[Federal Register Volume 65, Number 216 (Tuesday, November 7, 2000)]
[Proposed Rules]
[Pages 66671-66672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-28579]



[[Page 66671]]

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DEPARTMENT OF THE TREASURY

Financial Management Service

31 CFR Part 205


Public Meetings on Proposed Revisions to the Regulations 
Implementing the Cash Management Improvement Act

AGENCY: Financial Management Service, Fiscal Service, Treasury.

ACTION: Notice of public meetings.

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SUMMARY: On October 12, 2000 the Financial Management Service (FMS) 
published a notice of proposed rule making (NPRM) to revise the 
regulations at 31 CFR Part 205 implementing the Cash Management 
Improvement Act of 1990 (65 FR 60796). These regulations govern the 
transfer of funds between the Federal Government and States for certain 
Federal assistance programs. As a next step in the process, FMS is 
holding public meetings to seek input on all aspects of the NPRM. All 
parties in attendance may give a prepared statement and/or raise 
questions in the meetings.

DATES: The public meetings will be held on November 30, 2000 in San 
Francisco, CA and on December 8, 2000 in Washington, DC. Persons 
desiring to attend must register by November 22, 2000. See 
supplementary information section on how to register.

ADDRESSES: The first meeting will be held in San Francisco at FMS' San 
Francisco Regional Financial Center, 390 Main Street, in Conference 
Rooms A 7 B on the 6th Floor at 10 a.m. (PST).
    The second meeting wil be held in Washington, DC at the General 
Services Administration Building, 7th and D Streets (SW), in the GSA 
Auditorium at 10 a.m. (EST).

FOR FURTHER INFORMATION CONTACT: Oscar S. Ona, at (202) 874-6799, 
Martha Thomas Mitchell, at (202) 874-6757, or Matt Helfrich, at (202) 
874-6754.

SUPPLEMENTARY INFORMATION:

Background

    The Cash Management Improvement Act (CMIA) was enacted to create 
greater efficiency and equity in the exchange of funds between the 
Federal Government and the States. Prior to the enactment of CMIA, 
Federal agencies expressed concerns that States were drawing down funds 
well in advance of the time those funds were needed by the States. 
States, on the other hand, expressed concerns about having to pay out 
their own funds in advance of receiving funds from the Federal 
Government.
    CMIA, which requires the heads of executive agencies to provide for 
the timely disbursement of Federal funds in accordance with regulations 
prescribed by the Secretary of the Treasury, has three major provisions 
designed to address these issues:
    <bullet> States and Federal agencies must minimize the time between 
transfer of funds from the U.S. Treasury and the clearance of funds out 
of the accounts of a State.
    <bullet> The Secretary of the Treasury shall enter into a Treasury-
State Agreement with each State which specifies the funds transfer 
procedures for Federal assistance programs.
    <bullet> In general, States and the Federal Government are 
respectively entitled to interest when the other fails to make a funds 
transfer in a timely fashion. States owe the Federal Government 
interest for the time Federal funds are in State accounts before they 
are spent for Federal assistance program purposes. The Federal 
Government owes a State interest if the State disburses its own funds 
with obligational authority before receiving Federal funds.
    The notice of proposed rule making (NPRM) updates the existing 
regulation based upon eight years of program implementation experience 
(since the issuance of Part 205) on the part of States, Federal program 
agencies, the General Accounting Office and the Department of the 
Treasury. The concerns of all stakeholders were considered in drafting 
the NPRM. The proposed changes are:
    <bullet> The NPRM raises the default dollar thresholds that 
determine which programs are subject to CMIA's interest provisions. 
This allows States to make fewer programs subject to subpart A of the 
rule, reducing the administrative burden of tracking smaller dollar 
volume programs, but retaining coverage of the large dollar programs. A 
State retains the option of retaining or expanding program coverage by 
applying a lower dollar threshold amount.
    <bullet> The NPRM makes Treasury-State Agreements (TSAs) effective 
until terminated instead of being valid for one to five years. This 
provision enables FMS and States to smooth the high-volume 
renegotiation process that exists due to 47 States sharing July 1 as 
the first day of the fiscal year. By reducing the number of 
renegotiations each year, FMS and States can focus resources on 
efficient CMIA implementation.
    <bullet> The NPRM eliminates restrictions on allowable funding 
techniques. States and FMS can agree to any funding technique that 
meets certain requirements, including reimbursable funding.
    <bullet> The CMIA provides that a State is entitled to interest if 
it disburses its own funds for program purposes in accordance with 
Federal law, Federal regulation, or Federal-State agreement. Some 
agencies require States to obtain agency approval of certain 
expenditures. Those requirements may be set forth in a Federal law, 
Federal regulation, or Federal-State Agreement. The NPRM requests 
comment on the nature and operation of agency approval requirements 
that currently are in place.
    <bullet> The NPRM proposes that funds transfers requested by States 
and later allowed by Federal agencies for program reasons by subject to 
the interest provisions of CMIA. Disallowed fund transfers are not 
addressed by the current CMIA regulation. The NPRM specifically seeks 
comment on the implementation of this provision.
    <bullet> The NPRM incorporates previously issued Policy Statements 
into the regulation. Over the past seven years, FMS has issued a number 
of Policy Statements clarifying proper CMIA implementation. This draft 
integrates the relevant Policy Statements into the body of the 
regulation. Outdated Policy Statements have been discarded.
    <bullet> The NPRM raises the refund transaction exemption threshold 
to $50,000 (from $10,000). Adequate coverage will be maintained and the 
administrative burden of tracking small dollar amounts will be 
eliminated.
    <bullet> The NPRM requires that all transfers of Federal funds be 
conducted in accordance with the Debt Collection Improvement Act (DCIA) 
of 1996. All Federal funds transactions must be conducted via 
Electronic Funds Transfer (EFT).
    <bullet> The NPRM has been reformatted in accordance with the 
Administration's ``Plan Language'' Executive Memorandum issued on June 
1, 1998. The regulation has been rewritten in a manner to make it 
easier to understand.
    How to Register: Any person desiring to attend either of the two 
public meetings must register for the meetings by November 22, 2000. 
Requests to present a prepared statement at the public meetings should 
be made at the time of registration. This request should include the 
topic(s) which will be addressed, along with a brief description of the 
statement.
    Any restrictions on the length of the prepared statement will 
depend on the number of requests received. The FMS staff will 
acknowledge receipt of requests to present a prepared statement and 
will inform participants of the schedule for presentation.

[[Page 66672]]

    Registration for both public meetings can be completed through the 
Internet. The CMIA webpage, found http://www.fms.treas.giv/policymia, 
will provide an online registration form, allowing all interested 
parties to register for either public meeting. Registration can also be 
done by any of the following means: via email by sending your request 
to <a href="/cdn-cgi/l/email-protection#f0939d99918399979e8580b0969d83de8482959183de979f86"><span class="__cf_email__" data-cfemail="41222c28203228262f343101272c326f35332420326f262e37">[email protected]</span></a>; by facsimile transmission to fax number 
(202) 874-6965; by phone by calling Martha Thomas Mitchell at (202) 
874-6757 or Oscar S. Ona at (202) 874-6799; by written request sent to 
Martha Thomas Mitchell-Public Meetings, Cash Management Policy and 
Planning Division, Financial Management Service, U.S. Department of the 
Treasury, Room 404F, 401 14th Street, SW, Washington, DC 20227, or hand 
delivered on business days between 9:00 a.m. and 5:00 p.m.
    Please be sure to include your name and contact phone number, which 
meeting you will attend, and the organization or agency you represent.
    Requests to present a prepared statement at either meeting should 
be made at the time of registration. The online registration form will 
provide a field to specify whether you would like to participate. The 
topic to be addressed in the testimony should be disclosed, as well as 
a brief description of issues which will be discussed. Requests to 
present a statement should also be disclosed in conjunction with 
registration via email, fax, mail, or telephone.
    Please notify Oscar S. Ona, at (202) 874-6799 by November 22, 2000 
if auxiliary aids or services are needed, including an interpreter or 
handicapped access.

    Dated: November 2, 2000.
Bettsy Lane,
Assistant Commissioner, Federal Finance Financial Management Service.
[FR Doc. 00-28579 Filed 11-6-00; 8:45 am]
BILLING CODE 4810-35-M


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