[Federal Register Volume 71, Number 199 (Monday, October 16, 2006)]
[Notices]
[Pages 60795-60796]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-8711]


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DEPARTMENT OF THE TREASURY

Fiscal Service


Demand Deposit Securities of the State and Local Government 
Series (SLGS); Average Marginal Tax Rate and Treasury Administrative 
Cost

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

ACTION: Notice of estimated average marginal tax rate and Treasury 
administrative cost for Demand Deposit 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 
certificates of indebtedness--State and Local Government Series (SLGS) 
(31 CFR part 344, subpart C). In the final rule governing securities of 
the State and Local Government Series that appeared in the Federal 
Register of June 30, 2005, (70 FR 37904), provision was made to provide 
by notice the information necessary to apply the interest rate formula 
to the Demand Deposit certificates of indebtedness, 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 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-.24 or .76. The Treasury administrative cost is 
one basis point.

EFFECTIVE DATE: This notice is effective October 16, 2006.

FOR FURTHER INFORMATION CONTACT: Keith Rake, Deputy Assistant 
Commissioner, Office of the Assistant Commissioner for Public Debt 
Accounting, Bureau of the Public Debt, 200 3rd St., P.O. Box 396, 
Parkersburg, WV 26106-0396, (304) 480-5101 (not a toll-free number), or 
by e-mail at [email protected] or Edward Gronseth, Deputy Chief 
Counsel, Elizabeth Spears, Senior Attorney, or Brian Metz, Attorney-
Adviser, Office of the Chief Counsel, Bureau of the Public Debt, 
Department of the Treasury, P.O. Box

[[Page 60796]]

1328, Parkersburg, WV 26106-1328, (304) 480-8692 (not a toll-free 
number).

SUPPLEMENTARY INFORMATION: The Department of the Treasury, under the 
authority of 26 U.S.C. 141 note; 31 U.S.C. 3102-3104 and 3121, offers 
SLGS Demand Deposit certificates of indebtedness. These securities are 
one-day certificates of indebtedness, issued in a minimum amount of 
$1,000, or in any larger amount, with interest accrued and added to the 
principal daily. In publishing the final rule governing securities of 
the State and Local Government Series on June 30, 2005, provision was 
made to provide by notice the information necessary to apply the 
interest rate formula to the Demand Deposit certificates of 
indebtedness, 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 .76. The Treasury 
administrative cost is one basis point. 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 11, 2006.
Donald V. Hammond,
Fiscal Assistant Secretary.
[FR Doc. 06-8711 Filed 10-11-06; 3:15 pm]
BILLING CODE 4810-39-P