Federal Register / Vol. 61, No. 20 / Tuesday, January 30, 1996 / Notices 3069

the non-interested members of the

boards of trustees at in-person meetings

and the Funds’ shareholders of the New

Sub-Advisory Agreements or, in the

absence of such approval, returned to

such Fund.

3. The Funds will hold in-person

trustees’ meetings in January, 1996 to

confirm their December approval of the

New Sub-Advisory Agreements. In

addition, shareholder meetings will be

held in March, 1996 to vote on the

approval of the New Sub-Advisory

Agreements, and such approvals will be

obtained on or before the 120th day

following the termination of the Former

Sub-Advisory Contracts.

4. Govett Holdings will bear the costs

of preparing and filing this request for

exemptive relief and the costs related to

the solicitation of shareholder approval

of the Funds’ shareholders necessitated

by consummation of the Sales

Agreement.

5. The Adviser will take all

appropriate steps to ensure that the

scope and quality of sub-advisory

services provided to the Funds by

Govett during the Interim Period will be

at least equivalent, in the judgment of

the respective boards of trustees, to the

scope and quality of services previously

provided by Govett. If there is a material

change in the personnel providing

material services to the Funds during

the Interim Period, Govett and the

Adviser will notify the respective

Boards of Trustees of the affected Funds

to ensure that they, including a majority

of the non-interested trustees, are

satisfied that the services provided will

not be materially diminished in scope

and quality.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–1673 Filed 1–29–96; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–21698; 812–9912]

Walnut Properties Limited Partnership,

et al.; Notice of Application

January 23, 1996.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for an

order under the Investment Company

Act of 1940 (the ‘‘Act’’).

APPLICANTS: Walnut Properties Limited

Partnership (the ‘‘Partnership’’), and

John J. Hansman (‘‘Hansman’’) and

Summit Investment Services, Inc.

(‘‘Summit’’) (collectively, the ‘‘General

Partners’’).

RELEVANT ACT SECTIONS: Order requested

under section 6(c) for an exemption

from all provisions of the Act.

SUMMARY OF APPLICATION: Applicants

request an order to permit the

Partnership to invest in limited

partnerships that engage in the

ownership and operation of apartment

complexes for low and moderate income

persons.

FILING DATE: The application was filed

on December 15, 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 applicants 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 20, 1996, and should be

accompanied by proof of service on

applicants, in the form of an affidavit or,

for lawyers, a certificate of service.

Hearing requests should state the nature

of the writer’s interest, the reason for the

request, and the issues contested.

Persons may request notification of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street NW., Washington, D.C. 20549.

Applicants, 600 Stewart Street, Suite

1704, Seattle, Washington 98101.

FOR FURTHER INFORMATION CONTACT:

Marianne H. Khawly, Staff Attorney, at

(202) 942–0654, or Robert A. Robertson,

Branch Chief, at (202) 942–0564

(Division of Investment Management,

Office of Investment Company

Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the SEC’s

Public Reference Branch.

Applicants’ Representations

1. The Partnership was formed as a

Washington limited partnership on

August 11, 1995. The Partnership will

operate as a ‘‘two-tier’’ partnership, i.e.,

the Partnership, as a limited partner,

will invest in other limited partnerships

(the ‘‘Property Partnerships’’). The

Property Partnerships will be managed

by general partners (the ‘‘Developer

General Partners’’) that are not affiliated

with the Partnership or the General

Partners. The Property Partnerships, in

turn, will engage in the ownership and

operation of apartment complexes

(‘‘Properties’’) expected to qualify for

low income housing tax credits

(‘‘Credits’’) under the Internal Revenue

Code of 1986 (the ‘‘Code’’).

2. The objectives of the Partnership

are to: (a) provide tax benefits, including

Credits and passive activity losses,

which investors may use to offset their

Federal income tax liabilities; (b)

distribute proceeds from liquidation,

sale, or refinancing transactions; and (c)

to the extent permitted by the terms of

applicable local, state, and/or federal

government assistance, distribute cash

from operating the Properties.

3. Units of limited partnership

interest in the Partnership (the ‘‘Units’’)

will be offered and sold without

registration under the Securities Act of

1933 (the ‘‘Securities Act’’) in reliance

on section 4(2) of the Securities Act and

Regulation D thereunder. No Units will

be sold unless subscriptions to purchase

at least six Units (the ‘‘Minimum

Offering’’) are received and accepted by

the General Partners prior to September

30, 1996. If the Minimum Offering has

not been sold by such date, no Units

will be sold and all funds received from

subscribers will be refunded with

interest.

4. Until the Minimum Offering has

been sold, offering proceeds will be

deposited and held in trust for the

benefit of purchasers in an escrow

account with Seattle-First National Bank

in Seattle, Washington, to be used only

for the specific purposes set forth in the

Confidential Private Placement

Memorandum dated November 21, 1995

(the ‘‘Memorandum’’). The Partnership

intends to apply offering proceeds to the

acquisition of limited partnership

interests in the Property Partnerships as

promptly as possible (although such

proceeds may be invested temporarily

in bank time deposits, certificates of

deposit, money market accounts, and

government certificates). The

Partnership will not trade or speculate

in temporary investment.

5. The Partnership will require that

each purchaser of Units represent in

writing that such purchase meets the

applicable suitability standards. Each

individual subscriber must represent

that he or she has: (a) a net worth

(exclusive of home, home furnishings,

and automobiles) of at least $200,000

per Unit; or (b) a net worth (exclusive

of home, home furnishings and

automobiles) of not less than $125,000

per Unit and annual income of at least

$100,000 ($75,000 in the case of a

purchase of one-half of a Unit). Units

will be sold in certain states only to

persons who meet different standards,

as set forth in the Memorandum. The

Partnership will also allow certain

corporate subscribers to purchase Units.
3070 Federal Register / Vol. 61, No. 20 / Tuesday, January 30, 1996 / Notices

1 Investment Company Act Release No. 8456

(Aug. 9, 1974).

6. Although the Partnership will not

have responsibility for the day-to-day

management of the Properties, the

Partnership’s ownership of limited

partnership interests in the Property

Partnerships will, in an economic sense,

be tantamount to direct ownership of

each Property. Typically, the

Partnership will acquire at least a 98%

interest in the profits, losses, Credits,

and cash flow of each Property

Partnership. In addition, the General

Partners anticipate that the Partnership

will receive approximately 49.99% of

any gain and residual proceeds

generated by the Property Partnerships.

A small percentage interest in these

items will be allocated to Summit as the

special limited partner, and the

remaining interest in such items will be

allocated to the Developer General

Partner.

7. In some cases, however, the

Partnership and Summit may acquire

smaller aggregate percentage interests in

a particular Property Partnership. In

those cases where the Partnership

acquires less than a 98% interest in the

profits, losses, Credits, and cash flow of

a Property Partnership: (a) the

Partnership will own a minimum of

49.49% of such Property Partnership

items; and (b) the balance of the limited

partnership interest in such Property

Partnership, after the allocation of a

.01% interest to Summit, will be owned

by a single affiliated ‘‘upper-tier’’

limited partnership of which Hansman

and Summit will also be the general

partners. Moreover, the Partnership’s

investment in any Property Partnership

in which it owns less than 50% (but

more than 49.49%) of the profits, losses,

Credits, and cash flow will not

constitute more than 15% of its

aggregate investment in all Property

Partnerships.

8. The Partnership and Summit will

have rights under the terms of the

limited partnership agreements for the

Property Partnerships to consent to

certain fundamental decisions, which

will generally include: (a) the right to

approve or disapprove any sale or

refinancing of a Property; (b) the right to

replace the Developer General Partner

on the basis of the Developer General

Partner’s performance and discharge of

its obligations; (c) any borrowing of

money or encumbering of Property

Partnership assets; (d) any change in

identity of the Developer General

Partner; (e) any tax elections; and (f) any

admission of additional partners.

9. The Partnership will be managed

by the General Partners pursuant to a

partnership agreement (the ‘‘Partnership

Agreement’’). Holders of Units in the

Partnership (‘‘Investor Limited

Partners’’), consistent with their limited

liability status, will not be entitled to

participate in the control of the

Partnership’s business. However, a

majority-in-interest of the Investor

Limited Partners will have rights: (a) to

amend the Partnership Agreement

(subject to certain limitations; (b) to

remove any General Partner and elect a

replacement; (c) to dissolve the

Partnership; (d) to consent to the sale or

refinancing of a Property; and (e) to

designate a replacement for Summit as

the special limited partner of each

Property Partnership. In addition, under

the Partnership Agreement, each

Investor Limited Partner is entitled to

review all books and records of the

Partnership.

10. The Partnership Agreement and

Memorandum contain numerous

provisions designed to ensure fair

dealing by the General Partners with the

Investor Limited Partners. All fees and

compensation to be paid to the General

Partners and their affiliates are specified

in the Partnership Agreement and

Memorandum. While the fees and other

forms of compensation that will be paid

to the General Partners and their

affiliates will not have been negotiated

at arm’s length, applicants believe that

the compensation and fees are

reasonable and comparable to those that

would be charged by third parties for

the services provided by the General

Partners and their affiliates.

11. The Partnership Agreement also

contains various provisions designed to

significantly reduce conflicts of interest

between the Partnership and the

General Partners and their affiliates. For

example, in the event an investment in

a Property Partnership becomes

available which would satisfy the

investment criteria of the Partnership

and any other partnership in which the

General Partners and/or their affiliates

have an interest, the General Partners

will analyze each opportunity in

relation to the investment objectives of

each partnership and will consider such

factors as cash available for investment,

maximum investment limit per

acquisition, estimated income tax

effects, leverage policies, any regulatory

restrictions on investment policies, and

the length of time funds have been

available for investment. The General

Partners will then determine which

partnership should have the

opportunity to make the particular

investment and, if a particular

investment is suitable for more than one

partnership, the General Partners will

recommend such investment to the

partnership which has had the most

funds available for investment for the

longest period of time.

Applicants’ Legal Analysis

1. Applicants believe that the

Partnership is not an investment

company under sections 3(a)(1) or

3(a)(3) of the Act. If the Partnership is

deemed to be an investment company,

however, applicants request an

exemption under section 6(c) from all

provisions of the Act.

2. Section 3(a)(1) of the Act provides

that an issuer is an investment company

if it is, or holds itself out as being,

engaged primarily, or proposes to

engage primarily, in the business of

investing, reinvesting, or trading in

securities. Applicants believe that the

Partnership is not an investment

company under section 3(a)(1) because

the Partnership will be in the business

of investing in, and being beneficial

owner of, the Properties, not securities.

3. Section 3(a)(3) of the Act provides

that an issuer is an investment company

if it is engaged or proposes to engage in

the business of investing, reinvesting,

owning, holding, or trading in

securities, and owns or proposes to

acquire investment securities having a

value exceeding 40% of the value of

such issuer’s total assets (exclusive of

Government securities and cash items).

Applicants believe that the

Partnership’s interests in the Property

Partnerships should not be considered

investment securities because such

interests are not readily marketable,

have no value apart from the value of

the Properties owned by the Property

Partnerships, and cannot be sold

without severe adverse tax

consequences.

4. Applicants believe that the two-tier

structure is consistent with the purposes

and criteria set forth in the SEC’s release

concerning two-tier real estate

partnerships (the ‘‘Release’’).1 The

Release states that two-tier real estate

partnerships that invest in limited

partnerships engaged in the

development and operation of housing

for low and moderate income persons

may qualify for an exemption from the

Act under section 6(c). Section 6(c)

provides that the SEC may exempt any

person from any provision of the Act

and any rule thereunder if, and to the

extent that, such exemption is necessary

or appropriate in the public interest and

consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the Act.

5. The Release lists two requirements,

designed for the protection of investors,

which must be satisfied by two-tier

partnerships to qualify for an exemption
Federal Register / Vol. 61, No. 20 / Tuesday, January 30, 1996 / Notices 3071

under section 6(c). First, interests in the

issuer should be sold only to persons for

whom investments in limited profit,

essentially tax-shelter, investments

would not be unsuitable. Second,

requirements for fair dealing by the

general partner of the issuer with the

limited partners of the issuer should be

included in the basic organizational

documents of the company.

6. Applicants state, among other

considerations, that the suitability

standards set forth in the Memorandum,

the requirements for fair dealing

provided by the Partnership Agreement,

and pertinent governmental regulations

imposed on each Property Partnership

by various Federal, state, and local

agencies provide protection to

Unitholders comparable to that

provided by the Act. In addition,

applicants assert that the requested

exemption is both necessary and

appropriate in the public interest.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96–1639 Filed 1–29–96; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF TRANSPORTATION

Aviation Proceedings; Agreements

Filed During the Week Ending January

19, 1996

The following Agreements were filed

with the Department of Transportation

under the provisions of 49 U.S.C 412

and 414. Answers may be filed within

21 days of date of filing.

Docket Number: OST–96–1004.

Date filed: January 18, 1996.

Parties: Members of the International

Air Transport Association.

Subject: Application of IATA for

Renewal of DOT Approval of

Procedures Permitting Third Parties to

Participate as Technical Advisers in

Working Group Sessions of the Billing

and Settlement Plan.

Paulette V. Twine,

Chief Documentary Services Division.

[FR Doc. 96–1619 Filed 1–29–96; 8:45 am]

BILLING CODE 4910–62–P

Notice of Applications for Certificates

of Public Convenience and Necessity

and Foreign Air Carrier Permits Filed

Under Subpart Q During the Week

Ending January 19, 1996

The following Applications for

Certificates of Public Convenience and

Necessity and Foreign Air Carrier

Permits were filed under Subpart Q of

the Department of Transportation’s

Procedural Regulations (See 14 CFR

302.1701 et seq.). The due date for

Answers Conforming Applications or

Motions to modify Scope are set forth

below for each application. Following

the Answer period DOT may process the

application by expedited procedures.

Such procedures may consist of the

adoption of a show-cause order a

tentative order or in appropriate cases a

final order without further proceedings.

Docket Number: OST–96–1011.

Date filed: January 19, 1996.

Due Date for Answers Conforming

Applications or Motions to Modify

Scope: February 16, 1996.

Description: Application of Excalibur

Airways Limited pursuant to 49 U.S.C.

41301, applies for a foreign air carrier

permit to engage in the foreign charter

air transportation of persons property

and mail as follows:

—Between any point or points in the

United Kingdom and any point or

points in the United States either

directly or via intermediate or beyond

points in other countries with or

without stopovers;

—Between any point or points in the

United States and any point or points

not in the United Kingdom or the

United States; and

—Any other charter flights authorized

pursuant to Part 212 of the

Department’s regulations.

Paulette V. Twine,

Chief, Documentary Services Division.

[FR Doc. 96–1620 Filed 1–29–96; 8:45 am]

BILLING CODE 4910–62–M

Operations by Canadian and Mexican

Specialty Air Service Operators

AGENCY: Office of the Secretary,

Department of Transportation.

ACTION: Order to Show Cause, Docket

OST–96–1021, Order 96–1–28.

SUMMARY: The Department is inviting

comments on its tentative decision to

grant Canadian and Mexican ‘‘specialty

air service’’ operators a blanket foreign

aircraft permit under 14 CFR Part 375 to

conduct such operations in the United

States, to the extent the operations

covered under the North American Free

Trade Agreement (NAFTA). The specific

specialty air services involved are: aerial

mapping, aerial surveying, aerial

photography, forest fire management,

fire fighting, aerial advertising, glider

towing, parachute jumping, aerial

construction, heli-logging, aerial

sightseeing, flight training, aerial

inspection and surveillance, and aerial

spraying services. NAFTA provides for

the operation of these services on a

phase-in basis, with coverage for some

services already effective, and coverage

for others becoming effective at various

times through January 1, 2000. The

blanket foreign aircraft permit the

Department proposes would remove the

present requirement that operators

obtain prior Department approval, on a

contract-by-contract basis, before

conducting those specialty air services

that are provided for and for which

coverage has become effective under

NAFTA. The authority would be subject

to each operator’s compliance with

applicable regulations and procedures

of the Federal Aviation Administration,

and would be effective until further

order of the Department.

DATES: Objections to the issuance of a

final order in this proceeding are due:

February 7, 1996. If objections are filed,

answers to objections are due: February

14, 1996. Persons filing pleadings

should contact the Department’s Foreign

Air Carrier Licensing Division at the

telephone number listed below for a list

of persons to be served with objections

and answers to objections.

ADDRESSES: All documents in this

proceeding, with appropriate filing

copies, should be filed in Docket OST–

96–1021, addressed to Central Docket

Management Facility, U.S. Department

of Transportation, Room PL401, 400

Seventh Street SW., Washington, D.C.

20590.

FOR FURTHER INFORMATION CONTACT:

George Wellington, Foreign Air Carrier

Licensing Division, U.S. Department of

Transportation, Room 6412, 400

Seventh Street, SW., Washington, DC.

20590. Telephone (202) 366–2391.

Dated: January 24, 1996.

Mark L. Gerchick,

Acting Assistant Secretary for Aviation and

International Affairs.

[FR Doc. 96–1655 Filed 1–29–96; 8:45 am]

BILLING CODE 4910–62–P

Coast Guard

[CGD 95–074]

Oil Spill Removal Organization

Classification Guidelines

AGENCY: Coast Guard, DOT.

ACTION: Notice of availability.

SUMMARY: The Coast Guard has

developed revised Oil Spill Removal

Organization (OSRO) guidelines to

facilitate the preparation and approval

of facility or vessel response plans

required under the Oil Pollution Act.

The revised OSRO guidelines make