Notices. Notice of license renewal application, and opportunity to request a hearing
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BILLING CODE 7533-01-M NUCLEAR REGULATORY COMMISSION [Docket No. 70-1257] Notice of License Renewal Request of AREVA NP, Richland, WA, and Opportunity To Request a Hearing AGENCY: Nuclear Regulatory Commission. ACTION: Notice of license renewal application, and opportunity to request a hearing. DATES: A request for a hearing must be filed by May 14, 2007. FOR FURTHER INFORMATION CONTACT: Merritt Baker, Project Manager, Fuel Facility Licensing Directorate, Division of Fuel Cycle Safety and Safeguards, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555. *Telephone:*
(301)415-6155; *fax number:*
(301)415-5955; *e-mail: mnb@nrc.gov* . SUPPLEMENTARY INFORMATION: I. Introduction The U.S. Nuclear Regulatory Commission
(NRC)has received, by letter dated October 24, 2006, a license renewal application from AREVA NP, Inc. (AREVA), requesting renewal of License No. SNM-1227 at its Richland fuel fabrication facility located in Richland, Washington. License No. SNM-1227 authorizes the licensee to possess and use special nuclear material for the manufacture of fuel for nuclear power plants. The Richland facility has been licensed by the Atomic Energy Commission and its successor, the NRC, to manufacture low-enriched uranium fuel for nuclear power plants. The license was renewed in 1996 for a period of 10 years, expiring on November 30, 2006. By applications dated October 24 and December 13, 2006, AREVA requested renewal of their license for a period of 40 years. The NRC will review the license renewal application for compliance with applicable sections of regulations in Title 10 of the Code of Federal Regulations (10 CFR)—Energy, Chapter I—Nuclear Regulatory Commission. The license renewal application included an Environmental Report, which the NRC will review and use to prepare an environmental assessment to assist in the NRC's determination on the license renewal application, as required by 10 CFR Part 51, Environmental Protection Regulations for Domestic Licensing and Related Regulatory Functions, and the National Environmental Policy Act. An NRC administrative review, documented in a letter to AREVA dated February 7, 2007, (ML070320061) found the application acceptable to begin a technical review. Because AREVA filed the application for renewal not less than 30 days before the expiration of the date stated in the existing license, the existing license will not expire until the Commission makes a final determination on the renewal application, in accordance with the timely renewal provision of 10 CFR 70.38(a)(1). If the NRC approves the renewal application, the approval will be documented in NRC License No. SNM-1227. However, before approving the proposed renewal, the NRC will need to make the findings required by the Atomic Energy Act of 1954, as amended, and NRC's regulations. These findings will be documented in a Safety Evaluation Report and an Environmental Assessment and/or an Environmental Impact Statement. II. Opportunity To Request a Hearing The NRC hereby provides notice that this is a proceeding on an application for a license renewal. In accordance with the general requirements in subpart C of 10 CFR part 2, as amended on January 14, 2004 (69 FR 2182), any person whose interest may be affected by this proceeding and who desires to participate as a party must file a written request for a hearing and a specification of the contentions which the person seeks to have litigated in the hearing. In accordance with 10 CFR 2.302(a), a request for a hearing must be filed with the Commission either by: 1. *First class mail addressed to:* Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, *Attention:* Rulemakings 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, MD 20852, Attention: Rulemakings and Adjudications Staff, between 7:45 a.m. and 4:15 p.m., Federal workdays; 3. E-mail addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, *hearingdocket@nrc.gov;* or 4. By 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. In accordance with 10 CFR 2.302(b), all documents offered for filing must be accompanied by proof of service on all parties to the proceeding or their attorneys of record as required by law or by rule or order of the Commission, including: 1. The applicant, AREVA NP, Inc. 2101 Horn Rapids Road, Richland Washington, 99254, *Attention:* Robert Link; and 2. The NRC staff, by delivery to the Office of the General Counsel, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852, or by mail addressed to the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Hearing requests should also be transmitted to the Office of the General Counsel, either by means of facsimile transmission to
(301)415-3725, or via email to *ogcmailcenter@nrc.gov* . The formal requirements for documents contained in 10 CFR 2.304 (b), (c), (d), and (e), must be met. In accordance with 10 CFR 2.304(f), a document filed by electronic mail or facsimile transmission need not comply with the formal requirements of 10 CFR 2.304 (b), (c), and (d), as long as an original and two
(2)copies otherwise complying with all of the requirements of 10 CFR 2.304 (b), (c), and
(d)are mailed within two
(2)days thereafter to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, *Attention:* Rulemakings and Adjudications Staff. In accordance with 10 CFR 2.309(b), a request for a hearing must be filed by May 14, 2007. In addition to meeting other applicable requirements of 10 CFR 2.309, the general requirements involving a request for a hearing filed by a person other than an applicant must state: 1. The name, address, and telephone number of the requester; 2. The nature of the requester's right under the Act to be made a party to the proceeding; 3. The nature and extent of the requester's property, financial or other interest in the proceeding; 4. The possible effect of any decision or order that may be issued in the proceeding on the requester's interest; and 5. The circumstances establishing that the request for a hearing is timely in accordance with 10 CFR 2.309(b). In accordance with 10 CFR 2.309(f)(1), a request for hearing or petitions for leave to intervene must set forth with particularity the contentions sought to be raised. For each contention, the request or petition must: 1. Provide a specific statement of the issue of law or fact to be raised or controverted; 2. Provide a brief explanation of the basis for the contention; 3. Demonstrate that the issue raised in the contention is within the scope of the proceeding; 4. Demonstrate that the issue raised in the contention is material to the findings that the NRC must make to support the action that is involved in the proceeding; 5. Provide a concise statement of the alleged facts or expert opinions which support the requester's/petitioner's position on the issue and on which the requester/petitioner intends to rely to support its position on the issue; and 6. Provide sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. This information must include references to specific portions of the application (including the applicant's environmental report and safety report) that the requester/petitioner disputes and the supporting reasons for each dispute, or, if the requester/petitioner believes the application fails to contain information on a relevant matter as required by law, the identification of each failure and the supporting reasons for the requester's/petitioner's belief. In addition, in accordance with 10 CFR 2.309(f)(2), contentions must be based on documents or other information available at the time the petition is to be filed, such as the application, supporting safety analysis report, environmental report or other supporting documents filed by an applicant or licensee, or otherwise available to the petitioner. On issues arising under the National Environmental Policy Act, the requester/petitioner shall file contentions based on the applicant's environmental report. The requester/petitioner may amend those contentions or file new contentions if there are data or conclusions in the NRC draft, or final environmental impact statement, environmental assessment, or any supplements relating thereto, that differ significantly from the data or conclusions in the applicant's documents. Otherwise, contentions may be amended or new contentions filed after the initial filing only with leave of the presiding officer. Each contention shall be given a separate numeric or alpha designation within one of the following groups: 1. Technical—primarily concerns issues relating to matters discussed or referenced in the Safety Evaluation Report for the proposed action. 2. Environmental—primarily concerns issues relating to matters discussed or referenced in the Environmental Report for the proposed action. 3. Emergency Planning—primarily concerns issues relating to matters discussed or referenced in the Emergency Plan as it relates to the proposed action. 4. Physical Security—primarily concerns issues relating to matters discussed or referenced in the Physical Security Plan as it relates to the proposed action. 5. Miscellaneous—does not fall into one of the categories outlined above. If the requester/petitioner believes a contention raises issues that cannot be classified as primarily falling into one of these categories, the requester/petitioner must set forth the contention and supporting bases, in full, separately for each category into which the requester/petitioner asserts the contention belongs with a separate designation for that category. Requesters/petitioners should, when possible, consult with each other in preparing contentions and combine similar subject matter concerns into a joint contention, for which one of the co-sponsoring requesters/petitioners is designated the lead representative. Further, in accordance with 10 CFR 2.309(f)(3), any requester/petitioner that wishes to adopt a contention proposed by another requester/petitioner must do so in writing within ten days of the date the contention is filed, and designate a representative who shall have the authority to act for the requester/petitioner. In accordance with 10 CFR 2.309(g), a request for hearing and/or petition for leave to intervene may also address the selection of the hearing procedures, taking into account the provisions of 10 CFR 2.310. III. Further Information Documents related to this action, including the application for amendment and supporting documentation, are available electronically at the NRC's Electronic Reading Room at *http://www.nrc.gov/reading-rm/adams.html* . From this site, you can access the NRC's Agencywide Documents Access and Management System (ADAMS), which provides text and image files of NRC's public documents. The ADAMS accession numbers for the documents related to this notice are: Document ADAMS Accession No. Date Transmittal letter ML063110083 10/24/06 License renewal application public version ML063110089 10/24/06 Environmental Report ML063110087 10/31/06 Additional information ML063530128 12/13/06 NRC acceptance letter ML070320061 02/07/07 If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the NRC Public Document Room
(PDR)Reference staff at 1-800-397-4209, 301-415-4737, or by e-mail to *pdr@nrc.gov* . These documents may also be viewed electronically on the public computers located at the NRC's PDR, O-1-F21, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852. The PDR reproduction contractor will copy documents for a fee. Dated at Rockville, Maryland, this 8th day of March, 2007. For the U.S. Nuclear Regulatory Commission. Gary Janosko, Deputy Director, Fuel Facility Licensing Directorate, Division of Fuel Cycle Safety and Safeguards, Office of Nuclear Material Safety And Safeguards. [FR Doc. E7-4750 Filed 3-14-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [Docket No. 70-3098] Notice of License Application for Possession and Use of Byproduct, Source, and Special Nuclear Materials for the Mixed Oxide Fuel Fabrication Facility, Aiken, SC, and Opportunity To Request a Hearing AGENCY: Nuclear Regulatory Commission. ACTION: Notice of license application, and opportunity to request a hearing. DATES: A request for a hearing must be filed by May 14, 2007. FOR FURTHER INFORMATION CONTACT: David Tiktinsky, Senior Project Manager, MOX Branch, Division of Fuel Cycle Safety and Safeguards, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555. *Telephone:*
(301)415-6195; *fax number:*
(301)415-5369; *e-mail: dht@nrc.gov* . SUPPLEMENTARY INFORMATION: I. Introduction The Nuclear Regulatory Commission
(NRC)has received, by letter dated September 27, 2006, November 16, 2006 (document withheld based on 10 CFR 2.390), and January 4, 2007 (a public redacted version), a license application and supporting documents from Shaw AREVA MOX Services (MOX Services), requesting a license for possession and use of byproduct, source, and special nuclear materials for the Mixed Oxide Fuel Fabrication Facility
(MFFF)to be located on the Savannah River Site in Aiken, SC. On March 30, 2005, the NRC issued a Construction Authorization
(CA)to MOX Services (formerly known as Duke, Cogema, Stone and Webster) for a MFFF to be located at the Savannah River Site in Aiken, South Carolina (ML050660392).The NRC staff's technical basis for issuing the CA was set forth in NUREG-1821, “Final Safety Evaluation Report on the Construction Authorization Request for the Mixed Oxide Fuel Fabrication Facility at the Savannah River Site, South Carolina” (ML050660399). The results of the staff's environmental review related to the issuance of the CA are contained in NUREG-1767, “Environmental Impact Statement on the Construction and Operation of a Mixed Oxide Fuel Fabrication Facility at the Savannah River Site, South Carolina—Final Report” (ML050240233, ML050240250). A License Application
(LA)was submitted to the NRC on September 27, 2006, requesting the approval for the possession and use of byproduct, source, and special nuclear materials for the MFFF. In the process of performing the Acceptance/Acknowledgment review of the LA, the staff identified some parts of the submittal that required modifications in order for the NRC to complete the initial review. The preliminary review of the LA indicated that much of the information required by Part 70 (in particular, 10 CFR 70.22 and 10 CFR part 70, subpart H) to be in an operating license application was contained in the Integrated Safety Analyses
(ISA)Summary. The staff also believed that some of the information that was identified to be withheld as proprietary should be publically available. On November 7, 2006, the NRC sent a letter to Mr. David Stinson, President of MOX Services indicating the modifications that were needed in order for the NRC to complete its initial Acceptance/Acknowledgment review. A revised LA was submitted to the NRC on November 16, 2006 (document was withheld under 10 CFR 2.390). The U.S. NRC staff performed an acknowledgment/ acceptance review of the revised MFFF license submittals to determine if sufficient information was provided for the staff to begin a detailed technical review. The submittals generally addressed the requirements of an operating license for a facility specified in 10 CFR part 70, and the items specified in NUREG-1718, “Standard Review Plan for the Review of an Application for a Mixed Oxide Fuel Fabrication Facility.” The staff accepted the application for technical review and docketing. The Acceptance/Acknowledgment review was documented in a letter to MOX Services dated December 20, 2006 (ML063530612). A redacted public version of the LA was submitted to the NRC on January 4, 2007 (ML070160304 and ML070160311). The NRC will review the license application for compliance with applicable sections of regulations in Title 10 of the Code of Federal Regulations (10 CFR)—Energy, Chapter I—Nuclear Regulatory Commission. If the NRC approves the application, the approval will be documented in an NRC License. However, before approving the request for an operating license, the NRC will need to make the findings required by the Atomic Energy Act of 1954, as amended, and NRC's regulations. These findings will be documented in a Safety Evaluation Report. II. Opportunity To Request a Hearing The NRC hereby provides notice that this is a proceeding on an application for a license. In accordance with the general requirements in subpart C of 10 CFR part 2, as amended on January 14, 2004 (69 FR 2182), any person whose interest may be affected by this proceeding and who desires to participate as a party must file a written request for a hearing and a specification of the contentions which the person seeks to have litigated in the hearing. In accordance with 10 CFR 2.302(a), a request for a hearing must be filed with the Commission either by: 1. *First class mail addressed to:* Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, *Attention:* Rulemakings 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, MD 20852, *Attention:* Rulemakings and Adjudications Staff, between 7:45 a.m. and 4:15 p.m., Federal workdays; 3. E-mail addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, *hearingdocket@nrc.gov* ; or 4. By 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. In accordance with 10 CFR 2.302 (b), all documents offered for filing must be accompanied by proof of service on all parties to the proceeding or their attorneys of record as required by law or by rule or order of the Commission, including: 1. The applicant, Shaw AREVA MOX Services, P.O. Box 7097, Aiken, SC 29804, *Attention:* Dealis Gwyn; and 2. The NRC staff, by delivery to the Office of the General Counsel, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852, or by mail addressed to the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. Hearing requests should also be transmitted to the Office of the General Counsel, either by means of facsimile transmission to
(301)415-3725, or via e-mail to *ogcmailcenter@nrc.gov* . The formal requirements for documents contained in 10 CFR 2.304(b), (c), (d), and (e), must be met. In accordance with 10 CFR 2.304(f), a document filed by electronic mail or facsimile transmission need not comply with the formal requirements of 10 CFR 2.304(b), (c), and (d), as long as an original and two
(2)copies otherwise complying with all of the requirements of 10 CFR 2.304(b), (c), and
(d)are mailed within two
(2)days thereafter to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemakings and Adjudications Staff. In accordance with 10 CFR 2.309 (b), a request for a hearing must be filed by May 14, 2007. In addition to meeting other applicable requirements of 10 CFR 2.309, the general requirements involving a request for a hearing filed by a person other than an applicant must state: 1. The name, address, and telephone number of the requester; 2. The nature of the requester's right under the Act to be made a party to the proceeding; 3. The nature and extent of the requester's property, financial or other interest in the proceeding; 4. The possible effect of any decision or order that may be issued in the proceeding on the requester's interest; and 5. The circumstances establishing that the request for a hearing is timely in accordance with 10 CFR 2.309 (b). In accordance with 10 CFR 2.309 (f)(1), a request for hearing or petitions for leave to intervene must set forth with particularity the contentions sought to be raised. For each contention, the request or petition must: 1. Provide a specific statement of the issue of law or fact to be raised or controverted; 2. Provide a brief explanation of the basis for the contention; 3. Demonstrate that the issue raised in the contention is within the scope of the proceeding; 4. Demonstrate that the issue raised in the contention is material to the findings that the NRC must make to support the action that is involved in the proceeding; 5. Provide a concise statement of the alleged facts or expert opinions which support the requester's/petitioner's position on the issue and on which the requester/petitioner intends to rely to support its position on the issue; and 6. Provide sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. This information must include references to specific portions of the application that the requester/petitioner disputes and the supporting reasons for each dispute, or, if the requester/petitioner believes the application fails to contain information on a relevant matter as required by law, the identification of each failure and the supporting reasons for the requester's/petitioner's belief. In addition, in accordance with 10 CFR 2.309 (f)(2), contentions must be based on documents or other information available at the time the petition is to be filed, such as the application, supporting safety analysis report, or other supporting documents filed by an applicant or licensee, or otherwise available to the petitioner. Each contention shall be given a separate numeric or alpha designation within one of the following groups: 1. Technical—primarily concerns issues relating to matters discussed or referenced in the Safety Evaluation Report for the proposed action. 2. Environmental—primarily concerns issues relating to matters discussed or referenced in the Environmental Report for the proposed action. 3. Emergency Planning—primarily concerns issues relating to matters discussed or referenced in the Emergency Plan as it relates to the proposed action. 4. Physical Security—primarily concerns issues relating to matters discussed or referenced in the Physical Security Plan as it relates to the proposed action. 5. Miscellaneous—does not fall into one of the categories outlined above. If the requester/petitioner believes a contention raises issues that cannot be classified as primarily falling into one of these categories, the requester/petitioner must set forth the contention and supporting bases, in full, separately for each category into which the requester/petitioner asserts the contention belongs with a separate designation for that category. Requesters/petitioners should, when possible, consult with each other in preparing contentions and combine similar subject matter concerns into a joint contention, for which one of the co-sponsoring requesters/petitioners is designated the lead representative. Further, in accordance with 10 CFR 2.309 (f)(3), any requester/petitioner that wishes to adopt a contention proposed by another requester/petitioner must do so in writing within ten days of the date the contention is filed, and designate a representative who shall have the authority to act for the requester/petitioner. In accordance with 10 CFR 2.309 (g), a request for hearing and/or petition for leave to intervene may also address the selection of the hearing procedures, taking into account the provisions of 10 CFR 2.310. III. Further Information Documents related to this action, including the application and supporting documentation, are available electronically at the NRC's Electronic Reading Room at *http://www.nrc.gov/reading-rm/adams.html* . From this site, you can access the NRC's Agencywide Document Access and Management System (ADAMS), which provides text and image files of NRC's public documents. The ADAMS accession numbers for the documents related to this notice are: Document ADAMS Accession No. Date License Application for the MFFF ML062750194 09/27/2006 Request for exemption from decommissioning requirements ML062720071 09/27/2006 Request for exemption from radiation labeling requirements ML062720076 09/27/2006 Request for exemption from indemnity agreement and financial protection requirement ML062720082 09/27/2006 NRC letter with comments on LA content review ML063100216 11/07/2006 Emergency plan assessment ML063250124 11/16/2007 ML063250129 NRC acceptance/acknowledgment review letter ML063530612 12/20/2006 Transmittal letter for public version of LA ML070160304 01/04/2007 License application public version ML070160311 01/04/2007 If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the NRC Public Document Room
(PDR)Reference staff at 1-800-397-4209, 301-415-4737, or by e-mail to *pdr@nrc.gov* . These documents may also be viewed electronically on the public computers located at the NRC's PDR, O-1-F-21, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852. The PDR reproduction contractor will copy documents for a fee. Dated at Rockville, Maryland, this 7th day of March, 2007. For the Nuclear Regulatory Commission. Joseph Giitter, Director, Special Project, and Technical Support Directorate, Division of Fuel Cycle Safety and Safeguards, Office of Nuclear Material Safety and Safeguards. [FR Doc. E7-4751 Filed 3-14-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [EA-07-055] In the Matter of Holder of Material License Authorized To Use Sealed Sources in Panoramic and Underwater Irradiators and Possess Greater Than 370 Terabecquerels (10,000 Curies); Order Imposing Fingerprinting and Criminal History Records Check Requirements for Unescorted Access to Certain Radioactive Material (Effective Immediately) I The Licensee identified in Attachment 1 1 to this Order holds a license issued in accordance with the Atomic Energy Act
(AEA)of 1954, as amended, by the U.S. Nuclear Regulatory Commission (NRC or Commission) or Agreement States, authorizing possession of greater than 370 Terabecquerels (10,000 curies) of byproduct material, in the form of sealed sources, either in panoramic irradiators that have dry or wet storage of the sealed sources, or in underwater irradiators in which both the source and the product being irradiated are underwater. On August 8, 2005, the Energy Policy Act of 2005 (EPAct) was enacted. Section 652 of the EPAct amended Section 149 of the AEA to require fingerprinting and a Federal Bureau of Investigation
(FBI)identification and criminal history records check of any person who is permitted unescorted access to radioactive materials subject to regulation by the Commission, and which the Commission determines to be of such significance to the public health and safety or the common defense and security as to warrant fingerprinting and background checks. NRC has decided to implement this requirement, in part, prior to the completion of the rulemaking to implement the provisions under the EPAct, which is underway, because a deliberate malevolent act by an individual with unescorted access to these radioactive materials has a potential to result in significant adverse impacts to the public health and safety or the common defense and security. Those exempted, from fingerprinting requirements under 10 CFR 73.61 (72 FR 4945 (February 2, 2007)) are also exempt from the fingerprinting requirements under this Order. In addition, individuals who have a favorably-decided U.S. Government criminal history record check within the last five
(5)years, or individuals who have an active federal security clearance (provided in each case that they make available the appropriate documentation), have satisfied the EPAct fingerprinting requirement and need not be fingerprinted again. Individuals who have been fingerprinted and granted access to Safeguards Information 2
(SGI)by the reviewing official under Order EA-06-242 do not need to be fingerprinted again. 1 Attachment 1 contains sensitive information and will not be released to the public. 2 Safeguards Information is a form of sensitive, unclassified, security-related information that the Commission has the authority to designate and protect under section 147 of the AEA. II Subsequent to the terrorist events of September 11, 2001, the NRC issued a security Order requiring certain large panoramic and underwater irradiator licensees to implement Compensatory Measures
(CMs)for radioactive materials. The requirements imposed by Order EA-06-251 (Irradiator Order), and measures licensees have developed to comply with that Order, were designated by the NRC as SGI and were not released to the public. One specific CM imposed by the Irradiator Order required licensees to conduct local criminal history checks to determine the trustworthiness and reliability of individuals needing unescorted access to the panoramic or underwater irradiator sealed sources. “Access” means that an individual could exercise some physical control over the material or device. In accordance with Section 149 of the AEA, as amended by the EPAct, the Commission is imposing the FBI criminal history records check requirements, as set forth in this Order, including Attachment 2 to this Order, on the Licensee identified in Attachment 1 to this Order, that possesses greater than 370 Terabecquerels (10,000 curies) of byproduct material in the form of sealed sources. These requirements will remain in effect until the Commission determines otherwise. In addition, pursuant to 10 CFR 2.202, find that in light of the common defense and security matters identified above, which warrant the issuance of this Order, the public health, safety, and interest require that this Order be effective immediately. III Accordingly, pursuant to Sections 81, 149, 161b, 161i, 161o, 182, and 186 of the AEA of 1954, as amended, and the Commission's regulations in 10 CFR 2.202, 10 CFR Part 30, and 10 CFR Part 36, *it is hereby ordered,* effective immediately, that the licensee identified in attachment 1 to this order shall comply with the requirements set forth in this order. A. The licensee identified in Attachment 1 to this Order shall comply with the following requirements: 1. The Licensee shall, within twenty
(20)days of the date of this Order, establish and maintain a fingerprinting program that meets the requirements of Attachment 2 to this Order, for unescorted access to the panoramic or underwater irradiator sealed sources. 2. The Licensee shall, in writing, within twenty
(20)days of the date of this Order, notify the Commission
(1)of receipt and confirmation that compliance with the Order will be achieved, or
(2)if it is unable to comply with any of the requirements described in Attachment 2, or
(3)if compliance with any of the requirements is unnecessary in its specific circumstances. The notification shall provide the Licensee's justification for seeking relief from, or variation of, any specific requirement. B. In accordance with the NRC's “Order Imposing Fingerprinting and Criminal History Check Requirements for Access to Safeguards Information” (EA-06-242) issued on October 4, 2006, only the NRC-approved reviewing official shall review results from an FBI criminal history records check. The reviewing official shall determine whether an individual may have, or continue to have, unescorted access to the panoramic or underwater irradiator sealed sources that equal or exceed 370 Terabecquerels (10,000 curies). Fingerprinting and the FBI identification and criminal history records check are not required for individuals exempted from fingerprinting requirements under 10 CFR 73.61 [72 FR 4945 (February 2, 2007)]. In addition, individuals who have a favorably decided U.S. Government criminal history records check within the last five
(5)years, or have an active federal security clearance (provided in each case that the appropriate documentation is made available to the Licensee's reviewing official), have satisfied the EPAct fingerprinting requirement and need not be fingerprinted again. C. Fingerprints shall be submitted and reviewed in accordance with the procedures described in Attachment 2 to this Order. Individuals who have been fingerprinted and granted access to SGI by the reviewing official under Order EA-06-242 do not need to be fingerprinted again. D. The Licensee may allow any individual who currently has unescorted access to the panoramic or underwater irradiator sealed sources, in accordance with the Irradiator Order, to continue to have unescorted access without being fingerprinted, pending a decision by the reviewing official (based on fingerprinting, an FBI criminal history records check and a trustworthy and reliability determination) that the individual may continue to have unescorted access to the panoramic or underwater irradiator sealed sources. The licensee shall complete implementation of the requirements of Attachment 2 to this Order by June 5, 2007. Licensee responses to Condition A.2. shall be submitted to the Director, Office of Federal and State Materials and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. In addition, Licensee responses shall be marked as “Security-Related Information—Withhold Under 10 CFR 2.390.” The Director, Office of Federal and State Materials and Environmental Management Programs, may, in writing, relax or rescind any of the above conditions upon demonstration of good cause by the Licensee. IV In accordance with 10 CFR 2.202, the Licensee must, and any other person adversely affected by this Order may, submit an answer to this Order, and may request a hearing on this Order, within twenty
(20)days of the date of this Order. Where good cause is shown, consideration will be given to extending the time to request a hearing. A request for extension of time in which to submit an answer or request a hearing must be made in writing to the Director, Office of Federal and State Materials and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555, and include a statement of good cause for the extension. The answer may consent to this Order. Unless the answer consents to this Order, the answer shall, in writing and under oath or affirmation, specifically set forth the matters of fact and law on which the Licensee or other person adversely affected relies and the reasons as to why the Order should not have been issued. Any answer or request for a hearing shall be submitted to the Secretary, Office of the Secretary, U.S. Nuclear Regulatory Commission, *ATTN:* Rulemakings and Adjudications Staff, Washington, DC 20555. Copies also shall be sent to the Director, Office of Federal and State Materials and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555, to the Assistant General Counsel for Materials Litigation and Enforcement at the same address, and to the Licensee if the answer or hearing request is by a person other than the Licensee. Because of possible delays in delivery of mail to United States Government offices, it is requested that answers and requests for hearing be transmitted to the Secretary of the Commission either by means of facsimile transmission to
(301)415-1101, or by e-mail to *hearingdocket@nrc.gov* and also to the Office of the General Counsel, either by means of facsimile transmission to
(301)415-3725, or by e-mail to *OGCMailCenter@nrc.gov.* If a person other than the Licensee requests a hearing, that person shall set forth with particularity the manner in which his/her interest is adversely affected by this Order and shall address the criteria set forth in 10 CFR 2.309. If a hearing is requested by the Licensee or a person whose interest is adversely affected, the Commission will issue an Order designating the time and place of any hearing. If a hearing is held, the issue to be considered at such hearing shall be whether this Order should be sustained. Pursuant to 10 CFR 2.202(c)(2)(i), the Licensee may, in addition to demanding a hearing, at the time the answer is filed or sooner, move the presiding officer to set aside the immediate effectiveness of the Order on grounds that the Order, including the need for immediate effectiveness, is not based on adequate evidence, but on mere suspicion, unfounded allegations, or error. In the absence of any request for hearing, or written approval of an extension of time in which to request a hearing, the provisions as specified above in Section III shall be final twenty
(20)days from the date of this Order, without further Order or proceedings. If an extension of time for requesting a hearing has been approved, the provisions as specified above in Section III shall be final when the extension expires, if a hearing request has not been received. An answer or a request for hearing shall not stay the immediate effectiveness of this order. Dated this 8th day of March 2007. For the Nuclear Regulatory Commission. Charles L. Miller, Director, Office of Federal and State Materials and Environmental Management Programs. Attachment 1: List of Applicable Materials Licenses—Redacted. Attachment 2: Requirements for Fingerprinting and Criminal History Checks of Individuals When Licensee's Reviewing Official is Determining Unescorted Access to the Panoramic or Underwater Irradiator Sealed Sources Subject to EA-07-055. Requirements for Fingerprinting and Criminal History Checks of Individuals When Licensee's Reviewing Official Is Determining Unescorted Access to the Panoramic or Underwater Irradiator Sealed Sources Subject to EA-07-055 General Requirements Licensees shall comply with the following requirements of this attachment. 1. Each Licensee subject to the provisions of this attachment shall fingerprint each individual who is seeking or permitted unescorted access to the panoramic or underwater irradiator sealed sources. The Licensee shall review and use the information received from the Federal Bureau of Investigation
(FBI)and ensure that the provisions contained in the subject Order and this attachment are satisfied. 2. The Licensee shall notify each affected individual that the fingerprints will be used to secure a review of his/her criminal history record and inform the individual of the procedures for revising the record or including an explanation in the record, as specified in the “Right to Correct and Complete Information” section of this attachment. 3. Fingerprints for unescorted access need not be taken if an employed individual (e.g., a Licensee employee, contractor, manufacturer, or supplier) is relieved from the fingerprinting requirement by 10 CFR 73.61 for unescorted access, has a favorably-decided U.S. Government criminal history check within the last five
(5)years, or has an active federal security clearance. Written confirmation from the Agency/employer which granted the federal security clearance or reviewed the criminal history check must be provided for either of the latter two cases. The Licensee must retain this documentation for a period of three
(3)years from the date the individual no longer requires unescorted access to radioactive materials associated with the Licensee's activities. 4. All fingerprints obtained by the Licensee pursuant to this Order must be submitted to the Commission for transmission to the FBI. 5. The Licensee shall review the information received from the FBI and consider it, in conjunction with the trustworthy and reliability requirements of the Irradiator Order, in making a determination whether to grant, or continue to allow, unescorted access to radioactive materials. 6. The Licensee shall use any information obtained as part of a criminal history records check solely for the purpose of determining an individual's suitability for unescorted access to the panoramic or underwater irradiator sealed sources. 7. The Licensee shall document the basis for its determination whether to grant, or continue to allow, unescorted access to the panoramic or underwater irradiator sealed sources. Prohibitions A Licensee shall not base a final determination to deny an individual access to radioactive materials solely on the basis of information received from the FBI involving: an arrest more than one
(1)year old for which there is no information of the disposition of the case, or an arrest that resulted in dismissal of the charge or an acquittal. A Licensee shall not use information received from a criminal history check obtained pursuant to this Order in a manner that would infringe upon the rights of any individual under the First Amendment to the Constitution of the United States, nor shall the Licensee use the information in any way which would discriminate among individuals on the basis of race, religion, national origin, sex, or age. Procedures for Processing Fingerprint Checks For the purpose of complying with this Order, Licensees shall, using an appropriate method listed in 10 CFR 73.4, submit to the NRC's Division of Facilities and Security, Mail Stop T-6E46, one completed, legible standard fingerprint card (Form FD-258, ORIMDNRCOOOZ) or, where practicable, other fingerprint records for each individual seeking unescorted access to the panoramic or underwater irradiator sealed sources, to the Director of the Division of Facilities and Security, marked for the attention of the Division's Criminal History Check Section. Copies of these forms may be obtained by writing the Office of Information Services, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, by calling
(301)415-5877, or by e-mail to *forms@nrc.gov* . Practicable alternative formats are set forth in 10 CFR 73.4. The Licensee shall establish procedures to ensure that the quality of the fingerprints taken results in minimizing the rejection rate of fingerprint cards due to illegible or incomplete cards. The NRC will review submitted fingerprint cards for completeness. Any Form FD-258 fingerprint record containing omissions or evident errors will be returned to the Licensee for corrections. The fee for processing fingerprint checks includes one re-submission if the initial submission is returned by the FBI because the fingerprint impressions cannot be classified. The one free re-submission must have the FBI Transaction Control Number reflected on the re-submission. If additional submissions are necessary, they will be treated as initial submittals and will require a second payment of the processing fee. Fees for processing fingerprint checks are due upon application. Licensees shall submit payment with the application for processing fingerprints by corporate check, certified check, cashier's check, money order, or electronic payment, made payable to “U.S. NRC.” [For guidance on making electronic payments, contact the Facilities Security Branch, Division of Facilities and Security, at
(301)415-7404]. Combined payment for multiple applications is acceptable. The application fee (currently $27) is the sum of the user fee charged by the FBI for each fingerprint card or other fingerprint record submitted by the NRC on behalf of a Licensee, and an NRC processing fee, which covers administrative costs associated with NRC handling of Licensee fingerprint submissions. The Commission will directly notify Licensees who are subject to this regulation of any fee changes. The Commission will forward to the submitting Licensee all data received from the FBI as a result of the Licensee's application(s) for criminal history checks, including the FBI fingerprint record. Right To Correct and Complete Information Prior to any final adverse determination, the Licensee shall make available to the individual the contents of any criminal records obtained from the FBI for the purpose of assuring correct and complete information. Written confirmation by the individual of receipt of this notification must be maintained by the Licensee for a period of one
(1)year from the date of the notification. If, after reviewing the record, an individual believes that it is incorrect or incomplete in any respect and wishes to change, correct, or update the alleged deficiency, or to explain any matter in the record, the individual may initiate challenge procedures. These procedures include either direct application by the individual challenging the record to the agency (i.e., law enforcement agency) that contributed the questioned information, or direct challenge as to the accuracy or completeness of any entry on the criminal history record to the Assistant Director, Federal Bureau of Investigation Identification Division, Washington, DC 20537-9700 (as set forth in 28 CFR part 16.30 through 16.34). In the latter case, the FBI forwards the challenge to the agency that submitted the data and requests that agency to verify or correct the challenged entry. Upon receipt of an official communication directly from the agency that contributed the original information, the FBI Identification Division makes any changes necessary in accordance with the information supplied by that agency. The Licensee must provide at least ten
(10)days for an individual to initiate an action challenging the results of an FBI criminal history records check after the record is made available for his/her review. The Licensee may make a final determination on unescorted access to the panoramic or underwater irradiator sealed sources based upon the criminal history record only upon receipt of the FBI's ultimate confirmation or correction of the record. Upon a final adverse determination on unescorted access to the panoramic or underwater irradiator sealed sources, the Licensee shall provide the individual its documented basis for denial. Unescorted access to the panoramic or underwater irradiator sealed sources shall not be granted to an individual during the review process. Protection of Information 1. Each Licensee who obtains a criminal history record on an individual pursuant to this Order shall establish and maintain a system of files and procedures for protecting the record and the personal information from unauthorized disclosure. 2. The Licensee may not disclose the record or personal information collected and maintained to persons other than the subject individual, his/her representative, or to those who have a need to access the information in performing assigned duties in the process of determining unescorted access to the panoramic or underwater irradiator sealed sources. No individual authorized to have access to the information may re-disseminate the information to any other individual who does not have a need-to-know. 3. The personal information obtained on an individual from a criminal history record check may be transferred to another Licensee if the Licensee holding the criminal history record receives the individual's written request to re-disseminate the information contained in his/her file, and the gaining Licensee verifies information such as the individual's name, date of birth, social security number, sex, and other applicable physical characteristics for identification purposes. 4. The Licensee shall make criminal history records, obtained under this section, available for examination by an authorized representative of the NRC to determine compliance with the regulations and laws. 5. The Licensee shall retain all fingerprint and criminal history records received from the FBI, or a copy if the individual's file has been transferred, for three
(3)years after termination of employment or denial to unescorted access to the panoramic or underwater irradiator sealed sources. After the required three
(3)year period, these documents shall be destroyed by a method that will prevent reconstruction of the information in whole or in part. [FR Doc. E7-4735 Filed 3-14-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [EA-07-051] In the Matter of All Licensees Identified in Attachment 1 to Order EA-07-050 and All Other Persons Who Seek or Obtain Access to Safeguards Information Described Herein; Order Imposing Fingerprinting and Criminal History Records Check Requirements for Access to Safeguards Information (Effective Immediately) I The Licensees identified in Attachment 1 1 to Order EA-07-050 are applicants for, or hold licenses issued in accordance with the Atomic Energy Act
(AEA)of 1954, as amended, by the U.S. Nuclear Regulatory Commission (NRC or Commission) or Agreement States, authorizing them to engage in an activity subject to regulation by the Commission or Agreement States. On August 8, 2005, the Energy Policy Act of 2005 (EPAct) was enacted. Section 652 of the EPAct amended Section 149 of the AEA to require fingerprinting and a Federal Bureau of Investigation
(FBI)identification and criminal history records check of any person who is to be permitted to have access to Safeguards Information (SGI). 2 The NRC's implementation of this requirement cannot await the completion of the SGI rulemaking, which is underway, because the EPAct fingerprinting and criminal history records check requirements for access to SGI were immediately effective upon enactment of the EPAct. Although the EPAct permits the Commission by rule to except certain categories of individuals from the fingerprinting requirement, which the Commission has done [see 10 CFR part 73.59, 71 FR 33,989 (June 13, 2006))], it is unlikely that licensee employees or others are excepted from the fingerprinting requirement by the “fingerprinting relief” rule. Individuals relieved from fingerprinting and criminal history records checks under the relief rule include Federal, State, and local officials and law enforcement personnel; Agreement State inspectors who conduct security inspections on behalf of the NRC; members of Congress and certain employees of members of Congress or Congressional Committees, and representatives of the International Atomic Energy Agency
(IAEA)or certain foreign government organizations. In addition, individuals who have a favorably-decided U.S. Government criminal history records check within the last five
(5)years, or individuals who have active Federal security clearances (provided in either case that they make available the appropriate documentation), have satisfied the EPAct fingerprinting requirement and need not be fingerprinted again. Therefore, in accordance with Section 149 of the AEA, as amended by the EPAct, the Commission is imposing additional requirements for access to SGI, as set forth by this Order, so that affected licensees can obtain and grant access to SGI. This Order also imposes requirements for access to SGI by any person, from any person, 3 whether or not a Licensee, Applicant, or Certificate Holder of the Commission or Agreement States. 1 Attachment 1 to Order EA-07-050 contains sensitive information and will not be released to the public. 2 Safeguards Information is a form of sensitive, unclassified, security-related information that the Commission has the authority to designate and protect under section 147 of the AEA. 3 Person means
(1)any individual, corporation, partnership, firm, association, trust, estate, public or private institution, group, government agency other than the Commission or the Department of Energy, except that the Department of Energy shall be considered a person with respect to those facilities of the Department of Energy specified in section 202 of the Energy Reorganization Act of 1974 (88 Stat. 1244), any State or any political subdivision of, or any political entity within a State, any foreign government or nation or any political subdivision of any such government or nation, or other entity; and
(2)any legal successor, representative, agent, or agency of the foregoing. II The Commission has broad statutory authority to protect and prohibit the unauthorized disclosure of SGI. Section 147 of the AEA grants the Commission explicit authority to issue such Orders as necessary to prohibit the unauthorized disclosure of SGI. Furthermore, Section 652 of the EPAct amended Section 149 of the AEA to require fingerprinting and an FBI identification and a criminal history records check of each individual who seeks access to SGI. In addition, no person may have access to SGI unless the person has an established need-to-know the information and satisfies the trustworthy and reliability requirements described in Attachment 3 to Order EA-07-050. In order to provide assurance that the Licensees identified in Attachment 1 to Order EA-07-050 are implementing appropriate measures to comply with the fingerprinting and criminal history records check requirements for access to SGI, all Licensees identified in Attachment 1 to Order EA-07-050 shall implement the requirements of this Order. In addition, pursuant to 10 CFR 2.202, I find that in light of the common defense and security matters identified above, which warrant the issuance of this Order, the public health, safety and interest require that this Order be effective immediately. III Accordingly, pursuant to Sections 81, 147, 149, 161b, 161i, 161o, 182 and 186 of the Atomic Energy Act of 1954, as amended, and the Commission's regulations in 10 CFR 2.202, 10 CFR Parts 30 and 73, *it is hereby ordered* , effective immediately, that all licensees identified in attachment 1 to order EA-07-050 and all other persons who seek or obtain access to safeguards information, as described above, shall comply with the requirements set forth in this order. A. 1. No person may have access to SGI unless that person has a need-to-know the SGI, has been fingerprinted or who has a favorably-decided FBI identification and criminal history records check, and satisfies all other applicable requirements for access to SGI. Fingerprinting and the FBI identification and criminal history records check are not required, however, for any person who is relieved from that requirement by 10 CFR 73.59 [(71 FR 33,989 (June 13, 2006))], or who has a favorably-decided U.S. Government criminal history records check within the last five
(5)years, or who has an active Federal security clearance, provided in the latter two cases that the appropriate documentation is made available to the Licensee's NRC-approved reviewing official. 2. No person may have access to any SGI if the NRC has determined, based on fingerprinting and an FBI identification and criminal history records check, that the person may not have access to SGI. B. No person may provide SGI to any other person except in accordance with Condition III.A. above. Prior to providing SGI to any person, a copy of this Order shall be provided to that person. C. All Licensees identified in Attachment 1 to Order EA-07-050 shall comply with the following requirements: 1. The Licensee shall, within twenty
(20)days of the date of this Order, establish and maintain a fingerprinting program that meets the requirements of Attachment 1 to this Order. 2. The Licensee shall, within twenty
(20)days of the date of this Order, submit the fingerprints of one
(1)individual who
(a)the Licensee nominates as the “reviewing official” for determining access to SGI by other individuals, and
(b)has an established need-to-know the information and has been determined to be trustworthy and reliable in accordance with the requirements described in Attachment 3 to Order EA-07-050. The NRC will determine whether this individual (or any subsequent reviewing official) may have access to SGI and, therefore, will be permitted to serve as the Licensee's reviewing official. 4 The Licensee may, at the same time or later, submit the fingerprints of other individuals to whom the Licensee seeks to grant access to SGI. Fingerprints shall be submitted and reviewed in accordance with the procedures described in Attachment 1 of this Order. 4 The NRC's determination of this individual's access to SGI in accordance with the process described in Enclosure 5 to the transmittal letter of this Order is an administrative determination that is outside the scope of this Order. 3. The Licensee shall, in writing, within twenty
(20)days of the date of this Order, notify the Commission,
(1)if it is unable to comply with any of the requirements described in this Order, including Attachment 1 to this Order, or
(2)if compliance with any of the requirements is unnecessary in its specific circumstances. The notification shall provide the Licensee's justification for seeking relief from or variation of any specific requirement. Licensee responses to C.1., C.2., and C.3. above shall be submitted to the Director, Office of Federal and State Materials and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555. In addition, Licensee responses shall be marked as “Security- Related Information—Withhold Under 10 CFR 2.390.” The Director, Office of Federal and State Materials and Environmental Management Programs, may, in writing, relax or rescind any of the above conditions upon demonstration of good cause by the Licensee. IV In accordance with 10 CFR 2.202, the Licensee must, and any other person adversely affected by this Order may, submit an answer to this Order, and may request a hearing on this Order, within twenty
(20)days of the date of this Order. Where good cause is shown, consideration will be given to extending the time to request a hearing. A request for extension of time in which to submit an answer or request a hearing must be made in writing to the Director, Office of Federal and State Materials and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555, and include a statement of good cause for the extension. The answer may consent to this Order. Unless the answer consents to this Order, the answer shall, in writing and under oath or affirmation, specifically set forth the matters of fact and law on which the Licensee or other person adversely affected relies and the reasons as to why the Order should not have been issued. Any answer or request for a hearing shall be submitted to the Secretary, Office of the Secretary, U.S. Nuclear Regulatory Commission, *ATTN:* Rulemakings and Adjudications Staff, Washington, DC 20555. Copies also shall be sent to the Director, Office of Federal and State Materials and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555, and to the Assistant General Counsel for Materials Litigation and Enforcement at the same address, and to the Licensee if the answer or hearing request is by a person other than the Licensee. Because of possible delays in delivery of mail to United States Government offices, it is requested that answers and requests for hearing be transmitted to the Secretary of the Commission either by means of facsimile transmission to 301-415-1101 or by e-mail to *hearingdocket@nrc.gov* and also to the Office of the General Counsel either by means of facsimile transmission to 301-415-3725 or by e-mail to *OGCMailCenter@nrc.gov* . If a person other than the Licensee requests a hearing, that person shall set forth with particularity the manner in which his/her interest is adversely affected by this Order and shall address the criteria set forth in 10 CFR 2.309. If a hearing is requested by the Licensee or a person whose interest is adversely affected, the Commission will issue an Order designating the time and place of any hearing. If a hearing is held, the issue to be considered at such hearing shall be whether this Order should be sustained. Pursuant to 10 CFR 2.202(c)(2)(i), the Licensee may, in addition to demanding a hearing, at the time the answer is filed or sooner, move the presiding officer to set aside the immediate effectiveness of the Order on the ground that the Order, including the need for immediate effectiveness, is not based on adequate evidence but on mere suspicion, unfounded allegations, or error. In the absence of any request for hearing, or written approval of an extension of time in which to request a hearing, the provisions as specified above in Section III shall be final twenty
(20)days from the date of this Order without further order or proceedings. If an extension of time for requesting a hearing has been approved, the provisions as specified above in Section III shall be final when the extension expires if a hearing request has not been received. An answer or a request for hearing shall not stay the immediate effectiveness of this Order. Dated this 8th day of March 2007. For The Nuclear Regulatory Commission. Charles L. Miller, Director, Office of Federal and State Materials and Environmental Management Programs. Attachment 1: Requirements for Fingerprinting and Criminal History Records Checks of Individuals When Licensee's Reviewing Official is Determining Access to Safeguards Information. Requirements for Fingerprinting and Criminal History Records Checks of Individuals When Licensee's Reviewing Official is Determining Access to Safeguards Information. General Requirements Licensees shall comply with the requirements of this attachment. A. 1. Each Licensee subject to the provisions of this attachment shall fingerprint each individual who is seeking or permitted access to Safeguards Information (SGI). The Licensee shall review and use the information received from the Federal Bureau of Investigation
(FBI)and ensure that the provisions contained in the subject Order and this attachment are satisfied. 2. The Licensee shall notify each affected individual that the fingerprints will be used to secure a review of his/her criminal history record and inform the individual of the procedures for revising the record or including an explanation in the record, as specified in the “Right to Correct and Complete Information” section of this attachment. 3. Fingerprints need not be taken if an employed individual (e.g., a Licensee employee, contractor, manufacturer, or supplier) is relieved from the fingerprinting requirement by 10 CFR Part 73.59, has a favorably-decided U.S. Government criminal history records check within the last five
(5)years, or has an active federal security clearance. Written confirmation from the Agency/employer which granted the federal security clearance or reviewed the criminal history records check must be provided. The Licensee must retain this documentation for a period of three
(3)years from the date the individual no longer requires access to SGI associated with the Licensee's activities. 4. All fingerprints obtained by the Licensee pursuant to this Order must be submitted to the Commission for transmission to the FBI. 5. The Licensee shall review the information received from the FBI and consider it, in conjunction with the trustworthy and reliability requirements included in Attachment 3 to this Order, in making a determination whether to grant access to SGI to individuals who have a need-to-know the SGI. 6. The Licensee shall use any information obtained as part of a criminal history records check solely for the purpose of determining an individual's suitability for access to SGI. 7. The Licensee shall document the basis for its determination whether to grant access to SGI. B. The Licensee shall notify the NRC of any desired change in reviewing officials. The NRC will determine whether the individual nominated as the new reviewing official may have access to SGI based on a previously-obtained or new criminal history check and, therefore, will be permitted to serve as the Licensee's reviewing official. Prohibitions A Licensee shall not base a final determination to deny an individual access to SGI solely on the basis of information received from the FBI involving: An arrest more than one
(1)year old for which there is no information of the disposition of the case, or an arrest that resulted in dismissal of the charge or an acquittal. A Licensee shall not use information received from a criminal history check obtained pursuant to this Order in a manner that would infringe upon the rights of any individual under the First Amendment to the Constitution of the United States, nor shall the Licensee use the information in any way which would discriminate among individuals on the basis of race, religion, national origin, sex, or age. Procedures for Processing Fingerprint Checks For the purpose of complying with this Order, Licensees shall, using an appropriate method listed in 10 CFR part 73.4, submit to the NRC's Division of Facilities and Security, Mail Stop T-6E46, one completed, legible standard fingerprint card (Form FD-258, ORIMDNRCOOOZ) or, where practicable, other fingerprint records for each individual seeking access to Safeguards Information, to the Director of the Division of Facilities and Security, marked for the attention of the Division's Criminal History Check Section. Copies of these forms may be obtained by writing the Office of Information Services, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, by calling
(301)415-5877, or by e-mail to *forms@nrc.gov* . Practicable alternative formats are set forth in 10 CFR part 73.4. The Licensee shall establish procedures to ensure that the quality of the fingerprints taken results in minimizing the rejection rate of fingerprint cards due to illegible or incomplete cards. The NRC will review submitted fingerprint cards for completeness. Any Form FD-258 fingerprint record containing omissions or evident errors will be returned to the Licensee for corrections. The fee for processing fingerprint checks includes one re-submission if the initial submission is returned by the FBI because the fingerprint impressions cannot be classified. The one free re-submission must have the FBI Transaction Control Number reflected on the re-submission. If additional submissions are necessary, they will be treated as initial submittals and will require a second payment of the processing fee. Fees for processing fingerprint checks are due upon application. Licensees shall submit payment with the application for processing fingerprints by corporate check, certified check, cashier's check, money order, or electronic payment, made payable to “U.S. NRC.” [For guidance on making electronic payments, contact the Facilities Security Branch, Division of Facilities and Security, at
(301)415-7404]. Combined payment for multiple applications is acceptable. The application fee (currently $27) is the sum of the user fee charged by the FBI for each fingerprint card or other fingerprint record submitted by the NRC on behalf of a Licensee, and an NRC processing fee, which covers administrative costs associated with NRC handling of Licensee fingerprint submissions. The Commission will directly notify Licensees who are subject to this regulation of any fee changes. The Commission will forward to the submitting Licensee all data received from the FBI as a result of the Licensee's application(s) for criminal history records checks, including the FBI fingerprint record. Right To Correct and Complete Information Prior to any final adverse determination, the Licensee shall make available to the individual the contents of any criminal records obtained from the FBI for the purpose of assuring correct and complete information. Written confirmation by the individual of receipt of this notification must be maintained by the Licensee for a period of one
(1)year from the date of the notification. If, after reviewing the record, an individual believes that it is incorrect or incomplete in any respect and wishes to change, correct, or update the alleged deficiency, or to explain any matter in the record, the individual may initiate challenge procedures. These procedures include either direct application by the individual challenging the record to the agency (i.e., law enforcement agency) that contributed the questioned information, or direct challenge as to the accuracy or completeness of any entry on the criminal history record to the Assistant Director, Federal Bureau of Investigation Identification Division, Washington, DC 20537-9700 (as set forth in 28 CFR 16.30 through 16.34). In the latter case, the FBI forwards the challenge to the agency that submitted the data and requests that agency to verify or correct the challenged entry. Upon receipt of an official communication directly from the agency that contributed the original information, the FBI Identification Division makes any changes necessary in accordance with the information supplied by that agency. The Licensee must provide at least ten
(10)days for an individual to initiate an action challenging the results of an FBI criminal history records check after the record is made available for his/her review. The Licensee may make a final SGI access determination based upon the criminal history record only upon receipt of the FBI's ultimate confirmation or correction of the record. Upon a final adverse determination on access to SGI, the Licensee shall provide the individual its documented basis for denial. Access to SGI shall not be granted to an individual during the review process. Protection of Information 1. Each Licensee who obtains a criminal history record on an individual pursuant to this Order shall establish and maintain a system of files and procedures for protecting the record and the personal information from unauthorized disclosure. 2. The Licensee may not disclose the record or personal information collected and maintained to persons other than the subject individual, his/her representative, or to those who have a need to access the information in performing assigned duties in the process of determining access to Safeguards Information. No individual authorized to have access to the information may re-disseminate the information to any other individual who does not have a need-to-know. 3. The personal information obtained on an individual from a criminal history record check may be transferred to another Licensee if the Licensee holding the criminal history record check receives the individual's written request to re-disseminate the information contained in his/her file, and the gaining Licensee verifies information such as the individual's name, date of birth, social security number, sex, and other applicable physical characteristics for identification purposes. 4. The Licensee shall make criminal history records, obtained under this section, available for examination by an authorized representative of the NRC to determine compliance with the regulations and laws. 5. The Licensee shall retain all fingerprint and criminal history records received from the FBI, or a copy if the individual's file has been transferred, for 3 years after termination of employment or determination of access to SGI (whether access was approved or denied). After the required 3-year period, these documents shall be destroyed by a method that will prevent reconstruction of the information in whole or in part. [FR Doc. E7-4749 Filed 3-14-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [EA-07-050] In The Matter Of All Licensees Who Possess Radioactive Material In Quantities Of Concern And All Other Persons Who Obtain Safeguards Information Described Herein; Order Imposing Requirements for the Protection of Certain Safeguards Information (Effective Immediately) The Licensees, identified in Attachment 1 1 to this Order, are applicants for or hold licenses issued in accordance with the Atomic Energy Act of 1954, by the U.S. Nuclear Regulatory Commission (NRC or Commission) or an Agreement State, authorizing them to possess, use, and transfer items containing radioactive material quantities of concern. NRC intends to issue security Orders to these licensees in the near future. Orders will be issued to both NRC and Agreement State materials licensees who may possess or transfer radioactive material quantities of concern. The Orders will require compliance with specific Compensatory Measures to enhance the security for certain radioactive material quantities of concern. The NRC will issue Orders to both NRC and Agreement State licensees under its authority to protect the common defense and security, which has not been relinquished to the Agreement States. The Commission has determined that these documents will contain Safeguards Information, will not be released to the public, and must be protected from unauthorized disclosure. Therefore, the Commission is imposing the requirements, as set forth in Attachments 2 and 3 to this Order and in Order EA-07-051, so that affected Licensees can receive these documents. This Order also imposes requirements for the protection of Safeguards Information in the hands of any person, 2 whether or not a licensee of the Commission, who produces, receives, or acquires Safeguards Information. 1 Attachment 1 contains sensitive information and will not be released to the public. 2 Person means
(1)any individual, corporation, partnership, firm, association, trust, estate, public or private institution, group, government agency other than the Commission or the Department, except that the Department shall be considered a person with respect to those facilities of the Department specified in section 202 of the Energy Reorganization Act of 1974 (88 Stat. 1244), any State or any political subdivision of, or any political entity within a State, any foreign government or nation or any political subdivision of any such government or nation, or other entity; and
(2)any legal successor, representative, agent, or agency of the foregoing. II The Commission has broad statutory authority to protect and prohibit the unauthorized disclosure of Safeguards Information. Section 147 of the Atomic Energy Act of 1954, as amended, grants the Commission explicit authority to “* * * issue such orders, as necessary to prohibit the unauthorized disclosure of safeguards information * * *” This authority extends to information concerning transfer of special nuclear material, source material, and byproduct material. Licensees and all persons who produce, receive, or acquire Safeguards Information must ensure proper handling and protection of Safeguards Information to avoid unauthorized disclosure in accordance with the specific requirements for the protection of Safeguards Information contained in Attachments 2 and 3 to this Order. The Commission hereby provides notice that it intends to treat violations of the requirements contained in Attachments 2 and 3 to this Order applicable to the handling and unauthorized disclosure of Safeguards Information as serious breaches of adequate protection of the public health and safety and the common defense and security of the United States. Access to Safeguards Information is limited to those persons who have established the need-to-know the information, are considered to be trustworthy and reliable, and meet the requirements of Order EA-07-051. A need-to-know means a determination by a person having responsibility for protecting Safeguards Information that a proposed recipient's access to Safeguards Information is necessary in the performance of official, contractual, or licensee duties of employment. Licensees and all other persons who obtain Safeguards Information must ensure that they develop, maintain and implement strict policies and procedures for the proper handling of Safeguards Information to prevent unauthorized disclosure, in accordance with the requirements in Attachments 2 and 3 to this Order. All licensees must ensure that all contractors whose employees may have access to Safeguards Information either adhere to the licensee's policies and procedures on Safeguards Information or develop, maintain and implement their own acceptable policies and procedures. The licensees remain responsible for the conduct of their contractors. The policies and procedures necessary to ensure compliance with applicable requirements contained in Attachments 2 and 3 to this Order must address, at a minimum, the following: the general performance requirement that each person who produces, receives, or acquires Safeguards Information shall ensure that Safeguards Information is protected against unauthorized disclosure; protection of Safeguards Information at fixed sites, in use and in storage, and while in transit; correspondence containing Safeguards Information; access to Safeguards Information; preparation, marking, reproduction and destruction of documents; external transmission of documents; use of automatic data processing systems; removal of the Safeguards Information category; the need-to-know the information; and background checks to determine access to the information. In order to provide assurance that the licensees are implementing prudent measures to achieve a consistent level of protection to prohibit the unauthorized disclosure of Safeguards Information, all licensees who hold licenses issued by the NRC or an Agreement State authorizing them to possess and who may transport items containing radioactive material quantities of concern shall implement the requirements identified in Attachments 2 and 3 to this Order. The Commission recognizes that licensees may have already initiated many of the measures set forth in Attachments 2 and 3 to this Order for handling of Safeguards Information in conjunction with current NRC license requirements or previous NRC Orders. Additional measures set forth in Attachments 2 and 3 to this Order should be incorporated into the licensee's current program for Safeguards Information. In addition, pursuant to 10 CFR 2.202, I find that in light of the common defense and security matters identified above, which warrant the issuance of this Order, the public health, safety and interest require that this Order be effective immediately. III Accordingly, pursuant to Sections 81, 147, 161b, 161i, 161o, 182 and 186 of the Atomic Energy Act of 1954, as amended, and the Commission's regulations in 10 CFR 2.202, 10 CFR part 30, 10 CFR part 32, 10 CFR part 35, and 10 CFR part 70, *it is hereby ordered* , effective immediately, that all licensees identified in attachment 1 to this order and all other persons who produce, receive, or acquire the additional security measures identified above (whether draft or final) or any related safeguards information shall comply with the requirements of attachments 2 and 3 to this order. The Director, Office of Federal and State Materials and Environmental Management Programs, may, in writing, relax or rescind any of the above conditions upon demonstration of good cause by the licensee. IV In accordance with 10 CFR 2.202, the Licensee must, and any other person adversely affected by this Order may, submit an answer to this Order, and may request a hearing on this Order, within twenty
(20)days of the date of this Order. Where good cause is shown, consideration will be given to extending the time to request a hearing. A request for extension of time in which to submit an answer or request a hearing must be made in writing to the Director, Office of Federal and State Materials and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555, and include a statement of good cause for the extension. The answer may consent to this Order. Unless the answer consents to this Order, the answer shall, in writing and under oath or affirmation, specifically set forth the matters of fact and law on which the Licensee or other person adversely affected relies and the reasons as to why the Order should not have been issued. Any answer or request for a hearing shall be submitted to the Secretary, Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, ATTN: Rulemakings and Adjudications Staff, Washington, DC 20555. Copies also shall be sent to the Director, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555, to the Assistant General Counsel for Materials Litigation and Enforcement at the same address, and to the Licensee if the answer or hearing request is by a person other than the Licensee. Because of possible delays in delivery of mail to United States Government offices, it is requested that answers and requests for hearing be transmitted to the Secretary of the Commission either by means of facsimile transmission to 301-415-1101 or by e-mail to *hearingdocket@nrc.gov* and also to the Office of the General Counsel either by means of facsimile transmission to 301-415-3725 or by e-mail to *OGCMailCenter@nrc.gov* . If a person other than the Licensee requests a hearing, that person shall set forth with particularity the manner in which his interest is adversely affected by this Order and shall address the criteria set forth in 10 CFR 2.309. If a hearing is requested by the Licensee or a person whose interest is adversely affected, the Commission will issue an Order designating the time and place of any hearing. If a hearing is held, the issue to be considered at such hearing shall be whether this Order should be sustained. Pursuant to 10 CFR 2.202(c)(2)(i), the Licensee may, in addition to demanding a hearing, at the time the answer is filed or sooner, move the presiding officer to set aside the immediate effectiveness of the Order on the ground that the Order, including the need for immediate effectiveness, is not based on adequate evidence but on mere suspicion, unfounded allegations, or error. In the absence of any request for hearing, or written approval of an extension of time in which to request a hearing, the provisions specified in Section III above shall be final twenty
(20)days from the date of this Order without further order or proceedings. If an extension of time for requesting a hearing has been approved, the provisions specified in Section III shall be final when the extension expires if a hearing request has not been received. An answer or a request for hearing shall not stay the immediate effectiveness of this order. Dated this 8th day of March 2007. For The Nuclear Regulatory Commission. Charles L. Miller, Director, Office of Federal and State Materials and Environmental Management Programs. Attachment 1: List of Applicable Materials Licensees Redacted. Attachment 2: Modified Handling Requirements for the Protection of Certain Safeguards Information (SGI-M). Modified Handling Requirements for the Protection of Certain Safeguards Information (SGI-M). General Requirement Information and material that the U.S. Nuclear Regulatory Commission
(NRC)determines are safeguards information must be protected from unauthorized disclosure. In order to distinguish information needing modified protection requirements from the safeguards information for reactors and fuel cycle facilities that require a higher level of protection, the term “Safeguards Information-Modified Handling” (SGI-M) is being used as the distinguishing marking for certain materials licensees. Each person who produces, receives, or acquires SGI-M shall ensure that it is protected against unauthorized disclosure. To meet this requirement, licensees and persons shall establish and maintain an information protection system that includes the measures specified below. Information protection procedures employed by state and local police forces are deemed to meet these requirements. Persons Subject to These Requirements Any person, whether or not a licensee of the NRC, who produces, receives, or acquires SGI-M is subject to the requirements (and sanctions) of this document. Firms and their employees that supply services or equipment to materials licensees would fall under this requirement if they possess facility SGI-M. A licensee must inform contractors and suppliers of the existence of these requirements and the need for proper protection. (See more under Conditions for Access.) State or local police units who have access to SGI-M are also subject to these requirements. However, these organizations are deemed to have adequate information protection systems. The conditions for transfer of information to a third party, i.e., need-to-know, would still apply to the police organization as would sanctions for unlawful disclosure. Again, it would be prudent for licensees who have arrangements with local police to advise them of the existence of these requirements. Criminal and Civil Sanctions The Atomic Energy Act of 1954, as amended, explicitly provides that any person, “whether or not a licensee of the Commission, who violates any regulations adopted under this section shall be subject to the civil monetary penalties of section 234 of this Act.” Furthermore, willful violation of any regulation or order governing safeguards information is a felony subject to criminal penalties in the form of fines or imprisonment, or both. See sections 147b. and 223 of the Act. Conditions for Access Access to SGI-M beyond the initial recipients of the order will be governed by the background check requirements imposed by the order. Access to SGI-M by licensee employees, agents, or contractors must include both an appropriate need-to-know determination by the licensee, as well as a determination concerning the trustworthiness of individuals having access to the information. Employees of an organization affiliated with the licensee's company, e.g., a parent company, may be considered as employees of the licensee for access purposes. Need-to-Know Need-to-know is defined as a determination by a person having responsibility for protecting SGI-M that a proposed recipient's access to SGI-M is necessary in the performance of official, contractual, or licensee duties of employment. The recipient should be made aware that the information is SGI-M and those having access to it are subject to these requirements as well as criminal and civil sanctions for mishandling the information. Occupational Groups Dissemination of SGI-M is limited to individuals who have an established need-to-know and who are members of certain occupational groups. These occupational groups are: A. An employee, agent, or contractor of an applicant, a licensee, the Commission, or the United States Government; B. A member of a duly authorized committee of the Congress; C. The Governor of a State or his designated representative; D. A representative of the International Atomic Energy Agency
(IAEA)engaged in activities associated with the U.S./IAEA Safeguards Agreement who has been certified by the NRC; E. A member of a state or local law enforcement authority that is responsible for responding to requests for assistance during safeguards emergencies; F. A person to whom disclosure is ordered pursuant to Section 2.744(e) of Part 2 of Part 10 of the Code of Federal Regulations; or, G. State Radiation Control Program Directors (and State Homeland Security Directors) or their designees. In a generic sense, the individuals described above in
(A)through
(G)are considered to be trustworthy by virtue of their employment status. For non-governmental individuals in group
(A)above, a determination of reliability and trustworthiness is required. Discretion must be exercised in granting access to these individuals. If there is any indication that the recipient would be unwilling or unable to provide proper protection for the SGI-M, they are not authorized to receive SGI-M. Information Considered for Safeguards Information Designation Information deemed SGI-M is information the disclosure of which could reasonably be expected to have a significant adverse effect on the health and safety of the public or the common defense and security by significantly increasing the likelihood of theft, diversion, or sabotage of materials or facilities subject to NRC jurisdiction. SGI-M identifies safeguards information which is subject to these requirements. These requirements are necessary in order to protect quantities of nuclear material significant to the health and safety of the public or common defense and security. The overall measure for consideration of SGI-M is the usefulness of the information (security or otherwise) to an adversary in planning or attempting a malevolent act. The specificity of the information increases the likelihood that it will be useful to an adversary. Protection While in Use While in use, SGI-M shall be under the control of an authorized individual. This requirement is satisfied if the SGI-M is attended by an authorized individual even though the information is in fact not constantly being used. SGI-M, therefore, within alarm stations, continuously manned guard posts or ready rooms need not be locked in file drawers or storage containers. Under certain conditions the general control exercised over security zones or areas would be considered to meet this requirement. The primary consideration is limiting access to those who have a need-to-know. Some examples would be: Alarm stations, guard posts and guard ready rooms; Engineering or drafting areas if visitors are escorted and information is not clearly visible; Plant maintenance areas if access is restricted and information is not clearly visible; Administrative offices (e.g., central records or purchasing) if visitors are escorted and information is not clearly visible. Protection While in Storage While unattended, SGI-M shall be stored in a locked file drawer or container. Knowledge of lock combinations or access to keys protecting SGI-M shall be limited to a minimum number of personnel for operating purposes who have a “need-to-know” and are otherwise authorized access to SGI-M in accordance with these requirements. Access to lock combinations or keys shall be strictly controlled so as to prevent disclosure to an unauthorized individual. Transportation of Documents and Other Matter Documents containing SGI-M when transmitted outside an authorized place of use or storage shall be enclosed in two sealed envelopes or wrappers. The inner envelope or wrapper shall contain the name and address of the intended recipient, and be marked both sides, top and bottom with the words “Safeguards Information—Modified Handling.” The outer envelope or wrapper must be addressed to the intended recipient, must contain the address of the sender, and must not bear any markings or indication that the document contains SGI-M. SGI-M may be transported by any commercial delivery company that provides nationwide overnight service with computer tracking features, U.S. first class, registered, express, or certified mail, or by any individual authorized access pursuant to these requirements. Within a facility, SGI-M may be transmitted using a single opaque envelope. It may also be transmitted within a facility without single or double wrapping, provided adequate measures are taken to protect the material against unauthorized disclosure. Individuals transporting SGI-M should retain the documents in their personal possession at all times or ensure that the information is appropriately wrapped and also secured to preclude compromise by an unauthorized individual. Preparation and Marking of Documents While the NRC is the sole authority for determining what specific information may be designated as “SGI-M,” originators of documents are responsible for determining whether those documents contain such information. Each document or other matter that contains SGI-M shall be marked “Safeguards Information—Modified Handling” in a conspicuous manner on the top and bottom of the first page to indicate the presence of protected information. The first page of the document must also contain
(i)the name, title, and organization of the individual authorized to make a SGI-M determination, and who has determined that the document contains SGI-M,
(ii)the date the document was originated or the determination made,
(iii)an indication that the document contains SGI-M, and
(iv)an indication that unauthorized disclosure would be subject to civil and criminal sanctions. Each additional page shall be marked in a conspicuous fashion at the top and bottom with letters denoting “Safeguards Information—Modified Handling.” In addition to the “Safeguards Information—Modified Handling” markings at the top and bottom of each page, transmittal letters or memoranda which do not in themselves contain SGI-M shall be marked to indicate that attachments or enclosures contain SGI-M but that the transmittal does not (e.g., “When separated from SGI-M enclosure(s), this document is decontrolled”). In addition to the information required on the face of the document, each item of correspondence that contains SGI-M shall, by marking or other means, clearly indicate which portions (e.g., paragraphs, pages, or appendices) contain SGI-M and which do not. Portion marking is not required for physical security and safeguards contingency plans. All documents or other matter containing SGI-M in use or storage shall be marked in accordance with these requirements. A specific exception is provided for documents in the possession of contractors and agents of licensees that were produced more than one year prior to the effective date of the order. Such documents need not be marked unless they are removed from file drawers or containers. The same exception applies to old documents stored away from the facility in central files or corporation headquarters. Since information protection procedures employed by state and local police forces are deemed to meet NRC requirements, documents in the possession of these agencies need not be marked as set forth in this document. Removal From SGI-M Category Documents containing SGI-M shall be removed from the SGI-M category (decontrolled) only after the NRC determines that the information no longer meets the criteria of SGI-M. Licensees have the authority to make determinations that specific documents *which they created* no longer contain SGI-M information and may be decontrolled. Consideration must be exercised to ensure that any document decontrolled shall not disclose SGI-M in some other form or be combined with other unprotected information to disclose SGI-M. The authority to determine that a document may be decontrolled may be exercised only by, or with the permission of, the individual (or office) who made the original determination. The document shall indicate the name and organization of the individual removing the document from the SGI-M category and the date of the removal. Other persons who have the document in their possession should be notified of the decontrolling of the document. Reproduction of Matter Containing SGI-M SGI-M may be reproduced to the minimum extent necessary consistent with need without permission of the originator. Newer digital copiers which scan and retain images of documents represent a potential security concern. If the copier is retaining SGI-M information in memory, the copier cannot be connected to a network. It should also be placed in a location that is cleared and controlled for the authorized processing of SGI-M information. Different copiers have different capabilities, including some which come with features that allow the memory to be erased. Each copier would have to be examined from a physical security perspective. Use of Automatic Data Processing
(ADP)Systems SGI-M may be processed or produced on an ADP system provided that the system is assigned to the licensee's or contractor's facility and requires the use of an entry code/password for access to stored information. Licensees are encouraged to process this information in a computing environment that has adequate computer security controls in place to prevent unauthorized access to the information. An ADP system is defined here as a data processing system having the capability of long term storage of SGI-M. Word processors such as typewriters are not subject to the requirements as long as they do not transmit information off-site. (Note: if SGI-M is produced on a typewriter, the ribbon must be removed and stored in the same manner as other SGI-M information or media.) The basic objective of these restrictions is to prevent access and retrieval of stored SGI-M by unauthorized individuals, particularly from remote terminals. Specific files containing SGI-M will be password protected to preclude access by an unauthorized individual. The National Institute of Standards and Technology
(NIST)maintains a listing of all validated encryption systems at *http://csrc.nist.gov/cryptval/140-1/1401val.htm* . SGI-M files may be transmitted over a network if the file is encrypted. In such cases, the licensee will select a commercially available encryption system that NIST has validated as conforming to Federal Information Processing Standards (FIPS). SGI-M files shall be properly labeled as “Safeguards Information—Modified Handling” and saved to removable media and stored in a locked file drawer or cabinet. Telecommunications SGI-M may not be transmitted by unprotected telecommunications circuits except under emergency or extraordinary conditions. For the purpose of this requirement, emergency or extraordinary conditions are defined as any circumstances that require immediate communications in order to report, summon assistance for, or respond to a security event (or an event that has potential security significance). This restriction applies to telephone, telegraph, teletype, facsimile circuits, and to radio. Routine telephone or radio transmission between site security personnel, or between the site and local police, should be limited to message formats or codes that do not disclose facility security features or response procedures. Similarly, call-ins during transport should not disclose information useful to a potential adversary. Infrequent or non-repetitive telephone conversations regarding a physical security plan or program are permitted provided that the discussion is general in nature. Individuals should use care when discussing SGI-M at meetings or in the presence of others to ensure that the conversation is not overheard by persons not authorized access. Transcripts, tapes or minutes of meetings or hearings that contain SGI-M shall be marked and protected in accordance with these requirements. Destruction Documents containing SGI-M should be destroyed when no longer needed. They may be destroyed by tearing into small pieces, burning, shredding or any other method that precludes reconstruction by means available to the public at large. Piece sizes one half inch or smaller composed of several pages or documents and thoroughly mixed would be considered completely destroyed. Attachment 3: Trustworthy and Reliability Requirements for Individuals Handling Safeguards Information. In order to ensure the safe handling, use, and control of information designated as Safeguards Information, each licensee shall control and limit access to the information to only those individuals who have established the need-to-know the information, and are considered to be trustworthy and reliable. Licensees shall document the basis for concluding that there is reasonable assurance that individuals granted access to Safeguards Information are trustworthy and reliable, and do not constitute an unreasonable risk for malevolent use of the information. The Licensee shall comply with the requirements of this attachment: 8. The trustworthiness and reliability of an individual shall be determined based on a background investigation:
(a)The background investigation shall address at least the past 3 years, and, at a minimum, include verification of employment, education, and personal references. The licensee shall also, to the extent possible, obtain independent information to corroborate that provided by the employee (i.e., seeking references not supplied by the individual).
(b)If an individual's employment has been less than the required 3-year period, educational references may be used in lieu of employment history. The licensee's background investigation requirements may be satisfied for an individual that has an active Federal security clearance. 9. The licensee shall retain documentation regarding the trustworthiness and reliability of individual employees for 3 years after the individual's employment ends. [FR Doc. E7-4753 Filed 3-14-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Notice of Availability of Model Application Concerning Technical Specification Improvement Regarding Deletion of E Bar Definition and Revision to Reactor Coolant System Specific Activity Technical Specification Using the Consolidated Line Item Improvement Process AGENCY: Nuclear Regulatory Commission. ACTION: Notice of Availability. SUMMARY: Notice is hereby given that the staff of the U. S. Nuclear Regulatory Commission
(NRC)has prepared a model license amendment request (LAR), model safety evaluation (SE), and model proposed no significant hazards consideration
(NSHC)determination related to deletion of the E Bar definition and revision to reactor coolant system
(RCS)specific activity technical specification. This request revises the RCS specific activity specification for pressurized water reactors to utilize a new indicator, Dose Equivalent Xenon-133 instead of the current indicator known as E Bar. The purpose of these models is to permit the NRC staff to efficiently process amendments to incorporate these changes into plant-specific technical specifications
(TS)for Babcock and Wilcox, Westinghouse, and Combustion Engineering pressurized water reactors (PWRs). Licensees of nuclear power reactors to which the models apply can request amendments conforming to the models. In such a request, a licensee should confirm the applicability of the model LAR, model SE and NSHC determination to its plant. DATES: The NRC staff issued a **Federal Register** Notice (71 FR 67170, November 20, 2006) which provided a model LAR, model SE, and model NSHC related to deletion of E Bar definition and revision to RCS specific activity technical specification; similarly the NRC staff herein provides a revised model LAR, a revised model SE, and a revised model NSHC. The NRC staff can most efficiently consider applications based upon the model LAR, which references the model SE, if the application is submitted within one year of this **Federal Register** Notice. FOR FURTHER INFORMATION CONTACT: Trent Wertz, Mail Stop: O-12H2, Division of Inspection and Regional Support, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone
(301)415-1568. SUPPLEMENTARY INFORMATION: Background Regulatory Issue Summary 2000-06, “Consolidated Line Item Improvement Process (CLIIP) for Adopting Standard Technical Specifications Changes for Power Reactors,” was issued on March 20, 2000. The CLIIP is intended to improve the efficiency and transparency of NRC licensing processes. This is accomplished by processing proposed changes to the Standard Technical Specifications
(STS)in a manner that supports subsequent license amendment applications. The CLIIP includes an opportunity for the public to comment on proposed changes to the STS following a preliminary assessment by the NRC staff and finding that the change will likely be offered for adoption by licensees. The CLIIP directs the NRC staff to evaluate any comments received for a proposed change to the STS and to either reconsider the change or proceed with announcing the availability of the change for proposed adoption by licensees. Those licensees opting to apply for the subject change to TSs are responsible for reviewing the NRC staff's evaluation, referencing the applicable technical justifications, and providing any necessary plant-specific information. Each amendment application made in response to the notice of availability will be processed and noticed in accordance with applicable NRC rules and procedures. This notice involves replacement of the current PWR TS 3.4.16 limit on RCS gross specific activity with a new limit on RCS noble gas specific activity. The noble gas specific activity limit would be based on a new dose equivalent Xe-133
(DEX)definition that would replace the current E Bar average disintegration energy definition. In addition, the current dose equivalent I-131
(DEI)definition would be revised to allow the use of additional thyroid dose conversion factors (DCFs). By letter dated September 13, 2005, the Technical Specification Task Force
(TSTF)proposed these changes for incorporation into the STS as TSTF-490, Revision 0, which was referenced in the **Federal Register** Notice
(FRN)71 FR 67170, of November 20, 2006, and can be viewed on the NRC's Web page at *http://www.nrc.gov/reactors/operating/licensing/techspecs.html* . Applicability These proposed changes will revise the definition of DOSE EQUIVALENT I-131, delete the definition of “E Bar,” AVERAGE DISINTEGRATION ENERGY, add a new definition for DOSE EQUIVALENT XE-133, and revise LCO 3.4.16 for Babcock and Wilcox, Westinghouse, and Combustion Engineering PWRs. To efficiently process the incoming license amendment applications, the NRC staff requests that each licensee applying for the changes addressed by TSTF-490, Revision 0, using the CLIIP submit an LAR that adheres to the following model. Any variations from the model LAR should be explained in the licensee's submittal. Variations from the approach recommended in this notice may require additional review by the NRC staff, and may increase the time and resources needed for the review. Significant variations from the approach, or inclusion of additional changes to the license, will result in staff rejection of the submittal. Instead, licensees desiring significant variations and/or additional changes should submit a LAR that does not claim to adopt TSTF-490. Public Notices The staff issued a **Federal Register** Notice (71 FR 67170, November 20, 2006) that requested public comment on the NRC's pending action to delete the E Bar definition and revise the RCS specific activity technical specification. In particular, following an assessment and draft safety evaluation by the NRC staff, the staff sought public comment on proposed changes to the STS, designated TSTF-490 Revision 0. The TSTF-490 Revision 0 can be viewed on the NRC's Web page at *http://www.nrc.gov/reactors/operating/licensing/techspecs.html* . TSTF-490 Revision 0 may be examined, and/or copied for a fee, at the NRC Public Document Room, located at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland. Publicly available records are accessible electronically from the ADAMS Public Library component on the NRC Web site, (the Electronic Reading Room) at *http://www.nrc.gov/reading-rm/adams.html* . In response to the notice soliciting comments from the interested members of the public about NRC's pending action to delete the E Bar definition and revise the RCS specific activity technical specification, the staff received four sets of comments (from licensees and the TSTF Owners Groups, representing the licensees). Specific comments on the model SE, model LAR, and the model NSHC were offered, and are summarized and discussed below: 1. *Comment:* In Sections 3.1.4 and 3.1.7 the model safety evaluation states: “In MODES 5 and 6, the steam generators are not used for decay heat removal, the RCS and steam generators are depressurized, and primary to secondary leakage is minimal.” However, using the Westinghouse Standard Technical Specifications as an example, NUREG-1431, Vol. 2, Rev. 3.0, Bases 3.4.7 (RCS Loops-Mode 5, Loops Filled) states “In MODE 5 with the RCS loops filled, the primary function of the reactor coolant is the removal of decay heat and transfer this heat either to the steam generator(SG) secondary side coolant via natural circulation (Ref. 1) or the component cooling water via the residual heat removal
(RHR)heat exchangers.” Therefore, the steam generators are taken credit for as a means of removing decay heat during MODE 5. Additionally, the RCS may be pressurized during MODE 5. The statement as written in the model safety evaluation may prevent licensees from stating that their application is consistent with the model technical evaluation. *Response:* The comment addresses the MODES for which the LCO would be applicable. The NRC staff agrees that the statement in sections 3.1.4 and 3.1.7 does not acknowledge the condition of MODE 5 with the RCS loops filled. The Model SE will be modified to account for this condition. 2. *Comment:* There is currently one Technical Specification
(TS)3.4.16 limit on RCS gross specific activity, not “limits”. The single limit is 100/E Bar in all 3 affected STS NUREGs. There are two places that refer to limits (plural). *Response:* This editorial comment is correct, and the Supplemental Information section and the Model LAR will be revised accordingly. 3. *Comment:* In the Model SE, Section 2.0: Correct the title of TID 14844. “Reactor” is singular in the title. *Response:* This editorial comment is correct, and the Model SE will be revised accordingly. 4. *Comment:* In the Model SE, Section 3.1.1: The list of Dose Conversion Factor
(DCF)references should be bracketed since this change will be subject to plant specific considerations. The optional DCF reference included in TSTF-490, and discussed in the traveler's justification section 3.0 (paragraph 2, lines 4-9), for alternate source term plants should be included here as follows: “] or [Committed Dose Equivalent
(CDE)or Committed Effective Dose Equivalent
(CEDE)dose conversion factors from Table 2.1 of EPA Federal Guidance Report No. 11.]” *Response:* The Model SE endorsed the use of DCFs from Table 2.1 of FGR-11, 1988, “Limiting Values of Radionuclide Intake and Air Concentration and Dose Conversion Factors for Inhalation, Submersion, and Ingestion.” As stated in the model SE, it is incumbent on the licensee to ensure that the DCFs used in the determination of DEI are consistent with the DCFs used in the applicable dose consequence analyses. As such, the references for the applicable DCFs would indeed be plant specific and the model SE has been changed accordingly. 5. *Comment:* In the model SE, Section 3.1.2: All noble gas isotope lists and DCF citations should be bracketed since these changes are subject to plant specific considerations. The 2nd paragraph is missing a forward slash mark between the words “and” and “or” in the text “by tritium and corrosion and activation products * * *”. *Response:* This editorial comment is correct, and the Model SE will be corrected. 6. *Comment:* In the Model SE, Section 3.1.3: The discussion on revised Required Action A.1 should be relocated to Model SE Section 3.1.5 that discusses the changes to TS 3.4.16 condition A. *Response:* The NRC staff agrees that the discussion on revised Required Action A.1 should be relocated. The Model SE will be updated to reflect the change. 7. *Comment:* In the Model SE Section 3.1.6: This section states that Condition “C” is replaced with a new Condition “B”. This is only true for the B&W and CE STS NUREGs (1430 and 1432). It is not true for the Westinghouse STS NUREG-1431, and it should also be noted that the Westinghouse plants developed this traveler for submittal to the NRC. This section should state that “TS 3.4.16 Condition B [in NUREG-1431; C in NUREG-1430 and NUREG-1432] is replaced with a new Condition B for DEX not within limits.” Section 3.1.6 should also discuss the addition of the LCO 3.0.4.c Note to revised Required Action B.1, consistent with the Model Application, Enclosure 1, Section 2.0, item C. Suggested wording that could be used for this purpose is: “A Note is also added to the revised Required Action B.1 that states LCO 3.0.4.c is applicable. This Note would allow entry into a Mode or other specified condition in the LCO Applicability when LCO 3.4.16 is not being met and is the same Note that is currently stated for Required Actions A.1 and A.2. The proposed Note would allow entry into the applicable Modes when the DEX is not within its limit; in other words, the plant could go up in the Modes from Mode 4 to Mode 1 (power operation) while the DEX limit is exceeded and the DEX is being restored to within its limit. This Mode change allowance is acceptable due to the significant conservatism incorporated into the DEX specific activity limit, and the ability to restore transient specific activity excursions while the plant remains at, or proceeds to, power operation.” *Response:* The NRC staff agrees with the wording with this editorial comment and the Model SE will be updated to reflect the differences in the NUREGs. Also, a discussion concerning the LCO 3.0.4.c note to required Action B.1 will be added to the Model SE Section 3.1.6. 8. *Comment:* In the Model SE, Section 3.1.8: This section incorrectly states that revised SR 3.4.16.1 has a new LCO 3.0.4.c Note. It should state that SR 3.4.16.1 has a new performance modifying Note that reads: “Only required to be performed in Mode 1.” The application of this style of Note is discussed in Example 1.4-5 in the latest revision of the STS NUREGs. The LCO 3.0.4.c Note addition applies only to revised Required Action B.1 *Response:* The NRC staff believes that the new Note for SR 3.4.16.1 is consistent with Example 1.4-5 and the Note in SR 3.4.16.2 and therefore does not need to be changed. 9. *Comment:* In the Model SE, Section 3.1.2 states “The determination of DOSE EQUIVALENT XE-133 shall be performed using effective dose conversion factors for air submersion listed in Table III.1 of EPA Federal Guidance Report No. 12 or the average gamma disintegration energies as provided in ICRP Publication 38, “Radionuclide Transformations” or similar source.” What exactly is “similar source”? Does “similar source” apply to average gamma energies or to the DCFs such as published in Reg. Guide 1.109? *Response:* The selection of the dose conversion factors used in the definition of DEX should be consistent with the dose conversion factors currently employed in the licensee's dose consequence analyses and as such the reference for the dose conversion factors or the source of the gamma energies used in the definition will be site specific. Brackets will be placed around the references to indicate where site specific information should be included. 10. *Comment:* In the Model SE, Section 3.1.2 states “* * * the calculation of DEX is based on the acute dose to the whole body and considers the noble gases KR-85M, KR-87, KR-88, XE-133M, XE-133, XE-135M, XE-135 and XE-133 * * *”. Under the same Section two additional nuclides are added to the new definition for E-AVERAGE DISINTEGRATION ENERGY; Kr-85 and XE-131M. The addition of the additional nuclides appears to conflict with the preceding technical Evaluation. Is it the expectation that these two nuclides be added to the DEX calculation in addition to those listed in the preceding section? *Response:* The selection of the isotopes used in the definition of DEX will be site specific and based on the dose significant noble gas isotopes identified in the appropriate DBA dose consequence analyses. The list of noble gas isotopes will be placed in brackets to indicate that the actual list will be site specific. 11. *Comment:* The title of TSTF-490 is not capitalized consistently and is not consistent with the submitted Traveler. The title of TSTF-490 is “Deletion of E Bar Definition and Revision to RCS Specific Activity Tech Spec.” Note that there is no hyphen used in the term “E Bar.” *Response:* This editorial comment is correct, and the Model SE will be corrected. 12. *Comment:* In the proposed NSHC, to be consistent with 10 CFR 50.92(c)(2), the title of Criterion 2 should be revised to add the word “Accident” before “Previously Evaluated.” Specifically, it should state, “The Proposed Change Does Not Create the Possibility of a New or Different Kind of Accident from any Accident Previously Evaluated.” *Response:* This editorial comment is correct, and the proposed NSHC will be corrected. 13. *Comment:* In the Model LAR it states, “I declare under penalty of perjury under the laws of the United States of America that I am authorized by [LICENSEE] to make this request and that the foregoing is true and correct.” This statement is not consistent with the recommended statement given in RIS 2001-18, “Requirements for Oath and Affirmation.” RIS 2001-18 recommends the statement, “I declare [or certify, verify, state] under penalty of perjury that the foregoing is true and correct.” Note that RIS 2001-18 states that this statement must be used verbatim. We recommend that the Model Application be revised to be consistent with RIS 2001-18. *Response:* The statement in the Model LAR is consistent with RIS 2001-18. The purpose of RIS 2001-18 was to inform licensees that there is an alternative to the oath or affirmation statement contained in 28 U.S.C. 1746. Both are considered acceptable. The NRC staff includes only the first option listed in 28 U.S.C. 1746 for brevity. 14. *Comment:* In the Model LAR , Section 8.0 the second reference should be numbered. Note that Section 4.0 refers to References 1 and 2. *Response:* The references in Section 8.0 are numbered, however, for clarification, the Notice for Comment and the Notice for Availability will be listed as separate references. Dated at Rockville, Maryland this 8th day of March, 2007. For the Nuclear Regulatory Commission. Timothy J. Kobetz, Chief, Technical Specifications Branch, Division of Inspection and Regional Support, Office of Nuclear Reactor Regulation. FOR INCLUSION ON THE TECHNICAL SPECIFICATION WEB PAGE THE FOLLOWING EXAMPLE OF AN APPLICATION WAS PREPARED BY THE NRC STAFF TO FACILITATE THE ADOPTION OF TECHNICAL SPECIFICATION TASK FORCE
(TSTF)TRAVELER TSTF-490, REVISION 0 “DELETION OF E BAR DEFINITION AND REVISION TO RCS SPECIFIC ACTIVITY TECH SPEC.” THE MODEL PROVIDES THE EXPECTED LEVEL OF DETAIL AND CONTENT FOR AN APPLICATION TO ADOPT TSTF-490, REVISION 0. LICENSEES REMAIN RESPONSIBLE FOR ENSURING THAT THEIR ACTUAL APPLICATION FULFILLS THEIR ADMINISTRATIVE REQUIREMENTS AS WELL AS NRC REGULATIONS. U. S. Nuclear Regulatory Commission, Document Control Desk, Washington, DC 20555. *Subject:* Plant name, Docket N. 50-[xxx,] Re application for technical specification improvement to adopt tstf-490, revision 0, “deletion of E bar definition and revision to RCS specific activity tech spec.” Dear Sir or Madam: In accordance with the provisions of Section 50.90 of Title 10 of the Code of Federal Regulations (10 CFR), [LICENSEE] is submitting a request for an amendment to the technical specifications
(TS)for [PLANT NAME, UNIT NOS.]. The proposed changes would replace the current pressurized water reactor
(PWR)Technical Specification
(TS)3.4.16 limit on reactor coolant system
(RCS)gross specific activity with a new limit on RCS noble gas specific activity. The noble gas specific activity limit would be based on a new dose equivalent Xe-133
(DEX)definition that would replace the current E Bar average disintegration energy definition. In addition, the current dose equivalent I-131
(DEI)definition would be revised to allow the use of additional thyroid dose conversion factors (DCFs). The changes are consistent with NRC-approved Industry Technical Specification Task Force
(TSTF)Standard Technical Specification Change Traveler, TSTF-490, Revision 0, “Deletion of E Bar Definition and Revision to RCS Specific Activity Tech Spec.” The availability of this TS improvement was announced in the **Federal Register** on [DATE] ([ ]FR[ ]) as part of the consolidated line item improvement process (CLIIP). Enclosure 1 provides a description and assessment of the proposed changes, as well as confirmation of applicability. Enclosure 2 provides the existing TS pages and TS Bases marked-up to show the proposed changes. Enclosure 3 provides final TS pages and TS Bases pages. [LICENSEE] requests approval of the proposed license amendment by [DATE], with the amendment being implemented [BY DATE OR WITHIN X DAYS]. In accordance with 10 CFR 50.91, a copy of this application, with enclosures, is being provided to the designated [STATE] Official. I declare under penalty of perjury under the laws of the United States of America that I am authorized by [LICENSEE] to make this request and that the foregoing is true and correct. [Note that request may be notarized in lieu of using this oath or affirmation statement]. If you should have any questions regarding this submittal, please contact [ ]. Sincerely, Name, Title Enclosures: 1. Description and Assessment of Proposed Changes 2. Proposed Technical Specification Changes and Technical Specification Bases Changes 3. Final Technical Specification and Bases pages cc: NRR Project Manager Regional Office Resident Inspector State Contact ITSB Branch Chief 1.0 Description This letter is a request to amend Operating License(s) [LICENSE NUMBER(S)] for [PLANT/UNIT NAME(S)]. The proposed changes would replace the current limits on primary coolant gross specific activity with limits on primary coolant noble gas activity. The noble gas activity would be based on DOSE EQUIVALENT XE-133 and would take into account only the noble gas activity in the primary coolant. The changes were approved by the NRC staff Safety Evaluation
(SE)dated September 27, 2006 (ADAMS ML062700612) (Reference 1). Technical Specification Task Force
(TSTF)change traveler TSTF-490, Revision 0, “Deletion of E Bar Definition and Revision to RCS Specific Activity Tech Spec” was announced for availability in the **Federal Register** on [DATE] as part of the consolidated line item improvement process (CLIIP). 2.0 Proposed Changes Consistent with NRC-approved TSTF-490, Revision 0, the proposed TS changes: • Revise the definition of DOSE EQUIVALENT I-131. • Delete the definition of “E Bar, AVERAGE DISINTEGRATION ENERGY.” • Add a new TS definition for DOSE EQUIVALENT XE-133. • Revise LCO 3.4.16, “RCS Specific Activity” to delete references to gross specific activity; add limits for DOSE EQUIVALENT I-131 and DOSE EQUIVALENT XE-133; and delete Figure 3.4.16-1, “Reactor Coolant DOSE EQUIVALENT I-131 Specific Activity Limit versus Percent of RATED THERMAL POWER.” • Revise LCO 3.4.16 “Applicability” to specify the LCO is applicable in MODES 1, 2, 3, and 4. • Modify ACTIONS Table as follows: A. Condition A is modified to delete the reference to Figure 3.4.16-1, and define an upper limit that is applicable at all power levels. B. NUREG-1430 and NUREG-1432 ACTIONS are reordered, moving Condition C to Condition B to be consistent with the Writer's Guide. C. Condition B (was Condition C in NUREG-1430 and NUREG 1432) is modified to provide a Condition and Required Action for DOSE EQUIVALENT XE-133 instead of gross specific activity. The Completion Time is changed from 6 hours to 48 hours. A Note allowing the applicability of LCO 3.0.4.c is added, consistent with the Note to Required Action A.1. D. Condition C (was Condition B in NUREG-1430 and NUREG-1432) is modified based on the changes to Conditions A and B and to reflect the change in the LCO Applicability. Revise SR 3.4.16.1 to verify the limit for DOSE EQUIVALENT XE-133. A Note is added, consistent with SR 3.4.16.2 to allow entry into MODES 2, 3, and 4 prior to performance of the SR. Delete SR 3.4.16.3. 3.0 Background The background for this application is as stated in the model SE in NRC's Notice of Availability published on [DATE ]([ ] FR [ ]), the NRC Notice for Comment published on [DATE] ([ ] FR [ ]), and TSTF-490, Revision 0. 4.0 Technical Analysis [LICENSEE] has reviewed References 1, 2 and 3, and the model SE published on [DATE] ([ ]FR [ ]) as part of the CLIIP Notice for Comment. [LICENSEE] has applied the methodology in Reference 1 to develop the proposed TS changes. [LICENSEE] has also concluded that the justifications presented in TSTF-490, Revision 0 and the model SE prepared by the NRC staff are applicable to [PLANT, UNIT NOS.], and justify this amendment for the incorporation of the changes to the [PLANT] TS. 5.0 Regulatory Analysis A description of this proposed change and its relationship to applicable regulatory requirements and guidance was provided in the NRC Notice of Availability published on [DATE] ([ ] FR [ ]), the NRC Notice for Comment published on [DATE] ([ ] FR [ ]), and TSTF-490, Revision 0. 6.0 No Significant Hazards Consideration [LICENSEE] has reviewed the proposed no significant hazards consideration determination published in the **Federal Register** on [DATE] ([ ] FR [ ]) as part of the CLIIP. [LICENSEE] has concluded that the proposed determination presented in the notice is applicable to [PLANT] and the determination is hereby incorporated by reference to satisfy the requirements of 10 CFR 50.91(a). 7.0 Environmental Evaluation [LICENSEE] has reviewed the environmental consideration included in the model SE published in the **Federal Register** on [DATE] ([ ] FR [ ]) as part of the CLIIP. [LICENSEE] has concluded that the staff's findings presented therein are applicable to [PLANT] and the determination is hereby incorporated by reference for this application. 8.0 References 1. NRC Safety Evaluation
(SE)approving TSTF-490, Revision 0 dated September 27, 2006 2. Federal Notice for Comment published on [DATE] ([ ] FR [ ]) 3. Federal Notice of Availability published on [DATE ] ([ ] FR [ ]) Model Safety Evaluation, U.S. Nuclear Regulatory Commission, Office of Nuclear Reactor Regulation, Technical Specification Task Force TSTF-490, Revision 0, “Deletion of E Bar Definition and Revision to RCS Specific Activity Tech Spec”. 1.0 Introduction By letter dated [___, 20_], [LICENSEE] (the licensee) proposed changes to the technical specifications
(TS)for [PLANT NAME]. The requested changes are the adoption of TSTF-490, Revision 0, “Deletion of E Bar Definition and Revision to RCS Specific Activity Tech Spec” for pressurized water reactor
(PWR)Standard Technical Specifications (STS). By letter dated September 13, 2005, the Technical Specification Task Force
(TSTF)submitted TSTF-490 for Nuclear Regulatory Commission
(NRC)staff review. This TSTF involves changes to NUREG-1430, NUREG-1431, and NUREG-1432 STS Section 3.4.16 reactor coolant system
(RCS)gross specific activity limits with the addition of a new limit for noble gas specific activity. The noble gas specific activity limit would be based on a new dose equivalent Xe-133
(DEX)definition that replaces the current E Bar average disintegration energy definition. In addition, the current dose equivalent I-131
(DEI)definition would be revised to allow the use of additional thyroid dose conversion factors (DCFs). 2.0 Regulatory Evaluation The NRC staff evaluated the impact of the proposed changes as they relate to the radiological consequences of affected design basis accidents
(DBAs)that use the RCS inventory as the source term. The source term assumed in radiological analyses should be based on the activity associated with the projected fuel damage or the maximum RCS technical specifications
(TS)values, whichever maximizes the radiological consequences. The limits on RCS specific activity ensure that the offsite doses are appropriately limited for accidents that are based on releases from the RCS with no significant amount of fuel damage. The Steam Generator Tube Rupture
(SGTR)accident and the Main Steam Line Break
(MSLB)accident typically do not result in fuel damage and therefore the radiological consequence analyses are based on the release of primary coolant activity at maximum TS limits. For accidents that result in fuel damage, the additional dose contribution from the initial activity in the RCS is not normally evaluated and is considered to be insignificant in relation to the dose resulting from the release of fission products from the damaged fuel. For licensees that incorporate the source term as defined in Technical Information Document
(TID)14844, AEC, 1962, “Calculation of Distance Factors for Power and Test Reactors Sites,” in their dose consequence analyses, the NRC staff uses the regulatory guidance provided in NUREG-0800, “Standard Review Plan
(SRP)for the Review of Safety Analysis Reports for Nuclear Power Plants,” Section 15.1.5, “Steam System Piping Failures Inside and Outside of Containment (PWR),” Appendix A, “Radiological Consequences of Main Steam Line Failures Outside Containment,” Revision 2, for the evaluation of MSLB accident analyses and NUREG-0800, SRP Section 15.6.3, “Radiological Consequences of Steam Generator Tube Failure (PWR),” Revision 2, for evaluating SGTR accidents analyses. In addition, the NRC staff uses the guidance from RG 1.195, “Methods and Assumptions for Evaluating Radiological Consequences of Design Basis Accidents at Light Water Nuclear Power Reactors,” May 2003, for those licensees that chose to use its guidance for dose consequence analyses using the TID 14844 source term. For licensees using the alternative source term
(AST)in their dose consequence analyses, the NRC staff uses the regulatory guidance provided in NUREG-0800, SRP Section 15.0.1, “Radiological Consequence Analyses Using Alternative Source Terms,” Revision 0, July 2000, and the methodology and assumptions stated in Regulatory Guide
(RG)1.183, “Alternative Radiological Source Terms for Evaluating Design Basis Accidents at Nuclear Power Reactors”, July 2000. The applicable dose criteria for the evaluation of DBAs depends on the source term incorporated in the dose consequence analyses. For licensees using the TID 14844 source term, the maximum dose criteria to the whole body and the thyroid that an individual at the exclusion area boundary
(EAB)can receive for the first 2 hours following an accident, and at the low population zone
(LPZ)outer boundary for the duration of the radiological release, are specified in Title 10 of the Code of Federal Regulations (10 CFR) Part 100.11. These criteria are 25 roentgen equivalent man
(rem)total whole body dose and 300 rem thyroid dose from iodine exposure. The accident dose criteria in 10 CFR 100.11 is supplemented by accident specific dose acceptance criteria in SRP 15.1.5, Appendix A, SRP 15.6.3 or Table 4 of RG 1.195, “Methods and Assumptions for Evaluating Radiological Consequences of Design Basis Accidents at Light Water Nuclear Power Reactors,” May 2003. For control room dose consequence analyses that use the TID 14844 source term, the regulatory requirement for which the NRC staff bases its acceptance is General Design Criterion
(GDC)19 of Appendix A to 10 CFR Part 50, “Control Room”. GDC 19 requires that adequate radiation protection be provided to permit access and occupancy of the control room under accident conditions without personnel receiving radiation exposures in excess of 5 rem whole body, or its equivalent to any part of the body, for the duration of the accident. NUREG-0800, SRP Section 6.4, “Control Room Habitability System,” Revision 2, July 1981, provides guidelines defining the dose equivalency of 5 rem whole body as 30 rem for both the thyroid and skin dose. For licensees adopting the guidance from RG 1.196, “Control Room Habitability at Light Water Nuclear Power Reactors,” May 2003, Section C.4.5 of RG 1.195, May 2003, states that in lieu of the dose equivalency guidelines from Section 6.4 of NUREG-0800, the 10 CFR 20.1201 annual organ dose limit of 50 rem can be used for both the thyroid and skin dose equivalent of 5 rem whole body. Licensees using the AST are evaluated against the dose criteria specified in 10 CFR Part 50.67(b)(2). The off-site dose criteria are 25 rem total effective dose equivalent
(TEDE)at the EAB for any 2-hour period following the onset of the postulated fission product release and 25 rem TEDE at the outer boundary of the LPZ for the duration of the postulated fission product release. In addition, 10 CFR Part 50.67(b)(2)(iii) requires that adequate radiation protection be provided to permit access and occupancy of the control room under accident conditions without personnel receiving radiation exposures in excess of 5 rem TEDE for the duration of the accident. 3.0 Technical Evaluation 3.1 Technical Evaluation of TSTF-490 TS Changes 3.1.1 Revision to the Definition of DEI The list of acceptable DCFs for use in the determination of DEI include the following: • [Table III of TID-14844, AEC, 1962, “Calculation of Distance Factors for Power and Test Reactor Sites.”] • [Table E-7 of Regulatory Guide 1.109, Revision 1, NRC, 1977.] • [ICRP 30, 1979, page 192-212, Table titled “Committed Dose Equivalent in Target Organs or Tissues per Intake of Unit Activity.”] • [Committed Dose Equivalent
(CDE)or Committed Effective Dose Equivalent
(CEDE)dose conversion factors from Table 2.1 of EPA Federal Guidance Report No. 11.”] • [Table 2.1 of EPA Federal Guidance Report No. 11, 1988, “Limiting Values of Radionuclide Intake and Air Concentration and Dose Conversion Factors for Inhalation, Submersion, and Ingestion.”] Note: It is incumbent on the licensee to ensure that the DCFs used in the determination of DEI are consistent with the applicable dose consequence analyses. 3.1.2 Deletion of the Definition of E Bar and the Addition of a New Definition for DE Xe-133 The new definition for DEX is similar to the definition for DEI. The determination of DEX will be performed in a similar manner to that currently used in determining DEI, except that the calculation of DEX is based on the acute dose to the whole body and considers the noble gases [Kr-85m, Kr-85, Kr-87, Kr-88, Xe-131m, Xe-133m, Xe-133, Xe-135m, Xe-135, and Xe-138] which are significant in terms of contribution to whole body dose. Some noble gas isotopes are not included due to low concentration, short half life, or small dose conversion factor. The calculation of DEX would use either the average gamma disintegration energies for the nuclides or the effective dose conversion factors from Table III.1 of EPA FGR No. 12. Using this approach, the limit on the amount of noble gas activity in the primary coolant would not fluctuate with variations in the calculated values of E Bar. If a specified noble gas nuclide is not detected, the new definition states that it should be assumed the nuclide is present at the minimum detectable activity. This will result in a conservative calculation of DEX. When E Bar is determined using a design basis approach in which it is assumed that 1.0% of the power is being generated by fuel rods having cladding defects and it is also assumed that there is no removal of fission gases from the letdown flow, the value of E Bar is dominated by Xe-133. The other nuclides have relatively small contributions. However, during normal plant operation there are typically only a small amount of fuel clad defects and the radioactive nuclide inventory can become dominated by tritium and corrosion and/or activation products, resulting in the determination of a value of E Bar that is very different than would be calculated using the design basis approach. Because of this difference, the accident dose analyses become disconnected from plant operation and the limiting condition for operation
(LCO)becomes essentially meaningless. It also results in a TS limit that can vary during operation as different values for E Bar are determined. This change will implement a LCO that is consistent with the whole body radiological consequence analyses which are sensitive to the noble gas activity in the primary coolant but not to other non-gaseous activity currently captured in the E Bar definition. LCO 3.4.16 specifies the limit for primary coolant gross specific activity as 100/E Bar _Ci/gm. The current E Bar definition includes radioisotopes that decay by the emission of both gamma and beta radiation. The current Condition B of LCO 3.4.16 would rarely, if ever, be entered for exceeding 100/E Bar since the calculated value is very high (the denominator is very low) if beta emitters such as tritium (H-3) are included in the determination, as required by the E Bar definition. TS Section 1.1 definition for E—AVERAGE DISINTEGRATION ENERGY (E Bar) is deleted and replaced with a new definition for DEX which states: “DOSE EQUIVALENT XE-133 shall be that concentration of Xe-133 (microcuries per gram) that alone would produce the same acute dose to the whole body as the combined activities of noble gas nuclides [Kr-85m, Kr-85, Kr-87, Kr-88, Xe-131m, Xe-133m, Xe-133, Xe-135m, Xe-135, and Xe-138] actually present. If a specific noble gas nuclide is not detected, it should be assumed to be present at the minimum detectable activity. The determination of DOSE EQUIVALENT XE-133 shall be performed using [effective dose conversion factors for air submersion listed in Table III.1 of EPA Federal Guidance Report No. 12, 1993, “External Exposure to Radionuclides in Air, Water, and Soil” or the average gamma disintegration energies as provided in ICRP Publication 38, “Radionuclide Transformations” or similar source.]” The change incorporating the newly defined quantity DEX is acceptable from a radiological dose perspective since it will result in an LCO that more closely relates the non-iodine RCS activity limits to the dose consequence analyses which form their bases. Note: It is incumbent on the licensee to ensure that the DCFs used in the determination of DEI and the newly defined DEX are consistent with the DCFs used in the applicable dose consequence analysis. 3.1.3 LCO 3.4.16, “RCS Specific Activity” LCO 3.4.16 is modified to specify that iodine specific activity in terms of DEI and noble gas specific activity in terms of DEX shall be within limits. Currently the limiting indicators are not explicitly identified in the LCO, but are instead defined in current Condition C and Surveillance Requirement
(SR)3.4.16.1 for gross non-iodine specific activity and in current Condition A and SR 3.4.16.2 for iodine specific activity. The change states “RCS DOSE EQUIVALENT 1-131 and DOSE EQUIVALENT XE-133 specific activity shall be within limits.” NOTE: IT IS INCUMBENT ON THE LICENSEE TO ENSURE THAT THE SITE SPECIFIC LIMITS FOR BOTH DEI AND DEX ARE CONSISTENT WITH THE CURRENT SGTR AND MSLB RADIOLOGICAL CONSEQUENCE ANALYSES. 3.1.4 TS3.4.16 Applicability TS 3.4.16 Applicability is modified to include all of MODE 3 and MODE 4. It is necessary for the LCO to apply during MODES 1 through 4 to limit the potential radiological consequences of an SGTR or MSLB that may occur during these MODES. In MODE 5 with the RCS loops filled, the steam generators are specified as a backup means of decay heat removal via natural circulation. In this mode, however, due to the reduced temperature of the RCS, the probability of a DBA involving the release of significant quantities of RCS inventory is greatly reduced. Therefore, monitoring of RCS specific activity is not required. In MODE 5 with the RCS loops not filled and in MODE 6 the steam generators are not used for decay heat removal, the RCS and steam generators are depressurized and primary to secondary leakage is minimal. Therefore, the monitoring of RCS specific activity is not required. The change to modify the TS 3.4.16 Applicability to include all of MODE 3 and MODE 4 is necessary to limit the potential radiological consequences of an SGTR or MSLB that may occur during these MODES and is therefore acceptable from a radiological dose perspective. 3.1.5 TS3.4.16 Condition A TS 3.4.16 Condition A is revised by replacing the DEI site specific limit “> [1.0] _Ci/gm” with the words “not within limit” to be consistent with the revised TS 3.4.16 LCO format. The site specific DEI limit of ≤ [1.0] _Ci/gm is contained in SR 3.4.16.2. This proposed format change will not alter current STS requirements and is acceptable from a radiological dose perspective. TS 3.4.16 Required Action A.1 is revised to remove the reference to Figure 3.4.16-1 “Reactor Coolant DOSE EQUIVALENT I-131 Specific Activity Limit versus Percent of RATED THERMAL POWER” and insert a limit of less than or equal to the site specific DEI spiking limit. The curve contained in Figure 3.4.16-1 was provided by the AEC in a June 12, 1974 letter from the AEC on the subject, “Proposed Standard Technical Specifications for Primary Coolant Activity.” Radiological dose consequence analyses for SGTR and MSLB accidents that take into account the pre-accident iodine spike do not consider the elevated RCS iodine specific activities permitted by Figure 3.4.16-1 for operation at power levels below 80% RTP. Instead, the pre-accident iodine spike analyses assume a DEI concentration [60] times higher than the corresponding long term equilibrium value, which corresponds to the specific activity limit associated with 100% RTP operation. It is acceptable that TS 3.4.16 Required Action A.1 should be based on the short term site specific DEI spiking limit to be consistent with the assumptions contained in the radiological consequence analyses. 3.1.6 TS3.4.16 Condition B Revision To Include Action for DEX Limit TS 3.4.16 Condition C is replaced with a new Condition B [in NUREG-1431; C in NUREG-1430 and NUREG-1432] for DEX not within limits. This change is made to be consistent with the change to the TS 3.4.16 LCO, which requires the DEX specific activity to be within limits as discussed above in Section 3.1.3. The DEX limit is site specific and the numerical value in units of _Ci/gm is contained in revised SR 3.4.16.1. The site specific limit of DEX in _Ci/gm is established based on the maximum accident analysis RCS activity corresponding to 1% fuel clad defects with sufficient margin to accommodate the exclusion of those isotopes based on low concentration, short half life, or small dose conversion factors. The primary purpose of the TS 3.4.16 LCO on RCS specific activity and its associated Conditions is to support the dose analyses for DBAs. The whole body dose is primarily dependent on the noble gas activity, not the non-gaseous activity currently captured in the E Bar definition. The Completion Time for revised TS 3.4.16 Required Action B.1 will require restoration of DEX to within limit in 48 hours. This is consistent with the Completion Time for current Required Action A.2 for DEI. The radiological consequences for the SGTR and the MSLB accidents demonstrate that the calculated thyroid doses are generally a greater percentage of the applicable acceptance criteria than the calculated whole body doses. It then follows that the Completion Time for noble gas activity being out of specification in the revised Required Action B.1 should be at least as great as the Completion Time for iodine specific activity being out of specification in current Required Action A.2. Therefore the Completion Time of 48 hours for revised Required Action B.1 is acceptable from a radiological dose perspective. A Note is also added to the revised Required Action B.1 that states LCO 3.0.4.c is applicable. This Note would allow entry into a Mode or other specified condition in the LCO Applicability when LCO 3.4.16 is not being met and is the same Note that is currently stated for Required Actions A.1 and A.2. The proposed Note would allow entry into the applicable Modes from MODE 4 to MODE 1 (power operation) while the DEX limit is exceeded and the DEX is being restored to within its limit. This Mode change is acceptable due to the significant conservatism incorporated into the DEX specific activity limit, the low probability of an event occurring which is limiting due to exceeding the DEX specific activity limit, and the ability to restore transient specific excursions while the plant remains at, or proceeds to power operation. 3.1.7 TS 3.4.16 Condition C TS 3.4.16 Condition C is revised to include Condition B (DEX not within limit) if the Required Action and associated Completion Time of Condition B is not met. This is consistent with the changes made to Condition B which now provide the same completion time for both components of RCS specific activity as discussed in the revision to Condition B. The revision to Condition C also replaces the limit on DEI from the deleted Figure 3.4.16-1, with a site specific value of > [60] _Ci/gm. This change makes Condition C consistent with the changes made to TS 3.4.16 Required Action A.1. The change to TS 3.4.16 Required Action C.1 requires the plant to be in MODE 3 within 6 hours and adds a new Required Action C.2, which requires the plant to be in MODE 5 within 36 hours. These changes are consistent with the changes made to the TS 3.4.16 Applicability. The revised LCO is applicable throughout all of MODES 1 through 4 to limit the potential radiological consequences of an SGTR or MSLB that may occur during these MODES. In MODE 5 with the RCS loops filled, the steam generators are specified as a backup means of decay heat removal via natural circulation. In this mode, however, due to the reduced temperature of the RCS, the probability of a DBA involving the release of significant quantities of RCS inventory is greatly reduced. Therefore, monitoring of RCS specific activity is not required. In MODE 5 with the RCS loops not filled and MODE 6, the steam generators are not used for decay heat removal, the RCS and steam generators are depressurized, and primary to secondary leakage is minimal. Therefore, the monitoring of RCS specific activity is not required. A new TS 3.4.16 Required Action C.2 Completion Time of 36 hours is added for the plant to reach MODE 5. This Completion Time is reasonable, based on operating experience, to reach MODE 5 from full power conditions in an orderly manner and without challenging plant systems and the value of 36 hours is consistent with other TS which have a Completion Time to reach MODE 5. 3.1.8 SR3.4.16.1 DEX Surveillance The change replaces the current SR 3.4.16.1 surveillance for RCS gross specific activity with a surveillance to verify that the site specific reactor coolant DEX specific activity is ≤ [X] _Ci/gm. This change provides a surveillance for the new LCO limit added to TS 3.4.16 for DEX. The revised SR 3.4.16.1 surveillance requires performing a gamma isotopic analysis as a measure of the noble gas specific activity of the reactor coolant at least once every 7 days, which is the same frequency required under the current SR 3.4.16.1 surveillance for RCS gross non-iodine specific activity. The surveillance provides an indication of any increase in the noble gas specific activity. The results of the surveillance on DEX allow proper remedial action to be taken before reaching the LCO limit under normal operating conditions. SR 3.4.16.1 is modified by inclusion of a NOTE which permits the use of the provisions of LCO 3.0.4.c. This allowance permits entry into the applicable MODE(S) while relying on the ACTIONS. This allowance is acceptable due to the significant conservatism incorporated into the specific activity limit, the low probability of an event which is limiting due to exceeding this limit, and the ability to restore transient specific activity excursions while the plant remains at, or proceeds to power operation. This allows entry into MODE 4, MODE 3, and MODE 2 prior to performing the surveillance. This allows the surveillance to be performed in any of those MODES, prior to entering MODE 1, similar to the current surveillance SR 3.4.16.2 for DEI. 3.1.9 SR3.4.16.3 Deletion The current SR 3.4.16.3, which required the determination of E Bar, is deleted. TS 3.4.16 LCO on RCS specific activity supports the dose analyses for DBAs, in which the whole body dose is primarily dependent on the noble gas concentration, not the non-gaseous activity currently captured in the E Bar definition. With the elimination of the limit for RCS gross specific activity and the addition of the new LCO limit for noble gas specific activity, this SR to determine E Bar is no longer required. 3.2 Precedent The technical specifications developed for the Westinghouse AP600 and AP1000 advanced reactor designs incorporate an LCO for RCS DEX activity in place of the LCO on non-iodine gross specific activity based on E Bar. This approach was approved by the NRC staff for the AP600 in NUREG-1512, “Final Safety Evaluation Report Related to the Certification of the AP600 Standard Design, Docket No. 52-003,” dated August 1998 and for the AP1000 in the NRC letter to Westinghouse Electric Company dated September 13, 2004. In addition, the curve describing the maximum allowable iodine concentration during the 48-hour period of elevated activity as a function of power level, was not included in the TS approved for the AP600 and API000 advanced reactor designs. 4.0 State Consultation In accordance with the Commission's regulations, the [___] State official was notified of the proposed issuance of the amendment. The State official had [(1) no comments or
(2)the following comments—with subsequent disposition by the staff]. 5.0 Environmental Consideration The amendment[s] change[s] a requirement with respect to the installation or use of a facility component located within the restricted area as defined in 10 CFR Part 20 or surveillance requirements. The NRC staff has determined that the amendment involves no significant increase in the amounts, and no significant change in the types, of any effluents that may be released offsite, and that there is no significant increase in individual or cumulative occupational radiation exposure. The Commission has previously issued a proposed finding that the amendment involves no significant hazards consideration and there has been no public comment on such finding published [DATE] ([ ] FR [ ]). Accordingly, the amendment meets the eligibility criteria for categorical exclusion set forth in 10 CFR 51.22(c)(9). Pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared in connection with the issuance of the amendment. 6.0 Conclusion The Commission has concluded, based on the considerations discussed above, that
(1)There is reasonable assurance that the health and safety of the public will not be endangered by operation in the proposed manner,
(2)such activities will be conducted in compliance with the Commission's regulations, and
(3)the issuance of the amendment will not be inimical to the common defense and security or to the health and safety of the public. Proposed No Significant Hazards Consideration Determination *Description of Amendment Request:* [LICENSEE] requests adoption of an approved change to the Standard Technical Specifications
(STS)for pressurized water reactor
(PWR)plants (NUREG-1430, NUREG-1431, & NUREG-1432) and plant specific technical specifications (TS), to replace the current limits on primary coolant gross specific activity with limits on primary coolant noble gas activity. The noble gas activity would be based on DOSE EQUIVALENT XE-133 and would take into account only the noble gas activity in the primary coolant. The changes are consistent with NRC-approved Industry/Technical Specification Task Force
(TSTF)Standard Technical Specification Change Traveler, TSTF-490, Revision 0. *Basis for proposed no-significant-hazards-consideration determination:* As required by 10 CFR 50.91(a), an analysis of the issue of no-significant-hazards-consideration is presented below: Criterion 1-The Proposed Change Does Not Involve a Significant Increase in the Probability or Consequences of an Accident Previously Evaluated Reactor coolant specific activity is not an initiator for any accident previously evaluated. The Completion Time when primary coolant gross activity is not within limit is not an initiator for any accident previously evaluated. The current variable limit on primary coolant iodine concentration is not an initiator to any accident previously evaluated. As a result, the proposed change does not significantly increase the probability of an accident. The proposed change will limit primary coolant noble gases to concentrations consistent with the accident analyses. The proposed change to the Completion Time has no impact on the consequences of any design basis accident since the consequences of an accident during the extended Completion Time are the same as the consequences of an accident during the Completion Time. As a result, the consequences of any accident previously evaluated are not significantly increased. Criterion 2—The Proposed Change Does Not Create the Possibility of a New or Different Kind of Accident From any Accident Previously Evaluated The proposed change in specific activity limits does not alter any physical part of the plant nor does it affect any plant operating parameter. The change does not create the potential for a new or different kind of accident from any previously calculated. Criterion 3—The Proposed Change Does Not Involve a Significant Reduction in the Margin of Safety The proposed change revises the limits on noble gase radioactivity in the primary coolant. The proposed change is consistent with the assumptions in the safety analyses and will ensure the monitored values protect the initial assumptions in the safety analyses. Based upon the reasoning presented above and the previous discussion of the amendment request, the requested change does not involve a significant hazards consideration. Dated at Rockville, Maryland this _ day of ___, XXXX. For The Nuclear Regulatory Commission. Project Manager, Plant Licensing Branch [ ], Division of Operating Reactor Licensing, Office of Nuclear Reactor Regulation. [FR Doc. E7-4754 Filed 3-14-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Notice of Opportunity To Comment on Model Safety Evaluation and Model License Amendment Request on Technical Specification Improvement Regarding Relocation of Departure From Nucleate Boiling Parameters to the Core Operating Limits Report for Combustion Engineering Pressurized Water Reactors Using the Consolidated Line Item Improvement Process AGENCY: Nuclear Regulatory Commission. ACTION: Request for comment. SUMMARY: Notice is hereby given that the staff of the U. S. Nuclear Regulatory Commission
(NRC)has prepared a model license amendment request (LAR), model safety evaluation (SE), and model proposed no significant hazards consideration
(NSHC)determination related to changes to Standard Technical Specifications
(STSs)for Combustion Engineering Pressurized Water Reactors (PWRs), NUREG-1432, Revision 3.1. This change would allow the numerical limits located in technical specification
(TS)3.4.1, “RCS Pressure, Temperature, and Flow [Departure from Nucleate Boiling (DNB)] Limits” to be replaced with references to the Core Operating Limits Report (COLR). Associated changes are also included for the TS 3.4.1 Bases, and TS 5.6.3 “Core Operating Limits Report (COLR).” The Technical Specifications Task Force
(TSTF)proposed these changes to the TS in TSTF-487 Revision 0, “Relocate DNB Parameters to the COLR.” The purpose of the model SE, LAR, and NSHC is to permit the NRC to efficiently process amendments to incorporate these changes into plant-specific TSs for Combustion Engineering PWRs. Licensees of nuclear power reactors to which the models apply can request amendments conforming to the models. In such a request, a licensee should confirm the applicability of the model LAR, model SE and NSHC determination to its plant. The NRC staff is requesting comments on the model LAR, model SE and NSHC determination before announcing their availability for referencing in license amendment applications. DATES: The comment period expires 30 days from the date of this publication. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date. ADDRESSES: Comments may be submitted either electronically or via U.S. mail. Submit written comments to: Chief, Rulemaking, Directives, and Editing Branch, Division of Administrative Services, Office of Administration, *Mail Stop:* T-6 D59, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. *Hand deliver comments to:* 11545 Rockville Pike, Rockville, Maryland 20852, between 7:45 a.m. and 4:15 p.m. on Federal workdays. Submit comments by electronic mail to: *CLIIP@nrc.gov* . Copies of comments received may be examined at the NRC's Public Document Room, One White Flint North, Public File Area O1-F21, 11555 Rockville Pike (first floor), Rockville, Maryland. FOR FURTHER INFORMATION CONTACT: Ross Telson, *Mail Stop:* O-12H2, Division of Inspection and Regional Support, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone
(301)415-2256. SUPPLEMENTARY INFORMATION: Background Regulatory Issue Summary 2000-06, “Consolidated Line Item Improvement Process [CLIIP] for STSs Changes for Power Reactors,” was issued on March 20, 2000. The CLIIP is intended to improve the efficiency and transparency of NRC licensing processes. This is accomplished by processing proposed changes to the TS in a manner that supports subsequent license amendment applications. The CLIIP includes an opportunity for the public to comment on proposed changes to the TS following a preliminary assessment by the NRC staff and finding that the change will likely be offered for adoption by licensees. At the conclusion of the notice for comment period the NRC staff will evaluate any comments received for the proposed TS change and either reconsider the change or proceed with announcing the availability of the change for proposed adoption by licensees. Those licensees opting to apply for the subject change to TSs are responsible for reviewing the NRC staff's evaluation, referencing the applicable technical justifications, and providing any necessary plant-specific information. Following the public comment period, the model LAR and model SE will be finalized, and posted on the NRC web page. Each amendment application made in response to the notice of availability will be processed and noticed in accordance with applicable NRC rules and procedures. This notice involves the replacement of the departure from nucleate boiling
(DNB)parameter limits in TS 3.4.1 with references to the defined formal COLR for the values of these limits. With this alternative, reload license amendments for the sole purpose of updating the cycle specific DNB parameter limits will be unnecessary. This change would allow licensees of Combustion Engineering PWRs to recalculate DNB parameter limits in the COLR using NRC-approved methodologies. By letter dated June 20, 2005, the TSTF proposed these changes for incorporation into the STSs as TSTF-487, Revision 0. These changes are based on the NRC Generic Letter 88-16 “Removal of Cycle-Specific Parameter Limits from Technical Specifications.” This document is accessible electronically from the Agency-wide Documents Access and Management System's (ADAMS) Public Electronic Reading Room on the Internet (ADAMS Accession No. ML041830597) at the NRC Web site *http://www.nrc.gov/reading-rm/adams.html.* Persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS should contact the NRC Public Document Room Reference staff by telephone at 1-800-397-4209, 301-415-4737, or by e-mail to *pdr@nrc.gov.* Applicability These proposed changes will revise LCO 3.4.1, SR 3.4.1, the Bases associated with TS 3.4.1, and TS 5.6.3 for Combustion Engineering PWRs. To efficiently process the incoming license amendment applications, the NRC staff requests that each licensee applying for the changes addressed by TSTF-487 Revision 0, using the CLIIP submit an LAR that adheres to the following model. Any variations from the model LAR should be explained in the licensee's submittal. Variations from the approach recommended in this notice may require additional review by the NRC staff, and may increase the time and resources needed for the review. Significant variations from the approach, or inclusion of additional changes to the license, will result in NRC staff rejection of the submittal. Instead, licensees desiring significant variations and/or additional changes should submit a LAR that does not claim to adopt TSTF-487. Public Notices This notice requests comments from interested members of the public within 30 days of the date of this publication. Following the NRC staff's evaluation of comments received as a result of this notice, the NRC staff may reconsider the proposed change or may proceed with announcing the availability of the change in a subsequent notice (perhaps with some changes to the model LAR, model SE or model NSHC determination as a result of public comments). If the NRC staff announces the availability of the change, licensees wishing to adopt the change will submit an application in accordance with applicable rules and other regulatory requirements. The NRC staff will, in turn, issue for each application a notice of consideration of issuance of amendment to facility operating license(s), a proposed NSHC determination, and an opportunity for a hearing. A notice of issuance of an amendment to operating license(s) will also be issued to announce the revised requirements for each plant that applies for and receives the requested change. Dated at Rockville, Maryland this 7th day of March, 2007. For The Nuclear Regulatory Commission. Timothy J. Kobetz, Chief, Technical Specifications Branch, Division of Inspection and Regional Support, Office of Nuclear Reactor Regulation. FOR INCLUSION ON THE TECHNICAL SPECIFICATION WEB PAGE THE FOLLOWING EXAMPLE OF AN APPLICATION WAS PREPARED BY THE NRC STAFF TO FACILITATE THE ADOPTION OF TECHNICAL SPECIFICATIONS TASK FORCE
(TSTF)TRAVELER TSTF-487, REVISION 0 “RELOCATE DNB PARAMETERS TO THE COLR.” THE MODEL PROVIDES THE EXPECTED LEVEL OF DETAIL AND CONTENT FOR AN APPLICATION TO ADOPT TSTF-487, REVISION 0. LICENSEES REMAIN RESPONSIBLE FOR ENSURING THAT THEIR ACTUAL APPLICATION FULFILLS THEIR ADMINISTRATIVE REQUIREMENTS AS WELL AS NRC REGULATIONS. U. S. Nuclear Regulatory Commission, Document Control Desk, Washington, DC 20555. SUBJECT: PLANT NAME, DOCKET NO. 50-[xxx,] RE: APPLICATION FOR TECHNICAL SPECIFICATION IMPROVEMENT TO ADOPT TSTF-487, REVISION 0, “RELOCATE DNB PARAMETERS TO THE COLR” Dear Sir or Madam: In accordance with the provisions of Section 50.90 of Title 10 of the Code of Federal Regulations (10 CFR), [LICENSEE] is submitting a request for an amendment to the technical specifications
(TS)for [PLANT NAME, UNIT NOS.]. The proposed changes would allow [PLANT NAME] to replace the DNB numeric limits in TS with references to the core operating limits report (COLR). The changes are consistent with NRC-approved Industry Technical Specification Task Force
(TSTF)Standard Technical Specification Change Traveler, TSTF-487 Revision 0. The availability of this TS improvement was announced in the **Federal Register** on [DATE] ([ ]FR[ ]) as part of the consolidated line item improvement process (CLIIP). Enclosure 1 provides a description and assessment of the proposed changes, as well as confirmation of applicability. Enclosure 2 provides the existing TS pages and TS Bases marked-up to show the proposed changes. Enclosure 3 provides final TS pages and TS Bases pages. [LICENSEE] requests approval of the proposed license amendment by [DATE], with the amendment being implemented [BY DATE OR WITHIN X DAYS]. In accordance with 10 CFR 50.91, a copy of this application, with enclosures, is being provided to the designated [STATE] Official. I declare under penalty of perjury under the laws of the United States of America that I am authorized by [LICENSEE] to make this request and that the foregoing is true and correct. [Note that request may be notarized in lieu of using this oath or affirmation statement]. If you should have any questions regarding this submittal, please contact [ ]. Sincerely, Name, Title Enclosures: 1. Description and Assessment of Proposed Changes 2. Proposed Technical Specification Changes and Technical Specification Bases Changes 3. Final Technical Specification and Bases pages cc: NRR Project Manager Regional Office Resident Inspector State Contact ITSB Branch Chief 1.0 DESCRIPTION This letter is a request to amend Operating License(s) [LICENSE NUMBER(S)] for [PLANT/UNIT NAME(S)]. The proposed changes would revise Technical Specification
(TS)3.4.1, “RCS Pressure, Temperature, and Flow [Departure from Nucleate Boiling (DNB)] Limits,” the Bases for TS 3.4.1, and TS 5.6.3 “Core Operating Limits Report (COLR),” to allow [PLANT NAME] to place the DNB numeric limits with references to the COLR. Technical Specification Task Force
(TSTF)change traveler TSTF-487, Revision 0 “Relocate DNB Parameters to the COLR” was announced for availability in the **Federal Register** on [DATE] as part of the consolidated line item improvement process (CLIIP). 2.0 PROPOSED CHANGES Consistent with NRC-approved TSTF-487 Revision 0, the following changes are proposed: • Revise the limiting conditions for operation and surveillance requirements in TS 3.4.1 to replace the DNB numeric limits for reactor coolant pressure, temperature, and flow with references to limits for those parameters calculated in the COLR. • Revise the bases associated with TS 3.4.1 to reflect that the DNB numeric limits are contained in the COLR. • Revise TS 5.6.3 to add the methodology requirements for calculating the DNB numeric limits in the COLR, 3.0 BACKGROUND The background for this application is as stated in the model SE in NRC's Notice of Availability published on [DATE] ([ ] FR [ ]), the NRC Notice for Comment published on [DATE] ([ ] FR [ ]), and TSTF-487, Revision 0. 4.0 TECHNICAL ANALYSIS [LICENSEE] has reviewed Generic Letter 88-16, and the model SE published on [DATE] ([ ] FR [ ]) as part of the CLIIP Notice for Comment. [LICENSEE] has applied the methodology in Generic Letter 88-16 to develop the proposed TS changes. [LICENSEE] has also concluded that the justifications presented in TSTF-487, Revision 0 and the model SE prepared by the NRC staff are applicable to [PLANT, UNIT NOS.], and justify this amendment for the incorporation of the changes to the [PLANT] TS. 5.0 REGULATORY ANALYSIS A description of this proposed change and its relationship to applicable regulatory requirements and guidance was provided in the NRC Notice of Availability published on [DATE] ([ ] FR [ ]), the NRC Notice for Comment published on [DATE] ([ ] FR [ ]), and TSTF-487, Revision 0. 6.0 NO SIGNIFICANT HAZARDS CONSIDERATION [LICENSEE] has reviewed the proposed no significant hazards consideration determination published in the **Federal Register** on [DATE] ([ ] FR [ ]) as part of the CLIIP. [LICENSEE] has concluded that the proposed determination presented in the notice is applicable to [PLANT] and the determination is hereby incorporated by reference to satisfy the requirements of 10 CFR 50.91(a). 7.0 ENVIRONMENTAL EVALUATION [LICENSEE] has reviewed the environmental consideration included in the model SE published in the **Federal Register** on [DATE] ([ ] FR [ ]) as part of the CLIIP. [LICENSEE] has concluded that the staff's findings presented therein are applicable to [PLANT] and the determination is hereby incorporated by reference for this application. Proposed Safety Evaluation, U.S Nuclear Regulatory Commission, Office of Nuclear Reactor Regulation. Consolidated Line Item Improvement Technical Specification Task Force (TSTF). Change TSTF-487, Revision 0, RELOCATE DNB PARAMETERS TO THE COLR. 1.0 INTRODUCTION By application dated [Date], (Ref. 7.1), the [Name of Licensee] (the licensee) requested changes to the Technical Specifications
(TS)for the [Name of Facility]. The proposed changes would revise TS 3.4.1, the associated bases of TS 3.4.1, and TS 5.6.3 to replace the departure from nucleate boiling
(DNB)parameters limits in Technical Specifications
(TSs)with references to the Core Operating Limits Report (COLR). These changes would allow the licensee to recalculate the DNB parameter limits using NRC-approved methodologies without the need for a license amendment request (LAR). The proposed changes include the following: • Change TS 3.4.1, “RCS Pressure, Temperature, and Flow [Departure from Nucleate Boiling (DNB)] Limits,” Limiting Conditions for Operation
(LCO)3.4.1 and the associated Surveillance Requirements
(SRs)to replace the specific limit values of RCS pressurizer pressure, cold leg temperature, and RCS total flow rate with “the limits specified in the COLR.” • Change the Bases for LCO 3.4.1 to reflect that the DNB limits are specified in the COLR. • Change Section 5.6.3 of TS, “Core Operating Limits Report (COLR)” to include the NRC approved methodologies and requirements used to calculate the DNB limits. Generic Letter
(GL)88-16 titled “Removal of Cycle-Specific Parameter Limits from Technical Specifications” (Ref. 7.2) is the regulatory guidance for this change. 2.0 REGULATORY EVALUATION The Commission's regulatory requirements related to the content of Technical Specifications are specified in Title 10 CFR (Code of Federal Regulations), Section 50.36, “Technical Specifications.” 10 CFR 50.36(c)(2)(i) defines that limiting conditions for operation are the lowest functional capability or performance levels of equipment required for safe operation of the facility. For the DNB parameters, 10 CFR 50.36(c)(2)(ii)(B) Criterion 2 applies, which requires that TS LCOs be established for each process variable, design feature, or operating restriction that is an initial condition of a design basis accident or transient analysis that either assumes the failure of or presents a challenge to the integrity of a fission product barrier. LARs are required for each fuel cycle design that results in changes to parameter limits specified in TS. To meet 10 CFR 50.36(c)(2)(ii) requirements and alleviate the need for LARs to update parameter limits every fuel cycle, the NRC issued GL 88-16 with specific guidance for replacing the limit values for cycle-specific parameters in the TSs with references to an owner-controlled document, namely, the COLR. The guidance in GL 88-16 includes the following three actions: 1. The addition of the definition of a named formal report (i.e., Core Operating Limits Report) in TS that includes the values of cycle-specific parameter limits that have been established using an NRC-approved methodology and consistent with all applicable limits of the safety analyses. 2. The addition of an administrative reporting requirement (in TS 5.6.3) to submit the formal report on cycle-specific parameter limits to the Commission for information. 3. The modification of individual TS to note that the specific parameters shall be maintained within the limits provided in the defined formal report (COLR). The proposed change has been evaluated against GL 88-16 and found to be consistent with that regulatory guidance. 3.0 TECHNICAL EVALUATION TS LCO 3.4.1 specifies the limit values of the DNB parameters to assure that the pressurizer pressure, the RCS cold leg temperature, and RCS flow rate during operation at rated thermal power
(RTP)will be maintained within the limits assumed in the safety analyses in the final safety analysis report (FSAR). The safety analyses of anticipated operational occurrences
(AOOs)and accidents assume initial conditions within the envelope of normal steady state operation at the RTP to demonstrate that the applicable acceptance criteria, including the specified acceptable fuel design limits (such as DNB ratio) and RCS pressure boundary design conditions, are met for each event analyzed. The TS limits placed on the DNB-related parameters ensure that these parameters, when appropriate measurement uncertainties are applied, will be bounded by those assumed in the safety analyses, and thereby provide assurance that the applicable acceptance criteria will not be violated should a transient or accident occur while operating at the RTP. It is essential to safety that the plant is operated within the DNB parameter limits. This change retains the requirement to maintain the plant within the DNB parameter limits in LCO 3.4.1 along with the SR verification for each of the DNB parameters. As these parameter limits are calculated using NRC-approved methodologies and are consistent with all applicable limits of the plant safety analyses, this change does not affect nuclear safety. TS 5.6.3, “Core Operating Limits Report (COLR),” specifies that the core operating limits shall be determined such that all applicable limits of the safety analyses are met, and that the analytical methods used to determine the core operating limits shall be those previously reviewed and approved by the NRC. This change modifies the list of NRC approved methodologies in TS 5.6.3 to include those used to calculate the DNB limits on pressurizer pressure, RCS cold leg temperature, and RCS total flow rate. The limit values of these parameters in the COLR will comply with existing operating fuel cycle analysis requirements, and are initial conditions assumed in safety analyses. Replacing of the DNB parameter values with references to the COLR does not lessen the requirement for compliance with all applicable limits. Any revisions to the safety analyses that require prior NRC approval will be identified by the 10 CFR 50.59 review process. TS 5.6.3 also specifies that the COLR, including any midcycle revisions or supplements, shall be provided upon issuance for each reload cycle to the NRC. This will allow NRC staff to continue trending the information even though prior NRC approval of the changes to these limits will not be required. Section 50.36 requires LCOs to contain the lowest functional capability or performance levels of equipment for safe operation of the facility. The NRC staff finds that the proposed change to LCO 3.4.1 referencing the specific values of the DNB parameter limits in TS in the COLR continues to meet the regulatory requirement of 10 CFR 50.36(c)(2)(ii)(B) (Criterion 2), and follows the guidance described in GL 88-16. The NRC staff, therefore, concludes that this change is acceptable. For safety analyses of transients or accidents, various sections of Chapter 15 of the Standard Review Plan (Ref. 7.3) specify that the reactor is initially at the RTP plus uncertainty, and the RCS flow is at nominal design flow including the measurement uncertainty. If one or more DNB parameter limits change, and these changes do not support the RTP, a license amendment would be required to either reduce the RTP or limit the plant operation at a level below the RTP. 10 CFR 50 Appendix K requires that the loss of coolant accident analysis be performed at 102% of the RTP. Other plant-specific analyses can contain an initial condition to be performed at RTP. To insure a clear understanding of this requirement the following statement has been added to TS 5.6.3: “The maximum thermal power from the COLR shall be equal to or greater than the RTP defined in TS 1.1.” 4.0 STATE CONSULTATION In accordance with the Commission's regulations, the [________] State official was notified of the proposed issuance of the amendment. The State official had [(1) no comments or
(2)the following comments—with subsequent disposition by the staff]. 5.0 ENVIRONMENTAL CONSIDERATION The amendment[s] change[s] a requirement with respect to the installation or use of a facility component located within the restricted area as defined in 10 CFR Part 20 or surveillance requirements. The NRC staff has determined that the amendment involves no significant increase in the amounts, and no significant change in the types, of any effluents that may be released offsite, and that there is no significant increase in individual or cumulative occupational radiation exposure. The Commission has previously issued a proposed finding that the amendment involves no significant hazards consideration and there has been no public comment on such finding published [DATE] ([ ] FR [ ]). Accordingly, the amendment meets the eligibility criteria for categorical exclusion set forth in 10 CFR 51.22(c)(9). Pursuant to 10 CFR 51.22(b), no environmental impact statement or environmental assessment need be prepared in connection with the issuance of the amendment. 6.0 CONCLUSION The NRC staff has reviewed this proposed change to replace the values of the DNB parameters in TS with references to the COLR. This change will allow the licensee the flexibility to manage operating and core design margins associated with the DNB parameters without the need for cycle-specific LARs. Any future revisions to safety analyses that require prior NRC approval will be identified by the 10 CFR 50.59 review process. Based on this evaluation the NRC staff concludes that this change meets the regulatory requirements of 10 CFR 50.36, follows the guidance described in GL 88-16, and is acceptable. 7.0 REFERENCES 7.1 License Amendment Request dated [MMM, DD, YYYY], [Title of Amendment Request], ADAMS Accession No. [MLXXXXXXXXX]. 7.2 Generic Letter 88-16 dated October 4, 1988, “Removal of Cycle-Specific Parameter Limits from Technical Specifications,” ADAMS Accession No ML041830597. 7.3 NUREG-0800, “Standard Review Plan.” Proposed No Significant Hazards Consideration Determination *Description of Amendment Request:* [Plant name] requests adoption of an approved change to the standard technical specifications
(STS)for Combustion Engineering Pressurized Water Reactor
(PWR)Plants (NUREG-1432) and plant-specific technical specifications (TS), to allow replacing the departure from nucleate boiling
(DNB)parameter limits with references to the core operating limits report
(COLR)in accordance with Generic Letter 88-16, “Removal of Cycle Specific Parameter Limits from Technical Specifications,” dated October 4, 1988. The changes are consistent with NRC approved Industry/Technical Specification Task Force
(TSTF)Standard Technical Specification Change Traveler, TSTF-487. *Basis for proposed no-significant-hazards-consideration determination:* As required by 10 CFR 50.91(a), an analysis of the issue of no-significant-hazards-consideration is presented below: *Criterion 1:* Does the Proposed Change Involve a Significant Increase in the Probability or Consequences of an Accident Previously Evaluated? *Response:* No. The proposed amendment replaces the limit values of the reactor coolant system
(RCS)DNB parameters (i.e., pressurizer pressure, RCS cold leg temperature, and RCS flow rate) in TS with references to the COLR, in accordance with the guidance of Generic Letter 88-16, to allow these parameter limit values to be recalculated without a license amendment. The proposed amendment does not involve operation of any required structures, systems, or components
(SSCs)in a manner or configuration different from those previously recognized or evaluated. The cycle-specific values in the COLR must be calculated using the NRC-approved methodologies listed in TS 5.6.5, “Core Operating Limits Report (COLR).” Replacing the RCS DNB parameter limits in TS with references to the COLR will maintain existing operating fuel cycle analysis requirements. Because these parameter limits are determined using the NRC-approved methodologies, the acceptance criteria established for the safety analyses of various transients and accidents will continue to be met. Therefore, neither the probability nor consequences of any accident previously evaluated will be increased by the proposed change. Therefore, operation of the facility in accordance with the proposed amendment does not involve a significant increase in the probability or consequences of an accident previously evaluated. *Criterion 2:* Does the Proposed Change Create the Possibility of a New or Different Kind of Accident from any Previously Evaluated? *Response:* No. The proposed amendment to replace the RCS DNB parameter limits in TS with references to the COLR does not involve a physical alteration of the plant, nor a change or addition of a system function. The proposed amendment does not involve operation of any required SSCs in a manner or configuration different from those previously recognized or evaluated. No new failure mechanisms will be introduced by the proposed change. Therefore, the proposed amendment does not create the possibility of a new or different kind of accident from any accident previously evaluated. *Criterion 3:* Does the Proposed Change Involve a Significant Reduction in the Margin of Safety? *Response:* No. The proposed amendment to replace the RCS DNB parameter limits in TS with references to the COLR will continue to maintain the margin of safety. The DNB parameter limits specified in the COLR will be determined based on the safety analyses of transients and accidents, performed using the NRC-approved methodologies that show that, with appropriate measurement uncertainties of these parameters accounted for, the acceptance criteria for each of the analyzed transients are met. This provides the same margin of safety as the limit values currently specified in the TS. Any future revisions to the safety analyses that require prior NRC approval are identified per the 10 CFR 50.59 review process. Therefore, the proposed amendment would not involve a significant reduction in a margin of safety. Based on the staff's review of the licensee's analysis, the staff concludes that the proposed amendment presents no significant hazards consideration under the standards set forth in 10 CFR 50.92(c) and, accordingly, a finding of “no significant hazards consideration” is justified. [Lit. face SIG] Dated at Rockville, Maryland this ___ day of ___ , 2007. For The Nuclear Regulatory Commission. Project Manager Plant Licensing Branch [ ] Division of Operating Reactor Licensing Office of Nuclear Reactor Regulation [FR Doc. E7-4752 Filed 3-14-07; 8:45 am] BILLING CODE 7590-01-P PENSION BENEFIT GUARANTY CORPORATION Required Interest Rate Assumption for Determining Variable-Rate Premium for Single-Employer Plans; Interest Assumptions for Multiemployer Plan Valuations Following Mass Withdrawal AGENCY: Pension Benefit Guaranty Corporation. ACTION: Notice of interest rates and assumptions. SUMMARY: This notice informs the public of the interest rates and assumptions to be used under certain Pension Benefit Guaranty Corporation regulations. These rates and assumptions are published elsewhere (or can be derived from rates published elsewhere), but are collected and published in this notice for the convenience of the public. Interest rates are also published on the PBGC's Web site ( *http://www.pbgc.gov* ). DATES: The required interest rate for determining the variable-rate premium under part 4006 applies to premium payment years beginning in March 2007. The interest assumptions for performing multiemployer plan valuations following mass withdrawal under part 4281 apply to valuation dates occurring in April 2007. FOR FURTHER INFORMATION CONTACT: Catherine B. Klion, Manager, Regulatory and Policy Division, Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005, 202-326-4024. (TTY/TDD users may call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4024.) SUPPLEMENTARY INFORMATION: Variable-Rate Premiums Section 4006(a)(3)(E)(iii)(II) of the Employee Retirement Income Security Act of 1974 (ERISA) and § 4006.4(b)(1) of the PBGC's regulation on Premium Rates (29 CFR part 4006) prescribe use of an assumed interest rate (the “required interest rate”) in determining a single-employer plan's variable-rate premium. Pursuant to the Pension Protection Act of 2006, for premium payment years beginning in 2006 or 2007, the required interest rate is the “applicable percentage” of the annual rate of interest determined by the Secretary of the Treasury on amounts invested conservatively in long-term investment grade corporate bonds for the month preceding the beginning of the plan year for which premiums are being paid (the “premium payment year”). On February 2, 2007 (at 72 FR 4955), the Internal Revenue Service
(IRS)published final regulations containing updated mortality tables for determining current liability under section 412(l)(7) of the Code and section 302(d)(7) of ERISA for plan years beginning on or after January 1, 2007. As a result, in accordance with section 4006(a)(3)(E)(iii)(II) of ERISA, the “applicable percentage” to be used in determining the required interest rate for plan years beginning in 2007 is 100 percent. The required interest rate to be used in determining variable-rate premiums for premium payment years beginning in March 2007 is 5.85 percent (i.e., 100 percent of the 5.85 percent composite corporate bond rate for February 2007 as determined by the Treasury). The following table lists the required interest rates to be used in determining variable-rate premiums for premium payment years beginning between April 2006 and March 2007. For premium payment years beginning in: The required interest rate is: April 2006 5.01 May 2006 5.25 June 2006 5.35 July 2006 5.36 August 2006 5.36 September 2006 5.19 October 2006 5.06 November 2006 5.05 December 2006 4.90 January 2007 5.75 February 2007 5.89 March 2007 5.85 Multiemployer Plan Valuations Following Mass Withdrawal The PBGC's regulation on Duties of Plan Sponsor Following Mass Withdrawal (29 CFR part 4281) prescribes the use of interest assumptions under the PBGC's regulation on Allocation of Assets in Single-Employer Plans (29 CFR part 4044). The interest assumptions applicable to valuation dates in April 2007 under part 4044 are contained in an amendment to part 4044 published elsewhere in today's **Federal Register** . Tables showing the assumptions applicable to prior periods are codified in appendix B to 29 CFR part 4044. Issued in Washington, DC, on this 8th day of March 2007. Vincent K. Snowbarger, Interim Director, Pension Benefit Guaranty Corporation. [FR Doc. E7-4679 Filed 3-14-07; 8:45 am] BILLING CODE 7709-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. IC-27750; 812-13336] Vanguard Bond Index Funds, et al.; Notice of Application March 9, 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 exemptions from sections 2(a)(32), 18(f)(1), 18(i), 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 exemptions from sections 17(a)(1) and
(2)of the Act. Summary of Application: Applicants request an order that would permit the following:
(a)An open-end management investment company, the series of which consist of the component securities of certain fixed income securities indices, to issue a class of shares (“ETF Shares”) that can be purchased from the investment company and redeemed only in large aggregations (“Creation Units”);
(b)secondary market transactions in ETF Shares to occur at negotiated prices on a national securities exchange, as defined in section 2(a)(26) of the Act (“Exchange”);
(c)dealers to sell ETF Shares to purchasers in the secondary market unaccompanied by a prospectus when prospectus delivery is not required by the Securities Act of 1933 (“Securities Act”); and
(d)certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of Creation Units. Applicants: Vanguard Bond Index Funds (“Trust”), The Vanguard Group, Inc. (“VGI”), and Vanguard Marketing Corporation (“VMC”). Filing Dates: The application was filed on October 25, 2006 and amended on January 23, 2007. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected in the notice. Hearing or Notification of Hearing: An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the 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 30, 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, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. Applicants, c/o Barry A. Mendelson, The Vanguard Group, Inc., P.O. Box 2600, Valley Forge, PA 19482. FOR FURTHER INFORMATION CONTACT: Keith A. Gregory, Senior Counsel at
(202)551-6815, or Michael W. Mundt, Senior Special Counsel, at
(202)551-6821 (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, telephone
(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 currently has four series (“Existing Funds”). Each Existing Fund currently offers separate classes of shares for retail and institutional investors (such classes of shares collectively, “Conventional Shares”). In the future, the Trust or another registered open-end management investment company may offer other series (“Future Funds,” and together with Existing Funds, “Funds”). Any Future Fund will:
(a)Be advised by VGI or an entity controlled by or under common control with VGI and
(b)comply with the terms and conditions of any order granted pursuant to the application. 2. VGI is a Pennsylvania corporation that is wholly and jointly owned by 35 investment companies and the series of those investment companies (each series, a “Vanguard Fund” and collectively, the “Vanguard Fund Complex”). VGI is registered as an investment adviser under the Investment Advisers Act of 1940 and as a transfer agent under the Securities Exchange Act of 1934 (“Exchange Act”). VGI provides each Vanguard Fund with corporate management, administrative, and transfer agency services at cost. VGI also provides advisory services at cost to certain Vanguard Funds, including each of the Existing Funds. VMC, a wholly owned subsidiary of VGI, is registered as a broker-dealer under the Exchange Act. VMC provides all distribution and marketing services to the Vanguard Funds, including each of the Existing Funds. 3. Each Existing Fund seeks to track as closely as possible the performance of a different index that measures the performance of the bond market as a whole or a discrete segment of the bond market (the “Target Indexes”). 1 The bond holdings of each Existing Fund are selected through a sampling process and at least 80% (and in most cases more than 90%) of an Existing Fund's assets will be invested in bonds included in the Existing Fund's Target Index. 2 The remainder is typically invested in bonds that are not included in the Existing Fund's Target Index, cash and cash equivalents, futures, and swap contracts. Unlike the other three Existing Funds, the Vanguard Total Bond Market Index Fund (“Total Bond Market Index Fund”) holds government mortgage-backed securities (“MBS”), asset backed securities (“ABS”), and commercial mortgage-backed securities (“CMBS”). 3 The Total Bond Market Index Fund seeks to track that portion of the Lehman Agg. Index devoted to MBS by investing a corresponding percentage of its assets either in MBS included in the index or in “to-be-announced” (“TBA”) transactions on MBS. 4 1 The Target Indexes are Lehman Brothers Aggregate Bond Index “Lehman Agg. Index”), Lehman Brothers 1-5 Year Government/Credit Index, Lehman Brothers 5-10 Year Government/Credit Index and Lehman Brothers Long Government/Credit Index. 2 Each Fund invests in a representative sample of bonds from its Target Index that will resemble the full index in terms of characteristics such as maturity, credit quality, issuer type and yield. 3 The Total Bond Market Index Fund will hold MBS, ABS, and CMBS in approxiamtely the same percentages as those securities are represented in the Lehman Agg. Index. ABS and CMBS will not be among the Deposit Securities required to purchase a Creation Unit or among the Redemption Securities an investor will receive when redeeming a Creation Unit. 4 A “TBA transaction” is essentially a purchase or sale of an MBS for future settlement at an agreed-upon date. Applicants state that most MBS trades are executed as TBA transactions. Applicants state that TBA transactions increase the liquidity and pricing efficiency of transactions in MBS because they permit similar MBS to be traded interchangeably pursuant to commonly observed settlement and delivery requirements. 4. Applicants state that, historically, the difference between the performance of an Existing Fund and the performance of its Target Index has rarely exceeded one percentage point and in almost all cases has been significantly less than one percentage point. Applicants expect that, in the future, both the Existing Funds and Future Funds will track their Target Indexes with the same degree of precision, and will have a tracking error of less than 5% per annum. No entity that creates, compiles, sponsors, or maintains a Target Index is or will be an affiliated person, as defined in section 2(a)(3) of the Act, or an affiliated person of an affiliated person, of the Funds, VGI, any adviser to or promoter of a Fund, or VMC. 5. Each Fund proposes to create ETF Shares, a class of shares that would be listed on an Exchange and trade in the secondary market at negotiated prices. Applicants submit that the availability of ETF Shares would satisfy market demand for investment company securities which would provide intra-day liquidity and low cost exposure to an index of bonds. Applicants state that, by creating an exchange-traded class of shares, the Funds will offer short-term investors an attractive means of investing in the Funds. 5 Applicants state that offering ETF Shares will benefit the Funds by reducing the portfolio disruption and transaction costs caused by short-term investors. 5 Applicants expect ETF Shares to appeal to short-term investors because they can be bought and sold continuously throughout the day at market price rather than at net asset value (“NAV”), which is calculated only once per day at the close of trading on the New York Stock Exchange (“NYSE”). Transactions in Conventional Shares will continue to be priced at NAV. 6. The Funds will issue ETF Shares only in Creation Units, aggregations of a specified number of shares ranging from 50,000 to 100,000 shares. The price of a Creation Unit will range from $1,500,000 to $10,000,000. Orders to purchase Creation Units must be placed with VMC by or through an “Authorized Participant,” which is a Depository Trust Company (“DTC”) participant that has executed a participant agreement with VMC. Creation Units will be issued in exchange for an in-kind deposit of securities and cash (“Creation Deposit”). 6 The Creation Deposit will consist of a basket of approximately 50 to 100 fixed income securities selected by VGI (“Deposit Securities”) 7 and a cash payment to equalize any difference between the total aggregate market value of the Deposit Securities and the NAV per Creation Unit of the Fund (“Purchase Balancing Amount”). 8 An investor purchasing a Creation Unit from a Fund will be charged a fee (“Transaction Fee”) to prevent any dilution of the interests of remaining shareholders due to the Fund incurring costs in connection with the investor's purchase of the Creation Unit(s). 9 Each purchaser of a Creation Unit will receive a prospectus for the ETF Shares (the “ETF Prospectus”) that discloses the maximum Transaction Fee, and the method of calculating Transaction Fees will be disclosed in the Fund's Statement of Additional Information (“SAI”). A Fund's Conventional Shares will be covered by a separate prospectus (the “Conventional Prospectus”). 6 On each business day, prior to the opening of trading on the Exchange, VGI will make available through the National Securities Clearing Corporation (“NSCC”) (or through some other party if NSCC is unwilling or unable to perform this function) the list of the names and the required amount of each Deposit Security to be included in the Creation Deposit for each Fund. Each Fund reserves the right to permit or require the purchaser of a Creation Unit to substitute cash or a different security to replace a Deposit Security under certain circumstances. 7 Applicants state that it would be impractical to ask an Authorized Participant to assemble a basket of several hundred or several thousand bonds that replicate the portfolio of a Fund. Accordingly, VGI will select a subset of the Fund's portfolio using a representative sampling strategy. 8 The Funds must comply with the federal securities laws in accepting Deposit Securities and satisfying redemptions with Redemption Securities (as defined below), including that the Deposit Securities and Redemption Securities are sold in transactions that would be exempt from registration under the Securities Act. If at any time in the future the Funds accept Deposit Securities or satisfy redemptions with Redemption Securities that are restricted securities eligible for resale pursuant to rule 144A under the Securities Act, the Funds will comply with the conditions of rule 144A, including in satisfying redemptions with such rule 144A eligible restricted Redemption Securities. The prospectus for the Funds will state that “An Authorized Participant that is not a ‘qualified institutional buyer’ as defined in rule 144A under the Securities Act of 1933 will not be able to receive, as part of the redemption basket, restricted securities eligible for resale under rule 144A.” 9 When a Fund permits an investor to substitute cash for a Deposit Security, the investor may be assessed a higher Transaction Fee to offset the increased cost to the Fund of buying the necessary Deposit Security for its portfolio. 7. The Funds will accept purchase orders only on days that the NYSE is open for business. Purchase orders must be received by VMC prior to the closing time of the regular trading session of the NYSE. VMC will transmit all purchase orders to the Funds, maintain a record of each Creation Unit purchaser, and send out an ETF Prospectus and confirmation to such purchasers. 8. The purchaser of a Creation Unit will be able to separate the Creation Unit into individual ETF Shares. 10 ETF Shares will be listed on an Exchange and traded in the secondary market in the same manner as shares of other exchange-traded funds. One or more Exchange specialists (“Specialists”) will be assigned to make a market in the ETF Shares. The price of ETF Shares traded on an Exchange will be based on a current bid/offer market, and each ETF Share is expected to have an initial market value of between $30 and $100. Transactions involving the sale of ETF Shares in the secondary market will be subject to customary brokerage commissions and charges. 10 Applicants state that persons purchasing Creation Units will be cautioned in the ETF Prospectus that some activities on their part may, depending on the circumstances, result in their being deemed a statutory underwriter and subject them to the prospectus delivery and liability provisions of the Securities Act. For example, a broker-dealer firm and/or its client may be deemed a statutory underwriter if it purchases Creation Units from a Fund, breaks them down into the constituent ETF Shares, and sells ETF Shares directly to its customers, or if it chooses to couple the purchase of a supply of new ETF Shares with an active selling effort involving solicitation of secondary market demand for ETF Shares. The ETF Prospectus will state that whether a person is an underwriter depends on all the facts and circumstances pertaining to that person's activities. The ETF Prospectus also will state that broker-dealer firms should note that dealers who are not “underwriters” but are participating in a distribution (as contrasted to an ordinary secondary trading transaction), and thus dealing with ETF 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. 9. Applicants expect that purchasers of Creation Units will include institutional investors and arbitrageurs. A Specialist, in providing for a fair and orderly secondary market for ETF Shares, also may purchase Creation Units for use in its market making activities on the Exchange. Applicants expect that secondary market purchasers of ETF Shares will include both institutional and retail investors. 11 Applicants believe that arbitrageurs will purchase or redeem Creation Units to take advantage of discrepancies between the ETF Shares' market price and the ETF Shares' NAV. Applicants expect that this arbitrage activity will provide a market discipline that will result in a close correspondence between the price at which the ETF Shares trade and their NAV. Applicants do not expect ETF Shares to trade at a significant premium or discount to their NAV. 12 11 ETF Shares will be registered in book-entry form only. DTC or its nominee will be the registered owner of all outstanding ETF Shares. Records reflecting the beneficial owners of ETF Shares will be maintained by DTC or its participants. 12 Every 15 seconds throughout the trading day, the Exchange will disseminate via the facilities of the Consolidated Tape Association the market value of an ETF Share and, separate from the consolidated tape, the Exchange or another information provider will disseminate a calculation of the approximate NAV of an ETF Share. Applicants state that an investor comparing the two figures will be able to determine whether, and to what extent, ETF Shares are selling at a premium or discount to NAV. 10. Applicants will make available an ETF Shares product description (“Product Description”) for distribution in accordance with an Exchange rule requiring Exchange members and member organizations effecting transactions in ETF Shares to deliver a Product Description to investors purchasing ETF Shares, whether on or away from the Exchange. Applicants state that any other Exchange that applies for unlisted trading privileges in ETF Shares will have to adopt a similar rule, requiring delivery of the Product Description. The Product Description will provide a plain English overview of a Fund, including its investment objective and investment strategies, the identity of VGI, the material risks of investing in the Fund, and the frequency of dividends and capital gains distributions. The Product Description also will provide a brief, plain English description of the salient features of ETF Shares. The Product Description will advise investors that an ETF Prospectus and SAI may be obtained, without charge, from the investor's broker or from VMC. The Product Description also will identify a Web site address where investors can obtain information about the composition and compilation methodology of the Target Index. Applicants expect that the number of purchases of ETF Shares in which an investor will not receive a Product Description will not constitute a significant portion of the market activity in ETF Shares. 11. Except in connection with the liquidation of a Fund (or of a Fund's ETF Share class), ETF Shares will only be redeemable in Creation Units through each Fund. An investor redeeming a Creation Unit generally will receive
(a)A basket of securities (“Redemption Securities”), which in most cases will be the same as the Deposit Securities required of investors purchasing Creation Units on the same day, and
(b)a cash amount equal to the difference in the value of the Redemption Securities and the NAV of a Creation Unit, which in most cases will be the same as the Purchase Balancing Amount paid (or received) by investors purchasing Creation Units on the same day. A Fund may make redemptions partly in cash in lieu of transferring one or more Redemption Securities to a redeeming investor, if the Fund determines that such alternative is warranted. A Fund may make such a determination if, for example, a redeeming investor is unable, by law or policy, from owning a particular Redemption Security. In order to cover the Fund's transaction costs, redeeming investors will pay a Transaction Fee. 13 13 Investors who redeem for cash, rather than in kind, may pay a higher Transaction Fee. Applicants' Legal Analysis 1. Applicants request an order under section 6(c) of the Act for exemptions from sections 2(a)(32), 18(f)(1), 18(i), 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 exemptions from sections 17(a)(1) and
(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 or classes of persons, securities, or transactions, from any provision or provisions of the Act, or any rule or regulation thereunder, 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. Section 2(a)(32) of the Act 3. Section 2(a)(32) of the Act defines “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. Applicants request an order under section 6(c) to permit ETF Shares to be redeemed in Creation Units only. Applicants note that because of the arbitrage possibilities created by the redeemability of Creation Units, it is expected that the market price of an ETF Share will not vary much from its NAV. Section 18(f)(1) and 18(i) of the Act 4. Section 18(f)(1) of the Act, in relevant part, prohibits a registered open-end company from issuing any class of “senior security,” which is defined in section 18(g) to include any stock of a class having a priority over any other class as to the distribution of assets or payment of dividends. Section 18(i) of the Act requires that every share of stock issued by a registered management company be voting stock, with the same voting rights as every other outstanding voting stock. Rule 18f-3 permits an open-end fund to issue multiple classes of shares representing interests in the same portfolio without seeking exemptive relief from section 18(f)(1) and 18(i), provided that the fund complies with certain requirements. Applicants state that they will comply in all respects with rule 18f-3, except the requirements that
(a)Each class have the same rights and obligations as each other class (other than the differences allowed by the rule), and
(b)if a class has a different distribution arrangement, the class must pay all of the expenses of the arrangement. Because applicants, therefore, may not rely on rule 18f-3, they request an exemption under section 6(c) from sections 18(f)(1) and 18(i). 5. Applicants state that there are four ways in which the Conventional Shares and ETF Shares of each Fund will have different rights:
(a)Conventional Shares are individually redeemable, while ETF Shares will be redeemable in Creation Units only;
(b)ETF Shares will be traded on an Exchange, while Conventional Shares will not;
(c)Conventional Shares declare dividends daily, while ETF Shares will declare dividends monthly; and
(d)although all shares classes of a Fund will pay dividends monthly, the payment date for the Conventional Shares will be the same as the ex dividend date (“ex date”), while the payment date for the ETF Share will be four days or more after the ex date. Applicants assert that different trading and redemption rights are necessary if their proposal is to have the desired benefits. Applicants note that a Fund's ETF Shares will be tradable on an Exchange and redeemable only in large aggregations in order to encourage short-term investors to conduct their trading activities in a way that does not disrupt the management of the Fund's portfolio. Applicants assert that there is no reason to make Conventional Shares tradable and that it would be counterproductive to facilitate the ability of market timers to disrupt a Fund by making ETF Shares individually redeemable. 6. Applicants state the proposal to declare dividends to the ETF Share class on a monthly basis, as opposed to on a daily basis for the Conventional Share class, will result in a higher net asset value (“NAV”) for the ETF Share class during a monthly period due to the presence of accrued but undistributed income. 14 Applicants submit that absent adjustment, this difference would result in a disproportionate allocation of a fund's income, realized capital gains and losses, and unrealized appreciation and depreciation (“Allocable Items”) to the ETF Shares relative to the Conventional Shares because such items are allocated among a fund's classes based upon relative net assets. Applicants intend to eliminate this potential inequality by allocating the Allocable Items on the basis of class-level net assets adjusted to factor out the differences introduced by the application of the different dividend policies (“Asset Adjustment”). Applicants submit that the use of the Asset Adjustment will ensure that the daily allocation of Allocable Items to ETF Shares and Conventional Shares is not distorted by the classes' differing dividend policies. 15 Applicants state that it is industry practice for bond ETFs to declare dividends monthly. 14 When dividends are declared monthly, as opposed to daily, each day's accrued income is reflected as an increase in the shares' NAV. At the end of the month, when dividends are declared, the NAV drops by the amount of the dividend. By contrast, when dividends are declared daily, the amount of the daily income accrual is offset by a corresponding distribution payable liability. As a result, the net effect on the shares' NAV typically is zero. 15 Applicants will not rely on the requested order until the board of trustees (“Board”) of each Fund has formally determined that, after applying the Asset Adjustment, the annualized rates of return of the ETF and Conventional Share classes generally will differ only by the expense differentials among the classes, as required by rule 18f-3(c)(1)(v) under the Act. 7. Applicants state that the accrual of dividends in the NAV of the ETF Shares but not the Conventional Shares will have an effect on the voting power of the respective classes because the shareholders of the Funds are given voting rights proportionate to the NAV of their shares. Applicants assert that such effects on voting power will be minor and that this treatment of voting rights meets the standards of section 18(i) because every share issued by the Funds will have equal voting rights in that each share will be entitled to one vote per dollar of NAV and a fractional vote per fractional dollar of NAV. 8. Applicants state that although Conventional Shares and ETF Shares both pay dividends monthly, another difference between the classes is that the holders of Conventional Shares are able to reinvest dividends immediately when paid, while the ETF Shareholders would have to wait a few days to receive their payments through their brokers. As a result, holders of Conventional Shares of the Funds who reinvest will be continuously invested, while ETF Shareholders who reinvest will be “out of the market” for four days with respect to the amount of the dividend. 16 Applicants state that the four day difference will affect the relative performance of the classes because during the time the dividend is out of the market, ETF Shareholders will not receive income or experience appreciation or depreciation on the amount of the dividend. Applicants do not expect this economic difference to be significant. 16 Applicants assert that the delay between the ex date and the payment/reinvestment date occurs for all ETFs, whether they are stand-alone ETFs or part of a multi-class structure, and regardless of whether an ETF Shareholder elects to reinvest dividends. 9. Applicants assert that the different rights do not implicate the concerns underlying section 18 of the Act, including excessive leverage, conflicts of interest and investor confusion. With respect to the potential for investor confusion, applicants will take a variety of steps to ensure that investors understand the key differences between Conventional Shares and ETF Shares. Applicants state that the ETF Shares will not be marketed as a mutual fund investment. Marketing materials may refer to ETF Shares as an interest in an investment company or fund, but will not make reference to an “open-end fund” or “mutual fund,” except to compare or contrast the ETF Shares with the shares of a conventional open-end management investment company. Any marketing or advertising materials addressed primarily to prospective investors will emphasize that
(a)ETF Shares are not redeemable from a Fund other than in Creation Units,
(b)ETF Shares, other than in Creation Units, may be sold only through a broker, and the shareholder may have to pay brokerage commissions in connection with the sale, and
(c)a selling shareholder may receive less than NAV in connection with the sale of ETF Shares. The same type of disclosure will be provided in the Conventional Prospectus, ETF Prospectus, Product Description, SAI, and any document addressed primarily to prospective investors. The prospectus for the Fund's Conventional Shares will disclose that dividends are declared daily and paid monthly. The prospectus and Product Description for the ETF Shares will disclose that dividends are declared monthly and paid monthly and that the reinvestment of dividends (if elected), will not occur until approximately four days after the ex date. The applicants also note that
(a)All references to a Fund's exchange-traded class of shares will use a form of the name “ETF Shares” rather than the Fund name,
(b)the cover and summary page of the ETF Prospectus will state that the ETF Shares are listed on an Exchange and are not individually redeemable,
(c)VMC will only market Conventional Shares and ETF Shares in the same advertisement or marketing material when the advertisement or marketing material contains appropriate disclosure explaining the relevant features of each class of shares and highlighting the differences between the share classes, and
(d)applicants have prepared educational materials describing the ETF Shares. 10. Applicants currently allocate distribution expenses among funds in the Vanguard Fund Complex according to a cost-sharing formula approved by the Commission in 1981 as part of an order allowing the Vanguard Fund Complex to internalize its distribution services (“1981 Order”). 17 For those funds in the Vanguard Fund Complex offering multiple classes of shares, applicants apply the formula in the 1981 Order by treating each class as a separate fund (“Multi-Class Distribution Formula”). 17 Investment Company Act Release No. 11645 (Feb. 25, 1981) (Opinion of the Commission and Final Order). Under the formula, each Vanguard Fund's contribution is based 50% on its average month-end net assets during the preceding quarter relative to the average month-end net assets of the other Vanguard Funds, and 50% on its sales of new shares relative to the sales of new shares of the other Vanguard Funds during the preceding 24 months. So that a new fund is not unduly burdened, the formula caps each Vanguard Fund's contribution at 125% of the average expenses of the Vanguard Funds collectively, with any amounts above the cap redistributed among the other Vanguard Funds. In addition, no fund may pay more than 0.2% of its average month-end net assets for distribution. 11. Applicants propose to apply the Multi-Class Distribution Formula to each Fund's class of ETF Shares. Applicants acknowledge that, because ETF Shares may have a distribution arrangement that differs from that for Conventional Shares, the proposed allocation method is inconsistent with rule 18f-3. Applicants contend, however, that the Multi-Class Distribution Formula is a fundamental feature of Vanguard's unique, internally-managed structure, and that the proposed allocation method is consistent with the method approved by the Commission in the 1981 Order. The Multi-Class Distribution Formula has been approved by the Board of each Fund, and the Board of each Fund, including a majority of the trustees who are not interested persons, as defined in section 2(a)(19) of the Act (“Disinterested Trustees”), will review the application of the Multi-Class Distribution Formula on an annual basis and determine that the proposed allocation is in the best interests of each class of shareholders and of the Fund as a whole. Section 22(d) of the Act and Rule 22c-1 Under the Act 12. Section 22(d), among other things, prohibits a dealer from selling a redeemable security that is currently being offered to the public by or through an underwriter, except at a current public offering price described in the prospectus. Rule 22c-1 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 ETF Shares will take place at negotiated prices, not at a current offering price described in the ETF Prospectus, and not at a price based on NAV. Thus, purchases and sales of ETF Shares in the secondary market will not comply with section 22(d) and rule 22c-1. Accordingly, applicants request exemptions from these provisions under section 6(c) of the Act. 13. Applicants assert that the sale of ETF Shares at negotiated prices does not present the opportunity for any of the abuses that section 22(d) and rule 22c-1 were designed to prevent. 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 designed 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 resulting from sales at different prices, and
(c)ensure an orderly distribution of investment company 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. Applicants state that secondary market trading in ETF Shares would not cause dilution for existing Fund shareholders because such transactions would not directly or indirectly affect the Fund's assets. Applicants further state that secondary market trading in ETF Shares would not lead to discrimination or preferential treatment among purchasers because, to the extent that different prices exist during a given trading day or from day to day, these variances will occur as a result of market forces. Finally, applicants contend that the proposed distribution system will be orderly because, among other things, arbitrage activity will ensure that the difference between the market price of ETF Shares and their NAV remains narrow. Section 24(d) of the Act 14. Section 24(d) 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 transactions in a redeemable security issued by an open-end investment company. Applicants request an exemption under section 6(c) of the Act from section 24(d) to permit dealers selling ETF Shares to rely on the prospectus delivery exemption provided by section 4(3) of the Securities Act. 18 18 Applicants do not seek relief from the prospectus delivery requirement for non-secondary market transactions, including purchases of Creation Units or those involving an underwriter. 15. Applicants state that ETF Shares will be listed on an Exchange and will be traded in a manner similar to other equity securities, including the shares of closed-end investment companies. Applicants note that dealers selling shares of closed-end investment companies in the secondary market generally are not required to deliver a prospectus to the purchaser. Applicants contend that ETF Shares, as a listed security, merit similar treatment, reducing compliance costs and regulatory burdens that result from the imposition of a prospectus delivery requirement on secondary market transactions. Applicants state that because ETF Shares will be exchange-listed, prospective investors will have access to several types of market information about the ETF Shares. Applicants state that information regarding market price and volume will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services. The previous day's price and volume information also will be published daily in the financial section of newspapers. 16. Applicants further state that investors that purchase ETF Shares in the secondary market will receive a Product Description, describing the Fund and its ETF Shares. Applicants state that, while not intended as a substitute for a prospectus, the Product Description will contain information about ETF Shares that is tailored to meet the needs of investors purchasing ETF Shares in the secondary market. Sections 17(a)(1) and
(2)of the Act 17. Sections 17(a)(1) and
(2)generally prohibit an affiliated person of a registered investment company, or an affiliated person of an affiliated person, acting as principal, from selling any security to, or purchasing any security from, the company. Sections 2(a)(3)(A) and
(C)of the Act define “affiliated person,” respectively, as any person who owns 5% or more of an issuer's outstanding voting securities and any person who controls the fund. 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 a large institutional investor or the Specialist could own 5% or more, or more than 25%, of a Fund's outstanding voting securities and, as a result, be deemed to be an affiliated person of the Fund under section 2(a)(3)(A) or (C). Applicants further state that, because purchases and redemptions of Creation Units would be in-kind, rather than for cash, those investors would be precluded by sections 17(a)(1) and
(2)from purchasing or redeeming Creation Units from the Fund. Accordingly, applicants request an exemption under sections 6(c) and 17(b) of the Act to permit these affiliated persons, and affiliated persons of such affiliated persons who are not otherwise affiliated with the Fund, to purchase and redeem Creation Units through in-kind transactions. 18. Section 17(b) of the Act authorizes the Commission to exempt a proposed transaction from section 17(a) 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, and the proposed transaction is consistent with the policies of the registered investment company involved and the general purposes of the Act. Applicants contend that no useful purpose would be served by prohibiting persons affiliated with a Fund, as described above, from purchasing or redeeming Creation Units from the Fund. Applicants represent that Fund affiliates making in-kind purchases and redemptions would be treated no differently from non-affiliates making the same types of transactions. Applicants state that all purchases and redemptions of Creation Units would be at the Fund's next calculated NAV. Applicants also state that, in all cases, Deposit Securities and Redemption Securities will be valued in the same manner and using the same standards as those securities are valued for purposes of calculating the Fund's NAV. Applicants assert that, for these reasons, the requested relief meets the standards of sections 6(c) and 17(b). Applicants' Conditions Applicants agree that the order granting the requested relief will be subject to the following conditions: 1. The ETF Shares Prospectus and the Product Description for each Fund will clearly disclose that, for purposes of the Act, ETF Shares are issued by the Fund and the acquisition of ETF 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 Fund beyond the limits of section 12(d)(1), subject to certain terms and conditions. 2. As long as a Fund operates in reliance on the requested order, the ETF Shares will be listed on an Exchange. 3. The ETF Shares of a Fund will not be advertised or marketed as shares of an open-end investment company or mutual fund. The ETF Shares Prospectus of each Fund will prominently disclose that ETF Shares are not individually redeemable and will disclose that holders of ETF Shares may acquire the shares from the Fund and tender the shares for redemption to the Fund in Creation Unit aggregations only. Any advertising material that describes the purchase or sale of Creation Units or refers to redeemability will prominently disclose that ETF Shares are not individually redeemable and that holders of ETF Shares may acquire the shares from the Fund and tender the shares for redemption to the Fund in Creation Unit aggregations only. 4. Before a Fund may rely on the order, the Commission will have approved, pursuant to rule 19b-4 under the Exchange Act, an Exchange rule requiring Exchange members and member organizations effecting transactions in ETF Shares to deliver a Product Description to purchasers of ETF Shares. 5. On an annual basis the Board of each Fund, including a majority of Disinterested Trustees, must determine, for each Fund, that the allocation of distribution expenses among the classes of Conventional Shares and ETF Shares in accordance with the Multi-Class Distribution Formula is in the best interests of each class and of the Fund as a whole. Each Fund will preserve for a period of not less than six years from the date of a Board determination, the first two years in an easily accessible place, a record of the determination and the basis and information upon which the determination was made. This record will be subject to examination by the Commission and its staff. 6. Applicants' Web site, which is and will be publicly accessible at no charge, will contain the following information, on a per ETF Share basis, for each Fund:
(a)The prior business day's closing NAV and the midpoint of the bid-asked spread at the time the Fund's NAV is calculated (“Bid-Asked Price”) and a calculation of the premium or discount of the Bid-Asked Price in relation to the closing NAV; and
(b)data for a period covering at least the four previous calendar quarters (or the life of a Fund, if shorter) indicating how frequently each Fund's ETF Shares traded at a premium or discount to NAV based on the Bid-Asked Price and closing NAV, and the magnitude of such premiums and discounts. In addition, the Product Description for each Fund will state that applicants' Web site has information about the premiums and discounts at which the Fund's ETF Shares have traded. 7. The ETF Shares Prospectus and annual report will include, for each Fund:
(a)The information listed in condition 6(b),
(i)In the case of the ETF Shares Prospectus, for the most recently completed calendar year (and the most recently completed quarter or quarters, as applicable), and
(ii)in the case of the annual report, for no less than the immediately preceding five fiscal years (or the life of the Fund, if shorter); and
(b)the cumulative total return and the average annual total return for one, five and ten year periods (or the life of the Fund, if shorter) of
(i)an ETF Share based on NAV and the Bid-Asked Price and
(ii)the Fund's Target Index. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Florence E. Harmon, Deputy Secretary. [FR Doc. E7-4721 Filed 3-14-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55437; File No. SR-Amex-2006-118] Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing of Amendment Nos. 2 and 3 to Proposed Rule Change Relating to Generic Listing Standards for Series of Portfolio Depositary Receipts and Index Fund Shares Based on Fixed Income Indexes and Accelerated Approval of Proposed Rule Change as Amended March 9, 2007. I. Introduction On December 22, 2006, the American Stock Exchange LLC (“Amex” 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 relating to generic listing standards for series of portfolio depositary receipts (“PDRs”) and index fund shares (“IFSs”), together referred to as “exchange-traded funds” (“ETFs”), based on fixed income indexes. On January 26, 2007, the Exchange filed Amendment No. 1. The proposed rule change, as amended, was published for comment in the **Federal Register** on February 7, 2007 for a 15-day comment period. 3 The Commission received no comments on the proposal. On March 2, 2007, Amex filed Amendment No. 2 to the proposed rule change 4 and on March 7, 2007, Amex filed Amendment No. 3 to the proposed rule change. 5 This order provides notice of the proposed rule change as modified by Amendments No. 1, 2, and 3 and approves the proposed rule change as amended on an accelerated basis. 1 15 U.S.C. 78s(b)(l). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 55213 (January 31, 2007), 72 FR 5768 (“Notice”). 4 In Amendment No. 2, the Exchange
(1)Updated its proposal to reflect the migration of ETF shares from Amex's legacy platform to the AEMI platform and
(2)represented that an ETF based on a fixed income index or combination index would be covered under the Exchange's existing surveillance program for ETFs and that all products listed under the proposed generic listing standards would be subject to the full panoply of Amex rules and procedures that now govern the trading of ETFs on Amex. 5 In Amendment No. 3, the Exchange revised proposed Commentary .06(g) to Rule 1000-AEMI and proposed Commentary .05(g) to Rule 1000A-AEMI to clarify that Rule 1000-AEMI and Rules 1001 through 1006 as well as Rule 1000A-AEMI and Rules 1001A through 1005A apply to the listing and trading of fixed income and combination index ETFs. II. Description of the Proposal The Exchange proposes to revise Amex Rules 1000-AEMI and 1000A-AEMI to include generic listing standards to permit the listing and trading of ETFs that are based on indexes or portfolios consisting of fixed income securities (“Fixed Income Indexes”) or both fixed income and equity securities (“Combination Indexes”) pursuant to Rule 19b-4(e) under the Act. 6 Specifically, the Exchange proposes to add Commentaries .04, .05, and .06 to Amex Rule 1000-AEMI and Commentaries .03, .04, and .05 to Amex Rule 1000A-AEMI and to revise the definitions of PDR and IFS, in Amex Rules 1000-AEMI(b)(1) and 1000A-AEMI(b)(1), respectively, to include ETFs based on Fixed Income Indexes and Combination Indexes. 6 17 CFR 240.19b-4(e). The proposed rule change will enable the Exchange to list and trade an ETF pursuant to Rule 19b-4(e) under the Act without a rule filing if each of the conditions set forth in either Commentaries .04 and .05 to Rule 1000-AEMI or Commentaries .03 and .04 to Rule 1000A-AEMI, as applicable, is satisfied. The proposed listing standards will apply to certain Fixed Income Indexes and Combination Indexes that the Commission has yet to review, as well as those Fixed Income Indexes described in exchange rules that have previously been approved by the Commission under Section 19(b)(2) of the Act 7 for the trading of ETFs, options, or other index-based securities. 8 7 15 U.S.C. 78s(b)(2). 8 *See* proposed Commentary .04 to Amex Rule 1000-AEMI and Commentary .03 to Amex Rule 1000A-AEMI (permitting the Exchange to list and trade an ETF pursuant to Rule 19b-4(e) provided that the portfolio or index “has been reviewed and approved for the trading of options, Portfolio Depository Receipts, Index Fund Shares, Index-Linked Exchangeable Notes or Index-Linked Securities by the Commission under Section 19(b)(2) of the Securities Exchange Act of 1934 and rules thereunder and the conditions set forth in the Commission's approval order, continue to be satisfied. * * *”). A. Generic Listing Standards Rule 19b-4(e) under the Act provides that the listing and trading of a new derivative securities product by a self- regulatory organization shall not be deemed a proposed rule change, pursuant to paragraph (c)(1) of Rule 19b-4, 9 if the Commission has approved, pursuant to Section 19(b) of the Act, 10 the self-regulatory organization's trading rules, procedures, and listing standards for the product class that would include the new derivatives securities product, and the self-regulatory organization has a surveillance program for the product class. 11 9 17 CFR 240.19b-4(c)(1). 10 15 U.S.C. 78s(b). 11 *See* Securities Exchange Act Release No. 40761 (December 8, 1998), 63 FR 70952 (December 22, 1998) (“New Products Release”). The Exchange already has Commission-approved generic listing standards for ETFs based on indexes that consist of stocks listed on U.S. and non-U.S. exchanges, 12 for trust certificates linked to certain Fixed Income Securities, 13 and for other index-based derivatives. 14 The Commission has also approved for listing and trading on the Exchange ETFs based on certain Fixed Income Indexes 15 and structured notes linked to a basket or index of Fixed Income Securities. 16 This proposal seeks to adopt listing standards, trading rules, and procedures, including surveillance, for ETFs based on Fixed Income and Combination Indexes that generally reflect existing generic listing standards for ETFs based on equities, but are tailored for the fixed income markets. 17 12 *See* Securities Exchange Act Release Nos. 54739 (November 9, 2006), 71 FR 66993 (November 17, 2006) (for ETFs based on global and international indexes); and 42787 (May 15, 2000), 65 FR 33598 (May 24, 2000) (for ETFs based on indexes comprised of U.S. stocks). 13 *See* Securities Exchange Act Release No. 50355 (September 13, 2004), 69 FR 56252 (September 20, 2004) (approving generic listing standards for trust certificates linked to portfolios of investment-grade debt securities, securities of government-sponsored entities, and U.S. Treasury securities). 14 *See* Amex Company Guide Section 107D (Index-Linked Securities); Securities Exchange Act Release No. 51563 (April 15, 2005), 70 FR 21257 (April 25, 2005). Such listing standards permit the listing—pursuant to Rule 19b-4(e) under the Act—of such securities where the Commission had previously approved the trading of specified index-based derivatives on the same index, on the condition that all of the standards set forth in the original order are satisfied by the exchange employing generic listing standards. 15 *See* Securities Exchange Act Release Nos. 46252 (July 24, 2002), 67 FR 49715 (July 31, 2002) (approving the listing and trading of funds based on U.S. Treasury or corporate bond indexes); 46738 (October 29, 2002), 67 FR 67666 (November 6, 2002) (approving the listing and trading of FITRs); and 52870 (December 1, 2005), 70 FR 73039 (December 8, 2005) (approving the trading on a UTP basis of the iShares Lehman TIPS Bond Fund). 16 *See* Securities Exchange Act Release Nos. 41334 (April 27, 1999), 64 FR 23883 (May 4, 1999) (approving the listing and trading of Bond Indexed Term Notes); 46923 (November 27, 2002), 67 FR 72247 (December 4, 2002) (approving the listing and trading of trust units linked to a basket of investment-grade fixed income securities); and 48484 (September 11, 2003), 68 FR 54508 (September 17, 2003) (approving the listing and trading of trust certificates linked to a basket of up to five investment-grade fixed income securities plus U.S. Treasury securities). 17 The failure of a particular ETF to comply with the proposed generic listing standards would not preclude the Exchange from submitting a separate rule change pursuant to Section 19(b)(2) of the Act to list and trade the ETF. B. Exchange-Traded Funds Amex Rules 1000-AEMI and Rules 1001 *et seq.* allow for the listing and trading on the Exchange of PDRs. A PDR represents an interest in a unit investment trust registered under the Investment Company Act of 1940 (the “1940 Act”) 18 that operates on an open-end basis and holds the securities that comprise an index or portfolio. Amex Rules 1000A-AEMI and 1001A *et seq.* provide standards for listing IFSs, which are securities issued by an open-end management investment company ( *i.e.* , an open-end mutual fund) based on a portfolio of securities that seeks to provide investment results that correspond generally to the price and yield performance or total return performance of a specified foreign or domestic stock index or fixed income index. Pursuant to these rules, ETF shares must be issued in a specified aggregate minimum number in return for a deposit of specified securities and/or a cash amount, with a value equal to the next-determined net asset value (“NAV”). When aggregated in the same specified minimum number, ETF shares must be redeemed by the issuer for the securities and/or cash, with a value equal to the next-determined NAV. Consistent with Amex Rules 1002 and 1002A, the NAV is calculated once a day after the close of the regular trading day. 18 15 U.S.C. 80a. To meet the investment objective of providing investment returns that correspond to the performance of the underlying index, an ETF may use a “replication” strategy or a “representative sampling” strategy with respect to the ETF portfolio. An ETF using a replication strategy invests in each component security of the underlying index in about the same proportion as that security is represented in the index itself. An ETF using a representative sampling strategy generally invests in a significant number, but perhaps not all, of the component securities of the underlying index, and holds securities that, in the aggregate, are intended to approximate the full index in terms of certain key characteristics. In the context of a fixed income index, such characteristics may include liquidity, duration, maturity, and yield. In addition, an ETF portfolio may be adjusted in accordance with changes in the composition of the underlying index or to maintain compliance with requirements applicable to a regulated investment company under the Internal Revenue Code (“IRC”). C. Listing and Trading of ETFs Based on Fixed Income Indexes or Fixed Income Securities Proposed Commentary .04 to Amex Rule 1000-AEMI and Commentary .03 to Amex Rule 1000A-AEMI define the term “Fixed Income Securities” to include notes, bonds (including convertible bonds), debentures, or evidence of indebtedness that include, but are not limited to, U.S. Treasury securities (“Treasury Securities”), securities of government-sponsored entities (“GSE Securities”), municipal securities, trust-preferred securities, 19 supranational debt, 20 and debt of a foreign country or subdivision thereof. For purposes of the proposed definition, a convertible bond is deemed to be a Fixed Income Security until it is converted into its underlying common or preferred stock. 21 Once converted, the equity security may no longer continue as a component of a fixed income index under the proposed rules and, accordingly, would have to be removed from such index for the ETF to remain listed pursuant to proposed Commentary .04 to Amex Rule 1000-AEMI or Commentary .03 to Amex Rule 1000A-AEMI. 19 Trust-preferred securities are undated cumulative securities issued from a special purpose trust in which a bank or bank holding company owns all of the common securities. The trust's sole asset is a subordinated note issued by the bank or bank holding company. Trust preferred securities are treated as debt for tax purposes so that the distributions or dividends paid are a tax-deductible interest expense. 20 Supranational debt represents the debt of international organizations such as the World Bank, the International Monetary Fund, regional multilateral development banks, and multilateral financial institutions. Examples of regional multilateral development banks include the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, and the Inter-American Development Bank. In addition, examples of multilateral financial institutions include the European Investment Bank and the International Fund for Agricultural Development. 21 Under the Section 3(a)(11) of the Act, 15 U.S.C. 78c(a)(11), a convertible security is an equity security. However, for the purposes of the proposed generic listing criteria, Amex believes that defining a convertible security (prior to its conversion) as a Fixed Income Security is consistent with the objectives and intention of the generic listing standards for fixed-income-based ETFs as well as the Act. Fixed Income Index Criteria To list an ETF pursuant to the proposed generic listing standards for Fixed Income Indexes, the index underlying the ETF must satisfy all the conditions contained in proposed Commentary .04 to Amex Rule 1000-AEMI (for PDRs) or proposed Commentary .03 to Amex Rule 1000A-AEMI (for IFSs). As with existing generic listing standards for ETFs based on domestic and international or global indexes, these listing criteria are designed to ensure that securities with substantial market distribution and liquidity account for a substantial portion of the weight of a Fixed Income Index. 22 22 The Exchange noted in its proposal that the index criteria are loosely based on the standards contained in Commission and Commodity Futures Trading Commission (“CFTC”) rules regarding the application of the definition of narrow-based security index to debt security indexes. *See* Securities Exchange Act Release No. 54106 (July 6, 2006), 71 FR 39534 (July 13, 2006) (File No. S7-07-06) (the “Joint Rules”). To list an ETF based on a Fixed Income Index pursuant to the proposed generic listing standards, the index must meet the following criteria: • The index or portfolio must consist of Fixed Income Securities; • Components that in aggregate account for at least 75% of the weight of the index or portfolio must have a minimum original principal amount outstanding of $100 million or more; 23 23 This is virtually identical to the corresponding standard in Section 107E(a)(x) of the Amex *Company Guide* for trust certificates. • No component Fixed Income Security (excluding a Treasury Security) represents more than 30% of the weight of the index, and the five highest weighted component fixed income securities in the index do not in the aggregate account for more than 65% of the weight of the index; 24 24 This is consistent with the standard for U.S. equity ETFs set forth in Commentary .03(a)(A) to Amex Rule 1000-AEMI and Commentary .02(a)(A) to Amex Rule 1000A-AEMI and the standard set forth by the Commission and the CFTC in the Joint Rules. *See* note 22 *supra.* • An underlying index or portfolio (excluding one consisting entirely of exempted securities) must include a minimum of 13 non-affiliated issuers; 25 and 25 The required number of unaffiliated issuers parallels the diversification requirement applicable to U.S. equity ETFs as set forth in Commentary .03(a)(A) to Amex Rule 1000-AEMI and Commentary .02(a)(A) to Amex Rule 1000A-AEMI. • Component securities that in aggregate account for at least 90% of the weight of the index or portfolio must be either: 26 26 The Exchange notes that this proposed standard is consistent with a similar standard in the Joint Rules and is designed to ensure that the component fixed income securities have sufficient publicly available information. • From issuers that are required to file reports pursuant to Sections 13 and 15(d) of the Act; 27 27 15 U.S.C. 78m and 78o(d). • From issuers that have a worldwide market value of its outstanding common equity held by non-affiliates of $700 million or more; • From issuers that have outstanding securities that are notes, bonds, debentures, or evidences of indebtedness having a total remaining principal amount of at least $1 billion; • Exempted securities, as defined in Section 3(a)(12) of the Act; 28 or 28 15 U.S.C. 78c(a)(12). • From issuers that are governments of foreign countries or political subdivisions of foreign countries. The proposed generic listing requirements for ETFs based on Fixed Income Indexes would not require that component securities in an underlying index have an investment-grade rating. 29 In addition, the proposed requirements would not require a minimum trading volume, due to the lower trading volume that generally occurs in the fixed income markets as compared to the equity markets. 30 Also, consistent with the existing Amex Rule 1000A-AEMI(b)(2)(iii), an IFS based on a Fixed Income Index or Combination Index that seeks to provide investment results that either exceed the performance of such underlying index or correspond to the inverse (opposite) of the performance of such index by a specified multiple may not be listed and traded pursuant to the proposed generic listing standards. 29 *See* Joint Rules, *supra* note 22, 71 FR at 30537. 30 In its proposal, the Exchange stated its view that the minimum principal amount outstanding requirement of $100 million, coupled with the proposed concentration requirements, would reduce the likelihood that an ETF listed under the proposal would be readily susceptible to manipulation. D. Listing and Trading of ETFs Based on Combination Indexes To list an ETF pursuant to the proposed generic listing standards for Combination Indexes, an index underlying the ETF must satisfy all the conditions contained in proposed Commentary .05 to Amex Rule 1000-AEMI (for PDRs) or proposed Commentary .04 to Amex Rule 1000A-AEMI (for IFSs). As with ETFs based solely on Fixed Income Indexes, the generic listing standards are intended to ensure that securities with substantial market distribution and liquidity account for a substantial portion of the weight of both the equity and fixed income portions of a Combination Index. The proposed rules provide that the Exchange may list and trade ETFs based on a combination of indexes or a series of component securities representing the U.S. or domestic equity market, the international equity market, and the fixed income market, pursuant to Rule 19b-4(e) under the Act, provided that:
(i)Such portfolio or combination of indexes has been described in an exchange rule approved by the Commission for the trading of options, PDRs, IFSs, Index-Linked Exchangeable Notes, or Index-Linked Securities, and all of the standards set forth in the approval order are satisfied by the exchange employing generic listing standards; or
(ii)the equity portion and fixed income portion of the component securities separately meet the criteria set forth in Commentary .03 (equities) and proposed Commentary .04 (fixed income) for PDRs and Commentary .02 (equities) and proposed Commentary .03 (fixed income) for IFSs. 31 31 *See* proposed Commentary .05 to Amex Rule 1000-AEMI and Commentary .04 to Amex Rule 1000A-AEMI. E. Index Maintenance and Information The Exchange proposes to adopt Commentaries .04(b) and .05(a) to Amex Rule 1000-AEMI and Commentaries .03(b) and .04(a) to Amex Rule 1000A-AEMI to establish requirements regarding the maintenance and dissemination of index information in connection with ETFs based on Fixed Income Indexes and Combination Indexes. Commentaries .04(b)(ii) and .05(a)(ii) to Amex Rule 1000-AEMI and Commentaries .03(b)(ii) and .04(a)(ii) to Amex Rule 1000A-AEMI would require that the underlying value of a Fixed Income Index be widely disseminated by one or more major market data vendors at least once a day during the time when the corresponding ETF trades on the Exchange. The rules also require that the underlying value of a Combination Index be widely disseminated by one or more major market data vendors at least once every 15 seconds during the time when the corresponding ETF trades on the Exchange, provided that, with respect to the fixed income components of the Combination Index, their impact on the index is required to be updated only once each day. In its proposal, the Exchange stated that these provisions reflect the nature of the fixed income markets as well as the frequency of intra-day trading information with respect to Fixed Income Securities. If the index value does not change during some or all of the period when trading is occurring on the Exchange, the last official calculated index value must remain available throughout Exchange trading hours. Moreover, if a Fixed Income Index or Combination Index underlying an ETF is maintained by broker-dealer or fund advisor, the broker-dealer or fund advisor shall erect a “firewall” around the personnel who have access to information concerning changes and adjustments to the index. In addition, any advisory committee, supervisory board, or similar entity that advises a Reporting Authority or that makes decisions on index composition, methodology, and related matters, must implement and maintain, or be subject to, procedures designed to prevent the use and dissemination of material non-public information regarding the index. F. Application of General Rules Proposed Commentary .06 to Amex Rule 1000-AEMI and Commentary .05 to Amex Rule 1000A-AEMI set forth requirements governing any ETF based on a Fixed Income Index or Combination Index. These include initial shares outstanding, minimum price variation, listing fees, surveillance procedures, the application of PDR or IFS rules (as applicable), and the dissemination of the Intraday Indicative Value, which is an estimate of the value of a share of each ETF, updated at least every 15 seconds. G. ETF Listing Criteria, Trading Rules, and Procedures Under the Exchange's proposal, an ETF based on a Fixed Income Index or Combination Index would be subject to the listing criteria set out in Amex Rules 1002 and 1002A. Accordingly, an ETF's NAV must be calculated at least once each day and disseminated to all market participants at the same time. 32 Also, where the value of the underlying index or portfolio of securities on which the ETF is based is no longer calculated or available, or if the ETF chooses to substitute a new index or portfolio for the existing index or portfolio, the Exchange would commence delisting proceedings if the new index or portfolio does not meet the requirements of and listing standards set forth in Amex Rules 1000-AEMI and Rules 1001 *et seq.* or Amex Rules 1000A-AEMI and 1001A *et seq.* , as applicable. If an ETF chose to substitute an index that did not meet any of Amex's generic listing standards, approval by the Commission of a separate filing pursuant to Section 19(b)(2) of the Act to list and trade that ETF would be required. 32 *See* Amex Rules 1002(a)(ii) and 1002A(a)(ii) (requiring that, before approving an ETF for listing, the Exchange will obtain a representation from the ETF issuer that the NAV per share will be calculated daily and made available to all market participants at the same time). An ETF based on a Fixed Income Index or Combination Index would be traded, in all respects, under the Exchange's existing trading rules and procedures that apply to ETFs generally, including with respect to delisting and trading halts. 33 In particular, Amex Rules 1002(b)(ii) and 1002A(b)(ii) provide that, if the Intraday Indicative Value or the index value applicable to that series of ETFs is not being disseminated as required, the Exchange may halt trading during the day in which the interruption to the dissemination of the Intraday Indicative Value or the index value occurs. If the interruption to the dissemination of the Intraday Indicative Value or the index value persists past the trading day in which it occurred, the Exchange would halt trading no later than the beginning of the trading day following the interruption. 34 33 *See* Amex Rules 1000-AEMI and 1001 through 1006 and Amex Rules 1000A-AEMI and 1001A through 1005A. 34 If an ETF is traded on the Exchange pursuant to unlisted trading privileges, the Exchange would halt trading if the primary listing market halts trading in such ETF because the Intraday Indicative Value and/or the index value is not being disseminated. See Amex Rules 1002(b)(ii) and 1002A(b)(ii). As noted above, if a broker-dealer is responsible for maintaining (or has a role in maintaining) the underlying index, such broker-dealer would be required to erect and maintain a “firewall,” in a form satisfactory to the Exchange, to prevent the flow of non-public information regarding the underlying index from the personnel involved in the development and maintenance of such index to others such as sales and trading personnel. H. Surveillance The Exchange represents that an ETF based on a Fixed Income Index or Combination Index would be covered under the Exchange's surveillance program for ETFs. 35 The Exchange will implement written surveillance procedures for an ETF based on a Fixed Income Index or a Combination Index. 36 The Exchange represents that its surveillance procedures are adequate to properly monitor the trading of ETFs listed pursuant to the proposed new listing standards. In addition, the Exchange also has a general policy prohibiting the distribution of material, non-public information by its employees. 35 *See* Amendment No. 2. 36 *See* proposed Commentary .06(f) to Amex Rule 1000-AEMI and Commentary .05(f) to Amex Rule 1000A-AEMI. III. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change, as amended, is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange. 37 In particular, the Commission believes that the proposal is consistent with Section 6(b)(5) of the Act 38 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, 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. 37 In approving this proposal, the Commission has considered its impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 38 15 U.S.C. 78f(b)(5). Currently, the Exchange must file a proposed rule change with the Commission pursuant to Section 19(b)(1) of the Act 39 and Rule 19b-4 thereunder 40 to list or trade any ETF based on Fixed Income Securities. The Exchange also must file a proposed rule change to list or trade an ETF based on a Fixed Income or Combination Index described in an exchange rule previously approved by the Commission as an underlying benchmark for a derivative security. Rule 19b-4(e), however, provides that the listing and trading of a new derivative securities product by an SRO will not be deemed a proposed rule change pursuant to Rule 19b-4(c)(1) if the Commission has approved, pursuant to Section 19(b) of the Act, the SRO's trading rules, procedures, and listing standards for the product class that would include the new derivative securities product, and the SRO has a surveillance program for the product class. The Exchange's proposed rules for the listing and trading of ETFs pursuant to Rule 19b-4(e) based on
(1)certain indexes with components that include Fixed Income Securities or
(2)indexes or portfolios described in exchange rules previously approved by the Commission as underlying benchmarks for derivative securities fulfill these requirements. Use of Rule 19b-4(e) by Amex to list and trade such ETFs should promote competition, reduce burdens on issuers and other market participants, and make such ETFs available to investors more quickly. 41 39 15 U.S.C. 78s(b)(1). 40 17 CFR 240.19b-4. 41 The Commission notes that failure of a particular ETF to satisfy the Exchange's generic listing standards does not preclude the Exchange from submitting a separate proposal to list and trade such ETF. The Commission has previously approved generic listing standards for ETFs based on indexes that consist of stocks listed on U.S. and non-U.S. exchanges, as well as for other index-based derivatives. 42 The Commission has also approved for listing and trading ETFs based on certain fixed income indexes and structured notes linked to a basket or index of Fixed Income Securities. 43 The Commission believes that adopting additional generic listing standards for ETFs based on Fixed Income and Combination Indexes should fulfill the intended objective of that rule by allowing those ETFs that satisfy the proposed generic listing standards to commence trading without a rule filing. Taken together, the Commission finds that the Amex proposal meets the requirements of Rule 19b-4(e). All products listed under the proposed generic listing standards will be subject to existing Amex rules that governing the trading of ETFs. 42 *See* notes 12-14 *supra* . The Commission notes that such listing standards permit an exchange to list new derivative securities pursuant to Rule 19b-4(e) under the Act based on portfolios or indexes that underlie securities described in other previously approved rules, subject to the condition that all of the standards set forth in the approval order are satisfied by the exchange employing generic listing standards. 43 *See* notes 15-16 supra. Proposed Commentary .04 to Amex Rule 1000-AEMI (for PDRs) and proposed Commentary .03 to Amex Rule 1000A-AEMI (for IFSs) establish the standards for the composition of a Fixed Income Index or Combination Index underlying an ETF. These requirements are designed, among other things, to require that components of an index or portfolio underlying the ETF are adequately capitalized and sufficiently liquid, and that no one security dominates the index. The Commission believes that these standards are reasonably designed to ensure that a substantial portion of any underlying index or portfolio consists of securities about which information is publicly available, and that when applied in conjunction with the other applicable listing requirements, will permit the listing and trading only of ETFs that are sufficiently broad-based in scope to minimize potential manipulation. The Commission further believes that the proposed listing standards are reasonably designed to preclude Amex from listing and trading ETFs that might be used as a surrogate for trading in unregistered securities. The proposed generic listing standards also will permit Amex to list and trade an ETF if the Commission previously has approved an exchange rule that contemplates listing and trading a derivative security based on the same underlying index. Amex would be able to rely on that earlier approval order, provided that Amex complies with the commitments undertaken by the other SRO set forth in the prior order, including any surveillance-sharing arrangements. The Commission believes that Amex's proposal is consistent with Section 11A(a)(1)(C)(iii) of the Act, 44 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. Under the Exchange's proposed listing standards, the underlying value of a Fixed Income Index is required to be widely disseminated by one or more major market data vendors at least once a day during the time when the corresponding ETF trades on the Exchange. Likewise, the underlying value of a Combination Index is required to be widely disseminated by one or more major market data vendors at least once every 15 seconds during the time when the corresponding ETF trades on the Exchange, provided that, with respect to the fixed income components of the Combination Index, the impact on the index is required to be updated only once each day. 44 15 U.S.C. 78k-1(a)(1)(C)(iii). Furthermore, the Commission believes that the proposed rules are reasonably designed to promote fair disclosure of information that may be necessary to price an ETF appropriately. If a Fixed Income Index or Combination Index underlying such an ETF is maintained by a broker-dealer or fund advisor, that entity must erect a firewall around the personnel who have access to information concerning changes and adjustments to the index. Any advisory committee, supervisory board, or similar entity that advises a Reporting Authority or that makes decisions on index composition, methodology, or related matters must implement and maintain, or be subject to, procedures designed to prevent the use and dissemination of material non-public information regarding the index. The Commission also notes that existing Amex Rules 1002(a)(ii) and 1002A(a)(ii), which would apply to an ETF listed and traded pursuant to this proposal, require that, before approving an ETF for listing, the Exchange will obtain a representation from the ETF issuer that the NAV per share will be calculated daily and made available to all market participants at the same time. The Commission also believes that the Exchange's trading halt rules are reasonably designed to prevent trading in an ETF when transparency cannot be assured. Amex Rules 1002(b)(ii) and 1002A(b)(ii) provide that, if the Intraday Indicative Value or the index value applicable to an ETF is not disseminated as required, the Exchange may halt trading during the day in which the interruption occurs. If the interruption continues, the Exchange will halt trading no later than the beginning of the next trading day. 45 Also, the Exchange will commence delisting proceedings in the event that the value of the underlying index is no longer calculated and widely disseminated on at least a 15-second basis (for Combination Indexes) or at least once a day (for Fixed Income Indexes). 45 If an ETF is traded on the Exchange pursuant to unlisted trading privileges, the Exchange would halt trading if the primary listing market halts trading in such ETF because the Intraday Indicative Value and/or the index value is not being disseminated. See Amex Rules 1002(b)(ii) and 1002A(b)(ii). The Exchange will implement written surveillance procedures for ETFs based on a Fixed Income Indexes or Combination Indexes. 46 In approving this proposal, the Commission has relied on the Exchange's representation that its surveillance procedures are adequate to properly monitor the trading of ETFs listed pursuant to this proposal. This approval order is conditioned on the continuing accuracy of that representation. 46 *See* proposed Commentary .06(f) to Amex Rule 1000-AEMI and Commentary .05(f) to Amex Rule 1000A-AEMI. Acceleration The Commission finds good cause to approve the proposal, as amended, prior to the thirtieth day after the amended proposal was published for comment in the **Federal Register** . The Commission believes that accelerating approval of the proposed rule change will expedite the listing and trading of additional ETFs based on Fixed Income and Combination Indexes by the Exchange, subject to consistent and reasonable standards. The Commission also notes that no comments were received during the abbreviated comment period, and that Amendments No. 2 and 3 do not make any substantial changes to the proposal. Thus, the Commission finds good cause, consistent with Section 19(b)(2) of the Act, 47 to grant accelerated approval of the proposed rule change, as amended. 47 15 U.S.C. 78s(b)(2). IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments regarding Amendments No. 2 and 3, including whether Amendments No. 2 and 3 are consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File Number SR-Amex-2006-118 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Amex-2006-118. 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 Amex. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Amex-2006-118 and should be submitted on or before April 5, 2007. V. Conclusion *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 48 that the proposed rule change (SR-Amex-2006-118), as amended, be, and hereby is, approved on an accelerated basis. 48 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 49 49 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-4747 Filed 3-14-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55425; File No. SR-CBOE-2006-73] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval of Proposed Rule Change as amended, to Amend Certain of its Rules to Provide for the Listing and Trading of Options on the CBOE Russell 2000 Volatility Index sm (“RVX sm ”) March 8, 2007. I. Introduction On August 31, 2006, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) a proposed rule change, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 1 and Rule 19b-4 thereunder, 2 to amend certain of its rules to provide for the listing and trading of options on the CBOE Russell 2000 Volatility Index sm (“RVX sm ”). On October 20, 2006, CBOE filed Amendment No. 1 to the proposed rule change. The proposed rule change, as modified by Amendment No. 1, was published for comment in the **Federal Register** on October 30, 2006. 3 The Commission received no comments on the proposal. On February 26, 2007, CBOE filed Amendment No. 2 to the proposed rule change. 4 This order provides notice of Amendment No. 2 to the proposed rule change and approves the proposed rule change as amended. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 54643 (October 23, 2006), 71 FR 63367 (“Notice”). 4 In Amendment No. 2, the Exchange represented that CBOE Futures Exchange, LLC (“CFE”) does not currently list and trade RVX futures. The Exchange further represented that it will not list for trading RVX options until RVX futures have begun trading on CFE. II. Description of the Proposal The Exchange seeks to list and trade cash-settled, European-style options on the RVX. The index is calculated using real-time Russell 2000 Index (“RUT”) option bid/ask quotes. RVX uses nearby and second nearby RUT options with at least 8 days left to expiration and then weights them to yield a constant, 30-day measure of the expected volatility of the RUT. For each contract month, CBOE will determine the at-the-money strike price. It will then select the at-the-money and out-of-the money series with non-zero bid prices and determine the midpoint of the bid-ask quote for each of these series. The midpoint quote of each series is then weighted so that the further away that series is from the at-the-money strike, the less weight that is accorded to the quote. Then, to compute the index level, CBOE will calculate a volatility measure for the nearby options and then for the second nearby options. This is done using the weighted mid-point of the prevailing bid-ask quotes for all included option series with the same expiration date. These volatility measures are then interpolated to arrive at a single, constant 30-day measure of volatility. 5 5 The Exchange represented in its filing that the RVX is calculated in the same manner as other volatility indexes ( *e.g.,* the CBOE Volatility Index (“VIX”)), upon which options have been based and previously approved by the Commission. A more detailed explanation of the method used to calculate VIX may be found on CBOE's Web site at the following internet address: *http://www.cboe.com/micro/vix/vixwhite.pdf.* CBOE will compute the index on a real-time basis throughout each trading day, from 8:30 a.m. until 3:15 p.m. CST. Volatility index levels will be calculated by CBOE and disseminated at 15-second intervals to market information vendors via the Options Price Reporting Authority (“OPRA”). Because of the generally limited range in which RVX has fluctuated, the Exchange proposes to list series at $1.00 or greater strike price intervals for each expiration on up to 5 RVX option series above and 5 RVX option series below the current index level. Additional series at $1.00 or greater strike price intervals could be listed for each expiration as the current index level of RVX moves from the exercise price of the RVX options series that already have been opened for trading on the Exchange in order to maintain at least 5 RVX option series above and 5 RVX option series below the current index level. Additionally, the Exchange proposes that it would not list series with $1.00 intervals within $0.50 of an existing $2.50 strike price with the same expiration month ( *e.g.,* if there is an existing $12.50 strike, the Exchange would not list a $12.00 or $13.00 strike). The interval between strike prices for RVX long-term option series (“LEAPs(r)”) will continue to be no less than $2.50. III. Discussion After careful review, the Commission finds that CBOE's proposal to permit trading in options based on the RVX 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 and the rules and regulations thereunder. The Commission believes that CBOE's proposal gives options investors the ability to make an additional investment choice in a manner consistent with the requirements of Section 6(b)(5) of the Act. 8 The Commission further believes that trading options on this volatility index provides investors with an important trading and hedging mechanism. 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 finds that it is consistent with the Act for CBOE to apply its rules for trading of broad-based index options to RVX. The Commission believes that because this volatility index is composed of options on an index which the Commission has previously determined is appropriate to treat as broad-based for purposes of CBOE's rules, 9 it is appropriate to apply to the RVX options the position limits, exercise limits and margin requirements that apply to CBOE's component index options. 9 *See* Securities Exchange Act Release No. 31382 (October 30, 1992), 57 FR 52802 (November 5, 1992) (SR-CBOE-92-02). The Commission also notes CBOE's representation that it has adequate surveillance procedures in place to monitor for manipulation of the RVX options. In addition, the Commission notes that the Exchange will use the same surveillance procedures currently utilized for each of the Exchange's other index options to monitor trading in options on the RVX and that CBOE believes that these surveillance procedures are adequate to monitor the trading of options on the RVX. For surveillance purposes, the Exchange will have complete access to information regarding trading activity in the pertinent underlying securities. As explained by CBOE, the RVX fluctuates in a narrow range, and the Commission believes that the implementation of $1 strike price intervals in the RVX option product, within the parameters detailed in CBOE's proposal, is appropriate. The Commission also finds that CBOE's trading rules and other product specifications are consistent with the Act. Because the exercise of these options will be cash-settled, RVX options will be A.M.-settled on the business day following expiration, in a manner that will deter manipulation. The Commission also notes CBOE's representations that it possesses the necessary systems capacity to support new series that would result from the introduction of RVX options and that CBOE also has been informed that OPRA has the capacity to support such new series. The Commission finds good cause to approve the proposed rule change, as modified by Amendment Nos. 1 and 2 before the 30th day after the date of publication of notice of filing of Amendment No. 2 in the **Federal Register** . In Amendment No. 2, the Exchange represented that CBOE Futures Exchange, LLC (“CFE”) does not currently list and trade RVX futures and that the Exchange will not list for trading RVX options until RVX futures have begun trading on CFE. The Commission believes that this clarifying language is necessary because the Exchange plans to use RVX futures prices as a proxy for “implied forward” RVX levels. 10 10 *See* Notice *supra* note 3. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change as amended 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-CBOE-2006-73 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-CBOE-2006-73. 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-CBOE-2006-73 and should be submitted on or before April 5, 2007. V. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 11 that the proposed rule change (SR-CBOE-2006-73), as amended, be, and hereby is, approved on an accelerated basis. 11 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E7-4758 Filed 3-14-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55426; File No. SR-ISE-2007-01] Self-Regulatory Organizations; International Securities Exchange, LLC; Order Approving a Proposed Rule Change Relating to Rule 2113 (Long and Short Sales) March 8, 2007. On January 5, 2007, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”), 1 and Rule 19b-4 thereunder, 2 the International Securities Exchange, LLC (the “Exchange” or the “ISE”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change relating to NASD Rule 2113 (Long and Short Sales). The proposed rule change was published for comment in the **Federal Register** on February 5, 2007. 3 The Commission received no comments regarding this proposal. This order approves the rule change. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 55191 (January 29, 2007), 72 FR 5305 (February 5, 2007). Discussion and Commission Findings The Exchange proposes to amend ISE Rule 2113 (Long and Short Sales) to conform its language to Rule 10a-1(a)(1)(i) promulgated under the Act. Specifically, Rule 2113 (Long and Short Sales) currently provides that the Exchange will not execute a short sale order below the price at which the last sale was effected on the Exchange. The Exchange proposes to amend ISE Rule 2113 to conform its language to Rule 10a-1(a)(1)(i) promulgated under the Act, whereby the Exchange will not execute a short sale order below the price at which the last sale was reported pursuant to an effective transaction reporting plan, as defined in Rule 242.600 under the Act. 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, and in particular Section 6(b)(5) of the Act 4 which requires that the rules of an exchange be designed to promote just and equitable principles of trade, serve to remove impediments to and perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. 5 4 15 U.S.C. 78f(b)(5). 5 In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR-ISE-2007-01) be, and it hereby is, approved. 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. E7-4691 Filed 3-14-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55423; File No. SR-NYSEArca-2007-21] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to an Exemption from Certain of the Exchange's Shareholder Approval Requirements for Limited Partnerships March 8, 2007. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the “Act”) 2 and Rule 19b-4 thereunder, 3 notice is hereby given that on February 23, 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 Exchange. The Exchange has designated this proposal as non-controversial under Section 19(b)(3)(A)(iii) of the Act 4 and Rule 19b-4(f)(6) thereunder, 5 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 15 U.S.C. 78a. 3 17 CFR 240.19b-4 4 15 U.S.C. 78s(b)(3)(A). 5 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 is proposing to exempt limited partnerships (“LPs”) from the obligations to obtain shareholder approval for the issuance of common stock and related securities in the circumstances set forth in subsections
(8)through
(11)of NYSE Arca Equities Rule 5.3(d). The text of this proposed rule change is available on the Exchange's Web site ( *http://www.nyse.com/RegulationFrameset.html? displayPage=http://www.nysearca.com/ nysearca_reg/prf.asp),* 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 Exchange included statements concerning the purpose of and basis for the proposed rule changes and discussed any comments it received regarding the proposal. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose NYSE Arca is proposing to exempt limited partnerships (“LPs”) from the obligations to obtain shareholder approval for the issuance of common stock and related securities in the circumstances set forth in subsections
(8)through
(11)of NYSE Arca Equities Rule 5.3(d). 6 The proposed amendment does not affect investors in any currently listed company, as there are currently no LPs listed on the Exchange. 6 This filing does not in any way limit the applicability of the provisions of NYSE Arca Equities Rule 5.2(i) to limited partnership rollups (as defined in Section 14(h) of the Securities Exchange Act of 1934) or the continued applicability of any other rule that is currently applicable to LPs. Subsections
(8)through
(11)of NYSE Arca Equities Rule 5.3(d) require listed issuers to obtain shareholder approval prior to the issuance of designated securities in the following situations: • Issuances that will result in a change of control of the issuer. • In connection with the acquisition of the stock or assets of another company, shareholder approval is needed in the following circumstances: • If any director, officer, or substantial shareholder of the listed company has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the company or assets to be acquired or in the consideration to be paid in the transaction (or series of related transactions) and the present or potential issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common shares or voting power of 5% or more; or • Where the present or potential issuance of common stock, or securities convertible into or exercisable for common stock (other than in a public offering for cash), could result in an increase in outstanding common shares of 20% or more or could represent 20% or more of the voting power outstanding before the issuance of such stock or securities. • In connection with a transaction other than a public offering involving: • The sale or issuance by the company of common stock (or securities convertible into or exercisable for common stock) at a price less than the greater of book or market value, which together with sales by officers, directors or principal shareholders of the company equals 20% or more of presently outstanding common stock, or 20% or more of the presently outstanding voting power; or • The sale or issuance by the company of common stock (or securities convertible into or exercisable for common stock) equal to 20% or more of presently outstanding stock or voting power for less than the greater of book or market value of the stock. The policy underlying these requirements is that shareholders should have the right to vote on any issuance of common stock that is materially dilutive of either their voting or economic interest in the company. Nasdaq has essentially identical shareholder approval requirements to those of the NYSE Arca. However, Nasdaq exempts LPs from those requirements, 7 which has placed NYSE Arca at a significant disadvantage in competing with Nasdaq for initial public offerings and transfers of LPs. To be treated as a partnership for federal tax purposes, an LP must ensure that 90% of its income is derived from “qualified sources,” which generally refers only to income derived from natural resource-related activities. Most listed LPs are engaged in energy-related businesses. The typical business model of LPs in the energy industry is to use their capital to acquire assets (e.g., pipelines) that produce predictable revenue streams and to commit in their partnership agreements to distribute most of their profits to the LP's unit holders. These LPs acquire assets frequently on an opportunistic basis and pay for them by issuing additional LP units. The ability of an LP listed on Nasdaq to issue additional LP units without the expense and uncertainty of obtaining shareholder approval provides Nasdaq with a significant advantage over NYSE Arca in attracting and retaining listings of LPs. 7 *See* Nasdaq Marketplace Rule 4360 (“Qualitative Listing Requirements for Nasdaq Issuers That Are Limited Partnerships”), which does not include the shareholder approval requirements found in Nasdaq Marketplace Rule 4350 (“Qualitative Listing Requirements for Nasdaq Issuers That Are Not Limited Partnerships”). *See also* Exchange Act Release No. 30811 (June 15, 1992); 57 FR 28542 (June 25, 1992) (SR-NASD-91-58) (approving the NASD's adoption of non-quantitative listing standards for partnerships, which did not include shareholder approval requirements). *See also* Exchange Act Release No. 34533 (August 15, 1994); 59 FR 43147 (August 22, 1994) (SR-NASD-93-3) (approving the NASD's adoption of the predecessor rule to Rule 4360, which also did not include shareholder approval requirements for listed limited partnerships). The Exchange believes that an analysis of the policies regarding voting and economic dilution underpinning its shareholder approval requirements demonstrates that it is appropriate to exempt LPs from their application. Listed LPs generally provide very limited voting rights to their unit holders. Typically, control of the LP resides with the general partner (“GP”) and the LP's board is that of the GP. The owner of the GP appoints the board and the common unit holders of the LP have no voting rights with respect to the election of directors. LP partnership agreements generally provide that LP unit holders can vote only on a merger or dissolution of the LP or on any amendment to the partnership agreement that is adverse to their interests. As such, investors who buy LP units have no expectation that they will be able to vote and, therefore, the policy that shareholders should be able to vote on any stock issuances that are materially dilutive of their voting power is of less relevance to LPs than to regular corporations. Furthermore, because LP unit holders generally do not have the right to elect directors, most LPs do not hold annual meetings. Therefore, it would not be possible for an LP to arrange for shareholder approval to be obtained in conjunction with an annual meeting, as would be possible for a regular company. Rather, an LP would have to call a special meeting every time it needed approval of an issuance pursuant to the shareholder approval rules. The Exchange also believes that the economic dilution concerns underpinning the shareholder approval rules are also less relevant in the case of LPs. Listed LPs typically are required under their partnership agreements to distribute almost all of their earnings to their unit holders and specify a minimum quarterly distribution that the LP is required to make. As such, LPs will only invest in new assets if they know that those assets will be sufficiently accretive to earnings to pay the minimum quarterly distribution required for the additional units that are sold to raise the capital to pay for those assets. A failure to pay the minimum quarterly distribution, or a reduction in the actual distribution level historically paid, would likely, in the Exchange's view, have a negative effect on the trading price of a listed LP, imposing a market discipline on management to ensure that any additional issuances will not be economically dilutive. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) 8 of the Act in general, and furthers the objectives of Section 6(b)(5) 9 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 mechanisms of a free and open market and a national market system. The Exchange believes that the proposed rule change will increase competition among listing markets and will remove a competitive disadvantage the Exchange currently has vis a vis Nasdaq and is therefore designed to perfect the mechanism of a free and open market. 8 15 U.S.C. 78f(b). 9 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 purpose of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments on the proposed rule change were neither solicited nor received. 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)become operative for 30 days after the date of the filing, 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 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). At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. A proposed rule change normally may not become operative prior to 30 days after the date of filing. 12 However, Rule 19b-4(f)(iii) 13 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 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. 14 The Commission notes that because there are no LPs presently listed on the NYSE Arca, there are no shareholders retroactively or currently impacted by the proposed rule change. Further, the proposed rule change will eliminate the competitive disadvantage to the NYSE Arca resulting from the present disparity in shareholder approval requirements between the NYSE Arca's and Nasdaq's treatment of LPs, while still retaining for NYSE Arca-listed LPs the provisions of the Exchange's rules relating to shareholder approval of equity compensation plans. 15 12 17 CFR 240.19b-4(f)(6)(iii). Rule 19b-4(f)(6)(iii) requires hat 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. The Exchange satisfied this requirement. 13 17 CFR 240.19b-4(f)(6)(iii). 14 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's on efficiency, competition, and capital formation. *See* 15 U.S.C. 78c(f). 15 *See* NYSE Arca Rule 5.3(d)(1)-(7) (setting forth the Exchange's rules with respect to shareholder approval of equity compensation plans). The proposed rule change would only eliminate the application of subparagraphs
(8)through
(11)to Rule 5.3(d) to limited partnerships. The Commission believes that it is desirable for the Exchange to have retained the requirements pertaining to shareholder approval of equity compensation plans for NYSEArca-listed limited partnerships. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as amended, 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 e-mail to *rule-comments@sec.gov.* Please include File Number SR-NYSEArca-2007-21 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-2007-21. 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 filings will also 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-NYSEArca-2007-21 and should be submitted by April 5, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 16 16 17 CFR 200.30-3(a)(12). Florence E. Harmon, Deputy Secretary. [FR Doc. E7-4692 Filed 3-14-07; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-55424; File No. SR-Phlx-2006-63] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing of Amendment No. 3 to the Proposed Rule Change, and Order Granting Accelerated Approval of Proposed Rule Change as Amended, Relating to a Philadelphia Board of Trade Enterprise License Fee for Dissemination of Certain Market Data March 8, 2007. I. Introduction On September 28, 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 add an Enterprise License Fee of $10,000 per year or $850 per month that would be assessed by the Exchange's wholly owned subsidiary, the Philadelphia Board of Trade (“PBOT”), on eligible market data vendors or subvendors (collectively “Vendors”) for certain index values that subscribers receive over PBOT's Market Data Distribution Network (“MDDN”). The Phlx filed Amendment No. 1 to the proposed rule change on November 1, 2006 and filed Amendment No. 2 on December 20, 2006. The proposed rule change, as amended, was published for comment in the **Federal Register** on December 28, 2006. 3 The Phlx filed Amendment No. 3 to the proposed rule change on March 2, 2007. 4 The Commission received no comments regarding the proposal. The Commission hereby issues notice of the filing of Amendment No. 3 and simultaneously grants accelerated approval to the proposed rule change as amended. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 54978 (December 20, 2006), 71 FR 78254. 4 In Amendment No. 3, Phlx clarified
(1)in its fee schedule that a retail broker dealer is conducting a material portion of its business via one or more Internet Web sites if at least 20% of the broker-dealer's business were conducted via the Internet; and
(2)that the current and closing index values underlying all of Phlx's proprietary indexes are being disseminated through PBOT. II. Description of the Proposal The Phlx proposes to add an Enterprise License Fee for eligible Vendors of market data disseminated over PBOT's MDDN. 5 The Phlx has licensed the current and closing index values underlying all of the Phlx's proprietary indexes to PBOT for the purpose of selling, reproducing, and distributing the index values over PBOT's MDDN (“Market Data”). On each trading day, the Exchange or its third party designee calculates and makes available to PBOT a real-time index value every 15 seconds and a closing index value at the end of each trading day. In exchange for subscriber fees paid to PBOT, market data vendors are allowed to widely disseminate all the values of Phlx's proprietary indexes to their subscribers. 6 5 The MDDN is an internet protocol multicast network developed by PBOT and SAVVIS Communications. 6 PBOT has contracted with one or more major Market Data Vendors to receive real-time and closing index values over the MDDN and promptly redistribute such values. As approved by the Commission, PBOT charges the following subscriber fees to Vendors of Market Data for all the values of Phlx's proprietary indexes disseminated by PBOT's MDDN: 7 a monthly fee of:
(a)$1.00 per “Device,” 8 that is used by Vendors and their subscribers to receive and re-transmit Market Data on a real-time basis (“device fee”), and
(b)$.0025 per request for snapshot data, 9 which is essentially Market Data that is refreshed no more frequently than once every 60 seconds, or $1,500 per month for unlimited snapshot data requests (“snapshot fee”). 10 All market data vendors which provide market data to 200,000 or more Devices in any month qualify for a 15% Administrative Fee credit for that month, to be deducted from the monthly Subscriber Fees that they collect and are obligated to pay PBOT under the Vendor/Subvendor Agreement. 7 *See* Securities Exchange Act Release No. 53790 (May 11, 2006), 71 FR 28738 (May 17, 2006) (“Original Approval Order”). The subscriber fees are set out in agreements that PBOT executed with various market data vendors for the right to receive, store, and retransmit the current and closing index values transmitted over the MDDN. 8 The agreements provide that “Device” shall mean, in case of each Subscriber and in such Subscriber's discretion, either any Terminal or any End User. A Subscriber's Device may be exclusively Terminals, exclusively End Users or a combination of Terminals or End Users and shall be reported in a manner that is consistent with the way the Vendor identifies such Subscriber's access to Vendor's data. An “End User” is defined as an individual authorized or allowed by a Vendor to access and display real-time market data that is distributed by PBOT over the MDDN; and a “Terminal” is any type of equipment (fixed or portable) that accesses and displays such market data. 9 *See* Securities Exchange Act Release No. 55111 (January 16, 2007), 72 FR 3188 (January 24, 2007) (increasing the snapshot fee to $.0025 per request). 10 The index values may also be made available by Vendors on a delayed basis ( *i.e.* , no sooner than twenty minutes following receipt of the data by vendors) at no charge. The Exchange proposes to add an Enterprise License Fee of $10,000 per year or $850 per month that would be available to eligible Vendors as an alternative to the device fee or snapshot fee. 11 A Vendor is eligible for the Enterprise License Fee if it is a firm acting as a retail broker-dealer conducting a material portion of its business via one or more proprietary Internet Web sites by which the firm distributes Market Data to predominately non-professional Market Data users with whom the firm has a brokerage relationship (“Eligible Firm”). 12 An Eligible Firm may also distribute Market Data to professional users with whom such firm has a brokerage relationship, provided such Market Data distribution is predominantly to non-professional users. 13 As stated in the proposed fee schedule, the Eligible Firm's Market Data distribution to professional users cannot exceed 10%. 14 The 15% Administrative Fee credit discount also applies to the Enterprise License Fee. 11 A firm that qualifies for the Enterprise License Fee may instead choose to pay the device fee and/or the snapshot fee as appropriate. 12 To be eligible for the Enterprise License Fee, the Exchange's fee schedule states that an Eligible Firm will be considered to conduct a material portion of its business via one or more Internet Web sites if at least twenty percent (20%) of the firm's business were conducted via the Internet. 13 A non-professional user is defined in the fee schedule as any natural person who is not:
(a)registered or qualified in any capacity with the Commission, the Commodities Futures Trading Commission, any state securities agency, any securities exchange or association, or any commodities or futures contract market or association;
(b)engaged as an “investment advisor” as that term is defined in Section 202(11) of the Investment Advisors Act of 1940, 15 U.S.C. 80b-2(11), (whether or not registered or qualified under that Act); nor,
(c)employed by a bank or other organization exempt from registration under federal or state securities laws to perform functions that would require registration or qualification if such functions were performed for an organization not so exempt. 14 As an example, if data recipient ABC Corp. has 100 customers that receive PBOT Market Data of which 10 are professional users and 90 are retail (non-professional) users the Enterprise License Fee would be available to the firm because 10 professional users/100 total users = 10%. To be eligible for the Enterprise License Fee, an Eligible Firm must certify to PBOT that it qualifies for the Enterprise License Fee, including that market distribution is predominantly to non-professional users, and must immediately notify PBOT if it can no longer certify its qualification. 15 15 A firm that has entered into an agreement with PBOT to receive Market Data over the MDDN but is not qualified for the Enterprise License Fee may pay the device fee and/or the snapshot fee as appropriate. III. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, 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-Phlx-2006-63 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-Phlx-2006-63. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Phlx. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Phlx-2006-63 and should be submitted on or before April 5, 2007. IV. 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 16 and, in particular, the requirements of Section 6 of the Act. 17 Specifically, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, 18 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. 16 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). 17 15 U.S.C. 78f. 18 15 U.S.C. 78f(b)(5). The Commission believes that the reduced alternate fee structure available through the Enterprise License Fee to eligible market data recipients should help to encourage a wider distribution of market data, especially to non-professional customers. The Commission notes that other industry organizations have similar fee structures which make various market data available to non-professional subscribers for a discounted fee relative to professional subscribers. For example, the Nasdaq Stock Market, Inc. (“Nasdaq”) has fees schedules that are higher for professional or corporate subscribers than for non-professional subscribers for UTP Level 1 fees, TotalView fees, and Nasdaq MAX fees. 19 The Options Price Reporting Authority (“OPRA”), a national market system plan, also offers a reduced fee to nonprofessional subscribers, which is not available to professional options data subscribers. 20 19 Nasdaq offers a TotalView Non-Professional Enterprise Fee License to qualified firms that distribute TotalView to their non-professional users with whom they have a professional relationship. A description of Nasdaq market data fees is available at *http://www.nasdaqtrader.com/trader/mds/nasdaqother/pricing.stm* (last visited on January 17, 2007). 20 A description of OPRA market data fees is available at *http://www.opradata.com/pdf/prof_pub_fee_schd_revised.pdf* (last visited on January 17, 2007). The Commission also believes that Phlx's eligibility standards in determining the type of retail broker-dealers who can use the new Enterprise License Fee appears to be reasonably related to its purpose of providing a discount to those retail broker-dealers who have primarily a proprietary Internet based business to non-professional users. 21 As noted above, eligible firms are also free to pay, as an alternative, the device fee or snapshot fee should they so choose. 21 *See supra* notes 12-15 and accompanying text for eligibility standards for the Enterprise License Fee. Based on the above, the Commission believes that the proposal is consistent with Section 6(b)(4) of the Act, 22 in that the proposed rule change provides for the equitable allocation of reasonable dues, fees, and other charges among the Exchange's members and issuers and other persons using its facilities. The Commission also continues to believe that PBOT's MDDN fee structure is consistent with Rule 603 under the Act 23 regarding the distribution, consolidation, and display of information with respect to quotations for and transactions in NMS stocks. 22 15 U.S.C. 78f(b)(4). 23 17 CFR 242.603. The Commission finds good cause for approving Amendment No. 3 to 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. 24 Amendment No. 3 clarifies the Exchange's proposal and does not raise any new regulatory issues. Further, the materiality standard in the Eligible Firm definition drafted into the fee schedule pursuant to Amendment No. 3 was the same standard published for comment with the filing and no comments were received. Finally, the Commission believes that it is appropriate to accelerate approval of the proposed rule change so that the Exchange can immediately provide the discounted fee to eligible firms that will disseminate the index values of Phlx's proprietary index options. Accordingly, the Commission finds good cause to approve Amendment No. 3 prior to the thirtieth day after the notice is published for comment in the **Federal Register** . 24 15 U.S.C. 78s(b)(2). V. Conclusion *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 25 that the proposed rule change (SR-Phlx-2006-63), as amended, 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. E7-4722 Filed 3-14-07; 8:45 am] BILLING CODE 8010-01-P SOCIAL SECURITY ADMINISTRATION Agency Information Collection Activities: Proposed Request and Comment Request The Social Security Administration
(SSA)publishes a list of information collection packages that will require clearance by the Office of Management and Budget
(OMB)in compliance with Pub. L. 104-13, the Paperwork Reduction Act of 1995, effective October 1, 1995. The information collection packages that may be included in this notice are for new information collections, approval of existing information collections, revisions to OMB-approved information collections, and extensions (no change) of OMB-approved information collections. SSA is soliciting comments on the accuracy of the agency's burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and on ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Written comments and recommendations regarding the information collection(s) should be submitted to the OMB Desk Officer and the SSA Reports Clearance Officer. The information can be mailed, faxed or e-mailed to the individuals at the addresses and fax numbers listed below: (OMB), Office of Management and Budget, Attn: Desk Officer for SSA, Fax: 202-395-6974, E-mail address: *OIRA_Submission@omb.eop.gov* . (SSA), Social Security Administration, DCFAM, Attn: Reports Clearance Officer, 1333 Annex Building, 6401 Security Blvd., Baltimore, MD 21235, Fax: 410-965-6400, E-mail address: *OPLM.RCO@ssa.gov* . I. The information collections listed below are pending at SSA and will be submitted to OMB within 60 days from the date of this notice. Therefore, your comments should be submitted to SSA within 60 days from the date of this publication. You can obtain copies of the collection instruments by calling the SSA Reports Clearance Officer at 410-965-0454 or by writing to the address listed above. 1. *Work History Report—20 CFR 404.1512 and 416.912—0960-0578.* The information collected by form SSA-3369 is needed to determine disability by the State Disability Determination Services (DDS). The information will be used to document an individual's past work history. The respondents are applicants for Supplemental Security Income
(SSI)disability payments and Social Security disability benefits. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 1,000,000. *Frequency of Response:* 1. *Average Burden Per Response:* 30 minutes. *Estimated Annual Burden:* 500,000 hours. 2. *Beneficiary Interview and Auditor's Observations Form—0960-0630.* The information collected through the Beneficiary Interview and Auditor's Observation Form, SSA-322, will be used by SSA's Office of the Inspector General to interview beneficiaries and/or their payees to determine whether representative payees are complying with their duties and responsibilities under SSA's regulations at 20 CFR 404.2035 and 416.635. Respondents to this collection will be randomly selected SSI recipients and Social Security beneficiaries who have representative payees. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 2,550. *Frequency of Response:* 1. *Average Burden Per Response:* 15 minutes. *Estimated Annual Burden:* 638 hours. 3. *Report to U.S. SSA by Person Receiving Benefits for a Child or Adult Unable to Handle Funds & Report to U.S. SSA* —0960-0049. SSA needs the information on Form SSA-7161-OCR-SM to monitor the performance of representative payees outside the U.S. and the information on Form SSA-7162-OCR-SM to determine continuing entitlement to Social Security benefits and correct benefit amounts for beneficiaries outside the U.S. The respondents are individuals outside the U.S. who are receiving benefits either for someone else, or on their own behalf, under title II of the Social Security Act. *Type of Request:* Revision of an OMB-approved information collection. Form number Number of respondents Frequency of response Average burden per response (minutes) Estimated annual burden (hours) SSA-7161-OCR-SM 30,000 1 15 7,500 SSA-7162-OCR-SM 236,500 1 5 19,708 Totals 257,000 27,208 4. *Real Property Current Market Value Estimate—0960-0471.* The SSA-L2794 is used to obtain current market value estimates of real property owned by applicants for, or beneficiaries of, Supplemental Security Income payments (or a person whose resources are deemed to such an individual). The value of an individual's resources, including non-home real property is one of the eligibility requirements for SSI payments. The respondents are individuals with knowledge of local real property values. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 5,438. *Frequency of Response:* 1. *Average Burden Per Response:* 20 minutes. *Estimated Annual Burden:* 1,813 hours. *5. Requests for Self-Employment Information, Employee Information, Employer Information—20 CFR 422.120—0960-0508.* SSA uses forms SSA-L2765, SSA-L3365 and SSA-L4002 to request correct information when an employer, employee or self-employed person reports an individual's earnings without a Social Security Number
(SSN)or with an incorrect name or SSN. The respondents are employers, employees or self-employed individuals who are requested to furnish additional identifying information. *Type of Request:* Revision of an OMB-approved information collection. Form number Number of respondents Frequency of response Average burden per response (minutes) Estimated annual burden (hours) SSA-L2765 15,400 1 10 2,567 SSA-L3365 173,100 1 10 28,850 SSA-L4002 656,000 1 10 109,333 Total 844,500 140,750 6. *Cost Reimbursable Research Request—0960-NEW.* Background The Social Security Administration
(SSA)is responsible for administrating two cash benefit programs, notably the Old-Age, Survivors, and Disability Insurance (OASDI) and SSI programs. To carry out this task, SSA maintains a number of files with detailed information on individuals and their characteristics, such as demographics, employment, earnings, assets, disability diagnosis, location, and other information. While designed for SSA to carry out its administrative tasks, the data files offer great informational depth to researchers interested in SSA's programs and other research areas. As a result, SSA provides qualified researchers needing agency administrative data for a variety of projects. SSA's data files are governed by strict confidentiality restrictions and are not publicly accessible. Therefore, SSA has charged the Office of Research, Evaluation, and Statistics
(ORES)as the primary interface for researchers, either within SSA or outside of it, who seek access to SSA's program files. To safeguard the information and the public trust, ORES has established comprehensive unified application process procedures for obtaining program data for research use. The Cost Reimbursable Research Request To request SSA program data for research, the researcher must submit a completed research application for SSA's evaluation. In the application, the requesting researcher must provide required basic project information and describe the way in which the proposed project will further SSA's mission to promote the economic security of the nation's people through its administration of the OASDI programs, and/or the SSI program. Depending on the type of research data needed, the requesting researchers may be required to provide SSA with up to 14 1 prescribed project information elements to properly assess their data request. 1 The complete application process is described in SSA's Program Data User Manual. Once the application is reviewed and approved by ORES a Reimbursable Conditions of Use Agreement is signed with the requestor which outlines the conditions and safeguards agreed to for the research project data exchange. The requestor may use the data for research and statistical purposes only. This is a reimbursable service and SSA recovers all expenses incurred in providing this information. The respondents to this information collection are the qualified researchers that request SSA administrative data for a variety of projects. These applicants include but are not limited to Federal and State government agencies and/or their contractors, private entities, and colleges/universities. *Type of Request:* Collection in use without OMB Control Number. *Number of Respondents:* 15. *Frequency of Response:* 1. *Average Burden per Response:* 240 minutes. *Estimated Annual Burden:* 60 hours. The total average annual cost for all respondents to use this service is approximately $112,500 or an average of $7,500 to complete a single request. This cost projection is an estimate of SSA's administrative and systems costs to analyze and provide the requested research data. Since this is a reimbursable, service all associated cost are borne by the requesters. 7. *Notice Regarding Substitution of Party On Death of Claimant-Reconsideration of Disability Cessation—20 CFR 404.917-404.921 and 416.1407-416.1421—0960-0351.* Form SSA-770 is used when a claimant dies before a determination is made on that person's request for reconsideration on his/her disability cessation. SSA seeks a qualified substitute party to pursue the appeal. If the qualified substitute party is located, the SSA-770 is used to collect information regarding whether to pursue or withdraw the reconsideration request. The information collected on the SSA-770 forms the basis of the decision to continue or discontinue the appeals process. Respondents are substitute applicants who are pursuing a reconsideration request for a deceased claimant. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 1,200. *Frequency of Response:* 1. *Average Burden Per Response:* 5 minutes. *Estimated Annual Burden:* 100 hours. II. The information collections listed below have been submitted to OMB for clearance. Your comments on the information collections would be most useful if received by OMB and SSA within 30 days from the date of this publication. You can obtain a copy of the OMB clearance packages by calling the SSA Reports Clearance Officer at 410-965-0454, or by writing to the address listed above. 1. *Response to Notice of Revised Determination—20 CFR 404.913-.914 and 992(b), 416.1413-.1414 and 1492—0960-0347.* Form SSA-765 is used by claimants to request a disability hearing and/or to submit additional evidence before a revised reconsideration determination is issued. The respondents are claimants who file for a disability hearing in response to a notice of revised determination for disability under the OASDI and SSI programs. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 1,925. *Frequency of Response:* 1. *Average Burden Per Response:* 30 minutes. *Estimated Annual Burden:* 963 hours. 2. *Questionnaire about Employment or Self-Employment Outside the United States—20 CFR 404.401(b)(1), 404.415, 404.417—0960-0050.* The information collected on the SSA-7163 is needed to determine whether work performed by beneficiaries outside the United States is cause for deductions from their monthly Social Security Title II benefits; to determine which of two work tests (foreign test or regular test) is applicable; and to determine the months, if any, for which deductions should be imposed. The respondents are Title II beneficiaries living and working outside the United States. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 20,000. *Frequency of Response:* 1. *Average Burden Per Response:* 12 minutes. *Estimated Annual Burden:* 4,000 hours. 3. *Medical Permit Parking Application—41 CFR 101-20.104-2—0960-0624.* SSA issues medical parking assignments at SSA-owned and -leased facilities to individuals who have a medical condition which meets the criteria for medical parking. In order to issue a medical parking permit, SSA must obtain medical evidence from the applicant's physician. Form SSA-3192-F4 is used to collect this information. SSA then uses the information to determine whether the individual qualifies for a medical parking permit and whether or not to issue the permit. The respondents are physicians of applicants for medical parking permits. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 800. *Frequency of Response:* 1. *Average Burden Per Response:* 60 minutes. *Estimated Annual Burden:* 800 hours. 4. *Reporting Changes that Affect Your Social Security Payment* —20 CFR 404.301-305, .310-311, .330-.333, .335-.341, .350-.352, .370-.371, 401-.402, .408(a), .421-.425, .428-.430, .434-.437, .439-.441, 446-.447, .450-.455, .468—0960-0073. SSA uses the information collected on Form SSA-1425 to determine continuing entitlement to Title II Social Security benefits and to determine the proper benefit amount. The respondents are Social Security beneficiaries receiving SSA retirement, disability or survivor's auxiliary benefits who need to report an event that could affect payments. *Type of Request:* Revision of an OMB-approved information collection. *Number of Respondents:* 70,000. *Frequency of Response:* 1. *Average Burden Per Response:* 5 minutes. *Estimated Annual Burden:* 5,833 hours. 5. *Disability Hearing Officer's Decision—20 CFR 404.917 and 416.1417—0960-0441.* The Social Security Act requires that SSA provide an evidentiary hearing at the reconsideration level of appeal for claimants who have received an initial or revised determination that a disability did not exist or has ceased. Based on the hearing, the disability hearing officer
(DHO)completes form SSA-1207 and all applicable supplementary forms (which vary depending on the type of claim). The DHO uses the information in documenting and preparing the disability decision. The form will aid the DHO in addressing the crucial elements of the case in a sequential and logical fashion. The respondents are DHOs in the State DDSs. *Type of Request:* Extension of an OMB-approved information collection. *Number of Respondents:* 65,000. *Frequency of Response:* 1. *Average Burden Per Response:* 45 minutes. *Estimated Annual Burden:* 48,750 hours. 6. *Statement for Determining Continuing Eligibility, Supplemental Security Income Payment(s)—20 CFR Subpart B, 416.204—0960-0416.* SSA uses the information collected on form SSA-8203-BK for high-error-profile
(HEP)redeterminations of disability to determine whether SSI recipients have met and continue to meet all statutory and regulatory requirements for SSI eligibility and whether they have been, and are still receiving, the correct payment amount. The information is normally completed in field offices by personal contact (face-to-face or telephone interview) using the automated Modernized SSI Claim System (MSSICS). The respondents are recipients of Title XVI benefits. *Type of Request:* Revision of an OMB-approved information collection. Collection method Number of respondents Frequency of response Average burden per response (minutes) Estimated annual burden (hours) MISSICS 109,012 1 20 36,337 MISSICS/Signature Proxy 36,338 1 19 11,507 Paper 25,650 1 20 8,550 Totals: 171,000 56,394 7. *Information Collections Conducted by State DDSs on Behalf of SSA* —20 CFR 404.1503a, 404.1512, 404.1513404.1512, 404.1513, 404.1514 404.1517, 404.1519; 20 CFR subpart Q, 404.1613, 404.1614, 404.1624; 20 CFR subpart I, 416.903a, 416.912, 416.913, 416.914, 416.917, 416.919 and 20 CFR subpart J, 416.1013, 416.1024, 416.1014—0960-0555. The State DDSs collect certain information that SSA needs to correctly administer its disability program. This information is divided into the Consultative Examination
(CE)and Medical Evidence of Record
(MER)categories. There are three types of CE evidence:
(a)Medical evidence from CE providers, in which DDSs use CE medical evidence to make disability determinations when the claimant's own medical sources cannot or will not provide the required information,
(b)CE claimant completion of a response form where claimants indicate if they intend to keep their CE appointment, and
(c)CE claimant completion of a form indicating whether they want the CE report to be sent to their doctor. In the MER category, the DDSs use MER information to determine a person's physical and/or mental status prior to making a disability determination. Please note that for the first time, some of the information included in this collection can be submitted electronically through the new Electronic Records Express
(ERE)systems. The respondents are medical providers, other sources of MER, and disability claimants. *Type of Collection:* Revision to an existing OMB-approved collection. CE a. Medical Evidence From CE Providers Number of respondents Frequency of response Average burden per response (minutes) Estimated Annual Burden (hours) Paper Submissions 1,215,000 1 30 607,500 ERE Submisions 285,000 1 15 71,250 Totals 1,500,000 678,750 b. Claimants re Appointment Letter *Number of Respondents:* 750,000. *Frequency of Response:* 1. *Average Burden Per Response:* 5 minutes. *Estimated Annual Burden:* 62,500 hours. c. Claimants re Report to Medical Provider *Number of Respondents:* 1,500,000. *Frequency of Response:* 1. *Average Burden Per Response:* 5 minutes. *Estimated Annual Burden:* 125,000 hours. MER: Number of respondents Frequency of response Average burden per response (minutes) Estimated annual burden (hours) Paper submissions 2,480,800 1 15 620,200 C/D (Connect Direct, commercially available software used for electronically transferring medical records) 218,400 1 15 54,600 ERE 100,800 7 11,760 Totals 2,800,000 686,560 Dated: March 8, 2007. Elizabeth A. Davidson, Reports Clearance Officer, Social Security Administration. [FR Doc. E7-4654 Filed 3-14-07; 8:45 am] BILLING CODE 4191-02-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Public Notice for Waiver of Aeronautical Land-Use Assurance; Rickenbacker International Airport, Columbus, OH AGENCY: Federal Aviation Administration, DOT. ACTION: Notice of intent of waiver with respect to land. SUMMARY: The Federal Aviation Administration
(FAA)is considering a proposal to change a portion of the airport from aeronautical use to non-aeronautical use and to authorize the release of 250.357 acres of vacant airport property currently being used for agricultural purposes for the proposed development of bulk warehouse/distribution facilities as a component of the Rickenbacker Global Logistics Park. The land was acquired by the Rickenbacker Port Authority through Quitclaim Deed dated March 30, 1984 from the Administrator of General Services for the United States of America. There are no impacts to the airport by allowing the airport to dispose of the property. Approval does not constitute a commitment by the FAA to financially assist in the disposal of the subject airport property nor a determination of eligibility for grant-in-aid funding from the FAA. The CRAA will receive $5,383,000 for the parcel. In accordance with section 47107(h) of title 49, United States Code, this notice is required to be published in the **Federal Register** 30 days before modifying the land-use assurance that requires the property to be used for an aeronautical purpose. DATES: Comments must be received on or before April 16, 2007. ADDRESSES: Written comments on the Sponsor's request must be delivered or mailed to: Mary W. Jagiello, Program Manager, Detroit Airports District Office, 11677 South Wayne Road, Suite 107, Romulus, MI 48174. FOR FURTHER INFORMATION CONTACT: Mary W. Jagiello, Program Manager, Federal Aviation Administration, Great Lakes Region, Detroit Airports District Office, DET ADO-608, 11677 South Wayne Road, Suite 107, Romulus, Michigan 48174. Telephone Number (734-229-2956)/FAX Number (734-229-2950). Documents reflecting this FAA action may be reviewed at this same location or at Rickenbacker International Airport, Columbus, Ohio. SUPPLEMENTARY INFORMATION: Following is a legal description of the property situated in the State of Ohio, County of Pickaway, Township of Madison, Section 18, Township 10, Range 21 and Township of Harrison, Section 13, Township 3, Range 22 of the Congress Lands, and being part of (Tract 1) as conveyed to Columbus Municipal Airport Authority by deed of record in Official Record 514, Page 2561, records of the Recorder's Office, Pickaway County, Ohio, being more particularly described as follows: Beginning at the centerline intersection of Airbase road (County Road 237) and Ashville Pike (County Road 28), being an angle point in the said (Tract 1) boundary; Thence North 03°43′38″ East, a distance of 2551.67 feet, along the centerline of said Ashville Pike to a point; Thence the following three
(3)courses and distances on, over and across the said (Tract 1): 1. South 86°24′00″ East, a distance of 2692.98 feet, to a point; 2. North 03°47′28″ East, a distance of 93.39 feet, to a point; 3. South 86°24′00″ East, a distance of 1564.12 feet, to an angle point in said (Tract 1) boundary, being the northwest corner of a 201.7757 acre tract conveyed to The Landings at Rickenbacker, LLC by deed of record in Official Record 263, Page 721; Thence South 03°36′05″ West, a distance of 2603.18 feet, along the westerly line of said 201.7757 acre tract a line common to said (Tract 1) to the southwest corner of said 201.7757 acre tract, said corner being in the centerline of said Airbase Road; Thence North 86°35′17″ West, a distance of 1572.77 feet, along the centerline of said Airbase Road and the southerly line of said (Tract 1) to a point at the intersection with Lockbourne Eastern Road (Township Road 31), being in the line between Madison and Harrison Townships; Thence North 87°10′55″ West, a distance of 2690.50 feet, continuing the centerline of said Airbase Road and the southerly line of said (Tract 1) to the Point of Beginning, containing 250.357 acres, more or less. The bearings shown herein are based on the bearing of North 87°10′55″ West for the centerline of Airbase Road being the most southerly boundary line of the 2995.065 acre (981.384 acre Pickaway County) (Tract 1). Issued in Romulus, Michigan, on February 28, 2007. Irene R. Porter, Manager, Detroit Airports District Office, FAA, Great Lakes Region. [FR Doc. 07-1204 Filed 3-14-07; 8:45 am]
Connectionstraces to 38
Traces to 38 documents
CFR
- Expiration and termination of licenses and decommissioning of sites and separate buildings or outdoor areas.§ 70.38
- Filing of documents.§ 2.302
- Formal requirements for documents; signatures; acceptance for filing.§ 2.304
- Hearing requests, petitions to intervene, requirements for standing, and contentions.§ 2.309
- Selection of hearing procedures.§ 2.310
- Public inspections, exemptions, requests for withholding.§ 2.390
- Contents of applications.§ 70.22
- Relief from fingerprinting and criminal history records check for designated categories of individuals permitted unescorted access to certain radioactive materials or other property.§ 73.61
- Orders.§ 2.202
- Communications.§ 73.4
- Purpose and scope.§ 16.30
- Relief from fingerprinting, identification and criminal history records checks and other elements of background checks for designated categories of individuals.§ 73.59
- Issuance of amendment.§ 50.92
- Notice for public comment; State consultation.§ 50.91
- Determination of exclusion area, low population zone, and population center distance.§ 100.11
- Occupational dose limits for adults.§ 20.1201
- Accident source term.§ 50.67
- Criterion for categorical exclusion; identification of licensing and regulatory actions eligible for categorical exclusion or otherwise not requiring environmental review.§ 51.22
- Technical specifications.§ 50.36
- Changes, tests, and experiments.§ 50.59
- Delegation of authority to Director of Division of Trading and Markets.§ 200.30-3
- Distribution, consolidation, dissemination, and display of information with respect to quotations for and transactions in NMS stocks.§ 242.603
- Responsibility for evidence.§ 404.1512
- What are the responsibilities of your representative payee?§ 404.2035
- Earnings reported without a social security number or with an incorrect employee name or social security number.§ 422.120
- Reconsideration procedures.§ 404.913
- Deduction, reduction, and nonpayment of monthly benefits or lump-sum death payments.§ 404.401
- Disability hearing—disability hearing officer's reconsidered determination.§ 404.917
- Who makes disability and blindness determinations.§ 404.1503
U.S. Code
- Unsworn declarations under penalty of perjury§ 1746
- Registration, responsibilities, and oversight of self-regulatory organizations§ 78s
- Definitions and application§ 78c
- Periodical and other reports§ 78m
- National securities exchanges§ 78f
- National market system for securities; securities information processors§ 78k–1
- Public information; agency rules, opinions, orders, records, and proceedings§ 552
- Short title§ 78a
- Definitions§ 80b–2
19 references not yet in our index
- 10 CFR 51
- 10 CFR 2
- 10 CFR 70
- 10 CFR 30
- 10 CFR 36
- 88 Stat. 1244
- 10 CFR 32
- 10 CFR 35
- 10 CFR 50
- 10 CFR 20
- 29 CFR 4006
- 29 CFR 4281
- 29 CFR 4044
- 17 CFR 240.19
- 15 USC 80a
- Pub. L. 104-13
- 20 CFR 404.917-404
- 41 CFR 101
- 20 CFR 404.301-305
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Notices
Notice of license renewal application, and opportunity to request a hearing
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