Management of Federal Agency Disbursements

Chapter 10 of the Omnibus Consolidated Rescission and Appropriations Act of 1996, Pub. L. 104-134, is the Debt Collection Improvement Act of 1996 (the ``Act''). Section 31001(x) of the Act amends 31 U.S.C. 3332 to require Federal agencies to convert from checks to electronic funds transfer in two phases. Phase one affects newly-eligible recipients of Federal payments. During phase one, which begins on July 26, 1996, all recipients of Federal payments (other than payments under the Internal Revenue Code of 1986) who become eligible to receive those payments on or after July 26, 1996, must receive them electronically unless the recipient certifies that the recipient does not have an account at a financial institution or authorized payment agent. Phase two covers the conversion from checks to electronic funds transfer for all Federal payments, except payments under the Internal Revenue Code. The Act provides that, subject to the Secretary of the Treasury's authority to grant waivers, all Federal payments made after January 1, 1999, must be made by electronic funds transfer. The Financial Management Service (the ``Service'') is adopting an interim rule to implement Section 3332(e), as amended. The Service invites public comments on the interim rule and on issues related to implementation of the requirements that take effect on January 1, 1999. This interim rule is designated as 31 CFR Part 208. The Service anticipates that Part 208 will contain all provisions relating to the management of Federal agency disbursements. Currently, 31 CFR Part 206 contains several provisions governing the timely collection and disbursement of funds by Federal agencies. When regulations are issued, sometime in 1997, to implement phase two, the Service will move those portions of Part 206 that deal with Federal agency disbursements into the new Part 208. In addition, all provisions relating to collections by Federal agencies will be revised and consolidated into Part 206.