[Federal Register Volume 71, Number 200 (Tuesday, October 17, 2006)]
[Rules and Regulations]
[Pages 60847-60848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-17225]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 224

RIN-1510-AB08


Federal Process Agents of Surety Corporations

AGENCY: Financial Management Service, Fiscal Service, Treasury.

ACTION: Final rule.

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SUMMARY: The Financial Management Service (FMS) is revising its 
regulation governing the appointment of Federal process agents of 
surety corporations to allow for the appointment of a state official as 
a process agent. We are also revising the regulation by removing the 
requirement that all surety corporations appoint a process agent in the 
District of Columbia, regardless of whether the surety corporation 
provides bonds in the District of Columbia. Finally, we are updating 
obsolete contact information and references in the regulation.

DATES: This rule is effective on October 17, 2006.

FOR FURTHER INFORMATION CONTACT: Rose M. Miller, Manager, Surety Bond 
Branch, at 202-874-6850 or [email protected]; or William Erle, 
Senior Counsel, at 202-874-6680 or [email protected].

SUPPLEMENTARY INFORMATION:

Background

    31 U.S.C. 9306 was amended November 29, 1999 to allow a surety 
corporation to appoint a State official as its process agent. This 
means that surety corporations conducting business in more than one 
judicial district in a state can appoint a State official to receive 
service of process on the corporation, thereby saving surety 
corporations from having to appoint an agent in each judicial district 
of that State. Prior to the amendment, a surety did not have the option 
of appointing a State official as its process agent to satisfy the 
service of process requirement. This revised rule makes the regulation 
at 31 CFR Part 224 consistent with 31 U.S.C. 9306 by providing for the 
appointment of State officials as process agents.
    An additional change relates to the requirement currently found in 
31 CFR 224.2(a)(3) which requires that an agent be appointed for 
service of process ``in the District of Columbia where the bond is 
returnable and filed.'' This requirement applies to all surety 
corporations whether or not the corporation contemplates the writing of 
bonds in favor of the United States to be undertaken within the 
District of Columbia. Requiring companies to appoint an agent in the 
District of Columbia, when they are not incorporated in the District of 
Columbia, and do not write bonds in the District of Columbia, is an 
unnecessary financial burden on the companies. FMS can see no benefit 
to the Federal government in maintaining this requirement since, as a 
matter of practice, Federal bonds are not necessarily returnable and 
filed in the District of Columbia. The revised rule eliminates this 
requirement.
    The sample power of attorney form currently found in 31 CFR 224.4 
is replaced with a reference to the Surety Bond Branch Web page. Moving 
the form to the Web page will allow the sample power of attorney form 
to be updated more easily. Also, it will provide surety corporations 
with easy access to an electronic version of the form.

[[Page 60848]]

    Finally, 31 CFR 224.6 currently states that a listing of the 
divisional offices of the court in each judicial district may be 
obtained from the Surety Bond Branch, Financial Management Service, 
U.S. Department of the Treasury. This information is available directly 
from the U.S. Courts. Therefore, the regulation is revised to provide 
the contact information for the U.S. Courts.

Regulatory Analyses

    Administrative Procedure Act. We did not publish a Notice of 
Proposed Rulemaking (NPRM) for this regulation. Under 5 U.S.C. 
553(b)(B), a rule is exempt from notice and comment rulemaking 
requirements if the agency finds that notice and public comment are 
unnecessary or contrary to the public interest. This rule reflects 
provisions that are already in effect as a matter of law. The changes 
will have no substantive effect on the public; therefore, it is 
unnecessary to publish an NPRM. Likewise, for the same reasons a 
delayed effective date is not required.
    Clarity of Regulations. Executive Order 12866 requires each agency 
to write regulations that are easy to understand. We invite comment on 
how to make this rule clearer. For example, you may wish to discuss: 
(1) Whether we have organized the material to suit your needs; (2) 
whether the requirements of the rule are clear; or (3) whether there is 
something else we could do to make this rule easier to understand.
    Executive Order 12866. FMS has determined that this regulation is 
not a significant action as defined in Executive Order 12866. 
Therefore, a regulatory assessment is not required.
    Regulatory Flexibility Act. Because no notice of proposed 
rulemaking is required, the provisions of the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.) do not apply.


List of Subjects in 31 CFR Part 224

    Bonding, Insurance, Insurance companies, Sureties, Surety bonds, 
Process agents.


0
For the reasons set forth in the preamble, 31 CFR part 224 is revised 
as follows:

PART 224--FEDERAL PROCESS AGENTS OF SURETY CORPORATIONS

Sec.
224.1 What does this part cover?
224.2 Definitions.
224.3 When may a surety corporation provide a bond without 
appointing a process agent?
224.4 When must a surety corporation appoint a process agent?
224.5 Who may a surety corporation appoint to be a process agent?
224.6 Where can I find a sample power of attorney form?
224.7 Where can I find a list of United States district court 
offices?
224.8 When must a surety corporation appoint a new process agent?

    Authority: 31 U.S.C. 9306 and 9307.


Sec.  224.1  What does this part cover?

    This part provides guidance on when a surety corporation must 
appoint a service of process agent and how the surety corporation 
complies with this requirement.


Sec.  224.2  Definitions.

    For purposes of this regulation:
    (a) Principal means the person or entity required to provide a 
surety bond.
    (b) Process agent means a resident agent for service of process.
    (c) State means a State, the District of Columbia, or a territory 
or possession of the United States.


Sec.  224.3  When may a surety corporation provide a bond without 
appointing a process agent?

    A surety corporation may provide a bond without appointing a 
process agent when the State where the bond is filed, the State where 
the principal resides, and the State where the surety corporation is 
incorporated are the same.


Sec.  224.4  When must a surety corporation appoint a process agent?

    A surety corporation must appoint a process agent when either the 
State where the bond is filed or the State where the principal resides 
is different from the State where the surety corporation is 
incorporated. In such a case, the surety corporation must appoint a 
process agent in each such State that is different from the State where 
the surety is incorporated.


Sec.  224.5  Who may a surety corporation appoint to be a process 
agent?

    A surety corporation may appoint either of the following as process 
agent--(a) An official of the State who is authorized or appointed 
under the law of that jurisdiction to receive service of process on the 
surety corporation; or
    (b) An individual who resides in the jurisdiction of the district 
court for the district in which a surety bond is filed and who is 
appointed by the surety corporation by means of a power of attorney. A 
certified copy of the power of attorney must be filed with the clerk of 
the district court for the district in which a surety bond is to be 
provided. In addition, the surety corporation must provide the clerk of 
the United States District Court at the main office in each judicial 
district with the required number of authenticated copies of the power 
of attorney for each divisional office of the court within that 
judicial district.


Sec.  224.6  Where can I find a sample power of attorney form?

    The Surety Bond Branch provides a sample form on its Web page 
located at: http://www.fms.treas.gov/c570. While use of the sample form 
is not required, any power of attorney provided should be substantially 
the same as the sample form.


Sec.  224.7  Where can I find a list of United States district court 
offices?

    A list of the divisional offices of the court in each judicial 
district may be obtained from the Federal Judiciary, U.S. Courts Web 
page at http://www.uscourts.gov, or by mail by writing to: Office of 
Public Affairs, Administrative Office of the U.S. Courts, Washington, 
DC 20544.


Sec.  224.8  When must a surety corporation appoint a new process 
agent?

    The surety corporation must immediately appoint a new process agent 
whenever the authority of a process agent is terminated by reason of 
revocation, disability, removal from the district, or any other cause.

    Dated: October 11, 2006.
Kenneth R. Papaj,
Commissioner.
 [FR Doc. E6-17225 Filed 10-16-06; 8:45 am]
BILLING CODE 4810-35-P