04-15607. U.S. Treasury Securities-State and Local Government Series

AGENCY:

Bureau of the Public Debt, Fiscal Service, Treasury.

ACTION:

Interim rule with request for comments.

SUMMARY:

The Department of the Treasury (Treasury) is issuing an interim rule that updates the method by which owners of State and Local Government Series (SLGS) securities will obtain access to SLGSafe^SM. SLGSafe is a secure Internet site where customers subscribe for SLGS securities.

DATES:

Effective date August 11, 2004. To be considered, comments must be received on or before July 27, 2004.

ADDRESSES:

You may submit comments, identified by Docket Number BPD-01-04, by any of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
• Agency Web site: http://www.publicdebt.treas.gov.
• E-mail: [e-mail].
• Fax: [phone].
• Mail: Elizabeth Spears, Senior Attorney, Office of the Chief Counsel, Bureau of the Public Debt, Department of the Treasury, P.O. Box 1328, Parkersburg, WV 26106-1328.
• Hand Delivery/Courier: Elizabeth Spears, Senior Attorney, Office of the Chief Counsel, Bureau of the Public Debt, Department of the Treasury, 200 3rd St., G-15, Parkersburg, WV 26106-1328.

Instructions: All submissions received must include “Bureau of the Public Debt,” and Docket Number BPD-01-04. All comments received will be posted without change to http://www.publicdebt.treas.gov.

FOR FURTHER INFORMATION CONTACT:

Edward Gronseth, Deputy Chief Counsel, or Elizabeth Spears, Senior Attorney, Office of the Chief Counsel, Bureau of the Public Debt, 200 3rd St., G-15, Parkersburg, WV 26106-1328, [phone], [e-mail].

SUPPLEMENTARY INFORMATION:

I. Introduction

Treasury is improving the method by which holders of State and Local Government Series (SLGS) securities will gain access to SLGSafe. We will replace the current Public Key Infrastructure (PKI) technology, which requires you to load a digital certificate on your personal computer, with log-on information, such as a Personal Identification Number (PIN) and password, which enables remote access to your SLGSafe portfolio regardless of your physical location.

In the May 5, 2004, Quarterly Refunding Statement, Treasury announced proposed regulatory changes pertaining to trading activities. These changes will be published in a proposed rule that will be issued at a later date.

This interim rule revises the following provisions:

Section 344.3(c)(2)—Because digital certificates will no longer be issued, we deleted the reference to “Public Debt's Certificate Practice Statement.”

Section 344.3(c)(3), (e)—We changed the name of the “SLGSafe Internet User's Guide” to the “SLGSafe User's Manual.”

Section 344.3(f)(2), (3)—Under the current regulations, before an organization can obtain access to SLGSafe, a SLGSafe Access Administrator, and a backup administrator, must be appointed. The SLGSafe Application for Internet Access, PD F 4144-5 E, explains that the administrators are responsible for designating users, updating user information, renewing digital certificates, and forwarding user acknowledgements to us. Because we are replacing digital certificates with log-on information, it will no longer be necessary for organizations to appoint administrators. Each organization must ensure that only authorized users apply for SLGSafe access.

Section 344.3(g)(1)—Currently, access to SLGSafe is obtained through digital certificates. We are replacing digital certificates with log-on information.

Section 344.3(h)(1)—Currently, users sign an acknowledgement concerning digital certificate use. We are replacing digital certificates with log-on information. Users will be required to submit a signed acknowledgement concerning proper use of log-ons and security requirements.

Section 344.3(h)(4)—We deleted references to Public Debt's Certificate Practice Statement and accompanying Treasury Policy regarding digital certificates.

II. Procedural Requirements

A. Executive Order 12866

This rule is not a significant regulatory action as defined in E.O. 12866, dated September 30, 1993, and is not a major rule under 5 U.S.C. 804. Therefore, a regulatory assessment of anticipated benefits, costs, and regulatory alternatives is not required.

B. Determination To Issue an Interim Final Rule

Because this rule relates to matters of public contract and procedures for United States securities, notice and public procedures are not required by 5 U.S.C. 553. In addition, Treasury finds that there is good cause why notice and public procedures are unnecessary because this rule merely updates the method of accessing SLGSafe in a manner that reduces burdens of using SLGSafe and imposes no substantive requirements on users of SLGSafe. The electronic subscription feature was announced in a Proposed Rule published in the Federal Register 61 FR 39228, 39230, Jul. 26, 1996. The SLGSafe system became operational under an interim rule announced in the Federal Register 65 FR 55399, Sept. 13, 2000.

C. Regulatory Flexibility Act

This rule relates to matters of public contract and procedures for United States securities. The notice and public procedures requirements of the Administrative Procedure Act, 5 U.S.C. 553(a)(2), are inapplicable. Since a notice of proposed rulemaking is not required, the provisions of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., do not apply.

D. Paperwork Reduction Act

This rule does not alter the collection of information previously reviewed and approved by the Office of Management and Budget, under the requirements of the Paperwork Reduction Act, 44 U.S.C. 3507, under control number 1535-0091.

List of Subjects in 31 CFR Part 344

• Bonds
• Government Securities
• Securities

For the reasons set forth in the preamble, we amend 31 CFR part 344 as follows:

PART 344—U.S. TREASURY SECURITIES—STATE AND LOCAL GOVERNMENT SERIES

1. The authority citation for part 344 is revised to read as follows:

Authority: 26 U.S.C. 141 note; 31 U.S.C. 3102, 3103, 3104, and 3121.

2. Amend § 344.3 by revising paragraphs (c), (e), (f), (g)(1), (h)(1), and (h)(4), to read as follows:

§ 344.3

What special provisions apply to SLGSafe Internet transactions?

* * * * *

(c) What special terms and conditions apply to SLGSafe? The following terms and conditions, which are downloadable from Public Debt's website and which may change from time to time, apply to SLGSafe transctions:

(1) SLGSafe Application for Internet Access and SLGSafe User Acknowledgment; and

(2) SLGSafe User's Manual.

* * * * *

(e) What SLGSafe functions can I perform in each role? The role that you play in SLGSafe shall determine the functions that you will be allowed to perform. An explanation of the roles and functions is outlined in the SLGSafe User's Manual.

(f) How do I apply for access to SLGSafe? You must apply for SLGSafe access before performing any Internet functions. To apply for SLGSafe Internet access, you must:

(1) Submit to Public Debt a completed form, PD F 4144-5, SLGSafe Application for Internet Access;

(2) Certify that the information on the SLGSafe Application is accurate;

(3) Certify that you are authorized to perform the requested roles; and

(4) Await our written approval of your SLGSafe Application before you, or anyone acting on your behalf, uses an electronic connection to access any of our services or to send any electronic messages.

(g) * * *

(1) Issue log-on information to each user that is authorized on your approved application; and

* * * * *

(h) * * *

(1) Sign, and send to Public Debt, a User Acknowledgement regarding the use of log-on information;

* * * * *

(4) Agree that we may act on any electronic message to the same extent as if we had received a written instruction bearing the signature of your duly authorized officer;

* * * * *

Dated: July 2, 2004.

Donald V. Hammond,

Fiscal Assistant Secretary.