20180 Federal Register / Vol. 72, No. 77 / Monday, April 23, 2007 / Notices 

6 71 FR 55958 (September 25, 2006). 

Noncumulative Perpetual Preferred 

Stock 

Under the federal banking agencies’

capital standards, noncumulative 

perpetual preferred stock is a 

component of Tier 1 capital. The capital 

standards of the OCC, the FRB, and the 

FDIC require noncumulative perpetual 

preferred stock to give the issuer the 

option to waive the payment of 

dividends and to provide that waived 

dividends neither accumulate to future 

periods nor represent a contingent claim 

on the issuer. 

As a result of these requirements, if a 

bank supervised by the OCC, the FRB, 

or the FDIC issues perpetual preferred 

stock and is required to pay dividends 

in a form other than cash, e.g., stock, 

when cash dividends are not or cannot 

be paid, the bank does not have the 

option to waive or eliminate dividends, 

and the stock would not qualify as 

noncumulative. If an OTS-supervised 

savings association issues perpetual 

preferred stock that requires the 

payment of dividends in the form of 

stock when cash dividends are not paid, 

the stock may, subject to supervisory 

approval, qualify as noncumulative. 

Equity Securities of GovernmentSponsored Enterprises 

The FRB, the FDIC, and the OTS 

apply a 100 percent risk weight to 

equity securities of governmentsponsored enterprises (GSEs), other than 

the 20 percent risk weighting of Federal 

Home Loan Bank stock held by banking 

organizations as a condition of 

membership. The OCC applies a 20 

percent risk weight to all GSE equity 

securities. 

Limitation on Subordinated Debt and 

Limited-Life Preferred Stock 

The OCC, the FRB, and the FDIC limit 

the amount of subordinated debt and 

intermediate-term preferred stock that 

may be treated as part of Tier 2 capital 

to 50 percent of Tier 1 capital. The OTS 

does not prescribe such a restriction. 

The OTS does, however, limit the 

amount of Tier 2 capital to 100 percent 

of Tier 1 capital, as do the other 

agencies. 

In addition, for banking organizations 

supervised by the OCC, the FRB, and 

the FDIC, at the beginning of each of the 

last five years of the life of a 

subordinated debt or limited-life 

preferred stock instrument, the amount 

that is eligible for inclusion in Tier 2 

capital is reduced by 20 percent of the 

original amount of that instrument (net 

of redemptions). The OTS provides 

thrifts the option of using either the 

discounting approach used by the other 

federal banking agencies, or an 

approach which, during the last seven 

years of the instrument’s life, allows for 

the full inclusion of all such 

instruments, provided that the aggregate 

amount of such instruments maturing in 

any one year does not exceed 20 percent 

of the thrift’s total capital. 

Tangible Capital Requirement 

Savings associations supervised by 

the OTS, by statute, must satisfy a 1.5 

percent minimum tangible capital 

requirement. Other subsequent statutory 

and regulatory changes, however, 

imposed higher capital standards 

rendering it unlikely, if not impossible, 

for the 1.5 percent tangible capital 

requirement to function as a meaningful 

regulatory trigger. This statutory 

tangible capital requirement does not 

apply to institutions supervised by the 

OCC, the FRB, or the FDIC. 

Market Risk Rules 

In 1996, the OCC, the FRB, and the 

FDIC adopted rules requiring banks and 

bank holding companies with 

significant exposure to market risk to 

measure and maintain capital to support 

that risk. The OTS did not adopt a 

market risk rule because no OTSsupervised savings association engaged 

in the threshold level of trading activity 

addressed by the other agencies’ rules. 

As the nature of many savings 

associations’ activities has changed 

since 1996, market risk has become an 

increasingly more significant risk factor 

to consider in the capital management 

process. Accordingly, the OTS has 

joined the other agencies in proposing a 

revised market risk rule.6

Differences in Accounting Standards 

Among the Federal Banking Agencies 

Push-Down Accounting 

Push-down accounting is the 

establishment of a new accounting basis 

for a depository institution in its 

separate financial statements as a result 

of the institution becoming substantially 

wholly owned. Under push-down 

accounting, when a depository 

institution is acquired in a purchase, yet 

retains its separate corporate existence, 

the assets and liabilities of the acquired 

institution are restated to their fair 

values as of the acquisition date. These 

values, including any goodwill, are 

reflected in the separate financial 

statements of the acquired institution, as 

well as in any consolidated financial 

statements of the institution’s parent. 

The OCC, the FRB, and the FDIC 

require the use of push-down 

accounting for regulatory reporting 

purposes when an institution’s voting 

stock becomes at least 95 percent owned 

by an investor or a group of investors 

acting collaboratively. This approach is 

generally consistent with accounting 

interpretations issued by the staff of the 

Securities and Exchange Commission. 

The OTS requires the use of push-down 

accounting when an institution’s voting 

stock becomes at least 90 percent owned 

by an investor or investor group. 

Dated: April 9, 2007. 

John C. Dugan, 

Comptroller of the Currency. 

By order of the Board of Governors of the 

Federal Reserve System, April 9, 2007. 

Jennifer J. Johnson, 

Secretary of the Board. 

Dated at Washington, DC, this 11th day of 

April, 2007. 

Federal Deposit Insurance Corporation. 

Robert E. Feldman, 

Executive Secretary. 

Dated: April 16, 2007. 

By the Office of Thrift Supervision. 

John M. Reich, 

Director. 

[FR Doc. 07–1986 Filed 4–20–07; 8:45 am] 

BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P; 

6720–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

[Revenue Procedure 2004–29] 

Proposed Collection; Comment 

Request for Regulation Project 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice and request for 

comments. 

SUMMARY: The Department of the 

Treasury, as part of its continuing effort 

to reduce paperwork and respondent 

burden, invites the general public and 

other Federal agencies to take this 

opportunity to comment on proposed 

and/or continuing information 

collections, as required by the 

Paperwork Reduction Act of 1995, 

Public Law 104–13 (44 U.S.C. 

3506(c)(2)(A)). Currently, the IRS is 

soliciting comments concerning 

Revenue Procedure 2004–29, Statistical 

Sampling in § 274 Context. 

DATES: Written comments should be 

received on or before June 22, 2007 to 

be assured of consideration. 

ADDRESSES: Direct all written comments 

to Glenn Kirkland, Internal Revenue 

Service, room 6512, 1111 Constitution 

Avenue, NW., Washington, DC 20224. 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 72, No. 77 / Monday, April 23, 2007 / Notices 20181 

FOR FURTHER INFORMATION CONTACT: 

Requests for additional information or 

copies of the regulations should be 

directed to Larnice Mack at Internal 

Revenue Service, room 6512, 1111 

Constitution Avenue, NW., Washington, 

DC 20224, or at (202) 622–3179, or 

through the internet at 

(Larnice.Mack@irs.gov). 

SUPPLEMENTARY INFORMATION: 

Title: Statistical Sampling in § 274 

Contest. 

OMB Number: 1545–1847. 

Revenue Procedure 2004–29. 

Abstract: Revenue Procedure 2004–29 

prescribes the statistical sampling 

methodology by which taxpayers under 

examination, making claims for refunds 

or filing original returns may establish 

the amounts of substantiated meal and 

entertainment expenses that are 

excepted from the 50% deduction 

disallowance of section 274(n)(1) under 

section 274(n)(2)(A),(C),(D), or (E). 

Current Actions: There are no changes 

being made to the revenue procedure at 

this time. 

Type of Review: Extension of a 

currently approved collection. 

Affected Public: Business or other forprofit organizations. 

Estimated Number of Respondents: 

400. 

Estimated Average Time per 

Respondent: 8 hours. 

Estimated Total Annual Burden 

Hours: 3,200. 

The following paragraph applies to all 

the collections of information covered 

by this notice. 

The following paragraph applies to all 

of the collections of information covered 

by this notice: 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless the collection of information 

displays a valid OMB control number. 

Books or records relating to a collection 

of information must be retained as long 

as their contents may become material 

in the administration of any internal 

revenue law. Generally, tax returns and 

tax return information are confidential, 

as required by 26 U.S.C. 6103. 

Request for Comments: Comments 

submitted in response to this notice will 

be summarized and/or included in the 

request for OMB approval. All 

comments will become a matter of 

public record. 

Comments Are Invited On: (a) 

Whether the collection of information is 

necessary for the proper performance of 

the functions of the agency, including 

whether the information shall have 

practical utility; (b) the accuracy of the 

agency’s estimate of the burden of the 

collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information to be collected; (d) 

ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology; 

and (e) estimates of capital or start-up 

costs and costs of operation, 

maintenance, and purchase of services 

to provide information. 

Approved: April 12, 2007. 

Glenn Kirkland, 

IRS Reports Clearance Officer. 

[FR Doc. E7–7603 Filed 4–20–07; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

Proposed Collection; Comment 

Request for Revenue Procedure 98–32 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice and request for 

comments. 

SUMMARY: The Department of the 

Treasury, as part of its continuing effort 

to reduce paperwork and respondent 

burden, invites the general public and 

other Federal agencies to take this 

opportunity to comment on proposed 

and/or continuing information 

collections, as required by the 

Paperwork Reduction Act of 1995, 

Public Law 104–13 (44 U.S.C. 

3506(c)(2)(A)). Currently, the IRS is 

soliciting comments concerning 

Revenue Procedure 98–32, Electronic 

Federal Tax Payment System (EFTPS) 

Programs for Reporting Agents. 

DATES: Written comments should be 

received on or before June 22, 2007 to 

be assured of consideration. 

ADDRESSES: Direct all written comments 

to Glenn Kirkland, Internal Revenue 

Service, room 6516, 1111 Constitution 

Avenue, NW., Washington, DC 20224. 

FOR FURTHER INFORMATION CONTACT: 

Requests for additional information or 

copies of the regulations should be 

directed to Larnice Mack at Internal 

Revenue Service, room 6512, 1111 

Constitution Avenue, NW., Washington, 

DC 20224, or at (202)622–3179, or 

through the Internet at 

(Larnice.Mack@irs.gov). 

SUPPLEMENTARY INFORMATION: 

Title: Electronic Federal Tax Payment 

System (EFTPS) Programs for Reporting 

Agents. 

OMB Number: 1545–1601. 

Revenue Procedure Number: Revenue 

Procedure 98–32. 

Abstract: This revenue procedure 

provides information about the 

Electronic Federal Tax Payment System 

(EFTPS) programs for Batch Filers and 

Bulk Filers (Filers). EFTPS is an 

electronic remittance processing system 

for making federal tax deposits (FTDs) 

and federal tax payments (FTPs). The 

Batch Filer and Bulk Filer programs are 

used by Filers for electronically 

submitting enrollments, FTDs, and FTPs 

on behalf of multiple taxpayers. 

Current Actions: There are no changes 

being made to this revenue procedure at 

this time. 

Type of Review: Extension of a 

currently approved collection. 

Affected Public: Business or other forprofit organizations. 

Estimated Number of Respondents: 

1,500. 

Estimated Average Time per 

Respondent: 82 hrs, 23 min. 

Estimated Total Annual Burden 

Hours: 123,567. 

The following paragraph applies to all 

the collections of information covered 

by this notice: 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless the collection of information 

displays a valid OMB control number. 

Books or records relating to a collection 

of information must be retained as long 

as their contents may become material 

in the administration of any internal 

revenue law. Generally, tax returns and 

tax return information are confidential, 

as required by 26 U.S.C. 6103. 

Request for Comments: Comments 

submitted in response to this notice will 

be summarized and/or included in the 

request for OMB approval. All 

comments will become a matter of 

public record. 

Comments Are Invited On: (a) 

Whether the collection of information is 

necessary for the proper performance of 

the functions of the agency, including 

whether the information shall have 

practical utility; (b) the accuracy of the 

agency’s estimate of the burden of the 

collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information to be collected; (d) 

ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology; 

and (e) estimates of capital or start-up 

costs and costs of operation, 

maintenance, and purchase of services 

to provide information. 


jlentini on PROD1PC65 with NOTICES