[Federal Register Volume 86, Number 32 (Friday, February 19, 2021)]
[Proposed Rules]
[Pages 10220-10225]
[FR Doc No: 2021-03036]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R10-OAR-2019-0599, FRL-10019-38-Region 10]

Air Plan Approval; OR; Smoke Management Revision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: Environmental Protection Agency (EPA) is proposing to approve
Oregon State Implementation Plan (SIP) revisions submitted on November
3, 2014 and September 27, 2019. The submitted revisions incorporate by
reference the most recent updates to Oregon's Smoke Management Plan.
EPA is acting only on the most recent version of such regulations as
the previous versions are no longer in effect as a matter of state law.
EPA is also making technical corrections related to previous approvals
of components of Oregon's SIP. EPA is proposing to determine that the
changes are consistent with Clean Air Act requirements.

DATES: Comments must be received on or before March 22, 2021.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R10-
OAR-2019-0599, at https://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from https://www.regulations.gov. EPA may publish
any comment received to its public docket. Do not electronically submit
any information you consider to be Confidential Business Information
(CBI) or other information the disclosure of

which is restricted by statute. Multimedia submissions (audio, video,
etc.) must be accompanied by a written comment. The written comment is
considered the official comment and should include discussion of all
points you wish to make. EPA will generally not consider comments or
comment contents located outside of the primary submission (i.e. on the
web, cloud, or other file sharing system). For additional submission
methods, the full EPA public comment policy, information about CBI or
multimedia submissions, and general guidance on making effective
comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Randall Ruddick, EPA Region 10, 1200
Sixth Avenue, Suite 155, Seattle, WA 98101, at<PHONE_NUMBER>, or
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, wherever ``we,''
``us,'' or ``our'' is used, it means EPA.

Table of Contents

I. Background
II. Oregon's Smoke Management Program
    A. 2014 Submittal Summary
    B. 2019 Submittal Summary
III. Evaluation of Oregon's SIP Submittals
IV. Technical Corrections
V. EPA's Proposed Action
VI. Incorporation by Reference
VII. Statutory and Executive Order Reviews

I. Background

    Each state has a State Implementation Plan (SIP) containing the
control measures and strategies used to attain and maintain the
national ambient air quality standards (NAAQS) established by the
Environmental Protection Agency (EPA) for the criteria pollutants
(carbon monoxide, lead, nitrogen dioxide, ozone, particulate matter,
sulfur dioxide). The SIP contains such elements as air pollution
control regulations, emission inventories, attainment demonstrations,
and enforcement mechanisms. Oregon, and some other states, have adopted
Smoke Management Plan SIPs to reduce emissions that contribute to
visibility impairment. Wildfire has had a serious impact on Oregon
during the past decade with many large-scale wildfires impacting the
summer air quality in Oregon. The state anticipates that the Oregon
Department of Forestry (ODF) will increase the use of prescribed fire
to minimize the impacts of wildfire on air quality in response to this
trend. Through the SMP, Oregon carefully manages prescribed fires to
minimize smoke impacts to populated areas while maximizing the use of
prescribed fire as a forest management tool.
    EPA first approved Oregon's Smoke Management Plan and associated
rules into the SIP in 1988 and has approved numerous revisions to the
Plan over time.\1\ Oregon requested additional revisions to smoke
management rules contained in OAR Chapter 629-048, and ODF Directive 1-
4-1-601 in a SIP submittal dated October 31, 2014 (received November 3,
2014, hereafter ``2014 Submittal''). Before EPA took action on the 2014
Submittal, Oregon began additional rulemaking to revise portions of its
smoke management rules. Oregon submitted those additional revisions to
OAR 629-048 for SIP approval on September 24, 2019 (hereafter ``2019
Submittal''). The 2019 Submittal includes revisions to regulations in
Oregon's 2014 Submittal on which the EPA has not yet taken action. In
this action, EPA is proposing to approve only the most recent submitted
version of such regulations because the previous versions of the
regulations included in the 2014 Submittal are no longer in effect as a
matter of state law.
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    \1\ On November 22, 1988, (53 FR 47188) EPA approved the Oregon
Smoke Management Plan at Oregon Administrative Rule (OAR) Chapter
629, Division 43-043, and the Oregon Department of Forestry (ODF)
``Operational Guidance for the Oregon Smoke Management Program''
(Directive 1-4-1-601), into the Oregon SIP. On November 1, 2001, (66
FR 55105) EPA approved revisions to the Smoke Management Plan at OAR
629-43-043, and approved modifications to the ODF directive
``Operational Guidance for the Oregon Smoke Management Program''
into the Oregon SIP. Oregon requested EPA approve further changes to
the Smoke Management Rule in a December 20, 2010, SIP submittal. In
the 2010 submittal, OAR 629-048 (``Smoke Management'') replaced OAR
629-043 (``Smoke Management Plan''). EPA approved the 2010
submission on August 22, 2012 (77 FR 50611).
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II. Oregon's Smoke Management Program

    The ODF oversees prescribed forest burning in Oregon forest lands
to decrease forest fuels and debris that pose increased fire risk,
restore forest health and reduce the potential for major wildfires. ORS
477.013 directs ODF to develop and implement a Smoke Management Plan
for prescribed forestry burning. To carry out this directive, ODF
developed a Smoke Management Plan, which currently consists of rules
under OAR 629-048 (previously under OAR 629-043) and the Operational
Guidance for the Oregon Smoke Management Program in Directive 1-4-1-
601. Oregon's Smoke Management Plan applies to prescribed burning on
federal, state and private forestland. The objectives of the Oregon
Smoke Management Plan<PHONE_NUMBER>(4)) are to:

    (a) Minimize smoke emissions resulting from prescribed burning
as described by ORS 477.552;
    (b) Provide maximum opportunity for essential forestland
burning;
    (c) Protect public health by avoiding smoke intrusions;
    (d) Coordinate with other state smoke management programs;
    (e) Comply with state and federal air quality and visibility
requirements; and
    (f) Promote the further development of techniques to minimize or
reduce emissions by encouraging cost-effective utilization of
forestland biomass, alternatives to burning and emission reduction
techniques.

A. 2014 Submittal Summary

    As discussed above, in 2014 Oregon revised its Smoke Management
Plan and submitted it to EPA for approval into the SIP. Among the 2014
revisions, OAR<PHONE_NUMBER>, Visibility Objectives, was strengthened by
extending applicability to the full calendar year, as it was previously
only applicable from July 1 to September 15. OAR<PHONE_NUMBER> is the
only provision in the 2014 Submittal that remains in effect. All other
portions of OAR 629-048 submitted in 2014 were further revised and
included in the state's subsequent 2019 Submittal. Since the remainder
of the 2014 Submittal is no longer in effect as a matter of state law,
EPA is not proposing to take action on any other component of Oregon's
2014 Submittal.

B. 2019 Submittal Summary

    In the 2019 Submittal, Oregon's process for approving prescribed
fires focuses heavily on forecasting weather conditions and their
effects on smoke dispersal with new NAAQS-related considerations.
Oregon's previous approach included making single decisions for large
tracts (approximately 150,000 contiguous acres, roughly the size of a
ranger district) even though these large tracts can contain multiple
airsheds and vastly different smoke dispersion conditions. The approach
in the 2019 Submittal is more protective because ODF tailors burn
decisions based on air quality and meteorological conditions within
airsheds allowing for more accurate forecasts of smoke dispersion
overall.
    Oregon's prescribed fires and resulting smoke are managed under the
2019 Submittal with no burning allowed within 35 miles of a smoke
sensitive receptor area \2\ (SSRA), if smoke or

down-slope drainage is likely to impact the SSRA due to forecasted wind
direction. Forecasts are produced 6 days a week by ODF during the
prescribed fire season and provide instructions for burners to prevent
smoke impacts such as wind-direction related limitations on burning
near SSRAs. Oregon's stated main goal of burn instructions is to move
smoke up and away from ground levels, which is why individual burn plan
instructions are customized for the burn area and are subject to
changes based on forecast meteorology and field conditions. ODF also
communicates directly with individual burn bosses about fires planned
near SSRAs.
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    \2\ SSRAs are defined in OAR<PHONE_NUMBER>(26) as areas
designated for the highest level of protection under the Smoke
Management Plan. They are designated by the State Board of Forestry,
in consultation with DEQ under OAR<PHONE_NUMBER>, due to past history
of smoke incidents, density of population or other special legal
status related to visibility such as the Columbia River Gorge Scenic
Area.
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    The 2019 Submittal's SIP revisions do not increase prescribed fire
authorization levels. The 2019 Submittal also retains the five program
elements in Oregon's currently approved SIP: (1) Taking actions to
minimize smoke emissions, (2) burning only during appropriate weather
conditions in order to avoid smoke impacts in urban areas, (3)
encouraging use of alternatives to fire, including a comprehensive
reference manual of alternatives to prescribed fire, (4) requiring
permits be obtained prior to burning, and (5) including a burn
authorization process that involves the issuance of smoke management
forecasts and burning instructions.\3\
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    \3\ EPA finalized the 2012 proposed approval on August 22, 2012,
(77 FR 50611).
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    Oregon's 2019 Submittal includes additional controls and
contingencies to protect against impacts on air quality from prescribed
burning to nonattainment areas, maintenance areas, and areas at risk
for becoming nonattainment. The 2019 Submittal provisions call for
consideration of all particulate matter (PM) emissions in the air when
planning for prescribed burns whereas the current federally approved
requirements only consider the PM emissions attributable to prescribed
fires. The 2019 Submittal adds a definition for a ``smoke incident''
and re-defines a ``smoke intrusion'' in order to establish sub-NAAQS
intrusion thresholds and a burn approval target not to exceed
approximately 75% of the 24-hour PM2.5 NAAQS. The 2019 SIP
Submittal also establishes a NAAQS protective criterion for burn
approvals through use of a one-hour threshold even though there is no
NAAQS one-hour limit. The one-hour intrusion level, set at 70 [mu]g/m3,
and a 24-hour intrusion level set at 26 [mu]g/m3 level (OAR 629-048-
0005 (27)) are designed to protect the NAAQS (PM2.5). These
criteria collectively enable ODF to dictate necessary modifications to
burn volume or tonnage, or to withhold approval to burn considering
weather conditions. Considered as a whole, the revisions contained in
the 2019 Submittal strengthen the currently SIP-approved smoke
management requirements.
    Other notable modifications to the State's Smoke Management SIP
include a process for developing community response plans and exemption
requests, updates to Special Protection Zone \4\ (SPZ) requirements
that provide extra smoke management protection during winter months to
communities with histories of exceeding federal air quality standards,
and allowing the use of polyyethylene sheeting on burn piles to
facilitate rapid ignition and combustion of burn piles.
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    \4\ Special Protection Zones have been established around
certain communities requiring additional protection from
particulates such as nonattainment or maintenance. Maps identifying
these areas are identified in maps located within Department
Directive 1-4-1-601, which is included in the docket. See OAR 629-
048-0135 for details on requirements for these areas.
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III. Evaluation of Oregon's SIP Submittals

    Approvals to revisions of SIPs are subject to the requirements of
CAA section 110(l). Under CAA section 110(l), the Administrator may not
approve a SIP revision ``if the revision would interfere with any
applicable requirements concerning attainment and reasonable further
progress, or any other applicable requirement of [the Act].''
    The 2019 Submittal contains a `weight of evidence' analysis \5\
focused primarily on particulate matter impacts of the SMP revisions,
as well as the implications of the revisions to the SMP on other NAAQS
pollutants. The most relevant pollutants for this analysis are
PM2.5, PM10, and ozone due to the nature of
prescribed fire emissions and because EPA recently revised the
PM2.5 and Ozone NAAQS resulting in more stringent standards
(78 FR 3085, January 15, 2013, and 80 FR 65292, October 26, 2015). EPA
expects that attainment and maintenance related to criteria pollutants
other than PM and ozone are unlikely to be impacted by the State's
prescribed burning program. In addition, there are no nonattainment
areas for ozone, carbon monoxide, sulfur dioxide, nitrogen dioxide, or
lead in Oregon, nor has Oregon submitted any changes to regulatory
limits in its smoke management SIP provisions for these pollutants.
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    \5\ A copy of the study is included in the Docket materials for
this action. See: Oregon SMP 110 Discussion.
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    Prescribed burning does not generally occur in Oregon in summer
months, the season when ozone values are expected to be the highest due
to increased temperature and solar radiation, because those months
generally have unfavorable smoke dispersion conditions \6\ and fire
safety concerns. For these reasons, we are proposing to find that
attainment and maintenance of the Ozone NAAQS are unlikely to be
affected by the provision submitted for approval.
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    \6\ See Section 2.6 of Oregon SMP 110 Discussion, which is
included in the docket for this action.
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    We are also proposing to find that attainment and maintenance of
the PM NAAQS are unlikely to be affected by the provisions in the 2019
Submittal for reasons discussed below. There are currently three PM
nonattainment areas in Oregon: Klamath Falls for 2006 PM2.5
and Oakridge for the 2006 PM2.5 and 1987 PM10
NAAQS. Determinations of Attainment by the Attainment Date and a Clean
Data Determinations were published by EPA for these areas.\7\ All areas
in Oregon fall far below the PM10 standard of 150 [mu]g/m\3\
and are attaining the PM10 NAAQS. As discussed in the
proposed findings of attainment for Klamath Falls (81 FR 36176, June 6,
2016) and Oakridge (82 FR 52686, November 14, 2017), residential wood
combustion (RWC) in the cold, winter months during atmospheric
inversions is the most significant source of PM2.5 emissions
responsible for elevated particulate matter in these areas. RWC
emissions from certified and non-certified wood stoves, fireplaces, and
pellet stoves are the most significant source of PM2.5
emissions. In the Oakridge area, RWC accounts for about 86% of the base
year direct PM2.5 emissions and 84% of the projected
emissions on worst case winter days. The primary control strategy for
these areas is reducing emissions from residential wood combustion
through a program to change-out uncertified woodstoves and an episodic
woodstove curtailment program. The curtailment program restricts wood
burning on ``Red'' advisory days. ``Red'' days are generally declared
when PM2.5 concentration is expected to be 25[mu]g/m\3\
(approx. 72% of the NAAQS) or higher.
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    \7\ Klamath Falls 2006 PM2.5, 81 FR 36176, 6/6/2016;
and Oakridge 2006 PM2.5, 85 FR 5537, 2/8/2018; Oakridge
1987 p.m.10, 66 FR 38947, 7/26/2001.
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    Oregon established SPZs around Klamath Falls and Oakridge to
provide additional protection from smoke in these areas. The Oregon
Smoke Management Plan designates SPZs to

include extra restrictions regarding the use of prescribed fire during
the problematic cold weather season when these areas can experience air
stagnation events. Specifically, the Oregon SMP at OAR<PHONE_NUMBER>
prohibits prescribed burning on ``Red'' woodstove days in the SPZ from
December 1 through February 15 and provides additional cautionary
requirements for prescribed burning in SPZs on non ``Red'' woodstove
days from November 15 through February 15.
    The 2014 and 2019 submittals establish more protective burn
authorization levels than those in the previously SIP-approved SMP
through the establishment of sub-NAAQS intrusion thresholds at OAR 629-
048-0005(27).\8\ For example, although there is no one hour NAAQS for
PM2.5, ODEQ has established a 1-hr threshold of 70 [mu]g/
m\3\, further bound by the 24-hr threshold of 26 [mu]g/m\3\
(approximately 75% of the NAAQS) for determining whether or not a burn
will be permitted. If PM2.5 is at or above the sub-NAAQS
thresholds, the 2019 Submittal provides that a prescribed burn would
not be approved. Likewise, if the PM2.5 is lower than the
PM2.5 thresholds, but additional smoke would likely cause an
exceedance of the thresholds, the burn would also not be approved. The
submitted revisions contain an exemption process from the 1-hr
PM2.5 intrusion threshold but the exemption imposes
additional requirements and conditions (OAR<PHONE_NUMBER>). The revised
Smoke Management Plan also includes provisions for removing a
community's exemption from the 1-hour intrusion threshold if an area
has had three or more 24-hour threshold exceedances in five years.\9\
The revised plan also includes a provision for revoking the exemption
if the SSRA is within one exceedance of a NAAQS violation. Also, SSRAs
that are in a non-attainment with the NAAQS will not be eligible for an
exemption (see<PHONE_NUMBER> (3)(e) and (f)). There is not an exemption
process for the 24-hr PM2.5 threshold of 26 [mu]g/m\3\,
therefore the revised Smoke Management Plan is more protective than the
24-hr PM2.5 NAAQS.
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    \8\ In its response to comments during the state public process,
Oregon acknowledged that the proposed 2019 SIP amendments have the
effect of allowing for an estimated increase of prescribed fire use
by 80%. However, EPA proposes to conclude the burn-specific
authorization criteria based on ambient monitoring data, included in
the proposed SIP amendment, are sufficient to ensure continued
protection of the NAAQS.
    \9\ From<PHONE_NUMBER> (3)(d), ``ODF and DEQ may revoke the
exemption if there are repeated (three or more in five years) smoke
intrusions that exceed the 24-hour average threshold or prescribed
burning contributes to two or more NAAQS exceedances.''
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    The proposed revisions also include new best burn practices and
emissions reduction techniques at OAR<PHONE_NUMBER> allowing the burning
of polyethylene coverings used to keep piles of slash and thinning
debris dry. To determine the efficacy of polyethylene coverings, ODF
and EPA's Office of Research and Development contracted with a testing
firm to conduct a study \10\ of emissions from wet versus dry (covered
and uncovered) piles. The study showed that wet piles burn slower and
produce more emissions on a mass basis due to incomplete combustion
than dry piles. In general, burning dry piles, even with polyethylene
still in place, produces less criteria pollutant emissions than burning
uncovered wet piles. Therefore, the revisions allowing for burning
polyethylene to facilitate a reduction in emissions are more protective
of the NAAQS.
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    \10\ A copy of the study is included in the Docket materials for
this action. See: Attachment G of Oregon SMP 110 Discussion.
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    Some additional changes in the 2014 and 2019 Submittals that EPA
proposes to determine are either more protective than current SIP
requirements or not expected to result in significant NAAQS impacts
include expanding SPZ boundaries \11\ to include the areas from which
prescribed burning could cause an impact and changing SSRA \12\
boundaries to better align with airshed boundaries. Prescribed burning
is generally not expected to make significant contributions to the
remaining criteria pollutants (Lead, CO, NOX, and
SO2) due to a combination of factors. Monitored values in
Oregon for these pollutants are well below the level of the NAAQS;
wildfires are not known to be significant contributors of airborne Lead
or SO2, and finally, prescribed burning in any one
geographic area will be infrequent enough that it is not expected to
create elevated concentrations that violate the NAAQS for any of these
criteria pollutants. For additional information regarding these
pollutants see Oregon SMP 110 Discussion, which is included in the
docket materials for this action.
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    \11\ As described in OAR<PHONE_NUMBER> SPZ Contingency Plan
Requirements.
    \12\ SSRAs are areas designated for the highest level of
protection under the Smoke Management Plan (OAR<PHONE_NUMBER>(26).
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    Oregon's Smoke Management Plan revisions include OAR<PHONE_NUMBER>
Visibility Objectives, which clearly state that it is the intent under
the Smoke Management Plan to comply with Regional Haze requirements as
identified in the Oregon Regional Haze Plan. The revised Smoke
Management Plan also enhances the Regional Haze Plan by incorporating
practices to minimize visibility impacts to the Kalmiopsis Wilderness
and Crater Lake National Park into the Smoke Management Plan.\13\
Oregon's 5-Year Progress Report approved May 17, 2019 (83 FR 22853),
demonstrates that the long-term strategy and emission control measures
in the existing Regional Haze SIP are sufficient to enable Oregon to
meet all established reasonable progress goals. EPA proposes to find
that Oregon's smoke management revisions do not constitute a relaxation
in Oregon's Regional Haze SIP approved August 22, 2012 (77 FR 50611)
because Oregon's revisions do not alter limits on the quantity of light
impairing pollutants emitted from prescribed burning and OAR 629-048(2)
clearly states it is Oregon's intent to operate their Smoke Management
Plan in a manner consistent with the Oregon Regional Haze Plan.
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    \13\ See our proposed approval of Oregon's Regional Haze
Progress Report (83 FR 11927, March 19, 2018) which was finalized
May 17, 2018 (83 FR 33853).
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IV. Technical Corrections

    EPA is making technical corrections to provisions previously
approved as revisions to the Oregon SIP pursuant to CAA 110(k)(6). In
2012 we approved (77 FR 50611) Oregon's revised Smoke Management Plan
at OAR<PHONE_NUMBER> through -0500 which replaced OAR<PHONE_NUMBER> but
we failed to update 40 CFR 52.1970(c), Table 2. We are correcting Table
2 to reflect the 2012 approval by removing ``OAR 629-43-043'' and
adding the portions of OAR 629-048 (state effective January 1, 2008)
that were not revised by Oregon's 2014 or 2019 Submittals.
    We are correcting the identification of the Oregon SIP at 40 CFR
part 52.1970(c), Table 2 by adding:
     OAR<PHONE_NUMBER>, Regulated Areas (state effective 1/1/
2008);
     OAR<PHONE_NUMBER>, Bear Creek/Rogue River Valley SSRA
(state effective 1/1/2008);
     OAR<PHONE_NUMBER>, Registration of Intent to Burn (state
effective 1/1/2008);
     OAR<PHONE_NUMBER>, Emission Inventories (state effective 1/
1/2008);
     OAR<PHONE_NUMBER>, Coordination with Other Regulating
Jurisdictions and for Other Pollutants (state effective 1/1/2008).
    We are also making technical corrections to the Oregon SIP at 40
CFR part 52.1970(e), Table 5, Section 3, by revising the reference to
Oregon's

Smoke Management Plan Administrative Rule to reflect the 2012 approval
of OAR 629-048 and by removing the reference to OAR ``629 43-043''.

V. EPA's Proposed Action

    We have reviewed Oregon's demonstration and propose to find that
the revisions discussed above meet the requirements of the CAA. Based
on our review of Oregon's demonstration, we propose to conclude that
the revisions to Oregon's SIP will not interfere with any applicable
requirement concerning attainment, reasonable further progress, or any
other applicable requirement of the Clean Air Act.
    Under CAA section 110(k), EPA is proposing to approve, and
incorporate by reference, the 2014 and 2019 submitted revisions into
the Oregon SIP at 40 CFR part 52, subpart MM. As discussed above,
Oregon's 2014 and 2019 Submittals revised portions of OAR 629-048 and
we are proposing to approve only the most recently submitted version of
such regulations as previous versions are no longer in effect as a
matter of state law.
    Upon final approval, the Oregon SIP will include the addition of
the following:
     OAR<PHONE_NUMBER>, Title, Scope and Effective Dates (state
effective 3/1/2019);
     OAR<PHONE_NUMBER>, Definitions (state effective 3/1/2019);
     OAR<PHONE_NUMBER>, Purpose (state effective 3/1/2019);
     OAR<PHONE_NUMBER>, Necessity of Prescribed Burning (state
effective 3/1/2019);
     OAR<PHONE_NUMBER>, Necessity of Safeguarding Public Health
(state effective 3/1/2019);
     OAR<PHONE_NUMBER>, Regulated Areas (state effective 1/1/
2008);
     OAR<PHONE_NUMBER>, Characterization and Response to Smoke
Incidents, Smoke Intrusions, and National Ambient Air Quality Standards
(NAAQS) Exceedances (state effective 3/1/2019);
     OAR<PHONE_NUMBER>, Air Quality Maintenance Objectives
(state effective 3/1/2019);
     OAR<PHONE_NUMBER>, Visibility Objectives (state effective
7/11/2014);
     OAR<PHONE_NUMBER>, Special Protection Zone Requirements
(state effective 3/1/2019);
     OAR<PHONE_NUMBER>, SPZ Contingency Plan Requirements (state
effective 3/1/2019);
     OAR<PHONE_NUMBER>, Smoke Sensitive Receptor Areas (state
effective 3/1/2019);
     OAR<PHONE_NUMBER>, Criteria for Future Listing of Smoke
Sensitive Receptor Areas (state effective 3/1/2019);
     OAR<PHONE_NUMBER>, Bear Creek/Rogue River Valley SSRA
(state effective 1/1/2008);
     OAR<PHONE_NUMBER>, Communication, Community Response Plans,
and Exemption Requests (state effective 3/1/2019);
     OAR<PHONE_NUMBER>, Regulated Areas (state effective 3/1/
2019);
     OAR<PHONE_NUMBER>, Best Burn Practices; Emission Reduction
Techniques (state effective 3/1/2019);
     OAR<PHONE_NUMBER>, Forecast Procedures (state effective 3/
1/2019);
     OAR<PHONE_NUMBER>, Burn Procedures (state effective 3/1/
2019);
     OAR<PHONE_NUMBER>, Registration of Intent to Burn (state
effective 1/1/2008);
     OAR<PHONE_NUMBER>, Fees for Prescribed burning (state
effective 3/1/2019);
     OAR<PHONE_NUMBER>, Reporting of Accomplishments (state
effective 3/1/2019);
     OAR<PHONE_NUMBER>, Emission Inventories (state effective 1/
1/2008);
     OAR<PHONE_NUMBER>, Coordination with Other Regulating
Jurisdictions and for Other Pollutants (state effective 1/1/2008);
     OAR<PHONE_NUMBER>, Periodic Evaluation and Adaptive
Management (state effective 3/1/2019);
     OAR<PHONE_NUMBER>, Enforcement (state effective 3/1/2019);
     ORS 477.013, Smoke Management Plan; rules (state effective
3/1/2019); and
     Oregon Department of Forestry Directive 1-4-1-601,
Operational Guidance for the Oregon Smoke Management Program (state
effective 3/1/2019).
    Pursuant to 110(k)(6), we are also making corrections to the
regulatory text that includes incorporation by reference by removing
``OAR 629-43-043'' as discussed in Section IV. Upon final approval, the
following regulations will be removed from 40 CFR 52.1970(c), Table 2:
     OAR<PHONE_NUMBER>, Smoke Management Plan (state effective
4/13/1987); and the corresponding cross-reference will be removed from
40 CFR 52.1970(e), Table 5, Section 3.

VI. Incorporation by Reference

    In this document, EPA is proposing to include in a final rule,
regulatory text that includes incorporation by reference. In accordance
with requirements of 1 CFR 51.5, EPA is proposing to incorporate by
reference the provisions described in Section V of this preamble. Also,
in this document, EPA is proposing to remove the incorporation by
reference of ``OAR 629-43-043'' as described in Section IV. EPA has
made, and will continue to make, these documents generally available
through https://www.regulations.gov and at EPA Region 10 Office (please
contact the person identified in the For Further Information Contact
section of this preamble for more information).

VII. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Clean Air Act
and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this proposed action merely approves state law as meeting
Federal requirements and does not impose additional requirements beyond
those imposed by state law. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Orders
12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21,
2011);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of the requirements would be inconsistent
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to
address, as

appropriate, disproportionate human health or environmental effects,
using practicable and legally permissible methods, under Executive
Order 12898 (59 FR 7629, February 16, 1994).

In addition, this proposed action does not apply on any Indian
reservation land or in any other area where EPA or an Indian tribe has
demonstrated that a tribe has jurisdiction. In those areas of Indian
country, the rule does not have tribal implications as specified by
Executive Order 13175 (65 FR 67249, November 9, 2000).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide,
Incorporation by reference, Intergovernmental relations, Ozone,
Particulate matter.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: February 9, 2021.
Michelle L. Pirzadeh,
Acting Regional Administrator, Region 10.
[FR Doc. 2021-03036 Filed 2-18-21; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 83, Number 120 (Thursday, June 21, 2018)]
[Notices]
[Pages 28854-28856]
[FR Doc No: 2018-13294]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA 2014-D-2138]

Agency Information Collection Activities; Proposed Collection;
Comment Request; Guidance for Industry: Adverse Event Reporting for
Outsourcing Facilities Under Section 503B of the Federal Food, Drug,
and Cosmetic Act

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA or Agency) is announcing
an opportunity for public comment on the proposed collection of certain
information by the Agency. Under the Paperwork Reduction Act of 1995
(PRA), Federal Agencies are required to publish notice in the Federal
Register concerning each proposed collection of information, including
each proposed extension of an existing collection of information and to
allow 60 days for public comment in response to the notice. This notice
solicits comments on adverse event reporting for outsourcing facilities
under the Federal Food, Drug, and Cosmetic Act (FD&C Act).

DATES: Submit either electronic or written comments on the collection
of information by August 20, 2018.

ADDRESSES: You may submit comments as follows. Please note that late,
untimely filed comments will not be considered. Electronic comments
must be submitted on or before August 20, 2018. The https://www.regulations.gov electronic filing system will accept comments until
midnight Eastern Time at the end of August 20, 2018. Comments received
by mail/hand delivery/courier (for written/paper submissions) will be
considered timely if they are postmarked or the delivery service
acceptance receipt is on or before that date.

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. Comments submitted
electronically, including attachments, to https://www.regulations.gov
will be posted to the docket unchanged. Because your comment will be
made public, you are solely responsible for ensuring that your comment
does not include any confidential information that you or a third party
may not wish to be posted, such as medical information, your or anyone
else's Social Security number, or confidential business information,
such as a manufacturing process. Please note that if you include your
name, contact information, or other information that identifies you in
the body of your comments, that information will be posted on https://www.regulations.gov.
     If you want to submit a comment with confidential
information that you do not wish to be made available to the public,
submit the comment as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand delivery/Courier (for written/paper
submissions): Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Dockets
Management Staff, FDA will post your comment, as well as any
attachments, except for information submitted, marked and identified,
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No.
FDA 2014-D-2138 for ``Agency Information Collection Activities;
Proposed Collection; Comment Request; Guidance for Industry: Adverse
Event Reporting for Outsourcing Facilities Under Section 503B of the
Federal Food, Drug, and Cosmetic Act.'' Received comments, those filed
in a timely manner (see ADDRESSES), will be placed in the docket and,
except for those submitted as ``Confidential Submissions,'' publicly
viewable at https://www.regulations.gov or at the Dockets Management
Staff between 9 a.m. and 4 p.m., Monday through Friday.
     Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential

with a heading or cover note that states ``THIS DOCUMENT CONTAINS
CONFIDENTIAL INFORMATION.'' The Agency will review this copy, including
the claimed confidential information, in its consideration of comments.
The second copy, which will have the claimed confidential information
redacted/blacked out, will be available for public viewing and posted
on https://www.regulations.gov. Submit both copies to the Dockets
Management Staff. If you do not wish your name and contact information
to be made publicly available, you can provide this information on the
cover sheet and not in the body of your comments and you must identify
this information as ``confidential.'' Any information marked as
``confidential'' will not be disclosed except in accordance with 21 CFR
10.20 and other applicable disclosure law. For more information about
FDA's posting of comments to public dockets, see 80 FR 56469, September
18, 2015, or access the information at: https://www.gpo.gov/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Domini Bean, Office of Operations,
Food and Drug Administration, Three White Flint North, 10A-12M, 11601
Landsdown St., North Bethesda, MD 20852,<PHONE_NUMBER>,
[email protected].

SUPPLEMENTARY INFORMATION: Under the PRA (44 U.S.C. 3501-3520), Federal
Agencies must obtain approval from the Office of Management and Budget
(OMB) for each collection of information they conduct or sponsor.
``Collection of information'' is defined in 44 U.S.C. 3502(3) and 5 CFR
1320.3(c) and includes Agency requests or requirements that members of
the public submit reports, keep records, or provide information to a
third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A))
requires Federal Agencies to provide a 60-day notice in the Federal
Register concerning each proposed collection of information, including
each proposed extension of an existing collection of information,
before submitting the collection to OMB for approval. To comply with
this requirement, FDA is publishing notice of the proposed collection
of information set forth in this document.
    With respect to the following collection of information, FDA
invites comments on these topics: (1) Whether the proposed collection
of information is necessary for the proper performance of FDA's
functions, including whether the information will have practical
utility; (2) the accuracy of FDA's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility, and clarity of the information to be collected; and (4) ways
to minimize the burden of the collection of information on respondents,
including through the use of automated collection techniques, when
appropriate, and other forms of information technology.

Guidance for Industry: Adverse Event Reporting for Outsourcing
Facilities Under Section 503B of the Federal Food, Drug, and Cosmetic
Act

OMB Control Number 0910-0800--Extension

    This information collection supports Agency implementation of the
Drug Quality and Security Act (DQSA) (Pub. L. 113-54), which amended
the FD&C Act by adding new section 503B (21 U.S.C. 353b).
    This notice solicits comments on adverse event reporting for
outsourcing facilities under section 503B of the FD&C Act.
    Under section 503B(b), a compounder can register as an outsourcing
facility with FDA. If the conditions outlined in section 503B(a) of the
FD&C Act are satisfied, a drug compounded by or under the direct
supervision of a licensed pharmacist in an outsourcing facility is
exempt from certain sections of the FD&C Act, including section
502(f)(1) (21 U.S.C. 352(f)(1)) (concerning the labeling of drugs with
adequate directions for use) and section 505 (21 U.S.C. 355)
(concerning the approval of human drug products under new drug
applications (NDAs) or abbreviated new drug applications (ANDAs)).
Drugs compounded in outsourcing facilities are not exempt from the
requirements of section 501(a)(2)(B) of the FD&C Act (21 U.S.C.
351(a)(2)(B)) (concerning current good manufacturing practice for
drugs).
    Under section 503B(b)(5), an outsourcing facility must submit
adverse event reports to FDA in accordance with the content and format
requirements established through guidance or regulation under 21 CFR
310.305 (or any successor regulations). Accordingly, we developed the
document, ``Guidance for Industry: Adverse Event Reporting for
Outsourcing Facilities Under Section 503B of the Federal Food, Drug,
and Cosmetic Act''.\1\ The guidance explains electronic reporting of
adverse events in accordance with Sec.  310.305 with respect to
outsourcing facilities.
---------------------------------------------------------------------------

    \1\ Available at: https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM434188.pdf.
---------------------------------------------------------------------------

    Under Sec.  310.305(c)(1), manufacturers, packers, and distributors
of marketed prescription drug products that are not the subject of an
approved NDA or ANDA, including, as set forth in the guidance,
outsourcing facilities must submit to FDA adverse event reports within
15 calendar days of receiving the information and must submit follow-up
reports within 15 calendar days of receipt of new information about the
adverse event, or as requested by FDA. Outsourcing facilities must
submit the adverse event report in an electronic format that FDA can
process, review, and archive (collection of information is approved by
OMB control number 0910-0291). A copy of the current labeling of the
compounded drug product must be provided.
    Under Sec.  310.305(g), entities subject to the regulation must
maintain for 10 years the records of all adverse events required to be
reported under Sec.  310.305. The outsourcing facility should also
maintain records of its efforts to obtain the data elements described
in the draft guidance for each adverse event report.
    We estimate the burden of the information collection as follows:

                                                      Table 1--Estimated Annual Reporting Burden 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Number of
                  Compounding outsourcing facility                      Number of      responses per     Total annual   Average  burden    Total hours
                                                                       respondents       respondent       responses      per  response
--------------------------------------------------------------------------------------------------------------------------------------------------------
Submission of adverse event reports including copy of labeling and               55                1               55              1.1               61
 other information as described in the guidance....................
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 There are no capital costs or operating and maintenance costs associated with this collection of information.

                                                   Table 2--Estimated Annual Recordkeeping Burden \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Number of                      Average  burden
                       Type of recordkeeping                            Number of       records per      Total annual         per          Total hours
                                                                      recordkeepers     recordkeeper       records       recordkeeping
--------------------------------------------------------------------------------------------------------------------------------------------------------
Records of adverse events, including records of efforts to obtain                55                1               55               16              880
 the data elements for each adverse event report...................
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 There are no capital costs or operating and maintenance costs associated with this collection of information.

    This is the first extension of the information collection and we
have retained the currently approved burden estimate. Based on our
review of Agency data, we estimate that annually 55 outsourcing
facilities (``Number of Respondents'' and ``Total Annual Responses'' in
table 1) will submit adverse event reports to FDA as specified in the
guidance and that preparing and submitting this information will take
approximately 1.1 hours per registrant (``Average Burden per Response''
in table 1). Likewise, we estimate that annually 55 outsourcing
facilities (``Number of Recordkeepers'' in table 2) will maintain
records of adverse events as specified in the guidance and that
preparing and maintaining the records will take approximately 16 hours
per registrant (``Average Burden per Recordkeeping'' in table 2).

    Dated: June 14, 2018.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2018-13294 Filed 6-20-18; 8:45 am]
BILLING CODE 4164-01-P


[Federal Register Volume 78, Number 208 (Monday, October 28, 2013)]
[Rules and Regulations]
[Pages 64178-64179]
[FR Doc No: 2013-25294]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 117

[Docket No. USCG-2013-0857]

Drawbridge Operation Regulation; Albemarle Sound to Sunset Beach,
Atlantic Intracoastal Waterway (AICW), Wrightsville Beach, NC

AGENCY: Coast Guard, DHS.

ACTION: Notice of deviation from drawbridge regulation.

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SUMMARY: The Coast Guard has issued a temporary deviation from the
operating schedule that governs the S.R. 74 Bridge across the AICW, at
mile 283.1, at Wrightsville Beach, NC. The deviation is necessary to
facilitate a significant bridge rehabilitation project. This

temporary deviation allows the drawbridge to only open on the hour for
all vessels during daytime hours.

DATES: This deviation is effective from October 28, 2013 through March
1, 2014, and has been enforced with actual notice since October 1,
2013.

ADDRESSES: The docket for this deviation, [USCG-2013-0857] is available
at http://www.regulations.gov. Type the docket number in the ``SEARCH''
box and click ``SEARCH.'' Click on Open Docket Folder on the line
associated with this deviation. You may also visit the Docket
Management Facility in Room W12-140 on the ground floor of the
Department of Transportation West Building, 1200 New Jersey Avenue SE.,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this
temporary deviation, call or email Mr. Jim Rousseau, Bridge
Administration Branch Fifth District, Coast Guard; telephone (757) 398-
6557, email<EMAIL_ADDRESS>If you have questions on
reviewing the docket, call Barbara Hairston, Program Manager, Docket
Operations,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The North Carolina Department of
Transportation, who owns and operates the S.R. 74 Bridge, has requested
a temporary deviation from the current operating regulations set out in
33 CFR 117.821(a)(6), which is effective until March 1, 2014 (see 78 FR
23849, Apr. 23,2013 Coast Guard.) This deviation is necessary to
facilitate a significant rehabilitation project that has been delayed
due to frequent additional openings for commercial vessels.
    Under the current operating schedule, the draw for the S.R. 74
Bridge across the AICW, at mile 283.1, at Wrightsville Beach, NC shall
open on signal for commercial vessels at all times and on signal for
pleasure vessels except between 7 a.m. and 7 p.m., when it shall only
open on the hour. For all vessels the draw need not open from 7 p.m. to
7 a.m., except with a two hour advance notice. The draw need not open
for annual triathlon events that occur from September through November.
The S.R. 74 Bridge has a temporary vertical clearance in the closed
position of 18 feet above mean high water for ongoing maintenance.
    Under this temporary deviation, the drawbridge need only open on
the hour between 7 a.m. to 7 p.m. daily for all vessels, beginning at 7
a.m., on Tuesday, October 1, 2013 until and including to 7 p.m., on
Sunday March 1, 2014. The bridge will operate under its current
operating schedule at all other times. The Coast Guard has carefully
reviewed bridge opening logs and coordinated the restrictions with
commercial and recreational waterway users.
    Vessels able to pass under the bridge in the closed position may do
so at anytime and are advised to proceed with caution. The bridge will
be able to open for emergencies. There is no immediate alternate route
for vessels transiting this section of the AICW but vessels may pass
before and after the closure each day. The Coast Guard will also inform
additional waterway users through our Local and Broadcast Notices to
Mariners of the closure periods for the bridge so that vessels can
arrange their transits to minimize any impacts caused by the temporary
deviation.
    In accordance with 33 CFR 117.35(e), the drawbridge must return to
its regular operating schedule immediately at the end of the designated
time period. This deviation from the operating regulations is
authorized under 33 CFR 117.35.

    Dated: September 25, 2013.
Waverly W. Gregory, Jr.,
Bridge Program Manager, Fifth Coast Guard District.
[FR Doc. 2013-25294 Filed 10-25-13; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register: March 2, 2007 (Volume 72, Number 41)]
[Notices]
[Page 9594-9599]
[DOCID:fr02mr07-101]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC--27740; 812-13345]

NASDAQ-100 Trust, Series 1, et al.; Notice of Application

February 27, 2007.
AGENCY: Securities and Exchange Commission.

ACTION: Notice of application for an order under section 6(c) of the
Investment Company Act of 1940 (``Act'') for an exemption from sections
2(a)(32), 4(2), 22(d), 24(d) and 26(a)(2)(C) of the Act and rule 22c-1
under the Act; under sections 6(c) and 17(b) of the Act for an
exemption from sections 17(a)(1) and (a)(2) of the Act; and under
section 17(d) of the Act and rule 17d-1 under the Act to permit certain
joint transactions.

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Summary of Application: Applicants request an order to permit (a)
Nasdaq-100 Trust, Series 1 (``Trust''), a unit investment trust whose
portfolio consists of the component stocks of the Nasdaq-100 Index
(``Index''), to issue shares (``Nasdaq-100 Shares'') that are only
redeemable in large aggregations; (b) secondary market transactions in
Nasdaq-100 Shares to occur at negotiated prices; (c) dealers to sell
Nasdaq-100 Shares to purchasers in the secondary market unaccompanied
by a prospectus when prospectus delivery is not required by the
Securities Act of 1933 (``Securities Act''); (d) the Trust, rather than
the Sponsor (defined below), to bear certain expenses associated with
the maintenance of the Trust; (e) certain ``affiliated persons'' of the
Trust to deposit securities into, and receive securities from, the
Trust in connection with the purchase and redemption of Nasdaq-100
Shares; and (f) the Trust to reimburse the Sponsor for payment of an
annual licensing fee to The Nasdaq Stock Market, Inc. (``Nasdaq'').

Applicants: The Trust, PowerShares Capital Management LLC
(``PowerShares,'' together with its successor in interest \1\ and with
any person, directly or indirectly, controlling, controlled by, or
under common control with, PowerShares, ``Sponsor''), and ALPS
Distributors, Inc. (``Distributor'').
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    \1\ ``Successors in interest'' means any entity or entities that
result from a reorganization into another jurisdiction or a change
in the type of business organization.

Filing Dates: The application was filed on November 20, 2006.
Applicants have agreed to file an amendment during the notice period,
---------------------------------------------------------------------------
the substance of which is reflected in this notice.

Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on March 19, 2007, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090. Applicants: H. Bruce Bond,
PowerShares Capital Management LLC, 301 West Roosevelt Road, Wheaton,
IL 60187.

FOR FURTHER INFORMATION CONTACT: Jaea F. Hahn, Senior Counsel, at (202)
551-6870, or Janet M. Grossnickle, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Office of Investment Company
Regulation).

Supplementary Information: The following is a summary of the
application. The complete application may be obtained for a fee at the
Commission's Public Reference Branch, 100 F Street, NE., Washington, DC
20549-0102 (tel.<PHONE_NUMBER>).

Applicants' Representations

    1. The Trust is a unit investment trust (``UIT'') organized under
the laws of the

state of New York. The Sponsor is a wholly owned subsidiary of AIM
Management Group Inc.\2\ The Bank of New York acts as trustee to the
Trust (``Trustee'') pursuant to a trust agreement entered into by and
between the Trustee and the Initial Sponsor of the Trust, as amended
(the ``Trust Agreement'').\3\ The Distributor is registered as a
broker-dealer under the Securities Exchange Act of 1934 (``Exchange
Act'') and serves, on an agency basis, as principal underwriter of the
Trust.
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    \2\ On October 18, 2006, PowerShares entered into a Transaction
Agreement (``Transaction Agreement'') with Nasdaq, the parent of
Nasdaq Global Funds, Inc. (formerly named Nasdaq AMEX Investment
Product Services, Inc., and later renamed Nasdaq Financial Product
Services, Inc., the ``Initial Sponsor'') pursuant to which the
Initial Sponsor will transfer sponsorship of the Trust to
PowerShares. In connection with the Transaction Agreement,
PowerShares is seeking exemptive relief substantially identical to
the relief granted to the Trust pursuant to a Commission order
(Investment Company Act Release No. 25795 (Feb. 22, 1999), as
amended by Investment Company Act Release No. 26415 (Apr. 9, 2004)).
The transfer of sponsorship of the Trust from the Initial Sponsor to
PowerShares is contingent upon receipt of the exemptive relief
requested in the application.
    \3\ If the relief requested herein is granted, the Initial
Sponsor will assign its duties under the Trust Agreement to
PowerShares.
---------------------------------------------------------------------------

    2. The Trust holds a portfolio of securities (``Portfolio
Securities'') consisting of substantially all of the securities in
substantially the same weighting as the component securities of the
Index (the ``Index Securities''). The Index is a ``modified
capitalization-weighted'' index of securities issued by the 100 largest
and most actively traded non-financial companies listed on the Nasdaq
Global Select Market or the Nasdaq Global Market. The Index was first
published in 1985.
    3. Nasdaq-100 Shares, units of beneficial interest in the Trust,
are designed to provide investors with an instrument that closely
tracks the Index, trades like a share of common stock, and pays
periodic dividends proportionate to those paid by the Portfolio
Securities.\4\ Applicants believe that Nasdaq-100 Shares afford
significant benefits in the public interest. Applicants state that the
Trust is able to track the Index more closely than certain other index
products and, unlike shares of open-end index funds, Nasdaq-100 Shares
trade at negotiated prices throughout the Business Day.\5\ Applicants
also state that Nasdaq-100 Shares attract investors and foreign capital
to the U.S. markets.
---------------------------------------------------------------------------

    \4\ The Trust makes quarterly distributions of an amount
representing the dividends accumulated on Portfolio Securities
during each quarter, net of fees and expenses, if any.
    \5\ A ``Business Day'' is any day that the Nasdaq or any other
exchange that lists Nasdaq-100 Shares is open for business and any
day that the Trust is open for business as required by section 22(e)
of the Act.
---------------------------------------------------------------------------

    4. The Trustee adjusts the composition of the Portfolio Securities
from time to time to reflect changes made by Nasdaq to the composition
and weighting of the Index Securities.\6\ All adjustments to the
Portfolio Securities are made by the Trustee as set forth in the Trust
Agreement and are non-discretionary.
---------------------------------------------------------------------------

    \6\ Nasdaq determines, comprises, and calculates the Index
without regard to the Trust.
---------------------------------------------------------------------------

    5. The Trustee is paid a ``Trustee's Fee'' at an annual rate of
0.04% to 0.10% of the net asset value (``NAV'') of the Trust, with the
minimum fee amount not to fall below $180,000.\7\ Until the Sponsor
otherwise determines, the Sponsor has undertaken that the ordinary
operating expenses of the Trust as calculated by the Trustee will not
be permitted to exceed an amount which is 20/100 of one percent (0.20%)
per annum of the daily NAV of the Trust.\8\ The Sponsor retains the
ability to be repaid by the Trust to the extent that subsequently
during the fiscal year expenses fall below the 0.20% per year level on
any given day. Trust fees and expenses are first paid out of income
received by the Trust in the form of dividends and other distributions
on the Portfolio Securities.\9\
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    \7\ If the amount of the Trustee's compensation is less than the
minimum annual fee, the Sponsor will pay the amount of the
shortfall.
    \8\ For purposes of this undertaking, ``ordinary operating
expenses'' will not include taxes, brokerage commissions and
extraordinary non-recurring expenses.
    \9\ In circumstances where the Trust's income is insufficient to
pay the fees and expenses of the Trust, the Trustee will sell
Portfolio Securities to generate sufficient cash to pay the Trust
fees and expenses in excess of Trust income. The Trustee is
ordinarily required to sell Portfolio Securities whenever the
Trustee determines that accrued fees and expenses exceed dividends
and other Trust accrued income on a projected basis by more than
0.01% of the NAV of the Trust.
---------------------------------------------------------------------------

    6. The Sponsor will be granted a license to use the Index as a
basis for determining the composition of the Trust and to use certain
trademarks of Nasdaq in connection with the Trust. The Sponsor will pay
Nasdaq an annual licensing fee for the Index and will seek
reimbursement from the Trust for the fee charged in connection with its
Index. The Sponsor will pay the Distributor a flat annual fee for
services provided to the Trust. The Sponsor will not seek reimbursement
from the Trust for such payment without first obtaining prior exemptive
relief from the Commission.
    7. Nasdaq-100 Shares are issued in aggregations of 50,000 shares
(``Creation Units''). The price of one Portfolio Deposit (defined
below), exclusive of brokerage costs, was approximately $2,032,500
(based on the market value of the Index) on September 30, 2006. All
orders to purchase Creation Units must be delivered through a party
that has executed a Nasdaq-100 participation agreement with the
Distributor and Trustee and is either (i) a participant in the
Continuous Net Settlement (``CNS'') System of the National Securities
Clearing Corporation (``NSCC'') (``Nasdaq-100 Clearing Process'') or
(ii) a Depository Trust Company (``DTC'') participant.
    8. An investor wishing to purchase a Creation Unit from the Trust
has to transfer to the Trustee a ``Portfolio Deposit'' consisting of:
(i) A portfolio of securities substantially similar in composition and
weighting to the Index Securities (``Deposit Securities''); \10\ (ii) a
cash payment equal to the dividends accrued on the Portfolio Securities
since the last dividend payment on the Portfolio Securities, net of
expenses and liabilities (``Income Net of Expense Amount''); and (iii)
a cash payment or credit to equalize any differences between the market
value of the Deposit Securities and the NAV of the Trust on a per
Creation Unit basis (the ``Balancing Amount'').\11\ The Balancing
Amount and the Income Net of Expense Amount together constitute the
``Cash Component.'' An investor making a Portfolio Deposit will be
charged a service fee (``Transaction Fee''), paid to the Trustee, to
defray the Trustee's costs in processing securities deposited into the
Trust.\12\ The Sponsor makes

available each Business Day a list of the names and the required number
of shares for each of the Deposit Securities in the current Portfolio
Deposit, as well as the Income Net of Expense Amount effective through
and including the previous Business Day, per outstanding Nasdaq-100
Share.\13\
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    \10\ The Trust will comply with the federal securities laws in
accepting Deposit Securities and satisfying redemptions with
redemption securities (``Redemption Securities''), including that
the Deposit Securities and Redemption Securities are sold in
transactions that would be exempt from registration under the
Securities Act of 1933. The specified Deposit Securities and
Redemption Securities generally will correspond pro rata to the
Portfolio Securities.
    \11\ At the close of the market on each Business Day, the
Trustee calculates the NAV of the Trust and then divides the NAV by
the number of outstanding Nasdaq-100 Shares in Creation Unit size
aggregations, resulting in an NAV per Creation Unit. The Trustee
then calculates the required number of shares of the Index
Securities, and the amount of cash, comprising a Portfolio Deposit
for the following Business Day.
    \12\ The Transaction Fee is (i) $500 per ``Participating Party''
(defined below) per day for creations of Creation Units where there
are also, in the same day, separate creations in any number, or
redemptions in an amount not equal to the number of Nasdaq-100
Shares created, of other similar exchange-traded funds based on the
Index for which the Trustee or its affiliate acts as trustee, fund
administrator or in any similar capacity, (ii) no fee per
Participating Party where there is, in the same day, a redemption of
an equal number of shares of another similar exchange-traded fund
based on the Index, for which the Trustee or its affiliate acts as
the Trustee, fund administrator or in a similar capacity, and (iii)
in all other cases $1,000 per day, regardless of the number of
Creation Units purchased on that day by such Participating Party.
The Transaction Fee may be changed by the Trustee with the Sponsor's
consent, but it will not exceed 0.10% of the value of a Creation
Unit. For purchases of Creation Units outside the Nasdaq-100
Clearing Process, the Transaction Fee will be one to four times
greater. The amount of the Transaction Fee will be disclosed in the
prospectus for the Trust. A ``Participating Party'' is a broker-
dealer or other NSCC participant who is a participating party in the
Nasdaq-100 Clearing Process.
    \13\ The cash equivalent of an Index Security may be included in
the Cash Component of a Portfolio Deposit in lieu of the security if
(i) the Trustee determines that an Index Security is likely to be
unavailable or available in insufficient quantity for inclusion in a
Portfolio Deposit (for example, when the security is subject to a
trading halt or stop order, or the subject of a tender offer), or
(ii) a particular investor is restricted from investing or engaging
in transactions in the Index Security (for example, when the
investor is a broker-dealer restricted by regulation or internal
policy from investing in securities issued by a company on whose
board of directors one of its principals serves, or when the
investor is a broker-dealer and the security is on its ``restricted
list'').
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    9. Orders to purchase Creation Units are placed with the
Distributor, who is responsible for transmitting the orders to the
Trustee. The Distributor issues confirmations of acceptance, transmits
delivery instructions to the Trustee to implement the delivery of
Creation Units, and maintain records of the orders and the
confirmations. The Distributor also is responsible for delivering
prospectuses to purchasers of Creation Units and may provide certain
other administrative services, such as those related to state
securities law compliance.
    10. Persons purchasing Creation Units from the Trust may hold the
Nasdaq-100 Shares or sell some or all of them in the secondary market.
Nasdaq-100 Shares are listed on the Nasdaq Global Select Market and the
Nasdaq Global Market, each part of Nasdaq, and traded in the secondary
market as individual units (i.e., in less than Creation Units) in the
same manner as other equity securities. One or more member firms of
Nasdaq will act as market makers (``Market Makers'') and maintain a
market for Nasdaq-100 shares.\14\ Transactions involving the sale of
Nasdaq-100 Shares are subject to customary brokerage commissions and
charges. Applicants state that the price at which Nasdaq-100 Shares
trade is disciplined by arbitrage opportunities created by the ability
to continually purchase or redeem Creation Units at their NAV, which
should ensure that Nasdaq-100 Shares do not trade at a material
discount or premium in relation to their NAV.
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    \14\ No particular Market Maker is contractually obligated to
make a market in Nasdaq-100 Shares although Nasdaq's listing
requirements stipulate that at least two Market Makers must be
registered in Nasdaq-100 Shares to maintain the listing. Applicants
do not expect that any Market Maker will be an affiliated person, or
an affiliated person of an affiliated person of the Trust, within
the meaning of section 2(a)(3) of the Act, except pursuant to
section 2(a)(3)(A) or (C) of the Act due to ownership of Nasdaq-100
Shares, as described below.
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    11. Applicants state that purchasers of Creation Units include
institutional investors and arbitrageurs (which could include
institutional investors). A Market Maker also may purchase Creation
Units for use in market making activities. Applicants also state that
secondary market purchasers of Nasdaq-100 Shares include both
institutional and retail investors.\15\
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    \15\ Nasdaq-100 Shares are registered in book-entry form only.
DTC or its nominee is the registered owner of all outstanding
Nasdaq-100 Shares. Records reflecting the beneficial owners of
Nasdaq-100 Shares are maintained by DTC or its participants.
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    12. Applicants will make available a standard product description
for Nasdaq-100 Shares (``Product Description'') to Nasdaq members and
member organizations for distribution to investors purchasing Nasdaq-
100 Shares in accordance with Nasdaq rules. The purpose of the Product
Description is to provide a brief and readily understandable
description of the salient aspects of Nasdaq-100 Shares. The Product
Description also advises investors that a prospectus for Nasdaq-100
Shares is available without charge upon request from the investor's
account executive. Applicants state that purchases of Nasdaq-100 Shares
through a non-member broker-dealer in a transaction away from the
Nasdaq do not constitute a significant portion of the market activity
in Nasdaq-100 Shares.
    13. Nasdaq-100 Shares are not individually redeemable, except upon
termination of the Trust. Nasdaq-100 Shares are only redeemable in
Creation Units through the Trust. To redeem, an investor has to
accumulate enough Nasdaq-100 Shares to constitute a Creation Unit. An
investor redeeming a Creation Unit will receive a portfolio of
securities typically identical in composition and weighting to the
securities portion of a Portfolio Deposit as of the date the redemption
request was made. An investor may receive the cash equivalent of an
Index Security (i) when the Trustee determines that an Index Security
is likely to be unavailable or available in insufficient quantity for
delivery by the Trust; (ii) upon the request of the redeeming investor;
or (iii) upon notice of the termination of the Trust. A redeeming
investor may receive or may pay an amount equal to the Income Net of
Expense Amount, plus or minus the Balancing Amount. A redeeming
investor will pay a Transaction Fee calculated in the same manner as a
Transaction Fee payable in connection with the purchase of a Creation
Unit. The Trustee will transfer the securities and cash to the
redeeming investor within three Business Days of receipt of the request
for redemption.
    14. Because the Trust ordinarily redeems Creation Units in kind,
the Trust does not have to maintain cash reserves for redemptions. This
allows the assets of the Trust to be committed as fully as possible to
tracking the Index, enabling the Trust to track the Index more closely
than other investment products that must allocate a greater portion of
their assets for cash redemptions.
    15. The Trust will terminate on the earlier of (i) March 4, 2124,
or (ii) the date 20 years after the death of the last survivor of
fifteen persons named in the trust agreement, the oldest of whom was
born in 1986 and the youngest of whom was born in 1996. The Trust will
also terminate if (i) Nasdaq-100 Shares are de-listed from the Nasdaq
and are not subsequently re-listed on a national securities exchange
registered under the Exchange Act; or (ii) either the Sponsor or the
Trustee resigns or is removed, and a successor is not appointed. The
Trust may terminate if: (i) 66\2/3\% of the holders of the outstanding
Nasdaq-100 Shares agree to terminate it; (ii) the DTC is unable or
unwilling to continue to perform its functions and a suitable
replacement is unavailable; (iii) NSCC no longer provides clearance
services with respect to the Nasdaq-100 Shares, or if the Trustee is no
longer a participant in NSCC; (iv) Nasdaq ceases to publish the Index;
or (v) the license agreement is terminated.
    16. Within a reasonable time after the Trust's termination, the
Trustee will use its best efforts to sell all Portfolio Securities not
previously distributed to investors redeeming Creation Units. Nasdaq-
100 Shares not redeemed prior to termination will be redeemed in cash
at NAV based on the proceeds from the sale of the Portfolio Securities.

Applicants' Legal Analysis

    1. Applicants request an order under section 6(c) of the Act
granting an exemption from sections 2(a)(32), 4(2),

22(d), 24(d), and 26(a)(2)(C) of the Act and rule 22c-1 under the Act;
under sections 6(c) and 17(b) of the Act granting an exemption from
sections 17(a)(1) and (2) of the Act; and under section 17(d) of the
Act and rule 17d-1 under the Act to permit certain joint transactions.
    2. Section 6(c) of the Act provides that the Commission may exempt
any person, security, or transaction, or any class of persons,
securities, or transactions, if and to the extent that such exemption
is necessary or appropriate in the public interest and consistent with
the protection of investors and the purposes fairly intended by the
policy and provisions of the Act.

Sections 4(2) and 2(a)(32) of the Act

    3. Section 4(2) of the Act defines a UIT as an investment company
that, among other things, issues only redeemable securities. The term
``redeemable security'' is defined in section 2(a)(32) of the Act as
any security, other than short-term paper, under the terms of which the
holder, upon its presentation to the issuer is entitled to receive
approximately a proportionate share of the issuer's current net assets
or the cash equivalent. Because Nasdaq-100 Shares are not individually
redeemable, applicants request an order that would permit the Trust to
register and operate as a UIT and issue Nasdaq-100 Shares that are
redeemable in Creation Units only. Applicants state that investors may
purchase Nasdaq-100 Shares in Creation Units from the Trust and redeem
Creation Units. Applicants further state that because the market price
of Creation Units is disciplined by arbitrage opportunities, investors
should be able to sell Nasdaq-100 Shares in the secondary market at
approximately their NAV.

Section 22(d) of the Act and Rule 22c-1 Under the Act

    4. Section 22(d) of the Act, among other things, prohibits a dealer
from selling a redeemable security that is being currently offered to
the public by or through an underwriter, except at a current public
offering price described in the prospectus. Rule 22c-1 under the Act
generally requires that a dealer selling, redeeming, or repurchasing a
redeemable security do so only at a price based on its NAV next
computed after receipt of a tender of the security for redemption or of
an order to purchase or sell the security. Applicants state that
secondary market trading in Nasdaq-100 Shares takes place at negotiated
prices, not at a current offering price described in the prospectus,
and not at a price based on NAV. Thus, purchases and sales of Nasdaq-
100 Shares in the secondary market do not comply with section 22(d) and
rule 22c-1. Applicants request an exemption from these provisions.
    5. Applicants assert that the concerns sought to be addressed by
section 22(d) of the Act and rule 22c-1 under the Act with respect to
pricing are equally satisfied by the method of pricing Nasdaq-100
Shares. Applicants maintain that while there is little legislative
history regarding section 22(d), its provisions, as well as those of
rule 22c-1, appear to have been designed to (i) prevent dilution caused
by certain riskless-trading schemes by principal underwriters and
contract dealers; (ii) prevent unjust discrimination or preferential
treatment among buyers resulting from sales at different prices; and
(iii) assure an orderly distribution of investment company shares by
eliminating price competition from dealers offering shares at less than
the published sales price and repurchasing shares at more than the
published redemption price.
    6. Applicants believe that none of these purposes are thwarted by
permitting Nasdaq-100 Shares to trade in the secondary market at
negotiated prices. Applicants state (i) that secondary market trading
in Nasdaq-100 Shares does not involve the Trust as a party and cannot
result in dilution of an investment in Nasdaq-100 Shares; and (ii) to
the extent different prices exist during a given trading day, or from
day to day, such variances occur as a result of third-party market
forces, such as supply and demand, not as a result of unjust or
discriminatory manipulation. Therefore, applicants assert that
secondary market transactions in Nasdaq-100 Shares do not create
discrimination or preferential treatment among purchasers. Finally,
applicants contend that the proposed distribution system is orderly
because arbitrage activity ensures that the difference between the
market price of Nasdaq-100 Shares and their NAV remains narrow.

Section 24(d) of the Act

    7. Section 24(d) of the Act provides, in pertinent part, that the
prospectus delivery exemption provided to dealer transactions by
section 4(3) of the Securities Act does not apply to any transaction in
a redeemable security issued by a UIT. Applicants request an exemption
from section 24(d) to permit dealers in Nasdaq-100 Shares to rely on
the prospectus delivery exemption provided by section 4(3) of the
Securities Act.\16\ Applicants state that the imposition of prospectus
delivery requirements on dealers in the secondary market will
materially impede the success of Nasdaq-100 Shares.
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    \16\ Applicants state that persons purchasing Creation Units
will be cautioned in the prospectus that some activities on their
part may, depending on the circumstances, result in their being
deemed statutory underwriters and subject them to the prospectus
delivery and liability provisions of the Securities Act. For
example, a broker-dealer firm and/or its client may be deemed a
statutory underwriter if it takes Creation Units after placing an
order with the Distributor, breaks them down into the constituent
Nasdaq-100 Shares, and sells Nasdaq-100 Shares directly to its
customers; or if it chooses to couple the creation of a supply of
new Nasdaq-100 Shares with an active selling effort involving
solicitation of secondary market demand for Nasdaq-100 Shares. The
prospectus will state that whether a person is an underwriter
depends upon all the facts and circumstances pertaining to that
person's activities. The prospectus also will state that broker-
dealer firms should also note that dealers who are not
``underwriters'' but are participating in a distribution (as
contrasted to ordinary secondary trading transactions), and thus
dealing with Nasdaq-100 Shares that are part of an ``unsold
allotment'' within the meaning of section 4(3)(C) of the Securities
Act, would be unable to take advantage of the prospectus delivery
exemption provided by section 4(3) of the Securities Act.
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    8. Applicants state that the secondary market for Nasdaq-100 Shares
is significantly different from the typical secondary market for UIT
securities, which is usually maintained by the sponsor. Nasdaq-100
Shares are listed on a national securities exchange and trade in the
same manner as listed securities issued by operating companies and
closed-end investment companies. Dealers selling shares of operating
companies and closed-end investment companies in the secondary market
generally are not required to deliver a prospectus to the purchaser.
    9. Applicants contend that Nasdaq-100 Shares, as a listed security,
merit a reduction in the compliance costs and regulatory burdens
resulting from the imposition of prospectus delivery obligations in the
secondary market. Because Nasdaq-100 Shares are exchange-listed,
prospective investors have access to several types of market
information about them. Applicants state that quotations, last sale
price, and volume information are continually available on a real time
basis through the consolidated tape and are available throughout the
day on brokers' computer screens and other electronic services, such as
Quotron. The previous day's price and volume information is also
published in the financial section of newspapers. The Sponsor also
publishes daily, on a per Nasdaq-100 Share basis, the amount of
accumulated dividends, net of accrued expenses.

    10. Investors also receive Product Descriptions. Applicants state
that, while not intended as a substitute for a prospectus, the Product
Description contains pertinent information about Nasdaq-100 Shares.
Applicants also note that Nasdaq-100 Shares are readily understandable
to retail investors as a product that tracks the Nasdaq-100 Index,
which is well known to most investors and widely recognized.

Section 26(a)(2)(C) of the Act

    11. Section 26(a)(2)(C) of the Act requires, among other things,
that a UIT's trust indenture prohibit payments to the trust's depositor
(in the case of the Trust, the Sponsor), and any affiliated person of
the depositor, except payments for performing certain administrative
services. Applicants request an exemption from section 26(a)(2)(C) to
permit the Trust to reimburse the Sponsor for certain licensing,
registration, and marketing expenses.
    12. Applicants state that, ordinarily, a sponsor of a UIT has
several sources of income in connection with the creation of the trust.
Applicants assert, however, that under the structure of the Trust, the
usual sources of income are not available because the Sponsor will not
impose a sales load, maintain a secondary market, or deposit Index
Securities into the Trust. Applicants contend that the abuse sought to
be remedied by section 26(a)(2)(C) of the Act--``double dipping'' by
UIT sponsors collecting money from their captive trusts in addition to
the profits already generated by sales charges and other sources--will
not be present if the requested exemption is granted.
    13. Applicants contend that permitting the Trust to reimburse the
Sponsor for certain expenses would be no more disadvantageous to the
holders of Nasdaq-100 Shares than allowing the expenses to be imposed
indirectly as offsets to sales loads and other charges, as is done by
typical UITs. Applicants state that the Trust pays the Sponsor only its
actual out-of-pocket expenses and no component of profit is included.
Finally, applicants state that the payment is capped at 20 basis points
of the Trust's NAV on an annualized basis, with any expenses in excess
of that amount absorbed by the Sponsor.

Section 17(a) of the Act

    14. Section 17(a) of the Act generally prohibits an affiliated
person of a registered investment company, or an affiliated person of
such person, from selling any security to or purchasing any security
from the company. Section 2(a)(3) defines ``affiliated person'' to
include any person directly or indirectly owning, controlling, or
holding with power to vote, 5% or more of the outstanding voting
securities of the other person, and any person controlling, controlled
by or under common control with the other person. Section 2(a)(9)
provides that a control relationship will be presumed where one person
owns 25% or more of another person's voting securities. Applicants
state that, because the definition of ``affiliated person'' includes
any person owning 5% or more, or more than 25%, of an issuer's
outstanding voting securities, every purchaser of a Creation Unit will
be an affiliated person of the Trust so long as 20 or fewer Creation
Units are in existence. Applicants request an exemption from section
17(a) under sections 6(c) and 17(b) to permit persons that are
affiliated persons solely by virtue of a 5% or more, or more than 25%,
ownership interest in the Trust (or affiliated persons of such person
that are not otherwise affiliated with the Trust) to purchase and
redeem Creation Units through in-kind transactions.
    15. Section 17(b) authorizes the Commission to exempt a proposed
transaction from section 17(a) if evidence establishes that the terms
of the transaction, including the consideration to be paid or received,
are reasonable and fair and do not involve overreaching, and the
proposed transaction is consistent with the policies of the registered
investment company and the general provisions of the Act. Applicants
contend that no useful purpose would be served by prohibiting
affiliated persons of the Trust from purchasing or redeeming Creation
Units. The composition of a Portfolio Deposit made by a purchaser or
given to a redeeming investor is the same regardless of the investor's
identity, and is valued under the same objective standards applied to
valuing the Portfolio Securities. Therefore, applicants state that ``in
kind'' purchases and redemptions will afford no opportunity for an
affiliated person of the Trust to effect a transaction detrimental to
the other holders of Nasdaq-100 Shares. Applicants also believe that
``in kind'' purchases and redemptions do not result in abusive self-
dealing or overreaching by affiliated persons of the Trust.

Section 17(d) of the Act and Rule 17d-1 Under the Act

    16. Section 17(d) of the Act and rule 17d-1 under the Act prohibit
any affiliated person of, or principal underwriter for, a registered
investment company, or any affiliated person of the affiliated person
or the principal underwriter, acting as principal, from effecting any
transaction in connection with any joint enterprise or other
arrangement or profit-sharing plan in which the investment company
participates, unless an application regarding the joint transaction has
been filed with the Commission and granted by order. Under rule 17d-1,
in passing upon such applications, the Commission considers whether the
participation of the registered investment company in the joint
transaction is consistent with the provisions, policies and purposes of
the Act and the extent to which such participation is on a basis
different or less advantageous than that of other participants.
    17. Applicants request an order under rule 17d-1 that would permit
the Trust to reimburse the Sponsor for the payment to Nasdaq of an
annual license fee under a license agreement. Applicants believe that
relief is necessary because the Trust's undertaking to reimburse the
Sponsor might be deemed a joint enterprise or other joint arrangement
in which the Trust is a participant, in contravention of section 17(d)
of the Act and rule 17d-1.
    18. The license agreement allows applicants to use the Index as a
basis for Nasdaq-100 Shares and to use certain of Nasdaq's trade name
and trademark rights. Applicants believe that Nasdaq is a valuable name
that is well-known to investors and that investors will desire to
invest in an instrument that closely mirrors the Index. In view of
this, applicants state that it is necessary to obtain from Nasdaq the
above-mentioned license agreement so that appropriate reference to
Nasdaq and Nasdaq-100 Shares may be made in materials describing
Nasdaq-100 Shares and the Trust. Applicants assert that the terms and
provisions of the license agreement are comparable to the terms and
provisions of other similar license agreements and that the annual
license fee is for fair value and is in an amount comparable to that
which would be charged by Nasdaq for similar arrangements. For these
reasons, applicants state that the proposed license fee arrangement
satisfies the standards of section 17(d) and rule 17d-1.

Applicants' Conditions

    Applicants agree that the order granting the requested relief will
be subject to the following conditions:
    1. Applicants will not register a new series of the Trust by means
of filing a post-effective amendment to the Trust's

registration statement or by any other means, unless applicants have
requested and received with respect to such new series, either
exemptive relief from the Commission or a no-action position from the
Division of Investment Management of the Commission.
    2. The Trust's prospectus and the Product Description clearly
disclose that, for purposes of the Act, Nasdaq-100 Shares are issued by
the Trust and that the acquisition of Nasdaq-100 Shares by investment
companies is subject to the restrictions of section 12(d)(1) of the
Act, except as permitted by an exemptive order that permits registered
investment companies to invest in the Trust beyond the limits of
Section 12(d)(1)(A), subject to certain terms and conditions, including
that the investment company enter into an agreement with the Trust
regarding the terms of the investment.
    3. As long as the Trust operates in reliance on the requested
order, the Nasdaq-100 Shares will be listed on an Exchange.
    4. The website for the Trust, which will be publicly accessible at
no charge, will contain the following information, on a per Nasdaq-100
Share basis, for the Trust: (a) The prior Business Day's NAV and the
reported closing price, and a calculation of the premium or discount of
such price against such NAV; and (b) data in chart format displaying
the frequency distribution of discounts and premiums of the daily
closing price against the NAV, within appropriate ranges, for each of
the four previous calendar quarters. In addition, the Product
Description for the Trust will state that the website for the Trust has
information about premiums and discounts at which the Nasdaq-100 Shares
have traded.
    5. The prospectus and annual report for the Trust will also
include: (a) The information listed in condition 4(b), (i) in the case
of the prospectus, for the most recently completed year (and the most
recently completed quarter or quarters, as applicable) and (ii) in the
case of the annual report, for the immediately preceding five years, as
applicable; and (b) the following data, calculated on a per Nasdaq-100
Share basis for one-, five- and ten-year periods (or life of the
Trust), (i) the cumulative total return and the average annual total
return based on NAV and closing price, and (ii) the cumulative total
return of the Index.
    6. Before the Trust may rely on the order, the Commission will have
approved pursuant to rule 19b-4 under the Exchange Act, an Exchange
rule requiring Exchange members and member organizations effecting
transactions in Nasdaq-100 Shares to deliver a Product Description to
purchasers of Nasdaq-100 Shares.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-3677 Filed 3-1-07; 8:45 am]

BILLING CODE 8010-01-P