Karpus Management Inc. d/b/a Karpus Investment Management

November 17, 2003

Jonathan G. Katz, Secretary
U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609

Re: File No. S7-19-03 Comments

Dear Mr. Katz,

We applaud the Securities and Exchange Commission in its efforts to allow security holders an easier access to the proxy process in the form of nominating candidates for Director. In light of recent corporate "scandals," directors must be held accountable for actions taken by corporations and mutual funds. Directors that are not fulfilling their role for betterment of holders should be replaced and independent directors should take their office.

The Commission has requested comments regarding the proposal for adapting revisions to the proxy rules requiring companies to place security holder nominees in the company's proxy materials. We are responding to this request as Karpus Management Inc. d/b/a Karpus Investment Management, a Registered Investment Advisor, specializing in the closed-end fund format.

We have been involved, in the past, in various shareholder activist activities. The reason for this has one common theme. Management and Directors have refused to listen to the wishes of the shareholders, instead they tightly hold on to the corporate agenda, which may not be for the benefit of security holders. Notions of independence for directors of open-end and closed-end funds, along with corporations still need further review. How can a Director serving on multiple boards of the same fund family and receiving a substantial portion of his/her taxable income yearly based on this activity be considered independent? We believe that a director who serves on more than four boards of the same mutual fund family and shows proof that his compensation as a board member from that fund family is less than 5% of his annual adjusted gross income can be considered independent.

Many problems in the Fund industry exist today because directors who are supposed to be watch dogs for fund shareholders would not bite the management's hand that feeds them. Directors that receive large amounts of their annual income from "being a professional director" are the lap dogs for management and can not be judged independent. Karpus Investment Management will withhold its vote for directors of this caliber.

How many times have directors of regulated investment companies been charged with "Breaching their Fiduciary Duties" under Section 36 of the Investment Company Act of 1940? Isn't a fiduciary a fiduciary? It is hard to believe that many lawsuits have not been filed against directors of fund families such as Putnam, Strong, Janus, Nations Bank, Prudential and others for breaching their fiduciary duties to the shareholders they are supposed to be serving.

Investors' confidence in directors and the proxy process must be restored. The SEC's notion of independence of the directors of regulated investment companies is too liberally interpreted. A stricter view of independence is necessary to reform the current state of corporate governance.

It is our belief that the proposed new revision to the proxy rules may improve additional candidate disclosure to security holders and enhance holder's ability to participate in a meaningful manner in the proxy process for the nomination and election of directors. The mere ability to participate in the nomination process in an easier fashion should send a loud and clear message to companies and their directors that security holders are no longer accepting management that is unresponsive to the wishes of the security holders.

However, the effect this procedure could have on company's corporate governance policies relating to the election of directors could be problematic. While we would like to believe in a perfect "director" world in which all companies and their directors should be receptive to the wishes of security holders and should share their common concerns, this is far from reality. Companies continue to adopt anti-shareholder policies and take refuge in states that favor corporations and not the rights of the security holders. The proposed Exchange Act Rule 14a-11 does not apply to companies that continue to take sanctuary in these states. Shareholder rights in states such as Maryland and Delaware are worse than the "human rights" provided to citizens in the Republic of China. It is our belief that the playing field should be leveled and rules and regulations adopted by the SEC should supercede state laws. It is only then that security holders can be assured their rights without exhaustive legal battles and the cost of such proceedings.

Cumulative voting polices based on ballots cast should exist in all cases. Cumulative voting policies could aid in ensuring a winning proposal for unhappy security holders. This is evidenced by the samples of security holder's proposals (as reported in Release No. 34-48626; IC-26206; File No. S-19-03) "submitted between 2000 and 2003 which indicated that between 28-31% of security holder proposals in the sample received 50% of the votes cast on those proposals". It is further stated "this percentage drops significantly if based on votes outstanding to 8-11% of companies in the sample". Direct access security holders proposals submitted by an eligible security holder must be based on receiving the majority of the votes cast at the meeting instead of the majority of the outstanding shares.

The proposed nomination triggers may or may not be considered adequate. If you take the basic premise that the nomination procedure is to provide security holder's access to a platform (the proxy ballot) which will allow them representation on a Board of Directors then a lower threshold for eligibility must be maintained. A 1% holder of the outstanding shares, or $2,000.00 market value with a one-year holding period should be required of a direct access holder proponent to trigger the nomination procedure. Higher percentages and longer holding periods may make the triggering process too difficult in some cases and may limit nomination, whereas the 1% threshold and one year holding period may be easy to achieve by individual holders along with institutional holders. The $ 2,000.00 market value further avoids discrimination against small security holders. It would also prevent increased standards of certification of ownership for institutional holders who have various custodial relationships through the CEDE verification process. The standard of holding the securities through the annual meeting date is important and should be enforced to prevent short swing profits arising through the nomination process.

One of the triggering events relates to the level of withheld votes. The proposed trigger of more than 35% withheld by security holders based on votes cast would trigger the nomination procedure. Implementation of security holder proposals under Exchange Act Rule 14a-8 as a nomination procedure triggering event would also be premised upon a company not implementing a security holder proposal that received support from the majority of cast. We believe that this triggering event is just and fair.

Should a security holder proposal submitted pursuant to Exchange Act Rule 14a-8, not a direct access proposal, submitted at an annual meeting by a qualified group receive more than 50% of the votes cast and the Board of Directors failed to implement the proposal by the 120th day prior to the next annual meeting, any such nomination procedure trigger should apply to all holder proposals. This would be regardless of whether the proposal requires board action (mandatory proposal) or requests board action (precatory proposal). It is our belief that the acceptance of such a proposal by the holders should not grant the Board discretion as to the manner in which the proposal is implemented. Should the Board not act on an accepted holder proposal, there should be no triggering procedure with regards to any proposals (beyond nomination procedure) for any proposal set forth for a vote of the holders. Boards of Directors that do not implement proposals accepted by the security holders should all be fired and completely new directors installed that are independent of management and will remain independent. This triggering event should allow for a complete new slate of directors to be presented on the company's proxy.

In regards to filing a Schedule 13G, and denying access to Schedule 13D filers, it may be erroneous in the fact that many institutional holders will file a Schedule 13D even if they own securities for investment purposes only, but, from time to time may have talks with management suggesting the direction of a company. Karpus Investment Management will regularly file a Form 13D on these grounds. The primary focus of either form being filed is that the purpose of the investment be disclosed. Should the purpose be for investment purposes only, it is our belief that either form filed should be satisfactory. It is understood that this proposal of nomination is not intended to be available for any security holder who is seeking control of a company, however, the act of filing either form should also provide adequate evidence of ownership along with the intent of that ownership.

Whereas comment is asked on prohibited relationships between the nominee and the nominating security holder or group, it is our opinion that the nominating process is already tainted within the company's nomination committee. Many Boards or Directors in our opinion are simply the "lap dogs" of management. The mere act of becoming a shareholder in a company should indicate that a nominee may work for the betterment of shareholders and not necessarily as a member of a private interest group. We have witnessed institutional holders become board members in cases where management has not been responsive to the wishes of shareholders and we have witnessed the benefits to shareholders. In the case of registered investment companies, we have seen directors fees lowered along with management fees. To deny the good work that a member of a "group" can do at the board level is a travesty for closed-end fund owners. A director that is nominated by a group in this case may work to close the discount at which a fund trades, benefiting all shareholders. To simply state, that to be eligible to nominate a candidate under the proposal, a nominating security holder or group may or may not have a specified relationship with the nominee is a requirement that may defeat the spirit of the proposal. As for those with "hidden agendas," the right of securing a place on a Board of Directors with the ultimate purpose of taking control of a fund should not be allowed. Ultimately, these relationships do not benefit the majority of the security holders. However, a good ethical director who will work for the benefit of all shareholders is a rare commodity that should not be suppressed. We would concur that full disclosure should be made in any and all proxy materials of the relationship a nominee may have with large institutional holders, along with his/her past corporate governance actions and the shareholders should then be able to intelligently judge if the candidate will work in their favor or the candidates favor.

The requirement that the registrant is not required to include in its proxy statement and form more than one security holder nominee if the members of the board is eight or fewer, two if the board is between 8 and 20 members, and three nominees for boards of twenty or more is a fair and just number. However, the added layer of the registrant being able to deny further nominated candidates based on current nominees on the board should be expanded to allow for more than one nominee at a time for boards of 8 or fewer, more than two if the board is between 8 and 20 members, and more than three for boards of 20 or more should be expanded. Should the registrant address the concerns of the security holders in a timely fashion, there should be no further need to nominate candidates. Should the board and management turn a deaf ear to holders concern, the ability to further nominate candidates should not be suppressed by this rule.

As to the inclusion of a nominee in the proxy statement where multiple nominees are presented by various interests, it is somewhat fair and just that the nominee should come from the holder or group which represents the largest beneficial ownership over the past two year period. Long term holders should be rewarded by this process in presenting their candidate.

We envision that the added costs to companies will be minimal in proportion to the possible benefits received by security holders. Nominee candidate proposals should be limited to a maximum of 500 words or less giving them the ability to fully state their cause, credentials, and past accomplishments should they have previously or currently serve on a board of directors.

It is our opinion that the proposed rule is a step in the right direction to enable security holders to voice their displeasure with companies that do not respond to the proxy process. However, careful implementation must be made so as not to further entrench directors who are not responsive to the proxy process or the wishes of the security holders.


George W. Karpus
President & CEO

Should you have any questions regarding our comments, please feel free to refer to Sharon Thornton, Sr. Analyst, or Cody B. Bartlett, Jr., Analyst, CFA or myself at (585) 586-4680.