A bill to require the payment of interest on certain funds of the United States held on deposit in commercial banks, to provide for reimbursement of commercial banks for services performed for the United States.

(Reported to Senate from the Committee on Banking, Housing and Urban Affairs with amendment, S. Rept. 94-1150)

Amends the Federal Reserve Act to provide that nothing in the Act or in any regulation may be construed as prohibiting interest payments on demand deposits which consist of public funds of the United States or of any State or political subdivision of a State.

Amends the Federal Deposit Insurance Act to direct the Board of Directors of the Federal Deposit Insurance Corporation to issue regulations permitting payment of interest on public funds demand deposits in insured banks which are not members of the Federal Reserve System.

Authorizes the Secretary of the Treasury to invest any portion of the Treasury's operating cash for periods up to 90 days.

Requires the Federal Reserve Board to study and report to Congress on the likely effects of a repeal of the general prohibition against payment of interest on demand deposits.

Extends until June 30, 1977, the moratorium on State and local "doing business" taxes on out-of-State financial depository institutions under the State Taxation of Depositories Act.

Adds New York and New Jersey to the list of States in which NOW accounts are permitted, contingent on legislation within the respective States granting third party payment transfer authority to State-chartered thrift institutions.

Prohibits in the States of New York and New Jersey the payment of interest on NOW accounts offered by federally chartered financial institutions until State-chartered thrift institutions are permitted to do so under State law.