1 Memorandum To: Public Docket for the 2006 Preliminary Effluent Guidelines Program Plan, EPA Docket Number OW 2003 0074 From: Jan Matuszko USEPA/ OW/ OST ph: ( 202) 566 1035 matuszko. jan@ epa. gov Date: July 26, 2005 Subject: Tobacco Products Processing Section 304( b) of the Clean Water Act requires EPA to annually review and, if appropriate, revise its technology based regulations, called " effluent limitations guidelines" or " effluent guidelines," that limit the discharge of pollutants to waters of the U. S. from various categories of industrial facilities. Every other year, Section 304( m) of the Clean Water Act requires EPA to publish a plan establishing a schedule for the annual review and revision of effluent guidelines required by Section 304( b). This plan must also identify industries discharging more than trivial amounts of toxic or " non conventional" pollutants, such as nutrients, for which the Agency has not yet promulgated effluent guidelines. EPA must establish a schedule for completing effluent guidelines for these industries within three years. Section 304( m) also requires EPA to take public comment on its plan prior to issuing a final plan.

During the comment period for the proposed 2004 Effluent Guidelines Plan ( Plan), EPA received public comment that it should consider wastewater discharges from the tobacco manufacturing industry for effluent guidelines rulemaking. In specific, the commenter questioned the quantity of carcinogens in wastewater discharges associated with cigarette manufacturing. Because this industry is not currently subject to an effluent guideline, EPA is conducting a study of the Tobacco Products industrial sector to determine whether this sector is discharging more than trivial amounts of toxic or " non conventional" pollutants. EPA's decision to conduct a detailed study on this industry does not mean that EPA is required to select this industry for an effluent guidelines rulemaking. EPA will make such a decision as part of the final 2006 Plan.

During this study, EPA plans to, at a minimum, collect information on the following as they relate to tobacco products manufacturing:

a. source and types of process wastewaters; b. volume of process wastewaters; c. pollutant concentrations in untreated process wastewaters; d. applicable treatment and pollution prevention ( flow and pollutant) technologies; e. effectiveness of applicable treatment and pollution prevention technologies; 2 f. cost information related to applicable treatment and pollution prevention technologies; g. pollutant concentrations in discharges to surface waters or to Publicly Owned Treatment Works ( POTWs); h. typical discharge destination ( i. e., direct to surface water or indirectly to POTW); and i. typical permit restrictions.

For additional information on study objectives, see the Tobacco Products Processing Detailed Study Plan [ 1] ( DCN 01827).

Industry Profile The Tobacco Products Processing industry includes facilities within the following four SIC codes:

° SIC code 2111 ( Cigarettes)  establishments primarily engaged in manufacturing cigarettes from tobacco or other materials.

° SIC code 2121 ( Cigars)  establishments primarily engaged in manufacturing cigars.

° SIC code 2131 ( Chewing and Smoking Tobacco and Snuff)  establishments primarily engaged in manufacturing chewing and smoking tobacco and snuff.

° SIC code 2141 ( Tobacco Stemming and Redrying)  establishments primarily engaged in the stemming and redrying of tobacco or in manufacturing reconstituted tobacco.

Based on information in the 2002 Economic Census, EPA estimates there are 114 tobacco products facilities in the United States. The U. S. Economic Census reports data by NAICS code while EPA's Toxics Release Inventory ( TRI) and Permit Compliance System ( PCS) databases report data by SIC code. For this reason, the 2002 Census data have been converted to the equivalent SIC code to standardize the results. Table 1 shows the number of facilities in each SIC Code as reported in the 2002 Census. 3 Table 1. Number of Tobacco Products Establishments, 2002 NAICS code Description SIC Code 2002 Census 312 221 Cigarette manufacturing 2111 15 312 229 Other tobacco products 2121 ( cigars) 83 2131 ( chewing & smoking tobacco)

312 210 Tobacco stemming and redrying 2141 16 total 114 source: U. S. Economic Census, 2002 [ 2]

Tobacco Manufacturing facilities are located throughout the United States with a concentration in Florida, North Carolina, Pennsylvania and Virginia. [ 3] Based on information in the 2002 Census, over half of the facilities have fewer than 20 employees. In fact, six facilities account for about 60% of the industry employment. That is, the industry is marked by a few very large facilities that account for the bulk of the production with a plethora of small widelydispersed facilities accounting for the rest. In addition, five of the six largest facilities in terms of employment are in cigarette manufacturing ( SIC Code 2111). The sixth is a cigar manufacturer.

For additional information and a more detailed industry profile, see Industry Profile for Tobacco Manufacturing Facilities [ 3] ( DCN 02281).

Tobacco Facilities Included in EPA Databases Table 2 presents the number of tobacco facilities with information in EPA's TRI and PCS databases.

Industrial or commercial facilities that discharge wastewater directly to surface waters are required to obtain an NPDES discharge permit from EPA or state permitting authorities. Permitting authorities classify discharges as major based on, among other factors, the potential for the discharge of toxic pollutants and the discharge flow. Facilities with major discharges must report compliance with NPDES permit limits via monthly Discharge Monitoring Reports ( DMRs) submitted to the permitting authority. The permitting authority enters the reported DMR data into PCS. EPA does not require permitting authorities to input monitoring data for minor dischargers. For this reason, the PCS database includes data only for a limited set of minor dischargers when the states choose to include these data. Based on information collected to date, only one direct discharging tobacco products processing facility is classified as a major discharger.

As shown in Table 2, nine of the 114 tobacco facilities enumerated by the 2002 census have active NPDES permits. The remaining facilities either discharge no wastewater or discharge their wastewater to a city sewer and POTW. Table 2 also shows that PCS includes discharge monitoring data for only one major facility ( Reynolds American, Hanmer Plant, Chester, VA). 4 The TRI database includes information reported by facilities that meet certain requirements: They must have operations in SIC codes 20 through 39, or seven additional SIC codes outside this range; they must have 10 or more full time employees; and they must manufacture, process or otherwise use each TRI listed chemical at or above the appropriate activity threshold ( specified for each chemical). In TRI, facilities report annual loads released to the environment of each toxic chemical or chemical category that meets reporting requirements. For this review, EPA focused on the amount of chemicals facilities reported either discharging directly to a receiving stream or discharging indirectly by transfer to a POTW.

As shown in Table 2, a total of 20 of the 114 tobacco facilities enumerated by the 2002 census reported wastewater discharges of TRI listed chemicals. Facilities that did not report to TRI may not discharge any wastewater or may discharge wastewater, but fail to meet the TRI employment or chemical use reporting requirements. Most reporting facilities either manufactured cigarettes or conducted tobacco stemming and re drying operations. No cigar manufacturers reported discharges.

Table 2. Number of Tobacco Facilities with Information in EPA Databases.

SIC Code Description 2002 PCS 2002 TRI Active Permits Major Dischargers with DMR data in PCS Total Direct Indirect Both2 2111 Cigarette manufacturing 2 0 7 1 5 1 2121 Cigars 1 0 0 0 0 0 2131 Chewing and Smoking Tobacco 1 0 4 0 4 0 2141 Tobacco stemming and re drying 5 1 9 1 6 2 9 1 20 2 15 3 Sources: EPA's Envirofacts database [ 4], PCSLoads2002 and TRIReleases2002 [ see 5]

One of the toxic chemical categories that facilities are required to report to TRI is " nicotine and salts." Table 3 presents the nicotine discharges reported by19 of the 20 tobacco facilities that reported wastewater discharges to TRI in 2002. More than 90% of the nicotine discharges are reported by cigarette manufacturers. Most of the rest are reported by facilities that report SIC code 2141, tobacco stemming and re drying, as their primary SIC code. 5 Table 3. Nicotine Wastewater Discharges ( pounds), by SIC Code SIC Code Description 2002 Nicotine Discharges Reported to TRI pounds % of total 2111 Cigarette manufacturing 552,397 93.46%

2121 Cigars 0 0 2131 Chewing and Smoking Tobacco 7,567 1.28%

2141 Tobacco stemming and re drying 31,079 5.26%

total 591,042 source: TRIReleases2002 [ 5] Note: discharges include transfers to POTWs and account for an average POTW removal efficiency for nicotine of 1.91%

Most facilities that report SIC code 2141 as their primary SIC code conduct stemming and re drying operations: grading, blending, and removing stems from the tobacco leaves then redrying the leaves to remove moisture and ensure they can be stored. Both stems and leaves are shipped to the end product manufacturer [ 3]. Some facilities that report SIC code 2141 produce reconstituted tobacco sheet which is used by other facilities owned by the same company to manufacture cigarettes. The Philip Morris Park 500 plant is an example. This facility processes the remainders left over from the cigarette production at other facilities into a product known as reconstituted tobacco. This paper like tobacco is shipped to other Philip Morris plants, where it is blended with virgin tobacco to make cigarettes. [ 3]

Wastewater Discharge Cigarette Manufacturing and Reconstituted Tobacco Based on information collected to date, EPA believes that primary processing at cigarette manufacturers and their related reconstituted tobacco operations are the only significant wastewater dischargers in this industry in terms of volume. Cigarette manufacturing accounts for 62% of the employment in the tobacco products industry. [ 3] Philip Morris USA, a subsidiary of the Altria Group, controls 49% of the U. S. market while Reynolds America ( formed by R. J. Reynolds' purchase of the Brown and Williamson division of British American Tobacco in 2004) owns 32% of the domestic market. The next largest company, in terms of market share, is Lorillard Tobacco Company ( part of Loews) with 9% of the market. [ 3]

EPA contacted each of these companies to collect information on wastewater generation, characteristics, control, and discharge at their facilities. These companies collectively operate six cigarette manufacturing facilities and two reconstituted tobacco facilities, two of which are direct discharges and four of which discharge indirectly to POTWs. One of the cigarette manufacturing facilities also performs reconstituted tobacco operations. According to these companies, these 6 three represent all of the reconstituted tobacco operations in the United States. Information submitted Philip Morris, Reynolds American, and Lorillard can be found in DCN 01834, 01835, and 01830, respectively.

EPA conducted site visits at four cigarette manufacturing facilities and two dedicated reconstituted tobacco facilities. For notes of pre visit discussions with these facilities, see DCNs 01912 to 01917. In addition to collecting information on processes and wastewater generation, EPA also collected grab samples of wastewater during these site visits. EPA collected these wastewater samples to 1) further characterize wastewater generated and/ or discharged at these facilities and 2) evaluate treatment effectiveness, as applicable. EPA expects to place non CBI information and data regarding these site visits and sampling episodes in the public record ( EPA Docket No. OW 2004 0032) by December 2005.

Tobacco Stemming and Redrying In its raw form, tobacco is a highly perishable product. It must be processed soon after harvest to create a product that can be stored until it is needed for use in cigarettes, cigars, and smokeless tobacco. Stemming and re drying facilities that process green   recently harvested   tobacco are the " middle man" between farmers and manufacturers. Stemming and redrying companies purchase tobacco to meet the specific needs of end product manufacturers with whom they have long standing relationships. After purchase, the company grades, blends, and removes the stems from the leaves then re dries the leaves to remove moisture and ensure they can be stored. Both stems and leaves are shipped to the end product manufacturer.

EPA estimates that there are 16 tobacco stemming and redrying facilities in the United States. They are primarily located on the East Coast  near tobacco farmers. EPA contacted one of the two primary companies that dominate this industrial sector. During processing, the only water usage is for misting. All of the water sprayed onto the tobacco during misting is absorbed by the tobacco; there is no wastewater discharge from this phase of the operation. The main wastewater source at these facilities results from rain that may come in contact with materials from baghouses, which are used for air controls. Therefore, based on information collected to date, EPA believes that very little process related wastewater, if any, is generated and/ or discharged from tobacco stemming and redrying facilities. See DCN 1921 for additional information on tobacco stemming and redrying. 7 Cigars There are three categories of cigars: premium cigars, large cigars, and little cigars. Premium cigars are hand made from the best tobacco and sell for $ 1 to more than $ 25 dollars each. The Congressional Research Service estimates that 99% of premium cigars are imported. Based on information collected to date, EPA believes that the remainder are made in very small shops. Outside of these small shops, the only other premium cigars manufactured in the United States are produced in Puerto Rico.

Large cigars are mass produced by machines from lower quality tobacco and sell for under a dollar each. Small cigars are machine made and defined as cigars that weigh less than three pounds per thousand. In 1997, approximately 2.3 billion large cigars were manufactured in the United States   about 61% of cigars   while small cigars made up about 39% of the market. In terms of production, cigarettes dwarf cigars. For comparison, it would take the Philip Morris cigarette manufacturing plant in Richmond less than 7 days to make 3.8 billion cigarettes, the number of cigars manufactured in the United States in all of 1997. In addition, some small cigar companies have recently moved manufacturing operations from the United States to other countries such as the Dominican Republic. For some locations, it is difficult to ascertain whether they only import tobacco or manufacture products from imported tobacco.

Because the vast majority of cigar manufacturing is conducted outside of the United States and/ or at a few small facilities, EPA does not believe that cigar manufacturing in the United States produces significant amount of wastewater discharges. As shown in Table 2, no cigar manufactures reported to TRI wastewater discharges of toxic chemicals in 2002.

Other Tobacco Products Processing This category includes a number of very different tobacco products. The most important are smokeless tobacco and smoking tobacco ( roll your own cigarettes and pipe tobacco). Overall, Census [ 3] reports 70 companies in this sector.

The smokeless tobacco category includes dry snuff, moist snuff, plug/ twist, and loose leaf chewing tobacco. According to the Federal Trade Commission, in 2001, moist snuff accounted for over 83% of smokeless tobacco sales, followed by loose leaf chewing tobacco with more than 13% of sales. All other smokeless tobacco products account for less than 4% of sales. [ 3]

References 1. Tobacco Products Processing, Draft Detailed Study Plan. November 10, 2004.

2. U. S. Economic Census. 2002. Available online at: http:// www. census. gov/ econ/ census02. 8 3. James Covington, III, EPA/ OW/ OST. Memorandum: Tobacco Manufacturing Industry: Economic Profile. August 10, 2005.

4. U. S. EPA, Envirofacts, Available online at: http:// www. epa. gov/ idea/

5. U. S. EPA, Screening Level Analysis Report. August 2005.


Significant New Alternatives Policy Program

Fire Extinguishing and Explosion Prevention Sector

Risk Screen on Substitutes for Halon 1301

Total Flooding Systems in Normally Occupied or Unoccupied Spaces

Substitute: Victaulic Vortex System®

This risk screen does not contain Clean Air Act (CAA) Confidential
Business Information (CBI) and, therefore, can be disclosed to the
public.

1. 	Introduction

Ozone-depleting substances (ODS) are being phased out of production in
response to a series of diplomatic and legislative efforts that have
taken place over the past decade, including the Montreal Protocol and
the Clean Air Act Amendments of 1990 (CAAA).  The U.S. Environmental
Protection Agency (EPA), as authorized by Section 612 of the CAAA, is
developing a program to evaluate the human health and environmental
risks posed by alternatives to ODS.  The main purpose of EPA's program,
called the Significant New Alternatives Policy (SNAP) program, is to
identify acceptable and unacceptable substitutes for ODS in specific end
uses.

EPA’s decision on the acceptability of a substitute is based largely
on the findings of a screening assessment of potential human health and
environmental risks posed by the substitute in specific applications.
EPA has already screened a large number of substitutes in many end uses
within all of the major ODS-using sectors, including refrigeration and
air conditioning, solvent cleaning, foam blowing, aerosols, fire
suppression, adhesives, coatings and inks, and sterilization.  The
results of these risk screens are presented in a series of Background
Documents that are available in EPA's docket.

The purpose of this report is to supplement EPA’s Background Document
on the fire suppression and explosion protection sector (hereinafter
referred to as the Background Document, EPA 1994). This risk screen
discusses potential human health and environmental risks posed by the
Victaulic Vortex System® when used as a replacement for Halon 1301 for
use as a total flooding system in normally occupied or unoccupied
spaces.

The Victaulic Vortex System® is a hybrid water mist/inert gas system,
and is designed for total flooding applications for both Class A and B
fires in normally occupied or unoccupied spaces.  Upon activation,
pressurized streams of nitrogen and water are fed into an emitter, where
they are combined and discharged in a homogenous suspension.  Nitrogen
and water enter the emitter at rates of 6.2 and 3.7 kg/minute,
respectively (Victaulic Vortex System® SNAP Submission 2007).  The
homogenous mixture of nitrogen and water exits the emitter at speeds
varying from 210 to 520 meters/minute, depending on the distance from
the emitter.  Each emitter can protect up to 70 cubic meters of volume,
and multiple emitters may be combined to protect a single space.

To ensure that use of the Victaulic Vortex System® in the applications
listed above will not pose unacceptable risks to workers or the general
public, worst case occupational exposure at end-use , worst case
occupational exposure (during manufacturing, installation and
maintenance), and general population exposure analyses were performed.

Table 1 provides the composition of the Victaulic Vortex System®.

Table 1.  Composition of Victaulic Vortex Systema

Component	Chemical Formula	CAS No.	Weight Percent

Water	H2O	7732-18-5	62.6%

Nitrogen Gas	N2	7727-37-9	37.4%

	a Source: Victaulic Vortex System® SNAP Submission 2007

The remainder of this risk screen is organized as follows:

Section 2 of this report summarizes the results of the risk screen for
the Victaulic Vortex System®;

Section 3 presents atmospheric modeling and potential environmental
risks;

Section 4 assesses the toxicity of the substitute;

Section 5 discusses occupational exposure during manufacturing,
installation, and maintenance;

Section 6 assesses risks associated with general population exposure;
and

Section 7 assesses the emissions of volatile organic compounds.

2.	Summary of Results

The Victaulic Vortex System® is recommended for SNAP approval as a
total flooding device in normally occupied or unoccupied spaces for
Class A and B fires.  EPA recommends that Section VIII of the
Occupational Safety & Health Administration (OSHA) Technical Manual be
consulted for information on selecting the appropriate types of Personal
Protective Equipment (PPE) recommended (OSHA 1999).  The risk screen
indicates that the use of the proposed substitute in normally occupied
or unoccupied spaces will be less harmful to the atmosphere than the
continued use of Halon 1301.  Additionally, the risk to the general
population is expected to be below levels of concern for non-cancer
risks.  For applications of this and all other water mist/inert gas fire
suppression equipment, EPA recommends that the latest editions of
National Fire Protection Agency (NFPA) Standards 750 and 2001 be
followed.

3. 	Atmospheric Modeling

This section presents an assessment of the potential risks to
atmospheric integrity posed by the use of the Victaulic Vortex System®
as a total flooding system in normally occupied or unoccupied areas.
As indicated in Table 2, the ozone depleting potential (ODP) and global
warming potential (GWP) of each of the constituents of the Victaulic
Vortex System® is zero.  The GWP and ODP of the compounds in the
Victaulic Vortex System® are well below the GWPs of previously
SNAP-approved fire-suppression agents (e.g. HFCs and other high-GWP
fluids).  Accordingly, use of the Victaulic Vortex System® is not
expected to pose any significant adverse atmospheric impacts.

Table 2.  ODP and 100-Year GWP of the Victaulic Vortex System
Constituents

Constituent

ODP

100-Year GWP

H2O

0

NAa

N2

0

0

a During accidental release, water in the Victaulic Vortex System® is
present as a liquid and has no GWP.  In the presence of a fire, water in
the Victaulic system is in vapor form.  Although water vapor is a
greenhouse gas, human activities are not thought to directly affect the
average global concentration of water vapor (EPA, 2002).  There is no
IPCC published GWP for water vapor.

4.	Toxicity of Substitute

The primary health concern for agents containing inert gases, including
nitrogen gas, is asphyxiation due to reduced oxygen concentrations upon
accidental release of the system.  To determine whether asphyxiation
will be a toxicity threat, the Victaulic Vortex System® design
parameters were analyzed.  Victaulic conducted fire suppression tests to
measure the oxygen concentrations at the time of flame suppression for
both Class A and B fires.  Table 3 presents the results of Victaulic’s
fire testing.

Table 3.  Summary of Victaulic’s Fire Tests

Fire Class	Test Type	Extinguishing Concentrationa

% O2 /% air (v/v)b	% N2 /% air (v/v)c

Class A 	Wood Crib	16.0	23.6

	Polypropylene (PP)	15.5	26.0

	Acrylonitrile Butadiene Styrene (ABS)	15.8	24.6

	Polymethyl Methacrylate (PMMA)	14.0	33.2

Class B 	Heptane tell tale fires	15.6	25.5

	Heptane pan fires	15.5	26.0

a Source: Victaulic Vortex System® SNAP Submission 2007.

b O2 levels are experimentally measured.

c N2 levels are calculated based on experimentally measured O2 levels.
These values are exclusive of atmospheric nitrogen, i.e. represent the
concentration of nitrogen from the Victaulic Vortex System®

only in the air.

To determine the minimum design concentration for the Victaulic Vortex
System®, a 30 percent safety factor was applied to the extinguishing
concentrations presented in Table 3.  The extinguishing concentration
resulting from the PMMA and heptane pan fire tests were the highest, and
to be conservative these concentrations were used to determine the
minimum design concentration for Class A and B fires, respectively (see
Table 4).

Table 4.  Minimum Design Concentration for Class A and B Firesa

Class of Fire	Based on Extinguishing Concentration for:	Minimum Design
Concentration (% N2/% air (v/v))b, c

Class A	PMMA Fire	43.2%

Class B	Heptane pan fire	33.8%

a Source: Victaulic Vortex System® SNAP Submission 2007.

b Minimum design concentration was estimated by applying a 30 percent
safety factor to the extinguishing concentrations shown in Table 3.

c N2 levels are calculated based on experimentally measured O2 levels.
These values are exclusive of atmospheric nitrogen, i.e. represent the
concentration of nitrogen from the Victaulic Vortex System® only in the
air.

Because the Victaulic Vortex System® can be designed to ensure that the
oxygen concentration in any protected space will not fall below 12
percent over the 5 minute discharge period, the Victaulic Vortex
System® is considered safe for both Class A and B fires in normally
occupied or normally unoccupied spaces for inert gases.  System design
should be undertaken in accordance with NFPA 2001 Guidelines (NFPA,
2007).

5.	Occupational Exposure During Manufacture, Installation, and
Maintenance

The potential for personnel exposure during manufacture, installation,
and maintenance are examined in this section.  According to information
provided in the Victaulic SNAP application, workers may be exposed to
nitrogen gas during filling of the high pressure cylinders (Victaulic
Vortex System® SNAP Submission 2007).  The submitter reported exposure
concentrations of less than 1 percent in air during the disconnection of
filling hoses.  An exposure of 1 percent nitrogen, assuming an air-tight
room, would lower oxygen levels to 20 percent, which is above “oxygen
deficient levels” of 19.5 percent as defined by OSHA in its Respirator
Protection Standard (29 CFR 1910.134).

During installation or maintenance of Victaulic Vortex System®,
inadvertent discharge may occur.  Under these circumstances, oxygen
concentration would be expected to decline over time.  To ensure that
exposures are minimized, it is recommended that Victaulic provide safety
training for technicians to minimize the occurrence of an inadvertent
discharge.  Training should also be provided regarding egress from the
space should such a discharge occur.

6.	General Population Exposure

Given the large natural quantities of nitrogen and water in the
atmosphere, it is unlikely that an accidental release of the Victaulic
Vortex System® will affect the average atmospheric concentrations of
these gases.  As such the Victaulic Vortex System® is not believed to
pose a toxicity threat to the general population.

7.        Volatile Organic Compound Analysis

The constituents of the Victaulic Vortex System® are not considered
VOCs for purposes of local air quality.

8.	References

EPA.  1994. Risk Screen on the Use of Substitutes for Class I
Ozone-Depleting Substances: Fire Suppression and Explosion Protection
(Halon Substitutes).  Stratospheric Protection Division.  March 1994.

EPA, 2002.  Inventory of U.S. Greenhouse Gas Emissions and Sinks:
1990-2000.

IPCC (Intergovernmental Panel on Climate Change), 2005.  Special Report
on Safeguarding the Ozone Layer and the Global Climate System: Issues
Related to Hydrofluorocarbons and Perfluorocarbons, Special Report of
the Intergovernmental Panel on Climate Change, Cambridge, England, 2005.
 Available at:   HYPERLINK
"http://arch.rivm.nl/env/int/ipcc/pages_media/SROC-final/SpecialReportSR
OC.html"
http://arch.rivm.nl/env/int/ipcc/pages_media/SROC-final/SpecialReportSRO
C.html

NFPA, 2007. NFPA 2001: Standard on Clean Agent Fire Extinguishing
Systems.  2008 Edition.  Available at:   HYPERLINK
"http://www.nfpa.org/freecodes/free_access_document.asp"
http://www.nfpa.org/freecodes/free_access_document.asp

OSHA.  1999.  OSHA Technical Manual.  Department of Labor.  Occupational
Safety & Health Administration.  January 20, 1999.  Available online at:
  HYPERLINK "http://www.osha.gov/dts/osta/otm/otm_toc.html"
http://www.osha.gov/dts/osta/otm/otm_toc.html

Victaulic Vortex System® SNAP Submission 2007. Significant New
Alternatives Policy Program Submission to the United States
Environmental Protection Agency, 2007.

January 23, 2008

  PAGE  1


[Federal Register: May 27, 2009 (Volume 74, Number 100)]
[Notices]
[Page 25296-25297]
[DOCID:fr27my09-100]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59943; File No. SR-ISE-2009-28]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change Relating to the Extension of a Pilot Program for Directed Orders

May 20, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder, \2\ notice
is hereby given that on May 13, 2009, the International Securities
Exchange, LLC (``ISE'' or ``Exchange'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change as
described in Items I, II, and III below, which items have been prepared
by the ISE. The proposed rule change has been filed by the ISE as
effecting a change in an existing order-entry or trading system
pursuant to Section 19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(5)
thereunder,\4\ which renders the proposal effective upon filing with
the Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 7 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(5).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The ISE is proposing to extend the pilot period for the system
change that identifies to a Directed Market Maker (``DMM'') the
identity of the firm entering a Directed Order until November 30, 2009.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in sections A, B and C below, of the
most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On January 5, 2006, the ISE initiated a system change to identify
to a DMM the identity of the firm entering a Directed Order. The ISE
filed this system change on a pilot basis under Section 19(b)(3)(A) of
the Exchange Act of 1934 (the ``Exchange Act'') and Rule 19-4(f)(5)
thereunder \5\ so that it would be effective while the Commission
considered a separate proposed rule change filed under Section 19(b)(2)
of the Exchange Act to amend the ISE's rules to reflect the system
change on a permanent basis (the ``Permanent Rule Change'').\6\ The
current pilot expires on May 29, 2009,\7\ but the Commission has not
yet taken action with respect to the Permanent Rule Change.
Accordingly, the Exchange proposes to extend the pilot for an
additional six months, until November 30, 2009, so that the system
change will remain in effect while the Commission continues to evaluate
the Permanent Rule Change.\8\
---------------------------------------------------------------------------

    \5\ Exchange Act Release No. 53104 (Jan. 11, 2006), 71 FR 2142
(Jan. 19, 2006) (Notice of Filing and Immediate Effectiveness of SR-
ISE-2006-02).
    \6\ Exchange Act Release No. 53103 (Jan. 11, 2006), 71 FR 3144
(Jan. 19, 2006) (Notice of Filing of SR-ISE-2006-01).
    \7\ Exchange Act Release No. 59276 (January 22, 2009), 74 FR
5007 (January 28, 2009) (Notice of Filing and Immediate
Effectiveness of SR-ISE-2009-02).
    \8\ The ISE anticipated that extension of the pilot might be
necessary and included this in the filing for the initial pilot. See
supra note 5, at footnote 5.
---------------------------------------------------------------------------

2. Statutory Basis
    The basis under the Exchange Act is found in Section 6(b)(5), in
that the proposed rule change is designed to promote just and equitable
principles of trade, remove impediments to and perfect the mechanisms
of a free and open market and a national market system and, in general,
to protect investors and the public interest. Extension of the pilot
program will allow the Exchange to continue operating under the pilot
while the Commission considers the Permanent Rule Change.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Exchange Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The proposed rule change has become effective pursuant to Section
19(b)(3)(A) of the Exchange Act \9\ and Rule 19b-4(f)(5) \10\
thereunder. At any time within 60 days of the filing of such proposed
rule change, the Commission may summarily abrogate such rule change if
it appears to the Commission that such action is necessary or
appropriate in the public interest for the protection of investors, or
otherwise in furtherance of the proposes of the Exchange Act.
---------------------------------------------------------------------------

    \9\ 5 U.S.C. 78s(b)(3)(A).
    \10\ 7 CFR 240.19b-4(f)(5).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Exchange Act. Comments may be submitted
by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form http://
www.sec.gov/rules/sro.shtml); or
     Send an E-mail to<EMAIL_ADDRESS>Please include
File Number SR-ISE-2009-28 in the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2009-28. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commissions Internet Web site (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written

communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for inspection and copying in the Commission's Public
Reference Room. Copies of such filing also will be available for
inspection and copying at the principal office of the ISE. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-ISE-2009-28 and should be
submitted by June 17, 2009.
---------------------------------------------------------------------------

    \11\ 7 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-12216 Filed 5-26-09; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register: October 14, 2008 (Volume 73, Number 199)]
[Notices]
[Page 60733-60737]
[DOCID:fr14oc08-96]

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

SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 28435; 812-13063]

Calamos Convertible Opportunities and Income Fund, et al.; Notice
of Application

October 7, 2008.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from section 19(b) of
the Act and rule 19b-1 under the Act.

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

    Summary of Application: Applicants request an order to permit
certain closed-end investment companies to make periodic distributions
of long-term capital gains with respect to their outstanding common
stock as frequently as twelve times each year, and as frequently as
distributions are specified by or in accordance with the terms of any
outstanding preferred stock that such investment companies may issue.
    Applicants: Calamos Convertible Opportunities and Income Fund,
Calamos Convertible and High Income Fund, Calamos Strategic Total
Return

Fund, Calamos Global Total Return Fund, and Calamos Global Dynamic
Income Fund (collectively, the ``Funds'') and Calamos Advisors LLC (the
``Adviser'').
    Filing Dates: January 27, 2004, March 16, 2007 and July 24, 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 Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on November 3, 2008, 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
writer'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 Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-1090; Applicants, 2020 Calamos Court,
Naperville, IL 60563.

FOR FURTHER INFORMATION CONTACT: Wendy Friedlander, Senior Counsel, at
(202) 551-6837, or James M. Curtis, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Office of Chief Counsel).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
Commission's Public Reference Room, 100 F Street, NE., Washington, DC
20549-1520 (telephone<PHONE_NUMBER>).

Applicants' Representations

    1. The Funds are registered closed-end investment companies
organized as Delaware statutory trusts.\1\ The common stock issued by
each Fund is listed and traded on the New York Stock Exchange. The
Funds had issued auction rate preferred (``ARP'') stock, most of which
they have redeemed; applicants are exploring means to redeem the
remaining outstanding ARP stock. In the future, applicants may issue
other preferred stock. Applicants believe that the Funds' common
stockholders desire current income periodically and may favor a fixed
distribution policy.
---------------------------------------------------------------------------

    \1\ Applicants request that any order issued granting the relief
requested in the application also apply to any closed-end investment
company that in the future: (a) Is advised by the Adviser (including
any successor in interest) or by any entity controlling, controlled
by, or under common control (within the meaning of section 2(a)(9)
of the Act) with the Adviser; and (b) complies with the terms and
conditions of the requested order. A successor in interest is
limited to entities that result from a reorganization into another
jurisdiction or a change in the type of business organization.
---------------------------------------------------------------------------

    2. The Adviser is registered under the Investment Advisers Act of
1940 and is responsible for the overall management of each Fund.
    3. Applicants represent that Board of Trustees (the ``Board'') of
each of the Funds, including a majority of the members who were not
``interested persons'' of the Fund as defined in Section 2(a)(19) of
the Act (the ``Independent Trustees''), requested, and the Adviser
provided, such information as was reasonably necessary to an informed
determination of whether the Board should adopt a proposed distribution
plan. In particular, the Board and the Independent Trustees reviewed
information regarding the purpose and terms of a proposed distribution
policy, the likely effects of such policy on such Fund's long-term
total return (in relation to market price and net asset value (``NAV'')
per common share) and the relationship between such Fund's distribution
rate on its common stock under the policy and such Fund's total return
(in relation to net asset value per share); whether the rate of
distribution would exceed such Fund's expected total return in relation
to its NAV per share; and any foreseeable material effects of such
policy on such Fund's long-term total return (in relation to market
price and NAV per share). The Independent Trustees also considered what
conflicts of interest the Adviser and the affiliated persons of the
Adviser and each such Fund might have with respect to the adoption or
implementation of such policy. After considering such information the
Board, including the Independent Trustees, of each Fund approved a
distribution policy with respect to its common stock (the ``Plan'') and
determined that such Plan is consistent with such Fund's investment
objectives and in the best interests of such Fund's common
stockholders.
    4. Applicants state that the purpose of the Plan of each Fund is to
permit such Fund to distribute, over the course of each year, through
periodic distributions as nearly equal as practicable and any required
special distributions, an amount closely approximating the total
taxable income of such Fund during such year and, if so determined by
its Board, all or a portion of the returns of capital paid by portfolio
companies to such Fund during such year. Applicants represent that
under the Plan of each Fund, each such Fund would distribute to its
respective common stockholders a fixed monthly percentage of the market
price of such Fund's common stock at a particular point in time or a
fixed monthly percentage of NAV per share at a particular time or a
fixed monthly amount, any of which may be adjusted from time to time.
Applicants represent that under each Plan, the minimum annual
distribution rate with respect to such Fund's common stock would be
independent of the Fund's performance during any particular period but
would be expected to correlate with the Fund's performance over time.
Applicants explain that, except for extraordinary distributions and
potential increases or decreases in the final dividend periods in light
of the Fund's performance for the entire calendar year and to enable
the Fund to comply with the distribution requirements of Subchapter M
of the Internal Revenue of 1986 (the ``Code'') for the calendar year,
each distribution on the common stock would be at the stated rate then
in effect. Applicants expect that over time the NAV distribution rate
with respect to a Fund's common stock will approximately equal that
Fund's total return on NAV.
    5. Applicants state that prior to relying on the order requested in
this application and implementing the Plan, the Board of each Fund will
approve and adopt policies and procedures under Rule 38a-1 that are
reasonably designed to ensure that all notices required to be sent to
the Fund's shareholders pursuant to Section 19(a) of the Act, Rule 19a-
1 thereunder and condition II below, and all other written
communications by a Fund or its agents regarding distributions under
the Plan (``Notices'') comply with condition II below, and all other
written communications by a Fund or its agents regarding distributions
under the Plan include the disclosure required by condition III below.
Applicants state that the Board of each Fund also will adopt policies
and procedures that will require the Fund to keep records that
demonstrate the Fund's compliance with all of the conditions of the
requested order and that are necessary for such Fund to form the basis
for, and demonstrate the calculation of, the amounts disclosed in its
Notices.

Applicants' Legal Analysis

    1. Section 19(b) generally makes it unlawful for any registered
investment company (``fund'') to make long-term capital gains
distributions more than once each year. Rule 19b-1 limits the number of
capital gains dividends, as

defined in section 852(b)(3)(C) of the Code (``distributions''), that a
fund may make with respect to any one taxable year to one, plus a
supplemental ``clean up'' distribution made pursuant to section 855 of
the Code not exceeding 10% of the total amount distributed for the
year, plus one additional capital gain dividend made in whole or in
part to avoid the excise tax under section 4982 of the Code.
    2. Section 6(c) provides that the Commission may, by order upon
application, conditionally or unconditionally exempt any person,
security, or transaction, or any class or classes of persons,
securities or transactions, from any provision of the Act, if and to
the extent that the 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 Act.
    3. Applicants state that the one of the concerns underlying section
19(b) and rule 19b-1 is that stockholders might be unable to
differentiate between regular distributions of capital gains and
distributions of investment income. Applicants state, however, that
rule 19a-1 effectively addresses this concern by requiring that a
separate statement showing the sources of a distribution (e.g.,
estimated net income, net short-term capital gains, net long-term
capital gains and/or return of capital) accompany any distributions (or
the confirmation of the reinvestment of distributions) estimated to be
sourced in part from capital gains or capital. Applicants state that
the same information also is included in each Fund's annual reports to
stockholders and on its IRS Form 1099-DIV, which is sent to each common
and preferred stockholder who received distributions during the year.
    4. Applicants further state that each Fund will make the additional
disclosures required by the conditions set forth below, and each of
them will adopt compliance policies and procedures in accordance with
rule 38a-1 to ensure that all required Notices and disclosures are sent
to stockholders. Applicants argue that by providing the information
required by section 19(a) and rule 19a-1, and by complying with the
procedures adopted under each Plan and the conditions listed below, the
Funds would ensure that each Fund's stockholders are provided
sufficient information to understand that their periodic distributions
are not tied to the Fund's NAV (which for this purpose is the Fund's
taxable income other than from capital gains) and realized capital
gains to date, and may not represent yield or investment return.
Applicants also state that compliance with each Fund's compliance
procedures and condition III set forth below will ensure that
prospective stockholders and third parties are provided with the same
information. Accordingly, applicants assert that continuing to subject
the Funds to section 19(b) and rule 19b-1 would afford stockholders no
extra protection.
    5. Applicants note that section 19(b) and rule 19b-1 also were
intended to prevent certain improper sales practices, including, in
particular, the practice of urging an investor to purchase shares of a
fund on the basis of an upcoming capital gains dividend (``selling the
dividend''), where the dividend would result in an immediate
corresponding reduction in NAV and would be in effect a taxable return
of the investor's capital. Applicants assert that the ``selling the
dividend'' concern should not apply to closed-end investment companies,
such as the Funds, which do not continuously distribute shares.
According to Applicants, if the underlying concern extends to secondary
market purchases of stock of closed-end funds that are subject to a
large upcoming capital gains distribution, adoption of a Plan actually
helps minimize the concern by avoiding, through periodic distributions,
any buildup of large end-of-the-year distributions.
    6. Applicants also note that common stock of closed-end funds that
invest primarily in equity securities often trades in the marketplace
at a discount to its NAV. Applicants believe that this discount may be
reduced for closed-end funds that pay relatively frequent distributions
on their common stock at a consistent rate, whether or not those
distributions contain an element of long-term capital gain.
    7. Applicants assert that the application of rule 19b-1 to a Plan
actually could have an undesirable influence on portfolio management
decisions. Applicants state that, in the absence of an exemption from
rule 19b-1, the implementation of a Plan imposes pressure on management
(i) not to realize any net long-term capital gains until the point in
the year that the fund can pay all of its remaining distributions in
accordance with rule 19b-1, and (ii) not to realize any long-term
capital gains during any particular year in excess of the amount of the
aggregate pay-out for the year (since as a practical matter excess
gains must be distributed and accordingly would not be available to
satisfy pay-out requirements in following years), notwithstanding that
purely investment considerations might favor realization of long-term
gains at different times or in different amounts. Applicants thus
assert that the limitation on the number of capital gain distributions
that a fund may make with respect to any one year imposed by rule 19b-
1, may prevent the efficient operation of a Plan whenever that fund's
realized net long-term capital gains in any year exceed the total of
the periodic distributions that may include such capital gains under
the rule.
    8. In addition, Applicants assert that rule 19b-1 may cause fixed
regular periodic distributions under a Plan to be funded with returns
of capital \2\ (to the extent net investment income and realized short-
term capital gains are insufficient to fund the distribution), even
though realized net long-term capital gains otherwise could be
available. To distribute all of a fund's long-term capital gains within
the limits in rule 19b-1, a fund may be required to make total
distributions in excess of the annual amount called for by its Plan, or
to retain and pay taxes on the excess amount. Applicants thus assert
that the requested order would minimize these effects of rule 19b-1 by
enabling the Funds to realize long-term capital gains as often as
investment considerations dictate without fear of violating rule 19b-1.
---------------------------------------------------------------------------

    \2\ Returns of capital as used in the application means return
of capital for financial accounting purposes and not for tax
accounting purposes.
---------------------------------------------------------------------------

    9. Applicants state that Revenue Ruling 89-81 under the Code
requires that a fund that has both common stock and preferred stock
outstanding designate the types of income, e.g., investment income and
capital gains, in the same proportion as the total distributions
distributed to each class for the tax year. To satisfy the
proportionate designation requirements of Revenue Ruling 89-81,
whenever a fund has realized a long-term capital gain with respect to a
given tax year, the fund must designate the required proportionate
share of such capital gain to be included in common and preferred stock
dividends. Applicants state that although rule 19b-1 allows a fund some
flexibility with respect to the frequency of capital gains
distributions, a fund might use all of the exceptions available under
the rule for a tax year and still need to distribute additional capital
gains allocated to the preferred stock to comply with Revenue Ruling
89-81.
    10. Applicants assert that the potential abuses addressed by
section 19(b) and rule 19b-1 do not arise with respect to preferred
stock issued by a closed-end fund. Applicants assert that such
distributions are fixed or

determined in periodic auctions by reference to short-term interest
rates rather than by reference to performance of the issuer and Revenue
Ruling 89-81 determines the proportion of such distributions that are
comprised of long-term capital gains.
    11. Applicants also submit that the ``selling the dividend''
concern is not applicable to preferred stock, which entitles a holder
to no more than a periodic dividend at a fixed rate or the rate
determined by the market, and, like a debt security, is priced based
upon its liquidation value, credit quality, and frequency of payment.
Applicants state that investors buy preferred shares for the purpose of
receiving payments at the frequency bargained for, and do not expect
the liquidation value of their shares to change.
    12. Applicants request an order under section 6(c) granting an
exemption from the provisions of section 19(b) and rule 19b-1 to permit
each Fund's common stock to distribute periodic capital gains dividends
(as defined in section 852(b)(3)(C) of the Code) as often as monthly in
any one taxable year in respect of its common stock and as often as
specified by or determined in accordance with the terms thereof in
respect of its preferred shares.\3\
---------------------------------------------------------------------------

    \3\ Applicants state that a future fund that relies on the
requested order will satisfy each of the representations in the
application except that such representations will be made in respect
of actions by the Board of such future fund and will be made at a
future time.
---------------------------------------------------------------------------

Applicants' Conditions

    Applicants agree that, with respect to each Fund seeking to rely on
the order, the order will be subject to the following conditions:
I. Compliance Review and Reporting.
    The Fund's chief compliance officer will: (a) Report to the Fund's
Board, no less frequently than once every three months or at the next
regularly scheduled quarterly Board meeting, whether (i) the Fund and
the Adviser have complied with the conditions in the requested order,
and (ii) a Material Compliance Matter, as defined in rule 38a-1(e)(2),
has occurred with respect to compliance with such conditions; and (b)
review the adequacy of the policies and procedures adopted by the Fund
no less frequently than annually.
II. Disclosures to Fund Stockholders:
    A. Each Notice to the holders of the fund's common stock, in
addition to the information required by section 19(a) and rule 19a-1:
    1. Will provide, in a tabular or graphical format:
    (a) The amount of the distribution, on a per common share basis,
together with the amounts of such distribution amount, on a per common
share basis and as a percentage of such distribution amount, from
estimated: (A) Net investment income; (B) net realized short-term
capital gains; (C) net realized long-term capital gains; and (D) return
of capital or other capital source;
    (b) the fiscal year-to-date cumulative amount of distributions, on
a per common share basis, together with the amounts of such cumulative
amount, on a per common share basis and as a percentage of such
cumulative amount of distributions, from estimated: (A) Net investment
income; (B) net realized short-term capital gains; (C) net realized
long-term capital gains; and (D) return of capital or other capital
source;
    (c) the average annual total return in relation to the change in
NAV for the 5-year period (or, if the Fund's history of operations is
less than five years, the time period commencing immediately following
the Fund's first public offering) ending on the last day of the month
prior to the most recent distribution record date compared to the
current fiscal period's annualized distribution rate expressed as a
percentage of NAV as of the last day of the month prior to the most
recent distribution record date; and
    (d) the cumulative total return in relation to the change in NAV
from the last completed fiscal year to the last day of the month prior
to the most recent distribution record date compared to the fiscal
year-to-date cumulative distribution rate expressed as a percentage of
NAV as of the last day of the month prior to the most recent
distribution record date.
    Such disclosure shall be made in a type size at least as large and
as prominent as the estimate of the sources of the current
distribution; and
    2. will include the following disclosure:
    (a) ``You should not draw any conclusions about the Fund's
investment performance from the amount of this distribution or from the
terms of the Fund's Plan'';
    (b) ``The Fund estimates that it has distributed more than its
income and net realized capital gains; therefore, a portion of your
distribution may be a return of capital. A return of capital may occur
for example, when some or all of the money that you invested in the
Fund is paid back to you. A return of capital distribution does not
necessarily reflect the Fund's investment performance and should not be
confused with `yield' or `income' ''; and
    (c) ``The amounts and sources of distributions reported in this
Notice are only estimates and are not being provided for tax reporting
purposes. The actual amounts and sources of the amounts for [accounting
and] tax reporting purposes will depend upon the Fund's investment
experience during the remainder of its fiscal year and may be subject
to changes based on tax regulations. The Fund will send you a Form
1099-DIV for the calendar year that will tell you how to report these
distributions for federal income tax purposes.''
    Such disclosure shall be made in a type size at least as large as
and as prominent as any other information in the Notice and placed on
the same page in close proximity to the amount and the sources of the
distribution.
    B. On the inside front cover of each report to stockholders under
rule 30e-1 under the Act, the Fund will:
    1. Describe the terms of the Plan (including the fixed amount or
fixed percentage of the distributions and the frequency of the
distributions);
    2. include the disclosure required by condition II.A.2.a above;
    3. state, if applicable, that the Plan provides that the Board may
amend or terminate the Plan at any time without prior notice to Fund
stockholders; and
    4. describe any reasonably foreseeable circumstances that might
cause the Fund to terminate the Plan and any reasonably foreseeable
consequences of such termination.
    C. Each report provided to stockholders under rule 30e-1 and each
prospectus filed with the Commission on Form N-2 under the Act, will
provide the Fund's total return in relation to changes in NAV in the
financial highlights table and in any discussion about the Fund's total
return.
III. Disclosure to Stockholders, Prospective Stockholders and Third
Parties:
    A. The Fund will include the information contained in the relevant
Notice, including the disclosure required by condition II.A.2 above, in
any written communication (other than a Form 1099) about the Plan or
distributions under the Plan by the Fund, or agents that the Fund has
authorized to make such communication on the Fund's behalf, to any Fund
common stockholder, prospective common stockholder or third-party
information provider;
    B. The Fund will issue, contemporaneously with the issuance of any
Notice, a press release containing the information in the Notice and
will file with the Commission the

information contained in such Notice, including the disclosure required
by condition II.A.2 above, as an exhibit to its next filed Form N-CSR;
and
    C. The Fund will post prominently a statement on its (or its
adviser's) Web site containing the information in each Notice,
including the disclosure required by condition II.A.2 above, and will
maintain such information on such Web site for at least 24 months.
IV. Delivery of 19(a) Notices to Beneficial Owners:
    If a broker, dealer, bank or other person (``financial
intermediary'') holds common stock issued by the Fund in nominee name,
or otherwise, on behalf of a beneficial owner, the Fund: (a) Will
request that the financial intermediary, or its agent, forward the
Notice to all beneficial owners of the Fund's shares held through such
financial intermediary; (b) will provide, in a timely manner, to the
financial intermediary, or its agent, enough copies of the Notice
assembled in the form and at the place that the financial intermediary,
or its agent, reasonably requests to facilitate the financial
intermediary's sending of the Notice to each beneficial owner of the
Fund's stock; and (c) upon the request of any financial intermediary,
or its agent, that receives copies of the Notice, will pay the
financial intermediary, or its agent, the reasonable expenses of
sending the Notice to such beneficial owners.
V. Additional Board Determinations for Funds Whose Stock Trades at a
Premium:
    If:
    A. The Fund's common stock has traded on the exchange on which it
primarily trades at the time in question at an average premium to NAV
equal to or greater than 10%, as determined on the basis of the average
of the discount or premium to NAV of the Fund's common stock as of the
close of each trading day over a 12-week rolling period (each such 12-
week rolling period ending on the last trading day of each week); and
    B. The Fund's annualized distribution rate for such 12-week rolling
period, expressed as a percentage of NAV as of the ending date of such
12-week rolling period, is greater than the Fund's average annual total
return in relation to the change in NAV over the 2-year period ending
on the last day of such 12-week rolling period; then:
    1. At the earlier of the next regularly scheduled meeting or within
four months of the last day of such 12-week rolling period, the Board,
including a majority of the Independent Trustees:
    (a) Will request and evaluate, and the Adviser will furnish, such
information as may be reasonably necessary to make an informed
determination of whether the Plan should be continued or continued
after amendment;
    (b) will determine whether continuation, or continuation after
amendment, of the Plan is consistent with the Fund's investment
objective(s) and policies and in the best interests of the Fund and its
stockholders, after considering the information in condition V.B.1.a
above; including, without limitation:
    (1) Whether the Plan is accomplishing its purpose(s);
    (2) the reasonably foreseeable effects of the Plan on the Fund's
long-term total return in relation to the market price and NAV of the
Fund's common stock; and
    (3) the Fund's current distribution rate, as described in condition
V.B above, compared to with the Fund's average annual total return over
the 2-year period, as described in condition V.B, or such longer period
as the Board deems appropriate; and
    (c) based upon that determination, will approve or disapprove the
continuation, or continuation after amendment, of the Plan; and
    2. The Board will record the information considered by it and the
basis for its approval or disapproval of the continuation, or
continuation after amendment, of the Plan in its meeting minutes, which
must be made and preserved for a period of not less than six years from
the date of such meeting, the first two years in an easily accessible
place.
VI. Public Offerings:
    The Fund will not make a public offering of the Fund's common stock
other than:
    A. A rights offering below NAV to holders of the Fund's common
stock;
    B. an offering in connection with a dividend reinvestment plan,
merger, consolidation, acquisition, spin-off or reorganization of the
Fund; or
    C. an offering other than an offering described in conditions VI.A
and VI.B above, unless, with respect to such other offering:
    1. the Fund's average annual distribution rate for the six months
ending on the last day of the month ended immediately prior to the most
recent distribution record date,\4\ expressed as a percentage of NAV
per share as of such date, is no more than 1 percentage point greater
than the Fund's average annual total return for the 5-year period
ending on such date; \5\ and
---------------------------------------------------------------------------

    \4\ If the fund has been in operation fewer than two years, the
measured period will being immediately following the fund's first
public offering.
    \5\ If the Fund has been in operation fewer than five years, the
measured period will begin immediately following the Fund's first
public offering.
---------------------------------------------------------------------------

    2. the transmittal letter accompanying any registration statement
filed with the Commission in connection with such offering discloses
that the Fund has received an order under section 19(b) to permit it to
make periodic distributions of long-term capital gains with respect to
its common stock as frequently as twelve times each year, and as
frequently as distributions are specified in accordance with the terms
of any outstanding preferred stock that such Fund may issue.
VII. Amendments to Rule 19b-1:
    The requested relief will expire on the effective date of any
amendment to rule 19b-1 that provides relief permitting certain closed-
end investment companies to make periodic distributions of long-term
capital gains with respect to their outstanding common stock as
frequently as twelve times each year.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-24242 Filed 10-10-08; 8:45 am]

BILLING CODE 8011-01-P