Rule2024-03204
Management of Federal Agency Disbursements
Primary source
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Published
February 21, 2024
Effective
March 22, 2024
Issuing agencies
Treasury DepartmentFiscal Service
Abstract
On January 10, 2023, the Department of the Treasury's (Treasury) Bureau of the Fiscal Service (Fiscal Service) issued a notice of proposed rulemaking (NPRM) to amend Fiscal Service's Management of Federal Agency Disbursements rule, which implements a statutory mandate requiring the Federal Government to deliver non-tax payments by electronic funds transfer (EFT) unless Treasury determines that a waiver of the requirement is appropriate. Fiscal Service is now issuing this final rule (Final Rule) to adopt the amendments as proposed, with one minor change. Among other things, the Final Rule strengthens the EFT requirement by narrowing the scope of existing waivers from the EFT mandate or requiring agencies to obtain Fiscal Service's approval to invoke certain existing part 208 waivers. The use of electronic payments has expanded significantly since the waivers from the EFT mandate were first published in 1998, and the Final Rule appropriately updates part 208's waiver provisions, given the broad availability of safe and secure electronic payment options currently available. In doing so, the Final Rule leverages Treasury's growing profile of electronic payment options, which are faster, less expensive, and safer than paper checks. The strengthening of the EFT requirement with these changes is also consistent with Treasury's commitment to reducing check payments.
Full Text
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<title>Federal Register, Volume 89 Issue 35 (Wednesday, February 21, 2024)</title>
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[Federal Register Volume 89, Number 35 (Wednesday, February 21, 2024)]
[Rules and Regulations]
[Pages 12955-12961]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-03204]
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DEPARTMENT OF THE TREASURY
Fiscal Service
31 CFR Part 208
[FISCAL-2022-0003]
RIN 1530-AA27
Management of Federal Agency Disbursements
AGENCY: Bureau of the Fiscal Service, Treasury.
ACTION: Final rule.
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SUMMARY: On January 10, 2023, the Department of the Treasury's
(Treasury) Bureau of the Fiscal Service (Fiscal Service) issued a
notice of proposed rulemaking (NPRM) to amend Fiscal Service's
Management of Federal Agency Disbursements rule, which implements a
statutory mandate requiring the Federal Government to deliver non-tax
payments by electronic funds transfer (EFT) unless Treasury determines
that a waiver of the requirement is appropriate. Fiscal Service is now
issuing this final rule (Final Rule) to adopt the amendments as
proposed, with one minor change. Among other things, the Final Rule
strengthens the EFT requirement by narrowing the scope of existing
waivers from the EFT mandate or requiring agencies to obtain Fiscal
Service's approval to invoke certain existing part 208 waivers. The use
of electronic payments has expanded significantly since the waivers
from the EFT mandate were first published in 1998, and the Final Rule
appropriately updates part 208's waiver provisions, given the broad
availability of safe and secure electronic payment options currently
available. In doing so, the Final Rule leverages
[[Page 12956]]
Treasury's growing profile of electronic payment options, which are
faster, less expensive, and safer than paper checks. The strengthening
of the EFT requirement with these changes is also consistent with
Treasury's commitment to reducing check payments.
DATES: This rule is effective March 22, 2024.
FOR FURTHER INFORMATION CONTACT: Matthew Helfrich, Management and
Program Analyst, at (215) 806-9616 or
<a href="/cdn-cgi/l/email-protection#3875594c4c505d4f16705d545e4a515b50785e514b5b5954164c4a5d594b4d4a41165f574e"><span class="__cf_email__" data-cfemail="a7eac6d3d3cfc2d089efc2cbc1d5cec4cfe7c1ced4c4c6cb89d3d5c2c6d4d2d5de89c0c8d1">[email protected]</span></a>, or Rebecca Saltiel, Senior
Counsel, at (202) 874-6648 or <a href="/cdn-cgi/l/email-protection#e0b2858285838381ceb3818c9489858ca086899383818cce9492858193959299ce878f96"><span class="__cf_email__" data-cfemail="89dbecebeceaeae8a7dae8e5fde0ece5c9efe0faeae8e5a7fdfbece8fafcfbf0a7eee6ff">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
In 1998, Fiscal Service issued a final rule, codified at 31 CFR
part 208 (part 208), to implement the requirements of 31 U.S.C. 3332,
as amended by section 31001(x)(1) of the Debt Collection Improvement
Act of 1996, Public Law 104-134, 110 Stat. 1321-376. Section 3332
generally mandates that all Federal payments that the government makes,
other than tax payments, be delivered by EFT unless waived by the
Secretary of the Treasury. Specifically, subsection (f)(2)(A) of
section 3332 provides that ``[t]he Secretary of the Treasury may waive
application of [the EFT mandate] to payments--(i) for individuals or
classes of individuals for whom compliance poses a hardship; (ii) for
classifications or types of checks; or (iii) in other circumstances as
may be necessary.'' Subsection (f)(2)(B) states that ``[t]he Secretary
of the Treasury shall make determinations under subparagraph (A) based
on standards developed by the Secretary.'' Section 3332 also authorizes
the Secretary of the Treasury to ``prescribe regulations that the
Secretary considers necessary to carry out this section.'' 31 U.S.C.
3332(i)(1). The waivers authorized by section 3332 are located
exclusively in part 208. Pursuant to statutory authority in 31 U.S.C.
3335, part 208 also provides that Treasury may assess a charge to an
agency that fails to make a payment by EFT as prescribed by part 208.
The part 208 waivers have remained largely unchanged since the late
1990s, even as Treasury's percentage of payments made electronically
has significantly increased. In 2007, 78% of the government's payments
that Treasury disbursed were made electronically. By fiscal year 2023,
that figure had risen to 96%. Of the over 1 billion payments that
Treasury disburses each year on behalf of Federal agencies, all but a
small fraction are paid electronically.
The part 208 waivers have also remained largely unchanged despite
Treasury expanding its electronic payment offerings. The additional
offerings include same-day Automated Clearing House (ACH) payments,
Treasury-sponsored prepaid debit cards, and the Treasury-sponsored
Digital Pay program. Treasury also operates electronic payment support
and education programs and platforms such as <a href="http://GoDirect.gov">GoDirect.gov</a> and the
Direct Express Financial Education Center. None of these offerings
existed when Treasury published its initial final rule on part 208 in
1998.
The use of Treasury-sponsored debit cards illustrates how much has
changed since the waivers were first published. Over 3.8 million
Federal benefit payees receive their payments on Direct Express debit
cards, which are linked to accounts sponsored by Treasury. Similarly,
over 16.5 million Economic Impact Payment (EIP) payees received
payments in 2020 and 2021 on EIP Cards, which are debit cards linked to
Treasury-sponsored accounts. The Direct Express program helps ensure
that recipients of Federal benefits receive payments electronically
even if they do not otherwise have bank accounts. The use of EIP Cards
helped Treasury meet its responsibility to issue EIPs as quickly as
possible. But for the issuance of debit cards, most of these payments
would have been by paper check.
It is Treasury's goal to create a modern, seamless, and cost-
effective Federal payment experience for the public. Expanding the use
of electronic payments and reducing the number of paper checks are
essential to this goal. Electronic payments are much faster, more
timely, and significantly less expensive than paper checks. Electronic
payments are safer than paper checks as well, with direct deposits
being 16 times less likely to have post-payment issues (such as claims
of missing or misdelivered payments) than paper checks. Electronic
payments avoid the disproportionate burden checks can place on some
payment recipients--who may have to resort to expensive check-cashing
services--as well as the negative impact that check production and
delivery may have on the environment.
There remains room for improvement in increasing the percentage of
payments made electronically and reducing the number of paper checks
produced and mailed every year. Treasury works closely with Federal
agencies that make payments and has encountered numerous examples of
payments that are made by paper check that could be made
electronically. These often include Federal intragovernmental payments
and vendor payments, many of which take place on a recurring basis.
Increasing the electronic payment rate for Treasury-disbursed payments
is part of an Agency Priority Goal for Treasury, and Fiscal Service has
set a federal financial management goal to deliver 99% of eligible
Treasury-disbursed payments electronically by 2030.
Treasury believes that it is time to narrow the existing waivers. A
narrowing of the waivers is expected to increase the percentage of
payments made electronically and reduce the number of paper checks sent
out each year. This narrowing is possible and appropriate because of
the changes over the last 25 years.
II. Public Comments and Fiscal Service Responses
Fiscal Service received three substantive comment letters in
response to the NPRM. Two comments were from Federal agencies and one
was from Nacha, the ACH network's governing body. The comments sought
clarification regarding the application of certain waivers and the new
agency waiver request process, addressed the charges that Fiscal
Service may assess under Sec. 208.9, discussed the rule's potential
effects on agency-led research activities that involve payments to
research participants, and expressed general support for the NPRM.
Comments Regarding the Application of Certain Waivers and the New
Agency Waiver Request Process
One agency commenter requested clarification regarding a portion of
the preamble to the NPRM that addressed the amendment to Sec.
208.4(a)(1)(ii), which provides a waiver from the EFT requirement for
individuals who receive a type of payment for which Treasury does not
offer delivery to a Treasury-sponsored account. The Final Rule
specifies that if Treasury provides an agency with an option to begin
delivering a type of payment to a Treasury-sponsored account, the
agency must file a waiver request with Treasury to make payments of
that type by any means other than by EFT. In response to the
commenter's request for clarification, we note that if Treasury
provides an agency an option to begin delivering certain payments to a
Treasury-sponsored account and the agency submits a waiver request to
continue to make payments other than by EFT, the agency may continue to
issue check payments during the
[[Page 12957]]
pendency of the waiver request. The commenter also asked whether
individuals who are homeless would be eligible for a class waiver,
noting the potential difficulty of enrolling such individuals in direct
deposit or in Direct Express. Fiscal Service would consider an agency's
waiver request under Sec. 208.4(a)(1)(ii) for a group of individuals,
including individuals who are homeless.
With regard to the waiver under newly redesignated Sec.
208.4(a)(7), which may be available when an agency does not expect to
make multiple payments to the same individual or small business concern
within a one-year period on a regular, recurring basis, an agency
commenter asked if waivers could be applied to a class of individuals,
such as in cases where an agency holds the personal funds of patients
during hospital stays and then returns the funds upon patient
discharge. The commenter asked if the Sec. 208.4(a)(7) waiver could
apply in such cases given that the agency would not know if a patient
may be readmitted during the same year. Fiscal Service believes the
waiver under Sec. 208.4(a)(7) could be relied upon to return the
personal funds of patients by means other than EFT and that the agency
could apply the waiver to a class of discharged patients rather than on
a case-by-case basis. Fiscal Service, however, would discourage the
agency's use of the waiver for all discharged patients before first
considering whether EFT, including via the U.S. Debit Card, would be an
appropriate and convenient method of returning discharged patients'
funds in certain circumstances. For example, the waiver could be
limited to payments to patients who have been offered return of their
funds by direct deposit or U.S. Debit Card and who have declined that
option.
One agency commenter also commented on the new agency waiver
request requirement. As the commenter noted, the NPRM stated that
Fiscal Service would provide detailed information about how to file a
waiver request in the Treasury Financial Manual. The commenter stated
that it would be helpful to have more information regarding the agency
waiver request process. As of the date of this Final Rule, Fiscal
Service has updated the relevant Treasury Financial Manual chapter,
which is available at <a href="https://tfm.fiscal.treasury.gov/v1/p4/ac200/">https://tfm.fiscal.treasury.gov/v1/p4/ac200/</a>.
Subsection 2040.30c of the chapter, which may be amended from time to
time, outlines the agency waiver request process and will be effective
March 22, 2024.
Comment Relating to Fiscal Service's Assessment of Charges Under Sec.
208.9
One agency commenter requested more detail regarding how charges
would be assessed under Sec. 208.9, how frequently agencies will be
billed, and whether agencies would have any appeal rights. The
provision of the Final Rule stating that Treasury may assess a charge
to an agency pursuant to 31 U.S.C. 3335 if the agency fails to make
final payment by EFT as prescribed under part 208 has been in effect
since 1999. The proposed rule only clarified that if an agency fails to
make payment by EFT as prescribed under part 208, Treasury will
consider that payment to be not timely pursuant to 31 U.S.C. 3335, as
EFT payments are processed, disbursed, and settled more quickly than
paper checks.
The commenter is correct that the proposed rule did not address how
Treasury would assess charges to agencies that fail to make payment by
EFT pursuant to Sec. 208.9. Fiscal Service is evaluating the
appropriate method to assess charges to agencies in accordance with the
Secretary's authority under 31 U.S.C. 3335, which permits the Secretary
to charge an agency the cost to the General Fund of the Treasury caused
by the agency's non-compliance with the requirement to provide for the
timely disbursement of Federal funds. Until such time as the method of
assessing non-compliance charges is established and published in the
Treasury Financial Manual, Volume I, Part 4A, Chapter 2000, Fiscal
Service will not charge agencies under Sec. 208.9. Moreover, Fiscal
Service anticipates that once the method of assessing non-compliance
charges is established and published in the Treasury Financial Manual,
Sec. 208.9 would be relied upon to charge an agency only in unresolved
cases after Fiscal Service and the agency have exhausted reasonable
options to resolve the non-compliance issue.
Comments Relating to Agency Research Activities
One agency commenter expressed concerns regarding the EFT
requirement's impact on agency research activities because research
teams would need to submit an Institutional Review Board modification
to already-approved studies to collect bank account information from
participants. The commenter also observed that any requirement to
collect bank account information from research participants would be
detrimental to the agency's recruitment of research subjects, as it
would limit the agency's recruitment to individuals who are willing to
provide bank account information. The commenter further suggested that
the agency could not utilize the waiver under Sec. 208.4(a)(7) for
non-regular, non-recurring payments given that the agency might not
know whether any given research participant would be paid more than
once a year.
The EFT requirement is a longstanding requirement, not a new
requirement under the Final Rule. Additionally, the agency would be
able to comply with the EFT requirement without collecting bank
information from research participants by issuing pre-paid debit cards
through Fiscal Service's U.S. Debit Card program or virtual payments
through Fiscal Service's Digital Pay program.
With respect to the commenter's concern that the payment waiver
under Sec. 208.4(a)(7) for non-regular and non-recurring payments
would not be available to the agency to make non-EFT payments to the
research participants, we note that to use the waiver, the rule
requires that the agency not ``expect'' to make payments to the same
recipient on a ``regular, recurring basis'' within a one-year period--
not that the agency does not ultimately make more than one payment to
the same recipient within a one-year period. (We note that although the
preamble to the NPRM referred to the waiver under Sec. 208.4(a)(7) as
the ``one-time, non-recurring payment waiver,'' it could be more
precisely referred to as the ``non-regular, non-recurring payment
waiver.'') Accordingly, an agency may use the waiver under Sec.
208.4(a)(7) to pay research participants by means other than EFT when
the agency does not expect to make payments to the research
participants on a regular, recurring basis, notwithstanding the
possibility that those research participants may be paid for
participating in other agency research projects in the same year. While
an agency in this type of circumstance could use the waiver under Sec.
208.4(a)(7), we would also encourage such an agency to consider using
the U.S. Debit Card program to issue pre-paid debit cards or the
Digital Pay program to issue virtual payments, which, as noted above,
would not require the agency to collect personal bank account
information.
Comments Expressing General Support for the Proposed Rule
Nacha's comment letter expressed support for the NPRM, noting that
electronic payments will continue to reduce costs and improve
efficiency across the federal government. Nacha further encouraged
Fiscal Service to: (1) provide for the sharing of payment
[[Page 12958]]
enrollment information across agencies to the extent possible, and to
seek Congressional authorization to do so if necessary; (2) utilize
customer-facing enrollment portals, similar to the IRS's portal for
providing banking information for EIPs; and (3) use industry-available
account validation tools and services to promote greater accuracy of
payment information. We appreciate Nacha's support of the NPRM. We note
that currently federal benefit recipients may enroll in direct deposit
on <a href="http://GoDirect.gov">GoDirect.gov</a> and that Fiscal Service continues to explore options
for improving the EFT enrollment process. Fiscal Service also currently
leverages commercially available data sources to confirm the existence,
status, and ownership of bank accounts. Use of these data sources has
increased the government's payment accuracy while reducing instances of
reported fraud and erroneous payments. Fiscal Service is continually
evaluating ways to increase electronic payments while reducing improper
and misdirected EFT.
III. Summary of Final Rule
The Final Rule amends part 208 to require agencies seeking to use
certain waivers to file a request with Treasury. Under the Final Rule,
agencies must submit a request to Fiscal Service to use an EFT waiver
in the following circumstances:
<bullet> If Treasury provides a federal entity with an option to
begin delivering a Federal payment to a Treasury-sponsored account and
the federal entity still seeks to make the payment by check (see Sec.
208.4(a)(1)(ii));
<bullet> To extend any waiver for payment to a recipient within an
area designated by the President or an authorized federal entity
administrator as a disaster area past the 120-day period following when
the disaster is declared (see Sec. 208.4(a)(4);
<bullet> Where a federal entity's need for goods and services is of
such an unusual and compelling urgency that the government would be
seriously injured unless payment is made by a method other than EFT
(see Sec. 208.4(a)(8)); or
<bullet> Where there is only one source of goods or services and
the government would be seriously injured unless payment is made by a
method other than EFT (see Sec. 208.4(a)(8)).
The Final Rule also narrows the scope of an existing waiver under
newly re-designated Sec. 208.4(a)(7) that permits an agency to make
payment by check if the agency does not expect to make payments to the
same recipient within a one-year period on a regular, recurring basis,
by limiting the waiver to payments to individuals and small businesses.
Fiscal Service is also amending Sec. 208.4(a) by adding one new waiver
for payments in a foreign currency if Treasury does not support
electronic payment in that foreign currency.
The Final Rule also adds a new paragraph (c) to Sec. 208.4 that
gives Treasury the ability to nullify an agency waiver if Treasury
makes the determination that the application of the waiver would lead
to an agency initiating an unusually large number or proportion of
payments by means other than EFT.
Fiscal Service is also revising Sec. 208.7 to require agencies to
provide, upon Treasury's, request certain employee identification
number data associated with agency payments to enable Treasury to
identify Federal intragovernmental check payments that should be
converted to EFT.
In addition, the Final Rule amends Sec. 208.9(b) to clarify that
when an agency fails to make a payment by EFT as prescribed by part
208, Treasury will consider that payment to not be a timely payment
under 31 U.S.C. 3335, as EFT payments are processed, disbursed, and
settled more quickly than paper checks. The Final Rule retains the
existing language in Sec. 208.9(b) authorizing Treasury to assess a
charge to an agency that fails to make a payment by EFT as prescribed
under this part. As noted above, Fiscal Service is still evaluating the
appropriate method to assess charges to agencies in accordance with the
Secretary's authority under 31 U.S.C. 3335. Until such time as the
method of assessing non-compliance charges is established and published
in the Treasury Financial Manual, Volume I, Part 4A, Chapter 2000,
Fiscal Service will not charge agencies under Sec. 208.9.
IV. Section-by-Section Analysis
Sections 208.1 Through 208.3
We are not amending these sections.
Section 208.4
We are amending Sec. 208.4 in several ways.
We are amending the waiver under paragraph (a)(1)(ii) that is
available where an individual receives a type of payment for which
Treasury does not offer delivery to a Treasury-sponsored account to
specify that if Treasury provides an agency with an option to begin
delivering a type of payment to a Treasury-sponsored account, the
agency must file a waiver request with Treasury to make payments of
that type other than by EFT. Filing the waiver request is sufficient to
utilize the waiver pending Treasury's decision on the request, but if
Treasury ultimately rejects the request, the waiver will not be
available for payments made after the decision date.
We are adding a new waiver to Sec. 208.4 at a new paragraph
(a)(3). This waiver provides that payment by EFT is not required when
the payment is to be made in a foreign currency and Treasury does not
support electronic payment in that foreign currency. Treasury currently
supports electronic payments in 145 foreign currencies to over 200
countries and territories, but we acknowledge that Treasury payment
systems do not support electronic payment in every foreign currency.
The new waiver would apply in these limited circumstances.
We are amending the existing waiver under paragraph (a)(3)
(renumbered under the Final Rule as paragraph (a)(4)), which waives the
EFT requirement for payments to recipients in a designated disaster
area within 120 days after the disaster is declared. The amendment
allows an agency to extend this waiver beyond 120 days after the
disaster is declared, provided that the agency files a waiver request
with Treasury. Filing is sufficient to extend the waiver pending
Treasury's decision on the request, but if Treasury ultimately rejects
the request the waiver will not be available for payments made after
the decision date. We are making this change in response to feedback
from an agency regarding its disaster relief payments and the potential
need to extend the waiver beyond the initial 120-day timeframe.
However, agencies contemplating using this waiver should be mindful
that the U.S. Debit Card is an electronic payment option that Treasury
can make available to recipients in designated disaster areas, negating
the need for an EFT waiver and paper checks in many instances.
We are amending the existing waiver at paragraph (a)(6) (renumbered
as paragraph (a)(7) under the Final Rule), which applies when an agency
does not expect to make payments to the same recipient within a one-
year period on a regular, recurring basis, and remittance data
explaining the purpose of the payment is not readily available from the
recipient's financial institution receiving the payment by EFT. We have
eliminated the language concerning the remittance data explaining the
purpose of the payment. This language is archaic and no longer
necessary or pertinent. Treasury disburses Federal payments to
recipients' financial institution accounts with information that the
financial institutions make available to recipients, allowing
recipients to determine the purpose of the payments. This
[[Page 12959]]
information often exceeds the information available on a Treasury
check.
We are also amending the existing waiver under paragraph (a)(6)
(renumbered as paragraph (a)(7) under the Final Rule) to narrow its
scope so that it applies only when an agency does not expect to make
payments to the same recipient within a one-year period on a regular,
recurring basis and that recipient is an individual or a small business
concern. For the purpose of this waiver, the NPRM proposed to adopt the
meaning given to the term ``small business concern'' in section 3 of
the Small Business Act at (15 U.S.C. 632). A broad waiver that would
apply when an agency does not expect to make payments to the same
recipient within a one-year period on a regular, recurring basis,
regardless of the identity of the recipient, is no longer necessary,
given the variety of electronic payment options available to agencies
and payment recipients, including vendors. Nevertheless, we are
retaining this waiver for agency payments to small business concerns to
aid Federal agencies in their efforts to reach the broadest and most
inclusive and diverse audience for Federal agency contracting
opportunities. We also are retaining this waiver for agency payments to
individuals because there are limited situations in which it might
still make sense for an agency to make a non-regular, non-recurring
payment to an individual by paper check. In addition, we are amending
the final rule to specify that for the purposes of the waiver under
paragraph (a)(7), ``small business concern'' has the meaning given the
term in section 3 of the Small Business Act and its implementing
regulations.
During Treasury's ongoing interactions with agencies regarding our
efforts to increase electronic payments, we have become aware that some
agencies are relying on the non-regular, non-recurring payment waiver
(currently at Sec. 208.4(a)(6)) to make the first in a series of
recurring benefit payments to a recipient by paper check. Part 208 does
not, as currently written, provide agencies with a waiver for the
initial payment in a series of recurring payments. We understand,
however, that certain benefit-paying agencies have encountered process
and systems-related impediments that make it difficult for them to make
the initial payment in a series of recurring benefit payments by EFT.
We are not adding a permanent waiver for this category of initial,
recurring payments, but pursuant to Sec. 208.10, Treasury reserves the
right to waive any provision of part 208 in any case or class of cases.
In response to the informal feedback we have received from benefit-
paying agencies regarding systems impediments to making the initial
payment in a series of recurring payments by EFT, and using the
discretion provided in Sec. 208.10, we are waiving the EFT mandate for
agencies making initial payments in a series of recurring payments for
two years from the date of publication of this Final Rule. This will
permit affected agencies to make initial payments by paper check while
giving agencies the time they need to make any required system or
process changes that will allow them to fully comply with the part 208
EFT mandate.
We are amending the existing waiver under paragraph (a)(7)
(renumbered as paragraph (a)(8) under the Final Rule), which applies to
payments where: (1) an agency's need for goods and services is urgent
or where there is only one source for goods or services and (2) the
government would be significantly impacted unless payment is made by
means other than EFT. We are retaining this waiver but now will require
an agency to file a waiver request with Treasury to invoke it. The
subject matter of this waiver is extremely fact specific, so we believe
that it is appropriate for Treasury to consider waiver requests under
revised paragraph (a)(8) on a case-by-case basis. Filing the waiver
request is sufficient to utilize the waiver pending Treasury's decision
on the request, but if Treasury ultimately rejects the request, the
waiver will not be available for payments made after the decision date.
We are amending paragraph (b), which describes the waiver request
process, so that it applies to requests for waivers from agencies as
well as individuals. Agencies do not submit waiver requests today, but
under the Final Rule would do so in some cases, as described above.
Agencies seeking waivers can find more detailed information about how
to file a waiver request in the Treasury Financial Manual, Volume I,
Part 4A, Chapter 2000, Section 2040.30c, which is available at <a href="https://tfm.fiscal.treasury.gov/v1/p4/ac200/">https://tfm.fiscal.treasury.gov/v1/p4/ac200/</a>. Agencies will be entitled to make
payment by paper check during the pendency of the waiver request
process so that no payments are delayed by the new waiver request
requirement. Individuals seeking waivers can find more detailed
information about how to file a waiver request with Treasury at
<a href="http://GoDirect.gov">GoDirect.gov</a>. Treasury reserves the right to reject any waiver request
it receives.
We are adding a new paragraph (c) that provides Treasury the
ability to nullify an agency's waiver if Treasury determines that the
application of the waiver would lead to the agency initiating an
unusually large number or proportion of payments by means other than
EFT. If Treasury nullifies a waiver for a class of cases in accordance
with this new paragraph (c), Treasury will require the agency in
question to work with Treasury to identify and implement ways to make
the payments by EFT. Among other things, this may include requiring an
agency to work with Treasury to identify information to make payments
by EFT by using data that Treasury maintains on previous payments to
the same payment recipient.
The remaining provisions in Sec. 208.4 are unchanged.
Sections 208.5 and 208.6
We are not amending these provisions.
Section 208.7
We are amending Sec. 208.7 to add a requirement that an agency
provide to Treasury, upon request from Treasury, the employer
identification numbers (EINs) assigned to the agency that the agency
has used when making or receiving Federal intragovernmental payments
during the 12 months preceding the request as well as the EINs for all
Federal agencies to whom the agency has made a Federal
intragovernmental payment during the preceding 12 months. This agency
EIN data will enable Treasury to identify Federal intragovernmental
check payments that should be converted to EFT. We are adding this
requirement as subparagraph (b) and designating the existing language
in 208.7 as subparagraph (a).
Section 208.8
We are not amending Sec. 208.8.
Section 208.9
We are amending Sec. 208.9(b) to clarify that when an agency fails
to make a payment by EFT as prescribed by this part 208 and no waiver
under Sec. 208.4 is applicable, Treasury will consider the payment to
be untimely under 31 U.S.C. 3335, as EFT payments are processed,
disbursed, and settled more quickly than checks. When an agency makes a
paper check payment that falls into one of the waiver categories in
Sec. 208.4, Treasury will consider that payment to be a timely payment
under 31 U.S.C. 3335 as an exceptional circumstance. The Final Rule
retains the existing language in Sec. 208.9(b) specifying that,
[[Page 12960]]
pursuant to 31 U.S.C. 3335, Treasury may assess a charge to an agency
that fails to make a payment by EFT as prescribed by part 208. Treasury
reserves the right to assess a charge to any agency that fails to make
a payment by EFT after Treasury has rejected the agency's waiver
request for that payment.
Sections 208.10 and 208.11.
We are not amending these provisions.
V. Procedural Analysis
Regulatory Planning and Review
The Final Rule does not meet the criteria for a ``significant
regulatory action'' as defined in Executive Order 12866, as amended.
Therefore, the regulatory review procedures contained therein do not
apply.
Regulatory Flexibility Act Analysis
It is hereby certified that the Final Rule will not have a
significant economic impact on a substantial number of small entities.
The rule provisions being amended primarily apply to Federal agencies
and individuals who receive Federal payments, and do not have any
direct impact on small entities.
Unfunded Mandates Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C.
1532 (Unfunded Mandates Act), requires that the agency prepare a
budgetary impact statement before promulgating any rule likely to
result in a Federal mandate that may result in the expenditure by
state, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more in any one year. If a budgetary
impact statement is required, section 205 of the Unfunded Mandates Act
also requires the agency to identify and consider a reasonable number
of regulatory alternatives before promulgating the rule. We have
determined that the Final Rule will not result in expenditures by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more in any one year. Accordingly,
we have not prepared a budgetary impact statement or specifically
addressed any regulatory alternatives.
List of Subjects in 31 CFR Part 208
Banks, banking, Debit cards, Disbursements, Electronic funds
transfers, Federal payments, Treasury-sponsored accounts.
For the reasons set out in the preamble, we are amending 31 CFR
part 208 as follows:
PART 208--MANAGEMENT OF FEDERAL AGENCY DISBURSEMENTS
0
1. The authority citation for part 208 continues to read as follows:
Authority: 5 U.S.C. 301; 12 U.S.C. 90, 265, 266, 1767, 1789a; 31
U.S.C. 321, 3122, 3301, 3302, 3303, 3321, 3325, 3327, 3328, 3332,
3335, 3336, 6503.
0
2. Amend Sec. 208.4 by:
0
a. Revising paragraph (a)(1)(ii);
0
b. Redesignating paragraphs (a)(3) through (a)(7) as paragraphs (a)(4)
through (a)(8) and adding a new paragraph (a)(3);
0
c. Deleting the semicolon at the end of the second sentence of newly
redesignated paragraph (a)(4) and replacing it with a period;
0
d. Revising paragraphs (a)(4), (a)(7), and (a)(8);
0
e. Revising paragraph (b); and
0
f. Adding a new paragraph (c).
The revisions and additions read as follows:
Sec. 208.4 Waivers.
(a) * * *
(ii) Receives a type of payment for which Treasury does not offer
delivery to a Treasury-sponsored account. In such cases, those payments
are not required to be made by electronic funds transfer, unless and
until such payments become eligible for deposit to a Treasury-sponsored
account. However, if Treasury provides an agency with an option to
begin delivering a type of Federal benefit payment to a Treasury-
sponsored account, the agency must file a waiver request with Treasury
to make Federal benefit payments of that type by any means other than
by electronic funds transfer;
* * * * *
(3) Where the payment is in a foreign currency and Treasury does
not support electronic payment in that currency.
(4) Where the payment is to a recipient within an area designated
by the President or an authorized agency administrator as a disaster
area. This waiver is limited to payments made within 120 days after the
disaster is declared. An agency must file a waiver request with
Treasury (which must be approved by Treasury) to extend this waiver
beyond 120 days after the disaster is declared;
* * * * *
(7) Where the agency does not expect to make multiple payments to
the same recipient within a one-year period on a regular, recurring
basis but only if the payments are made to an individual or a small
business concern where ``small business concern'' has the meaning given
the term in section 3 of the Small Business Act at 15 U.S.C. 632 and
its implementing regulations; and
(8) * * * An agency must file a waiver request with Treasury (which
must be approved by Treasury) to utilize this waiver.
(b) An individual who requests a waiver under paragraphs (a)(1)(iv)
and (v) or an agency who requests a waiver under paragraphs (a)(1)(ii),
(a)(4), or (a)(8) of this section shall provide, in writing, to
Treasury a certification supporting that request, in such form that
Treasury may prescribe. The individual shall attest to the
certification before a notary public, or otherwise file the
certification in such form that Treasury may prescribe. Treasury
reserves the right to reject any waiver request it receives.
(c) If application of an agency's waiver, together with any waiver
request previously granted under paragraphs (a)(1)(ii), (a)(4), or
(a)(8), would, in Treasury's determination, lead to the agency
initiating an unusually large number or proportion of payments by means
other than electronic funds transfer, Treasury reserves the right to
nullify the waiver in this class of cases and require the agency to
work with Treasury to identify and implement ways to make the payments
by electronic funds transfer.
0
3. Revise Sec. 208.7 to read as follows:
Sec. 208.7 Agency responsibilities.
(a) An agency shall put into place procedures that allow recipients
to provide the information necessary for the delivery of payments to
the recipient by electronic funds transfer to an account at the
recipient's financial institution or a Treasury-sponsored account.
(b) Upon request from Treasury, an agency shall provide Treasury
with a list of the employer identification numbers (EINs) assigned to
the agency that the agency has used to make or receive a Federal
intragovernmental payment during the 12- month period preceding the
request from Treasury as well as a list of the EINs for all Federal
agencies to whom the agency has made a Federal intragovernmental
payment during the same 12-month period.
0
4. Amend Sec. 208.9 by revising paragraph (b) to read as follows:
Sec. 208.9 Compliance.
* * * * *
(b) If an agency fails to make payment by electronic funds transfer
as prescribed under this part, Treasury will consider that payment to
be not timely pursuant to 31 U.S.C. 3335, as electronic funds transfer
payments are processed,
[[Page 12961]]
disbursed, and settled more quickly than checks and, accordingly,
Treasury may assess a charge to the agency pursuant to 31 U.S.C. 3335.
David Lebryk,
Fiscal Assistant Secretary.
[FR Doc. 2024-03204 Filed 2-20-24; 8:45 am]
BILLING CODE P
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