[Federal Register Volume 61, Number 145 (Friday, July 26, 1996)]
[Rules and Regulations]
[Pages 39254-39259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19073]
[[Page 39253]]
_______________________________________________________________________
Part VI
Department of the Treasury
_______________________________________________________________________
Fiscal Service
_______________________________________________________________________
31 CFR Part 208
Management of Federal Agency Disbursements; Interim Rule
Federal Register / Vol. 61, No. 145 / Friday, July 26, 1996 / Rules
and Regulations
[[Page 39254]]
DEPARTMENT OF THE TREASURY
Fiscal Service
31 CFR Part 208
RIN 1510-AA56
Management of Federal Agency Disbursements
AGENCY: Financial Management Service, Fiscal Service, Treasury.
ACTION: Interim rule with request for comments.
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SUMMARY: Chapter 10 of the Omnibus Consolidated Rescission and
Appropriations Act of 1996, Pub. L. 104-134, is the Debt Collection
Improvement Act of 1996 (the ``Act''). Section 31001(x) of the Act
amends 31 U.S.C. 3332 to require Federal agencies to convert from
checks to electronic funds transfer in two phases. Phase one affects
newly-eligible recipients of Federal payments. During phase one, which
begins on July 26, 1996, all recipients of Federal payments (other than
payments under the Internal Revenue Code of 1986) who become eligible
to receive those payments on or after July 26, 1996, must receive them
electronically unless the recipient certifies that the recipient does
not have an account at a financial institution or authorized payment
agent.
Phase two covers the conversion from checks to electronic funds
transfer for all Federal payments, except payments under the Internal
Revenue Code. The Act provides that, subject to the Secretary of the
Treasury's authority to grant waivers, all Federal payments made after
January 1, 1999, must be made by electronic funds transfer.
The Financial Management Service (the ``Service'') is adopting an
interim rule to implement Section 3332(e), as amended. The Service
invites public comments on the interim rule and on issues related to
implementation of the requirements that take effect on January 1, 1999.
This interim rule is designated as 31 CFR Part 208. The Service
anticipates that Part 208 will contain all provisions relating to the
management of Federal agency disbursements. Currently, 31 CFR Part 206
contains several provisions governing the timely collection and
disbursement of funds by Federal agencies. When regulations are issued,
sometime in 1997, to implement phase two, the Service will move those
portions of Part 206 that deal with Federal agency disbursements into
the new Part 208. In addition, all provisions relating to collections
by Federal agencies will be revised and consolidated into Part 206.
DATES: This rule is effective upon publication. Comments will be
received until November 25, 1996.
ADDRESSES: All comments should be addressed to Cynthia L. Johnson, Cash
Management Policy and Planning Division, Financial Management Service,
U.S. Department of the Treasury, Room 420, 401 14th Street S.W.,
Washington, D.C. 20227.
A copy of the interim rule is being made available for downloading
from the Financial Management Service home page at the following
address: http://www.ustreas.gov/treasury/bureaus/finman/.
FOR FURTHER INFORMATION CONTACT: Aurora Kassalow, Financial Program
Specialist, at (202) 874-5742; Cynthia L. Johnson, Director, Cash
Management Policy and Planning Division, at (202) 874-6657; Anne
Wallace, Attorney-Advisor, at (202) 874-6681.
SUPPLEMENTARY INFORMATION:
(1) Background
Section 31001 (x) of the Act amends 31 U.S.C. 3332 to require
Federal agencies to convert from paper-based payment methods to
electronic funds transfer in two phases under regulations prescribed by
the Secretary of the Treasury (the ``Secretary'').
Enactment of the electronic funds transfer legislation is an
important step in achieving Treasury's goal of an All-Electronic
Treasury. Treasury began using electronic funds transfer more than 20
years ago and, over the years, has expanded its use of electronic
payment methods for several reasons. First, the administrative cost of
making payments by electronic funds transfer is far less than making
payments by checks. Second, an electronic funds transfer is much safer
than a check; an electronic payment is rarely lost, stolen or damaged
and cannot be forged. However, on those few occasions when an
electronic funds transfer is mis-routed, it can be traced and quickly
rerouted to the recipient, usually within 24 hours. Third, the use of
electronic funds transfer will enable the Federal Government to provide
better service to recipients who claim their checks have been lost,
stolen, damaged, or delayed during delivery by improving response time
in tracing payments.
Current Federal law requires some recipients of Federal payments to
receive those payments electronically. Specifically, 31 U.S.C. 3332 (a)
through (d) require that Federal wage, salary, and retirement payments
to individuals who began to receive such payments after January 1,
1995, be paid by electronic funds transfer. In addition, 31 U.S.C. 3335
requires executive agencies to provide for the timely disbursement of
funds in accordance with regulations prescribed by the Secretary.
As amended by the Act, section 3332 is broader than existing law in
several respects. First, the definition of Federal payments in the new
Sec. 3332 (j)(3) covers all payments other than payments under the
Internal Revenue Code. Second, the definition of Federal agency in the
new section 3332 (j)(2) includes all departments, agencies, and
instrumentalities of the United States Government, and corporations
owned or controlled by the Government of the United States.
As amended, section 3332 contains several provisions to facilitate
the transition from cash and checks to electronic funds transfer. In
phase one, the head of each agency is directed to waive the electronic
funds transfer requirement if the recipient certifies in writing that
the recipient does not have an account with a financial institution or
authorized payment agent. In phase two, which begins on January 1,
1999, the Secretary is authorized to waive the electronic funds
transfer requirement for individuals or classes of individuals for whom
compliance imposes a hardship; for certain categories of checks; and in
other circumstances deemed necessary.
The Service intends to move quickly to implement the amendments to
31 U.S.C. 3332. In addition to adopting this interim rule, the Service
plans to launch an extensive educational campaign to inform agencies,
individuals, businesses, and the financial services industry about the
provisions of the Act. The Service also will promote electronic funds
transfer through increased marketing of Direct Deposit and other
electronic payment options. Direct Deposit involves the transfer of
funds from an agency to a recipient's account at a financial
institution by means of the Automated Clearing House system. Direct
Deposit is a safe, convenient, and economical method of making
payments. A major challenge is reaching the millions of individuals,
and some small businesses, that do not have an account at a financial
institution. The Service looks forward to working with consumers and
small businesses, as well as Federal agencies and the financial
services industry, to meet this challenge.
The Service recently began working with the financial services
industry on a marketing initiative called Direct Deposit Too. Direct
Deposit Too involves the establishment of a simple, low-cost account at
a financial
[[Page 39255]]
institution, such as an account that is accessible only through a
plastic card used at automated teller machines and point-of-sale
terminals.
In addition, the Service will work with agencies to implement other
provisions of the Act. Specifically, section 31001 (y) of the Act
amends 31 U.S.C. 3325 by adding a new subsection (d) which requires the
head of each executive agency to include the Tax Identification Number
(TIN) of each person receiving a payment in the certified voucher
submitted to the disbursing official. This provision of the Act became
effective April 26, 1996, the date the Act was signed into law.
Treasury Financial Management Bulletin 95-10, which was issued on
August 18, 1995, currently directs Federal agencies to provide the TIN
when requesting the Service to make disbursement to vendors and Federal
employees. The Service will amend Bulletin 95-10 in the near future in
accordance with the provisions of section 3325 (d).
The Service is planning to meet with agencies to explain the
requirements of the Act and the interim rule and to identify issues
that need to be resolved. The Service also will form a task force of
Federal agencies to obtain information that will be used in formulating
a final rule and provide guidance to agencies on how to reach those
individuals and small businesses who face barriers in converting to
electronic funds transfer.
(2) Discussion
A. Section by Section Analysis of Interim Rule Implementing the July
26, 1996, Requirements
Section 208.1 Scope and Applicability
This section provides that Part 208 applies to all payments made by
agencies and requires such payments to be made by electronic funds
transfer, unless a waiver is granted. This section also provides that
Part 208 does not apply to payments under the Internal Revenue Code of
1986.
Section 208.2 Definitions
31 U.S.C. 3332(j)(2), as added by section 31001(x) of the Act,
defines Federal agency as ``(A) an agency (as defined in section 101 of
this Title); and (B) a Government corporation (as defined in section
103 of Title 5).'' Section 101 of Title 31 provides that ``agency''
means a department, agency, or instrumentality of the United States
Government. Section 103 of Title 5 defines Government corporation as a
corporation owned or controlled by the Government of the United States.
The definition of agency in Sec. 208.2(a) restates the statutory
definition without change.
Section 3332(j)(2), as added by the Act, does not distinguish
between agencies whose disbursements are made by the Department of the
Treasury and those agencies with delegated or statutory disbursing
authority, known as Non-Treasury Disbursing Offices (NTDOs). The
Service believes that both types of agencies are subject to section
3332(e), as amended, and to Part 208. Further, in the opinion of the
Service, the source of an entity's funds is not relevant in determining
coverage under the Act: entities whose funds are derived from
assessments or fees are covered by Part 208 to the same extent as
entities using appropriated funds.
Section 3332(j)(3) provides that ``Federal payments'' includes
``benefit payments,'' but does not define the latter term. The Service
has added a definition of benefit payment in Sec. 208.2(b). This
definition is substantially similar to the definition of benefit
payment in 31 CFR 210.2.
The definition of ``electronic funds transfer'' in Sec. 208.2(c) is
based on the definition of this term in Sec. 3332(j)(1), as added by
the Act. The Act's definition of electronic funds transfer is similar
to the definition of ``electronic fund transfer'' in the Electronic
Fund Transfer Act (the ``EFTA;'' 15 U.S.C. 1693). However, the Service
has added the phrase ``includes, but is not limited to'' in the
definition of electronic funds transfer in the interim rule to signal
its intention to interpret ``electronic funds transfer'' broadly so as
to accommodate the use by the Federal Government of a wide range of
payment methods--existing and emerging--that offer convenience, safety,
and efficiency over paper-based methods. For example, under this
definition a credit card transaction is an electronic payment.
The term ``Federal payment'' is defined in Sec. 208.2(d) of the
interim rule. The Service believes that all payments made by an entity
covered by section 3332(e), as amended, are subject to the requirement
to use electronic funds transfer. This requirement applies whether the
payment is recurring or non-recurring.
The specific payments enumerated in the definition of Federal
payment in section 3332(j)(3) are merely illustrative of the payments
covered by section 3332(e), as amended. The definition of Federal
payment in Sec. 208.2(d) restates the statutory definition and, in
order to clarify the broad scope of this term, provides examples of
payments typically made by agencies. The category of Federal salary,
wage, and retirement payments includes, but is not limited to, thrift
savings distributions, military wage and salary payments, Central
Intelligence Agency annuities, military annuities, and Coast Guard
retirement payments. The category of vendor payments includes any
payment for goods or services. The category of expense reimbursement
includes, but is not limited to, travel and expense disbursements and
cash advances. Benefit payments, as defined in Sec. 208.2(b), includes,
but is not limited to, payments for Social Security, Supplemental
Security Income, Black Lung, Railroad Retirement Board Retirement and
Annuity, Department of Veterans Affairs Compensation and Pension, and
Worker's Compensation. The category of miscellaneous payments includes,
but is not limited to, interagency payments, grants, loans, fees,
principal, interest, and discounts related to U.S. transferable and
non-transferable securities, refunds, and payments related to Federal
insurance or guarantee programs for loans. The term ``Federal payment''
does not include payments under the Internal Revenue Code of 1986.
The term ``financial institution'' is not defined in section
31001(x) of the Act. The Service has added a definition of financial
institution in Sec. 208.2(e). The definition in the interim rule, which
is identical to the definition of financial institution found in 31 CFR
Part 210, is intended to cover all depository institutions regardless
of the form of their organization or the nature of their charter.
The Service also has added a definition of the term ``payment'' in
Sec. 208.2(f) which is based on the definition of the same term found
in 31 CFR Part 210.
Section 208.3 Agency Responsibilities
Section 208.3(a) implements section 3332(e), as amended, which
supersedes 31 U.S.C. 3332 (a) through (d) (Federal wage, salary, and
retirement payments) and 38 U.S.C. 5120 (a) and (d) (Veterans
benefits); and thus requires all Federal payments to a recipient who
becomes eligible for that type of payment starting on July 26, 1996, to
be made by electronic funds transfer.
The Service is sensitive to the administrative burden that
compliance with the Act may impose on agencies. Therefore, in several
instances which are discussed below, the Service has interpreted the
Act's requirements in a manner designed to facilitate compliance.
Section 3332(e), as amended, provides that all Federal payments to
a recipient who becomes eligible for ``that type of
[[Page 39256]]
payment'' on or after July 26 must be made by electronic funds
transfer. Section 208.3(a) of the interim rule provides that payments
made to a recipient who becomes eligible for ``the payment'' on or
after July 26 must be made electronically. The Service made this change
to make clear that the payments that must be made electronically are
only those for which the recipient becomes eligible on or after the
trigger date of July 26, and not payments of the same type made by the
paying agency for which the recipient became eligible prior to July 26.
For example, if a recipient currently receives an interest payment, by
check, on a Government security purchased before July 26 and, after
July 26, the recipient purchases another Government security from the
same agency, the interim rule requires the agency to pay interest on
the security purchased after July 26 by electronic funds transfer. The
agency would not be required to convert from check to electronic funds
transfer the interest payment on the security purchased prior to July
26.
Since the phrase ``becomes eligible for'' is not defined in section
3332(j), and this phrase may have different meanings in the context of
different types of payments, the Service has divided Federal payments
into six categories and defined eligibility in the context of each
class of payment. The interim rule is designed to minimize the burden
of compliance by defining the triggering date for determining
eligibility for receiving an electronic payment, as the time at which
the agency and the recipient have direct contact, either to obtain the
routing transit number, account number, and any other information the
agency needs to make payments electronically or, alternatively, to give
the recipient the opportunity to certify that the recipient does not
have an account and thus qualifies for a waiver.
Under Sec. 208.3(a)(1), all individuals who apply for benefit
payments starting on July 26, 1996, are subject to the mandatory
electronic funds transfer requirement. The Service chose the date of
application rather than, for example, the date on which an individual
attains a specified age, because the application process affords the
agency an opportunity to have contact with the recipient. The agency
can obtain account information during the application process and those
recipients who do not have accounts can certify to that fact.
Section 208.3(a)(2) addresses eligibility in the context of Federal
wage and salary payments. The interim rule provides that a recipient
who has a date of entry on duty with an agency on or after July 26,
1996, must receive wage and salary payments by electronic funds
transfer, unless the recipient certifies that he or she does not have
an account at a financial institution. Thus, an individual who begins
working for an agency, transfers from one agency to another, or resumes
Federal service after a break in employment on or after July 26, must
receive such payments by electronic funds transfer, unless the
recipient certifies that he or she does not have an account with a
financial institution or authorized payment agent.
Currently, 31 U.S.C. 3332 (a) through (d) provide that Federal
wage, salary, and retirement payments paid to individuals who began to
receive such payments after January 1, 1995, must be paid by electronic
funds transfer unless the recipient made a written request for another
form of payment. In addition, section 3332(c)(1) authorized the
Secretary to grant waivers for a group of recipients upon a request by
the head of an agency. These provisions remain effective until July 26,
1996, when they are superseded by section 3332(e), as amended, and the
interim rule. Consequently, Federal employees and retirees who become
eligible to receive payments on or after July 26, 1996, must certify
that they do not have an account at a financial institution or
authorized payment agent in order to qualify for a waiver.
Section 208.3(a)(3) of the interim rule provides that, in the case
of Federal retirement payments, ``becomes eligible for'' means a
recipient applies for retirement from an agency on or after July 26,
1996. There may be special circumstances in which a recipient applies
for retirement from an agency on or after July 26, while at the same
time the recipient is already receiving retirement payments from a
previous agency. In this circumstance, the recipient would be required
to receive retirement payments from the second agency electronically.
Section 208.3(a)(4) addresses vendor payments. Under the interim
rule, payments made under a contract or purchase order resulting from a
solicitation issued on or after July 26, 1996, must be made
electronically. This requirement applies to all contracts and purchase
orders for goods and service whether or not they are covered by the
Federal Acquisition Regulation. The interim rule does not require an
agency to convert payments for contracts or purchase orders executed
prior to July 26 to electronic funds transfer.
Section 208.3(a)(5) of the interim rule provides that, in the case
of grants, eligibility is determined by reference to the date on which
a grant application is filed or renewed.
Section 208.3(a)(6) is a catch-all provision that applies to all
other Federal payments, such as expense reimbursements and interest,
not addressed in subsections (1) through (5). The Service expects
agencies to fashion eligibility rules that are consistent with the
spirit of the Act.
Section 208.3(b) provides that, for a recipient who becomes
eligible to receive a Federal payment on or after July 26, the head of
each agency must waive the requirement to be paid by electronic funds
transfer if the recipient certifies in writing that the recipient does
not have an account with a financial institution or authorized payment
agent. The Appendix contains a model that may be used to make such a
certification. The use of this model is optional; an agency may
customize the model as needed.
The Service recognizes, however, that agencies may encounter
obstacles in converting to electronic funds transfer. Section 208.3(c)
provides that, if the head of an agency determines that the agency
cannot make a Federal payment or class of Federal payment in accordance
with Sec. 208.3(a) due to the inability of the agency's system to make
the payment(s) by electronic funds transfer, then the agency shall
notify the Service immediately in writing and shall submit an
implementation plan to the Service no later than January 1, 1997. The
plan shall:
(1) Identify the specific type of payment(s) that cannot be made by
electronic funds transfer;
(2) Describe the system problem that prevents the agency from
making the payment(s) by electronic funds transfer; and
(3) Outline a proposed solution and provide a time table for
solving the problem.
Nothing in Part 208 should be construed to prevent an agency from
continuing to make payments while the agency's plan is being developed,
reviewed, and implemented. The Service will work with agencies to
develop and implement the plan and provide any assistance the agency
may need.
Section 208.4 Recipient Responsibilities
Section 208.4 implements sections 3332(e) (2) and (g) as amended by
the Act and provides that (1) a recipient of a Federal payment must
designate a financial institution or authorized payment agent through
which a Federal payment may be made or certify in
[[Page 39257]]
writing that the recipient does not have an account with a financial
institution or authorized payment agent; and (2) provide the agency
with the information requested by the agency in order to effect the
payment.
B. Regulations to Implement the January 1, 1999, Requirements
During the next two years, Treasury will work with agencies, the
financial services industry, and representatives of individuals and the
vendor community, to meet the challenge of delivering all Federal
payments by electronic funds transfer. Efforts will include intensive
marketing of Treasury's existing Direct Deposit program for individuals
and businesses; new products such as Direct Deposit Too; and services
such as Electronic Benefit Transfer (EBT). The Service will continue to
develop, test, and implement innovative forms of electronic payment
mechanisms. The Service also plans to hold forums at which the public,
the financial service industry, Federal agencies, and other interested
parties will be invited to share their views regarding implementation
of the requirements that take effect on January 1, 1999.
In order to assess the current capabilities of agencies and to
assess their future needs, the Service requests agencies to submit an
implementation plan that addresses the points listed below. Agencies
subject to the Chief Financial Officers Act of 1990 (31 U.S.C. 901)
must submit the plan by January 1, 1997. All other agencies must submit
the plan by July 1, 1997. The plan must:
(1) List the types of Federal payments the agency currently makes
by check, especially those payments that the agency believes would be
difficult to convert to electronic funds transfer;
(2) Describe the obstacles the agency has encountered, or expects
to encounter, in converting payments made by check to electronic funds
transfer. The Service invites comment on the cost-effectiveness of
converting small dollar cash and check payments and non-recurring
payments to electronic funds transfer;
(3) Provide suggestions for removing the obstacles for each type of
payment and the electronic payment methods that could be used;
(4) Provide a timetable for the orderly and systematic conversion
of check payments to electronic funds transfer; and
(5) Identify the assistance each agency anticipates it will need in
order to convert payments currently made by check to electronic funds
transfer.
The Service will use this information to assess the requirements
for converting from cash and checks to electronic funds transfer
payments for each payment type and determine what assistance agencies
need in order to meet the January 1999 implementation date.
As noted above, where the head of the agency determines that the
agency cannot make a Federal payment or class of Federal payment in
accordance with Sec. 208.3(a) due to the inability of the agency's
system to make the payment(s) by electronic funds transfer, then the
agency must notify the Service immediately in writing and must submit a
plan in accordance with Sec. 208.3(c).
The Service would like to work with the financial services industry
to expand and enhance existing electronic payment methods and, where
necessary, develop new ones so as to facilitate the transition from
checks to electronic funds transfer. The industry is invited to:
(1) Discuss the capability to process electronic payments and to
provide the payment information customers need, especially for vendor
payments; and
(2) Provide suggestions regarding improvements to the electronic
payment methods currently available and ideas for new electronic
payment methods to meet the needs of recipients who receive checks.
Members of the public are specifically invited to comment on the
following:
(1) Obstacles to receiving payments electronically, such as
geographical barriers and physical, mental, educational, or language
barriers;
(2) The availability of banking services, especially for the
segment of the public that is currently unbanked;
(3) Suggestions for improving the electronic payment methods
currently available and ideas for new types of electronic payment
methods;
(4) Suggestions for implementing the provisions relating to the use
of an authorized payment agent for receipt of a Federal payment by
means of electronic funds transfer, including qualifications for
serving as an authorized payment agent and any limitations on the terms
of the contractual relationship between the recipient and the
authorized payment agent; and
(5) The needs of unbanked recipients when selecting an electronic
payment method or a financial institution.
Section 3332(i)(2), as added by section 31001 (x) of the Act,
provides that regulations issued by the Secretary shall ensure that
individuals who are required to have an account at a financial
institution because of the application of section 3332(f)(1) will have
access to such an account at a reasonable cost. Further, the Secretary
is directed to ensure that such individuals are given the same consumer
protections with respect to the account as other account holders at the
same financial institution. All interested parties are invited to
comment on these provisions.
Section 3332(f)(2) authorizes the Secretary to waive the electronic
funds transfer requirement for individuals or classes of individuals
for whom compliance poses a hardship, for classifications or types of
checks or in other circumstances as may be necessary. The Service
invites comment regarding these requirements.
In response to a Congressional request, the Service will study: (1)
the socioeconomic and demographic characteristics of those recipients
who currently receive checks to determine how best to increase
electronic payment usage; and (2) the adequacy of consumer protections
available to those individuals who will be required to obtain an
account with a financial institution.
Special Analyses
The Service is promulgating the interim rule without opportunity
for prior public comment pursuant to the Administrative Procedure Act
(the ``APA''), 5 U.S.C. 553, because the Service has determined, for
the following reasons, that a comment period would be impracticable and
contrary to the public interest. As noted above, until passage of the
Act, only recipients of Federal wage, salary, and retirement payments
were required to receive those payments by electronic funds transfer.
However, 31 U.S.C. 3332 (e), as amended, requires recipients who become
eligible for Federal payments on or after July 26, 1996, to receive
such payments electronically. Therefore, recipients such as vendors
doing business with agencies and benefit recipients may not be aware of
the impact of the law. In addition, the law requiring agencies to
disburse Federal funds expeditiously, 31 U.S.C. 3335, applies only to
agencies in the executive branch, whereas the amended section 3332 (e)
applies to departments, agencies, and instrumentalities of the United
States Government and to corporations owned or controlled by the
Government of the United States.
In addition, since the Act was passed, the Service has received
numerous requests for guidance from affected agencies. Many of the
questions relate to the meaning of the phrase ``becomes eligible for,''
which determines the applicability of section 3332. As noted above,
this phrase has different
[[Page 39258]]
meanings in the context of different types of payments. The Service
believes that, absent an implementing regulation, there will be
substantial confusion and noncompliance. Since the interim rule
provides critical guidance which will facilitate compliance, the
Service believes that it is in the public interest to issue the interim
rule without opportunity for prior public comment.
The public is invited to submit comments on the interim rule. As
noted above, within the next twelve months, the Service expects to
publish a Notice of Proposed Rulemaking to implement the provisions of
section 3332 that take effect in January 1999. Therefore, there will be
an opportunity to take into account any comments received on the
interim rule.
The Service has determined that good cause exists to make the
interim rule effective upon publication without providing the 30 day
period between publication and the effective date contemplated by the
APA, 5 U.S.C. 553 (d). The purpose of a delayed effective date is to
afford persons affected by a rule a reasonable time to prepare for
compliance. However, in this case, both agencies and recipients of
Federal payments must comply with the Act when it takes effect on July
26, 1996, and, as noted above, there may be considerable confusion
concerning its application. Inasmuch as the interim rule provides
important clarification that is expected to facilitate compliance with
the new law, the Service believes that good cause exists to make the
rule effective upon publication.
Since the interim rule is being issued without prior notice and
public procedure pursuant to the APA, the collection of information
contained in the interim rule has been reviewed under the requirements
of the Paperwork Reduction Act (44 U.S.C. 3507 (j)) and, pending
receipt and evaluation of public comments, approved by the Office of
Management and Budget (OMB) under control number 1510-0066. An agency
may not conduct or sponsor, and a person is not required to respond to,
a collection of information unless it displays a valid control number
assigned by the Office of Management and Budget.
Comments concerning the collection of information should be
directed to the Office of Management and Budget, Attention: Desk
Officer for the Department of the Treasury, Financial Management
Service, Office of Information and Regulatory Affairs, Washington, D.C.
20503, with copies to Jacqueline Perry, Public Reports Clearance
Officer, Financial Management Service, 3361 75th Avenue, Landover,
Maryland 20785. Any such comments should be submitted not later than
September 24, 1996. Comments are specifically requested concerning:
Whether the proposed collection of information is necessary for the
proper performance of the functions of the Service, including whether
the information will have practical utility;
The accuracy of the estimated burden associated with the proposed
collection of information (see below);
How the quality, utility, and clarity of the information to be
collected may be enhanced; and
How the burden of complying with the proposed collection of
information may be minimized, including through the application of
automated collection techniques and other forms of information
technology.
The collection of information in this regulation is in Sec. 208.4.
The information (name of financial institution, account number and
routing transit number or certification that the recipient does not
have an account with a financial institution) is required to enable an
agency to pay the recipient of a Federal payment by electronic funds
transfer. The collection of information is mandatory. 31 U.S.C. 3332
(g), as amended, requires recipients of Federal payments to ``provide
to the Federal agency that makes or authorizes the payments information
necessary for the recipient to receive electronic funds transfer
payments.'' The likely respondents are individuals who are employed by
the Service on or after July 26, 1996; existing employees of the
Service who become eligible to receive, for example, travel
reimbursement payments on or after July 26, 1996; individuals who apply
for retirement from the Service on or after July 26, 1996; and
individuals and businesses that become eligible to receive a vendor
payment from the Service on or after July 26, 1996.
The estimated total annual reporting burden is 325 hours. The
estimated burden hours per respondent is 0.25 hours. The estimated
number of respondents is 1,300. These figures represent the burden
imposed by the Service. The reporting burden imposed by other agencies
will be addressed by those agencies.
Although it has been determined that the interim rule is a
significant regulatory action as defined in E.O. 12866, the Office of
Management and Budget (OMB) has waived the preparation of a Regulatory
Assessment. One substantive change was made to the regulation
subsequent to its submission to OMB. At the suggestion of OMB, the
Service added Sec. 208.3 (c), which requires that an agency notify the
Service immediately in writing if it determines that it is unable to
make a payment or class of payments by electronic funds transfer due to
the inability of the agency's system to make the payment(s)
electronically.
List of Subjects in 31 CFR Part 208
Accounting, Banks, Banking, Electronic Funds Transfer.
Authority and Issuance
For the reasons set out in the preamble, Part 208 of Title 31 is
added to read as follows:
PART 208--FEDERAL AGENCY DISBURSEMENTS
Sec.
208.1 Scope and application.
208.2 Definitions.
208.3 Agency responsibilities.
208.4 Recipient responsibilities.
Appendix A to Part 31--Model certification
Authority: 5 U.S.C. 301; 31 U.S.C. 321, 3301, 3302, 3321, 3325,
3327, 3328, 3332, 3335, and 6503.
Sec. 208.1 Scope and application.
This part applies to all Federal payments made by an agency and
requires such payments to be made by electronic funds transfer, unless
a waiver is granted. This part does not apply to payments under the
Internal Revenue Code of 1986.
Sec. 208.2 Definitions.
(a) Agency means any department, agency, or instrumentality of the
United States Government, or a corporation owned or controlled by the
Government of the United States.
(b) Benefit payment means a payment for a Federal Government
entitlement program or for an annuity (other than a Federal retirement
payment), including, but not limited to, payments for Social Security,
Supplemental Security Income, Black Lung, Railroad Retirement Board
Retirement and Annuity, Department of Veterans Affairs Compensation and
Pension, and Worker's Compensation.
(c) Electronic funds transfer means any transfer of funds, other
than a transaction originated by cash, check, or similar paper
instrument, that is initiated through an electronic terminal,
telephone, computer, or magnetic tape, for the purpose of ordering,
instructing, or authorizing a financial institution to debit or credit
an account. The term includes, but is not limited to, Automated
Clearing House transfers, Fedwire transfers, and transfers made at
[[Page 39259]]
automated teller machines and point-of-sale terminals.
(d) Federal payment means any payment made by an agency.
(1) The term includes, but not is limited to:
(i) Federal wage, salary, and retirement payments;
(ii) Vendor and expense reimbursement payments;
(iii) Benefit payments; and
(iv) Miscellaneous payments, including but is not limited to,
interagency payments, grants, loans, fees, principal, interest, and
discounts related to U.S. transferable and non-transferable securities,
overpayment reimbursements, and payments under Federal insurance or
guarantee programs for loans.
(2) The term ``Federal payment'' does not apply to payments under
the Internal Revenue Code of 1986.
(e) Financial institution means any bank, savings bank, savings and
loan association, credit union, or similar institution.
(f) Payment means a sum of money transferred to a recipient in
satisfaction of an obligation.
Sec. 208.3 Agency responsibilities.
(a) Paying by electronic funds transfer. Subject to Sec. 208.3 (b),
and notwithstanding any other provision of law, all Federal payments
made by an agency to a recipient who becomes eligible for the payment
on or after July 26, 1996, shall be made by electronic funds transfer.
For purposes of this subsection, ``becomes eligible for'' means:
(1) In the case of benefit payments, the recipient applies for that
type of benefit on or after July 26, 1996;
(2) In the case of Federal wage or salary payments, the recipient
has a date of entry on duty with the agency on or after July 26, 1996;
(3) In the case of Federal retirement payments, a recipient applies
for retirement from an agency on or after July 26, 1996;
(4) In the case of vendor payments, the payment is made under a
contract or purchase order resulting from a solicitation issued on or
after July 26, 1996;
(5) In the case of grants, an application is filed or renewed on or
after July 26, 1996; and
(6) For all other Federal payments, as determined by the agency.
(b) Waiver. The head of an agency shall waive the application of
subsection 208.3 (a) only upon receipt of written certification that
the recipient does not have an account with a financial institution or
an authorized payment agent.
(c) Agency implementation plan. If the head of an agency determines
that the agency cannot make a Federal payment or class of Federal
payment in accordance with Sec. 208.3 (a) due to the inability of the
agency's system to make the payment(s) by electronic funds transfer,
then the agency shall notify the Service immediately in writing and
shall submit an implementation plan to the Service no later than
January 1, 1997. The plan shall:
(1) Identify the specific type of payment(s) that cannot be made by
electronic funds transfer;
(2) Describe the system problem that prevents the agency from
making the payment(s) by electronic funds transfer; and
(3) Outline a proposed solution and provide a time table for
solving the problem.
Sec. 208.4 Recipient responsibilities.
Each recipient of a Federal payment shall designate a financial
institution or authorized payment agent through which a Federal payment
may be made or certify in writing that such recipient does not have an
account with a financial institution or an authorized payment agent;
and provide the agency with the information requested by the agency in
order to effect the payment.
Appendix A to Part 208--Model Certification
This appendix contains model language which may be used to
qualify for a waiver under Sec. 208.3(b). Use of the model language
is optional. An agency may customize the model language by making
appropriate changes.
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Any payment that we make to you will be made by electronic funds
transfer unless you certify in writing that you do not have an
account with a financial institution or an authorized payment agent.
I certify that I do not have an account with a financial
institution or an authorized payment agent.
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Signature
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Dated: July 23, 1996.
Russell D. Morris,
Commissioner.
[FR Doc. 96-19073 Filed 7-25-96; 8:45 am]
BILLING CODE 4810-35-P