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Secretary of Labor Thomas E. Perez
[Prohibited Transaction Exemption 2000-21; Exemption Application No. D- 10777, et al.] [Notices] [05/23/2000]

EBSA (Formerly PWBA) Federal Register Notice

[Prohibited Transaction Exemption 2000-21; Exemption Application No. D- 10777, et al.] [05/23/2000]

[PDF Version]

Volume 65, Number 100, Page 33376-33377


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DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

[Prohibited Transaction Exemption 2000-21; Exemption Application No. D-
10777, et al.]

 
Grant of individual exemptions; Texas Iron Workers and Employers 
Apprenticeship Training and Journeyman Upgrading Fund (the Plan)

AGENCY: Pension and Welfare Benefits 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 
(the Act) and/or the Internal Revenue Code of 1986 (the Code).
    Notices were published in the Federal Register of the pendency 
before the Department of proposals to grant such exemptions. The 
notices set forth a summary of facts and representations contained in 
each application for exemption and referred interested persons to the 
respective applications for a complete statement of the facts and 
representations. The applications have been available for public 
inspection at the Department in Washington, D.C. The notices also 
invited interested persons to submit comments on the requested 
exemptions to the Department. In addition the notices stated that any 
interested person might submit a written request that a public hearing 
be held (where appropriate). The applicants have represented that they 
have complied with the requirements of the notification to interested 
persons. No public comments and no requests for a hearing, unless 
otherwise stated, were received by the Department.
    The notices of proposed exemption were issued and the exemptions 
are 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 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 exemptions are administratively feasible;
    (b) They are in the interests of the plans and their participants 
and beneficiaries; and
    (c) They are protective of the rights of the participants and 
beneficiaries of the plans.

Texas Iron Workers and Employers Apprenticeship Training and 
Journeyman Upgrading Fund (the Plan), Located in San Antonio, Texas

[Prohibited Transaction Exemption 2000-21; Exemption Application No. D-
10777]

Exemption

    The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the 
Act shall not apply to the purchase of a classroom/office building and 
a shop building (together, the Buildings) and an adjacent lot (the 
Adjacent Lot) by the Plan from Local Union No. 66 of the International 
Association of Bridge, Structural, Ornamental and Reinforcing Iron 
Workers, for $63,000, provided that: (a) The purchase is a one-time 
transaction for cash, and no commissions are paid by the Plan with 
respect to the transaction; (b) the Plan pays a price for the Buildings 
and the Adjacent Lot (collectively, the Properties) that is no more 
than the fair market value of the Properties at the time of the 
transaction, as determined by a qualified, independent appraiser; (c) 
the Plan's independent fiduciary has determined that the transaction is 
appropriate for the Plan and in the best interests of the Plan and its 
participants and beneficiaries; and (d) the Plan's independent 
fiduciary monitors the purchase of the Properties by the Plan and takes 
whatever action is necessary to safeguard the interests of the Plan and 
its participants and beneficiaries.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the notice of proposed exemption published on March 22, 2000 at 65 FR 
15367.
    For Further Information Contact: Gary H. Lefkowitz of the 
Department, telephone (202) 219-8881. (This is not a toll-free number.)

Bankers Trust Company (BTC), Located in New York, New York

[Prohibited Transaction Exemption 2000-22; Application No. D-10838]

Exemption

    The restrictions of section 406(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: 
(1) The granting to BTC (a) by the Cheslock-Bakker Opportunity Fund, 
L.P. (the LP) of security interests in (i) the capital commitments and 
capital contributions (Capital Contributions) of certain employee 
benefit plans (the Plans) investing in the LP and (ii) a borrower 
collateral account to which all Capital Contributions will be deposited 
when paid and (b) by the LP and by its general partner, CBA Real Estate 
Partners, LLC, a Delaware limited liability company, of the right to 
make calls for cash contributions (Contribution Calls) under the 
Cheslock-Bakker Opportunity Fund, L.P. Limited Partnership Agreement, 
where BTC is the representative of certain lenders (the Lenders) that 
will fund a so-called ``credit facility'' providing credit to the LP, 
and where the Lenders are parties in interest with respect to the 
Plans; and (2) the execution of a partner agreement and estoppel (the 
Estoppel) under which the Plans agree to honor the Contribution Calls; 
provided that (a) the grants and Estoppels are on terms no less 
favorable to the Plans than those which the Plans could obtain in 
arm's-length transactions with unrelated parties; (b) the decisions on 
behalf of each Plan to invest in the LP and to execute such Estoppels 
in favor of BTC are made by a fiduciary which is not included among, 
and is independent of and unaffiliated with, the Lenders and BTC; (c) 
with respect to Plans that have invested or may invest in the LP in the 
future, such Plans have or will have assets of not less than $100 
million and not more than 5% of the assets of any such Plan are or will 
be invested in the LP. For purposes of this condition (c), in the case 
of multiple plans maintained by a single employer or single controlled 
group of employers, the assets of which are invested on a commingled 
basis, (e.g., through a master trust), this $100 million threshold will 
be applied to the aggregate assets of all such plans; and (d) the 
general partner of the LP must be

[[Page 33377]]

independent of BTC, the Lenders and the Plans.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the notice of proposed exemption published on March 14, 2000 at 65 FR 
13855.
    For Further Information Contact: Gary H. Lefkowitz of the 
Department, telephone (202) 219-8881. (This is not a toll-free number.)

Bay Internists, Inc. Profit Sharing Plan (the Plan) Located in 
Kilmarnock, Virginia

[Prohibited Transaction Exemption 2000-23; Exemption Application No. D-
10847]

Exemption

    The restrictions of sections 406(a), 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)(A) through (E) of the Code, 
shall not apply to the proposed sale by the Plan of certain unimproved 
real property (the Property) located in Kilmarnock, Virginia, to Bay-
Med, a general partnership which is a party in interest with respect to 
the Plan, provided that the following conditions are satisfied:
    (a) The proposed sale is a one-time cash transaction;
    (b) The Plan receives the current fair market value for Property, 
as established at the time of the sale by an independent, qualified 
appraiser; and
    (c) The Plan pays no commissions or other expenses associated with 
the sale.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the notice of proposed exemption published on March 14, 2000 at 65 FR 
13858.
    For Further Information Contact: Ekaterina A. Uzlyan of the 
Department at (202) 219-8883. (This is not a toll-free number.)

Foodcraft, Inc. Defined Benefit Plan (the Plan) Located in Los 
Angeles, California

[Prohibited Transaction Exemption 2000-24; Exemption Application No. D-
10864]

Exemption

    The restrictions of sections 406(a) and 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)(A) through (E) of the Code, 
shall not apply to the cash sale (the Sale) of certain improved real 
property (the Property) by the Plan to the trustees of the Plan, Ernest 
Lieblich and Caryl Lieblich (collectively, the Trustees), parties in 
interest and disqualified persons with respect to the Plan, provided 
that the following conditions are met:
    (a) All terms and conditions of the Sale are no less favorable to 
the Plan than those which the Plan could obtain in an arm's length 
transaction with an unrelated party;
    (b) The Trustees will purchase the Property from the Plan for the 
greater of $315,000 or the Property's fair market value as of the date 
of the transaction as determined by a qualified, independent appraiser;
    (c) The Sale will be a one-time transaction for cash; and
    (d) The Plan will pay no fees or commissions in connection with the 
Sale.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the notice of proposed exemption published on March 22, 2000 at 65 FR 
15369.
    For Further Information Contact: Mr. J. Martin Jara, U.S. 
Department of Labor, telephone (202) 219-8883. (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 exemptions 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) These exemptions are 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 these exemptions is subject to the express 
condition that the material facts and representations contained in each 
application accurately describes all material terms of the transaction 
which is the subject of the exemption.

    Signed at Washington, DC, this 18th day of May, 2000.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, Department of Labor.
[FR Doc. 00-12947 Filed 5-22-00; 8:45 am]
BILLING CODE 4510-29-P