Federal Register / Vol. 65, No. 211 / Tuesday, October 31, 2000 / Notices 65011

material. Such material includes, but is not limited

to, asbestos-containing wallboard, floor tile and

sheeting, roofing and siding shingles, and

construction mastics.

the requirement to prevent release of

airborne asbestos above the timeweighted average and excursion limit;

notification by employers and building/

facility owners of designated personnel

and employees regarding the presence,

location, and quantity of ACMs and/or

PACMs; using information, data, and

analyses to demonstrate that PACM

does not contain asbestos; posting signs

in mechanical rooms/areas that

employees may enter and that contain

ACMs and PACMs, informing them of

the identity and location of these

materials and work practices that

prevent disturbing the materials; posting

warning signs demarcating regulated

areas; and affixing warning labels to

asbestos-containing products and to

containers holding such products.

Additional provisions of the Standard

that contain paperwork requirements

include: Developing specific

information and training programs for

employees; providing medical

surveillance for employees potentially

exposed to ACMs and/or PACMs,

including administering an employee

medical questionnaire, providing

information to the examining physician,

and providing the physician’s written

opinion to the employee; maintaining

records of objective data used for

exposure determinations, employee

exposure-monitoring and medicalsurveillance records, training records,

the record (i.e., information, data, and

analyses) used to demonstrate that

PACM does not contain asbestos, and

notifications made and received by

building/facility owners regarding the

content of ACMs and PACMs; making

specified records (e.g., exposuremonitoring and medical-surveillance

records) available to designated parties;

and transferring exposure-monitoring

and medical-surveillance records to the

National Institute for Occupational

Safety and Health on cessation of

business.

These paperwork requirements permit

employers, employees and their

designated representatives, OSHA, and

other specified parties to determine the

effectiveness of an employer’s asbestoscontrol program. Accordingly, the

requirements ensure that employees

exposed to asbestos receive all of the

protection afforded by the Standard.

II. Proposed Actions

OSHA proposes to extend the Office

of Management and Budget’s (OMB)

approval of the collection-ofinformation (paperwork) requirements

contained in the Standard. The Agency

will summarize the comments

submitted in response to this notice,

and will include this summary in its

request to OMB to extend the approval

of these information-collection

requirements.

Type of Review: Extension of

currently approved informationcollection requirements.

Title: Asbestos in Construction (29

CFR 1926.1101).

OMB Number: 1218–0134.

Affected Public: Business or other forprofit organizations; Federal, State,

Local, or Tribal governments.

Number of Respondents: 286,821.

Frequency: On occasion.

Average Time per Response: Varies

from 5 minutes to maintain records to

17.3 hours for training a competent

person.

Estimated Total Burden Hours:

5,817,388.

Estimated Cost (Operation and

Maintenance): $42,774,491.

III. Authority and Signature

Charles N. Jeffress, Assistant Secretary

of Labor for Occupational Safety and

Health, directed the preparation of this

notice. The authority for this notice is

the Paperwork Reduction Act of 1995

(44 U.S.C. 3506) and Secretary of

Labor’s Order No 3–2000 (65 FR 50017).

Signed at Washington, DC on October 26,

2000.

Charles N. Jeffress,

Assistant Secretary of Labor.

[FR Doc. 00–27972 Filed 10–30–00; 8:45 am]

BILLING CODE 4510–20–U

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Application No. D–10771, et al.]

Proposed Exemptions; Care Services

Employees’ 401(k) Profit Sharing Plan

and Trust

AGENCY: Pension and Welfare Benefits

Administration, Labor.

ACTION: Notice of Proposed Exemptions.

SUMMARY: This document contains

notices of pendency before the

Department of Labor (the Department) of

proposed exemptions from certain of the

prohibited transaction restrictions of the

Employee Retirement Income Security

Act of 1974 (the Act) and/or the Internal

Revenue Code of 1986 (the Code).

Written Comments and Hearing

Requests

All interested persons are invited to

submit written comments or request for

a hearing on the pending exemptions,

unless otherwise stated in the Notice of

Proposed Exemption, within 45 days

from the date of publication of this

Federal Register notice. Comments and

requests for a hearing should state: (1)

The name, address, and telephone

number of the person making the

comment or request, and (2) the nature

of the person’s interest in the exemption

and the manner in which the person

would be adversely affected by the

exemption. A request for a hearing must

also state the issues to be addressed and

include a general description of the

evidence to be presented at the hearing.

ADDRESSES: All written comments and

request for a hearing (at least three

copies) should be sent to the Pension

and Welfare Benefits Administration,

Office of Exemption Determinations,

Room N–5649, U.S. Department of

Labor, 200 Constitution Avenue, NW,

Washington, DC 20210. Attention:

Application No. lll, stated in each

Notice of Proposed Exemption. The

applications for exemption and the

comments received will be available for

public inspection in the Public

Documents Room of the Pension and

Welfare Benefits Administration, U.S.

Department of Labor, Room N–5638,

200 Constitution Avenue, NW,

Washington, DC 20210.

Notice to Interested Persons

Notice of the proposed exemptions

will be provided to all interested

persons in the manner agreed upon by

the applicant and the Department

within 15 days of the date of publication

in the Federal Register. Such notice

shall include a copy of the notice of

proposed exemption as published in the

Federal Register and shall inform

interested persons of their right to

comment and to request a hearing

(where appropriate).

SUPPLEMENTARY INFORMATION: The

proposed exemptions were requested in

applications filed pursuant to section

408(a) of the Act and/or section

4975(c)(2) of the Code, and in

accordance with procedures set forth in

29 CFR Part 2570, Subpart B (55 FR

32836, 32847, August 10, 1990).

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

requested to the Secretary of Labor.

Therefore, these notices of proposed

65012 Federal Register / Vol. 65, No. 211 / Tuesday, October 31, 2000 / Notices

1 In a letter dated May 17, 2000, Mr. Larry Flynn,

Vice President and Financial Consultant of

Huntleigh Financial Services, Inc. of St. Louis,

Missouri, and a former employee of Heitner, stated

that he advised Mr. Wolfson regarding the

reallocation of the Plan’s assets during 1997. Mr.

Flynn explained that both he and Mr. Wolfson

considered many third party administrators for the

Plan. However, none of the prospective candidates

expressed an interest in holding the Assets on

behalf of the Plan because the investments could

not be priced on a daily basis. Therefore, Mr. Flynn

said he advised Mr. Wolfson to sell the subject

Assets and reallocate the Plan’s assets into mutual

funds. 2 It is represented that Mr. Wolfson did not invest

in any of the aforementioned Assets in his personal

capacity.

exemption are issued solely by the

Department. The applications contain

representations with regard to the

proposed exemptions which are

summarized below. Interested persons

are referred to the applications on file

with the Department for a complete

statement of the facts and

representations.

Care Services Employees’ 401(k) Profit

Sharing Plan and Trust (the Plan)

Located in Beachwood, OH; Proposed

Exemption

[Application No. D–10771]

The Department is considering

granting an exemption under the

authority of section 408(a) of the Act

and section 4975(c)(2) of the Code and

in accordance with the procedures set

forth in 29 CFR Part 2570, Subpart B (55

FR 32836, 32847, August 10, 1990). If

the exemption is granted, the

restrictions of sections 406(a) and

406(b)(1) and (b)(2) of the Act and the

sanctions resulting from the application

of section 4975 of the Code, by reason

of section 4975(c)(1)(A) through (E) of

the Code, shall not apply to the (1) cash

sale by the Plan, occurring on December

30, 1997, of certain assets (the Assets),

to Mr. Warren L. Wolfson, a party in

interest with respect to the Plan; and (2)

the prospective cash resale of the Assets

by the Plan to Mr. Wolfson. The proposed exemption is subject to

the following conditions: (a) Each sale of the Assets was or will

be a one-time transaction for cash.

(b) The Plan received or will receive

no less than the fair market value of the

Assets at the time of each sale.

(c) The sales price for each Asset was

determined or will be determined by a

qualified, independent appraiser at the

time of each sale transaction.

(d) The terms of the past and

prospective sales transactions were or

will be no less favorable to the Plan than

those obtainable in similar transactions

negotiated at arm’s length with

unrelated parties. (e) The Plan did not incur any fees or

commissions in connection with the

past sale of the Assets nor will it incur

any fees or commissions expenses with

respect to the prospective sale of such

Assets.

(f) Within 60 days of the publication,

in the Federal Register, of the notice

granting this proposed exemption, Mr.

Wolfson will file a Form 5330 with the

Internal Revenue Service (the Service)

and pay all appropriate excise taxes that

may be due and owing with respect to

prohibited transactions arising in

connection with certain of the Assets.

Effective Date: If granted, this

proposed exemption will be effective as

of December 30, 1997 with respect to

the initial sale of the Assets by the Plan

to Mr. Wolfson. In addition, this

proposed exemption will be effective as

of the date of the grant with respect to

the resale of the Assets by the Plan to

Mr. Wolfson.

Summary of Facts and Representations

1. The Plan, which was established on

December 16, 1983, is a defined

contribution plan covering all eligible

employees of W.W. Extended Care, Inc.;

Richfield Nursing Center, Inc.; Villa

Nursing Corporation; Cleveland Golden

Age Hospital, Inc.; Pebble Creek

Convalescent Center of Ohio, Inc.;

Belcare, Inc.; LTC Remedies, Inc.;

Richmond Nursing, Inc.; Wyatt Woods,

L.L.C., and WLW, Inc., companies

which have common ownership. As of

December 31, 1999, the Plan had 710

participants and aggregate assets of

approximately $3,306,853.

The Plan provides for participantdirected investments for its 401(k)

portion. Investment discretion over the

profit sharing portion of the Plan is

exercised by Warren L. Wolfson, who

serves as the Plan trustee. Mr. Wolfson

is also a principal of W.L.W., Inc. (the

Employer), which operates a chain of

six long-term care facilities and an

associated management company in

northeast Ohio. The Employer does

business under trade name ‘‘Care

Services Associates.’’

2. To provide a more cohesive

investment policy and reduce overall

administrative costs to the Plan, the

Employer and Mr. Wolfson wished to

consolidate the Plan’s investments with

one investment adviser. The new

investment adviser, The Heitner

Corporation (Heitner), advised the

Employer and Mr. Wolfson to dispose of

certain of the Plan’s investments

inasmuch as Heitner did not desire to

hold and manage these Assets.1 The

specific Assets targeted by Heitner

included the Plan’s investments in six

bonds issued by the Government of

Israel (the Israel Bonds), 50 shares of

common stock in River Glen REIT, Inc.

(the REIT Interests) and a 1⁄4 limited

partnership interest (the 1⁄4 LP Unit) in

the Apartment Opportunity Fund II,

L.P., (the AOF II Partnership ).2

3. The six Israel Bonds, which are set

forth below in the table, were purchased

by the Plan for cash from an unrelated

party between November 1986 and July

1997.

Bond Issuance date Face value Interest rate Maturity

date

One .................................................................... 11/1/86 ......... $25,000 Variable ............................................................ 11/1/98

Two .................................................................... 11/1/88 ......... 25,000 Variable ............................................................ 11/1/00

Three ................................................................. 11/1/90 ......... 25,000 Variable ............................................................ 3/31/02

Four ................................................................... 11/1/93 ......... 25,000 6.0%, Fixed ...................................................... 9/30/03

Five .................................................................... 10/1/95 ......... 25,000 Variable ............................................................ 1/31/03

Six ..................................................................... 7/1/97 ........... 25,000 7.5%, Fixed ...................................................... 5/31/07

The Israel Bonds were acquired by the

Plan for their $25,000 face value and

have (or had) terms ranging from 8 to 12

years. With the exception of Bond One,

which matured on November 1, 1998,

the other Israel Bonds are still in

existence. Bonds One, Two, Three and

Five carry (or carried) variable interest

rates, based on the average of the prime

rates quoted by Bank of America

National Trust & Savings Association,

Continental Bank, N.A. and Citibank,

N.A. Bonds Four and Six bear fixed

interest rates of 6 percent and 7.5

percent per annum. Interest has been

paid on the Israel Bonds twice per year.

During 1997, the Plan received interest

payments on the Israel Bonds of

$11,109.41.

4. On July 25, 1997, the Plan acquired

25 shares of common stock comprising

Federal Register / Vol. 65, No. 211 / Tuesday, October 31, 2000 / Notices 65013

3Specifically, Mr. Wolfson attempted to sell. the

Israel Bonds to several business acquaintances.

However, these persons did not wish to purchase

the Israel Bonds at that time due to their cost. With

respect to the REIT Interests and the 1⁄4 LP Unit, Mr.

Wolfson was informed by officials at River Glen

REIT and General Capital Corporation, respectively,

that there was no buyers available to acquire these

Assets.

4The Department has no jurisdiction with respect

to section 53.491(e)–(c)(1) of the Foundation Excise

Tax Regulations (the FETR). This provision applies

to prohibited transactions under section 4975 of the

Code by reason of Temporary Pension Excise Tax

Regulation 141.4975–13. Under section 53.4941(e)–

1(c)(1) of the FETR, any correction pursuant to Code

section 4941 is not an act of self-dealing. Similarly,

the Department has determined that the correction

of a prior prohibited transaction is not a prohibited

transaction under section 406 of the Act. Therefore,

the Department expresses no opinion herein on

whether the return of the Assets by Mr. Wolfson to

the Plan was a proper correction.

5Specifically, the Plan repurchased the Israel

Bonds for $150,000, the REIT Interests for $50,000

and the 1⁄4 LP Unit for $22,500, for a total

reacquisition price of $222,500. Along with the

$18,290.56 total restoration payment made by Mr.

Wolfson, the Plan received a total payback of

$240,790.56 with respect to the subject Assets.

the REIT Interests from River Glen REIT,

Inc. (River Glen REIT), an unrelated

party, for $25,000. On September 11,

1997, the Plan acquired an additional 25

shares comprising the REIT Interests

from River Glen REIT for $25,000. The

Plan paid the consideration in cash. The

REIT Interests are assignable only with

the consent of River Glen REIT.

The seller, River Glen REIT, is a

Virginia corporation that qualifies as a

real estate investment trust for federal

income tax purposes. River Glen REIT

owns a 99 percent limited partnership

interest in River Glen of Orlando

Partners, Ltd. (the River Glen

Partnership), which, in turn, owns a 396

residential unit located in Orlando,

Florida. In addition, River Glen REIT

has 5,800 shares of common stock

authorized and outstanding with a par

value of $1,000 per share.

During 1997, the Plan received no

distributions with respect to the REIT

Interests.

5. On February 24, 1997, the Plan

purchased the 1⁄4 LP Unit in the AOF II

Partnership, from General Capital

Corporation, an unrelated party, for a

cash purchase price of $25,000. The

AOF II Partnership is a Tennessee

limited partnership which was

organized on January 10, 1996 for the

purpose of owning and operating

apartment complexes located in Florida

and Tennessee. The general partner (the

General Partner) of the AOF II

Partnership is General Capital

Associates II, L.P., an affiliate of General

Capital Corporation. The AOF II

Partnership makes quarterly

distributions to investors at an annual

rate of 8 percent and anticipates selling

or refinancing its underlying

investments within 4 to 7 years after

acquisition. Sales of AOF II Partnership

interests, such as the 1⁄4 LP Unit, require

the approval of the General Partner.

During 1997, the Plan received a

distribution of $1,086 from the AOF II

Partnership with respect to the 1⁄4 LP

Unit.

6. Because the subject Assets are not

publicly-traded, Mr. Wolfson, as Plan

trustee, attempted to locate prospective

purchasers. In this regard, Mr. Wolfson

contacted the sellers from whom the

Assets were purchased to determine

whether there was a secondary market. 3

Upon learning that there was no

secondary market for these Assets, Mr.

Wolfson sought the advice of his

accountant, who purportedly advised

him to purchase the Assets, in his

individual capacity, at their fair market

value.

The fair market value of each of the

Assets was determined by the entities

from which they had been acquired.

With respect to the Israel Bonds, the fair

market value of such instruments was

deemed to be equal to their face value

by Ms. Evelyn Epstein of the State of

Israel Bond Office in Cleveland, Ohio.

In a verbal consultation with Mr.

Wolfson, Ms. Epstein placed the

aggregate fair market value of the Israel

Bonds at $150,000 as of December 30,

1997.

In addition, by letter dated December

16, 1997, William J. Gordon, President

of River Glen REIT, advised Mr.

Wolfson that the fair market value of

River Glen REIT common stock was

$1,000 per share as of that date.

Therefore, Mr. Gordon placed the total

value of the Plan’s River Glen REIT

Interests at $50,000.

Further, on December 22, 1997,

Maclin Davis, III, Controller/Secretary of

the General Partner, informed Mr.

Wolfson, in writing, that because there

were no secondary market transactions

in the AOF II Partnership interests, the

best measure of the fair market value of

the 1⁄4 LP Unit was its original cost of

$22,500.

Based upon the aforementioned

valuations of the Assets, Mr. Wolfson

obtained the requisite consents from the

issuers and individually purchased all

of the Israel Bonds, the REIT Interests

and the 1⁄4 LP Unit from the Plan at their

respective fair market values on

December 30, 1997 for a total cash

purchase price of $222,500. The Plan

paid no fees or commissions in

connection with the sale. In January

1998, all of the remaining assets were

transferred to Heitner for investment

management.

7. In December 1998, the Plan’s

auditors discovered a $2,500 shortfall in

the purchase price Mr. Wolfson had

paid for the Assets. The discrepancy

was attributed solely to the 1⁄4 LP Unit

for which Mr. Wolfson had erroneously

paid $2,500 less than its fair market

value through no fault of his own. The

problem stemmed from Mr. Davis’s

December 22, 1997 letter to Mr. Wolfson

in which Mr. Davis had mistakenly

noted that the 1⁄4 LP Unit’s original cost

was $22,500. This amount actually

reflected the adjusted income tax basis

for the 1⁄4 LP Unit rather than its true

original cost of $25,000.

Therefore, in an effort to resolve the

pricing error, the Plan’s auditors

established a $2,500 account receivable,

which was to be owed to the Plan by

Mr. Wolfson. The auditors also

recommended that the receivable carry

an interest rate of 10 percent per annum

from the time of the December 30, 1997

sale transaction. No other loan terms

were negotiated by the Plan and Mr.

Wolfson. No promissory note was ever

executed and the loan amount was

unsecured.

8. Also in December 1998, the Plan’s

auditors were advised by their legal

counsel that the December 1997 sale

had resulted in a prohibited transaction

in violation of the Act. In order to

‘‘correct’’ the prohibited transaction,

counsel advised the auditors to resell

the Assets to the Plan for their fair

market value. Accordingly, on

December 31, 1998, Mr. Wolfson sold all

of the previously purchased Assets back

to the Plan at what was believed to be

no more than the fair market value of

such Assets.4 The receivable owed to

the Plan was also canceled. Further, Mr.

Wolfson made a total restoration

payment to the Plan of $18,290.56. Of

this amount, $2,000.00 represented a

distribution from the AOF II

Partnership, $4,269.00 represented a

dividend on the REIT Interests, $819.00

represented a non-taxable distribution

attributed to the REIT Interests,

$9,312.50 represented interest derived

from the Israel Bonds, for a subtotal of

$16,400.50. Of the subtotal, Mr. Wolfson

made a 10 percent interest payment to

the Plan in the amount of $1,640.06. In

addition, Mr. Wolfson made a cash

payment to the Plan of $250, reflecting

a 10 percent interest factor on the

receivable for its one year duration.5

Between January 1999 and August

2000, the Plan has received additional

income with respect to the subject

Assets. In regard to the Israel Bonds and

the REIT Interests, the Plan has received

total interest payments and distributions

of $23,953 and $7,176, respectively. In

65014 Federal Register / Vol. 65, No. 211 / Tuesday, October 31, 2000 / Notices

6To recap, during 1997 and between January

1999 and August 2000, the Plan has received—

• $44,374.91 in interest payments with respect to

the Israel Bonds for which it had paid an aggregate

regard to the 1⁄4 LP Unit, the Plan has

received a total distribution of $11,457.

9. Mr. Wolfson believes that the

safeguards necessary for the granting of

a prospective exemption were present at

the time the original sale transaction

was consummated. It is represented that

Mr. Wolfson acted in good faith and

took reasonable and appropriate steps to

protect the Plan from abuse and

unnecessary risks by restoring the

Assets to the Plan, returning all income

and distributions he had received and

making interest payments upon

discovery that the transaction was

prohibited. In addition, Mr. Wolfson

represents that at no time was he aware

that he was engaging in a prohibited

transaction.

In this regard, the Department notes

that there was no contemporaneous,

written valuation for the Plan’s sale of

the Israel Bonds to Mr. Wolfson.

Instead, Mr. Wolfson relied upon the

oral valuation of Ms. Epstein to

establish the fair market value of the

Israel Bonds. In addition, with respect

to the Plan’s acquisition and holding of

the $2,500 account receivable, the terms

of this arrangement did not appear to

reflect arm’s length dealings between

the parties since the loan was never

collateralized, and there was no

independent fiduciary to protect the

interests of the Plan and its participants

and beneficiaries.

Due to the absence of adequate

independent safeguards necessary for

the granting of an administrative

exemption in both instances, the

Department has decided not to provide

exemptive relief for these transactions.

Therefore, Mr. Wolfson represents that

within sixty days of the publication, in

the Federal Register, of the notice

granting this proposed exemption, he

will file a Form 5330 with the Service

and pay all appropriate excise taxes that

are due and owing with respect to the

Plan’s sale of the Israel Bonds and the

extension of credit transaction.

10. Aside from the retroactive

exemption request involving the sale by

the Plan to Mr. Wolfson of the REIT

Interests and the 1⁄4 LP Unit, Mr.

Wolfson is also seeking a prospective

exemption from the Department which,

if granted, will allow the Plan to resell

the Assets to him, in his personal

capacity. It is represented that the

prospective exemption will simplify

Plan administration, reduce

recordkeeping costs, and ensure that the

Plan receives a return on the Assets in

excess of its original investment, and

allow the Plan to dispose of illiquid

assets. The proposed resale of the Assets

will be a one-time transaction for cash

and the Plan will receive fair market

value for the Assets as determined by a

qualified, independent appraiser. The

Plan will not be required to pay any fees

or commissions in connection with the

resale of the Assets.

11. Donald C. May, CPA/ABV, CVA,

a qualified, independent appraiser

affiliated with the accounting firm of

Howard Wershable & Co. of Cleveland,

Ohio has valued the Assets for purposes

of their potential resale. Following is a

discussion of Mr. May’s valuations of

each of the subject Assets.

(a) Israel Bonds. In an appraisal report

dated June 5, 2000, Mr. May valued the

Israel Bonds as of April 15, 2000. With

respect to Bonds Two, Three and Five,

Mr. May concluded that the $25,000

face value of these Israel Bonds would

be indicative of their fair market value

as of April 15, 2000. He also noted that

Bond One, which matured on November

1, 1998, was redeemed for its $25,000

face value.

With respect to Bond Four, Mr. May

noted that as of April 15, 2000, rates on

U.S. Treasury Notes having terms that

were similar to the remaining term on

Bond Four increased to 6.21 percent.

Therefore, he placed the fair market

value of Bond Four at $23,028 as of

April 15, 2000.

With respect to Bond Six, Mr. May

observed that as of April 15, 2000, the

rate on U.S. Treasury Notes having

terms similar to the remaining term of

Bond Six was 6.16 percent. Because

overall market interest rates had fallen

since Bond Six’s acquisition on July 1,

1997, he projected the fair market value

of Bond Six, which carries a 7.5 percent

fixed rate, to be $26,178 as of April 15,

2000.

In summary, the fair market values of

each of the Israel Bonds, as determined

by Mr. May, are reflected in the

following table:

Bond Face value

Fair market

value as of

4/15/00

One ................... $25,000 Matured

Two ................... 25,000 $25,000

Three ................ 25,000 25,000

Four .................. 25,000 23,028

Five ................... 25,000 25,000

Six ..................... 25,000 26,178

Total .............. .................... 124,206

(b) REIT Interests. In an appraisal

report dated May 17, 2000, Mr. May

stated that the fair market value of a

REIT unit should be determined by the

value of the properties underlying the

REIT. Because River Glen REIT owns a

99 percent interest in a parcel of

property known as the ‘‘Heather Glen,’’

Mr. May believed that the book value of

River Glen REIT, adjusted for the

accumulated depreciation of Heather

Glen, would reflect the fair market value

of River Glen REIT as of April 15, 2000.

Based on the fact that management

had been able to raise rents and

occupancy for the property and the local

economy had remained strong, Mr. May

stated that the fair market value of the

underlying property would at least be

equal to its original cost. Although

financial information was only available

through December 31, 1999, Mr. May

observed that there were no events

which would significantly affect the

value of the underlying property and

require adjustments to other assets or

liabilities. Therefore, Mr. May placed

the fair market value of the REIT

Interests at $57,500 (or $1,150 per share)

as of April 15, 2000.

(c) The 1⁄4 LP Unit. In an appraisal

report dated May 15, 2000, Mr. May also

noted that the fair market value of a real

estate partnership unit should be

determined by the value of the

underlying properties in the

partnership. Because the AOF II

Partnership properties had been

acquired in recent years, Mr. May

asserted that the book value of such

properties, with an adjustment for

accumulated depreciation, would

reasonably reflect the value of such

properties as of April 15, 2000.

Based on the fact that management

had been able to raise rents and

occupancy for most of the properties

and the local economies had remained

stable or increased, Mr. May stated that

the fair market value of the underlying

properties was at least equal to their

original acquisition costs. Although at

the time of his appraisal, Mr. May stated

that financial information was available

through December 31, 1999, he noted

that no events had taken place that

would significantly affect the value of

the 1⁄4 LP Unit and require adjustments

to other assets or liabilities. Therefore,

as of April 15, 2000, Mr. May placed the

fair market value of the 1⁄4 LP Unit at

$25,000. He also noted that there had

been no recent sales of AOF II

Partnership units.

12. Thus, based upon Mr. May’s

valuations of the Assets as of April 15,

2000, Mr. Wolfson proposes to purchase

the five remaining Israel Bonds from the

Plan for $124,206, the REIT Interests for

$57,500 and the 1⁄4 LP Unit for $25,000,

which reflects the fair market value of

such Assets. The aggregate purchase

price of $206,706 6 will be paid by Mr.

Federal Register / Vol. 65, No. 211 / Tuesday, October 31, 2000 / Notices 65015

purchase price of $150,000. Thus, the Plan’s total

net cost with respect to the Israel Bonds (excluding

Bond One which matured on November 1, 1998 and

was subsequently redeemed by the Plan for its

$25,000 face value) is $80,625.09.

• $12,624 in distributions with respect to the

REIT Interests. Because the Plan paid $50,000 for

the REIT Interests, its net cost with respect to this

investment is $37,376.

• $13,457 in distributions from the AOF II

Partnership. Because the Plan had acquired the 1⁄4

LP Unit for $22,500, its net cost with respect to the

1⁄4 LP Unit is $9,043.

Thus, the Plan’s overall net cost with respect to

the Assets is $127,044.09.

7Because Bruce Gillespie is the sole shareholder

of the Employer and he and his wife, Ann Gillespie,

are the only participants in the Plan, there is no

jurisdiction under Title I of the Act pursuant to 29

CFR 2510.3–3(b). However, there is jurisdiction

under Title II of the Act under section 4975 of the

Code.

8The Department is expressing no opinion as to

whether the acquisition and holding of the Land by

the Plan was a prohibited transaction under section

4975(c)(1)(D) and (E) of the Code, and no relief is

provided herein.

Wolfson to the Plan in cash. Mr. May

will update his valuations of the Assets

on the date of the sale.

13. In summary, it is represented that

the transactions have satisfied or will

satisfy the statutory exemptive relief

that is available under section 408(a) of

the Act because:

(a) Each sale of the Assets was or will

be a one-time transaction for cash.

(b) The Plan received or will receive

no less than the fair market value of the

Assets at the time of each sale.

(c) The sales price for each Asset was

determined or will be determined by a

qualified, independent appraiser at the

time of each sale transaction.

(d) The terms of the past and

prospective sales transactions were or

will be no less favorable to the Plan than

those obtainable in similar transactions

negotiated at arm’s length with

unrelated parties.

(e) The Plan did not incur any fees or

commissions in connection with the

past sale of the Assets nor will it incur

any fees or commissions expenses with

respect to the prospective sale of such

Assets.

(f) Within 60 days of the publication,

in the Federal Register, of the notice

granting this proposed exemption, Mr.

Wolfson will file a Form 5330 with the

Service and pay all appropriate excise

taxes that may be due and owing with

respect to the sale of the Israel Bonds

and the extension of credit transaction.

FOR FURTHER INFORMATION CONTACT: Ms.

Jan D. Broady, Department of Labor,

telephone (202) 219–8881. (This is not

a toll-free number.)

Gillespie Real Estate Professional

Corporation Defined Benefit Plan (the

Plan) Located in Phoenix, Arizona;

Proposed Exemption

[Applicant No. D–10880]

The Department is considering

granting an exemption under the

authority of section 4975(c)(2) of the

Code and in accordance with the

procedures set forth in 29 CFR Part

2570, subpart B (55 FR 32836, August

10, 1990). If the exemption is granted,

the sanctions resulting from the

application of section 4975 of the Code,

by reason of section 4975 (c)(1)(A)

through (E) of the Code, shall not apply

to the proposed cash sale (the Sale) of

a certain residential lot (the Property) by

the Plan7 to Bruce and Ann Gillespie

(the Applicants), disqualified persons

with respect to the Plan, provided that

the following conditions are met:

(a) The Sale is a one-time transaction

for cash;

(b) The terms and conditions of the

Sale are at least as favorable to the Plan

as those obtainable in an arm’s length

transaction with an unrelated party;

(c) The Plan receives the greater of

$450,000 or the fair market value of the

Property at the time of the Sale; and

(d) The Plan is not required to pay

any commissions, costs or other

expenses in connection with the Sale.

Summary of Facts and Representations

1. The Plan is a defined benefit plan

which was established by the

Applicants, the sole participants and

beneficiaries. As of March 6, 2000, the

Plan held assets valued at

approximately $1.9 million. The

trustees of the Plan are Bruce and Ann

Gillespie.

2. The Property is a 34,372 square foot

residential lot located at Forest

Highlands, Lot 781, Coconino County,

Arizona.

According to the Applicants, the Plan

originally acquired the Property as a real

estate investment. The Plan purchased

the Property in June 24, 1998, from an

unrelated third party, the Homeowners

Association of the Forest Highlands.8

First of American Mortgage served as

the lender for the Plan’s mortgage. The

purchase price of the Property including

settlement charges was $343,350.57.

The Plan paid a cash deposit of

$168,133.07 and financed the balance of

the purchase price.

The Applicants represent that the

only expenditures the Plan has paid

since owning the Property are $2,397.46

in property taxes, $5,729.08 in

association fees, and $13,977.81 in loan

interest payments from 1998 (i.e., the

year of original acquisition) until

August 18, 2000. Therefore, the total

cost to the Plan for the Property is

$365,454.92 as of August 18, 2000

($343,350.57 + $2,397.46 + $13,977.81 +

$5,729.08 = $365,454.92). From the time

of the purchase through August 18,

2000, the Property has remained vacant

and no income has been generated.

The Applicants represent that the

Property has not been leased to, or used

by, any disqualified persons.

3. The Applicants request an

exemption for the Sale. The Applicants

represent that the proposed transaction

would be feasible because it would be

a one-time transaction for cash.

Furthermore, the Applicants state that

the transaction would be in the best

interest of the Plan because the Sale

would enable the Plan to invest the

proceeds from the Sale in assets with a

higher rate or return. The Applicants

desire to sell the Property because they

wish to build a personal residence on

the lot. Finally, the Applicants assert

that the transaction will be protective of

the rights of the Plan’s participants and

beneficiaries as indicated by the fact

that the Plan will receive the fair market

value of the Property, as determined by

a qualified, independent appraiser on

the date of the Sale, and will incur no

commissions, costs, or other expenses as

a result of the Sale.

4. Stephen G. Leach (Mr. Leach), an

accredited appraiser with Cushman &

Wakefield of Arizona, Inc., located in

Phoenix, Arizona, appraised the

Property on September 5, 2000. Mr.

Leach states that he is a full time

qualified, independent appraiser, as

demonstrated by his status as a Certified

Residential Real Estate Appraiser

licensed by the State of Arizona. In

addition, Mr. Leach represents that both

he and his firm are independent of the

Applicants.

In his appraisal, Mr. Leach relied

primarily on the sales comparison

approach. According to Mr. Leach, this

method best represents the actions of

buyers and sellers in the market place.

This method of appraisal involves an

analysis of similar recently sold

properties in the area in question so as

to derive the most probable sales price

of the Property. Mr. Leach’s appraisal

indicates that he compared the Property

to nine recently sold lots in the Forest

Highland’s complex before reaching a

conclusion as to the value of the

Property. After inspecting the Property

and analyzing all relevant data, Mr.

Leach determined that a fee simple

interest in the Property had a fair market

value of approximately $450,000, as of

September 5, 2000.

5. In summary, the Applicants

represent that the proposed transaction

satisfies the statutory criteria of section

4975(c)(2) of the Code because: (a) The

terms and conditions of the Sale would

65016 Federal Register / Vol. 65, No. 211 / Tuesday, October 31, 2000 / Notices

be at least as favorable to the Plan as

those obtainable in an arm’s length

transaction with an unrelated third

party; (b) the Sale would be a one-time

cash transaction allowing the Plan to

divest itself of the Property and reinvest

the proceeds of the Sale in assets that

will yield a higher rate of return; (c) the

Plan would receive an amount equal to

the greater of $450,000, which

represents the appraised fair market

value of the Property, as appraised by

Mr. Leach in September 2000, or the fair

market value of the Property at the time

of the Sale, based on an updated

appraisal of the Property by Mr. Leach

or another independent, qualified

appraisal; and (d) the Plan would not be

required to pay any commissions, costs

or other expenses in connection with

the Plan.

Notice to Interested Parties: Because

Mr. Gillespie is the sole shareholder of

the Employer and he and his wife, Ann

Gillespie, are the only participants in

the Plan, it has been determined that

there is no need to distribute the notice

of proposed exemption (the Notice) to

interested persons. Comments and

requests for a hearing are due thirty (30)

days after publication of the Notice in

the Federal Register.

FOR FURTHER INFORMATION CONTACT:

Khalif Ford of the Department,

telephone (202) 219–8883 (this is not a

toll-free number).

General Information

The attention of interested persons is

directed to the following:

(1) The fact that a transaction is the

subject of an exemption under section

408(a) of the Act and/or section

4975(c)(2) of the Code does not relieve

a fiduciary or other party in interest or

disqualified person from certain other

provisions of the Act and/or the Code,

including any prohibited transaction

provisions to which the exemption does

not apply and the general fiduciary

responsibility provisions of section 404

of the Act, which, 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) Before an exemption may be

granted under section 408(a) of the Act

and/or section 4975(c)(2) of the Code,

the Department must find that the

exemption is administratively feasible,

in the interests of the plan and of its

participants and beneficiaries, and

protective of the rights of participants

and beneficiaries of the plan;

(3) The proposed exemptions, if

granted, will be supplemental to, and

not in derogation of, any other

provisions of the Act and/or the Code,

including statutory or administrative

exemptions and transitional 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

(4) The proposed exemptions, if

granted, will be subject to the express

condition that the material facts and

representations contained in each

application are true and complete, and

that each application accurately

describes all material terms of the

transaction which is the subject of the

exemption.

Signed at Washington, DC, this 25th day of

October 2000.

Ivan Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

U.S. Department of Labor.

[FR Doc. 00–27915 Filed 10–30–00; 8:45 am]

BILLING CODE 4510–29–P

NATIONAL ARCHIVES AND RECORDS

ADMINISTRATION

Services for Persons With Limited

English Proficiency; Comment

Request

AGENCY: National Archives and Records

Administration (NARA).

ACTION: Notice.

SUMMARY: The public is invited to

comment on National Archives and

Records Administration (NARA)

programs and activities available to

persons with limited English

proficiency (LEP) and steps that the

agency could take to ensure that persons

with LEP have meaningful access to

NARA services. NARA will use the

information gathered from this notice

and other outreach efforts to develop a

plan to improve access to its programs

and activities by eligible LEP persons.

DATES: Written comments should be

received on or before November 30,

2000.

ADDRESSES: Comments should be sent

to: Comments on Services for Persons

with Limited English Proficiency, Attn:

Diane Dimkoff (NWCC), Room 2400,

National Archives and Records

Administration, 8601 Adelphi Rd,

College Park, MD 20740–6001; faxed to

301–713–7482; or electronically mailed

to comments@arch2.nara.gov.

FOR FURTHER INFORMATION CONTACT:

Requests for additional information

should be directed to Diane Dimkoff at

telephone number 301–713–6107, or fax

number 301–713–7482.

SUPPLEMENTARY INFORMATION:

Background

On August 11, 2000, President

Clinton issued Executive Order 13166,

entitled ‘‘Improving Access to Services

for Persons With Limited English

Proficiency.’’ 65 FR 50119 (August 16,

2000). The Executive Order directs each

Federal agency to examine the services

it provides to persons who, as a result

of national origin, are limited in their

English proficiency. Agencies must then

develop a plan and implement measures

that will enable persons with LEP to

have meaningful access to the agency’s

programs and activities, consistent with

the fundamental mission of the agency.

NARA will submit its LEP plan to the

Department of Justice for review and

approval by December 11, 2000.

As part of this process, NARA is

consulting its stakeholders for input on

the needs of persons with LEP. NARA

is requesting comment from persons

with LEP, their representative

organizations, as well as grant

applicants and recipients, and any other

individuals or entities that make use of

NARA programs, facilities, activities

and financial opportunities.

NARA’s Programs and Activities

NARA establishes policies and

procedures for managing U.S.

Government records and assists Federal

agencies in documenting their activities

and administering records management

programs. NARA preserves and

provides access to the essential

documentation of the three branches of

Government through a nationwide

system of archival facilities, records

storage facilities, and Presidential

Libraries. NARA operates research

rooms, answers written and oral

requests for information on its holdings,

provides copies of records, offers public

programs and exhibits, and makes

information available on its web site at

http://www.nara.gov. The National

Historical Publications and Records

Commission (NHPRC), a statutory body

affiliated with NARA, makes grants

nationwide to help nonprofit and

educational organizations identify,

preserve, and provide access to

materials that document American

history. NARA also publishes Federal

laws and regulations, and Presidential

and other public documents. It also