit, authorization, or certification from NOAA before proceeding.
With respect to subsea electrical transmission cables, BOEM cannot issue leases, rights of way, or easements for wind development within national marine sanctuaries per the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1337(p)(10). As discussed in the draft EIS, NOAA intends to coordinate with BOEM on potential integration of NMSA authorities and BOEM's OCSLA authorities for the purposes of specific wind development projects contemplated adjacent to and within the proposed sanctuary. Although the details of any individual permit or authorization would be project-specific and would depend upon NOAA's consideration of the permit application(s) for any particular project, NOAA believes that the most likely permitting approach for activities associated with subsea electrical transmission cables is as follows.
• To allow the site assessment and characterization activities that must be conducted prior to cable installation, NOAA could consider issuing a sanctuary general permit for research purposes under 15 CFR part 922, subpart D, and 15 CFR 922.233 of the proposed rule.
• For the installation of a subsea electric transmission cable on the outer continental shelf within the proposed sanctuary, NOAA could consider issuing an ONMS authorization of a permit issued by the U.S. Army Corps of Engineers (USACE) under section 10 of the Rivers and Harbors Act (33 U.S.C. 403), under 15 CFR 922.36 and 922.232(e) of the proposed rule.
• For installation of cables within State waters of the proposed sanctuary, NOAA could similarly consider authorizing a lease issued by the State Lands Commission or a coastal development permit issued by the California Coastal Commission, under 15 CFR 922.36 and 922.232(e) of the proposed rule.
• To authorize the continued presence of the cable on or in the seabed within the proposed sanctuary, NOAA could then consider issuing a special use permit under section 310 of the NMSA.
• To allow any necessary maintenance and repair associated with the cable that might cause a disturbance of the submerged lands of the sanctuary, NOAA could consider several potential options. These could include relying on the initial ONMS authorization of the USACE section 10 permit and/or State permit for the cable installation (depending on the duration of that permit and whether it included future repair and maintenance), or issuing an ONMS authorization of a separate USACE and/or State permit that is issued specifically for the maintenance and repair activity.
NOAA has coordinated with USACE regarding this approach in Federal waters, and intends to continue that coordination throughout the designation process and as plans for cabling in the area are developed. Regular coordination with State agencies has occurred in the past and NOAA would conduct specific coordination meetings related to cable permitting as necessary. That said, NOAA's proposed regulations
Decommissioning and removal activities that would disturb the sanctuary seabed, such as oil and gas platform removal or decommissioning of the outfall at the Diablo Canyon Power Plant, would require a permit, authorization, or certification from NOAA before proceeding. Further, NOAA has already commented, or could comment in the future as appropriate, to Federal, State, and local agencies leading regulatory review of these actions; also, some of these examples have been discussed with BOEM and BSEE, as cooperating agencies under NEPA for this designation, given the relevance to their authorities.
NOAA is proposing to prohibit possessing, moving, removing, or injuring, or attempting to possess, move, remove, or injure a sanctuary historical resource, as defined at 15 CFR 922.11. This prohibition aims to reduce the risk of direct harm to sanctuary historical and cultural resources. “Moving” and “injuring” would include any changes to the position or state of historical resources, as well as covering, uncovering, moving, or taking artifacts from a shipwreck, even if the artifacts are not located directly on a shipwreck. Sanctuary historical resources include cultural and archaeological resources and artifacts. This sanctuary prohibition would apply within both State and Federal waters of the sanctuary and is necessary to ensure conservation of historical resources on the more than 200 ship and aircraft wrecks thought to exist in the sanctuary, as well as other known or unknown historical resources, such as resources that may be associated with submerged Native settlements.
This prohibition is proposed to ensure conservation of important populations of marine mammals, sea turtles, and birds that are found in or above the sanctuary. The regulation would not apply should a person be authorized to take a marine mammal, sea turtle, or bird by NOAA or the U.S. Fish and Wildlife Service pursuant to the Marine Mammal Protection Act (MMPA), the Endangered Species Act (ESA), or the Migratory Bird Treaty Act (MBTA). The term “take” including “taking” is defined in the national sanctuary regulations at 15 CFR 922.11.
This regulation is a companion to the preceding prohibition and is proposed to restrict a person's ability to possess any marine mammal, sea turtle, or bird within the sanctuary, except as allowed by the MMPA, ESA, or MBTA, or as necessary for valid law enforcement purposes.
Other adjacent national marine sanctuaries, similar to the proposed CHNMS, have considerable boating traffic along the coast and from local harbors. NOAA has responded to dozens of vessel sinkings, groundings, and discharges each year in national marine sanctuaries throughout the National Marine Sanctuary System, many with significant response and restoration costs and damage to sanctuary resources. Along with responding to those incidents, NOAA has adopted this regulation as a means to prevent a vessel's sinking, grounding, or other incident, given that prevention is much less expensive than responding to incidents and can optimally prevent impacts and damage to sanctuary resources as well as to private property. NOAA proposes prohibiting deserting a vessel aground within the sanctuary for the same reasons. In the definition of the term “deserting” in the national sanctuary regulations at 15 CFR 922.11, NOAA has clarified conditions that constitute deserting a vessel. Finally, with this proposed regulation NOAA also proposes prohibiting leaving harmful matter aboard a grounded or deserted vessel in the sanctuary; the intent would be to minimize additional damage to sanctuary resources. The sanctuary regulations at 15 CFR 922.11 also define “harmful matter.”
White sharks function as a key species in coastal ecosystems in three broad areas in the world, with California and Baja California forming one of those population centers. Several different areas within the proposed sanctuary have important populations of adult and sub-adult white sharks, and may offer linkage to other white shark aggregation areas in CINMS, Monterey Bay National Marine Sanctuary (MBNMS), and Greater Farallones National Marine Sanctuary (GFNMS). Including this proposed regulation would provide similar levels of protection to these central California white shark aggregation sites within CHNMS by preventing harm or behavioral disturbance to white sharks. The proposed regulation would apply the definition of “attract” in the national sanctuary regulations at 15 CFR 922.11. The prohibition against attracting white sharks is intended to address harassment and disturbance related to human interaction from research activities directed at white sharks or shark diving programs known generally as adventure tourism, or from recreational boaters who may approach a white shark. NOAA has concluded these activities can degrade the natural environment, impacting the species as a whole, or adversely impacting individual sharks from repeated encounters with humans and boats. A similar prohibition against attracting great white sharks was promulgated for MBNMS in 1996 and GFNMS in 2008, and NOAA has not had issues at those sanctuaries with lawful fishing activities inadvertently attracting white sharks. NOAA would have the ability to issue permits for activities that involve attracting a white shark if the permit procedures and requirements are met, as described below.
NOAA is proposing a regulatory framework for Rodriguez Seamount that is similar to its approach for Davidson Seamount in MBNMS. With the CHNMS regulations, NOAA proposes to create the Rodriguez Seamount Management Zone to ensure conservation of diverse and rare resources found on the seamount, including coral and sponges and other invertebrates, or living in the water column immediately above it. The seamount has seafloor features that suggest it may have been exposed above sea level millions of years ago, and its uncommon geomorphologic and benthic habitat features could be damaged without further protection. The top of the seamount is at approximately 2,000
This prohibition would not apply to lawful fishing activity that is regulated under the MSA and its implementing regulations. NOAA, through conservation actions under the MSA, has prohibited bottom trawling on and around Rodriguez Seamount since June 2006. Additional protections provided to the seamount by the proposed sanctuary regulations would protect the high biodiversity and deep-sea habitat on the seamount. Long life histories and slow growth of deep-sea communities mean that these habitats have long recovery times following injuries and adverse impacts; additional protections for resources 1,500 ft. below sea level (roughly 500 ft. above the top of the seamount) would add critical additional risk mitigation for these sensitive resources.
NOAA is proposing to prohibit introducing or otherwise releasing an introduced species into the sanctuary. NOAA has adopted the same introduced species regulation at other national marine sanctuaries offshore of California to prevent the incidental or deliberate release of an introduced species into the sanctuary. Releases and subsequent spreading of introduced species have devastated marine ecosystems across the globe; most notably the alga
NOAA proposes a regulation, similar to regulations at other local national marine sanctuaries, to prohibit interfering with various sanctuary enforcement activities. This regulation would assist in NOAA's enforcement of the sanctuary regulations and strengthen sanctuary management.
The proposed prohibitions for CHNMS would not apply to any activity necessary to respond to emergencies that threaten life, property, or the environment. However, this proposed exemption for emergencies would not apply to the prohibitions on the development of oil, gas, or minerals; attracting a white shark; introducing an introduced species; or interfering with an investigation or other enforcement activity.
NOAA has proposed a broad exemption to allow existing activities carried out or approved by the various branches of the Department of Defense as specifically identified in chapter 4.9 or appendix I to the draft EIS. NOAA has coordinated with the Department of Defense, a cooperating agency under NEPA, to include in appendix I to the draft EIS a list of the activities that occur in the area proposed for sanctuary designation.
The area overlaps with the Point Mugu sea range and is adjacent to Vandenberg Space Force Base, which conducts both military missions from the base as well as hosting commercial space launches. All launches from the base or within the proposed sanctuary that are carried out or approved by DoD would be included in this exemption. With respect to commercial and civil launches from the base and associated activities, DoD has informed NOAA that:
• DoD approval is required for these activities.
• DoD conducts NEPA reviews for these activities. Other Federal agencies, such as the Federal Aviation Administration and/or the U.S. Coast Guard, may be cooperating agencies for purposes of these NEPA reviews.
• DoD also conducts all required natural and cultural resource consultations for these activities.
• Civil partners and commercial providers conducting these activities are required to comply with DoD best management practices.
NOAA advises that based on public comments received, additional coordination with DoD, and NOAA's experience administering the national marine sanctuary system, pursuant to NEPA and the Administrative Procedure Act, the final rule and final EIS may reflect any modifications to the DoD exemption that are a logical outgrowth of the proposed rule and that do not constitute a substantial change to the proposed action relevant to environmental concerns.
New DoD activities that would not otherwise be prohibited by the CHNMS regulations would not require an amendment to the list of exempted activities. For those new DoD activities that would otherwise be prohibited by the CHNMS regulations, NOAA has proposed a process whereby the ONMS Director, upon consultation with the appropriate counterpart at the Department of Defense, can also exempt such new activities carried out by the Department of Defense.
An activity is considered to be a new activity, and not covered by the exemption for existing Department of Defense activities, if, as determined by NOAA, the activity is new or modified in any way (including change in location, frequency, duration, or technology used) from the activities described or listed in section 4.9 or appendix I, and the activity is likely to cause adverse effects on sanctuary resources or qualities that are substantially greater or different in kind than the effects of the activities described or listed in section 4.9 or appendix I.
A new activity that is not covered by the exemption for existing Department of Defense activities could be conducted if a sanctuary general permit or ONMS authorization, as applicable, were issued for the proposed activity.
In addition, NOAA commits to working with the Department of Defense to consider exempting new activities from the CHNMS regulatory prohibitions through subsequent rulemaking procedures, for instance in subsequent management plan and regulatory review processes for CHNMS. Any changes to the list of exempted Department of Defense activities could only occur after compliance with all applicable laws, such as the Administrative Procedure Act and NEPA, as necessary, and after public notice and comment, as applicable.
NOAA is willing to work with the Department of Defense to create a mechanism whereby new activities that are likely to injure sanctuary resources, and thereby also require section 304(d)
This proposed regulation also contains language common to regulations for other national marine sanctuaries about obligations of the Department of Defense in the event an incident results in threatened or actual destruction, loss of, or injury to a sanctuary resource or quality. NOAA recognizes that this broad exemption is necessary to ensure military readiness for the Department of Defense to conduct existing training, operations, and military readiness activities in the area proposed to be designated as a national marine sanctuary. The United States military has been able to maintain readiness and conduct training and other operations in other national marine sanctuaries based on similar broad exemptions.
NOAA is not proposing any sanctuary-specific regulation to allow for development of emergency regulations to address urgent threats to sanctuary resources. Rather, the emergency regulation provision included in the regulations of general applicability, which apply to all national marine sanctuaries (see 15 CFR 922.7), would also apply to CHNMS. Emergency regulations are used when there is an imminent risk to sanctuary resources and a temporary regulation or prohibition is necessary to prevent or minimize the destruction or loss of those resources, or otherwise minimize the imminent risk of such destruction, loss, or injury.
NOAA is proposing to include authority to issue sanctuary general permits to allow certain activities that would otherwise violate prohibitions in the proposed sanctuary's regulations. NOAA's proposal would not allow issuance of a sanctuary general permit for oil, gas, or mineral exploration, development, or production; introducing an introduced species; or interfering with an investigation or other enforcement activity; or as further limited in § 922.232(f) of the proposed regulations. National marine sanctuary program-wide regulations describe, at 15 CFR 922.30, different purposes for which a sanctuary general permit could be issued, three of which would apply to this proposed sanctuary: “Research—activities that constitute scientific research or scientific monitoring of a national marine sanctuary resource or quality,” “Education—activities that enhance public awareness, understanding, or appreciation of a national marine sanctuary or national marine sanctuary resource or quality,” and “Management—activities that assist in managing a national marine sanctuary.”
NOAA is proposing to add to the list at § 922.30, an additional purpose specific to CHNMS for which a sanctuary general permit could be issued: “Native American cultural or ceremonial activities—activities within Chumash Heritage National Marine Sanctuary that will promote or enhance local Native American cultural or ceremonial activities; or will promote or enhance education and training related to local Native American cultural or ceremonial activities.” NOAA is proposing this general permit category to address a need identified during scoping. Specifically, NOAA received a scoping comment letter stating that indigenous peoples should be allowed to conduct the following cultural activities in the proposed sanctuary, subject to all other applicable law: collecting culturally-significant resources including bones, feathers, shells, animals, and plants; burials of cremated remains in biodegradable receptacles; survey and other work at submerged indigenous living sites, like villages or caves, including collecting artifacts like stone bowls or pestles. ONMS may be able to allow some of these activities to occur within the proposed sanctuary under existing authorities and the current general permit categories at § 922.30 (
The proposed regulations would require compliance with 15 CFR part 922, subpart D, in the national regulations for permit application processes, review procedures, amendments, and other permitting stipulations. These national permitting regulations include a list of factors NOAA considers in deciding whether or not to issue the permit, such as whether the activity must be conducted within the sanctuary, or whether the activity will be compatible with the primary objective of protection of sanctuary resources and qualities. NOAA would be able to impose specific terms and conditions through a permit as appropriate.
Pre-existing activities specifically authorized by a valid Federal, State, or local lease, permit, license, or rights of subsistence use or access might be occurring within the proposed CHNMS area that would otherwise be prohibited by sanctuary regulations. Therefore, NOAA proposes including § 922.234 to describe the process by which it could certify an existing valid lease, permit, license, or right of subsistence use or access within the proposed sanctuary boundaries, consistent with 16 U.S.C. 1434(c) and 15 CFR 922.10. In compliance with the NMSA, the regulations at § 922.234 would state that certification is the process by which such activities existing prior to the designation of the sanctuary that violate sanctuary prohibitions may be allowed to continue. NOAA may, however, further regulate the exercise of such activities by applying additional terms and conditions as a condition of the certification to achieve the purposes for which the sanctuary would be designated. Requests for certifying permitted existing uses would have to be received by NOAA within 90 days of the effective date of the designation.
Pursuant to § 922.36 in the national regulations and § 922.232(e) in the CHNMS regulations, NOAA would have the authority to consider allowing an activity otherwise prohibited by § 922.232 if such activity is specifically authorized by any valid Federal, State, or local lease, permit, license, approval, or other authorization issued after the effective date of sanctuary designation. This “ONMS authorization authority”
NOAA has the authority under the NMSA to issue special use permits (SUPs) at national marine sanctuaries, as established by section 310 of the NMSA (16 U.S.C. 1441) and by 15 CFR 922.31. SUPs can be used to authorize specific activities in a sanctuary if such authorization is necessary to establish conditions of access to, and use of, any sanctuary resource or to promote public use and understanding of a sanctuary resource. Section 310 of the NMSA establishes four requirements for SUPs: (1) activities must be compatible with the purposes for which the sanctuary is designated and with protection of sanctuary resources; (2) SUPs shall not authorize the conduct of any activity for a period of more than five years unless otherwise renewed; (3) activities carried out under the SUP must be conducted in a manner that does not destroy, cause the loss of, or injure sanctuary resources; and (4) permittees are required to purchase and maintain comprehensive general liability insurance, or post an equivalent bond, against claims arising out of activities conducted under the SUP and to agree to hold the United States harmless against such claims. The NMSA authorizes NOAA to assess and collect fees for the conduct of any activity under an SUP, including costs incurred, or expected to be incurred, in issuing the permit and the fair market value use of sanctuary resources; for instance, for use of the seabed to protect a buried cable from anchor damage. Implementing regulations at 15 CFR 922.35 provide additional detail on assessment of fees for SUPs. Like with sanctuary general permits, NOAA can place conditions on SUPs specific to the activity being permitted.
The activities that may qualify for a SUP are set forth in the
The general regulations in 15 CFR part 922, subpart A, for general information and 15 CFR part 922, subpart D, for National Marine Sanctuary permitting would also have to be amended so that the regulations are accurate and up-to-date. The modified sections to conform to adding a new sanctuary are:
NOAA requests comments on this proposed rule including the terms of designation and proposed regulations, the draft EIS including the range of alternatives, and the draft management plan for the proposed CHNMS. NOAA will publish the final EIS and final management plan following public review and comment on this proposed rule and following NOAA's consideration of substantive comments received. NOAA also requests comments on the Regulatory Flexibility Act certification and economic analysis (see section V.F). All substantive comments received, or comprehensive summary of all public comments on these documents as applicable, along with responses to comments, will be included in the final EIS.
Sensitive personally identifiable information, such as account numbers and Social Security numbers, should not be included with the comment. Comments that are not related to the proposed Chumash Heritage National Marine Sanctuary or that contain profanity, vulgarity, threats, or other inappropriate language will not be considered.
NOAA has determined that the designation of Chumash Heritage National Marine Sanctuary (CHNMS) will not have a negative impact on the National Marine Sanctuary System and that sufficient resources exist to effectively implement sanctuary management plans and to update site characterizations. The preliminary finding for NMSA section 304(f) is available on the proposed sanctuary's website at:
As described in section I above, NOAA prepared a draft EIS to evaluate the impacts of this proposed action of designating a national marine sanctuary, which considered alternatives for the proposed designation of a national marine sanctuary along and offshore of the coast of central California. Copies of the draft EIS and related draft management plan are available at the address and website listed in the
The Office of Management and Budget (OMB) has determined this proposed rule is significant action under Executive Order 12866, “Regulatory Planning and Review,” 58 FR 190 (Oct 4, 1993), as supplemented and reaffirmed E.O. 14094, “Modernizing Regulatory Review,” 88 FR 21879 (April 11, 2023). Based upon the information provided in NOAA's accompanying Cost-Benefit Analysis (draft EIS appendix D), this proposed rule would not meet the criteria for a significant regulatory action as defined in section 3(f)(1) of E.O. 12866, as supplemented and reaffirmed by E.O. 14094. This means the estimated annual effect is less than $200 million, and the action would not adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. Therefore, NOAA did not prepare the full regulatory impact analysis under E.O. 12866. However, NOAA requests public comment on all the costs and benefits discussed in the accompanying Cost-Benefit Analysis.
NOAA has concluded that this regulatory action does not have federalism implications sufficient to warrant preparation of a federalism assessment under Executive Order 13132 because NOAA supplements and complements Federal, State, and local laws under the NMSA rather than supersedes or conflicts with them. NOAA has coordinated with State partners in the development of this proposed rule. NOAA has aimed for consistent regulations throughout sanctuary waters including those within State and Federal jurisdiction.
Under Executive Order 13175 of November 6, 2000, Federal departments and agencies are charged with engaging in regular and meaningful consultation and collaboration with officials of federally-recognized Tribal Nations on the development of Federal policies that have tribal implications. The Executive order identifies fundamental principles guiding agencies in formulating or implementing policies that have tribal implications, including working with federally-recognized Tribal Nations on a government-to-government basis to address issues concerning Indian tribal self-government, tribal trust resources, and Indian tribal treaty and other rights, recognizing the right of Indian tribes to self-government, and supporting tribal sovereignty and self-determination. NOAA implements Executive Order 13175 through the NOAA Administrative Order 218-8 (Policy on Government-to-Government Consultation with Federally Recognized Indian Tribes and Alaska Native Corporations), and the NOAA Tribal Consultation Handbook. Under these policies and procedures, NOAA offers affected federally-recognized Tribal Nations government-to-government consultation at the earliest practicable time it can reasonably anticipate that a proposed policy or initiative may have Tribal implications.
NOAA identified the Santa Ynez Band of Chumash Indians (SYBCI) as the only federally-recognized Tribe in the area of the proposed sanctuary. To date, five formal consultation meetings have been conducted, on January 27, 2022, April 14, 2022, August 12, 2022, September 1, 2022, and December 19, 2022, as well as one informational meeting with NOAA leadership on April 28, 2022. In the course of this consultation, NOAA has shared relevant portions of the draft EIS and the draft management plan with the SYBCI and incorporated comments received and information exchanged in consultation to revise and update the draft EIS. NOAA's government-to-government consultation with the SYBCI for the purpose of designating the new national marine sanctuary is still ongoing.
The Regulatory Flexibility Act (RFA; 5 U.S.C. 601
Pursuant to section 605(b) of the RFA, the Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration (SBA) that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. The purpose, context, and statutory basis for this action is described above and not repeated here. The analysis below discusses the potential effects of the proposed designation of a Chumash Heritage National Marine Sanctuary and serves as the factual basis for the certification. In summary, with this proposed rulemaking, small businesses (commercial fishing, for-hire charter operations) are not expected to experience significant impacts. The extent of costs imposed on businesses would be for those seeking a general sanctuary permit of $172.
NOAA has identified commercial and for-hire fishing vessels and the non-consumptive recreational industry, which includes for-hire operations such as wildlife viewing, as small entities impacted by the Initial Boundary Alternative. Each relevant small business category is based on the most recent size standards published by the U.S. Small Business Administration (SBA) (2022). Size standards are based upon the average annual receipts (all revenue) or the average employment of a firm. The commercial size standard is $25.0 million for finfish fishing (North American Industry Classification System [NAICS] code—114111), $14.0 million for shellfish fishing (NAICS code—114112), and $11.5 million for other marine fishing (NAICS code—114119). Water-based scenic and sightseeing transportation operations (NAICS code—487210), such as for-hire recreational fishing operations and dive/snorkeling for-hire operations, have size standards of $14.0 million. All businesses within the industries analyzed here are small businesses, which include commercial and recreational fishing and non-consumptive recreational businesses. There are other businesses that operate within the study area; however, they are not considered small businesses (
All commercial fishing and for-hire fishing vessel count data presented in this section are derived from California Department of Fish and Wildlife (CDFW) data. NOAA calculated the potential number of vessels that may be
All commercial fishing vessels were determined to be small businesses based on the SBA size standards. On average (2016-2020), 250.6 vessels landed at least one pound of marine life within the area analyzed each year and 3,057.6 commercial fishing vessels operated within the State (CDFW, 2020a, 2021, 2020b, 2019, 2018, 2017).
For-hire recreational fishing includes both charter boats and headboats. Charter boats are fishing vessels that are typically hired to take up to six anglers on a fishing trip. In general, charter boats charge on a per-trip basis. Headboats usually operate on a schedule and may provide several trips in a single day, taking multiple fishing parties per trip and charging on a per-person basis. Headboats are usually larger and able to accommodate more anglers than a charter boat. All recreational fishing operations were determined to be small businesses. From 2016-2020, there was an annual average of 18.8 for-hire recreational fishing vessels operating within the proposed sanctuary boundaries annually and 532 vessels on average each year operating within the State (CDFW, 2020c, 2021, 2020b, 2019, 2018, 2017).
Businesses considered to operate in the non-consumptive recreation industry include dive and snorkel operations, rental equipment operations, wildlife viewing operations, and other businesses that either utilize or whose customers utilize, but do not take, sanctuary resources.
There are several harbors within the study area that support non-consumptive recreation businesses. Santa Barbara, Morro Bay, and Avila Beach all have been identified to have operations that use the harbors. Across these three harbors, NOAA identified nine operations that are likely to use the proposed sanctuary waters to support their operations for whale watching and other wildlife viewing (NOAA personal communication). All of these businesses were determined to be small businesses. No operations visiting the proposed sanctuary for white shark tours were identified.
The proposed regulatory action would establish new reporting and recordkeeping requirements for small entities that apply for sanctuary general permits, certifications, or authorizations (see 15 CFR part 922 and the description in part III, section H above). As a result of this proposed action, only a minimal increase in the number of permits (approximately 5-15 permits per year) is expected, and these requirements would have a minimal impact on small entities because few operators in the area would need to apply for a permit in order to continue their activities. Minimal reporting and recordkeeping requirements are expected because lawful commercial and recreational fishing and recreational activities would be allowed to continue in the proposed sanctuary without a permit (with certain exceptions discussed below). An operator would be required to obtain a permit only if they wish to conduct activities that would be prohibited in the proposed sanctuary; for example, if a research operation or commercial activity was likely to result in damage to the seabed, a permit would be required unless an exception or exemption applies.
As discussed below, in section G., the public reporting burden for ONMS general permits is estimated to average three responses with an average of 1.5 hours per response, to include application submission, a cruise or flight log (or some other form of activity report), and a final summary report after the activity is complete. The only expected costs are related to permitting. The total cost estimate for reporting a permit is $171.68 based on an hourly rate of $38.15 (see Paperwork Reduction Act OMB control number (0648-0141
The proposed rule does not propose to regulate commercial fishing or recreational fishing. The proposed rule is not likely to impact commercial fishermen's operations or profits within the statistical areas corresponding to the proposed sanctuary designation. Although vessels would not be permitted to discharge within the proposed sanctuary boundary, they are still permitted to discharge outside of sanctuary boundaries. As discussed in the supporting draft EIS (section 4.2.3), this regulation is unlikely to have an adverse impact on vessels, provided they plan accordingly to discharge outside of the sanctuary or use appropriate facilities near shore. Additionally, vessels are unlikely to be impacted by the seabed disturbance prohibition. If a vessel did need to engage in seabed disturbance, the small business could seek a permit from NOAA.
It is also likely that increased name recognition, marketing, and outreach of the proposed sanctuary would result in increased demand for the services offered by small businesses that utilize sanctuary resources. This is described in more detail in the economic review of the potential impacts; see appendix D of the draft EIS.
As described above, NOAA does not expect a significant reduction in profits, as the only expected costs are for permitting ($172 per permit). No duplicative, overlapping, or conflicting Federal rules have been identified for this proposed rule. Therefore, NOAA has concluded that the proposed rule would not have a significant impact on a substantial number of small entities operating in the area of the proposed sanctuary due to the minimal permitting costs. Therefore, an Initial Regulatory Flexibility Analysis is not required.
Notwithstanding any other provisions of the law, no person is required to
NOAA has an OMB control number (0648-0141) for the collection of public information related to the processing of ONMS permits across the National Marine Sanctuary System. NOAA's proposal to create a national marine sanctuary along the coast of central California would likely result in a minimal increase in the number of requests for ONMS general permits, special use permits, certifications, and authorizations because this action proposes to add those approval types for this proposed sanctuary. A large increase in the number of permit requests would require a change to the reporting burden certified for OMB control number 0648-0141. While not expected, if such permit requests do increase, a revision to this control number for the processing of permits would be requested.
In the most recent Information Collection Request revision and approval for national marine sanctuary permits (dated November 30, 2021), NOAA reported approximately 424 national marine sanctuary permitting actions each year, including applications for all types of ONMS permits, requests for permit amendments, and the conduct of administrative appeals. Of this amount, CHNMS is expected to add 5 to 15 permit requests per year. The public reporting burden for national marine sanctuaries general permits is estimated to average three responses with an average of 1.5 hours per response, to include application submission, a cruise or flight log (or some other form of activity report), and a final summary report after the activity is complete. Therefore, the total annual burden hours would be expected to increase by approximately 22.5 to 67.5 hours.
Please send any comments regarding the burden estimate for this data collection requirement or any other aspect of this data collection, including suggestions for reducing the burden, to NOAA (see
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Section 106 of the National Historic Preservation Act (NHPA, 54 U.S.C. 306108) requires Federal agencies to take into account the effects of their undertakings on historic properties and afford the Advisory Council on Historic Preservation (ACHP) a reasonable opportunity to comment with regard to the undertaking. “Historic property” means any prehistoric or historic district, site, building, structure, or object included in or eligible for inclusion in the National Register of Historic Places maintained by the Secretary of the Interior. This term includes artifacts, records, and material remains that are related to and located within such properties, including properties of traditional religious and cultural importance to an Indigenous nation or tribe or Native Hawaiian organization. 36 CFR 800.16(l).
The regulations implementing section 106 of the NHPA (36 CFR part 800) establish a process requiring Federal agencies to: (i) determine whether the undertaking is a type of activity that could affect historic properties, (ii) identify historic properties in the area of potential effects, (iii) assess potential adverse effects, and (iv) resolve adverse effects. The regulations require that Federal agencies consult with States, tribes, and other interested parties when making their effect determinations.
NOAA has determined that the designation of a national marine sanctuary and related rulemaking for sanctuary-specific regulations meet the definition of an undertaking as defined at § 800.16(y).
In fulfilling its responsibilities under section 106 of the NHPA, NOAA is seeking to identify potential consulting parties in addition to the State Historic Preservation Officer (SHPO), and will complete the identification of historic properties in the area of potential effects and the assessment of the effects of the undertaking on such properties in consultations with those identified parties. By this notice of proposed rulemaking, NOAA seeks public input, particularly in regard to the identification of historic properties within the proposed area of potential effect. Pursuant to 36 CFR 800.16(l)(1),
The Sunken Military Craft Act of 2004 (SMCA; Pub. L. 108-375, Title XIV, sections 1401 to 1408; 10 U.S.C. 113 note) preserves and protects from unauthorized disturbance all sunken military craft that are owned by the United States Government, as well as foreign sunken military craft that lie within United States waters, as defined in the SMCA. Thousands of U.S. sunken military craft lie in waters around the world, many accessible to looters, treasure hunters, and others who may cause damage to them. These craft, and their associated contents, represent a collection of non-renewable and significant historical resources that often serve as war graves, carry unexploded ordnance, and contain oil and other hazardous materials. By protecting sunken military craft, the
There are seven known U.S. Navy destroyers that ran aground and sunk near Point Honda in 1923 within the proposed CHNMS. The proposed CHNMS may also include sunken military craft that have yet to be discovered. Sunken military craft fall under the jurisdiction of a number of Federal agencies such as the U.S. Navy and the U.S. Coast Guard. The USCGC
Section 307 of the Coastal Zone Management Act (CZMA; 16 U.S.C. 1456) requires Federal agencies to consult with a State's coastal program on potential Federal agency activities that affect any land or water use or natural resource of the coastal zone. Because the proposed sanctuary lies partially within State waters, NOAA intends to submit a copy of this proposed rule and supporting documents, including the draft EIS, to the California Coastal Commission for evaluation of Federal consistency under the CZMA. NOAA will publish the final rule and designation only after completion of the Federal consistency process under the CZMA.
Executive Order 12898 directs Federal agencies to identify and address disproportionately high and adverse effects of their actions on human health and the environment of minority or low-income populations. The designation of national marine sanctuaries by NOAA helps to ensure the enhancement of environmental quality for all populations in the United States. The proposed sanctuary designation would not result in disproportionate negative impacts on any minority or low-income population. In addition, many of the potential impacts from designating the proposed sanctuary would result in long-term or permanent beneficial impacts by protecting sanctuary resources, which may have a positive impact on communities by providing employment and educational opportunities, and potentially result in improved ecosystem services.
Administrative practice and procedure, Coastal zone, Cultural resources, Historic preservation, Marine protected areas, Marine resources, National marine sanctuaries, Recreation and recreation areas, Reporting and recordkeeping requirements, Shipwrecks.
For the reasons set forth above, NOAA proposes to amend part 922, title 15 of the Code of Federal Regulations as follows:
16 U.S.C. 1431
(a) * * *
(2) To implement the designations of the national marine sanctuaries, for which specific regulations appear in subpart F through subsequent subparts of this part, by regulating activities affecting them, consistent with their respective terms of designation, in order to protect, restore, preserve, manage, and thereby ensure the health, integrity, and continued availability of the conservation, recreational, ecological, historical, scientific, educational, cultural, archaeological, and aesthetic resources and qualities of these areas.
Subpart F and subsequent subparts of this part set forth the boundaries for all national marine sanctuaries.
Subpart F and subsequent subparts of this part set forth site-specific regulations applicable to the activities specified therein.
The addition reads as follows:
(a) * * *
(2) The permit procedures and criteria for all national marine sanctuaries in which the proposed activity is to take place in accordance with relevant site-specific regulations appearing in subpart F and subsequent subparts of this part.
(b) * * *
(7) Native American cultural or ceremonial activities—activities within Chumash Heritage National Marine Sanctuary that will promote or enhance local Native American cultural or ceremonial activities; or will promote or enhance education and training related to local Native American cultural or ceremonial activities.
(a)
(b) * * *
(1) * * *
(ii) Notification must be sent to the Director, Office of National Marine Sanctuaries, to the attention of the relevant Sanctuary Superintendent(s) at the address specified in subparts L through P, or subpart R through V, of this part as appropriate.
(a) * * *
(2) An applicant or a holder of a National Marine Sanctuary permit issued pursuant to § 922.30 or pursuant to site-specific regulations appearing in subparts F through V of this part;
Chumash Heritage National Marine Sanctuary (CHNMS) consists of an area of approximately 5,617 square miles (mi
In addition to the definitions found in § 922.11, the following terms are defined for purposes of this subpart:
(a) Except as specified in paragraphs (b) through (e) and paragraph (g) of this section, the following activities are prohibited and thus are unlawful for any person to conduct or to cause to be conducted:
(1) Exploring for, developing, or producing oil, gas, or minerals within the Sanctuary, except for continued oil and gas production, which includes well abandonment, of existing reservoirs under production prior to the effective date of Sanctuary designation ([EFFECTIVE DATE OF FINAL RULE]) from Platform Irene and Platform Heritage.
(2)(i) Discharging or depositing from within or into the Sanctuary, other than from a cruise ship, any material or other matter, except:
(A) Fish, fish parts, chumming materials, or bait used in or resulting from lawful fishing activities within the Sanctuary, provided that such discharge or deposit is during the conduct of lawful fishing activities within the Sanctuary;
(B) For a vessel less than 300 gross registered tons (GRT), or a vessel 300 GRT or greater without sufficient holding tank capacity to hold sewage while within the Sanctuary, clean effluent generated incidental to vessel use by an operable Type I or II marine sanitation device (U.S. Coast Guard classification) approved in accordance with section 312 of the Federal Water Pollution Control Act, as amended (FWPCA), 33 U.S.C. 1322. Vessel operators must lock all marine sanitation devices in a manner that prevents discharge or deposit of untreated sewage;
(C) Clean vessel deck wash down, clean vessel engine cooling water, clean vessel generator cooling water, clean bilge water, or anchor wash;
(D) For a vessel less than 300 GRT, or a vessel 300 GRT or greater without sufficient holding capacity to hold graywater while within the Sanctuary, clean graywater as defined by section 312 of the FWPCA;
(E) Vessel engine or generator exhaust;
(F) Beyond 3 nautical miles from shore, sewage and non-clean graywater as defined by section 312 of the FWPCA generated incidental to vessel use by a U.S. Coast Guard vessel without sufficient holding tank capacity and without a Type I or II marine sanitation device; and beyond 12 nautical miles from shore, ammunition, pyrotechnics, or other materials directly related to training for search and rescue and live ammunition activities conducted by U.S. Coast Guard vessels and aircraft;
(G) Dredged material deposited at disposal sites within the Sanctuary authorized by the U.S. Environmental Protection Agency (EPA), in consultation with the U.S. Army Corps of Engineers, prior to the effective date of Sanctuary designation ([EFFECTIVE DATE OF FINAL RULE]); or
(H) Discharges incidental and necessary to oil and gas production within or into existing reservoirs under production prior to the effective date of Sanctuary designation ([EFFECTIVE DATE OF FINAL RULE]) from Platform Irene or Platform Heritage, including well abandonment.
(ii) Discharging or depositing from within or into the Sanctuary any material or other matter from a cruise ship except clean vessel engine cooling water, clean vessel generator cooling water, vessel engine or generator exhaust, clean bilge water, or anchor wash.
(iii) Discharging or depositing from beyond the boundary of the Sanctuary any material or other matter that subsequently enters the Sanctuary and injures a Sanctuary resource or quality, except material or other matter listed in paragraphs (a)(2)(i)(A) through (F) and (a)(2)(ii) of this section.
(3) Drilling into, dredging, or otherwise altering the submerged lands of the Sanctuary; or constructing, placing, or abandoning any structure, material, or other matter on or in the submerged lands of the Sanctuary, except as incidental and necessary to:
(i) Conduct lawful fishing activities or lawful kelp harvesting;
(ii) Anchor a vessel;
(iii) Install or maintain an authorized navigational aid;
(iv) Repair, replace, or rehabilitate an existing dock, pier, breakwater, or jetty;
(v) Conduct maintenance dredging of entrance channels for harbors in existence prior to the effective date of Sanctuary designation ([EFFECTIVE DATE OF FINAL RULE]); or,
(vi) Drill, maintain, or abandon a well necessary for purposes related to oil and gas production within or into existing reservoirs under production prior to the effective date of Sanctuary designation ([EFFECTIVE DATE OF FINAL RULE]) from Platform Irene or Platform Heritage.
(vii) The exceptions listed in paragraphs (a)(3)(ii) through (vi) of this section do not apply in the Rodriguez Seamount Management Zone, the boundary of which is defined in appendix B to this subpart.
(4) Moving, removing, or injuring, or attempting to move, remove, or injure, a Sanctuary historical resource; or possessing or attempting to possess a Sanctuary historical resource, except as necessary for valid law enforcement purposes. This prohibition does not apply to, moving, removing, or injury resulting incidentally from lawful kelp harvesting or lawful fishing activities.
(5) Taking any marine mammal, sea turtle, or bird within or above the Sanctuary, except as authorized by the Marine Mammal Protection Act, as amended (MMPA), 16 U.S.C. 1361
(6) Possessing within the Sanctuary (regardless of where taken, moved, or removed from), any marine mammal, sea turtle, or bird, except as authorized by the MMPA, ESA, MBTA, by any regulation promulgated under the MMPA, ESA, or MBTA, or as necessary for valid law enforcement purposes.
(7) Deserting a vessel aground, at anchor, or adrift in the Sanctuary or leaving harmful matter aboard a grounded or deserted vessel in the Sanctuary.
(8) Attracting any white shark within the Sanctuary.
(9)(i) Moving, removing, taking, collecting, catching, harvesting, disturbing, breaking, cutting, or otherwise injuring, or attempting to move, remove, take, collect, catch, harvest, disturb, break, cut, or otherwise injure, any Sanctuary resource located more than 1,500 ft. below the sea surface within the Rodriguez Seamount Management Zone, as defined in appendix B to this subpart. This prohibition does not apply to lawful fishing, which is regulated pursuant to 50 CFR part 660.
(ii) Possessing any Sanctuary resource, the source of which is more than 1,500 ft. below the sea surface within the Rodriguez Seamount Management Zone, except as necessary for valid law enforcement purposes. This prohibition does not apply to possession of fish resulting from lawful fishing, which is regulated pursuant to 50 CFR part 660.
(10) Introducing or otherwise releasing from within or into the Sanctuary an introduced species, except striped bass (
(11) Interfering with, obstructing, delaying, or preventing an investigation, search, seizure, or disposition of seized property in connection with enforcement of the Act or any regulation or permit issued under the Act.
(b) The prohibitions in paragraphs (a)(2) through (7) and (9) of this section do not apply to an activity necessary to respond to an emergency threatening life, property, or the environment.
(c)(1) The prohibitions in paragraphs (a)(2) through (7) and (9) and (10) of this section do not apply to existing activities carried out or approved by the Department of Defense that were conducted prior to the effective date of this designation ([EFFECTIVE DATE OF FINAL RULE]), as specifically identified in section 4.9 or appendix I to the final environmental impact statement for Chumash Heritage National Marine Sanctuary (for availability, see
(2) In the event of threatened or actual destruction of, loss of, or injury to a Sanctuary resource or quality resulting from an untoward incident, including but not limited to spills and groundings caused by the Department of Defense, the Department of Defense shall promptly coordinate with the Director for the purpose of taking appropriate actions to respond to and mitigate the harm and, if practicable, restore or replace the Sanctuary resource or quality.
(d) The prohibitions in paragraphs (a)(2) through (9) of this section do not apply to any activity conducted under and in accordance with the scope, purpose, terms, and conditions of a National Marine Sanctuary general permit issued pursuant to subpart D of this part and § 922.233, or a special use permit issued pursuant to subpart D of this part.
(e) The prohibitions in paragraphs (a)(2) through (9) of this section, and paragraph (a)(10) of this section regarding any introduced species of shellfish that NOAA and the State of California have determined is non-invasive and will not cause significant adverse effects to Sanctuary resources or qualities, and that is cultivated in State waters as part of commercial shellfish aquaculture activities, do not apply to any activity authorized by any lease, permit, license, approval, or other authorization issued after the effective date of Sanctuary designation ([EFFECTIVE DATE OF FINAL RULE]) and issued by any Federal, State, or local authority of competent jurisdiction, provided that the applicant complies with § 922.36, the Director notifies the applicant and authorizing agency that the Director does not object to issuance of the authorization, and the applicant complies with any terms and conditions the Director deems necessary to protect Sanctuary resources and qualities. Amendments, renewals, and extensions of authorizations in existence on the effective date of designation constitute authorizations issued after the effective date of Sanctuary designation.
(f)(1) Notwithstanding paragraphs (d) and (e) of this section, in no event may the Director issue a National Marine Sanctuary general permit under subpart D of this part and § 922.233, or an ONMS authorization or special use permit under subpart D of this part authorizing, or otherwise approve:
(i) The exploration for, development, or production of oil, gas, or minerals within the Sanctuary;
(ii) The discharge of untreated or primary-treated sewage within the Sanctuary (except by certification, pursuant to §§ 922.10 and 922.234, of valid authorizations in existence prior to the effective date of designation ([EFFECTIVE DATE OF FINAL RULE]) and issued by other authorities of competent jurisdiction); or
(iii) The disposal of dredged material within the Sanctuary other than at sites authorized by the U.S. Environmental Protection Agency prior to the effective date of designation ([EFFECTIVE DATE
(2) Any purported authorizations issued by other authorities within the Sanctuary shall be invalid.
(g) A person may conduct an activity prohibited by paragraphs (a)(2) through (10) of this section within the Sanctuary if such activity is specifically authorized by a valid Federal, State, or local lease, permit, license, or right of subsistence use or of access that is in existence on the effective date of Sanctuary designation ([EFFECTIVE DATE OF FINAL RULE]) and within the sanctuary designated area and complies with § 922.10, provided that the holder of the lease, permit, license, or right of subsistence use or of access complies with the certification procedures for CHNMS as outlined in § 922.234.
(a) A person may conduct an activity prohibited by § 922.232(a)(2) through (9), if such activity is specifically authorized by, and conducted in accordance with the scope, purpose, terms, and conditions of, a sanctuary general permit issued under this section and subpart D of this part.
(b) Applications for permits should be addressed to the West Coast Regional Office, Office of National Marine Sanctuaries; ATTN: Superintendent, Chumash Heritage National Marine Sanctuary, 99 Pacific Street, Suite 100F, Monterey, CA 93940.
(a) To obtain a certification of an activity that is specifically authorized by a valid Federal, State, or local lease, permit, license, or right of subsistence use or access in existence on the effective date of Sanctuary designation ([EFFECTIVE DATE OF FINAL RULE]) and within the sanctuary designated area, pursuant to §§ 922.10 and 922.232(g), the holder of such authorization, permit, or right shall:
(1) Notify the Director, in writing, within 90 days of the effective date of Sanctuary designation ([EFFECTIVE DATE OF FINAL RULE]) of the existence and location of such authorization or right and requests certification of such authorization or right; and
(2) Comply with any terms and conditions on the exercise of such authorization or right imposed as a condition of certification, by the Director, to achieve the purposes for which the Sanctuary was designated.
(b) The holder shall address any requests for certifications to: West Coast Regional Office, Office of National Marine Sanctuaries; ATTN: Superintendent, Chumash Heritage National Marine Sanctuary, 99 Pacific Street, Suite 100F, Monterey, CA 93940, or send by electronic means as defined in the instructions for the ONMS permit application. A copy of the lease, permit, license, or right of subsistence use or of access must accompany the request.
(c) A holder requesting certification of an authorization or right described in § 922.232(g) may continue to conduct the activity without being in violation of Sanctuary prohibitions pending the Director's review of and decision regarding the holder's certification request, provided the holder is otherwise in compliance with this section.
(d) The Director may request additional information from the certification requester as the Director deems reasonably necessary to condition appropriately the exercise of the certified authorization or right to achieve the purposes for which the Sanctuary was designated. The Director must receive the information requested within 45 days of the date of the Director's request for information. Failure to provide the requested information within this time frame may be grounds for denial by the Director of the certification request.
(e) In considering whether to issue a certification, the Director may seek and consider the views of any other person or entity, within or outside the Federal Government, and may hold a public hearing as deemed appropriate by the Director.
(f) Upon completion of review of the authorization or right and information received with respect thereto, the Director shall communicate, in writing, any decision on a certification request or any action taken with respect to any certification made under this section, in writing, to both the holder of the certified lease, permit, license, approval, other authorization, or right, and the issuing agency, and shall set forth the reason(s) for the decision or action taken.
(g) The Director may amend, suspend, or revoke any certification issued under this section whenever continued operation would otherwise be inconsistent with any terms or conditions of the certification. Any such action shall be forwarded in writing to both the certification holder and the agency that issued the underlying lease, permit, license, or right of subsistence use or of access, and shall set forth reason(s) for the action taken.
(h) The Director may amend any certification issued under this section whenever additional information becomes available that the Director determines justifies such an amendment.
(i) The holder may appeal any action conditioning, amending, suspending, or revoking any certification in accordance with the procedures set forth in § 922.37.
(j) Any time limit prescribed in or established under this section may be extended by the Director for good cause.
(k) It is unlawful for any person to violate any terms and conditions in a certification issued under this section.
Coordinates listed in this appendix are unprojected (Geographic) and based on the North American Datum of 1983.
Coordinates listed in this table are unprojected (Geographic) and based on the North American Datum of 1983.
Commodity Futures Trading Commission.
Notice of proposed rulemaking.
The Commodity Futures Trading Commission (Commission or CFTC) is proposing amendments to its swap execution facility (SEF) regulations related to uncleared swap confirmations, as well as associated technical and conforming changes.
Comments must be received on or before October 24, 2023.
You may submit comments, identified by “Swap Confirmation Requirements for Swap Execution Facilities” and RIN number 3038-AF34, by any of the following methods:
•
•
•
Please submit your comments using only one of these methods. Submissions through the CFTC Comments Portal are encouraged.
All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse or remove any or all of your submission from
Roger Smith, Associate Chief Counsel, (202) 418-5344,
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended the Commodity Exchange Act (CEA or Act) by adding section 5h, which establishes registration requirements and core principles for SEFs.
In November 2018, the Commission issued a comprehensive proposal to amend the SEF regulatory framework.
Pursuant to section 731 of the Dodd-Frank Act, which added section 4s(i) to the CEA,
During the implementation of part 37, SEFs informed the Commission that the confirmation requirement for uncleared swaps under § 37.6(b) is operationally and technologically difficult and
The Commission proposes to amend § 37.6(b) to codify this no-action position, which would enable SEFs to incorporate such terms by reference in an uncleared swap confirmation without being required to obtain the underlying, previously negotiated agreements. Further, the Commission proposes to amend § 37.6(b), which currently requires confirmation of all terms of a swap transaction to take place at the same time as execution, to require such confirmation to take place “as soon as technologically practicable” after the execution of the swap transaction on the SEF for both cleared and uncleared swap transactions. The Commission also proposes to amend § 37.6(b) to make clear that the SEF-provided confirmation under § 37.6(b) shall legally supersede any
Finally, the Commission proposes to make certain non-substantive amendments to §§ 37.6(a)-(b) to enhance clarity.
In developing these rules, the Commission has consulted with the Securities and Exchange Commission (SEC), pursuant to section 712(a)(1) of the Dodd-Frank Act.
Commission Regulation 37.6(b) requires a SEF to provide each counterparty to a swap transaction that is entered into on or pursuant to the rules of the SEF, whether cleared or uncleared, with a “confirmation”—a written record that contains all of the terms of the transaction—at the time of execution.
For uncleared swap transactions,
The requirement that the underlying agreements be submitted to the SEF prior to execution has, however, created impractical burdens for SEFs. Based upon feedback from SEFs, the Commission understands that SEFs have encountered many issues in trying to comply with the requirement, including high financial, administrative, and logistical burdens in order to collect and maintain bilateral transaction agreements from many individual counterparties. SEFs have stated that they are unable to develop a cost-effective method to request, accept, and maintain a library of every relevant previous agreement between
Commission staff from DMO has acknowledged these technological and operational challenges and has accordingly granted no-action positions, most recently in NAL No. 17-17.
Based on its experience with the part 37 implementation, the Commission acknowledges that cleared and uncleared swap transactions raise different issues with respect to confirmation requirements
The Commission preliminarily believes, following staff's observation of SEFs and market participants operating under the existing no-action position in NAL No. 17-17 and precursor no-action letters, that proposed § 37.6(b)(1) would not compromise the legal certainty of confirmations issued by SEFs for uncleared swap transactions, and that proposed § 37.6(b)(1) is a financially and logistically appropriate alternative for SEFs to comply with the confirmation requirement under § 37.6(b) as it applies to uncleared swaps.
As more fully discussed below, the Commission expects that proposed § 37.6(b)(1) will reduce the cost of SEFs' compliance with the confirmation requirement in § 37.6(b).
Therefore, the Commission proposes to amend § 37.6(b) by adding § 37.6(b)(1) to permit SEFs to incorporate underlying, previously negotiated agreements by reference in a confirmation for an uncleared swap transaction without obtaining such incorporated agreements.
In order to avail themselves of the no-action position under NAL No. 17-17, SEFs must have rules in their rulebooks that, among other things;
In particular, SEF Core Principle 5 and the implementing part 37 regulations require, among other things, that a SEF establish and enforce rules that will allow the SEF to obtain any necessary information to perform any of the functions described in section 5h of the Act; establish and enforce rules that will allow the SEF to have the ability and authority to obtain sufficient information to allow it to fully perform its operational, risk management, governance, and regulatory functions and any requirements under part 37; have rules that allow for its examination of books and records kept by the market participants on its facility; and provide information to the Commission on request.
The Commission requests comments on all aspects of proposed § 37.6(b)(1). In particular, the Commission requests comment on the following questions:
(1) Should the Commission allow a SEF to issue a confirmation for an uncleared swap transaction that does not, as currently contemplated under § 37.6(b), include all the terms of the transaction, for example by only including in the confirmation the terms agreed to on the SEF? If so, should the Commission amend § 23.501 accordingly?
(2) Should the Commission require a SEF to establish and enforce exchange rules that specifically require participants to maintain copies of all agreements incorporated by reference into an uncleared swap confirmation?
(3) Taking into account a SEF's obligations under SEF Core Principle 5 and the associated part 37 regulations, should the Commission require a SEF to establish and enforce exchange rules specifically requiring market participants to provide the SEF upon request with a copy of any document or agreement incorporated by reference into an uncleared swap confirmation?
(4) Taking into account the Commission's authorities under § 37.5 and § 37.1000, should the Commission adopt an express requirement for a SEF to furnish to the Commission upon request a copy of any document or agreement incorporated by reference into an uncleared swap confirmation?
(5) Is the term “agreement” within proposed § 37.6(b)(1) broad enough to capture the types of documentation governing swap trading relationships that may need to be incorporated by reference into an uncleared swap confirmation?
Section 37.6(b) requires that confirmation of all the terms of a swap transaction entered into on or pursuant to the rules of a SEF must take place at the same time as execution, except for a limited exception for certain information related to accounts included in bunched orders.
The Commission believes that the proposed standard—as soon as technologically practicable after execution—would continue to promote the Commission's goals of providing swap counterparties with legal certainty in a prompt manner, while also being consistent with other Commission requirements related to swap confirmations.
In addition, for a block trade that is executed “away from” a SEF,—
The Commission believes that the proposed standard reflects existing SEF capabilities while maintaining the Commission's goal of providing swap counterparties with legal certainty for transactions. Given the Commission's understanding that SEFs are complying with the at the same time as execution timing standard in existing § 37.6(b) for non-block swap transactions or block transactions executed on the SEF, the Commission expects that the impact of the proposed as soon as technologically practicable timing standard for confirmations for such swap transactions would not be substantive.
Therefore, the Commission proposes to require a SEF to confirm the terms of a swap transaction “as soon as technologically practicable” after the execution of the swap transaction on the SEF.
The Commission requests comments on all aspects of the as soon as technologically practicable after execution standard proposed for confirmations pursuant to § 37.6(b). In particular, the Commission requests comment on the following questions:
(6) Is the Commission's proposal to require a SEF to confirm the terms of a swap transaction “as soon as technologically practicable” after the execution of the transaction on the SEF
(7) Should as soon as technologically practicable mean something different for purposes of § 37.6(b) than the definition of as soon as technologically practicable set forth at § 43.2? If so, what should the definition be?
The Commission proposes to amend § 37.6(b) to make clear that the terms of a swap confirmation issued by a SEF shall legally supersede
As a condition of relying on the no-action position in NAL No. 17-17, SEFs must have rules which state that “in the event of any inconsistency between a SEF confirmation and the underlying previously negotiated freestanding agreements, the terms of the SEF confirmation legally supersede any contradictory terms.”
The Commission requests comments on all aspects of the proposal to amend § 37.6(b) to make clear that the terms of a swap confirmation issued by a SEF “shall legally supersede any conflicting terms of a previous agreement.” In particular, the Commission requests comment on the following questions:
(8) Does the proposed amendment provide sufficient legal certainty with respect to any contradictory terms that may be contained within previous agreements that are incorporated into an uncleared swap confirmation by reference?
(9) For uncleared swaps, to avoid any conflict between the terms of the swap and the SEF's confirmation, should the Commission require that the SEF's confirmation specifically state that the terms of the confirmation legally supersede any conflicting terms in underlying previously negotiated agreements that have been incorporated by reference?
(10) Should the Commission maintain the current requirement that the confirmation legally supersede any previous agreement? Why or why not?
Section 37.6(b) provides that a SEF shall provide each counterparty to a transaction that is entered into on or pursuant to the rules of the SEF with a written record of all of the terms of the transaction.
The Commission proposes a non-substantive amendment to § 37.6(b) to change the phrase “entered into” to “executed” in order to provide greater consistency within § 37.6(b). Currently § 37.6(b) uses “entered into” and “executed” interchangeably. This non-substantive amendment would, in conjunction with the proposed non-substantive amendment to § 37.6(a) discussed below, ensure consistent use of “executed” throughout § 37.6.
Section 37.6(a) is intended to provide market participants with legal certainty with respect to swap transactions on a SEF and generally clarifies that a swap transaction entered into on or pursuant to the rules of a SEF cannot be void, voidable, subject to rescission, otherwise invalidated, or rendered unenforceable due to a violation by the SEF of section 5h of the Act or part 37 of the Commission's regulations or any proceeding that alters or supplements a rule, term or condition that governs such swap or swap transaction.
The Commission proposes a non-substantive amendment to § 37.6(a) to change the phrase “entered into” to “executed” in order to provide greater consistency within § 37.6. Currently § 37.6 uses “entered into” and “executed” interchangeably. This non-substantive amendment would amend § 37.6(a) to use “executed” and, in conjunction with the proposed non-substantive amendment to § 37.6(b) discussed above, would ensure consistent use of “executed” throughout § 37.6.
The Commission proposes two amendments to § 23.501(a)(4)(i) to conform to the proposed amendments to § 37.6(b). Section 23.501(a)(4)(i) provides that a swap transaction executed on a SEF or DCM will be deemed to satisfy the swap confirmation requirements set forth for SDs and MSPs in § 23.501(a), provided that the rules of the SEF or DCM establish that confirmation of all terms of the transaction shall take place at the same time as execution. First, the Commission proposes to clarify that the safe harbor for SDs and MSPs in § 23.501(a)(4)(i) also applies to swap transactions executed pursuant to the rules of a SEF or DCM,
The Commission requests comments on the proposed conforming changes to § 23.501(a)(4)(i).
The Commission proposes that the effective date for the final regulations be 30 days after publication of final regulations in the
The Commission requests comment on whether the proposed effective date is appropriate and, if not, the Commission further requests comment on possible alternative effective dates and the basis for any such alternative dates.
The Regulatory Flexibility Act (RFA) requires Federal agencies, in promulgating regulations, to consider whether the regulations they propose will have a significant economic impact on a substantial number of small entities and, if so, provide a regulatory flexibility analysis with respect to such impact.
The Paperwork Reduction Act of 1995, 44 U.S.C. 3501
The PRA applies to all information, regardless of form or format, whenever the government is obtaining, causing to be obtained, or soliciting information, and includes required disclosure to third parties or the public, of facts or opinions, when the information collection calls for answers to identical questions posed to, or identical reporting or recordkeeping requirements imposed on, ten or more persons.
This proposed rulemaking affects regulations that contain collections of information for which the Commission has previously received control numbers from OMB. The titles for these collections of information are “Swap Documentation, OMB control number 3038-0088” and “Core Principles and Other Requirements for Swap Execution Facilities, OMB control number 3038-0074.” This proposal, if adopted, would modify the information collection requirements associated with OMB control number 3038-0074, as discussed below. The Commission therefore is submitting this proposal to the OMB for its review in accordance with the PRA.
The Commission proposes two amendments to § 23.501(a)(4)(i) to conform to the proposed amendments to § 37.6(b). Section 23.501(a)(4)(i) provides that a swap transaction executed on a SEF or DCM will be deemed to satisfy the swap confirmation requirements set forth for SDs and MSPs in § 23.501(a), provided that the rules of the SEF or DCM establish that confirmation of all terms of the transaction shall take place at the same time as execution. First, the Commission proposes to clarify that the safe harbor for SDs and MSPs in § 23.501(a)(4)(i) also applies to swap transactions executed pursuant to the rules of a SEF or DCM,
The Commission does not believe that these proposed amendments would substantively or materially modify any existing information collection burdens. Accordingly, the Commission is retaining its existing estimates for the burden associated with the information collections under OMB Collection 3038-0088.
Under existing § 37.6(b), a SEF is required to provide each counterparty to a swap transaction, whether cleared or uncleared, that is entered into on or pursuant to the rules of the SEF, with a written “confirmation” that contains all of the terms of the transaction. With respect to an uncleared swap transaction, a SEF may comply with the requirement to include in the confirmation all of the terms of the transaction, by incorporating by reference relevant terms set forth in underlying, previously negotiated agreements between the counterparties, as long as the SEF has obtained these agreements prior to execution of the transaction.
The proposed rulemaking would add new § 37.6(b)(1), which would permit SEFs to incorporate by reference in a confirmation relevant terms set forth in underlying, previously negotiated agreements without being required to obtain these agreements.
The Commission preliminarily believes that this proposed approach would address technological and operational challenges that have prevented SEFs from fully complying with § 37.6(b), by reducing the administrative burdens for SEFs, who would not be required to request, accept, and maintain a library of every relevant previously negotiated agreement between counterparties.
As a result, the Commission believes that the proposed rulemaking would
The aggregate annual estimates for the reporting burden associated with § 37.6(b), as proposed to be amended, would be as follows:
There are no capital costs or operating and maintenance costs associated with this collection.
The Commission invites the public and other Federal agencies to comment on any aspect of the proposed information collection requirements discussed above. The Commission will consider public comments on this proposed collection of information in:
(1) Evaluating whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have a practical use;
(2) Evaluating the accuracy of the estimated burden of the proposed collection of information, including the degree to which the methodology and the assumptions that the Commission employed were valid;
(3) Enhancing the quality, utility, and clarity of the information proposed to be collected; and
(4) Minimizing the burden of the proposed information collection requirements on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological information collection techniques,
Copies of the submission from the Commission to OMB are available from the CFTC Clearance Officer, 1155 21st Street NW, Washington, DC 20581, (202) 418-5714 or from
• The Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503, Attn: Desk Officer of the Commodity Futures Trading Commission;
• (202) 395-6566 (fax); or
•
Please provide the Commission with a copy of submitted comments so that comments can be summarized and addressed in the final rulemaking, and please refer to the
Section 15(a) of the CEA
The Commission is proposing to amend certain rules in parts 23 and 37 of its regulations relating to the confirmation by CFTC-regulated exchanges, in particular SEFs, of the terms of swap transactions.
The baseline against which the Commission considers the costs and benefits of these proposed rule amendments is the statutory and regulatory requirements of the CEA and Commission regulations now in effect, in particular CEA section 5h and certain rules in parts 23 and 37 of the Commission's regulations. The Commission, however, notes that as a practical matter many SEFs and market participants have adopted some current practices based upon a no-action position provided by Commission staff that the proposed rule amendments generally would codify. As such, to the extent that SEFs and market participants have relied on this no-action position, the actual costs and benefits of the proposed rule amendments as realized in the market may not be as significant.
In some instances, it is not reasonably feasible to quantify the costs and benefits to SEFs and certain market participants with respect to certain factors, for example, market integrity. Notwithstanding these types of limitations, however, the Commission otherwise identifies and considers the costs and benefits of these proposed rule amendments in qualitative terms.
In the following consideration of costs and benefits, the Commission first identifies and discusses the benefits and costs attributable to the proposed rule amendments. The Commission, where applicable, then considers the costs and benefits of the proposed rule amendments in light of the five public interest considerations set out in § 15(a) of the CEA.
The Commission notes that this consideration of costs and benefits is based on its understanding that the swaps market functions internationally with: (1) transactions that involve U.S. entities occurring across different international jurisdictions; (2) some entities organized outside of the United States that are registered with the Commission; and (3) some entities that typically operate both within and outside the United States and that follow substantially similar business practices wherever located. Where the Commission does not specifically refer to matters of location, the discussion of costs and benefits below refers to the effects of the proposed rule amendments on all relevant swaps activity, whether based on its actual occurrence in the United States or on its connection with or effect on U.S. commerce.
The Commission generally requests comment on all aspects of its cost-benefit considerations, including the identification and assessment of any costs or benefits not discussed herein; the potential costs and benefits of the alternatives that the Commission discussed in this release; data and any other information to assist or otherwise inform the Commission's ability to quantify or qualitatively describe the costs and benefits of the proposed rule amendments; and substantiating data, statistics, and any other information to support positions posited by commenters with respect to the Commission's discussion. Commenters may also suggest other alternatives to the proposed approach where the commenters believe that the alternatives would be appropriate under the CEA and would provide a more appropriate cost-benefit profile.
Under existing § 37.6(b), a SEF is required to provide each counterparty to a swap transaction that is entered into on or pursuant to the rules of the SEF, with a written “confirmation” at the time of execution that contains all of the terms of the transaction. SEFs may satisfy the requirements under existing § 37.6(b) for uncleared swap transaction confirmations by incorporating by reference, in the confirmation, the relevant terms set forth in underlying, previously negotiated agreements between the counterparties, as long as such agreements have been submitted to the SEF prior to execution.
Absent an adoption of proposed new § 37.6(b)(1), which would allow SEFs to incorporate relevant terms set forth in such underlying agreements without being required to obtain the agreements, SEFs would need to comply with the existing requirements under § 37.6(b) for uncleared swap confirmations, notwithstanding the significant burdens of doing so. The Commission understands that the financial, administrative, and logistical burdens to collect and maintain bilateral transaction agreements from any individual counterparties would be high. SEFs have stated that they are unable to develop a cost-effective method to request, accept and maintain a library of every relevant previous agreement between counterparties.
The Commission preliminarily believes that the proposed addition of § 37.6(b)(1) should benefit both SEFs and market participants by decreasing the financial, administrative, and logistical burdens to execute an uncleared swap on a SEF. Not only would a SEF not be required to expend time and resources to gather and maintain all of the underlying relationship documentation between all possible counterparties on the SEF, but market participants would also not be required to expend time and resources in gathering and submitting this documentation to the SEF, including any amendments or updates to that documentation. Moreover, the Commission preliminarily believes that not requiring SEFs to obtain the underlying relationship documentation would eliminate associated financial, logistical and administrative burdens.
The Commission notes that these benefits are currently available to market participants through the existing no-action position provided by Commission staff in NAL No. 17-17. As such, to the extent that SEFs, and by extension market participants, have relied on the existing no-action position to avoid the above described financial, operational and logistical burdens, through the incorporation by reference of relevant terms set forth in underlying relationship documentation, they have been availing themselves of the benefits from these reduced burdens.
The Commission also recognizes that many SEFs have already expended resources to implement technological and operational changes needed to avail themselves of the no-action position under NAL No. 17-17. The proposed amendments would preclude the need to expend additional resources to negate those changes.
Further, the proposed rule amendments do not propose to change the existing requirement for a SEF to issue a confirmation for all terms of a swap transaction for uncleared swaps. To the extent that a SEF were to not issue a confirmation that includes or incorporates by reference all of the terms of an uncleared swap transaction, the counterparties to the swap may be subject to other Commission regulations that impose those obligations, and therefore, increased costs. For example, where one of the counterparties to an uncleared swap transaction is an SD or MSP, § 23.501 requires that the SD or MSP issue a confirmation for the transaction as soon as technologically practicable.
SEFs should also benefit from the proposed requirement to confirm transaction terms “as soon as technologically” practicable after execution, rather than at the same time as execution. As noted above, the Commission preliminarily believes that this proposal would continue to promote the Commission's goals of providing the swap counterparties with legal certainty in a prompt manner.
With respect to uncleared swaps, the proposed addition of § 37.6(b)(1) could reduce the financial integrity of transactions on SEFs compared to the current rule. There could be a greater risk of misunderstanding between the counterparties to a swap transaction if SEFs do not provide all the terms of a transaction at the time of execution. Even when underlying agreements are incorporated by reference, confusion could arise from issues such as multiple versions of an agreement with the same labeling, or missing sections. However, the Commission does not expect that this risk will materially reduce the integrity of the swaps market. The Commission notes that the relevant underlying agreements usually establish relationship terms between counterparties that govern all trading between them in uncleared swaps, and do not generally concern the terms of specific transactions.
To the extent that SEFs are relying on the existing no-action position provided by Commission staff in NAL No. 17-17, they could continue to implement existing industry practice related to confirmations for uncleared swap transactions which should not impose costs on SEFs. But to the extent that SEFs need to modify their rules or procedures in light of the proposed amendments, such as removing the SEF rules required as conditions under NAL No. 17-17, they may incur modest costs.
The relevant no-action position set forth in NAL No. 17-17, upon which the proposal is based, is subject to withdrawal by Commission staff. In addressing alternatives to adopting the proposed amendments to § 37.6(b), the Commission considered the costs and benefits associated with withdrawal of the no-action position in NAL No. 17-17, which would obligate SEFs and
The proposed rule amendments should continue to promote the legal certainty of swap transactions executed on SEFs. The proposed amendments to § 37.6 for uncleared swaps, and the conforming amendments set forth in this proposal, would clarify compliance requirements, consistent with the position taken by Commission staff in NAL No. 17-17, while helping to maintain the protection of market participants and the public.
The proposed amendments to § 37.6 for uncleared swaps, and the conforming amendments set forth in this proposal, would ease compliance for SEFs and market participants on a longer-term basis,
As noted above, with respect to uncleared swaps, the proposed addition of § 37.6(b)(1) could reduce the financial integrity of transactions on SEFs compared to the current rule. There could be a greater risk of misunderstanding between the counterparties to a swap transaction if SEFs do not provide all the terms of a transaction at the time of execution. Even when underlying agreements are incorporated by reference, confusion could arise from issues such as multiple versions of an agreement with the same labeling, or missing sections. However, the Commission does not expect that this risk will materially reduce the integrity of the swaps market. As noted above, the Commission notes that the relevant underlying agreements usually establish relationship terms between counterparties that govern all trading between them in uncleared swaps, and do not generally concern the terms of specific transactions. Moreover, the proposed rule amendments could encourage financial integrity of the swap markets by, among other things, providing clarity that the terms of an uncleared swap confirmation issued by a SEF supersedes any conflicting terms in underlying agreements between the counterparties that have been incorporated by reference into the confirmation.
The Commission is not aware of significant effects on the price discovery process from the proposed amendments to § 37.6, and the conforming amendments set forth in this proposal, regarding confirmations.
The proposed amendments to the confirmation requirements within § 37.6(b), and the conforming amendments set forth in this proposal, would maintain the promotion of sound risk management practices with respect to the requirement for SEFs to issue transaction confirmations,
The Commission is identifying a public interest benefit in codifying the no-action position in NAL 17-17, where the efficacy of that position has been demonstrated. In such a situation, the Commission believes it serves the public interest to engage in notice-and-comment rulemaking, where it seeks and considers the views of the public in amending its regulations, rather than for SEFs to continue to rely on a staff provided no-action position that does not bind the Commission, provides less long-term certainty, and offers a more limited opportunity for public input.
The Commission invites public comment on all aspects of its cost benefit considerations, including the discussion of the section 15(a) factors. Commenters are requested to provide data and any other information or statistics to support their position. To the extent commenters believe that the costs or benefits of any aspect of the proposed rules are reasonably quantifiable, the Commission requests that they provide data and any other information or statistics to assist the Commission in quantification.
(11) The Commission preliminarily believes that SEFs are relying on the no action position in NAL 17-17 and are not currently obtaining and maintaining previously negotiated underlying agreements that are incorporated by reference in uncleared swap transaction confirmations. Is the Commission's understanding correct or are there SEFs that have found practical ways to obtain and maintain such underlying agreements?
(12) If a SEF were required to comply with existing § 37.6(b) and obtain previously negotiated underlying agreements prior to incorporating by reference terms from such agreements in uncleared swap transaction confirmations, what costs and expenses would the SEF incur?
Section 15(b) of the CEA requires the Commission to take into consideration the public interest to be protected by the antitrust laws and endeavor to take the least anti-competitive means of achieving the objectives of the CEA, in issuing any order or adopting any Commission rule or regulation.
Confirmations, Swaps.
Swaps, Swap confirmations, Uncleared Swap Confirmations, Swap execution facilities.
For the reasons stated in the preamble, the Commodity Futures
7 U.S.C. 1a, 2, 6, 6a, 6b, 6b-1, 6c, 6p, 6r, 6s, 6t, 9, 9a, 12, 12a, 13b, 13c, 16a, 18, 19, 21.
Section 23.160 also issued under 7 U.S.C. 2(i); Sec. 721(b), Pub. L. 111-203, 124 Sta. 1641 (2010).
(a) * * *
(4) * * *
(i) Any swap transaction executed on or pursuant to the rules of a swap execution facility or designated contract market shall be deemed to satisfy the requirements of this section, provided that the rules of the swap execution facility or designated contract market establish that confirmation of all terms of the transaction shall take place as soon as technologically practicable after execution.
7 U.S.C. 1a, 2, 5, 6, 6c, 7, 7a-2, 7b-3, and 12a, as amended by Titles VII and VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376.
(a) A transaction executed on or pursuant to the rules of a swap execution facility shall not be void, voidable, subject to rescission, otherwise invalidated, or rendered unenforceable as a result of:
(1) A violation by the swap execution facility of the provisions of section 5h of the Act or this part;
(2) Any Commission proceeding to alter or supplement a rule, term, or condition under section 8a(7) of the Act or to declare an emergency under section 8a(9) of the Act; or
(3) Any other proceeding the effect of which is to:
(i) Alter or supplement a specific term or condition or trading rule or procedure; or
(ii) Require a swap execution facility to adopt a specific term or condition, trading rule or procedure, or to take or refrain from taking a specific action.
(b) A swap execution facility shall provide each counterparty to a transaction that is executed on or pursuant to the rules of the swap execution facility with a written record of all of the terms of the transaction which shall legally supersede any conflicting terms of a previous agreement and serve as a confirmation of the transaction. The confirmation of all terms of the transaction shall take place as soon as technologically practicable after execution; provided that specific customer identifiers for accounts included in bunched orders involving swaps need not be included in confirmations provided by a swap execution facility if the applicable requirements of § 1.35(b)(5) of this chapter are met.
(1) For a confirmation of an uncleared swap transaction, the swap execution facility may satisfy the requirements of this paragraph (b) by incorporating by reference terms from underlying, previously negotiated agreements governing such transaction between the counterparties, without obtaining such incorporated agreements except as otherwise necessary to fully perform its operational, risk management, governance, or regulatory functions, or any requirements under this part.
(2) [Reserved]
The following appendices will not appear in the Code of Federal Regulations.
On this matter, Chairman Behnam and Commissioners Johnson, Goldsmith Romero, Mersinger, and Pham voted in the affirmative. No Commissioner voted in the negative.
Today the Commission votes to propose amendments to Parts 23 and 37 of the Commission regulations to address longstanding issues with the uncleared swap confirmation requirements under Rule 37.6(b). During the initial implementation of Part 37, SEFs informed the CFTC that the confirmation requirement for uncleared swaps was operationally and technologically difficult and impractical to implement. The Division of Market Oversight (DMO) investigated and acknowledged these challenges and provided targeted no-action positions for SEFs with respect to certain provisions of Commission regulations throughout the last decade.
As there remains no workable solution that could effectuate the original language of the relevant rule, and the currently applicable staff letter has no explicitly set expiration date, the Commission is proposing to amend Rule 37.6(b) to codify the staff no-action position. The proposed amendment would enable SEFs to incorporate terms by reference in an uncleared swap confirmation without being required to obtain the underlying, previously negotiated agreements between the counterparties. A proposed clarification and conforming amendment to Rule 23.501 will clarify the consistent treatment of trades executed away from a SEF or DCM and permit confirmation of all terms of a swap transaction as soon as technologically practicable following execution, as opposed to requiring confirmation “at the same time as execution.”
In the aftermath of the 2008 global financial crisis, the G20 leaders met in Pittsburgh, Pennsylvania.
In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-
Section 5h of the CEA prohibits a person from operating “a facility for the trading or processing of swaps unless the facility is registered as a [SEF] or as a [DCM] under this section.”
Implementing the statutory mandate of the CEA, the Commission adopted new rules and principles for SEFs in 2013.
Part 37 sets forth the operational requirements for SEFs and trading swaps on SEFs. The Commission adopted Regulation 37.6 and, in the adopting release, explained that this regulation was “intended to provide market participants who execute swap transactions on or pursuant to the rules of a SEF with legal certainty with respect to such transactions.”
Specifically, CFTC Regulation 37.6(b) “requires, for uncleared transactions executed on or pursuant to the rules of a SEF, that the SEF `must have all terms . . . agreed to no later than execution, such that the SEF can provide a written confirmation inclusive of those terms at the time of execution and report complete, non-duplicative, and non-contradictory data to an SDR as soon as technologically practicable after execution.' ”
Since the adoption of Regulation 37.6(b), some have expressed concerns regarding the feasibility of complying with the regulation.
In March of 2017, the Commission provided relief for SEFs with respect to the following requirements: (1) SEFs' obligation to obtain documents incorporated by reference in a swap confirmation issued under Regulation 37.6(b) prior to issuing the confirmation; (2) SEFs' obligation maintain such documents as records; and (3) SEFs' obligation to report terms contained in such documents that are confirmation data.
The proposal before us today seeks to codify the no-action relief provided in NAL 17-17 and address a decade of concerns voiced by SEFs. I support the proposal and look forward to carefully considering the comments we receive to determine the best path forward to protect our markets through the stability of SEFs while balancing practical approaches to implementing our regulatory requirements. I am hopeful the comments submitted in response to the proposal will answer some of the explicit questions set out in the release text as well as support the drafting of final rules that create clarity for SEFs and our markets.
I want to thank the staff of the Division of Market Oversight and in the Office of General Counsel—Roger Smith, Nora Flood, Jake Chachkin, Dina Moussa, Carlene Kim, Laura Badian, Paul Schlichting, Kenny Wright, Stephen Kane, and Madison Lau—for their diligent and thoughtful work on these proposed amendments.
The regulation of swap markets, as mandated by Dodd-Frank Act reforms, is predicated on transparency, reporting, and recordkeeping. Swap execution facilities (SEF) registered with the CFTC are required under core principle 10 to maintain records of all activities, including a complete audit trail. Commission regulations require a SEF to provide a confirmation of transactions to counterparties, including a written record of all of the terms of the transaction, and to obtain copies of underlying, previously negotiated agreements between the counterparties.
From time to time, the Commission learns that its regulations are technologically difficult to implement. In those situations, it is prudent for the CFTC to revisit its regulations in order to keep pace with technology. Revisiting our regulations provides a permanent fix, rather than temporary no action relief that is extended over and over again, as the Commission staff have done with SEF confirmation requirements for uncleared swaps. This relief previously relieved SEFs of the requirement to obtain copies of the underlying, previously negotiated agreements between the counterparties.
As a general rule, I believe we need to be careful about proposing new rules that only codify no action relief from our regulation, particularly no action relief that has been extended for years. Instead, we should determine what we were trying to accomplish with the regulation, if we still want to accomplish that, and if there is another way to achieve that.
As the sponsor of the Technology Advisory Committee, I believe that we should be forward looking in considering technological innovations to bring the right fix when it comes to areas where there have been technological obstacles to compliance with CFTC regulations. Today, I support this rule because I support the idea that we need to fix what has become a technological obstacle.
I look forward to public comment about whether this proposed fix is the right permanent fix from a technological standpoint. I look forward to public comment on whether this fix locks in a system that may limit incentives for SEFs and other market participants to innovate using new technology that could provide copies of the underlying, previously negotiated agreements in compliance with the rule. In our risk-based regulatory system, counterparties should know who they are dealing with, and doing so requires swaps participants to proactively revisit existing documents. I am interested in public comment on whether the proposed fix would disincentivize SEFs from digitizing legacy documents and agreements, and requiring their market participants to do so as well. I am also interested in public comment about whether these digitized documents could be machine readable.
Digitized and/or machine-readable data could lower compliance costs, and increase transparency. In the Financial Data Transparency Act of 2022, which does not apply to the CFTC, other federal financial regulatory agencies will be required to
I look forward to hearing from members of industry, investor and consumer advocates, academics, and other stakeholders on these questions. I thank the staff for their work on this issue.
I support the Notice of Proposed Rulemaking on Swap Confirmation Requirements for Swap Execution Facilities (SEF Confirmation Proposal) because the Commission is finally fixing unworkable rules that have defied the reality of market structure, legal documentation, and operational processes since they were first issued in 2013. I would like to thank Roger Smith, Nora Flood, and Vince McGonagle in the Division of Market Oversight for their work on the SEF Confirmation Proposal.
As I previously stated, the Commission must take action to fix unworkable rules by codifying “perpetual” no-action relief through notice-and-comment rulemaking as required by the Administrative Procedure Act.
The Dodd-Frank Act amended the Commodity Exchange Act (CEA) to establish the SEF regulatory framework in order to reduce risk, promote transparency, and enhance market integrity for over-the-counter (OTC) derivatives.
After hearing from the public, CFTC staff provided no-action relief in 2014 that has been extended repeatedly in order to provide a practical solution that could be implemented and would still support the CFTC's public and regulatory transparency requirements. For example, the no-action relief provided that SEFs could incorporate prior agreements to a transaction by reference, instead of receiving hundreds of thousands of pages of legal agreements, such as bilateral counterparty swap trading relationship documentation, and then attaching hundreds of pages to SEF confirmations.
Once CFTC staff realized the unrealistic nature of these SEF confirmation requirements, I believe the staff very prudently issued no-action relief. And I believe that this was an appropriate exercise of no-action relief because in the rush to implement the Dodd-Frank Act, the Commission did not always get it right.
When we don't get it right, it is incumbent upon the Commission to acknowledge technical and operational issues and fix them. I look forward to public comment, particularly whether this proposal sufficiently fixes the unworkable aspects of our existing rules. Thank you.
Food and Drug Administration, HHS.
Proposed rule.
The Food and Drug Administration (FDA or we) is proposing to amend the standard of identity and standard of fill of container for canned tuna. This action partially responds to a citizen petition submitted by Bumble Bee Foods, LLC, StarKist Co., and Tri Union Seafoods, LLC (doing business as Chicken of the Sea International). We tentatively conclude that this action, if finalized, will promote honesty and fair dealing in the interest of consumers.
Either electronic or written comments on the proposed rule must be submitted by November 24, 2023.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, we will post your comment, as well as any attachments, except for
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” We will review this copy, including the claimed confidential information, in our consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jennifer Shemansky, Center for Food Safety and Applied Nutrition (HFS-820), Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-2371, or Holli Kubicki, Center for Food Safety and Applied Nutrition, Office of Regulations and Policy (HFS-024), Food and Drug Administration, 5001 Campus Dr., College Park, MD 20740, 240-402-2378.
FDA is proposing to revise the canned tuna standard of identity and standard of fill of container established at § 161.190 (21 CFR 161.190). The proposed rule, if finalized, will modernize and update these food standards and is in partial response to a citizen petition submitted by Bumble Bee Foods, LLC, StarKist Co., and Tri Union Seafoods, LLC (doing business as (dba) Chicken of the Sea International) (the petitioners). The proposed rule would:
• replace the pressed cake weight method with the drained weight method to determine the standard fill of container (see proposed § 161.190(a)(3)(ii) and (iii), (a)(7), and (c));
• revise the introductory text in § 161.190(a)(5) thereby clarifying that use of a packing medium is optional;
• remove provisions for specific flavorings and spices (
• revise § 161.190(a)(6)(ii) to allow use of safe and suitable optional ingredients in accordance with § 101.22, and remove the discussion of safe and suitable carriers, solubilizing, or dispersing ingredients that may be used in combination with a flavoring or spice ingredient currently in § 161.190(a)(6)(vii);
• revise § 161.190(a)(1) to move the optional ingredient of sodium acid pyrophosphate to proposed § 161.190(a)(6)(v) and revise § 161.190(a)(8)(vii) regarding the labeling of canned tuna products containing sodium acid pyrophosphate to update the cross-reference from paragraph (a)(1) to paragraph (a)(6)(v);
• revise the upper and lower limits of vegetable extractives under § 161.190(a)(6)(iii) pertaining to amount of vegetable broth allowed to be used as an optional ingredient;
• amend § 161.190(a)(8)(vi) for clarity and consistency with other label declaration provisions in the Code of Federal Regulations (CFR);
• add a provision at § 161.190(a)(8)(x) for clarity and consistency with food standards in 21 CFR parts 131 through 169, which include a similar provision for label declaration information;
• revise § 161.190(a)(7) to update the method for determining the Munsell value and remove the incorporation by reference text regarding the Journal of the Optical Society of America (in current § 161.190(a)(7)(iii));
• add paragraph (d) to § 161.190 to update the incorporation by reference information (currently found in § 161.190(a)(7)); and
• revise language throughout the section to improve clarity and readability.
We are issuing this proposed rule under section 401 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 341), which grants FDA the authority to establish a reasonable definition and standard of identity, a reasonable standard of quality, or reasonable standards of fill of container if such actions will promote honesty and fair dealing in the interest of consumers. There are already standards of identity and fill of container in place for canned tuna (§ 161.190(a) and (c), respectively). We tentatively conclude that revising these food standards will promote honesty and fair dealing in the interest of consumers. Allowing for
We estimate benefits of the proposed rule, if finalized. We estimate ongoing annual cost savings ranging from approximately $4 million to $15.9 million at a 3 percent discount rate, and approximately $3.9 million to $15.8 million at a 7 percent discount rate. Our primary annualized estimates are approximately $7.9 million at both the 3 percent and 7 percent discount rates. The primary estimate of the present value of total cost savings in the 10 years following any final rule that may be issued based on the proposed rule is $67.6 million at a 3 percent rate of discount and $55.4 million at a 7 percent rate of discount. Manufacturers and consumers may benefit from other provisions of the proposed rule, if finalized, but these impacts are harder to quantify.
The costs of the proposed rule, if finalized, are associated with costs to industry for reading and understanding the rule, training employees on new requirements, and the purchase of new equipment. These are one-time costs that industry incurs immediately after any final rule that may be issued based on this proposed rule passes its compliance date. When annualized over a period of 10 years, we estimate these costs range from approximately $3,800 to $6,000 at a 3 percent discount rate, and approximately $4,500 to $7,100 at a 7 percent discount rate. Our primary annualized estimates are approximately $4,900 at a 3 percent discount rate and $5,800 at a 7 percent discount rate. The primary estimate of total costs in the 10 years following any final rule that may be issued based on this proposed rule is $41,600 at a 3 percent discount rate and $40,600 at a 7 percent discount rate.
Bumble Bee Foods, LLC, StarKist Co., and Tri Union Seafoods, LLC (dba Chicken of the Sea) submitted a citizen petition (FDA-2016-P-0147) requesting that we amend § 161.190 to:
• base the standard of fill of container on the product's drained weight rather than the pressed cake weight;
• require that the net contents declaration include both the net weight and drained weight;
• provide that use of a packing medium is optional;
• permit the use of any flavoring;
• limit the amount of vegetable broth that may be added as a flavoring based on the dry weight of the vegetable extractives;
• provide that a label statement about added salt is optional; and
• specify that canned tuna is packed in hermetically sealed rigid metal cans to clarify that pouch tuna products are not covered by the standard of identity.
(See Citizen Petition from Steven Mavity, Senior Vice President, Technical Services & Corporate Quality, Bumble Bee Foods, LLC, Nabil Salib, Vice President of Operations, StarKist Co., and John DeBeer, Vice President, Tri-Union Seafoods, LLC (dba Chicken of the Sea International), to Division of Dockets Management, Food and Drug Administration, dated September 3, 2015 (“petition”) at page 1.) The proposed rule would revise the canned tuna standard of fill of container and standard of identity in partial response to the petition.
In addition to submitting a citizen petition, the petitioners submitted applications for temporary marketing permits (TMP) to market test products (designated as “canned tuna” products) that deviate from the requirements in § 161.190. We issued the temporary permits to each applicant in accordance with 21 CFR 130.17 (see 79 FR 35362, June 20, 2014). The temporary permits covered limited interstate marketing tests of products identified as “canned tuna.” These test products deviated from § 161.190 in that they did not meet the standard of fill of container and were not labeled with the statement “Below Standard in Fill” as required in § 161.190(c)(4) and 21 CFR 130.14(b). The TMPs allowed applicants to test market canned tuna products using a standard fill of container based on the drained weight rather than the pressed cake weight. The TMPs also allowed applicants to provide a net quantity of contents declaration that includes both the net and drained weight. In the
These active TMPs for canned tuna products allowed applicants to deviate from § 161.190 so the standard fill of container is based on the drained weight method rather than the pressed cake weight method. Based on input from the industry, we understand that use of the pressed weight method is outdated. Products using the drained weight method appear to have gained consumer acceptance since becoming available. Our proposed amendments to § 161.190 will modernize multiple aspects and requirements of the standards, including allowing use of the drained weight method.
Section 401 of the FD&C Act specifically states that standards are meant to promote honesty and fair dealing in the interest of the consumer. Food standards typically set forth permitted ingredients, both mandatory and optional, and sometimes specify the amount or proportion of each ingredient. Many food standards also designate the method of production. Since we established many food standards decades ago, various stakeholders have expressed concerns that many food standards are out of date and may impede innovation. The goal in updating or modernizing food standards is to maintain the basic nature and essential characteristics of standardized foods, while permitting flexibility for more modern methods, technologies, or new ingredients, as well as continued innovations (see
Amending the canned tuna standards may help modernize these food standards and may provide consumers with a wider variety of choices of tuna products. Additional choices of tuna products could lead to increased consumption. The 2020-2025 Dietary Guidelines for Americans (Ref. 1 at page 34) (see also
The proposed rule, if finalized, would incorporate by reference Definitions of Terms and Explanatory Notes from Table 1, Nominal Dimensions of Standard Test Sieves (U.S.A. Standard Series), in Official Methods of AOAC INTERNATIONAL, 22nd Ed. (2023). The Office of the Federal Register (OFR) has regulations concerning incorporation by reference (see 1 CFR part 51). These regulations require that, for a final rule, Agencies must discuss in the preamble to the rule the way in which materials that the Agency incorporates by reference are reasonably available to interested persons, and how interested parties can obtain the materials. Additionally, the preamble to the rule must summarize the material (see 1 CFR 51.5(b)).
In accordance with the OFR's requirements, the discussion in section IV.C. of this document summarizes the required provisions of the material that we propose to incorporate by reference. Interested persons may purchase a copy of the material from AOAC INTERNATIONAL (AOAC), 2275 Research Blvd., Suite 300, Rockville, MD 20850-3250, 1-800-379-2622. You may inspect a copy at Dockets Management Staff (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, 240-402-7500, between 9 a.m. and 4 p.m., Monday through Friday. AOAC INTERNATIONAL provides access to table 1 at
We are issuing this proposed rule under section 401 of the FD&C Act, which grants FDA the authority to establish a reasonable definition and standard of identity, a reasonable standard of quality, or reasonable standards of fill of container if such actions will promote honesty and fair dealing in the interest of consumers. Canned tuna is among the foods that FDA has standardized under this authority (see § 161.190). Standards of identity and fill of container were established for canned tuna in 1957 (see 22 FR 892, February 13, 1957). Although the standards have been amended several times, certain requirements appear to be outdated. We tentatively conclude that amending these requirements in the standards will promote honesty and fair dealing in the interest of consumers. Allowing for more flexibility and for the use of modern methods in the standards will allow for production of a wider range of products to meet consumer tastes and preferences.
We are proposing to amend our canned tuna standard of identity and standard of fill of container (§ 161.190). The proposed rule would allow industry to use the internationally accepted drained weight method, further clarify the standards, and permit more flexibility. The proposed rule also would further clarify whether certain ingredients are optional within the standard of identity.
The current standard of fill of container for canned tuna requires that the pressed cake weight method be used (see § 161.190(c)(1)). The petition requested, in part, that the pressed cake weight method be replaced with the drained weight method (petition at pages 1 and 9).
We agree that the pressed cake weight method should be replaced with the drained weight method. We do not agree with the petitioners' suggestion to base the drained weight method for canned tuna products solely on the AOAC Official Method 968.30 Canned Vegetables: Drained Weight Procedure (petition at page 7). This method is specific for canned vegetables and requires modification for canned tuna. We propose to use a drained weight method that is based on both the drained weight method specified in the Codex standard for canned tuna and bonito (CODEX STAN 70-1981) (Ref. 2) and the AOAC method 968.30 (Ref. 3). Although both methods are very similar, the Codex standard helps to provide necessary details to modify the AOAC method 968.30 for canned tuna.
The proposed rule would delete the text in § 161.190(c) “
We are proposing these changes because the pressed cake weight method is only required in the U.S. canned tuna standards and does not align with current industry practice in the United States. For example, the pressed cake weight method relies upon using a 3-piece can, but the current industry practice is to use a 2-piece can. In comparison, the type of packaging is irrelevant when using the drained weight method. The pressed cake weight method relies on more complex instrumentation and requires more steps than the drained weight method, resulting in a more costly procedure with a wider margin of error than the drained weight method. The pressed cake weight method is therefore more difficult to perform, more prone to human error, and may produce inconsistent results compared with the drained weight method. The drained weight method is used in the production of many other foods, both
The proposed amendments to § 161.190(c) differ from what the petition requested because we describe the drained weight method for use with canned tuna products in the standard. The proposed drained weight method is based on both the Codex standard for canned tuna and bonito (Ref. 2) and the AOAC drained weight method for canned vegetables (Ref. 3). Both the proposed drained weight method and the Codex standard contain more details than the AOAC drained weight method requested in the petition. The Codex standard gives clear, easy-to-follow instructions that are specific for canned tuna products. The proposed drained weight method aims for clarity, readability, and ease of implementation. As a result, the proposed canned tuna standard of fill incorporates much of the Codex standard, except the units are changed to include both the imperial system as well as the metric system (for example, including temperature ranges in both Fahrenheit and Celsius, and sieve sizes in inches and centimeters). However, we propose to maintain some components of the current pressed cake weight method, such as the temperature range. We are also proposing to maintain using the average weight from 24 cans but modifying it to use the average weight from a minimum of 24 containers to allow manufacturers to adjust their sampling amount for larger production volumes, if needed.
Additionally, we disagree with the petitioners' request to limit the standard to rigid metal cans (petition at pages 1, 2, and 10). The proposed drained weight method may be used for any type of hermetically sealed container (
Unlike the pressed cake weight method, the drained weight method is simple enough that a consumer could check the amount of tuna at home if they wanted to verify the amount of tuna in the package. The switch from the pressed cake weight method to the drained weight method may promote honesty and fair dealing in the interest of the consumer.
The petition requested that we provide that the use of a packing medium is optional (petition at pages 1 and 9). Under our current regulations, the use of packing media is optional (§ 161.190(a)(5)); however, to further clarify, the proposed rule would revise the introductory paragraph of § 161.190(a)(5) to read “
Under our current regulations, salt is an optional ingredient (see § 161.190(a)(6)(i)). If salt is used as an ingredient, the label of canned tuna must bear the statement “seasoned with salt” (§ 161.190(a)(8)(vi)). Alternatively, the label may bear any of the statements “salted,” “with added salt,” or “salt added” if salt is the only seasoning ingredient used. The petition requested that we make a label statement about added salt optional (petition at pages 1 and 10).
We agree that a label statement about salt should not be mandatory given that salt must be declared on the label in the ingredient statement (see section 403(i)(2) of the FD&C Act (21 U.S.C. 343(i)(2)) and § 101.4 (21 CFR 101.4(a))). We also note that salt is not a characterizing ingredient that differentiates canned tuna varieties such as those seasoned with flavorings and spices, vegetable broth, or vegetable oil(s). Consequently, we propose to amend § 161.190(a)(8)(vi) to only apply to the characterizing ingredients in § 161.190(a)(6)(ii) through (iv) and not to salt.
In addition, the proposed rule would clarify § 161.190(a)(6) so it is easily understood that salt is an optional ingredient. The proposed rule would amend the introductory paragraph in § 161.190(a)(6) to include the heading “
Our current regulations list seasonings and flavorings with which canned tuna may be seasoned or flavored (§ 161.190(a)(6)). The petition requested that FDA permit the use of any flavoring (petition at pages 1 and 9).
We agree that the canned tuna standard is restrictive regarding the use of flavorings. The proposed rule would amend § 161.190(a)(6)(ii) to permit flavorings and spices in accordance with § 101.22 as optional ingredients. The proposed rule would make corresponding revisions to § 161.190(a)(1) by changing “seasonings and flavorings” to “safe and suitable optional ingredients.” To avoid redundancy, the proposed rule would remove monosodium glutamate (currently listed in § 161.190(a)(6)(ii)), spices or spice oils or spice extracts (currently listed in § 161.190(a)(6)(iv)), garlic (currently listed in § 161.190(a)(6)(vi)), and lemon flavoring (currently listed in § 161.190(a)(6)(vii)) because these ingredients are covered under § 101.22 (Foods; labeling of spices, flavorings, colorings and chemical preservatives).
The proposed rule would remove spices or spice oils or spice extracts from § 161.190(a)(6)(iv) and would group them with flavorings and spices in § 161.190(a)(6)(ii). Spice oils and spice extracts would still be permitted as optional ingredients in canned tuna because they are covered under proposed § 161.190(a)(6)(ii). Spice oils and spice extracts are covered under natural flavorings as defined in § 101.22(a)(3).
The proposed rule also would remove hydrolyzed protein (currently listed in § 161.190(a)(6)(iii)) because hydrolyzed
The proposed rule would remove the text regarding sodium acid pyrophosphate currently in § 161.190(a)(1) and move it to proposed § 161.190(a)(6)(v). This revision would consolidate the optional ingredients in the standard and better clarify that sodium acid pyrophosphate is also an optional ingredient. The proposed rule would also revise § 161.190(a)(8)(vii) regarding labeling of canned tuna products that contain sodium acid pyrophosphate to update the cross-reference for the new location of the sodium acid phosphate optional ingredient provision from paragraph (a)(1) to paragraph (a)(6)(v). As for lemon flavoring, as stated earlier, the proposed rule would remove the lemon flavoring paragraph in § 161.190(a)(6)(vii), and it also would remove the language specific to lemon flavoring in § 161.190(a)(8)(vi) and (viii) and renumber the remaining paragraphs accordingly.
To further effectuate the changes proposed in § 161.190(a)(6)(ii) through (iv), the proposed rule would include conforming changes to the label declaration provisions in proposed § 161.190(a)(8)(vi). Specifically, we propose revising § 161.190(a)(8)(vi) to state that “[i]f the canned tuna contains one or more of the optional ingredients in paragraphs (a)(6)(ii) through (iv) of this section, the label must appropriately declare the ingredients by the common or usual name in accordance with § 101.22. If the ingredients designated in paragraph (a)(6)(iii) of this section are used, the term `vegetable broth' must be declared.” The proposed rule would also add that the label statements declare the ingredients by the common or usual name “in accordance with 21 CFR 101.22” for clarity and consistency with our other regulations (proposed § 161.190(a)(8)(vi)) (see, for example, 21 CFR 163.111(c)(3) (Chocolate liquor) and 21 CFR 163.124(c) (White chocolate)). In addition, the proposed rule would add a provision in § 161.190(a)(8)(x) that states that “Each of the ingredients used in the food must be declared on the label as required by the applicable sections of parts 101 and 130 of this chapter.” The proposed revision would be consistent with other food standards (see, for example, 21 CFR 145.175(a)(4)(iv) (Canned pears) and 21 CFR 161.145(a)(4) (Canned oysters)).
Use of additional flavor profiles, along with the use of more modern methods, may help industry in producing canned tuna products that better meet evolving tastes and consumer preferences. This may help encourage tuna consumption consistent with the seafood recommendations outlined in the 2020-2025 Dietary Guidelines for Americans (Ref. 1).
We note that a notice of proposed rulemaking, “Use of Salt Substitutes to Reduce the Sodium Content in Standardized Foods,” proposes additional changes that would amend § 161.190(a)(6)(i) to allow the use of salt substitutes, if finalized (see 88 FR 21148, April 10, 2023). Additionally, we note that a direct final rule, “Revocation of Uses of Partially Hydrogenated Oil in Foods” (see 88 FR 53764, August 9, 2023), and companion notice of proposed rulemaking, “Revocation of Uses of Partially Hydrogenated Oil in Foods; Companion Document to Direct Final Rule” (see 88 FR 53827, August 9, 2023), revised § 161.190(a)(6)(viii) to remove partially hydrogenated vegetable oil. This proposed rulemaking would redesignate § 161.190(a)(6)(viii) as § 161.190(a)(6)(iv) to accommodate other proposed changes to § 161.190(a)(6) and proposes minor editorial changes to the language in the paragraph.
Our current regulations state that canned tuna may be seasoned or flavored with vegetable broth in an amount not in excess of 5 percent of the volume capacity of the container, such broth to consist of a minimum of 0.5 percent by weight of vegetable extractives and to be prepared from two more of the following vegetables: beans, cabbage, carrots, garlic, onions, parsley, peas, potatoes, green bell peppers, red bell peppers, spinach, and tomatoes (see § 161.190(a)(6)(v)). The petition requested, among other things, that we revise this paragraph to limit the amount of vegetable broth that may be added as a flavoring based on the dry weight of the vegetable extractives, as well as revise the wording to reflect current industry practices and terminology (petition at pages 1, 3, and 10).
We generally agree with the petitioners' suggested rephrasing. Vegetable broth is no longer added directly to the can; it is added as extractives and water, separately. Shifting the range of permitted vegetable extractives would result in a reduction in the concentration of permitted vegetable broth in standardized canned tuna products.
We understand that the current upper limit of 5 percent vegetable extractives is likely not used due to flavor and gelling issues. We support lowering the upper limit of vegetable extractives to 2.5 percent as the petition requested (petition at page 3). However, we seek additional information regarding the rationale for the lower limit of 0.025 percent vegetable extractives requested in the petition (id.). The proposed rule would revise the upper limit range of vegetable extractives to 2.5 percent and remove the lower limit of vegetable extractives. The petition's requested lower limit of 0.025 percent vegetable extractives would add a small amount of vegetable extractives, similar to tuna packed in water. If a firm adds any vegetable extractives, regardless of the percentage, the firm must disclose the ingredients on the label (§ 101.4). We invite comments on the petitioners' request for a lower limit of 0.025 percent vegetable extractives (petition at page 3).
The proposed rule also would redesignate § 161.190(a)(6)(v) as § 161.190(a)(6)(iii) to accommodate other proposed changes to paragraph (a)(6) regarding optional ingredients.
The proposed rule would revise and update the method for color determination in § 161.190(a)(7). Currently, the regulation describes use of an optical comparator for determining the Munsell values for the color designations for canned tuna in § 161.190(a)(4). We propose removing the portions of § 161.190(a)(7) that are specific to the use of an optical comparator as this change will accommodate the use of electronic color meters to determine the Munsell values. Electronic color meters are likely faster, more widely used, and more objective than using an optical comparator. These proposed changes would align the level of detail for the canned tuna method for color determination with other regulations that rely on Munsell values (see,
Additionally, we propose to remove the incorporation by reference in § 161.190(a)(7)(iii) of the 1943 report regarding the spacing of Munsell colors published in the
To help with readability of the section, we propose to add a new paragraph (d) “
Currently, § 161.190(a)(7) incorporates by reference the “Official Methods of Analysis of the Association of Official Analytical Chemists,” 13th Edition (1980), Table 1, “Nominal Dimensions of Standard Test Sieves (U.S.A. Standard Series),” under the heading “Definitions of Terms and Explanatory Notes.” We propose to update the regulation to refer to the 22nd Edition of the same table. Table 1 provides information about international and USA standard sieve sizes, including sieve designations, the nominal sieve opening (in inches), and the nominal wire diameter (in millimeters) for each sieve.
We propose several updates to the contact information for access to the IBR materials. Specifically, we propose updating the National Archives and Records Administration's (NARA's) contact information by removing the phone number, revising the URL, and adding an email address. We propose adding FDA's Dockets Management Staff contact for information regarding the availability of copies of the material incorporated by reference in proposed § 161.190(d). We also propose to update the address and to add a phone number for AOAC INTERNATIONAL.
These proposed changes will ensure that the reference materials are accessible, if needed, and in accordance with the specified requirements for incorporation by reference in the CFR. We note that a notice of proposed rulemaking, “Use of Salt Substitutes to Reduce the Sodium Content in Standardized Foods,” proposes a new section (§ 161.10) for the incorporation by reference information for all of part 161 (see 88 FR 21148). There is no substantive difference between the material we propose to incorporate by reference in this proposal and the proposed material incorporated by reference in the salt substitutes proposed rule.
We are proposing additional revisions throughout the section to improve the clarity and readability of the section and to use plain language. For example, we are proposing to add paragraph headings for paragraphs (a)(1) through (8), and we are proposing editorial changes to simplify phrasing and to use consistent terminology throughout the section.
We propose that any final rule that may be issued based on this proposed rule become effective 30 days after publication of the final rule in the
The petition requested that we limit the amount of vegetable broth that may be added as a flavoring based on the dry weight of the vegetable extractives used (petition at page 1). The standard of identity currently states the vegetable extractives are not to exceed 5 percent of the volume capacity of the container, with a minimum broth consisting of 0.5 percent by weight of vegetable extractives (§ 161.190(a)(6)(v)). The petition requested that the dry weight of the vegetable extractives in the aqueous broth is at least 0.025 percent and not more than 2.5 percent of the labeled net weight of the container (petition at pages 3 and 10).
The proposed rule would revise the upper limit range of vegetable extractives to 2.5 percent but remove the lower limit of vegetable extractives (see proposed § 161.190(a)(6)(iii)). Thus, in addition to comments on the proposed rule itself, we request comments on whether there should be a lower limit of vegetable extractives and if so, whether the lower limit should be 0.025 percent as the petition requested (petition at page 3) or another percentage. Please provide data to support a lower limit.
We have examined the impacts of the proposed rule under Executive Order 12866, Executive Order 13563, Executive Order 14094, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).
Executive Orders 12866, 13563, and 14094 direct us to assess all benefits, costs, and transfers of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). Rules are “significant” under Executive Order 12866 Section 3(f)(1) (as amended by Executive Order 14094) if they “have an annual effect on the economy of $200 million or more (adjusted every 3 years by the Administrator of [the Office of Information and Regulatory Affairs (OIRA)] for changes in gross domestic product); or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, territorial, or tribal governments or communities.” OIRA has determined that this proposed rule is not a significant regulatory action under Executive Order 12866 Section 3(f)(1).
The Regulatory Flexibility Act requires us to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the proposed rule would not significantly increase costs to manufacturers, we propose to certify that the proposed rule will not have a significant economic impact on a substantial number of small entities.
The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires us to prepare a written statement, which includes estimates of anticipated impacts, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $177 million, using the most current (2022) Implicit Price Deflator for the Gross Domestic Product. This proposed rule would not result in an expenditure in any year that meets or exceeds this amount.
The proposed rule, if finalized, would amend existing requirements for the canned tuna standard of identity and standard of fill of container. These include changes to methods for determining the fill of a container, expanding the list of optional flavorings and spices, and reducing the maximum amount of vegetable broth that can be used as an ingredient. The proposed rule is in partial response to a 2015 citizen petition submitted by Bumble Bee Foods, LLC, StarKist Co., and Tri Union Seafoods, LLC (dba Chicken of the Sea).
To estimate costs and benefits associated with the proposed rule, we assume that the appropriate baseline is the state of the world with the current standard of identity and standard of fill
The costs of the proposed rule, if finalized, are associated with costs to industry for reading and understanding the rule, training employees on new requirements, and the purchase of new equipment. These are one-time costs that industry incurs immediately after any final rule that may be issued based on the proposed rule passes its compliance date. When annualized over a period of 10 years, we estimate these costs range from approximately $3,800 to $6,000 at a 3 percent discount rate, and approximately $4,500 to $7,100 at a 7 percent discount rate. Our primary annualized estimates are approximately $4,900 at a 3 percent discount rate and $5,800 at a 7 percent discount rate. The primary estimate of the present value of total costs in the 10 years following any final rule that may be issued based on the proposed rule is $41,600 at a 3 percent discount rate and $40,600 at a 7 percent discount rate.
We have developed a comprehensive Preliminary Economic Analysis of Impacts that assesses the impacts of the proposed rule. The full preliminary analysis of economic impacts is available in the docket for this proposed rule (Ref. 4) and at
We have determined under 21 CFR 25.32(a) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
While FDA tentatively concludes that this proposed rule contains no collection of information, it does refer to previously approved FDA collections of information. Therefore, clearance by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3521) is not required. The previously approved collections of information are
We have analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. We have determined that this proposed rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, we conclude that the proposed rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.
We have analyzed this proposed rule in accordance with the principles set forth in Executive Order 13175. We have tentatively determined that the proposed rule does not contain policies that would have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. FDA solicits comments from tribal officials on any potential impact on Indian Tribes from this proposed action.
The following references marked with an asterisk (*) are on display at the Dockets Management Staff (see
Food grades and standards, Frozen foods, Incorporation by reference, Seafood.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, the FDA proposes that 21 CFR part 161 be amended as follows:
21 U.S.C. 321, 341, 343, 348, 371, 379e.
The revisions and additions read as follows:
(a) * * *
(1)
(2)
(3)
(i) Solid or solid pack consists of loins freed from any surface tissue discolored by diffused hemolyzed blood, cut in transverse segments to which no free fragments are added. In containers of 1 pound or less of net contents, the segments are cut in lengths suitable for packing in one layer. In containers of more than 1 pound net contents, such segments may be cut in lengths suitable for packing in one or more layers of equal thickness. Segments are placed in the container with the planes of their transverse cut ends parallel to the ends of the container. A piece of a segment may be added if necessary to fill a container. The proportion of free flakes broken from loins in the canning process must not exceed 18 percent.
(ii) Chunk, chunks, chunk style consists of a mixture of pieces of tuna in which the original muscle structure is retained. The pieces may vary in size, but not less than 50 percent of the drained weight of the contents of the container is retained on a
(iii) Flake or flakes consist of a mixture of pieces of tuna in which more than 50 percent of the drained weight of the contents of the container will pass through a
(iv) Grated consists of a mixture of particles of tuna that have been reduced to uniform size, that will pass through a
(v) Any of the specified forms of pack of canned tuna may be smoked. Canned smoked tuna must be labeled per paragraph (a)(8)(v) of this section.
(4)
(5)
(i) Any edible vegetable oil other than olive oil, or any mixture of such oils not containing olive oil;
(ii) Olive oil; or
(iii) Water.
(6)
(i) Salt.
(ii) Flavorings and spices in accordance with § 101.22 of this chapter.
(iii) Vegetable broth added in an aqueous solution, such that the dry weight of the vegetable extractives in the broth must not be more than 2.5 percent of the labeled net weight of the container. The vegetable broth must be prepared from two or more of the following vegetables: Beans, cabbage, carrots, celery, garlic, onions, parsley, peas, potatoes, green bell peppers, red bell peppers, spinach, and tomatoes.
(iv) Edible vegetable oil, excluding olive oil. The amount of edible vegetable oil must not exceed 5 percent of the volume capacity of the container, with or without any suitable form of emulsifying and suspending ingredients that are generally recognized as safe per § 170.30 of this chapter or approved as a food additive to aid in dispersion of the oil, as seasoning in canned tuna packed in water.
(v) Sodium acid pyrophosphate added for the purpose of inhibiting the development of struvite crystals. Sodium acid pyrophosphate may be added in a quantity that must not exceed 0.5 percent by weight of the finished food.
(7)
(i) Determine the Munsell value of the sample. The standards with which comparisons are made are essentially neutral matte-finish standards, equivalent in luminous reflectance of light at a wavelength of 555 nanometers and 33.7 percent of the luminous reflectance of magnesium oxide (for Munsell value 6.3); 22.6 percent of the luminous reflectance of magnesium oxide (for Munsell value 5.3). When examining albacore designated as “white”, conduct the procedure using standards of Munsell value 6.3.
(ii) For blended tuna, vary the method by first separating the tuna flakes into the different colors before passing them through the
(8)
(iii) For canned tuna packed in vegetable oil or olive oil, the label must include the name of any optional packing medium used, as specified in paragraph (a)(5) of this section, preceded by the word “in” or the words “packed in”. If the tuna is packed in an optional vegetable oil, as specified in paragraph (a)(5)(i) of this section, the name or names of the oil or the general term “vegetable oil” may be used.
(v) If any of the specified forms of canned tuna are smoked, the word “smoked” must appear as a part of the name on the label, for example, “Smoked light tuna flakes”.
(vi) If the canned tuna contains one or more of the optional ingredients in paragraph (a)(6)(ii) through (iv) of this section, the label must appropriately declare the ingredients by the common or usual name in accordance with § 101.22 of this chapter. If the ingredients designated in paragraph (a)(6)(iii) of this section are used, the term “vegetable broth” must be declared.
(vii) If the canned tuna contains the optional ingredient sodium acid pyrophosphate as provided in paragraph (a)(6)(v) of this section, the label must bear the statement “pyrophosphate added” or “with added pyrophosphate”.
(viii) Wherever the name of the food appears on the label so conspicuously as to be easily seen under customary conditions of purchase, the names of the optional ingredients used, as specified in paragraphs (a)(8)(iii), (vi), and (vii) of this section, must immediately and conspicuously precede or follow such name without intervening, written, printed, or graphic matter except that the common name of the species of tuna fish may so intervene, but the species name “albacore” may be used only for canned tuna of that species which meets the color designation “white” as prescribed by paragraph (a)(4)(i) of this section.
(ix) Statements of optional ingredients present required by paragraph (a)(8)(vi) of this section, but not subject to the provisions of paragraph (a)(8)(viii) of this section, must be included on the label with such prominence and conspicuousness as to render them likely to be read and understood by the ordinary individual under customary conditions of purchase.
(x) Each of the ingredients used in the food must be declared on the label as required by the applicable sections of parts 101 and 130 of this chapter.
(c)
(2) Determine the drained weight of the tuna using unopened canned tuna containers left at 75 ± 5°F (or 24 ± 3 °C) for at least 12 hours immediately before testing. Empty the contents of one individual tuna container onto a previously weighed sieve and evenly distribute the contents across the bottom of the sieve. Without shifting any tuna,
If the contents of the tuna container weigh less than 3 pounds (1.36 kilograms), then a sieve with an 8-inch (20-centimeter) diameter must be used. If the contents of the tuna container weigh 3 pounds (1.36 kilograms) or more, then a sieve with a 12-inch (30-centimeter) diameter must be used. The bottom of the sieve has a woven-wire cloth mesh complying with the specifications set forth for the 2.80 mm (No. 7) sieve in the “Official Methods of AOAC INTERNATIONAL,” 22nd Ed. (2023), Table 1, “Nominal Dimensions of Standard Test Sieves (U.S.A. Standard Series),” under the heading “Definitions of Terms and Explanatory Notes,” (incorporated by reference, see paragraph (d) of this section).
(i) Determination of free flakes: If the optional form of tuna ingredient is solid pack, determine the percent of free flakes. Any flakes resulting from the drained weight procedure described in paragraph (c)(2) of this section are to be weighed as free flakes. Only fragments that were broken in the canning process are considered to be free flakes. Using a spatula, scrape free flakes gently from the outside of the drained tuna product. Weigh the aggregate free flakes that were broken from the loin segments in the canning process and calculate their percentage of the total drained weight.
(ii) Determination of particle size: If the optional form of tuna ingredient is chunks, flakes, or grated, the drained tuna product resulting from the drained weight procedure described in paragraph (c)(2) of this section, is gently separated by hand, care being taken to avoid breaking the pieces. The separated pieces are evenly distributed over the top sieve of the screen separation equipment described in paragraph (c)(2)(iii) of this section. Beginning with the top sieve, lift and drop each sieve by its open edge three times. Each time, the open edge of the sieve is lifted the full distance permitted by the device. Combine and weigh the material remaining on the top three sieves (1
(iii) The sieving device referred to in paragraph (c)(2)(ii) of this section consists of three sieves, each approximately 1 foot square, loosely mounted, one above another, in a metal frame. The mesh in the top sieve complies with the specifications for 1
(3) If canned tuna falls below the applicable standard of fill of container prescribed in paragraph (c)(1) of this section, the label must bear the general statement of substandard fill per § 130.14(b) of this chapter.
(d)
Federal Bureau of Investigation, Department of Justice.
Notice of proposed rulemaking.
The Department of Justice is proposing to promulgate regulations (“proposed rule” or “rule”) concerning the Child Protection Improvements Act of 2018 (“CPIA”). The CPIA provides a means by which authorized qualified entities can have access to national criminal history background checks for determinations of whether covered individuals have been convicted of, or are under pending indictment for, a crime that bears upon their fitness to have responsibility for the safety and well-being of children, the elderly, or individuals with disabilities. As required by the CPIA, these proposed regulations would establish the criteria to be utilized by an entity designated by the Federal Bureau of Investigation (FBI) to make these determinations.
Written comments must be postmarked and electronic comments must be submitted on or before September 25, 2023. Commenters should be aware that the electronic Federal Docket Management System will not accept comments after 11:59 p.m. eastern time on the last day of the comment period.
You may review this proposed rule on
Betsy C. Taylor, Assistant General Counsel, OGC, FBI CJIS Division, 1000 Custer Hollow Road, Module C3, Clarksburg, West Virginia 26306; Telephone: (304) 625-5429. (
Electronic comments are preferred. For comments sent via U.S. Postal Service or other commercial delivery, please do not submit duplicate electronic comments. Please confine comments to the proposed rule. All submissions received must include the agency name (FBI) and docket number or RIN for this
The CPIA, enacted as part of the Consolidated Appropriations Act, 2018 (Pub. L. 115-141) amended the National Child Protection Act/Volunteers for Children Act (“NCPA/VCA”) (34 U.S.C. 40101
Under the CPIA, the FBI conducts fingerprint-based national criminal history background checks on covered individuals upon request of a designated entity and provides the resulting information to the designated entity. Reviewing that information, the designated entity determines whether the individual has been convicted of, or is under pending indictment for, a crime bearing on the individual's fitness to have responsibility for the safety and well-being of children, the elderly, or individuals with disabilities. The designated entity then informs the qualified entity—such as an employer or volunteer organization providing care for children, the elderly, or individuals with disabilities—whether the designated entity's review has determined that the covered individual's criminal history includes a conviction or pending indictment for a crime bearing on fitness listed in § 105.34 of the proposed rule. 34 U.S.C. 40102(a)(3), (b)(4), (f)(1).
Invoking the processes described in this proposed rule would not be mandatory. Rather, the rule will provide a means for a qualified entity in a State that does not have procedures to utilize the NCPA/VCA or that does not prohibit the CPIA Program to obtain national criminal history background checks of covered individuals. The choice whether to invoke the rule's procedures will be left to the discretion of the qualified entities, subject to any other applicable legal requirements.
The CPIA requires the Attorney General to establish by rule the criteria for designated entities to use in making the determination bearing on fitness for covered individuals. 34 U.S.C. 40102(f)(2)(C). The criminal history review criteria must be based on the criteria established pursuant to section 108(a)(3)(G)(i) of the PROTECT Act, Public Law 108-21 (34 U.S.C. 40102 note) and section 658H of the Child Care and Development Block Grant Act (“CCDBGA”) of 1990 (42 U.S.C. 9858f).
A pilot project established by the PROTECT Act required that the National Center for Missing and Exploited Children (“NCMEC”) make a determination whether criminal history record information received in response to a criminal history background check indicated that a provider or volunteer had a criminal history that rendered the individual unfit to provide care to children, based upon criteria established jointly by the NCMEC and three designated nonprofit organizations—the Boys and Girls Clubs of America, the National Mentoring Partnership, and the National Council of Youth Sports. The resulting criteria established pursuant to the PROTECT Act provided that anyone who had been convicted or was under pending indictment for any of the following offenses would be considered unfit to provide care to children: (1) all felonies, (2) any lesser crime of which sexual relations is an element (including pornography); (3) any lesser crime involving cruelty to animals, (4) any lesser crime involving controlled substances, including Driving Under the Influence that may involve drugs; and (5) any lesser crime involving force or threat of force against a person.
The CCDBGA provides that a child care staff member shall be ineligible for employment by a child care provider receiving certain federal assistance if such individual:
(A) refuses to consent to the criminal background check;
(B) knowingly makes a materially false statement in connection with such criminal background check;
(C) is registered, or is required to be registered, on a State sex offender registry or repository or the National Sex Offender Registry established under the Adam Walsh Child Protection and Safety Act of 2006;
(D) has been convicted of a felony consisting of:
(1) murder, as described in 18 U.S.C. 1111;
(2) child abuse or neglect;
(3) a crime against children, including child pornography;
(4) spousal abuse;
(5) a crime involving rape or sexual assault;
(6) kidnapping;
(7) arson;
(8) physical assault or battery; or
(9) a drug-related offense committed during the preceding five years; or
(E) has been convicted of a violent misdemeanor committed as an adult against a child, including the following crimes:
(1) child abuse;
(2) child endangerment;
(3) sexual assault; or
(4) a misdemeanor involving child pornography.
The CPIA differs from the PROTECT Act pilot program and the CCDBGA in that it does not declare covered individuals to be unfit or ineligible to care for children, the elderly, or individuals with disabilities and does not limit the discretion of qualified entities as to who they will employ or allow to participate in their activities. Rather, it provides a mechanism by which qualified entities may obtain from the designated entity a determination whether a covered
Pursuant to the CPIA, the Attorney General is required to designate one or more non-federal entities to make the determinations bearing on fitness. 34 U.S.C. 40102(f)(2)(A). These designated entities will be authorized to provide national criminal history background checks for qualified entities in States that do not have procedures in place to utilize the NCPA/VCA, or in States that do not prohibit the use of the CPIA Program. The FBI will issue a Request for Proposal (“RFP”) to select those to serve as designated entities under the CPIA Program. As noted above, participation in the CPIA Program by qualified entities is voluntary, and they are not required to conduct checks of their covered individuals using these designated entities.
The FBI collects user fees for the fingerprint-based criminal history record information checks it conducts in compliance with Public Law 101-515 (now codified at 34 U.S.C. 41104). The FBI's user fees are set out in a fee schedule routinely published in the
In accordance with the CPIA, designated entities will be required to adopt a fee schedule for providing their national criminal history background checks and criminal history reviews.
As part of the evaluation criteria in the RFP, a prospective designated entity will be required to provide information on the methodology it will use to determine the “full costs” of providing the services, how their fee structure will not discourage volunteers, and the profit margin, if any, to be collected for providing these services. This information will be considered by the FBI in evaluating and making decisions regarding prospective designated entities for participation in the CPIA Program.
As noted above, 34 U.S.C. 40102(f)(2)(C) requires the Attorney General to establish by rule the criteria—based on the criteria used in a PROTECT Act pilot program and the CCDBGA—for designated entities to use under the CPIA in determining whether a covered individual's criminal history includes a crime bearing on the individual's fitness to have responsibility for the safety and well-being of children, the elderly, or individuals with disabilities. The PROTECT Act criteria, described earlier in this preamble, are in some respects most suitable as a model for crimes bearing on fitness under the CPIA because of their greater generality. For example, since the PROTECT Act criteria include all felonies, there is no need to enumerate the CCDBGA's particular covered felonies, 42 U.S.C. 9858f(c)(1)(D). However, certain features of the CCDBGA are helpful in defining the relevant offenses, including the CCDBGA's greater explicitness regarding sex offenses and offenses involving abuse, neglect, or endangerment. In addition, both the PROTECT Act criteria and the CCDBGA criteria require some adaptation for purposes of the CPIA, because the CPIA relates to qualified entities serving the elderly and individuals with disabilities, as well as child-serving entities.
The relevant crimes under the CPIA that bear upon the covered individual's fitness to have responsibility for the safety and well-being of children, the elderly, or individuals with disabilities are set forth in § 105.34 of the proposed regulation. Those crimes are as follows:
Section 105.34(1) refers to “[a]ny felony.” This is the same as the first PROTECT Act category.
Section 105.34(2) refers to crimes involving abuse, neglect, or endangerment of children, the elderly, or individuals with disabilities. This is similar to the CCDBGA's coverage of offenses of child abuse, neglect, or endangerment,
Section 105.34(3) refers to crimes involving the use, or attempted or threatened use, of force against a person. This parallels the fifth category under the PROTECT Act pilot program.
Section 105.34(4) refers to crimes involving sexual abuse, assault, or exploitation, including child pornography crimes. This is similar to the second category under the PROTECT Act pilot program, and to CCDBGA provisions appearing in 42 U.S.C. 9858f(c)(1)(D)(iii), (v), (E).
Section 105.34(5) refers to crimes on the basis of which the covered individual is registered, or is required to be registered, in the sex offender registry of a jurisdiction, or is included in the National Sex Offender Registry. This parallels the CCDBGA provision in 42 U.S.C. 9858f(c)(1)(C).
Section 105.34(6) refers to crimes involving cruelty to animals, parallel to the third PROTECT Act category.
Section 105.34(7) refers to crimes involving controlled substances, including impaired driving offenses involving drugs, which is similar to the fourth PROTECT Act category, and to the CCDBGA provision in 42 U.S.C. 9858f(c)(1)(D)(ix).
The proposed rule provides that after a designated entity evaluates a covered individual using the CPIA criteria, one of three determinations is to be returned to the qualified entity under the CPIA Program: (1) the covered individual has a conviction or is under pending indictment for a crime bearing on fitness listed in § 105.34, (2) the covered individual does not have a conviction and is not under pending indictment for a crime bearing on fitness listed in § 105.34, or (3) the covered individual may have a conviction for a crime bearing on fitness listed in § 105.34. A determination that a covered individual “may have a conviction” should be returned by the designated entity if the disposition is missing from an arrest for a crime listed in § 105.34. The “may
As noted above, the authorized qualified entities themselves will decide whether to invoke the procedures of this proposed rule in order to obtain a criminal history background check on their covered individuals regarding care for children, the elderly, or individuals with disabilities. The following discussion explains the intended process where a qualified entity is seeking such a criminal history background check pursuant to the CPIA.
Under 34 U.S.C. 40102(b), a covered individual must provide to a qualified entity located in a State a set of fingerprints and complete and sign a statement as part of a request for a national criminal history background check, including an attestation that the covered individual has not been convicted of any crime or, if the covered individual has been convicted of a crime, a description of the crime and the particulars of the conviction. In addition, covered individuals must be informed by the qualified entity of the covered individual's right to obtain a copy of any background check report by the designated entity and the process by which a covered individual may appeal those results. The statement provided by the qualified entity must also notify the covered individual that the qualified entity may elect to deny them access to a person to whom the qualified entity provides care prior to the completion of their background check. As noted above, a qualified entity also may deny a covered individual access to a person to whom the qualified entity provides care at any time based on other evaluation criteria. The designated entity must also have in effect procedures to ensure that the covered individual is notified of their right to obtain a copy of their national criminal history background check report and given notice of the opportunity to appeal and instructions on how to complete the appeals process, if the covered individual wishes to challenge the accuracy or completeness of the information contained in the background check report.
The FBI is publishing this NPRM to allow interested parties the opportunity to provide comments concerning the criteria bearing on fitness to be established under the CPIA and the procedures for requesting and obtaining the results of criminal history background checks from a designated entity.
Finally, the FBI is proposing to update and correct the authority citations in part 105.
Executive Orders 12866 (Regulatory Planning and Review) and 13563 (Improving Regulation and Regulatory Review) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility.
This proposed rule has been drafted and reviewed in accordance with Executive Order 12866, section 1(b), Principles of Regulation. The Office of Management and Budget (OMB) has determined that this rule is a significant regulatory action under section 3(f) of Executive Order 12866, and accordingly, this rule has been reviewed by the OMB. The current cost of conducting the FBI fingerprint check, as published in the
This rule will not have an annual effect on the economy of $100 million, nor will it adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities. Accordingly, this rule is not an economically significant rulemaking as defined by Executive Order 12866.
Although this rule is a significant regulatory action under Executive Order 12866, the fees for providing determinations will be set by the designated entities themselves, under the standards of the CPIA, and they will be collecting those fees for providing a service under the CPIA. There is no change in the fees being charged by the FBI.
This proposed rule will not have a substantial, direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this proposed rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.
This proposed rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988.
The Department, in accordance with the Regulatory Flexibility Act, 5 U.S.C. 605(b), has reviewed this proposed rule and, by approving it, certifies that this rule will not have a significant economic impact on a substantial number of small entities. The FBI charges a user fee in compliance with Public Law 101-515. This proposed rule imposes minimal costs on businesses, organizations, or governmental jurisdictions (whether large or small) because the submission of fingerprints for these national criminal background checks is voluntary on the part of the qualified entities. Additionally, any costs that may be borne by the current or prospective employee or volunteer
This proposed rule does not contain a mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and it will not significantly or uniquely affect small governments. Further, the statute authorizes a designated entity through this Federal program to recover only the full costs of providing such services, and the fee system to be established is to ensure that fees to qualified entities do not discourage volunteers from participating in programs to care for children, the elderly, or individuals with disabilities. Finally, fees to qualified entities not organized under section 501(c)(3) of title 26 may not be less than the total sum of the costs of the FBI and the designated entity. Therefore, no action was deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.
This proposed rule is not a major rule as defined by the Congressional Review Act, 5 U.S.C. 804. This proposed rule will not result in an annual effect on the U.S. economy of $100 million or more; a major increase in costs or prices; or have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of U.S.-based companies to compete with foreign-based companies in domestic and export markets.
The proposed rule does not contain collection of information requirements. Therefore, clearance by the OMB under the Paperwork Reduction Act, 44 U.S.C. 3501
Administrative practice and procedure, Law enforcement, Privacy.
Accordingly, for the reasons set forth in the preamble, 28 CFR part 105 is proposed to be amended as follows:
Section 113 of Pub. L. 107-71, 115 Stat. 622 (49 U.S.C. 44939); Section 6402 of Pub. L. 108-458, title VI, 118 Stat. 3755 (28 U.S.C. 534 note; editorially reclassified as 34 U.S.C. 41106); Division S, Title I, Section 101 of Pub. L. 115-141, 132 Stat. 1123 (34 U.S.C. 40101
Section 113 of Pub. L. 107-71, 115 Stat. 622 (49 U.S.C. 44939).
Section 6402 of Pub. L. 108-458, title VI, 118 Stat. 3755 (28 U.S.C. 534 note; editorially reclassified as 34 U.S.C. 41106).
Child Protection Improvements Act (Division S, Title I, Section 101 of Pub. L. 115-141, 132 Stat. 1123 (34 U.S.C. 40101
(1) Who has, seeks to have, or may have access to children, the elderly, or individuals with disabilities, served by a qualified entity; and
(2) Who—
(i) Is employed by or volunteers with, or seeks to be employed by or volunteer with, a qualified entity, or
(ii) Owns or operates, or seeks to own or operate, a qualified entity.
(a) Qualified entities located in States that do not have in effect procedures described in 34 U.S.C. 40102(a)(1), or qualified entities located in States that do not prohibit the use of the program established under the CPIA, may be provided access to national criminal history background checks on, and criminal history reviews of, covered individuals through a designated entity under an agreement with the FBI.
(b) After approval by the designated entity for participation in the CPIA Program, each participating qualified entity will determine which covered individuals will be subject to the background check. The covered individual must provide a complete set of fingerprints to the qualified entity. The covered individual also must provide a signed statement to the qualified entity containing the following:
(1) The name, address, and date of birth appearing on a valid identification document (as defined in 18 U.S.C. 1028) of the covered individual;
(2) An attestation that the covered individual has not been convicted of a crime and, if the covered individual has been convicted of a crime, a description of the crime and the particulars of the conviction;
(3) The statement must notify the covered individual that the qualified entity may request a national criminal history background check;
(4) The statement must notify the covered individual of his or her right to obtain a copy of any background check report, to challenge the accuracy or completeness of the information contained in any such report, and to obtain a prompt determination as to the validity of such challenge before a final determination is made by the designated entity as provided in § 105.37; and
(5) The statement must also notify the covered individual that prior to the completion of the background check the qualified entity may choose to deny the covered individual access to a person to whom the qualified entity provides care.
(c) Based upon the qualified entity's determination that the requirements under the CPIA are met, a qualified entity may submit to the appropriate designated entity a request, to include the fingerprints of the covered individual, for a national criminal history background check on, and a criminal history review of, a covered individual.
(a) An entity will be authorized as a designated entity through an agreement with the FBI. This agreement will specify the respective responsibilities of the designated entity and the FBI, including that the designated entity's employees receive a fingerprint-based national criminal history background check in a manner determined by the FBI, prior to access to criminal history record information.
(b) The designated entity will determine if a business or organization, whether public, private, for-profit, not-for-profit, or voluntary, meets the definition of a qualified entity.
(c) The designated entity will determine if a qualified entity is located in a State that does not have in effect procedures requiring qualified entities to contact an authorized agency of the State for a nationwide background check or if the State does not prohibit the use of the national program established under the CPIA, prior to providing access to a national criminal history background check on, and criminal history reviews of, covered individuals. A State that does not prohibit the use of the national program established under the CPIA is a State that does not have a statute or regulation prohibiting a national criminal history background check of a covered individual or a State that has determined it has procedures in place in statute or regulation but is unable to accommodate the qualified entity's request for a national criminal history background check.
(d) The designated entity national program established under the CPIA also may not be used if a Federal law requires use of a Federal national criminal history background check program.
(e) Upon receipt of an authorized qualified entity request, a designated entity shall forward the request to the FBI and the FBI shall complete a fingerprint-based check of its national criminal history background check system and provide the information received in response to the request to the appropriate designated entity.
(f) The FBI fingerprint-based check of its national criminal history record system will provide outreach to States that support record requests for employment and licensing purposes and will return State criminal history record information from the respective State criminal history database. Upon a request from a qualified entity, the designated entity may conduct a separate check of a State criminal history database. The request for a State check should be submitted by the designated entity to the appropriate State according to the applicable procedures of that State.
Upon receipt of the criminal history record information, the designated entity shall make a determination whether the covered individual has been convicted of, or is under pending indictment for, a crime that bears upon the covered individual's fitness to have responsibility for the safety and well-being of children, the elderly, or individuals with disabilities. The crimes that bear on a covered individual's fitness are:
(a) Any felony.
(b) Any crime involving abuse, neglect, or endangerment of a child, an elderly individual, or an individual with a disability.
(c) Any crime involving the use, or attempted or threatened use, of force against a person.
(d) Any crime involving sexual abuse, assault, or exploitation, including any crime involving child pornography.
(e) Any crime on the basis of which the covered individual is registered, or is required to be registered, in the sex offender registry of a jurisdiction, or is included in the National Sex Offender Registry established by 34 U.S.C. 20921(a).
(f) Any crime involving cruelty to an animal.
(g) Any crime involving a controlled substance, including any impaired driving offense involving a controlled substance.
Upon the designated entity's receipt of criminal history record information from the FBI regarding an arrest for a crime bearing on fitness described in § 105.34 that is lacking disposition data, the designated entity shall conduct research in whatever Federal, State, or local recordkeeping systems are available to obtain complete data. The designated entity also should provide any source documentation containing missing disposition data it obtains from criminal justice or law enforcement agencies to the FBI so that the FBI may update or forward to the State Identification Bureaus for appropriate updating.
(a) The designated entity shall issue one of the following determinations to the qualified entity with respect to a covered individual:
(1) The covered individual has a conviction or is under pending indictment for a crime bearing on fitness listed in § 105.34;
(2) The covered individual does not have a conviction and is not under pending indictment for a crime bearing on fitness listed in § 105.34; or
(3) The covered individual may have a conviction for a crime bearing on fitness listed in § 105.34.
(b) The designated entity shall return a determination that the covered individual may have a conviction if the covered individual has been arrested for a crime bearing on fitness listed in § 105.34 but the disposition information is missing, and there is no other conviction or pending indictment for a crime bearing on fitness listed in § 105.34 in the covered individual's criminal history record information. The “may have a conviction” determination shall be returned after the designated entity conducts its research to try to locate relevant missing disposition data as required in § 105.35.
(c) The criminal history record information provided from the FBI to the designated entity shall not be provided to the qualified entity.
(a) Upon request to the designated entity, the covered individual who is the subject of the background check shall be provided with a copy of any background check report from the designated entity, including a copy of the criminal history record information that the designated entity received from the FBI.
(b) Each designated entity must ensure that the covered individual who is the subject of the background check is provided notice of the opportunity to appeal and instructions on how to complete the appeals process.
(1) Each covered individual may appeal the results of the determination made by the designated entity to challenge the accuracy or completeness of the information contained in the background check report of the covered individual and obtain a prompt determination as to the validity of such challenge before a final determination is made.
(2) Each covered individual may appeal the information contained in the FBI criminal history record information through procedures the FBI has in place pursuant to 28 CFR part 16, subpart C, wherein the subject of a criminal history record may request production of that record to review it or to obtain a change, correction, or update of that record.
(a) Each designated entity shall set the fees to be collected under the CPIA Program at a level that will ensure the recovery of the full costs of providing all such services under the standards of the CPIA. The fee schedule by the designated entity shall be established to ensure that fees to qualified entities for background checks of covered individuals do not discourage volunteers from participating in the programs of qualified entities.
(b) The designated entity shall remit the appropriate portion of such fee to the FBI. That amount shall be the amount published in the
(c) A fee charged to a qualified entity not organized under 26 U.S.C. 501(c)(3) shall not be less than the total sum of the costs of the FBI and the designated entity.
Bureau of Ocean Energy Management, Interior.
Notice of proposed rulemaking; extension of public comment period.
The Bureau of Ocean Energy Management (BOEM) is extending the public comment period on our notice of proposed rulemaking (NPRM), “Risk Management and Financial Assurance for Outer Continental Shelf Lease and Grant Obligations,” by 10 days. Comments previously submitted do not need to be resubmitted and will be fully considered.
The comment period for the proposed rule “Risk Management and Financial Assurance for Outer Continental Shelf [OCS] Lease and Grant Obligations,” which was published on June 29, 2023, at 88 FR 42136, is extended by 10 days. Online comments submitted at
The publicly available documents relevant to this action are available for public inspection electronically at
•
•
Kelley Spence, Office of Regulations, BOEM, at telephone number 984-298-7345 or email address
On June 29, 2023, BOEM published the proposed rule “Risk Management and Financial Assurance for [OCS] Lease and Grant Obligations.” 88 FR 42136. That proposed rule would modify the criteria for determining whether oil, gas, and sulfur lessees, right-of-use and easement (RUE) grant holders, and pipeline right-of-way grant holders may be required to provide financial assurance above the current regulatorily prescribed base financial assurance to ensure compliance with their Outer Continental Shelf Lands Act obligations. This proposed rule would also remove existing restrictive provisions for third-party guarantees and decommissioning accounts and would add new criteria under which a bond or third-party guarantee that was provided as supplemental financial assurance may be canceled. Additionally, this proposed rule would clarify financial assurance requirements for RUEs serving Federal leases. With this notice, we are extending the public comment period on the NPRM from August 28, 2023, to September 7, 2023.
You may submit your comments and materials by one of the methods listed in the
Coast Guard, DHS.
Supplemental notice of proposed rulemaking.
The Coast Guard proposes to modify the operating schedule that governs the Metro-North (Cos Cob) Bridge, across Mianus River, mile 1.0, at Greenwich, CT. The bridge owner, Metro-North Railroad (MNR), submitted a request on May 5, 2022 to modify the regulation to align with the Metro-North “WALK” Bridge train schedule and avoid bridge openings during peak transit hours. It is expected that this change to the regulations will better serve the needs of the community while continuing to meet the reasonable needs of navigation. We invite your comments on this proposed rulemaking. The original notice of proposed rulemaking did not accurately reflect the owner's request. As such, the Coast Guard is issuing a supplemenal notice of proposed rulemaking to accurately describe the owner's request and proposed changes to the existing regulation.
Comments and related material must reach the Coast Guard on or before September 25, 2023.
You may submit comments identified by docket number USCG-2022-0520 using Federal Decision Making Portal at
See the “Public Participation and Request for Comments” portion of the
If you have questions on this proposed rule, call or email Ms. Stephanie E. Lopez, First Coast Guard District, Project Officer, telephone 212-514-4335, email
The Metro-North (Cos Cob) Bridge at mile 1.0, across Mianus River, Greenwich, CT, has a vertical clearance of 20 feet at mean high water and a horizontal clearance of approximately 67 feet. Waterway users include recreational and commercial vessels, including fishing vessels.
The existing drawbridge operating regulations are listed at 33 CFR 117.209. Under the current regulation, the draw shall open on signal from 5 a.m. to 9 p.m. but no later than 20 minutes after the signal to open unless a train is scheduled to cross. Once the train scheduled to cross has passed the Greenwich or Riverside stations, the bridge will open once the train has made passage. From April 1 through October 31, from 9 p.m. to 5 a.m., the bridge will open after at least a four-hour advance notice is given. From November 1 through March 30, from 9 p.m. to 5 a.m., the bridge will open after at least a twenty-four-hour advance notice is given.
MNR is requesting the modification of the requirements in 33 CFR part 117.209 to align with the existing requirements for the Metro-North “WALK” Bridge, across the Norwalk River, at mile 0.1.
The Cos Cob Bridge is located at one of the busiest rail segments in the United States and the Northeast Corridor. Openings at Cos Cob Bridge, between the calendar years of 2019 and 2021, resulted in seventy-one (71) delays to MNR train service. A delay due to a bridge opening has cascading affects, resulting in multiple delayed and late trains. Delays due to the openings of Cos Cob Bridge were notably high among the drawbridges on MNR service territory. Aligning the Cos Cob Bridge regulation with the WALK Bridge regulation 33 CFR 117.217 (b) provides a balance between railroad operations and vessels interest in waterway passage.
The supplemental proposed rule provides the draw to open on signal between 4:30 a.m. and 9 p.m. after at least a two-hour advance notice is given via marine radio or telephone. The bridge will not open from 5:45 a.m. through 9:45 a.m. and from 4 p.m. through 8 p.m. From 9 p.m. through 4:30 a.m. the draw shall open on signal after at least a four-hour advance notice is given via marine radio or telephone. A delay in opening the draw not to exceed 10 minutes may occur when a train scheduled to cross the bridge without stopping has entered the drawbridge lock. The reason for these changes is to minimize train delays while balancing the interests of vessels in the waterway.
We developed this supplemental proposed rule after considering numerous statutes and Executive Orders related to rulemaking. A summary of our analysis based on these statutes and Executive Orders follows.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This SNPRM has not been designated a “significant regulatory action,” under Executive Order 12866, as amended by Executive Order 14094 (Modernizing Regulatory Review). Accordingly, the SNPRM has not been reviewed by the Office of Management and Budget (OMB).
This regulatory action determination is based on the ability that vessels can still transit the bridge given advanced notice.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this supplemental proposed rule would not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the bridge may be small entities, for the reasons stated in section IV.A. above this supplemental proposed rule would not have a significant economic impact on any vessel owner or operator.
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520.).
A rule has implications for federalism under Executive Order 13132 (Federalism), if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this supplemental proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this supplemental proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this supplemental proposed rule will not result in such an expenditure, we do discuss the effects of this supplemental proposed rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01, Rev.1, associated implementing instructions, and Environmental Planning Policy COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f). The Coast Guard has determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule promulgates the operating regulations or procedures for drawbridges. Normally such actions are categorically excluded from further review, under paragraph L49, of Chapter 3, Table 3-1 of the U.S. Coast Guard Environmental Planning Implementation Procedures.
Neither a Record of Environmental Consideration nor a Memorandum for the Record are required for this rule. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
We view public participation as essential to effective rulemaking, and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.
We encourage you to submit comments through the Federal Decision Making Portal at
To view documents mentioned in this proposed rule as being available in the docket, find the docket as described in the previous paragraph, and then select “Supporting & Related Material” in the Document Type column. Public comments will also be placed in our online docket and can be viewed by following instructions on the
We accept anonymous comments. Comments we post to
Bridges.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 117 as follows:
33 U.S.C. 499; 33 CFR 1.05-1; and DHS Delegation No. 00170.1, Revision No. 01.3.
The draw of the Metro-North (Cos Cob) bridge, mile 1.0 at Greenwich, will operate as follows:
(a) The draw will open on signal between 4:30 a.m. and 9 p.m. after at least a two-hour advance notice is given; except that, from 5:45 a.m. through 9:45 a.m. and from 4 p.m. through 8 p.m., Monday through Friday excluding holidays, the draw need not open for the passage of vessel traffic unless an emergency exists.
(b) From 9 p.m. through 4:30 a.m. the draw will open on signal after at least a four-hour advance notice is given.
(c) A delay in opening the draw not to exceed 10 minutes may occur when a train scheduled to cross the bridge without stopping has entered the drawbridge lock.
(d) Requests for bridge openings may be made by calling the bridge via marine radio VHF FM Channel 13 or the telephone number posted at the bridge.
Coast Guard, DHS.
Notice of proposed rulemaking.
The Coast Guard proposes to modify the operating schedule that governs the Atlantic Beach Bridge across the Reynolds Channel, mile 0.4, at Atlantic Beach, NY. The bridge owner, Nassau County Bridge Authority, submitted a request on September 22, 2022 to modify the regulation to decrease the amount of openings on signal from October through May. It is expected that this change to the regulations will better serve the needs of the community while continuing to meet the reasonable needs of navigation. We invite your comments on this proposed rulemaking.
Comments and relate material must reach the Coast Guard on or before September 25, 2023.
You may submit comments identified by docket number USCG-2022-0854 using Federal Decision Making Portal at
See the “Public Participation and Request for Comments” portion of the
If you have questions on this proposed rule, call or email Ms. Stephanie E. Lopez, First Coast Guard District, Project Officer, telephone 212-514-4335, email
The Atlantic Beach Bridge at mile 0.4, across Reynolds Channel, Atlantic Beach, NY, has a vertical clearance of 25 feet at mean high water and a horizontal clearance of 125 feet. Waterway users include recreational and commercial vessels, including fishing vessels.
The existing drawbridge operating regulations are listed at 33 CFR 117.799(e). Under the current regulation, the bridge shall open on signal from October 1 through May 14. Nassau County is requesting the bridge shall open on signal from 8 a.m. to midnight October 1 through May 14; and from midnight to 8 a.m. year-round the draw shall open on signal if at least eight hours advance notice is given.
The Reynolds Channel is transited by recreational vessels and commercial vessels. In recent years, a significant amount of industrial and commercial business has closed along the waterfront. This change has caused a decrease in the amount of bridge opening requests from midnight to 8 a.m.
Nassau County Bridge Authority held two public meetings on August 18, 2022 and August 25, 2022. No one from the public attended.
The proposed rule provides the draw to open on signal from 8 a.m. to midnight October 1 through May 14; and from midnight to 8 a.m. year-round the draw shall open on signal if at least eight hours notice is given. The reason for these changes is to reduce openings on signal during off peak hours due to a significant reduction of commercial business on the waterway.
We developed this proposed rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on these statutes and we discuss First Amendment rights of protestors to the end of Executive order.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This NPRM has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, the NPRM has not been reviewed by the Office of Management and Budget (OMB).
This regulatory action determination is based on the ability that vessels can still transit the bridge given advanced notice.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule would not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the bridge may be small entities, for the reasons stated in section IV.A. above, this proposed rule would not have a significant economic impact on any vessel owner or operator
If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rulemaking would have a significant economic impact on it, please submit a comment (see
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rulemaking would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520.).
A rule has implications for federalism under Executive Order 13132 (Federalism), if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this proposed rule does not have tribal implications under Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments) because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this proposed rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this proposed rule will not result in such an expenditure, we do discuss the effects of this proposed rule elsewhere in this preamble.
We have analyzed this proposed rule under Department of Homeland Security Management Directive 023-01, Rev.1, associated implementing instructions, and Environmental Planning Policy COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f). The Coast Guard has determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule promulgates the operating regulations or procedures for drawbridges. Normally such actions are categorically excluded from further review, under paragraph L49, of Chapter 3, Table 3-1 of the U.S. Coast Guard Environmental Planning Implementation Procedures.
Neither a Record of Environmental Consideration nor a Memorandum for the Record are required for this proposed rule. We seek any comments or information that may lead to the discovery of a significant environmental impact from this proposed rule.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
We view public participation as essential to effective rulemaking and will consider all comments and material received during the comment period. Your comment can help shape the outcome of this rulemaking. If you submit a comment, please include the docket number for this rulemaking, indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation.
We encourage you to submit comments through the Federal Decision Making Portal at
To view documents mentioned in this proposed rule as being available in the docket, find the docket as described in the previous paragraph, and then select “Supporting & Related Material” in the Document Type column. Public comments will also be placed in our online docket and can be viewed by following instructions on the
We accept anonymous comments. Comments we post to
Bridges.
For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 117 as follows:
33 U.S.C. 499; 33 CFR 1.05-1; DHS Delegation No. 00170.1, Revision No. 01.3.
(e) The draw of the Atlantic Beach Bridge across Reynolds Channel, mile 0.4, shall operate as follows:
(1) From October 1 through May 14 the draw shall open on signal from 8 a.m. to midnight.
(2) From midnight to 8 a.m. year-round, the draw shall open on signal if at least eight hours notice is given.
(3) From May 15 through September 30, except that it need be opened only on the hour and half-hour from 4 p.m. to 7 p.m. on weekdays and from 11 a.m. to 9 p.m. on Saturdays, Sundays, Memorial Day, Independence Day, and Labor Day.
(4) From May 15 through September 30, from two hours before to one hour after predicted high tide. Predicted high tide occurs 10 minutes earlier than that predicted for Sandy Hook, as given in the tide table published by the National Oceanic and Atmospheric Administration.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve the regional haze state implementation plan (SIP) revision submitted by the State of Maryland on February 8, 2022, as satisfying applicable requirements under the Clean Air Act (CAA) and EPA's Regional Haze Rule for the program's second implementation period. Maryland's SIP submission addresses the requirement that states must periodically revise their long-term strategies for making reasonable progress towards the national goal of preventing any future, and remedying any existing, anthropogenic impairment of visibility, including regional haze, in mandatory Class I Federal areas. The SIP submission also addresses other applicable requirements for the second implementation period of the regional haze program. The EPA is taking this action pursuant to sections 110 and 169A of the Clean Air Act.
Written comments must be received on or before September 25, 2023.
Submit your comments, identified by Docket ID No. EPA-R03-OAR-2022-0912 at
Adam Yarina, U.S. Environmental Protection Agency, Region 3, 1600 John F. Kennedy Boulevard, Philadelphia, Pennsylvania 19103-2852, at (215) 814-2108, or by email at
On February 8, 2022, the Maryland Department of the Environment (MDE) submitted a revision to its SIP to address regional haze for the second implementation period. MDE made this SIP submission to satisfy the requirements of the CAA's regional haze
In the 1977 CAA Amendments, Congress created a program for protecting visibility in the nation's mandatory Class I Federal areas, which include certain national parks and wilderness areas.
Regional haze is visibility impairment that is produced by a multitude of anthropogenic sources and activities which are located across a broad geographic area and that emit pollutants that impair visibility. Visibility impairing pollutants include fine and coarse particulate matter (PM) (
To address regional haze visibility impairment, the 1999 RHR established an iterative planning process that requires both states in which Class I areas are located and states “the emissions from which may reasonably be anticipated to cause or contribute to any impairment of visibility” in a Class I area to periodically submit SIP revisions to address such impairment. CAA 169A(b)(2);
Much of the focus in the first implementation period of the regional haze program, which ran from 2007 through 2018, was on satisfying states' BART obligations. First implementation period SIPs were additionally required to contain long-term strategies for making reasonable progress toward the national visibility goal, of which BART is one component. The core required elements for the first implementation period SIPs (other than BART) are laid out in 40 CFR 51.308(d). Those provisions required that states containing Class I areas establish reasonable progress goals (RPGs) that are measured in deciviews and reflect the anticipated visibility conditions at the end of the implementation period including from implementation of states' long-term strategies. The first planning period RPGs were required to provide for an improvement in visibility for the most impaired days over the period of the implementation plan and ensure no degradation in visibility for the least impaired days over the same period. In establishing the RPGs for any Class I area in a state, the state was required to consider four statutory factors: the costs of compliance, the time necessary for compliance, the energy and non-air quality environmental impacts of compliance, and the remaining useful life of any potentially affected sources. CAA 169A(g)(1); 40 CFR 51.308(d)(1).
States were also required to calculate baseline (using the five year period of 2000-2004) and natural visibility conditions (
On January 10, 2017, the EPA promulgated revisions to the RHR, (82 FR 3078, January 10, 2017), that apply for the second and subsequent implementation periods. The 2017 rulemaking made several changes to the requirements for regional haze SIPs to clarify States' obligations and streamline certain regional haze requirements. The revisions to the regional haze program for the second and subsequent implementation periods focused on the requirement that States' SIPs contain long-term strategies for making reasonable progress towards the national visibility goal. The reasonable progress requirements as revised in the 2017 rulemaking (referred to here as the 2017 RHR Revisions) are codified at 40 CFR 51.308(f). Among other changes, the 2017 RHR Revisions adjusted the deadline for States to submit their second implementation period SIPs from July 31, 2018, to July 31, 2021, clarified the order of analysis and the relationship between RPGs and the long-term strategy, and focused on making visibility improvements on the days with the most
The EPA provided guidance to the states for their second implementation period SIP submissions in the preamble to the 2017 RHR Revisions as well as in subsequent, stand-alone guidance documents. In August 2019, the EPA issued “Guidance on Regional Haze State Implementation Plans for the Second Implementation Period” (“2019 Guidance”).
As previously explained in the 2021 Clarifications Memo, EPA intends the second implementation period of the regional haze program to secure meaningful reductions in visibility impairing pollutants that build on the significant progress states have achieved to date. The Agency also recognizes that analyses regarding reasonable progress are state-specific and that, based on states' and sources' individual circumstances, what constitutes reasonable reductions in visibility impairing pollutants will vary from state-to-state. While there exist many opportunities for states to leverage both ongoing and upcoming emission reductions under other CAA programs, the Agency expects states to undertake rigorous reasonable progress analyses that identify further opportunities to advance the national visibility goal consistent with the statutory and regulatory requirements. See generally 2021 Clarifications Memo. This is consistent with Congress's determination that a visibility protection program is needed in addition to the CAA's National Ambient Air Quality Standards and Prevention of Significant Deterioration programs, as
Because the air pollutants and pollution affecting visibility in Class I areas can be transported over long distances, successful implementation of the regional haze program requires long-term, regional coordination among multiple jurisdictions and agencies that have responsibility for Class I areas and the emissions that impact visibility in those areas. In order to address regional haze, states need to develop strategies in coordination with one another, considering the effect of emissions from one jurisdiction on the air quality in another. Five regional planning organizations (RPOs),
The Mid-Atlantic/Northeast Visibility Union (MANE-VU), one of the five RPOs described above, is a collaborative effort of state governments, tribal governments, and various Federal agencies established to initiate and coordinate activities associated with the management of regional haze, visibility, and other air quality issues in the Mid-Atlantic and Northeast corridor of the United States. Member states and tribal governments (listed alphabetically) include: Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Penobscot Indian Nation, Rhode Island, St. Regis Mohawk Tribe, and Vermont. The Federal partner members of MANE-VU are EPA, U.S. National Parks Service (NPS), U.S. Fish and Wildlife Service (FWS), and U.S. Forest Service (USFS).
Under the CAA and EPA's regulations, all 50 states, the District of Columbia, and the U.S. Virgin Islands are required to submit regional haze SIPs satisfying the applicable requirements for the second implementation period of the regional haze program by July 31, 2021. Each state's SIP must contain a long-term strategy for making reasonable progress toward meeting the national goal of remedying any existing and preventing any future anthropogenic visibility impairment in Class I areas. CAA 169A(b)(2)(B). To this end, 40 CFR 51.308(f) lays out the process by which states determine what constitutes their long-term strategies, with the order of the requirements in 40 CFR 51.308(f)(1) through (3) generally mirroring the order of the steps in the reasonable progress analysis
In addition to satisfying the requirements at 40 CFR 51.308(f) related to reasonable progress, the regional haze SIP submissions revisions due by July 31, 2021, for the second implementation period must address the requirements in 40 CFR 51.308(g)(1) through (5) pertaining to periodic reports describing progress towards the RPGs, 40 CFR 51.308(f)(5), as well as requirements for FLM consultation that apply to all visibility protection SIPs and SIP revisions. 40 CFR 51.308(i).
A state must submit its regional haze SIP and subsequent SIP revisions to the EPA according to the requirements applicable to all SIP revisions under the CAA and EPA's regulations. See CAA 169(b)(2); CAA 110(a). Upon EPA approval, a SIP is enforceable by the Agency and the public under the CAA. If EPA finds that a state fails to make a required SIP revision, or if the EPA finds that a state's SIP is incomplete or if disapproves the SIP, the Agency must promulgate a federal implementation plan (FIP) that satisfies the applicable requirements. CAA 110(c)(1).
The first step in developing a regional haze SIP is for a state to determine which Class I areas, in addition to those within its borders, “may be affected” by emissions from within the state. In the 1999 RHR, the EPA determined that all
A state must determine which Class I areas must be addressed by its SIP by evaluating the total emissions of visibility impairing pollutants from all sources within the state. While the RHR does not require this evaluation to be conducted in any particular manner, EPA's 2019 Guidance provides recommendations for how such an assessment might be accomplished, including by, where appropriate, using the determinations previously made for the first implementation period. 2019 Guidance at 8-9. In addition, the determination of which Class I areas may be affected by a state's emissions is subject to the requirement in 40 CFR 51.308(f)(2)(iii) to “document the technical basis, including modeling, monitoring, cost, engineering, and emissions information, on which the State is relying to determine the emission reduction measures that are necessary to make reasonable progress in each mandatory Class I Federal area it affects.”
As part of assessing whether a SIP submission for the second implementation period is providing for reasonable progress towards the national visibility goal, the RHR contains requirements in 40 CFR 51.308(f)(1) related to tracking visibility improvement over time. The requirements of this subsection apply only to states having Class I areas within their borders; the required calculations must be made for each such Class I area. EPA's 2018 Visibility Tracking Guidance
The RHR requires tracking of visibility conditions on two sets of days: the clearest and the most impaired days. Visibility conditions for both sets of days are expressed as the average deciview index for the relevant five-year period (the period representing baseline or current visibility conditions). The RHR provides that the relevant sets of days for visibility tracking purposes are the 20% clearest (the 20% of monitored days in a calendar year with the lowest values of the deciview index) and 20% most impaired days (the 20% of monitored days in a calendar year with the highest amounts of anthropogenic visibility impairment).
Using the data for the set of most impaired days only, states must plot a line between visibility conditions in the baseline period and natural visibility conditions for each Class I area to determine the URP—the amount of visibility improvement, measured in deciviews, that would need to be achieved during each implementation period in order to achieve natural visibility conditions by the end of 2064. The URP is used in later steps of the reasonable progress analysis for informational purposes and to provide a non-enforceable benchmark against which to assess a Class I area's rate of visibility improvement.
EPA's 2018 Visibility Tracking Guidance can be used to help satisfy the 40 CFR 51.308(f)(1) requirements, including in developing information on baseline, current, and natural visibility conditions, and in making optional adjustments to the URP. In addition, the 2020 Data Completeness Memo provides recommendations on the data completeness language referenced in 40 CFR 51.308(f)(1)(i) and provides updated natural conditions estimates for each Class I area.
The core component of a regional haze SIP submission is a long-term strategy that addresses regional haze in each Class I area within a state's borders and each Class I area that may be affected by emissions from the state. The long-term strategy “must include the enforceable emissions limitations, compliance schedules, and other measures that are necessary to make reasonable progress, as determined pursuant to (f)(2)(i) through (iv).” 40 CFR 51.308(f)(2). The amount of progress that is “reasonable progress” is based on applying the four statutory factors in CAA section 169A(g)(1) in an evaluation of potential control options for sources of visibility impairing pollutants, which is referred to as a “four-factor” analysis. The outcome of that analysis is the emission reduction measures that a particular source or group of sources needs to implement in order to make reasonable progress
Section 51.308(f)(2)(i) provides the requirements for the four-factor analysis. The first step of this analysis entails selecting the sources to be evaluated for emission reduction measures; to this end, the RHR requires states to consider “major and minor stationary sources or groups of sources, mobile sources, and area sources” of visibility impairing pollutants for potential four-factor control analysis. 40 CFR 51.308(f)(2)(i). A threshold question at this step is which visibility impairing pollutants will be analyzed. As EPA previously explained, consistent with the first implementation period, EPA generally expects that each state will analyze at least SO
While states have the option to analyze
EPA explained in the 2021 Clarifications Memo that each state has an obligation to submit a long-term strategy that addresses the regional haze visibility impairment that results from emissions from within that state. Thus, source selection should focus on the in-state contribution to visibility impairment and be designed to capture a meaningful portion of the state's total contribution to visibility impairment in Class I areas. A state should not decline to select its largest in-state sources on the basis that there are even larger out-of-state contributors. 2021 Clarifications Memo at 4.
Thus, while states have discretion to choose any source selection methodology that is reasonable, whatever choices they make should be reasonably explained. To this end, 40 CFR 51.308(f)(2)(i) requires that a state's SIP submission include “a description of the criteria it used to determine which sources or groups of sources it evaluated.” The technical basis for source selection, which may include methods for quantifying potential visibility impacts such as emissions divided by distance metrics, trajectory analyses, residence time analyses, and/or photochemical modeling, must also be appropriately documented, as required by 40 CFR 51.308(f)(2)(iii).
Once a state has selected the set of sources, the next step is to determine the emissions reduction measures for those sources that are necessary to make reasonable progress for the second implementation period.
EPA's 2021 Clarifications Memo provides further guidance on what constitutes a reasonable set of control options for consideration: “A reasonable four-factor analysis will consider the full range of potentially reasonable options for reducing emissions.” 2021 Clarifications Memo at 7. In addition to add-on controls and other retrofits (
After identifying a reasonable set of potential control options for the sources it has selected, a state then collects information on the four factors with regard to each option identified. The EPA has also explained that, in addition to the four statutory factors, states have flexibility under the CAA and RHR to reasonably consider visibility benefits as an additional factor alongside the four statutory factors.
As explained above, 40 CFR 51.308(f)(2)(i) requires states to determine the emission reduction measures for sources that are necessary to make reasonable progress by considering the four factors. Pursuant to 40 CFR 51.308(f)(2), measures that are necessary to make reasonable progress towards the national visibility goal must be included in a state's long-term strategy and in its SIP.
As with source selection, the characterization of information on each of the factors is also subject to the documentation requirement in 40 CFR 51.308(f)(2)(iii). The reasonable progress analysis, including source selection, information gathering, characterization of the four statutory factors (and potentially visibility), balancing of the four factors, and selection of the emission reduction measures that represent reasonable progress, is a technically complex exercise, but also a flexible one that provides states with bounded discretion to design and implement approaches appropriate to their circumstances. Given this flexibility, 40 CFR 51.308(f)(2)(iii) plays an important function in requiring a state to document the technical basis for its decision making so that the public and the EPA can comprehend and evaluate the information and analysis the state relied upon to determine what emission reduction measures must be in place to make reasonable progress. The technical documentation must include the modeling, monitoring, cost, engineering, and emissions information on which the state relied to determine the measures necessary to make reasonable progress. This documentation requirement can be met through the provision of and reliance on technical analyses developed through a regional planning process, so long as that process and its output has been approved by all state participants. In addition to the explicit regulatory requirement to document the technical basis of their reasonable progress determinations, states are also subject to the general principle that those determinations must be reasonably moored to the statute.
The four statutory factors (and potentially visibility) are used to determine what emission reduction measures for selected sources must be included in a state's long-term strategy for making reasonable progress. Additionally, the RHR at 40 CFR 51.3108(f)(2)(iv) separately provides five “additional factors”
Because the air pollution that causes regional haze crosses state boundaries, 40 CFR 51.308(f)(2)(ii) requires a state to consult with other states that also have emissions that are reasonably anticipated to contribute to visibility impairment in a given Class I area. Consultation allows for each state that impacts visibility in an area to share whatever technical information, analyses, and control determinations may be necessary to develop coordinated emission management strategies. This coordination may be managed through inter- and intra-RPO consultation and the development of regional emissions strategies; additional consultations between states outside of RPO processes may also occur. If a state, pursuant to consultation, agrees that certain measures (
Reasonable progress goals “measure the progress that is projected to be achieved by the control measures states have determined are necessary to make reasonable progress based on a four-factor analysis.” 82 FR 3078 at 3091, January 10, 2017. Their primary purpose is to assist the public and the EPA in assessing the reasonableness of states' long-term strategies for making reasonable progress towards the national visibility goal. See 40 CFR 51.308(f)(3)(iii) and (iv). States in which Class I areas are located must establish two RPGs, both in deciviews—one representing visibility conditions on the clearest days and one representing visibility on the most anthropogenically impaired days—for each area within their borders. 40 CFR 51.308(f)(3)(i). The two RPGs are intended to reflect the projected impacts, on the two sets of days, of the emission reduction measures the state with the Class I area, as well as all other contributing states, have included in their long-term strategies for the second implementation period.
For the second implementation period, the RPGs are set for 2028. Reasonable progress goals are not enforceable targets, 40 CFR 51.308(f)(3)(iii); rather, they “provide a way for the states to check the projected outcome of the [long-term strategy] against the goals for visibility improvement.” 2019 Guidance at 46. While states are not legally obligated to achieve the visibility conditions described in their RPGs, 40 CFR 51.308(f)(3)(i) requires that “[t]he long-term strategy and the reasonable progress goals must provide for an improvement in visibility for the most impaired days since the baseline period and ensure no degradation in visibility for the clearest days since the baseline period.” Thus, states are required to have emission reduction measures in their long-term strategies that are projected to achieve visibility conditions on the most impaired days that are better than the baseline period and shows no degradation on the clearest days compared to the clearest days from the baseline period. The baseline period for the purpose of this comparison is the baseline visibility condition—the annual average visibility condition for the period 2000-2004. See 40 CFR 51.308(f)(1)(i), 82 FR 3078 at 3097-98, January 10, 2017.
So that RPGs may also serve as a metric for assessing the amount of progress a state is making towards the national visibility goal, the RHR requires states with Class I areas to compare the 2028 RPG for the most impaired days to the corresponding point on the URP line (representing visibility conditions in 2028 if visibility were to improve at a linear rate from conditions in the baseline period of 2000-2004 to natural visibility conditions in 2064). If the most impaired days RPG in 2028 is above the URP (
The 2017 RHR, 2019 Guidance, and 2021 Clarifications Memo also explain that projecting an RPG that is on or below the URP based on only on-the-books and/or on-the-way control measures (
Section 51.308(f)(6) requires states to have certain strategies and elements in place for assessing and reporting on visibility. Individual requirements under this subsection apply either to states with Class I areas within their borders, states with no Class I areas but that are reasonably anticipated to cause or contribute to visibility impairment in any Class I area, or both. A state with Class I areas within its borders must submit with its SIP revision a monitoring strategy for measuring, characterizing, and reporting regional haze visibility impairment that is representative of all Class I areas within the state. SIP revisions for such states must also provide for the establishment of any additional monitoring sites or equipment needed to assess visibility conditions in Class I areas, as well as reporting of all visibility monitoring data to the EPA at least annually. Compliance with the monitoring strategy requirement may be met through a state's participation in the Interagency Monitoring of Protected Visual Environments (IMPROVE) monitoring network, which is used to measure visibility impairment caused by air pollution at the 156 Class I areas covered by the visibility program. 40 CFR 51.308(f)(6), (f)(6)(i) and (iv). The IMPROVE monitoring data is used to determine the 20% most anthropogenically impaired and 20% clearest sets of days every year at each Class I area and tracks visibility impairment over time.
All states' SIPs must provide for procedures by which monitoring data and other information are used to determine the contribution of emissions from within the state to regional haze visibility impairment in affected Class I areas. 40 CFR 51.308(f)(6)(ii) and (iii).
Separate from the requirements related to monitoring for regional haze purposes under 40 CFR 51.308(f)(6), the RHR also contains a requirement at 40 CFR 51.308(f)(4) related to any additional monitoring that may be needed to address visibility impairment in Class I areas from a single source or a small group of sources. This is called “reasonably attributable visibility impairment.”
Section 51.308(f)(5) requires a state's regional haze SIP revision to address the requirements of paragraphs 40 CFR 51.308(g)(1) through (5) so that the plan revision due in 2021 will serve also as a progress report addressing the period since submission of the progress report for the first implementation period. The regional haze progress report requirement is designed to inform the public and the EPA about a state's implementation of its existing long-term strategy and whether such implementation is in fact resulting in the expected visibility improvement. See 81 FR 26942, 26950 (May 4, 2016), (82 FR 3078 at 3119, January 10, 2017). To this end, every state's SIP revision for the second implementation period is required to describe the status of implementation of all measures included in the state's long-term strategy, including BART and reasonable progress emission reduction measures from the first implementation period, and the resulting emissions reductions. 40 CFR 51.308(g)(1) and (2).
A core component of the progress report requirements is an assessment of changes in visibility conditions on the clearest and most impaired days. For second implementation period progress reports, 40 CFR 51.308(g)(3) requires states with Class I areas within their borders to first determine current visibility conditions for each area on the most impaired and clearest days, 40 CFR 51.308(g)(3)(i)(B), and then to calculate the difference between those current conditions and baseline (2000-2004) visibility conditions in order to assess progress made to date. See 40 CFR 51.308(g)(3)(ii)(B). States must also
Similarly, states must provide analyses tracking the change in emissions of pollutants contributing to visibility impairment from all sources and activities within the state over the period since they submitted their first implementation period progress reports. See 40 CFR 51.308(g)(4) and (f)(5). Changes in emissions should be identified by the type of source or activity. Section 51.308(g)(5) also addresses changes in emissions since the period addressed by the previous progress report and requires states' SIP revisions to include an assessment of any significant changes in anthropogenic emissions within or outside the state. This assessment must include an explanation of whether these changes in emissions were anticipated and whether they have limited or impeded progress in reducing emissions and improving visibility relative to what the state projected based on its long-term strategy for the first implementation period.
Clean Air Act section 169A(d) requires that before a state holds a public hearing on a proposed regional haze SIP revision, it must consult with the appropriate FLM or FLMs; pursuant to that consultation, the state must include a summary of the FLMs' conclusions and recommendations in the notice to the public. Consistent with this statutory requirement, the RHR also requires that states “provide the [FLM] with an opportunity for consultation, in person and at a point early enough in the State's policy analyses of its long-term strategy emission reduction obligation so that information and recommendations provided by the [FLM] can meaningfully inform the State's decisions on the long-term strategy.” 40 CFR 51.308(i)(2). Consultation that occurs 120 days prior to any public hearing or public comment opportunity will be deemed “early enough,” but the RHR provides that in any event the opportunity for consultation must be provided at least 60 days before a public hearing or comment opportunity. This consultation must include the opportunity for the FLMs to discuss their assessment of visibility impairment in any Class I area and their recommendations on the development and implementation of strategies to address such impairment. 40 CFR 51.308(i)(2). In order for the EPA to evaluate whether FLM consultation meeting the requirements of the RHR has occurred, the SIP submission should include documentation of the timing and content of such consultation. The SIP revision submitted to the EPA must also describe how the state addressed any comments provided by the FLMs. 40 CFR 51.308(i)(3). Finally, a SIP revision must provide procedures for continuing consultation between the state and FLMs regarding the state's visibility protection program, including development and review of SIP revisions, five-year progress reports, and the implementation of other programs having the potential to contribute to impairment of visibility in Class I areas. 40 CFR 51.308(i)(4).
MDE submitted its regional haze SIP for the first implementation period to the EPA on February 13, 2012. The EPA approved Maryland's first implementation period regional haze SIP submission on July 6, 2012 (77 FR 39938, July 6, 2012), effective August 6, 2012. EPA's approval included the portions of the plan that addressed the reasonable progress requirements and Maryland's implementation of Best Available Retrofit Technologies (BART) on eligible sources. The requirements for regional haze SIPs for the first implementation period are contained in 40 CFR 51.308(d) and (e). 40 CFR 51.308(b). Pursuant to 40 CFR 51.308(g), Maryland was also responsible for submitting a five-year progress report as a SIP revision for the first implementation period, which it did on August 9, 2017. The EPA approved the progress report on November 26, 2018 (83 FR 60363, November 26, 2018), effective December 26, 2018.
In accordance with CAA sections 169A and the RHR at 40 CFR 51.308(f), on February 8, 2022, MDE submitted a revision to the Maryland SIP to address its regional haze obligations for the second implementation period, which runs through 2028. Maryland made its 2020 Regional Haze SIP submission available for public comment on December 1, 2021 through January 4, 2022. MDE received and responded to public comments and included the comments and responses to those comments in their submission.
The following sections describe Maryland's SIP submission, including analyses conducted by MANE-VU and Maryland's determinations based on those analyses, Maryland's assessment of progress made since the first implementation period in reducing emissions of visibility impairing pollutants, and the visibility improvement progress at nearby Class I areas. This document also contains EPA's evaluation of Maryland's submission against the requirements of the CAA and RHR for the second implementation period of the regional haze program.
Section 169A(b)(2) of the CAA requires each state in which any Class I area is located or “the emissions from which may reasonably be anticipated to cause or contribute to any impairment of visibility” in a Class I area to have a plan for making reasonable progress toward the national visibility goal. The RHR implements this statutory requirement at 40 CFR 51.308(f), which provides that each state's plan “must address regional haze in each mandatory Class I Federal area located within the State and in each mandatory Class I Federal area located outside the State that may be affected by emissions from within the State,” and 40 CFR 51.308(f)(2), which requires each state's plan to include a long-term strategy that addresses regional haze in such Class I areas.
The EPA explained in the 1999 RHR preamble that the CAA section 169A(b)(2) requirement that states submit SIPs to address visibility impairment establishes “an `extremely low triggering threshold' in determining which States should submit SIPs for regional haze.” 64 FR 35714 at 35721, July 1, 1999. In concluding that each of the contiguous 48 states and the District of Columbia meet this threshold,
Maryland has no mandatory Class I Federal area within its borders, but has previously been shown to have sources with emissions that impact visibility at downwind mandatory Class I Federal areas. For the second implementation period, MANE-VU performed technical analyses
One MANE-VU analysis used for contribution assessment was CALPUFF air dispersion modeling. The CALPUFF model was used to estimate sulfate and nitrate formation and transport in MANE-VU and nearby regions originating from large electric generating unit (EGU) point sources and other large industrial and institutional sources in the eastern and central United States. Information from an initial round of CALPUFF modeling was collated for the 444 EGUs that were determined to warrant further scrutiny based on their emissions of SO
Maryland had ten EGU sources
In its submittal, Maryland indicates that Brandon Shores Generating Station has agreed via legal consent agreement to cease coal combustion at the site by 2026.
The second MANE-VU contribution analysis used a meteorologically weighted Q/d calculation to assess states' contributions to visibility impairment at MANE-VU Class I areas.
In order to develop a final set of contribution estimates, MANE-VU weighted the results from both the Q/d and CALPUFF analyses. The MANE-VU mass-weighted sulfate and nitrate contribution results were reported for the MANE-VU Class I areas (the Q/d summary report included results for several non-MANE-VU areas as well). If a state's contribution to sulfate and nitrate concentrations at a particular Class I area was 2 percent or greater, MANE-VU regarded that state as contributing to visibility impairment in that area. According to MANE-VU's analyses, sources in Maryland were found to contribute to visibility impairment at all seven downwind MANE-VU Class I areas,
As explained above, the EPA concluded in the 1999 RHR that “all [s]tates contain sources whose emissions are reasonably anticipated to contribute to regional haze in a Class I area,” 64 FR 35714 at 35721, July 1, 1999, and this determination was not changed in the 2017 RHR. Critically, the statute and regulation both require that the cause-or-contribute assessment consider all emissions of visibility-impairing pollutants from a state, as opposed to emissions of a particular pollutant or emissions from a certain set of sources. Consistent with these requirements, the 2019 Guidance makes it clear that “all types of anthropogenic sources are to be included in the determination” of whether a state's emissions are reasonably anticipated to result in any visibility impairment. 2019 Guidance at 8.
First, the screening analyses on which MANE-VU relied are useful for certain purposes. MANE-VU used information from its technical analysis to rank the largest contributing states to sulfate and nitrate impairment in five Class I areas within MANE-VU states and three additional, nearby Class I areas.
With regard to the analysis and determinations regarding Maryland's contribution to visibility impairment at out-of-state Class I areas, the MANE-VU technical work focuses on the magnitude of visibility impacts from certain Maryland emissions on downwind Class I areas. However, the analyses did not account for all
Regardless, we note that Maryland did determine that sources and emissions within the state contribute to visibility impairment at out-of-state Class I areas. Furthermore, the state took part in the emission control strategy consultation process as a member of MANE-VU. As part of that process, MANE-VU developed a set of emissions reduction measures identified as being necessary to make reasonable progress in the five MANE-VU Class I areas. This strategy consists of six Asks for states within MANE-VU and five Asks for states outside the region that were found to impact visibility at Class I areas within MANE-VU.
Section 51.308(f)(1) requires states to determine the following for “each mandatory Class I Federal area located within the State”: baseline visibility conditions for the most impaired and clearest days, natural visibility conditions for the most impaired and clearest days, progress to date for the most impaired and clearest days, the differences between current visibility conditions and natural visibility conditions, and the URP. This section also provides the option for states to propose adjustments to the URP line for a Class I area to account for visibility impacts from anthropogenic sources outside the United States and/or the impacts from wildland prescribed fires that were conducted for certain, specified objectives. 40 CFR 51.308(f)(1)(vi)(B).
Maryland does not have any mandatory Class I areas within its borders; therefore, Section 51.308(f)(1) and its requirements do not apply.
Each state having a Class I area within its borders or emissions that may affect visibility in a Class I area must develop a long-term strategy for making reasonable progress towards the national visibility goal. CAA 169A(b)(2)(B). As explained in the Background section of this document, reasonable progress is achieved when all states contributing to visibility impairment in a Class I area are implementing the measures determined—through application of the four statutory factors to sources of visibility impairing pollutants—to be necessary to make reasonable progress. 40 CFR 51.308(f)(2)(i). Each state's long-term strategy must include the enforceable emission limitations, compliance schedules, and other measures that are necessary to make reasonable progress. 40 CFR 51.308(f)(2). All new (
The following section summarizes how Maryland's SIP submission addressed the requirements of 40 CFR 51.308(f)(2)(i); specifically, it describes MANE-VU's development of the six Asks and how Maryland addressed each. The EPA's evaluation of Maryland's SIP revision with regard to the same is contained in the following Section IV.E.2 of this document. Maryland's SIP submission describes how it plans to meet the long-term strategy requirements defined by the state and MANE-VU and provides that “[t]hese long-term strategies are referred to as the `Asks'.”
States may rely on technical information developed by the RPOs of which they are members to select sources for four-factor analysis and to conduct that analysis, as well as to satisfy the documentation requirements under 40 CFR 51.308(f). Where an RPO has performed source selection and/or four-factor analyses (or considered the five additional factors in 40 CFR 51.308(f)(2)(iv)) for its member states, those states may rely on the RPO's analyses for the purpose of satisfying the requirements of 40 CFR 51.308(f)(2)(i) so long as the states have
Maryland is a member of the MANE-VU RPO and participated in the RPO's regional approach to developing a strategy for making reasonable progress towards the national visibility goal in the MANE-VU Class I areas. MANE-VU's strategy includes a combination of: (1) measures for certain source sectors and groups of sectors that the RPO determined were reasonable for states to pursue, and (2) a request for member states to conduct four-factor analyses for individual sources that it identified as contributing to visibility impairment. MANE-VU refers to each of the components of its overall strategy as an Ask of its member states. On August 25, 2017, the Executive Director of MANE-VU, on behalf of the MANE-VU states and tribal nations, signed a statement that identifies six emission reduction measures that comprise the Asks for the second implementation period.
MANE-VU's recommendations as to the appropriate control measures were based on technical analyses documented in the RPO's reports and included as appendices to or referenced in Maryland's regional haze SIP submission. One of the initial steps of MANE-VU's technical analysis was to determine which visibility-impairing pollutants should be the focus of its efforts for the second implementation period. In the first implementation period, MANE-VU determined that sulfates were the most significant visibility impairing pollutant at the region's Class I areas. To determine the impact of certain pollutants on visibility at Class I areas for the purpose of second implementation period planning, MANE-VU conducted an analysis comparing the pollutant contribution on the clearest and most impaired days in the baseline period (2000-2004) to the most recent period (2012-2016)
• Selection of States for MANE-VU Regional Haze Consultation (2018) (MANE-VU, September 2017) (Appendix 1);
• Contributions to Regional Haze in the Northeast and Mid-Atlantic United States: Preliminary Update through 2007 (NESCAUM, March 2012);
• MANE-VU Updated Q/d*C Contribution Assessment (MANE-VU, April 2016) (Appendix 3);
• 2016 MANE-VU Source Contribution Modeling Report—CALPUFF Modeling of Large Electrical Generating Units and Industrial Sources (MANE-VU, May 2006) (Appendix 4);
• Assessment of Reasonable Progress for Regional Haze in MANE-VU Class I areas (referred to as the MACTEC Report) MACTEC (July 2007);
• Statement of the Mid-Atlantic/Northeast Visibility Union (MANE-VU) Concerning a Course of Action within MANE-VU toward Assuring Reasonable Progress for the Second Regional Haze Implementation Period (2018-2028) (August 2017);
• Statement of the Mid-Atlantic/Northeast Visibility Union (MANE-VU) Concerning a Course of Action In Contributing States Located Upwind of MANE-VU Toward Assuring Reasonable Progress for the Second Regional Haze Implementation Period (2018-2028) (Appendix 8);
• Technical Support Document for the 2011 Northeastern U.S. Gamma Emission Inventory (January 2018) (Appendix 10);
• Ozone Transport Commission/Mid-Atlantic Northeastern Visibility Union 2011 Based Modeling Platform Support Document—October 2018 Update (October 2018) (Appendix 11);
• The Nature of Fine Particle and Regional Haze Air Quality Problems in the MANE-VU Region: A Conceptual Description (NESCAUM, November 2006, Revised August 2010) (Appendix 12);
• Mid-Atlantic/Northeast U.S. Visibility Data 2004-2017 (2nd RH SIP Metrics) (MANE-VU, December 2018) (Appendix 13);
• Additional MANE-VU documentation for establishing 3.0 Mm
• 20% Most Impaired Days Based on Deciviews, as Detailed in Recommendation on Approaches to Selecting the 20% Most Impaired Days (March 2, 2017) (Appendix 18);
• Technical Support Document on Measures to Mitigate the Visibility Impacts of Construction Activities in the MANE-VU Region (MANE-VU, September 2006);
• Baseline and Natural Background Visibility Conditions (NESCAUM, December 2006);
• 2016 Updates to the Assessment of Reasonable Progress for Regional Haze in MANE-VU Class I Areas, January 31, 2016 (MARAMA, January 31, 2016);
To support development of the Asks, MANE-VU gathered information on the four statutory factors for six source sectors it determined, based on an examination of annual emission inventories, “had emissions that were reasonabl[y] anticipated to contribute to visibility degradation in MANE-VU:” electric generating units (EGUs), industrial/commercial/institutional boilers (ICI boilers), cement kilns, heating oil, residential wood combustion, and outdoor wood combustion.
MANE-VU Ask 1 requests that states “ensure the most effective use of control technologies on a year-round basis to consistently minimize emissions of haze precursors, or obtain equivalent alternative emission reductions” at EGUs “with a nameplate capacity larger than or equal to 25 MW with already installed NO
MANE-VU Ask 2 requests that states “perform a four-factor analysis for reasonable installation or upgrade to emissions controls” at “emission sources modeled by MANE-VU that have the potential for 3.0 Mm
MANE-VU Ask 3 requests that, for “each MANE-VU state that has not yet fully adopted an ultra-low fuel oil standard as requested by MANE-VU in 2007”, to “pursue this standard as expeditiously as possible and before 2028, depending on supply availability”. The Ask includes percent by weight standards for #2 distillate oil (0.0015% sulfur by weight or 15 ppm), #4 residual oil (0.25-0.5% sulfur by weight), and #6 residual oil (0.3-0.5% sulfur by weight). On October 3, 2014, Maryland adopted a rule
MANE-VU Ask 4 requests that states “pursue updating permits, enforceable agreements, and/or rules to lock-in lower emission rates for SO
MANE-VU Ask 5 requests that MANE-VU states, “where emission rules have not been adopted, control NO
MANE-VU Ask 6, the last Ask, requests that “each State should consider and report in their SIP measures or programs to: a) decrease energy demand through the use of energy efficiency, and b) increase the use within their state of Combined Heat and Power (CHP) and other clean Distributed Generation technologies including fuel cells, wind, and solar”.
The EPA is proposing to find that Maryland has satisfied the requirements of 40 CFR 51.308(f)(2)(i) related to evaluating sources and determining the emission reduction measures that are necessary to make reasonable progress by considering the four statutory factors. We are proposing to find that Maryland has satisfied the four-factor analysis requirement through its analysis and actions to address MANE-VU Ask 2 and Ask 5. We also propose to find that Maryland reasonably concluded that it satisfied all six Asks.
As explained above, Maryland relied on MANE-VU's technical analyses and framework (
Section 51.308(f)(2)(i) requires states to evaluate and determine the emission reduction measures that are necessary to make reasonable progress by applying the four statutory factors to sources in a control analysis. As explained previously, the MANE-VU Asks are a mix of measures for sectors and groups of sources identified as reasonable for states to address in their regional haze plans. While MANE-VU formulated the Asks to be “reasonable emission reduction strategies” to control emissions of visibility impairing pollutants,
Maryland asserted that it satisfies Ask 1 because it has SIP-approved regulations applicable to EGU boilers that include annual emission limits for both NO
Ask 2 addresses the sources MANE-VU determined have the potential for larger than, or equal to, 3.0 Mm
As an initial matter, EPA does not necessarily agree that 3.0 Mm
MANE-VU identified one unit at the Herbert A. Wagner Generating Facility,
The EPA proposes to find that Maryland reasonably determined it has satisfied Ask 2. As explained above, we
Maryland also examined the 13 facilities identified by NPS as a percent of their total Q/d contribution. This included Luke Paper Company, which comprised 54.71% of the Q/d total; Maryland stated that this facility ceased operations, shut down and surrendered their existing air permits as of May 7, 2020.
Ask 3, which addresses the sulfur content of heating oil used in MANE-VU states, is based on a four-factor analysis for the heating oil sulfur reduction regulations contained in that Ask;
EPA proposes to find that Maryland reasonably relied on MANE-VU's four-factor analysis for a low-sulfur fuel oil regulation, which engaged with each of the statutory factors and explained how the information supported a conclusion that a 15 ppm sulfur fuel oil standard is reasonable; as a reminder, MANE-VU Ask 3 requests that, for “each MANE-VU state that has not yet fully adopted an ultra-low fuel oil standard as requested by MANE-VU in 2007”, to “pursue this standard as expeditiously as possible and before 2028, depending on supply availability”. Maryland's ultra-low sulfur fuel oil regulations
Maryland concluded that no additional updates were needed to meet Ask 4, which requests that MANE-VU states pursue updating permits, enforceable agreements, and/or rules to lock-in lower emission rates for sources larger than 250 MMBtu per hour that have switched to lower emitting fuels. As explained above, Maryland has asserted that EGUs and other large point emission sources that have switched operations to lower emitting fuels are already locked into the lower emission rates for NO
Ask 5 addresses NO
Finally, regarding Ask 6, Maryland explains the greenhouse gas initiatives and clean energy requirements within the state, including promulgation of the state's 2030 Greenhouse Gas Reduction Act (GGRA) Plan, RPS, and participation in RGGI. As a reminder, MANE-VU Ask 6, the last Ask, requests that “each State should consider and report in their SIP measures or programs to: (a) decrease energy demand through the use of energy efficiency, and (b) increase the use within their state of Combined Heat and Power (CHP) and other clean Distributed Generation technologies including fuel cells, wind, and solar”.
In sum, the EPA is proposing to find that—based on Maryland's participation in the MANE-VU planning process, how it has addressed each of the Asks, its supplemental information and explanation regarding NO
Additionally, MANE-VU conducted a four-factor analysis to support Ask 3, which requests that states pursue ultra-low sulfur fuel oil standards to address SO
The consultation requirements of 40 CFR 51.308(f)(2)(ii) provides that states must consult with other states that are reasonably anticipated to contribute to visibility impairment in a Class I area to develop coordinate emission management strategies containing the emission reductions measures that are necessary to make reasonable progress. Section 51.308(f)(2)(ii)(A) and (B) require states to consider the emission reduction measures identified by other states as necessary for reasonable progress and to include agreed upon measures in their SIPs, respectively. Section 51.308(f)(2)(ii)(C) speaks to what happens if states cannot agree on what measures are necessary to make reasonable progress.
Maryland participated in and provided documentation of the MANE-VU intra- and inter-RPO consultation processes and addressed the MANE-VU Asks by providing information on the measures it has in place that satisfy each Ask.
In sum, Maryland participated in the MANE-VU intra- and inter-RPO consultation and satisfied the MANE-VU Asks, satisfying 40 CFR 51.308(f)(2)(ii)(A) and (B). Maryland satisfied 40 CFR 51.308(f)(2)(ii)(C) by participating in MANE-VU's consultation process, which documented the disagreements between the upwind states and MANE-VU and explained MANE-VU's reasoning on each of the disputed issues. Based on the entirety of MANE-VU's intra- and inter-RPO consultation and both MANE-VU's and Maryland's responses to states' comments on the SIP submission and various technical analyses therein, we propose to determine that Maryland has satisfied the consultation requirements of 40 CFR 51.308(f)(2)(ii).
The documentation requirement of 40 CFR 51.308(f)(2)(iii) provides that states may meet their obligations to document the technical bases on which they are relying to determine the emission reductions measures that are necessary to make reasonable progress through an RPO, as long as the process has been “approved by all State participants.” As explained above, Maryland chose to rely on MANE-VU's technical information, modeling, and analysis to support development of its long-term strategy. The MANE-VU technical analyses on which Maryland relied are listed in the state's SIP submission and include source contribution assessments, information on each of the four factors and visibility modeling information for certain EGUs, and evaluations of emission reduction strategies for specific source categories. Maryland also provided supplemental information to further demonstrate the technical bases and emission information on which it relied on to determine the emission reductions measures that are necessary to make reasonable progress. Based on the documentation provided by the state, we propose to find Maryland satisfies the documentation requirements of 40 CFR 51.308(f)(2)(iii).
Section 51.308(f)(2)(iii) also requires that the emissions information considered to determine the measures that are necessary to make reasonable progress include information on emissions for the most recent year for which the state has submitted triennial emissions data to the EPA (or a more recent year), with a 12-month exemption period for newly submitted data. Maryland's SIP submission included 2017 NEI emission data for NO
We also propose to find that Maryland reasonably considered the five additional factors in 40 CFR 51.308(f)(2)(iv) in developing its long-term strategy. Pursuant to 40 CFR 51.308(f)(2)(iv)(A), Maryland noted that existing and ongoing state and Federal emission control programs that contribute to emission reductions through 2028 would impact emissions of visibility impairing pollutants from point and nonpoint sources in the second implementation period. Maryland included in their SIP comprehensive lists of control measures with their effective dates, pollutants addressed, and corresponding Code of Maryland Regulations provisions.
Maryland's consideration of measures to mitigate the impacts of construction activities as required by 40 CFR 51.308(f)(2)(iv)(B) includes, in section 2.8.2 of its SIP submission, a list of measures that Maryland has implemented to mitigate the impacts from such activities. Maryland has implemented standards that reduce fugitive dust emissions from construction,
Pursuant to 40 CFR 51.308(f)(2)(iv)(C), source retirements and replacement schedules are addressed in section 2.8.3 of Maryland's submission. Source retirements and replacements were considered in developing the 2028 emission projections, with on the books/on the way retirements and replacements included in the 2028 projections. The EGU point sources included in the inventories used in the MANE-VU contribution assessment and that were subsequently retired are identified in Table 2-14.
In considering smoke management as required in 40 CFR 51.308(f)(2)(iv)(D), Maryland explained, in section 2.8.4 of its submission, that emissions from agricultural and prescribed burning for forestry smoke management within the state are low; PM
Maryland considered the anticipated net effect of projected changes in emissions as required by 40 CFR 51.308(f)(2)(iv)(E) by discussing, in section 2.8.5 of its submission, the photochemical modeling for the 2018-2028 period it conducted in collaboration with MANE-VU. The two modeling cases run were a 2028 base case, which considered only on-the-books controls, and a 2028 control case that considered implementation of the MANE-VU Ask. Maryland presented the differences between the base and control cases on the 20% most impaired and 20% clearest days for each MANE-VU Class I area.
Because Maryland has reasonably considered each of the five additional factors the EPA proposes to find that Maryland has satisfied the requirements of 40 CFR 51.308(f)(2)(iv).
Section 51.308(f)(3) contains the requirements pertaining to RPGs for each Class I area. Section 51.308(f)(3)(i) requires a state in which a Class I area is located to establish RPGs—one each for the most impaired and clearest days—reflecting the visibility conditions that will be achieved at the end of the implementation period as a result of the emission limitations, compliance schedules and other measures required under paragraph (f)(2) to be in states' long-term strategies, as well as implementation of other CAA requirements. The long-term strategies as reflected by the RPGs must provide for an improvement in visibility on the most impaired days relative to the baseline period and ensure no degradation on the clearest days relative to the baseline period. Section 51.308(f)(3)(ii) applies in circumstances in which a Class I area's RPG for the most impaired days represents a slower rate of visibility improvement than the uniform rate of progress calculated under 40 CFR 51.308(f)(1)(vi). Under 40 CFR 51.308(f)(3)(ii)(A), if the state in which a mandatory Class I area is located establishes an RPG for the most impaired days that provides for a slower rate of visibility improvement than the URP, the state must demonstrate that there are no additional emission reduction measures for anthropogenic sources or groups of sources in the state that would be reasonable to include in its long-term strategy. Section 51.308(f)(3)(ii)(B) requires that if a state contains sources that are reasonably anticipated to contribute to visibility impairment in a Class I area in
Under 40 CFR 51.308(f)(3)(ii)(B), a state that contains sources that are reasonably anticipated to contribute to visibility impairment in a Class I area in another state for which a demonstration by the other state is required under 40 CFR 51.308(f)(3)(ii)(B) must demonstrate that there are no additional emission reduction measures that would be reasonable to include in its long-term strategy. Maryland's SIP submittal included MANE-VU's glidepath checks for nearby downwind Class I areas,
The EPA proposes to determine that Maryland has satisfied the applicable requirements of 40 CFR 51.308(f)(3) relating to RPGs.
Section 51.308(f)(6) specifies that each comprehensive revision of a state's regional haze SIP must contain or provide for certain elements, including monitoring strategies, emissions inventories, and any reporting, recordkeeping and other measures needed to assess and report on visibility. A main requirement of this subsection is for states with Class I areas to submit monitoring strategies for measuring, characterizing, and reporting on visibility impairment. Compliance with this requirement may be met through participation in the Interagency Monitoring of Protected Visual Environments (IMPROVE) network.
Section 51.308(f)(6)(i) requires SIPs to provide for the establishment of any additional monitoring sites or equipment needed to assess whether reasonable progress goals to address regional haze for all mandatory Class I Federal areas within the state are being achieved. Section 51.308(f)(6)(ii) requires SIPs to provide for procedures by which monitoring data and other information are used in determining the contribution of emissions from within the state to regional haze visibility impairment at mandatory Class I Federal areas both within and outside the state. Because Maryland does not have any Class I Federal areas located within its borders, Section 51.308(f)(6)(i) and (ii) do not apply.
Section 51.308(f)(6)(iii) requires states with no Class I areas to include procedures by which monitoring data and other information are used in determining the contribution of emissions from within the State to regional haze visibility impairment at Class I areas in other states. States with Class I areas must establish a monitoring program and report data to EPA that is representative of visibility at the Class I Federal areas. The IMPROVE network meets this requirement. Maryland stated that, as a participant in MANE-VU, it reviewed information about the chemical composition of baseline monitoring data at Class I Federal areas in and near MANE-VU in order to understand the sources of haze causing pollutants. Maryland commits to continuing support of ongoing visibility monitoring in Class I Federal areas, agrees that the IMPROVE network is an appropriate monitoring network to track regional haze progress, and commits to working with neighboring states and FLMs to meet the goals of the IMPROVE program. Maryland also commits to using monitoring data and procedures consistent with US EPA guidance to review progress and trends in visibility at Class I Federal areas that may be affected by emissions from Maryland, both for comprehensive periodic revisions of this implementation plan and for periodic reports describing progress towards the reasonable progress goals for those areas.
Section 51.308(f)(6)(iv) requires the SIP to provide for the reporting of all visibility monitoring data to the Administrator at least annually for each Class I area in the state. As noted above, Maryland does not have any Class I Federal areas located within its borders, therefore this requirement does not apply.
Section 51.308(f)(6)(v) requires SIPs to provide for a statewide inventory of emissions of pollutants that are reasonably anticipated to cause or contribute to visibility impairment, including emissions for the most recent year for which data are available and estimates of future projected emissions. It also requires a commitment to update the inventory periodically. Maryland provides for emissions inventories and estimates for future projected emissions by participating in the MANE-VU RPO and complying with EPA's Air Emissions Reporting Rule (AERR). In 40 CFR part 51, subpart A, the AERR requires states to submit updated emissions inventories for criteria pollutants to EPA's Emissions Inventory System (EIS) every three years. The emission inventory data is used to develop the NEI, which provides for, among other things, a triennial state-wide inventory of pollutants that are reasonably anticipated to cause or contribute to visibility impairment.
Section 2.21 of Maryland's submission includes tables of NEI data. The source categories of the emissions inventories included are: (1) point sources, (2) nonpoint sources, (3) non-road mobile sources, and (4) on-road mobile sources. The point source category is further divided into AMPD point sources and non-AMPD point sources.
Section 51.308(f)(6)(v) also requires states to include estimates of future projected emissions and include a commitment to update the inventory periodically. Maryland relied on the MANE-VU 2028 emissions projections for MANE-VU states. MANE-VU completed two 2028 projected emissions modeling cases—a 2028 base case that considers only on-the-books controls and a 2028 control case that considers implementation of the MANE-VU Asks.
EPA proposes to find that Maryland has met the requirements of 40 CFR 51.308(f)(6) as described above, including through its continued participation in the IMPROVE network and the MANE-VU RPO and its on-going compliance with the AERR, and that no further elements are necessary at this time for Maryland to assess and report on visibility pursuant to 40 CFR 51.308(f)(6)(vi).
Section 51.308(f)(5) requires that periodic comprehensive revisions of states' regional haze plans also address the progress report requirements of 40 CFR 51.308(g)(1) through (5). The purpose of these requirements is to evaluate progress towards the applicable RPGs for each Class I area within the state and each Class I area outside the state that may be affected by emissions from within that state. Section 51.308(g)(1) and (2) apply to all states and require a description of the status of implementation of all measures included in a state's first implementation period regional haze plan and a summary of the emission reductions achieved through implementation of those measures. Section 51.308(g)(3) applies only to states with Class I areas within their borders and requires such states to assess current visibility conditions, changes in visibility relative to baseline (2000-2004) visibility conditions, and changes in visibility conditions relative to the period addressed in the first implementation period progress report. Section 51.308(g)(4) applies to all states and requires an analysis tracking changes in emissions of pollutants contributing to visibility impairment from all sources and sectors since the period addressed by the first implementation period progress report. This provision further specifies the year
Maryland's submission describes the status of measures of the long-term strategy from the first implementation period. As a member of MANE-VU, Maryland considered the MANE-VU Asks and adopted corresponding measures into its long-term strategy for the first implementation period. The MANE-VU Asks were: (1) Timely implementation of Best Available Retrofit Technology (BART) requirements; (2) EGU controls including Controls at 167 Key Sources that most affect MANE-VU Class I areas; (3) Low sulfur fuel oil strategy; and (4) Continued evaluation of other control measures. Maryland met all the identified reasonable measures requested during the first implementation period. During the first planning period for regional haze, programs that were put in place focused on reducing sulfur dioxide (SO
EPA proposes to find that Maryland has met the requirements of 40 CFR 51.308(g)(1) and (2) because its SIP submission describes the measures included in the long-term strategy from the first implementation period, as well as the status of their implementation and the emission reductions achieved through such implementation.
Section 51.308(g)(3) requires states to assess Reasonable Progress Goals, including current visibility conditions and changes, for any Class I areas within the state. As described above, Maryland does not have any Class I areas within its borders, therefore 40 CFR 51.308(g)(3) does not apply.
Pursuant to 40 CFR 51.308(g)(4), in Section 2.21 of their submittal, Maryland provided a summary of emissions of NO
The reductions achieved through Maryland emission control measures are seen in the emissions inventory. Based on Maryland's SIP submittal, NO
Emissions of SO
Emissions of PM
Emissions of ammonia (NH
The EPA is proposing to find that Maryland has satisfied the requirements of 40 CFR 51.308(g)(4) by providing emissions information for NO
Maryland uses the emissions trend data in the SIP submission
Section 169A(d) of the Clean Air Act requires states to consult with FLMs before holding the public hearing on a proposed regional haze SIP, and to include a summary of the FLMs' conclusions and recommendations in the notice to the public. In addition, 40 CFR 51.308(i)(2)'s FLM consultation provision requires a state to provide FLMs with an opportunity for consultation that is early enough in the state's policy analyses of its emission reduction obligation so that information and recommendations provided by the FLMs' can meaningfully inform the state's decisions on its long-term strategy. If the consultation has taken place at least 120 days before a public hearing or public comment period, the opportunity for consultation will be deemed early enough, Regardless, the opportunity for consultation must be provided at least sixty days before a public hearing or public comment period at the state level. Section 51.308(i)(2) also provides two substantive topics on which FLMs must be provided an opportunity to discuss with states: assessment of visibility impairment in any Class I area and recommendations on the development and implementation of strategies to address visibility impairment. Section 51.308(i)(3) requires states, in developing their implementation plans, to include a description of how they addressed FLMs' comments.
The states in the MANE-VU RPO conducted FLM consultation early in the planning process concurrent with the state-to-state consultation that formed the basis of the RPO's decision making process. As part of the consultation, the FLMs were given the opportunity to review and comment on the technical documents developed by MANE-VU. The FLMs were invited to attend the intra- and inter-RPO consultations calls among states and at least one FLM representative was documented to have attended seven intra-RPO meetings and all inter-RPO meetings. Maryland participated in these consultation meetings and calls.
As part of this early engagement with the FLMs, on April 12, 2018, the NPS sent letters to the MANE-VU states requesting that they consider specific individual sources in their long-term strategies.
On September 2, 2021, Maryland submitted a draft Regional Haze SIP to the U.S. Forest Service, the U.S. Fish and Wildlife Service, and the National Park Service for a 60-day review and comment period pursuant to 40 CFR 51.308(i)(2).
For the reasons stated above, the EPA proposes to find that Maryland has satisfied the requirements under 40 CFR 51.308(i) to consult with the FLMs on its regional haze SIP for the second implementation period.
Maryland's February 8, 2022 SIP submission includes a commitment to revise and submit a regional haze SIP by July 31, 2028, and every ten years thereafter. The state's commitment includes submitting periodic progress reports in accordance with 40 CFR 51.308(f) and a commitment to evaluate progress towards the reasonable progress goal for each mandatory Class I Federal area located within the state and in each mandatory Class I Federal area located outside the state that may be affected by emissions from within the state in accordance with 40 CFR 51.308(g).
EPA is proposing to approve Maryland's February 8, 2022 SIP submission, as satisfying the regional haze requirements for the second implementation period contained in 40 CFR 51.308(f).
Under the CAA, the Administrator is required to approve a SIP submission
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
Executive Order 12898 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.” The Maryland Department of the Environment did not evaluate environmental justice considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. EPA did not perform an EJ analysis and did not consider EJ in this action. Due to the nature of the action being taken here, this action is expected to have a neutral to positive impact on the air quality of the affected area. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.
In addition, this proposed rulemaking action, pertaining to Maryland regional haze SIP submission for the second planning period, is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
Environmental protection, Air pollution control, Incorporation by Reference, Nitrogen dioxide, Ozone, Particulate matter, Sulfur oxides.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve a State Implementation Plan (SIP) revision submitted by the State of New York for purposes of certifying and meeting the requirements for Reasonably Available Control Technology (RACT) for the Serious classification of the 2008 and Moderate classification of the 2015 8-hour Ozone National Ambient Air Quality Standards (NAAQS). The EPA is also proposing to approve that this SIP revision fulfills SIP requirements pertaining to the Ozone Transport Region (OTR) for the 2015 Ozone NAAQS. The EPA is proposing to approve the demonstration portion of the comprehensive SIP revision submitted by New York that certify that the State has satisfied the requirements for an Ozone nonattainment new source review program, certify that the State has satisfied the requirements for a nonattainment emission inventory, and certify that the State has satisfied the requirements for clean fuels for fleets. The EPA is also proposing to approve New York's reasonable further progress plans and motor vehicle emissions budgets for both the Moderate and Serious classifications of the 2008 Ozone NAAQS.
Written comments must be received on or before September 25, 2023.
Submit your comments, identified by Docket ID Number EPA-R02-OAR-2022-0648 at
Fausto Taveras, Environmental Protection Agency, 290 Broadway, New York, New York 10007-1866, at (212) 637-3378, or by email at
Throughout this document, whenever “we,” “us,” or “our” is used, we mean EPA.
On January 29, 2021, New York submitted a State implementation plan (SIP) revision for purposes of meeting the requirement for Reasonably Available Control Technology (RACT)
In 2008, EPA revised the health-based NAAQS for Ozone, setting it at 0.075 parts per million (ppm) averaged over an 8-hour time frame.
On April 30, 2012, the EPA finalized its attainment/nonattainment designations for areas across the country with respect to the 2008 8-hour Ozone Standard.
The counties in the New York portion of the NYMA (and part of Orange County) were previously classified under the 1979 1-hour Ozone NAAQS as Severe, requiring RACT, while the remaining counties in the State were subject to RACT as part of the Moderate classification or as part of the Ozone Transport Region (OTR).
Sections 182(b)(2) of the CAA require States to implement RACT in areas classified as Moderate (and higher) nonattainment for Ozone, while section 184(b)(1)(B) of the CAA requires VOC RACT in States located in the OTR, and section 182(f) requires NO
On March 6, 2015, the EPA published a final rule that outlines the obligations that areas found to be in nonattainment of the 2008 Ozone NAAQS need to address (2008 Ozone Implementation Rule).
Regarding the 2015 Ozone NAAQS, on June 4, 2018, EPA published a final rule establishing designations and classifications for this standard for most areas of the country, including New York. See 83 FR 25776 (June 4, 2018). This final rule created a Moderate nonattainment area within the NYMA which includes, within New York, the five boroughs of New York City and the surrounding counties of Nassau, Suffolk, Westchester, Rockland and the Shinnecock Indian Nation. Additionally, on December 6, 2018, EPA published a final rule outlining requirements for States to follow as they implement the 2015 Ozone NAAQS (2015 Ozone Implementation Rule). (See 83 FR 62998, December 6, 2018). The rule contains RACT and NNSR requirements similar to those outlined within the 2008 Ozone Implementation Rule, although the discretionary inter-pollutant trading program provided for within the NNSR portion of the rule was subsequently voided.
Regarding NNSR, the minimum SIP requirements for NNSR permitting programs for the 2008 and the 2015 Ozone NAAQS are located in 40 CFR 51.165. These NNSR program requirements include those promulgated in the “Phase 2 Rule” implementing the 1997 8-hour Ozone NAAQS (See 70 FR 71612, November 29, 2005) and the 2008 Ozone Implementation Rule. Additionally, although the 2015 Ozone Implementation Rule included a provision to explicitly allow for inter-pollutant trading for meeting the emissions offset requirement for ozone, this provision was subsequently vacated.
• Set major source thresholds for NO
• Classify physical changes at a major source if the change would constitute a major source by itself pursuant to 40 CFR 51.165(a)(1)(iv)(A)(3);
• Consider any significant net emissions increase of NO
• Consider increases of VOC emissions in extreme ozone nonattainment areas as significant net emissions increases and major modifications for ozone pursuant to 40 CFR 51.165(a)(1)(v)(F);
• Set significant emissions rates for VOC and NO
• Contain provisions for emissions reductions credits pursuant to 40 CFR 51.165(a)(3)(ii)(C)(1) and (2);
• Provide that the requirements applicable to VOC also apply to NO
• Set offset ratios for VOC and NO
Additionally, pursuant to the 2008 Ozone Implementation Rule, areas designated as nonattainment for that standard that also remain nonattainment for the 1997 Ozone Standard must satisfy the anti-backsliding requirements of 40 CFR 51.1105.
On January 29, 2021, New York submitted a determination that its regulatory framework for sources meets the criteria for RACT for purposes of the 2015 Ozone NAAQS. The submittal also contained a certification that the State's RACT requirements are sufficient to comprise RACT for the area's Serious classification for the 2008 Ozone NAAQS. EPA approved New York's statewide 2008 NAAQS RACT SIP submission for requirements associated with the Moderate area classification and the OTR on December 12, 2017, except the Agency conditionally approved New York's submission with respect to sources covered by the industrial cleaning solvents CTG.
Appendix A of New York's January 29, 2021, submission lists the CTGs and ACTs and corresponding New York RACT regulations that cover existing sources in New York. For major non-CTG sources, RACT compliance is enforced through the SIP approved provisions in 6 NYCRR Part 212,
New York evaluated its existing RACT regulations and requirements and determined that these measures continue to constitute RACT for purposes of the 2008 Ozone NAAQS Serious classification, the 2015 Ozone NAAQS Moderate classification, and OTR requirements for the 2015 Ozone NAAQS. New York certified that its current regulations still comprise RACT for all major sources of NO
In regard to VOC RACT regulations, New York certified that their following SIP approved regulations met the current requirements for RACT: Part 203, “Oil and Natural Gas Sector” (87 FR 52337, August 25, 2022), Subpart 212-3, “Reasonably Available Control Technology for Major Facilities” (86 FR 54375, October 1, 2021), Part 226, “Solvent Cleaning Processes and Industrial Cleaning Solvents” (85 FR 28490, May 13, 2020), Part 228, “Surface Coating Processes, Commercial and Industrial Adhesives, Sealants and Primers” (79 FR 12082, March 4, 2014), Part 229, “Petroleum and Volatile Organic Liquid Storage and Transfer” (62 FR 67006, December 23, 1997), Part 230, “Gasoline Dispensing Sites and Transport Vehicles” (63 FR 23668, April 30, 1998), Part 233, “Pharmaceutical and Cosmetic Manufacturing Processes” (62 FR 67006, December 23, 1997), Part 234, “Graphic Arts” (77 FR 13974, March 8, 2012). Within New York's January 29, 2021, SIP revision, the State noted that it was in the process of revising Part 230 to incorporate Federal standards for gasoline dispensing facilities pursuant to 40 CFR Subpart CCCCCC. This regulatory update was submitted to the EPA on March 3, 2021 and was approved into New York's SIP on February 9, 2023.
In regard to negative declarations, New York reviewed the CTG and ACT categories and determined that their previously approved negative declarations remain valid. Based on the emission inventory and emission statements for New York, the State certified that there are no sources located within the State for the following six CTGs: Manufacture of Vegetable Oils; Manufacture of High-Density Polyethylene, Polypropylene and Polystyrene Resins; Natural Gas/Gasoline Processing Plants; Air Oxidation Processes in Synthetic Organic Chemical Manufacturing Industry; Fiberglass Boat Manufacturing Materials; Agricultural Pesticides. In New York's January 29, 2021, RACT submittal for the Serious classification of the 2008 Ozone standard, Moderate classification for the 2015 Ozone Standard, and OTR requirements related to the 2015 Ozone NAAQS New York recertifies that this previously approved negative declaration for the CTGs listed above remains valid. In this proposed action, the EPA is proposing that the State's negative declaration for the six CTGs listed above remain valid and satisfies the requirements for the 2008 Ozone NAAQS Serious classification, the 2015 Ozone standard Moderate classification and requirements associated with the OTR for the 2015 Ozone NAAQS (82 FR 58342, December 12, 2017); 40 CFR 52.1683(a) and (b).
Regarding source specific RACT determinations, New York submits certain source specific RACT determinations to EPA as SIP revisions. In instances where a facility is unable to meet the relevant categorical RACT limit due to technical or economic infeasibility, an alternative RACT limit, also called a variance, is agreed to by DEC and the facility owner. Some regulations (
New York has periodically submitted source specific RACT determinations for multiple facilities under a bundled SIP submittal approach to EPA. Previous bundles were submitted to the EPA in 2008, 2010, and 2013. This included 34 RACT determinations bundled into one submittal on September 16, 2008, and 15 RACT determinations bundled into one submittal on August 30, 2010, for various regulated RACT rules (
We have reviewed New York's RACT certification demonstration and propose to determine that the State's regulatory requirements for VOC and NO
New York's November 13, 2017, and November 29, 2021, SIP submissions also included additional certifications and planning elements as part of the comprehensive demonstrations. These include reasonable further progress and MVEB for the 2008 moderate and serious ozone classifications, a certification for an ozone NNSR program, a certification for a nonattainment emission inventory, and a certification that the State has satisfied the requirements for clean fuels for fleets.
CAA section 172(c)(3) requires that each SIP include a “comprehensive, accurate, current inventory of actual emissions from all sources of the relevant pollutant or pollutants in [the] area . . .” by requiring an accounting of actual emissions from all sources of the relevant pollutants in the area. This section provides for the base year inventory to include all emissions that contribute to the formation of a particular NAAQS pollutant. For the 2008 Ozone NAAQS, EPA's March 6, 2015, implementation rule recommended 2011 as a baseline year from which emission reductions used to meet RFP requirements are creditable.
On November 29, 2021, NYSDEC certified that the previously submitted 2011 base year emission inventory is up-to-date and satisfies the requirements for the 2008 Ozone NAAQS for the Serious classification. On November 13, 2017, New York submitted to the EPA as a SIP revision request an emission inventory of ozone precursors for 2011.
The specific details of New York's 2011 emission inventory and the rationale for the EPA's approval action are explained in the October 1, 2021, final rulemaking action. For this detailed information, the reader is referred to the EPA's rulemaking action approving New York's 2011 Emission Inventory.
Since we agree that New York's 2011 base year inventory is consistent with the ozone base year inventory reporting requirements based on EPA guidance, we are proposing to approve New York's certification of its 2011 calendar year emission inventory to fully meets the requirements of the CAA for the 2008 8-hour Ozone NAAQS Serious classification.
Table 1 shows the NYMA summary of 2011 OSD emissions, in tons per day, by source category.
Section 182(b)(1) of the CAA and the EPA's 2008 Ozone Implementation Rule requires that State's submit a reasonable further progress (RFP) demonstration for each 8-hour ozone nonattainment area designated moderate and above, for review and approval into its SIP, that describes how the area will achieve actual emissions reductions of VOC and NO
The EPA's 2008 Ozone Implementation Rule also finalized that 2008 nonattainment areas that have previously met the CAA requirement for a 15% ROP VOC reduction plan for the entire area are not required to fulfill that requirement again. Instead, for purposes of the 1997 Ozone NAAQS and for the 2008 Ozone NAAQS, the EPA interpreted the RFP requirement of CAA section 172(c)(2) to require an area classified as Moderate to achieve an average 3 percent annual reduction in VOC and/or NO
In New York's November 13, 2017, submission, NYSDEC demonstrated that RFP was achieved for the moderate classification between the 2011 baseline
Table 2 below contains a summary of the 2011 RFP baseline inventory, and 2017 projected, controlled emissions demonstrating the 6.70% VOC and 28.01% NO
As mentioned previously, the RFP requirement in CAA section 182(c)(2)(B) require areas classified as Serious or higher to achieve an average 3% annual reduction for the first 6 years following the baseline year, and also requires Serious areas to demonstrate an additional 3% per year reduction in VOC emissions, averaged over consecutive 3-year periods until the attainment date.
Table 3 below contains a summary of the 2011 RFP baseline inventory, and 2020 projected, controlled emissions demonstrating that VOC emissions were reduced by 17.76% and NO
Transportation conformity is required by section 176(c) of the CAA. Conformity to a SIP means conformity to an implementation plan's purpose of eliminating or reducing the severity and number of violations of the NAAQS and achieving expeditious attainment of the NAAQS, and that transportation
In New York's November 13, 2017 comprehensive SIP submittal, the State established the 2017 MVEB for VOCs and NO
On April 19, 2018, the EPA issued a letter to New York in which we stated that the Budgets for the New York portion of the NY-NJ-CT area were adequate for use in transportation conformity determinations. Additionally, the EPA published an announcement of this adequacy finding in the
Also, in New York's November 29, 2021 comprehensive SIP submittal, the State established the 2020 MVEB for VOCs and NO
On July 26, 2022, the EPA issued a letter to New York in which we stated that the Budgets for the New York portion of the NY-NJ-CT area were adequate for use in transportation conformity determinations. Additionally, the EPA published an announcement of this adequacy finding in the
New York affirmed in its November 29, 2021, submittal that, because the State is located entirely in the OTR, regardless of the area's designation status, NNSR applies state-wide for emissions of ozone precursor pollutants, VOC and NO
NNSR requires the application of Lowest Achievable Emission Rate which is more stringent than RACT. Furthermore, New York certified in its November 29, 2021 submittal that the State also relies upon Federal rules such as the National Emission Standards for Hazardous Air Pollutants (NESHAPs) regulated under CAA section 112. NESHAPs establish the need to use
The EPA is proposing to approve New York's certification that NNSR applies state-wide for NO
Clean Air Act Section 182(c)(4) requires States with Ozone nonattainment areas classified as Serious or above with 1980 populations greater than 250,000 to submit a SIP revision to either “include such measures as may be necessary to ensure the effectiveness of the applicable provisions of the clean-fuel vehicle program prescribed under part C of subchapter II of this chapter” or to provide “a substitute for all or a portion of the clean-fuel vehicle program prescribed under part C of subchapter II of this chapter.” The Clean Fuel Fleets requirement was adopted as part of the 1990 CAA Amendments and was designed to improve air quality and introduce clean burning fuels into the market. CAA Sections 243 and 245 included numerical emissions standards for the Clean Fuel Fleets light- and heavy-duty vehicles that were intended to encourage innovation, encourage the purchase of cleaner fleet vehicles and reduce emissions for fleets of motor vehicles in ozone nonattainment areas classified as Serious or above as compared to conventionally fueled vehicles available at the time.
New York affirmed in its November 29, 2021, submittal that the State has satisfied the requirements for clean fuels for fleets. New on-road motor vehicles sold in New York are subject to the provisions of 6 NYCRR Part 218, “Emission Standards for Motor Vehicle Engines.” Section 177 of the CAA permits States to adopt new motor vehicle emission standards that are identical to California's. Therefore, in this already implemented measure, NYSDEC has incorporated the latest California emission standards for light-duty vehicles through Part 218. This low-emission vehicle (LEV) regulations provide flexibility to auto manufacturers by allowing them to certify their vehicle models to one of several different emissions standards. These consist of several different tiers of increasingly stringent LEV emission standards to which a manufacturer may certify a vehicle, including LEV, ultra-low emission vehicle (ULEV), super-ultra-low-emission vehicle (SULEV), and ZEV. The different standards are intended to provide flexibility to manufacturers in meeting program requirements. However, manufacturers must demonstrate that the overall fleet for each model year meets the specified non-methane organic gas standard for that year. These requirements are progressively more stringent with each model year.
A 2016 update to Part 218 incorporated California's latest LEV standards (LEV III) and ZEV standards into New York's program. These LEV III amendments took effect for 2017 through 2025 model year passenger cars, light-duty trucks, and medium-duty passenger vehicles. The ZEV revisions apply to 2018 through 2025 model year passenger cars, light-duty trucks, and medium-duty vehicles.
The EPA is proposing to approve New York's certification that the State has satisfied the requirements for clean fuels for fleets under the CAA for the 2008 8-hour Ozone NAAQS. New York's program demonstrates that any new light- or heavy-duty vehicle purchased today are certified to current standards, including California's LEV III standards, thus is deemed to comply with the Clean Fuel Fleets standards as Ultra Low-Emission Vehicles.
In this rule, EPA is proposing to approve the SIP revision submitted by the State of New York on January 29, 2021, for purposes of meeting the requirement for RACT for the 2008 8-hour Ozone NAAQS in New York's portion of the NYMA for the Serious classification. The EPA is also proposing to approve that same submittal for meeting New York's RACT requirements for the 2015 8-hour Ozone NAAQS in the NYMA and for meeting the State's requirements for statewide RACT for the 2015 8-hour Ozone NAAQS within the OTR. The EPA is also proposing to approve portions of a comprehensive SIP revision submitted by the State of New York on November 29, 2021, certifying that the State has satisfied the requirements for an ozone nonattainment new source review program, certifying that the State has satisfied the requirements for a nonattainment emission inventory, and certifying that the State has satisfied the requirements for clean fuels for fleets. EPA is also proposing to approve New York's reasonable further progress plans and MVEB for both the Moderate and Serious classifications of the 2008 Ozone NAAQS in the NYMA.
EPA is soliciting public comments on the issues discussed in this notice or on other relevant matters. These comments will be considered before taking final action. Interested parties may participate in the Federal rulemaking procedure by submitting written comments to this proposed rule by following the instructions listed in the
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. Accordingly, this action merely proposes to approve State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law. For that reason, this proposed action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 14094 (88 FR 21879, April 11, 2023);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it approves a State program;
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act.
In addition, this proposed rulemaking action, pertaining to New York's submissions, is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have Tribal implications and will not impose substantial direct costs on Tribal governments or preempt Tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).
Executive Order 12898 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, Feb. 16, 1994) directs Federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.”
The NYSDEC did not evaluate environmental justice considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. EPA did not perform an EJ analysis and did not consider EJ in this action. Due to the nature of the action being taken here, this action is expected to have a neutral to positive impact on the air quality of the affected area. Consideration of EJ is not required as part of this action, and there is no information in the record inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.
Environmental protection, Air pollution control, Incorporation by reference, Nitrogen dioxide, Intergovernmental relations, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
42 U.S.C. 7401
Federal Communications Commission.
Proposed rule.
The Commission has before it a petition for rulemaking filed by Vision Broadcasting Networks, Inc. (Petitioner), requesting the allotment of reserved noncommercial educational (NCE) channel *4 to Alamogordo, New Mexico as the community's first local television service.
Comments must be filed on or before September 25, 2023 and reply comments on or before October 10, 2023.
Federal Communications Commission, Office of the Secretary, 45 L Street NE, Washington, DC 20554. In addition to filing comments with the FCC, interested parties should serve counsel for the Petitioner as follows: James L. Oyster, Esq., 108 Oyster Lane, Castleton, Virginia 22716.
Joyce Bernstein, Media Bureau, at (202) 418-1647; or Joyce Bernstein, Media Bureau, at
The Petitioner contends that Alamogordo is a community deserving of a new television broadcast service. In support, the Petitioner states that Alamogordo, with a 2020 population of 30,898 is the county seat of Otero County. Alamogordo has a mayor, six Commissioners, and a city manager; police, fire, public works, and utility departments, planning, engineering, and community and economic development departments; a library, school district, numerous businesses and places of worship; and its own ZIP Code. The Petitioner states its intention to file an application for channel *4, if allotted, and take all necessary steps to obtain a construction permit. The proposed amendment to the Table of TV Allotments warrants consideration. The Petitioner's proposal would result in a first local service to Alamogordo under Allotment Priority (2) of the Commission's television allotment priority standard. The Petitioner demonstrates, and a staff engineering analysis confirms, that channel *4 can be allotted to Alamogordo, New Mexico, consistent with the minimum geographic spacing requirements for new allotments in section 73.623(d) of the Commission's rules. In addition, the allotment point complies with section 73.625(a)(1) of the rules as the entire community of Alamogordo is encompassed by the 35 dBμ contour.
This is a synopsis of the Commission's
This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any proposed information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of
Members of the public should note that all
Television.
For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:
47 U.S.C. 154, 155, 301, 303, 307, 309, 310, 334, 336, 339.
(j) * * *
Federal Communications Commission.
Proposed rule.
In this document, the Federal Communications Commission (Commission) proposes measures to improve consumer confidence and understanding of the security of their connected devices—commonly known as Internet of Things (IoT) devices—that are woven into the fabric of their everyday lives. To provide consumers with the peace of mind that the technology being brought into their homes is reasonably secure, and to help guard against risks to communications, the Commission proposes a voluntary cybersecurity labeling program that would provide easily understood, accessible information to consumers on the relative security of an IoT device or product, and assure consumers that manufacturers of devices bearing the Commission's IoT cybersecurity label adhere to widely accepted cybersecurity standards. In this regard, the Commission's cybersecurity labeling program would help consumers compare IoT devices and make informed purchasing decisions, drive consumers toward purchasing devices with greater security, incentivize manufacturers to meet higher cybersecurity standards to meet market demand, and encourage retailers to market secure devices. The proposed IoT label would offer a trusted, government-backed symbol for devices that comply with IoT cybersecurity standards.
Comments are due on or before September 25, 2023 and reply comments are due on or before October 10, 2023. Written comments on the Paperwork Reduction Act proposed information collection requirements must be submitted by the public and other interested parties on or before October 24, 2023.
You may submit comments, identified by PS Docket No. 23-239, by any of the following methods:
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Effective March 19, 2020, and until further notice, the Commission no longer accepts any hand or messenger delivered filings. This is a temporary measure taken to help protect the health and safety of individuals, and to mitigate the transmission of COVID-19.
Erika Olsen, Acting Chief, Cybersecurity and Communications Reliability Division, Public Safety and Homeland Security Bureau, (202) 418-2868, or by email to
This is a summary of the Commission's
1. As the world continues to become even more interconnected, malicious cyber campaigns become bolder and continue to threaten network security and privacy. Today, there are a wide range of consumer IoT products on the market that communicate over wired and wireless networks. These products are made up of various devices, and are based on many technologies, each of which presents a set of security challenges. Consumer IoT products and their component devices are susceptible to a wide range of relatively common security vulnerabilities including the continued use of default passwords, lack of regular security updates, and weak encryption and insecure authentication. Some IoT products and devices even lack any type of physical security. These vulnerabilities can be exploited by attackers to gain unauthorized access to the device or its data, launch denial of service (DoS) attacks, use the device as part of a larger botnet, or use the device as an interference generator. Compromised devices could also be forced to transmit at times and intervals selected by the attacker to interfere with other devices, either causing them to function improperly or causing a denial of service.
2. The proliferation of consumer IoT devices has opened the door to cyberattacks on consumer products that can have serious privacy and national security consequences, ranging from theft of personal information to disruption of critical infrastructure. In just the first six months of 2021, for example, it was estimated “that more than 1.5 billion attacks have occurred against IoT devices.” Cybersecurity vulnerabilities in IoT products and their devices also open a gateway to larger and more significant intrusions that may threaten national security.
3. Significant work has already been conducted in the realm of IoT cybersecurity. There are also ongoing efforts to address IoT security labeling across both private and public sectors. In the private sector, for example, the Consumer Technology Association (CTA) convened an IoT working group tasked with supporting the advancement of the consumer IoT industry, and produced a white paper addressing the current regulatory approach to IoT. CTA has also convened with various organizations to discuss IoT baseline security capabilities. In addition, researchers at Carnegie Mellon University (CMU) conducted significant research into consumer IoT purchasing and concluded there is a need to “provide consumers with readily accessible information to help them make informed decisions about what they bring into their homes.” International efforts have also advanced in the IoT labeling space.
4. In May 2021, Executive Order No. 14028 also emphasized the importance of IoT cybersecurity, noting the “persistent and increasingly
5. In this respect and pursuant to that E.O., in 2022 the National Institute of Standards and Technology (NIST) issued a White Paper that identified labeling criteria for cybersecurity capabilities of IoT consumer devices, informed by existing consumer product labeling programs and input provided by diverse stakeholders, and issued a summary report about creating a cybersecurity labeling program for consumer IoT products. Additionally, NIST produced a final report, Profile of the IoT Core Baseline for Consumer IoT Products (NISTIR 8425), which identifies cybersecurity capabilities commonly needed for the consumer IoT sector, thereby providing a starting point for what consumers should consider when purchasing IoT products. From these efforts, NIST identified key elements of a labeling program, including encouraging innovation, and being practical and not burdensome, among other elements. In addition, NIST initiated a pilot IoT cybersecurity labeling program, in which it solicited contributions from stakeholders regarding how current and future-planned labeling efforts could align with the NIST recommendations. NIST describes a potential program that would educate the public on IoT cybersecurity capabilities, thereby allowing and enabling consumers in the marketplace to make informed choices about their IoT purchases.
6. The foregoing priorities and efforts, Commission experience guiding compliance assessment programs, and prior Commission action in this space (including the recent
7. The Commission proposes to establish a voluntary cybersecurity labeling program. Given the nature of the IoT market, the Commission believes that the success of a cybersecurity labeling program will be dependent upon a willing, close partnership and collaboration between the federal government, industry, and other stakeholders. While this proposed program would be voluntary, entities that choose to participate in the Commission's program would be required to ensure their IoT devices and products comply with the Commission's program requirements the Commission proposes to codify in its rules. As described below, the Commission proposes the use of certain baseline cybersecurity criteria and the development of product standards informed by those criteria, as well as the parameters for labeling of IoT products that conform with those standards and associated informational requirements. IoT products qualifying for the program would be authorized to use the Commission's proposed new distinctive label signifying their participation in the program and adherence to the standards set. The Commission anticipates that devices or products bearing the Commission's cybersecurity label will be valued by consumers, particularly by those who may otherwise have difficulty determining whether a product they are thinking of buying meets basic security standards. The Commission seeks comment on this proposed approach.
8. In adopting this document, the Commission concludes its consideration of IoT cybersecurity labeling issues related to the Notice of Inquiry in ET Docket No. 21-232 and EA Docket No. 21-233, and close that proceeding as to those issues. See Authorization Program; Protecting Against National Security Threats to the Communications Supply Chain through the Competitive Bidding Program, ET Docket No. 21-232, EA Docket No. 21-233, Notice of Proposed Rulemaking and Notice of Inquiry, 36 FCC Rcd 10578, para. 104 (2021) (Supply Chain NOI). That NOI raised IoT cybersecurity labeling in the specific context of the Commission's existing equipment authorization program, and although the Commission does not formally rule out building on its equipment authorization program at this stage, the Commission believes that its proposals for a voluntary labeling program building on the efforts of NIST and others as reflected in this document represent the most appropriate, and targeted, approach to IoT cybersecurity labeling that the Commission wants to explore at this time. The Commission believes that closing the Supply Chain NOI with respect to IoT cybersecurity labeling issues will focus commenters on this proceeding and spur comments that better reflect that distinct focus. Thus, although the Commission hereby incorporates relevant comments in those dockets into this proceeding, PS Docket 23-239, the Commission also requests that, going forward, interested parties use PS Docket 23-239 for any filings. The Commission directs the Office of Engineering and Technology to provide public notice of the closed issues in ET Docket Nos. 21-232, 21-233.
9. The Commission seeks comment on the scope of IoT devices or products for sale in the United States that should be eligible for inclusion in the Commission's labeling program. To help inform the program's scope, the Commission observes that the practical goal is to provide consumers with a clear, easily understood indicator that the IoT devices displaying the Commission's label satisfy certain baseline cybersecurity requirements and have specific cybersecurity capabilities. In assessing scope, the Commission seeks to ensure that its program would be sufficiently inclusive to be of value to consumers in this regard.
10. The Commission seek comment on whether to focus the program initially on IoT “devices” (as defined in this document) and specifically those wireless devices that intentionally emit radio frequency (RF) energy. The Commission begins by considering NIST's definition of IoT devices. NIST defines IoT devices as those devices that have at least one transducer (sensor or actuator) for interacting directly with the physical world and at least one network interface (
11. The Commission proposes to focus the scope of its program on intentional radiators that generate and emit RF energy by radiation or induction. Such devices—if exploited by a vulnerability—could be manipulated to generate and emit RF energy to cause harmful interference. While the Commission observes that any IoT device may emit RF energy (whether intentionally, incidentally, or unintentionally), in the case of incidental and unintentional radiators, the RF energy emitted because of exploitation may not be enough to be likely to cause harmful interference to radio transmissions. The Commission seeks comment on this view. Does this proposed definition unduly limit the devices that should be eligible for participation in the cybersecurity labeling program? Are there specific unintentional radiators or incidental radiators that should be included in the program, or should they be included generally? Alternatively, should the Commission consider adding these devices to the program at a later date? The Commission also seeks comment on any other ways in which the Commission's proposal might be limiting or should otherwise be expanded. For example, would the exclusion of wired-only IoT devices impact the success, usefulness and effectiveness of this labeling program and confuse consumers, rather than adequately informing them on IoT devices with appropriate network security standards?
12. To ensure that its program is able to be of greatest value to the consumer, the Commission also seeks comment on whether it should focus the cybersecurity labeling program on to IoT “products,” rather than IoT devices as defined above. For such purposes the Commission could define an IoT product consistent with the NIST definition as follows: An IoT device and any additional product components (
13. Further, the Commission seeks comment on whether a program that addresses products (as opposed to just devices) would be more consumer friendly, as the public may find it easier to understand that the product (as a whole) they are looking to purchase meets the IoT security standards, rather than trying to parse which devices (
14. The Commission also seeks comment on whether either definition fully accounts not only for the IoT device or product itself, but also the other components that make the IoT device functional and may be vulnerable to attack. For example, there is a category of IoT devices that do not connect directly to the customer's home Wi-Fi network; instead, they connect to an intermediate communication device (
15. Finally, the Commission recognizes that IoT devices and products have proliferated not only in the non-enterprise space, but also in the workplace from office settings to field settings, from medical settings to industrial settings. As such, the Commission seeks comment on whether to focus the IoT labeling program on consumer IoT devices or products intended for consumer use or include “enterprise” devices or products intended for industrial or business use, or to otherwise tailor the scope of devices and products covered by the labeling program based on their usage. If commenters propose that the program include a broader array of devices or products beyond the non-enterprise setting, what additional considerations should the Commission take into account for these products or devices, including the relative sophistication and specific needs of the purchasers of these devices?
16.
17. In light of this prohibition, the Commission similarly proposes to exclude from the program any communications equipment that now, or in the future, has been placed on the Covered List. The Commission proposes to exclude any IoT device that is produced by an entity identified on the Covered List as producing “covered” equipment. Furthermore, the Commission proposes to exclude from the Commission's labeling program any device or product from a company named on the Department of Commerce's Entity List, the Department of Defense's List of Chinese Military Companies or similar lists.
18. The cybersecurity label has the potential to convey important information about a device or product's security. The Commission finds it could be harmful to consumers to portray such a message on devices or products made by companies that its sister agencies have identified publicly as part of their national security review. The Commission seeks comment on this proposal and on other government lists the Commission should consider. How can the Commission ensure any such proposed exclusion is implemented? Should applicants be required to include a written and signed attestation that the particular equipment for which they seek approval is not “covered” equipment (
19. As discussed above, the Commission believes that close partnership and collaboration between the federal government, industry, and other stakeholders is vital to ensuring the success of the proposed voluntary IoT cybersecurity labeling program. Moreover, a collaborative environment that can leverage the expertise, incentives, and authority of various constituencies in this context would allow for the swift establishment and maturity of the program with broad industry and consumer acceptance that could adapt to a rapidly evolving threat landscape. As such, the Commission proposes a public-private partnership in the oversight and administration of this labeling program, subject to ultimate Commission supervision.
20. In seeking comment on the proposed IoT labeling program, the Commission notes that NIST identified several key elements of a potential labeling program. These include the use of certain recommended baseline product criteria (including both technical product criteria that promotes cybersecurity-related capabilities and non-technical criteria providing important product information), the use or development of requirements and/or standards that are informed by the recommended product criteria, the establishment of a conformity assessment program to assess whether particular products satisfy the developed requirements and/or standards, and the creation of labeling requirements for IoT products (a single label indicating that a product has met the baseline standard, as well as a means to access additional label information for the specific IoT product) that will aid in IoT purchasing decisions by enabling comparisons among products and providing important information about cybersecurity considerations. NIST also noted that “one size does not fit all,” and that multiple solutions might be offered.
21. The Commission proposes to establish a program where the Commission would create and own a new distinctive trademark to be used in a voluntary program for IoT cybersecurity labeling and would take appropriate steps to authorize its overall use in a way that ensures the integrity of the mark and the label. The Commission also proposes to have third parties play integral roles in the management and administration of the labeling program. These entities would, for example, be authorized to conduct activities such as development of requirements or standards for consideration by the Commission, and assessment of IoT devices and products for conformity with those requirements or standards subject to supervision of the Commission. Subject to Commission oversight, third parties could evaluate and authorize the use of the Commission's trademark on an IoT device or product. In this regard, the Commission proposes to incorporate and leverage the specialized expertise of third parties, where appropriate, into its standards, application and review procedures.
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24. If the Commission were to utilize one or more third-party administrator(s),
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27. The Commission seeks comment on this proposed process and accompanying qualifications. Are they an appropriate fit for the Commission's objectives? Are there other options the Commission should consider? For example, could device manufacturers be allowed to perform testing and self-assessment subject to review by a third-party administrator or other entity? What additional qualifications, if any, should the Commission seek in a CyberLAB seeking to perform such as testing and conformity assessments? What additional controls might be necessary, if any, to ensure a CyberLAB remains impartial when testing and assessing IoT devices and products with relevant standards? Should the Commission take into account any national security considerations, or adopt Character Qualifications for CyberLABs? If so, what should these include? Would this accreditation or recognition process impact the Commission's existing, or future, Mutual Recognition Agreements and, if so, how might it be remedied to avoid such impact? Should CyberLABs be located only in the United States? If the Commission should consider CyberLABs located outside the United States, what additional scrutiny, if any, should these entities be given during the Commission's accreditation process? Given the sensitive information that will be shared with CyberLABs, should accreditation or recognition include reviewing CyberLABs internal security practices? If requested by participating firms, should CyberLABs be required to provide information on their own security or internal practices to firms?
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30. The Commission proposes that the IoT security requirements and standards would be developed and implemented through the following process:
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31. The Commission seeks comment on the scope of this work and on this proposed process. What additional factors should be included or otherwise factored into this process? How can the Commission ensure that the views of small, women- and minority-owned businesses, including small IoT manufacturers, are considered in this process? Considering the amount of work that the industry, NIST, and international community have already completed in this area, how could this work be leveraged to promote the swift development of standards for IoT cybersecurity labeling? How long might this work take to complete? The Commission seeks comment on the shortest but most thorough path to accomplishing this work and the minimum amount of time it should take to develop the standards. The Commission recognizes there are other IoT security standards already available and seek comments on whether and why the Commission should consider their adoption. Are there standards for particular IoT devices or classes of IoT devices that are already sufficiently mature such that they could be readily—or more quickly—adopted? Should the program start with those devices or products?
32. The Commission recognizes that while the IoT cybersecurity label would not constitute a guarantee that the participating IoT product can withstand every single cyberattack, it should provide meaningful assurance to consumers that the IoT devices and products that display the label satisfy certain minimum cybersecurity standards and have specific cyber capabilities that demonstrably reduce relevant vulnerabilities appropriate to the class of device. As such, while participation in the IoT labeling program would be voluntary, the Commission proposes to require those who choose to participate to adhere to the specific standards described above, and as recognized by the Commission.
33. The Commission observes that in other contexts, it periodically incorporates by reference various standards established by standards-setting bodies including, but not limited to, the American National Standards Institute (ANSI), Accredited Standards Committee C63 (ANSC C63), and the International Organization for Standardization; and the International Electrotechnical Commission. As the Commission has noted, use of industry-based standards in this context is intended to ensure the integrity of the measurement data associated with an equipment authorization. The Commission recognizes that, in addressing cybersecurity standards, timely adoption and speed are a prime benefit of a multi-stakeholder, industry-led approach, which militate in favor of a more streamlined process than the full Commission-level review described above. Accordingly, the Commission proposes if standards are developed by outside bod(ies), that they submit the IoT security standards for acceptance by the Commission prior to utilization for testing and other conformity evaluation. In this regard, the Commission proposes to direct PSHSB to place the standards on Public Notice for comment in accordance with the rulemaking requirements of the Administrative Procedure Act and, subsequent to reviewing any comments received, accept the standards as proposed or with amendments as warranted by the record. Is this sufficient, or do commenters believe a Commission-level rulemaking is needed? Alternatively, could an outside body adopt the standards and attest their conformity with the broader NIST criteria in a manner acceptable to the Commission, without the need for further action by the Commission? What other streamlined processes might be appropriate for prompt review and validation of IoT security standards?
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38. The Commission seeks comment on where authorized program participants should affix the security IoT label. If the Commission's program addresses devices (rather than products), should it be affixed on each IoT device or on the product packaging? Should equipment that includes a user display screen be permitted to display the label on the user display screen rather than on the device itself? Should there be limitations or prescriptions on how companies and third-party resellers can use the mark in advertising or sales displays, products or websites? The Commission also seeks comment on other approaches with regard to what the label should display and where the label should be placed.
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41. Given the static nature of the information stored in the QR code, the Commission urges commenters to consider the types of information that would be appropriate for consumer decision-making without needing to have the information stored in the QR code updated. Alternatively, the QR code could merely provide a link to the IoT registry page for the device or product in question, discussed below.
42. The Commission proposes to require that the manufacturer disclose the guaranteed minimum support period for an IoT device or product, during which the manufacturer commits to identify and patch security vulnerabilities in the product.
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44. The QR code and/or the URL associated with the IoT label would include a link to the IoT registry, which would provide detailed information on the IoT product through the product's web page within the IoT registry. The Commission seeks comment on what information should be included within the IoT registry and associated with the QR codes. If the URL is the sole piece of information associated with the QR code, how should registry information be presented or organized to ensure consumer-friendliness?
45. The Commission proposes that, among other information, the IoT registry might provide the following information for each approved device (or product): (1) how to operate the device securely (
46. The Commission further asks whether such IoT registry might also be used by retailers to assist them with choosing products that carry the IoT label for sale in their stores and whether retailers may use the registry to confirm that the products that they market legitimately bear the FCC's IoT label. If so, should the registry maintain different sets of information for general consumers and retailers? What additional information would retailers want to see but is not relevant to general consumers?
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48. The Commission seeks comment on these proposals, and on any other ways to ensure consumers have up-to-date information regarding IoT devices or products labeled under the program, as well as have an understanding that the FCC cybersecurity label is not a guarantee against all cybersecurity threats. What additional information might be warranted to help minimize the potential for customer confusion?
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50. The Commission seeks comment on this proposal to employ a renewal process. Should the Commission consider other timeframes on a shorter or longer basis? Should there be an event in the product's life-cycle or a security event that should trigger the applicant to file for an early renewal? When would such an event trigger early renewal, versus filing updated information with the program administrator and updating the IoT registry? Similarly, are there incidents or developments that might warrant the removal of the IoT cybersecurity label, and what might those circumstances be? After the IoT device or product is authorized for the first time, what supporting documents should the program participants provide to validate and renew their authorization to use the label? Must it be retested annually? How should the IoT registry reflect that an authorization to use the label is out of date?
51. The Commission also seeks comment on the interplay between the proposed IoT cybersecurity labeling program and its current equipment authorization rules. Given that the review process for the proposed program will likely not be administered in the same manner, and by the same entities, as are involved in its equipment authorization program, the Commission proposes that they generally operate in a distinct manner. However, given that equipment subject to the requirements of the Commission's equipment authorization rules must satisfy those rules before they can be manufactured and sold in the United States, the Commission proposes that approval be granted under the cybersecurity labeling program only after any applicable requirements of the equipment authorization rules have been satisfied for the relevant device or product. The Commission seeks comment on these proposals and on any other ways in which it should address the potential interplay between the proposed IoT cybersecurity labeling program and its current equipment authorization rules.
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54. Conversely, where a program participant has received authorization to utilize the Commission's IoT Label and has appropriately maintained the device's security measures, does this represent an indicium of reasonableness that might serve as a defense or safe harbor against liability for damages resulting from a cyber incident,
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• A glossary of applicable technical terms written in plain English;
• General information about conformity assessment and how cybersecurity properties are evaluated;
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• Security considerations for end-of-life IoT devices and implications for functionality if the device is no longer connected;
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• Contact information for the labeling program and information on how consumers can lodge a complaint regarding a product label.
56. The Commission seeks comment on anticipated costs of such a consumer education campaign particularly with regard to upfront costs that will be incurred to start the program. The Commission also seeks comment on mechanisms for conducting the outreach consistent with the constraints on federal outreach and the possibility of public or private partnerships that may facilitate a consumer education campaign.
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59. The Commission tentatively concludes that it has authority to adopt the proposed IoT labeling program. In particular, section 302(a) of the Communications Act authorizes the FCC “consistent with the public interest, convenience, and necessity, [to] make reasonable regulations (1) governing the interference potential of devices which in their operation are capable of emitting radio frequency energy by radiation, conduction, or other means in sufficient degree to cause harmful interference to radio communications; . . .” While this program would be voluntary, entities that elect to participate would need to do so in accordance with the regulations the Commission adopts in this proceeding, including but not limited to the IoT security standards, compliance requirements, and the labeling program's operating framework. The Commission tentatively concludes that the standards the Commission proposes to apply when administering the proposed labeling program fall within the scope of “reasonable regulations . . . governing the interference potential
60. The Commission has exercised authority in other contexts to secure both software and firmware to prevent unauthorized modification that would compromise a device or the data it transmits. For example, in adopting technical rules for the Citizens Broadband Radio Service (CBRS), the Commission required end user devices to “contain security features sufficient to protect against modification of software and firmware by any unauthorized parties” and required that such devices “be able to protect the communication data that are exchanged between these elements.” The Commission adopted a further obligation for identified security vulnerabilities to be resolved on a going-forward basis, and encouraged industry to develop best practices for end-to-end security that can be validated through the certification process. By way of further example, in the 5 GHz band, the Commission, noting the potential for reprogramming of unlicensed national information infrastructure (U-NII) devices to operate outside of authorized device parameters, similarly adopted security measures requiring manufacturers to prevent software changes that would result in this outcome. Declining to mandate specific software security measures, the Commission required manufacturers instead to document their methods. In addition, the Commission's rules require security protocols and procedures to ensure the integrity of transmission related between and among white space devices and databases.
61. The Commission's proposed labeling program rules are intended to ensure that IoT devices have implemented certain minimum cybersecurity protocols to prevent their being hacked by bad actors who could cause the devices to cause harmful interference to radio communications. As noted above, in the 5 GHz context, the Commission identified concerns about security vulnerabilities that could, if exploited, lead equipment to operate outside established parameters, with the associated risk that doing so could cause harmful interference. As also noted above, interference issues also could arise if security vulnerabilities were exploited to use a device as an interference generator, or to transmit at times and intervals selected by the attacker to interfere with other devices. The Commission anticipates that this could be a more pervasive risk, and the Commission seeks comment on that predictive judgment. Furthermore, under the Act, the Commission's other obligations in this regard can encompass not only the prevention of interference to other devices, but the need to mitigate against the risk of interference to covered equipment. In this regard, and in considering the potential need to encompass not only devices but, ultimately, products in order to adequately secure the IoT ecosystem and empower consumer choices, the Commission believes such an approach is reasonable under sections 333 and 302(a) of the Act.
62. In particular, the Commission also seeks comment on the authorities that would support including additional IoT products and devices within the proposed IoT labeling Program. For example, section 302(a)(2) of the Act provides the Commission with the authority to adopt reasonable regulations “establishing minimum performance standards for home electronic equipment and systems to reduce their susceptibility to interference from radio frequency energy.” Does this authority support reasonable regulations that may include the regulations proposed herein? Section 333 states: “No person shall willfully or maliciously interfere with or cause interference to any radio communications of any station licensed or authorized by or under this chapter or operated by the United States Government.” Does this authority, possibly coupled with other provisions, provide a basis for the Commission's proposed action? Is the Commission's proposal necessary or reasonably ancillary to the execution of its implementation of any or all of these statutory responsibilities?
63. Is it reasonable for the Commission's labeling program to not only guard against the risk that covered devices and products cause harmful interference, but also to guard against other risks, including the risk of interference to those covered devices and products consistent with policy goals underlying sections 302(a)(2) and 333 of the Act? For example, the Commission tentatively concludes that its authority to adopt “reasonable regulations” to guard against harmful interference under section 302 of the Act authorizes a labeling program that applies a set of criteria or standards that address not only risks of harmful interference
64. The Commission also tentatively concludes that its authority under section 302(a)(1) of the Act to adopt reasonable regulations consistent with the public interest to guard against interference provides the Commission flexibility to tailor the proposed labeling program in other ways. For example, the Commission believes that, in adopting reasonable regulations consistent with the public interest under section 302, the Commission has authority to exclude equipment from the Covered List from participating in the voluntary labeling program, consistent with the objectives of sections 2(a) and (d) of the Secure and Trusted Communications Networks Act of 2019. The Commission further tentatively concludes that its section 302 authority likewise enables it to rely on third parties in carrying out the implementation details of the proposed labeling program. In particular, section 302(e) of the Act authorizes the Commission to delegate equipment testing and certification to private laboratories, and the Commission notes in that regard that it already has relied in part on third parties in carrying out its equipment authorization rules. The Commission also seeks comment on whether its authority to adopt reasonable regulations in the public interest to carry out the objectives of section 302 authorizes the Commission to rely on a third party IoT registry administrator as well as rely on third parties to perform some of the functions described above.
65. The Commission also seeks comment on whether section 301 of the Act also provides the Commission with authority to include in its labeling program IoT products and devices that might receive harmful interference from an unauthorized cyber event. The Commission also recognizes, for example, that cyberattacks utilizing IoT vulnerabilities may not only give rise to harmful interference concerns, but can also effectuate physical threats to the world around us—degrading wireless networks, for example, changing service settings on smart appliances, or—more catastrophically—shutting down an industrial control system. Are there additional authorities that support the inclusion of additional IoT products and devices that do not emit RF externally for purposes of communications, such as unintentional or incidental radiators, or wired-only IoT?
66. The Commission seeks comment broadly its legal authority under the Communications Act, or any other source, to implement the proposed voluntary IoT labeling program, including its authority pursuant to Titles II and III as well as its authority
67. The Commission further seeks comment on how it may utilize enforcement authorities under the Act, including the potential imposition of penalties under section 503 and cease and desist orders under section 312 for those entities that voluntarily participate in the labeling program, but fail to continue to comply with the Commission's regulations. Would participants in the labeling program already be holders of authorizations within the meaning of section 503(b)(5) of the Act, or are there steps the Commission should take to structure the labeling program so that participation would itself satisfy that provision? Are there any additional avenues for enforcement or oversight of the program's participants or of a third-party security certifying body? What trademark remedies are available to the Commission? Are there other agencies that might contribute to program enforcement?
68. The Commission, as part of its continuing effort to advance digital equity for all,
69. Within the scope of a consumer IoT product, the following baseline product criteria are recommended by NIST to define the cybersecurity outcomes expected of IoT products and IoT product developers as part of a consumer IoT product labeling program. Most criteria concern the IoT product directly and are expected to be satisfied by software and/or hardware means implemented in the IoT product. Some criteria apply to the IoT product developer rather than to the IoT product directly. These criteria are expected to be satisfied through actions and supported by assertions and evidence from the developer rather than from the IoT product itself.
70.
• The IoT product can be uniquely identified by the customer and other authorized entities (
• The IoT product uniquely identifies each IoT product component and maintains an up-to-date inventory of connected product components.
• The customer can change the configuration settings of the IoT product via one or more IoT product components.
• The IoT product applies configuration settings to applicable IoT components.
• Each IoT product component protects data it stores via secure means, including the ability to delete or render inaccessible data stored that is either collected from or about the customer, home, family, etc.
• When data is sent between IoT product components or outside the product, protections are used for the data transmission.
• Each IoT product component controls access (to and from) all interfaces (
a. Use and have access only to interfaces necessary for the IoT product's operation. All other channels and access to channels are removed or secured.
b. For all interfaces necessary for the IoT product's use, access control measures are in place (
c. For all interfaces, access and modification privileges are limited.
• The IoT product executes means via some, but not necessarily all, components to protect and maintain interface access control. At a minimum, the IoT product shall:
a. Validate that data sent to other product components matches specified definitions of format and content.
b. Prevent unauthorized transmissions or access to other product components.
c. Maintain appropriate access control during initial connection (
• Each IoT product component can receive, verify, and apply verified software updates.
• The IoT product implements measures to keep software on IoT product components up to date (
• The IoT product captures and records information about the state of IoT components that can be used to detect cybersecurity incidents affecting or affected by IoT product components and the data they store and transmit.
• Throughout the development lifecycle, the IoT product developer creates or gathers and stores information relevant to the cybersecurity of the IoT product and its product components, including:
a. Assumptions made during the development process and other expectations related to the IoT product, including:
i. Expected customers and use cases.
ii. Physical use, including security of the location of the IoT product and its product components (
iii. Network access and requirements (
iv. Data created and handled by the IoT product.
v. Any expected data inputs and outputs (including error codes, frequency, type/form, range of acceptable values, etc.).
vi. The IoT product developer's assumed cybersecurity requirements for the IoT product.
vii. Any laws and regulations with which the IoT product and related support activities comply.
viii. Expected lifespan and anticipated cybersecurity costs related to the IoT product (
b. All IoT components, including but not limited to the IoT device, that are part of the IoT product.
c. How the baseline product criteria are met by the IoT product across its product components, including which baseline product criteria are not met by IoT product components and why (
d. Product design and support considerations related to the IoT product,
i. All hardware and software components, from all sources (
ii. IoT platform used in the development and operation of the IoT product, its product components, including related documentation.
iii. Protection of software and hardware elements implemented to create the IoT product and its product components (
iv. Consideration of the known risks related to the IoT product and known potential misuses.
v. Secure software development and supply chain practices used.
vi. Accreditation, certification, and/or evaluation results for cybersecurity- related practices.
vii. The ease of installation and maintenance of the IoT product by a customer (
e. Maintenance requirements for the IoT product,
i. Cybersecurity maintenance expectations and associated instructions or procedures (
ii. How the IoT product developer identifies authorized supporting parties who can perform maintenance activities (
iii. Cybersecurity considerations of the maintenance process (
f. The secure system lifecycle policies and processes associated with the IoT product,
i. Steps taken during development to ensure the IoT product and its product components are free of any known, exploitable vulnerabilities.
ii. The process of working with component suppliers and third-party vendors to ensure the security of the IoT product and its product components is maintained for the duration of its supported lifecycle.
iii. Any post end-of-support considerations, such as the discovery of a vulnerability which would significantly impact the security, privacy, or safety of customers who continue to use the IoT product and its product components.
g. The vulnerability management policies and processes associated with the IoT product, including:
i. Methods of receiving reports of vulnerabilities (see Information and Query Reception below).
ii. Processes for recording reported vulnerabilities.
iii. Policy for responding to reported vulnerabilities, including the process of coordinating vulnerability response activities among component suppliers and third-party vendors.
iv. Policy for disclosing reported vulnerabilities.
v. Processes for receiving notification from component suppliers and third- party vendors about any change in the status of their supplied components, such as end of production, end of support, deprecated status (
• The IoT product developer can receive information related to the cybersecurity of the IoT product and its product components and can respond to queries related to cybersecurity of the IoT product and its product components from customers and others, including:
a. The ability of the IoT product developer to identify a point of contact to receive maintenance and vulnerability information (
b. The ability of the IoT product developer to receive queries from and respond to customers and others in the IoT product ecosystem about the cybersecurity of the IoT product and its components.
• The IoT product developer can broadcast to many/all entities via a channel (
a. Updated terms of support (
b. End of term of support or functionality for the IoT product.
c. Needed maintenance operations.
d. New IoT device vulnerabilities, associated details, and mitigation actions needed from the customer.
e. Breach discovery related to an IoT product and its product components used by the customers, associated details, and mitigation actions needed from the customer (if any).
• The IoT product developer can distribute information relevant to cybersecurity of the IoT product and its product components to alert appropriate ecosystem entities (
a. Applicable documentation captured during the design and development of the IoT product and its product components.
b. Cybersecurity and vulnerability alerts and information about resolution of any vulnerability.
c. An overview of the information security practices and safeguards used by the IoT product developer.
d. Accreditation, certification, and/or evaluation results for the IoT product developer's cybersecurity-related practices.
e. A risk assessment report or summary for the IoT product developer's business environment risk posture.
• The IoT product developer creates awareness and provides education targeted at customers about information relevant to cybersecurity of the IoT product and its product components, including:
a. The presence and use of IoT product cybersecurity capabilities, including at a minimum:
i. How to change configuration settings and the cybersecurity implications of changing settings, if any.
ii. How to configure and use access control functionality (
iii. How software updates are applied and any instructions necessary for the customer on how to use software update functionality.
iv. How to manage device data including creation, update, and deletion of data on the IoT product.
b. How to maintain the IoT product and its product components during its lifetime, including after the period of security support (
c. How an IoT product and its product components can be securely re-provisioned or disposed of.
d. Vulnerability management options (
e. Additional information customers can use to make informed purchasing decisions about the security of the IoT product (
This document seeks comment on potential new or revised proposed information collection requirements. Therefore, the Commission seeks comment on potential new or revised collections subject to the Paperwork Reduction Act of 1995. If the Commission adopts any new or revised final information collection requirements when the final rules are adopted, the Commission will publish a notice in the
71. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities by the policies and rules proposed in the document. The IRFA is set forth in Appendix B of the document. Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the document, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the document and IRFA (or summaries thereof) will be published in the
72. The document proposes a voluntary cybersecurity labeling program for the Internet of Things (IoT) to improve consumer confidence and understanding of security for IoT devices and/or products. Such IoT devices and products are susceptible to a wide range of security vulnerabilities, which can be exploited by attackers to gain unauthorized access to an IoT device or IoT product and its data. Accordingly, providing consumers with a label certifying that an IoT device and/or product satisfies certain baseline cybersecurity standards and has specific cybersecurity capabilities allows a consumer to understand the relative security risk that an IoT device and/or product may pose when making a purchase. The document seeks comments on the scope of the proposed cybersecurity labeling program, including comments on proposed definitions of an IoT device and an IoT product. It also seeks comments on specific technical criteria for the cybersecurity labeling program, including whether other criteria in addition to the IoT Criteria developed by the National Institute of Standards and Technology (NIST), should be considered, and whether and how to develop administrable standards. Finally, the document invites comments on how to administer the cybersecurity labeling program, the appropriate means to fund the costs of running the program, and what program auditing, enforcement, disqualification and certification revocation processes and procedures should be put in place to ensure that the labeling program is a trusted and valuable resource that consumers can reply upon to assess the security of the IoT devices and/or products that exhibit the label.
73. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules and policies, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning has the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.
74.
75. Next, the type of small entity described as a “small organization” is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000 or less to delineate its annual electronic filing requirements for small exempt organizations. Nationwide, for tax year 2020, there were approximately 447,689 small exempt organizations in the U.S. reporting revenues of $50,000 or less according to the registration and tax data for exempt organizations available from the IRS.
76. Finally, the small entity described as a “small governmental jurisdiction” is defined generally as “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” U.S. Census Bureau data from the 2017 Census of Governments indicate that there were 90,075 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Of this number there were 36,931 general purpose governments (county, municipal and town or township) with populations of less than 50,000 and 12,040 special purpose governments—independent school districts with enrollment populations of less than 50,000. Accordingly, based on the 2017 U.S. Census of Governments data, the Commission estimates that at least 48,971 entities fall into the category of “small governmental jurisdictions.”
77.
78.
79. The Commission's small business size standards with respect to fixed
80. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time the Commission is not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.
81.
82.
83. The voluntary cybersecurity labeling program for IoT devices and/or products to provide consumers with accessible information on the relative security of these IoT devices and/or products that the Commission proposes in the document may impose new reporting, recordkeeping, notice or other compliance requirements on small entities that choose to participate in the program. The requirements may include application or other conformance reporting, licensing, certification and/or other reporting obligations.
84. The proposals in the document build upon other actions the Commission has taken to protect and secure public safety. Accordingly, the proposals being made in this document may require additional analysis and mitigation activities by small and other IoT manufacturers in order to satisfy certain technical criteria or standards for the ability to display an IoT cybersecurity label. At this time, the Commission is not in a position to determine whether the requirements that may be adopted for participants in the proposed cybersecurity labeling program will require small entities to hire professionals in order to comply and cannot quantify the cost of compliance with the potential requirements and obligations that may result in this proceeding. Among other things considered, the Commission inquires about the options for it to address the costs of running and administering the labeling program including whether there may be application fees charged by third-parties administering the program and whether there is oversight the Commission should exercise over such charges. The Commission seeks comment on these issues and anticipate that the information it receives in comments will address these matters and any broader cost issues for small entities that may choose to participate in the proposed labeling program.
85. In light of the importance of mark integrity and the need to build consumer confidence and trust in the security of IoT devices and products that will display the Commission's IoT label, regardless of the size of the entity seeking to participate in the proposed cybersecurity labeling program, adherence by all participants to the same Commission rules is necessary. However, the Commission expects that the comments it receives will help it identify and evaluate relevant matters for small entities before adopting final rules for the labeling program, including any compliance costs and burdens that may result from the proposals and other matters discussed in the document.
86. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.”
87. The Commission's development of a voluntarily cybersecurity labeling program for the IoT products and devices builds on the work of the National Institute of Standards and Technology (NIST) which produced labeling criteria for cybersecurity capabilities of IoT consumer devices. Using the work of NIST as a foundation has the potential to minimize the
88. In the document, the Commission considers and seeks comment on various compliance requirements that it could consider in advancing a voluntary cybersecurity labeling program. More specifically, the Commission considered the NIST definition for IoT devices which defines IoT devices as devices that have at least one transducer (sensor or actuator) for interacting directly with the physical world and at least one network interface (
89. Although the Commission includes in its definition devices that intentionally emit radio frequency energy, it considered whether there are unintentional radiators or incidental radiators that should be included in the program, and if so whether the Commission should revise the definition to omit the word “intentional.” Alternatively, the Commission inquires if it should consider adding unintentional or incidental radiating devices to the program at a later date. In addition, while the Commission refers to devices and products in the document, it inquires whether it should expand the proposed scope of the cybersecurity labeling program and definition of devices beyond IoT devices to apply to IoT products. Under this expanded alternative the Commission could define an IoT product as an IoT device and any additional product components (
90. Regarding the content and updating of the IoT label on the physical device, product, or packaging, the Commission believes the simple approach proposed in the document will result in cost savings which could minimize the impact of these requirements for small entities. The Commission's proposal is to have the physical device, product, or packaging simply indicate that the manufacturer participates in the FCC's labeling program by having the FCC mark along with the related QR Code and/or the URL to the IoT registry. The detailed information on the IoT device or product will be made available on the device or product's web page within the IoT registry using an QR Code and/or a URL. When the device or product's web page within the IoT registry is updated to indicate for example, that the device or product's authorization is outdated, and/or the device or product is no longer maintained or updated, using the QR Code and/or the URL provided next to the FCC mark the information can be accessed on the device or product's web page within the IoT registry. Updating requirements for the device or product's web page within the IoT registry could alleviate the need for the Commission to adopt additional notification requirements which would increase costs for small entities.
91. The Commission also considered and seeks comment on alternatives on how to address the end-of-life issues for devices previously receiving authorization under the program. For example, the Commission considered whether the label should include the specific date, or the year the authorization was awarded, or an expiration date. Further, the Commission considered whether it would be sufficient to provide consumers with additional information via the QR Code regarding the current security status of a device, and whether the QR Code-linked website should indicate when the label was issued by the Commission, and when the information on the web page last updated.
92. In the area of accessibility, to ensure that any IoT cybersecurity label information the Commission adopts is accessible to persons with disabilities, the Commission considered an alternative that would alleviate the need for the Commission to establish and impose new accessibility requirements on small entities and other participants in the labeling program. Consistent with its approach with broadband consumer labels in 2022, in the document the Commission considered and seeks comment on relying on the existing legal requirements in the Americans with Disabilities Act (ADA) and following the guidance developed by the Web Accessibility Initiative, which the Consumer Advisory Committee (CAC) determined is the best method to ensure accessibility to printed and online information is made available by providers.
93. Further, rather than proposing rules at this juncture, in the document the Commission seeks comment on costs associated with the proposed cybersecurity IoT labeling program, and on investigation, disqualification and enforcement processes to maintain the integrity of the devices or products that will be labeled under the program. The Commission's actions on all of these matters have the potential to minimize the impact of the cybersecurity IoT labeling program the Commission adopts on small entities.
94. Regarding investigation, disqualification and enforcement, as discussed in the document, the Commission considered and seeks comment on whether to have random audits of IoT devices or products to confirm continued compliance; whether the Commission should adopt disqualifications procedures similar to those adopted for the ENERGY STAR program by the Environmental Protection Agency (EPA); what additional non-compliance or disqualification measures would be appropriate in addition to authorization revocation, and whether there should be an appeal process available to applicants that are denied authority to use the IoT label. Additionally, the Commission seeks comment on what recordkeeping and audit requirements could be adopted for purposes of compliance review.
95. The Commission expects to more fully consider the economic impact and alternatives for small entities following
96. The proposed action is taken under authority found in sections 1, 2, 4(i), 4(n), 301, 302, 303(b), 312, 333, and 503 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(n), 301, 302a, 303(b), 312, 333, 503; and the IoT Cybersecurity Improvement Act of 2020, 15 U.S.C. 278g-3a to 278g-3e.
97. None.
National Highway Traffic Safety Administration (NHTSA).
Notice of proposed rulemaking; correction.
This document corrects technical errors in the proposed rule that appeared in the
Comments for the proposed rule published on August 17, 2023, at 88 FR 56128, must be received on or before October 16, 2023.
Joseph Bayer, CAFE Program Division Chief, Office of Rulemaking, National Highway Traffic Safety Administration, 1200 New Jersey Avenue SE, Washington, DC 20590; email:
Prior to publication of the proposal for new CAFE standards for passenger cars and light trucks and new fuel efficiency standards for HDPUVs, NHTSA noticed several minor typographical errors that could not be corrected prior to printing. The needed corrections to the preamble replace the target function coefficient numbers in Table II-3, Table III-4, Table III-12, Table III-13, Table III-15, Table III-16, Table III-18, Table III-19, Table III-21, and Table III-22. NHTSA notes that these modifications do not change the values but simply provide additional significant figures for the coefficients. For the reader's reference, NHTSA has also made the corresponding changes to the target coefficient tables in the accompanying Technical Support Document (TSD) and Preliminary Regulatory Impact Assessment (PRIA), which are found in the docket for this rulemaking and on the agency's website. The needed correction to the proposed regulatory text clarifies that NHTSA is proposing to eliminate 5-cycle and alternative approvals for off-cycle fuel consumption incentive values (FCIVs) starting in MY 2027. This document also corrects the proposed regulatory text to clarify that multipliers for advanced, innovative, and off-cycle technologies for heavy-duty pickup trucks and vans are available through model year 2027.
In proposed rule FR Doc. 2023-16515, beginning on page 56128 in the issue of August 17, 2023, make the following corrections, in the
1. On page 56260, Table III-3 is corrected to read as follows:
2. On page 56261, Table III-4 is corrected to read as follows:
3. On page 56266, Table III-12 is corrected to read as follows:
4. On page 56266, Table III-13 is corrected to read as follows:
5. On page 56267, Table III-15 is corrected to read as follows:
6. On page 56267, Table III-16 is corrected to read as follows:
7. On page 56269, Table III-18 is corrected to read as follows:
8. On page 56269, Table III-19 is corrected to read as follows:
9. On page 56270, Table III-21 is corrected to read as follows:
10. On page 56270, Table III-22 is corrected to read as follows:
In proposed rule FR Doc. 2023-16515, beginning on page 56128 in the issue of August 17, 2023, make the following corrections, in the Regulatory Text section.
(b) * * *
(3)
(4)
(c) * * *
(4)
(5)
(a) * * *
(9)
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Notice of public hearing.
The National Highway Traffic Safety Administration (NHTSA) is announcing a virtual public hearing to be held September 28, 2023, on its proposal for the “Corporate Average Fuel Economy Standards for Passenger Cars and Light Trucks for Model Years 2027-2032 and Fuel Efficiency Standards for Heavy-Duty Pickup Trucks and Vans for Model Years 2030-2035,” which was signed on July 28, 2023. This hearing also allows the public to provide oral comments regarding the Draft Environmental Impact Statement that accompanies the proposal. An additional session will be held on September 29, if necessary, to accommodate the number of people that sign up to testify.
NHTSA will hold a virtual public hearing on September 28, 2023. An additional session will be held on September 29, if necessary, to accommodate the number of people that sign up to testify. The hearing will convene at 9 a.m. Eastern time and will conclude when the last pre-registered speaker has testified but no later than 6 p.m. Eastern time. All hearing attendees, including those who do not intend to provide testimony, should preregister by September 22, 2023. Please refer to the
The link to register will be available at
For questions regarding how to register to attend the hearing, please contact NHTSA's Office of Communications at
NHTSA, on behalf of the DOT, is proposing new corporate average fuel economy (CAFE) standards for passenger cars and light trucks for MYs 2027-2032, and new fuel efficiency standards for heavy-duty pickup trucks and vans (HDPUVs) for MYs 2030-2035. This proposal responds to NHTSA's statutory obligation to set CAFE and HDPUV standards at the maximum feasible level that the agency determines vehicle manufacturers can achieve in each MY, in order to improve energy conservation. Specifically, NHTSA is proposing new fuel economy standards for passenger cars and light trucks and fuel efficiency standards for model years (MYs) 2027-31 that increase at a rate of 2 percent per year for passenger cars and 4 percent per year for light trucks, and new fuel efficiency standards for heavy-duty pickup trucks and vans (HDPUVs) for MYs 2030-2035 that increase at a rate of 10 percent per year. NHTSA is also setting forth proposed augural standards for MY 2032 passenger cars and light trucks, which would increase at 2 percent and 4 percent year over year, respectively, as compared to the prior year's standards. In addition, NHTSA is also proposing certain technical amendments to clarify and streamline our compliance regulations. The proposal was signed on July 28, 2023, and was published in the
NHTSA will begin pre-registering speakers for the hearing upon publication of this document in the
•
•
If you do not receive your confirmation email(s), or have further questions about this hearing, please email
Each commenter will have 3 minutes to provide oral testimony. NHTSA may ask clarifying questions during the oral presentations but will not otherwise respond to the presentations at that time. NHTSA recommends submitting the text of your oral comments as written comments to the rulemaking docket or to the Draft EIS docket, as appropriate. Written statements and supporting information submitted during the comment period will be considered with the same weight as oral comments and supporting information presented at the public hearing. If identical comments are submitted by the same commenter more than once to the docket, NHTSA does not consider those comments to carry more weight than if they had been submitted only once. If the oral testimony is specifically intended to reference the Draft EIS, please mention that in your opening remarks.
Please note that any updates made to any aspects of the hearing logistics, including any change to the date of the hearing or a potential additional session on September 29, 2023, will be posted online at the CAFE website,
NHTSA has established a docket for the proposal under Docket ID No. NHTSA-2023-0022 and a separate docket for the Draft EIS at Docket ID No. NHTSA-2022-0075. Relevant documents and information can also be accessed at NHTSA's CAFE website, at
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding; whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by September 25, 2023 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding; whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
Comments regarding this information collection received by September 25, 2023 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Disease prevention is the most effective method for maintaining a healthy animal population and for enhancing the United States' ability to compete in the world market of animal and animal product trade. Tuberculosis (TB) is a contagious disease of both animals and humans. Bovine TB, caused by
Failure to collect this information would make it much more difficult for APHIS to prevent, detect, control, and eradicate TB and brucellosis from the United States. Outbreaks of the diseases would have severe economic consequences on the U.S. cattle industry.
U.S. Committee on the Marine Transportation System.
Notice of availability; request for comments.
This notice announces the availability of a draft guidance document, the National Guidance for Industry on Responding to Munitions and Explosives of Concern in U.S. Federal Waters. The U.S. Committee on the Marine Transportation System invites public comment on the draft guidance.
Submit comments on or before September 25, 2023.
The draft guidance can be viewed through the U.S. Committee on the Marine Transportation System's website at
Michael Heard Snow, Senior Policy Advisor, U.S. Committee on the Marine Transportation System, 1200 New Jersey Ave. SE, Washington, DC 20590-0001; telephone (202) 805-0570; email
Until 1972, one of the primary mechanisms for the disposal of munitions and explosives of concern (MEC), including unexploded ordnance, discarded military munitions, and munitions constituents—all of which may pose explosive hazards—was to dispose of them at sea. This disposal, in addition to other mechanisms, has led to a significant buildup of MEC in Federal waters on the outer continental shelf (OCS) with a concentration along the eastern seaboard of the United States. As the demand for renewable energy continues to grow, offshore energy, with a focus on offshore wind, is rapidly increasing. The Biden-Harris Administration has set a goal of significantly increasing the nation's offshore wind energy capacity to 30 gigawatts by 2030. However, many of the sites leased and targeted for development of these projects overlap with areas where MEC have settled over the decades. To answer questions on how to address the discovery of MEC through a whole-of-government process, the Bureau of Safety and Environmental Enforcement (BSEE) approached the U.S. Committee on the Marine Transportation System (CMTS), a Congressionally mandated, Cabinet-level interagency body, to convene Federal agencies to develop this guidance. This document is intended to help Federal agencies coordinate their statutory and regulatory authorities to approve, regulate, or permit the detonation, removal, or mitigation of MEC on the OCS.
The draft national guidance describes the process recommended to industry when responding to MEC discovered in Federal waters and on the OCS during the development of offshore energy installations. This includes procedures for industry to inform the government of MEC discoveries on the OCS, a process to safely develop a risk assessment, and MEC operational response plan. The draft guidance also outlines the interagency process for the government to respond to such discoveries and work with industry.
The CMTS invites public comments on the draft guidance concerning the proposed process for addressing the discovery of munitions and explosives of concern on the U.S. outer continental shelf during offshore energy development. The CMTS will consider the public comments submitted during this comment period in issuing any final National Guidance.
Issued in Washington, DC.
Commission on Civil Rights.
Notice of virtual business meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act, that the New York Advisory Committee (Committee) to the U.S. Commission on Civil Rights will hold a public meeting via Zoom. The purpose of the meeting is to discuss major themes and issues that have emerged from panel briefings I through VII on the New York child welfare system and its impact on Black children and families.
Friday, September 15, 2023, from 1:00 p.m.-3:00 p.m. Eastern Time.
The meeting will be held via Zoom.
Mallory Trachtenberg, DFO, at
This Committee meeting is available to the public through the registration link above. Any interested member of the public may listen to the meeting. An open comment period will be provided to allow members of the public to make a statement as time allows. Per the Federal Advisory Committee Act, public minutes of the meeting will include a list of persons who are present at the meeting. If joining via phone, callers can expect to incur regular charges for calls they initiate over wireless lines, according to their wireless plan. The Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Closed captioning is available by selecting “CC” in the meeting platform. To request additional accommodations, please email
Members of the public are entitled to submit written comments; the comments must be received in the regional office within 30 days following the meeting. Written comments may be emailed to Mallory Trachtenberg at
Records generated from this meeting may be inspected and reproduced at the Regional Programs Coordination Unit Office, as they become available, both before and after the meeting. Records of the meetings will be available via
Census Bureau, Department of Commerce.
Notice of request for nominations.
The Census Bureau is requesting nominations of members representing stakeholder organizations, groups, interests, and viewpoints to the 2030 Census Advisory Committee (Committee). The Census Bureau will consider nominations received in response to this notice, as well as from other sources. The
Please submit nominations by September 30, 2023.
Please submit nominations to the 2030 Census Advisory Committee email address,
Shana J. Banks, Chief, Advisory Committee Branch, Office of Program, Performance and Stakeholder Integration (PPSI), Census Bureau, by telephone at 301-763-3815 or by email at
The Committee is established under agency authority pursuant to 15 U.S.C. 1512, and in accordance with the provisions of the Federal Advisory Committee Act, as amended, (FACA), 5 U.S.C. 1001
1. The Committee will review and provide feedback related to 2030 Census plans and execution to assist the Census Bureau to devise strategies to increase census awareness and participation, reduce barriers to response, and enhance the public's trust and willingness to respond.
2. As part of this work, the Committee may consider, among other things, implications of enumeration strategies, including use of administrative and third-party data, how best to leverage partner and stakeholder support efforts throughout the decade, new technologies, social media and marketing, the role of tribal, state, and local governments, and the outreach and mobilization needs of historically undercounted populations.
3. The Committee may advise and provide recommendations on external factors and policies that may affect 2030 Census plans.
4. The Committee may advise the Census Bureau on communicating with the public to ensure maximum self-
5. The Committee may devise and recommend strategies to increase census awareness and participation, and to motivate response to the 2030 Census.
6. The Committee may provide feedback and recommendations regarding proposed 2030 Census data products' content, timing, geographic specificity, and fitness for use.
7. The Committee may provide recommendations regarding 2030 Census employee recruitment strategies.
8. The Committee may consider the Census Bureau's outreach, communications, and partnership efforts, providing perspectives on community trends, challenges, and opportunities for the 2030 Census. This may include recommendations on how to capture broader community perspectives.
9. The Committee will provide insight, perspectives, and expertise through recommendations on planning and implementation of the 2030 Census to advise the Census Bureau in conducting an accurate decennial census. The Committee will provide the Director of the Census Bureau periodic updates on insights regarding various topics relating to preparation for the 2030 Census.
10. The committee will function solely as an advisory body and shall fully comply with the provisions of FACA.
1. The Committee will consist of up to approximately 30 members representing stakeholder organizations, groups, interests, and viewpoints. Members will be appointed by and serve at the discretion of the Director of the Census Bureau.
2. Members will be selected on a standardized basis, in accordance with applicable Department of Commerce guidance. Members will be selected from the public and private sectors and will have experience as well as expertise in census and survey matters, including but not limited to: historically undercounted populations; national, state, local, and tribal areas; redistricting including interactions with state officials and redistricting experts; international and national statistics; geospatial information; census involvement and needs of community-based organizations and academia; the business and technology sectors; and marketing and media sectors. Members serve as representatives of their respective group or viewpoint and are not Special Government Employees (SGEs) as defined in title 18 of United States Code, section 202(a).
3. Persons seated on other Census Bureau stakeholder entities (
4. The Director of the Census Bureau will appoint the Committee Chair and Vice Chair from among the membership to one-year terms. The Chair and Vice Chair may be appointed for additional one-year terms. Appointment as the Committee Chair and Vice Chair will not exceed membership term limitations. Upon completion of appointment as Committee Chair or Vice Chair, the member may fulfill any remaining membership term(s) at the discretion of the Director of the Census Bureau.
5. Members generally will serve an initial three-year term. All members will be reevaluated at the conclusion of their initial term with the prospect of renewal, pending advisory committee and 2030 Census needs. Active attendance and participation in meetings and activities (
6. The Committee aims to have a balanced representation among its members, considering such factors as geography, technical expertise, community involvement, and knowledge of census programs and/or activities. The diverse membership of the Committee assures perspectives and expertise reflecting the breadth of the Committee's responsibilities, and, where possible, the Census Bureau will also consider the ethnic, racial, and gender diversity and various abilities of the United States population.
7. Members shall not reference or otherwise utilize their membership on the Committee in connection with public statements made in their personal capacities without a disclaimer that the views expressed are their own and do not represent the views of the Committee, the Census Bureau, the Department of Commerce, or the U.S. Government.
1. Members of the Committee shall not be compensated for their participation, but will, upon request, be allowed travel and per diem expenses as authorized by 5 U.S.C. 5703.
2. The Census Bureau will convene at least two Committee meetings per year, budget and environmental conditions permitting.
1. Nominations should satisfy the requirements described in the Membership section above.
2. Individuals, groups, and/or organizations may submit nominations on behalf of candidates. A summary of the candidate's qualifications (resume or curriculum vitae)
3. The Department of Commerce is committed to equal opportunity in the workplace and seeks diverse Advisory Committee membership.
Robert L. Santos, Director, Census Bureau, approved the publication of this Notice in the
Census Bureau, Department of Commerce.
Notice of committee establishment.
The Census Bureau is publishing this notice to announce the establishment of the 2030 Census Advisory Committee (Committee). The Secretary of Commerce has determined that the Committee's establishment is necessary and in the public interest. The Committee will function solely as an advisory body and in compliance with provisions of the Federal Advisory Committee Act. Copies of the charter will be filed with the appropriate standing committees of the U.S. Congress and with the Library of Congress.
Shana Banks, Advisory Committee Branch Chief, Office of Program, Performance and Stakeholder
The Committee will review and provide feedback related to 2030 Census plans and execution to assist the Census Bureau to devise strategies to increase census awareness and participation, reduce barriers to response, and enhance the public's trust and willingness to respond.
The Census Bureau will benefit from the insight, perspectives, and expertise of the Committee through recommendations on planning and implementation of the 2030 Census to advise the Census Bureau in conducting an accurate decennial census. The Committee will provide the Director of the Census Bureau periodic updates on insights regarding various topics relating to preparation for the 2030 Census.
Robert L. Santos, Director, Census Bureau, approved the publication of this Notice in the
On June 23, 2023, the Executive Secretary of the Foreign-Trade Zones (FTZ) Board docketed an application submitted by the Virginia Port Authority, grantee of FTZ 20, requesting subzone status subject to the existing activation limit of FTZ 20, on behalf of LL Flooring Services, LLC, in Sandston, Virginia.
The application was processed in accordance with the FTZ Act and Regulations, including notice in the
Sharikopodshipnikovkaya 20-68,
Moscow, Russian Federation;
Radiotester OOO,
a/k/a Radiotester LLC,
Sharikopodshipnikovskaya 11, Building 1,
Moscow, 115088, Russian Federation
and
Volgograd Prospect, House 2,
Moscow, 109316, Russian Federation;
Order Renewing Temporary Denial of Export Privileges
Pursuant to Section 766.24 of the Export Administration Regulations (the “Regulations” or “EAR”),
On February 24, 2023, I signed an order denying the export privileges of Ilya Balakaev and Radiotester OOO a/k/a Radiotester LLC (collectively, “the Respondents”) for a period of 180 days on the ground that issuance of the order was necessary in the public interest to prevent an imminent violation of the Regulations. The order was issued
On July 31, 2023, BIS, through OEE, submitted a written request for renewal of the TDO that was issued on February 24, 2023. The written request was made more than 20 days before the TDO's scheduled expiration. A copy of the renewal request was sent to Respondents in accordance with Sections 766.5 and 766.24(d) of the Regulations. No opposition to the renewal of the TDO has been received.
Pursuant to Section 766.24, BIS may issue an order temporarily denying a respondent's export privileges upon a showing that the order is necessary in the public interest to prevent an “imminent violation” of the Regulations. 15 CFR 766.24(b)(1) and 766.24(d). “A violation may be `imminent' either in time or degree of likelihood.” 15 CFR 766.24(b)(3). BIS may show “either that a violation is about to occur, or that the general circumstances of the matter under investigation or case under criminal or administrative charges demonstrate a likelihood of future violations.”
Pursuant to Sections 766.23 and 766.24, TDO may also be made applicable to other persons if BIS has reason to believe that they are related to a respondent and that applying the order to them is necessary to prevent its evasion. 15 CFR 766.23(a)-(b) and 766.24(c). A “related person” is a person, either at the time of the TDO's issuance or thereafter, who is related to a respondent “by ownership, control, position of responsibility, affiliation, or other connection in the conduct of trade or business.” 15 CFR 766.23(a). Related persons may be added to a TDO on an
The U.S. Commerce Department, through BIS, responded to the Russian Federation's (“Russia's) further invasion of Ukraine by implementing a sweeping series of stringent export controls that severely restrict Russia's access to technologies and other items that it needs to sustain its aggressive military capabilities. These controls primarily target Russia's defense, aerospace, and maritime sectors and are intended to cut off Russia's access to vital technological inputs, atrophy key sectors of its industrial base, and undercut Russia's strategic ambitions to exert influence on the world stage.
As of February 24, 2022, any item classified under any Export Classification Control Number (“ECCN”) in Categories 3 through 9 of the Commerce Control List (“CCL”) required a license to be exported or reexported to Russia.
OEE's request for renewal is based upon the facts underlying the issuance of the initial TDO and the evidence developed over the course of this investigation, which demonstrate the existence of an illicit procurement network conspiring to violate U.S. export control laws by unlawfully procuring and shipping controlled counterintelligence items to Russia and North Korea. As detailed in its July 31, 2023 request for renewal of the TDO, OEE's investigation, which remains ongoing, has revealed evidence that this illicit network and its reach remain ongoing. As a result, the renewal of this order is necessary.
As detailed in the initial TDO issued on February 24, 2023, Balakaev engaged in conduct prohibited by the Regulations by unlawfully procuring and exporting from the United States electronic devices subject to the EAR to the Federal Security Service of the Russian Federation (“FSB”), a BIS-listed entity located in the Russian Federation (“Russia”), and to the Democratic People's Republic of Korea (“North Korea” or “DPRK”) without the required U.S. government authorization. “Export” is defined in the EAR as an “actual shipment or transmission out of the United States, including the sending or taking of an item out of the United States, in any manner.” 15 CFR 734.13(a)(1).
The FSB is listed on the Commerce Department's Entity List
As of January 26, 2007, a license is required for the export or reexport to North Korea of all items subject to the EAR other than food or medicine designated as EAR99.
As referenced in the initial TDO, on February 21, 2023, Balakaev was indicted on multiple counts in the United States District Court for the Eastern District of New York. The charges included, but were not limited to, conspiring to violate U.S. export control laws in connection with the unlicensed export of electronic spectrum analyzers, signal generators, and gas detection equipment, among other items, to Balakaev's company Radiotester, located in Moscow, Russia, for ultimate end use by officials of the FSB and the DPRK. As described in the indictment and initial TDO, Radiotester is owned or controlled by Balakaev. The company is described on its website as “helping to quickly resolve issues of supply and repair of foreign-made measuring equipment” and as having “experience of working with large federal, city-forming, manufacturing enterprises”.
As further detailed in the initial TDO, Balakaev heads an illicit procurement network consisting of an individual in the United States, referred to herein as “Individual 3”, who would assist Balakaev in purchasing the electronic equipment, as well as two members of the FSB in Russia, referred to as FSB Co-Conspirator 1 and FSB Co-Conspirator 2, who worked in FSB Center 8's Military Unit 43753 and who would publish a request for proposal (“RFP”) to repair a device on publicly available Russian websites (collectively, the “Balakaev Network”). In particular, Balakaev would purchase the electronic devices on the internet or directly through the United States-based
As stated in the initial TDO, OEE has presented evidence indicating that Balakaev and the other above-captioned parties were engaged in unlawfully purchasing and shipping dual-use items from U.S. manufacturers to the FSB and DPRK. These items included advanced electronics and sophisticated testing equipment, some of which can be used in sensitive foreign counterintelligence and military operations.
The February 2023 indictment charged Balakaev, owner of Radiotester, with conspiring to defraud, conspiring to violate IEEPA, conspiring to violate ECRA, and smuggling goods from the United States. The violations charged in the indictment cover conduct occurring between at least January 2017 through February 2022, and it alleges that Balakaev was not only aware of U.S. export control laws but also took active steps to evade U.S. export controls by illicitly procuring items subject to the EAR without the required BIS export licenses.
As stated in the indictment and in the initial TDO issued on February 24, 2023, Balakaev and his co-conspirators in the Balakaev Network unlawfully sourced, purchased, shipped and transported spectrum analyzers and signal generators from vendors and manufacturers in the United States for the benefit of the FSB in Russia. Spectrum analyzers are generally used to detect the frequency of radio signals to identify surveillance devices. The spectrum analyzers that were exported by Balakaev are classified under ECCN 3A992.a and are controlled for Anti-Terrorism (AT) reasons. Signal generators are generally used to securely transmit information, often as part of counterintelligence or other covert operations. The signal generators that were exported by Balakaev are classified under ECCN 3A992.a and are controlled for AT reasons. A license was required to export these items to the FSB in Russia.
As described in the indictment and in the initial TDO, because many of the spectrum analyzers and signal generators used by the FSB were manufactured in the United States, it is difficult for the FSB to obtain parts to repair these items. Pursuant to the scheme involving the Balakaev Network, Balakaev conspired with FSB Co-Conspirator 1 and FSB Co-Conspirator 2, who worked in FSB Center 8's Military Unit 43753. In particular, FSB Co-Conspirator 1 and FSB Co-Conspirator 2 would publish a RFP to repair certain devices on publicly available Russian websites. Balakaev, FSB Co-Conspirator 1, and FSB Co-Conspirator 2 then negotiated a contract price to repair the devices before Balakaev submitted a bid in response to the RFP. To ensure that Balakaev won the bid, FSB Co-Conspirator 1 and FSB Co-Conspirator 2 instructed Balakaev to submit two higher bids under fictious company names, in addition to the agreed-upon bid through Balakaev's company, Radiotester.
Once the FSB accepted Radiotester's bid and the contract was signed, Balakaev traveled to FSB Center 8 in Russia to pick up the broken device(s). Either FSB Co-Conspirator 1 or FSB Co-Conspirator 2 would meet Balakaev outside the secure gate of FSB Center 8 to provide Balakaev with the broken device(s).
As described in the indictment and the initial TDO, Balakaev then sourced the necessary repair parts from the United States. Balakaev either purchased the devices over the internet or directly from the U.S. manufacturers, and had the devices shipped to Individual 3's home in Richmond, Virginia. Once purchased, Balakaev brought or shipped the devices to Russia where he then mined the devices for component parts to use to repair the FSB devices. After Balakaev repaired the devices, he returned to FSB Center 8, where he met with either FSB Co-Conspirator 1 or FSB Co-Conspirator 2 outside the FSB Center 8 gate to provide the repaired devices. The FSB Military Unit 43753 then wired payment to Balakaev's Sberbank account.
As also referenced in the indictment and initial TDO, in total, between approximately 2017 and February 2022, Balakaev entered into approximately ten (10) contracts with FSB Military Unit 43753 to repair approximately forty (40) spectrum analyzers and signal generators. In furtherance of those contracts, Balakaev purchased approximately forty-three (43) devices in the United States. Balakaev frequently traveled between Russia and the United States during this time to obtain the devices, often through John F. Kennedy International Airport (“JFK Airport”) in the Eastern District of New York. In furtherance of the scheme to unlawfully export controlled items from the United States to the FSB, on or about and between February 2017 and March 2021, Balakaev traveled from Russia to the United States approximately fourteen (14) times, typically staying in the United States anywhere from two (2) to fourteen (14) days on each trip. Included below is one example of the multiple unlawful exports to the FSB which are described in further detail in the indictment.
By way of example, on or about December 19, 2019, Balakaev, acting through Radiotester, entered into a contract with the FSB Military Unit 43753. As described in the indictment, the contract was to repair an Agilent HP 8562EC and two Agilent HP 8560EC spectrum analyzers. According to purchase records and shipment notifications, Balakaev purchased two Agilent HP 8560E spectrum analyzers that were delivered to Individual 3's home in Richmond, Virginia on or about January 14, 2020 and January 15, 2020. Approximately one month later, on or about February 10, 2020, Balakaev flew from Russia to the United States, where he stayed for approximately one week, in order to obtain the two Agilent HP 8560E spectrum analyzers that he purchased. While in the United States, on or about February 17, 2020, Balakaev emailed FSB Co-Conspirator 1 with the subject of the email “Repair Contracts 43753” and attached a PDF about spectrum analyzers. The following month, in or about March 2020, Balakaev purchased an Agilent HP 8562EC spectrum analyzer to fulfill the FSB contract. On or about March 21, 2020, the device was delivered to Individual 3's home in Richmond, Virginia.
In addition to the example described above, between approximately April 16, 2020 and March 6, 2021, Balakaev purchased approximately thirty (30) additional spectrum analyzers, spectrum analyzer parts, and other radio parts which were shipped to Individual 3's home in Richmond, Virginia. Balakaev also traveled to the United
Between approximately 2019 and 2020, Balakaev conspired with DPRK Government Official 1, the First Secretary of the Embassy of the DPRK to the Russian Federation, to provide the DPRK with U.S.-origin technology that can detect hazardous gases, in violation of United States laws.
As described in the indictment and in the initial TDO, in approximately 2019, DPRK Government Official 1 contacted Balakaev to discuss business they could engage in together. DPRK Government Official 1 contacted Balakaev specifically due to connections that Balakaev had made while working at the Russian Ministry of Culture and in his travel to North Korea. Balakaev subsequently met DPRK Government Official 1 multiple times at the North Korean embassy in Moscow, Russia. On one of those occasions, DPRK Government Official 1 asked Balakaev to purchase an Altair 4X gas detector for the DPRK. The Altair 4X gas detector is a device manufactured by a company in the United States that can be used to detect deadly gases such as combustible gases, oxygen-deficient atmospheres, and toxic gases. The Altair 4X gas detector is subject to the EAR and designated as EAR99.
On approximately December 28, 2019, Balakaev purchased the Altair 4X gas detector on the internet in the United States and had it shipped to Individual 3's home in Richmond, Virginia. On January 2, 2020, the shipment arrived at Individual 3's home. Approximately two months later, on or about February 9, 2020, DPRK Government Official 1 sent Balakaev a photograph of a broken CD labeled “Altair 4XR Multigas Detector.” Balakaev responded, in sum and substance, that he would send a link for the gas detector software. As further described in the indictment and initial TDO, on or about February 10, 2020, Balakaev traveled from Russia to the United States to obtain the gas detector that was previously shipped to Individual 3's home. Approximately one week later, on or about February 17, 2020, Balakaev returned to Russia with the gas detector.
As the indictment and initial TDO further demonstrate, Balakaev was aware of the applicable U.S. export control laws which prohibited him from purchasing the electronic devices in the United States for ultimate end use by the FSB and DPRK. As described in the indictment, on or about November 5, 2019, Individual 3 emailed Balakaev a hyperlink to a BIS document titled “Don't Let This Happen To You!: Actual Investigations of Export Control and Antiboycott Violations.” In the email, Individual 3 wrote to Balakaev to “Take a look just in case.” The BIS document provided “an introduction to the consequences of violating U.S. export control law.” In addition to explaining U.S. export control laws, the document noted specific examples of individuals who violated U.S. sanctions regulations by exporting items to Russia without a BIS license. Balakaev subsequently downloaded the document and saved the document to his computer.
As noted in OEE's request for renewal, OEE's investigation, which remains ongoing, has identified evidence of multiple transactions involving Balakaev and the Balakaev Network dating back to 2017. As described in the indictment, Balakaev has demonstrated a pattern of conduct involving the illicit procurement and unauthorized exports of EAR-controlled items for end use by the FSB and DPRK. Further, on October 18, 2022, Balakaev made statements to law enforcement that he intended to continue to procure EAR-controlled items through other means and is still obtaining contracts through the FSB.
In addition, Balakaev informed agents that he had fulfilled FSB contracts he had obtained in January 2022 for the repair of six devices, and that he was currently negotiating with FSB Co-Conspirators for new contracts in January or February 2023. According to Balakaev, the new contracts were not public yet and the FSB Co-Conspirators would advise Balakaev to review the contracts. Accordingly, OEE has reason to believe that Balakaev and the other above-captioned parties continue to engage in unlawfully purchasing and shipping dual-use items from U.S. manufacturers to the FSB and DPRK. These items include advanced electronics and sophisticated testing equipment, some of which can be used in sensitive foreign counterintelligence and military operations.
Since the issuance of the TDO on February 24, 2023, an arrest warrant has been issued for Ilya Balakaev. Ilya Balakaev is presently a fugitive from U.S. law enforcement and resides in the Russian Federation. Because he has not yet been apprehended, OEE has reason to believe that his illicit procurement efforts will remain ongoing, given the length and nature of the conduct identified to date. Moreover, because Balakaev is familiar with methods of concealment, he is likely to use increasingly sophisticated methods to avoid detection by law enforcement, absent the renewal of the TDO.
I find that the evidence presented by BIS demonstrates that a violation of the Regulations by the above-captioned parties is imminent in both time and degree of likelihood. As such, a TDO is needed to give notice to persons and companies in the United States and abroad that they should cease dealing with Ilya Balakaev and Radiotester OOO a/k/a Radiotester LLC in export or reexport transactions involving items subject to the EAR. Such a TDO is consistent with the public interest to preclude future violations of the Regulations given the deliberate, covert, and determined nature of the misconduct and clear disregard for complying with U.S. export control laws.
This Order is being issued on an
A. Applying for, obtaining, or using any license, License Exception, or export control document;
B. Carrying on negotiations concerning, or ordering, buying, receiving, using, selling, delivering, storing, disposing of, forwarding, transporting, financing, or otherwise servicing in any way, any transaction involving any item exported or to be exported from the United States that is subject to the EAR, or in any other activity subject to the EAR; or
C. Benefitting in any way from any transaction involving any item exported or to be exported from the United States that is subject to the EAR, or in any other activity subject to the EAR.
A. Export, reexport, or transfer (in-country) to or on behalf of a Denied Person any item subject to the EAR;
B. Take any action that facilitates the acquisition or attempted acquisition by a Denied Person of the ownership, possession, or control of any item subject to the EAR that has been or will be exported from the United States, including financing or other support activities related to a transaction whereby a Denied Person acquires or attempts to acquire such ownership, possession or control;
C. Take any action to acquire from or to facilitate the acquisition or attempted acquisition from a Denied Person of any item subject to the EAR that has been exported from the United States;
D. Obtain from a Denied Person in the United States any item subject to the EAR with knowledge or reason to know that the item will be, or is intended to be, exported from the United States; or
E. Engage in any transaction to service any item subject to the EAR that has been or will be exported from the United States and which is owned, possessed or controlled by a Denied Person, or service any item, of whatever origin, that is owned, possessed or controlled by a Denied Person if such service involves the use of any item subject to the EAR that has been or will be exported from the United States. For purposes of this paragraph, servicing means installation, maintenance, repair, modification or testing.
In accordance with the provisions of section 766.24(e) of the EAR, Ilya Balakaev and Radiotester OOO a/k/a Radiotester LLC may, at any time, appeal this Order by filing a full written statement in support of the appeal with the Office of the Administrative Law Judge, U.S. Coast Guard ALJ Docketing Center, 40 South Gay Street, Baltimore, Maryland 21202-4022.
In accordance with the provisions of section 766.24(d) of the EAR, BIS may seek renewal of this Order by filing a written request not later than 20 days before the expiration date. Respondents Ilya Balakaev and Radiotester OOO a/k/a Radiotester LLC may oppose a request to renew this Order by filing a written submission with the Assistant Secretary for Export Enforcement, which must be received not later than seven days before the expiration date of the Order.
A copy of this Order shall be served on each denied person and shall be published in the
This Order is effective immediately and shall remain in effect for 180 days.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) preliminarily determines that Shanghai Yueda Nails Co., Ltd., a.k.a. Shanghai Yueda Nails Industry Co., Ltd. (Shanghai Yueda), an exporter of certain steel nails from the People's Republic of China (China), sold subject merchandise in the United States at prices below normal value (NV) during the period of review (POR) August 1, 2021, through July 31, 2022. Interested parties are invited to comment on these preliminary results.
Applicable August 25, 2023.
Bob Palmer or Bill Horn, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-9068 or (202) 482-4868, respectively.
This administrative review is being conducted in accordance with section 751(a) of the Tariff Act of 1930, as amended (the Act). Commerce published the notice of initiation of this administrative review on October 11, 2022.
The products covered by the
Based on our analysis of U.S. Customs and Border Protection (CBP) information, and the no shipment certifications submitted by eight companies,
Consistent with our practice in non-market economy (NME) cases, we are not rescinding this review but instead intend to complete the review with respect to these eight companies for which we have preliminarily found no shipments and issue appropriate
Commerce is conducting this review in accordance with section 751(a)(1)(B) of the Act. We calculated export prices in accordance with section 772 of the Act. Because China is an NME country within the meaning of section 771(18) of the Act, NV has been calculated in accordance with section 773(c) of the Act.
For a full description of the methodology underlying our conclusions,
As provided in sections 782(i)(3)(A)-(B) of the Act, we intend to verify the information upon which we will rely in determining our final results of review with respect to the mandatory respondent, Shanghai Yueda.
Commerce preliminarily finds that two companies for which a review was requested, Dezhou Hualude Hardware Products Co., Ltd. and S-Mart (Tianjin) Technology Development Co., Ltd., did not establish eligibility for a separate rate because they failed to provide either a separate rate application, separate rate certification, or respond to section A of Commerce's NME questionnaire. As such, we preliminarily determine that these two companies are part of the China-wide entity.
As a result of our analysis of the information on the record, Commerce preliminarily determines the following estimated weighted-average dumping margin exists for the POR:
Commerce intends to disclose the calculations performed for these preliminary results to the parties no later than five days after the date of publication of this notice in accordance with 19 CFR 351.224(b).
Because, as noted above, Commerce intends to verify the information upon which it will rely in making its final determination, interested parties may submit written comments in the form of case briefs within seven days after the issuance of the verification report and rebuttal comments in the form of rebuttal briefs within seven days after the time limit for filing case briefs.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing must submit a written request to the Assistant Secretary for Enforcement and Compliance within 30 days of the date of publication of this notice. Requests should contain: (1) the party's name, address, and telephone number; (2) the number of participants and whether any of those individuals is a foreign national; and (3) a list of issues parties intend to discuss. Issues raised in the hearing will be limited to those raised in the respective case and rebuttal briefs.
All submissions to Commerce must be filed electronically using ACCESS
Commerce intends to issue the final results of this administrative review, which will include the results of its analysis of issues raised in any briefs, within 120 days of the date of publication of these preliminary results, pursuant to section 751(a)(3)(A) of the Act, unless this deadline is extended.
Upon issuance of the final results, Commerce will determine, and CBP shall assess, antidumping duties on all appropriate entries covered by this review.
If Shanghai Yueda's
For the final results, if we continue to treat the two companies, identified above, as part of the China-wide entity, we will instruct CBP to apply an
For entries that were not reported in the U.S. sales data submitted by Shanghai Yueda, Commerce will instruct CBP to liquidate such entries at the rate for the China-wide entity.
In accordance with section 751(a)(2)(C) of the Act, the final results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the final results of this review and for future deposits of estimated antidumping duties, as applicable.
The following cash deposit requirements will be effective upon publication of the final results of this administrative review for shipments of the subject merchandise from China entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(2)(C) of the Act: (1) for Shanghai Yueda, the cash deposit rate will be equal to the weighted-average dumping margin established in the final results of this review (except that if the
This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this POR. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This administrative review and notice are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act, 19 CFR 351.213, and 19 CFR 351.221(b)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) continues to find that Hangzhou Ailong Metal Product Co., Ltd. (Ailong), the sole company subject to the administrative review of the antidumping duty order on light-walled rectangular pipe and tube from the People's Republic of China (China) covering the period of review (POR) August 1, 2021, through July 31, 2022, is not eligible for a separate rate and, thus, is part of the China-wide entity.
Applicable August 25, 2023.
Stephen Bailey, AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0193.
On May 2, 2023, Commerce published the preliminary results for this administrative review.
The merchandise subject to this
As noted above, we received no comments on, and made no changes to, the
Pursuant to section 751(a)(2)(C) of the Act and 19 CFR 351.212(b), Commerce has determined, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this review. We intend to instruct CBP to apply an
The following cash deposit requirements will be effective for all shipments of subject merchandise from China entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) for Ailong, that has not been found to be entitled to a separate rate, the cash deposit rate will be that for the China-wide entity; (2) for previously investigated or reviewed Chinese and non-Chinese exporters that received a separate rate in a prior segment of this proceeding, the cash deposit rate will continue to be the existing exporter-specific rate; (3) for all Chinese exporters of subject merchandise that have not been found eligible for a separate rate, the cash deposit rate will be that for the China-wide entity; and (4) for all non-Chinese exporters of subject merchandise which have not received their own rate, the cash deposit rate will be the rate applicable to the Chinese exporter that supplied that non-Chinese exporter. These deposit requirements, when imposed, shall remain in effect until further notice.
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping and/or countervailing duties prior to liquidation of the relevant entries during the POR. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping and/or countervailing duties occurred and the subsequent assessment of double antidumping duties, and/or an increase in the amount of antidumping duties by the amount of the countervailing duties.
This notice also serves as a final reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation subject to sanction.
Commerce is issuing and publishing the final results of this review in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(5).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
On June 23, 2023, the U.S. Court of International Trade (CIT) sustained the U.S. Department of Commerce's (Commerce) second remand redetermination concerning the antidumping duty investigation of certain corrosion-resistant steel products (CORE) from Taiwan, which: (1) reinstated the use of an adverse inference in the calculation of respondent Prosperity Tieh Enterprise Co., Ltd.'s (Prosperity) reporting of yield strength for CORE production, and (2) reversed Commerce's determination from the investigation to collapse mandatory respondent Prosperity with the other mandatory respondent, the Yieh Phui Enterprise Co., Ltd. (Yieh Phui) and Synn Industrial Co., Ltd. (Synn) single entity (collectively, Yieh Phui/Synn). Accordingly, Commerce is issuing a third amended final determination for the less-than-fair-value (LTFV) investigation of CORE
Applicable July 3, 2023.
Brendan Quinn, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-5848.
The litigation in this case relates to Commerce's final determination in the LTFV investigation of CORE from Taiwan, which was later amended. In the
Also, in the
Mandatory respondents, Prosperity and Yieh Phui, each a Taiwanese producer and exporter of CORE, challenged aspects of Commerce's final affirmative LTFV determination before the CIT, including Commerce's single entity determination with respect to Prosperity and the Yieh Phui/Synn entity and Commerce's use of facts otherwise available with an adverse inference in response to Prosperity's reporting of yield strength. In
In
The Federal Circuit remanded to the CIT for further proceedings consistent with its opinion, and on September 1, 2021, the CIT issued its remand order, ordering Commerce to reach a new determination on whether collapsing is appropriate, reinstate the use of facts available with an adverse inference with respect to Prosperity's reporting of yield strength which Commerce used in its final and amended LTFV determinations, and redetermine margins, as appropriate, consistent with
Section 735(c)(5)(A) of the Act provides that the estimated weighted-average dumping margin for all other producers and exporters not individually examined shall be equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated excluding rates that are zero,
Because there is now a final court decision, Commerce is amending the
Pursuant to section 735(a)(4) of the Act, Commerce “shall disregard any weighted average dumping margin that is
Commerce applies the exclusion from the
Lastly, as a result of the exclusion of Yieh Phui/Synn from the
Since the
At this time, Commerce remains enjoined by Court orders from liquidating entries that were produced and exported by: (1) Prosperity and imported by Prosperity Tieh USA; that were subject of the United States Department of Commerce's final results in
These entries will remain enjoined pursuant to the terms of the injunctions issued in CIT Court No. 16-00138 during the pendency of any appeals process.
This notice of the amended final determination is issued and published in accordance with sections 735(d) and 516A(c)(1) and (e) of the Act.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public workshops; correction.
NMFS cancelled the Safe Handling, Release, and Identification Workshop originally scheduled for September 6, 2023, in Kenner, LA, and the Atlantic Shark Identification Workshop originally scheduled for September 14, 2023, in Virginia Beach, FL. The workshops were announced in the
The Safe Handling, Release, and Identification Workshop originally scheduled for September 6, 2023 is rescheduled to September 27, 2023. The Atlantic Shark Identification Workshop originally scheduled for September 14, 2023 is rescheduled to September 28, 2023.
The locations of the rescheduled workshops have not changed. The Safe Handling, Release, and Identification Workshop will be held in Kenner, LA. The Atlantic Shark Identification Workshop will be held in Virginia Beach, VA.
Peter Cooper by email at
Atlantic highly migratory species (HMS) fisheries are managed under the authority of the Atlantic Tunas Convention Act (16 U.S.C. 971
In the
2. September 28, 2023, 12 p.m.-4 p.m., Courtyard by Marriott-Virginia Beach Norfolk, 5700 Greenwich Road, Virginia Beach, VA 23462.
Also, in the
3. September 27, 2023, 9 a.m.-5 p.m., Hilton New Orleans Airport, 901 Airline Drive, Kenner, LA 70062.
National Oceanic & Atmospheric Administration (NOAA), Commerce.
Notice of information collection, request for comment.
The Department of Commerce, in accordance with the Paperwork Reduction Act of 1995 (PRA), invites the general public and other Federal agencies to comment on proposed, and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. The purpose of this notice is to allow for 60 days of public comment preceding submission of the collection to OMB.
To ensure consideration, comments regarding this proposed information collection must be received on or before October 24, 2023.
Interested persons are invited to submit written comments to Adrienne Thomas, NOAA PRA Officer, at
Requests for additional information or specific questions related to collection activities should be directed to Sarah Gonyo, Economist, 1305 East West Highway, Silver Spring, MD 20910, 240-621-1999,
This request is for a new information collection, which will include focus groups and pre-test to help guide revisions necessary to the survey instrument, to directly support decision-makers with the National Estuarine Research Reserve (NERR). The proposed data collection involves surveying randomly selected residents (aged 18 years and older) from households in counties surrounding the NERRs. The purpose of this information collection is to obtain data on the opinions, values, attitudes, and behaviors of visitors to National Ocean Service (NOS) special places, as well as residents from surrounding areas. The initial surveys will be conducted for the Chesapeake Bay National Estuarine Research Reserve in Virginia (CBNERR-VA), Weeks Bay NERR (WBNERR), and Grand Bay NERR (GNDNERR), and the survey will be repeated regularly in other NERRs based on information needs and budget.
The NERRS is a federal-state partnership program for the stewardship, education, and research of unique estuarine sites. This data collection supports the NERRS' vision of establishing healthy estuaries and coastal watersheds where human and ecological communities thrive. The NERRS has identified five priority research areas, including a focus on social science and economic processes within each NERR site. However, limited data exist characterizing stakeholder activities, attitudes, knowledge, and preferences, including their spatial aspects. Gathering such data is essential for effective management of stakeholder groups, regulatory proposals, and resource management decisions.
Designated in 1986, WBNERR is located along the eastern shore of Mobile Bay in Baldwin County, Alabama. CBNERR-VA, designated in 1991, comprises four reserve sites within the York River in the southern Chesapeake Bay subregion. Finally, GNDNERR was established in 1999 and is in the Grand Bay Savannah Complex along the Mississippi-Alabama state line in Jackson County, Mississippi. All three NERRS prioritize public access and responsible use to protect ecosystems, identifying public sites, minimizing conflicts, and evaluating visitor use. Therefore, information is needed on who uses these NERR sites, their motivations, management preferences, and why some do not visit. This data supports conservation and management goals, strengthens decision-making, increases capacity, and extends education and outreach. It is also required by NOAA to meet objectives related to ocean and coastal planning and management. The data benefits state and local officials as well.
NOAA's mission is to provide science, service and stewardship for, among other activities, management of the nation's oceans and coasts. NOAA supports “comprehensive ocean and coastal planning and management” in order to facilitate use of oceans and coasts, while also ensuring “continued access to coastal areas, sustained ecosystems, maintained cultural heritage, and limited cumulative impacts.” NOAA is subject to and supports mandates of the Coastal Zone Management Act (CZMA) (16 U.S.C. 1452(303)(2)(D)), which encourages the wise use of coastal resources, including energy activity. The CZMA also encourages the inclusion and participation of the public in carrying out the tenets of the act (16 U.S.C. 1452(303)(4)). The National Environmental Policy Act (NEPA) (40 CFR 1502.6) mandates federal agencies to use social science data to assess the impacts of federal actions on the human environment. Consequently, up-to-date sociological data is needed to support federal agency obligations under each of these acts.
Finally, NOAA is responding to Executive Orders 13707 and 13985. Executive Order 13707, Using Behavioral Science Insights to Better Serve the American People, requests federal agencies to, among other actions: “identify policies, programs, and operations where applying behavioral science insights may yield substantial improvements in public welfare, program outcomes, and program cost effectiveness” and “develop strategies for applying behavioral science insights to programs and, where possible, rigorously test and evaluate the impact of these insights.” Executive Order 13985, On Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, requires the federal government to allocate resources “in a manner that increases investment in underserved communities, as well as individuals from those communities.”
Information will be collected with a combination of mail recruitment with push-to-web and mail-back survey instrument.
We are soliciting public comments to permit the Department/Bureau to: (a) Evaluate whether the proposed information collection is necessary for the proper functions of the Department, including whether the information will have practical utility; (b) Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used; (c) Evaluate ways to enhance the quality, utility, and clarity of the information to be collected; and (d) Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Comments that you submit in response to this notice are a matter of public record. We will include or summarize each comment in our request to OMB to approve this ICR. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we
Committee for Purchase From People Who Are Blind or Severely Disabled.
Proposed deletions from the Procurement List.
The Committee is proposing to delete product(s) from the Procurement List that were furnished by nonprofit agencies employing persons who are blind or have other severe disabilities.
Committee for Purchase From People Who Are Blind or Severely Disabled, 355 E Street SW, Suite 325, Washington, DC 20024.
For further information or to submit comments contact: Michael R. Jurkowski, Telephone: (703) 785-6404, or email
This notice is published pursuant to 41 U.S.C. 8503(a)(2) and 41 CFR 51-2.3. Its purpose is to provide interested persons an opportunity to submit comments on the proposed actions.
The following product is proposed for deletion from the Procurement List:
Committee for Purchase From People Who Are Blind or Severely Disabled.
Additions to and deletions from the Procurement List.
This action adds product(s) to the Procurement List that will be furnished by nonprofit agencies employing persons who are blind or have other severe disabilities, and deletes product(s) and service(s) from the Procurement List previously furnished by such agencies.
Committee for Purchase From People Who Are Blind or Severely Disabled, 1401 S Clark Street, Suite 715, Arlington, Virginia 22202-4149.
Michael R. Jurkowski, Telephone: (703) 603-2117, Fax: (703) 603-0655, or email
On 7/21/2023, the Committee for Purchase From People Who Are Blind or Severely Disabled published notice of proposed additions to the Procurement List. This notice is published pursuant to 41 U.S.C. 8503 (a)(2) and 41 CFR 51-2.3.
After consideration of the material presented to it concerning capability of qualified nonprofit agencies to provide the product(s) and impact of the additions on the current or most recent contractors, the Committee has determined that the product(s) listed below are suitable for procurement by the Federal Government under 41 U.S.C. 8501-8506 and 41 CFR 51-2.4.
I certify that the following action will not have a significant impact on a substantial number of small entities. The major factors considered for this certification were:
1. The action will not result in any additional reporting, recordkeeping or other compliance requirements for small entities other than the small organizations that will furnish the product(s) to the Government.
2. The action will result in authorizing small entities to furnish the product(s) to the Government.
3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 8501-8506) in connection with the product(s) proposed for addition to the Procurement List.
Accordingly, the following product(s) are added to the Procurement List:
On 7/21/2023, the Committee for Purchase From People Who Are Blind or Severely Disabled published notice of proposed deletions from the Procurement List. This notice is published pursuant to 41 U.S.C. 8503(a)(2) and 41 CFR 51-2.3.
After consideration of the relevant matter presented, the Committee has determined that the product(s) and service(s) listed below are no longer suitable for procurement by the Federal Government under 41 U.S.C. 8501-8506 and 41 CFR 51-2.4.
I certify that the following action will not have a significant impact on a substantial number of small entities. The major factors considered for this certification were:
1. The action will not result in additional reporting, recordkeeping or other compliance requirements for small entities.
2. The action may result in authorizing small entities to furnish the product(s) and service(s) to the Government.
3. There are no known regulatory alternatives which would accomplish the objectives of the Javits-Wagner-O'Day Act (41 U.S.C. 8501-8506) in connection with the product(s) and service(s) deleted from the Procurement List.
Accordingly, the following product(s) and service(s) are deleted from the Procurement List:
Commodity Futures Trading Commission.
Notice.
The Commodity Futures Trading Commission (“CFTC” or “Commission”) is announcing an opportunity for public comment on the proposed renewal of a collection of certain information by the agency. Under the Paperwork Reduction Act of 1995 (“PRA”), Federal agencies are required to publish notice in the
Comments must be submitted on or before October 24, 2023.
You may submit comments, identified by “Customer Clearing Documentation and Timing of Acceptance for Clearing,” Collection Number 3038-0092, by any of the following methods:
•
•
•
Please submit your comments using only one method. All comments must be submitted in English, or if not, accompanied by an English translation. Comments will be posted as received to
Catherine Brescia, Attorney Advisor, Market Participants Division, Commodity Futures Trading Commission, (202) 418-6236; email:
Under the PRA, 44 U.S.C. 3501
To address these provisions, the Commission promulgated regulations that prohibit arrangements involving FCMs, SDs, MSPs, and DCOs that would (a) disclose to an FCM, SD, or MSP the identity of a customer's original executing counterparty;
Under the above regulations, SDs, MSPs, FCMs, and DCOs are required to develop and maintain written customer clearing documentation and trade processing procedures. Maintenance of contracts, policies, and procedures is prudent business practice. All SDs, MSPs, FCMs, and DCOs maintain documentation consistent with these regulations. The regulations are crucial both for effective risk management and for the efficient operation of trading venues among SDs, MSPs, FCMs, and DCOs. Each of these entities has a general recordkeeping obligation for these requirements under the Commission's regulations (17 CFR 39.20 for DCOs; 17 CFR 23.606 for SDs and MSPs; and 17 CFR 1.73 for FCMs).
As indicated below, the information collection burden arising from the regulations primarily is restricted to the costs associated with the affected registrants' obligation to maintain records related to clearing documentation between the customer and the customer's clearing member, and trade processing procedures between DCOs and FCMs, SDs, and MSPs. The information collection obligations are necessary to implement certain provisions of the CEA, including ensuring that registrants exercise effective risk management and for the efficient operation of trading venues among SDs, MSPs, FCMs, and DCOs.
With respect to the collection of information, the CFTC invites comments on:
• Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have a practical use;
• The accuracy of the Commission's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Ways to enhance the quality, usefulness, and clarity of the information to be collected; and
• Ways to minimize the burden of collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology;
You should submit only information that you wish to make available publicly. If you wish the Commission to consider information that you believe is exempt from disclosure under the Freedom of Information Act, a petition for confidential treatment of the exempt information may be submitted according to the procedures established in § 145.9 of the Commission's regulations.
The Commission reserves the right, but shall have no obligation, to review, pre-screen, filter, redact, refuse or remove any or all of your submission from
There are no capital costs or operating and maintenance costs associated with this collection.
Consumer Financial Protection Bureau.
Notice and request for comment.
In accordance with the Paperwork Reduction Act of 1995 (PRA), the Consumer Financial Protection Bureau (CFPB) is requesting the Office of Management and Budget's (OMB's) approval for a new information collection titled “CFPB National Age-Friendly Banking Survey.”
Written comments are encouraged and must be received on or before September 25, 2023 to be assured of consideration.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Requests for additional information should be directed to Anthony May, Paperwork Reduction Act Officer, at (202) 435-7278, or email:
• Background information about type of institution, length and quality of the relationship;
• Importance, availability, and use of “age-friendly” banking features;
• Experiences with fraud and scams and financial caregiving involving accounts with their primary bank;
• Use and accessibility of banking services; and
• Other aspects of the relationship with their primary financial institution, including credit and loans.
The survey is supplemented with existing panelists' responses to demographic, geographic, and financial questions. The results will inform:
• CFPB's age-friendly banking educational, regulatory, and policy work;
• Banks, lenders, and financial institutions' initiatives and resources focused on financial inclusion of older adults; and
• State, local, and community entities seeking to strengthen the financial inclusion component of their “age-friendly” community plans.
The data gathered through this survey will empower many other governmental, nonprofit, and other entities to conduct analysis on topics of interest relevant to their work. These entities can apply their findings to enhance consumer protections and expand age-friendly banking products and services nationwide.
Tuesday, August 22, 2023—10:00 a.m. Open; and Tuesday, August 29, 2023—11:00 a.m. Closed (See MATTERS TO BE CONSIDERED for each meeting).
The meetings will be held remotely, and in person at 4330 East-West Highway, Bethesda, Maryland 20814.
Commission Meetings—Open to the Public (10:00 a.m.) and Closed to the Public (11:00 a.m.)
Notice of Proposed Rulemaking—Safety Standard for Nursing Pillows.
To attend virtually, please use the following link and details below:
Join by phone: +1-415-527-5035 US Toll.
Access code: 276 320 94287.
Closed meeting topic.
Alberta E. Mills, Office of the Secretary, U.S. Consumer Product Safety Commission, 4330 East-West Highway, Bethesda, MD 20814, 301-504-7479 (Office) or 240-863-8938 (Cell).
Department of the Air Force Scientific Advisory Board, Department of the Air Force.
Notice of federal advisory committee meeting.
The Department of Defense (DoD) is publishing this to announce that the following meeting of the Department of the Air Force Scientific Advisory Board will take place.
Closed to the public. 11 September 2023 from 8:00 a.m.-2:00 p.m. Eastern Time.
The meeting will be held at The Mark Center, 4800 Mark Center Drive, Alexandria, VA 22311.
Lt Col Blythe Andrews, (240) 470-4566 (Voice),
This meeting is being held under the provisions of chapter 10 of title 5, United States Code (as enacted on Dec. 27, 2022, by section 3(a) of Pub. L. 117-286) (formerly the Federal Advisory Committee Act, 5 U.S.C., appendix), section 552b of title 5, United States Code (popularly known as the Government in the Sunshine Act), and 41 CFR 102-3.140 and 102-3.150.
Department of the Air Force, Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by September 25, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Angela Duncan, 571-372-7574,
Information collected in the AFSAS is utilized directly by assigned Safety Managers and Investigators, to evaluate mishap events for prevention analysis. Each organization staff will compare the information against DoD standards to determine if safety is enforced and to evaluate the safety profile of their organization. Included will be specific recommendations for risk mitigation/reduction in order to preserve assets and save lives. The Air Force Safety Program addresses the maintenance of safe and healthful conditions in the workplace or the occupational environment. It is applicable to all Air Force civilian and military personnel and operations, aviation or occupational functions.
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Department of the Air Force, Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by September 25, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Angela Duncan, 571-372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Office of the Under Secretary of Defense for Policy, Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by September 25, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Angela Duncan, 571-372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by September 25, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Angela Duncan, 571-372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Office of Elementary and Secondary Education (OESE), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act (PRA) of 1995, the Department is proposing a new information collection request (ICR).
Interested persons are invited to submit comments on or before October 24, 2023.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact Stephanie Jones, 202-453-7835.
The Department, in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. The Department is soliciting comments on the proposed information collection request (ICR) that is described below. The Department is especially interested in public comment addressing the following issues: (1) is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
The U.S. Department of Education (ED) is requesting authorization to collect data from CSP grantees within the CMO program through a new online platform. In 2022, ED began development of a new data collection system, the Charter Online Management and Performance System (COMPS), designed specifically to reduce the burden of reporting for users and increase validity of the overall data. This new collection consists of questions responsive to the actions established in the program's final rule published in the
National Board for Education Sciences, Department of Education, Institute of Education Sciences (IES).
Notice of an open meeting.
This notice sets forth the agenda, time, and instructions to access or participate in the National Board for Education Sciences (hereafter referred to as NBES or Board) virtual meeting scheduled for September 11, 2023. This notice provides information about the meeting to members of the public who may be interested in attending the meeting and/or providing written comment. Notice of this meeting is required under 5 U.S.C. chapter 10 (Federal Advisory Committees).
The meeting will be conducted virtually.
The NBES virtual meeting will be held on September 11, 2023, from 12:00 p.m.-4:30 p.m. (EST).
Andrea Miralia, Designated Federal Officer (DFO) for NBES, (PCP 4126-1), U.S. Department of Education, IES: 550 12th St. SW, Washington, DC 20024, Telephone: (202) 245-6046, email:
The Board's responsibilities are: (1) advise and consult with the Director of IES (Director) on the policies of IES; (2) consider and approve priorities proposed by the Director under 20 U.S.C. 9515 to guide the work of IES; (3) transmit approved priorities to the appropriate congressional committee (20 U.S.C. 9515(b)); (4) ensure that the priorities of IES and the National Education Centers are consistent with the mission of IES (20 U.S.C. 9515(c)); (5) review and approve procedures for technical and scientific peer review of the activities of IES; (6) advise the Director on the establishment of activities to be supported by IES, including the general areas of research to be carried out by the National Center for Education Research and the National Center for Special Education Research; (7) present to the Director such recommendations as it may find appropriate for (a) the strengthening of education research, and (b) the funding of IES; (8) advise the Director on the funding of applications for grants, contracts, and cooperative agreements for research, after the completion of peer review; (9) review and regularly evaluate the work of IES, to ensure that scientifically valid research, development, evaluation, and statistical analysis are consistent with the standards for such activities under this title; (10) advise the Director on ensuring that activities conducted or supported by IES are objective, secular, neutral, and non-ideological, and are free of partisan political influence and racial, cultural, gender, or regional bias; (11) solicit advice and information from those in the educational field, particularly practitioners and researchers, to recommend to the Director topics that require long-term, sustained, systematic, programmatic, and integrated research efforts, including knowledge utilization and wide dissemination of research,
U.S. Election Assistance Commission.
Sunshine Act notice; notice of public agenda, withdrawal.
This action withdraws the Sunshine Act Notice published in the
As of August 22, 2023, the Sunshine Act Notice published in the
Kristen Muthig, Telephone: (202) 897-9285, Email:
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following Complaints and Compliance filings in EL Dockets:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes.
For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
In accordance with the National Environmental Policy Act of 1969 and the Federal Energy Regulatory Commission's (Commission) regulations, 18 CFR part 380, the Office of Energy Projects has reviewed the application for subsequent license to continue to operate and maintain the River Falls Hydroelectric Project (project). The project is located on the Kinnickinnic River, in the City of River Falls (City), Pierce County, Wisconsin. Commission staff has prepared an Environmental Assessment (EA) for the project.
The EA contains the staff's analysis of the potential environmental impacts of the project and concludes that licensing the project, with appropriate environmental protective measures, would not constitute a major federal action that would significantly affect the quality of the human environment.
The Commission provides all interested persons with an opportunity to view and/or print the EA via the internet through the Commission's Home Page (
You may also register online at
Any comments should be filed within 45 days from the date of this notice.
The Commission strongly encourages electronic filing. Please file comments using the Commission's eFiling system at
For further information, contact Michael Davis at 202-502-8339 or
On Thursday, August 10, 2023, the Federal Energy Regulatory Commission (Commission) and the North American Electric Reliability Corporation (NERC) convened a Physical Security Technical Conference to discuss physical security of the Bulk-Power System, including the adequacy of existing physical security controls, challenges, and solutions.
All interested persons are invited to file post-technical conference comments to address issues raised during the technical conference identified in the Final Notice of Joint Technical Conference issued on August 3, 2022. For reference, the questions included in the Final Notice are included below, and supplemental questions appear in
Comments, identified by docket number, may be filed electronically or paper-filed. Electronic filing through
Although the Commission strongly encourages electronic filing, documents may also be paper-filed. To paper-file, submissions sent via the U.S. Postal Service must be addressed to: Federal Energy Regulatory Commission, Office of the Secretary, 888 First Street NE, Washington, DC 20426. Submissions sent via any other carrier must be addressed to: Federal Energy Regulatory Commission, Office of the Secretary, 12225 Wilkins Avenue, Rockville, Maryland 20852.
For more information about this Notice, please contact:
We are seeking comments on the topics discussed during the technical conference held on August 10, 2023, including responses to the questions listed in the Final Notice issued in this proceeding on August 3, 2023, as well as supplemental questions developed by Commission staff post-conference. The questions from the agenda and the supplemental questions are included below.
This panel explored the facilities subject to Reliability Standard CIP-014-3. While the NERC report filed with the Commission did not recommend revising the applicability section of the Standard at this time, the report determined that this could change based on additional information. Panelists discussed whether the applicability section of Reliability Standard CIP-014-3 identifies the appropriate facilities to mitigate physical security risks to better assure reliable operation of the Bulk-Power System. Panelists also discussed whether additional type(s) of substation configurations should be studied to determine risks and the possible need for required protections.
Please address the following questions:
1. Is the applicability section of CIP-014-3 properly determining transmission station/substations to be assessed for instability, uncontrolled separation or cascading within the Interconnection? Specifically, are the correct facilities being assessed and what topology or characteristics should the applicable facilities have to be subject to CIP-014-3? For example, are there criteria other than those in Section 4.1.1 of CIP-014-3, such as connected to two vs. three other station/substations and exceeding the aggregated weighted value of 3,000, changing the weighting value of the table in the applicability section, or including lower transmission voltages?
2. Given the changing threat landscape, are there specific transmission station/substation configurations that should be included in the applicability section of CIP-014-3, including combinations of stations/substations to represent coordinated attacks on multiple facilities? What would they be and why?
3. What other assessments (
4. Should potential load loss or generation loss be considered? If so, why, and how would potential impact be determined (
5. Should facilities that perform physical security monitoring functions that are not currently subject to CIP-014-3 (
This panel discussed the reliability goal to be achieved and based on that goal, what, if any, mandatory minimum resiliency or security protections should be required against facility attacks,
Please address the following questions:
1. What is our reliability goal? What are we protecting against to ensure grid reliability beyond what is required in the current standards?
a. What are the specific physical security threats (both current and emerging) to all stations/substations on the bulk electric system?
b. As threats are continually evolving, how can we identify those specific threats?
c. How do threats vary across all stations/substations on the bulk electric system? How would defenses against those threats vary? To what extent should simultaneous attacks at multiple sites be considered?
2. Do we need mandatory minimum protections? If so, what should they be?
a. Should there be flexible criteria or a bright line?
b. Should minimum protections be tiered (
c. Should minimum protections be based on preventing instability, uncontrolled separation, or cascading or preventing loss of service to customers (
d. In what areas should any minimum protections be focused?
i. Detection?
ii. Assessment?
iii. Response?
3. To what extent would minimum protections help mitigate the likelihood and/or reliability impact of simultaneous, multi-site attacks?
This panel discussed physical security best practices for prevention, protection, response, and recovery. The discussion included asset management strategies to prepare, incident training preparedness and response, and research and development needs.
Please address the following questions:
1. What is the physical security threat landscape for each of your companies? What best practices have been implemented to mitigate the risks and vulnerabilities of physical attacks on energy infrastructure?
2. What asset management and preparedness best practices have your member companies implemented to prevent, protect against, respond to, and recover from physical attacks on their energy infrastructure?
3. What research and development efforts are underway or needed for understanding and mitigating physical security risks to critical energy electrical infrastructure?
4. What research and development efforts, including the development of tools, would you like to see the National Labs undertake to assist your companies in addressing physical threats to your critical electrical infrastructure?
5. What do you need or would like to see from the energy industry to improve your ability and accuracy in addressing physical security risks to critical energy electrical infrastructure?
6. What best practices are in place to accelerate electric utility situational awareness of an incident and to involve local jurisdiction responders?
7. What can the federal and state regulators do to assist the energy industry in improving their physical security posture?
8. What training improvements can NERC and the Regional Entities implement to system operators to aid in real-time identification and recovery procedures from physical attacks?
9. What changes could be made to improve information sharing between the federal government and industry?
This panel explored planning to respond to and recovery from physical and cyber security threats and potential obstacles to developing and implementing such plans. This discussion focused on how best to integrate cyber and physical security with engineering, particularly in the planning phase. The panel discussed whether critical stations could be reduced through best practices and how to determine whether to mitigate the risk of a critical station or protect it. Finally, the panel considered the implications of the changing resource mix on vulnerability of the grid and its resilience to disruptions.
Please address the following questions:
1. How can cyber and physical security be integrated with engineering, particularly planning? What aspects of cyber and physical security need to be incorporated into the transmission planning process?
2. What modifications could be made to TPL-001 to bring in broader attack focus (
3. Currently, if a CIP-014-3 R1 assessment deems a transmission station/substation as “critical” that station/substation must be physically protected. Are there best practices for reconfiguring facilities so as to reduce the criticality of stations/substations?
4. When prioritizing resources, how should entities determine which “critical” stations/substations to remove from the list and which to protect? If the project is extensive and may have a long lead time to construct, to what degree does the station/substation need to be protected during the interim period?
5. How will the development of the grid to accommodate the interconnection of future renewable generation affect the resilience of the grid to attack? Will the presence of future additional renewable generation itself add to or detract from the resilience of the grid to physical attack?
6. What are the obstacles to developing a more resilient grid? What strategies can be used to address these obstacles?
a. Cost?
b. Siting?
c. Regulatory Barriers?
Take notice that the Commission has received the following Natural Gas and Oil Pipeline Rate and Refund Report filings:
Any person desiring to intervene, to protest, or to answer a complaint in any of the above proceedings must file in accordance with Rules 211, 214, or 206 of the Commission's Regulations (18 CFR 385.211, 385.214, or 385.206) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
The filings are accessible in the Commission's eLibrary system (
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
For other information, call (866) 208-3676 (toll free). For TTY, call (202) 502-8659. The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
On August 31, 2021, Pyrites Hydro, LLC filed a relicense application for the 8.2-megawatt Pyrites Hydroelectric Project No. 6115 (project). The project is located on the Grass River near the Town of Canton in St. Lawrence County, New York.
In accordance with the Commission's regulations, on June 13, 2023, Commission staff issued a notice that the project was ready for environmental analysis (REA Notice). Based on the information in the record, including comments filed on the REA Notice, staff does not anticipate that licensing the project would constitute a major Federal action significantly affecting the quality of the human environment. Therefore, staff intends to prepare an Environmental Assessment (EA) on the application to relicense the project.
The EA will be issued and circulated for review by all interested parties. All comments filed on the EA will be analyzed by staff and considered in the Commission's final licensing decision.
The Commission's Office of Public Participation (OPP) supports meaningful public engagement and participation in Commission proceedings. OPP can help members of the public, including landowners, environmental justice communities, Tribal members and others, access publicly available information and navigate Commission processes. For public inquiries and assistance with making filings such as interventions, comments, or requests for rehearing, the public is encouraged to contact OPP at (202) 502-6595 or
The application will be processed according to the following schedule. Revisions to the schedule may be made as appropriate.
Any questions
On August 3, 2023, Pyrites Hydro, LLC submitted to the Federal Energy Regulatory Commission (Commission) a copy of its application for a Clean Water Act section 401(a)(1) water quality certification filed with the New York State Department of Environmental Conservation (New York DEC), in conjunction with the above captioned project. Pursuant to 40 CFR 121.6 and section 4.34(b)(5) of the Commission's regulations,
Date of Receipt of the Certification Request: August 3, 2023.
Reasonable Period of Time to Act on the Certification Request: One year, August 3, 2024.
If New York DEC fails or refuses to act on the water quality certification request on or before the above date, then the
Section 309(a) of the Clean Air Act requires that EPA make public its comments on EISs issued by other Federal agencies. EPA's comment letters on EISs are available at:
Environmental Protection Agency (EPA).
Notice; call for information.
The Environmental Protection Agency (EPA) is preparing an Integrated Science Assessment (ISA) as part of the review of the air quality criteria and the primary (health-based) and secondary (welfare-based) National Ambient Air Quality Standards (NAAQS) for Ozone (O
All communications and information should be received by EPA by October 24, 2023.
Information may be submitted electronically, by mail, by facsimile, or by hand delivery/courier. Please follow the detailed instructions as provided in the section of this notice entitled
For information on the public comment period, contact the ORD Docket at the EPA Headquarters Docket Center; phone: 202-566-1752; facsimile: 202-566-9744; or email:
Section 108(a) of the Clean Air Act (the Act) directs the Administrator to identify and list certain air pollutants which, among other things, “cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare;”
Under section 109 of the Act, EPA is then to establish NAAQS for each pollutant for which EPA has issued criteria. Section 109(d)(1) of the Act additionally requires periodic review and, if appropriate, revision of existing air quality criteria to reflect advances in scientific knowledge on the effects of the pollutant on public health and welfare. Under the same provision, EPA is also to periodically review and, if appropriate, revise the NAAQS, based on the revised air quality criteria. Documents and technical materials associated with NAAQS reviews are available at
Photochemical oxidants, including O
The Agency also seeks information regarding the design and scope of the review of the air quality criteria to ensure that it addresses key policy-relevant issues and considers the new science that is relevant to informing our understanding of these issues. The Agency seeks new scientific information that may address key uncertainties identified in the last O
Submit your materials identified by Docket ID No. EPA-HQ-ORD-2023-0435 by one of the following methods:
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Environmental Protection Agency (EPA).
Notice.
EPA has received a specific exemption request from the National Aeronautics and Space Administration (NASA) to use the pesticide ortho-phthalaldehyde (OPA, CAS No. 643-79-8) to treat the coolant fluid of the internal active thermal control system of the International Space Station to control aerobic/microaerophilic bacteria in the aqueous coolant. The applicant proposes the use of a new chemical which has not been registered by EPA. Therefore, in accordance with the Code of Federal Regulations, EPA is soliciting public comment before making the
Comments must be received on or before September 11, 2023.
Submit your comments, identified by docket identification (ID) number EPA-HQ-OPP-2023-0404, through the
Charles Smith, Director Registration Division (7505T), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; main telephone number: (202) 566-1030; email address:
You may be potentially affected by this action if you are a pesticide manufacturer, North American Industrial Classification System (NAICS) (Code 32532) or involved with the International Space Station. This listing is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Other types of entities not listed could also be affected.
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Under section 18 of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) (7 U.S.C. 136p), at the discretion of the EPA Administrator, a Federal or State agency may be exempted from any provision of FIFRA if the EPA Administrator determines that emergency conditions exist which require the exemption. NASA has requested the EPA Administrator to issue a specific exemption for the use of ortho-phthalaldehyde (OPA) in the coolant of the internal active thermal control system (IATCS) of the International Space Station (ISS) to control aerobic/microaerophilic bacteria in the aqueous coolant. Information in accordance with 40 CFR part 166 was submitted as part of this request.
As part of this request, the applicant asserted that it has considered the registered biocide alternatives and has concluded that OPA is the most effective biocide that meets the requisite criteria including: The need for safe, non-intrusive implementation and operation in a functioning system; the ability to control existing planktonic and biofilm-residing micro-organisms; a negligible impact on system wetted materials of construction; and a negligible reactivity with existing coolant additives. The ISS would not have an adequate long-term solution for controlling the micro-organisms in the IATCS coolant without the use of OPA. The OPA is incorporated into a porous resin material contained in a stainless-steel canister. The canister containing the OPA-incorporated resin is inserted into a coolant system loop, using flexible hose and quick disconnects and is placed in line for 8 hours to deliver the OPA into the fluid. As the coolant fluid flows through the cannister, the OPA elutes from the resin material into the coolant fluid. The total volume of the circulatory loops of the IATCS is 829 liters. The maximum concentration would be 350 milligrams (mg) of OPA per liter of coolant fluid. A total of 290,150 mg would be needed for the entire system. The OPA is incorporated into the resin at 210 mg OPA per cm
This notice does not constitute a decision by EPA on the application itself. The regulations governing FIFRA section 18 require publication of a notice of receipt of an application for a specific exemption proposing the use of a new chemical (
The notice provides an opportunity for public comment on the application. The Agency will review and consider all comments received during the comment period in determining whether to issue the specific exemption requested by the NASA.
Federal Communications Commission.
Notice and request for comments.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995, the Federal Communications Commission (FCC or
Written comments and recommendations for the proposed information collection should be submitted on or before September 25, 2023.
Comments should be sent to
For additional information or copies of the information collection, contact Cathy Williams at (202) 418-2918. To view a copy of this information collection request (ICR) submitted to OMB: (1) go to the web page
The Commission may not conduct or sponsor a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number.
As part of its continuing effort to reduce paperwork burdens, as required by the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520), the FCC invited the general public and other Federal Agencies to take this opportunity to comment on the following information collection. Comments are requested concerning: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. Pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the FCC seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”
Form 2100, Schedule 301-FM also accommodates commercial FM applicants applying in a Threshold Qualifications Window (TQ Window) or a Tribal Allotment. A commercial FM applicant applying in the TQ Window, who was not the original proponent of the Tribal Allotment at the rulemaking stage, must demonstrate that it would have qualified in all respects to add that particular Tribal Allotment for which it is applying. Additionally, a petitioner seeking to add a new Tribal Allotment to the FM Table of Allotments must file Form 2100, Schedule 301-FM when submitting its Petition for Rulemaking. The collection also accommodates applicants applying in a TQ Window for a Tribal Allotment that had been added to the FM Table of Allotments using the Tribal Priority under the “threshold qualifications” procedures.
Similarly, to receive authorization for commencement of Digital Television (DTV) operations, commercial broadcast licensees must file FCC Form 2100, Schedule A for a construction permit. The application may be filed any time after receiving the initial DTV allotment and before mid-point in the applicant's construction period. The Commission will consider the application as a minor change in facilities. Applicants do not have to provide full legal or financial qualifications information.
The data collected on this form includes the Date of Birth for Commercial Operator licensees however this information will be redacted from public view.
The FCC uses the information in FCC Form 605 to determine whether the applicant is legally, technically, and financially qualified to obtain a license. Without such information, the Commission cannot determine whether to issue the licenses to the applicants that provide telecommunication services to the public, and therefore, to fulfill its statutory responsibilities in accordance with the Communications Act of 1934, as amended. Information provided on this form will also be used to update the database and to provide for proper use of the frequency spectrum as well as enforcement purposes.
10:00 a.m. on August 29, 2023.
This Board meeting will be open to public observation only by webcast. Visit
Observers requiring auxiliary aids (
Open to public observation via webcast.
The Federal Deposit Insurance Corporation's Board of Directors will meet to consider the following matters:
Memorandum and resolution re: Notice of Proposed Rulemaking on Long-term Debt Requirements for Large Bank Holding Companies, Certain Intermediate Holding Companies of Foreign Banking Organizations, and Large Insured Depository Institutions.
Memorandum and resolution re: Resolution Plans Required for Insured Depository Institutions with $100 Billion or More in Total Assets; Informational Filings Required for Insured Depository Institutions with At Least $50 Billion, but Less Than $100 Billion in Total Assets.
Memorandum and resolution re: Publication of Proposed Guidance for Dodd-Frank Act Resolution Plan Submissions of Triennial Full Filers.
Memorandum and resolution re: Conditions to Certain Receivership Delegations of Authority and Procedures.
Memorandum and resolution re: Board Approval of Midsized and Large Failed Bank Sales.
No substantive discussion of the following items is anticipated. The Board will resolve these matters with a single vote unless a member of the Board of Directors requests that an item be moved to the discussion agenda.
Disposition of Minutes of a Board of Directors' Meeting Previously Distributed.
Summary reports, status reports, and reports of actions taken pursuant to authority delegated by the Board of Directors.
Direct requests for further information concerning the meeting to Debra A. Decker, Executive Secretary of the Corporation, at 202-898-8748.
The companies listed in this notice have given notice under section 4 of the Bank Holding Company Act (12 U.S.C. 1843) (BHC Act) and Regulation Y, (12 CFR part 225) to engage de novo, or to acquire or control voting securities or assets of a company, including the companies listed below, that engages either directly or through a subsidiary or other company, in a nonbanking activity that is listed in § 225.28 of Regulation Y (12 CFR 225.28) or that the Board has determined by Order to be closely related to banking and permissible for bank holding companies. Unless otherwise noted, these activities will be conducted throughout the United States.
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Unless otherwise noted, comments regarding the applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue, NW, Washington DC 20551-0001, not later than September 11, 2023.
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Board of Governors of the Federal Reserve System.
Federal Trade Commission.
Proposed consent agreement; request for comment.
The consent agreement in this matter settles alleged violations of Federal law prohibiting unfair methods of competition. The attached Analysis of Proposed Consent Orders to Aid Public Comment describes both the allegations in the complaint and the terms of the consent orders—embodied in the consent agreement—that would settle these allegations.
Comments must be received on or before September 25, 2023.
Interested parties may file comments online or on paper by following the instructions in the Request for Comment part of the
Greta Burkholder (202-326-3225), Bureau of Competition, Federal Trade Commission, 400 7th Street SW, Washington, DC 20024.
Pursuant to section 6(f) of the Federal Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule § 2.34, 16 CFR 2.34, notice is hereby given that the above-captioned consent agreement containing a consent order to cease and desist, having been filed with and accepted, subject to final approval, by the Commission, has been placed on the public record for a period of 30 days. The following Analysis of Agreement Containing Consent Order to Aid Public Comment describes the terms of the consent agreement and the allegations in the complaint. An electronic copy of the full text of the consent agreement package can be obtained from the FTC website at this web address:
You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before September 25, 2023. Write “EQT and Quantum; File No. 221 0212” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the
Because of the agency's heightened security screening, postal mail addressed to the Commission will be delayed. We strongly encourage you to submit your comments online through the
Because your comment will be placed on the publicly accessible website at
Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule § 4.9(c). In particular, the written request for confidential treatment that accompanies the comment must include the factual and legal basis for the request and must identify the specific portions of the comment to be withheld from the public record.
Visit the FTC website at
The Federal Trade Commission (“Commission”) has accepted for public comment, subject to final approval, an Agreement Containing Consent Order (“Consent Agreement”) from QEP Partners, LP, by itself and through the entities under its control (including Quantum Energy Partners VI, LP; Q-TH Appalachia (VI) Investment Partners, LLC) (collectively, “Quantum”), and EQT Corporation (“EQT,” and together with Quantum, “Respondents”). EQT has proposed acquiring THQ Appalachia I, LLC (“Tug Hill”) and THQ-XcL Holdings I, LLC (“XcL Midstream”) from Quantum for approximately $5.2 billion: $2.6 billion in cash and up to 55 million shares of EQT stock (“Proposed Transaction”). In addition to this consideration, and in connection with Quantum's anticipated status as one of EQT's largest shareholders, EQT agreed to facilitate the appointment of Quantum's CEO, or another Quantum-designated individual, to the EQT Board of Directors.
The Proposed Transaction raises several concerns. Specifically, both Quantum's anticipated position as one of EQT's largest shareholders and EQT's obligation to facilitate the appointment of a Quantum designee to the EQT board raise concerns that Quantum or EQT could have access to each other's competitively significant, non-public information and could participate in, or have influence over, competitive decision-making at each firm. Under Section 8 of the Clayton Act, it is per se illegal for directors and officers to serve simultaneously on the boards of competitors (subject to limited exceptions), as would occur here absent the Consent Agreement with the appointment of Quantum's designee to the board of its competitor, EQT. In addition to these concerns, a pre-existing joint venture between EQT and Quantum, The Mineral Company (“TMC”), raises concerns with respect to the exchange of competitively sensitive business information regarding the acquisition of mineral rights within the Appalachian Basin.
The Consent Agreement is designed to remedy allegations in the Commission's Complaint that: (1) Quantum's proposed acquisition of up to 55 million shares of EQT stock, together with or separately from assurances that a Quantum-designee will be nominated for a seat on the EQT Board of Directors, would result in an illegal interlocking directorate in violation of Section 8 of the Clayton Act, 15 U.S.C. 19, and an unfair method of competition in violation of Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45 due to potential exchange of confidential, competitively sensitive information, and that (2) TMC, the pre-existing Quantum/EQT joint venture, is an unfair method of competition in violation of section 5 of the FTC Act, 15 U.S.C. 45.
The proposed settlement presents significant relief for these concerns. The Consent Agreement and proposed Decision and Order (“D&O”) prohibit Quantum from occupying an EQT Board seat and require Quantum to divest its EQT shares by a non-public date certain, effectively imposing a structural fix to concerns about the influence and information access that arise from Quantum's sizable EQT shareholder position. The D&O contains provisions that incentivize Quantum's rapid sale of the EQT shares, coupled with provisions effectively rendering Quantum's ownership passive pending the sale of its EQT shares. The D&O also reduces opportunities for exchanging confidential and competitively significant information between the firms beyond Quantum's EQT share ownership, notably by requiring EQT and Quantum to unwind the TMC mineral rights acquisition joint venture. The D&O contemplates the appointment of a monitor to ensure compliance with the terms of the ten-year order.
The proposed D&O imposes effective and administrable relief, while setting important Commission precedent on the application of Section 8 of the Clayton Act, Section 5 of the FTC Act, and the use of structural remedies to address these theories of harm. By restricting future opportunities for the parties to engage in conduct that would result in Section 8 violations and other unfair methods of competition involving natural gas activities in the Appalachian Basin, the proposed D&O signals the antitrust risks of excessive influence and anticompetitive information exchange.
The Commission has placed the Consent Agreement on the public record for thirty days to solicit comments from interested persons. Comments received during this period will become part of the public record. After thirty days, the Commission will review the comments received and decide whether it should withdraw, modify, or make the proposed Order final.
Respondent QEP Partners, LP is a limited partnership organized, existing, and doing business under, and by virtue of, the laws of the State of Delaware, with its office and principal place of business located in Houston, Texas. Respondent QEP Partners, LP controls Respondents Quantum Energy Partners VI, LP and Q-TH Appalachia (VI) Investment Partners, LLC. Through its private equity, investment, and structured finance funds, Quantum owns, controls, or has influence over entities producing natural gas in the Appalachian Basin and throughout the country. Quantum-owned entities include Tug Hill, a natural gas producer in the Appalachian Basin, and XcL Midstream, a natural gas gatherer and processor in the Appalachian Basin, two entities sought for purchase by Respondent EQT.
Respondent EQT is a corporation organized, existing, and doing business under, and by virtue of, the laws of the Commonwealth of Pennsylvania, with its office and principal place of business located in Pittsburgh, Pennsylvania. EQT is the nation's largest producer of natural gas. EQT acquires mineral rights and produces natural gas and natural gas liquids primarily in the Appalachian
On September 6, 2022, EQT and Quantum entered into a Purchase Agreement, under which EQT sought to acquire Tug Hill and XcL Midstream from Quantum for a total purchase price of approximately $5.2 billion. Roughly half of the consideration to Quantum would take the form of up to 55 million shares of EQT stock.
The Commission's Complaint alleges that the Proposed Transaction, as structured, would violate Section 8 of the Clayton Act, 15 U.S.C. 19, as an illegal interlocking directorate, and that the Proposed Transaction—the acquisition of up to 55 million EQT shares or EQT's obligation to use best efforts to nominate a Quantum director—also constitutes an unfair method of competition in violation of Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45 due to risks of the exchange of competitively sensitive, non-public information.
In October 2020, EQT and a Quantum affiliate entered an agreement forming a joint venture, TMC. TMC served as a vehicle for EQT to purchase mineral rights in the Appalachian Basin, with funding largely supplied by Quantum. The TMC agreement requires EQT to offer a right of first refusal to TMC before EQT can purchase mineral rights within a specified geography. TMC receives forward-looking and competitively sensitive, non-public information about EQT's mineral rights acquisition plans, drilling plans, strategies, and operations. Quantum's participation in TMC management provided it with access to this information as well.
The Commission's Complaint alleges that the TMC joint venture is an unfair method of competition in violation of Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45.
The production and sale of natural gas is a relevant line of commerce. Natural gas is a critical fuel source with highly varied uses in the United States and worldwide. Natural gas purchasers generally cannot switch to alternative fuels without substantial costs and delay.
The acquisition of mineral rights is also a relevant line of commerce. To produce natural gas, a firm must first purchase or lease mineral rights from landowners. The mineral rights held by a producer can indicate key aspects of the producer's future production plans, including the areas the producer may drill and the amount of drilling activity the producer anticipates within a reasonable timeframe.
The Appalachian Basin, consisting of the portions of West Virginia, Pennsylvania, Ohio, Maryland, Kentucky, and Virginia that lie in the Appalachian Mountains, is widely recognized as a major natural gas producing area in the United States, and one of the largest in the world. A current shortage of available pipeline capacity to transport natural gas from the Appalachian Basin to demand centers outside of the Basin is a distinguishing characteristic of the region. Stranded excess gas supply in the Basin has artificially depressed local prices relative to pricing locations outside the Basin. Given current pipeline constraints, customers located within the Appalachian Basin cannot economically purchase gas from outside the Basin.
The Commission's Complaint addresses two theories of harm. First, Quantum's acquisition of up to 55 million EQT shares would make Quantum—an EQT rival in the production and sale of natural gas in the Appalachian Basin—one of the largest shareholders of EQT. This shareholder position would provide Quantum with the ability to sway or influence EQT's competitive decision-making and to access EQT's competitively sensitive information. As one of EQT's largest shareholders, Quantum would have the opportunity to communicate directly with EQT and could discuss confidential business information or direct or otherwise influence EQT's competitive actions or strategies. Knowledge gained via its relationship with EQT could also influence Quantum's own competitive decisions or development of new businesses involved in the production and sale of natural gas. The Commission's Complaint alleges these opportunities are particularly problematic given certain actions by the Respondents, including the TMC joint venture and other activities involving providing nonpublic information that restricted competition, the natural gas industry's history of encouraging the exchange of competitively sensitive information, and competitors publicly signaling their strategic moves to other competitors.
Moreover, the Proposed Transaction explicitly contemplated Quantum CEO Wil VanLoh's appointment to EQT's Board of Directors. In addition to his role as CEO, Mr. VanLoh is the Chair of the Investment Committee for Quantum Energy Partners, Quantum's private equity subsidiary and the entity that oversees the investment decisions of Respondent Quantum Energy Partners VI, LP and its subsidiaries. Mr. VanLoh was previously a member of the Tug Hill Board of Directors and also sits on the Board of Directors of another natural gas company in which Quantum invests. As a result, Mr. VanLoh's appointment to EQT's Board of Directors while simultaneously serving as CEO of Quantum and Chair of Quantum's Investment Committee would create an illegal interlocking directorate between EQT and Quantum. Any other director appointed by Quantum would be, by virtue of the appointment, an agent of Quantum and under its control. Thus, appointing a Quantum-designated director (other than Mr. VanLoh) to EQT's Board of Directors would similarly create an illegal interlock between EQT and Quantum. The Complaint alleges that the above concerns violate both section 8 of the Clayton Act and section 5 of the Federal Trade Commission Act.
The Complaint's second theory of harm addresses the TMC joint venture specifically, as well as information exchange more generally. The TMC joint venture creates additional opportunities for sharing competitively sensitive business information. Respondents already may use TMC as a vehicle for information exchange, either with respect to competition for the purchase of mineral rights or in connection with EQT's future drilling plans. Via the TMC joint venture, EQT and Quantum (through portfolio companies involved in the acquisition of mineral rights and production and sale of natural gas in the Appalachian Basin) each can inform the other where it intends to procure mineral rights for future productions and how much it plans to bid. This information is forward-looking, non-public, and competitively sensitive, and its exchange among rivals, coupled with the non-compete agreements in place
The proposed Order imposes several terms to remedy these concerns. First, the Order requires Quantum to forego its right to a seat on EQT's Board. Quantum shall not, directly or indirectly, appoint any persons to EQT's Board, seek or obtain representation on EQT's Board, or have any of its agents or representatives serve simultaneously as an officer or director of EQT or in a decision-making capacity of any EQT entity. EQT, conversely, shall not, directly or indirectly, have any of its representatives serve simultaneously in any management capacity within Quantum, any operating entity controlled by Quantum, or any investment fund managed by Quantum. This Order provision makes it clear that Quantum is subject to the prohibition on interlocking directors and officers under section 8 of the Clayton Act, despite Quantum's limited liability and limited partnership corporate structure.
Second, absent prior Commission approval, the proposed Order prohibits Quantum from serving on the Board of any of the top seven Appalachian Basin natural gas producers, accounting for a substantial majority of the market.
Third, Quantum shall sell its EQT shares by a non-public date certain. Failure to sell by that date will result in the transfer of the shares to a trustee empowered to liquidate the shares unilaterally. Quantum cannot knowingly divest these shares to an entity that is one of the top seven natural gas producers in the Appalachian Basin without prior Commission approval. Quantum is also prohibited from sharing with EQT any non-public information regarding its stock position or intent to sell or hold any of the EQT shares.
Fourth, during the period when Quantum owns EQT shares, the shares will be held in a voting trust, and any votes will be carried out by the trustee pro rata with all other EQT shareholders. The proposed Order prohibits Quantum from engaging in the solicitation of proxies in connection with its EQT shareholder position, and further prohibits Quantum from directly or indirectly influencing EQT's Board of Directors, management, or operations. Together, these provisions effectively render Quantum's shares a passive investment until the shares are sold.
Fifth, for the duration of the proposed ten-year Order, Quantum is prohibited from acquiring additional EQT shares absent prior Commission approval. During the period when Quantum owns EQT shares, however, prior approval is not needed for shares acquired indirectly as consideration for EQT's acquisition of a Quantum business that is subject to a premerger notification under the Hart-Scott-Rodino Act. Prior approval is also not required during a period when Quantum no longer owns EQT shares for shares acquired indirectly as consideration for EQT's acquisition of a Quantum business.
Sixth, the proposed Order also requires Quantum and EQT to unwind TMC, including any noncompete provisions.
Seventh, the proposed Order imposes further limitations on future entanglements between EQT and Quantum. For example, as noted above, the proposed Order prohibits any of EQT's directors, officers, agents, or representatives from serving simultaneously in any management capacity within Quantum, any operating entity controlled by Quantum, or any investment fund managed by Quantum. The proposed Order also prohibits Quantum and EQT from entering into any noncompete agreements other than those in connection with and ancillary to the sale of a business, assets, or company.
Eighth, the proposed Order contains additional provisions designed to ensure the effectiveness of the relief. A monitor will be appointed to track compliance, and both Respondents must provide regular compliance reports. Provisions of the proposed Order that do not end upon the sale of EQT shares will last up to ten years.
And finally, the proposed Order requires EQT and Quantum to distribute the Order to each of their respective board members, officers, and directors, and to design, maintain, and operate an antitrust compliance program.
The purpose of this analysis is to facilitate public comment on the Consent Agreement, and the Commission does not intend this analysis to constitute an official interpretation of the proposed Order or to modify its terms in any way.
By direction of the Commission.
In September 2022, the nation's largest natural gas producer, EQT Corporation (“EQT”), proposed to acquire certain natural gas assets from private equity firm, Quantum Energy Partners, LP (“Quantum”). EQT agreed to offer $2.6 billion in cash, up to 55 million shares of EQT stock, and a seat on EQT's Board of Directors. Quantum has a host of investments and operations across the oil and gas industry, and both companies and their affiliates compete head-to-head in the production of natural gas in the Appalachian Basin. The proposed transaction would make Quantum one of EQT's largest shareholders and secure Quantum a seat on the board of its direct competitor. After conducting a thorough investigation, the Commission determined it had reason to believe this deal was illegal.
Today, the Commission announces a settlement of charges that the proposed transaction would result in an illegal interlocking directorate in violation of Section 8 of the Clayton Act and an unfair method of competition in violation of Section 5 of FTC Act due to the potential for exchange of confidential and competitively significant information. Specifically, Quantum's anticipated position as one of EQT's largest shareholders and EQT's obligation to facilitate the appointment of a Quantum designee to the EQT board raise concerns that the firms could exchange non-public sensitive business information and participate in or influence each other's strategic decisions.
The potential risks to competition posed by this transaction are particularly concerning given the dense and tangled web of co-investments, joint operations, and other methods of coordination between and among natural gas producers and investors in the Appalachian Basin. The sector is characterized by a tight-knit set of players rife with entanglements and a history of suspicious ventures and information exchange. Along these lines, the Commission's complaint separately charges that a pre-existing joint venture between EQT and Quantum relating to mineral rights acquisitions constitutes an additional unfair method of competition in violation of the FTC Act.
The proposed consent order lays out several terms to remedy these concerns. The order prohibits Quantum from occupying an EQT Board seat and requires it to divest the EQT shares, imposing a structural remedy to address concerns about the influence and information access that arise from Quantum's sizable EQT shareholder position. The order additionally limits both current and future entanglements between the firms and reduces opportunities for exchanging confidential and competitively significant information between the firms, including by requiring EQT and Quantum to unwind their existing joint venture and any noncompete provisions.
Section 8 of the Clayton Act states that “no person shall, at the same time, serve as a director or officer in any two corporations . . . that are (a) engaged in whole or in part in commerce; and (b) by virtue of their business and location of operation, competitors, so that the elimination of competition by agreement between them would constitute a violation of any of the antitrust laws[.]”
Legislative efforts to address corporate interlocks were catalyzed by congressional reports in 1887, 1912, and 1913 that showed firms had used interlocks to win personal favors or exclusive treatment of suppliers or customers.
Though Section 8 has a clear purpose, it has rarely been enforced in the over 100 years since its passage, and even less so in the past four decades.
Over the past year, our colleagues at the Antitrust Division have sought to reactivate Section 8 and effectively put market participants back on notice.
The proposed order also puts industry actors on notice that they must follow Section 8 no matter what specific corporate form their business takes. Firms in the modern economy utilize a variety of corporate forms and structures to engage in commerce, and industry actors have become increasingly sophisticated at corporate organization and venture formation. This is especially true in the private equity and financial sectors, with various limited liability vehicles, limited partnerships, and structured funds intricately entangled through a web of corporate and fiduciary relationships. Indeed, Quantum uses a limited liability structure when setting up its portfolio companies, and Quantum itself is a limited partnership. Section 8's specific prohibition of interlocks among competitor “corporations” pre-dates the development of other commonly used corporate structures, such as limited liability companies.
The Commission's complaint charges that the proposed transaction would facilitate the exchange of confidential, competitively sensitive information in violation of Section 5 of the FTC Act. Specifically, Quantum's anticipated position as one of EQT's largest shareholders and EQT's obligation to facilitate the appointment of a Quantum designee to the EQT board raise concerns that Quantum or EQT could have access to one another's competitively significant, non-public information and could participate in, or have influence over, competitive decision-making at each firm. In addition to these concerns, a pre-existing joint venture between EQT and Quantum, The Mineral Company (“TMC”), may also facilitate the improper exchange of competitively sensitive business information regarding the acquisition of mineral rights within the Appalachian Basin.
In November 2022, the Commission issued a policy statement outlining the scope of Section 5 of the FTC Act.
Through the late 1970s, the FTC frequently brought Section 5 cases against conduct that would not necessarily run afoul of the Sherman or Clayton Acts. We now call these “standalone” Section 5 cases. They included invitations to collude;
Quantum's position on EQT's board of directors and its role as one of EQT's largest shareholders would provide Quantum with the ability to sway or influence EQT's competitive decision-making and to access EQT's competitively sensitive information. The Commission's complaint alleges these risks are particularly serious given certain past actions by the parties, as well as the natural gas industry's history of encouraging the exchange of competitively sensitive information and public signaling to competitors. The complaint alleges that the two firms' TMC joint venture separately violates Section 5 of the FTC Act as it creates additional opportunities for sharing competitively sensitive business information. Further, there is reason to believe that EQT and Quantum already may use TMC as a vehicle for information exchange for the purchase of mineral rights and in connection with EQT's future drilling plans. This information is forward-looking, non-public, and competitively sensitive, and its exchange among rivals, coupled with the noncompete agreements in place within the joint venture, harms competition.
The proposed order is designed to remedy these concerns. The order prohibits Quantum from occupying an EQT Board seat and requires it to divest the EQT shares, which would structurally eliminate key mechanisms for undue influence and information exchange. The order also limits both current and future entanglements between the firms and reduces opportunities for exchanging confidential and competitively significant information between the firms, including by requiring EQT and Quantum to unwind their existing joint venture and any noncompete provisions.
Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Notice.
Under the provisions of the Paperwork Reduction Act, the Regulatory Secretariat Division has submitted to the Office of Management and Budget (OMB) a request to review and approve an extension of a previously approved information collection requirement regarding prospective subcontractor requests for bonds.
Submit comments on or before September 25, 2023.
Written comments and recommendations for this information collection should be sent within 30 days of publication of this notice to
Additionally, submit a copy to GSA through
Zenaida Delgado, Procurement Analyst, at telephone 202-969-7207, or
9000-0135, Prospective Subcontractor Requests for Bonds.
Part 28 of the Federal Acquisition Regulation (FAR) contains guidance related to obtaining financial protection against losses under Federal contracts (
This information collection is mandated by section 806(a)(3) of Public Law 102-190, as amended by sections 2091 and 8105 of the Federal Acquisition Streamlining Act of 1994 (10 U.S.C. 4601 note prec.) (Pub. L. 103-335). Accordingly, the FAR clause at 52.228-12, Prospective Subcontractor Requests for Bonds, requires prime contractors to promptly provide a copy of a payment bond, upon the request of a prospective subcontractor or supplier offering to furnish labor or material under a construction contract for which a payment bond has been furnished pursuant to 40 U.S.C. chapter 31.
The General Services Administration is the sponsor agency of this common form. All executive agencies covered by the FAR will use this common form. Each executive agency will report their agency burden separately, and the reported information will be available at
A 60-day notice was published in the
Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Notice.
Under the provisions of the Paperwork Reduction Act, the Regulatory Secretariat Division has submitted to the Office of Management and Budget (OMB) a request to review and approve an extension of a previously approved information collection requirement regarding contract financing.
Submit comments on or before September 25, 2023.
Written comments and recommendations for this information collection should be sent within 30 days of publication of this notice to
Additionally, submit a copy to GSA through
Zenaida Delgado, Procurement Analyst, at telephone 202-969-7207, or
9000-0138, Contract Financing.
This clearance covers the information that offerors and contractors must submit to comply with the following Federal Acquisition Regulation (FAR) requirements:
• FAR 52.232-28, Invitation to Propose Performance-Based Payments.
This provision requires an offeror, when invited to propose terms under which the Government will make performance-based contract financing payments during contract performance, to include the following: the proposed contractual language describing the performance-based payments; information addressing the contractor's investment in the contract and a listing of—
(i) The projected performance-based payment dates and the projected payment amounts; and
(ii) The projected delivery date and the projected payment amount.
• FAR 52.232-29, Terms for Financing of Purchases of Commercial Products and Commercial Services.
• FAR 52.232-30, Installment Payments for Commercial Products and Commercial Services.
These clauses require contractors, under commercial purchases pursuant to FAR part 12, to include with their payment requests an appropriately itemized statement of the financing payments requested and other supporting information, prepared in concert with the contracting officer.
• FAR 52.232-31, Invitation to Propose Financing Terms.
This provision requires an offeror, when invited to propose terms under which the Government will make contract financing payments during contract performance under commercial purchases pursuant to FAR part 12, to include the following: the proposed contractual language describing the contract financing; and a listing of the earliest date and greatest amount at which each contract financing payment may be payable and the amount of each delivery payment.
• FAR 52.232-32, Performance-Based Payments.
This clause requires the contractor's request for performance-based payment to include any information and documentation as required by the contract's description of the basis for payment; and a certification by a contractor official authorized to bind the contractor.
The contracting officer uses the collected information to review and approve contract financing requests, and establish and administer contract financing terms.
The General Services Administration is the sponsor agency of this common form. All executive agencies covered by the FAR will use this common form. Each executive agency will report their agency burden separately, and the reported information will be available at
A 60-day notice was published in the
Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).
Notice.
Under the provisions of the Paperwork Reduction Act, the Regulatory Secretariat Division has submitted to the Office of Management and Budget (OMB) a request to review and approve an extension of a previously approved information collection requirement regarding preaward survey forms.
Submit comments on or before September 25, 2023.
Written comments and recommendations for this information collection should be sent within 30 days of publication of this notice to
Additionally, submit a copy to GSA through
Zenaida Delgado, Procurement Analyst, at telephone 202-969-7207, or
9000-0011, Preaward Survey Forms (Standard Forms 1403, 1404, 1405, 1406, 1407, and 1408).
Contracting officers, prior to award, must make an affirmative determination that the prospective contractor is responsible,
The General Services Administration is the sponsor agency of this common form. All executive agencies covered by the FAR will use this common form. Each executive agency will report their agency burden separately, and the reported information will be available at
A 60-day notice was published in the
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice and request for comment.
In accordance with regulatory provisions, the Centers for Disease Control and Prevention (CDC) announces the following meeting of the Advisory Committee on Immunization Practices (ACIP). This meeting is open to the public. Time will be available for public comment.
The meeting will be held on September 12, 2023, 10 a.m. to 4 p.m., EDT (date and times subject to change; see the ACIP website for updates:
Written comments will be received between August 25-September 8, 2023.
You may submit comments, identified by Docket No. CDC-2023-0060, by either of the methods listed below. CDC does not accept comments by email.
•
•
The meeting will be webcast live via the World Wide Web. The webcast link can be found on the ACIP website at
Ms. Stephanie Thomas, Committee Management Specialist, Advisory Committee on Immunization Practices, National Center for Immunization and Respiratory Diseases, Centers for Disease Control and Prevention, 1600 Clifton Road NE, Mailstop H24-8, Atlanta, Georgia 30329-4027. Telephone: (404) 639-8836; Email:
Interested persons or organizations are invited to participate by submitting written views, recommendations, and data. Please note that comments received, including attachments and other supporting materials, are part of the public record and are subject to public disclosure. Comments will be posted on
If the number of persons requesting to speak is greater than can be reasonably accommodated during the scheduled time, CDC will conduct a lottery to determine the speakers for the scheduled public comment session. CDC staff will notify individuals regarding their request to speak by email on September 11, 2023. To accommodate the significant interest in participation in the oral public comment session of ACIP meetings, each speaker will be limited to three minutes, and each speaker may only speak once per meeting.
The Director, Office of Strategic Business Initiatives, Office of the Chief Operating Officer, Centers for Disease Control and Prevention, has been delegated the authority to sign
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice with comment period.
The Centers for Disease Control and Prevention (CDC), as part of its continuing effort to reduce public burden and maximize the utility of government information, invites the general public and other Federal agencies the opportunity to comment on a proposed and/or continuing information collection, as required by the Paperwork Reduction Act of 1995. This notice invites comment on a proposed information collection project titled Program Evaluation for PS22-2208 Component 2. This information collection request is designed to monitor and evaluate the PS22-2208 Component 2 funding opportunity's overall goal of supporting syringe services program (SSP) subrecipients in meeting the needs of people who use drugs (PWUD) and reducing infectious disease and other harms related to drug use during the 5-year PS22-2208 Cooperative Agreement.
CDC must receive written comments on or before October 24, 2023.
You may submit comments, identified by Docket No. CDC-2023-0074 by either of the following methods:
•
•
To request more information on the proposed project or to obtain a copy of the information collection plan and instruments, contact Jeffrey M. Zirger, Information Collection Review Office, Centers for Disease Control and Prevention, 1600 Clifton Road NE, MS H21-8, Atlanta, Georgia 30329; Telephone: 404-639-7570; Email:
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. In addition, the PRA also requires Federal agencies to provide a 60-day notice in the
The OMB is particularly interested in comments that will help:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected;
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
5. Assess information collection costs.
Program Evaluation for PS22-2208 Component 2—New—National Center for HIV, Viral Hepatitis, STD, and TB Prevention (NCHHSTP), Centers for Disease Control and Prevention, Centers for Disease Control and Prevention (CDC).
PS22-2208 Component 2 (Strengthening Syringe Services Programs) serves as a coordinated and accountable mechanism for distribution of funding to syringe services programs (SSPs) to support implementation and expansion of services in areas of the United States, Territories, and Tribal Nations disproportionately affected by infectious disease consequences of injection drug use. Project activities will directly contribute to establishing and expanding a national SSP infrastructure and prevention of infectious disease consequences of drug use. CDC has funded the National Alliance of State and Territorial AIDs Directors (NASTAD) to implement this project. NASTAD, in partnership with University of Washington will collect monitoring and evaluation data from funded SSPs through their internal mechanisms, both for their internal evaluation as well as to report semi-annual and annual project performance reports and stratified aggregate data to CDC.
The primary purpose of this information collection is to monitor and evaluate the PS22-2208 Component 2 funding opportunity's overall goal of supporting SSP subrecipients in meeting the needs of people who use drugs (PWUD) and reducing infectious disease and other harms related to drug use. During the first year of this Cooperative Agreement, all PS22-2208 SSP subrecipients will be sent a 25-minute baseline program evaluation survey at the start of project implementation, and a 15-minute quarterly program evaluation survey in the following three quarters of the project period. For Years 2-5, new PS22-2208 SSP subrecipients will be sent the baseline survey at the start of project implementation, and all existing subrecipients will receive the quarterly program evaluation survey in the following three quarters of the project period. SSP subrecipients will primarily complete the survey online in REDCap, with options to complete via telephone or videoconferencing modalities. Subrecipients will be asked to complete the surveys within one month of receipt and will receive weekly reminders until the survey is completed. SSP subrecipients may be reminded informally during meetings with NASTAD and may also work with their NASTAD point-of-contact to determine an alternate method of survey completion. The survey will include questions on operational and programmatic characteristics, and quantity of prevention and treatment services provided in-person, through tele-health, and through navigation to off-site care, during the specified evaluation period.
Approximately 200 SSPs will participate in the survey. We estimate that it will take 70 minutes to complete the baseline survey and three quarterly surveys, regardless of how the respondent chooses to complete it (
In accordance with the Paperwork Reduction Act of 1995, the Centers for Disease Control and Prevention (CDC) has submitted the information collection request titled “Enterprise Laboratory Information Management System” to the Office of Management and Budget (OMB) for review and approval. CDC previously published a “Proposed Data Collection Submitted for Public Comment and Recommendations” notice on June 09, 2023, to obtain comments from the public and affected agencies. CDC did not receive comments related to the previous notice. This notice serves to allow an additional 30 days for public and affected agency comments.
CDC will accept all comments for this proposed information collection project. The Office of Management and Budget is particularly interested in comments that:
(a) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(b) Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(c) Enhance the quality, utility, and clarity of the information to be collected;
(d) Minimize the burden of the collection of information on those who are to respond, including, through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
(e) Assess information collection costs.
To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639-7570. Comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Enterprise Laboratory Information Management System (OMB Control No. 0920-1309, Exp. 11/30/2023)—Revision—National Center for Emerging and Zoonotic Infectious Diseases (NCEZID), Centers for Disease Control and Prevention (CDC).
The collection of specimen information designated for testing by the CDC occurs on a regular and recurring basis (multiple times per day) using an electronic PDF file called the
Likewise, the
CDC requests OMB approval for an estimated 2,153 annualized burden hours. There is no cost to respondents other than their time to participate.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice.
The Centers for Disease Control and Prevention (CDC), located within the Department of Health and Human Services (HHS), announces the award of approximately $6,000,000, for Year 1 funding to icddr,b. The award will support high quality public health research and surveillance activities to further strengthen the ability of the Government of Bangladesh and other global partners to detect, prevent, and respond to disease threats. Funding amounts for years 2-5 will be set at continuation.
The period for this award will be September 30, 2024 through September 29, 2029.
Lata Kumar, Global Health Center, Centers for Disease Control and Prevention, Atlanta, GA, 30033, Telephone: 404-639-7618, email:
The single-source award will support high quality public health and implementation science research that will guide stakeholders to prioritize resources, develop policies, and implement practices and interventions that will help mitigate the impact of health threats on the Bangladeshi population and globally. icddr,b is in a unique position to conduct this work, as it is the only non-diplomatic partner that CDC is aware of that has the legal authority and operational expertise to process the import of laboratory supplies and reagents, including time sensitive reagents. Surveillance activities contemplated under this award detect and isolate high-consequence pathogens whose handling and storage require advanced biocontainment skills and capacity. icddr,b's clinical microbiology laboratory meets the international standards of quality and is ISO 15189-2012 accredited and the institute has a strong and active institutional biosafety committee and Senior Biosafety Officer. icddr,b is the most biosafety capable institution in the country to execute critical ongoing studies on pathogens having pandemic potential such as Nipah virus, the testing of human, avian and bovine surveillance samples with unknown etiology, and studies of
Centers for Medicare & Medicaid Services, Health and Human Services (HHS).
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (the PRA), federal agencies are required to publish notice in the
Comments must be received by October 24, 2023.
When commenting, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be submitted in any one of the following ways:
1.
2.
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, please access the CMS PRA website by copying and pasting the following web address into your web browser:
William N. Parham at (410) 786-4669.
This notice sets out a summary of the use and burden associated with the following information collections. More detailed information can be found in each collection's supporting statement and associated materials (see
Under the PRA (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA requires federal agencies to publish a 60-day notice in the
1.
Centers for Medicare & Medicaid Services (CMS), HHS.
Notice, correction.
On August 11, 2023, CMS published a notice in the
William N. Parham, III, (410) 786-4669.
In the August 11, 2023, issue of the
In the August 11, 2023, notice, the point of contact for policy questions is incorrect. The incorrect language is on located at the top of the right column on page 54614, beginning on line 6 with “Chanelle Jones” and ending at the end of line 6. All of the other information contained in the August 11, 2023, notice is correct and remains unchanged. The related public comment period remains in effect and ends September 11, 2023.
In FR Doc. 2023-16804 of August 11, 2023, (88 FR 54613), page 54614, the language at the top of the right column beginning on line 6 with “Chanelle Jones” and ending at the end of line 6, is corrected to read as follows:
Abigale Sanft at 410-786-6068.
Center for Drug Evaluation and Research, Food and Drug Administration, HHS.
Notice of opportunity for public comment.
The Center for Drug Evaluation and Research (CDER) of the Food and Drug Administration (FDA, the Agency) is proposing to withdraw approval of PEPAXTO (melphalan flufenamide) for injection, equivalent to (EQ) 20 milligrams (mg) BASE/VIAL, once every 28 days, new drug application (NDA) 214383, held by Oncopeptides AB (Oncopeptides). This notice is intended to provide an opportunity for public comment on CDER's proposed withdrawal of PEPAXTO, in accordance with the expedited withdrawal of approval procedures described in the Federal Food, Drug and Cosmetic Act (FD&C Act).
Either electronic or written comments on this proposal to withdraw PEPAXTO must be submitted by September 25, 2023.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Anuj Shah, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6224, Silver Spring, MD 20993-0002, 301-796-2246.
FDA approved NDA 214383 for PEPAXTO on February 26, 2021, under the accelerated approval pathway (section 506(c) of the FD&C Act (21 U.S.C. 356(c)) and 21 CFR part 314, subpart H) for use in combination with dexamethasone for the treatment of adult patients with relapsed or refractory multiple myeloma who have received at least four prior lines of therapy and whose disease is refractory to at least one proteasome inhibitor, one immunomodulatory drug, and one CD38-directed monoclonal antibody (triple class refractory).
NDA 214383 relied on evidence from Trial OP-106 (ClinicalTrials.gov NCT number, NCT02963493), also known as HORIZON, a single-arm, open-label, phase 2 multicenter clinical trial that enrolled patients with relapsed or refractory multiple myeloma and who received at least two lines of prior therapy including an immunomodulatory drug and a proteasome inhibitor. The primary endpoint was overall response rate (ORR),
At the time of approval under the accelerated approval pathway, the applicant was required to conduct an appropriate post-approval study to verify and describe the clinical benefit of PEPAXTO.
Section 506(c) of the FD&C Act, as amended most recently by the Consolidated Appropriations Act of 2023 (Pub. L. 117-328), describes the accelerated approval of new drug applications and the procedures and authority governing expedited withdrawal of approval. FDA has the legal authority to use the expedited procedures to withdraw approval of a product that has received accelerated approval if, among other reasons, “a study required to verify and describe the predicted effect on irreversible morbidity or mortality or other clinical benefit of the product fails to verify and describe such effect or benefit” (section 506(c)(3)(A)(ii) of the FD&C Act) or “other evidence demonstrates that the product is not shown to be safe or effective under the conditions of use.” (section 506(c)(3)(A)(iii) of the FD&C Act.)
CDER proposes to withdraw approval of PEPAXTO because the required confirmatory study, Trial OP-103, also known as OCEAN, failed to verify clinical benefit and because available evidence demonstrates PEPAXTO is not shown to be safe or effective under its conditions of use. More specifically, the results failed to show that PEPAXTO had a significant effect on the primary endpoint of progression-free survival. Furthermore, the observed median overall survival was 5.3 months shorter in the PEPAXTO arm compared to the control arm. After considering all the available data and the discussion at the ODAC held in September 2022, CDER recommends withdrawing the accelerated approval for PEPAXTO. Please refer to CDER's “Notice to Oncopeptides of Proposed Withdrawal of PEPAXTO” and “Proposed Withdrawal of PEPAXTO Decisional Memorandum” for additional explanation.
In accordance with the expedited withdrawal of approval procedures described in section 506(c)(3)(B)(ii) and (iii) of the FD&C Act, CDER is providing an opportunity for public comment on its proposal to withdraw approval of NDA 214383 (PEPAXTO) through the issuance of a
Health Resources and Services Administration (HRSA), Department of Health and Human Services.
Notice.
In compliance with the requirement for opportunity for public comment on proposed data collection projects of the Paperwork Reduction Act of 1995, HRSA announces plans to submit an Information Collection Request (ICR), described below, to the Office of Management and Budget (OMB). Prior to submitting the ICR to OMB, HRSA seeks comments from the public regarding the burden estimate, below, or any other aspect of the ICR.
Comments on this ICR should be received no later than October 24, 2023.
Submit your comments to
To request more information on the proposed project or to obtain a copy of the data collection plans and draft instruments, email
When submitting comments or requesting information, please include the ICR title for reference.
The QPU is completed via HRSA's Electronic Handbook system and
HRSA specifically requests comments on (1) the necessity and utility of the proposed information collection for the proper performance of the agency's functions; (2) the accuracy of the estimated burden; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the Board of Scientific Counselors, National Institute on Alcohol Abuse and Alcoholism.
The meeting will be closed to the public as indicated below in accordance with the provisions set forth in section 552b(c)(6), title 5 U.S.C., as amended for the review, discussion, and evaluation of individual intramural programs and projects conducted by the National Institute on Alcohol Abuse and Alcoholism, including consideration of personnel qualifications and performance, and the competence of individual investigators, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Information is also available on the Institute's/Center's home page:
National Institutes of Health, HHS.
Notice.
In compliance with the requirement of the Paperwork Reduction Act of 1995, for opportunity for public comment on proposed data collection projects, the Clinical Center, the National Institutes of Health (NIH) will publish periodic summaries of proposed projects to be submitted to the Office of Management and Budget (OMB) for review and approval.
Comments regarding this information collection are best assured of having their full effect if received within 30 days of the date of this publication.
To obtain a copy of the data collection plans and instruments, contact: Tom Burklow, MD, Office of Clinical Research Training and Medical Education, NIH Clinical Center, National Institutes of Health, 10 Center Drive, Room 1N262, Bethesda, MD 20892-1158, or call non-toll-free number 301-435-8015, or Email your request, including your address to:
This proposed information collection was previously published in the
OMB approval is requested for 3 years. There are no costs to respondents other than their time. The total estimated annualized burden hours 633.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Jason M. Chan, Ph.D., Scientific Review Officer, Scientific Review Branch, National Institute of General Medical Sciences, 45 Center Drive, MSC 6200, Bethesda, Maryland 20892, 301-594-3663,
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 1009 of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meetings of the National Institute of Biomedical Imaging and Bioengineering Special Emphasis Panel.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Coast Guard, DHS.
Notice of availability of recommendations and request for comments.
The Coast Guard announces the availability of recommendations from the National Commercial Fishing Safety Advisory Committee. The Committee met in May 2023 and sent five recommendations to the Secretary of Homeland Security. The U.S. Coast Guard issues this Notice as the mechanism for receiving public comments and requests public comments on the recommendations.
Comments must be submitted on or before November 24, 2023.
You may submit comments identified by docket number USCG-2023-0245 using the Federal Decision Making Portal at
For information about this document email questions to
We encourage you to submit comments (or related material) on the committee recommendations. If you submit a comment, please include the docket number for this notice, indicate the specific recommendation to which each comment applies, and provide a reason for each suggestion.
The National Commercial Fishing Safety Advisory Committee is authorized by section 601 of the
The National Commercial Fishing Safety Advisory Committee provides advice and recommendations to the Secretary of Homeland Security through the Commandant of the U.S. Coast Guard, on matters relating to the safe operation of vessels. Additionally, the Committee will review regulations proposed under chapter 45 of Title 46 of U.S. Code (during preparation of the regulations) and review marine casualties and investigations of vessels covered by chapter 45 of Title 46 U.S. Code and make recommendations to the Secretary to improve safety and reduce vessel casualties.
The National Commercial Fishing Safety Advisory Committee (the committee) met from May 23, 2023 to May 25, 2023 (88 FR 26585).
• Task #01-23 tasked the committee with reviewing 10 Marine Casualty investigation cases related to Personal
• Task #02-23 tasked the committee with reviewing 8 Marine Casualty investigation cases related to Cold Water and making recommendations to the Secretary of Homeland Security.
• Task #03-23 tasked the committee with reviewing 2 Marine Casualty investigation cases related to Falls Overboard and making recommendations to the Secretary of Homeland Security.
The recommendations are available in the docket and also can be found on our website at
We invite public comments on these recommendations.
Federal Emergency Management Agency, Department of Homeland Security.
Notice.
New or modified Base (1-percent annual chance) Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, and/or regulatory floodways (hereinafter referred to as flood hazard determinations) as shown on the indicated Letter of Map Revision (LOMR) for each of the communities listed in the table below are finalized. Each LOMR revises the Flood Insurance Rate Maps (FIRMs), and in some cases the Flood Insurance Study (FIS) reports, currently in effect for the listed communities.
Each LOMR was finalized as in the table below.
Each LOMR is available for inspection at both the respective Community Map Repository address listed in the table below and online through the FEMA Map Service Center at
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
The Federal Emergency Management Agency (FEMA) makes the final flood hazard determinations as shown in the LOMRs for each community listed in the table below. Notice of these modified flood hazard determinations has been published in newspapers of local circulation and 90 days have elapsed since that publication. The Deputy Associate Administrator for Insurance and Mitigation has resolved any appeals resulting from this notification.
The modified flood hazard determinations are made pursuant to section 206 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001
The new or modified flood hazard information is the basis for the floodplain management measures that the community is required either to adopt or to show evidence of being already in effect in order to remain qualified for participation in the National Flood Insurance Program (NFIP).
This new or modified flood hazard information, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities.
This new or modified flood hazard determinations are used to meet the floodplain management requirements of the NFIP. The changes in flood hazard determinations are in accordance with 44 CFR 65.4.
Interested lessees and owners of real property are encouraged to review the final flood hazard information available at the address cited below for each community or online through the FEMA Map Service Center at
Federal Emergency Management Agency, Department of Homeland Security.
Notice.
Comments are requested on proposed flood hazard determinations, which may include additions or modifications of any Base Flood Elevation (BFE), base flood depth, Special Flood Hazard Area (SFHA) boundary or zone designation, or regulatory floodway on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports for the communities listed in the table below. The purpose of this notice is to seek general information and comment regarding the preliminary FIRM, and where applicable, the FIS report that the Federal Emergency Management Agency (FEMA) has provided to the affected communities. The FIRM and FIS report are the basis of the floodplain management measures that the community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP).
Comments are to be submitted on or before November 24, 2023.
The Preliminary FIRM, and where applicable, the FIS report for each community are available for inspection at both the online location
You may submit comments, identified by Docket No. FEMA-B-2360, to Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
FEMA proposes to make flood hazard determinations for each community listed below, in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR 67.4(a).
These proposed flood hazard determinations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities. These flood hazard determinations are used to meet the floodplain management requirements of the NFIP.
The communities affected by the flood hazard determinations are provided in the tables below. Any request for reconsideration of the revised flood hazard information shown on the Preliminary FIRM and FIS report that satisfies the data requirements outlined in 44 CFR 67.6(b) is considered an appeal. Comments unrelated to the flood hazard determinations also will be
Use of a Scientific Resolution Panel (SRP) is available to communities in support of the appeal resolution process. SRPs are independent panels of experts in hydrology, hydraulics, and other pertinent sciences established to review conflicting scientific and technical data and provide recommendations for resolution. Use of the SRP only may be exercised after FEMA and local communities have been engaged in a collaborative consultation process for at least 60 days without a mutually acceptable resolution of an appeal. Additional information regarding the SRP process can be found online at
The watersheds and/or communities affected are listed in the tables below. The Preliminary FIRM, and where applicable, FIS report for each community are available for inspection at both the online location
Federal Emergency Management Agency, Department of Homeland Security.
Notice.
Comments are requested on proposed flood hazard determinations, which may include additions or modifications of any Base Flood Elevation (BFE), base flood depth, Special Flood Hazard Area (SFHA) boundary or zone designation, or regulatory floodway on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports for the communities listed in the table below. The purpose of this notice is to seek general information and comment regarding the preliminary FIRM, and where applicable, the FIS report that the Federal Emergency Management Agency (FEMA) has provided to the affected communities. The FIRM and FIS report are the basis of the floodplain management measures that the community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP).
Comments are to be submitted on or before November 24, 2023.
The Preliminary FIRM, and where applicable, the FIS report for each community are available for inspection at both the online location
You may submit comments, identified by Docket No. FEMA-B-2359, to Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
FEMA proposes to make flood hazard determinations for each community listed below, in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR 67.4(a).
These proposed flood hazard determinations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities. These flood hazard determinations are used to meet the floodplain management requirements of the NFIP.
The communities affected by the flood hazard determinations are provided in the tables below. Any request for reconsideration of the revised flood hazard information shown on the Preliminary FIRM and FIS report that satisfies the data requirements outlined in 44 CFR 67.6(b) is considered an appeal. Comments unrelated to the flood hazard determinations also will be considered before the FIRM and FIS report become effective.
Use of a Scientific Resolution Panel (SRP) is available to communities in support of the appeal resolution process. SRPs are independent panels of experts in hydrology, hydraulics, and other pertinent sciences established to review conflicting scientific and technical data and provide recommendations for resolution. Use of the SRP only may be exercised after FEMA and local communities have been engaged in a collaborative consultation process for at least 60 days without a mutually acceptable resolution of an appeal. Additional information regarding the SRP process can be found online at
The watersheds and/or communities affected are listed in the tables below. The Preliminary FIRM, and where applicable, FIS report for each community are available for inspection at both the online location
Federal Emergency Management Agency; Department of Homeland Security.
Notice; correction.
On July 31, 2023, FEMA published in the
Comments are to be submitted on or before October 30, 2023.
The Preliminary Flood Insurance Rate Map (FIRM), and where applicable, the Flood Insurance Study (FIS) report for each community are available for inspection at both the online location and the respective Community Map Repository address listed in the table below. Additionally, the current effective FIRM and FIS report for each community are accessible online through the FEMA Map Service Center at
You may submit comments, identified by Docket No. FEMA-B-2351, to Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
FEMA proposes to make flood hazard determinations for each community listed in the table below, in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR 67.4(a).
These proposed flood hazard determinations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own, or pursuant to policies established by other Federal, State, or regional entities. These flood hazard determinations are used to meet the floodplain management requirements of the NFIP.
Use of a Scientific Resolution Panel (SRP) is available to communities in support of the appeal resolution process. SRPs are independent panels of experts in hydrology, hydraulics, and other pertinent sciences established to review conflicting scientific and technical data and provide recommendations for resolution. Use of the SRP may only be exercised after FEMA and local communities have been engaged in a collaborative consultation process for at least 60 days without a mutually acceptable resolution of an appeal. Additional information regarding the SRP process can be found online at
The communities affected by the flood hazard determinations are provided in the table below. Any request for reconsideration of the revised flood hazard determinations shown on the Preliminary FIRM and FIS report that satisfies the data requirements outlined in 44 CFR 67.6(b) is considered an appeal. Comments unrelated to the flood hazard determinations will also be considered before the FIRM and FIS report are made final.
In the proposed flood hazard determination notice published at 88 FR 49487 in the July 31, 2023, issue of the
Federal Emergency Management Agency, Department of Homeland Security.
Notice.
This notice lists communities where the addition or modification of Base Flood Elevations (BFEs), base flood depths, Special Flood Hazard Area (SFHA) boundaries or zone designations, or the regulatory floodway (hereinafter referred to as flood hazard determinations), as shown on the Flood Insurance Rate Maps (FIRMs), and where applicable, in the supporting Flood Insurance Study (FIS) reports, prepared by the Federal Emergency Management Agency (FEMA) for each community, is appropriate because of new scientific or technical data. The FIRM, and where applicable, portions of the FIS report, have been revised to reflect these flood hazard determinations through issuance of a Letter of Map Revision (LOMR), in accordance with Federal Regulations. The currently effective community number is shown in the table below and must be used for all new policies and renewals.
These flood hazard determinations will be finalized on the dates listed in the table below and revise the FIRM panels and FIS report in effect prior to this determination for the listed communities.
From the date of the second publication of notification of these changes in a newspaper of local circulation, any person has 90 days in which to request through the community that the Deputy Associate Administrator for Insurance and Mitigation reconsider the changes. The flood hazard determination information may be changed during the 90-day period.
The affected communities are listed in the table below. Revised flood hazard information for each community is available for inspection at both the online location and the respective community map repository address listed in the table below. Additionally, the current effective FIRM and FIS report for each community are accessible online through the FEMA Map Service Center at
Submit comments and/or appeals to the Chief Executive Officer of the community as listed in the table below.
Rick Sacbibit, Chief, Engineering Services Branch, Federal Insurance and Mitigation Administration, FEMA, 400 C Street SW, Washington, DC 20472, (202) 646-7659, or (email)
The specific flood hazard determinations are not described for each community in this notice. However, the online location and local community map repository address where the flood hazard determination information is available for inspection is provided.
Any request for reconsideration of flood hazard determinations must be submitted to the Chief Executive Officer of the community as listed in the table below.
The modifications are made pursuant to section 201 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001
The FIRM and FIS report are the basis of the floodplain management measures that the community is required either to adopt or to show evidence of having in effect in order to qualify or remain qualified for participation in the National Flood Insurance Program (NFIP).
These flood hazard determinations, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities. The flood hazard determinations are in accordance with 44 CFR 65.4.
The affected communities are listed in the following table. Flood hazard determination information for each community is available for inspection at both the online location and the respective community map repository address listed in the table below. Additionally, the current effective FIRM and FIS report for each community are accessible online through the FEMA Map Service Center at
Bureau of Indian Affairs, Interior.
Notice.
The Department of the Interior (Department) gives notice that the group known as the Fernandeño Tataviam Band of Mission Indians has filed a documented petition for Federal acknowledgment as an American Indian Tribe with the Assistant Secretary—Indian Affairs. The Department seeks comment and evidence from the public on the petition.
Comments and evidence must be postmarked by January 2, 2024.
Copies of the narrative portion of the documented petition, as submitted by the petitioner (with any redactions appropriate under 25 CFR 83.21(b)), and other information are available at the Office of Federal Acknowledgment's website:
Mr. R. Lee Fleming, OFA Director, Office of the Assistant Secretary—Indian Affairs, Department of the Interior, telephone: (202) 513-7650.
On July 31, 2015, the Department's revisions to 25 CFR part 83 became final and effective (80 FR 37861). A key goal of the revisions was to improve transparency through increased notice of petitions and providing improved public access to petitions. Today the Department informs the public that a complete documented petition has been submitted under the current regulations, that portions of that petition are publicly available on the website identified above for easy access, and that we are seeking public comment early in the process on this petition.
Under 25 CFR 83.22(b)(1), the Office of Federal Acknowledgment (OFA) publishes notice that the following group has filed a documented petition for Federal acknowledgment as an American Indian Tribe to the Assistant Secretary-Indian Affairs: Fernandeño Tataviam Band of Mission Indians c/o Mr. Rudy J. Ortega, Jr., 1019 Second Street, Box 1, San Fernando, California 91340.
Also, under 25 CFR 83.22(b)(1), OFA publishes on its website the following:
i. The narrative portion of the documented petition, as submitted by the petitioner (with any redactions appropriate under 25 CFR 83.21(b));
ii. The name, location, and mailing address of the petitioner and other information to identify the entity;
iii. The date of receipt;
iv. The opportunity for individuals and entities to submit comments and evidence supporting or opposing the petitioner's request for acknowledgment within 120 days of the date of the website posting; and
v. The opportunity for individuals and entities to request to be kept informed of general actions regarding a specific petitioner.
The Department publishes this notice and request for comment in the exercise of authority delegated by the Secretary of the Interior to the Assistant Secretary—Indian Affairs by 209 DM 8.
National Park Service, Interior.
Notice.
The National Park Service is soliciting electronic comments on the significance of properties nominated before August 12, 2023, for listing or related actions in the National Register of Historic Places.
Comments should be submitted electronically by September 11, 2023.
Comments are encouraged to be submitted electronically to
Sherry A. Frear, Chief, National Register of Historic Places/National Historic Landmarks Program, 1849 C Street NW, MS 7228, Washington, DC 20240,
The properties listed in this notice are being considered for listing or related actions in the National Register of Historic Places. Nominations for their consideration were received by the National Park Service before August 12, 2023. Pursuant to section 60.13 of 36 CFR part 60, comments are being accepted concerning the significance of the nominated properties under the National Register criteria for evaluation.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that
Nominations submitted by State or Tribal Historic Preservation Officers:
Additional documentation has been received for the following resources:
Nomination submitted by Federal Preservation Officer:
The State Historic Preservation Officer reviewed the following nomination and responded to the Federal Preservation Officer within 45 days of receipt of the nomination and supports listing the property in the National Register of Historic Places.
Bureau of Ocean Energy Management, Interior.
Final notice of sale.
On Wednesday, September 27, 2023, the Bureau of Ocean Energy Management (BOEM) will open and publicly announce bids received for blocks offered in the Gulf of Mexico (GOM) Outer Continental Shelf (OCS) Oil and Gas Lease Sale 261 (GOM Lease Sale 261), in accordance with the Outer Continental Shelf Lands Act (OCSLA), as amended, and its implementing regulations. The Inflation Reduction Act of 2022 (IRA) requires BOEM to hold GOM Lease Sale 261 by September 30, 2023. The GOM Lease Sale 261 Final Notice of Sale (Final NOS) package contains information essential to potential bidders and comprises this notice, Information to Lessees, and Lease Stipulations.
BOEM will hold GOM Lease Sale 261 at 9:00 a.m. on Wednesday, September 27, 2023. All times referred to in this document are Central time, unless otherwise specified.
Bids will be accepted by MAIL ONLY through any parcel delivery service (
The New Orleans Office Lease Sale Coordinator, Bridgette Duplantis, at
• Whole and Partial Blocks withdrawn from leasing by Presidential Withdrawal in the September 8, 2020,
• Whole and Partial Blocks within the boundary of the Flower Garden Banks National Marine Sanctuary (East and West Flower Garden Banks and the Stetson Bank) as of the July 14, 2008,
• Whole and Partial Blocks that are adjacent to or beyond the U.S. Exclusive Economic Zone in the area known as the northern portion of the Eastern Gap:
• Depth-restricted, segregated block portion(s). The current block meeting this criterion is: Block 299, Main Pass Area, South and East Addition (as shown on Louisiana Leasing Map LA10A), containing 1,125 acres from the surface of the earth down to a subsea depth of 1,900 feet with respect to the following described portions: SW
• Whole and Partial Blocks that were previously subject to the Blocks South of Baldwin County, Alabama, Stipulation:
• Whole and Partial Blocks that were previously subject to the Topographic Features Stipulation:
• Whole blocks that contain banks that are adjacent to blocks previously included in the Topographic Features Stipulation:
• Whole and Partial Blocks that were previously subject to the Live Bottom (Pinnacle Trend) Stipulation:
• Whole and partial blocks identified as either Wind Energy Area Options (Areas A, B, C, D, E, F, G, H, J, K, L, and N) or final Wind Energy Areas (Areas I and M):
• Whole and Partial BOEM-designated Significant Sediment Resource Area Blocks:
• Whole and Partial Blocks between the 100 m and 400 m isobaths across the northern Gulf of Mexico on the OCS, eastward from the Mexican border with Texas and westward from the eastern edge of the Central Planning Area.
The final list of blocks available for bid is posted on BOEM's website at
The IRA directs BOEM to hold GOM Lease Sale 261 by September 30, 2023. Each lease is issued pursuant to OCSLA, 43 U.S.C. 1331
BOEM will use Form BOEM-2005 (February 2017) to convey leases resulting from this sale. This lease form can be viewed on BOEM's website at
Primary terms are summarized in the following table:
(1) The primary term for a lease in water depths less than 400 meters issued as a result of this sale is 5 years. If the lessee spuds a well targeting hydrocarbons below 25,000 feet TVDSS within the first 5 years of the lease, then the lessee may earn an additional 3 years, resulting in an 8-year primary term. The lessee will earn the 8-year primary term when the well is drilled to a target below 25,000 feet TVDSS; or the lessee may earn the 8-year primary term in cases where the well targets, but does not reach, a depth below 25,000 feet TVDSS due to mechanical or safety
(2) The primary term for a lease in water depths ranging from 400 to less than 800 meters issued as a result of this sale is 5 years. If the lessee spuds a well within the 5-year primary term of the lease, the lessee may earn an additional 3 years, resulting in an 8-year primary term. To earn the 8-year primary term, the lessee is required to submit a letter to the BOEM GOM Regional Supervisor, Office of Leasing and Plans, as soon as practicable, but no more than 30 days after spudding a well, providing the well number and spud date, and requesting confirmation from BOEM that the lessee earned the 8-year extended primary term. Within 30 days of receipt of the request, the BOEM GOM Regional Supervisor for Leasing and Plans will provide written confirmation of whether the lessee has earned the extended primary term and accordingly update BOEM's records. The extended primary term is not effective unless and until the lessee receives confirmation from BOEM.
(3) The primary term for a lease in water depths 800 meters or deeper issued as a result of this sale is 10 years.
BOEM will not accept a bonus bid unless it provides for a cash bonus in an amount equal to or exceeding the specified minimum bid, as described below.
• $25 per acre or fraction thereof for blocks in water depths less than 400 meters; and
• $100 per acre or fraction thereof for blocks in water depths 400 meters or deeper.
Annual rental rates, per acre or fraction thereof, are summarized in the following table:
Any lessee with a lease in less than 400 meters water depth who earns an 8-year primary term will pay an escalating rental rate as shown above. The rental rates after the fifth year for blocks in less than 400 meters water depth will become fixed and no longer escalate if another well is spudded targeting hydrocarbons below 25,000 feet TVDSS after the fifth year of the lease, and BOEM concurs that such a well has been spudded. In this case, the rental rate will become fixed at the rental rate in effect during the lease year in which the additional well was spudded.
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• $10 per acre or fraction thereof per year for blocks in water depths less than 200 meters; and
• $16 per acre or fraction thereof per year for blocks in water depths 200 meters or deeper.
The Department may issue leases with Royalty Suspension Volumes (RSVs) and other forms of royalty relief under 30 CFR part 560, which BOEM administers. The specific details relating to eligibility and implementation of RSVs and other royalty relief programs are found at 30 CFR part 203, which the Bureau of Safety and Environmental Enforcement administers. In this sale, the only royalty relief program being offered involves RSVs for the drilling of ultra-deep wells in water depths of less than 400 meters, as described in the following section.
Pursuant to 30 CFR part 203, certain leases issued as a result of this sale may be eligible for RSV incentives on gas produced from ultra-deep wells. Under this program, wells on leases in less than 400 meters water depth and completed to a drilling depth of 20,000 feet TVDSS or deeper receive an RSV of 35 billion cubic feet on the production of natural gas. This RSV incentive is subject to applicable price thresholds set forth in the regulations at 30 CFR part 203. These regulations implement the requirements of the Energy Policy Act of 2005 (Pub. L. 109-58, 119 Stat. 594 (2005)).
One or more of the stipulations below may be applied to leases issued as a result of this sale. The applicable blocks for each stipulation are identified on the map “Final Notice of Sale, Gulf of Mexico OCS Oil and Gas Lease Sale 261, September 2023, Stipulations and Deferred Blocks” included in the Final NOS package. The full text of the following stipulations is contained in the “Lease Stipulations” section of the Final NOS package. BOEM has posted the final list of blocks available for bid and the applicable stipulations that apply to those blocks on its website at
Information to Lessees (ITLs) provide detailed information on certain issues pertaining to specific oil and gas lease sales. The full text of the ITLs for this sale is contained in the “Information to Lessees” section of the Final NOS package and covers the following topics.
The maps pertaining to this lease sale can be viewed on BOEM's website at
The sale area is shown on the map entitled, “Final Notice of Sale, Gulf of Mexico OCS Oil and Gas Lease Sale 261, September 2023, Final Sale Area.”
The lease terms and economic conditions associated with leases of certain blocks are shown on the map entitled, “Final Notice of Sale, Gulf of Mexico Oil and Gas Lease Sale 261, September 2023, Lease Terms and Economic Conditions.”
The lease stipulations and the blocks to which they apply are shown on the map entitled, “Final Notice of Sale, Gulf of Mexico OCS Oil and Gas Lease Sale 261, September 2023, Stipulations and Deferred Blocks.”
Bids may be submitted BY MAIL ONLY through any parcel delivery service (
For each block bid upon, a separate sealed bid must be submitted in a sealed envelope (as described below) and include the following items:
• Total amount of the bid in whole dollars only;
• Sale number;
• Sale date;
• Each bidder's exact name;
• Each bidder's proportionate interest, stated as a percentage, using a maximum of five decimal places (
• Typed name and title, and signature of each bidder's authorized officer. Electronic signatures are acceptable. The typed name, title, and signature must agree exactly with the name and title on file in the BOEM Gulf of Mexico OCS Region Adjudication Section;
• Each bidder's BOEM qualification number;
• Map name and number or OPD name and number;
• Block number; and
• Statement acknowledging that the bidder(s) understands that this bid legally binds the bidder(s) to comply with all applicable regulations, including the requirement to post a deposit in the amount of one-fifth of the bonus bid amount for any tract bid upon and make payment of the balance of the bonus bid and first year's rental upon BOEM's acceptance of high bids.
The information required for each bid is specified in the document “Bid Form” that is available in the Final NOS package, which can be found at
Each bid must be submitted in a separate sealed envelope labeled as follows:
• “Sealed Bid for GOM Lease Sale 261, not to be opened until 9 a.m. Wednesday, September 27, 2023”;
• Map name and number or OPD name and number;
• Block number for block bid upon;
• Acreage, if the bid is for a block that is split between the Central and Eastern Planning Areas; and
• The exact name and qualification number of the submitting bidder only.
The Final NOS package includes a sample bid envelope for reference.
Please address the envelope containing the sealed bid envelope(s) as follows: Attention: Leasing and Financial Responsibility Section, BOEM New Orleans Office, 1201 Elmwood Park Boulevard MS-266A, New Orleans, Louisiana 70123-2394. Contains Sealed Bids for GOM Lease Sale 261. Please Deliver to Mr. Greg Purvis, 2nd Floor, Immediately.
Bidders that are not currently an OCS oil and gas lease record title holder or designated operator, or those that have ever defaulted on a one-fifth bonus bid deposit, must guarantee (secure) the payment of the one-fifth bonus bid deposit, by Electronic Funds Transfer (EFT) or otherwise, prior to bid submission using one of the following four methods:
• Provide a third-party guarantee;
• Amend a development stage area-wide bond via bond rider;
• Provide a letter of credit; or
• Provide a lump sum payment in advance via EFT.
Please provide, at the time of bid submittal, a confirmation or tracking number for the payment, the name of the company submitting the payment as it appears on the payment, and the date the payment was submitted so that BOEM can confirm payment with the Office of Natural Resources Revenue (ONRR). Bidders should submit payments to their financial institution at least 5 business days prior to bid submittal to ensure that the Office of Foreign Assets Control and the U.S. Department of the Treasury (U.S. Treasury) have time to screen and process payments and that payments are posted to ONRR prior to placing the bid. ONRR cannot confirm payment until the monies have been moved into settlement status by the U.S. Treasury. Bids will not be accepted if BOEM cannot confirm payment with ONRR before 10:00 a.m. on Tuesday, September 26, 2023.
If providing a third-party guarantee, amending a development stage area-wide bond via bond rider, or providing a letter of credit to secure your one-fifth bonus bid deposit, bidders are urged to file these documents with BOEM well in advance of submitting the bid. This allows processing time and ensures bidders have time to take any necessary curative actions prior to bid submission. For more information on EFT procedures, see Section X, “The Lease Sale.”
Prior to bidding, each bidder should file the Equal Opportunity Affirmative Action Representation Form BOEM-2032 (February 2020, available on BOEM's website at
The GDIS is composed of three parts:
(1) A “Statement” page that includes the company representatives' information and separate lists of blocks bid on that used proprietary data and those blocks bid upon that did not use proprietary data;
(2) A “Table” listing the required data about each proprietary survey used (see below); and
(3) “Maps” that contain the live trace maps for each proprietary survey that is identified in the GDIS statement and table.
Every bidder submitting a bid on a block in GOM Lease Sale 261 or participating as a joint bidder in such a bid must submit at the time of bid submission all three parts of the GDIS. A bidder must submit the GDIS
The bidder and joint bidder must submit the GDIS in a separate and sealed envelope and must identify all proprietary data; reprocessed speculative data, and/or any Controlled Source Electromagnetic surveys, Amplitude Versus Offset (AVO) data, gravity data, and/or magnetic data; or other information used as part of the decision to bid or participate in a bid on the block. The bidder and joint bidder must also include a live trace map (
The GDIS statement must include the name, phone number, and full address for a contact person and an alternate who are both knowledgeable about the geophysical information and data listed and who are available for 30 days after the sale date. The GDIS statement must also include a list of all blocks bid upon, including those blocks where no proprietary or reprocessed geophysical data and/or proprietary information was used, as a basis for the bidder's decision to bid or to participate as a joint bidder in the bid. All GDIS statements must be included
An example of the preferred format of the table is included in the Final NOS package, and a blank digital version of the preferred table can be accessed on the GOM Lease Sale 261 website at
• The sale number;
• The bidder company's name;
• The joint bidder's company's name (if applicable);
• The company that will provide the proprietary geophysical survey data to BOEM;
• The block area and block number bid upon;
• The owner of the original data set (e.g, TGS, PGS, WGC, CGG, etc.);
• The industry's original name of the survey (
• The BOEM permit number for the survey;
• Whether the data set is a fast-track version (intermediate product that is not final);
• Whether the data is speculative or proprietary;
• The data type (
• The migration algorithm (
• The live proprietary survey coverage (2-D miles 3-D blocks);
• The computer storage size, to the nearest gigabyte, of each seismic data and velocity volume used to evaluate the lease block;
• Who reprocessed the data;
• The date on which the final reprocessing was completed (month and year);
• If the data was previously sent to BOEM, list the sale number and date of the sale for which it was used;
• Whether proprietary or speculative AVO/AVA (PROP/SPEC) was used;
• The date on which AVO or AVA was sent to BOEM, if sent prior to the sale;
• Whether AVO/AVA is time or depth (PSTM or PSDM);
• Which angled stacks were used (
• Whether the company used Gathers to evaluate the block in question; and
• Whether the company used Vector Offset Output (VOO) or Vector Image Partitions (VIP) to evaluate the block in question.
BOEM will use the computer storage size information to estimate the reproduction costs for each data set, if
BOEM reserves the right to inquire about alternate data sets, to perform quality checks, and to compare the listed and alternative data sets to determine which data set most closely meets the needs of the fair market value determination process. See the “Example of Preferred Format” that is included in the Final NOS package.
The GDIS maps are live trace maps (
Pursuant to 30 CFR 551.12 and 556.501, as a condition of the sale, the BOEM GOM Regional Director requests that all bidders and joint bidders submit the proprietary data identified on their GDIS within 30 days after the lease sale (unless notified after the lease sale that BOEM has withdrawn the request). This request only pertains to proprietary data that is not commercially available. Commercially available data should not be submitted to BOEM unless specifically requested by BOEM. No reimbursement will be provided for unsolicited data sent to BOEM. The BOEM GOM RD will notify bidders and joint bidders of any withdrawal of the request, for all or some of the proprietary data identified on the GDIS, within 15 calendar days of the lease sale. Where the BOEM GOM RD has notified bidders and joint bidders that the request for such proprietary data has been withdrawn, reimbursement will not be provided. Pursuant to 30 CFR part 551 and 30 CFR 556.501, as a condition of this sale, all bidders that are required to submit data must ensure that the data are received by BOEM no later than the 30th day following the lease sale, or the next business day if the submission deadline falls on a weekend or Federal holiday. Please do not submit proprietary geophysical survey data in the GDIS envelope.
The proprietary geophysical survey data must be submitted to BOEM at the following address within 30 days of the sale as stated above: Bureau of Ocean Energy Management, Resource Studies, GM 881A, 1201 Elmwood Park Blvd., New Orleans, Louisiana 70123-2304.
The GDIS must be submitted along with your bid envelope to: Leasing and Financial Responsibility Section, BOEM New Orleans Office, 1201 Elmwood Park Boulevard, MS-266A, New Orleans, Louisiana 70123-2394. Contains Sealed Bids for GOM Lease Sale 261. Please Deliver to Mr. Greg Purvis 2nd Floor, Immediately.
BOEM recommends that bidders mark the GDIS submission's external envelope as “Deliver Immediately to DASPU.” BOEM also recommends that bidders submit the GDIS in an internal envelope, or otherwise marked, with the following designation: “Geophysical Data and Information Statement for Oil and Gas Lease Sale 261”, Company Name, GOM Company Qualification Number, and “Proprietary Data.”
In the event a person supplies any type of data to BOEM, that person must meet the following requirements to qualify for reimbursement:
(1) Must be registered with the System for Award Management (SAM), formerly known as the Central Contractor Registration (CCR). CCR usernames will not work in SAM. A new SAM user account is needed to register or update an entity's records. The website for registering is
(2) Must be enrolled in the U.S. Treasury's Invoice Processing Platform (IPP) for electronic invoicing; to enroll go to
(3) Must have a current On-line Representations and Certifications Application at
Bidders should refer to the “Acceptance, Rejection, or Return of Bids” heading under Section X, “The Lease Sale,” regarding a bidder's failure to comply with the requirements of the Final NOS, including any failure to submit information required in the Final NOS package.
BOEM requests that bidders provide this information in the suggested format prior to or at the time of bid submission. The suggested format is included in the Final NOS package. The form must not be enclosed inside the sealed bid envelope.
BOEM may require bidders to submit other documents in accordance with 30 CFR 556.107, 556.401, 556.501, and 556.513.
On May 4, 2023, BOEM published the most recent List of Restricted Joint Bidders in the
All signatories executing documents on behalf of the bidder(s) must execute the same in conformance with the BOEM qualification records. Bidders are advised that BOEM considers the signed bid to be a legally binding obligation on the part of the bidder(s) to comply with all applicable regulations, including that requiring payment of one-fifth of the bonus bid on all high bids. A statement to this effect is included on each bid form (see the document “Bid Form” that is included in the Final NOS package).
BOEM warns bidders against violation of 18 U.S.C. 1860, which prohibits unlawful combination or intimidation of bidders.
Bids may be withdrawn only by written request delivered to BOEM prior to the bid submission deadline via any parcel delivery service. Withdrawals will not be accepted in person or via email. The withdrawal request must be on company letterhead and must contain the bidder's name, its BOEM qualification number, the map name/number, and the block number(s) of the bid(s) to be withdrawn. The withdrawal request must be executed by one or more of the representatives named in
Minimum bonus bid calculations, including rounding, for all blocks are shown in the document “List of Blocks Available for Leasing” that is included in the Final NOS package. The bonus bid amount must be stated in whole dollars. If the acreage of a block contains a decimal figure, then prior to calculating the minimum bonus bid, BOEM will round up to the next whole acre. The appropriate minimum rate per acre will be applied to the whole (rounded up) acreage. The bonus bid amount must be greater than or equal to the minimum bonus bid, as calculated and stated in the Final NOS package.
The Final NOS package includes instructions, samples, and/or the preferred format for the items listed below. BOEM strongly encourages bidders to use the recommended formats. If bidders use another format, they are responsible for including all the information specified for each item in the Final NOS package.
Sealed bids received in response to the Final NOS will be opened at the place, date, and hour specified under the
Each bidder submitting an apparent high bid must submit a bonus bid deposit to ONRR equal to one-fifth of the bonus bid amount for each such bid. A copy of the notification of the high bidder's one-fifth bonus bid amount can be obtained on the BOEM website at
Bidders must submit payment to their financial institution as soon as possible on the day of bid reading and no later than 7:00 p.m. Eastern Time on the day of bid reading. This will help ensure that deposits have time to process through the U.S. Treasury and post to ONRR. ONRR cannot confirm payment until the monies have been moved into settlement status by the U.S. Treasury.
BOEM requires bidders to use EFT procedures for payment of one-fifth bonus bid deposits for GOM Lease Sale 261, following the detailed instructions contained on the ONRR Payment Information web page at
The United States reserves the right to withdraw any block from this lease sale prior to issuance of a written acceptance of a bid for the block.
The United States reserves the right to reject any and all bids, regardless of the amount offered. Furthermore, no bid will be accepted, and no lease for any block will be awarded to any bidder, unless:
(1) The bidder has complied with all applicable regulations and requirements of the Final NOS, including those set forth in the documents contained in the Final NOS package;
(2) The bid is the highest valid bid; and
(3) The amount of the bid has been determined to be adequate by the authorized officer.
Any bid submitted that does not conform to the requirements of the Final NOS, OCSLA, or other applicable statutes or regulations will be rejected and returned to the bidder. The U.S. Department of Justice and the Federal Trade Commission will review the results of the lease sale for any antitrust issues prior to the acceptance of bids and issuance of leases.
To ensure that the U.S. Government receives fair market value for the conveyance of leases from this sale, BOEM will evaluate high bids in accordance with the bid adequacy procedures that are effective on the date of the sale. The bid adequacy procedures are available on BOEM's website at
Leases issued as a result of GOM Lease Sale 261 are expressly limited to oil and gas exploration and development. As noted in Section 19 of the lease form, all rights in the leased area not expressly granted to the Lessee by the Act, the regulations, or this lease are hereby reserved to the Lessor.
BOEM requires each bidder that is awarded a lease to complete the following:
(1) Execute all copies of the lease (Form BOEM-2005 [February 2017], as amended);
(2) Pay by EFT the balance of the bonus bid amount and the first year's rental for each lease issued in accordance with the requirements of 30 CFR 1218.155 and 556.520(a); and
(3) Satisfy the bonding requirements of 30 CFR part 556, subpart I, as amended. ONRR requests that bidders use only one transaction for payment of the balance of the bonus bid amount and the first year's rental. Once ONRR receives such payment, the bidder awarded the lease may not request a refund of the balance of the bonus bid amount or first year's rental payment.
The BOEM GOM RD has the discretion to change any date, time, and/or location specified in the Final NOS package if the RD deems that an emergent event could interfere with a fair and orderly lease sale. Such events could include, but are not limited to, natural disasters (
Bureau of Ocean Energy Management (BOEM), Interior.
Notice of availability of a record of decision.
BOEM announces the availability of the Record of Decision (ROD) for Gulf of Mexico (GOM) Outer Continental Shelf (OCS) Oil and Gas Lease Sale 261 (GOM Lease Sale 261). This ROD identifies the selected alternative for GOM Lease Sale 261, which is analyzed in the
The ROD and associated information are available on BOEM's website at
Helen Rucker, Supervisor, Environmental Assessment Section Unit 1, Office of Environment, BOEM New Orleans Office, by telephone at 504-736-2421, or by email at
BOEM must hold GOM Lease Sale 261 on or before September 30, 2023, pursuant to section 50264(e) of the Inflation Reduction Act of 2022 (IRA, Pub. L. 117-169), which was signed into law on August 16, 2022. However, the IRA does not affect BOEM's discretion regarding other aspects of its normal leasing process, including decisions regarding the scope of the lease sale and the terms of the resulting leases. GOM Lease Sale 261 will provide qualified bidders the opportunity to bid on unleased blocks in the Gulf of Mexico OCS in order to explore for, develop, and produce oil and natural gas. BOEM evaluated five alternatives in the GOM Lease Sales 259 and 261 Supplemental EIS, which BOEM completed as part of its normal leasing process to inform the decision-maker on possible lease sale impacts, mitigations, and other action alternatives.
The ROD for Lease Sale 261 is the second ROD that relies on the analysis in the GOM Lease Sales 259 and 261 Supplemental EIS. BOEM reviewed new and relevant information since the GOM Lease Sales 259 and 261 Supplemental EIS was issued and verified that the GOM Lease Sales 259 and 261 Supplemental EIS adequately addresses the potential environmental effects of the proposed lease sale. There are no new circumstances, information, or changes in the proposed lease sale or its potential impacts that require supplementation of the GOM Lease Sales 259 and 261 Supplemental EIS.
After careful consideration, the U.S. Department of the Interior (Interior) decided to offer for lease a subset of the OCS blocks analyzed as Alternative D in the GOM Lease Sales 259 and 261 Supplemental EIS.
Therefore, BOEM will hold GOM Lease Sale 261 as a GOM regionwide lease sale encompassing all three planning areas,
The excluded blocks are identified by their block number in the Final Notice of Sale for GOM Lease Sale 261. The lease sale area encompasses approximately 12,395 OCS blocks covering approximately 67.3 million acres. The unleased OCS blocks that BOEM will offer for lease are listed in the document entitled “Lease Sale Area,” which is included in the Final Notice of Sale package for GOM Lease Sale 261 available on BOEM's website. See
As part of the decision to hold GOM Lease Sale 261, BOEM adopted all practicable means to avoid or minimize environmental harm at the lease sale stage. In addition, any subsequent post-lease activities (
The decision to hold GOM Lease Sale 261 meets the purpose of and need for the proposed action, as identified in the GOM Lease Sales 259 and 261 Supplemental EIS, and provides for orderly resource development with protection of human, marine, and coastal environments while also ensuring that the public receives a fair market value for these resources and that free-market competition is maintained.
On August 21, 2023, the Department of Justice lodged a proposed consent decree with the United States District Court for the District of New Jersey in the lawsuit entitled
The publication of this notice opens a period for public comment on the proposed consent decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, Environmental Enforcement Section, and should refer to
During the public comment period, the consent decree may be examined and downloaded at this Justice Department website:
Please enclose a check or money order for $4.25 (25 cents per page reproduction cost), for the consent decree with appendix payable to the United States Treasury.
Coordinating Council on Juvenile Justice and Delinquency Prevention.
Notice of meeting.
The Coordinating Council on Juvenile Justice and Delinquency Prevention announces its next meeting.
Tuesday September 19, 2023 at 9:00 a.m.-2:30 p.m. CT.
The meeting will take place at the DoubleTree Hotel & Suites Houston Galleria located at 5353 Westheimer Road, Houston, TX 77056.
Visit the website for the Coordinating Council at
The Coordinating Council on Juvenile Justice and Delinquency Prevention (“Council”), established by statute in the Juvenile and Delinquency Prevention Act of 1974 section 206(a) (34 U.S.C. 11116(a)), will meet to carry out its advisory functions. Information regarding this meeting will be available on the Council's web page at
Although designated agency representatives may attend in lieu of members, the Council's formal membership consists of the following secretaries and/or agency officials; Attorney General (Chair), Administrator of the Office of Juvenile Justice and Delinquency Prevention (Vice Chair), Secretary of Health and Human Services, Assistant Secretary for Mental Health and Substance Use, Secretary of the Interior, Secretary of Labor, Secretary of Education, Secretary of Housing and Urban Development,
Council meeting agendas are available on
Members of the public who wish to virtually attend, must register in advance of the meeting at the meeting registration site, by no later than Tuesday September 12th, 2023. Should issues arise with online registration, or to register by email, the public should contact Maegen Barnes, Senior Program Manager/Federal Contractor (see above for contact information). If submitting registrations by email, attendees should include all of the following: Name, Title, Organization/Affiliation, Full Address, Phone Number, and Email. Registration for this is also found online at
Interested parties may submit written comments and questions in advance to Maegen Barnes, Senior Program Manager/Federal Contractor (contact information above). All comments and questions should be submitted no later than 5:00 p.m. EST on Tuesday September 12th, 2023.
The Council will limit public statements if they are found to be duplicative. Written questions submitted by public attendees may also be considered by the Council, time permitting.
Employee Benefits Security Administration (EBSA), Department of Labor.
Notice.
The Department of Labor (the Department), in accordance with the Paperwork Reduction Act, provides the general public and Federal agencies with an opportunity to comment on proposed and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. The Employee Benefits Security Administration (EBSA) is soliciting comments on the proposed extension of the information collection requests (ICRs) contained in the documents described below. A copy of the ICRs may be obtained by contacting the office listed in the
Written comments must be submitted to the office shown in the
James Butikofer, Department of Labor, Employee Benefits Security Administration, 200 Constitution Avenue NW, Room N-5718, Washington, DC 20210, or
This notice requests public comment on the Department's request for extension of the Office of Management and Budget's (OMB) approval of ICRs contained in the rules and prohibited transaction exemptions described below. The Department is not proposing any changes to the existing ICRs at this time. An agency may not conduct or sponsor, and a person is not required to respond to, an information collection unless it displays a valid OMB control number. A summary of the ICRs and the burden estimates follows:
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0048. The current approval is scheduled to expire on January 31, 2024.
The Department requires minimal information collection pertaining to the affected transactions and two basic disclosure requirements. Both disclosure requirements affect only the portion of the exemption dealing with repurchase agreements. The first requirement calls for the repurchase agreements between the seller and the plan to be in writing. The second requirement obliges the seller of such repurchase agreements to furnish the plan with the most recent available audited statement of its financial condition as well as its most recent available unaudited statement at the time of the sale and as the statements are issued. The seller must also represent, either in the repurchase agreement or prior to each repurchase agreement transaction, that as of the time the transaction is negotiated, there has been no material adverse change in the seller's financial condition since the date the last financial statement was furnished that has not been disclosed to the plan fiduciary with whom the written agreement is made.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0061. The current approval is scheduled to expire on January 31, 2024.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0098. The current approval is scheduled to expire on January 31, 2024.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0111. The current approval is scheduled to expire on January 31, 2024.
To qualify for the exemption, investment advice fiduciaries are required to comply with the following information collection requirements: (1) make disclosures to inform retirement investors of their fiduciary status, services offered, and material conflicts of interest; (2) establish, maintain, and enforce written policies and procedures designed to ensure that they and their investment professionals comply with the Impartial Conduct Standards; (3) document the specific reasons for any rollover recommendation and show that the rollover is in the best interest of the retirement investor and provide the documentation to the retirement investor; (4) conduct an annual retrospective review that is reasonably designed to prevent violations of the PTE's Impartial Conduct Standards and the institution's own policies and procedures and provide a written report that is certified by a senior executive officer; and (5) maintain records so that parties relying on an exemption can demonstrate, and the Department can verify, compliance with the conditions of the exemption. Investment advice fiduciaries may choose to self-correct certain violations if, among other things, the financial institution notifies the Department of Labor and the person(s) responsible for conducting the retrospective review.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0163. The current approval is scheduled to expire on February 29, 2024.
On April 27, 1995, the Department implemented the Delinquent Filer Voluntary Compliance Program (the DFVC Program) in an effort to encourage annual reporting compliance. Under the DFVC Program, administrators otherwise subject to the assessment of higher civil penalties are permitted to pay reduced civil penalties for voluntarily complying with the annual reporting requirements under Title I of ERISA.
The only information collection requirement included in the DFVC Program is the requirement of providing data necessary to identify the plan along with the penalty payment. This data is the only means by which each penalty payment is associated with the relevant plan. With respect to most pension plans and welfare plans, the requirement is satisfied by sending, along with the penalty payment, a copy of the delinquent annual report (without attachments or schedules) which is filed with the Department at a different address under the EFAST system. In the event that the plan administrator files the delinquent annual report using a 1998 or prior plan year form, a paper copy of only the first page of the Form 5500 or Form 5500-C, as applicable, should be submitted along with the penalty payment.
Certain pension plans for highly compensated employees, commonly called “top hat” plans, and apprenticeship plans may file a one-time statement in lieu of annual reports. With respect to such plans, information collection requirements of the DFVC Program are satisfied by sending a completed first page of an annual report form along with the penalty payment. The one-time statements are required to be sent to a different address within the Department. The DFVC Program is designed to allow the processing of all penalty payments at a single location within the Department.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0089. The current approval is scheduled to expire on March 31, 2024.
The collection of information is an intake form for assistance requests from the public. This information includes the plan type, broad categories of problem type, contact information for responsible parties, and a mechanism for the inquirer to attach relevant documents. Summary data from the existing intake form has also been used, in accordance with section 513 of ERISA, to respond to requests for information regarding employee benefit plans from members of Congress and governmental oversight entities, and to inform the policy formulation process.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0146. The current approval is scheduled to expire on March 31, 2024.
This information collection requirement generally requires timely written disclosure to employees eligible to participate in non-model SEPs, including specific information concerning: participation requirements; allocation formulas for employer contributions; designated contact persons for further information; and, for employer recommended IRAs, specific terms of the IRAs such as rates of return and any restrictions on withdrawals. Moreover, general information is required that provides a clear explanation of: the operation of the non-model SEP; participation requirements and any withdrawal restrictions; and the tax treatment of the SEP-related IRA. Furthermore, statements must be provided that inform participants of: any other IRAs under the non-model SEP other than that to which employer contributions are made; any options regarding rollovers and contributions to other IRAs; descriptions of IRS disclosure requirements to participants and information regarding social security integration (if applicable); and timely notification of any amendments to the terms of the non-model SEP.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0034. The current approval is scheduled to expire on April 30, 2024.
In order to make such a determination, the Department requires full disclosure of information regarding all aspects of the proposed transaction, and the parties and the assets involved. Sections 2570.34 and 2570.35 of the exemption procedure regulation describe the information that must be supplied by the applicant, such as: identifying information (name, type of plan, EIN number, etc.); an estimate of the number of plan participants; a detailed description of the exemption transaction and the parties for which an exemption is requested; a statement regarding which section of ERISA is thought to be violated and whether transaction(s) involved have already been entered into; a statement of whether the transaction is customary in the industry; a statement of the hardship or economic loss, if any, which would result if the exemption were denied; a statement explaining why the proposed exemption would be administratively feasible, in the interests of the plan and protective of the rights of plan participants and beneficiaries; and several other statements. In addition, the applicant must certify that the information supplied is accurate and complete.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0060. The current approval is scheduled to expire on April 30, 2024.
The information collections that are conditions of the regulation include, third-party disclosures, recordkeeping, and audit requirements. With one exception, the regulation does not require any reporting or filing with the Federal government, but the designated records must be made available upon request. The exception is the requirement that the fiduciary adviser is required under certain circumstances to forward the audit report which is also a required disclosure under the regulation to the Department.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0134. The
Pursuant to the regulation, the Department requests documents under section 104(a)(6) when a participant or beneficiary has previously requested the documents directly from the plan administrator and the administrator has failed or refused to provide them. The Department therefore uses the requested information to respond to participants' requests to the Department for documents that the participants were unable to obtain from their plan administrators.
The Department has received approval from OMB for this ICR under OMB Control No. 1210-0112. The current approval is scheduled to expire on June 30, 2024.
The Department is particularly interested in comments that:
• Evaluate whether the collections of information are necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the collections of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments submitted in response to this notice will be summarized and/or included in the ICR for OMB approval of the information collection; they will also become a matter of public record.
Office of Information and Regulatory Affairs, Office of Management and Budget, Executive Office of the President.
Notice of solicitation of comments.
The Office of Management and Budget (OMB) issues a request for public comments on a proposal to modify one provision within
To ensure consideration of comments on this notice, they must be received no later than October 24, 2023. Because of delays in the receipt of regular mail related to security screening, respondents are encouraged to send comments electronically (see
Submit comments through
For information about this request for comments, contact Kerrie Leslie, Office of Management and Budget, New Executive Office Building, Washington, DC 20503, telephone (202) 395-1093,
The procedures in Directive No. 3, published in 1985, were designed to ensure equitable, policy-neutral, and timely release and dissemination of Principal Federal Economic Indicators (“PFEIs”). The goals of Directive No. 3 remain sound, and this Notice does not seek to change them. Specifically, in furtherance of these goals, we are proposing to retain the requirement that some period of time needs to elapse between the policy-neutral release of the data and the public interpretation of such data by policy officials in the Executive Branch. More background and history on the policies of Directive No. 3 can be found in the April 2019
In addition, society generally communicates and interacts differently now than in 1985. In particular, various platforms exist now that allow society to interact seconds after a new data release comes out. This means that for these PFEI data releases, non-governmental actors are engaging in dialogue almost immediately following the official release time and can be offering perspectives on the meaning of the data. Under the current Directive No. 3, this dialogue is missing any Executive Branch interpretation until at least one hour after the data's official release time. Under this proposal to reduce the delay to thirty minutes, Executive Branch officials could enter the dialogue thirty minutes earlier. OMB is considering the proposed change because we believe it is likely to lead to a more robust discussion without compromising the underlying principles of Directive No. 3, including the benefits of having some time delay.
OMB is not considering any other alternatives in this proposal; this means that OMB is neither considering removing the delay entirely, nor is it considering any other changes to any other policies in Directive No. 3. OMB proposes changing the italicized text in the excerpt from Directive No. 3 below, which is part of the last paragraph of Section 5 of Directive No. 3
5. Release Procedure. * * * Except for the authorized distribution described in this section, agencies shall ensure that no information or data estimates are released before the official release time.
The agency will provide prerelease information to the President, through the Chairman of the Council of Economic Advisers, as soon as it is available. The agency may grant others prerelease access only under the following conditions:
(a) The agency head must establish whatever security arrangements are necessary and impose whatever conditions on the granting of access are necessary to ensure that there is no unauthorized dissemination or use.
(b) The agency head shall ensure that any person granted access has been fully informed of and agreed to these conditions.
(c) Any prerelease of information under an embargo shall not precede the official release time by more than 30 minutes.
(d) In all cases, prerelease access shall precede the official release time only to the extent necessary for an orderly review of the data.
All employees of the Executive Branch who receive prerelease distribution of information and data estimates as authorized above are responsible for assuring that there is no release prior to the official release time. Except for members of the staff of the agency issuing the principal economic indicator who have been designated by the agency head to provide technical explanations of the data, employees of the Executive Branch shall not comment publicly on the data until
Under OMB's proposal, the italicized text would be changed to “
Any changes to the text from Section 5 would neither affect nor replace any of the other standards and guidelines articulated in Directive No. 3.
Comments are due by September 25, 2023.
Written comments and recommendations for this information collection should be sent within 30 days of publication of this notice to
Requests for additional information or copies of the information collection instrument(s) and instructions should be directed to Bill Edwards-Bodmer, NASA Clearance Officer, NASA Headquarters, 300 E Street SW, JF0000, Washington, DC 20546, 757-864-7998, or
This information collection enabled NASA to pre-test methods to collect information from individuals to determine community response to the new, quieter sonic booms, prior to the start of flight testing the X-plane. No public exposure to any form of sonic boom occurred during the pre-testing phase.
The pre-test was conducted by telephone interview. NASA wanted to evaluate telephone surveys to assess prompt public response associated with experiencing low amplitude sonic booms over multiple, geographically dispersed communities. Responses were voluntary.
The new X-plane is designed to produce low amplitude sonic booms. Ultimately, flight testing of the X-plane is intended to (1) demonstrate and validate the technology necessary for civil supersonic flights that create low amplitude sonic booms, and (2) assess community response to the new, quieter, sonic booms.
Telephone.
Comments submitted in response to this notice will be summarized and included in the request for OMB approval of this information collection. They will also become a matter of public record.
National Endowment for the Arts.
Notice of proposed collection; comment request.
The National Endowment for the Arts (NEA), as part of its continuing effort to reduce paperwork and respondent burden, conducts a preclearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995. This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. Currently, the NEA is soliciting comments concerning the proposed information collection for Generic Clearance for the Collection of Qualitative Feedback on Agency Service Delivery. A copy of the current information collection request can be obtained by contacting the office listed below in the address section of this notice.
Written comments must be submitted to the office listed in the address section below within 60 days from the date of this publication in the
Email comments to Sunil Iyengar, National Endowment for the Arts, at
The solicitation of feedback will target areas such as: timeliness, appropriateness, accuracy of information, courtesy, efficiency of service delivery, and resolution of issues with service delivery. Responses will be assessed to plan and inform efforts to improve or maintain the quality of service offered to the public. If this information is not collected, vital feedback from customers and stakeholders on the Agency's services will be unavailable.
The Agency will only submit a collection for approval under this generic clearance if it meets the following conditions:
• The collections are voluntary;
• The collections are low-burden for respondents (based on considerations of total burden hours, total number of respondents, or burden-hours per respondent) and are low-cost for both the respondents and the Federal Government;
• The collections are non-controversial and do not raise issues of concern to other Federal agencies;
• Any collection is targeted to the solicitation of opinions from respondents who have experience with the program or may have experience with the program in the near future;
• Personally identifiable information (PII) is collected only to the extent necessary and is not retained;
• Information gathered is used only internally for general service improvement and program management purposes and is not intended for release outside of the agency;
• Information gathered is not used for the purpose of substantially informing influential policy decisions; and
• Information gathered yields qualitative information; the collections are not designed or expected to yield statistically reliable results or used as though the results are generalizable to the population of study.
Feedback collected under this generic clearance provides useful information, but it does not yield data that can be generalized to the overall population. This type of generic clearance for qualitative information will not be used for quantitative information collections that are designed to yield reliably actionable results, such as monitoring trends over time or documenting program performance. Such data uses require more rigorous designs that address: the target population to which generalizations will be made, the sampling frame, the sample design (including stratification and clustering), the precision requirements or power calculations that justify the proposed sample size, the expected response rate, methods for assessing potential non-response bias, the protocols for data collection, and any testing procedures that were or will be undertaken prior to fielding the study. Depending on the degree of influence the results are likely to have, such collections may still be eligible for submission for other generic mechanisms that are designed to yield quantitative results.
As a general matter, information collections will not result in any new system of records containing privacy information and will not ask questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private.
National Science Foundation.
Notice of permit modification request.
The National Science Foundation (NSF) is required to publish a notice of requests to modify permits issued to conduct activities regulated under the Antarctic Conservation Act of 1978. This is the required notice of a requested permit modification.
Interested parties are invited to submit written data, comments, or views with respect to this permit application by September 25, 2023. Permit applications may be inspected by interested parties at the Permit Office, address below.
Comments should be addressed to Permit Office, Office of Polar Programs, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, Virginia 22314.
Andrew Titmus, ACA Permit Officer, Office of Polar Programs, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, VA 22314; 703-292-4479; or
The National Science Foundation, as directed by the Antarctic Conservation Act of 1978 (Pub. L. 95-541), as amended by the Antarctic Science, Tourism and Conservation Act of 1996, has developed regulations for the establishment of a permit system for various activities in Antarctica and designation of certain animals and certain geographic areas as requiring special protection. The regulations establish such a permit system to designate Antarctic Specially Protected Areas.
Now the applicant proposes a modification to the permit to increase the number of helicopters to four helicopters, two on each ship, and to allow those helicopters to make landings for sightseeing purposes. The name of the permit holder is also proposed to be changed to Jason Flesher, Scenic USA.
In accordance with the Federal Advisory Committee Act (Pub. L. 92-463, as amended), the National Science Foundation (NSF) announces the following meeting:
September 20, 2023; 8:30 a.m.-7:45 p.m.
September 21, 2023; 8:00 a.m.-2:00 p.m.
Agronomy Seed Farm, 15449 37th St. SE, Casselton, ND 58102.
Nuclear Regulatory Commission.
Environmental assessment and finding of no significant impact; issuance.
The U.S. Nuclear Regulatory Commission (NRC) is publishing this notice regarding the issuance of a final environmental assessment (EA) and a finding of no significant impact (FONSI) for its review and approval of the updated decommissioning funding plans (DFPs) submitted by independent spent fuel storage installation (ISFSI) licensees for the ISFSIs listed in the “Discussion” section of this document.
The EA and FONSI referenced in this document are available on August 25, 2023.
Please refer to Docket ID NRC-2023-0135 when contacting the NRC about the availability of information regarding this document. You may obtain publicly available information related to this document using any of the following methods:
•
•
•
Tilda Liu, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 404-997-4730, email:
The NRC is considering the approval of the updated DFPs submitted by ISFSI licensees. The NRC staff has prepared a final EA and FONSI determination for each of the updated ISFSI DFPs in accordance with the NRC regulations in part 51 of title 10 of the
The NRC requires its licensees to plan for the eventual decommissioning of their licensed facilities prior to license termination. On June 17, 2011, the NRC published a final rule in the
The table in this notice includes the plant name, docket number, licensee, and ADAMS accession number for the final EA and FONSI determination for each of the individual ISFSIs. The table also includes the ADAMS accession numbers for other relevant documents, including the updated DFP submittals. For further details with respect to these actions, see the NRC staff's final EA and FONSI determinations which are available for public inspection in ADAMS and at
For the Nuclear Regulatory Commission.
Office of Personnel Management.
Notice.
According to the provisions of section 10 of the Federal Advisory Committee Act, notice is hereby given that a virtual meeting of the Federal Prevailing Rate Advisory Committee will be held on Thursday, September 21, 2023. There will be no in-person gathering for this meeting.
The virtual meeting will be held on September 21, 2023, beginning at 10:00 a.m. (ET).
The meeting will convene virtually.
Ana Paunoiu, 202-606-2858, or email
The Federal Prevailing Rate Advisory Committee is composed of a Chair, five representatives from labor unions holding exclusive bargaining rights for Federal prevailing rate employees, and five representatives from Federal agencies. Entitlement to membership on the Committee is provided for in 5 U.S.C. 5347.
The Committee's primary responsibility is to review the Prevailing Rate System and other matters pertinent to establishing prevailing rates under subchapter IV, chapter 53, 5 U.S.C., as amended, and from time to time advise the Office of Personnel Management.
Annually, the Chair compiles a report of pay issues discussed and concluded recommendations. These reports are available to the public. Reports for calendar years 2008 to 2020 are posted at
The public is invited to submit material in writing to the Chair on Federal Wage System pay matters felt to be deserving of the Committee's attention. Additional information on these meetings may be obtained by contacting the Committee at Office of Personnel Management, Federal Prevailing Rate Advisory Committee, Room 7H31, 1900 E Street NW, Washington, DC 20415, (202) 606-2858.
This meeting is open to the public, with an audio option for listening. This notice sets forth the agenda for the meeting and the participation guidelines.
• The definition of Monroe County, PA.
• The definition of San Joaquin County, CA.
• The definition of the Salinas-Monterey, CA, wage area.
• The definition of the Puerto Rico wage area.
The following information must be provided when registering:
• Name.
• Agency and duty station.
• Email address.
• Your topic of interest.
Members of the press, in addition to registering for this event, must also RSVP to
A confirmation email will be sent upon receipt of the registration. Audio teleconference information for participation will be sent to registrants the morning of the virtual meeting.
Office of Personnel Management.
Postal Regulatory Commission.
Notice.
The Commission is noticing a recent Postal Service filing for the Commission's consideration concerning a negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the Market Dominant or the Competitive product list, or the modification of an existing product currently appearing on the Market Dominant or the Competitive product list.
Section II identifies the docket number(s) associated with each Postal
The public portions of the Postal Service's request(s) can be accessed via the Commission's website (
The Commission invites comments on whether the Postal Service's request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern Market Dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3030, and 39 CFR part 3040, subpart B. For request(s) that the Postal Service states concern Competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3035, and 39 CFR part 3040, subpart B. Comment deadline(s) for each request appear in section II.
1.
This Notice will be published in the
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange proposes to set fees for the purchase of field-programmable gate array (“FPGA”) technology as an optional delivery mechanism for PSX TotalView.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The purpose of the proposed rule change is to establish a fee schedule for the purchase of field-programmable gate array (“FPGA”) technology as an optional delivery mechanism for PSX TotalView (“PSX FPGA Service”).
FPGA is a hardware-based delivery mechanism that utilizes an integrated circuit that is programmed to reduce “jitter”—a technical term of art referring to the deviation in amplitude, phase timing or width of a signal pulse in a digital signal—that will allow data to be processed in a more predictable, or “deterministic,” fashion. Reducing jitter can be useful for certain customers due to the variability in the timing of market data packets transmitted by an exchange over the course of the trading day. Orders, and therefore market data packets, typically accumulate in larger numbers at the beginning and end of the trading day, as well as during the peaks of activity that occur at random intervals during the day. These bursts of activity may alter the time interval between the delivery of data packets because software processes information at variable rates depending on load to the system. Processing times may increase at higher loads, and decrease during periods of lesser activity. FPGA technology processes data packets at a constant time interval, without regard to the number of packets processed. Higher levels of determinism mean less variable queuing, which improves the predictability of data transfer,
The benefits of determinism depend on the use case of the customer, as well as the customer's specific system architecture.
Higher determinism does not necessarily mean lower latency. The concepts of determinism and latency are related, but distinct. Determinism refers to predictability in the rate of data transmission; latency refers to the time required to process data or transport it from one location to another. Low latency is not necessarily deterministic, and higher determinism does not necessarily mean low latency. As such, use of FPGA technology will increase determinism, but does not guarantee lower latency at all times.
Among customers that seek a higher degree of determinism, the benefits of FPGA technology vary, as FPGA technology is one possible solution, among a catalog of possible solutions, for increasing the consistency and predictability of message throughput over the course of the trading day. Some customers are able to adequately control jitter without using FPGA technology; other customers address jitter using specialized software, coding or other design solutions in conjunction with FPGA; still others use FPGA alone. The specific choice depends on a complex analysis of the customer's information technology systems in the context of their particular use cases.
FPGA is a broadly-available, commonly-used type of programmable circuit that can be modified to suit different use cases. It is used in a wide spectrum of industries, including the consumer electronics, automotive, and aerospace, as well as in a variety of industrial applications. It is not unique to the financial services industry,
FPGA technology has been offered by the Nasdaq Stock Exchange for over a decade, and the Nasdaq Options Market for nearly as long,
The Exchange proposes to offer the PSX FPGA Service in conjunction with the Exchange's depth of book feed, PSX TotalView. PSX TotalView is a real-time market data product that provides full order depth using a series of order messages to track the life of customer orders in the PSX market, as well as trade data for PSX executions and administrative messages such as Trading Action messages, Symbol Directory, and Event Control messages.
Customers that choose to purchase PSX TotalView without the PSX FPGA Service will receive the same data as customers that elect to purchase PSX TotalView with the PSX FPGA Service.
Phlx proposes internal distribution fees of $3,500 per month and external distribution fees of $350 for the PSX FPGA Service; customers that elect to use the PSX FPGA Service for both internal and external distribution will pay both fees.
The proposed fees for the PSX FPGA Service are substantially lower than fees for the Nasdaq FPGA Service, which are set at $25,000 per Distributor for internal only distribution, $2,500 for external only, and $27,500 for internal and external distribution.
Although there is considerable variation in the number of messages at various peaks, as well as the duration of peak activity, the proposed fees are roughly comparable to the differences in average peak activity for Phlx equity products relative to the Nasdaq exchange. Exchange staff have also discussed the proposed fees with customers, and believe, based on those discussions and their own business judgment, that the proposed fees fairly reflect the value of the PSX FPGA Service. A number of customers provisionally agree with this assessment, and have indicated that they are interested in testing it.
No other exchange currently offers FPGA technology as a separate service in conjunction with the delivery of a proprietary data feed, and therefore there are no other fees for comparison.
If Phlx is incorrect in its determination that the proposed fees reflect the underlying value of the PSX FPGA Service, customers will not purchase the product. The PSX FPGA Service is not necessary for a customer to ingest and process depth of book information, and those customers that seek a higher degree of determinism have a number of options at their disposal to reduce jitter without using the PSX FPGA Service.
The Exchange believes that its proposal is consistent with section 6(b) of the Act,
The Proposal is reasonable and unlikely to burden the market because the purchase of the PSX FPGA Service is optional for all categories of customers. No customer and no category of customers (such as, for example,
The Nasdaq exchange has over ten years of experience in selling the Nasdaq FPGA Service. That experience has shown that the vast majority of Nasdaq depth customers do not find value in the Nasdaq FPGA Service. The Exchange expects customers that do not find value in the Nasdaq FPGA Service to make a similar decision with respect to the PSX FPGA Service, and continue to ingest PSX TotalView as they do now.
For those customers that may seek to increase determinism, the purchase of FPGA technology from the PSX exchange will be only one of several options available. FPGA technology is not unique to the Exchange or even the financial services industry. Third-party data vendors offer FPGA technology services. Customers may also install their own FPGA hardware for internal use. All of these are viable options; the benefits of any particular option will depend on the particular customer's systems and use cases.
Customers may also choose not to address jitter using FPGA technology at all. As noted above, FPGA technology processes the data at a consistently predictable rate relative to software. This predictability in the rate of processing may not be advantageous or optimal for all systems receiving the exchange data feed.
The design of data processing architecture is complex. The ingestion of data from an exchange is just one step in the life-cycle of trading. Customers must also generate and submit orders, evaluate trades, and then generate new orders while interacting with multiple exchanges. All of these steps are part of a single trading system. Changing any one step in the process—by, for example, purchasing the PSX FPGA Service when other exchanges may not offer FPGA—often results in the need for changes to other aspects of the process. As such, the decision to buy the PSX FPGA Service will be based on whether the service is compatible with the customer's trading system as a whole, not just on whether it may facilitate the processing of data from a single exchange. The appropriateness of any particular solution will depend on the customer's system architecture, and the specific use cases for the market data consumed.
To illustrate the choice faced by exchange customers, consider the decisions made by the two consolidated data processors, the UTP and CTA Plans, two different systems that use dissimilar means to achieve an optimal solution. Both perform the same task—combining quotes and trades from all US exchanges into a consolidated data feed with relatively low jitter. Yet only one processor—the CTA Plan—uses FPGA hardware, while the other—the UTP Plan—does not.
This is because the UTP Plan's design, coding and hardware achieve the desired level of determinism without FPGA technology. The CTA Plan, by contrast, elected to incorporate FPGA technology into its system design. Notwithstanding these different design decisions, both plans achieve broadly similar levels of performance. FPGA technology is therefore not essential to addressing jitter, but rather is one option among many to address the issue.
Market data customers face an array of choices to optimize determinism, much like the UTP and CTA Plans. For example, a customer may purchase and deploy its own FPGA hardware, without purchasing the proposed FPGA technology service from the Exchange,
The experience of the Nasdaq exchange in offering the Nasdaq FPGA Service shows that customers sensitive to jitter often avail themselves of substitutes for FPGA technology, a decision that can change over time. Over the past decade, a total of 21 current or potential users of the Nasdaq FPGA Service—all of which sought a higher degree of determinism—substituted the Nasdaq FPGA Service with an alternative solution. Six of these customers were in the process of developing and testing the Nasdaq FPGA Service but ultimately decided not to purchase it before completing this process. The remaining 15 customers purchased the Nasdaq FPGA Service, only to cancel it after using it. Because all of these customers continued to utilize the underlying data, these cancelations demonstrate that the PSX FPGA Service, like the Nasdaq FPGA Service, will be an optional service, even for those customers that seek to reduce jitter.
Moreover, as noted above, no other exchange currently offers FPGA technology in conjunction with their proprietary data feeds as a separate service, notwithstanding the fact that it is a widely available technology, providing further evidence that customers have multiple options at their disposal to address jitter.
In the experience of the Nasdaq exchange, the Nasdaq FPGA Service is purchased by vendors, proprietary trading firms, banks, high-frequency trading firms, hedge funds, and market makers. The Nasdaq exchange is aware of no systematic differences within any of these categories among market participants that choose to use or not to use the Nasdaq FPGA Service.
Few customers of Nasdaq TotalView purchase the Nasdaq FPGA Service. This is because the bulk of customers consume Nasdaq TotalView for display (
Of the customers that receive Nasdaq TotalView from Nasdaq (either through a direct feed or an extranet connection) and are in a position to utilize the Nasdaq FPGA Service, only about 15 percent purchase it.
Most strikingly, only approximately 3% of market makers at Nasdaq purchase the Nasdaq FPGA Service.
For all of these reasons, customers can discontinue the use of the PSX FPGA Service at any time, or decide not to purchase it, for any reason, including the level of fees.
Customers that choose not to purchase the PSX FPGA Service are not impacted by the proposal.
The PSX FPGA Service will be available to all customers on a non-discriminatory basis, and therefore the proposed fees are not designed to permit unfair discrimination between customers, issuers, brokers, or dealers.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
This Proposal, a response to customer demand, is a product of a competitive marketplace. To date, lower levels of peak activity at the Phlx equity exchange relative to the Nasdaq exchange have been associated with low levels of customer interest in this product. Recently, however, Phlx has heard from customers interested in using FPGA technology for PSX TotalView. To address this customer demand, and to drive liquidity to the Phlx equity exchange by making it a more attractive trading venue, Phlx has decided to offer this product.
Approval of this Proposal will further promote competition by providing market participants additional choices in the transmission of PSX TotalView.
Nothing in the Proposal burdens inter-market competition (the competition among self-regulatory organizations) because approval of the Proposal does not impose any burden on the ability of other exchanges to compete. As noted above, FPGA technology is generally available and any exchange has the ability to offer it if it so chooses.
Nothing in the Proposal burdens intra-market competition (the competition among consumers of exchange data) because the PSX FPGA Service will be available to any customer under the same fee schedule as any other customer, and any market participant that wishes to purchase the PSX FPGA Service can do so on a non-discriminatory basis.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Cboe BZX Exchange, Inc. (the “Exchange” or “BZX”) proposes to amend Exchange Rule 11.22 (“Data Products”) to eliminate one of the Exchange's data offerings. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend Rule 11.22 (“Data Products”) to eliminate the data product listed under subparagraph (n), the “ETF Implied Liquidity” data feed,
By way of background, the ETF Implied Liquidity feed is an optional data feed that provides the Exchange's proprietary calculation of the implied liquidity and the aggregate best bid and offer (“BBO”) of all displayed orders on the Exchange and its affiliated exchanges
Currently there are no market participants that are taking the ETF Implied Liquidity feed. As such, the Exchange no longer wishes to maintain or offer this product and therefore proposes to decommission the ETF Implied Liquidity feed and delete the corresponding reference to the product from its rulebook.
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of section 6(b) of the Act.
In particular, the Exchange believes that the proposal to decommission the ETF Implied Liquidity feed is appropriate given the non-usage of the product among market participants. Further, the ETF Implied Liquidity feed is optional, and its use is not a prerequisite for trading on the Exchange. The Exchange also notes that is not required to maintain or offer any one proprietary market data product, including the ETF Implied Liquidity feed. The Exchange also believes that the proposed rule change is fair and equitable and is not designed to permit unfair discrimination as it applies uniformly to all Members (
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The ETF Implied Liquidity feed is an optional data feed offered by the Exchange, it is not a prerequisite to trading on the Exchange, and the Exchange is not required to offer or maintain such feed.
The Exchange believes that the proposed deletion does impose any intramarket competition as it applies to all Members (
The Exchange neither solicited nor received comments on the proposed rule change.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become
A proposed rule change filed under Rule 19b-4(f)(6)
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend Options 3, Section 15 (Risk Protections) to adopt an active quote protection.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of
The purpose of the proposed rule change is to adopt an active risk counter functionality called active quote protection (“Active Quote Protection”) in Options 3, Section 15. The Exchange intends to begin implementation prior to December 20, 2024, and will provide prior notice of the implementation date to Members in an Options Trader Alert.
The Exchange proposes to offer an optional active risk counter functionality called Active Quote Protection, which will be available to Market Makers as an alternative to existing passive risk counter functionality described in Options 3, Section 15(a)(3)(B) (
Today, the Exchange requires Market Makers to configure risk exposure thresholds based on various metrics for each options class, including percentage of executed quotes (“Percentage Threshold”), total number of executed contracts (“Volume Threshold”), absolute value of the difference between long and short positions (“Delta Threshold”), and absolute value of the difference between contracts bought and contracts sold (“Vega Threshold”) (collectively, “Thresholds”).
The Exchange now proposes to introduce a new risk protection called Active Quote Protection that would enable Market Makers to actively manage their executed contract limit (“Contract Limit”) by sending an electronic instruction to the Exchange to decrement their executed contract limit counter (“Limit Counter”) by a specified amount at any time, rather than waiting until the expiry of a defined time period, when the risk limit is exceeded (like a Purge Event), or when the Market Maker otherwise sends a specific instruction to purge quotes to completely reset the risk counter. The Contract Limit, as set by the Market Maker, would apply for the duration of the trading day. Once the Market Maker's Limit Counter exceeds the Contract Limit set by the Market Maker, the System would automatically remove quotes in all series of the applicable options class submitted through the Exchange's Specialized Quote Feed protocol,
Under Active Quote Protection, the System would similarly handle the Market Maker's quote in that the quote could be filled one execution over the Contract Limit before the Market Maker's remaining quotes are cancelled by the System in order to be consistent with the firm quote obligations under Rule 602 of Regulation NMS. Specifically, the Exchange notes that any marketable orders or quotes that are executable against a Market Maker's quotes that are received
Additionally, under Active Quote Protection, Market Makers will be able to submit a request (i) to decrement their Limit Counter by a specified number of contracts, or (ii) to fully decrement their Limit Counter to zero.
To effectuate the foregoing changes, the Exchange proposes to set forth the new risk protection in subparagraph (B)(ii) of Options 3, Section 15(a)(3), as follows:
In lieu of Rapid Fire, a Market Maker may provide an executed contract limit (“Contract Limit”) that, if exceeded, the System will automatically remove the Market Maker's quotes in all series of an options class submitted through SQF. The System will apply the Contract Limit for the duration of the trading day. For each class of options, the System will maintain an active limit counter that will track the current number of contracts executed through the Market Maker's quotes (“Limit Counter”). If the Limit Counter exceeds the Contract Limit established by the Market Maker, the System will automatically remove the Market Maker's quotes as described in Section 15(a)(3)(B)(iii). Market Makers may submit a request (i) to decrement their Limit Counter by a specified number of contracts, or (ii) to fully decrement their Limit Counter to zero, including to re-enter the System as described in Section 15(a)(3)(B)(v). For Market Makers that elect to utilize the Contract Limit, the Percentage Threshold, Volume Threshold, Delta Threshold, and Vega Threshold will not be available for use on the Market Maker's badge.
As described above, once the Limit Counter exceeds the Contract Limit set by the Market Maker under the proposed Active Quote Protection, the System would automatically remove quotes in the same manner as currently specified for a Purge Event in proposed subparagraph (B)(iii) of Options 3, Section 15(a)(3). Accordingly, the Exchange proposes to add Active Quote Protection's Contract Limit throughout this Rule. Specifically, proposed subparagraph (B)(iii) will provide that the System will automatically remove quotes in all series of an options class when the Percentage Threshold, Volume Threshold, Delta Threshold, Vega Threshold, or Contract Limit has been exceeded. The System will send a Purge Notification Message to the Market Maker for all affected series when the above thresholds have been exceeded. Proposed subparagraph (B)(iii)(a) will provide that the Percentage Threshold, Volume Threshold, Delta Threshold, Vega Threshold, and Contract Limit are considered independently of each other.
Further, as discussed above, any marketable orders or quotes that are executable against a Market Maker's quotes that are received
The System will execute any marketable orders or quotes that are executable against a Market Maker's quote and received prior to the time the Percentage Threshold, Volume Threshold, Delta Threshold, Vega Threshold, or Contract Limit is triggered up to the size of the Market Maker's quote, even if such execution results in executions in excess of the Market Maker's applicable Threshold or Contract Limit with respect to any parameter.
In addition, when the System removes quotes as a result of exceeding the Contract Limit under Active Quote Protection, the Exchange proposes to require the Market Maker to submit a request to re-enter the System. This request will be the same type of message as the request described in proposed subparagraph (B)(ii) where the Market Maker must request to fully decrement their Limit Counter back to zero in order to re-enter the System. This requirement will be added in proposed subparagraph (B)(v) of Options 3, Section 15(a)(3), and will be similar to how the existing quote purge mechanism works for the Thresholds today, except the Market Maker needs to send a separate message (
Similar to how default parameters are currently applied for each of the existing Thresholds described above, the Exchange proposes to apply a default parameter for the Active Quote Protection Contract Limit (which would be announced to Members) if the Market Maker opting to use Active Quote Protection does not provide a Contract Limit at the outset.
The Exchange also proposes that the new Active Quote Protection would leverage the existing market-wide speed bump (“MWSB”) functionality currently set forth in Options 3, Section 15(a)(3)(B)(vi) (renumbered as Section 15(a)(3)(B)(vii) under this proposal). Today, MWSB is a risk protection offered alongside the current Automated Quotation Adjustments and triggers when, during a time period established by the Market Maker, the total number of Purge Events exceeds a market-wide parameter provided to the Exchange by the Market Maker. When MWSB is triggered, the Exchange automatically purges the Market Maker's quotes in all classes, and the Market Maker must request re-entry to the System by contacting the Exchange's Operations Department. Today, MWSB is meant to provide Market Makers with protection from the risk of multiple executions across multiple series of an option or across multiple options. This risk protection recognizes that risk to Market Makers is not limited to a single series in an option or even to all series in an option; Market Makers that quote in multiple series of multiple options have significant exposure, requiring them to offset or hedge their overall positions. Market Makers are required to continuously quote in assigned options, and quoting across many series in an option or multiple options creates the possibility of executions that can create large, unintended principal positions that could expose Market Makers to
To that end, the Exchange proposes to update MWSB to add purge events under Active Quote Protection to the MWSB counter such that Active Quote Protection purge events and Purge Events under the current Automated Quotation Adjustments will be aggregated together as counting toward the specified market-wide parameter. Accordingly, the Exchange proposes to add references to the Active Quote Protection rule (
In addition to the automated quotation removal protections described in (B)(i)(a)-(d) and (B)(ii) above, a Market Maker must provide a market wide parameter by which the Exchange will automatically remove a Market Maker's quotes in all classes when, during a time period established by the Market Maker, the total number of quote removal events specified in (B)(i)(a)-(d) and (B)(ii) exceeds the market wide parameter provided to the Exchange by the Market Maker. Market Makers must request the Exchange enable re-entry by contacting the Exchange's Operations Department.
The following example illustrates the proposed behavior of the Active Quote Protection risk protection:
• Market Maker trades a transaction for 10 contracts in AAPL; Limit Counter goes from 0 to 10.
• Market Maker sends a request to decrement its Limit Counter in AAPL for 10 contracts; Limit Counter goes from 10 to 0.
• Market Maker trades a transaction for 20 contracts in AAPL; Limit Counter goes from 0 to 20.
• Market Maker trades a transaction for 50 contracts in AAPL; Limit Counter goes from 20 to 70.
• Market Maker sends a request to decrement its Limit Counter in AAPL for 20 contracts; Limit Counter goes from 70 to 50.
• Market Maker trades a transaction for 60 contracts in AAPL; Limit Counter goes from 50 to 110 and all Market Maker quotes in AAPL are automatically purged after the execution because the Limit Counter exceeded the Market Maker's Contract Limit of 100 executed contracts.
• At this point, the Market Maker must send a request to fully decrement its Limit Counter in AAPL back to zero in order to begin quoting again.
The following example illustrates how MWSB will work with the proposed Active Quote Protection functionality:
• Assume Market Maker in AAPL and SPY has Automated Quotation Adjustments set for AAPL and Active QP set for SPY.
• Market Maker sets its MWSB market-wide parameter so that it is triggered at 25 purge events within a 20 second time period.
• On a given trading day, if an Active Quote Protection Purge Event is triggered 15 times in SPY and an Automated Quotation Adjustment Purge Event is triggered 10 times in AAPL, all within 20 seconds, then the Exchange will automatically remove all of the Market Maker's quotes AAPL and SPY.
The Exchange proposes a few technical, non-substantive amendments in Options 3, Section 15(a)(3)(B). With the addition of the new Active Quote Protection rule in proposed subparagraph (B)(ii), the Exchange proposes to renumber existing subparagraphs (B)(ii)-(vi) as proposed subparagraphs (B)(iii)-(vii) and make related changes to update existing cross-cites within Section 15(a)(3)(B). The Exchange also proposes to title subparagraph (B)(i) as “Rapid Fire” and subparagraph (B)(vii) as “Market-Wide Speed Bump” to more clearly identify which rules apply to which risk protections.
The Exchange believes that its proposal is consistent with section 6(b) of the Act,
The Exchange believes that the proposed Active Quote Protection risk protection is consistent with the Act because it will enhance the risk protection tools available to Market Makers by introducing a new method of establishing and monitoring for risk parameters that will be offered as an alternative to existing Rapid Fire risk parameters, thereby supporting a Market Maker's ability to manage their risk on the Exchange, and also providing them with flexibility to use additional tools to manage risk. As noted above, while the passive (Rapid Fire) and active (Active QP) risk counter functionality will be mutually exclusive on each badge, Market Makers will still be able to use both to cover their activity on the Exchange by getting multiple badges and setting each risk counter by badge. The Exchange believes that offering more risk management tools to Market Makers would mitigate their exposure to excessive risk. The Exchange further believes that having the new Active Quote Protection functionality leverage the existing MWSB functionality will similarly support a Market Maker's ability to manage their risk on the Exchange by including Active Quote Protection purge events to the MWSB counter. As noted above, the risk to Market Makers is not limited to a single series in an option or even multiple series in an option as Market Makers that quote in multiple series of multiple options have significant exposure, requiring them to offset or hedge their overall positions. Market Makers are required to continuously quote in assigned options, and quoting across many series in an option or multiple options creates the possibility of executions that can create large, unintended principal positions that could expose Market Makers to unnecessary risk. Today, MWSB is designed to assist Market Makers in managing their market risk by tracking the number of Purge Events relative to the market-wide parameter set by the Market Maker. The Exchange therefore believes that tracking the number of Active Quote Protection purge events for a Market Maker against its MWSB market-wide parameter would be similarly useful for managing market risk so that they can provide deep and liquid markets to the benefit of all investors. Ultimately, the Exchange believes that providing Market Makers with additional tools in the manner described above to manage their risk parameters serves to perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest because Market Makers will be better able to manage risks with these tools.
With regard to the impact of this proposal on system capacity, the Exchange notes that it has analyzed its capacity and represents that it and the
The Exchange further represents that its proposal will continue to operate consistently with the firm quote obligations of a broker-dealer pursuant to Rule 602 of Regulation NMS. Specifically, any marketable interest that is executable against a Market Maker's quotes that are received
As noted above, the proposed Active Quote Protection functionality is similar to existing active risk counter functionality on another options exchange, which currently allows users to actively decrement the risk counter by a specified amount at any time, rather than waiting until a risk limit is reached or the user otherwise sends a specific instruction to the exchange to completely reset the counting program.
The Exchange believes that the technical amendments in Options 3, Section 15(a)(3)(B) described above are consistent with the Act because they will promote clarity in the rules and make the Rulebook easier to navigate for market participants by updating rule numbering and existing cross-cites as described above. Furthermore, the Exchange also believes that adding the defined terms for Rapid Fire and MWSB in the rule text will promote clarity so that Members can more easily locate the relevant functionalities in the Rulebook.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange does not believe that the proposed Active Quote Protection functionality will impose any undue burden on intra-market competition as it is aimed at mitigating exposure to excessive risk when trading on the Exchange. While the Exchange will offer the proposed functionality to Market Makers only, the proposed risk protection is intended to provide Market Makers with an additional tool to manage their risk parameters in a manner they deem appropriate. As such, the Exchange believes that the proposed functionality may facilitate Market Makers' provision of liquidity on the Exchange, thereby benefitting all market participants through additional execution opportunities at potentially improved prices.
The Exchange also believes that its Active Quote Protection proposal does not impose an undue burden on inter-market competition as the proposed risk protection is similar to an existing risk protection on MEMX
Lastly, the Exchange does not believe that the proposed technical amendments in Options 3, Section 15(a)(3)(B) will impose an undue burden on competition as these are non-substantive changes to promote clarity in the rules and make the Rulebook easier to navigate for market participants.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Cboe BZX Exchange, Inc. (the “Exchange” or “BZX” or “BZX Equities”) proposes to amend its Fee Schedule. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend its Fee Schedule applicable to its equities trading platform (“BZX Equities”) to eliminate reference to the ETF Implied Liquidity Feed and corresponding fees, effective August 8, 2023.
The Exchange proposes to amend the Market Data section of its fee schedule to eliminate reference to, and corresponding fees for, a market data product called the ETF Implied Liquidity Feed.
Currently there are no market participants that are taking the ETF Implied Liquidity feed. As such, the Exchange no longer wishes to maintain or offer this product and therefore proposes to decommission the ETF Implied Liquidity feed and delete the corresponding reference to the product from its Fee Schedule.
The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of section 6(b) of the Act.
In particular, the Exchange believes that the proposal to decommission the ETF Implied Liquidity feed and remove reference to the feed and corresponding fees in the Fee Schedule is appropriate given the non-usage of the product among market participants. Further, the ETF Implied Liquidity feed is optional, and its use is not a prerequisite for trading on the Exchange. The Exchange also notes that is not required to maintain or offer any one proprietary market data product, including the ETF Implied Liquidity feed. The Exchange also believes that the proposed rule change is fair and equitable and is not designed to permit unfair discrimination as it applies uniformly to all Members (
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The ETF Implied Liquidity feed is an optional data feed offered by the Exchange, it is not a prerequisite to trading on the Exchange, and the Exchange is not required to offer or maintain such feed.
The Exchange believes that the proposed deletion does impose any intramarket competition as it applies to all Members (
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
Cboe Exchange, Inc. (the “Exchange” or “Cboe Options”) proposes to amend its Fees Schedule. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend its Fees Schedule.
The Exchange first notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More specifically, the Exchange is only one of 16 options venues to which market participants may direct their order flow. Based on publicly available information, no single options exchange has more than 16% of the market share.
The Exchange first proposes to amend the Select Customer Options Reduction program (“SCORe”). By way of background, SCORe is a discount program for Retail, Non-FLEX Customer (“C” origin code) volume in the following options classes: SPX (including SPXW), VIX, RUT, MXEA, & MXEF (“Qualifying Classes”). The SCORe program is available to any Trading Permit Holder (“TPH”) Originating Clearing Firm or non-TPH Originating Clearing Firm that sign up for the program.
Under the program, to determine the Discount Tier, an Originating Firm's Retail volume in the Qualifying Classes will be divided by total Retail volume in the Qualifying Classes executed on the Exchange. The program then provides a discount per retail contract, based on the determined Discount Tier thereunder. The program sets forth four discount tiers, with applicable discounts ranging from $0.00 to $0.14 per retail contract. Under the current program, and as set forth in Footnote 48 to the Fees Schedule, “Retail” volume is defined as Customer order (“C” capacity code) for which the original order size (in the case of a simple order) or largest leg size (in the case of a complex order) is 100 contracts or less. The Exchange proposes amending Footnote 48 to the Fees Schedule, to define “Retail” volume as Customer order (“C” capacity code) for which the original order size (in the case of a simple order) or the largest leg size (in the case of a complex order) is 20 contracts or less.
Additionally, the Exchange proposes to remove outdated language from Footnote 48 related to the SCORe program. Effective February 1, 2023, the Exchange amended the program by eliminating the Qualifying Tiers construct.
The Exchange proposes to amend certain fees related to its provision of Open-Close Data. By way of background, the Exchange currently offers End-of-Day (“EOD”) and Intraday Open-Close Data (collectively, “Open-Close Data”). EOD Open-Close Data is an end-of-day volume summary of trading activity on the Exchange at the option level by origin (customer, professional customer, broker-dealer, and market maker), side of the market (buy or sell), price, and transaction type (opening or closing). The customer and professional customer volume is further broken down into trade size buckets (less than 100 contracts, 100-199 contracts, greater than 199 contracts). The Open-Close Data is proprietary Cboe Options trade data and does not include trade data from any other exchange. It is also a historical data product and not a real-time data feed.
The Exchange also offers Intraday Open-Close Data, which provides similar information to that of Open-Close Data but is produced and updated every 10 minutes during the trading day. Data is captured in “snapshots” taken every 10 minutes throughout the trading day and is available to subscribers within five minutes of the conclusion of each 10-minute period.
Cboe LiveVol, LLC (“LiveVol”), a wholly owned subsidiary of the Exchange's parent company, Cboe Global Markets, Inc., makes the Open-Close Data available for purchase to TPHs and non-TPHs on the LiveVol DataShop website (
Open-Close Data is subject to direct competition from similar end-of-day and intraday options trading summaries offered by several other options exchanges.
Currently, End-of-Day Open-Close Data is available to purchase and download in three formats. Customers may (1) download data on a per Cboe Security basis, (2) download data for all Cboe Securities (equities, indexes and ETFs), and/or (3) download daily updates for all Cboe Securities (equities, indexes and ETFs). Cboe is proposing to eliminate the End-of-Day Open-Close Data offering to download data on a per Cboe Security basis. The End-of-Day Open-Close Data offerings will remain available on an all Cboe Securities basis.
The Exchange notes that removing the offering to download data on a per Cboe Security basis and offering such data for all Cboe Securities only is consistent with the offering of Open-Close Data at the Exchange's affiliates,
The Exchange also proposes a technical amendment to its Livevol fees, correcting a spelling error of “Intrday” to “Intraday.”
Through its educational division, the Options Institute, the Exchange has established the Options Institute Research Grant Program 2023 (“Grant Program”). Under the Grant Program, selected grant recipients will conduct a research project in an eligible topic(s), including Derivatives Products and Performance, Market Performance, Operations and Risk Management, and Decision Theory. The Exchange seeks to provide historical data sets to selected grant recipients for use as part of the research project. As such, the Exchange proposes to amend its Fee Schedule to add Footnote 51, applicable to the Livevol Fees table of the Fee Schedule, stating that fees for Open-Close Data will be waived for grant recipients of the Grant Program.
In order to qualify for the Grant Program, an applicant must be a faculty member or student of a qualifying, accredited educational institution that will use the data solely for their completion of the research project (
The Exchange believes that researchers at academic institutions provide a valuable service for the Exchange in studying and promoting the options market. Though academic institutions and researchers have a need for granular options data sets, they do not trade upon the data for which they subscribe. The Exchange believes the waiver of these Open-Close Data fees for any grant recipient under the Grant Program will encourage and promote research directed at increasing understanding and advancement of derivatives usage and financial exchange marketplace structures.
The Exchange notes other exchanges offer academic discounts or credit for similar data feeds.
Finally, the Exchange proposes to modify fees associated with certain routing fee codes. The Fees Schedule currently lists fee codes and their corresponding transaction fee for routed Customer orders to other options exchanges specifically in Exchange Traded Funds (“ETF”) and equity options, and for non-Customer orders routed in Penny and Non-Penny options classes.
The Exchange notes that its current approach to routing fees is to set forth in a simple manner certain sub-categories of fees that approximate the cost of routing to other options exchanges based on the cost of transaction fees assessed by each venue as well as a flat $0.15 assessment that covers costs to the Exchange for routing (
The Exchange assesses fees in connection with orders routed away to various exchanges. Currently, under the Routing Fees table of the Fee Schedule, fee codes RD, RF, RI, TD, TE, TF, TG, TH, and TI are appended to certain Customer orders in ETF and Equity options, as follows:
• fee code RD is appended to Customer orders in ETF/Equity options routed to NYSE American (“AMEX”), BOX Options Exchange (“BOX”), Nasdaq BX Options (“BX”), Cboe EDGX Exchange, Inc. (“EDGX”), ISE Mercury, LLC (“MERC”), MIAX Options Exchange (“MIAX”) or Nasdaq PHLX LLC (“PHLX”) (excluding orders in SPY options), and assesses a charge of $0.25 per contract;
• fee code RF is appended to Customer orders in ETF/Equity, Penny options routed to NYSE Arca, Inc (“ARCA”), Cboe BZX Exchange, Inc. (“BZX”), Cboe C2 Exchange, Inc. (“C2”), Nasdaq ISE (“ISE”), ISE Gemini, LLC (“GMNI”), MIAX Emerald Exchange (“EMLD”), MIAX Pearl Exchange (“PERL”), Nasdaq Options Market LLC (“NOM”), or PHLX (for orders in SPY options only) and assesses a charge of $0.75 per contract;
• fee code RI is appended to Customer orders in ETF/Equity, Non-Penny options routed to ARCA, BZX, C2, ISE, GMNI, EMLD, PERL or NOMX, and assesses a charge of $1.25 per contract.
• fee code TD is appended to Customer orders in ETF options originating on an Exchange-sponsored terminal for greater than or equal to 100 contracts routed to AMEX, BOX, BX, EDGX, MERC, MIAX, or PHLX, and assesses a charge of $0.18 per contract;
• fee code TE is appended to Customer orders in ETF/Equity options originating on an Exchange-sponsored terminal for less than 100 contracts routed to AMEX, BOX, BX, EDGX, MERC, MIAX, PHLX, and assesses no charge per contract;
• fee code TF is appended to Customer orders in ETF, Penny options originating on an Exchange-sponsored terminal for greater than or equal to 100 contracts routed to ARCA, BZX, C2, ISE, GMNI, EMLD, PERL, or NOM, and assesses a charge of $0.18 per contract;
• fee code TG is appended to Customer orders in ETF, Non-Penny options originating on an Exchange-sponsored terminal for greater than or equal to 100 contracts routed to ARCA, BZX, C2, ISE, GMNI, EMLD, PERL, or NOM, and assesses $0.18 per contract;
• fee code TH is appended to Customer orders in ETF/Equity, Penny options originating on an Exchange-sponsored terminal for less than 100 contracts routed to ARCA, BZX, C2, ISE, GMNI, EMLD, PERL, or NOM, and assesses no charge per contract; and
• fee code TI is appended to Customer orders in ETF/Equity, Non-Penny options originating on an Exchange-sponsored terminal for less than 100 contracts routed to ARCA, BZX, C2, ISE, GMNI, EMLD, PERL, or NOM, and assesses no charge per contract.
The Exchange proposes to amend fee codes RD, TD, and TE to exclude applicable Customer orders routed to ISE Mercury, LLC (MERC) and to amend fee codes RF, RI, TF, TG, TH, and TI to add applicable Customer orders routed to MERC. The Exchange further proposes to amend fee codes RF, RI, TF, TG, TH, and TI to add applicable Customer orders routed to MEMX LLC (“MEMX”), in anticipation of the launch of the new options exchange. The charges assessed per contract for each fee code remain the same under the proposed rule change.
The proposed changes result in an assessment of fees that, following fee changes by an away options exchanges and in anticipation of the launch of another options exchange, is more in line with the Exchange's current approach to routing fees, that is, in a manner that approximates the cost of routing Customer orders to other away options exchanges, based on the general cost of transaction fees assessed by the sub-category of away options exchanges for such orders (as well as the Exchange's Routing Costs).
The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of section 6(b) of the Act.
First, the Exchange believes the proposal to amend the SCORe program
The Exchange also believes the proposed changes to amend its End-of-Day Open-Close Data offering to remove the offering to download data on a per Cboe Security basis and to offer such data on an all Cboe Securities basis only are reasonable. In adopting Regulation NMS, the Commission granted self-regulatory organizations (“SROs”) and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. The Exchange believes the proposed change will continue to broaden the availability of U.S. option market data to investors consistent with the principles of Regulation NMS. Open-Close Data is designed to help investors understand underlying market trends to improve the quality of investment decisions. Indeed, subscribers to the data will still be able to enhance their ability to analyze option trade and volume data and create and test trading models and analytical strategies. The Exchange believes Open-Close Data continues to provide a valuable tool that subscribers can use to gain comprehensive insight into the trading activity in a particular series, but also emphasizes such data is not necessary for trading and as noted above, is entirely optional. Moreover, several other exchanges offer a similar data product which offer the same type of data content through end-of-day or intraday reports.
The Exchange also operates in a highly competitive environment. Indeed, there are currently 16 registered options exchanges that trade options. Based on publicly available information, no single options exchange has more than 16% of the market share.
The Exchange also believes that the waiver of Open-Close data fees for recipients of the Grant Program is reasonable because such data is utilized for a strict, limited purpose under the terms of the Grant Program and selected grant recipients are not able to monetize access to the data as they do not trade on the data set. The Exchange believes the waiver of fees for grant recipients will promote research and studies of the options industry to the benefit of all market participants. The Exchange believes that the proposed waiver is equitable and not unfairly discriminatory because it will apply equally to all selected grant recipients and in exchange, the Exchange will be granted certain usage rights with respect to the recipients' final research papers. Further, as noted above, other exchanges offer academic discounts or credit for similar data feeds.
The Exchange also believes the proposed rule change to amend fee codes RD, RF, RI, TD, TE, TF, TG, TH, and TI to account for MERC's current assessment of fees for Customer orders and MEMX's expected assessment of fees for Customer orders is reasonable because it is reasonably designed to assess routing fees in line with the Exchange's current approach to routing fees. That is, the proposed rule change is intended to include Customer orders in ETF and equity options routed to MERC and MEMX in the most appropriate sub-category of fees that approximates the cost of routing to a group of away options exchanges based on the cost of transaction fees assessed by each venue as well as Routing Costs to the Exchange. As noted above, the Exchange operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. The Exchange notes that routing through the Exchange is optional and that TPHs will continue to be able to choose where to route their Customer orders in ETF and equity options in the same sub-category group of away exchanges as they currently may choose to route. The proposed rule
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed changes to the SCORe program will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed changes apply to all registered Originating Firms uniformly, in that the updated definition of “Retail” volume will, for purposes of calculating discounts under the program, be applied to all Originating Firms.
Further, the Exchange does not believe that the proposed changes to its offering of End-of-Day Open-Close Data will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. As noted above, the proposed amendments align the Exchange's offering of End-of-Day Open-Close Data with the data products of the Exchange's affiliates,
Additionally, the Exchange does not believe that the proposed waiver of Open-Close data fees for recipients of the Grant Program will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. All qualifying researchers are eligible to apply to the Grant Program, and the waiver of Open-Close data fees for recipients of the Grant Program will apply equally to all selected grant recipients. In exchange, the Exchange will be granted certain usage rights with respect to the recipients' final research papers. Further, while the waiver applies only to grant recipients, academic institutions' research and publications as a result of access to historical market data benefits all market participants.
Finally, the Exchange does not believe the proposed rule change to amend fee codes RD, RF, RI, TD, TE, TF, TG, TH, and TI will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. All Members' Customer orders routing to MERC and currently yielding fee code RD, TD, or TE will yield fee code RF, RI, RF, TG, TH, or TI (depending on the order) and will automatically and uniformly be assessed the current fees already in place for such routed orders, as applicable. Likewise, all Members' Customer orders routed to MEMX will automatically yield fee code RF, RI, RF, TG, TH, or TI (depending on the order) and uniformly be assessed the corresponding fee. The Exchange notes that other options exchange approximate routing costs in a similar manner as the Exchange's current approach.
The Exchange also does not believe that the proposed rule changes will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. As previously discussed, the Exchange operates in a highly competitive market. Members have numerous alternative venues that they may participate on and direct their order flow, including 15 other options exchanges and off-exchange venues. Additionally, the Exchange represents a small percentage of the overall market. Based on publicly available information, no single options exchange has more than 16% of the market share.
Additionally, the Exchange also does not believe that the proposed rule change to waive Open-Close data fees for recipients of the Grant Program will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act as other options exchanges offer academic discounts or credit for similar data feeds.
The Exchange neither solicited nor received comments on the proposed rule change.
The foregoing rule change has become effective pursuant to section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On June 21, 2023, The Nasdaq Stock Market LLC (“Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
Section 19(b)(2) of the Act
The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, the Commission, pursuant to section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is filing a proposal to amend the MIAX Emerald Options Exchange Fee Schedule (“Fee Schedule”) to amend certain connectivity and port fees.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend the Fee Schedule as follows: (1) increase the fees for a 10 gigabit (“Gb”) ultra-low latency (“ULL”) fiber connection for Members
Also, in that fee change, the Exchange adopted fees for providing five different types of ports for the first time. These ports were FIX Ports, MEI Ports, Clearing Trade Drop Ports, FIX Drop Copy Ports, and Purge Ports.
Since the time of the 2021 increase discussed above, the Exchange experienced ongoing increases in expenses, particularly internal expenses.
Much of the cost relates to monitoring and analysis of data and performance of the network via the subscriber's connection with nanosecond granularity, and continuous improvements in network performance with the goal of improving the subscriber's experience. The costs associated with maintaining and enhancing a state-of-the-art network is a significant expense for the Exchange, and thus the Exchange believes that it is reasonable and appropriate to help offset those increased costs by amending fees for connectivity services. Subscribers expect the Exchange to provide this level of support so they continue to receive the performance they expect. This differentiates the Exchange from its competitors.
The Exchange now proposes to amend the Fee Schedule to amend the fees for 10Gb ULL connectivity and Limited Service MEI Ports in order to recoup ongoing costs and increase in expenses set forth below in the Exchange's cost analysis. The Exchange initially filed this proposal on December 30, 2022 as SR-EMERALD-2022-38. On January 9, 2023, the Exchange withdrew SR-EMERALD-2022-38 and resubmitted this proposal as SR-EMERALD-2023-01 (the “Initial Proposal”).
The Exchange previously included a cost analysis in the Initial, Second, Third and Fourth Proposals. As described more fully below, the Exchange provides an updated cost analysis that includes, among other things, additional descriptions of how the Exchange allocated costs among it and its affiliated exchanges (MIAX PEARL, LLC (“MIAX Pearl”) (separately among MIAX Pearl Options and MIAX Pearl Equities) and MIAX
Starting in 2017, following the United States Court of Appeals for the District of Columbia's
While the above appeal to the D.C. Circuit was pending, on March 29, 2019, the Commission issued an order disapproving a proposed fee change by BOX Exchange LLC (“BOX”) to establish connectivity fees (the “BOX Order”), which significantly increased the level of information needed for the Commission to believe that an exchange's filing satisfied its obligations under the Act with respect to changing a fee.
Also while the above appeal was pending, on May 21, 2019, the Commission Staff issued guidance “to assist the national securities exchanges and FINRA . . . in preparing Fee Filings that meet their burden to demonstrate that proposed fees are consistent with the requirements of the Securities Exchange Act.”
Following the BOX Order and Staff Guidance, on August 6, 2020, the D.C. Circuit vacated the Commission's SIFMA Decision in
As a result of the Commission's loss of the
While the Exchange appreciates that the Staff Guidance articulates an important policy goal of improving disclosures and requiring exchanges to justify that their market data and access fee proposals are fair and reasonable, the practical effect of the Revised Review Process, Staff Guidance, and the Commission's related practice of continuous suspension of new fee filings, is anti-competitive, discriminatory, and has put in place an un-level playing field, which has negatively impacted smaller, nascent, non-legacy exchanges (“non-legacy exchanges”), while favoring larger, incumbent, entrenched, legacy exchanges (“legacy exchanges”).
The net result is that the non-legacy exchanges are effectively now blocked by the Commission Staff from adopting or increasing fees to amounts comparable to the legacy exchanges (which were not subject to the Revised Review Process and Staff Guidance), despite providing enhanced disclosures and rationale to support their proposed fee changes that far exceed any such support provided by legacy exchanges. Simply put, legacy exchanges were able to increase their non-transaction fees during an extended period in which the Commission applied a “market-based” test that only relied upon the assumed presence of significant competitive forces, while exchanges today are subject to a cost-based test requiring extensive cost and revenue disclosures, a process that is complex, inconsistently applied, and rarely results in a successful outcome,
Commission Staff now require exchange filings, including from non-legacy exchanges such as the Exchange, to provide detailed cost-based analysis in place of competition-based arguments to support such changes. However, even with the added detailed cost and expense disclosures, the Commission Staff continues to either suspend such filings and institute disapproval proceedings, or put the exchanges in the unenviable position of having to repeatedly withdraw and re-file with additional detail in order to continue to charge those fees.
The much higher non-transaction fees charged by the legacy exchanges provides them with two significant competitive advantages. First, legacy exchanges are able to use their additional non-transaction revenue for investments in infrastructure, vast marketing and advertising on major media outlets,
While the Commission has clearly noted that the Staff Guidance is merely guidance and “is not a rule, regulation or statement of the . . . Commission . . . the Commission has neither approved nor disapproved its content . . .”,
Because of the un-level playing field created by the Revised Review Process and Staff Guidance, the Exchange believes that the Commission Staff, at this point, should either (a) provide sufficient clarity on how its cost-based standard can be met, including a clear and exhaustive articulation of required data and its views on acceptable margins,
In light of the above, disapproval of this would not meet the fairness standard under the Act, would be discriminatory and places a substantial burden on competition. The Exchange would be uniquely disadvantaged by not being able to increase its access fees to comparable levels (or lower levels than current market rates) to those of other options exchanges for connectivity. If the Commission Staff were to disapprove this proposal, that action, and not market forces, would substantially affect whether the Exchange can be successful in its competition with other options exchanges. Disapproval of this filing could also be viewed as an arbitrary and capricious decision should the Commission Staff continue to ignore its past treatment of non-transaction fee filings before implementation of the Revised Review Process and Staff Guidance and refuse to allow such filings to be approved despite significantly enhanced arguments and cost disclosures.
The Exchange proposes to amend the Fee Schedule to increase the fees for Members and non-Members to access the Exchange's system networks
The Exchange will continue to assess monthly Member and non-Member network connectivity fees for connectivity to the primary and secondary facilities in any month the Member or non-Member is credentialed to use any of the Exchange APIs or market data feeds in the production environment. The Exchange will continue to pro-rate the fees when a Member or non-Member makes a change to the connectivity (by adding or deleting connections) with such pro-rated fees based on the number of trading days that the Member or non-Member has been credentialed to utilize any of the Exchange APIs or market data feeds in the production environment through such connection, divided by the total number of trading days in such month multiplied by the applicable monthly rate.
The Exchange also proposes to amend Section 5)d) of the Fee Schedule to adopt a tiered-pricing structure for Limited Service MEI Ports available to Market Makers. The Exchange allocates two (2) Full Service MEI Ports
The Exchange now proposes to move from a flat monthly fee per Limited Service MEI Port for each matching engine to a tiered-pricing structure for Limited Service MEI Ports for each matching engine under which the monthly fee would vary depending on the number of Limited Service MEI Ports each Market Maker elects to purchase. Specifically, the Exchange will continue to provide the first and second Limited Service MEI Ports for each matching engine free of charge. For Limited Service MEI Ports, the Exchange proposes to adopt the following tiered-pricing structure: (i) the third and fourth Limited Service MEI Ports for each matching engine will increase from the current flat monthly fee of $100 to $200 per port; (ii) the fifth and sixth Limited Service MEI Ports for each matching engine will increase from the current flat monthly fee of $100 to $300 per port; and (iii) the seventh or more Limited Service MEI Ports will increase from the current monthly flat fee of $100 to $400 per port.
The Exchange offers various types of ports with differing prices because each port accomplishes different tasks, are suited to different types of Members, and consume varying capacity amounts of the network. For instance, Market Makers who take the maximum amount of Limited Service MEI Ports account for approximately greater than 99% of message traffic over the network, while Market Makers with fewer Limited Service MEI Ports account for approximately less than 1% of message traffic over the network. In the Exchange's experience, Market Makers who only utilize the two free Limited Service MEI Ports do not have a business need for the high performance network solutions required by Market Makers who take the maximum amount of Limited Service MEI Ports. The Exchange's high performance network solutions and supporting infrastructure (including employee support), provides unparalleled system throughput and the capacity to handle approximately 18 million quote messages per second. Based on May 2023 trading results, the Exchange handles over approximately 8.6 billion quotes on an average day, and more than 189 billion quotes over the entire month. Of that total, Market Makers with the maximum amount of Limited Service MEI Ports generated more than 111 billion quotes (and more than 5 billion quotes on an average day), and Market Makers who utilized only the two free Limited Service MEI Ports generated approximately 40 billion quotes (and approximately 1.8 billion quotes on an average day). Also for May 2023, Market Makers who utilized 7 to 9 Limited Service MEI ports submitted an average of 936 million quotes per day; Market Makers who utilized 5-6 Limited Service MEI Ports submitted an average of 578 million quotes on an average day; and Market Makers who utilized 3-4 Limited Service MEI Ports submitted an average of 176 million quotes on an average day.
To achieve a consistent, premium network performance, the Exchange must build out and maintain a network that has the capacity to handle the message rate requirements of its most heavy network consumers. These billions of messages per day consume the Exchange's resources and significantly contribute to the overall network connectivity expense for storage and network transport capabilities. The Exchange must also purchase additional storage capacity on an ongoing basis to ensure it has sufficient capacity to store these messages as part of it surveillance program and to satisfy its record keeping requirements under the Exchange Act.
The proposed fee changes are immediately effective.
The Exchange believes that the proposed fees are consistent with section 6(b) of the Act
The Exchange believes that the information provided to justify the proposed fees meets or exceeds the amount of detail required in respect of proposed fee changes under the Revised Review Process and as set forth in recent Staff Guidance. Based on both the BOX Order
The Exchange believes that exchanges, in setting fees of all types, should meet high standards of transparency to demonstrate why each new fee or fee amendment meets the requirements of the Act that fees be reasonable, equitably allocated, not unfairly discriminatory, and not create an undue burden on competition among market participants. The Exchange believes this high standard is especially important when an exchange imposes various fees for market participants to access an exchange's marketplace.
In the Staff Guidance, the Commission Staff states that, “[a]s an initial step in assessing the reasonableness of a fee, staff considers whether the fee is constrained by significant competitive forces.”
The proposed fees are reasonable because they promote parity among exchange pricing for access, which promotes competition, including in the Exchanges' ability to competitively price transaction fees, invest in infrastructure, new products and other innovations, all while allowing the Exchange to recover its costs to provide dedicated access via 10Gb ULL connectivity and Limited Service MEI Ports. As discussed above, the Revised Review Process and Staff Guidance have created an uneven playing field between legacy and non-legacy exchanges by severely restricting non-legacy exchanges from being able to increase non-transaction related fees to provide them with additional necessary revenue to better compete with legacy exchanges, which largely set fees prior to the Revised Review Process. The much higher non-transaction fees charged by the legacy exchanges provides them with two significant competitive advantages: (i) additional non-transaction revenue that may be used to fund areas other than the non-transaction service related to the fee, such as investments in infrastructure, advertising, new products and other innovations; and (ii) greater flexibility to lower their transaction fees by using the revenue from the higher non-transaction fees to subsidize transaction fee rates. The latter is more immediately impactful in competition for order flow and market share, given the variable nature of this cost on Member firms. The absence of a reasonable path forward to increase non-transaction fees to comparable (or lower rates) limits the Exchange's flexibility to, among other things, make additional investments in infrastructure and advertising, diminishes the ability to remain competitive on transaction fees, and hinders the ability to compete for order flow and market share. Again, while one could debate whether the pricing of non-transaction fees are subject to the same market forces as transaction fees, there is little doubt that subjecting one exchange to a materially different standard than that applied to other exchanges for non-transaction fees leaves that exchange at a disadvantage in its ability to compete with its pricing of transaction fees.
The Exchange initially adopted a fee of $50 per port, after the first two Limited Service MEI Ports that are provided free of charge, and the Exchange incurred all the costs associated to provide those first two Limited Service MEI Ports since it commenced operations in March 2019. At that same time, the Exchange only charged $6,000 per month for each 10Gb ULL connection. As a new exchange entrant, the Exchange chose to offer connectivity and ports at very low fees to encourage market participants to trade on the Exchange and experience, among things, the quality of the Exchange's technology and trading functionality. This practice is not uncommon. New exchanges often do not charge fees or charge lower fees for certain services such as memberships/trading permits to attract order flow to an exchange, and later amend their fees to reflect the true value of those services, absorbing all costs to provide those services in the meantime. Allowing new exchange entrants time to build and sustain market share through various pricing incentives before increasing non-transaction fees encourages market entry and fee parity, which promotes competition among exchanges. It also enables new exchanges to mature their markets and allow market participants to trade on the new exchanges without fees serving as a potential barrier to attracting memberships and order flow.
The proposed changes to the Fee Schedule are reasonable in several respects. As a threshold matter, the Exchange is subject to significant competitive forces, which constrains its pricing determinations for transaction fees as well as non-transaction fees. The fact that the market for order flow is competitive has long been recognized by the courts. In
The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention to determine prices, products, and services in the securities markets. In Regulation NMS, while adopting a series of steps to improve the current market model, the Commission highlighted the importance of market forces in determining prices and SRO revenues, and also recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
Congress directed the Commission to “rely on `competition, whenever possible, in meeting its regulatory responsibilities for overseeing the SROs and the national market system.' ”
The Exchange believes the competing exchanges' 10Gb connectivity and port fees are useful examples of alternative approaches to providing and charging for access and demonstrating how such fees are competitively set and constrained. To that end, the Exchange believes the proposed fees are competitive and reasonable because the proposed fees are similar to or less than fees charged for similar connectivity and port access provided by other options exchanges with comparable market shares. As such, the Exchange believes that denying its ability to institute fees that allow the Exchange to recoup its costs with a reasonable margin in a manner that is closer to parity with legacy exchanges, in effect, impedes its ability to compete, including in its pricing of transaction fees and ability to invest in competitive infrastructure and other offerings. The following table shows how the Exchange's proposed fees remain similar to or less than fees charged for similar connectivity and port access provided by other options exchanges with similar market share. Each of the connectivity or port rates in place at competing options exchanges were filed with the Commission for immediate effectiveness and remain in place today.
There is no requirement, regulatory or otherwise, that any broker-dealer connect to and access any (or all of) the available options exchanges. Market participants may choose to become a member of one or more options exchanges based on the market participant's assessment of the business opportunity relative to the costs of the Exchange. With this, there is elasticity of demand for exchange membership. As an example, the Exchange's affiliate,
It is not a requirement for market participants to become members of all options exchanges; in fact, certain market participants conduct an options business as a member of only one options market.
One other exchange recently noted in a proposal to amend their own trading permit fees that of the 62 market making firms that are registered as Market Makers across Cboe, MIAX, and BOX, 42 firms access only one of the three exchanges.
Not only is there not an actual regulatory requirement to connect to every options exchange, the Exchange believes there is also no “de facto” or practical requirement as well, as further evidenced by the broker-dealer membership analysis of the options exchanges discussed above. As noted above, this is evidenced by the fact that one MIAX Pearl Options Market Maker terminated their MIAX Pearl Options membership effective January 1, 2023 as a direct result of the proposed connectivity and port fee changes on MIAX Pearl Options (which are similar to the changes proposed herein). Indeed, broker-dealers choose if and how to access a particular exchange and because it is a choice, the Exchange must set reasonable pricing, otherwise prospective members would not connect and existing members would disconnect from the Exchange. The decision to become a member of an exchange, particularly for registered market makers, is complex, and not solely based on the non-transactional costs assessed by an exchange. As noted herein, specific factors include, but are not limited to: (i) an exchange's available liquidity in options series; (ii) trading functionality offered on a particular market; (iii) product offerings; (iv) customer service on an exchange; and (v) transactional pricing. Becoming a member of the exchange does not “lock” a potential member into a market or diminish the overall competition for exchange services.
In lieu of becoming a member at each options exchange, a market participant may join one exchange and elect to have their orders routed in the event that a better price is available on an away market. Nothing in the Order Protection Rule requires a firm to become a Member at—or establish connectivity to—the Exchange.
With respect to the submission of orders, Members may also choose not to purchase any connection from the Exchange, and instead rely on the port of a third party to submit an order. For example, a third-party broker-dealer Member of the Exchange may be utilized by a retail investor to submit orders into an exchange. An institutional investor may utilize a broker-dealer, a service bureau,
Non-Member third-parties, such as service bureaus and extranets, resell the Exchange's connectivity. This indirect connectivity is another viable alternative for market participants to trade on the Exchange without connecting directly to the Exchange (and thus not pay the Exchange's connectivity fees), which alternative is already being used by non-Members and further constrains the price that the Exchange is able to charge for connectivity and other access fees to its market. The Exchange notes that it could, but chooses not to, preclude market participants from reselling its connectivity. Unlike other exchanges, the Exchange also does not currently assess fees on third-party resellers on a per customer basis (
The Exchange is obligated to regulate its Members and secure access to its environment. In order to properly regulate its Members and secure the trading environment, the Exchange takes measures to ensure access is monitored and maintained with various controls. Connectivity and ports are methods utilized by the Exchange to grant Members secure access to communicate with the Exchange and exercise trading rights. When a market participant elects to be a Member, and is approved for membership by the Exchange, the Member is granted trading rights to enter orders and/or quotes into Exchange through secure connections.
Again, there is no legal or regulatory requirement that a market participant become a Member of the Exchange. This is again evidenced by the fact that one MIAX Pearl Options Market Maker terminated their MIAX Pearl Options membership effective January 1, 2023 as a direct result of the proposed connectivity and port fee changes on MIAX Pearl Options. If a market participant chooses to become a Member, they may then choose to purchase connectivity beyond the one connection that is necessary to quote or submit orders on the Exchange. Members may freely choose to rely on one or many connections, depending on their business model.
In general, the Exchange believes that exchanges, in setting fees of all types, should meet very high standards of transparency to demonstrate why each new fee or fee increase meets the Exchange Act requirements that fees be reasonable, equitably allocated, not unfairly discriminatory, and not create an undue burden on competition among members and markets. In particular, the Exchange believes that each exchange should take extra care to be able to demonstrate that these fees are based on its costs and reasonable business needs.
In proposing to charge fees for connectivity and port services, the Exchange is especially diligent in assessing those fees in a transparent way against its own aggregate costs of providing the related service, and in carefully and transparently assessing the impact on Members—both generally and in relation to other Members,
As detailed below, the Exchange recently calculated its aggregate annual costs for providing physical 10Gb ULL connectivity to the Exchange at $11,361,586 (or approximately $946,799 per month, rounded to the nearest dollar when dividing the annual cost by 12 months) and its aggregate annual costs for providing Limited Service MEI Ports at $1,799,066 (or approximately $148,255 per month, rounded to the nearest dollar when dividing the annual cost by 12 months). In order to cover the aggregate costs of providing connectivity to its users (both Members and non-Members)
In 2020, the Exchange completed a study of its aggregate costs to produce market data and connectivity (the “Cost Analysis”).
As an initial step, the Exchange determined the total cost for the Exchange and the affiliated markets for each cost driver as part of its 2023 budget review process. The 2023 budget review is a company-wide process that occurs over the course of many months, includes meetings among senior
All of these factors result in different allocation percentages among the Exchange and its affiliated markets,
The next step involves determining what portion of the cost allocated to the Exchange pursuant to the above methodology is to be allocated to each core service,
By allocating segmented costs to each core service, the Exchange was able to estimate by core service the potential margin it might earn based on different fee models. The Exchange notes that as a non-listing venue it has five primary sources of revenue that it can potentially use to fund its operations: transaction fees, fees for connectivity and port services, membership fees, regulatory fees, and market data fees. Accordingly, the Exchange must cover its expenses from these five primary sources of revenue. The Exchange also notes that as a general matter each of these sources of revenue is based on services that are interdependent. For instance, the Exchange's system for executing transactions is dependent on physical hardware and connectivity; only Members and parties that they sponsor to participate directly on the Exchange may submit orders to the Exchange; many Members (but not all) consume market data from the Exchange in order to trade on the Exchange; and the Exchange consumes market data from external sources in order to comply with regulatory obligations. Accordingly, given this interdependence, the allocation of costs to each service or revenue source required judgment of the Exchange and was weighted based on estimates of the Exchange that the Exchange believes are reasonable, as set forth below. While there is no standardized and generally accepted methodology for the allocation of an exchange's costs, the Exchange's methodology is the result of an extensive review and analysis and will be consistently applied going forward for any other potential fee proposals. In the absence of the Commission attempting to specify a methodology for the allocation of exchanges' interdependent costs, the Exchange will continue to be left with its best efforts to attempt to conduct such an allocation in a thoughtful and reasonable manner.
Through the Exchange's extensive updated Cost Analysis, which was again recently further refined, the Exchange analyzed every expense item in the Exchange's general expense ledger to determine whether each such expense relates to the provision of connectivity and port services, and, if such expense did so relate, what portion (or percentage) of such expense actually supports the provision of connectivity and port services, and thus bears a relationship that is, “in nature and closeness,” directly related to network connectivity and port services. In turn, the Exchange allocated certain costs more to physical connectivity and others to ports, while certain costs were only allocated to such services at a very low percentage or not at all, using consistent allocation methodologies as described above. Based on this analysis, the Exchange estimates that the aggregate monthly cost to provide 10Gb ULL connectivity and Limited Service MEI Port services, including both physical 10Gb connections and Limited Service MEI Ports, is $1,095,054 (utilizing the rounded numbers when dividing the annual cost for 10Gb ULL connectivity and annual cost for Limited Service MEI Ports by 12
The following chart details the individual line-item costs considered by the Exchange to be related to offering physical dedicated 10Gb ULL connectivity via an unshared network as well as the percentage of the Exchange's overall costs that such costs represent for each cost driver (
Below are additional details regarding each of the line-item costs considered by the Exchange to be related to offering physical 10Gb ULL connectivity. While some costs were attempted to be allocated as equally as possible among the Exchange and its affiliated markets, the Exchange notes that some of its cost allocation percentages for certain cost drivers differ when compared to the same cost drivers for the Exchange's affiliated markets in their similar proposed fee changes for connectivity and ports. This is because the Exchange's cost allocation methodology utilizes the actual projected costs of the Exchange (which are specific to the Exchange, and are independent of the costs projected and utilized by the Exchange's affiliated markets) to determine its actual costs, which may vary across the Exchange and its affiliated markets based on factors that are unique to each marketplace. The Exchange provides additional explanation below (including the reason for the deviation) for the significant differences.
The Exchange notes that it and its affiliated markets have 184 employees (excluding employees at non-options/equities exchange subsidiaries of Miami International Holdings, Inc. (“MIH”), the holding company of the Exchange and its affiliated markets), and each department leader has direct knowledge of the time spent by each employee with respect to the various tasks necessary to operate the Exchange. Specifically, twice a year, and as needed with additional new hires and new project initiatives, in consultation with employees as needed, managers and department heads assign a percentage of time to every employee and then allocate that time amongst the Exchange and its affiliated markets to determine each market's individual Human Resources expense. Then, managers and department heads assign a percentage of each employee's time allocated to the Exchange into buckets including network connectivity, ports, market data, and other exchange services. This process ensures that every employee is 100% allocated, ensuring there is no double counting between the Exchange and its affiliated markets.
For personnel costs (Human Resources), the Exchange calculated an allocation of employee time for employees whose functions include providing and maintaining physical connectivity and performance thereof (primarily the Exchange's network infrastructure team, which spends most of their time performing functions necessary to provide physical connectivity). As described more fully above, the Exchange's parent company allocates costs to the Exchange and its affiliated markets and then a portion of the Human Resources costs allocated to the Exchange is then allocated to connectivity. From that portion allocated to the Exchange that applied to connectivity, the Exchange then allocated a weighted average of 42.4% of each employee's time from the above group. The Exchange also allocated Human Resources costs to provide physical connectivity to a limited subset of personnel with ancillary functions related to establishing and maintaining such connectivity (such as information security, sales, membership, and finance personnel). The Exchange allocated cost on an employee-by-employee basis (
The estimates of Human Resources cost were therefore determined by consulting with such department leaders, determining which employees are involved in tasks related to providing physical connectivity, and confirming that the proposed allocations were reasonable based on an understanding of the percentage of time such employees devote to those tasks. This includes personnel from the Exchange departments that are predominately involved in providing 1Gb and 10Gb ULL connectivity: Business Systems Development, Trading Systems Development, Systems Operations and Network Monitoring, Network and Data Center Operations, Listings, Trading Operations, and Project Management. Again, the Exchange allocated 42.4% of each of their employee's time assigned to the Exchange for 10Gb ULL connectivity, as stated above. Employees from these departments perform numerous functions to support 10Gb ULL connectivity, such as the installation, re-location, configuration, and maintenance of 10Gb ULL connections and the hardware they access. This hardware includes servers, routers, switches, firewalls, and monitoring devices. These employees also perform software upgrades, vulnerability assessments, remediation and patch installs, equipment configuration and hardening, as well as performance and capacity management. These employees also engage in research and development analysis for equipment
Lastly, the Exchange notes that senior level executives' time was only allocated to the 10Gb ULL connectivity related Human Resources costs to the extent that they are involved in overseeing tasks related to providing physical connectivity. The Human Resources cost was calculated using a blended rate of compensation reflecting salary, equity and bonus compensation, benefits, payroll taxes, and 401(k) matching contributions.
The Connectivity cost driver includes external fees paid to connect to other exchanges and third parties, cabling and switches required to operate the Exchange. The Connectivity cost driver is more narrowly focused on technology used to complete connections to the Exchange and to connect to external markets. The Exchange notes that its connectivity to external markets is required in order to receive market data to run the Exchange's matching engine and basic operations compliant with existing regulations, primarily Regulation NMS.
The Exchange relies on various connectivity providers for connectivity to the entire U.S. options industry, and infrastructure services for critical components of the network that are necessary to provide and maintain its System Networks and access to its System Networks via 10Gb ULL connectivity. Specifically, the Exchange utilizes connectivity providers to connect to other national securities exchanges and the Options Price Reporting Authority (“OPRA”). The Exchange understands that these service providers provide services to most, if not all, of the other U.S. exchanges and other market participants. Connectivity provided by these service providers is critical to the Exchanges daily operations and performance of its System Networks to which market participants connect to via 10Gb ULL connectivity. Without these services providers, the Exchange would not be able to connect to other national securities exchanges, market data providers or OPRA and, therefore, would not be able to operate and support its System Networks. The Exchange does not employ a separate fee to cover its connectivity provider expense and recoups that expense, in part, by charging for 10Gb ULL connectivity.
The next cost driver consists of internet Services and external market data. The internet services cost driver includes third-party service providers that provide the internet, fiber and bandwidth connections between the Exchange's networks, primary and secondary data centers, and office locations in Princeton and Miami.
External market data includes fees paid to third parties, including other exchanges, to receive market data. The Exchange includes external market data fee costs towards the provision of 10Gb ULL connectivity because such market data is necessary for certain services related to connectivity, including pre-trade risk checks and checks for other conditions (
The Exchange relies on various content service providers for data feeds for the entire U.S. options industry, as well as content for critical components of the network that are necessary to provide and maintain its System Networks and access to its System Networks via 10Gb ULL connectivity. Specifically, the Exchange utilizes content service providers to receive market data from OPRA, other exchanges and market data providers. The Exchange understands that these service providers provide services to most, if not all, of the other U.S. exchanges and other market participants. Market data provided these service providers is critical to the Exchanges daily operations and performance of its System Networks to which market participants connect to via 10Gb ULL connectivity. Without these services providers, the Exchange would not be able to receive market data and, therefore, would not be able to operate and support its System Networks. The Exchange does not employ a separate fee to cover its content service provider expense and recoups that expense, in part, by charging for 10Gb ULL connectivity.
Lastly, the Exchange notes that the actual dollar amounts allocated as part of the second step of the 2023 budget process differ among the Exchange and its affiliated markets for the internet Services and External Market Data cost driver, even though, but for the Exchange, the allocation percentages are generally consistent across markets (
Data Center costs includes an allocation of the costs the Exchange incurs to provide physical connectivity
Hardware and Software Licenses includes hardware and software licenses used to operate and monitor physical assets necessary to offer physical connectivity to the Exchange.
All physical assets, software, and hardware used to provide 10Gb ULL connectivity, which also includes assets used for testing and monitoring of Exchange infrastructure, were valued at cost, and depreciated or leased over periods ranging from three to five years. Thus, the depreciation cost primarily relates to servers necessary to operate the Exchange, some of which are owned by the Exchange and some of which are leased by the Exchange in order to allow efficient periodic technology refreshes. The Exchange also included in the Depreciation cost driver certain budgeted improvements that the Exchange intends to capitalize and depreciate with respect to 10Gb ULL connectivity in the near-term. As with the other allocated costs in the Exchange's updated Cost Analysis, the Depreciation cost was therefore narrowly tailored to depreciation related to 10Gb ULL connectivity. As noted above, the Exchange allocated 63.8% of its allocated depreciation costs to providing physical 10Gb ULL connectivity.
The Exchange also notes that this allocation differs from its affiliated markets due to a number of factors, such as the age of physical assets and software (
Finally, as with other exchange products and services, a portion of general shared expenses was allocated to overall physical connectivity costs. These general shared costs are integral to exchange operations, including its ability to provide physical connectivity. Costs included in general shared expenses include office space and office expenses (
The Exchange employed a process to determine a reasonable percentage to allocate general shared expenses to 10Gb ULL connectivity pursuant to its multi-layered allocation process. First, general expenses were allocated among the Exchange and affiliated markets as described above. Then, the general shared expense assigned to the Exchange was allocated across core services of the Exchange, including connectivity. Then, these costs were further allocated to sub-categories within the final categories,
The Exchange notes that the 51.3% allocation of general shared expenses for physical 10Gb ULL connectivity is higher than that allocated to general shared expenses for Limited Service MEI Ports. This is based on its allocation methodology that weighted costs attributable to each core service. While physical connectivity has several areas where certain tangible costs are heavily weighted towards providing such service (
After determining the approximate allocated monthly cost related to 10Gb connectivity, the total monthly cost for 10Gb ULL connectivity of $946,799 was divided by the number of physical 10Gb ULL connections the Exchange maintained at the time that proposed pricing was determined (102), to arrive at a cost of approximately $9,282 per month, per physical 10Gb ULL connection. Due to the nature of this particular cost, this allocation methodology results in an allocation among the Exchange and its affiliated markets based on set quantifiable criteria,
The following chart details the individual line-item costs considered by the Exchange to be related to offering Limited Service MEI Ports as well as the percentage of the Exchange's overall costs such costs represent for such area (
Below are additional details regarding each of the line-item costs considered by the Exchange to be related to offering Limited Service MEI Ports. While some costs were attempted to be allocated as equally as possible among the Exchange and its affiliated markets, the Exchange notes that some of its cost allocation percentages for certain cost drivers differ when compared to the same cost drivers described by the Exchange's affiliated markets in their similar proposed fee changes for connectivity and ports. This is because the Exchange's cost allocation methodology utilizes the actual projected costs of the Exchange (which are specific to the Exchange, and are independent of the costs projected and utilized by the Exchange's affiliated markets) to determine its actual costs, which may vary across the Exchange and its affiliated markets based on factors that are unique to each marketplace. The Exchange provides additional explanation below (including the reason for the deviation) for the significant differences.
With respect to Limited Service MEI Ports, the Exchange calculated Human Resources cost by taking an allocation of employee time for employees whose functions include providing Limited Service MEI Ports and maintaining performance thereof (including a broader range of employees such as technical operations personnel, market operations personnel, and software engineering personnel) as well as a limited subset of personnel with ancillary functions related to maintaining such connectivity (such as sales, membership, and finance personnel). Just as described above for 10Gb ULL connectivity, the estimates of Human Resources cost were again determined by consulting with department leaders, determining which employees are involved in tasks related to providing Limited Service MEI Ports and maintaining performance thereof, and confirming that the proposed allocations were reasonable based on an understanding of the percentage of their time such employees devote to tasks related to providing Limited Service MEI Ports and maintaining performance thereof. This includes personnel from the following Exchange departments that are predominately involved in providing Limited Service MEI Ports: Business Systems Development, Trading Systems Development, Systems Operations and Network Monitoring, Network and Data Center Operations, Listings, Trading Operations, and Project Management. The Exchange notes that senior level executives were allocated Human Resources costs to the extent they are involved in overseeing tasks specifically related to providing Limited Service MEI Ports. Senior level executives were only allocated Human Resources costs to the extent that they are involved in managing personnel responsible for tasks integral to providing and maintaining Limited Service MEI Ports. The Human Resources cost was again calculated using a blended rate of compensation reflecting salary, equity and bonus compensation, benefits, payroll taxes, and 401(k) matching contributions.
The Connectivity cost includes external fees paid to connect to other exchanges and cabling and switches, as described above.
The next cost driver consists of internet services and external market data. Internet services includes third-party service providers that provide the internet, fiber and bandwidth connections between the Exchange's networks, primary and secondary data centers, and office locations in Princeton and Miami. For purposes of Limited Service MEI Ports, the Exchange also includes a portion of its costs related to external market data. External market data includes fees paid to third parties, including other exchanges, to receive and consume market data from other markets. The Exchange includes external market data costs towards the provision of Limited Service MEI Ports because such market data is necessary (in addition to physical connectivity) to offer certain services related to such ports, such as validating orders on entry against the NBBO and checking for other conditions (
The Exchange notes that the allocation for the internet Services and External Market Data cost driver is greater than that of its affiliate, MIAX Pearl Options, as MIAX Emerald allocated 3.2% of its internet Services and External Market Data expense towards Limited Service MEI Ports, while MIAX Pearl Options allocated 1.4% to its Full Service MEO Ports for the same cost driver. The allocation percentages set forth above differ because they directly correspond with the number of applicable ports utilized on each exchange. For May 2023, MIAX Emerald Market Makers utilized 1,017 Limited Service MEI ports and MIAX Market Makers utilized 1,770 Limited Service MEI ports. When compared to Full Service Port (Bulk and Single) usage, for May 2023, MIAX Pearl Options Members utilized only 384 Full Service MEO Ports (Bulk and Single), far fewer than number of Limited Service MEI Ports utilized by Market Makers on MIAX and MIAX Emerald, thus resulting in a smaller cost allocation. There is increased cost associated with supporting a higher number of ports (requiring more hardware and other technical infrastructure and internet Service), thus the Exchange allocates a higher percentage of expense than MIAX Pearl Options, which has a lower port count.
Data Center costs includes an allocation of the costs the Exchange incurs to provide Limited Service MEI Ports in the third-party data centers where it maintains its equipment as well as related costs for market data to then enter the Exchange's system via Limited Service MEI Ports (the Exchange does not own the Primary Data Center or the Secondary Data Center, but instead, leases space in data centers operated by third parties).
Hardware and Software Licenses includes hardware and software licenses used to monitor the health of the order entry services provided by the Exchange, as described above.
The Exchange notes that this allocation is greater than its affiliate, MIAX Pearl Options, as MIAX Emerald allocated 3.2% of its Hardware and Software Maintenance and License expense towards Limited Service MEI Ports, while MIAX Pearl Options allocated 1.4% to its Full Service MEO Ports (Bulk and Single) for the same category of expense. The allocation percentages set forth above differ because they correspond with the number of applicable ports utilized on each exchange. For May 2023, MIAX Market Makers utilized 1,770 Limited Service MEI ports and MIAX Emerald Market Makers utilized 1,017 Limited Service MEI Ports. When compared to Full Service Port (Bulk and Single) usage, for May 2023, MIAX Pearl Options Members utilized only 384 Full Service MEO Ports (Bulk and Single), far fewer than number of Limited Service MEI Ports utilized by Market Makers on MIAX and MIAX Emerald, thus resulting in a smaller cost allocation. There is increased cost associated with supporting a higher number of ports (requiring more hardware and other technical infrastructure), thus the Exchange allocates a higher percentage of expense than MIAX Pearl Options, which has a lower port count.
The vast majority of the software the Exchange uses to provide Limited Service MEI Ports has been developed in-house and the cost of such development, which takes place over an extended period of time and includes not just development work, but also quality assurance and testing to ensure the software works as intended, is depreciated over time once the software is activated in the production environment. Hardware used to provide Limited Service MEI Ports includes equipment used for testing and monitoring of order entry infrastructure and other physical equipment the Exchange purchased and is also depreciated over time.
All hardware and software, which also includes assets used for testing and monitoring of order entry infrastructure, were valued at cost, depreciated or leased over periods ranging from three to five years. Thus, the depreciation cost primarily relates to servers necessary to operate the Exchange, some of which is owned by the Exchange and some of which is leased by the Exchange in order to allow efficient periodic technology refreshes. The Exchange allocated 3.7% of all depreciation costs to providing Limited Service MEI Ports. The Exchange allocated depreciation costs for depreciated software necessary to operate the Exchange because such software is related to the provision of Limited Service MEI Ports. As with the other allocated costs in the Exchange's updated Cost Analysis, the Depreciation cost driver was therefore narrowly tailored to depreciation related to Limited Service MEI Ports.
The Exchange notes that this allocation differs from its affiliated markets due to a number of factors, such as the age of physical assets and software (
Finally, a portion of general shared expenses was allocated to overall Limited Service MEI Ports costs as without these general shared costs the Exchange would not be able to operate in the manner that it does and provide Limited Service MEI Ports. The costs included in general shared expenses include general expenses of the Exchange, including office space and office expenses (
Lastly, the Exchange notes that this allocation is greater than its affiliate, MIAX Pearl Options, as MIAX Emerald allocated 10.3% of its Allocated Shared Expense towards Limited Service MEI Ports, while MIAX Pearl Options allocated 3.6% to its Full Service MEO Ports (Bulk and Single) for the same category of expense. The allocation percentages set forth above differ because they correspond with the number of applicable ports utilized on each exchange. For May 2023, MIAX Market Makers utilized 1,770 Limited Service MEI ports and MIAX Emerald Market Makers utilized 1,017 Limited Service MEI Ports. When compared to Full Service Port (Bulk and Single) usage, for May 2023, MIAX Pearl Options Members utilized only 384 Full Service MEO Ports (Bulk and Single), far fewer than number of Limited Service MEI Ports utilized by Market Makers on MIAX Emerald, thus resulting in a smaller cost allocation. There is increased cost associated with supporting a higher number of ports (requiring more hardware and other technical infrastructure), thus the Exchange allocates a higher percentage of expense than MIAX Pearl Options which has a lower port count.
Based on May 2023 data, the total monthly cost allocated to Limited Service MEI Ports of $148,255 was divided by the total number of Limited Service MEI Ports (including the two free Limited Service MEI Ports per matching engine that each Member receives) the Exchange maintained at the time that proposed pricing was determined (1,017), to arrive at a cost of approximately $145 per month, per charged Limited Service MEI Port. In the prior filings, the Exchange did not include the expense of maintaining the two free Limited Service MEI Ports per matching engine that each Member receives in this paragraph but did include them in the total expense amounts. The total number of Limited Service MEI Ports that the Exchange does not charge for is 741 and amounts to a total expense of $107,445 per month to the Exchange.
In conducting its Cost Analysis, the Exchange did not allocate any of its expenses in full to any core services (including physical connectivity or Limited Service MEI Ports) and did not double-count any expenses. Instead, as described above, the Exchange allocated applicable cost drivers across its core services and used the same Cost Analysis to form the basis of this proposal and the filings the Exchange submitted proposing fees for proprietary data feeds offered by the Exchange. For instance, in calculating the Human Resources expenses to be allocated to physical connections based upon the above described methodology, the Exchange has a team of employees dedicated to network infrastructure and with respect to such employees the Exchange allocated network infrastructure personnel with a high percentage of the cost of such personnel (42.4%) given their focus on functions necessary to provide physical connections. The salaries of those same personnel were allocated only 8.0% to Limited Service MEI Ports and the remaining 49.6% was allocated to 1Gb connectivity, other port services, transaction services, membership services and market data. The Exchange did not allocate any other Human Resources expense for providing physical connections to any other employee group, outside of a smaller allocation of 19.8% for 10Gb ULL connectivity or 19.9% for the entire network, of the cost associated with certain specified personnel who work closely with and support network infrastructure personnel. In contrast, the Exchange allocated much smaller percentages of costs (5% or less) across a wider range of personnel groups in order to allocate Human Resources costs to providing Limited Service MEI Ports. This is because a much wider range of personnel are involved in functions necessary to offer, monitor and maintain Limited Service MEI Ports but the tasks necessary to do so are not a primary or full-time function.
In total, the Exchange allocated 28.1% of its personnel costs to providing 10Gb ULL and 1Gb connectivity and 5.9% of its personnel costs to providing Limited Service MEI Ports, for a total allocation of 34% Human Resources expense to provide these specific connectivity and port services. In turn, the Exchange allocated the remaining 66% of its Human Resources expense to membership services, transaction services, other port services and market data. Thus, again, the Exchange's allocations of cost across core services were based on real costs of operating the Exchange and were not double-counted across the core services or their associated revenue streams.
As another example, the Exchange allocated depreciation expense to all core services, including physical connections and Limited Service MEI Ports, but in different amounts. The Exchange believes it is reasonable to allocate the identified portion of such expense because such expense includes the actual cost of the computer
The Exchange notes that its revenue estimates are based on projections across all potential revenue streams and will only be realized to the extent such revenue streams actually produce the revenue estimated. The Exchange does not yet know whether such expectations will be realized. For instance, in order to generate the revenue expected from connectivity, the Exchange will have to be successful in retaining existing clients that wish to maintain physical connectivity and/or Limited Service MEI Ports or in obtaining new clients that will purchase such services. Similarly, the Exchange will have to be successful in retaining a positive net capture on transaction fees in order to realize the anticipated revenue from transaction pricing. The Exchange notes that the Cost Analysis is based on the Exchange's 2023 fiscal year of operations and projections. It is possible, however, that actual costs may be higher or lower. To the extent the Exchange sees growth in use of connectivity services it will receive additional revenue to offset future cost increases.
However, if use of connectivity services is static or decreases, the Exchange might not realize the revenue that it anticipates or needs in order to cover applicable costs. Accordingly, the Exchange is committing to conduct a one-year review after implementation of these fees. The Exchange expects that it may propose to adjust fees at that time, to increase fees in the event that revenues fail to cover costs and a reasonable mark-up of such costs. Similarly, the Exchange may propose to decrease fees in the event that revenue materially exceeds our current projections. In addition, the Exchange will periodically conduct a review to inform its decision making on whether a fee change is appropriate (
The proposed fees will allow the Exchange to cover certain costs incurred by the Exchange associated with providing and maintaining necessary hardware and other network infrastructure as well as network monitoring and support services; without such hardware, infrastructure, monitoring and support the Exchange would be unable to provide the connectivity and port services. Much of the cost relates to monitoring and analysis of data and performance of the network via the subscriber's connection(s). The above cost, namely those associated with hardware, software, and human capital, enable the Exchange to measure network performance with nanosecond granularity. These same costs are also associated with time and money spent seeking to continuously improve the network performance, improving the subscriber's experience, based on monitoring and analysis activity. The Exchange routinely works to improve the performance of the network's hardware and software. The costs associated with maintaining and enhancing a state-of-the-art exchange network is a significant expense for the Exchange, and thus the Exchange believes that it is reasonable and appropriate to help offset those costs by amending fees for connectivity services. Subscribers, particularly those of 10Gb ULL connectivity, expect the Exchange to provide this level of support to connectivity so they continue to receive the performance they expect. This differentiates the Exchange from its competitors. As detailed above, the Exchange has five primary sources of revenue that it can potentially use to fund its operations: transaction fees, fees for connectivity services, membership and regulatory fees, and market data fees. Accordingly, the Exchange must cover its expenses from these five primary sources of revenue.
The Exchange's Cost Analysis estimates the annual cost to provide 10Gb ULL connectivity services will equal $11,361,586. Based on current 10Gb ULL connectivity services usage, the Exchange would generate annual revenue of approximately $16,524,000. The Exchange believes this represents a modest profit of 31% when compared to the cost of providing 10Gb ULL connectivity services which could decrease over time.
The Exchange's Cost Analysis estimates the annual cost to provide Limited Service MEI Port services will equal $1,779,066. Based on current Limited Service MEI Port services usage, the Exchange would generate annual revenue of approximately $2,809,200. The Exchange believes this would result in an estimated profit margin of 37% after calculating the cost of providing Limited Service MEI Port services, which profit margin could decrease over time.
Based on the above discussion, the Exchange believes that even if the Exchange earns the above revenue or incrementally more or less, the proposed fees are fair and reasonable because they will not result in pricing that deviates from that of other exchanges or a supra-competitive profit, when comparing the total expense of the
The Exchange also notes that this the resultant profit margin differs slightly from the profit margins set forth in similar fee filings by its affiliated markets. This is not atypical among exchanges and is due to a number of factors that differ between these four markets, including: different market models, market structures, and product offerings (equities, options, price-time, pro-rata, simple, and complex); different pricing models; different number of market participants and connectivity subscribers; different maintenance and operations costs, as described in the cost allocation methodology above; different technical architecture (
Further, the Exchange proposes to charge rates that are comparable to, or lower than, similar fees for similar products charged by competing exchanges. For example, for 10Gb ULL connectivity, the Exchange proposes a lower fee than the fee charged by Nasdaq for its comparable 10Gb Ultra fiber connection ($13,500 per month for the Exchange vs. $15,000 per month for Nasdaq).
The Exchange operated at a cumulative net annual loss from the time it launched operations in 2019 through fiscal year 2021.
The Exchange notes that its revenue estimate is based on projections and will only be realized to the extent customer activity produces the revenue estimated. As a competitor in the hyper-competitive exchange environment, and an exchange focused on driving competition, the Exchange does not yet know whether such projections will be realized. For instance, in order to generate the revenue expected from 10Gb ULL connectivity and Limited Service MEI Ports, the Exchange will have to be successful in retaining existing clients that wish to utilize 10Gb ULL connectivity and Limited Service MEI Ports and/or obtaining new clients that will purchase such access. To the extent the Exchange is successful in encouraging new clients to utilize 10Gb ULL connectivity and Limited Service MEI Ports, the Exchange does not believe it should be penalized for such success. To the extent the Exchange has mispriced and experiences a net loss in connectivity clients or in transaction activity, the Exchange could experience a net reduction in revenue. While the Exchange is supportive of transparency around costs and potential margins (applied across all exchanges), as well as periodic review of revenues and applicable costs (as discussed below), the Exchange does not believe that these estimates should form the sole basis of whether or not a proposed fee is reasonable or can be adopted. Instead, the Exchange believes that the information should be used solely to confirm that an Exchange is not earning—or seeking to earn—supra-competitive profits. The Exchange believes the Cost Analysis and related projections in this filing demonstrate this fact.
The Exchange is owned by a holding company that is the parent company of four exchange markets and, therefore, the Exchange and its affiliated markets must allocate shared costs across all of those markets accordingly, pursuant to the above-described allocation methodology. In contrast, the Investors Exchange LLC (“IEX”) and MEMX, which are currently each operating only one exchange, in their recent non-transaction fee filings allocate the entire amount of that same cost to a single exchange. This can result in lower profit margins for the non-transaction fees proposed by IEX and MEMX because the single allocated cost does not experience the efficiencies and synergies that result from sharing costs across multiple platforms. The Exchange and its affiliated markets often share a single cost, which results in cost efficiencies that can cause a broader gap between the allocated cost amount and projected revenue, even though the fee levels being proposed are lower or competitive with competing markets (as described above). To the extent that the application of a cost-based standard results in Commission Staff making determinations as to the appropriateness of certain profit margins, the Exchange believes that Commission Staff should also consider whether the proposed fee level is comparable to, or competitive with, the same fee charged by competing exchanges and how different cost allocation methodologies (such as across multiple markets) may result in different profit margins for comparable fee levels. Further, if Commission Staff is making determinations as to appropriate profit margins in their approval of exchange fees, the Exchange believes that the Commission should be clear to all market participants as to what they have determined is an appropriate profit margin and should
Further, as is reflected in the proposal, the Exchange continuously and aggressively works to control its costs as a matter of good business practice. A potential profit margin should not be evaluated solely on its size; that assessment should also consider cost management and whether the ultimate fee reflects the value of the services provided. For example, a profit margin on one exchange should not be deemed excessive where that exchange has been successful in controlling its costs, but not excessive on another exchange where that exchange is charging comparable fees but has a lower profit margin due to higher costs. Doing so could have the perverse effect of not incentivizing cost control where higher costs alone could be used to justify fees increases.
The Exchange believes that the proposed fees are reasonable, fair, equitable, and not unfairly discriminatory because they are designed to align fees with services provided and will apply equally to all subscribers.
The Exchange believes that the proposed fees are equitably allocated among users of the network connectivity and port alternatives, as the users of 10Gb ULL connections consume substantially more bandwidth and network resources than users of 1Gb ULL connection. Specifically, the Exchange notes that 10Gb ULL connection users account for more than 99% of message traffic over the network, driving other costs that are linked to capacity utilization, as described above, while the users of the 1Gb ULL connections account for less than 1% of message traffic over the network. In the Exchange's experience, users of the 1Gb connections do not have the same business needs for the high-performance network as 10Gb ULL users.
The Exchange's high-performance network and supporting infrastructure (including employee support), provides unparalleled system throughput with the network ability to support access to several distinct options markets. To achieve a consistent, premium network performance, the Exchange must build out and maintain a network that has the capacity to handle the message rate requirements of its most heavy network consumers. These billions of messages per day consume the Exchange's resources and significantly contribute to the overall network connectivity expense for storage and network transport capabilities. The Exchange must also purchase additional storage capacity on an ongoing basis to ensure it has sufficient capacity to store these messages to satisfy its record keeping requirements under the Exchange Act.
The Exchange designed the proposed tiered-pricing structure to link fees to the number of connections a firm purchases due to the strong correlation between number of connections and related cost burdens imposed upon the Exchange from the largest connection (Limited MEI Ports) users. This is explicitly designed to link fees to related costs imposed on the exchange. Market Makers that purchase more connections cause significantly greater costs and expenses to the Exchange, whereas the opposite is also true. With this in mind, the Exchange proposes (a) no fee or lower fees for Market Makers who utilize fewer Limited Service MEI Ports since those Market Makers generally tend to send the fewest number of orders and messages over those connections, imposing substantially lower costs;
The Exchange believes that the proposed fees are equitably allocated among users of the network connectivity alternatives because it is specifically designed to ensure that those users that create the highest costs burden on the Exchange pay the highest fees. As is discussed below, the cost burden associated with Market Makers that use the maximum number of Limited Service MEI ports is significantly higher than costs associated with Market Makers that use fewer of these ports.
As noted above, users with the greatest number of Limited Service MEI Ports consume a disproportionate amount of bandwidth and network resources. Specifically, for 10Gb ULL connectivity, Market Makers who take the maximum number of Limited Service MEI Ports account for greater than 99% of message traffic over the network, while Market Makers with fewer Limited Service MEI Ports account for less than 1% of message traffic over the network. In the Exchange's experience, Market Makers who only utilize the two free Limited Service MEI Ports do so primarily because of the trade-through requirements under Regulation NMS or best execution obligations and do not have the same business need for the high performance network solutions required by Market Makers who take the maximum amount of Limited Service MEI Ports.
The Exchange's high performance network solutions and supporting infrastructure (including employee support) provide increased system throughput and the capacity to handle approximately 18 million quote messages per second. This is important for the efficient operation of the Exchange and to ensure system resiliency in times of stress (abnormally high capacity demand). For example, based on May 2023 trading results, the Exchange handled more than 8.6 billion quotes on an average day, and more than 189 billion quotes in an average month. Of that total, Market Makers with the maximum amount of Limited Service MEI Ports generated more than 111 billion quotes (and more than 5 billion quotes on an average day), and Market Makers who utilized only the two free Limited Service MEI Ports per matching engine generated approximately 40 billion quotes (and approximately 1.8 billion quotes on an average day). Also for May 2023, Market
To achieve consistent, premium network performance, the Exchange must build and maintain a network that has the capacity to handle the message rate requirements of its heaviest network consumers during anticipated peak market conditions. The resultant need to support billions of messages per day consume the Exchange's resources and significantly contribute to the overall network connectivity expense for storage and network transport capabilities. This need also requires the Exchange to purchase additional storage capacity on an ongoing basis to ensure it has sufficient capacity to store these messages as part of it surveillance program and to satisfy its record keeping requirements under the Exchange Act.
According to the statistics provided above for May 2023, Market Makers with the maximum amount of Limited Service MEI Ports sent almost twice as many orders as those that utilize the minimal amount of Limited Service MEI Ports. Due to latency consideration, those Market Makers typically send the same order over multiple Limited Service MEI Ports to attempt to execute against the same contra-side order resting on the Book. This results in a disproportionate number of messages being returned to the Market Maker notifying them which order did or did not result in an execution. This results in an increased amount of message traffic generated by Market Makers who utilize the maximum amount of Limited Service MEI Ports. These Market Makers use a disproportionate amount of System capacity and, therefore, put greater strain on the Exchange's network and other resources discussed below. This is due to higher order to trade ratios that results in increased message traffic that is not recouped via a separate Exchange fee based on each message sent by a Market Maker or other similar fee. The Exchange must purchase and maintain additional storage capacity on an ongoing basis to ensure it has sufficient capacity to store these messages as part of it surveillance program and to satisfy its record keeping requirements under the Exchange Act.
The following presents another example of how the cost burden associated with Members that use the maximum number of Limited Service MEI ports is significantly higher than costs associated with Members that use fewer of these ports. Members with the maximum amount of Limited Service MEI Ports frequently add, drop, or rebalance connections mid-month to determine which connections have the least latency (and engage in the same practice with Limited Service MEI Ports). This requires constant System expansion to meet Market Maker demand for additional Limited Service MEI Ports and results in limited available System headroom,
Finally, charging an incrementally higher fee (above the first two that are provided free of charge) to firms that choose to purchase more Limited Service MEI Ports does not provide those firms with any competitive advantage or incentivize firms to purchase additional Limited Service MEI Ports. Certain firms choose to purchase additional Limited Service MEI Ports based on their own particular trading/quoting strategies and, if anything, higher fees act as a disincentive for inefficient and excessive use of Exchange bandwidth and capacity. The Exchange notes that firms may continue to choose to only utilize the two free Limited Service MEI Ports to accommodate their own trading/quoting strategies, business models, and for Market Makers, to meet their quoting obligations. The proposed pricing structure is designed to address the above described increased pull on Exchange resources by firms that choose to purchase the maximum number of Limited Service MEI Ports and to incentivize efficient port usage.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange believes the proposed fees will not result in any burden on intra-market competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed fees will allow the Exchange to recoup some of its costs in providing 10Gb ULL connectivity and Limited Service MEI Ports at below market rates to market participants since the Exchange launched operations. As described above, the Exchange operated at a cumulative net annual loss since its launch in 2019 through 2021
Further, the Exchange does not believe that the proposed fee increase for the 10Gb ULL connection change would place certain market participants at the Exchange at a relative disadvantage compared to other market participants or affect the ability of such market participants to compete. As is the case with the current proposed flat fee, the proposed fee would apply uniformly to all market participants regardless of the number of connections they choose to purchase. The proposed fee does not favor certain categories of market participants in a manner that would impose an undue burden on competition.
The Exchange does not believe that the proposed rule change would place certain market participants at the Exchange at a relative disadvantage compared to other market participants or affect the ability of such market participants to compete. In particular, Exchange personnel has been informally discussing potential fees for connectivity services with a diverse group of market participants that are connected to the Exchange (including large and small firms, firms with large connectivity service footprints and small connectivity service footprints, as well as extranets and service bureaus) for several months leading up to that time. The Exchange does not believe the proposed fees for connectivity services would negatively impact the ability of Members, non-Members (extranets or service bureaus), third-parties that purchase the Exchange's connectivity and resell it, and customers of those resellers to compete with other market participants or that they are placed at a disadvantage.
The Exchange does anticipate, however, that some market participants may reduce or discontinue use of connectivity services provided directly by the Exchange in response to the proposed fees. In fact, as mentioned above, one MIAX Pearl Options Market Maker terminated their MIAX Pearl Options membership on January 1, 2023 as a direct result of the similar proposed fee changes by MIAX Pearl Options.
Lastly, the Exchange does not believe its proposal to implement incrementally higher fees for those that purchase more Limited Service MEI Ports will place certain market participants at a relative disadvantage to other market participants because those with the greatest number of Limited Service MEI Ports tend generate a disproportionate amount of messages and order traffic, usually billions per day across the Exchange, resulting in greater demands and additional burdens on Exchange resources (as described above). The firms that purchase numerous Limited Service MEI Ports do so for competitive reasons and choose to utilize numerous connections based on their business needs, which include a desire to attempt to access the market quicker using the lowest latency connections. These firms are generally engaged in sending liquidity removing orders to the Exchange and seek to add more connections to competitively access resting liquidity. All firms purchase the amount of Limited Service MEI Ports they require based on their own business decisions and similarly situated firms are subject to the same fees.
The Exchange also does not believe that the proposed rule change and price increase will result in any burden on inter-market competition that is not necessary or appropriate in furtherance of the purposes of the Act. As this is a fee increase, arguably if set too high, this fee would make it easier for other exchanges to compete with the Exchange. Only if this were a substantial fee decrease could this be considered a form of predatory pricing. In contrast, the Exchange believes that, without this fee increase, we are potentially at a competitive disadvantage to certain other exchanges that have in place higher fees for similar services. As we have noted, the Exchange believes that connectivity fees can be used to foster more competitive transaction pricing and additional infrastructure investment and there are other options markets of which market participants may connect to trade options at higher rates than the Exchange's. Accordingly, the Exchange does not believe its proposed fee changes impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
In conclusion, as discussed thoroughly above, the Exchange regrettably believes that the application of the Revised Review Process and Staff Guidance has adversely affected inter-market competition among legacy and non-legacy exchanges by impeding the ability of non-legacy exchanges to adopt or increase fees for their market data and access services (including connectivity and port products and services) that are on parity or commensurate with fee levels previously established by legacy exchanges. Since the adoption of the Revised Review Process and Staff Guidance, and even more so recently, it has become extraordinarily difficult to adopt or increase fees to generate revenue necessary to invest in systems, provide innovative trading products and solutions, and improve competitive standing to the benefit of non-legacy exchanges' market participants. Although the Staff Guidance served an
The Exchange received one comment letter on the Initial Proposal, one comment letter on the Second Proposal, one comment letter on the Third Proposal, and one comment letter on the Fourth Proposal, all from the same commenter.
The foregoing rule change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act,
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1)
The Exchange proposes to amend the Connectivity Fee Schedule to provide an alternative procedure by which the Exchange can allocate power in the Mahwah Data Center via deposit-guaranteed orders from Users made within a 90-day “Ordering Window.” The proposed change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of,
The Exchange proposes to amend the Connectivity Fee Schedule to provide an alternative procedure by which the Exchange can allocate power in the Mahwah Data Center (“MDC”)
Shortly after the onset of the Covid-19 pandemic, the Exchange began experiencing unprecedented User
In 2021 and 2022, the Exchange expanded the amount of space and power available in the MDC by opening a new colocation hall (
ICE is currently expanding the amount of colocation space and power available at the MDC. ICE is already developing a new colocation hall (
ICE proposes this rule change to address two issues posed by the current situation. First, while the development of Hall 5 is underway, ICE must also evaluate whether customer demand would support additional expansion projects to provide further power. ICE must anticipate future demand now because each colocation expansion project is a significant capital project requiring long lead times, especially given current supply-chain constraints on equipment, and substantial up-front investment. It may be possible for ICE to leverage certain efficiencies and economies of scale by planning for future expansion now.
Yet ICE currently lacks any real indication of customers' true demands. As noted above, the current waitlist of 700 kW may represent a mere fraction of Users' true power requirements, since waitlist orders are limited to one order of 32 kW per User. On the one hand, ICE does not know whether the extra power that will be provided in Hall 5 will be enough to meet Users' needs. On the other hand, ICE cannot justify the investment of time and expense that it would take to create additional colocation space based on only casual indications of interest from customers. Without firm, guaranteed commitments from Users to purchase the power if it is made available, ICE runs the risk of underestimating or overestimating Users' true demand for power and faces the possibility of undersupplying or oversupplying space and power.
Second, the existing procedures in the Connectivity Fee Schedule are not well-tailored to allocating large amounts of power that become available all at once, such as when a new colocation hall opens. Under the existing procedures, if less than 350 kW of unallocated power is available, the Purchasing Limits in Colocation Note 6 restrict all orders to 32 kW—but any time more than 350 kW of unallocated power is available, Users can place unlimited orders that the Exchange must allocate on a first-come, first-served basis. Regarding Hall 5, the Exchange anticipates large amounts of unallocated power becoming available at several intervals. This could create a race condition in which the largest Users place early orders for many hundreds of kilowatts of power, effectively shutting out other customers with more modest power needs. The Exchange therefore believes that it needs a different procedure when allocating substantial amounts of power at one time due to a hall expansion or other similar expansion of available power.
The Exchange proposes to solve these issues by providing a temporary procedure to permit the Exchange to accept unlimited, deposit-guaranteed orders from Users for a period of 90 days (the “Ordering Window”). The Colocation Notes in the Connectivity Fee Schedule would be amended accordingly.
Based on the total power ordered by Users during the Ordering Window, ICE would gain insight into whether further expansion beyond Hall 5 is likely to be required in the future. Requiring Users to submit deposits with their orders during this Ordering Window would encourage Users to carefully assess their true power needs and would protect against Users ordering more power than they actually intend to purchase. After
Specifically, the Exchange proposes to amend the Connectivity Fee Schedule to add new Colocation Note 8, entitled “Ordering Window.”
Paragraph (a) of Colocation Note 8 would provide that the Exchange may announce, by customer notice, a 90-day Ordering Window during which the Exchange may accept orders and deposits pursuant to the terms below. Paragraph (a) would specify that if the Exchange announces an Ordering Window while the Cabinet and Power Purchasing Limits in Colocation Note 6 and/or the Cabinet and Combined Waitlist provisions in Colocation Note 7 are in effect, the terms of the Ordering Window as set out in Colocation Note 8 would temporarily supersede those terms.
Paragraph (b) of Colocation Note 8 would specify the procedures for placing orders and paying deposits during the Ordering Window. Subparagraph (1) would provide that during the Ordering Window, Users may submit orders for their anticipated power needs, subject to the following. First, a User and its Affiliates, if any, may finalize only one order for power during the Ordering Window. Second, the provision of Colocation Note 7 that prohibits the Exchange from accepting orders for more than four dedicated cabinets and/or 32 kW of power would not apply. Third, a User may submit an order during the Ordering Window even if it already has an order pending on a waitlist pursuant to Colocation Note 7.
Subparagraph (2) of paragraph (b) would provide that orders submitted during the Ordering Window are subject to deposits equal to two months' worth of the monthly recurring costs of the amount of new power ordered.
Subparagraph (3) of paragraph (b) would provide that a User may modify its order during the Ordering Window, but such modification would not be finalized until the User's signed modified order form and any additional deposit are received by the Exchange.
Paragraph (c) of Colocation Note 8 would specify the Exchange's procedure for allocating available power after the Ordering Window ends. After determining the total amount of power available to allocate, the Exchange would allocate the available power as follows. In Step 1, per subparagraph (1) of paragraph (c), the Exchange would allocate power to fill any orders on any waitlist in effect pursuant to Colocation Note 7 (
In Step 2, per subparagraph (2) of paragraph (c), the Exchange would allocate up to 32 kW of power to each User that finalized an order during the Ordering Window, subject to the following. If sufficient power is available, the Exchange would allocate 32 kW of power to each User, except that orders for less than 32 kW would be filled only up to the number of kilowatts actually ordered. If sufficient power is not available to allocate 32 kW of power to each User, the Exchange would allocate the available power equally among all Users (rounded to a whole number of kilowatts), except that no User would be allocated more kilowatts than it actually ordered. If no power remains to be allocated after Step 2, all orders finalized during the Ordering Window would be considered to be completed.
In Step 3, per subparagraph (3) of paragraph (c), if any power remains to be allocated after Step 2, the Exchange would allocate power to any orders that were not completely filled during Step 2, as follows. If sufficient power is available, the Exchange would allocate power to completely fill all remaining orders finalized during the Ordering Window. If sufficient power is not available to completely fill all such orders, the Exchange would allocate power to fill an identical percentage of each remaining order (rounded to a whole number of kilowatts). All such orders would then be considered completed.
Paragraph (d) of Colocation Note 8 would specify that any orders received by the Exchange after the end of the Ordering Window would not be included in the allocation process described in Colocation Note 8. Such orders would be subject to the terms of Colocation Notes 6 and 7.
The Exchange currently anticipates invoking the proposed Ordering Window procedure to assist in determining Users' power needs and to allocate power in Hall 5. The procedure could also be used in the future each time the Exchange or ICE must assess customer demand for additional space and power in the MDC or allocate large amounts of power that become available at one time.
The Exchange does not propose to eliminate or alter the existing purchasing limits and waitlist procedures in Colocation Notes 6 and 7. Rather, those procedures would be temporarily superseded during the Ordering Window and would resume immediately after the Ordering Window ends.
The Exchange expects that the proposed changes would apply equally to all types and sizes of market participants. All Users would receive equal notice of the opening of the Ordering Window; the Ordering Window dates would be the same for all Users; and each order during the Ordering Window would be secured with a deposit equal to two months of the monthly recurring costs of the
The proposed Ordering Window procedure would not disadvantage Users on the current waitlist pursuant to Colocation Note 7, since power would be allocated to those orders first under the Ordering Window procedure.
Smaller Users with more modest power needs would not be disadvantaged by the proposed changes. In Step 2, each User that finalized an order during the Ordering Window would be allocated up to 32 kW of power (subject to sufficient power being available) before any User's order for more than 32 kW would be filled. This would ensure that all Users that participate in the Ordering Window would receive at least some power and no Users would be shut out of the allocation. In addition, because the deposit is proportional to the size of the order, and not a fixed amount, smaller Users would not be disproportionately affected by the deposit requirement.
The proposed changes are not otherwise intended to address any other issues relating to colocation services and/or related fees, and the Exchange is not aware of any problems that Users would have in complying with the proposed change.
The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act,
The proposed rule change is designed to remove impediments to and perfect the mechanism of a free and open market and a national market system by creating an alternative procedure by which the Exchange can allocate power in the MDC. The current procedures provide for only two allocation methods: orders that must be limited to 32 kW when the Purchasing Limits are in effect, and unlimited orders that the Exchange must fill on a first-come, first-served basis when the Purchasing Limits are not in effect. Neither of those current procedures gives the Exchange a way to obtain accurate information from Users about their actual and anticipated power needs—information that the Exchange requires in order to properly plan for future hall expansions at the MDC. The current procedures are not well-tailored to allocating large amounts of power that become available all at once, such as when a new colocation hall opens. When a large amount of power becomes available at one time, such as through a hall expansion, the current procedures could create a race condition in which the largest Users place early orders for many hundreds of kilowatts of power that the Exchange must fill on a first-come, first-served basis, effectively shutting out other customers with more modest power needs. In contrast, the proposed alternative procedure would remove impediments and perfect the mechanism of a free and open market and a national market system by permitting the Exchange to allocate up to 32 kW of power (subject to sufficient power being available) to each User before any User's order for more than 32 kW would be filled. This would ensure that each User submitting a finalized order during the Ordering Window would be guaranteed to receive at least some power and no Users would be shut out of the allocation.
The proposed requirement that orders submitted during the Ordering Window be guaranteed by a deposit is also designed to remove impediments and to perfect the mechanism of a free and open market and a national market system. The current procedures give the Exchange no way to accurately measure User demand for additional power. The existing waitlist is no indication of Users' actual demand, since waitlist orders are capped at 32 kW. Users' comments that they are interested in purchasing hundreds more kilowatts of power are mere casual mentions, which, in the Exchange's experience, Users sometimes walk back when the power actually becomes available. Without firm, guaranteed commitments from Users to purchase the power if it is made available, the Exchange runs the risk of underestimating or overestimating Users' true demand for power. The proposed deposit requirement would address these issues by discouraging Users from submitting orders for more power than they actually intend to purchase and would indicate the true amount of additional power that each User would agree to purchase if it were made available. The proposed deposit requirement of two months' worth of the monthly recurring costs of the amount of new power ordered during the Ordering Window is reasonable because, on the one hand, it is not so onerous as to dissuade Users from submitting orders, and, on the other hand, it is not so trivial that it would fail to deter Users from submitting exaggerated orders.
Under the proposed procedure, if a User wishes to reduce an order that it placed during the Ordering Window, its deposit would not be reduced or returned, but rather would be applied against the User's first and subsequent months' invoices after the power is delivered until the deposit is completely depleted. The Exchange believes that this would remove impediments and perfect the mechanism of a free and open market and a national market system because it would ensure that a User would be reimbursed for all of its deposit even if it reduces its order after the Ordering Window closes. This would remove any incentive a User otherwise might have to understate its needs for power out of a concern that it would not be reimbursed for the full amount of its deposit.
The proposed rule change would protect investors and the public interest in that it would provide the Exchange with accurate insight into Users' true power requirements. It is in the public interest for the Exchange to take User demand into account and to make reasoned, informed decisions about whether and how to expand the MDC.
The proposed rule change is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The proposed changes would apply equally
For all these reasons, the Exchange believes that the proposal is consistent with the Act.
In accordance with section 6(b)(8) of the Act,
The Exchange believes that the proposed rule change would not place any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change would provide an alternative procedure by which the Exchange can allocate power in the MDC that both provides the Exchange with reliable information about Users' true power needs and allows all Users that submit deposit-guaranteed orders during the Ordering Window to be assured of receiving at least some additional power. The Exchange does not expect the proposed rule change to impact intra-market or intermarket competition between exchanges, Users, or any other market participants.
No written comments were solicited or received with respect to the proposed rule change.
Within 45 days of the date of publication of this notice in the
(A) by order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule change should be disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend Options 3, Section 15 (Risk Protections) to adopt an active quote protection.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The purpose of the proposed rule change is to adopt an active risk counter functionality called active quote protection (“Active Quote Protection”) in Options 3, Section 15. The Exchange intends to introduce the foregoing changes with its upcoming technology migration to enhanced Nasdaq, Inc. (“Nasdaq”) functionality, and intends to begin implementation prior to December 20, 2024.
The Exchange proposes to offer an optional active risk counter functionality called Active Quote Protection, which will be available to Market Makers as an alternative to existing passive risk counter functionality described in Options 3, Section 15(a)(3)(B) (
Today, the Exchange requires Market Makers to configure risk exposure thresholds based on various metrics for each options class, including percentage of executed quotes (“Percentage Threshold”), total number of executed contracts (“Volume Threshold”), absolute value of the difference between long and short positions (“Delta Threshold”), and absolute value of the difference between contracts bought and contracts sold (“Vega Threshold”) (collectively, “Thresholds”).
The Exchange now proposes to introduce a new risk protection called Active Quote Protection that would enable Market Makers to actively manage their executed contract limit (“Contract Limit”) by sending an electronic instruction to the Exchange to decrement their executed contract limit counter (“Limit Counter”) by a specified amount at any time, rather than waiting until the expiry of a defined time period, when the risk limit is exceeded (like a Purge Event), or when the Market Maker otherwise sends a specific instruction to purge quotes to completely reset the risk counter. The Contract Limit, as set by the Market Maker, would apply for the duration of the trading day. Once the Market Maker's Limit Counter exceeds the Contract Limit set by the Market Maker, the System would automatically remove quotes in all series of the applicable options class submitted through the Exchange's Specialized Quote Feed protocol,
Under Active Quote Protection, the System would similarly handle the Market Maker's quote in that the quote could be filled one execution over the Contract Limit before the Market Maker's remaining quotes are cancelled by the System in order to be consistent with the firm quote obligations under Rule 602 of Regulation NMS. Specifically, the Exchange notes that any marketable orders or quotes that are executable against a Market Maker's
Additionally, under Active Quote Protection, Market Makers will be able to submit a request (i) to decrement their Limit Counter by a specified number of contracts, or (ii) to fully decrement their Limit Counter to zero.
To effectuate the foregoing changes, the Exchange proposes to set forth the new risk protection in subparagraph (B)(ii) of Options 3, Section 15(a)(3), as follows:
In lieu of Rapid Fire, a Market Maker may provide an executed contract limit (“Contract Limit”) that, if exceeded, the System will automatically remove the Market Maker's quotes in all series of an options class submitted through SQF. The System will apply the Contract Limit for the duration of the trading day. For each class of options, the System will maintain an active limit counter that will track the current number of contracts executed through the Market Maker's quotes (“Limit Counter”). If the Limit Counter exceeds the Contract Limit established by the Market Maker, the System will automatically remove the Market Maker's quotes as described in Section 15(a)(3)(B)(iii). Market Makers may submit a request (i) to decrement their Limit Counter by a specified number of contracts, or (ii) to fully decrement their Limit Counter to zero, including to re-enter the System as described in Section 15(a)(3)(B)(v). For Market Makers that elect to utilize the Contract Limit, the Percentage Threshold, Volume Threshold, Delta Threshold, and Vega Threshold will not be available for use on the Market Maker's badge.
As described above, once the Limit Counter exceeds the Contract Limit set by the Market Maker under the proposed Active Quote Protection, the System would automatically remove quotes in the same manner as currently specified for a Purge Event in proposed subparagraph (B)(iii) of Options 3, Section 15(a)(3). Accordingly, the Exchange proposes to add Active Quote Protection's Contract Limit throughout this Rule. Specifically, proposed subparagraph (B)(iii) will provide that the System will automatically remove quotes in all series of an options class when the Percentage Threshold, Volume Threshold, Delta Threshold, Vega Threshold, or Contract Limit has been exceeded. The System will send a Purge Notification Message to the Market Maker for all affected series when the above thresholds have been exceeded. Proposed subparagraph (B)(iii)(a) will provide that the Percentage Threshold, Volume Threshold, Delta Threshold, Vega Threshold, and Contract Limit are considered independently of each other.
Further, as discussed above, any marketable orders or quotes that are executable against a Market Maker's quotes that are received
The System will execute any marketable orders or quotes that are executable against a Market Maker's quote and received prior to the time the Percentage Threshold, Volume Threshold, Delta Threshold, Vega Threshold, or Contract Limit is triggered up to the size of the Market Maker's quote, even if such execution results in executions in excess of the Market Maker's applicable Threshold or Contract Limit with respect to any parameter.
In addition, when the System removes quotes as a result of exceeding the Contract Limit under Active Quote Protection, the Exchange proposes to require the Market Maker to submit a request to re-enter the System. This request will be the same type of message as the request described in proposed subparagraph (B)(ii) where the Market Maker must request to fully decrement their Limit Counter back to zero in order to re-enter the System. This requirement will be added in proposed subparagraph (B)(v) of Options 3, Section 15(a)(3), and will be similar to how the existing quote purge mechanism works for the Thresholds today, except the Market Maker needs to send a separate message (
Similar to how default parameters are currently applied for each of the existing Thresholds described above, the Exchange proposes to apply a default parameter for the Active Quote Protection Contract Limit (which would be announced to Members) if the Market Maker opting to use Active Quote Protection does not provide a Contract Limit at the outset.
The Exchange also proposes that the new Active Quote Protection would leverage the existing market-wide speed bump (“MWSB”) functionality currently set forth in Options 3, Section 15(a)(3)(B)(vi) (renumbered as Section 15(a)(3)(B)(vii) under this proposal). Today, MWSB is a risk protection offered alongside the current Automated Quotation Adjustments and triggers when, during a time period established by the Market Maker, the total number of Purge Events exceeds a market-wide parameter provided to the Exchange by
To that end, the Exchange proposes to update MWSB to add purge events under Active Quote Protection to the MWSB counter such that Active Quote Protection purge events and Purge Events under the current Automated Quotation Adjustments will be aggregated together as counting toward the specified market-wide parameter. Accordingly, the Exchange proposes to add references to the Active Quote Protection rule (
In addition to the automated quotation removal protections described in (B)(i)(a)-(d) and (B)(ii) above, a Market Maker must provide a market wide parameter by which the Exchange will automatically remove a Market Maker's quotes in all classes when, during a time period established by the Market Maker, the total number of quote removal events specified in (B)(i)(a)-(d) and (B)(ii) above exceeds the market wide parameter provided to the Exchange by the Market Maker. Market Makers may request the Exchange to set the market wide parameter to apply to just Nasdaq ISE or across Nasdaq ISE and Nasdaq GEMX. Market Makers must request the Exchange enable re-entry by contacting the Exchange's Operations Department.
The following example illustrates the proposed behavior of the Active Quote Protection risk protection:
Contract Limit: 100.
• Market Maker trades a transaction for 10 contracts in AAPL; Limit Counter goes from 0 to 10.
• Market Maker sends a request to decrement its Limit Counter in AAPL for 10 contracts; Limit Counter goes from 10 to 0.
• Market Maker trades a transaction for 20 contracts in AAPL; Limit Counter goes from 0 to 20.
• Market Maker trades a transaction for 50 contracts in AAPL; Limit Counter goes from 20 to 70.
• Market Maker sends a request to decrement its Limit Counter in AAPL for 20 contracts; Limit Counter goes from 70 to 50.
• Market Maker trades a transaction for 60 contracts in AAPL; Limit Counter goes from 50 to 110 and all Market Maker quotes in AAPL are automatically purged after the execution because the Limit Counter exceeded the Market Maker's Contract Limit of 100 executed contracts.
• At this point, the Market Maker must send a request to fully decrement its Limit Counter in AAPL back to zero in order to begin quoting again.
The following example illustrates how MWSB will work with the proposed Active Quote Protection functionality:
• Assume Market Maker in AAPL and SPY has Automated Quotation Adjustments set for AAPL and Active QP set for SPY.
• Market Maker sets its MWSB market-wide parameter so that it is triggered at 25 purge events within a 20 second time period.
• On a given trading day, if an Active Quote Protection Purge Event is triggered 15 times in SPY and an Automated Quotation Adjustment Purge Event is triggered 10 times in AAPL, all within 20 seconds, then the Exchange will automatically remove all of the Market Maker's quotes AAPL and SPY.
The Exchange proposes a few technical, non-substantive amendments in Options 3, Section 15(a)(3)(B). With the addition of the new Active Quote Protection rule in proposed subparagraph (B)(ii), the Exchange proposes to renumber existing subparagraphs (B)(ii)-(vi) as proposed subparagraphs (B)(iii)-(vii) and make related changes to update existing cross-cites within Section 15(a)(3)(B). The Exchange also proposes to title subparagraph (B)(i) as “Rapid Fire” and subparagraph (B)(vii) as “Market-Wide Speed Bump” to more clearly identify which rules apply to which risk protections.
Lastly, the Exchange proposes in the MWSB rule (
The Exchange believes that its proposal is consistent with section 6(b) of the Act,
The Exchange believes that the proposed Active Quote Protection risk protection is consistent with the Act because it will enhance the risk protection tools available to Market Makers by introducing a new method of establishing and monitoring for risk parameters that will be offered as an alternative to existing Rapid Fire risk parameters, thereby supporting a Market Maker's ability to manage their risk on the Exchange, and also providing them with flexibility to use additional tools to manage risk. As noted above, while the passive (Rapid Fire) and active (Active QP) risk counter functionality will be mutually exclusive on each badge, Market Makers will still be able to use both to cover their activity on the Exchange by getting multiple badges and setting each risk counter by badge. The Exchange believes that offering more risk management tools to Market Makers would mitigate their exposure to excessive risk. The Exchange further believes that having the new Active Quote Protection functionality leverage the existing MWSB functionality will similarly support a Market Maker's ability to manage their risk on the Exchange by including Active Quote Protection purge events to the MWSB counter. As noted above, the risk to Market Makers is not limited to a single series in an option or even multiple series in an option as Market Makers that quote in multiple series of multiple options have significant exposure, requiring them to offset or hedge their overall positions. Market Makers are required to continuously quote in assigned options, and quoting across many series in an option or multiple options creates the possibility of executions that can create large, unintended principal positions that could expose Market Makers to unnecessary risk. Today, MWSB is designed to assist Market Makers in managing their market risk by tracking the number of Purge Events relative to the market-wide parameter set by the Market Maker. The Exchange therefore believes that tracking the number of Active Quote Protection purge events for a Market Maker against its MWSB market-wide parameter would be similarly useful for managing market risk so that they can provide deep and liquid markets to the benefit of all investors. Ultimately, the Exchange believes that providing Market Makers with additional tools in the manner described above to manage their risk parameters serves to perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest because Market Makers will be better able to manage risks with these tools.
With regard to the impact of this proposal on system capacity, the Exchange notes that it has analyzed its capacity and represents that it and the Options Price Reporting Authority have the necessary systems capacity to handle any potential additional traffic associated with the proposed rule change. The Exchange believes that its members will not have a capacity issue as a result of this proposal.
The Exchange further represents that its proposal will continue to operate consistently with the firm quote obligations of a broker-dealer pursuant to Rule 602 of Regulation NMS. Specifically, any marketable interest that is executable against a Market Maker's quotes that are received
As noted above, the proposed Active Quote Protection functionality is similar to existing active risk counter functionality on another options exchange, which currently allows users to actively decrement the risk counter by a specified amount at any time, rather than waiting until a risk limit is reached or the user otherwise sends a specific instruction to the exchange to completely reset the counting program.
The Exchange believes that the technical amendments in Options 3, Section 15(a)(3)(B) described above are consistent with the Act because they will promote clarity in the rules and make the Rulebook easier to navigate for market participants by updating rule numbering and existing cross-cites as described above. Furthermore, the Exchange also believes that adding the defined terms for Rapid Fire and MWSB in the rule text will promote clarity so that Members can more easily locate the relevant functionalities in the Rulebook. Lastly, the Exchange believes that the proposed changes to remove the cross-cite to Supplementary Material .04 to Options 3, Section 14 from the MWSB rule is consistent with the Act because it will eliminate an obsolete reference to functionality that no longer exists on the Exchange, which will promote clarity in the Rulebook and avoid any potential confusion.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange does not believe that the proposed Active Quote Protection functionality will impose any undue burden on intra-market competition as it is aimed at mitigating exposure to excessive risk when trading on the Exchange. While the Exchange will offer the proposed functionality to Market Makers only, the proposed risk protection is intended to provide Market Makers with an additional tool to manage their risk parameters in a manner they deem appropriate. As such, the Exchange believes that the proposed functionality may facilitate Market Makers' provision of liquidity on the Exchange, thereby benefitting all market participants through additional execution opportunities at potentially improved prices.
The Exchange also believes that its Active Quote Protection proposal does not impose an undue burden on inter-market competition as the proposed risk protection is similar to an existing risk protection on MEMX
Lastly, the Exchange does not believe that the proposed technical amendments in Options 3, Section 15(a)(3)(B) will impose an undue burden on competition as these are non-substantive changes to promote clarity in the rules and make the Rulebook easier to navigate for market participants.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend Options 3, Section 15 (Risk Protections) to adopt an active quote protection.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The purpose of the proposed rule change is to adopt an active risk counter functionality called active quote protection (“Active Quote Protection”) in Options 3, Section 15. The Exchange intends to begin implementation prior to December 20, 2024, and will provide prior notice of the implementation date to Members in an Options Trader Alert.
The Exchange proposes to offer an optional active risk counter functionality called Active Quote Protection, which will be available to Market Makers as an alternative to existing passive risk counter functionality described in Options 3, Section 15(c)(2)(A) (
Today, the Exchange requires Market Makers to configure risk exposure thresholds based on either percentage of executed quotes (“Percentage Threshold”) or total number of executed contracts (“Volume Threshold”). The Exchange also offers two optional risk exposure thresholds based on the absolute value of the difference between long and short positions (“Delta Threshold”), and absolute value of the difference between contracts bought and contracts sold (“Vega Threshold”) (collectively, “Thresholds”).
The Exchange now proposes to introduce a new risk protection called Active Quote Protection that would enable Market Makers to actively manage their executed contract limit (“Contract Limit”) by sending an electronic instruction to the Exchange to decrement their executed contract limit counter (“Limit Counter”) by a specified amount at any time, rather than waiting until the expiry of a defined time period, when the risk limit is exceeded (like a Purge Event), or when the Market Maker otherwise sends a specific instruction to purge quotes to completely reset the risk counter.
The Contract Limit, as set by the Market Maker, would apply for the duration of the trading day. Once the Market Maker's Limit Counter exceeds the Contract Limit set by the Market Maker, the System would automatically remove quotes in all series of the applicable options class submitted through the Exchange's Specialized Quote Feed protocol,
Under Active Quote Protection, the System would similarly handle the Market Maker's quote in that the quote could be filled one execution over the Contract Limit before the Market Maker's remaining quotes are cancelled by the System in order to be consistent with the firm quote obligations under Rule 602 of Regulation NMS. Specifically, the Exchange notes that any marketable orders or quotes that are executable against a Market Maker's quotes that are received
Additionally, under Active Quote Protection, Market Makers will be able to submit a request (i) to decrement their Limit Counter by a specified number of contracts, or (ii) to fully decrement their Limit Counter to zero.
To effectuate the foregoing changes, the Exchange proposes to set forth the new risk protection in paragraph (B) of Options 3, Section 15(c)(2), as follows:
In lieu of Rapid Fire, a Market Maker may provide an executed contract limit (“Contract Limit”) that, if exceeded, the System will automatically remove the Market Maker's quotes in all series of an options class submitted through SQF. The System will apply the Contract Limit for the duration of the trading day. For each class of options, the System will maintain an active limit counter that will track the current number of contracts executed through the Market Maker's quotes (“Limit Counter”). If the Limit Counter exceeds the Contract Limit established by the Market Maker, the System will automatically remove the Market Maker's quotes as described in paragraph (D) below. Market Makers may submit a request (i) to decrement their Limit Counter by a specified number of contracts, or (ii) to fully decrement their Limit Counter to zero, including to re-enter the System as described in paragraph (F) below.
The Exchange also proposes to amend current paragraph (F) (renumbered to paragraph (G) under this proposal) of Options 3, Section 15(c)(2) to specify that the active and passive risk counter functionality will be mutually exclusive per badge). As amended, proposed paragraph (G) will provide:
The Exchange will require BX Market Makers to utilize the Percentage Threshold, the Volume Threshold, or the Contract Limit. For Market Makers that elect to utilize the Contract Limit, the Percentage Threshold, Volume Threshold, Delta Threshold, and Vega Threshold will not be available for use on the Market Maker's badge. The Delta, Vega and Multi-Trigger Thresholds are optional.
As described above, once the Limit Counter exceeds the Contract Limit set by the Market Maker under the proposed Active Quote Protection, the System would automatically remove quotes in the same manner as currently specified for a Purge Event in proposed paragraph (D) of Options 3, Section 15(c)(2). Accordingly, the Exchange proposes to add Active Quote Protection's Contract Limit throughout this Rule. Specifically, proposed paragraph (D) will provide that the System will automatically remove quotes in all series of an options class in an underlying security when the Percentage Threshold, Volume Threshold, Delta Threshold, Vega Threshold, or the Contract Limit has been exceeded. The System will automatically remove quotes in all series of an option class in all underlying securities when the Multi-Trigger Threshold
Further, as discussed above, any marketable orders or quotes that are executable against a Market Maker's quotes that are received
The System will execute any marketable orders or quotes that are executable against a Market Maker's quote and received prior to the time the Percentage Threshold, Volume Threshold, Delta Threshold, Vega Threshold, or Contract Limit is triggered up to the size of the Market Maker's quote, even if such execution results in executions in excess of the Market Maker's applicable Threshold or Contract Limit with respect to any parameter.
In addition, when the System removes quotes as a result of exceeding the Contract Limit under Active Quote Protection, the Exchange proposes to require the Market Maker to submit a request to re-enter the System. This request will be the same type of message as the request described in proposed paragraph (B) where the Market Maker must request to fully decrement their Limit Counter back to zero in order to re-enter the System. This requirement will be added in proposed paragraph (F) of Options 3, Section 15(c)(2), and will be similar to how the existing quote purge mechanism works for the Thresholds today, except the Market Maker needs to send a separate message (
The Exchange also proposes that the new Active Quote Protection would leverage the existing multi-trigger (“Multi-Trigger”) functionality currently set forth in Options 3, Section 15(c)(2)(B) (renumbered as Section 15(c)(2)(C) under this proposal). Today, Multi-Trigger is a risk protection offered alongside the current Quotation Adjustments. A BX Market Maker or BX Market Maker Group, which is defined as multiple affiliated BX Market Makers,
Today, Multi-Trigger is meant to provide Market Makers or a Group with protection from the risk of multiple executions across multiple series of an option or across multiple options. This risk protection recognizes that risk to
To that end, the Exchange proposes to update Multi-Trigger to add purge events under Active Quote Protection to the Multi-Trigger counter such that Active Quote Protection purge events and Purge Events under the current Quotation Adjustments will be aggregated together as counting toward the specified Multi-Trigger Threshold. Accordingly, the Exchange proposes to add references to the Active Quote Protection rule (
A BX Market Maker or BX Market Maker Group (multiple affiliated BX Market Makers is a “Group” as defined by a BX Participant and provided by such Participant to the Exchange) may provide a specified time period and number of allowable triggers by which the Exchange will automatically remove quotes in all options series in all underlying issues submitted through designated BX protocols as specified by the Exchange (“Multi-Trigger Threshold”). During a specified time period established by the BX Market Maker not to exceed 30 seconds (“Multi-Trigger Specified Time Period”), the number of times the System automatically removes the BX Market Maker's or Group's quotes in all options series will be based on the number of triggers of the Percentage Threshold described in paragraph (A)(i) above, the Volume Threshold described in paragraph (A)(ii) above, the Delta Threshold described in paragraph (A)(iii) above, the Vega Threshold described in paragraph (A)(iv) above, and the Contract Limit described in paragraph (B) above. Once the System determines that the number of triggers exceeds a number established by either the BX Market Maker or Group, during a Multi-Trigger Specified Time Period, the System will automatically remove all quotes in all options series in all underlying issues for that BX Market Maker or Group. A trigger is defined as the event which causes the System to automatically remove quotes in all options series in an underlying issue. A Multi-Trigger Specified Time Period will commence after every trigger of the Percentage Threshold, Volume Threshold, Delta Threshold, Vega Threshold, or Contract Limit, and will continue until the System removes quotes as described in paragraph (D) below or the Multi-Trigger Specified Time Period expires. The System counts triggers within the Multi-Trigger Specified Time Period across all triggers for the BX Market Maker or Group. A Multi-Trigger Specified Time Period operates on a rolling basis in that there may be multiple Multi-Trigger Specified Time Periods occurring simultaneously and such Multi-Trigger Specified Time Periods may overlap.
The following example illustrates the proposed behavior of the Active Quote Protection risk protection:
• Market Maker trades a transaction for 10 contracts in AAPL; Limit Counter goes from 0 to 10.
• Market Maker sends a request to decrement its Limit Counter in AAPL for 10 contracts; Limit Counter goes from 10 to 0.
• Market Maker trades a transaction for 20 contracts in AAPL; Limit Counter goes from 0 to 20.
• Market Maker trades a transaction for 50 contracts in AAPL; Limit Counter goes from 20 to 70.
• Market Maker sends a request to decrement its Limit Counter in AAPL for 20 contracts; Limit Counter goes from 70 to 50.
• Market Maker trades a transaction for 60 contracts in AAPL; Limit Counter goes from 50 to 110 and all Market Maker quotes in AAPL are automatically purged after the execution because the Limit Counter exceeded the Market Maker's Contract Limit of 100 executed contracts.
• At this point, the Market Maker must send a request to fully decrement its Limit Counter in AAPL back to zero in order to begin quoting again.
The following example illustrates how Multi-Trigger will work with the proposed Active Quote Protection functionality:
• Assume Market Maker in AAPL and SPY has Quotation Adjustments set for AAPL and Active QP set for SPY.
• Market Maker sets its Multi-Trigger Threshold so that it is triggered at 25 purge events within a 20 second time period.
• On a given trading day, if an Active Quote Protection Purge Event is triggered 15 times in SPY and a Quotation Adjustment Purge Event is triggered 10 times in AAPL, all within 20 seconds, then the Exchange will automatically remove all of the Market Maker's quotes AAPL and SPY.
The Exchange proposes a few technical, non-substantive amendments in Options 3, Section 15(c)(2). With the addition of the new Active Quote Protection rule in proposed paragraph (B), the Exchange proposes to renumber existing paragraphs (B)-(F) as proposed paragraphs (C)-(G) and make related changes to update existing cross-cites within Section 15(c)(2). The Exchange also proposes in paragraph (A) to correct the current cross-cites to paragraphs (B) and (C) to paragraphs (D) and (E) because the Exchange originally intended to refer to how the System removes quotes either pursuant to a Purge Event (which is governed by proposed paragraph (D)) or pursuant to a Market Maker specifically requesting the System to remove quotes in all series of an underlying issue (which is governed by proposed paragraph (E)). The Exchange proposes to reword the rule text within proposed Options 3, Section 15(c)(2)(D) to replace the term “options” with the words “series of an options class” to conform the wording in this paragraph to other rule text with Options 3, Section 15. Additionally, the Exchange proposes to add the words “or Group” to Options 3, Section 15(c)(2)(F) because a Group may also request re-entry pursuant to proposed Options 3, Section 15(c)(2)(C) and would receive a Reentry Notification Message.
Lastly, the Exchange proposes to title paragraph (A) as “Rapid Fire” and paragraph (C) as “Multi-Trigger” to more clearly identify which rules apply to which risk protections.
The Exchange believes that its proposal is consistent with section 6(b) of the Act,
The Exchange believes that the proposed Active Quote Protection risk protection is consistent with the Act because it will enhance the risk protection tools available to Market Makers and Groups by introducing a
With regard to the impact of this proposal on system capacity, the Exchange notes that it has analyzed its capacity and represents that it and the Options Price Reporting Authority have the necessary systems capacity to handle any potential additional traffic associated with the proposed rule change. The Exchange believes that its members will not have a capacity issue as a result of this proposal.
The Exchange further represents that its proposal will continue to operate consistently with the firm quote obligations of a broker-dealer pursuant to Rule 602 of Regulation NMS. Specifically, any marketable interest that is executable against a Market Maker's quotes that are received
As noted above, the proposed Active Quote Protection functionality is similar to existing active risk counter functionality on another options exchange, which currently allows users to actively decrement the risk counter by a specified amount at any time, rather than waiting until a risk limit is reached or the user otherwise sends a specific instruction to the exchange to completely reset the counting program.
The Exchange believes that the technical amendments in Options 3, Section 15(c)(2) described above are consistent with the Act because they will promote clarity in the rules and make the Rulebook easier to navigate for market participants by updating rule numbering and existing cross-cites as described above. Furthermore, the Exchange also believes that adding the defined terms for Rapid Fire and Multi-Trigger in the rule text will promote clarity so that Members can more easily locate the relevant functionalities in the Rulebook. Rewording the rule text within proposed Options 3, Section 15(c)(2)(D) to replace the term “options” with the words “series of an options class” will conform the wording in this paragraph to other rule text with Options 3, Section 15. Finally, adding the words “or Group” to Options 3, Section 15(c)(2)(F) will make the sentence more accurate because a Group may also request re-entry pursuant to proposed Options 3, Section 15(c)(2)(C) and would receive a Reentry Notification Message.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange does not believe that the proposed Active Quote Protection functionality will impose any undue burden on intra-market competition as it is aimed at mitigating exposure to excessive risk when trading on the Exchange. While the Exchange will offer the proposed functionality to Market Makers only, the proposed risk protection is intended to provide Market Makers with an additional tool to manage their risk parameters in a manner they deem appropriate. As such, the Exchange believes that the proposed functionality may facilitate Market Makers' provision of liquidity on the Exchange, thereby benefitting all market participants through additional execution opportunities at potentially improved prices.
The Exchange also believes that its Active Quote Protection proposal does not impose an undue burden on inter-market competition as the proposed risk protection is similar to an existing risk protection on MEMX
Lastly, the Exchange does not believe that the proposed technical amendments in Options 3, Section 15(c)(2) will impose an undue burden on competition as these are non-substantive changes to promote clarity in the rules and make the Rulebook easier to navigate for market participants.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is filing a proposal to amend the MIAX Options Exchange Fee Schedule (“Fee Schedule”) to amend certain connectivity and port fees.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend the Fee Schedule as follows: (1) increase the fees for a 10 gigabit (“Gb”) ultra-low latency (“ULL”) fiber connection for Members
Beginning in late January 2023, the Exchange also recently determined a substantial operational need to no longer operate 10Gb ULL connectivity on a single shared network with MIAX Pearl. The Exchange bifurcated 10Gb ULL connectivity due to ever-increasing capacity constraints and to enable it to continue to satisfy the anticipated access needs for Members and other market participants.
Much of the cost relates to monitoring and analysis of data and performance of the network via the subscriber's connection with nanosecond granularity, and continuous improvements in network performance with the goal of improving the subscriber's experience. The costs associated with maintaining and enhancing a state-of-the-art network is a significant expense for the Exchange, and thus the Exchange believes that it is reasonable and appropriate to help offset those increased costs by amending fees for connectivity services. Subscribers expect the Exchange to provide this level of support so they continue to receive the performance they expect. This differentiates the Exchange from its competitors.
The Exchange now proposes to amend the Fee Schedule to amend the fees for 10Gb ULL connectivity and Limited Service MEI Ports in order to recoup cost related to bifurcating 10Gb connectivity to the Exchange and MIAX Pearl as well as the ongoing costs and increase in expenses set forth below in the Exchange's cost analysis.
The Exchange previously included a cost analysis in the Initial, Second, Third, and Fourth Proposals. As described more fully below, the Exchange provides an updated cost analysis that includes, among other things, additional descriptions of how the Exchange allocated costs among it and its affiliated exchanges (MIAX Pearl (separately among MIAX Pearl Options and MIAX Pearl Equities) and MIAX Emerald
Starting in 2017, following the United States Court of Appeals for the District of Columbia's Susquehanna Decision
While the above appeal to the D.C. Circuit was pending, on March 29, 2019, the Commission issued an order disapproving a proposed fee change by BOX Exchange LLC (“BOX”) to establish connectivity fees (the “BOX Order”), which significantly increased the level of information needed for the Commission to believe that an exchange's filing satisfied its obligations under the Act with respect to changing a fee.
Also while the above appeal was pending, on May 21, 2019, the Commission Staff issued guidance “to assist the national securities exchanges and FINRA . . . in preparing Fee Filings that meet their burden to demonstrate that proposed fees are consistent with the requirements of the Securities Exchange Act.”
Following the BOX Order and Staff Guidance, on August 6, 2020, the D.C. Circuit vacated the Commission's SIFMA Decision in NASDAQ Stock Market, LLC v. SEC
As a result of the Commission's loss of the NASDAQ vs. SEC case noted above, the Commission never followed through with its intention to subject the over 400 fee filings to “develop a record,” and to “explain their conclusions, based on that record, in a written decision that is sufficient to enable us to perform our review.”
While the Exchange appreciates that the Staff Guidance articulates an important policy goal of improving disclosures and requiring exchanges to justify that their market data and access fee proposals are fair and reasonable, the practical effect of the Revised Review Process, Staff Guidance, and the Commission's related practice of continuous suspension of new fee filings, is anti-competitive, discriminatory, and has put in place an un-level playing field, which has negatively impacted smaller, nascent, non-legacy exchanges (“non-legacy exchanges”), while favoring larger, incumbent, entrenched, legacy exchanges (“legacy exchanges”).
The net result is that the non-legacy exchanges are effectively now blocked by the Commission Staff from adopting or increasing fees to amounts comparable to the legacy exchanges (which were not subject to the Revised Review Process and Staff Guidance), despite providing enhanced disclosures and rationale to support their proposed fee changes that far exceed any such support provided by legacy exchanges. Simply put, legacy exchanges were able to increase their non-transaction fees during an extended period in which the Commission applied a “market-based” test that only relied upon the assumed presence of significant competitive forces, while exchanges today are subject to a cost-based test requiring extensive cost and revenue disclosures, a process that is complex, inconsistently applied, and rarely results in a successful outcome,
Commission Staff now require exchange filings, including from non-legacy exchanges such as the Exchange, to provide detailed cost-based analysis in place of competition-based arguments to support such changes. However, even with the added detailed cost and expense disclosures, the Commission Staff continues to either suspend such filings and institute disapproval proceedings, or put the exchanges in the unenviable position of having to repeatedly withdraw and re-file with additional detail in order to continue to charge those fees.
The much higher non-transaction fees charged by the legacy exchanges provides them with two significant competitive advantages. First, legacy exchanges are able to use their additional non-transaction revenue for investments in infrastructure, vast marketing and advertising on major media outlets,
While the Commission has clearly noted that the Staff Guidance is merely guidance and “is not a rule, regulation or statement of the . . . Commission . . . the Commission has neither approved nor disapproved its content . . .”,
Because of the un-level playing field created by the Revised Review Process and Staff Guidance, the Exchange believes that the Commission Staff, at this point, should either (a) provide sufficient clarity on how its cost-based standard can be met, including a clear and exhaustive articulation of required data and its views on acceptable margins,
In light of the above, disapproval of this would not meet the fairness standard under the Act, would be discriminatory and places a substantial burden on competition. The Exchange would be uniquely disadvantaged by not being able to increase its access fees to comparable levels (or lower levels than current market rates) to those of other options exchanges for connectivity. If the Commission Staff were to disapprove this proposal, that action, and not market forces, would substantially affect whether the Exchange can be successful in its competition with other options exchanges. Disapproval of this filing could also be viewed as an arbitrary and capricious decision should the Commission Staff continue to ignore its past treatment of non-transaction fee filings before implementation of the Revised Review Process and Staff Guidance and refuse to allow such filings to be approved despite significantly enhanced arguments and cost disclosures.
The Exchange filed a proposal to no longer operate 10Gb connectivity to the Exchange on a single shared network with its affiliate, MIAX Pearl Options. This change is an operational necessity due to ever-increasing capacity constraints and to accommodate anticipated access needs for Members and other market participants.
The Exchange bifurcated the Exchange and MIAX Pearl Options 10Gb ULL networks on January 23, 2023. The Exchange issued an alert on August 12, 2022 publicly announcing the planned network change and implementation plan and dates to provide market participants adequate time to prepare.
The Exchange, therefore, proposes to amend the Fee Schedule to increase the fees for Members and non-Members to access the Exchange's system networks
The Exchange proposes to make the following changes to reflect the bifurcated 10Gb ULL network for the Exchange and MIAX Pearl Options. The Exchange proposes to amend the explanatory paragraphs below the network connectivity fee tables in Sections 5)a)-b) of the Fee Schedule to specify that, with the bifurcated 10Gb ULL network, Members (and non-Members) utilizing the MENI to connect to the trading platforms, market data systems, test systems, and disaster recovery facilities of the Exchange and MIAX Pearl Options via a single, can only do so via a shared 1Gb connection.
The Exchange will continue to assess monthly Member and non-Member network connectivity fees for connectivity to the primary and secondary facilities in any month the Member or non-Member is credentialed to use any of the Exchange APIs or market data feeds in the production environment. The Exchange will continue to pro-rate the fees when a Member or non-Member makes a change to the connectivity (by adding or deleting connections) with such pro-rated fees based on the number of trading days that the Member or non-Member has been credentialed to utilize any of the Exchange APIs or market data feeds in the production environment through such connection, divided by the total number of trading days in such month multiplied by the applicable monthly rate.
The Exchange also proposes to amend Section 5)d) of the Fee Schedule to adopt a tiered-pricing structure for Limited Service MEI Ports available to Market Makers. The Exchange allocates two (2) Full Service MEI Ports
The Exchange now proposes to move from a flat monthly fee per Limited Service MEI Port for each matching engine to a tiered-pricing structure for Limited Service MEI Ports for each matching engine under which the monthly fee would vary depending on the number of Limited Service MEI Ports each Market Maker elects to purchase. Specifically, the Exchange will continue to provide the first and second Limited Service MEI Ports for each matching engine free of charge. For Limited Service MEI Ports, the Exchange proposes to adopt the following tiered-pricing structure: (i) the third and fourth Limited Service MEI Ports for each matching engine will increase from the current flat monthly fee of $100 to $150 per port; (ii) the fifth and sixth Limited Service MEI Ports for each matching engine will increase from the current flat monthly fee of $100 to $200 per port; and (iii) the seventh or more Limited Service MEI Ports will increase from the current monthly flat fee of $100 to $250 per port. The Exchange believes a tiered-pricing
The Exchange offers various types of ports with differing prices because each port accomplishes different tasks, are suited to different types of Members, and consume varying capacity amounts of the network. For instance, Market Makers who take the maximum amount of Limited Service MEI Ports account for approximately greater than 99% of message traffic over the network, while Market Makers with fewer Limited Service MEI Ports account for approximately less than 1% of message traffic over the network. In the Exchange's experience, Market Makers who only utilize the two free Limited Service MEI Ports do not have a business need for the high performance network solutions required by Market Makers who take the maximum amount of Limited Service MEI Ports. The Exchange's high performance network solutions and supporting infrastructure (including employee support), provides unparalleled system throughput and the capacity to handle approximately 18 million quote messages per second. Based on May 2023 trading results, the Exchange handles more than 12.3 billion quotes on an average day, and more than 271 billion quotes over the entire month. Of that total, Market Makers with the maximum amount of Limited Service MEI Ports generated more than 156 billion quotes (and more than 7 billion quotes on an average day), and Market Makers who utilized only the two free Limited Service MEI Ports generated approximately 78 billion quotes (and approximately 3.5 billion quotes on an average day). Also for May 2023, Market Makers who utilized 7 to 9 Limited Service MEI ports submitted an average of 1.3 billion quotes per day and Market Makers who utilized 5-6 Limited Service MEI Ports submitted an average of 356 million quotes on an average day. In May 2023, the Exchange did not have any Market Makers that utilized only 3-4 Limited Service MEI Ports.
To achieve a consistent, premium network performance, the Exchange must build out and maintain a network that has the capacity to handle the message rate requirements of its most heavy network consumers. These billions of messages per day consume the Exchange's resources and significantly contribute to the overall network connectivity expense for storage and network transport capabilities. The Exchange must also purchase additional storage capacity on an ongoing basis to ensure it has sufficient capacity to store these messages as part of it surveillance program and to satisfy its record keeping requirements under the Exchange Act.
The Exchange proposes to increase its monthly Limited Service MEI Port fees since it has not done so since 2016,
The proposed fee changes are immediately effective.
The Exchange believes that the proposed fees are consistent with section 6(b) of the Act
The Exchange believes that the information provided to justify the proposed fees meets or exceeds the amount of detail required in respect of proposed fee changes under the Revised Review Process and as set forth in recent Staff Guidance. Based on both the BOX Order
The Exchange believes that exchanges, in setting fees of all types, should meet high standards of transparency to demonstrate why each new fee or fee amendment meets the requirements of the Act that fees be reasonable, equitably allocated, not unfairly discriminatory, and not create an undue burden on competition among market participants. The Exchange believes this high standard is especially important when an exchange imposes various fees for market participants to access an exchange's marketplace.
In the Staff Guidance, the Commission Staff states that, “[a]s an initial step in assessing the reasonableness of a fee, staff considers whether the fee is constrained by significant competitive forces.”
The proposed fees are reasonable because they promote parity among exchange pricing for access, which promotes competition, including in the Exchanges' ability to competitively price transaction fees, invest in infrastructure, new products and other innovations, all while allowing the Exchange to recover its costs to provide dedicated access via 10Gb ULL connectivity (driven by the bifurcation of the 10Gb ULL network) and Limited Service MEI Ports. As discussed above, the Revised Review Process and Staff Guidance have created an uneven playing field between legacy and non-legacy exchanges by severely restricting non-legacy exchanges from being able to increase non-transaction related fees to provide them with additional necessary revenue to better compete with legacy exchanges, which largely set fees prior to the Revised Review Process. The much higher non-transaction fees charged by the legacy exchanges provides them with two significant competitive advantages: (i) additional non-transaction revenue that may be used to fund areas other than the non-transaction service related to the fee, such as investments in infrastructure, advertising, new products and other innovations; and (ii) greater flexibility to lower their transaction fees by using the revenue from the higher non-transaction fees to subsidize transaction fee rates. The latter is more immediately impactful in competition for order flow and market share, given the variable nature of this cost on Member firms. The absence of a reasonable path forward to increase non-transaction fees to comparable (or lower rates) limits the Exchange's flexibility to, among other things, make additional investments in infrastructure and advertising, diminishes the ability to remain competitive on transaction fees, and hinders the ability to compete for order flow and market share. Again, while one could debate whether the pricing of non-transaction fees are subject to the same market forces as transaction fees, there is little doubt that subjecting one exchange to a materially different standard than that applied to other exchanges for non-transaction fees leaves that exchange at a disadvantage in its ability to compete with its pricing of transaction fees.
The Exchange commenced operations in 2012 and adopted its initial fee schedule, with all connectivity and port fees set at $0.00 (the Exchange originally had a non-ULL 10Gb connectivity option, which it has since removed).
Later in 2013, as the Exchange's market share increased,
The proposed changes to the Fee Schedule are reasonable in several respects. As a threshold matter, the Exchange is subject to significant competitive forces, which constrains its pricing determinations for transaction fees as well as non-transaction fees. The fact that the market for order flow is competitive has long been recognized by the courts. In
The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention to determine prices, products, and services in the securities markets. In Regulation NMS, while adopting a series of steps to improve the current market model, the Commission highlighted the importance of market forces in determining prices and SRO revenues, and also recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
Congress directed the Commission to “rely on `competition, whenever possible, in meeting its regulatory responsibilities for overseeing the SROs and the national market system.' ”
The Exchange believes the competing exchanges' 10Gb connectivity and port fees are useful examples of alternative approaches to providing and charging for access and demonstrating how such fees are competitively set and constrained. To that end, the Exchange believes the proposed fees are competitive and reasonable because the proposed fees are similar to or less than fees charged for similar connectivity and port access provided by other options exchanges with comparable market shares. As such, the Exchange believes that denying its ability to institute fees that allow the Exchange to recoup its costs with a reasonable margin in a manner that is closer to parity with legacy exchanges, in effect, impedes its ability to compete, including in its pricing of transaction fees and ability to invest in competitive infrastructure and other offerings.
The following table shows how the Exchange's proposed fees remain similar to or less than fees charged for similar connectivity and port access provided by other options exchanges with similar market share. Each of the connectivity or port rates in place at competing options exchanges were filed with the Commission for immediate effectiveness and remain in place today.
There is no requirement, regulatory or otherwise, that any broker-dealer connect to and access any (or all of) the available options exchanges. Market participants may choose to become a member of one or more options exchanges based on the market participant's assessment of the business opportunity relative to the costs of the Exchange. With this, there is elasticity of demand for exchange membership. As an example, the Exchange's affiliate, MIAX Pearl Options, experienced a decrease in membership as the result of similar fees proposed herein. One MIAX Pearl Options Market Maker terminated their MIAX Pearl Options membership effective January 1, 2023, as a direct
It is not a requirement for market participants to become members of all options exchanges; in fact, certain market participants conduct an options business as a member of only one options market.
One other exchange recently noted in a proposal to amend their own trading permit fees that of the 62 market making firms that are registered as Market Makers across Cboe, MIAX, and BOX, 42 firms access only one of the three exchanges.
Not only is there not an actual regulatory requirement to connect to every options exchange, the Exchange believes there is also no “de facto” or practical requirement as well, as further evidenced by the broker-dealer membership analysis of the options exchanges discussed above. As noted above, this is evidenced by the fact that one MIAX Pearl Options Market Maker terminated their MIAX Pearl Options membership effective January 1, 2023 as a direct result of the proposed connectivity and port fee changes on MIAX Pearl Options (which are similar to the changes proposed herein). Indeed, broker-dealers choose if and how to access a particular exchange and because it is a choice, the Exchange must set reasonable pricing, otherwise prospective members would not connect and existing members would disconnect from the Exchange. The decision to become a member of an exchange, particularly for registered market makers, is complex, and not solely based on the non-transactional costs assessed by an exchange. As noted herein, specific factors include, but are not limited to: (i) an exchange's available liquidity in options series; (ii) trading functionality offered on a particular market; (iii) product offerings; (iv) customer service on an exchange; and (v) transactional pricing. Becoming a member of the exchange does not “lock” a potential member into a market or diminish the overall competition for exchange services.
In lieu of becoming a member at each options exchange, a market participant may join one exchange and elect to have their orders routed in the event that a better price is available on an away market. Nothing in the Order Protection Rule requires a firm to become a Member at—or establish connectivity to—the Exchange.
With respect to the submission of orders, Members may also choose not to purchase any connection from the Exchange, and instead rely on the port of a third party to submit an order. For example, a third-party broker-dealer Member of the Exchange may be utilized by a retail investor to submit orders into an exchange. An institutional investor may utilize a broker-dealer, a service bureau,
Non-Member third-parties, such as service bureaus and extranets, resell the Exchange's connectivity. This indirect connectivity is another viable alternative for market participants to trade on the Exchange without connecting directly to the Exchange (and thus not pay the Exchange's connectivity fees), which alternative is already being used by non-Members and further constrains the price that the Exchange is able to charge for connectivity and other access fees to its market. The Exchange notes that it could, but chooses not to, preclude market participants from reselling its connectivity. Unlike other exchanges, the Exchange also does not currently assess fees on third-party resellers on a per customer basis (
The Exchange is obligated to regulate its Members and secure access to its environment. In order to properly regulate its Members and secure the trading environment, the Exchange takes measures to ensure access is monitored and maintained with various controls. Connectivity and ports are methods utilized by the Exchange to grant Members secure access to communicate with the Exchange and exercise trading rights. When a market participant elects to be a Member, and is approved for membership by the Exchange, the Member is granted trading rights to enter orders and/or quotes into Exchange through secure connections.
Again, there is no legal or regulatory requirement that a market participant become a Member of the Exchange. This is again evidenced by the fact that one MIAX Pearl Options Market Maker terminated their MIAX Pearl Options membership effective January 1, 2023 as a direct result of the proposed connectivity and port fee changes on MIAX Pearl Options. If a market participant chooses to become a Member, they may then choose to purchase connectivity beyond the one connection that is necessary to quote or submit orders on the Exchange. Members may freely choose to rely on one or many connections, depending on their business model.
The Exchange began to operate on a single shared network with MIAX Pearl Options when MIAX Pearl commenced operations as a national securities exchange on February 7, 2017.
The Exchange stresses that bifurcating the 10Gb ULL connectivity between the Exchange and MIAX Pearl Options was not designed with the objective to generate an overall increase in access fee revenue. Rather, the proposed change was necessitated by 10Gb ULL connectivity experiencing a significant decrease in port availability mostly driven by connectivity demands of latency sensitive Members that seek to maintain multiple 10Gb ULL connections on every switch in the network. Operating two separate national securities exchanges on a single shared network provided certain benefits, such as streamlined connectivity to multiple exchanges, and simplified exchange infrastructure. However, doing so was no longer sustainable due to ever-increasing capacity constraints and current system limitations. The network is not an unlimited resource. As described more fully in the proposal to bifurcate the 10Gb ULL network,
As stated above, the shared network is not an unlimited resource and its expansion was constrained by MIAX's and MIAX Pearl Options' ability to provide fair and equitable access to all market participants of both markets. Due to the ever-increasing connectivity demands, the Exchange found it necessary to bifurcate 10Gb ULL connectivity to the Exchange's and MIAX Pearl Options' Systems and networks to be able to continue to meet ongoing and future 10Gb ULL connectivity and access demands.
Unlike the switches that provide 1Gb connectivity, the availability for additional 10Gb ULL connections on each switch had significantly decreased. This was mostly driven by the connectivity demands of latency sensitive Members (
Prior to bifurcating the 10Gb ULL network, the Exchange and MIAX Pearl Options continued to add switches to meet ongoing demand for 10Gb ULL connectivity. That was no longer sustainable because simply adding additional switches to expand the
Based on its experience and expertise, the Exchange found the most practical way to increase connectivity availability on its switches was to bifurcate the existing 10Gb ULL networks for the Exchange and MIAX Pearl Options by migrating the exchanges' connections from the shared network onto their own set of switches. Such changes accordingly necessitated a review of the Exchange's previous 10Gb ULL connectivity fees and related costs. The proposed fees are necessary to allow the Exchange to cover ongoing costs related to providing and maintaining such connectivity, described more fully below. The ever increasing connectivity demands that necessitated this change further support that the proposed fees are reasonable because this demand reflects that Members and non-Members believe they are getting value from the 10Gb ULL connections they purchase.
The Exchange announced on August 12, 2022 the planned network change and the January 23, 2023 implementation date to provide market participants adequate time to prepare.
Should the Commission Staff disapprove such fees, it would effectively dictate how an exchange manages its technology and would hamper the Exchange's ability to continue to invest in and fund access services in a manner that allows it to meet existing and anticipated access demands of market participants. Disapproval could also have the adverse effect of discouraging an exchange from optimizing its operations and deploying innovative technology to the benefit of market participants if it believes the Commission would later prevent that exchange from covering its costs and monetizing operational enhancements, thus adversely impacting competition. Also, as noted above, the economic consequences of not being able to better establish fee parity with other exchanges for non-transaction fees hampers the Exchange's ability to compete on transaction fees.
In general, the Exchange believes that exchanges, in setting fees of all types, should meet very high standards of transparency to demonstrate why each new fee or fee increase meets the Exchange Act requirements that fees be reasonable, equitably allocated, not unfairly discriminatory, and not create an undue burden on competition among members and markets. In particular, the Exchange believes that each exchange should take extra care to be able to demonstrate that these fees are based on its costs and reasonable business needs.
In proposing to charge fees for connectivity and port services, the Exchange is especially diligent in assessing those fees in a transparent way against its own aggregate costs of providing the related service, and in carefully and transparently assessing the impact on Members—both generally and in relation to other Members,
As detailed below, the Exchange recently calculated its aggregate annual costs for providing physical 10Gb ULL connectivity to the Exchange at $12,034,554 (or approximately $1,002,880 per month, rounded up to the nearest dollar when dividing the annual cost by 12 months) and its aggregate annual costs for providing Limited Service MEI Ports at $2,157,178 (or approximately $179,765 per month, rounded down to the nearest dollar when dividing the annual cost by 12 months). In order to cover the aggregate costs of providing connectivity to its users (both Members and non-Members
In 2019, the Exchange completed a study of its aggregate costs to produce market data and connectivity (the “Cost Analysis”).
As an initial step, the Exchange determined the total cost for the Exchange and the affiliated markets for each cost driver as part of its 2023 budget review process. The 2023 budget review is a company-wide process that occurs over the course of many months, includes meetings among senior management, department heads, and the Finance Team. Each department head is required to send a “bottom up” budget to the Finance Team allocating costs at the profit and loss account and vendor levels for the Exchange and its affiliated markets based on a number of factors, including server counts, additional hardware and software utilization, current or anticipated functional or non-functional development projects, capacity needs, end-of-life or end-of-service intervals, number of members, market model (
The next step involves determining what portion of the cost allocated to the Exchange pursuant to the above methodology is to be allocated to each core service,
By allocating segmented costs to each core service, the Exchange was able to estimate by core service the potential margin it might earn based on different fee models. The Exchange notes that as a non-listing venue it has five primary sources of revenue that it can potentially use to fund its operations: transaction fees, fees for connectivity and port services, membership fees, regulatory fees, and market data fees. Accordingly, the Exchange must cover its expenses from these five primary sources of revenue. The Exchange also notes that as a general matter each of these sources of revenue is based on services that are interdependent. For instance, the Exchange's system for executing transactions is dependent on physical hardware and connectivity; only Members and parties that they sponsor to participate directly on the Exchange may submit orders to the Exchange; many Members (but not all) consume market data from the Exchange in order to trade on the Exchange; and, the Exchange consumes market data from external sources in order to comply with regulatory obligations. Accordingly, given this interdependence, the allocation of costs to each service or revenue source required judgment of the Exchange and was weighted based on estimates of the Exchange that the Exchange believes are reasonable, as set forth below. While there is no standardized and generally accepted methodology for the allocation of an exchange's costs, the Exchange's methodology is the result of an extensive review and analysis and will be consistently applied going forward for any other potential fee proposals. In
Through the Exchange's extensive updated Cost Analysis, which was again recently further refined, the Exchange analyzed every expense item in the Exchange's general expense ledger to determine whether each such expense relates to the provision of connectivity and port services, and, if such expense did so relate, what portion (or percentage) of such expense actually supports the provision of connectivity and port services, and thus bears a relationship that is, “in nature and closeness,” directly related to network connectivity and port services. In turn, the Exchange allocated certain costs more to physical connectivity and others to ports, while certain costs were only allocated to such services at a very low percentage or not at all, using consistent allocation methodologies as described above. Based on this analysis, the Exchange estimates that the aggregate monthly cost to provide 10Gb ULL connectivity and Limited Service MEI Port services, including both physical 10Gb connections and Limited Service MEI Ports, is $1,182,645 (utilizing the rounded numbers when dividing the annual cost for 10Gb ULL connectivity and annual cost for Limited Service MEI Ports by 12 months, then adding both numbers together), as further detailed below.
The following chart details the individual line-item costs considered by the Exchange to be related to offering physical dedicated 10Gb ULL connectivity via an unshared network as well as the percentage of the Exchange's overall costs that such costs represent for each cost driver (
Below are additional details regarding each of the line-item costs considered by the Exchange to be related to offering physical 10Gb ULL connectivity. While some costs were attempted to be allocated as equally as possible among the Exchange and its affiliated markets, the Exchange notes that some of its cost allocation percentages for certain cost drivers differ when compared to the same cost drivers for the Exchange's affiliated markets in their similar proposed fee changes for connectivity and ports. This is because the Exchange's cost allocation methodology utilizes the actual projected costs of the Exchange (which are specific to the Exchange and are independent of the costs projected and utilized by the Exchange's affiliated markets) to determine its actual costs, which may vary across the Exchange and its affiliated markets based on factors that are unique to each marketplace. The Exchange provides additional explanation below (including the reason for the deviation) for the significant differences.
The Exchange notes that it and its affiliated markets have 184 employees (excluding employees at non-options/equities exchange subsidiaries of Miami International Holdings, Inc. (“MIH”), the holding company of the Exchange and its affiliated markets), and each department leader has direct knowledge of the time spent by each employee with respect to the various tasks necessary to operate the Exchange. Specifically, twice a year, and as needed with additional new hires and new project initiatives, in consultation with employees as needed, managers and department heads assign a percentage of time to every employee and then allocate that time amongst the Exchange and its affiliated markets to determine each market's individual Human Resources expense. Then, managers and department heads assign a percentage of each employee's time allocated to the Exchange into buckets including network connectivity, ports, market data, and other exchange services. This process ensures that every employee is 100% allocated, ensuring there is no double counting between the Exchange and its affiliated markets.
For personnel costs (Human Resources), the Exchange calculated an allocation of employee time for employees whose functions include providing and maintaining physical connectivity and performance thereof (primarily the Exchange's network infrastructure team, which spends most of their time performing functions necessary to provide physical connectivity). As described more fully above, the Exchange's parent company allocates costs to the Exchange and its affiliated markets and then a portion of the Human Resources costs allocated to the Exchange is then allocated to connectivity. From that portion allocated to the Exchange that applied to connectivity, the Exchange then allocated a weighted average of 42% of each employee's time from the above group. The Exchange also allocated Human Resources costs to provide physical connectivity to a limited subset of personnel with ancillary functions related to establishing and maintaining such connectivity (such as information security, sales, membership, and finance personnel). The Exchange allocated cost on an employee-by-employee basis (
The estimates of Human Resources cost were therefore determined by consulting with such department leaders, determining which employees
Lastly, the Exchange notes that senior level executives' time was only allocated to the 10Gb ULL connectivity related Human Resources costs to the extent that they are involved in overseeing tasks related to providing physical connectivity. The Human Resources cost was calculated using a blended rate of compensation reflecting salary, equity and bonus compensation, benefits, payroll taxes, and 401(k) matching contributions.
The Connectivity cost driver includes external fees paid to connect to other exchanges and third parties, cabling and switches required to operate the Exchange. The Connectivity cost driver is more narrowly focused on technology used to complete connections to the Exchange and to connect to external markets. The Exchange notes that its connectivity to external markets is required in order to receive market data to run the Exchange's matching engine and basic operations compliant with existing regulations, primarily Regulation NMS.
The Exchange relies on various connectivity providers for connectivity to the entire U.S. options industry, and infrastructure services for critical components of the network that are necessary to provide and maintain its System Networks and access to its System Networks via 10Gb ULL connectivity. Specifically, the Exchange utilizes connectivity providers to connect to other national securities exchanges and the Options Price Reporting Authority (“OPRA”). The Exchange understands that these service providers provide services to most, if not all, of the other U.S. exchanges and other market participants. Connectivity provided by these service providers is critical to the Exchanges daily operations and performance of its System Networks to which market participants connect to via 10Gb ULL connectivity. Without these services providers, the Exchange would not be able to connect to other national securities exchanges, market data providers or OPRA and, therefore, would not be able to operate and support its System Networks. The Exchange does not employ a separate fee to cover its connectivity provider expense and recoups that expense, in part, by charging for 10Gb ULL connectivity.
The next cost driver consists of internet Services and external market data. Internet services includes third-party service providers that provide the internet, fiber and bandwidth connections between the Exchange's networks, primary and secondary data centers, and office locations in Princeton and Miami.
External market data includes fees paid to third parties, including other exchanges, to receive market data. The Exchange includes external market data fee costs towards the provision of 10Gb ULL connectivity because such market data is necessary for certain services related to connectivity, including pre-trade risk checks and checks for other conditions (
The Exchange relies on various content service providers for data feeds for the entire U.S. options industry, as well as content for critical components of the network that are necessary to provide and maintain its System Networks and access to its System Networks via 10Gb ULL connectivity. Specifically, the Exchange utilizes content service providers to receive market data from OPRA, other exchanges and market data providers. The Exchange understands that these service providers provide services to most, if not all, of the other U.S. exchanges and other market participants. Market data provided these service providers is critical to the Exchanges daily operations and performance of its System Networks to which market participants connect to via 10Gb ULL connectivity. Without these services providers, the Exchange would not be able to receive market data and, therefore, would not be able to operate and support its System Networks. The Exchange does not employ a separate fee to cover its content service provider expense and recoups that expense, in part, by charging for 10Gb ULL connectivity.
Lastly, the Exchange notes that the actual dollar amounts allocated as part of the second step of the 2023 budget process differ among the Exchange and its affiliated markets for the internet Services and External Market Data cost driver, even though but for MIAX Emerald, the allocation percentages are generally consistent across markets (
Data Center costs includes an allocation of the costs the Exchange incurs to provide physical connectivity in the third-party data centers where it maintains its equipment (such as dedicated space, security services, cooling and power). The Exchange notes that it does not own the Primary Data Center or the Secondary Data Center, but instead, leases space in data centers operated by third parties. The Exchange has allocated a high percentage of the Data Center cost (60.6%) to physical 10Gb ULL connectivity because the third-party data centers and the Exchange's physical equipment contained therein is the most direct cost in providing physical access to the Exchange. In other words, for the Exchange to operate in a dedicated space with connectivity by market participants to a physical trading platform, the data centers are a very tangible cost, and in turn, if the Exchange did not maintain such a presence then physical connectivity would be of no value to market participants.
Hardware and Software Licenses includes hardware and software licenses used to operate and monitor physical assets necessary to offer physical connectivity to the Exchange.
All physical assets, software, and hardware used to provide 10Gb ULL connectivity, which also includes assets used for testing and monitoring of Exchange infrastructure, were valued at cost, and depreciated or leased over periods ranging from three to five years. Thus, the depreciation cost primarily relates to servers necessary to operate the Exchange, some of which are owned by the Exchange and some of which are leased by the Exchange in order to allow efficient periodic technology refreshes. The Exchange also included in the Depreciation cost driver certain budgeted improvements that the Exchange intends to capitalize and depreciate with respect to 10Gb ULL connectivity in the near-term. As with the other allocated costs in the Exchange's updated Cost Analysis, the Depreciation cost was therefore narrowly tailored to depreciation related to 10Gb ULL connectivity. As noted above, the Exchange allocated 61.6% of its allocated depreciation costs to providing physical 10Gb ULL connectivity.
The Exchange also notes that this allocation differs from its affiliated markets due to a number of factors, such as the age of physical assets and software (
Finally, as with other exchange products and services, a portion of general shared expenses was allocated to overall physical connectivity costs. These general shared costs are integral to exchange operations, including its ability to provide physical connectivity. Costs included in general shared expenses include office space and office expenses (
The Exchange employed a process to determine a reasonable percentage to allocate general shared expenses to 10Gb ULL connectivity pursuant to its multi-layered allocation process. First, general expenses were allocated among the Exchange and affiliated markets as described above. Then, the general shared expense assigned to the Exchange was allocated across core services of the Exchange, including connectivity. Then, these costs were further allocated to sub-categories within the final categories,
The Exchange notes that the 49.1% allocation of general shared expenses for physical 10Gb ULL connectivity is higher than that allocated to general shared expenses for Limited Service MEI Ports. This is based on its allocation methodology that weighted costs attributable to each core service. While physical connectivity has several areas where certain tangible costs are heavily weighted towards providing such service (
After determining the approximate allocated monthly cost related to 10Gb connectivity, the total monthly cost for 10Gb ULL connectivity of $1,002,880 was divided by the number of physical 10Gb ULL connections the Exchange maintained at the time that proposed pricing was determined (93), to arrive at a cost of approximately $10,784 per month, per physical 10Gb ULL connection. Due to the nature of this particular cost, this allocation methodology results in an allocation among the Exchange and its affiliated markets based on set quantifiable criteria,
The following chart details the individual line-item costs considered by the Exchange to be related to offering Limited Service MEI Ports as well as the percentage of the Exchange's overall costs such costs represent for such area (
Below are additional details regarding each of the line-item costs considered by the Exchange to be related to offering Limited Service MEI Ports. While some costs were attempted to be allocated as equally as possible among the Exchange and its affiliated markets, the Exchange notes that some of its cost allocation percentages for certain cost drivers differ when compared to the same cost drivers for the Exchange's affiliated markets in their similar proposed fee changes for connectivity and ports. This is because the Exchange's cost allocation methodology utilizes the actual projected costs of the Exchange (which are specific to the Exchange, and are independent of the costs projected and utilized by the Exchange's affiliated markets) to determine its actual costs, which may vary across the Exchange and its affiliated markets based on factors that are unique to each marketplace. The Exchange provides additional explanation below (including the reason for the deviation) for the significant differences.
With respect to Limited Service MEI Ports, the Exchange calculated Human Resources cost by taking an allocation of employee time for employees whose functions include providing Limited Service MEI Ports and maintaining performance thereof (including a broader range of employees such as technical operations personnel, market operations personnel, and software engineering personnel) as well as a limited subset of personnel with ancillary functions related to maintaining such connectivity (such as
The Connectivity cost includes external fees paid to connect to other exchanges and cabling and switches, as described above.
The next cost driver consists of internet services and external market data. Internet services includes third-party service providers that provide the internet, fiber and bandwidth connections between the Exchange's networks, primary and secondary data centers, and office locations in Princeton and Miami. For purposes of Limited Service MEI Ports, the Exchange also includes a portion of its costs related to external market data. External market data includes fees paid to third parties, including other exchanges, to receive and consume market data from other markets. The Exchange includes external market data costs towards the provision of Limited Service MEI Ports because such market data is necessary (in addition to physical connectivity) to offer certain services related to such ports, such as validating orders on entry against the NBBO and checking for other conditions (
The Exchange notes that the allocation for the internet Services and External Market Data cost driver is greater than that of its affiliate, MIAX Pearl Options, as MIAX allocated 7.2% of its internet Services and External Market Data expense towards Limited Service MEI Ports, while MIAX Pearl Options allocated 1.4% to its Full Service MEO Ports for the same cost driver. The allocation percentages set forth above differ because they directly correspond with the number of applicable ports utilized on each exchange. For May 2023, MIAX Market Makers utilized 1,770 Limited Service MEI ports and MIAX Emerald Market Makers utilized 1,017 Limited Service MEI ports. When compared to Full Service Port (Bulk and Single) usage, for May 2023, MIAX Pearl Options Members utilized only 384 Full Service MEO Ports (Bulk and Single), far fewer than number of Limited Service MEI Ports utilized by Market Makers on MIAX and MIAX Emerald, thus resulting in a smaller cost allocation. There is increased cost associated with supporting a higher number of ports (requiring more hardware and other technical infrastructure and internet Service), thus the Exchange allocates a higher percentage of expense than MIAX Pearl Options, which has a lower port count.
Data Center costs includes an allocation of the costs the Exchange incurs to provide Limited Service MEI Ports in the third-party data centers where it maintains its equipment as well as related costs for market data to then enter the Exchange's system via Limited Service MEI Ports (the Exchange does not own the Primary Data Center or the Secondary Data Center, but instead, leases space in data centers operated by third parties).
Hardware and Software Licenses includes hardware and software licenses used to monitor the health of the order entry services provided by the Exchange, as described above.
The Exchange notes that this allocation is greater than its affiliate, MIAX Pearl Options, as MIAX allocated 7.2% of its Hardware and Software Maintenance and License expense towards Limited Service MEI Ports, while MIAX Pearl Options allocated 1.4% to its Full Service MEO Ports (Bulk and Single) for the same category of expense. The allocation percentages set forth above differ because they correspond with the number of applicable ports utilized on each exchange. For May 2023, MIAX Market Makers utilized 1,770 Limited Service MEI ports and MIAX Emerald Market Makers utilized 1,017 Limited Service MEI Ports. When compared to Full Service Port (Bulk and Single) usage, for May 2023, MIAX Pearl Options Members utilized only 384 Full Service MEO Ports (Bulk and Single), far fewer than number of Limited Service MEI Ports utilized by Market Makers on MIAX and MIAX Emerald, thus resulting in a smaller cost allocation. There is increased cost associated with supporting a higher number of ports (requiring more hardware and other technical infrastructure), thus the Exchange allocates a higher percentage of expense than MIAX Pearl Options, which has a lower port count.
The vast majority of the software the Exchange uses to provide Limited Service MEI Ports has been developed in-house and the cost of such development, which takes place over an extended period of time and includes not just development work, but also quality assurance and testing to ensure the software works as intended, is depreciated over time once the software is activated in the production environment. Hardware used to provide Limited Service MEI Ports includes equipment used for testing and monitoring of order entry infrastructure and other physical equipment the Exchange purchased and is also depreciated over time.
All hardware and software, which also includes assets used for testing and monitoring of order entry infrastructure, were valued at cost, depreciated or leased over periods ranging from three to five years. Thus, the depreciation cost primarily relates to servers necessary to operate the Exchange, some of which is
The Exchange notes that this allocation differs from its affiliated markets due to a number of factors, such as the age of physical assets and software (
Finally, a portion of general shared expenses was allocated to overall Limited Service MEI Ports costs as without these general shared costs the Exchange would not be able to operate in the manner that it does and provide Limited Service MEI Ports. The costs included in general shared expenses include general expenses of the Exchange, including office space and office expenses (
Lastly, the Exchange notes that this allocation is greater than its affiliate, MIAX Pearl Options, as MIAX allocated 9.8% of its Allocated Shared Expense towards Limited Service MEI Ports, while MIAX Pearl Options allocated 3.6% to its Full Service MEO Ports (Bulk and Single) for the same category of expense. The allocation percentages set forth above differ because they correspond with the number of applicable ports utilized on each exchange. For May 2023, MIAX Market Makers utilized 1,770 Limited Service MEI Ports and MIAX Emerald Market Makers utilized 1,017 Limited Service MEI ports. When compared to Full Service Port (Bulk and Single) usage, for May 2023, MIAX Pearl Options Members utilized only 384 Full Service MEO Ports (Bulk and Single), far fewer than number of Limited Service MEI Ports utilized by Market Makers on MIAX, thus resulting in a smaller cost allocation. There is increased cost associated with supporting a higher number of ports (requiring more hardware and other technical infrastructure), thus the Exchange allocates a higher percentage of expense than MIAX Pearl Options which has a lower port count.
Based on May 2023 data, the total monthly cost allocated to Limited Service MEI Ports of $179,765 was divided by the total number of Limited Service MEI Ports (including the two free Limited Service MEI Ports per matching engine that each Member receives) the Exchange maintained at the time that proposed pricing was determined (1,770), to arrive at a cost of approximately $102 per month, per charged Limited Service MEI Port. In the prior filings, the Exchange did not include the expense of maintaining the two free Limited Service MEI Ports per matching engine that each Member receives in this paragraph but did include them in the total expense amounts. The total number of Limited Service MEI Ports that the Exchange does not charge for is 1,146 and amounts to a total expense of $116,892 per month to the Exchange.
In conducting its Cost Analysis, the Exchange did not allocate any of its expenses in full to any core services (including physical connectivity or Limited Service MEI Ports) and did not double-count any expenses. Instead, as described above, the Exchange allocated applicable cost drivers across its core services and used the same Cost Analysis to form the basis of this proposal and the filings the Exchange submitted proposing fees for proprietary data feeds offered by the Exchange. For instance, in calculating the Human Resources expenses to be allocated to physical connections based upon the above described methodology, the Exchange has a team of employees dedicated to network infrastructure and with respect to such employees the Exchange allocated network infrastructure personnel with a high percentage of the cost of such personnel (42%) given their focus on functions necessary to provide physical connections. The salaries of those same personnel were allocated only 8.4% to Limited Service MEI Ports and the remaining 49.6% was allocated to 1Gb connectivity, other port services, transaction services, membership services and market data. The Exchange did not allocate any other Human Resources expense for providing physical connections to any other employee group, outside of a smaller allocation of 17.8% for 10Gb ULL
In total, the Exchange allocated 25.6% of its personnel costs to providing 10Gb ULL and 1Gb ULL connectivity and 5.8% of its personnel costs to providing Limited Service MEI Ports, for a total allocation of 31.4% Human Resources expense to provide these specific connectivity and port services. In turn, the Exchange allocated the remaining 68.6% of its Human Resources expense to membership services, transaction services, other port services and market data. Thus, again, the Exchange's allocations of cost across core services were based on real costs of operating the Exchange and were not double-counted across the core services or their associated revenue streams.
As another example, the Exchange allocated depreciation expense to all core services, including physical connections and Limited Service MEI Ports, but in different amounts. The Exchange believes it is reasonable to allocate the identified portion of such expense because such expense includes the actual cost of the computer equipment, such as dedicated servers, computers, laptops, monitors, information security appliances and storage, and network switching infrastructure equipment, including switches and taps that were purchased to operate and support the network. Without this equipment, the Exchange would not be able to operate the network and provide connectivity services to its Members and non-Members and their customers. However, the Exchange did not allocate all of the depreciation and amortization expense toward the cost of providing connectivity services, but instead allocated approximately 67.9% of the Exchange's overall depreciation and amortization expense to connectivity services (61.6% attributed to 10Gb ULL physical connections and 6.3% to Limited Service MEI Ports). The Exchange allocated the remaining depreciation and amortization expense (approximately 32.1%) toward the cost of providing transaction services, membership services, other port services and market data.
The Exchange notes that its revenue estimates are based on projections across all potential revenue streams and will only be realized to the extent such revenue streams actually produce the revenue estimated. The Exchange does not yet know whether such expectations will be realized. For instance, in order to generate the revenue expected from connectivity, the Exchange will have to be successful in retaining existing clients that wish to maintain physical connectivity and/or Limited Service MEI Ports or in obtaining new clients that will purchase such services. Similarly, the Exchange will have to be successful in retaining a positive net capture on transaction fees in order to realize the anticipated revenue from transaction pricing.
The Exchange notes that the Cost Analysis is based on the Exchange's 2023 fiscal year of operations and projections. It is possible, however, that actual costs may be higher or lower. To the extent the Exchange sees growth in use of connectivity services it will receive additional revenue to offset future cost increases. However, if use of connectivity services is static or decreases, the Exchange might not realize the revenue that it anticipates or needs in order to cover applicable costs. Accordingly, the Exchange is committing to conduct a one-year review after implementation of these fees. The Exchange expects that it may propose to adjust fees at that time, to increase fees in the event that revenues fail to cover costs and a reasonable mark-up of such costs. Similarly, the Exchange may propose to decrease fees in the event that revenue materially exceeds our current projections. In addition, the Exchange will periodically conduct a review to inform its decision making on whether a fee change is appropriate (
The proposed fees will allow the Exchange to cover certain costs incurred by the Exchange associated with providing and maintaining necessary hardware and other network infrastructure as well as network monitoring and support services; without such hardware, infrastructure, monitoring and support the Exchange would be unable to provide the connectivity and port services. Much of the cost relates to monitoring and analysis of data and performance of the network via the subscriber's connection(s). The above cost, namely those associated with hardware, software, and human capital, enable the Exchange to measure network performance with nanosecond granularity. These same costs are also associated with time and money spent seeking to continuously improve the network performance, improving the subscriber's experience, based on monitoring and analysis activity. The Exchange routinely works to improve the performance of the network's hardware and software. The costs associated with maintaining and enhancing a state-of-the-art exchange network is a significant expense for the Exchange, and thus the Exchange believes that it is reasonable and appropriate to help offset those costs by amending fees for connectivity services. Subscribers, particularly those of 10Gb ULL connectivity, expect the Exchange to provide this level of support to connectivity so they continue to receive the performance they expect. This differentiates the Exchange from its competitors. As detailed above, the Exchange has five primary sources of revenue that it can potentially use to fund its operations: transaction fees, fees for connectivity services, membership and regulatory fees, and market data fees. Accordingly, the Exchange must cover its expenses from these five primary sources of revenue.
The Exchange's Cost Analysis estimates the annual cost to provide 10Gb ULL connectivity services will equal $12,034,554. Based on current 10Gb ULL connectivity services usage, the Exchange would generate annual revenue of approximately $15,066,000. The Exchange believes this represents a modest profit of 20% when compared to
The Exchange's Cost Analysis estimates the annual cost to provide Limited Service MEI Port services will equal $2,157,178. Based on current Limited Service MEI Port services usage, the Exchange would generate annual revenue of approximately $3,300,600. The Exchange believes this would result in an estimated profit margin of 35% after calculating the cost of providing Limited Service MEI Port services, which profit margin could decrease over time.
Based on the above discussion, the Exchange believes that even if the Exchange earns the above revenue or incrementally more or less, the proposed fees are fair and reasonable because they will not result in pricing that deviates from that of other exchanges or a supra-competitive profit, when comparing the total expense of the Exchange associated with providing 10Gb ULL connectivity and Limited Service MEI Port services versus the total projected revenue of the Exchange associated with network 10Gb ULL connectivity and Limited Service MEI Port services.
The Exchange also notes that this the resultant profit margin differs slightly from the profit margins set forth in similar fee filings by its affiliated markets. This is not atypical among exchanges and is due to a number of factors that differ between these four markets, including: different market models, market structures, and product offerings (equities, options, price-time, pro-rata, simple, and complex); different pricing models; different number of market participants and connectivity subscribers; different maintenance and operations costs, as described in the cost allocation methodology above; different technical architecture (
Further, the Exchange proposes to charge rates that are comparable to, or lower than, similar fees for similar products charged by competing exchanges. For example, for 10Gb ULL connectivity, the Exchange proposes a lower fee than the fee charged by Nasdaq for its comparable 10Gb Ultra fiber connection ($13,500 per month for the Exchange vs. $15,000 per month for Nasdaq).
The Exchange has operated at a cumulative net annual loss since it launched operations in 2012.
The Exchange notes that its revenue estimate is based on projections and will only be realized to the extent customer activity produces the revenue estimated. As a competitor in the hyper-competitive exchange environment, and an exchange focused on driving competition, the Exchange does not yet know whether such projections will be realized. For instance, in order to generate the revenue expected from 10Gb ULL connectivity and Limited Service MEI Ports, the Exchange will have to be successful in retaining existing clients that wish to utilize 10Gb ULL connectivity and Limited Service MEI Ports and/or obtaining new clients that will purchase such access. To the extent the Exchange is successful in encouraging new clients to utilize 10Gb ULL connectivity and Limited Service MEI Ports, the Exchange does not believe it should be penalized for such success. To the extent the Exchange has mispriced and experiences a net loss in connectivity clients or in transaction activity, the Exchange could experience a net reduction in revenue. While the Exchange is supportive of transparency around costs and potential margins (applied across all exchanges), as well as periodic review of revenues and applicable costs (as discussed below), the Exchange does not believe that these estimates should form the sole basis of whether or not a proposed fee is reasonable or can be adopted. Instead, the Exchange believes that the information should be used solely to confirm that an Exchange is not earning—or seeking to earn—supra-competitive profits. The Exchange believes the Cost Analysis and related projections in this filing demonstrate this fact.
The Exchange is owned by a holding company that is the parent company of four exchange markets and, therefore, the Exchange and its affiliated markets must allocate shared costs across all of those markets accordingly, pursuant to
Further, as is reflected in the proposal, the Exchange continuously and aggressively works to control its costs as a matter of good business practice. A potential profit margin should not be evaluated solely on its size; that assessment should also consider cost management and whether the ultimate fee reflects the value of the services provided. For example, a profit margin on one exchange should not be deemed excessive where that exchange has been successful in controlling its costs, but not excessive on another exchange where that exchange is charging comparable fees but has a lower profit margin due to higher costs. Doing so could have the perverse effect of not incentivizing cost control where higher costs alone could be used to justify fees increases.
The Exchange believes that the proposed fees are reasonable, fair, equitable, and not unfairly discriminatory because they are designed to align fees with services provided and will apply equally to all subscribers.
The Exchange believes that the proposed fees are equitably allocated among users of the network connectivity and port alternatives, as the users of 10Gb ULL connections consume substantially more bandwidth and network resources than users of 1Gb ULL connection. Specifically, the Exchange notes that 10Gb ULL connection users account for more than 99% of message traffic over the network, driving other costs that are linked to capacity utilization, as described above, while the users of the 1Gb ULL connections account for less than 1% of message traffic over the network. In the Exchange's experience, users of the 1Gb connections do not have the same business needs for the high-performance network as 10Gb ULL users.
The Exchange's high-performance network and supporting infrastructure (including employee support), provides unparalleled system throughput with the network ability to support access to several distinct options markets. To achieve a consistent, premium network performance, the Exchange must build out and maintain a network that has the capacity to handle the message rate requirements of its most heavy network consumers. These billions of messages per day consume the Exchange's resources and significantly contribute to the overall network connectivity expense for storage and network transport capabilities. The Exchange must also purchase additional storage capacity on an ongoing basis to ensure it has sufficient capacity to store these messages to satisfy its record keeping requirements under the Exchange Act.
The Exchange designed the proposed tiered-pricing structure to link fees to the number of connections a firm purchases due to the strong correlation between number of connections and related cost burdens imposed upon the Exchange from the largest connection (Limited MEI Ports) users. This is explicitly designed to link fees to related costs imposed on the exchange. Market Makers that purchase more connections cause significantly greater costs and expenses to the Exchange, whereas the opposite is also true. With this in mind, the Exchange proposes (a) no fee or lower fees for Market Makers who utilize fewer Limited Service MEI Ports since those Market Makers generally tend to send the fewest number of orders and messages over those connections, imposing substantially lower costs;
The Exchange believes that the proposed fees are equitably allocated among users of the network connectivity alternatives because it is specifically designed to ensure that those users that create the highest costs burden on the Exchange pay the highest fees. As is discussed below, the cost burden associated with Market Makers that use the maximum number of Limited Service MEI ports is significantly higher than costs associated with Market Makers that use fewer of these ports.
As noted above, users with the greatest number of Limited Service MEI Ports consume a disproportionate amount of bandwidth and network resources. Specifically, for 10Gb ULL connectivity, Market Makers who take the maximum number of Limited Service MEI Ports account for greater
The Exchange's high performance network solutions and supporting infrastructure (including employee support) provide increased system throughput and the capacity to handle approximately 18 million quote messages per second. This is important for the efficient operation of the Exchange and to ensure system resiliency in times of stress (abnormally high capacity demand). For example, based on May 2023 trading results, the Exchange handled more than 12.3 billion quotes on an average day, and more than 271 billion quotes in an average month. Of that total, Market Makers with the maximum amount of Limited Service MEI Ports generated more than 156 billion quotes (and more than 7 billion quotes on an average day), and Market Makers who utilized only the two free Limited Service MEI Ports per matching engine generated approximately 78 billion quotes (and approximately 3.5 billion quotes on an average day). Also for May 2023, Market Makers who utilized 7 to 9 Limited Service MEI ports submitted an average of 1.3 billion quotes per day and Market Makers who utilized 5-6 Limited Service MEI Ports submitted an average of 356 million quotes on an average day. In May 2023, the Exchange did not have any Market Makers that utilized only 3-4 Limited Service MEI Ports.
To achieve consistent, premium network performance, the Exchange must build and maintain a network that has the capacity to handle the message rate requirements of its heaviest network consumers during anticipated peak market conditions. The resultant need to support billions of messages per day consume the Exchange's resources and significantly contribute to the overall network connectivity expense for storage and network transport capabilities. This need also requires the Exchange to purchase additional storage capacity on an ongoing basis to ensure it has sufficient capacity to store these messages as part of it surveillance program and to satisfy its record keeping requirements under the Exchange Act.
According to the statistics provided above for May 2023, Market Makers with the maximum amount of Limited Service MEI Ports sent almost twice as many orders as those that utilize the minimal amount of Limited Service MEI Ports. Due to latency consideration, those Market Makers typically send the same order over multiple Limited Service MEI Ports to attempt to execute against the same contra-side order resting on the Book. This results in a disproportionate number of messages being returned to the Market Maker notifying them which order did or did not result in an execution. This results in an increased amount of message traffic generated by Market Makers who utilize the maximum amount of Limited Service MEI Ports. These Market Makers use a disproportionate amount of System capacity and, therefore, put greater strain on the Exchange's network and other resources discussed below. This is due to higher order to trade ratios that results in increased message traffic that is not recouped via a separate Exchange fee based on each message sent by a Market Maker or other similar fee. The Exchange must purchase and maintain additional storage capacity on an ongoing basis to ensure it has sufficient capacity to store these messages as part of it surveillance program and to satisfy its record keeping requirements under the Exchange Act.
The following presents another example of how the cost burden associated with Members that use the maximum number of Limited Service MEI ports is significantly higher than costs associated with Members that use fewer of these ports. Members with the maximum amount of Limited Service MEI Ports frequently add, drop, or rebalance connections mid-month to determine which connections have the least latency (and engage in the same practice with Limited Service MEI Ports). This requires constant System expansion to meet Market Maker demand for additional Limited Service MEI Ports and results in limited available System headroom,
Finally, charging an incrementally higher fee (above the first two that are provided free of charge) to firms that choose to purchase more Limited Service MEI Ports does not provide those firms with any competitive advantage or incentivize firms to purchase additional Limited Service MEI Ports. Certain firms choose to purchase additional Limited Service MEI Ports based on their own particular trading/quoting strategies and, if anything, higher fees act as a disincentive for inefficient and excessive use of Exchange bandwidth and capacity. The Exchange notes that firms may continue to choose to only utilize the two free Limited Service MEI Ports to accommodate their own trading/quoting strategies, business models, and for Market Makers, to meet their quoting obligations. The proposed pricing structure is designed to address the above described increased pull on Exchange resources by firms that choose to purchase the maximum number of Limited Service MEI Ports and to incentivize efficient port usage.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange believes the proposed fees will not result in any burden on intra-market competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed fees will allow the Exchange to recoup some of its costs in providing 10Gb ULL connectivity and Limited Service MEI Ports at below market rates to market participants since the Exchange launched operations. As described above, the Exchange has operated at a cumulative net annual loss since it launched operations in 2012
Further, the Exchange does not believe that the proposed fee increase for the 10Gb ULL connection change would place certain market participants at the Exchange at a relative disadvantage compared to other market participants or affect the ability of such market participants to compete. As is the case with the current proposed flat fee, the proposed fee would apply uniformly to all market participants regardless of the number of connections they choose to purchase. The proposed fee does not favor certain categories of market participants in a manner that would impose an undue burden on competition.
The Exchange does not believe that the proposed rule change would place certain market participants at the Exchange at a relative disadvantage compared to other market participants or affect the ability of such market participants to compete. In particular, Exchange personnel has been informally discussing potential fees for connectivity services with a diverse group of market participants that are connected to the Exchange (including large and small firms, firms with large connectivity service footprints and small connectivity service footprints, as well as extranets and service bureaus) for several months leading up to that time. The Exchange does not believe the proposed fees for connectivity services would negatively impact the ability of Members, non-Members (extranets or service bureaus), third-parties that purchase the Exchange's connectivity and resell it, and customers of those resellers to compete with other market participants or that they are placed at a disadvantage.
The Exchange does anticipate, however, that some market participants may reduce or discontinue use of connectivity services provided directly by the Exchange in response to the proposed fees. In fact, as mentioned above, one MIAX Pearl Options Market Maker terminated their MIAX Pearl Options membership on January 1, 2023 as a direct result of the similar proposed fee changes by MIAX Pearl Options.
Lastly, the Exchange does not believe its proposal to implement incrementally higher fees for those that purchase more Limited Service MEI Ports will place certain market participants at a relative disadvantage to other market participants because those with the greatest number of Limited Service MEI Ports tend generate a disproportionate amount of messages and order traffic, usually billions per day across the Exchange, resulting in greater demands and additional burdens on Exchange resources (as described above). The firms that purchase numerous Limited Service MEI Ports do so for competitive reasons and choose to utilize numerous connections based on their business needs, which include a desire to attempt to access the market quicker using the lowest latency connections. These firms are generally engaged in sending liquidity removing orders to the Exchange and seek to add more connections to competitively access resting liquidity. All firms purchase the amount of Limited Service MEI Ports they require based on their own business decisions and similarly situated firms are subject to the same fees.
The Exchange also does not believe that the proposed rule change and price increase will result in any burden on inter-market competition that is not necessary or appropriate in furtherance of the purposes of the Act. As this is a fee increase, arguably if set too high, this fee would make it easier for other exchanges to compete with the Exchange. Only if this were a substantial fee decrease could this be considered a form of predatory pricing. In contrast, the Exchange believes that, without this fee increase, we are potentially at a competitive disadvantage to certain other exchanges that have in place higher fees for similar services. As we have noted, the Exchange believes that connectivity fees can be used to foster more competitive transaction pricing and additional infrastructure investment and there are other options markets of which market
The Exchange also believes that the proposed fees for 10Gb connectivity are appropriate and warranted and would not impose any burden on competition. This is a technology driven change designed to meet customer needs. The proposed fees would assist the Exchange in recovering costs related to providing dedicated 10Gb connectivity to the Exchange while enabling it to continue to meet current and anticipated demands for connectivity by its Members and other market participants. Separating its 10Gb network from MIAX Pearl Options enables the Exchange to better compete with other exchanges by ensuring it can continue to provide adequate connectivity to existing and new Members, which may increase in ability to compete for order flow and deepen its liquidity pool, improving the overall quality of its market. The proposed rates for 10Gb ULL connectivity are structured to enable the Exchange to bifurcate its 10Gb ULL network shared with MIAX Pearl Options so that it can continue to meet current and anticipated connectivity demands of all market participants.
Similarly, and also in connection with a technology change, Cboe Exchange, Inc. (“Cboe”) amended its access and connectivity fees, including port fees.
The rule structure for options exchanges are also fundamentally different from those of equities exchanges. In particular, options market participants are not forced to connect to (and purchase market data from) all options exchanges. For example, there are many order types that are available in the equities markets that are not utilized in the options markets, which relate to mid-point pricing and pegged pricing which require connection to the SIPs and each of the equities exchanges in order to properly execute those orders in compliance with best execution obligations. Additionally, in the options markets, the linkage routing and trade through protection are handled by the exchanges, not by the individual members. Thus not connecting to an options exchange or disconnecting from an options exchange does not potentially subject a broker-dealer to violate order protection requirements. Gone are the days when the retail brokerage firms (such as Fidelity, Schwab, and eTrade) were members of the options exchanges—they are not members of the Exchange or its affiliates, they do not purchase connectivity to the Exchange, and they do not purchase market data from the Exchange. Accordingly, not only is there not an actual regulatory requirement to connect to every options exchange, the Exchange believes there is also no “de facto” or practical requirement as well, as further evidenced by the recent significant reduction in the number of broker-dealers that are members of all options exchanges.
The Cboe proposal also referenced the National Market System Plan Governing the Consolidated Audit Trail (“CAT NMS Plan”),
Cboe also filed to establish a monthly fee for Certification Logical Ports of $250 per Certification Logical Port.
In its statutory basis, Cboe justified the new port fee by stating that it believed the Certification Logical Port fee were reasonable because while such ports were no longer completely free, TPHs and non-TPHs would continue to be entitled to receive free of charge one Certification Logical Port for each type of logical port that is currently offered in the production environment.
The Cboe fee proposals described herein were filed subsequent to the D.C. Circuit decision in
In conclusion, as discussed thoroughly above, the Exchange regrettably believes that the application of the Revised Review Process and Staff Guidance has adversely affected inter-market competition among legacy and non-legacy exchanges by impeding the ability of non-legacy exchanges to adopt or increase fees for their market data and access services (including connectivity and port products and services) that are on parity or commensurate with fee levels previously established by legacy exchanges. Since the adoption of the Revised Review Process and Staff Guidance, and even more so recently, it has become extraordinarily difficult to adopt or increase fees to generate revenue necessary to invest in systems, provide innovative trading products and solutions, and improve competitive standing to the benefit of non-legacy exchanges' market participants. Although the Staff Guidance served an important policy goal of improving disclosures and requiring exchanges to justify that their market data and access fee proposals are fair and reasonable, it has also negatively impacted non-legacy exchanges in particular in their efforts to adopt or increase fees that would enable them to more fairly compete with legacy exchanges, despite providing enhanced disclosures and rationale under both competitive and cost basis approaches provided for by the Revised Review Process and Staff Guidance to support their proposed fee changes.
The Exchange received one comment letter on the Initial Proposal, one comment letter on the Second Proposal, one comment letter on the Third Proposal, and one comment letter on the Fourth Proposal, all from the same commenter.
The foregoing rule change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act,
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is filing a proposal to amend the MIAX Pearl Options Exchange Fee Schedule (the “Fee Schedule”) to amend certain connectivity and port fees.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend the Fee Schedule as follows: (1) increase the fees for a 10 gigabit (“Gb”) ultra-low latency (“ULL”) fiber connection for Members
Beginning in late January 2023, the Exchange also recently determined a substantial operational need to no longer operate 10Gb ULL connectivity on a single shared network with MIAX. The Exchange bifurcated 10Gb ULL connectivity due to ever-increasing capacity constraints and to enable it to continue to satisfy the anticipated access needs for Members and other market participants.
Much of the cost relates to monitoring and analysis of data and performance of the network via the subscriber's connection with nanosecond granularity, and continuous improvements in network performance with the goal of improving the subscriber's experience. The costs associated with maintaining and enhancing a state-of-the-art network is a significant expense for the Exchange, and thus the Exchange believes that it is reasonable and appropriate to help offset those increased costs by amending fees for connectivity services. Subscribers expect the Exchange to provide this level of support so they continue to receive the performance they expect. This differentiates the Exchange from its competitors.
The Exchange now proposes to amend the Fee Schedule to amend the fees for 10Gb ULL connectivity and Full Service
The Exchange previously included a cost analysis in the Initial, Second, Third, and Fourth Proposals. As described more fully below, the Exchange provides an updated cost analysis that includes, among other things, additional descriptions of how the Exchange allocated costs among it and its affiliated exchanges (separately among MIAX Pearl Options and MIAX Pearl Equities, MIAX and MIAX Emerald
Starting in 2017, following the United States Court of Appeals for the District of Columbia's
While the above appeal to the D.C. Circuit was pending, on March 29, 2019, the Commission issued an order disapproving a proposed fee change by BOX Exchange LLC (“BOX”) to establish connectivity fees (the “BOX Order”), which significantly increased the level of information needed for the Commission to believe that an exchange's filing satisfied its obligations under the Act with respect to changing a fee.
Also while the above appeal was pending, on May 21, 2019, the Commission Staff issued guidance “to assist the national securities exchanges and FINRA . . . in preparing Fee Filings that meet their burden to demonstrate that proposed fees are consistent with the requirements of the Securities
Following the BOX Order and Staff Guidance, on August 6, 2020, the D.C. Circuit vacated the Commission's SIFMA Decision in
As a result of the Commission's loss of the
While the Exchange appreciates that the Staff Guidance articulates an important policy goal of improving disclosures and requiring exchanges to justify that their market data and access fee proposals are fair and reasonable, the practical effect of the Revised Review Process, Staff Guidance, and the Commission's related practice of continuous suspension of new fee filings, is anti-competitive, discriminatory, and has put in place an un-level playing field, which has negatively impacted smaller, nascent, non-legacy exchanges (“non-legacy exchanges”), while favoring larger, incumbent, entrenched, legacy exchanges (“legacy exchanges”).
The net result is that the non-legacy exchanges are effectively now blocked by the Commission Staff from adopting or increasing fees to amounts comparable to the legacy exchanges (which were not subject to the Revised Review Process and Staff Guidance), despite providing enhanced disclosures and rationale to support their proposed fee changes that far exceed any such support provided by legacy exchanges. Simply put, legacy exchanges were able to increase their non-transaction fees during an extended period in which the Commission applied a “market-based” test that only relied upon the assumed presence of significant competitive forces, while exchanges today are subject to a cost-based test requiring extensive cost and revenue disclosures, a process that is complex, inconsistently applied, and rarely results in a successful outcome,
Commission Staff now require exchange filings, including from non-legacy exchanges such as MIAX Pearl, to provide detailed cost-based analysis in place of competition-based arguments to support such changes. However, even with the added detailed cost and expense disclosures, the Commission Staff continues to either suspend such filings and institute disapproval proceedings, or put the exchanges in the unenviable position of having to repeatedly withdraw and re-file with additional detail in order to continue to charge those fees.
The much higher non-transaction fees charged by the legacy exchanges provides them with two significant competitive advantages. First, legacy exchanges are able to use their additional non-transaction revenue for investments in infrastructure, vast marketing and advertising on major media outlets,
While the Commission has clearly noted that the Staff Guidance is merely guidance and “is not a rule, regulation or statement of the . . . Commission . . . the Commission has neither approved nor disapproved its content . . .”,
Because of the un-level playing field created by the Revised Review Process and Staff Guidance, the Exchange believes that the Commission Staff, at this point, should either (a) provide sufficient clarity on how its cost-based standard can be met, including a clear and exhaustive articulation of required data and its views on acceptable margins,
In light of the above, disapproval of this would not meet the fairness standard under the Act, would be discriminatory and place a substantial burden on competition. The Exchange would be uniquely disadvantaged by not being able to increase its access fees to comparable levels (or lower levels than current market rates) to those of other options exchanges for connectivity. If the Commission Staff were to disapprove this proposal, that action, and not market forces, would substantially affect whether the Exchange can be successful in its competition with other options exchanges. Disapproval of this filing could also be viewed as an arbitrary and capricious decision should the Commission Staff continue to ignore its past treatment of non-transaction fee filings before implementation of the Revised Review Process and Staff Guidance and refuse to allow such filings to be approved despite significantly enhanced arguments and cost disclosures.
MIAX Pearl Options filed a proposal to no longer operate 10Gb connectivity to MIAX Pearl Options on a single shared network with its affiliate, MIAX. This change is an operational necessity due to ever-increasing capacity constraints and to accommodate anticipated access needs for Members and other market participants.
MIAX Pearl Options bifurcated the MIAX Pearl Options and MIAX 10Gb ULL networks in the first quarter of 2023, which change became effective on January 23, 2023. The Exchange issued an alert on August 12, 2022 publicly announcing the planned network change and implementation plan and dates to provide market participants adequate time to prepare.
The Exchange, therefore, proposes to amend the Fee Schedule to increase the fees for Members and non-Members to access the Exchange's system networks
The Exchange proposes to make the following changes to reflect the bifurcated 10Gb ULL network for the Exchange and MIAX. First, in the Definitions section of the Fee Schedule, the Exchange proposes to amend the last sentence in the definition of “MENI” to specify that the MENI can be configured to provide network connectivity to the trading platforms, market data systems, test systems, and disaster recovery facilities of the Exchange's affiliate, MIAX, via a single, shared 1Gb
The Exchange will continue to assess monthly Member and non-Member network connectivity fees for connectivity to the primary and secondary facilities in any month the Member or non-Member is credentialed to use any of the Exchange APIs or market data feeds in the production environment. The Exchange will continue to pro-rate the fees when a Member or non-Member makes a change to the connectivity (by adding or deleting connections) with such pro-rated fees based on the number of trading days that the Member or non-Member has been credentialed to utilize any of the Exchange APIs or market data feeds in the production environment through such connection, divided by the total number of trading days in such month multiplied by the applicable monthly rate.
The Exchange also proposes to amend Section 5)d) of the Fee Schedule to amend the calculation and amount of fees for Full Service MEO Ports. The Exchange currently offers different types of MEO Ports depending on the services required by the Member, including a Full Service MEO Port-Bulk,
Currently, the Exchange assesses Members Full Service MEO Port Fees, either for a Full Service MEO Port—Bulk and/or for a Full Service MEO Port—Single, based upon the monthly total volume executed by a Member and its Affiliates
(i) if its volume falls within the parameters of Tier 1 of the Non-Transaction Fees Volume-Based Tiers, or volume up to 0.30%, $3,000;
(ii) if its volume falls within the parameters of Tier 2 of the Non-Transaction Fees Volume-Based Tiers, or volume above 0.30% up to 0.60%, $4,500; and
(iii) if its volume falls within the parameters of Tier 3 of the Non-Transaction Fees Volume-Based Tiers, or volume above 0.60%, $5,000.
Specifically, the Exchange proposes to adopt the following Full Service MEO Port (Bulk) fees for Market Makers: (i) $5,000 for Market Maker registrations in
With the proposed changes, a Market Maker would be determined to be registered in a class if that Market Maker has been registered in one or more series in that class.
The Exchange also proposes to adopt an alternative lower Full Service MEO Port (Bulk) fee for Market Makers who fall within the 2nd, 3rd and 4th levels of the proposed Market Maker Full Service MEO Port (Bulk) fee table: (i) Market Maker registrations in up to 40 option classes or up to 35% of option classes by volume; (ii) Market Maker registrations in up to 100 option classes or up to 50% of option classes by volume; and (iii) Market Maker registrations in over 100 option classes or over 50% of option classes by volume up to all option classes listed on MIAX Pearl Options. In particular, the Exchange proposes to adopt footnote “**” following the Market Maker Full Service MEO Port (Bulk) fee table for these Monthly Full Service MEO Port (Bulk) tier levels. New proposed footnote “**” will provide that if the Market Maker's total monthly executed volume during the relevant month is less than 0.040% of the total monthly TCV for MIAX Pearl-listed option classes for that month, then the fee will be $6,000 instead of the fee otherwise applicable to such level.
The purpose of the alternative lower fee designated in proposed footnote “**” is to provide a lower fixed fee to those Market Makers who are willing to quote the entire Exchange market (or substantial amount of the Exchange market), as objectively measured by either number of classes assigned or national ADV, but who do not otherwise execute a significant amount of volume on the Exchange. The Exchange believes that, by offering lower fixed fees to Market Makers that execute less volume, the Exchange will retain and attract smaller-scale Market Makers, which are an integral component of the option marketplace, but have been decreasing in number in recent years, due to industry consolidation. Since these smaller-scale Market Makers utilize less Exchange capacity due to lower overall volume executed, the Exchange believes it is reasonable and equitable to offer such Market Makers a lower fixed fee. The Exchange notes that the Exchange's affiliates, MIAX and MIAX Emerald, also provide lower MIAX Express Interface (“MEI”) Port fees (the comparable ports on those exchanges) for Market Makers who quote the entire MIAX and MIAX Emerald markets (or substantial amount of those markets), as objectively measured by either number of classes assigned or national ADV, but who do not otherwise execute a significant amount of volume on MIAX or MIAX Emerald.
Unlike other options exchanges that provide similar port functionality and charge fees on a per port basis,
(i) if its volume falls within the parameters of Tier 1 of the Non-Transaction Fees Volume-Based Tiers, or volume up to 0.30%, $2,000;
(ii) if its volume falls within the parameters of Tier 2 of the Non-Transaction Fees Volume-Based Tiers, or volume above 0.30% up to 0.60%, $3,375; and
(iii) if its volume falls within the parameters of Tier 3 of the Non-Transaction Fees Volume-Based Tiers, or volume above 0.60%, $3,750.
The Exchange offers various types of ports with differing prices because each port accomplishes different tasks, are suited to different types of Members, and consume varying capacity amounts of the network. For instance, MEO ports allow for a higher throughput and can handle much higher quote/order rates than FIX ports. Members that are Market Makers or high frequency trading firms utilize these ports (typically coupled with 10Gb ULL connectivity) because they transact in significantly higher amounts of messages being sent to and from the Exchange, versus FIX port users, who are traditionally customers sending only orders to the Exchange (typically coupled with 1Gb connectivity). The different types of ports cater to the different types of Exchange Memberships and different capabilities of the various Exchange Members. Certain Members need ports and connections that can handle using far more of the network's capacity for message throughput, risk protections, and the amount of information that the System has to assess. Those Members account for the vast majority of network capacity utilization and volume executed on the Exchange, as discussed throughout. For example, three (3) Members account for 64% of all 10Gb ULL connections and Full Service MEO Ports purchased.
The Exchange proposes to increase its monthly Full Service MEO Port fees since it has not done so since the fees were adopted in 2018,
The proposed fee changes are immediately effective.
The Exchange believes that the proposed fees are consistent with section 6(b) of the Act
The Exchange believes that the information provided to justify the proposed fees meets or exceeds the amount of detail required in respect of proposed fee changes under the Revised
The Exchange believes that exchanges, in setting fees of all types, should meet high standards of transparency to demonstrate why each new fee or fee amendment meets the requirements of the Act that fees be reasonable, equitably allocated, not unfairly discriminatory, and not create an undue burden on competition among market participants. The Exchange believes this high standard is especially important when an exchange imposes various fees for market participants to access an exchange's marketplace.
In the Staff Guidance, the Commission Staff states that, “[a]s an initial step in assessing the reasonableness of a fee, staff considers whether the fee is constrained by significant competitive forces.”
The proposed fees are reasonable because they promote parity among exchange pricing for access, which promotes competition, including in the Exchanges' ability to competitively price transaction fees, invest in infrastructure, new products and other innovations, all while allowing the Exchange to recover its costs to provide dedicated access via 10Gb ULL connectivity (driven by the bifurcation of the 10Gb ULL network) and Full Service MEO Ports. As discussed above, the Revised Review Process and Staff Guidance have created an uneven playing field between legacy and non-legacy exchanges by severely restricting non-legacy exchanges from being able to increase non-transaction related fees to provide them with additional necessary revenue to better compete with legacy exchanges, which largely set fees prior to the Revised Review Process. The much higher non-transaction fees charged by the legacy exchanges provides them with two significant competitive advantages: (i) additional non-transaction revenue that may be used to fund areas other than the non-transaction service related to the fee, such as investments in infrastructure, advertising, new products and other innovations; and (ii) greater flexibility to lower their transaction fees by using the revenue from the higher non-transaction fees to subsidize transaction fee rates. The latter is more immediately impactful in competition for order flow and market share, given the variable nature of this cost on Member firms. The absence of a reasonable path forward to increase non-transaction fees to comparable (or lower rates) limits the Exchange's flexibility to, among other things, make additional investments in infrastructure and advertising, diminishes the ability to remain competitive on transaction fees, and hinders the ability to compete for order flow and market share. Again, while one could debate whether the pricing of non-transaction fees are subject to the same market forces as transaction fees, there is little doubt that subjecting one exchange to a materially different standard than that applied to other exchanges for non-transaction fees leaves that exchange at a disadvantage in its ability to compete with its pricing of transaction fees.
The Exchange commenced operations in February 2017
Later in 2018, as the Exchange's market share increased,
The proposed changes to the Fee Schedule are reasonable in several respects. As a threshold matter, the Exchange is subject to significant competitive forces, which constrains its pricing determinations for transaction fees as well as non-transaction fees. The fact that the market for order flow is competitive has long been recognized by the courts. In
The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention to determine prices, products, and services in the securities markets. In Regulation NMS, while adopting a series of steps to improve the current market model, the Commission highlighted the importance of market forces in determining prices and SRO revenues, and also recognized that current regulation of the market system “has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.”
Congress directed the Commission to “rely on `competition, whenever possible, in meeting its regulatory responsibilities for overseeing the SROs and the national market system.' ”
The Exchange believes the competing exchanges' 10Gb connectivity and port fees are useful examples of alternative approaches to providing and charging for access and demonstrating how such fees are competitively set and constrained. To that end, the Exchange believes the proposed fees are competitive and reasonable because the proposed fees are similar to or less than fees charged for similar connectivity and port access provided by other options exchanges with comparable market shares. As such, the Exchange believes that denying its ability to institute fees that allow the Exchange to recoup its costs with a reasonable margin in a manner that is closer to parity with legacy exchanges, in effect, impedes its ability to compete, including in its pricing of transaction fees and ability to invest in competitive infrastructure and other offerings.
The following table shows how the Exchange's proposed fees remain similar to or less than fees charged for similar connectivity and port access provided by other options exchanges with similar market share. Each of the connectivity and port rates in place at competing options exchanges were filed with the Commission for immediate effectiveness and remain in place today.
The Exchange acknowledges that, without additional contextual information, the above table may lead someone to believe that the Exchange's proposed fees for Full Service MEO Ports is higher than other exchanges when in fact, that is not true. The Exchange provides each Member or non-Member access to two (2) ports on all twelve (12) matching engines for a single fee and a vast majority choose to connect to all twelve (12) matching engines and utilize both ports for a total of 24 ports. Other exchanges charge on a per port basis and require firms to connect to multiple matching engines, thereby multiplying the cost to access their full market.
There is no requirement, regulatory or otherwise, that any broker-dealer connect to and access any (or all of) the available options exchanges. Market participants may choose to become a member of one or more options exchanges based on the market participant's assessment of the business opportunity relative to the costs of the Exchange. With this, there is elasticity of demand for exchange membership. As an example, one Market Maker terminated their MIAX Pearl Options membership effective January 1, 2023 as a direct result of the proposed connectivity and port fee changes proposed by MIAX Pearl Options.
It is not a requirement for market participants to become members of all options exchanges; in fact, certain market participants conduct an options business as a member of only one options market.
One other exchange recently noted in a proposal to amend their own trading permit fees that of the 62 market making firms that are registered as Market Makers across Cboe, MIAX, and BOX, 42 firms access only one of the three exchanges.
Not only is there not an actual regulatory requirement to connect to every options exchange, the Exchange believes there is also no “de facto” or practical requirement as well, as further evidenced by the broker-dealer membership analysis of the options exchanges discussed above. As noted above, this is evidenced by the fact that one MIAX Pearl Options Market Maker terminated their MIAX Pearl Options membership effective January 1, 2023 as a direct result of the proposed connectivity and port fee changes on MIAX Pearl Options. Indeed, broker-dealers choose if and how to access a particular exchange and because it is a choice, the Exchange must set reasonable pricing, otherwise prospective members would not connect and existing members would disconnect from the Exchange. The decision to become a member of an exchange, particularly for registered market makers, is complex, and not solely based on the non-transactional costs assessed by an exchange. As noted herein, specific factors include, but are not limited to: (i) an exchange's available liquidity in options series; (ii) trading functionality offered on a particular market; (iii) product offerings; (iv) customer service on an exchange; and (v) transactional pricing. Becoming a member of the exchange does not “lock” a potential member into a market or diminish the overall competition for exchange services.
In lieu of becoming a member at each options exchange, a market participant may join one exchange and elect to have their orders routed in the event that a better price is available on an away market. Nothing in the Order Protection Rule requires a firm to become a Member at—or establish connectivity to—the Exchange.
With respect to the submission of orders, Members may also choose not to purchase any connection from the Exchange, and instead rely on the port of a third party to submit an order. For example, a third-party broker-dealer Member of the Exchange may be utilized by a retail investor to submit orders into an exchange. An institutional investor may utilize a broker-dealer, a service bureau,
Non-Member third-parties, such as service bureaus and extranets, resell the Exchange's connectivity. This indirect connectivity is another viable alternative for market participants to trade on the Exchange without connecting directly to the Exchange (and thus not pay the Exchange's connectivity fees), which alternative is already being used by non-Members and further constrains the price that the Exchange is able to charge for connectivity and other access fees to its market. The Exchange notes that it could, but chooses not to, preclude market participants from reselling its connectivity. Unlike other exchanges, the Exchange also does not currently assess fees on third-party resellers on a per customer basis (
The Exchange is obligated to regulate its Members and secure access to its environment. In order to properly regulate its Members and secure the trading environment, the Exchange takes measures to ensure access is monitored and maintained with various controls. Connectivity and ports are methods utilized by the Exchange to grant Members secure access to communicate with the Exchange and exercise trading rights. When a market participant elects to be a Member, and is approved for membership by the Exchange, the Member is granted trading rights to enter orders and/or quotes into Exchange through secure connections.
Again, there is no legal or regulatory requirement that a market participant become a Member of the Exchange. This is again evidenced by the fact that one MIAX Pearl Options Market Maker terminated their MIAX Pearl Options membership effective January 1, 2023 as a direct result of the proposed connectivity and port fee changes on MIAX Pearl Options. If a market participant chooses to become a Member, they may then choose to purchase connectivity beyond the one connection that is necessary to quote or submit orders on the Exchange. Members may freely choose to rely on one or many connections, depending on their business model.
The Exchange began to operate on a single shared network with MIAX when MIAX Pearl Options commenced operations as a national securities exchange on February 7, 2017.
The Exchange stresses that bifurcating the 10Gb ULL connectivity between the Exchange and MIAX was not designed with the objective to generate an overall increase in access fee revenue. Rather, the proposed change was necessitated by 10Gb ULL connectivity experiencing a significant decrease in port availability mostly driven by connectivity demands of latency sensitive Members that seek to maintain multiple 10Gb ULL connections on every switch in the network. Operating two separate national securities exchanges on a single shared network provided certain benefits, such as streamlined connectivity to multiple exchanges, and simplified exchange infrastructure. However, doing so was no longer sustainable due to ever-increasing capacity constraints and current system limitations. The network is not an unlimited resource. As described more fully in the proposal to bifurcate the 10Gb ULL network,
As stated above, the shared network is not an unlimited resource and its expansion was constrained by MIAX's and MIAX Pearl Options' ability to provide fair and equitable access to all market participants of both markets. Due to the ever-increasing connectivity demands, the Exchange found it necessary to bifurcate 10Gb ULL connectivity to the Exchange's and MIAX's Systems and networks to be able to continue to meet ongoing and future 10Gb ULL connectivity and access demands.
Unlike the switches that provide 1Gb connectivity, the availability for additional 10Gb ULL connections on each switch had significantly decreased. This was mostly driven by the connectivity demands of latency sensitive Members (
Prior to bifurcating the 10Gb ULL network, the Exchange and MIAX continued to add switches to meet ongoing demand for 10Gb ULL connectivity. That was no longer sustainable because simply adding additional switches to expand the current shared 10Gb ULL network would not adequately alleviate the issue of limited available port connectivity. While it would have resulted in a gain in overall port availability, the existing switches on the shared 10Gb ULL network in use would have continued to suffer from lack of port headroom given many latency sensitive Members' needs for a presence on each switch to reach both the Exchange and MIAX. This was because those latency sensitive Members sought to have a presence on each switch to maximize the probability of experiencing the best network performance. Those Members routinely decide to rebalance orders and/or messages over their various connections to ensure each connection is operating with maximum efficiency. Simply adding switches to the extranet would not have resolved the port availability needs on the shared 10Gb ULL network since many of the latency sensitive Members were unwilling to relocate their connections to a new switch due to the potential detrimental performance impact. As such, the impact of adding new switches and rebalancing ports would not have been effective or responsive to customer needs. The Exchange has found that ongoing and continued rebalancing once additional switches are added has had, and would have continued to have had, a diminishing return on increasing available 10Gb ULL connectivity.
Based on its experience and expertise, the Exchange found the most practical way to increase connectivity availability on its switches was to bifurcate the existing 10Gb ULL networks for the Exchange and MIAX by migrating the exchanges' connections from the shared network onto their own set of switches. Such changes accordingly necessitated a review of the Exchange's previous 10Gb ULL connectivity fees and related costs. The proposed fees necessary to allow the Exchange to cover ongoing costs related to providing and maintaining such connectivity, described more fully below. The ever increasing connectivity demands that necessitated this change further support that the proposed fees are reasonable because this demand reflects that Members and non-Members believe they are getting value from the 10Gb ULL connections they purchase.
The Exchange announced on August 12, 2022 the planned network change and January 23, 2023 implementation date to provide market participants adequate time to prepare.
Should the Commission Staff disapprove such fees, it would effectively dictate how an exchange manages its technology and would hamper the Exchange's ability to continue to invest in and fund access services in a manner that allows it to meet existing and anticipated access demands of market participants. Disapproval could also have the adverse effect of discouraging an exchange from optimizing its operations and deploying innovative technology to the benefit of market participants if it believes the Commission would later prevent that exchange from covering its costs and monetizing its operational enhancements, thus adversely impacting competition. Also, as noted above, the economic consequences of not being able to better establish fee parity with other exchanges for non-transaction fees hampers the Exchange's ability to compete on transaction fees.
In general, the Exchange believes that exchanges, in setting fees of all types, should meet very high standards of transparency to demonstrate why each new fee or fee increase meets the Exchange Act requirements that fees be reasonable, equitably allocated, not unfairly discriminatory, and not create an undue burden on competition among members and markets. In particular, the Exchange believes that each exchange should take extra care to be able to demonstrate that these fees are based on its costs and reasonable business needs.
In proposing to charge fees for connectivity and port services, the Exchange is especially diligent in assessing those fees in a transparent way against its own aggregate costs of providing the related service, and in carefully and transparently assessing the impact on Members—both generally and in relation to other Members,
As detailed below, the Exchange recently calculated its aggregate annual costs for providing physical 10Gb ULL connectivity to the Exchange at $11,567,509 (or approximately $963,959 per month, rounded to the nearest dollar when dividing the annual cost by 12 months) and its aggregate annual costs for providing Full Service MEO Ports at $1,644,132 (or approximately $137,012 per month, rounded to the nearest dollar when dividing the annual cost by 12 months). In order to cover the aggregate costs of providing connectivity to its users (both Members and non-Members
In 2019, the Exchange completed a study of its aggregate costs to produce market data and connectivity (the “Cost Analysis”).
As an initial step, the Exchange determined the total cost for the Exchange and the affiliated markets for each cost driver as part of its 2023 budget review process. The 2023 budget review is a company-wide process that occurs over the course of many months, includes meetings among senior management, department heads, and the Finance Team. Each department head is required to send a “bottom up” budget to the Finance Team allocating costs at the profit and loss account and vendor levels for the Exchange and its affiliated markets based on a number of factors, including server counts, additional hardware and software utilization, current or anticipated functional or non-functional development projects, capacity needs, end-of-life or end-of-service intervals, number of members, market model (
The next step involves determining what portion of the cost allocated to the Exchange pursuant to the above methodology is to be allocated to each core service,
By allocating segmented costs to each core service, the Exchange was able to estimate by core service the potential margin it might earn based on different fee models. The Exchange notes that as a non-listing venue it has five primary sources of revenue that it can potentially use to fund its operations: transaction fees, fees for connectivity and port services, membership fees, regulatory fees, and market data fees. Accordingly, the Exchange must cover its expenses from these five primary sources of revenue. The Exchange also notes that as a general matter each of these sources of revenue is based on services that are interdependent. For instance, the Exchange's system for executing transactions is dependent on physical hardware and connectivity; only Members and parties that they sponsor to participate directly on the Exchange may submit orders to the Exchange; many Members (but not all) consume market data from the Exchange in order to trade on the Exchange; and the Exchange consumes market data from external sources in order to comply with regulatory obligations. Accordingly, given this interdependence, the allocation of costs to each service or revenue source required judgment of the Exchange and was weighted based on estimates of the Exchange that the Exchange believes are reasonable, as set forth below. While there is no standardized and generally accepted methodology for the allocation of an exchange's costs, the Exchange's methodology is the result of an extensive review and analysis and will be consistently applied going forward for any other potential fee proposals. In the absence of the Commission attempting to specify a methodology for the allocation of exchanges' interdependent costs, the Exchange will continue to be left with its best efforts to attempt to conduct such an allocation in a thoughtful and reasonable manner.
Through the Exchange's extensive updated Cost Analysis, which was again recently further refined, the Exchange analyzed every expense item in the Exchange's general expense ledger to determine whether each such expense relates to the provision of connectivity and port services, and, if such expense did so relate, what portion (or percentage) of such expense actually supports the provision of connectivity and port services, and thus bears a relationship that is, “in nature and closeness,” directly related to network connectivity and port services. In turn, the Exchange allocated certain costs more to physical connectivity and others to ports, while certain costs were only allocated to such services at a very low percentage or not at all, using consistent allocation methodologies as described above. Based on this analysis, the Exchange estimates that the aggregate monthly cost to provide 10Gb ULL connectivity and Full Service MEO Port services, is $1,106,971 (utilizing the rounded numbers when dividing the annual cost for 10Gb ULL connectivity and annual cost for Full Service MEO Ports by 12 months, then adding both numbers together), as further detailed below.
Lastly, the Exchange notes that, based on: (i) the total expense amounts contained in this filing (which are 2023 projected expenses), and (ii) the total expense amounts contained in the related MIAX Pearl Equities filing (also 2023 projected expenses), MIAX PEARL, LLC's total costs have increased at a greater rate over the last three years than the total costs of MIAX PEARL, LLC's affiliated exchanges, MIAX and MIAX Emerald. This is also reflected in the total costs reported in MIAX PEARL, LLC's Form 1 filings over the last three years, when comparing MIAX PEARL, LLC to MIAX PEARL, LLC's affiliated exchanges, MIAX and MIAX Emerald. This is primarily because that MIAX PEARL, LLC operates two markets, one for options and one for equities, while MIAX and MIAX Emerald each operate only one market. This is also due to higher current expense for MIAX PEARL, LLC for 2022 and 2023, due to a hardware refresh (
The following chart details the individual line-item costs considered by the Exchange to be related to offering physical dedicated 10Gb ULL connectivity via an unshared network as well as the percentage of the Exchange's overall costs that such costs represent for each cost driver (
Below are additional details regarding each of the line-item costs considered by the Exchange to be related to offering physical 10Gb ULL connectivity. While some costs were attempted to be allocated as equally as possible among the Exchange and its affiliated markets, the Exchange notes that some of its cost allocation percentages for certain cost drivers differ when compared to the same cost drivers for the Exchange's affiliated markets in their similar proposed fee changes for connectivity and ports. This is because MIAX Pearl Options' cost allocation methodology utilizes the actual projected costs of MIAX Pearl Options (which are specific to MIAX Pearl Options, and are independent of the costs projected and utilized by MIAX Pearl Options' affiliated markets) to determine its actual costs, which may vary across the Exchange and its affiliated markets based on factors that are unique to each marketplace. MIAX Pearl Options provides additional explanation below (including the reason for the deviation) for the significant differences.
The Exchange notes that it and its affiliated markets have 184 employees (excluding employees at non-options/equities exchange subsidiaries of Miami International Holdings, Inc. (“MIH”), the holding company of the Exchange and its affiliated markets), and each department leader has direct knowledge of the time spent by each employee with respect to the various tasks necessary to operate the Exchange. Specifically, twice a year, and as needed with additional new hires and new project initiatives, in consultation with employees as needed, managers and department heads assign a percentage of time to every employee and then allocate that time amongst the Exchange and its affiliated markets to determine each market's individual Human Resources expense. Then, managers and department heads assign a percentage of each employee's time allocated to the Exchange into buckets including network connectivity, ports, market data, and other exchange services. This process ensures that every employee is 100% allocated, ensuring there is no double counting between the Exchange and its affiliated markets.
For personnel costs (Human Resources), the Exchange calculated an allocation of employee time for employees whose functions include providing and maintaining physical connectivity and performance thereof (primarily the Exchange's network infrastructure team, which spends most of their time performing functions necessary to provide physical connectivity). As described more fully above, the Exchange's parent company allocates costs to the Exchange and its affiliated markets and then a portion of the Human Resources costs allocated to the Exchange is then allocated to connectivity. From that portion allocated to the Exchange that applied to connectivity, the Exchange then allocated a weighted average of 42.9% of each employee's time from the above group. The Exchange also allocated Human Resources costs to provide physical connectivity to a limited subset of personnel with ancillary functions related to establishing and maintaining such connectivity (such as information security, sales, membership, and finance personnel). The Exchange allocated cost on an employee-by-employee basis (
The estimates of Human Resources cost were therefore determined by consulting with such department leaders, determining which employees are involved in tasks related to providing physical connectivity, and confirming that the proposed allocations
Lastly, the Exchange notes that senior level executives' time was only allocated to the 10Gb ULL connectivity related Human Resources costs to the extent that they are involved in overseeing tasks related to providing physical connectivity. The Human Resources cost was calculated using a blended rate of compensation reflecting salary, equity and bonus compensation, benefits, payroll taxes, and 401(k) matching contributions.
The Connectivity cost driver includes external fees paid to connect to other exchanges and third parties, cabling and switches required to operate the Exchange. The Connectivity cost driver is more narrowly focused on technology used to complete connections to the Exchange and to connect to external markets. The Exchange notes that its connectivity to external markets is required in order to receive market data to run the Exchange's matching engine and basic operations compliant with existing regulations, primarily Regulation NMS.
The Exchange relies on various connectivity providers for connectivity to the entire U.S. options industry, and infrastructure services for critical components of the network that are necessary to provide and maintain its System Networks and access to its System Networks via 10Gb ULL connectivity. Specifically, the Exchange utilizes connectivity providers to connect to other national securities exchanges and the Options Price Reporting Authority (“OPRA”). The Exchange understands that these service providers provide services to most, if not all, of the other U.S. exchanges and other market participants. Connectivity provided by these service providers is critical to the Exchanges daily operations and performance of its System Networks to which market participants connect to via 10Gb ULL connectivity. Without these services providers, the Exchange would not be able to connect to other national securities exchanges, market data providers or OPRA and, therefore, would not be able to operate and support its System Networks. The Exchange does not employ a separate fee to cover its connectivity expense and recoups that expense, in part, by charging for 10Gb ULL connectivity.
The next cost driver consists of internet Services and external market data. Internet services includes third-party service providers that provide the internet, fiber and bandwidth connections between the Exchange's networks, primary and secondary data centers, and office locations in Princeton and Miami.
External market data includes fees paid to third parties, including other exchanges, to receive market data. The Exchange includes external market data fee costs towards the provision of 10Gb ULL connectivity because such market data is necessary for certain services related to connectivity, including pre-trade risk checks and checks for other conditions (
The Exchange relies on content service providers for data feeds for the entire U.S. options industry, as well as content for critical components of the network that are necessary to provide and maintain its System Networks and access to its System Networks via 10Gb ULL connectivity. Specifically, the Exchange utilizes content service providers to receive market data from OPRA, other exchanges and market data providers. The Exchange understands that these service providers provide services to most, if not all, of the other U.S. exchanges and other market participants. Market data provided these service providers is critical to the Exchanges daily operations and performance of its System Networks to which market participants connect to via 10Gb ULL connectivity. Without these services providers, the Exchange would not be able to receive market data and, therefore, would not be able to operate and support its System Networks. The Exchange does not employ a separate fee to cover its content service provider expense and recoups that expense, in part, by charging for 10Gb ULL connectivity.
Lastly, the Exchange notes that the actual dollar amounts allocated as part of the second step of the 2023 budget process differ among the Exchange and its affiliated markets for the Internet Services and External Market Data cost driver, even though, but for MIAX Emerald, the allocation percentages are generally consistent across markets (
Data Center costs includes an allocation of the costs the Exchange incurs to provide physical connectivity in the third-party data centers where it maintains its equipment (such as dedicated space, security services, cooling and power). The Exchange notes that it does not own the Primary Data Center or the Secondary Data Center, but instead, leases space in data centers operated by third parties. The Exchange has allocated a high percentage of the Data Center cost (60.6%) to physical 10Gb ULL connectivity because the third-party data centers and the Exchange's physical equipment contained therein is the most direct cost in providing physical access to the Exchange. In other words, for the Exchange to operate in a dedicated space with connectivity by market participants to a physical trading platform, the data centers are a very tangible cost, and in turn, if the Exchange did not maintain such a presence then physical connectivity would be of no value to market participants.
Hardware and Software Licenses includes hardware and software licenses used to operate and monitor physical assets necessary to offer physical connectivity to the Exchange.
All physical assets, software and hardware used to provide 10Gb ULL connectivity, which also includes assets used for testing and monitoring of Exchange infrastructure, were valued at cost, and depreciated or leased over periods ranging from three to five years. Thus, the depreciation cost primarily relates to servers necessary to operate the Exchange, some of which are owned by the Exchange and some of which are leased by the Exchange in order to allow efficient periodic technology refreshes. The Exchange also included in the Depreciation cost driver certain budgeted improvements that the Exchange intends to capitalize and depreciate with respect to 10Gb ULL connectivity in the near-term. As with the other allocated costs in the Exchange's updated Cost Analysis, the Depreciation cost was therefore narrowly tailored to depreciation related to 10Gb ULL connectivity. As noted above, the Exchange allocated 58.2% of its allocated depreciation costs to providing physical 10Gb ULL connectivity.
The Exchange also notes that this allocation differs from its affiliated markets due to a number of factors, such as the age of physical assets and software (
Finally, as with other exchange products and services, a portion of general shared expenses was allocated to overall physical connectivity costs. These general shared costs are integral to exchange operations, including its ability to provide physical connectivity. Costs included in general shared expenses include office space and office expenses (
The Exchange employed a process to determine a reasonable percentage to allocate general shared expenses to 10Gb ULL connectivity pursuant to its multi-layered allocation process. First, general expenses were allocated among the Exchange and affiliated markets as described above. Then, the general shared expense assigned to the Exchange was allocated across core services of the Exchange, including connectivity. Then, these costs were further allocated to sub-categories within the final categories,
The Exchange notes that the 49.2% allocation of general shared expenses for physical 10Gb ULL connectivity is higher than that allocated to general shared expenses for Full Service MEO Ports. This is based on its allocation methodology that weighted costs attributable to each core service. While physical connectivity has several areas where certain tangible costs are heavily weighted towards providing such service (
After determining the approximate allocated monthly cost related to 10Gb connectivity, the total monthly cost for 10Gb ULL connectivity of $963,959 was divided by the number of physical 10Gb ULL connections the Exchange maintained at the time that proposed pricing was determined (108), to arrive at a cost of approximately $8,925 per month, per physical 10Gb ULL connection. Due to the nature of this particular cost, this allocation methodology results in an allocation among the Exchange and its affiliated markets based on set quantifiable criteria,
The following chart details the individual line-item costs considered by the Exchange to be related to offering Full Service MEO Ports as well as the percentage of the Exchange's overall costs such costs represent for such area (
Below are additional details regarding each of the line-item costs considered by the Exchange to be related to offering Full Service MEO Ports. While some costs were attempted to be allocated as equally as possible among the Exchange and its affiliated markets, the Exchange notes that some of its cost allocation percentages for certain cost drivers differ when compared to the same cost drivers for the Exchange's affiliated markets in their similar proposed fee changes for connectivity and ports. This is because the Exchange's cost allocation methodology utilizes the actual projected costs of the Exchange (which are specific to the Exchange, and are independent of the costs projected and utilized by the Exchange's affiliated markets) to determine its actual costs, which may vary across the Exchange and its affiliated markets based on factors that are unique to each marketplace. The Exchange provides additional explanation below (including the reason for the deviation) for the significant differences.
With respect to Full Service MEO Ports, the Exchange calculated Human Resources cost by taking an allocation of employee time for employees whose functions include providing Full Service MEO Ports and maintaining performance thereof (including a broader range of employees such as technical operations personnel, market operations personnel, and software engineering personnel) as well as a limited subset of personnel with ancillary functions related to maintaining such connectivity (such as sales, membership, and finance personnel). Just as described above for 10Gb ULL connectivity, the estimates of Human Resources cost were again determined by consulting with department leaders, determining which employees are involved in tasks related to providing Full Service MEO Ports and maintaining performance thereof, and confirming that the proposed allocations were reasonable based on an understanding of the percentage of their time such employees devote to tasks related to providing Full Service MEO Ports and maintaining performance thereof. This includes personnel from the following Exchange departments that are predominately involved in providing Full Service MEO Ports: Business Systems Development, Trading
The Connectivity cost includes external fees paid to connect to other exchanges and cabling and switches, as described above.
The next cost driver consists of internet services and external market data. Internet services includes third-party service providers that provide the internet, fiber and bandwidth connections between the Exchange's networks, primary and secondary data centers, and office locations in Princeton and Miami. For purposes of Full Service MEO Ports, the Exchange also includes a portion of its costs related to external market data. External market data includes fees paid to third parties, including other exchanges, to receive and consume market data from other markets. The Exchange includes external market data costs towards the provision of Full Service MEO Ports because such market data is necessary (in addition to physical connectivity) to offer certain services related to such ports, such as validating orders on entry against the NBBO and checking for other conditions (
The Exchange notes that the allocation for the Internet Services and External Market Data cost driver is lower than that of its affiliate, MIAX, as MIAX allocated 7.2% of its Internet Services and External Market Data expense towards Limited Service MEI Ports, while MIAX Pearl Options allocated 1.4% to its Full Service MEO Ports for the same cost driver. The allocation percentages set forth above differ because they directly correspond with the number of applicable ports utilized on each exchange. For May 2023, MIAX Market Makers utilized 1,770 Limited Service MEI ports and MIAX Emerald Market Makers utilized 1,017 Limited Service MEI Ports. When compared to Full Service Port (Bulk and Single) usage, for May 2023, MIAX Pearl Options Members utilized only 384 Full Service MEO Ports (Bulk and Single), far fewer than number of Limited Service MEI Ports utilized by Market Makers on MIAX and MIAX Emerald, thus resulting in a smaller cost allocation. There is increased cost associated with supporting a higher number of ports (requiring more hardware and other technical infrastructure and internet Service), thus the Exchange allocates a higher percentage of expense than MIAX Pearl Options, which has a lower port count.
Data Center costs includes an allocation of the costs the Exchange incurs to provide Full Service MEO Ports in the third-party data centers where it maintains its equipment as well as related costs for market data to then enter the Exchange's system via Full Service MEO Ports (the Exchange does not own the Primary Data Center or the Secondary Data Center, but instead, leases space in data centers operated by third parties).
Hardware and Software Licenses includes hardware and software licenses used to monitor the health of the order entry services provided by the Exchange, as described above.
The Exchange notes that this allocation is less than its affiliate, MIAX, as MIAX allocated 7.2% of its Hardware and Software Maintenance and License expense towards Limited Service MEI Ports, while MIAX Pearl Options allocated 1.4% to its Full Service MEO Ports (Bulk and Single) for the same category of expense. The allocation percentages set forth above differ because they correspond with the number of applicable ports utilized on each exchange. For May 2023, MIAX Market Makers utilized 1,770 Limited Service MEI ports and MIAX Emerald Market Makers utilized 1,017 Limited Service MEI Ports. When compared to Full Service Port (Bulk and Single) usage, for May 2023, MIAX Pearl Options Members utilized only 384 Full Service MEO Ports (Bulk and Single), far fewer than number of Limited Service MEI Ports utilized by Market Makers on MIAX and MIAX Emerald, thus resulting in a smaller cost allocation. There is increased cost associated with supporting a higher number of ports (requiring more hardware and other technical infrastructure), thus the Exchange allocates a higher percentage of expense than MIAX Pearl Options, which has a lower port count.
The vast majority of the software the Exchange uses to provide Full Service MEO Ports has been developed in-house and the cost of such development, which takes place over an extended period of time and includes not just development work, but also quality assurance and testing to ensure the software works as intended, is depreciated over time once the software is activated in the production environment. Hardware used to provide Full Service MEO Ports includes equipment used for testing and monitoring of order entry infrastructure and other physical equipment the Exchange purchased and is also depreciated over time.
All hardware and software, which also includes assets used for testing and monitoring of order entry infrastructure, were valued at cost, depreciated or leased over periods ranging from three to five years. Thus, the depreciation cost primarily relates to servers necessary to operate the Exchange, some of which is owned by the Exchange and some of which is leased by the Exchange in order to allow efficient periodic technology refreshes. The Exchange allocated 3.9% of all depreciation costs to providing Full Service MEO Ports. The Exchange allocated depreciation costs for depreciated software necessary to operate the Exchange to Full Service MEO Ports because such software is related to the provision of Full Service MEO Ports. As with the other allocated costs in the Exchange's updated Cost Analysis, the Depreciation cost driver was therefore narrowly tailored to depreciation related to Full Service MEO Ports.
The Exchange notes that this allocation differs from its affiliated markets due to a number of factors, such as the age of physical assets and software (
For example, the Exchange notes that the percentage it allocated to the depreciation cost driver for Full Service MEO Ports and the percentage its affiliate, MIAX, allocated to the depreciation cost driver for MIAX's Limited Service MEI Ports, differ by only 2.4%. However, MIAX's approximate dollar amount is greater than that of MIAX Pearl Options by approximately $9,000 per month. This is due to two primary factors. First, MIAX has under gone a technology refresh since the time MIAX Pearl Options launched in 2017, leading to it having more hardware that software that is subject to depreciation. Second, MIAX maintains 24 matching engines while MIAX Pearl Options maintains only 12 matching engines. This also results in more of MIAX's hardware and software being subject to depreciation than MIAX Pearl Options' hardware and software due to the greater amount of equipment and software necessary to support the greater number of matching engines on MIAX.
Finally, a portion of general shared expenses was allocated to overall Full Service MEO Ports costs as without these general shared costs the Exchange would not be able to operate in the manner that it does and provide application sessions. The costs included in general shared expenses include general expenses of the Exchange, including office space and office expenses (
Lastly, the Exchange notes that this allocation is less than its affiliate, MIAX, as MIAX allocated 9.8% of its Allocated Shared Expense towards Limited Service MEI Ports, while MIAX Pearl Options allocated 3.6% to its Full Service MEO Ports (Bulk and Single) for the same category of expense. The allocation percentages set forth above differ because they correspond with the number of applicable ports utilized on each exchange. For May 2023, MIAX Market Makers utilized 1,770 Limited Service MEI Ports and MIAX Emerald Market Makers utilized 1,017 Limited Service MEI ports. When compared to Full Service Port (Bulk and Single) usage, for May 2023, MIAX Pearl Options Members utilized only 384 Full Service MEO Ports (Bulk and Single), far fewer than number of Limited Service MEI Ports utilized by Market Makers on MIAX, thus resulting in a smaller cost allocation. There is increased cost associated with supporting a higher number of ports (requiring more hardware and other technical infrastructure), thus the Exchange allocates a higher percentage of expense than MIAX Pearl Options which has a lower port count.
Based on May 2023 data, the total monthly cost allocated to Full Service MEO Ports of $137,012 was divided by the number of chargeable Full Service MEO Ports the Exchange maintained at the time that proposed pricing was determined (25 total; 25 Full Service MEO Port, Bulk, and 0 Full Service MEO Port, Single), to arrive at a cost of approximately $5,480 per month, per charged Full Service MEO Port.
In conducting its Cost Analysis, the Exchange did not allocate any of its expenses in full to any core services (including physical connectivity or Full Service MEO Ports) and did not double- count any expenses. Instead, as described above, the Exchange allocated applicable cost drivers across its core services and used the same Cost Analysis to form the basis of this proposal and the filings the Exchange submitted proposing fees for proprietary data feeds offered by the Exchange. For instance, in calculating the Human Resources expenses to be allocated to physical connections based upon the above described methodology, the Exchange has a team of employees dedicated to network infrastructure and with respect to such employees the Exchange allocated network infrastructure personnel with a high percentage of the cost of such personnel (42.9%) given their focus on functions necessary to provide physical connections. The salaries of those same personnel were allocated only 12.3% to Full Service MEO Ports and the remaining 44.8% was allocated to 1Gb connectivity, other port services, transaction services, membership services and market data. The Exchange did not allocate any other Human Resources expense for providing physical connections to any other employee group, outside of a smaller allocation of 16.9% for 10Gb ULL connectivity or 17.3% for the entire network, of the cost associated with certain specified personnel who work closely with and support network infrastructure personnel. In contrast, the Exchange allocated much smaller percentages of costs (6.0% or less) across a wider range of personnel groups in order to allocate Human Resources costs to providing Full Service MEO Ports. This is because a much wider range of personnel are involved in functions necessary to offer, monitor and maintain Full Service MEO Ports but the tasks necessary to do so are not a primary or full-time function.
In total, the Exchange allocated 26.9% of its personnel costs to providing 10Gb ULL and 1Gb ULL connectivity and 8.3% of its personnel costs to providing Full Service MEO Ports, for a total allocation of 35.2% Human Resources expense to provide these specific connectivity and port services. In turn, the Exchange allocated the remaining 64.8% of its Human Resources expense to membership services, transaction services, other port services and market data. Thus, again, the Exchange's allocations of cost across core services were based on real costs of operating the Exchange and were not double-counted across the core services or their associated revenue streams.
As another example, the Exchange allocated depreciation expense to all core services, including physical connections and Full Service MEO Ports, but in different amounts. The Exchange believes it is reasonable to allocate the identified portion of such expense because such expense includes
The Exchange notes that its revenue estimates are based on projections across all potential revenue streams and will only be realized to the extent such revenue streams actually produce the revenue estimated. The Exchange does not yet know whether such expectations will be realized. For instance, in order to generate the revenue expected from connectivity, the Exchange will have to be successful in retaining existing clients that wish to maintain physical connectivity and/or Full Service MEO Ports or in obtaining new clients that will purchase such services. Similarly, the Exchange will have to be successful in retaining a positive net capture on transaction fees in order to realize the anticipated revenue from transaction pricing.
The Exchange notes that the Cost Analysis is based on the Exchange's 2023 fiscal year of operations and projections. It is possible, however, that actual costs may be higher or lower. To the extent the Exchange sees growth in use of connectivity services it will receive additional revenue to offset future cost increases.
However, if use of connectivity services is static or decreases, the Exchange might not realize the revenue that it anticipates or needs in order to cover applicable costs. Accordingly, the Exchange is committing to conduct a one-year review after implementation of these fees. The Exchange expects that it may propose to adjust fees at that time, to increase fees in the event that revenues fail to cover costs and a reasonable mark-up of such costs. Similarly, the Exchange may propose to decrease fees in the event that revenue materially exceeds our current projections. In addition, the Exchange will periodically conduct a review to inform its decision making on whether a fee change is appropriate (
The proposed fees will allow the Exchange to cover certain costs incurred by the Exchange associated with providing and maintaining necessary hardware and other network infrastructure as well as network monitoring and support services; without such hardware, infrastructure, monitoring and support the Exchange would be unable to provide the connectivity and port services. Much of the cost relates to monitoring and analysis of data and performance of the network via the subscriber's connection(s). The above cost, namely those associated with hardware, software, and human capital, enable the Exchange to measure network performance with nanosecond granularity. These same costs are also associated with time and money spent seeking to continuously improve the network performance, improving the subscriber's experience, based on monitoring and analysis activity. The Exchange routinely works to improve the performance of the network's hardware and software. The costs associated with maintaining and enhancing a state-of-the-art exchange network is a significant expense for the Exchange, and thus the Exchange believes that it is reasonable and appropriate to help offset those costs by amending fees for connectivity services. Subscribers, particularly those of 10Gb ULL connectivity, expect the Exchange to provide this level of support to connectivity so they continue to receive the performance they expect. This differentiates the Exchange from its competitors. As detailed above, the Exchange has five primary sources of revenue that it can potentially use to fund its operations: transaction fees, fees for connectivity services, membership and regulatory fees, and market data fees. Accordingly, the Exchange must cover its expenses from these five primary sources of revenue.
The Exchange's Cost Analysis estimates the annual cost to provide 10Gb ULL connectivity services will equal $11,567,509. Based on current 10Gb ULL connectivity services usage, the Exchange would generate annual revenue of approximately $17,496,000. The Exchange believes this represents a modest profit of 34% when compared to the cost of providing 10Gb ULL connectivity services, which could decrease over time.
Based on the above discussion, even if the Exchange earns the above revenue or incrementally more or less, the proposed fees are fair and reasonable because they will not result in excessive pricing that deviates from that of other exchanges or a supra-competitive profit, when comparing the total expense of the Exchange associated with providing 10Gb ULL connectivity and Full Service MEO Port services versus the total projected revenue of the Exchange associated with network 10Gb ULL connectivity and Full Service MEO Port services.
The Exchange also notes that this the resultant profit margin differs slightly
Further, the Exchange proposes to charge rates that are comparable to, or lower than, similar fees for similar products charged by competing exchanges. For example, for 10Gb ULL connectivity, the Exchange proposes a lower fee than the fee charged by Nasdaq for its comparable 10Gb Ultra fiber connection ($13,500 per month for the Exchange vs. $15,000 per month for Nasdaq).
The Exchange has operated at a cumulative net annual loss since it launched operations in 2017.
The Exchange notes that its revenue estimate is based on projections and will only be realized to the extent customer activity produces the revenue estimated. As a competitor in the hyper-competitive exchange environment, and an exchange focused on driving competition, the Exchange does not yet know whether such projections will be realized. For instance, in order to generate the revenue expected from 10Gb ULL connectivity and Full Service MEO Ports, the Exchange will have to be successful in retaining existing clients that wish to utilize 10Gb ULL connectivity and Full Service MEO Ports and/or obtaining new clients that will purchase such access. To the extent the Exchange is successful in encouraging new clients to utilize 10Gb ULL connectivity and Full Service MEO Ports, the Exchange does not believe it should be penalized for such success. To the extent the Exchange has mispriced and experiences a net loss in connectivity clients or in transaction activity, the Exchange could experience a net reduction in revenue. While the Exchange is supportive of transparency around costs and potential margins (applied across all exchanges), as well as periodic review of revenues and applicable costs (as discussed below), the Exchange does not believe that these estimates should form the sole basis of whether or not a proposed fee is reasonable or can be adopted. Instead, the Exchange believes that the information should be used solely to confirm that an Exchange is not earning—or seeking to earn—supra-competitive profits. The Exchange believes the Cost Analysis and related projections in this filing demonstrate this fact.
The Exchange is owned by a holding company that is the parent company of four exchange markets and, therefore, the Exchange and its affiliated markets must allocate shared costs across all of those markets accordingly, pursuant to the above-described allocation methodology. In contrast, the Investors Exchange LLC (“IEX”) and MEMX, which are currently each operating only one exchange, in their recent non-transaction fee filings allocate the entire amount of that same cost to a single exchange. This can result in lower profit margins for the non-transaction fees proposed by IEX and MEMX because the single allocated cost does not experience the efficiencies and synergies that result from sharing costs across multiple platforms. The Exchange and its affiliated markets often share a single cost, which results in cost efficiencies that can cause a broader gap between the allocated cost amount and projected revenue, even though the fee levels being proposed are lower or competitive with competing markets (as described above). To the extent that the application of a cost-based standard results in Commission Staff making determinations as to the appropriateness of certain profit margins, the Exchange believes that Commission Staff should also consider whether the proposed fee level is comparable to, or competitive with, the same fee charged by competing exchanges and how different cost allocation methodologies (such as across multiple markets) may result in different profit margins for comparable fee levels. Further, if Commission Staff is making determinations as to appropriate profit margins in their approval of exchange fees, the Exchange believes that the Commission should be clear to all market participants as to what they have determined is an appropriate profit margin and should apply such determinations consistently and, in the case of certain legacy exchanges, retroactively, if such standards are to avoid having a discriminatory effect.
Further, as is reflected in the proposal, the Exchange continuously and aggressively works to control its costs as a matter of good business practice. A potential profit margin should not be evaluated solely on its size; that assessment should also consider cost management and whether the ultimate fee reflects the value of the
The Exchange believes that the proposed fees are reasonable, fair, equitable, and not unfairly discriminatory because they are designed to align fees with services provided and will apply equally to all subscribers.
The Exchange believes that the proposed fees are equitably allocated among users of the network connectivity and port alternatives, as the users of 10Gb ULL connections consume substantially more bandwidth and network resources than users of 1Gb ULL connection. Specifically, the Exchange notes that 10Gb ULL connection users account for more than 99% of message traffic over the network, driving other costs that are linked to capacity utilization, as described above, while the users of the 1Gb ULL connections account for less than 1% of message traffic over the network. In the Exchange's experience, users of the 1Gb connections do not have the same business needs for the high-performance network as 10Gb ULL users.
The Exchange's high-performance network and supporting infrastructure (including employee support), provides unparalleled system throughput with the network ability to support access to several distinct options markets. To achieve a consistent, premium network performance, the Exchange must build out and maintain a network that has the capacity to handle the message rate requirements of its most heavy network consumers. These billions of messages per day consume the Exchange's resources and significantly contribute to the overall network connectivity expense for storage and network transport capabilities. The Exchange must also purchase additional storage capacity on an ongoing basis to ensure it has sufficient capacity to store these messages to satisfy its record keeping requirements under the Exchange Act.
The tiered pricing structure for Full Service MEO Ports has been in effect since 2018.
To achieve a consistent, premium network performance, the Exchange must build out and maintain a network that has the capacity to handle the message rate requirements of its most heavy network consumers during anticipated peak market conditions. The need to support billions of messages per day consume the Exchange's resources and significantly contribute to the overall network connectivity expense for storage and network transport capabilities. The Exchange must also purchase additional storage capacity on an ongoing basis to ensure it has sufficient capacity to store these messages as part of it surveillance program and to satisfy its record keeping requirements under the Exchange Act.
The Exchange further believes that the proposed fees are reasonable, equitably allocated and not unfairly discriminatory because, for the flat fee, the Exchange provides each Member two (2) Full Service MEO Ports for each matching engine to which that Member is connected. Unlike other options exchanges that provide similar port functionality and charge fees on a per port basis,
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange believes the proposed fees will not result in any burden on intra-market competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed fees will allow the Exchange to recoup some of its costs in providing 10Gb ULL connectivity and Full Service MEO Ports at below market rates to market participants since the Exchange launched operations. As described above, the Exchange has operated at a cumulative net annual loss since it launched operations in 2017
Further, the Exchange does not believe that the proposed fee increase for the 10Gb ULL connection change would place certain market participants at the Exchange at a relative disadvantage compared to other market participants or affect the ability of such market participants to compete. As is the case with the current proposed flat fee, the proposed fee would apply uniformly to all market participants regardless of the number of connections they choose to purchase. The proposed fee does not favor certain categories of market participants in a manner that would impose an undue burden on competition.
The Exchange does not believe that the proposed rule change would place certain market participants at the Exchange at a relative disadvantage compared to other market participants or affect the ability of such market participants to compete. In particular, Exchange personnel has been informally discussing potential fees for connectivity services with a diverse group of market participants that are connected to the Exchange (including large and small firms, firms with large connectivity service footprints and small connectivity service footprints, as well as extranets and service bureaus) for several months leading up to that time. The Exchange does not believe the proposed fees for connectivity services would negatively impact the ability of Members, non-Members (extranets or service bureaus), third-parties that purchase the Exchange's connectivity and resell it, and customers of those resellers to compete with other market participants or that they are placed at a disadvantage.
The Exchange does anticipate, however, that some market participants may reduce or discontinue use of connectivity services provided directly by the Exchange in response to the proposed fees. In fact, as mentioned above, one MIAX Pearl Options Market Maker terminated their membership on January 1, 2023 as a direct result of the proposed fee changes.
The Exchange also does not believe that the proposed rule change and price increase will result in any burden on inter-market competition that is not necessary or appropriate in furtherance of the purposes of the Act. As this is a fee increase, arguably if set too high, this fee would make it easier for other exchanges to compete with the Exchange. Only if this were a substantial fee decrease could this be considered a form of predatory pricing. In contrast, the Exchange believes that, without this fee increase, we are potentially at a competitive disadvantage to certain other exchanges that have in place higher fees for similar services. As we have noted, the Exchange believes that connectivity fees can be used to foster more competitive transaction pricing and additional infrastructure investment and there are other options markets of which market participants may connect to trade options at higher rates than the Exchange's. Accordingly, the Exchange does not believe its proposed fee changes impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange also believes that the proposed fees for 10Gb connectivity are appropriate and warranted and would not impose any burden on competition. This is a technology driven change designed to meet customer needs. The proposed fees would assist the Exchange in recovering costs related to providing dedicated 10Gb connectivity to the Exchange while enabling it to continue to meet current and anticipated demands for connectivity by its Members and other market participants. Separating its 10Gb network from MIAX enables the Exchange to better compete with other
Similarly, and also in connection with a technology change, Cboe Exchange, Inc. (“Cboe”) amended its access and connectivity fees, including port fees.
The rule structure for options exchanges are also fundamentally different from those of equities exchanges. In particular, options market participants are not forced to connect to (and purchase market data from) all options exchanges. For example, there are many order types that are available in the equities markets that are not utilized in the options markets, which relate to mid-point pricing and pegged pricing which require connection to the SIPs and each of the equities exchanges in order to properly execute those orders in compliance with best execution obligations. Additionally, in the options markets, the linkage routing and trade through protection are handled by the exchanges, not by the individual members. Thus not connecting to an options exchange or disconnecting from an options exchange does not potentially subject a broker-dealer to violate order protection requirements. Gone are the days when the retail brokerage firms (such as Fidelity, Schwab, and eTrade) were members of the options exchanges—they are not members of the Exchange or its affiliates, they do not purchase connectivity to the Exchange, and they do not purchase market data from the Exchange. Accordingly, not only is there not an actual regulatory requirement to connect to every options exchange, the Exchange believes there is also no “de facto” or practical requirement as well, as further evidenced by the recent significant reduction in the number of broker-dealers that are members of all options exchanges.
The Cboe proposal also referenced the National Market System Plan Governing the Consolidated Audit Trail (“CAT NMS Plan”),
Cboe also filed to establish a monthly fee for Certification Logical Ports of $250 per Certification Logical Port.
In its statutory basis, Cboe justified the new port fee by stating that it believed the Certification Logical Port fee were reasonable because while such ports were no longer completely free, TPHs and non-TPHs would continue to be entitled to receive free of charge one Certification Logical Port for each type of logical port that is currently offered in the production environment.
The Cboe fee proposals described herein were filed subsequent to the D.C. Circuit decision in
In conclusion, as discussed thoroughly above, the Exchange regrettably believes that the application of the Revised Review Process and Staff Guidance has adversely affected inter-market competition among legacy and non-legacy exchanges by impeding the ability of non-legacy exchanges to adopt or increase fees for their market data and access services (including connectivity and port products and services) that are on parity or commensurate with fee levels previously established by legacy exchanges. Since the adoption of the Revised Review Process and Staff Guidance, and even more so recently, it has become extraordinarily difficult to adopt or increase fees to generate revenue necessary to invest in systems, provide innovative trading products and solutions, and improve competitive standing to the benefit of non-legacy exchanges' market participants. Although the Staff Guidance served an important policy goal of improving disclosures and requiring exchanges to justify that their market data and access fee proposals are fair and reasonable, it has also negatively impacted non-legacy exchanges in particular in their efforts to adopt or increase fees that would enable them to more fairly compete with legacy exchanges, despite providing enhanced disclosures and rationale under both competitive and cost basis approaches provided for by the Revised Review Process and Staff Guidance to support their proposed fee changes.
The Exchange received one comment letter on the Initial Proposal, one comment letter on the Second Proposal, one comment letter on the Third Proposal, and one comment letter on the Fourth Proposal, all from the same commenter.
The foregoing rule change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act,
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration.
Notice.
This is a notice of an Administrative disaster declaration of a rural area for the State of New Jersey dated 08/18/2023.
Issued on 08/18/2023.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the Administrator's disaster declaration of a rural area, applications for disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The number assigned to this disaster for physical damage is 18086 6 and for economic injury is 18087 0.
U.S. Small Business Administration.
Notice.
This is a Notice of the Presidential declaration of a major disaster for Public Assistance Only for the State of Tennessee (FEMA-4729-DR), dated 08/17/2023.
Issued on 08/17/2023.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the President's major disaster declaration on 08/17/2023, Private Non-Profit organizations that provide essential services of a governmental nature may file disaster loan applications at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The number assigned to this disaster for physical damage is 18088 B and for economic injury is 18089 0.
Social Security Administration (SSA).
Notice of a new matching program.
In accordance with the provisions of the Privacy Act, as amended, this notice announces a new matching program with the Bureau of the Fiscal Service, Department of the Treasury (Fiscal Service). Under this matching program, Fiscal Service will disclose ownership of Savings Securities data to SSA. This disclosure will provide SSA with information necessary to verify an individual's self-certification of his or her financial status to determine eligibility for low-income subsidy assistance (Extra Help) in the Medicare Part D prescription drug benefit program established under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA).
The deadline to submit comments on the proposed matching program is September 25, 2023.
The matching program will be applicable on October 2, 2023, or once a minimum of 30 days after publication of this notice has elapsed, whichever is later. The matching program will be in effect for a period of 18 months.
You may submit comments by any one of three methods—internet, fax, or mail. Do not submit the same comments multiple times or by more than one method. Regardless of which method you choose, please state that your comments refer to Docket No. SSA-2022-0066 so that we may associate your comments with the correct docket.
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Interested parties may submit general questions about the matching program to Cynthia Scott, Division Director, Office of Privacy and Disclosure, Office of the General Counsel, Social Security Administration, G-401 WHR, 6401 Security Boulevard, Baltimore, MD 21235-6401, at telephone: (410) 966-1943, or send an email to
None.
Fiscal Service and SSA execute this agreement in compliance with the Privacy Act of 1974 (5 U.S.C. 552a), as amended by the Computer Matching and Privacy Protection Act of 1988, and the regulations and guidance promulgated thereunder.
SSA will disclose to Fiscal Service a finder file with the SSN for each individual for whom it requests Savings Securities registration information. Fiscal Service bases the query on the SSN associated with the account and reports any subsequent account holdings. When a match occurs on an SSN, Fiscal Service will disclose the following to SSA: the purchase amount; the account number and confirmation number; the series; the issue date of the security; the current redemption value; and the return date of the finder file.
Fiscal Service will match the SSNs from SSA's finder file with the SSNs in Fiscal Service system of records notice .014 (United States Securities and Access), fully published at 85 FR 11776 (February 27, 2020). System of records notice .014 (United States Securities and Access) is derived from legacy BPD systems of records notices .002 (United States Savings-Type Securities), .003 (United States Securities (Other than Savings-Type Securities)), and .008 (Retail Treasury Securities Access Application).
Washington, Idaho & Montana Railway LLC (WIM), a noncarrier, has filed a verified notice of exemption pursuant to 49 CFR 1150.31 to operate approximately 43.744 miles of rail line owned by the BLPI RR LLC (BLPI RR)
According to the verified notice, WIM has entered into an operating agreement with BLPI RR. WIM further states that it will interchange with the Spokane, Spangle & Palouse Railway (SS&P) at SS&P's connection with the Line at the Washington/Idaho state line or at another location near Palouse, Wash., as WIM and SS&P may agree.
This transaction is related to a concurrently filed verified notice of exemption in
WIM certifies that its annual projected revenues as a result of the transaction will not exceed those that would qualify it as a Class III carrier and will not exceed $5 million. WIM also states that the operation agreement does not involve a provision or agreement that would limit future interchange with a third-party connecting carrier.
The effective date of this exemption is September 8, 2023 (30 days after the verified notice was filed).
If the verified notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions for stay must be filed no later than September 1, 2023 (at least seven days before the exemption becomes effective).
All pleadings, referring to Docket No. FD 36707, must be filed with the Surface Transportation Board either via e-filing on the Board's website or in writing addressed to 395 E Street SW, Washington, DC 20423-0001. In addition, a copy of each pleading must be served on WIM's representative, John K. Fiorilla, Dyer & Peterson, PC, 605 Main Street, Suite 104, Riverton, NJ 08077-1440.
According to WIM, this action is categorically excluded from environmental review under 49 CFR 1105.6(c) and from historic preservation reporting requirements under 49 CFR 1105.8(b).
Board decisions and notices are available at
By the Board, Mai T. Dinh, Director, Office of Proceedings.
Federal Aviation Administration (FAA), DOT.
Notice and request for comments.
In accordance with the Paperwork Reduction Act of 1995, FAA invites public comments about our intention to request the Office of Management and Budget (OMB) approval for a renewed information collection. The
Written comments should be submitted by September 25, 2023.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Kevin Partowazam by email at:
The CORSIA MRV Program is a voluntary program for certain U.S. air carriers and commercial operators (collectively referred hereinafter as “operators”) to submit certain airplane CO
Under CORSIA, all ICAO Member States whose airplane operators undertake international flights were required to develop an MRV system for CO
—Domestic flights;
—Humanitarian, medical, and firefighting operations, including flight(s) preceding or following a humanitarian, medical, or firefighting flight provided such flight(s) were conducted with the same airplane, were required to accomplish the related humanitarian, medical, or firefighting activities or to reposition thereafter the airplane for its next activity;
—Operations using an airplane with a maximum certificated take-off mass equal to or less than 5,700 kg;
—Operations on behalf of the military.
Each document use Microsoft Excel-based templates and can be transmitted via email. EMPs that are submitted by operators will be used as a collaborative tool between the operator and FAA to document a given operator's chosen fuel use monitoring procedures. FAA will retain a copy of the EMP and will share with ICAO a list of operators that submit EMPs. FAA will not submit any specific EMPs from U.S. operators to ICAO. Large operators,
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of application for exemption; request for comments.
FMCSA announces that it has received an application from the state of Hawaii to exempt specified portions of the CDL skills test for drivers on the islands of Lanai and Molokai due to the lack of highway infrastructure to allow completion of the full skills test. Regulations require a CDL applicant to possess and demonstrate specific on-road safe driving skills, including the ability to choose a safe gap for changing lanes, passing other vehicles, and crossing or entering traffic and the ability to signal appropriately when changing direction in traffic. The state of Hawaii proposes to issue a restricted CDL to drivers who pass a limited CDL skills test in which the driver would not be required to demonstrate the ability to perform those on-road skills. FMCSA requests public comment on the applicant's request for exemption.
Comments must be received on or before September 25, 2023.
You may submit comments identified by Federal Docket Management System (FDMS) Number FMCSA-2023-0185 by any of the following methods:
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Each submission must include the Agency name and the docket number (FMCSA-2023-0185) for this notice. Note that DOT posts all comments received without change to
Mr. Richard Clemente, Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards, FMCSA, at (202) 366-2722 or
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice (FMCSA-2023-0185), indicate the specific section of this document to which the comment applies, and provide a reason for suggestions or recommendations. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so the Agency can contact you if it has questions regarding your submission.
To submit your comment online, go to
FMCSA has authority under 49 U.S.C. 31136(e) and 31315(b) to grant exemptions from Federal Motor Carrier Safety Regulations (FMCSRs). FMCSA must publish a notice of each exemption request in the
The Agency reviews safety analyses and public comments submitted and determines whether granting the exemption would likely achieve a level of safety equivalent to, or greater than, the level that would be achieved by the current regulation (49 CFR 381.305). The Agency must publish its decision in the
The state of Hawaii seeks an exemption from the requirements in 49 CFR 383.113(c) that an applicant for a commercial driver's license (CDL) must demonstrate safe on-road driving skills, including the ability to choose a safe gap for changing lanes, passing other vehicles, crossing or entering traffic, and the ability to signal appropriately when changing direction in traffic (49 CFR 383.113(c)(2) and (4)). The state of Hawaii maintains that the islands of Lanai and Molokai do not have at least two miles of a straight section of urban business street and at least two miles of an expressway or highway section with multiple lanes going in each direction to allow the ability to legally change lanes. The state of Hawaii proposes to establish a new CDL restriction “R”, limiting the CDL's validity to the islands of Lanai and Molokai only. These restricted CDLs would also have the “K” (intrastate) restriction and would be applied to drivers who take an abbreviated CDL skills test.
A copy of the State of Hawaii's application for exemption, along with supplemental information provided by HDOT, is available for review in the docket for this notice.
In accordance with 49 U.S.C. 31315(b), FMCSA requests public comment from all interested persons on the state of Hawaii's application for an exemption from the CDL regulations in 49 CFR 383.113(c). All comments received before the close of business on the comment closing date indicated at the beginning of this notice will be considered and will be available for examination in the docket at the location listed under the
Federal Railroad Administration (FRA), Department of Transportation (DOT).
Notice of information collection; request for comment.
Under the Paperwork Reduction Act of 1995 (PRA) and its implementing regulations, FRA seeks approval of the Information Collection Request (ICR) summarized below. Before submitting this ICR to the Office of Management and Budget (OMB) for approval, FRA is soliciting public comment on specific aspects of the activities identified in the ICR.
Interested persons are invited to submit comments on or before October 24, 2023.
Written comments and recommendations for the proposed ICR should be submitted on
Ms. Arlette Mussington, Information Collection Clearance Officer, at email:
The PRA, 44 U.S.C. 3501-3520, and its implementing regulations, 5 CFR part 1320, require Federal agencies to provide 60-days' notice to the public to allow comment on information collection activities before seeking OMB approval of the activities.
FRA believes that soliciting public comment may reduce the administrative and paperwork burdens associated with the collection of information that Federal regulations mandate. In summary, comments received will advance three objectives: (1) reduce reporting burdens; (2) organize information collection requirements in a “user-friendly” format to improve the use of such information; and (3) accurately assess the resources expended to retrieve and produce
The summary below describes the ICR that FRA will submit for OMB clearance as the PRA requires:
In this 60-day notice, FRA adjusted the respondent universe from 41 railroads to 40 railroads to reflect the current number of Class I, intercity passenger, and commuter railroads required to comply with part 272 requirements. FRA adjusted the total estimated annual burden in the PRA table from 467 hours to 246 hours. Specifically, under § 272.103(e), FRA adjusted the burden from 24 hours to 12 hours because FRA anticipates that the annual submissions of modified and existing CISP plans will decrease from 4 plans to 2 plans. Additionally, under § 272.103(f), FRA adjusted the burden from 416 hours to 208 hours because FRA anticipates that railroads will increasingly provide their employees with electronic copies of the CISPs rather than hard copies.
FRA informs all interested parties that it may not conduct or sponsor, and a respondent is not required to respond to, a collection of information that does not display a currently valid OMB control number.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Receipt of petitions.
Ricon Corporation (Ricon) has determined that certain Ricon S-Series and K-Series platform lifts do not fully comply with Federal Motor Vehicle Safety Standard (FMVSS) No. 403,
Send comments on or before September 25, 2023.
Interested persons are invited to submit written data, views, and arguments on the petitions. Comments must refer to the docket and notice number cited in the title of this notice and submitted by any of the following methods:
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• Comments may also be faxed to (202) 493-2251.
Comments must be written in the English language and be no greater than 15 pages in length, although there is no limit to the length of necessary attachments to the comments. If comments are submitted in hard copy form, please ensure that two copies are provided. If you wish to receive confirmation that comments you have submitted by mail were received, please enclose a stamped, self-addressed postcard with the comments. Note that all comments received will be posted without change to
All comments and supporting materials received before the close of business on the closing date indicated above will be filed in the docket and will be considered. All comments and supporting materials received after the closing date will also be filed and will be considered to the fullest extent possible.
When the petitions are granted or denied, notice of the decision will also be published in the
All comments, background documentation, and supporting materials submitted to the docket may be viewed by anyone at the address and times given above. The documents may also be viewed on the internet at
DOT's complete Privacy Act Statement is available for review in a
Ahmad Barnes, Safety Compliance Engineer, NHTSA, Office of Vehicle Safety Compliance, (202) 366-7236.
Ricon has determined that certain Ricon S-Series and K-Series platform lifts do not fully comply with the requirements of paragraphs S6.7.4, S6.7.8.2, S6.13.4.1, and S6.4.4.2 of FMVSS No. 403,
Based on Ricon's determination, Navistar, who installed the S-Series and K-Series Classic wheelchair lifts in their school and commercial buses, determined that certain model year (MY) 2013-2022 IC buses do not comply with paragraph S4.1.4 of FMVSS No. 404,
This notice of receipt of Ricon and Navistar's petitions is published under 49 U.S.C. 30118 and 30120 and does not represent any Agency decision or other exercise of judgment concerning the merits of the petitions.
Ricon submitted that approximately 35,652 Ricon S-Series and K-Series Platform Lifts, manufactured between October 2, 2012, and April 23, 2021, are potentially involved.
Navistar submitted that the noncompliant lifts were installed in approximately 2,908 school buses and 29 commercial buses. The following school buses are potentially involved:
Ricon explains that the noncompliances are that the subject wheelchair lifts demonstrate the following:
• The command system for the S&K Lifts allows simultaneous performance of more than one function and therefore does not fully meet the requirements in paragraph S6.7.4 of FMVSS No. 403. Specifically, when commanded to move up from ground to vehicle floor level by pressing the “UP” button, the simultaneous actuation of the “DOWN” and “UP” buttons will cause the lift platform to stop its upward motion and begin a normal downward motion. Additionally, while the unoccupied lift platform is commanded to stow from a vehicle floor level by pressing the “STOW” button, the simultaneous actuation of the “DEPLOY” and “STOW” buttons will cause the lift platform to revert to a normal deploy motion.
• The text on the Operating Instructions label that is affixed to the lifts near the controls, as required in paragraph S6.7.8, measures 0.08 inches instead of 0.1 inches, and, therefore, does not comply with the character height requirements stipulated in paragraph S6.7.8.2.
• Ricon's installation instructions for public use lifts do not include verbatim the statement required: “Public use vehicle manufacturers are responsible for complying with the lift lighting requirements in Federal Motor Vehicle Safety Standard No. 404, Platform Lift Installations in Motor Vehicles (49 CFR 571.404)”, and, therefore, do not comply with paragraph S6.13.4.1.
• When the platform is at the ground level loading position, the outer barrier slope for the portion of rise between 13 mm (0.5 in) and 75 mm (3 in) exceeds the 1:8 ratio (7.13°) specified in FMVSS No. 403 paragraph S6.4.4.2. The slope measured on the test lift is 1:6.5 (8.7°) when loaded, which exceeds the required slope by 1.57 degrees, and, therefore, does not comply with paragraph S6.4.4.2.
Navistar explains that due to the noncompliance with FMVSS No. 403 affecting the subject lifts, the subject buses are noncompliant with paragraph S4.1.4 of FMVSS No. 404.
Paragraph S4.1.4 of FMVSS No. 404 and paragraphs S6.7.4, S6.7.8.2, S6.13.4.1, and S6.4.4.2 of FMVSS No. 403 include the requirements relevant to these petitions. S4.1.4 of FMVSS No. 404 requires that the platform lift, as installed, must continue to comply with all of the applicable requirements of FMVSS No. 403.
The relevant paragraphs of FMVSS No. 403 are described as follows:
• S6.7.4 requires that, except for the POWER function described in S6.7.2.1, the control system specified in S6.7.2, must prevent the simultaneous performance of more than one function. If an initial function is actuated, then one or more other functions are actuated while the initial function remains actuated, the platform must either continue in the direction dictated by the initial function or stop. Verification of this requirement is made throughout the lift operations specified in S7.9.3 through S7.9.8.
• S6.7.8.2 requires that simple instructions regarding the platform lift operating procedures, including backup operations as specified by S6.9, must have characters with a minimum height of 2.5 mm (0.1 in) and be written in English.”
• S6.13.4.1 requires that, in addition to meeting the requirements of S6.13.1 through S6.13.3, the installation instructions for public use lifts must include, on the front cover of the instructions, the statement “DOT-Public Use Lift.”
• S6.4.4.2 requires that when the platform lift is at the ground or vehicle level loading position, the slope of any surface over which a passenger may traverse to enter or exit the platform must have a rise to run not greater than 1:2 on the portion of the rise between 6.5 mm (0.25 in) and 13 mm (0.5 in), and 1:8 on the portion of the rise between 13 mm (0.5 in) and 75 mm (3 in). The rise of any sloped surface may not be greater than 75 mm (3 inches). When the lift is at the ground level loading position, measurements are made perpendicular to the ground. When the lift is at the vehicle level loading position, measurements are made perpendicular to the platform threshold area.”
The following views and arguments presented in this section, “V. Summary of the Petitioners' Petitions,” are the views and arguments provided by the petitioners. They have not been evaluated by the Agency and do not reflect the views of the Agency. The petitioners describe the subject noncompliance and contend that the noncompliance is inconsequential as it relates to motor vehicle safety.
Ricon says that it has produced the subject lifts for over a decade and “has never received a claim or any information that suggests an incident or injury” as a result of the subject noncompliances. Although Ricon has found no indication of the subject noncompliances being consequential to motor vehicle safety, Ricon is working to ensure that future production is fully compliant with FMVSS No. 403.
Specifically, Ricon contends that “due to the geometry” of the pendant and buttons it is highly unlikely to simultaneously press the UP and DOWN buttons or the STOW and DEPLOY buttons. Ricon describes the spacing between the pendant and buttons, its composition, and measurements and explains that due to these characteristics, it would be difficult and unlikely for the user to activate multiple buttons simultaneously. Further, Ricon says that “the pendants use four individual push style buttons that utilize a momentary switch to cause the lift to move up/down or stow/deploy” and “a separate button must be pressed downwards for each function.” Overall, Ricon argues the function will not be activated merely by making contact with the button surface; force must be deliberately applied to the button to engage it.
In the event that the up/down or stow/deploy buttons were to be activated simultaneously, Ricon explains that “because of the momentary switch design, the lift can only be activated for as long as the operator holds down the button,” therefore, “[a]s soon as the two buttons are released, the lift immediately stops movement.” Additionally, according to Ricon, if the operator were to continue to simultaneously press the UP and DOWN “the lift would change direction from the upwards movement and instead begin a normal downwards motion” at a speed that falls within the maximum platform velocity, as required by paragraph S.6.2.1 of FMVSS No. 403. Further, Ricon states all occupants “must be secured in the platform by a safety belt which is a redundant safety feature.”
Ricon also goes on to explain that the “STOW” and “DEPLOY” functions can only be activated simultaneously “when the lift is located at vehicle floor left is being commanded to stow.” Ricon states that this does not impact safety “because the lift must be unoccupied” to stow.
Ricon then contends there is a minimal difference in the ratio of the slope in the subject lifts and the ratio required by FMVSS No. 403. Ricon states that the concern this requirement addresses “is not present” in the subject lifts because the outer barrier “to reach the platform is only 4.45 inches long.” Therefore, according to Ricon, the user would not notice the increase in slope. Ricon notes that it “is not aware of any complaints or reports from the field where a user has expressed difficulty or inability to access the platform portion of the lift when using a mobility aid (motorized or manually operated) or when unassisted” and suggests that the lack of reports supports their assertions that the noncompliant slope does not cause the user any difficulty when using the lift.
Ricon also found that the height of certain lowercase letters found on the Operating Instructions label affixed to the lift are 0.08 inches (2.0mm) when they are required to be at least 0.1 inches (2.5mm). Additionally, the installation instructions do not include the exact phrase required by S6.13.4.1 of FMVSS No 403, but rather a paraphrased statement that Ricon believes “conceptually delivers the same message to manufacturers of public use vehicles,” that it is the manufacturer's responsibility to ensure “the lift lighting meets the requirements of the associated safety standard.” Ricon contends that the paraphrased statement would not cause any confusion because the vehicle manufacturer is required by paragraph S4.1.5 of FMVSS No. 404 to certify compliance with the lift lighting requirements described by the required statement found in S6.13.4.1 of FMVSS No. 403.
According to Ricon, NHTSA has previously granted petitions regarding noncompliances that are similar to the subject noncompliance. Ricon cites one petition from The Braun Corporation “where the lift handrails did not meet the values for deflection force.”
Ricon says that, like the noncompliance found in the Braun Corporation's petition, “there is little to no risk of harm or injury” caused by the subject noncompliances. Ricon then reiterates that it is unlikely an operator would simultaneously activate the buttons that control the lift functions and if simultaneous activation of the “STOW”/“DEPLOY” buttons or the “UP”/“DOWN,” did occur, the lift does not respond in a way that would compromise the safety of the occupant. Likewise, Ricon claims, the noncompliant slope of the outer barrier “is not sufficiently different” from the required slope ratio that it would cause “a noticeable change to the user.”
Last, Ricon states that “[i]t is not aware of any claims or injury involving the performance of the control pendant, outer barrier slope, or operator manual or label wording.”
In its petition, Navistar explains that due to the FMVSS No. 403 noncompliances found in the subject lifts, the subject school and commercial buses manufactured by Navistar are noncompliant with paragraph S4.1.4 of FMVSS No. 404. Navistar says that the subject buses meet all other requirements found in FMVSS No. 404.
Navistar states that it “incorporates and adopts the information from Ricon's Petition” and also says it has not received any complaints or other notices nor is it aware of any accidents, injuries, or warranty claims related to the noncompliances occurring in the subject lifts.
Ricon and Navistar conclude their petitions by stating that the subject noncompliances are inconsequential as they relate to motor vehicle safety and that their petitions to be exempted from providing notification of the noncompliance, as required by 49 U.S.C. 30118, and a remedy for the noncompliance, as required by 49 U.S.C. 30120, should be granted.
NHTSA notes that the statutory provisions (49 U.S.C. 30118(d) and 30120(h)) that permit manufacturers to file petitions for a determination of inconsequentiality allow NHTSA to exempt manufacturers only from the duties found in sections 30118 and 30120, respectively, to notify owners, purchasers, and dealers of a defect or noncompliance and to remedy the defect or noncompliance. Therefore, any decision on these petitions only applies to the subject equipment and vehicles that the petitioners no longer controlled at the time they determined that the noncompliance existed. However, any decision on these petitions does not relieve equipment and vehicle distributors and dealers of the prohibitions on the sale, offer for sale, or introduction or delivery for introduction into interstate commerce of the noncompliant equipment and vehicles under their control after Ricon and Navistar notified them that the subject noncompliance existed.
Internal Revenue Service, Treasury.
Notice.
A report summarizing the closed meeting activities of the Art Advisory Panel during Fiscal Year 2022 has been prepared. A copy of this report has been filed with the Assistant Secretary for Management of the Department of the Treasury.
The report is available at
Robin B. Lawhorn, AP:SPR:AAS, Internal Revenue Service/Independent Office of Appeals, 400 West Bay Street, Suite 252, Jacksonville, FL 32202, Telephone number (904) 661-3198 (not a toll free number).
It has been determined that this document is not a major rule as defined in Executive Order 12291 and that a regulatory impact analysis is, therefore, not required. Additionally, this document does not constitute a rule subject to the Regulatory Flexibility Act (5 U.S.C. chapter 6).
Veterans Health Administration, Department of Veterans Affairs.
Notice.
Veterans Health Administration (VHA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
Written comments and recommendations on the proposed collection of information should be received on or before October 24, 2023.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Avenue NW, Washington, DC 20420, (202) 266-4688 or email
Under the PRA of 1995, Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VHA invites comments on: (1) whether the proposed collection of information is necessary for the proper performance of VHA's functions, including whether the information will have practical utility; (2) the accuracy of VHA's estimate of
These six forms (10-0143, 10-0143A, 10-0144, 10-0144A, 10-0460a, and 10-3567) are presented to and completed by State Veterans Homes (SVH) management under Subpart B of the CFR part 51 and then assessed for compliance to applicable regulations under Subparts D, E or F by VA contracted vendors during a VA survey at each State Veterans Home (SVH) across the U.S. as a regulatory action. This collection of forms falls under the auspices of The Office of Geriatrics and Extended Care in VA Central Office (12GEC). As per VHA Directive 1145.01, this collection of forms is part of the VA survey process. The legal requirements that necessitate this collection of information are found specifically at title 38 CFR parts 51.31, § 51.43 and § 51.210 for all three levels of care: nursing home, domiciliary, and adult day health care.
The information required at time of the VA survey includes the application and justification for medications for a basic rate Veteran; records and reports that SVH management must maintain regarding activities of residents or participants; information relating to whether the SVH meets standards concerning residents' rights and responsibilities prior to admission or enrollment, during admission or enrollment, and upon discharge; the records and reports which SVH management and SVH health care professionals must maintain regarding residents or participants and employees; various types of documents pertaining to the management of the SVH; pharmaceutical records; and staffing documentation.
a. VA Form 10-0143—38 CFR 51.210(c)(9)—is used for the annual certification pursuant to the Drug-Free Workplace Act of 1988.
b. VA Form 10-0143A—38 CFR 51.210(c)(8)—is used for annual certification from the responsible State Agency showing compliance with section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112).
c. VA Form 10-0144—38 CFR 51.210(c)(10)—is used for annual certification regarding lobbying, in compliance with Public Law 101-121.
d. VA Form 10-0144A—38 CFR 51.210(c)(11)—is used for annual certification of compliance with Title VI of the Civil Rights Act of 1964, as incorporated in Title 38 CFR 18.1-18.3.
e. VA Form 10-0460a—38 CFR 51.43—As a condition for receiving drugs or medicine under this section or under § 17.96 of this chapter, the State Home will submit to the VA medical center of jurisdiction a monthly completed VA Form 10-0460a with the corresponding prescription(s) for each eligible Veteran.
f. VA Form 10-3567—38 CFR 51.31—is completed by SVH management during the annual VA survey and used to record and then assess the following: operating beds versus recognized beds, total FTEE authorized and vacancies, as well as resident census.
By direction of the Secretary.
Environmental Protection Agency (EPA).
Final rule.
The Environmental Protection Agency (EPA) is finalizing amendments to the new source performance standards (NSPS) for electric arc furnaces (EAF) and argon-oxygen decarburization (AOD) vessels in the steel industry pursuant to the review required by the Clean Air Act.
The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2002-0049. All documents in the docket are listed on the
Donna Lee Jones, Sector Policies and Programs Division (D243-02), P.O. Box 12055, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number: (919) 541-5251; and email address:
The source category that is the subject of this final action is composed of steel manufacturing facilities that operate electric arc furnaces (EAF) and argon-oxygen decarburization (AOD) vessels regulated under CAA section 111 New Source Performance Standards (NSPS). The 2022 North American Industry Classification System (NAICS) code for the source category is 331110 for “Iron and Steel Mills and Ferroalloy Manufacturing” processes. The NAICS code serves as a guide for readers outlining the type of entities that this final action is likely to affect. The NSPS codified in 40 CFR part 60, subpart AAb are directly applicable to affected facilities that begin construction, reconstruction, or modification after May 16, 2022. Final amendments to 40 CFR part 60, subpart AA are applicable to affected EAF and AOD facilities that begin construction, reconstruction, or modification after October 21, 1974, and on or before August 17, 1983. Final amendments to 40 CFR part 60, subpart AAa are applicable to affected EAF and AOD vessels facilities that begin construction, reconstruction, or modification after August 17, 1983, and on or before May 16, 2022. Federal, state, local and Tribal government entities would not be affected by this action. If you have any questions regarding the applicability of this action to a particular entity, you should carefully examine the applicability criteria found in 40 CFR part 60, subparts AA, AAa, and AAb, and consult the person listed in the
In addition to being available in the docket, an electronic copy of this final action is available on the internet at
Under Clean Air Act (CAA) section 307(b)(1), judicial review of this final action is available only by filing a petition for review in the United States Court of Appeals for the District of Columbia Circuit by October 24, 2023. Under CAA section 307(b)(2), the requirements established by this final rule may not be challenged separately in any civil or criminal proceedings brought by the EPA to enforce the requirements.
Section 307(d)(7)(B) of the CAA further provides that “[o]nly an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (including any public hearing) may be raised during judicial review.” This section also provides a mechanism for the EPA to convene a proceeding for reconsideration, “[i]f the person raising an objection can demonstrate to the EPA that it was impracticable to raise such objection within [the period for public comment] or if the grounds for such objection arose after the period for public comment, (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule.” Any person seeking to make such a demonstration to us should submit a Petition for Reconsideration to the Office of the Administrator, U.S. Environmental Protection Agency, Room 3000, WJC West Building, 1200 Pennsylvania Ave. NW, Washington, DC 20460, with a copy to both the person(s) listed in the preceding
The EPA's authority for this final rule is CAA section 111, which governs the establishment of standards of performance for stationary sources. Section 111(b)(1)(A) of the CAA requires the EPA Administrator to list categories of stationary sources that in the Administrator's judgment cause or contribute significantly to air pollution that may reasonably be anticipated to endanger public health or welfare. The EPA must then issue performance standards for new (and modified or reconstructed) sources in each source category pursuant to CAA section 111(b)(1)(B). These standards are referred to as NSPS. The EPA has the authority to define the scope of the source categories, determine the pollutants for which standards should be developed, set the emission level of the standards, and distinguish among classes, types, and sizes within categories in establishing the standards.
CAA section 111(b)(1)(B) requires the EPA to “at least every 8 years review and, if appropriate, revise” NSPS. However, the Administrator need not review any such standard if the “Administrator determines that such review is not appropriate in light of readily available information on the efficacy” of the standard. When conducting a review of an existing performance standard, the EPA has the discretion and authority to add emission limits for pollutants or emission sources not currently regulated for that source category.
In setting or revising a performance standard, CAA section 111(a)(1) provides that performance standards are to reflect “the degree of emission limitation achievable through the application of the best system of emission reduction which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.” The term “standard of performance” in CAA section 111(a)(1) makes clear that the EPA is to determine both the best system of emission reduction (BSER) for the regulated sources in the source category and the degree of emission limitation achievable through application of the BSER. The EPA must then, under CAA section
Pursuant to the definition of new source in CAA section 111(a)(2), standards of performance apply to facilities that begin construction, reconstruction, or modification after the date of publication of the proposed standards in the
As noted in section II. A of this preamble, CAA section 111 requires the EPA to, at least every 8 years review and, if appropriate, revise the standards of performance applicable to new, modified, and reconstructed sources. If the EPA revises the standards of performance, they must reflect the degree of emission limitation achievable through the application of the BSER considering the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements. CAA section 111(a)(1).
In reviewing an NSPS to determine whether it is “appropriate” to revise the standards of performance, the EPA evaluates the statutory factors, which may include consideration of the following information:
• Expected growth for the source category, including how many new facilities, reconstructions, and modifications may trigger NSPS in the future.
• Pollution control measures, including advances in control technologies, process operations, design or efficiency improvements, or other systems of emission reduction, that are “adequately demonstrated” in the regulated industry.
• Available information from the implementation and enforcement of current requirements indicates that emission limitations and percent reductions beyond those required by the current standards are achieved in practice.
• Costs (including capital and annual costs) associated with implementation of the available pollution control measures.
• The amount of emission reductions achievable through application of such pollution control measures.
• Any nonair quality health and environmental impact and energy requirements associated with those control measures.
In evaluating whether the cost of a particular system of emission reduction is reasonable, the EPA considers various costs associated with the particular air pollution control measure or a level of control, including capital costs and operating costs, and the emission reductions that the control measure or particular level of control can achieve. The Agency considers these costs in the context of the industry's overall capital expenditures and revenues. The Agency also considers cost-effectiveness analysis as a useful metric, and a means of evaluating whether a given control achieves emission reduction at a reasonable cost. A cost-effectiveness analysis allows comparisons of relative costs and outcomes (effects) of 2 or more options. In general, cost effectiveness is a measure of the outcomes produced by resources spent. In the context of air pollution control options, cost effectiveness typically refers to the annualized cost of implementing an air pollution control option divided by the amount of pollutant reductions realized annually.
After the EPA evaluates the statutory factors, the EPA compares the various systems of emission reductions and determines which system is “best,” and therefore represents the BSER. The EPA then establishes a standard of performance that reflects the degree of emission limitation achievable through the implementation of the BSER. In doing this analysis, the EPA can determine whether subcategorization is appropriate based on classes, types, and sizes of sources, and may identify a different BSER and establish different performance standards for each subcategory. The result of the analysis and BSER determination leads to standards of performance that apply to facilities that begin construction, reconstruction, or modification after the date of publication of the proposed standards in the
The EPA first promulgated NSPS under CAA section 111 for EAF at steel plants source category on September 23, 1975 (40 FR 43850). These standards of performance are codified in 40 CFR part 60, subpart AA and are applicable to sources that commence construction, modification, or reconstruction after October 21, 1974, and on or before August 17, 1983. These standards of performance regulate emissions of particulate matter (PM) from EAF capture systems and control devices with a PM concentration limit of 12 milligrams per dry standard cubic meter (mg/dscm) [0.0052 grains per dry standard cubic feet (gr/dscf)] and set opacity limits for using capture technology controlling EAF melt shop emissions, which include, but are not limited to, emissions via roof vents, doors, and cracks in walls of 6 percent opacity, with 20 percent and 40 percent opacity allowed during charging and tapping, respectively; control device exhaust at 3 percent opacity due to proper operation of control devices; and dust handling procedures due to proper handling of captured PM at 10 percent opacity.
In 1984, the NSPS rule, 40 CFR part 60, subpart AA (for EAF constructed
On February 14, 1989, 40 CFR part 60, subparts AA and AAa (and Appendix A to 40 CFR part 60) were amended to consolidate the EPA test methods and delete repetitions of methods already referenced (54 FR 6672). Then, on May 17, 1989, minor clarifications and corrections were made to the February 1989 revisions (54 FR 21344). On March 2, 1999, as a result of recommendations made by the EPA's sector policy established in 1994,
An EAF is a metallurgical furnace used to produce carbon and alloy steels. The input material to an EAF is typically almost 100 percent scrap steel. Cylindrical, refractory-lined EAF are equipped with carbon electrodes to be raised or lowered through the furnace roof. With electrodes retracted, the furnace roof can be rotated to permit charging scrap steel into the EAF by overhead crane. Alloying agents and fluxing materials usually are added through doors on the side of the furnace. Electric current is passed between the electrodes and through the scrap, producing an arc and generating enough heat to melt the scrap steel charge. After the melting and refining periods, impurities (in the form of slag
The production of steel in an EAF is a batch process. Cycles, also called heats, range from about 1.5 to 5 hours to produce carbon steel and from 5 to 10 hours to produce alloy steel. Scrap steel is charged to begin a cycle, with alloying agents and slag forming materials added later in the process for refining purposes. The stages of each cycle normally include charging, melting, refining (which also usually includes oxygen blowing), and tapping, all of which generate PM emissions.
Air emission control techniques typically involve an air emission capture system and a gas cleaning system. The air emission capture systems used in the EAF industry include direct shell evacuation control (DEC) systems, side draft hoods, combination hoods, canopy hoods, scavenger ducts, and furnace enclosures. The DEC system consists of ductwork attached to a separate opening, or “fourth hole,” in the furnace roof (top) that draws emissions from the furnace to a gas cleaner and which works only when the furnace is up-right and the roof is in place. Side draft hoods collect furnace exhaust gases from around the electrode holes and work doors after the gases leave the furnace. Combination hoods incorporate elements from the side draft and direct shell evacuation systems. Canopy hoods and scavenger ducts are used to address charging and tapping emissions. Baghouses, also called fabric filters, are typically used as gas cleaning systems (
There are approximately 88 EAF in the United States (U.S.), with most (>95 percent) EAF subject to one of the EAF NSPS subparts. Thirty-one states have one or more EAF facilities, with most of the EAF facilities east of the Mississippi River. Pennsylvania (15), Ohio (10), Alabama (7), and Indiana (7) have the most EAF facilities per state (approximate number of EAF facilities in each state).
The EPA proposed amendments to the NSPS subparts AA and AAa, and a new subpart AAb, based on the current review on May 16, 2022 (87 FR 29710). We received 11 comments from industry, environmental groups, state environmental agencies, and others during the comment period. A summary of the more significant comments we timely received regarding the proposed rule and our responses are provided in this preamble. A summary of all other public comments on the proposal and the EPA's responses to those comments is available in the document
As part of this rulemaking, and pursuant to multiple Executive Orders addressing environmental justice, the EPA engaged and consulted with the public, including populations of overburdened communities and low-income populations, through interactions, such as a letter sent on
Some of the key issues raised by environmental justice stakeholders included a specific area of the country where there are PM problems and where there are 2 EAF facilities; and regulating other pollutants, such as sulfur dioxide (SO
On May 16, 2022, the EPA proposed the results of the review of the EAF and AOD source category standards of performance to determine if revisions were warranted pursuant to CAA section 111(b)(1)(B).
Pursuant to this review, we proposed to revise the NSPS for EAF and AOD vessels. We also proposed several clarifications and corrections to existing NSPS rules (40 CFR part 60, subparts AA and AAa). These proposed actions are discussed below in sections III.A and III.B. We also proposed: periodic compliance testing at least once every 5 years; results of the review of opacity from control device exhaust and from dust handling systems to keep same BSER and limits as in 40 CFR part 6, subpart AAa of 3 percent and 10 percent, respectively; that the emission limits would apply at all times; and electronic reporting.
The EPA proposed to determine that the use of a baghouse with a fabric filter is the BSER for EAF and AOD vessels. The EPA proposed that a limit of at 0.16 pounds (lb) PM emitted per ton steel produced (lb/ton) reflects the degree of emission limitation achievable through application of the BSER. The EPA also proposed to determine using a partial roof canopy to control visible fugitive emissions (VE) from EAF and AOD in the melt shop is BSER. The EPA proposed that a limit of 0 percent opacity during all phases of EAF operation reflects the degree of emission limitation achievable through application of the BSER.
The BSER and proposed standards of performance for PM emissions from capture systems and fabric filters, and for capture of emissions from melt shops was developed from an analysis of EAF PM test reports from 2005 through 2017 obtained by the EPA. The PM data contained in these reports reflected 33 facilities, 46 EAF, 5 AOD, and 54 baghouses in 154 emission and opacity tests (hereafter referred to as the “EAF dataset”). The EAF dataset showed a substantial improvement in EAF, AOD, and baghouse performance beyond the current NSPS PM standards (40 CFR part 60, subparts AA, AAa) for control devices as well as for melt shop opacity. The costs of control, emissions reductions, and other factors were used in the determination of BSER, as explained in next sections.
From the EAF dataset described earlier in this preamble, the EPA identified 15 EAF facilities, approximately half of the EAF dataset, that reported 0 percent melt shop opacity. To determine BSER and its costs to reduce melt shop opacity at EAF facilities from 6 percent to 0 percent opacity, the costs for an addition of a partition roof canopy (above the crane rails) were estimated for the proposal. Canopy hoods are a common method of controlling fugitive EAF emissions. In the proposal cost analysis, we estimated that the annual costs would be $800,000 ($2020
The EPA proposed as the BSER a capture system and fabric filter. For the standard, we proposed a facility-wide mass-based PM limit from all EAF and AOD capture systems and control devices of 0.16 lb total PM per ton steel instead of a PM concentration limit that applies to each capture system and control device, which is the format of the current standards in 40 CFR part 60, subparts AA, AAa. As explained in the proposal, the EPA proposed a facility-wide mass-based PM limit because this form of standard was thought to result in better overall PM control and provide greater assurance of limiting PM emissions from the facility. Most importantly, if EAF emissions can be divided up into separate baghouses, for practical purposes or otherwise, with each device falling under the same NSPS PM limit based on air flow in gr/dscf, there is no accounting for the total PM emissions from the facility. A facility-wide total control device PM emissions limit in units of lb PM/ton of steel produced was expected to eliminate the disparity in control device emissions between low- and high-PM concentration exhaust, such as that for control devices for primary emissions (
To evaluate the BSER to reduce emissions from EAF and AOD capture systems and control devices, the EPA evaluated the baghouse air-to-cloth (A/C) ratio, expressed in units of volume of air flow per unit bag area (
Using model plants developed from the EAF dataset and the EPA cost-estimating procedures,
We proposed that sources complying with 40 CFR part 60, subpart AAb would be required to perform compliance testing every 5 years after the initial testing performed upon startup, as required under 40 CFR part 60.8. This requirement already is required in many of the permits for existing EAF in the EAF dataset and in the industry, and also is a standard requirement for testing for other sources of PM emissions for many other industrial sectors.
The current NSPS standards for EAF in 40 CFR part 60, subparts AA and AAa, require less than 3 percent opacity from control device (baghouse) exhaust and less than 10 percent for dust handling procedures. We proposed to retain these limits in 40 CFR part 60, subpart AAb. (87 FR 29720-29721). In reviewing the EAF dataset, the EPA based these limits on the fact that no facilities reported lower levels of opacity for these sources, nor were lower levels required in any permits for these or any other EAF facilities. In addition, commensurate with determinations reported in the RACT/BACT/LAER Clearinghouse,
The NSPS general provisions (40 CFR 60.11(c)) currently exclude opacity requirements during periods of startup, shutdown and malfunction (SSM). We proposed that opacity limits in 40 CFR part 60, subpart AAb would apply at all times along with all other emissions limits and standards, as provided in 40 CFR 60.11(f), because we concluded in the proposal that there were no technical limitations known to prevent new, reconstructed, or modified facilities from meeting all standards at all times. The language overriding the general provisions SSM opacity exemption was proposed for 40 CFR part 60, subpart AAb at 40 CFR 60.272b(c).
In its 2008 decision in
The EPA proposed the requirement that owners and operators of EAF and AOD subject to the current and new NSPS at 40 CFR part 60, subparts AA, AAa, and AAb submit electronic copies of required performance test reports and any semiannual excess emissions and continuous monitoring system performance and summary reports, through the EPA's Central Data Exchange (CDX) using the Compliance and Emissions Data Reporting Interface (CEDRI). The proposed rule required that performance test/demonstration of compliance results collected using test methods that are supported by the EPA's Electronic Reporting Tool (ERT) as listed on the ERT website
For semiannual reports, the proposed rule required that owners and operators use the appropriate spreadsheet template to submit information to CEDRI. The final versions of the templates for these reports are included in the docket for this action.
We proposed the following amendments and requested comments on the existing NSPS rules for EAF, 40 CFR part 60, subpart AA, and EAF and AOD, 40 CFR part 60, subpart AAa, to update, correct, or clarify these rules to enhance compliance and enforcement.
• Amendments to clarify and refine the rule requirements in 40 CFR part 60, sections 60.271 and 60.271a “Definitions”, 60.272 and 60.272a
• Minor revisions to clarify the rule and enhance compliance and enforcement.
• Solicited comments, data, and other information on whether the EPA should change the time to both find and fix the cause of a BLDS alarm from 3 hours to a longer timeframe (
• Requirement that owners and operators of EAF facilities submit electronic copies of required performance test/demonstration of compliance reports and semiannual reports through the EPA's CDX using the CEDRI and ERT.
• Requirement that performance test/demonstration of compliance results collected using test methods that are supported by the EPA's ERT as listed on the ERT website
• For semiannual reports, requirement that owners and operators use the appropriate spreadsheet template to submit information to CEDRI.
The EPA is finalizing revisions to the NSPS for EAF and AOD at steel plants pursuant the CAA section 111(b)(1)(B) review. The EPA is promulgating the NSPS revisions in a new subpart, 40 CFR part 60, subpart AAb that are applicable to affected facilities constructed, modified, or reconstructed after May 16, 2022. The new subpart reflects a BSER for a PM capture system and fabric filter, and a total facility limit for PM from control devices in units of lb PM/ton steel produced, and a canopy hood to capture melt shop VE, and a 0 percent opacity limit during melting and refining.
We also are finalizing results of the review of opacity from control device exhaust and from dust handling systems to keep same BSER and limits as in 40 CFR part 60, subpart AAa of 3 percent and 10 percent, respectively; that the emission limits would apply at all times; periodic compliance testing at least once every 5 years; and electronic reporting.
The facility-wide PM limit of 0.16 lb/ton as finalized will apply to all EAF and AOD control devices subject to 40 CFR part 60, subpart AAb and also all the air pollution control equipment used to remove particulate matter from the effluent gas stream generated by the EAF and AOD. The melt shop opacity standard of 0 percent as finalized will apply during the melting and refining period, and a 6 percent opacity limit will apply during the charging period and during the tapping period, with daily opacity or VE testing required during all 3 periods. We are finalizing that the PM limit of 0.16 lb/ton standard apply at all times, including during SSM, and that an opacity limit will also apply at all times (
We also are finalizing clarifications and corrections to the 2 existing EAF rules: 40 CFR 60 subpart AA, Standards of Performance for Steel Plants: Electric Arc Furnaces Constructed After 10/21/74 & On or Before 8/17/83; and 40 CFR 60 subpart AAa, Standards of Performance for Steel Plants: Electric Arc Furnaces & Argon-Oxygen Decarburization Constructed After 8/17/83 and On or Before May 16, 2022. For these rules, we are finalizing amendments to certain parts of the current NSPS standards and to allow 24 hours for owners and operators a find and fix the cause of a BLDS alarm.
We proposed that BSER for new, modified, and reconstructed EAF and AOD sources is a capture system and fabric filter. We proposed that the PM limit that reflects BSER is a total facility emission rate of 0.16 lb PM/ton of steel from control devices at an affected facility. The EPA proposed a facility-wide mass-based PM limit from all EAF and AOD control devices per ton of steel produced instead of a PM concentration limit based on mass of PM per control device air flow that applies to each control device, which is the format of the standards in 40 CFR part 60, subparts AA, AAa.
“A process weight format is based on a direct relationship between the quantity of pollutant emitted and the amount of input material consumed or product produced. Because of wide differences between EAF and AOD shops in operating procedures, such as the length of the steel production cycle, grade of steel produced, control technologies, vessel capacities, and other operating parameters, a simple direct relationship between mass emissions and steel production does not exist. Therefore, a process weight format was not selected for control devices regulated by the proposed standards.”
“Methodology to measure the concentration of emissions discharged to the atmosphere from control devices is readily available and well demonstrated. Concentration measurements are obtained directly from the stack emission test data. A concentration standard can be met equally well by a large or a small shop and by carbon and specialty steel shops. Consequently, a concentration format (
The commenter continued that the EPA provides no explanation for the change in its position and fails to address the rationale the Agency provided in 1983 for adopting the current grain-loading standards in NSPS subpart AA and NSPS subpart AAa.
Another commenter added that the EPA's failure to justify this “depart[ure] from a prior policy” would render abandonment of the current concentration-based standard “arbitrary and capricious,” citing to
In the 2022 proposal, we explained that the emissions, and, hence, collected PM, from baghouses that control only secondary emissions can be much lower than the other two types of baghouses, as seen in the EAF dataset where the baghouse with the lowest PM emissions controlled only secondary emissions (87 FR 29715). We also explained that because of the inherent lower baghouse PM input (loading), secondary baghouses can be operated inefficiently without exceeding the current NSPS limit, which is expressed in the units of mass PM per unit of control device exhaust air. In addition, where there is a standard in terms of mass PM per unit of total exhaust air, baghouse dilution air (added to EAF exhaust air) can be increased with the effect of lowering measured baghouse PM emission concentration and disguising the true performance of the baghouse.
Further, at 87 FR 29715, the EPA proposed to set a facility-wide PM limit instead of a limit that applies to each control device (the format of the current standard) because we think this form of standard will result in better control and provide greater assurance of compliance. Most importantly, if EAF emissions can be divided up into separate baghouses, for practical purposes or otherwise, with each device falling under the same NSPS PM limit, there is no accounting for the total PM emissions from the facility. A facility-wide total control device PM emissions limit in units of lb of PM per ton of steel produced also would alleviate the potential disparity in control device emissions between low-and high-loading control devices, such as that for control devices for primary v. secondary emissions, as well as for well-operated v. inefficiently-operated control devices that both operate below the individual baghouse limit (87 FR 29715). Therefore, we did adequately explain our change in position at the proposal and also explained why we now think a facility-wide limit is more protective than a concentration-based limit, thereby satisfying the standard in
The commenter did not include any current data showing the lack of a direct relationship between mass emissions and steel production. The graphs in Figure 1 from the memorandum titled
In 1973, the EPA originally presented a NSPS standard in units of lb/hr-ton during the National Air Pollution Control Technical Advisory Committee (NAPTAC) meeting when the EAF NSPS was first being developed, as described in the 1974
It should be noted that the first promulgated NSPS limit, at 0.0052 gr/dscf, was based on test data from only
Preliminary investigations for the NSPS identified 30 plants from a review of the literature and contacts with industry, a described in the 1974 BID, discussed earlier in this section. From these 30 plants, 11 plants were identified that reportedly were well-controlled for PM emissions. Ten of the 11 facilities were visited, their visible emissions evaluated, and information obtained on the process and control equipment. Although many of the 11 plants practiced good control techniques, the facilities at only 3 plants (Plants A, I and J) were amenable to testing with EPA Method 5. Other facilities were not suitable for emission measurements because they use positive pressure baghouses, which have no stacks. Although development work was in progress, sampling methodology for this type of installation had not been standardized. These 3 plants were nearly identical except for size. They all produced alloy steels and controlled PM emissions with a building evacuation system. Each had a fabric filter control device that exhausted through multiple stacks. Rather than spread the test program effort over 3 tests at nearly identical plants, it was decided a more comprehensive test of one plant would provide more information. The middle-sized plant offered the best possibilities for this comprehensive test. Its size was typical of the mid-range for the industry, and the fabric filter did not have an inordinately large number of exhaust stacks.
To show that a mass-based limit has been considered by the EPA previously, the chronological history of the EAF NSPS subpart AA and AAa standards for PM from control devices, as taken from the 1974 BID, discussed earlier in this section, is as follows:
• In 1972, 299 EAF's in the United States were operated by 99 companies at 121 locations. On February 22, 1973, the Agency presented to the NAPCTAC a draft standard PM limitation of 0.06 pound per hour-ton (lb/hr-ton). Steel industry representatives attending the meeting suggested that the PM standard should be 0.244 lb/hr-ton.
• On May 30 and 31, 1973, at another NAPCTAC meeting, the EPA presented a revised draft technical report and standard. The PM standard presented by the EPA was changed from 0.06 lb/hr-ton to 0.10 lb/hr-ton. The industry representatives at the meeting suggested that the standard be expressed on a concentration basis and be set at 0.008 grains per dry standard cubic feet (gr/dscf) for a dry collector (
• At the January 9, 1974, NAPCTAC meeting, available emission data indicated that a 0.0039 gr/dscf PM standard could be easily achieved. These data were supported by a vendor guarantee of 0.004 gr/dscf on fabric filters at 3 building evacuation systems at 3 similar shops. These shops, owned by one company at one location, produced alloy steel. Another vendor also signed a statement that they would guarantee 0.004 gr/dscf on a system planned for the capture of charging and tapping emissions at a plant which produced carbon steel. Two other vendors stated that although 0.004 gr/dscf was achievable for fabric filters designed to treat large volumes of exhaust gas with low concentrations of PM, it could not be guaranteed, but 0.004 gr/actual cubic feet (acf), approximately equivalent to 0.005 gr/dscf, could be guaranteed. Further, industry representatives at the meeting commented that the 0.0039 gr/dscf level was too stringent for the industry to meet at all times. Therefore, the industry representatives suggested the limitation be 0.008 gr/dscf.
• After the January 9, 1974, NAPCTAC meeting, a vendor stated that, for a fabric filter controlling a direct shell evacuation (DEC) system with a relatively high inlet concentration of PM, 0.005 gr/dscf was a reasonable level to guarantee.
• In the October 21, 1974 proposal (39 FR 37466), the Agency proposed a PM standard to be no more than 0.0052 gr/dscf of PM from the control device, which relaxed the previous presented value of 0.0039 gr/dscf for the limit for the PM concentration emitted from an EAF control device.
In summary, this history of discussions around the first PM limit for EAF control devices in the NSPS is as follows: the EPA originally put forward an EAF control device standard in the form of lb/hr-ton in 1973. The following year, industry suggested a PM limit of 0.008 gr/dscf and vendors presented a guaranteed fabric filter limit of 0.005 gr/dscf. Subsequently, in 1974, the EPA proposed a standard of 0.0039 gr/dscf, which was based on “available emission data” from one facility, as noted in the 1974 BID. However, after NAPCTAC discussions with industry and vendors, a limit of 0.0052 gr/dscf was promulgated by the EPA in 1975 in the EAF NSPS subpart AA and confirmed again in 1984 in the EAF NSPS subpart AAa.
Regardless of the EPA's discussions during prior rulemakings, as detailed in the proposed rule and in this final action, we now have a strong basis to find a direct relationship between mass emissions and steel production that justifies our facility-wide PM limit in units of lb/ton. We show in our analyses of 2010 data from 30 facilities discussed in this preamble (see Figure 1), as well as in data from more facilities from 2005, as discussed in another EPA response in this preamble section, that there is a direct relationship. As explained earlier in section IV.A.1 and in other comments in this section, and in the proposal, the EPA analyzed the total facility PM mass emissions versus production at a number of EAF facilities and found that a correlation exists, and that promulgating a PM standard for NSPS subpart AAb in this form would enhance compliance and may reduce emissions. As noted earlier in this EPA response, the new format of the EAF NSPS subpart AAb, in units of lb/ton ensures that every facility is accountable for the total PM contribution from its EAF and AOD to the environment in the nearby community for every unit of steel produced. As an example of similar thoughts on the value of EAF standards in lb/ton, we note a 2017 facility construction permit for prevention of significant deterioration that included a lb/ton PM limit (0.19 lb/ton), as well as a “no visible emissions” limit for the EAF.
For example, at 87 FR 29716, the EPA described the PM and opacity test data that was used in the BSER analysis. At 87 FR 29715-29716, the EPA explained how the opacity limit was developed considering facility-wide emissions. To determine the PM limit for control device PM emissions under the BSER, the EPA only used data from EAF facilities with 0 percent melt shop opacity. This was because facilities that control their melt shop opacity to 0 percent are collecting more PM (specifically from the melt shop) than facilities that have a nonzero melt shop opacity and, as a result, are sending more PM to their control devices. Consequently, EAF facilities with 0 percent melt shop opacity are expected to have a slightly higher control device PM emission rate on average compared to EAF facilities with greater than 0 percent melt shop opacity, as evidenced by the EAF dataset of 33 EAF facilities. As a corollary, at EAF facilities with 6 percent melt shop opacity, some of the PM generated by the EAF is not captured, avoids the control device, and can exit through the melt shop roof, thus raising the melt shop opacity to above 0 percent. In turn, facilities with 6 percent melt shop opacity collect less PM and, therefore, less PM is sent to control device, which results in (slightly) lower PM emissions in the control device exhaust.
Overall, because of the large amount of PM emission differential between 6 percent and 0 percent melt shop opacity, much less PM is emitted to the environment with 0 percent melt shop opacity than with 6 percent opacity, despite the higher level of control device emissions with 0 percent melt shop opacity. This effect is described quantitatively in the proposal preamble (87 FR 29720). Of the 15 EAF facilities in the EPA dataset with 0 percent melt shop opacity, control device PM emissions data and steel production values needed to develop an emission standard in mass of PM per mass of steel production were available for 13 of the 15 facilities; these data included 51 individual tests from 23 baghouses and 21 EAF. The 13 EAF facilities and their PM emissions were used to demonstrate that 0 percent melt shop opacity is BSER and to develop a facility-wide total PM control device emission standard in lb/ton under the BSER for new, modified, and reconstructed EAF or AOD.
As explained earlier in section IV.A.1 and other comments in this section, and in the proposal, the EPA analyzed the total facility PM mass emissions versus production at a number of EAF facilities and found that a correlation exists, and that promulgating a PM standard for NSPS subpart AAb in this form would enhance compliance and may reduce emissions. As noted earlier in this EPA response, the new format of the EAF NSPS subpart AAb, in units of pound per ton (lb/ton), ensures that every facility is accountable for the total PM contribution from its EAF to the environment in the nearby community for every unit of steel produced.
The commenter stated a compliance method based on PM per ton of steel produced does not take into consideration the various subcategories of EAF operations, differences in steel products, and variation in heat times and tonnages produced, which vary considerably depending on the product grade of steel and the mix of such products at various mills. Some carbon EAF mills produce high tonnages in relatively short heat times, while specialty EAF steel facilities produce much smaller tonnages over heat times that can be 2 to 3 times as long.
The commenter continued, as the EPA noted in developing the NSPS subpart AAa standards in 1984, the production of steel in an EAF is a batch process where `heats' or cycles range from 1 to 5 hours, depending upon the size and quality of the charge, the power input to the furnace, and the desired quality of the steel produced. The commenter added, the EPA's statement in the proposal that “[t]he production of steel in an EAF is a batch process” (87 FR 29713), is not accurate and fails to acknowledge “Endless Charging Systems” and Consteel® continuous feed systems (
The commenter is correct that the lb/ton limit does not take into account the different types of EAF mills, but the various types of steel and production have all been meeting the single concentration standard in subpart AAa (and AA) without issue in the many years since this limit was first set in 1975. Therefore, meeting a lb/ton standard based on the emissions of one third of the facilities in the industry that also are meeting the current standard will not be a problem. Whether a mill is batch or continuous, slow or fast, will not affect the total amount of PM emitted per amount of steel produced for each facility. When a batch process stops producing steel (
Similarly, a continuous EAF process will emit PM as it continues to produce steel. And a relatively large amount of steel produced in a short time will also produce a relatively large amount of PM in a short period. The effect of dividing the PM emitted by the tons of steel produced normalizes the different processes to a common lb/ton term.
The commenter continued to assert that the EPA's derived average, median, minimum, and maximum A/C ratios are all incorrect. The derived A/C ratios misstate the actual A/C ratios reported by the 3 model facilities for which the EPA had actual performance test data (Model Plants A, B, and E). For instance, Model Plant E is the North American Stainless facility in Ghent, Kentucky (NAS-KY), which operates 4 baghouses. For those 4 baghouses, the facility reported to the EPA A/C ratios of 4.1, 4.5, 4.5, and 5.0 ft/min—none of which are close to the EPA's erroneously derived A/C ratio of 7.2 ft/min.
The baghouse A/C ratios from in the NSPS proposal based on II&S data submitted in 2011 for a CAA section 114 request were similar to those submitted in 2005 for another CAA section 114 request for the EAF NESHAP (40 CFR part 63, subpart YYYYY),
As the commenter points out, the 2005 EAF data does not include all of the facilities from the 2010 dataset. In addition, the 2005 data did not have A/C data for all the facilities' baghouses, where there were multiple baghouses, and for some facilities the number of baghouses for each facility changed from 2005 to 2010.
In response to this comment, for the final rule, we re-examined the BSER analysis of total facility PM lb/ton steel from capture systems and fabric filters using A/C ratios from the EAF 2005 CAA section 114 request that ranged from 1.4 to 6.0 ft/min. For Model Plant A, corresponding to Timken-Faircrest-OH, the A/C ratio in the 2005 CAA section 114 request (3.4 A/C) was higher than the 2011 II&S data point (at 1.3 A/C), but the A/C ratio derived using a regression analysis that produced the line of best fit from the 2005 CAA section 114 request data (at 1.4 A/C), is very similar to the II&S datapoint (1.3 A/C).
For Model Plant B, based on Timken-Harrison-OH, the A/C ratio from the 2005 CAA section 114 request (at 2.7 A/C) is very similar to the II&S data point (2.9 A/C) and also from a regression analysis that produced the line of best fit from 2005 (2.7 A/C).
For Model Plant E, based on NAS-KY, an average A/C ratio of 4.5 ft/min A/C was derived from the data reported to the EPA in 2010 (and also provided by the commenter). However, the A/C ratio of 6.0 assigned to the same emissions as
In addition, the EPA used the data from the 2005 CAA section 114 request for the EAF NESHAP to add to the 2010 CAA section 114 request data used for the lb/ton BSER PM limit analyses for capture systems and fabric filters reported in the proposal in order to re-evaluate the proposed lb/ton BSER standard for capture system and fabric filter PM emissions. The 2005 EAF emission data that was able to be converted to lb/ton values and also had A/C ratio data were used along with 2010 CAA 114 request data used to develop BSER for the proposal. A similar trend in PM lb/ton data was seen in the 2005 data as compared to 2010 data, as shown in Figure 2 below, with a lower maximum PM lb/ton value in the 2005 data.
The 2010 CAA section 114 request data used to develop the PM lb/ton standard for the proposal were matched to the A/C ratios in the 2005 CAA section 114 data for the NAS-Ghent-KY facility, to provide a total of 18 facilities in the dataset for PM lb/ton standard for capture systems and fabric filters for the final rule. See the memorandum titled
The baghouse PM emission data in gr/dscf do not address the total emissions generated by a facility. The gr/dscf data can be influenced by increasing dilution air to the baghouse and is not directly related to steel production as PM emissions logically should be. Using concentration in gr/dscf to assess the filtering ability of baghouses can still be done at any time but it doesn't necessarily reflect the contribution of PM by the facility's steel production to the environment. In order to assess a facility's impact to the local environment, the general public would need to know the exhaust rates of every baghouse at a facility to determine the facility's PM emissions, whereas from lb/ton facility-wide data, the maximum amount of PM being emitted can be easily ascertained with only one steel production value and one facility-wide PM limit.
For facilities that modify or reconstruct after May 16, 2022, only the EAF(s) or AOD(s) and the air pollution control equipment that were modified or reconstructed after May 16, 2022, must comply with NSPS subpart AAb. This provision has been added to the rule at in 40 CFR 60.271b under the definition of “
The EPA is finalizing the proposed determination that the BSER for EAF and AOD is capture and control of PM with a fabric filer. The EPA is further finalizing the proposed determination that limit based on the BSER at 0.16 lb/ton total facility PM is achievable for any new, modified, or reconstructed facility because it is based on the EPA's data from approximately one third of the industry. The format of the limit based on BSER (total facility lb PM/ton steel produced from all affected capture systems and fabric filters) provides complete information on the performance of the facility and their EAF rather than that of just the individual baghouse(s) and individual EAF via a concentration based standard, and enables the public and regulators to know the total pollutant impact of the facility's EAF operation on the surrounding community. The current concentration-based limit in NSPS subparts AA and AAa is influenced by the amount of dilution air in the exhaust going through the baghouse, which can be adjusted to some extent by the facility without significant detriment to baghouse operation. Evaluating the impact of PM emissions from a new EAF facility (or reconstructed or modified facility) on the surrounding communities is more easily determined from a facility-wide lb/ton limit. With a lb/ton limit, not only must a new facility determine that their baghouses are working properly, but they must also determine whether the facility is being efficient in its generation of PM at the desired production level compared to the best facilities operating at the same production level. In addition, the total facility lb/ton PM limit provides an overall assessment of emissions from the facility in a format that scales emissions to production, which is based on fundamental engineering principles. The current concentration-based limits in NSPS subparts AA and AAa do not limit the air flow or the number of baghouses that could be used to comply with the standard.
Based on data from 31 EAF facilities (more than one third of the industry), all 31 facilities' baghouse emissions are 40 percent or lower than the current concentration-based limit in 40 CFR part 60, subparts AA, AAa. Therefore, the 0.16 lb/ton production-based limit based on these same data is a significant improvement in emissions control compared to the current standard. Moreover, because the lb/ton limit is the highest level in the EPA data set that includes one third of the industry, the standard that the EPA has determined to reflect the application of the BSER technology is achievable.
Lastly, we used both 2005 EAF PM data with EAF 2005 A/C data, and 2010 EAF PM data with 2005 EAF A/C data for the cost analysis to determine BSER for the EAF lb/ton PM standard, and reached the same conclusion as we did for proposal with 2010 EAF PM data and 2010 II&S A/C data. Therefore, in this final rule, the use of a capture system and fabric filter was determined as the BSER. The PM limit based on BSER of 0.16 lb PM/ton steel facility-wide was derived from the data available to the EPA, which comprised approximately one third of the industry, and also where the EPA considered costs, nonair quality health and environmental impacts, and energy requirements (described below in sections V.A and V.B).
The EPA did not identify any relevant energy impacts or nonair quality health and environmental impacts of the proposed or final standards for PM emissions from EAF and AOD control devices (baghouses). See sections V.A and V.B. of this preamble for details. No comments were received on these issues.
We proposed that VE from EAF and AOD that exit from the melt shop would be limited to an opacity of 0 percent during all phases of operation, based on the determination of BSER as the addition of a partial roof canopy to capture and control melt shop fugitive emissions.
The commenter noted the current proposed rule did not address heat stress concerns, which was in conflict with OSHA's current Heat Stress Initiative and National Enforcement Program that identified “iron and steel mills” specifically as a high hazard industry for heat stress. The commenter stated that safe melt shop operation requires air flow to minimize potential heat stress on workers and equipment. The commenter claimed that negative pressure alone was not sufficient to maintain proper airflow through the melt shop and that cross drafts were necessary and doors and other access points needed to be open. The commenter also had significant concerns about employee health impacts from the proposed totally enclosed melt shop, particularly for its Mobile, Alabama facility, which is located in an extreme climate area, as the proposed changes could cause greater heat stress on employees and would necessitate design and structural changes that the EPA failed to consider in its proposal. The commenter stated that 100 percent capture and 0 percent opacity may not be safe. The commenter noted when evaluating 2 different control systems, the EPA may not simply choose the most cost-effective air pollution control system if it potentially has adverse impacts on the health and safety of workers within the melt shop. The commenter stated that facilities need to allow air changes to protect worker health and safety.
The commenter referenced the 1984 amendments, which dismissed the option for a closed roof configuration to achieve 0 percent opacity due to the impacts of heat stress on worker safety and equipment functioning. A commenter said that statements made by the EPA in the 1984 40 CFR part 60, subpart AAa rulemaking (49 FR 43841) that “the visible emission limits were selected-based on the performance of the capture and control technologies that served as the basis for Regulatory Alternative B (partially open roof monitor)” and that “Regulatory Alternative C (closed roof) was not considered suitable as the basis for national standards of performance because it is based on a closed roof
Another commenter stated the EPA's proposal of 0 percent opacity from the melt shop was based on limited information from opacity tests conducted at 31 facilities, of which less than half achieved the 0 percent melt shop opacity requirement. The commenter stated that the short-term observations conducted during a stack test were taken for a few hours under a specific set of conditions and were not representative of long-term compliance capability and, as such, could not account for routine operating variability and the full range of operating conditions that may affect opacity. The commenter stated that the subset of data the EPA relied upon did not include longer-term operating performance of the identified mills; yet NSPS, as defined by BSER, must account for what was achievable and adequately demonstrated by a wide variety of facilities operating under a wide variety of conditions, not simply show that the standard was achieved at a model plant for a short period of time. The commenter also noted that the data collected by the EPA generally showed that the more years of opacity data reviewed for a given facility, the higher the maximum melt shop opacity.
It would be exorbitantly expensive to the industry (as well as the EPA) for the EPA to request and analyze round-the-clock opacity testing throughout the course of years at a number of facilities in order to obtain data during a “wide variety of conditions and wide variety of facilities.” None of the opacity requirements in previously promulgated rules (40 CFR part 60, subparts AA and AAa) have differentiated conditions or facility types for the opacity requirements in those rules. The commenter does not provide any information showing that the need for these data is justified, except for alluding to the fact that facilities improved their control of opacity in more recent years.
The goal of determining BSER is that it is the “best” system of emission reduction (considering costs and other factors), not the system used by the majority of the industry nor the top facilities when ranked or any other ranking method. However, the EPA acknowledges that the data obtained through CAA section 114 requests consisted of data collected during melting and refining, which is the time period required to test opacity in the current EAF NSPS rules in 40 CFR part 60, subparts AA, AAa. Therefore, in light of comments provided by the industry that reducing opacity during charging and tapping is difficult to achieve because of the physical structure of equipment and because of the much higher PM emissions during charging and tapping than during melting and refining, in the final rule for 40 FCR part 60, subpart AAb we are maintaining the current rule limit in 40 CFR part 60, subparts AA, AAa of 6 percent opacity to apply during charging and tapping, and retaining the proposed 0 percent melt shop opacity for melting and refining. We estimate that the period of charging and tapping is approximately 15 percent of the total EAF operating time period.
A commenter referenced previous rulemaking to corroborate their statements that the EPA did not consider its own historical information. One commenter referred to background documents for earlier NSPS rulings stating that in those documents, the EPA concluded that facilities utilizing DEC were likely to have a visible plume during charging and tapping and could not meet 0 percent opacity on a continuous basis. One commenter referenced the 1983 rulemaking docket stating it included only 7 hours of shop opacity data from some portion of the charging and tapping phase, and that such limited data from 4 decades ago was not representative of, or sufficient to, characterize current melt shop operations. The commenter said these previous findings by the EPA contradict the current proposal that 0 percent opacity was achievable on a continuous basis.
A commenter provided confidential summaries of long-term shop opacity data from the 13 facilities identified by the EPA as achieving the 0 percent standard, and noted that most of the opacity data was collected only during melting and refining, and not during charging and tapping. The commenter stated their summaries demonstrated that 0 percent melt shop opacity was not continuously achieved by the 13 mills cited as exemplars. The commenter noted in a reference that they would readily provide the confidential data to the EPA upon request.
A commenter stated that the current design at their facilities included DEC and a baghouse with a canopy, which under the proposed rule was considered the optimal design, yet it appeared the EPA did not include opacity data from their facilities in the limited data set. The commenter noted they fully complied with current limits in 40 CFR part 60, subparts AA, AAa, including opacity; but their facility data showed that compliance with a 0 percent opacity limit at all times per the proposed standard could not be met continuously due to the production process variability and the raw material inputs. The commenter stated it was possible for the melt shop to experience an opacity greater than 0 percent during charging and tapping when the DEC
A commenter said the EPA in the proposed rule stated 0 percent opacity could be achieved utilizing a canopy over the furnace with an open roof monitor elsewhere. The commenter operated its facilities under such a configuration and did not meet 0 percent opacity on a continuous basis; thus, the EPA's data set was flawed and not representative of the steel manufacturing operation.
Although the commenter presented these data attempting to contradict 0 percent opacity as BSER, the data actually support the preponderance of opacity data at 0 percent, since the number of readings greater than 0 percent were low, ranging from none (
The EPA's evaluation of the degree of emission limitation achievable with the BSER is not based on an average of all facility data nor an average of the best facilities. Rather, the BSER is the
The EPA EAF data, taken mostly from the 2010 CAA section 114 request, required “an aggregate total of 180 minutes of opacity observation concurrent with PM and/or PM less than 2.5 micrometers (PM
However, we agree with the commenter that because the current EAF NSPS rules in 40 CFR part 60, subparts AA and AAa only require opacity measurements during melting and refining, the data obtained by the EPA can be assumed to reflect only operation during melting and refining. Therefore, while we are retaining 0 percent opacity during melting and refining in the final rule as in the proposal, we are reverting back to the opacity limit of 6 percent opacity for charging and tapping as in the current rules in 40 CFR part 60, subparts AA, AAa.
Additionally, opacity testing during charging, tapping, and melting, and refining periods is required in the final rule. Opacity tests during tapping, and melting and refining periods should be able meet the minimum 6 minutes of total opacity testing required under EPA Method 9 in 24 consecutive tests for 15 seconds each. However, we are allowing a modification of EPA Method 9 for testing during charging because of the potentially shorter time period that charging occurs. In the final rule, we are allowing the EPA Method 9 testing during charging to be determined from the average of 12 consecutive observations recorded at 15-second intervals for a total of 3 minutes of opacity testing.
The commenter stated the EPA did not analyze whether canopy hoods were used by the 19 facilities that recorded 0 percent opacity during performance testing or were absent from the 9 facilities that recorded the highest opacity during performance tests. The commenter claims that this information was available to the EPA in the docket for the 40 CFR part 63, subpart YYYYY NESHAP for EAF—the same docket that supplied the majority of the performance test data the EPA used in this rule. The commenter further asserted that the EPA's own review of
A commenter stated the EPA's conclusion is also contradicted within the Agency's cost analysis. In order to estimate how much PM is emitted from a facility that emits 6 percent opacity, the EPA used the 1982 BID [
If some EAF facilities with canopy hoods are not achieving 0 percent opacity, as the commenter alleges, it is likely because both the NESHAP (40 CFR part 63, subpart YYYYY) and NSPS standards (40 CFR part 60, subparts AA, AAa) currently only require 6 percent opacity limits for EAF and AOD, and because the standard is higher, they are only being designed to meet that standard. Regardless of the fact that some EAF and AOD facilities may have been designed this way, they still can be designed or modified to achieve 100 percent capture to ensure 0 percent opacity. The fact that some hoods have not been achieving 100 percent capture at some facilities is not proof that canopy hoods cannot be used to do so for new, modified, or reconstructed sources. The commenter fails to provide a technical basis for why canopy hoods cannot be designed to achieve 0 percent melt shop opacity.
Out of 31 EAF facilities in the EPA EAF dataset with opacity data, 13 facilities achieved 0.000 percent shop opacity. Two additional facilities achieved 0.00 percent shop opacity, and another 4 facilities achieved 0.0 percent, for a total of 19 facilities able to comply with a 0 percent shop standard. Out of the total 31 facilities in the EPA EAF data, only 1 facility had shop opacity greater than 1 percent as an average of all runs in the test, with the average of all 31 facilities at 0.14 percent opacity (a value that would round down to 0 percent under the NSPS). See the “Emissions Memorandum,” discussed earlier in this section, for more information about these data.
The addition of a canopy hood or alteration of existing hoods to achieve slightly better capture is within reach by a facility achieving less than 1 percent opacity but greater than 0 percent. The scenario of installation of a canopy hood in the melt shop is used in the cost analysis to represent one method that is lower in cost and can be used to achieve the standard of performance if an existing source that is not currently achieving 0 percent melt shop opacity were to modify or reconstruct and become an affected facility under 40 CFR 60, subpart AAb.
The commenter said for existing facilities that may trigger an NSPS modification in the future, achieving 0 percent shop opacity would require extensive re-engineering that would be costly and introduce practical and worker safety concerns as well. For example, one [trade] association member stated that 0 percent shop opacity could only be achieved, if at all, with near total enclosure of the EAF and doubling the flow rate of the emission control system. The commenter stated that only very short (and therefore marginally effective) partition walls could be installed above the crane because of the lack of space between the crane and the roof. They also noted that such short partitions deteriorated quickly due to the heat and other elements. Thus, to increase the size and collection efficiency to meet a 0 percent opacity requirement, the facility would have to raise the roof of the structure at an undetermined cost (a cost that likely would trigger a “major modification”), and potentially enclose the entire monovent, which would likely create worker safety and heat stress issues.
The commenter added, facilities would have to increase the number and volume of fans to the baghouse, as well as require new or additional fans in the shop and additional baghouses because the facility's current baghouses are operating at close to maximum capacity. Moreover, for servicing, cranes have to
In actuality, it is not likely that all current EAF facilities in the industry will need to comply with 40 CFR part 60, subpart AAb, which would only be applicable to new EAF facilities or, for existing facilities, if the result of any future modifications or reconstruction increased emissions and met the provisions in 40 CFR 60.14 for modifications and 40 CFR 60.15 for reconstruction, respectively.
We established in the proposal (87 FR 29717-29718) that the use of a canopy hood above the crane rails, while not required to achieve 0 percent melt shop opacity during melting and refining, is a cost-effective method that can be used to do so, with cost effectiveness estimated at $1,700 per ton PM removed in $2022 for a medium-sized facility, annual costs of the canopy, at $1.1 million per year, and with PM reduction of 684 tpy at a medium facility achieving 0 percent melt shop opacity during melting and refining and 6 percent during charging and tapping, as compared to 6 percent opacity at all times. Analyses performed for small and large EAF melt shops produced similar cost-effectiveness values, at $1,800 per ton PM removed and $1,700 per ton PM removed, respectively. The values of $1,800 per ton or less are considered cost effective and, therefore, the use of additional canopy hoods above the crane rails is considered BSER for melt shop opacity for new EAF/AOD using this approach. (See section III.A.1.a of this preamble).
The performance data obtained by the EPA for 31 facilities show that 13 facilities achieved 0 percent opacity during melting and refining and the other 17 achieved very low values of opacity so that the overall average melt shop opacity from all 31 facilities was 0.14 percent. Therefore, considering that the costs are achievable even without the addition of a canopy hood, we conclude the 0 percent opacity is the standard of performance that reflects the degree of emission limitation achievable with application of the BSER for melting and refining.
We also concluded that full enclosure is not needed to achieve 0 percent melt shop opacity during melting and refining. The EPA acknowledges that facilities need sufficient capture ventilation to collect melt shop PM emitted as fugitives, but this does not necessarily require a fully enclosed melt shop, as seen in the data from EAF facilities in 2010 test reports obtained by the EPA where 0 percent opacity was achieved.
Because we do not have sufficient data to show that 0 percent melt shop opacity is achievable during charging and tapping to refute industry's assertion that 0 percent melt shop opacity is not achievable during charging and tapping, nor are these data likely available anywhere else, the final rule retains the current 6 percent NSPS limit for charging and tapping in 40 CFR part 60, subparts AA, AAa, and adds to the final rule for 40 CFR part 60, subpart AAb a testing requirement during these periods along with the requirement to test during melting and refining that is already required for facilities in operation on or before May 16, 2022. Note that the test method protocol for measuring opacity during charging has been modified for the final rule, as discussed in section V.B.1 of this preamble.
There are no relevant energy impacts or nonair quality health and significant environmental impacts of the final BSER for melt shop opacity. These issues are discussed in detail in sections V.A and V.B of this preamble. No comments were received on these issues.
We proposed to retain the BSER determinations for proper operation of control devices and proper dust handling procedures from NSPS subpart AAa in NSPS subpart AAb as well as the limitations of 3 percent and 10 percent opacity limits from control devices and dust handling, respectively. No comments were received on this subject. Similarly, we are finalizing the requirement for opacity from control devices and dust handling in NSPS subpart AAb, as proposed.
Consistent with
Periods of startup, normal operations, and shutdown are all predictable and routine aspects of a source's operations. Malfunctions, in contrast, are neither predictable nor routine. Instead, they are, by definition, sudden, infrequent, and not reasonably preventable failures of emissions control, process, or monitoring equipment (40 CFR 60.2). The EPA interprets CAA section 111 as not requiring emissions that occur during periods of malfunction to be factored into development of CAA section 111 standards. Nothing in CAA section 111 or in case law requires that the EPA consider malfunctions when determining what standards of performance reflect the degree of emission limitation achievable through “the application of the best system of emission reduction” that the EPA determines is adequately demonstrated. While the EPA accounts for variability in setting emissions standards, nothing in CAA section 111 requires the Agency to consider malfunctions as part of that analysis. The EPA is not required to treat a malfunction in the same manner as the type of variation in performance that occurs during routine operations of a source. A malfunction is a failure of the source to perform in a “normal or usual manner” and no statutory language compels the EPA to consider such events in setting CAA section 111 standards of performance. The EPA's approach to malfunctions in the analogous circumstances (setting “achievable” standards under CAA section 112) has been upheld as reasonable by the D.C. Circuit in
Consistent with
While commenters argue that the EPA must provide work practice standards, the commenters have not provided information showing that compliance with the numerical emission limitations is not possible during startup and shutdown events and that, therefore, the EPA's determination to apply the PM and opacity standards at all times would be inappropriate. In addition to the standards applying at all times, sources will need to comply with the CAA section 111 general provisions, which include “general duty” requirements in 40 CFR 60.11(d) to operate “in a manner consistent with good air pollution control practice for minimizing emissions.” These provisions apply at all times, including during startup and shutdown, as well as during malfunctions.
From the EPA review of the current NSPS's testing and monitoring requirements in 40 CFR part 60, subpart AAa, we evaluated and determined the testing, monitoring, recordkeeping and reporting requirements needed to be clarified and revised” to ensure compliance with the emission standards, considering that the NSPS reflect BSER under conditions of proper operation and maintenance. Consequently, we proposed changes to testing and monitoring in 40 CFR part 60, subparts AA and AAa, and also incorporated some of these requirements along with additional requirements into new 40 CFR part 60, subpart AAb.
Specifically, we proposed amendments to clarify, correct, or refine the rule requirements to enhance compliance and enforcement with 40 CFR part 60, sections 60.271 and 60.271a “Definitions”, 60.272 and 60.272a “Standard for particulate matter”, 60.273 and 60.273a “Emission monitoring”, 60.274a “Monitoring of operations”, 60.275a “Test methods and procedures”, and 60.276a “Recordkeeping and reporting requirements.”
In addition, we proposed that sources complying with 40 CFR part 60, subpart AAb would be required to perform compliance testing every 5 years after the initial testing performed upon startup, as required under 40 CFR 60.8. This requirement for periodic testing already is required in many of the permits for existing EAF in both the EPA's EAF dataset and in the industry, and is a standard requirement for testing of other sources of PM emissions in many other industrial sectors.
We also solicited in the proposal for comments or data and other relevant information on whether the EPA should change the allotted time to both find and fix the cause of a BLDS alarm from 3 hours to a longer timeframe (
The commenter noted that there are situations in which more than 3 hours is needed to respond to a BLDS alarm and address its cause. Because many mills calibrate their BLDS to be very sensitive, the likelihood that a BLDS alarm will be falsely triggered is increased. The commenter included the following examples of situations in which false alarms can occur:
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The commenter pointed out that it is possible for a baghouse to operate within its emission and opacity limits even if the cause of a BLDS alarm is not identified and corrective measures taken. For example, if a broken bag in a compartment causes an alarm, the compartment can be isolated and shut down without affecting the rest of the baghouse. The commenter noted that determining the cause of the alarm often requires operators to undertake a multi-step troubleshooting process of elimination requiring multiple rounds of physical inspections and diagnostic efforts. This process of elimination often requires more than 3 hours to complete. The process can be very time-consuming, particularly when the BLDS alarm lasts only a short time. Identifying the cause of a brief BLDS alarm, the commenter said, can be very difficult and sometimes proves impossible. Some baghouses in the EAF industry have 25 or more compartments housing 5,000 or more individual bags. Some mills do not have BLDS with detection capability in each separate compartment because the baghouse design does not allow for such monitoring (
The commenter said that EAF mills can have difficulty responding to multiple, intermittent alarms of short duration. The commenter noted that EAF facilities record the alarm as resolved where investigation shows no evidence of a bag leak. While the facility may be able to respond to each separate alarm in under 3 hours, the commenter said they are aware of one instance in which an enforcement authority determined the company was in violation of the 3-hour response requirement because the total time the facility spent responding to each of the separate intermittent alarms exceeded 3 hours. The commenter said the enforcement authority misinterpreted the 3-hour response requirement. This example was provided to show how a 3-hour response requirement presents a compliance risk even when individual responses are completed within the 3-hour window. The commenter recommended the following additions be made to 40 CFR 60.273(f) in all three rules in regard to the leak monitors to clarify false alarm situations.
The commenter recommended adding to the requirements in 40 CFR 60.273(f)), 60.273a(f)), and 60.273b(f)) that begin with: “Establishing to the extent acceptable by the delegated authority that the alarm was a false alarm and not caused by a bag leak or other malfunction that could reasonably result in excess PM emissions,” the phrase “in which case alarms due to the monitor malfunctioning are not subject to the [24-hour] response action requirement, as long as the [leak] monitor malfunction is timely corrected.”
The commenter recommended adding to the requirements in 40 CFR 60.273(f)), 60.273a(f)), and 60.273b(f)) that begin with: “Shutting down the process producing the PM emissions,” the phrase “provided that shutting down the process unit is not required if an operator reasonably believes repetitive alarms are the result of a [leak] monitor malfunction, and the monitor malfunction is timely repaired.”
In regard to the specific language the commenter suggests including in the rules in 40 CFR 60.273(f)), 60.273a(f)), and 60.273b(f)), the list of potential response actions are not to be taken as exclusive,
• Installation of BLDS on all baghouses, including multi-stack baghouses;
• Monitoring and operational restriction for furnace static pressure monitoring based on 15-minute averages on all EAF;
• Monitoring and operational restriction for volumetric flow rate or static pressure at each separately-ducted hood, based on 15-minute averages on all EAF;
• Removal of the option for monitoring and operational restriction for fan amps;
• Adding inspections and maintenance requirements for holes or other openings in the melt shop building; and
• Mandate for shop opacity observations to be made during charging and tapping or during the period of the heat cycle that generates the greatest uncaptured emissions.
The commenter considered these new monitoring requirements to be unnecessary, expensive, and, in some cases, impractical. The commenter said the existing monitoring requirements in 40 CFR part 60, subparts AA and AAa
Similarly, the commenter urged the EPA to keep the current requirement in 40 CFR part 60, subparts AA, AAa for monitoring fan amperage in place, because they said this parameter directly correlates to the air flow to the control device, via the fan curve, unique to each site.
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In response to comments regarding proposed averaging periods of 15 minutes for furnace static pressure, the EPA has modified the averaging period language in the final rule for 40 CFR part 60, subparts AA, AAa, and AAb (40 CFR 60.274(f), 60.274a(f), and 60.274b(f)) to be “no greater than 15 minutes.” This modification allows greater flexibility for establishing monitoring setpoints to capture the variability during short periods that are much less than 15 minutes.
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The commenter also said the EPA does not have the authority to add new monitoring requirements for charging and tapping operations. The existing shop opacity monitoring in 40 CFR part 60, subpart AAa verifies efficiency of the DEC during normal operations. By expanding monitoring requirements to cover tapping and charging (a time period the furnace roof is rolled back, and the DEC control is not engaged), the EPA was creating new monitoring requirements designed to monitor a standard that was not included in the original rule. The proposed monitoring during charging and tapping cannot evaluate DEC capture efficiency, as the shop opacity observations were originally designed to do. Hence, the addition of the new monitoring, the commenter said, represents an unlawful revision to the existing NSPS standard.
The commenter was concerned the EPA was adding entirely new installation, monitoring, and maintenance requirement for charging and tapping furnace modes, including requirements for operators to install, calibrate, and maintain monitoring devices that continuously record the capture system damper position(s) and either the volumetric flow rate through each separately ducted hood or the rolling 15-minute average static pressure at each separately ducted hood. The commenter said these requirements are unnecessary and that they ignore the 1999 rulemaking that provided alternative monitoring methods. The commenter also argued the EPA failed to provide a reasonable explanation for these changes, had not explained why the additional monitoring is needed, had not explained the EPA's change in position from prior EAF steel NSPS rulemakings, and had neglected to account for any costs associated with the monitoring requirements.
We learned through public comments that some of the monitoring changes would require significant capital investment through equipment purchases; therefore, the changes requiring purchases of equipment are not included in the final rule for 40 CFR part 60, subparts AA and AAa. The requirements that we are finalizing do not make the standards more stringent; therefore, these changes do not implicate the commenter's concern that we have improperly revised the NSPS applicable to existing sources. For these other monitoring changes that are included in the final rule, either as proposed or with modification of proposed requirement, the compliance date is 180 days from the effective date of the final rule amendments for facilities complying with 40 CFR part 60, subparts AA and AAa, which is the same as the requirement for electronic reporting. This time period is to allow facilities to prepare for any changes to reporting and recordkeeping.
The 4 proposed monitoring requirements that are not included in the final rule are for BLDS for multi-stack baghouses for 40 CFR part 60, subparts AA, AAa, and AAb; melt shop opacity for 40 CFR part 60, subpart AA only; furnace static pressure monitoring and operation for 40 CFR part 60, subparts AA, AAa, and AAb; and volumetric flow and static pressure monitoring and operation for 40 CFR part 60, subparts AA, AAa, and AAb. The 2 proposed monitoring requirements that have been retained in the final rule, as proposed, are melt shop inspection (for 40 CFR part 60, subparts AA, AAa, and AAb) and melt shop opacity (for 40 CFR part 60, subparts AAa and AAb). The 2 proposed monitoring requirements that have been retained with modification are for damper position and for fan amperage (for 40 CFR part 60, subparts AA, AAa, and AAb), where we are finalizing the requirement for facilities to record damper positions and fan amperage in a manner and frequency consistent with records made during the initial or most recent performance test demonstrating compliance with applicable PM standards. For additional explanation and rationale behind the 7 proposed requirements and their disposition in the final rule, refer to the discussions in this preamble under the following section headings (listed alphabetically): BLDS Response; Damper Position Response; Fan Amperage Response; Furnace Static Pressure Response; Melt Shop Inspection Response; Melt Shop Opacity Response; and Volumetric Flow and Static Pressure Response.
The commenter opposed the following proposed new monitoring requirements for 40 CFR part 60 subpart AAb:
• Installation of bag leak detection monitoring systems on all baghouses, including multi-stack baghouses;
• Monitoring and operational restriction for furnace static pressure
• Monitoring and operational restriction for volumetric flow rate or static pressure at each separately-ducted hood, based on 15-minute averages on all EAF;
• Removal of the option for monitoring and operational restriction for fan amps;
• Adding inspections and maintenance requirements for holes or other openings in the melt shop building; and
• Mandate for shop opacity observations to be made during charging and tapping or during the period of the heat cycle that generates the greatest uncaptured emissions.
The commenter considered these new monitoring requirements to be unnecessary, expensive, and, some cases, impractical. The commenter said the existing monitoring requirements (in 40 CFR part 60, subparts AA and AAa) are adequate for demonstrating compliance with the standards. The commenter stated that the existing fan amperage and damper position monitoring have worked efficiently and effectively for many years and the proposed new monitoring would be less effective and would impose extreme technical and engineering complications on EAF plants. Similarly, a commenter urged the EPA to keep the current requirement for monitoring fan amperage in place, because they said this parameter directly correlates to the air flow to the control device, via the fan curve, which is unique to each site.
A commenter stated the EPA should clarify how the proposed new monitoring requirements improve compliance demonstration. The commenter said it was unclear how the additional monitoring requirements in the proposed [40 CFR part 60,subpart AAb] rule will improve data or accuracy in demonstrating compliance with applicable requirements. The proposed NSPS 40 CFR part 60, subpart AAb requires monitoring of parameters that are not required to be monitored under the existing NSPS 40 CFR part 60, subparts AA and AAa standards. The commenter recommended the EPA explain the benefits of new monitoring techniques and additional monitoring parameters. The monitoring requirements should provide enough data to accurately demonstrate compliance with applicable requirements. The commenter added that the EPA must consider the cost to air agencies and facilities and associated benefits to compliance before requiring additional monitoring. Additional monitoring with no clear benefit is burdensome for both regulated facilities and delegated authorities due to additional equipment, maintenance, and operator costs.
The comment concerning a proposed requirement in 40 CFR part 60, subpart AAb for shop opacity observations to be made during charging and tapping or during the period of the heat cycle that generates the greatest uncaptured emissions is no longer relevant due to changes made to the proposed 40 CFR part 60, subpart AAb for the final rule, to allow 6 percent opacity during charging and tapping and to require testing during all phases of operation,
A commenter recommended the EPA better define a “material impact” on the capture system because they said the phrase was too vague. Any airflow changes, they said, may theoretically impact capture efficiency to some extent, but fluctuations that do not affect the compliance of the facility with the substantive emission and opacity standards should not be prohibited. The EPA should define material impacts in terms of opacity limits by revising 40 CFR part 60, subparts AA, AAa, and AAb to only require repairs to openings that lead to noncompliance with the opacity standards.
In addition, for 40 CFR part 60, subpart AAb, we proposed the requirement for monthly inspections to include the language to address issues that are “determined by the operator to materially impact the efficacy of the capture system” in 40 CFR 60.274b(d). This allows for a determination by the operator as to whether an identified issue is to be considered a true deficiency that is expected to impact capture system performance, as opposed to the language in 40 CFR part 60, subpart AAa that requires maintenance for “any deficiency.” Therefore, we agree with this aspect of the comment and are including the proposed rule language for monthly inspections that allow for operator discretion as to what issues “materially impact” the capture system performance in the final rule for 40 CFR part 60, subpart AAb (40 CFR 60.274b(d)).
The commenter noted that this approach is consistent with prior NSPS rulemakings, including 40 CFR part 60, subpart KK (Lead-Acid Battery Manufacturing) and 40 CFR part 60, subpart NN (Phosphate Rock Plants). However, the commenter said the EPA specified in 40 CFR part 60, subparts KK and NN that compliance with the opacity standard is determined by taking the average opacity over a 6-minute period, according to EPA Method 9, and rounding the average to the nearest whole percentage (45 FR 2790 and 2794; January 14, 1980 and 47 FR 16564, 16566, 16582, and 16586; April 16, 1982). The commenter recommended the EPA add the same explanation provided in these earlier NSPS in the final shop opacity limit.
We are finalizing the proposed requirement in 40 CFR part 60, subparts AA, AAa, and AAb that the melt shop be inspected for holes or other openings that would allow PM to escape because it clarifies the building inspection requirement already in the current NSPS. We are also incorporating into the final rules for 40 CFR part 60, subparts AA, AAa, and AAb the allowance of up to 24 hours to find and fix baghouse leaks following a BLDS alarm event because it is commensurate with many other EPA rules and no evidence exists for the specific need for limiting the tie period to 3 hours for EAF. The reasons that more than 3 hours and up to 24 hours is needed to respond to BLDS alarms provided by the commenter are valid. We are finalizing that sources complying with 40 CFR part 60, subpart AAb will be required to perform compliance testing every 5 years after the initial testing performed upon startup, as required under 40 CFR part 60.8. This requirement is already required in many of the permits for existing EAF in the EAF dataset and in the industry, and is a standard requirement for testing for other sources of PM emissions for many other industrial sectors.
We learned through public comments that some of the proposed monitoring changes, BLDS monitoring, furnace static pressure monitoring and operation, and volumetric flow and static pressure monitoring and operation, would require significant capital investment through equipment purchases. Therefore, these changes requiring purchases of equipment are not being finalized for 40 CFR part 60, subparts AA, AAa, and AAb.
We are finalizing 2 proposed monitoring requirements for 40 CFR part 60, subparts AA, AAa, and AAb, which are the requirements for melt shop inspection and stipulation that the melt shop opacity limits apply at all times during the designated periods of applicability under the rules. We are also finalizing the proposed damper position and fan amperage monitoring requirements with modifications. Other miscellaneous monitoring requirements also are being finalized with modifications resulting from comments on the proposed requirements, as described in in this section.
All testing and monitoring requirements proposed and finalized in this action were evaluated to ensure compliance with the NSPS emission standards under conditions of proper operation and maintenance. However, because we learned through comments that some of the proposed changes to monitoring in the existing NSPS rules would incur unintended costs, these requirements were either not finalized in their entirety or were finalized with modifications.
The EPA is finalizing the proposed requirement that owners and operators of EAF and AOD subject to the current and new NSPS at 40 CFR part 60, subparts AA, AAa, and AAb submit electronic copies of required performance test reports and any semiannual excess emissions and continuous monitoring system performance and summary reports, through the EPA's CDX using the CEDRI. A description of the electronic data submission process is provided in the memorandum
For semiannual reports, the finalized rule requires that owners and operators use the appropriate spreadsheet template to submit information to CEDRI. The final versions of the templates for these reports are included in the docket for this action.
Additionally, the EPA has identified 2 broad circumstances in which electronic reporting extensions may be provided. These circumstances are: (1) Outages of the EPA's CDX or CEDRI which preclude an owner and operator from accessing the system and submitting required reports; and (2)
The electronic submittal of the reports addressed in this final rulemaking increase the usefulness of the data
No comments were received on electronic reporting. Therefore, we are finalizing the requirements for electronic reporting as proposed.
Pursuant to CAA section 111(b)(1)(B), affected sources that commence construction, reconstruction, or modification after May 16, 2022, must comply with all requirements of 40 CFR part 60, subpart AAb, no later than August 25, 2023 or upon startup, whichever is later.
The date for complying with the ERT submission requirements is February 21, 2024. The date for complying with the changes in the current rules, 40 CFR part 60, subparts AA and AAa is February 21, 2024 publication of the final rule.
For 40 CFR part 60, subpart AAb, reductions in PM and PM
Based on the actual emissions emitted by 31 facilities in the EAF dataset, where the actual average opacity was 0.14 percent, the emissions impact for PM from 9 new, modified, or reconstructed EAF facilities projected in the next 10 years (estimated to reflect 3 small, 4 medium, and 2 large) is estimated to be an emissions reduction of 134 tons PM that would otherwise be emitted in 2032. Using an estimate of 0.218
No actual PM emission reductions are estimated for the new PM limit for facility-wide total baghouse emissions in lb/ton. The EPA did not estimate PM emission reductions from new, modified, and reconstructed sources under the facility-wide total baghouse limit because based the 2010 EAF dataset, all facilities in the dataset are already achieving an emission level comparable to the limit being finalized in this action.
A secondary impact as a result of this rule is that solid wastes may increase slightly, with an estimated 15 tons per facility per year based on 2010 EAF performance, with the potential additional waste from PM collected to meet the 0 percent melting and refining opacity limit under NSPS subpart AAb. The small increase in solid wastes would be the same for both the carbon and specialty steel shops. However, most PM collected from EAF is recycled to reclaim zinc, which also defrays some of the disposal costs.
Additionally, a relatively small increase in energy may result from the use of electricity to power fans that draw EAF and AOD exhaust air into the canopy hood that captures the PM and sends PM-laden air to the baghouse, at 66, 940, 4,700 MW-hr per year for small, medium, and large facilities, respectively. However, if the A/C ratio of the fabric filters is lowered to meet the facility baghouse standard due to an increase in number of bags, some decrease in energy use may occur.
Finally, there will be no water or noise impacts with the promulgated NSPS subpart AAb.
Costs were estimated for regular testing every 5 years for 9 new facilities projected in the 10 years after May 16, 2022. The estimated annual testing costs for each facility are $10,625 per year ($2022) for conducting EPA Method 5 for PM emissions at each baghouse's exhaust over a 5-year period, using an estimate of 1.64 baghouses per facility based on the EAF data. While new, modified, or reconstructed sources that start up after May 16, 2022, are subject to testing every 5 years under the finalized NSPS subpart AAb, EPA Method 5 testing is required upon initial startup under 40 CFR 60.8. Therefore, in the first 5 years after startup, there will be no testing costs as a result of the finalized rule. Then, in the sixth through the tenth year after initial startup after May16, 2022, the estimated new, modified, or reconstructed sources will incur costs of approximately $9,562 per year ($2022) per facility for testing, based on an estimate of 0.9 new, modified, or reconstructed facilities per year (0.9 × $10,625). Due to the estimated staggered startup of these new, modified, or reconstructed facilities, with 0.9 new, modified, or reconstructed facilities starting each year after the proposal (May 16, 2022), the total costs for testing for all new, modified, or reconstructed facilities under this rule after the initial testing required under 40 CFR part 60.8 will range from approximately $523,000 ($2022) in the sixth year after May 16, 2022 (corresponding to 5.4 new facilities), to a total of approximately $900,000 in the tenth year after May 16, 2022 (reflecting costs for 9 facilities, with testing costs of approximately
Based on information from 2010 through 2017 obtained by the EPA for 31 EAF facilities, the EPA found the average opacity to be 0.14 percent, with about half of the units achieving 0 percent opacity in the tests. Because opacity in the baseline is already low, the EPA expects any new, modified, or reconstructed facility would be able to meet the promulgated opacity and PM limits without any additional control devices beyond those already required by the NSR program, applicable state requirements or by minor process changes to improve capture of exhaust flows or other process parameters, if needed. While the actual cost impacts of the promulgated 0 percent opacity for melting and refining and 6 percent opacity for charging and tapping would likely be substantially lower, the EPA developed an upper bound estimate of potential compliance costs based upon the assumption that affected units would install a partial roof canopy above the crane rails to ensure 0 percent opacity during melting and refining and 6 percent opacity during charging and tapping compared to a hypothetical baseline model facility meeting 6 percent opacity at all times. These costs to achieve the opacity requirements are estimated to be $86,000, $1,140,000, $5,700,000 ($2022) per year per facility for small, medium, and large model facilities, respectively.
Total annual costs for NSPS subpart AAb, based on nine new, modified, or reconstructed facilities in the first 10 years after May 16, 2022, are $560,000 per year ($2022) for 3 small facilities, $4.9M per year for 4 medium facilities, and $11.5M per year for 2 large facilities, for a total of $17M per year ($2022) for 9 new facilities in the tenth year after May 16, 2022, using the same staggered startup rate described for testing costs. Details of the cost estimates for the final rule can be found in the “Cost Memorandum” discussed in section IV.A.2 (with proposal costs updated to 2022
For the promulgated mass-based PM standard in lb/ton for facility-wide total baghouse PM emissions, we estimated the capital and annual costs between a baseline scenario based on the current NSPS individual baghouse concentration limit (in gr/dscf) in 40 CFR part 60, subparts AA and AAa and a scenario based on a lower total facility-wide baghouse PM emissions in a mass-based limit (in lb/ton), which is the format for the standard of performance we are promulgating. Because data from the 31 existing EAF facilities in the 2010 dataset used by the EPA to develop the facility-wide PM limit show these facilities could already meet the 0.16 lb/ton total facility baghouse PM limit, we expect the promulgated mass-based standard applied to future new, modified, and reconstructed EAF facilities would be feasible and pose minimal cost impacts, if any.
Additional cost analysis, including calculation of costs using the upper bound cost estimates for the installation of partial roof canopies, can be found in the Economic Impact Analysis (EIA) associated with this final rule, which is available in the docket for this rule. The EIA additionally presents costs in terms of the present value and equivalent annual value of projected compliance costs over the 2023 to 2032 period discounted at 3 and 7 percent.
Economic impact analyses focus on changes in market prices and output levels. If changes in market prices and output levels in the primary markets are significant enough, impacts on other markets may also be examined. Both the magnitude of costs associated with the promulgated requirements and the distribution of these costs among affected facilities can have a role in determining how the market will change in response to a regulatory requirement. As discussed in section IV.B. of this preamble, the cost analysis incorporates the assumption that units affected by the new NSPS subpart AAb would install a partial roof canopy above the crane rails to ensure 0 percent melt shop opacity compared to a hypothetical baseline model facility meeting 6 percent opacity. The costs should be viewed as upper bound estimates on the potential compliance costs as the EPA expects any new, modified or reconstructed facility would be able to meet the promulgated opacity and PM limits without any additional control devices beyond those already required by the NSR program, applicable state requirements, or by minor process changes to improve capture of exhaust flows or other process parameters, if needed. As discussed in the EIA, even under the upper bound cost assumptions described, the EPA expects the potential economic impacts of this final rule will be small.
As required by the Regulatory Flexibility Act (RFA), we performed an analysis to determine if any small entities might be disproportionately impacted by the promulgated requirements. The EPA does not know what firms will construct new facilities in the future and, as a result, cannot perform a cost-to-sales analysis with the same confidence as we do with firms owning existing facilities. However, based on an assessment of the new units built during the 2011 to 2020 period and the units that have been announced, which are all owned by firms that are not considered to be small businesses, the EPA does not believe it is likely that any future facilities will be built by a small business. See the EIA in the docket for this action for additional information on the analysis presented in this section.
The new requirements being finalized in 40 CFR subpart AAb are expected to reduce PM emissions, including PM
In the ISA, it was found that acute exposure to PM
The benefits per ton (BPT) of the PM
Executive
The Agency has conducted an analysis of the demographics of the populations living near existing facilities in the EAF population in the U.S. Because this action finalizes standards of performance for new, modified, and reconstructed EAF sources that commence construction after May 16, 2022, the locations of the construction of new EAF facilities are not known. In addition, it is not known which of the existing facilities will be modified or reconstructed in the future. Therefore, the demographic analysis was conducted for the 88 existing EAF facilities as a characterization of the demographics in areas where these facilities are now located.
The full results of the demographic analysis can be found in section E, “
The methodology and the results of the demographic analysis for the final rule are presented in a technical report,
The EPA expects that the Standards of Performance for Steel Plants: Electric Arc Furnaces and Argon-Oxygen Decarburization Vessels Constructed after May 16, 2022, will ensure compliance via frequent testing and reduce emissions via a lower opacity limit for melt shops and with the standards at all times (including periods of SSM). The rule will also increase data transparency through electronic reporting. Therefore, effects of emissions on populations in proximity to any future affected sources, including in communities potentially overburdened by pollution, which are often people of color, and low-income and Indigenous communities will be reduced due to compliance with the standards of performance being finalized in this action.
Additional information about these statutes and Executive Orders can be found at
This action is not a significant regulatory action as defined in Executive Order 12866, as amended by Executive Order 14094, and was, therefore, not subject to a requirement for Executive Order 12866 review.
The information collection activities in this final rule have been submitted for approval to OMB under the PRA. The information collection request (ICR) document that the EPA prepared has been assigned the EPA ICR number 1060.21. You can find a copy of the ICR in the docket for this rule, and it is briefly summarized here. The information collection requirements are not enforceable until OMB approves them.
These amendments to 40 CFR part 60, subparts AA and AAa to require electronic reporting, and implement editorial and clarifying changes to rule language are estimated to reduce time spent and paperwork for rule. We are promulgating a new subpart for new, modified, or reconstructed facilities that start up after May 16, 2022, under 40 CFR part 60, subpart AAb with similar reporting, recordkeeping, and compliance requirements as 40 CFR part 60, subparts AA and AAa.
An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9. When OMB approves this ICR, the Agency will announce that approval in the
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on the three identified small entities among the approximately 90 EAF facilities (36 companies), because most facilities are likely to be performing regular compliance tests as part of their permit renewal process. Additionally, no facilities are expected to be built by small entities over the next 10 years based on past industry growth and small business starts. The 3 current facilities owned by small businesses were started in 1912, 1968, and 1994, respectively. Further discussion is included in the EIA for this final rule.
This action does not contain an unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. While this action creates an enforceable duty on the private sector, the cost does not exceed $100 million or more.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This action does not have Tribal implications as specified in Executive Order 13175. This rule will implement improvements in air quality due to new EAF in all locations of new EAF facilities, including any new EAF which are in proximity to Tribal grounds. It would not have substantial direct effects on Tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. No Tribal governments own facilities that are the subject of this rulemaking. Thus, Executive Order 13175 does not apply to this action.
Consistent with the EPA Policy on Consultation and Coordination with Indian Tribes, the EPA consulted with Tribal officials during the development of this action. A copy of the memorandum dated May 17, 2022, sent to Tribal leaders concerning the EAF NSPS is provided in the docket to this rule.
Executive Order 13045 (62 FR 19885; April 23, 1997) directs Federal agencies to include an evaluation of the health and safety effects of the planned regulation on children in Federal health and safety standards and explain why the regulation is preferable to potentially effective and reasonably feasible alternatives. This action is not subject to Executive Order 13045 because it is not economically
This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
This action involves technical standards. Therefore, the EPA conducted searches for the EAF NSPS through the Enhanced National Standards Systems Network Database managed by the American National Standards Institute (ANSI). We also contacted voluntary consensus standards (VCS) organizations and accessed and searched their databases. We conducted searches for EPA Methods 1, 2, 3, 3A, 3B, 4, 5, 5D, and 22 of 40 CFR part 60, appendix A. During the EPA's VCS search, if the title or abstract (if provided) of the VCS described technical sampling and analytical procedures that are similar to the EPA's reference method, the EPA reviewed it as a potential equivalent method. We reviewed all potential standards to determine the practicality of the VCS for this rule. This review requires significant method validation data that meet the requirements of EPA Method 301 for accepting alternative methods or scientific, engineering and policy equivalence to procedures in the EPA reference methods. The EPA may reconsider determinations of impracticality when additional information is available for a particular VCS. No applicable VCS were identified for EPA Methods 5D and 22.
The EPA is incorporating by reference the VCS ANSI/ASME PTC 19.10-1981, “Flue and Exhaust Gas Analyses,” to provide that the manual procedures (but not instrumental procedures) of VCS ANSI/ASME PTC 19.10-1981—Part 10 may be used as an alternative to EPA Method 3B. The manual procedures (but not instrumental procedures) of VCS ANSI/ASME PTC 19.10-1981—Part 10 may be used as an alternative to EPA Method 3B for measuring the oxygen or carbon dioxide content of the exhaust gas. This standard is acceptable as an alternative to EPA Method 3B and is available from ASME at
In the final rule, the EPA is incorporating by reference the VCS ASTM D7520-16, Standard Test Method for Determining the Opacity of a Plume in the Outdoor Ambient Atmosphere, which is an instrumental method to determine plume opacity in the outdoor ambient environment as an alternative to visual measurements made by certified smoke readers in accordance with EPA Method 9. The concept of ASTM D7520-16, also known as the Digital Camera Opacity Technique or DCOT, is a test protocol to determine the opacity of visible emissions using a digital camera. It was based on previous method development using digital still cameras and field testing of those methods. The purpose of ASTM D7520-16 is to set a minimum level of performance for products that use DCOT to determine plume opacity in ambient environments. The DCOT method is an acceptable alternative to EPA Method 9 with the following caveats:
• During the DCOT certification procedure outlined in Section 9.2 of ASTM D7520-16, the facility or the DCOT vendor must present the plumes in front of various backgrounds of color and contrast representing conditions anticipated during field use such as blue sky, trees, and mixed backgrounds (clouds or a sparse tree stand).
• The facility must also have standard operating procedures in place including daily or other frequency quality checks to ensure the equipment is within manufacturing specifications as outlined in Section 8.1 of ASTM D7520-16.
• The facility must follow the recordkeeping procedures outlined in 40 CFR 63.10(b)(1) for the DCOT certification, compliance report, data sheets, and all raw unaltered JPEGs used for opacity and certification determination.
• The facility or the DCOT vendor must have a minimum of 4 independent technology users apply the software to determine the visible opacity of the 300 certification plumes. For each set of 25 plumes, the user may not exceed 15 percent opacity of any one anyone reading, and the average error must not exceed 7.5 percent opacity.
• This approval does not provide or imply a certification or validation of any vendor's hardware or software. The onus to maintain and verify the certification or training of the DCOT camera, software, and operator in accordance with ASTM D7520-16 is on the facility, DCOT operator, and DCOT vendor. This method describes procedures to determine the opacity of a plume, using digital imagery and associated hardware and software, where opacity is caused by PM emitted from a stationary point source in the outdoor ambient environment. The opacity of emissions is determined by the application of a DCOT that consists of a digital still camera, analysis software, and the output function's content to obtain and interpret digital images to determine and report plume opacity. The ASTM D7520-16 document is available from ASTM at
The EPA is finalizing the use of the guidance document,
Additional information for the VCS search and determinations can be found in the three memoranda titled
Executive Order 12898 (59 FR 7629; February 16, 1994) directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations (people of color and/or Indigenous peoples) and low-income populations.
The EPA believes that the human health and environmental conditions that exist prior to this action do not result in disproportionate and adverse effects on people of color, low-income populations, and/or indigenous peoples if a modified or reconstructed EAF facility becomes subject to the final rule for 40 CFR part 60, subpart AAb, considering the demographics analysis for the existing EAF facilities described in section V.F of this preamble. However, it is unknown where new EAF facilities will be located so it is not possible to predict the impacts of these facilities on people of color, low-income populations, and/or indigenous peoples.
The EPA believes that this action is not likely to result in new disproportionate and adverse effects on people of color, low-income populations and/or indigenous peoples. The impacts of these final rules are beneficial to all demographic groups, and include requirements to clarify current rules in 40 CFR part 60, subparts AA, AAa and, for new sources built after publication of this final rule (in 40 CFR part 60, subpart AAb), to ensure compliance via frequent testing, to meet a lower opacity limit for melt shops during melting and refining, to meet a baghouse emissions limit as a facility-wide total in lb/ton, and to meet all the promulgated standards at all times, including periods of SSM.
The information supporting this Executive Order review is contained in section V.F of this preamble and in a technical report,
This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).
Environmental protection, Administrative practice and procedures, Air pollution control, Incorporation by reference, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the EPA amends 40 CFR part 60 as follows:
42 U.S.C. 7401
(g) * * *
(14) ASME/ANSI PTC 19.10-1981, Flue and Exhaust Gas Analyses [Part 10, Instruments and Apparatus], (Issued August 31, 1981), IBR approved for §§ 60.56c(b); 60.63(f); 60.106(e); 60.104a(d), (h), (i), and (j); 60.105a(b), (d), (f), and (g); 60.106a(a); 60.107a(a), (c), and (d); 60.275(e); 60.275a(e); 60.275b(e); tables 1 and 3 to subpart EEEE; tables 2 and 4 to subpart FFFF; table 2 to subpart JJJJ; §§ 60.285a(f); 60.396(a); 60.2145(s) and (t); 60.2710(s) and (t); 60.2730(q); 60.4415(a); 60.4900(b); 60.5220(b); tables 1 and 2 to subpart LLLL; tables 2 and 3 to subpart MMMM; §§ 60.5406(c); 60.5406a(c); 60.5407a(g); 60.5413(b); 60.5413a(b); and (d).
(h) * * *
(206) ASTM D7520-16, Standard Test Method for Determining the Opacity of a Plume in the Outdoor Ambient Atmosphere, approved April 1, 2016; IBR approved for §§ 60.271(k); 60.272(a) and (b); 60.273(c) and (d); 60.274(h); 60.275(e); 60.276(c); 60.271a; 60.272a(a) and (b); 60.273a(c) and (d); 60.274a(h); 60.275a(e); 60.276a(f); 60.271b; 60.272b(a) and (b); 60.273b(c) and (d); 60.274b(h); 60.275b(e); 60.276b(f); 60.374a(d).
(j) * * *
(2) EPA-454/R-98-015, Office of Air Quality Planning and Standards (OAQPS), Fabric Filter Bag Leak Detection Guidance, September 1997,
(b) The provisions of this subpart apply to each affected facility identified in paragraph (a) of this section that commenced construction, modification, or reconstruction after October 21, 1974, and on or before August 17, 1983, where a modification is any physical change in, or change in the method of operation of, an existing facility which increases the amount of any air pollutant (to which this standard applies) emitted into the atmosphere by that facility or which results in the emission of any air pollutant (to which this standard applies) into the atmosphere not previously emitted.
The revisions and additions read as follows:
(a)
(d)
(e)
(f)
(i)
(j)
(k)
(2) The owner or operator must also have standard operating procedures in place including daily or other frequency quality checks to ensure the equipment is within manufacturing specifications as outlined in Section 8.1 of ASTM D7520-16 (incorporated by reference, see § 60.17);
(3) The owner or operator must follow the recordkeeping procedures outlined in § 60.7(f) for the DCOT certification, compliance report, data sheets, and all raw unaltered JPEGs used for opacity and certification determination;
(4) The owner or operator or the DCOT vendor must have a minimum of four independent technology users apply the software to determine the visible opacity of the 300 certification plumes. For each set of 25 plumes, the user may not exceed 15 percent opacity of anyone reading and the average error must not exceed 7.5 percent opacity;
(5) Use of this approved alternative does not provide or imply a certification or validation of any vendor's hardware or software. The onus to maintain and verify the certification and/or training of the DCOT camera, software, and operator in accordance with ASTM D7520-16 (incorporated by reference, see § 60.17) and these requirements is on the facility, DCOT operator, and DCOT vendor.
(m)
(n)
(p)
(q)
(r)
(a) * * *
(2) Exit from a control device and exhibit three percent opacity or greater, as measured in accordance with EPA Method 9 of appendix A of this part, or, as an alternative, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(3) Exit from a shop and, due solely to operations of any EAF(s), exhibit 6 percent opacity or greater, as measured in accordance with EPA Method 9 of appendix A of this part, or, as an alternative, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(b) On and after the date on which the performance test required to be conducted by § 60.8 is completed, no owner or operator subject to the provisions of this subpart shall cause to be discharged into the atmosphere from dust-handling equipment any gases which exhibit 10 percent opacity or greater, as measured in accordance with EPA Method 9 of appendix A of this part, or, as an alternative, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
The revisions and addition read as follows:
(c) A continuous monitoring system for the measurement of the opacity of emissions discharged into the atmosphere from the control device(s) is not required on any modular, multi-stack, negative-pressure or positive-
(d) A furnace static pressure monitoring device is not required on any EAF equipped with a DEC system if observations of shop opacity are performed by a certified visible emission observer as follows:
(1) At least once per day when the furnace is operating.
(2) No less than once per week, commencing from the tap of one EAF heat cycle to the tap of the following heat cycle. A melt shop with more than one EAF shall conduct these readings while both EAFs are in operation. Both EAFs are not required to be on the same schedule for tapping.
(3) Shop opacity shall be determined as the arithmetic average of 24 or more consecutive 15-second opacity observations of emissions from the shop taken in accordance with EPA Method 9, or, as an alternative, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(e) A bag leak detection system must be installed on all single-stack fabric filters and operated whenever the control device is being used to remove particulate matter from the EAF if the owner or operator elects not to install and operate a continuous opacity monitoring system as provided for under paragraph (c) of this section. In addition, the owner or operator shall meet the visible emissions observation requirements in paragraph (c) of this section. The bag leak detection system must meet the specifications and requirements of paragraphs (e)(1) through (8) of this section.
(3) The bag leak detection system must be equipped with an alarm system that will activate when an increase in relative particulate loading is detected over the alarm set point established according to paragraph (e)(4) of this section, and the alarm must be located such that it can be identified by the appropriate plant personnel.
(6) * * *
(ii) If opacities greater than zero percent are observed over four consecutive 15-second observations during the daily opacity observations required under paragraph (c) of this section and the alarm on the bag leak detection system alarm is not activated, the owner or operator shall lower the alarm set point on the bag leak detection system to a point where the alarm would have been activated during the period when the opacity observations were made.
(7) For negative pressure, induced air baghouses, and positive pressure baghouses that are discharged to the atmosphere through a stack, the bag leak detection sensor must be installed downstream of the baghouse or upstream of any wet scrubber.
(f) For each bag leak detection system installed according to paragraph (e) of this section, the owner or operator shall initiate procedures to determine the cause of all alarms within 1 hour of an alarm. The cause of the alarm must be alleviated within 24 hours of the time the alarm occurred by taking whatever response action(s) are necessary. Response actions may include, but are not limited to the following:
(1) Inspecting the baghouse for air leaks, torn or broken bags or filter media, or any other condition that may have caused an increase in particulate emissions;
(5) Cleaning the bag leak detection system probe or otherwise repairing the bag leak detection system;
(6) Establishing to the extent acceptable by the delegated authority that the alarm was a false alarm and not caused by a bag leak or other malfunction that could reasonably result in excess particulate emissions; or
(g) In approving the site-specific monitoring plan required in paragraph (e)(4) of this section, the Administrator or delegated authority may allow owners or operators more than 24 hours to alleviate specific conditions that cause an alarm if the owner or operator identifies the condition that could lead to an alarm in the monitoring plan, adequately explains why it is not feasible to alleviate the condition within 24 hours of the time the alarm occurred, and demonstrates that the requested additional time will ensure alleviation of the condition as expeditiously as practicable.
(b) Except as provided under paragraph (d) of this section, the owner or operator subject to the provisions of this subpart shall:
(1) Monitor and record on a continuous basis the rolling 15-minute average furnace static pressure (if a DEC system is in use, and a furnace static pressure gauge is installed according to paragraph (f) of this section) and either:
(i) Install, calibrate, and maintain a monitoring device that continuously records the capture system fan motor amperes and damper position(s);
(ii) Install, calibrate, and maintain a monitoring device that continuously records on a rolling 15-minute average basis either the volumetric flow rate through each separately ducted hood; or
(iii) Install, calibrate, and maintain a monitoring device that continuously records the volumetric flow rate at the control device inlet and continuously record damper position(s).
(2) The volumetric flow monitoring device(s) may be installed in any appropriate location in the capture system such that reproducible flow rate monitoring will result. The flow rate monitoring device(s) shall have an
(3) Parameters monitored pursuant to this paragraph, excluding damper position, shall be recorded on a rolling averaging period not to exceed 15 minutes.
(c) When the owner or operator of an affected facility is required to demonstrate compliance with the standards under § 60.272(a)(3) and at any other time that the Administrator may require (under section 114 of the CAA, as amended), the owner or operator shall determine during periods in which a hood is operated for the purpose of capturing emissions from the affected facility subject to paragraph (b) of this section, either:
(1) Monitor and record the fan motor amperes at each damper position, and damper position consistent with paragraph (i)(5) of this section;
(2) install, calibrate, and maintain a monitoring device that continuously records the volumetric flow rate through each separately ducted hood; or
(3) install, calibrate, and maintain a monitoring device that continuously records the volumetric flow rate at the control device inlet and monitor and record the damper position consistent with paragraph (i)(5) of this section.
(4) Parameters monitored pursuant to this paragraph, excluding damper position, shall be recorded on a rolling averaging period not to exceed 15 minutes.
(5) The owner or operator may petition the Administrator or delegated authority for reestablishment of these parameters whenever the owner or operator can demonstrate to the Administrator's or delegated authority's satisfaction that the EAF operating conditions upon which the parameters were previously established are no longer applicable. The values of the parameters as determined during the most recent demonstration of compliance shall be the appropriate operational range or control set point throughout each applicable period. Operation at values beyond the accepted operational range or control set point may be subject to the requirements of § 60.276(a).
(d) The owner or operator may petition the Administrator or delegated authority to approve any alternative method that will provide a continuous record of operation of each emission capture system.
(e) The owner or operator shall perform monthly operational status inspections of the equipment that is important to the performance of the total capture system (
(f) Except as provided for under § 60.273(d), where emissions during any phase of the heat time are controlled by use of a direct shell evacuation system, the owner or operator shall install, calibrate, and maintain a monitoring device that continuously records the pressure in the free space inside the EAF. The pressure shall be recorded as no greater than 15-minute integrated block averages. The monitoring device may be installed in any appropriate location in the EAF or DEC duct prior to the introduction of ambient air such that reproducible results will be obtained. The pressure monitoring device shall have an accuracy of ±5 mm of water gauge over its normal operating range and shall be calibrated according to the manufacturer's instructions.
(g) Except as provided for under § 60.273(d), when the owner or operator of an EAF is required to demonstrate compliance with the standard under § 60.272(a)(3) and at any other time the Administrator may require (under section 114 of the Act, as amended), the pressure in the free space inside the furnace shall be determined during the melting and refining period(s) using the monitoring device under paragraph (f) of this section. The owner or operator may petition the Administrator or delegated authority for reestablishment of the 15-minute integrated average pressure whenever the owner or operator can demonstrate to the Administrator's or delegated authority's satisfaction that the EAF operating conditions upon which the pressures were previously established are no longer applicable. The pressure range or control setting during the most recent demonstration of compliance shall be maintained at all times the EAF is operating in a melting and refining period. Continuous operation at pressures higher than the operational range or control setting may be considered by the Administrator or delegated authority to be unacceptable operation and maintenance of the affected facility.
(i) During any performance test required under § 60.8, and for any report thereof required by § 60.276(c) of this subpart or to determine compliance with § 60.272(a)(3) of this subpart, the owner or operator shall monitor the following information for all heats covered by the test:
(1) Charge weights and materials, and tap weights and materials;
(2) Heat times, including start and stop times, and a log of process operation, including periods of no operation during testing and, if a furnace static pressure monitoring device is operated pursuant to paragraph (f) of this section, the pressure inside the furnace when DEC systems are used;
(3) Control device operation log;
(4) Continuous opacity monitor or EPA Method 9 data, or, as an alternative to EPA Method 9, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(5) All damper positions, no less frequently than performed in the latest melt shop opacity compliance test for a full heat, if selected as a method to demonstrate compliance under paragraph (b) of this section;
(6) Fan motor amperes at each damper position, if selected as a method to demonstrate compliance under paragraph (b) of this section;
(7) Volumetric air flow rate through each separately ducted hood, if selected as a method to demonstrate compliance under paragraph (b) of this section; and
(8) Static pressure at each separately ducted hood, if selected as a method to demonstrate compliance under paragraph (b) of this section.
(9) Parameters monitored pursuant to paragraphs (i)(6)-(8) of this section shall be recorded on a rolling averaging period not to exceed 15 minutes.
The revisions and additions read as follows:
(a) During performance tests required in § 60.8, the owner or operator shall not add gaseous diluent to the effluent gas after the fabric filter in any pressurized fabric collector, unless the amount of dilution is separately determined and considered in the determination of emissions.
(b) * * *
(2) Use a method that is acceptable to the Administrator or delegated authority and that compensates for the emissions from the facilities not subject to the provisions of this subpart.
(3) Any combination of the criteria of paragraphs (b)(1) and (b)(2) of this section.
(c) When emissions from any EAF(s) are combined with emissions from facilities not subject to the provisions of this subpart, compliance with § 60.272(a)(3) will be based on emissions from only the affected facility(ies). The owner or operator may use operational knowledge to determine the facilities that are the sources, in whole or in part, of any emissions observed in demonstrations of compliance with § 60.272(a)(3).
(e) * * *
(1) EPA Method 5 (and referenced EPA Methods 1, 2, 3, 3A, 3B, and 4) shall be used for negative-pressure fabric filters and other types of control devices and EPA Method 5D (and referenced EPA Method 5) shall be used for positive-pressure fabric filters to determine the particulate matter concentration and, if applicable, the volumetric flow rate of the effluent gas. The sampling time and sample volume for each run shall be at least 4 hours and 4.5 dscm (160 dscf) and, when a single EAF is sampled, the sampling time shall include an integral number of heats. The manual portions only and not the instrumental portion of the voluntary consensus standard ANSI/ASME PTC 19.10-1981 (incorporated by reference, see § 60.17) is an acceptable alternative to EPA Methods 3, 3A, and 3B.
(3) EPA Method 9 or, as an alternative, ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(4) To demonstrate compliance with § 60.272(a)(1), (2), and (3), the EPA Method 9 test runs shall be conducted concurrently with the particulate matter test runs, unless inclement weather interferes.
(g) Where emissions from any EAF(s) are combined with emissions from facilities not subject to the provisions of this subpart, the owner or operator may use any of the following procedures for demonstrating compliance with § 60.272(a)(3), except if the combined emissions are controlled by a common capture system and control device, in which case the owner or operator may use any of the following procedures during an opacity performance test and during shop opacity observations:
(3) Any combination of the criteria of paragraphs (g)(1) and (2) of this section.
(h) If visible emissions observations are made in lieu of using a continuous opacity monitoring system, as allowed for by § 60.273(c), visible emission observations shall be conducted at least once per day for at least three 6-minute periods when the furnace is operating in the melting and refining period. All visible emissions observations shall be conducted in accordance with EPA Method 9. If visible emissions occur from more than one point, the opacity shall be recorded for any points where visible emissions are observed. Where it is possible to determine that a number of visible emission sites relate to only one incident of the visible emission, only one set of three 6-minute observations will be required. In that case, the EPA Method 9 observations must be made for the site of highest opacity that directly relates to the cause (or location) of visible emissions observed during a single incident. Records shall be maintained of any 6-minute average that is in excess of the emission limit specified in § 60.272(a).
The revisions and additions read as follows:
(a) Continuous operation at a furnace static pressure that exceeds the operational range or control setting under § 60.274(g), for owners and operators that elect to install a furnace static pressure monitoring device under § 60.274(f) or operation at flow rates lower than those established under § 60.274(c) may be considered by the Administrator or delegated authority to be unacceptable operation and maintenance of the affected facility. Operation at such values shall be reported to the Administrator or delegated authority semiannually.
(b) When the owner or operator of an EAF is required to demonstrate compliance with the standard under § 60.275(b)(2) or a combination of (b)(1) and (b)(2), the owner or operator shall provide notice to the Administrator or delegated authority of the procedure(s) that will be used to determine compliance. Notification of the procedure(s) to be used must be postmarked at least 30 days prior to the performance test.
(c) For the purpose of this subpart, the owner or operator shall conduct the demonstration of compliance with § 60.272(a) of this subpart and furnish the Administrator or delegated authority with a written report of the results of the test. This report shall include the following information:
(3) Make and model of the control device, and continuous opacity monitoring equipment, if applicable;
(4) Flow diagram of process and emission capture system including other equipment or process(es) ducted to the same control device;
(6) * * *
(iv) Continuous opacity monitor or EPA Method 9 data, or, as an alternative to EPA Method 9, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(10) Test observers from any outside agency;
(d) The owner or operator shall maintain records of all shop opacity observations made in accordance with § 60.273(d). All shop opacity observations in excess of the emission limit specified in § 60.272(a)(3) of this subpart shall indicate a period of excess emissions, and shall be reported to the Administrator or delegated authority semi-annually, according to § 60.7(c) and submitted according to paragraph (h) of this section. In addition to the information required at § 60.7(c), the report shall include the following information:
(1) The company name and address of the affected facility.
(2) An identification of each affected facility being included in the report.
(3) Beginning and ending dates of the reporting period.
(4) A certification by a certifying official of truth, accuracy, and completeness. This certification shall
(e) * * *
(3) An identification of the date and time of all bag leak detection system alarms, the time that procedures to determine the cause of the alarm were initiated, if procedures were initiated within 1 hour of the alarm, the cause of the alarm, an explanation of the actions taken, the date and time the cause of the alarm was alleviated, and if the alarm was alleviated within 24 hours of the alarm.
(f) Records of the measurements required in § 60.274 must be retained for at least 5 years following the date of the measurement.
(g) Within 60 days after the date of completing each performance test or demonstration of compliance required by this subpart, you must submit the results of the performance test following the procedures specified in paragraphs (g)(1) through (3) of this section.
(1) Data collected using test methods supported by the EPA's Electronic Reporting Tool (ERT) as listed on the EPA's ERT website (
(2) Data collected using test methods that are not supported by the EPA's ERT as listed on the EPA's ERT website at the time of the test. The results of the performance test must be included as an attachment in the ERT or an alternate electronic file consistent with the XML schema listed on the EPA's ERT website. Submit the ERT generated package or alternative file to the EPA via CEDRI.
(3) Confidential business information (CBI). Do not use CEDRI to submit information you claim as CBI. Anything submitted using CEDRI cannot later be claimed CBI. Although we do not expect persons to assert a claim of CBI, if you wish to assert a CBI claim for some of the information submitted under paragraph (g)(1) or (2) of this section, you must submit a complete file, including information claimed to be CBI, to the EPA. The file must be generated using the EPA's ERT or an alternate electronic file consistent with the XML schema listed on the EPA's ERT website. The preferred method to submit CBI is for it to be transmitted electronically using email attachments, File Transfer Protocol (FTP), or other online file sharing services (
(h) You must submit a report of excess emissions and monitoring systems performance report according to § 60.7(c) to the Administrator semiannually. Submit all reports to the EPA via CEDRI, which can be accessed through the EPA's CDX (
(i) If you are required to electronically submit a report through CEDRI in the EPA's CDX, you may assert a claim of EPA system outage for failure to timely comply with that reporting requirement. To assert a claim of EPA system outage, you must meet the requirements outlined in paragraphs (i)(1) through (7) of this section.
(1) You must have been or will be precluded from accessing CEDRI and submitting a required report within the time prescribed due to an outage of either the EPA's CEDRI or CDX systems.
(2) The outage must have occurred within the period of time beginning five business days prior to the date that the submission is due.
(3) The outage may be planned or unplanned.
(4) You must submit notification to the Administrator in writing as soon as possible following the date you first knew, or through due diligence should have known, that the event may cause or has caused a delay in reporting.
(5) You must provide to the Administrator a written description identifying:
(i) The date(s) and time(s) when CDX or CEDRI was accessed, and the system was unavailable;
(ii) A rationale for attributing the delay in reporting beyond the regulatory deadline to EPA system outage;
(iii) A description of measures taken or to be taken to minimize the delay in reporting; and
(iv) The date by which you propose to report, or if you have already met the reporting requirement at the time of the notification, the date you reported.
(6) The decision to accept the claim of EPA system outage and allow an extension to the reporting deadline is solely within the discretion of the Administrator.
(7) In any circumstance, the report must be submitted electronically as soon as possible after the outage is resolved.
(j) If you are required to electronically submit a report through CEDRI in the EPA's CDX, you may assert a claim of
(1) You may submit a claim if a force majeure event is about to occur, occurs, or has occurred or there are lingering effects from such an event within the period of time beginning five business days prior to the date the submission is due. For the purposes of this section, a force majeure event is defined as an event that will be or has been caused by circumstances beyond the control of the affected facility, its contractors, or any entity controlled by the affected facility that prevents you from complying with the requirement to submit a report electronically within the time period prescribed. Examples of such events are acts of nature (
(2) You must submit notification to the Administrator in writing as soon as possible following the date you first knew, or through due diligence should have known, that the event may cause or has caused a delay in reporting.
(3) You must provide to the Administrator:
(i) A written description of the force majeure event;
(ii) A rationale for attributing the delay in reporting beyond the regulatory deadline to the force majeure event;
(iii) A description of measures taken or to be taken to minimize the delay in reporting; and
(iv) The date by which you propose to report, or if you have already met the reporting requirement at the time of the notification, the date you reported.
(4) The decision to accept the claim of force majeure and allow an extension to the reporting deadline is solely within the discretion of the Administrator.
(5) In any circumstance, the reporting must occur as soon as possible after the force majeure event occurs.
(k) Any records required to be maintained by this subpart that are submitted electronically via the EPA's CEDRI may be maintained in electronic format. This ability to maintain electronic copies does not affect the requirement for facilities to make records, data, and reports available upon request to a delegated air agency or the EPA as part of an on-site compliance evaluation.
(b) The provisions of this subpart apply to each affected facility identified in paragraph (a) of this section that commences construction, modification, or reconstruction after August 17, 1983 and on or before May 16, 2022, where a modification is any physical change in, or change in the method of operation of, an existing facility which increases the amount of any air pollutant (to which this standard applies) emitted into the atmosphere by that facility or which results in the emission of any air pollutant (to which this standard applies) into the atmosphere not previously emitted.
The revisions and additions read as follows:
(1) During the digital camera opacity technique (DCOT) certification procedure outlined in Section 9.2 of ASTM D7520-16 (incorporated by reference, see § 60.17), the owner or operator or the DCOT vendor must present the plumes in front of various backgrounds of color and contrast representing conditions anticipated during field use such as blue sky, trees, and mixed backgrounds (clouds and/or a sparse tree stand);
(2) The owner or operator must also have standard operating procedures in place including daily or other frequency quality checks to ensure the equipment is within manufacturing specifications as outlined in Section 8.1 of ASTM D7520-16 (incorporated by reference, see § 60.17);
(3) The owner or operator must follow the recordkeeping procedures outlined in § 60.7(f) for the DCOT certification, compliance report, data sheets, and all raw unaltered JPEGs used for opacity and certification determination;
(4) The owner or operator or the DCOT vendor must have a minimum of four independent technology users apply the software to determine the visible opacity of the 300 certification plumes. For each set of 25 plumes, the user may not exceed 15 percent opacity of anyone reading and the average error must not exceed 7.5 percent opacity;
(5) Use of this approved alternative does not provide or imply a certification or validation of any vendor's hardware or software. The onus to maintain and verify the certification and/or training of the DCOT camera, software, and operator in accordance with ASTM D7520-16 (incorporated by reference, see § 60.17) and these requirements is on the facility, DCOT operator, and DCOT vendor.
(a) On and after the date of which the performance test required to be conducted by § 60.8 is completed, no owner or operator subject to the provisions of this subpart shall cause to be discharged into the atmosphere from an EAF or an AOD vessel any gases which:
(1) Exit from a control device and contain particulate matter in excess of 12 mg/dscm (0.0052 gr/dscf);
(2) Exit from a control device and exhibit 3 percent opacity or greater, as measured in accordance with EPA Method 9 of appendix A of this part, or, as an alternative, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(3) Exit from a shop and, due solely to the operations of any affected EAF(s) or AOD vessel(s), exhibit 6 percent opacity or greater, as measured in accordance with EPA Method 9 of appendix A of this part, or, as an alternative, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(b) On and after the date on which the performance test required to be conducted by § 60.8 is completed, no owner or operator subject to the provisions of this subpart shall cause to be discharged into the atmosphere from the dust-handling system any gases that exhibit 10 percent opacity or greater, as measured in accordance with EPA Method 9 of appendix A of this part, or, as an alternative, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
The revisions and addition read as follows:
(c) A continuous monitoring system for the measurement of the opacity of emissions discharged into the atmosphere from the control device(s) is not required on any modular, multi-stack, negative-pressure or positive-pressure fabric filter or on any single-stack fabric filter if observations of the opacity of the visible emissions from the control device are performed by a certified visible emission observer and the owner installs and operates a bag leak detection system according to paragraph (e) of this section whenever the control device is being used to remove particulate matter from the EAF or AOD. Visible emission observations shall be conducted at least once per day of the control device for at least three 6-minute periods when the furnace is operating in the melting and refining period. All visible emissions observations shall be conducted in accordance with EPA Method 9, or, as an alternative, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(d) A furnace static pressure monitoring device is not required on any EAF equipped with a DEC system if observations of shop opacity are performed by a certified visible emission observer as follows:
(1) At least once per day when the furnace is operating.
(2) No less than once per week, commencing from the tap of one EAF heat cycle to the tap of the following heat cycle. A melt shop with more than one EAF shall conduct these readings while both EAFs are in operation. Both EAFs are not required to be on the same schedule for tapping.
(3) Shop opacity shall be determined as the arithmetic average of 24 consecutive 15-second opacity observations of emissions from the shop taken in accordance with EPA Method 9, or, as an alternative, according to
(e) A bag leak detection system must be installed on all single-stack fabric filters and operated whenever the control device is being used to remove particulate matter from the EAF or AOD vessel if the owner or operator elects not to install and operate a continuous opacity monitoring system as provided for under paragraph (c) of this section. In addition, the owner or operator shall meet the visible emissions observation requirements in paragraph (c) of this section. The bag leak detection system must meet the specifications and requirements of paragraphs (e)(1) through (8) of this section.
(3) The bag leak detection system must be equipped with an alarm system that will activate when an increase in relative particulate loading is detected over the alarm set point established according to paragraph (e)(4) of this section, and the alarm must be located such that it can be identified by the appropriate plant personnel.
(6) * * *
(i) Once per quarter, the owner or operator may adjust the sensitivity of the bag leak detection system to account for seasonal effects including temperature and humidity according to the procedures identified in the site-specific monitoring plan required under paragraph (e)(4) of this section.
(ii) If opacities greater than zero percent are observed over four consecutive 15-second observations during the daily opacity observations required under paragraph (c) of this section and the alarm on the bag leak detection system alarm is not activated, the owner or operator shall lower the alarm set point on the bag leak detection system to a point where the alarm would have been activated during the period when the opacity observations were made.
(7) For negative pressure, induced air baghouses, and positive pressure baghouses that are discharged to the atmosphere through a stack, the bag leak detection sensor must be installed downstream of the baghouse or upstream of any wet scrubber.
(f) For each bag leak detection system installed according to paragraph (e) of this section, the owner or operator shall initiate procedures to determine the cause of all alarms within 1 hour of an alarm. The cause of the alarm must be alleviated within 24 hours of the time the alarm occurred by taking whatever response action(s) are necessary. Response actions may include, but are not limited to, the following:
(1) Inspecting the baghouse for air leaks, torn or broken bags or filter media, or any other condition that may have caused an increase in particulate emissions;
(5) Cleaning the bag leak detection system probe or otherwise repairing the bag leak detection system;
(6) Establishing to the extent acceptable by the delegated authority that the alarm was a false alarm and not caused by a bag leak or other malfunction that could reasonably result in excess particulate emissions; and
(g) In approving the site-specific monitoring plan required in paragraph (e)(4) of this section, the Administrator or delegated authority may allow owners or operators more than 24 hours to alleviate specific conditions that cause an alarm if the owner or operator identifies the condition that could lead to an alarm in the monitoring plan, adequately explains why it is not feasible to alleviate the condition within 24 hours of the time the alarm occurred, and demonstrates that the requested additional time will ensure alleviation of the condition as expeditiously as practicable.
(b) Except as provided under paragraph (e) of this section, the owner or operator subject to the provisions of this subpart shall:
(1) Monitor and record on a continuous basis the rolling 15-minute average furnace static pressure (if a DEC system is in use, and a furnace static pressure gauge is installed according to paragraph (f) of this section) and either:
(i) Install, calibrate, and maintain a monitoring device that continuously records the capture system fan motor amperes and damper position(s);
(ii) Install, calibrate, and maintain a monitoring device that continuously records on a rolling 15-minute average basis either the volumetric flow rate through each separately ducted hood; or
(iii) Install, calibrate, and maintain a monitoring device that continuously records the volumetric flow rate at the control device inlet continuously record damper positions(s).
(2) The volumetric flow monitoring device(s) may be installed in any appropriate location in the capture system such that reproducible flow rate monitoring will result. The flow rate monitoring device(s) shall have an accuracy of ±10 percent over its normal operating range and shall be calibrated according to the manufacturer's instructions. The Administrator may require the owner or operator to demonstrate the accuracy of the monitoring device(s) relative to EPA Methods 1 and 2 of appendix A of this part.
(3) Parameters monitored pursuant to this paragraph, excluding damper position, shall be recorded on a rolling averaging period not to exceed 15 minutes.
(c) When the owner or operator of an affected facility is required to demonstrate compliance with the standards under § 60.272a(a)(3) and at any other time that the Administrator may require (under section 114 of the CAA, as amended), the owner or operator shall determine during periods in which a hood is operated for the purpose of capturing emissions from the affected facility subject to paragraph (b) of this section, all damper positions and either the:
(1) Monitor and record the fan motor amperes at each damper position, and damper position consistent with paragraph (h)(5) of this section;
(2) Install, calibrate, and maintain a monitoring device that continuously records the volumetric flow rate through each separately ducted hood; or
(3) Install, calibrate, and maintain a monitoring device that continuously records the volumetric flow rate at the control device inlet and monitor and record the damper position consistent with paragraph (h)(5) of this section.
(4) Parameters monitored pursuant to this paragraph, excluding damper position, shall be recorded on a rolling averaging period not to exceed 15 minutes.
(5) The owner or operator may petition the Administrator or delegated authority for reestablishment of these parameters whenever the owner or operator can demonstrate to the Administrator's or delegated authority's satisfaction that the affected facility
(d) Except as provided under paragraph (e) of this section, the owner or operator shall perform monthly operational status inspections of the equipment that is important to the performance of the capture system (
(e) The owner or operator may petition the Administrator or delegated authority to approve any alternative to either the monitoring requirements specified in paragraph (b) of this section or the monthly operational status inspections specified in paragraph (d) of this section if the alternative will provide a continuous record of operation of each emission capture system.
(f) Except as provided for under § 60.273a(d), if emissions during any phase of the heat cycle are controlled by the use of a DEC system, the owner or operator shall install, calibrate, and maintain a monitoring device that allows the pressure in the free space inside the EAF to be monitored. The pressure shall be recorded as no greater than 15-minute integrated block averages. The monitoring device may be installed in any appropriate location in the EAF or DEC duct prior to the introduction of ambient air such that reproducible results will be obtained. The pressure monitoring device shall have an accuracy of ±5 mm of water gauge over its normal operating range and shall be calibrated according to the manufacturer's instructions.
(g) Except as provided for under § 60.273a(d), when the owner or operator of an EAF controlled by a DEC is required to demonstrate compliance with the standard under § 60.272a(a)(3), and at any other time the Administrator may require (under section 114 of the Clean Air Act, as amended), the pressure in the free space inside the furnace shall be determined during the melting and refining period(s) using the monitoring device required under paragraph (f) of this section. The owner or operator may petition the Administrator or delegated authority for reestablishment of the pressure whenever the owner or operator can demonstrate to the Administrator's or delegated authority's satisfaction that the EAF operating conditions upon which the pressures were previously established are no longer applicable. The pressure range or control setting during the most recent demonstration of compliance shall be maintained at all times when the EAF is operating in a melting and refining period. Continuous operation at pressures higher than the operational range or control setting may be considered by the Administrator or delegated authority to be unacceptable operation and maintenance of the affected facility.
(h) During any performance test required under § 60.8, and for any report thereof required by § 60.276a(f) of this subpart, or to determine compliance with § 60.272a(a)(3) of this subpart, the owner or operator shall monitor the following information for all heats covered by the test:
(1) Charge weights and materials, and tap weights and materials;
(2) Heat times, including start and stop times, and a log of process operation, including periods of no operation during testing and, if a furnace static pressure monitoring device is operated pursuant to paragraph (f) of this section, the pressure inside an EAF when DEC systems are used;
(3) Control device operation log;
(4) Continuous opacity monitor or EPA Method 9 data, or, as an alternative to EPA Method 9, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(5) All damper positions, no less frequently than performed in the latest melt shop opacity compliance test for a full heat, if selected as a method to demonstrate compliance under paragraph (b) of this section;
(6) Fan motor amperes at each damper position, if selected as a method to demonstrate compliance under paragraph (b) of this section;
(7) Volumetric air flow rate through each separately ducted hood, if selected as a method to demonstrate compliance under paragraph (b) of this section; and
(8) Static pressure at each separately ducted hood, if selected as a method to demonstrate compliance under paragraph (b) of this section.
(9) Parameters monitored pursuant to paragraphs (h)(6) through (8) of this section shall be recorded on a rolling averaging period not to exceed 15 minutes.
The revisions and addition read as follows:
(a) During performance tests required in § 60.8, the owner or operator shall not add gaseous diluents to the effluent gas stream after the fabric filter in any pressurized fabric filter collector, unless the amount of dilution is separately determined and considered in the determination of emissions.
(b) * * *
(2) Use a method that is acceptable to the Administrator or delegated authority and that compensates for the emissions from the facilities not subject to the provisions of this subpart.
(3) Any combination of the criteria of paragraphs (b)(1) and (b)(2) of this section.
(c) When emission from any EAF(s) or AOD vessel(s) are combined with emissions from facilities not subject to the provisions of this subpart, compliance with § 60.272a(a)(3) will be based on emissions from only the affected facility(ies). The owner or operator may use operational knowledge to determine the facilities that are the sources, in whole or in part, of any emissions observed in demonstrations of compliance with § 60.272a(a)(3).
(e) The owner or operator shall determine compliance with the particulate matter standards in § 60.272a as follows:
(1) EPA Method 5 (and referenced EPA Methods 1, 2, 3, 3A, 3B, and 4) shall be used for negative-pressure fabric filters and other types of control devices and EPA Method 5D (and referenced EPA Method 5) shall be used for positive-pressure fabric filters to determine the particulate matter concentration and volumetric flow rate of the effluent gas. The sampling time and sample volume for each run shall be at least 4 hours and 4.50 dscm (160 dscf) and, when a single EAF or AOD vessel
(2) When more than one control device serves the EAF(s) being tested, the concentration of particulate matter shall be determined using the following equation:
(3) EPA Method 9 or, as an alternative, ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(4) To demonstrate compliance with § 60.272a(a) (1), (2), and (3), the EPA Method 9 test runs shall be conducted concurrently with the particulate matter test runs, unless inclement weather interferes.
(h) Where emissions from any EAF(s) or AOD vessel(s) are combined with emissions from facilities not subject to the provisions of this subpart, determinations of compliance with § 60.272a(a)(3) will only be based upon emissions originating from the affected facility(ies), except if the combined emissions are controlled by a common capture system and control device, in which case the owner or operator may use any of the following procedures during an opacity performance test and during shop opacity observations:
(1) Base compliance on control of the combined emissions; or
(2) Utilize a method acceptable to the Administrator that compensates for the emissions from the facilities not subject to the provisions of this subpart.
(i) Unless the presence of inclement weather makes concurrent testing infeasible, the owner or operator shall conduct concurrently the performance tests required under § 60.8 to demonstrate compliance with § 60.272a(a) (1), (2), and (3) of this subpart.
The revisions and additions read as follows:
(a) Records of the measurements required in § 60.274a must be retained for at least 5 years following the date of the measurement.
(b) Each owner or operator shall submit a written report of exceedances of the control device opacity to the Administrator or delegated authority semi-annually. For the purposes of these reports, exceedances are defined as all 6-minute periods during which the average opacity of emissions from the control device is 3 percent or greater.
(c) Continuous operation at a furnace static pressure that exceeds the operational range or control setting under § 60.274a(g), for owners and operators that elect to install a furnace static pressure monitoring device under § 60.274a(f) or operation at flow rates lower than those established under § 60.274a(c) may be considered by the Administrator or delegated authority to be unacceptable operation and maintenance of the affected facility. Operation at such values shall be reported to the Administrator or delegated authority semiannually.
(e) When the owner or operator of an EAF or AOD is required to demonstrate compliance with the standard under § 60.275a(b)(2) or a combination of § 60.275a(b)(1) and (b)(2) the owner or operator shall provide notice to the Administrator or delegated authority of the procedure(s) that will be used to determine compliance. Notification of the procedure(s) to be used must be postmarked at least 30 days prior to the performance test.
(f) For the purpose of this subpart, the owner or operator shall conduct the demonstration of compliance with § 60.272a(a) of this subpart and furnish the Administrator or delegated authority with a written report of the results of the test. This report shall include the following information:
(3) Make and model of the control device, and continuous opacity monitoring equipment, if applicable;
(4) Flow diagram of process and emission capture system including other equipment or process(es) ducted to the same control device;
(6) * * *
(iv) Continuous opacity monitor or EPA Method 9 data, or, as an alternative to EPA Method 9, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(10) Test observers from any outside agency;
(g) The owner or operator shall maintain records of all shop opacity observations made in accordance with § 60.273a(d). All shop opacity observations in excess of the emission limit specified in § 60.272a(a)(3) of this subpart shall indicate a period of excess emissions and shall be reported to the Administrator or delegated authority semi-annually, according to § 60.7(c) and submitted according to paragraph (j) of this section. In addition to the information required at § 60.7(c), the report shall include the following information:
(1) The company name and address of the affected facility.
(2) An identification of each affected facility being included in the report.
(3) Beginning and ending dates of the reporting period.
(4) A certification by a certifying official of truth, accuracy, and completeness. This certification shall state that, based on information and belief formed after reasonable inquiry, the statements and information in the document are true, accurate, and complete.
(h) * * *
(3) An identification of the date and time of all bag leak detection system alarms, the time that procedures to determine the cause of the alarm were initiated, if procedures were initiated within 1 hour of the alarm, the cause of the alarm, an explanation of the actions taken, the date and time the cause of the alarm was alleviated, and if the alarm was alleviated within 24 hours of the alarm.
(i) Within 60 days after the date of completing each performance test or demonstration of compliance required by this subpart, you must submit the results of the performance test following the procedures specified in paragraphs (i)(1) through (3) of this section.
(1) Data collected using test methods supported by the EPA's Electronic Reporting Tool (ERT) as listed on the EPA's ERT website (
(2) Data collected using test methods that are not supported by the EPA's ERT as listed on the EPA's ERT website at the time of the test. The results of the performance test must be included as an attachment in the ERT or an alternate electronic file consistent with the XML schema listed on the EPA's ERT website. Submit the ERT generated package or alternative file to the EPA via CEDRI.
(3) Confidential business information (CBI). Do not use CEDRI to submit information you claim as CBI. Anything submitted using CEDRI cannot later be claimed CBI. Although we do not expect persons to assert a claim of CBI, if you wish to assert a CBI claim for some of the information submitted under paragraph (i)(1) or (2) of this section, you must submit a complete file, including information claimed to be CBI, to the EPA. The file must be generated using the EPA's ERT or an alternate electronic file consistent with the XML schema listed on the EPA's ERT website. The preferred method to submit CBI is for it to be transmitted electronically using email attachments, File Transfer Protocol (FTP), or other online file sharing services (
(j) You must submit a report of excess emissions and monitoring systems performance report according to § 60.7(c) to the Administrator semiannually. Submit all reports to the EPA via CEDRI, which can be accessed through the EPA's CDX (
(k) If you are required to electronically submit a report through CEDRI in the EPA's CDX, you may assert a claim of EPA system outage for failure to timely comply with that reporting requirement. To assert a claim of EPA system outage, you must meet the requirements outlined in paragraphs (k)(1) through (7) of this section.
(1) You must have been or will be precluded from accessing CEDRI and submitting a required report within the time prescribed due to an outage of either the EPA's CEDRI or CDX systems.
(2) The outage must have occurred within the period of time beginning five business days prior to the date that the submission is due.
(3) The outage may be planned or unplanned.
(4) You must submit notification to the Administrator in writing as soon as possible following the date you first knew, or through due diligence should have known, that the event may cause or has caused a delay in reporting.
(5) You must provide to the Administrator a written description identifying:
(i) The date(s) and time(s) when CDX or CEDRI was accessed and the system was unavailable;
(ii) A rationale for attributing the delay in reporting beyond the regulatory deadline to EPA system outage;
(iii) A description of measures taken or to be taken to minimize the delay in reporting; and
(iv) The date by which you propose to report, or if you have already met the reporting requirement at the time of the notification, the date you reported.
(6) The decision to accept the claim of EPA system outage and allow an extension to the reporting deadline is solely within the discretion of the Administrator.
(7) In any circumstance, the report must be submitted electronically as soon as possible after the outage is resolved.
(l) If you are required to electronically submit a report through CEDRI in the EPA's CDX, you may assert a claim of force majeure for failure to timely comply with that reporting requirement. To assert a claim of force majeure, you must meet the requirements outlined in paragraphs (l)(1) through (5) of this section.
(1) You may submit a claim if a force majeure event is about to occur, occurs, or has occurred or there are lingering effects from such an event within the period of time beginning five business days prior to the date the submission is due. For the purposes of this section, a force majeure event is defined as an event that will be or has been caused by circumstances beyond the control of the affected facility, its contractors, or any entity controlled by the affected facility that prevents you from complying with the requirement to submit a report electronically within the time period prescribed. Examples of such events are acts of nature (
(2) You must submit notification to the Administrator in writing as soon as possible following the date you first knew, or through due diligence should have known, that the event may cause or has caused a delay in reporting.
(3) You must provide to the Administrator:
(i) A written description of the force majeure event;
(ii) A rationale for attributing the delay in reporting beyond the regulatory deadline to the force majeure event;
(iii) A description of measures taken or to be taken to minimize the delay in reporting; and
(iv) The date by which you propose to report, or if you have already met the reporting requirement at the time of the notification, the date you reported.
(4) The decision to accept the claim of force majeure and allow an extension to the reporting deadline is solely within the discretion of the Administrator.
(5) In any circumstance, the reporting must occur as soon as possible after the force majeure event occurs.
(m) Any records required to be maintained by this subpart that are submitted electronically via the EPA's CEDRI may be maintained in electronic format. This ability to maintain electronic copies does not affect the requirement for facilities to make records, data, and reports available upon request to a delegated air agency or the EPA as part of an on-site compliance evaluation.
(a) The provisions of this subpart are applicable to the following affected facilities in steel plants that produce carbon, alloy, or specialty steels: electric arc furnaces (EAF), argon-oxygen decarburization (AOD) vessels, and dust-handling systems.
(b) The provisions of this subpart apply to each affected facility identified in paragraph (a) of this section that commences construction, modification, or reconstruction after May 16, 2022.
As used in this subpart, all terms not defined herein shall have the meaning given them in the Act and in subpart A of this part.
(1) During the digital camera opacity technique (DCOT) certification procedure outlined in Section 9.2 of ASTM D7520-16 (incorporated by reference, see § 60.17), the owner or operator or the DCOT vendor must present the plumes in front of various backgrounds of color and contrast representing conditions anticipated during field use such as blue sky, trees, and mixed backgrounds (clouds and/or a sparse tree stand);
(2) The owner or operator must also have standard operating procedures in place including daily or other frequency quality checks to ensure the equipment is within manufacturing specifications as outlined in Section 8.1 of ASTM D7520-16 (incorporated by reference, see § 60.17);
(3) The owner or operator must follow the recordkeeping procedures outlined in § 60.7(f) for the DCOT certification, compliance report, data sheets, and all raw unaltered JPEGs used for opacity and certification determination;
(4) The owner or operator or the DCOT vendor must have a minimum of four independent technology users apply the software to determine the visible opacity of the 300 certification plumes. For each set of 25 plumes, the user may not exceed 15 percent opacity of anyone reading and the average error must not exceed 7.5 percent opacity;
(5) Use of this approved alternative does not provide or imply a certification or validation of any vendor's hardware or software. The onus to maintain and verify the certification and/or training of the DCOT camera, software, and operator in accordance with ASTM D7520-16 (incorporated by reference, see § 60.17) and these requirements is on the facility, DCOT operator, and DCOT vendor.
(a) On and after the date of which the performance tests required to be conducted by § 60.8 or § 60.272b(d) are completed, no owner or operator subject to the provisions of this subpart shall cause to be discharged into the atmosphere from an EAF or an AOD vessel any gases which:
(1) Exit from control devices at the facility and contain particulate matter as a total for the facility in excess of 79 mg/kg steel produced (0.16 lb/ton steel produced) for the facility;
(2) Exit from a control device and exhibit 3 percent opacity or greater, as measured in accordance with EPA Method 9 of appendix A of this part, or, as an alternative, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(3) Exit from a shop and, due solely to the operations of any affected EAF(s) or AOD vessel(s) during melting and refining exhibit greater than 0 percent opacity, and during charging exhibit greater than 6 percent opacity, as measured in accordance with EPA Method 9 of appendix A of this part, and during charging, exhibit greater than 6 percent opacity, as measured according to the procedures in section 2.5 of Method 9 in appendix A to part 60 of this chapter, with the modification of this section of Method 9 to determine the 3-minute block average opacity from the average of 12 consecutive observations recorded at 15-second intervals; or, as an alternative, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(b) On and after the date on which the performance tests required to be conducted by § 60.8 or § 60.272b(d) are completed, no owner or operator subject to the provisions of this subpart shall cause to be discharged into the atmosphere from the dust-handling system any gases that exhibit 10 percent opacity or greater, as measured in accordance with EPA Method 9 of appendix A of this part, or, as an alternative, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(c) The standards in paragraphs (a) and (b) apply at all times. The exemptions to opacity standards under § 60.11(c) do not apply to this subpart. As provided in § 60.11(f), this provision supersedes the exemptions for periods
(d) Performance tests required to be conducted to show compliance with the standards in paragraph (a) of this section shall be repeated at least every 5 years after the performance tests required by § 60.8 are conducted.
(a) Except as provided under paragraphs (b) and (c) of this section, a continuous monitoring system for the measurement of the opacity of emissions discharged into the atmosphere from the control device(s) shall be installed, calibrated, maintained, and operated by the owner or operator subject to the provisions of this subpart.
(b) No continuous monitoring system shall be required on any control device serving the dust-handling system.
(c) A continuous monitoring system for the measurement of the opacity of emissions discharged into the atmosphere from the control device(s) is not required on any modular, multi-stack, negative-pressure or positive-pressure fabric filter or on any single-stack fabric filter if observations of the opacity of the visible emissions from the control device are performed by a certified visible emission observer and the owner installs and operates a bag leak detection system according to paragraph (e) of this section whenever the control device is being used to remove particulate matter from the EAF or AOD. Visible emission observations shall be conducted at least once per day on the control device for at least three 6-minute periods when the furnace is operating in the melting and refining period. All visible emissions observations shall be conducted in accordance with EPA Method 9, or, as an alternative, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(d) A furnace static pressure monitoring device is not required on any EAF equipped with a DEC system if observations of shop opacity are performed by a certified visible emission observer as follows:
(1) At least once per day when the furnace is operating.
(2) No less than once per week, commencing from the tap of one EAF heat cycle to the tap of the following heat cycle. A melt shop with more than one EAF shall conduct these readings while both EAFs are in operation. Both EAFs are not required to be on the same schedule for tapping.
(3) Shop opacity shall be determined as the arithmetic average of 24 consecutive 15-second opacity observations of emissions from the shop taken in accordance with EPA Method 9 during melting and refining and during tapping; and during charging determined according to the procedures in section 2.5 of Method 9 in appendix A to part 60 of this chapter, with the modification to determine the 3-minute block average opacity from the average of 12 consecutive observations recorded at 15-second intervals; or, as an alternative, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(e) A bag leak detection system must be installed on all fabric filters and operated on all single-stack fabric filters whenever the control device is being used to remove particulate matter from the EAF or AOD vessel if the owner or operator elects not to install and operate a continuous opacity monitoring system as provided for under paragraph (c) of this section. In addition, the owner or operator shall meet the visible emissions observation requirements in paragraph (c) of this section. The bag leak detection system must meet the specifications and requirements of paragraphs (e)(1) through (8) of this section.
(1) The bag leak detection system must be certified by the manufacturer to be capable of detecting particulate matter emissions at a concentrations of 1 milligram per actual cubic meter (0.00044 grains per actual cubic foot) or less.
(2) The bag leak detection system sensor must provide output of relative particulate matter loadings and the owner or operator shall continuously record the output from the bag leak detection system using electronic or other means (
(3) The bag leak detection system must be equipped with an alarm system that will activate when an increase in relative particulate loading is detected over the alarm set point established according to paragraph (e)(4) of this section, and the alarm must be located such that it can be identified by the appropriate plant personnel.
(4) For each bag leak detection system required by paragraph (e) of this section, the owner or operator shall develop and submit to the Administrator or delegated authority, for approval, a site-specific monitoring plan that addresses the items identified in paragraphs (i) through (v) of this paragraph (e)(4). For each bag leak detection system that operates based on the triboelectric effect, the monitoring plan shall be consistent with the recommendations contained in EPA-454/R-98-015, “Fabric Filter Bag Leak Detection Guidance” (incorporated by reference, see § 60.17). The owner or operator shall operate and maintain the bag leak detection system according to the site-specific monitoring plan at all times. The plan shall describe the following:
(i) Installation of the bag leak detection system;
(ii) Initial and periodic adjustment of the bag leak detection system including how the alarm set-point will be established;
(iii) Operation of the bag leak detection system including quality assurance procedures;
(iv) How the bag leak detection system will be maintained including a routine maintenance schedule and spare parts inventory list; and
(v) How the bag leak detection system output shall be recorded and stored.
(5) The initial adjustment of the system shall, at a minimum, consist of establishing the baseline output by adjusting the sensitivity (range) and the averaging period of the device, and establishing the alarm set points and the alarm delay time (if applicable).
(6) Following initial adjustment, the owner or operator shall not adjust the averaging period, alarm set point, or alarm delay time without approval from the Administrator or delegated authority except as provided for in paragraphs (e)(6)(i) and (ii) of this section.
(i) Once per quarter, the owner or operator may adjust the sensitivity of the bag leak detection system to account for seasonal effects including temperature and humidity according to the procedures identified in the site-specific monitoring plan required under paragraph (e)(4) of this section.
(ii) If opacities greater than 0 percent are observed over four consecutive 15-second observations during the daily opacity observations required under paragraph (c) of this section and the alarm on the bag leak detection system alarm is not activated, the owner or operator shall lower the alarm set point on the bag leak detection system to a point where the alarm would have been activated during the period when the opacity observations were made.
(7) For negative pressure, induced air baghouses, and positive pressure baghouses that are discharged to the atmosphere through a stack, the bag leak detection sensor must be installed downstream of the baghouse or upstream of any wet scrubber.
(8) Where multiple detectors are required, the system's instrumentation and alarm may be shared among detectors.
(f) For each bag leak detection system installed according to paragraph (e) of this section, the owner or operator shall initiate procedures to determine the cause of all alarms within 1 hour of an alarm. The cause of the alarm must be alleviated within 24 hours of the time the alarm occurred by taking whatever response action(s) are necessary. Response actions may include, but are not limited to, the following:
(1) Inspecting the baghouse for air leaks, torn or broken bags or filter media, or any other condition that may have caused an increase in particulate emissions;
(2) Sealing off defective bags or filter media;
(3) Replacing defective bags or filter media or otherwise repairing the control device;
(4) Sealing off a defective baghouse compartment;
(5) Cleaning the bag leak detection system probe or otherwise repairing the bag leak detection system;
(6) Establishing to the extent acceptable by the delegated authority that the alarm was a false alarm and not caused by a bag leak or other malfunction that could reasonably result in excess particulate emissions; and
(7) Shutting down the process producing the particulate emissions.
(g) In approving the site-specific monitoring plan required in paragraph (e)(4) of this section, the Administrator or delegated authority may allow owners or operators more than 24 hours to alleviate specific conditions that cause an alarm if the owner or operator identifies the condition that could lead to an alarm in the monitoring plan, adequately explains why it is not feasible to alleviate the condition within 24 hours of the time the alarm occurred, and demonstrates that the requested additional time will ensure alleviation of the condition as expeditiously as practicable.
(a) The owner or operator subject to the provisions of this subpart shall maintain records of the following information:
(1) All data obtained under paragraph (b) of this section; and
(2) All monthly operational status inspections performed under paragraph (c) of this section.
(b) Except as provided under paragraph (e) of this section, the owner or operator subject to the provisions of this subpart shall conduct the following monitoring of the capture system to demonstrate continuous compliance:
(1) If a DEC system is in use, according to paragraph (f) of this section, monitor and record on a continuous basis the furnace static pressure and any one of (2) through (4) in this paragraph:
(2) Monitor and record the fan motor amperes at each damper position, and damper position consistent with paragraph (h)(5) of this section;
(3) Install, calibrate, and maintain a monitoring device that continuously records the volumetric air flow rate or static pressure at each separately ducted hood; or
(4) Install, calibrate, and maintain a monitoring device that continuously records the volumetric flow rate at the control device inlet and monitor and record the damper position consistent with paragraph (h)(5) of this section.
(5) The static pressure monitoring device(s) shall be installed in an EAF or DEC duct prior to combining with other ducts and prior to the introduction of ambient air, at a location that has no flow disturbance due to the junctions.
(6) The volumetric flow monitoring device(s) may be installed in any appropriate location in the capture system such that reproducible flow rate monitoring will result. The flow rate monitoring device(s) shall have an accuracy of ±10 percent over its normal operating range and shall be calibrated according to the manufacturer's instructions. The Administrator may require the owner or operator to demonstrate the accuracy of the monitoring device(s) relative to EPA Methods 1 and 2 of appendix A of this part.
(7) Parameters monitored pursuant to this paragraph, excluding damper position, shall be recorded on a rolling averaging period not to exceed 15 minutes.
(c) When the owner or operator of an affected facility is required to demonstrate compliance with the standards under § 60.272b(a)(3) and at any other time that the Administrator may require (under section 114 of the CAA, as amended), the owner or operator shall determine during all periods in which a hood is operated for the purpose of capturing emissions from the affected facility subject to paragraph (b) of this section, either:
(1) Monitor and record the fan motor amperes at each damper position, and damper position consistent with paragraph (h)(5) of this section;
(2) install, calibrate, and maintain a monitoring device that continuously records the volumetric flow rate through each separately ducted hood; or
(3) install, calibrate, and maintain a monitoring device that continuously records the volumetric flow rate at the control device inlet and monitor and record the damper position consistent with paragraph (h)(5) of this section.
(4) Parameters monitored pursuant to this paragraph, excluding damper position, shall be recorded on a rolling averaging period not to exceed 15 minutes.
(5) The owner or operator may petition the Administrator or delegated authority for reestablishment of these parameters whenever the owner or operator can demonstrate to the Administrator's or delegated authority's satisfaction that the affected facility operating conditions upon which the parameters were previously established are no longer applicable. The values of the parameters as determined during the most recent demonstration of compliance shall be the appropriate operational range or control set point throughout each applicable period. Operation at values beyond the accepted operational range or control set point may be subject to the requirements of § 60.276b(c).
(d) Except as provided under paragraph (e) of this section, the owner or operator shall perform monthly operational status inspections of the
(e) The owner or operator may petition the Administrator or delegated authority to approve any alternative to either the monitoring requirements specified in paragraph (b) of this section or the monthly operational status inspections specified in paragraph (d) of this section if the alternative will provide a continuous record of operation of each emission capture system.
(f) Except as provided under § 60.273b(d), if emissions during any phase of the heat cycle are controlled by the use of a DEC system, the owner or operator shall install, calibrate, and maintain a monitoring device that allows the pressure in the free space inside the EAF to be monitored. The pressure shall be recorded as no greater than 15-minute integrated block averages. The monitoring device may be installed in any appropriate location in the EAF or DEC duct prior to the introduction of ambient air such that reproducible results will be obtained. The pressure monitoring device shall have an accuracy of ±5 mm of water gauge over its normal operating range and shall be calibrated according to the manufacturer's instructions.
(g) When the owner or operator of an EAF controlled by a DEC is required to demonstrate compliance with the standard under § 60.272b(a)(3), and at any other time the Administrator may require (under section 114 of the Clean Air Act, as amended), the pressure in the free space inside the furnace shall be determined during the melting and refining period(s) using the monitoring device required under paragraph (f) of this section. The owner or operator may petition the Administrator or delegated authority for reestablishment of the pressure whenever the owner or operator can demonstrate to the Administrator's or delegated authority's satisfaction that the EAF operating conditions upon which the pressures were previously established are no longer applicable. The pressure range or control setting during the most recent demonstration of compliance shall be maintained at all times when the EAF is operating in a melting and refining period. Continuous operation at pressures higher than the operational range or control setting may be considered by the Administrator or delegated authority to be unacceptable operation and maintenance of the affected facility.
(h) During any performance test required under § 60.8 or § 60.272b(d), and for any report thereof required by § 60.276b(f) of this subpart, or to determine compliance with § 60.272b(a)(3) of this subpart, the owner or operator shall monitor the following information for all heats covered by the test:
(1) Charge weights and materials, and tap weights and materials;
(2) Heat times, including start and stop times, and a log of process operation, including periods of no operation during testing and, if a furnace static pressure monitoring device is operated pursuant to paragraph (f) of this section, the pressure inside an EAF when DEC systems are used;
(3) Control device operation log;
(4) Continuous opacity monitor (COM) or EPA Method 9 data, or, as an alternative to EPA Method 9, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(5) All damper positions, no less frequently than performed in the latest melt shop opacity compliance test for a full heat, if selected as a method to demonstrate compliance under paragraph (b) of this section;
(6) Fan motor amperes at each damper position, if selected as a method to demonstrate compliance under paragraph (b) of this section;
(7) Volumetric air flow rate through each separately ducted hood, if selected as a method to demonstrate compliance under paragraph (b) of this section; and
(8) Static pressure at each separately ducted hood, if selected as a method to demonstrate compliance under paragraph (b) of this section.
(9) Parameters monitored pursuant to paragraphs (h)(6)-(8) of this section shall be recorded on a rolling averaging period not to exceed 15 minutes.
(a) During performance tests required in §§ 60.8 and 60.272b(d), the owner or operator shall not add gaseous diluents to the effluent gas stream after the fabric filter in any pressurized fabric filter collector, unless the amount of dilution is separately determined and considered in the determination of emissions.
(b) When emissions from any EAF(s) or AOD vessel(s) are combined with emissions from facilities not subject to the provisions of this subpart but controlled by a common capture system and control device, the owner or operator shall use any one of the following procedures during a performance test (see also § 60.276b(e)):
(1) Determine compliance using the combined emissions.
(2) Use a method that is acceptable to the Administrator or delegated authority and that compensates for the emissions from the facilities not subject to the provisions of this subpart.
(3) Any combination of the criteria of paragraphs (b)(1) and (2) of this section.
(c) When emission from any EAF(s) or AOD vessel(s) are combined with emissions from facilities not subject to the provisions of this subpart, compliance with § 60.272b(a)(3) will be based on emissions from only the affected facility(ies). The owner or operator may use operational knowledge to determine the facilities that are the sources, in whole or in part, of any emissions observed in demonstrations of compliance with § 60.272b(a)(3).
(d) In conducting the performance tests required in §§ 60.8 and 60.272b(d), the owner or operator shall use as reference methods and procedures the test methods in appendix A of this part or other methods and procedures as specified in this section, except as provided in § 60.8(b).
(e) The owner or operator shall determine compliance with the particulate matter standards in § 60.272b as follows:
(1) EPA Method 5 (and referenced EPA Methods 1, 2, 3, 3A, 3B, and 4) shall be used for negative-pressure fabric filters and other types of control devices and EPA Method 5D (and referenced EPA Method 5) shall be used for positive-pressure fabric filters to determine the particulate matter concentration and volumetric flow rate of the effluent gas. The sampling time and sample volume for each run shall be at least 4 hours and 4.50 dry standard cubic meter (160 dry standard cubic feet) and, when a single EAF or AOD vessel is sampled, the sampling time shall include an integral number of heats. The manual portions only (not the instrumental portion) of the voluntary consensus standard ANSI/ASME PTC 19.10-1981 (incorporated by reference, see § 60.17) are acceptable alternatives to EPA Methods 3, 3A, and 3B.
(2) When more than one control device serves the EAF(s) being tested, the concentration of particulate matter shall be determined using the following equation:
(3) EPA Method 9 or, as an alternative, ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(4) To demonstrate compliance with § 60.272b(a) (1), (2), and (3), the EPA Method 9 test runs shall be conducted concurrently with the particulate matter test runs, unless inclement weather interferes.
(f) To comply with § 60.274b(c), (f), (g), and (h), the owner or operator shall obtain the information required in these paragraphs during the particulate matter runs.
(g) Any control device subject to the provisions of the subpart shall be designed and constructed to allow measurement of emissions using applicable test methods and procedures.
(h) Where emissions from any EAF(s) or AOD vessel(s) are combined with emissions from facilities not subject to the provisions of this subpart, determinations of compliance with § 60.272b(a)(1), (2), and (3) will only be based upon emissions originating from the affected facility(ies), except if the combined emissions are controlled by a common capture system and control device, in which case the owner or operator may use any of the following procedures during an opacity performance test and during shop opacity observations:
(1) Base compliance on control of the combined emissions; or
(2) Utilize a method acceptable to the Administrator that compensates for the emissions from the facilities not subject to the provisions of this subpart.
(3) Any combination of the criteria of paragraphs (h)(1) and (2) of this section.
(i) Unless the presence of inclement weather makes concurrent testing infeasible, the owner or operator shall conduct concurrently the performance tests required under § 60.8 or § 60.272b(d) to demonstrate compliance with § 60.272b(a)(1), (2), and (3) of this subpart.
(a) Records of the measurements required in § 60.274b must be retained for at least 5 years following the date of the measurement.
(b) Each owner or operator shall submit a written report of exceedances of the control device opacity to the Administrator or delegated authority semi-annually. For the purposes of these reports, exceedances are defined as all 6-minute periods during which the average opacity of emissions from the control device is 3 percent or greater or, where the daily shop opacity visible emissions were measured according to EPA Method 22 and exceeded 0 seconds.
(c) Operation at a furnace static pressure that exceeds the operational range or control setting under § 60.274b(g), for owners and operators that elect to install a furnace static pressure monitoring device under 60.274b(f) or operation ranges or control settings outside of those established under § 60.274b(c) may be considered by the Administrator or delegated authority to be unacceptable operation and maintenance of the affected facility. Operation at such values shall be reported to the Administrator or delegated authority semiannually.
(d) The requirements of this section remain in force until and unless EPA, in delegating enforcement authority to a State under section 111(c) of the Act, approves reporting requirements or an alternative means of compliance surveillance adopted by such State. In that event, affected sources within the State will be relieved of the obligation to comply with this section, provided that they comply with the requirements established by the State.
(e) When the owner or operator of an EAF or AOD is required to demonstrate compliance with the standard under § 60.275b(b)(2) or a combination of (b)(1) and (b)(2) the owner or operator provide notice to the Administrator or delegated authority of the procedure(s) that will be used to determine compliance. Notification of the procedure(s) to be used must be postmarked at least 30 days prior to the performance test.
(f) For the purpose of this subpart, the owner or operator shall conduct the demonstration of compliance with § 60.272b(a) of this subpart and furnish the Administrator or delegated authority with a report of the results of the test according to paragraph (i) of this section. This report shall include the following information:
(1) Facility name and address;
(2) Plant representative;
(3) Make and model of the control device, and continuous opacity monitoring equipment, if applicable;
(4) Flow diagram of process and emission capture system including other equipment or process(es) ducted to the same control device;
(5) Rated (design) capacity of process equipment;
(6) Those data required under § 60.274b(h) of this subpart;
(i) List of charge and tap weights and materials;
(ii) Heat times and process log;
(iii) Control device operation log; and
(iv) Continuous opacity monitor or EPA Method 9 data, or, as an alternative to EPA Method 9, according to ASTM D7520-16 (incorporated by reference, see § 60.17), with the caveats described under
(7) Test dates and test times;
(8) Test company;
(9) Test company representative;
(10) Test observers from any outside agency;
(11) Description of test methodology used, including any deviation from standard reference methods;
(12) Schematic of sampling location;
(13) Number of sampling points;
(14) Description of sampling equipment;
(15) Listing of sampling equipment calibrations and procedures;
(16) Field and laboratory data sheets;
(17) Description of sample recovery procedures;
(18) Sampling equipment leak check results;
(19) Description of quality assurance procedures;
(20) Description of analytical procedures;
(21) Notation of sample blank corrections; and
(22) Sample emission calculations.
(g) The owner or operator shall maintain records of all shop opacity observations made in accordance with § 60.273b(d). All shop opacity observations in excess of the emission limit specified in § 60.272b(a)(3) of this subpart shall indicate a period of excess emissions and shall be reported to the Administrator or delegated authority semi-annually, according to § 60.7(c) and submitted according to paragraph (j) of this section. In addition to the information required at § 60.7(c), the report shall include the following information:
(1) The company name and address of the affected facility.
(2) An identification of each affected facility being included in the report.
(3) Beginning and ending dates of the reporting period.
(4) A certification by a certifying official of truth, accuracy, and completeness. This certification shall state that, based on information and belief formed after reasonable inquiry, the statements and information in the document are true, accurate, and complete.
(h) The owner or operator shall maintain the following records for each bag leak detection system required under § 60.273b(e):
(1) Records of the bag leak detection system output;
(2) Records of bag leak detection system adjustments, including the date and time of the adjustment, the initial bag leak detection system settings, and the final bag leak detection system settings; and
(3) An identification of the date and time of all bag leak detection system alarms, the time that procedures to determine the cause of the alarm were initiated, if procedures were initiated within 1 hour of the alarm, the cause of the alarm, an explanation of the actions taken, the date and time the cause of the alarm was alleviated, and if the alarm was alleviated within 24 hours of the alarm.
(i) Within 60 days after the date of completing each performance test or demonstration of compliance required by this subpart, you must submit the results of the performance test following the procedures specified in paragraphs (i)(1) through (3) of this section.
(1) Data collected using test methods supported by the EPA's Electronic Reporting Tool (ERT) as listed on the EPA's ERT website (
(2) Data collected using test methods that are not supported by the EPA's ERT as listed on the EPA's ERT website at the time of the test. The results of the performance test must be included as an attachment in the ERT or an alternate electronic file consistent with the XML schema listed on the EPA's ERT website. Submit the ERT generated package or alternative file to the EPA via CEDRI.
(3) Confidential business information (CBI). Do not use CEDRI to submit information you claim as CBI. Anything submitted using CEDRI cannot later be claimed CBI. Although we do not expect persons to assert a claim of CBI, if you wish to assert a CBI claim for some of the information submitted under paragraph (i)(1) or (2) of this section, you must submit a complete file, including information claimed to be CBI, to the EPA. The file must be generated using the EPA's ERT or an alternate electronic file consistent with the XML schema listed on the EPA's ERT website. The preferred method to submit CBI is for it to be transmitted electronically using email attachments, File Transfer Protocol (FTP), or other online file sharing services (
(j) You must submit a report of excess emissions and monitoring systems performance report according to § 60.7(c) to the Administrator semiannually. Submit all reports to the EPA via CEDRI, which can be accessed through the EPA's CDX (
(k) If you are required to electronically submit a report through CEDRI in the EPA's CDX, you may assert a claim of EPA system outage for failure to timely comply with that reporting requirement. To assert a claim of EPA system outage, you must meet the requirements outlined in paragraphs (k)(1) through (7) of this section.
(1) You must have been or will be precluded from accessing CEDRI and submitting a required report within the time prescribed due to an outage of either the EPA's CEDRI or CDX systems.
(2) The outage must have occurred within the period of time beginning five business days prior to the date that the submission is due.
(3) The outage may be planned or unplanned.
(4) You must submit notification to the Administrator in writing as soon as possible following the date you first knew, or through due diligence should have known, that the event may cause or has caused a delay in reporting.
(5) You must provide to the Administrator a written description identifying:
(i) The date(s) and time(s) when CDX or CEDRI was accessed and the system was unavailable;
(ii) A rationale for attributing the delay in reporting beyond the regulatory deadline to EPA system outage;
(iii) A description of measures taken or to be taken to minimize the delay in reporting; and
(iv) The date by which you propose to report, or if you have already met the
(6) The decision to accept the claim of EPA system outage and allow an extension to the reporting deadline is solely within the discretion of the Administrator.
(7) In any circumstance, the report must be submitted electronically as soon as possible after the outage is resolved.
(l) If you are required to electronically submit a report through CEDRI in the EPA's CDX, you may assert a claim of force majeure for failure to timely comply with that reporting requirement. To assert a claim of force majeure, you must meet the requirements outlined in paragraphs (l)(1) through (5) of this section.
(1) You may submit a claim if a force majeure event is about to occur, occurs, or has occurred or there are lingering effects from such an event within the period of time beginning five business days prior to the date the submission is due. For the purposes of this section, a force majeure event is defined as an event that will be or has been caused by circumstances beyond the control of the affected facility, its contractors, or any entity controlled by the affected facility that prevents you from complying with the requirement to submit a report electronically within the time period prescribed. Examples of such events are acts of nature (
(2) You must submit notification to the Administrator in writing as soon as possible following the date you first knew, or through due diligence should have known, that the event may cause or has caused a delay in reporting.
(3) You must provide to the Administrator:
(i) A written description of the force majeure event;
(ii) A rationale for attributing the delay in reporting beyond the regulatory deadline to the force majeure event;
(iii) A description of measures taken or to be taken to minimize the delay in reporting; and
(iv) The date by which you propose to report, or if you have already met the reporting requirement at the time of the notification, the date you reported.
(4) The decision to accept the claim of force majeure and allow an extension to the reporting deadline is solely within the discretion of the Administrator.
(5) In any circumstance, the reporting must occur as soon as possible after the force majeure event occurs.
(m) Any records required to be maintained by this subpart that are submitted electronically via the EPA's CEDRI may be maintained in electronic format. This ability to maintain electronic copies does not affect the requirement for facilities to make records, data, and reports available upon request to a delegated air agency or the EPA as part of an on-site compliance evaluation.