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Code · REGISTER · 2006-10-17 · Nuclear Regulatory Commission · Rules and Regulations

Rules and Regulations. Request for comment

50,279 words·~229 min read·/register/2006/10/17/06-8730

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BILLING CODE 7590-01-M NUCLEAR REGULATORY COMMISSION Notice of Opportunity To Comment on Model Safety Evaluation on Technical Specification Improvement To Modify Requirements Regarding Control Room Envelope Habitability Using the Consolidated Line Item Improvement Process AGENCY: Nuclear Regulatory Commission. ACTION: Request for comment. SUMMARY: Notice is hereby given that the staff of the Nuclear Regulatory Commission
(NRC)has prepared a model safety evaluation
(SE)and model application relating to the modification of technical specification
(TS)requirements regarding the habitability of the control room envelope (CRE). The NRC staff has also prepared a model no-significant-hazards-consideration
(NSHC)determination relating to this matter. The purpose of these models is to permit the NRC to efficiently process amendments that propose to revise the CRE emergency ventilation system TS action and surveillance requirements for the CRE boundary, and to add a new TS administrative controls program, “Control Room Envelope Habitability Program.” Licensees of nuclear power reactors to which the models apply could then request amendments, confirming the applicability of the SE and NSHC determination to their reactors. The NRC staff is requesting comment on the model SE and model NSHC determination prior to announcing their availability for referencing in license amendment applications. DATES: The comment period expires November 16, 2006. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date. ADDRESSES: Comments may be submitted either electronically or via U.S. mail. Submit written comments to Chief, Rulemaking, Directives, and Editing Branch, Division of Administrative Services, Office of Administration, Mail Stop: T-6 D59, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Hand deliver comments to: 11545 Rockville Pike, Rockville, Maryland, between 7:45 a.m. and 4:15 p.m. on Federal workdays. Copies of comments received may be examined at the NRC's Public Document Room, 11555 Rockville Pike (Room O-1F21), Rockville, Maryland. Comments may be submitted by electronic mail to *CLIIP@nrc.gov.* FOR FURTHER INFORMATION CONTACT: C. Craig Harbuck, Mail Stop: O-12H2, Technical Specifications Branch, Division of Inspection and Regional Support, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone 301-415-3140. SUPPLEMENTARY INFORMATION: Background Regulatory Issue Summary 2000-06, “Consolidated Line Item Improvement Process for Adopting Standard Technical Specification Changes for Power Reactors,” was issued on March 20, 2000. The consolidated line item improvement process (CLIIP) is intended to improve the efficiency of NRC licensing processes by processing proposed changes to the standard technical specifications
(STS)in a manner that supports subsequent license amendment applications. The CLIIP includes an opportunity for the public to comment on a proposed change to the STS after a preliminary assessment by the NRC staff and a finding that the change will likely be offered for adoption by licensees. This notice solicits comments on a proposed change to establish more effective and appropriate action, surveillance, and administrative TS requirements related to maintaining CRE habitability. The CLIIP directs the NRC staff to evaluate any comments received for a proposed change to the STS and to either reconsider the change or announce the availability of the change for adoption by licensees. Licensees opting to apply for this TS change are responsible for reviewing the staff's evaluation, referencing the applicable technical justifications, and providing any necessary plant-specific information. Each amendment application made in response to the notice of availability will be processed and noticed in accordance with applicable rules and NRC procedures. This notice involves a change to establish more effective and appropriate action, surveillance, and administrative TS requirements related to ensuring CRE habitability. This change was proposed for incorporation into the STS by the owners groups participants in the Technical Specification Task Force
(TSTF)and is designated TSTF-448, Revision 3 (Rev 3). TSTF-448, Rev 3, can be viewed on the NRC's Web page at *http://www.nrc.gov/reactors/operating/licensing/techspecs.html .* Applicability This proposal to modify TS to establish more effective and appropriate action, surveillance, and administrative requirements related to maintaining CRE habitability, as proposed in TSTF-448, Rev 3, is applicable to all licensees. To efficiently process the incoming license amendment applications, the staff requests that each licensee applying for the changes proposed in TSTF-448, Rev 3, use the CLIIP. The CLIIP does not prevent licensees from requesting an alternative approach or proposing the changes without the requested TS bases and TS bases control program. Variations from the approach recommended in this notice may require additional review by the NRC staff, and may increase the time and resources needed for the review. Significant variations from the approach, or inclusion of additional changes to the license, will result in staff rejection of the submittal. Instead, licensees desiring significant variations and/or additional changes should submit a license amendment request
(LAR)that does not claim to adopt TSTF-448, Rev 3. Public Notices This notice requests comments from interested members of the public within 30 days of the date of publication in the **Federal Register** . After evaluating the comments received as a result of this notice, the staff will either reconsider the proposed change or announce the availability of the change in a subsequent notice (perhaps with some changes to the safety evaluation or the proposed no significant hazards consideration determination as a result of public comments). If the staff announces the availability of the change, licensees wishing to adopt the change must submit an application in accordance with applicable rules and other regulatory requirements. For each application the staff will publish a notice of consideration of issuance of amendment to facility operating licenses, a proposed no significant hazards consideration determination, and a notice of opportunity for a hearing. The staff will also publish a notice of issuance of an amendment to an operating license to announce the modification of TS requirements related to CRE habitability, for each plant that receives the requested change. Dated at Rockville, Maryland, this 4th day of October, 2006. For the Nuclear Regulatory Commission. Timothy J. Kobetz, Chief, Technical Specifications Branch, Division of Inspection and Regional Support, Office of Nuclear Reactor Regulation. Model Safety Evaluation U.S. Nuclear Regulatory Commission; Office of Nuclear Reactor Regulation; Consolidated Line Item Improvement; Adoption of Changes to Standard Technical Specifications; Under Technical Specifications Task Force
(TSTF)Change Number TSTF-448, Revision 3; Regarding Control Room Envelope Habitability 1.0 Introduction By application dated [ ] [as supplemented by letters dated[ and ]], [Name of Licensee] (the licensee) requested changes to the Technical Specifications
(TS)for the [Name of Facility]. [The supplements dated [and], provided additional information that clarified the application, did not expand the scope of the application as originally noticed, and did not change the staff's original proposed no significant hazards consideration determination as published in the **Federal Register** on [Date (PM/LA will fill in FR information)] (XX FR XXXX).] On August 8, 2006, the commercial nuclear electrical power generation industry owners group Technical Specifications Task Force
(TSTF)submitted a proposed change, TSTF-448, Revision 3, to the improved standard technical specifications
(STS)(NUREGs 1430-1434) on behalf of the industry (TSTF-448, Revisions 0, 1, and 2 were prior draft iterations). TSTF-448, Revision 3, is a proposal to establish more effective and appropriate action, surveillance, and administrative STS requirements related to ensuring the habitability of the control room envelope (CRE). In United States Nuclear Regulatory Commission
(NRC)Generic Letter 2003-01 (Reference 1), licensees were alerted to findings at facilities that existing TS surveillance requirements for the [Control Room Envelope Emergency Ventilation System (CREEVS)] may not be adequate. Specifically, the results of ASTM E741 (Reference 2) tracer gas tests to measure control room envelope
(CRE)unfiltered inleakage at facilities indicated that the differential pressure surveillance is not a reliable method for demonstrating CRE boundary operability. Licensees were requested to address existing TS as follows: Provide confirmation that your technical specifications verify the integrity [i.e., operability] of the CRE [boundary], and the assumed [unfiltered] inleakage rates of potentially contaminated air. If you currently have a differential pressure surveillance requirement to demonstrate CRE [boundary] integrity, provide the basis for your conclusion that it remains adequate to demonstrate CRE integrity in light of the ASTM E741 testing results. If you conclude that your differential pressure surveillance requirement is no longer adequate, provide a schedule for: 1) revising the surveillance requirement in your technical specification to reference an acceptable surveillance methodology (e.g., ASTM E741), and 2) making any necessary modifications to your CRE [boundary] so that compliance with your new surveillance requirement can be demonstrated. If your facility does not currently have a technical specification surveillance requirement for your CRE integrity, explain how and at what frequency you confirm your CRE integrity and why this is adequate to demonstrate CRE integrity. To promote standardization and to minimize the resources that would be needed to create and process plant-specific amendment applications in response to the concerns described in the generic letter, the industry and the NRC proposed revisions to CRE habitability system requirements contained in the STS, using the STS change traveler process. This effort culminated in Revision 3 to traveler TSTF-448, “Control Room Habitability,” which the NRC staff approved on [month dd, 2006]. Consistent with the traveler as incorporated into NUREG-143xx, the licensee proposed revising action and surveillance requirements in [Specification 3.7.10, “Control Room Envelope Emergency Ventilation System (CREEVS),”] and adding a new administrative controls program, [Specification 5.5.18, “CRE Habitability Program.”] The purpose of the changes is to ensure that CRE boundary operability is maintained and verified through effective surveillance and programmatic requirements, and that appropriate remedial actions are taken in the event of an inoperable CRE boundary. 2.0 Regulatory Evaluation 2.1 Control Room and Control Room Envelope NRC Regulatory Guide 1.196, “Control Room Habitability at Light-water Nuclear Power Reactors,” Revision 0, May 2003, (Reference 4) uses the term “control room envelope (CRE)” in addition to the term “control room” and defines each term as follows: Control Room: The plant area, defined in the facility licensing basis, in which actions can be taken to operate the plant safely under normal conditions and to maintain the reactor in a safe condition during accident situations. It encompasses the instrumentation and controls necessary for a safe shutdown of the plant and typically includes the critical document reference file, computer room (if used as an integral part of the emergency response plan), shift supervisor's office, operator wash room and kitchen, and other critical areas to which frequent personnel access or continuous occupancy may be necessary in the event of an accident. Control Room Envelope: The plant area, defined in the facility licensing basis, that in the event of an emergency, can be isolated from the plant areas and the environment external to the CRE. This area is served by an emergency ventilation system, with the intent of maintaining the habitability of the control room. This area encompasses the control room, and may encompass other non-critical areas to which frequent personnel access or continuous occupancy is not necessary in the event of an accident. NRC Regulatory Guide 1.197, “Demonstrating Control Room Envelope Integrity At Nuclear Power Reactors,” Revision 0, May 2003 (Reference 5), also contains these definitions, but uses the term CRE to mean both. This is because the protected environment provided for operators varies with the nuclear power facility. At some facilities, this environment is limited to the control room; at others, it is the CRE. In this safety evaluation, consistent with the proposed changes to the STS, the CRE will be used to designate both. For consistency, facilities should use the term CRE with an appropriate facility-specific definition derived from the above CRE definition. 2.2 [Control Room Envelope Emergency Ventilation System (CREEVS)] The [CREEVS] provides a protected environment from which operators can control the unit, during airborne challenges from radioactivity, hazardous chemicals, and fire byproducts, such as fire suppression agents and smoke, during both normal and accident conditions. The [CREEVS] is designed to maintain a habitable environment in the control room envelope for 30 days of continuous occupancy after a Design Basis Accident
(DBA)without exceeding a [5 rem whole body dose or its equivalent to any part of the body] [5 rem total effective dose equivalent (TEDE)]. The [CREEVS] consists of two redundant trains [subsystems], each capable of maintaining the habitability of the CRE. The [CREEVS] is considered operable when the individual components necessary to limit operator exposure are operable in both trains [subsystems]. A [CREEVS] train [subsystem] is considered operable when the associated: • Fan is operable; • High efficiency particulate air
(HEPA)filters and charcoal adsorbers are not excessively restricting flow, and are capable of performing their filtration functions; • Heater, demister, ductwork, valves, and dampers are operable, and air circulation can be maintained; and • CRE boundary is operable (the single boundary supports both trains [subsystems]). The CRE boundary is considered operable when the measured unfiltered air inleakage is less than or equal to the inleakage value assumed by the licensing basis analyses of design basis accident consequences to CRE occupants. 2.3 Regulations Applicable to Control Room Habitability In Appendix A, “General Design Criteria for Nuclear Power Plants,” to 10 CFR Part 50, “Domestic Licensing of Production and Utilization Facilities,” General Design Criteria
(GDC)1, 2, 3, 4, 5, and 19 apply to CRE habitability. A summary of these GDCs follows. GDC 1, “Quality Standards and Records,” requires that structures, systems, and components
(SSCs)important to safety be designed, fabricated, erected, and tested to quality standards commensurate with the importance of the safety functions performed. GDC 2, “Design Basis for Protection Against Natural Phenomena,” requires that structures, systems, and components
(SSCs)important to safety be designed to withstand the effects of earthquakes and other natural hazards. GDC 3, “Fire Protection,” requires SSCs important to safety be designed and located to minimize the effects of fires and explosions. GDC 4, “Environmental and Dynamic Effects Design Bases,” requires SSCs important to safety to be designed to accommodate the effects of and to be compatible with the environmental conditions associated with normal operation, maintenance, testing, and postulated accidents, including loss-of-coolant accidents (LOCAs). GDC 5, “Sharing of Structures, Systems, and Components,” requires that SSCs important to safety not be shared among nuclear power units unless it can be shown that such sharing will not significantly impair their ability to perform their safety functions, including, in the event of an accident in one unit, the orderly shutdown and cooldown of the remaining units. GDC 19, “Control Room,” requires that a control room be provided from which actions can be taken to operate the nuclear reactor safely under normal conditions and to maintain the reactor in a safe condition under accident conditions, including a LOCA. Adequate radiation protection is to be provided to permit access and occupancy of the control room under accident conditions without personnel receiving radiation exposures in excess of specified values. Prior to incorporation of TSTF-448, Revision 3, the STS requirements addressing control room habitability resided only in the following CRE ventilation system specifications: • NUREG-1430, TS 3.7.10, “Control Room Emergency Ventilation System (CREVS);” • NUREG-1431, TS 3.7.10, “Control Room Emergency Filtration System (CREFS);” • NUREG-1432, TS 3.7.11, “Control Room Emergency Air Cleanup System (CREACS);” • REG-1433, TS 3.7.4, “[Main Control Room Environmental Control (MCREC)] System;” and • NUREG-1434, TS 3.7.3, “[Control Room Fresh Air (CRFA)] System.” In these specifications, the surveillance requirement associated with demonstrating the operability of the CRE boundary requires verifying that one [CREEVS] train [subsystem] can maintain a positive pressure of [0.125] inches water gauge, relative to the adjacent [turbine building] during the pressurization mode of operation at a makeup flow rate of [3000] cfm. Facilities that pressurize the CRE during the emergency mode of operation of the [CREEVS] have similar surveillance requirements. Other facilities that do not pressurize the CRE have only a system flow rate criterion for the emergency mode of operation. Regardless, the results of ASTM E741 (Reference 2) tracer gas tests to measure CRE unfiltered inleakage at facilities indicated that the differential pressure surveillance (or the alternative surveillance at non-pressurization facilities) is not a reliable method for demonstrating CRE boundary operability. That is, licensees were able to obtain differential pressure and flow measurements satisfying the SR limits even though unfiltered inleakage was determined to exceed the value assumed in the safety analyses. In addition to an inadequate surveillance requirement, the action requirements of these specifications were ambiguous regarding CRE boundary operability in the event CRE unfiltered inleakage is found to exceed the analysis assumption. The ambiguity stemmed from the view that the CRE boundary may be considered operable but degraded in this condition, and that it would be deemed inoperable only if calculated radiological exposure limits for CRE occupants exceeded a licensing basis limit; e.g., as stated in GDC-19, even while crediting compensatory measures. NRC Administrative Letter 98-10, “Dispositioning of Technical Specifications That Are Insufficient to Assure Plant Safety,” (AL 98-10) states that “ the discovery of an improper or inadequate TS value or required action is considered a degraded or nonconforming condition,” which is defined in [NRC Inspection Manual Chapter 9900; see latest guidance in RIS 2005-20 (Reference 3)]. “Imposing administrative controls in response to an improper or inadequate TS is considered an acceptable short-term corrective action. The [NRC] staff expects that, following the imposition of administrative controls, an amendment to the [inadequate] TS, with appropriate justification and schedule, will be submitted in a timely fashion.” Licensees that have found unfiltered inleakage in excess of the limit assumed in the safety analyses and have yet to either reduce the inleakage below the limit or establish a higher bounding limit through re-analysis, have implemented compensatory actions to ensure the safety of CRE occupants, pending final resolution of the condition, consistent with RIS 2005-20. However, based on GL 2003-01 and AL 98-10, the staff expects each licensee to propose TS changes that include a surveillance to periodically measure CRE unfiltered inleakage in order to satisfy 10 CFR 50.36(c)(3), which requires a facility's TS to include surveillance requirements, which it defines as “requirements relating to test, calibration, or inspection to assure that the necessary quality of systems and components is maintained, that facility operation will be within safety limits, and that limiting conditions for operation will be met.” (Emphasis added.) The NRC staff also expects facilities to propose unambiguous remedial actions, consistent with 10 CFR 50.36(c)(2), for the condition of not meeting the limiting condition for operation
(LCO)due to an inoperable CRE boundary. The action requirements should specify a reasonable completion time to restore conformance to the LCO before requiring a facility to be shut down. This completion time should be based on the benefits of implementing mitigating actions to ensure CRE occupant safety and sufficient time to resolve most problems anticipated with the CRE boundary, while minimizing the chance that operators in the CRE will need to use mitigating actions during accident conditions. 2.4 Adoption of TSTF-448, Revision 3, by [Facility Name] Adoption of TSTF-448, Revision 3, will assure that the facility's TS LCO for the [CREEVS] is met by demonstrating unfiltered leakage into the CRE is within limits; i.e., the operability of the CRE boundary. In support of this surveillance, which specifies a relatively long test interval (frequency) of 6 years, TSTF-448 also adds TS administrative controls to assure the habitability of the CRE between performances of the ASTM E741 test. In addition, adoption of TSTF-448 will establish clearly stated and reasonable required actions in the event CRE unfiltered inleakage is found to exceed the analysis assumption. The changes made by TSTF-448 to the STS requirements for the [CREEVS] and the CRE boundary conform to 10 CFR 50.36(c)(2) and 10 CFR 50.36(c)(3). Their adoption will better assure that [facility name]'s CRE will remain habitable during normal operation and design basis accident conditions. These changes are, therefore, acceptable from a regulatory standpoint. 3.0 Technical Evaluation The NRC staff reviewed the proposed changes against the corresponding changes made to the STS by TSTF-448, Revision 3, which the NRC staff has found to satisfy applicable regulatory requirements, as described above in Section 2.0. [The emergency operational mode of the [CREEVS] at [facility name] [pressurizes] [isolates but does not pressurize] the CRE to minimize unfiltered air inleakage.] The proposed changes are consistent with this design. 3.1 Proposed Changes The proposed amendment would strengthen CRE habitability TS requirements by changing TS [3.7.10, CREEVS] and adding a new TS administrative controls program on CRE habitability. Accompanying the proposed TS changes are appropriate conforming technical changes to the TS Bases. The proposed revision to the Bases also includes editorial and administrative changes to reflect applicable changes to the corresponding STS Bases, which were made to improve clarity, conform with the latest information and references, correct factual errors, and achieve more consistency among the STS NUREGs. [Except for plant specific differences, all of] these changes are consistent with STS as revised by TSTF-448, Revision 3. The NRC staff compared the proposed TS changes to the STS and the STS markups and evaluations in TSTF-448. [The staff verified that differences from the STS were adequately justified on the basis of plant-specific design or retention of current licensing basis.] The NRC staff also reviewed the proposed changes to the TS Bases for consistency with the STS Bases and the plant-specific design and licensing bases, although approval of the Bases is not a condition for accepting the proposed amendment. However, TS 5.5.[11], “TS Bases Control Program,” provides assurance that the licensee has established and will maintain the adequacy of the Bases. [The proposed Bases for TS 3.7.10 reference NEI 99-03, “Control Room Habitability Assessment Guidance,” Revision 1, dated March 2003, which the NRC staff has not formally endorsed. However, NEI 99-03, Revision 0 (Reference 6), dated June 2001, has been endorsed through Regulatory Guide 1.196, “Control Room Habitability at Light-Water Nuclear Power Reactors,” dated May 2003 (Reference 4). Listing Revision 1 instead of Revision 0 is acceptable because the NRC staff reviewed the descriptions and justifications of the differences between Revision 0 and Revision 1, provided in the licensee's application, and has determined that referencing Revision 1 does not conflict with the endorsement of Revision 0, as stated in RG 1.196.] 3.2 Editorial Changes The licensee proposed editorial changes to TS [3.7.10, “CREEVS,”] to establish standard terminology, such as “control room envelope (CRE)” in place of “control room,” except for the plant-specific name for the [CREEVS], and “radiological, chemical, and smoke hazards (or challenges)” in place of various phrases to describe the hazards that CRE occupants are protected from by the [CREEVS]. [The licensee also proposed to correct a typographical error by replacing “irradiate” with “irradiated” in TS 3.7.10 Condition E.] These changes improve the usability and quality of the presentation of the TS, have no impact on safety, and therefore, are acceptable. 3.3 TS [3.7.10, CREEVS] <Evaluation 1—for facilities that have adopted the [CREEVS] TS LCO Note and Action B of TSTF-287, Rev. 5> The licensee proposed to revise the action requirements of TS [3.7.10, “CREEVS,”] to acknowledge that an inoperable CRE boundary, depending upon the location of the associated degradation, could cause just one, instead of both [CREEVS] [trains] to be inoperable. This is accomplished by revising Condition A to exclude Condition B, and revising Condition B to address one or more [CREEVS] [trains], as follows: • Condition A One [CREEVS] [train] inoperable for reasons other than Condition B. • Condition B One or more [CREEVS] [trains] inoperable due to inoperable CRE boundary in MODE 1, 2, [or] 3[, or 4]. This change clarifies how to apply the action requirements in the event just one [CREEVS] [train] is unable to ensure CRE occupant safety within licensing basis limits because of an inoperable CRE boundary. It enhances the usability of Conditions A and B with a presentation that is more consistent with the intent of the existing requirements. This change is an administrative change because it neither reduces nor increases the existing action requirements, and, therefore, is acceptable. The licensee proposed to replace existing Required Action B.1, “Restore control room boundary to OPERABLE status,” which has a 24-hour Completion Time, with Required Action B.1, to immediately initiate action to implement mitigating actions; Required Action B.2, to verify, within 24 hours, that in the event of a DBA, CRE occupant radiological exposures will not exceed the calculated dose of the licensing basis analyses of DBA consequences, and that CRE occupants are protected from hazardous chemicals and smoke; and Required Action B.3, to restore CRE boundary to operable status within 90 days. The 24-hour Completion Time of new Required Action B.2 is reasonable based on the low probability of a DBA occurring during this time period, and the use of mitigating actions as directed by Required Action B.1. The 90-day Completion Time of new Required Action B.3 is reasonable based on the determination that the mitigating actions will ensure protection of CRE occupants within analyzed limits while limiting the probability that CRE occupants will have to implement protective measures that may adversely affect their ability to control the reactor and maintain it in a safe shutdown condition in the event of a DBA. The 90-day Completion Time is a reasonable time to diagnose, plan and possibly repair, and test most anticipated problems with the CRE boundary. Therefore, proposed Action B is acceptable. <End of Evaluation 1> <Evaluation 2—for facilities that have not yet adopted the [CREEVS] TS LCO Note and Action B of TSTF-287, Rev. 5> The licensee proposed to establish new action requirements in TS [3.7.10, “CREEVS,”] for an inoperable CRE boundary. Currently, if one [CREEVS] [train] is determined to be inoperable due to an inoperable CRE boundary, existing Action A would apply and require restoring the [train] (and the CRE boundary) to operable status in 7 days. If two [trains] are determined to be inoperable due to an inoperable CRE boundary, existing Action [E] specifies no time to restore the [trains] (and the CRE boundary) to operable status, but requires immediate entry into the shutdown actions of LCO 3.0.3. These existing Actions are more restrictive than would be appropriate in situations for which CRE occupant implementation of compensatory measures or mitigating actions would temporarily afford adequate CRE occupant protection from postulated airborne hazards. To account for such situations, the licensee proposed to revise the action requirements to add a new Condition B, “One or more [CREEVS] [trains] inoperable due to inoperable CRE boundary in MODE 1, 2, [or] 3[, or 4].” New Action B would allow 90 days to restore the CRE boundary (and consequently, the affected [CREEVS] [trains]) to operable status, provided that mitigating actions are immediately implemented and within 24 hours are verified to ensure, that in the event of a DBA, CRE occupant radiological exposures will not exceed the calculated dose of the licensing basis analyses of DBA consequences, and that CRE occupants are protected from hazardous chemicals and smoke. The 24-hour Completion Time of new Required Action B.2 is reasonable based on the low probability of a DBA occurring during this time period, and the use of mitigating actions. The 90-day Completion Time is reasonable based on the determination that the mitigating actions will ensure protection of CRE occupants within analyzed limits while limiting the probability that CRE occupants will have to implement protective measures that may adversely affect their ability to control the reactor and maintain it in a safe shutdown condition in the event of a DBA. The 90-day Completion Time of new Required Action B.3 is a reasonable time to diagnose, plan and possibly repair, and test most anticipated problems with the CRE boundary. Therefore, proposed Action B is acceptable. To distinguish new Condition B from the existing condition for one [CREEVS] [train] inoperable, Condition A is revised to state, “One [CREEVS] [train] inoperable for reasons other than Condition B.” To distinguish new Condition B from the existing condition for two [CREEVS] [trains] inoperable, Condition [E] (renumbered as Condition [F]) is revised to state, “Two [CREEVS] [trains] inoperable during MODE 1, 2, [or] 3[, or 4] for reasons other than Condition B.” The changes to existing Conditions A and [E] are less restrictive because these Conditions will no longer apply in the event one or two [CREEVS] [trains] are inoperable due to an inoperable CRE boundary during unit operation in Mode 1, 2, [or] 3[, or 4]. This is acceptable because the new Action B establishes adequate remedial measures in this condition. With the addition of a new Condition B, existing Conditions B, C, D, and E are re-designated C, D, E, and F, respectively. The licensee also proposed to modify the [CREEVS] LCO by adding a note allowing the CRE boundary to be opened intermittently under administrative controls. As stated in the LCO Bases, this Note “only applies to openings in the CRE boundary that can be rapidly restored to the design condition, such as doors, hatches, floor plugs, and access panels. For entry and exit through doors, the administrative control of the opening is performed by the person(s) entering or exiting the area. For other openings, these controls should be proceduralized and consist of stationing a dedicated individual at the opening who is in continuous communication with operators in the CRE. This individual will have a method to rapidly close the opening and to restore the CRE boundary to a condition equivalent to the design condition when a need for CRE isolation is indicated.” The allowance of this note is acceptable because the administrative controls will ensure that the opening will be quickly sealed to maintain the validity of the licensing basis analyses of DBA consequences. <End of Evaluation 2> <Evaluation 3—for B&W CREVS TS> The existing TS 3.7.10 condition for two control room emergency ventilation system (CREVS) trains inoperable during refueling, Condition E, is revised to also apply during plant operation in Modes 5 and 6. It will state, “Two CREVS trains inoperable [in MODE 5 or 6, or] during movement of [recently] irradiated fuel assemblies.” This change clarifies the applicability of this condition for dual unit facilities when the unit is in Mode 5 or 6, and the other unit is moving [recently] irradiated fuel assemblies. Similarly, Condition D, for failing to meet Action A during movement of [recently] irradiated fuel assemblies, is revised to also apply in Modes 5 and 6. These changes are administrative because they only clarify the intended applicability of the existing conditions, and are, therefore, acceptable. Required Actions D.2 and E.1, to immediately suspend movement of [recently] irradiated fuel assemblies, ensures that a fuel handling accident cannot occur while the unit is in these conditions. With only one CREVS train inoperable, Required Action D.1 specifies an alternative to immediately suspending fuel movement; it requires immediately placing the operable CREVS train in its emergency operating alignment, or mode, to minimize the chance the train will fail to properly switch to this mode if called upon in response to a fuel handling accident, or other airborne hazards challenge. <End of Evaluation 3> <Evaluation 4—for B&W, CE, and W [CREEVS] TS> The licensee proposed to add a new condition to Action E of TS 3.7.10 that states, “One or more [CREEVS] trains inoperable due to an inoperable CRE boundary [in Mode 5 or 6, or] during movement of [recently] irradiated fuel assemblies.” The specified Required Action proposed for this condition is the same as for the existing condition of Action E [(revised as discussed previously) <for B&W plants if Evaluation 3 is used>], which states “[Two [CREEVS] trains inoperable [in MODE 5 or 6, or] during movement of [recently] irradiated fuel assemblies.” Accordingly, the new condition is stated with the other condition in Action E using the logical connector “ *OR* ” in accordance with the STS writer's guide (TSTF-GG-05-01, “Writer's Guide for Plant-Specific Improved Technical Specifications,” June 2005). The practical result of this presentation in format is the same as specifying two separately numbered Actions, one for each condition. Its advantage is to make the TS Actions table easier to use by avoiding having an additional numbered row in the Actions table. The new condition in Action E is needed because proposed Action B will only apply in Modes 1, 2, 3, and 4. As such, this change will ensure that the Actions table continues to specify a condition for an inoperable CRE boundary during Modes 5 and 6 and during refueling. Therefore, this change is administrative and acceptable. <End of Evaluation 4> <Evaluation 5—for BWR4 and BWR6 [CREEVS] TS> The licensee proposed to add a new condition to Action F of TS 3.7.4 that states, “One or more [CREEVS] subsystems inoperable due to an inoperable CRE boundary during movement of [recently] irradiated fuel assemblies in the [[primary or] secondary] containment or during operations with a potential for draining the reactor vessel (OPDRVs).” The specified Required Actions proposed for this condition are the same as for the other existing condition for Action F, which states, “Two [CREEVS] subsystems inoperable during movement of [recently] irradiated fuel assemblies in the [secondary] containment or during OPDRVs.” Accordingly, the new condition is stated with the other condition in Action F using the logical connector “ *OR* ” in accordance with the STS writer's guide (TSTF-GG-05-01, “Writer's Guide for Plant-Specific Improved Technical Specifications,” June 2005). The practical result of this presentation in format is the same as specifying two separately numbered Actions, one for each condition. Its advantage is to make the TS Actions table easier to use by avoiding having an additional numbered row in the Actions table. This new actions condition is needed because proposed Action B will only apply in Modes 1, 2, 3, and 4. As such, this change will ensure that the Actions table continues to specify a condition for an inoperable CRE boundary during refueling and OPDRVs. Therefore, this change is administrative and acceptable. <End of Evaluation 5> <Evaluation 6—for facilities that have a CRE pressurization surveillance requirement> In the [emergency radiation state] of operation, the [CREEVS] isolates unfiltered ventilation air supply intakes, filters the emergency ventilation air supply to the CRE, and pressurizes the CRE to minimize unfiltered air inleakage past the CRE boundary. The licensee proposed to delete the CRE pressurization surveillance requirement (SR). This SR requires verifying that one [CREEVS] [train][subsystem], operating in the [emergency radiation state], can maintain a pressure of [0.125] inches water gauge, relative to the adjacent [turbine building] during the pressurization mode of operation at a makeup flow rate of [3000] cfm. The deletion of this SR is proposed because measurements of unfiltered air leakage into the CRE at numerous reactor facilities demonstrated that a basic assumption of this SR, an essentially leak-tight CRE boundary, was incorrect for most facilities. Hence, meeting this SR by achieving the required CRE pressure is not necessarily a conclusive indication of CRE boundary leak tightness, i.e., CRE boundary operability. In its response to GL 2003-01, [dated month, dd, yyyy], the licensee reported that it had determined that the [facility name] CRE pressurization surveillance, SR 3.7.[10].[4], was inadequate to demonstrate the operability of the CRE boundary, and proposed to replace it with an inleakage measurement SR and a CRE Habitability Program in TS Section 5.5, in accordance with the approved version of TSTF-448. Based on the adoption of TSTF-448, Revision 3, the licensee's proposal to delete SR 3.7.[10].[4] is acceptable. <End of Evaluation 6> The proposed CRE inleakage measurement SR states, “Perform required CRE unfiltered air inleakage testing in accordance with the Control Room Envelope Habitability Program.” The CRE Habitability Program TS, proposed TS 5.5.[18], requires that the program include “Requirements for determining the unfiltered air inleakage past the CRE boundary into the CRE in accordance with the testing methods and at the Frequencies specified in Sections C.1 and C.2 of Regulatory Guide 1.197, Revision 0 (Reference 5). This guidance references ASTM E741 (Reference 2) as an acceptable method for ascertaining the unfiltered leakage into the CRE. The licensee has [,however, not] proposed to follow this method. [The NRC staff reviewed the licensee's proposed alternative method for measuring CRE inleakage to ensure it meets the criteria for such methods given in RG 1.197.] [Insert plant-specific technical evaluation by the staff of the alternative method.] [The NRC staff finds that the proposed alternative method is adequate for satisfying the criteria of RG 1.197.] Therefore, the proposed CRE inleakage measurement SR is acceptable. 3.4 TS 5.5.[18], CRE Habitability Program The proposed administrative controls program TS is consistent with the model program TS in TSTF-448, Revision 3. In combination with SR 3.7.[10].[4], this program is intended to ensure the operability of the CRE boundary, which as part of an operable [CREEVS] will ensure that CRE habitability is maintained such that CRE occupants can control the reactor safely under normal conditions and maintain it in a safe condition following a radiological event, hazardous chemical release, or a smoke challenge. The program shall ensure that adequate radiation protection is provided to permit access and occupancy of the CRE under design basis accident
(DBA)conditions without personnel receiving radiation exposures in excess of [5 rem whole body or its equivalent to any part of the body] [5 rem total effective dose equivalent (TEDE)] for the duration of the accident. A CRE Habitability Program TS acceptable to the NRC staff requires the program to contain the following elements: Definitions of CRE and CRE boundary. This element is intended to ensure that these definitions accurately describe the plant areas that are within the CRE, and also the interfaces that form the CRE boundary, and are consistent with the general definitions discussed in Section 2.1 of this safety evaluation. Establishing what is meant by the CRE and the CRE boundary will preclude ambiguity in the implementation of the program. Configuration control and preventive maintenance of the CRE boundary. This element is intended to ensure the CRE boundary is maintained in its design condition. Guidance for implementing this element is contained in NEI 99-03 (Reference 6) and Regulatory Guide 1.196 (Reference 4). Maintaining the CRE boundary in its design condition provides assurance that its leak-tightness will not significantly degrade between CRE inleakage determinations. Assessment of CRE habitability at the frequencies stated in Sections C.1 and C.2 of Regulatory Guide 1.197, Revision 0 (Reference 5), and measurement of unfiltered air leakage into the CRE in accordance with the testing methods and at the frequencies stated in Sections C.1 and C.2 of Regulatory Guide 1.197. [The licensee proposed the following exception[s] to Sections C.1 and C.2 of Regulatory Guide 1.197, to be listed in the TS with this program element.] [Insert plant-specific evaluation of licensee's proposed exceptions.] This element is intended to ensure that the plant assesses CRE habitability consistent with Sections C.1 and C.2 of Regulatory Guide 1.197 [and NRC approved exceptions]. Assessing CRE habitability at the NRC accepted frequencies provides assurance that significant degradation of the CRE boundary will not go undetected between CRE inleakage determinations. Determination of CRE inleakage using test methods acceptable to the NRC staff assures that test results are reliable for ascertaining CRE boundary operability. Determination of CRE inleakage at the NRC accepted frequencies provides assurance that significant degradation of the CRE boundary will not occur between CRE inleakage determinations. Measurement of CRE pressure with respect to all areas adjacent to the CRE boundary at designated locations for use in assessing the CRE boundary at a frequency of [18] months on a staggered test basis (with respect to the [CREEVS] trains). This element is intended to ensure that CRE differential pressure is regularly measured to identify changes in pressure warranting evaluation of the condition of the CRE boundary. Obtaining and trending pressure data provides additional assurance that significant degradation of the CRE boundary will not go undetected between CRE inleakage determinations. Quantitative limits on unfiltered inleakage. This element is intended to establish the CRE inleakage limit as the CRE unfiltered infiltration rate assumed in the CRE occupant radiological consequence analyses of design basis accidents. Having an unambiguous criterion for the CRE boundary to be considered operable in order to meet LCO 3.7.[10], will ensure that associated action requirements will be consistently applied in the event of CRE degradation resulting in inleakage exceeding the limit. Consistent with TSTF-448, Revision 3, the program states that the provisions of SR 3.0.2 are applicable to the program frequencies for performing the activities required by program paragraph number c, parts
(i)and
(ii)(assessment of CRE habitability and measurement of CRE inleakage), and paragraph number d (measurement of CRE differential pressure). This statement is needed to avoid confusion. SR 3.0.2 is applicable to the surveillance that references the testing in the CRE Habitability Program. However, SR 3.0.2 is not applicable to Administrative Controls unless specifically invoked. Providing this statement in the program eliminates any confusion regarding whether SR 3.0.2 is applicable, and is acceptable. Consistent with TSTF-448, Revision 3, proposed TS 5.5.[18] states that
(1)a CRE Habitability Program shall be established and implemented,
(2)the program shall include all of the NRC-staff required elements, as described above, and
(3)the provisions of SR 3.0.2 shall apply to program frequencies. Therefore, TS 5.5.[18], which is consistent with the model program TS approved by the NRC staff in TSTF-448, Revision 3, is acceptable. 4.0 State Consultation In accordance with the Commission's regulations, the [ ] State official was notified of the proposed issuance of the amendment. The State official had [(1) no comments or
(2)the following comments—with subsequent disposition by the staff]. 5.0 Environmental Consideration The amendments change a requirement with respect to the installation or use of a facility component located within the restricted area as defined in 10 CFR part 20 and change surveillance requirements. The NRC staff has determined that the amendments involve no significant increase in the amounts and no significant change in the types of any effluents that may be released offsite, and that there is no significant increase in individual or cumulative occupational radiation exposure. The Commission has previously issued a proposed finding that the amendments involve no-significant-hazards considerations, and there has been no public comment on the finding [xx FR xxxx]. Accordingly, the amendments meet the eligibility criteria for categorical exclusion set forth in 10 CFR 51.22(c)(9) [and (c)(10)]. Pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared in connection with the issuance of the amendments. 6.0 Conclusion The Commission has concluded, on the basis of the considerations discussed above, that
(1)There is reasonable assurance that the health and safety of the public will not be endangered by operation in the proposed manner,
(2)such activities will be conducted in compliance with the Commission's regulations, and
(3)the issuance of the amendments will not be inimical to the common defense and security or to the health and safety of the public. 7.0 References 1. NRC Generic Letter 2003-01, “Control Room Habitability,” dated June 12, 2003, (GL 2003-01). 2. ASTM E 741-00, “Standard Test Method for Determining Air Change in a Single Zone by Means of a Tracer Gas Dilution,” 2000, (ASTM E741). 3. NRC Regulatory Issue Summary 2005-20: Revision to Guidance Formerly Contained in NRC Generic Letter 91-18,” Information to Licensees Regarding Two NRC Inspection Manual Sections on Resolution of Degraded and Nonconforming Conditions and on Operability,” dated September 26, 2005 (RIS 2005-20). 4. Regulatory Guide 1.196, “Control Room Habitability at Light-Water Nuclear Power Reactors,” dated May 2003. 5. Regulatory Guide 1.197, “Demonstrating Control Room Envelope Integrity at Nuclear Power Reactors,” Revision 0, May 2003. 6. NEI 99-03, Revision 0, “Control Room Habitability Assessment Guidance” dated June 2001. *Principal contributors:* C. Harbuck. Proposed No-Significant-Hazards-Consideration Determination *Description of Amendment Request:* A change is proposed to the standard technical specifications
(STS)(NUREGs 1430 through 1434) and plant specific technical specifications (TS), to strengthen TS requirements regarding control room envelope
(CRE)habitability by changing the action and surveillance requirements associated with the limiting condition for operation operability requirements for the CRE emergency ventilation system, and by adding a new TS administrative controls program on CRE habitability. Accompanying the proposed TS change are appropriate conforming technical changes to the TS Bases. The proposed revision to the Bases also includes editorial and administrative changes to reflect applicable changes to the corresponding STS Bases, which were made to improve clarity, conform with the latest information and references, correct factual errors, and achieve more consistency among the STS NUREGs. The proposed revision to the TS and associated Bases is consistent with STS as revised by TSTF-448, Revision 3. *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), an analysis of the issue of no significant hazards consideration is presented below: Criterion 1—The Proposed Change Does Not Involve a Significant Increase in the Probability or Consequences of an Accident Previously Evaluated The proposed change does not adversely affect accident initiators or precursors nor alter the design assumptions, conditions, or configuration of the facility. The proposed change does not alter or prevent the ability of structures, systems, and components
(SSCs)to perform their intended function to mitigate the consequences of an initiating event within the assumed acceptance limits. The proposed change revises the TS for the CRE emergency ventilation system, which is a mitigation system designed to minimize unfiltered air leakage into the CRE and to filter the CRE atmosphere to protect the CRE occupants in the event of accidents previously analyzed. An important part of the CRE emergency ventilation system is the CRE boundary. The CRE emergency ventilation system is not an initiator or precursor to any accident previously evaluated. Therefore, the probability of any accident previously evaluated is not increased. Performing tests to verify the operability of the CRE boundary and implementing a program to assess and maintain CRE habitability ensure that the CRE emergency ventilation system is capable of adequately mitigating radiological consequences to CRE occupants during accident conditions, and that the CRE emergency ventilation system will perform as assumed in the consequence analyses of design basis accidents. Thus, the consequences of any accident previously evaluated are not increased. Therefore, the proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated. Criterion 2—The Proposed Change Does Not Create the Possibility of a New or Different Kind of Accident From Any Previously Evaluated The proposed change does not impact the accident analysis. The proposed change does not alter the required mitigation capability of the CRE emergency ventilation system, or its functioning during accident conditions as assumed in the licensing basis analyses of design basis accident radiological consequences to CRE occupants. No new or different accidents result from performing the new surveillance or following the new program. The proposed change does not involve a physical alteration of the plant (i.e., no new or different type of equipment will be installed) or a significant change in the methods governing normal plant operation. The proposed change does not alter any safety analysis assumptions and is consistent with current plant operating practice. Therefore, this change does not create the possibility of a new or different kind of accident from an accident previously evaluated. Criterion 3—The Proposed Change Does Not Involve a Significant Reduction in the Margin of Safety The proposed change does not alter the manner in which safety limits, limiting safety system settings or limiting conditions for operation are determined. The proposed change does not affect safety analysis acceptance criteria. The proposed change will not result in plant operation in a configuration outside the design basis for an unacceptable period of time without compensatory measures. The proposed change does not adversely affect systems that respond to safely shut down the plant and to maintain the plant in a safe shutdown condition. Therefore, the proposed change does not involve a significant reduction in a margin of safety. Based upon the reasoning presented above and the previous discussion of the amendment request, the requested change does not involve a no-significant-hazards consideration. Dated at Rockville, Maryland, this 4 day of October, 2006. For The Nuclear Regulatory Commission. Timothy J. Kobetz, Branch Chief , Technical Specifications Branch, Division of Inspection and Regional Support, Office of Nuclear Reactor Regulation. The Following Example Of An Application Was Prepared By The NRC Staff To Facilitate Use Of The Consolidated Line Item Improvement Process (Cliip). The Model Provides The Expected Level Of Detail And Content For An Application To Revise According To Tstf-448, Revision 3, Technical Specifications Regarding Control Room Envelope Habitability Using Cliip. Licensees Remain Responsible For Ensuring That Their Actual Application Fulfills Their Administrative Requirements As Well As Nuclear Regulatory Commission Regulations. U.S. Nuclear Regular Commission Document Control Desk Washington, DC 20555 SUBJECT: PLANT NAME DOCKET NO. 50-APPLICATION TO REVISE TECHNICAL SPECIFICATIONS REGARDING CONTROL ROOM ENVELOPE HABITABILITY IN ACCORDANCE WITH TSTF-448, REVISION 3, USING THE CONSOLIDATED LINE ITEM IMPROVEMENT PROCESS Gentlemen: In accordance with the provisions of 10 CFR 50.90 [LICENSEE] is submitting a request for an amendment to the technical specifications
(TS)for [PLANT NAME, UNIT NOS.]. The proposed amendment would modify TS requirements related to control room envelope habitability in accordance with TSTF-448, Revision 3. Attachment 1 provides a description of the proposed change, the requested confirmation of applicability, and plant-specific verifications. Attachment 2 provides the existing TS pages marked up to show the proposed change. Attachment 3 provides revised (clean) TS pages. Attachment 4 provides a summary of the regulatory commitments made in this submittal. [LICENSEE] requests approval of the proposed License Amendment by [DATE], with the amendment being implemented [BY DATE OR WITHIN X DAYS]. In accordance with 10 CFR 50.91, a copy of this application, with attachments, is being provided to the designated [STATE] Official. I declare under penalty of perjury under the laws of the United States of America that I am authorized by [LICENSEE] to make this request and that the foregoing is true and correct. (Note that request may be notarized in lieu of using this oath or affirmation statement). If you should have any questions regarding this submittal, please contact [NAME, TELEPHONE NUMBER] Sincerely, [Name, Title] Attachments: 1. Description and Assessment 2. Proposed Technical Specification Changes 3. Revised Technical Specification Pages 4. Regulatory Commitments 5. Proposed Technical Specification Bases Changes cc: NRC Project Manager NRC Regional Office NRC Resident Inspector State Contact Attachment 1—Description and Assessment 1.0 Description The proposed amendment would modify technical specification
(TS)requirements related to control room envelope habitability in TS 3.7.[10], [Control Room Envelope Emergency Ventilation System (CREEVS)] and TS Section 5.5, “Administrative Controls—Programs.” The changes are consistent with Nuclear Regulatory Commission
(NRC)approved Industry/Technical Specification Task Force
(TSTF)STS change TSTF-448 Revision 3. The availability of this TS improvement was published in the **Federal Register** on [DATE] as part of the consolidated line item improvement process (CLIIP). 2.0 Assessment 2.1 Applicability of Published Safety Evaluation [LICENSEE] has reviewed the safety evaluation dated [DATE] as part of the CLIIP. This review included a review of the NRC staff's evaluation, as well as the supporting information provided to support TSTF-448. [LICENSEE] has concluded that the justifications presented in the TSTF proposal and the safety evaluation prepared by the NRC staff are applicable to [PLANT, UNIT NOS.] and justify this amendment for the incorporation of the changes to the [PLANT] TS. 2.2 Optional Changes and Variations [LICENSEE] is not proposing any variations or deviations from the TS changes described in the TSTF-448, Revision 3, or the NRC staff's model safety evaluation dated [DATE]. [Note: The Applicant should choose one of the following.] [LICENSEE] proposes to reference NEI 99-03, Revision 0, dated June 2001, in the TS bases for TS 3.7.[10], instead of Revision 1, dated March 2003, because the NRC has not formally endorsed Revision 1. [LICENSEE] proposes to reference NEI 99-03, Revision 1, dated March 2003, in the TS bases for TS 3.7.[10], and provides the following descriptions and justifications of the differences with Revision 0, dated June 2003. These justifications demonstrate that referencing Revision 1 does not conflict with the positions taken by the NRC staff in its endorsement of Revision 0 as stated in Regulatory Guide 1.196, “Control Room Habitability at Light-Water Nuclear Power Reactors,” dated May 2003. [Insert descriptions and justifications for differences between Revision 0 and Revision 1 here.] 2.3 License Condition Regarding Initial Performance of New Surveillance and Assessment Requirements [LICENSEE] proposes the following as a license condition to support implementation of the proposed TS changes: Upon implementation of Amendment No. xxx adopting TSTF-448, Revision 3, the determination of control room envelope
(CRE)unfiltered air inleakage as required by SR 3.7.[10].[4], in accordance with TS 5.5.[18].c.(i), the assessment of CRE habitability as required by Specification 5.5.[18].c.(ii), and the measurement of CRE pressure as required by Specification 5.5.[18].d, shall be considered met. Following implementation:
(a)The first performance of SR 3.7.[10.5], in accordance with Specification 5.5.[18].c.(i), shall be within the specified Frequency of 6 years, plus the 15-month allowance of SR 3.0.2, as measured from [date], the date of the most recent successful tracer gas test, as stated in the [date] letter response to Generic Letter 2003-01, or within the next 15 months if the time period since the most recent successful tracer gas test is greater than 6 years.
(b)The first performance of the periodic assessment of CRE habitability, Specification 5.5.[18].c.(ii), shall be within 3 years, plus the 9-month allowance of SR 3.0.2, as measured from [date], the date of the most recent successful tracer gas test, as stated in the [date] letter response to Generic Letter 2003-01, or within the next 9 months if the time period since the most recent successful tracer gas test is greater than 3 years.
(c)The first performance of the periodic measurement of CRE pressure, Specification 5.5.[18].d, shall be within [18] months, plus the [138] days allowed by SR 3.0.2, as measured from [date], the date of the most recent successful pressure measurement test, or within [138] days if not performed previously. 3.0 Regulatory Analysis 3.1 No Significant Hazards Consideration Determination [LICENSEE] has reviewed the proposed no significant hazards consideration determination (NSHCD) published in the **Federal Register** as part of the CLIIP. [LICENSEE] has concluded that the proposed NSHCD presented in the **Federal Register** notice is applicable to [PLANT] and is hereby incorporated by reference to satisfy the requirements of 10 CFR 50.91(a). 3.2 Verification and Commitments As discussed in the notice of availability published in the **Federal Register** on [DATE] for this TS improvement, plant-specific verifications were performed as follows: 1. [LICENSEE] commits to the guidance of NEI 99-03, Revision 0, “Control Room Habitability Assessment Guidance” dated June 2001, which provides guidance and details on the assessment and management of control room envelope
(CRE)habitability. 2. [LICENSEE] will revise procedures to implement the new surveillance and programmatic TS requirements related to CRE habitability. 3. [LICENSEE] commits to Regulatory Positions C.1 and C.2 of Regulatory Guide 1.197, “Demonstrating Control Room Envelope Integrity at Nuclear Power Reactors,” Revision 0, May 2003, with the following exceptions: [Add descriptions of proposed exceptions.] 4.0 Environmental Evaluation [LICENSEE] has reviewed the environmental evaluation included in the model safety evaluation dated [DATE] as part of the CLIIP. [LICENSEE] has concluded that the staff's findings presented in that evaluation are applicable to [PLANT] and the evaluation is hereby incorporated by reference for this application. Attachment 2—Proposed Technical Specification Changes (Mark-Up) Attachment 3—Proposed Technical Specification Pages Attachment 4—List of Regulatory Commitments The following table identifies those actions committed to by [LICENSEE] in this document. Any other statements in this submittal are provided for information purposes and are not considered to be regulatory commitments. Please direct questions regarding these commitments to [CONTACT NAME]. Regulatory commitments Due date/event [LICENSEE] commits to the guidance of NEI 99-03, Revision 0, “Control Room Habitability Assessment Guidance” dated June 2001, which provides guidance and details on the assessment and management of control room envelope
(CRE)habitability [Ongoing or implement with amendment]. [LICENSEE] will revise procedures to implement the new surveillance and programmatic TS requirements related to CRE habitability [Implement with amendment]. [LICENSEE] commits to Regulatory Positions C.1 and C.2 of Regulatory Guide 1.197, “Demonstrating Control Room Envelope Integrity at Nuclear Power Reactors,” Revision 0, May 2003, with the following exceptions: [Implement with amendment]. [Add descriptions of proposed exceptions.] Attachment 5—Proposed Changes to Technical Specification Bases Pages [FR Doc. E6-17246 Filed 10-16-06; 8:45 am] BILLING CODE 7590-01-P OFFICE OF PERSONNEL MANAGEMENT Submission for OMB Review; Comment Request for Review of a Revised Information Collection: RI 25-41 AGENCY: Office of Personnel Management. ACTION: Notice. SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (Pub. L. 104-13, May 22, 1995), this notice announces that the Office of Personnel Management
(OPM)has submitted to the Office of Management and Budget
(OMB)a request for review of a revised information collection. RI 25-41, Initial Certification of Full-Time School Attendance, is used to determine whether a child is unmarried and a full-time student in a recognized school. OPM must determine this in order to pay survivor annuity benefits to children who are age 18 or older. Approximately 1,200 RI 25-41 forms are completed annually. It takes approximately 90 minutes to complete the form. The annual burden is 1,800 hours. For copies of this proposal, contact Mary Beth Smith-Toomey on
(202)606-8358, FAX
(202)418-3251 or via E-mail to *MaryBeth.Smith-Toomey@opm.gov.* Please include a mailing address with your request. DATES: Comments on this proposal should be received within 30 calendar days from the date of this publication. ADDRESSES: Send or deliver comments to— Pamela S. Israel, Chief, Operations Support Group, Center for Retirement and Insurance Services, U.S. Office of Personnel Management, 1900 E Street, NW., Room 3349, Washington, DC 20415-3540. and Brenda Aguilar, OPM Desk Officer, Office of Information & Regulatory Affairs, Office of Management and Budget, New Executive Office Building, NW., Room 10235, Washington, DC 20503. FOR INFORMATION REGARDING ADMINISTRATIVE COORDINATION CONTACT: Cyrus S. Benson, Team Leader, Publications Team, RIS Support Services/Support Group,
(202)606-0623. Office of Personnel Management. Dan G. Blair, Deputy Director. [FR Doc. E6-17157 Filed 10-16-06; 8:45 am] BILLING CODE 6325-38-P OFFICE OF PERSONNEL MANAGEMENT Proposed Collection; Comment Request for Review of a Revised Information Collection: SF 3106 and SF 3106A AGENCY: Office of Personnel Management. ACTION: Notice. SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (Public Law 104-13, May 22, 1995), this notice announces that the Office of Personnel Management
(OPM)intends to submit to the Office of Management and Budget
(OMB)a request for review of a revised information collection. SF 3106, Application for Refund of Retirement Deductions/Federal Employees Retirement System (FERS), is used by former Federal employees under FERS, to apply for a refund of retirement deductions withheld during Federal employment, plus any interest provided by law. SF 3106A, Current/Former Spouse(s) Notification of Application for Refund of Retirement Deductions Under FERS, is used by refund applicants to notify their current/former spouse(s) that they are applying for a refund of retirement deductions, which is required by law. *Comments are particularly invited on:* whether this collection of information is necessary for the proper performance of functions of the Office of Personnel Management, and whether it will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; and ways in which we can minimize the burden of the collection of information on those who are to respond, through the use of appropriate technological collection techniques or other forms of information technology. Approximately 17,000 SF 3106 forms will be processed annually. The SF 3106 takes approximately 30 minutes to complete for a total of 8,500 hours annually. Approximately 13,600 of SF 3106A forms will be processed annually. The SF 3106A takes approximately 5 minutes to complete for a total of 1,133 hours. The total annual burden is 9,633 hours. For copies of this proposal, contact Mary Beth Smith-Toomey on
(202)606-8358, FAX
(202)418-3251 or via E-mail to *MaryBeth.Smith-Toomey@opm.gov.* Please include a mailing address with your request. DATES: Comments on this proposal should be received within 60 calendar days from the date of this publication. ADDRESSES: Send or deliver comments to—Pamela S. Israel, Chief, Operations Support Group, Center for Retirement and Insurance Services, U.S. Office of Personnel Management, 1900 E Street, NW., Room 3349,Washington, DC 20415-3540. *For Information Regarding Administrative CoordinatioN Contact:* Cyrus S. Benson, Team Leader, Publications Team, RIS Support Services/Support Group,
(202)606-0623. Office of Personnel Management. Dan G. Blair, Deputy Director. [FR Doc. E6-17158 Filed 10-16-06; 8:45 am] BILLING CODE 6325-38-P OFFICE OF PERSONNEL MANAGEMENT Submission for OMB Review; Comment Request for Reclearance of a Revised Information Collection: RI 30-2 AGENCY: Office of Personnel Management. ACTION: Notice. SUMMARY: In accordance with the Paperwork Reduction Act of 1995 (Pub. L. 104-13, May 22, 1995), this notice announces that the Office of Personnel Management
(OPM)has submitted to the Office of Management and Budget
(OMB)a request for reclearance of a revised information collection. RI 30-2, Annuitant's Report of Earned Income, is used annually to determine if disability retirees under age 60 have earned income which will result in the termination of their annuity benefits. We estimate 21,000 RI 30-2 forms are completed annually. The RI 30-2 takes approximately 35 minutes to complete for an estimated annual burden of 12,250 hours. For copies of this proposal, contact Mary Beth Smith-Toomey on
(202)606-8358, Fax
(202)418-3251 or via e-mail to *MaryBeth.Smith-Toomey@opm.gov* . Please include a mailing address with your request. DATES: Comments on this proposal should be received within 30 calendar days from the date of this publication. ADDRESSES: Send or deliver comments to—Pamela S. Israel, Chief, Operations Support Group, Center for Retirement and Insurance Services, U.S. Office of Personnel Management, 1900 E Street, NW., Room 3349, Washington, DC 20415-3540 and Brenda Aguilar, OPM Desk Officer, Office of Information & Regulatory Affairs, Office of Management and Budget, New Executive Office Building, NW., Room 10235, Washington, DC 20503. *For Information Regarding Administrative Coordination Contact:* Cyrus S. Benson, Team Leader, Publications Team, RIS Support Services/Support Group,
(202)606-0623, Room 10235, Washington, DC 20503. Office of Personnel Management. Dan G. Blair, Deputy Director. [FR Doc. E6-17160 Filed 10-16-06; 8:45 am] BILLING CODE 6325-38-P OFFICE OF PERSONNEL MANAGEMENT Federal Employees Health Benefits Program:Medically Underserved Areas for 2007 AGENCY: Office of Personnel Management. ACTION: Notice of medically underserved areas for 2007. SUMMARY: The Office of Personnel Management
(OPM)has completed its annual determination of the States that qualify as Medically Underserved Areas under the Federal Employees Health Benefits
(FEHB)Program for calendar year 2007. This is necessary to comply with a provision of the FEHB law that mandates special consideration for enrollees of certain FEHB plans who receive covered health services in States with critical shortages of primary care physicians. Accordingly, for calendar year 2007, OPM's calculations show that the following states are Medically Underserved Areas under the FEHB Program: Alabama, Arizona, Idaho, Kentucky, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, South Carolina, South Dakota, Texas, West Virginia, and Wyoming. For the 2007 calendar year Texas is being added and Alaska is being removed from the list. DATES: *Effective Date:* January 1, 2007. FOR FURTHER INFORMATION CONTACT: Ingrid Burford, 202-606-0004. SUPPLEMENTARY INFORMATION: FEHB law (5 U.S.C. 8902(m)(2)) mandates special consideration for enrollees of certain FEHB plans who receive covered health services in States with critical shortages of primary care physicians. The FEHB law also requires that a State be designated as a Medically Underserved Area if 25 percent or more of the population lives in an area designated by the Department of Health and Human Services
(HHS)as a primary medical care manpower shortage area. Such States are designated as Medically Underserved Areas for purposes of the FEHB Program, and the law requires non-HMO FEHB plans to reimburse beneficiaries, subject to their contract terms, for covered services obtained from any licensed provider in these States. FEHB regulations (5 CFR 890.701) require OPM to make an annual determination of the States that qualify as Medically Underserved Areas for the next calendar year by comparing the latest HHS State-by-State population counts on primary medical care manpower shortage areas with U.S. Census figures on State resident populations. Office of Personnel Management. Linda M. Springer, Director. [FR Doc. E6-17161 Filed 10-16-06; 8:45 am] BILLING CODE 6325-39-P SECURITIES AND EXCHANGE COMMISSION [Release No. IC-27516; File No. 812-13301] MONY Life Insurance Company of America, et al. October 12, 2006. AGENCY: The Securities and Exchange Commission (“Commission”). ACTION: Notice of application for an order pursuant to Section 26(c) of the Investment Company Act of 1940 (the “1940 Act”) approving certain substitutions of securities and an order of exemption pursuant to Section 17(b) of the 1940 Act from Section 17(a) of the 1940 Act. Summary of Application: The Section 26 Applicants (as defined below) request an order approving the proposed substitution of shares of certain series of EQ Advisors Trust (“EQAT”) and AXA Premier VIP Trust (“VIP”, together with EQAT, the “Trusts,” and each, a “Trust”), by the Separate Accounts (as defined below) for shares of similar series of unaffiliated registered investment companies (the “Substitutions”). In particular, the Section 26 Applicants request an order pursuant to Section 26(c) approving the substitution of:
(1)Class IA shares of the EQ/Calvert Socially Responsible Portfolio for Initial Class shares of The Dreyfus Socially Responsible Growth Fund, Inc.;
(2)Class IA shares of the EQ/Mercury International Value Portfolio for Initial Class shares of the Dreyfus Variable Investment Fund—International Value Portfolio;
(3)Class IA shares of the EQ/Lord Abbett Growth and Income Portfolio for Class VC shares of the Lord Abbett Series Fund—Growth and Income Portfolio;
(4)Class IA shares of the EQ/Short Duration Bond Portfolio for shares of the T. Rowe Price Fixed Income Series, Inc.—Limited-Term Bond Portfolio;
(5)Class IA shares of EQ/Money Market Portfolio for shares of the T. Rowe Price Fixed Income Series, Inc.—Prime Reserve Portfolio;
(6)Class IA shares of the EQ/Alliance International Portfolio for shares of the T. Rowe Price International Series, Inc.—International Stock Portfolio;
(7)Class IA shares of the EQ/Van Kampen Emerging Markets Equity Portfolio for Class I shares of The Universal Institutional Funds, Inc.—Emerging Markets Equity Portfolio;
(8)Class IA shares of the EQ/FI Mid Cap Portfolio for shares of the Old Mutual Insurance Series Fund—Mid-Cap Portfolio;
(9)Class IA shares of the EQ/Lord Abbett Mid Cap Value Portfolio for Class VC shares of the Lord Abbett Series Fund—Mid-Cap Value Portfolio;
(10)Class IA shares of the EQ/JPMorgan Core Bond Portfolio for Administrative Class shares of the PIMCO Variable Insurance Trust—Real Return Portfolio; and
(11)Class A shares of the AXA Premier VIP High Yield Portfolio for Class VC shares of the Lord Abbett Series Fund—Bond Debenture Portfolio. Applicants also request an order of exemption to permit certain in-kind transactions in connection with the proposed Substitutions (the “In-Kind Transactions”). Each of the portfolios involved in the Substitutions serves as an underlying investment option for certain variable annuity contracts and/or variable life insurance policies (“Contracts”) issued by the Insurance Companies (as defined below). The portfolios receiving assets in the Substitutions are referred to in this notice as the “Replacement Portfolios.” The portfolios from which the assets are transferred in connection with the Substitutions are referred to in this notice as the “Removed Portfolios.” Applicants: MONY Life Insurance Company of America (“MLOA”), MONY Life Insurance Company (“MONY”, with MLOA, each an “Insurance Company” and collectively, the “Insurance Companies”), MONY America Variable Account A (“MLOA Separate Account A”), MONY America Variable Account L (“MLOA Separate Account L” and together with MLOA Separate Account A, “MLOA Separate Accounts”), MONY Variable Account A (“MONY Separate Account A”) and MONY Variable Account L (“MONY Separate Account L” and together with MONY Separate Account A, “MONY Separate Accounts”) (the MONY Separate Accounts and the MLOA Separate Accounts are referred to as the “Separate Accounts” and individually as a “Separate Account”) (the Separate Accounts and the Insurance Companies are referred to as the “Section 26 Applicants”). EQAT is also an applicant for purposes of the order pursuant to Section 17(b) together with the Insurance Companies and the Separate Accounts (the “Section 17 Applicants”). Filing Date: The application was filed on June 1, 2006 and amended on October 6, 2006. Hearing or Notification of Hearing: An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Secretary of the Commission and serving Applicants with a copy of the request personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on November 2, 2006 and should be accompanied by proof of service on 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 Secretary of the Commission. ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090. Applicants: c/o Steven M. Joenk, Senior Vice President, AXA Equitable Life Insurance Company, 1290 Avenue of the Americas, New York, New York 10104. FOR FURTHER INFORMATION CONTACT: Ellen Sazzman, Senior Counsel, at
(202)551-6762, or Harry Eisenstein, Branch Chief, Office of Insurance Products at
(202)551-6795, Office of Insurance Products, Division of Investment Management. SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained for a fee from the Public Reference Branch of the Commission, 100 F Street, NE., Washington, DC 20549 (tel.
(202)551-8090). Applicants' Representations 1. MLOA is a stock life insurance company organized in 1969 under the laws of the State of Arizona. MLOA is licensed to sell life insurance and annuities in 49 states (not including New York), the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. MONY is a stock life insurance company organized in 1998 under the laws of New York. MONY is licensed to sell life insurance and annuities in 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Each Insurance Company is a wholly owned subsidiary of AXA Financial, Inc., a diversified financial services company, which is a wholly owned subsidiary of the AXA Group, the holding company for an international group of insurance and related financial services companies. MLOA serves as depositor for each of the MLOA Separate Accounts; MONY serves as depositor for each of the MONY Separate Accounts. 2. MLOA Separate Account A and MLOA Separate Account L were established under Arizona law in 1987 and 1985, respectively, pursuant to authority granted by MLOA's Board of Directors. Each MLOA Separate Account is a segregated asset account of MLOA and is registered with the Commission as a unit investment trust under the 1940 Act. The MLOA Separate Accounts fund the respective variable benefits available under the Contracts issued by MLOA. Units of interest in the MLOA Separate Accounts under the Contracts are registered under the Securities Act of 1933 (“1933 Act”). 1 1 *See* File Nos. 333-72632, 333-91776, 333-59717, 333-92066 (MLOA Separate Account A) and 333-06071, 333-104162, 333-72596, 333-56969, 33-82570, 333-64417, 333-72578 (MLOA Separate Account L). 3. MONY Separate Account A and MONY Separate Account L were each established under New York law in 1990 pursuant to authority granted by MONY's Board of Trustees. Each MONY Separate Account is a segregated asset account of MONY and is registered with the Commission as a unit investment trust under the 1940 Act. The MONY Separate Accounts fund the respective variable benefits available under the Contracts issued by MONY. Units of interest in the MONY Separate Accounts under the Contracts are registered under the 1933 Act. 2 2 *See* File No. 333-72714, 333-92320, 333-92312, 333-72259 (MONY Separate Account A) and 333-104156, 333-71417, 333-01581, 333-72590, 333-71677, 333-72594 (MONY Separate Account L). 4. EQAT and VIP are each organized as a Delaware statutory trust and registered as an open-end management investment company under the 1940 Act. Each is an affiliate of the Section 26 Applicants. The shares of each Trust are registered under the 1933 Act. Each Trust is a series investment company. EQAT currently has 63 separate series and VIP currently has 20 separate series (each a “Portfolio” and collectively, the “Portfolios”). AXA Equitable Life Insurance Company currently serves as investment manager (“Manager”) of each of the Portfolios. The Replacement Portfolios are series of the Trusts. The Removed Portfolios are series of unaffiliated registered investment companies. 5. Each Trust currently offers two classes of shares, Class IA and Class IB shares for EQAT and Class A and Class B shares for VIP, which differ only in that Class IB and Class B shares are subject to a distribution plan adopted and administered pursuant to Rule 12b-1 under the 1940 Act. Under that distribution plan, up to 0.50% of the average daily net assets attributable to the Class IB or Class B shares of each Portfolio may be used to pay for distribution and shareholder services. The distributors for the shares of each Portfolio are AXA Advisors, LLC (“AXA Advisors”) and AXA Distributors, LLC (“AXA Distributors”). Under the Distribution Agreements with respect to the promotion, sale and servicing of shares of each Portfolio, payments to AXA Advisors and AXA Distributors, with respect to activities under the distribution plan, are currently limited to payments at an annual rate equal to 0.25% of the average daily net assets of each Portfolio (including the Replacement Portfolios) attributable to its Class IB or Class B shares. 6. The Manager has retained investment sub-advisers (“Advisers”) to provide day-to-day investment advisory services for each of the 61 of the 63 current EQAT Portfolios and 11 of the 20 current VIP Portfolios. The Trusts have received an exemptive order from the Commission (“Multi-Manager Order”) that permits the Manager, or any entity controlling, controlled by, or under common control (within the meaning of Section 2(a)(9) of the 1940 Act) with the Manager, subject to certain conditions, including approval of the Board of Trustees of the relevant Trust, and without the approval of shareholders to:
(i)Select new or additional Advisers for each Portfolio;
(ii)enter into new Investment Advisory Agreements with Advisers (“Advisory Agreements”) and/or materially modify the terms of any existing Advisory Agreement;
(iii)terminate any existing Adviser and replace the Adviser; and
(iv)continue the employment of an existing Adviser on the same contract terms where the Advisory Agreement has been assigned because of a change of control of the Adviser. 7. The variable annuity Contracts subject to this Application include flexible premium deferred variable annuity contracts with a variety of sales charge structures. These variable annuity Contracts are issued to or on behalf of individuals. All variable annuity Contracts allow the Contract owner to allocate contributions or premium payments among the variable and any fixed investment options available under the variable annuity Contracts. The contributions or premium payments accumulate in the investment options. The variable life insurance Contracts issued by the Insurance Companies include flexible premium individual variable life, second to die and corporate variable life policies. Premium payments under the variable life insurance Contracts accumulate in variable and any fixed investment options. 8. The Section 26 Applicants have reserved the right under the Contracts to substitute shares of another eligible investment fund for one of the current investment funds offered as a funding option under the Contracts. The prospectuses for the Contracts and the Separate Accounts contain appropriate disclosure of this right. 9. The Contracts do not restrict transfers from a variable subaccount and there are no limits on transfers into a variable subaccount or a guaranteed account (for those Contracts that offer a guaranteed account investment option), although transfer charges may apply. For those variable annuity Contracts that offer a guaranteed account investment option, except with respect to New York variable annuity Contracts, transfers from the guaranteed account are subject to a market value adjustment if the transfer request is not received at the end of the prescribed accumulation period. In addition, for New York variable annuity Contracts, a minimum amount must be maintained in a guaranteed account for those Contracts that have investments in such accounts and a minimum number of free transfers are guaranteed. For variable life insurance Contracts that offer a guaranteed account investment option, there is a dollar limit on the amount that can be held in, and the amount that may be transferred from, the guaranteed account. Also with respect to variable life insurance Contracts, transfers from a guaranteed account may only be made once a year. With respect to certain variable life insurance Contracts, including New York life insurance Contracts, there are a minimum number of free transfers guaranteed. With respect to corporate-owned life insurance Contracts, transfers are not permitted between a guaranteed account and a fixed separate account. 10. Each Insurance Company, on its own behalf and on behalf of its Separate Accounts, proposes to exercise its contractual right to substitute a different eligible investment fund for one of the current investment funds offered as a funding option under the Contracts. In particular, the Section 26 Applicants propose the following substitutions: Removed portfolios Replacement portfolios The Dreyfus Socially Responsible Growth Fund, Inc. (Initial Class shares) EQ/Calvert Socially Responsible Portfolio (Class IA shares). Dreyfus Variable Investment Fund—International Value Portfolio (Initial Class shares) EQ/Mercury International Value Portfolio (Class IA shares). Lord Abbett Series Fund—Growth and Income Portfolio (Class VC shares) EQ/Lord Abbett Growth and Income Portfolio (Class IA shares). T. Rowe Price Fixed Income Series, Inc.—Limited-Term Bond Portfolio EQ/Short Duration Bond Portfolio (Class IA shares). T. Rowe Price Fixed Income Series, Inc.—Prime Reserve Portfolio EQ/Money Market Portfolio (Class IA shares). T. Rowe Price International Series, Inc.—International Stock Portfolio lEQ/Alliance International Portfolio (Class IA shares). The Universal Institutional Funds, Inc.—Emerging Markets Equity Portfolio (Class I shares) EQ/Van Kampen Emerging Markets Equity Portfolio (Class IA shares). Old Mutual Insurance Series Fund—Mid-Cap Portfolio EQ/FI Mid Cap Portfolio (Class IA shares). Lord Abbett Series Fund—Mid-Cap Value Portfolio (Class VC shares) EQ/Lord Abbett Mid Cap Value Portfolio (Class IA shares). PIMCO Variable Insurance Trust—Real Return Portfolio (Administrative Class shares) EQ/JPMorgan Core Bond Portfolio (Class IA shares). Lord Abbett Series Fund—Bond-Debenture Portfolio (Class VC shares) AXA Premier VIP High Yield Portfolio (Class A shares). 11. The Section 26 Applicants propose the Substitutions as part of a continued and overall business plan by each of the Insurance Companies to make its Contracts more attractive to existing Contract owners or to prospective purchasers, as the case may be. Each Insurance Company has reviewed its Contracts and each investment option offered under its Contracts with the goal of providing a superior choice of investment alternatives. The Substitutions are being proposed to address the lack of Contract owner interest in the Removed Portfolios, which generally have not attracted sufficient Contract owner interest to support maintaining them as separate investment options under the Contracts, particularly where they duplicate or substantially overlap with other investment options offered through the Separate Accounts. The Substitutions also are intended to simplify the prospectuses and related materials with respect to the Contracts and the investment options available through the Separate Accounts. Additionally, each Substitution will substitute shares of the Replacement Portfolio for shares of the Removed Portfolio, which has similar investment objectives, policies and risks as the Replacement Portfolio. In addition, the Insurance Companies have agreed to impose certain expense limits with respect to the Replacement Portfolios for certain periods after the Substitutions, as described below. Furthermore, the Substitutions ultimately may enable the Insurance Companies to reduce certain of the costs that they incur in administering the Contracts by removing overlapping and unpopular Portfolios. Moreover, the proposed Substitutions would replace an unaffiliated Portfolio with a Portfolio for which AXA Equitable serves as Manager and, thus, would permit AXA Equitable to appoint, dismiss and replace Advisers and amend Advisory Agreements as necessary to seek optimal performance from the Portfolio and its portfolio managers. Finally, the Substitutions are designed to provide Contract owners with an opportunity to continue their investment in a similar Portfolio without interruption and without any cost to them. 12. The Insurance Companies have agreed to bear all expenses incurred in connection with the Substitutions and related filings and notices, including legal, accounting, brokerage and other fees and expenses. On the effective date of the Substitutions (“Substitution Date”), the amount of any Contract owner's Contract value or the dollar value of a Contract owner's investment in the relevant Contract will not change as a result of the Substitutions. 13. The following is a description and comparison of the investment objectives, policies and risks of each Removed Portfolio and its corresponding Replacement Portfolio:
(1)Removed Portfolio Replacement Portfolio The Dreyfus Socially Responsible Growth Fund, Inc. (Initial Class shares): The Portfolio seeks to provide capital growth, with current income as a secondary goal. Under normal circumstances, the Portfolio invests at least 80% of its assets in common stocks of companies that the manager believes meet traditional investment standards and conduct their business in a manner that contributes to the enhancement of the quality of life in America. The Portfolio normally focuses on large-cap growth stocks. The Portfolio may also invest in value-oriented stocks, mid-cap stocks and small-cap stocks. The Portfolio may invest in foreign securities. The Portfolio may invest in securities of companies in initial public offerings (“IPOs”) and derivatives. The Portfolio may invest up to 15% of the value of its net assets in illiquid securities. EQ/Calvert Socially Responsible Portfolio (Class IA shares): The Portfolio seeks long-term capital appreciation. Under normal circumstances, the Portfolio invests at least 80% of its net assets in large-cap companies that meet both investment and social criteria. The Adviser utilizes multiple investment styles in selecting securities including growth, growth at a reasonable price, value and momentum models. The Portfolio may invest up to 10% of its total assets in foreign securities and up to 15% of its net assets in illiquid securities. The Portfolio also may invest in derivatives and in securities issued in an IPO. Principal Risks: Principal Risks: • Market Risk • Market Risk • Issuer Risk • Asset Class Risk • Market Sector Risk • Equity Risk • Social Investment Risk • Adviser Selection Risk • Small and Midsize Company Risk • Security Selection Risk • Growth Stock Risk • Derivatives Risk • Value Stock Risk • Foreign Securities Risk • Foreign Investment Risk • Security Risk • Liquidity Risk • Mid-Cap Company Risk The Section 26 Applicants believe that The Dreyfus Socially Responsible Growth Fund, Inc. and the EQ/Calvert Socially Responsible Portfolio have substantially similar investment objectives, policies and risks and that the essential objectives and expectations of Contract owners will continue to be met after the Substitution. In this connection, the Section 26 Applicants note that each Portfolio invests virtually all of its assets in securities of companies that satisfy both social and investment criteria. Each Portfolio invests mostly in large-cap companies, but also may invest in small- and mid-cap companies. In addition, the Section 26 Applicants believe that the Portfolios' advisers use comparable investment styles in managing each Portfolio's assets and that, while the principal risks are stated somewhat differently, the Portfolios have substantially similar risk profiles. Each Portfolio is subject to general investment risks, such as market risk, asset class risk and security risk, and to very similar portfolio risks, such as equity risk, social investing risk and foreign securities risk.
(2)Removed Portfolio Replacement Portfolio Dreyfus Variable Investment Fund—International Value Portfolio (Initial Class shares): The Portfolio seeks long term capital growth. The Portfolio normally invests at least 80% of its assets in stocks. The Portfolio invests most of its assets in securities of foreign companies which the adviser considers to be value companies. The Portfolio may invest in securities of companies of any size and may invest in companies located in emerging markets. The Portfolio also may invest in stocks issued in an IPO, it may invest in derivatives and it may make short sales. EQ/Mercury International Value Portfolio (Class IA shares): The Portfolio seeks to provide current income and long-term growth of income, accompanied by growth of capital. Under normal circumstances, the Portfolio invests at least 80% of its net assets, plus borrowings for investment purposes, in stocks that pay dividends. Stocks may include common stocks, preferred stocks, securities convertible into common or preferred stocks and warrants. The Portfolio invests primarily in securities of companies located in developed foreign markets, but may invest in securities issued by companies located in emerging markets. In investing the Portfolio's assets, the Adviser follows a value investment style. The Portfolio may invest in companies of any size, although it generally will invest in large cap companies. The Portfolio also may invest in derivatives and in securities issued in an IPO. Principal Risks: Principal Risks: • Market Risk • Market Risk • Issuer Risk • Asset Class Risk • Market Sector Risk • Equity Risk • Small and Midsize Company Risk • Adviser Selection Risk • Value Stock Risk • Security Selection Risk • Foreign Investment Risk • Convertible Securities Risk • Foreign Currency Risk • Derivatives Risk • Emerging Market Risk • Liquidity Risk • Derivatives Risk • Small-Cap and Mid-Cap Company Risk • Short Sale Risk • Value Investing Risk • IPO Risk • Security Risk • Foreign Securities Risk • Currency Risk • Depositary Receipts Risk • Emerging Market Risk • Settlement Risk The Section 26 Applicants believe that the Dreyfus Variable Investment Fund—International Value Portfolio and the EQ/Mercury International Value Portfolio have similar investment objectives and substantially similar investment policies and risks. The Section 26 Applicants also believe that the essential objectives and expectations of Contract owners will continue to be met after the Substitution. In this connection, the Section 26 Applicants note that each Portfolio invests virtually all of its assets in foreign stocks. In addition, the Section 26 Applicants believe that the Portfolios' advisers use a value investment style in managing each Portfolio's assets. Each Portfolio may invest in companies of any size and in companies located in emerging markets. Moreover, the Section 26 Applicants believe that while the principal risks are stated somewhat differently, the Portfolios have substantially similar risk profiles. The Section 26 Applicants note that each Portfolio is subject to general investment risks, such as market risk, asset class risk and security risk, and to very similar portfolio risks, such as equity risk, foreign securities and emerging markets risk and value investing risk.
(3)Removed portfolio Replacement portfolio Lord Abbett Series Fund—Growth and Income Portfolio (Class VC shares): The Portfolio seeks long term growth of capital and income without excessive fluctuations in market value. Under normal circumstances, the Portfolio will invest at least 80% of its net assets in equity securities of large companies. The Portfolio primarily purchases equity securities of large, seasoned U.S. and multi-national companies that the adviser believes are undervalued. Equity securities in which the Portfolio may invest may include common stocks, preferred stocks, convertible securities, warrants, and similar instruments. The Portfolio may purchase and write national securities exchange-listed put and call options on securities or securities indices and it may use options for hedging or cross-hedging purposes or to seek to increase total return EQ/Lord Abbett Growth and Income Portfolio (Class IA shares): The Portfolio seeks capital appreciation and growth of income without excessive fluctuation in market value. Under normal circumstances, the Portfolio invests at least 80% of its net assets in equity securities of large companies. The Portfolio primarily purchases equity securities of large, seasoned U.S. and multi-national companies that the Adviser believes are undervalued. Equity securities in which the Portfolio may invest include common stocks, preferred stocks, convertible securities, warrants, and similar instruments. The Portfolio may purchase and write exchange-listed put and call options on securities or securities indices for hedging or cross-hedging purposes or to seek to increase total return. Principal Risks: • Market Risk • Asset Class Risk • Equity Risk • Security Selection Risk • Liquidity Risk • Foreign Securities Risk • Security Risk • Value Investing Risk Principal Risks: • Convertible Securities Risk • Derivatives Risk • Futures and Options Risk • Security Selection Risk • Equity Risk • Foreign Securities Risk • Value Investing Risk • Adviser Selection Risk • Asset Class Risk • Market Risk • Security Risk The Section 26 Applicants believe that the Lord Abbett Series Fund—Growth and Income Portfolio and the EQ/Lord Abbett Growth and Income Portfolio have substantially identical investment objectives, policies and risks and that the essential objectives and expectations of Contract owners will continue to be met after the Substitution. In this connection, the Section 26 Applicants note that each Portfolio invests virtually all of its assets in equity securities of large companies. Each Portfolio also may invest in foreign securities and derivatives for hedging and non-hedging purposes to the same extent. In addition, the Section 26 Applicants believe that the adviser to each Portfolio, which is the same for both Portfolios, uses an identical investment style in managing each Portfolio's assets and that, while the principal risks are stated somewhat differently, the Portfolios have substantially identical risk profiles. Each Portfolio is subject to general investment risks, such as market risk, asset class risk and security risk, and to substantially identical portfolio risks, such as equity risk, foreign securities risk and value investing risk.
(4)Removed portfolio Replacement portfolio T. Rowe Price Fixed Income Series, Inc.—Limited-Term Bond Portfolio: The Portfolio seeks a high level of current income consistent with moderate fluctuations in principal value. Normally, the Portfolio invests at least 80% of its net assets in bonds and 65% of total assets in short- and intermediate-term bonds. There are no maturity limitations on individual securities purchased, but the Portfolio's average effective maturity will not exceed five years. At least 90% of the Portfolio's assets will consist of investment grade securities and up to 10% of its assets can be invested in below investment grade securities. The Portfolio's holdings may include mortgage-backed securities, derivatives and foreign securities. There is no limit on the Portfolio's investments in U.S. dollar-denominated debt securities issued by foreign issuers, foreign branches of U.S. banks, and U.S. branches of foreign banks, however, the Portfolio may only invest up to 10% of its total assets (excluding reserves) in non-U.S. dollar-denominated fixed-income securities EQ/Short Duration Bond Portfolio (Class IA shares): The Portfolio seeks current income and reduced volatility of principal. Under normal circumstances, the Portfolio invests at least 80% of its net assets, plus borrowings for investment purposes, in bonds and other debt securities. These securities include U.S. Government bonds and notes, corporate bonds, municipal bonds, asset-backed bonds, mortgage-related bonds, convertible securities and preferred stocks. The Portfolio intends to invest only in investment grade fixed income securities and seeks to maintain a minimum average credit quality rating of “A.” The Portfolio may invest in securities with effective or final maturities of any length at the time of purchase, but it is anticipated that the average effective maturity of the Portfolio will range from one to four years. The average duration of the overall Portfolio will be between one and three years. The Portfolio also may invest in derivatives and up to 20% of its total assets in U.S. dollar denominated fixed income securities of foreign issuers. Principal Risks: Principal Risks: • Interest Rate Risk • Market Risk • Credit Risk • Asset Class Risk • Prepayment and Extension Risk • Adviser Selection Risk • Derivatives Risk • Security Selection Risk • Foreign Investing Risk • Derivatives Risk • Fixed Income Risk • Asset-Backed Securities Risk • Credit Risk • Interest Rate Risk • Investment Grade Securities Risk • Mortgage-Backed Securities Risk • Foreign Securities Risk • Security Risk The Section 26 Applicants believe that the T. Rowe Price Fixed Income Series, Inc.—Limited-Term Bond Portfolio and the EQ/Short Duration Bond Portfolio have substantially similar investment objectives, policies and risks and that the essential objectives and expectations of Contract owners will continue to be met after the Substitution. In this connection, the Section 26 Applicants note that each Portfolio invests virtually all of its assets in investment grade bonds and seeks to maintain an average effective maturity that is generally within the same range. Each Portfolio may invest in the same types of debt securities, such as asset-backed and mortgage-backed securities. Each Portfolio also may invest in U.S. dollar-denominated debt securities of foreign issuers and derivatives. Moreover, the Section 26 Applicants believe that while the principal risks are stated somewhat differently, the Portfolios have substantially similar risk profiles. Each Portfolio is subject to general investment risks, such as asset class risk and security risk, and to very similar portfolio risks, such as fixed income risk, including credit risk and interest rate risk, foreign securities risk and derivatives risk.
(5)Removed Portfolio Replacement Portfolio T. Rowe Price Fixed Income Series, Inc.—Prime Reserve Portfolio: The Portfolio seeks to preserve capital, liquidity and, consistent with these, the highest possible current income. The Portfolio is a money market fund, which is managed to provide a stable share price of $1.00 and invests in high-quality U.S. dollar-denominated money market securities. The fund's average weighed maturity will not exceed 90 days and it will not purchase any security with a maturity longer than 13 months EQ/Money Market Portfolio (Class IA shares): The Portfolio seeks to obtain a high level of current income, preserve its assets and maintain liquidity. The Portfolio invests primarily in a diversified portfolio of high-quality U.S. dollar denominated money market instruments. The Portfolio will maintain a dollar-weighted average portfolio maturity of 90 days or less and will invest only in instruments with a remaining maturity of 397 calendar days or less. The Portfolio may invest in mortgaged-backed and asset-backed securities and normally invests at least 25% of its net assets in bank obligations. The Portfolio may also invest up to 20% of its total assets in U.S. dollar denominated money market instruments of foreign branches of foreign banks. Principal Risks: Principal Risks: • Credit Risk • Market Risk • Interest Rate Risk • Asset Class Risk • Money Market Risk • Adviser Selection Risk • Security Selection Risk • Banking Industry Sector Risk • Foreign Securities Risk • Security Risk • Money Market Risk • Fixed Income Risk • Credit Risk • Interest Rate Risk • Asset-Backed Securities Risk • Mortgage-Backed Securities Risk The Section 26 Applicants believe that the T. Rowe Price Fixed Income Series, Inc.—Prime Reserve Portfolio and the EQ/Money Market Portfolio have substantially identical investment objectives, policies and risks and that the essential objectives and expectations of Contract owners will continue to be met after the Substitution. In this connection, the Section 26 Applicants note that each Portfolio is a money market fund and invests all of its assets in high-quality U.S. dollar denominated money market instruments permitted under Rule 2a-7 under the 1940 Act. In addition, each Portfolio is managed to maintain a stable share price of $1.00 and has an average weighted maturity that will not exceed 90 days. The Section 26 Applicants believe that the Portfolios also have substantially identical risk profiles. Each Portfolio is subject to general investment risks, such as asset class risk and security risk, and to very similar portfolio risks, such as money market risk and fixed income risk, including credit risk and interest rate risk.
(6)Removed portfolio Replacement portfolio T. Rowe Price International Series, Inc.—International Stock Portfolio: The Portfolio seeks long-term growth of capital through investments primarily in common stocks of established, non-U.S. companies. Normally, at least 80% of the Portfolio's net assets will be invested in stocks. The Portfolio expects to invest substantially all of its assets in stocks outside the U.S. and to diversify broadly among developed and emerging countries throughout the world. The Portfolio utilizes an investment style that incorporates growth and value investing components. The Portfolio may purchase securities of any size, but focuses on large and, to a lesser extent, medium-sized companies. The Portfolio may invest in derivatives EQ/Alliance International Portfolio (Class IA shares): The Portfolio seeks to achieve long-term growth of capital. The Portfolio intends, under normal market conditions, to invest primarily in equity securities. The Portfolio invests in both growth-oriented and value-oriented stocks of non-U.S. companies. The growth portion of the Portfolio invests primarily in a diversified portfolio of equity securities of non-U.S. companies or foreign governmental enterprises from anywhere in the world (including in emerging markets). The value portion of the Portfolio invests primarily in equity securities of issuers in countries that comprise the MSCI EAFE Index and Canada. The Portfolio also may invest in any investment grade fixed income security and in derivatives. Principal Risks: Principal Risks: • Currency Risk • Market Risk • Geographic Risk • Asset Class Risk • Emerging Market Risk • Adviser Selection Risk • Foreign Investing Risk • Security Selection Risk • Futures/Options Risk • Security Risk • Convertible Securities Risk • Derivatives Risk • Equity Risk • Fixed Income Risk • Investment Grade Securities Risk • Interest Rate Risk • Foreign Securities Risk • Currency Risk • Emerging Markets Risk • Value Investing Risk • Growth Investing Risk The Section 26 Applicants believe that the T. Rowe Price International Series, Inc.—International Stock Portfolio and the EQ/Alliance International Portfolio have substantially similar investment objectives, policies and risks and that the essential objectives and expectations of Contract owners will continue to be met after the Substitution. In this connection, the Section 26 Applicants note that each Portfolio invests virtually all of its assets in equity securities of foreign companies. Each Portfolio may invest companies in developed and emerging markets. Each Portfolio also invests mostly in large-cap companies, but may invest in smaller companies as well. In addition, the Section 26 Applicants believe that the adviser to each Portfolio uses comparable investment styles in managing each Portfolio's assets and that, while the principal risks are stated somewhat differently, the Portfolios have substantially similar risk profiles. Each Portfolio is subject to general investment risks, such as market risk, asset class risk and security risk, and to very similar portfolio risks, such as equity risk, foreign securities and emerging markets risk and growth investing risk.
(7)Removed Portfolio Replacement Portfolio The Universal Institutional Funds, Inc.—Emerging Markets Equity Portfolio (Class I shares): The Portfolio seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of issuers in emerging market countries. Under normal circumstances, at least 80% of the Portfolio's assets will be invested in equity securities located in emerging market countries. The Portfolio combines top-down country allocation with bottom-up stock selection. The Portfolio also may invest in derivatives and, to a limited extent, in U.S. Government securities and debt securities rated below investment grade (also known as “junk bonds”) EQ/Van Kampen Emerging Markets Equity Portfolio (Class IA shares): The Portfolio seeks long-term capital appreciation. Under normal circumstances, the Portfolio invests at least 80% of its net assets, plus borrowings for investment purposes, in equity securities of companies located in emerging market countries or other equity investments that are tied economically to emerging market countries. Such equity securities may include common stocks, securities convertible into common stocks, preferred stocks, depositary receipts, rights and warrants. The Portfolio combines top-down country allocation with bottom-up stock selection. The Portfolio also may invest, to a limited extent, in debt securities rated below investment grade (also known as “junk bonds”). The Portfolio currently is non-diversified, however, it is expected that the Portfolio's subclassification will be changed from non-diversified to diversified prior to the Substitution. The Portfolio may also invest in derivatives to a limited extent. Principal Risks: Principal Risks: • Market Risk • Market Risk • Emerging Markets Risk • Asset Class Risk • Foreign Securities Risk • Adviser Selection Risk • Currency Risk • Security Selection Risk • Security Risk • Convertible Securities Risk • Derivatives Risk • Derivatives Risk • Equity Risk • Equity Risk • Fixed Income Risk • Junk Bonds and Lower Rated Securities Risk • Foreign Securities Risk • Currency Risk • Emerging Markets Risk • Security Risk • Growth Investing Risk • Liquidity Risk • Portfolio Turnover Risk • Focused Portfolio Risk The Section 26 Applicants believe that The Universal Institutional Funds, Inc.—Emerging Markets Equity Portfolio and the EQ/Van Kampen Emerging Markets Equity Portfolio have substantially identical investment objectives, policies and risks and that the essential objectives and expectations of Contract owners will continue to be met after the Substitution. In this connection, the Section 26 Applicants note that each Portfolio invests virtually all of its assets in equity securities of companies located in emerging markets countries. In addition, the Portfolios' advisers are affiliated companies. The Section 26 Applicants believe that the Portfolios' advisers use a substantially identical investment style in managing each Portfolio's assets and that, while the principal risks are stated somewhat differently, the Portfolios have substantially identical risk profiles. Each Portfolio is subject to general investment risks, such as market risk, asset class risk and security risk, and to substantially identical portfolio risks, such as equity risk, foreign securities and emerging markets risk and growth investing risk.
(8)Removed portfolio Replacement portfolio Old Mutual Insurance Series Fund—Mid-Cap Portfolio: The Portfolio seeks to provide above-average total return over a 3 to 5 year market cycle, consistent with reasonable risk. The Portfolio normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of mid-cap companies. The Portfolios also may invest in small-cap companies. The Portfolio invests in companies believed to have attractive valuations relative to the sector and the market, near-term business dynamics and long-term earnings growth. The Portfolio may invest up to 20% of its net assets in foreign-traded securities and derivatives. EQ/FI Mid Cap Portfolio (Class IA shares): The Portfolio seeks long-term growth of capital. The Portfolio normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in common stocks of companies with medium market capitalizations. The Portfolio may also invest in companies with smaller or larger market capitalization and securities of foreign issuers. The Portfolio is not constrained by any particular investment style and may buy growth-oriented or value-oriented stock or a combination of both. The Portfolio may invest up to 20% of its net assets in derivatives and, while the Portfolio does not have a stated limit with respect to investments in securities of foreign issuers, from January 1, 2004 through June 30, 2006, the Portfolio generally has invested between 10-20% of its net assets in such securities. Principal Risks: Principal Risks: • Market Risk • Market Risk • Small and Mid-Size Company Risk • Asset Class Risk • Industry and Sector Risk • Adviser Selection Risk • Security Selection Risk • Equity Risk • Derivatives Risk • Foreign Securities Risk • Security Risk • Portfolio Turnover Risk • Small-Cap and Mid-Cap Company Risk • Growth Investing Risk • Value Investing Risk The Section 26 Applicants believe that the Old Mutual Insurance Series Fund—Mid-Cap Portfolio and the EQ/FI Mid Cap Portfolio have very similar investment objectives and substantially similar investment policies and risks and that the essential objectives and expectations of Contract owners will continue to be met after the Substitution. The Section 26 Applicants believe that the Portfolios are substantially similar given their focus on investments in equity securities of mid-cap companies. The Section 26 Applicants do not believe that the income component of the Removed Portfolio's investment objective is a significant difference between the Portfolios given that, as a general matter, mid-cap companies do not pay significant, if any, dividends. In this connection, the Section 26 Applicants note that, for the fiscal year ended December 31, 2005, the Removed Portfolio's net investment income (including dividend income) was only approximately $122,000 on an asset base of about $55 million. The Section 26 Applicants also note that each Portfolio may also invest, to a limited extent, in securities of small-cap companies, foreign securities and derivatives. The Section 26 Applicants believe that the Portfolios' advisers also use comparable investment styles in managing each Portfolio's assets and that, while the principal risks are stated somewhat differently, the Portfolios have substantially similar risk profiles. Each Portfolio is subject to general investment risks, such as market risk, asset class risk and security risk, and to very similar portfolio risks, such as equity risk, mid-cap company risk and foreign securities risk.
(9)Removed portfolio Replacement portfolio Lord Abbett Series Fund—Mid-Cap Value Portfolio (Class VC shares): The Portfolio seeks capital appreciation through investments, primarily in equity securities, which are believed to be undervalued in the marketplace. The Portfolio normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of mid-sized companies. The Portfolio may invest in convertible bonds, convertible preferred stocks, warrants and similar instruments. The Portfolio uses a value approach. The Portfolio may invest up to 10% of its net assets in foreign securities that are primarily traded outside the United States and may also invest in ADRs (which are not included in the 10% limitation). The Portfolio may also purchase and write national securities exchange-listed put and call options on securities or securities indices and it may use options for hedging or cross-hedging purposes or to seek to increase total return EQ/Lord Abbett Mid Cap Value Portfolio (Class IA shares): The Portfolio seeks capital appreciation. Under normal circumstances, the Portfolio invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of mid-sized companies. The Portfolio uses a value approach that seeks to identify stocks of companies that have the potential for significant market appreciation due to growing recognitions of improvement (or anticipated improvement) in their financial results. The Portfolio may invest:
(1)Without limit in ADRs and similar depositary receipts;
(2)up to 10% of its assets in other foreign securities; and
(3)in convertible securities. The Portfolio may also purchase and write exchange-listed put and call options on securities or securities indices for hedging or cross-hedging purposes or to seek to increase total return. Principal Risks: Principal Risks: • Market Risk • Market Risk • Security Selection Risk • Asset Class Risk • Equity Risk • Adviser Selection Risk • Value Investing Risk • Security Selection Risk • Mid-Cap Company Risk • Security Risk • Security Risk • Convertible Securities Risk • Derivatives Risk • Futures and Options Risk • Equity Risk • Mid-Cap Company Risk • Value Investing Risk The Section 26 Applicants believe that the Lord Abbett Series Fund—Mid Cap Value Portfolio and the EQ/Lord Abbett Mid Cap Value Portfolio have substantially identical investment objectives, policies and risks and that the essential objectives and expectations of Contract owners will continue to be met after the Substitution. In this connection, the Section 26 Applicants note that each Portfolio invests virtually all of its assets in equity securities of mid-sized companies. Each Portfolio also may invest in foreign securities and derivatives for hedging and non-hedging purposes to the same extent. In addition, the Section 26 Applicants believe that the adviser to each Portfolio, which is the same for both Portfolios, uses an identical investment style in managing each Portfolio's assets and that, while the principal risks are stated somewhat differently, the Portfolios have substantially identical risk profiles. Each Portfolio is subject to general investment risks, such as market risk, asset class risk and security risk, and to substantially similar portfolio risks, such as equity risk, mid-cap company risk and value investing risk.
(10)Removed portfolio Replacement portfolio PIMCO Variable Insurance Trust—Real Return Portfolio (Administrative Class shares): The Portfolio seeks maximum real return consistent with preservation of real capital and prudent investment management. Under normal circumstances, the Portfolio invests at least 80% of its net assets in inflation-indexed bonds of varying maturities issued by United States and non-U.S. issuers, their agencies or government-sponsored enterprises and corporations. The Portfolio invests primarily in investment grade securities, but also may invest up to 10% in high yield bonds. The average duration varies within 3 years (plus or minus) of the Lehman Brothers U.S. TIPS Index (as of March 31, 2006, 6.9 years). The Portfolio may invest up to 30% in securities denominated in foreign currencies and beyond this limit in U.S. dollar denominated securities of foreign issuers. The Portfolio also may invest in derivatives. The Portfolio is non-diversified EQ/JPMorgan Core Bond Portfolio (Class IA shares): The Portfolio seeks a high total return consistent with moderate risk to capital and maintenance of liquidity. Under normal circumstances, the Portfolio invests at least 80% of its net assets, plus borrowings for investment purposes, in investment grade debt securities. These securities principally include U.S. Government and agency securities, corporate securities, private placements, asset-backed securities, mortgage-related securities and direct mortgage obligations. The overall duration generally will be within one year of the Portfolio's benchmark, the Lehman Brothers Aggregate Bond Index (as of March 31, 2006, 4.68 years). The Portfolio may invest up to 25% of assets in foreign issuers, including up to 20% in debt securities denominated in currencies of developed foreign countries. The Portfolio may invest in derivatives. Principal Risks: Principal Risks: • Market Risk • Market Risk • Issuer Risk • Asset Class Risk • Interest Rate Risk • Adviser Selection Risk • Credit Risk • Security Selection Risk • High Yield Risk • Derivatives Risk • Liquidity Risk • Fixed Income Risk • Derivatives Risk • Mortgage-Backed Securities Risk • Mortgage Risk • Asset-Backed Securities Risk • Foreign Investment Risk • Credit Risk • Currency Risk • Interest Rate Risk • Issuer Non-Diversification Risk • Investment Grade Securities Risk • Leveraging Risk • Foreign Securities Risk • Management Risk • Security Risk • Liquidity Risk • Portfolio Turnover Risk The Section 26 Applicants believe that the PIMCO Variable Insurance Trust—Real Return Portfolio and the EQ/JPMorgan Core Bond Portfolio have substantially similar investment objectives, policies and risks and that the essential objectives and expectations of Contract owners will continue to be met after the Substitution. In this connection, the Section 26 Applicants note that each Portfolio invests primarily in investment grade debt securities and seeks to maintain a duration that is generally within the same range. Each Portfolio also may invest, to a limited extent, in foreign securities and derivatives. Moreover, the Section 26 Applicants believe that while the principal risks are stated somewhat differently, the Portfolios have substantially similar risk profiles. Each Portfolio is subject to general investment risks, such as asset class risk and security risk, and to substantially similar portfolio risks, such as fixed income risk, including investment grade securities risk, credit risk and interest rate risk, and foreign securities risk.
(11)Removed portfolio Replacement portfolio Lord Abbett Series Fund—Bond-Debenture Portfolio (Class VC shares): The Portfolio seeks high current income and the opportunity for capital appreciation to produce a high total return. Under normal circumstances, the Portfolio invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in fixed income securities of various types. The Portfolio may invest in high-yield debt securities and mortgage- and asset-backed securities. The Portfolio has found good value in high-yield securities and has invested more than half of its assets in these securities. At least 20% of the Portfolio's net assets must be invested in any combination of investment grade debt securities, U.S. Government securities and cash equivalents. The Portfolio may also invest up to 20% of its net assets in equity securities and up to 20% of its net assets in foreign securities AXA Premier VIP High Yield Portfolio (Class A shares): The Portfolio seeks high total return through a combination of current income and capital appreciation. Under normal circumstances, the Portfolio intends to invest at least 80% of its net assets, plus borrowings for investment purposes, in a diversified mix of bonds that are rated below investment grade. The Advisers select bonds from several sectors, including commercial and residential mortgage-backed securities, asset-backed securities, corporate bonds and bonds of foreign issuers. The Portfolio also may invest in equity securities, derivatives and, to a limited extent, illiquid securities. In addition, the Portfolio may invest up to 20% of its net assets in investment grade debt securities. Principal Risks: Principal Risks: • Market Risk • Adviser Selection Risk • Issuer Risk • Credit/Default Risk • Debt Securities Risk • Currency Risk • Interest Rate Risk • Derivatives Risk • High-Yield Debt Securities Risk • Foreign Investing and Emerging Markets Risk • Mortgage-Related Securities Risk • Interest Rate Risk • Credit Risk • Liquidity Risk • Equity Risk • Lower-Rated Securities Risk • Foreign Securities Risk • Loan Participation Risk • Mortgage-Backed and Asset-Backed Securities Risk • Portfolio Management Risk • Issuer-Specific Risk The Section 26 Applicants believe that the Lord Abbett Series Fund—Bond Debenture Portfolio and the AXA Premier VIP High Yield Portfolio have substantially similar investment objectives, policies and risks and that the essential objectives and expectations of Contract owners will continue to be met after the Substitution. In this connection, the Section 26 Applicants note that each Portfolio invests virtually all of its assets in fixed income securities. In addition, each Portfolio invests largely in high-yield securities and also may invest in investment grade debt securities. Applicants note that the Removed Portfolio generally invests at least 20% of its net assets in investment grade debt securities, while the Replacement Portfolio generally invests no more than 20% of its net assets in such securities. Applicants believe, however, that this is neither a significant difference in the investment policies of the Portfolios nor a difference that significantly alters the overall risk profile of either Portfolio. In this connection, Applicants note that the Removed Portfolio has only invested approximately 23% of its assets in investment grade debt securities over the past three fiscal years, while the Replacement Portfolio has invested approximately 8% of its assets in such securities over the same period. Thus, each Portfolio has invested the substantial majority (indeed, more than three quarters of the Portfolio) in high-yield debt securities over the last three fiscal years. Each Portfolio also may invest, to a limited extent, in equity securities and foreign securities. Moreover, the Section 26 Applicants believe that while the principal risks are stated somewhat differently, as noted above, the Portfolios have substantially similar risk profiles. Each Portfolio is subject to general investment risks, such as asset class risk and security risk, and to substantially similar portfolio risks, such as fixed income risk, including high-yield securities risk, investment grade securities risk, credit risk and interest rate risk, and foreign securities risk. 14. The following chart compares the fees paid for advisory services and the total annual operating expenses (before and after any waivers and reimbursements) for the fiscal year ended December 31, 2005, expressed as an annual percentage of average daily net assets, of the Initial Class shares of The Dreyfus Socially Responsible Growth Fund, Inc. (the “Removed Portfolio” for purposes of this discussion) and the Class IA shares of the EQ/Calvert Socially Responsible Portfolio (the “Replacement Portfolio” for purposes of this discussion). The total annual operating expenses of the Replacement Portfolio have been restated to reflect recent changes to the administration fees charged with respect to that Portfolio. 3 Class IA shares of the Replacement Portfolio and the Initial Class shares of the Removed Portfolio have not adopted plans pursuant to Rule 12b-1 under the 1940 Act. 3 Effective May 1, 2006, each EQAT Portfolio pays an administration fee equal to $30,000 per year, plus its pro rata portion of the Trust's asset-based administration fee, which is equal to an annual rate of 0.12% of the first $3 billion of total EQAT average daily net assets, 0.11% of the next $3 billion, 0.105% of the next $4 billion, 0.10% of the next $20 billion of total EQAT average daily net assets and 0.975% of the total EQAT average daily net assets in excess of $30 billion. Prior to that date, the administration fee for each EQAT Portfolio was equal to $30,000 per year, plus its pro rata portion of the Trust's asset-based administration fee, which was equal to an annual rate of 0.04% of the first $3 billion of total EQAT average daily net assets, 0.03% of the next $3 billion, 0.025% of the next $4 billion, and 0.0225% of the total EQAT average daily net assets in excess of $10 billion. The Dreyfus Socially Responsible Growth Fund, Inc. (percent) EQ/Calvert Socially Responsible Portfolio (percent) Management Fee 4 0.75 0.65 Rule 12b-1 Fee None None Other Expenses 0.06 0.27 Total Annual Operating Expenses 0.81 0.92 Less Fee Waiver/Expense Reimbursement 5 N/A (0.12) Net Annual Operating Expenses 0.81 0.80 For the fiscal year ended December 31, 2005, the net annual operating expense ratio of the Replacement Portfolio was lower than the Removed Portfolio's net annual operating expense ratio due primarily to the Replacement Portfolio's lower management fee rate and an expense limitation arrangement in effect for the Replacement Portfolio. 4 The management fee schedule for the Replacement Portfolio on an annual basis is equal to 0.650% of the first $1 billion; 0.600% on the next $1 billion; 0.575% on the next $3 billion; 0.550% on the next $5 billion; and 0.525% thereafter. The management fee schedule for the Removed Portfolio, as well as the management fee schedule for each Removed Portfolio in Substitutions 2, 4, 5, 6 and 10 discussed herein, does not include breakpoints. 5 The Manager of the Replacement Portfolio has agreed to make payments or waive its management, administrative and other fees to limit the expenses of the Portfolio through April 30, 2007, pursuant to an expense limitation agreement, so that the Total Annual Operating Expenses of the Class IA shares of the Portfolio do not exceed 0.80%. As of December 31, 2005, the assets of the Replacement Portfolio were approximately $72.5 million, while the assets of the Removed Portfolio were approximately $431.2 million. Although the Replacement Portfolio is smaller than the Removed Portfolio, it is anticipated that the Replacement Portfolio's net annual operating expense ratio will be lower than the Removed Portfolio's annual operating expense ratio immediately after the Substitution due to the expense limitation arrangement in effect. The Section 26 Applicants assert that the proposed Substitution of the Replacement Portfolio for the Removed Portfolio will therefore benefit the Contract owners by lowering the annual operating expense ratio. To ensure that Contract owners with amounts allocated to the Removed Portfolio on the date of the Substitution do not incur higher expenses with respect to such amounts for a period of two years after the Substitution, MLOA and MONY also have agreed to impose a two-year expense limitation with respect to such amounts, as summarized below. 15. The following chart compares the fees paid for advisory services and the total annual operating expenses (before and after any waivers and reimbursements) for the fiscal year ended December 31, 2005, expressed as an annual percentage of average daily net assets, of the Initial Class shares of the Dreyfus Variable Investment Fund—International Value Portfolio (the “Removed Portfolio” for purposes of this discussion) and the Class IA shares of the EQ/Mercury International Value Portfolio (the “Replacement Portfolio” for purposes of this discussion). The total annual operating expenses of the Replacement Portfolio have been restated to reflect recent changes to the administration fees charged with respect to that Portfolio (as described above). Class IA shares of the Replacement Portfolio and the Initial Class shares of the Removed Portfolio have not adopted plans pursuant to Rule 12b-1 under the 1940 Act. Dreyfus Variable Investment Fund—International Value Portfolio (percent) EQ/Mercury International Value Portfolio (percent) Management Fee 6 1.00 0.85 Rule 12b-1 Fee None None Other Expenses 0.20 0.23 Total Annual Operating Expenses 1.20 1.08 Less Fee Waiver/Expense Reimbursement 7 N/A (0.08) Net Annual Operating Expenses 1.20 1.00 For the fiscal year ended December 31, 2005, the annual operating expense ratio of the Replacement Portfolio (before and after waivers and reimbursements) was lower than the annual operating expense ratio of the Removed Portfolio due primarily to the Replacement Portfolio's lower management fee rate and an expense limitation arrangement in effect for the Replacement Portfolio. In addition, as of December 31, 2005, the assets of the Replacement Portfolio were approximately $1.4 billion, while the assets of the Removed Portfolio were approximately $149.2 million. 6 The management fee schedule for the Replacement Portfolio on an annual basis is equal to 0.850% of the first $1 billion; 0.800% on the next $1 billion; 0.775% on the next $3 billion; 0.750% on the next $5 billion; and 0.725% thereafter. 7 The Manager of the Replacement Portfolio has agreed to make payments or waive its management, administrative and other fees to limit the expenses of the Portfolio through April 30, 2007, pursuant to an expense limitation agreement, so that the Total Annual Operating Expenses of the Class IA shares of the Portfolio do not exceed 1.00%. With respect to the Removed Portfolio, the investment adviser has agreed to waive its fees and/or assume expenses of the Portfolio to the extent that the Total Annual Operating Expenses exceed 1.40% for the fiscal year ended December 31, 2006. It is anticipated that the Replacement Portfolio's net annual operating expense ratio will be lower than the Removed Portfolio's net annual operating expense ratio immediately after the Substitution due primarily to the lower management fee rate and economies of scale from the substantially larger asset base as well as the expense limitation arrangement in effect. The Section 26 Applicants assert that the proposed Substitution of the Replacement Portfolio for the Removed Portfolio will therefore benefit the Contract owners by lowering the annual operating expense ratio. To ensure that Contract owners with amounts allocated to the Removed Portfolio on the date of the Substitution do not incur higher expenses with respect to such amounts for a period of two years after the Substitution, MLOA and MONY also have agreed to impose a two year expense limitation with respect to such amounts, as summarized below. 16. The following chart compares the fees paid for advisory services and the total annual operating expenses (before and after any waivers and reimbursements) for the fiscal year ended December 31, 2005, expressed as an annual percentage of average daily net assets, of the Class VC shares of the Lord Abbett Series Fund—Growth and Income Portfolio (the “Removed Portfolio” for purposes of this discussion) and the Class IA shares of the EQ/Lord Abbett Growth and Income Portfolio (the “Replacement Portfolio” for purposes of this discussion). The total annual operating expenses of the Replacement Portfolio have been restated to reflect recent changes to the administration fees charged with respect to that Portfolio (as described above). Class IA shares of the Replacement Portfolio and the Class VC shares of the Removed Portfolio have not adopted plans pursuant to Rule 12b-1 under the 1940 Act. Lord Abbett Series Fund—Growth and Income Portfolio (percent) EQ/Lord Abbett Growth and Income Portfolio (percent) Management Fee 8 0.48 0.65 Rule 12b-1 Fee None None Other Expenses 0.41 0.93 Total Annual Operating Expenses 0.89 .58 Less Fee Waiver/Expense Reimbursement 9 N/A (0.83) Net Annual Operating Expenses 0.89 0.75 For the fiscal year ended December 31, 2005, the net annual operating expense ratio of the Replacement Portfolio was lower than the net annual operating expense ratio of the Removed Portfolio due primarily to an expense limitation arrangement in effect for the Replacement Portfolio. This arrangement more than offset the Replacement Portfolio's higher management fee rate and the higher rate of “other expenses.” The Class VC shares of the Removed Portfolio are not subject to any expense limit. 8 The management fee schedule for the Replacement Portfolio on an annual basis is equal to 0.650% of the first $1 billion; 0.600% on the next $1 billion; 0.575% on the next $3 billion; 0.550% on the next $5 billion; and 0.525% thereafter. The management fee schedule for the Removed Portfolio on an annual basis is equal to 0.50% on the first $1 billion and 0.45% over $1 billion. 9 The Manager of the Replacement Portfolio has agreed to make payments or waive its management, administrative and other fees to limit the expenses of the Portfolio through April 30, 2007, pursuant to an expense limitation agreement, so that the Total Annual Operating Expenses of the Class IA shares of the Portfolio do not exceed 0.75%. As of December 31, 2005, the assets of the Replacement Portfolio were approximately $38.3 million, while the assets in the Removed Portfolio were approximately $1.6 billion. Although the Replacement Portfolio is smaller than the Removed Portfolio, it is anticipated that the Replacement Portfolio's net annual operating expense ratio will be lower than the Removed Portfolio's net annual operating expense ratio immediately after the Substitution due to the expense limitation arrangement in effect. In addition, after the Substitution, the Replacement Portfolio will be substantially larger, which should enable the Portfolio to realize greater economies of scale. The Section 26 Applicants assert that the proposed Substitution of the Replacement Portfolio for the Removed Portfolio will therefore benefit the Contract owners by lowering the annual operating expense ratio. To ensure that Contract owners with amounts allocated to the Removed Portfolio on the date of the Substitution do not incur higher expenses with respect to such amounts after the Substitution, MLOA and MONY also have agreed to impose a permanent expense limitation with respect to such amounts, as summarized below. 17. The following chart compares the fees paid for advisory services and the total annual operating expenses (before and after any waivers and reimbursements) for the fiscal year ended December 31, 2005, expressed as an annual percentage of average daily net assets, of the shares of the T. Rowe Price Fixed Income Series, Inc.—Limited-Term Bond Portfolio (the “Removed Portfolio” for purposes of this discussion) and the Class IA shares of the EQ/Short Duration Bond Portfolio (the “Replacement Portfolio” for purposes of this discussion). The total annual operating expenses of the Replacement Portfolio have been restated to reflect recent changes to the administration fees charged with respect to that Portfolio (as described above). Class IA shares of the Replacement Portfolio and the shares of the Removed Portfolio have not adopted plans pursuant to Rule 12b-1 under the 1940 Act. T. Rowe Price Fixed Income Series, Inc.—Limited-Term Bond Portfolio (percent) EQ/Short Duration Bond Portfolio (percent) Management Fee 10 0.70 0.45 Rule 12b-1 Fee None None Other Expenses None 0.14 Total Annual Operating Expenses 0.70 0.59 Less Fee Waiver/Expense Reimbursement 11 N/A N/A Net Annual Operating Expenses 0.70 0.59 For the fiscal year ended December 31, 2005, the annual operating expense ratio of the Replacement Portfolio (before and after waivers and reimbursements) was lower than the annual operating expense ratio of the Removed Portfolio due primarily to the Replacement Portfolio's lower management fee rate. In addition, the Class IA shares of the Replacement Portfolio are subject to a 0.60% annual expense limit, while the shares of the Removed Portfolio are not subject to any expense limit. Moreover, as of December 31, 2005, the assets of the Replacement Portfolio were approximately $1.3 billion, while the assets in the Removed Portfolio were approximately $86.5 million. 10 The management fee schedule for the Replacement Portfolio on an annual basis is equal to 0.450% of the first $750 million; 0.425% on the next $750 million; 0.400% on the next $1 billion; 0.380% on the next $2.5 billion; and 0.370% thereafter. 11 The Manager of the Replacement Portfolio has agreed to make payments or waive its management, administrative and other fees to limit the expenses of the Portfolio through April 30, 2007, pursuant to an expense limitation agreement, so that the Total Annual Operating Expenses of the Class IA shares of the Portfolio do not exceed 0.60%. It is anticipated that the Replacement Portfolio's net annual operating expense ratio will be lower than the Removed Portfolio's net annual operating expense ratio immediately after the Substitution due to the lower management fee rate and economies of scale from the substantially larger asset base. The Section 26 Applicants assert that the proposed Substitution of the Replacement Portfolio for the Removed Portfolio will therefore benefit the Contract owners by lowering the annual operating expense ratio. To ensure that Contract owners with amounts allocated to the Removed Portfolio on the date of the Substitution do not incur higher expenses with respect to such amounts for a period of two years after the Substitution, MLOA and MONY also have agreed to impose a two-year expense limitation with respect to such amounts, as summarized below. 18. The following chart compares the fees paid for advisory services and the total annual operating expenses (before and after any waivers and reimbursements) for the fiscal year ended December 31, 2005, expressed as an annual percentage of average daily net assets, of the shares of the T. Rowe Price Fixed Income Series, Inc.—Prime Reserve Portfolio (the “Removed Portfolio” for purposes of this discussion) and the Class IA shares of the EQ/Money Market Portfolio (the “Replacement Portfolio” for purposes of this discussion). The total annual operating expenses of the Replacement Portfolio have been restated to reflect recent changes to the administration fees charged with respect to that Portfolio (as described above). Class IA shares of the Replacement Portfolio and the shares of the Removed Portfolio have not adopted plans pursuant to Rule 12b-1 under the 1940 Act. 12 The management fee schedule for the Replacement Portfolio on an annual basis is equal to 0.350% of the first $750 million; 0.325% on the next $750 million; 0.280% on the next $1 billion; 0.270% on the next $2.5 billion; and 0.250% thereafter. T. Rowe Price Fixed Income Series, Inc.—Prime Reserve Portfolio (percent) EQ/Money Market Portfolio (percent) Management Fee 12 0.55 0.34 Rule 12b-1 Fee None None Other Expenses None 0.13 Total Annual Operating Expenses 0.55 0.47 Less Fee Waiver/Expense Reimbursement N/A N/A Net Annual Operating Expenses 0.55 0.47 For the fiscal year ended December 31, 2005, the annual operating expense ratio of the Replacement Portfolio (before and after waivers and reimbursements) was lower than the annual operating expense ratio of the Removed Portfolio due primarily to the Replacement Portfolio's lower management fee rate. In addition, as of December 31, 2005, the assets of the Replacement Portfolio were approximately $1.5 billion, while the assets in the Removed Portfolio were approximately $24.1 million. It is anticipated that the Replacement Portfolio's net annual operating expense ratio will be lower than the Removed Portfolio's net annual operating expense ratio immediately after the Substitution due to the lower management fee rate and economies of scale from the substantially larger asset base. The Section 26 Applicants assert that the proposed Substitution of the Replacement Portfolio for the Removed Portfolio will therefore benefit the Contract owners by lowering the annual operating expense ratio. To ensure that Contract owners with amounts allocated to the Removed Portfolio on the date of the Substitution do not incur higher expenses with respect to such amounts for a period of two years after the Substitution, MLOA and MONY also have agreed to impose a two-year expense limitation with respect to such amounts, as summarized below. 19. The following chart compares the fees paid for advisory services and the total annual operating expenses (before and after any waivers and reimbursements) for the fiscal year ended December 31, 2005, expressed as an annual percentage of average daily net assets, of the shares of the T. Rowe Price International Series, Inc.—International Stock Portfolio (the “Removed Portfolio” for purposes of this discussion) and the Class IA shares of the EQ/Alliance International Portfolio (the “Replacement Portfolio” for purposes of this discussion). The total annual operating expenses of the Replacement Portfolio have been restated to reflect recent changes to the administration fees charged with respect to that Portfolio (as described above). Class IA shares of the Replacement Portfolio and the shares of the Removed Portfolio have not adopted plans pursuant to Rule 12b-1 under the 1940 Act. T. Rowe Price International Series, Inc.—International Stock Portfolio (percent) EQ/Alliance International Portfolio (percent) Management Fee 13 1.05 0.72 Rule 12b-1 Fee None None Other Expenses None 0.21 Total Annual Operating Expenses 1.05 0.93 Less Fee Waiver/Expense Reimbursement 14 N/A (0.08) Net Annual Operating Expenses 1.05 0.85 For the fiscal year ended December 31, 2005, the annual operating expense ratio of the Replacement Portfolio (before and after waivers and reimbursements) was lower than the annual operating expense ratio of the Removed Portfolio due primarily to the Replacement Portfolio's lower management fee rate and an expense limitation arrangement in effect for the Replacement Portfolio. The Removed Portfolio is not subject to any expense limitation arrangement. In addition, as of December 31, 2005, the assets of the Replacement Portfolio were approximately $2.3 billion, while the assets in the Removed Portfolio were approximately $467.5 million. 13 The management fee schedule for the Replacement Portfolio on an annual basis is equal to 0.750% of the first $1 billion; 0.700% on the next $1 billion; 0.675% on the next $3 billion; 0.650% on the next $5 billion; and 0.625% thereafter. 14 The Manager of the Replacement Portfolio has agreed to make payments or waive its management, administrative and other fees to limit the expenses of the Portfolio through April 30, 2007, pursuant to an expense limitation agreement, so that the Total Annual Operating Expenses of the Class IA shares of the Portfolio do not exceed 0.85%. It is anticipated that the Replacement Portfolio's net annual operating expense ratio will be lower than the Removed Portfolio's net annual operating expense ratio immediately after the Substitution due to the lower management fee rate, economies of scale from the substantially larger asset base and the expense limitation arrangement in effect. The Section 26 Applicants assert that the proposed Substitution of the Replacement Portfolio for the Removed Portfolio will therefore benefit the Contract owners by lowering the annual operating expense ratio. To ensure that Contract owners with amounts allocated to the Removed Portfolio on the date of the Substitution do not incur higher expenses with respect to such amounts for a period of two years after the Substitution, MLOA and MONY also have agreed to impose a two-year expense limitation with respect to such amounts, as summarized below. 20. The following chart compares the fees paid for advisory services and the total annual operating expenses (before and after any waivers and reimbursements) for the fiscal year ended December 31, 2005, expressed as an annual percentage of average daily net assets, of the Class I shares of The Universal Institutional Funds, Inc.—Emerging Markets Equity Portfolio (the “Removed Portfolio” for purposes of this discussion) and the Class IA shares of the EQ/Van Kampen Emerging Markets Equity Portfolio (the “Replacement Portfolio” for purposes of this discussion). The total annual operating expenses of the Replacement Portfolio have been restated to reflect recent changes to the administration fees charged with respect to that Portfolio (as described above). Class IA shares of the Replacement Portfolio and the Class I shares of the Removed Portfolio have not adopted plans pursuant to Rule 12b-1 under the 1940 Act. The Universal Institutional Funds, Inc.—Emerging Markets Equity Portfolio (percent) EQ/Van Kampen Emerging Markets Equity Portfolio (percent) Management Fee 15 1.25 1.15 Rule 12b-1 Fee None None Other Expenses 0.41 0.48 Total Annual Operating Expenses 1.66 1.63 Less Fee Waiver/Expense Reimbursement 16 (0.01) (0.08) Net Annual Operating Expenses 1.65 1.55 For the fiscal year ended December 31, 2005, the annual operating expense ratio of the Replacement Portfolio (before and after waivers and reimbursements) was lower than the annual operating expense ratio of the Removed Portfolio due primarily to the Replacement Portfolio's lower management fee rate and an expense limitation arrangement in effect for the Replacement Portfolio. In addition, as of December 31, 2005, the assets of the Replacement Portfolio were approximately $1.3 billion, while the assets in the Removed Portfolio were approximately $740.0 million. 15 The management fee schedule for the Replacement Portfolio on an annual basis is equal to 1.150% of the first $1 billion; 1.100% on the next $1 billion; 1.075% on the next $3 billion; 1.050% on the next $5 billion; and 1.025% thereafter. The management fee schedule for the Removed Portfolio on an annual basis is equal to 1.25% of the first $500 million; 1.20% from $500 million to $1 billion; 1.15% from $1 billion to $2.5 billion; and 1.00% thereafter. 16 The Manager of the Replacement Portfolio has agreed to make payments or waive its management, administrative and other fees to limit the expenses of the Portfolio through April 30, 2007, pursuant to an expense limitation agreement, so that the Total Annual Operating Expenses of the Class IA shares of the Portfolio do not exceed 1.55%. With respect to the Removed Portfolio, the investment adviser has agreed to reduce its advisory fee and/or reimburse the Portfolio to the extent that the Total Annual Operating Expenses exceed 1.65% for the fiscal year ended December 31, 2006. It is anticipated that the Replacement Portfolio's net annual operating expense ratio will be lower than the Removed Portfolio's net annual operating expense ratio immediately after the Substitution due to the lower management fee rate, economies of scale from the substantially larger asset base and the expense limitation arrangement in effect. The Section 26 Applicants assert that the proposed Substitution of the Replacement Portfolio for the Removed Portfolio will therefore benefit the Contract owners by lowering the annual operating expense ratio. To ensure that Contract owners with amounts allocated to the Removed Portfolio on the date of the Substitution do not incur higher expenses with respect to such amounts for a period of two years after the Substitution, MLOA and MONY also have agreed to impose a two-year expense limitation with respect to such amounts, as summarized below. 21. The following chart compares the fees paid for advisory services and the total annual operating expenses (before and after any waivers and reimbursements) for the fiscal year ended December 31, 2005, expressed as an annual percentage of average daily net assets, of the shares of the Old Mutual Insurance Series Fund_Mid-Cap Portfolio (the ``Removed Portfolio'' for purposes of this discussion) and the Class IA shares of the EQ/FI Mid Cap Portfolio (the ``Replacement Portfolio'' for purposes of this discussion). The total annual operating expenses of the Replacement Portfolio have been restated to reflect recent changes to the administration fees charged with respect to that Portfolio (as described above). Class IA shares of the Replacement Portfolio and the shares of the Removed Portfolio have not adopted plans pursuant to Rule 12b-1 under the 1940 Act. Old Mutual Insurance Series Fund—Mid-Cap Portfolio (percent) EQ/FI Mid Cap Portfolio (percent) Management Fee 17 0.95 0.69 Rule 12b-1 Fee None None Other Expenses 0.22 0.14 Total Annual Operating Expenses 1.17 0.83 Less Fee Waiver/Expense Reimbursement 18 (0.18) (0.08) Net Annual Operating Expenses 0.99 0.75 For the fiscal year ended December 31, 2005, the annual operating expense ratio for the Replacement Portfolio (before and after waivers and reimbursements) was lower than the annual operating expense ratio for the Removed Portfolio due to a lower management fee rate and a lower rate of “other expenses.” In addition, the Class IA shares of the Replacement Portfolio are subject to a 0.75 annual expense limit, while the shares of the Removed Portfolio are subject to a 0.99 fee cap. Moreover, as of December 31, 2005, the assets of the Replacement Portfolio were approximately $1.4 billion, while the assets in the Removed Portfolio were approximately $54.8 million. 17 The management fee schedule for the Replacement Portfolio on an annual basis is equal to 0.700% of the first $1 billion; 0.65% on the next $1 billion; 0.625% on the next $3 billion; 0.600% on the next $5 billion; and 0.575% thereafter. The management fee schedule for the Removed Portfolio on an annual basis is equal to 0.950% of the first $300 million; 0.900% from $300 million to $500 million; 0.850% from $500 million to $750 million; 0.800% from $750 million to $1 billion; 0.750% from $1 billion to $1.5 billion; 0.700% from $1.5 billion to $2.0 billion; and 0.65% thereafter. 18 The Manager of the Replacement Portfolio has agreed to make payments or waive its management, administrative and other fees to limit the expenses of the Portfolio through April 30, 2007, pursuant to an expense limitation agreement, so that the Total Annual Operating Expenses of the Class IA shares of the Portfolio do not exceed 0.75%. With respect to the Removed Portfolio, the investment adviser has contractually agreed to waive a portion of its management fee or to pay certain expenses of the Portfolio to the extent that the Total Annual Operating Expenses exceed 0.99% for the fiscal year ended December 31, 2006. It is anticipated that the Replacement Portfolio's net annual operating expense ratio will be lower than the Removed Portfolio's net annual operating expense ratio immediately after the Substitution due to the lower management fee rate, the lower rate of other expenses, economies of scale from the substantially larger asset base and the expense limitation arrangement in effect. The Section 26 Applicants assert that the proposed Substitution of the Replacement Portfolio for the Removed Portfolio will therefore benefit the Contract owners by lowering the annual operating expense ratio. To ensure that Contract owners with amounts allocated to the Removed Portfolio on the date of the Substitution do not incur higher expenses with respect to such amounts for a period of two years after the Substitution, MLOA and MONY also have agreed to impose a two-year expense limitation with respect to such amounts, as summarized below. 22. The following chart compares the fees paid for advisory services and the total annual operating expenses (before and after any waivers and reimbursements) for the fiscal year ended December 31, 2005, expressed as an annual percentage of average daily net assets, of the Class VC shares of the Lord Abbett Series Fund—Mid-Cap Value Portfolio (the “Removed Portfolio” for purposes of this discussion) and the Class IA shares of the EQ/Lord Abbett Mid Cap Value Portfolio (the “Replacement Portfolio” for purposes of this discussion). The total annual operating expenses of the Replacement Portfolio have been restated to reflect recent changes to the administration fees charged with respect to that Portfolio (as described above). Class IA shares of the Replacement Portfolio and the Class VC shares of the Removed Portfolio have not adopted plans pursuant to Rule 12b-1 under the 1940 Act. Lord Abbett Series Fund—Mid-Cap Value Portfolio (percent) EQ/Lord Abbett Mid Cap Value Portfolio (percent) Management Fee 19 0.74 0.70 Rule 12b-1 Fee None None Other Expenses 0.38 0.40 Total Annual Operating Expenses 1.12 1.10 Less Fee Waiver/Expense Reimbursement 20 N/A (0.30) Net Annual Operating Expenses 1.12 0.80 For the fiscal year ended December 31, 2005, the annual operating expense ratio of the Replacement Portfolio (before and after waivers and reimbursements) was lower than the annual operating expense ratio for the Removed Portfolio due primarily to the lower management fee rate for the Replacement Portfolio and an expense limitation arrangement in effect for the Replacement Portfolio. 19 The management fee schedule for the Replacement Portfolio on an annual basis is equal to 0.700% of the first $1 billion; 0.650% on the next $1 billion; 0.625% on the next $3 billion; 0.600% on the next $5 billion; and 0.575% thereafter. The management fee schedule for the Removed Portfolio on an annual basis is equal to 0.75% of the $1 billion; 0.70% on the next $1 billion; and 0.65% over $2 billion. 20 The Manager of the Replacement Portfolio has agreed to make payments or waive its management, administrative and other fees to limit the expenses of the Portfolio through April 30, 2007, pursuant to an expense limitation agreement, so that the Total Annual Operating Expenses of the Class IA shares of the Portfolio do not exceed 0.80%. As of December 31, 2005, the assets of the Replacement Portfolio were approximately $123.6 million, while the assets in the Removed Portfolio were approximately $1.2 billion. Although the Replacement Portfolio is smaller than the Removed Portfolio, it is anticipated that the Replacement Portfolio's net annual operating expense ratio will be lower than the Removed Portfolio's net annual operating expense ratio immediately after the Substitution due to the lower management fee rate and the expense limitation arrangement in effect. The Section 26 Applicants assert that the proposed Substitution of the Replacement Portfolio for the Removed Portfolio will therefore benefit the Contract owners by lowering the annual operating expense ratio. To ensure that Contract owners with amounts allocated to the Removed Portfolio on the date of the Substitution do not incur higher expenses with respect to such amounts for a period of two years after the Substitution, MLOA and MONY also have agreed to impose a two-year expense limitation with respect to such amounts, as summarized below. 23. The following chart compares the fees paid for advisory services and the total annual operating expenses (before and after any waivers and reimbursements) for the fiscal year ended December 31, 2005, expressed as an annual percentage of average daily net assets, of the Administrative Class shares of the PIMCO Variable Insurance Trust—Real Return Portfolio (the “Removed Portfolio” for purposes of this discussion) and the Class IA shares of the EQ/JPMorgan Core Bond Portfolio (the “Replacement Portfolio” for purposes of this discussion). The total annual operating expenses of the Replacement Portfolio have been restated to reflect recent changes to the administration fees charged with respect to that Portfolio (as described above). Class IA shares of the Replacement Portfolio and the Administrative Class shares of the Removed Portfolio have not adopted plans pursuant to Rule 12b-1 under the 1940 Act. PIMCO Variable Insurance Trust—Real Return Portfolio (percent) EQ/JPMorgan Core Bond Portfolio (percent) Management Fee 21 0.25 0.44 Rule 12b-1 Fee None None Other Expenses 0.41 0.13 Total Annual Operating Expenses 0.66 0.57 Less Fee Waiver/Expense Reimbursement 22 N/A N/A Net Annual Operating Expenses 0.66 0.57 For the fiscal year ended December 31, 2005, the annual operating expense ratio of the Replacement Portfolio was lower than the annual operating expense ratio of the Removed Portfolio, even though the management fee rate for the Replacement Portfolio was higher than the Removed Portfolio's management fee rate. The lower total annual operating expense ratio of the Replacement Portfolio was due primarily to the Portfolio's lower rate of “other expenses.” In addition, the Class IA shares of the Replacement Portfolio are subject to a 0.60% annual expense limit, while the Administrative Class shares of the Removed Portfolio are not subject to any expense limit. Moreover, as of December 31, 2005, the assets of the Replacement Portfolio were approximately $1.4 billion, while the assets in the Removed Portfolio were approximately $1.1 billion. 21 The management fee schedule for the Replacement Portfolio on an annual basis is equal to 0.450% of the first $750 million; 0.425% on the next $750 million; 0.400% on the next $1 billion; 0.380% on the next $2.5 billion; and 0.370% thereafter. 22 The Manager of the Replacement Portfolio has agreed to make payments or waive its management, administrative and other fees to limit the expenses of the Portfolio through April 30, 2007, pursuant to an expense limitation agreement, so that the Total Annual Operating Expenses of the Class IA shares of the Portfolio do not exceed 0.60%. It is anticipated that the Replacement Portfolio's net annual operating expense ratio will be lower than the Removed Portfolio's net annual operating expense ratio immediately after the Substitution due primarily to the lower rate of “other expenses” due to economies of scale as well as the expense limitation arrangement in effect. The Section 26 Applicants assert that the proposed Substitution of the Replacement Portfolio for the Removed Portfolio will therefore benefit the Contract owners by lowering the annual operating expense ratio. To ensure that Contract owners with amounts allocated to the Removed Portfolio on the date of the Substitution do not incur higher expenses with respect to such amounts after the Substitution, MLOA and MONY also have agreed to impose a permanent expense limitation with respect to such amounts, as summarized below. 24. The following chart compares the fees paid for advisory services and the total annual operating expenses (before and after any waivers and reimbursements) for the fiscal year ended December 31, 2005, expressed as an annual percentage of average daily net assets, of the Class VC shares of the Lord Abbett Series Fund—Bond-Debenture Portfolio (the “Removed Portfolio” for purposes of this discussion) and the Class A shares of the AXA Premier VIP High Yield Portfolio (the “Replacement Portfolio” for purposes of this discussion). Class A shares of the Replacement Portfolio and the Class VC shares of the Removed Portfolio have not adopted plans pursuant to Rule 12b-1 under the 1940 Act. Lord Abbett Series Fund—Bond-Debenture Portfolio (percent) AXA Premier VIP High Yield Portfolio (percent) Management Fee 23 0.50 0.58 Rule 12b-1 Fee None None Other Expenses 24 0.44 0.18 Total Annual Operating Expenses 0.94 0.76 Less Fee Waiver/Expense Reimbursement (0.04) N/A Net Annual Operating Expenses 0.90 0.76 For the fiscal year ended December 31, 2005, the annual operating expense ratio of the Replacement Portfolio was lower than the annual operating expense ratio of the Removed Portfolio (before and after waivers and reimbursements), even though the management fee rate for the Replacement Portfolio was higher than the Removed Portfolio's management fee rate. The lower annual operating expense ratio was due primarily to the Replacement Portfolio's lower rate of “other expenses.” In addition, as of December 31, 2005, the assets of the Replacement Portfolio were approximately $1.8 billion, while the assets in the Removed Portfolio were approximately $212.3 million. 23 The management fee schedule for the Replacement Portfolio on an annual basis is equal to 0.600% of the first $750 million; 0.575% on the next $750 million; 0.550% on the next $1 billion; 0.530% on the next $2.5 billion; and 0.520% thereafter. The management fee schedule for the Removed Portfolio on an annual basis, as of January 1, 2006, is equal to 0.50% of the first $1 billion; and 0.45% thereafter. However, the management fee rate for the fiscal year ended December 31, 2005, as reflected in the total annual operating expenses table above, was 0.50% and did not include breakpoints. 24 With respect to the Removed Portfolio, the investment adviser has contractually agreed through April 30, 2007 to reimburse a portion of the Portfolio's expenses to maintain its “Other Expenses” at an annualized rate of 0.40%. It is anticipated that the Replacement Portfolio's total annual operating expense ratio will be lower than the Removed Portfolio's total annual operating expense ratio immediately after the Substitution, notwithstanding the difference in the management fee rates, due primarily to the lower rate of other expenses as a result of economies of scale attributable to the Replacement Portfolio's substantially larger asset base. The Section 26 Applicants assert that the proposed Substitution of the Replacement Portfolio for the Removed Portfolio will therefore benefit the Contract owners by lowering the annual operating expense ratio. To ensure that Contract owners with amounts allocated to the Removed Portfolio on the date of the Substitution do not incur higher expenses with respect to such amounts after the Substitution, MLOA and MONY also have agreed to impose a permanent expense limitation with respect to such amounts, as summarized below. 25. Appendix A describes each proposed substitution with respect to each portfolio's comparative performance history. Information regarding the average annual total returns of each Replacement and Removed Portfolio for the one-, five- and ten-year periods (or since inception, if shorter) ended December 31, 2005 is included in the Appendix. 26. By supplements to the prospectuses for the Contracts and Separate Accounts which will be delivered to Contract owners at least thirty
(30)days before the Substitutions, each Insurance Company will notify all Contract owners of its intention to take the necessary actions, including seeking the order requested by the Application, to substitute shares of the Replacement Portfolios for the Removed Portfolios as described in this notice. The supplements will advise Contract owners that from the date of the supplement until the date of the proposed Substitutions, owners are permitted to make transfers of Contract value (or annuity unit value) out of each Removed Portfolio subaccount to one or more other subaccounts without the transfers (or exchanges) being treated as one of a limited number of permitted transfers (or exchanges) or a limited number of transfers (or exchanges) permitted without a transfer charge. The supplements also will inform Contract owners that the Insurance Companies will not exercise any rights reserved under any Contract to impose additional restrictions on transfers until at least 30 days after each proposed Substitution (other than with respect to implementing policies and procedures designed to prevent disruptive transfer and other market timing activity). The supplements also will advise Contract owners how to provide instructions on reallocating Contract value in light of the proposed Substitutions. In addition, the supplements will advise Contract owners that any Contract value remaining in a Removed Portfolio subaccount on the Substitution Date will be transferred to the corresponding Replacement Portfolio subaccount and that the Substitutions will take place at relative net asset value. The supplements will also advise Contract owners that for at least 30 days following each proposed Substitution, the Insurance Companies will permit Contract owners to make transfers of Contract value (or annuity unit value) out of each Replacement Portfolio subaccount to one or more other subaccounts without the transfers (or exchanges) being treated as one of a limited number of permitted transfers (or exchanges) or a limited number of transfers (or exchanges) permitted without a transfer charge, as applicable. 27. Each Insurance Company also will send affected Contract owners prospectuses for the Replacement Portfolio prior to the Substitutions. Also the Section 26 Applicants will send the appropriate prospectus supplement (or other notice, in the case of Contracts no longer actively marketed and for which there are a relatively small number of existing Contract owners (“Inactive Contracts”)), containing this disclosure to all existing Contract owners. Prospective purchasers and new purchasers of Contracts will be provided with a Contract prospectus and the supplement containing disclosure regarding the Substitutions, as well as a prospectus and/or supplement for the Replacement Portfolios. Applicants represent that the Contract prospectus and the supplement and the prospectus and/or supplement for the Replacement Portfolios will be delivered to purchasers of new Contracts in accordance with all applicable legal requirements. 28. In addition to the prospectus supplements distributed to Contract owners, within five business days after the proposed Substitutions are completed, Contract owners will be sent a written notice of the Substitutions informing them that each Substitution was carried out and that they may transfer all Contract value or cash value under a Contract invested in any one of the subaccounts on the date of the notice to one or more other subaccounts available under their Contract at no cost and without regard to the usual limit on the frequency of transfers among the variable account options. The notice will also reiterate that (other than with respect to implementing policies and procedures designed to prevent disruptive transfers and other market timing activity) each Insurance Company will not exercise any rights reserved by it under the Contracts to impose additional restrictions on transfers or to impose any charges on transfers until at least 30 days after each proposed Substitution. The Insurance Companies will also send each Contract owner a current prospectus for each of the relevant Replacement Portfolios to the extent they have not previously received a current version. Each Insurance Company also is seeking approval of the proposed Substitutions from any state insurance regulators whose approval may be necessary or appropriate. 29. The proposed Substitutions will take place at relative net asset value determined on the date of the Substitutions pursuant to Section 22 of the 1940 Act and Rule 22c-1 thereunder, with no change in the amount of any Contract owner's Contract value, cash value, or death benefit or in the dollar value of his or her investment in the Separate Accounts. Each Substitution will be effected by redeeming shares of the Removed Portfolio in cash and/or in-kind on the Substitution Date at their net asset value and using the proceeds of those redemptions to purchase shares of the Replacement Portfolio at their net asset value on the same date. All in-kind redemptions from a Removed Portfolio of which any of the Applicants is an affiliated person will be effected in accordance with the conditions set forth in the no-action letter issued by the staff of the Commission to Signature Financial Group, Inc. (Dec. 28, 1999). 30. Contract owners will not incur any fees or charges as a result of the proposed Substitutions, nor will their rights or insurance benefits or the Insurance Companies' obligations under the Contracts be altered in any way. All expenses incurred in connection with the proposed Substitutions, including any brokerage, legal, accounting, and other fees and expenses, will be paid by the Insurance Companies. In addition, the proposed Substitutions will not impose any tax liability on Contract owners. The proposed Substitutions will not cause the Contract fees and charges currently being paid by Contract owners to be greater after the proposed Substitutions than before the proposed Substitutions. All Contract-level fees will remain the same after the proposed Substitutions. No fees will be charged on the transfers made at the time of the proposed Substitutions because each proposed Substitution will not be treated as a transfer for purposes of assessing transfer charges or computing the number of permissible transfers under the Contracts. 31. With respect to those who were Contract owners on the date of the proposed Substitutions, the Insurance Companies will reimburse, on the last business day of each fiscal period (not to exceed a fiscal quarter) during the two years following the date of the proposed Substitutions, the subaccounts investing in the Replacement Portfolios such that the sum of each Replacements Portfolio's net operating expense ratio (taking into account any expense waivers or reimbursements) and subaccount expense ratio (asset-based fees and charges deducted on a daily basis from subaccount assets and reflected in the calculations of subaccount unit value) for such period will not exceed, on an annualized basis, the sum of the corresponding Removed Portfolio's net operating expense ratio (taking into account any expense waivers or reimbursements) and subaccount expense ratio for fiscal year 2005, except for the Substitutions involving the Lord Abbett Series Fund—Growth and Income Portfolio, PIMCO Variable Insurance Trust—Real Return Portfolio and Lord Abbett Series Fund—Bond-Debenture Portfolio. With respect to the Lord Abbett Series Fund—Growth and Income Portfolio, PIMCO Variable Insurance Trust—Real Return Portfolio and Lord Abbett Series Fund—Bond-Debenture Portfolio, the Insurance Companies will reimburse, on the last business day of each fiscal period (not to exceed a fiscal quarter) for the life of each Contract outstanding on the date of the proposed Substitutions, the subaccounts investing in the Replacement Portfolios such that the sum of each Replacement Portfolio's net operating expense ratio (taking into account any expense waivers or reimbursements) and subaccount expense ratio (asset-based fees and charges deducted on a daily basis from subaccount assets and reflected in the calculations of subaccount unit value) for such period will not exceed, on an annualized basis, the sum of the corresponding Removed Portfolio's net operating expense ratio (taking into account any expense waivers or reimbursements) and subaccount expense ratio for fiscal year 2005. 32. For a period of two years from the date of each proposed Substitution, except the Substitutions involving the Lord Abbett Series Fund—Growth and Income Portfolio, PIMCO Variable Insurance Trust—Real Return Portfolio and Lord Abbett Series Fund—Bond-Debenture Portfolio, the Insurance Companies will not increase total Separate Account charges (net of any waivers or reimbursements) for any existing owner of the Contracts on the date of the proposed Substitutions. With respect to the Lord Abbett Series Fund—Growth and Income Portfolio, PIMCO Variable Insurance Trust—Real Return Portfolio and Lord Abbett Series Fund—Bond-Debenture Portfolio, at no time after the date of the proposed Substitutions will the Insurance Companies increase the total Separate Account charges (net of any waiver or reimbursements) of each Contract outstanding on the date of the proposed Substitutions. Applicants' Legal Analysis 1. Section 26(c) of the 1940 Act prohibits the depositor of a registered unit investment trust that invests in the securities of a single issuer from substituting the securities of another issuer without Commission approval. Section 26(c) provides that “[t]he Commission shall issue an order approving such substitution if the evidence establishes that it is consistent with the protection of investors and the purposes fairly intended by the policy and provisions of this title.” Section 26(c) protects the expectation of investors that the unit investment trust will accumulate shares of a particular issuer and is intended to ensure that unnecessary or burdensome sales loads, additional reinvestment costs and other charges will not be incurred due to unapproved substitutions of securities. 2. The proposed Substitutions involve a substitution of securities within the meaning of Section 26(c) of the 1940 Act. The Section 26 Applicants, therefore, request an order from the Commission pursuant to Section 26(c) approving the proposed Substitutions. 3. The Section 26 Applicants have reserved the right under the Contracts to substitute shares of another eligible investment fund for one of the current investment funds offered as a funding option under the Contracts. The prospectuses for the Contracts and the Separate Accounts contain appropriate disclosure of this right. The Section 26 Applicants have reserved this right of substitution both to protect themselves and their Contract owners in situations where either might be harmed or disadvantaged by events affecting the issuer of the securities held by a Separate Account and to preserve the opportunity to replace such shares in situations where a substitution could benefit the Insurance Companies and their respective Contract owners. 4. Applicants assert that each Replacement Portfolio and its corresponding Removed Portfolio have similar, and in some cases substantially similar or identical, investment objectives, policies and risks. In addition, the proposed Substitutions retain for Contract owners the investment flexibility that is a central feature of the Contracts. According to the Applicants, any impact on the investment programs of affected Contract owners, including the appropriateness of the available investment options, should therefore be negligible. 5. Applicants maintain that the ultimate effect of each Substitution would be to remove overlapping and duplicative investment options and that each Substitution will permit each Insurance Company to present information to its Contract owners in a simpler and more concise manner. Applicants anticipate that after each proposed Substitution, Contract owners will be provided with disclosure documents that contain a simpler presentation of the available investment options under their Contracts. 6. Applicants also state that, as a result of each proposed Substitution, Contract owners with subaccount balances invested in each Replacement Portfolio will have lower net operating expenses. Each Insurance Company has agreed to impose a two year expense limit, except with respect to the proposed Substitutions involving the Lord Abbett Series Fund—Growth and Income Portfolio, PIMCO Variable Insurance Trust—Real Return Portfolio and Lord Abbett Series Fund—Bond-Debenture Portfolio for which each Insurance Company has agreed to impose an expense limit for the life of each Contract, so that the sum of each Replacement Portfolio's net operating expense ratio (taking into account any expense waivers and reimbursements) and subaccount expense ratio (asset-based charges deducted on a daily basis from subaccount assets and reflected in the calculation of subaccount unit values) for each fiscal period (not to exceed a fiscal quarter) will not exceed, on an annualized basis, the sum of the corresponding Removed Portfolio's net operating expense ratio and subaccount expense ratio for fiscal year 2005. 7. Applicants contend that, therefore, each Substitution protects the Contract owners who have allocated Contract value to each Removed Portfolio by:
(i)Providing an underlying investment option for subaccounts invested in the Removed Portfolio that is similar to the Removed Portfolio;
(ii)providing such Contract owners with simpler disclosure documents; and
(iii)providing such Contract owners with an investment option that would have net operating expenses that are lower than the current investment option. 8. Applicants assert that the proposed Substitutions are not of the type that Section 26(c) was designed to prevent. Unlike traditional unit investment trusts where a depositor could only substitute investment securities in a manner which permanently affected all the investors in the trust, the Contracts provide each Contract owner with the right to exercise his or her own judgment, and transfer Contract values and cash values into and among other investment options available to Contract owners under their Contracts. Additionally, the Section 26 Applicants claim that the Substitutions will not, in any manner, reduce the nature or quality of the available investment options. Moreover, the Section 26 Applicants will offer Contract owners the opportunity to transfer amounts out of the affected subaccounts without any cost or other penalty that may otherwise have been imposed for a period beginning on the date of the supplement notifying Contract owners of the proposed Substitutions (which supplement will be delivered to Contract owners at least thirty
(30)days before the Substitutions) and ending no earlier than thirty
(30)days after the Substitution Date. The Substitutions, therefore, will not result in the type of costly forced redemption that Section 26(c) was designed to prevent. 9. Applicants maintain that the proposed Substitutions are also unlike the type of substitution that Section 26(c) was designed to prevent in that by purchasing a Contract, Contract owners select much more than a particular underlying fund in which to invest their Contract values. They also select the specific type of insurance coverage offered by the Section 26 Applicants under the applicable Contract, as well as numerous other rights and privileges set forth in the Contract. Contract owners also may have considered the Insurance Company's size, financial condition, and its reputation for service in selecting their Contract. These factors will not change as a result of the proposed Substitution. 10. Section 17(a)(1) of the 1940 Act prohibits any affiliated person (as defined in Section 2(a)(3) of the 1940 Act) of a registered investment company, or any affiliated person of such a person, acting as principal, from knowingly selling any security or other property to that company. Section 17(a)(2) of the 1940 Act generally prohibits the same persons, acting as principals, from knowingly purchasing any security or other property from the registered investment company. 11. The Section 17 Applicants state that shares held by a separate account of an insurance company are legally owned by the insurance company and that, the Insurance Companies and their affiliates collectively own substantially all of the shares of EQAT. Accordingly, EQAT and its respective Portfolios are arguably under the control of the Insurance Companies, notwithstanding the fact that the Contract owners may be considered the beneficial owners of those shares held in the Separate Accounts. If EQAT is under the common control of the Insurance Companies, then each Insurance Company is an affiliated person or an affiliated person of an affiliated person of EQAT and its respective Portfolios. If EQAT and its respective Portfolios are under the control of the Insurance Companies, then EQAT and its respective affiliates are affiliated persons of the Insurance Companies. 12. The Section 17 Applicants note that, regardless of whether or not the Insurance Companies can be considered to control EQAT and its respective Portfolios, because the Insurance Companies and their affiliates own of record more than 5% of the shares of each of them and are under common control with each Replacement Portfolio's investment adviser, the Insurance Companies are affiliated persons of EQAT and its respective Portfolios. Likewise, EQAT's respective Portfolios are each an affiliated person of the Insurance Companies. 13. In addition to the above, the Insurance Companies, through their respective Separate Accounts, in the aggregate own more than 5% of the outstanding shares of certain of the Removed Portfolios, including the Dreyfus Variable Investment Fund—International Value Portfolio, Lord Abbett Series Fund—Bond-Debenture Portfolio, T. Rowe Price Fixed Income Series, Inc.—Prime Reserve Portfolio, Old Mutual Insurance Series Fund—Mid-Cap Portfolio and PIMCO Variable Insurance Trust—Real Return Portfolio. Therefore, each Insurance Company is an affiliated person of those portfolios. 14. The Section 17 Applicants state that the proposed In-Kind Transactions could be seen as the indirect purchase of shares of certain Replacement Portfolios with portfolio securities of certain Removed Portfolios and the indirect sale of portfolio securities of certain Removed Portfolios for shares of certain Replacement Portfolios. Pursuant to this analysis, the proposed In-Kind Transactions also could be categorized as a purchase of shares of certain Replacement Portfolios by certain Removed Portfolios, acting as principal, and a sale of portfolio securities by certain Removed Portfolios, acting as principal, to certain Replacement Portfolios. In addition, the proposed In-Kind Transactions could be viewed as a purchase of securities from certain Removed Portfolios, and a sale of securities to certain Replacement Portfolios, by MONY or MLOA (or their Separate Accounts), acting as principal. If categorized in this manner, the proposed In-Kind Transactions may be deemed to contravene Section 17(a) due to the affiliated status of these participants. 15. Rule 17a-7 under the 1940 Act exempts from the prohibitions of Section 17(a), subject to certain enumerated conditions, a purchase or sale transaction between registered investment companies or separate series of registered investment companies, which are affiliated persons, or affiliated persons of affiliated persons, of each other, between separate series of a registered investment company, or between a registered investment company or a separate series of a registered investment company and a person which is an affiliated person of such registered investment company (or affiliated person of such person) solely by reason of having a common investment adviser or investment advisers which are affiliated persons of each other, common directors, and/or common officers. 16. MONY, MLOA, their Separate Accounts, certain Removed Portfolios, and certain Replacement Portfolios, in connection with their participation in the proposed In-Kind Transactions, must rely on that portion of Rule 17a-7 that requires that they be affiliated persons of each other solely by reason of having a common investment adviser or affiliated investment advisers, common directors, and/or common officers. That is not the case as detailed above. Moreover, one of the conditions enumerated in Rule 17a-7 requires that the transaction be a purchase or sale, for no consideration other than cash payment against prompt delivery of a security for which market quotations are readily available. If the proposed In-Kind Transactions are viewed as purchases and sales of securities, the consideration in the proposed redemptions of shares of certain Removed Portfolios and the proposed purchases of shares of certain Replacement Portfolios would not be cash, but would be the portfolio securities received from the Removed Portfolio. 17. Section 17(b) of the 1940 Act provides that the Commission may, upon application, issue an order exempting any proposed transaction from Section 17(a) if:
(i)The terms of the proposed transactions are reasonable and fair and do not involve overreaching on the part of any person concerned;
(ii)the proposed transactions are consistent with the policy of each registered investment company concerned; and
(iii)the proposed transactions are consistent with the general purposes of the 1940 Act. 18. The Section 17 Applicants request an order pursuant to Section 17(b) of the 1940 Act exempting them from the provisions of Section 17(a) to the extent necessary to permit them to carry out the In-Kind Transactions in connection with the proposed Substitutions. 19. The Section 17 Applicants submit that the terms of the proposed In-Kind Transactions, including the consideration to be paid and received are reasonable and fair and do not involve overreaching on the part of any person concerned. The Section 17 Applicants also submit that the proposed In-Kind Transactions are consistent with the policies of the relevant Removed Portfolios and the relevant corresponding Replacement Portfolios, as recited in the current registration statement and reports of the relevant investment company filed with the Commission under the federal securities laws. Finally, the Section 17 Applicants submit that the proposed In-Kind Transactions are consistent with the general purposes of the 1940 Act. 20. The Section 17 Applicants state that they will assure themselves that the investment companies will carry out the proposed In-Kind Transactions in conformity with the conditions of Rule 17a-7 (or, as applicable, a Removed Portfolio's and a Replacement Portfolio's normal valuation procedures, as set forth in the relevant investment company's registration statement), except that the consideration paid for the securities being purchased or sold will not be cash. The In-Kind Transactions will be effected at the respective net asset values of each Removed Portfolio and the corresponding Replacement Portfolio, as determined in accordance with the procedures disclosed in the Portfolios' registration statements and as required by Rule 22c-1 under the 1940 Act. The In-Kind Transactions will not change the dollar value of any Contract owner's investment in any of the Separate Accounts, the value of any Contract, the accumulation value or other value credited to any Contract, or the death benefit payable under any Contract. After the proposed In-Kind Transactions, the value of a Separate Account's investment in a Replacement Portfolio will equal the value of its investments in the Removed Portfolio (together with the value of any pre-existing investments in the Replacement Portfolio) before the In-Kind Transactions. 21. When the Commission initially proposed and adopted Rule 17a-7, it noted that the purpose of the rule was to eliminate the filing and processing of applications “in circumstances where there appears to be no likelihood that the statutory finding for a specific exemption under Section 17(b) could not be made” by establishing “conditions as to the availability of the exemption to those situations where the Commission, upon the basis of its experience, considers that there is no likelihood of overreaching of the investment companies participating in the transaction.” When the Commission amended Rule 17a-7 in 1981 to cover transactions involving non-investment company affiliates, it indicated that such transactions could be reasonable and fair and not involve overreaching if appropriate conditions were imposed on the transaction. In this regard, the Section 17 Applicants state they will assure themselves that the In-Kind Transactions will be in substantial compliance with the conditions of Rule 17a-7 under the 1940 Act. The Section 17 Applicants assert that because the proposed In-Kind Transactions would comply in substance with the principal conditions of Rule 17a-7, the Commission should consider the extent to which the In-Kind Transactions would meet these or other similar conditions and issue an order if such conditions would provide the substance of the protections embodied in Rule 17a-7. 22. The Section 17 Applicants state that the proposed In-Kind Transactions will be effected based upon the independent current market price of the portfolio securities as specified in paragraph
(b)of Rule 17a-7. The proposed In-Kind Transactions will comply with paragraph
(d)of Rule 17a-7 because no brokerage commission, fee or other remuneration (except for any customary transfer fees) will be paid to any party in connection with the proposed In-Kind Transactions. Furthermore, a written record of the proposed In-Kind Transactions will be maintained and preserved in accordance with paragraph
(g)of Rule 17a-7. With respect to those securities for which market quotations are not readily available, the Substitutions will be effected in accordance with the relevant Removed Portfolios' and the relevant corresponding Replacement Portfolios' normal valuation procedures, as set forth in the registration statement for the relevant investment company. 23. Even though the proposed In-Kind Transactions will not comply with the cash consideration requirement of paragraph
(a)of Rule 17a-7, the Section 17 Applicants state that the terms of the proposed In-Kind Transactions will offer to each of the relevant Removed Portfolios and each of the relevant Replacement Portfolios the same degree of protection from overreaching that Rule 17a-7 generally provides in connection with the purchase and sale of securities under that Rule in the ordinary course of business. In particular, the Insurance Companies and their affiliates cannot effect the proposed In-Kind Transactions at a price that is disadvantageous to any Replacement Portfolio. 24. The Section 17 Applicants represent that the proposed redemption of shares of each of the relevant Removed Portfolios will be consistent with the investment policies of each Removed Portfolio and the corresponding Replacement Portfolio, as recited in their respective current registration statements, provided that the shares are redeemed at their net asset value in conformity with Rule 22c-1 under the 1940 Act. Likewise, the proposed sale of shares of each of the relevant Replacement Portfolios for investment securities is consistent with the investment policies of the relevant Replacement Portfolio, as recited in the relevant Trust's registration statement, provided that:
(i)The shares are sold at their net asset value; and
(ii)the investment securities are of the type and quality that a Replacement Portfolio could have acquired with the proceeds from the sale of its shares had the shares been sold for cash. To assure the second of these conditions is met, the Manager and relevant Adviser will examine the portfolio securities being offered to each Replacement Portfolio and accept only those securities as consideration for shares that it would have acquired for each such Portfolio in a cash transaction. 25. Applicants also assert that the proposed In-Kind Transactions are consistent with the general purposes of the 1940 Act and that the proposed In-Kind Transactions do not present any conditions or abuses that the 1940 Act was designed to prevent. In particular, Sections 1(b)(2) and 1(b)(3) of the 1940 Act state, among other things, that the national public interest and the interest of investors are adversely affected “when investment companies are organized, operated, managed, or their portfolio securities are selected in the interest of directors, officers, investment advisers, depositors, or other affiliated persons thereof, * * * or in the interest of other investment companies or persons engaged in other lines of business, rather than in the interest of all classes of such companies' security holders; * * * when investment companies issue securities containing inequitable or discriminatory provisions, or fail to protect the preferences and privileges of holders in their outstanding securities.” As explained above, the terms of the proposed In-Kind Transactions are designed to prevent the abuses described in Sections 1(b)(2) and 1(b)(3) of the 1940 Act. 26. The Section 17 Applicants submit that, for all the reasons stated above, the terms of the proposed In-Kind Transactions as set forth in the Application, including the consideration to be paid and received, are reasonable and fair to:
(i)Each of the relevant Replacement Portfolios and each of the relevant Removed Portfolios; and
(ii)Contract owners. The Section 17 Applicants also assert that the proposed In-Kind Transactions do not involve overreaching on the part of any person concerned. Furthermore, the Section 17 Applicants represent that the proposed In-Kind Transactions are, or will be, consistent with all relevant policies of
(i)the relevant Replacement Portfolios and the relevant Removed Portfolios as stated in the relevant investment company's registration statement and reports filed under the 1940 Act, and
(ii)the general purposes of the 1940 Act. Conclusion For the reasons set forth in the Application, the Section 26 Applicants and the Section 17 Applicants respectively state that the proposed Substitutions and the related In-Kind Transactions meet the standards of Section 26(c) of the 1940 Act and of Section 17(b) of the 1940 Act, and request that the Commission issue an order of approval pursuant to Section 26(c) of the 1940 Act and an order of exemption pursuant to Section 17(b) of the 1940 Act. For the Commission, by the Division of Investment Management, under delegated authority. J. Lynn Taylor, Assistant Secretary. Appendix A The charts below compare the average annual total returns of the Class IA shares of each Replacement Portfolio and relevant class of shares (as indicated below) of each Removed Portfolio for the one-, five- and ten-year or since inception periods ended December 31, 2005. 25 Replaced November 30, 2005. 1.—The Dreyfus Socially Responsible Growth Fund, Inc. (Initial Class Shares) (“Removed Portfolio”) Replaced by EQ/Calvert Socially Responsible Portfolio (Class IA Shares) (“Replacement Portfolio”) Portfolio Periods Ended 12/31/2005 1 year (percent) 5 years (percent) Since inception* (percent) Replacement Portfolio 8.92 (2.00) (0.87) Russell 1000 Growth Index 5.26 (3.58) (3.74) Russell 3000 Index 25 6.12 1.58 1.86 Removed Portfolio 3.62 (5.27) 5.93 S&P 500 4.91 0.54 9.07 * The Replacement Portfolio commenced operations on September 1, 1999. The Removed Portfolio commenced operations on December 31, 2000. 2.—Dreyfus Variable Investment Fund—International Value Portfolio (Initial Class Shares) (“Removed Portfolio”) Replaced by EQ/Mercury International Value Portfolio (Class IA Shares) (“Replacement Portfolio”) Portfolio periods ended 12/31/2005 1 year (percent) 5 years (percent) Since inception* (percent) Replacement Portfolio 11.07 2.46 8.80 MSCI EAFE Index 13.54 4.55 6.17 Removed Portfolio 11.89 6.88 7.97 MSCI EAFE Index 13.54 4.55 5.42 * The Replacement Portfolio commenced operations on March 25, 2002. The Removed Portfolio commenced operations on May 1, 1996. 3.—Lord Abbett Series Fund—Growth and Income Portfolio (Class VC Shares) (“Removed Portfolio”) Replaced by EQ/Lord Abbett Growth and Income Portfolio (Class IA Shares) (“Replacement Portfolio”)** Portfolio periods ended 12/31/2005 1 year (percent) 5 years (percent) 10 years* (percent) Removed Portfolio 3.25 3.10 10.22 S&P 500 4.91 0.54 9.07 * The Removed Portfolio commenced operations on December 11, 1989. ** The inception date for the Replacement Portfolio is April 29, 2005 and, therefore, the Portfolio does not have performance information for a full fiscal year. 4.—T. Rowe Price Fixed Income Series, Inc.—Limited-Term Bond Portfolio (“Removed Portfolio”) Replaced by EQ/Short Duration Bond Portfolio (Class IA Shares) (“Replacement Portfolio”) Portfolio periods ended 12/31/2005 1 year (percent) 5 years (percent) 10 years or since inception* (percent) Replacement Portfolio 1.38 N/A 1.58 Lehman 1-3 Year Government Credit Index 1.77 N/A 1.72 Removed Portfolio 1.74 4.17 4.80 Merrill Lynch 1-5 Year U.S. Corporate and Government Index 1.44 4.63 5.35 * The predecessor of the Replacement Portfolio, the Enterprise Short Duration Portfolio, commenced operations on May 1, 2003. The assets of the Enterprise Short Duration Portfolio were transferred to the Replacement Portfolio on July 9, 2004. The Removed Portfolio commenced operations on May 13, 1994. 5.—T. Rowe Price Fixed Income Series, Inc.—Prime Reserve Portfolio (“Removed Portfolio”) Replaced by EQ/Money Market Portfolio (Class IA shares) (“Replacement Portfolio”) Portfolio periods ended 12/31/2005 1 year (percent) 5 years (percent) 10 years or since inception* (percent Replacement Portfolio 2.85 2.00 3.72 3-Month Treasury Bill 3.07 2.34 3.85 Removed Portfolio 2.79 1.96 3.48 Lipper Variable Annuity Underlying Money Market Funds Average 2.69 1.85 3.38 *The predecessor of the Replacement Portfolio, the HRT/Alliance Money Market Portfolio, commenced operations on July 13, 1981. The assets of the HRT/Alliance Money Market Portfolio were transferred to the Replacement Portfolio on October 18, 1999. The Removed Portfolio commenced operations on December 31, 1996. 6.—T. Rowe Price International Series, Inc.—International Stock Portfolio (“Removed Portfolio”) Replaced by EQ/Alliance International Portfolio (Class IA shares) (“Replacement Portfolio”) Portfolio periods ended 12/31/2005 1 year (percent) 5 years (percent) 10 years* (percent) Replacement Portfolio 15.61 5.20 4.87 MSCI EAFE Index 13.54 4.55 5.84 Removed Portfolio 16.03 1.84 5.09 MSCI EAFE Index 14.02 4.94 6.18 *The predecessor of the Replacement Portfolio, the HRT/Alliance International Portfolio, commenced operations on April 3, 1995. The assets of the HRT/Alliance International Portfolio were transferred to the Replacement Portfolio on October 18, 1999. The Removed Portfolio commenced operations on March 31, 1994. 7.—The Universal Institutional Funds, Inc.—Emerging Markets Equity Portfolio (Class I Shares) (“Removed Portfolio”) Replaced by EQ/Van Kampen Emerging Markets Equity Portfolio (Class IA Shares) (“Replacement Portfolio”) Portfolio periods ended 12/31/2005 1 year (percent) 5 years (percent) Since inception* (percent) Replacement Portfolio 33.04 17.97 5.48 MSCI EMF Gross Dividend Index 34.54 19.44 7.13 Removed Portfolio 33.85 16.01 6.95 MSCI Emerging Markets Free Net Index 34.00 19.09 6.62 * The Replacement Portfolio commenced operations on August 20, 1997. The Removed Portfolio commenced operations on October 1, 1996. 8.—Old Mutual Insurance Series Fund—Mid-Cap Portfolio (“Removed Portfolio”) Replaced by EQ/FI Mid Cap Portfolio (Class IA Shares) (“Replacement Portfolio”) Portfolio periods ended 12/31/2005 1 year (percent) 5 years (percent) Since inception* (percent) Replacement Portfolio 6.63 4.58 4.38 S&P MidCap 400 Index 12.56 8.60 6.91 Removed Portfolio 5.71 8.18 14.78 S&P MidCap 400 Index 10.26 6.52 11.35 * The Replacement Portfolio commenced operations on September 1, 2000. The Removed Portfolio commenced operations on November 30, 1998. 9.—Lord Abbett Series Fund—Mid-Cap Value Portfolio (Class VC Shares) (“Removed Portfolio”) Replaced by EQ/Lord Abbett Mid Cap Value Portfolio (Class IA Shares) (“Replacement Portfolio”)** Portfolio periods ended 12/31/2005 1 year (percent) 5 years (percent) Since inception* (percent) Removed Portfolio 8.22 10.30 15.34 Russell MidCap Value Index 12.65 12.21 12.50 * The Removed Portfolio commenced operations on September 15, 1999. ** The inception date for the Replacement Portfolio is April 29, 2005 and, therefore, the Portfolio does not have performance information for a full fiscal year. 10.—PIMCO Variable Insurance Trust—Real Return Portfolio (Administrative Class Shares) (“Removed Portfolio”) Replaced by EQ/JPMorgan Core Bond Portfolio (Class IA Shares) (“Replacement Portfolio”) Portfolio periods ended 12/31/2005 1 year (percent) 5 years (percent) Since inception* (percent) Replacement Portfolio 2.50 5.41 5.69 Lehman Brothers Aggregate Bond Index 2.43 5.87 6.06 Removed Portfolio 2.09 9.34 9.68 Lehman Brothers U.S. TIPS Index 2.84 8.74 9.07 * The Replacement Portfolio commenced operations on January 1, 1998. The Removed Portfolio commenced operations on September 30, 1999. 11.—Lord Abbett Series Fund—Bond-Debenture Portfolio (Class VC Shares) (“Removed Portfolio”) Replaced by AXA Premier VIP High Yield Portfolio (Class A Shares) (“Replacement Portfolio”) Portfolio periods ended 12/31/2005 1 year (percent) 5 years (percent) 10 years or since inception* (percent) Replacement Portfolio 3.26 6.32 5.17 Merrill Lynch High Yield Master Cash Pay Only Index 2.83 8.76 6.80 Credit Suisse First Boston Global High Yield Index 26 2.25 9.82 7.13 Removed Portfolio 1.31 N/A 8.53 Lehman Brothers Aggregate Bond Index 2.43 N/A 4.97 CSFB High Yield Bond Index 2.26 N/A 10.64 * The predecessor of the Replacement Portfolio, the EQ/High Yield Portfolio, merged with the AXA Premier VIP High Yield Portfolio on August 15, 2003. The assets of the HRT Alliance High Yield Portfolio were transferred to the EQ/High Yield Portfolio on October 19, 1999. The HRT Alliance High Yield Portfolio commenced operations on January 2, 1987. The Removed Portfolio commenced operations on December 3, 2001. 26 Replaced December 31, 2005. [FR Doc. E6-17236 Filed 10-16-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54584; File No. SR-Amex-2006-57] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of a Proposed Rule Change Relating to Stop Orders for Exchange Traded Funds and Trust Issued Receipts October 6, 2006. 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 August 18, 2006, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by Amex. 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. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the rules applicable to stop orders for exchange traded funds and trust issued receipts. The text of the proposed rule change is available on the Amex's Web site at ( *http://www.amex.com* ), the Amex Office of the Secretary, and at the Commission's Public Reference Room. Below is the text of the proposed rule change. Proposed new language is in *italics* ; proposed deletions are in [brackets]. General and Floor Rules Rule 154. Orders Left with Specialist No member or member organization shall place with a specialist, acting as broker, any order to effect on the Exchange any transaction except at the market or at a limited price. * * * Commentary .01 No Change. .02 No Change. .03 No Change. .04
(a)A specialist shall accept both stop orders and stop limit orders in securities in which he is so registered.
(b)When a specialist elects a stop order on his book by selling stock to the existing bid or buying stock at the existing offer for his own account, he must first obtain a Floor Official's approval *(except in the case of Exchange-Traded Fund Shares and Trust Issued Receipts if the transaction is 0.10 point or less away from the prior transaction).* [, and] *A* [a]ll stop orders so elected must be executed at the same price as his electing transaction.
(c)No Change. .05—.15 No Change. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Amex 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. Amex 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 The Exchange proposes to amend Commentary .04(b) to Amex Rule 154 to provide that a specialist who elects a stop order on his book by selling stock to the existing bid or buying stock at the existing offer for his own account is not required to obtain floor official approval if the transaction is 0.10 point or less away from the prior transaction. This exception would only apply to transactions in Exchange-Traded Fund Shares and Trust Issued Receipts (collectively, “ETFs”). Currently, Exchange rules provide that when a specialist elects a stop order on the specialist's book by selling to the existing bid or buying from the existing offer, floor official approval must first be obtained. This current rule causes time delays and other impediments to an efficient and orderly marketplace and overly burdens floor officials when their time could be used more efficiently and effectively elsewhere. With the increasing use of technology and the increased competition in the marketplace, specifically auto-quoting and multiple market centers, timing in the market has become much faster and the ability to be fast has become much more important. The current Rule does not adequately account for these market structure changes thereby placing the specialist at a competitive disadvantage because of the requirement to first obtain floor official approval. Floor officials are also over burdened and this proposal could help to alleviate some of their administrative burdens and permit the reallocation of their time to the oversight and administration of other rules. In addition, the requirement to obtain floor official approval is absolute without taking into account how large or small the price variation of the stop order is from the last trading price. The New York Stock Exchange LLC (the “NYSE”) has adopted a threshold so that a minimum price variation of 0.10 point or less from the last trading price does not require floor official approval; 3 therefore, in order to remain competitive, the Exchange proposes to match the NYSE threshold whereby floor official approval would not be required if the price variation from the last trading price is 0.10 point or less. Similar to the NYSE's rules, the proposed rule change retains the requirement that the specialist guarantees that stop orders be executed at the same price as the electing sale. 3 *See* NYSE Rule 123A.40. The Exchange believes that eliminating the requirement for such transactions could help foster a more efficient and orderly marketplace, alleviate the administrative burden for floor officials and enable the Exchange to more effectively compete, while maintaining the requirement of floor official approval for the specialist stop order elections that are most likely to warrant floor official scrutiny ( *i.e.* , where the electing transaction is more than 0.10 point away from the previous sale). The Exchange acknowledges that the elimination of the floor official approval pursuant to this proposal may increase the frequency of specialists electing stop orders by selling to the existing bid or buying from the existing offer. Accordingly, the Exchange will continue to conduct its existing surveillances to monitor specialists' compliance with the specific requirements of Commentary .04 to Amex Rule 154 ( *i.e.* , obtaining floor official approval when required and executing the stop order at the same price as the electing trade) as well as their agency obligations to the impacted stop orders. The Exchange seeks approval of this proposal to amend Commentary .04(b) to Amex Rule 154 to provide that floor official approval is not required for a stop order in ETFs if the transaction is 0.10 point or less from the last trading price. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 4 in general, and furthers the objectives of Sections 6(b)(1) and 6(b)(5) of the Act, 5 in particular in that it will enhance the ability of the Exchange to enforce compliance by its members and persons associated with its members with the provisions of the Act, the rules and regulations thereunder, and the rules of the Exchange; and it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. 4 15 U.S.C. 78f(b). 5 15 U.S.C. 78f(b)(1) and (b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange 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 Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)As the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the Exchange consents, the Commission will:
(A)By order approve such proposed rule change; or
(B)Institute proceedings to determine whether the proposed rule change should be disapproved. 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-Amex-2006-57 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Amex-2006-57. 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 the Amex. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2006-57 and should be submitted on or before November 7, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 6 6 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E6-17169 Filed 10-16-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54585; File No. SR-NASD-2005-101] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Order Approving Proposed Rule Change and Notice of Filing and Order Granting Accelerated Approval to Amendment No. 1 Thereto Relating to Expansion of OATS Reporting Requirements to OTC Equity Securities October 10, 2006. I. Introduction On August 25, 2005, the National Association of Securities Dealers, Inc. (“NASD”) filed with the Securities and Exchange Commission (“Commission”) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 the proposed rule change relating to expansion of the Order Audit Trail System (“OATS”) reporting requirements to OTC equity securities. The proposed rule change was published for comment in the **Federal Register** on October 18, 2005. 3 The Commission received three comment letters on the proposal. 4 NASD filed Partial Amendment No. 1 to the proposed rule change on September 21, 2006 (“Amendment No. 1”). 5 This order approves the proposed rule change, grants accelerated approval to Amendment No. 1, and solicits comments from interested persons on Amendment No. 1. 1 15 U.S.C. 78s(b)(l). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 52581 (October 11, 2006), 70 FR 60592 (the “Notice”). 4 Two comment letters were specific to this proposal. *See* letters to Jonathan G. Katz, Secretary, Commission, from John Polanin Jr., Chair, SIA Self-Regulation and Supervisory Practices Committee, dated December 2, 2005 (“SIA Letter”) and from Phylis M. Esposito, Executive Vice President, Chief Strategy Officer, Ameritrade, Inc., dated November 8, 2005 (“Ameritrade Letter”). One comment letter expressed general opposition to OATS. *See* letter filed via the Commission's Web Comment Form, from Rich Bertematti, dated September 7, 2006 (“Bertematti Letter”). In addition, NASD received comment letters about the proposed rule change following publication in NASD's Notice to Members 04-80 (November 2004). NASD addressed those comment letters in the Notice. 5 In Amendment No. 1, NASD proposes to
(1)amend NASD Rule 6955(b)(2) to clarify that members will not be required to comply with OATS reporting obligations with respect to an OTC equity security until a symbol has been assigned to the security;
(2)exclude direct participation programs (“DPPs”) from the proposed definition of “OTC equity security;”
(3)extend the implementation period; and
(4)make technical changes necessary in light of the commencement of The NASDAQ Stock Market LLC (“Nasdaq”) as a national securities exchange. NASD also responded to comment letters received. II. Description of the Proposed Rule Change NASD Rules 6950 through 6957 impose obligations on member firms to record in electronic form and report to NASD on a daily basis certain information with respect to orders originated, received, transmitted, modified, canceled or executed by NASD members relating to equity securities listed and traded on Nasdaq. OATS captures this order information and integrates it with quote and transaction information to create a time-sequenced record of orders, quotes and transactions. NASD believes this information is critical to its conducting surveillance and investigations of member firms for violations of NASD rules and Federal securities laws. To enhance the effectiveness of OATS as a regulatory tool, NASD proposes to amend NASD Rules 6951, 6952, and 6955 to require members to record and report to OATS order information relating to OTC equity securities. 6 Currently, the OATS requirements do not apply to OTC equity securities and as a result, NASD is unable to recreate, on an automated basis, an order and transaction audit trail for these securities. NASD believes that expanding OATS requirements to these securities would enhance its ability to review and examine for member compliance with certain trading rules, including, but not limited to, NASD's rules governing best execution and interpositioning, 7 limit order protection, 8 and offers at stated prices. 9 6 NASD proposes to define “OTC equity security” as any equity security that:
(1)Is not listed on a national securities exchange; or
(2)is listed on one or more regional stock exchanges and does not qualify for dissemination of transaction reports via the facilities of the Consolidated Tape. 7 NASD Rule 2320. 8 NASD Rule 6541. 9 NASD Rule 3320. In addition, NASD proposes two technical changes that are necessary given the commencement of Nasdaq as a national securities exchange. III. Summary of Comments The Commission received comment letters in response to the publication of the notice in the **Federal Register** . 10 The primary issues two of the commenters raised concern the scope of a member's obligations to record and report OATS information relating to OTC equity securities and the timing of the proposed rule change. 10 *See supra,* note 4. A. Scope of a Member's OATS Obligations Relating to OTC Equity Securities 1. Comments Relating to the Issuance of a Security Symbol One of the commenters requested clarification of the definition and scope of “OTC equity security” and suggested that the appropriate scope of OATS reporting should include only those securities currently subject to Automated Confirmation Transaction (“ACT”) Service reporting requirements. 11 NASD responded that it does not believe that the scope of the proposed definition of “OTC equity security” should be limited as suggested by this commenter and stated that, as originally proposed, members should be required to record and report OATS information for all OTC equity securities. However, to address the situation where an OTC equity security does not have a symbol assigned to it at the time an OATS order event occurs, NASD proposed a clarifying change in Amendment No. 1 whereby, pursuant to NASD Rule 6955(b)(2), members would not be required to comply with their OATS reporting obligations with respect to an OTC equity security until a symbol has been assigned to that security. 12 NASD explained that members would still have an obligation to immediately record all other applicable OATS information in accordance with the provisions of NASD Rule 6954, irrespective of whether the security has a symbol assigned to it at the time the order is originated or received. 13 NASD represented to the Commission that it would detail these obligations under NASD Rules 6954 and 6955 in a Notice to Members and the revised OATS Technical Specifications, 14 both of which NASD will publish following this approval of the proposed rule change. 11 *See* SIA Letter, *supra* note 4, at 4. 12 In proposing this exception from the reporting obligations, NASD emphasized that members should be diligent in their efforts to obtain a symbol, as necessary, for securities they wish to trade so that they can comply with their trade reporting obligations under NASD Rule 6620. NASD Rule 6620(c)(1) requires that each trade report include the symbol of the OTC equity security; trade reports that do not contain this information are rejected by the system. In addition, NASD noted that members have an obligation to report trades within ninety seconds of execution or on a next-day basis, as applicable under Rule 6620(a). 13 NASD stated that it does not believe that members should face any technological difficulties in recording OATS information for an OTC equity security that does not have a symbol assigned to it, but the extended implementation period should allow sufficient time to address any such problems. 14 NASD states that since OATS Phase III has been implemented, it does not expect any significant changes to the OATS Technical Specifications as a result of this proposed rule change. NASD anticipates that the only such change would be expansion of the list of securities that are OATS reportable. 2. Comments Relating to DPPs One commenter stated that DPPs should not be OATS reportable because they are “effectively subscriptions, not trades” and sold through a process that is not captured in automated systems within the firm. 15 Additionally, this commenter stated that the volume for these securities is low, and OATS reporting may discourage the sale of such products. 16 In response to the concerns raised by this commenter, NASD proposed in Amendment No. 1 to exclude DPPs from the definition of “OTC equity security.” NASD stated, however, that it would continue to monitor member activities relating to DPPs and may determine, at a later date, that applying OATS requirements to DPPs is appropriate. If that situation arises, NASD represented that it would submit a proposed rule change. 15 *See* SIA Letter, *supra* note 4, at 4-5. 16 *Id* . 3. Additional Comments One commenter stated that members should not be required to identify the type of security ( *e.g.* , Nasdaq, OTCBB, Pink Sheets) in OATS reports and suggested that NASD provide a list of all OATS reportable securities, so that members do not have to rely on third party vendors for this information. 17 NASD responded that it will not require at this time that members identify the type of security as part of their OATS obligations. In addition, NASD stated it would provide a list of OTC equity securities that are subject to the OATS requirements on the OATS Web site. 18 17 *See* Ameritrade Letter, *supra* note 4, at 2. 18 This list can currently be found under the Symbol Directory at *http://www.nasdaqtrader.com/trader/symboldirectory/symbol.stm* . This same commenter also suggested that OATS should be capable of recognizing stocks that have had symbol changes and suggested that using the CUSIP number instead of the security symbol may be appropriate. 19 NASD responded by stating that a change to CUSIP number rather than security symbol would be costly and burdensome and is unnecessary because NASD's OATS system is able to track symbol changes ( *e.g.* , where an “E” is appended to the symbol of an OTCBB issuer that is delinquent in its SEC filings). 19 *See* Ameritrade Letter, *supra* note 4, at 2. One commenter stated that it understands OATS reporting is not required for OTC options, derivatives or swaps, and with respect to foreign securities, trades effected by NASD members in the U.S. would be reportable, while trades effected by a foreign affiliate of a member would not be reportable. 20 NASD confirmed that the commenter's understanding relating to the proposed OATS reporting requirements on this point is correct. NASD stated that, in addition, with respect to non-member foreign affiliates of members, OATS obligations do not apply, provided that the order is never received or held by the member, for example, where the order originates with a foreign affiliate and is not routed to the member. NASD clarified that, with respect to orders received by members for foreign securities that otherwise meet the definition of an OTC equity security, members would have an OATS obligation, irrespective of whether the order is ultimately effected inside or outside the United States. If, for example, a member receives an order in a foreign security and routes that order to a foreign exchange for handling and execution, the member would need to record and report to OATS the receipt of that order and the route to the foreign exchange. 20 *See* SIA Letter, *supra* note 4, at 4. This commenter also suggested that NASD exclude from the requirements of Rule 6620 transactions executed on a foreign exchange that is an “affiliate member” of the Intermarket Surveillance Group. *Id* . NASD has stated that Rule 6620 is not at issue in this rule filing. Finally, this commenter also stated that an audit trail is not necessary for all markets and that NASD should be required to make the case that the accretive value of an order audit trail to the surveillance of the OTC market outweighs the imposition of additional costs and burdens on member firms. 21 NASD responded that it does not agree that it has to meet that standard and, rather, that the standards it must satisfy in any proposed rule change are set forth in Sections 15A 22 and 19(b) of the Act. 23 NASD believes it has made the requisite showing. NASD also responded that while it recognizes that the proposed rule change may impose additional costs and burdens on member firms, OATS reporting of OTC equity securities is important to NASD's surveillance systems and regulatory program. In recognition of the potential additional burden on members, however, as discussed in greater detail below, NASD proposed to extend the implementation period of the proposed rule change. 21 *See* SIA Letter, *supra* note 4, at 4. 22 15 U.S.C. 78 *o* -3. 23 15 U.S.C. 78s(b). B. Timing of Proposed Rule Change One commenter stated that NASD should allow a minimum of six months for implementation of the changes necessary for OATS reporting of OTC equity securities. 24 Another commenter stated that OATS for OTC equity securities should not be implemented until the industry can properly devote the personnel and technical resources necessary to achieve compliance. 25 This commenter also stated that OTC markets are manual by nature, and expanding OATS reporting to OTC equity securities at this time could render obsolete all of the work that has been put into production for OATS Phase III compliance. 26 24 *See* Ameritrade Letter, *supra* note 4, at 2. 25 *See* SIA Letter, *supra* note 4, at 2. 26 *See* SIA Letter, *supra* note 4, at 3. NASD responded that while it does not agree that the proposed expansion of OATS reporting to OTC equity securities would have a negative impact on the work done relating to OATS Phase III, it does acknowledge the technological burdens that may be imposed on members as a result of this proposal, as well as the fact that members have a number of regulatory initiatives requiring technological and system changes. Accordingly, in Amendment No. 1, NASD proposed an implementation date of six months following publication of revised OATS Technical Specifications incorporating the proposed rule change, which will be published no later than sixty days following Commission approval of the proposed rule change. 27 NASD believes that the extended implementation period will provide members sufficient time to make any adjustments necessary to implement OATS reporting for OTC equity securities, especially since, according to NASD, the technical specifications for OATS reporting of OTC equity securities would be substantially similar to the technical specifications that have been in place since July of 2006 for OATS Phase III. 27 The initial rule text as published in the notice proposed an implementation date of 120 days from publication of the OATS Reporting Technical Specifications. In addition, one commenter suggested that NASD implement certain operational and/or procedural regulations relating to the OTC marketplace, such as expansion of the trade-through protections and limit order display requirements, prior to implementation of OATS reporting requirements and that until such time, best execution standards for NMS stocks and OTC stocks will remain unequal. 28 In response to this comment, NASD noted that it already has order handling and trading rules in effect that apply to the OTC marketplace, including, but not limited to, Rule 2320 (Best Execution and Interpositioning) and Rule 6541 (Limit Order Protection). NASD further stated that OATS reporting is necessary to enhance NASD's ability to review and examine for member compliance with these and other rules. 28 *See* Ameritrade Letter, *supra* note 4, at 3. Finally, NASD responded to a commenter that expressed general opposition to OATS and asserted that OATS is a mechanism for NASD to generate income through fines. 29 The commenter further claimed that there has been no evidence that OATS has helped the investing public or assisted in any way in improving the capital markets. 30 In addition, the commenter noted the burdens that OATS imposes on members, and in particular, small firms. 31 NASD responded that it is aware of the costs and technological burdens associated with the proposed rule change, and in recognition proposed an extended implementation period in Amendment No. 1. 29 *See* Bertematti Letter, *supra* note 4, at 1. 30 *Id* . 31 *Id* . IV. Discussion and Commission Findings The Commission has reviewed carefully the proposed rule change, the comment letters, and NASD's response to the comments. The Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities association, 32 particularly Section 15A(b)(6) of the Act, 33 which, among other things, requires that the rules of a national securities association be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. 32 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 33 15 U.S.C. 78 *o* -3(b)(6). As discussed above, NASD currently requires member firms to record and report order information for transactions in Nasdaq Stock Market equity securities. NASD's OATS uses this information for integration with trade and quotation information to provide NASD with an accurate time-sequenced record of orders and transactions to detect for possible violations of NASD rules and other securities laws and regulations. NASD recognizes that the trading in OTC equity securities is often more manual than Nasdaq Stock Market equity securities, and while this may result in additional burdens on member firms to capture this data electronically, NASD believes that reporting information related to OTC equity securities is critical to its surveillance program. The Commission believes that it is consistent with the Act for NASD to expand the OATS reporting requirements to include OTC equity securities to assist it in detecting possible fraud or manipulation in the trading of such securities in order to help protect investors. In addition, the Commission believes that the technical changes proposed by NASD, which NASD has noted are needed in light of Nasdaq's operation as a national securities exchange, are not only consistent with the Act, but also necessary to clarify NASD's rules. V. Solicitation of Comments Concerning Amendment No. 1 Interested persons are invited to submit written data, views, and arguments concerning Amendment No. 1, including whether Amendment No. 1 to 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-2005-101 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 20549-1090. All submissions should refer to File Number SR-NASD-2005-101. 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 the 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 File Number SR-NASD-2005-101 and should be submitted on or before November 7, 2006. VI. Accelerated Approval of Amendment No. 1 The Commission finds good cause for approving Amendment No. 1 to the proposed rule change prior to the thirtieth day after publication for comment in the **Federal Register** pursuant to Section 19(b)(2) of the Act. 34 As discussed in greater detail above, in Amendment No. 1, NASD proposed revisions to clarify that member firms do not need to comply with the OATS reporting obligations with respect to an OTC equity security until a symbol has been assigned to that security. In addition, in response to a comment letter, it proposed to exclude DPPs from the definition of OTC equity security. Because two commenters raised issues specific to the timing of the proposed rule change, NASD also proposed an extended implementation period in Amendment No. 1. Finally, NASD proposed two technical changes in Amendment No. 1 that are necessary to reflect the commencement of Nasdaq as a national securities exchange. Since the changes proposed in Amendment No. 1 address commenter concerns and make changes that the Commission believes will help clarify the proposed rule change and should assist firms by providing greater guidance, as well as time for testing systems to help ensure compliance with the rule, and it does not raise any new issues of regulatory concern, the Commission finds good cause to accelerate approval of Amendment No. 1, consistent with Section 15A(b)(6) of the Act 35 and Section 19(b) of the Act. 36 34 15 U.S.C. 78s(b)(2). 35 15 U.S.C. 78 *o* -3(b)(6). 36 15 U.S.C. 78s(b). VII. Conclusion *It is Therefore Ordered* , pursuant to Section 19(b)(2) of the Act, 37 that the proposed rule change (File No. SR-NASD-2005-101), as amended, be and hereby is, approved, and that Amendment No. 1 is approved on an accelerated basis. 37 15 U.S.C. 78s(b)(2). 38 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 38 Jill M. Peterson, Assistant Secretary. [FR Doc. E6-17167 Filed 10-16-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54411A; File No. SR-NASD-2004-171] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Order Approving Proposed Rule Change Relating to Rule 2340 Concerning Customer Account Statements October 6, 2006. Correction FR Doc. E6-15186, beginning on page 54105 in the issue of September 13, 2006, 1 contained an incorrect footnote. On page 54107, in the 1st column, footnote 24 provided an incomplete description of an explanation of an interpretive position in Securities Exchange Act Release No. 31511. 1 *See* Securities Exchange Act Release No. 54411 (Sept. 7, 2006), 71 FR 54105 (Sept. 13, 2006). The corrected citation to Release No. 31511 in footnote 24 reads as follows: “ *See* Securities Exchange Act Release No. 31511 (Nov. 24, 1992), 57 FR 56973 (Dec. 2, 1992) (amending the SEC's net capital rule and explaining the staff's interpretation that to avoid more stringent capital requirements under the rule, an introducing firm must “have in place a clearing agreement with a registered broker-dealer that states, for the purposes of SIPA and the Commission's financial responsibility rules, customers are customers of the clearing, and not the introducing, firm. Furthermore, the clearing firm must issue account statements directly to customers. Each statement must contain the name and telephone number of a responsible individual at the clearing firm whom a customer can contact with inquiries regarding the customer's account.”).” For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 2 2 17 CFR 200.30-3(a)(12). Jill M. Peterson, Assistant Secretary. [FR Doc. E6-17180 Filed 10-16-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54576; File No. SR-Phlx-2006-57] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Appeals From a Hearing Officer or Hearing Panel Decision October 5, 2006. 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 October 3, 2006, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) 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 the Phlx. The Phlx filed the proposed rule change as a “non-controversial” rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposal effective upon filing with the Commission. 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 The Phlx proposes to amend Exchange By-Law Article XI, Section 11-3 to update the By-laws to make a minor clarifying change to reflect the fact that appeals can now be heard from a Hearing Officer or Hearing Panel decision. The proposed amendment to By-Law Article XI, Section 11-3 is set forth below. *Italics* indicate new text. ARTICLE XI Appeals Sec. 11-3. Appeal from Decisions of *Hearing Officer, Hearing Panel or* Business Conduct Committee
(a)No change.
(b)No change. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Phlx 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 Phlx 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 The Exchange recently created the new staff position of a “Hearing Officer,” who, along with two other Hearing Panelists, will hear contested disciplinary matters that were previously heard by a panel appointed by the Chair of the Business Conduct Committee (“BCC”). 5 In connection with creating the Hearing Officer position, the Exchange amended By-Law Article X, Section 10-11, which governs the BCC, and Exchange Rules 960 and 970, the disciplinary rules. The purpose of this proposal is to update Exchange By-Law Article XI to reflect, based on the recent changes described above, that a decision from the Hearing Officer or Hearing Panel can now be appealed to the Exchange's Board of Governors. 5 *See* Securities Exchange Act Release No. 54011 (June 16, 2006), 71 FR 36157 (June 23, 2006) (SR-Phlx-2005-65). 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Section 6(b)(5) of the Act 7 in particular, in that this proposal should help to protect investors and the public interest by clarifying that appeals can now be heard from a Hearing Officer or Hearing Panel decision. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition 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. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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) of the Act 8 and Rule 19b-4(f)(6) thereunder. 9 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b-4(f)(6). 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. A proposed rule change filed under Rule 19b-4(f)(6) normally may not become operative prior to 30 days after the date of filing. 10 However, Rule 19b-4(f)(6)(iii) 11 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Phlx provided the Commission with written notice of its intent to file this proposed rule change at least five business days prior to the date of filing of the proposed rule change. In addition, the Phlx has requested that the Commission waive the 30-day operative delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposed rule change makes Phlx By-Law Article XI, Section 11-3 consistent with changes previously approved by the Commission. 12 For this reason, the Commission designates the proposal to be effective and operative upon filing with the Commission. 13 10 17 CFR 240.19b-4(f)(6)(iii). 11 *Id.* 12 *See supra* note 5. 13 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 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-Phlx-2006-57 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 20549-1090. All submissions should refer to File Number SR-Phlx-2006-57. 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 the Phlx. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Phlx-2006-57 and should be submitted on or before November 7, 2006. 14 14 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. Jill M. Peterson, Assistant Secretary. [FR Doc. E6-17168 Filed 10-16-06; 8:45 am] BILLING CODE 8011-01-P SMALL BUSINESS ADMINISTRATION [Disaster Declaration # 10614] Arizona Disaster Number AZ-00005 AGENCY: Small Business Administration. ACTION: Amendment 1. SUMMARY: This is an amendment of the Presidential declaration of a major disaster for Public Assistance Only for the State of Arizona (FEMA-1660-DR), dated 09/07/2006. *Incident:* Severe Storms and Flooding. *Incident Period:* 07/25/2006 through 08/04/2006. *Effective Date:* 09/29/2006. *Physical Loan Application Deadline Date:* 11/06/2006. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: The notice of the President's major disaster declaration for Private Non-Profit organizations in the State of Arizona, dated 09/07/2006, is hereby amended to include the following areas as adversely affected by the disaster. Primary Counties: Gila, Graham, Greenlee, Navajo, The Tribal Areas of The Hopi Tribe Within Navajo County, The Navajo Nation Within Navajo County, and The San Carlos Apache Tribe Within Gila, Graham, and Pinal Counties. All other information in the original declaration remains unchanged. (Catalog of Federal Domestic Assistance Number 59008) James E. Rivera, Acting Associate Administrator for Disaster Assistance. [FR Doc. E6-17155 Filed 10-16-06; 8:45 am] BILLING CODE 8025-01-P SOCIAL SECURITY ADMINISTRATION [Docket No. SSA-2006-0077] Program: Cooperative Agreements for Work Incentives Planning and Assistance Projects; Program Announcement No. SSA-OESP-07-1 AGENCY: Social Security Administration. ACTION: Announcement of the availability of fiscal year 2006 cooperative agreement funds and request for applications. *Catalog of Federal Domestic Assistance (CFDA):* This program is listed in the Catalog of federal Domestic Assistance under Program number 96.008, Social Security Administration—Work Incentives Planning and Assistance Program. SUMMARY: The Social Security Administration
(SSA)announces its intention to competitively award cooperative agreements to establish community-based work incentives planning and assistance projects in the following locations: *State of Alabama,* the counties of Autauga, Baldwin, Barbour, Bullock, Butler, Choctaw, Clarke, Coffee, Conecuh, Covington, Crenshaw, Dale, Dallas, Elmore, Escambia, Geneva, Henry, Houston, Lee, Lowndes, Macon, Marengo, Mobile, Monroe, Montgomery, Pike, Russell, Washington, and Wilcox; *State of Indiana,* the counties of Clark, Crawford, Daviess, Dearborn, Dubois, Floyd, Gibson, Greene, Harrison, Hendricks, Jackson, Jefferson, Jennings, Knox, Lawrence, Martin, Monroe, Ohio, Orange, Parke, Perry, Pike, Posey, Ripley, Scott, Spencer, Sullivan, Switzerland, Vanderburgh, Vermillion, Vigo, Warrick, Washington; *State of Kentucky,* the counties of Bath, Bell, Bourbon, Boyd, Bracken, Breathitt, Carter, Clark, Clay, Elliott, Estill, Fleming, Floyd, Garrard, Greenup, Harlan, Harrison, Jackson, Johnson, Knott, Knox, Laurel, Lawrence, Lee, Leslie, Letcher, Lewis, Madison, Magoffin, Martin, Mason, McCreary, Menifee, Montgomery, Morgan, Nicholas, Owsley, Pendleton, Perry, Pike, Powell, Robertson, Rockcastle, Rowan, Whitley, and Wolfe; *State of Nevada,* all counties; *State of New York,* the counties of Albany, Columbia, Dutchess, Greene, Orange, Putnam, Rockland, Ulster, and Westchester; *State of Ohio,* the counties of Ashtabula, Mahoning, Portage, Stark, Summit, and Trumbull; and *Pacific territories of Guam, the Northern Mariana Islands, and American Samoa.* The purpose of these projects is to disseminate accurate information about work incentives programs and issues related to such programs to beneficiaries with disabilities (including transition-to-work aged youth). This will help enable them to make informed choices about working, how available work incentives can facilitate their transition into the workforce, and whether and when to assign their Ticket to Work. The ultimate goal of the work incentives planning and assistance projects is to assist SSA beneficiaries with disabilities succeed in their return to work efforts. DATES: The closing date for receipt of cooperative agreement applications under this announcement is December 15, 2006. Prospective applicants are also asked to submit, preferably by November 1, 2006, an e-mail, a fax, post card, or letter of intent that includes
(1)the program announcement number (SSA-OESP-07-1) and title (Work Incentives Planning and Assistance Program);
(2)the name of the agency or organization that is applying; and
(3)the name, mailing address, e-mail address, telephone number, and fax number for the organization's contact person. This notice of intent is not binding, and does not enter into the review process of a subsequent application. The purpose of the notice of intent is to allow SSA staff to estimate the number of independent reviewers needed and to avoid potential conflicts of interest in the review. The notice of intent should be faxed to
(410)966-1278; mailed to Social Security Administration, Office of Employment Support Programs, Office of Employment Policy, 107 Altmeyer Building, 6401 Security Boulevard, Baltimore, Maryland 21235 or e-mailed to *Jenny.Deboy@ssa.gov* . FOR FURTHER INFORMATION CONTACT: The Internet is the primary means recommended for obtaining information on the program content of this announcement. If an applicant has a question about this announcement, that question should be referred to the following Internet e-mail address: *Jenny.Deboy@ssa.gov* . When sending in a question, applicants should include the program announcement number SSA-OESP-07-1 and the date of this announcement. In the rare instances when an organization may not have access to the Internet, an applicant with a question about the program content may contact: Jenny Deboy, Project Officer, or Barbara Jones, Team Leader, Social Security Administration, Office of Employment Support Programs, Office of Employment Policy, 107 Altmeyer Building, 6401 Security Boulevard, Baltimore, Maryland 21235. The telephone numbers are: Jenny Deboy,
(410)965-8658, or Barbara Jones,
(410)965-7764. The fax number is
(410)966-1278. To obtain an application kit, see the instructions under Part IV, Section A. For information regarding the application package where Internet access is not available, contact: Phyllis Y. Smith, Team Leader, or Gary Stammer, Grants Management Officer, Social Security Administration, Office of Acquisition and Grants, Grants Management Team, 7111 Security Boulevard, 1st Floor-Rear Entrance, Baltimore, Maryland 21244. The telephone numbers are Phyllis Y. Smith,
(410)965-9518, or Gary Stammer,
(410)965-9501. The fax number is
(410)966-9310. SUPPLEMENTARY INFORMATION: The Social Security Protection Act of 2004 (Pub. L. 108-203) reauthorized funding through FY 2009 for the WIPA program, which was initially authorized as the Benefits Planning, Assistance and Outreach
(BPAO)program by the Ticket to Work and Work Incentives Improvement Act of 1999 (Pub. L. 106-170), enacted on December 17, 1999. The WIPA Program is designed to provide work incentives planning, assistance, and outreach services to SSA's beneficiaries with disabilities nationwide, in all geographic areas and U.S. territories. SSA initially made announcements of BPAO cooperative agreement funds and requested applications for a 5-year period in FY 2000 and FY 2001. All previously funded BPAO cooperative agreement awards expired on September 29, 2006. In May 2006, SSA made an announcement of cooperative agreement funds for the WIPA program, nationwide, for the period September 30, 2006 through September 29, 2009. Awards under that announcement have been made. This supplementary announcement is for areas of the nation that remain uncovered subsequent to those awards. This announcement is to request applications for awards, which will begin in calendar year 2007, to provide work incentives planning, assistance and outreach services to all SSA beneficiaries with disabilities seeking employment in the geographic areas listed in “ SUMMARY ” above. Subject to the availability of funds, SSA anticipates minimum awards of $100,000 per entity (Minimum awards for territories remain at $50,000) and a maximum of $300,000 per entity will be available to fund specific WIPA projects annually. Awardees are required to contribute a non-Federal match of project costs of at least 5% of the total project cost. The non-Federal share may be cash or in-kind (property or services). Awards made under this announcement may be renewed annually through FY 2009. Future funding will be contingent upon satisfactory progress in achieving the objectives of the project, the availability of fiscal year funds and the continued relevance of the project activity to the Social Security Administration. The total period of performance, if renewed annually, will be until September 29, 2009. SSA will conduct pre-application teleconference seminars to provide interested WIPA applicants with guidance and technical assistance in preparing their applications. Information about when the seminars will be held will be on SSA's Web site at: *http://www.socialsecurity.gov/work/WIPARFA.html* Table of Contents I. Funding Opportunity Description A. Background B. Work Incentives Planning and Assistance Service Plan
(WIPA)C. Community Work Incentives Coordinator Responsibilities and Competencies D. Work Incentives Planning and Assistance Services Defined E. Additional Conditions for Award of a Cooperative Agreement II. Award Information III. Eligibility Information A. Eligible Applicants B. Policies Regarding Potential Conflict of Interest in WIPA Service Delivery C. Cost Sharing or Matching IV. Application and Submission Information A. Address to Request Application B. Content and Form of Application Submission C. Electronic Applications D. Mailed Applications E. Checklist for a Complete Application F. Guidelines for Application Submission G. Submission Dates and Times H. Intergovernmental Review I. Funding Restrictions J. Other Submission Requirements V. Application Review Information A. Criteria B. Review and Selection Process VI. Award Administration Information A. Award Notices B. Administrative and National Policy Requirements C. Reporting D. MI Program Data to be Collected and Reported VII. Agency Contacts VIII. Other Information I. Funding Opportunity Description A. Background Section 1149 of the Social Security Act, as added by section 121 of the Ticket to Work and Work Incentives Improvement Act of 1999, requires the Commissioner of Social Security (the Commissioner) to establish a community-based work incentives planning and assistance program for the purpose of disseminating accurate information to beneficiaries with disabilities on work incentives programs and issues related to such programs to assist them in their employment efforts. The Commissioner has established a competitive program of cooperative agreements to provide work incentives planning, assistance and outreach. This SSA program is called the Work Incentives Planning and Assistance
(WIPA)Program, formerly referred to as the Benefits Planning, Assistance and Outreach
(BPAO)Program. The WIPA program also provides information on the availability of protection and advocacy services to beneficiaries with disabilities, including beneficiaries participating in the Ticket to Work and Self-Sufficiency Program established under section 1148, the Supplemental Security Income
(SSI)program established under section 1619, and other programs that are designed to encourage beneficiaries with disabilities to seek, maintain and regain employment. The WIPA Program is an important part of SSA's employment strategy for beneficiaries with disabilities. One of SSA's goals in implementing the Ticket Program is to help achieve a substantial increase in the number of beneficiaries with disabilities who return to work and achieve greater self-sufficiency. In support of this goal, SSA is seeking applications from any State or local government (excluding any State agency administering the State Medicaid program), public or private organization, or nonprofit or for-profit organization (for-profit organizations may apply with the understanding that no cooperative agreement funds may be paid as profit to any cooperative agreement awardee), as well as Native American tribal organizations that the Commissioner determines is qualified to provide work incentives planning services. Applicants will emphasize the WIPA Program's efforts to provide Social Security beneficiaries receiving Social Security Disability Insurance
(SSDI)and/or Supplemental Security Income
(SSI)based on disability and/or blindness with work incentives planning, assistance and outreach services to assist them in their return to work efforts. Applicants are also strongly encouraged to partner with their local Department of Labor
(DOL)One-Stop Career Center which serves as a “port of entry” for jobs for beneficiaries, as well as with other local partners that provide employment-related services to SSA beneficiaries with disabilities. Currently, DOL One-Stop Career Centers have many invaluable employment-related resources and supports that can help ensure a disabled beneficiary's success in seeking and maintaining employment. While SSA recognizes that not every SSDI or SSI beneficiary with a disability will use work incentives planning and assistance services, awardees must make these services available to all eligible beneficiaries within a WIPA awardee's assigned geographic area. Note: All applications will be reviewed to determine completeness and conformity to the requirements of this announcement. Complete and conforming applications will then be forwarded to an independent panel of reviewers for evaluation. The results of this review and evaluation will assist the Commissioner in making award decisions. Although the results of this review and evaluation are a primary factor considered in making award decisions, the evaluated score is not the only factor used. In selecting eligible applicants to be funded, consideration may be given to issues such as experience, past performance, proposed costs, the need to achieve an equitable distribution of WIPA projects among geographic regions of the country, as well as, the need to achieve an equitable distribution of WIPA projects among disability and minority populations. B. Work Incentives Planning and Assistance
(WIPA)Service Plan In order to be considered for an award, WIPA applicants must provide a detailed written plan for how they will deliver the full range of work incentives planning and assistance services; have the resources, management, qualifications and experience necessary to successfully administer the project, as well as provide a written Quality Assurance
(QA)plan that demonstrates the efficacy of the service delivery plan. Applicants should also provide supporting documentation regarding how they will work with the Department of Labor
(DOL)One-Stop Career Centers; and a written assurance that they will work in collaboration with the Program Manager for Recruitment and Outreach (PMRO). Note: Additional information regarding how WIPA projects will work with the PMRO may be found at *www.socialsecurity.gov/work/WIPARFA.html* Applicants should address in their written plan: • Their understanding of work incentives planning and assistance services as they relate to a beneficiary's return to work efforts, including other Federal, State, and local benefits programs (designed to assist beneficiaries with disabilities with employment) with which they have worked in the past; • Their efforts to develop and maintain partnering and relationship with other employment-related local organizations, including DOL One-Stops, to maximize a beneficiary's return to work efforts; • Their ability to participate with the PMRO in conducting and coordinating outreach activities. Note: Additional information regarding how WIPA projects will work with the PMRO may be found at *www.socialsecurity.gov/work/WIPARFA.html* In view of the fact that the PMRO has primary responsibility for outreach, WIPA projects should designate no more than 10% of their project resources to other outreach efforts; • Provide a list of specific resources, services and supports that will be involved in the project and their roles as they relate to work incentives and a beneficiary's return to work efforts; • A detailed plan for monitoring beneficiary progress, case management and follow-up; • A standard process for collecting beneficiary-related Management Information
(MI)and a Quality Assurance
(QA)plan that will evaluate the work incentives planning and assistance services provided; Note: Applicants should document that they agree to collect Social Security Numbers
(SSNs)of beneficiaries and include them in the SSA approved data collection system so that SSA may further evaluate the work incentives services provided. • Written procedures for addressing potential organizational conflict of interest in regards to the delivery of WIPA services and other programs or services offered by the organization; and, • Written grievance procedures for beneficiaries and evidence of its compliance (which will be submitted to SSA quarterly.) Each applicant should address the proposed number of beneficiaries with disabilities it expects to serve. Awardees are encouraged to hire and staff their offices with individuals with disabilities who have used work incentives to successfully go to work. These individuals should conduct as many of the day-to-day operational functions as possible. Awardees must state how they will ensure equitable access and services for all beneficiary disability groups. This requirement may be met by partnering with other community-based organizations. In providing work incentives related education and planning, WIPA projects must make concerted and aggressive efforts to address the needs of underserved individuals with disabilities from diverse ethnic and racial backgrounds ( *e.g.* , African Americans, Native Americans, Native Hawaiians or Other Pacific Islanders, Alaskan Natives, Asian-Americans, and Hispanics). In particular, applicants should show how they will collaborate with PMRO to conduct outreach that will ensure interaction with diverse communities and be specific to their requested geographic area. Applicants who serve tribal lands and sovereign nations must also provide documentation of how they will ensure equitable access and services for Native-American and Alaskan-Native populations. Applicants must indicate if formal agreements with tribal governments or Section 121 VR Programs, etc., are in place. The applicants must also describe how they will address any special cultural requirements of populations, *e.g.* , Native Americans, within the targeted geographic area, as well as non-English speaking populations and SSI beneficiaries as young as age 14. Applicants must have established strong working relationships with other agencies that are already providing services designed to enhance the employability, employment and career advancement of beneficiaries with disabilities, particularly, DOL One-Stop Career Centers which provide employment support by assisting a beneficiary with interview techniques, resume writing, job coaching, and a variety of other support services that lead to employment. A full explanation of these collaborative efforts should be provided. In addition to DOL One-Stop Career Centers, awardees are encouraged to collaborate with other public and/or private organizations ( *e.g.* , SSA Field Offices, Centers for Medicare and Medicaid Services (CMS), Vocational Rehabilitation
(VR)Agencies, Employment Networks (ENs), Minority Commission, Public Schools, Department of Education, and Mental Health organizations), through interagency agreements or other mechanisms, to integrate and strengthen work incentives planning and assistance services with employment services available to beneficiaries with disabilities. Because of the life transitions that youth with disabilities experience, it is important to target specific services to this population. Each project must make WIPA services available to SSI beneficiaries as young as age 14 and state how they will target and serve transition-aged youth. Applicants for counties in the State of New York must indicate the ability to work closely with the SSA Youth Transition Process Demonstration
(YTD)projects. In October 2003 a grant was awarded to develop service delivery systems that demonstrate how communities can integrate services and resources to achieve positive transition results for youth from secondary education to either post-secondary education and/or employment. The YTD projects work with youth ages 14-25 who receive SSI or SSDI benefit payments based on their own disability and/or blindness, or youth at risk of receiving such benefits. Additional information regarding the YTD projects may be found at *http:\\www.socialsecurity.gov/disabilityresearch.* Applicants must provide evidence of collaborative relationships with relevant agencies through references in regards to work incentives experience, letters of intent, memoranda of understanding, etc. Applicants should not request references, letters of intent or commitment from SSA field offices as SSA will assure field office cooperation. The WIPA awardees will collect data pertaining to work incentives planning, assistance, and outreach activities as described in Part IV, Section C, Reporting; and cooperate with SSA in providing the information needed to evaluate the quality of the services being provided and for an assessment of the success of the WIPA Program. Where applicable, applicants should indicate if they are participants of the Disability Program Navigator
(DPN)initiative, a program established by the Social Security Administration
(SSA)and the Employment and Training Administration
(ETA)of the Department of Labor (DOL). Participants in the DPN initiative must fully explain how, with WIPA personnel and DPN personnel working collaboratively, they will provide seamless services to beneficiaries seeking employment. C. Community Work Incentives Coordinator Responsibilities and Competencies 1. Responsibilities The WIPA cooperative agreement awardees shall select individuals who will act as Community Work Incentives Coordinators (CWICs). The CWICs will provide work incentives planning and assistance directly to beneficiaries with disabilities to assist them in their employment efforts, and in collaboration with SSA's Program Manager for Recruitment and Outreach
(PMRO)contractor, conduct outreach efforts to beneficiaries with disabilities (and their families) who are potentially eligible to participate in Federal or State work incentives programs. As part of work incentives planning and assistance, CWICs will also screen and refer beneficiaries with disabilities to the appropriate Employment Networks
(ENs)based on the beneficiary's expressed needs and type of impairment. CWICs are also required to work in cooperation with SSA's Area Work Incentives Coordinators (AWICs), Federal, State, local and private agencies and other nonprofit organizations that serve beneficiaries with disabilities seeking employment. CWICs will also provide general information on the adequacy of health benefits coverage that may be offered by an employer of a beneficiary with a disability; the extent to which other health benefits coverage may be available to that beneficiary in coordination with Medicare and/or Medicaid; and the availability of protection and advocacy services for beneficiaries with disabilities and how to access such services. 2. Competencies and Credentialing Applicants must ensure that CWICs have the skills required to competently provide work incentives planning and assistance services that will assist beneficiaries in their employment efforts. WIPA awardees will be required to provide documentation to SSA that CWIC personnel meet the requirements below. SSA will use this documentation to credential CWIC personnel before they may begin providing beneficiary services. SSA prefers that CWICs have attained a bachelor's degree in a relevant field, or possess relevant experience. CWICs may possess a combination of education and experience if the experience provides the knowledge, skills and abilities required to successfully perform the duties of the position as shown below. Former beneficiaries may substitute up to two years of full-time work for the education requirement if they can demonstrate that they used SSA work incentives to successfully gain employment. All CWICs must demonstrate successful completion of required SSA sponsored work incentives training or shall complete said training within 3 months of hire. CWICs should bring the following knowledge, skills, and abilities to the position: • Basic math skills, with an emphasis on problem solving; • Deductive ability with analytical thinking and creative problem solving skills; • Competent interviewing and partnering skills; • Computer proficiency; • An ability to link an individual with disabilities with employment opportunities; • Ability to interpret Federal, State, and local laws, regulations, and administrative codes on public benefits; • Communication skills (written and verbal); • Knowledge of terminology used to describe certain disabilities and an awareness of cultural and political issues pertaining to diverse populations and disabilities; and • Basic computer skills. CWICs are required to be proficient in the following: • Social Security Disability Insurance
(SSDI)and Supplemental Security Income
(SSI)disability programs knowledge; • Knowledge of SSA and other Federal, State and local work incentives programs; • Knowledge of all public benefits programs, basic operations and inter-relationships among the programs, specifically in terms of their impact upon employment; • Translating technical information for lay individuals; • Accessing information in a variety of ways (including the ability to be able to recognize when additional information is needed); • How to access specific Employment Network
(EN)information; • Interpersonal skills ( *e.g.* , recognize and help people manage anger and conflict) • Knowledge of SSA's field office structure and how to work with various SSA work incentives specialists *e.g.* , Area Work Incentives Coordinators (AWICs), Plan to Achieve Self Support
(PASS)Specialists, Work Incentives Liaisons (WILs); • Knowledge of ethical standards of conduct ( *e.g.* , confidentiality, anger and conflict); • Counseling and evaluation-related skills (ability to listen, evaluate alternatives, advise on potential course of action); conflict of interest); and • Ability to manage beneficiary case files and information electronically. The applicant must clearly explain how it will ensure all individuals hired as CWICs will possess or acquire the relevant knowledge, skills and abilities. SSA may contract with separate entities to provide technical assistance and training about SSA's programs and work incentives, Medicare and Medicaid, and other Federal work incentives programs to awardees on an ongoing basis. Note: Due to the fact that CWICs will have access to confidential beneficiary information they are subject to SSA conducted background checks and fingerprinting in accordance with SSA personnel suitability requirements. SSA will distribute the necessary forms and consents for completion upon award. D. Work Incentives Planning and Assistance Services Defined 1. Work Incentives Planning Services Work incentives planning services requires an in-depth understanding of the beneficiary's current situation and how available work incentives can impact on a beneficiary's employment efforts. CWICs will establish written benefits analysis plans for beneficiaries with disabilities outlining their employment options and developing long-term supports that may be needed to ensure a beneficiary's success in regards to employment. CWICs will also, based upon a beneficiary's needs, make referrals to Employment Networks
(ENs)or Vocational Rehabilitation
(VR)when appropriate. CWICs will also provide periodic, follow-up planning services to ensure that the information, analysis, and guidance is updated as new conditions (with regard to the applicable programs or to the beneficiary's situation) arise. To provide work incentives planning services, CWICs will: • Obtain and evaluate comprehensive information about a beneficiary with a disability on the following: —Beneficiary's background, —Disabling Impairments/Conditions, —Educational and vocational, —Employment and earnings, —Resources, —Federal, State and local benefits availability, —Health insurance availability, —Work expenses, —Work Incentives availability, and —Service(s) and supports availability; • Assess the potential impacts of employment and other changes on a beneficiary's Federal, State and local benefits eligibility and overall financial well-being; • Provide detailed information and assist the beneficiary in understanding and assessing the potential impacts of employment and/or other actions or changes on his/her life situation, and provide specific guidance regarding the effects of various work incentives; • Develop a comprehensive framework of options available to a beneficiary and project results for each as part of the career development and employment process; and • Ensure confidentiality of all information provided. 2. Work Incentives Assistance Services Work incentives assistance involves the delivery of accurate information and direct supports to assist a beneficiary in determining the most advantageous work incentives to use in starting or returning to work. Work incentives assistance also involves providing information and referral in terms of Ticket to Work assignment to Employment Networks
(ENs)and Vocational Rehabilitation (VR). Work incentives assistance will generally build on previous planning services provided. Periodic updates of a beneficiary's specific needs and requirements, and reassessment for additional services for monitoring and managing work incentives to ensure a beneficiary's success in their employment efforts will also be required. To provide work incentives assistance services, CWICs will: • Emphasize the use of work incentives planning that will lead to greater self-sufficiency and employment for beneficiaries with disabilities; • Refer beneficiaries to Vocational Rehabilitation (VR), Employment Networks (ENs), DOL One-Stop Career Centers, as well as other organizations that emphasize or provide seamless employment-related supports and ticket assignments. • Help beneficiaries with disabilities resolve problems related to work and education efforts; • Provide ongoing, comprehensive work incentives monitoring and management assistance to beneficiaries who are employed or seeking employment; and • Provide long-term work incentives management on a scheduled, continuous basis, allowing for the planning and provision of supports at regular checkpoints, as well as critical transition points in a beneficiary's receipt of benefits, improvement of medical condition, work attempts, training and employment; • Provide ongoing direct assistance to a beneficiary in the development of a comprehensive, long-term work plan for the effective use of Federal, State and local work incentives. Specific components of the plan must address: —Desired return to work and self-sufficiency outcomes, —Related steps or activities necessary to achieve outcomes, —Associated dates or time frames, —Building on initial work incentives planning efforts including information gathering, analysis and advisement, and —Benefits/financial analysis (pre and post-employment); • Provide intensive assistance to beneficiaries, their key stakeholders, and their support teams in making informed choices and establishing employment-related goals. Needed assistance may include, but is not limited to, the following: —Explanations, descriptions, and written plans on how SSDI and SSI work incentive programs may lead to self-supporting employment by developing a Plan for Achieving Self-Support (PASS); the use of Impairment Related Work Expenses (IRWEs); the use of a Subsidy; Ability to claim unincurred Business Expenses; Continued Payments Under a Vocational Rehabilitation Program (also known as Section 301); as well as the possibility of reinstatement of benefits when necessary without filing a new application; —Explanations, descriptions, and written plans on how the SSI 1619(a) and 1619(b) provisions and requirements may lead to self-supporting employment by allowing for continued medical assistance coverage; earned income exclusion; student earned income exclusion; exclusion of property essential to self-support; as well as the possibility of reinstatement of benefits when necessary without filing a new application; —Explanations, descriptions, and written plans on how the SSDI trial work period
(TWP)and extended period of eligibility
(EPE)provisions may lead to self-supporting employment by allowing payment of benefits for a specified period of time dependent upon the amount of earnings; —Advocating for work supports on behalf of a beneficiary with other agencies and programs, which requires in-person, telephone and/or written communication with the beneficiaries, other individuals and other involved parties, generally, over a period of several weeks to several months. • Provide ongoing follow-up assistance to beneficiaries who have previously received work incentives planning and/or other types of work incentives assistance services, and assist them and other involved to: ◦ Update their information, ◦ Contact an Employment Networks
(ENs)or Vocational Rehabilitation, when necessary, ◦ Reassess the impact of employment and other changes on benefits and work incentives, and ◦ Provide additional guidance on work incentives options, issues and management strategies. • Assist beneficiaries to update work incentives management plans throughout their employment efforts; • Collaborate with SSA's Program Manager for Recruitment and Outreach
(PMRO)to conduct outreach to beneficiaries with disabilities about the use of work incentives to work. 3. Support to PMRO Work Incentives Education/Ticket Marketing/Recruitment The WIPA awardees will be required to provide local CWIC support to the PMRO in order to provide community-based Work Incentives Educational Seminars for beneficiaries with disabilities to learn about available work incentives. These local Work Incentives Education/Ticket Marketing/Recruitment meetings are intended to provide accessible, scenario based learning opportunities for beneficiaries with disabilities to understand the availability and use of work incentives to assist them in their return to work efforts. In addition, at the end of these meetings, Vocational Rehabilitation (VR), Employment Networks
(ENs)and other employers will also be invited to participate to introduce their services so that beneficiaries who want to work will be informed about available employment support services and opportunities in the community. The PMRO has primary responsibility for outreach. In support of PMRO activities, WIPA's should designate a maximum of 10% of their staff time to ticket marketing/recruiting efforts under the direction of the PMRO. Note: Additional information regarding how WIPA projects will work with the PMRO may be found at *http://www.socialsecurity.gov/work/WIPARFA.html* The WIPA should make staff resources available at least one day per week to assist the PMRO to: • Identify accessible local venues for holding meetings (preference should be given to DOL One-Stop Career Centers); • Conduct regular (at least weekly) work incentives education and Ticket to Work recruitment sessions in collaboration with the PMRO, SSA staff, the local Workforce Investment Board's Disability Program Navigators, local Employment Networks (ENs), Vocational Rehabilitation (VR), employers and other potential partners. • At the weekly sessions present, with the assistance of local SSA staff (if available), a 60-90 minute scenario-based work incentives overview (to be provided in accessible formats) by the PMRO. 4. Additional Work Incentives Outreach Services Work incentives outreach activities are educational efforts to inform beneficiaries of available work incentives, as well as the services and supports available to enable them to access and benefit from those work incentives in terms of working. In view of the fact that the PMRO has primary responsibility for outreach, WIPA's should designate no more than 10% of their project resources for other local outreach efforts; excluding those resources allocated to the PMRO Work Incentives Educational Seminars. WIPA's will be provided such things as marketing materials, developed by the PMRO. Each project will support the PMRO in doing outreach, participate with them, and coordinate any outreach activities through them. Outreach activities should be targeted directly to SSDI and SSI beneficiaries with disabilities, their families, advocacy groups, service provider agencies, and employers that have regular contact with them. Outreach activities should be directed toward and sensitive to the needs of individuals from diverse ethnic backgrounds, such as persons with English as their second language, non-English speaking persons, individuals residing in highly urban or rural areas, and other traditionally underserved groups. To conduct ongoing local outreach, CWICs will: • Prepare and disseminate information explaining the Ticket to Work Program and other Federal, State or local work incentives programs and their interrelationships; and • Market the Ticket to Work Program by working in cooperation with the PMRO contractor as well as other Federal, State, and private agencies and nonprofit organizations that serve beneficiaries with disabilities, such as DOL One-Stop Career Centers and other agencies and organizations that focus on vocational rehabilitation and work-related training and counseling. To assist SSA in assessing the scope and usefulness of outreach and information provided under this program, each project is required to demonstrate a collaborative effort with other community-based organizations experienced in providing services to people with disabilities, particularly DOL One-Stop Career Centers. Applicants should provide proof that the assigned Project Director possesses work incentives management experience and has knowledge of all SSA's work incentives available to beneficiaries with disabilities. In addition, projects will conduct regular work incentives education and Ticket to Work outreach sessions in collaboration with the PMRO, SSA staff, the local Workforce Investment Board's Disability Program Navigators, Vocational Rehabilitation (VR), local Employment Networks
(ENs)and other potential partners. Projects will also need to coordinate joint outreach services with the SSA Area Work Incentives Coordinator
(AWIC)to include attendance at quarterly Training and Technical Assistance meetings with the AWIC. 5. Costs Federal cooperative agreement funds may be used for allowable costs incurred by WIPA awardees in conducting direct work incentives planning and assistance services to SSA's beneficiaries with disabilities. These costs could include administrative and overall project management costs, within the limitations discussed in Section II, Award Information.Federal cooperative agreement funds are not intended to cover costs that are reimbursable under an existing public or private program, such as social services, rehabilitation services, or education. No SSDI or SSI beneficiary can be charged for any service delivered under a WIPA project cooperative agreement, including the preparation of a PASS. Work incentives planning and assistance services are intended to be free and must be made accessible to all SSA beneficiaries with disabilities in the project's geographical area. E. Additional Conditions for Award of a Cooperative Agreement Upon award, the WIPA cooperative agreement awardees shall: 1. Employ CWICs and require them to complete an approved initial four day training session within 3 months of award. SSA, or its designated technical assistance and training contractor, will provide technical assistance and training about SSA's programs and work incentives ( *e.g.* , TWP, EPE, IRWE, 1619(a) and (b), PASS) and Medicaid buy-in provisions/Balanced Budget Act, Medicare and Medicaid, and on other Federal work incentives programs to WIPA projects. CWICs will be trained on how to screen and refer beneficiaries with disabilities to the appropriate ENs based on the beneficiary's expressed needs and types of impairments. WIPA awardees must provide training and technical assistance to their CWICs about applicable State and local programs and the effects that these programs have on the eligibility and benefits of other programs. 2. Ensure that CWICs are provided periodic refresher, update and new hire training sessions, as needed, and that they take part in the evaluation of training activities and the evaluation of ongoing training needs evaluation by SSA or its designated contractor. 3. Ensure that CWICs have completed work incentives training within 3 months of award, develop a local outreach strategy and begin to implement outreach, in collaboration with PMRO, within 3 months of award. 4. Obtain approval from SSA of management information system data collection elements and procedures with SSA to assure compatibility with the national data base collection program (within 60 days after award); Note: Applicants should document that they agree to collect Social Security Numbers
(SSNs)of beneficiaries and include them in the SSA approved data collection system so that SSA may further evaluate the work incentives services provided. 5. Develop and submit quarterly program progress reports that contain management information to SSA's Office of Acquisition and Grants
(OAG)and SSA's Office of Employment Support Programs; 6. Develop and submit bi-annual financial reports to SSA, OAG; 7. Provide to SSA for approval and prior to implementation a detailed description of any and all planned changes to the project design; 8. Cooperate with SSA in scheduling and conducting site visits, and allow SSA immediate access to WIPA facilities, personnel, and SSA beneficiaries upon request; 9. Develop and maintain a collaborative working relationship with the local servicing SSA field offices; 10. Implement an ongoing management and quality assurance process set by SSA. II. Award Information Legislative authority for this cooperative agreement program is in section 1149 of the Social Security Act (the Act), as established by section 121 of Public Law 106-170 and subsequent reauthorization in Section 407 of Public Law 108-203. The regulatory requirements that govern the administration of SSA awards are in the Code of Federal Regulations, Title 20, Parts 435 and 437 (as published in the May 27, 2003 **Federal Register** at 68 FR 28710 and 28727). Applicants are urged to review the requirements in the applicable regulations. All awards made under this program are in the form of cooperative agreements. A cooperative agreement anticipates substantial involvement between SSA and the awardee during the performance of the project. Involvement shall include SSA collaboration or participation in the management of the activity as determined at the time of the award. For example, SSA will be involved in decisions involving project design and scope, hiring of personnel, service delivery priorities, deployment of resources, release of public information materials, quality assurance, and coordination of activities with other offices. Actual funding availability during this period is subject to annual appropriation by Congress. SSA anticipates that the award under this announcement will be made in early calendar year 2007. SSA will award cooperative agreements to qualified entities based on the number of beneficiaries with disabilities receiving SSDI and/or SSI benefits who reside in the geographic area to be served. Subject to the availability of funds, SSA anticipates that a minimum of $100,000 per entity (Minimum awards for territories remains at $50,000) and a maximum of $300,000 per entity will be available to fund specific WIPA projects annually. SSA may suspend or terminate any cooperative agreement in whole or in part at any time before the date of expiration, whenever it determines that the awardee has failed to comply with the terms and conditions of the cooperative agreement. SSA will promptly notify the awardee in writing of the determination and the reasons for suspension or termination, and the effective date of the suspension or termination. III. Eligibility Information A. Eligible Applicants A cooperative agreement may be awarded to any State or local government (excluding any State administering the State Medicaid program), public or private organization, or nonprofit or for-profit organization (for-profit organizations may apply with the understanding that no cooperative agreement funds may be paid as profit to any awardee), as well as Native American tribal organizations that the Commissioner determines is qualified to provide work incentives planning, assistance and outreach services to all SSDI and SSI beneficiaries with disabilities, within the targeted geographic area. Partners may include; but are not limited to, Centers for Independent Living established under title VII of the Rehabilitation Act of 1973, protection and advocacy organizations, Native American tribal entities, client assistance programs established in accordance with section 112 of the Rehabilitation Act of 1973, State Developmental Disabilities Councils established in accordance with section 124 of the Developmental Disabilities Assistance and Bill of Rights Act, and State agencies administering the State program funded under part A of title IV of the Act. The Commissioner may also award a cooperative agreement to a State or local Workforce Investment Board, a Department of Labor
(DOL)One-Stop Career Center System established under the Workforce Improvement Act of 1998, or a State Vocational Rehabilitation
(VR)agency. Note: SSA will not further consider applications for independent panel review that do not meet the organizational eligibility criteria as noted above. Note: For-profit organizations may apply with the understanding that no cooperative agreement funds may be profit to an awardee of a cooperative agreement. Profit is considered as any amount in excess of the allowable costs of the cooperative agreement awardee. A for-profit organization is a cooperation or other legal entity that is organized or operated for the profit or benefit of its shareholders or other owners and must be distinguishable or legally separable from that of an individual acting on his/her own behalf. Applications will not be further considered for independent panel review that do not meet all eligibility criteria at the time of submission of applications. Cooperative agreements may not be awarded to: • Any individual; • Social Security Administration Field Offices; • Any State agency administering the State Medicaid program under title XIX of the Act; • Any organization described in section 501(c)(4) of the Internal Revenue Code of 1968 that engages in lobbying (in accordance with section 18 of the Lobbying Disclosure Act of 1995, 2 U.S.C. 1611) B. Policies Regarding Potential Conflict of Interest in WIPA Service Delivery All applicants applying for a cooperative agreement must fully document how they will ensure there will be no conflict of interest between providing work incentives planning and assistance services and delivering employment network-related services or protection and advocacy-related services to beneficiaries with disabilities in their employment efforts. In particular, they must demonstrate how issues will be resolved when a complaint or issue is against a CWIC or WIPA organization. Also, State Vocational Rehabilitation
(VR)agencies and other organizations that are, or will apply to be a WIPA project, under SSA's Ticket to Work and Self-Sufficiency Program, must fully explain how they will resolve potential conflict of interest issues in the event it also receives a cooperative agreement to provide work incentives planning and assistance services. This is especially important in the areas of providing beneficiaries complete information regarding other organizations from which they may choose to receive employment services. Note: SSA will not accept for further consideration applications for independent panel review that do not include documented policies and procedures regarding the resolution of potential conflict of interest issues as noted above. C. Cost Sharing or Matching Awardees of SSA cooperative agreements are required to contribute a non-Federal match of at least 5 percent toward the total cost of each project. The total cost of the project is the sum of the Federal share (up to 95 percent) and the non-Federal share (at least 5 percent). The non-Federal share may be cash or in-kind (property or services) contributions. Note: SSA will not accept for further consideration applications for independent panel review that do not document their agreement to cost sharing/matching as noted above. IV. Application and Submission Information A. Address To Request Application It is required that an electronic application be submitted through *www.grants.gov* for Funding Opportunity Number SSA-OESP-07-1 The *www.grants.gov* , “Get Registered” Web page is available to help explain the registration and application submission process. In addition, new Federal grant applicants may find the *Grants.gov* Registration Brochure on the above noted Web site to be helpful. If you experience problems with the steps related to registering to do business with the Federal government or application submission, your first point of contact is the *Grants.gov* support staff at *support@grants.gov* , 1-800-518-4726. If your difficulties are not resolved, you may also contact the SSA Grants Management Team for assistance: Gary Stammer, 410-965-9501; Audrey Adams, 410-965-9469; Mary Biddle, 410-965-9503; Ann Dwayer, 410-965-9534; Phyllis Y. Smith, 410-965-9518. If extenuating circumstances prevent you from submitting an application through *www.grants.gov* , please contact the SSA Grants Management Team for possible prior approval to download, complete and submit an application by mail. Please fax inquiries regarding the application process to the Grants Management Team at 410-966-9310 or mail to: Social Security Administration, Office of Acquisition and Grants, Grants Management Team, *Attention:* SSA-OESP-06-1, 1st Floor-Rear Entrance, 7111 Security Blvd., Baltimore, Md. 21244. To ensure receipt of the proper application package, please include program announcement number SSA-OESP-07-1 and the date of this announcement. B. Content and Form of Application Submission Prospective applicants are asked to submit, preferably by November 8, 2006 an e-mail, a fax, postcard, or letter of intent that includes:
(a)The program announcement number (SSA-OESP-07-1) and title, Work Incentives Planning and Assistance
(WIPA)Program;
(b)The name of the agency or organization that is applying; and
(c)The name, mailing address, e-mail address, telephone number, and fax number for the organization's contact person. The notice of intent is not required, is not binding, and does not enter into the review process of a subsequent application. The purpose of the notice of intent is to allow SSA staff to estimate the number of independent reviewers needed and to avoid potential conflicts of interest in the review. The notice of intent should be faxed to
(410)966-1278; mailed to Social Security Administration, Office of Employment Support Programs, Office of Beneficiary Outreach and Employment Support, 107 Altmeyer Building, 6401 Security Boulevard, Baltimore, Maryland 21235-6401; or e-mailed to *Jenny.Deboy@ssa.gov* or *Barbara.Jones@ssa.gov* . C. Electronic Applications When submitting an application electronically *www.grants.gov* automatically ensures a complete application is submitted. D. Mailed Applications Applications that are not submitted by December 15, 2006 are considered late applications. SSA will not waive or extend the deadline for any application unless the deadline is waived or extended for all applications. SSA will notify each late applicant that its application will not be considered. Applicants that do not have access to the Internet should contact the Office of Acquisitions and Grants Management Team for further details on how to complete an application. All applications that meet the deadline of December 15, 2006 will be screened to determine completeness and conformity to the requirements of this announcement. Complete and conforming applications will then be evaluated. —Length: The program narrative portion of the application may not exceed 50 double-spaced pages (or 25 single-spaced pages) on one side of the paper only, using standard (8 1/2 ″ × 11″) size paper, and 12-point font. Attachments that support the program narrative count towards the 50-page limit; resumes and letters of support do not count within the 50-page limit. E. Checklist for a Complete Application The checklist below is a guide to ensure that the application package has been properly prepared. — An original, signed and dated application plus at least two copies (if submitting paper application as opposed to an electronic application.) If submitting paper application, seven additional copies are optional but will expedite processing. Note: When submitting an application electronically *www.grants.gov* automatically ensures a complete application is submitted. — The project narrative portion of the application, which includes the applicant's detailed service delivery plan, may not exceed 50 double-spaced pages (25 single-spaced pages) on one side of the paper only, using standard (81/2” x 11”) size paper, and 12-point font. Attachments that support the program narrative count towards the 50-page limit; resumes and letters of support do not count in the 50-page limit. — Attachments/Appendices, when included, should be used only to provide supporting documentation. Please do not include books or videotapes as they are not easily reproduced and are therefore inaccessible to reviewers. — A complete application, which consists of the following items in this order:
(1)Part I (Face page)—Application for Federal Assistance;
(2)Table of Contents;
(3)Brief Project Summary or Synopsis (not to exceed one page);
(4)Part II—Budget Information, Sections A through G;
(5)Budget Justification (in Section B Budget Categories, explain how amounts were computed), including subcontract organization budgets;
(6)Part III—Application Narrative and Appendices; Note: Project Narrative should include the required detailed service delivery plan.
(7)Part IV—Assurances;
(8)Additional Assurances and Certifications—regarding Lobbying and regarding Drug-Free Workplace. F. Guidelines for Application Submission All applications for this cooperative agreement project must be submitted on the prescribed forms. The application shall be executed by an individual authorized to act for the applicant organization and to assume for the applicant organization the obligations imposed by the terms and conditions of the cooperative agreement award. Submission through *Grants.gov* generates signatures in all required fields. It is important that only an authorized representative submit the application. In item 12 of the Face Sheet (SF 424), the applicant must clearly indicate the application submitted is in response to this announcement (SSA-OESP-07-1). The applicant also is encouraged to select a short descriptive project title. Prospective applicants are asked to submit, preferably by November 8, 2006, an e-mail, fax, post card, or letter of intent that includes
(1)the program announcement number (SSA-OESP-07-1) and title (Work Incentives Planning and Assistance
(WIPA)Program);
(2)the name of the agency or organization that is applying; and
(3)the name, mailing address, e-mail address, telephone number, and fax number for the organization's contact person. The notice of intent is not required, is not binding, and does not enter into the review process of a subsequent application. The purpose of the notice of intent is to allow SSA staff to estimate the number of independent reviewers needed and to avoid potential conflicts of interest in the review. The notice of intent should be faxed to
(410)966-1278; mailed to Social Security Administration, Office of Employment Support Programs, Division of Employment Policy, 107 Altmeyer Building, 6401 Security Boulevard, Baltimore, Maryland 21235-6401; or e-mailed to *Jenny.Deboy@ssa.gov* or *Barbara.Jones@ssa.gov* . G. Submission Dates and Times All applications must be submitted by the closing date of December 15, 2006. When authorized by the SSA Grants Management Team, applications may be mailed or hand-delivered to: Grants Management Team, Office of Acquisition and Grants, OAG, Social Security Administration, Attention: Attention: SSA-OESP-07-1, 1st Floor-Rear Entrance, 7111 Security Blvd., Baltimore, Md. 21244. Hand-delivered applications are accepted between the hours of 8 a.m. and 5 p.m., Monday through Friday. An application will be considered as meeting the deadline if it is either: • Received from Grants.gov on or before the deadline date; or • When a mailed application has been authorized by the Grants Management Team, received at the above address on or before the deadline date; or • When a mailed application has been authorized by the Grants Management Team, mailed through the U.S. Postal Service or sent by commercial carrier on or before the deadline date and received in time to be considered during the competitive review and evaluation process. Packages must be postmarked by December 15, 2006. Applicants are cautioned to request a legibly dated U.S. Postal Service postmark or to obtain a legibly dated receipt from a commercial carrier as evidence of timely mailing. Private-metered postmarks are not acceptable as proof of timely mailing. H. Intergovernmental Review The applicant organization is to check with your State's Single Point of Contact
(SPOC)to find out about and comply with your State's process under Executive Order 12372. SPOCs are listed in the Office of Management and Budget's home page at: *http://www.whitehouse.gov/omb/grants/spoc.html* I. Funding Restrictions Construction expenses: SSA programs do not have construction authority but may support limited alteration and renovation costs. Amounts included under this category must be fully explained under Section F of the application. J. Other Submission Requirements Application packages are provided at *www.grants.gov* . If extenuating circumstances prevent you from submitting an application through *www.grants.gov* please contact the SSA Grants Management Team (at the Office of Acquisitions and Grants (OAG), Social Security Administration, Grants Management Team, Attention: SSA-OESP-07-1, 1st Floor-Rear Entrance, 7111 Security Blvd., Baltimore, Md. 21244.) for possible prior approval to download, complete and submit an application package by mail. All applicants for Federal grants and cooperative agreements on or after October 1, 2003 are required to provide a Dun and Bradstreet (D&B) Data Universal Number System
(DUNS)number. The DUNS number is required whether an applicant is submitting a paper application or using the government-wide electronic portal (Grants.gov). Organizations should verify that they have a DUNS number or take the steps needed to obtain one as soon as possible. Organizations can receive a DUNS number at no cost by calling the dedicated toll-free DUNS number request line at 1-866-705-5711. V. Application Review Information A. Criteria Upon receipt, all applications will be reviewed to determine completeness and conformity to the requirements of this announcement. If an applicant is determined to be ineligible, or the application is incomplete or nonconforming to the requirements of this announcement, the application will be returned to the applicant and will no longer be considered for award. Applications that are complete and conform to the requirements of this announcement will then be forwarded to an independent panel of reviewers for evaluation. B. Review and Selection Process The results of this review and evaluation will assist the Commissioner of Social Security in making the award decision. Although the results of this review and evaluation are a primary factor considered in making the decisions, the evaluated score is not the only factor used. In selecting eligible applicants to be funded, consideration will be given to issues such as experience, past performance, proposed costs, the need to achieve an equitable distribution of WIPA projects among geographic regions of the country, as well as, the need to achieve an equitable distribution of WIPA projects among disability and minority populations. There are four categories of criteria used to score applications: Relevance/adequacy of project design and scope; resources and management; quality assurance, and collaboration/partnerships. The total points possible for an application are 100. Following are the evaluation criteria that SSA will use in reviewing all applications (relative weights are shown in parentheses): 1. Relevance/Adequacy of Project Design and Scope (50 Points) The adequacy of the project design and scope will be evaluated based on the following criteria in descending order of priority: • The applicant's description of the project operations, including the project's documented knowledge of work incentives as they relate to employment and how the project will provide services to beneficiaries with disabilities regarding employment (e.g., identify how project will notify potential beneficiaries about the availability of work incentives planning and assistance services, location(s) for providing services, ability to travel to the beneficiary, etc) and the quality of the project design; • Applicant's evidence that their project design and scope will successfully assist beneficiaries with disabilities obtain, regain or maintain gainful employment; • The applicant's clear and concise statement of the project goals and objectives; and process(es) for collecting SSA required management information; specification of data sources; including how they will interact with the SSA approved national data base; • The applicant's description of how the project will address provisions of work incentives planning, assistance and outreach to populations with special cultural or language requirements specific to their geographic area; • The applicant's plan for providing work incentives planning, assistance and outreach to transition-to-work aged SSI youth; • The applicant's identification of problems that may arise and how they will be resolved; e.g., how dropouts and inadequate numbers of beneficiary participants will be handled. • If appropriate in the applicant's State or Region, a plan for providing seamless employment services to individuals seeking to enter the workforce through the SSA DOL/ETA Disability Program Navigator
(DPN)initiative and existing Employment Networks (ENs). Note: Applicants in a State or Region that do not have a DPN or EN need not address this issue in their application and may receive all available points for this criteria. Evaluation panels will not use this sub-criteria in the application evaluation for those States or Regions where it is not applicable. • If appropriate in the applicant's State, a plan for providing work incentives planning, assistance and outreach to States involved in the Youth Transition Process Demonstration; Note: Applicants in a State or Region that do not have a YTD need not address this issue in their application and may receive all available points for this criteria. Evaluation panels will not use these sub-criteria in the application evaluation for those States or Regions where it is not applicable. 2. Resources and Management (20 Points) Resources and management will be evaluated based on the following: • The applicant's documentation that the Project Directors and CWICs have the necessary experience to successfully implement the program requirements described in this RFA; (Specifically, projects successfully involving return-to-work initiatives for SSDI and SSI beneficiaries with disabilities.) • The applicant's description and adequacy of the proposed infrastructure and organization of the project, including the existence of the necessary administrative resources to effectively carry out the program requirements; • The applicant's plan for providing personnel who meet the qualification criteria cited in this RFA under Section I as evidenced by training and experience which indicates that they have the skills required to competently provide work incentives planning and assistance services; • The applicant's plan for providing staff members who are individuals with disabilities to conduct the day-to-day operational functions; • The applicant's evidence of sufficient resources, including personnel, time, funds, and facilities that will be available to support beneficiaries with disabilities obtain, maintain or regain employment under this program. The applicant's evidence of adequate facilities should include accessibility to public transportation, elevators, and ramps. 3. Quality Assurance (20 Points) The applicant's quality assurance plan will be evaluated based on the following: • The applicant's plan for ensuring ongoing training needs (refresher and update training) of CWICs and other personnel, as appropriate, to ensure that personnel maintain knowledge, skills, and abilities as required to perform their job duties; • The applicant's plan for using management information data and caseload reviews to improve processes, such as beneficiary case-management and follow-up services, and to ensure that all work incentives information given to beneficiaries is accurate and applicable. The applicant's plan must include how it intends to track the progress and outcomes of beneficiaries based on services provided by the CWIC. SSA is interested in identifying beneficiary outcomes under the WIPA Program to determine the extent to which beneficiaries with disabilities achieve their employment, financial, and health care goals. Therefore, SSA is requiring that cooperative agreement awardees collect beneficiary specific data regarding the employment status, benefit status, and income of beneficiaries before and after providing services under these cooperative agreements; • The applicant's evidence of existing case management and monitoring systems and techniques, including a management information system; • The applicant's detailed quality assurance plan and how well it complies with the requirements of this RFA in terms of data collection, reporting, and ensuring that only accurate information is provided to beneficiaries with disabilities and other interested parties, as appropriate. 4. Collaboration/Partnerships (10 Points) The applicant's collaborative activities and partnerships will be evaluated based on the following: • Evidence of the applicant's working relationship with the local DOL One-Stop Career Center; • Applicant's evidence of other collaborative activities with relevant agencies, *e.g.* , Vocational Rehabilitation, Centers for Medicare and Medicaid Services (CMS), Dept. of Education, Minority Commission, Workforce Centers, Employment Networks, and Mental Health organizations, in providing work incentives planning and assistance services; and the extent to which the applicant partnered in collaborative efforts with these organizations, including letters of intent or written assurances from cited organizations; • The applicant's plan to work in collaboration/cooperation with the PMRO. Note: Additional information regarding how WIPA projects will work with the PMRO may be found at *http://www.socialsecurity.gov/work/WIPARFA.html* VI. Award Administration Information A. Award Notices A cooperative agreement award will be issued within the constraints of available Federal funds and at the discretion of SSA. The official award document is the “Notice of Cooperative Agreement Award.” It will provide the amount of the award, the purpose of the award, the term of the agreement, the total project period for which support is contemplated, the amount of financial participation required, and any special terms and conditions of the cooperative agreement. The Notice of Cooperative Agreement Award signed by the Grants Officer is the authorizing document. These awards will be issued via e-mail. B. Administrative and National Policy Requirements No administrative or national policy requirements have been identified by SSA for the WIPA Program. C. Reporting Entities must provide all collected data and report the results to SSA's Office of Acquisition and Grants, Grants Management Team (OAG, GMT), as described below. The entities awarded a cooperative agreement under this notice shall submit quarterly progress reports to OAG, GMT. SSA expects that the project will need a period of time to begin providing services and collecting management information. Therefore, the first quarterly program report shall include a description of the project, a status of data collection operations, actions that were taken, actions planned, and a description of how the project is addressing the needs of individuals with disabilities from diverse ethnic and racial communities, both in work incentives planning and in carrying out outreach activities. Subsequent quarterly program reports shall provide: a status of the project, problems or proposed changes in the project ( *e.g.* , requests for technical assistance from contractor, interagency agreement change); specific information (baseline data/program statistics) required by SSA, including those listed above; a description of how the project is addressing the needs of individuals with disabilities from diverse ethnic and racial communities, both in work incentives planning and outreach activities; quality assurance measures, goals achieved, collaboration activities, outcomes achieved by beneficiaries served including success stories involving employment, actions that were taken and have been planned. The quarterly program reports shall be submitted to SSA, OAG, within 30 days after the end of the quarter. Financial status reports shall be submitted bi-annually. The first report is due within 30 days after the end of the first six month period and a final report is due within 90 days after the end of the budget period. SSA personnel (SSA Project Officer and/or other staff) expect to visit projects at least once in each year of the cooperative agreement. The SSA Project Officer shall review site operations, collect management information, assess the quality assurance plan and goal achievement, and evaluate how projects are finding ways to make work incentives planning and assistance activities more effective in achieving SSA's program goals. Staff members shall attend an initial orientation meeting that will include an orientation session by SSA and subsequent scheduled conferences at SSA headquarters or alternate sites chosen by SSA. Those meetings will provide the awardee of the cooperative agreement with the opportunity to exchange information with SSA and other awardees. D. MI Program Data To Be Collected and Reported Common data elements will be collected through a national on-line database. The awardees and SSA will use the management information
(MI)data to manage the project and to determine what additional resources or other approaches may be needed to improve the process. The data will also be valuable to SSA in its analysis of and future planning for the SSDI and SSI programs. SSA is interested in identifying participant outcomes under the WIPA Program to determine the extent to which participants achieve their employment, financial, and health care goals. Therefore, SSA is requiring that cooperative agreement awardees collect data regarding the employment status, benefit status, and income of beneficiaries before and after providing services in order to help ensure that SSA beneficiaries with disabilities are gaining effective supports and follow-up services needed to move towards gainful employment. Data to be collected will include information about: Beneficiaries' demographic characteristics; Beneficiaries' Social Security Numbers (SSNs); Beneficiaries' income support characteristics (including earnings and SSA and non-SSA benefits); Beneficiaries' non-income support characteristics (including access to public and private health care); Beneficiaries' work goals and strategies; Beneficiaries' use of SSA's work incentives; Isolated outreach activities for evaluation purposes; and Employment outcomes. The projects will collect, analyze, and summarize the specific data elements listed below: A. Beneficiary information: 1. Beneficiary/recipient name (Last, First, Middle); 2. Date of birth; 3. Gender; 4. Special language or other consideration; 5. Mailing address; 6. Telephone number; 7. Social Security Number (SSN); 8. Representative payee
(RP)name (if applicable); 9. RP address; 10. Current level of education; 11. Whether pursuing education currently and at what level (e.g., post secondary, continuing adult education, special education, vocational education); 12. Proposed educational goals; 13. Primary diagnosis; 14. Secondary diagnosis (if applicable); 15. Employer health care coverage at outset (if working); 16. Other health care coverage. B. Employment Information and Outcomes: (current and proposed goals—when applicable.) 1. Self-employed or employee; 2. Type of work; 3. Beginning date; 4. Hours per week; 5. Monthly gross earned income; 6. Monthly net earned income; 7. Work-related expenses; C. Program Manager for Recruitment and Outreach
(PMRO)Activities: 1. Dates, times, location and attendance information on work incentives education seminars and other Ticket to Work Marketing sessions conducted in collaboration with the PMRO; 2. Beneficiaries' income support characteristics (including earnings and SSA and non-SSA benefits); 3. Beneficiaries' non-income support characteristics (including access to public and private health care); 4. Beneficiaries' identified work goals and strategies for attaining successful employment outcomes (For example, will a beneficiary need to seek additional training or education in order to attain an identified employment outcome?); 5. Other local outreach activities conducted by the project for further evaluation purposes; D. Benefits: (current and expected changes if employment goals are reached) 1. SSDI; 2. SSI; 3. Concurrent (SSDI and SSI); 4. Medicare; 5. Medicaid; 6. Private Health Insurance; 7. Subsidized housing or other rental subsidies; 8. Food Stamps; 9. General Assistance; 10. Workers Compensation benefits; 11. Unemployment Insurance benefits; 12. Other Federal, State, or local supports, including TANF (specify). E. Incentives to be used: 1. Trial-work period (TWP); 2. Extended period of eligibility (EPE); 3. Impairment-related work expenses (IRWE); 4. Plan for achieving self-support (PASS); 5. 1619(a); 6. Continuing Medicaid (1619(b)); 7. Medicaid buy-in provisions/Balanced Budget Act; 8. Blind Work Expense; 9. Student Earned Income Exclusion; 10. Subsidy Development; 11. Extended Medicare; 12. Property Essential to Self-Support; 13. Earned Income Exclusion; 14. SGA limits (unsuccessful work attempt, subsidy, unincurred business expenses, etc.). F. Services to be used: 1. Vocational Rehabilitation services; 2. Para-transit services; 3. Protection and Advocacy services; 4. Work-related training/counseling program; 5. USDOL/ETA One-Stop Career Center services; 6. Transitioning youth services (from school to post-secondary education or to work); 7. Employment Network services; 8. Services for beneficiaries with visual impairments (i.e., service animals); 9. Employer Referral and Assistance Network (EARN); 10. Other Advocacy-related Services. G. Monthly Work Incentives Planning and Assistance
(WIPA)activities performed: 1. Number of SSDI/SSI beneficiaries (over age 18) requesting assistance (initial and repeat requests); 2. Number of SSDI/SSI beneficiaries (ages 14 to 18) requesting assistance (initial and repeat requests); 3. Number of new work incentives plans prepared; 4. Number of updated work incentives plans prepared; 5. Number of presentations given at forums, conferences, meetings, etc.; 6. Number of work incentives education and Ticket to Work marketing sessions conducted in collaboration with the PMRO; 7. Number of follow-up contacts with beneficiaries; 8. Number of times exhibited at forums, conferences, meetings, etc.; 9. Number of contacts with Area Work Incentives Coordinators (AWICs). Additional information such as the time spent per beneficiary/recipient, beneficiary's waiting time for a response, waiting time for an appointment and for services, the reason for service request, the level of service provided, and any anticipated or verified employment status change of the beneficiary will also be reported by awardee. All data elements are to be collected through an SSA approved national online database, in order to allow for analysis of project efficacy and the comparability of the data across project sites. The application requirements in Part IV are the minimum amount of required project information. Projects will be responsible for collecting management information (MI), producing regular reports, and producing a final report which analyzes the successes and/or failures of the methodology used to provide work incentives planning and assistance services to SSDI and SSI beneficiaries. Note: Reporting guidelines are outlined in Section VI (Award Administration Information) Part 2: Reporting; and, Part 3: Management Information Program Data to be Collected and Reported. All projects must adhere to SSA's Privacy and Confidentiality Regulations (20 CFR part 401) for maintaining records of individuals, as well as provide specific safeguards surrounding beneficiary information sharing, paper/computer records/data, and other issues potentially arising from providing work incentives planning and assistance services to SSDI and SSI beneficiaries with disabilities. Beneficiary data should be accessible only to project personnel via locked file cabinets, computer password protections, etc. VII. Agency Contacts Send questions about this announcement to the following Internet e-mail addresses: *Jenny.Deboy@ssa.gov* or *Barbara.Jones@ssa.gov* . When sending in a question, reference program announcement number SSA- OESP-07-1 and the date of this announcement. For information regarding the application submission process, you may also contact: Phyllis Y. Smith or Gary Stammer, Grants Management Team, Office of Acquisition and Grants, Social Security Administration, 1st Floor—Rear Entrance, 7111 Security Blvd., Baltimore, MD 21244. The telephone numbers are: Phyllis Y. Smith,
(410)965-9518, or Gary Stammer,
(410)965-9501. The fax number is
(410)966-9310. VIII. Other Information Process Evaluation SSA plans to conduct a formal independent process evaluation of the WIPA Program, as well as individual projects, beginning in FY2007 to further assess the overall efficacy of the program in terms of assisting beneficiaries with disabilities return to work. The purpose of a process evaluation is for SSA and the awardees to assess how the WIPA Program functions and how the process
(es)might be improved to provide more efficient and effective work incentives services, as required under section 1149 of the Act. The process evaluation will require both data collection and qualitative observational evaluation through site visits and/or project reporting. Participant Experience The goal of these cooperative agreements is the provision of services to enhance beneficiary awareness and understanding of SSA work incentives and thereby enhance a beneficiaries' ability to make informed choices regarding work. The goal is not to provide employment services, however employment is ultimately the key for many beneficiaries with disabilities in terms of gaining greater self-sufficiency. Projects shall submit periodic reports to SSA, OAG. Data and information that are used in preparing the reports can be used, for example, to improve the efficiency of the project's operations, use of staff, and linkages between the project and the programs for which work incentives planning is needed to better meet the needs of target populations. In addition, the evaluation results will be disseminated to other projects to promote learning, program refinements, and facilitate partnership and achievement of project objectives. Timely comprehensive MI data also allows for cost accounting, which helps improve the efficiency of service approaches and may inform future policy decisions. Paperwork Reduction Act This notice contains reporting requirements. The information is collected by the *Grants.gov* Apply facility. However, in rare circumstances, the information may be collected using form SSA-96-BK, Federal Assistance Application, which has the Office of Management and Budget clearance number 0960-0184. Dated: October 10, 2006. Martin H. Gerry, Deputy Commissioner for Disability and Income Security Programs. [FR Doc. E6-17283 Filed 10-16-06; 8:45 am] BILLING CODE 4191-02-P SOCIAL SECURITY ADMINISTRATION [Docket No. SSA-2006-0077] Work Incentives Planning and Assistance
(WIPA)Program Pre-Application Teleconference Seminars AGENCY: Social Security Administration (SSA). ACTION: Notice of Teleconferences. DATES: October 26, 2006 *Time:* 1 p.m. (Eastern Time) duration two hours. *Call-in telephone number:* (toll free) 877-922-4780. *Pass code:* WIPA. *Leader:* Debbie Morrison. October 27, 2006 *Time:* 4 p.m. (Eastern Time) duration two hours. *Call-in telephone number:* (toll free) 877-922-4780. *Pass code:* WIPA. *Leader:* Debbie Morrison. SUPPLEMENTARY INFORMATION: *Type of meeting:* Informational pre-application teleconference seminars open to all potential applicants for the Work Incentives Planning and Assistance
(WIPA)Program (formerly the Benefits Planning, Assistance and Outreach
(BPAO)Program). *Purpose:* SSA will hold informational pre-application teleconference seminars to solicit interest and encourage community-based organizations to apply for cooperative agreement awards. All interested applicants are invited to attend this call. Section 1149(d) of the Social Security Act (as added by Section 121 of the Ticket to Work and Work Incentives Improvement Act of 1999, Public Law 106-170) required SSA to establish community based benefits planning and assistance in every State, the District of Columbia, Puerto Rico, Guam, the Northern Mariana Islands, American Samoa, and the Virgin Islands. As authorized by Ticket to Work and Work Incentives Improvement Act, SSA established a program of cooperative agreements (monetary awards) granted to community-based organizations. These programs were formerly called the Benefit Planning and Assistance programs (BPAO). The new name for this program is the Work Incentive Planning and Assistance
(WIPA)Projects. The WIPA program is to provide all of SSA's beneficiaries with disabilities access to work incentives planning and assistance services. Section 407 of the Social Security Protection Act (Pub. L. 108-203) extended the authorization of this program through Fiscal Year 2009. SSA released a competitive Request for Applications in May 2006 but did not receive sufficient qualifying proposals to provide full national coverage. In October 2006 SSA released a competitive Request for Applications to announce funding availability for new cooperative agreements awards for the Work Incentives Planning and Assistance
(WIPA)Program, for these specific areas: *State of Alabama,* the counties of Autauga, Baldwin, Barbour, Bullock, Butler, Choctaw, Clarke, Coffee, Conecuh, Covington, Crenshaw, Dale, Dallas, Elmore, Escambia, Geneva, Henry, Houston, Lee, Lowndes, Macon, Marengo, Mobile, Monroe, Montgomery, Pike, Russell, Washington, and Wilcox; *State of Indiana,* the counties of Clark, Crawford, Davies, Dearborn, Dubois, Floyd, Gibson, Grant, Greene, Harrison, Hendricks, Jackson, Jefferson, Jennings, Knox, Lawrence, Martin, Monroe, Ohio, Orange, Parke, Perry, Pike, Posey, Ripley, Scott, Spencer, Sullivan, Switzerland, Vanderburgh, Vermillion, Vigo, Warrick, Washington, and White; *State of Kentucky,* the counties of Bath, Bell, Bourbon, Boyd, Bracken, Breathitt, Carter, Clark, Clay, Elliott, Estill, Fleming, Floyd, Garrard, Greenup, Harlan, Harrison, Jackson, Johnson, Knott, Knox, Laurel, Lawrence, Lee, Leslie, Letcher, Lewis, Madison, Magoffin, Martin, Mason, McCreary, Menifee, Montgomery, Morgan, Nicholas, Owsley, Pendleton, Perry, Pike, Powell, Robertson, Rockcastle, Rowan, Whitley, and Wolfe; *State of Nevada,* all counties; *State of New York,* the counties of Albany, Columbia, Dutchess, Greene, Orange, Putnam, Rockland, Ulster, and Westchester; *State of Ohio,* the counties of Ashtabula, Mahoning, Portage, Stark, Summit, and Trumbull; *Pacific territories of Guam, the Northern Mariana Islands, and American Samoa* to be effective in calendar year 2007. The schedule (including date, time and call-in number of each pre-application seminar as it becomes available) will also be posted at the following Internet site: *http://www.socialsecurity.gov/work.* *Agenda:* SSA will use the seminars to provide guidance and technical assistance to interested parties as they prepare to submit their applications. There will be a presentation of information followed by an operator-assisted question and answer period. The agenda will be posted on the Internet at *http://www.socialsecurity.gov/work* one week before commencement of the seminars. The agenda can also be requested electronically or by fax upon request. *Contact Information:* Anyone requiring additional information should contact SSA Project Officer, Debbie Morrison by calling
(410)965-9054, or • Mail addressed to Social Security Administration, 6401 Security Blvd., Room 107 Altmeyer Building, Baltimore, MD 21235. • Fax at
(410)966-1278. • E-mail to *debbie.morrison@ssa.gov.* Dated: October 10, 2006. Martin H. Gerry, Deputy Commissioner for, Disability and Income Security Program. [FR Doc. 06-8730 Filed 10-16-06; 8:45 am]
Connectionstraces to 12
9 references not yet in our index
  • 10 CFR 50
  • 10 CFR 20
  • Pub. L. 104-13
  • 5 CFR 890.701
  • 17 CFR 240.19
  • 15 USC 78
  • Pub. L. 108-203
  • Pub. L. 106-170
  • 20 CFR 401
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U.S.C.§ 8902
U.S.C.§ 78s
U.S.C.§ 78f
U.S.C.§ 552
C.F.R.§ 200.30-3
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Cite10 CFR 20
Pub. L.Pub. L. 104-13
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