[Federal Register Volume 80, Number 34 (Friday, February 20, 2015)]
[Rules and Regulations]
[Pages 9202-9204]
[FR Doc No: 2015-03450]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2014-0504; FRL-9921-44-Region 5]

Approval and Promulgation of Air Quality Implementation Plans;
Illinois; VOM Definition

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is approving a
request submitted by the Illinois Environmental Protection Agency
(Illinois EPA) on June 10, 2014, to revise the Illinois State
Implementation Plan (SIP). The submission amends the Illinois
Administrative Code (IAC) by updating the definition of ``volatile
organic material (VOM) or volatile organic compound (VOC)'' to add five
compounds to the list of exempted compounds. These revisions are based
on EPA rulemakings in 2013 which added these compounds to the list of
chemical compounds that are excluded from the Federal definition of VOC
because, in their intended uses, they make negligible contributions to
tropospheric ozone formation.

DATES: This direct final rule will be effective April 21, 2015, unless
EPA receives adverse comments by March 23, 2015. If adverse comments
are received, EPA will publish a timely withdrawal of the direct final
rule in the Federal Register informing the public that the rule will
not take effect.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2014-0504, by one of the following methods:
    1. www.regulations.gov: Follow the on-line instructions for
submitting comments.
    2. Email<EMAIL_ADDRESS>    3. Fax:<PHONE_NUMBER>
    4. Mail: Douglas Aburano, Chief, Attainment Planning and
Maintenance Section, Air Programs Branch (AR-18J), U.S. Environmental
Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604.
    5. Hand Delivery: Douglas Aburano, Chief, Attainment Planning and
Maintenance Section, Air Programs Branch (AR-18J), U.S. Environmental
Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604.
Such deliveries are only accepted during the Regional Office normal
hours of operation, and special arrangements should be made for
deliveries of boxed information. The Regional Office official hours of
business are Monday through Friday, 8:30 a.m. to 4:30 p.m., excluding
Federal holidays.
    Instructions: Direct your comments to Docket ID No. EPA-R05-OAR-
2014-0504. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov or email. The
www.regulations.gov Web site is an ``anonymous access'' system, which
means EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send an email comment
directly to EPA without going through www.regulations.gov your email
address will be automatically captured and included as part of the
comment that is placed in the public docket and made available on the
Internet. If you submit an electronic comment, EPA recommends that you
include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses.
    Docket: All documents in the docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in www.regulations.gov or in hard copy at the Environmental Protection
Agency, Region 5, Air and Radiation Division, 77 West Jackson
Boulevard, Chicago, Illinois 60604. This facility is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding Federal holidays.
We recommend that you telephone Douglas Aburano, Section Chief at (312)
353-6960 before visiting the Region 5 office.

FOR FURTHER INFORMATION CONTACT: Douglas Aburano, Section Chief,
Attainment Planning and Maintenance Section, Air Programs Branch (AR-
18J), Environmental Protection Agency, Region 5, 77 West Jackson
Boulevard, Chicago, Illinois 60604,<PHONE_NUMBER>,
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,''
``us,'' or ``our'' is used, we mean EPA. This supplementary information
section is arranged as follows:

I. What is the background for this action?
    A. When did the State submit the SIP revision to EPA?
    B. Did Illinois hold public hearings on this SIP revision?
II. What is EPA approving?
III. What is EPA's analysis of the SIP revision?
IV. What action is the EPA taking?
V. Statutory and Executive Order Reviews

I. What is the background for this action?

A. When did the State submit the SIP revision to EPA?

    The Illinois EPA submitted a revision to the Illinois SIP to EPA
for approval on June 10, 2014. The SIP revision updates the definition
of VOM or VOC at 35 IAC Part 211, Subpart B, Section 211.7150(a).

B. Did Illinois hold public hearings on this SIP revision?

    The Illinois Pollution Control Board held a public hearing on the
proposed SIP revision on October 31, 2013. The Board received no
comments.

II. What is EPA approving?

    EPA is approving an Illinois SIP revision that updates the
definition of VOM or VOC at 35 IAC Part 211, Subpart B, Section
211.7150(a) to add (difluoromethoxy) (difluoro)methane
(CHF2OCHF2 or HFE-134), bis(difluoromethoxy)
(difluoro)methane (CHF2OCF2OCHF2 or
HFE-236cal2), 1-(difluoromethoxy)-2-[(difluoromethoxy)
((difluoro)methoxy]-1,1,2,2-tetrafluoroethane
(CHF2OCF2OCF2CF2OCHF2
 or HFE-43-10pccc), 1,2-bis(difluoromethoxy)-1,1,2,2-tetrafluoroethane
(CHF2OCF2CF2OCHF2 or HFE-
338pcc13), and trans 1-chloro-3,3,3-trifluoroprop-1-ene
(CF3CHCHCl) to the list of excluded compounds at 35 IAC
211.7150(a). Illinois took this action based on EPA's 2013 rulemakings
in which EPA determined these compounds have a negligible contribution
to tropospheric ozone formation and thus should be excluded from the
definition of VOC codified at 40 CFR 51.100(s). (See 78 FR 9823

(February 12, 2013) and 78 FR 53029 (August 28, 2013)). This action
also approves minor administrative changes in alphabetization of
compound names and correction of compound condensed structural formulas
to 35 IAC 211.7150(a) that refer to compounds previously approved as
excluded from the definition of VOM in the Illinois SIP.

III. What is EPA's analysis of the SIP revision?

    In 2005, EPA received a petition asking EPA to exempt
HCF2OCF2H (HFE-134),
HCF2OCF2OCF2H (HFE-236cal2),
HCF2OCF2CF2OCF2H (HFE-
338pcc13),
HCF2OCF2OCF2CF2OCF2
H (H-Galden 1040x or H-Galden ZT 130 (or 150 or 180)) from the
definition of VOC.\1\ Based on the level of reactivity of these
chemical compounds, EPA concluded that these compounds make negligible
contributions to tropospheric ozone formation (78 FR 9823, February 12,
2013). Therefore on February 12, 2013, EPA amended 40 CFR 51.100(s)(1)
to exclude these compounds from the definition of VOC for purposes of
preparing SIPs to attain the national ambient air quality standard for
ozone under title I of the Clean Air Act (78 FR 9823). EPA's action
became effective March 14, 2013. Illinois EPA's SIP revision is
consistent with EPA's action amending the definition of VOC at 40 CFR
51.100(s).
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    \1\ Note that EPA uses compound condensed structural formulas
that differ from those used by Illinois EPA. Through comparison of
HFE numbers and chemical formulas as used by the American Chemical
Society, we have determined that EPA and Illinois EPA are referring
to the same compounds for the purposes of this rule.
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    In 2011, EPA received a petition asking EPA to exempt trans 1-
chloro-3,3,3-trifluoroprop-1-ene from the definition of VOC. Based on
the level of reactivity of this chemical compound, EPA concluded that
this compound makes a negligible contribution to tropospheric ozone
formation (78 FR 53029, August 28, 2013). Therefore on August 28, 2013,
EPA amended 40 CFR 51.100(s)(1) to exclude this compound from the
definition of VOC for purposes of preparing SIPs to attain the national
ambient air quality standard for ozone under title I of the Clean Air
Act (78 FR 53029). EPA's action became effective September 27, 2013.
Illinois EPA's SIP revision is consistent with EPA's action amending
the definition of VOC at 40 CFR 51.100(s).

IV. What action is EPA taking?

    EPA is approving a revision to the Illinois SIP which is consistent
with EPA's 2013 actions revising the definition of VOC. The Illinois
SIP revision adds (difluoromethoxy) (difluoro)methane
(CHF2OCHF2 or HFE-134), bis(difluoromethoxy)
(difluoro)methane (CHF2OCF2OCHF2 or
HFE-236cal2), 1-(difluoromethoxy)-2-[(difluoromethoxy)
((difluoro)methoxy]-1,1,2,2-tetrafluoroethane
(CHF2OCF2OCF2CF2OCHF2
 or HFE-43-10pccc), 1,2-bis(difluoromethoxy)-1,1,2,2-tetrafluoroethane
(CHF2OCF2CF2OCHF2 or HFE-
338pcc13), and trans 1-chloro-3,3,3-trifluoroprop-1-ene
(CF3CHCHCl) to the list of chemical compounds considered
exempt from the definition of VOM or VOC at 35 IAC 211.7150(a).
    We are publishing this action without prior proposal because we
view this as a noncontroversial amendment and anticipate no adverse
comments. However, in the proposed rules section of this Federal
Register publication, we are publishing a separate document that will
serve as the proposal to approve the state plan if relevant adverse
written comments are filed. This rule will be effective April 21, 2015
without further notice unless we receive relevant adverse written
comments by March 23, 2015. If we receive such comments, we will
withdraw this action before the effective date by publishing a
subsequent document that will withdraw the final action. All public
comments received will then be addressed in a subsequent final rule
based on the proposed action. EPA will not institute a second comment
period. Any parties interested in commenting on this action should do
so at this time. Please note that if EPA receives adverse comment on an
amendment, paragraph, or section of this rule and if that provision may
be severed from the remainder of the rule, EPA may adopt as final those
provisions of the rule that are not the subject of an adverse comment.
If we do not receive any comments, this action will be effective April
21, 2015.

V. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Clean Air Act
and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this action merely approves state law as meeting Federal
requirements and does not impose additional requirements beyond those
imposed by state law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    This rule is not approved to apply on any Indian reservation land
or in any other area where EPA or an Indian tribe has demonstrated that
a tribe has jurisdiction. In those areas of Indian country, the rule
does not have tribal implications as specified by Executive Order
13175, nor will it impose substantial direct costs on tribal
governments or preempt tribal law.
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this action and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in

the Federal Register. A major rule cannot take effect until 60 days
after it is published in the Federal Register. This action is not a
``major rule'' as defined by 5 U.S.C. 804(2).
    Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by April 21, 2015. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this action for the purposes of
judicial review nor does it extend the time within which a petition for
judicial review may be filed, and shall not postpone the effectiveness
of such rule or action. Parties with objections to this direct final
rule are encouraged to file a comment in response to the parallel
notice of proposed rulemaking for this action published in the proposed
rules section of today's Federal Register, rather than file an
immediate petition for judicial review of this direct final rule, so
that EPA can withdraw this direct final rule and address the comment in
the proposed rulemaking. This action may not be challenged later in
proceedings to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Ozone, Reporting and
recordkeeping requirements, Volatile organic compounds.

    Dated: December 30, 2014.
Susan Hedman,
Regional Administrator, Region 5.

    40 CFR part 52 is amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

    Authority:  42 U.S.C. 7401 et seq.

0
2. Section 52.720 is amended by adding paragraph (c)(202) to read as
follows:

Sec.  52.720  Identification of plan.

* * * * *
    (c) * * *
    (202) On June 10, 2014, Illinois submitted revised regulations that
are consistent with 40 CFR 51.100(s)(1). The compounds
(difluoromethoxy) (difluoro)methane (CHF2OCHF2 or
HFE-134), bis(difluoromethoxy) (difluoro)methane
(CHF2OCF2OCHF2 or HFE-236cal2), 1-
(difluoromethoxy)-2-[(difluoromethoxy) ((difluoro)methoxy]-1,1,2,2-
tetrafluoroethane
(CHF2OCF2OCF2CF2OCHF2
 or HFE-43-10pccc), 1,2-bis(difluoromethoxy)-1,1,2,2-tetrafluoroethane
(CHF2OCF2CF2OCHF2 or HFE-
338pcc13), and trans 1-chloro-3,3,3-trifluoroprop-1-ene
(CF3CHCHCl) were added to the list of negligibly reactive
compounds excluded from the definition of ``Volatile Organic Material
(VOM)'' or ``Volatile Organic Compound (VOC)'' at 35 IAC 211.7150(a).
    (i) Incorporation by reference.
    Illinois Administrative Code Title 35: Environmental Protection;
Subtitle B: Air Pollution; Chapter I: Pollution Control Board;
Subchapter c: Emission Standards and Limitations for Stationary
Sources; Part 211: Definitions and General Provisions; Subpart B:
Definitions; Section 211.7150: Volatile Organic Material (VOM) or
Volatile Organic Compound (VOC), effective November 27, 2013.
[FR Doc. 2015-03450 Filed 2-19-15; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 80, Number 70 (Monday, April 13, 2015)]
[Notices]
[Pages 19709-19713]
[FR Doc No: 2015-08338]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31548; File No. 812-14437]

Sprott Focus Trust, Inc. and Sprott Asset Management LP; Notice
of Application

April 7, 2015.

AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an 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.

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    Applicants: Sprott Focus Trust, Inc. (the ``Existing Fund'') and
Sprott Asset Management LP (``Sprott Asset'').
    Summary of Application: Applicants request an order to permit
certain registered closed-end investment companies to make periodic
distributions of long-term capital gains with respect to their
outstanding common stock as frequently as monthly in any one taxable
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.
    Filing Date: The application was filed on March 27, 2015.
    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 May 1, 2015 and should be accompanied by proof of service
on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Pursuant to rule 0-5 under the Act, hearing
requests should state the nature of the writer's interest, any facts
bearing upon the desirability of a hearing on the matter, 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, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549-1090; Applicants, Bibb L. Strench,
Esq., Seward & Kissel LLP, 901 K Street NW., Washington, DC 20001.

FOR FURTHER INFORMATION CONTACT: Mark N. Zaruba, Senior Counsel, at
(202) 551-6878, or Mary Kay Frech, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Chief Counsel's Office).

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

Applicants' Representations

    1. The Existing Fund is a Maryland corporation registered under the
Act as a closed-end management investment company.\1\ The Existing
Fund's investment goal is long-term capital growth, which it seeks to
achieve by investing in equity securities and non-convertible fixed
income securities. Shares of the common stock of the Existing Fund are
listed and traded on the NASDAQ Global Select Market. The Existing Fund
had issued preferred stock all of which was redeemed on November 15,
2012. Applicants believe that investors in closed-end funds may prefer
an investment vehicle that provides regular current income through
fixed distribution policies that would be available through a
Distribution Policy (as defined below).
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    \1\ The only existing registered closed-end investment company
that currently intends to rely on the order has been named as an
applicant. Applicants request that the order also apply to each
other registered closed-end investment company advised or to be
advised in the future by Sprott Asset or by an entity controlling,
controlled by, or under common control (within the meaning of
section 2(a)(9) of the Act) with Sprott Asset (including any
successor in interest) (each such entity, including Sprott Asset,
the ``Adviser'') that in the future seeks to rely on the order (such
investment companies, together with the Existing Fund, are
collectively, the ``Funds'' and individually, a ``Fund''). Any Fund
that may rely on the order in the future will comply with the terms
and conditions of the application. 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.
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    2. Sprott Asset, a limited partnership organized under the laws of
Canada, is registered under the Investment Advisers Act of 1940 (the
``Advisers Act'') as an investment adviser. Sprott Asset provides
investment advisory services to the Existing Fund. Each Adviser to a
Fund will be registered as an investment adviser under the Advisers
Act. Sprott Asset has engaged Sprott Asset Management USA Inc., which
is registered as an investment adviser under the Advisers Act, as sub-
adviser for the Existing Fund.
    3. Pursuant to a prior order,\2\ the Existing Fund has established
a periodic payout policy of paying quarterly distributions on its
common stock.\3\ To maintain certainty for the distribution policy of
the Existing Fund and the distribution policies that other Funds may
adopt in the future (each, a ``Distribution Policy''), applicants
request an order to permit each Fund to make periodic distributions
that include long-term capital gains as frequently as 12 times in any
one taxable year in respect of its common stock and as often as
specified by, or determined in accordance with the terms of, any
preferred stock issued.
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    \2\ Royce Focus Trust, Inc., et al., Investment Company Act
Release Nos. 30447 (April 4, 2013) (notice) and 30499 (April 30,
2013) (order). The Existing Fund is seeking the requested order
because it may no longer rely on this prior order as a result of the
change of its investment adviser from Royce & Associates, LLC to
Sprott Asset.
    \3\ The Existing Fund currently has no outstanding preferred
stock.
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    4. Applicants state that prior to a Fund's implementing a
Distribution Policy in reliance on the requested order, the board of
directors (the ``Board'') of such Fund, including a

majority of the directors who are not ``interested persons'' of the
Fund, as defined in section 2(a)(19) of the Act (the ``Independent
Directors''), will request, and the Adviser will provide, such
information as is reasonably necessary to make an informed
determination of whether the Board should adopt a proposed Distribution
Policy. In the case of the Existing Fund, the Board approved a
Distribution Policy substantially similar to the distribution policy
that had been in place prior to the date of the application. In
particular, the Board and the Independent Directors will review
information regarding the purpose and terms of the Distribution Policy;
the likely effects of the policy on the Fund's long-term total return
(in relation to market price and its net asset value per share of
common stock (``NAV'')); the expected relationship between the Fund's
distribution rate on its common stock under the policy and the Fund's
total return (in relation to NAV); whether the rate of distribution
would exceed such Fund's expected total return in relation to its NAV;
and any foreseeable material effects of the policy on the Fund's long-
term total return (in relation to market price and NAV). The
Independent Directors also will consider what conflicts of interest the
Adviser and the affiliated persons of the Adviser and the Fund might
have with respect to the adoption or implementation of the Distribution
Policy. Applicants state that, only after considering such information
will the Board, including the Independent Directors, of each Fund
approve a Distribution Policy and in connection with such approval will
determine that the Distribution Policy is consistent with a Fund's
investment objectives and in the best interests of the holders of the
Fund's common stock.
    5. Applicants state that the purpose of a Distribution Policy,
generally, would be to permit a Fund to distribute over the course of
each year, through periodic distributions in relatively equal amounts
(plus 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 returns of
capital paid by portfolio companies to such Fund during the year. Under
the Distribution Policy of a Fund, such Fund would distribute to its
respective common stockholders a fixed percentage of the market price
of such Fund's common stock at a particular point in time or a fixed
percentage of NAV at a particular time or a fixed amount per share of
common stock, any of which may be adjusted from time to time. It is
anticipated that under a Distribution Policy, 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.
Except for extraordinary distributions and potential increases or
decreases in the final dividend periods in light of a Fund's
performance for an entire calendar year and to enable the Fund to
comply with the distribution requirements of Subchapter M of the
Internal Revenue Code (``Code'') for the calendar year, each
distribution on the Fund's common stock would be at the stated rate
then in effect.
    6. Applicants state that prior to the implementation of a
Distribution Policy for any Fund in reliance on the order, the Board of
such Fund will have adopted policies and procedures under rule 38a-1
under the Act that: (i) Are reasonably designed to ensure that all
notices required to be sent to the Fund's stockholders pursuant to
section 19(a) of the Act, rule 19a-1 thereunder and condition 4 below
(each a ``19(a) Notice'') include the disclosure required by rule 19a-1
under the Act and by condition 2(a) below, and that all other written
communications by the Fund or its agents regarding distributions under
the Distribution Policy include the disclosure required by condition
3(a) below; and (ii) require the Fund to keep records that demonstrate
its compliance with all of the conditions of the order and that are
necessary for such Fund to form the basis for, or demonstrate the
calculation of, the amounts disclosed in its 19(a) Notices.

Applicants' Legal Analysis

    1. Section 19(b) of the Act generally makes it unlawful for any
registered investment company to make long-term capital gains
distributions more than once every twelve months. 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 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) of the Act provides, in relevant part, that the
Commission may exempt any person or transaction from any provision of
the Act 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
Act.
    3. Applicants state that the one of the concerns leading to the
enactment of section 19(b) and adoption of rule 19b-1 was that
stockholders might be unable to distinguish between frequent
distributions of capital gains and dividends from investment income.
Applicants state, however, that rule 19a-1 effectively addresses this
concern by requiring that distributions (or the confirmation of the
reinvestment thereof) estimated to be sourced in part from capital
gains or capital be accompanied by a separate statement showing the
sources of the distribution (e.g., estimated net income, net short-term
capital gains, net long-term capital gains and/or return of capital).
Applicants state that similar information is included in the Funds'
annual reports to stockholders and on the Internal Revenue Service Form
1099-DIV, which is sent to each common and preferred stockholder who
received distributions during a particular year.
    4. Applicants further state that each Fund will make the additional
disclosures required by the conditions set forth below, and each Fund
will adopt compliance policies and procedures in accordance with rule
38a-1 under the Act to ensure that all required 19(a) Notices and
disclosures are sent to stockholders. Applicants state that the
information required by section 19(a), rule 19a-1, the Distribution
Policy, the policies and procedures under rule 38a-1 noted above, and
the conditions listed below will help ensure that each Fund's
stockholders are provided sufficient information to understand that
their periodic distributions are not tied to a Fund's net investment
income (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. 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 fund share 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 submit 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 shares of closed-end funds that are subject to a
large upcoming capital gains dividend, adoption of a periodic
distribution 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 the common stock of closed-end funds
often trades in the marketplace at a discount to its NAV. Applicants
believe that this discount may be reduced if the Funds are permitted to
pay relatively frequent dividends on their common stock at a consistent
rate, whether or not those dividends contain an element of long-term
capital gains.
    7. Applicants assert that the application of rule 19b-1 to a
Distribution Policy actually could have an inappropriate influence on
portfolio management decisions. Applicants state that, in the absence
of an exemption from rule 19b-1, the adoption of a periodic
distribution 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 assert that by limiting the
number of long-term capital gain dividends that a Fund may make with
respect to any one year, rule 19b-1 may prevent the normal and
efficient operation of a periodic distribution 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. Applicants also assert that rule 19b-1 may force fixed regular
periodic distributions under a periodic distribution plan to be funded
with returns of capital \4\ (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 would 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 periodic distribution plan, or to retain and pay taxes on the
excess amount. Applicants assert that the requested order would
minimize these anomalous 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.
---------------------------------------------------------------------------

    \4\ 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 seeks to qualify as a regulated investment
company under the Code and 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 either fixed or determined in periodic auctions or
remarketings or are periodically reset 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 specified periodic dividend at a fixed rate or the
rate determined by the market, and, like a debt security, is priced
based upon its liquidation preference, dividend rate, credit quality,
and frequency of payment. Applicants state that investors buy preferred
stock for the purpose of receiving payments at the frequency bargained
for, and any application of rule 19b-1 to preferred stock would be
contrary to the expectation of investors.
    12. Applicants request an order under section 6(c) of the Act
granting an exemption from the provisions of section 19(b) of the Act
and rule 19b-1 thereunder to permit each Fund to distribute periodic
capital gain dividends (as defined in section 852(b)(3)(C) of the Code)
as frequently 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 of, any preferred stock issued by the Fund.

Applicants' Conditions

    Applicants agree that, with respect to each Fund seeking to rely on
the requested order, the order will be subject to the following
conditions:

1. 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
its Adviser have complied with the conditions of the order, and (ii) a
material compliance matter (as defined in rule 38a-1(e)(2) under the
Act) has occurred with respect to such conditions; and (b) review the
adequacy of the policies and procedures adopted by the Board no less
frequently than annually.

2. Disclosures to Fund Stockholders

    (a) Each 19(a) Notice disseminated to the holders of the Fund's
common stock, in addition to the information required by section19(a)
and rule 19a-1:
    (i) Will provide, in a tabular or graphical format:
    (1) The amount of the distribution, on a per share of common stock
basis, together with the amounts of such distribution amount, on a per
share of common stock 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;
    (2) the fiscal year-to-date cumulative amount of distributions, on
a per share of common stock basis, together with

the amounts of such cumulative amount, on a per share of common stock
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;
    (3) 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
ended immediately 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
    (4) 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
    (ii) Will include the following disclosure:
    (1) ``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 Distribution Policy'';
    (2) ``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''' \5\; and
---------------------------------------------------------------------------

    \5\ The disclosure in condition 2(a)(ii)(2) will be included
only if the current distribution or the fiscal year-to-date
cumulative distributions are estimated to include a return of
capital.
---------------------------------------------------------------------------

    (3) ``The amounts and sources of distributions reported in this
19(a) Notice are only estimates and are not being provided for tax
reporting purposes. The actual amounts and sources of the amounts for
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 19(a) 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:
    (i) describe the terms of the Distribution Policy (including the
fixed amount or fixed percentage of the distributions and the frequency
of the distributions);
    (ii) include the disclosure required by condition 2(a)(ii)(1)
above;
    (iii) state, if applicable, that the Distribution Policy provides
that the Board may amend or terminate the Distribution Policy at any
time without prior notice to Fund stockholders; and
    (iv) describe any reasonably foreseeable circumstances that might
cause the Fund to terminate the Distribution Policy and any reasonably
foreseeable consequences of such termination.
    (c) Each report provided to stockholders under rule 30e-1 under the
Act 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.

3. Disclosure to Stockholders, Prospective Stockholders and Third
Parties

    (a) The Fund will include the information contained in the relevant
19(a) Notice, including the disclosure required by condition 2(a)(ii)
above, in any written communication (other than a communication on Form
1099) about the Distribution Policy or distributions under the
Distribution Policy by the Fund, or agents that the Fund has authorized
to make such communication on the Fund's behalf, to any Fund
stockholder, prospective stockholder or third-party information
provider;
    (b) The Fund will issue, contemporaneously with the issuance of any
19(a) Notice, a press release containing the information in the 19(a)
Notice and will file with the Commission the information contained in
such 19(a) Notice, including the disclosure required by condition
2(a)(ii) above, as an exhibit to its next filed Form N-CSR; and
    (c) The Fund will post prominently a statement on its (or the
Adviser's) Web site containing the information in each 19(a) Notice,
including the disclosure required by condition 2(a)(ii) above, and will
maintain such information on such Web site for at least 24 months.

4. 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
19(a) Notice to all beneficial owners of the Fund's stock held through
such financial intermediary; (b) will provide, in a timely manner, to
the financial intermediary, or its agent, enough copies of the 19(a)
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 19(a) 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 19(a) Notice,
will pay the financial intermediary, or its agent, the reasonable
expenses of sending the 19(a) Notice to such beneficial owners.

5. Additional Board Determinations for Funds Whose Common Stock Trades
at a Premium

    If:
    (a) The Fund's common stock has traded on the stock exchange that
they primarily trade on 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 shares of
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:
    (i) 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 Directors:

    (1) Will request and evaluate, and the Fund's Adviser will furnish,
such information as may be reasonably necessary to make an informed
determination of whether the Distribution Policy should be continued or
continued after amendment;
    (2) will determine whether continuation, or continuation after
amendment, of the Distribution Policy is consistent with the Fund's
investment objective(s) and policies and is in the best interests of
the Fund and its stockholders, after considering the information in
condition 5(b)(i)(1) above; including, without limitation:
    (A) Whether the Distribution Policy is accomplishing its
purpose(s);
    (B) the reasonably foreseeable material effects of the Distribution
Policy on the Fund's long-term total return in relation to the market
price and NAV of the Fund's common stock; and
    (C) the Fund's current distribution rate, as described in condition
5(b) above, compared with the Fund's average annual taxable income or
total return over the 2-year period, as described in condition 5(b), or
such longer period as the Board deems appropriate; and
    (3) based upon that determination, will approve or disapprove the
continuation, or continuation after amendment, of the Distribution
Policy; and
    (ii) The Board will record the information considered by it,
including its consideration of the factors listed in condition
5(b)(i)(2) above, and the basis for its approval or disapproval of the
continuation, or continuation after amendment, of the Distribution
Policy 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.

6. 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 6(a)
and 6(b) above, provided that, with respect to such other offering:
    (i) The Fund's annualized distribution rate for the six months
ending on the last day of the month ended immediately prior to the most
recent distribution record date,\6\ expressed as a percentage of NAV 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; \7\ and
---------------------------------------------------------------------------

    \6\ If the Fund has been in operation fewer than six months, the
measured period will begin immediately following the Fund's first
public offering.
    \7\ If the Fund has been in operation fewer than five years, the
measured period will begin immediately following the Fund's first
public offering.
---------------------------------------------------------------------------

    (ii) 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 shares of common stock as frequently as twelve times each year, and
as frequently as distributions are specified by or determined in
accordance with the terms of any outstanding shares of preferred stock
as such Fund may issue.

7. Amendments to Rule 19b-1

    The requested order 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.
Brent J. Fields,
Secretary.
[FR Doc. 2015-08338 Filed 4-10-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 20 (Tuesday, January 30, 2018)]
[Notices]
[Pages 4394-4395]
[FR Doc No: 2018-01800]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Agency Information Collection Activities: Requests for Comments;
Clearance of Renewed Approval of Information Collection: Small Unmanned
Aircraft Registration System (sUAS)

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice and request for comments.

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

SUMMARY: In accordance with the Paperwork Reduction Act of 1995, FAA
invites public comments about our intention to request the Office of
Management and Budget (OMB) approval to renew an information
collection. The Federal Register Notice with a 60-day comment period
soliciting comments on the following collection of information was
published on November 3, 2017. Aircraft registration is necessary to
ensure personal accountability among all users of the national airspace
system. Aircraft registration also allows the FAA and law enforcement
agencies to address non-compliance by providing the means by which to
identify an aircraft's owner and operator. This collection also permits
individuals to amend their record in the registration database.

DATES: Written comments should be submitted by March 1, 2018.

ADDRESSES: Interested persons are invited to submit written comments on
the proposed information collection to the Office of Information and
Regulatory Affairs, Office of Management and Budget. Comments should be
addressed to the attention of the Desk Officer, Department of
Transportation/FAA, and sent via electronic mail to
[email protected], or faxed to<PHONE_NUMBER>, or mailed to
the Office of Information and Regulatory Affairs, Office of Management
and Budget, Docket Library, Room 10102, 725 17th Street NW, Washington,
DC 20503.

FOR FURTHER INFORMATION CONTACT: Claire Barrett by email at:
[email protected];<PHONE_NUMBER>; Barbara Hall by email at:
[email protected]; phone:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:
    Public Comments Invited: You are asked to comment on any aspect of
this information collection, including (a) Whether the proposed
collection of information is necessary for FAA's performance; (b) the
accuracy of the estimated burden; (c) ways for FAA to enhance the
quality, utility and clarity of the information collection; and (d)
ways that the burden could be minimized without reducing the quality of
the collected information. The agency will summarize and/or include
your comments in the request for OMB's clearance of this information
collection.
    OMB Control Number: 2120-0765.
    Title: Small Unmanned Aircraft Registration System (sUAS).
    Form Numbers: There are no FAA forms associated with this
collection.
    Type of Review: Renewal of an information collection.
    Background: The Secretary of the Department of Transportation (DOT)
and the Administrator of the Federal Aviation Administration (FAA)
affirmed that all unmanned aircraft are aircraft. As such, in
accordance with 49 U.S.C. 44101(a) and as further prescribed in 14 CFR
part 47, registration is required prior to operation. See 80 FR 63912,
63913 (October 22, 2015). Aircraft registration is necessary to ensure
personal accountability among all users of the national airspace
system. Aircraft registration also allows the FAA and law enforcement
agencies to address non-compliance by providing the means by which to
identify an aircraft's owner and operator.
    Registration is required for all aircraft, including small unmanned
aircraft weighing more than 0.55 pounds on takeoff, including
everything that is on board or otherwise attached to the aircraft and
operated outdoors in the national airspace system. See 49 U.S.C. 44101-
44103; 14 CFR 48. Upon registration, the Administrator must issue a
certificate of registration to the aircraft owner. See 49 U.S.C. 44103.
    Registration, however, does not provide the authority to operate.
Persons intending to operate a small unmanned aircraft exclusively as
model aircraft must operate in compliance with section 336 of Public
Law 112-95. Persons intending to operate their small unmanned aircraft
not exclusively in compliance with section 336 must operate in
accordance with part 107 or part 91, in accordance with a waiver issued
under part 107, in accordance with an exemption issued under 14 CFR
part 11 (including those persons operating under an exemption issued
pursuant to section 333 of Public Law 112-95), or in conjunction with
the issuance of a special airworthiness certificate.
    As a result of the May 19, 2017 ruling by the U.S. Court of Appeals
for the District of Columbia Circuit (Taylor v. Huerta), the Small UAS
Registration and Marking interim final rule was vacated to the extent
it applied to model aircraft until Congress restored registration for
model aircraft in the National Defense Authorization Act of 2018 (P.L.
115-91). Consequently, the FAA has discontinued its process for
registration deletion and refund for owners operating in compliance
with section 336. All owners of small unmanned aircraft weighing more
than .55 pounds must register prior to operating outdoors in the
national airspace system.
    Respondents: Approximately 1.9 million registrants annually.
    Frequency: Information is collected on occasion.
    Estimated Average Burden per Response: 4.25 minutes per response.
    Estimated Total Annual Burden: About 141,158 hours.

    Issued in Washington, DC on January 24, 2018.
Barbara Hall,
FAA Information Collection Clearance Officer, IT Enterprises Business
Services Division, ASP-110.
[FR Doc. 2018-01800 Filed 1-29-18; 8:45 am]
 BILLING CODE 4910-13-P