81 FR 72114 - Exemptions From Certain Prohibited Transaction Restrictions
DEPARTMENT OF LABOR
Employee Benefits Security Administration Federal Register Volume 81, Issue 202 (October 19, 2016)
Employee Benefits Security Administration
Federal Register Volume 81, Issue 202 (October 19, 2016)
| Page Range | 72114-72123 | |
| FR Document | 2016-25279 |
[Federal Register Volume 81, Number 202 (Wednesday, October 19, 2016)] [Notices] [Pages 72114-72123] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-25279] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF LABOR Employee Benefits Security Administration Exemptions From Certain Prohibited Transaction Restrictions AGENCY: 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). This notice includes the following: 2016-03, The Michael T. Sewell, M.D., P.S.C. Profit Sharing Plan, D-11813; 2016-04, Plumbers' Pension Fund, Local 130, U.A., D-11822; 2016-05, Sears Holdings 401(k) Savings Plan and the Sears Holdings Puerto Rico Savings Plan, D-11846 and D- 11847; 2016-06, Sears Holdings 401(k) Savings Plan and the Sears Holdings Puerto Rico Savings Plan, D-11851 and D-11852; 2016-07, Liberty Media 401(k) Savings Plan, D-11858; 2016-08, Baxter International Inc., D-11866; and 2016-09, Sears Holdings 401(k) Savings Plan and the Sears Holdings Puerto Rico Savings Plan, D-11871 and D- 11872. SUPPLEMENTARY INFORMATION: 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 CFR part 2570, subpart B (76 FR 66637, 66644, October 27, 2011) \1\ and based upon the entire record, the Department makes the following findings: --------------------------------------------------------------------------- \1\ The Department has considered exemption applications received prior to December 27, 2011 under the exemption procedures set forth in 29 CFR part 2570, subpart B (55 FR 32836, 32847, August 10, 1990). --------------------------------------------------------------------------- (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. [[Page 72115]] The Michael T. Sewell, M.D., P.S.C. Profit Sharing Plan (the Plan), Located in Bardstown, Kentucky [Prohibited Transaction Exemption 2016-03; Exemption Application No. D- 11813] Exemption The restrictions of section 406(a)(1)(A) and (D) and section 406(b)(1) and (b)(2) of the Act and the sanctions resulting from the application of section 4975, by reason of section 4975(c)(1)(A), (D) and (E) of the Code,\2\ shall not apply to the cash sale (the Sale) by the individually-directed account (the Account) in the Plan of Michael T. Sewell, M.D. (Dr. Sewell) of a parcel of unimproved real property (the Property), to Dr. Sewell, a party in interest with respect to the Plan; provided that the following conditions are satisfied: --------------------------------------------------------------------------- \2\ 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. --------------------------------------------------------------------------- (a) The Sale is a one-time transaction for cash; (b) The sales price for the Property is the greater of: $916,501; or the sum of the fair market value of the Property, as established by a qualified independent appraiser, and the fair market value of timber on the Property, as determined by a qualified independent timber appraiser, in separate, updated appraisals reports on the date of the Sale; (c) The Account pays no real estate fees or commissions in connection with the Sale; (d) The terms of the Sale are no less favorable to the Account than the terms the Account would receive under similar circumstances in an arm's length transaction with an unrelated party; and (e) Michael T. Sewell, M.D., P.S.C. bears 100% of the costs of obtaining this exemption. Written Comments In the notice of proposed exemption (the Notice), the Department invited all interested persons to submit written comments and/or requests for a public hearing within 30 days of the publication, on April 28, 2016, of the Notice in the Federal Register. All comments were due by May 28, 2016. During the comment period, the Department received no comments or hearing requests from interested persons. Accordingly, after giving full consideration to the entire record, the Department has decided to grant the exemption. The complete application file (Exemption Application No. D-11813), including all supplemental submissions received by the Department, is available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, Room N-1515, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210. For a more complete statement of the facts and representations supporting the Department's decision to grant this exemption, refer to the Notice published in the Federal Register on April 28, 2016 at 81 FR 25433. FOR FURTHER INFORMATION CONTACT: Mrs. Blessed Chuksorji-Keefe of the Department, telephone (202) 693-8567. (This is not a toll-free number.) Plumbers' Pension Fund, Local 130, U.A. (the Plan, or the Applicant), Located in Chicago, IL [Prohibited Transaction Exemption 2016-04; Exemption Application No. D- 11822] Exemption The restrictions of section 406(a)(1)(A) and (D) of the Act and the sanctions resulting from the application of section 4975 of the Code, by reason of section 4975(c)(1)(A) and (E) of the Code,\3\ shall not apply to the proposed sale (the Sale) of two commercial buildings (the Properties), by the Plan to the Plumbers' Pension Fund, Local 130, U.A. (the Union), a party in interest with respect to the Plan, provided that the following conditions are satisfied: --------------------------------------------------------------------------- \3\ 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. --------------------------------------------------------------------------- (a) The Sale is a one-time transaction for cash; (b) The price paid by the Union to the Plan is equal to the greater of: (1) $1,640,000, or (2) the fair market value of the Properties, as determined by a qualified independent appraiser (the Independent Appraiser) as of the date of the Sale; (c) The Plan does not pay any appraisal fees, real estate fees, commissions, costs or other expenses in connection with the Sale; (d) The Plan trustees appointed by the Union (the Union Trustees) recuse themselves from: (1) Discussions and voting with respect to the Plan's decision to enter into the Sale; and (2) all aspects of the selection and engagement of the Independent Appraiser for the purposes of determining the fair market value of the Properties on the date of the Sale; (e) The Plan trustees appointed by the employer associations (the Employer Trustees), who have no interest in the Sale: (1) Determine, among other things, whether it is in the interest of the Plan to proceed with the Sale; (2) review and approve the methodology used by the Independent Appraiser in the independent appraisal report (the Appraisal Report) that is being relied upon; and (3) ensure that such methodology is applied by the Independent Appraiser in determining the fair market value of the Properties on the date of the Sale; and (f) The Sale is not part of an agreement, arrangement, or understanding designed to benefit the Union. Written Comments The Department invited all interested persons to submit written comments and/or requests for a public hearing with respect to the notice of proposed exemption, published on April 28, 2016, at 81 FR 25435. All comments and requests for a hearing were due by May 28, 2016. During the comment period, the Department received one written comment and no requests for a public hearing. In a comment letter, dated May 19, 2016, a Plan participant suggests that the Sale price of the Properties be no less than the average of three different appraisals of the Properties, rather than based on a single appraisal. The commenter asserts that this is the standard practice for bids and should be used in this exemption because it is fair and equitable. The Department acknowledges the participant's comment, but wishes to emphasize that the procedures (the Procedures) governing the filing and the processing of administrative exemptions from the prohibited transaction provisions of the Act, as amended, and the Code, as amended, (29 CFR 2570, October 27, 2011), do not require that an applicant obtain multiple appraisals of a property from different qualified independent appraisers. Specifically, section 2570.34(c)(4) of the Procedures refers to the preparation of a single appraisal report for a property by a qualified independent appraiser, who is acting solely on behalf of the affected plan. Moreover, section 2570.34(c)(4) of the Procedures describes the content of such appraisal report in subparagraphs (i)-(iii). Accordingly, in the exemption request under consideration, the Department is of the view that the Independent Appraiser of the Properties has fulfilled the requirements mandated by Section 2570.34(c) of the Procedures. In addition, the Department notes that the Sale is subject to several conditions that are meant to protect the Plan and [[Page 72116]] its participants and beneficiaries. In this regard, the Independent Appraiser will render an updated appraisal of the Properties, as of the date of the Sale. In addition, the price paid by the Union to the Plan will be equal to the greater of: (1) $1,640,000, or (2) the fair market value of the Properties, as determined by the Independent Appraiser as of the date of the Sale. Further, the Employer Trustees, who have no interest in the Sale, will review and approve the methodology used by the Independent Appraiser, and will ensure that such methodology is properly applied. Accordingly, after giving full consideration to the entire record, the Department has decided to grant the exemption. The complete application file (Application No. D-11822), including all supplemental submissions received by the Department, is available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, Room N-1515, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210. 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 April 28, 2016, at 81 FR 25435. FOR FURTHER INFORMATION CONTACT: Mr. Joseph Brennan of the Department, telephone (202) 693-8456. (This is not a toll-free number.) Sears Holdings 401(k) Savings Plan (the Savings Plan) and the Sears Holdings Puerto Rico Savings Plan (the PR Plan) (Collectively, the Plans), Located in Hoffman Estates, IL [Prohibited Transaction Exemption 2016-05; Exemption Application Nos. D-11846 and D-11847] Exemption Section I. Covered Transactions (a) The restrictions of sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) 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,\4\ shall not apply to the acquisition and holding by the Savings Plan of certain subscription rights (the Rights) to purchase shares of common stock (the SC Stock) in Sears Canada Inc. (Sears Canada) in connection with an offering (the Offering) by Sears Holdings Corporation (Holdings) of shares of SC Stock, provided that the conditions as set forth, below, in Section II of this exemption were satisfied for the duration of the acquisition and holding; and --------------------------------------------------------------------------- \4\ For purposes of this exemption, unless indicated otherwise, references to section 406 of the Act should be read to refer as well to the corresponding provisions of section 4975 of the Code. --------------------------------------------------------------------------- (b) The restrictions of sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act \5\ shall not apply to the acquisition and holding of the Rights by the PR Plan in connection with the Offering of the SC Stock by Holdings, provided that the conditions as set forth in Section II of this exemption were satisfied for the duration of the acquisition and holding. --------------------------------------------------------------------------- \5\ The Applicant represents that there is no jurisdiction under Title II of the Act with respect to the PR Plan. Accordingly, the Department is not providing any exemptive relief from section 4975(c)(1)(E) of the Code for the acquisition and holding of the Rights by the PR Plan. --------------------------------------------------------------------------- Section II. Conditions for Relief (a) The receipt of the Rights by the Plans occurred in connection with the Offering, in which all shareholders of the common stock of Holdings (Holdings Stock), including the Plans, were treated in the same manner; (b) The acquisition of the Rights by the Plans resulted from an independent act of Holdings, as a corporate entity; (c) Each shareholder of Holdings Stock, including each of the Plans, received the same proportionate number of Rights based on the number of shares of Holdings Stock held by each such shareholder; (d) All decisions with regard to the holding and disposition of the Rights by the Plans were made by a qualified independent fiduciary (the Independent Fiduciary) within the meaning of 29 CFR 2570.31(j); \6\ --------------------------------------------------------------------------- \6\ 29 CFR 2570.31(j) defines a ``qualified independent fiduciary,'' in relevant part, to mean ``any individual or entity with appropriate training, experience, and facilities to act on behalf of the plan regarding the exemption transaction in accordance with the fiduciary duties and responsibilities prescribed by ERISA, that is independent of and unrelated to any party in interest engaging in the exemption transaction and its affiliates;'' in general, a fiduciary is presumed to be independent ``if the revenues it receives or is projected to receive, within the current federal income tax year from parties in interest (and their affiliates) [with respect] to the transaction are not more than 2% of such fiduciary's annual revenues based upon its prior income tax year. Although the presumption does not apply when the aforementioned percentage exceeds 2%, a fiduciary nonetheless may be considered independent based upon other facts and circumstances provided that it receives or is projected to receive revenues that are not more than 5% within the current federal income tax year from parties in interest (and their affiliates) [with respect] to the transaction based upon its prior income tax year.'' --------------------------------------------------------------------------- (e) The Independent Fiduciary determined that it would be in the interest of the Plans to sell all of the Rights received in the Offering by the Plans in blind transactions on the NASDAQ Global Select Market; (f) No brokerage fees, commissions, subscription fees, or other charges were paid by the Plans with respect to the acquisition and holding of the Rights, or were paid to any affiliate of Holdings, Sears Canada, or the Independent Fiduciary, with respect to the sale of the Rights. Section III. Definitions (a) The term ``affiliate'' of a person includes: (1) Any person directly or indirectly through one or more intermediaries, controlling, controlled by, or under common control with such person; (2) Any officer, director, partner, employee, or relative, as defined in section 3(15) of the Act, of such person; and (3) Any corporation or partnership of which such person is an officer, director, partner, or employee. (b) The term ``control'' means the power to exercise a controlling influence over the management or policies of a person other than an individual. Effective Date: This exemption is effective for the period beginning October 16, 2014, and ending November 7, 2014 (the Offering Period). Written Comments The Department invited all interested persons to submit written comments and/or requests for a public hearing with respect to the notice of proposed exemption (the Notice), published on May 12, 2016, at 81 FR 29705. All comments and requests for hearing were due by July 3, 2016. During the comment period, the Department received two comments from interested persons and no requests for a public hearing. A Savings Plan participant submitted a written comment and Holdings requested a clarification to the Notice. Furthermore, during the comment period, the Department received several phone inquiries that generally concerned matters outside the scope of the exemption. Participant's Comment In his comment letter of June 20, 2016, the participant represents that he is a Holdings' shareholder, who held a balance in the Savings Plan at the time of the Offering.\7\ The participant states that ``it appears I did not benefit from [[Page 72117]] [the Offering] as I should have'' because the price of Holdings Stock decreased following the Offering. The participant inquires whether the exemption should reverse this loss. --------------------------------------------------------------------------- \7\ The participant also submitted the same comment to the Department in D-11851 and D-11852, involving the Sears Notes Offering, 81 FR 29709 (May 12, 2016); and in D-11871 and D-11873, involving the Seritage Growth Offering, 81 FR 29713 (May 12, 2016). --------------------------------------------------------------------------- In response to the participant's comment, Holdings explains that while there have been fluctuations in the price of Holdings Stock during the relevant period, the Independent Fiduciary's decision to sell the Rights generated a positive gain for the Sears Holdings 401(k) Savings Plan Master Trust Stock Fund (the Stock Fund), of $200,557.36, net of fees and expenses. According to Holdings, changes in the value of a publicly-traded company's stock occur due to many factors, including the company's performance. Depending on the measurement period used, Holdings represents that it is possible that a contemporaneous decline in the price of Holdings Stock negated the positive gain for the Stock Fund. However, according to Holdings, the performance of Holdings Stock around the time of the Offering was beyond the control of the Plans and the Independent Fiduciary, and it was independent of any actions such fiduciary took with respect to the Rights received by the Plans. Holdings also represents that it made the decision to commence the Offering, which was a corporate decision, and this decision was not fiduciary in nature. Further, Holdings states that no shareholder, including the Plans, had the ability to prevent the Offering. Therefore, the only decision presented to the shareholders, including the Plans' fiduciaries, was how to dispose of the Rights that were distributed during the Offering. Holdings represents that the Independent Fiduciary's decision to sell the Rights resulted in a significant deposit in the Stock Fund. Holdings' Comment The Applicant states that it originally requested relief from the restrictions of sections 406(a)(1)(A), 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act in the exemption application. However, the Applicant notes that the Department decided not to provide exemptive relief from section 406(a)(1)(A) of the Act in the Notice. The Applicant believes the Plans' acquisition of the Rights to purchase Sears Canada Stock did not involve a prohibited ``sale or exchange, or leasing, of any property between the plan and a party in interest,'' as described in section 406(a)(1)(A) of the Act. The Applicant states that it provided the Rights automatically to all of its shareholders, including the Plans, in a manner similar to a stock dividend. The Applicant also points out that the Department has clarified that it ``does not view an acquisition of stock by means of a stock dividend or stock split as a prohibited transaction,'' in the Preamble to Final Regulation, Fiduciary Responsibility; Statutory Exemption for Certain Acquisitions, Sales, or Leases of Property, 45 FR 51194, 51196 (August 1, 1980). Therefore, the Applicant does not believe an exemption from section 406(a)(1)(A) is required in the subject case. Sears Holdings requests confirmation that the Department shares this view. In response, the Department concurs that exemptive relief from section 406(a)(1)(A) of the Act is not applicable to the Plans' acquisition of the Rights. Technical Correction Section III(c) of the proposed exemption is redesignated as Section III(b) of this exemption. Accordingly, after giving full consideration to the entire record, the Department has decided to grant the exemption. The complete application file (Application Nos. D-11846 and D-11847), including all supplemental submissions received by the Department, is available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, Room N-1515, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210. 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 May 12, 2016, at 81 FR 29705. FOR FURTHER INFORMATION CONTACT: Mr. Scott Ness of the Department, telephone (202) 693-8561. (This is not a toll-free number.) Sears Holdings 401(k) Savings Plan (the Savings Plan) and the Sears Holdings Puerto Rico Savings Plan (the PR Plan) (Collectively, the Plans), Located in Hoffman Estates, IL [Prohibited Transaction Exemption 2016-06; Exemption Application Nos. D-11851 and D-11852] Exemption Section I. Covered Transactions (a) The restrictions of sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) 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,\8\ shall not apply to the acquisition and holding of certain subscription rights (the Rights) issued by Sears Holdings Corporation (Holdings) by the Savings Plan in connection with an offering (the Offering) by Holdings of unsecured obligations issued by Holdings (Notes) and warrants to purchase the common stock of Holdings (Warrants)(together referred to as Units), provided that the conditions as set forth, below, in Section II of this exemption were satisfied for the duration of the acquisition and holding; and --------------------------------------------------------------------------- \8\ For purposes of this exemption, unless indicated otherwise, references to section 406 of the Act should be read to refer as well to the corresponding provisions of section 4975 of the Code. --------------------------------------------------------------------------- (b) The restrictions of sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act \9\ shall not apply to the acquisition and holding of the Rights by the PR Plan in connection with the Offering of the Units by Holdings, provided that the conditions as set forth in Section II of this exemption were satisfied for the duration of the acquisition and holding. --------------------------------------------------------------------------- \9\ The Applicant represents that there is no jurisdiction under Title II of the Act with respect to the PR Plan. Accordingly, the Department is not providing any exemptive relief from section 4975(c)(1)(E) of the Code for the acquisition and holding of the Rights by the PR Plan. --------------------------------------------------------------------------- Section II. Conditions for Relief (a) The receipt of the Rights by the Plans occurred in connection with the Offering, in which all shareholders of the common stock of Holdings (Holdings Stock), including the Plans, were treated in the same manner; (b) The acquisition of the Rights by the Plans resulted from an independent act of Holdings, as a corporate entity; (c) Each shareholder of Holdings Stock, including each of the Plans, received the same proportionate number of Rights based on the number of shares of Holdings Stock held by each such shareholder; (d) All decisions with regard to the holding and disposition of the Rights by the Plans were made by a qualified independent fiduciary (the Independent Fiduciary) within the meaning of 29 CFR 2570.31(j); \10\ --------------------------------------------------------------------------- \10\ 29 CFR 2570.31(j) defines a ``qualified independent fiduciary,'' in relevant part, to mean ``any individual or entity with appropriate training, experience, and facilities to act on behalf of the plan regarding the exemption transaction in accordance with the fiduciary duties and responsibilities prescribed by ERISA, that is independent of and unrelated to any party in interest engaging in the exemption transaction and its affiliates;'' in general, a fiduciary is presumed to be independent ``if the revenues it receives or is projected to receive, within the current federal income tax year from parties in interest (and their affiliates) [with respect] to the transaction are not more than 2% of such fiduciary's annual revenues based upon its prior income tax year. Although the presumption does not apply when the aforementioned percentage exceeds 2%, a fiduciary nonetheless may be considered independent based upon other facts and circumstances provided that it receives or is projected to receive revenues that are not more than 5% within the current federal income tax year from parties in interest (and their affiliates) [with respect] to the transaction based upon its prior income tax year.'' --------------------------------------------------------------------------- [[Page 72118]] (e) The Independent Fiduciary determined that it would be in the interest of the Plans to sell all of the Rights received in the Offering by the Plans in blind transactions on the NASDAQ Global Select Market; (f) No brokerage fees, commissions, subscription fees, or other charges were paid by the Plans with respect to the acquisition and holding of the Rights, or were paid to any affiliate of Holdings or the Independent Fiduciary, with respect to the sale of the Rights. Section III. Definitions (a) The term ``affiliate'' of a person includes: (1) Any person directly or indirectly through one or more intermediaries, controlling, controlled by, or under common control with such person; (2) Any officer, director, partner, employee, or relative, as defined in section 3(15) of the Act, of such person; and (3) Any corporation or partnership of which such person is an officer, director, partner, or employee. (b) The term ``control'' means the power to exercise a controlling influence over the management or policies of a person other than an individual. Effective Date: This exemption is effective for the period beginning October 30, 2014, and ending November 18, 2014 (the Offering Period). Written Comments The Department invited all interested persons to submit written comments and/or requests for a public hearing with respect to the notice of proposed exemption (the Notice), published on May 12, 2016, at 81 FR 29709. All comments and requests for hearing were due by July 3, 2016. During the comment period, the Department received two comments from interested persons and no requests for a public hearing. A Savings Plan participant submitted a written comment, and Holdings requested a clarification to the Notice. Furthermore, during the comment period, the Department received several phone inquiries that generally concerned matters outside the scope of the exemption. Participant's Comment In his comment letter of June 20, 2016, the participant represents that he is a Holdings' shareholder, who held a balance in the Savings Plan at the time of the Offering.\11\ The participant states that ``it appears I did not benefit from [the Offering] as I should have'' because the price of Holdings Stock decreased following the Offering. The participant inquires whether the exemption should reverse this loss. --------------------------------------------------------------------------- \11\ The participant also submitted the same comment to the Department in D-11846 and D-11847, involving the Sears Canada Offering, 81 FR 29705 (May 12, 2016); and in D-11871 and D-11873, involving the Seritage Growth Offering, 81 FR 29713 (May 12, 2016). --------------------------------------------------------------------------- In response to the participant's comment, Holdings explains that while there have been fluctuations in the price of Holdings Stock during the relevant period, the Independent Fiduciary's decision to sell the Rights generated a positive gain for the Sears Holdings 401(k) Savings Plan Master Trust Stock Fund (the Stock Fund), of $3,637,509.54, net of fees and expenses. According to Holdings, changes in the value of a publicly-traded company's stock occur due to many factors, including the company's performance. Depending on the measurement period used, Holdings represents that it is possible that a contemporaneous decline in the price of Holdings Stock negated the positive gain for the Stock Fund. However, according to Holdings, the performance of Holdings Stock around the time of the Offering was beyond the control of the Plans and the Independent Fiduciary, and it was independent of any actions such fiduciary took with respect to the Rights received by the Plans. Holdings also represents that it made the decision to commence the Offering, which was a corporate decision, and this decision was not fiduciary in nature. Further, Holdings states that no shareholder, including the Plans, had the ability to prevent the Offering. Therefore, the only decision presented to the shareholders, including the Plans' fiduciaries, was how to dispose of the Rights that were distributed during the Offering. Holdings represents that the Independent Fiduciary's decision to sell the Rights resulted in a significant deposit in the Stock Fund. Holdings' Comment The Applicant states that it originally requested relief from the restrictions of sections 406(a)(1)(A), 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act in the exemption application. However, the Applicant notes that the Department decided not to provide exemptive relief from section 406(a)(1)(A) of the Act in the Notice. The Applicant believes the Plans' acquisition of the Rights to purchase Sears Notes and Warrants did not involve a prohibited ``sale or exchange, or leasing, of any property between the plan and a party in interest,'' as described in section 406(a)(1)(A) of the Act. The Applicant states that it provided the Rights automatically to all of its shareholders, including the Plans, in a manner similar to a stock dividend. The Applicant also points out that the Department has clarified that it ``does not view an acquisition of stock by means of a stock dividend or stock split as a prohibited transaction,'' in the Preamble to Final Regulation, Fiduciary Responsibility; Statutory Exemption for Certain Acquisitions, Sales, or Leases of Property, 45 FR 51194, 51196 (August 1, 1980). Therefore, the Applicant does not believe an exemption from section 406(a)(1)(A) is required in the subject case. Sears Holdings requests confirmation that the Department shares this view. In response, the Department concurs that exemptive relief from section 406(a)(1)(A) of the Act is not applicable to the Plans' acquisition of the Rights. Technical Correction Section III(c) of the proposed exemption is redesignated as Section III(b) of this exemption. Accordingly, after giving full consideration to the entire record, the Department has decided to grant the exemption. The complete application file (Application Nos. D-11851 and D-11852), including all supplemental submissions received by the Department, is available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, Room N-1515, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210. 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 May 12, 2016, at 81 FR 29709. FOR FURTHER INFORMATION CONTACT: Mr. Erin Hesse of the Department, telephone (202) 693-8546. (This is not a toll-free number.) Liberty Media 401(k) Savings Plan (the Plan), Located in Englewood, CO [Prohibited Transaction Exemption 2016-07; Exemption Application No. D- 11858] Exemption Section I. Covered Transactions The restrictions of sections 406(a)(1)(E), 406(a)(2), and 407(a)(1)(A) [[Page 72119]] of the Act shall not apply to: (1) The acquisition by the Plan of certain stock subscription rights (the Rights) to purchase shares of Liberty Broadband Series C common stock (LB Series C Stock), in connection with a rights offering (the Rights Offering) held by Liberty Broadband Corporation (Liberty Broadband), a party in interest with respect to the Plan; and (2) the holding of the Rights by the Plan during the subscription period of the Rights Offering, provided that the conditions described in Section II below have been met. Section II. Conditions for Relief (a) The Plan's acquisition of the Rights resulted solely from an independent corporate act of Liberty Broadband; (b) All holders of Liberty Broadband Series A common stock and Liberty Broadband Series C common stock (collectively, the LB Stock), including the Plan, were issued the same proportionate number of Rights based on the number of shares of LB Stock held by each such shareholder; (c) For purposes of the Rights Offering, all holders of LB Stock, including the Plan, were treated in a like manner; (d) The acquisition of the Rights by the Plan was made in a manner that was consistent with provisions of the Plan for the individually- directed investment of participant accounts; (e) The Liberty Media 401(k) Savings Plan Administrative Committee (the Committee) directed the Plan trustee to sell the Rights on the NASDAQ Global Select Market, in accordance with Plan provisions that precluded the Plan from acquiring additional shares of LB Stock; (f) The Committee did not exercise any discretion with respect to the acquisition and holding of the Rights; and (g) The Plan did not pay any fees or commissions in connection with the acquisition or holding of the Rights, and did not pay any commissions to Liberty Broadband, Liberty Media Corporation, TruePosition, Inc., or any affiliates of the foregoing in connection with the sale of the Rights. Effective Date: This exemption is effective for the period beginning on December 15, 2014, the date that the Plan received the Rights, until December 17, 2014, the date the Rights were sold by the Plan on the NASDAQ Global Select Market. Written Comments The Department invited all interested persons to submit written comments and/or requests for a public hearing with respect to the notice of proposed exemption, published on April 28, 2016, at 81 FR 25438. Liberty Media completed delivery of the notice of proposed exemption and accompanying notice to interested persons on May 3, 2016. However, the Department determined that certain elements of the notice of proposed exemption as published in the Federal Register were omitted from the materials sent to interested persons. Liberty Media represented, under penalty of perjury, that a corrected version of the notice of proposed exemption was provided to all interested persons on May 27, 2016. All comments and requests for hearing were due under the corrected version of the notice by June 26, 2016, 30 days following the date on which Liberty Media certified delivery was completed. During the comment period, the Department received no comments and no requests for a hearing from interested persons. Accordingly, after giving full consideration to the entire record, the Department has decided to grant the exemption. The complete application file (Application No. D-11858), including all supplemental submissions received by the Department, is available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, Room N-1515, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210. 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 April 28, 2016, at 81 FR 25438. FOR FURTHER INFORMATION CONTACT: Mr. Scott Ness of the Department, telephone (202) 693-8561. (This is not a toll-free number.) Baxter International Inc. (Baxter or the Applicant), Located in Deerfield, IL [Prohibited Transaction Exemption 2016-08; Exemption Application No. D- 11866] Exemption Section I. Transaction The restrictions of sections 406(a)(1)(A) and (D) and sections 406(b)(1) and (2) of ERISA and sections 4975(c)(1)(A), (D), and (E) of the Code \12\ shall not apply to the contribution of publicly traded common stock of Baxalta (the Contributed Stock) by Baxter (the Contribution) to the Baxter International Inc. and Subsidiaries Pension Plan (the Plan), provided: --------------------------------------------------------------------------- \12\ 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. --------------------------------------------------------------------------- (a) Fiduciary Counselors Inc. (the Independent Fiduciary) will represent the interests of the Plan, the participants, and beneficiaries with respect to the Contribution, including but not limited to, taking the following actions: (i) Determining whether the Contribution is in the interests of the Plan and of its participants and beneficiaries, and is protective of the rights of participants and beneficiaries of the Plan; (ii) Determining whether and on what terms the Contribution should be accepted by the Plan; (iii) If the Contribution is accepted by the Plan, establishing and administering the process (subject to such modifications as the Independent Fiduciary may make from time to time) for liquidating the Contributed Stock, as is prudent under the circumstances; (iv) Determining the fair market value of the Contributed Stock as of the date of the Contribution; (v) Monitoring the Contribution and holding of Contributed Stock on a continuing basis and taking all appropriate actions necessary to safeguard the interests of the Plan; and (vi) If the Contribution is accepted by the Plan, voting proxies and responding to tender offers with respect to the Contributed Stock held by the Plan; (b) Solely for purposes of determining the Plan's minimum funding requirements (as determined under section 412 of the Code), adjusted funding target attainment percentage (AFTAP) (as determined under Treas. Reg. section 1.436-1(j)(1)), and funding target attainment percentage (as determined under section 430(d)(2) of the Code), the Plan's actuary (the Actuary) will not count as a contribution to the Plan any shares of Contributed Stock that have not been liquidated; (c) For purposes of determining the amount of any Contribution, the Contributed Stock shall be deemed contributed only at the time it is sold, equal to the lesser of: (1) The proceeds from the sale of such Contributed Stock; or (2) the value of such Contributed Stock on the date of the initial contribution as determined by the Independent Fiduciary; (d) The Contributed Stock represents no more than 20% of the fair market value of the total assets of the Plan at the time it is contributed to the Plan; (e) The Plan pays no commissions, costs, or other expenses in connection with the Contribution, holding, or subsequent sale of the Contributed [[Page 72120]] Stock, and any such expenses paid by Baxter will not be treated as a contribution to the Plan; (f) Baxter makes cash contributions to the Plan to the extent that the cumulative proceeds from the sale of the Contributed Stock at each contribution due date (determined under section 303(j) of ERISA) are less than the cumulative cash contributions Baxter would have been required to make to the Plan, in the absence of the Contribution. Such cash contributions shall be made until all of the Contributed Stock is sold by the Plan; and (g) Baxter contributes to the Plan cash amounts needed for the Plan to attain an AFTAP (determined under Treas. Reg. section 1.436-1(j)(1)) of at least 80% as of the first day of each plan year during which the Plan holds Contributed Stock, as determined by the Actuary, without taking into account any unsold Contributed Stock as of April 1 of the plan year. Effective Date: This exemption is effective as of May 9, 2016, the date the Contribution was received by the Plan. Written Comments The Department invited all interested persons to submit written comments and/or requests for a public hearing with respect to the notice of proposed exemption, published on April 28, 2016, at 81 FR 25441. All comments and requests for hearing were due by June 3, 2016. During the comment period, the Department received one substantive written comment, one substantive phone comment, and a variety of written and telephonic inquiries requesting information outside the scope of the proposed exemption. The Department did not receive any requests for a hearing from interested persons. A description of the comments and the Applicant's responses is below. Participant Comments and Applicant's Responses Among other things, the commenter expressed concern about exposing participants to additional risk from holding Baxalta stock in a transaction intended to benefit Baxter. The Applicant responds that participants in the Plan will not be subject to any additional risk from holding Baxalta stock because the value of the Baxalta stock at the time of the contribution was approximately $700 million, and the plan subsequently sold the stock for approximately $760 million, under the direction of the Independent Fiduciary. Accordingly, the Applicant represents that this transaction added about $760 million in cash to the pension plan. Furthermore, the Applicant notes that if Baxter had sold the stock and then put the cash into the Plan, it would have been required to pay taxes on the proceeds of the sale, which would have reduced the amount available to be contributed to the plan by approximately $266 million. Putting the stock into the Plan first and then selling the stock under the supervision of the Independent Fiduciary yielded significantly more money for the Plan and its participants. The commenter also stated that the contribution of the Baxalta Stock would exceed the Plan's allocation for large cap stocks. In response, the Applicant explains that the Baxter Investment Committee has amended the investment policy to permit the 24% target allocation to be exceeded temporarily to allow the plan to accept the contribution of the Baxalta stock, which as described above was sold by the plan shortly after the contribution. Thereafter, the proceeds from the sale of the Baxalta stock will be invested in accordance with the investment policy. Finally, the commenter expressed concern about potential IRS challenges to the transaction and litigation risk to the Plan from Baxalta shareholders if the stock price was depressed as a result of this transaction. The Applicant notes that prior to seeking this individual exemption, Baxter obtained a ruling from the IRS that specifically allows it to contribute the Baxalta stock to the Plan (a copy of which was also provided to the Department as part of the application process) on a tax-free basis. The Applicant further explains that, if for any reason there were an IRS challenge, it would be Baxter's responsibility to respond to the IRS challenge, and it would not affect the funding of the Plan. Similarly, according to the Applicant, there is very little risk of litigation from Baxalta shareholders because during the spin-off, shareholders were made aware that such a disposition of Baxalta stock was possible and the Independent Fiduciary who has been retained to sell the Baxalta stock on behalf of the Plan is required under the terms of its agreement to sell the stock in such a manner as to minimize the impact of the sales on the market for Baxalta shares. The Department received one other comment from a plan participant who inquired into Baxter's financial ability to continue funding the Plan after spinning off half the company into Baxalta. The Applicant represents that Baxter does not anticipate that the spin-off of Baxalta will reduce Baxter's financial ability to continue funding the Plan. Although Baxter is now a smaller company, the Plan is also slightly smaller, because the portion of the Plan that benefits Baxalta employees was transferred to Baxalta, and Baxalta is responsible for funding that portion of the Plan (a new and distinct plan) after the spin-off. Finally, the Applicant states that the proposed exemption, if approved, would allow Baxter to make a one-time contribution to the plan of approximately $760 million. This contribution increased the assets of the Plan by over 20%, significantly improving the funded status of the Plan. The Applicant explains that this means that Baxter's cost of funding the Plan in the future will be reduced. Applicant's Comment The Applicant also submitted the Final Report from the Independent Fiduciary (the Final Report), detailing the Contribution and subsequent liquidation of the Baxalta Stock. Fiduciary Counselors represents that on May 9, 2016, State Street, the Plan's trustee, received the Baxalta Contribution from Baxter. The Final Report provides that, while the Baxalta Contribution skewed the Large Cap weighting above the targeted 24.0%, this was a temporary deviation and the allocation will return to pre-Baxalta Contribution levels once the Baxalta Stock is sold. Fiduciary Counselors started liquidating the Baxalta Stock on May 10, 2016, and completed the liquidation on June 2, 2016. The Plan realized $762,118,481.31 in gross proceeds. The Plan incurred $188,070.01 of fees and expenses as part of the liquidation program, with a net gain to the Plan of $761,930,411.30. Baxter reimbursed the Plan for such fees and expenses as well as additional portfolio accounting fees ($208.33), custody fees ($2,879.49), and trading fees ($203.00) for a total reimbursement to the Plan of $191,360.83. After giving full consideration to the entire record, including all comments from interested persons and the responses from the Applicant, the Department has decided to grant the exemption, as described above. The complete application file (Application No. D-11866) is available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, Room N-1515, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210. 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 April 28, 2016, at 81 FR 25441. [[Page 72121]] FOR FURTHER INFORMATION CONTACT: Mr. Erin S. Hesse of the Department, telephone (202) 693-8546. (This is not a toll-free number.) Sears Holdings 401(k) Savings Plan (the Savings Plan) and the Sears Holdings Puerto Rico Savings Plan (the PR Plan) (Together, the Plans), Located in Hoffman Estates, IL [Prohibited Transaction Exemption 2016-09; Exemption Application Nos. D-11871 and D-11872, respectively] Exemption Section I. Transactions The restrictions of sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) 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,\13\ shall not apply, effective for the period beginning June 11, 2015, and ending July 2, 2015, to the acquisition and holding by the Savings Plan of certain subscription rights (the Rights) to purchase shares of common stock (Seritage Growth Stock) in Seritage Growth Properties (Seritage Growth), in connection with an offering (the Offering) by Sears Holdings Corporation (Holdings or the Applicant) of Seritage Growth Stock, provided that the conditions, as set forth below, were satisfied for the duration of the acquisition and holding; and --------------------------------------------------------------------------- \13\ 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. --------------------------------------------------------------------------- (b) The restrictions of sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act \14\ shall not apply, effective for the period beginning June 11, 2015, and ending July 2, 2015, to the acquisition and holding of the Rights by the PR Plan in connection with the Offering of Seritage Growth Stock by Holdings, provided that the conditions, as set forth below, were satisfied for the duration of the acquisition and holding. --------------------------------------------------------------------------- \14\ The Applicant represents that there is no jurisdiction under Title II of the Act with respect to the PR Plan because the PR Plan fiduciaries have not made an election under section 1022(i)(2) of the Act, whereby the PR Plan would be treated as a trust created and organized in the United States for purposes of tax qualification under section 401(a) of the Code. Accordingly, the Department is not providing exemptive relief from section 4975(c)(1)(E) of the Code for the acquisition and holding of the Rights by the PR Plan. --------------------------------------------------------------------------- Section II. Conditions (a) The receipt of the Rights by the Plans occurred in connection with the Offering, in which all shareholders of the common stock of Holdings (Holdings Stock), including the Plans, were treated in the same manner; (b) The acquisition of the Rights by the Plans resulted solely from an independent act of Holdings, as a corporate entity; (c) Each shareholder of Holdings Stock, including each of the Plans, received the same proportionate number of Rights based on the number of shares of Holdings Stock held by each such shareholder; (d) All decisions with regard to the holding and disposition of the Rights by the Plans were made by a qualified independent fiduciary (the Independent Fiduciary) within the meaning of 29 CFR 2570.31(j); \15\ --------------------------------------------------------------------------- \15\ 29 CFR 2570.31(j) defines a ``qualified independent fiduciary,'' in relevant part, to mean ``any individual or entity with appropriate training, experience, and facilities to act on behalf of the plan regarding the exemption transaction in accordance with the fiduciary duties and responsibilities prescribed under the Act, that is independent of and unrelated to any party in interest engaging in the exemption transaction and its affiliates;'' in general, a fiduciary is presumed to be independent ``if the revenues it receives or is projected to receive, within the current federal income tax year from parties in interest (and their affiliates) [with respect] to the transaction are not more than 2% of such fiduciary's annual revenues based upon its prior income tax year. Although the presumption does not apply when the aforementioned percentage exceeds 2%, a fiduciary nonetheless may be considered independent based upon other facts and circumstances provided that it receives or is projected to receive revenues that are not more than 5% within the current federal income tax year from parties in interest (and their affiliates) [with respect] to the transaction based upon its prior income tax year.'' --------------------------------------------------------------------------- (e) The Independent Fiduciary determined that it would be in the interest of the Plans to sell all of the Rights received in the Offering by the Plans in blind transactions on the New York Stock Exchange; and (f) No brokerage fees, commissions, subscription fees, or other charges were paid by the Plans with respect to the acquisition and holding of the Rights; or were paid to any affiliate of the Independent Fiduciary or Holdings, in connection with the sale of the Rights. Effective Date: This exemption is effective for the Offering period, beginning June 11, 2015, and ending July 2, 2015. Written Comments In the notice of proposed exemption (the Notice), the Department invited all interested persons to submit written comments within 52 days of the publication, on May 12, 2016, of the Notice in the Federal Register. All comments were due by July 3, 2016. During the comment period, the Department received three comments from interested persons and no requests for a public hearing. Two Savings Plan participants submitted written comments. One participant supported the granting of the exemption, while the other did not. The third comment, which was submitted by the Applicant, requests several minor revisions and clarifications to the Notice. Following is a discussion of the comment received by the Department from the objecting participant, and the one submitted by the Applicant. Also presented are the responses made by the Applicant to the participant's comment, as well as the Department's responses to the Applicant's comment. Participant's Comment In his comment letter of June 20, 2016, the participant represents that he is a Holdings' shareholder, who held a balance in the Savings Plan at the time of the Offering.\16\ The participant states that ``it appears I did not benefit from [the Offering] as I should have'' because the price of Seritage Growth Stock decreased following the Offering. The participant inquires whether the exemption should reverse this loss. --------------------------------------------------------------------------- \16\ The participant also submitted the same comment to the Department in D-11851 and D-11852, involving the Sears Notes Offering, 81 FR 29709 (May 12, 2016); and in D-11846 and D-11847 involving the Sears Canada Offering, 81 FR 29705 (May 12, 2016). --------------------------------------------------------------------------- In response to the participant's comment, the Applicant explains that while there have been fluctuations in the price of Holdings Stock during the relevant period, the Independent Fiduciary's decision to sell the Rights generated a positive gain for the Sears Holdings 401(k) Savings Plan Master Trust Stock Fund (the Stock Fund), of $4,106,921.19, net of fees and expenses. According to the Applicant, changes in the value of a publicly-traded company's stock occur due to many factors, including the company's performance. Depending on the measurement period used, the Applicant represents that it is possible that a contemporaneous decline in the price of Holdings Stock negated the positive gain for the Stock Fund. However, according to the Applicant, the performance of Holdings Stock around the time of the Offering was beyond the control of the Plans and the Independent Fiduciary. It was also independent of any actions such fiduciary took with respect to the Rights received by the Plans. The Applicant also represents that Holdings made the decision to commence the Offering, which was a corporate decision, and was not fiduciary in nature. Further, the Applicant explains that no shareholder, including the Plans, had the ability to [[Page 72122]] prevent the Offering. Therefore, the only decision presented to the shareholders, including the Plans' fiduciaries, was how to dispose of the Rights that were distributed during the Offering. Because the Independent Fiduciary decided to sell the Rights, the Applicant represents that this event resulted in a significant deposit in the Stock Fund. Applicant's Comment 1. Scope of Exemptive Relief. The Applicant states that it originally requested relief from the restrictions of sections 406(a)(1)(A), 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act in the exemption application. However, the Applicant explains that the Department decided not to provide exemptive relief from section 406(a)(1)(A) of the Act in the Notice. The Applicant believes the Plans' acquisition of the Rights to purchase Seritage Growth Stock did not involve a prohibited ``sale or exchange, or leasing, of any property between the plan and a party in interest,'' as described in section 406(a)(1)(A) of the Act. The Applicant states that it provided the Rights automatically to all of its shareholders, including the Plans, in a manner similar to a stock dividend. The Applicant also points out that the Department has clarified that it ``does not view an acquisition of stock by means of a stock dividend or stock split as a prohibited transaction,'' in the Preamble to Final Regulation, Fiduciary Responsibility; Statutory Exemption for Certain Acquisitions, Sales, or Leases of Property, 45 FR 51194, 51196 (August 1, 1980). Therefore, the Applicant does not believe an exemption from section 406(a)(1)(A) is required in the subject case. Therefore, the Applicant requests confirmation that the Department shares this view. The Department concurs that exemptive relief from section 406(a)(1)(A) of the Act is not applicable to the Plans' acquisition of the Rights and that the scope of relief set forth in Section I of the proposed exemption, and this exemption, is appropriate for the transactions covered herein. 2. Purchase of Units in Stock Funds. Page 29714 of the Notice states that the Plans allow participants to ``purchase units in certain stock funds which invest in Holdings Stock.'' The Applicant wishes to clarify that only one investment option in the Plans exists for the purpose of investment in Holdings Stock. The Stock Fund is held in the Sears Holdings 401(k) Savings Plan Master Trust, and participants in both the Savings Plan and the PR Plan own Holdings Stock through this one Stock Fund. The Department notes this clarification to the Notice. 3. Entities Adopting the Savings Plan. Page 29714 of the Notice states that ``Sears, Roebuck and Co. (Sears Roebuck) and all of its wholly-owned (direct and indirect) subsidiaries (except Lands' End Inc. (Lands' End), Sears de Puerto Rico, Inc., Kmart Holding Corporation (Kmart), and its wholly-owned (direct and indirect) subsidiaries (excluding employees residing in Puerto Rico), and Sears Holdings Management Corporation, with respect to certain employees, have adopted the Savings Plan and are employers under such plan.'' The Applicant clarifies that Kmart Holding Corporation and its wholly-owned subsidiaries have adopted the Savings Plan and are employers under such plan (excluding employees residing in Puerto Rico). Also, the Applicant clarifies that employees of Sears de Puerto Rico, Inc. who reside in the United States participate in the Savings Plan. The Department notes this clarification to the Notice. 4. PR Plan and Holdings Stock. Page 29715 of the Notice states that the PR Plan held ``39,782,55'' shares as of the record date. The Applicant clarifies that the number of shares held by the PR Plan has a misplaced decimal mark and should be revised to ``39,782.55'' shares. The Department notes this clarification to the Notice. 5. Holdings Description. Page 29715 of the Notice states that Holdings ``is a retail merchant with full-line and specialty retail stores in,'' among other places, Canada. The Applicant points out that in October and November of 2014, Holdings entered into a series of transactions, including a rights offering, to de-consolidate Sears Canada Inc. As a result of these transactions, Sears Holdings no longer maintains a controlling interest in Sears Canada Inc. and no longer itself, maintains stores in Canada. The Department notes this clarification to the Notice. 6. Role of the Independent Fiduciary. Page 29716 of the Notice states that the Plans' Independent Fiduciary, Evercore Trust Company N.A., conducted a due diligence process evaluating the rights offering, including discussions and correspondence, that enabled it ``to improve certain elements related to the Offering.'' The Applicant explains that, in pertinent part, Evercore's Independent Fiduciary Report states that its due diligence process enabled it to ``better understand a number of important elements related to the Rights Offering.'' The Department notes this clarification to the Notice. Accordingly, after giving full consideration to the entire record, the Department has decided to grant the exemption. The complete application file (Exemption Application Nos. D-11871 and D-11872) and the written comments are available for public inspection in the Public Disclosure Room of the Employee Benefits Security Administration, Room N-1515, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210. For a more complete statement of the facts and representations supporting the Department's decision to grant this exemption, refer to the Notice published in the Federal Register on May 12, 2016 at 81 FR 29713. FOR FURTHER INFORMATION CONTACT: Ms. Blessed Chuksorji-Keefe of the Department, telephone (202) 693-8567. (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) 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 the application accurately describes all material terms of the transaction which is the subject of the exemption. [[Page 72123]] Signed at Washington, DC, this 14th day of October 2016. Lyssa E. Hall, Director of Exemption Determinations, Employee Benefits Security Administration, U.S. Department of Labor. [FR Doc. 2016-25279 Filed 10-18-16; 8:45 am] BILLING CODE 4510-29-P
![72114 Federal Register / Vol. 81, No. 202 / Wednesday, October 19, 2016 / Notices
prima facie case. Accordingly, I will registration desk. Please bring photo 2016–07, Liberty Media 401(k) Savings
deny Respondent’s application. identification and allow extra time prior Plan, D–11858; 2016–08, Baxter
to the meeting. International Inc., D–11866; and 2016–
Order Anyone requiring special 09, Sears Holdings 401(k) Savings Plan
Pursuant to the authority vested in me accommodations should notify Mr. and the Sears Holdings Puerto Rico
by 21 U.S.C. 823(f) and 28 CFR 0.100(b), McCreary at least seven (7) days in Savings Plan, D–11871 and D–11872.
I order that the application of Edge advance of the meeting.
Pharmacy, L.L.C., for a DEA Certificate SUPPLEMENTARY INFORMATION: A notice
of Registration as a retail pharmacy, be, Purpose was published in the Federal Register of
and it hereby is, denied. This Order is The GAC will act as the focal point for the pendency before the Department of
effectively immediately. justice information systems integration a proposal to grant such exemption. The
Dated: October 11, 2016. activities in order to facilitate the notice set forth a summary of facts and
Chuck Rosenberg,
coordination of technical, funding, and representations contained in the
legislative strategies in support of the application for exemption and referred
Acting Administrator.
Administrations justice priorities. interested persons to the application for
[FR Doc. 2016–25226 Filed 10–18–16; 8:45 am] The GAC will guide and monitor the a complete statement of the facts and
BILLING CODE 4410–09–P development of the global information representations. The application has
sharing concept. It will advise the
been available for public inspection at
Assistant Attorney General, OJP; the
DEPARTMENT OF JUSTICE the Department in Washington, DC. The
Attorney General; the President
(through the Attorney General); and notice also invited interested persons to
Office of Justice Programs submit comments on the requested
local, state, tribal, and federal
[OJP (OJP) Docket No. 1728] policymakers in the executive, exemption to the Department. In
legislative, and judicial branches. The addition the notice stated that any
Meeting of the Global Justice GAC will also advocate for strategies for interested person might submit a
Information Sharing Initiative Federal accomplishing a global information written request that a public hearing be
Advisory Committee sharing capability. held (where appropriate). The applicant
AGENCY: Office of Justice Programs, Interested persons whose registrations has represented that it has complied
Justice. have been accepted may be permitted to with the requirements of the notification
ACTION: Notice of meeting. participate in the discussions at the to interested persons. No requests for a
discretion of the meeting chairman and hearing were received by the
SUMMARY: This is an announcement of a with approval of the DFE. Department. Public comments were
meeting of the Global Justice received by the Department as described
J. Patrick McCreary,
Information Sharing Initiative (Global) in the granted exemption.
Federal Advisory Committee (GAC) to Global DFE, Bureau of Justice Assistance,
Office of Justice Programs. The notice of proposed exemption
discuss the Global Initiative, as
described at www.it.ojp.gov/global. [FR Doc. 2016–25217 Filed 10–18–16; 8:45 am] was issued and the exemption is being
BILLING CODE 4410–18–P granted solely by the Department
DATES: The meeting will take place on
because, effective December 31, 1978,
Tuesday, November 29, 2016, from 9:00
section 102 of Reorganization Plan No.
a.m. to 4:00 p.m. ET, and Wednesday,
November 30, 2016, from 9:00 a.m. to DEPARTMENT OF LABOR 4 of 1978, 5 U.S.C. App. 1 (1996),
11:30 a.m. ET. transferred the authority of the Secretary
Employee Benefits Security of the Treasury to issue exemptions of
ADDRESSES: The meeting will take place Administration the type proposed to the Secretary of
at the Office of Justice Programs (in the
Main Conference Room), 810 7th Street, Labor.
Exemptions From Certain Prohibited
Washington, DC 20531; Phone: (202) Transaction Restrictions Statutory Findings
514–2000 (Note: This is not a toll-free
number). AGENCY: Employee Benefits Security In accordance with section 408(a) of
Administration, Labor. the Act and/or section 4975(c)(2) of the
FOR FURTHER INFORMATION CONTACT: J.
ACTION: Grant of Individual Exemptions. Code and the procedures set forth in 29
Patrick McCreary, Global Designated
Federal Employee (DFE), Bureau of CFR part 2570, subpart B (76 FR 66637,
SUMMARY: This document contains
Justice Assistance, Office of Justice 66644, October 27, 2011) 1 and based
exemptions issued by the Department of
Programs, 810 7th Street, Washington, Labor (the Department) from certain of upon the entire record, the Department
DC 20531; Phone: (202) 616–0532 (Note: the prohibited transaction restrictions of makes the following findings:
This is not a toll-free number); Email: the Employee Retirement Income (a) The exemption is administratively
James.P.McCreary@usdoj.gov. Security Act of 1974 (ERISA or the Act) feasible;
SUPPLEMENTARY INFORMATION: This and/or the Internal Revenue Code of (b) The exemption is in the interests
meeting is open to the public. Due to 1986 (the Code). This notice includes of the plan and its participants and
security measures, however, members of the following: 2016–03, The Michael T. beneficiaries; and
the public who wish to attend this Sewell, M.D., P.S.C. Profit Sharing Plan,
meeting must register with Mr. J. Patrick D–11813; 2016–04, Plumbers’ Pension (c) The exemption is protective of the
sradovich on DSK3GMQ082PROD with NOTICES
McCreary at the above address at least Fund, Local 130, U.A., D–11822; 2016– rights of the participants and
seven (7) days in advance of the 05, Sears Holdings 401(k) Savings Plan beneficiaries of the plan.
meeting. Registrations will be accepted and the Sears Holdings Puerto Rico
1 The Department has considered exemption
on a space available basis. Access to the Savings Plan, D–11846 and D–11847;
applications received prior to December 27, 2011
meeting will not be allowed without 2016–06, Sears Holdings 401(k) Savings under the exemption procedures set forth in 29 CFR
registration. All attendees will be Plan and the Sears Holdings Puerto Rico part 2570, subpart B (55 FR 32836, 32847, August
required to sign in at the meeting Savings Plan, D–11851 and D–11852; 10, 1990).
VerDate Sep<11>2014 17:39 Oct 18, 2016 Jkt 241001 PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 E:\FR\FM\19OCN1.SGM 19OCN1](https://thefederalregister.org/doc/81_FR_72316/page/1.svg)
![Federal Register / Vol. 81, No. 202 / Wednesday, October 19, 2016 / Notices 72115
The Michael T. Sewell, M.D., P.S.C. 11813), including all supplemental Sale: (1) Determine, among other things,
Profit Sharing Plan (the Plan), Located submissions received by the whether it is in the interest of the Plan
in Bardstown, Kentucky Department, is available for public to proceed with the Sale; (2) review and
[Prohibited Transaction Exemption 2016–03;
inspection in the Public Disclosure approve the methodology used by the
Exemption Application No. D–11813] Room of the Employee Benefits Security Independent Appraiser in the
Administration, Room N–1515, U.S. independent appraisal report (the
Exemption Department of Labor, 200 Constitution Appraisal Report) that is being relied
The restrictions of section Avenue NW., Washington, DC 20210. upon; and (3) ensure that such
406(a)(1)(A) and (D) and section For a more complete statement of the methodology is applied by the
406(b)(1) and (b)(2) of the Act and the facts and representations supporting the Independent Appraiser in determining
sanctions resulting from the application Department’s decision to grant this the fair market value of the Properties
of section 4975, by reason of section exemption, refer to the Notice published on the date of the Sale; and
4975(c)(1)(A), (D) and (E) of the Code,2 in the Federal Register on April 28, (f) The Sale is not part of an
shall not apply to the cash sale (the 2016 at 81 FR 25433. agreement, arrangement, or
Sale) by the individually-directed FOR FURTHER INFORMATION CONTACT: Mrs.
understanding designed to benefit the
account (the Account) in the Plan of Blessed Chuksorji-Keefe of the Union.
Michael T. Sewell, M.D. (Dr. Sewell) of Department, telephone (202) 693–8567. Written Comments
a parcel of unimproved real property (This is not a toll-free number.) The Department invited all interested
(the Property), to Dr. Sewell, a party in persons to submit written comments
Plumbers’ Pension Fund, Local 130,
interest with respect to the Plan; and/or requests for a public hearing
U.A. (the Plan, or the Applicant),
provided that the following conditions with respect to the notice of proposed
Located in Chicago, IL
are satisfied: exemption, published on April 28, 2016,
(a) The Sale is a one-time transaction [Prohibited Transaction Exemption 2016–04;
at 81 FR 25435. All comments and
for cash; Exemption Application No. D–11822]
requests for a hearing were due by May
(b) The sales price for the Property is Exemption 28, 2016.
the greater of: $916,501; or the sum of During the comment period, the
the fair market value of the Property, as The restrictions of section
Department received one written
established by a qualified independent 406(a)(1)(A) and (D) of the Act and the
comment and no requests for a public
appraiser, and the fair market value of sanctions resulting from the application
hearing. In a comment letter, dated May
timber on the Property, as determined of section 4975 of the Code, by reason
19, 2016, a Plan participant suggests
by a qualified independent timber of section 4975(c)(1)(A) and (E) of the
that the Sale price of the Properties be
appraiser, in separate, updated Code,3 shall not apply to the proposed
no less than the average of three
appraisals reports on the date of the sale (the Sale) of two commercial
different appraisals of the Properties,
Sale; buildings (the Properties), by the Plan to
rather than based on a single appraisal.
(c) The Account pays no real estate the Plumbers’ Pension Fund, Local 130,
The commenter asserts that this is the
fees or commissions in connection with U.A. (the Union), a party in interest
standard practice for bids and should be
the Sale; with respect to the Plan, provided that
used in this exemption because it is fair
(d) The terms of the Sale are no less the following conditions are satisfied:
and equitable.
favorable to the Account than the terms (a) The Sale is a one-time transaction
The Department acknowledges the
the Account would receive under for cash;
participant’s comment, but wishes to
similar circumstances in an arm’s length (b) The price paid by the Union to the
emphasize that the procedures (the
transaction with an unrelated party; and Plan is equal to the greater of: (1)
Procedures) governing the filing and the
(e) Michael T. Sewell, M.D., P.S.C. $1,640,000, or (2) the fair market value
processing of administrative exemptions
bears 100% of the costs of obtaining this of the Properties, as determined by a
from the prohibited transaction
exemption. qualified independent appraiser (the
provisions of the Act, as amended, and
Independent Appraiser) as of the date of
Written Comments the Code, as amended, (29 CFR 2570,
the Sale;
October 27, 2011), do not require that an
In the notice of proposed exemption (c) The Plan does not pay any
applicant obtain multiple appraisals of
(the Notice), the Department invited all appraisal fees, real estate fees,
a property from different qualified
interested persons to submit written commissions, costs or other expenses in
independent appraisers. Specifically,
comments and/or requests for a public connection with the Sale;
section 2570.34(c)(4) of the Procedures
hearing within 30 days of the (d) The Plan trustees appointed by the
refers to the preparation of a single
publication, on April 28, 2016, of the Union (the Union Trustees) recuse
appraisal report for a property by a
Notice in the Federal Register. All themselves from: (1) Discussions and
qualified independent appraiser, who is
comments were due by May 28, 2016. voting with respect to the Plan’s
acting solely on behalf of the affected
During the comment period, the decision to enter into the Sale; and (2)
plan. Moreover, section 2570.34(c)(4) of
Department received no comments or all aspects of the selection and
the Procedures describes the content of
hearing requests from interested engagement of the Independent
such appraisal report in subparagraphs
persons. Appraiser for the purposes of
(i)–(iii).
Accordingly, after giving full determining the fair market value of the Accordingly, in the exemption request
consideration to the entire record, the Properties on the date of the Sale;
sradovich on DSK3GMQ082PROD with NOTICES
under consideration, the Department is
Department has decided to grant the (e) The Plan trustees appointed by the of the view that the Independent
exemption. The complete application employer associations (the Employer Appraiser of the Properties has fulfilled
file (Exemption Application No. D– Trustees), who have no interest in the the requirements mandated by Section
2 For purposes of this exemption, references to 3 For purposes of this exemption, references to
2570.34(c) of the Procedures.
specific provisions of Title I of the Act, unless specific provisions of Title I of the Act, unless
In addition, the Department notes that
otherwise specified, refer also to the corresponding otherwise specified, refer also to the corresponding the Sale is subject to several conditions
provisions of the Code. provisions of the Code. that are meant to protect the Plan and
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![72116 Federal Register / Vol. 81, No. 202 / Wednesday, October 19, 2016 / Notices
its participants and beneficiaries. In this Corporation (Holdings) of shares of SC Plans in blind transactions on the
regard, the Independent Appraiser will Stock, provided that the conditions as NASDAQ Global Select Market;
render an updated appraisal of the set forth, below, in Section II of this (f) No brokerage fees, commissions,
Properties, as of the date of the Sale. In exemption were satisfied for the subscription fees, or other charges were
addition, the price paid by the Union to duration of the acquisition and holding; paid by the Plans with respect to the
the Plan will be equal to the greater of: and acquisition and holding of the Rights, or
(1) $1,640,000, or (2) the fair market (b) The restrictions of sections were paid to any affiliate of Holdings,
value of the Properties, as determined 406(a)(1)(E), 406(a)(2), 406(b)(1), Sears Canada, or the Independent
by the Independent Appraiser as of the 406(b)(2), and 407(a)(1)(A) of the Act 5 Fiduciary, with respect to the sale of the
date of the Sale. Further, the Employer shall not apply to the acquisition and Rights.
Trustees, who have no interest in the holding of the Rights by the PR Plan in
connection with the Offering of the SC Section III. Definitions
Sale, will review and approve the
methodology used by the Independent Stock by Holdings, provided that the (a) The term ‘‘affiliate’’ of a person
Appraiser, and will ensure that such conditions as set forth in Section II of includes:
methodology is properly applied. this exemption were satisfied for the (1) Any person directly or indirectly
Accordingly, after giving full duration of the acquisition and holding. through one or more intermediaries,
consideration to the entire record, the controlling, controlled by, or under
Section II. Conditions for Relief
Department has decided to grant the common control with such person;
exemption. The complete application (a) The receipt of the Rights by the (2) Any officer, director, partner,
file (Application No. D–11822), Plans occurred in connection with the employee, or relative, as defined in
including all supplemental submissions Offering, in which all shareholders of section 3(15) of the Act, of such person;
received by the Department, is available the common stock of Holdings and
for public inspection in the Public (Holdings Stock), including the Plans, (3) Any corporation or partnership of
Disclosure Room of the Employee were treated in the same manner; which such person is an officer,
(b) The acquisition of the Rights by director, partner, or employee.
Benefits Security Administration, Room
the Plans resulted from an independent (b) The term ‘‘control’’ means the
N–1515, U.S. Department of Labor, 200
act of Holdings, as a corporate entity; power to exercise a controlling
Constitution Avenue NW., Washington, (c) Each shareholder of Holdings
DC 20210. influence over the management or
Stock, including each of the Plans, policies of a person other than an
For a more complete statement of the
received the same proportionate number individual.
facts and representations supporting the
of Rights based on the number of shares Effective Date: This exemption is
Department’s decision to grant this of Holdings Stock held by each such
exemption, refer to the Notice of effective for the period beginning
shareholder; October 16, 2014, and ending November
Proposed Exemption published on April (d) All decisions with regard to the
28, 2016, at 81 FR 25435. 7, 2014 (the Offering Period).
holding and disposition of the Rights by
FOR FURTHER INFORMATION CONTACT: Mr. the Plans were made by a qualified Written Comments
Joseph Brennan of the Department, independent fiduciary (the Independent The Department invited all interested
telephone (202) 693–8456. (This is not Fiduciary) within the meaning of 29 persons to submit written comments
a toll-free number.) CFR 2570.31(j); 6 and/or requests for a public hearing
Sears Holdings 401(k) Savings Plan (the (e) The Independent Fiduciary with respect to the notice of proposed
Savings Plan) and the Sears Holdings determined that it would be in the exemption (the Notice), published on
Puerto Rico Savings Plan (the PR Plan) interest of the Plans to sell all of the May 12, 2016, at 81 FR 29705. All
(Collectively, the Plans), Located in Rights received in the Offering by the comments and requests for hearing were
Hoffman Estates, IL due by July 3, 2016. During the
5 The Applicant represents that there is no
comment period, the Department
[Prohibited Transaction Exemption 2016–05; jurisdiction under Title II of the Act with respect
Exemption Application Nos. D–11846 and D– to the PR Plan. Accordingly, the Department is not received two comments from interested
11847] providing any exemptive relief from section persons and no requests for a public
4975(c)(1)(E) of the Code for the acquisition and hearing. A Savings Plan participant
Exemption holding of the Rights by the PR Plan. submitted a written comment and
6 29 CFR 2570.31(j) defines a ‘‘qualified
Section I. Covered Transactions independent fiduciary,’’ in relevant part, to mean
Holdings requested a clarification to the
‘‘any individual or entity with appropriate training, Notice. Furthermore, during the
(a) The restrictions of sections experience, and facilities to act on behalf of the comment period, the Department
406(a)(1)(E), 406(a)(2), 406(b)(1), plan regarding the exemption transaction in received several phone inquiries that
406(b)(2), and 407(a)(1)(A) of the Act accordance with the fiduciary duties and
generally concerned matters outside the
and the sanctions resulting from the responsibilities prescribed by ERISA, that is
independent of and unrelated to any party in scope of the exemption.
application of section 4975 of the Code, interest engaging in the exemption transaction and
by reason of section 4975(c)(1)(E) of the its affiliates;’’ in general, a fiduciary is presumed to Participant’s Comment
Code,4 shall not apply to the acquisition be independent ‘‘if the revenues it receives or is In his comment letter of June 20,
and holding by the Savings Plan of projected to receive, within the current federal
income tax year from parties in interest (and their 2016, the participant represents that he
certain subscription rights (the Rights) affiliates) [with respect] to the transaction are not is a Holdings’ shareholder, who held a
to purchase shares of common stock (the more than 2% of such fiduciary’s annual revenues balance in the Savings Plan at the time
SC Stock) in Sears Canada Inc. (Sears based upon its prior income tax year. Although the
sradovich on DSK3GMQ082PROD with NOTICES
of the Offering.7 The participant states
Canada) in connection with an offering presumption does not apply when the
aforementioned percentage exceeds 2%, a fiduciary that ‘‘it appears I did not benefit from
(the Offering) by Sears Holdings nonetheless may be considered independent based
upon other facts and circumstances provided that 7 The participant also submitted the same
4 Forpurposes of this exemption, unless it receives or is projected to receive revenues that comment to the Department in D–11851 and D–
indicated otherwise, references to section 406 of the are not more than 5% within the current federal 11852, involving the Sears Notes Offering, 81 FR
Act should be read to refer as well to the income tax year from parties in interest (and their 29709 (May 12, 2016); and in D–11871 and D–
corresponding provisions of section 4975 of the affiliates) [with respect] to the transaction based 11873, involving the Seritage Growth Offering, 81
Code. upon its prior income tax year.’’ FR 29713 (May 12, 2016).
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![Federal Register / Vol. 81, No. 202 / Wednesday, October 19, 2016 / Notices 72117
[the Offering] as I should have’’ because Department has clarified that it ‘‘does and holding of certain subscription
the price of Holdings Stock decreased not view an acquisition of stock by rights (the Rights) issued by Sears
following the Offering. The participant means of a stock dividend or stock split Holdings Corporation (Holdings) by the
inquires whether the exemption should as a prohibited transaction,’’ in the Savings Plan in connection with an
reverse this loss. Preamble to Final Regulation, Fiduciary offering (the Offering) by Holdings of
In response to the participant’s Responsibility; Statutory Exemption for unsecured obligations issued by
comment, Holdings explains that while Certain Acquisitions, Sales, or Leases of Holdings (Notes) and warrants to
there have been fluctuations in the price Property, 45 FR 51194, 51196 (August 1, purchase the common stock of Holdings
of Holdings Stock during the relevant 1980). Therefore, the Applicant does not (Warrants)(together referred to as Units),
period, the Independent Fiduciary’s believe an exemption from section provided that the conditions as set forth,
decision to sell the Rights generated a 406(a)(1)(A) is required in the subject below, in Section II of this exemption
positive gain for the Sears Holdings case. Sears Holdings requests were satisfied for the duration of the
401(k) Savings Plan Master Trust Stock confirmation that the Department shares acquisition and holding; and
Fund (the Stock Fund), of $200,557.36, this view. (b) The restrictions of sections
net of fees and expenses. According to In response, the Department concurs 406(a)(1)(E), 406(a)(2), 406(b)(1),
Holdings, changes in the value of a that exemptive relief from section 406(b)(2), and 407(a)(1)(A) of the Act 9
publicly-traded company’s stock occur 406(a)(1)(A) of the Act is not applicable shall not apply to the acquisition and
due to many factors, including the to the Plans’ acquisition of the Rights. holding of the Rights by the PR Plan in
company’s performance. Depending on connection with the Offering of the
the measurement period used, Holdings Technical Correction Units by Holdings, provided that the
represents that it is possible that a Section III(c) of the proposed conditions as set forth in Section II of
contemporaneous decline in the price of exemption is redesignated as Section this exemption were satisfied for the
Holdings Stock negated the positive III(b) of this exemption. duration of the acquisition and holding.
gain for the Stock Fund. However, Accordingly, after giving full
consideration to the entire record, the Section II. Conditions for Relief
according to Holdings, the performance
of Holdings Stock around the time of the Department has decided to grant the (a) The receipt of the Rights by the
Offering was beyond the control of the exemption. The complete application Plans occurred in connection with the
Plans and the Independent Fiduciary, file (Application Nos. D–11846 and D– Offering, in which all shareholders of
and it was independent of any actions 11847), including all supplemental the common stock of Holdings
such fiduciary took with respect to the submissions received by the (Holdings Stock), including the Plans,
Rights received by the Plans. Department, is available for public were treated in the same manner;
Holdings also represents that it made inspection in the Public Disclosure (b) The acquisition of the Rights by
the decision to commence the Offering, Room of the Employee Benefits Security the Plans resulted from an independent
which was a corporate decision, and Administration, Room N–1515, U.S. act of Holdings, as a corporate entity;
this decision was not fiduciary in Department of Labor, 200 Constitution (c) Each shareholder of Holdings
nature. Further, Holdings states that no Avenue NW., Washington, DC 20210. Stock, including each of the Plans,
shareholder, including the Plans, had For a more complete statement of the received the same proportionate number
the ability to prevent the Offering. facts and representations supporting the of Rights based on the number of shares
Therefore, the only decision presented Department’s decision to grant this of Holdings Stock held by each such
to the shareholders, including the Plans’ exemption, refer to the notice of shareholder;
fiduciaries, was how to dispose of the proposed exemption published on May (d) All decisions with regard to the
Rights that were distributed during the 12, 2016, at 81 FR 29705. holding and disposition of the Rights by
Offering. Holdings represents that the FOR FURTHER INFORMATION CONTACT: Mr.
the Plans were made by a qualified
Independent Fiduciary’s decision to sell Scott Ness of the Department, telephone independent fiduciary (the Independent
the Rights resulted in a significant (202) 693–8561. (This is not a toll-free Fiduciary) within the meaning of 29
deposit in the Stock Fund. number.) CFR 2570.31(j); 10
Holdings’ Comment Sears Holdings 401(k) Savings Plan (the corresponding provisions of section 4975 of the
The Applicant states that it originally Savings Plan) and the Sears Holdings Code.
9 The Applicant represents that there is no
requested relief from the restrictions of Puerto Rico Savings Plan (the PR Plan)
jurisdiction under Title II of the Act with respect
sections 406(a)(1)(A), 406(a)(1)(E), (Collectively, the Plans), Located in to the PR Plan. Accordingly, the Department is not
406(a)(2), 406(b)(1), 406(b)(2), and Hoffman Estates, IL providing any exemptive relief from section
407(a)(1)(A) of the Act in the exemption 4975(c)(1)(E) of the Code for the acquisition and
[Prohibited Transaction Exemption 2016–06; holding of the Rights by the PR Plan.
application. However, the Applicant Exemption Application Nos. D–11851 and D– 10 29 CFR 2570.31(j) defines a ‘‘qualified
notes that the Department decided not 11852] independent fiduciary,’’ in relevant part, to mean
to provide exemptive relief from section ‘‘any individual or entity with appropriate training,
406(a)(1)(A) of the Act in the Notice. Exemption experience, and facilities to act on behalf of the
The Applicant believes the Plans’ plan regarding the exemption transaction in
Section I. Covered Transactions accordance with the fiduciary duties and
acquisition of the Rights to purchase
(a) The restrictions of sections responsibilities prescribed by ERISA, that is
Sears Canada Stock did not involve a independent of and unrelated to any party in
406(a)(1)(E), 406(a)(2), 406(b)(1),
prohibited ‘‘sale or exchange, or leasing, interest engaging in the exemption transaction and
406(b)(2), and 407(a)(1)(A) of the Act its affiliates;’’ in general, a fiduciary is presumed to
of any property between the plan and a
sradovich on DSK3GMQ082PROD with NOTICES
and the sanctions resulting from the be independent ‘‘if the revenues it receives or is
party in interest,’’ as described in
application of section 4975 of the Code, projected to receive, within the current federal
section 406(a)(1)(A) of the Act. The income tax year from parties in interest (and their
by reason of section 4975(c)(1)(E) of the
Applicant states that it provided the affiliates) [with respect] to the transaction are not
Code,8 shall not apply to the acquisition more than 2% of such fiduciary’s annual revenues
Rights automatically to all of its
based upon its prior income tax year. Although the
shareholders, including the Plans, in a 8 For purposes of this exemption, unless presumption does not apply when the
manner similar to a stock dividend. The indicated otherwise, references to section 406 of the aforementioned percentage exceeds 2%, a fiduciary
Applicant also points out that the Act should be read to refer as well to the Continued
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![72118 Federal Register / Vol. 81, No. 202 / Wednesday, October 19, 2016 / Notices
(e) The Independent Fiduciary is a Holdings’ shareholder, who held a The Applicant believes the Plans’
determined that it would be in the balance in the Savings Plan at the time acquisition of the Rights to purchase
interest of the Plans to sell all of the of the Offering.11 The participant states Sears Notes and Warrants did not
Rights received in the Offering by the that ‘‘it appears I did not benefit from involve a prohibited ‘‘sale or exchange,
Plans in blind transactions on the [the Offering] as I should have’’ because or leasing, of any property between the
NASDAQ Global Select Market; the price of Holdings Stock decreased plan and a party in interest,’’ as
(f) No brokerage fees, commissions, following the Offering. The participant described in section 406(a)(1)(A) of the
subscription fees, or other charges were inquires whether the exemption should Act. The Applicant states that it
paid by the Plans with respect to the reverse this loss. provided the Rights automatically to all
acquisition and holding of the Rights, or In response to the participant’s of its shareholders, including the Plans,
were paid to any affiliate of Holdings or comment, Holdings explains that while in a manner similar to a stock dividend.
the Independent Fiduciary, with respect there have been fluctuations in the price The Applicant also points out that the
to the sale of the Rights. of Holdings Stock during the relevant Department has clarified that it ‘‘does
period, the Independent Fiduciary’s not view an acquisition of stock by
Section III. Definitions
decision to sell the Rights generated a means of a stock dividend or stock split
(a) The term ‘‘affiliate’’ of a person positive gain for the Sears Holdings as a prohibited transaction,’’ in the
includes: 401(k) Savings Plan Master Trust Stock Preamble to Final Regulation, Fiduciary
(1) Any person directly or indirectly Fund (the Stock Fund), of Responsibility; Statutory Exemption for
through one or more intermediaries, $3,637,509.54, net of fees and expenses. Certain Acquisitions, Sales, or Leases of
controlling, controlled by, or under According to Holdings, changes in the Property, 45 FR 51194, 51196 (August 1,
common control with such person; value of a publicly-traded company’s 1980). Therefore, the Applicant does not
(2) Any officer, director, partner, stock occur due to many factors, believe an exemption from section
employee, or relative, as defined in including the company’s performance. 406(a)(1)(A) is required in the subject
section 3(15) of the Act, of such person; Depending on the measurement period case. Sears Holdings requests
and used, Holdings represents that it is confirmation that the Department shares
(3) Any corporation or partnership of possible that a contemporaneous this view.
which such person is an officer, decline in the price of Holdings Stock In response, the Department concurs
director, partner, or employee. negated the positive gain for the Stock that exemptive relief from section
(b) The term ‘‘control’’ means the Fund. However, according to Holdings, 406(a)(1)(A) of the Act is not applicable
power to exercise a controlling the performance of Holdings Stock to the Plans’ acquisition of the Rights.
influence over the management or around the time of the Offering was
policies of a person other than an Technical Correction
beyond the control of the Plans and the
individual. Independent Fiduciary, and it was Section III(c) of the proposed
Effective Date: This exemption is independent of any actions such exemption is redesignated as Section
effective for the period beginning fiduciary took with respect to the Rights III(b) of this exemption.
October 30, 2014, and ending November received by the Plans. Accordingly, after giving full
18, 2014 (the Offering Period). Holdings also represents that it made consideration to the entire record, the
Written Comments the decision to commence the Offering, Department has decided to grant the
which was a corporate decision, and exemption. The complete application
The Department invited all interested file (Application Nos. D–11851 and D–
persons to submit written comments this decision was not fiduciary in
nature. Further, Holdings states that no 11852), including all supplemental
and/or requests for a public hearing submissions received by the
with respect to the notice of proposed shareholder, including the Plans, had
the ability to prevent the Offering. Department, is available for public
exemption (the Notice), published on inspection in the Public Disclosure
May 12, 2016, at 81 FR 29709. All Therefore, the only decision presented
to the shareholders, including the Plans’ Room of the Employee Benefits Security
comments and requests for hearing were Administration, Room N–1515, U.S.
due by July 3, 2016. During the fiduciaries, was how to dispose of the
Rights that were distributed during the Department of Labor, 200 Constitution
comment period, the Department Avenue NW., Washington, DC 20210.
received two comments from interested Offering. Holdings represents that the
Independent Fiduciary’s decision to sell For a more complete statement of the
persons and no requests for a public facts and representations supporting the
hearing. A Savings Plan participant the Rights resulted in a significant
deposit in the Stock Fund. Department’s decision to grant this
submitted a written comment, and exemption, refer to the notice of
Holdings requested a clarification to the Holdings’ Comment proposed exemption published on May
Notice. Furthermore, during the 12, 2016, at 81 FR 29709.
The Applicant states that it originally
comment period, the Department FOR FURTHER INFORMATION CONTACT: Mr.
requested relief from the restrictions of
received several phone inquiries that Erin Hesse of the Department, telephone
sections 406(a)(1)(A), 406(a)(1)(E),
generally concerned matters outside the (202) 693–8546. (This is not a toll-free
406(a)(2), 406(b)(1), 406(b)(2), and
scope of the exemption. number.)
407(a)(1)(A) of the Act in the exemption
Participant’s Comment application. However, the Applicant Liberty Media 401(k) Savings Plan (the
In his comment letter of June 20, notes that the Department decided not Plan), Located in Englewood, CO
to provide exemptive relief from section
sradovich on DSK3GMQ082PROD with NOTICES
2016, the participant represents that he
406(a)(1)(A) of the Act in the Notice. [Prohibited Transaction Exemption 2016–07;
Exemption Application No. D–11858]
nonetheless may be considered independent based
upon other facts and circumstances provided that 11 The participant also submitted the same
Exemption
it receives or is projected to receive revenues that comment to the Department in D–11846 and D–
are not more than 5% within the current federal 11847, involving the Sears Canada Offering, 81 FR Section I. Covered Transactions
income tax year from parties in interest (and their 29705 (May 12, 2016); and in D–11871 and D–
affiliates) [with respect] to the transaction based 11873, involving the Seritage Growth Offering, 81 The restrictions of sections
upon its prior income tax year.’’ FR 29713 (May 12, 2016). 406(a)(1)(E), 406(a)(2), and 407(a)(1)(A)
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![Federal Register / Vol. 81, No. 202 / Wednesday, October 19, 2016 / Notices 72119
of the Act shall not apply to: (1) The with respect to the notice of proposed International Inc. and Subsidiaries
acquisition by the Plan of certain stock exemption, published on April 28, 2016, Pension Plan (the Plan), provided:
subscription rights (the Rights) to at 81 FR 25438. Liberty Media (a) Fiduciary Counselors Inc. (the
purchase shares of Liberty Broadband completed delivery of the notice of Independent Fiduciary) will represent
Series C common stock (LB Series C proposed exemption and accompanying the interests of the Plan, the
Stock), in connection with a rights notice to interested persons on May 3, participants, and beneficiaries with
offering (the Rights Offering) held by 2016. However, the Department respect to the Contribution, including
Liberty Broadband Corporation (Liberty determined that certain elements of the but not limited to, taking the following
Broadband), a party in interest with notice of proposed exemption as actions:
respect to the Plan; and (2) the holding published in the Federal Register were (i) Determining whether the
of the Rights by the Plan during the omitted from the materials sent to Contribution is in the interests of the
subscription period of the Rights interested persons. Liberty Media Plan and of its participants and
Offering, provided that the conditions represented, under penalty of perjury, beneficiaries, and is protective of the
described in Section II below have been that a corrected version of the notice of rights of participants and beneficiaries
met. proposed exemption was provided to all of the Plan;
interested persons on May 27, 2016. All (ii) Determining whether and on what
Section II. Conditions for Relief terms the Contribution should be
comments and requests for hearing were
(a) The Plan’s acquisition of the due under the corrected version of the accepted by the Plan;
Rights resulted solely from an notice by June 26, 2016, 30 days (iii) If the Contribution is accepted by
independent corporate act of Liberty following the date on which Liberty the Plan, establishing and administering
Broadband; Media certified delivery was completed. the process (subject to such
(b) All holders of Liberty Broadband During the comment period, the modifications as the Independent
Series A common stock and Liberty Department received no comments and Fiduciary may make from time to time)
Broadband Series C common stock no requests for a hearing from interested for liquidating the Contributed Stock, as
(collectively, the LB Stock), including persons. Accordingly, after giving full is prudent under the circumstances;
the Plan, were issued the same consideration to the entire record, the (iv) Determining the fair market value
proportionate number of Rights based Department has decided to grant the of the Contributed Stock as of the date
on the number of shares of LB Stock exemption. The complete application of the Contribution;
held by each such shareholder; file (Application No. D–11858), (v) Monitoring the Contribution and
(c) For purposes of the Rights including all supplemental submissions holding of Contributed Stock on a
Offering, all holders of LB Stock, received by the Department, is available continuing basis and taking all
including the Plan, were treated in a for public inspection in the Public appropriate actions necessary to
like manner; Disclosure Room of the Employee safeguard the interests of the Plan; and
(d) The acquisition of the Rights by (vi) If the Contribution is accepted by
Benefits Security Administration, Room
the Plan was made in a manner that was the Plan, voting proxies and responding
N–1515, U.S. Department of Labor, 200
consistent with provisions of the Plan to tender offers with respect to the
Constitution Avenue NW., Washington,
for the individually-directed investment Contributed Stock held by the Plan;
DC 20210. (b) Solely for purposes of determining
of participant accounts;
For a more complete statement of the the Plan’s minimum funding
(e) The Liberty Media 401(k) Savings
facts and representations supporting the requirements (as determined under
Plan Administrative Committee (the
Department’s decision to grant this section 412 of the Code), adjusted
Committee) directed the Plan trustee to
exemption, refer to the notice of funding target attainment percentage
sell the Rights on the NASDAQ Global
proposed exemption published on April (AFTAP) (as determined under Treas.
Select Market, in accordance with Plan
28, 2016, at 81 FR 25438. Reg. section 1.436–1(j)(1)), and funding
provisions that precluded the Plan from
acquiring additional shares of LB Stock; FOR FURTHER INFORMATION CONTACT: Mr. target attainment percentage (as
(f) The Committee did not exercise Scott Ness of the Department, telephone determined under section 430(d)(2) of
any discretion with respect to the (202) 693–8561. (This is not a toll-free the Code), the Plan’s actuary (the
acquisition and holding of the Rights; number.) Actuary) will not count as a
and contribution to the Plan any shares of
Baxter International Inc. (Baxter or the
(g) The Plan did not pay any fees or Contributed Stock that have not been
Applicant), Located in Deerfield, IL
commissions in connection with the liquidated;
acquisition or holding of the Rights, and [Prohibited Transaction Exemption 2016–08; (c) For purposes of determining the
did not pay any commissions to Liberty Exemption Application No. D–11866] amount of any Contribution, the
Broadband, Liberty Media Corporation, Exemption Contributed Stock shall be deemed
TruePosition, Inc., or any affiliates of contributed only at the time it is sold,
the foregoing in connection with the Section I. Transaction equal to the lesser of: (1) The proceeds
sale of the Rights. The restrictions of sections from the sale of such Contributed Stock;
Effective Date: This exemption is 406(a)(1)(A) and (D) and sections or (2) the value of such Contributed
effective for the period beginning on 406(b)(1) and (2) of ERISA and sections Stock on the date of the initial
December 15, 2014, the date that the 4975(c)(1)(A), (D), and (E) of the Code 12 contribution as determined by the
Plan received the Rights, until shall not apply to the contribution of Independent Fiduciary;
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December 17, 2014, the date the Rights publicly traded common stock of (d) The Contributed Stock represents
were sold by the Plan on the NASDAQ Baxalta (the Contributed Stock) by no more than 20% of the fair market
Global Select Market. Baxter (the Contribution) to the Baxter value of the total assets of the Plan at
the time it is contributed to the Plan;
Written Comments (e) The Plan pays no commissions,
12 For purposes of this exemption, references to
The Department invited all interested specific provisions of Title I of the Act, unless
costs, or other expenses in connection
persons to submit written comments otherwise specified, refer also to the corresponding with the Contribution, holding, or
and/or requests for a public hearing provisions of the Code. subsequent sale of the Contributed
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![Federal Register / Vol. 81, No. 202 / Wednesday, October 19, 2016 / Notices 72121
FOR FURTHER INFORMATION CONTACT: Mr. (Holdings Stock), including the Plans, participants submitted written
Erin S. Hesse of the Department, were treated in the same manner; comments. One participant supported
telephone (202) 693–8546. (This is not (b) The acquisition of the Rights by the granting of the exemption, while the
a toll-free number.) the Plans resulted solely from an other did not. The third comment,
independent act of Holdings, as a which was submitted by the Applicant,
Sears Holdings 401(k) Savings Plan (the corporate entity; requests several minor revisions and
Savings Plan) and the Sears Holdings (c) Each shareholder of Holdings clarifications to the Notice.
Puerto Rico Savings Plan (the PR Plan) Stock, including each of the Plans, Following is a discussion of the
(Together, the Plans), Located in received the same proportionate number comment received by the Department
Hoffman Estates, IL of Rights based on the number of shares from the objecting participant, and the
[Prohibited Transaction Exemption 2016–09; of Holdings Stock held by each such one submitted by the Applicant. Also
Exemption Application Nos. D–11871 and D– shareholder; presented are the responses made by the
11872, respectively] (d) All decisions with regard to the Applicant to the participant’s comment,
holding and disposition of the Rights by as well as the Department’s responses to
Exemption the Plans were made by a qualified the Applicant’s comment.
Section I. Transactions independent fiduciary (the Independent
Fiduciary) within the meaning of 29 Participant’s Comment
The restrictions of sections
CFR 2570.31(j); 15 In his comment letter of June 20,
406(a)(1)(E), 406(a)(2), 406(b)(1), (e) The Independent Fiduciary 2016, the participant represents that he
406(b)(2), and 407(a)(1)(A) of the Act determined that it would be in the is a Holdings’ shareholder, who held a
and the sanctions resulting from the interest of the Plans to sell all of the balance in the Savings Plan at the time
application of section 4975 of the Code, Rights received in the Offering by the of the Offering.16 The participant states
by reason of section 4975(c)(1)(E) of the Plans in blind transactions on the New that ‘‘it appears I did not benefit from
Code,13 shall not apply, effective for the York Stock Exchange; and [the Offering] as I should have’’ because
period beginning June 11, 2015, and (f) No brokerage fees, commissions, the price of Seritage Growth Stock
ending July 2, 2015, to the acquisition subscription fees, or other charges were decreased following the Offering. The
and holding by the Savings Plan of paid by the Plans with respect to the participant inquires whether the
certain subscription rights (the Rights) acquisition and holding of the Rights; or exemption should reverse this loss.
to purchase shares of common stock were paid to any affiliate of the In response to the participant’s
(Seritage Growth Stock) in Seritage Independent Fiduciary or Holdings, in comment, the Applicant explains that
Growth Properties (Seritage Growth), in connection with the sale of the Rights. while there have been fluctuations in
connection with an offering (the Effective Date: This exemption is the price of Holdings Stock during the
Offering) by Sears Holdings Corporation effective for the Offering period, relevant period, the Independent
(Holdings or the Applicant) of Seritage beginning June 11, 2015, and ending Fiduciary’s decision to sell the Rights
Growth Stock, provided that the July 2, 2015. generated a positive gain for the Sears
conditions, as set forth below, were Holdings 401(k) Savings Plan Master
satisfied for the duration of the Written Comments
Trust Stock Fund (the Stock Fund), of
acquisition and holding; and In the notice of proposed exemption $4,106,921.19, net of fees and expenses.
(b) The restrictions of sections (the Notice), the Department invited all According to the Applicant, changes in
406(a)(1)(E), 406(a)(2), 406(b)(1), interested persons to submit written the value of a publicly-traded
406(b)(2), and 407(a)(1)(A) of the Act 14 comments within 52 days of the company’s stock occur due to many
shall not apply, effective for the period publication, on May 12, 2016, of the factors, including the company’s
beginning June 11, 2015, and ending Notice in the Federal Register. All performance. Depending on the
July 2, 2015, to the acquisition and comments were due by July 3, 2016. measurement period used, the
holding of the Rights by the PR Plan in During the comment period, the Applicant represents that it is possible
connection with the Offering of Seritage Department received three comments that a contemporaneous decline in the
Growth Stock by Holdings, provided from interested persons and no requests price of Holdings Stock negated the
that the conditions, as set forth below, for a public hearing. Two Savings Plan positive gain for the Stock Fund.
were satisfied for the duration of the However, according to the Applicant,
acquisition and holding. 15 29 CFR 2570.31(j) defines a ‘‘qualified
the performance of Holdings Stock
independent fiduciary,’’ in relevant part, to mean
Section II. Conditions ‘‘any individual or entity with appropriate training, around the time of the Offering was
experience, and facilities to act on behalf of the beyond the control of the Plans and the
(a) The receipt of the Rights by the plan regarding the exemption transaction in Independent Fiduciary. It was also
Plans occurred in connection with the accordance with the fiduciary duties and independent of any actions such
Offering, in which all shareholders of responsibilities prescribed under the Act, that is
independent of and unrelated to any party in fiduciary took with respect to the Rights
the common stock of Holdings interest engaging in the exemption transaction and received by the Plans.
its affiliates;’’ in general, a fiduciary is presumed to The Applicant also represents that
13 For purposes of this exemption, references to
be independent ‘‘if the revenues it receives or is Holdings made the decision to
specific provisions of Title I of the Act, unless projected to receive, within the current federal
otherwise specified, refer also to the corresponding income tax year from parties in interest (and their commence the Offering, which was a
provisions of the Code. affiliates) [with respect] to the transaction are not corporate decision, and was not
14 The Applicant represents that there is no more than 2% of such fiduciary’s annual revenues fiduciary in nature. Further, the
jurisdiction under Title II of the Act with respect based upon its prior income tax year. Although the
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Applicant explains that no shareholder,
to the PR Plan because the PR Plan fiduciaries have presumption does not apply when the
not made an election under section 1022(i)(2) of the aforementioned percentage exceeds 2%, a fiduciary including the Plans, had the ability to
Act, whereby the PR Plan would be treated as a nonetheless may be considered independent based
trust created and organized in the United States for upon other facts and circumstances provided that 16 The participant also submitted the same
purposes of tax qualification under section 401(a) it receives or is projected to receive revenues that comment to the Department in D–11851 and D–
of the Code. Accordingly, the Department is not are not more than 5% within the current federal 11852, involving the Sears Notes Offering, 81 FR
providing exemptive relief from section income tax year from parties in interest (and their 29709 (May 12, 2016); and in D–11846 and D–
4975(c)(1)(E) of the Code for the acquisition and affiliates) [with respect] to the transaction based 11847 involving the Sears Canada Offering, 81 FR
holding of the Rights by the PR Plan. upon its prior income tax year.’’ 29705 (May 12, 2016).
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![Federal Register / Vol. 81, No. 202 / Wednesday, October 19, 2016 / Notices 72123
Signed at Washington, DC, this 14th day of Email: request.schedule@nara.gov. applicability when schedules cover
October 2016. FAX: 301–837–3698. records that may be accumulated
Lyssa E. Hall, You must cite the control number, throughout an agency); provides the
Director of Exemption Determinations, which appears in parentheses after the control number assigned to each
Employee Benefits Security Administration, name of the agency that submitted the schedule, the total number of schedule
U.S. Department of Labor. schedule, and a mailing address. If you items, and the number of temporary
[FR Doc. 2016–25279 Filed 10–18–16; 8:45 am] would like an appraisal report, please items (the records proposed for
BILLING CODE 4510–29–P include that in your request. destruction); and includes a brief
FOR FURTHER INFORMATION CONTACT: description of the temporary records.
Margaret Hawkins, Director, by mail at The records schedule itself contains a
NATIONAL ARCHIVES AND RECORDS Records Appraisal and Agency full description of the records at the file
ADMINISTRATION Assistance (ACRA); National Archives unit level as well as their disposition. If
and Records Administration, 8601 NARA staff has prepared an appraisal
[NARA–2017–004]
Adelphi Road, College Park, MD 20740– memorandum for the schedule, it also
Records Schedules; Availability and 6001, by phone at 301–837–1799, or by includes information about the records.
Request for Comments email at request.schedule@nara.gov. You may request additional information
SUPPLEMENTARY INFORMATION: Each year,
about the disposition process at the
AGENCY: National Archives and Records addresses above.
Administration (NARA). Federal agencies create billions of
records on paper, film, magnetic tape, Schedules Pending
ACTION: Notice of availability of
and other media. To control this 1. Department of Defense, National
proposed records schedules; request for
accumulation, agency records managers Guard Bureau (DAA–0168–2016–0003,
comments.
prepare schedules proposing records 3 items, 2 temporary items). Records
SUMMARY: The National Archives and retention periods and submit these relating to legislative inquiries to agency
Records Administration (NARA) schedules for NARA’s approval. These leadership including routine or
publishes notice at least once monthly schedules provide for timely transfer administrative information. Proposed
of certain Federal agency requests for into the National Archives of for permanent retention are records
records disposition authority (records historically valuable records and relating to questions of policy, budget,
schedules). Once approved by NARA, authorize the agency to dispose of all appropriations and similar records.
records schedules provide mandatory other records after the agency no longer 2. Department of Defense, Office of
instructions on what happens to records needs them to conduct its business. the Secretary of Defense (DAA–0330–
when agencies no longer need them for Some schedules are comprehensive and 2016–0015, 1 item, 1 temporary item).
current Government business. The cover all the records of an agency or one Master files of an electronic information
records schedules authorize agencies to of its major subdivisions. Most system used to track nominators and
preserve records of continuing value in schedules, however, cover records of candidates of a program for business
the National Archives of the United only one office or program or a few and community leaders to gain a greater
States and to destroy, after a specified series of records. Many of these update awareness of national defense issues.
period, records lacking administrative, previously approved schedules, and 3. Department of Defense, Office of
legal, research, or other value. NARA some include records proposed as the Secretary of Defense (DAA–0330–
publishes notice in the Federal Register permanent. 2016–0016, 1 item, 1 temporary item).
for records schedules in which agencies The schedules listed in this notice are Records relating to employers who have
propose to destroy records not media neutral unless otherwise pledged to provide a supportive work
previously authorized for disposal or specified. An item in a schedule is environment for members of the
reduce the retention period of records media neutral when an agency may National Guard and Reserves.
already authorized for disposal. NARA apply the disposition instructions to 4. Department of Energy, Agency-
invites public comments on such records regardless of the medium in wide (DAA–0434–2016–0007, 2 items, 1
records schedules, as required by 44 which it creates or maintains the temporary item). Records relating to the
U.S.C. 3303a(a). records. Items included in schedules Ombudsman program including case
DATES: NARA must receive requests for submitted to NARA on or after files. Proposed for permanent retention
copies in writing by November 18, 2016. December 17, 2007, are media neutral are the charter, mission statement, and
Once NARA finishes appraising the unless the item is expressly limited to statistical analysis.
records, we will send you a copy of the a specific medium. (See 36 CFR 5. Department of Health and Human
schedule you requested. We usually 1225.12(e).) Services, Office of the Secretary (DAA–
prepare appraisal memoranda that Agencies may not destroy Federal 0468–2016–0002, 8 items, 4 temporary
contain additional information records without Archivist of the United items). Records of the Office of the
concerning the records covered by a States’ approval. The Archivist approves Inspector General including routine
proposed schedule. You may also destruction only after thoroughly correspondence, regulation support
request these. If you do, we will also considering the records’ administrative records, testimonies, and working
provide them once we have completed use by the agency of origin, the rights papers. Proposed for permanent
the appraisal. You have 30 days after we of the Government and of private people retention are substantive Congressional
send to you these requested documents directly affected by the Government’s correspondence and mandated reports,
in which to submit comments. activities, and whether or not the
sradovich on DSK3GMQ082PROD with NOTICES
policy records, and press releases.
ADDRESSES: You may request a copy of records have historical or other value. 6. Department of Homeland Security,
any records schedule identified in this In addition to identifying the Federal Immigration and Customs Enforcement
notice by contacting Records Appraisal agencies and any subdivisions (DAA–0567–2015–0008, 8 items, 8
and Agency Assistance (ACRA) using requesting disposition authority, this temporary items). Protective equipment
one of the following means: notice lists the organizational unit(s) records including incident case files,
Mail: NARA (ACRA); 8601 Adelphi accumulating the records (or notes that annual incident reports, proficiency and
Road, College Park, MD 20740–6001. the schedule has agency-wide instructor certifications, body armor
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Document Created: 2016-10-19 02:11:47
Document Modified: 2016-10-19 02:11:47
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Grant of Individual Exemptions. | |
| Dates | This exemption is effective for the period beginning October 16, 2014, and ending November 7, 2014 (the Offering Period). | |
| Contact | Mrs. Blessed Chuksorji-Keefe of the Department, telephone (202) 693-8567. (This is not a toll-free number.) | |
| FR Citation | 81 FR 72114 |
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