[Federal Register Volume 61, Number 209 (Monday, October 28, 1996)]
[Notices]
[Page 55708]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27364]


      

  Federal Register / Vol. 61, No. 209 / Monday, October 28, 1996 / 
Notices  

[[Page 55708]]



DEPARTMENT OF THE TREASURY

Fiscal Service
Bureau of the Public Debt


Demand Deposit Securities of the State and Local Government 
Series; Average Marginal Tax Rate and Treasury Administrative Costs

AGENCY: Bureau of the Public Debt, Fiscal Service, Treasury.

ACTION: Notice of estimated average marginal tax rate and Treasury 
administrative costs for Demand Deposit United States Treasury 
Certificates of Indebtedness--State and Local Government Series.

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SUMMARY: This notice is being published to provide the information 
necessary to apply the interest rate formula for Demand Deposit United 
States Treasury Certificates of Indebtedness--State and Local 
Government Series (31 CFR Part 344, Subpart C). The final regulations 
governing securities of the State and Local Government Series which 
appear in the current issue of the Federal Register, in setting out the 
formula, make provision for the simultaneous publication of this notice 
(31 CFR 344.5). The factor necessary to convert the interest rate to a 
tax-exempt equivalent (1--the estimated average marginal tax rate of 
purchasers of tax-exempt bonds) is 1-.29 or .71. The Treasury 
administrative cost is five basis points.

EFFECTIVE DATE: October 28, 1996.

FOR FURTHER INFORMATION CONTACT: Fred Pyatt, Director, or Howard 
Stevens, Supervisory Program Analyst, Division of Special Investments, 
Parkersburg, WV, at (304) 480-7752.

SUPPLEMENTARY INFORMATION: The Department of the Treasury, under the 
authority of Chapter 3102 of Title 31, United States Code, and pursuant 
to the Tax Reform Act of 1986, Pub.L. 99-514, 1301(b), offers a demand 
deposit United States Treasury Certificate of Indebtedness--State and 
Local Government Series. This security is a one-day certificate of 
indebtedness, issued in an amount of $1,000, or any higher dollar 
amount, with interest accrued and added to the principal daily. In the 
final regulations published simultaneously with this notice, provision 
is made to provide by notice the information necessary to apply the 
interest rate formula to the new demand deposit certificate, i.e., the 
average yield for three-month Treasury bills at the most recent 
auction, multiplied by one minus the estimated average marginal tax 
rate (1-MTR) of purchasers of tax-exempt bonds, less the Treasury 
administrative cost. The factor ``1-MTR'' is .71. The Treasury 
administrative cost is 5 basis points. Both the ``1-MTR'' and the 
Treasury administrative cost are subject to redetermination by the 
Department of the Treasury. Any future changes will be published by 
notice in the Federal Register.

    Dated: October 21, 1996.
Gerald Murphy,
Fiscal Assistant Secretary.
[FR Doc. 96-27364 Filed 10-21-96; 4:58 pm]
BILLING CODE 4810-39-W