[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR205.25]

[Page 34-35]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
         CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY
 
PART 205--RULES AND PROCEDURES FOR EFFICIENT FEDERAL-STATE FUNDS TRANSFERS--Table of Contents
 
Subpart A--Rules Applicable to Federal Assistance Programs Included in a 
                        Treasury-State Agreement
 
Sec. 205.25  How does this part apply to certain Federal assistance programs or funds?

    (a) Special rules apply to certain Federal assistance programs or 
funds described in this section. To the extent the provisions of this 
section are inconsistent with other provisions of this part, this 
section applies.
    (b) A State's interest liability on funds withdrawn from its account 
in the UTF equals the actual interest earned on such funds less the 
related banking costs. Actual interest earned does not include non-cash 
bank earnings. If funds withdrawn from the State account in the UTF are 
commingled with other funds, a proportionate share of interest earnings 
and banking costs must be allocated to the funds withdrawn from the 
State account. Interest liabilities on funds withdrawn from a Federal 
account in the UTF, except the Federal Unemployment Account, are 
calculated in accordance with Sec. 205.19.
    (c) Supplemental Security Income. (1) Except as provided in 42 
U.S.C. 1382e(d), the Federal government incurs an interest liability 
from the day State

[[Page 35]]

funds are credited to the Federal government's account to the day a 
Federal Program Agency pays out the State funds for Federal assistance 
program purposes. A State incurs an interest liability from the day a 
Federal Program Agency pays out Federal funds for Federal assistance 
program purposes to the day State funds are credited to the Federal 
government's account.
    (2) Interest liability must be calculated on the difference between 
a State's monthly Supplemental Security Income payment and the State's 
actual liability for the month.
    (3) The Federal government will not incur interest liabilities on 
refunds of State funds under the Supplemental Security Income Program.
    (4) Administrative fees charged by the Social Security 
Administration to States under the Supplemental Security Income program 
are not subject to this part.
    (5) Supplemental State payments made in conjunction with 
Supplemental Security Income are not subject to this part.
    (d) Funds collected under the Child Support Enforcement Program. (1) 
Funds collected by States from absent parents pursuant to Title IV-D of 
the Social Security Act are not subject to this part.
    (2) Interest earned by States on undistributed collections must be 
treated as Federal assistance program income under 45 CFR 304.50(b) and 
is not subject to this part.
    (3) Late payment fees collected by States from absent parents are 
not subject to interest liabilities under this part and are not subject 
to this part. However, such fees must be treated as Federal assistance 
program income in accordance with 45 CFR 302.75(b)(6).
    (e) A State that earns interest on Special Supplemental Food Program 
for Women, Infants, and Children rebates is not subject to interest 
liability if the funds earned are used for Federal assistance program 
purposes.
    (f) Revolving Loan Funds. (1) This part applies to any transfer of 
funds from the Federal Program Agency to the State for the Revolving 
Loan Fund.
    (2) This part does not apply to interest a State earns on Revolving 
Loan Funds when Federal Program Agency regulations require that all 
interest earned on invested funds be used for Federal assistance program 
purposes.