Tap any paragraph to write a margin note. Your notes collect in the Desk below the text and file under cases with @. The side-by-side margin rail opens on a larger screen.

§
Marginalia
Code · REGISTER · 2007-02-27 · NUCLEAR REGULATORY COMMISSION · Notices

Notices. Notice

63,215 words·~287 min read·/register/2007/02/27/07-779

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Biweekly Notice; Applications and Amendments to Facility Operating Licenses Involving No Significant Hazards Considerations I. Background Pursuant to section 189a.
(2)of the Atomic Energy Act of 1954, as amended (the Act), the U.S. Nuclear Regulatory Commission (the Commission or NRC staff) is publishing this regular biweekly notice. The Act requires the Commission publish notice of any amendments issued, or proposed to be issued and grants the Commission the authority to issue and make immediately effective any amendment to an operating license upon a determination by the Commission that such amendment involves no significant hazards consideration, notwithstanding the pendency before the Commission of a request for a hearing from any person. This biweekly notice includes all notices of amendments issued, or proposed to be issued from February 2, 2007 through February 14, 2007. The last biweekly notice was published on February 13, 2007 (72 FR 6780). Notice of Consideration of Issuance of Amendments to Facility Operating Licenses, Proposed No Significant Hazards Consideration Determination, and Opportunity for a Hearing The Commission has made a proposed determination that the following amendment requests involve no significant hazards consideration. Under the Commission's regulations in 10 CFR 50.92, this means that operation of the facility in accordance with the proposed amendment would not
(1)Involve a significant increase in the probability or consequences of an accident previously evaluated; or
(2)create the possibility of a new or different kind of accident from any accident previously evaluated; or
(3)involve a significant reduction in a margin of safety. The basis for this proposed determination for each amendment request is shown below. The Commission is seeking public comments on this proposed determination. Any comments received within 30 days after the date of publication of this notice will be considered in making any final determination. Within 60 days after the date of publication of this notice, the licensee may file a request for a hearing with respect to issuance of the amendment to the subject facility operating license and any person whose interest may be affected by this proceeding and who wishes to participate as a party in the proceeding must file a written request for a hearing and a petition for leave to intervene. Normally, the Commission will not issue the amendment until the expiration of 60 days after the date of publication of this notice. The Commission may issue the license amendment before expiration of the 60-day period provided that its final determination is that the amendment involves no significant hazards consideration. In addition, the Commission may issue the amendment prior to the expiration of the 30-day comment period should circumstances change during the 30-day comment period such that failure to act in a timely way would result, for example in derating or shutdown of the facility. Should the Commission take action prior to the expiration of either the comment period or the notice period, it will publish in the **Federal Register** a notice of issuance. Should the Commission make a final No Significant Hazards Consideration Determination, any hearing will take place after issuance. The Commission expects that the need to take this action will occur very infrequently. Written comments may be submitted by mail to the Chief, Rulemaking, Directives and Editing Branch, Division of Administrative Services, Office of Administration, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and should cite the publication date and page number of this **Federal Register** notice. Written comments may also be delivered to Room 6D22, Two White Flint North, 11545 Rockville Pike, Rockville, Maryland, from 7:30 a.m. to 4:15 p.m. Federal workdays. Copies of written comments received may be examined at the Commission's Public Document Room (PDR), located at One White Flint North, Public File Area O1F21, 11555 Rockville Pike (first floor), Rockville, Maryland. The filing of requests for a hearing and petitions for leave to intervene is discussed below. Within 60 days after the date of publication of this notice, the licensee may file a request for a hearing with respect to issuance of the amendment to the subject facility operating license and any person whose interest may be affected by this proceeding and who wishes to participate as a party in the proceeding must file a written request for a hearing and a petition for leave to intervene. Requests for a hearing and a petition for leave to intervene shall be filed in accordance with the Commission's “Rules of Practice for Domestic Licensing Proceedings” in 10 CFR Part 2. Interested persons should consult a current copy of 10 CFR 2.309, which is available at the Commission's PDR, located at One White Flint North, Public File Area 01F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible from the Agencywide Documents Access and Management System's (ADAMS) Public Electronic Reading Room on the Internet at the NRC Web site, *http://www.nrc.gov/reading-rm/doc-collections/cfr/.* If a request for a hearing or petition for leave to intervene is filed within 60 days, the Commission or a presiding officer designated by the Commission or by the Chief Administrative Judge of the Atomic Safety and Licensing Board Panel, will rule on the request and/or petition; and the Secretary or the Chief Administrative Judge of the Atomic Safety and Licensing Board will issue a notice of a hearing or an appropriate order. As required by 10 CFR 2.309, a petition for leave to intervene shall set forth with particularity the interest of the petitioner in the proceeding, and how that interest may be affected by the results of the proceeding. The petition should specifically explain the reasons why intervention should be permitted with particular reference to the following general requirements:
(1)The name, address, and telephone number of the requestor or petitioner;
(2)the nature of the requestor's/petitioner's right under the Act to be made a party to the proceeding;
(3)the nature and extent of the requestor's/petitioner's property, financial, or other interest in the proceeding; and
(4)the possible effect of any decision or order which may be entered in the proceeding on the requestor's/petitioner's interest. The petition must also set forth the specific contentions which the petitioner/requestor seeks to have litigated at the proceeding. Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted. In addition, the petitioner/requestor shall provide a brief explanation of the bases for the contention and a concise statement of the alleged facts or expert opinion which support the contention and on which the petitioner/requestor intends to rely in proving the contention at the hearing. The petitioner/requestor must also provide references to those specific sources and documents of which the petitioner is aware and on which the petitioner/requestor intends to rely to establish those facts or expert opinion. The petition must include sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. Contentions shall be limited to matters within the scope of the amendment under consideration. The contention must be one which, if proven, would entitle the petitioner/requestor to relief. A petitioner/requestor who fails to satisfy these requirements with respect to at least one contention will not be permitted to participate as a party. Those permitted to intervene become parties to the proceeding, subject to any limitations in the order granting leave to intervene, and have the opportunity to participate fully in the conduct of the hearing. If a hearing is requested, and the Commission has not made a final determination on the issue of no significant hazards consideration, the Commission will make a final determination on the issue of no significant hazards consideration. The final determination will serve to decide when the hearing is held. If the final determination is that the amendment request involves no significant hazards consideration, the Commission may issue the amendment and make it immediately effective, notwithstanding the request for a hearing. Any hearing held would take place after issuance of the amendment. If the final determination is that the amendment request involves a significant hazards consideration, any hearing held would take place before the issuance of any amendment. A request for a hearing or a petition for leave to intervene must be filed by:
(1)First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff;
(2)courier, express mail, and expedited delivery services: Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, Maryland, 20852, Attention: Rulemaking and Adjudications Staff;
(3)E-mail addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, *HearingDocket@nrc.gov;* or
(4)facsimile transmission addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC, Attention: Rulemakings and Adjudications Staff at
(301)415-1101, verification number is
(301)415-1966. A copy of the request for hearing and petition for leave to intervene should also be sent to the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and it is requested that copies be transmitted either by means of facsimile transmission to
(301)415-3725 or by e-mail to *OGCMailCenter@nrc.gov.* A copy of the request for hearing and petition for leave to intervene should also be sent to the attorney for the licensee. Nontimely requests and/or petitions and contentions will not be entertained absent a determination by the Commission or the presiding officer of the Atomic Safety and Licensing Board that the petition, request and/or the contentions should be granted based on a balancing of the factors specified in 10 CFR 2.309(a)(1)(i)-(viii). For further details with respect to this action, see the application for amendment which is available for public inspection at the Commission's PDR, located at One White Flint North, Public File Area 01F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible from the ADAMS Public Electronic Reading Room on the Internet at the NRC Web site, *http://www.nrc.gov/reading-rm/adams.html.* If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the PDR Reference staff at 1
(800)397-4209,
(301)415-4737 or by e-mail to *pdr@nrc.gov.* Carolina Power & Light Company, et al., Docket No. 50-400, Shearon Harris Nuclear Power Plant, Unit 1, Wake and Chatham Counties, North Carolina *Date of amendment request:* August 2, 2006. *Description of amendment request:* The proposed amendment will modify the statistical summation error term “Z” and one of the allowable values for certain steam generator water level trip setpoints used in the Reactor Trip System and Engineered Safety Feature Actuation System instrumentation. *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: 1. Does the proposed change involve a significant increase in the probability or consequences of an accident previously evaluated? Response: No. The proposed change to revise the statistical summation error term “Z” and one of the allowable values for certain steam generator water level
(SGWL)reactor protection and engineered safety feature actuation functions continues to follow the current setpoint methodology previously approved for HNP [Shearon Harris Nuclear Power Plant, Unit 1] while addressing newly identified level uncertainty considerations. The proposed change does not alter the installed plant configuration for the affected instrumentation or the associated equipment system interfaces. The proposed change continues to maintain the assumptions for the specified instrument loops used in the Final Safety Analysis Report
(FSAR)for HNP, and the channel statistical allowances
(CSA)or calculated total loop uncertainties remain bounded by the total allowance
(TA)values presented in the HNP Technical Specifications (TS). The proposed change does not alter the accident analyses or the causes for any accident described in the FSAR that credit the SGWL setpoint actuations. The proposed amendment will not modify, degrade, prevent actions or alter any assumptions previously made in evaluating the radiological consequences of an accident described in the FSAR. Therefore, this amendment does not involve a significant increase in the probability or consequences of an accident previously evaluated. 2. Does the proposed change create the possibility of a new or different kind of accident from any accident previously evaluated? Response: No. The proposed change to revise the statistical summation error term “Z” and one of the allowable values for certain SGWL reactor protection and engineered safety feature actuation functions addresses newly identified level uncertainty considerations. The proposed change does not implement any physical changes to the systems, structures, or components for the affected instrumentation loops or to the associated equipment system interfaces. No new or different accident initiators or sequences are created by the proposed change. The proposed change continues to maintain the safety analysis limits used in the safety analyses that credit the specified actuation functions. Therefore, this amendment does not create the possibility of a new or different kind of accident from any accident previously evaluated. 3. Does the proposed change involve a significant reduction in a margin of safety? Response: No. The proposed change to revise the statistical summation error term “Z” and one of the allowable values for certain SGWL reactor protection and engineered safety feature actuation functions addresses newly identified level uncertainty considerations and does not involve a reduction in the margin of safety for plant operation. Consistent with the requirements of the HNP FSAR, the proposed change has been evaluated to ensure that the assumptions for the specified instrument loops used in the FSAR continue to be maintained and that the CSA or calculated total loop uncertainties remain bounded by the TA values presented in the HNP TS. The proposed change continues to follow the current setpoint methodology previously approved for HNP, and the revised uncertainty analysis results in acceptable calculational margin. Therefore, this amendment does not involve a significant reduction in a margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* David T. Conley, Associate General Counsel II—Legal Department, Progress Energy Service Company, LLC, Post Office Box 1551, Raleigh, North Carolina 27602. *NRC Acting Branch Chief:* Margaret H. Chernoff. Carolina Power & Light Company, *et al.* , Docket No. 50-400, Shearon Harris Nuclear Power Plant, Unit 1, Wake and Chatham Counties, North Carolina *Date of amendment request:* December 20, 2006. *Description of amendment request:* The amendment will revise Technical Specification
(TS)6.12 “High Radiation Area.” Specifically, the proposed amendment would align the requirements with the revised 10 CFR 20 as described in Regulatory Guide 8.38, Revision 1, “Control of Access to High and Very High Radiation Areas in Nuclear Power Plants.” *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: 1. Does the proposed change involve a significant increase in the probability or consequences of an accident previously evaluated? Response: No. The changes are administrative and affect personnel access control requirements for high radiation areas. The changes do not affect the operation, physical configuration, or function of plant equipment or systems. The changes do not impact the initiators or assumptions of analyzed events; nor do they impact the mitigation of accidents or transient events. Therefore, these changes do not increase the probability or consequences of an accident previously evaluated. 2. Does the proposed change create the possibility of a new of [or] different kind of accident from any accident previously evaluated? Response: No. The changes are administrative and affect personnel access control requirements for high radiation areas. The changes do not alter plant configuration, require installation of new equipment, alter assumptions about previously analyzed accidents, or impact the operation or function of plant equipment or systems. Therefore, these changes will not create the possibility of a new or different kind of accident from any accident previously evaluated. 3. Does the proposed change involve a significant reduction in a margin of safety? Response: No. The changes are administrative and affect personnel access control requirements for high radiation areas. The changes do not impact any safety assumptions; nor do the changes have the potential to reduce any margin of safety as described in the HNP [Shearon Harris Nuclear Power Plant, Unit 1] TS Bases. The proposed changes maintain an equivalent level of protection for radiation workers and, thereby, provide reasonable assurance that individuals will not exceed regulatory dose limits. The proposed changes are consistent with:
(1)The guidance of Regulatory Guide
(RG)8.38, “Control of Access to High and Very High Radiation Areas in Nuclear Power Plants,” Section C, Regulatory Position 2.4, Alternative Methods for Access Control, with the exception that “should” has been changed to “shall”; and
(2)other nuclear plants' existing TSs such as those at Brunswick Steam Electric Plant Units 1 & 2. Based on this evaluation, the proposed change does not involve a significant reduction in a margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* David T. Conley, Associate General Counsel II—Legal Department, Progress Energy Service Company, LLC, Post Office Box 1551, Raleigh, North Carolina 27602. *NRC Acting Branch Chief:* Margaret H. Chernoff. Duke Power Company LLC, Docket Nos. 50-269, 50-270, and 50-287, Oconee Nuclear Station, Units 1, 2, and 3, Oconee County, South Carolina *Date of amendment request:* January 4, 2007. *Description of amendment request:* The proposed amendments would remove gaseous radioactivity monitoring from the Technical Specifications
(TSs)as an acceptable option for reactor coolant leakage detection. *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: Pursuant to 10 CFR 50.91, Duke has made the determination that this amendment request does not involve a significant hazards consideration by applying the standards established by the NRC regulations in 10 CFR 50.92. This ensures that operation of the facility in accordance with the proposed amendment would not:
(1)Involve a significant increase in the probability or consequences of an accident previously evaluated. The removal of the gaseous containment atmosphere radioactivity monitor from [the] TS as an acceptable alternative to the particulate containment atmosphere radioactivity monitor will not reduce the number of operable leak detection channels which the Technical Specification LCO [limiting condition for operation] currently provides. The gaseous monitor which is being removed from [the] Technical Specifications is the least sensitive and has the highest response time of the three available leakage monitors currently in the Technical Specification. The remaining particulate radioactivity monitor will provide greater leak detection capability by comparison. Therefore, removal of the gaseous radioactivity monitor from the Technical Specification LCO cannot increase the probability or consequence of an accident.
(2)Create the possibility of a new or different kind of accident from any accident previously evaluated. RCS [reactor coolant system] leakage detection instrumentation functions to provide control room operators with information which is indicative of a degraded RCS pressure boundary. Removal of RIA 49 from [the] TS will, in effect, remove the “weakest link” in the leakage detection system requirements of the LCO. It is important to note that RIA 49 will remain available. The change only removes it from the LCO, not from the plant. So, the result will be an enhanced capability for detecting RCS leakage in a timely manner. This enhancement, although small, could enable the operator to identify a precursor to a LOCA [loss-of-coolant accident] and take actions to safely shutdown the plant for repairs prior to actually experiencing a significant transient (LOCA). While the leakage detection system cannot prevent all LOCAs, these are accidents which have been evaluated in the UFSAR [updated final safety analysis report]. In no case would this enhancement be capable of creating a new or different kind of accident than previously evaluated.
(3)Involve a significant reduction in a margin of safety. The proposed change does not reduce the number of instrument channels required by the LCO for the leakage detection system. The LCO will still ensure that both a normal sump level instrument and a containment atmosphere radioactivity instrument are operable as before. It only removes one available option for satisfying the requirement for a containment atmosphere radioactivity monitor. The remaining containment atmosphere radioactivity monitor has greater sensitivity and faster response time than the monitor that is being removed from the Technical Specification. No other plant equipment is affected by the proposed change. Thus, there is no adverse impact on the capability to detect an RCS leak. Therefore, the proposed change does not involve a significant reduction in a margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* Ms. Lisa F. Vaughn, Associate General Counsel and Managing Attorney, Duke Energy Carolinas, LLC, 526 South Church Street, EC07H, Charlotte, NC 28202. *NRC Branch Chief:* Evangelos C. Marinos. Energy Northwest, Docket No. 50-397, Columbia Generating Station, Benton County, Washington *Date of amendment request:* May 31, 2005, as supplemented by letters dated February 8, 2006, and January 5, 2007. *Description of amendment request:* The proposed amendment modifies Technical Specification
(TS)Sections 3.8.1, “AC [Alternating Current] Sources—Operating,” 3.8.4, “DC [Direct Current] Sources—Operating,” 3.8.5, “DC Sources—Shutdown,” 3.8.6, “Battery Cell Parameters,” and 5.5, “Programs and Manuals.” The proposed change incorporates clarifying requirements in surveillance testing of diesel generators and new actions for an inoperable battery charger. The proposed change includes a revision to the Administrative Program to be consistent with Institute of Electrical and Electronics Engineers Standard 450-2002, and changes consistent with TS Task Force
(TSTF)Traveler TSTF-360, Revision 1, “DC Electrical Rewrite,” and TSTF-283, Revision 3, “Modify Section 3.8 Mode Restriction Notes.” *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: 1. Does the proposed change involve a significant increase in the probability or consequences of an accident previously evaluated? Response: No. The emergency diesel generators
(DGs)and their associated emergency loads are accident-mitigating features. As such, testing of the DGs themselves is not associated with any potential accident initiating mechanism. Each DG is dedicated to a specific vital bus and these buses and DGs are independent of each other. There is no common mode failure provided by the testing changes proposed in this license amendment request
(LAR)that would cause multiple bus failures. Therefore, there will be no significant impact on any accident probabilities by the approval of the requested amendment. SR [surveillance requirement] changes that are consistent with Industry/Technical Specification Task Force
(TSTF)Standard Technical Specification
(STS)change TSTF-283, Revision 3 have been approved by the NRC and the online tests allowed by the TSTF are only to be performed for the purpose of establishing operability. Performance of these SRs during normally restricted modes will require an assessment to assure plant safety is maintained or enhanced. The proposed changes restructure the TS for the direct current
(DC)electrical power system, consistent with TSTF-360, Revision 1. The proposed changes add actions to specifically address battery and battery charger inoperability. The DC electrical power system, including associated battery chargers, is not an initiator of any accident sequence analyzed in the Final Safety Analysis Report (FSAR). Operation in accordance with the proposed TS ensures that the DC electrical power system is capable of performing its function as described in the FSAR. Therefore, the mitigating functions supported by the DC electrical power system will continue to provide the protection assumed by the analysis. The relocation of preventive maintenance surveillances, and certain operating limits and actions, to a newly-created licensee-controlled Battery Monitoring and Maintenance Program will not challenge the ability of the DC electrical power system to perform its design function. Appropriate monitoring and maintenance, consistent with industry standards, will continue to be performed. In addition, the DC electrical power system is within the scope of 10 CFR 50.65, “Requirements for monitoring the effectiveness of maintenance at nuclear power plants,” which will ensure the control of maintenance activities associated with the DC electrical power system. The integrity of fission product barriers, plant configuration, and operating procedures as described in the FSAR will not be affected by the proposed changes. Therefore, the consequences of previously analyzed accidents will not increase by implementing these changes. Therefore, the proposed changes do not involve a significant increase in the probability or consequences of an accident previously evaluated. 2. Does the proposed change create the possibility of a new or different kind of accident from any accident previously evaluated? Response: No. The proposed changes involve restructuring the TS for the DC electrical power system. The DC electrical power system, including associated battery chargers, is not an initiator to any accident sequence analyzed in the FSAR. Rather, the DC electrical power system is used to supply equipment used to mitigate an accident. The proposed change would create no new accidents since no changes are being made to the plant that would introduce any new accident causal mechanisms. Diesel Generators will be operated in the same configuration currently allowed by other DG SRs that allow testing in plant Modes 1 and 2 and 3. This license amendment request does not impact any plant systems that are accident initiators or adversely impact any accident mitigating systems. Therefore, the proposed changes do not create the possibility of a new or different kind of accident from any previously evaluated. 3. Does the proposed change involve a significant reduction in a margin of safety? Response: No. The proposed change does not involve a significant reduction in the margin of safety. The margin of safety is related to the ability of the fission product barriers to perform their design functions during and following an accident situation. These barriers include the fuel cladding, the reactor coolant system, and the containment system. The proposed changes to the testing requirements for the plant DGs do not affect the operability requirements for the DGs, as verification of such operability will continue to be performed as required. Continued verification of operability supports the capability of the DGs to perform their required function of providing emergency power to plant equipment that supports or constitutes the fission product barriers. Consequently, the performance of these fission product barriers will not be impacted by implementation of this proposed amendment. In addition, the margin of safety is established through equipment design, operating parameters, and the setpoints at which automatic actions are initiated. The proposed changes will not adversely affect operation of plant equipment. These changes will not result in a change to the setpoints at which protective actions are initiated. Sufficient AC and DC capacity to support operation of mitigation equipment is ensured. The changes associated with the new battery maintenance and monitoring program will ensure that the station batteries are maintained in a highly reliable manner. The equipment fed by the DC electrical sources will continue to provide adequate power to safety related loads in accordance with analysis assumptions. Therefore, the proposed changes do not involve a significant reduction in a margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* William A. Horin, Esq., Winston & Strawn, 1700 K Street, NW., Washington, DC 20006-3817. *NRC Branch Chief:* David Terao. Nuclear Management Company, LLC, Docket No. 50-255, Palisades Plant, Van Buren County, Michigan *Date of amendment request:* September 25, 2006. *Description of amendment request:* The proposed amendment would revise the Palisades Nuclear Plant
(PNP)licensing bases to adopt the alternative source term
(AST)as described in Title 10 of the Code of Federal Regulations
(CFR)Section 50.67 following the guidance provided in Regulatory Guide
(RG)1.183. This application includes an amendment to the Technical Specifications, Definition 1.1, Dose Equivalent I-131. *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: 1. The proposed amendment does not involve a significant increase in the probability or consequences of an accident previously evaluated. Response: No. Alternative source term calculations have been performed for PNP that demonstrate the dose consequences remain below limits specified in NRC Regulatory Guide 1.183 and 10 CFR 50.67. The proposed change does not modify the design or operation of the plant. The use of an AST changes only the regulatory assumptions regarding the analytical treatment of the design basis accidents and has no direct effect on the probability of any accident. The AST has been utilized in the analysis of the limiting design basis accidents listed above [Loss-of-Coolant Accident, Main Steam Line Break, Steam Generator Tube Rupture, Small Line Break Outside Containment, Control Rod Ejection, Fuel Handling Accident, and Spent Fuel Cask Drop]. The results of the analyses, which include the proposed changes to the Technical Specifications, demonstrate that the dose consequences of these limiting events are all within the regulatory limits. Therefore, the proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated. 2. The proposed amendment does not create the possibility of a new or different kind of accident from any accident previously evaluated. Response: No. The proposed change does not affect any plant structures, systems, or components. The proposed operation of plant systems and equipment affected by this change does not create the possibility of a new or different kind of accident previously evaluated. The proposed modifications and post-modification testing are intended to enhance the capability of the plant to comply with the revised post accident dose results presented in this submittal. Since the alternative source term is a revised methodology used to estimate resulting accident doses, it is not an accident initiator. Therefore, the proposed change does not create the possibility of a new or different kind of accident from any accident previously evaluated. 3. The proposed amendment does not involve a significant reduction in the margin of safety. Response: No. The proposed implementation of the alternative source term methodology is consistent with NRC Regulatory Guide 1.183. Conservative methodologies, per the guidance of RG 1.183, have been used in performing the accident analyses. The radiological consequences of these accidents are all within the regulatory acceptance criteria associated with use of the alternative source term methodology. The proposed changes continue to ensure that the doses at the exclusion area and low population zone boundaries and in the control room are within the corresponding regulatory limits of RG 1.183 and 10 CFR 50.67. The margin of safety for the radiological consequences of these accidents is considered to be that provided by meeting the applicable regulatory limits, which are set at or below the 10 CFR 50.67 limits. An acceptable margin of safety is inherent in these limits. Therefore, the proposed change does not involve a significant reduction in the margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* Jonathan Rogoff, Esquire, Vice President, Counsel & Secretary, Nuclear Management Company, LLC, 700 First Street, Hudson, WI 54016. *NRC Acting Branch Chief:* Patrick D. Milano. Nuclear Management Company, LLC, Docket Nos. 50-282 and 50-306, Prairie Island Nuclear Generating Plant, Units 1 and 2, Goodhue County, Minnesota *Date of amendment request:* December 14, 2006. *Description of amendment request:* The proposed amendments would revise the reference to “trash racks and screens” in Technical Specification
(TS)3.5.2, “ECCS [Emergency Core Cooling System]—Operating”, Surveillance Requirement
(SR)3.5.2.8 and revise the required Refueling Water Storage Tank
(RWST)level in TS 3.5.4, “Refueling Water Storage Tank (RWST).” This License Amendment Request
(LAR)fulfills the commitment made in the supplement to Nuclear Management Company Response to Generic Letter 2004-02, “Potential Impact of Debris Blockage on Emergency Recirculation During Design Basis Accidents at Pressurized-Water Reactors,” to submit an LAR to revise SR 3.5.2.8 by December 31, 2006. *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: 1. Do the proposed changes involve a significant increase in the probability or consequences of an accident previously evaluated? Response: No. This license amendment request proposes to revise the Technical Specifications by changing the containment sump inlet debris interceptor description in Surveillance Requirement 3.5.2.8 and increasing the Refueling Water Storage Tank level in Surveillance Requirement 3.5.4.1 to 265,000 gallons which corresponds to approximately 90% indicated instrumentation level. These changes support resolution of containment sump blockage issues raised in Nuclear Regulatory Commission Bulletin 2003-01, “Potential Impact Of Debris Blockage On Emergency Sump Recirculation At Pressurized-Water Reactors” and Generic Letter 2004-02, “Potential Impact Of Debris Blockage On Emergency Recirculation During Design Basis Accidents At Pressurized-Water Reactors.” The containment sump inlet debris interceptor is a plant design feature which mitigates accidents and does not initiate accidents. Therefore, the proposed change does not involve a significant increase in the probability of an accident. The new sump strainers for use as debris interceptors have been evaluated to withstand the applicable post accident loads without trash racks and thus the description change in Surveillance Requirement 3.5.2.8 does not involve a significant increase in the consequences of an accident previously evaluated. The Refueling Water Storage Tank is required for accident mitigation and is not an accident initiator, thus requiring additional water volume in the tank does not involve a significant increase in the probability of an accident previously evaluated. Since the proposed change increases the water volume in the Refueling Water Storage Tank available for accident mitigation, this change may decrease the consequences of an accident. Thus, the changes proposed in this license amendment request do not involve a significant increase in the probability or consequences of an accident previously evaluated. 2. Do the proposed changes create the possibility of a new or different kind of accident from any accident previously evaluated? Response: No. This license amendment request proposes to revise the Technical Specifications by changing the containment sump inlet debris interceptor description in Surveillance Requirement 3.5.2.8 and increasing the Refueling Water Storage Tank level in Surveillance Requirement 3.5.4.1 to 265,000 gallons which corresponds to approximately 90% indicated instrumentation level. These changes support resolution of containment sump blockage issues raised in Nuclear Regulatory Commission Bulletin 2003-01, “Potential Impact Of Debris Blockage On Emergency Sump Recirculation At Pressurized-Water Reactors” and Generic Letter 2004-02, “Potential Impact Of Debris Blockage On Emergency Recirculation During Design Basis Accidents At Pressurized-Water Reactors.” The proposed Technical Specification containment sump suction inlet debris interceptor description revision does not create the possibility of a new or different kind of accident. There are no new failure modes or mechanisms created by the new strainers and there are no new accident precursors generated due to this change. The new strainers do not change the way in which the plant is operated. The proposed Technical Specification Refueling Water Storage Tank level increase does not involve a change in system operation or the use of the Refueling Water Storage Tank. It does increase the quantity of water in the Refueling Water Storage Tank available for accident mitigation. There are no new failure modes or mechanisms created by the availability or use of an additional water volume in the Refueling Water Storage Tank as proposed by this Technical Specification change. There are no new accident precursors generated with the storage of additional water in the Refueling Water Storage Tank. Therefore, the proposed changes do not create the possibility of a new or different kind of accident from any previously evaluated. 3. Do the proposed changes involve a significant reduction in a margin of safety? Response: No. This license amendment request proposes to revise the Technical Specifications by changing the containment sump inlet debris interceptor description in Surveillance Requirement 3.5.2.8 and increasing the Refueling Water Storage Tank level in Surveillance Requirement 3.5.4.1 to 265,000 gallons which corresponds to approximately 90% indicated instrumentation level. These changes support resolution of containment sump blockage issues raised in Nuclear Regulatory Commission Bulletin 2003-01, “Potential Impact Of Debris Blockage On Emergency Sump Recirculation At Pressurized-Water Reactors” and Generic Letter 2004-02, “Potential Impact Of Debris Blockage On Emergency Recirculation During Design Basis Accidents At Pressurized-Water Reactors.” The proposed Technical Specification containment sump debris interceptor description revision does not involve a significant reduction in a margin of safety. The new sump strainers for use as debris interceptors have been evaluated to withstand the applicable post accident loads without trash racks and thus do not involve a significant reduction in a margin of safety. The new strainers provide additional debris interceptor flow area to the sump and thus may improve plant margins of safety. The proposed change will increase the required water volume to be stored in the Refueling Water Storage Tank which means additional water will be available to mitigate accidents. This change does not involve a decrease in the margin of safety, but may involve an increase in the margin of safety. Therefore, the proposed changes do not involve a significant reduction in a margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment requests involve no significant hazards consideration. *Attorney for licensee:* Jonathan Rogoff, Esquire, Vice President, Counsel & Secretary, Nuclear Management Company, LLC, 700 First Street, Hudson, WI 54016. *NRC Acting Branch Chief:* P. Milano. TXU Generation Company LP, Docket Nos. 50-445 and 50-446, Comanche Peak Steam Electric Station, Units 1 and 2, Somervell County, Texas *Date of amendment request:* February 21, 2006. *Brief description of amendments:* The amendments revise the Technical Specification
(TS)1.1, “Definitions,” and TS 3.4.16, “RCS [Reactor Coolant System] Specific Activity,” by removing the current TS 3.4.16 limits on RCS gross-specific activity with a new dose equivalent XE-133 definition that would replace the current E-bar average disintegration energy definition. In addition, the current dose equivalent I-131 definition would be revised to allow the use of alternate, NRC-approved thyroid dose conversion factors. *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: 1. Do the proposed changes involve a significant increase in the probability or consequences of an accident previously evaluated? Response: No. The proposed changes to add new thyroid dose conversion factor reference[s] to the definition of DOSE EQUIVALENT I-131, eliminate the definition of E —AVERAGE DISINTEGRATION ENERGY, add a new definition of DOSE EQUIVALENT XE-133, replace the Technical Specification
(TS)3.4.16 limit on reactor coolant system
(RCS)gross specific activity with a limit on noble gas specific activity in the form of a Limiting Condition for Operation
(LCO)on DOSE EQUIVALENT XE-133, replace TS Figure 3.4.16-1 with a maximum limit on DOSE EQUIVALENT I-131, extend the Applicability of LCO 3.4.16, and make corresponding changes to TS 3.4.16 to reflect all of the above are not accident initiators and have no impact on the probability of occurrence for any design basis accidents. The proposed changes will have no impact on the consequences of a design basis accident because they will limit the RCS noble gas specific activity to be consistent with the values assumed in the radiological consequence analyses. The changes will also limit the potential RCS iodine concentration excursion to the value currently associated with full power operation, which is more restrictive on plant operation than the existing allowable RCS iodine specific activity at lower power levels. Therefore, the proposed changes do not involve a significant increase in the probability or consequences of an accident previously evaluated. 2. Do the proposed changes create the possibility of a new or different kind of accident from any accident previously evaluated? Response: No. The proposed changes do not alter any physical part of the plant nor do they affect any plant operating parameters besides the allowable specific activity in the RCS. The changes which impact the allowable specific activity in the RCS are consistent with the assumptions assumed in the current radiological consequence analyses. Therefore, the proposed change does not create the possibility of a new or different kind of accident from any previously evaluated. 3. Do the proposed changes involve a significant reduction in a margin of safety? Response: No. The acceptance criteria related to the proposed changes involve the allowable Control Room and offsite radiological consequences following a design basis accident. The proposed changes will have no impact on the radiological consequences of a design basis accident because they will limit the RCS noble gas specific activity to be consistent with the values assumed in the radiological consequence analyses. The changes will also limit the potential RCS iodine specific activity excursion to the value currently associated with full power operation, which is more restrictive on plant operation than the existing allowable RCS iodine specific activity at lower power levels. Therefore the proposed change does not involve a reduction in a margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* George L. Edgar, Esq., Morgan, Lewis and Bockius, 1800 M Street, NW., Washington, DC 20036. *NRC Branch Chief:* David Terao. Virginia Electric and Power Company, Docket Nos. 50-280 and 50-281, Surry Power Station, Unit Nos. 1 and 2, Surry County, Virginia *Date of amendment request:* January 31, 2007. *Description of amendment request:* The proposed change revises the Technical Specification
(TS)surveillance requirements
(SR)for addressing a missed surveillance, and is consistent with the Nuclear Regulatory Commission
(NRC)approved Revision 6 of Technical Specification Task Force
(TSTF)Standard Technical Specifications
(STS)Change Traveler TSTF-358, “Missed Surveillance Requirements.” *Basis for proposed no significant hazards consideration determination:* As required by 10 CFR 50.91(a), the licensee has provided its analysis of the issue of no significant hazards consideration, which is presented below: 1. Does the proposed change involve a significant increase in the probability or consequences of an accident previously evaluated? The proposed change to incorporate the requirements of improved STS SR 3.0.1 and SR 3.0.3 into corresponding Surry TS SR 4.0.1 and SR 4.0.3, respectively, does not affect the design or operation of the plant. The proposed change involves revising the existing Surry custom TS to be consistent with NUREG-1431, Revision 3, to facilitate the incorporation of TSTF-358 into the TS. The proposed change involves no technical changes to the existing TS as it merely clarifies how SRs are met. As such, these changes are administrative in nature and do not affect initiators of analyzed events or assumed mitigation of accident or transient events. Therefore, the proposed change does not involve a significant increase in the probability or consequences of an accident previously evaluated. 2. Does the proposed change create the possibility of a new or different kind of accident from any accident previously evaluated? The proposed change to incorporate the requirements of improved STS SR 3.0.1 and SR 3.0.3 into corresponding Surry TS SR 4.0.1 and SR 4.0.3, respectively, does not involve a physical alteration to the plant (no new or different type of equipment will be installed) or changes in methods governing normal plant operation. The proposed change revises the existing Surry TS to be consistent with NUREG-1431, Revision 3, to clarify how SRs are met and facilitates the incorporation of TSTF-358 for addressing missed surveillances. As such, the proposed change will not impose any new or different requirements or eliminate any existing requirements. Therefore, the proposed change does not create the possibility of a new or different kind of accident from any accident previously evaluated. 3. Does the proposed change involve a significant reduction in a margin of safety? The proposed change to incorporate the requirements of improved STS SR 3.0.1 and SR 3.0.3 into corresponding Surry TS SR 4.0.1 and SR 4.0.3, respectively, does not affect plant operation or safety analysis assumptions in any way. The change provides additional clarification on how a surveillance is met and facilitates the incorporation of TSTF-358 for addressing missed surveillances. The change is administrative in nature and does not affect the operation of safety-related systems, structures, or components. Therefore, the proposed change does not involve a significant reduction in a margin of safety. The NRC staff has reviewed the licensee's analysis and, based on this review, it appears that the three standards of 10 CFR 50.92(c) are satisfied. Therefore, the NRC staff proposes to determine that the amendment request involves no significant hazards consideration. *Attorney for licensee:* Lillian M. Cuoco, Esq., Senior Counsel, Dominion Resources Services, Inc., Millstone Power Station, Building 475, 5th Floor, Rope Ferry Road, Rt. 156, Waterford, Connecticut 06385. *NRC Branch Chief:* Evangelos C. Marinos. Previously Published Notices of Consideration of Issuance of Amendments to Facility Operating Licenses, Proposed No Significant Hazards Consideration Determination, and Opportunity for a Hearing The following notices were previously published as separate individual notices. The notice content was the same as above. They were published as individual notices either because time did not allow the Commission to wait for this biweekly notice or because the action involved exigent circumstances. They are repeated here because the biweekly notice lists all amendments issued or proposed to be issued involving no significant hazards consideration. For details, see the individual notice in the **Federal Register** on the day and page cited. This notice does not extend the notice period of the original notice. Carolina Power & Light, Docket No. 50-261, H. B. Robinson Steam Electric Plant, Unit No. 2, Darlington County, South Carolina *Date of amendment request:* January 19, 2007. *Brief description of amendment request:* The proposed amendment would modify Technical Specification
(TS)5.5.9 to add steam generator
(SG)alternate repair criteria and TS 5.6.8 to add additional SG reporting requirements. *Date of publication of individual notice in* Federal Register : January 30, 2007 (72 FR 4300). *Expiration date of individual notice:* April 2, 2007. Notice of Issuance of Amendments to Facility Operating Licenses During the period since publication of the last biweekly notice, the Commission has issued the following amendments. The Commission has determined for each of these amendments that the application complies with the standards and requirements of the Atomic Energy Act of 1954, as amended (the Act), and the Commission's rules and regulations. The Commission has made appropriate findings as required by the Act and the Commission's rules and regulations in 10 CFR Chapter I, which are set forth in the license amendment. Notice of Consideration of Issuance of Amendment to Facility Operating License, Proposed No Significant Hazards Consideration Determination, and Opportunity for A Hearing in connection with these actions was published in the **Federal Register** as indicated. Unless otherwise indicated, the Commission has determined that these amendments satisfy the criteria for categorical exclusion in accordance with 10 CFR 51.22. Therefore, pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared for these amendments. If the Commission has prepared an environmental assessment under the special circumstances provision in 10 CFR 51.12(b) and has made a determination based on that assessment, it is so indicated. For further details with respect to the action see
(1)The applications for amendment,
(2)the amendment, and
(3)the Commission's related letter, Safety Evaluation and/or Environmental Assessment as indicated. All of these items are available for public inspection at the Commission's Public Document Room (PDR), located at One White Flint North, Public File Area 01F21, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records will be accessible from the Agencywide Documents Access and Management Systems (ADAMS) Public Electronic Reading Room on the internet at the NRC Web site, *http://www.nrc.gov/reading-rm/adams.html.* If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the PDR Reference staff at 1
(800)397-4209,
(301)415-4737 or by e-mail to *pdr@nrc.gov* . Dominion Nuclear Connecticut, Inc., Docket No. 50-336, Millstone Power Station, Unit No. 2, New London County, Connecticut *Date of application for amendment:* February 7, 2006, as supplemented by letters dated August 14 and November 16, 2006. *Brief description of amendment:* The amendment revised the Millstone Power Station, Unit No. 2 Technical Specifications to permit an increase in the allowed outage time from 72 hours to 7 days for the inoperability of the steam supply to the turbine-driven auxiliary feedwater
(AFW)pump or the inoperability of the turbine-driven AFW pump under certain operating mode restrictions. *Date of issuance:* January 31, 2007. *Effective date:* As of the date of issuance and shall be implemented within 60 days. *Amendment No.:* 297. *Facility Operating License No. DPR-65:* The amendment revised the Technical Specifications. *Date of initial notice in* Federal Register : April 11, 2006 (71 FR 18372). The supplements dated August 14, and November 16, 2006, 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. The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated January 31, 2007. *No significant hazards consideration comments received:* No. Energy Northwest, Docket No. 50-397, Columbia Generating Station, Benton County, Washington *Date of application for amendment:* April 17, 2006. *Brief description of amendment* : This amendment changed the method for calculating fuel pool decay heat load from the original licensing basis methodology of ORIGEN to ORIGEN-ARP. *Date of issuance:* February 8, 2007. *Effective date:* As of the date of issuance and shall be implemented within 60 days. *Amendment No.:* 200. *Facility Operating License No. NPF-21:* The amendment revised the Final Safety Analysis Report. *Date of initial notice in* Federal Register *:* May 23, 2006 (71 FR 29674). The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated February 8, 2007. *No significant hazards consideration comments received:* No. Energy Northwest, Docket No. 50-397, Columbia Generating Station, Benton County, Washington *Date of application for amendment:* April 18, 2006. *Brief description of amendment:* The amendment revised Technical Specification
(TS)Surveillance Requirement
(SR)3.6.1.1.2 by changing the test frequency of the drywell-to-suppression chamber bypass leakage test from 24 months to 120 months. The amendment also added new TS SRs 3.6.1.1.3 and 3.6.1.1.4, to test the suppression chamber-to-drywell vacuum breakers on a 24-month frequency. *Date of issuance:* February 9, 2007. *Effective date:* As of its date of issuance and shall be implemented within 60 days from the date of issuance. *Amendment No.:* 201. *Facility Operating License No. NPF-21:* The amendment revised the Facility Operating License and Technical Specifications. *Date of initial notice in* Federal Register: May 23, 2006 (71 FR 29674). The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated February 9, 2007. No significant hazards consideration comments received: No. Entergy Operations, Inc., Docket No. 50-382, Waterford Steam Electric Station, Unit 3, St. Charles Parish, Louisiana *Date of amendment request:* June 14, 2006, as supplemented by letter dated November 7, 2006. *Brief description of amendment:* The amendment approved the removal of Surveillance Requirement 4.8.1.1.2.f from the Waterford Steam Electric Station, Unit 3, Technical Specifications. Entergy Operations, Inc. has committed to relocate this surveillance requirement, which is associated with vendor recommended inspections of the emergency diesel generators, to the Technical Requirements Manual. *Date of issuance:* February 6, 2007. *Effective date:* As of the date of issuance and shall be implemented 60 days from the date of issuance. *Amendment No.:* 211. *Facility Operating License No. NPF-38:* The amendment revised the Operating License and the Technical Specifications. *Date of initial notice in* Federal Register : August 15, 2006 (71 FR 46931). The November 7, 2006, supplemental letter provided additional clarifying information, did not expand the scope of the application as originally noticed, and did not change the NRC staff's original proposed no significant hazards consideration determination. The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated February 6, 2007. *No significant hazards consideration comments received:* No. FPL Energy Duane Arnold, LLC, Docket No. 50-331, Duane Arnold Energy Center, Linn County, Iowa *Date of application for amendment:* March 1, 2006, as supplemented by letter dated August 17, 2006. *Brief description of amendment:* The amendment modifies Special Operations Limiting Condition for Operation
(LCO)3.10.1, “System Leakage and Hydrostatic Testing Operation,” to allow more efficient testing during a refueling outage. Specifically, the LCO 3.10.1 allowance for operation with the average reactor coolant temperature greater than 212 °F (while considering operational conditions to be in Mode 4), is extended to include operations where temperature exceeds 212 °F:
(1)As a consequence of maintaining adequate reactor pressure for a system leakage or hydrostatic test; or
(2)as a consequence of maintaining adequate reactor pressure for control rod scram time testing initiated in conjunction with a system leakage or hydrostatic test. This change is based on the NRC-approved Technical Specification Task Force
(TSTF)standard TS change TSTF-484, Revision 0. *Date of issuance:* February 5, 2007. *Effective date:* As of the date of issuance and shall be implemented within 30 days. *Amendment No.:* 264 *Facility Operating License No. DPR-49:* The amendment revises the TSs. *Date of initial notice in* Federal Register *:* (71 FR 70560) December 5, 2006. The supplement provided additional information that clarified the application, did not expand the scope of the application as originally noticed, and did not change the NRC staff's original proposed no significant hazards consideration determination, as published in the **Federal Register** on December 5, 2006 (71 FR 70560). The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated February 5, 2007. *No significant hazards consideration comments received:* No. GPU Nuclear, Inc., Docket No. 50-320, Three Mile Island Nuclear Station, Unit 2, Dauphin County, Pennsylvania *Date of amendment request:* October 10, 2006. *Brief description of amendment:* The amendment revises Technical Specification Surveillance Requirement 4.1.1.3 to extend the containment airlock surveillance frequency from once per year to once every five years. *Date of issuance:* February 7, 2007. *Effective date:* February 7, 2007. *Amendment No.:* 61. *Possession Only License No. DPR-73:* The amendment revises the Technical Specifications. *Date of initial notice in* Federal Register *:* December 5, 2006 (71 FR 70560). The Commission's related evaluation of the amendment is contained in a Safety Evaluation Report, dated February 7, 2007. *No significant hazards consideration comments received:* No. Nuclear Management Company, Docket No. 50-263, Monticello Nuclear Generating Plant (MNGP), Wright County, Minnesota *Date of application for amendment:* November 14, 2006, as supplemented on December 28, 2006. *Brief description of amendment:* The amendment revised Table 3.3.5.1-1, “Emergency Core Cooling System Instrumentation,” of the MNGP Technical Specifications, to permit a one-time extension of the quarterly surveillance interval ( *i.e.* , from 92 days to 140 days), for three low pressure coolant injection loop select logic functions. *Date of issuance:* January 18, 2007. *Effective date:* As of the date of issuance and shall be implemented within 30 days of issuance. *Amendment No:* 149. *Renewed Facility Operating License No. DPR-22:* Amendment revised the Renewed Facility Operating License and Technical Specifications. The supplemental letter contained clarifying information and did not change the initial no significant hazards consideration determination, and did not expand the scope of the original **Federal Register** notice. *Date of initial notice in* Federal Register *:* December 19, 2006 (71 FR 75995). The Commission's related evaluation of the amendments is contained in a Safety Evaluation dated January 18, 2007. *No significant hazards consideration comments received:* No. Tennessee Valley Authority, Docket No. 50-259 Browns Ferry Nuclear Plant, Unit 1, Limestone County, Alabama *Date of application for amendment:* November 9, 2006 (TS-458). *Brief description of amendment:* The amendment deleted the Technical Specification
(TS)Surveillance Requirement to verify the position of a low pressure coolant injection crosstie valve. *Date of issuance:* February 6, 2007. *Effective date:* Effective as of the date of issuance, to be implemented within 30 days. *Amendment No.:* 268. *Renewed Facility Operating License No. DPR-33:* Amendment revised the TSs. *Date of initial notice in* Federal Register *:* November 20, 2006 (71 FR 671600). The Commission's related evaluation of the amendment is contained in a Safety Evaluation dated: February 6, 2007. *No significant hazards consideration comments received:* No. Dated at Rockville, Maryland, this 15th day of February 2007. For the Nuclear Regulatory Commission. John W. Lubinski, Acting Director, Division of Operating Reactor Licensing, Office of Nuclear Reactor Regulation. [FR Doc. E7-3199 Filed 2-26-07; 8:45 am] BILLING CODE 7590-01-P OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE Generalized System of Preferences (GSP): Import Statistics Relating to Competitive Need Limitations (CNLs); Invitation for Public Comment on CNL Waivers Subject to Potential Revocation Based on New Statutory Thresholds, Possible De Minimis Waivers, and Product Redesignations AGENCY: Office of the United States Trade Representative (USTR). ACTION: Notice. SUMMARY: This notice is to inform the public of the availability of full 2006 calendar year import statistics relating to competitive need limitations
(CNLs)under the Generalized System of Preferences
(GSP)program. Public comments are invited by 5 p.m., Friday, March 16, 2007, regarding possible *de minimis* CNL waivers with respect to particular articles and possible redesignations under the GSP program of articles currently not eligible for GSP benefits because they previously exceeded the CNLs. Additionally, public comments are invited by 5 p.m., Friday, March 23, 2007, regarding the potential revocation of CNL waivers that meet the new statutory thresholds set forth by section 503(d)(4)(B)(ii) of the Trade Act of 1974 (19 U.S.C. 2463(d)(4)(B)(ii)), as amended by Public Law 109-432. FOR FURTHER INFORMATION CONTACT: The GSP Subcommittee of the Trade Policy Staff Committee, Office of the United States Trade Representative, 1724 F Street, NW., Room F-220, Washington, DC 20508. The telephone number is
(202)395-6971. SUPPLEMENTARY INFORMATION: I. Competitive Need Limitations The GSP program provides for the duty-free importation of designated articles when imported from designated beneficiary developing countries (BDCs). The GSP program is authorized by title V of the Trade Act of 1974 (19 U.S.C. 2461, *et seq.* ), as amended (the “1974 Act”), and is implemented in accordance with Executive Order 11888 of November 24, 1975, as modified by subsequent Executive Orders and Presidential Proclamations. Section 503(c)(2)(A) of the 1974 Act sets out the two CNLs. When the President determines that a BDC exported to the United States during a calendar year either
(1)a quantity of a GSP-eligible article having a value in excess of the applicable amount for that year ($125 million for 2006), or
(2)a quantity of a GSP-eligible article having a value equal to or greater than 50 percent of the value of total U.S. imports of the article from all countries (the “50 percent CNL”), the President must terminate GSP duty-free treatment for that article from that BDC by no later than July 1 of the next calendar year. *De minimis waivers* . Under section 503(c)(2)(F) of the 1974 Act, the President may waive the 50 percent CNL with respect to an eligible article imported from a BDC if the value of total imports of that article from all countries during the calendar year did not exceed the applicable *de minimis* amount for that year ($18 million for 2006). *Redesignations.* Under section 503(c)(2)(C) of the 1974 Act, if imports of an eligible article from a BDC ceased to receive duty-free treatment due to exceeding a CNL in a prior year, the President may, subject to the considerations in sections 501 and 502 of the 1974 Act, redesignate such an article for duty-free treatment if imports in the most recently completed calendar year did not exceed the CNLs. *CNL waiver revocation* . Under Section 503(d)(5) of the 1974 Act, a CNL waiver remains in effect until the President determines that it is no longer warranted due to changed circumstances. Section 503(d)(4)(B)(ii) of the 1974 Act, as amended by Public Law 109-432, also provides that, “[n]ot later than July 1 of each year, the President should revoke any waiver that has then been in effect with respect to an article for 5 years or more if the beneficiary developing country has exported to the United States (directly or indirectly) during the preceding calendar year a quantity of the article (I)—having an appraised value in excess of 1.5 times the applicable amount set forth in subsection (c)(2)(A)(ii) for that calendar year [$187.5 million in 2006]; or
(II)exceeding 75 percent of the appraised value of the total imports of that article into the United States during that calendar year.” II. Implementation of Competitive Need Limitations, Waivers, and Redesignations Exclusions from GSP duty-free treatment where CNLs have been exceeded will be effective July 1, 2007, unless granted a waiver by the President. Any CNL-based exclusions, CNL waiver revocations, and decisions with respect to *de minimis* waivers and redesignations will be based on full 2006 calendar year import data. III. 2006 Import Statistics In order to provide notice of articles that have exceeded the CNLs for 2006, and to afford an opportunity for comment regarding potential *de minimis* waivers, redesignations, and the potential revocation of waivers that are subject to the new CNL waiver thresholds provided by section 503(d)(4)(B)(ii) of the 1974 Act, as amended by Public Law 109-432, import data for 2006 are available at *http://www.ustr.gov/Trade_Development/Preference_Programs/GSP/Section_Index.html* ). Full 2006 calendar year data for individual tariff subheadings may be viewed on the Web site of the U.S. International Trade Commission at *http://dataweb.usitc.gov/* . The lists available on the USTR Web site contain, for each article, the Harmonized Tariff Schedule of the United States (HTSUS) subheading and BDC country of origin, the value of imports of the article for the 2006 calendar year, and the percentage of total imports of that article from all countries. The annotations on the lists indicate, among other things, the status of GSP eligibility. The computer-generated lists published on the USTR Web site are for informational purposes only. They may not include all articles to which the GSP CNLs may apply. All determinations and decisions regarding the CNLs of the GSP program will be based on full 2006 calendar year import data with respect to each GSP-eligible article. Each interested party is advised to conduct its own review of 2006 import data with respect to the possible application of the GSP CNL provisions. List I on the USTR Web site shows:
(a)Articles from BDCs that became ineligible for GSP treatment on or before July 1, 2006; and
(b)GSP-eligible articles from BDCs that exceeded the CNL by having been exported in excess of $125 million, or by an amount greater than 50% of the total U.S. import value in 2006. Petitions to grant CNL waivers for those articles that received GSP benefits during 2006 but stand to lose GSP duty-free treatment on July 1, 2007, must have been previously submitted in the 2006 GSP Annual Review. List II identifies GSP-eligible articles from BDCs that are above the 50 percent CNL, but that are eligible for a *de minimis* waiver of the 50 percent CNL. Articles eligible for *de minimis* waivers are automatically considered in the GSP annual review process, without petitions, and public comments are invited. List III shows GSP-eligible articles from certain BDCs that are currently not receiving GSP duty-free treatment, but that may be considered for GSP redesignation based on 2006 trade data and consideration of certain statutory factors, as set forth above. Recommendations to the President on redesignations are normally made as part of the GSP annual review process, and public comments are invited. List IV shows articles subject to the new CNL waiver thresholds of section 503(d)(4)(B)(ii) of the 1974 Act, as amended by Pub. L. 109-432. Recommendations to the President on revocation of these waivers will be made as part of the 2006 GSP annual review process, and public comments are invited. IV. Public Comments Requirements for Submissions All submissions must conform to the GSP regulations set forth at 15 CFR part 2007, except as modified below. Furthermore, each party providing comments should indicate on the first page of the submission its name, the relevant HTSUS subheading(s), the BDC of interest, and the type of action ( *e.g.* , new statutory criteria, *de minimis* waiver or redesignation) in which the party is interested. Comments must be submitted, in English, to the Chairman of the GSP Subcommittee of the Trade Policy Staff Committee
(TPSC)as soon as possible, but no later than 5 p.m., Friday, March 16, 2007, for comments regarding *de minimis* waivers or redesignations, and no later than 5 p.m., March 23, 2007, for comments on the potential revocation of CNL waivers that meet the new statutory thresholds. To facilitate prompt consideration of submissions, USTR will only accept electronic e-mail submissions in response to this notice. Hand-delivered submissions either by mail or other delivery options will not be accepted. Submissions should be single-copy transmissions in English with the total submission not to exceed 20 single-spaced standard letter-size pages, including attachments, and three megabytes as a digital file attached to an e-mail transmission. The e-mail transmission must use either one of the two following subject lines, based on the subject of the comment being submitted: “Comments on 2006 GSP Redesignation and *De minimis* Waiver Review,” or “Comments on 2006 CNL Waiver Threshold Review,” followed by the BDC country of origin and HTSUS subheading number as set out in the appropriate list. Documents must be submitted as either MSWord (“.doc”), Word Perfect (“.wpd”), Adobe (“.pdf”) or text (“.txt”) files. Documents submitted as electronic image files or containing imbedded images (for example, “.jpg”, “.tif”, “.bmp”, or “.gif” files) will not be accepted. Spreadsheets submitted as supporting documentation are acceptable as Excel, pre-formatted for printing on 8 1/2 x 11 inch paper. To the extent possible, any data attachments to the submission should be included in the same file as the submission itself, and not as separate files. If the submission contains business confidential information, pursuant to 15 CFR 2003.6, a non-confidential version of the submission must also be submitted that indicates where confidential information was redacted by inserting asterisks where material was deleted. In addition, the confidential version must be clearly marked “BUSINESS CONFIDENTIAL” at the top and bottom of each page of the document. The non-confidential version must be clearly marked “PUBLIC” or “NON-CONFIDENTIAL” at the top and bottom of each page. Documents that are submitted without any marking may not be accepted or will be considered public documents. For any document containing business confidential information submitted as an electronic attached file to an e-mail transmission, the file name of the business confidential version should begin with the characters “BC-”, and the file name of the public version should begin with the character “P-”. The “BC-” or “-”should be followed by the name of the party (government, company, union, association, etc.) which is submitting the comments. E-mail submissions should not include separate cover letters or messages in the message area of the e-mail; information that might appear in any cover letter should be included directly in the attached file containing the submission itself, including the sender's identifying information with telephone number, fax number, and e-mail address. The e-mail address for submissions to the 2006 GSP Redesignation and *De minimis* Waiver Review is *FR0441@USTR.EOP.GOV.* The e-mail address for the 2006 CNL Waiver Threshold Review is *FR0618@USTR.EOP.GOV* . Documents not submitted in accordance with these instructions may not be considered in this review. If unable to provide submissions by e-mail, please contact the GSP Subcommittee to arrange for an alternative method of transmission. Public versions of all documents relating to this review will be available for public review approximately two weeks after the due date by appointment in the USTR Public Reading Room, 1724 F Street NW., Washington, DC. Availability of documents may be ascertained, and appointments may be made from 9:30 a.m. to noon and 1 p.m. to 4 p.m., Monday through Friday, by calling 202-395-6186. Marideth J. Sandler, Executive Director, Generalized System of Preferences
(GSP)Program, and Chair, GSP Subcommittee, Office of the U.S. Trade Representative. [FR Doc. E7-3394 Filed 2-26-07; 8:45 am] BILLING CODE 3190-W7-P SECURITIES AND EXCHANGE COMMISSION [Release No. IC-27703; 812-13337] Rydex ETF Trust, et al.; Notice of Application February 20, 2007. AGENCY: Securities and Exchange Commission (“Commission”). ACTION: Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from sections 2(a)(32), 5(a)(1), 22(d) and 24(d) of the Act and rule 22c-1 under the Act, and under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and (a)(2) of the Act. Applicants: Rydex ETF Trust (“Trust”), PADCO Advisors II, Inc. (“Advisor”), and Rydex Distributors, Inc. (“Distributor”). Summary of Application: Applicants request an order that would permit:
(a)series of an open-end management investment company to issue shares of limited redeemability;
(b)secondary market transactions in the shares of the series to occur at negotiated prices on a national securities exchange, as defined in section 2(a)(26) of the Act, such as the New York Stock Exchange LLC (“NYSE”), The NASDAQ Stock Market, Inc. (“Nasdaq”) and the American Stock Exchange LLC (“Amex”) (each, an “Exchange”);
(c)dealers to sell shares of the series of the Trust to purchasers in the secondary market unaccompanied by a prospectus, when prospectus delivery is not required by the Securities Act of 1933 (the “Securities Act”); and
(d)certain affiliated persons of a series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of aggregations of the series' shares. 1 1 The Trust currently operates pursuant to an order that grants such relief to offer series that match the performance of equity securities indices. In the Matter of Rydex ETF Trust, *et al.* , Investment Company Act Release Nos. 25948 (Feb. 27, 2003) (notice) and 25970 (Mar. 25, 2003) (order), amended by Investment Company Act Release Nos. 27183 (Dec. 8, 2005) (notice) and 27202 (Jan. 4, 2006) (order), (“Prior Order”). Filing Dates: The application was filed on October 27, 2006. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in this notice. Hearing or Notification of Hearing: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary 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 March 19, 2007, 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 who wish to be notified of a hearing may request notification by writing to the Commission's Secretary. ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. Applicants: Rydex ETF Trust; PADCO Advisors II, Inc.; and Rydex Distributors, Inc., 9601 Blackwell Road, Suite 500, Rockville, MD 20850. FOR FURTHER INFORMATION CONTACT: Laura L. Solomon, Senior Counsel, at
(202)551-6915, or Julia Kim Gilmer, Branch Chief, at
(202)551-6871 (Division of Investment Management, Office of Investment Company Regulation). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained for a fee at the Commission's Public Reference Desk, 100 F Street, NE., Washington, DC 20549-0102 (tel. 202-551-5850). Applicants' Representations 1. The Trust is an open-end management investment company registered under the Act and organized as a Delaware statutory trust. The Trust is authorized to offer an unlimited number of series (the “Funds”). The Advisor is registered as an investment adviser under the Investment Advisers Act of 1940 (“Advisers Act”). Each Fund will be advised by the Advisor or an entity controlled by or under common control with the Advisor. The Advisor may enter into subadvisory agreements with additional investment advisers to act as subadviser to the Trust and any of its Funds. Any subadviser to the Trust or a Fund will be registered under the Advisers Act. The Distributor is registered as a broker-dealer under the Securities Exchange Act of 1934 (“Exchange Act”) and will act as the distributor and principal underwriter for each Fund's shares (“Shares”). 2. The Trust currently offers eight series that seek to match the performance of equity securities indices pursuant to the Prior Order. Applicants seek relief to offer additional series with different types of investment objectives (each such series, a “New Fund”). The New Funds will seek daily investment results that correspond, before fees and expenses, to:
(a)125%, 150% or 200% of the return of equity securities indices (“Leveraged Funds”); or
(b)move in the opposite direction of the performance of equity securities indices in multiples of 100%, 125%, 150% or 200% (“Inverse Funds”). Applicants propose to initially offer ninety-six New Funds. 2 2 The underlying indices for these New Funds (each, an “Underlying Index”) are identified in the application. 3. In addition to equity securities, the New Funds may invest in short-term debt instruments that meet the definition of “Eligible Security” in rule 2a-7 under the Act (“Money Market Instruments”), and in futures contracts, options, equity caps, collars and floors, swap agreements, forward contracts, and reverse repurchase agreements (collectively, “Financial Instruments”) in order to meet their investment objectives. Leveraged Funds will invest 80% or more of their total assets in equity securities contained in the relevant Underlying Index and up to 20% of their total assets in Financial Instruments and Money Market Instruments. The Inverse Funds will only invest in Financial Instruments and Money Market Instruments; they will not invest in equity securities. 4. The Advisor will seek to achieve the investment objectives of the New Funds by using a mathematical model that takes into account a variety of specified criteria, the most important of which are:
(a)The net assets in each New Fund's portfolio at the end of each trading day;
(b)the amount of required exposure to the Underlying Index; and
(c)the positions in equity securities, Financial Instruments and Money Market Instruments at the beginning of each trading day. On each day that a New Fund is open for business (“Business Day”), including as required by section 22(e) of the Act, the full portfolio holdings of each New Fund will be disclosed on the Web site of the Trust and/or the Exchange where the Shares are primarily listed (“Primary Listing Exchange”). The portfolio holdings information disclosed each Business Day will form the basis for that New Fund's net asset value (“NAV”) calculation as of 4 p.m. that day and will reflect portfolio trades made on the immediately preceding Business Day. Intra-day values of each Underlying Index will be disseminated every 15 seconds throughout the trading day. 5. For the New Funds, applicants expect a daily tracking error of less than 5% (excluding the impact of expenses and interest, if any) to the specified multiple, inverse or inverse multiple, respectively, of the performance of the relevant Underlying Index. 6. Each New Fund will issue Shares in aggregations of 25,000 to 100,000 Shares (each, a “Creation Unit”). Applicants expect the price of a Creation Unit to be a minimum of $1 million. Creation Units may be purchased only by or through the Distributor or a party that has entered into a participant agreement with the Distributor (an “Authorized Participant”). An Authorized Participant must be either
(a)a broker-dealer or other participant in the continuous net settlement system of the National Securities Clearing Corporation, a clearing agency that is registered with the Commission, or
(b)a participant in the Depository Trust Company (“DTC”) system. 7. Creation Units of Leveraged Funds generally will be purchased and redeemed in exchange for an “in-kind” transfer of securities and cash (“In-Kind Payment”). Inverse Funds will generally be purchased and redeemed entirely for cash because of the limited transferability of Financial Instruments. 3 An investor making an In-Kind Payment will be required to transfer to the Trust a “Deposit Basket” consisting of:
(a)A basket of equity securities consisting of some or all of the securities in the relevant Underlying Index or equivalent equity securities selected by the Advisor to correspond to the performance of the Underlying Index (the “Deposit List”); 4 and
(b)a cash amount equal to the differential, if any, between the market value of the equity securities in the Deposit Basket and the NAV per Creation Unit (“Balancing Amount”). 5 An investor purchasing a Creation Unit from a New Fund will be charged a fee (“Transaction Fee”) to prevent the dilution of the interests of the remaining shareholders resulting from the New Fund incurring costs in connection with the purchase of the Creation Units. 6 The maximum Transaction Fee and any variations or waivers of the Transaction Fee will be disclosed in the current prospectus (“Prospectus”) and the method of determining the Transaction Fees will be disclosed in the Prospectus and/or statement of additional information (“SAI”). 3 The Trust may also accept and deliver all-cash payments for the purchase and redemption of Creation Units of any New Fund in certain limited circumstances. 4 The New Funds must comply with the federal securities laws in accepting Deposit Securities and satisfying redemptions with securities on the Redemption List (defined below), including that such securities are sold in transactions that would be exempt from registration under the Securities Act of 1933. 5 On each Business Day, prior to the opening of trading on the NYSE, the Trust's index receipt agent will make available the list of the names and the required number of shares of each equity security included in the current Deposit Basket and the Balancing Amount for each New Fund. Such Deposit Basket will apply to all purchases of Creation Units until a new Deposit Basket for a New Fund is announced. The Primary Listing Exchange will disseminate every 15 seconds during regular trading hours, through the facilities of the Consolidated Tape Association, an amount representing on a per share basis the sum of the current value of the securities on the Deposit List, and the estimated amount of cash and Money Market Instruments held in the portfolio of a Leveraged Fund. If such New Funds hold Financial Instruments, the amount would also include, on a per share basis, the marked-to-market gains or losses of the Financial Instruments held by the Leveraged Fund. For Inverse Funds, the Primary Listing Exchange will disseminate an amount representing, on a per share basis, the estimated amount of cash and Money Market Instruments, and the marked-to-market gains or losses of the Inverse Fund's Financial Instruments. 6 A purchaser permitted to substitute cash for certain securities on the Deposit List may be assessed a higher Transaction Fee to cover the cost of purchasing such securities, including operational processing and brokerage costs, and part or all of the spread between the expected bid and offer side of the market relating to such securities. 8. All orders to purchase Creation Units must be placed on a Business Day with the Distributor. The Distributor also will be responsible for delivering the Prospectus to those persons purchasing Creation Units and for maintaining records of the orders and acknowledgements of acceptance for orders. 9. Persons purchasing Creation Units from a New Fund may hold the Shares or sell some or all of them in the secondary market. Shares of the New Funds will be listed on an Exchange and trade in the secondary market in the same manner as other exchange-traded funds. It is expected that one or more Exchange members will act as a specialist or market maker and maintain a market on the listing Exchange for Shares. 7 The price of Shares traded on an Exchange will be based on a current bid/offer market. The initial trading price for each Share of each New Fund will fall in the range of $50 to $250. Transactions involving the sale of Shares in the secondary market will be subject to customary brokerage commissions and charges. 7 The listing requirements established by Nasdaq require that at least two market makers be registered in Shares in order for the Shares to maintain a listing. Registered market makers must make a continuous two-sided market in a listing or face regulatory sanctions. 10. Applicants expect that purchasers of Creation Units will include institutional and retail investors, arbitrageurs, traders, financial advisors, portfolio managers and other market participants. 8 An Exchange specialist or market maker, in providing for a fair and orderly secondary market for Shares, also may purchase or redeem Creation Units for use in its market-making activities. Applicants expect that the market price of Shares will be disciplined by arbitrage opportunities created by the ability to purchase or redeem Creation Units at their NAV, which should ensure that the market price of Shares at or close to 4 p.m. stays close to the NAV on that Business Day. 8 Shares will be registered in book-entry form only. DTC or its nominee will be the record or registered owner of all outstanding Shares. DTC or its participants will maintain records reflecting the beneficial owners of Shares. 11. Shares will not be individually redeemable. Shares will only be redeemable in Creation Units through the Distributor, which will act as the Trust's agent for redemption. To redeem, an investor must accumulate enough Shares to constitute a Creation Unit. An investor redeeming a Creation Unit of a Leveraged Fund generally will receive an “in-kind” payment comprised of equity securities published by the Trust's index receipt agent (the “Redemption List”) plus a Balancing Amount equal to the difference between the market value of the equity securities on the Redemption List and the NAV of the Shares being redeemed. Redemptions of Creation Units for Inverse Funds will occur entirely in cash. A redeeming investor will pay a Transaction Fee to offset the transactional expenses associated with redeeming Creation Units. 12. Applicants state that neither the Trust nor any New Fund will be advertised, marketed or otherwise held out as a “mutual fund.” The term “mutual fund” will not be used in the Prospectus except to compare and contrast the Trust or a New Fund with conventional mutual funds. In all marketing materials where the features or methods of obtaining, buying, or selling Creation Units are described or where there is reference to redeemability, applicants will include a prominent statement to the effect that individual Shares are not redeemable except in Creation Units. The same approach will be followed in connection with reports and other communications to shareholders, as well as any other investor education materials issued or circulated in connection with Shares. The Trust will provide copies of its annual and semi-annual shareholder reports to DTC participants for distribution to beneficial holders of Shares. Applicants' Legal Analysis 1. Applicants request an order under section 6(c) of the Act granting an exemption from sections 2(a)(32), 5(a)(1), 22(d) and 24(d) of the Act and rule 22c-1 under the Act, and under sections 6(c) and 17(b) of the Act granting an exemption from sections 17(a)(1) and 17(a)(2) of the Act. 2. Section 6(c) of the Act provides that the Commission may exempt any person, security or transaction, or any class of persons, securities or transactions, from any provision of the Act, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Sections 5(a)(1) and 2(a)(32) of the Act 3. Section 5(a)(1) of the Act defines an “open-end company” as a management investment company that is offering for sale or has outstanding any redeemable security of which it is the issuer. Section 2(a)(32) of the Act defines a redeemable security as any security, other than short-term paper, under the terms of which the holder, upon its presentation to the issuer, is entitled to receive approximately his proportionate share of the issuer's current net assets, or the cash equivalent. Because Shares will not be individually redeemable, applicants request an order that would permit the Trust, which is registered as an open-end management investment company, to issue Shares of New Funds that are redeemable in Creation Units only. Applicants state that investors may always redeem Shares in Creation Units from the Trust. Applicants further state that because the market price of Shares will be disciplined by arbitrage opportunities, investors should be able to sell Shares in the secondary market at or close to 4 p.m. on a Business Day at prices that do not vary substantially from the NAV on that Business Day. Section 22(d) of the Act and Rule 22c-1 Under the Act 4. Section 22(d) of the Act, among other things, prohibits a dealer from selling a redeemable security, which is currently being offered to the public by or through a principal underwriter, except at a current public offering price described in the prospectus. Rule 22c-1 under the Act generally requires that a dealer selling, redeeming, or repurchasing a redeemable security do so only at a price based on its NAV. Applicants state that secondary market trading in Shares will take place at negotiated prices, not at a current offering price described in the Prospectus as required by section 22(d) of the Act, and not at a price based on NAV as required by rule 22c-1 under the Act. Applicants request an exemption under section 6(c) from these provisions. 5. Applicants assert that the concerns sought to be addressed by section 22(d) of the Act and rule 22c-1 under the Act with respect to pricing are equally satisfied by the proposed method of pricing Shares. Applicants maintain that while there is little legislative history regarding section 22(d), its provisions, as well as those of rule 22c-1, appear to have been intended to
(a)prevent dilution caused by certain riskless- trading schemes by principal underwriters and contract dealers,
(b)prevent unjust discrimination or preferential treatment among buyers, and
(c)ensure an orderly distribution of shares by eliminating price competition from dealers offering shares at less than the published sales price and repurchasing shares at more than the published redemption price. 6. Applicants believe that none of these purposes will be thwarted by permitting Shares to trade in the secondary market at negotiated prices. Applicants state that
(a)secondary market trading in Shares does not involve the Trust's assets and cannot result in dilution of an investment in Shares, and
(b)to the extent different prices exist during a given trading day, or from day to day, such variances occur as a result of third-party market forces, such as supply and demand, not as a result of unjust or discriminatory manipulation. Therefore, applicants assert that secondary market transactions in Shares will not lead to discrimination or preferential treatment among purchasers. Finally, applicants contend that the proposed distribution system will be orderly because competitive forces in the marketplace will ensure that the difference between the market price of Shares and their NAV remains narrow. Section 24(d) of the Act 7. Section 24(d) of the Act provides, in relevant part, that the prospectus delivery exemption provided to dealer transactions by section 4(3) of the Securities Act does not apply to any transaction in a redeemable security issued by an open-end investment company. Applicants request an exemption from section 24(d) to permit dealers selling Shares to rely on the prospectus delivery exemption provided by section 4(3) of the Securities Act. 9 9 Applicants do not seek relief from the prospectus delivery requirement for non-secondary market transactions, such as transactions in which an investor purchases Shares in Creation Units from the issuer or an underwriter. Applicants state that persons purchasing Creation Units will be cautioned in the Prospectus that some activities on their part may, depending on the circumstances, result in their being deemed statutory underwriters and subject them to the prospectus delivery and liability provisions of the Securities Act. The Prospectus will state that whether a person is an underwriter depends upon all the facts and circumstances pertaining to that person's activities. For example, a broker-dealer firm and/or its client may be deemed a statutory underwriter if it takes Creation Units after placing an order with the Distributor, breaks them down into the constituent Shares, and sells Shares directly to its customers, or if it chooses to couple the purchase of a supply of new Shares with an active selling effort involving solicitation of secondary market demand for Shares. The Prospectus also will state that dealers who are not “underwriters” but are participating in a distribution (as contrasted to ordinary secondary market trading transactions), and thus dealing with Shares that are part of an “unsold allotment” within the meaning of section 4(3)(C) of the Securities Act, would be unable to take advantage of the prospectus delivery exemption provided by section 4(3) of the Securities Act. 8. Applicants state that secondary market investors will regard Shares in a manner similar to other securities, including closed-end fund shares that are listed, bought and sold on an Exchange. Applicants note that shares of closed-end fund investment companies are sold in the secondary market unaccompanied by a prospectus. 9. Applicants contend that Shares, as a listed security, merit a reduction in the compliance costs and regulatory burdens resulting from the imposition of prospectus delivery obligations in the secondary market. Because Shares will be exchange-listed, prospective investors will have access to several types of market information about Shares. Applicants state that information regarding market price and volume will be continually available on a real-time basis throughout the day from the relevant Exchange, automated quotation systems, published or other public sources or on-line information services. Applicants expect that the previous day's closing price and volume information for Shares also will be published daily in the financial section of newspapers. In addition, the Trust expects to maintain a website that includes quantitative information updated on a daily basis, including, for each New Fund, daily trading volume, the NAV and the reported closing price (or in the alternative, the mid-point of the bid-ask spread at the time of calculation of such NAV (the “Bid/Ask Price”)). 10 The Web site will also include, for each New Fund, closing price (or Bid/Ask Price) and data in chart format displaying the frequency distribution of discounts and premiums of the closing price (or Bid/Ask Price) against the NAV, within appropriate ranges, for each of the four previous calendar quarters. 10 The Bid/Ask Price of a New Fund is determined using the highest bid and the lowest offer on the Primary Listing Exchange as of the time of calculation of such new Fund's NAV. 10. Investors also will receive a product description (“Product Description”) describing the Trust, the New Funds and the Shares. Applicants state that, while not intended as a substitute for a Prospectus, the Product Description will contain information about Shares that is tailored to meet the needs of investors purchasing Shares in the secondary market. Sections 17(a)(1) and
(2)of the Act 11. Section 17(a) of the Act generally prohibits an affiliated person of a registered investment company, or an affiliated person of such a person, from selling any security to or purchasing any security from the company. Section 2(a)(3) of the Act defines “affiliated person” to include any person directly or indirectly owning, controlling, or holding with power to vote 5% or more of the outstanding voting securities of the other person and any person directly or indirectly controlling, controlled by, or under common control with, the other person. Section 2(a)(9) of the Act provides that a control relationship will be presumed where one person owns 25% or more of another person's voting securities. Applicants state that one or more holders of Creation Units could own more than 5% of a New Fund, or in excess of 25% of that New Fund, and could be deemed affiliated with the Trust or such New Fund under section 2(a)(3)(A) or 2(a)(3)(C) of the Act. Also, an Exchange specialist or market maker for Shares of any New Fund might accumulate, from time to time, more than 5% or in excess of 25% of that New Fund's Shares. Applicants request an exemption from section 17(a) of the Act under sections 6(c) and 17(b) of the Act, to permit persons that are affiliated persons of the New Funds solely by virtue of a 5% or 25% ownership interest (or affiliated persons of such affiliated persons that are not otherwise affiliated with the New Fund) to purchase and redeem Creation Units through “in-kind” transactions. 12. Section 17(b) of the Act authorizes the Commission to exempt a proposed transaction from section 17(a) of the Act if evidence establishes that the terms of the transaction, including the consideration to be paid or received, are reasonable and fair and do not involve overreaching on the part of any person concerned, and the proposed transaction is consistent with the policies of the registered investment company and the general provisions of the Act. Applicants contend that no useful purpose would be served by prohibiting the affiliated persons of a New Fund described above from purchasing or redeeming Creation Units through “in-kind” transactions. The deposit and redemption procedures for “in-kind” purchases and redemptions of Creations Units will be effected in exactly the same manner for all purchases and redemptions. The securities contained in the “in-kind” transactions will be valued in the same manner and according to the same standards as the securities held by the relevant New Fund. Therefore, applicants state that “in-kind” purchases and redemptions will afford no opportunity for the affiliated persons described above to effect a transaction detrimental to the other holders of its Shares. Applicants also believe that “in-kind” purchases and redemptions will not result in abusive self-dealing or overreaching by affiliated persons of the New Funds. Applicants' Conditions Applicants agree that any order granting the requested relief will be subject to the following conditions: 1. Applicants will not register a series of the Trust not identified in the application, by means of filing a post-effective amendment to the Trust's registration statement or by any other means, unless applicants have requested and received with respect to such series, either
(a)exemptive relief from the Commission, or
(b)a no-action letter from the Division of Investment Management of the Commission. 2. The Prospectus and the Product Description will clearly disclose that, for purposes of the Act, Shares are issued by the New Funds and that the acquisition of Shares by investment companies is subject to the restrictions of section 12(d)(1) of the Act, except as permitted by an exemptive order that permits registered investment companies to invest in a New Fund beyond the limits in section 12(d)(1), subject to certain terms and conditions, including that the registered investment company enter into an agreement with the New Fund regarding the terms of the investment. 3. As long as the Trust operates in reliance on the requested order, the Shares will be listed on an Exchange. 4. Neither the Trust nor any New Fund will be advertised or marketed as an open-end fund or a mutual fund. The Prospectus will prominently disclose that Shares are not individually redeemable shares and will disclose that the owners of the Shares may acquire those Shares from the Trust and tender those Shares for redemption to the Trust in Creation Units only. Any advertising material that describes the purchase or sale of Creation Units or refers to redeemability will prominently disclose that Shares are not individually redeemable and that owners of Shares may acquire those Shares from the Trust and tender those Shares for redemption to the Trust in Creation Units only. 5. Before a New Fund may rely on the order, the Commission will have approved, pursuant to rule 19b-4 under the Exchange Act, an Exchange rule or an amendment thereto, requiring Exchange members and member organizations effecting transactions in Shares to deliver a Product Description to purchasers of Shares. 6. The Web site for the Trust, which will be publicly accessible at no charge, will contain the following information, on a per Share basis, for each New Fund:
(a)The prior Business Day's NAV and the closing price (or the mid-point of the bid-ask spread at the time of calculation of such NAV (the Bid/Ask Price)), and a calculation of the premium or discount of such closing price (or Bid/Ask Price) against such NAV; and
(b)data in chart format displaying the frequency distribution of discounts and premiums of the closing price (or Bid/Ask Price) against the NAV, within appropriate ranges, for each of the four previous calendar quarters (or the life of the New Fund, if shorter). In addition, the Product Description for each New Fund will state that the website for the Trust has information about the premiums and discounts at which the Shares have been traded. 7. The Prospectus and annual report for each New Fund will also include:
(a)The information listed in condition 6(b),
(i)in the case of the Prospectus, for the most recently completed year (and the most recently completed quarter or quarters, as applicable), and
(ii)in the case of the annual report, for the immediately preceding five years (or the life of the New Fund, if shorter); and
(b)the following data, calculated on a per Share basis for one, five and ten year periods (or life of the New Fund, if shorter),
(i)the cumulative total return and the average annual total return based on NAV and closing price (or Bid/Ask Price), and
(ii)the cumulative total return of the relevant Underlying Index. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-3284 Filed 2-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55296; File No. SR-Amex-2007-14] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Options Fee Schedule February 14, 2007. 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 January 30, 2007, 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 substantially prepared by the Amex. The Amex has filed the proposal pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(2) 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)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its options fee schedule (the “Fee Schedule”) to
(i)reduce the daily maximum aggregate fee charged for all dividend strategies, merger spreads and short stock interest spreads to $100,
(ii)reduce the monthly maximum aggregate fee charged for such trades to $12,500,
(iii)replace the term “dividend spread” with “dividend strategies,”
(iv)extend the fee cap pilot program until February 1, 2008, and
(v)increase the licensing fee for the Russell Index and Russell ETF Options (together the “Russell Index Options”) from $0.10 to $0.15 per contract side The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and *http://www.amex.com* . 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 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. The 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 Fee Cap Program Currently, specialists, registered options traders, non-member market makers, firms, and member and non-member broker-dealers option transaction, comparison and floor brokerage fees are limited to an aggregate fee of $1,000 for all dividend spreads, 5 merger spreads and short stock interest spreads executed on the same trading day in the same option class. 6 In addition, such fees are also limited to $50,000 per month per initiating firm. In order to attract additional order flow to the Exchange, this proposal seeks to reduce the daily aggregate to $100 and the monthly aggregate to $12,500. The Exchange submits that the reduced fees may increase the trading opportunities for its members as well as enable the Exchange to attract new business. 5 A “dividend spread” is any trade done within a defined time frame in which a dividend arbitrage can be achieved between any two
(2)deep-in-the-money options. 6 These fees are charged only to Exchange members. This proposal will also amend the Fee Schedule to expand dividend spreads to “dividend strategies.” Dividend strategies are transactions done to achieve a dividend arbitrage involving the purchase, sale and exercise of in-the-money options of the same class, executed prior to the date on which the underlying stock goes ex-dividend. The proposed amendment is similar to the definition currently used by the Chicago Board Options Exchange (“CBOE”) as well as other exchanges. 7 7 *See* CBOE Fee Schedule and Philadelphia Stock Exchange Fee Schedule. The fee cap program is currently operated on a six
(6)month pilot basis. The proposal seeks to extend the pilot for an additional year, through February 1, 2008. To date, the Exchange believes that the fee cap program has been beneficial, and submits, that a one
(1)year extension is warranted. Russell Index Option License Fee The proposal also seeks to increase the licensing fees for the Russell Index Options. Currently, the licensing fees for the Russell Index Options are $0.10 per contract side. The Exchange proposes to increase this fee to $0.15 per contract side as a result of an increase in the license agreement for the Russell Index Options. As detailed in the original filing regarding license fees for Russell Index Options, 8 the Exchange typically pays an index license fee to a third party as a condition to the listing and trading of such index options. In many cases, the Exchange is required to pay a significant licensing fee to the index provider that may not be reimbursed. In an effort to recoup the costs associated with certain index licenses, the Exchange has established a per contract licensing fee for the orders of specialists, registered options traders, firms, non-member market makers and broker-dealers, that is collected on every option transaction in designated products in which such market participant is a party. 9 8 *See* Securities Exchange Act Release No. 53968 (June 9, 2006), 71 FR 34971 (June 16, 2006) (SR-Amex-2006-56). 9 *See* Securities Exchange Act Release No. 52493 (September 22, 2005), 70 FR 56941 (September 29, 2005) (SR-Amex-2005-087). The purpose of the proposal is to charge a licensing fee of $0.15 per contract side for Russell Index Options for specialist, registered options trader, firm, non-member market maker and broker-dealer orders executed on the Exchange. In all cases, the fees are charged only to Exchange members through whom the orders are placed. The proposal will allow the Exchange to recoup its costs in connection with the index license fee for the trading of Russell Index Options. The Exchange notes that the Amex in recent years has revised a number of fees to better align Exchange fees with the actual cost of delivering services and reduce Exchange subsidies of such services. Implementation of this proposal is consistent with the reduction and/or elimination of these subsidies. The Exchange asserts that the proposal is equitable as required by Section 6(b)(4) of the Act. 10 Further, the Exchange believes that charging an options licensing fee, where applicable, to all market participant orders except for customer orders is reasonable given the competitive pressures in the industry. 10 15 U.S.C. 78f(b)(4). Section 6(b)(4) of the Act states that the rules of a national securities exchange provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities. 2. Statutory Basis The Exchange asserts that the proposal is equitable as required by Section 6(b)(4) of the Act. B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change does not 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 solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change is subject to Section 19(b)(3)(A)(ii) of the Act 11 and subparagraph (f)(2) of Rule 19b-4 thereunder 12 because it establishes or changes a due, fee, or other charge applicable only to a member imposed by the self-regulatory organization. Accordingly, the proposal is effective upon the Commission's receipt of the filing. 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. 11 15 U.S.C. 78s(b)(3)(A)(ii). 12 17 CFR 240.19b-4(f)(2). 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-2007-14 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-Amex-2007-14. 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 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-2007-14 and should be submitted on or before March 20, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-3285 Filed 2-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55326; File No. SR-CBOE-2006-107] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Approval to Proposed Rule Change Regarding a Permit Program for CBSX February 21, 2007. I. Introduction On December 18, 2006, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) 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 a proposed rule change to establish a permit program for CBSX, the Exchange's proposed stock-trading facility (“Permit Program”). The proposed rule change was published for comment in the **Federal Register** on December 29, 2006. 3 The Commission received no comments regarding the proposal. This order approves the proposed rule change. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 54987 (December 20, 2006), 71 FR 78481. II. Description of the Proposal CBSX will be a facility of the Exchange and will serve as the Exchange's vehicle for trading non-option securities. The Exchange proposed to modify its Constitution and Rules to establish the Permit Program and thereby allow non-CBOE seat holders access to CBSX. The Exchange noted that expanding access to CBSX beyond CBOE's options user base would enhance liquidity on CBSX and make it a more attractive stock trading venue. The principal features of the Permit Program are as follows: • The permits may only be used for trading stock on CBSX. A Permit does not entitle the holder to trade options on CBOE or to physically enter an option trading post on the trading floor; • Up to 100 permits may be issued; • The Permit Program could be terminated by the Exchange pursuant to a rule filing approved by the Commission. This provision is incorporated in the Exchange's Constitution to allow the CBSX Permit Program to be terminated without a corresponding membership vote ( *i.e.* , the Exchange's membership has already approved the notion that a future termination of the Permit Program could occur without another membership vote); • Permit holders would be deemed statutory members of CBOE. Accordingly, they would have the same petition and voting rights as regular members except for matters relating to Exchange ownership (specifically, matters relating to demutualization, mergers, consolidations, dissolution, liquidation, transfer, or conversion of assets of the Exchange), and except for matters relating the Chicago Board of Trade exercise right; • Permit holders would have no interest in the assets or property of CBOE and would have no right to share in any distribution by the Exchange; • Permit holders (or an executive officer of a Permit holder) would be eligible to run for an at-large director position and a Nominating Committee position; • Permit holders would have to be registered broker-dealers; • Permits would not be transferable; and • All Permits would expire every October and would be eligible for renewal. If there are fewer available CBSX Permits than qualified applicants, the Exchange will determine which of the applicants to approve by lot. Applicants that are affiliated will be deemed one applicant in cases where there are fewer available CBSX Permits than qualified applicants. A Permit holder and its associated persons must comply with and be subject to CBOE Rules to the same extent that Exchange members and their associated persons are obligated to comply with and are subject to Exchange Rules. A Permit holder and its associated persons shall also be subject to the disciplinary, appeals, and arbitration jurisdiction and rules of the Exchange and entitled to the procedural rights under those rules to the same extent that Exchange members and their associated persons are subject to such jurisdiction and rules and entitled to such procedural rights. III. Discussion The Commission finds that the Exchange's proposal relating to CBSX Permits is consistent with Section 6(b)(3) of the Act, 4 which requires that the rules of the exchange assure a fair representation of its members in the selection of its directors and administration of its affairs and provide that one or more directors shall be representative of issuers and investors and not be associated with a member of the exchange, broker, or dealer. The Commission notes that, for purposes of the Act, Permit holders would be considered members of CBOE. Permit holders would be eligible to be nominated for an at-large position on CBOE's Board of Directors and to serve on the Exchange's Nominating Committee and would have the same petition and voting rights as CBOE members except for matters relating to Exchange ownership (specifically, matters relating to demutualization, mergers, consolidations, dissolution, liquidation, transfer, or conversion of assets of the Exchange), and except for matters relating to the Chicago Board of Trade exercise right. 5 4 15 U.S.C. 78f(b)(3). 5 Further, the Exchange has represented that Permit holders would be eligible to sit on disciplinary panels and on any committee(s) that develop trading rules. Telephone conversation between Angelo Evangelou, Assistant General Counsel, CBOE and David Michehl, Special Counsel, Commission, Division of Market Regulation, on February 16, 2007. The Commission also finds that the Exchange's proposal relating to the Permit Program is consistent with Section 6(b)(5) of the Act, 6 which requires that the rules of the exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in 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; and not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange has imposed various requirements and limitations in connection with the issuance of CBSX Permits. In this regard, the Commission notes that although the number of Permits to be issued is limited to a maximum of 100 Permits, the Exchange will allocate Permits by lot if demand for them exceeds 100 Permits. 7 6 15 U.S.C. 78f(b)(5). 7 In approving this proposed rule change the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 8 that the proposed rule change (SR-CBOE-2006-107) is hereby approved. 8 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 9 9 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-3373 Filed 2-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55319; File No. SR-CHX-2007-01] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to the Use of a “SOLD” Indicator February 20, 2007. 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 January 30, 2007, the Chicago Stock Exchange, Inc. (“CHX” 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 substantially prepared by the Exchange. The CHX has filed this proposal pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b-4(f)(5) thereunder, 4 which renders it effective upon filing with the Commission. On February 20, 2007, the Exchange filed Amendment No. 1 to the proposed rule change. 5 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, 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)(5). 5 *See* Form 19b-4 dated February 20, 2007 (“Amendment No. 1”). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its rules to specify that a “SOLD” indicator must only be affixed to a trade to the extent required by applicable intermarket trade reporting plans. The text of the proposed rule change is available on the CHX's Web site at *http://www.chx.com* , the Exchange's principal office, and at the Commission's Public Reference Room. 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 CHX 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 CHX 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange's institutional brokers may execute transactions in the Exchange's Matching System or may report transactions through the Exchange's Brokerplex system. 6 Under Article 17, Rule 3(e) of the Exchange's rules, if institutional brokers use the Brokerplex system's trade reporting functionality, these brokers are required to use their best efforts to report transactions within 10 seconds after execution. A “SOLD” indicator must be affixed to the trade if this 10-second window is exceeded. 7 6 The Exchange's Brokerplex system currently can be used by CHX institutional brokers to receive and enter orders, manage their orders, route orders to the Exchange's Matching System and other destinations for execution and report executed trades. 7 A “SOLD” indicator is used, when reporting trades in Tape A and B securities, to identify trades that are being reported late ( *i.e.* , after some delay from the time of execution) and out of sequence. The Consolidated Tape Association Plan (the “CTA Plan”), which governs trade reporting in Tape A and B securities, provides that a market should “designate as ‘late’ any last sale price not collected and reported” within 90 seconds after the execution occurs. The CHX had established this 10-second time frame for affixing the “SOLD” indicator as part of its new trading model rules in the belief that the CTA Plan would be amended to contain a similar provision. At this point, however, the CTA Plan has not been amended to reflect this shorter time frame. 8 8 The CTA Plan and specifications currently provide that the indicator must be placed on trades reported more than 90 seconds after they are executed. This proposal would change the Exchange's rules to specify that the “SOLD” indicator must only be affixed to a trade to the extent that the indicator is required by an intermarket trade reporting plan, such as the CTA Plan. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act 9 in general and furthers the objectives of Section 6(b)(5) 10 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, 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. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change does not 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 solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change does not:
(1)Significantly affect the protection of investors or the public interest;
(2)impose any significant burden on competition; and
(3)have the effect of limiting the access to or availability of an existing order entry or trading system of the Exchange, the foregoing rule change has become effective immediately pursuant to Section 19(b)(3)(A)(iii) of the Act 11 and Rule 19b-4(f)(5) 12 thereunder. At any time within 60 days of the filing of such 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 the furtherance of the purposes of the Act. 13 11 15 U.S.C. 78s(b)(3)(A)(iii). 12 17 CFR 240.19b-4(f)(5). 13 For the purposes of calculating the 60-day abrogation period, the Commission considers the proposed rule change to have been filed on February 20, 2007, when Amendment No. 1 was filed. 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-CHX-2007-01 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-CHX-2007-01. 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 offices of CHX. 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-CHX-2007-01 and should be submitted on or before March 20, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-3290 Filed 2-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55323; File No. SR-NASDAQ-2007-009] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Intermarket Sweep Orders February 21, 2007. 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 February 16, 2007, the NASDAQ Stock Market LLC (“Nasdaq”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II, below, which Items have been substantially prepared by Nasdaq. Nasdaq has designated the proposed rule change as constituting a “non-controversial” rule change under 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 the Substance of the Proposed Rule Change Nasdaq is proposing to modify Rule 4759 to permit Nasdaq members to submit Intermarket Sweep Orders (“ISOs”) to Nasdaq if they have simultaneously sent an ISO (or comparable order) for the full displayed size of the top of the book of every other ITS participant displaying a better-priced quotation. The text of the proposed rule change is available at Nasdaq, the Commission's Public Reference Room, and *http://nasdaq.complinet.com.* II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for the Proposed Rule Change In its filing with the Commission, Nasdaq 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. Nasdaq 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 As part of its rollout of its new Single Book execution system, Nasdaq is preparing to launch additional features of its compliance with Regulation NMS (“Reg. NMS”). Specifically, Nasdaq is preparing to accept ISOs. Like other markets, Nasdaq is proposing to accept ISOs prior to the Trading Phase Date, currently March 5, 2007, in order to ensure a smooth transition to the Single Book System functionality for compliance with Reg. NMS. Like other markets that have received approval to accept ISOs prior to the Trading Phase Date, 5 Nasdaq seeks to amend its rules to require member organizations that send ISOs to Nasdaq prior to the Trading Phase Date of Reg. NMS to simultaneously send an ISO (or comparable order) for the full displayed size of the top of the book of every other ITS participant displaying a better-priced quotation. The proposed temporary rule is intended to mirror the requirement, which will be operative after the Trading Phase Date, that all incoming ISOs meet the requirements as described in Rule 600(b)(30) of Reg. NMS, 6 and is designed to ensure that member organizations honor better-priced quotes of other ITS participants when submitting ISOs to Nasdaq prior to the Trading Phase Date. Nasdaq expects that this temporary rule will be in effect only until the Trading Phase Date, at which time it will be deleted from its rulebook. Nasdaq represents that, during the applicability of this rule, Nasdaq will conduct surveillance to assure that its Participants are in compliance with its rules on the use of ISOs. 5 *See, e.g.* , Securities Exchange Act Release No. 55210 (January 31, 2007), 72 FR 5777 (February 7, 2007) (SR-NYSE-2007-08). Nasdaq notes that its proposed rule change is identical to the New York Stock Exchange LLC's rule change. 6 17 CFR 242.600(b)(30). In addition, Nasdaq notes that it has requested an exemption from certain provisions of the Intermarket Trading System Plan and Nasdaq Rules 4756 and 4759 to allow Nasdaq to implement the Reg. NMS compliance aspects of the Single Book rollout prior to the Trading Phase Date. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act, 7 in general, and with Section 6(b)(5) of the Act, 8 in particular, in that the proposal 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 regulating, clearing, settling, processing information with respect to, and facilitating 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. The proposed rule change is designed to permit Nasdaq to implement functionality required for compliance with Regulation NMS in an orderly fashion and to permit Nasdaq members to gain experience with that functionality prior to its full implementation. 7 15 U.S.C. 78f. 8 15 U.S.C. 78f(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq 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, as amended. 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 The proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 9 and Rule 19b-4(f)(6) thereunder 10 because the proposal 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 if consistent with the protection of investors and the public interest. 11 Nasdaq has requested that the Commission waive the 30-day operative delay and designate the proposed rule change to be operative upon filing with the Commission. The Commission hereby grants the request. 12 The Commission believes that such waiver is consistent with the protection of investors and the public interest because immediate effectiveness of the proposed rule change will assist Nasdaq in its efforts to ensure that its member organizations honor better-priced quotations of other ITS participants when they send ISOs to Nasdaq for execution and also will allow Nasdaq members to gain experience with the new ISO order type and functionality prior to its full implementation on the Trading Phase date. In addition, the Commission notes that the Nasdaq's proposal is based upon a proposed rule change recently adopted by the New York Stock Exchange LLC. 13 9 15 U.S.C. 78s(b)(3)(A). 10 17 CFR 240.19b-4(f)(6). 11 Rule 19b-4(f)(6)(iii) under the Act requires that a self-regulatory organization submit to the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. Nasdaq has satisfied the pre-filing requirement. 12 For purposes only of waiving the 30-day operative delay of the proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 13 *See supra* note 5 (citing to SR-NYSE-2007-08). 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. 14 14 *See* 15 U.S.C. 78s(b)(3)(C). 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-NASDAQ-2007-009 in 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-NASDAQ-2007-009. 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 Room. Copies of the filing also will be available for inspection and copying at the principal office of Nasdaq. 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-NASDAQ-2007-009 and should be submitted on or before March 20, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 15 15 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-3293 Filed 2-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55325; File No. SR-NASD-2007-011] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to a New NASD Trade Reporting Facility Established in Conjunction with NYSE Market, Inc. February 21, 2007. 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 February 1, 2007, the National Association of Securities Dealers, Inc. (“NASD”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared substantially by the NASD. The NASD has filed the proposal 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 NASD proposes to adopt rules relating to a new Trade Reporting Facility (the “NASD/NYSE TRF”) to be established by the NASD in conjunction with NYSE Market, Inc. (“NYSE”), 5 that will provide members with an additional mechanism for reporting trades in exchange-listed securities effected otherwise than on an exchange. The proposed NASD/NYSE TRF functionality and rules are substantially similar to the functionality and rules of the Trade Reporting Facilities established by the NASD and the Nasdaq Stock Market, Inc. (the “NASD/Nasdaq TRF”), the NASD and the National Stock Exchange, Inc. (the “NASD/NSX TRF”), and the NASD and the Boston Stock Exchange, Inc. (the “NASD/BSE TRF”) (collectively, the “Approved NASD Trade Reporting Facilities”), which were subject to notice and comment and approved by the Commission. 6 The text of the proposed rule change is available at the NASD, in the Commission's Public Reference Room, and at *http://www.nasd.com.* 5 NYSE Market, Inc. is the entity to which the New York Stock Exchange LLC, a self-regulatory organization, has delegated all non-regulatory functions involved in conducting the activities of a national securities exchange, including the trading functions, the listings functions, and market data. 6 *See* Securities Exchange Act Release Nos. 54084 (June 30, 2006), 71 FR 38935 (July 10, 2006) (order approving File No. SR-NASD-2005-087) (the “NASD/Nasdaq TRF Approval Order”); 54715 (November 6, 2006), 71 FR 66354 (November 14, 2006) (order approving File No. SR-NASD-2006-108); and 54931 (December 13, 2006), 71 FR 76409 (December 20, 2006) (order approving File No. SR-NASD-2006-115). *See also* Securities Exchange Act Release No. 54798 (November 21, 2006), 71 FR 69156 (November 29, 2006) (order approving File No. SR-NASD-2006-104) (the “Phase II Approval Order”). 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 NASD included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The NASD has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The proposed rule change would establish the new NASD/NYSE TRF on substantially the same terms as the Approved NASD Trade Reporting Facilities. The NASD/NYSE TRF will provide members with an additional mechanism, which has been developed by the NYSE, for reporting locked-in transactions in exchange-listed securities executed otherwise than on an exchange. Members will match and/or execute orders internally or through proprietary systems and submit these trades to the NASD/NYSE TRF with the appropriate information and modifiers. All trades submitted to the NASD/NYSE TRF must be locked-in prior to entry into the system and the NASD/NYSE TRF will have no trade comparison functionality. Participants wishing to report to the NASD/NYSE TRF on behalf of another NASD member may do so only pursuant to a valid give-up agreement, as specified in the proposed rules. The NASD/NYSE TRF will report the trades to the appropriate exclusive securities information processor (“SIP”). 7 As with trades reported to the Approved NASD Trade Reporting Facilities, NASD/NYSE TRF transactions disseminated to the media will include a modifier indicating the source of such transactions that would distinguish them from transactions executed on or through the NYSE or another NASD Trade Reporting Facility. In addition, the NASD/NYSE TRF will provide the NASD with a real-time copy of each trade report for regulatory review purposes. Unlike the Approved NASD Trade Reporting Facilities, the NASD/NYSE TRF will not at this time submit transactions to clearing. 7 The NASD/NYSE TRF will have controls in place to ensure that transactions that are reported to the NASD/NYSE TRF, but that are priced significantly away from the current market, will not be submitted to the SIP. The NASD represents that this is consistent with current practice, in that neither the NASD's Alternative Display Facility nor the Approved NASD Trade Reporting Facilities currently submit such trades to the SIP. According to the NASD, this practice is designed to preserve the integrity of the tape. Like the Approved NASD Trade Reporting Facilities, the NASD/NYSE TRF will be a facility of the NASD, subject to regulation by the NASD and the NASD's registration as a national securities association. It will not be a service “for the purpose of effecting or reporting a transaction” on the NYSE; rather, it will be a service for the purpose of reporting over-the-counter (“OTC”) transactions in exchange-listed securities to the NASD. 8 Thus, members that meet all applicable requirements will have the option of reporting transactions in exchange-listed securities executed otherwise than on an exchange to the NASD/NYSE TRF, one of the Approved NASD Trade Reporting Facilities, the NASD's Alternative Display Facility (“ADF”), 9 or the NASD's Intermarket Trading System/Computer Assisted Execution System (“NASD ITS/CAES System”). 10 8 *See* NASD/Nasdaq TRF Approval Order, *supra* note 6. 9 The Commission approved a proposed rule change that expanded the ADF's functionality to all exchange-listed securities. *See* Securities Exchange Act Release No. 54537 (September 28, 2006), 71 FR 59173 (October 6, 2006) (order approving File No. SR-NASD-2006-091). 10 As part of File No. SR-NASD-2006-104, the NASD proposed rule changes providing for the operation of the NASD ITS/CAES System, which includes the ability to report OTC transactions in non-Nasdaq exchange-listed securities. *See* Phase II Approval Order, *supra* note 6. The NASD represents that it will have an integrated audit trail of all TRF, ADF, and ITS/CAES System transactions, as applicable in a particular security, and will have integrated surveillance capabilities. The NASD expects that comprehensive audit trail and surveillance integration on an automated basis will be completed by the end of the first quarter of 2007. Prior to that time, the NASD represents that its staff will be able to create an integrated audit trail on a manual basis as needed for regulatory purposes. The NYSE has developed the system that participants will use to access the NASD/NYSE TRF. Technical specifications to connect to the NASD/NYSE TRF system are available upon request to NASD and will be accessible through NASD's web site at a later date. NASD/NYSE TRF Limited Liability Company Agreement The NASD and the NYSE propose to enter into a Limited Liability Company Agreement of the NASD/NYSE Trade Reporting Facility LLC (“the NASD/NYSE LLC Agreement”). The terms of the NASD/NYSE LLC Agreement are substantially similar to the terms of the LLC agreements relating to the Approved NASD Trade Reporting Facilities. The NASD will have sole regulatory responsibility for the NASD/NYSE TRF, while the NYSE agrees to pay the cost of regulation and will provide systems to enable members to report trades to the NASD/NYSE TRF. The NYSE will be entitled to the profits and losses, if any, derived from the operation of the NASD/NYSE TRF. The provisions of the NASD/NYSE LLC Agreement regarding the management of the NASD/NYSE TRF, and the respective rights and responsibilities of the NASD, the “SRO Member,” and the NYSE, the “Business Member,” are identical to the terms of the LLC agreements relating to the Approved NASD Trade Reporting Facilities. The termination provisions of the NASD/NYSE LLC Agreement are identical to the termination provisions of the LLC agreements relating to the NASD/NSX TRF and the NASD/BSE TRF. In the event of termination of the NASD/NYSE TRF arrangement, the NASD represents that it will be able to fulfill all of its regulatory obligations with respect to OTC trade reporting through its other facilities. The NASD/NYSE LLC Agreement includes a provision relating to Capital Accounts that is not included in the LLC Agreements relating to the Approved NASD Trade Reporting Facilities. This provision was added for tax purposes only. NASD/NYSE Trade Reporting Facility Rules Members will report locked-in trades in exchange-listed securities effected otherwise than on an exchange to the NASD/NYSE TRF pursuant to NASD rules. As such, the NASD is proposing the new NASD Rule 4000E and Rule 6000E Series relating to the use and operation of the NASD/NYSE TRF. The proposed rules are substantially similar to the rules approved by the Commission relating to the Approved NASD Trade Reporting Facilities. 11 Discussed below are the differences between the proposed rules and the rules that the Commission has approved for one or more of the Approved NASD Trade Reporting Facilities. 12 11 *See* the NASD Rule 4000 and Rule 6100 Series relating to the NASD/Nasdaq TRF; the NASD Rule 4000C and 6000C Series relating to the NASD/NSX TRF; and the NASD Rule 4000D and 6000D Series relating to the NASD/BSE TRF. 12 The NASD will submit a separate filing proposing amendments to the transaction reporting rules relating to the NASD/NYSE TRF consistent with the new requirements of Regulation NMS. The NASD intends that such amendments will be substantially similar to the amendments the NASD proposed for the NASD/Nasdaq TRF and the ADF in File Nos. SR-NASD-2007-002 and SR-NASD-2007-001, respectively. *See* Securities Exchange Act Release Nos. 55101 (January 12, 2007), 72 FR 2568 (January 19, 2007) (notice of filing and immediate effectiveness of File No. SR-NASD-2007-002); and 55088 (January 11, 2007), 72 FR 2573 (January 19, 2007) (notice of filing and immediate effectiveness of File No. SR-NASD-2007-001). First, similar to the NASD/BSE TRF, participants will be able to use three-party reports for reporting trades to the NASD/NYSE TRF. However, pursuant to proposed NASD Rule 4632E(d), Reporting ECNs, as defined in proposed NASD Rule 6110E, are required to use the three-party trade report when submitting trades to the NASD/NYSE TRF. The NASD/BSE TRF rules permit, but do not require, Reporting ECNs to use three-party trade reports. Second, unlike the Approved NASD Trade Reporting Facilities, the NASD/NYSE TRF will not submit any trades to clearing. Pursuant to proposed NASD Rules 6130E(a) and 6140E, where appropriate, participants must have a valid Qualified Service Representative (“QSR”) agreement with the National Securities Clearing Corporation or similar arrangement to clear trades submitted to the NASD/NYSE TRF ( *e.g.* , trades with customers generally do not need to be sent to clearing). Accordingly, references to “clearing only” reports that appear in the rules relating to the Approved NASD Trade Reporting Facilities have been omitted from the proposed rules ( *see* proposed NASD Rules 4632E(e)(3)(B) and 6130E(f)). Additionally, proposed NASD Rule 6130E(a) provides that the NASD/NYSE TRF will accept trades reported as other than regular way settlement ( *i.e.* , Cash, Next-Day, Seller's Option); however, the NASD/NYSE TRF will not compare or submit these trades to clearing. The NASD notes that the proposed rule change does not include any proposed rules relating to fees, assessments, and credits specifically related to the NASD/NYSE TRF. Fees, assessments, and credits, if any, with respect to the NASD/NYSE TRF will be the subject of a future rule filing with the Commission. The NASD has filed the proposed rule change for immediate effectiveness. The NASD proposes that the operative date of the proposed rule change will be the date upon which the NASD/NYSE TRF commences operation, which is currently anticipated to be in the first quarter of 2007. 13 The NASD will provide notice of that date upon successful completion of system testing and certification. 13 As noted below, a proposed rule change filed pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder does not become operative for 30 days from the date on which the proposal was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. The NASD has not asked the Commission to waive the 30-day operative delay for the proposal. Accordingly, the proposal will become operative 30 days from the date on which it was filed. 2. Statutory Basis The proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act, 14 which requires, among other things, that NASD rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. The NASD believes that establishment of the NASD/NYSE TRF is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets because it will provide members with another mechanism to report transactions in exchange-listed securities effected otherwise than on an exchange. 14 15 U.S.C. 78o-3(b)(6). B. Self-Regulatory Organization's Statement on Burden on Competition The proposed rule change will not 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 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 if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 15 and Rule 19b-4(f)(6) thereunder. 16 As required by Rule 19b-4(f)(6)(iii), 17 the NASD provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change. 15 15 U.S.C. 78s(b)(3)(A). 16 17 CFR 240.19b-4(f)(6). 17 17 CFR 240.19b-4(f)(6)(iii). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-NASD-2007-011 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-NASD-2007-011. 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 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-2007-011 and should be submitted on or before March 20, 2007. 18 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 18 Florence E. Harmon, Deputy Secretary. [FR Doc. E7-3295 Filed 2-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55315; File No. SR-NSCC-2006-19] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify Its Fee Schedule February 20, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on December 29, 2006, National Securities Clearing Corporation (“NSCC”) 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 primarily by NSCC. NSCC filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 2 whereby the proposal was 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 15 U.S.C. 78s(b)(3)(A)(ii). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change revises NSCC's fee schedule for certain services provided by NSCC. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NSCC 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. NSCC has prepared summaries, set forth in sections (A), (B), and
(C)below, of the most significant aspects of such statements. 3 3 The Commission has modified parts of these statements.
(A)Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Pursuant to the proposed rule change, NSCC is reducing fees in Continuous Net Settlement Services, Automated Customer Account Transfer Services (ACATS), and Mutual Fund Networking to align the fees with NSCC's costs of providing services. In addition, NSCC is introducing new fees for dividend and interest payment processing and related research, which should help to standardize and simplify fees between NSCC and DTC. Additionally, NSCC is introducing a new fee for CNS fails to deliver to encourage members to address aged fails. The revised fee schedule was filed as an attachment to the proposed rule change and may be found on NSCC's Web site at *http://www.nscc.com.* Except as otherwise noted on Exhibit 5, the proposed fee changes became effective on January 2, 2007. The proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder because it updates NSCC's fee schedule. As such, it provides for the equitable allocation of fees among its participants.
(B)Self-Regulatory Organization's Statement on Burden on Competition NSCC does not believe that the proposed rule change will have any impact or impose any burden on competition.
(C)Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not yet been solicited or received. NSCC will notify the Commission of any written comments received by NSCC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change changes fees charged clearing members by NSCC, it has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 4 and Rule 19b-4(f)(2) 5 thereunder. At any time within sixty 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. 4 15 U.S.C. 78s(b)(3)(A)(ii). 5 17 CFR 240.19b-4(f)(2). 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-NSCC-2006-19 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-NSCC-2006-19. 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 Section, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of NSCC and on NSCC's Web site at *http://www.nscc.com.* 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-NSCC-2006-19 and should be submitted on or before March 20, 2007. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 6 6 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-3288 Filed 2-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55314; File No. SR-NYSE-2007-17] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Provide That There Be No Initial Listing Fee Payable for Any Equity Security, Structured Product or Closed-End Management Investment Company That Transfers From Another National Securities Exchange February 20, 2007. 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 February 15, 2007, the New York Stock Exchange LLC (“Exchange” or “NYSE”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Exchange has designated this proposal as non-controversial under Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposed rule change 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)(iii). 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 Exchange proposes to amend Section 902.02 of its Listed Company Manual (the “Manual”) to provide that there shall be no initial listing fee payable in connection with the transfer of any equity securities, structured product, or closed-end management investment company listed on another national securities exchange to the Exchange. This fee waiver will not be applicable to the transfer of any class of securities if the issuer's primary class of common stock remains listed on another national securities exchange. The text of the proposed rule change is available on the Exchange's Web site ( *http://www.nyse.com* ), at the Exchange's Office of the Secretary, and at the Commission's Public Reference Room. 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 NYSE 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 NYSE 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 Section 902.02 of the Manual to provide that there shall be no initial listing fee applicable to the transfer of any equity securities, structured product (defined as securities listed under Sections 703.18, 703.19 and 703.21) or closed-end management investment company listed on another national securities exchange. This fee waiver will not be applicable to the transfer of any class of securities if the issuer's primary class of common stock remains listed on another national securities exchange. Section 902.03 of the Manual currently provides that issuers transferring the listing of their primary class of common shares from any other national securities exchange are not required in connection with such transfer to pay
(i)initial listing fees or
(ii)a one-time special charge of $37,500 payable in connection with the listing of any new class of common shares. In addition, Section 902.03 provides that issuers transferring the listing of their primary class of common shares from NYSE Arca to the Exchange are not required to pay Annual Fees with respect to that primary class of common shares for the remainder of the calendar year in which the transfer occurs. The proposed rule change will move this text from Section 902.03 to Section 902.02 and extend the application of waivers of the initial listing fee and one-time special charge to any other classes of equity securities ( *i.e.* , preferred stock, warrants, units including equity securities, and additional classes of common stock) transferred from another national securities exchange, as well as to transfers of closed-end management investment companies and structured products. Issuers of securities that qualify for the proposed waiver of initial listing fees will be subject to the same level of annual fees and listing of additional shares fees as other NYSE issuers. The proposed rule change will not affect the Exchange's commitment of resources to its regulatory oversight of the listing process or its regulatory programs. Specifically, companies that benefit from the waiver will be reviewed for compliance with Exchange listing standards in the same manner as any other company that applies to be listed on the Exchange. The Exchange will conduct a full and independent review of each issuer's compliance with the Exchange's listing standards. The Exchange believes that the elimination of such fees in the case of securities transferring from other national securities exchanges is justified on several grounds. An issuer that already paid initial listing fees to another national securities exchange when it became a publicly traded company is reluctant to pay a second initial listing fee to another listing venue, even if it concludes that the Exchange offers the issuer and its investors superior services and market quality. Even if an issuer concludes that the Exchange would provide a superior market for its stock, the benefits of the transfer must currently be weighed against the cost of initial inclusion. Since the expected benefits of the transfer would be diffused among the issuers' investors and realized over time, but the initial listing fees must be paid by the issuer immediately, the Exchange is concerned that issuers that stand to benefit may nevertheless opt to forgo a transfer. As such, the Exchange believes that assessing the initial fees against issuers that have already paid fees to list on another market imposes a burden on the competition between exchange markets and markets other than exchange markets, a competition that the Exchange believes is one of the central goals of the national market system. This concern is particularly great in light of the fact that the Commission has approved the waiver of initial listing fees by Nasdaq with respect to the listing of any security being transferred from another national securities exchange. 5 5 *See* Securities Exchange Act Release No. 51004 (January 10, 1005), 70 FR 2917 (January 18, 2005) (order approving SR-NASD-2004-140). The Exchange understands that the effect of this proposed rule change will be to impose a lower level of listing fees on issuers that transfer from another national securities exchange than on some other issuers. In light of the fact that the Exchange will collect the same level of annual fees and listing of additional shares fees from such issuers, however, the Exchange believes that the difference does not constitute an inequitable allocation of fees. In light of a transferring issuer's prior payment to another market and the generally lower burdens associated with reviewing a transferring issuer's eligibility, the Exchange believes that eliminating initial fees for transferring issuers is entirely consistent with an equitable allocation of listing fees. The Exchange does not expect the financial impact of this proposed rule change to be material, either in terms of increased levels of annual fees from transferring issuers or in terms of diminished initial listing fee revenues. Quite simply, even with the proposed rule change in place, the Exchange understands that a change in listing venue is a major step for an issuer, and therefore the Exchange does not expect that the number of issuers that transfer to the NYSE in a given time frame will be sufficient to have a material effect on financial resources. 2. Statutory Basis The bases under the Act for this proposed rule change are:
(i)The requirement under Section 6(b)(4) 6 that an exchange have rules that provide for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities, and
(ii)the requirement under Section 6(b)(5) 7 of the Act that an exchange have rules that are designed to remove impediments to and perfect the mechanism of a free and open market and a national market system, and are not designed to permit unfair discrimination between issuers. In light of a transferring issuer's prior payment to another market, the Exchange believes that the proposed fee waiver does not render the allocation of its listing fees inequitable or unfairly discriminatory. The Exchange believes that the fee waiver will increase competition among listing markets and will remove a competitive disadvantage the Exchange currently has vis-à-vis Nasdaq, and is therefore designed to perfect the mechanism of a free and open market. 6 15 U.S.C. 78f(b)(4). 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 Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 8 and subparagraph (f)(6) of Rule 19b-4 thereunder. 9 Because the Exchange has designated the foregoing proposed rule change as one that:
(i)does not significantly affect the protection of investors or the public interest;
(ii)does not impose any significant burden on competition; and
(iii)does not become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6)(iii) thereunder. 10 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b-4(f)(6). 10 The Exchange provided written notice to the Commission of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to filing, as required by Rule 19b-4(f)(6)(iii). The Exchange requests that the Commission waive the 30-day operative delay specified in Rule 19b-4(f)(6)(iii). 11 The Exchange believes that the proposed amendment does not affect investors as it simply waives a fee that is applicable to companies listing on the Exchange. Moreover, Nasdaq has already instituted such a waiver and the Exchange is at a competitive disadvantage as long as Nasdaq can list transferring companies without the payment of original listing fees and the Exchange cannot. Therefore, the Exchange believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. 11 17 CFR 240.19b-4(f)(6)(iii). The Commission has determined to waive the 30-day delay and allow the proposed rule change to become operative immediately. 12 The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. The proposed rule is substantially similar to provisions in Nasdaq's Rules 4510(a) and 4520(a), which were previously approved by the Commission. 13 12 For purposes only of waiving the operative delay of this proposal, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 13 *See supra* note 5. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov.* Please include File No. SR-NYSE-2007-17 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-NYSE-2007-17. 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 Exchange. 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-NYSE-2007-17 and should be submitted on or before March 20, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-3287 Filed 2-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55316; File No. SR-NYSE-2007-14] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Rule 70 (Bids and Offers) February 20, 2007. 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 February 7, 2007, the New York Stock Exchange LLC (“NYSE” 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 substantially prepared by the self-regulatory organization. On February 16, 2007, the Exchange filed Amendment No. 1 to the proposed rule change. NYSE filed the proposed rule change pursuant to Section 19(b)(3) of the Act 3 and Rule 19b-4(f)(6) thereunder, 4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, 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 Exchange is proposing to amend Exchange Rule 70.30 which sets forth the definition of Crowd. The text of the proposed rule change is available on the Exchange's Web site ( *http://www.nyse.com* ), at the Exchange's Office of the Secretary, and at the Commission's Public Reference Room. 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 self-regulatory organization included statements concerning the purpose of and basis for the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization 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's Hybrid Market SM (“Hybrid Market”) integrates the auction market with automated trading. Essential to the auction market is the interaction among members on the Floor and between Floor brokers and orders in the Display Book ® System that creates opportunities for price improvement, provides information about changing market conditions and serves as a catalyst to trading. Exchange Rule 70.30 5 defines a Crowd as “ * * * the specific identifiable areas on the Floor where Floor brokers generally are able to see and hear the business conducted at each post/panel within the Crowd.” Each designated area served to delineate the boundaries of the Crowd. In order to identify the specific boundaries of the Crowd, the Exchange divided each trading room of the Floor into specific areas which were identified on the Floor by colored tiles. 5 *See* Securities Exchange Act Release No. 54427 (September 12, 2006), 71 FR 54862 (September 19, 2006) (SR-NYSE-2006-58). Exchange Rule 70.30 further requires that Floor brokers be in the Crowd in order to represent orders that the Floor broker has in his or her agency interest files ( *i.e.* , in order to “e-Quote”). Pursuant to Rule 70.30 a Floor broker may only have agency interest files or e-Quote in one Crowd at a time. As the Exchange continues its implementation of the Hybrid Market, it has gained experience operating in the Hybrid Market environment. Based on this experience, the Exchange seeks to amend the definition of Crowd in order to better facilitate the critical interaction among members on the Floor. In practice, the current definition of the Crowd proved difficult and confusing. Individuals that were unable to easily discern Crowd boundaries and those with color blindness must rely on charts that list the post/panels that are designated areas that make up the specified Crowd, adding a level of inefficiency to their ability to trade. In addition, as announced on October 31, 2006, 6 the Exchange is in the process of consolidating its trading operations from five rooms to four over an 18-month period. The trading floor consolidation plan calls for the closing of the trading room that currently occupies 30 Broad Street and the relocation of the specialist firm and the 33 floor brokerage firms from that facility to the Exchange's other trading rooms. 6 NYSE Announces Floor Consolidation Plan, NYSE Group Newsletter, October 31, 2006, available at *http://www.nyse.com/about/publication/1164799108193.html.* Given the practical difficulties with the current definition of a Crowd and the current consolidation of the Floor, the Exchange proposes to amend the definition of the Crowd in order to reflect more accurately the areas which most efficiently facilitate the beneficial interaction among the members on the Floor. The Exchange believes that this is best reflected in defining the Crowd as encompassing the trading Floor in each remaining trading room. The Exchange will divide the Floor into three trading zones. Each trading zone will represent a specific identifiable Crowd. As a result, the current Main Room and Garage will each constitute two separate Crowds. The third Crowd will include the current Blue Room and Extended Blue Room. As is the case today, once in a Crowd, a Floor broker is able to e-Quote in all securities located in that Crowd. If the Floor broker leaves one Crowd in order to work in another, the Floor broker is required to withdraw his or her agency interest from the Crowd he or she is leaving. However, a Floor Broker may obtain “market looks” in a securities located in other Crowds without canceling his or her e-Quotes. The Exchange intends that the proposed rule change will be operative on February 20, 2007. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act, 7 in general, and furthers the objectives of Section 6(b)(5) of the Act 8 in particular in that 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. 7 15 U.S.C. 78f(b). 8 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 The Exchange has neither solicited nor received written comments on the proposed rule change. 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)by its terms, become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the Act 9 and Rule 19b-4(f)(6) thereunder. 10 9 15 U.S.C. 78s(b)(3)(A). 10 17 CFR 240.19b-4(f)(6). 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. 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 Exchange has requested that the Commission waive the five-day pre-filing notice requirement and the 30-day operative delay. The Commission believes that waiver of the five-day pre-filing notice requirement and the 30-day operative delay is consistent with the protection of investors and the public interest. Specifically, the Commission believes that the proposal could more accurately reflect the areas which most efficiently facilitate the beneficial interaction among the Floor brokers and allow the exchange to implement the proposal immediately. 12 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such proposed 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. 13 11 17 CFR 240.19b-4(f)(6)(iii). 12 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 13 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C), the Commission considers the period to commence on February 16, 2007, the date NYSE filed Amendment No. 1 to the proposed rule change. 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-NYSE-2007-14 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-NYSE-2007-14. 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 Exchange. 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-NYSE-2007-14 and should be submitted on or before March 20, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-3289 Filed 2-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55312; File No. SR-NYSEArca-2007-16] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Size- Quote Pilot Program February 16, 2007. 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 February 14, 2007, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”), filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items substantially have been prepared substantially by NYSE Arca. NYSE Arca has designated the proposed rule change as one constituting a non-controversial rule change under Section 19(b)(3)(A)(iii) 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)(iii). 4 17 CFR 240.19b-4(f)(6). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NYSE Arca, Inc. is proposing to amend its rules in order to restore certain rule text to Rule 6.47 regarding the Size Quote Pilot Program (“Pilot Program”) and to extend the Pilot Program, for a one-year period ending February 15, 2008. The text of the proposed rule change is available at ( *http://www.nyse.com* ), NYSE Arca, and the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NYSE Arca 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. NYSE Arca 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 purpose of this proposal is to restore rule text that was inadvertently deleted from NYSEArca Rule 6.47(f) and to extend, for a one year period, the Exchange's Size Quote Pilot Program. The Pilot Program was initially established when the Exchange filed SR-PCX-2005-35. 5 The Pilot Program was extended when the Exchange filed PCX-06-09, 6 and was set to expire on February 15, 2007. 5 See Securities Exchange Act Release No. 51576 (April 19, 2005), 70 FR 21488 (April 26, 2005). 6 *See* Securities Exchange Act Release No. 53315 (February 15, 2006), 71 FR 9406 (February 23, 2006). The rule text relating to the Size- Quote Pilot Program was mistakenly deleted from the Rules of NYSE Arca when the Exchange proposed, and subsequently received approval for SR-NYSEArca 2006-13. 7 Due to an oversight on behalf of Exchange staff, certain sections of established rule text, that the Exchange intended to keep in the Rules, were inadvertently deleted by the filing. The Exchange now proposes to restore the rule text covering the Pilot Program. 7 *See* Securities Exchange Act Release No. 54238 (July 28, 2006), 71 FR 44758 (August 7, 2006) (SR-NYSEArca-2006-13) (approval of OX trading rules). *See also* telephone conversation between Glenn Gsell, Director, NYSE Arca, Ira Brandriss, Special Counsel, Division of Market Regulation (“Division”), Commission, and Jennifer Dodd, Special Counsel, Division, Commission, on February 15, 2007. The Exchange has represented that at the completion of the Pilot Program, NYSE Arca would provide to the Commission a report summarizing the effectiveness of the Size Quote program. While the Exchange believes that the Size Quote Mechanism can be an effective tool for Floor Brokers to use while executing large size orders in open outcry, the mechanism has not been used frequently enough to supply sufficient evidence to evaluate the effectiveness of the Pilot Program. In order to allow for additional time to compile sufficient evidence as to the effectiveness of the Pilot Program, NYSE Arca proposes to extend the Pilot Program for an additional one-year period ending February 15, 2008. At the end of the extended Pilot Program, the Exchange believes it will be able supply the Commission with a report summarizing the effectiveness of the program. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, 8 in general, and furthers the objectives of Section 6(b)(5), 9 in particular, in that it is designed to facilitate transactions in securities, to promote just and equitable principles of trade, and to protect investors and the public interest. 8 15 U.S.C. 78f. 9 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 The Exchange has neither solicited nor received written comments on the proposed rule change. 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 10 and Rule 19b-4(f)(6) thereunder. 11 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6) also requires the self-regulatory organization to give the Commission notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. NYSE Arca has satisfied the five-day pre-filing requirement. 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. NYSE Arca has requested that the Commission waive the 30-day operative delay. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest because the proposal raises no new regulatory issues and will merely allow the Exchange more time to assess the effectiveness of the Pilot Program. Accordingly, the Commission designates the proposal to be effective and operative upon filing with the Commission. 12 12 For purposes only of waiving the 30-day operative delay of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 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-NYSEArca-2007-16 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-NYSEArca-2007-16. 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 NYSE Arca. 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-NYSEArca-2007-16 and should be submitted on or before March 20, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-3286 Filed 2-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55320; File No. SR-NYSEArca-2007-15] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change To Trade Shares of the CurrencyShares SM Japanese Yen Trust Pursuant to Unlisted Trading Privileges February 21, 2007. 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 February 12, 2007, NYSE Arca, Inc. (the “Exchange”), through its wholly-owned subsidiary, NYSE Arca Equities, Inc. (“NYSE Arca Equities”), filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. This Order provides notice of the proposed rule change and approves the proposed rule change on an accelerated basis. 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, through NYSE Arca Equities, proposes to trade shares (the “Shares”) of the CurrencyShares SM Japanese Yen Trust (the “Trust”) pursuant to unlisted trading privileges (“UTP”). The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and *http://www.nyse.com.* 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 Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The Exchange 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 Pursuant to NYSE Arca Equities Rule 8.202, which permits the listing and trading of “Currency Trust Shares,” 3 the Exchange proposes to trade pursuant to UTP the Shares of the Trust. The Commission has recently approved the listing and trading of the Shares on the New York Stock Exchange LLC (“NYSE”). 4 The Exchange currently trades Shares of the Euro Currency Trust, CurrencyShares SM Australian Dollar Trust, CurrencyShares SM British Pound Sterling Trust, CurrencyShares SM Canadian Dollar Trust, CurrencyShares SM Mexican Peso Trust, CurrencyShares SM Swedish Krona Trust, and CurrencyShares SM Swiss Franc Trust (the “CurrencyShares Trusts”). 5 3 Currency Trust Shares are securities issued by a trust that represent investors' discrete, identifiable, and undivided beneficial ownership interest in the non-U.S. currency deposited into the trust. *See* Securities Exchange Act Release No. 53253 (February 8, 2006), 71 FR 8029 (February 15, 2006) (SR-PCX-2005-123) (granting the Exchange accelerated approval of its proposed listing and trading standards for Currency Trust Shares and approving the UTP trading of shares of the Euro Currency Trust). 4 *See* Securities Exchange Act Release No. 55268 (February 9, 2007), 72 FR 7793 (February 20, 2007) (SR-NYSE-2007-03) (“NYSE Order”). 5 *See supra* note 3. *See also* Securities Exchange Act Release No. 54043 (June 26, 2006), 71 FR 37967, (July 3, 2006) (SR-NYSEArca-2006-26) (granting accelerated approval for the Exchange to trade shares of six of the CurrencyShares Trusts pursuant to UTP); Securities Exchange Act Release No. 54020 (June 20, 2006), 71 FR 36579 (June 27, 2006) (SR-NYSE-2006-35) (granting approval for the original listing and trading of six of the CurrencyShares Trusts on NYSE). The Shares issued by the Trust represent units of fractional, undivided, and beneficial interests in, and ownership of, the Trust. The Exchange states that the investment objective of the Trust is for the Shares to reflect the price of the Japanese Yen. A detailed discussion of the Trust, its assets and expenses, the creation and redemption of the Shares, the valuation of the Japanese Yen, the calculation methodology of the IIV (as defined herein), and distributions, among others, can be found in the NYSE Order. The Trust's Web site ( *http://www.currencyshares.com* ) provides information on:
(1)The spot price for the Japanese Yen, including the bid and offer and the midpoint between the bid and offer for the Japanese Yen spot price;
(2)an intraday indicative value (“IIV”) per Share, updated at least every 15 seconds; 6
(3)a delayed indicative value (subject to a 20-minute delay), used for calculating premium/discount information;
(4)premium/discount information, calculated on a 20-minute delayed basis;
(5)the net asset value (“NAV”) of the Trust, calculated each business day;
(6)accrued interest per Share;
(7)the daily Federal Reserve Bank of New York Noon Buying Rate;
(8)the Basket Amount; 7 and
(9)the last sale price of the Shares as traded in the U.S. market, subject to a 20-minute delay. The Trust's Web site disseminates the foreign currency spot price for the Japanese Yen and the IIV per Share at least every 15 seconds during NYSE Arca Marketplace's opening and late trading sessions, as well as during its core trading session. 8 6 The IIV is analogous to the intraday optimized portfolio value (sometimes referred to as the IOPV) and the indicative portfolio value associated with the trading of exchange-traded funds. 7 The Basket Amount is the amount required to be deposited for the purchase of a Basket of Shares. A Basket of Shares consists of a block of 50,000 Shares. 8 Pursuant to NYSE Arca Equities Rule 7.34(a), the NYSE Arca Marketplace trading hours for exchange-traded funds are as follows:
(1)4 a.m. to 9:30 a.m. Eastern Time (“ET”) (opening trading session);
(2)9:30 a.m. to 4:15 p.m. ET (core trading session); and
(3)4:15 p.m. to 8 p.m. ET (late trading session). The Exchange states that the currency spot price is available on the Trust's Web site without interruption 24 hours a day, seven days a week. The Exchange states that currently, the Consolidated Tape Plan does not provide for dissemination of the spot price of a foreign currency over the Consolidated Tape System (“CTS”). However, the last sale price for the Shares is disseminated through the CTS, as is the case for all equity securities traded on the Exchange (including exchange-traded funds). Currency price and market information on the Japanese Yen and other foreign currencies is available on a 24-hour basis through public Web sites, major market data vendors, and professional and subscription services. Foreign currency futures and options prices, including information on current and past trading sessions, are also available on a real-time and delayed basis from various financial information sources. In addition, the Exchange states that current foreign currency spot prices are also generally available with bid/ask spreads from foreign currency dealers. The Exchange represents that it will cease trading the Shares if the original listing market stops trading the Shares due a regulatory halt or such listing market delists the Shares. 9 UTP trading in the Shares would be governed by the trading halt provisions of NYSE Arca Equities Rule 7.34 relating to temporary interruptions in the calculation or wide dissemination of the IIV or the value (spot price) of the underlying currency. 10 Additionally, the Exchange may cease trading the Shares if such other event shall occur or condition exists, which, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable. 11 9 E-mail from Timothy J. Malinowski, Director, NYSE Group, Inc., to Edward Cho, Special Counsel, Division of Market Regulation, Commission, dated February 20, 2007 (clarifying when the Exchange will halt trading of the Shares). 10 The Exchange represents that the provisions of NYSE Arca Equities Rule 7.34(a), which address, in part, interruptions in the calculation or wide dissemination of the value of an underlying index, shall also apply to interruptions in the calculation or wide dissemination of the value (spot price) of an underlying currency. For purposes of trading the Shares pursuant to UTP, the applicable value would be the Japanese Yen spot price. 11 *See, e.g.* , NYSE Arca Equities Rule 7.12 (Trading Halts Due to Extraordinary Market Volatility). The Exchange states that the Shares would trade as equity securities, and therefore, the Exchange's rules governing the trading of equity securities would govern the trading of such Shares. The Shares would trade on the NYSE Arca Marketplace from 4 a.m. ET until 8 p.m. ET. The Exchange represents that its equity trading rules would govern transactions in the Shares during all trading sessions. The Shares would be deemed “Eligible Listed Securities,” as defined in NYSE Arca Equities Rule 7.55, for purposes of the Intermarket Trading System Plan, and therefore would be subject to the trade- through restrictions of NYSE Arca Equities Rule 7.56. The Exchange intends to utilize its existing surveillance procedures applicable to derivative products to monitor trading in the Shares. The Exchange represents that these procedures are adequate to properly monitor Exchange trading of the Shares in all trading sessions and to deter and detect violations of Exchange rules. The Exchange is able to obtain information regarding trading in the Shares and options and futures on the Japanese Yen through proprietary or customer trades which ETP Holders 12 effect on any relevant market. In addition, the Exchange may obtain trading information via the Intermarket Surveillance Group from other exchanges who are members or affiliates thereof. The Exchange states that its general policy prohibits the distribution of material, non-public information by its employees. 13 12 An ETP Holder is a registered broker or dealer that has been issued an Equity Trading Permit
(ETP)by NYSE Arca Equities. 13 The Exchange further states that the Sponsor (Rydex Specialized Products LLC), the Trustee (The Bank of New York), the Depository (JPMorgan Chase Bank, N.A., London Branch), and the Distributor (Rydex Distributors, Inc.) are not affiliated with the Exchange or one another, with the exception that the Sponsor and Distributor are affiliated. Prior to the commencement of trading, the Exchange will inform its ETP Holders in an Information Bulletin of the special characteristics and risks associated with trading the Shares. Specifically, the Bulletin will discuss the following:
(1)The procedures for purchases and redemptions of Shares;
(2)NYSE Arca Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP Holders to learn the essential facts relating to every customer prior to trading the Shares;
(3)how information regarding the IIV and the Japanese Yen is disseminated;
(4)the requirement that ETP Holders deliver a prospectus to investors purchasing newly issued Shares prior to or concurrently with the confirmation of a transaction; and
(5)other relevant information. 2. Statutory Basis The proposal is consistent with Section 6(b) of the Act 14 in general and Section 6(b)(5) of the Act 15 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of a free and open market, and in general to protect investors and the public interest. In addition, the proposal is consistent with Rule 12f-5 under the Act 16 because the Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. 14 15 U.S.C. 78f(b). 15 15 U.S.C. 78f(b)(5). 16 17 CFR 240.12f-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 purpose of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. 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-NYSEArca-2007-15 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-NYSEArca-2007-15. 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 offices of the Exchange. 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-NYSEArca-2007-15 and should be submitted on or before March 20, 2007. IV. Commission's Findings and Order Granting Accelerated Approval of the Proposed Rule Change After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. 17 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, 18 which requires that an exchange have rules designed, among other things, to promote just and equitable principles of trade, 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. The Commission believes that this proposal should benefit investors by increasing competition among markets that trade the Shares. The Commission notes that it previously approved the original listing and trading of the Shares on NYSE. 19 17 In approving this rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 18 15 U.S.C. 78f(b)(5). 19 *See supra* note 4. In addition, the Commission finds that the proposal is consistent with Section 12(f) of the Act, 20 which permits an exchange to trade, pursuant to UTP, a security that is listed and registered on another exchange. 21 The Commission notes that it previously approved for trading pursuant to UTP on the Exchange the shares issued by the CurrencyShares Trusts, which are similar to the Shares issued by the Trust. 22 The Commission finds that the proposal is consistent with Rule 12f-5 under the Act, 23 which provides that an exchange shall not extend UTP to a security unless the exchange has in effect a rule or rules providing for transactions in the class or type of security to which the exchange extends UTP. The Exchange has represented that it meets this requirement because it deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of equity securities. 20 15 U.S.C. 78 *l* (f). 21 Section 12(a) of the Act, 15 U.S.C. 78l(a), generally prohibits a broker-dealer from trading a security on a national securities exchange unless the security is registered on that exchange pursuant to Section 12 of the Act. Section 12(f) of the Act excludes from this restriction trading in any security to which an exchange “extends UTP.” When an exchange extends UTP to a security, it allows its members to trade the security as if it were listed and registered on the exchange even though it is not so listed and registered. 22 *See supra* note 5. 23 17 CFR 240.12f-5. The Commission further believes that the proposal is consistent with Section 11A(a)(1)(C)(iii) of the Act, 24 which sets forth Congress' finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities. The last sale price of the Shares is available through CTS. Although the CTS does not provide for dissemination of the spot price of the Japanese Yen, the Trust's Web site disseminates the spot price every five to ten seconds, as well as the IIV per Share at least every 15 seconds, the NAV once daily, the Basket Amount, and the last sale price of the Shares. In addition, currency prices and market information on the Japanese Yen, including futures and options prices, are available through various major market data vendors, financial information sources, and professional and subscription services. If the listing market halts trading in the Shares, or the IIV or the value of the underlying currency is not being calculated or disseminated, the Exchange would halt trading in the Shares. 24 15 U.S.C. 78k-1(a)(1)(C)(iii). The Commission notes that, if the Shares should be delisted by the listing exchange, the Exchange would no longer have authority to trade the Shares pursuant to this Order. In support of this proposal, the Exchange has made the following representations:
(1)The Exchange's surveillance procedures are adequate to address any concerns associated with the trading of the Shares on a UTP basis.
(2)The Exchange would inform its members in an Information Bulletin of the special characteristics and risks associated with trading the Shares, including suitability recommendation requirements.
(3)The Exchange would require its members to deliver a prospectus or product description to investors purchasing Shares prior to or concurrently with a transaction in such Shares and will note this prospectus delivery requirement in the Information Bulletin. This approval order is conditioned on the Exchange's adherence to these representations. The Commission finds good cause for approving this proposal before the thirtieth day after the publication of notice thereof in the **Federal Register** . As noted above, the Commission previously approved the original listing and trading of the Shares on NYSE and the trading of shares issued by the CurrencyShares Trusts, which are similar to the Shares issued by the Trust, pursuant to UTP on the Exchange. The Commission presently is not aware of any regulatory issue that should cause it to revisit those findings or would preclude the trading of the Shares on the Exchange pursuant to UTP. Accelerating approval of this proposal should benefit investors by creating, without undue delay, additional competition in the market for such Shares. V. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 25 that the proposed rule change (SR-NYSEArca-2007-15) be, and it hereby is, approved on an accelerated basis. 25 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 26 26 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-3291 Filed 2-26-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55321; File No. SR-Phlx-2006-85] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Order Granting Accelerated Approval of Proposed Rule Change Relating To Listing Standards for Basket Linked Notes February 21, 2007. I. Introduction On December 12, 2006, the Philadelphia Stock Exchange, Inc. (“Phlx” or “Exchange”) 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 a proposal to amend Phlx Rule 803—Criteria for Listing—Tier 1, to increase the number of underlying securities that may be linked to a Basket Linked Note (“BLN”). The proposed rule change was published for comment in the **Federal Register** on January 31, 2007 for a 15-day comment period. 3 The Commission received no comments regarding the proposal. This order approves the proposed rule change on an accelerated basis. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 55173 (January 25, 2007), 72 FR 4552. II. Description of the Proposal A BLN is non-convertible debt of an issuer whose value is based, at least in part, on the performance of highly capitalized, actively traded common stock, or non-convertible preferred stock of other issuers. 4 Rule 803(k) currently permits the Exchange to list and trade BLNs linked to more than one equity security but no more than 20. 5 Phlx proposes to amend Rule 803(k) to increase the number of underlying securities that may be linked to a BLN from no more than 20 to no more than 30. 4 Phlx Rule 803(k)(3) currently requires, among other things, that each of the underlying securities linked to a BLN either:
(i)Have a minimum market capitalization of $3 billion and during the 12 months preceding listing are shown to have traded at least 2.5 million shares;
(ii)have a minimum market capitalization of $1.5 billion and during the 12 months preceding listing are shown to have traded at least 10 million shares; or
(iii)have a minimum market capitalization of $500 million and during the 12 months preceding listing are shown to have traded at least 15 million shares. 5 *See* Securities Exchange Act Release No. 43690 (December 7, 2000), 65 FR 78523 (December 15, 2000) (SR-Phlx-2000-90). III. Discussion After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange 6 and, in particular, the requirements of Section 6 of the Act. 7 Specifically, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, 8 which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, 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. 6 In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 7 15 U.S.C. 78f. 8 15 U.S.C. 78f(b)(5). The Commission believes that expanding the basket of equity securities that may be linked to a BLN may enhance competition and benefit investors and the marketplace through additional product choices and alternatives. The Commission does not believe that there would be investor protection concerns with expanding the number of equity securities that may be linked to a BLN from more than one common stock to up to thirty common stocks. The Commission notes that the proposed rule change to Phlx's listing standards for BLNs, specifically Phlx Rule 803(k), is substantially similar to the listing standards of the American Stock Exchange LLC regarding equity linked term notes, which are substantially similar investment products. 9 9 *See* Amex Company Guide Section 107B; and Securities Exchange Act Release No. 47055 (December 19, 2002), 67 FR 79669 (December 30, 2002) (SR-Amex-2002-110). The Commission finds good cause to grant accelerated approval of the proposed rule change because it will enable the Exchange to immediately consider listing and trading a BLN consistent with the rules of other national securities exchanges and does not raise any new regulatory issues. Accordingly, the Commission finds good cause for approving the proposed rule change prior to the thirtieth day after the notice is published for comment in the **Federal Register** pursuant to Section 19(b)(2) of the Act. 10 10 15 U.S.C. 78s(b)(2). IV. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 11 that the proposed rule change (SR-Phlx-2006-85) is hereby approved on an accelerated basis. 11 15 U.S.C. 78s(b)(2). 12 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 Florence E. Harmon, Deputy Secretary. [FR Doc. E7-3292 Filed 2-26-07; 8:45 am] BILLING CODE 8010-01-P SMALL BUSINESS ADMINISTRATION National Advisory Council Public Meeting The U.S. Small Business Administration
(SBA)National Advisory Council public meeting originally scheduled for Tuesday, February 27, 2007, will be cancelled and rescheduled to Wednesday, February 28, 2007 at 2 p.m. The meeting will take place using an audio/web conference system. To participate, please call our toll free conferencing service at 1-866-740-1260 and enter access code 3711001 at the prompt. The purpose of the meeting is to provide and discuss recent updates pertaining to the delivery of the Agency's programs and services. Information will be presented by the staff of the SBA, members of the council or interested others. Anyone wishing to attend or to make a presentation must contact Mina Wales in writing, phone or e-mail in order to be put on the agenda. Mina Wales, NAC Designated Federal Officer, SBA Headquarters, 409 3rd Street SW., Washington, DC 20416, phone
(202)205-8414, e-mail: *mina.wales@sba.gov.* For more information about the National Advisory Council, see our Web site at *http://www.sba.gov/nac/index.html.* Matthew Teague, Committee Management Officer. [FR Doc. E7-3268 Filed 2-26-07; 8:45 am] BILLING CODE 8025-01-P DEPARTMENT OF STATE [Public Notice 5693] Notice of Proposal To Extend the Memorandum of Understanding Between the Government of the United States of America and the Government of the Republic of Guatemala Concerning the Imposition of Import Restrictions on Archaeological Objects and Materials from the Pre-Columbian Cultures of Guatemala The Government of the Republic of Guatemala has informed the Government of the United States of its interest in an extension of the Memorandum of Understanding Between the Government of the United States of America and the Government of the Republic of Guatemala Concerning the Imposition of Import Restrictions on Archaeological Objects and Materials from the Pre-Columbian Cultures of Guatemala which entered into force on September 29, 1997, and was extended on September 29, 2002. Pursuant to the authority vested in the Assistant Secretary for Educational and Cultural Affairs, and pursuant to the requirement under 19 U.S.C. 2602(f)(1), an extension of this Memorandum of Understanding is hereby proposed. Pursuant to 19 U.S.C. 2602(f)(2), the views and recommendations of the Cultural Property Advisory Committee regarding this proposal will be requested. A copy of the Memorandum of Understanding, the designated list of restricted categories of material, and related information can be found at the following Web site: *http://exchanges.state.gov/culprop.* Dina Habib Powell, Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E7-3384 Filed 2-26-07; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF STATE [Public Notice 5694] Notice of Proposal To Extend the Memorandum of Understanding Between the Government of the United States of America and the Government of the Republic of Mali Concerning the Imposition of Import Restrictions on Archaeological Material From the Region of the Niger River Valley and the Bandiagara Escarpment (Cliff) The Government of the Republic of Mali has informed the Government of the United States of its interest in an extension of the Memorandum of Understanding between the Government of the United States of America and the Government of the Republic of Mali Concerning the Imposition of Import Restrictions on Archaeological Material from the Region of the Niger River Valley and the Bandiagara Escarpment (Cliff) which entered into force on September 19, 1997, and was extended on September 19, 2002. Pursuant to the authority vested in the Assistant Secretary for Educational and Cultural Affairs, and pursuant to the requirement under 19 U.S.C. 2602(f)(1), an extension of this Memorandum of Understanding is hereby proposed. Pursuant to 19 U.S.C. 2602(f)(2), the views and recommendations of the Cultural Property Advisory Committee regarding this proposal will be requested. A copy of this Memorandum of Understanding, the designated list of restricted categories of material, and related information can be found at the following Web site: *http://exchanges.state.gov/culprop* . Dina Habib Powell, Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E7-3377 Filed 2-26-07; 8:45 am] BILLING CODE 4710-05-P DEPARTMENT OF STATE [Public Notice 5695] Notice of Meeting of the Cultural Property Advisory Committee There will be a meeting of the Cultural Property Advisory Committee on Thursday, March 15, 2007, from approximately 8:30 a.m. to 5 p.m., and on Friday, March 16, from approximately 8:30 a.m. to 3 p.m., at the Department of State, Annex 44, Room 840, 301 4th St., SW., Washington, DC. During its meeting the Committee will review a proposal to extend the Memorandum of Understanding Between the Government of the United States of America and the Government of the Republic of Guatemala Concerning the Imposition of Import Restrictions on Archaeological Objects and Materials from the Pre-Hispanic Cultures of Guatemala, and a proposal to extend the Memorandum of Understanding Between the Government of the United States of America and the Government of the Republic of Mali Concerning the Imposition of Import Restrictions on Archaeological Material from the Region of the Niger River Valley and the Bandiagara Escarpment (Cliff). The concerned Governments have each notified the Government of the United States of America of their interest in extending the respective MOU. The Committee's responsibilities are carried out in accordance with provisions of the Convention on Cultural Property Implementation Act (19 U.S.C. 2601 *et seq.* ). The text of the Act and subject Memoranda of Understanding, as well as related information, may be found at *http://exchanges.state.gov/culprop.* Portions of the meeting on March 15 and 16 will be closed pursuant to 5 U.S.C. 552b(c)(9)(B) and 19 U.S.C. 2605(h). However, on March 15, the Committee will hold an open session from approximately 9:30 a.m. to 11 a.m., to receive oral public comment on the proposals to extend. Persons wishing to attend this open session should notify the Cultural Heritage Center of the Department of State at
(202)453-8800 no later than March 7, 2007, 5 p.m.
(EST)to arrange for admission. Seating is limited. Anyone wishing to make an oral presentation at the public session must request to be scheduled, must state which MOU—Mali or Guatemala—the presentation will address, and must submit a written text of the oral comments by March 7, 2007, to allow time for distribution to Committee members prior to the meeting. Oral comments will be limited to allow time for questions from members of the Committee and must specifically relate to the determinations under Section 303(a)(1) of the Convention on Cultural Property Implementation Act, 19 U.S.C. 2602, pursuant to which the Committee must make findings. This citation for the determinations can be found at the Web site noted above. The Committee also invites written comments and asks that they be submitted no later than March 7, 2007, to allow time for distribution to Committee members prior to the meeting. All written materials, including the written texts of oral statements, may be faxed to
(202)453-8803. If more than three
(3)pages, 20 duplicates of written materials must be sent by express mail to: Cultural Heritage Center, Department of State, Annex 44, 301 4th Street, SW., Washington, DC 20547; tel:
(202)453-8800. Dina Habib Powell, Assistant Secretary for Educational and Cultural Affairs, Department of State. [FR Doc. E7-3368 Filed 2-26-07; 8:45 am] BILLING CODE 4710-05-P SUSQUEHANNA RIVER BASIN COMMISSION Notice of Public Hearing and Commission Meeting AGENCY: Susquehanna River Basin Commission. ACTION: Notice of Public Hearing and Commission Meeting. SUMMARY: The Susquehanna River Basin Commission will hold a public hearing to consider approval of certain water resources projects identified in the Supplementary Information section as part of its regular business meeting to be held at 1 p.m. on March 14, 2007 in Altoona, Pa. At the public hearing, the Commission will also consider the rescission of three docket approvals and an enforcement action involving one project, all of which are identified in the Supplementary Information section. DATES: March 14, 2007. ADDRESSES: Ramada Conference Center Altoona, 1 Sheraton Drive, Altoona, PA. See Supplementary Information section for mailing and electronic mailing addresses for submission of written comments. FOR FURTHER INFORMATION CONTACT: Richard A. Cairo, General Counsel, *telephone:*
(717)238-0423; ext. 306; *fax:*
(717)238-2436; *e-mail: rcairo@src.net* or Deborah J. Dickey, Secretary to the Commission, *telephone:*
(717)238-0423, ext. 301; *fax:*
(717)238-2436; *e-mail: ddickey@srbc.net* . SUPPLEMENTARY INFORMATION: In addition to the public hearing and its related action items identified below, the business meeting also includes the following items on the agenda:
(1)A panel session on water resources management issues in the Morrison Cove Watershed, Juniata Subbasin, of the Susquehanna River Basin;
(2)a report on hydrologic conditions in the basin;
(3)adoption of the 2007 Water Resources Program;
(4)revisions to the FY 2008 budget;
(5)approval/ratification of grants and contracts;
(6)presentation of SRBC's Frederick Zimmerman and William Jeannes Awards; and
(7)recognition of former Maryland Member Kendl Philbrick. Public Hearing—Projects Scheduled for Action: 1. *Project Sponsor & Facility:* Osram Sylvania Products, Inc., Towanda Borough, Bradford County, Pa. Modification of consumptive water use approval (Docket No. 19970502). 2. *Project Sponsor & Facility:* Conyngham Borough Authority, Conyngham Borough, Luzerne County, Pa. Application for groundwater withdrawal of up to 0.216 mgd. 3. *Project Sponsor:* The County of Lycoming. *Project Facility:* Lycoming County Resource Management Services, Brady Township, Lycoming County, Pa. Application for consumptive water use of up to 0.105 mgd. 4. *Project Sponsor & Facility:* Mount Union Municipal Authority, Wayne Township, Mifflin County, Pa. Application for groundwater withdrawal of up to 0.432 mgd. 5. *Project Sponsor & Facility:* Commonwealth Environmental Systems, L.P., Foster Township, Schuylkill County, Pa. Application for consumptive water use of up to 0.030 mgd. 6. *Project Sponsor & Facility:* Shippensburg Borough Authority, Southampton Township, Cumberland County, Pa. Application for groundwater withdrawal of up to 2.000 mgd. 7. *Project Sponsor:* Lancaster County Solid Waste Management Authority. *Project Facility:* Frey Farm and Creswell Landfills, Manor Township, Lancaster County, Pa. Modification of consumptive water use approval (Docket No. 20061208). 8. *Project Sponsor:* Delta Borough. *Project Facility:* Delta Ridge Subdivision, Peach Bottom Township, York County, Pa. Application for groundwater withdrawal of up to 0.032 mgd. Public Hearing—Projects Scheduled for Rescission Action: 1. *Project Sponsor & Facility:* Frito-Lay, Inc. (Docket No. 20020201), Johnson City, Broome County, NY. 2. *Project Sponsor:* Corning Incorporated. *Project Facility:* Erwin Park Photonics (Docket No. 20031002), Town of Erwin, Steuben County, NY. 3. *Project Sponsor & Facility:* Union Township Municipal Authority (Docket No. 19920701), Union Township, Clearfield County, Pa. Public Hearing—Projects Scheduled for Enforcement Action: 1. *Project Sponsor:* South Slope Development Corporation (Docket No. 19991103). *Project Facility:* Song Mountain Ski Resort, Town of Preble, Cortland County, NY. *Opportunity to Appear and Comment:* Interested parties may appear at the above hearing to offer written or oral comments to the Commission on any matter on the hearing agenda, or at the business meeting to offer written or oral comments on other matters scheduled for consideration at the business meeting. The chair of the Commission reserves the right to limit oral statements in the interest of time and to otherwise control the course of the hearing and business meeting. Written comments may also be mailed to the Susquehanna River Basin Commission, 1721 North Front Street, Harrisburg, Pennsylvania 17102-2391, or submitted electronically to Richard A. Cairo, General Counsel, *e-mail: rcairo@src.net* or Deborah J. Dickey, Secretary to the Commission, *e-mail: ddickey@srbc.net* . Comments mailed or electronically submitted must be received prior to March 14, 2007 to be considered. Authority: Pub. L. 91-575, 84 Stat. 1509 *et seq.* , 18 CFR Parts 803, 804, and 805. Dated: February 16, 2007. Thomas W. Beauduy, Deputy Director. [FR Doc. E7-3370 Filed 2-26-07; 8:45 am] BILLING CODE 7040-01-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Proposed Advisory Circular 120-XX, Damage Tolerance Inspections for Repairs and Alterations AGENCY: Federal Aviation Administration, DOT. ACTION: Notice of Availability of Proposed Advisory Circular
(AC)120-XX, and Request for Comments SUMMARY: This notice announces the availability of and requests comments on a proposed advisory circular
(AC)which provides guidance to type certificate holders and supplemental type certificate holders for developing damage tolerance data that will support operator compliance with certain airworthiness standards. This proposed AC complements revisions to the airworthiness standards that are being proposed by a separate notice. This notice is necessary to give all interested persons an opportunity to present their views on the proposed AC. DATES: We must receive your comments by April 20, 2007. ADDRESSES: You must mail two copies of your comments on the proposed AC to: Federal Aviation Administration, Attention: Greg Schneider, Airframe and Cabin Safety Branch, ANM-115, FAA, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, WA 98057-3356. You can inspect comments at the above address between 7:30 a.m. and 4 p.m. weekdays, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Kenna Sinclair, Transport Standards Staff, at the address above, telephone
(425)227-1556. SUPPLEMENTARY INFORMATION: Comments Invited We invite interested people to comment on the proposed AC by sending written data, views, or arguments. You should identify AC 120-XX and send two copies of your comments to the address specified above. We will consider all communications received by the closing date for comments. We will consider comments received late if it is possible to do so without incurring expense or delay. The proposed AC can be found and downloaded from the Internet at *http://www.faa.gov/aircraft/draft_docs* . A paper copy of the proposed AC may be obtained by contacting the person named above under the caption FOR FURTHER INFORMATION CONTACT . Discussion This proposed AC provides guidance material to support Type Certificate
(TC)and Supplemental Type Certificate
(STC)Holder compliance with proposed rulemaking title 14 Code of Federal Regulations (14 CFR) 25.1823, Supplemental Structural Inspections, Holders of type certificates—Repairs; 14 CFR 25.1825, Supplemental Structural Inspections, Holders of type certificates—Alterations and repairs to alterations; 14 CFR 25.1827, Supplemental Structural Inspections, Holders of and applicants for a Supplemental type certificate—Alterations and repairs to alterations. These proposed regulations would require TC Holders and STC Holders to develop damage tolerance data that would support operator compliance with 14 CFR 121.1109 and 14 CFR 129.109, the Aging Airplane Safety Final Rule (AASFR) (currently found at §§ 121.370(a) and 129.16) with respect to repairs and alterations. Sections 121.370(a) and 129.16 require operators of certain transport airplane models to incorporate into their maintenance program damage tolerance-based inspections and procedures for structure susceptible to fatigue cracking that could contribute to a catastrophic failure. The proposed AC refers to that type of structure as fatigue critical structure. The proposed AC is applicable to repairs and alterations that affect fatigue critical structure. The proposed AC also provides guidance for new and existing repairs and alterations made to the original, as delivered, airplane structural configuration, as well as repairs to alterations. For compliance with § 121.1109 and § 129.109, operators will need to demonstrate that new and existing repairs and alterations will have an evaluation and damage tolerance-based inspections or other procedures implemented, if needed. Following the guidance in this proposed AC is one means, but not the only means, of complying with the part 25 revisions proposed in Notice No. 05-11 entitled Damage Tolerance Data for Repairs and Alterations, which was published in the **Federal Register** on April 21, 2006 (71 FR 20574). Issuance of AC 120-XX is contingent on final adoption of the proposed revisions to part 25. Issued in Washington, DC, on February 20, 2007. Ali Bahrami, Manager, Transport Airplane Directorate, Aircraft Certification Service. Dave Cann, Manager, Aircraft Maintenance Division, Flight Standards Service. [FR Doc. E7-3329 Filed 2-26-07; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Surface Transportation Board [STB Ex Parte No. 668] Surface Transportation Board—2007 Office Relocation Business Plan AGENCY: Surface Transportation Board, DOT. ACTION: Notice. SUMMARY: The Surface Transportation Board is scheduled to relocate over the period of February 28-March 4, 2007. The Board is giving notice of pre-relocation and post-relocation procedures. The Board's new address will be: Surface Transportation Board, 395 E Street, SW., Washington, DC 20423-0001. EFFECTIVE DATE: February 28, 2007. FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar,
(202)565-1609 [after March 4, 2007,
(202)245-0395]. [Assistance for the hearing impaired is available through the Federal Information Relay Service
(FIRS)at:
(800)877-8339.] SUPPLEMENTARY INFORMATION: The Board is issuing this notice to advise the public of its new location, effective March 5, 2007. The Board is scheduled to relocate its offices beginning at 5 p.m. on Wednesday, February 28, 2007. STB offices will be closed on March 1 and March 2, 2007, and will reopen for normal business operations at the new location beginning March 5, 2007. Its new address will be: Surface Transportation Board, 395 E Street, SW., Washington, DC 20423-0001. In addition, the Board is also giving the public advance notice that normal service to the public, including normal case intake and processing, will not occur during the immediate relocation dates of February 28, 2007, through March 4, 2007, due to necessary equipment relocation and other disruptions anticipated during the relocation. Therefore, by this notice, the Board is announcing that mail will not be received and decisions will not be served on Thursday, March 1, 2007, and Friday, March 2, 2007. In particular, the Board will not: accept case filings or recordations; receive general mail; process cases; or issue decisions on these 2 days. Mail delivery and acceptance of filings and recordations will resume on March 5 at the new location. The Board will, for the duration of the period between March 1 and March 4, toll the time period for calculating the effective date of all Board decisions and notices that would otherwise be scheduled to take effect between March 1 and March 4, 2007. Because of the number of time-sensitive matters handled by the Board, the Board is providing advance notice that case filings that would begin a proceeding and trigger a deadline for processing or for effectiveness will not be accepted during the days needed to accomplish the agency's relocation. Likewise, the STB will suspend its processing of recordations during the days involved in its relocation. The effectiveness of previously issued decisions, or previously filed self-executing notices that would otherwise be scheduled to take effect between March 1 and March 4, 2007, will be delayed one day for every calendar day during the March 1-4 interval. This should alleviate any problems that could otherwise be presented for those persons who wish to seek a stay of effectiveness or problems that might otherwise occur in connection with processing of offers of financial assistance to continue rail service following Board approval of a rail line abandonment or discontinuance. The Board's libraries will operate under the following schedule. The main library will be inaccessible from February 23 through March 5, 2007. The microfiche unit will be inaccessible from noon on February 28 through March 5, 2007. The tariff library will be inaccessible from February 28 through March 5, 2007. Recordations indexes will be inaccessible from February 23 through March 5, 2007. All Board library resources will reopen at the new location at the start of business on Tuesday, March 6, 2007. Following the Board's move, the agency's information line will be 202-245-0245. To access the agency's new direct dial telephone numbers, either:
(1)Dial any agency phone number now in use to listen to a recording advising of the new phone number replacing it; or
(2)access the Board's Web site, at *http://www.stb.dot.gov* ; click “Contact Us” at the bottom of the home page; then, when the new page appears, click either the “Key Contacts List” or the “Ready Reference List” found at the bottom of the new page. On March 1 and 2, 2007, should an emergency situation arise, an STB staff member will monitor calls placed to the agency at 202-565-1573 and 202-565-9011 (fax). In addition, the STB's Office of Compliance and Consumer Assistance will monitor messages left at its toll free line 1-866-254-1792. Routine calls placed to the agency during its move will be returned beginning at the start of business at the new location on Monday, March 5, 2007. This action will not significantly affect either the quality of the human environment or the conservation of energy resources. Decided: February 21, 2007. By the Board, Chairman Nottingham. Vice Chairman Buttrey, and Commissioner Mulvey. Vernon A. Williams, Secretary. [FR Doc. E7-3332 Filed 2-26-07; 8:45 am] BILLING CODE 4915-01-P DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency Agency Information Collection Activities: Submission for OMB Review; Comment Request AGENCY: Office of the Comptroller of the Currency (OCC), Treasury. ACTION: Notice and request for comment. SUMMARY: The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995. An agency may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid OMB control number. The OCC is soliciting comment concerning its information collection titled, “Notice Regarding Unauthorized Access to Customer Information.” The OCC is also giving notice that it has sent the information collection to OMB for review. DATES: You should submit comments by March 29, 2007. ADDRESSES: Communications Division, Office of the Comptroller of the Currency, Public Information Room, Mailstop 1-5, Attention: 1557-0227, 250 E Street, SW., Washington, DC 20219. In addition, comments may be sent by fax to
(202)874-4448, or by electronic mail to *regs.comments@occ.treas.gov* . You can inspect and photocopy the comments at the OCC's Public Information Room, 250 E Street, SW., Washington, DC 20219. You can make an appointment to inspect the comments by calling
(202)874-5043. Additionally, you should send a copy of your comments to OCC Desk Officer, 1557-0227, by mail to U.S. Office of Management and Budget, 725 17th Street, NW., #10235, Washington, DC 20503, or by fax to
(202)395-6974. FOR FURTHER INFORMATION CONTACT: You can request additional information or a copy of the collection from Mary Gottlieb, OCC Clearance Officer, or Camille Dickerson,
(202)874-5090, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency, 250 E Street, SW., Washington, DC 20219. SUPPLEMENTARY INFORMATION: The OCC is proposing to extend, without revision, the approval of the following information collection: *Title:* Notice Regarding Unauthorized Access to Customer Information. *OMB Number:* 1557-0227. *Description:* Section 501(b) of the Gramm-Leach-Bliley Act (15 U.S.C. 6901) requires the OCC to establish standards for national banks relating to administrative, technical, and physical safeguards to:
(1)Insure the security and confidentiality of customer records and information;
(2)protect against any anticipated threats or hazards to the security or integrity of such records; and
(3)protect against unauthorized access to or use of such records or information that could result in substantial harm or inconvenience to any customer. The Interagency Guidelines Establishing Information Security Standards, 12 CFR Part 30, Appendix B (Security Guidelines) implementing section 501(b) require each bank to consider and adopt a response program, if appropriate, that specifies actions to be taken when the bank suspects or detects that unauthorized individuals have gained access to customer information. The Interagency Guidance on Response Programs for Unauthorized Customer Information and Customer Notice (Breach Notice Guidance), which interprets the Security Guidelines states that, at a minimum, a bank's response program should contain procedures for the following:
(1)Assessing the nature and scope of an incident, and identifying what customer information systems and types of customer information have been accessed or misused;
(2)Notifying its primary Federal regulator as soon as possible when the bank becomes aware of an incident involving unauthorized access to or use of sensitive customer information;
(3)Consistent with the OCC's Suspicious Activity Report regulations, notifying appropriate law enforcement authorities, in addition to filing a timely SAR in situations involving Federal criminal violations requiring immediate attention, such as when a reportable violation is ongoing;
(4)Taking appropriate steps to contain and control the incident to prevent further unauthorized access to or use of customer information, for example, by monitoring, freezing, or closing affected accounts, while preserving records and other evidence; and
(5)Notifying customers when warranted. This collection of information covers the notice provisions in the Breach Notice Guidance. *Type of Review:* Extension of a currently approved collection. *Affected Public:* Individuals; Businesses or other for-profit. *Estimated Number of Respondents:* 2,200. *Estimated Total Annual Responses:* 2,244. *Frequency of Response:* On occasion. *Estimated Total Annual Burden:* 53,844 hours. A 60-day notice requesting comment was published on November 20, 2006 (71 FR 67204). No comments were received. Comments continued to be invited on:
(a)Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information has practical utility;
(b)The accuracy of the agency's estimate of the burden of the collection of information;
(c)Ways to enhance the quality, utility, and clarity of the information to be collected;
(d)Ways to minimize the burden of the collection on respondents, including through the use of automated collection techniques or other forms of information technology;
(e)Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information; and
(f)Whether the estimates need to be adjusted based upon banks' experience regarding the number of actual security breaches that occur. Dated: February 21, 2007. Stuart Feldstein, Assistant Director, Legislative and Regulatory Activities Division, Office of the Comptroller of the Currency. [FR Doc. E7-3266 Filed 2-26-07; 8:45 am] BILLING CODE 4810-33-P DEPARTMENT OF VETERANS AFFAIRS [OMB Control No. 2900-0376] Agency Information Collection Activities Under OMB Review AGENCY: Veterans Health Administration, Department of Veterans Affairs. ACTION: Notice. SUMMARY: In compliance with the Paperwork Reduction Act
(PRA)of 1995 (44 U.S.C. 3501-3521), this notice announces that the Veterans Health Administration (VHA), Department of Veterans Affairs, has submitted the collection of information abstracted below to the Office of Management and Budget
(OMB)for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and includes the actual data collection instrument. DATES: Comments must be submitted on or before March 29, 2007. ADDRESSES: Submit written comments on the collection of information through *http://www.Regulations.gov;* or to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503
(202)395-7316. Please refer to “OMB Control No. 2900-0376” in any correspondence. FOR FURTHER INFORMATION CONTACT: Denise McLamb, Records Management Service (005G2), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420,
(202)565-8374, fax
(202)565-7870 or e-mail *denise.mclamb@mail.va.gov.* Please refer to “OMB Control No. 2900-0376.” SUPPLEMENTARY INFORMATION: *Title:* Agent Orange Registry Code Sheet, VA Form 10-9009. *OMB Control Number:* 2900-0376. *Type of Review:* Extension of a currently approved collection. *Abstract:* VA in an on-going effort to maintain an Agent Orange Registry
(AOR)developed a reporting format to facilitate the collection of information obtained from veterans during the Agent Orange registry examination process. VA is required to organize and update the information contained in AOR to be able to notify Vietnam era veterans who served in the Republic of Vietnam of any increased health risks resulting from exposure to dioxin or other toxic agents. VA may also provide, upon request, a health examination, consultation, and counseling veterans who are eligible for listing or inclusion in any health-related registry administrated by VA that is similar to the Persian Gulf War Veterans Health Registry. Registry examinations are provided to veterans who served in Korea in 1968 or 1969, and/or any U.S. veteran who may have been exposed to dioxin, or other toxic substance in a herbicide or defoliant, during the conduct of, or as a result of, the testing, transporting, or spraying of herbicides, and who requests an Agent Orange Registry examination. VA will enter the information obtained from the veteran during the interview on VA Form 10-9009, Agent Orange Registry Code Sheet. The registry will provide a mechanism that will catalogue prominent symptoms, reproductive health, and diagnoses and to communicate with Agent Orange veterans. VA will inform the veterans on research finding or new compensation policies through periodic newsletters. The registry is not designed or intended to be a research tool and therefore the results cannot be generalized to represent all Agent Orange veterans. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The **Federal Register** Notice with a 60-day comment period soliciting comments on this collection of information was published on December 6, 2006 at pages 70847-70848. *Affected Public:* Individuals or Households. *Estimated Total Annual Burden:* 7000 hours. *Estimated Average Burden Per Respondent:* 20 minutes. *Frequency of Response:* On occasion. *Estimated Number of Respondents:* 21,000. Dated: February 14, 2007. By direction of the Secretary: Denise McLamb, Program Analyst, Records Management Service. [FR Doc. E7-3380 Filed 2-26-07; 8:45 am] BILLING CODE 8320-01-P DEPARTMENT OF VETERANS AFFAIRS [OMB Control No. 2900-0012] Proposed Information Collection Activity: Proposed Collection; Comment Request AGENCY: Veterans Benefits Administration, Department of Veterans Affairs. ACTION: Notice. SUMMARY: The Veterans Benefits Administration (VBA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act
(PRA)of 1995, Federal agencies are required to publish notice in the **Federal Register** concerning each proposed collection of information, including each proposed extension of a currently approved collection, and allow 60 days for public comment in response to the notice. This notice solicits comments for information needed to determine a claimant's eligibility for a loan or cash surrender value on his or her Government Life Insurance policy. DATES: Written comments and recommendations on the proposed collection of information should be received on or before April 30, 2007. ADDRESSES: Submit written comments on the collection of information through *http://www.Regulations.gov;* or to Nancy J. Kessinger, Veterans Benefits Administration (20M35), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420; or e-mail: *nancy.kessinger@va.gov.* Please refer to “OMB Control No. 2900-0012” in any correspondence. During the comment period, comments may be viewed online through the Federal Docket Management System
(FDMS)at *http://www.Regulations.gov.* FOR FURTHER INFORMATION CONTACT: Nancy J. Kessinger at
(202)273-7079 or FAX
(202)275-5947. SUPPLEMENTARY INFORMATION: Under the PRA of 1995 (Pub. L. 104-13; 44 U.S.C. 3501-21), Federal agencies must obtain approval from the Office of Management and Budget
(OMB)for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA. With respect to the following collection of information, VBA invites comments on:
(1)Whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility;
(2)the accuracy of VBA's estimate of the burden of the proposed collection of information;
(3)ways to enhance the quality, utility, and clarity of the information to be collected; and
(4)ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology. *Titles:* a. Application for Cash Surrender, Government Life Insurance, VA Form 29-1546. b. Application for Policy Loan, Government Life Insurance, 29-1546-1. *OMB Control Number:* 2900-0012. *Type of Review:* Extension of a currently approved collection. *Abstract:* Claimants complete VA Forms 29-1546 and 29-1546-1 to request a cash surrender or policy loan on his or her Government Life Insurance. *Affected Public:* Individuals or households. *Estimated Annual Burden:* 4,939 hours. *Estimated Average Burden per Respondent:* 10 minutes. *Frequency of Response:* On occasion. *Estimated Number of Respondents:* 29,636. Dated: February 12, 2007. By direction of the Secretary. Denise McLamb, Program Analyst, Records Management Service. [FR Doc. E7-3382 Filed 2-26-07; 8:45 am] BILLING CODE 8320-01-P DEPARTMENT OF VETERANS AFFAIRS [OMB Control No. 2900-0117] Proposed Information Collection Activity: Proposed Collection; Comment Request AGENCY: Office of Human Resources and Administration, Department of Veterans Affairs. ACTION: Notice. SUMMARY: The Office of Human Resources and Administration (HRA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act
(PRA)of 1995, Federal agencies are required to publish notice in the **Federal Register** concerning each proposed collection of information, including each proposed extension of a currently approved collection, and allow 60 days for public comment in response to the notice. This notice solicits comments on the information needed to determine an applicant's suitability and qualifications for employment. DATES: Written comments and recommendations on the proposed collection of information should be received on or before April 30, 2007. ADDRESSES: Submit written comments on the collection of information through *http://www.Regulations.gov;* or to Jean Hayes, Office of Human Resources Management (051B), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420; or e-mail: *jean.hayes@va.gov.* Please refer to “OMB Control No. 2900-0117” in any correspondence. During the comment period, comments may be viewed online through the Federal Docket Management System
(FDMS)at *http://www.Regulations.gov.* FOR FURTHER INFORMATION CONTACT: Jean Hayes at
(202)273-9706. SUPPLEMENTARY INFORMATION: Under the PRA of 1995 (Pub. L. 104-13; 44 U.S.C. 3501-3521), Federal agencies must obtain approval from the Office of Management and Budget
(OMB)for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA. With respect to the following collection of information, HRA invites comments on:
(1)Whether the proposed collection of information is necessary for the proper performance of VA's functions, including whether the information will have practical utility;
(2)the accuracy of HRA's estimate of the burden of the proposed collection of information;
(3)ways to enhance the quality, utility, and clarity of the information to be collected; and
(4)ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology. *Title:* Inquiry Concerning Applicant for Employment, VA Form Letter 5-127. *OMB Control Number:* 2900-0117. *Type of Review:* Extension of a currently approved collection. *Abstract:* VA Form Letter 5-127 is used to verify qualifications of applicants for employment at VA. This information is obtained from individuals who have knowledge of the applicants' past work record, performance, and character. VA will use the data collected to determine the applicant's suitability and qualifications for employment. *Affected Public:* Business or other for-profit, individuals or households, State, local or tribal government. *Estimated Annual Burden:* 3,125 hours. *Estimated Average Burden per Respondent:* 15 minutes. *Frequency of Response:* One-time. *Estimated Number of Respondents:* 12,500. Dated: February 12, 2007. By direction of the Secretary. Denise McLamb, Records Management Service. [FR Doc. E7-3383 Filed 2-26-07; 8:45 am] BILLING CODE 8320-01-P DEPARTMENT OF VETERANS AFFAIRS [OMB Control No. 2900-0609] Proposed Information Collection Activity: Proposed Collection; Comment Request AGENCY: Veterans Health Administration, Department of Veterans Affairs. ACTION: Notice. SUMMARY: The Veterans Health Administration (VHA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act
(PRA)of 1995, Federal agencies are required to publish notice in the **Federal Register** concerning each proposed collection of information, including each proposed extension of a currently approved collection, and allow 60 days for public comment in response to this notice. This notice solicits comments for information needed to survey veteran enrollees' health status and reliance on VA's health care services. DATES: Written comments and recommendations on the proposed collection of information should be received on or before April 30, 2007. ADDRESSES: Submit written comments on the collection of information through *http://www.Regulations.gov* ; or to Mary Stout, Veterans Health Administration (193E1), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420; or e-mail: *mary.stout@va.gov* . Please refer to “OMB Control No. 2900-0609” in any correspondence. During the comment period, comments may be viewed online through the Federal Docket Management System
(FDMS)at *http://www.Regulations.gov* . FOR FURTHER INFORMATION CONTACT: Mary Stout at
(202)273-8664 or FAX
(202)273-9381. SUPPLEMENTARY INFORMATION: Under the PRA of 1995 (Pub. L. 104-13; 44 U.S.C. 3501-3521), Federal agencies must obtain approval from the Office of Management and Budget
(OMB)for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA. With respect to the following collection of information, VHA invites comments on:
(1)Whether the proposed collection of information is necessary for the proper performance of VHA's functions, including whether the information will have practical utility;
(2)the accuracy of VHA's estimate of the burden of the proposed collection of information;
(3)ways to enhance the quality, utility, and clarity of the information to be collected; and
(4)ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or the use of other forms of information technology. *Title:* Survey of Veteran Enrollees' Health and Reliance Upon VA, VA Form 10-21034g. *OMB Control Number:* 2900-0609. *Type of Review:* Extension of a currently approved collection. *Abstract:* Public Law 104-262, The Veterans Health Care Eligibility Reform Act of 1996, requires VA implement a priority-based enrollment system. VA must enroll veterans by specified priorities as far down the priorities as the available resources permit. The number of priority levels to which VHA will be able to deliver care will be a function of annual funding levels and utilization of health care services by enrollees. Additionally, eligibility reform has brought about the ever-increasing need for VA to plan and budget for the evolving clinical care needs of its extremely dynamic enrollee population at risk of need or use of VA care. There is no valid, recent information available in administrative databases on all enrollees' health status, income, and their reliance upon the VA system. The magnitude of changes each year in enrollees, their characteristics, and system policies make annual surveys necessary to capture this critical information for input into VHA's Health Care Services Demand Model. The survey will provide VA with current information for sound decisions that affect the entire VA health care delivery system and the veterans it serves. VA Form 10-21034g will be used to provide the survey data on morbidity and reliance that is critical to obtaining accurate projections of VA's ability to service veterans who are seeking VA health care services. The projections will also be used to support VA's Capital Asset Realignment for Enhanced Services initiative and will also served as the basis for VA's new emphasis on population-based budget formulation, policy scenario testing, and strategic planning. *Affected Public:* Individuals or households, and Federal Government. *Estimated Annual Burden:* 10,900 hours. *Estimated Average Burden per Respondent:* 15 minutes. *Frequency of Response:* Annually. *Estimated Number of Respondents:* 42,200. Dated: February 12, 2007. By direction of the Secretary. Denise McLamb, Program Analyst, Records Management Service. [FR Doc. E7-3388 Filed 2-26-07; 8:45 am] BILLING CODE 8320-01-P DEPARTMENT OF VETERANS AFFAIRS [OMB Control No. 2900-0377] Agency Information Collection Activities Under OMB Review AGENCY: Veterans Benefits Administration, Department of Veterans Affairs. ACTION: Notice. SUMMARY: In compliance with the Paperwork Reduction Act
(PRA)of 1995 (44 U.S.C. 3501-3521), this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, has submitted the collection of information abstracted below to the Office of Management and Budget
(OMB)for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden; it includes the actual data collection instrument. DATES: Comments must be submitted on or before March 29, 2007. ADDRESSES: Submit written comments on the collection of information through *http://www.Regulations.gov;* or to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503
(202)395-7316. Please refer to “OMB Control No. 2900-0377” in any correspondence. FOR FURTHER INFORMATION CONTACT: Denise McLamb, Records Management Service (005G2), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420,
(202)565-8374; fax
(202)565-7870; or e-mail *denise.mclamb@mail.va.gov* . Please refer to “OMB Control No. 2900-0377” in any correspondence. SUPPLEMENTARY INFORMATION: *Title:* Claim for Repurchase of Loan, VA Form 26-8084. *OMB Control Number:* 2900-0377. *Type of Review:* Extension of a currently approved collection. *Abstract:* Holders of delinquent vendee accounts guaranteed by VA complete VA Form 26-8084 to request VA to repurchase a loan that has been in default for three months and the amount of the delinquency equals or exceeds the sum of two monthly installments. VA notifies the obligor(s) in writing of the loan repurchased, and that the vendee account will be service and maintain by VA. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The **Federal Register** Notice with a 60-day comment period soliciting comments on this collection of information was published on July 28, 2006 at pages 42894-42895. *Affected Public:* Business or other for-profit. *Estimated Annual Burden:* 240 hours. *Estimated Average Burden per Respondent:* 30 minutes. *Frequency of Response:* One-time. *Estimated Number of Respondents:* 480. Dated: February 9, 2007. By direction of the Secretary. Denise McLamb, Program Analyst, Records Management Service. [FR Doc. E7-3389 Filed 2-26-07; 8:45 am] BILLING CODE 8320-01-P DEPARTMENT OF VETERANS AFFAIRS [OMB Control No. 2900-New (VA Form 29-0812)] Agency Information Collection Activities Under OMB Review AGENCY: Veterans Benefits Administration, Department of Veterans Affairs. ACTION: Notice. SUMMARY: In compliance with the Paperwork Reduction Act
(PRA)of 1995 (44 U.S.C. 3501-3521), this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, has submitted the collection of information abstracted below to the Office of Management and Budget
(OMB)for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and includes the actual data collection instrument. DATES: Comments must be submitted on or before March 29, 2007. ADDRESSES: Submit written comments on the collection of information through *http://www.Regulations.gov;* or to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503,
(202)395-7316. Please refer to “OMB Control No. 2900-New (VA Form 29-0812)” in any correspondence. FOR FURTHER INFORMATION CONTACT: Denise McLamb, Records Management Service (005G2), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420,
(202)565-8374, fax
(202)565-7870 or e-mail *denise.mclamb@mail.va.gov.* Please refer to “OMB Control No. 2900-New (VA Form 29-0812).” SUPPLEMENTARY INFORMATION: *Title:* Service-Disabled Veterans Insurance—Waiver of Premiums, VA Form 29-0812. *OMB Control Number:* 2900-New (VA Form 29-0812). *Type of Review:* New collection. *Abstract:* Claimants who become totally disabled complete VA Form 29-0812 to apply for a waiver of their Service-Disabled Veterans Insurance policy premiums. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The **Federal Register** Notice with a 60-day comment period soliciting comments on this collection of information was published on November 20, 2006 at page 67205. *Affected Public:* Individuals or households. *Estimated Annual Burden:* 1,167 hours. *Estimated Average Burden per Respondent:* 20 minutes. *Frequency of Response:* On occasion. *Estimated Number of Respondents:* 3,500. Dated: February 14, 2007. By direction of the Secretary. Denise McLamb, Program Analyst, Records Management Service. [FR Doc. E7-3391 Filed 2-26-07; 8:45 am] BILLING CODE 8320-01-P DEPARTMENT OF VETERANS AFFAIRS [OMB Control No. 2900-0572] Agency Information Collection Activities Under OMB Review AGENCY: Veterans Benefits Administration, Department of Veterans Affairs. ACTION: Notice. SUMMARY: In compliance with the Paperwork Reduction Act
(PRA)of 1995 (44 U.S.C. 3501-21), this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, has submitted the collection of information abstracted below to the Office of Management and Budget
(OMB)for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden; it includes the actual data collection instrument. DATES: Comments must be submitted on or before March 29, 2007. ADDRESSES: Submit written comments on the collection of information through *http://www.Regulations.gov;* or to VA's OMB Desk Officer, OMB Human Resources and Housing Branch, New Executive Office Building, Room 10235, Washington, DC 20503
(202)395-7316. Please refer to “OMB Control No. 2900-0572” in any correspondence. FOR FURTHER INFORMATION CONTACT: Denise McLamb, Records Management Service (005G2), Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420,
(202)565-8374, fax
(202)565-7870 or e-mail *denise.mclamb@mail.va.gov.* Please refer to “OMB Control No. 2900-0572.” SUPPLEMENTARY INFORMATION: *Title:* Application for Benefits for Certain Children with Disabilities Born of Vietnam and Certain Korea Service Veterans, VA Form 21-0304. *OMB Control Number:* 2900-0572. *Type of Review:* Extension of a currently approved collection. *Abstract:* VA Form 21-0304 is used to gather the necessary information to determine a claimant's eligibility for a monetary allowance and appropriate level of payment. Under title 38 U.S.C 1815, Children of Women Vietnam Veterans Born with Certain Birth Defects, authorizes payment of monetary benefits to, or on behalf of, certain children of female veterans who served in Republic of Vietnam. To be eligible, the child must be the biological child; conceived after the date the veteran first served in Vietnam during the period February 28, 1961 to May 7, 1975; and have certain birth defects resulting in permanent physical or mental disability. Under title 38 U.S.C. 1805, Spina Bifida Benefits Eligibility, authorizes payment to a spina bifida child-claimant of parent(s) who performed active military, naval, or air service during the Vietnam era during the period January 9, 1962 to May 7, 1975 or after the date the veteran first served in or near the demilitarized zone in Korea during the period September 1, 1967 to August 31, 1971. The child must be the natural child of a Vietnam veteran, regardless of age or marital status, who was conceived after the date on which the veteran first entered the Republic of Vietnam during the Vietnam era. Spina Bifida benefits are payable for all types of spina bifida except spina bifida occulta. The law does not allow payment of both benefits at the same time. If entitlement exists under both laws, benefits will be paid under 38 U.S.C. 1815. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The **Federal Register** Notice with a 60-day comment period soliciting comments on this collection of information was published on August 22, 2006 at pages 48975-48976. *Affected Public:* Individuals or households. *Estimated Annual Burden:* 72 hours. *Estimated Average Burden Per Respondent:* 10 minutes. *Frequency of Response:* On occasion. *Estimated Number of Respondents:* 430. Dated: February 12, 2007. By direction of the Secretary. Denise McLamb, Program Analyst, Records Management Service. [FR Doc. E7-3401 Filed 2-26-07; 8:45 am] BILLING CODE 8320-01-P 72 38 Tuesday, February 27, 2007 CORRECTIONS Amelia DEPARTMENT OF HEALTH AND HUMAN SERVICES Indian Health Service Privacy Act of 1974; Report of Modified or Altered System—Indian Health Service Scholarship and Loan Repayment Programs Correction In notice document 07-501 beginning on page 5446 in the issue of Tuesday, February 6, 2007, make the following correction: On page 5449, in the third column, in the second full paragraph, in the first line, “IHS may disclose” should read “7. IHS may disclose”. [FR Doc. C7-501 Filed 2-26-07; 8:45 am] BILLING CODE 1505-01-D Amelia DEPARTMENT OF THE INTERIOR Minerals Management Service Outer Continental Shelf (OCS), Eastern Gulf of Mexico (GOM), Oil and Gas Lease Sale 224 for 2008 Correction In notice document E7-2498 beginning on page 7070 in the issue of Wednesday, February 14, 2007, make the following correction: On page 7073, the graphic at the bottom of the page is being reprinted to appear as set forth below. EN14FE07.001 [FR Doc. Z7-2498 Filed 2-26-07; 8:45 am] BILLING CODE 1505-01-D 72 38 Tuesday, February 27, 2007 Proposed Rules Part II Consumer Product Safety Commission 16 CFR Part 1610 Standard for the Flammability of Clothing Textiles; Proposed Rule CONSUMER PRODUCT SAFETY COMMISSION 16 CFR Part 1610 Standard for the Flammability of Clothing Textiles; Notice of Proposed Rulemaking AGENCY: Consumer Product Safety Commission. ACTION: Notice of proposed rulemaking. SUMMARY: The Commission is proposing to amend its flammability standard of general wearing apparel, the Standard for the Flammability of Clothing Textiles, 16 CFR part 1610. The Standard, originally issued in 1953, has become outdated in several respects. The Commission is proposing changes to better reflect current consumer practices and technologies and to clarify several aspects of the Standard. DATES: Written comments must be received by May 14, 2007. Requests to make an oral presentation must be received by April 13, 2007. ADDRESSES: Written comments should be filed by e-mail to *cpsc-os@cpsc.gov.* Comments also may be filed by telefacsimile to
(301)504-0127, or they may be mailed or delivered, preferably in five copies, to the Office of the Secretary, Consumer Product Safety Commission, Room 502, 4330 East West Highway, Bethesda, Maryland 20814-4408; telephone
(301)504-7923. Comments should be captioned “Clothing NPR.” The public may also request an opportunity to present comments orally. Such requests should be submitted to the Office of the Secretary by e-mail, mail, fax or in person at the addresses or phone numbers listed above. FOR FURTHER INFORMATION CONTACT: Patricia K. Adair, Directorate for Engineering Sciences, Consumer Product Safety Commission, 4330 East West Highway, Bethesda, Maryland 20814-4408; telephone
(301)504-7536. SUPPLEMENTARY INFORMATION: A. Background 1. History of the Standard It excludes footwear, interlining fabrics, and some hats and gloves. The standard provides a test to determine whether such clothing and fabrics exhibit “rapid and intense burning,” and are therefore highly flammable. In 1953, Congress enacted the Flammable Fabrics Act of 1953 (“FFA”), (Pub. L. 83-88, 67 Stat. 111). As enacted in 1953 and amended in 1954, the FFA prohibited the importation, manufacture for sale, or the sale in commerce of any article of wearing apparel, which is “so highly flammable as to be dangerous when worn by individuals.” The FFA of 1953 specified that a test, first published by the Department of Commerce as a voluntary commercial standard, then called “Flammability of Clothing Textiles, Commercial Standard (“CS”) 191-53,” shall be used to determine if fabric or clothing is “so highly flammable as to be dangerous when worn by individuals.” In 1967, Congress amended the FFA, expanding its coverage and authorizing the Secretary of Commerce to issue flammability standards through rulemaking. A savings clause kept the flammability standard for clothing textiles that the 1953 Act had mandated in effect until superseded or modified by the Secretary of Commerce through the procedures specified in the 1967 amendment. See section 11 of Pub. L. 90-189, 81 Stat. 568, December 14, 1967. In 1972, Congress established the Consumer Product Safety Commission when it enacted the Consumer Product Safety Act (“CPSA”), 15 U.S.C. 2051 *et seq.* The CPSA transferred to the Commission the authority the Secretary of Commerce had to issue and amend flammability standards under the FFA. 15 U.S.C. 2079(b). In 1975, the Commission published the FFA of 1953 at 16 CFR 1609 and codified the Standard for the Flammability of Clothing Textiles at 16 CFR part 1610. 2. The Current Standard Most fabrics are combustible. Some combustible fabrics, when used for clothing are potentially dangerous to the wearer because of the speed and intensity of flame with which those fabrics burn and their ease of ignition and because of the design of the garment. The Standard sets out a method for measuring burn time, which is a function of ease of ignition and flame spread rate. The Commission is not proposing to change the essential aspects of the Standard, but rather to update and clarify it. The Standard describes a test apparatus and the procedures for testing clothing and textiles intended to be used for clothing. It establishes three classes of flammability. The classes are based on measurement of burn time, along with visual observations of flame intensity. The classes are: Class 1 or normal flammability; Class 2 or intermediate flammability; and Class 3 or rapid and intense burning. Clothing and textiles that are categorized as Class 3 under the prescribed test method are considered dangerously flammable. 16 CFR 1610.3. To determine the appropriate classification, the Standard prescribes the method of testing. Five specimens are subjected to a flammability tester. This is a draft-proof ventilated chamber containing an ignition medium, a sample rack and an automatic timing device. *Id.* 1610.4(b). The ignition medium is a motor driven gas jet around a 26-gage hypodermic needle. *Id.* 1610.4(b)(6). A swatch of each sample must be subjected to the dry cleaning and hand washing procedure prescribed by the Standard. *Id.* 1610.4(d)&(e). To determine results, the average time of flame spread is taken for five specimens. However, if the time of flame spread is less than 4 seconds (3 1/2 seconds for plain-surfaced fabrics), five additional specimens must be tested and the average time of flame spread for these ten specimens, or for as many of them as burn, must be taken. *Id.* 1610.4(g)(7). Classification is based on the reported results before and after drycleaning and washing, whichever is lower. *Id.* 1610.4(g)(8). 3. The Products The products regulated under the Standard are clothing and fabrics intended to be used for clothing. The Standard applies to all items of clothing, and fabrics used for such clothing, whether for adults or children, for daywear or nightwear. The Commission has other regulations governing the flammability of children's sleepwear, 16 CFR parts 1615 and 1616, that are more stringent than the general wearing apparel flammability standard. The proposed changes discussed in this notice would not affect the children's sleepwear standards. 4. The Risk of Injury Fatalities where clothing was the first item ignited have declined from 311 fatalities in 1980 to 110 fatalities in 2003, the most recent year of available data. An average of 122 clothing fire-related fatalities occurred annually during 1999-2003. Population fatality rates increased with age. In addition, an estimated 3,822 non-fatal injuries were treated in hospital emergency departments annually (2000-2004). Among these non-fatal injuries, 25 percent were serious enough to require admission to a hospital (compared to 5% for all consumer products). The changes the Commission is proposing will better reflect current practices and technologies and clarify some aspects of the Standard. These changes should improve the Standard's ability to address the risk of injury. B. Statutory Provisions The FFA sets forth the process by which the Commission can issue or amend a flammability standard. The Commission first must issue an advance notice of proposed rulemaking (“ANPR”) which it did on September 12, 2002, 67 FR 57770. The Commission is now issuing a notice of proposed rulemaking (“NPR”). As required, this notice contains the text of the proposed rule along with alternatives the Commission has considered and a preliminary regulatory analysis. 15 U.S.C. 1193(i). Before issuing a final rule, the Commission must prepare a final regulatory analysis, and it must make certain findings concerning any relevant voluntary standard, the relationship of costs and benefits of the rule, and the burden imposed by the regulation. *Id.* 1193(j). In addition, the Commission must find that the standard
(1)is needed to adequately protect the public against the risk of the occurrence of fire leading to death, injury or significant property damage,
(2)is reasonable, technologically practicable, and appropriate,
(3)is limited to fabrics, related materials or products which present unreasonable risks, and
(4)is stated in objective terms. 15 U.S.C. 1193(b). The Commission also must provide an opportunity for interested persons to make an oral presentation before the Commission may issue a final rule. *Id.* 1193(d). The Commission requests that anyone who would like to make an oral presentation concerning this rulemaking please contact the Commission's Office of the Secretary (address is provided in the ADDRESSES section of this notice) within 45 days of publication of this notice. If the Commission receives requests to make oral comments, a date will be set for a public meeting for that purpose and notice of the meeting will be provided in the **Federal Register** . C. Proposed Revision To reflect changes in consumer garment care practices and to make the standard easier to understand, the Commission is proposing certain changes to the clothing flammability standard. These are discussed below. *Definitions.* Over the years people have expressed confusion over the meaning of certain terms and a lack of defined terminology in the Standard. In particular, the meaning of the terms “base burn” and “surface flash” have caused confusion in interpreting and reporting test results for raised surface textile fabrics. These terms are now defined in the proposal. In addition, several other relevant terms and definitions have been added. These terms include *burn time, dry cleaning, flammability, flame, ignition, interlining, laundering, long dimension, plain surface textile fabric, raised surface textile fabric, refurbishing, sample, specimen, and stop thread supply.* *Changes to the flammability tester.* The test chamber prescribed in the current Standard uses a mechanical timing mechanism and is no longer available for purchase. Apparel manufacturers and testing laboratories currently use more modern flammability test chambers that incorporate electro-mechanical components to apply the ignition flame and measure burn time. (The Standard allows alternate procedures if they are as stringent as the specified procedure.) A variety of such testers are available from a number of manufacturers. The proposed revision describes the critical parameters of a modern flammability test apparatus and provides diagrams. In 1982, CPSC staff conducted some work comparing the flame impingement time of the electrical test chamber to that of a chamber with the mechanical timing device and found that the electrical test chamber readings were comparable to and more consistent than the manual test chamber readings. The proposed revisions expressly permit the use of electro-mechanical devices to control and apply the flame impingement. *Refurbishing methods.* The Standard requires fabrics to be refurbished, that is, dry cleaned and laundered, one time before testing. The purpose of this requirement is to remove any non-durable solvent or water soluble treatment present on the fabric. It is not intended to replicate how the garment would be used or cared for by a consumer. Both the dry cleaning and laundering procedures prescribed by the current Standard are outdated. The proposal revises these procedures to better reflect modern techniques for laundering and dry cleaning. The method of dry cleaning that the current Standard prescribes requires perchloroethylene in an open vessel. However, perchloroethylene has been shown to cause cancer in animal tests, and use in this manner violates regulations issued by the Environmental Protection Agency. The Commission staff has not used this procedure since 1986. (The Standard allows alternate procedures if they are as stringent as the specified procedure.) Industry and independent laboratories have been using an alternative dry cleaning procedure provided in ASTM D 1230, Standard Test Method for Apparel Flammability. This procedure uses perchlorethylene in a closed environment commercial dry cleaning machine for one cycle. Analysis of test data from an ASTM interlaboratory round robin indicates that this procedure is as stringent as the procedure currently specified in 16 CFR part 1610. However, the ASTM standard lacks specifications for solvent type, detergent class, cleaning and extraction time, drying time and temperature, and cool down/deoderization time. If specific and uniform conditions are not followed, test results could vary. Therefore, the proposed revision includes specific parameters for these conditions. These parameters were suggested by the International Fabricare Institute, a trade association for the professional garment care industry. The current Standard requires that after fabric samples are dry cleaned they must be hand washed with neutral chip soap and line dried before testing them for flammability. 16 CFR 1610.4(e). However, neutral chip soap is no longer available. Most detergents are now non-phosphate based due to environmental concerns. The proposed revision sets forth laundering requirements based on those prescribed in American Association of Textile Chemists and Colorists (“AATCC”) 124-2001, Appearance of Fabrics After Repeated Home Laundering. An earlier version of this test method was incorporated into other FFA standards in 2000. 65 FR 12924, 12929, and 12935 (March 10, 2000). *Test procedures.* Over the years, manufacturers and testing laboratories have expressed confusion regarding the test procedures and materials or equipment required by the Standard. Inaccurate sample preparation and conditioning undermine the efficacy of the Standard. In the ANPR, the Commission identified confusing sections of the test procedure, including the instructions for selecting the surface or direction of the fabric to be tested, and the directions for determining when to test five additional specimens. The proposed revision reorganizes and rewrites the test procedure in a more logical step-by-step fashion to clarify the directions for selecting the surface or direction of the fabric to be tested, how to determine when testing five additional specimens is necessary, as well as how to conduct the flammability test. *Test result interpretation and reporting.* The current Standard provides no codes to report complex test results consistently. Although this is not an issue for plain surface textile fabrics, it is for raised surface textile fabrics, the classification of which is more complex. The proposed revision clarifies the instructions for calculating burn times and establishing the occurrence of a base burn (§ 1610.8). By defining the terms “base burn” and “surface flash” in § 1610.2, the proposed revision provides further clarification for the reporting of test results for raised surface textile fabrics. The proposed revision also specifies test result codes. These codes come from CPSC's laboratory test manual and are based on codes developed by the Federal Trade Commission many years ago. Uniform result codes will facilitate reporting accuracy and consistency, understanding of flammability performance, and resolution of test result differences among laboratories. *Subpart B and Subpart C.* The Commission is also proposing changes to subparts B and C of the Standard. To reduce confusion, the proposal moves some provisions concerning procedures for conducting the tests that are currently in subpart B and C into subpart A. This should provide a more cohesive and clearer standard. Subpart C is substantially the same, but some language has been clarified to make it more consistent with subparts A and B, and the section describing the history of the FFA and the Standard has been removed. D. Response to Comments on the ANPR On September 12, 2002, the Commission published an ANPR initiating this rulemaking. 67 FR 57770. The Commission received 18 written comments from businesses, trade associations, and interested parties representing various segments of the fiber, textile and apparel industries, as well as academic institutions and fire service organizations. Commenters generally agreed that the Standard needs to be updated and reorganized. Specific issues raised by the comments are discussed below. 1. Laundering and Dry Cleaning a. *Comment.* One commenter suggested considering new dry cleaning methods/solvents as an alternative to perchloroethylene. *Response.* The Commission recognizes that new dry cleaning technologies have emerged in recent years as alternatives to perchloroethylene and that at least one region of the country is moving to phase-out the use of perchloroethylene by 2020. At this time, however, approximately 70% of U.S. dry cleaners still use perchloroethylene. Perchloroethylene is known to be slightly more severe in solvent action than other solvents and more likely to remove any flame retardant treatments on textiles. The proposal specifies a “normal” commercial dry cleaning method which includes specifications for cleaning, extraction, drying temperature, drying time and cool down/deodorization. Samples are to be cleaned in a commercial dry cleaning machine, using perchloroethylene as the solvent in a closed environment. b. *Comment.* One commenter expressed concern over the role of fabric softeners in fabric flammability. *Response.* According to the Procter and Gamble Company, about 71% of U.S. households have some form of fabric softener. The most common forms of fabric softeners for home laundering are liquid softeners (purchased by 42% of U.S. households) and dryer-added sheet softeners (purchased by about 49% of U.S. households). Dryer sheet softeners have anti-static properties. Some households use both forms; some consumers use both a rinse cycle softener and a dryer sheet softener for the same load of laundry. At the present time there is no “standard reference” fabric softener. The AATCC technical committee RA88 on Home Laundering Technology is working on the development of a standard reference fabric softener; the technical committee estimates that this work may be completed in approximately three years. The Commission is not including a requirement for fabric softener at this time since there is no standard fabric softener to reference. c. *Comment.* For changes to the dry cleaning and laundering procedures, two commenters suggested CPSC consider current AATCC and ASTM standards. *Response.* The proposal incorporates certain sections of AATCC Test Method 124-2001 “Appearance of Fabrics After Repeated Home Laundering,” consistent with other FFA regulations (16 CFR Parts 1615, 1616, 1630, 1631 and 1632). The dry cleaning procedure in the proposal is similar but not identical to ASTM D1230 Standard Test Method for Flammability of Apparel Textiles section 9.2.1.6 Option B. The proposal has specifications for dry cleaning in a commercial dry-cleaning machine using perchloroethylene in a “normal” cycle. d. *Comment.* One commenter provided suggestions for updating the laundering method which included increasing the number of cycles. *Response.* The intent of the laundering and dry cleaning requirements of the Standard is to remove any non-durable flame retardant treatments that may be on the clothing textile; its intent is not to replicate the consumer's refurbishing practices. No change has been made; one cycle of each refurbishing method is required. e. *Comment.* One commenter suggested requiring only the refurbishing method on the garment care label. *Response.* The Standard applies to fabrics and fabrics used in garments. While the test method can be used to test fabric in the garment stage it also applies to fabric before it is sewn into a garment, so a fabric care label may not be present. The refurbishing requirement (laundering/dry cleaning) is to remove any solvent or water soluble treatment that might be on the garment. It is not meant to test the durability of fabric treatments over the lifetime of a garment. 2. Clarifications in the Standard a. *Comment.* Several comments suggested areas of the Standard in need of clarification. These included clarifying the brushing of the specimens, fabrics considered to be raised fiber textiles, determination of the nap direction of raised surface textiles, exemptions allowed and interpretation of test results for classification. *Response.* The Commission agrees that sections of the current Standard are difficult to interpret and need clarification, including clearer instructions on brushing of raised fiber surface textiles and determination of which fabrics are considered to have raised fiber surfaces. The proposal includes examples of raised fiber surface textiles and provides guidance on testing these fabrics. The proposal moves language from footnotes into the body of the Standard to clarify the exemptions allowed and brings forward clarifying language from 16 CFR subparts B and C. In addition, the proposed revision includes new text and graphics on the test procedure, interpretation of test results for classification, and engineering diagrams of the flammability test apparatus. b. *Comment.* Commenters suggested adding portions of the CPSC laboratory test manual to clarify the test procedures in the Standard. *Response.* The staff used the 1981 CPSC laboratory manual as a resource in developing recommendations to amend the Standard. The proposal has added language from the lab manual in many sections. c. *Comment.* One commenter suggested that the terms “surface flash” and “base burn” be defined in the Standard; another suggested definitions for these terms. *Response.* The proposal adds many new definitions to the Standard, including definitions for “surface flash” and “base burn” to facilitate clearer understanding of the flammability test, classification criteria and reporting results. d. *Comment.* Two commenters suggested reorganizing the Standard to eliminate duplication. *Response.* The Commission agrees and proposes to reorganize large portions of the Standard to eliminate duplication and make it easier to follow and understand. 3. Enforcement and Procedural Issues a. *Comment.* Two commenters urged CPSC to continue with enforcement of 16 CFR part 1610. *Response.* The CPSC Office of Compliance actively enforces 16 CFR part 1610 and continues to see violations of the Standard. From 1995 through June 2006, the Commission announced the recall of 28 apparel products for violations of 16 CFR part 1610. b. *Comment.* One commenter suggested CPSC should consider promulgating a procedure or mechanism that allows the agency to make technical changes to this and other standards on a routine basis when referenced voluntary standards are upgraded by AATCC and ASTM (e.g., laundering and dry cleaning) without having to go through full notice and comment rulemaking. *Response.* For any change by a voluntary standards organization to have the force and effect of a Commission rule, the Commission must formally adopt it through notice and comment rulemaking. c. *Comment.* Some commenters suggested that the requirements of the Standard should be made more stringent to improve the level of safety provided by the Standard; comments included reviewing the appropriateness of the ignition source and ignition time, increasing the ignition time from 1 to 5 seconds, revising the acceptable burn times; considering forced ignition, ignition of the lower cut edge of the specimen and horizontal and vertical test configurations. One comment was concerned with the need for new flammability requirements for certain types of clothing (adult sleepwear and bathrobes). One commenter suggested adding a list of “suspect fabrics” and requiring more frequent testing for these fabrics. Additional comments included clarifying or amending the exemptions from the requirements for testing to support guaranties and warning labels for “high-risk” garments. *Response.* The scope of the ANPR issued on September 12, 2002 was limited to considering changes to the Standard to better reflect current consumer practices, modernized testing equipment and clarifying several aspects of the Standard. If, in the future, the Commission should determine that substantive changes to the Standard are needed to adequately protect the public, it would begin a separate proceeding for issuing a new standard or amending the current one in accordance with provisions of section 4 of the FFA (15 U.S.C. 1193). 4. The Desiccant Specified in the Standard *Comment.* One commenter recommended specifying silica gel as the desiccant instead of anhydrous calcium chloride. Another commenter was concerned about the potency of the anhydrous calcium chloride desiccant and consequently the efficacy of testing. That commenter noted that the only way to ensure the potency of anhydrous calcium chloride desiccant is to require maintaining daily logs detailing the initial temperature and humidity readings inside the desiccator at the start of each day, as well as after each test is completed. *Response.* The Commission agrees with the commenters, and the proposal specifies silica gel as the preferred desiccant. Silica gel is recognized as an effective, reliable desiccant; and it can be reactivated by heating, thus making it economical. Other FFA standards (16 CFR parts 1615, 1616, 1630 and 1631) specify silica gel as the preferred desiccant, and for the purpose of uniformity the CPSC laboratory has been using silica gel as the desiccant for all FFA testing since 1973. Regarding the potency of the desiccant, unlike anhydrous calcium chloride desiccant, the color-changing silica gel indicator provides a visual indication that the desiccant has become saturated with moisture. When the indicating silica gel crystals change color, the desiccant is reactivated by heating it in a laboratory oven. 5. Preliminary Tests a. *Comment.* One commenter recommended eliminating the preliminary tests requirement because the majority of apparel garments are cut in the lengthwise direction, therefore only the lengthwise direction of a garment or fabric needs to be tested. *Response.* When a garment is worn on a body, the orientation of the fabric varies. The standard specifies that the long dimension of a plain surface textile fabric specimen is that direction in which the fabric burns most rapidly. To determine which fabric direction burns the most rapidly, the Standard requires preliminary tests of specimens cut in different directions. Because there can be differences in the burning characteristics with respect to fabric direction, the staff believes that the requirement for preliminary tests should not be eliminated. b. *Comment.* One commenter suggested increasing the number of preliminary tests, especially for raised fiber surface textile fabrics to include both lengthwise and crosswise directions. The commenter is concerned about low-pile fabrics where it may be difficult to determine the correct direction of the raised surface fibers. *Response.* For raised fiber surface textile fabrics the Standard requires the direction of the lay of the surface fibers be parallel with the long dimension of the specimen. Selecting specimens in this manner allows for the brushing procedure to raise the surface fibers, since the specimen is brushed against the direction of the lay of the surface fibers. The Standard requires tests of the most flammable surface of the fabric. With many raised fiber surface textile fabrics it is easy to determine the direction of the lay of the surface fibers by touch and visual observation, and preliminary tests are not needed. Regarding those fabrics where it may be difficult to visually determine the correct direction of the lay of the raised surface fibers, preliminary tests should be done to determine the direction with the fastest burning time. Since the Standard already requires preliminary tests to determine the most flammable fabric direction, there is no need to prescribe preliminary tests of both the lengthwise and crosswise direction of raised fiber surface textile fabrics. 6. Reporting Test Results *Comment.* One commenter recommended using simplified abbreviations (or codes) for reporting burn test results. *Response.* The existing Standard does not provide codes to report test results. However, the FTC developed test result codes many years ago for both plain surface and raised fiber surface textile fabrics. These codes are found in the CPSC's laboratory test manual, and the CPSC laboratory staff has used them to record test results for a number of years. Uniform result codes will facilitate reporting accuracy, understanding of flammability performance and resolution of test result differences among laboratories. For these reasons the proposal provides test result codes. E. Preliminary Regulatory Analysis Introduction The Commission has preliminarily determined to issue a rule revising and reorganizing the Standard for the Flammability of Clothing Textiles. Section 4(i) of the FFA requires that the Commission prepare a preliminary regulatory analysis for a proposed regulation under the FFA and that it be published with the proposed rule. 15 U.S.C. 1193(i). The following discussion, extracted from the staff's memorandum titled “Preliminary Regulatory Analysis: Amendment to Clothing Textile Standard,” addresses this requirement. Potential Benefits and Costs Any benefits of the proposed revision would accrue through a reduction in injury and death associated with clothing ignition. However, the proposed amendment simply codifies existing industry practices, and is not intended to change the types and classes of textiles (or garments) available for consumer use. Consequently, we do not anticipate any change in injuries or deaths due to this revision. Therefore, this amendment would not result in any additional expected benefits associated with the Standard. Similarly, the proposal is not expected to increase costs to manufacturers. Any increased costs that would have been incurred were already borne by manufacturers when they voluntarily initiated the test modifications which would be called for under the revision. No additional testing or recordkeeping requirements are contemplated as a result of the proposed amendment. Again, this amendment simply codifies current industry practices. If anything, this proposed revision may reduce the industry burden since it modifies requirements that are outdated and/or impossible to comply with. Alternatives One alternative would be for the Commission to choose to use the ASTM standard as a template for the proposed amendment. The ASTM standard is a recent update
(2001)of the FFA regulations promulgated in 1953. This option would harmonize the voluntary standard with the mandatory FFA standard. However, the more extensive definitional language of the proposed revised standard is more complete and more easily understood than that of the ASTM standard, which follows a different organizational format. Another option may be to use the test procedures outlined in the ASTM standard, combined with the definitional content of the proposal. While each of the options is likely to result in equivalence with the current Standard, the Commission believes that the detail of its proposed language could better address the potential for confusion and mis-classification of clothing textiles by the industry. F. Regulatory Flexibility Certification The Regulatory Flexibility Act (“RFA”) generally requires that agencies review proposed rules for their potential economic impact on small entities, including small businesses. Section 603 of the RFA calls for agencies to prepare and make available for public comment an initial regulatory flexibility analysis describing the impact of the proposed rule on small entities and identifying impact-reducing alternatives. 5 U.S.C. 603. However, section 605 states that this requirement does not apply if the head of the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities, and the agency provides an explanation for that conclusion. This rulemaking will have little or no effect on small businesses in the textile and apparel industries because, as discussed above, the proposal is largely a technical one that updates the FFA Standard to current industry practices. Therefore, the Commission concludes that the proposed amendment will not have a significant economic impact on a substantial number of small entities. G. Environmental Considerations Generally, CPSC rules are considered to “have little or no potential for affecting the human environment,” and environmental assessments are not usually prepared for these rules (see 16 CFR 1021.5 (c)(1)). Because the proposal continues current industry practices, it is not expected to alter production processes or affect the amounts of materials used in manufacturing, packaging or labeling. Therefore, the Commission does not expect the proposal to have any negative environmental impact. H. Executive Orders Executive Order 12988 (February 5, 1996), requires agencies to state in clear language the preemptive effect, if any, to be given to a new regulation. The clothing standard amendment, if issued on a final basis, would modify a flammability standard issued under the FFA. With certain exceptions which are not applicable in this instance, no state or political subdivision of a state may enact or continue in effect “a flammability standard or other regulation” applicable to the same fabric or product covered by an FFA standard if the state or local flammability standard or other regulations is “designed to protect against the same risk of the occurrence fire” unless the state or local flammability standard or regulation “is identical” to the FFA standard. See section 16 of the FFA (15 U.S.C. 1203). I. Effective Date Section 4(b) of the FFA (15 U.S.C. 1193(b)) provides that an amendment of a flammability standard shall become effective one year from the date it is promulgated, unless the Commission finds for good cause than an earlier or later effective date is in the public interest, and publishes that finding. Section 4(b) also requires that an amendment of a flammability standard shall exempt products “in inventory or with the trade” on the date the amendment becomes effective, unless the Commission limits or withdraws that exemption because those products are so highly flammable that they are dangerous for use by consumers. The Commission believes that a shorter effective date is in the public interest. As discussed above, the proposed revisions reflect practices that industry and laboratories are currently following. Thus, the impact of the proposed changes should be minimal. Moreover, it should be helpful to the public if the clarifications provided in the proposed revision are effective sooner than one year. Therefore, the Commission proposes that the revisions to the Standard would become effective 180 days after publication of a final amendment and that products “in inventory or with the trade” would be exempt from the revised standard. J. Proposed Findings Section 1193(a) and (j)(2) of the FFA require the Commission to make certain findings when it issues or amends a flammability standard. The Commission must find that the standard or amendment:
(1)Is needed to adequately protect the public against the risk of the occurrence of fire leading to death, injury or significant property damage;
(2)is reasonable, technologically practicable, and appropriate;
(3)is limited to fabrics, related materials or products which present unreasonable risks; and
(4)is stated in objective terms. 15 U.S.C. 1193(b). In addition, the Commission must find that:
(1)If an applicable voluntary standard has been adopted and implemented, that compliance with the voluntary standard is not likely to adequately reduce the risk of injury, or compliance with the voluntary standard is not likely to be substantial;
(2)that benefits expected from the regulation bear a reasonable relationship to its costs; and
(3)that the regulation imposes the least burdensome alternative that would adequately reduce the risk of injury. These findings are discussed below. *The amendment to the Standard is needed to adequately protect the public against unreasonable risk of the occurrence of fire.* The Standard dates from 1953. In the past fifty years changes in technology and consumer practices have made some parts of the Standard obsolete. Through the years, some have found the Standard's terminology and organization confusing and difficult to follow. The proposed amendment will better reflect the modern practices followed by industry and consumers, and modifications in the language and organization of the standard will enhance its clarity. *The amendment to the Standard is reasonable, technologically practicable, and appropriate.* The proposed amendment essentially establishes in the Standard the practices currently followed by industry and testing laboratories. These changes should enhance the Standard's reasonableness, practicability, and appropriateness. *The amendment to the Standard is limited to fabrics, related materials, and products that present an unreasonable risk.* The proposed amendment continues to apply to the same textiles as the existing Standard. *Voluntary standards.* The proposed Standard is similar to ASTM D1230 Standard Test Method for Flammability of Apparel Textiles in methods of testing but significantly different in refurbishing procedures, terminology and criteria. The Commission believes that the proposed amendment will provide better clarity to industry and testing laboratories and therefore is likely to better address the risk of injury. *Relationship of benefits to costs.* Because the proposed amendment reflects current practices, both anticipated costs and benefits are likely to be small. *Least burdensome requirement.* The proposed amendment makes no substantive changes to the Standard, but only provides modifications that are necessary to update and clarify the Standard. K. Conclusion For the reasons discussed above, the Commission preliminarily finds that amending the clothing textile flammability standard is needed to adequately protect the public against the unreasonable risk of the occurrence of fire leading to death, injury, and significant property damage. The Commission also preliminarily finds that the amendment to the Standard is reasonable, technologically practicable, and appropriate. The Commission further finds that the amendment is limited to the fabrics, related materials and products which present such unreasonable risks. List of Subjects in 16 CFR Part 1610 Clothing, Consumer protection, Flammable materials, Reporting and recordkeeping requirements, Textiles, Warranties. Therefore, the Commission proposes to amend Title 16 of the Code of Federal Regulations by revising part 1610 to read as follows: PART 1610—STANDARD FOR THE FLAMMABILITY OF CLOTHING TEXTILES Subpart A—The Standard Sec. 1610.1 Purpose, scope and applicability. 1610.2 Definitions. 1610.3 Summary of test method. 1610.4 Requirements for classifying textiles. 1610.5 Test apparatus and materials. 1610.6 Test procedure. 1610.7 Test sequence and classification criteria. 1610.8 Reporting results. Subpart B—Rules and Regulations 1610.31 Definitions. 1610.32 General requirements. 1610.33 Test procedures for textile fabrics and film. 1610.34 Only uncovered or exposed parts of wearing apparel to be tested. 1610.35 Procedures for testing special types of textile fabrics under the standard. 1610.36 Application of Act to particular types of products. 1610.37 Reasonable and representative tests to support guaranties. 1610.38 Maintenance of records by those furnishing guaranties. 1610.39 Shipments under section 11(c) of the Act. 1610.40 Use of alternative apparatus, procedures, or criteria for tests for guaranty purposes. Subpart C—Interpretations and Policies 1610.61 Reasonable and representative testing to assure compliance with the standard for the clothing textiles. Figure 1 to Part 1610—Sketch of Flammability Apparatus Figure 2 to Part 1610—Flammability Apparatus Views Figure 3 to Part 1610—Specimen Holder Supported in Specimen Rack Figure 4 to Part 1610—Igniter Figure 5 to Part 1610—Brushing Device Figure 6 to Part 1610—Brush Figure 7 to Part 1610—Template Authority: 15 U.S.C. 1191-1204. Subpart A—The Standard § 1610.1 Purpose, scope and applicability.
(a)*Purpose.* The purpose of this standard is to reduce danger of injury and loss of life by providing, on a national basis, standard methods of testing and rating the flammability of textiles and textile products for clothing use, thereby prohibiting the use of any dangerously flammable clothing textiles.
(b)*Scope.* The Standard provides methods of testing the flammability of clothing and textiles intended to be used for clothing, establishes three classes of flammability, sets forth the requirements which textiles shall meet to be classified, and warns against the use of those textiles which have burning characteristics unsuitable for clothing. Hereafter, “clothing and textiles intended to be used for clothing” shall be referred to as “textiles.”
(c)*Specific exceptions.* This standard shall not apply to:
(1)Hats, provided they do not constitute or form part of a covering for the neck, face, or shoulders when worn by individuals;
(2)Gloves, provided they are not more than 14 inches in length and are not affixed to or do not form an integral part of another garment;
(3)Footwear, provided it does not consist of hosiery in whole or part and is not affixed to or does not form an integral part of another garment;
(4)Interlining fabrics, when intended or sold for use as a layer between an outer shell and an inner lining in wearing apparel.
(d)*Specific exemptions.* Experience gained from years of testing in accordance with the Standard demonstrates that certain fabrics consistently yield acceptable results when tested in accordance with the Standard. Therefore, persons and firms issuing an initial guaranty of any of the following types of fabrics, or of products made entirely from one or more of these fabrics, are exempt from any requirement for testing to support guaranties of those fabrics:
(1)Plain surface fabrics, regardless of fiber content, weighing 2.6 ounces per square yard or more; and
(2)All fabrics, both plain surface and raised-fiber surface textiles, regardless of weight, made entirely from any of the following fibers or entirely from combination of the following fibers: acrylic, modacrylic, nylon, olefin, polyester, wool.
(e)*Applicability.* The requirements of this part 1610 shall apply to textile fabric or related material in a form or state ready for use in an article of wearing apparel, including garments and costumes finished for consumer use. § 1610.2 Definitions. In addition to the definitions given in Section 2 of the Flammable Fabrics Act as amended (15 U.S.C. 1191), the following definitions apply for this part 1610.
(a)*Base burn* (also known as base fabric ignition or fusing) means the point at which the flame burns the ground
(base)fabric of a raised surface textile fabric and provides a self-sustaining flame. Base burns, used to establish a Class 3 fabric, are those burns resulting from surface flash that occur on specimens in places other than the point of impingement when the warp and fill yarns of a raised surface textile fabric undergo combustion. Base burns can be identified by an opacity change, scorching on the reverse side of the fabric, or when a physical hole is evident.
(b)*Burn time* means the time elapsed from ignition until the stop thread is severed as measured by the timing mechanism of the test apparatus.
(c)*Dry cleaning* means the cleaning of samples in a commercial dry cleaning machine under the conditions described in § 1610.6.
(d)*Film* means any non-rigid, unsupported plastic, rubber or other synthetic or natural film or sheeting, subject to the Act, or any combination thereof, including transparent, and opaque material, whether plain, embossed, molded, or otherwise surface treated, which is in a form or state ready for use in wearing apparel, and shall include film or sheeting of any thickness.
(e)*Flammability* means those characteristics of a material that pertain to its relative ease of ignition and relative ability to sustain combustion.
(f)*Flame application time* means the 1 second during which the ignition flame is applied to the test specimen.
(g)*Ignition* means that there is a self-sustaining flame on the specimen after the test flame is removed.
(h)*Interlining* means any textile which is intended for incorporation into an article of wearing apparel as a layer between an outer shell and an inner lining.
(i)*Laundering* means washing with an aqueous detergent solution and includes rinsing, extraction and tumble drying as described in § 1610.6.
(j)*Long dimension* means the 150 mm (6 in) length of test specimen.
(k)*Plain surface textile fabric* means any textile fabric which does not have an intentionally raised fiber or yarn surface such as a pile, nap, or tuft, but shall include those fabrics that have fancy woven, knitted or flock-printed surfaces.
(l)*Raised surface textile fabric* means any textile fabric with an intentionally raised fiber or yarn surface, such as a pile, including flocked pile, nap, or tufting.
(m)*Refurbishing* means dry cleaning and laundering in accordance with § 1610.6.
(n)*Sample* means a portion of a lot of material which is taken for testing or for record keeping purposes.
(o)*Specimen* means a 50 mm by 150 mm (2 in by 6 in) section of sample.
(p)*Stop thread supply* means No. 50, white, mercerized, 100% cotton sewing thread.
(q)*Surface flash* means a rapid burning of the pile fibers and yarns on a raised fiber surface textile that may or may not result in base burning.
(r)*Textile fabric* means any coated or uncoated material subject to the Act, except film and fabrics having a nitro-cellulose fiber, finish, or coating, which is woven, knitted, felted or otherwise produced from any natural or manmade fiber, or substitute therefore, or combination thereof, of 50 mm (2 in) or more in width, and which is in a form or state ready for use in wearing apparel, including fabrics which have undergone further processing, such as dyeing and finishing, in garment form, for consumer use. § 1610.3 Summary of test method. The Standard provides methods of testing the flammability of textiles from or intended to be used for apparel; establishes three classes of flammability; sets forth the requirements for classifying textiles; and prohibits the use of single or multi-layer textile fabrics that have burning characteristics that make them unsuitable for apparel. All textiles shall be tested before and after refurbishing according to § 1610.6. Each specimen cut from the textile shall be inserted in a frame, brushed if it has a raised fiber surface, and held in a special apparatus at an angle of 45°. A standardized flame shall be applied to the surface near the lower end of the specimen for 1 second, and the time required for the flame to proceed up the fabric a distance of 127 mm (5 in) shall be recorded. A notation shall be made as to whether the base of a raised-surface textile fabric ignites or fuses. § 1610.4 Requirements for classifying textiles.
(a)*Class 1, Normal Flammability.* Class 1 textiles exhibit normal flammability and are acceptable for use in clothing. This class shall include textiles which meet the minimum requirements set forth in paragraph (a)(1) or paragraph (a)(2) of this section.
(1)*Plain surface textile fabric.* Such textiles in their original state and/or after being refurbished as described in § 1610.6(a) and § 1610.6(b), when tested as described in § 1610.6, shall be classified as Class 1, Normal Flammability, when the burn time is 3.5 seconds or more.
(2)*Raised surface textile fabric.* Such textiles in their original state and/or after being refurbished as described in § 1610.6(a) and § 1610.6(b), when tested as described in § 1610.6, shall be classified as Class 1, Normal Flammability, when the burn time is more than 7 seconds, or when they burn with a rapid surface flash (0 to 7 seconds), provided the intensity of the flame is so low as not to ignite or fuse the base fabric.
(b)*Class 2, Intermediate Flammability.* Class 2 fabrics, applicable only to raised fiber surface textiles, are considered to be of intermediate flammability, but may be used for clothing. This class shall include textiles which meet the minimum requirements set forth in paragraph (b)(2) of this section.
(1)*Plain surface textile fabric.* Class 2 is not applicable to plain surface textile fabrics.
(2)*Raised surface textile fabric.* Such textiles in their original state and/or after being refurbished as described in § 1610.6(a) and § 1610.6(b), when tested as described in § 1610.6, shall be classified as Class 2, Intermediate Flammability, when the burn time is from 4 through 7 seconds, both inclusive, and the base fabric ignites or fuses.
(c)*Class 3, Rapid and Intense Burning.* Class 3 textiles exhibit rapid and intense burning, are dangerously flammable and shall not be used for clothing. This class shall include textiles which have burning characteristics as described in paragraphs (c)(1) and (c)(2) of this section. Such textiles are considered dangerously flammable because of their rapid and intense burning.
(1)*Plain surface textile fabric.* Such textiles in their original state and/or after refurbishing as described in § 1610.6(a) and § 1610.6(b), when tested as described in § 1610.6, shall be classified as Class 3 Rapid and Intense Burning when the time of flame spread is less than 3.5 seconds.
(2)*Raised surface textile fabric.* Such textiles in their original state and/or after refurbishing as described in § 1610.6(a) and § 1610.6(b), when tested as described in § 1610.6, shall be classified as Class 3 Rapid and Intense Burning when the time of flame spread is less than 4 seconds and the intensity of flame is such as to ignite or fuse the base fabric. Table 1 to § 1610.4.—Summary of Test Criteria for Specimen Classification [See also § 1610.7] Class Plain surface textile fabric Raised surface textile fabric 1 Burn time is 3.5 seconds or more. ACCEPTABLE (3.5 sec is a pass)
(1)Burn time is greater than 7.0 seconds or
(2)Burn time is 0-7 seconds with no base burns. Exhibits rapid surface flash only. ACCEPTABLE 2 Class 2 is not applicable to plain surface textile fabrics Burn time is 4-7 seconds (inclusive) with base burn. ACCEPTABLE 3 Burn time is less than 3.5 seconds. NOT ACCEPTABLE Burn time is less than 4.0 seconds with base burn. NOT ACCEPTABLE. § 1610.5 Test apparatus and materials.
(a)*Flammability apparatus.* The flammability test apparatus consists of a draft-proof ventilated chamber enclosing a standardized ignition mechanism, sample rack, and automatic timing mechanism. The flammability apparatus shall meet the minimum requirements for testing as follows.
(1)*Test chamber.* —(i) *Test chamber structure.* The test chamber shall be a metal, draft-proof ventilated chamber. The test chamber shall have inside dimensions of 35.3 cm high by 36.8 cm wide by 21.6 cm deep (14 in by 14.5 in by 8.5 in). There shall be eleven 12.7 mm diameter (0.5 in) holes equidistant along the rear of the top closure. The front of the chamber shall be a close fitting door with an insert made of clear material (i.e., glass, plexiglass) to permit observation of the entire test. A ventilating strip is provided at the base of the door in the front of the apparatus. The test chamber to be used in this test method is illustrated in Figures 1 through 3 of this part.
(ii)*Specimen rack.* The specimen rack provides support for the specimen holder (described in paragraph (a)(1)(iii) of this section) in which the specimen is mounted for testing. The angle of inclination shall be 45°. Two guide pins projecting downward from the center of the base of the rack travel in slots provided in the floor of the chamber so that adjustment can be made for the thickness of the specimen in relation to the test flame. A stop shall be provided in the base of the chamber to assist in adjusting the position of the rack. The specimen rack shall be constructed so that: it supports the specimen holder in a way that does not obstruct air flow around the bottom edge of the fabric specimen; and the fabric specimen is properly aligned with the igniter tip during flame impingement. The specimen rack to be used in this test method is illustrated in Figures 1 and 2 of this part. Movable rack: Refer to the manufacturers’ instruction in relation to the adjustment procedure to move the rack into the appropriate position for the indicator finger alignment.
(iii)*Specimen holder.* The specimen holder supports and holds the fabric specimen. The specimen holder shall consist of two 2 mm (0.06 in) thick U-shaped matched metal plates. The plates are slotted and loosely pinned for alignment. The specimen shall be firmly sandwiched in between the metal plates with clamps mounted along the sides. The two plates of the holder shall cover all but 3.8 cm (1.5 in) of the width of the specimen for its full length. See Figure 3 of this part. The specimen holder shall be supported in the draft-proof chamber on the rack at an angle of 45°.
(iv)*Indicator finger.* The position of the specimen rack (described in paragraph (a)(1)(ii) of this section) shall be adjusted, so the tip of the indicator finger just touches the surface of the specimen. The indicator finger is necessary to ensure that the tip of the test flame will impinge on the specimen during testing. The indicator finger to be used in this test method is illustrated in Figures 1 and 2 of this part.
(v)*Ignition mechanism.* The ignition mechanism shall consist of a motor driven butane gas jet formed around a 26-gauge hypodermic needle and creates the test flame. The test flame shall be protected by a shield. The test flame is adjusted to 16 mm (0.625 in) and applied to the specimen for 1 second. A trigger device is located in the front of the apparatus, the pulling or pushing of which activates the test flame impingement and timing device. Electro-mechanical devices (i.e., servo-motors, solenoids, micro-switches, and electronic circuits, in addition to miscellaneous custom made cams and rods, shock absorbing linkages, and various other mechanical components) can be used to control and apply the flame impingement. See Figure 7 of this part.
(vi)*Draft ventilator strip.* A draft ventilator strip shall be placed across the front opening, sealing the space between the sliding door when in lowered position and the base on which the grid rack is attached. (See Figure 1 of this part.)
(vii)*Stop weight.* The weight, attached by means of a clip to the stop thread, in dropping actuates the stop motion for the timing mechanism. The weight shall be at least 30g (1.16 oz).
(viii)*Door.* The door shall be a clear (i.e., glass or plexiglass) door, close fitting and allows for viewing of the entire test.
(ix)*Hood.* The hood or other suitable enclosure shall provide a draft-free environment surrounding the test chamber. The hood or other suitable enclosure shall have a fan or other means for exhausting smoke and/or fumes produced by testing.
(2)*Stop thread and thread guides.* —(i) *Stop thread.* The stop thread shall be stretched from the spool through suitable thread guides provided on the specimen holder and chamber walls.
(ii)*Stop thread supply.* This supply, consisting of a spool of No. 50, white, mercerized, 100% cotton sewing thread, shall be fastened to the side of the chamber and can be withdrawn by releasing the thumbscrew holding it in position.
(iii)*Thread guides.* The thread guides permit the lacing of the stop thread in the proper position exactly 127 mm (5 in) from the point where the center of the ignition flame impinges on the test specimen. The stop thread shall be 9.5 mm (0.37 in) above and parallel to the lower surface of the top plate of the specimen holder. This condition can be achieved easily and reproducibly with the use of a thread guide popularly referred to as a “sky hook” suspended down from the top panel along with two L-shaped thread guides attached to the upper end of the top plate of the specimen holder. Two other thread guides can be installed on the rear panel to draw the thread away from directly over the test flame. The essential condition, however, is the uniform height of 9.5 mm (0.37 in) for the stop thread and not the number, placement or design of the thread guides.
(iv)*Stop weight thread guide.* This thread guide shall be used to guide the stop thread when attaching the stop weight.
(3)*Supply for test flame.*
(i)The fuel supply shall be a cylinder of chemically pure (c. p.) butane.
(ii)The fuel-tank control valve shall consist of a sensitive control device for regulating the fuel supply at the tank.
(iii)The flow control device, such as a manometer or flow meter, shall be sufficient to maintain a consistent flame length of 5/8 in.
(4)*Timing device.* The timing device consists of a timer, driving mechanism and weight. The timer, by means of special attachments, is actuated to start by connection with the gas jet. A trigger device (described in paragraph (a)(1)(v) of this section) activates the flame impingement, causing the driving mechanism to move the gas jet to its most forward position and automatically starts the timer at the moment of flame impact with the specimen. The falling weight, when caused to move by severance of the stop thread, stops the timer. Time shall be read directly and recorded as a burn time. Read burn time to 0.1 second. An electronic or mechanical timer can be used to record the burn time, and electro-mechanical devices (i.e., servo-motors, solenoids, micro-switches, and electronic circuits, in addition to miscellaneous custom made cams and rods, shock absorbing linkages, and various other mechanical components) can be used to control and apply the flame impingement.
(b)*Specimen preparation equipment and materials* —(1) *Laboratory drying oven.* This shall be a forced circulation drying oven capable of maintaining 105° ± 3° C (221° ± 5° F) for 30 ± 2 minutes to dry the specimens while mounted in the specimen holders.
(2)*Desiccator.* This shall be an airtight and moisture tight chamber capable of holding the specimens horizontally without contacting each other during the cooling period following drying, and shall contain silica gel desiccant.
(3)*Desiccant.* Anhydrous silica gel shall be used as the desiccant.
(4)*Automatic washing machine.* The automatic washing machine shall be as described in § 1610.6(b)(1)(ii).
(5)*Automatic tumble dryer.* The automatic tumble dryer shall be as described in § 1610.6(b)(1)(ii).
(6)*Commercial dry cleaning machine.* The commercial dry cleaning machine shall be capable of providing a complete automatic dry-to-dry cycle using perchloroethylene solvent and a cationic drycleaning detergent as specified in § 1610.6(b)(1)(i).
(7)*Dry cleaning solvent.* The solvent shall be perchloroethylene, commercial grade.
(8)*Dry cleaning detergent.* The dry cleaning detergent shall be cationic class.
(9)*Laundering detergent.* The laundering detergent shall be as specified in § 1610.6(b)(1)(ii).
(10)*Brushing device.* The brushing device shall consist of a base board over which a small carriage is drawn. See Figure 4 of this part. This carriage runs on parallel tracks attached to the edges of the upper surface of the base board. The brush is hinged with pin hinges at the rear edge of the base board and rests on the carriage vertically with a pressure of 150 gf (0.33 lbf). The brush shall consist of two rows of stiff nylon bristles mounted with the tufts in a staggered position. The bristles are 0.41 mm (0.016 in) in diameter and 19 mm (0.75 in) in length. There are 20 bristles per tuft and 4 tufts per inch. See Figure 6 of this part. A clamp is attached to the forward edge of the movable carriage to permit holding the specimen on the carriage during the brushing operation. The purpose of the metal plate or “template” on the carriage of the brushing device is to support the specimen during the brushing operation. The template shall be 3.2 mm (0.13 in) thick. See Figure 5 of this part. § 1610.6 Test procedure. The test procedure is divided into two steps. Step 1 is testing in the “as received” or original state; Step 2 is testing after the fabric has been refurbished according to paragraph (b)(1) of this section.
(a)*Step 1—Testing in the “as received” or original state.*
(1)Tests shall be conducted on the fabric in a form or state ready for use in wearing apparel. Determine whether the fabric to be tested is a plain surface textile fabric or a raised surface textile fabric as defined in § 1610.2
(k)and (l). There are some fabrics that require extra attention when preparing test specimens because of their particular construction characteristics. Examples of these fabrics are provided in paragraphs (a)(1)(i) through
(vi)of this section along with guidelines for preparing specimens from these fabrics. This information is not intended to be all-inclusive.
(i)*Flocked fabrics.* Fabrics that are flocked overall are treated as raised surface textile fabrics as defined in § 1610.2(l). Flock printed fabrics (usually in a pattern and not covering the entire surface) shall be treated as plain surface textile fabrics as defined in § 1610.2(k).
(ii)*Cut velvet fabrics.* Cut velvet fabrics with a patterned construction shall be considered a raised surface textile fabric as defined in § 1610.2(l).
(iii)*Metallic thread fabrics.* Metallic thread fabrics shall be considered plain surface textile fabrics provided the base fabric is smooth. The specimens shall be cut so that the metallic thread is parallel to the long dimension of the specimen and arranged so the test flame impinges on a metallic thread.
(iv)*Embroidery.* Embroidery on netting material shall be tested with two sets of preliminary specimens to determine the most flammable area (which offers the greatest amount of netting or embroidery in the 150 mm (6 in.) direction). One set of netting only shall be tested and the other set shall consist mainly of embroidery with the specimens cut so that the test flame impinges on the embroidered area. Test the most flammable area according to the plain surface textile fabric requirements. The full test shall be completed on a sample cut from the area that has the fastest burn rate.
(v)*Burn-out patterns.* Flat woven constructions with burn-out patterns shall be considered plain surface textile fabrics as defined in § 1610.2(k).
(vi)*Narrow fabrics and loose fibrous materials.* Narrow fabrics and loose fibrous materials manufactured less than 50 mm (2 in) in width in either direction shall not be tested. If a 50 mm by 150 mm (2 in by 6 in) specimen cannot be cut due to the nature of the item, i.e. hula skirts, leis, fringe, loose feathers, wigs, hairpieces, etc., do not conduct a test.
(2)*Plain surface textile fabrics* —(i) *Preliminary trials.* Conduct preliminary trials to determine the quickest burning direction. The specimen size shall be 50 mm by 150 mm (2 in by 6 in). Cut one specimen from each direction of the fabric. Identify the fabric direction being careful not to make any identifying marks in the exposed area to be tested. Preliminary specimens shall be mounted and conditioned as described in paragraphs (a)(2)(ii) through
(iv)of this section and then tested following the procedure in paragraph
(c)of this section to determine if there is a difference in the burning characteristics with respect to the direction of the fabric.
(ii)*Identify and cut test specimens.* Cut the required number of test specimens to be tested (refer to § 1610.7(b)(1)). Each specimen shall be 50 mm by 150 mm (2 in by 6 in), with the long dimension in the direction in which burning is most rapid as established in the preliminary trials. Be careful not to make any identifying marks in the exposed area to be tested.
(iii)*Mount specimens.* Specimens shall be placed in the holders, with the side to be burned face up. Even though plain surface textile fabrics are not brushed, all specimens shall be mounted in a specimen holder placed on the carriage that rides on the brushing device to ensure proper position in the holder. A specimen shall be placed between the two metal plates of a specimen holder and clamped. Each specimen shall be mounted and clamped prior to conditioning and testing.
(iv)*Condition specimens.* All specimens mounted in the holders shall then be placed in a horizontal position on an open metal shelf in the oven to permit free circulation of air around them. The specimens shall be dried in the oven for 30 ± 2 minutes at 105° ± 3 °C (221° ± 5 °F), removed from the oven and placed over a bed of anhydrous silica gel desiccant in a desiccator until cool, but not less than 15 minutes.
(v)*Flammability test.* Follow the test procedure in paragraph
(c)of this section and also follow the test sequence in § 1610.7(b)(1).
(3)*Raised surface textile fabrics.* —(i) *Preliminary trials.* The most flammable surface of the fabric shall be tested. Conduct preliminary trials and/or visual examination to determine the quickest burning area. The specimen size shall be 50 mm by 150 mm (2 in by 6 in). For raised surface textile fabrics, the direction of the lay of the surface fibers shall be parallel with the long dimension of the specimen. Specimens shall be taken from that part of the raised fiber surface that appears to have the fastest burn time. For those fabrics where it may be difficult to visually determine the correct direction of the lay of the raised surface fibers, preliminary tests can be done to determine the direction of the fastest burn time. For textiles with varying depths of pile, tufting, etc., the preliminary test specimens are taken from each depth of pile area to determine which exhibits the quickest rate of burning. A sufficient number of preliminary specimens shall be tested to provide adequate assurance that the raised surface textile fabric will be tested in the quickest burning area. Preliminary specimens shall be mounted and conditioned as described below and tested following the procedure in paragraph
(c)of this section.
(ii)*Identify and cut test specimens.* Cut the required number of specimens (refer to § 1610.7(b)(3)) to be tested. Each specimen shall be 50 mm by 150 mm (2 in by 6 in), with the specimen taken from the direction in which burning is most rapid as established in the preliminary trials and/or visual examination. Be careful not to make any identifying marks in the exposed area to be tested.
(iii)*Mount specimens.* Prior to mounting the specimen, run a fingernail along the 150 mm (6 in) edge of the fabric not more than 6.4 mm (0.25 in) in from the side to determine the lay of the surface fibers. All specimens shall be mounted in a specimen holder placed on the carriage that rides on the brushing device. The specimens shall be mounted with the side to be burned face up and positioned so the lay of the surface fibers is going away from the closed end of the specimen holder. The specimen must be positioned in this manner so that the brushing procedure described in paragraph (a)(3)(iv) of this section will raise the surface fibers, i.e., the specimen is brushed against the direction of the lay of the surface fibers. The specimen shall be placed between the two metal plates of the specimen holder and clamped.
(iv)*Brush specimens.* After mounting in the specimen holder (and with the holder still on the carriage that rides on the brushing device) each specimen shall be brushed one time. The carriage is pushed to the rear of the brushing device, and the brush lowered to the face of the specimen. The carriage shall be drawn forward by hand once against the lay of the surface fibers at a uniform rate. Brushing of a specimen shall be performed with the specimen mounted in a specimen holder. The purpose of the metal plate or “template” on the carriage of the brushing device is to support the specimen during the brushing operation.
(v)*Condition specimens.* All specimens (mounted and brushed) in the holders shall be then placed in a horizontal position on an open metal shelf in the oven to permit free circulation of air around them. The specimens shall be dried in the oven for 30 ± 2 minutes at 105° ± 3 °C (221° ± 5 °F) removed from the oven and placed over a bed of anhydrous silica gel dessicant in a desiccator until cool, but not less than 15 minutes.
(vi)*Conduct flammability test.* Follow the procedure in paragraph
(c)of this section and follow the test sequence in § 1610.7(b)(3).
(b)*Step 2—Refurbishing and testing after refurbishing.*
(1)The refurbishing procedures are the same for both plain surface textile fabrics and raised fiber surface textile fabrics. Those samples that result in a Class 3, Rapid and Intense Burning after Step 1 testing in the “as received” or original state shall not be refurbished and do not undergo Step 2.
(i)*Dry cleaning procedure.*
(A)All samples shall be dry cleaned before they undergo the laundering procedure. Samples shall be dry cleaned in a commercial dry cleaning machine, using the following prescribed conditions: Solvent: Perchloroethylene, commercial grade Detergent class: Cationic Cleaning time: 10-15 minutes Extraction time: 3 minutes Drying Temperature: 60 − 66 °C (140 − 150 °F) Drying Time: 18-20 minutes Cool Down/Deodorization time: 5 minutes
(B)Samples shall be dry cleaned in a load that is 80% of the machine's capacity. If necessary, ballast consisting of clean textile pieces or garments, white or light in color and consisting of approximately 80% wool and 20% polyester, shall be used.
(ii)*Laundering procedure.* The sample, after being subjected to the dry cleaning procedure, shall be washed and dried one time in accordance with sections 8.2.2, 8.2.3 and 8.3.1(A) of AATCC Test Method 124-2001 “Appearance of Fabrics after Repeated Home Laundering.” Washing shall be performed in accordance with sections 8.2.2 and 8.2.3 of AATCC Test Method 124-2001 using wash water temperature
(V)(149° ± 5 °F; 60° ± 3 °C) specified in Table II of that method, and the water level, agitator speed, washing time, spin speed and final spin cycle specified for “Normal/Cotton Sturdy” in Table III. A maximum wash load shall be 8 pounds (3.63 kg) and may consist of any combination of test samples and dummy pieces. Drying shall be performed in accordance with section 8.3.1(A) of that test method, Tumble Dry, using the exhaust temperature (150° ± 10 °F; 66° ± 5 °C) and cool down time of 10 minutes specified in the “Durable Press” conditions of Table IV.
(2)*Testing plain surface textile fabrics after refurbishing.* The test procedure is the same as for Step 1—Testing in the “as received” or original state described in paragraph (a)(1) of this section; also follow the test sequence § 1610.7(b)(2).
(3)*Testing raised fiber surface textile fabrics after refurbishing.* The test procedure is the same as for Step 1—Testing in the “as received” or original state as described in paragraph (a)(3) of this section; also follow the test sequence in § 1610.7(b)(4).
(c)*Procedure for testing flammability.*
(1)The test chamber shall be located under the hood (or other suitable enclosure) with the fan turned off. Open the control valve in the fuel supply. Allow approximately 5 minutes for the air to be drawn from the fuel line, ignite the gas and adjust the test flame to a length of 16 mm ( 5/8 in), measured from its tip to the opening in the gas nozzle.
(2)Remove one mounted specimen from the desiccator at a time and place it in a position on the rack in the chamber of the apparatus. Thick fabrics may require adjustment of the specimen rack so that the tip of the indicator finger just touches the surface of the specimen.
(3)Adjust the position of the specimen rack of the flammability test chamber so that the tip of the indicator finger just touches the face of the mounted specimen.
(4)String the stop thread through the guides in the upper plate of the specimen holder across the top of the specimen, and through any other thread guide(s) of the chamber. Hook the stop weight in place close to and just below the stop weight thread guide. Set the timing mechanism to zero. Close the door of the flammability test chamber.
(5)Begin the test within 45 seconds of the time the specimen was removed from the desiccator. Activate the trigger device to impinge the test flame. The trigger device controls the impingement of the test flame onto the specimen and starts the timing device. The timing is automatic and stops when the weight is released by the severing of the stop thread.
(6)At the end of each test, turn on the hood fan to exhaust any fumes or smoke produced during the test.
(7)Record the burn time (reading of the timer) for each specimen, along with visual observation using the test result codes given in § 1610.8. If there is no burn time, record the visual observation using the test result codes. Please note for raised fiber surface textile fabrics, specimens should be allowed to continue burning, even though a burn rate is measured, to determine if the base fabric will fuse.
(8)After exhausting all fumes and smoke produced during the test, turn off the fan before testing the next specimen. § 1610.7 Test sequence and classification criteria.
(a)*Preliminary and final classifications.* Preliminary classifications are assigned based on the test results both before and after refurbishing. The final classification shall be the preliminary classification before or after refurbishing, whichever is the more severe flammability classification.
(b)*Test sequence and classification criteria.*
(1)Step 1, Plain Surface Textile Fabrics in the “as received” or original state.
(i)Conduct preliminary tests in accordance with § 1610.6(a)(2)(i) to determine the fastest burning direction of the fabric.
(ii)Prepare and test five specimens from the fastest burning direction. The burn times determine whether to assign the preliminary classification and proceed to § 1610.6(b) or to test five additional specimens.
(iii)Assign the preliminary classification of Class 1, Normal Flammability and proceed to § 1610.6(b) when:
(A)There are no burn times; or
(B)There is only one burn time and it is equal to or greater than 3.5 seconds; or
(C)The average burn time of two or more specimens is equal to or greater than 3.5 seconds.
(iv)Test five additional specimens when there is either only one burn time, and it is less than 3.5 seconds; or there is an average burn time of less than 3.5 seconds. Test these five additional specimens from the fastest burning direction as previously determined by the preliminary specimens. The burn times for the 10 specimens determine whether to:
(A)Stop testing and assign the final classification as Class 3, Rapid and Intense Burning only when there are two or more burn times with an average burn time of less than 3.5 seconds; or
(B)Assign the preliminary classification of Class 1, Normal Flammability and proceed to § 1610.6(b) when there are two or more burn times with an average burn time of 3.5 seconds or greater.
(v)If there is only one burn time out of the 10 test specimens, the test is inconclusive. The fabric cannot be classified.
(2)Step 2, Plain Surface Textile Fabrics after refurbishing in accordance with § 1610.6(b)(1).
(i)Conduct preliminary tests in accordance with § 1610.6(a)(2)(i) to determine the fastest burning direction of the fabric.
(ii)Prepare and test five specimens from the fastest burning direction. The burn times determine whether to stop testing and assign the preliminary classification or to test five additional specimens.
(iii)Stop testing and assign the preliminary classification of Class 1, Normal Flammability, when:
(A)There are no burn times; or
(B)There is only one burn time, and it is equal to or greater than 3.5 seconds; or
(C)There is an average burn time 3.5 seconds or greater.
(iv)Test five additional specimens when there is only one burn time, and it is less than 3.5 seconds; or there is an average burn time less than 3.5 seconds. Test five additional specimens from the fastest burning direction as previously determined by the preliminary specimens. The burn times for the 10 specimens determine the preliminary classification when:
(A)There are two or more burn times with an average burn time of 3.5 seconds or greater. The preliminary classification is Class 1, Normal Flammability; or
(B)There are two or more burn times with an average burn time of less than 3.5 seconds. The preliminary and final classification is Class 3, Rapid and Intense Burning; or
(v)If there is only one burn time out of the 10 specimens, the test results are inconclusive. The fabric cannot be classified.
(3)Step 1, Raised Surface Textile Fabric in the “as received” or original state.
(i)Determine the area to be most flammable per § 1610.6(a)(3)(i).
(ii)Prepare and test five specimens from the most flammable area. The burn times and visual observations determine whether to assign a preliminary classification and proceed to § 1610.6(b) or to test five additional specimens.
(iii)Assign the preliminary classification and proceed to § 1610.6(b) when:
(A)There are no burn times. The preliminary classification is Class 1, Normal Flammability; or
(B)There is only one burn time and it is less than 4 seconds without a base burn, or it is 4 seconds or greater with or without a base burn. The preliminary classification is Class 1, Normal Flammability; or
(C)There are no base burns regardless of the burn time(s). The preliminary classification is Class 1, Normal Flammability; or
(D)There are two or more burn times with an average burn time of 0-7 seconds with a surface flash only. The preliminary classification is Class 1, Normal Flammability; or
(E)There are two or more burn times with an average burn time greater than 7 seconds with any number of base burns. The preliminary classification is Class 1, Normal Flammability; or
(F)There are two or more burn times with an average burn time of 4 through 7 seconds (both inclusive) with no more than one base burn. The preliminary classification is Class 1, Normal Flammability; or
(G)There are two or more burn times with an average burn time less than 4 seconds with no more than one base burn. The preliminary classification is Class 1, Normal Flammability; or
(H)There are two or more burn times with an average burn time of 4 through 7 seconds (both inclusive) with two or more base burns. The preliminary classification is Class 2, Intermediate Flammability.
(iv)Test five additional specimens when the tests of the initial five specimens result in either of the following: There is only one burn time and it is less than 4 seconds with a base burn; or the average of two or more burn times is less than 4 seconds with two or more base burns. Test these five additional specimens from the most flammable area. The burn times and visual observations for the 10 specimens will determine whether to:
(A)Stop testing and assign the final classification only if the average burn time for the 10 specimens is less than 4 seconds with three or more base burns. The final classification is Class 3, Rapid and Intense Burning; or
(B)Assign the preliminary classification and continue on to § 1610.6(b) when: *(1)* The average burn time is less than 4 seconds with no more than two base burns. The preliminary classification is Class 1, Normal Flammability; or *(2)* The average burn time is 4-7 seconds (both inclusive) with no more than 2 base burns. The preliminary classification is Class 1, Normal Flammability, or *(3)* The average burn time is greater than 7 seconds. The preliminary classification is Class 1, Normal Flammability; or *(4)* The average burn time is 4 through 7 seconds (both inclusive) with three or more base burns. The preliminary classification is Class 2, Intermediate Flammability, or
(v)If there is only one burn time out of the 10 specimens, the test is inconclusive. The fabric cannot be classified.
(4)Step 2, Raised Surface Textile Fabric After Refurbishing in accordance with § 1610.6(b).
(i)Determine the area to be most flammable in accordance with § 1610.6(a)(3)(i).
(ii)Prepare and test five specimens from the most flammable area. Burn times and visual observations determine whether to stop testing and determine the preliminary classification or to test five additional specimens.
(iii)Stop testing and assign the preliminary classification when:
(A)There are no burn times. The preliminary classification is Class 1, Normal Flammability; or
(B)There is only one burn time, and it is less than 4 seconds without a base burn; or it is 4 seconds or greater with or without a base burn. The preliminary classification is Class 1, Normal Flammability; or
(C)There are no base burns regardless of the burn time(s). The preliminary classification is Class 1, Normal Flammability; or
(D)There are two or more burn times with an average burn time of 0 to 7 seconds with a surface flash only. The preliminary classification is Class 1, Normal Flammability; or
(E)There are two or more burn times with an average burn time greater than 7 seconds with any number of base burns. The preliminary classification is Class 1, Normal Flammability; or
(F)There are two or more burn times with an average burn time of 4 through 7 seconds (both inclusive) with no more than one base burn. The preliminary classification is Class 1, Normal Flammability; or
(G)There are two or more burn times with an average burn time less than 4 seconds with no more than one base burn. The preliminary classification is Class 1, Normal Flammability; or
(H)There are two or more burn times with an average burn time of 4 through 7 seconds (both inclusive) with two or more base burns. The preliminary classification is Class 2, Intermediate Flammability.
(iv)Test five additional specimens when the tests of the initial five specimens result in either of the following: There is only one burn time, and it is less than 4 seconds with a base burn; or the average of two or more burn times is less than 4 seconds with two or more base burns.
(v)If required, test five additional specimens from the most flammable area. The burn times and visual observations for the 10 specimens determine the preliminary classification when:
(A)The average burn time is less than 4 seconds with no more than two base burns. The preliminary classification is Class 1, Normal Flammability; or
(B)The average burn time is less than 4 seconds with three or more base burns. The preliminary and final classification is Class 3, Rapid and Intense Burning; or
(C)The average burn time is greater than 7 seconds. The preliminary classification is Class 1, Normal flammability; or
(D)The average burn time is 4-7 seconds (both inclusive), with no more than two base burns. The preliminary classification is Class 1, Normal Flammability; or
(E)The average burn time is 4-7 seconds (both inclusive), with three or more base burns. The preliminary classification is Class 2, Intermediate Flammability; or
(vi)If there is only one burn time out of the 10 specimens, the test is inconclusive. The fabric cannot be classified. § 1610.8 Reporting results.
(a)The reported result shall be the classification before or after refurbishing, whichever is the more severe; and based on this result, the textile shall be placed in the proper final classification as described in § 1610.4.
(b)*Test result codes.* The following are the definitions for the test result codes, which shall be used for recording flammability results for each specimen that is burned.
(1)For Plain Surface Textile Fabrics: DNI Did not ignite IBE Ignited, but extinguished *IBE Ignited, but extinguished, the asterisk (*) denotes a burn that goes under the stop thread without breaking the stop thread. _._ sec. Actual burn time measured and recorded by the timing device in 0.0 seconds.
(2)For Raised Surface Textile Fabrics: SF uc Surface flash, under the stop thread, but does not break the stop thread. SF pw Surface flash, part way. No time shown because the surface flash did not reach the stop thread. SF poi Surface flash, at the point of impingement only (equivalent to “did not ignite” for plain surfaces). _._ sec. Actual burn time measured by the timing device in 0.0 seconds. _._ SF only Time in seconds, surface flash only. No damage to the base fabric. _._ SFBB Time in seconds, surface flash base burn. Base starts burning at points other than the point of impingement. _._ SFBB poi Time in seconds, surface flash base burn starting at the point of impingement. _._ SFBB poi* Time in seconds, surface flash base burn possibly starting at the point of impingement. The asterisk is accompanied by the following statement: “Unable to make absolute determination as to source of base burns.” This statement is added to the result of any specimen if there is a question as to origin of the base burn. Subpart B—Rules and Regulations § 1610.31 Definitions. In addition to the definitions provided in section 2 of the Flammable Fabrics Act as amended (15 U.S.C. 1191), and in § 1610.2 of the Standard, the following definitions apply for this subpart.
(a)*Act* means the “Flammable Fabrics Act” (approved June 30, 1953, Pub. Law 88, 83d Congress, 1st sess., 15 U.S.C. 1191; 67 Stat. 111) as amended, 68 Stat. 770, August 23, 1954.
(b)*Rule, rules, regulations, and rules and regulations,* mean the rules and regulations prescribed by the Commission pursuant to section 5(c) of the act.
(c)*United States* means, the several States, the District of Columbia, the Commonwealth of Puerto Rico and the Territories, and Possessions of the United States.
(d)*Marketing or handling* means the transactions referred to in section 3 of the Flammable Fabrics Act, as amended in 1967.
(e)*Test* means the application of the relevant test method prescribed in the procedures provided under section 4(a) of the Act (16 CFR part 1609).
(f)*Finish type* means a particular finish, but does not include such variables as changes in color, pattern, print, or design, or minor variations in the amount or type of ingredients in the finish formulation. Examples of finish types would be starch finishes, resin finishes or parchmentized finishes.
(g)*Uncovered or exposed part* means that part of an article of wearing apparel that might during normal wear be open to flame or other means of ignition. The outer surface of an undergarment is considered to be an uncovered or exposed part of an article of wearing apparel, and thus subject to the Act. Other examples of exposed parts of an article of wearing apparel subject to the Act include, but are not limited to:
(1)Linings, with exposed areas, such as full front zippered jackets;
(2)Sweatshirts with exposed raised fiber surface inside and capable of being worn napped side out;
(3)Unlined hoods;
(4)Rolled cuffs. § 1610.32 General requirements. No article of wearing apparel or fabric subject to the Act and regulations shall be marketed or handled if such article or fabric, when tested according to the procedures prescribed in section 4(a) of the Act (16 CFR part 1609), is so highly flammable as to be dangerous when worn by individuals. § 1610.33 Test procedures for textile fabrics and film. (a)(1) All textile fabrics (except those with a nitro-cellulose fiber, finish or coating) intended or sold for use in wearing apparel, and all such fabrics contained in articles of wearing apparel, shall be subject to the requirements of the Act, and shall be deemed to be so highly flammable as to be dangerous when worn by individuals if such fabrics or any uncovered or exposed part of such articles of wearing apparel exhibits rapid and intense burning when tested under the conditions and in the manner prescribed in subpart A of this part 1610.
(2)Notwithstanding the provisions of paragraph (a)(1) of this section, coated fabrics, except those with a nitro-cellulose coating, may be tested under the procedures outlined in part 1611, Standard for the Flammability of Vinyl Plastic Film, and if such coated fabrics do not exhibit a rate of burning in excess of that specified in § 1611.3 they shall not be deemed to be so highly flammable as to be dangerous when worn by individuals.
(b)All film, and textile fabrics with a nitro-cellulose fiber, finish or coating intended or sold for use in wearing apparel, and all film and such textile fabrics referred to in this rule which are contained in articles of wearing apparel, shall be subject to the requirements of the Act, and shall be deemed to be so highly flammable as to be dangerous when worn by individuals if such film or such textile fabrics or any uncovered or exposed part of such articles of wearing apparel exhibit a rate of burning in excess of that specified in part 1611, Standard for the Flammability of Vinyl Plastic Film. § 1610.34 Only uncovered or exposed parts of wearing apparel to be tested.
(a)In determining whether an article of wearing apparel is so highly flammable as to be dangerous when worn by individuals, only the uncovered or exposed part of such article of wearing apparel shall be tested according to the applicable procedures set forth in § 1610.6.
(b)If the outer layer of plastic film or plastic-coated fabric of a multilayer fabric separates readily from the other layers, the outer layer shall be tested under part 1611—Standard for the Flammability of Vinyl Plastic Film. If the outer layer adheres to all or a portion of one or more layers of the underlaying fabric, the multi-layered fabric may be tested under either part 1610—Standard for the Flammability of Clothing Textiles or part 1611. However, if the conditioning procedures required by § 1610.6(a)(2)(iv) and § 1610.6(a)(3)(v) would damage or alter the physical characteristics of the film or coating, the uncovered or exposed layer shall be tested in accordance with part 1611.
(c)Plastic film or plastic-coated fabric used, or intended for use as the outer layer of disposable diapers is exempt from the requirements of the Standard, provided that a sample taken from a full thickness of the assembled article passes the test in the Standard (part 1610 or part 1611) otherwise applicable to the outer fabric or film when the flame is applied to the exposed or uncovered surface. See § 1610.36(f) and § 1611.36(f). § 1610.35 Procedures for testing special types of textile fabrics under the standard.
(a)*Fabric not customarily washed or dry cleaned.*
(1)Except as provided in paragraph (a)(2) of this section, any textile fabric or article of wearing apparel which, in its normal and customary use as wearing apparel would not be dry cleaned or washed, need not be dry cleaned or washed as prescribed in § 1610.6(b) when tested under the Standard if such fabric or article of wearing apparel, when marketed or handled, is marked in a clear and legible manner with the statement: “Fabric may be dangerously flammable if dry cleaned or washed.” An example of the type of fabric referred to in this paragraph is bridal illusion.
(2)Section 1610.3, which requires that all textiles shall be refurbished before testing, shall not apply to disposable fabrics and garments. Additionally, such disposable fabrics and garments shall not be subject to the labeling requirements set forth in paragraph (a)(1) of this section.
(b)A coated fabric need not, upon test under the procedures outlined in subpart A of part 1610, be dry cleaned as set forth in § 1610.6(b)(1)(i).
(c)In determining whether a textile fabric having a raised-fiber surface, which surface is to be used in the covered or unexposed parts of articles of wearing apparel, is so highly flammable as to be dangerous when worn by individuals, only the opposite surface or surface intended to be exposed need be tested under the applicable procedures set forth in § 1610.6, providing an invoice or other paper covering the marketing or handling of such fabric is given which clearly designates that the raised-fiber surface is to be used only in the covered or unexposed parts of articles of wearing apparel. § 1610.36 Application of Act to particular types of products.
(a)*Interlinings.* Fabrics intended or sold for processing into interlinings or other covered or unexposed parts of articles of wearing apparel shall not be subject to the provisions of section 3 of the Act: *Provided,* that an invoice or other paper covering the marketing or handling of such fabrics is given which specifically designates their intended end use: *And provided further* , that with respect to fabrics which under the provisions of section 4 of the Act, as amended, are so highly flammable as to be dangerous when worn by individuals, any person marketing or handling such fabrics maintains records which show the acquisition, disposition and intended end use of such fabrics, and any person manufacturing articles of wearing apparel containing such fabrics maintains records which show the acquisition, and use and disposition of such fabrics. Any person who fails to maintain such records or to furnish such invoice or other paper shall be deemed to have engaged in the marketing or handling of such products for purposes subject to the requirements of the Act and such person and the products shall be subject to the provisions of sections 3, 6, 7, and 9 of the Act.
(b)*Hats, gloves, and footwear.* Fabrics intended or sold for use in those hats, gloves, and footwear which are excluded under the definition of articles of wearing apparel in section 2(d) of the Act shall not be subject to the provisions of section 3 of the Act: *Provided* , that an invoice or other paper covering the marketing or handling of such fabrics is given which specifically designates their intended use in such products: *And provided further* , that with respect to fabrics which under the provisions of section 4 of the Act, as amended, are so highly flammable as to be dangerous when worn by individuals, any person marketing or handling such fabrics maintains records which show the acquisition, disposition, and intended end use of such fabrics, and any person manufacturing hats, gloves, or footwear containing such fabrics maintains records which show the acquisition, end use and disposition of such fabrics. Any person who fails to maintain such records or to furnish such invoice or other paper shall be deemed to have engaged in the marketing or handling of such products for purposes subject to the requirements of the Act and such person and the products shall be subject to the provisions of sections 3, 6, 7, and 9 of the Act.
(c)*Veils and hats.*
(1)Ornamental millinery veils or veilings when used as a part of, in conjunction with, or as a hat, are not to be considered such a “covering for the neck, face, or shoulders” as would, under the first proviso of section 2(d) of the Act, cause the hat to be included within the definition of the term “article of wearing apparel” where such ornamental millinery veils or veilings do not extend more than nine
(9)inches from the tip of the crown of the hat to which they are attached and do not extend more than two
(2)inches beyond the edge of the brim of the hat.
(2)Where hats are composed entirely of ornamental millinery veils or veilings such hats will not be considered as subject to the Act if the veils or veilings from which they are manufactured were not more than nine
(9)inches in width and do not extend more than nine
(9)inches from the tip of the crown of the completed hat.
(d)*Handkerchiefs.*
(1)Except as provided in paragraph (d)(2) of this section, handkerchiefs not exceeding a finished size of twenty-four
(24)inches on any side or not exceeding five hundred seventy-six
(576)square inches in area are not deemed “articles of wearing apparel” as that term is used in the Act.
(2)Handkerchiefs or other articles affixed to, incorporated in, or sold as a part of articles of wearing apparel as decoration, trimming, or for any other purpose, are considered an integral part of such articles of wearing apparel, and the articles of wearing apparel and all parts thereof are subject to the provisions of the Act. Handkerchiefs or other articles intended or sold to be affixed to, incorporated in or sold as a part of articles of wearing apparel as aforesaid constitute “fabric” as that term is defined in section 2(e) of the Act and are subject to the provisions of the Act, such handkerchiefs or other articles constitute textile fabrics as the term “textile fabric” is defined in § 1610.2(r).
(3)If, because of construction, design, color, type of fabric, or any other factor, a piece of cloth of a finished type or any other product of a finished type appears to be likely to be used as a covering for the head, neck, face, shoulders, or any part thereof, or otherwise appears likely to be used as an article of clothing, garment, such product is not a handkerchief and constitutes an article of wearing apparel as defined in and subject to the provisions of the Act, irrespective of its size, or its description or designation as a handkerchief or any other term.
(e)*Raised-fiber surface wearing apparel.* Where an article of wearing apparel has a raised-fiber surface which is intended for use as a covered or unexposed part of the article of wearing apparel but the article of wearing apparel is, because of its design and construction, capable of being worn with the raised-fiber surface exposed, such raised-fiber surface shall be considered to be an uncovered or exposed part of the article of wearing apparel. Examples of the type of products referred to in this paragraph are athletic shirts or so-called “sweat shirts” with a raised-fiber inner side.
(f)*Multilayer fabric and wearing apparel with a film or coating on the uncovered or exposed surface.* Plastic film or plastic-coated fabric used, or intended for use, as the outer layer of disposable diapers is exempt from the requirements of the standard, provided that a full thickness of the assembled article passes the test in the standard otherwise applicable to the outer fabric or film when the flame is applied to the exposed or uncovered surface. § 1610.37 Reasonable and representative tests to support guaranties.
(a)*Purpose.* The purpose of this § 1610.37 is to establish requirements for reasonable and representative tests to support initial guaranties of products, fabrics, and related materials which are subject to the Standard for the Flammability of Clothing Textiles (the Standard, 16 CFR part 1610).
(b)*Statutory provisions.*
(1)Section 8(a) of the Act (15 U.S.C. 1197(a)) provides that no person shall be subject to criminal prosecution under section 7 of the Act (15 U.S.C. 1196) for a violation of section 3 of the Act (15 U.S.C. 1192) if such person establishes a guaranty received in good faith to the effect that the product, fabric, or related material complies with the applicable flammability standard. A guaranty does not provide the holder any defense to an administrative action for an order to cease and desist from violation of the applicable standard, the Act, and the Federal Trade Commission Act (15 U.S.C. 45), nor to any civil action for injunction or seizure brought under section 6 of the Act (15 U.S.C. 1195).
(2)Section 8 of the Act provides for two types of guaranties:
(i)An initial guaranty based on “reasonable and representative tests” made in accordance with the applicable standard issued under the Act; and
(ii)A guaranty based on a previous guaranty, received in good faith, to the effect that reasonable and representative tests show conformance with the applicable standard.
(c)*Requirements.*
(1)Each person or firm issuing an initial guaranty of a product, fabric, or related material subject to the Standard shall devise and implement a program of reasonable and representative tests to support such a guaranty.
(2)The term program of reasonable and representative tests as used in this § 1610.37 means at least one test with results demonstrating conformance with the Standard for the product, fabric or related material which is the subject of an initial guaranty. The program of reasonable and representative tests required by this § 1610.37 may include tests performed before the effective date of this section, and may include tests performed by persons or firms outside of the territories of the United States or other than the one issuing the initial guaranty. The number of tests and the frequency of testing shall be left to the discretion of the person or firm issuing the initial guaranty.
(3)In the case of an initial guaranty of a fabric or related material, a program of reasonable and representative tests may consist of one or more tests of the particular fabric or related material which is the subject of the guaranty, or of a fabric or related material of the same “class” of fabrics or related materials as the one which is the subject of the guaranty. For purposes of this § 1610.37, the term class means a category of fabrics or related materials having general constructional or finished characteristics, sometimes in association with a particular fiber, and covered by a class or type description generally recognized in the trade. § 1610.38 Maintenance of records by those furnishing guaranties.
(a)Any person or firm issuing an initial guaranty of a product, fabric, or related material which is subject to the Standard for the Flammability of Clothing Textiles (the Standard, 16 CFR part 1610) shall keep and maintain a record of the test or tests relied upon to support that guaranty. The records to be maintained shall show:
(1)The style or range number, fiber composition, construction and finish type of each textile fabric or related material covered by an initial guaranty; or the identification, fiber composition, construction and finish type of each textile fabric (including those with a nitrocellulose fiber, finish or coating), and of each related material, used or contained in a product of wearing apparel covered by an initial guaranty.
(2)The results of the actual test or tests made of the textile fabric or related material covered by an initial guaranty; or of any fabric or related material used in the product of wearing apparel covered by an initial guaranty.
(3)When the person or firm issuing an initial guaranty has conducted the test or tests relied upon to support that guaranty, that person or firm shall also include with the information required by paragraphs (a)(1) and
(2)of this section, a sample of each fabric or related material which has been tested.
(b)Persons furnishing guaranties based upon class tests shall maintain records showing:
(1)Identification of the class test.
(2)Fiber composition, construction and finish type of the fabrics, or the fabrics used or contained in articles of wearing apparel so guaranteed.
(3)A swatch of each class of fabrics guaranteed.
(c)Persons furnishing guaranties based upon guaranties received by them shall maintain records showing the guaranty received and identification of the fabrics or fabrics contained in articles of wearing apparel guaranteed in turn by them.
(d)The records referred to in this section shall be preserved for a period of 3 years from the date the tests were performed, or in the case of paragraph
(c)of this section from the date the guaranties were furnished.
(e)Any person furnishing a guaranty under section 8(a) of the Act who neglects or refuses to maintain and preserve the records prescribed in this section shall be deemed to have furnished a false guaranty under the provisions of section 8(b) of the Act. § 1610.39 Shipments under section 11(c) of the Act.
(a)The invoice or other paper relating to the shipment or delivery for shipment in commerce of articles of wearing apparel or textile fabrics for the purpose of finishing or processing to render them not so highly flammable as to be dangerous when worn by individuals, shall contain a statement disclosing such purpose.
(b)An article of wearing apparel or textile fabric shall not be deemed to fall within the provisions of section 11(c) of the Act as being shipped or delivered for shipment in commerce for the purpose of finishing or processing to render such article of wearing apparel or textile fabric not so highly flammable under section 4 of the Act, as to be dangerous when worn by individuals, unless the shipment or delivery for shipment in commerce of such article of wearing apparel or textile fabric is made directly to the person engaged in the business of processing or finishing textile products for the prearranged purpose of having such article of apparel or textile fabric processed or finished to render it not so highly flammable under section 4 of the Act, as to be dangerous when worn by individuals, and any person shipping or delivering for shipment the article of wearing apparel or fabric in commerce for such purpose maintains records which establish that the textile fabric or article of wearing apparel has been shipped for appropriate flammability treatment, and that such treatment has been completed, as well as records to show the disposition of such textile fabric or article of wearing apparel subsequent to the completion of such treatment.
(c)The importation of textile fabrics or articles of wearing apparel may be considered as incidental to a transaction involving shipment or delivery for shipment for the purpose of rendering such textile fabrics or articles of wearing apparel not so highly flammable under the provisions of section 4 of the Act, as to be dangerous when worn by individuals, if:
(1)The importer maintains records which establish that:
(i)the imported textile fabrics or articles of wearing apparel have been shipped for appropriate flammability treatment, and
(ii)Such treatment has been completed, as well as records to show the disposition of such textile fabrics or articles of wearing apparel subsequent to the completion of such treatment.
(2)The importer, at the time of importation, executes and furnishes to the U.S. Customs and Border Protection an affidavit stating: These fabrics (or articles of wearing apparel) are dangerously flammable under the provisions of section 4 of the Act, and will not be sold or used in their present condition but will be processed or finished by the undersigned or by a duly authorized agent so as to render them not so highly flammable under the provisions of section 4 of the Flammable Fabrics Act, as to be dangerously flammable when worn by individuals. The importer agrees to maintain the records required by 16 CFR 1610.39(c)(1).
(3)The importer, if requested to do so by the U.S. Customs and Border Protection, furnishes an adequate specific-performance bond conditioned upon the complete discharge of the obligations assumed in paragraphs
(1)and
(2)of this section.
(d)The purpose of section 11(c) of the Act is only to permit articles of wearing apparel or textile fabrics which are dangerously flammable to be shipped or delivered for shipment in commerce for the purpose of treatment or processing to render them not dangerously flammable. Section 11(c) does not in any other respect limit the force and effect of sections 3, 6, 7, and 9 of the Act. In particular, section 11(c) does not authorize the sale or offering for sale of any article of wearing apparel or textile fabric which is in fact dangerously flammable at the time of sale or offering for sale, even though the seller intends to ship the article for treatment prior to delivery to the purchaser or has already done so. Moreover, under section 3 of the Act a person is liable for a subsequent sale or offering for sale if, despite the purported completion of treatment to render it not dangerously flammable, the article in fact remains dangerously flammable. § 1610.40 Use of alternate apparatus, procedures, or criteria for tests for guaranty purposes.
(a)Section 8(a) of the Act provides that no person shall be subject to criminal prosecution under section 7 of the Act (15 U.S.C. 1196) for a violation of section 3 of the Act (15 U.S.C. 1192) if that person establishes a guaranty received in good faith which meets all requirements set forth in section 8 of the Act. One of those requirements is that the guaranty must be based upon “reasonable and representative tests” in accordance with the applicable standard.
(b)Subpart A of this part 1610 prescribes apparatus and procedures for testing fabrics and garments subject to its provisions. See §§ 1610.5 & 1610.6. Subpart A prescribes criteria for classifying the flammability of fabrics and garments subject to its provisions as “Normal flammability, Class 1,” “Intermediate flammability, Class 2,” and “Rapid and Intense Burning, Class 3.” See § 1610.4. Sections 3 and 4 of the Act prohibit the manufacture for sale, importation into the United States, or introduction in commerce of any fabric or article of wearing apparel subject to the Standard which exhibits “rapid and intense burning” when tested in accordance with the Standard. See 16 CFR part 1609.
(c)The Commission recognizes that for purposes of supporting guaranties, “reasonable and representative tests” could be either the test in Subpart A of this part, or alternate tests which utilize apparatus or procedures other than those in Subpart A of this part. This § 1610.40 sets forth conditions under which the Commission will allow use of alternate tests with apparatus or procedures other than those in Subpart A of this part to serve as the basis for guaranties. (d)(1) Persons and firms issuing guaranties that fabrics or garments subject to the Standard meet its requirements may base those guaranties on any alternate test utilizing apparatus or procedures other than those in Subpart A of this part, if such alternate test is as stringent as, or more stringent than, the test in Subpart A of this part. The Commission considers an alternate test to be “as stringent as, or more stringent than” the test in Subpart A of this part if, when testing identical specimens, the alternate test yields failing results as often as, or more often than, the test in Subpart A of this part. Any person using such an alternate test must have data or information to demonstrate that the alternate test is as stringent as, or more stringent than, the test in Subpart A of this part.
(2)The data or information required by this paragraph
(d)of this section to demonstrate equivalent or greater stringency of any alternate test using apparatus or procedures other than those in Subpart A of this part must be in the possession of the person or firm desiring to use such alternate test before the alternate test may be used to support guaranties of items subject to the Standard.
(3)The data or information required by paragraph
(d)of this section to demonstrate equivalent or greater stringency of any alternate test using apparatus or procedures other than those in Subpart A of this part must be retained for as long as that alternate test is used to support guaranties of items subject to the Standard, and for one year thereafter.
(e)Specific approval from the Commission in advance of the use of any alternate test using apparatus or procedures other than those in Subpart A is not required. The Commission will not approve or disapprove any specific alternate test utilizing apparatus or procedures other than those in Subpart A of this part.
(f)Use of any alternate test to support guaranties of items subject to the Standard without the information required by this section may result in violation of section 8(b)), of the Act (15 U.S.C. 1197(b)), which prohibits the furnishing of a false guaranty.
(g)The Commission will test fabrics and garments subject to the Standard for compliance with the Standard using the apparatus and procedures set forth in Subpart A of this part. The Commission will consider any failing results from compliance testing as evidence that:
(1)The manufacture for sale, importation into the United States, or introduction in commerce of the fabric or garment which yielded failing results was in violation of the Standard and of section 3 of the Act; and
(2)The person or firm using the alternate test as the basis for a guaranty has furnished a false guaranty, in violation of section 8(b) of the Act. (Reporting requirements contained in paragraph
(d)were approved by Office of Management and Budget under control number 3041-0024.) Subpart C—Interpretations and Policies § 1610.61 Reasonable and representative testing to assure compliance with the standard for the clothing textiles.
(a)*Background.*
(1)The CPSC administers the Flammable Fabrics Act (“the Act”), 15 U.S.C. 1191-1204. Under the Act, among other things, the Commission enforces the Flammability Standard for Clothing Textiles (“the Standard”), 16 CFR part 1610. That Standard establishes requirements for the flammability of clothing and textiles intended to be used for clothing (hereinafter “textiles”).
(2)The Standard applies both to fabrics and finished garments. The Standard provides methods of testing the flammability of textiles, and sets forth the requirements that textiles must meet to be classified into one of three classes of flammability (classes 1, 2 and 3). § 1610.4. Class 1 textiles, those that exhibit normal flammability, are acceptable for use in clothing. § 1610.4(a)(1) & (2). Class 2 textiles, applicable only to raised fiber surfaces, are considered to be of intermediate flammability, but may be used in clothing. § 1610.4(b)(1) & (2). Finally, Class 3 textiles, those that exhibit rapid and intense burning, are dangerously flammable and may not be used in clothing. § 1610.4(c)(1) & (2). The manufacture for sale, offering for sale, importation into the U.S., and introduction or delivery for introduction of Class 3 articles of wearing apparel are among the acts prohibited by section 3(a) of the Act, 15 U.S.C. 1192(a).
(3)CPSC currently uses retail surveillance, attends appropriate trade shows, follows up on reports of noncompliance and previous violations, and works with U.S. Customs and Border Protection in an effort to find textiles that violate CPSC's standards. The Commission has a number of enforcement options to address prohibited acts. These include bringing seizure actions in federal district court against violative textiles, seeking an order through an administrative proceeding that a firm cease and desist from selling violative garments, pursuing criminal penalties, or seeking the imposition of civil penalties for “knowing” violations of the Act. Of particular relevance to the latter two remedies is whether reasonable and representative tests were performed demonstrating that a textile or garment meets the flammability standards for general wearing apparel. Persons who willfully violate flammability standards are subject to criminal penalties.
(4)Section 8(a) of the Act, 15 U.S.C. 1197(a), exempts a firm from the imposition of criminal penalties if the firm establishes that a guaranty was received in good faith signed by and containing the name and address of the person who manufactured the guarantied wearing apparel or textiles or from whom the apparel or textiles were received. A guaranty issued by a person who is not a resident of the United States may not be relied upon as a bar to prosecution. 16 CFR 1608.4. The guaranty must be based on the exempted types of fabrics or on reasonable and representative tests showing that the fabric covered by the guaranty or used in the wearing apparel covered by the guaranty is not so highly flammable as to be dangerous when worn by individuals, i.e., is not a Class 3 material. (The person proffering a guaranty to the Commission must also not, by further processing, have affected the flammability of the fabric, related material or product covered by the guaranty that was received.) Under § 1610.37, a person, to issue a guaranty, should first evaluate the type of fabric to determine if it meets testing exemptions in accordance with § 1610.1(d). (Some textiles never exhibit unusual burning characteristics and need not be tested.) § 1610.1(d). Such textiles include plain surface fabrics, regardless of fiber content, weighing 2.6 oz. or more per sq. yd., and plain and raised surface fabrics made of acrylic, modacrylic, nylon, olefin, polyester, wool, or any combination of these fibers, regardless of weight.) If no exemptions apply, the person issuing the guaranty must devise and implement a program of reasonable and representative tests to support the guaranty. The number of tests and frequency of testing is left to the discretion of that person, but at least one test is required.
(5)In determining whether a firm has committed a “knowing” violation of a flammability standard that warrants imposition of a civil penalty, the CPSC considers whether the firm had actual knowledge that its products violated the flammability requirements. The CPSC also considers whether the firm should be presumed to have the knowledge that would be possessed by a reasonable person acting in the circumstances, including knowledge that would have been obtainable upon the exercise of due care to ascertain the truth of representations. 15 U.S.C. 1194(e). The existence of results of flammability testing based on a reasonable and representative program and, in the case of tests performed by another entity (such as a guarantor), the steps, if any, that the firm took to verify the existence and reliability of such tests, bear directly on whether the firm acted reasonably in the circumstances.
(b)*Applicability.*
(1)When tested for flammability, a small number of textile products exhibit variability in the test results; that is, even though they may exhibit Class 1 or Class 2 burning characteristics in one test, a third test may result in a Class 3 failure. Violative products that the Commission has discovered between 1994 and 1998 include sheer 100% rayon skirts and scarves; sheer 100% silk scarves; 100% rayon chenille sweaters; rayon/nylon chenille and long hair sweaters; polyester/cotton and 100% cotton fleece/sherpa garments, and 100% cotton terry cloth robes. Between August 1994 and August 1998, there have been 21 recalls of such dangerously flammable clothing, and six retailers have paid civil penalties to settle Commission staff allegations that they knowingly sold garments that violated the general wearing apparel standard.
(2)The violations and resulting recalls and civil penalties demonstrate the critical necessity for manufacturers, distributors, importers, and retailers to evaluate, prior to sale, the flammability of garments made from the materials described above, or to seek appropriate guaranties that assure that the garments comply. Because of the likelihood of variable flammability in the small group of textiles identified above, one test is insufficient to assure reasonably that these products comply with the flammability standards. Rather, a person seeking to evaluate garments made of such materials should assure that the program tests a sufficient number of samples to provide adequate assurance that such textile products comply with the general wearing apparel standard. The number of samples to be tested, and the corresponding degree of confidence that products tested will comply, are to be specified by the individual designing the test program. However, in assessing the reasonableness of a test program, the Commission staff will specifically consider the degree of confidence that the program provides.
(c)*Suggestions.* The following are some suggestions to assist in complying with the Standard:
(1)Purchase fabrics or garments that meet testing exemptions listed in § 1610.1(d). (If buyers or other personnel do not have skills to determine if the fabric is exempted, hire a textile consultant or a test lab for an evaluation.)
(2)For fabrics that are not exempt, conduct reasonable and representative testing before cutting and sewing, using standard operating characteristic curves for acceptance sampling to determine a sufficient number of tests.
(3)Purchase fabrics or garments that have been guarantied and/or tested by the supplier using a reasonable and representative test program that uses standard operating characteristic curves for acceptance sampling to determine a sufficient number of tests. Firms should also receive and maintain a copy of the guaranty.
(4)Periodically verify that your suppliers are actually conducting appropriate testing. BILLING CODE 6355-01-P Figure 1 to Part 1610—Sketch of Flammability Apparatus EP27FE07.000 Figure 2 to Part 1610—Flammability Apparatus Views EP27FE07.001 Figure 3 to Part 1610—Specimen Holder Supported in Specimen Rack EP27FE07.002 Figure 4 to Part 1610—Igniter EP27FE07.003 Figure 5 to Part 1610—Brushing Device EP27FE07.004 Figure 6 to Part 1610—Brush EP27FE07.005 Figure 7 to Part 1610—Template EP27FE07.006 BILLING CODE 6355-01-C Dated: February 13, 2007. Todd A. Stevenson, Secretary, Consumer Product Safety Commission. Note: The following appendix will not appear in the Code of Federal Regulations. Appendix—List of Relevant Documents (The following documents are available from the Commission's Office of the Secretary, Consumer Product Safety Commission, Room 502, 4330 East West Highway, Bethesda, Maryland 20814-4408; telephone
(301)504-7923 or from the Commission's Web site * (http://www.cpsc.gov/library/foia/foia.html)).* 1. Briefing memorandum from Jacqueline Elder, Assistant Executive Director, EXHR and Patricia K. Adair, Project Manager, Directorate for Engineering Sciences, to the Commission, “Draft Notice of Proposed Rulemaking to Amend the Standard for the Flammability of Clothing Textiles, 16 CFR part 1610,” January 10, 2007. 2. Memorandum from David Miller, EPHA, Directorate for Epidemiology, to Patricia K. Adair, Project Manager, “General Wearing Apparel Fires,” November 7, 2006. 3. Memorandum from Terrance R. Karels, Directorate for Economic Analysis, to Patricia K. Adair, Project Manager, “Amendment to the Clothing Textiles Standard,” November 21, 2006. 4. Memorandum from Gail Stafford and Weiying Tao, Directorate for Laboratory Sciences, to Patricia K. Adair, Project Manager, “Response to Comments Received as a Result of the Advance Notice of Proposed Rulemaking
(ANPR)for Updating the Standard for the Flammability of Clothing Textiles,” November 21, 2006. 5. Memorandum from Marilyn Borsari, Office of Compliance and Field Operations, to Patricia K. Adair, Project Manager, “ANPR to Amend the Standard for the Flammability of Clothing Textiles, 16 CFR part 1610, November 22, 2006. 6. Memorandum from Patricia K. Adair, ESFS to the File, July 28, 2006. 7. Memorandum from Cassandra Prioleau, Ph.D., Directorate for Health Sciences, to Patricia K. Adair, Project Manager, “Toxicity Review of Perchloroethylene,” July 6, 2006. [FR Doc. 07-779 Filed 2-26-07; 8:45 am]
Connectionstraces to 50
Traces to 50 documents
CFR
U.S. Code
22 references not yet in our index
  • 10 CFR 2
  • 10 CFR 20
  • Pub. L. 109-432
  • 15 CFR 2007
  • 17 CFR 240.19
  • 17 CFR 240.12
  • 15 USC 78
  • 12 CFR 200.30-3(a)(12)
  • Pub. L. 91-575
  • 14 CFR 25.1825
  • 14 CFR 25.1827
  • 12 CFR 30
  • 44 USC 3501-3521
  • Pub. L. 104-13
  • 44 USC 3501-21
  • Pub. L. 104-262
  • 16 CFR 1610
  • Pub. L. 83-88
  • Pub. L. 90-189
  • 16 CFR 1609
  • 15 USC 1191-1204
  • 68 Stat. 770
Citation graph
cites case law
Notices
Notice
C.F.R.§ 50.92
C.F.R.§ 2.309
C.F.R.§ 50.91
C.F.R.§ 50.65
C.F.R.§ 50.67
C.F.R.§ 51.22
C.F.R.§ 51.12
U.S.C.§ 2463
U.S.C.§ 2461
Cite10 CFR 2
Cite10 CFR 20
Pub. L.Pub. L. 109-432
Cites 72 · showing 12Cited by 0 across 0 sources
★   the supreme law of the land   ★
Don't Tread on Me
E Pluribus Unum — out of many, one

"If you don't know your rights, you don't have any."

Marginalia · a citizen's law index
A research desk, not legal advice. Always read the cited source before relying on a summary.
Questions or an issue? support@self-law.org
disclaimerMarginalia is a research index, not a law firm. Nothing on this site is legal, tax, or financial advice and no attorney–client relationship is formed by using it. Statutes, regulations, and case law change; summaries, search results, AI output, and member posts may be incomplete, out of date, or wrong. Any interpretation drawn from material on this site should be validated by a licensed attorney in your jurisdiction before you act on it.