Europa  Public Health  Risk Assessment  Scientific committees  Toxicity, Eco toxicity and the Environment  Opinion English EUROPA > European Commission > Public Health Contact | Search What's new? | Subscribe | Site map | Index Overview of Health policyProgramme 2003 2008Health InformationThreats to healthHealth determinantsEnlargementInternational cooperationDeveloping health indicators and data collectionAnalysing and reporting on healthDissemination of health informationE healthCommitteePrevious Programmes Risk assessment Scientific committees On Toxicity, Ecotoxicity and the Environment Opinions Opinion on Selection of a Community wide mineral oils marking system, (" Euromarker") Safety of the preferred candidate adopted at the 11th CSTEE plenary meeting on the 28th of September 1999 1. Background Certain mineral oils may be used for several different purposes and taxed at different rates of duty. In the case of diesel fuel for road vehicles, it may also be used as heating gas oil and in this case is normally sold a much lower prices. Gas oil for agricultural and marine use may also benefit from reduced tax rates. This being the case, there is a financial incentive to misuse heating fuel as road fuel and most Member States combat this by adding a fiscal mark to fuels released at reduced tax rates.

This fiscal mark consists of two parts. Firstly a tracer chemical is used which can be detected by a simple roadside test using a reagent. In addition, a dye is also used to give an immediate visual indication that the fuel has not borne the full rate of tax.

Council Directive 95/ 60/ EC provides the legal base for the introduction of a standard marking system for use throughout the Community. It was negotiated under the auspices of Article 9 of Council Directive 92/ 81/ EEC ( the mineral oils structures Directive) and was adopted in December 1995. A call for expressions of interest, which listed a number of criteria that should be met, including health and safety provisions, was then issued and a number of products were submitted for consideration. Extensive evaluation and testing was conducted by IRC Ispra and JRMM Geel assisted by the Customs laboratories of the Member States. Combustion testing was also carried out by Stazione Sperimentale per I Combustibili in Milan and this showed no detectable differences between emissions from marked and unmarked fuel.

Following this testing, the Solvent Yellow 124 ( N ethyl N[ 2[ 1( 2 methylpropoxy) ethoxyl] ethyl]  4 phenylazo] benzeneamine] system was selected as that which most closely met the required criteria.

This product is marketed by BASF as Sudan 455 marker and is also marketed by several other manufacturers. It should be noted that the selection of mineral oil marking systems covers only the standardisation of the tracer chemical because the type and colour of dye remains a matter for individual Member States. However, two Member States have concerns about this product, The UK which has a problem with illicit removal (' laundering') and feels this is too easily achieved with this product and Denmark which has health and safety concerns.

The Danish concerns stem from the chemical structures as an azo dye and from the problems in Sweden that were initially suspected to have been caused by the introduction of SY124 but these were eventually attributed to a change in fuel specification following a Swedish study. There were plans to introduce SY124 in Denmark at the end of 1997 but these were abandoned at the last minute due to a press campaign claiming that the product posed an additional health risk compared to unmarked products. Denmark is now seeking confirmation that the marked fuel is no more harmful than an unmarked product.

The product has been in use for some 10 years in a number of Member States. Because only some testing has been carried out by the manufacturer as well as during the Swedish investigation, Denmark still has reservations. These centre on the reaction of the SY124 system and the potential reaction with the dyes used.

The CSTEE has been asked to examine this problem and if possible to conclude that the risks to human health from the marked product are no greater than those posed by the unmarked fuel. The impact on the environment has not been addressed.

Originally the following background material has been provided to the CSTEE:

1. Preliminary evaluation of the product by IRMM Geel ( CSTEE/ 99/ 3 Add. 1)

2. Results of the SSC combustion tests ( CSTEE/ 99/ 3 Add. 2)

3. Excise Committee working paper CED 273 ( CSTEE/ 99/ 3 Add. 3)

4. Correspondence from Danish Environment Service ( CSTEE/ 99/ 3 Add. 4)

5. Summary of Swedish Gr n diesel report ( CSTEE/ 99/ 3 Add. 5)

6. BASF study report on acute toxicity, skin irritation and eye irritation ( CSTEE/ 99/ 3 Add. 7/ C)

7. BASF study report on mutagenicity test using micro organisms ( CSTEE/ 99/ 3 Add. 7/ D)

8. BASF study report on Metaphase analysis of chromosomal aberration in cultured mammalian cells ( CSTEE/ 99/ 3 Add. 7/ E)

9. Publication of Fischer and Bjarnson ( 1996) ( CSTEE/ 99/ 3 Add. 7/ F)

Additional information received subsequently is given in the text. Information on analytical procedures also provided ( CSTEE/ 99/ 3 Add. 8 10) are not used in this report.

In October 1993, a marking system was introduced in Sweden for diesel oils used in working machines and for the purpose of house heating. The added dyes are:

Solvent Yellow 124 ( Somalia Yellow, T10 Yellow LBN) CAS 34432 92 3 Solvent Blue 79 ( Sudan Blue) CAS 64553 79 3, 90170 70 0 Solvent Blue 98 ( Automate Blue) CAS 74499 36 8 After the introduction of the coloured oil products, reports of complaints and symptoms started to appear from people occupationally exposed, especially among workers using wood harvesters. Some of the symptoms reported were headache and skin and airway irritations. This raised concern about the health effects of the added colours, and led the Swedish Government to appoint a commission to evaluate the marker system. The commission initiated several studies and published a report ( Gr n diesel 1995). The Swedish commission considered it unlikely that the health problems reported in conjunction with exposure to coloured diesel oil could be attributed to the markers and dyes used. The inherent mutagenic and environmentally hazardous properties of the dyes as such, however, do mean that alternative markers and dyes would be desirable. None of the alternative substances used for similar purposes in other countries appeared to offer any advantages. The Swedish commission emphasised that when better alternatives are available in terms of mutagenicity and environmental impact, they must be introduced according to the substitution principle. The low concentrations of the substances up to 6 ppm in diesel oil and the practically total combustion do mean, however, that the short term and long term risks, seen in terms of occupational health, may be considered extremely small when the markers and dyes are used for the intended purpose.

The CSTEE used this data and other found in the literature or provided by BASF to evaluate the toxicology of the dye Solvent Yellow 124 and its contribution to the overall toxicology of diesel oils.

2. Toxicology of Solvent Yellow 124:

Solvent Yellow is an azo dye and a structural analogue of the carcinogenic p dimethylaminoazobenzene. The other dyes Solvent Blue 79 and Solvent Blue 98 are antraquinone derivatives. All compounds are genotoxic in in vitro test systems.

Acute Toxicity The LD50 in rats after oral application is approximately 7.5 ml/ kg ( CSTEE/ 99/ 3  Add. 7/ C).

Skin Irritation A patch test, which has been performed according to FDA with 6 rabbits showed slightly irritating properties. 0.5 ml of the compound has been applied to the shaved dorsal skin in part intact, in part scarified. The macroscopic investigations were performed 24 and 72 hrs after application. No erythema or scabs occurred in the intact and scarified skin, whereas oedema was found in the scarified skin ( CSTEE/ 99/ 3  Add. 7/ C). Eye Irritation The test has been performed according to FDA and showed a slightly irritating effect. 0.1 ml have been applied to the right eyes of 6 albino rabbits which thereafter have been observed up to 7 days. The maximal effect has been seen at 24 hrs ( CSTEE/ 99/ 3  Add. 7/ C).

In vitro Genotoxicity Tests The chemical has been tested using S. typhimurium strains TA 98, 100, 1535, and 1537 as well as E. coli WP2uvrA with and without metabolic activation. The compound has been applied at 50, 100, 500, 1000, and 5000 m g/ plate. A dose dependent increase in the number of reverting colonies from about 30 to about 170 per plate was seen in TA 98 strains in the presence of metabolic activation ( CSTEE/ 99/ 3  Add. 7/ D).

In a fibroblastic cell line derived from Chinese hamster lung ( CHL/ IU) cells the compound did not induce chromosome aberrations. Maximum concentrations have been 625 m g/ ml during continuous incubation for 24 and 48 hrs without S 9 metabolising system and for 18 hrs in the presence of S 9 ( The Centre of Japan Biological Chemistry 1988) ( CSTEE/ 99/ 3  Add. 7/ E).

Skin sensitisation and Irritation of 3 diesel oil classes and three indicator dyes ( Fischer and Bjarnason 1996):

Three dyes, Solvent Yellow 124, Solvent Blue 79 and 89, have been tested as individual compounds or in the 3 diesel fuels MK1, MK2, and MK3 ( environmental classes I, II and III).

The individual dyes in petrolatum up to 10 % ( v/ v) did not induce irritation in 15 volunteers. Three individuals were tested with the dyes as delivered and two of these showed discrete erythematous reactions to Solvent Blue 98 ( 60 % in naphtha). The other dyes did not induce reactions at full strength. In experiments with 15 volunteers and 15 workers who had previously reported skin diseases from green diesel, the Diesel oils of environmental classes I and II proved to be strong irritants after 24 h exposure and have been more irritating than Diesel oil class III. The latter is an elder formulation with higher content of aromatic hydrocarbons and higher viscosity. Presence of one, two or three dyes at concentrations up to 6 ppm ( Solvent Yellow 124, 3 5 ppm Solvent Blue 79 and 98) did not change the irritant properties of the Diesel fuels. Urticarial reactions have not been observed with the single dyes at 10 v/ v % in 4 volunteers, nor in 15 volunteers exposed to Diesel fuels with and without dyes.

In the 15 men with previous skin disease the same differences of irritancy of the Diesel oils occurred as in the control persons and no contact allergy or urticaria was observed due to the dyes or dyed diesel oils using the different conditions.

It is concluded that the skin diseases which have been preferentially observed in unprotected workers which were directly exposed to " green Diesel" are unlikely to be due to the dyes. It has also been reported that these effects have not been seen when the workers handled the Diesel using protective measures as recommended.

The authors also conclude that the irritation reported from " green diesel" is probably due to the change from " heavier" to " lighter" oil, which may be more irritating to the skin, at the same time that dyes were added to distinguish oils meant to be used for different purposes.

3. Combustion products ( Gr n Diesel report)

Health problems were also reported concerning eye and upper respiratory tract irritation, headaches and tiredness after exposure to exhausts from the combustion of coloured oil. A questionnaire was sent out to 281 drivers of wood harvesters in a northern part of Sweden. 83 of those reported some health problems in connection with coloured diesel oil. Eventually,

16 machine drivers along with 16 controls took part in an inhalation study. They were exposed during 1 h to diluted exhausts ( 0,25 %) from the combustion of coloured and uncoloured diesel oil of environmental class I and class II.

There were no significant effects on lung function, airway reactivity or performance in psychometric tests from the exposure to diluted diesel exhaust. A slight increase in inflammatory markers in nasal lavage was noted in the machine drivers group, only after the exposure to exhausts from environmentally class II non coloured diesel. The machine drivers group experienced a higher rate of symptoms such as headache, cough, and eye, nose and throat irritation after exposure to diesel exhausts compared to clean air, and the control persons noted the smell of diesel exhaust. However, there was no difference in symptoms between coloured and non coloured fuel ( Nielsson et al 1994).

Chemical analysis and mutagenicity tests on exhausts from coloured and non coloured environmental class I diesel showed no significant differences. The fraction of unburnt Solvent Yellow 124 in the emissions from a diesel engine and from a domestic boiler was shown to be less than 0.01 % and 0.0001 %, respectively ( Gr gg et al 1995).

4. Toxicology of diesel fuels and heating oils ( CONCAVE 1996)

Gas oil products comprise among others automotive fuels, heating oils and marine fuel. These oils are complex and contain variable mixtures of hydrocarbons, predominantly of carbon range C11 to C25 and boiling over a temperature interval 150 to 450 C. Automotive fuels for diesel engines are market as automotive gas oil, automotive diesel fuel, diesel fuel No. 2 and rail road engine gas oil.

Gas oil products contain straight and branched chain alkanes ( paraffins), cycloalkanes ( naphthenes), aromatic hydrocarbons and mixed aromatic cycloalkanes ( cycloalkanoaromatics).

Most commercial gas oil products contain polycyclic aromatic hydrocarbons ( PAH). In straight run gas oil components these are mainly 2 and 3 ring compounds, with relatively low concentrations of 4 to 6 ring PAHs. The use of heavier atmospheric, vacuum or cracked gas oil components is likely to result in an increase in the content of 4 to 6 ring PAHs, some of which are known to be carcinogenic.

Commercially available gas oil products may contain low concentrations of additives such as flow improvers, corrosion inhibitors, defoamers,

dyes/ markers, anti oxidants, stability improvers, cetane improvers, detergents and anti static additives.

There are 68 substances listed in EINECS, which describe the gas oils which may be used for the vehicle and heating fuels. Many of them are in the list of dangerous substances ( Annex I of the Classification and Labelling Directive  67/ 548/ EEC), some of them are classified as carcinogens.

The toxicity of a number of gas oils and marketed fuel has been investigated by API, DGMK, CONCAVE and others ( see CONCAVE 4.1 Toxicity).

Animal Experiments AcuteToxicity The oral LD50 values in rats are several g/ kg with clinical signs including hypoactivity, ataxia, incontinence, hair loss and gastric haemorrhage/ irritation.

The dermal LD50 in rabbits were above 2g/ kg with marked irritation in the treatment area.

The LC50 upon inhalation was about 5 mg/ l with marked inflammation of the respiratory tract and the lungs.

Irritancy and sensitisation The several gas oil products tested induced moderate to severe skin irritation but no eye irritation. In a modified Buehler Test no sensitisation has been found.

Subacute/ subchronic studies Gas oil streams have been investigated in dermal studies over periods of 4 or 13 weeks and inhalation studies for 4 weeks.

In the dermal studies, significant severe skin irritation at all doses ( approx. 2 8 g/ kg/ day) occurred; reduced body weights were seen at 125 and 500 mg/ kg/ day.

Upon inhalation up to 4 weeks inflammatory changes in the nasal tissues and lungs of rats at about 20 mg/ m were seen.

Carcinogenicity In a series of mouse skin painting studies with different gas oils applied 2 x per week up to 2 years all materials which have been tested caused the development of benign and malignant skin tumours. A common feature was the occurrence of severe skin irritation and a long latency period before tumours developed ( e. g. 90 weeks).

Genotoxicity In vitro bacterial mutagenicity assays indicate that the hydrotreated or hydrodesulphurized straight run gas oil components range in activity from inactive to weakly positive. The mouse lymphoma assays which have been conducted on the straight run gas oils without subsequent hydrodesulphurization have yielded positive results in the presence of S9 metabolic activation. The 3 components which have been subjected to hydrodesulphurization were only weakly positive or positive in the presence of S9 and negative without S9. The in vivo bone marrow cytogenetics assays and sister chromatid exchange assay were negative for straight run components, with or without hydrodesulphurization.

Developmental Toxicity A sample of commercially available diesel fuel was examined in a teratology study in rats. Pregnant rats were exposed to 102 or 402 ppm of diesel fuel vapour on days 5 through 15 of pregnancy. The only sign of maternal toxicity was a reduction in food consumption at the highest exposure concentration. No foetotoxic or teratogenic effects were observed in the study.

Developmental toxicity studies have been carried out in rats on six gas oils applied to the skin daily on days 0 through 19 of gestation. The dose levels varied for each gas oil but ranged from 8 up to 1000 mg/ kg/ day.

With the exception of the coker light gas oil, all other materials tested caused foetotoxicity ( increased resorptions, reduced litter weight, reduced litter size) at doses which also caused maternal toxicity ( mainly reduced weight gain, but also increased liver weight, reduced thymus weight).

Human Experience Occupational exposure to gas oil products results in irritation of the skin, mucous membranes and central nervous system depression.

Irritation of mucous membranes of the upper respiratory tract was seen at concentrations well above 5 mg/ m . Accidental eye contact with liquid gas oil may cause mild, transient stinging or redness, as well as exposure to high concentrations of mist or vapour.

Excessive exposure under conditions of poor personal hygiene may lead to irritation, dermatitis and also oil acne and folliculitis, leading to warty growth which may become malignant.

5. Conclusions The CSTEE has evaluated the available information on the toxicology of diesel oil and of Solvent Yellow 124 used as an additive in diesel oil and the reports on the symptoms observed in workers exposed to coloured diesel oil and its combustion products.

The CSTEE considers it unlikely that the health problems reported in conjunction with exposure to coloured diesel oil products could be attributed to the dye used at concentrations up to 6 ppm. The inherent toxicity of diesel oil itself explains the symptoms reported by exposed persons. The occupational health risks of the low concentrations of 6ppm Solvent Yellow 124 in diesel oil are considered small.

However, the toxicological and ecotoxicological databases of Solvent Yellow 124 are poor and do not meet the requirements of a large volume product. Data on the stability of the azo dye should be provided. The database must be improved before an appropriate risk assessment can be made.

6. References CONCAVE: Gas oils ( diesel fuels/ heating oils). Product dossier no. 95/ 107, Brussels, September 1996.

Fischer T and Bjarnason B: Sensitising and irritant properties of 3 environmental classes of diesel oil and their indicator dyes. Contact Dermatitis 34, 309 315, 1996.

Gr n Diesel  Environmental and Health Risks: Report from the Commission on the marker system for certain oil products. Swedish Official Report Series 1995: 3, Ministry of Finance, Stockholm, Sweden ( Swedish with English Summary.

See CSTEE/ 99/ 3 Add. 5).

Gr gg K et al: Chemical analyses and biological tests in combustion emissions from coloured and non coloured diesel fuel ( Swedish) 1995. Annex 8 of Gr n diesel report.

Nilsson C A et al: Acute effects of inhalation of combustion emissions from coloured and non coloured diesel fuel ( Swedish) 1994. Annex 3 of Gr n diesel report.

Siemiatycki J. et al: Associations between several sites of cancer and twelve petroleum derived liquids: Results from a case referent study in Montreal. Scand J Work Envir Health 13, 493 504, 1987.

List of documents made available to the Scientific Committee on Toxicity, Ecotoxicity and the Environment via its Secretariat to help it reach the opinion requested by the services of the Commission on the subject of " Mineral oil marking system", ( Euromarker)  safety of the preferred candidate CSTEE/ 99/ 3 Selection of a Community wide mineral oil marking system  Safety of the preferred product.

Note from Mike Bott, Head of Unit DG XXI/ C/ 4 ( 27/ 4/ 99)

CSTEE/ 99/ 3  Add. 1 Preliminary evaluation of proposals submitted after the call for expression of interest 96/ C45/ 10 and recommendation to the Excise Sub Committee of DG XXI. Preliminary evaluation of the product ( Sudan Marker 455 liquid  C. I. Solvent Yellow 124) by IRMM Geel.

CSTEE/ 99/ 3  Add. 2 Presentation and results of the SSC combustion tests ( subcommittee meeting of 1 July 1998).

CSTEE/ 99/ 3  Add. 3 Excise Committee  Selection of a fiscal marker for gas oil and Kerosene ( EUROMARKER)  Recommendations for the Euromarker sub Committee)

Working document CED N 273  XXI/ 1273/ 98 EN.

CSTEE/ 99/ 3  Add. 4 Correspondence from Danish Environment Service

Colouring of gas and diesel oil  Euromarker ( 22 December 1998).

CSTEE/ 99/ 3  Add. 5 Summary of Swedish study.

CSTEE/ 99/ 3  Add. 6 Sudan Marker 455 Liquid.

Safety data sheet ( version 4  revised 20.03.1996) according to 91/ 155/ EEC from BASF Aktiensgesellschaft Fax from CCR Ispra  4/ 5/ 99.

CSTEE/ 99/ 3  Add. 7/ A Note from Mr. Mike Bott, acting Head of Unit DG XXI, to Mr. Costa David concerning " Selection of a Euromarker  Safety of the preferred product"  Health and safety aspects of Solvent Yellow 124  21/ 05/ 99.

CSTEE/ 99/ 3  Add. 7/ B Fax from Dr. Christos Vamvakaris, BASF AG, EFM/ SAM, to Mrs. Brigitte Hiller, Joint Research Centre  Ispra  20/ 04/ 98  concerning Sudan Marker 455 liq.

CSTEE/ 99/ 3  Add. 7/ C Somalia Yellow LBN Liquid.

Compound : T 10 Yellow LBN ( xylene solution)  Solvent Yellow 124.

CSTEE/ 99/ 3  Add. 7/ D Report  " Mutagenicity test using Micro organisms" made by Research Laboratory " The Centre of Japan Biological Chemistry Co., LTD" on Solvent Yellow 124  20/ 07/ 1988.

CSTEE/ 99/ 3  Add. 7/ E Report  " Metaphase Analysis of Chromosomal Aberration in Cultured Mammalian Cells" made by Research Laboratory " The Centre of Japan Biological Chemistry Co., LTD" on Solvent Yellow 124  25/ 11/ 1988.

CSTEE/ 99/ 3  Add. 7/ F Report from T. Fischer & B. Bjarnason ( National Institute for Working Life, Solna, Sweden) on " Sensitising and irritant properties of 3 environmental classes of diesel oil and their indicator dyes"  4/ 10/ 1995.

CSTEE/ 99/ 3  Add. 8 Journal article  Sundberg, N. et al.: " HPLC analysis of Solvent Yellow 124  The marker in Diesel Oil" ( Journal of Forensic Sciences, Vol. 41, n. 2, March 1996, pp. 300 303)  3/ 96 CSTEE/ 99/ 3  Add. 9 Journal article  Barbieri, M. and Mascherpa, A.:

" Determinazione mediante HPLC dei denaturanti nei prodotti petroliferi destinati alla carburazione" ( La Rivista dei Combustibili, vol.

49, fasc. 11 12, novembre dicembre 1995)  12/ 95 CSTEE/ 99/ 3  Add. 10 Journal article  Henricsson, S. and Westerholm, R.: " Liquid chromatographic method for analysing the colour marker Solvent Yellow 124, N ethyl N[ 2( 1 isobutoxyethoxy) ethyl]( 4 phenylaz ophenyl) amine, in diesel fuels" ( Journal of Chromatography A, vol. 723, 1996, pp. 395 398  1996.

CSTEE/ 99/ 3  Add. 11/ A Report from Morton International Limited ( Hounslow, Middlesex, UK): " Safety Data Sheet. Automate Blue 8GHF"  15/ 11/ 96 CSTEE/ 99/ 3  Add. 11/ B Report from Morton International Limited ( Hounslow, Middlesex, UK): " Safety Data Sheet. Automate Blue 8G"  8/ 8/ 95 CSTEE/ 99/ 3  Add. 12 Colour Index International Pigments and Solvent Dyes ( from ETAD), pp. 208 ( Solvent Yellow 124), 255 ( Solvent Blue 79) and 256 ( Solvent Blue 98).

CSTEE/ 99/ 3  Add. 13 Report " Experiences from introducing a mineral oil marking system in Sweden", by Prof. K. Victorin  23/ 8/ 99 CSTEE/ 99/ 3  Add. 14 Draft text by Prof. H. Greim  23/ 8/ 99 CSTEE/ 99/ 3  Add. 15 E mail from Mss. Birgit Sokull Kluettgen ( JRC Ispra) to Jorge Costa David ( EC, Health and consumer protection Directorate General) regarding the absence of information on the three chemicals under study in the ECB's databases  19/ 8/ 99 CSTEE/ 99/ 3  Add. 16 List of searches for documentation carried out between 20/ 7/ 99 and mid August 99 with the respective results  30/ 8/ 99 CSTEE/ 99/ 3  Add. 17 2 tests :

 CI Solvent Yellow 124 ( CAS No. 34432 92 3)

 CI Solvent Blue 79 ( CAS No. 90170 70 0)

BASF AG  29/ 7/ 1999.

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings

[June 24, 2010]
    Take notice that the Commission has received the following Natural
Gas Pipeline Rate and Refund Report filings:

    Docket Numbers: RP10-873-000.
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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 14857-000]

Watterra Energy, LLC; Notice of Preliminary Permit Application
Accepted for Filing and Soliciting Comments, Motions To Intervene, and
Competing Applications

    On September 11, 2017, Watterra Energy, LLC (Watterra Energy) filed
a preliminary permit application pursuant to section 4(f) of the
Federal Power Act proposing to study the feasibility of the proposed
Saylorville Dam Hydroelectric Project No. 14857-000, to be located at
the existing Saylorville Dam on the Des Moines River, near the City of
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States government and operated by the United States Army Corps of
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or waters owned by others without the owner's express permission.
    Watterra Energy's proposed project would consist of: (1) A new 20-
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wide by 70-foot-long by 30-foot-high concrete powerhouse; (3) three new
5.22-megawatt (MW) turbines, with a combined generating capacity of
15.66 MW; (4) a new 70-foot-long by 55-foot-wide substation; (5) a new
7,000-foot-long, 13.8-kilovolt transmission line; and (6) appurtenant
facilities. The project would have an estimated annual generation of 58
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MT 59840;<PHONE_NUMBER>.
    FERC Contact: Tyrone A. Williams,<PHONE_NUMBER>.
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competing applications using the Commission's eFiling system at http://www.ferc.gov/docs-filing/efiling.asp. Commenters can submit brief
comments up to 6,000 characters, without prior registration, using the
eComment system at http://www.ferc.gov/docs-filing/ecomment.asp. You
must include your name and contact information at the end of your
comments. For assistance, please contact FERC Online Support at
<EMAIL_ADDRESS>(866) 208-3676 (toll free), or (202) 502-
8659 (TTY). In lieu of electronic filing, please send a paper copy to:
Secretary, Federal Energy Regulatory Commission, 888 First Street NE.,
Washington, DC 20426. The first page of any filing should include
docket number P-14857-000.
    More information about this project, including a copy of the
application, can be viewed or printed on the eLibrary link of
Commission's Web site at http://www.ferc.gov/docs-filing/elibrary.asp.
Enter the docket number (P-14857) in the docket number field to access
the document. For assistance, contact FERC Online Support.

    Dated: September 27, 2017.
Kimberly D. Bose,
Secretary.
[FR Doc. 2017-21271 Filed 10-3-17; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 80, Number 7 (Monday, January 12, 2015)]
[Notices]
[Page 1502]
[FR Doc No: 2015-00242]

=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY

[FRL -9919-94-OEI]

Agency Information Collection Activities OMB Responses

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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

SUMMARY: This document announces the Office of Management and Budget
(OMB) responses to Agency Clearance Requests, in compliance with the
Paperwork Reduction Act (44 U.S.C. 3501 et. seq.). An agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a currently valid OMB
control number. The OMB control numbers for EPA regulations are listed
in 40 CFR part 9 and 48 CFR chapter 15.

FOR FURTHER INFORMATION CONTACT: Courtney Kerwin<PHONE_NUMBER>, or
email at<EMAIL_ADDRESS>and please refer to the appropriate
EPA Information Collection Request (ICR) Number.

SUPPLEMENTARY INFORMATION:

OMB Responses to Agency Clearance Requests

OMB Approvals

    EPA ICR Number 2380.02; Renewable Fuels Standard Program (RFS2-
Supplemental) (Renewal); 40 CFR part 80, and 40 CFR 80.1450(b)(1) and
80.1450(b)(2) ; was approved on 10/20/2014; OMB Number 2060-0637;
expires on 10/31/2017; Approved with change.
    EPA ICR Number 2333.03; Renewable Fuels Standard (RFS2) (Renewal);
40 CFR part 80, subpart M; was approved on 10/20/2014; OMB Number 2060-
0640; expires on 10/31/2017; Approved with change.
    EPA ICR Number 2060.07; Cooling Water Intake Structures at Existing
Facilities (Final Rule); 40 CFR parts 122 and 125; was approved on 10/
15/2014; OMB Number 2040-0257; expires on 10/31/2017; Approved with
change.

Comment Filed

    EPA ICR Number 1907.08; Recordkeeping and Reporting Requirements
Regarding the Sulfur Content of Motor Vehicle Gasoline Under the Tier 2
Rule (40 CFR part 80, subpart H) (Proposed Rule for Tier 3)); in 40 CFR
part 80, subpart O; and 40 CFR 80.210; 80.270; 80.330; 80.340; 80.370;
80.380; 80.400; and 80.415. OMB filed comment on 10/28/2014.

Courtney Kerwin,
Acting Director, Collections Strategies Division.
[FR Doc. 2015-00242 Filed 1-9-15; 8:45 am]
BILLING CODE 6560-50-P


                      UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                          SECTOR POLICIES AND PROGRAMS DIVISION
                       OFFICE OF AIR QUALITY PLANNING AND STANDARDS
                               OFFICE OF AIR AND RADIATION

December 15, 2011

MEMORANDUM

SUBJECT:	Conference Calls, Subpart S RTR

FROM:	John Bradfield
		Kelley Spence

TO:		Docket EPA-HQ-OAR-2007-0544

   This memorandum documents the conference calls held with stakeholders during the process of conducting the risk and technology review of the subpart S NESHAP for the pulp and paper industry.  Table 1 contains a list of the calls EPA staff participated in with stakeholders.

                       Table 1. List of Conference Calls

                                     Date
                                 Organization
                                     Topic
                                   Attendees
1/27/2011
NCASI
HAP Detection Limits
John Pinkerton, John Bradfield, Bill Schrock
2/3/2011
AF&PA
ICR,SSM, Acute Multipliers, WWT Defaults
Tim Hunt, Jeff Shumaker, Rich Garber, Mike Curtis, Jim Taylor, John Bradfield, Bill Schrock
3/9/2011
NCASI
HAP Testing, WWT Emission Model Defaults
John Pinkerton, David Word, Rob Crawford, Arun Someshar, Zach Emerson, John Bradfield, Kelley Spence, Jim Hirtz, Bill Schrock
4/29/2011
Georgia-Pacific Corp.
GP New Substance Review Program
Mike Curtis, Katie Hanks, John Bradfield, Kelley Spence
4/29/2011
Ashland Chemical
Paper Machine Additives
Chris Dilkus, John Bradfield, Kelley Spence
5/3/2011
Ashland Chemical
Paper Machine Additives
Joe Jadlocki, John Bradfield, Kelley Spence
5/5/2011
Sierra Club
Subpart S RTR Schedule
Scott Jordan, John Bradfield, Bill Schrock, Kelley Spence, Robin Dunkins, Wendy Blake, Emma Cheuse, Jim Pew, Chuck French
6/8/2011
Buckman
Paper Machine Additives
Jeff Thorn, Dennis Barbie, John Bradfield, Kelley Spence
6/16/2011
AF&PA
Deadline Extension, SSM, ICR Part 2
Tim Hunt, Jeff Shumaker, Rich Garber, Mike Curtis, Jim Taylor, John Bradfield, Bill Schrock, Kelley Spence, John Pinkerton
7/12/2011
International Paper
ICR Part 3 Data
Jeff Shumaker, Katie Hanks, John Bradfield, Kelley Spence, Bill Schrock
7/25/2011
AF&PA
ICR Part 3 Data
Tim Hunt, Jeff Shumaker, Rich Garber, Mike Curtis, Jim Taylor, John Bradfield, Bill Schrock, Kelley Spence
8/24/2011
Sierra Club
Environmental Justice Issues
Scott Jordan, John Bradfield, Bill Schrock, Kelley Spence, Robin Dunkins, Wendy Blake, Emma Cheuse
8/30/2011
Weyer-haeuser
RTR Issues
Steve Woock, John Bradfield, Kelley Spence
8/31/2011
AF&PA
Acute Multipliers, Allowable Multipliers
John Bradfield, Kelley Spence, Tim Hunt, John Pinkerton, Ashok Jain
10/21/2011
NCASI
HAP Testing
Robin Dunkins, Dave Guinnup, Jim Hirtz, John Bradfield, Kelley Spence, Bill Schrock, John Pinkerton, Rob Crawford, David Word, Dennis Mikel


                  UNITED STATES ENVIRONMENTAL PROTECTION AGENCY            SECTOR POLICIES AND PROGRAMS DIVISION            OFFICE OF AIR QUALITY PLANNING AND STANDARDS            OFFICE OF AIR AND RADIATION

DATE:January 25, 2021

SUBJECT:Documentation of Phone Conference with Dr. Kevin Archer, Viance Chemical

FROM:John Bradfield (EPA/OAR/OAQPS/SPPD/NRG)

-------------------------------------------------------------------------------- TO:EPA-HQ-OAR-2021-0133 --------------------------------------------------------------------------------

The purpose of this memorandum is to discuss the phone conference between John Bradfield of the U.S. Environmental Protection Agency (EPA) with Dr. Kevin Archer of Viance Chemical Corp. on November 13, 2020 regarding preservatives manufactured for use in the wood preserving process. This information will be used in the technology review for the National Emission Standards for Hazardous Air Pollutants for Wood Preserving Area Sources (Subpart QQQQQQ).

Wood Preservation Facilities. Would you review our two lists?  We have 270 facilities where we have confirmed, with public and company information, that they are applying wood preservative treatments or fire-retardant treatments. We have about 90 facilities where the public info indicates that they may be applying treatments, but we don't have company information confirming that data.

I.  New Preservative Technology

Q1. What new preservatives and/or active ingredients have been introduced into the wood preserving industry since 2007, including preservative treatments that may have been available, but are now more common? What products are they used on? What are the relative costs for new/old preservatives?

[In 1992 Alkaline Copper Quaternary (ACQ) was standardized with the American Wood Protection Association (AWPA) and different formulations of Copper Azoles (CA) were standardized in 1995, 2002 and 2009. With the switch away from Chromium Copper Arsenate (CCA) in 2003 after EPA and industry agreed to cancel the registration for residential consumer products, ACQ and CA, became the primary commercial replacements.  CCA continued to be sold for industrial uses. So ACQ and CA dominated the waterborne treatment products up until about 2007. In 2008 DCOIT (4,5-Dichloro-2-N-Octyl-4-Isothiazolin-3-One) combined with Imidacloprid was standardized by Viance's predecessor, CSI. AWPA typically refers to this product as DCOI or EL2. Viance (CSI) then began marketing DCOI as an above ground treatment.  Micronized Copper Azole (MCA), a particulate version of CA, came into the market place around 2007, initially standardized by the ICC-ES for building code approval and then in 2016 MCA was also standardized by AWPA. Viance does not sell Micronized Copper Azole (MCA). MCA and EL2 (DCOI) now dominate the Southern Yellow Pine based home center market in the eastern United States. For example, Home Depot primarily sells MCA for above ground and in ground residential uses while Lowe's sells EL2 (DCOI) based treated wood products for above ground uses and MCA for ground contact applications.  84 Lumber based in PA sells EL2 (DCOI) for above ground uses and CA for ground contact applications.  ACQ is still used to treat western U.S. wood species, which are more difficult to pressure treat than Southern Pine and ACQ works better. Additionally, ACQ is darker green than MCA and DCOI, which is considered by some to be an aesthetic disadvantage. ACQ is also at a cost disadvantage to MCA and DCOI, since it requires higher retention rates to be effective.  In 2018, Viance registered an oil based DCOI for ground contact treatment and is marketing it for use in utility poles and cross arms.  It is competitive and as effective as Pentachlorophenol, Creosote and CCA when used for poles. Copper Naphthenate (CN), which Viance does not sell, is an older treatment that can also be used in utility poles.  CN has a strong odor which can be a problem in some markets, so it is more commonly used in railroad cross ties, where odor is not a consumer issue.

Q2. Are there new preservatives and/or active ingredients currently being evaluated/certified under FIFRA? If yes, what types?

[Not really. Because of the costs associated with registration historically wood preservative suppliers have developed products by reformulating existing agricultural pesticide treatment chemicals.  Thus, primary pesticide research is undertaken by the agricultural industry. Regarding recently developed products, Viance is heavily committed to DCOI for above ground and ground contact products and are not proposing any new chemical treatments for the immediate future.  The approval systems for wood preservative products do not encourage rapid product change. Building codes, working with AWPA, require 5 years of test data. Even with the agriculture industry as a resource, wood preservers have had to be very selective. Wood preservative chemical formulations need to be very robust because they are reused and subject to shear during the wood treatment process. In contrast agricultural pesticides because they tend to be spray applied are typically only used once so they are easier to formulate. Consequently, the reservoir of active ingredients is relatively small.]

Q3. Is it easier/cheaper to control HAP emissions from wood preservatives through P2 (material/ingredient substitution) or add-on controls?

[Viance does not produce or market add-on controls. Viance does manufacture products, DCOI, CA, Borates and ACQ, which do not contain hazardous air pollutants.]

Q4. Are there any "greener" alternatives to creosote?  What are the technical issues for railroad ties/switches and/or utility poles? DCOI is Viance's product. Does DCOI have  future in cross ties?. Does DCOI compete with Copper Napthenate?

[DCOI oil borne ingredient product (UP-23) is Viance's product for utility poles that is a greener alternative to creosote. We see a future for our DCOI in cross ties, too. We believe our product competes with both Creosote and Copper Naphthenate.]

Q5. (May not be relevant) How are companies reducing HAP emissions from creosote?  We noted permits with specific naphthalene content (mass fraction, by weight) limits for incoming materials and total facility emission limits for naphthalene, POM, biphenyl, dibenzofuran, and quinoline.

[We agree that this question is not directly relevant to Viance, except as a part of the competitive products issue, discussed above. The efficacy issue is the biggest roadblock to our ability to crack new markets. You have to prove your product works with treated railroad ties, where other treatments have been around since the end of the 19th century.  Again, we are not selling DCOI into RR ties today, but we expect to.]

Q6. (May not be relevant) We also noted some facilities using add-on controls (e.g., condenser/ scrubber systems) to reduce HAP/VOC emissions from creosote operations.  Are there new (since 2007) creosote mixtures or solutions being used today?  What was the motivation  -  odor issues?

[We agree that this question is not directly relevant to Viance and we are not in the add-on controls business.]

Q7. Are there any HAP issues/concerns with fire retardants?  Most seem to be borates and contain no HAP.

[Viance sells its borate products into the interior framing market, e.g., windows, sill plates, etc. It is a waterborne product. We are not aware of any concerns about the chemicals, DOT (Disodium octaborate tetrahydrate) is relatively safe.  DOT is an effective termiticide as well as a fire retardant, as long as there is no soil contact. DOT leaches out with exterior soil contact, due to its water solubility and diffusion.]

Q8. What products does Viance produce that can meet which AWPA standards? (AWPA U1, UC3B, UC4A, UC4B, UC4C, 5A, 5B, 5C

[Viance sells products that can be used to meet these standards. All our products are AWPA standardized except for the Clearwood MW2 product, which is approved for WMDA's Millwork standards.

The only product we sell (on behalf of our parent Venator) that is standardized for Salt-Water immersion use in UC5 is CCA. Creosote is an alternative to CCA in that application. The reason for that is the intense leaching environment and the saltwater organisms. Class 5 is a relatively small percentage of the market. Reinforced Concrete and Metal are the main competitors; wood has a better Energy/LCA story than the competitive products, though.]

Q9. What can you tell us about Viance's corporate history?

[The corporate history of Viance was that the original company, known as Chemical Specialties, Inc., became CSI and was owned by Laporte. Laporte sold to Rockwood Specialties in 2000.  Rockwood Specialties, then formed a joint venture with Rohm and Haas in 2007. The new JV was called Viance LLC. Rohm and Haas sold to Dow, then Rockwood Specialties sold to Huntsman, then Huntsman spun off Venator, which retained the CSI holdings. Then Dow sold to DuPont. So now Viance is a JV owned by Venator and DuPont.]

II.  Old Preservative Technology

Q1. (May not be relevant) Pentachlorophenol (PCP or Penta) is still used for some utility poles and other outdoor/commercial applications. It typically has some associated HAP (dioxin) emissions from impurities  -  permits show some facilities have switched, but not all  -  is the industry waiting to see if another manufacturer steps in?  Are impurity levels better today than pre-2007?

[We agree that this question is not directly relevant to Viance, except as a part of the competitive products issue, discussed above, because of Penta's use in poles and ties.]

Q2. CCA was discontinued for residential/household use in 2003 but is still used for outdoor/commercial applications. It was typically replaced with ACQ or CA (which contain no HAP)  -  permits show several facilities have switched, but not all  -  why not?

[Viance does not produce CCA and only has marketing agreements for CCA sales into industrial markets, primarily poles. Our DCOI, CA and ACQ products are all successful products in the consumer markets formerly dominated by CCA.  CCA is a proven effective wood preservative treatment so it has maintained its competitive position in industrial and agricultural markets.]

Q3. Some permit application changes mentioned industry concerns about a possible "quat" shortage and switching from ACQ to CA products.  Was that a real issue/concern?

[The primary reason CA and MCA products have displaced ACQ is competitive, as noted above. ACQ requires higher retention rates.  Douglas Fir and other western species are easier to treat with ACQ, but Southern Yellow Pine products have a much larger market share of the treated wood market.]

Q4. Viance sells but does not produce CCA.  The products being marketed under the Viance `Supatimber CCA" brand appear to be focused on severe applications for Treated Wood. Which markets typically buy this product. Does Viance produce a non-CCA product that could substitute for any of these CCA products?  Which products produced to which standards?

[Again, the CCA market is industrial - agriculture fenceposts, Railroad Bridges, utility poles, marine pilings and permanent wood foundations. But our DCOI oil products are sold for bridge timbers, cross arms and utility poles and could be used elsewhere; we plan to market the product to the railroad tie industry.

III.  Preservative Treatment/Process

Q1. Are there new processes involving pre-, dual-, or post-application?  We noted things like a secondary emulsion treatment and Kiln Drying After Treatment, or KDAT.

[KDAT is not common because of kiln capacities. One reason is that treatment capacity far outstrips kiln capacity. Facilities with some kiln capacity are the ones marketing a small portion of their products as KDAT. On the other hand, Viance's mill work treatment is always KDAT. The secondary emulsion treatment added to CCA treated poles because the CCA treatment can make poles more difficult to climb. It is my understanding that Lonza and Koppers market a two-step CCA/oil emulsion treated product that they call Wolman ET or Durapine CCA respectively. CCA has a reactive chemistry and can react with oils, therefore CCA-ET is typically done in a 2-step process. First, the wood is treated with CCA, the retort is drained, and then the emulsion is added.]

Q2. Are there any anticipated changes in treatments, applications, treatment processes or any notable process changes that have occurred since 2007?

[Viance is not aware of any notable technology changes. Viance supplies replacement parts for treatment vessels but does not fabricate treatment equipment in house.  Viance's engineering team can design new plants but relies on independent contractors for fabrication of those plants.  Those suppliers may have products that improve efficiency such as transfer decks for moving treated wood in and out of the cylinder but pressure treatment equipment has not changed dramatically in a long time.]

IV.  Wood Products

Q1. Are there new (since 2007) wood products being pressure- or heat-treated with preservatives that we need to consider?

[The industry is now selling Zinc Borate to OSB to give it termite resistance.  Viance does not have a ZB product that they sell to OSB, however Viance had an ammoniacal copper product they sold, which imparted water resistance, termite resistance and dimensional stability, it was sold as a specialty product into Hawaii.  However, that market was not pursued after 2002. Because the composite panel producers that we were working with switched their focus away from value added specialty products to commodity products. Acetylated (chemically modified) wood based on treatment with acetic anhydride was standardized by AWPA in 2011. Some companies are developing heat treated wood (heating in an oxygen free atmosphere in a kiln or oven) to protect it from microbial degradation.


[Federal Register Volume 78, Number 69 (Wednesday, April 10, 2013)]
[Notices]
[Pages 21424-21428]
[FR Doc No: 2013-08318]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30448; File No. 812-13880]

Royce Value Trust, Inc., et al.; Notice of Application

April 4, 2013.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for an order under section 12(d)(1)(J)
of the Investment Company Act 1940 (the ``Act'') granting an exemption
from sections 12(d)(1)(A) and 12(d)(1)(C) of the Act, under section
17(b) of the Act granting an exemption from section 17(a) of the Act,
and under section 17(d) of the Act and rule 17d-1 thereunder permitting
certain joint transactions.

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

APPLICANTS: Royce Value Trust, Inc. (``Value Trust''), Royce Global
Value Trust, Inc. (``Global Trust'') (each a ``Fund'' and together, the
``Funds'') and Royce & Associates, LLC (the ``Adviser'').

SUMMARY OF APPLICATION: Applicants seek an order to permit Value Trust
to transfer a segment of its assets to Global Trust, a newly formed,
wholly-owned subsidiary that is a registered closed-end investment
company, and to distribute the shares of Global Trust common stock to
Value Trust's common stockholders.

FILING DATES: The application was filed on March 17, 2011 and amended
on August 16, 2011, May 22, 2012, and March 6, 2013.

HEARING OR NOTIFICATION OF HEARING: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request

a hearing by writing to the Commission's Secretary and serving
applicants with a copy of the request, personally or by mail. Hearing
requests should be received by the Commission by 5:30 p.m. on April 29,
2013 and should be accompanied by proof of service on the 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: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange
Commission, 100 F Street NE., Washington, DC 20549-1090; Applicants: c/
o Frank P. Bruno, Esq., Sidley Austin LLP, 787 Seventh Avenue, New
York, New York 10019-6018.

FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at
(202) 551-6873 or Mary Kay Frech, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Exemptive Applications Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or an applicant
using the Company name box, at http://www.sec.gov/search/search.htm or
by calling<PHONE_NUMBER>.

Applicants' Representations

    1. Value Trust, a Maryland corporation, is registered under the Act
as a diversified closed-end management investment company. Value Trust
seeks long-term growth of capital primarily through investment in the
equity securities of small- and micro-cap companies. Value Trust has a
non-fundamental investment policy that limits its investment in
securities of issuers headquartered outside the United States to 25% of
the Fund's assets.
    2. Global Trust was incorporated in Maryland on February 14, 2011
and filed a notification of registration on Form N-8A on March 11, 2011
to register under the Act as a diversified closed-end management
investment company. Global Trust filed a registration statement under
the Securities Act of 1933 (the ``1933 Act'') on Form N-14 on March 16,
2011 (the ``Proxy Statement/Prospectus'') and filed a registration
statement on Form N-2 on June 8, 2011. Application will be made to list
Global Trust's common stock for trading on the New York Stock Exchange.
Global Trust seeks long-term growth of capital by investing a
significant portion of its assets in the equity securities of micro-
cap, small-cap, and/or mid-cap companies. Unlike Value Trust, Global
Trust may invest without limitation in securities of foreign issuers
and, under normal market circumstances, will invest at least 65% of its
assets in equity securities of companies located outside of the United
States.
    3. The Adviser, a Delaware limited liability company, is registered
under the Investment Advisers Act of 1940 and serves as the investment
adviser to the Funds. The investment advisory fee structures for Value
Trust and Global Trust will be different. Value Trust's advisory fee
consists of a base fee and a fulcrum fee. The base advisory fee of
Value Trust is a monthly fee equal to 1/12 of 1% (1% on an annualized
basis) of the average of Value Trust's month-end net assets, including
the liquidation value of any preferred stock issued and outstanding,
for the rolling 60-month period ending with such month.\1\ The fulcrum
fee, determined by fund performance, causes Value Trust's annual
advisory fee to adjust up to .50% either above or below the base
advisory fee.\2\ In contrast to Value Trust, Global Trust will pay the
Adviser a fee at an annual rate of 1.25% of Global Trust's average
daily net assets, including the liquidation value of any preferred
stock issued and outstanding, which reflects an advisory fee that is
0.25% higher than the base advisory fee paid by Value Trust to the
Adviser. For this reason, the annual advisory fee for Global Trust may
be higher or lower than that of Value Trust.
---------------------------------------------------------------------------

    \1\ The base fee for each month is increased or decreased at the
rate of 1/12 of .05% for each percentage point that the investment
performance of Value Trust exceeds, or is exceeded by, the
percentage change in the investment record of the S&P 600 SmallCap
Index for the performance period by more than two percentage points.
    \2\ The Adviser is not entitled to receive any fee for any month
when the investment performance of Value Trust for the rolling 36-
month period ending with such month is negative.
---------------------------------------------------------------------------

    4. The board of directors of Value Trust consists of eight
directors who are also directors on the eight member board of directors
of Global Trust (each such board of directors, a ``Board'' and
collectively, the ``Boards''). Six of the eight directors on each Board
are not ``interested persons,'' as defined in section 2(a)(19) of the
Act (the ``Independent Directors''). All of the principal officers of
Value Trust hold the same offices with Global Trust.
    5. The Board of Value Trust has approved, subject to the issuance
of the requested relief and subsequent stockholder approval, the
contribution of a segment of Value Trust's assets having a value of
approximately $100 million to Global Trust, in exchange for shares of
Global Trust common stock. It is anticipated that the contributed
assets will consist largely or exclusively of cash, short-term fixed
income instruments, and/or unappreciated common stock and unappreciated
preferred stock whose value at the time of the Transaction (as defined
below) are less than or equal to their cost basis for tax purposes
(together, such unappreciated common stock and unappreciated preferred
stock are ``Unappreciated Equity Securities''). All the shares of
common stock of Global Trust will then be distributed by Value Trust to
its common stockholders at a rate of one (1) share of Global Trust
common stock for every seven (7) shares held of Value Trust common
stock.\3\ The contribution of the Value Trust assets to Global Trust
and the subsequent distribution of shares of Global Trust common stock
to Value Trust common stockholders are referred to as the
``Transaction.''
---------------------------------------------------------------------------

    \3\ No fractional shares of Global Trust common stock will be
issued as part of the distribution. The fractional shares to which
holders of Value Trust common stock would otherwise be entitled will
be aggregated and an attempt to sell them in the open market will be
made at then-prevailing prices on behalf of such holders, and such
holders will receive instead a cash payment in the amount of their
pro rata share of the total sales proceeds.
---------------------------------------------------------------------------

    6. The Proxy Statement/Prospectus of the Funds will be used,
following the issuance of the requested relief, to solicit approval of
the Value Trust stockholders of the Transaction. Prior to the
effectiveness of the Proxy Statement/Prospectus under the 1933 Act,
Value Trust will purchase approximately 10,000 shares of Global Trust's
shares of common stock, par value $0.001, in consideration of Value
Trust's contribution to Global Trust of at least $100,000 initial net
asset value (the ``Seed Capital Shares''), in order to satisfy the
requirements of section 14(a) of the Act. Value Trust represents that
the Seed Capital Shares will be sold only pursuant to a registration
statement under the 1933 Act or an applicable exemption from
registration under the 1933 Act. Applicants intend that the Seed
Capital Shares will be included in the distribution of Global Trust's
shares of common stock to the common stockholders of Value Trust.
    7. Applicants represent that Value Trust's activities in the
Transaction may be deemed to be underwriting shares of Global Trust's
common stock. Value Trust has a fundamental investment

restriction that it will not underwrite the securities of other
issuers, or invest in restricted securities unless such securities are
redeemable shares issued by money market funds registered under the Act
(the ``Underwriting Restriction''). Accordingly, Value Trust's
activities in the Transaction may be deemed to be in violation of the
Underwriting Restriction.
    8. Applicants state that Value Trust's Underwriting Restriction
cannot be changed without the affirmative vote of the majority of the
outstanding voting securities of Value Trust. Applicants undertake that
they will not rely on the requested order until the amendment to the
Underwriting Restriction \4\ is approved by the affirmative vote of the
holders of a majority of Value Trust's outstanding voting securities.
---------------------------------------------------------------------------

    \4\ Value Trust intends to seek stockholder approval to amend
the Underwriting Restriction to state that Value Trust may not
underwrite the securities of other issuers, except insofar as the
Fund may be deemed an underwriter under the 1933 Act in selling
portfolio securities and in connection with mergers, acquisitions,
spin-off and other reorganization transactions involving the Fund.
---------------------------------------------------------------------------

    9. The Board of Value Trust, including the Independent Directors,
concluded that the Transaction will result in the following benefits to
Value Trust stockholders: (a) Stockholders will receive shares of an
investment company with a different risk-return profile than Value
Trust; (b) stockholders will acquire the shares of Global Trust common
stock at a much lower transaction cost than is typically the case for a
newly-organized closed-end equity fund since there will be no
underwriting discounts or commissions; and (c) stockholders will be
able to seek capital appreciation opportunities presented by Global
Trust's ability to invest at least 65% of its net assets in non-U.S.
securities.
    10. Shortly before the date of the Transaction, the Adviser will
review with the Boards of Global Trust and Value Trust, including the
Independent Directors: (a) the Unappreciated Securities, if any, it
recommends contributing in the Transaction; (b) the methodology used by
the Adviser in selecting Unappreciated Equity Securities to be
contributed to Global Trust and those to be retained by Value Trust;
(c) the cost basis and current fair market value of each Unappreciated
Equity Security to be contributed; (d) the aggregate amount of
Unappreciated Equity Securities to be contributed and the percentage of
Value Trust's entire portfolio and of its unappreciated common stock
and preferred stock that the Unappreciated Equity Securities to be
contributed constitute; and (e) the percentage of Global Trust's
portfolio that the Unappreciated Equity Securities will constitute.\5\
The Boards of Global Trust and Value Trust, including a majority of the
Independent Directors, will approve the contribution of the
Unappreciated Equity Securities by Value Trust to Global Trust,
including the methodology of selecting Unappreciated Equity Securities
to be contributed, and the deliberations of the Boards will be set
forth in the minutes of the Funds.
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    \5\ In selecting Unappreciated Equity Securities to be
contributed to Global Trust in the Transaction, the Adviser will
select only Unappreciated Equity Securities that are consistent with
Global Trust's investment goal, policies and restrictions.
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    11. Global Trust has been advised by counsel that the distribution
of shares of Global Trust to the common stockholders of Value Trust
likely will be a taxable event for Value Trust stockholders to some
extent and a taxable event for Value Trust, but only to the extent that
the value of Global Trust shares distributed exceeds Value Trust's cost
of such shares. Specifically, the value of Global Trust shares will
exceed Value Trust's cost of those shares only to the extent that the
value of the short-term fixed income instruments and Unappreciated
Equity Securities, if any, contributed to Global Trust exceeds Value
Trust's cost of such short-term fixed income instruments and
Unappreciated Equity Securities. Applicants state that no significant
excess is expected. Further, the Transaction is not expected to
increase significantly the total amount of taxable distributions
received by Value Trust common stockholders for the year in which the
Transaction is consummated because Value Trust distributes to
stockholders each year substantially all of its taxable income and
accordingly, any taxable income included in the distribution of Global
Trust shares would be distributed at some point during the year in any
event. The Board of Value Trust, including all of the Independent
Directors, has considered the tax consequences of the Transaction and
has determined that the benefits of the Transaction outweigh any
adverse tax consequences to Value Trust and its common stockholders,
particularly because such adverse tax consequences are expected to be
minimal.
    12. The costs of organizing Global Trust and effecting the
distribution of Global Trust's shares to Value Trust's common
stockholders, including the fees and expenses of counsel and
accountants and printing, listing, and registration fees, the costs of
soliciting Value Trust's stockholders' approval of the Transaction, and
the costs incurred in connection with the application for relief, are
estimated to be approximately $700,000, and will be borne by the
Adviser. Global Trust will incur operating expenses on an ongoing
basis, including investment advisory fees, and legal, auditing,
transfer agency, and custodian expenses that, when aggregated with the
fees payable by Value Trust for similar services after the
distribution, will likely exceed the fees currently payable by Value
Trust for those services. It is not expected that the Transaction will
have a significant effect on the annual expenses of Value Trust as a
percentage of its assets.

Applicants' Legal Analysis

    1. Applicants request an order under section 12(d)(1)(J) of the Act
granting an exemption from sections 12(d)(1)(A) and 12(d)(1)(C) of the
Act, under section 17(b) of the Act granting an exemption from section
17(a) of the Act and under section 17(d) of the Act and rule17d-1
thereunder permitting certain joint transactions.
    2. Section 12(d)(1)(A) of the Act prohibits a registered investment
company from acquiring shares of an investment company if the
securities represent more than 3% of the total outstanding voting stock
of the acquired company, more than 5% of the total assets of the
acquiring company, or, together with the securities of any other
investment companies, more than 10% of the total assets of the
acquiring company. Section 12(d)(1)(C) of the Act prohibits an
investment company from acquiring any security issued by a registered
closed-end investment company if such acquisition would result in the
acquiring company, any other investment companies having the same
investment adviser, and companies controlled by such investment
companies, collectively, owning more than 10% of the outstanding voting
stock of the registered closed-end investment company.
    3. Applicants state that the proposed Transaction may be viewed as
violating sections 12(d)(1)(A) and 12(d)(1)(C). At the time of the
purchase of Seed Capital Shares and at the time of the transfer of
Value Trust's assets in return for shares of Global Trust common stock,
Value Trust will acquire 100% of the voting stock of Global Trust, a
closed-end investment company, and the value of Value Trust's holdings
of Global Trust common stock will exceed 5% of Value Trust's assets for
a momentary period.
    4. Section 12(d)(1)(J) of the Act provides that the Commission may
exempt any person, security, or

transaction, or any class or classes of persons, securities or
transactions, from any provision of section 12(d)(1) if the exemption
is consistent with the public interest and the protection of investors.
Applicants request an exemption under section 12(d)(1)(J) of the Act
from the provisions of sections 12(d)(1)(A) and 12(d)(1)(C) of the Act.
    5. Applicants submit that the structure of the Transaction
adequately addresses the concerns underlying the limits in section
12(d)(1), which include concerns about control by a fund of funds over
underlying funds and a layering of costs to investors in terms of
duplication of administrative expenses, sales charges and advisory
fees. Applicants submit that there is no danger of control over Global
Trust by Value Trust or of a layering of costs to stockholders of Value
Trust. Applicants note that ownership of Global Trust by Value Trust
(other than the Seed Capital Shares) will exist for only an instant. In
addition, applicants state the Transaction involves no layering of
costs to stockholders, since Global Trust will not incur any advisory,
administrative, transfer agency, custody, or similar fees until after
completion of the Transaction.
    6. Section 17(a) of the Act generally prohibits sales or purchases
of securities between a registered investment company and an affiliated
person. Section 2(a)(3) of the Act defines an ``affiliated person'' of
another person to include (a) 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, (b) any person 5% or
more of whose voting securities are directly or indirectly owned
controlled or held with the power to vote by the other person, and (c)
any person directly or indirectly controlling, controlled by, or under
common control with, the other person. Value Trust may be viewed as an
affiliated person of Global Trust under section 2(a)(3) because Value
Trust will own 100 percent of the Global Trust's voting securities
until the consummation of the Transaction. Value Trust and Global Trust
also may be viewed as affiliated persons of each other to the extent
that they may be deemed to be under the common control of the Adviser.
As a result of the affiliation between Value Trust and Global Trust,
section 17(a) would prohibit the Transaction.
    7. Applicants request an exemption pursuant to section 17(b) of the
Act from the provisions of section 17(a) in order to permit applicants
to effect the Transaction. Section 17(b) authorizes the Commission to
issue such an exemptive order if the Commission finds that the terms of
the proposed transaction are fair and reasonable and do not involve
overreaching on the part of any persons concerned, and the proposed
transaction is consistent with the policy of each registered investment
company and the general purposes of the Act.
    8. Applicants assert that the terms of the Transaction, including
the consideration to be paid or received, are fair and reasonable and
do not involve overreaching by any person concerned. Applicants state
that the proposed contribution by Value Trust of a portion of its
assets to Global Trust in exchange for shares of Global Trust common
stock will be based on the value of such assets computed as of the
close of trading on the New York State Exchange on a business day to be
selected by the Board of Value Trust (such business day, the
``Valuation Date''), in the same manner as for purposes of the daily
net asset valuation for Value Trust. The Transaction will occur after
the close of trading on the New York Stock Exchange on the Valuation
Date. Applicants anticipate that such assets will consist largely or
exclusively of cash, short-term fixed income instruments and/or
Unappreciated Equity Securities and thus will pose no issues with
respect to valuation.\6\ Shares of Global Trust common stock
distributed by Value Trust in the Transaction will be valued based on
the value of Global Trust's assets. ``Value'' for those purposes will
be determined in accordance with the provisions of section 2(a)(41) of
the Act and rule 2a-4 under the Act.
---------------------------------------------------------------------------

    \6\ Since market quotations will exist for the Unappreciated
Equity Securities, if any, to be contributed by Value Trust to
Global Trust, such securities will be valued at market value.
---------------------------------------------------------------------------

    9. With respect to the Transaction, each Board, including a
majority of the Independent Directors, determined that participation in
the Transaction is in the best interests of Value Trust or Global
Trust, as applicable, and that the interests of the existing
stockholders of Value Trust or Global Trust, as applicable, will not be
diluted as a result of the Transaction. These findings, and the basis
upon which the findings were made, will be recorded fully in the minute
book of Value Trust or Global Trust, as applicable. In addition, the
Adviser, in selecting Unappreciated Equity Securities to be contributed
to Global Trust, will, in the exercise of its fiduciary
responsibilities, act in a manner it believes to be in the best
interests of both Funds.
    10. Applicants state that the Transaction will be consistent with
the stated investment policies of Value Trust and Global Trust as
disclosed to stockholders. The distribution of shares of Global Trust
common stock will not initially change the position of Value Trust's
stockholders with respect to the underlying investments that they then
own. The Proxy Statement/Prospectus will be used to solicit the
approval of Value Trust's stockholders of the Transaction at a vote to
take place following the issuance of the requested order. Value Trust's
stockholders will have the opportunity to vote on the Transaction after
having received disclosure concerning the Transaction.
    11. Applicants also seek an order under section 17(d) of the Act
and rule 17d-1 under the Act. Section 17(d) and rule 17d-1 prohibit
affiliated persons from participating in joint arrangements with a
registered investment company unless authorized by the Commission. In
passing on applications for these orders, rule 17d-1 provides that the
Commission will consider whether the participation of the investment
company is consistent with the provisions, policies and purposes of the
Act, and the extent to which the participation is on a basis different
from or less advantageous than that of the other participants.
Applicants request an order pursuant to rule 17d-1 to the extent that
the participation of applicants in the Transaction may be deemed to
constitute a prohibited joint transaction.
    12. Applicants state that the Transaction will not place any of
Value Trust, Global Trust, or existing shareholders of Value Trust in a
position less advantageous than that of any other person. The value of
Value Trust's assets transferred to Global Trust (and the shares of
Global Trust common stock received in return) will be based on their
value as computed on as of the close of trading on the New York Stock
Exchange on the Valuation Date in accordance with the requirements of
the Act and pursuant to valuation procedures adopted by the Board of
Value Trust. The shares of Global Trust common stock will be
distributed to Value Trust's common stockholders, leaving the
stockholders in the same investment posture immediately following the
Transaction as before, subject only to changes in market price of the
underlying assets subsequent to the Transaction.
    13. Applicants assert that the Transaction has been proposed in
order to benefit the stockholders of Value Trust as well as Global
Trust. Although the advisory fee for Global Trust will be

different from Value Trust, and may at times be higher than that of
Value Trust, neither the Adviser nor any other affiliated person of
Value Trust or Global Trust will receive additional fees solely as a
result of the Transaction. Applicants state that although it is
possible that the creation of Global Trust may benefit the Adviser by
providing it with a higher advisory fee in certain circumstances, the
Board of Value Trust has determined that such result does not supply a
benefit that could not have otherwise been achieved through an initial
public offering of a global equity securities fund and that such
benefit is both marginal and hypothetical because the assets of Value
Trust to be contributed to Global Trust pursuant to the Transaction
represent only approximately 9.2% of Value Trust's net assets as of
December 30, 2012. In addition, by creating Global Trust through the
Transaction, Value Trust is effectively enabling its common
stockholders to receive securities without the costs associated with a
public offering.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-08318 Filed 4-9-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: July 23, 2008 (Volume 73, Number 142)]
[Notices]
[Page 42873-42874]
[DOCID:fr23jy08-87]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58175; File No. SR-Phlx-2008-12]

Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Order Granting Approval to a Proposed Rule Change, as Modified by
Amendment No. 1 Thereto, Relating to an Exemption From Examination
Requirements for Off-Floor Traders

July 16, 2008.
    On April 14, 2008, the Philadelphia Stock Exchange, Inc. (``Phlx''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend Phlx Rule 604(e)(iii) to modify the
category of persons who are exempt from the requirement that Off-Floor
Traders \3\ complete the Series 7 General Securities Registered
Representative Examination (``Series 7''). On May 30, 2008, Phlx filed
Amendment No. 1 to the proposed rule change.\4\ The proposal was
published for comment in the Federal Register on June 12, 2008.\5\ The
Commission received no comments on the proposal. This order approves
the proposed rule change, as modified by Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Phlx Rule 604(e)(i) defines an off-floor trader as a
``person who is compensated directly or indirectly by a member or
participant organization for which the Exchange is the DEA
[Designated Examining Authority], or any other associated person of
such member or participant organization, and who executes, makes
trading decisions with respect to, or otherwise engages in
proprietary or agency trading of securities, including, but not
limited to, equities, preferred securities, convertible debt
securities or options off the floor of the Exchange.''
    \4\ Amendment No. 1 replaced and superseded the original filing
in its entirety.
    \5\ See Securities Exchange Act Release No. 57923 (June 4,
2008), 73 FR 33479 (June 12, 2008).
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    Phlx states that the Series 7 exemption meant to apply to persons
who traded on its equity trading floor and were associated with either
a specialist organization or a floor brokerage organization that
executed orders on an agency basis (``Former Floor Participants'').
When Phlx replaced its equity trading floor with XLE, an electronic
trading system, certain persons became Off-Floor Traders by definition,
and consequently subject to the requirement to pass the Series 7. Phlx
did not intend for this category of persons to be subject to the Series
7 requirement. Therefore, Phlx proposed to exempt these persons from
the Series 7 by expanding the exemption in Rule 604 to include Market
Maker Authorized Traders (MMATs) and Off-Floor Traders who only handle
and/or make trading decisions regarding agency orders and any bona fide
errors related to those agency orders.
    Phlx believes the proposed rule change will make the administration
of the Series 7 requirements for Off-Floor Traders more efficient,
because under the current rule, the exemption applies to persons
``primarily engaged'' in submitting orders to XLE or making trading
decisions with respect to XLE, which requires the Former Floor
Participant and the Exchange's enforcement staff to make a judgment
call. Under the proposed rule, however, an XLE participant needs to
register with the Exchange in order to be an MMAT, so the determination
of MMAT status is straightforward. In addition, Phlx staff can examine
what type of orders (agency or proprietary) Off-Floor Traders handle
for net capital purposes and could identify whether Off-Floor Traders
would qualify for the proposed exemption. Finally for the same reasons,
the proposed rule change should improve Phlx's enforcement efforts,
because Phlx and its members will be able to more easily determine
which persons are subject to the Series 7 requirement.
    After careful review of the proposal, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to

a national securities exchange.\6\ In particular, the Commission finds
that the proposal is consistent with Section 6(b)(5) of the Act,\7\
which requires, among other things, that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors and the public
interest. The Commission believes that this proposed rule change will
better capture the floor-based activities of Former Floor Participants
by focusing on the status of, or type of, activity performed by those
persons. In addition, it should provide a clearer standard that should
allow Exchange staff, as well as members and individuals, to better
determine who is subject to the Series 7 requirement. This should make
the administration, as well as compliance and enforcement, of the
Series 7 requirement more efficient.
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    \6\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\8\ that the proposed rule change (SR-Phlx-2008-12), as modified by
Amendment No. 1, be, and hereby is, approved.
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    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-16758 Filed 7-22-08; 8:45 am]

BILLING CODE 8010-01-P