80 FR 34239 - Change to Existing Regulation Concerning the Interest Rate Paid on Cash Deposited To Secure Immigration Bonds

DEPARTMENT OF HOMELAND SECURITY

Federal Register Volume 80, Issue 115 (June 16, 2015)

The Department of Homeland Security is amending its regulations addressing the payment of interest on cash bond deposits to explicitly provide that the Department of the Treasury (Treasury) will set the interest rate. Treasury will notify the public of its interest rate determinations by publishing the rates on the Treasury Web site or via another mechanism. Under the existing regulation, the current rate of interest paid on deposits securing cash bonds is 3 percent per annum. 8 U.S.C. 1363(a); 8 CFR 293.2. This final rulemaking is consistent with the requirement of 8 U.S.C. 1363(a) that interest payments shall be ``at a rate determined by the Secretary of the Treasury, except that in no case shall the interest rate exceed 3 per centum per annum.''

[Federal Register Volume 80, Number 115 (Tuesday, June 16, 2015)]
[Rules and Regulations]
[Pages 34239-34242]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-14675]



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Federal Register / Vol. 80, No. 115 / Tuesday, June 16, 2015 / Rules 
and Regulations

[[Page 34239]]



DEPARTMENT OF HOMELAND SECURITY

8 CFR Part 293

[DHS Docket No. ICEB-2013-0002]
RIN 1653-AA66


Change to Existing Regulation Concerning the Interest Rate Paid 
on Cash Deposited To Secure Immigration Bonds

AGENCY: U.S. Immigration and Customs Enforcement, DHS.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Homeland Security is amending its 
regulations addressing the payment of interest on cash bond deposits to 
explicitly provide that the Department of the Treasury (Treasury) will 
set the interest rate. Treasury will notify the public of its interest 
rate determinations by publishing the rates on the Treasury Web site or 
via another mechanism. Under the existing regulation, the current rate 
of interest paid on deposits securing cash bonds is 3 percent per 
annum. 8 U.S.C. 1363(a); 8 CFR 293.2. This final rulemaking is 
consistent with the requirement of 8 U.S.C. 1363(a) that interest 
payments shall be ``at a rate determined by the Secretary of the 
Treasury, except that in no case shall the interest rate exceed 3 per 
centum per annum.''

DATES: This rule is effective August 17, 2015.

ADDRESSES: Comments and related materials received from the public, as 
well as documents mentioned in this preamble as being available in the 
docket, are part of docket ICEB-2013-0002 and are available online by 
going to http://www.regulations.gov, inserting ICEB-2013-0002 in the 
``Search'' box, and then clicking ``Search.''

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule, 
call or email Don Benoit, Bonds Branch Supervisor, Burlington Finance 
Center, P.O. Box 5000, Williston, VT 05495-5000. Telephone: (802) 288-
7630, email: [email protected].

SUPPLEMENTARY INFORMATION:

I. Regulatory History and Information

    On October 28, 2013, DHS published a notice of proposed rulemaking 
(NPRM) in the Federal Register, entitled Change to Existing Regulation 
Concerning the Interest Rate Paid on Cash Deposited to Secure 
Immigration Bonds. 78 FR 64183. We received two comments on the 
proposed rule. No public meeting was requested, and none was held.

II. Abbreviations

CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
ICE U.S. Immigration and Customs Enforcement
INA Immigration and Nationality Act of 1952, as amended
NPRM Notice of proposed rulemaking
OMB Office of Management and Budget
Sec.  Section symbol
U.S.C. United States Code

III. Basis and Purpose

A. Immigration Bonds Secured by Cash

    U.S. Immigration and Customs Enforcement (ICE) may release certain 
aliens from detention during removal proceedings after a custody 
determination has been made pursuant to 8 CFR 236.1(c). As a condition 
of his/her release from custody, an alien may be required to post an 
immigration bond. Currently, about 91 percent of the immigration bonds 
issued each year is secured by cash (cash bonds). (Fiscal Year 2013 
Total, Cash Bonds and Surety Bonds--on file with the Bonds Branch, ICE 
Financial Operations--Burlington). The other 9 percent of the 
immigration bonds are issued by surety companies (surety bonds) 
certified by the Department of the Treasury to post bonds on behalf of 
the Federal government pursuant to 31 U.S.C. 9304-9308 and 31 CFR part 
223. ICE deposits cash pledged as security on cash bonds in a fund 
maintained by Treasury known as the Immigration Bond Deposit Account. 
These funds are held ``in trust'' for the obligor and currently earn 
simple interest at the rate of 3 percent per annum. 8 U.S.C. 1363(a); 8 
CFR part 293. Immigration bonds are not in effect for a set period of 
time. They remain in effect until they are breached or canceled. On 
average, a cash bond is in effect for about 34 months. (Data on file 
with ICE Financial Operations--Burlington).

B. Payment of Interest on Cash Bond Deposits

    In 1970, Congress added section 293 of the Immigration and 
Nationality Act (INA), as amended, to pay interest at a rate determined 
by the Secretary of the Treasury, not to exceed 3 per centum per annum, 
on cash received as security for immigration bonds. Public Law 91-313 
(July 10, 1970) (codified at 8 U.S.C. 1363). Effective on the date of 
its publication in the Federal Register, July 23, 1971, the interest 
rate set by Treasury--3 per centum per annum--has been paid on cash 
bond deposits received after April 27, 1966. 36 FR 13677 (8 CFR part 
293). Thus, since 1971, the Government has paid simple interest at the 
rate of 3 percent per year on cash deposited by bond obligors to secure 
immigration bonds. Interest is earned on a cash bond from the date the 
bond is issued until it is breached or canceled. The amount of interest 
earned varies depending on the face amount of the bond and the length 
of time it remains in effect. For example, a $5,000 cash bond in effect 
for 3 years would earn $450 in interest with a 3 percent per annum 
interest rate.
    In the NPRM published on October 28, 2013, DHS proposed to modify 
the current 8 CFR 293.2, which states that ``effective from date of 
deposit occurring after April 27, 1966, the interest rate shall be 3 
per centum per annum.'' DHS proposed to revise this provision to 
explicitly state that Treasury will set the interest rate directly. 
Thus, DHS proposed to utilize the rate set by Treasury in issuing 
interest payments, with DHS having no role in setting the rate. 78 FR 
64183.

IV. Discussion of Comments and the Final Rule

    The October 2013 NPRM provided for a public comment period of 60 
days, which ended on December 27, 2013. During that time period, DHS 
received two public comments. One of the comments recommended the 
interest rate be set at the flat rate of one-half of one percent. DHS 
considered the comment and decided not to adopt it. As discussed above, 
Treasury possesses

[[Page 34240]]

the statutory authority to set the interest rate on cash received as 
security for immigration bonds. Public Law 91-313 (July 10, 1970) 
(codified at 8 U.S.C. 1363). DHS does not possess the statutory 
authority to set the rate in the manner suggested by the commenter.
    The second comment, submitted by a bonding agency, opposed the rule 
because the rule did not specify that any change in the interest rate 
would only apply to cash bonds posted after Treasury issues a new 
interest rate. The commenter proposed keeping the current 3 percent 
interest rate for all bonds posted prior to the effective date of an 
interest rate change until the bond was breached or canceled. For bonds 
posted after the effective date of the rule, the commenter proposed 
applying the interest rate in effect at the time the bond was posted 
throughout the life of the bond.
    DHS has decided against adopting this proposal. DHS understands 
that Treasury may set a fluctuating, market-based rate that will not 
exceed the statutory 3 percent ceiling. Assuming that Treasury sets 
such a rate, DHS will apply the new rate to all cash bond deposits as 
of the rate's effective date. Unless Treasury's published rate requires 
otherwise, DHS will adjust any Treasury-determined rate each time the 
rate changes. Consistent with 8 U.S.C. 1363, bond deposits will 
continue to receive the 3 percent rate until the new Treasury rate goes 
into effect. After the effective date of a new rate, DHS will apply the 
new Treasury rate to all bond deposits.
    After considering different options for how to finalize this 
regulation, including the method proposed in the second comment, DHS 
has determined that unless Treasury's published rate requires 
otherwise, it will apply any new Treasury rate to all bond deposits 
regardless of when the bond was posted. DHS made this decision for a 
number of reasons. If DHS adopted the second comment and assigned a 
fixed interest rate based on the date the bond was posted, DHS would 
not be able to effectuate a determination by Treasury that a 
fluctuating rate be applied to cash bond deposits. Under 8 U.S.C. 
1363(a), cash received as security on an immigration bond ``shall bear 
interest at a rate determined by the Secretary of the Treasury.'' The 
second comment's proposal--that DHS require multiple interest rates to 
be paid on bonds depending on the date the bond was posted--is 
inconsistent with the statutory language.
    DHS's approach also has the advantage of applying any new interest 
rate uniformly to cash bond deposits. All deposits will continue to 
receive the 3 percent rate until a new interest rate goes into effect. 
As of the effective date of the new rate, the new rate will be applied 
to all of the deposits and, as the rate changes, each succeeding new 
rate will be applied to all of the deposits. This approach recognizes 
Treasury's broad discretion under statute to set an appropriate rate. 
This approach has the further advantage of allowing any new interest 
rate's budget impact to be monitored.
    DHS has carefully considered how the new rule impacts the ability 
of an alien to secure a cash bond and expects that any effects will be 
negligible. For a variety of reasons, DHS believes that cash bond 
obligors are generally insensitive to changes in the bond interest 
rate. For instance, in DHS's experience, the vast majority of cash bond 
obligors are the alien's family members or friends who post bonds for 
the primary purpose of releasing the alien from custody. The interest 
earned on the cash deposits for these obligors is incidental to 
effectuating the alien's release. Moreover, if any cash bond obligors 
are so sensitive to a change in the bond's interest rate that they want 
to terminate their obligations under the bond, a process exists that 
allows the possible early surrender of the bonded alien. Any obligor 
may ask the DHS office that posted the bond to authorize surrender of 
the alien before being required to do so by DHS. Such a request may be 
granted at the discretion of the office where the bond was posted. If 
the request is granted, the bond would be canceled once the obligor 
effectuates surrender of the alien, and the cash deposit would be 
refunded.
    Finally, the second commenter noted the possibility of unfair 
surprise if the interest rate were to change during the life of the 
bond, because ``the depositing party was advised of, and relied upon, 
the 3% interest rate at the time the cash deposit was made.'' While 
Treasury's initial determination of a 3 percent interest rate was 
published in a 1971 regulation, 8 CFR 293.2, DHS notes that, since 
1970, it has been Treasury's statutory prerogative to determine the 
interest rate. The bond agreement between DHS and the bond obligor does 
not contain an interest rate as one of its terms and does not guarantee 
that the interest rate originally determined by Treasury would be in 
effect for the life of the bond. ICE Form I-352. Instead, by statute, 
Treasury is authorized to determine the interest rate, and DHS 
calculates the amount of interest earned based on the rate set by 
Treasury, the face amount of the bond, and the number of days that the 
bond was in effect. Even assuming a future change in the interest rate 
frustrates the expectations of an obligor who was aware of the 3 
percent rate, ICE may nonetheless apply a new rate to a bond deposit 
after the new rate goes into effect because ICE will not be attaching 
new legal consequences to completed, past conduct. Instead, ICE will be 
applying the new rate to an open cash bond--an agreement whose 
fulfillment is still a work in progress. Until Treasury sets a new 
interest rate, cash deposits currently securing bonds will continue to 
receive the 3 percent interest rate. As described above, following 
implementation of a new interest rate, deposits could begin receiving a 
different rate. This approach will therefore have an exclusively future 
effect.

V. Statutory and Regulatory Requirements

    DHS developed this rule after considering numerous statutes and 
executive orders related to rulemaking. The below sections summarize 
our analyses based on a number of these statutes and executive orders.

A. Executive Orders 12866 and 13563: Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. The Office of Management and Budget (OMB) has not 
designated this rule a ``significant regulatory action'' under section 
3(f) of Executive Order 12866. Accordingly, OMB did not review the 
proposed rule and has not reviewed the final rule.
    The proposed and final rules explicitly state that Treasury is 
authorized by statute to set the interest rate paid on cash deposited 
to secure immigration bonds, provided that the rate cannot exceed 3 
percent per year and cannot be less than 0. In deciding to propose this 
rule, DHS considered whether DHS would implement any possible future 
changes to the current fixed interest rate of 3 percent per annum that 
may be made by Treasury, through informal rulemaking or other means. 
DHS rejected this alternative. Because Congress authorized the 
Secretary of the Treasury to set the rate

[[Page 34241]]

directly, the approach that DHS proposed and adopts here is a more 
efficient and cost-effective process.
    The proposed and final rules further do not make any changes to the 
current interest rate paid to cash bond obligors; under current law, a 
change to the current interest rate paid cannot be made except under 
Treasury's sole authority. As this rulemaking does not make any changes 
to the current fixed 3 percent per annum interest rate, this rule does 
not impose any costs on bond obligors.
    As noted above, under current law, Treasury has the sole authority 
to set the interest rate that DHS uses to determine the amount of 
interest paid for cash immigration bonds. The rule provides that 
Treasury will set the interest rate directly and will publish the 
interest rate on the Treasury Web site or through another mechanism. 
This will save DHS resources by removing the intermediate step for DHS 
to implement Treasury's decision by informal rulemaking.

B. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-
612, as amended, we have considered whether this rule would have a 
significant economic impact on a substantial number of small entities. 
The term ``small entities'' comprises small businesses, not-for-profit 
organizations that are independently owned and operated and are not 
dominant in their fields, and governmental jurisdictions with 
populations of less than 50,000.
    This rule does not impose any direct costs on small entities. 
Consequently, DHS certifies this final rule would not impose a 
significant economic impact on a substantial number of small entities. 
DHS received no public comments challenging this certification.

C. The Small Business Regulatory Enforcement Fairness Act of 1996

    This final rule is not a major rule as defined by 5 U.S.C. 804, for 
purposes of congressional review of agency rulemaking under the Small 
Business Regulatory Enforcement Fairness Act of 1996, Pub. L. 104-121. 
This rule would not result in an annual effect on the economy of $100 
million or more; a major increase in costs or prices; or adverse 
effects on competition, employment, investment, productivity, 
innovation, or the ability of United States-based companies to compete 
with foreign-based companies in domestic or export markets.

D. Paperwork Reduction Act of 1995

    All Departments are required to submit to OMB for review and 
approval, any reporting or recordkeeping requirements inherent in a 
rule under the Paperwork Reduction Act of 1995, Pub. L. 104-13, 109 
Stat. 163 (1995), 44 U.S.C. 3501-3520. This rule does not change or 
require a collection of information.

E. Federalism

    A rule has implications for federalism under Executive Order 13132, 
Federalism, if it has a substantial direct effect on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. We have analyzed this rule under the Order and have 
determined that it does not have implications for federalism.

F. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) 
requires federal agencies to assess the effects of their discretionary 
regulatory actions. In particular, the Act addresses actions that may 
result in the expenditure by a State, local, or tribal government, in 
the aggregate or by the private sector of $100,000,000 (adjusted for 
inflation) or more in any one year. This rule will not result in such 
an expenditure.

G. Private Property

    This rule will not cause a taking of private property or otherwise 
have takings implications under Executive Order 12630, Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights.

H. Civil Justice Reform

    This rule meets applicable standards in section 3(a) and 3(b)(2) of 
Executive Order 12988, Civil Justice Reform, to minimize litigation, 
eliminate ambiguity, and reduce burden. DHS has determined that this 
rule meets the requirements of E.O. 12988 because it does not involve 
any retroactive effects, preemptive effects, or any other matters 
addressed in E.O. 12988.

I. Energy Effects

    We have analyzed this rule under Executive Order 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. We have determined that it is not a ``significant 
energy action'' under that order because it is not a ``significant 
regulatory action'' under Executive Order 12866 and will not have a 
significant adverse effect on the supply, distribution, or use of 
energy.

J. Technical Standards

    The National Technology Transfer and Advancement Act (NTTAA) (15 
U.S.C. 272 note) directs agencies to use voluntary consensus standards 
in their regulatory activities unless the agency provides Congress, 
through the Office of Management and Budget, with an explanation of why 
using these standards would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., specifications of materials, performance, design, or 
operation; test methods; sampling procedures; and related management 
systems practices) that are developed or adopted by voluntary consensus 
standards bodies. This rule does not use technical standards. 
Therefore, we did not consider the use of voluntary consensus 
standards.

K. National Environmental Policy Act

    U.S. Department of Homeland Security Management Directive (MD) 023-
01 establishes procedures that the Department and its components use to 
comply with the National Environmental Policy Act of 1969 (NEPA), 42 
U.S.C. 4321-4375, and the Council on Environmental Quality (CEQ) 
regulations for implementing NEPA, 40 CFR parts 1500-1508. CEQ 
regulations allow federal agencies to establish categories of actions 
which do not individually or cumulatively have a significant effect on 
the human environment and, therefore, do not require an Environmental 
Assessment or Environmental Impact Statement. 40 CFR 1508.4. DHS MD 
023-01 lists the Categorical Exclusions that the Department has found 
to have no such effect. MD 023-01 app. A tbl.1.
    This final rule amends 8 CFR part 293 to change the interest rate 
for immigration bonds secured by cash from a fixed rate of 3 percent 
per year to a rate determined by the Secretary of the Treasury, 
provided that the rate does not exceed 3 percent per year and is not 
less than 0. DHS has analyzed this rule under MD 023-01. ICE has 
determined that this action is one of a category of actions which does 
not individually or cumulatively have a significant effect on the human 
environment. This rule clearly fits within the two Categorical 
Exclusions found in MD 023-01, Appendix A, Table 1: A3(a): 
``Promulgation of rules . . . of a strictly administrative and 
procedural nature''; and A3(d): ``Promulgation of rules . . . that 
interpret or amend an existing regulation without changing its 
environmental effect.'' This rule is not part of a larger action. This 
rule presents

[[Page 34242]]

no extraordinary circumstances creating the potential for significant 
environmental effects. Therefore, this rule is categorically excluded 
from further NEPA review.

List of Subjects in 8 CFR Part 293

    Administrative practice and procedure, Aliens, Bonds, Immigration, 
Interest rate.

Amendments to the Regulations

    For the reasons discussed in the preamble, DHS amends 8 CFR part 
293 as follows:

PART 293--DEPOSIT OF AND INTEREST ON CASH RECEIVED TO SECURE 
IMMIGRATION BONDS

0
1. Revise the authority citation for part 293 to read as follows:

    Authority: 8 U.S.C. 1363.

0
2. Revise Sec.  293.1 to read as follows:

Sec.  293.1  Computation of interest.

    The Secretary of the Treasury determines the rate at which an 
immigration bond secured by cash shall bear interest, consistent with 8 
CFR 293.2. Interest shall be computed from the deposit date to and 
including the refund date or breach date of the immigration bond. For 
purposes of this part, the deposit date shall be the date shown on the 
receipt for the cash received as security on an immigration bond. The 
refund date shall be the date upon which the interest is certified to 
the Treasury Department for payment. The breach date shall be the date 
the immigration bond was breached as shown on Form I-323--``Notice--
Immigration Bond Breached.'' In counting the number of days for which 
interest shall be computed, the day on which the cash was deposited 
shall not be counted; however, the refund date or the breach date shall 
be counted.

0
3. Revise Sec.  293.2 to read as follows:


Sec.  293.2  Interest rate.

    Interest on cash deposited to secure immigration bonds will be at 
the rate as determined by the Secretary of the Treasury, but in no case 
will exceed 3 per centum per annum or be less than zero. The rate will 
be published by Treasury on the Treasury Web site or through another 
mechanism.

0
4. Revise Sec.  293.3 to read as follows:


Sec.  293.3  Time of payment.

    Interest shall be paid only at time of disposition of principal 
cash when the immigration bond has been cancelled or declared breached.


Sec.  293.4  [Removed]

0
5. Remove Sec.  293.4.

Jeh Charles Johnson,
Secretary of Homeland Security.
[FR Doc. 2015-14675 Filed 6-15-15; 8:45 am]
 BILLING CODE 9111-28-P