1968 Federal Register / Vol. 61, No. 16 / Wednesday, January 24, 1996 / Notices

Applicants maintain that the

Commission’s intent in adopting

paragraph (c)(4) of Rule 6e–3(T) was to

tailor the general terms of section

2(a)(35) to flexible premium viable life

insurance policies in order, among other

things, to facilitate verification by the

Commission of compliance with the

sales load limits set forth in subparagraph (b)(13)(i). According to their

analysis, paragraph (c)(4) does not

depart, in principal, from section

2(A)(35).

11. Section 2(a)(35) excludes

deductions from purchase payments for

‘‘issue taxes’’ from the definition of

sales load under the 1940 Act.

Applicants suggest that this indicates

that it is consistent with the protection

of investors and the purposes intended

by the policies and provisions of the

1940 Act to exclude charges for

expenses attributable to federal taxes

from sales load. Applicants argue that,

by extension, it is equally consistent to

exclude such charges, including the tax

burden charge described above, from the

Rule 6e–3(T)(c)(4) definition of sales

load.

12. Applicants argue that the section

2(a)(35) reference to administrative

expenses or fees that are ‘‘not properly

chargeable to sales or promotional

activities’’ (quoted and emphasized

above) suggest that only charges or

deductions intended to fall within the

definition of sales load are those that are

properly chargeable to such activities.

Because the proposed tax burden charge

will be used to pay costs attributable to

the Company’s federal tax liabilities,

which are not properly chargeable to

sales or promotional activities,

Applicants assert that language is

another indication that not treating such

deductions as sales load is consistent

with the purposes intended by the

policies and provisions of the 1940 Act.

13. Applicants note that the Rule 6e–

3(T)(c)(4)(v) limitations of the premium

tax exclusion from the definition of

‘‘sales load’’ to state premium taxes is

probably a historical accident, related to

the fact that, when Rule 6e–3(T) was

initially adopted in 1984 and when it

was amended in 1987, the additional

section 848 tax burden attributable to

the receipt of premiums did not exist.

14. Applicants represent that, for the

reasons summarized above, deducting a

charge from variable life insurance

policy premium payments for an

insurer’s tax burdens attributable to its

receipt of such payments, and excluding

the charge from sales load, is

appropriate in the public interest and

consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the 1940 Act. This is because such a

charge is, Applicants represent, for a

legitimate expense of the insurer and is

not designed to cover sales and

distribution expenses. Applicants assert

that, in adopting Rule 6e–3(T), the

Commission considered similar

deductions for tax burdens in respect of

premium taxes and permitted

deductions for such taxes to be made

and to be treated as other than sales

load. Applicants assert that the

propriety of a charge for an insurer’s tax

burden attributable to premium

payments received is the same whether

such burden arises under state or federal

law.

Request for ‘‘Class Relief’’

15. Applicants also request

exemptions for any Future Account that

the Company may establish to support

flexible premium variable life insurance

contracts as defined in Rule 6e–

3(T)(c)(1). Applicants believe that the

terms of any exemption sought for

Future Accounts to permit the

deduction of a tax burden charge would

be substantially identical to those they

describe in the application. Applicants

assert that any additional requests for

exemptive relief for such Future

Accounts would present no issues

under the 1940 Act that have not

already been addressed in the

application. Nevertheless, the Company

would have to obtain exemptions for

each Future Account it establishes

unless class relief is granted in response

to the application.

16. The requested exemptions are

appropriate in the public interest

because they would promote

competitiveness in the variable life

insurance market by eliminating the

need for the Company to file redundant

exemptive application, thereby reducing

its administrative expenses and

maximizing the efficient use of its

resources. The delay and expense

involved in having repeatedly to seek

the same exemptions would impair the

Company’s ability to effectively take

advantage of business opportunities as

they arise. Likewise, the requested

exemptions are consistent with the

protection of investors and the purposes

intended by the policy and provisions of

the 1940 Act for the same reasons.

Investors would receive no benefit or

additional protection if the Company

were required repeatedly to seek

Commission orders with respect to the

same issues addressed in the

application. Indeed, they might be

disadvantaged as a result of the

Company’s increased expenses.

Applicants’ Conditions

1. The Company will monitor the

reasonableness of the 1.25 percent

charge.

2. The registration statement for the

existing Contracts and any future

Contracts under which the 1.25 percent

charge is deducted will include:

(a) Disclosure of the charge;

(b) Disclosure explaining the purpose

of the charge; and

(c) A statement that the charge is

reasonable in relation to the Company’s

increased tax burden as a result of

Section 848 of the Code.

3. The Company also will include as

an exhibit to the registration statement

for the existing Contracts and any future

Contracts under which the 1.25 percent

charge is deducted an actuarial opinion

as to:

(a) The reasonableness of the charge

in relation to the Company’s increased

tax burden as a result of section 848 of

the Code;

(b) The reasonableness of the after tax

rate of return used in calculating the

charge; and

(c) The appropriateness of the factors

taken into account by the Company in

determining the after tax rate of return.

Conclusion

For the reasons summarized above,

Applicants represent that the

exemptions requested are necessary and

appropriate in the public interest and

consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the 1940 Act.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–1037 Filed 1–23–96; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 35–26453]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

January 17, 1996.

Notice is hereby given that the

following filing(s) has/have been made

with the Commission pursuant to

provisions of the Act and rules

promulgated thereunder. All interested

persons are referred to the application(s)

and/or declaration(s) for complete

statements of the proposed

transaction(s) summarized below. The

application(s) and/or declaration(s) and

any amendments thereto is/are available

for public inspection through the
Federal Register / Vol. 61, No. 16 / Wednesday, January 24, 1996 / Notices 1969

1Columbia Gas of Pennsylvania, Inc. (‘‘Columbia

Pennsylvania), 200 Civic Center Drive, Columbus,

Ohio 43215; Columbia Gas of Ohio, Inc. (‘‘Columbia

Ohio’’), 200 Civic Center Drive, Columbus, Ohio

43215; Columbia Gas of Maryland, Inc. (‘‘Columbia

Maryland, Inc. ‘‘Columbia Maryland’’), 200 Civic

Center Drive, Columbus, Ohio 43215; Columbia Gas

of Kentucky, Inc. (‘‘Columbia Kentucky’’), 200 Civic

Center Drive, Columbus, Ohio 43215;

Commonwealth Gas Services, Inc.

(‘‘Commonwealth Services’’), 200 Civic Center

Drive, Columbus, Ohio 43215; Columbia Gulf

Transmission Co. (‘‘Columbia Gulf’’), 1700

MacCorkle Avenue, SE., Charleston, West Virginia

25314; Columbia Gas Development Corp.

(‘‘Columbia Development’’), One Riverway,

Houston, Texas 77056; Columbia Natural

Resources, Inc. (‘‘Columbia Resources’’), 900

Pennsylvania Avenue, Charleston, West Virginia

25302; Columbia Coal Gasification Corp.

(‘‘Columbia Coal’’), 900 Pennsylvania Avenue,

Charleston, West Virginia 25302; Columbia Energy

Services Corp. (‘‘Columbia Services’’), 2581

Washington Road, Upper Saint Clair, Pennsylvania

15241; Columbia Gas System Service Corp.

(‘‘Service Corporation’’), 20 Montchanin Road,

Wilmington, Delaware 19807; Columbia Propane

Corp. (‘‘Columbia Propane’’), 800 Moorehead Park

Drive, Richmond, Virginia 23236; Commonwealth

Propane, Inc. (‘‘Commonwealth Propane’’), 800

Moorefield Park Drive, Richmond, Virginia 23236;

Tristar Ventures Corp. (‘‘TriStar Ventures’’), 20

Montchanin Road, Wilmington, Delaware 19807;

Tristar Capital Corp. (‘‘TriStar Capital’’), 20

Montchanin Road, Wilmington, Delaware 19807;

Columbia Atlantic Trading Corp. (‘‘Columbia

Atlantic’’), 20 Montchanin Road, Wilmington,

Delaware 19807; Columbia LNG Corp. (‘‘Columbia

LNG’’), 20 Montchanin Road, Wilmington,

Delaware 19807; Columbia Gas Transmission Corp.

(‘‘Gas Transmission’’), 1700 MacCorkle Avenue, SE,

Charleston, West Virginia, 25314; and Columbia

Energy Marketing Corp. (‘‘Energy Marketing), 2581

Washington Road, Pittsburgh, Pennsylvania, 15241.

2TriStar Pedrick Limited Corporation, TriStar

Pedrick General Corporation, TriStar Binghamton

Limited Corporation, TriStar Binghamton General

Corporation, TriStar Vineland Limited Corporation,

TriStar Vineland General Corporation, TriStar

Rumford Limited Corporation, TriStar Georgetown

General Corporation, TriStar Georgetown Limited

Corporation, TriStar Fuel Cells Corporation, TVC

Nine Corporation, and TVC Ten Corporation, all of

20 Montchanin Road, Wilmington, Delaware 19807.

3Columbia Pennsylvania, Columbia Ohio,

Columbia Maryland, Columbia Kentucky,

Commonwealth Services, Columbia Gulf, Columbia

Development, Columbia Resources, Columbia Coal,

Service Corporation, Columbia Propane,

Commonwealth Propane, TriStar Capital, and

Columbia Atlantic.

4Columbia, Columbia Maryland, and thirty other

subsidiary companies of Columbia have pending

before the Commission a post-effective amendment

that seeks authorization for the sale of securities by

Columbia Maryland to Columbia, the proceeds of

which will be used to refund other securities

previously sold by Columbia Maryland to Columbia

and to meet the capital needs of Columbia

Maryland in 1996. The Commission issued a notice

of the filing of the post-effective amendment on

November 17, 1995 (HCAR No. 26411).

Commission’s Office of Public

Reference.

Interested persons wishing to

comment or request a hearing on the

application(s) and/or declaration(s)

should submit their views in writing by

February 8, 1996, to the Secretary,

Securities and Exchange Commission,

Washington, DC 20549, and serve a

copy on the relevant applicant(s) and/or

declarant(s) at the address(es) specified

below. Proof of service (by affidavit or,

in case of an attorney at law, by

certificate) should be filed with the

request. Any request for hearing shall

identify specifically the issues of fact or

law that are disputed. A person who so

requests will be notified of any hearing,

if ordered, and will receive a copy of

any notice or order issued in the matter.

After said date, the application(s) and/

or declaration(s), as filed or as amended,

may be granted and/or permitted to

become effective.

Columbia Gas System, Inc. et al. (70–

8471)

Columbia Gas System, Inc.

(‘‘Columbia’’), 20 Montchanin Road,

Wilmington, Delaware, 19807, a

registered holding company, nineteen

wholly-owned subsidiary companies of

Columbia,1 all of which are engaged in

the natural gas business, and twelve

subsidiary companies of TriStar

Ventures Subsidiaries’’),2 have filed a

post-effective amendment to the

application-declaration previously filed

under sections 6, 7, 9(a), 10, 12(b), 12(c),

and 12(f) of the Act and Rules 42, 43,

45, and 46 thereunder.

By order dated December 22, 1994

(HCAR No. 26201), (‘‘Order’’),

Columbia, and fourteen of the

subsidiary companies (‘‘Subsidiaries’’),3

were authorized to recapitalize

Columbia Gulf, Columbia Development,

and Columbia Coal, to implement the

1995 and 1996 Long-Term and ShortTerm Financing Programs of the

Subsidiaries, and to continue the

Intrasystem Money Pool (‘‘Money Pool’’)

through 1996.

By order dated March 14, 1995 (HCAR

No. 26251), the TriStar Ventures

Subsidiaries were authorized to invest

in, but not to borrow from, the Money

Pool. By order dated November 8, 1995

(HCAR No. 26404), Gas Transmission

and Energy Marketing were authorized

to invest in, but not to borrow from, the

Money Pool.4

Columbia now proposes that the cost

of money on all short-term advances

from, and the investment rate for money

invested in, the Money Pool will be the

interest rate per annum (i) equal to the

composite weighted average rate on

short-term borrowings by Columbia

deposited in the Money Pool and/or the

weighted average short-term investment

rate of the Money Pool, or (ii) should

there be no Columbia short-term

borrowings deposited in the Money Pool

and no Money Pool investments, the

interest rate will be the average Federal

Funds rate published in the Federal

Reserve Statistical Release, Publication

H.15(519). A default rate equal to 2%

per annum above the pre-default rate on

unpaid principal or interest amounts

will be assessed if interest or principal

payment becomes past due.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–1038 Filed 1–23–96; 8:45 am]

BILLING CODE 8010–01–M

[Investment Company Act Release No.

21688; 811–8446]

Van Kampen Merritt California Quality

Municipal Trust II; Notice of

Application

January 18, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of Application for

Deregistration under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANT: Van Kampen Merritt

California Quality Municipal Trust II.

RELEVANT ACT SECTION: Section 8 (f).

SUMMARY OF APPLICATION: Applicant

requests an order declaring that it has

ceased to be an investment company.

FILING DATE: The application was filed

on December 27, 1995.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s

Secretary and serving applicant with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

February 12, 1996, and should be

accompanied by proof of service on the

applicant, in the form of an affidavit or,

for lawyers, a certificate of service.

Hearing requests should state the nature

of the writer’s interest, the reason for the

request, and the issues contested.

Persons may request notification of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, NW., Washington, DC. 20549.

Applicant, One Parkview Plaza,

Oakbrook Terrace, Illinois 60181.

FOR FURTHER INFORMATION CONTACT:

Diane L. Titus, Paralegal Specialist, at

(202) 942–0584, or H.R. Hallock, Jr.,

Special Counsel, at (202) 942–0564

(Division of Investment Management,

Office of Investment Company

Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the