[Federal Register Volume 81, Number 166 (Friday, August 26, 2016)]
[Rules and Regulations]
[Pages 58818-58821]
[FR Doc No: 2016-20375]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2016-0463; Directorate Identifier 2015-NM-155-
AD;Amendment 39-18623; AD 2016-17-10]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: We are adopting a new airworthiness directive (AD) for all The
Boeing Company Model 777 airplanes. This AD was prompted by a report of
an incident involving a landing in which the pilots needed to input
corrections due to airplane yaw and roll to the right; the main landing
gear (MLG) aft trunnion pin was later found to be fractured. This AD
requires identification and replacement of certain MLG aft trunnion
pins. We are issuing this AD to prevent a fractured MLG aft trunnion
pin, which could result in collapse of the MLG and consequent loss of
control of the airplane during landing.

DATES: This AD is effective September 30, 2016.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of September
30, 2016.

ADDRESSES: For service information identified in this final rule,
contact Boeing Commercial Airplanes, Attention: Data & Services
Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone:
206-544-5000, extension 1; fax:<PHONE_NUMBER>; Internet: https://www.myboeingfleet.com. You may view this referenced service information
at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW.,
Renton, WA. For information on the availability of this material at the
FAA, call<PHONE_NUMBER>. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-
0463.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-
0463; or in person at the Docket Management Facility between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays. The AD docket
contains this AD, the regulatory evaluation, any comments received, and
other information. The address for the Docket Office (phone: 800-647-
5527) is Docket Management Facility, U.S. Department of Transportation,
Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200
New Jersey Avenue SE., Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Eric Lin, Aerospace Engineer, Airframe
Branch, ANM-120S, FAA, Seattle Aircraft Certification Office (ACO),
1601 Lind Avenue SW., Renton, WA 98057-3356; phone:<PHONE_NUMBER>; fax:
415-917-6590; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 by adding an AD that would apply to all The Boeing Company
Model 777 airplanes. The NPRM published in the Federal Register on
February 18, 2016 (81 FR 8164) (``the NPRM''). The NPRM was prompted by
a report of an incident involving a landing in which the pilots needed
to input corrections due to airplane yaw and roll to the right; the MLG
aft trunnion pin was later found to be fractured. The NPRM proposed to
require identification and replacement of certain MLG aft trunnion
pins. We are issuing this AD to prevent a fractured MLG aft trunnion
pin, which could result in collapse of the MLG and consequent loss of
control of the airplane during landing.

Comments

    We gave the public the opportunity to participate in developing
this AD. The following presents the comments received on the NPRM and
the FAA's response to each comment.

Support for the NPRM

    Three commenters indicated their support for the NPRM.

Request To Update the Cost Section

    One commenter, Gilles Oriot, asked that we update the cost estimate
to reflect the costs shown in Boeing Information Notice 777-32A0103 IN
03, dated February 2, 2015.
    We agree with the commenter and have updated the Costs of
Compliance to reflect the updated information.

Request To Add to Credit Information

    The Boeing Company, American Airlines, Air France, Korean Air,
Etihad Airways, and All Nippon Airways requested that we allow
installation of pins with serial numbers beginning with ``EGL'' or
``MAL'' that have been inspected previously but were not marked ``BASE
METAL INSPECTED'' to fulfill the requirements of the proposed AD. The
commenters stated that the previous inspection may have been done as
part of a previous overhaul or required inspection using other service
information that did not specify to mark ``BASE METAL INSPECTED.'' The
commenters also stated that the actions specified in the service
information are consistent with the requirements of the proposed AD.
The commenters suggested various changes in order to allow installation
of these parts.
    We acknowledge that previous inspections may have been done as part
of an overhaul or previous service requests, but we do not agree with
the suggested changes. We disagree because providing credit for the
inspections required by this AD undermines the level of record review
required by this AD for compliance, cannot ensure that the various
actions taken for each pin are the same actions required by this AD,
and may not provide an acceptable level of safety equivalent to this
AD. Operators that would like credit for the actions performed before
the effective date of this AD may request approval of an alternative
method of compliance (AMOC). The request should include a list of
affected pin serial numbers, the airplane on which each pin is
currently installed (if applicable), and the actions that were
performed for each pin with applicable service information. We have not
changed this final rule regarding this issue.

Request To Allow Alternative Part Marking

    FedEx requested that we allow the suffix ``BMI'' to be allowed for
marking the pins. FedEx stated that its record keeping system can only
track unique part number and serial number combinations; it is not
capable of tracking the additional ``BASE METAL INSPECTED'' marking.
    We disagree with the commenter's request. We disagree because pins
can be rotated among other airplanes and operators. Operators need to
be consistent with how the pins are identified to comply with this AD
and ensure the safety of passengers and crew. We recommend that the
commenter work with the manufacturer to identify a suitable method of
compliance for future revision of the service information. We have not
changed this final rule regarding this issue.

Conclusion

    We reviewed the relevant data, considered the comments received,
and determined that air safety and the public interest require adopting
this AD as proposed, except for minor editorial changes. We have
determined that these minor changes:
     Are consistent with the intent that was proposed in the
NPRM for correcting the unsafe condition; and
     Do not add any additional burden upon the public than was
already proposed in the NPRM.

Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Alert Service Bulletin 777-32A0103, Revision 1,
dated December 10, 2015. The service information describes procedures
for identifying and replacing certain MLG aft trunnion pins. This
service information is reasonably available because the interested
parties have access to it through their normal course of business or by
the means identified in the ADDRESSES section.

Costs of Compliance

    We estimate that this AD affects 123 airplanes of U.S. registry.
    We estimate the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Cost on U.S.
              Action                        Labor cost            Parts cost        product         operators
----------------------------------------------------------------------------------------------------------------
Inspection........................  2 work-hours x $85 per                 $0             $170          $20,910
                                     hour = $170.
----------------------------------------------------------------------------------------------------------------

    We estimate the following costs to do any necessary replacements
that would be required based on the results of the inspection. We have
no way of determining the number of aircraft that might need this
repair:

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per
                  Action                                Labor cost                 Parts cost        product
----------------------------------------------------------------------------------------------------------------
Replacement of aft trunnion pin...........  211 work-hours x $85 per hour =             $5,291          $23,226
                                             $17,935.
----------------------------------------------------------------------------------------------------------------

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    We are issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for

safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

Adoption of the Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

2016-17-10 The Boeing Company: Amendment 39-18623; Docket No. FAA-
2016-0463; Directorate Identifier 2015-NM-155-AD.

(a) Effective Date

    This AD is effective September 30, 2016.

 (b) Affected ADs

    None.

(c) Applicability

    This AD applies to all The Boeing Company Model 777-200, 777-
200LR, 777-300, 777-300ER, and 777F series airplanes, certificated
in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 32, Landing
gear.

(e) Unsafe Condition

    This AD was prompted by a report of an incident involving a
landing in which the pilots needed to input corrections due to
airplane yaw and roll to the right; the main landing gear (MLG) aft
trunnion pin was later found to be fractured. We are issuing this AD
to prevent a fractured MLG aft trunnion pin, which could result in
collapse of the MLG and consequent loss of control of the airplane
during landing.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Aft Trunnion Pin Identification

    For airplanes on which the original airworthiness certificate or
the original export certificate of airworthiness was issued on or
before the effective date of this AD: Within 36 months after the
effective date of this AD, identify the serial number and marking of
the MLG aft trunnion pins, in accordance with Part 1 of the
Accomplishment Instructions of Boeing Alert Service Bulletin 777-
32A0103, Revision 1, dated December 10, 2015.

(h) MLG Aft Trunnion Pin Replacement

    For any MLG aft trunnion pin that begins with serial number
``EGL'' or ``MAL,'' on which no ``BASE METAL INSPECTED'' marking is
found, replace with a new or serviceable MLG aft trunnion pin within
36 months after the effective date of this AD, in accordance with
Part 2 of the Accomplishment Instructions of Boeing Alert Service
Bulletin 777-32A0103, Revision 1, dated December 10, 2015.

(i) Parts Installation Prohibition

    As of the effective date of this AD, no person may install, on
any airplane, any MLG aft trunnion pin that begins with serial
number ``EGL'' or ``MAL'' and is not marked ``BASE METAL
INSPECTED.''

(j) Credit for Previous Actions

    (1) This paragraph provides credit for the actions specified in
paragraph (g) of this AD, if those actions were performed before the
effective date of this AD using Boeing Multi-Operator Message (MOM)
MOM-MOM-15-0303-01B, dated May 13, 2015, which is not incorporated
by reference in this AD.
    (2) This paragraph provides credit for the actions specified in
paragraphs (g) and (h) of this AD, if those actions were performed
before the effective date of this AD using Boeing Alert Service
Bulletin 777-32A0103, dated September 11, 2015, which is not
incorporated by reference in this AD.

(k) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle Aircraft Certification Office (ACO),
FAA, has the authority to approve AMOCs for this AD, if requested
using the procedures found in 14 CFR 39.19. In accordance with 14
CFR 39.19, send your request to your principal inspector or local
Flight Standards District Office, as appropriate. If sending
information directly to the manager of the ACO, send it to the
attention of the person identified in paragraph (l)(1) of this AD.
Information may be emailed to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair, modification, or alteration required by this AD
if it is approved by the Boeing Commercial Airplanes Organization
Designation Authorization (ODA) that has been authorized by the
Manager, Seattle ACO, to make those findings. To be approved, the
repair method, modification deviation, or alteration deviation must
meet the certification basis of the airplane and the approval must
specifically refer to this AD.
    (4) For service information that contains steps that are labeled
as Required for Compliance (RC), the provisions of paragraphs
(k)(4)(i) and (k)(4)(ii) of this AD apply.
    (i) The steps labeled as RC, including substeps under an RC step
and any figures identified in an RC step, must be done to comply
with the AD. An AMOC is required for any deviations to RC steps,
including substeps and identified figures.
    (ii) Steps not labeled as RC may be deviated from using accepted
methods in accordance with the operator's maintenance or inspection
program without obtaining approval of an AMOC, provided the RC
steps, including substeps and identified figures, can still be done
as specified, and the airplane can be put back in an airworthy
condition.

(l) Related Information

    (1) For more information about this AD, contact Eric Lin,
Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle ACO,
1601 Lind Avenue SW., Renton, WA 98057-3356; phone:<PHONE_NUMBER>;
fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>    (2) Service information identified in this AD that is not
incorporated by reference is available at the addresses specified in
paragraphs (m)(3) and (m)(4) of this AD.

(m) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Boeing Alert Service Bulletin 777-32A0103, Revision 1, dated
December 10, 2015.
    (ii) Reserved.
    (3) For Boeing service information identified in this AD,
contact Boeing Commercial Airplanes, Attention: Data & Services
Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207;
telephone:<PHONE_NUMBER>, extension 1; fax:<PHONE_NUMBER>; Internet:
https://www.myboeingfleet.com.

    (4) You may view this service information at the FAA, Transport
Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For
information on the availability of this material at the FAA, call
425-227-1221.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Renton, Washington, on August 17, 2016.
Dorr M. Anderson,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2016-20375 Filed 8-25-16; 8:45 am]
 BILLING CODE 4910-13-P


Commercial Real Estate Developer/Owner Letter of Intent

<BUILDING OWNER/DEVELOPER Letter of Intent: Print on company letterhead>

Re: Designed to Earn the ENERGY STAR®

< Date >

<INSERT company name>, as the Owner-Developer of the <INSERT building
name> located in <INSERT city and state>, anticipates that the building
will receive its certificate of occupancy in <INSERT month/year>.

We intend to operate the building at the highest standard to earn
EPA’s ENERGY STAR certification.  As the Owner/Developer of the
property, we will also include our energy efficiency goals in the tenant
guidelines and state that the property is intended to earn ENERGY STAR.

<INSERT company name> will measure and track the building’s energy use
in Portfolio Manager within 24 months of receiving the certificate of
occupancy. We intend to apply for ENERGY STAR if the building achieves
an energy performance score of 75 or higher and meets all eligibility
requirements. We will proudly display the ENERGY STAR to show that we
met the energy goal established during design and executed during
building operations.

<INSERT Architect of Record firm name> completed this project and
achieved Designed to Earn the ENERGY STAR certification. We understand
that the certification graphic can only be displayed on the
architectural plans, contract documents, and marketing materials for
this specified project, and we will adhere to the ENERGY STAR Logo
Identity Guidelines.

We agree to collaborate with EPA to create a case study about this
building by highlighting its energy use strategies and technologies for
publishing in ENERGY STAR program materials.

<INSERT company name> strives to protect the environment by requesting
efficient building designs and operating energy-efficient buildings
where we work, play, shop, and educate our children because of the huge
impact buildings have on our nation’s energy resources. We look
forward to promoting our buildings that earn the ENERGY STAR and help
lower energy demand and costs while preventing greenhouse gas emissions.

I can be reached at <Insert phone #> and by e-mail <Insert e-mail
address>.

Sincerely,

< C–Level Signature>

<Name>

<Title>

<Building Owner/Developer Company Name>

Note: This Letter of Intent is to be forwarded to the Architect of
Record who submits it along with the Application for Designed to Earn
the ENERGY STAR certification.

The public reporting and recordkeeping burden for this collection of
information is estimated to average 15 minutes per response.  Send
comments on the Agency's need for this information, the accuracy of the
provided burden estimates, and any suggested methods for minimizing
respondent burden, including through the use of automated collection
techniques to the Director, Collection Strategies Division, U.S.
Environmental Protection Agency (2822T), 1200 Pennsylvania Ave., NW,
Washington, D.C. 20460.  Include the OMB control number in any
correspondence.  Do not send the completed form to this address.

Revised June 2011

OMB Control No. 2060-0347

EPA Form No. 5900-386


[Federal Register: January 27, 2010 (Volume 75, Number 17)]
[Rules and Regulations]
[Page 4268]
[DOCID:fr27ja10-4]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2009-0750; Airspace Docket No. 09-AEA-16]

Establishment of Class D and E Airspace and Modification of Class
E Airspace; State College, PA

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This action establishes Class D and E airspace and modifies
existing Class E airspace at State College, PA, to accommodate a new
air traffic control tower at University Park Airport. The FAA is taking
this action to enhance the safety and management of instrument Flight
Rules (IFR) operations.

DATES: Effective Date: 0901 UTC, April 8, 2010. The Director of the
Federal Register approves this incorporation by reference action under
title 1, Code of Federal Regulations, part 51, subject to the annual
revision of FAA Order 7400.9 and publication of conforming amendments.

FOR FURTHER INFORMATION CONTACT: Melinda Giddens, Airspace Specialist,
Operations Support Group, Eastern Service Center, Air Traffic
Organization, Federal Aviation Administration, P.O. Box 20636, Atlanta,
Georgia 30320; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

History

    On October 23, 2009, the FAA proposed to amend Title 14 Code of
Federal Regulations (14 CFR) part 71 by establishing Class D and E
airspace and modifying Class E airspace at University Park Airport,
State College, PA (74 FR 54763). A newly commissioned air traffic
control tower at University Park Airport was established. Interested
parties were invited to participate in this rulemaking proceeding by
submitting written comments on the proposal to the FAA. No comments
objecting to the proposal were received.
    Class D airspace designations, Class E surface airspace
designations (E2) and Class E airspace designations as extensions to a
Class D surface area (E4) are published in Paragraph 5000, 6002 and
6004, respectively, in FAA Order 7400.9T, signed August 27, 2009, and
effective September 15, 2009, which is incorporated by reference in 14
CFR 71.1. The Class D and E airspace designations listed in this
document will be published subsequently in the Order.

The Rule

    This amendment to Title 14, Code of Federal Regulations (14 CFR)
part 71 establishes Class D and E airspace and modifies existing Class
E surface airspace at State College, PA. Class D airspace and Class E
airspace designated as an extension to a Class D surface area has been
established to support the operation of the new air traffic control
tower at University Park Airport. Also, additional controlled airspace
will be added to the Class E airspace, designated as a surface area for
the airport. This action also imparts a minor update to the
geographical coordinates of the University Park Airport.
    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore, (1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
Regulatory Policies and Procedures (44 FR 11034; February 26, 1979);
and (3) does not warrant preparation of a Regulatory Evaluation as the
anticipated impact is so minimal. Since this is a routine matter that
will only affect air traffic procedures and air navigation, it is
certified that this rule, when promulgated, will not have a significant
economic impact on a substantial number of small entities under the
criteria of the Regulatory Flexibility Act.

Lists of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

Adoption of the Amendment

0
In consideration of the foregoing, the Federal Aviation Administration
amends 14 CFR Part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for Part 71 continues to read as follows:

    Authority: 49 U.S.C. 106(g); 40103, 40113, 40120; E.O. 10854, 24
FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation
Administration Order 7400.9T, Airspace Designations and Reporting
Points, signed August 27, 2009, and effective September 15, 2009, is
amended as follows:

Paragraph 5000 Class D Airspace.

* * * * *

AEA PA D State College, PA [New]

University Park Airport, PA
    (Lat. 40[deg]50'57'' N., long. 77[deg]50'55'' W.)

    That airspace extending upward from the surface up to and
including 3,500 feet MSL within a 4.5-mile radius of the University
Park Airport. This Class D airspace area is effective during
specific dates and times established in advance by a Notice to
Airmen. The effective date and time will thereafter be continuously
published in the Airport/Facility Directory.
* * * * *

Paragraph 6002 Class E Airspace Designated as Surface Areas.

* * * * *

AEA PA E2 State College, PA [Amended]

University Park Airport, PA
    (Lat. 40[deg]50'57'' N., long. 77[deg]50'55'' W.)

    That airspace extending from the surface within a 4.5-mile
radius of the University Park Airport; and 1.1 mile either side of
the 302[deg] bearing from the airport, extending from the 4.5-mile
radius to 5.9 miles northwest of the airport; and that airspace 2.5
miles either side of the 053[deg] bearing from the University Park
Airport, extending from the 4.5-mile radius to 13.1 miles northeast
of the airport. This Class E airspace area is effective during
specific dates and times established in advance by a Notice to
Airmen. The effective date and time will thereafter be continuously
published in the Airport/Facility Directory.
* * * * *

Paragraph 6004 Class E Airspace Areas Designated as an Extension to
a Class D Surface Area.

* * * * *

AEA PA E4 State College, PA [New]

University Park, PA
    (Lat. 40[deg]50'57'' N., long. 77[deg]50'55'' W.)

    That airspace extending from the surface 1.1 mile either side of
the 302[deg] bearing from the airport extending from the 4.5-mile
radius to 5.9 miles northwest of the airport; and that airspace 2.5
miles either side of the 053[deg] bearing from the University Park
Airport extending from the 4.5-mile radius to 13.1 miles northeast
of the airport. This Class E airspace area is effective during
specific dates and times established in advance by a Notice to
Airmen. The effective date and time will thereafter be continuously
published in the Airport/Facility Directory.
* * * * *

    Issued in College Park, Georgia, on January 15, 2010.
Myron A. Jenkins,
Acting Manager, Operations Support Group, Eastern Service Center, Air
Traffic Organization.
[FR Doc. 2010-1377 Filed 1-26-10; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: December 16, 2008 (Volume 73, Number 242)]
[Notices]
[Page 76421-76428]
[DOCID:fr16de08-96]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-28530; File No. 812-13563]

TIAA-CREF Life Funds, et al.

December 10, 2008.
AGENCY: Securities and Exchange Commission (the ``Commission'').

ACTION: Notice of application (``Application'') for exemption pursuant
to Section 6(c) of the Investment Company Act of 1940, as amended (the
``1940 Act''), from the provisions of Sections 9(a), 13(a), 15(a) and
15(b) of the Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder.

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Applicants: TIAA-CREF Life Funds (the ``Trust''), the TIAA-CREF Life
Insurance Company (``TIAA-CREF Life''), and Teachers Advisors, Inc.
(``Advisors'') (collectively, ``Applicants'').

Summary of Application: Applicants seek an order to permit shares of
the Trust and shares of any other future investment company (``Other
Investment Companies'') that is designed to fund insurance products and
for which TIAA-CREF Life, or any of its affiliates, may serve as
administrator, investment manager, principal underwriter or sponsor
(the Trust and Other Investment Companies being hereinafter referred
to, collectively, as ``Insurance Investment Companies''), or permit
shares of any current or future series of any Insurance Investment
Company (``Insurance Fund''), to be sold to and held by: (1) Separate
accounts funding variable annuity and variable life insurance contracts
issued by both affiliated and unaffiliated life insurance companies of
TIAA-CREF Life; (2) trustees on behalf of tax-qualified and certain
other retirement and employee benefit plans outside of the separate
account context (``Qualified Plans'' or ``Plans''); (3) Advisors and
any affiliate of Advisors that serves as an investment adviser,
manager, principal underwriter, sponsor, or administrator for the
purpose of providing seed capital to an Insurance Fund (collectively,
the ``Manager''); and (4) any insurance company general account that is
permitted to hold shares of an Insurance Fund consistent with the
requirements of Treasury Regulation 1.817-5 (``General Account'') under
the circumstances described in the Application.

Filing Date: The Application was filed on August 13, 2008, and amended
and restated on December 10, 2008.

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 January 5, 2009, 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 Stewart P. Greene,
Esq., TIAA-CREF Life Funds, 730 Third Avenue, New York, New York 10017-
3206.

FOR FURTHER INFORMATION CONTACT: Michael Kosoff, Staff Attorney, at
(202) 551-6754 or Harry Eisenstein, Branch Chief, Office of Insurance
Products, Division of Investment Management, at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee from
the Public Reference Branch of the Commission, 100 F Street, NE.,
Washington, DC 20549<PHONE_NUMBER>).
    Applicant's Representations:
    1. Each Insurance Investment Company is, or will be, registered as
an open-end management investment company under the 1940 Act. The Trust
(File Nos. 333-61759/811-08961) currently consists of, and offers
shares of beneficial interest in, ten (10) investment portfolios that
are sold only to separate accounts of TIAA-CREF Life which fund
variable life and variable annuity contracts. The Trust may offer one
or more additional series or classes of shares in the future. The Trust
sells its shares directly or indirectly to TIAA-CREF Life, which holds
the shares in its separate accounts to support variable annuity and
variable life insurance contracts.
    2. TIAA-CREF Life is a New York stock insurance company. TIAA-CREF
Life is licensed to do business in all fifty (50) United States and the
District of Columbia. TIAA-CREF Life is a wholly owned subsidiary of
TIAA-CREF Enterprises, Inc., which is a wholly owned subsidiary of
Teachers Insurance and Annuity Association of America (``TIAA''), a
stock life insurance company organized under the laws of the State of
New York.
    3. Advisors is the investment adviser to the Trust and also is
responsible for providing or obtaining at its own expense most of the
services necessary to operate the Trust on a day-to-day basis,
including custodial, administrative, portfolio accounting, dividend
disbursing, auditing, and ordinary legal services. Advisors, a Delaware
corporation, is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is a wholly-owned
indirect subsidiary of TIAA.
    4. The Trust currently offers shares of the Insurance Funds only to
the separate accounts of TIAA-CREF Life, an affiliated insurance
company, in order to fund benefits under variable annuity and other
variable insurance contracts. In the future, the Insurance Investment
Companies intend to offer shares of the Insurance Funds to (a) both
registered and unregistered separate accounts of affiliated and
unaffiliated insurance companies in order to fund variable annuity and
variable life insurance contracts (collectively, ``Separate
Accounts''); (b) Qualified Plans; (c) any Manager; and (d) any General
Accounts.
    5. Affiliated or unaffiliated insurance companies whose Separate
Account(s) may now or in the future own shares of the Insurance Funds
are referred to herein as ``Participating Insurance Companies.'' The
Participating Insurance Companies have established or will establish
their own Separate Accounts and design their own variable contracts.
Each Participating Insurance Company has or will have the legal
obligation to satisfy all applicable requirements under both state and
federal law. Participating Insurance Companies may rely on Rules 6e-2
and 6e-3(T) under the 1940 Act in connection with the establishment and
maintenance of variable life insurance Separate Accounts, although some
Participating Insurance Companies, in connection with variable life
insurance contracts, may rely on individual exemptive orders as well.
Each

Participating Insurance Company will enter into a participation
agreement with the applicable Insurance Investment Company on behalf of
the Insurance Funds in which that Participating Insurance Company
invests. The role of the Insurance Funds under this arrangement,
insofar as federal securities laws are applicable, will consist of
offering their shares to the Separate Accounts and fulfilling any
conditions that the Commission may impose upon granting the order
requested in the Application.
    6. The Insurance Investment Companies intend to offer shares of the
Insurance Funds directly to Qualified Plans outside of the separate
account context. Qualified Plans may choose any of the Insurance Funds
that are offered as the sole investment under the Plan or as one of
several investments. Plan participants may or may not be given an
investment choice depending on the terms of the Plan itself. Shares of
any of the Insurance Funds sold to such Qualified Plans would be held
or deemed to be held by the trustee(s) of said Plans. Certain Qualified
Plans, including Section 403(b)(7) Plans and Section 408(a) Plans, may
vest voting rights in Plan participants instead of Plan trustees.
Exercise of voting rights by participants in any such Qualified Plans,
as opposed to the trustees of such Plans, cannot be mandated by the
Applicants. Each Plan must be administered in accordance with the terms
of the Plan and as determined by its trustee or trustees.
    7. Shares of each Insurance Fund also may be offered to a Manager
or to General Accounts, in reliance on regulations issued by the
Treasury Department (Treas. Reg. 1.817-5) that established
diversification requirements for variable annuity and variable life
insurance contracts (``Treasury Regulations''). Treasury Regulation
1.817-5(f)(3)(ii) permits such sales as long as the return on shares
held by the Manager is computed in the same manner as for shares held
by the Separate Accounts, and the Manager does not intend to sell to
the public shares of the Insurance Investment Company that it holds. An
additional restriction is imposed by the Treasury Regulations on sales
to the Manager, who may hold shares only in connection with the
creation or management of the Insurance Investment Company. Applicants
represent that sales in reliance on Treasury Regulation 1.817-
5(f)(3)(ii) will be made to a Manager consistent with the above
conditions and for the purpose of providing seed capital. Treasury
Regulation 1.817-51(f)(3) permits sales to general accounts of
insurance companies and their corporate affiliates as long as the
return on shares held by such persons is computed in the same manner as
for shares held by a Separate Account, such persons do not intend to
sell to the public shares of the Insurance Fund that they hold, and a
segregated asset account of the life insurance company whose general
account holds those shares also holds or will hold a beneficial
interest in the Insurance Fund. Applicants represent that sales to
General Accounts will be made consistent with these provisions.
    Applicants' Legal Analysis:
    1. Applicants request that the Commission issue an order pursuant
to Section 6(c) of the 1940 Act granting exemptions from the provisions
of Sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act and Rules 6e-
2(b)(15) and 6e-3(T)(b)(15) thereunder (including any comparable
provisions of a permanent rule that replaces Rule 6e-3(T)), to the
extent necessary to permit shares of each Insurance Investment Company
to be offered and sold to, and held by: (1) Separate Accounts funding
variable annuity contracts and scheduled premium and flexible premium
variable life insurance contracts issued by both affiliated and
unaffiliated life insurance companies; (2) Qualified Plans; (3) any
Manager to an Insurance Fund; and (4) General Accounts under the
circumstances described in the Application.
    2. Section 6(c) authorizes the Commission to exempt any person,
security, or transaction or any class or classes of persons,
securities, or transactions from any provision or provisions of the
1940 Act and/or of any rule thereunder if and to the extent that such
exemption is necessary or appropriate in the public interest and
consistent with the protection of investors and the purposes fairly
intended by the policy and provisions of the 1940 Act.
    3. In connection with the funding of scheduled premium variable
life insurance contracts issued through a separate account organized as
a unit investment trust (``Trust Account''), Rule 6e-2(b)(15) provides
partial exemptions from Sections 9(a), 13(a), 15(a), and 15(b) of the
1940 Act. The exemptions granted to an insurance company by Rule 6e-
2(b)(15) are available only where each registered management investment
company underlying the Trust Account (``underlying fund'') offers its
shares ``exclusively to variable life insurance separate accounts of
the life insurer or of any affiliated life insurance company * * *.''
(emphasis added). Therefore, the relief granted by Rule 6e-2(b)(15) is
not available with respect to a scheduled premium variable life
insurance separate account that owns shares of an underlying fund that
also offers its shares to a variable annuity separate account of the
same company or of any affiliated life insurance company. The use of a
common underlying fund as the underlying investment medium for both
variable annuity and variable life insurance separate accounts of the
same life insurance company or of any affiliated life insurance company
is referred to herein as ``mixed funding.''
    4. In addition, the relief granted by Rule 6e-2(b)(15) is not
available with respect to a scheduled premium variable life insurance
separate account that owns shares of an underlying fund that also
offers its shares to separate accounts funding variable contracts of
one or more unaffiliated life insurance companies. The use of a common
underlying fund as the underlying investment medium for variable life
insurance separate accounts of one insurance company and separate
accounts funding variable contracts of one or more unaffiliated life
insurance companies is referred to herein as ``shared funding.''
Moreover, because the relief under Rule 6e-2(b)(15) is available only
where shares are offered exclusively to variable life insurance
separate accounts, additional exemptive relief may be necessary if the
shares of the Insurance Investment Companies are also to be sold to
General Accounts, Qualified Plans or the Manager.
    5. In connection with the funding of flexible premium variable life
insurance contracts issued through a Trust Account, Rule 6e-3(T)(b)(15)
provides partial exemptions from Sections 9(a), 13(a), 15(a) and 15(b)
of the 1940 Act to the extent that those sections have been deemed by
the Commission to require ``pass-through'' voting with respect to an
underlying fund's shares. The exemptions granted to a separate account
by Rule 6e-3(T)(b)(15) are available only where all of the assets of
the separate account consist of the shares of one or more underlying
funds which offer their shares ``exclusively to separate accounts of
the life insurer, or of any affiliated life insurance company, offering
either scheduled contracts or flexible contracts, or both; or which
also offer their shares to variable annuity separate accounts of the
life insurer or of an affiliated life insurance company'' (emphasis
added). Therefore, Rule 6e-3(T) permits mixed funding with respect to a
flexible premium variable life insurance separate account, subject to

certain conditions. However, Rule 6e-3(T) does not permit shared
funding because the relief granted by Rule 6e-3(T)(b)(15) is not
available with respect to a flexible premium variable life insurance
separate account that owns shares of an underlying fund that also
offers its shares to separate accounts (including variable annuity and
flexible premium and scheduled premium variable life insurance separate
accounts) of unaffiliated life insurance companies. The relief provided
by Rule 6e-3(T) is not relevant to the purchase of shares of the
Insurance Investment Companies by Qualified Plans, the Manager or
General Accounts. However, because the relief granted by Rule 6e-
3(T)(b)(15) is available only where shares of the underlying fund are
offered exclusively to separate accounts, or to life insurers in
connection with the operation of a separate account, additional
exemptive relief may be necessary if the shares of the Insurance
Investment Companies are also to be sold to Qualified Plans, the
Manager or General Accounts.
    6. Applicants assert that none of the relief provided for in Rules
6e-2(b)(15) and 6e-3(T)(b)(15) relates to Qualified Plans, the Manager
or General Accounts, or to an underlying fund's ability to sell its
shares to such purchasers. It is only because some of the Separate
Accounts that may invest in the Insurance Investment Companies may
themselves be investment companies that rely upon Rules 6e-2 and 6e-
3(T) and wish to continue to rely upon that relief provided in those
Rules, that the Applicants are applying for the relief described in the
Application. If and when a material irreconcilable conflict between the
Separate Accounts arises in this context or between Separate Accounts
on the one hand and Qualified Plans, the Manager or General Accounts on
the other hand, the Participating Insurance Companies, Qualified Plans
and the Manager must take whatever steps are necessary to remedy or
eliminate the conflict, including eliminating the Insurance Funds as
eligible investment options. Applicants have concluded that investment
by the Manager or the inclusion of Qualified Plans or General Accounts
as eligible shareholders should not increase the risk of material
irreconcilable conflicts among shareholders. However, Applicants
further assert that even if a material irreconcilable conflict
involving the Qualified Plans, Manager or General Accounts arose, the
Qualified Plans, Manager or General Accounts, unlike the Separate
Accounts, can simply redeem their shares and make alternative
investments. By contrast, insurance companies cannot simply redeem
their separate accounts out of one fund and invest in another. Time
consuming, complex transactions must be undertaken to accomplish such
redemptions and transfers. Applicants thus argue that allowing the
Manager, General Accounts or Qualified Plans to invest directly in the
Insurance Investment Companies should not increase the opportunity for
conflicts of interest.
    7. Applicants state that Treasury Regulations permit shares of an
investment company held by the separate accounts of insurance companies
funding variable life insurance contracts to also be held by a
Qualified Plan, the investment company's investment manager or its
affiliates, or a General Account. Thus, the sale of shares of the same
investment company to separate accounts through which variable life
insurance contracts and variable annuities are issued to Qualified
Plans, to the investment company's investment manager and its
affiliates, or to General Accounts (collectively, ``eligible
shareholders'') could not have been envisioned at the time of the
adoption of Rules 6e-2(b)(15) and 6e-3(T)(b)(15), given the then-
current tax law.
    8. Applicants state that Paragraph (3) of Section 9(a) provides,
among other things, that it is unlawful for any company to serve as
investment adviser to or principal underwriter for any registered open-
end investment company if an affiliated person of that company is
subject to a disqualification enumerated in Sections 9(a)(1) or (a)(2).
Rule 6e-2(b)(15)(i) and (ii) and Rule 6e-3(T)(b)(15)(i) and (ii) under
the 1940 Act provide exemptions from Section 9(a) under certain
circumstances, subject to the limitations discussed above on mixed and
shared funding. These exemptions limit the application of the
eligibility restrictions to affiliated individuals or companies that
directly participate in the management or administration of the
underlying fund.
    The relief provided by Rules 6e-2(b)(15)(i) and 6e-3(T)(b)(15)(i)
permits a person disqualified under Section 9(a) to serve as an
officer, director, or employee of the life insurer, or any of its
affiliates, so long as that person does not participate directly in the
management or administration of the underlying fund.
    The relief provided by Rules 6e-2(b)(15)(ii) and 6e-3(T)(b)(15)(ii)
permits the life insurer to serve as the underlying fund's investment
adviser or principal underwriter, provided that none of the insurer's
personnel who are ineligible, pursuant to Section 9(a), are
participating in the management or administration of the underlying
fund.
    Applicants submit that the partial relief granted in Rules 6e-
2(b)(15) and 6e-3(T)(b)(15) from the requirements of Section 9 limits,
in effect, the amount of monitoring of an insurer's personnel, which
would otherwise be necessary to ensure compliance with Section 9, to
that which is appropriate in light of the policy and purposes of
Section 9. Those Rules recognize that it is not necessary for the
protection of investors or the purposes fairly intended by the policy
and provisions of the 1940 Act to apply the provisions of Section 9(a)
to the many individuals in an insurance company complex, most of whom
typically will have no involvement in matters pertaining to investment
companies in that organization. Applicants assert that it is also
unnecessary to apply Section 9(a) of the 1940 Act to the many
individuals employed by Participating Insurance Companies (or
affiliated companies of Participating Insurance Companies) who do not
directly participate in the administration or management of the
Insurance Investment Companies.
    Applicants claim there is no regulatory purpose in extending the
monitoring requirements to embrace a full application of Section 9(a)'s
eligibility restrictions because of mixed funding or shared funding.
Many of the Participating Insurance Companies are not expected to play
any role in the management or administration of the Insurance
Investment Companies. Those individuals who participate in the
management or administration of the Insurance Investment Companies will
remain the same regardless of which separate accounts or insurance
companies use the Insurance Investment Companies. Therefore, applying
the monitoring requirements of Section 9(a) to the thousands of
individuals employed by the Participating Insurance Companies would not
serve any regulatory purpose. Furthermore, the increased monitoring
costs would reduce the net rates of return realized by contract owners
and Plan participants.
    Moreover, the relief requested should not be affected by the sale
of shares of the Insurance Investment Companies to Qualified Plans, the
Manager or General Accounts under the circumstances described in this
Application. The insulation of the Insurance Investment Companies from
those individuals who are disqualified under the 1940 Act remains in
place. Because Qualified Plans, the Manager and General Accounts are
not investment companies and will not be deemed to be affiliated

with the Insurance Investment Companies solely by virtue of their
shareholdings, no additional relief is necessary.
    9. Applicants submit that Rules 6e-2(b)(15)(iii) and 6e-
3(T)(b)(15)(iii) under the 1940 Act provide exemptions from the pass-
through voting requirement with respect to several significant matters,
assuming the limitations on mixed and shared funding are observed.
Rules 6e-2(b)(15)(iii)(A) and 6e-3(T)(b)(15)(iii)(A) provide that an
insurance company may disregard the voting instructions of its contract
owners with respect to the investments of an underlying fund, or any
contract between such a fund and its investment adviser, when required
to do so by an insurance regulatory authority (subject to the
provisions of paragraphs (b)(5)(i) and (b)(7)(ii)(A) of Rules 6e-2 and
6e-3(T), respectively, under the 1940 Act). Rules 6e-2(b)(15)(iii)(B)
and 6e-3(T)(b)(15)(iii)(A)(2) provide that an insurance company may
disregard the voting instructions of its contract owners if the
contract owners initiate any change in an underlying fund's investment
policies, principal underwriter, or any investment adviser (provided
that disregarding such voting instructions is reasonable and subject to
the other provisions of paragraphs (b)(5)(ii), (b)(7)(ii)(B), and
(b)(7)(ii)(C), respectively, of Rules 6e-2 and 6e-3(T) under the 1940
Act).
    10. Applicants assert that Rule 6e-2 recognizes that a variable
life insurance contract is an insurance contract; it has important
elements unique to insurance contracts; and it is subject to extensive
state regulation of insurance. In adopting Rule 6e-2(b)(15)(iii), the
Commission expressly recognized that state insurance regulators have
authority, pursuant to state insurance laws or regulations, to
disapprove or require changes in investment policies, investment
advisers, or principal underwriters. The Commission also expressly
recognized that state insurance regulators have authority to require an
insurer to draw from its general account to cover costs imposed upon
the insurer by a change approved by contract owners over the insurer's
objection. The Commission therefore deemed such exemptions necessary
``to assure the solvency of the life insurer and performance of its
contractual obligations by enabling an insurance regulatory authority
or the life insurer to act when certain proposals reasonably could be
expected to increase the risks undertaken by the life insurer.'' In
this respect, flexible premium variable life insurance contracts are
identical to scheduled premium variable life insurance contracts;
therefore, Rule 6e-3(T)'s corresponding provisions presumably were
adopted in recognition of the same factors. State insurance regulators
have much the same authority with respect to variable annuity separate
accounts as they have with respect to variable life insurance separate
accounts. Insurers generally assume both mortality and expense risks
under variable annuity contracts. Therefore, variable annuity contracts
pose some of the same kinds of risks to insurers as variable life
insurance contracts. The Commission staff has not addressed the general
issue of state insurance regulators' authority in the context of
variable annuity contracts, and has not developed a single
comprehensive exemptive rule for variable annuity contracts.
    11. Applicants assert that the Insurance Investment Companies' sale
of shares to Qualified Plans, the Manager or General Accounts will not
have any impact on the relief requested herein in this regard. Shares
of the Insurance Investment Companies sold to Qualified Plans would be
held by the trustees of such Plans. The exercise of voting rights by
Qualified Plans, whether by the trustees, by participants, by
beneficiaries, or by investment managers engaged by the Plans, does not
present the type of issues respecting the disregard of voting rights
that are presented by variable life separate accounts. With respect to
the Qualified Plans, which are not registered as investment companies
under the 1940 Act, there is no requirement to pass through voting
rights to Plan participants. Similarly, the Manager and General
Accounts are not subject to any pass-through voting requirements.
Accordingly, unlike the case with Separate Accounts, the issue of the
resolution of material irreconcilable conflicts with respect to voting
is not present with Qualified Plans, the Manager or General Accounts.
    12. Applicants assert that shared funding by unaffiliated insurance
companies does not present any issues that do not already exist where a
single insurance company is licensed to do business in several or all
states. A particular state insurance regulatory body could require
action that is inconsistent with the requirements of other states in
which the insurance company offers its policies. The fact that
different insurers may be domiciled in different states does not create
a significantly different or enlarged problem.
    13. Applicants further assert that shared funding by unaffiliated
Participating Insurance Companies is, in this respect, no different
than the use of the same investment company as the funding vehicle for
affiliated Participating Insurance Companies, which Rules 6e-2(b)(15)
and 6e-3(T)(b)(15) permit under various circumstances. Affiliated
Participating Insurance Companies may be domiciled in different states
and be subject to differing state law requirements. Affiliation does
not reduce the potential, if any exists, for differences in state
regulatory requirements. In any event, the conditions discussed below
are designed to safeguard against and provide procedures for resolving
any adverse effects that differences among state regulatory
requirements may produce.
    14. Applicants maintain that the right under Rules 6e-2(b)(15) and
6e-3(T)(b)(15) of an insurance company to disregard contract owners'
voting instructions does not raise any issues different from those
raised by the authority of state insurance administrators over separate
accounts. Under Rules 6e-2(b)(15) and 6e-3(T)(b)(15), an insurer can
disregard contract owner voting instructions only with respect to
certain specified items and under certain specified conditions.
Affiliation does not eliminate the potential, if any exists, for
divergent judgments as to the advisability or legality of a change in
investment policies, principal underwriter, or investment adviser
initiated by contract owners. The potential for disagreement is limited
by the requirements in Rules 6e-2 and 6e-3(T) that the insurance
company's disregard of voting instructions be reasonable and based on
specific good faith determinations. However, a particular Participating
Insurance Company's disregard of voting instructions nevertheless could
conflict with the majority of contract owner voting instructions. The
Participating Insurance Company's action could arguably be different
than the determination of all or some of the other Participating
Insurance Companies (including affiliated insurers) that the contract
owners' voting instructions should prevail, and could either preclude a
majority vote approving the change or could represent a minority view.
If the Participating Insurance Company's judgment represents a minority
position or would preclude a majority vote, the Participating Insurance
Company may be required, at an Insurance Investment Company's election,
to withdraw its separate account's investment in that Insurance
Investment Company, and no

charge or penalty would be imposed as a result of such withdrawal.
    15. With respect to voting rights, Applicants assert that it is
possible to provide an equitable means of giving such voting rights to
contract owners and to Qualified Plans, the Manager or General
Accounts. The transfer agent(s) for the Insurance Investment Companies
will inform each shareholder, including each separate account, each
Qualified Plan, the Manager and each General Account, of its share
ownership, in an Insurance Investment Company. Each Participating
Insurance Company will then solicit voting instructions in accordance
with the ``pass-through'' voting requirement. Investment by Qualified
Plans or General Accounts in any Insurance Investment Company will
similarly present no conflict. The likelihood that voting instructions
of insurance company contract owners will ever be disregarded or the
possible withdrawal referred to immediately above is extremely remote
and this possibility will be known, through prospectus disclosure, to
any Qualified Plan or General Account choosing to invest in an
Insurance Fund. Moreover, even if a material irreconcilable conflict
involving Qualified Plans or General Accounts arises, the Qualified
Plans or General Accounts may simply redeem their shares and make
alternative investments.
    16. Applicants assert that there is no reason that the investment
policies of an Insurance Fund would or should be materially different
from what they would or should be if such Insurance Fund funded only
variable annuity contracts or variable life insurance policies, whether
flexible premium or scheduled premium policies. Each type of insurance
product is designed as a long-term investment program. Similarly, the
investment strategy of Qualified Plans and General Accounts (i.e.,
long-term investment) coincides with that of variable contracts and
should not increase the potential for conflicts. Each of the Insurance
Funds will be managed to attempt to achieve its investment objective,
and not to favor or disfavor any particular Participating Insurance
Company or type of insurance product or other investor. There is no
reason to believe that different features of various types of contracts
will lead to different investment policies for different types of
variable contracts. The sale and ultimate success of all variable
insurance products depends, at least in part, on satisfactory
investment performance, which provides an incentive for the
Participating Insurance Company to seek optimal investment performance.
    17. Furthermore, Applicants assert that no one investment strategy
can be identified as appropriate to a particular insurance product.
Each pool of variable annuity and variable life insurance contract
owners is composed of individuals of diverse financial status, age,
insurance needs and investment goals. An Insurance Fund supporting even
one type of insurance product must accommodate these diverse factors in
order to attract and retain purchasers. Permitting mixed and shared
funding will provide economic justification for the growth of the
Insurance Investment Company. In addition, permitting mixed and shared
funding will facilitate the establishment of additional Insurance Funds
serving diverse goals. The broader base of contract owners and
shareholders can also be expected to provide economic justification for
the creation of additional series of each Insurance Investment Company
with a greater variety of investment objectives and policies.
    18. Applicants maintain that Section 817(h) of the Code is the only
section in the Code where separate accounts are discussed. Section
817(h) imposes certain diversification standards on the underlying
assets of variable annuity contracts and variable life contracts held
in the portfolios of management investment companies. Treasury
Regulation 1.817-5, which established diversification requirements for
such portfolios, specifically permits, in paragraph (f)(3), among other
things, ``qualified pension or retirement plans,'' ``the general
account of a life insurance company,'' ``the manager * * * of an
investment company'' and separate accounts to share the same underlying
management investment company. Applicants therefore have concluded that
neither the Code nor the Treasury Regulations nor Revenue Rulings
thereunder present any inherent conflicts of interest if Qualified
Plans, Separate Accounts, the Manager and General Accounts all invest
in the same underlying fund.
    19. Applicants maintain that the ability of the Insurance
Investment Companies to sell their shares directly to Qualified Plans,
the Manager or General Accounts does not create a ``senior security,''
as such term is defined under Section 18(g) of the 1940 Act, with
respect to any variable contract, Qualified Plan, Manager or General
Accounts. As noted above, regardless of the rights and benefits of
contract owners or Qualified Plan participants, the Separate Accounts,
Qualified Plans, the Manager and the General Accounts have rights only
with respect to their respective shares of the Insurance Investment
Companies. They can only redeem such shares at net asset value. No
shareholder of any of the Insurance Investment Companies has any
preference over any other shareholder with respect to distribution of
assets or payment of dividends.
    20. Applicants considered whether there is a potential for future
conflicts of interest between Participating Separate Accounts and
Qualified Plans created by future changes in the tax laws. Applicants
do not see any greater potential for material irreconcilable conflicts
arising between the interests of participants under Qualified Plans and
contract owners of Participating Separate Accounts from possible future
changes in the federal tax laws than that which already exists between
variable annuity contract owners and variable life insurance contract
owners.
    21. Applicants assert that permitting an Insurance Investment
Company to sell its shares to the Manager in compliance with Treas.
Reg. 1.817-5 will enhance Insurance Investment Company management
without raising significant concerns regarding material irreconcilable
conflicts.
    22. Applicants submit that given the conditions of Treas. Reg.
1.817-5(i)(3) and the harmony of interest between an Insurance
Investment Company, on the one hand, and its Manager(s) or a
Participating Insurance Company, on the other, little incentive for
overreaching exists. Applicants assert that such investments should not
implicate the concerns discussed above regarding the creation of
material irreconcilable conflicts. Instead, Applicants assert that
permitting investment by the Manager or General Accounts will permit
the orderly and efficient creation and operation of Insurance
Investment Companies, and reduce the expense and uncertainty of using
outside parties at the early stages of Insurance Investment Company
operations.
    23. Applicants assert that various factors have limited the number
of insurance companies that offer variable contracts. These factors
include the costs of organizing and operating a funding medium, the
lack of expertise with respect to investment management (principally
with respect to stock and money market investments) and the lack of
name recognition by the public of certain Participating Insurance
Companies as investment experts. In particular, some smaller life
insurance companies may not find it economically feasible, or within
their investment or administrative expertise, to enter the variable
contract business on their own. Use of the Insurance Investment

Companies as a common investment medium for variable contracts,
Qualified Plans and General Accounts would help alleviate these
concerns, because Participating Insurance Companies, Qualified Plans
and General Accounts will benefit not only from the administrative
expertise of Advisors and its affiliates, as well as the investment
expertise of any investment manager to an Insurance Fund, but also from
the cost efficiencies and investment flexibility afforded by a large
pool of funds. Therefore, making the Insurance Investment Companies
available for mixed and shared funding and permitting the purchase of
Insurance Investment Company shares by Qualified Plans and General
Accounts may encourage more insurance companies to offer variable
contracts, and this should result in increased competition with respect
to both variable contract design and pricing, which can be expected to
result in more product variation and lower charges. Mixed and shared
funding also may benefit variable contract owners by eliminating a
significant portion of the costs of establishing and administering
separate funds. Furthermore, granting the requested relief should
result in an increased amount of assets available for investment by the
Insurance Investment Companies. This may benefit variable contract
owners by promoting economies of scale, by reducing risk through
greater diversification due to increased money in the Insurance
Investment Companies, or by making the addition of new Insurance Funds
more feasible.
    Applicants' Conditions:
    Applicants and the Manager agree that the order granting the
requested relief shall be subject to the following conditions, which
shall apply to the Trust as well as any future Insurance Investment
Company that relies on the order:
    1. A majority of the Board of Trustees or Board of Directors
(``Board'') of each Insurance Investment Company shall consist of
persons who are not ``interested persons'' of the Insurance Investment
Company, as defined by Section 2(a)(19) of the 1940 Act and the rules
thereunder and as modified by any applicable orders of the Commission
(``Independent Board Members''), except that if this condition is not
met by reason of the death, disqualification, or bona fide resignation
of any trustee or director, then the operation of this condition shall
be suspended: (i) For a period of 90 days if the vacancy or vacancies
may be filled by the Board; (ii) for a period of 150 days if a vote of
shareholders is required to fill the vacancy or vacancies; or (iii) for
such longer period as the Commission may prescribe by order upon
application or by future rule.
    2. The Board of each Insurance Investment Company will monitor the
Insurance Investment Company for the existence of any material
irreconcilable conflict among and between the interests of the contract
owners of all Separate Accounts, participants of Qualified Plans, the
Manager or General Accounts investing in that Insurance Investment
Company, and determine what action, if any, should be taken in response
to such conflicts. A material irreconcilable conflict may arise for a
variety of reasons, including: (i) An action by any state insurance
regulatory authority; (ii) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretative letter, or any
similar action by insurance, tax, or securities regulatory authorities;
(iii) an administrative or judicial decision in any relevant
proceeding; (iv) the manner in which the investments of any Insurance
Fund are being managed; (v) a difference in voting instructions given
by variable annuity contract owners, variable life insurance contract
owners, and trustees of the Qualified Plans; (vi) a decision by a
Participating Insurance Company to disregard the voting instructions of
contract owners; or (vii) if applicable, a decision by a Qualified Plan
to disregard the voting instructions of Plan participants.
    3. Participating Insurance Companies (on their own behalf, as well
as by virtue of any investment of General Account assets in all
Insurance Investment Companies), a Manager, and any trustee on behalf
of any Qualified Plan that executes a fund participation agreement upon
becoming an owner of 10% or more of the assets of an Insurance
Investment Company (``Participating Qualified Plan'') (collectively,
``Participants'') will report any potential or existing conflicts to
the Board. Participants will be responsible for assisting the Board in
carrying out the Board's responsibilities under these conditions by
providing the Board with all information reasonably necessary for the
Board to consider any issues raised. This responsibility includes, but
is not limited to, an obligation by each Participating Insurance
Company to inform the Board whenever contract owner voting instructions
are disregarded and, if pass-through voting is applicable, an
obligation by each trustee for a Qualified Plan that is a Participant
to inform the Board whenever it has determined to disregard Plan
participant voting instructions. The responsibility to report such
information and conflicts and to assist the Board will be a contractual
obligation of all Participating Insurance Companies under their
agreements governing participation in the Insurance Investment Company,
and such responsibilities will be carried out with a view only to the
interests of the contract owners. The responsibility to report such
information and conflicts and to assist the Board also will be
contractual obligations of all Participating Qualified Plans under
their agreements governing participation in the Insurance Investment
Company, and such agreements will provide that these responsibilities
will be carried out with a view only to the interests of Qualified Plan
participants.
    4. If it is determined by a majority of the Board of an Insurance
Investment Company, or a majority of its Independent Board Members,
that a material irreconcilable conflict exists, the relevant
Participant shall, at its expense and to the extent reasonably
practicable (as determined by a majority of the Independent Board
Members), take whatever steps are necessary to remedy or eliminate the
material irreconcilable conflict, up to and including: (i) Withdrawing
the assets allocable to some or all of the Separate Accounts from the
relevant Insurance Investment Company or any series therein and
reinvesting such assets in a different investment medium (including
another Insurance Fund, if any); (ii) in the case of Participating
Insurance Companies, submitting the question of whether such
segregation should be implemented to a vote of all affected contract
owners and, as appropriate, segregating the assets of any appropriate
group (i.e., variable annuity contract owners or variable life
insurance contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the
affected contract owners the option of making such a change; (iii)
withdrawing the assets allocable to some or all of the Qualified Plans
from the affected Insurance Investment Company or any Insurance Fund
and reinvesting those assets in a different investment medium; and (iv)
establishing a new registered management investment company or managed
separate account. If a material irreconcilable conflict arises because
of a Participating Insurance Company's decision to disregard contract
owner voting instructions and that decision represents a minority
position or would preclude a majority vote, the

Participating Insurance Company may be required, at the Insurance
Investment Company's election, to withdraw its Separate Account's
investment in the Insurance Investment Company, and no charge or
penalty will be imposed as a result of such withdrawal. If a material
irreconcilable conflict arises because of a Qualified Plan's decision
to disregard Plan participant voting instructions, if applicable, and
that decision represents a minority position or would preclude a
majority vote, the Qualified Plan may be required, at the election of
the Insurance Investment Company, to withdraw its investment in the
Insurance Investment Company, and no charge or penalty will be imposed
as a result of such withdrawal. The responsibility to take remedial
action in the event of a Board determination of a material
irreconcilable conflict and to bear the cost of such remedial action
shall be a contractual obligation of all Participants under their
agreements governing participation in the Insurance Investment Company,
and these responsibilities will be carried out with a view only to the
interests of the contract owners or Plan participants.
    For the purposes of this Condition (4), a majority of the
Independent Board Members shall determine whether or not any proposed
action adequately remedies any material irreconcilable conflict, but in
no event will the Insurance Investment Company or its Manager be
required to establish a new funding medium for any variable contract.
No Participating Insurance Company shall be required by this Condition
(4) to establish a new funding medium for any variable contract if an
offer to do so has been declined by vote of a majority of contract
owners materially and adversely affected by the material irreconcilable
conflict. No Qualified Plan shall be required by this Condition (4) to
establish a new funding medium for such Qualified Plan if (i) a
majority of Qualified Plan participants materially and adversely
affected by the material irreconcilable conflict vote to decline such
offer or (ii) pursuant to governing Qualified Plan documents and
applicable law, the Qualified Plan makes such decision without
Qualified Plan participant vote.
    5. The Board's determination of the existence of a material
irreconcilable conflict and its implications shall be made known
promptly in writing to all Participants.
    6. Participating Insurance Companies will provide pass-through
voting privileges to all variable contract owners whose contracts are
funded through a registered Separate Account as required by the 1940
Act as interpreted by the Commission. However, as to variable contracts
issued by unregistered Separate Accounts, pass-through voting
privileges will be extended to contract owners to the extent granted by
the issuing insurance company. Accordingly, such Participating
Insurance Companies, where applicable, will vote shares of each
Insurance Fund held in their Separate Accounts in a manner consistent
with voting instructions timely received from such contract owners.
Participating Insurance Companies shall be responsible for assuring
that each of their Separate Accounts investing in an Insurance
Investment Company calculates voting privileges in a manner consistent
with all other Participating Insurance Companies, as instructed by the
Insurance Investment Company.
    The obligation to calculate voting privileges as provided in this
Application shall be a contractual obligation of all Participating
Insurance Companies under their agreements governing participation in
the Insurance Investment Company. Each Participating Insurance Company
will vote shares for which it has not received timely voting
instructions, as well as shares held in its General Account or
otherwise attributed to it, in the same proportion as it votes those
shares for which it has received voting instructions. Each Plan will
vote as required by applicable law and governing Plan documents.
    7. As long as the 1940 Act requires pass-through voting privileges
to be provided to variable contract owners or the Commission interprets
the 1940 Act to require the same, a Manager and any General Account
will vote their respective shares in the same proportion as all
variable contract owners having voting rights with respect to that
Insurance Investment Company or Insurance Fund, as the case may be;
provided, however, that a Manager or any General Account shall vote its
shares in such other manner as may be required by the Commission or its
staff.
    8. An Insurance Fund will make its shares available to a Separate
Account and/or Qualified Plans at or about the same time it accepts any
seed capital from any Manager or any General Account of a Participating
Insurance Company.
    9. An Insurance Investment Company will notify all Participants
that disclosure regarding potential risks of mixed and shared funding
may be appropriate in prospectuses for any of the Separate Accounts and
in Plan disclosure documents. Each Insurance Investment Company will
disclose in its prospectus that: (i) Shares of the Insurance Investment
Company may be offered to insurance company Separate Accounts that fund
both variable annuity and variable life insurance contracts, and to
Qualified Plans; (ii) due to differences of tax treatment or other
considerations, the interests of various contract owners participating
in the Insurance Investment Company and the interests of Qualified
Plans or General Accounts investing in the Insurance Investment Company
might at some time be in conflict; and (iii) the Board will monitor
events in order to identify the existence of any material
irreconcilable conflicts and to determine what action, if any, should
be taken in response to any such conflict.
    10. All reports received by the Board of potential or existing
conflicts, and all Board action with regard to determining the
existence of a conflict, notifying Participants of a conflict, and
determining whether any proposed action adequately remedies a conflict,
will be properly recorded in the minutes of the Board or other
appropriate records, and such minutes or other records shall be made
available to the Commission upon request.
    11. If and to the extent Rule 6e-2 and Rule 6e-3(T) under the 1940
Act are amended, or Rule 6e-3 is adopted, to provide exemptive relief
from any provision of the 1940 Act or the rules thereunder with respect
to mixed or shared funding on terms and conditions materially different
from any exemptions granted in the order requested in this Application,
then each Insurance Investment Company and/or the Participating
Insurance Companies, as appropriate, shall take such steps as may be
necessary to comply with Rule 6e-2 and Rule 6e-3(T), as amended, and
Rule 6e-3, as adopted, to the extent such rules are applicable.
    12. Each Insurance Investment Company will comply with all
provisions of the 1940 Act requiring voting by shareholders (which, for
these purposes, shall be the persons having a voting interest in the
shares of that Insurance Investment Company or Insurance Fund, as the
case may be), and in particular each Insurance Investment Company will
either provide for annual meetings (except insofar as the Commission
may interpret Section 16 of the 1940 Act not to require such meetings)
or comply with Section 16(c) of the 1940 Act (although each Insurance
Investment Company is not, or will not be, one of the trusts described
in Section 16(c) of the 1940 Act) as well as with Section 16(a) of the
1940 Act and, if and when applicable, Section 16(b) of the 1940 Act.
Further, each Insurance Investment Company

will act in accordance with the Commission's interpretation of the
requirements of Section 16(a) of the 1940 Act with respect to periodic
elections of directors (or trustees) and with whatever rules the
Commission may promulgate with respect thereto.
    13. Each Participant shall at least annually submit to the Board of
an Insurance Investment Company such reports, materials or data as the
Board may reasonably request so that it may fully carry out the
obligations imposed upon it by the conditions contained in this
Application. Such reports, materials and data shall be submitted more
frequently, if deemed appropriate, by the Board. The obligations of the
Participants to provide these reports, materials and data to the Board
of the Insurance Investment Company when it so reasonably requests,
shall be a contractual obligation of the Participants under their
agreements governing participation in each Insurance Investment
Company.
    14. Each Insurance Investment Company will not accept a purchase
order from a Qualified Plan if such purchase would make the Qualified
Plan an owner of 10% or more of the assets of the Insurance Investment
Company unless the trustee for such Plan executes a participation
agreement with such Insurance Investment Company which includes the
conditions set forth herein to the extent applicable. A trustee for a
Qualified Plan will execute an application containing an acknowledgment
of this condition at the time of such Plan's initial purchase of the
shares of any Insurance Investment Company or Insurance Fund.
    Conclusion: Applicants submit that, for the reasons summarized
above, the requested exemptions from Sections 9(a), 13(a), 15(a), and
15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, in accordance with the standards of Section 6(c) of the
1940 Act, are in the public interest and 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,
under delegated authority.
Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-29697 Filed 12-15-08; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 75, Number 247 (Monday, December 27, 2010)]
[Notices]
[Page 81283]
[FR Doc No: 2010-32413]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2010-N-0001]

Oncologic Drugs Advisory Committee; Cancellation

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The meeting of the Oncologic Drugs Advisory Committee
scheduled for February 9, 2011, is cancelled. This meeting was
announced in the Federal Register of December 6, 2010 (75 FR 75680). On
February 9, 2011, the Oncologic Drugs Advisory Committee was scheduled
to discuss biologics license application (BLA) 125377, with the
proposed trade name YERVOY (ipilimumab), submitted by Bristol-Myers
Squibb Co. The proposed indication (use) for this product is for the
treatment of advanced melanoma in patients who have received prior
therapy. This meeting has been cancelled because the issues for which
FDA was seeking the scientific input of the committee have been
resolved.

FOR FURTHER INFORMATION CONTACT: Nicole Vesely, Center for Drug
Evaluation and Research, Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 31, rm. 2417, Silver Spring, MD 20993-0002, 301-
796-9001, FAX:<PHONE_NUMBER>, e-mail<EMAIL_ADDRESS>or FDA
Advisory Committee Information Line, 1-800-741-8138<PHONE_NUMBER> in
the Washington, DC area), and follow the prompts to the desired center
or product area. Please call the Information Line for up-to-date
information on this meeting.

    Dated: December 21, 2010.
Jill Hartzler Warner,
Acting Associate Commissioner for Special Medical Programs.
[FR Doc. 2010-32413 Filed 12-23-10; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register Volume 87, Number 247 (Tuesday, December 27, 2022)]
[Notices]
[Pages 79438-79440]
[FR Doc No: 2022-28062]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2022-0059; Notice 1]

Daimler Trucks North America, LLC, Receipt of Petition for
Decision of Inconsequential Noncompliance

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

ACTION: Receipt of petition.

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SUMMARY: Daimler Trucks North America, LLC, (DTNA) has determined that
certain model year (MY) 2022-2023 Freightliner (FCCC) EconicSD do not
fully comply with Federal Motor Vehicle Safety Standard (FMVSS) No.
106, Brake Hoses. DTNA filed a noncompliance report dated May 12, 2022.
DTNA subsequently petitioned NHTSA on June 8, 2022, for a decision that
the subject noncompliance is inconsequential as it relates to motor
vehicle safety. This document announces receipt of DTNA's petition.

DATES: Send comments on or before January 26, 2023.

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 in the title of this notice and be
submitted by any of the following methods:
     Mail: Send comments by mail addressed to the 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 Delivery: Deliver comments by hand to the 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 for Federal Holidays.
     Electronically: Submit comments electronically by logging
onto the Federal Docket Management System (FDMS) website at https://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 comments you have submitted by mail were
received, please enclose a stamped, self-addressed postcard with the
comments. Note that all comments received will be posted without change
to https://www.regulations.gov, including any personal information
provided.
    All comments and supporting materials received before the close of
business on the closing date indicated above will be filed in the
docket and will be considered. All comments and supporting materials
received after the closing date will also be filed and will be
considered to the fullest extent possible.
    When the petition is granted or denied, notice of the decision will
also be published in the Federal Register pursuant to the authority
indicated at the end of this notice.
    All comments, background documentation, and supporting materials
submitted to the docket may be viewed by anyone at the address and
times given above. The documents may also be viewed on the internet at
https://www.regulations.gov by following the online instructions for
accessing the docket. The docket ID number for this petition is shown
in the heading of this notice.
    DOT's complete Privacy Act Statement is available for review in a
Federal Register notice published on April 11, 2000, (65 FR 19477-78).

FOR FURTHER INFORMATION CONTACT: Manuel Maldonado, Safety Compliance
Engineer, NHTSA, Office of Vehicle Safety Compliance,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Overview

    DTNA has determined that certain MY 2022-2023 Freightliner (FCCC)
EconicSD do not fully comply with paragraphs S11.3.18 and S11.3.19 of
FMVSS No. 106, Brake Hoses (49 CFR 571.106). DTNA filed a noncompliance
report dated May 12, 2022, pursuant to 49 CFR 573, Defect and
Noncompliance Responsibility and Reports. DTNA subsequently petitioned
NHTSA on June 8, 2022, for an exemption from the notification and
remedy requirements of 49 U.S.C. Chapter 301 on the basis that this
noncompliance is inconsequential as it relates to motor vehicle safety,
pursuant to 40 U.S.C. 30118 and 49 U.S.C. 30120, Exemption for
Inconsequential Defect or Noncompliance.
    This notice of receipt of DTNA'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 and Equipment Involved

    Approximately 149 MY 2022-2023 Freightliner (FCCC) EconicSD,
manufactured between June 24, 2019, and March 9, 2022, are potentially
involved. The part numbers of the fittings involved are A 000 990 40 78
and A 000 990 43 78.

III. Noncompliance

    DTNA explains that the noncompliance is that certain fittings used
in the subject vehicle's air brake system failed to pass the tensile
strength test under boiling conditions and tensile strength test under
thermal conditioning, and therefore, do not comply with paragraphs
S11.3.18 and S11.3.19 and Table VIII of FMVSS No. 106. The subject
vehicles are equipped with an air brake system containing tubing that
has a nominal outside diameter (OD) of 8 mm and do not meet the
conditioned tensile load 75 lbf as required by Table VIII of FMVSS No.
106.

IV. Rule Requirements

    Paragraphs S11.3.18 and S11.3.19 of FMVSS No. 106 include the
requirements relevant to this petition. S11.3.18 requires that a
plastic air brake tubing assembly, when subjected to a tensile pull
test, must either elongate 50 percent or withstand the conditioned
tensile load in Table VIII of FMVSS No. 106 without separation from its
end fittings, with one end of the assembly conditioned in boiling water
for 5 minutes. S11.3.19 requires that a plastic air brake tubing
assembly, when subjected to a tensile pull test, must either elongate
50 percent or withstand the conditioned tensile load in Table VIII
without separation from its end fittings after the assembly has been
subjected to four cycles of conditioning in air at minus 40 degrees
Fahrenheit (minus 40 degrees Celsius) for thirty minutes, normalizing
at room temperature, conditioning in boiling water for 15 minutes, and
normalizing at room temperature.

V. Summary of DTNA's Petition

    The following views and arguments presented in this section, ``V.
Summary of DTNA's Petition,'' are the views and arguments provided by
DTNA. They have not been evaluated by the Agency and do not reflect the
views of the Agency.
    DTNA describes the subject noncompliance and states that the
noncompliance is inconsequential as it relates to motor vehicle safety.
DTNA explains that the subject noncompliance occurred because DTNA
carried over a European Econic vehicle fitting into the U.S. market
that had been believed to be compliant to FMVSS No. 106. DTNA later
discovered it was not certified to paragraphs S11.3.18 and S11.3.19 of
FMVSS No. 106. DTNA says that the noncompliant fittings ``are used only
in locations protected from stresses and thermal/boiling conditions.''
Therefore, DTNA believes that the subject noncompliance should be
deemed inconsequential to motor vehicle safety because the noncompliant
fittings are protected from the stresses that are tested by paragraphs
S11.3.18 and S11.3.19 of FMVSS No. 106.
    DTNA states that the noncompliant fittings have been used for 9
years in the European market and 3 years in the U.S. and Canadian
markets, and ``there has been no evidence of airline separations.''
DTNA investigated claims related to tensile loads on the noncompliant
fittings that were used in the subject vehicles across all of the
vehicles with the same fitting that were sold in Europe, the United
States, and Canada, and found no evidence of problems.
    DTNA describes the location of the noncompliant fitting in the
subject vehicle and provides photos to show that the noncompliant
fittings ``are mounted with protections and stress relief, such that
there are none of the tensile loads against which the FMVSS [No.] 106
provision was intended to protect.'' Due to the location of the
fittings, DTNA contends that they ``would not be subjected to any
loads'' and the area ``is expected to be free from debris, boiling
water, abnormally high temperatures, and so forth, such that the
integrity of the fittings would not be affected.'' Further, DTNA states
the noncompliant fittings have never failed and DTNA is not aware of
``any scenarios which would cause the air fittings to separate from the
connection points.''
    DTNA says that it tested a sample of the tubing configuration used
in the subject vehicles and found that the tubing failed during all
four pull strength tests at an average of 37.5 lbf for tensile load
strength, which is 50 percent less than what is required by S12.19 of
FMVSS No. 106. However, DTNA stated its belief that the tubing would
not be subjected to tensile forces as high as the 75 pounds required by
FMVSS No. 106 due to the location of the air brake system used in the
subject vehicles, as described above.
    DTNA claims that NHTSA precedent supports granting DTNA's petition
for the subject noncompliance. DTNA refers to the granting of a
petition submitted by Coupled Products, Inc.\1\, in which brake hose
assemblies it produced did not comply with the tensile strength
requirement provided in S5.3.4 of FMVSS No. 106 (a hydraulic brake hose
assembly is required to withstand a pull of 325 pounds without
separations of the hose from its end fittings during a slow pull test,
and a pull of 370 pounds during a fast pull test) and the water
absorption and tensile strength requirement provided in S5.3.6 (a
hydraulic brake hose assembly, after immersion in water for 70 hours,
is required to withstand a pull of 325 pounds without separation of the
hose from its end fittings during a slow pull test, and a pull of 370
pounds during a fast pull test). DTNA believes that, like the
noncompliance that Coupled Products, Inc., described, the noncompliant
fittings used in the subject vehicles are also ``restrained within
assemblies under the cab body and protected under the dash,''
therefore, DTNA contends that there are no forces acting upon the
noncompliant fittings.
---------------------------------------------------------------------------

    \1\ Coupled Products, Inc., Grant of Petition for Decision of
Inconsequential Noncompliance; 70 FR 35774 (June 21, 2005).
---------------------------------------------------------------------------

    DTNA concludes by again contending that the subject noncompliance
is inconsequential as it relates to motor vehicle safety, and that its
petition to be exempted from providing notification of the
noncompliance, as required by 49 U.S.C. 30118, and a remedy for the
noncompliance, as required by 49 U.S.C. 30120, be granted.
    DTNA's complete petition and supporting documents are available by
logging onto the Federal Docket

Management System (FDMS) website at: https://www.regulations.gov and by
following the online search instructions to locate the docket number as
listed in the title of this notice.

VI. Additional Information

    On July 6, 2022, NHTSA contacted DTNA for clarification on certain
parts of its petition. DTNA provided the name of the fabricating
manufacturer for the hose assemblies, Arco, and provided the intended
OD of the hose assemblies, 8 mm. DTNA also clarified the statements
describing the testing of the sample tubing configuration. DTNA
provided the test results and found that the average tensile load at
which the noncompliant component failed was 37.5 lbf.
    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 and equipment that
DTNA no longer controlled at the time it determined that the
noncompliance existed. However, any decision on this petition does not
relieve equipment distributors and dealers of the prohibitions on the
sale, offer for sale, or introduction or delivery for introduction into
interstate commerce of the noncompliant brake hoses and equipment under
their control after DTNA 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)

Otto G. Matheke III,
Director, Office of Vehicle Safety Compliance.
[FR Doc. 2022-28062 Filed 12-23-22; 8:45 am]
BILLING CODE 4910-59-P