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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 [www.gpo.gov]
[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 
[email protected], or Rebecca Saltiel, Senior 
Counsel, at (202) 874-6648 or [email protected].

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 GoDirect.gov 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 https://tfm.fiscal.treasury.gov/v1/p4/ac200/. 
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 GoDirect.gov 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:
     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));
     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);
     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
     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 https://tfm.fiscal.treasury.gov/v1/p4/ac200/. 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 
GoDirect.gov. 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]
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