Cash Management Improvement Act of 1990
PL 101-453 (H.R.4279), enacted 10/24/1990

104 STAT. 1058 
PUBLIC LAW 101-453—OCT. 24, 1990 
Public Law 101-453 
101st Congress 
An Act 
Oct. 24, 1990 
[H.R. 4279] 
Cash 
Management 
Improvement 
Act of 1990. 
31 u s e 6501 
note. 
31 u s e 6501 
note. 
Regulations. 
To amend title 31, United States Code, to improve cash management of funds 
transferred between the Federal Government and the States, and for other 
purposes. 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the "Cash Management Improvement 
Act of 1990". 
SEC. 2. PURPOSE. 
The purpose of this Act is to ensure greater efficiency, effective-
ness, and equity in the exchange of funds between the Federal 
Government and the States. 
SEC. 3. TECHNICAL AMENDMENTS. 
Section 6501 of title 31, United States Code, is amended— 
(1) in paragraph (2)(B) by striking "subclause (A) of this clause 
(2)" and inserting in lieu thereof "subparagraph (A)"; 
(2) in paragraph (2)(E) by striking "subclauses (A)-(D) of this 
clause (2)" and inserting in lieu thereof "subparagraphs (A), (B), 
(C), and (D)"; 
(3) in paragraph (4)(A) by striking "subclause (C) of this clause 
(4)" and inserting in lieu thereof "subparagraph (C)"; and 
(4) in paragraph (4)(B) by striking "subclause (C) of this clause 
(4)" and inserting in lieu thereof "subparagraph (C)". 
SEC. 4. DISBURSEMENT OBJECTIVES. 
(a) IN GENERAL.—Subchapter II of chapter 33 of title 31, United 
States Code, is amended by adding at the end thereof the following: 
"§ 3335. Timely disbursement of Federal funds 
"(a) Each head of an executive agency (other than the Tennessee 
Valley Authority) shall, under such regulations as the Secretary of 
the Treasury shall prescribe, provide for the timely disbursement of 
Federal funds through cash, checks, electronic funds transfer, or 
any other means identified by the Secretary. 
"(b) The Secretary may collect from any executive agency which 
does not comply with subsection (a) a charge in an amount the 
Secretary determines to be the cost to the general fund of the 
Treasury caused by such noncompliance. 
"(c) The amounts of charges collected from an executive agency 
under this section shall be deposited in the Treasury and credited as 
miscellaneous receipts. 
"(d) Any charge assessed by the Secretary under this section, to 
the maximum extent practicable— 
"(1) shall be paid out of appropriations available for executive 
agency operations; and 
49-139 O - 90 (453) 
PUBLIC LAW 101-453—OCT. 24, 1990 
104 STAT. 1059 
"(2) shall not be paid from amounts available for funding 
programs of an executive agency.". 
(b) CLERICAL AMENDMENT.—The chapter analysis for chapter 33 of 
title 31, United States Code, is amended by inserting after the item 
relating to section 3334 the following: 
"3335. Timely disbursement of Federal funds.". 
(c) REGULATIONS.—The Secretary of the Treasury shall prescribe 
31 use 3335 
regulations under section 3335 of title 31, United States Code, as "°*®-
added by subsection (a), to ensure the full implementation of that 
section by the date which is 2 years after the date of the enactment 
of this Act. 
SEC. 5. PAYMENT OF INTEREST. 
(a) DEFINITION OF STATE.—Section 6501 of title 31, United States 
Code, is amended— 
(1) by redesignating paragraphs (7), (8), and (9) as paragraphs 
(8), (9), and (10), respectively; 
(2) by inserting after paragraph (6) the following new para-
graph: 
"(7) 'Secretary' means the Secretary of the Treasury."; and 
(3) by striking out paragraph (9) (as redesignated by para-
graph (D) and inserting in lieu thereof the following: 
"(9) 'State' means a State of the United States, the District of 
Columbia, a territory or possession of the United States, and an 
agency, instrumentality, or fiscal agent of a State but does not 
mean a local government of a State.". 
(b) INTERGOVERNMENTAL TRANSFERS OF FUNDS; PAYMENT OF IN-
TEREST.—Section 6503 of title 31, United States Code, is amended to 
read as follows: 
"§ 6503. Intergovernmental Hnancing 
"(a) Consistent with program purposes and with regulations of the 
Secretary, and in accordance with an agreement under subsection 
(b) entered into by the Secretary and a State— 
"(1) the head of an executive agency (other than the Ten-
nessee Valley Authority) carrying out a program shall schedule 
transfers of funds to the State under the program so as to 
minimize the time elapsing between transfer of funds from the 
United States Treasury and the issuance or redemption of 
checks, warrants, or pa3rments by other means by a State; and 
"(2) the State shall minimize the time elapsing between trans-
fer of funds from the United States Treasury and the issuance 
or redemption of checks, warrants, or payments by other means 
for prc^ram purposes. 
"Ot)Xl) The Secretary shall enter into an agreement with each Government 
State to which transfers of funds are made, which establishes proce- contracts, 
dures and requirements for implementing this section. 
"(2) An agreement under this subsection shall— 
"(A) specify procedures chosen by the State for carrsdng out 
transfers of funds under the agreement; 
"(B) describe the process by which the Federal Government 
shall review and approve the implementation of the procedures 
specified under subparagraph (A); 
"(C) establish the methods to be used for calculating and 
documenting payments of interest pursuant to this section; and 
104 STAT. 1060 
PUBLIC LAW 101-453—OCT. 24, 1990 
"(D) specify those types of costs directly incurred by the State 
for interest calculations required under this section, and require 
the Secretary to consider those costs in computing payments 
under this section. 
Regulations. 
"(3) The Secretary shall issue regulations establishing procedures 
and requirements for implementing this section with respect to a 
State with which no agreement is entered into by the Secretary 
under paragraph (1). Such regulations shall apply to a State until 
such time as the Secretary enters into an agreement with the State 
under paragraph (1). 
Regulations. 
"(c)(1) The Secretary shall issue regulations that shall require a 
State, when not inconsistent with program purposes, to pay interest 
to the United States on funds from the time funds are deposited by 
the United States to the State's account until the time that funds 
are paid out by the State in order to redeem checks or warrants or 
make payments by other means for program purposes. Except as 
provided under paragraph (3)(B) (relating to the Unemployment 
Trust Fund), the interest payable under this subsection shall be 
calculated at a rate equal to the average of the bond equivalent 
rates of 13-week Treasury bills auctioned during the period for 
which interest is calculated, as determined by the Secretary. 
"(2) Except as provided in paragraph (3), amounts received by the 
United States as payment of interest under this subsection shall be 
deposited in the Treasury and credited as miscellaneous receipts. 
"(3)(A) Amounts paid by a State under paragraph (1) as interest on 
funds paid to a State from a trust fund for which the Secretary is 
the trustee shall be credited to such trust fund. 
"(B) Notwithstanding any other provision of this section, amounts 
of interest paid by a State, on funds drawn from its account in the 
Unemployment Trust Fund, shall be deposited into that account and 
shall consist of actual interest earnings by the State, less related 
banking costs incurred by the State, for the period for which interest 
is calculated. 
"(d)(1) If a State disburses its own funds for program purposes in 
accordance with Federal law, Federal regulation, or Federal-State 
agreement, the State shall be entitled to interest from the time the 
State's funds are paid out to redeem checks or warrants, or make 
payments by other means, until the Federal funds are deposited to 
the State's bank account. The Secretary shall pay, out of any money 
in the Treasury not otherwise appropriated, such amounts as may 
be necessary for interest owed to a State under this subsection. Such 
interest shall be calculated, at a rate equal to the average of the 
bond equivalent rates of 13-week Treasury bills auctioned during 
the period for which interest is calculated, as determined by the 
Secretary. 
"(2) If interest is paid under this subsection as a result of a State 
disbursing its own funds before receiving payment from a trust fund 
for which the Secretary of the Treasury is the trustee, such interest 
shall be charged against such trust fund. 
"(e) The budget submitted by the President under section 1105 of 
this title for a fiscal year shall include a statement specifying, for 
the most recently completed fiscal year, amounts of interest accrued 
to the Federal Government under subsection (c) and amounts of 
interest paid to States under subsection (d). 
"(f) If a State receives refunds of funds disbursed by the State 
under a Federal program, the State shall return those refunds to the 
Federal executive agency administering the program or apply those 
PUBLIC LAW 101-453—OCT. 24, 1990 
104 STAT. 1061 
refunds to reduce the amount of funds owed by the Federal Govern-
ment to the State under such program. Interest earned on such 
refunds shall be considered when setting overall interest obligations 
between the State and the Federal Government as required by this 
section. 
"(g) If the Federal Government makes a payment to a recipient 
under a Federal program, and a portion of the payment is an 
amount which the Federal Government is paying to such recipient 
on behalf of a State, such amount shall be considered to be a 
transfer of funds between the Federal Government and the State for 
purposes of this section. 
"(h) A State may not be required by a law or regulation of the 
United States to deposit funds received by it in a separate bank 
account. However, a State shall account for funds made available to 
the State as United States Government funds in the accounts of the 
State. The head of the State agency concerned shall make periodic 
authenticated reports to the head of the appropriate Federal execu-
tive agency on the status and the application of the funds, the 
liabilities and obligations on hand, and other information required 
by the head of the executive agency. Records related to the funds 
received by the State shall be made available to the head of the 
executive agency, the Inspector General of the executive agency, 
and the Comptroller General for necessary audits. 
"(i) The Secretary shall prescribe methods for the payment of 
interest under this section between the Federal Government and the 
States, including provisions for offsetting amounts owed by the 
respective parties. Such methods of payment shall require payment 
of interest on an annual basis and shall provide for comparable 
treatment in manner, technique, and timing for both the States and 
the Federal Government. 
"(j) Consistent with Federal program purposes and regulations of 
the Director of the Office of Management and Budget, the head of a 
Federal executive agency carrying out a program shall execute 
grant awards to States on a timely basis to assure the availability of 
funds to accomplish transfers in compliance with subsection (a) of 
this section.". 
(c) CLERICAL AMENDMENT.—The item relating to section 6503 in 
the chapter analysis for chapter 65 of title 31, United States Code, is 
amended to read as follows: 
"6503. Intergovernmental financing.". 
(d) AGREEMENTS WITH STATES.— 
(1) SECRETARY'S EFFORTS TO ENTER AGREEMENTS.—The Sec-
retary of the Treasury shall make all reasonable efforts to enter 
into an agreement with each State under section 6503(b) of title 
31, United States Code, as added by this section (relating to 
procedures and requirements for transfers of funds between 
executive agencies and States), by not later than 2 years after 
the date of the enactment of this Act. 
(2) EFFECTIVE DATE OF REGULATIONS.—Regulations issued by 
the Secretary of the Treasury under subsection (b)(3) of section 
6503 of title 31, United States Code, as added by the section 
(relating to procedures and requirements for transfers of funds 
involving States not entering agreements), shall take effect 2 
years after the date of the enactment of this Act. 
(e) EFFECTIVE DATE.—The amendments made by this section shall 
take effect on the date of enactment of this Act, except that subsec-
Reports. 
Records. 
31 use 6503 
note. 
31 u s e 6503 
note. 
104 STAT. 1062 
PUBLIC LAW 101-453—OCT. 24, 1990 
tions (c) and (d) of section 6503 of title 31, United States Code, as 
added by subsection (b) of this section (relating to payments of 
interest between the Federal Government and State governments), 
shall take effect 2 years after the date of enactment of this Act. 
31 u s e 6503 
SEC. 6. GAO REPORT. 
Four years after the date of the enactment of this Act the 
Comptroller General shall submit an audit of the implementation of 
the amendments made by section 5 and submit a report to the 
Congress describing the results of that audit. 
Approved October 24, 1990. 
LEGISLATIVE HISTORY—H.R. 4279 (S. 926): 
HOUSE REPORTS: No. 101-696 (Comm. on Government Operations). 
CONGRESSIONAL RECORD: 
Vol. 135 (1989): Aug. 24, S. 926 considered and passed Senate. 
Vol. 136 (1990): Sept. 24, H.R. 4279 considered and passed House. 
Oct. 10, considered and passed Senate.