Federal Register / Vol. 62, No. 225 / Friday, November 21, 1997 / Notices 62315

exchange contracts (e.g., forwards,

interest rate swaps, and options). Under

the Call Report instructions in effect

through December 31, 1996, the netting

of other assets and liabilities is not

permitted unless specifically required

by the instructions.

The OTS practice has been to follow

GAAP as it relates to offsetting in the

balance sheet.

C.5. 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 a substantive change in control.

Under push down accounting, when a

depository institution is acquired, 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 banking agencies require push

down accounting when there is at least

a 95 percent change in ownership. This

approach is generally consistent with

accounting interpretations issued by the

staff of the Securities and Exchange

Commission.

The OTS requires push down

accounting when there is at least a 90

percent change in ownership.

C.6. Negative Goodwill

Under Accounting Principles Board

Opinion No. 16, ‘‘Business

Combinations,’’ negative goodwill arises

when the fair value of the net assets

acquired in a purchase business

combination exceeds the cost of the

acquisition and a portion of this excess

remains after the values otherwise

assignable to the acquired noncurrent

assets have been reduced to a zero

value.

The banking agencies require negative

goodwill to be reported as a liability on

the balance sheet and do not permit it

to be netted against goodwill that is

included as an asset. This ensures that

all goodwill assets are deducted in

regulatory capital calculations

consistent with the internationally

agreed-upon Basle Accord.

The OTS permits negative goodwill to

offset goodwill assets on the balance

sheet.

C.7. In-Substance Defeasance of Debt

In-substance defeasance involves a

debtor irrevocably placing risk-free

monetary assets in a trust established

solely for satisfying the debt. According

to FASB Statement No. 76, the liability

is considered extinguished for financial

reporting purposes if the possibility that

the debtor would be required to make

further payments on the debt, beyond

the funds placed in the trust, is remote.

With defeasance, the debt is netted

against the assets placed in the trust, a

gain or loss results in the current period,

and both the assets placed in the trust

and the liability are removed from the

balance sheet.

For Call Report purposes through

December 31, 1996, the banking

agencies did not permit banks to report

the defeasance of their liabilities in

accordance with Statement No. 76.

Instead, banks were to continue

reporting any defeased debt as a liability

and the securities contributed to the

trust as assets. No netting was

permitted, nor was any recognition of

gains or losses on the transaction

allowed. The banking agencies did not

adopt Statement No. 76 because of

uncertainty regarding the irrevocability

of trusts established for defeasance

purposes. Furthermore, defeasance

would not relieve the bank of its

contractual obligation to pay depositors

or other creditors. In June 1996, the

FASB issued a new accounting standard

(FASB Statement No. 125) that

supersedes Statement No. 76 for

defeasance transactions occurring after

1996, thereby bringing GAAP in line

with the Call Report treatment for these

transactions.

The OTS practice has been to follow

GAAP for defeasance transactions.

Dated at Washington, D.C., this 17th day of

November, 1997.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Executive Secretary.

[FR Doc. 97–30560 Filed 11–20–97; 8:45 am]

BILLING CODE 6714–01–M

FEDERAL LABOR RELATIONS

AUTHORITY

Notice of Opportunity to Submit

Amicus Curiae Briefs in an Unfair

Labor Practice Proceeding Pending

Before the Federal Labor Relations

Authority; FLRA Case No. WA–CA–

40743

AGENCY: Federal Labor Relations

Authority.

ACTION: Notice of the opportunity to file

amicus curiae briefs in a case pending

before the Federal Labor Relations

Authority. In the subject case, the

Authority is determining whether

section 2(d) of Executive Order 12871

constitutes an agency election to bargain

on matters set forth in section 7106(b)(1)

of the Federal Service LaborManagement Relations Statute (5 U.S.C.

7106(b)(1)), and whether such an

election can be enforced in Authority

unfair labor practice and subsequent

court review proceedings.

SUMMARY: The Federal Labor Relations

Authority provides an opportunity for

all interested persons to file briefs as

amici curiae on a significant issue

arising in a case pending before the

Authority. The issue is common to a

number of other cases also pending

before the Authority. The Authority is

considering the cases pursuant to its

responsibilities under the Federal

Service Labor-Management Relations

Statute, 5 U.S.C. 7101–7135 (1994 &

Supp. II 1996) (Statute). The issue

concerns an agency’s obligation to

negotiate on subjects set forth in section

7106(b)(1) of the Statute in light of the

provisions of sections 2(d) and 3 of

Executive Order 12871. Section 2(d) of

Executive Order 12871 provides in

relevant part that agency heads subject

to Chapter 71 of title 5, United States

Code shall ‘‘negotiate over the subjects

set forth in 5 U.S.C. 7106(b)(1), and

instruct subordinate officials to do the

same[.]’’ Section 3 of Executive Order

12871 provides in relevant part that it

‘‘is not intended to, and does not, create

any right to administrative or judicial

review, or any other right, substantive or

procedural, enforceable by a party

against the United States, [or] its

agencies * * * .’’

DATES: Briefs submitted in response to

this notice will be considered if

received by mail or personal delivery in

the Authority’s Case Control Office by 5

p.m. on Thursday, December 18, 1997.

Placing submissions in the mail by this

deadline will not be sufficient.

Extensions of time to submit briefs will

not be granted.

ADDRESSES: Mail or deliver briefs to

Peter Constantine, Director, Case

Control Office, Federal Labor Relations

Authority, 607 14th Street, NW., Room

415, Washington, D.C. 20424–0001.

FOR FURTHER INFORMATION CONTACT:

Peter Constantine, Director, Case

Control Office, Federal Labor Relations

Authority, (202) 482–6540.

SUPPLEMENTARY INFORMATION: The case

presenting the issue on which amicus

briefs are being solicited is before the

Authority on exceptions to a

recommended decision and order of an

Administrative Law Judge (Judge)

resolving unfair labor practice

allegations. The following summary is

offered.
62316 Federal Register / Vol. 62, No. 225 / Friday, November 21, 1997 / Notices

In its partial decision in U.S.

Department of Commerce, Patent and

Trademark Office, Case No. WA–CA–

40743 (PTO), the Authority concluded,

in agreement with the Judge, that the

agency violated sections 7116(a)(1) and

(5) of the Statute by failing to bargain

with the union over the impact and

implementation of its decision to use

term appointments to fill certain

bargaining unit positions. The Authority

also determined that the agency’s

decision to use term appointments

concerns a matter encompassed by

section 7106(b)(1) of the Statute.

However, the Authority did not rule on

the General Counsel’s allegation that the

agency violated the Statute by failing to

bargain over the substance of its

decision to use the term appointments.

The Authority in PTO decided that

resolving this remaining allegation

requires examining provisions of the

Statute and Executive Order 12871, as

well as relevant precedent.

The Authority determined that the

record before it in PTO did not

adequately address issues critical to

completing the analysis required to

decide this remaining allegation. In

particular, the Authority stated that the

parties in PTO, as well as parties in

other pending cases in which the

General Counsel had similarly alleged

that agencies had violated the Statute by

refusing to bargain over matters

encompassed by section 7106(b)(1),

have not fully addressed longestablished precedent regarding

bargaining obligations under section

7106(b)(1).

Accordingly, with respect to the

remaining allegation concerning the

agency’s obligation under section

7106(b)(1) to bargain over its decision to

use term appointments, the Authority

described in Section IV.C. through E. of

its partial decision in PTO, applicable

precedent and questions that arise from

the parties’ arguments. The Authority

directed the parties in PTO and the

other listed cases to submit briefs on the

questions developed in its partial

decision. The questions are set forth

below.

Additionally, parties in the other

listed cases were directed to address

whether there are facts or issues in their

cases that are distinguishable from those

in PTO on the particular allegation that

the respondent was obligated to bargain

under section 7106(b)(1).

Finally, the Authority provided the

parties to the various cases the

opportunity to request oral argument

before the Authority. However, the

Authority determined that participation

in any oral argument would be confined

to the parties to the various pending

cases, in the absence of a demonstration

that the interests of a person desiring to

participate in the oral argument will not

adequately be represented by these

parties.

In addition to PTO, the other pending

cases are:

1. Department of the Air Force, 647th

Air Base Group, Hanscom Air Force

Base, Massachusetts (and National

Association of Government Employees,

SEIU, AFL–CIO, Local R1–8), Case No.

BN–CA–41011;

2. U.S. Department of Justice,

Immigration and Naturalization Service

(and American Federation of

Government Employees, National

Border Patrol Council, AFL–CIO), Case

No. WA–CA–50048;

3. Social Security Administration,

Santa Rosa District Office, Santa Rosa,

California (and American Federation of

Government Employees, Council 147,

AFL–CIO), Case No. SF–CA–50155; and

4. U.S. Department of Veterans Affairs

Medial Center, Lexington, Kentucky

(and National Association of

Government Employees), Case No. CH–

CA–50399.

Although the questions set forth

below were asked of the parties in PTO

and the other cases listed above, the

matters addressed in the questions

posed are likely to be of concern to the

Federal sector labor-management

relations community in general.

Therefore, the Authority finds it

appropriate to provide for the filing of

amicus curiae briefs responding to the

following questions, and addressing any

other matters deemed relevant to

resolving the questions raised in this

and the other cases listed above

concerning the respondent’s obligation

to bargain under section 7106(b)(1) of

the Statute. Responses should address,

at a minimum, the Statute, legislative

history, Executive Order 12871,

Authority and judicial precedent, as

discussed in the Authority’s partial

decision in PTO. If it is contended that

this precedent is distinguishable or was

wrongly decided, the responses should

provide the basis for this contention.

1. Under what circumstances, if any,

does an election to bargain under

section 7106(b)(1) of the Statute create

rights and obligations that are

enforceable through unfair labor

practice proceedings?

2. If there are circumstances when an

election to bargain is enforceable under

the Statute, are those circumstances

present in PTO, or in any of the other

cases listed above? For example, if an

‘‘irrevocable’’ election can be made, has

such an election been made by PTO?

3. Does section 2(d) of Executive

Order 12871 constitute an agency

election, within the meaning of section

7106(b)(1) of the Statute, to bargain on

proposals on matters set out in section

7106(b)(1)?

4. If an election to bargain creates

rights and obligations that are

enforceable under any circumstances,

what is the extent of the bargaining

required to satisfy the obligations? For

example, does the obligation to bargain

extend to impasse, or is it satisfied by

some other ‘‘amount’’ of bargaining?

5. In view of the fact that the

President’s issuance of Executive Order

12871 is the only basis asserted for

finding that an election to bargain has

been made that is binding on the

agency, is enforcing the election barred

by Section 3 of the Executive Order?

6. If the Authority were to find that

there are circumstances when an

election to bargain is enforceable under

the Statute, and that such circumstances

are present in PTO or in any of the other

cases listed above, should a violation be

found in PTO or in any of those other

cases? If so, what is the appropriate

remedy to enforce the election?

All briefs shall be captioned ‘‘U.S.

Department of Commerce, Patent and

Trademark Office, Case No. WA–CA–

40743, Amicus Brief’’ and shall contain

separate, numbered headings for each

issue discussed. Briefs must include a

signed and dated statement of service

that complies with the Authority’s

regulations (5 CFR 2429.27(a) and (c))

showing service of one copy of the brief

on all counsel of record or other

designated representatives in PTO and

the other cases listed above. Copies of

the Authority’s partial decision in PTO,

dated November 17, 1997, and a list of

the designated representatives for that

and the other cases may be obtained in

the Authority’s Case Control Office at

the address set forth above. Copies of

these materials will be forwarded (by

mail or by facsimile) to any person who

so requests by contacting Peter

Constantine at the same address. An

original and four (4) copies of each

amicus brief must be submitted, with

any enclosures, on 81⁄2×11 inch paper.

(Authority: 5 U.S.C. 7105(a)(2)(G) & (I))

Dated: November 17, 1997.

For the Authority.

Peter Constantine,

Director, Case Control Office, Federal Labor

Relations Authority.

[FR Doc. 97–30688 Filed 11–20–97; 8:45 am]

BILLING CODE 6727–01–P