Notices. Notice of Application for Exemption under the Investment Advisers Act of 1940 (“Advisers Act” or “Act”)

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BILLING CODE 7901-05-M SECURITIES AND EXCHANGE COMMISSION [Release No. IA-2469/803-181] Greenhouse Associates, LLC and Superior Partners, LP; Notice of Application December 28, 2005. AGENCY: Securities and Exchange Commission (“SEC”). ACTION: Notice of Application for Exemption under the Investment Advisers Act of 1940 (“Advisers Act” or “Act”). Applicant: Greenhouse Associates, LLC (“Greenhouse”) and Superior Partners LP (“Superior”) (collectively, “Applicants”). Relevant Advisers Act Sections:

Exemption requested under section 205(e) of the Advisers Act from section 205(a)(1) of that Act. Summary of Application: Applicants request an order under section 205(e) of the Advisers Act to permit registered investment advisers to charge each of the Applicants performance-based advisory fees notwithstanding the prohibition set forth in section 205(a)(1) of the Act. Filing Dates: The application was filed on February 16, 2005, and amended on December 8, 2005. Hearing or Notification of Hearing:

An order granting the application will be issued unless the SEC orders a hearing. Interested persons may request a hearing by writing to the SEC's Secretary and serving each of the Applicants with a copy of the request, either personally or by mail. Hearing requests should be received by the SEC by 5:30 p.m., on January 20, 2006, and should be accompanied by proof of service on each of the Applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested.

Persons may request notification of a hearing by writing to the SEC's Secretary. ADDRESSES: SEC: Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. Applicants:

(1)Greenhouse: Greenhouse Associates, LLC, c/o Dudley & Shanley, LLC, 130 Maple Avenue, Suite EB-2, Red Bank, NJ 07701-1735;

(2)Superior: Superior Partners, LP, c/o Dudley & Shanley, LLC, 130 Maple Avenue, Suite EB-2, Red Bank, NJ 07701-1735. FOR FURTHER INFORMATION CONTACT: Jamey Basham, Branch Chief, Division of Investment Management, Office of Investment Adviser Regulation, at

(202)551-6787. SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained for a fee at the SEC's Public Reference Branch. Applicants' Representations 1. Greenhouse is a Delaware limited liability company operating as a private investment company exempt from registration under section 3(c)(1) of the Investment Company Act of 1940 (“Investment Company Act”). 1 Greenhouse represents that it serves in essence as a family investment vehicle to manage, facilitate, and simplify the investments of family members and their trusts and custodial arrangements. The twelve current members of Greenhouse (“Current Greenhouse Members”) are

(i)Henry C. Dudley (“Mr. Dudley”);

(ii)Mr. Dudley's mother and two sisters;

(iii)a trust for the benefit of Mr. Dudley's mother;

(iv)six custodial arrangements (under the Uniform Transfers to Minors Act) for the exclusive benefit of one or more of the lineal descendants of Mr. Dudley or his sisters; and

(v)Frank E. Shanley (“Mr. Shanley”). Greenhouse represents that it may admit new members in the future, but that future members (“Future Greenhouse Members”) will be limited to

(a)lineal descendants of Mr. Dudley's mother (including Mr. Dudley and his two sisters) and spouses of such descendents;

(b)lineal descendants of Mr. Shanley and spouses of such descendents;

(c)trusts and custodial arrangements exclusively for the benefit of family members described in

(a)and (b);

(d)partnerships or other entities owned exclusively by family members described in

(a)and

(b)or the entities described in (c); and

(v)charitable foundations and organizations controlled exclusively by family members described in

(a)and

(b)or the entities described in (c). 1 15 U.S.C. 80a-3(c)(1). Section 3(c)(1) generally excepts from the definition of investment company under the Investment Company Act any issuer whose outstanding securities are beneficially owned by not more than 100 persons and which is not making, and does not presently propose to make, a public offering of its securities. 2. Mr. Dudley and Mr. Shanley are the sole Managers of Greenhouse. Greenhouse has no executives or employees. Greenhouse represents that Mr. Dudley and Mr. Shanley are solely responsible for all investment decisions for the Greenhouse portfolio, as well as all aspects of the business and administration of Greenhouse. Mr. Dudley and Mr. Shanley have retained, under this authority, their investment firm, Dudley & Shanley, LLC (D&S), to perform these functions. Mr. Dudley and Mr. Shanley are the sole co-owners and principals of D&S, perform these functions personally, and have not delegated them to other D&S employees, with the exception that other D&S employees assist them with certain ministerial duties. 3. Greenhouse pays D&S an annual management fee equal to 0.5% of Greenhouse's net asset value. Greenhouse represents that the management fee is intended to reimburse D&S' costs incurred in rendering services to Greenhouse and not to provide D&S, Mr. Dudley or Mr. Shanley with a profit. Greenhouse does not otherwise reimburse D&S, Mr. Dudley or Mr. Shanley for their expenses incurred in connection with managing the fund. 4. Mr. Dudley and Mr. Shanley are also entitled to performance-based advisory compensation from Greenhouse, consisting of an annual performance reallocation to their membership interests in Greenhouse. This performance reallocation equals ten percent of all Greenhouse members' net gain in excess of a “high water mark” (that is, the highest level of cumulative net gain for preceding periods). However, in making this performance reallocation, Greenhouse excludes its members that are not “qualified clients” as defined in rule 205-3 under the Advisers Act, 2 so that such non-qualified clients are not charged performance-based compensation. 2 17 CFR 275.205-3. 5. Greenhouse states that it currently invests in other private investment companies whose investment advisers are not affiliated in any way with either Mr. Dudley or Mr. Shanley (“Greenhouse Third Party Funds”), and that the managers of some of these Greenhouse Third Party Funds charge their investors performance-based compensation. Greenhouse also states that it may in the future identify other desirable Greenhouse Third Party Funds in which Greenhouse wishes to invest, and which are managed by investment advisers who charge performance-based compensation. Greenhouse believes that many of the investment advisers managing these Greenhouse Third Party Funds will soon become subject to the performance-based compensation restrictions of section 205(a)(1) of the Advisers Act, 3 and will accordingly look to Advisers Act rule 205-3 to continue charging performance-based compensation, as discussed below. Greenhouse therefore seeks relief that will allow it to invest in Greenhouse Third Party Funds notwithstanding the fact that some of Greenhouse's members are not “qualified clients” as required by rule 205-3. 3 15 U.S.C. 80b-5(a)(1). 6. Mr. Dudley and Mr. Shanley are both “qualified clients” for purposes of rule 205-3, as are four other Current Greenhouse Members. The six other Current Greenhouse Members do not meet the definition of a qualified client. Greenhouse may admit Future Greenhouse Members that may not be qualified clients. 7. Superior is a Delaware limited partnership operating as a private investment company exempt from registration under section 3(c)(1) of the Investment Company Act. Superior was formed in 1978 by descendents of Chester A. Congdon, Mr. Dudley's great-grandfather, to manage for their benefit assets distributed to them from the Congdon estate. The current partners of Superior (“Current Superior Partners”) are all

(i)Lineal descendents of Chester A. Congdon and spouses of such descendents;

(ii)trusts exclusively for the benefit of lineal descendants of Chester A. Congdon; and

(iii)entities owned exclusively by lineal descendents of Chester A. Congdon and their spouses. Superior represents that it may admit new partners in the future, but that future partners (“Future Superior Partners”) will be limited to

(a)lineal descendents of Chester A. Congdon and spouses and adopted children of such descendents;

(b)personal representatives (such as executors) of family members described in (a);

(c)trusts and custodial arrangements exclusively for the benefit of family members described in (a); and

(d)entities owned exclusively by or established for the exclusive benefit of any of the foregoing. 8. The Current Superior Partners include four Managing General Partners who manage Superior: Mr. Dudley, Thomas E. Congdon, John P. Congdon, and Charles W. D'Autremont. Superior also has 13 other general partners; however, their status as general partners relates to historical family considerations, and no general partners other than the Managing General Partners participate in the administration or management of the partnership. Superior has no executives or employees. Superior's Limited Partnership Agreement authorizes the Managing General Partners to retain an investment manager and administrative agent, and the Managing General Partners have delegated their management responsibilities to D&S pursuant to this authority. Mr. Dudley and Mr. Shanley, as the sole co-owners and principals of D&S, perform all aspects of the administration and investment management of Superior personally and have not delegated them to other D&S employees, with the exception that other D&S employees assist them with certain ministerial duties. Mr. Dudley and Mr. Shanley consult with individual Managing General Partners regularly and meet with them as a group from time to time. 9. Superior pays D&S an annual management fee equal to 0.5% of Superior's net asset value, as well as an administrative services fee equal to 0.1% of such net asset value. Superior represents that these fees are intended to reimburse D&S' costs incurred in rendering services to Superior and not to provide D&S, Mr. Dudley or Mr. Shanley with a profit. Superior does not otherwise reimburse D&S, Mr. Dudley or Mr. Shanley for their expenses incurred in connection with managing Superior. Superior does not compensate its Managing General Partners and does not reimburse the Managing General Partners for any expenses incurred with respect to their responsibilities towards Superior, with the exception of travel expenses to any meetings of the Managing General Partners. Superior pays no performance-related fees to D&S, Mr. Dudley, Mr. Shanley, or the Managing General Partners. 10. Superior states that it currently invests in other private investment companies whose investment advisers are not affiliated in any way with either Mr. Dudley or Mr. Shanley, or with the Managing General Partners (“Superior Third Party Funds”), and that the managers of some of these Superior Third Party Funds charge their investors performance-based compensation. Superior also states that it may in the future identify other desirable Superior Third Party Funds in which Superior wishes to invest, and which are managed by investment advisers who charge performance-based compensation. Superior believes that many of the investment advisers managing these Superior Third Party Funds will soon become subject to the performance-based compensation restrictions of section 205(a)(1) of the Advisers Act, and will accordingly look to Advisers Act rule 205-3 to continue charging performance-based compensation, as discussed below. Superior therefore seeks relief that will allow it to invest in Superior Third Party Funds notwithstanding the fact that some of Superior's partners are not “qualified clients” as required by rule 205-3. 11. Superior's four Managing General Partners are all “qualified clients” for purposes of rule 205-3, as are 32 other Current Superior Partners. The 23 other Current Superior Partners do not meet the definition of a qualified client. Superior may admit Future Superior Partners that may not be qualified clients. Applicants' Legal Analysis 1. Section 205(a)(1) of the Advisers Act generally prohibits a registered investment adviser, unless exempt from registration pursuant to section 203(b) of the Act, from entering into, extending, renewing, or performing under any investment advisory contract that provides for compensation based upon “a share of capital gains upon or capital appreciation of the funds or any portion of the funds of the client,” commonly referred to as performance-based compensation or a performance fee. 2. Rule 205-3 under the Act provides an exemption from the prohibition in section 205(a)(1), provided each client entering into an investment advisory contract that provides for performance-based compensation is a “qualified client.” Under rule 205-3(b), each equity owner of a “private investment company” is considered a client for purposes of rule 205-3(a). 4 Applicants assert that Greenhouse and Superior are private investment companies. 4 Under rule 205-3(d)(3), a private investment company is a company that would be defined as an investment company under section 3(a) of the Investment Company Act of 1940 but for the exception provided from that definition by section 3(c)(1) of such Act. 3. Because a number of the Current Greenhouse Members and Current Superior Partners are not qualified clients, Applicants may not be treated as meeting the requirements of rule 205-3(a). 4. Applicants request an order under section 205(e) of the Advisers Act granting an exemption from section 205(a)(1) of the Act so as to permit registered investment advisers to charge Applicants performance-related compensation. Applicants ask that the relief requested be applicable to Current Greenhouse Members and Current Superior Partners that are not qualified clients, as well as to Future Greenhouse Members and Future Superior Partners that are not qualified clients. 5. Section 205(e) of the Advisers Act provides that the Commission, by order upon application, may exempt any person, or any class or classes of persons, from section 205(a)(1) of the Act, if and to the extent that the exemption relates to an investment advisory contract with any person that the Commission determines does not need the protection of section 205(a)(1), on the basis of such factors as financial sophistication, net worth, knowledge of and experience in financial matters, and such other factors as the Commission determines are consistent with section 205. 6. Applicants assert that exemptive relief to permit Greenhouse and Superior to be charged performance-based compensation is appropriate and consistent with the purposes of 205(a)(1) of the Advisers Act. Applicants assert that the request for relief complies with the factors specified in section 205(e) of the Act. Applicants state that Mr. Dudley and Mr. Shanley, the investment decision-makers for Applicants, are qualified clients meeting the net worth requirement of rule 205-3(d)(1)(ii)(A) under the Act. Superior further asserts that each of its Managing General Partners with whom Mr. Dudley and Mr. Shanley periodically consult is a qualified client. Applicants assert that Mr. Dudley and Mr. Shanley are financially sophisticated, with substantial knowledge of and long experience in financial matters, (particularly those pertinent to investing in private investment companies), and are accordingly fully able to assess the potential risks of performance-related compensation. Superior further asserts that each of its Managing General Partners with whom Mr. Dudley and Mr. Shanley periodically consult is equally financially sophisticated, with similar knowledge and expertise, and are similarly able to asses the risk of performance-related compensation. 7. Applicants further assert that Mr. Dudley and each of Superior's Managing General Partners with whom Mr. Dudley and Mr. Shanley periodically consult have strong familial relationships with Current Greenhouse Members, Current Superior Partners, Future Greenhouse Members, and Future Superior Partners that are not qualified clients (or with the beneficiaries of the trust and custodial arrangements that are or will be such members or partners). Applicants also assert that Mr. Shanley has had a long business and social relationship with many members of the Dudley and Congdon families, and is a trustee of a number of trusts established for the Dudley family. In addition, applicants assert that Mr. Dudley, Mr. Shanley, and each of Superior's Managing General Partners with whom Mr. Dudley and Mr. Shanley periodically consult have made substantial personal investments in Applicants. Applicants assert these factors will cause Mr. Dudley, Mr. Shanley, and each of Superior's Managing General Partners with whom Mr. Dudley and Mr. Shanley periodically consult to act in the best interests of Applicants' members and partners. 8. Applicants further assert with respect to trusts and custodial arrangements that are Current Greenhouse Members and Current Superior Partners and are not qualified clients, the trustees and custodians are each qualified clients and, in many cases, are parents or other close family relations of the beneficiaries of those trusts and custodial arrangements who themselves have substantial personal investments in Applicants. For the SEC, by the Division of Investment Management, under delegated authority. Nancy M. Morris, Secretary. [FR Doc. E5-8246 Filed 1-3-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53027; File No. SR-NASD-2005-117] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Order Approving Proposed Rule Change and Amendment No. 1 Thereto Seeking Permanent Approval of Rules Concerning Bond Mutual Fund Volatility Ratings Prior to Expiration of Pilot December 27, 2005. I. Introduction On September 28, 2005 and October 24, 2005 (Amendment No. 1), 1 the National Association of Securities Dealers, Inc. (“NASD”) filed with the Securities and Exchange Commission (“SEC” or “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 2 and Rule 19b-4 thereunder, 3 a proposed rule change seeking permanent approval of NASD Rule 2210(c)(3) and Interpretive Material 2210-5 (collectively, the “Rule”) concerning bond mutual fund volatility ratings prior to the expiration of the pilot on December 29, 2005. The Commission published the proposed rule change for comment in the **Federal Register** on November 7, 2005. 4 The Commission received one comment letter on the proposal. 5 On December 16, 2005, NASD filed a response to the comment letter. 6 This order approves the proposed rule change, as amended. 1 Amendment No. 1 clarified the date of expiration of the pilot program concerning bond mutual fund volatility ratings. 2 15 U.S.C. 78s(b)(1). 3 17 CFR 240.19b-4. 4 *See* Securities Exchange Act Release No. 52709 (November 1, 2005), 70 FR 67509 (November 7, 2005) (the “Notice”). 5 *See* letter from Amy B.R. Lancellotta, Senior Counsel, Investment Company Institute (“ICI”) to Jonathan G. Katz, Secretary, SEC, dated November 28, 2005 (the “ICI Letter”). 6 *See* letter from Joseph P. Savage, Associate Vice President, Investment Companies Regulation, NASD, to Katherine A. England, Assistant Director, Division of Market Regulation, SEC, dated December 16, 2005 (the “NASD Response”). II. Description of the Proposed Rule Change Background and Description of NASD's Rules on Bond Mutual Fund Volatility Ratings On February 29, 2000, the SEC approved on a pilot basis NASD Interpretive Material 2210-5, which permits members and their associated persons to include bond fund volatility ratings in supplemental sales literature (mutual fund sales material that is accompanied or preceded by a fund prospectus). 7 At that time, the SEC also approved as a pilot NASD Rule 2210(c)(3), which sets forth the filing requirements and review procedures applicable to sales literature containing bond mutual fund volatility ratings. Previously, NASD staff interpreted NASD rules to prohibit the use of bond fund volatility ratings in sales material. 7 *See* Securities Exchange Act Release No. 42476 (February 29, 2000); 65 FR 12305 (March 8, 2000) (SR-NASD-97-89). IM-2210-5 permits the use of bond fund volatility ratings only in supplemental sales literature and only if certain conditions are met: • The word “risk” may not be used to describe the rating. • The rating must be the most recent available and be current to the most recent calendar quarter ended prior to use. • The rating must be based exclusively on objective, quantifiable factors. • The entity issuing the rating must provide to investors through a toll-free telephone number or web site (or both) a detailed disclosure on its rating methodology. • A disclosure statement containing all of the information required by the Rule must accompany the rating. The statement must include such information as the name of the entity issuing the rating, the most current rating and the date it was issued, and a description of the rating in narrative form containing certain specified disclosures. Rule 2210(c)(3) requires members to file for approval with NASD's Advertising Regulation Department (“Department”), at least 10 days prior to use, bond mutual fund sales literature that includes or incorporates volatility ratings. If the Department requests changes to the material, the material must be withheld from publication or circulation until the requested changes have been made or the material has been re-filed and approved. IM-2210-5 and Rule 2210(c)(3) initially were approved on an 18-month pilot basis that was scheduled to expire on August 31, 2001. 8 NASD subsequently renewed the pilot several times, most recently with a proposed rule change that was effective upon filing and extended the pilot provisions until December 29, 2005. 9 8 *Id.* 9 *See* Securities Exchange Act Release No. 52372 (Aug. 31, 2005); 70 FR 53405 (Sept. 8, 2005) (SR-NASD-2005-104); Securities Exchange Act Release No. 48353 (Aug. 15, 2003); 68 FR 50568 (Aug. 21, 2003) (SR-NASD-2003-126); NASD Notice to Members 03-48 (Aug. 2003); Securities Exchange Act Release No. 44737 (August 22, 2001); 66 FR 45350 (August 28, 2001) (SR-NASD-2001-49); NASD Notice to Members 01-58 (Sept. 2001). Proposed Rule Change to Make Permanent IM-2110-5 and Rule 2210(c)(3) As indicated in the SEC's original order approving IM-2210-5 and Rule 2210(c)(3) on a pilot basis and the NASD Notice to Members announcing such approval, 10 NASD requested the 18-month pilot period to consider whether: 10 *See* Securities Exchange Act Release No. 42476 (February 29, 2000); 65 FR 12305 (March 8, 2000) (SR-NASD-97-89); NASD Notice to Members 00-23 (April 2000). • The Rule has facilitated the dissemination of useful, understandable information to investors; • The Rule has prevented the dissemination of inappropriate or misleading information by members and associated persons; • Additional guidance concerning the use of certain terminology may be necessary; • The Rule should apply to in-house ratings; • The Rule should apply to all investment companies; and • Additional standards or guidance is needed to prevent investor confusion or minimize excessive variability among ratings of similar portfolios. Due to the small number of bond volatility ratings filings received during the Rule's initial 18-month pilot, NASD extended the pilot to accumulate more data with which to evaluate the program. Ultimately, during the entire period from February 2000, when the Rule was first approved, until September 2005 (when NASD initially filed this proposed rule change with the Commission), NASD received a total of 47 submissions from seven NASD members. In general, the filings of sales material that contained bond fund volatility ratings have met the Rule's requirements. Based on its findings during this period, NASD has concluded that the Rule's provisions are appropriate and do not require further amendment before being made permanent. In particular, NASD believes that the Rule has facilitated the dissemination of useful and understandable information to investors and has prevented the dissemination of inappropriate or misleading information. In this regard, virtually all of the filings NASD has received under the Rule have met the Rule's requirements, and NASD is not aware of any investor complaints concerning sales material that contains volatility ratings. The level of member compliance with the Rule also suggests that members do not require additional guidance concerning the use of certain terminology in the Rule. Similarly, NASD is not aware of any concerns that investors may be confused or that there may be excessive variability among ratings or similar portfolios. NASD also has examined the issue of whether the Rule should apply to in-house ratings. At the time the Rule was approved, NASD observed that the Rule should not apply to in-house ratings on the grounds that they are not procured for a fee, are used primarily by fund investors as an aid in distinguishing between risk levels within a family of funds, and may be calculated using different methods from those used in calculating volatility ratings. 11 NASD continues to believe that those are persuasive reasons to not apply the Rule to in-house ratings. NASD believes that in-house ratings do not raise the same concerns as third-party ratings, and thus do not merit application of the bond fund volatility ratings rule. 11 *See* Securities Exchange Act Release No. 42476 (February 29, 2000); 65 FR 12305 (March 8, 2000) (SR-NASD-97-89). NASD also believes that it is unnecessary at this time to apply the Rule to other types of investment companies, such as unit investment trusts. At no time throughout the extended pilot period has a member requested that the Rule apply to such material, and NASD is not aware of third-party volatility ratings that are being used to assess other types of investment companies. Accordingly, NASD sees no need to expand the Rule's scope in this manner. NASD believes that the Rule strikes an appropriate balance between the desire of some funds to advertise volatility ratings and the need to include appropriate disclosures related to those ratings in sales material. Accordingly, NASD believes that the Commission should approve the Rule, as is, on a permanent basis. IM-2210-5(b)(2) requires supplemental sales literature that includes bond fund volatility ratings to present the most recently available rating that “reflects information that, at a minimum, is current to the most recently completed calendar quarter ended prior to use.” At the time IM-2210-5 was adopted, this standard mirrored the timeliness standard for mutual fund performance advertising under Rule 482 under the Securities Act of 1933. However, in 2003, the SEC amended Rule 482 to require mutual fund performance advertising to show performance that is current to the most recent calendar quarter ended prior to submission of an advertisement for publication, and to indicate where the reader may obtain performance that is current to the most recent month ended seven business days prior to use through a toll-free (or collect) telephone number or web site, or to present performance that meets this most recent month-end standard. 12 12 Rule 482(g) under the Securities Act of 1933. NASD understands that rating agencies typically monitor bond funds on a monthly basis, but that it is quite rare for such agencies to revise a volatility rating on a month-to-month basis. Accordingly, NASD does not believe that it is necessary to require that volatility ratings be current as of the most recent month end given that, among other things, unlike fund performance, such ratings do not frequently change once they are issued. III. Summary of Comments Received and NASD Response The Commission received one comment letter from ICI on the proposal and a response to the comment letter by NASD. The ICI Letter generally expressed reservations about the use of bond mutual fund volatility ratings in supplemental sales literature. 13 The ICI Letter also suggested that if the pilot program was approved on a permanent basis that:

(i)All of the critical investor protections of the original pilot program should remain intact,

(ii)the use of a single symbol, number or letter to describe a volatility rating should be prohibited and

(iii)the timeliness requirements of IM-2210-5(b)(2) should be modified to mirror the requirements of Rule 482 under the Securities Act of 1933. 14 13 ICI Letter, *supra* note 5, at 1. 14 *Id.* at 1-2. In response to ICI's general reservations regarding the use of bond mutual fund volatility ratings the NASD Response stated that “during the five and one-half years that the [bond mutual fund volatility rules] have been in effect, NASD has found no evidence that the use of volatility ratings in fund sales literature has harmed investors.” 15 NASD also noted that it “has not proposed to eliminate any of the disclosure, filing or other investor protection requirements that were contained in the original pilot rule.” 16 15 NASD Response, *supra* note 6, at 2. 16 *Id.* In addition, NASD expressed doubt that use of a single symbol, number or letter to describe volatility ratings harms investors, stating “NASD fails to see how allowing the use of symbols, numbers and letters to describe a fund's volatility rating is any more harmful to investors than allowing symbols, numbers and letters to describe a fund's performance or performance ranking.” 17 17 *Id.* at 3. Furthermore, NASD disagreed with ICI's recommendation to modify the timeliness requirements of IM-2210-5(b)(2). 18 NASD indicated that “it is quite rare for [fund rating] agencies to revise a volatility rating on a month-to-month basis.” Accordingly, NASD expressed its belief that it is not necessary “to require that volatility ratings be current as of the most recent month end given that such ratings rarely change once they are issued.” 19 NASD, however, cautioned its members that a “member may not distribute supplemental sales literature containing a bond fund volatility rating if the member knows or has reason to know that the rating is false or misleading, even if the rating was current as of the most recent calendar quarter end.” 20 18 *Id.* 19 *Id.* 20 *Id. See also* NASD Rule 2210(d)(1)(B). IV. Discussion and Findings After careful review, the Commission finds that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act, which requires, among other things, NASD rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. The Commission believes that making IM-2210-5 and Rule 2210(c)(3) effective on a permanent basis will protect investors and the public interest by permitting NASD members to provide investors with useful information in a manner designed to prevent dissemination of inappropriate or misleading information. V. Conclusions It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 21 that the proposed rule change, as amended (SR-NASD-2005-117), be, and it hereby is, approved. 21 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 22 22 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E5-8228 Filed 1-3-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53026; File No. SR-NASD-2005-152] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Pilot Relating to Manning Price-Improvement Standards for Decimals December 27, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on December 23, 2005, the National Association of Securities Dealers, Inc. (“NASD”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by NASD. NASD filed this proposal pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 therefore making the proposed rule change effective immediately upon filing. NASD intends for this rule change to become operative on January 1, 2006. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NASD is proposing to extend through June 30, 2006, the current pilot price-improvement standards for decimalized securities contained in NASD Interpretive Material 2110-2—Trading Ahead of Customer Limit Order (“Manning Rule” or “Manning”). There are no proposed changes to the rule text. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NASD 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. NASD has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose NASD's Manning Rule requires NASD member firms to provide a minimum level of price improvement to incoming orders in NMS and SmallCap securities if the firm chooses to trade as principal with those incoming orders at prices superior to customer limit orders they currently hold. If a firm fails to provide the minimum level of price improvement to the incoming order, the firm must execute its held customer limit orders. Generally, if a firm fails to provide the requisite amount of price improvement and also fails to execute its held customer limit orders, it is in violation of the Manning Rule. On April 6, 2001, 5 the Commission approved, on a pilot basis, price-improvement standards for decimalized securities contained in Manning, which added the following language to IM-2110-2: 5 *See* Securities Exchange Act Release No. 44165 (April 6, 2001), 66 FR 19268 (April 13, 2001). For Nasdaq securities authorized for trading in decimals pursuant to the Decimals Implementation Plan For the Equities and Options Markets, the minimum amount of price improvement necessary in order for a market maker to execute an incoming order on a proprietary basis in a security trading in decimals when holding an unexecuted limit order in that same security, and not be required to execute the held limit order, is as follows:

(1)For customer limit orders priced at or inside the best inside market displayed in Nasdaq, the minimum amount of price improvement required is $0.01; and

(2)For customer limit orders priced outside the best inside market displayed in Nasdaq, the market maker must price improve the incoming order by executing the incoming order at a price at least equal to the next superior minimum quotation increment in Nasdaq (currently $0.01). 6 6 Pursuant to the terms of the Decimals Implementation Plan for the Equities and Options Markets, the minimum quotation increment for Nasdaq securities (both National Market and SmallCap) at the outset of decimal pricing is $0.01. As such, Nasdaq displays priced quotations to two places beyond the decimal point (to the penny). Quotations submitted to Nasdaq that do not meet this standard are rounded to the nearest minimum quotation increment (namely, $0.01), specifically, rounded down for buy orders and rounded up for sell orders. *See* Securities Exchange Act Release No. 43876 (January 23, 2001), 66 FR 8251 (January 30, 2001). Since approval, these standards continue to operate on a pilot basis which terminates on December 31, 2005. 7 After consultation with Commission staff, NASD has determined to seek an extension of its current Manning pilot until June 30, 2006. NASD believes that such an extension provides for an appropriate continuation of the current Manning price-improvement standard while the Commission continues to analyze the issues related to customer limit order protection in a decimalized environment. NASD is not proposing any other changes to the pilot at this time. NASD proposes to make the proposed rule change operative on January 1, 2006. 7 *See* Securities Exchange Act Release No. 51953 (June 30, 2005), 70 FR 39839 (July 11, 2005). 2. Statutory Basis NASD believes that the proposed rule change is consistent with the provisions of Section 15A of the Act, 8 in general, and with Section 15A(b)(6) of the Act, 9 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. NASD believes that the proposed rule change will improve treatment of customer limit orders and enhance the integrity of the market. 8 15 U.S.C. 78o-3. 9 15 U.S.C. 78o-3(b)(6). B. Self-Regulatory Organization's Statement on Burden on Competition NASD does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action This proposal has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and subparagraph (f)(6) of Rule 19b-4 thereunder 11 because the proposal:

(1)Does not significantly affect the protection of investors or the public interest,

(2)does not impose any significant burden on competition, and

(3)by its terms does not become operative for 30 days after the date of this filing, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest. 12 NASD has requested that the Commission waive the 30-day operative delay and designate the proposed rule change effective immediately. NASD intends for the rule to become operative on January 1, 2006. 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b-4(f)(6). 12 Pursuant to Rule 19b-4(f)(6)(iii) of the Act, a proposed rule change does not become operative for 30 days after the date of its filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, provided that the self-regulatory organization has given the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. NASD complied with the five day pre-filing requirement. The Commission hereby grants the request. 13 The Commission believes that such waiver is consistent with the protection of investors and the public interest because it will allow the protection of customer limit orders provided by the pilot to continue without interruption. 13 For purposes only of accelerating the operative date of the proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate 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. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File Number SR-NASD-2005-152 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303. All submissions should refer to File Number SR-NASD-2005-152. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of NASD. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to the File Number SR-NASD-2005-152 and should be submitted on or before January 25, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E5-8229 Filed 1-3-06; 8:45 am] BILLING CODE 8010-01-P SMALL BUSINESS ADMINISTRATION [License No. 09/79-0456] Horizon Ventures Fund II, L.P.; Notice Seeking Exemption Under Section 312 of the Small Business Investment Act, Conflicts of Interest Notice is hereby given that Horizon Ventures Fund II, L.P., 4 Main Street, Suite 50, Los Altos, CA 94022, a Federal Licensee under the Small Business Investment Act of 1958, as amended (“the Act”), in connection with the financing of a small concern, has sought an exemption under Section 312 of the Act and Section 107.730, Financings which Constitute Conflicts of Interest of the Small Business Administration (“SBA”) Rules and Regulations (13 CFR 107.730). Horizon Ventures Fund II, L.P. proposes to provide equity/debt security financing to iWatt, Inc. The financing is contemplated for working capital and general corporate purposes. The financing is brought within the purview of § 107.730(a)(1) of the Regulations because Horizons Ventures Fund I, L.P. and Horizons Ventures Advisors Fund I, L.P., all Associates of Horizon Ventures Fund II, L.P., own more than ten percent of iWatt, Inc. Notice is hereby given that any interested person may submit written comments on the transaction to the Associate Administrator for Investment, U.S. Small Business Administration, 409 Third Street, SW., Washington, DC 20416. Dated: December 19, 2005. Jaime Guzmán-Fournier, Associate Administrator for Investment. [FR Doc. E5-8249 Filed 1-3-06; 8:45 am] BILLING CODE 8025-01-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration [Summary Notice No. PE-2005-68] Petitions for Exemption; Dispositions of Petitions Issued AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of disposition of prior petition. SUMMARY: Pursuant to FAA's rulemaking provisions governing the application, processing, and disposition of petitions for exemption, part 11 of Title 14, Code of Federal Regulations (14 CFR), this notice contains the disposition of certain petitions previously received. The purpose of this notice is to improve the public's awareness of, and participation in, this aspect of FAA's regulatory activities. Neither publication of this notice nor the inclusion or omission of information in the summary is intended to affect the legal status of any petition or its final disposition. FOR FURTHER INFORMATION CONTACT: Tim Adams

(202)267-8033, Sandy Buchanan-Sumter

(202)267-7271, or John Linsenmeyer

(d)of appendix B to part 43. *Description of Relief Sought/Disposition:* To allow certain aircraft to be operated without complying with the requirements pertaining to

(1)the location of the aircraft identification plates and

(2)carriage of the Federal Aviation Administration Form 337 as evidence of installation approval for fuel tank installations in the passenger or baggage compartment. *Grant of Exemption, 12/07/2005, Exemption No. 4902J.* *Docket No.:* FAA-2005-21913. *Petitioner:* Professional Aviation Maintenance Association. *Sections of 14 CFR Affected:* 14 CFR 65.93(a). *Description of Relief Sought/Disposition:* To allow attendees of the annual Professional Aviation Maintenance Association Convention an extra 15 days to submit evidence of compliance with part 65.91(c)(1) through

(4)for renewal of their Inspection Authorization. *Denial of Exemption, 12/08/2005, Exemption No. 8670.* *Docket No.:* FAA-2005-22555. *Petitioner:* Gulfstream Aerospace Corporation. *Sections of 14 CFR Affected:* 14 CFR 21.231(a)(1). *Description of Relief Sought/Disposition:* To allow Gulfstream to apply for Delegation Option Authorization for type, production, and airworthiness certification of transport category airplanes. *Grant of Exemption, 12/08/2005, Exemption No. 8671.* *Docket No.:* FAA-2001-10283. *Petitioner:* Butler Aircraft/TBM, Inc. *Sections of 14 CFR Affected:* 14 CFR 91.529(a)(1). *Description of Relief Sought/Disposition:* To allow Butler Aircraft/TBM, Inc., to operate its Boeing Douglas DC-6 and DC-7 airplanes without a flight engineer during flightcrew training, ferry operations, and test flights that are conducted to prepare for firefighting operations. *Grant of Exemption, 12/13/2005, Exemption No. 2989M.* *Docket No.:* FAA-2002-11499. *Petitioner:* Mr. Randy L. Bailey. *Sections of 14 CFR Affected:* 14 CFR 91.109(a) and (b)(3). *Description of Relief Sought/Disposition:* To allow Mr. Randy L. Bailey to conduct certain flight instruction and simulated instrument flights to meet the recent experience requirements in Beechcraft airplanes equipped with a functioning throwover control wheel in place of functioning dual controls. *Grant of Exemption, 12/13/2005, Exemption No. 7734B.* *Docket No.:* FAA-2003-16561. *Petitioner:* Wings Airways. *Sections of 14 CFR Affected:* 14 CFR 135.203(a)(1). *Description of Relief Sought/Disposition:* To allow Wings Airways to operate under visual flight rules outside controlled airspace over water at an altitude below 500 feet. *Grant of Exemption, 12/13/2005, Exemption No. 8185A.* *Docket No.:* FAA-2001-10605. *Petitioner:* United Air Lines, Inc. *Sections of 14 CFR Affected:* 14 CFR 121.440(a) and Special Federal Aviation Regulation 58, paragraph 6(b)(3)(ii)(A). *Description of Relief Sought/Disposition:* To allow United Air Lines, Inc. to meet line check requirements using an alternative line check program. *Grant of Exemption, 12/13/2005, Exemption No. 3451O.* *Docket No.:* FAA-2002-13581. *Petitioner:* TransNorthern LLC. *Sections of 14 CFR Affected:* 14 CFR 43.3(a), 43.3(g), 121.709(b)(3), and 135.443(b)(3). *Description of Relief Sought/Disposition:* To allow certificated and appropriately trained pilots employed by TransNorthern LLC to remove and reinstall passenger seats. *Grant of Exemption, 12/19/2005, Exemption No. 8233A.* [FR Doc. E5-8266 Filed 1-3-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration [Summary Notice No. PE-2005-66] Petitions for Exemption; Dispositions of Petitions Issued AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of disposition of prior petition. SUMMARY: Pursuant to FAA's rulemaking provisions governing the application, processing, and disposition of petitions for exemption, part 11 of Title 14, *Code of Federal Regulations* (14 CFR), this notice contains the disposition of certain petitions previously received. The purpose of this notice is to improve the public's awareness of, and participation in, this aspect of FAA's regulatory activities. Neither publication of this notice nor the inclusion or omission of information in the summary is intended to affect the legal status of any petition or its final disposition. FOR FURTHER INFORMATION CONTACT: Tim Adams

(202)267-8033, Sandy Buchanan-Sumter

(202)267-7271, or John Linsenmeyer

(202)267-5174, Office of Rulemaking (ARM-1), Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591. This notice is published pursuant to 14 CFR 11.85 and 11.91. Issued in Washington, DC, on December 28, 2005. Anthony F. Fazio, Director, Office of Rulemaking. Disposition of Petitions *Docket No.:* FAA-2005-21814. *Petitioner:* Redline Air Service. *Sections of 14 CFR Affected:* 14 CFR 43.3. *Description of Relief Sought/Disposition:* To allow pilots employed by Redline Air Service to perform engine oil and engine oil filter changes on their part 135 airplanes. *Denial of Exemption, 11/18/2005, Exemption No. 8665.* *Docket No.:* FAA-2001-8750. *Petitioner:* Community College of the Air Force. *Sections of 14 CFR Affected:* 14 CFR 147.31(c)(2)(iii). *Description of Relief Sought/Disposition:* To allow U. S. Air Force aviation maintenance technicians who have completed military aviation maintenance training courses to be evaluated using the same criteria used for the civilian sector. *Grant of Exemption, 11/05/2005, Exemption No. 8251A.* *Docket No.:* FAA-2002-11285. *Petitioner:* Commemorative Air Force. *Sections of 14 CFR Affected:* 14 CFR 91.315, 91.319(a), 119.5(g), and 119.25(b). *Description of Relief Sought/Disposition:* To allow Commemorative Air Force to operate certain aircraft for the purpose of carrying passengers for compensation or hire on local flights for educational and historical purposes. *Grant of Exemption, 11/30/2005, Exemption No. 6802E.* *Docket No.:* FAA-2001-11090. *Petitioner:* Army Aviation Heritage Foundation. *Sections of 14 CFR Affected:* 14 CFR 91.319, 119.5(g), and 119.25(b). *Description of Relief Sought/Disposition:* To allow the Army Aviation Heritage Foundation to operate over other than congested areas with the minimum ceiling and visibility required for flight in class C and D airspace. *Grant of Exemption, 11/30/2005, Exemption No. 7736D.* *Docket No.:* FAA-2003-16625. *Petitioner:* Wings of Alaska. *Sections of 14 CFR Affected:* 14 CFR 135.203(a)(1). *Description of Relief Sought/Disposition:* To allow Wings of Alaska to operate under visual flight rules outside of controlled airspace over water at an altitude below 500 feet. *Grant of Exemption, 11/29/2005, Exemption No. 8242A.* *Docket No.:* FAA-2005-22664. *Petitioner:* Bell Helicopter. *Sections of 14 CFR Affected:* 14 CFR 91.9(b)(1) and (2), and 91.203(b). *Description of Relief Sought/Disposition:* To allow Bell Helicopter to operate unmanned aerial vehicles that do not carry and display the aircraft airworthiness, certification, and registration documents required in part 91. *Grant of Exemption, 11/29/2005, Exemption No. 8667.* *Docket No.:* FAA-2000-8468. *Petitioner:* Yankee Air Force, Inc. *Sections of 14 CFR Affected:* 14 CFR 91.315, 119.5(g), and 119.21(a). *Description of Relief Sought/Disposition:* To allow Yankee Air Force, Inc., to operate its North American B-25 and Boeing B-17 aircraft for the purpose of carrying passengers for compensation or hire on local flights for educational purposes. *Grant of Exemption, 11/25/2005, Exemption No. 6631F.* *Docket No.:* FAA-2000-8528. *Petitioner:* Popular Rotorcraft Association. *Sections of 14 CFR Affected:* 14 CFR 91.319(a). *Description of Relief Sought/Disposition:* To allow Popular Rotorcraft Association and its member flight instructors to operate an experimental category gyroplane and an ultralight gyroplane for the purpose of conducting flight training for compensation or hire. *Grant of Exemption, 11/25/2005, Exemption No. 5902K.* *Docket No.:* FAA-2005-22224. *Petitioner:* Centurion Air Cargo, Inc. *Sections of 14 CFR Affected:* 14 CFR 121.344. *Description of Relief Sought/Disposition:* To allow Centurion Air Cargo, Inc., to operate a McDonnell Douglas DC-10 airplane with the required flight recorder parameters not fully operational. *Denial of Exemption, 11/21/2005, Exemption No. 8666.* *Docket No.:* FAA-2004-19047. *Petitioner:* Mr. James V. Ricks, Jr. *Sections of 14 CFR Affected:* 14 CFR 135.251, 135.255, and 135.353, and appendices I and J. *Description of Relief Sought/Disposition:* To allow Mr. James V. Ricks, Jr., to conduct local sightseeing flights at the Greenwood-Leflore Airport, Greenwood, Mississippi, for compensation or hire, without complying with certain anti-drug and alcohol misuse prevention requirements of part 135. *Grant of Exemption, 11/18/2005, Exemption No. 8663.* *Docket No.:* FAA-2005-22460. *Petitioner:* Pomona Valley Pilots Association. *Sections of 14 CFR Affected:* 14 CFR 135.251, 135.255, and 135.353. *Description of Relief Sought/Disposition:* To allow Pomona Valley Pilots Association to conduct local sightseeing flights at the Cable Airport, Upland, California, on January 7 and 8, 2006, for compensation or hire without complying with certain anti-drug and alcohol misuse prevention requirements of part 135. *Grant of Exemption, 11/18/2005, Exemption No. 8664.* *Docket No.:* FAA-2005-22820. *Petitioner:* American Airlines, Inc. *Sections of 14 CFR Affected:* 14 CFR 121.619. *Description of Relief Sought/Disposition:* To allow American Airlines, Inc., its certificated dispatchers, and its pilots in command to dispatch flights to domestic airports at which for at least 1-hour before and 1-hour after the estimated time of arrival at the destination airport the appropriate weather reports or forecasts, or any combination of them, indicate the ceiling may be reduced from at least 2,000 feet to 1,000 feet above the airport elevation and visibility may be reduced from at least 3 statute miles to 1 statute mile. *Grant of Exemption, 11/15/2005, Exemption No. 8660.* *Docket No.:* FAA-2005-22733. *Petitioner:* NetJets, Inc. *Sections of 14 CFR Affected:* 14 CFR 91.203(a) and

(b)and 47.49. *Description of Relief Sought/Disposition:* To allow NetJets, Inc. to temporarily operate U.S.-registered aircraft in domestic operations without the registration or airworthiness certificates on board. *Grant of Exemption, 11/15/2005, Exemption No. 8662.* *Docket No.:* FAA-2003-16038. *Petitioner:* Southwest Airlines. *Sections of 14 CFR Affected:* 14 CFR 121.623(a) and (d), 121.643, and 121.645(e). *Description of Relief Sought/Disposition:* To allow Southwest Airlines to conduct supplemental operations within the 48 contiguous United States and the District of Columbia using the flight regulations for alternate airports as required by part 121.619 and the fuel reserve regulations as required by part 121.639. *Grant of Exemption, 11/15/2005, Exemption No. 8238A.* *Docket No.:* FAA-2005-22740. *Petitioner:* Mr. Dale W. Hemman. *Sections of 14 CFR Affected:* 14 CFR 91.109(a) and (b)(3). *Description of Relief Sought/Disposition:* To allow Mr. Dale W. Hemman to conduct certain flight training in certain Beechcraft airplanes that are equipped with a functioning throwover control wheel. *Grant of Exemption, 11/15/2005, Exemption No. 8661.* *Docket No.:* FAA-2002-11578. *Petitioner:* Northwest Seaplanes, Inc. *Sections of 14 CFR Affected:* 14 CFR 135.203(a)(1). *Description of Relief Sought/Disposition:* To allow Northwest Seaplanes, Inc., to conduct operations outside controlled airspace, over water, at an altitude below 500 feet above the surface but not less than 200 feet above the surface. *Grant of Exemption, 11/15/2005, Exemption No. 6461F.* *Docket No.:* FAA-2005-22716. *Petitioner:* Capital Cargo International Airlines, Inc. *Sections of 14 CFR Affected:* 14 CFR 121.434(c)(1)(ii). *Description of Relief Sought/Disposition:* To allow Capital Cargo International Airlines, Inc., to substitute a qualified and authorized check airman in place of a Federal Aviation Administration inspector to observe a qualifying pilot in command

(PIC)while that PIC is performing certain duties when completing initial or upgrade training. *Grant of Exemption, 11/15/2005, Exemption No. 8659.* *Docket No.:* FAA-2005-21606. *Petitioner:* Kitty Hawk Aircargo, Inc. *Sections of 14 CFR Affected:* 14 CFR 25.783(h), 25.807(g)(1), 25.810(a)(1), 25.813(b), 25.857(e) and 25.1447(c)(1). *Description of Relief Sought/Disposition:* To allow carriage of two non-crewmembers (commonly referred to as supernumeraries) in an area just aft and outside of the flightdeck. *Grant of Exemption, 11/4/2005, Exemption No. 8623.* [FR Doc. E5-8267 Filed 1-3-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration [Summary Notice No. PE-2005-65] Petitions for Exemption; Summary of Petitions Received AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of petitions for exemption received. SUMMARY: Pursuant to FAA's rulemaking provisions governing the application, processing, and disposition of petitions for exemption part 11 of Title 14, Code of Federal Regulations (14 CFR), this notice contains a summary of certain petitions seeking relief from specified requirements of 14 CFR. The purpose of this notice is to improve the public's awareness of, and participation in, this aspect of FAA's regulatory activities. Neither publication of this notice nor the inclusion or omission of information in the summary is intended to affect the legal status of any petition or its final disposition. DATES: Comments on petitions received must identify the petition docket number involved and must be received on or before January 24, 2006. ADDRESSES: You may submit comments [identified by DOT DMS Docket Number FAA-2005-23030] by any of the following methods: Web site: *http://dms.dot.gov* . Follow the instructions for submitting comments on the DOT electronic docket site. Fax: 1-202-493-2251. Mail: Docket Management Facility; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001. Hand Delivery: Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal Holidays. Docket: For access to the docket to read background documents or comments received, go to *http://dms.dot.gov* at any time or to Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal Holidays. FOR FURTHER INFORMATION CONTACT: John Linsenmeyer

(202)267-5174 or Tim Adams

(202)267-8033, Office of Rulemaking (ARM-1), Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591. Authority: This notice is published pursuant to 14 CFR 11.85 and 11.91. Issued in Washington, DC, on December 28, 2005. Anthony F. Fazio, Director, Office of Rulemaking. Petitions for Exemption *Docket No.:* FAA-2005-23030. *Petitioner:* Czech Aircraft Works, S.R.O. *Section of 14 CFR Affected:* 14 CFR 21.190. *Description of Relief Sought:* Petitioner seeks an exemption permitting Czech Aircraft Works, S.R.O. to be issued a special airworthiness certificate in the light-sport category for its Mermaid aircraft. The petitioner requires this exemption because the Mermaid aircraft is an amphibious aircraft equipped with landing gear that can be retracted and extended while in flight. The FAA also seeks specific comments on the operation of this aircraft by sport pilots and the ability of such aircraft to withstand improper use of the landing gear, such as landing on water with the landing gear in the “down” position. [FR Doc. E5-8268 Filed 1-3-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION National Highway Traffic Safety Administration [U.S. DOT Docket Number NHTSA-05-23401] Office of Injury Control Operations & Resources; Reports, Forms, and Recordkeeping Requirements AGENCY: National Highway Traffic Safety Administration (NHTSA), Department of Transportation. ACTION: Request for public comment on proposed collection of information. SUMMARY: Before a Federal agency can collect certain information from the public, it must receive approval from the Office of Management and Budget (OMB). Under procedures established by the Paperwork Reduction Act of 1995, before seeking OMB approval, Federal agencies must solicit public comment on proposed collections of information, including extensions and reinstatement of previously approved collections. This document describes one collection of information for which NHTSA intends to seek OMB approval. DATES: Comments must be received on or before March 6, 2006. ADDRESSES: Comments must refer to the docket notice numbers cited at the beginning of this notice and be submitted to Docket Management, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590. Please identify the proposed collection of information for which a comment is provided, by referencing its OMB clearance number. It is requested, but not required, that 2 copies of the comment be provided. The Docket Section is open on weekdays from 10 a.m. to 5 p.m. FOR FURTHER INFORMATION CONTACT: Complete copies of each request for collection of information may be obtained at no charge from Ronald Filbert, NHTSA 400 Seventh Street, SW., 5125, NTI 200, Washington, DC 20590. Mr. Filbert's telephone number is

(202)366-2121. Please identify the relevant collection of information by referring to its OMB Control Number. SUPPLEMENTARY INFORMATION: Under the Paperwork Reduction Act of 1995, before an agency submits a proposed collection of information to OMB for approval, it must first publish a document in the **Federal Register** providing a 60-day comment period and otherwise consult with members of the public and affected agencies concerning each proposed collection of information. The OMB has promulgated regulations describing what must be included in such a document. Under OMB's regulation (at 5 CFR 1320.8(d)), an agency must ask for public comment on the following:

(i)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;

(ii)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;

(iii)How to enhance the quality, utility, and clarity of the information to be collected;

(iv)How to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g. permitting electronic submission of responses. In compliance with these requirements, NHTSA asks for public comments on the following proposed collections of information: *Title:* 23 CFR Part 1313 Certificate Requirements for Section 410 Alcohol Impaired Driving Countermeasures. *OMB Control Number:* 2127-0501. *Affected Public:* State Government. *Form Number:* NA. *Abstract:* On August 10, 2005, President Bush signed into law the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy For Users (SAFETE-LU) (23 U.S.C. 410), which amended the criteria to qualify for the Alcohol Impaired Driving Countermeasures program. The purpose of the grant program is to promote highway traffic safety by providing incentives to reduce impaired driving. It provides grant funds to States that adopt certain measures to prevent drinking and driving or meet certain performance measures. The program provides for a grant to States that have an alcohol fatality rate of 0.5 or less per 100 million vehicle miles traveled as of the date of the grant based on the most recent Fatality Analysis Reporting Systems

(FARS)of NHTSA or a State must comply with specific programmatic criteria. Additionally, a State will receive funding if it is among the ten States with the highest impaired driving related fatalities using the most recent FARS. States that qualify for funds based on FARS data will only have to submit a certification to receive grants. To establish eligibility for the grants under programmatic criteria, a State must submit to NHTSA documentation demonstrating that it complies with sufficient criteria described in the rule. Much of the information required for the 410 application is already generated by the States as part of the development of their Section 402 Highway Safety Plan

(HSP)or other ongoing impaired driving programs. To keep the reporting burden on the States to a minimum, all States prepare and submit their Section 410 plans, that indicate how they intend to use the grant funds, as part of their existing HSP. The required Highway Safety Program Cost Summary Form HS 217, OMB Clearance Number 2127-0003, is currently used by the States to comply with other highway safety grant programs. *Estimated Annual Burden:* 2-45 hours per respondent per year. *Number of Respondents:* All 50 states and the District of Columbia. Comments are invited on: whether the proposed collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; the accuracy of the Department's estimate of the burden of the proposed information collection; 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 respondents, including the use of automated collection techniques or other forms of information technology. Marlene Markison, Associate Administrator, Office of Injury Control Operations & Resources. [FR Doc. 06-37 Filed 1-3-06; 8:45 am]

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