[Federal Register Volume 88, Number 209 (Tuesday, October 31, 2023)]
[Proposed Rules]
[Pages 74386-74389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-23314]


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DEPARTMENT OF THE TREASURY

Bureau of the Fiscal Service

31 CFR Part 323

[FISCAL-2023-0002]
RIN 1530-AA28


Disclosure of Records

AGENCY: Bureau of the Fiscal Service, Department of the Treasury.

ACTION: Notice of proposed rulemaking with request for comment.

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SUMMARY: The Bureau of the Fiscal Service within the Department of the 
Treasury (Fiscal Service or Treasury) proposes to adopt regulations to 
implement statutory requirements under the SECURE 2.0 Act of 2022 
requiring Treasury to provide information on applicable savings bonds 
to states. A state receiving the information with respect to an 
applicable savings bond may use the information to locate the owner of 
the bond pursuant to Treasury's regulations and the state's own 
standards and requirements under abandoned property rules and 
regulations of the state. Regulations adopted by Treasury are required 
to protect the privacy of savings bond owners, prevent fraud, and 
ensure that any information disclosed to a state under these rules 
shall be used solely to locate savings bond owners.

DATES: Comments on the proposed rule must be received by November 30, 
2023.

ADDRESSES: Comments may be submitted by any of the following methods:
    <bullet> Federal eRulemaking Portal: www.regulations.gov. Follow 
the instructions on the website for submitting comments.
    <bullet> Mail: Department of the Treasury, Bureau of the Fiscal 
Service, Attn:

[[Page 74387]]

Marcia Goodnight, Retail Securities Services. Bureau of the Fiscal 
Service, Warehouse and Operations Center, Dock 1. 257 Bosley Industrial 
Park Drive, Parkersburg, WV 26101.
    The fax and email methods of submitting comments on rules to Fiscal 
Service have been decommissioned.
    Instructions: All submissions received must include the agency name 
(Bureau of the Fiscal Service) and docket number FISCAL-2023-0002 for 
this rulemaking. In general, comments received will be published on 
regulations.gov without change, including any business or personal 
information provided. Comments received, including attachments and 
other supporting materials, are part of the public record and subject 
to public disclosure. Do not include any information in your comments 
or supporting materials that you consider confidential or inappropriate 
for public disclosure. In accordance with the U.S. government's 
eRulemaking Initiative, Fiscal Service publishes rulemaking information 
on www.regulations.gov. Regulations.gov offers the public the ability 
to comment on, search, and view publicly available rulemaking 
materials, including comments received on rules.

FOR FURTHER INFORMATION CONTACT: Marcia Goodnight, Retail Securities 
Services, at <a href="/cdn-cgi/l/email-protection#55073021343c3906303620273c212c063027233c363026163a3838303b212615333c263634397b212730342620272c7b323a23"><span class="__cf_email__" data-cfemail="23714657424a4f70464056514a575a704651554a404650604c4e4e464d575063454a5040424f0d575146425056515a0d444c55">[email protected]</span></a>; or 
Lela Anderson, Attorney-Advisor, at 304-480-8692.

SUPPLEMENTARY INFORMATION: 

I. Background

    On December 29, 2022, the SECURE 2.0 Act of 2022 \1\ (SECURE Act) 
became law and added subsection (f) to 31 U.S.C. 3105 mandating that 
Treasury share certain savings bond information with states for the 
purpose of locating savings bond owners. Under new subsection (f), 
Treasury is required to ``provide each state, in digital or other 
electronic form, with information describing any applicable savings 
bond which has an applicable address that is within such state, 
including (i) the name and applicable address of the registered owner; 
and (ii) the name and applicable address of any registered co-owner or 
beneficiary.'' \2\ ``Applicable address'' is defined to include the 
registered address for the registered owner of the savings bond or the 
last-known address for the registered owner available to the 
Secretary.\3\ ``Applicable savings bond'' is defined to include a 
savings bond which is more than three years past its final maturity 
date, in paper or electronic form, and has not been redeemed.\4\
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    \1\ Public Law 117-32.
    \2\ 31 U.S.C. 3105(f)(1)(A).
    \3\ 31 U.S.C. 3105 (f)(1)(C).
    \4\ 31 U.S.C. 3105 (f)(6).
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    Treasury is required by new subsection (f)(2) to prescribe 
regulations or guidance as necessary to carry out the purposes of 
subsection (f), including rules to protect the privacy of the owners of 
applicable savings bonds, prevent fraud, and ensure that any 
information provided to a state is used solely for the purposes of the 
new subsection (f).\5\ Regulations or guidance issued by Treasury must 
not have the effect of prohibiting, restricting, or otherwise 
preventing a state from obtaining the information described above.
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    \5\ 31 U.S.C. 3105(f)(2).
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II. Summary of Proposed Rule Amendments

Proposed Amendments to Part 323 ``Disclosure of Records.''

    Fiscal Service would add the proposed regulations to its disclosure 
of records regulations adopted under the Freedom of Information Act 
(FOIA).\6\ Fiscal Service would maintain the current FOIA regulations 
found in part 323 by moving the existing provisions in sections 323.1-
323.5 into a new subpart A. A new subpart B would contain the proposed 
regulations to implement the SECURE Act requirements to provide records 
containing applicable savings bond information to states. Subpart B 
would include definitions necessary to implement the proposed 
regulations, including proposed requirements for a state to receive 
applicable savings bond information, proposed instructions for the use 
of information, and proposed liability statements. Separating the two 
different statutory authorities, FOIA and the SECURE Act, by subpart is 
intended to assist the public in identifying the two separate 
authorities under which an individual or a state may request a 
disclosure of records or information.
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    \6\ 31 CFR part 323.
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    Treasury believes the new disclosure of applicable savings bond 
information requirements is closely associated with the purpose of the 
existing FOIA disclosure regulations. While the SECURE Act only allows 
for disclosure of certain information to states, rather than to the 
public at large, a savings bond owner could look to a single 
regulation, part 323, to determine the various ways in which their 
savings bond information could be disclosed.

A. Subpart A, Sec.  323.1

    As noted above, subpart A will contain the existing regulations 
that implement FOIA for Fiscal Service currently found at part 323. 
Accordingly, the proposal would make a technical modification to the 
first sentence of 323.1 to identify the subpart rather than the part.

B. Purpose of the Proposed Regulations, Subpart B, Sec.  323.10

    Within the new subpart B, this new section briefly describes the 
purpose of the new regulatory provisions, namely to implement the 
SECURE Act.

C. Rules Governing Sharing of Applicable Savings Bond Information With 
States, Subpart B, Sec.  323.11

Definitions
    Treasury proposes to amend part 323 by adding a new provision, to 
be found at 31 CFR 323.11, to include the definitions and regulations 
necessary to provide states the information required by the SECURE Act. 
In addition, the proposed amendments would add new provisions to help 
protect savings bond customers from fraud and help to ensure the 
security of the records and information contained therein provided to 
states.
    The SECURE Act amended 31 U.S.C 3105 by adding subsection (f), 
which requires Treasury to provide, in digital or other electronic 
form, each state with information describing any applicable savings 
bond that has an applicable address that is within such state. 
``Applicable address'' is defined in the statute as the registered 
address for the registered owner, co-owner, or beneficiary of the 
savings bond or the last-known address for the foregoing if it is 
available to Treasury.\7\
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    \7\ 31 U.S.C. 3105(f)(1)(C).
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    Treasury proposes to define ``last-known address'' to mean an 
address available to Fiscal Service after a reasonable search of its 
records. While the level of effort dedicated to the search could be 
expressed in various degrees, a ``reasonable'' search balances the 
goals of efficiency and effectiveness. An exhaustive search, for 
example, would be unduly costly and burdensome on Fiscal Service, given 
the breadth of our systems of records, and unlikely to significantly 
change the results of the search. ``Record'' is broadly defined to 
include any data and documentation containing savings bond information. 
In defining it in this way, Fiscal Service can more readily protect 
savings bond owners from unauthorized disclosure of their information, 
as any

[[Page 74388]]

information currently held within Treasury will become a record once 
disclosed. The term ``State'' is also broadly defined to include United 
States territories, possessions, and the District of Columbia, as well 
as the 50 states. This definition is consistent with available 
registered addresses over the lifetime of the savings bond program.
Requests for Records
    Subsection 323.11(b) of the proposed regulations provides that each 
state may request the applicable savings bond records from Fiscal 
Service. Upon request, the state must enter into an information-sharing 
agreement with Fiscal Service to receive and access the requested 
records. This agreement would require a state to make representations 
regarding protecting the savings bond records from disclosure, 
including security requirements for receiving and storing the records. 
These security requirements are necessary to minimize the risk of 
misuse or misappropriation of information or fraudulent activity.
Use of Records
    Subsection 323.11(c) of the proposed regulations outlines how the 
records or information contained therein may be used by states, in 
compliance with the SECURE Act. As stated at 31 U.S.C. 3105(f), 
Treasury regulations are required to ensure that applicable savings 
bond information provided to a state will be used solely to carry out 
the purpose of locating the owner of the savings bond.\8\ In accordance 
with this statutory requirement, the proposed regulation provides that 
the applicable savings bond information cannot be used to escheat bond 
ownership to state. Treasury has determined that the use of the 
applicable savings bond information for this purpose would be an 
unauthorized use of the information under the SECURE Act. The purpose 
of the SECURE Act is for Treasury to provide the information regarding 
applicable savings bonds to states to assist Treasury in locating the 
owner of the bonds. The SECURE Act does not allow the states to use the 
provided bond records and information to escheat the bonds, which would 
strip the bond owners of any rights to the redemption or continued 
ownership of their savings bonds.
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    \8\ 31 U.S.C. 3105(f)(2).
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    Under the proposed regulation, in order to protect the savings bond 
owner's privacy, any applicable savings bond information provided to 
states cannot be released to the public or any third party without 
Fiscal Service's express written approval. This requirement will also 
be incorporated into the information-sharing agreement described above. 
The requirement to obtain such approval from Fiscal Service is also 
intended to ensure that the release of savings bond records or the 
information therein does not subject Fiscal Service customers to fraud 
risk. In recent years, Fiscal Service has taken steps that have reduced 
the opportunities for fraud. However, Fiscal Service believes that 
making records of matured, unredeemed savings bonds available to the 
public would create an unacceptable risk of fraud. Fiscal Service will 
continue to monitor savings bond fraud and consider implementing 
further risk-mitigation strategies, which may eventually allow for 
certain savings bonds records to be distributed publicly.
    Finally, under proposed section 323.11(c), Treasury will not be 
responsible for any loss, liability, cost, or expense that results from 
a state's misuse or distribution of records regarding applicable 
savings bonds or any information contained therein. Any breach of 
savings bond records or information provided to a state under the 
proposed regulations could result in fraudulent activity, breach of 
privacy for a savings bond owner, and financial loss for bond owners. 
The proposed regulations require each state that receives information 
under the proposed regulations to bear the responsibility for any costs 
associated with the state's misuse or distribution of, or failure to 
adequately protect, any records or information.

III. Request for Comments

    We invite interested persons to submit comments on any aspect of 
the proposed regulation, including the following questions:
    1. How would you expect your savings bond information to be used by 
the states?
    2. How would you expect your savings bond information to be 
protected by the states?
    3. Do you have any specific fraud-related concerns?
    4. Are the proposed requirements related to the terms under which 
Treasury would share information with states reasonable? Should any 
further requirements applicable to states be added, either in the 
regulation or in the proposed information-sharing agreement, to fulfill 
the statutory purposes or the objectives described above?

IV. Procedural Requirements

A. Request for Comment on Plain Language

    Executive Order 12866 requires each agency in the Executive branch 
to write regulations that are simple and easy to understand. We invite 
comments on how to make the proposed rule clearer. For example, you may 
wish to discuss: (1) whether we have organized the material to suit 
your needs; (2) whether the requirements of the rule are clear; or (3) 
whether there is something else we could do to make the rule easier to 
understand.

B. Executive Order 12866

    This proposed rule is not a significant regulatory action as 
defined in E.O. 12866, dated September 30, 1993, as amended.

C. Administrative Procedure Act (APA)

    Because this proposed rule relates to United States securities, 
which are contracts between Treasury and the owner of the security, 
this rule falls within the contract exception to the APA, 5 U.S.C. 
553(a)(2). Treasury is voluntarily seeking public comment to assist the 
agency in assessing the impact of the proposed rule.

D. Regulatory Flexibility Act

    This proposed rule relates to matters of public contract and 
procedures for United States securities. Since a notice of proposed 
rulemaking is not required, the provisions of the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq., do not apply. This rule will not 
have a significant economic impact on a substantial number of small 
entities. Treasury is voluntarily seeking public comments in order to 
consider a range of views on records sharing before issuing the final 
rule.

E. Paperwork Reduction Act

    The provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et 
seq., and its implementing regulations, 5 CFR part 1320, do not apply 
to this proposed rule because there are no new or revised recordkeeping 
or reporting requirements.

List of Subjects in 31 CFR Part 323

    Archives and records, Freedom of information, Privacy, Savings 
bonds.

    Accordingly, for the reasons set forth in the preamble, Treasury 
proposes to amend title 31 part 323 of the Code of Federal Regulations 
as follows:

[[Page 74389]]

PART 323--DISCLOSURE OF RECORDS

0
1. The authority citation for part 323 continues to read as follows:

    Authority: 80 Stat. 379; sec. 3, 60 Stat. 238, as amended; 5 
U.S.C. 201, 552.

0
2. Add subpart A before Sec.  323.1;
0
3. Revise the first sentence of Sec.  323.1; and
0
4. Add subpart B after Sec.  323.5.
    The additions and revision read as follows:

PART 323--DISCLOSURE OF RECORDS

    Authority:  80 Stat. 379; sec. 3, 60 Stat. 238, as amended; 5 
U.S.C. 201, 552.

Subpart A--Freedom of Information Act

    Authority: 80 Stat. 379; sec. 3, 60 Stat. 238, as amended; 5 
U.S.C. 201, 552.


Sec.  323.1  Purpose of regulations

    The regulations of this subpart are issued to implement 5 U.S.C. 
552(a)(2) and (3). * * *
* * * * *

Subpart B--SECURE 2.0 Act of 2022

Sec.
323.10 Purpose of Subpart.
323.11 Rules governing sharing of applicable savings bond 
information with states.

    Authority:  31 U.S.C. 3105(f).


Sec.  323.10  Purpose of Subpart

    The regulations of this subpart are issued to implement the SECURE 
Act 2.0 of 2022, 31 U.S.C. 3105(f). The requirements of 31 U.S.C. 
3105(f) are additionally met through the publication of a new Routine 
Use in the applicable Fiscal Service System of Record Notice.


Sec.  323.11  Rules governing sharing of applicable savings bond 
information with states.

    (a) Definitions. For purposes of this section:
    Applicable address has the meaning set forth in 31 U.S.C. 
3105(f)(1)(C).
    Applicable savings bond has the meaning set forth in 31 U.S.C. 
3105(f)(6).
    Last-known address means the full street address, if available, 
found after a reasonable search of Fiscal Service records.
    Name means the full registered name of the owner, co-owner, or 
beneficiary of an applicable savings bond, as it appears on the savings 
bond inscription.
    Record means data or documentation, whether in paper, digital, or 
other electronic form, containing or composed of information describing 
any applicable savings bond which has an applicable address within a 
state, including the name and registered address or last-known address 
of the registered owner, co-owner, or beneficiary, as further defined 
in 31 U.S.C. 3105(f)(1).
    Registered address means the address included in the savings bond 
inscription.
    State means the fifty states, the District of Columbia, American 
Samoa, the Federated States of Micronesia, Guam, the United States 
Virgin Islands, the Marshall Islands, the Commonwealth of the Northern 
Mariana Islands, Palau, and the Commonwealth of Puerto Rico.
    (b) Requests for records. Records will be made available to states 
in compliance with 31 U.S.C. 3105(f) and this subpart, upon request by 
a state to Fiscal Service. Prior to receiving access to records, each 
state, through an authorized state representative, must enter into an 
information-sharing agreement with Fiscal Service using a form that 
will be provided by Fiscal Service. Such agreements may contain, among 
other things, requirements that Treasury deems necessary or appropriate 
to ensure the security of the information.
    (c) Use of records. Any records or any information made available 
to a state under this subpart (1) must be used only for the purpose of 
locating the owner of an applicable savings bond, (2) must not be used 
to escheat savings bond ownership to a state, and (3) must not be 
released by a state to the public or any third party, unless explicitly 
approved in writing, in advance, by Treasury.
    (d) Liability. Treasury is not liable for any loss, liability, 
cost, or expense that may result from a state's receipt, use, or 
distribution of records or any information contained therein. A state 
receiving records under this subpart shall indemnify Treasury for any 
loss, liability, cost, or expense associated with the state's receipt, 
use, or distribution of, or failure to adequately protect, records or 
any information contained therein.

    By the Department of the Treasury.
David Lebryk,
Fiscal Assistant Secretary.
[FR Doc. 2023-23314 Filed 10-30-23; 8:45 am]
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