[Federal Register Volume 81, Number 81 (Wednesday, April 27, 2016)]
[Notices]
[Pages 24909-24913]
[FR Doc No: 2016-09716]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77673; File No. SR-Phlx-2016-51]

Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change to Qualified
Contingent Cross Pricing

April 21, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 thereunder,\2\ notice is hereby given
that on April 14, 2016, NASDAQ PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend the Exchange's Pricing Schedule at
Section II, entitled ``Multiply Listed Options Fees.'' Specifically,
the Exchange is proposing to amend the Qualified Contingent Cross
(``QCC'') pricing.
    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxphlx.cchwallstreet.com/, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for

the proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to amend the Exchange's
Pricing Schedule at Section II, entitled ``Multiply Listed Options
Fees.'' Specifically, the Exchange is proposing to amend QCC pricing.
QCC Transaction Fee
    Today, the Exchange assesses a QCC Transaction Fee of $0.20 per
contract to a Specialist,\3\ Market Maker,\4\ Professional,\5\ Firm \6\
and Broker-Dealer.\7\ Customers are not assessed a QCC Transaction Fee.
The Exchange proposes to no longer assess Professionals a QCC
Transaction Fee.
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    \3\ A ``Specialist'' is an Exchange member who is registered as
an options specialist pursuant to Rule 1020(a).
    \4\ The term ``Market Maker'' includes Registered Options
Traders (``ROT''). See Exchange Rule 1014(b)(i) and (ii). A ROT
includes a Streaming Quote Trader or ``SQT,'' a Remote Streaming
Quote Trader or ``RSQT'' and a Non-SQT, which by definition is
neither a SQT nor a RSQT. A ROT is defined in Exchange Rule 1014(b)
as a regular member or a foreign currency options participant of the
Exchange located on the trading floor who has received permission
from the Exchange to trade in options for his own account. An SQT is
an ROT who has received permission from the Exchange to generate and
submit option quotations electronically in options to which such SQT
is assigned. See Rule 1014(b)(ii)(A). An RSQT is an ROT that is a
member affiliated with and Remote Streaming Quote Organization with
no physical trading floor presence who has received permission from
the Exchange to generate and submit option quotations electronically
in options to which such RSQT has been assigned. See Rule
1014(b)(ii)(B).
    \5\ The term ``Professional'' means any person or entity that
(i) is not a broker or dealer in securities, and (ii) places more
than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s). See Rule
1000(b)(14).
    \6\ The term ``Firm'' applies to any transaction that is
identified by a member or member organization for clearing in the
Firm range at The Options Clearing Corporation.
    \7\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category.
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QCC Rebate
    The Exchange also pays rebates on QCC Orders.\8\ Rebates are paid
for all qualifying executed QCC Orders, as defined in Rule 1080(o) \9\
and Floor QCC Orders, as defined in Rule 1064(e),\10\ except where the
transaction is either: (i) Customer-to-Customer; or (ii) a dividend,
merger, short stock interest or reversal or conversion strategy
execution.\11\ The maximum QCC Rebate to be paid in a given month will
not exceed $450,000.\12\ The Exchange pays rebates to market
participants acting as agent on qualifying QCC Orders. The Exchange
proposes to no longer pay QCC Rebates on Customer-to-Professional
orders.\13\
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    \8\ See Section II of the Pricing Schedule.
    \9\ A QCC Order is comprised of an originating order to buy or
sell at least 1,000 contracts, or 10,000 contracts in the case of
Mini Options, that is identified as being part of a qualified
contingent trade, as that term is defined in Rule 1080(o)(3),
coupled with a contra-side order or orders totaling an equal number
of contracts. See Rule 1080(o).
    \10\ A Floor QCC Order must: (i) Be for at least 1,000
contracts; (ii) meet the six requirements of Rule 1080(o)(3) which
are modeled on the QCT Exemption; (iii) be executed at a price at or
between the National Best Bid and Offer (``NBBO''); and (iv) be
rejected if a Customer order is resting on the Exchange book at the
same price. In order to satisfy the 1,000-contract requirement, a
Floor QCC Order must be for 1,000 contracts and could not be, for
example, two 500-contract orders or two 500-contract legs.
    \11\ See Section II of the Pricing Schedule.
    \12\ Id.
    \13\ At this time, the Exchange will continue to pay a QCC
Rebate where the transaction is Professional-to-Professional.
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    QCC Orders are an order to buy or sell at least 1,000 contracts, or
10,000 contracts in the case of Mini Options.\14\ These large-sized
contingent orders are complex in nature and have a stock-tied
component, which requires the option leg to be executed at the NBBO or
better. The parties to a contingent trade are focused on the spread or
ratio between the transaction prices for each of the component
instruments (i.e., the net price of the entire contingent trade),
rather than on the absolute price of any single component. Permitting
Professional orders to be treated similar to Customer orders with
respect to this order type is reasonable because of the characteristics
of the QCC Order which are described above.
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    \14\ See notes 9 and 10 above.
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    The differentiation between a Customer and Professional is not
necessary with respect to QCC Orders because these orders are exempt
from requirements regarding order exposure.\15\ Further, QCC Orders are
not executed pursuant to a priority scheme.\16\ Also, as explained
above, because of the size of the order, sophistication of the investor
and complexity of the transaction, it is difficult to distinguish as
between a Customer and Professional with respect to QCC Orders.\17\
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    \15\ See Rule 1080(c)(ii)(C).
    \16\ By way of comparison, Customers receive priority over other
market participants with respect to the execution of their order
within the Exchange's order book or on the Floor.
    \17\ A Professional transacting a QCC Order would count that
order toward the 390 orders in listed options per day. See note 5
above.
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    Finally, the Exchange believes that treating Customer orders and
Professional orders in a similar manner with respect to fees, when
transacting QCC Orders, will attract more QCC Orders to the Exchange
because there would be no fee for Professional orders.
2. Statutory Basis
    The proposal is consistent with Section 6(b) of the Act,\18\ in
general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of
the Act,\19\ in particular, in that it provides for the equitable
allocation of reasonable dues, fees and other charges among members and
issuers and other persons using any facility or system which the
Exchange operates or controls, and is not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.
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    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(4) and (5).
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    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \20\
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    \20\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37497, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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    Likewise, in NetCoalition v. Securities and Exchange Commission
(``NetCoalition'') \21\ the D.C. Circuit upheld the Commission's use of
a market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\22\ As the court emphasized, the Commission ``intended in
Regulation NMS that `market forces, rather than regulatory
requirements' play a role in determining the market data . . . to be
made available to investors and at what cost.'' \23\
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    \21\ See Securities Exchange Act Release No. 51808 (June 9,
2005) at 534-535.
    \22\ See Securities Exchange Act Release No. 51808 (June 9,
2005) at 534.
    \23\ See Securities Exchange Act Release No. 51808 (June 9,
2005) at 537.

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    Further, ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers' . . . .'' \24\ Although the court and
the SEC were discussing the cash equities markets, the Exchange
believes that these views apply with equal force to the options
markets.
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    \24\ See Securities Exchange Act Release No. 51808 (June 9,
2005) at 539 (quoting Securities Exchange Act Release No. 59039
(December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-
NYSEArca-2006-21).
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    It is reasonable to no longer assess a QCC Transaction Fee for
Professional orders and to not pay a QCC Rebate on Customer-to-
Professional orders because the distinction that necessitated the
differentiation as between Customer and Professional orders is not
meaningful with respect to QCC Orders. QCC Orders are orders to buy or
sell at least 1,000 contracts, or 10,000 contracts in the case of Mini
Options.\25\ These large-sized contingent orders are complex in nature
and have a stock-tied component, which requires the option leg to be
executed at the NBBO or better. The parties to a contingent trade are
focused on the spread or ratio between the transaction prices for each
of the component instruments (i.e., the net price of the entire
contingent trade), rather than on the absolute price of any single
component. Also, no Customer priority exists with respect to QCC Orders
as with orders transacted within the order book or on the Floor.
Permitting Professional orders to be treated similar to Customer orders
with respect to this order type will attract more QCC Orders to the
Exchange because the Exchange would no longer assess a QCC Transaction
Fee for Professional orders.
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    \25\ See notes 9 and 10 above.
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    Further, the Exchange recently amended its definition of a
Professional to add specificity with respect to the manner in which the
volume threshold will be calculated to determine if orders should be
treated as Professional.\26\ Currently, member organizations are
required to review their Customers' activity on at least a quarterly
basis to determine whether orders that are not for the account of a
broker-dealer should be represented as Customer orders or Professional
orders.\27\ The Exchange anticipates that the specificity added to the
Professional definition may cause current market participants that mark
orders as Customer to be required to mark those orders as Professional
as the calendar quarter comes to a close. Orders that were marked
Customer were not subject to a fee. With this proposal, Professional
orders would not be assessed a QCC Transaction Fee. Furthermore, when a
QCC Order is Customer-to-Customer or Customer-to-Professional the agent
transacting the QCC Order will not be eligible to receive a QCC Rebate.
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    \26\ See Securities Exchange Act Release No. 77054 (February 4,
2016), 81 FR 7166 (February 10, 2016) (SR-Phlx-2016-10) (Notice of
Filing of Proposed Rule Change Relating to Professional Customer
Definition). This rule change became operative on April 1, 2016.
    \27\ Orders for any Customer that had an average of more than
390 orders per day during any month of a calendar quarter must be
represented as Professional orders for the next calendar quarter.
Member organizations are required to conduct a quarterly review and
make any appropriate changes to the way in which they are
representing orders within five days after the end of each calendar
quarter. While member organizations will only be required to review
their accounts on a quarterly basis, if during a quarter the
Exchange identifies a Customer for which orders are being
represented as Customer orders but that has averaged more than 390
orders per day during a month, the Exchange will notify the member
organization and the member organization will be required to change
the manner in which it is representing the Customer's orders within
five days. See Id. at 7165, n.5.
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    The Exchange believes that no longer assessing a QCC Transaction
Fee for Professional orders and not paying a QCC Rebate on Customer-to-
Professional orders is equitable and not unfairly discriminatory
because QCC Orders are distinctive as compared to transactions executed
within the order book or on the Floor, which orders are subject to
exposure and grant Customers priority over other market participants.
The original purpose for the distinction between a Customer and a
Professional was to prevent market professionals \28\ with access to
sophisticated trading systems that contain functionality not available
to retail Customers, from taking advantage of Customer priority, where
Customer orders are given execution priority over non-Customer orders.
The Exchange noted at the time that it adopted the Professional
designation that identifying Professional accounts based upon the
average number of orders entered for a beneficial account was an
appropriate objective approach that would reasonably distinguish such
persons and entities from retail investors.\29\ QCC Orders are by
definition large-sized contingent orders which have a stock-tied
component.
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    \28\ The Exchange noted in its filing that market professionals
have access to functionality, including things such as continuously
updated pricing models based upon real-time streaming data, access
to multiple markets simultaneously and order and risk management
tools. See Securities and Exchange Act Release No. 61426 (January
26, 2010), 75 FR 5360 (February 2, 2010) (SR-Phlx-2010-05).
    \29\ See Securities and Exchange Act Release No. 61426 (January
26, 2010), 75 FR 5360 (February 2, 2010) (SR-Phlx-2010-05).
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    With respect to QCC transactions, the Commission noted in an order
approving a qualified contingent cross order type on International
Securities Exchange, LLC (``ISE'') that ``The Commission believes that
those customers participating in QCC Orders will likely be
sophisticated investors who should understand that, without a
requirement of exposure for QCC Orders, their order would not be given
an opportunity for price improvement on the Exchange. These customers
should be able to assess whether the net prices they are receiving for
their QCC Order are competitive, and who will have the ability to
choose among broker-dealers if they believe the net price one broker-
dealer provides is not competitive. Further, broker-dealers are subject
to a duty of best execution for their customers' orders, and that duty
does not change for QCC Orders.'' \30\ The intent behind the
Professional designation does not apply in the context of transacting
QCC Orders, because of the size of the order, sophistication of the
investor and complexity of the transaction, and therefore the pricing
differentiation is not necessary. For these reasons the Exchange
believes that distinguishing a Customer order from a Professional order
is not necessary with respect to QCC Orders.
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    \30\ See Securities and Exchange Act Release No. 63955 (February
24, 2011), 76 FR 11533 (March 2, 2011) (SR-ISE-2010-73).
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    With respect to distinguishing Professional orders from other Non-
Customer participant orders, the Exchange notes that these other market
participants are distinct from a Professional for purposes of assessing
QCC Transaction fees for the below reasons. With respect to Firms,
these market participants are eligible for the Monthly Firm Fee Cap of
$75,000 per month.\31\ Firms are not subject to QCC Transaction Fees
once the Monthly Firm Fee Cap is met in a given month. Specialists and
Market Makers are eligible for the Monthly Market Maker

Cap of $500,000 per month.\32\ Specialists and Market Makers are not
subject to QCC Transaction Fees once the Monthly Market Maker Cap is
met in a given month. Professionals are not subject to similar caps.
With respect to Broker-Dealers, the Exchange notes that members may
choose to register as a Broker-Dealer. This category of market
participant transacts QCC Orders on an agency basis and receives
eligible rebates pursuant to the QCC Rebate Schedule.\33\ By way of
example, presume a Customer order to buy 10,000 contracts eligible as a
QCC Order. Presume the selling contra-parties to this order are a
Customer, Professional, Firm, Specialist and Broker-Dealer each with
2,000 contracts. In this example, the Customer buying order will not be
subject to a QCC Transaction Fee. The Customer selling order would not
be subject to a fee or rebate. The Professional selling order would not
be subject to a fee or rebate as proposed herein. Orders for Firms,
Specialists and Broker-Dealers would be assessed a $0.20 per contract
QCC Transaction Fee and would be eligible for rebates pursuant to the
QCC Rebate Schedule. Market participants acting as agent, as compared
to market participants trading for their own account, are eligible to
receive QCC Rebates. The Exchange pays QCC Rebates to market
participants acting as agent for QCC Orders, subject to the QCC Rebate
Schedule.
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    \31\ Firms are subject to a maximum fee of $75,000 (``Monthly
Firm Fee Cap''). Firm Floor Option Transaction Charges and QCC
Transaction Fees, in the aggregate, for one billing month will not
exceed the Monthly Firm Fee Cap per member organization when such
members are trading in their own proprietary account. See Section II
of the Pricing Schedule.
    \32\ Specialists and Market Makers are subject to a ``Monthly
Market Maker Cap'' of $500,000 for: (i) Electronic Option
Transaction Charges; and (ii) QCC Transaction Fees (as defined in
Exchange Rule 1080(o) and Floor QCC Orders, as defined in 1064(e)).
The trading activity of separate Specialist and Market Maker member
organizations will be aggregated in calculating the Monthly Market
Maker Cap if there is Common Ownership between the member
organizations. See Section II of the Pricing Schedule.
    \33\ QCC Rebates are paid by volume. There are currently six
tiers which pay a QCC Rebate between $0.00 and $0.11 per contract.
See Section II of the Pricing Schedule. Of note, market participants
may transact QCC Orders on an agency basis and be eligible for a QCC
Rebate.
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    The Exchange believes that distinguishing Professional orders from
other Non-Customer orders is equitable and not unfairly discriminatory
because with respect to QCC Orders it is difficult to distinguish a
Customer order from a Professional order. QCC Orders are an exception
to the general distinctions drawn as between Customer orders and
Professional orders. Aside from the lack of priority for QCC Orders,
the size of the order, sophistication of the investor and complexity of
the transaction make it difficult to distinguish a Customer order from
a Professional order. For purposes of the QCC Order, the Exchange
believes that such distinction is not necessary.
    Further, the Exchange's proposal would continue to assess all other
market participants a QCC Transaction Fee of $0.20 per contract. Also,
Customer-to-Professional orders will not be eligible for a QCC Rebate
for the reasons explained herein.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. In terms of inter-market
competition, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive, or rebate opportunities available at other venues to be more
favorable. In such an environment, the Exchange must continually adjust
its fees to remain competitive with other exchanges and with
alternative trading systems that have been exempted from compliance
with the statutory standards applicable to exchanges. Because
competitors are free to modify their own fees in response, and because
market participants may readily adjust their order routing practices,
that the degree to which fee changes in this market may impose any
burden on competition is extremely limited.
    The initial purpose of the distinction between a Customer order and
a Professional order was to prevent market professionals with access to
sophisticated trading systems that contain functionality not available
to retail customers, from taking advantage of Customer priority, where
Customer orders are given execution priority over Non-Customer orders.
Professional orders are identified based upon the average number of
orders entered for a beneficial account.\34\
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    \34\ See note 5.
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    QCC Orders are by definition large-sized contingent orders which
have a stock-tied component. The parties to a contingent trade are
focused on the spread or ratio between the transaction prices for each
of the component instruments (i.e., the net price of the entire
contingent trade), rather than on the absolute price of any single
component. Treating Customer orders and Professional orders in the same
manner in terms of pricing with respect to QCC Orders does not provide
any advantage to a Professional. The distinction does not create an
opportunity to burden competition, for the reasons stated herein with
respect to priority as well as the reasons below.
    With respect to distinguishing Professional orders from other Non-
Customer orders, the Exchange notes that Non-Customer orders are
distinct from Professional orders for purposes of assessing QCC
Transaction fees. Firms are eligible for the Monthly Firm Fee Cap and
not subject to QCC Transaction Fees once the Monthly Firm Fee Cap is
met in a given month.\35\ Specialists and Market Makers are eligible
for the Monthly Market Maker Cap and not subject to QCC Transaction
Fees once the Monthly Market Maker Cap is met in a given month.\36\
Professionals are not subject to similar caps. With respect to Broker-
Dealers, the Exchange notes that members may choose to register as a
Broker-Dealer. This category of market participant transacts QCC Orders
on an agency basis and is eligible to receive QCC Rebates. Further, the
Exchange's proposal would continue to assess Specialist, Marker Maker,
Firm and Broker-Dealer orders similar to QCC Transaction Fee of $0.20
per contract. Also, Customer-to-Professional orders do not impose an
undue burden on intra-market competition for the reasons explained
herein.
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    \35\ Market participants acting as agents would be eligible to
receive a QCC Rebate.
    \36\ Specialists and Market Makers trade only for their own
account.
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    The Exchange's proposal does not place on undue burden on inter-
market competition because the QCC order type is similar on other
options exchanges \37\ and these exchanges may also file to eliminate
the distinction between Customers and Professionals for the QCC order
type.
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    \37\ See Chicago Board Options Exchange, Incorporated's Fees
Schedule and Miami International Securities Exchange LLC's Pricing
Schedule.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\38\
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    \38\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such

action is: (i) Necessary or appropriate in the public interest; (ii)
for the protection of investors; or (iii) otherwise in furtherance of
the purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-Phlx-2016-51 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-Phlx-2016-51. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml).
    Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly.
    All submissions should refer to File Number SR-Phlx-2016-51 and
should be submitted on or before May 18, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\39\
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    \39\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-09716 Filed 4-26-16; 8:45 am]
BILLING CODE 8011-01-P


APPLICATION FOR PERMIT OR COURTESY PERMIT UNDER 7 CFR 340   NAME AND ADDRESS OF APPLICANT Dr. William L. MacDonald Division of Plant and Soil Sciences 401 Brooks Hall, P. O. Box 6058 West Virginia University Morgantown, WV 26506 6058   PERMIT REQUEST Limited Interstate Movement Limited Importation X Release into the Environment Courtesy Permit   THIS REQUEST X New Renewal Supplemental   Telephone Number 304 293 3911 ext. 2236   MEANS OF MOVEMENT Mail Common Carrier X Baggage of Handcarried ( by whom: Dr. William MacDonald)

  GIVE THE FOLLOWING Scientific Name Common Name Trade Name ( 1) Donor Organism Cryphonectria parasitica CHV1 Euro7 Chestnut blight ( hypovirulent) ( 2) Recipient Organism Cryphonectria parasitica Ep 155/ Ep 146 Chestnut blight ( virulent) ( 3) Vector/ Vector Agent PLASMID pXHE7 ( 4) Regulated Organism or Product Transgenic hypovirulent Cryphonectria parasitica strains containing hypovirus cDNA and expressing hygromycin resistance ( 5) If product, list names of constituents   QUANTITIY OF REGULATED ARTICLE TO BE INTRODUCED AND PROPOSED SCHEDULE AND NUMBER OF INTRODUCTIONS Approximately 4 5 liters of the genetically engineered organism, mixed with water agar will be distributed over the surface of naturally occurring or artificially established C. parasitica cankers three times per year ( June August) for three years.

  DATE ( or inclusive dates of period) OF IMPORTATION, INTERSTATE MOVEMENT, OR RELEASE March 2004   August 2006   COUNTRY OR POINT OF ORIGIN OF THE REGULATED ARTICLE The genetically engineered inoculum will be prepared in Morgantown, WV APHIS PERMIT West Virginia University, Dr. William MacDonald 2   PORT OF ARRIVAL DESTINATION OR MOVEMENT, OR SPECIFIC LOCATION OF RELEASE The specific release site is in the Monongahela National Forest near Circleville, WV ( Pendleton County) off US Forest Service Road # 48 ( 38 º 35' 39" N, 79 º 34' 16" W; elevation 3627 feet).

  ANY BIOLOGICAL MATERIAL ( e. g. culture medium, or host material) ACCOMPANYING THE REGULATED ARTICLE DURING MOVEMENT Conidia of the genetically engineered ( transgenic) isolates will be mixed with 4% water agar to the consistency of applesauce.

  APPLICANTS FOR A COURTESY PERMIT STATE WHY YOU BELIEVE THE ORGANISM OR PRODUCT DOES NOT COME WITHIN THE DEFINITION OR A REGULATED ARTICLE   SEE REVERSE SIDE   SIGNATURE OR REPSONSIBLE PARTY   PRINTED NAME AND TITLE   DATE APHIS PERMIT West Virginia University, Dr. William MacDonald 3 APPLICATION FOR PERMIT ( APHIS FORM 2000)

ENCLOSURE 13a. NAMES OF PERSONS INVOLVED IN THIS PROJECT The transformed organism was developed by: Dr. Donald L. Nuss, Director Center for Biosystems Research University of Maryland Biotechnology Institute 5115 Plant Sciences Building College Park, MD 20742 Telephone: 301 405 0334 E mail: nuss@ umbi. umd. edu Deployment tests will be conducted by: Dr. William L. MacDonald Division of Plant and Soil Sciences Department of Plant Pathology and Environmental Microbiology 401 Brooks Hall, P. O. Box 6058 West Virginia University Morgantown, WV 26506 6058 Telephone: 304 293 3911 extension 2236 Email: macd@ mail. wvu. edu APHIS PERMIT West Virginia University, Dr. William MacDonald 4 ENCLOSURE 13b. DESCRIPTION OF REGULATED ARTICLE A cDNA copy of CHV1 Euro7 hypovirus RNA, present in the cytoplasm of hypovirulent ( less virulent) strains of the chestnut blight fungus, has been genetically engineered into the nucleus of the fungus to produce transgenic hypovirulent fungal strains.

PROBLEM: Cryphonectria parasitica was responsible for the destruction of several billion mature American chestnut trees early in the 20th century and remains a serious problem in North America ( Anagnostakis, 1982; Griffin, 1986; MacDonald and Fulbright, 1991). Natural viruscontaining hypovirulent strains of C. parasitica can serve as biological control agents by virtue of their ability to convert virulent strains to the hypovirulent phenotype. Introduction of the viral cDNA into the nucleus of virulent fungal strains by DNA mediated transformation resulted in the generation of engineered ( transgenic) hypovirulent strains. Since the transgenic hypovirulent strains contain a chromosomally integrated cDNA copy of the viral genome as well as the normal cytoplasmically replicating viral RNA form, the hypovirulent phenotype can be transmitted to progeny of a sexual cross between a transgenic strain and a sexually compatible virulent strain ( a transmission pathway not available to natural hypovirulent strains). Thus, transgenic hypovirulent strains are predicted to be superior biological control agents because of their enhanced dissemination properties. We have constructed a full length cDNA clone of the dsRNA of European hypovirus, CHV1 Euro 7 ( Chen and Nuss, 1999). A similar hypovirulenceassociated viral RNA [ CHV1 EP713], Choi and Nuss, 1992b) was field tested in CT and WV between1996 1999 Anagnostakis et al. 1998).. The Euro 7 hypovirus is less debilitating to the fungal host and thus, it should be a more effective biological control agent that than the highly debilitating CHV1 EP713 hypovirus.

BACKGROUND: Cryphonectria parasitica was introduced into North America at the end of the 19th century on imported Japanese chestnut trees, and spread initially on nursery stock sold locally and shipped by mailorder. Additional spread was effected by insects, gastropods, birds, and animals that moved across the bark cankers, picking up asexual spores. In addition, winddisseminated sexual spores also contributed to the epidemic. The native chestnuts, Castanea dentata ( Marsh.) Borkh., and chinquapins, Castanea pumila ( Linn.) Mill. proved to be very susceptible to this pathogen, and massive loss of timber resulted ( Anagnostakis, 1982a; Griffin, 1986; MacDonald and Fulbright, 1991). The native ranges of C. dentata and C. pumila are shown in Figure 1. The fungus is a wound pathogen, causing cankers that kill the bark and cambium of American chestnut and chinquapin distal to an infection. Sprouts from the root collar grow until wounded and infected, and the cycle is repeated. All other species of Castanea are hosts of Cryphonectria sp. ( Asian species, C. mollissima, crenata, seguini and henryi are rarely killed by infections). Other hosts with either a parasitic or saprophytic habit include: Quercus alba, coccinea, falcata, ilex, marcrocarpa, montana, muhlenbergi, petraea, prinus, pubecens, robur and rubra, Eucalyptus camaldulensis, haemastoma, microcorys, punctata and robusta Acer palmatum, pensylvanicum and rubrum, Carpinus carolinia, Carya ovata, Fagus sylvatica, and Ostrya virginiana ( Stipes et al. 1978).

Figure 1. Maps showing the native ranges of the American species of Castanea. ( A) American chestnut, Castanea dentata; ( B) Allegheny chinquapin, Castanea pumila, var. pumila, APHIS PERMIT West Virginia University, Dr. William MacDonald 5 Natural, virus containing, virulence attenuated ( hypovirulent) strains of C. parasitica can serve as biological control agents by virtue of their ability to convert virulent strains to the hypovirulent phenotype. French mycologist, Jean Grente, reported in his 1981 thesis that chestnut trees in French orchards treated in 1967 were surviving well by 1974, and that spread of hypovirulent strains spread was detected at a rate of about a meter per year. Such viruscontaining strains have been in use in Connecticut field tests since the spring of 1973 when permission was received from R. W. Beardmore ( USDA, APHIS). A strain with French hypovirus CHV1 EP713 was sent to West Virginia for MacDonald's use in 1975 to initiate biological control studies. Since then, native hypoviruses of C. parasitica have been discovered in West Virginia. Field tests of hypovirulent C. parasitica strains have been conducted at various sites West Virginia nearly continuously for the past 25 years. Choi and Nuss ( 1992a) developed a transgenic hypovirulent strain that contained a cDNA copy of the RNA of the French virus, CHV1 EP713 ( Choi and Nuss, 1992a). Permission was granted in 1996 ( APHIS, EPA, WV Department of Agriculture) for field release of two genetically engineered strains ( containing CHV1 EP713), Ep 146/ pXH9 and Ep 155/ pXH9 in Tucker County, WV. These strains included C. parasitica strains Ep146 and Ep155, both containing a cDNA copy of hypovirus CHV1 Ep713 on transformation plasmid pXH9 and designated Ep146/ pXH9 and Ep155/ pXH9. Findings from the 1996 study indicated that CHV1 EP713 is a very debilitating virus and disseminated poorly. Consequently, efforts were initiated to identify a less debilitating hypovirus that could be used to contruct a transgenic hypovirulent strain with enhanced properties of persistence in and dissemination through the C. parasitica population. CHV1 Euro7 was the identified hypovirus. Nuss and Chen ( 1999) constructed a full length clone of hypovirus CHV1 Euor7 RNA. Introduction of the viral cDNA into virulent fungal strains by DNA mediated transformation resulted in the generation of engineered hypovirulent strains ( transgenic). Since the engineered by hpovirulent strains contain a chromosomally integrated cDNA copy of the viral genome as well as the normal cytoplasmically replicating viral RNA form, the hypovirulence phenotype can be transmitted to progeny of sexual crosses between an engineered strain and a sexually compatible virulent strain ( a transmission pathway not available to natural cytoplasmic hypovirulent strains). Reversion ( i. e. loss of cDNA information) of transgenic strains generated from virulent C. parasitica strains, e. g., Ep146 and Ep155, would result in virus free strains, which already exist in West Virginia forests. The transgenic hypovirulent CHV1 Euro 7 strains should be superior biological control agents because of their enhanced dissemination properties and greater biological control potential, relative to transgenic CHV1 Ep713 strains. The performance of these strains in the environment can be monitored by: ( 1) cultural screening of reisolated C. parasitica strains; ( 2) testing for the presence of the transformation plasmid by screening for hygromycin resistance; ( 3) PCR identification of the inserted hypovirus cDNA; and, ( 4) identification of cDNA derived viral RNA by RealTime PCR.

Genetically engineered ( transgenic) hypovirulent strains of the chestnut blight fungus, C. parasitica have been developed. These transgenic strains are likely to be more effective biological control agents than naturally occurring hypovirulent strains for the reasons indicated below. A. American chestnut B. Allegheny chinquapin APHIS PERMIT West Virginia University, Dr. William MacDonald 6 HYPOVIRUS BACKGROUND: Hypovirulent strains of C. parasitica, first discovered in Europe and subsequently in the United States, can have a curative effect when inoculated onto existing chestnut cankers. Provided that the resident virulent C. parasitica strain is of the same or closely related vegetative compatibility group as the applied hypovirulent strain, the two strains can undergo anastomosis ( fusion of hyphae) resulting in the transmission of the hypovirus and conversion of the resident virulent strain to the hypovirulent phenotype. We now know with certainty that the hypovirulence factor is a cytoplasmically replicating virus found predominantly in a double stranded ( ds) RNA form ( Choi and Nuss, 1992b). Natural hypovirulent C. parasitica strains have had a very significant effect in reducing the severity of the blight epidemic in Italy and have been used by the French and Italian governments as effective biological control agents ( Robin and Heiniger, 2001; Turchetti, 1982; Grente and Berthelay Sauret, 1978). Natural hypovirulent C. parasitica strains also have been commercialized as part of a biological control service provided to chestnut growers by an Italian firm ( f. lli. S. p. A., Division Applicazioni Biologiche Milano) to control blight on European chestnut trees. European chestnuts have recovered in many western European countries because of the natural spread of hypovirulence ( Turchetti and Maresi, 1998). Hypovirulent strains are reported to be spreading naturally in eastern Europe as well ( Celiker and Onogur, 2001; Juhásová and Bernadovicová, 2001; Uscuplic and Testic, 1998). With the resurgence of European chestnuts, the production of nuts has increased dramatically since 1990 ( Bounous, 1999). With the spread of hypovirulence, coupled with cultivar selection and cultural practices, chestnut production has increased in Europe from 338,000 quintals ( hundredweight: 1 quintal = 100 pounds) in 1983 to 669,000 quintals in 1997. These numbers still pale in comparison to the 8.3 million quintals recorded in 1911 ( Adua, 1998a; Adua, 1998b; Buonous, 1999). The current sense is that chestnut blight is no longer a serious problem for European chestnut; ink disease ( Phythopthora sp.) has supplanted chestnut blight as the most significant cultural problem ( Adua, 1998a). Reports of the successful control of chestnut blight in Europe resulting from the natural dissemination or artificial application of natural hypovirulent C. parasitica strains stimulated efforts to examine whether transmissible hypovirulence might be effective in controlling blight in North America. Investigators at The Connecticut Agricultural Experiment Station confirmed that European hypovirulent strains could cure cankers incited by North American virulent strains under controlled conditions ( Van Alfen et al, 1975; Anagnostakis and Jaynes, 1973). Native North American hypovirulent strains were subsequently found in several different geographic locations beginning in 1976 with the isolation of a hypovirulent strain from the bark of surviving American chestnut trees located in Michigan ( Anagnostakis, 1982a; MacDonald and Fulbright, 1991). Fulbright and coworkers confirmed the presence of native hypovirulent strains in various locations throughout the state of Michigan and provided evidence for ongoing biological control ( Fulbright et al. 1983; Garrod et al. 1985). However, initial attempts to control blight in the eastern forest ecosystem by the artificial introduction of hypovirulent strains provided less encouraging results and have been discussed in detail ( Anagnostakis, 1982a; Griffin, 1986; Anagnostakis, 1990; MacDonald and Fulbright, 1991). Although clear evidence for the conversion of virulent cankers was obtained, biological control by the introduced hypovirulent strains was not always sustainable. There are numerous opinions as to why biological control by introduced transmissible hypovirulence has been less successful in North America than in Europe ( Anagnostakis et al. 1986). One clear contributing factor to the efficient spread of introduced hypovirulent strains is the vegetative incompatibility system that controls the ability of different C. parasitica strains to undergo anastomosis. Based on genetic analysis, it is estimated that 7 nuclear genes determine vegetative compatibility ( Cortesi and Milgroom, 1998; Huber, 1996). Two strains are APHIS PERMIT West Virginia University, Dr. William MacDonald 7 vegetatively compatible, and thus freely able to undergo anastomosis, if they have the same alleles at each of these loci. Viable anatomosis between two isolates decreases as the number of dissimilar alleles increases. Since the natural hypovirulence associated virus is not transmitted to sexual spores of virulent spores during mating ( Anagnostakis 1982a; 1982b; 1988; Fulbright et al., 1988), hypovirulence associated viruses are limited to the vegetative compatibility groups of the input hypovirulent strains. This limiting factor restricts the virus to a very narrow number of vegetative compatibility groups, thereby reducing the potential for virus movement and consequent biological control. Anagnostakis et al. ( 1986) reported that vegetative compatibility diversity was significantly higher in North American than in European C. parasitica populations, providing further evidence that virus introduction into numerous vegetative compatibility groups is essential for the success of biological control. Choi and Nuss ( 1992b) reported the development of a full length infectious cDNA clone of the hypovirulence associated viral RNA present in hypovirulent C. parasitica strain 713 ( family Hypoviridae, genus Hypovirus, species CHV1 EP713L). Transformation of virulent C. parasitica strains with this full length cDNA clone conferred the complete hypovirulent phenotype. Cytoplasmic dsRNA was resurrected from the chromosomally integrated cDNA copy and was able to convert compatible virulent strains to hypovirulent. These results established that viral dsRNA is indeed the causal agent of hypovirulence and demonstrated the feasibility of engineering hypovirulent fungal strains. Since the transgenic hypovirulent C. parasitica strains contain a chromosomally integrated viral cDNA copy, it was predicted that, unlike the situation with natural hypovirulent strains, viral genetic information would be inherited by the progeny of a sexual cross between an engineered hypovirulent strain and a sexually compatible virulent strain. This prediction has been confirmed in field tests ( 1997 1999) conducted in West Virginia ( unpublished data) and Connecticut with Ep155/ pXH9, and the ascospore progeny were shown to contain the integrated viral cDNA copy as well as a resurrected cytoplasmically replicating ds form of the viral RNA ( Anagnostakis et al. 1998). Unlike the vegetative incompatibility system in C. parasitica, sexual compatibility is controlled by a single mating type locus involving two alleles designated MAT 1 and MAT 2 ( Anagnostakis, 1988) and would be expected to pose few barriers to the spread of the integrated viral cDNA copy through a virulent fungal population by sexual crossing. Due to allelic rearrangement, the majority of progeny of a sexual cross are of different vegetative compatibility groups than the parental strains. Consequently, resurrection of the cytoplasmic viral RNA form in the progeny representing new vegetative compatibility groups should then result in expanded vegetative dissemination of the viral genetic information. Stable transmission of a virus at a high frequency (> 99%) to asexual spores of engineered hypovirulent strains also has been demonstrated in the laboratory ( Chen, Choi and Nuss, 1993). These combined properties should result in significantly increased dissemination and sustainability of the hypovirulence phenotype after field introduction of a transgenic hypovirulent C. parasitica strain. The trangenic hypovirulent C. parasitica strains containing the nuclear hypovirus cDNA copy appear identical to the corresponding hypovirus transfected hypovirulent strains in terms of morphology, growth characteristics, production of the extracellular enzyme laccase, ability to sporulate and reduced virulence to chestnut ( Choi and Nuss, 1992; Chen and Nuss, 1999 and unpublished data). In addition, the viral dsRNA present in the engineered hypovirulent strain gave the same pattern as hypovirus RNA when analyzed by terminal labeling and partial ribonuclease T1 digestion ( unpublished data) indicating that the viral dsRNA that is resurrected from the integrated cDNA copy does not contain any foreign ( non natural) nucleotides ( Chen et al. 1994). The engineered hypovirulent fungal strains do, however, contain the gene for E. coli APHIS PERMIT West Virginia University, Dr. William MacDonald 8 hygromycin phosphotransferase that confers resistance to the antibiotic hygromycin B as part of the integrated transformation plasmid vector. APHIS PERMIT West Virginia University, Dr. William MacDonald 9 13c. DESCRIPTION OF MOLECULAR BIOLOGY Comparison of CHV1 Euro7 and CHV1 EP713 hypoviruses.

Cryphonectria parasitica strains infected with hypovirus CHV1 EP713 form small superficial cankers on American chestnut trees that are generally devoid of spore bearing stromal pustules. In contrast, infection of chestnut tissue by C. parasitica strains infected with hypovirus CHV1 Euro7 is characterized by aggressive canker formation early after inoculation that eventually slows or ceases, concomitant with heavy callus formation at the canker margins. Moreover, these cankers are covered by stromal pustules containing viable asexual spores ( Chen and Nuss, 1999). MacDonald and Fulbright ( 1991) have discussed the view that successful hypovirulencemediated biological control is likely to require a balance between ecological fitness and virulence attenuation. In order to persist and spread, a hypovirulent isolate must be able to effectively colonize and produce spores on chestnut bark. CHV1 Euro7 infected C. parasitica strains differ from strains infected with the more severe hypovirus CHV1 EP713 in precisely those properties. The ability to construct transgenic hypovirulent C. parasitica strains containing nuclear copies of the CHV1 Euro7 infectious cDNA provides the opportunity to combine properties of enhanced colonization and spore production with a novel mode of virus transmission to ascospore progeny. The CHV1 Euro7 coding strand RNA is 11 nucleotide residues shorter that that of CHV1 EP713: 12,701 nucleotides ( excluding the poly( A) tail) versus 12,712 nucleotides ( Chen and Nuss, 1999) ( Figure 2). The difference relative to the CHV1 EP713 sequence include two single nucleotide deletions and one nucleotide insertion within the 5' noncoding region, the deletion within ORF B of one codon that corresponds to CHV1 EP713 leucine residue 1400 ( nucleotides 6561 6563), and seven nucleotide deletions within the 3' noncoding region upstream from the poly( A) tail. Four of the differences within the 3' noncoding region occur adjacent to the poly( A) tail: 5' GAACAACAAG poly( A) for CHV1 EP713 versus 5' GAACAAC poly( A) for CHV1 Euro7. Thus, this four base difference could result from a simple G to A transition at CHV1 EP713 map position 12712. CHV1 Euro7 and CHV1 EP713 are very similar in nucleotide and amino acid sequence and have been classified as isolates within the same species ( Chen and Nuss, 1999). Identity at nucleotide level ranges from a low of 87% for the helicase region to a high of 93% for the noncoding terminal regions. The identity at the predicted amino acid level is 90% for p40 and 98% for the region between the polymerase and helicase coding domains ( Figure 3). APHIS PERMIT West Virginia University, Dr. William MacDonald 10 Figure 2. The genetic organization of the coding or sense strand of CHV1 Euro7 dsRNA includes the 495 nt non coding leader sequence, the 1869 nt ORF A, the 5' UAAUG 3' pentanucleotide ORF A/ ORF B junction, ORF B consisting of 9494 nt, the 844 no non coding 3' terminal domain and the 3' poly( A) tail.

A B 5' 3' A n RIG / NRL p69 p29 p40 AUTOCATALYTIC p48 LVG / AEE TAA ATG POLYMERASE MOTIF HELICASE MOTIF 494 nt 1869 nt 9494 nt 844 nt CHV1 Euro7 APHIS PERMIT West Virginia University, Dr. William MacDonald 11 Figure 3. Comparison of the CHV1 Euro7 cDNA sequence information with that of a previously reported full length hypovirus cDNA sequence: CHV1 EP713 ( EP155 from CT with a hypovirus from France). ( A) Similarities at the nucleotide levels. Previously identified protein coding regions are noted within the open boxes representing the viral genome. The lengths in nucleotides for the 5' and 3' noncoding ( nc) regions and ORFs A and B for CHV1 EP713 are indicated at the top. The numbers of nucleotides for comparable regions of the other hypovirus were 494, 1,869, 9,494, and 844, respectively for CHV1 Euro7. The percent nucleotide identity for different coding and noncoding regions is indicated between the different viral genome diagrams being compared. ( B) Similar information at the deduced amino acid levels.

Comparison of transformation plasmids pXHE7 and pXH9. Construction of an infectious full length CHV1 Euro7 cDNA. The general protocol previously used for construction of a full length infectious cDNA clone of CHV1 EP713 dsRNA ( pLDST) ( Choi and Nuss, 1992b; Chen et al., 1994) was adapted for construction of a CHV1 Euro7 infectious cDNA clone ( Chen and Nuss, 1999). Early in the construction process, cDNA clones of the terminal domains were modified through the use of PCR to incorporate a unique Not I site followed by a T7 polymerase promoter fused to the 5' terminus of the CHV1 Euro7 coding strand and the addition of a unique Spe I site following the CHV1 Euro7 3' terminal poly( A). Several large intermediate clones were generated from overlapping partial cDNA clones utilizing common endonuclease restriction sites contained within neighboring clones. The full length cDNA was obtained by ligating two terminally modified large cDNA clones that spanned CHV1 Euro7 map positions 1 5389 and 5220 to the 3' terminus at a common Nar I site ( map position 5310) and cloning into plasmid vector pCRScript SK(+) ( Stratagene) to form plasmid pTE7. Transcripts corresponding to the CHV1 Euro7 coding strand were synthesized from Spe I digested pTE7 in a T7 polymerase reaction and used to transfect C. parasitica spheroplasts as described by Chen et al. ( 1994). The full length CHV1 Euro7 cDNA in pTE7 also was used to construct the transformation plasmid pXHE7 used to make the transgenic CHV1 Euro7 C. parasitica strains as indicated below. APHIS PERMIT West Virginia University, Dr. William MacDonald 12 Construction of transformation plasmid pXHE7. Plasmid pXHE7 ( Figure 4) differs from the transformation plasmids pXH9 and pXH103 described in the previous permit request only in the nature of the hypovirus cDNA portion of the plasmid; it contains the CHV1 Euro7 cDNA instead of the wild type ( pXH9) or tagged ( pXH103) CHV1 EP713 cDNA. Plasmid pXHE7 was constructed by liberating the CHV1 Euro7 cDNA from plasmid pTE7 ( see below) by Not I/ Spe I digestion and ligating that fragment ( the CHV1 Euro7 cDNA) into the base vector pCPXHY1 that had been modified at the multiple cloning site to contain a unique Not I site. The base vector pCPXHY1 also was described in detail in the previous request.

Figure 4. Description of tranformation plasmid used to engineer hypovirulent C. parasitica strains. Plasmid pXHE7 was used to introduce a full length copy of CHV1 Euro7 L dsRNA into virulent C. parasitica strains by DNA mediated transformation ( Choi and Nuss, 1992b). The plasmid contains the entire L dsRNA sequence fused upstream to the C. parasitica glyceraldehyde 3 phosphate gene ( gpd 1) promoter and fused downstream to the gpd 1 terminator. Plasmid pXHE7 also contains the Escherichia coli hygromycin B phosphotransferase gene as a selectable marker flanked by the Aspergillus nidulans trpC promoter and terminator domains. APHIS PERMIT West Virginia University, Dr. William MacDonald 13 13d. LOCALITY OF DONOR AND RECIPIENT ORGANISMS AND VECTOR STRAINS USED Recipient Strains strain 155 ATCC # 38755 isolated in 1977 from a natural canker on an American chestnut tree on Sperry Road in Bethany, Connecticut vegetative compatibility type 40 Mating type allele, MAT 2 strain 146 ATCC # 64671 isolated in 1977 as isolate 5 9 1 in the George Washington National Forest ( Forest Service access road # 61), near Franklin, West Virginia vegetative compatibility type 9 Mating type allele, MAT 1 Donor Strain strain Euro 7* ATCC # 66021 This strain is the source of CHV1 Euro7 hypovirus RNA introduced in the transgenic and transfected strains. It was isolated in 1978 from a natural, superficial infection on a European chestnut tree approximately 30 km north of Florence, Italy.

Wild type Strains from Pendleton County, WV ( These strains will be used to initiate virulent infections at the onset of the experiment if the number of wild type infections is not sufficient to promulgate sexual spores). PC17 Virus free, vegetative compatibility type 29, mating type allele, MAT 1 PC5 Virus free, vegetative compatibility type 24, mating type allele, MAT 2 PC23 Virus free, vegetative compatibility type 49, mating type allele, MAT 1 PC48 Virus free, vegetative compatibility type 31, mating type allele, MAT 2 PC37 Virus free, vegetative compatibility type 2, mating type allele, MAT 1 PC53 Virus free, vegetative compatibility type 26, mating type allele, MAT 2 * C. parasitica strain Euro 7 is in the Family Hypoviridae, Genus Hypovirus, Species Cryphonectria Hypovirus 1 as defined by Bradley I. Hillman, Dennis W. Fulbright, Donald L. Nuss and Neal K. Van Alfen at the summer, 1993 International Virology Congress ( Hillman, et al. 1995). APHIS PERMIT West Virginia University, Dr. William MacDonald 14 ENCLOSURE 13e. DESCRIPTION OF THE PURPOSE OF THE INTRODUCTION AND FIELD DESIGN PURPOSE: The objective of this field trial is to test the ability of the transgenic isolates to effectively disseminate, become established and initiate biological control of chestnut blight.

FIELD SITE LOCATION: American chestnut primarily exists as an understory shrub on sites where it once grew. When the overstory is removed or thinned by cutting, insect defoliation or severe weather events, the sprouts can be released. Sprouts generally grow vigorously for 7 10 years, reaching a diameter of 8 12 cm; this rapid growth is followed by the blight epidemic which results in sprout death. A suitable field site has been identified in the Monongahela National Forest in Pendleton County, West Virginia ( Figure 5). The site is accessible from USDA Forest Service Access Road # 48 with coordinates ( 38 º 35' 39" N, 79 º 34' 16" W; elevation 3627 feet; UTM coordinates: 17S0624317, UTM4272289). The area has been cut over but a partial canopy remains along with a significant number of American chestnut sprouts and low to moderate levels of chestnut blight. The site, beyond a locked USFS gate, is in a nonpopulated area of the county thus reducing the chance of human intervention ( Figure 6).

Figure 5. Map of proposed release site of transgenic C. parasitica. The location is off USFS Road # 48 ( Snowy Mountain Quadrangle). Arrow indicates site location.

Figure 6. Detailed map of field plots in relation to WV State Route 28. To WV State Route 33 APHIS PERMIT West Virginia University, Dr. William MacDonald 15 WV State Route 28 USFS Access gate To Durbin USFS Road # 48 Log Road Field Site FIELD SITE SUPERVISOR: Dr. William MacDonald, Professor, 304 293 3911 ext. 2236.

DEPLOYMENT OBJECTIVE: To evaluate the ability of transgenic strains ( Ep146/ pXHE7 and Ep 155/ pXHE7) of Cryphonectria parasitica to become established, interact with virulent strains, disseminate and initiate biological control in a small forest opening.

EXPECTED STARTING DATE: May 15, 2004 FIELD DESIGN: Split plot design with three treatments as main plots and three replications.

TREATMENTS: ( 1) Transgenic   CHV1 Euro7 ( Ep146/ pXHE7 and Ep155/ pXHE7) ( 2) Non transgenic   CHV1 Euro 7 ( Ep146/ cytoplasmic and Ep155/ cytoplasmic) ( 3) Virulent   Ep146 and Ep155 ( virus free)

GENERAL PLAN FOR FIELD SITE: Transgenic C. parasitica strains containing CHV1 Euro 7 cDNA ( Ep146/ pXHE7 and Ep155/ pXHE7) will be established in a forest setting to determine their potential for dissemination. The performance of transgenic CHV1 Euro7 stains will be monitored by determining the frequency of recovery of hypovirulent strains from newly formed and established cankers, in addition to the production of hypovirulent spores. Similar measurements will be performed in plots treated with the corresponding non transgenic hypovirulent strains containing only the cytoplasmicly replicating CHV1 Euro7 RNA to test for advantages that the transgenic hypovirulent strains provide to dissemination. The non transgenic CHV1 Euro7 infected strains used in this study were generated by transfection with infectious CHV1 Euro7 synthetic transcripts derived from the same CHV1 Euro7 cDNA sequence ( in transcription plasmid pTE7) used to construct the transformation plasmid pXH7 as described by Chen and Nuss, 1999. Thus, the hypovirus RNA in the non transgenic hypovirulent strains designated EP155/ tpTE7 and EP146/ tpTE7 and in the transgenic hypovirulent strains EP155/ pXHE7 and EP146/ pXHE7 are derived from an identical primary nucleotide sequence. Dissemination of hypovirulence is expected in plots treated with transgenic and non transgenic cytoplasmic CHV1 strains; however, only the plots treated with transgenic CHV1 Euro7 strains should produce hypovirulent sexual spores ( ascospores). The control plots treated with virulent C. parasitica are expected to yield no hypovirulent conidia or ascospores.

FUNGAL STRAINS: In the event that an insufficient number of virulent infections are present at the onset of the study, six virus free, virulent C. parasitica strains ( see page 13), will be used APHIS PERMIT West Virginia University, Dr. William MacDonald 16 to initiate cankers. These strains were among sixty collected in December 2003 from the Pendleton. These strains were assayed for vegetative compatibility and mating type. Two transgenic isolates ( Ep146/ pXHE7 and Ep155/ pXHE7) will be used to spermatize virulent cankers. Isolates Ep 146 and Ep 155 ( ATCC 38755) were used as recipients for transformation with plasmid pXHE7, which contains a full length cDNA copy of hypovirus CHV1 Euro 7 RNA, to produce transgenic hypovirulent strains. In addition to the CHV1 Euro 7 full length cDNA, plasmid pXHE7 also contains the Escherichia coli hygromycin B phosphotransferase gene as a selectable marker flanked by the Aspergillus nidulans trpC promoter and terminator domains; this confers resistance to hygromycin ( HygR). Strains Ep146 and Ep155 transfected with infectious CHV1 Euro7 synthetic transcripts and desingated Ep146/ tpTE7 and Ep155/ tpTE7 will be in a second set of replicate plots. Virus free isolates Ep 146 and Ep 155 will be deployed in a third set of replicate plots.

DEPLOYMENT PROCEDURES: A series of nine plots will be established in the cut over area. Each of three treatments will be evaluated in three replicate plots: 1) the transgenic inoculum [ Ep146/ pXHE7 and Ep155/ pXHE7]; 2) non transgenic cytoplasmic inoculum [ Ep146/ tpTE7 and Ep155/ tpTE7]; and, 3) virus free virulent strains ( Ep146 and Ep155). All living trees in each plot that are 4 cm in diameter or larger will be numbered and mapped for future reference. Their diameters and disease status also will be recorded. A plot will contain 20 30 stems that meet the above criteria and will be physically separated from an adjacent plot by at least 15m. a) Treatment 1 ( transgenic inoculum). Three of the replicate plots will receive transgenic inoculum that will be deployed via two application techniques. The first is to apply a slurry mixture of the two transgenic isolates to virulent cankers that exist at the time of the initial release and to new cankers that develop during June, July and August, a period of high sexual receptivity. If any artificially inoculated virulent infections are established, they will be treated with the slurry inoculum. The application of the strain mixture is intended to spermatize developing wild type cankers, regardless of mating type ( MAT 1 or MAT 2), to promote outcrossing of the canker inciting strains, thereby resulting in the production of sexual spores ( ascospores) that are hypovirus laden. The hypovirus mixture will be prepared by growing each transgenic isolate on PDA under high light conditions for 10 14 days. Conidia will be liberated from each plate using 0.1% peptone, collected and adjusted to 107 conidia/ ml. Conidia from each transgenic strain will be mixed and then thickened with 4% water agar to the consistency of applesauce. The transgenic slurry will be transported to the field in sterile, 1.8L plastic containers. Two thirds of the trees in each plot will be selected for the spermatizing straininoculation procedure. One third of the trees will not receive any inoculum and serve as ` trap' trees to detect dissemination of the introduced strains. A second introduction method will be employed that is intended to initiate hypovirulent cankers. To accomplish this, areas of healthy bark ( 5 X 7 cm) will be scratch wounded and inoculated with a slurry of inoculum containing either the Ep146/ pXHE7 or Ep155/ pXHE7 inoculum source. Slurry preparation will proceed as above but the two isolates will not be mixed. The scratch wounds will be covered with an absorbent underpad ( Fisher Scientific) for a 3 week period to promote the establishment of the treatment inoculum. The artificially established cankers will be inititated ( 2/ stem) on the same set of trees that receive the spermatization treatment ( described above). The intent of the scratch wound inoculations is to create artificial hypovirulent cankers that will produce asexual hypovirulent inoculum ( conidia and mycelial fragments) that can serve to spermatize cankers or initiate hypovirulent infections. APHIS PERMIT West Virginia University, Dr. William MacDonald 17 b) Treatment 2 ( cytoplasmic inoculum). A second series of three replicate plots will be established and the trees treated and the inoculum introduced identically to procedures described in Treatment 1. Isolates Ep146/ tpTE7 and Ep155/ tpTE7 will carry only the cytoplasmically replicating CHV1 Euro7 RNA intoduced by transfection. These plots will serve to compare the biological control efficacy of the transgenic strains to their transfected hypovirulent counterparts. The treatment scheme used in Treatment 1 ( two thirds inoculuated and one third noninoculated) also will be used in these plots. c) Treatment 3 ( virulent inoculum). The third set of replicate plots will be established identically to Treatments 1 and 2. The introduced inoculum source, however, will consist of Ep146 and Ep155 virulent strains that are hypovirus free. The treatment scheme used in Treatment 1 ( two thirds inoculuated and one third noninoculated) also will be used in these plots.

EVALUATION AND SAMPLING a) Canker and tree health evaluation. All trees will be scored as healthy or infected at the initiation of the experiment. Cankers will be rated on a scale of 1 4 to represent the range of infection states, from lethal/ girdling infections with abundant stromata to those that possess heavy callus with little evidence of sporulation. Each November, subsequent evaluations will be made noting whether trees are alive or dead and the status ( rating) of each canker. A number of photos from representative trees and cankers will be taken to establish a photo log of each treatment type. b) Pre treatment canker sampling. At the initiation of the experiment, all pre existing cankers will be sampled. This will be accomplished by removing 2 4 two mm bark plugs from each canker. The plugs will be surface sterilized and cultured; the resulting isolates will be transferred to agar slants to establish a reference collection of virulent strains representative of those at the site at the time the experiment is initiated. c) Post treatment sampling. After the experiment is initiated, new cankers that arise on numbered stems will be sampled at 4 6 week intervals when the plots are visited from June November. Sampling will be conducted by removing 4 6 two mm bark plugs from each infection. The resulting C. parasitica colonies obtained from culturing the bark plugs will be evaluated for their hypovirus infection status ( see culture analysis of bark samples, next page). Additionally, a representative number of scratch wounded areas will be sampled to verify if the treatment inoculum became established. . d) Determining inoculum production. Each fall for three consecutive years, 7 mm bark disks will be removed from representative cankers in each treatment plot. To assess transgenic inoculum production, pycnidia and perithecia will be removed individually from the stromata embedded in the bark disks; liberated conidia and ascospores will be serially diluted to obtain individual spores. The colonies resulting from the asexual/ sexual spores will be evaluated for virulent or hypovirulent phenotypes. All ascospore colonies will be grown on PDA amended with hygromycin for screening, as described above.

DATA ANALYSIS a) Canker and tree health analysis. Tree health data, collected initially and each fall, will be compared to establish the rate of disease increase in each set of replicate plots. Of particular interest is whether tree survival and the morphology of cankers improve over the threeyear duration of the experiment and if the data differs significantly among the transgenic, cytoplasmic and virulent release plots. APHIS PERMIT West Virginia University, Dr. William MacDonald 18 b) Cultural analysis of bark samples. The collection and culture of bark samples from cankers on treated and nontreated trees will provide evidence of hypovirus establishment in the thallus of either canker type. Transgenic CHV1 Euro7 input strains are lightly pigmented due to the suppression of orange pigment production by the CHV1 Euro7 hypovirus. They also are hygromycin resistant ( HygR) due to the presence of the hygromycin resistance gene encoded on the transformation vector pXHE7 adjacent to the CHV1 Euro7 cDNA. Thus, highly pigmented isolates recovered from bark plugs are expected to behypovirus free. In contrast, white isolates are likely to be infected with CHV1 Euro7. These white CHV1 Euro7   containing isolates can be further distinguished by incubation on PDA amended with hygromycin ( 40 µ g/ ml). Resistance to hygromycin ( HygR) indicates the presence of the integrated pXHE7 vector and CHV1 Euro7cDNA. Thus, any ( HygR) isolates are either derived directly from input transgenic conidia or from transgenic ascospore progeny that result from spermizitation by input transgenic conidia. The latter will be of the same vegetative compatibility group as the input transgenic strains while the former will be of a different vegetative compatibility group due to allelic rearrangement at the vegetative compatibility loci following mating. White isolates that acquire CHV1 Euro7 hypovirus by anastomosis from transgenic input strains or germinated transgenic ascospore progeny will be sensitivity to hygromycin ( HygS). c) Analysis of inoculum production. Evaluation of conidia and ascospore inoculum production will be possible each fall by determining the phenotype of the single spore colonies that arise from spores collected from pycnidia and perithecia obtained from bark disks ( see section b above). Comparisons of inoculum generated by treated cankers to that produced on nontreated trap trees is of paramount interest, as these data can be used to provide a measure of treatment efficacy and to ascertain whether tree to tree spread has contributed to the production of hypovirulent inoculum. APHIS PERMIT West Virginia University, Dr. William MacDonald 19 ENCLOSURE 13f. DETAILED DESCRIPTION OF PROCESSES, PROCEDURES AND SAFEGUARDS Manipulation of fungal isolates in the laboratory will be conducted in a Labconco Class II biosafety cabinet. Transgenic isolates will be grown in temperature controlled growth chamber, secured from the general public. Slurry inoculum for field deployment will be prepared in the laboratory using " good microbiological practices". Our Institutional Biosafety Committee has approved all practices described in this proposal.

All fungi will be transported from West Virginia University to the field test sites in an automobile under the supervision of West Virginia University personnel who are directly responsible for supervising the field trial. Fungi will be transported in containers that meet the requirements of § 340.7 ( container requirements for movement of regulated articles).

Bark samples from cankers will be collected in plastic microtiter or tissue culture plates ( 13 x 8.5 cm), secured with tape to prevent mixing or escape, and transported in a cooler to the laboratory at West Virginia University. Bark samples will be stored in a low temperature freezer until processed. Isolates will be maintained in incubators and temperature controlled growth chambers, secured from the general public. Following cultural assessment and molecular analyses, all fungal cultures will be autoclaved prior to disposal.

In preparation for APHIS permit # 94 189 02M, issued in 1994, a full length copy of CHV1 EP713 dsRNA was integrated into a virulent strain of Cryphonectria parasitica. The CHV1 EP713 transgenic isolate was inoculated into the following woody plants in a greenhouse pursuant to of the 1994 permit: sweet birch, white pine, American chestnut, red maple, sugar maple, black walnut, blueberry, American beech, white oak, red oak and pin oak. Isolates recovered from inoculated tissues retained the hypovirulence phenotype and integrated transformation plasmid DNA. A virulent strain used as a control was pathogenic on American chestnut and slightly pathogenic on red maple. Findings from this greenhouse study revealed no indication of altered host range for the transgenic strain. CHV1 EP713 and CHV1 Euro7, the hypovirus proposed for the 2004 release, show extensive sequence identities: 87 to 93% and 90 to 98% at the nucleotide and amino acid levels, respectively. APHIS PERMIT West Virginia University, Dr. William MacDonald 20 ENCLOSURE 13g. DETAILED DESCRIPTION OF INTENDED DESTINATION The intended destination of the genetically engineered ( transgenic) organisms is the field test site, located in Pendleton County, WV, described in Figures 5 and 6. This experiment is unique in that the focus is hypovirus dissemination, not containment. To achieve biological control of the invasive pathogen ( Cryphonectria parasitica), the hypovirus must be disseminated effectively. In most stands that have moderate numbers of Castanea dentata, the fungal pathogen reaches log phase 5 7 years following release ( logging, storm damage, etc). The virulent population of C. parasitica is both formidable and diverse ( in terms of vegetative compatibility types). Therefore, hypovirus dissemination also must be aggressive; otherwise, biological control will not be effected. It is the intent of this experiment to follow hypovirus dissemination through the assessment of cultural morphology, and dsRNA content of fungal isolates made over the course of three years. It is possible that the diversity of the native, virusfree pathogen will prohibit any extensive acquisition of hypovirus. The end result will be dead trees. Conversely, successful dissemination and acquisition of hypovirus may allow the chestnut trees to survive. In this instance, living trees will remain. This, in turn, will allow the hypovirus to perpetuate and become established in this WV field site. Given either success or failure of the experiment, removal of the entire stand of chestnut at this field site is not practical. APHIS PERMIT West Virginia University, Dr. William MacDonald 21 ENCLOSURE 13h. DETAILED DESCRIPTION OF PROPOSED PROCEDURES AND SAFEGUARDS At West Virginia University: Genetically engineered ( transgenic) strains will be incubated or stored in incubators or temperature controlled growth chambers secured from the general public. All Petri plates will be autoclaved prior to disposal. The university building and laboratories are locked after normal work hours and on weekends; university buildings are staffed by night custodians and patrolled periodically by the WVU Campus Police.

At the field site in the Monongahela National Forest: The goal of this experiment is to evaluate hypovirus dissemination with the intended purpose of achieving biological control of Cryphonectria parasitica, an invasive pest. To be an effective control, hypovirus dissemination and establishment are desired. The field test site is located in a sparsely populated area of Pendleton County, WV in the Monongahela National Forest. The field plots are located beyond a locked US Forest Service gate and not visible from USFS access road # 48.

While C. parasitica is capable of infecting other tree species ( particularly members of the genus, Castanea), the only other potential host ( Castanea pumila) is not detectable in the mixed hardwood forest of eastern WV. A survey of the proposed area did not identify C. pumila, thus spread of the hypovirus should accompany C. parasitica to only C. dentata. Since the fungal pathogen is limited to C. dentata, the accompanying hypovirus should, likewise, be limited to strains of C. parasitica infecting C. dentata.

In 1996, Anagnostakis conducted a pathogenicty study in the laboratory using woody stems of many eastern U. S. plants, comparing the lesion size of a virulent and hypovirulent isolate of C. parasitica ( data unpublished). The results of that study are listed in Table 7. Results indicate that the hypovirulent C. parasitica isolate is non pathogenic on all woody stems used in the test. APHIS PERMIT West Virginia University, Dr. William MacDonald 22 Table 7. Lesion length ( mm) following 49 day inoculation of Cryphonectria parasitica virulent strain Ep155 and hypovirulent strain CN2 ( CHV1 Ep713/ pXH9) into various woody stems. Plant Lesion Length ( mm)* of Virulent Ep155* Lesion Length ( mm)* of Hypovirulent CN2** Blueberry 0, 0 0, 0, 0, 0 Apple 3, 3 1, 1, 3, 3 Red Maple 28, 14 4, 3, 6, 11 Sugar Maple 2, 8 6, 1, 2, 1 Sweet Birch 9, 1 8, 1, 4, 3 American Beech 6 1, 1, 1 American Chestnut 59, 34 4, 1, 3, 4 Pin Oak 6, 1 1, 1, 3, 1 White Oak 1 3, 3, 1 Red Oak 6, 9 3, 3, 6, 4 Black Walnut 6, 9 3, 3, 3, 3 White Pine 3, 3 3, 1, 1, 0 * Lesion length includes only visible growth beyond the 4 mm diamater inoculation hole. * Two lesions were made to each woody stem with the virulent isolate. ** Four lesions were made to each woody stem with the hypovirulent isolate. ENCLOSURE 13i. DETAILED DESCRIPTION OF PROPOSED METHOD OF FINAL DISPOSITION All fungal material will be autoclaved prior to disposal. APHIS PERMIT West Virginia University, Dr. William MacDonald 24 REFERENCES Anagnostakis, S. L. 1982a. Biological control of chestnut blight. Science 215: 466 471.

Anagnostakis, S. L. 1982b. Genetic analysis of Endothia parasitica: Linkage data for four single genes and three vegetative compatibility types. Genetics 102: 25 28.

Anagnostakis, S. L. 1988. Improved chestnut tree condition maintained in two Connecticut plots after treatment with hypovirulent strains of the chestnut blight fungus. For. Sci. 36: 113 124.

Anagnostakis, S. L. 1990. Cryphonectria parasitica, cause of chestnut blight, pp. 123 136, In G. S. Sidhu ( ed.), Advances in Plant Pathology. Academic Press, London.

Anagnostaki, S. L., Chen, B., Geletka, L. M. and Nuss, D. L. 1998. Hypovirus transmission to ascospore progeny by field released transgenic hypovirulent strains of Cryphonectria parasitica. Phytopathology 88: 598 604.

Anagnostakis, S. L., Hau, B. and Kranz, J. 1986. Diversity of vegetative compatibility groups of Cryphonectria parasitica in Connecticut and Europe. Plant Disease 70: 536 538.

Anagnostakis, S. L and Jaynes, R. A. 1973. Chestnut blight control: use of hypovirulent cultures. Plant Dis. Rep. 57: 225 226.

Adua, M. 1998a. The sweet chestnut throughout history from the miocene to the third millennium, pp. 29 36, In: G. Salesses ( convener), Proceedings of the Second International Symposium on Chestnut. Bordeaux, France.

Adua, M. 1998b. Sweet chestnut production and marketing in Italy, pp. 49 54, In G. Salesses ( convener), Proceedings of the Second International Symposium on Chestnut. Bordeaux, France.

Bounous, Giancarlo. 1999. Among the chestnut trees in Cuneo Province. Associazione Il Tempo della Castagne, Edizioni Metfore, Cuneo, Italy.

Celiker, N. M. and Onogur, E. 2001. Evaluation of hypovirulent isolates of Cryphonectria parasitica for the biological control of chestnut blight in Turkey. For. Snow Landsc. Res. 76: 378   382.

Chen, B., Choi, G. H. and Nuss, D. L. 1993. Mitotic stability and nuclear inheritance of integrated viral cDNA in engineered hypovirulent strains of the chestnut blight fungus. EMBO J. 12: 2991 2998.

Chen, B., Choi, G. H., and Nuss, D. L. 1994. Attenuation of fungal virulence by synthetic infectious hypovirus transcripts. Science 264: 1762 1764.

Chen, B., Craven, M. G., Choi, G. B. and Nuss, D. L. 1994. cDNA derived hypovirus RNA in transformed chestnut blight fungus in spliced and trimmed of vector nucleotides. Virology 202: 441 448. APHIS PERMIT West Virginia University, Dr. William MacDonald 25 Chen, B., and D. L. Nuss. 1999. Infectious cDNA clone of hypovirus CHV1 Euro7: a comparative virology approach to investigate virus mediated hypovirulence of the chestnut blight fungus Cryphonectria parasitica. J. Virol. 73: 985 992.

Choi. G. H. and Nuss, D. L. 1992a. A viral gene confers hypovirulence associated traits to the chestnut blight fungus. EMBO J. 11: 473 477.

Choi. G. H. and Nuss, D. L. 1992b. Hypovirulence of chestnut blight fungus conferred by an infectious viral cDNA. Science 257: 800 803.

Choi, G. H., Shipara, R. and Nuss, D. L. 1991. Cotranslational autoproteolysis involved in gene expression from a double stranded RNA genetic element associated with hypovirulence of the chestnut blight fungus. Proc. Natl. Acad. Sci. USA, 88: 1167 1171.

Cortesi, P. and Milgroom, M. G. 1998. Genetics of vegetative incompatibility in Cryphonectria parasitica. Applied and Env. Micro. 64: 2988 2994.

Fulbright, D. W., Paul, C. P., and Garrod, S. W. 1988. Hypovirulence: A natural control of chestnut blight, pp. 122 139, In K. G. Mukerji and K. L. Garg ( eds.), Biocontrol of Plant Diseases, CRC Press, Boca Raton, FL.

Garrod, S. W., Fulbright, D. W. and Ravenscroft, A. V. 1985. Dissemination of virulent and hypovirulent forms of a marked strain of Endothia parasitica in Michigan. Phytopathology 75: 533 538.

Grente, J. and Berthelay Sauret, S. 1978. Biological control of chestnut blight in France, pp. 30 34, In W. L. MacDonald, F. C. Cech, J. Luchok and C. Smith ( eds.,) Proceedings of the American Chestnut Symposium. West Virginia University, Morgantown.

Griffin, G. J. 1986. Chestnut blight and its control. Hort. Rev. 8: 291 335.

Hillman,, B. I., Fulbright, D. W., Nuss, D. L., and VanAlfen, N. K. 1995. Hypoviridae. Pages 261 264 in : Virus Taxonomy. F. A. Murphy, C. M. Fauquet, D. H. L. Bishop, S. A. Ghabrial, A. W. Jarvis, G. P. Martelli, M. A. Mayo and M. D. Summers, eds. Springer Verlag, New York.

Huber, D. H. 1996. Genetic analysis of vegetative incompatibility polymorphisms and horizontal transmission in the chestnut blight fungus, Cryphonectria parasitica. Ph. D. Diss., Michigan State University.

Juhásová, G. and Bernadovicová, S. 2001. Cryphonectria parasitica ( Murr.) Barr and Phytophthora spp. in chestnut ( Castanea sativa Mill.) in Slovakia. For. Snow Landsc. Res. 76: 373   377.

MacDonald, W. L. and Fulbright, D. W. 1991. Biological control of chestnut blight: Use and limitation of transmissible hypovirulence. Plant Disease 75: 656 661. APHIS PERMIT West Virginia University, Dr. William MacDonald 26 Robin, C. and Heiniger, U. 2001. Chestnut blight in Europe: Diversity of Cryphonectria parasitica, hypovirulence and biocontrol. For. Snow Landsc. Res. 76: 361 367.

Stipes, R. J. Appel, D. N. and Roane, M. K. 1978. Endothia species as pathogens of chestnut aned oak, pp. 42 49, In: W. L. MacDonald, F. C. Cech, J. Luchok and C. Smith ( eds.,) Proceedings of the American Chestnut Symposium. West Virginia University, Morgantown.

Turchetti, T. 1982. Hypovirulence in chestnut blight ( Endothia parasitica) and some practical aspects. European J. Forest Path. 12: 414 417.

Turchetti, T., and Maresi, G. 1998. Investigations on natural spread of chestnut blight hypovirulence in Italy and other European Countries, pp. 29 36, In G. Salesses ( convener), Proceedings of the Second International Symposium on Chestnut. Bordeaux, France.

Uscuplic, M. and Trestic, M. 1998. Chestnut blight in Bosnia Herzegovina and its control, pp. 489 494, In: G. Salesses ( convener), Proceedings of the Second International Symposium on Chestnut. Bordeaux, France.

VanAlfen, N. K., Jaynes, R. A., Anagnostakis, S. L. and Day. P. R. 1975. Chestnut blight: biological control by transmissible hypovirulence in Endothia parasitica. Science 189: 890 891.


[Federal Register Volume 83, Number 13 (Friday, January 19, 2018)]
[Notices]
[Pages 2873-2874]
[FR Doc No: 2018-00878]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2017-0108]

Hours of Service of Drivers of Commercial Motor Vehicles:
Proposed Regulatory Guidance Concerning the Use of a Commercial Motor
Vehicle for Personal Conveyance; Extension of Comment Period

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of proposed regulatory guidance; extension of comment
period.

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

SUMMARY: FMCSA extends the public comment period for the Agency's
December 19, 2017, notice announcing the proposed regulatory guidance
concerning the use of a commercial motor vehicle for personal
conveyance. On December 22, 2017, the American Trucking Associations,
Inc. (ATA) requested a 30-day extension of the comment period. The
Agency extends the January 18, 2018, deadline for the submission of
public comments to February 20, 2018.

DATES: FMCSA extends the comment period for the notice of proposed
regulatory guidance published on December 19, 2017. You must submit
comments by February 20, 2018.

ADDRESSES: You may insert comments identified by Federal Docket
Management System Number FMCSA-2017-0108 by any of the following
methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the online instructions for submitting comments.
     Mail: Docket Management Facility, U.S. Department of
Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor,
Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: West Building, Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE, Washington, DC, between 9 a.m.
and 5 p.m., Monday through Friday, except Federal holidays.
     Fax:<PHONE_NUMBER>.
    To avoid duplication, please use only one of these four methods.
See the ``Public Participation and Request for Comments'' portion of
the SUPPLEMENTARY INFORMATION section for instructions on submitting
comments.

FOR FURTHER INFORMATION CONTACT: Mr. Thomas Yager, Chief, Driver and
Carrier Operations Division, Federal Motor Carrier Safety
Administration, U.S. Department of Transportation, 1200 New Jersey
Avenue SE, Washington, DC 20590, phone<PHONE_NUMBER>, email
[email protected].

SUPPLEMENTARY INFORMATION:

I. Public Participation and Request for Comments

A. Submitting Comments

    If you submit a comment, please include the docket number listed
above, indicate the specific section of this document to which your
comment applies, and provide a reason for each suggestion or
recommendation. You may submit your comments and material online or by
fax, mail, or hand delivery. FMCSA recommends that you include your
name and a mailing address, an email address, or a phone number in the
body of your document so that FMCSA can contact you if there are
questions regarding your submission.
    To submit your comment online, go to http://www.regulations.gov,
put the docket number, FMCSA-2017-0108, in the keyword box, and click
``Search.'' When the new screen appears, click on the ``Comment Now!''
button and type your comment into the text box on the following screen.
Choose whether you are submitting your comment as an individual or on
behalf of a third party and then submit.
    If you submit your comments by mail or hand delivery, submit them
in an unbound format, no larger than 8\1/2\ by

11 inches, suitable for copying and electronic filing. If you submit
comments by mail and would like to know that they reached the facility,
please enclose a stamped, self-addressed postcard or envelope.
    FMCSA will consider all comments and material received during the
comment period and may change this guidance based on your comments.

B. Viewing Comments and Documents

    To view comments, go to http://www.regulations.gov. Insert the
docket number, FMCSA-2017-0108, in the keyword box, and click
``Search.'' Next, click the ``Open Docket Folder'' button and choose
the document to review. If you do not have access to the internet, you
may view the docket online by visiting the Docket Management Facility
in Room W12-140 on the ground floor of the DOT West Building, 1200 New
Jersey Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m.,
e.t., Monday through Friday, except Federal holidays.

C. Privacy Act

    In accordance with 5 U.S.C. 553(c), DOT solicits comments from the
public to better inform its regulatory process. DOT posts these
comments, without edit, including any personal information the
commenter provides, to www.regulations.gov, as described in the system
of records notice (DOT/ALL-14 FDMS), which can be reviewed at
www.transportation.gov/privacy.

II. Background

    On December 19, 2017 (82 FR 60269), FMCSA published a notice of
proposed regulatory guidance concerning the use of a commercial motor
vehicle (CMV) for personal conveyance. This provision is available to
all CMV drivers required to record their hours of service (HOS) who are
permitted by their employer to use the vehicle for personal use. The
proposed regulatory guidance would revise Question 26 to 49 CFR 395.8.
    The existing guidance on personal conveyance (49 CFR 395.8,
Question 26) was issued by the Federal Highway Administration (FHWA),
FMCSA's predecessor agency, in a memorandum dated November 18, 1996,
and later published in a compilation of guidance (62 FR 16370, 16426,
April 4, 1997). The guidance reiterated the basic principle that a
driver in off-duty status must be relieved from work and all
responsibility for performing work. It highlighted the use of the CMV
as a personal conveyance in traveling to and from the place of
employment (e.g., the normal work reporting location). The 1997
guidance included discussion of CMVs used to travel ``short distances''
from a driver's en route lodgings to restaurants in the vicinity of
such lodgings. In addition, the 1997 guidance explicitly excluded the
use of laden vehicles as personal conveyance and the operation of the
CMV as personal conveyance by drivers who have been placed out of
service for HOS violations. The guidance has remained unchanged since
1997.
    In the December 19, 2017, proposed revision to the guidance, the
Agency focused on the reason the driver is operating a CMV while off
duty, without regard to whether the CMV is or is not laden. The
previous guidance, which required the CMV to be unladen, was written
for combination vehicles, where the driver could readily detach the
trailer and use the unladen tractor for personal conveyance. This
interpretation had the inadvertent effect of not allowing drivers of
single-unit work trucks that carry loads, as well as tools of trade and
related materials, on the power unit to document this off-duty time on
the RODS. In the absence of a trailer, these loads, tools, and other
equipment cannot reasonably be offloaded, left unattended, and reloaded
after the power unit has been used for personal conveyance. This
proposed revision to the guidance eliminates the requirement that the
CMV be unladen and thus the disparate impact created by the previous
guidance.

Request for Extension of the Comment Period

    On December 22, 2017, the American Trucking Associations, Inc.
(ATA), asked that the Agency provide a 30-day extension of the comment
period. ATA expressed concern that end-of-year tasks and holiday
periods might make it difficult for many interested parties to prepare
comments by the original January 19, deadline. A copy of the ATA
request is in the docket identified at the beginning of this notice.
    FMCSA acknowledges ATA's concerns. After reviewing the request,
FMCSA hereby grants a 30-day extension of the comment period to
February 20, 2018, to provide all interested parties additional time to
respond to the notice of proposed regulatory guidance.

    Issued on: January 12, 2018.
Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2018-00878 Filed 1-18-18; 8:45 am]
 BILLING CODE 4910-EX-P