US Laws, Codes, Statutes & Cases

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[Laws in effect as of January 7, 2003]
[Document not affected by Public Laws enacted between
  January 7, 2003 and December 19, 2003]
[CITE: 31USC3105]

 
                       TITLE 31--MONEY AND FINANCE
 
                   SUBTITLE III--FINANCIAL MANAGEMENT
 
                         CHAPTER 31--PUBLIC DEBT
 
                    SUBCHAPTER I--BORROWING AUTHORITY
 
Sec. 3105. Savings bonds and savings certificates

    (a) With the approval of the President, the Secretary of the 
Treasury may issue savings bonds and savings certificates of the United 
States Government and may buy, redeem, and make refunds under section 
3111 of this title. Proceeds from the bonds and certificates shall be 
used for expenditures authorized by law. Savings bonds and certificates 
may be issued on an interest-bearing basis, on a discount basis, or on 
an interest-bearing and discount basis. Savings bonds shall mature not 
more than 20 years from the date of issue. Savings certificates shall 
mature not more than 10 years from the date of issue. The difference 
between the price paid and the amount received on redeeming a savings 
bond or certificate is interest under the Internal Revenue Code of 1986 
(26 U.S.C. 1 et seq.).
    (b)(1) The Secretary may--
        (A) fix the investment yield for savings bonds; and
        (B) change the investment yield on an outstanding savings bond, 
    except that the yield on a bond for the period held may not be 
    decreased below the minimum yield for the period guaranteed on the 
    date of issue.

    (2) The Secretary may prescribe regulations providing that--
        (A) owners of savings bonds may keep the bonds after maturity or 
    after a period beyond maturity during which the bonds have earned 
    interest and continue to earn interest at rates consistent with 
    paragraph (1) of this subsection; and
        (B) savings bonds earning a different rate of interest before 
    the regulations are prescribed shall earn a rate of interest 
    consistent with paragraph (1).

    (c) The Secretary may prescribe for savings bonds and savings 
certificates issued under this section--
        (1) the form and amount of an issue and series;
        (2) the way in which they will be issued;
        (3) the conditions, including restrictions on transfer, to which 
    they will be subject;
        (4) conditions governing their redemption;
        (5) their sales price and denominations;
        (6) a way to evidence payments for or on account of them and to 
    provide for the exchange of savings certificates for savings bonds; 
    and
        (7) the maximum amount issued in a year that may be held by one 
    person.

    (d) The Secretary may authorize financial institutions to make 
payments to redeem savings bonds and savings notes. A financial 
institution may be a paying agent only if the institution--
        (1) is incorporated under the laws of the United States, a 
    State, the District of Columbia, or a territory or possession of the 
    United States;
        (2) in the usual course of business accepts, subject to 
    withdrawal, money for deposit or the purchase of shares;
        (3) is under the supervision of a banking authority of the 
    jurisdiction in which it is incorporated;
        (4) has a regular office to do business; and
        (5) is qualified under regulations prescribed by the Secretary 
    in carrying out this subsection.

    (e)(1) The Secretary may prescribe a way in which a check issued to 
an individual (except a trust or estate) as a refund for taxes imposed 
under subtitle A of the Internal Revenue Code of 1986 (26 U.S.C. 1 et 
seq.) may become a series E savings bond. However, a check may become a 
bond only if the claim for a refund is filed by the last day prescribed 
by law for filing the return (determined without any extensions) for the 
taxable year for which the refund is made. The Secretary may prescribe 
the time and way in which the check becomes a bond.
    (2) A bond issued under this subsection is deemed to be a series E 
bond issued under this section, except that the bond shall bear an issue 
date of the first day of the first month beginning after the close of 
the taxable year for which the bond is issued. The Secretary also may 
provide that a bond issued to joint payees may be redeemed by either 
payee alone.

(Pub. L. 97-258, Sept. 13, 1982, 96 Stat. 940; Pub. L. 97-452, 
Sec. 1(6), (7), Jan. 12, 1983, 96 Stat. 2467, 2468; Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095; Pub. L. 103-465, title VII, 
Sec. 745(a), Dec. 8, 1994, 108 Stat. 5011.)

                                          Historical and Revision Notes
                                                    1982 Act
----------------------------------------------------------------------------------------------------------------
           Revised Section                   Source (U.S. Code)                Source (Statutes at Large)
----------------------------------------------------------------------------------------------------------------
3105(a)..............................  31:757c(a)(1st sentence),       Sept. 24, 1917, ch. 56, 40 Stat. 288,
                                        (b)(1)(1st sentence), (d)(1st   Sec.  22(a)-(d)(1st sentence); added
                                        sentence).                      Feb. 4, 1935, ch. 5, Sec.  6, 49 Stat.
                                                                        21; restated Feb. 19, 1941, ch. 7, Sec.
                                                                        3, 55 Stat. 7; Mar. 26, 1951, ch. 19,
                                                                        Sec.  1, 65 Stat. 26; Apr. 20, 1957,
                                                                        Pub. L. 85-17, Sec.  1, 71 Stat. 15;
                                                                        Sept. 22, 1959, Pub. L. 86-346, Sec.
                                                                        101(b), 73 Stat. 621; Dec. 1, 1969, Pub.
                                                                        L. 91-130, Secs.  1, 2(b), 83 Stat. 272;
                                                                        Aug. 24, 1970, Pub. L. 91-388, Sec.  3,
                                                                        84 Stat. 830; Mar. 15, 1976, Pub. L. 94-
                                                                        232, Sec.  4, 90 Stat. 217; Apr. 2,
                                                                        1979, Pub. L. 96-5, Sec.  4, 93 Stat. 8;
                                                                        Oct. 3, 1980, Pub. L. 96-377, Sec.  1,
                                                                        94 Stat. 1512.
3105(b)(1)...........................  31:757c(b)(1)(2d sentence
                                        proviso, last sentence).
3105(b)(2)...........................  31:757c(b)(3).
3105(b)(3)...........................  31:757c(b)(2).
3105(c)..............................  31:757c(a)(last sentence),
                                        (b)(1)(2d sentence less
                                        proviso, 3d, 4th sentences),
                                        (c).
3105(d)..............................  31:757c(h).                     Sept. 24, 1917, ch. 56, 40 Stat. 288,
                                                                        Sec.  22(h); added Apr. 11, 1943, ch.
                                                                        52, Sec.  3, 57 Stat. 63; restated Apr.
                                                                        3, 1945, ch. 51, Sec.  3, 59 Stat. 47;
                                                                        Oct. 17, 1968, Pub. L. 90-595, Sec.  1,
                                                                        82 Stat. 1155.
3105(e)..............................  31:757c(j).                     Sept. 24, 1917, ch. 56, 40 Stat. 288,
                                                                        Sec.  22(j); added July 1, 1973, Pub. L.
                                                                        93-53, Sec.  3(a), 87 Stat. 135.
----------------------------------------------------------------------------------------------------------------

    In subsection (a), the words ``through the United States Postal 
Service or otherwise'' and ``Treasury'' before ``savings'' are omitted 
as surplus. The words ``and may buy, redeem, and make refunds under 
section 3111 of this title'' are added because of the restatement. The 
words ``for expenditures authorized by law'' are substituted for ``to 
meet any public expenditures authorized by law, and to retire any 
outstanding obligations of the United States bearing interest or issued 
on a discount basis'' for clarity and because they are inclusive. The 
word ``combination'' is omitted as surplus.
    In subsection (b)(1), the words ``Except as provided in paragraph 
(2) of this subsection'' are added for clarity. The word ``conditions'' 
is substituted for ``terms'' for consistency in the revised title and 
with other titles of the United States Code. The word ``calendar'' is 
omitted as surplus. The words ``(or, beginning on October 1, 1976, if 
later)'' are omitted as executed.
    In subsection (b)(3), the words ``at their option'' and ``upon 
them'' are omitted as surplus. The last sentence is substituted for 
31:757c(b)(2)(B) for clarity.
    In subsection (c), before clause (1), the words ``subject to the 
limitation imposed by section 757b of this title'' are omitted as 
surplus. The words ``issued under this section'' are added for clarity. 
In clause (3), the words ``terms and'' are omitted as surplus. The words 
``consistent with subsections (b) to (d) of this section'' are omitted 
as unnecessary because of the restatement. In clause (4), the words 
``before maturity'' are omitted as surplus. In clause (6), the words ``a 
way to evidence payments for'' are substituted for ``issue, or cause to 
be issued, stamps, or may provide any other means to evidence payments 
for'' because they are inclusive. The text of 31:757c(c)(last sentence) 
is omitted because section 5 of the Public Debt Act of 1942 (ch. 205, 56 
Stat. 189), ended the authority of the Postmaster General to issue 
stamps. In clause (7), the word ``maximum'' is added for clarity. The 
words ``at any one time'' are omitted as surplus.
    In subsection (d), before clause (1), the words ``under such 
regulations as he may prescribe'', ``or permit'', and ``commercial 
banks, trust companies, savings banks, savings and loan associations, 
building and loan associations (including cooperative banks), credit 
unions, cash depositories, industrial banks, and similar'' are omitted 
as surplus. In clause (1), the words ``Commonwealth of the Philippine 
Islands'' in section 22(h) of the Second Liberty Bond Act (ch. 56, 40 
Stat. 288) are omitted because of Proclamation No. 2695 (July 24, 1946, 
60 Stat. 1352) proclaiming the independence of the Philippines. In 
clause (3), the words ``department or equivalent'' are omitted as 
surplus. In clause (5), the word ``duly'' is omitted as surplus.
    In subsection (e)(1), the words ``by regulations'' are omitted as 
unnecessary. The words ``a way'' are added, and the words ``However, a 
check may become a bond'' are substituted for ``This subsection shall 
apply'', for clarity.
    In subsection (e)(2), the words ``Except as provided in paragraph 
(2)'' are omitted as unnecessary. The words ``is deemed to be'' are 
substituted for ``shall be treated for all purposes of law as'' because 
a legal fiction is intended. The words ``calendar'' and ``In the case of 
. . . under this subsection'' are omitted as surplus.

                                                    1983 Act
----------------------------------------------------------------------------------------------------------------
           Revised Section                   Source (U.S. Code)                Source (Statutes at Large)
----------------------------------------------------------------------------------------------------------------
3105(b)(1)...........................  31 App.:757c(b)(1) (2d          Sept. 3, 1982, Pub. L. 97-248, Sec.
                                        sentence).                      289(a)(1)(A), (B), (D), 96 Stat. 571.
3105(b)(2)...........................  31 App.:757c(b)(3)
3105(b)(3)...........................  31 App.:757c(b)(2).
3105(c)..............................  31 App.:757c(b)(1) (3d          Sept. 3, 1982, Pub. L. 97-248, Sec.
                                        sentence).                      289(a)(1)(C), 96 Stat. 571.
----------------------------------------------------------------------------------------------------------------

    In subsection (b)(1), before clause (A), the words ``and except as 
provided in paragraph (2) of this subsection'' are added for clarity. In 
clause (B), the word ``change`' is substituted for ``provide for 
increases and decreases in'' to eliminate unnecessary words. The word 
``investment'' is omitted the 2d time it appears as surplus.


                               Amendments

    1994--Subsec. (b). Pub. L. 103-465 amended subsec. (b) generally. 
Prior to amendment, subsec. (b) read as follows:
    ``(b)(1) With the approval of the President and except as provided 
in paragraph (2) of this subsection, the Secretary may--
        ``(A) fix the investment yield for savings bonds; and
        ``(B) change the investment yield on an outstanding savings 
    bond, except that the yield on a bond for the period held may not be 
    decreased below the minimum yield for the period guaranteed on the 
    date of issue.
    ``(2) The investment yield on a series E savings bond shall be at 
least 4 percent a year compounded semiannually beginning on the first 
day of the month beginning after the date of issue of the bond and 
ending on the last day of the month before the date of redemption.
    ``(3) With the approval of the President, the Secretary may 
prescribe regulations providing that--
        ``(A) owners of series E and H savings bonds may keep the bonds 
    after maturity or after a period beyond maturity during which the 
    bonds have earned interest and continue to earn interest at rates 
    consistent with paragraph (1) of this subsection; and
        ``(B) series E and H savings bonds earning a different rate of 
    interest before the regulations are prescribed shall earn a rate of 
    interest consistent with paragraph (1).''
    1986--Subsecs. (a), (e)(1). Pub. L. 99-514 substituted ``Internal 
Revenue Code of 1986'' for ``Internal Revenue Code of 1954''.
    1983--Subsec. (b). Pub. L. 97-452, Sec. 1(6), added par. (1) and 
redesignated former par. (1) as (2), in par. (2) as so redesignated, 
struck out provision that except as provided in former par. (2), the 
interest rate on, and the issue price of, savings bonds and savings 
certificates and the conditions under which they might be redeemed might 
not yield more than 5.5 percent a year compounded semiannually, struck 
out former par. (2) which provided that the Secretary with the 
President's approval might fix the yield on savings bonds at any percent 
per year compounded semiannually, but that total increases in a six-
month period might not exceed one percent a year compounded 
semiannually, redesignated provisions of par. (3) as subpars. (A) and 
(B), and, in subpar. (B), as so redesignated, substituted provisions 
that series E and H savings bonds earning a different rate of interest 
before the regulations are prescribed shall earn a rate of interest 
consistent with par. (1) for provision that series E and H savings bonds 
earning a higher rate of interest before the regulations were prescribed 
would continue to earn a higher rate of interest consistent with par. 
(1).
    Subsec. (c)(5). Pub. L. 97-452, Sec. 1(7), struck out ``(expressed 
in terms of the maturity value)'' after ``denominations''.


                    Effective Date of 1994 Amendment

    Section 745(b) of Pub. L. 103-465 provided that: ``The amendment 
made by this section [amending this section] shall apply to bonds issued 
after October 31, 1994.''

  Ex. Ord. No. 11981. Interagency Committee for the Purchase of United 
                              States Bonds

    Ex. Ord. No. 11981, Mar. 29, 1977, 42 F.R. 17095, provided:
    By virtue of the authority vested in me by the Constitution and 
statutes of the United States of America, and as President of the United 
States of America, it is hereby ordered as follows:
    Section 1. (a) There is hereby established the Interagency Committee 
for the Purchase of United States Savings Bonds (hereinafter referred to 
as the Committee). The Committee shall consist of a Chairman, who is to 
be appointed by the President for a term of two years, and the heads of 
Federal agencies. Each member of the Committee is responsible for the 
success of the Payroll Savings Program in his agency.
    (b) Members of the Committee may designate an alternate, who shall 
serve as a member of the Committee whenever the regular member is unable 
to attend any meeting of the Committee. The alternate member may be 
authorized to act for the regular member in all appropriate matters 
relating to the Committee. In the case of an executive or military 
department, a Deputy Secretary or an Under Secretary may be designated 
as an alternate member. In the case of any other Federal agency, the 
alternate member shall be designated from among the officials thereof of 
appropriate rank.
    (c) The Chairman will designate the Federal Payroll Savings Officer 
of the Savings Bonds Division, Department of the Treasury, to act as his 
liaison officer with members of the Committee.
    Sec. 2. The Committee shall perform the following functions and 
duties:
    (a) Formulating and presenting to the Federal agencies a plan of 
organization and sales promotion whereby the Payroll Savings Plan and 
Military Bond Allotment Plan, hereinafter referred to as the Plans, will 
be made available to all uniformed and civilian personnel of the 
government for the purchase of Savings Bonds, and whereby all such 
personnel will be urged to participate.
    (b) Assisting the Federal agencies in installing the Plans and in 
solving any special problems that may develop in connection therewith.
    (c) Acting as a clearinghouse for Federal agencies in compiling and 
disseminating such statistics and information with respect to the 
implementation and sales promotion of the Plans as may be appropriate.
    (d) Recommending to the Federal agencies any methods for 
improvements in the program adopted pursuant to the Plans.
    (e) The Committee will meet, and will be available to meet with the 
President, at least once each calendar year and at such other times as 
may be necessary to carry out its responsibilities.
    Sec. 3. Each Federal agency shall institute and put into operation, 
as soon as practicable, a plan of organization and sales promotion 
recommended by the Committee, with such modifications as particular 
circumstances may render advisable.
    Sec. 4. As used in this Order, the term ``Federal agencies'' means 
departments, agencies, and establishments of the Executive branch of the 
Government.
    Sec. 5. This Order supersedes Executive Order No. 11532 of June 2, 
1970.
                                                           Jimmy Carter.


                            Transitional Rule

    Pub. L. 97-248, title II, Sec. 289(b), Sept. 3, 1982, 96 Stat. 57, 
provided that for a savings bond issued before the 30th day after Sept. 
3, 1982, for purposes of sections 757c and 757c-2 of former Title 31, 
the minimum yield for the period held is the scheduled investment yield 
for the period in effect on the 30th day.

                  Section Referred to in Other Sections

    This section is referred to in sections 3106, 3108 of this title; 
title 26 section 135.