
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 31USC3121]

 
                       TITLE 31--MONEY AND FINANCE
 
                   SUBTITLE III--FINANCIAL MANAGEMENT
 
                         CHAPTER 31--PUBLIC DEBT
 
                      SUBCHAPTER II--ADMINISTRATIVE
 
Sec. 3121. Procedure

    (a) In issuing obligations under sections 3102-3104 of this title, 
the Secretary of the Treasury may prescribe--
        (1) whether an obligation is to be issued on an interest-bearing 
    basis, a discount basis, or an interest-bearing and discount basis;
        (2) regulations on the conditions under which the obligation 
    will be offered for sale, including whether it will be offered for 
    sale on a competitive or other basis;
        (3) the offering price and interest rate;
        (4) the method of computing the interest rate;
        (5) the dates for paying principal and interest;
        (6) the form and denominations of the obligations; and
        (7) other conditions.

    (b)(1) Under conditions prescribed by the Secretary, an obligation 
issued under this chapter and redeemable on demand of the owner or 
holder may be used to pay the United States Government for taxes imposed 
by it.
    (2) An obligation of the Government issued after March 3, 1971, 
under law may not be redeemed before its maturity to pay a tax imposed 
by the Government in an amount more than the fair market value of the 
obligation at the time of its redemption. This paragraph does not apply 
to a Treasury bill issued under section 3104 of this title.
    (c) Under conditions prescribed by the Secretary, an obligation 
authorized by this chapter may be issued in exchange for an obligation 
of an agency whose principal and interest are unconditionally guaranteed 
by the Government at or before maturity.
    (d) Under conditions prescribed by the Secretary, the Secretary may 
issue registered bonds in exchange for and instead of coupon bonds that 
have been or may be issued. The registered bonds shall be similar in all 
respects to the registered bonds issued under a law authorizing the 
issue of coupon bonds offered for exchange.
    (e) A decision of the Secretary about an issue of obligations under 
sections 3102-3104 of this title is final.
    (f) The Secretary may accept voluntary services in carrying out the 
sale of public debt obligations.
    (g)(1) In this subsection, ``registration-required obligation'' 
means an obligation except an obligation--
        (A) not of a type offered to the public;
        (B) having a maturity (at issue) of not more than one year; or
        (C) described in paragraph (2) of this subsection.

    (2) An obligation is not a registration-required obligation if--
        (A) there are arrangements reasonably designed to ensure that 
    the obligation will be sold (or resold in connection with the 
    original issue) only to a person that is not a United States person; 
    and
        (B) for an obligation not in registered form--
            (i) interest on the obligation is payable only outside the 
        United States and its territories and possessions; and
            (ii) a statement is on the face of the obligation that a 
        United States person holding the obligation is subject to 
        limitations under the United States income tax laws.

    (3) Every registration-required obligation of the Government shall 
be in registered form. A book entry obligation is deemed to be in 
registered form if the right to principal and stated interest on the 
obligation may be transferred only through a book entry consistent with 
regulations of the Secretary.
    (4) The Secretary shall prescribe regulations necessary to carry out 
this subsection when there is a nominee.
    (h)(1) The Secretary shall prescribe by regulation standards for the 
safeguarding and use of obligations issued under this chapter, and 
obligations otherwise issued or guaranteed as to principal or interest 
by the United States. Such regulations shall apply only to a depository 
institution that is not a government securities broker or a government 
securities dealer and that holds such obligations as fiduciary, 
custodian, or otherwise for the account of a customer and not for its 
own account. Such regulations shall provide for the adequate segregation 
of obligations so held, including obligations which are purchased or 
sold subject to resale or repurchase.
    (2) Violation of a regulation prescribed under paragraph (1) shall 
constitute adequate basis for the issuance of an order under section 
5239(a) or (b) of the Revised Statutes (12 U.S.C. 93(a) or (b)), section 
8(b) or 8(c) of the Federal Deposit Insurance Act, section 5(d)(2) or 
5(d)(3) \1\ of the Home Owners' Loan Act of 1933, section 407(e) or 
407(f) \1\ of the National Housing Act, or section 206(e) or 206(f) of 
the Federal Credit Union Act. Such an order may be issued with respect 
to a depository institution by its appropriate regulatory agency and 
with respect to a federally insured credit union by the National Credit 
Union Administration Board.
---------------------------------------------------------------------------
    \1\ See References in Text note below.
---------------------------------------------------------------------------
    (3) Nothing in this subsection shall be construed to affect in any 
way the powers of such agencies under any other provision of law.
    (4) The Secretary shall, prior to adopting regulations under this 
subsection, determine with respect to each appropriate regulatory agency 
and the National Credit Union Administration Board, whether its rules 
and standards adequately meet the purposes of regulations to be 
promulgated under this subsection, and if the Secretary so determines, 
shall exempt any depository institution subject to such rules or 
standards from the regulations promulgated under this subsection.
    (5) As used in this subsection--
        (A) ``depository institution'' has the meaning stated in clauses 
    (i) through (vi) of section 19(b)(1)(A) of the Federal Reserve Act 
    and also includes a foreign bank, an agency or branch of a foreign 
    bank, and a commercial lending company owned or controlled by a 
    foreign bank (as such terms are defined in the International Banking 
    Act of 1978).
        (B) ``government securities broker'' has the meaning prescribed 
    in section 3(a)(43) of the Securities Exchange Act of 1934.
        (C) ``government securities dealer'' has the meaning prescribed 
    in section 3(a)(44) of the Securities Exchange Act of 1934.
        (D) ``appropriate regulatory agency'' has the meaning prescribed 
    in section 3(a)(34)(G) of the Securities Exchange Act of 1934.

(Pub. L. 97-258, Sept. 13, 1982, 96 Stat. 944; Pub. L. 97-452, 
Sec. 1(9), Jan. 12, 1983, 96 Stat. 2468; Pub. L. 99-571, title II, 
Sec. 201(a), Oct. 28, 1986, 100 Stat. 3222.)

                                          Historical and Revision Notes
                                                    1982 Act
-------------------------------------------------------------------------------
---------------------------------
           Revised Section                   Source (U.S. Code)                
Source (Statutes at Large)
-------------------------------------------------------------------------------
---------------------------------
3121(a)..............................  31:752(2d par. related to form  Sept. 24
, 1917, ch. 56, Sec.  1(2d par.
                                        of bonds).                      related
 to form of bonds), 40 Stat. 288;
                                                                        restate
d Apr. 4, 1918, ch. 44, Sec.  1,
                                                                        40 Stat
. 503.
                                       31:753(a)(related to form of    Sept. 24
, 1917, ch. 56, 40 Stat. 288,
                                        notes, certificates of          Sec.  1
8(a)(related to form of notes,
                                        indebtedness, and Treasury      certifi
cates of indebtedness, and
                                        bills).                         Treasur
y bills); added Mar. 3, 1919, ch.
                                                                        100, Se
c.  1, 40 Stat. 1310; restated
                                                                        Feb. 4,
 1935, ch. 5, Sec.  4, 49 Stat.
                                                                        20.
                                       31:754(a)(related to form of    Sept. 24
, 1917, ch. 56, Sec.
                                        certificates of indebtedness    5(a)(re
lated to form of certificates of
                                        and Treasury bills).            indebte
dness and Treasury bills,
                                                                        finalit
y), 40 Stat. 290; restated June
                                                                        17, 192
9, ch. 26, 46 Stat. 20.
                                       31:754b(a)(less last 12         Sept. 24
, 1917, ch. 56, 40 Stat. 288,
                                        words).                         Sec.  2
0; added Jan. 30, 1934, ch. 6,
                                                                        Sec.  1
4(a)(4), 48 Stat 343; restated
                                                                        Mar. 28
, 1942, ch. 205, Sec.  3, 56
                                                                        Stat. 1
89.
                                       31:768(words after semicolon).  Feb. 4, 
1910, ch. 25, Sec.  1(words after
                                                                        semicol
on), 36 Stat. 192.
3121(b)(1)...........................  31:754b(b).
3121(b)(2)...........................  31:757c-4.                      Sept. 24
, 1917, ch. 56, 40 Stat. 288,
                                                                        Sec.  2
7; added Mar. 17, 1971, Pub. L.
                                                                        92-5, S
ec.  4(b), 85 Stat. 5.
3121(c)..............................  31:754b(c).
3121(d)..............................  31:739.                         R.S. Sec
.  3706.
3121(e)..............................  31:754(a)(related to
                                        finality).
                                       31:754b(a)(last 12 words).
3121(f)..............................  31:772a.                        June 1, 
1955, ch. 119, Sec.  2, 69 Stat.
                                                                        82.
-------------------------------------------------------------------------------
---------------------------------

    In subsection (a)(1), the word ``combination'' is omitted as 
surplus.
    In subsection (a)(2), the word ``conditions'' is substituted for 
``terms and conditions'' because it is inclusive.
    In subsection (a)(3), the words ``offering'' and ``interest rate'' 
are added for clarity.
    In subsection (b)(1), the word ``issued'' is substituted for 
``authorized'' for clarity. The words ``the Commissioner of Internal 
Revenue'' are omitted because of the source provisions restated in 
section 321 of the revised title.
    In subsection (b)(2), the words ``In the case of'' are omitted as 
surplus. The words ``under law'' are substituted for ``under this Act or 
under any other provision of law'' because they are inclusive. The words 
``the terms and conditions of issue'' are omitted as unnecessary. The 
word ``permit'' is omitted as surplus.
    In subsection (c), the word ``conditions'' is substituted for 
``regulations and upon such terms'' to eliminate unnecessary words and 
for consistency in the revised title and with other titles of the United 
States Code. The word ``agency'' is substituted for ``agency or 
instrumentality of the United States'' because of section 101 of the 
revised title and for consistency.
    In subsection (d), the word ``conditions'' is substituted for 
``terms and under such regulations'' to eliminate unnecessary words and 
for consistency in the revised title and with other titles of the Code. 
The words ``instead of'' are substituted for ``in lieu of'' for clarity.
    In subsection (f), the words ``in carrying out'' are substituted for 
``in connection with the program for'' to eliminate unnecessary words.

                                                    1983 Act
-------------------------------------------------------------------------------
---------------------------------
           Revised Section                   Source (U.S. Code)                
Source (Statutes at Large)
-------------------------------------------------------------------------------
---------------------------------
3121(g)..............................  31 App.:757c-5.                 Sept. 24
, 1917, ch. 56, 40 Stat. 288,
                                                                        Sec.  2
8; added Sept. 3, 1982, Pub. L.
                                                                        97-248,
 Sec.  310(a), 96 Stat. 595.
-------------------------------------------------------------------------------
---------------------------------

    In subsection (g)(1), before clause (A), the words ``Except as 
provided in paragraph (2)'' and ``(2) The term `registration-required 
obligation' shall not include any obligation if'' are omitted because of 
the restatement. Clause (C) is added for clarity.
    In subsection (g)(2)(B)(i), the words ``territories and'' are added 
for consistency in the revised title and with other titles of the United 
States Code.
    In subsection (g)(3), the words ``(or of any agency or 
instrumentality thereof)'' are omitted as included in ``Government''. 
The words ``For purposes of subsection (a)'' are omitted as surplus. The 
words ``is deemed to be'' are substituted for ``shall be treated as'' 
for consistency in the revised title and with other titles of the Code.
    In subsection (g)(4), the words ``or chain of nominees'' are omitted 
as included in ``nominee'' and because of 1:1.

                       References in Text

    Section 8(b) or (c) of the Federal Deposit Insurance Act, referred 
to in subsec. (h)(2), is classified to section 1818(b), (c) of Title 12, 
Banks and Banking.
    Section 5(d)(2) or 5(d)(3) of the Home Owners' Loan Act of 1933, 
referred to in subsec. (h)(2), is classified to section 1464(d)(2), (3) 
of Title 12, but was amended generally by Pub. L. 101-73, title III, 
Sec. 301, Aug. 9, 1989, 103 Stat. 282, and no longer relates to issuance 
of orders. See section 1464(d)(1) of Title 12.
    Section 407 of the National Housing Act, referred to in subsec. 
(h)(2), which was classified to section 1730 of Title 12, was repealed 
by Pub. L. 101-73, title IV, Sec. 407, Aug. 9, 1989, 103 Stat. 363.
    Section 206(e) or 206(f) of the Federal Credit Union Act, referred 
to in subsec. (h)(2), is classified to section 1786(e), (f) of Title 12.
    Clauses (i) through (vi) of section 19(b)(1)(A) of the Federal 
Reserve Act, referred to in subsec. (h)(5)(A), are classified to cls. 
(i) through (vi) of section 461(b)(1)(A) of Title 12.
    The International Banking Act of 1978, referred to in subsec. 
(h)(5)(A), is Pub. L. 95-369, Sept. 17, 1978, 92 Stat. 607, which 
enacted sections 347d, 611a, and 3101 to 3111 of Title 12, amended 
sections 72, 378, 614, 615, 618, 619, 1813, 1815, 1817, 1818, 1820, 
1821, 1822, 1823, 1828, 1829b, 1831b, and 1841 of Title 12, and enacted 
provisions set out as notes under sections 36, 247, 601, 611a, and 3101 
of Title 12. For complete classification of this Act to the Code, see 
Short Title note set out under section 3101 of Title 12 and Tables.
    Section 3(a)(43), (44), (34)(G), of the Securities Exchange Act of 
1934, referred to in subsec. (h)(5)(B) to (D), is classified to section 
78c(a)(43), (44), (34)(G) of Title 15, Commerce and Trade.


                               Amendments

    1986--Subsec. (h). Pub. L. 99-571 added subsec. (h).
    1983--Subsec. (g). Pub. L. 97-452 added subsec. (g).


      Effective Date of 1986 Amendment; Promulgation of Regulations

    Amendment by Pub. L. 99-571 effective 270 days after Oct. 28, 1986, 
except that the Secretary of the Treasury and each appropriate 
regulatory agency shall publish for notice and public comment within 120 
days after Oct. 28, 1986, initial implementing regulations to become 
effective as temporary regulations 210 days after Oct. 28, 1986, and as 
final regulations not later than 270 days after Oct. 28, 1986, see title 
IV of Pub. L. 99-571, set out as an Effective Date note under section 
78o-5 of Title 15, Commerce and Trade.


                    Effective Date of 1983 Amendment

    Pub. L. 98-216, Sec. 4(a), (b), Feb. 14, 1984, 98 Stat. 6, 7, as 
amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, 
provided that:
    ``(a)(1) Except as provided in paragraph (2) of this subsection, the 
amendment made by section 1(9) of the Act of January 12, 1983 (Public 
Law 97-452, 96 Stat. 2468) [amending this section], applies to an 
obligation issued under section 3102(a) of title 31, United States Code, 
after September 3, 1982.
    ``(2) The amendment made by section 1(9) of the Act of January 12, 
1983 (Public Law 97-452, 96 Stat. 2468) [amending this section], applies 
to an obligation issued after June 30, 1983, if--
        ``(A) interest on the obligation is exempt from tax (decided 
    without regard to the amendments made by section 310 of the Tax 
    Equity and Fiscal Responsibility Act of 1982 (Public Law 97-248, 96 
    Stat. 595) [enacting section 4701 of Title 26, Internal Revenue 
    Code, section 757c-5 of former Title 31, Money and Finance, amending 
    sections 103, 103A, 163, 165, 312, and 1232 of Title 26, and 
    enacting a provision set out as a note under section 103 of Title 
    26]) under law (without regard to the identity of the holder); and
        ``(B) the obligation was not required to be in registered form 
    under the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (26 
    U.S.C. 1 et seq.) as in effect on September 2, 1982.
    ``(b) The amendment made by section 1(9) of the Act of January 12, 
1983 (Public Law 97-452, 96 Stat. 2468) [amending this section], applies 
to an obligation issued under section 3103(a) of title 31, United States 
Code, after December 31, 1982.''


                   Transitional and Savings Provisions

    For transitional and savings provisions of Pub. L. 99-571, see 
section 301 of Pub. L. 99-571, set out as a note under section 78o-5 of 
Title 15, Commerce and Trade.


      Collection of Definitive Security and Annual Maintenance Fees

    Pub. L. 103-329, title I, Sept. 30, 1994, 108 Stat. 2386, provided 
in part: ``That in fiscal year 1995 and thereafter, the Secretary is 
authorized to collect fees of not less than $46 for each definitive 
security issue provided to customers, and an annual maintenance fee of 
not less than $25 for each Treasury Direct Investor Account exceeding 
$100,000 in par value: Provided further, That in fiscal year 1995 and 
thereafter, of the definitive security fees collected, not to exceed 
$600,000, and of the annual maintenance fees for Treasury Direct 
Investor Account collected, not to exceed $2,500,000, shall be retained 
and used in the current fiscal year for the specific purpose of 
offsetting costs of Bureau of the Public Debt's marketable security 
activities, and any fees collected in excess of said amounts shall be 
deposited as miscellaneous receipts in the Treasury''.


                        Treasury Auction Reforms

    Pub. L. 103-202, title II, Sec. 202, Dec. 17, 1993, 107 Stat. 2356, 
provided that:
    ``(a) Ability to Submit Computer Tenders in Treasury Auctions.--By 
the end of 1995, any bidder shall be permitted to submit a computer-
generated tender to any automated auction system established by the 
Secretary of the Treasury for the sale upon issuance of securities 
issued by the Secretary if the bidder--
        ``(1) meets the minimum creditworthiness standard established by 
    the Secretary; and
        ``(2) agrees to comply with regulations and procedures 
    applicable to the automated system and the sale upon issuance of 
    securities issued by the Secretary.
    ``(b) Prohibition on Favored Players.--
        ``(1) In general.--No government securities broker or government 
    securities dealer may receive any advantage, favorable treatment, or 
    other benefit, in connection with the purchase upon issuance of 
    securities issued by the Secretary of the Treasury, which is not 
    generally available to other government securities brokers or 
    government securities dealers under the regulations governing the 
    sale upon issuance of securities issued by the Secretary of the 
    Treasury.
        ``(2) Exception.--
            ``(A) In general.--The Secretary of the Treasury may grant 
        an exception to the application of paragraph (1) if--
                ``(i) the Secretary determines that any advantage, 
            favorable treatment, or other benefit referred to in such 
            paragraph is necessary and appropriate and in the public 
            interest; and
                ``(ii) the grant of the exception is designed to 
            minimize any anticompetitive effect.
            ``(B) Annual report.--The Secretary of the Treasury shall 
        submit an annual report to the Congress describing any exception 
        granted by the Secretary under subparagraph (A) during the year 
        covered by the report and the basis upon which the exception was 
        granted.
    ``(c) Meetings of Treasury Borrowing Advisory Committee.--
        ``(1) Open meetings.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        any meeting of the Treasury Borrowing Advisory Committee of the 
        Public Securities Association (hereafter in this subsection 
        referred to as the `advisory committee'), or any successor to 
        the advisory committee, shall be open to the public.
            ``(B) Exception.--Subparagraph (A) shall not apply with 
        respect to any part of any meeting of the advisory committee in 
        which the advisory committee--
                ``(i) discusses and debates the issues presented to the 
            advisory committee by the Secretary of the Treasury; or
                ``(ii) makes recommendations to the Secretary.
        ``(2) Minutes of each meeting.--The detailed minutes required to 
    be maintained under section 10(c) of the Federal Advisory Committee 
    Act [5 App. U.S.C.] for any meeting by the advisory committee shall 
    be made available to the public within 3 business days of the date 
    of the meeting.
        ``(3) Prohibition on receipt of gratuities or expenses by any 
    officer or employee of the board or department.--In connection with 
    any meeting of the advisory committee, no officer or employee of the 
    Department of the Treasury, the Board of Governors of the Federal 
    Reserve System, or any Federal reserve bank may accept any gratuity, 
    consideration, expense of any sort, or any other thing of value from 
    any advisory committee described in subsection (c), any member of 
    such committee, or any other person.
        ``(4) Prohibition on outside discussions.--
            ``(A) In general.--Subject to subparagraph (B), a member of 
        the advisory committee may not discuss any part of any 
        discussion, debate, or recommendation at a meeting of the 
        advisory committee which occurs while such meeting is closed to 
        the public (in accordance with paragraph (1)(B)) with, or 
        disclose the contents of such discussion, debate, or 
        recommendation to, anyone other than--
                ``(i) another member of the advisory committee who is 
            present at the meeting; or
                ``(ii) an officer or employee of the Department of the 
            Treasury.
            ``(B) Applicable period of prohibition.--The prohibition 
        contained in subparagraph (A) on discussions and disclosures of 
        any discussion, debate, or recommendation at a meeting of the 
        advisory committee shall cease to apply--
                ``(i) with respect to any discussion, debate, or 
            recommendation which relates to the securities to be 
            auctioned in a midquarter refunding by the Secretary of the 
            Treasury, at the time the Secretary makes a public 
            announcement of the refunding; and
                ``(ii) with respect to any other discussion, debate, or 
            recommendation at the meeting, at the time the Secretary 
            releases the minutes of the meeting in accordance with 
            paragraph (2).
            ``(C) Removal from advisory committee for violations of this 
        paragraph.--In addition to any penalty or enforcement action to 
        which a person who violates a provision of this paragraph may be 
        subject under any other provision of law, the Secretary of the 
        Treasury shall--
                ``(i) remove a member of the advisory committee who 
            violates a provision of this paragraph from the advisory 
            committee and permanently bar such person from serving as a 
            member of the advisory committee; and
                ``(ii) prohibit any director, officer, or employee of 
            the firm of which the member referred to in clause (i) is a 
            director, officer, or employee (at the time the member is 
            removed from the advisory committee) from serving as a 
            member of the advisory committee at any time during the 5-
            year period beginning on the date of such removal.
    ``(d) Report to Congress.--
        ``(1) Report required.--The Secretary of the Treasury shall 
    submit an annual report to the Congress containing the following 
    information with respect to material violations or suspected 
    material violations of regulations of the Secretary relating to 
    auctions and other offerings of securities upon the issuance of such 
    securities by the Secretary:
            ``(A) The number of inquiries begun by the Secretary during 
        the year covered by the report regarding such material 
        violations or suspected material violations by any participant 
        in the auction system or any director, officer, or employee of 
        any such participant and the number of inquiries regarding any 
        such violations or suspected violations which remained open at 
        the end of such year.
            ``(B) A brief description of the nature of the violations.
            ``(C) A brief description of any action taken by the 
        Secretary during such year with respect to any such violation, 
        including any referrals made to the Attorney General, the 
        Securities and Exchange Commission, any other law enforcement 
        agency, and any Federal banking agency (as defined in section 3 
        of the Federal Deposit Insurance Act [12 U.S.C. 1813]).
        ``(2) Delay in disclosure of information in certain cases.--The 
    Secretary of the Treasury shall not be required to include in a 
    report under paragraph (1) any information the disclosure of which 
    could jeopardize an investigation by an agency described in 
    paragraph (1)(C) for so long as such disclosure could jeopardize the 
    investigation.''


           Notice on Treasury Modifications to Auction Process

    Pub. L. 103-202, title II, Sec. 203, Dec. 17, 1993, 107 Stat. 2359, 
provided that: ``The Secretary of the Treasury shall notify the Congress 
of any significant modifications to the auction process for issuing 
United States Treasury obligations at the time such modifications are 
implemented.''

                  Section Referred to in Other Sections

    This section is referred to in sections 3102, 3103, 3104 of this 
title.
