§ 6503. — Intergovernmental financing.
[Laws in effect as of January 7, 2003]
[Document not affected by Public Laws enacted between
January 7, 2003 and December 19, 2003]
[CITE: 31USC6503]
TITLE 31--MONEY AND FINANCE
SUBTITLE V--GENERAL ASSISTANCE ADMINISTRATION
CHAPTER 65--INTERGOVERNMENTAL COOPERATION
Sec. 6503. Intergovernmental financing
(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 Tennessee
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 payments by
other means by a State; and
(2) the State shall minimize the time elapsing between transfer
of funds from the United States Treasury and the issuance or
redemption of checks, warrants, or payments by other means for
program purposes.
(b)(1) The Secretary shall enter into an agreement with each State
to which transfers of funds are made, which establishes procedures and
requirements for implementing this section.
(2) An agreement under this subsection shall--
(A) specify procedures chosen by the State for carrying 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
(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.
(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).
(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
refunds to reduce the amount of funds owed by the Federal Government 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 executive 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.
(Pub. L. 97-258, Sept. 13, 1982, 96 Stat. 1007; Pub. L. 101-453,
Sec. 5(b), Oct. 24, 1990, 104 Stat. 1059.)
Historical and Revision Notes
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Revised Section Source (U.S. Code) Source (Statutes at Large)
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6503(a).............................. 42:4213. Oct. 16, 1968, Pub. L. 90-577, Secs.
202, 203, 82 Stat. 1101.
6503(b).............................. 42:4212.
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In the section, the words ``executive agency'' are substituted for
``Federal departments and agencies'' because of the definition in
sections 102 and 6501(3) of the revised title.
In subsection (a), the word ``money'' is substituted for ``funds''
for consistency in the section. The words ``so as'' and ``United
States'' are omitted as surplus. The words ``before or after'' are
substituted for ``prior to or subsequent to'' for consistency. The words
``subsequent to such transfer of funds'' are omitted as unnecessary the
second time they are used.
In subsection (b), the words ``apart from other funds administered
by the state'', ``properly'', ``In each case'', and ``examination'' are
omitted as unnecessary. The word ``money'' is substituted for ``all
federal grant-in-aid funds'' for consistency in the section. The words
``United States Government grant money'' are substituted for ``Federal
funds'' for consistency in the revised title. The word ``make'' is
substituted for ``render'', the word ``periodic'' is substituted for
``regular'', and the word ``information'' is substituted for ``facts'',
for clarity. The words ``or any of their duly authorized
representatives'' are omitted as unnecessary. The words ``Records shall
be made available to . . . for auditing'' are substituted for ``shall
have access for the purpose of audit and examination to any books,
documents, papers, and records'' for consistency in the revised title
and with other titles of the United States Code.
Amendments
1990--Pub. L. 101-453 amended section generally, substituting
provisions relating to intergovernmental financing for provisions
relating to transfer and deposit requirements.
Effective Date of 1990 Amendment
Section 5(e) of Pub. L. 101-453, as amended by Pub. L. 102-589,
Sec. 2(2)(C), Nov. 10, 1992, 106 Stat. 5133, provided that: ``The
amendments made by this section [amending this section and section 6501
of this title] shall take effect on the date of enactment of this Act
[Oct. 24, 1990], except that subsections (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 on July 1, 1993 or the first day
of a State's fiscal year beginning in 1993, whichever is later.''
Treatment of Compensation or Reimbursement Paid Pursuant to Other Laws
Pub. L. 107-273, div. A, title II, Sec. 204(f), Nov. 2, 2002, 116
Stat. 1776, provided that: ``No compensation or reimbursement paid
pursuant to section 501(a) of Public Law 99-603 [8 U.S.C. 1365(a)] (100
Stat. 3443) or section 241(i) of the Act of June 27, 1952 [8 U.S.C.
1231(i)] (ch. 477) shall be subject to section 6503(d) of title 31,
United States Code, and no funds available to the Attorney General may
be used to pay any assessment made pursuant to such section 6503 with
respect to any such compensation or reimbursement.''
Agreements With States
Section 5(d) of Pub. L. 101-453, as amended by Pub. L. 102-589,
Sec. 2(2)(A), (B), Nov. 10, 1992, 106 Stat. 5133, provided that:
``(1) Secretary's efforts to enter agreements.--The Secretary 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 July 1,
1993 or the first day of a State's fiscal year beginning in 1993,
whichever is later.
``(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 [this] section (relating
to procedures and requirements for transfers of funds involving States
not entering agreements), shall take effect on July 1, 1993 or the first
day of a State's fiscal year beginning in 1993, whichever is later.''
GAO Report
Section 6 of Pub. L. 101-453, as amended by Pub. L. 102-589,
Sec. 2(3), Nov. 10, 1992, 106 Stat. 5133, which directed Comptroller
General, five years after Oct. 24, 1990, to submit an audit of the
implementation of amendments made by section 5 of Pub. L. 101-453 (which
amended this section and section 6501 of this title) and to submit a
report to Congress describing results of that audit, was repealed by
Pub. L. 104-316, title I, Sec. 115(i), Oct. 19, 1996, 110 Stat. 3835.
Section Referred to in Other Sections
This section is referred to in title 42 sections 300w-2, 703, 706,
1397a, 1397e, 8626, 9873, 9906.
