[Federal Register: February 15, 2007 (Volume 72, Number 31)]
[Notices]
[Page 7468-7476]
[DOCID:fr15fe07-100]

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DEPARTMENT OF LABOR

Occupational Safety and Health Administration

[Docket No. OSHA-2006-0050]

Nationally Recognized Testing Laboratories; Revised Fee Schedule

AGENCY: Occupational Safety and Health Administration (OSHA), Labor.

ACTION: Notice.

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SUMMARY: This notice provides the revised schedule of fees to be
charged by the Occupational Safety and Health Administration (OSHA) to
Nationally Recognized Testing Laboratories (NRTLs). OSHA charges fees
for specific types of services it provides to NRTLs. The fees charged
to NRTLs first went into effect on October 1, 2000.

DATES: The Fee Schedule will become effective on February 15, 2007.

FOR FURTHER INFORMATION CONTACT: MaryAnn Garrahan, Director, Office of
Technical Programs and Coordination Activities, NRTL Program,
Occupational Safety and Health Administration, U.S. Department of
Labor, 200 Constitution Avenue, NW., Room N3655, Washington, DC 20210,
or phone<PHONE_NUMBER>. Our Web page includes information about the
NRTL Program (see http://www.osha.gov and select ``N'' in the site

index).

SUPPLEMENTARY INFORMATION:

I. Notice and Introduction

    The Occupational Safety and Health Administration (OSHA) hereby
gives notice that it has revised the fees that the Agency charges for
the services it provides to Nationally Recognized Testing Laboratories
(NRTLs). OSHA is taking this action as a result of its process for
annually reviewing the fees, as provided under 29 CFR 1910.7(f). This
review showed that the costs of providing the services covered by the
fees had changed sufficiently to warrant adjustments to the fee
schedule, which had been in effect since January 2002. The notice to
propose the revised fees was published in the Federal Register on
December 20, 2006 (71 FR 76365). That notice requested submission of
comments by January 4, 2007. No comment was received. The notice also
stated that the fees would go into effect on February 5, 2007; OSHA,
however, has changed the effective date of the fee increase. As set
forth above, the new fee schedule is effective February 15, 2007.
    You may obtain or review documents related to the establishment of
the fees by contacting the Docket Office, Room N2625, Occupational
Safety and Health Administration, U.S. Department of Labor, at the
above address. Docket No. OSHA-2006-0050 (formerly, NRTL95-F-1),
contains all materials in the record concerning OSHA's NRTL Program
fees.
    The fee adjustments described in this notice are based on the
current approach for calculating fees, which is the same approach OSHA
used in developing the first fee schedule (effective October 1, 2000).
OSHA is also in the process of developing a new approach to calculating
fees that would more accurately recoup the total costs of the services
OSHA provides to NRTLs. The Agency will be proposing this new approach,
and seeking comments on it, in a Federal Register notice to be
published at a later date.

II. Background

    Many of OSHA's safety standards require that equipment or products
used in the workplace be tested and certified to help ensure they can
be used safely. See, e.g., 29 CFR 1910, Subpart S. In general, this
testing and certification must be performed by a Nationally Recognized
Testing Laboratory (NRTL). In order to ensure that the testing and
certification is done appropriately, OSHA implemented the NRTL Program.
The NRTL Program establishes the criteria that an organization must
meet in order to be and remain recognized as an NRTL.
    The NRTL Program requirements are set forth under 29 CFR 1910.7,

``Definition and requirements for a nationally recognized testing
laboratory.'' To be recognized by OSHA, an organization must: (1) Have
the appropriate capability to test, evaluate, and approve products to
assure their safe use in the workplace; (2) be completely independent
of the manufacturers, vendors, and major users of the products for
which OSHA requires certification; (3) have internal programs that
ensure proper control of the testing and certification process; and (4)
have effective reporting and complaint handling procedures.
    OSHA requires NRTL applicants (i.e., organizations seeking initial
recognition as NRTLs) to provide detailed and comprehensive information
about their programs, processes, and procedures in writing when they
apply. OSHA reviews the written information and conducts an on-site
assessment to determine whether the organization meets the requirements
of 29 CFR 1910.7. OSHA uses a similar process when an NRTL (i.e., an
organization already recognized) applies for expansion or renewal of
its recognition. In addition, the Agency conducts annual audits to
ensure that the recognized laboratories maintain their programs and
continue to meet the recognition requirements. Currently, there are 18
NRTLs operating over 50 recognized sites in the U.S., Canada, Europe,
and the Far East.

III. Program Costs and Fee Calculation

    To understand the adjustments we have made to the fee schedule,
Section A discusses the derivation of the hourly rate we used to assess
the fees. Section B discusses changes we made to the estimate of
activity times and briefly describes new chargeable activities for the
services to NRTLs. Section C details new activity costs.

A. Derivation of Hourly Rate (ECR)

    In preparing the fee schedule presented in this notice, OSHA has
updated its calculation of the total resources that it has committed to
the NRTL Program overall and has then computed the costs that are
involved solely with the application approval and the periodic review
(i.e., audit) functions.
    OSHA calculates the fees for these services by multiplying an
equivalent average direct staff cost per hour rate (ECR) by the time it
takes to perform the activities involved in application processing or
audit functions. Simply put,

Fee for activity = ECR x Time for activity.

    OSHA derives the ECR by taking the total estimated direct and
indirect costs of the program, consisting of personnel costs (salary
and fringe) and office expenses, but excluding travel, and dividing
that total by the total available annual work hours of the direct staff
devoted to all the NRTL Program activities, i.e., the number of full-
time equivalent (FTE) personnel.\1\ Illustrated as an equation:

    \1\ In discussing total hours in this notice, we often refer to
FTEs which stands for full-time equivalents and equals total hours
dividedby 2,080, the total available annual work hours for one full-
time employee.

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ECR = TPC / TAW,

where TPC is the total estimated direct and indirect program costs
(excluding travel) and TAW is the total available annual work hours of
the direct staff.
    Figure 1, below, represents OSHA's TPC of providing the services
for which we charge fees and shows the calculation of the ECR. As a
result of our adjustments, our base hourly rate for calculating our
fees, i.e., the ECR, has increased approximately 17% above the previous
level, from $54.50 to $63.80. The $54.50 is the rate that was derived
using 2002 projected staff salary and fringe, and other program costs.
It is the rate contained in the prior fee schedule (effective January
1, 2002), which is now superseded by the fee schedule shown in this
notice. The 17% increase mainly reflects annual salary adjustments
provided to Federal employees that have accumulated since the revision
in 2002. The Agency believes these costs are fair and reasonable.

                                  Figure 1.--NRTL Program Annual Cost Estimates
----------------------------------------------------------------------------------------------------------------
                                                                                Avg. cost per
                                                                                FTE
                        Cost description                                FTE         (including      Total costs
                                                                                fringe)
----------------------------------------------------------------------------------------------------------------
Direct Staff Costs..............................................            5.24        $110,743        $580,294
Indirect Staff & Other Costs....................................              na              na        *115,130
    Subtotal Costs..............................................  ..............  ..............         695,424
Travel Expenses.................................................              na              na          60,000
                                                                 -----------------------------------------------
        Total Program Costs.....................................  ..............  ..............         755,424
----------------------------------------------------------------------------------------------------------------
 Avg. direct staff cost/hr. = $580,294/(5.24 FTE x 2,080 hours) = $53.20.
ECR = Equivalent avg. direct staff cost/hr. rate = $695,424/(5.24 FTE x 2,080 hours) = $63.80 (includes direct &
  indirect costs but not travel).
* This amount consists of $60,150 for management and support staff and $54,980 for equipment and other costs.

    In Figure 1, Direct Staff Costs are personnel costs for the staff
that perform direct activities (i.e., the services, such as the
application, on-site and legal reviews, and other activities involved
in application processing and audits) as well as activities not
directly connected to the fees. Indirect Staff and Other Costs are
expenses for support and management staff, equipment, and other costs
that are involved in the operation of the program. Support and
management staff consists of program management and secretarial staff.
Equipment and other costs are intended to cover items such as
computers, telephones, building space, utilities, and supplies, which
are necessary to perform the services covered by the fees. In general,
indirect costs, by their very nature, are not readily identified with a
specific output (in the present context, a specific activity) but are
used in producing it. They are allocated to the application processing
and audit activities based on direct staff costs. Travel Expenses shown
in the figures are estimates of the costs we incur for travel related
to the services that are covered by the fees. However, this amount is
not included in the ECR since we charge for the actual staff travel
expenses of the on-site visits performed by our program staff. In
Figure 1, the travel expenses figure is presented only to show total
program costs.
    The use of an ``equivalent average direct staff cost per hour
rate'' (ECR) measure is a convenient method of

allocating indirect costs to each of the services for which OSHA is
charging fees. The same result is obtained if direct staff costs are
first calculated and then indirect costs are allocated based on the
value, i.e., dollar amount, of the direct staff costs, which is an
approach that is consistent with Federal accounting standards.
    To illustrate this, assume that a direct staff member spends 10
hours on an activity; the direct staff costs would then be calculated
as follows: Direct staff costs = 10 hours x $53.20/hour = $532.

The $53.20/hour is the average direct staff cost/hour amount shown in
Figure 1. The indirect costs would be allocated by first calculating
the ratio of indirect costs to direct staff costs, again using the
costs shown in Figure 1. This ratio would be as follows: Indirect
costs/direct staff costs = $115,130/$580,294 = 0.1984.

Next, the indirect costs would be calculated based on the $532 estimate
of direct staff costs: Indirect costs = $532 x 0.1984 = $106.
inally, the total costs of the activity are calculated: Total costs =
direct staff costs + indirect costs = $532 + $106 = $638.

We derive the same amount using the ECR of $63.80, i.e., 10 hours x
$63.80/hour = $638.

B. Modified Activity Times and Additional Activities

    In addition to updating the ECR, the Agency has updated estimates
of the average staff time that it spends on some specific activities or
functions of the services covered by the fees. The staff activity times
we updated resulted in a portion of the adjustments in the Fee Schedule
(Table A below). OSHA previously developed these times for each major
activity within the main types of services, which are application
processing and audits.
    For application processing, OSHA has increased the average staff
activity time in the areas of the on-site assessment and the final
report/Federal Register notice activities. In the first case, the
increase mainly reflects the time necessary for making travel
arrangements and, in the second case, mainly reflects the separate time
necessary for the preparation of the notice. For audits, OSHA has
increased the average staff activity time in the areas of the pre-site
review and report preparation activities, each for similar reasons as
the corresponding application activities just described. In addition,
in both cases, we now charge for actual travel time (i.e., time in
travel to and from sites), which replaces the nominal 4 hours that was
included in the first day fee for assessments and audits of the prior
fee schedule.
    OSHA also is now charging for some additional activities it
performs during application processing and audits. These activities are
for Additional Application Review, Supplemental Program Review, and
Invoice Processing. Section IV of this notice further explains these
activities and the modifications mentioned above. The revised fees
reflect the Agency's experience with the NRTL Program fees over the
four years since OSHA published the prior fee schedule.

C. Tables of Activity Costs

    Figures 2, 3, 4, and 5, below, present the costs of the major
activities for which fees are charged. We include average travel costs
in the figures below to provide an overall cost for a particular
activity. However, as explained above, since we charge for actual
travel, only the non-travel costs serve as the basis for the fees later
shown in the Fee Schedule (Table A). In deriving the fee amounts shown
in Table A, OSHA has generally rounded the costs shown in Figures 2, 3,
4, and 5, up or down, to the nearest $5 or $10 amount.

                                  Figure 2.--Initial Application Cost Estimates
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               Major activity                            Type of cost              Average hours   Average cost*
----------------------------------------------------------------------------------------------------------------
Initial Application Review.................  Office and field staff time........              80          $5,100
Additional Review Time.....................  Office staff.......................              16           1,020
On-Site Assessment--first day (per site,     field staff time (16 hours                       30           1,914
 per assessor).                               preparation, 6 hours travel
                                              processing, and 8 hours at site).
                                             Field staff travel expense ($700                \1\             800
                                              airfare/other + $100 per diem).
                                                                                -------------------------------
                                              Total.............................  ..............           2,714
On-Site Assessment--each addnl. day** (per   field staff time (at site).........               8             510
 site, per assessor).
                                             Field staff travel expense (per                 \1\             100
                                              diem only).
                                                                                -------------------------------
                                              Total.............................  ..............             610
On-Site Assessment travel time--per day      field staff........................               8             510
 (per site, per assessor).
Review and Evaluation (10 test standards)..  Office staff time..................               2             128
Final Report & Federal Register notice.....  field and office staff time........             132           8,422
Fees Invoice Processing....................  Office staff time..................               2            128
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* Average cost for staff time = average hours x equivalent average direct staff cost/hr. ($63.80).
** Note: 2 additional days estimated if there are 2 assessors and 4 additional days estimated if there is 1
  assessor.
\1\ Not applicable.

                        Figure 3.--Expansion Application (Additional Site) Cost Estimates
----------------------------------------------------------------------------------------------------------------
               Major activity                            Type of cost              Average hours   Average cost*
----------------------------------------------------------------------------------------------------------------
Application Review (expansion for site)....  Office and field staff time........              16          $1,021
Additional Review Time.....................  Office staff.......................               8             510
On-Site Assessment--first day (per site,     field staff time (12 hours                       24           1,531
 per assessor).                               preparation, 4 hours travel
                                              processing, and 8 hours at site).

                                             field staff travel time expense                 \1\             800
                                              ($700 airfare/other + $100 per
                                              diem).
                                                                                -------------------------------
                                              Total.............................  ..............           2,331
On-Site Assessment--addnl. day** (per site,  field staff time (at site).........               8             510
 per assessor).
                                             field staff travel expense (per                 \1\             100
                                              diem only).
                                              Total.............................  ..............             610
                                                                                -------------------------------
On-Site Assessment travel time--per day      field staff........................               8             510
 (per site, per assessor).
Review and Evaluation Fee (10 test           office staff time..................               2             128
 standards).
Final Report & Federal Register notice.....  Field and office staff time........              50           3,190
Fees Invoice Processing....................  Office staff time..................               2            128
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* Average cost for staff time = average hours x equivalent average direct staff cost/hr. (63.80).
** Note: 2 additional days estimated for 1 assessor.
\1\ Not applicable.

Figure 4.--Renewal Or Expansion (Other Than Additional Site) Application
                             Cost Estimates
------------------------------------------------------------------------
                                                     Average    Average
       Major activity             Type of cost        hours      cost*
------------------------------------------------------------------------
Application Review (renewal   Office and field              2       $128
 or expansion other than       staff time.
 additional site).
Additional Review Time......  Office staff........          8        510
Renewal Application           Office staff........         16      1,021
 Information Review.
On-Site Assessment--first     field staff time (8          20      1,276
 day (expansion) (per site,    hours preparation,
 per assessor).                4 hours travel
                               processing, and 8
                               hours at site).
                              field staff travel          \3\        800
                               expense ($700
                               airfare/other +
                               $100 per diem).
                               Total..............  .........      2,076
On-Site Assessment--first     field staff time (16         28      1,787
 day (renewal) (per site,      hours preparation,
 per assessor).                4 hours travel
                               processing, and 8
                               hours at site).
                              field staff travel          \3\        800
                               expense ($700
                               airfare/other +
                               $100 per diem).
                                                   ---------------------
                               Total..............  .........      2,587
On-Site Assessment--addnl.    Office staff time             8        510
 day** (per site, per          (at site).
 assessor).
                              field staff travel          \3\        100
                               expense (covers per
                               diem only).
                                                   ---------------------
                               Total..............  .........        610
On-Site Assessment travel     field staff.........          8        510
 time--per day (per site,
 per assessor).
Review and Evaluation Fee     Office staff time...          2        128
 (10 test standards)
 (expansion).
Final Report & Federal        Office and field             50      3,190
 Register notice.              staff time (if
                               there is an on-site
                               assessment).
Final Report & Federal        Office and field             30      1,914
 Register notice.              staff time (if
                               there is NO on-site
                               assessment).
Supplemental Program Review.  Office and field              4        255
                               staff time (per
                               program requested
                               incl. consultation
                               and assessor's
                               memo).
Fees Invoice Processing.....  Office staff time...          2       128
------------------------------------------------------------------------
* Average cost for staff time = average hours x equivalent average
  direct staff cost/hr. ($63.80).
** Note: 2 additional days estimated for renewal assessment; no
  additional days for expansion assessment.
\3\ Not applicable.

                 Figure 5.--On-Site Audit Cost Estimates
------------------------------------------------------------------------
                                                     Average    Average
       Major activity             Type of cost        hours      cost*
------------------------------------------------------------------------
On-Site Audit--first day      Field staff time (12         24     $1,531
 (per site, per auditor).      hours pre-site
                               review preparation,
                               4 hours travel
                               processing, and 8
                               hours at site).
                              Prepare report/              18      1,148
                               contact NRTL plus
                               office review staff
                               time (2 days for
                               field staff and 2
                               hours for office
                               staff).
                              Subtotal (first day)  .........      2,679
                                                   ---------------------
                              Field staff travel          \4\        800
                               expense ($700
                               airfare/other +
                               $100 per diem).
                                                   ---------------------
                              Total...............  .........      3,479

On-Site Audit--addnl. day **  field staff time (at          8        510
 (per site, per auditor).      site).
                              Travel expense              \4\        100
                               (covers per diem
                               only).
                                                   ---------------------
                              Total...............  .........        610
On-Site Audit travel time--   Field staff.........          8        510
 per day (per site, per
 auditor).
Fees Invoice Processing.....  Office staff time...          2        128
------------------------------------------------------------------------
*Average cost for staff time = average hours x equivalent average direct
  staff cost/hr. ($63.80) **Note: 1.0 additional day estimated for 1
  auditor.
\4\ Not applicable.

IV. Fee Schedule and Description of Fees

    OSHA is adopting the fee schedule shown below as Table A.

Table A. FEE SCHEDULE

 NATIONALLY RECOGNIZED TESTING LABORATORY PROGRAM (NRTL PROGRAM) FEE SCHEDULE (EFFECTIVE FEBRUARY 15, 2007) \12\
----------------------------------------------------------------------------------------------------------------
                                    Activity or category (fee charged per application
         Type of service                         unless noted otherwise)                        Fee amount
----------------------------------------------------------------------------------------------------------------
APPLICATION PROCESSING..........  Initial Application Review \1,8\.....................  $5,100.
                                  Expansion Application Review (per additional site) 1,  1,020.
                                   8.
                                  Renewal or Expansion (other) Application Review \1\..  130.
                                  Renewal Information Review Fee \7\...................  1,020.
                                  Additional Review--Initial Application (if the         1,020.
                                   application is substantially revised, submit one-
                                   half Initial Application Review fee) \7\.
                                  Additional Review--Renewal or Expansion Application    510.
                                   \7\.
                                  Assessment--Initial Application (per site--SUBMIT      8,890.
                                   WITH APPLICATION) 2, 4, 8.
                                  Assessment--Initial Application (per person, per       1,910 + actual travel
                                   site--first day--BILLED AFTER ASSESSMENT) 2, 10.       expenses.
                                  Assessment--Renewal Application (per person, per       1,790 + actual travel
                                   site--first day) 3, 10.                                expenses.
                                  Assessment--Expansion Application (additional site)    1,530 + actual travel
                                   (per person, per site--first day) \3\.                 expenses.
                                  Assessment--Expansion Application (other) (per         1,280 + actual travel
                                   person, per site--first day) \3\.                      expenses.
                                  Assessment--each addnl. day or each day on travel      510 + actual travel
                                   (per person, per site) 2, 3.                           expenses.
                                  Review and Evaluation \5\ (13 per standard if it is    13 per standard OR 64
                                   already recognized for NRTLs and requires minimal      per standard.
                                   review; OR else 64 per standard).
                                  Final Report/Register Notice--Initial Application 5,   8,420.
                                   9.
                                  Final Report/Register Notice--Renewal or Expansion     3,190.
                                   Application (if OSHA performs on-site assessment) 5,
                                   9.
                                  Final Report/Register Notice--Renewal or Expansion     1,910.
                                   Application (if OSHA performs NO on-site assessment)
                                   5, 9.
AUDITS..........................  On-site Audit (per person, per site, first day) \6\..  2,680 + actual travel
                                                                                expenses.
                                  On-site Audit--each addnl. day or each day on travel   510 + actual travel
                                   (per person, per site) \6\.                            expenses.
                                  Office Audit (per person, per site) \6\..............  510.
MISCELLANEOUS...................  Supplemental Travel (per site--for sites located       1,000.
                                   outside the 48 contiguous States or the District of
                                   Columbia) \4\.
                                  Supplemental Program Review (per program requested)    260.
                                   \4\.
                                  Fees Invoice Processing (per application or audit)     130.
                                   \4\.
                                  Late Payment \11\....................................  64.
----------------------------------------------------------------------------------------------------------------
Notes to OSHA Fee Schedule for NRTLs:
1. Who must pay the Application Review fees, and when must they be paid?
If you are applying for initial recognition as an NRTL, you must pay the Initial Application Review fee and
  include this fee with your initial application. If you are an NRTL and applying for an expansion or renewal of
  recognition, you must pay the Expansion Application Review fee or Renewal Application Review fee, as
  appropriate, and submit this fee concurrently with your expansion or renewal application. See note 7 if you
  amend or revise your initial or expansion application.
2. What assessment fees do you submit for an initial application, and when must they be paid?

If you are applying for initial recognition as an NRTL, you must pay $8,890 for each site for which you wish to
  obtain recognition, and you must submit this amount concurrently with your initial application. We base this
  amount on two assessors performing a three-day assessment at each site. After completing the actual
  assessment, we calculate our assessment fee based on the actual staff time and travel costs incurred in
  performing the assessment. We calculate this fee at the rate of $1,910 for the first day at the site, $510 for
  each additional day at the site, and $510 for each day in travel, plus actual travel expenses, for each
  assessor. (Note: days charged for being in travel status are those allowed under government travel rules. This
  note applies to any assessment or audit.) Actual travel expenses are determined by government per diem and
  other travel rules. We bill or refund the difference between the amount you pre-paid and the actual assessment
  fee. We reflect this difference in the final bill that we send to you at the time we publish the preliminary
  Federal Register notice announcing the application.
3. What assessment fees do you submit for an expansion or renewal application, and when must they be paid?
If you are an NRTL and applying solely for an expansion or renewal of recognition, you do not submit any
  assessment fee with your application. If we need to perform an assessment for the expansion or renewal
  request, we bill you for this fee after we perform the assessment. The fee is based on the actual staff time
  and travel costs we incurred in performing the assessment. We calculate this fee at the rate of $1,790,
  $1,530, or $1,280 for the first day at the site of a renewal, expansion (site), and expansion (other)
  assessment, respectively. We also include $510 for each additional day at the site and $510 for each day in
  travel, plus actual travel expenses, for each assessor. Actual travel expenses are determined by government
  per diem and other travel rules. When more than one site of the NRTL is visited during one trip, we charge the
  $510 additional day fee, plus actual travel expenses, for each day at a site.
4. When do I pay the Supplemental Travel, the Supplemental Program Review, or the Fees Invoice Processing fees?
You must include the Supplemental Travel fee when you submit an initial application for recognition and the site
  you wish to be recognized is located outside the 48 contiguous U.S. states or the District of Columbia. The
  current supplemental travel fee is $1,000. We factor in this prepayment when we bill for the actual costs of
  the assessment, as described in our note 2, above. See note 8 for possible refund of application or assessment
  fees. You must include the Supplemental Program Review fee when you apply for approval to use other qualified
  parties or facilities to perform specific activities. See Chapter 2 of the NRTL Program Directive for more
  information. We will include the Fees Invoice Processing fee in the total for each of our invoices to you.
5. When do I pay the Review and Evaluation and the Final Report/Register Notice fees?
We bill an applicant or an NRTL for the appropriate fees at the time we publish the preliminary Federal Register
  notice to announce the application. We calculate the Review and Evaluation Fee at the rate of $13 per test
  standard requested for those standards that OSHA previously recognized for any NRTL and that require minimal
  review or do not represent a new area of testing for the NRTL. Otherwise, this fee is $64 per standard
  requested.
6. When do I pay the Audit fee?
We bill the NRTL for this fee (on-site or office, as deemed necessary) after completion of the audit and base
  the fee on actual staff time and travel costs incurred in performing the audit. We calculate our fee at the
  rate of $2,680 for the first day at the site, $510 for each additional day at the site, and $510 for each day
  in travel, plus actual travel expenses for each auditor. Actual travel expenses are determined by government
  per diem and other travel rules.
7. When do I pay the Additional Review fee or Renewal Information Review fee?
The Additional Review fees cover the staff time in reviewing new or modified information submitted after we have
  completed our preliminary review of an application. There is no charge for review of a ``minor'' revision,
  which entails modifying or supplementing less than approximately 10% of the documentation in the application.
  The Additional Review fee applies to revisions modifying or supplementing from 10% to 50% of that
  documentation. For a new application, the fee represents 16 hours of additional review time and for a renewal
  or expansion application, the fee represents 8 hours of additional review time. If an applicant exceeds that
  50% threshold in revising its application, we will charge one-half the Initial Application Review fee and the
  full Expansion Application Review fee, as applicable. The Renewal Information Review fee applies when an NRTL
  submits updated information to OSHA in connection with a request for renewal of recognition.
8. When and how can I obtain a refund for the fees that I paid?
If you withdraw before we complete our preliminary review of your initial application or your expansion
  application to include an additional site, we will refund half of the application fee. If you are applying for
  initial recognition as an NRTL, we will refund the pre-paid assessment fees if you withdraw your application
  before we have traveled to your site to perform the on-site assessment. For an initial application, we will
  also credit your account for any amount of the pre-paid assessment fees collected that is greater than the
  actual cost of the assessment. Other than these cases, we do not generally refund or grant credit for any
  other fees that are due or collected.
9. Will I be billed even if my application is rejected?
If we reject your application, we will bill you for the fees pertaining to tasks that we have performed that are
  not covered by the fees you have submitted. For example, if we perform an assessment for an expansion
  application but deny the expansion, we will bill you for the assessment fee. Similarly, we will bill you for
  the Final Report and Federal Register fee if we also wrote the report and published the notice. See note 11
  for the consequences of non-payment.
10. What rate does OSHA use to charge for staff time?
OSHA has estimated an equivalent staff cost per hour that it uses for determining the fees that are shown in the
  Fee Schedule. This hourly rate takes into account the costs for salary, fringe benefits, equipment,
  supervision and support for each ``direct staff'' member, that is, the staff that perform the main activities
  identified in the Fee Schedule. The rate is an average of these amounts for each of these direct staff
  members. The current estimated equivalent staff costs per hour = $63.80.
11. What happens if I do not pay the fees that I am billed?
As explained above, if you are an applicant, we will send you a final bill (for any assessment and for the
  Review and Evaluation and Final Report/Register Notice fees) at the time we publish the preliminary Federal
  Register notice. If you do not pay the bill by the due date, we will assess the Late Payment fee shown in the
  Fee Schedule. This late payment fee represents one hour of staff time at the equivalent staff cost per hour
  (see note 10). If we do not receive payment within 60 days of the bill date, we will cancel your application.
  As also explained above, if you are an NRTL, we will generally send you a bill for the audit fee after
  completion of the audit. If you do not pay the fee by the due date, we will assess the Late Payment Fee shown
  in the Fee Schedule. If we do not receive payment within 60 days of the bill date, we will publish a Federal
  Register notice stating our intent to revoke recognition. However, please note that in either case, you may be
  subject to collection procedures under U.S. (Federal) law.
12. How do I know whether this is the most Current Fee Schedule?
You should contact OSHA's NRTL Program<PHONE_NUMBER>) or visit the program's Web site to determine the effective
  date of the most current Fee Schedule. Access the site by selecting ``N'' in the Subject Index at
  http://www.osha.gov. Any application review fees are those in effect on the date you submit your application. Other

  application processing fees are those in effect when the activity covered by the fee is performed. Audit fees
  are those in effect on the date we begin our audit.

    The following is a description of the tasks and functions currently
covered by each type of fee category, e.g., application fees, and the
basis used to charge each fee.
    Application Fees: This fee reflects the technical work performed by
office and field staff in reviewing application documents to determine
whether an applicant submitted complete and adequate information. The
application review does not include a determination on the test
standards requested, which is reflected in the Review and Evaluation
fee. Application fees are based upon average costs per type of
application. OSHA uses an average cost because the amount of time spent
on the application review does not vary greatly by type of application.
This is based on the premise that the number and type of documents
submitted will generally be the same for a given type of application.
Experience has shown that, indeed, most applicants do follow the
application guide that OSHA provides. Two new fees were added in this
area,

which are explained in the Section VI, below.
    Assessment Fees: This fee is different for the initial, renewal,
expansion (site) and expansion (other) applications. It is based on the
number of days for staff preparatory and on-site work and related
travel. Six types of fees are shown, and five are charged per site and
per person. The four fees for the first day reflect time for office
preparation and 8 hours at the applicant's facility. There is one fee
covering either additional days at the facility and/or days in travel.
Additional days or days in travel are assessed for either a half or a
full day. A supplemental travel amount is assessed for travel outside
the contiguous 48 states or the District of Columbia. For initial
applications, an amount to cover the assessment must be submitted ``up-
front'' with the application. In addition to the first day and
additional day amounts, the applicant or NRTL must pay actual travel
expenses, based on government per diem and travel rules. For initial
applications, any difference between actual travel expenses and the up-
front travel amount is reflected in the final bill or refund sent to
the applicant.
    Similar to the application fee, the office preparation time
generally involves the same types of activities. Actual time at the
facility may vary, but the staff devote at least a full day to
performing the on-site work. The fee for the additional day reflects
time spent at the facility and the actual travel expenses for that day.
    Review and Evaluation Fee: This fee is charged per test standard
(which is part of an applicant's proposed scope of recognition). The
fee reflects the fact that staff time spent on the office review of an
application varies based on the number of test standards requested by
the applicant. In general, the fee is based on the estimated time
necessary to review test standards to determine whether each one is
``appropriate,'' as defined in 29 CFR 1910.7, and covers equipment for
which OSHA mandates certification by an NRTL. The fee also covers time
to determine the current designation and status (i.e., active or
withdrawn) of a test standard by reviewing current directories of the
applicable test standard organization. Moreover, it includes time spent
discussing the results of the application review with the applicant.
The actual time spent will vary depending on whether an applicant
requests test standards that have previously been approved for other
NRTLs. When the review is minimal, these activities take approximately
2 hours for 10 standards. This translates to $13 per standard. When the
review is more substantial, the estimated average review time per
standard is one hour for each standard, which translates to $64 per
standard. Substantial review will occur when the standard has not been
previously recognized for any NRTL or when the NRTL is proposing to
conduct testing in a ``new'' area, i.e., for a type of product not
similar to any currently included under its scope of recognition.
    Final Report/Register Notice Fees: Each of these fees are charged
per application. The fee reflects the staff time required to prepare
the report of the on-site review of an applicant's or an NRTL's
facility, which includes contacting the applicant or NRTL to discuss
issues or items in its response to our findings during our assessment.
The fee also reflects the time spent making the final evaluation of an
application, preparing the required Federal Register notices, and
responding to comments received in response to the preliminary finding
notice. These fees are based on average costs per type of application,
since the type and content of documents prepared are generally the same
for each type of applicant. There is a separate fee when OSHA performs
no on-site assessment. In these cases, the NRTL Program staff perform
an office assessment and prepare a memorandum to recommend the
expansion or renewal.
    Audit (Post-Recognition Review) Fees: These fees reflect the time
for office preparation, time at the facility and travel, and time to
prepare the audit report of the on-site audit. A separate fee is shown
for an office audit conducted in lieu of an actual visit. Each fee is
per site and does not generally vary for the same reasons described for
the assessment fee and because the audit is generally limited to
between one and two days. As previously described, the audit fee
includes amounts for travel, and, similar to assessments, OSHA will
bill the NRTL for actual travel expenses.
    Miscellaneous Fees: Four different fees are shown under this
category. OSHA can charge a Late Payment fee if an invoice is not paid
by the due date. This amount represents 1 hour of staff time for
contacting the NRTL and preparing a late invoice and cover letter. The
Supplemental Travel fee applies per site for an initial application if
the site to be recognized is located outside the 48 contiguous U.S.
states or the District of Columbia. The fee is $1,000. We added two new
miscellaneous fees, which are explained in Section VI, below.

VI. Major Changes to the Fee Schedule

    The following table shows the major adjustments (i.e., increases or
decreases of $100 or more) that we made to the fee schedule in Table A
as compared to the prior fee schedule, which had been in effect since
January 1, 2002. Following the table, we explain each of the major
adjustments.

                                   Table of Major Adjustments to Fee Schedule
----------------------------------------------------------------------------------------------------------------
                                                      Prior fee    Present fee
         Description of activity or category            amount       amount      Comment on change in fee amount
----------------------------------------------------------------------------------------------------------------
Initial Application Review..........................     $4,400          $5,100  none
Expansion Application Review........................        850           1,020  none
Additional Review--Initial Application..............        \1\           1,020  new fee
Renewal Application Information Review..............        \1\           1,020  new fee
Additional Review--Renewal or Expansion Application.        \1\             510  new fee
Assessment--Initial Application (SUBMIT WITH              6,500           8,890  none
 APPLICATION).
Assessment--Initial Application (per person, per          1,500           1,910  none
 site--first day--BILLED AFTER ASSESSMENT).
Assessment--Renewal Application (per person, per          1,100           1,790  currently combined with
 site--first day).                                                                expansion assessment fee
Assessment--Expansion (additional site) (per person,      1,100           1,530  currently combined with renewal
 per site--first day).                                                            assessment fee
Assessment--Expansion (other) (per person, per site--     1,100           1,280  currently combined with renewal
 first day).                                                                      assessment fee

Assessment--each addnl. day OR travel time--each day        440             510  only 4 hours of travel time
 (per person, per site).                                                          currently charged through the
                                                                                first day fee for assessments
Review & Evaluation.................................     \2\ 10          \3\ 13  correction of undercharge per
                                                                                ten standards: $130 x $10 =
                                                                                $120
Final Report/Register Notice--Initial Application...      6,550           8,420  none
Final Report/Register Notice--Renewal or Expansion        2,600           3,190  none
 Application (if OSHA performs on-site assessment).
Final Report/Register Notice--Renewal or Expansion        1,500           1,910  none
 Application (if OSHA performs NO on-site
 assessment).
On-site Audit (first day)...........................      1,950           2,680  none
Supplemental Program Review.........................        \1\             260  new fee
Fees Invoice Processing.............................        \1\             130  new fee
----------------------------------------------------------------------------------------------------------------
\1\ None.
\2\ Per ten standards.
\3\ Per standard.

    Application and Assessment. The increase in the application review
fees, the assessment-related fees, and the final report/register notice
fees resulted primarily from the increase in the hourly cost charged
for the direct staff time. The audit-related fees also increased in
part for the same reason but also because we added 4 hours for the pre-
site review of each audit and 14 hours for the preparation of the audit
report. These extra audit-related hours are reflected in Figure 5. In
our prior fee schedule, we had a fee for Assessment--Expansion or
Renewal Application (first day). Under the new schedule, we replace
this with a separate assessment fee for renewals and a separate fee for
each type of expansion.
    Travel. We changed our treatment of ``travel time,'' which is time
in travel to and from a site, as opposed to audit or assessment time at
a site. Travel time is determined following government travel
regulations. The prior fee schedule included only 4 hours of travel
time for an entire trip, which was reflected in the first day fee for
assessments and audits. As explained in the notes to the fee schedule,
we have now removed the 4-hour travel time from these first day fees
and charge for actual travel time at the rate for an additional day,
which under the new schedule would be $510. This rate would be charged
based on either a half-day or a full day. We are charging this fee
separately, as opposed to including it in the first day flat fee, in
order to more accurately recoup our travel costs. For example, if a
trip for an audit lasts a total of three days, with two of those days
spent at the site, we previously charged the lab for 2.5 workdays (20
hours). Under the new schedule, we are charging for 3 workdays (24
hours). This charge is most important in the case of foreign travel
where travel time may be 2 or 3 days in total. Of course, the removal
of the 4 hours of travel time from the first day of an assessment or of
an audit reduces those fees.
    Additional Application Review. The new Additional Review fees cover
the staff time in reviewing new or modified information submitted for
an application. For example, an applicant may need to revise or amend
an initial or expansion application if we find that there are ``major''
deficiencies with it. There is no charge for review of a ``minor''
revision, which as Note 7 to the Fee Schedule describes, entails
modifying or supplementing less than approximately 10% of the
documentation in the application. The Additional Review fee applies to
revisions modifying or supplementing from 10% to 50% of that
documentation. For a new application, the fee represents 16 hours of
additional review time and for a renewal or expansion application, the
fee represents 8 hours of additional review time. If an applicant
exceeds that 50% threshold in revising its application, we will charge
one-half the Initial Application Review fee and the full Expansion
Application Review fee, as applicable. The Renewal Information Review
fee applies when an NRTL submits updated information to OSHA in
connection with a request for renewal of recognition. For example, such
information may include revised procedures and manuals for various
parts of its testing and certification activities.
    Supplemental Program Review and Fees Invoice Processing. There are
two more new fees, which will recoup costs for tasks we now perform in
application processing and/or audits, but for which we had not been
charging. The first fee, Supplemental Program Review, covers the time
to review requests by NRTLs to use a supplemental program, under which
NRTLs can use other qualified parties to perform tasks necessary for
product testing and certification. Currently, there are eight of these
programs, and NRTLs may apply to use one or more of them. The use of
the term ``program'' in this context may be a bit misleading. It is not
separate from, but just a segment within, the NRTL Program and defines
the category or type of activity or service that the NRTL can accept
from other parties or facilities. To be approved to use a program, the
NRTL must meet certain criteria and the fee covers the time for us to
make the office review and determination. If an on-site assessment were
needed as part of granting the approval, this would be covered
separately in the fee for the on-site assessment or audit during which
we review documentation or other operational aspects related to a
proposed use of the applicable program(s). The second fee is Fees
Invoice Processing, which also involves tasks directly related to the
application processing or audit activities and for which we have not
been recouping costs. We follow essentially the same process to prepare
each invoice for either an application or an audit and would thus
charge per invoice prepared.
    Review and Evaluation Fee. The increase in the Review and
Evaluation Fee is primarily a correction to the basis we used in the
current fee schedule. In both cases, we base the fee on performing two
separate reviews of 10 standards in 2 hours. However, the current fee
schedule incorrectly reflects a $10 cost for those 2 hours. Since the
prior hourly rate had been $54.50, this means the prior fee was
understated by

about $100 per ten standards (i.e., it should have been $109 per 10
standards, but we only charged $10 per 10 standards). At the new hourly
rate, those 2 hours would result in a cost of $130 for the 10 standards
or $13 per standard.
    Notes to the Fee Schedule. We have also changed a few of the notes
to the fee schedule. In the table below, we show the notes that we have
modified or added and explain why. Adjustments that merely updated a
fee amount mentioned in a note are not explained or described in the
table below.

                               Table of Modified or New Notes to the Fee Schedule
----------------------------------------------------------------------------------------------------------------
 Note to fee  dchedule    Fee or area covered by note            Reason(s) for modifying or adding note
----------------------------------------------------------------------------------------------------------------
2......................  Initial application           This note now also describes the separate charge for
                          assessment.                   staff travel time.
3......................  Expansion or renewal          This note now also describes the separate charge for
                          assessment.                   staff travel time and shows the different first day fees
                                                        for renewal and expansion assessments.
4......................  Supplemental travel.........  This note mentions possible refund of application fees.
                                                        It also describes the new Supplemental Program Review
                                                        and Fees Invoice Processing fees.
5......................  Review and evaluation.......  We corrected the basis for charging this fee, as
                                                        explained in the section above.
6......................  Audit.......................  This note now also describes the separate charge for
                                                        staff travel time.
7......................  Additional review...........  Note 7 previously covered refund of fees and now would
                                                        cover the fee for additional reviews of applications.
8......................  Refunds.....................  This note would permit refunds of half the application
                                                        fee if an applicant withdraws its initial or expansion
                                                        (additional site) application before we complete our
                                                        preliminary review. Note 8 previously covered the hourly
                                                        rate for staff time, which is now under Note 10.
9......................  Application rejection.......  Note 9 previously covered non-payment of fees and now
                                                        would cover the new area of fees due if we were to
                                                        reject an application.
11.....................  Non-payment.................  Note 11 is new. This area was previously covered under
                                                        Note 9 and now would include a statement about
                                                        collection procedures under U.S. (Federal) law.
12.....................  Fees in effect..............  Note 12 is new. This area was previously covered under
                                                        Note 10 and now would include a note primarily to change
                                                        the ``in-effect'' criterion for certain application
                                                        processing fees.
----------------------------------------------------------------------------------------------------------------

    Finally, we are explaining again a matter dealing with the fee for
Review and Evaluation, which was addressed when revising our fees in
2002. We revisit it here to clarify one aspect of our work involved in
this activity. NRTLs submit requests to expand their scope to include
additional test standards, i.e., testing of additional types of
products. Generally, this request has consisted of a listing of the
test standards. If we determine that the products requested are similar
to products already in the particular NRTL's scope, the testing falls
within its current capabilities, and no additional documentation needs
to be reviewed. In that case, the NRTL is charged the new fee of $13
per standard requested. However, if the NRTL requests a standard that
represents a new area of testing outside its scope, then it must submit
information on the testing equipment and procedures it will use as well
as the qualifications of personnel that will perform the testing. In
that case, the charge will be $64 per standard, representing an average
of 1 hour to review the information that must be submitted. Similarly,
if OSHA has not previously recognized a particular standard for any
NRTL, even though it may cover types of products under test standards
that we have recognized, we will charge $64 per standard, representing
an average of 1 hour to review the testing and other provisions of the
standard and to determine if the NRTL has the necessary capability.

Final Decision

    OSHA has performed its annual review of the fees it currently
charges to Nationally Recognized Testing Laboratories, as provided
under 29 CFR 1910.7(f). Based on this review, OSHA has determined that
its prior fee schedule warranted adjustment, as detailed in this
notice. As a result, OSHA now establishes the revised fees by adopting
the Nationally Recognized Testing Laboratory Program Fees Schedule
shown as Table A above, effective February 15, 2007. This fee schedule
will remain in effect until superseded by a later fee schedule. OSHA
will provide the public an opportunity to comment on any future changes
to the fees.

    Signed at Washington, DC this 12th day of February, 2007.
Edwin G. Foulke, Jr.,
Assistant Secretary of Labor.
[FR Doc. E7-2661 Filed 2-14-07; 8:45 am]

BILLING CODE 4510-26-P


[Federal Register: March 20, 2008 (Volume 73, Number 55)]
[Notices]
[Page 15025-15028]
[DOCID:fr20mr08-74]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57492; File No. SR-NASD-2007-021]

Self-Regulatory Organizations; National Association of Securities
Dealers, Inc. (n/k/a Financial Industry Regulatory Authority, Inc.);
Order Approving Proposed Rule Change To Amend the Definition of Public
Arbitrator

March 13, 2008.
    On March 12, 2007, the National Association of Securities Dealers,
Inc. (``NASD''), through its wholly owned subsidiary, NASD Dispute
Resolution, Inc. (n/k/a FINRA Dispute Resolution, Inc.) filed with the
Securities and Exchange Commission (``Commission'') pursuant to Section
19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and
Rule 19b-4 thereunder,\2\ a proposed rule change to amend the
definition of ``public arbitrator'' in the NASD's Code of Arbitration
Procedure for Customer Disputes (``Customer Code'') and Code of
Arbitration Procedure for Industry Disputes (``Industry Code'').\3\ The
proposed rule change was published for comment in the Federal Register
on July 17,

2007.\4\ The Commission received 62 comments on the proposed rule
change \5\ and FINRA's response to the comments.\6\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ On July 26, 2007, the Commission approved a proposed rule
change filed by NASD to amend NASD's Certificate of Incorporation to
reflect its name change to Financial Industry Regulatory Authority
Inc., or FINRA, in connection with the consolidation of the member
firm regulatory functions of NASD and NYSE Regulation, Inc. See
Securities Exchange Act Release No. 56146 (July 26, 2007). In
connection with this name change, NASD Dispute Resolution became
FINRA Dispute Resolution, Inc. (``FINRA Dispute Resolution'').
    \4\ See Securities Exchange Act Release No. 56039 (July 10,
2007), 72 FR 39110 (July 17, 2007).
    \5\ Comment letters were submitted by Philip M. Aidikoff, Esq.,
Attorney, dated July 17, 2007 (``Aidikoff Letter''); Professor Seth
E. Lipner, Zicklin School of Business, Baruch College, dated July
23, 2007 (``Lipner Letter''); Steven B. Caruso, Esq., President,
Public Investors Arbitration Bar Association, dated July 23, 2007
(``PIABA Letter''), William S. Shepherd, Esq., Founder, Shepherd,
Smith & Edwards, LLP, dated July 24, 2007 (``Shepherd Letter'');
Richard Layne, dated July 25, 2007 (``Layne Letter''); Dale
Ledbetter, Ledbetter Associates, dated July 25, 2007 (``Ledbetter
Letter''); Jeffrey B. Kaplan, Esq., Dimond Kaplan Rothstein, P.A.,
dated July 25, 2007 (``Kaplan Letter''); Charles C. Mihalek, Esq.,
dated July 25, 2007 (``Mihalek Letter''); Daniel A. Ball, Esq., Ball
Law Offices, dated July 25, 2007 (``Ball Letter''); Stuart D.
Meissner, Esq., Law Offices of Stuart D. Meissner LLC, dated July
25, 2007 (``Meissner Letter''); Adam S. Doner, Esq., dated July 25,
2007 (``Doner Letter''); Jay H. Salamon, Esq., Hermann Cahn &
Schneider LLP, dated July 25, 2007 (``Salamon Letter''); Robert W.
Goehring, Esq., dated July 25, 2007 (``Goehring Letter''); Barry D.
Estell, dated July 25, 2007 (``Estell Letter''); Steve A.
Buchwalter, Esq., Law Offices of Steve A. Buchwalter, P.C., dated
July 25, 2007 (``Buchwalter Letter''); Charles W. Austin, Jr., dated
July 25, 2007 (``Austin Letter''); Les Greenberg, Esq., Law Offices
of Les Greenberg, dated July 27, 2007 (``Greenberg Letter'');
Jeffrey A. Feldman, Esq., Law Offices of Jeffrey A. Feldman, dated
July 27, 2007 (``Feldman Letter''); Frederick W. Rosenberg, Esq.,
dated July 30, 2007 (``Rosenberg Letter''); W. Scott Greco, Esq.,
Greco & Greco, P.C., dated July 31, 2007 (``Greco Letter''); Bryan
J. Lantagne, Esq., Director, Massachusetts Securities Division and
Chair, NASAA Arbitration Working Group, dated August 2, 2007
(``NASAA Letter''); Peter J. Mougey, Esq., Beggs & Lane, dated
August 3, 2007 (``Mougey Letter''); Andrew Stoltmann, Esq., Stoltman
Law Offices, P.C., dated August 6, 2007 (``Stoltman Letter'');
Robert C. Port, Esq., Cohen Goldstein Port & Gottlieb, LLP, dated
August 6, 2007 (``Port Letter''); James D. Keeney, Esq., James D.
Keeney, P.A., dated August 6, 2007 (``Keeney Letter''); Herb Pounds,
Esq., Herbert E. Pounds, Jr., P.C., dated August 6, 2007 (``Pounds
Letter''); John Miller, Esq., Swanson Midgley LLC, dated August 6,
2007 (``Miller Letter''); Janet K. DeCosta, Esq., dated August 6,
2007 (``DeCosta Letter''); Milton H. Fried, Jr., Esq., dated August
6, 2007 (``Fried Letter''); Laurence S. Schultz, Esq., Driggers,
Schultz & Herbst, dated August 6, 2007 (``Schultz Letter''); Mark A.
Tepper, Esq., President, Mark A. Tepper, P.A., dated August 6, 2007
(``Tepper Letter''); Leonard Steiner, dated August 6, 2007
(``Steiner Letter''); William P. Torngren, Esq., dated August 6,
2007 (``Torngren Letter''); Richard A. Lewins, Esq., Special
Counsel, Burg Simpson Eldredge Hersh & Jardine P.C., dated August 7,
2007 (``Lewins Letter''); Jonathan W. Evans, Esq., Jonathan W. Evans
& Associates, dated August 7, 2007 (``Evans Letter''); Kathleen H.
Gorr, Esq., dated August 7, 2007 (``Gorr Letter''); Martin L.
Feinberg, Esq., dated August 8, 2007 (``Feinberg Letter''); Dave
Liebrader, Esq., dated August 8, 2007 (``Liebrader Letter''); Steven
M. McCauley, Esq., dated August 8, 2007 (``McCauley Letter''); David
Harrison, dated August 8, 2007 (``Harrison Letter''); Rob Bleecher,
Esq., dated August 8, 2007 (``Bleecher Letter''); Thomas C. Wagner,
Esq., Van Deusen & Wagner L.L.C., dated August 8, 2007 (``Wagner
Letter''); Carl J. Carlson, Esq., Carlson & Dennett, P.S., dated
August 8, 2007 (``Carlson Letter''); Robert S. Banks, Jr., Esq., The
Banks Law Office, P.C., dated August 8, 2007 (``Banks Letter'');
Jeffrey S. Kruske, Esq., Law Office of Jeffrey S. Kruske, P.A.,
dated August 8, 2007 (``Kruske Letter''); Mitchell S. Ostwald, Esq.,
The Law Offices of Mitchell S. Ostwald, dated August 8, 2007
(``Ostwald Letter''); Debra G. Speyer, Esq., Law Offices of Debra G.
Speyer, dated August 8, 2007 (``Speyer Letter''); Dawn R. Meade,
Esq., The Spencer Law Firm, dated August 9, 2007 (``Meade Letter'');
Scott C. Ilgenfritz, Esq., dated August 8, 2007 (``Ilgenfritz
Letter''); Eliot Goldstein, Esq., Partner, Law Offices of Eliot
Goldstein, LLP, dated August 9, 2007 (``Goldstein Letter''); Howard
Rosenfield, Esq., Law Offices of Howard Rosenfield, dated August 10,
2007 (``Rosenfield Letter''); Scott R. Shewan, Esq., Born, Pape &
Shewan LLP, dated August 13, 2007 (``Shewan Letter''); Joseph Fogel,
Esq., Fogel & Associates, dated August 14, 2007 (``Fogel Letter'');
Donald M. Feferman, Esq., Donald M. Feferman, P.C., dated August 16,
2007 (``Feferman Letter''); Gail E. Boliver, Esq., Boliver Law Firm,
dated August 19, 2007 (``Boliver Letter''); Stephen P. Meyer, Esq.,
Meyer & Ford, dated August 20, 2007 (``Meyer Letter''); Jan Graham,
Esq., Graham Law Offices, dated August 20, 2007 (``Graham Letter'');
John E. Sutherland, Esq., dated August 20, 2007 (``Sutherland
Letter''); Ronald M. Amato, Esq., Shaheen, Novoselsky, Staat,
Filipowski & Eccleston, P.C, dated August 21, 2007 (``Amato
Letter''); James J. Eccleston, Esq., Shaheen, Novoselsky, Staat,
Filipowski & Eccleston, P.C, dated August 21, 2007 (``Eccleston
Letter''); J. L. Spray, Esq., Mattson, Ricketts, Davies, Stewart &
Calkins, dated August 21, 2007 (``Spray Letter''); Randall R.
Heiner, Esq., Heiner Law Offices, dated August 23, 2007 (``Heiner
Letter'').
    The public file for the proposal, which includes comment letters
received on the proposal, is located at the Commission's Public
Reference Room located at 100 F Street, NE., Washington, DC 20549.
The comment letters are also available on the Commission's Internet
Web site (http://www.sec.gov/rules/sro.shtml).
    \6\ See Letter from Mignon McLemore, Assistant Chief Counsel,
FINRA Dispute Resolution, to Nancy M. Morris, Secretary, Commission,
dated January 17, 2008 (``FINRA Response'').
---------------------------------------------------------------------------

I. Description of the Proposed Rule Change

    FINRA Dispute Resolution, Inc. proposes to amend the Customer Code
and the Industry Code to amend the definition of public arbitrator to
add an annual revenue limitation. In discussing the proposed rule
change, FINRA stated that it and its predecessor NASD had taken
numerous steps in recent years to ensure the integrity and neutrality
of the forum's arbitrator roster by addressing classification of
arbitrators. For example, in August 2003, NASD proposed changes to
Rules 10308 and 10312 of the Code of Arbitration Procedure (``Code'')
to modify the definitions of public and non-public arbitrators to
further prevent individuals with significant ties to the securities
industry from serving as public arbitrators.\7\ The 2003 proposal:
---------------------------------------------------------------------------

    \7\ In July 2002, the Commission retained Professor Michael
Perino to assess the adequacy of arbitrator disclosure requirements
at the NASD and at the New York Stock Exchange (``NYSE''). Professor
Perino's report (``Perino Report'') concluded that undisclosed
conflicts of interest were not a significant problem in arbitrations
sponsored by self-regulatory organizations (``SROs''), such as NASD
and the NYSE. However, the Perino Report recommended several
amendments to SRO arbitrator classification and disclosure rules
that might ''provide additional assurance to investors that
arbitrations are in fact neutral and fair.'' This proposal
implemented the recommendations of the Perino Report and made
several other related changes to the definitions of public and non-
public arbitrators that were consistent with the Perino Report
recommendations. The Perino Report is available at http://
www.sec.gov/pdf/arbconflict.pdf.
---------------------------------------------------------------------------

     Increased from three years to five years the period for
transitioning from a non-public to public arbitrator after leaving the
securities industry.
     Clarified that the term ``retired'' from the industry
includes anyone who spent a substantial part of his or her career in
the industry.
     Prohibited anyone who has been associated with the
industry for at least 20 years from ever becoming a public arbitrator,
regardless of how long ago the association ended.
     Excluded from the public arbitrator roster attorneys,
accountants, or other professionals whose firms have derived 10 percent
or more of their annual revenue in the previous two years from clients
involved in securities-related activities.
The proposal was approved by the Commission on April 16, 2004, and
became effective on July 19, 2004.\8\
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 49573 (April 16,
2004), 69 FR 21871 (April 22, 2004) (SR-NASD-2003-95) (approval
order). The changes were announced in Notice to Members 04-49 (June
2004).
---------------------------------------------------------------------------

    On July 22, 2005, NASD proposed further amendments to Rule 10308 of
the Code relating to arbitrator classification to prevent individuals
with certain indirect ties to the securities industry from serving as
public arbitrators. Specifically, NASD proposed to amend the definition
of public arbitrator to exclude individuals who work for, or are
officers or directors of, an entity that controls, is controlled by, or
is under common control with, a broker-dealer, or who have a spouse or
immediate family member who works for, or is an officer or director of,
an entity that is in such a control relationship with a broker-dealer.
NASD also proposed to amend Rule 10308 to clarify that individuals
registered through broker-dealers may not be public arbitrators, even
if they are also employed by a non-broker-dealer (such as a bank). This
rule filing was approved by the Commission on October 16, 2006, and
became effective on January 15, 2007.\9\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 54607 (October 16,
2006), 71 FR 62026 (Oct. 20, 2006) (SR-NASD-2005-094) (approval
order). The changes were announced in Notice to Members 06-64
(November 2006).
---------------------------------------------------------------------------

    During the time that the changes discussed above were being made,
NASD also had pending at the Commission a 2003 proposal to amend the
Code to reorganize the rules into the

Customer Code, the Industry Code, and a separate code for mediation.
The final provisions of this proposal were approved by the Commission
on January 24, 2007, and became effective on April 16, 2007.\10\
Several substantive changes to the Customer and Industry Codes affected
the classification of arbitrators \11\ and how they are selected for
panels.\12\
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 51856 (June 15,
2005), 70 FR 36442 (June 23, 2005) (SR-NASD-2003-158) (notice);
Securities Exchange Act Release No. 51857 (June 15, 2005), 70 FR
36430 (June 23, 2005) (SR-NASD-2004-011) (notice); and Securities
Exchange Act Release No. 51855 (June 15, 2005), 70 FR 36440 (June
23, 2005) (SR-NASD-2004-013) (notice). The changes were announced in
Notice to Members 07-07 (February 2007).
    \11\ FINRA believes the new codes have improved the arbitrator
selection process by creating and maintaining a new roster of
arbitrators who are qualified to serve as chairpersons. The chair
roster consists of more experienced arbitrators available on FINRA's
public arbitrator roster for all investor cases and for certain
intra-industry cases. For other industry cases, the Customer Code
and Industry Code also create a chair roster of experienced non-
public arbitrators. See Rules 12400(b) and (c) of the Customer Code
and Rules 13400(b) and (c) of the Industry Code.
    \12\ The Customer Code and Industry Code also change how
arbitrator lists are generated and how arbitrators are selected for
a panel. See Rules 12403 and 12404 of the Customer Code and Rules
13403 and 13404 of the Industry Code.
---------------------------------------------------------------------------

    Despite these changes to the arbitrator classification rules, some
users of the forum continued to voice concerns about individuals
serving as public arbitrators when they have business relationships
with entities that derive income from broker-dealers. For example, an
arbitrator classified as public might work for a very large law firm
that derives less than 10% of its annual revenue from broker-dealer
clients, but still receives a large dollar amount of such revenue.
Concern focuses primarily on a law firm's defense of action (in
arbitration or litigation) by customers of broker-dealers, and not on
its representation of broker-dealers in underwriting or other
activities. Some recommended that there be an annual dollar limitation
of $50,000 on revenue from broker-dealers relating to customer disputes
with a brokerage firm or associated person concerning an investment
account.
    In response to these recommendations, FINRA proposed to amend the
definition of public arbitrator in Rule 12100(u) of the Customer Code
and Rule 13100(u) of the Industry Code to add a provision that would
prevent an attorney, accountant, or other professional from being
classified as a public arbitrator, if the person's firm derived $50,000
or more in annual revenue in the past two years from professional
services rendered to any persons or entities listed in Rule 12100(p)(1)
of the Customer Code or Rule 13100(p)(1) of the Industry Code relating
to any customer disputes concerning an investment account or
transaction, including but not limited to, law firm fees, accounting
firm fees, and consulting fees.\13\
---------------------------------------------------------------------------

    \13\ Rule 12100(p) defines ``non-public arbitrator.'' Paragraph
(1) of the rule states, in relevant part, that the term ``non-public
arbitrator'' means a person who is otherwise qualified to serve as
an arbitrator and is or, within the past five years, was: (A)
associated with, including registered through, a broker or a dealer
(including a government securities broker or dealer or a municipal
securities dealer); (B) registered under the Commodity Exchange Act;
(C) a member of a commodities exchange or a registered futures
association; or (D) associated with a person or firm registered
under the Commodity Exchange Act. Rule 13100(p) is the same as Rule
12100(p).
---------------------------------------------------------------------------

    FINRA stated that the proposed amendment, in conjunction with the
existing 10 percent revenue limitation,\14\ would further improve its
public arbitrator roster by ensuring that arbitrators whose firms
receive a significant amount of compensation from any persons or
entities associated with or engaged in the securities, commodities, or
futures business are removed from the public roster.\15\
---------------------------------------------------------------------------

    \14\ See supra note 4. Under the July 2004 amendments, a public
arbitrator cannot be ``an attorney, accountant, or other
professional whose firm derived 10 percent or more of its annual
revenue in the past 2 years from any persons or entities listed in
Rules 12100(p)(1) and 13100(p)(1) of the new Codes.''
    \15\ FINRA will survey its public arbitrators to determine which
arbitrators will be removed from the roster for appointment to new
cases upon the effective date of the proposed rule.
---------------------------------------------------------------------------

II. Summary of Comments and FINRA's Response

    The Commission received 62 comment letters.\16\ Many of the
commenters raised common issues and shared the same views on these
issues, regardless of whether they supported or opposed the proposal
overall. In particular, a majority of the commenters argued that
arbitrators should not be classified as public arbitrators under the
rule if they are attorneys, accountants or other professionals whose
firms receive any compensation or revenue from the securities
industry.\17\ FINRA responded that the proposed $50,000 annual revenue
limitation would reasonably narrow the definition of public arbitrator,
removing from the public arbitrator pool those arbitrators whose firms
derive substantial revenue from providing professional services to
members of the securities industry involving customer disputes, while
simultaneously maintaining the integrity of the public arbitrator
roster.\18\
---------------------------------------------------------------------------

    \16\ See supra, note 5.
    \17\ See Speyer, Goehring, Doner, Ledbetter, Aidikoff, Meissner,
Boliver, Meyer, Lewins, Harrison, McCauley, Torngren, Ball,
Feinberg, Tepper, Sutherland, Fogel, Bleecher, Steiner, Miller,
Mihalek, Kaplan, Lipner, Shepherd, Layne, Salamon, Buchwalter,
Feldman, Shewan, and Mougey Letters.
    \18\ See FINRA Response.
---------------------------------------------------------------------------

    Many commenters also argued that the proposed $50,000 annual
revenue limitation should not be limited to professional services
related to customer disputes concerning an investment account or
transaction and instead should include all professional services
rendered by the arbitrator's firm to a firm or associated person.\19\
FINRA responded that the annual revenue limitation should be restricted
to the provision of those services, such as defense work in a customer
dispute, that are closely related to matters that arbitrators would be
deciding in an arbitration proceeding and, therefore, might affect the
arbitrator's impartiality.\20\ Moreover, FINRA stated that expanding
the proposed annual revenue limitation to include all services could
result in the removal of experienced, competent public arbitrators from
their roster.\21\
---------------------------------------------------------------------------

    \19\ See NASAA, PIABA, Meade, Ilgenfritz, Liebrader, Gorr,
Pounds, Keeney, Fried, Estell, Heiner, DeCosta, Schultz, Evans,
Wagner, Ostwald, Kruske, Carlson, Port, Stotman, Graham, Feferman,
and Rosenfield Letters.
    \20\ See FINRA Response.
    \21\ See id.
---------------------------------------------------------------------------

    Several commenters expressed doubt regarding FINRA's ability to
monitor and enforce the $50,000 annual revenue limitation.\22\ FINRA
responded that because arbitrators must continually update their
disclosure reports and, when selected to serve on a case, must complete
a checklist and take an oath confirming that the arbitrator's
disclosures are true and complete, the procedures are sufficient.\23\
---------------------------------------------------------------------------

    \22\ See PIABA, Speyer, Liebrader, Heiner, Goldtein, Schultz,
Evans, Wagner, Ostwald, Feinberg, Tepper, Graham, Feferman, and
Feldman Letters.
    \23\ See FINRA Response.
---------------------------------------------------------------------------

    One commenter suggested that a ``cooling off'' period be
implemented after the annual revenue limitation no longer applies and
before a person can serve as a public arbitrator.\24\ The commenter
noted that this concept is applied to individuals who have been out of
the securities industry for fewer than five years by assigning them to
the non-public arbitrator pool.\25\ FINRA responded that there is a
distinction between individuals who work in the securities industry and
individuals whose firms receive revenue for providing services to
members of the

industry.\26\ In the case of individuals who worked in the industry,
FINRA indicated that a five-year ``cooling off'' period is appropriate,
as such individuals might maintain close relationships with staff at
their former firms.\27\ FINRA stated that the potential for such bias
is less likely to exist for individuals whose firms receive a de
minimis amount of annual revenue for providing services to members of
the securities industry and, therefore, that a similar ``cooling off''
period should not be required.\28\
---------------------------------------------------------------------------

    \24\ See Feinberg Letter.
    \25\ See id.
    \26\ See FINRA Response.
    \27\ See id. (citing Rule 12100(p)(1) of the Customer Code and
Rule 13100(p)(1) of the Industry Code).
    \28\ See id.
---------------------------------------------------------------------------

    Finally, numerous commenters argued that the requirement that a
non-public arbitrator be a member of a three-person panel involving a
customer dispute should be eliminated.\29\ FINRA indicated that these
comments are outside the scope of the rule filing because it is not
amending the provisions of the Codes that address this issue.
---------------------------------------------------------------------------

    \29\ See NASAA, Pounds, Fried, Estell, Goldstein, Banks,
Harrison, McCauley, Torngren, Feinberg, Sutherland, Spray and
Salamon Letters.
---------------------------------------------------------------------------

III. Discussion

    After careful review, and consideration of commenters' views and
the FINRA Response, 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
association.\30\ In particular, the Commission finds that the proposed
rule change is consistent with the provisions of Section 15A(b)(6) of
the Act, which requires, among other things, that rules of a national
securities association be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. The Commission believes that the proposed rule change
meets this standard by removing from the pool of public arbitrators
those individuals whose firms receive a significant amount of
compensation for service on matters closely related to those that
arbitrators consider during arbitration proceedings.
---------------------------------------------------------------------------

    \30\ In approving this proposed rule change, the Commission
notes that it has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\31\ that the proposed rule change (SR-NASD-2007-021) be, and
hereby is, approved.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78s(b)(2).
    \32\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-5572 Filed 3-19-08; 8:45 am]

BILLING CODE 8011-01-P


Re: Large Bus HVAC Systems

Julius Banks

to:

Johnson, Steve D. - TK

05/29/2009 04:04 PM

Cc:

Cindy Newberg, Ross Brennan

Mr. Johnson,

On December 23, 2008, EPA published two proposed rules that, working

together, will restrict the availability and use of HCFCs (including R-22)

starting in 2010. One proposal would allocate allowances to continue the

Montreal Protocol phasedown of production and import of HCFCs. The other

proposal would ban the sale or distribution (including import) of

pre-charged air-conditioning and refrigeration products and components

containing HCFC-22 or HCFC-142b.

1) As described in the proposal, EPA considers an appliance manufactured

once the refrigerant circuit is complete, and the appliance is charged and

ready for its intended purpose.  So yes, the HVAC system would be

considered to be manufactured after the bus builder installs it in the bus

and connects it.

2) If the proposal is finalized, the bus manufacturer could not configure

the unit and charge it with virgin R-22 after January 1, 2010.

3) & 4) EPA has not finalized the proposed rule, but is considering how

manufacturers would be able to comply with a requirement that would rely

on the manufacturer to determine the origin of the refrigerant being used

to charge a new hvac unit (i.e., appliance)  to determine if the

refrigerant were used or virgin when charging a newly manufactured hvac

unit (i.e., appliance).

5 If the proposal is finalized, the bus manufacturer could not configure

the unit and charge it with virgin R-22 after January 1, 2010.  So any

R-22 on hand could only be used to service existing appliances.

Julius Banks

Team Lead, Refrigerant Recovery and Recycling Prog.

Stratospheric Protection Division

tel:<PHONE_NUMBER>

fax:<PHONE_NUMBER>

www.epa.gov/ozone/title6/608/608fact.html

From:	"Johnson, Steve D. - TK"<EMAIL_ADDRESS> To:	Cindy Newberg/DC/USEPA/US@EPA, Ross Brennan/DC/USEPA/US@EPA, Julius

Banks/DC/USEPA/US@EPA

Date:	05/27/2009 06:12 PM

Subject:	Large Bus HVAC Systems

Hello,

We manufacture HVAC systems for buses.  The HVAC unit and compressor are

shipped separately, without a refrigerant charge to the bus manufacturer

for installation into the bus during the final assembly.  The unit and

compressor are then connected with hoses and the system is evacuated and

charged with R22.   As a manufacturer, we will not produce equipment for

R22 after December 31, 2009.  However, our bus customers will have HVAC

systems that will have to be installed, connected and charged after

January 1, 2010.  This raises several questions.

1.       Is the HVAC system considered to be manufactured after the bus

builder installs it in the bus and connects it?  The HVAC system’s name

plate will have a 2009 serial number.

2.       Can the HVAC unit be charged by the bus manufacturer with R22

that was manufactured and purchased in 2009 if it is already on hand?

3.       Can the HVAC unit be charged with R22 manufactured in 2010, or

newly produced R22 under any circumstance?

4.       How will the EPA distinguish “newly produced” R22 from the

existing supplies?

5.       Given that the bus builders can predict their beginning inventory

in 2010, should the bus manufacturers pre-buy R22 for this purpose?

 Please give these questions your immediate consideration.

Regards,

Steve D Johnson

Product Manager, Large Bus and Rail HVAC

Thermo King Corporation

314 West 90th Street

Bloomington, MN 55420

Direct: 952/887-2241

FAX: 952/887-2689

The information contained in this message is privileged and intended only

for the recipients named. If the reader is not a representative of the

intended recipient, any review, dissemination or copying of this message

or the information it contains is prohibited. If you have received this

message in error, please immediately notify the sender, and delete the

original message and attachments.

----- Forwarded by Julius Banks/DC/USEPA/US on 12/11/2009 10:01 AM -----

	Fw: SPLIT SYSTEMS A/C R-22 phase-out

	Julius Banks

	to:

	jimhunt

	08/19/2009 05:53 PM

	Cc:

	Cindy Newberg

Mr. Hunt,

We are currently drafting a final version of the rule that proposed a ban

on the sale and distribution of a/c and refrigeration appliances and

equipment components (such as condensing units, linesets, acoils) that are

pre-charged with R-22

(www.epa.gov/fedrgstr/EPA-AIR/2008/December/Day-23/a29999.pdf).   As

proposed, as of January 1, 2010 no person may sell or distribute air

conditioning or refrigeration equipment (including appliances and

equipment components) that are pre-charged with R-22.  While this proposal

allows for the sale of inventoried components that were manufactured prior

to January 1, 2010, under a separate proposal

(www.epa.gov/fedrgstr/EPA-AIR/2008/December/Day-23/a29965.pdf) such

components could not be used in new construction and would only be allowed

to service existing R-22 systems.

EPA understands the time sensitivity of these important actions.   We

anticipate final versions of the rules to be published later this year.

EPA will post copies on-line(www.epa.gov/ozone/strathome.html) as soon as

the final versions can be made public.   Additional information is

available at www.epa.gov/ozone/title6/phaseout/rulesoverview.html and

www.epa.gov/ozone/title6/phaseout/classtwo.html.

Regards,

Julius Banks

Team Lead, Refrigerant Recovery and Recycling Prog.

Stratospheric Protection Division

tel:<PHONE_NUMBER>

fax:<PHONE_NUMBER>

www.epa.gov/ozone/title6/608/608fact.html

----- Forwarded by Cindy Newberg/DC/USEPA/US on 08/19/2009 05:17 PM -----

From:	"Jim Hunt"<EMAIL_ADDRESS> To:	Cindy Newberg/DC/USEPA/US@EPA

Date:	08/19/2009 12:06 PM

Subject:	SPLIT SYSTEMS A/C R-22 phase-out

   If i am reading rules right we as a supplier of pre-charged a/c

equipment (R-22) can we sell and install any equipment that we have in

stock and long as it was manufactured before Jan 1st  2010

condensing units - linesets - a-coils

or has a final rule been made yet...thank you for any help

Jim Hunt

Royal / Durham Supply

Tulsa, Oklahoma  74115

Ph #<PHONE_NUMBER>

fax#<PHONE_NUMBER>

website.

www.royal-durhamsupply.com