Federal Register / Vol. 66, No. 104 / Wednesday, May 30, 2001 / Rules and Regulations 29219

PAC Form 1 will no longer require the

addition of the inspection certificate

number on it. In addition, PAC Forms

7 and 7(c) will not be required from

handlers wishing to be approved

handlers of immature papayas. In the

absence of mandatory inspection, no

handlers will be required to apply for

approval to handle immature papayas

using PAC Form 7 nor report shipments

of immature papayas to the committee

using PAC Form 7(c). This rule will

decrease the burden by 9.25 hours.

The Department has not identified

any relevant Federal rules that

duplicate, overlap, or conflict with this

proposed rule.

In addition, the committee’s meetings

were widely publicized throughout the

papaya industry and all interested

persons were encouraged to attend the

meetings and participate in committee

deliberations on all issues. Like all

committee meetings, the December 28,

2000, and the subsequent January 11,

2001, meetings were public meetings

and all entities, both large and small,

were encouraged to express views on

this issue. The committee itself is

comprised of 13 members, consisting of

nine producer members and three

handlers members. The committee also

includes a public member who does not

represent an agricultural interest nor

have a financial interest in papayas.

Finally, interested persons are invited to

submit information on the regulatory

and informational impacts of this action

on small businesses.

A small business guide on complying

with fruit, vegetable, and specialty crop

marketing agreements and orders may

be viewed at the following web site:

http://www.ams.usda.gov/fv/

moab.html. Any questions about the

compliance guide should be sent to Jay

Guerber at the previously mentioned

address in the FOR FURTHER INFORMATION

CONTACT section.

After consideration of all relevant

matters presented, including the

information and recommendation

submitted by the committee and other

available information, it is hereby found

that the suspensions and revision made

by this rule, as hereinafter set forth, will

tend to effectuate the declared policy of

the Act.

Pursuant to 5 U.S.C. 553, it is also

found and determined that it is

impracticable, unnecessary, and

contrary to the public interest to give

preliminary notice prior to putting this

rule into effect, and that good cause

exists for not postponing the effective

date of this rule until 30 days after

publication in the Federal Register

because: (1) This rule needs to be in

effect as soon as possible to continue to

provide relief to the Hawaii papaya

industry; (2) this action reflects the

emergency recommendation of the

committee and the Department’s

assessment of the industry; and (3) this

rule provides a 60-day comment period

and any comments received will be

considered prior to finalization of this

rule.

List of Subjects in 7 CFR Part 928

Marketing agreements, Papayas,

Reporting and recordkeeping

requirements.

For the reasons set forth in the

preamble, 7 CFR part 928 is amended as

follows:

PART 928—PAPAYAS GROWN IN

HAWAII

1. The authority citation for 7 CFR

part 928 continues to read as follows:

Authority: 7 U.S.C. 601–674.

§§ 928.150, 928.152, 928.313 [Suspended]

2. Sections 928.150, 928.152, and

928.313 are indefinitely suspended in

their entirety.

3. In § 928.160, paragraph (a)(1) is

revised to read as follows:

§ 928.160 Utilization reports.

(a) * * *

(1) Quantity of papayas handled

subject to assessments including the

date and destination of each shipment;

* * * * *

Dated: May 21, 2001.

Kenneth C. Clayton,

Acting Administrator, Agricultural Marketing

Service.

[FR Doc. 01–13472 Filed 5–29–01; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF COMMERCE

National Institute of Standards and

Technology

15 CFR Part 285

[Docket No.: 000831249–1129–02]

RIN 0693–ZA39

National Voluntary Laboratory

Accreditation Program; Operating

Procedures

AGENCY: National Institute of Standards

and Technology, Commerce.

ACTION: Final rule.

SUMMARY: The Director of the National

Institute of Standards and Technology

(NIST), United States Department of

Commerce, is today issuing a final rule

revising regulations found at 15 CFR

part 285 pertaining to the operation of

the National Voluntary Laboratory

Accreditation Program (NVLAP). The

NVLAP procedures are revised to ensure

continued consistency with

international standards and guidelines

currently set forth in the International

Organization for Standardization (ISO)/

International Electrotechnical

Commission (IEC) 17025:1999, General

requirements for the competence of

testing and calibration laboratories, and

ISO/IEC Guide 58:1993, Calibration and

testing laboratory accreditation

systems—General requirements for

operation and recognition, thereby

facilitating and promoting acceptance of

test and calibration results between

countries to avoid barriers to trade.

Provisions in this regard will facilitate

cooperation between laboratories and

other bodies, assist in the exchange of

information and experience and in the

harmonization of standards and

procedures, and establish the basis for

national and international mutual

recognition arrangements.

In addition, NIST is reorganizing and

simplifying part 285 for ease of use and

understanding. While the existing

regulations accurately set forth the

NVLAP procedures, the regulations

themselves are complex and difficult to

understand. In an effort to simplify the

format and make the regulations more

user friendly, NIST is rewriting in plain

English and consolidating sections

previously contained in subparts A

through C of part 285.

DATES: This rule is effective June 29,

2001.

ADDRESSES: David F. Alderman, Chief,

National Voluntary Laboratory

Accreditation Program, National

Institute of Standards and Technology,

100 Bureau Drive, Stop 2140,

Gaithersburg, MD 20899–2140.

FOR FURTHER INFORMATION CONTACT:

David F. Alderman, Chief, National

Voluntary Laboratory Accreditation

Program, 301–975–4016.

SUPPLEMENTARY INFORMATION:

Background

Part 285 of title 15 of the Code of

Federal Regulations sets out procedures

and general requirements under which

the National Voluntary Accreditation

Program (NVLAP) operates as an

unbiased third party to accredit both

testing and calibration laboratories.

The NVLAP procedures were first

published in the Federal Register as

part 7 of title 15 of the Code of Federal

Regulations (CFR) (41 FR 8163,

February 25, 1976). On June 2, 1994, the

procedures were redesignated as part

285 of title 15 of the CFR, expanded to

29220 Federal Register / Vol. 66, No. 104 / Wednesday, May 30, 2001 / Rules and Regulations

include accreditation of calibration

laboratories, and updated to be

compatible with conformity assurance

and assessment concepts, including the

provisions contained in ISO/IEC Guide

25:1990, General requirements for the

competence of calibration and testing

laboratories (59 FR 22742, May 3, 1994).

Description and Explanation of

Proposed Changes

The NVLAP procedures found at 15

CFR Part 285 are revised to ensure

continued consistency with

international standards and guidelines.

At this time, the management and

technical requirements of the new

standard, ISO/IEC 17025:1999, General

requirements for the competence of

testing and calibration laboratories, and

the internationally accepted

requirements for accrediting bodies,

including those found in ISO/IEC Guide

58:1993, Calibration and testing

laboratory accreditation systems—

General requirements for operation and

recognition, are applicable; however, the

revisions include provisions allowing

for updated versions and replacements

of these documents. ISO/IEC

17025:1999 supersedes and replaces

ISO/IEC Guide 25:1990, upon which the

current NVLAP accreditation criteria are

based.

In addition, NIST is reorganizing and

simplifying part 285 for ease of use and

understanding. While the existing

regulations accurately set forth the

NVLAP procedures, the regulations

themselves are complex and difficult to

understand. In an effort to simplify the

format and make the regulations more

user friendly, NIST is rewriting in plain

English and consolidating sections

previously contained in subparts A

through C of part 285. Since the

consolidated format does not require

subparts, NIST is removing subparts A

through C. The removal of these

subparts will not alter the operations of

NVLAP, but will promote ease of use

and facilitate understanding of the

program’s operations.

To ensure continued consistency with

applicable international standards and

guidelines, NIST is removing subpart D,

Conditions and Criteria for

Accreditation, and is applying the

conditions and criteria contained in the

applicable internationally accepted

documents as they are revised from time

to time, as set forth in new section

285.14, Criteria for Accreditation.

Summary of Comments

On November 7, 2000, the National

Institute of Standards and Technology

published a notice of proposed

rulemaking in the Federal Register (65

FR 66659). In response, four letters were

received from operators of NVLAPaccredited testing laboratories. The

respondents applauded NIST’s efforts to

revise NVLAP procedures to ensure

consistency with ISO/IEC standards and

guides and make several specific

recommendations, which are addressed

below.

Comment. The four respondents

noted that the proposed rule references

the term NVLAP as a federally registered

certification mark, and stated that this is

the first instance they had ever seen the

mark of an accreditation body referred

to as a certification mark and also one

that is federally registered. The

respondents recommended that an

explanation be given on why this

reference is made and what its impact

will be on NVLAP-accredited

laboratories.

Response: The name ‘‘National

Voluntary Laboratory Accreditation

Program’’ and the acronym ‘‘NVLAP’’

have been in use since the

announcement of the formal inception

of the program on February 25, 1976.

The NVLAP logo was first used in

interstate commerce on March 17, 1980,

and was first registered with the U.S.

Patent and Trademark Office as a

certification mark on March 22, 1983.

Application for registration of the term

NVLAP as a certification mark was filed

with the U.S. Patent and Trademark

Office on November 30, 2000.

Registration of the term NVLAP is meant

to strengthen NIST’s rights in the mark.

The registration will have no impact on

NVLAP-accredited laboratories.

The final rule, section 285.3,

Referencing NVLAP accreditation,

states: ‘‘NIST reserves the right to

control the quality of the use of term

NVLAP and of the logo itself.’’ Control

of the term and the logo benefits

NVLAP-accredited laboratories by

promoting confidence that test and

calibration reports endorsed with these

certification marks will be accepted by

economies throughout the world.

Comment: Three respondents wrote

that under the proposed new

regulations, the termination of a LAP

rests with the Chief of NVLAP, and that

current regulations require the

determination to be made by the

Director. Concern was expressed that

the proposed rule removes a layer of

approval needed to terminate a LAP and

leaves the decision solely in the hands

of the Chief of NVLAP.

Response. There is no change to

current regulations, which already state

that the Chief of NVLAP may terminate

a LAP when the Chief of NVLAP

determines that a need no longer exists

to accredit laboratories for the services

covered under the scope of the LAP.

The final rule that amended the NVLAP

procedures by replacing the Director of

NIST with the Chief of NVLAP in

§ 285.19(a) and (c), was published in the

Federal Register (64 FR 59616) on

November 3, 1999, and became effective

on that date. The regulations were

amended to conform with the delegation

of authority at NIST. Subsequently, on

November 18, 1999, a NVLAP Policy

Guide (PG–3–1999) was published to

notify all NVLAP-enrolled laboratories

of the change in the regulations,

reflecting the delegation of certain

designated authorities.

Comment. The respondents stated

that under the proposed regulation it

appears that renewal responsibilities

have been shifted entirely to the

accredited laboratory. The respondents

recommended that the proposed

regulations be clarified to indicate who

has the responsibility for initiating the

renewal of a laboratory’s accreditation.

Response. NVLAP will continue to

notify accredited laboratories when it is

time to renew their accreditations; there

will be no change in the renewal

process. The regulations were simplified

and reorganized for the purposes

presented in the Summary of this notice

and, therefore, no longer describe in

detail the steps of the accreditation

process. Renewing laboratories will

continue to be sent a renewal

application package before the

expiration date of their accreditations to

allow sufficient time to complete the

renewal process. (See Section 3.6.1 of

NIST Handbook 150, 2001 Edition.)

Comments. Three respondents

expressed concern about the addition of

§ 285.12, Monitoring visits, to the

regulation, stating that the problem with

unannounced monitoring visits by any

accreditation body of an unlimited

scope is the major disruption of the

normal operations of the laboratory.

These respondents requested that

NVLAP reconsider the type of items that

would be appropriate for unannounced

monitoring visits and those that would

be appropriate for announced

monitoring visits and reduce them to a

written list.

Reponse. NIST added § 285.12 to the

revised rule to be consistent with

NVLAP’s actual practice and current

procedures, which were previously set

forth in the 1994 edition of NIST

Handbook 150, Sec. 285.22(b)(6),

Monitoring visits. This procedure has

been added to the regulations to better

notify the public of NVLAP’s

procedures.

Use of the term ‘‘monitoring visit’’

dates back to 1982, when NIST

published a notice in the Federal

Federal Register / Vol. 66, No. 104 / Wednesday, May 30, 2001 / Rules and Regulations 29221

Register to update its announcement of

the availability of laboratory

accreditation programs for certain fields

of testing (44 FR 9492, March 5, 1982).

Under Supplementary Information,

Unnannounced Visits, this notice stated:

* * * ‘‘In addition to regularly scheduled

laboratory visits, unannounced visits * * *

may be initiated * * *’’ (45 FR 5572–5598).

Experience has shown that in order to insure

the availability of management and staff to

demonstrate equipment and perform tests, a

call to the laboratory from one day to one

week before the visit may be necessary.

Therefore, in the future these unannounced

visits will be known as ‘‘monitoring visits’’

which may or may not be announced in

advance of the visit. Monitoring visits may

occur at any time. These visits may be

initiated based on random selection or in

response to a specific need because, in the

opinion of DOC, the laboratory appears to

have a testing problem. In general, a

complete review of the laboratory is not

contemplated for the monitoring visit. In the

case of randomly selected visits, key aspects

of the laboratory will be checked. In the case

of visits due to an apparent problem, aspects

relating to the problem, and possibly other

selected key aspects as well, will be checked.

Surveillance of laboratories is a

requirement of ISO/IEC Guide 58:1993,

clause 6.7. NVLAP anticipates that this

requirement will be expanded to

include ‘‘short notice visits’’ when ISO/

IEC Guide 58 is replaced byISO/IEC

17011, General requirements for bodies

providing assessment and accreditation

of conformity assessment bodies (now

in draft status). NVLAP will continue to

minimize disruptions to laboratories

during on-site visits.

Comments. The four respondents

stated that the due process protections

under § 285.13, Denial, suspension,

revocation or termination of

accreditation, have been changed

substantially from the current

regulations, including the elimination of

consultation with the laboratory prior to

suspension. The respondents also said

that it appears there is no recourse for

a laboratory if it feels that it has been

treated unfairly by the NVLAP auditor.

Response. The phrase ‘‘after

consultation with the laboratory’’ was

removed because consultation is

defined as a seeking of opinion or

advice and is, therefore, an

inappropriate choice of words for this

requirement. There are many cases

where consultation prior to suspension

is inappropriate, such as the failure of

an accredited laboratory to pass two

rounds of proficiency testing within a

set of three consecutive rounds in the

Bulk Asbestos Fiber Analysis LAP. In

this example, suspension is immediate

and automatic because the laboratory

failed to meet the program proficiency

testing requirement. (See NIST

Handbook 150–3 (1994): NVLAP Bulk

Asbestos Analysis).

Under section 285.13(b)(1) of the

revised rule, NVLAP will continue to

clearly state its requirements, to notify

a laboratory of the reasons for and

conditions of the suspension, and to

specify the action(s) the laboratory must

take to have its accreditation reinstated.

Except for the deletion of the term

‘‘consultation,’’ the procedures

contained in § 285.13 of the revised rule

remain the same as those contained in

section 285.24(c) of the 1994 rule. Some

minor changes were made to harmonize

the wording of the proposed rule with

NVLAP Policy Guide PG–2–1998,

Accreditation Documents for

Laboratories Whose Accreditation Has

Been Suspended, Revoked, or Otherwise

Terminated, issued to NVLAPaccredited laboratories on May 29, 1998.

If a laboratory feels that it has been

treated unfairly by a NVLAP assessor,

the laboratory may state its grievance in

its response to the assessment report or

in a letter of complaint to NVLAP.

Complaints from laboratories are

addressed in accordance with NVLAP’s

quality system procedure for

complaints, disputes and appeals,

which applies to complaints concerning

the handling of accreditation matters

from laboratories or from users of

NVLAP accredited laboratories. Copies

of this procedure may be obtained

pursuant to § 285.15(a) of the revised

regulation.

Paperwork Reduction Act

The information collection

requirements contained in this rule have

been approved by the Office of

Management and Budget under the

Paperwork Reduction Act and have

been assigned OMB control number

0693–0003.

Executive Order 12866

This notice has been determined to be

not significant for purposes of Executive

Order 12866.

Regulatory Flexibility Act

The Chief Counsel for Regulation of

the Department of Commerce has

certified to the Chief Counsel for

Advocacy of the Small Business

Administration that this rule will not

have a significant economic impact on

a substantial number of small entities

for the following reasons: (1) The

regulation is procedural and has no

impact on any entity unless that entity

chooses to participate, in which case,

the cost to any participant is the same,

small cost ($500/application, other

associated costs cannot be projected

because they are dependent upon the

LAP in which an entity is participating,

and in some cases LAPs have not yet

been established) for any size

participant; (2) access to NVLAP’s

accreditation system is not conditional

upon the size of a laboratory or

membership of any association or group,

nor are there undue financial conditions

to restrict participation; and (3) the

technical components of NVLAP, that

is, the specific technical criteria that

individual laboratories are accredited

against, are not significantly changed by

this rule.

List of Subjects in 15 CFR Part 285

Accreditation, Business and industry,

Calibration, Commerce, Conformity

assessment, Laboratories, Measurement

standards, Testing.

Dated: May 22, 2001.

Karen H. Brown,

Deputy Director.

For reasons set forth in the preamble,

title 15 of the Code of Federal

Regulations is amended as follows:

PART 285—NATIONAL VOLUNTARY

LABORATORY ACCREDITATION

PROGRAM

1. The authority citation for Part 285

continues to read as follows:

Authority: 15 U.S.C. 272 et seq.

2. Part 285 is revised to read as

follows;

PART 285—NATIONAL VOLUNTARY

LABORATORY ACCREDITATION

PROGRAM

Sec.

285.1 Purpose.

285.2 Confidentiality.

285.3 Referencing NVLAP accreditation.

285.4 Establishment of laboratory

accreditation programs (LAPs) within

NVLAP.

285.5 Termination of a LAP.

285.6 Application for accreditation.

285.7 Assessment.

285.8 Proficiency testing.

285.9 Granting accreditation.

285.10 Renewal of accreditation.

285.11 Changes to scopes of accreditation.

285.12 Monitoring visits.

285.13 Denial, suspension, revocation or

termination of accreditation.

285.14 Criteria for accreditation.

285.15 Obtaining documents.

§ 285.1 Purpose.

The purpose of part 285 is to set out

procedures and general requirements

under which the National Voluntary

Laboratory Accreditation Program

(NVLAP) operates as an unbiased third

party to accredit both testing and

calibration laboratories. Supplementary

technical and administrative

29222 Federal Register / Vol. 66, No. 104 / Wednesday, May 30, 2001 / Rules and Regulations

requirements are provided in supporting

handbooks and documents as needed,

depending on the criteria established for

specific Laboratory Accreditation

Programs (LAPs)

§ 285.2 Confidentiality.

To the extent permitted by applicable

laws, NVLAP will protect the

confidentiality of all information

obtained relating to the application, onsite assessment, proficiency testing,

evaluation, and accreditation of

laboratories.

§ 285.3 Referencing NVLAP accreditation.

The term NVLAP (represented by the

NVLAP logo) is a federally registered

certification mark of the National

Institute of Standards and Technology

and the federal government, who retain

exclusive rights to control the use

thereof. Permission to use the term and/

or logo is granted to NVLAP-accredited

laboratories for the limited purposes of

announcing their accredited status, and

for use on reports that describe only

testing and calibration within the scope

of accreditation. NIST reserves the right

to control the quality of the use of the

term NVLAP and of the logo itself.

§ 285.4 Establishment of laboratory

accreditation programs (LAPs) within

NVLAP.

NVLAP establishes LAPs in response

to legislative actions or to requests from

private sector entities and government

agencies. For legislatively mandated

LAPs, NVLAP shall establish the LAP.

For requests from private sector entities

and government agencies, the Chief of

NVLAP shall analyze each request, and

after consultation with interested parties

through public workshops and other

means shall establish the requested LAP

if the Chief of NVLAP determines there

is need for the requested LAP.

§ 285.5 Termination of a LAP.

(a) The Chief of NVLAP may

terminate a LAP when he/she

determines that a need no longer exists

to accredit laboratories for the services

covered under the scope of the LAP. In

the event that the Chief of NVLAP

proposes to terminate a LAP, a notice

will be published in the Federal

Register setting forth the basis for that

determination.

(b) When a LAP is terminated, NVLAP

will no longer grant or renew

accreditations following the effective

date of termination. Accreditations

previously granted shall remain

effective until their expiration date

unless terminated voluntarily by the

laboratory or revoked by NVLAP.

Technical expertise will be maintained

by NVLAP while any accreditation

remains effective.

§ 285.6 Application for accreditation.

A laboratory may apply for

accreditation in any of the established

LAPs. The applicant laboratory shall

provide a completed application to

NVLAP, pay all required fees and agree

to certain conditions as set forth in the

NVLAP Application for Accreditation,

and provide a quality manual to NVLAP

(or a designated NVLAP assessor) prior

to the assessment process.

§ 285.7 Assessment.

(a) Frequency and scheduling. Before

initial accreditation, during the first

renewal year, and every two years

thereafter, an on-site assessment of each

laboratory is conducted to determine

compliance with the NVLAP criteria.

(b) Assessors. NVLAP shall select

qualified assessors to evaluate all

information collected from an applicant

laboratory pursuant to § 285.6 of this

part and to conduct the assessment on

its behalf at the laboratory and any other

sites where activities to be covered by

the accreditation are performed.

(c) Conduct of assessment. (1)

Assessors use checklists provided by

NVLAP so that each laboratory receives

an assessment comparable to that

received by others.

(2) During the assessment, the

assessor meets with management and

laboratory personnel, examines the

quality system, reviews staff

information, examines equipment and

facilities, observes demonstrations of

testing or calibrations, and examines

tests or calibration reports.

(3) The assessor reviews laboratory

records including resumes, job

descriptions of key personnel, training,

and competency evaluations for all staff

members who routinely perform, or

affect the quality of the testing or

calibration for which accreditation is

sought. The assessor need not be given

information which violates individual

privacy, such as salary, medical

information, or performance reviews

outside the scope of the accreditation

program. The staff information may be

kept in the laboratory’s official

personnel folders or separate folders

that contain only the information that

the NVLAP assessor needs to review.

(4) At the conclusion of the

assessment, the assessor conducts an

exit briefing to discuss observations and

any deficiencies with the authorized

representative who signed the NVLAP

application and other responsible

laboratory staff.

(d) Assessment report. At the exit

briefing, the assessor submits a written

report on the compliance of the

laboratory with the accreditation

requirements, together with the

completed checklists, where

appropriate.

(e) Deficiency notification and

resolution. (1) Laboratories are informed

of deficiencies during the on-site

assessment, and deficiencies are

documented in the assessment report

(see paragraph (d) of this section).

(2) A laboratory shall, within thirty

days of the date of the assessment

report, provide documentation that the

specified deficiencies have either been

corrected and/or a plan of corrective

actions as described in the NVLAP

handbooks.

(3) If substantial deficiencies have

been cited, NVLAP may require an

additional on-site assessment, at

additional cost to the laboratory, prior to

granting accreditation. All deficiencies

and resolutions will be subject to

thorough review and evaluation prior to

an accreditation decision.

(4) After the assessor submits their

final report, NVLAP reviews the report

and the laboratory’s response to

determine if the laboratory has met all

of the on-site assessment requirements.

§ 285.8 Proficiency testing.

(a) NVLAP proficiency testing is

consistent with the provisions

contained in ISO/IEC Guide 43 (Parts 1

and 2), Proficiency testing by

interlaboratory comparisons, where

applicable, including revisions from

time to time. Proficiency testing may be

organized by NVLAP itself or a NVLAPapproved provider of services.

Laboratories must participate in

proficiency testing as specified for each

LAP in the NVLAP program handbooks.

(b) Analysis and reporting.

Proficiency testing data are analyzed by

NVLAP and reports of the results are

made known to the participants.

Summary results are available upon

request to other interested parties; e.g.,

professional societies and standards

writing bodies. The identity and

performance of individual laboratories

are kept confidential.

(c) Proficiency testing deficiencies. (1)

Unsatisfactory participation in any

NVLAP proficiency testing program is a

technical deficiency which must be

resolved in order to obtain initial

accreditation or maintain accreditation.

(2) Proficiency testing deficiencies are

defined as, but not limited to, one or

more of the following:

(i) Failure to meet specified

proficiency testing performance

requirements prescribed by NVLAP;

(ii) Failure to participate in a regularly

scheduled ‘‘round’’ of proficiency

Federal Register / Vol. 66, No. 104 / Wednesday, May 30, 2001 / Rules and Regulations 29223

testing for which the laboratory has

received instructions and/or materials;

(iii) Failure to submit laboratory

control data as required; and

(iv) Failure to produce acceptable test

or calibration results when using NIST

Standard Reference Materials or special

artifacts whose properties are wellcharacterized and known to NIST/

NVLAP.

(3) NVLAP will notify the laboratory

of proficiency testing deficiencies and

actions to be taken to resolve the

deficiencies. Denial or suspension of

accreditation will result from failure to

resolve deficiencies.

§ 285.9 Granting accreditation.

(a) The Chief of NVLAP is responsible

for all NVLAP accreditation actions,

including granting, denying, renewing,

suspending, and revoking any NVLAP

accreditation.

(b) Initial accreditation is granted

when a laboratory has met all NVLAP

requirements. One of four accreditation

renewal dates (January 1, April 1, July

1, or October 1) is assigned to the

laboratory and is usually retained as

long as the laboratory remains in the

program. Initial accreditation is granted

for a period of one year; accreditation

expires and is renewable on the

assigned date.

(c) Renewal dates may be reassigned

to provide benefits to the laboratory

and/or NVLAP. If a renewal date is

changed, the laboratory will be notified

in writing of the change and any related

adjustment in fees.

(d) When accreditation is granted,

NVLAP shall provide to the laboratory

a Certificate of Accreditation and a

Scope of Accreditation,

§ 285.10 Renewal of accreditation.

(a) An accredited laboratory must

submit both its application for renewal

and fees to NVLAP prior to expiration

of the laboratory’s current accreditation

to avoid a lapse in accreditation.

(b) On-site assessments of currently

accredited laboratories are performed in

accordance with the procedures in

§ 285.7. If deficiencies are found during

the assessment of an accredited

laboratory, the laboratory must follow

the procedures set forth in § 285.7(e)(2)

or face possible suspension or

revocation of accreditation.

§ 285.11 Changes to scope of

accreditation.

A laboratory may request in writing

changes to its Scope of Accreditation. If

the laboratory requests additions to its

Scope, it must meet all NVLAP criteria

for the additional tests or calibrations,

types of tests or calibrations, or

standards. The need for an additional

on-site assessment and/or proficiency

testing will be determined on a case-bycase basis.

§ 285.12 Monitoring visits.

(a) In addition to regularly scheduled

assessments, monitoring visits may be

conducted by NVLAP at any time

during the accreditation period. They

may occur for cause or an a random

selection basis. While most monitoring

visits will be scheduled in advance with

the laboratory, NVLAP may conduct

unannounced monitoring visits.

(b) The scope of a monitoring visit

may range from checking a few

designated items to a complete review.

The assessors may review deficiency

resolutions, verify reported changes in

the laboratory’s personnel, facilities, or

operations, or administer proficiency

testing, when appropriate.

§ 285.13 Denial, suspension, revocation,

or termination of accreditation.

(a) A laboratory may at any time

voluntarily terminate its participation

and responsibilities as an accredited

laboratory by advising NVLAP in

writing of its desire to do so.

(b) If NVLAP finds that an accredited

laboratory does not meet all NVLAP

requirements, has violated the terms of

its accreditation, or does not continue to

comply with the provisions of these

procedures, NVLAP may suspend the

laboratory’s accreditation, or advise of

NVLAP’s intent to revoke accreditation.

(1) If a laboratory’s accreditation is

suspended, NVLAP shall notify the

laboratory of that action stating the

reasons for and conditions of the

suspension and specifying the action(s)

the laboratory must take to have its

accreditation reinstated. Conditions of

suspension will include prohibiting the

laboratory from using the NVLAP logo

on its test or calibration reports,

correspondence, or advertising during

the suspension period in the area(s)

affected by the suspension.

(2) NVLAP will not require a

suspended laboratory to return its

Certificate and Scope of Accreditation,

but the laboratory must refrain from

using the NVLAP logo in the area(s)

affected until such time as the

problem(s) leading to the suspension

has been resolved. When accreditation

is reinstated, NVLAP will authorize the

laboratory to resume testing or

calibration activities in the previously

suspended area(s) as an accredited

laboratory.

(c) If NVLAP proposes to deny or

revoke accreditation of a laboratory,

NVLAP shall inform the laboratory of

the reasons for the proposed denial or

revocation and the procedure for

appealing such a decision.

(1) The laboratory will have thirty

days from the date of receipt of the

proposed denial or revocation letter to

appeal the decision to the Director of

NIST. If the laboratory appeals the

decision to the Director of NIST, the

proposed denial or revocation will be

stayed pending the outcome of the

appeal. The proposed denial or

revocation will become final through

the issuance of a written decision to the

laboratory in the event that the

laboratory does not appeal the proposed

denial or revocation within the thirtyday period.

(2) If accreditation is revoked, the

laboratory may be given the option of

voluntarily terminating the

accreditation.

(3) A laboratory whose accreditation

has been revoked must cease use of the

NVLAP logo on any of its reports,

correspondence, or advertising related

to the area(s) affected by the revocation.

If the revocation is total, NVLAP will

instruct the laboratory to return its

Certificate and Scope of Accreditation

and to remove the NVLAP logo from all

test or calibration reports,

correspondence, or advertising. If the

revocation affects only some, but not all

of the items listed on a laboratory’s

Scope of Accreditation, NVLAP will

issue a revised Scope that excludes the

revoked area(s) in order that the

laboratory might continue operations in

accredited areas.

(d) A laboratory whose accreditation

has been voluntarily terminated, denied

or revoked, may reapply and be

accredited if the laboratory:

(1) Completes the assessment and

evaluation process; and

(2) Meets the NVLAP conditions and

criteria for accreditation.

§ 285.14 Criteria for accreditation.

The requirements for laboratories to

be recognized by the National Voluntary

Laboratory Accreditation Program as

competent to carry out tests and/or

calibrations are contained in clauses 4

and 5 of ISO/IEC 17025, General

requirements for the competence of

testing and calibration laboratories,

including revisions from time to time.

§ 285.15 Obtaining documents.

(a) Application forms, NVLAP

handbooks, and other NVLAP

documents and information may be

obtained by contacting the NVLAP,

National Institute of Standards and

Technology, 100 Bureau Drive, Mail

Stop 2140, Gaithersburg, Maryland

20899–2140; phone: 301–975–4016; fax:

301–926–2884; e-mail: nvlap@nist.gov.

29224 Federal Register / Vol. 66, No. 104 / Wednesday, May 30, 2001 / Rules and Regulations

1Unless otherwise noted, all references to rule

31a–2 or rule 204–2, or to any paragraph of those

rules, will be to 17 CFR 270.31a–2 and 17 CFR

275.204–2, as amended by this release.

2Electronic Signatures in Global and National

Commerce Act, Pub. L. No. 106–229, 114 Stat. 464

(2000) (15 U.S.C. 7001), Preamble.

3See Electronic Recordkeeping by Investment

Companies and Investment Advisers, Investment

Company Act Release No. 24890 (Mar. 13, 2001) [66

FR 15369 (Mar. 19, 2001)] (‘‘Proposing Release’’) at

n.4 and accompanying text.

4See Oppenheimer Management Corporation,

SEC No-Action Letter (Aug. 28, 1995); DST

Systems, Inc., SEC No-Action Letter (Feb. 2, 1993).

5Proposing Release, supra note 3, at nn. 7–12 and

accompanying text.

6The comment letters are available for public

inspection and copying in the Commission’s Public

Reference Room, 450 Fifth Street, NW.,

Washington, DC (File No. S7–06–01).

7Rules 31a–2(f)(3) and 204–2(g)(3). We requested

commenters to address whether rules 31a–2 and

204–2 should require funds and advisers to

preserve records in a non-rewriteable, non-erasable

(also known as ‘‘write once, read many,’’ or

‘‘WORM’’) format. Commenters concurred in our

preliminary assessment, at the proposing stage, that

the costs of such a requirement would be likely to

outweigh the benefits (with respect to advisers and

funds). Based on our consideration of costs,

benefits, and other factors described in the

proposing release we are not adopting such a

requirement at this time. We recognize that the

standards for electronic recordkeeping we are

adopting for funds and advisers are different from

the rules that we have adopted for broker-dealers,

which require brokerage records to be preserved in

a WORM format. We have not experienced any

significant problems with funds or advisers altering

stored records. Moreover, most advisory and mutual

fund arrangements involve multiple parties (e.g.,

brokers, custodians, transfer agents), each with its

own, often parallel, recordkeeping requirement. As

a result, our compliance examiners typically have

an alternative means to verify the accuracy of

adviser and fund records. In light of these factors,

the costs of requiring funds and advisers to invest

in new electronic recordkeeping technologies may

not be justified.

(b) Copies of all ISO/IEC documents

are available from the American

National Standards Institute, 11 West

42nd Street, 13th Floor, New York, New

York 10036; phone: 212–642–4900; fax:

212–398–0023; web site: www.ansi.org.

You may inspect copies of all applicable

ISO/IEC documents at the National

Voluntary Laboratory Accreditation

Program, National Institute of Standards

and Technology, 820 West Diamond

Avenue, Room 297, Gaithersburg, MD.

[FR Doc. 01–13448 Filed 5–29–01; 8:45 am]

BILLING CODE 3510–13–M

SECURITIES AND EXCHANGE

COMMISSION

17 CFR Parts 270 and 275

[Release Nos. IC–24991 and IA–2945; File

No. S7–06–01]

RIN 3235–AI05

Electronic Recordkeeping by

Investment Companies and Investment

Advisers

AGENCY: Securities and Exchange

Commission.

ACTION: Final rule.

SUMMARY: The Securities and Exchange

Commission is adopting amendments to

rules under the Investment Company

Act of 1940 and the Investment

Advisers Act of 1940 that permit

registered investment companies and

registered investment advisers to

preserve required records using

electronic storage media such as

magnetic disks, tape, and other digital

storage media. The amendments expand

the ability of advisers and funds to use

electronic storage media to maintain

and preserve records. This release and

these rule amendments respond to the

enactment of the Electronic Signatures

in Global and National Commerce Act,

which encourages federal agencies to

accommodate electronic recordkeeping.

EFFECTIVE DATE: May 31, 2001.

FOR FURTHER INFORMATION CONTACT:

William C. Middlebrooks, Jr., Attorney,

or Martha B. Peterson, Special Counsel,

(202) 942–0690, Office of Regulatory

Policy, Division of Investment

Management, Securities and Exchange

Commission, 450 5th Street, NW.,

Washington, DC 20549–0506.

SUPPLEMENTARY INFORMATION: The

Securities and Exchange Commission

(‘‘Commission’’) is adopting

amendments to rule 31a–2 (17 CFR

270.31a–2) under the Investment

Company Act of 1940 (15 U.S.C. 80a)

(the ‘‘Investment Company Act’’), and

rule 204–2 (17 CFR 275.204–2) under

the Investment Advisers Act of 1940 (15

U.S.C. 80b) (the ‘‘Advisers Act’’).1

Executive Summary

The Commission is adopting

amendments to rules regarding

electronic recordkeeping by registered

investment companies (‘‘funds’’) and

registered investment advisers

(‘‘advisers’’). The federal securities laws

require funds, advisers, and others to

make and keep books and records. The

recordkeeping requirements are a key

part of the Commission’s regulatory

program for funds and advisers, as they

allow us to monitor fund and adviser

operations, and to evaluate their

compliance with federal securities laws.

Last year, Congress passed the

Electronic Signatures in Global and

National Commerce Act (the ‘‘Electronic

Signatures Act,’’ ‘‘Act,’’ or ‘‘ESIGN’’) to

facilitate the use of electronic records

and signatures in interstate and foreign

commerce.2 Consistent with the

purposes and goals of the Electronic

Signatures Act, we are adopting rule

amendments that expand the

circumstances under which funds and

advisers may keep records on electronic

storage media, and clarify and update

our recordkeeping rules. We are also

interpreting rules 31a-2 and 204–2 to be

the exclusive means by which funds

and advisers can comply with the

recordkeeping provisions of the

Electronic Signatures Act.

I. Discussion

A. Amendments to Rules 31a–2 and

204–2

The Commission is amending rules

31a–2 and 204–2 to permit funds and

advisers to keep all of their records in

an electronic format. Prior to today’s

amendments, rules 31a–2 and 204–2

provided that funds and advisers could

keep records on electronic storage

media only if the records were

originally created or received in an

electronic format.3 The Commission’s

staff had issued no-action letters to

conditionally permit funds and advisers

to convert records into an electronic

format and retain them electronically.4

In March of this year we proposed rule

amendments to incorporate these noaction letters into rules 31a–2 and 204–

2, while eliminating many of the

conditions that apply only to electronic

records created from non-electronic

originals. We also proposed to clarify

the obligation of funds and advisers to

provide copies of their records to

Commission examiners, and to

incorporate terminology used in

electronic recordkeeping rules under the

Securities Exchange Act of 1934 into

rules 31a–2 and 204–2.5 We received

seven comment letters addressing the

proposal.6 Commenters supported most

of the proposed amendments, and we

are adopting them substantially as

proposed, with a few changes in

response to concerns expressed by

commenters.

Under revised rules 31a–2 and 204–2,

funds and advisers are permitted to

maintain records electronically if they

establish and maintain procedures: (i)

To safeguard the records from loss,

alteration, or destruction, (ii) to limit

access to the records to authorized

personnel, the Commission, and (in the

case of funds) fund directors, and (iii) to

ensure that electronic copies of nonelectronic originals are complete, true,

and legible.7 In response to a suggestion

of one commenter, we are expanding

rules 31a–2 and 204–2 to include all

records that are required to be