[Federal Register Volume 76, Number 61 (Wednesday, March 30, 2011)]
[Notices]
[Pages 17720-17726]
[FR Doc No: 2011-7418]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Rel. No. IC-29617; File No. 812-13842]

American Family Life Insurance Company, et al.

March 24, 2011.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order under Section 26(c) of the
Investment Company Act of 1940, as amended (the ``1940 Act'').

-----------------------------------------------------------------------

Applicants: American Family Life Insurance Company (the ``Company''),
American Family Variable Account I (the ``Life Account''), and American
Family Variable Account II (the ``Annuity Account'') (together, the
``Applicants'').

Summary of Application: Applicants request an order of the Commission,
pursuant to Section 26(c) of the 1940 Act, approving the substitution
of shares of the Vanguard Capital Growth Portfolio (``Replacement
Portfolio'') of the Vanguard Variable Insurance Fund (``Vanguard
Fund'') for Service Class 2 Shares of the Fidelity Variable Insurance
Products Growth Portfolio (``Replaced Portfolio'') of the Fidelity
Variable Insurance Products Fund (``Fidelity Fund''), currently held by
the Life Account and the Annuity Account (each an ``Account,''
together, the ``Accounts'') to support variable life insurance and
annuity contracts issued by the Company (collectively, the
``Contracts'').

DATES: Filing Date: The application was filed on November 10, 2010 and
amended and restated on February 28, 2011.

Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Secretary of the
Commission and serving Applicants with a copy of the request,
personally or by mail. Hearing requests must be received by the
Commission by 5:30 p.m. on April 20, 2011, and should be accompanied by
proof of service on Applicants in the form of an affidavit or, for
lawyers, a certificate of service. Hearing requests should state the
nature of the requester's interest, the reason for the request, and the
issues contested. Persons who wish to be notified of a hearing may
request notification by writing to the Secretary of the Commission.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-1090. Applicants, c/o David C. Holman, Esq.,
American Family Life Insurance Company, 6000 American Parkway, Madison,
Wisconsin 53783-0001. Copy to Thomas E. Bisset, Esq., Sutherland Asbill
& Brennan LLP, 1275 Pennsylvania Ave., NW., Washington, DC 20004-2415.

FOR FURTHER INFORMATION CONTACT: Michael L. Kosoff, Branch Chief, at
(202) 551-6754 or Harry Eisenstein, Senior Special Counsel, Office of
Insurance Products, Division of Investment Management, at (202) 551-
6795.

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling<PHONE_NUMBER>.

Applicants' Representation

    1. The Company is a stock life insurance company organized under
Wisconsin law. The Company conducts a conventional life insurance
business and is authorized to transact the business of life insurance,
including annuities, in nineteen States. For purposes of the 1940 Act,
the Company is the depositor and sponsor of each of the Accounts as
those terms have been interpreted by the Commission with respect to
variable life insurance and variable annuity separate accounts.
    2. Under the insurance law of Wisconsin, the assets of each Account
attributable to the Contracts issued through that Account are owned by
the Company, but are held separately from the other assets of the
Company for the benefit of the owners of, and the persons entitled to
payment under, those Contracts. Each Account is a ``separate account''
as defined by Rule 0-1(e) under the 1940 Act, and is registered with
the Commission as a unit investment trust.\1\ Each Account is comprised
of a number of subaccounts and each subaccount invests exclusively in
one of the insurance dedicated mutual fund portfolios made available as
investment vehicles underlying the Contracts. Currently, the Replaced
Portfolio is available as an investment option under the Company's
variable life insurance and variable annuity Contracts.
---------------------------------------------------------------------------

    \1\ File No. 811-10097 (the Life Account); File No. 811-10121
(the Annuity Account).
---------------------------------------------------------------------------

    3. The Life Account is currently divided into nine (9) subaccounts.
The assets of the Life Account support variable life insurance
contracts and interests in the Account offered through such contracts
have been registered under the Securities Act of 1933, as amended (the
``1933 Act''), on Form N-6 (File Nos. 333-44956 and 333-147408).
    4. The Annuity Account is currently divided into nine (9)
subaccounts. The assets of the Annuity Account support variable annuity
contracts and interests in the Account offered through such contracts
have been registered under the 1933 Act on Form N-4 (File No. 333-
45592).

    5. The Fidelity Fund is registered as an open-end management
investment company under the 1940 Act (File No. 811-03329) and
currently offers six (6) investment portfolios, each with multiple
share classes. The Fidelity Fund issues a series of shares of
beneficial interest in connection with each portfolio and has
registered such shares under the 1933 Act on Form N-1A (File No. 002-
75010).
    6. Each portfolio of the Fidelity Fund has entered into an advisory
agreement with Fidelity Management & Research Company (``FMR'') under
which FMR acts as investment adviser for the portfolio. Under each
investment advisory agreement, and subject to the supervision of the
Fidelity Fund board of trustees, FMR has overall responsibility for the
selection of investments in accordance with the investment objective,
policies, and limitations of the portfolio and for handling the
portfolio's business affairs. FMR or its affiliates, subject to the
supervision of the Fidelity Fund board of directors, provide the
management and administrative services necessary for the operation of
each portfolio. Each portfolio of the Fidelity Fund does, however, pay
for the typesetting, printing, and mailing of its proxy materials to
shareholders, legal expenses, and the fees of the custodian, auditor,
and independent trustees, among other fees and expenses.
    7. FMR Co., Inc. (``FMRC''), an investment adviser affiliate of
FMR, has entered into a sub-advisory agreement with FMR under which
FMRC acts as sub-adviser for certain of the portfolios of the Fidelity
Fund, including the Replaced Portfolio. FMRC has day-to-day
responsibility for choosing investments for the Replaced Portfolio. FMR
pays FMRC for providing sub-advisory services.
    8. Fidelity Research & Analysis Company (``FRAC''), an affiliate of
FMR, also serves as sub-adviser for the Fidelity Fund and may provide
investment research and advice for the Fidelity Fund, including the
Replaced Portfolio. Fidelity Management & Research (U.K.) Inc. (``FMR
U.K.''), Fidelity Management & Research (Hong Kong) Limited (``FMR
H.K.''), Fidelity Management & Research (Japan) Inc. (``FMR Japan''),
FIL International Investment Advisors (``FIIA''), FIL Investment
Advisors (U.K.) Ltd. (``FIIA(U.K.)L''), and FIL Investments (Japan)
Limited (``FIJ''), all investment adviser affiliates of FMR, assist FMR
with foreign investments of the Replaced Portfolio.
    9. Neither the Fidelity Fund, any of its portfolios, FMR, FMRC,
FRAC, FMR U.K., FMR H.K., FMR Japan, FIIA, FIIA(U.K.)L, nor FIJ are
affiliated with the Applicants. The Fidelity Fund does not have
manager-of-manager relief for the Replaced Portfolio.
    10. The Vanguard Variable Insurance Fund is registered as an open-
end management investment company under the 1940 Act (File No. 811-
05962) and currently offers fifteen (15) portfolios, including the
Replacement Portfolio. The Vanguard Fund issues a series of shares of
beneficial interest in connection with each portfolio and has
registered such shares under the 1933 Act on Form N-1A (File No. 33-
32216).
    11. Pursuant to an investment advisory agreement between the
Replacement Portfolio and PRIMECAP Management Company (``PRIMECAP''),
PRIMECAP provides investment advisory services to the Replacement
Portfolio. PRIMECAP manages the Replacement Portfolio subject to the
supervision and oversight of the Vanguard Group, Inc. (``Vanguard'')
and the Replacement Portfolio's board of directors. PRIMECAP employs a
multi-portfolio manager approach to managing the Replacement Portfolio.
Six (6) portfolio managers are primarily responsible for the day-to-day
management of the Replacement Portfolio and each portfolio manager is a
principal of PRIMECAP. Each portfolio manager manages a particular
segment of the Replacement Portfolio autonomously; there is no
decision-making by committee with respect to the management of those
segments of the Replacement Portfolio. A small portion of the
Replacement Portfolio's assets is co-managed by individuals in
PRIMECAP's research department. The Replacement Fund pays PRIMECAP an
investment advisory fee quarterly and the fee is a percentage of the
average daily net assets of the Replacement Fund during the most recent
fiscal quarter.
    12. Neither the Vanguard Fund, any of its portfolios, nor PRIMECAP
are affiliated with the Applicants. The Vanguard Fund does not have
manager-of-manager relief for the Replacement Portfolio.
    13. The Contracts are flexible premium variable annuity and
variable life insurance contracts. The variable annuity Contracts
provide for the accumulation of values on a variable basis, fixed
basis, or both, during the accumulation period, and provide settlement
or annuity payment options on a fixed basis.\2\ The variable life
insurance Contracts provide for the accumulation of values on a
variable basis, fixed basis, or both, throughout the insured's life,
and for a substantial death benefit upon the death of the insured.
Under each of the Contracts, the Company reserves the right to
substitute shares of one fund for shares of another, or of another
investment portfolio, including a portfolio of a different management
company.
---------------------------------------------------------------------------

    \2\ Because only fixed annuity payment options are available
under the Contracts, the substitution will not affect Contracts that
have been annuitized.
---------------------------------------------------------------------------

    14. For as long as a variable life insurance Contract remains in
force or a variable annuity Contract has not yet been annuitized, a
Contract owner may transfer all or any part of the Contract value from
one subaccount to another subaccount or to a fixed account. Other than
the Company's right to impose certain limitations to deter market
timing activity, the Contracts do not limit the number of transfers
between the subaccounts or transfers from the subaccounts to the fixed
account for any period of time. The Company does, however, assess a
charge of $25 per transfer for transfers in excess of twelve per
contract year. Guaranteed living benefit rider features are not
available with the Contracts.
    15. The Company proposes to substitute shares of the Replacement
Portfolio for Service Class 2 shares of the Replaced Portfolio
currently held in the Accounts (the ``proposed substitution''). As of
December 31, 2010, 1.05% of the Replaced Portfolio's assets were
invested in the Accounts and would be subject to the proposed
substitution if so invested on the date of the substitution.
    16. Applicants assert that the proposed substitution is part of an
effort by the Company to provide a portfolio selection within the
Contracts that: (1) Provides a more competitive fee structure relative
to other funds in the asset class peer group; (2) provides more
competitive long-term returns relative to other funds in the asset
class peer group; and (3) maintains the goal of offering a mix of
investment options covering basic categories in the risk/return
spectrum.
    17. In year 2000 when the Company first selected the Replaced
Portfolio, the Replaced Portfolio met its desire for a large cap growth
equity investment option. The Replaced Portfolio is positioned on the
aggressive end of the risk/return spectrum for large cap growth
investment options and offered Contract owners a large cap growth
investment option with significant risk. Over the past nine years, the
Replaced Portfolio has significantly underperformed its peers, as
discussed below, leading the Company to reassess the position of its
large cap growth

investment option. In an attempt to improve overall returns for the
large cap growth investment option while providing for a relatively
lower level of risk, the Company decided to select an alternative large
cap growth investment option. Applicants believe the Replacement
Portfolio meets these goals.
    18. The Company believes that an important consideration for the
selection and retention of an investment option under the Contracts is
that the long-term performance (5 years and longer) of the investment
option be competitive as compared to its asset class peer group,
particularly given the limited selection of subaccounts available under
the Contracts. In the Company's judgment, the Replaced Portfolio has
not demonstrated portfolio performance of the standard desired by the
Company. Performance of the Replaced Portfolio has been in the third or
bottom quartile for comparable funds over the last five years, except
for 2007 where performance of the Replaced Portfolio fell within the
first quartile. Further, absolute performance of the Replaced Portfolio
ranks in the bottom quartile for comparable funds over the last 3- and
5-year periods and in the third quartile, close to the bottom quartile,
for the 1-year period.
    19. Replacing the Replaced Portfolio with the Replacement Portfolio
is appropriate and in the best interest of Contract owners because the
stated investment objective, principal investment strategies, and
principal investment risks of the Replacement Portfolio are
substantially similar to those of the Replaced Portfolio, so that
Contract owners will have continuity in investment expectations with
somewhat lower risk. In addition, Applicants note that the net expenses
of the Replacement Portfolio are substantially less than those for the
Replaced Portfolio for the year ended December 31, 2009.
    20. The following charts set out the investment objectives,
principal investment strategies, and principal investment risks of the
Replaced Portfolio and Replacement Portfolio, as stated in their
respective prospectuses.

------------------------------------------------------------------------
           Replaced portfolio                 Replacement portfolio
------------------------------------------------------------------------
Fidelity VIP Growth Portfolio (Service   Vanguard VIF Capital Growth
 Class 2 Shares).                         Portfolio

Investment Objective...................  Investment Objective

Capital appreciation...................  Long-term capital appreciation.

Principal Investment Strategies........  Principal Investment Strategies

FMR normally invests the fund's assets   The Portfolio invests in stocks
 primarily in common stocks of            considered to have above-
 companies FMR believes have above-       average earnings growth
 average growth potential. Companies      potential that is not
 with high growth potential tend to be    reflected in their current
 companies with higher than average       market prices. The Portfolio
 price/earnings (P/E) or price/book (P/   consists predominantly of
 B) ratios. FMR may invest the fund's     large- and mid-capitalization
 assets in securities of foreign          stocks.
 issuers in addition to securities of
 domestic issuers.
In buying and selling securities for
 the fund, FMR relies on fundamental
 analysis, which involves a bottom-up
 assessment of a company's potential
 for success in light of factors
 including its financial condition,
 earnings outlook, strategy,
 management, industry position, and
 economic and market conditions.
FMR may lend the fund's securities to
 broker-dealers or other institutions
 to earn income for the fund. FMR may
 also use various techniques, such as
 buying and selling futures contracts
 and exchange traded funds, to increase
 or decrease the fund's exposure to
 changing security prices or other
 factors that affect security values.
Principal Investment Risks.............  Principal Investment Risks

Stock Market Volatility. The value of    Stock Market Risk. Stock market
 equity securities fluctuates in          risk is the risk that stock
 response to issuer, political, market,   prices overall will decline.
 and economic developments.               Stock markets tend to move in
 Fluctuations can be dramatic over the    cycles, with periods of rising
 short as well as long term, and          prices and periods of falling
 different parts of the market and        prices.
 different types of equity securities    Investment Style Risk.
 can react differently to these           Investment style risk is the
 developments.                            risk that returns from mid-
                                          and large-capitalization
                                          growth stocks will trail
                                          returns from the overall stock
                                          market. Historically, mid-cap
                                          stocks have been more volatile
                                          in price than the large-cap
                                          stocks that dominate the
                                          overall market, and they often
                                          perform quite differently.
                                         Manager Risk. Manager risk is
                                          the risk that poor security
                                          selection or focus on
                                          securities in a particular
                                          sector, category, or group of
                                          companies will cause the
                                          Portfolio to underperform
                                          relevant benchmarks or other
                                          funds with a similar
                                          investment objective.
Foreign Exposure. Foreign securities,
 foreign currencies, and securities
 issued by U.S. entities with
 substantial foreign operations can
 involve additional risks relating to
 political, economic, or regulatory
 conditions in foreign countries. These
 risks include fluctuations in foreign
 currencies; withholding or other
 taxes; trading, settlement, custodial,
 and other operational risks; and the
 less stringent investor protection and
 disclosure standards of some foreign
 markets. All of these factors can make
 foreign investments, especially those
 in emerging markets, more volatile and
 potentially less liquid than U.S.
 investments. In addition, foreign
 markets can perform differently from
 the U.S. market.

Issuer-Specific Changes. Changes in the
 financial condition of an issuer or
 counterparty, changes in specific
 economic or political conditions that
 affect a particular type of security
 or issuer, and changes in general
 economic or political conditions can
 increase the risk of default by an
 issuer or counterparty, which can
 affect a security's or instrument's
 value. The value of securities of
 smaller, less well-known issuers can
 be more volatile than that of larger
 issuers.

``Growth'' Investing. ``Growth'' stocks
 can react differently to issuer,
 political, market, and economic
 developments than the market as a
 whole and other types of stocks.
 ``Growth'' stocks tend to be more
 expensive relative to their earnings
 or assets compared to other types of
 stocks. As a result, ``growth'' stocks
 tend to be sensitive to changes in
 their earnings and more volatile than
 other types of stocks.
In response to market, economic,
 political, or other conditions, FMR
 may temporarily use a different
 investment strategy for defensive
 purposes. If FMR does so, different
 factors could affect the fund's
 performance and the fund may not
 achieve its investment objective.
------------------------------------------------------------------------

    21. The following charts compare advisory fees, other expenses,
total operating expenses, and portfolio turnover rates for the year
ended December 31, 2009, expressed as an annual percentage of average
daily net assets, of the Replaced Portfolio and the Replacement
Portfolio. The Replaced Portfolio is subject to a distribution plan or
shareholder service plan adopted under Rule 12b-1 of the 1940 Act; the
Replacement Portfolio is not subject to such a plan.\3\ Neither the
Replaced Portfolio nor the Replacement Portfolio impose a redemption
fee.
---------------------------------------------------------------------------

    \3\ With regard to the Replaced Portfolio, the principal
underwriter for the Portfolio has entered into an agreement with the
principal underwriter for the Contracts, a wholly-owned subsidiary
of the Company, for the payment of a fee equal to an annual
percentage of the assets of the Replaced Portfolio attributable to
the Contracts for the performance of certain distribution and
shareholder services. With regard to the Replacement Portfolio,
neither the principal underwriter for the Portfolio nor any of the
Replacement Portfolio's other affiliates have entered into a similar
agreement with the Company, the principal underwriter for the
Contracts or any of the Company's other affiliates. As such, neither
the Company nor any of its affiliates will receive revenue sharing
payments from the principal underwriter of the Replacement Portfolio
or from any other affiliates of the Replacement Portfolio.

------------------------------------------------------------------------
                                          Replaced         Replacement
                                          portfolio         portfolio
                                     -----------------------------------
                                        Fidelity VIP
                                      Growth Portfolio  Vanguard Capital
                                       (Service Class   Growth Portfolio
                                        2)  (percent)       (percent)
                                        As of 12/31/09    As of 12/31/09
------------------------------------------------------------------------
Advisory Fees.......................              0.56              0.41
12b-1 Fee...........................              0.25               N/A
Other Expenses......................              0.13              0.04
------------------------------------------------------------------------
    Total Expenses..................              0.94              0.45
Less Contractual Fee, Waivers and                  N/A               N/A
 Expense Reimbursements.............
------------------------------------------------------------------------
    Net Expenses....................              0.94              0.45
Portfolio Turnover..................               134                 8
------------------------------------------------------------------------

    22. The following tables compare the respective asset levels,
expenses ratios and performance data for the Replaced Portfolio and the
Replacement Portfolio for fiscal years 2007, 2008 and 2009 ended
December 31.

----------------------------------------------------------------------------------------------------------------
                                                                Net assets at
    Fidelity VIP Growth Portfolio (Service Class 2 Shares)      end of period    Expense ratio     Total return
                                                                  (dollars)        (percent)        (percent)
----------------------------------------------------------------------------------------------------------------
2007.........................................................      898,204,000             0.90            26.66
2008.........................................................      447,530,000             0.93          (47.31)
2009.........................................................      528,819,000             0.94            27.97

----------------------------------------------------------------------------------------------------------------
                                                                Net assets at
              Vanguard Capital Growth Portfolio                 end of period    Expense ratio     Total return
                                                                  (dollars)        (percent)        (percent)
----------------------------------------------------------------------------------------------------------------
2007.........................................................      344,000,000             0.42            12.48
2008.........................................................      251,000,000             0.42          (30.36)
2009.........................................................      313,000,000             0.45            34.30
----------------------------------------------------------------------------------------------------------------

    23. The following table shows average annual total returns as of
December 31, 2009 for the Replaced Portfolio and the Replacement
Portfolio:

----------------------------------------------------------------------------------------------------------------
                                                                                Since
                              Fund                                  1 year      5 year     inception   Inception
                                                                   (percent)   (percent)   (percent)     date
----------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio (Service Class 2).................       27.97       -0.81       -3.73     1/12/00
Vanguard Capital Growth Portfolio...............................       34.30        4.80        9.63     12/3/02
----------------------------------------------------------------------------------------------------------------

    24. Applicants believe that the Replacement Portfolio is an
appropriate replacement for the Replaced Portfolio for each Contract,
and that the Replacement Portfolio represents an investment option that
is more compatible with the Replaced Portfolio than are any investment
options under the Contracts. The Replacement Portfolio has an
investment objective substantially identical to that of the Replaced
Portfolio. Both pursue their investment objective by investing, under
normal market conditions, in a diversified portfolio of stocks of
companies with above average earnings growth potential. Each relies
upon a fundamental analysis of companies in determining whether to
purchase and sell securities. Each retains the flexibility to invest in
the securities of foreign issuers and in derivative instruments, such
as options, futures and swap agreements.\4\ There are, however, some
distinctions between the way in which the principal investment
strategies are pursued by the Replaced Portfolio and the Replacement
Portfolio.
---------------------------------------------------------------------------

    \4\ Although both the Replaced Portfolio and the Replacement
Portfolio retain the flexibility to invest in derivative
instruments, historically neither Portfolio appears to have
emphasized investment in such instruments. In that regard, the semi-
annual report dated June 30, 2010 and the annual reports dated
December 31, 2009 and 2008 for each Portfolio indicate that the
Portfolio did not invest any assets in derivative instruments as of
the date of those reports.
---------------------------------------------------------------------------

    25. The primary differences in the investment strategies of the
Replaced Portfolio and the Replacement Portfolio manifest in the extent
to which the advisers may invest in small-capitalization companies and
their investment time horizons. For example, the adviser for the
Replacement Portfolio seeks capital appreciation predominately through
investment in mid- and large-capitalization stocks, whereas the
Replaced Portfolio also seeks capital appreciation but does not in any
manner restrict its investment to mid- and large-capitalization
companies. Instead, there is no limitation on the amount of assets the
Replaced Portfolio may invest in small-capitalization companies.
    26. The adviser for the Replacement Portfolio also invests with a
long-term view of three to five years while the adviser for the
Replaced Portfolio does not necessarily invest with such a long-term
view in mind. In each such instance where the Replaced Portfolio's
investment strategy differs from that of the Replacement Portfolio, the
Replaced Portfolio takes on more risk than does the Replacement
Portfolio.
    27. There also is a strong similarity in the principal investment
risks for the Replacement Portfolio and the Replaced Portfolio. The
prospectuses and statements of additional information for both the
Replacement Portfolio and the Replaced Portfolio mention each
portfolio's exposure to stock market risk, risks associated with
investment in foreign issuers and use of derivative instruments, as
well as volatility associated with investment in growth stocks.
    28. Although only the prospectus for the Replacement Portfolio
lists manager risk (i.e., the risk that poor security selection or
focus on securities in a particular sector, category or group of
companies would cause the Portfolio to underperform relevant benchmarks
or other funds with similar investment objectives), and investment
style risk (i.e., the risk that returns from mid- and large-
capitalization growth stocks would underperform the overall stock
market), the Replaced Portfolio invests in the same manner in such
securities resulting in identical risks. In addition, although only the
prospectus for the Replaced Portfolio lists the risk of issuer-specific
changes (i.e., the risk that changes in the financial condition of an
issuer or counterparty, changes in specific economic or political
conditions that affect a particular type of security or issuer, and
changes in general economic or political conditions can increase the
risk of default by an issuer or counterparty, which can affect a
security's or instrument's value), the Replacement Portfolio also
invests in the same manner resulting in similar if not identical risk.
    29. The Replaced Portfolio, however, may invest a larger portion of
its assets in the securities of small-capitalization companies than the
Replacement Portfolio. The value of securities of small-capitalization
companies can be more volatile than that of large- and mid-
capitalization companies. Accordingly, notwithstanding some different
investment risk disclosure in the prospectus for the Replacement
Portfolio, an investment in the Replacement Portfolio should not
necessarily entail any greater risk than an investment in the Replaced
Portfolio, and most likely would entail less risk.
    30. In addition, although the Replacement Portfolio has not yet
achieved a level of assets equal to or greater than the Replaced
Portfolio, the Replacement Portfolio has a significantly lower expense
ratio than the Replaced Portfolio. Also, historically the Replacement
Portfolio has had a significantly lower portfolio turnover rate than
the Replaced Portfolio, which over time may contribute to lower costs
for Contract owners who allocate Contract value to the Replacement
Portfolio subaccount.
    31. For those who are Contract owners on the date of the proposed
substitution, the Company will reimburse, on the last business day of
each fiscal period (not to exceed a fiscal quarter) during the twenty-
four months following the date of the proposed substitution, the
subaccount investing in the Replacement Portfolio such that the sum of
the Replacement Portfolio's total annual fund operating expenses after
fee waiver and/or expense reimbursement and subaccount expenses \5\ for
such period will not exceed, on an annualized basis, the sum of the
Replaced Portfolio's total annual fund operating expenses after fee
waiver and/or expense reimbursement and subaccount expenses for the
fiscal year preceding the date of the proposed substitution. In
addition, for twenty-four months following the proposed substitution,
the Company will not increase asset-based fees or charges for Contracts
outstanding on the date of the proposed substitution.
---------------------------------------------------------------------------

    \5\ Subaccount expenses refer to those asset-based fees and
charges that are deducted on a daily basis from subaccount assets
and are reflected in the calculation of subaccount unit values. The
mortality and expense risk charge is an example of such asset-based
fees and charges.
---------------------------------------------------------------------------

    32. Currently, each Account makes available nine subaccounts as
investment options under the variable life insurance contracts or
variable annuity contracts, as applicable, funded by the Accounts.
Following the proposed substitution, each Account will continue to make
available nine subaccounts as investment options under the variable
life insurance

contracts or variable annuity contracts it funds.
    33. By the May 1, 2011 prospectuses for the Contracts and the
Accounts, the Company will notify owners of the Contracts of their
intention to take the necessary actions, including seeking the order
requested by this amended and restated application, to carry out the
proposed substitution as described herein. The current prospectus for
the Replacement Portfolio, as well as the current prospectuses for all
other portfolios available as investment options available under the
Contracts, will be bound together with the May 1, 2011 prospectuses for
the Contracts and the Accounts.
    34. Applicants represent that the prospectuses for the Contracts
will describe the proposed substitution and the Replaced Portfolio and
Replacement Portfolio, including the fees and expenses of each
Portfolio, and advise the Contract owners that from the date of the
prospectus until the date of the proposed substitution, the Company
will not exercise any rights reserved by it under any Contract to
impose additional charges for transfers until at least 30 days after
the proposed substitution. Similarly, the prospectuses will disclose
that, from May 1, 2011 until the date of the proposed substitution, the
Company will permit Contract owners to transfer Contract value out of
the subaccount currently holding shares of the Replaced Portfolio to
other subaccounts and the fixed account without those transfers being
treated as transfers for purposes of determining the remaining number
of transfers that may be permitted in the Contract year without a
transfer charge. The prospectuses will also advise Contract owners that
if the proposed substitution is carried out, then each Contract owner
affected by the substitution will be sent a written notice (described
immediately below) informing them of the facts and details of the
substitution.
    35. Applicants represent that within five days after the proposed
substitution, Contract owners who are affected by the substitution will
be sent a written notice informing them that the substitution was
carried out. The notice will also reiterate the facts that the Company:
(1) Will not exercise any rights reserved by it under any of the
Contracts to impose additional charges for transfers until at least 30
days after the proposed substitution, and (2) will, for at least 30
days following the proposed substitution, permit such Contract owners
to transfer Contract values out of the subaccount holding shares of the
Replacement Portfolio to other subaccounts and the fixed account
without those transfers being treated as transfers for purposes of
determining the remaining number of transfers permitted in the Contract
year without a transfer charge. The notice as delivered in certain
jurisdictions may also explain that the right of a Contract owner to
make transfers following the procedures described above (in connection
with the proposed substitution) will not affect such Contract owner's
right, under insurance regulations in those jurisdictions, to exchange
his or her Contract for a fixed-benefit life insurance contract or a
fixed-benefit annuity Contract during the 60 days following the
substitution.
    36. Applicants state that the Company will carry out the proposed
substitution by redeeming shares of the Replaced Portfolio held by the
Accounts for cash and applying the proceeds to the purchase of shares
of the Replacement Portfolio. The proposed substitution will take place
at relative net asset value with no change in the amount of any
Contract owner's Contract value or death benefit or in the dollar value
of his or her investment in either of the Accounts. Contract owners
will not incur any fees or charges as a result of the proposed
substitution, nor will their rights or the Company's obligations under
the Contracts be altered in any way. All applicable expenses incurred
in connection with the proposed substitution, including brokerage
commissions and legal, accounting, and other fees and expenses, will be
paid by the Company. In addition, the proposed substitution will not
impose any tax liability on Contract owners. The proposed substitution
will not cause the Contract fees and charges currently being paid by
existing Contract owners to be greater after the proposed substitution
than before the proposed substitution.
    37. Applicants represent that the proposed substitution will not be
treated as a transfer of Contract value for the purpose of assessing
transfer charges or for determining the number of remaining ``free''
transfers in a Contract year. The Company will not exercise any right
it may have under the Contracts to impose additional charges for
Contract value transfers under the Contracts for a period of at least
30 days following the proposed substitution. Similarly, from May 1,
2011 until the date of the proposed substitution, the Company will
permit Contract owners to make transfers of Contract value out of the
Replaced Portfolio subaccount to other subaccounts or the fixed account
without those transfers being treated as transfers for purposes of
determining the remaining number of transfers permitted in the Contract
year without a transfer charge. Likewise, for at least 30 days
following the proposed substitution, the Company will permit Contract
owners affected by the substitution to transfer Contract value out of
the Replacement Portfolio subaccount to other subaccounts or the fixed
account without those transfers being treated as transfers for purposes
of determining the remaining number of transfers permitted in the
Contract year without a transfer charge.
    38. Applicants acknowledge that reliance on the exemptive relief
requested herein, if granted, depends upon compliance with all of the
representations and conditions set forth in this amended and restated
application.
    39. Applicants represent that the Company is also seeking approval
of the proposed substitution from any State insurance regulators whose
approval may be necessary or appropriate.
    40. The Applicants request that the Commission issue an order
pursuant to Section 26(c) of the 1940 Act approving the substitution by
the Company of shares of the Replacement Portfolio for Service Class 2
Shares of the Replaced Portfolio currently held by the Accounts.
    41. Section 26(c) of the 1940 Act requires the depositor of a
registered unit investment trust holding securities of a single issuer
to receive Commission approval before substituting the securities held
by the trust. Specifically, Section 26(c) states:

    It shall be unlawful for any depositor or trustee of a
registered unit investment trust holding the security of a single
issuer to substitute another security for such security unless the
Commission shall have approved such substitution. The Commission
shall issue an order approving such substitution if the evidence
establishes that it is consistent with the protection of investors
and the purposes fairly intended by the policy and provisions of
this title.

    Section 26(c) was added to the 1940 Act by the Investment Company
Amendments of 1970 (the ``1970 Amendments''). Prior to the enactment of
the 1970 Amendments, a depositor of a unit investment trust could
substitute new securities for those held by the trust by notifying the
trust's security holders of the substitution within five days of the
substitution. In 1966, the Commission, concerned with high sales
charges then common to most unit investment trusts and the
disadvantageous position in which such charges placed investors who did
not want to remain invested in the substituted fund, recommended that

Section 26 be amended to require that a proposed substitution of the
underlying investments of a trust receive prior Commission approval.\6\
---------------------------------------------------------------------------

    \6\ In the years leading up to its 1966 recommendation, the
Commission took the position that the substitution of portfolio
securities of a unit investment trust constituted an offer of
exchange under Section 11 of the [1940] Act requiring prior
Commission approval. The Commission proposed Section 26(c) in order
to specifically address substitutions by unit investment trusts
which previously had been scrutinized under Section 11 of the [1940]
Act. See House Committee on Interstate and Foreign Commerce, Report
of the Securities and Exchange Commission on the Public Policy
Implications of Investment Company Growth, H.R. Rep. No. 2337, 89th
Cong., 2d Sess. 337 (1966).
---------------------------------------------------------------------------

    Congress responded to the Commissioners' concerns by enacting
Section 26(c) to require that the Commission approve all substitutions
by the depositor of investments held by unit investment trusts. The
Senate Report on the bill explained the purpose of the amendment as
follows:

    The proposed amendment recognizes that in the case of the unit
investment trust holding the securities of a single issuer
notification to shareholders does not provide adequate protection
since the only relief available to shareholders, if dissatisfied,
would be to redeem their shares. A shareholder who redeems and
reinvests the proceeds in another unit investment trust or in an
open-end company would under most circumstances be subject to a new
sales load. The proposed amendment would close this gap in
shareholder protection by providing for Commission approval of the
substitution. The Commission would be required to issue an order
approving the substitution if it finds the substitution consistent
with the protection of the investors and provisions of the [1940]
Act.\7\
---------------------------------------------------------------------------

    \7\ S. Rep. No. 184, 91st Cong., 1st Sess. 41 (1969), reprinted
in 1970 U.S. Code Cong. & Admin. News 4897, 4936 (1970).

    42. Applicants represent that the proposed substitution appears to
involve the substitution of securities within the meaning of Section
26(c) of the 1940 Act.\8\ Applicants therefore request an order from
the Commission pursuant to Section 26(c) approving the proposed
substitution.
---------------------------------------------------------------------------

    \8\ While Section 26(c), by its terms, applies only to a unit
investment trust holding the securities of one issuer, the
Commission has interpreted Section 26(c) to apply to ``a
substitution of securities in any subaccount of a registered
separate account.'' Adoption of Permanent Exemptions from Certain
Provisions of the Investment Company Act of 1940 for Registered
Separate Accounts and Other Persons, Investment Company Act Rel. No.
12678 (Sept. 21, 1982) (emphasis added).
---------------------------------------------------------------------------

    43. Applicants represent that all the Contracts expressly reserve
for the Company the right, subject to compliance with applicable law,
to substitute shares of one fund or portfolio held by a subaccount of
an Account for another. The prospectuses for the Contracts and the
Accounts contain appropriate disclosure of this right. The Company has
reserved this right of substitution both to protect itself and its
Contract owners in situations where it believes an underlying fund is
no longer appropriate for Contract owners or where either might be
harmed or disadvantaged by circumstances surrounding the issuer of the
shares held by one or more of its separate accounts, and to afford the
opportunity to replace such shares where to do so could benefit itself
and Contract owners.
    44. Applicants maintain that Contract owners will be better served
by the proposed substitution and that the proposed substitution is
appropriate given the Replacement Portfolio, the Replaced Portfolio,
and other investment options available under the Contracts. In the last
four (4) out of the last five (5) years, the Replacement Portfolio has
had investment performance superior to that of the Replaced Portfolio.
In addition, for each one-year, five-year and since inception periods
ended December 31, 2009, the Replacement Portfolio has had investment
performance superior to that of the Replaced Portfolio. The Replacement
Portfolio has also had substantially lower expenses than the Replaced
Portfolio over these same periods.
    45. Applicants believe that the Replacement Portfolio and the
Replaced Portfolio are substantially the same in their stated
investment objectives and principal investment strategies as to afford
investors continuity of investment and risk. In addition, Applicants
generally submit that the proposed substitution meets the standards
that the Commission and its staff have applied to similar substitutions
that have been approved in the past.
    46. Applicants believe that Contract owners will be better off with
the Replacement Portfolio than with the Replaced Portfolio. The
proposed substitution retains for Contract owners the investment
flexibility that is a central feature of the Contracts. If the proposed
substitution is carried out, all Contract owners will be permitted to
allocate purchase payments and transfer Contract values between and
among the remaining subaccounts as they could before the proposed
substitution.
    47. Applicants assert that the proposed substitution is not the
type of substitution that Section 26(c) was designed to prevent. Unlike
traditional unit investment trusts where a depositor could only
substitute an investment security in a manner which permanently
affected all the investors in the trust, the Contracts provide each
Contract owner with the right to exercise his or her own judgment and
transfer Contract values into other subaccounts and the fixed account.
Moreover, the Contracts will offer Contract owners the opportunity to
transfer amounts out of the affected subaccount into any of the
remaining subaccounts without cost or disadvantage. The proposed
substitution, therefore, will not result in the type of costly forced
redemption that Section 26(c) was designed to prevent.
    48. Applicants state that the proposed substitution is also unlike
the type of substitution that Section 26(c) was designed to prevent in
that by purchasing a Contract, Contract owners select much more than a
particular investment company in which to invest their Contract values.
They also select the specific type of coverage offered by the Company
under the Contracts, as well as numerous other rights and privileges
set forth in the Contracts. Contract owners may also have considered
the size, financial condition, type, and reputation for service of the
Company, from whom they purchased their Contract in the first place.
These factors will not change because of the proposed substitution.

Conclusion

    Applicants request an order of the Commission pursuant to Section
26(c) of the 1940 Act approving the proposed substitution by the
Company. Applicants submit that, for all the reasons stated above, the
proposed substitution is consistent with the protection of investors
and the purposes fairly intended by the policy and provisions of the
1940 Act.

    For the Commission, by the Division of Investment Management
pursuant to delegated authority.
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-7418 Filed 3-29-11; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 170 (Tuesday, September 3, 2019)]
[Notices]
[Pages 46094-46095]
[FR Doc No: 2019-18878]

-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2019-0061]

Federal Advisory Committee National Emergency Medical Services
Advisory Council; Notice of Meeting

AGENCY: National Highway Traffic Safety Administration (NHTSA), U.S.
Department of Transportation (DOT).

ACTION: Meeting Notice--National Emergency Medical Services Advisory
Council.

-----------------------------------------------------------------------

SUMMARY: NHTSA announces a meeting of the National Emergency Medical
Services Advisory Council (NEMSAC) to be held at DOT Headquarters in
Washington, DC. This notice announces the date, time, and location of
the meeting, which will be open to the public, as well as provide
opportunities for public input to the NEMSAC. The purpose of NEMSAC, a
nationally recognized council of emergency medical services
representatives and consumers, is to advise and consult with DOT and
the Federal Interagency Committee on Emergency Medical Services
(FICEMS) on matters relating to emergency medical services (EMS).

DATES: The NEMSAC meeting will be held on September 17, 2019, from 9
a.m. to 4:30 p.m. EDT, on September 18, 2019, from 9 a.m. to 4:30 p.m.
EDT (closed to public 11:30) and on September 19, 2019 from 9 a.m. to
4:00 p.m. EDT (closed to public). A public comment period will take
place on September 17, 2019, between 11 a.m. and 11:30 a.m. EDT and
September 18,

2019, between 10:45 a.m. and 11:15 a.m. EDT. Written comments for the
NEMSAC from the public must be received no later than September 9,
2019.

ADDRESSES: The meetings will be held at the DOT Headquarters, 1200 New
Jersey Avenue SE, Washington, DC 20590. Attendees should plan to arrive
10-15 minutes early.

FOR FURTHER INFORMATION CONTACT: Eric Chaney, DOT, Office of Emergency
Medical Services, 1200 New Jersey Avenue SE, NPD-400, Washington, DC
20590<EMAIL_ADDRESS>or<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Notice of the NEMSAC meeting is given under
the Federal Advisory Committee Act, Public Law 92-463, as amended (5
U.S.C. App. 2). The NEMSAC is authorized under Section 31108 of the
Moving Ahead with Progress in the 21st Century Act of 2012.

Tentative Agenda of the National EMS Advisory Council Meeting

    The tentative NEMSAC agenda includes the following:

Tuesday, September 17, 2019 (9 a.m. to 4:30 p.m. EDT)

(1) Call to Order, Introductions, and Opening Remarks (9 a.m. to 9:30
a.m. EDT)
(2) Approval of July 2019 NEMSAC Meeting Minutes (9:30 a.m. to 9:45
a.m. EDT)
(3) Federal Liaison Update
(4) Presentation of Advisories and Recommendations (10:30 a.m. to 10:45
a.m. EDT)
(5) Break (10:45 a.m. to 11 a.m. EDT)
(6) Public Comment (11 a.m. to 11:30 a.m. EDT)
(7) FICEMS Strategic Plan Update/Revision (11:30 a.m. to 12:00 p.m.
EDT)
(8) Lunch (12 p.m. to 1 p.m. EDT)
(9) CMS Emergency Triage, Treat and Transport (ET3) Model (1 p.m. to
1:30 p.m. EDT)
(10) Review of EMS Nomenclature and National EMS Education Standards
Revision (1:30 p.m. to 2 p.m. EDT)
(11) Review of Ongoing NHTSA Projects (2 p.m. to 2:30 p.m. EDT)
(12) Break (2:30 p.m. to 3 p.m. EDT)
(13) Ad Hoc Committee Reports (3 p.m. to 3:30 p.m. EDT)
(14) NEMSIS Update (3:30 p.m. to 4 p.m. EDT)
(15) Review of Action Items (4:00 p.m. to 4:30 p.m. EDT)

Wednesday, September 18, 2019 (9:00 a.m. to 4:30 p.m. EDT)

(1) Reconvene and Introductions (9 a.m. to 9:15 a.m. EDT)
(2) Committee Reports (9:15 a.m. to 10:45 a.m. EDT)
(3) Public Comment (10:45 a.m. to 11:15 a.m. EDT)
(4) Continue Discussion of NEMSAC Focus Areas for 2019-2020 (11:15 a.m.
to 11:30 a.m. EDT)
(5) Closed to Public: Committee Break Out Sessions (12:00 p.m. to 4:00
p.m. EDT)

Closed to Public: Thursday, September 19, 2019 (9:00 a.m. to 4:00 p.m.
EDT)

(1) Committee Instructions (9 a.m. to 9:15 p.m. EDT)
(2) Committee Break Out Sessions (9:15 a.m. to 12:00 a.m. EDT)
(3) Lunch (12:00 a.m. to 1:00 p.m. EDT)
(4) Committee Reports (1:15 a.m. to 4 p.m.)
    Registration Information: This meeting will be open to the public
September 17th and morning of September 18th; however, pre-registration
is requested no later than September 9, 2019, 5 p.m. EDT. For
assistance with NEMSAC registration, please contact Eric Chaney at
<EMAIL_ADDRESS>or<PHONE_NUMBER>. There will not be a teleconference
option for this meeting.
    Public Comment: Members of the public are encouraged to comment
directly to the NEMSAC during designated public comment periods. In
order to allow as many people as possible to speak, speakers are
requested to limit their remarks to 5 minutes. Written comments from
members of the public will be distributed to NEMSAC at the meeting and
should reach the NHTSA Office of EMS no later than September 9, 2019.
Written comments may be submitted by either one of the following
methods: (1) You may submit comments by email<EMAIL_ADDRESS>or (2)
you may submit comments by fax:<PHONE_NUMBER>.
    NHTSA is committed to providing equal access to this meeting for
all participants. If you need alternative formats or services because
of a disability, please contact Eric Chaney at the email or phone
number listed in the ``Registration Information'' section with your
request by close of business on September 9, 2019.
    A final agenda as well as meeting materials will be available to
the public online through www.EMS.gov on or before September 9, 2019.

    Authority: 44 U.S.C. Section 3506(c)(2)(A).

    Issued in Washington, DC.
Jon Krohmer,
Acting Associate Administrator, Office of Research and Program
Development.
[FR Doc. 2019-18878 Filed 8-30-19; 8:45 am]
 BILLING CODE 4910-59-P


[Federal Register: September 1, 2009 (Volume 74, Number 168)]
[Notices]
[Page 45267]
[DOCID:fr01se09-111]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

Sunshine Act Meeting

    Notice is hereby given, pursuant to the provisions of the
Government in the Sunshine Act, Public Law 94-409, that the Securities
and Exchange Commission will hold a Closed Meeting on Thursday,
September 3, 2009 at 2 p.m.
    Commissioners, Counsel to the Commissioners, the Secretary to the
Commission, and recording secretaries will attend the Closed Meeting.
Certain staff members who have an interest in the matters also may be
present.
    The General Counsel of the Commission, or his designee, has
certified that, in his opinion, one or more of the exemptions set forth
in 5 U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) and 17 CFR
200.402(a)(3), (5), (7), 9(ii) and (10), permit consideration of the
scheduled matters at the Closed Meeting.
    Commissioner Walter, as duty officer, voted to consider the items
listed for the Closed Meeting in a closed session.
    The subject matter of the Closed Meeting scheduled for Thursday,
September 3, 2009 will be: Institution and settlement of injunctive
actions; institution and settlement of administrative proceedings; and
other matters relating to enforcement proceedings.
    At times, changes in Commission priorities require alterations in
the scheduling of meeting items.
    For further information and to ascertain what, if any, matters have
been added, deleted or postponed, please contact: The Office of the
Secretary at<PHONE_NUMBER>.

    Dated: August 27, 2009.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-21166 Filed 8-28-09; 4:15 pm]

BILLING CODE 8010-01-P


1 POST 1996 1 HOUR RATE OF PROGRESS PLAN FOR THE BEAUMONT/ PORT ARTHUR ( BPA) NONATTAINMENT AREA This document is to provide a technical review of the revisions to the BPA ozone nonattainment area =

s Post 1996 Rate of Progress Plan.

A. General Requirements:

Section 182( c)( 2) of the CAA requires each serious and above ozone nonattainment area to submit a SIP revision, which describes, how the area will achieve an actual volatile organic compound ( VOC) emission reduction from the baseline emissions of at least 3 percent of baseline emissions per year averaged over each consecutive 3 year period beginning 6 years after enactment ( i. e., November 15, 1996) until the area =

s attainment date. Section 182( c)( 2)( C) explains the conditions under which reductions of oxides of nitrogen ( NOx) may be substituted for reductions in VOC emissions.

B. BPA Background:

On March 30, 2004, EPA issued a final action in the Federal Register reclassifying BPA from moderate 1 hour ozone nonattainment to serious. With this new classification came several requirements including a requirement to provide a revision to the State Implementation plan showing the 182( c) ( 2) rate of progress requirements would be met for 1999, 2002 and 2005.

The Texas Commission of Environmental Quality ( TCEQ) submitted a rate of progress plan for the BPA area in a letter dated November 16, 2004. This document is to review these revisions.

C. Calculation of Target Levels of Emissions To demonstrate that the rate of progress requirements of the Clean Air Act will be met, a State must calculate the target level of emissions for each milestone year. This calculation is complicated by the fact that the Clean Air Act does not allow the plans to take credit for emissions reductions due to federal motor vehicle and Reid vapor pressure control programs that were enacted prior to 1990. Therefore, the reductions from these Federal programs are subtracted from the base line emissions resulting in A adjusted base year @

emission levels. Because as the fleet turns over from year to year the benefits of these programs change, the adjusted base year inventory must be calculated with respect to each milestone year. In addition, the Clean Air Act also requires that reductions that would accrue from correcting deficiencies in the State =

s VOC Reasonably Available Control Technology ( RACT) program, so called RACT fix ups, cannot be credited and must be subtracted from the target level of emissions. These constraints result in a multi step process for calculating the target level of emissions in each of the milestone years. EPA =

s guidance for calculating emission target levels is contained in the document A Guidance on the Post 1996 Rate of Progress Plan and Attainment Demonstration @

( EPA 452/ R 93 015, January 1994). Table 1 below summarizes the calculation of target levels that were provided by 2 TCEQ. EPA has reviewed the calculations and agrees that the target level calculations have been performed correctly. As can be seen in Table 1, for the time periods 1997 1999, 2000 2002, and 2003 2005, TCEQ has substituted NOx reductions for a portion of the VOC reductions.

Table 1: Calculation of VOC and NOx Target Levels of Emissions VOC NOx a. 1990 Emission Inventory 329.56 313.31 b. 1990 Adjusted Relative to 1996 304.97 309.59 c. 15% Reduction/ 0% NOx 45.75 0 d. I/ M Correction 0 0 e. RACT fix ups 4.28 0 f. 1996 Target Level ( b c d e) 254.94 309.59 g. 1990 adjusted to 1999 301.53 309.56 h. 7% Reduction VOC/ 2% NOx 21.1 6.19 i. 1997 1999 fleet turnover correction ( b g) 3.44 0.03 j. 1999 Target level ( f h i) 230.4 303.37 k. 1990 adjusted to 2002 299.70 303.53 l. 0% VOC/ 9% NOx 0.0 27.32 m. Fleet Correction 2000 2002 ( g k) 1.83 6.03 n. 2002 Target ( j l m) 228.57 270.02 o. 1990 adjusted to 2005 298.15 294.87 p. 0% VOC/ 9% NOx 0.0 26.54 q. Fleet Turn Over 2003 2005 ( k o) 1.55 8.66 r. 2005 Target Level ( n p q) 227.02 234.82 3 D. Inputs to the Target Level Calculation It is now necessary to review the inputs to the target level calculations. Examination of Table 1 reveals that the following information is necessary to perform the target level calculations: The 1990 base year inventory, adjusted base year inventories for the years 1996, 1999, 2002 and 2005 and estimates of the reductions due to correction of deficiencies in the RACT and I/ M programs. The RACT deficiencies were estimated and approved as part of the 15% plan approval and will not be re evaluated here. We note that Texas correctly subtracted the emission reductions due to RACT fix ups from the target level so no credit would be taken. BPA was not subject to an I/ M requirement and thus had no I/ M deficiencies. The 1990 inventory and the adjusted base year inventories have been changed in this SIP revision from the previously approved inventories and these changes are discussed below.

Emissions Inventory:

The 1990 Base Year Inventory is the starting point for calculating the reductions necessary to meet the requirements of the 1990 Act. The 1990 Base Year Inventory includes all area, point, non road mobile, and on road mobile source emissions in the 3 county BPA ozone nonattainment area. The 1990 Base Year Inventory was originally approved on November 8, 1994 ( 59 FR 55586). The State revised the 1990 Base Year Inventory on August 8, 1996. These changes for BPA were to the VOC inventory and were approved February 10, 1998 ( 63 FR6659) The new changes to the 1990 Base Year Inventory are summarized in Table 2.

Table 2: 1990 Rate of Progress Base Year Emissions Inventory ( tons per day)

Base Year Inventory Source Type VOC NOx Old New Old New Point 245.35 245.54 221.01 221.01 Area 30.63 24.56 1.44 16.73 On road Mobile 19.11 36.99 41.09 54.94 Non road Mobile 18.44 13.47 60.72 20.63 Total 313.53 320.56 324.26 313.31 These revisions are discussed below.

Area Source Emissions: TCEQ's improvements in activity data and improved emissions factors resulted in major changes to the following area source categories  Oil and Gas Production, Industrial Coatings, Consumer Products, and Stage I Gasoline Marketing. Texas has performed 4 special studies for the categories of Graphic Arts, Oil and Gas Production and Forest Fires and revised the inventory accordingly. These revisions are reflected in the revised inventory.

The updated studies have resulted in a substantial increase in the 1990 base year area source NOx emissions. The changes in NOx emissions are mainly due to the inclusion of NOx emissions from oil and gas production derived from better activity data and emission factors for engines. We have reviewed the specific studies and their protocols and recommend the changes be approved.

The estimate of area source VOC emissions turned out to smaller based on the revised activity data from the studies.

On Road Emissions: TCEQ has recalculated the 1990 on road mobile emissions using MOBILE6, the EPA =

s required model. Otherwise the inputs to the 1990 on road mobile inventory are unchanged. We have reviewed the inputs to the model and its performance and recommend this change be approved.

Off road Emissions Inventory: Appendix 7 in the submitted Plan includes various studies of offroad emissions categories. In particular, TCEQ has included area specific studies of aircraft, locomotive, ship and construction emissions. Using this area specific information and the latest version of the non road model has resulted in a substantial improvement in the inventory, and we recommend approval.

Adjusted Base Year Inventory:

Section 182( b)( 2)( C) explains that the baseline from which emission reductions are calculated should be determined as outlined in section 182( b)( 1)( B) for 15% ROP plans. This requires that the baseline exclude emission reductions due to Federal Motor Vehicle Control Programs ( FMVCP) promulgated by the Administrator by January 1, 1990, and emission reductions due to the regulation of Reid Vapor Pressure promulgated by the Administrator prior to the enactment of the Clean Air Act Amendments of 1990. These measures are not creditable to the Rate of Progress Plans.

EPA =

s mobile emission factor model is used to calculate this value. The model is run setting the input flags to only apply pre 1990 controls. It is run holding the vehicle miles traveled constant at 1990 levels but using the fleet mix projected for the milestone years. In this way, the reductions from fleet turnover and pre 1990 controls are factored out of the baseline calculations. Appendix 2, in the submitted plan, documents these calculations. EPA has reviewed the calculation of adjusted base year inventories and finds them acceptable.

E. Evaluation of NOx Rate of Progress:

Substitution of NOx Emission Reductions: Clean Air Act section 182( c)( 2)( C) allows States to substitute reductions in NOx for the 3%/ year reductions in VOC required by section 182( c)( 2)( B) 5 if the reductions in NOx would result in reductions in ozone concentrations at least equivalent to relying on VOC reductions alone. According to EPA guidance, ( December, 1993 NOx Substitution Guidance) States are required to justify substitution by illustrating A consistency @

with the model attainment demonstration. This guidance was clarified in a memorandum issued August 5, 1994, which set two criteria for states that did not have completed attainment demonstrations 1. The NOx Reasonably Available Control Technology ( RACT) regulations should be adopted and submitted. EPA will have to approve the NOx RACT rules no later than the date of approval of the ROP plan featuring the NOx substitution.

2. At least one of the two following conditions should be met: ( a) modeling of at least one episode should have been completed with photochemical grid modeling which shows that NOx reductions are useful in reducing ozone concentrations; or ( b) a regional modeling analysis supporting use of NOx controls to reduce ozone within the area under consideration for use of NOx substitution should be available.

Texas has submitted revised NOx RACT rules for the Beaumont/ Port Arthur area for the new classification. The RACT rules for the previous classification were evaluated in a separate TSD and Federal register notice to determine if they meet the Clean Air Act Requirement for RACT. They were approved on September 1, 2000 ( 65 FR 53172).

Texas has provided modeling on several occasions indicating that NOx reductions would be beneficial in reducing ozone levels, and EPA approved such an attainment demonstration on May 15, 2001 ( 66 FR 26914). Most recently, Texas submitted in a letter dated October 15, 2005 an attainment demonstration for the 8 hour standard with modeling indicating NOx reductions would be necessary for the BPA area to attain the standard.

NOx Reductions:

Table 3 summarizes the level of NOx emissions expected in each year.

Table 3: Actual and Projected NOx Emissions ( tons/ day) Category\ Year 1990 1999 2002 2005 Point 221.01 131.84 110.23 109.30 Area 16.73 10.86 7.09 6.40 On Road 54.94 57.17 49.56 33.97 Off Road 20.63 25.34 26.77 27.43 Total 313.31 225.21 193.65 177.1 Target NA 303.37 270.02 234.82 Table 3 indicates that emissions in 1999, 2002 and 2005 will be well below the target level of emissions for NOx. Each of the projections is discussed below. 6 Point Source NOx: Texas used actual reported emissions adjusted for rule effectiveness to estimate point source emissions for 1999 and 2002. For 2005, only minimal additional emission reductions were projected by TCEQ. In actuality, the attainment demonstration called for 2/ 3 of the point source reductions to occur by 2003 and an additional 1/ 3 of the emission reductions to occur by 2005 so additional emission reductions beyond the levels reported in 2002 are expected. The amount of these additional reductions is difficult to predict because some of the reduction in 2002 could have been from early reductions with the 2003 and 2005 rules.

One difficulty in the use of reported inventories to demonstrate compliance with the target levels calculated from the 1990 inventory is over time emissions estimation techniques change. Thus, an " apples to oranges" comparison can occur because the emissions in the milestone years are being calculated differently than emissions were calculated in the 1990 inventory. Particularly, for NOx sources, the early 90' s was a time period when many sources moved from engineering estimates to measurements with continuous monitors. These emission estimates based on CEMS are more accurate but they also tend to be lower then the reported emissions based on emission factor data. A straight comparison of emissions between 1990 and 1996 might indicate a reduction had occurred when in reality only method for estimation had changed.

This issue was studied in the10/ 27/ 1999 SIP revision. In Appendix H of that earlier SIP, TCEQ documented the results of a survey that indicated that some 19% of the reductions between 1990 and 1996 were due to calculation changes. The remaining changes were the result of the installation of control devices, process changes, and the net change due to shut downs and start ups. Backcasting the survey results now to adjust the 1990 inventory indicates the revised 1990 inventory we are addressing in this notice might be about 13 tons per day higher than if it had been calculated on the same basis as previously approved 1990 base year inventories. A lower 1990 base year inventory would result in lower target levels in each milestone year. Each target level, however, would be no more than 13 tons per day lower than the target levels shown in Table 3. Since, as shown in table 3, the emissions for each of the milestone years are far more than 13 tons per day under the target level emission, possible paper reductions in emissions inventories due to emissions calculation changes should not impact the approvability of the rate of progress plan.

Texas documents the control measures that have been adopted to reduce NOx emissions on Sheet 13 of Appendix 1 of the SIP. The controls include the institution of NOx RACT controls in 1999, Lean Burn Engine Controls in 2001, Phase I of the attainment controls in 2003( first 1/ 3 of the controls) and phase II of the attainment controls in 2005. All of these control measure have been approved in separate federal register actions. Also, in the early 1990' s there were some process shut downs that resulted in lower emissions.

Texas has not projected additional reductions due to the last phase of NOx controls that occurred in 2005 because additional reductions were not needed to demonstrate ROP. EPA believes additional reductions will occur during the time period 2002 2005 because of the NOx reductions being put in place as part of the BPA attainment demonstration. Through 2002, only a 25% reduction had occurred from the 1996 level shown in the Appendix. The attainment 7 demonstration projected a 40% reduction in point source emissions from 1997 levels so EPA believes that 2005 should be 10 20 tons per day lower than projected in the ROP plan.

Area Source NOx: Table 3 shows area source NOx emissions decreasing from 16.73 to 6.40 tons per day. These reductions result primarily from decreases in emissions from the oil and gas category. These decreases result from decreasing crude production in the area. EPA has reviewed the methodology and additional information supporting the decreases in emissions from oil and gas production shown in the Plan and finds it acceptable.

On Road NOx: The calculation of on road emissions is documented in Appendix 2 of the Plan. EPA has reviewed the information and believes the emission estimations are approvable. The reductions in emissions reflect fleet turnover and the introduction of new cars and trucks into the fleet. The reductions calculated using the latest transportation network estimates and MOBILE6 have been able to more than offset the increasing vehicle miles traveled in the BPA area.

Non road Mobile NOx: Non road emissions are represented in the following table 4 copied from Appendix 1 of the Plan.

Table 4: Non Road Inventory with Controls ( NOx tons/ day)

Year 1990 1999 2002 2005 Aircraft 0.03 0.04 0.04 0.04 GSE 0.00 0.00 0.00 0.00 Commercial Marine 9.16 11.12 12.64 13.59 Locomotive 1.80 3.50 3.64 3.82 NONROAD Model Categories 9.64 10.68 10.45 9.98 Total 20.63 25.34 26.77 27.34 The emissions estimates in Table 4 were calculated using methods documented in Appendix 7 of the SIP. Texas has used survey data studies to improve upon the default values in the model for these inventory estimates. We have reviewed the information and recommend approval of the non road emissions estimates.

The non road model provides estimates of emissions from all non road categories except ships, trains and locomotives. It provides estimates of emissions based on the impact of tightening federal standards for construction equipment, mobile industrial equipment such as fork lifts, recreational boats, lawn and garden equipment and other categories while taking into account any growth in activity levels The above estimates overestimate the expected controlled 2005 emissions because they do not 8 take into account expected emission reductions that will achieved through the Texas Emission Reduction Plan program which provides grant money to owners and operators of diesel equipment to use cleaner engines or add retrofit devices to clean the exhaust.

Summary of NOx ROP: EPA believes that Texas has used acceptable methods to estimate the actual emissions and target level emissions for the NOx ROP plan and demonstrate that the ROP emission reductions milestones will be met.

F. Evaluation of VOC ROP VOC Emissions: Table 5 documents that VOC emissions for 1999, 2002 and 2005 are less than the respective target levels.

Table 5: Actual and projected VOC inventories ( tons/ day)

Category\ Year 1990 1999 2002 2005 Point 245.54 84.73 59.12 59.31 Area 24.56 31.48 37.32 36.69 On Road 36.99 20.52 17.21 12.59 Off Road 13.47 13.29 12.57 10.96 Total 320.56 150.02 126.22 119.55 Target NA 230.40 228.57 227.02 Point Source VOC: As with NOx, TCEQ used the actual reported rule effectiveness adjusted inventories for 1999 and 2002 to determine the VOC emissions in each of these years. For 2005, no further reductions were projected. See sheet 13 of Appendix 1. Substantial emission reductions have occurred between 1990 and 2002. The reductions are the result of measures that were included in the previously approved 15% plan through 1996 and federal MACT standards that resulted in reductions in VOCs. There is a long list of emission reduction measures that have been included in the plan. The decrease in emissions as reported in the 2002 inventory is evidence that these reductions have occurred.

As with the NOx point source reductions, the survey document in the 1999 SIP revision is instructive as to whether some of the reductions shown in the inventory are just the result of changes in emissions estimation techniques. From the survey, it appears that 36% of the change between 1990 and 1996 was the result of calculation methodology changes. The remaining reductions are the result of control programs, and changes in unit activity. So the 1990 inventory is probably overestimated when calculated on the same basis as the later year inventories by about 45 tons per day. If the 1990 inventory were reduced by 45 tons per day, then the target levels for each of the milestone years would then be reduced by no more than 45 tons per day. As can be 9 seen in Table 5, such lower VOC reduction targets could still be met.

Another concern is the accuracy of the VOC inventory. Several recent studies of ambient data taken from aircraft have indicated that VOC emissions from industrial sources  particularly highly reactive VOC emissions  are underreported in the Houston Galveston area even though industry sources are using EPA methods for emissions estimation. It is likely since many of the same types of sources are present in the BPA area that are present in the Houston/ Galveston area and the same emission estimation techniques are used in both areas that some degree of underestimation has also occurred in the BPA area.

It is not possible to determine to what degree emissions are underestimated. Though assumptions could be made about the degree of underestimation in more recent years based on the limited amount of ambient data available, it is not possible to determine to what degree emissions were under estimated in 1990. EPA believes therefore that the best can be done at this point is to use comparable approaches to estimating emissions between 1990 and the milestone years so that the relative reductions in emissions over the years can be estimated. To that end, the survey data discussed above has proved very useful in factoring out reductions that are due to calculation method changes.

For future revisions to the SIP, we expect that some of the problems in the emissions estimation will be mitigated. Texas now requires that fugitive emissions be calculated using correlation equations. This is the most sophisticated method of estimating fugitive emissions short of bagging each potential leaking component. Texas also requires companies that have monitoring programs for their cooling towers to use the monitoring data to estimate emissions instead of using the " controlled" EPA emission factors. If they do not have monitoring data they must use the uncontrolled factor. This approach will encourage sources to monitor the cooling water inlets to establish their actual emissions. Texas has initiated a stakeholder process to investigate further improvements to the inventory.

Area Source VOC: Area source emission reductions are summarized on Sheet 12 of Appendix 1 of the SIP. The estimates shown in Table 5 are the uncontrolled estimates. In other words, TCEQ has demonstrated that BPA is meeting its ROP targets without taking credit for any area source reductions. In fact, there have been a number of controls to this category, including stage II controls on gas stations and national controls on consumer products and architectural coatings. Texas has credited these controls to the contingency plan. The amount of reductions is documented in Table 4 3 of the SIP.

On Road VOC: The calculation of on road emissions is documented in appendix 2 of the SIP. EPA has reviewed the information and believes the emission estimations are approvable. The reductions in emissions reflect fleet turnover and the introduction of new cars and trucks into the fleet.

Non Road Mobile VOC: Table 6 delineates the estimated emissions of VOCs from non road mobile sources. 10 Table 6: Non Road Inventory with Controls ( VOC tons/ day)

Year 1990 2002 2005 2007 Aircraft 0.06 0.07 0.07 0.07 GSE 0.0 0.0 0.0 0.0 Commercial Marine 0.27 0.33 0.37 0.41 Locomotive 0.07 0.14 0.15 0.15 NONROAD Model Categories 13.07 14.46 15.14 15.87 Total 13.47 15.00 15.74 16.51 The reports listed in Appendix 7 of the SIP document these emission levels. EPA has reviewed the information and recommends approval.

G. ROP Motor Vehicle Emissions Budget The Rate of Progress budgets are contained in Table 7. These budgets come directly from the onroad mobile source emission projections shown in Tables 3 and 5. These tables show that these budgets are consistent with meeting the ROP goals. In accordance with 40 CFR 93.118( e)( 4), the availability of these budgets for review by the public was posted on EPA's adequacy website on December 7, 2004 for a period of greater than 30 days. No comments were received during this time. We recommend that these MVEB =

s be proposed for approval.

Table 7: SIP ROP Motor Vehicle Emissions Budgets ( Tons per day)

Year NOx VOC 1999 57.17 20.52 2002 49.56 17.21 2005 33.97 12.59 H. Summary and Recommendation: TCEQ has used acceptable techniques to show that emissions in 1999 and 2002 were well below the target level for those years and that emissions in 2005 will be below the rate of progress target level. Therefore we recommend approval of the Beaumont/ Port Arthur Rate of Progress Plan. In addition, TCEQ has adopted motor vehicle emissions budgets based on the Rate of Progress Plan that should also be approved.

I. Contingency Measures: The Clean Air Act requires that States have Contingency Measures 11 that will be implemented if an area fails to meet a milestone or misses its attainment date. EPA has interpreted this requirement to mean that the State should identify specific measures that will achieve an additional 3% reduction in emissions with no further action by the State. In this case, Texas has clearly demonstrated that the 1999 and 2002 ROP milestones have been met and therefore no contingency measures are required to be implemented for failure to meet those ROP milestones. Further, TCEQ has shown that in 2005, emission reductions will be much more than the 3% emission reduction required for 2002 2005 ( see Table 3 and Table 5). These surplus emission reductions can be creditable as a contingency for meeting the 2005 ROP milestone. TCEQ has also shown in the SIP that in the year following 2005, i. e., 2006 that more than a 3% reduction will occur ( See Table 4 6 of the SIP). For the above reasons, EPA believes that TCEQ has sufficient ROP contingency measures to insure the BPA area remains on track to meet its Rate of Progress goals through 2005.

On May 26, 2005 at 70 FR 30592, EPA issued a rule that defines the one hour " applicable requirements" the BPA area is still required to meet. One hour ROP contingency measures are not an " applicable requirement." Therefore, it is recommended that no action be taken on the ROP contingency plan.


[Federal Register Volume 80, Number 91 (Tuesday, May 12, 2015)]
[Notices]
[Pages 27229-27230]
[FR Doc No: 2015-11395]

-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2015-0035; Notice 1]

General Motors, LLC; Receipt of Petition for Decision of
Inconsequential Noncompliance

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation, DOT.

ACTION: Receipt of petition.

-----------------------------------------------------------------------

SUMMARY: General Motors, LLC, (GM) has determined that certain Model
Year (MY) 2012-2015 Chevrolet Sonic passenger vehicles do not fully
comply with paragraph S<IP_ADDRESS>.1 of Federal Motor Vehicle Safety
Standard (FMVSS) No. 108, Lamps, Reflective Devices and Associated
Equipment. GM has filed an appropriate report dated March 2, 2015,
pursuant to 49 CFR part 573, Defect and Noncompliance Responsibility
and Reports.

DATES: The closing date for comments on the petition is June 11, 2015.

ADDRESSES: Interested persons are invited to submit written data,
views, and arguments on this petition. Comments must refer to the
docket and notice number cited at the beginning of this notice and
submitted by any of the following methods:
     Mail: Send comments by mail addressed to: U.S. Department
of Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.
     Hand Deliver: Deliver comments by hand to: U.S. Department
of Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590. The
Docket Section is open on weekdays from 10 a.m. to 5 p.m. except
Federal Holidays.
     Electronically: Submit comments electronically by: logging
onto the Federal Docket Management System (FDMS) Web site at http://www.regulations.gov/. Follow the online instructions for submitting
comments. Comments may also be faxed to<PHONE_NUMBER>.
    Comments must be written in the English language, and be no greater
than 15 pages in length, although there is no limit to the length of
necessary attachments to the comments. If comments are submitted in
hard copy form, please ensure that two copies are provided. If you wish
to receive confirmation that your comments were received, please
enclose a stamped, self-addressed postcard with the comments. Note that
all comments received will be posted without change to http://www.regulations.gov, including any personal information provided.
    Documents submitted to a docket may be viewed by anyone at the
address and times given above. The documents may also be viewed on the
Internet at http://www.regulations.gov by following the online
instructions for accessing the dockets. DOT's complete Privacy Act

Statement is available for review in the Federal Register published on
April 11, 2000, (65 FR 19477-78).
    The petition, supporting materials, and all comments received
before the close of business on the closing date indicated below will
be filed and will be considered. All comments and supporting materials
received after the closing date will also be filed and will be
considered to the extent possible. When the petition is granted or
denied, notice of the decision will be published in the Federal
Register pursuant to the authority indicated below.

SUPPLEMENTARY INFORMATION:
    I. GM's Petition: Pursuant to 49 U.S.C. 30118(d) and 30120(h) (see
implementing rule at 49 CFR part 556), GM submitted a petition for an
exemption from the notification and remedy requirements of 49 U.S.C.
Chapter 301 on the basis that this noncompliance is inconsequential to
motor vehicle safety.
    This notice of receipt of GM's petition is published under 49
U.S.C. 30118 and 30120 and does not represent any agency decision or
other exercise of judgment concerning the merits of the petition.
    II. Vehicles Involved: Affected are approximately 310,243 MY 2012-
2015 Chevrolet Sonic passenger cars manufactured between May 5, 2011
and February 4, 2015.
    III. Noncompliance: GM explains that the noncompliance is that the
high-beam headlamp lenses on the subject vehicles are not marked with
``HB3'' (the HB bulb type) as required by paragraph S<IP_ADDRESS>.1 of FMVSS
No. 108.
    IV. Rule Text: Paragraph S<IP_ADDRESS>.1 of FMVSS No. 108 requires in
pertinent part:

    S<IP_ADDRESS>.1 The lens of each replaceable bulb headlamp must bear
permanent marking in front of each replaceable light source with
which it is equipped that states either: The HB Type, if the light
source conforms to S11 of this standard for filament light sources,
. . .

    V. Summary of GM's Analyses: GM stated its belief that the subject
noncompliance is inconsequential to motor vehicle safety for the
following reasons:
    (A) The high-beam headlamp lenses in question are clearly marked
``9005'' (the ANSI designation), which GM believes to be a well-known
alternative designation recognized throughout the automotive industry
and used by lighting manufacturers interchangeably with HB3 the lamp's
HB type. GM also verified that the vehicle owner's manuals identify the
high beam replacement bulb as 9005.
    (B) That the mismarked high-beam headlamps are the correct
headlamps for the subject vehicles and that they conform to all other
requirements including photometric as required by FMVSS No. 108.
    (C) The risk of customer confusion when selecting a correct
replacement bulb is remote. Both the HB3 type and the 9005 ANSI
designation are marked on the vehicles' headlamp bulb sockets, and
packaging for replacement bulbs is commonly marked with both the HB
type and the ANSI designation. GM searched a number of national
automotive parts stores (Autozone, O'Reilly, Advanced Auto Parts, and
Pep Boys), and found that all HB3 replacement bulbs in these stores
were marked with the 9005 ANSI designation. Should a consumer attempt
to install an incorrect bulb into the headlamp sockets, the bulb could
not be successfully installed because of the unique nature of the
socket hardware.
    (D) GM also cited several previous petitions that NHTSA has granted
dealing with noncompliances that GM believes are similar to the
noncompliance that is the subject of its petition. Based on these
decisions, GM believes that there is also precedent to support granting
its petition.
    GM is not aware of any VOQ or field data in which a consumer has
complained of not being able to identify the proper replacement
headlamp bulb for the affected vehicles, which GM believes to be
evidence that this noncompliance is not impacting consumers.
    GM has additionally informed NHTSA that it has corrected the
noncompliance by adding the HB3 designation bulb type to the high-beam
headlamp lens in all vehicles produced on or after February 21, 2015.
    In summation, GM believes that the described noncompliance of the
subject vehicles is inconsequential to motor vehicle safety, and that
its petition, to exempt GM from providing recall notification of
noncompliance as required by 49 U.S.C. 30118 and remedying the recall
noncompliance as required by 49 U.S.C. 30120 should be granted.
    NHTSA notes that the statutory provisions (49 U.S.C. 30118(d) and
30120(h)) that permit manufacturers to file petitions for a
determination of inconsequentiality allow NHTSA to exempt manufacturers
only from the duties found in sections 30118 and 30120, respectively,
to notify owners, purchasers, and dealers of a defect or noncompliance
and to remedy the defect or noncompliance. Therefore, any decision on
this petition only applies to the subject vehicles that GM no longer
controlled at the time it determined that the noncompliance existed.
However, any decision on this petition does not relieve vehicle
distributors and dealers of the prohibitions on the sale, offer for
sale, or introduction or delivery for introduction into interstate
commerce of the noncompliant vehicles under their control after GM
notified them that the subject noncompliance existed.

    Authority: 49 U.S.C. 30118, 30120: Delegations of authority at
49 CFR 1.95 and 501.8.

Jeffrey Giuseppe,
Director, Office of Vehicle Safety Compliance.
[FR Doc. 2015-11395 Filed 5-11-15; 8:45 am]
 BILLING CODE 4910-59-P