Prohibited Transaction Exemptions 2006-17 and 2006-18; Grant of Individual Exemptions involving; D-11375, Frank D. May and D-11392, Amendment to Prohibited Transaction Exemption PTE 2001-32 Involving Development Company Funding Corporation, 67914-67917 [E6-19827]
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67914
Federal Register / Vol. 71, No. 226 / Friday, November 24, 2006 / Notices
(ii) If such fiduciary directly or
indirectly receives any compensation or
other consideration from BS, the asset
management affiliate of BS, or the
Affiliated Broker-Dealer for his or her
own personal account in connection
with any transaction described in this
exemption;
(iii) If any officer, director, or highly
compensated employee (within the
meaning of section 4975(e)(2)(H) of the
Code) of the asset management affiliate
of BS responsible for the transactions
described, above, in Section I of this
exemption, is an officer, director, or
highly compensated employee (within
the meaning of section 4975(e)(2)(H) of
the Code) of the sponsor of the plan or
of the fiduciary responsible for the
decision to authorize or terminate
authorization for the transactions
described, above, in Section I. However,
if such individual is a director of the
sponsor of the plan or of the responsible
fiduciary, and if he or she abstains from
participation in: (A) The choice of the
plan’s investment manager/adviser; and
(B) the decision to authorize or
terminate authorization for transactions
described, above, in Section I, then
Section III(g)(2)(iii) shall not apply.
(3) The term, ‘‘officer,’’ means a
president, any vice president in charge
of a principal business unit, division, or
function (such as sales, administration,
or finance), or any other officer who
performs a policy-making function for
BS or any affiliate thereof.
(h) The term, ‘‘Securities,’’ shall have
the same meaning as defined in section
2(36) of the Investment Company Act of
1940 (the 1940 Act), as amended (15
U.S.C. 80a–2(36)(1996)). For purposes of
this exemption, mortgage-backed or
other asset-backed securities rated by
one of the Rating Organizations, as
defined, below, in Section III(k), will be
treated as debt securities.
(i) The term, ‘‘Eligible Rule 144A
Offering,’’ shall have the same meaning
as defined in SEC Rule 10f–3(a)(4) (17
CFR 270.10f–3(a)(4)) under the 1940
Act).
(j) The term, ‘‘qualified institutional
buyer,’’ or the term, ‘‘QIB,’’ shall have
the same meaning as defined in SEC
Rule 144A (17 CFR 230.144A(a)(1))
under the 1933 Act).
(k) The term, ‘‘Rating Organizations,’’
means Standard & Poor’s Rating
Services, Moody’s Investors Service,
Inc., Duff & Phelps Credit Rating Co., or
Fitch IBCA, Inc., or their successors.
(l) The term, ‘‘In-House Plan(s),’’
means an employee benefit plan(s) that
is subject to the Act and/or the Code,
and that is sponsored by the Applicants,
as defined, above, in Section III(a) for
their own employees.
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The availability of this exemption is
subject to the express condition that the
material facts and representations
contained in the application for
exemption are true and complete and
accurately describe all material terms of
the transactions. In the case of
continuing transactions, if any of the
material facts or representations
described in the applications change,
the exemption will cease to apply as of
the date of such change. In the event of
any such change, an application for a
new exemption must be made to the
Department.
The attention of interested persons is
directed to the following:
(1) The fact that a transaction is the
subject of an exemption under section
408(a) of the Act does not relieve a
fiduciary or other party in interest or
disqualified person from certain other
provisions of the Act, including any
prohibited transaction provisions to
which the exemption does not apply
and the general fiduciary responsibility
provisions of section 404 of the Act,
which require, among other things, a
fiduciary to discharge his or her duties
respecting the plan solely in the interest
of the participants and beneficiaries of
the plan and in a prudent fashion in
accordance with section 404(a)(1)(B) of
the Act;
(2) Before an exemption can be
granted under section 408(a) of the Act,
the Department must find that the
exemption is administratively feasible,
in the interest of the plan and of its
participants and beneficiaries and
protective of the rights of participants
and beneficiaries of the plan; and
(3) The proposed exemption, if
granted, will be supplemental to, and
not in derogation of, any other
provisions of the Act, including
statutory or administrative exemptions.
Furthermore, the fact that a transaction
is subject to an administrative or
statutory exemption is not dispositive of
whether the transaction is in fact a
prohibited transaction.
Signed at Washington, DC, this 20th day of
November, 2006.
Ivan L. Strasfeld,
Director of Exemption Determinations,
Employee Benefits Security Administration,
U.S. Department of Labor.
[FR Doc. E6–19826 Filed 11–22–06; 8:45 am]
Fmt 4703
[Exemption Application Nos. D–11375, and
D–11392]
Prohibited Transaction Exemptions
2006–17 and 2006–18; Grant of
Individual Exemptions involving; D–
11375, Frank D. May and D–11392,
Amendment to Prohibited Transaction
Exemption PTE 2001–32 Involving
Development Company Funding
Corporation
Employee Benefits Security
Administration, Labor.
ACTION: Grant of individual exemptions.
SUMMARY: This document contains
exemptions issued by the Department of
Labor (the Department) from certain of
the prohibited transaction restrictions of
the Employee Retirement Income
Security Act of 1974 (ERISA or the Act)
and/or the Internal Revenue Code of
1986 (the Code).
A notice was published in the Federal
Register of the pendency before the
Department of a proposal to grant such
exemption. The notice set forth a
summary of facts and representations
contained in the application for
exemption and referred interested
persons to the application for a
complete statement of the facts and
representations. The application has
been available for public inspection at
the Department in Washington, DC. The
notice also invited interested persons to
submit comments on the requested
exemption to the Department. In
addition the notice stated that any
interested person might submit a
written request that a public hearing be
held (where appropriate). The applicant
has represented that it has complied
with the requirements of the notification
to interested persons. No requests for a
hearing were received by the
Department. Public comments were
received by the Department as described
in the granted exemption.
The notice of proposed exemption
was issued and the exemption is being
granted solely by the Department
because, effective December 31, 1978,
section 102 of Reorganization Plan No.
4 of 1978, 5 U.S.C. App. 1 (1996),
transferred the authority of the Secretary
of the Treasury to issue exemptions of
the type proposed to the Secretary of
Labor.
Statutory Findings
In accordance with section 408(a) of
the Act and/or section 4975(c)(2) of the
Code and the procedures set forth in 29
BILLING CODE 4510–29–P
Frm 00069
Employee Benefits Security
Administration
AGENCY:
General Information
PO 00000
DEPARTMENT OF LABOR
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CFR Part 2570, Subpart B (55 FR 32836,
32847, August 10, 1990) and based upon
the entire record, the Department makes
the following findings:
(a) The exemption is administratively
feasible;
(b) The exemption is in the interests
of the plan and its participants and
beneficiaries; and
(c) The exemption is protective of the
rights of the participants and
beneficiaries of the plan.
Frank D. May, D.M.D., P.A.
401(k) Profit Sharing Plan and Trust
(the Plan), Located in Port St. Joe,
Florida
[Exemption Application No. D–11375;
Prohibited Transaction Exemption 2006–17]
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Exemption
The restrictions of sections 406(a),
406(b)(1), and 406(b)(2) of the Act and
the sanctions resulting from the
application of section 4975 of the Code
by reason of section 4975(c)(1)(A)
through (E) of the Code 1 shall not apply
to the sale of shares of stock (the Stock)
in Diente Y Clavo, S.A. (DyC) from the
individually directed account in the
Plan of Frank D. May, D.M.D. (the
Account) to Frank D. May, D.M.D. (Dr.
May), a party in interest with respect to
the Account, provided the following
conditions are satisfied:
a. The sale of the Stock to Dr. May is
a one-time transaction for cash;
b. Dr. May purchases the Stock for a
purchase price that reflects the fair
market value of the underlying assets of
DyC;
c. The fair market value of the
underlying assets of DyC is determined
by an independent, qualified appraiser,
as of the date the transaction is entered;
d. The Account is not responsible for
and does not pay any fees, commissions,
or other costs, or expenses associated
with the sale of the Stock, including the
cost of filing the application and
notifying interested persons;
e. Dr. May is the only participant in
the Plan whose Account is affected by
the transaction, and the sales proceeds
from the transaction will be credited to
such Account simultaneously with the
transfer of title to the Stock to Dr. May;
and
f. The terms and conditions of the sale
of the Stock are at least as favorable to
the Account as terms and conditions
obtainable under similar circumstances
negotiated at arm’s length with an
unrelated third party.
1 For
purposes of this exemption, references to
specific provisions of Title I of the Act, unless
otherwise specified, refer also to the corresponding
provisions of the Code.
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Written Comments
In the Notice of Proposed Exemption
(the Notice), the Department of Labor
(the Department) invited all interested
persons to submit written comments
and requests for a hearing on the
proposed exemption within thirty (30)
days of the date of the publication of the
Notice in the Federal Register on
September 27, 2006. All comments and
requests for a hearing were due by
October 27, 2006.
During the comment period, the
Department received no requests for a
hearing. However, the Department did
receive one comment letter from the
applicant. The applicant notified the
Department that there is a typographical
error in footnote no. 2, as set forth in the
Notice in the Summary of Facts and
Representations, at 71 FR 56561. In this
regard, the date, ‘‘March 3, 3005,’’
should have read, ‘‘March 3, 2005.’’
For a more complete statement of the
facts and representations supporting the
Department’s decision to grant this
exemption refer to the Notice published
on September 27, 2006, at 71 FR 56559.
FOR FURTHER INFORMATION CONTACT:
Angelena C. Le Blanc of the Department,
telephone (202) 693–8540. (This is not
a toll-free number.)
Amendment to Prohibited Transaction
Exemption (PTE) 2001–32 Involving
Development Company Funding
Corporation, Located in the District of
Columbia
[Prohibited Transaction Exemption 2006–18;
Application Number D–11392]
Exemption
Based on the facts and representations
set forth in the Application, under the
authority of section 408(a) of the Act
and section 4975(c)(2) of the Code and
in accordance with the procedures set
forth in 29 CFR Part 2570, Subpart B (55
FR 32836, August 10, 1990), the
Department amends PTE 2001–32 as set
forth below:
Section I. Transactions
A. Effective August 25, 2000, the
restrictions of sections 406(a) and 407(a)
of the Act, and the sanctions resulting
from the application of section 4975 of
the Code, by reason of section
4975(c)(1)(A) through (D) of the Code,
shall not apply to the following
transactions involving Trusts and
Certificates evidencing interests therein:
(1) The direct or indirect sale,
exchange or transfer of Certificates in
the initial issuance of Certificates
between the Underwriter of the
Certificates and an employee benefit
plan when the SBA, the Fiscal Agent,
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67915
the Selling Agent, the Central Servicing
Agent, the Trustee, the Underwriter, or
an Obligor is a party in interest with
respect to such plan;
(2) The direct or indirect acquisition
or disposition of Certificates by a plan
in the secondary market for such
Certificates; and
(3) The continued holding of
Certificates acquired by a plan pursuant
to subsection I.A.(1) or (2).
Notwithstanding the foregoing,
Section I.A. does not provide an
exemption from the restrictions of
sections 406(a)(1)(E), 406(a)(2) and 407
of the Act for the acquisition or holding
of a Certificate on behalf of an Excluded
Plan, by any person who has
discretionary authority or renders
investment advice with respect to the
assets of that Excluded Plan.2
B. Effective August 25, 2000, the
restrictions of section 406(b)(1) and
(b)(2) of the Act and the sanctions
resulting from the application of section
4975 of the Code, by reason of section
4975(c)(1)(E) of the Code, shall not
apply to:
(1) The direct or indirect sale,
exchange or transfer of Certificates in
the initial issuance of Certificates
between the Underwriter and a plan,
when the person who has discretionary
authority or renders investment advice
with respect to the investment of plan
assets in the Certificates is (a) an Obligor
with respect to 5 percent or less of the
fair market value of the 504 Program
Loans underlying the Debentures related
to that Series of Certificates, or (b) an
affiliate of a person described in (a); if
(i) The plan is not an Excluded Plan;
(ii) Solely in the case of an acquisition
of Certificates in connection with the
initial issuance of the Certificates, at
least 50 percent of each Series of
Certificates in which plans have
invested is acquired by persons
independent of the members of the
Restricted Group, and at least 50 percent
of the aggregate interest in the Series is
acquired by persons independent of the
Restricted Group.
(iii) A plan’s investment in each
Series of Certificates does not exceed 25
percent of all of the Certificates of that
Series outstanding at the time of the
acquisition; and
(iv) Immediately after the acquisition
of the Certificates, no more than 25
percent of the assets of a plan with
respect to which the person has
discretionary authority or renders
investment advice are invested in
2 Section I.A. provides no relief from sections
406(a)(1)(E), 406(a)(2) and 407 of the Act for any
person rendering investment advice to an Excluded
Plan within the meaning of section 3(21)(A)(ii) of
the Act and regulation 29 CFR section 2510.3–21(c).
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Certificates representing an interest in a
Trust containing assets sold or serviced
by the same entity.3 For purposes of this
subparagraph (iv) only, an entity will
not be considered to service assets
contained in a Trust if it is merely a
subservicer of that Trust.
(2) The direct or indirect acquisition
or disposition of Certificates by a plan
described in paragraph B.(1) in the
secondary market for such Certificates,
provided that conditions set forth in
paragraphs B.(1)(i), (iii) and (iv) are met;
and
(3) The continued holding of
Certificates acquired by a plan pursuant
to subsection I.B.(1) or (2).
C. Effective August 25, 2000, the
restrictions of sections 406(a), 406(b)
and 407(a) of the Act, and the sanctions
resulting from the application of section
4975 of the Code, by reason of section
4975(c) of the Code, shall not apply to
transactions in connection with the
servicing, management and operation of
a Trust, provided:
(1) Such transactions are carried out
in accordance with the terms of a
binding Trust Agreement; and
(2) The Trust Agreement is provided
to, or described in all material respects
in the offering circular or other
disclosure document provided to the
investing plans before they purchase
Certificates issued by the Trust.4
D. Effective August 25, 2000, the
restrictions of sections 406(a) and 407(a)
of the Act, and the sanctions resulting
from the application of section 4975 of
the Code, by reason of section
4975(c)(1)(A) through (D) of the Code,
shall not apply to any transaction to
which those restrictions or sanctions
would otherwise apply merely because
a person is deemed to be a party in
interest or disqualified person
(including a fiduciary) with respect to a
plan by virtue of providing services to
the plan (or by virtue of having a
relationship to such service provider
described in section 3(14)(F), (G), (H), or
(I) of the Act or section 4975(e)(2)(F),
3 For purposes of this exemption, each plan
participating in a commingled fund (such as a bank
collective trust fund or insurance company pooled
separate account) shall be considered to own the
same proportionate undivided interest in each asset
of the commingled fund as its proportionate interest
in the total assets of the commingled fund as
calculated on the most recent preceding valuation
date of the fund.
4 The offering circular or other disclosure
document must contain substantially the same
information that would be disclosed in a prospectus
if the offering of the Certificates were made in a
registered public offering under the Securities Act
of 1933. In the Department’s view, the offering
circular or other disclosure document must contain
sufficient information to permit plan fiduciaries to
make informed investment decisions.
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13:24 Nov 22, 2006
Jkt 211001
(G), (H), (I) of the Code), solely because
of the plan’s ownership of Certificates.
Section II. Conditions
The relief provided under Section I is
available only if the following
conditions are met:
A. The acquisition of Certificates by a
plan is on terms (including the
Certificate price) that are at least as
favorable to the plan as such terms
would be in an arm’s-length transaction
with an unrelated party;
B. The rights and interests evidenced
by the Certificates are not subordinated
to the rights and interests evidenced by
other Certificates in the same Series;
C. The Certificates and Debentures are
guaranteed as to the timely payment of
principal and interest by the SBA, and
are therefore backed by the full faith and
credit of the United States;
D. The Trustee is not an affiliate of
any other member of the Restricted
Group, other than, effective on or after
October 1, 2006, the Central Servicing
Agent.
Section III. Definitions
For purposes of this exemption:
A. ‘‘Certificate’’ means a certificate:
(1) That represents a beneficial
ownership interest in a discrete pool of
Debentures and all payments thereon,
held in Trust by the Trustee pursuant to
the Trust Agreement;
(2) That entitles the holder to passthrough payments of principal, interest,
and/or other payments made with
respect to the discrete pool of
Debentures held as part of such Trust;
and
(3) That is issued by the Trustee as
agent for the SBA and guaranteed by the
SBA as to timely payment of principal
and interest pursuant to section 505 of
the Small Business Investment Act of
1958, as amended (the Small Business
Investment Act).
B. ‘‘Trust’’ means the trust created
pursuant to the Trust Agreement, under
which, with respect to each Series of
Certificates, the Trustee holds in Trust
for the benefit of the certificateholders
of the Series the following property:
(1) The discrete pool of Debentures
related to the Series;
(2) A debenture guarantee agreement
executed by the SBA pursuant to section
503 of the Small Business Investment
Act pursuant to which the SBA
guarantees timely payment of principal
and interest on the Debentures related to
the Series; and
(3) The certificate account maintained
by the Central Servicing Agent for such
Series into which the Central Servicing
Agent deposits payments due in respect
of the Debentures on each semiannual
debenture payment date.
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Frm 00071
Fmt 4703
Sfmt 4703
C. ‘‘Debentures’’ means debentures
issued by a certified development
company and guaranteed as to timely
payment of principal and interest by the
SBA pursuant to section 503 of the
Small Business Investment Act.
D. ‘‘504 Program Loans’’ means loans
made by a certified development
company to a small business concern
and funded with the proceeds of a
Debenture pursuant to section 503 of the
Small Business Investment Act.
E. ‘‘SBA’’ refers to the U.S. Small
Business Administration.
F. ‘‘Underwriter’’ means an entity
which has received an individual
prohibited transaction exemption from
the Department that provides relief for
the operation of asset pool investment
trusts that issue ‘‘asset-backed’’ passthrough securities to plans, that is
similar in format and structure to this
exemption (the Underwriter
Exemptions); 5 any person directly or
indirectly, through one or more
intermediaries, controlling, controlled
by or under common control with such
entity; and any member of an
underwriting syndicate or selling group
of which such firm or person described
above is a manager or co-manager with
respect to the Certificates.
G. ‘‘Fiscal Agent’’ means the entity
that has contracted with the SBA to
assess the financial markets, arrange for
the production of required documents,
and monitor the performance of the
Trustee and the Underwriter.
H. ‘‘Selling Agent’’ means the entity
appointed by a certified development
company to select Underwriters,
negotiate the terms and conditions of
Debenture offerings with the
Underwriters, and direct and coordinate
Debenture sales.
I. ‘‘Central Servicing Agent’’ means
the entity that has entered into a master
servicing agreement with the SBA to
support the orderly flow of funds among
borrowers, certified development
companies and the SBA.
J. ‘‘Trustee’’ means an entity that is
the trustee of the Trust.
K. ‘‘Obligor’’ means any person that is
obligated to make payments under a
Section 504 Loan related to a Debenture
contained in the Trust.
L. ‘‘Excluded Plan’’ means any
employee benefit plan with respect to
which any member of the Restricted
Group is a ‘‘plan sponsor’’ within the
meaning of section 3(16)(B) of the Act.
M. ‘‘Restricted Group’’ with respect to
a class of Certificates means:
(1) Each Underwriter;
5 For a listing of the Underwriter Exemptions, see
the description provided in footnote 1 of PTE 2002–
41, 67 FR 54487 (August 22, 2002).
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(2) The Fiscal Agent;
(3) The Selling Agent;
(4) The Trustee;
(5) The Central Servicing Agent;
(6) Any Obligor with respect to loans
relating to Debentures included in the
Trust constituting more than 5 percent
of the aggregate unamortized principal
balance of the assets in the Trust,
determined on the date of the initial
issuance of Certificates by the Trust;
(7) The SBA; or
(8) Any affiliate of a person described
in (1)–(7) above.
N. ‘‘Affiliate’’ of another person
includes:
(1) Any person, directly or indirectly,
through one or more intermediaries,
controlling, controlled by or under
common control with such other
person;
(2) Any officer, director, partner,
employee, relative (as defined in section
3(15) of the Act), brother, sister, or
spouse of a brother or sister of such
other person; and
(3) Any corporation or partnership of
which such other person is an officer,
director or partner.
O. ‘‘Control’’ means the power to
exercise a controlling influence over the
management or policies of a person
other than an individual.
P. A person will be ‘‘independent’’ of
another person only if:
(1) Such person is not an affiliate of
that other person; and
(2) The other person, or an affiliate
thereof, is not a fiduciary that has
investment management authority or
renders investment advice with respect
to assets of such person.
Q. ‘‘Sale’’ includes the entrance into
a Forward Delivery Commitment,
provided:
(1) The terms of the Forward Delivery
Commitment (including any fee paid to
the investing plan) are no less favorable
to the plan than they would be in an
arm’s-length transaction with an
unrelated party;
(2) The offering circular or other
disclosure document is provided to an
investing plan prior to the time the plan
enters into the Forward Delivery
Commitment; and
(3) At the time of the delivery, all
conditions of this exemption applicable
to Sales are met.
R. ‘‘Forward Delivery Commitment’’
means a contract for the purchase or
sale of one or more Certificates to be
delivered at an agreed future settlement
date. The term includes both mandatory
contracts (which contemplate obligatory
delivery and acceptance of the
Certificates) and optional contracts
(which give one party the right but not
the obligation to deliver Certificates to,
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13:24 Nov 22, 2006
Jkt 211001
or demand delivery of Certificates from,
the other party).
S. ‘‘Trust Agreement’’ means that trust
agreement by and among the SBA, the
Fiscal Agent and the Trustee, as
amended, establishing the Trust and,
with respect to each Series of
Certificates, the supplement to the trust
agreement pertaining to such Series.
T. ‘‘Series’’ means any particular
series of Certificates issued pursuant to
the Trust Agreement that, in the
aggregate, represent the entire beneficial
interest in a discrete pool of Debentures
held by the Trustee pursuant to the
Trust Agreement.
For a more complete statement of the
facts and representations supporting the
Department’s decision to grant this
amendment, refer to the notice of
proposed exemption published on
September 27, 2006 at 71 FR 56563.
FOR FURTHER INFORMATION CONTACT:
Wendy McColough of the Department,
telephone (202) 693–8540. (This is not
a toll-free number.)
General Information
The attention of interested persons is
directed to the following:
(1) The fact that a transaction is the
subject of an exemption under section
408(a) of the Act and/or section
4975(c)(2) of the Code does not relieve
a fiduciary or other party in interest or
disqualified person from certain other
provisions to which the exemption does
not apply and the general fiduciary
responsibility provisions of section 404
of the Act, which among other things
require a fiduciary to discharge his
duties respecting the plan solely in the
interest of the participants and
beneficiaries of the plan and in a
prudent fashion in accordance with
section 404(a)(1)(B) of the Act; nor does
it affect the requirement of section
401(a) of the Code that the plan must
operate for the exclusive benefit of the
employees of the employer maintaining
the plan and their beneficiaries;
(2) This exemption is supplemental to
and not in derogation of, any other
provisions of the Act and/or the Code,
including statutory or administrative
exemptions and transactional rules.
Furthermore, the fact that a transaction
is subject to an administrative or
statutory exemption is not dispositive of
whether the transaction is in fact a
prohibited transaction; and
(3) The availability of this exemption
is subject to the express condition that
the material facts and representations
contained in the application accurately
describes all material terms of the
transaction which is the subject of the
exemption.
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67917
Signed at Washington, DC, this 20th day of
November, 2006.
Ivan Strasfeld,
Director of Exemption Determinations,
Employee Benefits Security Administration,
U.S. Department of Labor.
[FR Doc. E6–19827 Filed 11–22–06; 8:45 am]
BILLING CODE 4510–29–P
DEPARTMENT OF LABOR
Employment and Training
Administration
[TA–W–60,126]
Michelin North America Inc., BF
Goodrich Tire Manufacturing, Opelika,
AL; Notice of Affirmative
Determination Regarding Application
for Reconsideration
By application dated November 1,
2006, a company official requested
administrative reconsideration of the
Department of Labor’s Notice of
Negative Determination Regarding
Eligibility to Apply for Worker
Adjustment Assistance, applicable to
workers and former workers of the
subject firm. The determination was
issued on October 19, 2006. On
November 6, 2006, the Department’s
Notice of determination was published
in the Federal Register (71 FR 65004).
The negative determination was based
on the Department’s finding that the
subject firm did not separate or threaten
to separate a significant number or
proportion of workers as required by the
Trade Act of 1974. A significant number
or proportion of the workers in a firm
or appropriate subdivision means at
least three workers in a workforce of
fewer than 50 workers, five percent of
the workers in a workforce of over 50
workers, or at least 50 workers.
In the request for reconsideration, the
company official provided additional
information regarding worker
separations.
The Department has carefully
reviewed the company’s request for
reconsideration and has determined that
the Department will conduct further
investigation.
Conclusion
After careful review of the
application, I conclude that the claim is
of sufficient weight to justify
reconsideration of the Department of
Labor’s prior decision. The application
is, therefore, granted.
E:\FR\FM\24NON1.SGM
24NON1
]]>Agencies
[Federal Register Volume 71, Number 226 (Friday, November 24, 2006)]
[Notices]
[Pages 67914-67917]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-19827]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Exemption Application Nos. D-11375, and D-11392]
Prohibited Transaction Exemptions 2006-17 and 2006-18; Grant of
Individual Exemptions involving; D-11375, Frank D. May and D-11392,
Amendment to Prohibited Transaction Exemption PTE 2001-32 Involving
Development Company Funding Corporation
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Grant of individual exemptions.
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SUMMARY: This document contains exemptions issued by the Department of
Labor (the Department) from certain of the prohibited transaction
restrictions of the Employee Retirement Income Security Act of 1974
(ERISA or the Act) and/or the Internal Revenue Code of 1986 (the Code).
A notice was published in the Federal Register of the pendency
before the Department of a proposal to grant such exemption. The notice
set forth a summary of facts and representations contained in the
application for exemption and referred interested persons to the
application for a complete statement of the facts and representations.
The application has been available for public inspection at the
Department in Washington, DC. The notice also invited interested
persons to submit comments on the requested exemption to the
Department. In addition the notice stated that any interested person
might submit a written request that a public hearing be held (where
appropriate). The applicant has represented that it has complied with
the requirements of the notification to interested persons. No requests
for a hearing were received by the Department. Public comments were
received by the Department as described in the granted exemption.
The notice of proposed exemption was issued and the exemption is
being granted solely by the Department because, effective December 31,
1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1
(1996), transferred the authority of the Secretary of the Treasury to
issue exemptions of the type proposed to the Secretary of Labor.
Statutory Findings
In accordance with section 408(a) of the Act and/or section
4975(c)(2) of the Code and the procedures set forth in 29
[[Page 67915]]
CFR Part 2570, Subpart B (55 FR 32836, 32847, August 10, 1990) and
based upon the entire record, the Department makes the following
findings:
(a) The exemption is administratively feasible;
(b) The exemption is in the interests of the plan and its
participants and beneficiaries; and
(c) The exemption is protective of the rights of the participants
and beneficiaries of the plan.
Frank D. May, D.M.D., P.A.
401(k) Profit Sharing Plan and Trust (the Plan), Located in Port St.
Joe, Florida
[Exemption Application No. D-11375; Prohibited Transaction Exemption
2006-17]
Exemption
The restrictions of sections 406(a), 406(b)(1), and 406(b)(2) of
the Act and the sanctions resulting from the application of section
4975 of the Code by reason of section 4975(c)(1)(A) through (E) of the
Code \1\ shall not apply to the sale of shares of stock (the Stock) in
Diente Y Clavo, S.A. (DyC) from the individually directed account in
the Plan of Frank D. May, D.M.D. (the Account) to Frank D. May, D.M.D.
(Dr. May), a party in interest with respect to the Account, provided
the following conditions are satisfied:
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\1\ For purposes of this exemption, references to specific
provisions of Title I of the Act, unless otherwise specified, refer
also to the corresponding provisions of the Code.
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a. The sale of the Stock to Dr. May is a one-time transaction for
cash;
b. Dr. May purchases the Stock for a purchase price that reflects
the fair market value of the underlying assets of DyC;
c. The fair market value of the underlying assets of DyC is
determined by an independent, qualified appraiser, as of the date the
transaction is entered;
d. The Account is not responsible for and does not pay any fees,
commissions, or other costs, or expenses associated with the sale of
the Stock, including the cost of filing the application and notifying
interested persons;
e. Dr. May is the only participant in the Plan whose Account is
affected by the transaction, and the sales proceeds from the
transaction will be credited to such Account simultaneously with the
transfer of title to the Stock to Dr. May; and
f. The terms and conditions of the sale of the Stock are at least
as favorable to the Account as terms and conditions obtainable under
similar circumstances negotiated at arm's length with an unrelated
third party.
Written Comments
In the Notice of Proposed Exemption (the Notice), the Department of
Labor (the Department) invited all interested persons to submit written
comments and requests for a hearing on the proposed exemption within
thirty (30) days of the date of the publication of the Notice in the
Federal Register on September 27, 2006. All comments and requests for a
hearing were due by October 27, 2006.
During the comment period, the Department received no requests for
a hearing. However, the Department did receive one comment letter from
the applicant. The applicant notified the Department that there is a
typographical error in footnote no. 2, as set forth in the Notice in
the Summary of Facts and Representations, at 71 FR 56561. In this
regard, the date, ``March 3, 3005,'' should have read, ``March 3,
2005.''
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption refer to
the Notice published on September 27, 2006, at 71 FR 56559.
FOR FURTHER INFORMATION CONTACT: Angelena C. Le Blanc of the
Department, telephone (202) 693-8540. (This is not a toll-free number.)
Amendment to Prohibited Transaction Exemption (PTE) 2001-32 Involving
Development Company Funding Corporation, Located in the District of
Columbia
[Prohibited Transaction Exemption 2006-18; Application Number D-11392]
Exemption
Based on the facts and representations set forth in the
Application, under the authority of section 408(a) of the Act and
section 4975(c)(2) of the Code and in accordance with the procedures
set forth in 29 CFR Part 2570, Subpart B (55 FR 32836, August 10,
1990), the Department amends PTE 2001-32 as set forth below:
Section I. Transactions
A. Effective August 25, 2000, the restrictions of sections 406(a)
and 407(a) of the Act, and the sanctions resulting from the application
of section 4975 of the Code, by reason of section 4975(c)(1)(A) through
(D) of the Code, shall not apply to the following transactions
involving Trusts and Certificates evidencing interests therein:
(1) The direct or indirect sale, exchange or transfer of
Certificates in the initial issuance of Certificates between the
Underwriter of the Certificates and an employee benefit plan when the
SBA, the Fiscal Agent, the Selling Agent, the Central Servicing Agent,
the Trustee, the Underwriter, or an Obligor is a party in interest with
respect to such plan;
(2) The direct or indirect acquisition or disposition of
Certificates by a plan in the secondary market for such Certificates;
and
(3) The continued holding of Certificates acquired by a plan
pursuant to subsection I.A.(1) or (2).
Notwithstanding the foregoing, Section I.A. does not provide an
exemption from the restrictions of sections 406(a)(1)(E), 406(a)(2) and
407 of the Act for the acquisition or holding of a Certificate on
behalf of an Excluded Plan, by any person who has discretionary
authority or renders investment advice with respect to the assets of
that Excluded Plan.\2\
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\2\ Section I.A. provides no relief from sections 406(a)(1)(E),
406(a)(2) and 407 of the Act for any person rendering investment
advice to an Excluded Plan within the meaning of section
3(21)(A)(ii) of the Act and regulation 29 CFR section 2510.3-21(c).
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B. Effective August 25, 2000, the restrictions of section 406(b)(1)
and (b)(2) of the Act and the sanctions resulting from the application
of section 4975 of the Code, by reason of section 4975(c)(1)(E) of the
Code, shall not apply to:
(1) The direct or indirect sale, exchange or transfer of
Certificates in the initial issuance of Certificates between the
Underwriter and a plan, when the person who has discretionary authority
or renders investment advice with respect to the investment of plan
assets in the Certificates is (a) an Obligor with respect to 5 percent
or less of the fair market value of the 504 Program Loans underlying
the Debentures related to that Series of Certificates, or (b) an
affiliate of a person described in (a); if
(i) The plan is not an Excluded Plan;
(ii) Solely in the case of an acquisition of Certificates in
connection with the initial issuance of the Certificates, at least 50
percent of each Series of Certificates in which plans have invested is
acquired by persons independent of the members of the Restricted Group,
and at least 50 percent of the aggregate interest in the Series is
acquired by persons independent of the Restricted Group.
(iii) A plan's investment in each Series of Certificates does not
exceed 25 percent of all of the Certificates of that Series outstanding
at the time of the acquisition; and
(iv) Immediately after the acquisition of the Certificates, no more
than 25 percent of the assets of a plan with respect to which the
person has discretionary authority or renders investment advice are
invested in
[[Page 67916]]
Certificates representing an interest in a Trust containing assets sold
or serviced by the same entity.\3\ For purposes of this subparagraph
(iv) only, an entity will not be considered to service assets contained
in a Trust if it is merely a subservicer of that Trust.
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\3\ For purposes of this exemption, each plan participating in a
commingled fund (such as a bank collective trust fund or insurance
company pooled separate account) shall be considered to own the same
proportionate undivided interest in each asset of the commingled
fund as its proportionate interest in the total assets of the
commingled fund as calculated on the most recent preceding valuation
date of the fund.
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(2) The direct or indirect acquisition or disposition of
Certificates by a plan described in paragraph B.(1) in the secondary
market for such Certificates, provided that conditions set forth in
paragraphs B.(1)(i), (iii) and (iv) are met; and
(3) The continued holding of Certificates acquired by a plan
pursuant to subsection I.B.(1) or (2).
C. Effective August 25, 2000, the restrictions of sections 406(a),
406(b) and 407(a) of the Act, and the sanctions resulting from the
application of section 4975 of the Code, by reason of section 4975(c)
of the Code, shall not apply to transactions in connection with the
servicing, management and operation of a Trust, provided:
(1) Such transactions are carried out in accordance with the terms
of a binding Trust Agreement; and
(2) The Trust Agreement is provided to, or described in all
material respects in the offering circular or other disclosure document
provided to the investing plans before they purchase Certificates
issued by the Trust.\4\
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\4\ The offering circular or other disclosure document must
contain substantially the same information that would be disclosed
in a prospectus if the offering of the Certificates were made in a
registered public offering under the Securities Act of 1933. In the
Department's view, the offering circular or other disclosure
document must contain sufficient information to permit plan
fiduciaries to make informed investment decisions.
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D. Effective August 25, 2000, the restrictions of sections 406(a)
and 407(a) of the Act, and the sanctions resulting from the application
of section 4975 of the Code, by reason of section 4975(c)(1)(A) through
(D) of the Code, shall not apply to any transaction to which those
restrictions or sanctions would otherwise apply merely because a person
is deemed to be a party in interest or disqualified person (including a
fiduciary) with respect to a plan by virtue of providing services to
the plan (or by virtue of having a relationship to such service
provider described in section 3(14)(F), (G), (H), or (I) of the Act or
section 4975(e)(2)(F), (G), (H), (I) of the Code), solely because of
the plan's ownership of Certificates.
Section II. Conditions
The relief provided under Section I is available only if the
following conditions are met:
A. The acquisition of Certificates by a plan is on terms (including
the Certificate price) that are at least as favorable to the plan as
such terms would be in an arm's-length transaction with an unrelated
party;
B. The rights and interests evidenced by the Certificates are not
subordinated to the rights and interests evidenced by other
Certificates in the same Series;
C. The Certificates and Debentures are guaranteed as to the timely
payment of principal and interest by the SBA, and are therefore backed
by the full faith and credit of the United States;
D. The Trustee is not an affiliate of any other member of the
Restricted Group, other than, effective on or after October 1, 2006,
the Central Servicing Agent.
Section III. Definitions
For purposes of this exemption:
A. ``Certificate'' means a certificate:
(1) That represents a beneficial ownership interest in a discrete
pool of Debentures and all payments thereon, held in Trust by the
Trustee pursuant to the Trust Agreement;
(2) That entitles the holder to pass-through payments of principal,
interest, and/or other payments made with respect to the discrete pool
of Debentures held as part of such Trust; and
(3) That is issued by the Trustee as agent for the SBA and
guaranteed by the SBA as to timely payment of principal and interest
pursuant to section 505 of the Small Business Investment Act of 1958,
as amended (the Small Business Investment Act).
B. ``Trust'' means the trust created pursuant to the Trust
Agreement, under which, with respect to each Series of Certificates,
the Trustee holds in Trust for the benefit of the certificateholders of
the Series the following property:
(1) The discrete pool of Debentures related to the Series;
(2) A debenture guarantee agreement executed by the SBA pursuant to
section 503 of the Small Business Investment Act pursuant to which the
SBA guarantees timely payment of principal and interest on the
Debentures related to the Series; and
(3) The certificate account maintained by the Central Servicing
Agent for such Series into which the Central Servicing Agent deposits
payments due in respect of the Debentures on each semiannual debenture
payment date.
C. ``Debentures'' means debentures issued by a certified
development company and guaranteed as to timely payment of principal
and interest by the SBA pursuant to section 503 of the Small Business
Investment Act.
D. ``504 Program Loans'' means loans made by a certified
development company to a small business concern and funded with the
proceeds of a Debenture pursuant to section 503 of the Small Business
Investment Act.
E. ``SBA'' refers to the U.S. Small Business Administration.
F. ``Underwriter'' means an entity which has received an individual
prohibited transaction exemption from the Department that provides
relief for the operation of asset pool investment trusts that issue
``asset-backed'' pass-through securities to plans, that is similar in
format and structure to this exemption (the Underwriter Exemptions);
\5\ any person directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with
such entity; and any member of an underwriting syndicate or selling
group of which such firm or person described above is a manager or co-
manager with respect to the Certificates.
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\5\ For a listing of the Underwriter Exemptions, see the
description provided in footnote 1 of PTE 2002-41, 67 FR 54487
(August 22, 2002).
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G. ``Fiscal Agent'' means the entity that has contracted with the
SBA to assess the financial markets, arrange for the production of
required documents, and monitor the performance of the Trustee and the
Underwriter.
H. ``Selling Agent'' means the entity appointed by a certified
development company to select Underwriters, negotiate the terms and
conditions of Debenture offerings with the Underwriters, and direct and
coordinate Debenture sales.
I. ``Central Servicing Agent'' means the entity that has entered
into a master servicing agreement with the SBA to support the orderly
flow of funds among borrowers, certified development companies and the
SBA.
J. ``Trustee'' means an entity that is the trustee of the Trust.
K. ``Obligor'' means any person that is obligated to make payments
under a Section 504 Loan related to a Debenture contained in the Trust.
L. ``Excluded Plan'' means any employee benefit plan with respect
to which any member of the Restricted Group is a ``plan sponsor''
within the meaning of section 3(16)(B) of the Act.
M. ``Restricted Group'' with respect to a class of Certificates
means:
(1) Each Underwriter;
[[Page 67917]]
(2) The Fiscal Agent;
(3) The Selling Agent;
(4) The Trustee;
(5) The Central Servicing Agent;
(6) Any Obligor with respect to loans relating to Debentures
included in the Trust constituting more than 5 percent of the aggregate
unamortized principal balance of the assets in the Trust, determined on
the date of the initial issuance of Certificates by the Trust;
(7) The SBA; or
(8) Any affiliate of a person described in (1)-(7) above.
N. ``Affiliate'' of another person includes:
(1) Any person, directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with
such other person;
(2) Any officer, director, partner, employee, relative (as defined
in section 3(15) of the Act), brother, sister, or spouse of a brother
or sister of such other person; and
(3) Any corporation or partnership of which such other person is an
officer, director or partner.
O. ``Control'' means the power to exercise a controlling influence
over the management or policies of a person other than an individual.
P. A person will be ``independent'' of another person only if:
(1) Such person is not an affiliate of that other person; and
(2) The other person, or an affiliate thereof, is not a fiduciary
that has investment management authority or renders investment advice
with respect to assets of such person.
Q. ``Sale'' includes the entrance into a Forward Delivery
Commitment, provided:
(1) The terms of the Forward Delivery Commitment (including any fee
paid to the investing plan) are no less favorable to the plan than they
would be in an arm's-length transaction with an unrelated party;
(2) The offering circular or other disclosure document is provided
to an investing plan prior to the time the plan enters into the Forward
Delivery Commitment; and
(3) At the time of the delivery, all conditions of this exemption
applicable to Sales are met.
R. ``Forward Delivery Commitment'' means a contract for the
purchase or sale of one or more Certificates to be delivered at an
agreed future settlement date. The term includes both mandatory
contracts (which contemplate obligatory delivery and acceptance of the
Certificates) and optional contracts (which give one party the right
but not the obligation to deliver Certificates to, or demand delivery
of Certificates from, the other party).
S. ``Trust Agreement'' means that trust agreement by and among the
SBA, the Fiscal Agent and the Trustee, as amended, establishing the
Trust and, with respect to each Series of Certificates, the supplement
to the trust agreement pertaining to such Series.
T. ``Series'' means any particular series of Certificates issued
pursuant to the Trust Agreement that, in the aggregate, represent the
entire beneficial interest in a discrete pool of Debentures held by the
Trustee pursuant to the Trust Agreement.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this amendment, refer to
the notice of proposed exemption published on September 27, 2006 at 71
FR 56563.
FOR FURTHER INFORMATION CONTACT: Wendy McColough of the Department,
telephone (202) 693-8540. (This is not a toll-free number.)
General Information
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption
under section 408(a) of the Act and/or section 4975(c)(2) of the Code
does not relieve a fiduciary or other party in interest or disqualified
person from certain other provisions to which the exemption does not
apply and the general fiduciary responsibility provisions of section
404 of the Act, which among other things require a fiduciary to
discharge his duties respecting the plan solely in the interest of the
participants and beneficiaries of the plan and in a prudent fashion in
accordance with section 404(a)(1)(B) of the Act; nor does it affect the
requirement of section 401(a) of the Code that the plan must operate
for the exclusive benefit of the employees of the employer maintaining
the plan and their beneficiaries;
(2) This exemption is supplemental to and not in derogation of, any
other provisions of the Act and/or the Code, including statutory or
administrative exemptions and transactional rules. Furthermore, the
fact that a transaction is subject to an administrative or statutory
exemption is not dispositive of whether the transaction is in fact a
prohibited transaction; and
(3) The availability of this exemption is subject to the express
condition that the material facts and representations contained in the
application accurately describes all material terms of the transaction
which is the subject of the exemption.
Signed at Washington, DC, this 20th day of November, 2006.
Ivan Strasfeld,
Director of Exemption Determinations, Employee Benefits Security
Administration, U.S. Department of Labor.
[FR Doc. E6-19827 Filed 11-22-06; 8:45 am]
BILLING CODE 4510-29-P
