Debt Management
Final rule.
CFR Part: "7 CFR Part 3"; "7 CFR Part 400"; "7 CFR Parts 761, 765, 766, 772, and 792"; "7 CFR Part 1403"; "7 CFR Parts 1951 and 1956"
RIN Number: "RIN 0560-AA16"
Citation: "85 FR 36670"
Document Number: "Docket ID USDA-2019-0007"
Page Number: "36670"
"Rules and Regulations"
Agency: "
SUMMARY: The general debt management regulations of the
DATES: Effective:
FOR FURTHER INFORMATION CONTACT: For information, contact
SUPPLEMENTARY INFORMATION:
Background The regulations in 7 CFR part 3 (part 3) specify the general regulations applicable to debt collection activities of
The amendments made by this final rule incorporate the results of this review by CCC, FSA, the
FSA's principal debt settlement regulations that supplement part 3 have been in 7 CFR part 792. In addition, regulations in 7 CFR parts 1951 and 1956 have been used by FSA in the settlement and adjustments of FSA farm loans made under the
RD also has debt settlement authority under the ConAct and The Housing Act of 1949 (Housing Act). The following list of RD's implementing debt settlement regulations authorized by the ConAct and the Housing Act that are excepted from part 3 are:
* 7 CFR part 1717, subpart Y;
* 7 CFR part 1752;
* 7 CFR 1782.20;
* 7 CFR 1951.213;
* 7 CFR part 1956;
* 7 CFR part 3550, subpart F;
* 7 CFR 3560.457; and
* 7 CFR 3565.56.
Additionally, 7 CFR part 1951, subpart C, RD regulations that previously implemented the Debt Collection Improvement Act are being replaced by part 3 and therefore are being removed, as stated above.
Exceptions are included in the regulation for CCC and FCIC. CCC and FCIC are wholly-owned government corporations and each have independent settlement authority under their respective authorizing laws. Accordingly, while the debt collection regulations for these entities have been deleted, provisions have been included in part 3 to recognize the ability of these corporations to settle and adjust claims without referral to the
NRCS, FAS, and RMA do not have agency specific debt collection regulations and currently follow part 3. Accordingly, no action was necessary to delete existing regulations or revise part 3.
This rule also revises subpart I of part 3 to update the amount of civil monetary penalties that may be levied by
Effective Date and Notice and Comment
The action taken by this rule: Consolidates at 7 CFR part 3 existing debt collection regulations used by certain
Because the action to update existing regulations is ministerial and the adjustment to civil monetary penalties is required by the 2015 Civil Penalties Act,
Accordingly, this rule is effective upon publication in the
Executive Orders 12866, 13563, 13771, and 13777
Executive Order 12866, "Regulatory Planning and Review," and Executive Order 13563, "Improving Regulation and Regulatory Review," direct agencies to assess all 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 emphasized the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The requirements in Executive Orders 12866 and 13573 for the analysis of costs and benefits apply to rules that are determined to be significant. Executive Order 13777, "Enforcing the Regulatory Reform Agenda," established a federal policy to alleviate unnecessary regulatory burdens on the American people.
Executive Order 13771, "Reducing Regulation and Controlling Regulatory Costs," requires that, in order to manage the private costs required to comply with Federal regulations, for every new significant or economically significant regulation issued, the new costs must be offset by the elimination of at least two prior regulations. As this rule is designated not significant, it is not subject to Executive Order 13771. In a general response to the requirements of Executive Order 13777,
Regulatory Flexibility Act
The Regulatory Flexibility Act generally requires an agency to prepare a regulatory flexibility analysis of any rule whenever the Administrative Procedure Act or any other law requires an agency to publish a proposed rule, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. This rule is not subject to the Regulatory Flexibility Act because
Environmental Review
The action taken by this rule is ministerial in nature in that the purpose of the rule is to eliminate obsolete regulations and to consolidate current debt collection regulations of three UDSA agencies at one
Executive Order 12372
Executive Order 12372, "Intergovernmental Review of Federal Programs," requires consultation with State and local officials that would be directly affected by proposed Federal financial assistance. The objectives of the Executive Order are to foster an intergovernmental partnership and a strengthened federalism, by relying on State and local processes for State and local government coordination and review of proposed Federal financial assistance and direct Federal development. For reasons specified in the final rule related notice regarding 7 CFR part 3015, subpart V (48 FR 29115,
Executive Order 12988
This rule has been reviewed under Executive Order 12988, "Civil Justice Reform." This rule will not preempt State or local laws, regulations, or policies unless they represent an irreconcilable conflict with this rule. The rule will not have retroactive effect. Before any judicial action may be brought regarding the provisions of this rule, the administrative appeal provisions identified in 7 CFR part 3 must be exhausted.
Executive Order 13132
This rule has been reviewed under Executive Order 13132, "Federalism." The policies contained in this rule do not have any substantial direct effect on States, on the relationship between the Federal government and the States, or on the distribution of power and responsibilities among the various levels of government, except as required by law. Nor does this rule impose substantial direct compliance costs on State and local governments. Therefore, consultation with the States is not required.
Executive Order 13175
This rule has been reviewed in accordance with the requirements of Executive Order 13175, "Consultation and Coordination with Indian Tribal Governments." Executive Order 13175 requires Federal agencies to consult and coordinate with Tribes on a government-to-government basis on policies that have Tribal implications, including regulations, legislative comments, proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes or on the distribution of power and responsibilities between the Federal Government and Indian Tribes.
The
The Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) requires Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments or the private sector. Agencies generally must prepare a written statement, including a cost benefit analysis, for proposed and final rules with Federal mandates that may result in expenditures of
E-Government Act Compliance
Federal Assistance Programs
This rule does not provide any new
Paperwork Reduction Act
This rule does not create any new information collection requirements as the agencies affected by this rule will continue to conduct debt collection activities in the same manner as before this rule. Due to the nature of this rule, the information collection is exempted from the Paperwork Reduction Act as specified in 5 CFR 1320.4(a)(2) because the nature of the information collection activities is that the
List of Subjects
7 CFR Part 3
Administrative practice and procedure, Claims, Government employees, Income taxes, Loan programs-agriculture, Penalties, Reporting and recordkeeping requirements, Wages.
7 CFR Part 400
Acreage allotments, Administrative practice and procedure, Claims, Crop insurance, Fraud, Government employees, Income taxes, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements, Wages.
7 CFR Part 761
Accounting, Loan programs-agriculture, Rural areas.
7 CFR Part 765
Agriculture, Agricultural commodities, Credit, Livestock, Loan programs-agriculture.
7 CFR Part 766
Agriculture, Agricultural commodities, Credit, Livestock, Loan programs-agriculture.
7 CFR Part 772
Agriculture, Loan programs-agriculture, Rural areas.
7 CFR Part 792
Claims, Income taxes.
7 CFR Part 1403
Claims, Income taxes, Loan programs-agriculture.
7 CFR Part 1951
Accounting, Agriculture, Claims, Community facilities, Credit, Disaster assistance, Government employees, Grant programs-housing and community development, Housing, Income taxes, Loan programs-agriculture, Loan programs-housing and community development, Low and moderate income housing, Reporting and recordkeeping requirements, Rural areas, Wages.
7 CFR Part 1956
Accounting, Business and industry, Claims, Loan programs-agriculture, Loan programs-business, Loan programs-housing and community development, Reporting and recordkeeping requirements, Rural areas.
Under the authority of 5 U.S.C. 301, 7 U.S.C. 1506, and 15 U.S.C. 714b and as discussed in the preamble,
1. Revise part 3 to read as follows:
PART 3--DEBT MANAGEMENT
Subpart A--General
Sec.
3.1Purpose and scope.
3.2Authority.
3.3Definitions.
3.4Delegations of authority.
Subpart B--Standards for the Administrative Collection and Compromise of Claims
3.10Aggressive agency collection activity.
3.11Demand for payment.
3.12Reporting debts to Credit Reporting Agencies.
3.14Suspension or revocation of eligibility for loans and loan guarantees, licenses, permits, or privileges.
3.15Liquidation of collateral.
3.16Collection in installments.
3.17Interest, penalties, and administrative costs.
3.18Use and disclosure of mailing addresses.
3.19Standards for the compromise of claims and debt settlement.
3.20Standards for suspending or terminating collection activities.
3.21Referrals of debts to Justice.
3.22CCC withholding of payment.
3.23CCC assignment of payment.
Subpart C--Referral of Debts to
3.30General requirements.
3.31Mandatory referral for cross-servicing.
3.32Discretionary referral for cross-servicing.
3.33Required certification.
3.34Fees.
Subpart D--Administrative Offset
3.40Scope.
3.41Procedures for notification of intent to collect by administrative offset.
3.42Debtor rights to inspect or copy records, submit repayment proposals, or request administrative review.
3.43Non-centralized administrative offset.
3.44Centralized administrative offset.
3.45USDA payment authorizing agency offset of pro rata share of payments due entity in which debtor participates.
3.46Offset against tax refunds.
3.47Offset against amounts payable from
Subpart E--Administrative Wage Garnishment
3.50Purpose.
3.51Scope.
3.52Definitions.
3.53Procedures.
Subpart F--Administrative Reviews for Administrative Offset, Administrative Wage Garnishment, and Disclosure to Credit Reporting Agencies
3.60Applicability.
3.61Presiding employee.
3.62Procedures.
Subpart G--Federal Salary Offset
3.70Scope.
3.71Definitions.
3.72Coordinating offset with another Federal agency.
3.73Determination of indebtedness.
3.74Notice requirements before offset.
3.75Request for a hearing.
3.76Result if employee fails to meet deadlines.
3.77Hearing.
3.78Written decision following a hearing.
3.79Review of
3.80Written agreement to repay debts as alternative to salary offset.
3.81Procedures for salary offset: when deductions may begin.
3.82Procedures for salary offset: types of collection.
3.83Procedures for salary offset: methods of collection.
3.84Procedures for salary offset: imposition of interest, penalties, and administrative costs.
3.85Non-waiver of rights.
3.86Refunds.
3.87Agency regulations.
Subpart H--Cooperation with the
3.90Reporting discharged debts to the
Subpart I--Adjusted Civil Monetary Penalties
3.91Adjusted civil monetary penalties.
Authority:5 U.S.C. 301; 7 U.S.C. 1506, 1981, 1981a, 1981d, and 2008h; 15 U.S.C. 714b; 31 U.S.C. 3701, 3711, 3716-18, and 3720B; and 31 CFR parts 285 and 901-904.
Subpart A--General
(a)(1) The regulations in this part prescribe standards and procedures for use by
(2) The regulations in this part apply to all debts of
(3) The regulations in this part do not preclude the Secretary from collection, compromise, suspension, or termination of debts as otherwise authorized by law. In such cases the laws and implementing regulations that are specifically applicable to claims collection activities of a particular agency generally will take precedence over this part.
(b)
(c) The regulations of this part will not apply to:
(1) Collection of debts owed government travel card contractors by
(2) Collection of debts owed by individual Food Stamp Program recipients for whom debt collection procedures are provided under
(3) Collection of debts owed by foreign governments and, sovereign institutions of foreign governments.
(4) Actions pursuant to the FSA FLP Debt Settlement regulations in part 761, subpart F, of this title are authorized under the
(5) Actions pursuant to the following RD Debt Settlement regulations authorized under the ConAct and the Housing Act, which are independent of the DCIA are excepted from this part:
(i) 7 CFR part 1717, subpart Y;
(ii) 2 CFR part 175;
(iii) 7 CFR 1782.20;
(iv) 7 CFR 1951.213;
(v) 7 CFR part 1956;
(vi) 7 CFR part 3550, subpart F;
(vii) 7 CFR 3560.457; and
(viii) 7 CFR 3565.56.
(a) Generally, the regulations in this part are issued under the Debt Collection Act of 1982, as amended by the Debt Collection Improvement Act of 1996 (DCIA) (31 U.S.C. 3701, 3711-3720) and the Federal Claims Collection Standards (FCCS) issued pursuant to the DCIA by
(b) With respect to agency specific provisions of this part, the following authorities are applicable:
(1)
(2) The
(3) The
For the purpose of this part, except as where otherwise specifically provided, the term or terms:
Account means a record of transactions involving the debt, claim, or loan for a particular person or entity, including the name, address, taxpayer identification number, other information necessary to establish the person's or entity's identity, the balance, status, history of the debt, and program under which the debt or claim arose.
Administrative charges means the additional costs of processing delinquent debts against the debtor, to the extent such costs are attributable to the delinquency. Such costs include, but are not limited to, costs incurred in obtaining a credit report, costs of employing commercial firms to locate debtor, costs of employing contractors for collection services, and costs of selling collateral or property to satisfy the debt.
Administrative offset means withholding funds payable by
Agency means an agency, office, or corporation within
Borrower and debtor have the same meaning and refer to a person who owes a delinquent, nontax debt to
Carrier means a person or other entity, including but not limited to railroads, motor carriers, ocean carriers or inter-modal marketing companies, that provide transportation or other transportation-related services for compensation.
CCC means
Centralized administrative offset means referral of a debt to the Treasury Offset Program (TOP) to collect debts that creditor agencies have certified pursuant to 31 U.S.C. 3716(c), 3720A(a), and applicable regulations for offset of payments made to a debtor by Federal agencies other than
CFO means Chief Financial Officer.
Civil monetary penalties are assessed for violations and failures to comply with various program requirements. The management and settlement of these debts are specified in this part, and the applicable laws and program specific regulations.
Claim and debt have the same meaning and refer to an amount of money, funds, or property that has been determined by an agency official to be owed to
Compromise means the settlement or forgiveness of a debt under 31 U.S.C. 3711, in accordance with standards specified in FCCS and applicable federal law.
Contracting officer has the same meaning as in 41 U.S.C. 7101.
Credit reporting agencies (also known as credit bureaus) means major credit reporting agencies that have signed agreements with agencies to receive and integrate credit information (data) from voluntary subscribers (Federal agencies and private sector entities) into their respective databases for the purpose of generating credit reports for sale to purchasers of credit data.
Creditor agency means a Federal agency or
Cross-servicing means the centralized collection of Federal debt and the various collection actions taken by
Day means calendar day unless otherwise specified.
DCIA means the Debt Collection Improvement Act of 1996.
Debt means an amount of money, funds, or property that has been determined by an agency official to be owed to
Debt collection center means the
Debt record means the account, register, balance sheet, file, ledger, data file, or similar record of debts owed to any Federal agency with respect to which collection action is being pursued.
Debtor means a person who owes a delinquent, nontax debt to
Delinquent means a debt that has not been paid by the date specified in the agency's initial written demand for payment or applicable agreement or instrument (including a post-delinquency payment agreement), unless other satisfactory payment arrangements have been made, or as otherwise defined by program specific statutes or regulations.
Discharged debt means any debt, or part thereof, that an agency has determined is uncollectible and has closed out or, in the case of FSA FLP, means the amount of debt that was discharged through bankruptcy proceedings where no further collection actions may be taken on that debt.
Disposable pay means that part of the debtor's compensation (including, but not limited to, salary, bonuses, commissions, and vacation pay) from an employer remaining after the deduction of health insurance premiums and any amounts required by law to be withheld including social security taxes and other withholding taxes, but not including any amount withheld pursuant to a court order.
Federal agency means any department or entity within the Executive branch of the government that is not a
Financial statement means a statement of financial condition at a given date that accurately reflects the debtor's assets, liabilities, income, and expenses.
Fiscal Service means the
Foreign debt means debt owed by a sovereign or non-sovereign entity, when the debt is subject to adjudication in a non-
FSA FLP means the Farm Loan Programs of FSA.
Government or Federal government means the government of
Justice means the
Late payment interest rate means the amount of interest charged on delinquent debts and claims in cases where the annual rate of interest is not established by a promissory note. Unless otherwise provided by the law, regulation, contract, or agreement that established the debt, the late payment interest rate will be equal to the higher of the Prompt Payment Act interest rate or the standard late payment rate prescribed by 31 U.S.C. 3717, as of the date the debt became delinquent. Interest on delinquent debts will accrue on a daily basis.
NAD means the
Non-centralized administrative offset means an agreement between a
Offset means withholding funds payable by
OGC means the
Payee means a person who is due a payment from a payment authorizing agency and includes a person who is entitled to all or part of a payment.
Payment authorizing agency means a Federal agency or
Penalty charge or penalty interest means the additional penalty amount charged on delinquent debts as specified in 31 U.S.C. 3717(e)(2) and
Person means an individual, corporation, partnership, association, organization, State or local government, or any other type of public or private entity other than a Federal agency.
Recoupment means a special method for adjusting debts arising under the same transaction or occurrence, such as obligations arising under the same contract.
Reviewing officer means a person designated by a creditor agency as responsible for conducting a hearing or providing documentary review on the existence of the debt and the propriety of an administrative collection action.
Salary offset means the deduction of money from the current pay account of a present or former Government employee as specified in 5 U.S.C. 5514 to satisfy a debt that person owes the Government.
Secretary means the Secretary of Agriculture, unless otherwise specified.
Settlement or debt settlement means, for the purposes of this part only, the final disposition or resolution of a debt or claim that results in cancellation of any remaining balance owed and reporting of the canceled amount to the
Tax Identification Number or TIN means the identification number required on tax returns and other documents submitted to the
TOP means Treasury Offset Program, which is a centralized offset program that collects delinquent debts owed to Federal agencies and states.
Withholding of payment means the action taken to temporarily prevent the payment of some or all amounts to a debtor under one or more contracts or programs.
The head of an agency is authorized to exercise any or all of the functions provided by this part with respect to programs for which the head of the agency has delegated responsibility and may delegate and authorize the redelegation of any of the functions vested in the head of the agency by this part, except as otherwise provided by this part.
Subpart B--Standards for the Administrative Collection and Compromise of Claims
An agency will aggressively collect all debts arising out of activities of, or referred or transferred for collection services to, that agency. Collection activities will be undertaken promptly with follow-up action taken as necessary.
(a) Generally, debt collection is initiated with a written demand for payment to the debtor unless an applicable agreement or instrument (including a post-delinquency payment agreement) provides otherwise (such as providing
(b) In demand letters, the
(1) The nature and amount of the debt; and the facts giving rise to the debt;
(2) How interest, penalties, and administrative costs are added to the debt, the date by which payment must be made to avoid such charges, and that such assessments must be made unless excused in accordance with
(3) The date by which payment should be made to avoid the enforced collection actions described in paragraph (b)(6) of this section;
(4) Of any willingness to discuss alternative payment arrangements and how the debtor may enter into a written agreement to repay the debt under terms acceptable to the agency (see
(5) The name, address, telephone number and email address (optional) of a contact person or office;
(6) The intent to enforce collection if the debtor fails to pay or otherwise resolve the debt, by taking one or more of the following actions:
(i) Offset the debtor's
(ii) Refer the debt to a private collection agency.
(iii) Report the debt to a credit reporting agency in accordance with
(iv) Refer the debt to
(v) Refer the debt to Justice in accordance with
(vi) Refer the debt to
(7) How the debtor may inspect and copy records related to the debt;
(8) How the debtor may request an administrative review of the determination that the debtor owes a debt and present evidence that the debt is not delinquent or legally enforceable (see subpart F of this part);
(9) How a debtor who is a Federal employee subject to Federal salary offset may request a hearing (see subpart G of this part);
(10) How a debtor may request a waiver of the debt, if applicable;
(11) How the debtor's spouse may claim his or her share of a joint income tax refund by filing Form 8379 with the
(12) How the debtor may exercise other statutory or regulatory rights and remedies available to the debtor;
(13) That certain debtors may be ineligible for government loans, guarantees, and insurance (see
(14) If applicable, the intention to suspend or revoke licenses, permits, or privileges (see
(15) That the debtor must advise the creditor agency of the filing of any bankruptcy proceedings of the debtor or of another person liable for the debt being collected.
(16) The debtor's right to appeal the determination in accordance with applicable appeal procedures;
(17) The debtor's right to present evidence that all or part of the debt is not past-due or not legally enforceable.
(c) A
(d) Agencies will exercise care to ensure that demand letters are mailed or delivered (as applicable for the program) on the same day that they are dated. There is no prescribed format for demand letters. Agencies will utilize demand letters and procedures that will lead to the earliest practicable determination of whether the debt can be resolved administratively or must be referred for litigation.
(e) Agencies will respond promptly to communications from debtors, within 30 days of receipt whenever feasible, and will advise debtors who dispute debts to furnish available evidence to support their contentions.
(f) Prior to the initiation of the demand process or at any time during or after completion of the demand process, if an agency determines to pursue, or is required to pursue, administrative offset, the procedures applicable to offset must be followed (see subpart D of this part). The availability of funds or money for debt satisfaction by administrative offset, and the agency's determination to pursue collection by administrative offset, will release the agency from the necessity of further compliance with paragraphs (a), (b), and (c) of this section.
(g) Prior to referring a debt for litigation under 31 CFR part 904, agencies will advise each debtor determined to be liable for the debt that, unless the debt can be collected administratively, litigation may be initiated. This notification complies with Executive Order 12988 (58 FR 51735,
(h) When an agency learns that a bankruptcy petition has been filed with respect to a debtor, before proceeding with further collection action, the agency will immediately request legal advice from OGC concerning the impact of the Bankruptcy Code on any pending or contemplated collection activities. Unless the agency is advised that the automatic stay imposed at the time of filing pursuant to 11 U.S.C. 362 has been lifted or is no longer in effect, in most cases collection activity against the debtor must stop immediately. The agency should take the following steps:
(1) After requesting legal advice, a proof of claim must be filed in most cases with the bankruptcy court or the Trustee. Agencies will refer to the provisions of 11 U.S.C. 106 relating to the consequences on sovereign immunity of filing a proof of claim.
(2) If the agency is a secured creditor, it may request relief from the automatic stay regarding its security, subject to the provisions and requirements of 11 U.S.C. 362.
(3) Offset is stayed in most cases by the automatic stay. However, agencies may request legal advice from OGC to determine whether their payments to the debtor and payments of other agencies available for offset may be frozen by the agency until relief from the automatic stay can be obtained from the bankruptcy court. Agencies also may request legal advice from OGC to determine whether recoupment is available.
(a) In demand letters to debtors sent in accordance with
(1) The intent of the agency to report the delinquent debt to credit reporting agencies after 60 days;
(2) The specific information to be transmitted (that is, name, address, and taxpayer identification number, information about the debt);
(3) The actions which may be taken by the debtor to prevent the reporting (that is, repayment in full or a repayment agreement); and
(4) The rights of the debtor to request review of the existence of the debt in accordance with subpart F of this part.
(b) Disclosure of delinquent consumer debts must be consistent with the requirements of 31 U.S.C. 3711(e), the Privacy Act of 1974 (5 U.S.C. 552a), the Bankruptcy Code, and 31 CFR 901.4.
(c) When an agency has given a debtor any of the notices required by this part and an opportunity for administrative review under subpart F of this part, the agency need not duplicate such notice and review opportunities before reporting the delinquent debt to credit reporting agencies.
(d) Agencies will not disclose a delinquent debt to a credit reporting agency if a debtor requests review under subpart F of this part until a final determination is made by a reviewing official that upholds the agency intent to disclose.
(a) Agencies are not permitted to extend financial assistance in the form of a loan, loan guarantee, or loan insurance to any person delinquent on a nontax debt owed to a Federal agency, except as otherwise authorized by law or upon waiver of application of this section by the
(b) Similarly, agencies also are not permitted to extend financial assistance (either directly or indirectly) in the form of grants, loans, or loan guarantees to judgment debtors who have a judgment lien placed against their property until the judgment is satisfied, unless the agency grants a waiver in accordance with agency regulations. See 31 U.S.C. 3720B.
(c) In non-bankruptcy cases, agencies pursuing the collection of statutory penalties, forfeitures, or other types of claims must consider the suspension or revocation of licenses, permits, or other privileges for any inexcusable or willful failure of a debtor to pay such a debt in accordance with the agency's regulations or governing procedures. The debtor will be advised in the agency's written demand for payment of the agency's ability to suspend or revoke licenses, permits, or privileges.
(d) Any agency making, guaranteeing, insuring, acquiring, or participating in, loans must consider suspending or disqualifying any lender, contractor, or broker from doing further business with the agency or engaging in programs sponsored by the agency if such lender, contractor, or broker fails to pay its debts to the government within a reasonable time or if such lender, contractor, or broker has been suspended, debarred, or disqualified from participation in a program or activity by
(e) The failure of any surety to honor its obligations in accordance with 31 U.S.C. 9305 will be reported to
(f) The suspension or revocation of licenses, permits, or privileges also may extend to
(g) In bankruptcy cases, before advising the debtor of an agency's intention to suspend or revoke licenses, permits, or privileges, agencies may request legal advice from OGC concerning the impact of the Bankruptcy Code, particularly 11 U.S.C. 362 and 525, which may restrict such action.
(a) In accordance with applicable laws and regulations, agencies may liquidate security or collateral through a sale or a nonjudicial foreclosure and apply the proceeds to the applicable debt(s), if the debtor fails to pay the debt(s) within a reasonable time after demand and if such action is in the interest of
(b) When an agency learns that a bankruptcy petition has been filed with respect to a debtor, the agency may request legal advice from OGC concerning the impact of the Bankruptcy Code, including, but not limited to, 11 U.S.C. 362, to determine the applicability of the automatic stay and the procedures for obtaining relief from such stay prior to proceeding under paragraph (a) of this section.
(a) Whenever feasible, agencies will collect the total amount of a debt in one lump sum. If a debtor is financially unable to pay a debt in one lump sum, agencies may accept payment in regular installments. Agencies will obtain financial statements from debtors (or a similar statement from foreign debtors) who represent that they are unable to pay in one lump sum and independently verify such representations whenever possible (see 31 CFR 902.2(g) for methods of verification). Agencies that agree to accept payments in regular installments will obtain a legally enforceable written agreement from the debtor that specifies all terms of the arrangement and that contains a provision accelerating the debt in the event of default.
(b) The size and frequency of installment payments will bear a reasonable relation to the size of the debt and the debtor's ability to pay. If possible, the installment payments will be sufficient in size and frequency to liquidate the debt in 3 years or less.
(
(a) Except as provided in paragraphs (g) and (h) of this section, agencies will charge interest, penalties, and administrative costs on debts owed to
(b) Agencies will charge interest on debts owed
(1) Interest will accrue from the date of delinquency, or as otherwise provided by law.
(2) Unless otherwise established in a contract, repayment agreement, or by law, the rate of interest charged will be the rate established annually by the Secretary of the
(3) The rate of interest, as initially charged, will remain fixed for the duration of the indebtedness. When a debtor defaults on a repayment agreement and requests to enter into a new agreement, the agency may require payment of interest at a new rate that reflects the current value of funds to the
(c) Agencies will assess administrative costs incurred for processing and handling delinquent debts. The calculation of administrative costs will be based on actual costs incurred or upon estimated costs as determined by the assessing agency.
(d) Unless otherwise established in a contract, repayment agreement, or by law, agencies will charge a penalty, as specified in 31 U.S.C. 3717(e)(2), not to exceed six percent a year on the amount due on a debt that is delinquent for more than 90 days. This charge will accrue from the date of delinquency.
(e) Agencies may increase an "administrative debt" by the cost of living adjustment in lieu of charging interest and penalties under this section. "Administrative debt" includes, but is not limited to, a debt based on fines, penalties, and overpayments, but does not include a debt based on the extension of government credit, such as those arising from loans and loan guarantees. The cost of living adjustment is the percentage by which the Consumer Price Index for the month of June of the calendar year preceding the adjustment exceeds the Consumer Price Index for the month of June of the calendar year in which the debt was determined or last adjusted. Increases to administrative debts will be computed annually. Agencies may use this alternative only when there is a legitimate reason to do so, such as when calculating interest and penalties on a debt would be extremely difficult because of the age of the debt.
(f) When a debt is paid in partial or installment payments, amounts received by the agency will be applied first to outstanding penalties, second to administrative charges (when applicable), third to interest, and last to principal, except as otherwise required by law.
(g) Agencies will waive the collection of interest and administrative charges imposed pursuant to this section (that is, this does not apply to interest or administrative penalties determined by an applicable agreement or instrument such as a loan contract) on the portion of the debt that is paid within 30 days after the date on which interest began to accrue. Agencies may extend this 30-day period on a case-by-case basis. In addition, agencies may waive interest, penalties, and administrative costs charged under this section, in whole or in part, without regard to the amount of the debt, either under the criteria specified in the Federal standards for the compromise of debts (31 CFR part 902), or if the agency determines that collection of these charges is against equity and good conscience or is not in the interest of
(h) Agencies are authorized to impose interest and related charges on debts not subject to 31 U.S.C. 3717, in accordance with common law. Agencies will consult OGC before imposing interest and related charges under common law for any debt.
(i)(1) For debts resulting from CCC loans made in accordance with chapter XIV of this title:
(i) Late payment interest will begin to accrue from the date on which a claim is established. In addition, an additional charge of 3 percent per year will be assessed on a portion of a debt that remains unpaid 60 days after the date on which a claim was established. Such rate will be assessed retroactively from the date of claim establishment and apply on a daily basis and will continue to be used until the delinquent debt has been paid.
(ii) Penalty charges, administrative costs and interest will continue to accrue if a debtor makes a request for appeal as provided by any agency or
(2) Late payment interest provisions of this section do not apply to FSA and CCC debts owed by Federal agencies and State and local governments. Interest on debts owed by such entities will be assessed at the rate of interest charged by the
(3) Late payment interest, penalty charges, and administrative costs may be waived by FSA or CCC in full or in part, if it is determined by the agency that such action is in the Government's interest.
(4) The provisions of this section do not apply to CCC foreign debt.
(a) When attempting to locate a debtor in order to collect or compromise a debt under this part or 31 CFR parts 902 through 904 or other authority, agencies may send a request to
(b) Agencies are authorized to use mailing addresses obtained under paragraph (a) of this section to enforce collection of a delinquent debt and may disclose such mailing addresses to other agencies and to collection agencies for collection purposes.
(a) An agency will follow the standards specified in 31 CFR part 902 for the compromise of debts pursuant to 31 U.S.C. 3711 arising out of the activities of, or referred or transferred for collection services to, that agency, except where otherwise authorized or required by law.
(b) For FSA FLP debts, the first instance of debt cancellation is exempt from the monetary limits established in 31 CFR 902.1.
(c) For CCC debts, CCC will, in exercising its authority pursuant to section 4 of the CCC Charter Act (15 U.S.C. 714b) to make final and conclusive settlement and adjustment of any CCC claims, follow the standards specified in 31 CFR 902.2, 902.3, 902.4, 902.6, and 902.7, for the compromise of debts owed to CCC, to the maximum extent practicable. In addition to the bases for the compromise of debts specified in 31 CFR 902.2, CCC may compromise a debt when the approving official with the authority to compromise the debt has determined that such action is in the interest of CCC.
(a) An agency will follow the standards specified in 31 CFR part 903 for the suspension or termination of collection activity pursuant to 31 U.S.C. 3711, except where otherwise authorized or required by law.
(b) CCC will, in exercising its authority pursuant to section 4 of the CCC Charter Act (15 U.S.C. 714b) to make final and conclusive settlement and adjustment of any CCC claims, follow the standards specified in 31 CFR 903.2, 903.3, 903.4, and 903.5(c) and (d), for the suspension or termination of collection activities with regard to debts owed to CCC, to the maximum extent practicable. In addition to the bases for the termination of collection activities specified in 31 CFR 903.3, CCC may terminate collection activities when the approving official with the authority to terminate collection activities with regard to the debt has determined that such action is in the interest of CCC.
An agency will promptly refer to Justice for litigation debts on which aggressive collection activity has been taken in accordance with this part, and that cannot be compromised by the agency or on which collection activity cannot be suspended or terminated in accordance with 31 CFR parts 902 and 903. Agencies will follow the procedures specified in 31 CFR part 904 in making such referrals. Agencies will consult with OGC on all debts which are to be collected in foreign jurisdictions to determine how and if a referral to Justice will take place.
(a) CCC may temporarily withhold issuance of payment of some or all amounts to a debtor under one or more contracts or programs. Withholding of a payment prior to the completion of an applicable offset procedure may be made from amounts payable to a debtor by CCC to ensure that the interests of CCC and
(b) A payment may be withheld to protect the interests of CCC or
(1) There has been a serious breach of contract or violation of program requirements and the withholding action is considered necessary to protect the financial interests of CCC;
(2) There is substantial evidence of violations of criminal or civil fraud laws and criminal prosecution or civil fraud action is of primary importance to program operations of CCC;
(3) Prior experience with the debtor indicates that collection will be difficult if amounts payable to the debtor are not withheld;
(4) There is doubt that the debtor will be financially able to pay a judgment on the claim of CCC;
(5) The facts available to CCC are insufficient to determine the amount to be offset or the proper payee;
(6) A judgement on a claim of CCC has been obtained; or
(7) Such action has been requested by Justice.
(a) No amounts payable to a debtor by CCC will be paid to an assignee of the debt until amounts owed by the debtor have been collected and applied to the debt.
(b) A payment that is assigned as specified in part 1404 of this title by execution of any CCC assignment form will be subject to offset for any debt owed to CCC, or any
(c) Except as provided in 7 CFR 1404.6(b), any indebtedness owed by the assignor to CCC will be offset from any payment which is owed by CCC if such indebtedness was entered on the debt record of the applicable
Subpart C--Referral of Debts to
(a) Agencies are required by law to transfer delinquent, nontax, legally enforceable debts to
(b) When debts are referred or transferred to
(c) In cases where a debtor has more than one FSA FLP loan that has been referred to cross-servicing and
(1) All payments have been received as agreed; and
(2) All loans referred to the cross-servicing program for that debtor have been returned to FSA, with or without payment agreements.
(a) Agencies will transfer to
(b) The requirement of paragraph (a) of this section does not apply to any debt that:
(1) Is in litigation or foreclosure (see 31 CFR 285.12 (d)(2) for definition);
(2) Will be disposed of under an approved asset sale program (see 31 CFR 285.12(d)(3)(i) for definition);
(3) Has been referred to a private collection contractor for a period of time acceptable to
(4) Is at a debt collection center for a period of time acceptable to
(5) Will be collected under administrative offset procedures within 3 years after the debt first became delinquent;
(6) Is exempt from this requirement based on a determination by the Secretary of the
(7) Is foreign debt; or
(8) Is FSA FLP debt in which case the delinquent loan servicing procedures and appeals process required by the ConAct will apply, including the deferral for cross-servicing until all security has been liquidated, and FSA concludes its review of any pending debt settlement application from the debtor.
(c) A debt is considered 180 days delinquent for purposes of this section if it is 180 days past due and is legally enforceable. A debt is past due if it has not been paid by the date specified in the agency's initial written demand for payment or applicable agreement or instrument (including a post-delinquency payment agreement) unless other satisfactory payment arrangements have been made. A debt is legally enforceable if there has been a final agency determination that the debt, in the amount stated, is due and there are no legal bars to collection action. Where, for example, a debt is the subject of a pending administrative review process required by law or regulation and collection action during the review process is prohibited, the debt is not considered legally enforceable for purposes of mandatory transfer to
Agencies will consider referring legally enforceable nontax debts that are less than 180 days delinquent to
Agencies referring delinquent debts to
(a) The debts being transferred are valid and legally enforceable;
(b) There are no legal bars to collection; and
(c) The agency has complied with all prerequisites to a particular collection action under the laws, regulations or policies applicable to the agency, unless the agency and
Federal agencies operating
Subpart D--Administrative Offset
(a) This subpart specifies the procedures to be used by agencies in collecting debts by administrative offset.
(b) This subpart does not apply to:
(1) Debts arising under the Social Security Act, except as provided in 42 U.S.C. 404;
(2) Payments made under the Social Security Act, except as provided for in 31 U.S.C. 3716(c) (see 31 CFR 285.4, Federal Benefit Offset);
(3) Debts arising under, or payments made under, the Internal Revenue Code (except for offset of tax refunds) or the tariff laws of
(4) Offsets against Federal salaries (such offsets are covered by subpart F of this part);
(5) Offsets under 31 U.S.C. 3728 against a judgment obtained by a debtor against
(6) Offsets or recoupments under common law, State law, or Federal laws specifically prohibiting offsets or recoupments of particular types of debts;
(7) Offsets in the course of judicial proceedings, including bankruptcy;
(8) Intracontractual offsets to satisfy contract debts taken by a contracting officer under the Contract Disputes Act, 41 U.S.C. 7101-7109; or
(9) Foreign Debt.
(c) Unless otherwise provided for by contract or law, debts or payments that are not subject to administrative offset under 31 U.S.C. 3716 may be collected by administrative offset under the common law or other applicable statutory authority.
(d) In bankruptcy cases, agencies may request legal advice from OGC concerning the impact of the Bankruptcy Code, particularly 11 U.S.C. 106, 362, and 553 on pending or contemplated collections by offset.
(a) Prior to initiation of collection by administrative offset, a creditor agency must:
(1) Send the debtor a written Notice of Intent to Collect by Administrative Offset, by mail or hand-delivery, of the type and amount of the debt, the intention of the agency to use non-centralized administrative offset (which includes a
(2) Give the debtor the opportunity:
(i) To inspect and copy agency records related to the debt;
(ii) For a review within the agency of the determination of indebtedness in accordance with subpart F of this part; and
(iii) To make a written agreement to repay the debt.
(b) The procedures specified in paragraph (a) of this section are not required when:
(1) The offset is in the nature of a recoupment;
(2) The debt arises under a contract subject to the Contracts Disputes Act;
(3) In the case of a non-centralized administrative offset, the agency first learns of the existence of the amount owed by the debtor when there is insufficient time before payment would be made to the debtor/payee to allow for prior notice and an opportunity for review. When prior notice and an opportunity for review are omitted, the agency will give the debtor such notice and an opportunity for review as soon as practicable and will promptly refund any money ultimately found not to have been owed to the government; or
(4) The agency previously has given a debtor any of the notice and review opportunities required under this part, with respect to a particular debt (see, for example,
(c) The Notice of Intent to Collect by Administrative Offset will be included as part of a demand letter issued under
(a) A debtor who intends to inspect or copy agency or
(b) The debtor may, in response to the Notice of Intent to Collect by Administrative Offset, propose to the creditor agency a written agreement to repay the debt as an alternative to administrative offset. Any debtor who wishes to do this must submit a written proposal for repayment of the debt, which must be received by the creditor agency within 30 days of the date of the Notice of Intent to Collect by Administrative Offset or 15 days after the date of a decision adverse to the debtor under subpart F of this part. In response, the creditor agency must notify the debtor in writing whether the proposed agreement is acceptable. In exercising its discretion, the creditor agency must balance the government's interest in collecting the debt against fairness to the debtor. A decision by the agency under this paragraph will not be subject to review under subpart F of this part or by NAD under part 11 of this title. For proposed agreements to pay delinquent amounts owed on FSA FLP loans, the proposed payments in the agreement must cure the delinquency before the next loan installment is due, or within 90 days, whichever is sooner.
(c) A debtor must request an administrative review of the debt under subpart F of this part within 30 days of the date of the Notice of Intent to Collect by Administrative Offset for purposes of a proposed collection by non-centralized administrative offset and within 60 days of the date of the Notice of Intent to Collect by Administrative Offset for purposes of a proposed collection by referral to
(a) In cooperation with the Federal agency certifying or authorizing payments to the debtor, a creditor agency may make a request directly to a payment authorizing agency to offset a payment due a debtor to collect a delinquent debt from, for example, a Federal employee's lump sum payment upon leaving government service in order to pay an unpaid advance. Unless prohibited by law, when centralized administrative offset is not available or appropriate, past due, legally enforceable nontax delinquent debts may be collected through non-centralized administrative offset.
(b) A non-centralized administrative offset may start 31 days after the date of the Notice of Intent to Collect by Administrative Offset, any time after the final determination in an administrative review conducted under subpart F of this part upholds the creditor agency's decision to offset, or any time after the creditor agency notifies the debtor that its repayment proposal submitted under
(c) A payment authorizing agency may conduct a non-centralized administrative offset only after certification by a creditor agency that:
(1) The debtor has been provided notice and opportunity for review as specified in
(2) The payment authorizing agency has received written certification from the creditor agency that the debtor owes the past due, legally enforceable delinquent debt in the amount stated, and that the creditor agency has fully complied with its regulations concerning administrative offset.
(d) Payment authorizing agencies will comply with offset requests by creditor agencies to collect debts owed to
(e) When collecting multiple debts by non-centralized administrative offset, agencies will apply the recovered amounts to those debts in accordance with the interests of
(f) Debts arising from the shipment of commodities procured by CCC are subject to the following:
(1) Debts due CCC from a carrier for overcharges will be offset against amounts due to the carrier under freight bills involving shipments if:
(i) The carrier, without reasonable justification, has declined payment of the debt or has failed to pay the debt after being given a reasonable opportunity to make payment; and
(ii) The periods of limitation as specified in 49 U.S.C. 11705(f) or 49 U.S.C. 14705(f) have not expired;
(2) Debts due to CCC from a carrier for loss or damage will be offset against amounts due to the carrier under freight bills involving shipments if:
(i) Timely demand for payment was made on the carrier;
(ii) The carrier has declined payment of the debt without reasonable justification or has ignored the debt; and
(iii) The periods of limitation as specified in 49 U.S.C. 11706(e) or 49 U.S.C. 14706(e) have not expired; and
(3) Any overcharge, loss, or damage debt due to CCC on which the applicable period of limitation has expired may be offset against any amounts owed by CCC to the carrier which are subject to limitation.
(a)(1) Except as provided in paragraph (a)(2) of this section, after the notice and review opportunity requirements of
(2) For FSA FLP and
(i) The delinquent loan servicing procedures and timeframes required by the ConAct will be followed; and.
(ii) Offsets will not occur during any moratorium required by the ConAct.
(b) After the notice and review opportunity requirements of
(c) Agencies will refer debts to
(d) The agencies will ensure that:
(1) The names and TINs of debtors who owe debts referred to
(2) Any USDA official serving as a Federal disbursing official for purposes of effecting centralized administrative offset under this section, or Fiscal Service on behalf of the disbursing official, must notify a debtor or payee in writing that an offset has occurred to satisfy, in part or in full, a past due, legally enforceable delinquent debt. The notice must include the information specified in paragraph (d)(4) of this section.
(3) As described in 31 CFR 285.5(g)(1) and (2), any
(4) The notice will include a description of the type and amount of the payment from which the offset was taken, the amount of offset that was taken, the identity of the creditor agency requesting the offset, and a contact point within the creditor agency who will respond to questions regarding the offset.
(5) The priorities for collecting multiple payments owed by a payee or debtor will be those specified in 31 CFR 285.5(f)(3).
(a) A
(1) A debtor's pro rata share of
(2)
(b) Prior to exercising the authority of this section to offset any portion of a payment due an entity, the creditor agency must have provided notice to that entity in accordance with
Upon providing the
Subpart E--Administrative Wage Garnishment
This subpart provides
(a) This subpart applies to any agency that administers a program that gives rise to a delinquent nontax debt owed to
(b) This subpart will apply notwithstanding any provision of State law.
(c) Nothing in this subpart precludes the compromise of a debt or the suspension or termination of collection action in accordance with the provisions of this part or other applicable law.
(d) The receipt of payments pursuant to this subpart does not preclude an agency from pursuing other debt collection remedies under this part. An agency may pursue such debt collection remedies separately or in conjunction with administrative wage garnishment.
(e) This subpart does not apply to the collection of delinquent nontax debt owed to
(f) Nothing in this subpart requires agencies to duplicate notices or administrative proceedings required by contract or other laws or regulations, or other provisions of this part.
(g) This subpart does not apply to foreign debt.
As used in this subpart the following definitions will apply:
Disposable pay means that part of the debtor's compensation (including, but not limited to, salary, bonuses, commissions, and vacation pay) from an employer remaining after the deduction of health insurance premiums and any amounts required by law to be withheld. For purposes of this section, "amounts required by law to be withheld" include amounts for deductions such as social security taxes and withholding taxes, but do not include any amount withheld pursuant to a court order.
Employer means a person or entity that employs the services of others and that pays their wages or salaries. The term employer includes, but is not limited to, State and local governments, but does not include an agency of the Federal government.
Garnishment means the process of withholding amounts from an employee's disposable pay and the paying of those amounts to a creditor in satisfaction of a withholding order.
Withholding order means any order for withholding or garnishment of pay issued by an agency, or judicial or administrative body. For purposes of this section, the terms "wage garnishment order" and "garnishment order" have the same meaning as "withholding order."
(a)
(b) As specified in
(c) Upon expiration of the 60-day period for review, or upon completion of a review under subpart F of this part that upholds the agency's determination of the debt,
(d) If Treasury elects to pursue collection through administrative wage garnishment,
(e) If the debtor requests a hearing at any time,
(f) OCFO will provide a copy of the hearing official's final decision to
Subpart F--Administrative Reviews for Administrative Offset, Administrative Wage Garnishment, and Disclosure to Credit Reporting Agencies
(a) This section establishes consolidated administrative review procedures for debts subject to administrative offset, administrative wage garnishment, and disclosure to credit reporting agencies, under subparts D and E of this part. A hearing or review under this section will satisfy the required opportunity for administrative review by the agency of the determination of a debt for both administrative offset and administrative wage garnishment that is required before transfer to
(b) For debt collection proceedings initiated by FSA, CCC, FCIC, the Rural Housing Service, the Rural Business-Cooperative Service, the
An agency reviewing officer may be an agency employee, or the agency may provide for reviews to be done by another agency through an interagency agreement. No agency employee may act as a reviewing officer for the consideration of collection by administrative offset in a matter for which the employee was a contracting officer or a debt management officer.
(a) A debtor who receives a Notice of Intent to Collect by Administrative Offset, Notice of Disclosure to Credit Reporting Agencies, or Notice of Intent to Collect by Administrative Wage Garnishment, or more than one of the above simultaneously, may request administrative review of the agency's determination that the debt exists and the amount of the debt. Any debtor who wishes to do this must submit a written explanation of why the debtor disagrees and requests review. The request must be received by the creditor agency within 60 days of the date of the notice in the case of a Notice of Intent to Collect by Administrative Offset that includes referral to
(b) In response, the creditor agency must notify the debtor in writing whether the review will be by documentary review or by hearing. An oral hearing is not necessary with respect to debt collection systems in which a determination of indebtedness rarely involves issues of credibility or veracity and the agency has determined that review of the written record is ordinarily an adequate means to correct prior mistakes. The agency will provide the debtor with a reasonable opportunity for an oral hearing when the debtor requests reconsideration of the debt and the agency determines that the question of the indebtedness cannot be resolved by review of the documentary evidence, for example, when the validity of the debt turns on an issue of credibility or veracity. If the debtor requests a hearing, and the creditor agency decides to conduct a documentary review, the agency must notify the debtor of the reason why a hearing will not be granted. The agency must also advise the debtor of the procedures to be used in reviewing the documentary record, or of the date, location and procedures to be used if review is by a hearing.
(c) An oral hearing may, at the debtor's option, be conducted either in-person or by telephone conference. All travel expenses incurred by the debtor in connection with an in-person hearing will be borne by the debtor. All telephonic charges incurred during the hearing will be the responsibility of the agency.
(d) After the debtor requests a hearing, the hearing official will notify the debtor of:
(1) The date and time of a telephonic hearing;
(2) The date, time, and location of an in-person oral hearing; or
(3) The deadline for the submission of evidence for a documentary review.
(e) Unless otherwise arranged by mutual agreement between the debtor and the agency, evidenced in writing, any documentary review or hearing will be conducted not less than 10 days and no more than 45 days after receipt of the request for review.
(f) Unless otherwise arranged by mutual agreement between the debtor and the agency, evidenced in writing, a documentary review or hearing will be based on agency records plus other relevant documentary evidence which may be submitted by the debtor within 10 days after the request for review is received.
(g) The hearing procedure will consist of:
(1) Hearings will be as informal as possible and will be conducted by a reviewing officer in a fair and expeditious manner. The reviewing officer need not use the formal rules of evidence with regard to the admissibility of evidence or the use of evidence once admitted. However, clearly irrelevant material should not be admitted, whether or not any party objects. Any party to the hearing may offer exhibits, such as copies of financial records, telephone memoranda, or agreements, provided the opposing party is notified at least 5 days before the hearing.
(2) The agency will have the burden of going forward to prove the existence or amount of the debt.
(i) Thereafter, if the debtor disputes the existence or amount of the debt, the debtor must prove by a preponderance of the evidence that no debt exists or that the amount of the debt is incorrect.
(ii) In addition, the debtor may present evidence that repayment would cause a financial hardship to the debtor or that collection of the debt may not be pursued due to operation of law.
(3) Witnesses must testify under oath or affirmation.
(4) Debtors may represent themselves or may be represented at their own expense by an attorney or other person.
(5) The substance of all significant matters discussed at the hearing must be recorded. No official record or transcript of the hearing need be created, but if a debtor requested that a transcript be made, it will be at the debtor's expense.
(h) In the absence of good cause shown, a debtor who fails to appear at a hearing scheduled pursuant to paragraph (d) of this section will be deemed as not having timely filed a request for a hearing.
(i) The determination will be made:
(1) Within no more than 30 days after the hearing or receipt of documentation for the documentary review, the reviewing officer will issue a written decision to the debtor and the agency, including the supporting rationale for the decision. The deadline for issuance of the decision may be extended by the reviewing officer for good cause for no more than 30 days.
(2) The written decision will include:
(i) A summary of the facts presented;
(ii) The hearing official's findings, analysis and conclusions; and
(iii) Resolution of any significant procedural matter which was in dispute before or during the hearing or documentary review.
(j) The reviewing officer's decision constitutes final agency action for purposes of judicial review under the Administrative Procedure Act (5 U.S.C. 701-703) as to the following issues:
(1) All issues of fact relating to the basis of the debt (including the existence of the debt and the propriety of administrative offset), in cases where the debtor previously had not been afforded due process; and
(2) The existence of the debt and the propriety of administrative offset, in cases where the debtor previously had been afforded due process as to issues of fact relating to the basis of the debt.
(k) The reviewing officer will promptly distribute copies of the decision to the USDA CFO, the agency CFO (if any), the agency debt management officer, the debtor, and the debtor's representative, if any.
Subpart G--Federal Salary Offset
Authority: 5 U.S.C. 5514; and 5 CFR part 550, subpart K.
(a) The provisions of this subpart specify
(b) This subpart applies to:
(1) Current USDA employees and employees of other agencies who owe debts to
(2) Current USDA employees who owe debts to other agencies.
(c) This subpart does not apply to debts owed by FSA county executive directors or non-Federal county office employees. For debts owed by FSA county executive directors or non-Federal county office employees to CCC or FSA, the salaries of these employees are subject to administrative offset not to exceed 15 percent of the employee's disposable pay. CCC and FSA will follow the notification requirements and procedures for collection by administrative offset as specified in 31 CFR part 285 and 31 U.S.C. 3716.
(d) This subpart does not apply to debts or claims arising under the Internal Revenue Code of 1986 (26 U.S.C. 1-8023); the tariff laws of
(e) This subpart identifies the types of salary offset available to
(1) Any adjustment to pay arising out of an employee's election of coverage or a change in coverage under a Federal benefits program requiring periodic deductions from pay, if the amount to be recovered was accumulated over four pay periods or less;
(2) A routine intra-agency adjustment of pay that is made to correct an overpayment of pay attributable to clerical or administrative errors or delays in processing pay documents, if the overpayment occurred within the four pay periods preceding the adjustment and, at the time of such adjustment, or as soon thereafter as practical, the individual is provided written notice of the nature and the amount of the adjustment and point of contact for contesting such adjustment; or
(3) Any adjustment to collect a debt amounting to
(f) These regulations do not preclude an employee from:
(1) Requesting waiver of an erroneous overpayment under 5 U.S.C. 5584, 10 U.S.C. 2774, or 32 U.S.C. 716;
(2) Requesting waiver of any other type of debt, if waiver is available by law; or
(3) Questioning the amount or validity of a debt, in the manner prescribed by this part.
(g) Nothing in these regulations precludes the compromise, suspension or termination of collection actions where appropriate under
As used in this subpart the following definitions will apply:
Disposable pay means that part of current basic pay, special pay, incentive pay, retired pay, retainer pay, or in the case of an employee not entitled to basic pay, other authorized pay remaining after the deduction of any amount required by law to be withheld (other than deductions to execute garnishment orders in accordance with 5 CFR parts 581 and 582). Among the legally required deductions that must be applied first to determine disposable pay are levies pursuant to the Internal Revenue Code (title 26, United States Code) and deductions described in 5 CFR 581.105(b) through (f).
Salary offset means a reduction of a debt by offset(s) from the disposable pay of an employee without his or her consent.
Waiver means the cancellation, remission, forgiveness, or non-recovery of a debt owed by an employee to an agency as permitted or required by 5 U.S.C. 5584, 10 U.S.C. 2774, or 32 U.S.C. 716, 5 U.S.C. 8346(b), or any other law.
(a) When USDA is owed a debt by an employee of another agency, the other agency will not initiate the requested offset until
(b)
(1) A certification by the requesting agency that the person owes the debt (including the amount and basis of the debt and the due date of the payment).
(2) That the agency has complied with its regulations required by 5 U.S.C. 5514 and 5 CFR part 550, subpart K.
(c) Debts may be referred to
(a) In determining that an employee is indebted to
(b) If USDA determines that any of the requirements of paragraph (a) of this section have not been met, no determination of indebtedness will be made and salary offset will not proceed until
Except as provided in paragraph (b) of this section, salary offset will not be made unless
(a) That USDA has reviewed the records relating to the debt and has determined that a debt is owed, the amount of the debt, and the facts giving rise to the debt;
(b)
(c) The approximate beginning date, frequency, and amount of the intended deduction (stated as a fixed dollar amount or as a percentage of pay, not to exceed 15 percent of disposable pay), and the intention to continue the deductions until the debt is paid in full or otherwise resolved;
(d) An explanation of
(e) The employee's right to inspect and copy
(f) The employee's right to enter into a written agreement with
(g) The employee's right to a hearing conducted by a hearing official on
(h) That the timely filing of a petition for hearing will stay the collection proceedings;
(i) That a final decision on the hearing will be issued at the earliest practical date, but not later than 60 days after the filing of the petition requesting the hearing, unless the employee requests, and the hearing officer grants, a delay in the proceedings;
(j) That any knowingly false or frivolous statements, representations, or evidence may subject the employee to:
(1) Disciplinary procedures appropriate under 5 U.S.C. chapter 75, 5 CFR part 752, or any other applicable laws or regulations;
(2) Penalties under the False Claims Act, 31 U.S.C. 3729-3731, or any other applicable statutory authority; or
(3) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002 or any other applicable statutory authority;
(k) Any other rights and remedies available to the employee under laws or regulations governing the program for which the collection is being made;
(l) That amounts paid on or deducted for the debt which are later waived or found not owed to
(m) The method and time period for requesting a hearing; and
(n) The name and address of an official of
(a) Except as provided in paragraph (c) of this section, an employee must file a petition to request a hearing that is received by
(1) The existence or amount of the debt; or
(2)
(b) The petition must be signed by the employee and must identify and explain with reasonable specificity and brevity the facts, evidence and witnesses which the employee believes support his or her position. If the employee objects to the percentage of disposable pay to be deducted from each check, the petition must state the objection and the reasons for it.
(c) If the employee files a petition for a hearing later than the 30 days as described in paragraph (a) of this section, the hearing officer may accept the request if the employee can show that the delay was because of circumstances beyond his or her control or because of failure to receive notice of the filing deadline (unless the employee has actual notice of the filing deadline).
An employee will not be granted a hearing and will have his or her disposable pay offset as specified in
(a) Fails to file a petition for a hearing as prescribed in
(b) Is scheduled to appear and fails to appear at the hearing.
(a) If an employee timely files a petition for a hearing under
(b) A hearing will not be held and Federal salary offset will not be pursued if the cost of the hearing is greater than the delinquent debt.
(c)(1) Hearings will be conducted by the hearing official designated in accordance with 5 CFR 550.1107; and
(2) Rules of evidence will not be adhered to, but the hearing official will consider all evidence that he or she determines to be relevant to the debt that is the subject of the hearing and weigh it accordingly, given all of the facts and circumstances surrounding the debt.
(d)
(e) The employee requesting the hearing will bear the ultimate burden of proof.
(f) The evidence presented by the employee must prove that no debt exists or cast sufficient doubt such that reasonable minds could differ as to the existence of the debt.
Written decisions provided after a hearing will include:
(a) A statement of the facts presented at the hearing to support the nature and origin of the alleged debt and those presented to refute the debt;
(b) The hearing officer's analysis, findings, and conclusions, considering all the evidence presented and the respective burdens of the parties, in light of the hearing;
(c) The amount and validity of the alleged debt determined as a result of the hearing;
(d) The payment schedule (including percentage of disposable pay), if applicable;
(e) The determination that the amount of the debt at this hearing is the final agency action on this matter regarding the existence and amount of the debt for purposes of executing salary offset under 5 U.S.C. 5514. However, even if the hearing official determines that a debt may not be collected by salary offset, but the creditor agency finds that the debt is still valid, the creditor agency may still pursue collection of the debt by other means authorized by this part; and
(f) Notice that the final determination by the hearing official regarding the existence and amount of a debt is subject to referral to
(a) Notification by employee. An employee who intends to inspect or copy
(b)
(a)(1) The employee may propose, in response to a Notice of Intent to Offset Salary, a written agreement to repay the debt as an alternative to salary offset. Any employee who wishes to do this must submit a proposed written agreement to repay the debt that is received by
(2) For FSA FLP debt, an alternative repayment agreement submitted after a hearing decision must include a payment schedule similar to the payment schedule in the hearing decision and include payment amounts that are at least equal to the payment amounts in the hearing decision.
(b)
(a) Deductions to liquidate an employee's debt will be by the method and in the amount stated in
(b) If the employee filed a petition for a hearing with
(c) If an employee retires or resigns before collection of the amount of the indebtedness is completed, the remaining indebtedness will be collected according to the procedures for administrative offset (see subpart D of this part).
A debt will be collected in a lump-sum or in installments. Collection will be by lump-sum collection unless the employee is financially unable to pay in one lump-sum, or if the amount of the debt exceeds 15 percent of disposable pay for an ordinary pay period. In these cases, deduction will be by installments, as specified in
(a) General. A debt will be collected by deductions at officially-established pay intervals from an employee's current pay account, unless the employee and
(b) Installment deductions. Installment deductions will be made over a period not greater than the anticipated period of employment. The size and frequency of installment deductions will bear a reasonable relation to the size of the debt and the employee's ability to pay. However, the amount deducted for any period will not exceed 15 percent of the disposable pay from which the deduction is made, unless the employee has agreed in writing to the deduction of a greater amount. If possible, the installment payment will be sufficient in size and frequency to liquidate the debt in no more than 3 years. Installment payments of less than
(c) Sources of deductions.
Interest, penalties and administrative costs will be charged in accordance with
So long as there are no statutory or contractual provisions to the contrary, no employee payment (or all or portion of a debt) collected under these regulations will be interpreted as a waiver of any rights that the employee may have under 5 U.S.C. 5514.
(a) A debt is waived or otherwise found not owed to
(b)
Subpart H--Cooperation With the
Authority:26 U.S.C. 61; 31 U.S.C. 3720A.
When
Subpart I--Adjusted Civil Monetary Penalties
Authority: 28 U.S.C. 2461 note.
(a) In general--(1) Adjustments. The Secretary will adjust the civil monetary penalties, listed in paragraph (b) of this section, to take account of inflation as mandated by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, as amended.
(2) Timing. Any increase in the dollar amount of a civil monetary penalty listed in paragraph (b) of this section applies only to violations occurring after
(3) Illustrative purposes. The descriptions of the civil monetary penalties listed in paragraph (b) of this section are for illustrative purposes only. This section does not amend, interpret, implement, or alter in any way the statutory provisions in which the civil monetary penalties listed in paragraph (b) of this section are set. Moreover, the descriptions of the civil monetary penalties listed in paragraph (b) of this section do not necessarily contain a complete description of the circumstances (for example, requirements regarding the "state of mind" of the violator(s), requirements regarding the type of law or issuance violated, etc.) under which the penalties are assessed. Persons should consult the statutory text in which the civil monetary penalties are set and any implementing regulations to make applicability determinations.
(b) Penalties--(1)
(ii) Civil penalty for a violation of the unfair conduct rule under the Perishable Agricultural Commodities Act, in lieu of license revocation or suspension, codified at 7 U.S.C. 499b(5), has a maximum of
(iii) Civil penalty for violation of the licensing requirements under the Perishable Agricultural Commodities Act, codified at 7 U.S.C. 499c(a), has a maximum of
(iv) Civil penalty in lieu of license suspension under the Perishable Agricultural Commodities Act, codified at 7 U.S.C. 499h(e), has a maximum penalty of
(v) Civil penalty for a violation of the Export Apple Act, codified at 7 U.S.C. 586, has a minimum of
(vi) Civil penalty for a violation of the Export Grape and Plum Act, codified at 7 U.S.C. 596, has a minimum of
(vii) Civil penalty for a violation of an order issued by the Secretary under the Agricultural Adjustment Act, reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, codified at 7 U.S.C. 608c(14)(B), has a maximum of
(viii) Civil penalty for failure to file certain reports under the Agricultural Adjustment Act, reenacted by the Agricultural Marketing Agreement Act of 1937, codified at 7 U.S.C. 610(c), has a maximum of
(ix) Civil penalty for a violation of a seed program under the Federal Seed Act, codified at 7 U.S.C. 1596(b), has a minimum of
(x) Civil penalty for failure to collect any assessment or fee for a violation of the
(xi) Civil penalty for failure to pay, collect, or remit any assessment or fee for a violation of a program under the
(xii) Civil penalty for failure to obey a cease and desist order under the
(xiii) Civil penalty for failure to pay, collect, or remit any assessment or fee or for a violation of a program under the
(xiv) Civil penalty for failure to obey a cease and desist order under the
(xv) Civil penalty for failure to remit any assessment or fee or for a violation of a program under the
(xvi) Civil penalty for failure to remit any assessment or for a violation of a program regarding wheat and wheat foods research, codified at 7 U.S.C. 3410(b), has a maximum of
(xvii) Civil penalty for failure to pay, collect, or remit any assessment or fee or for a violation of a program under the
(xviii) Civil penalty for failure to obey a cease and desist order under the
(xix) Civil penalty for violation of an order under the Dairy Promotion Program, codified at 7 U.S.C. 4510(b), has a maximum of
(xx) Civil penalty for pay, collect, or remit any assessment or fee or for a violation of the
(xxi) Civil penalty for failure to obey a cease and desist order under the
(xxii) Civil penalty for a violation of a program under the Pork Promotion, Research, and Consumer Information Act of 1985, codified at 7 U.S.C. 4815(b)(1)(A)(i), has a maximum of
(xxiii) Civil penalty for failure to obey a cease and desist order under the Pork Promotion, Research, and Consumer Information Act of 1985, codified at 7 U.S.C. 4815(b)(3)(A), has a maximum of
(xxiv) Civil penalty for failure to pay, collect, or remit any assessment or fee or for a violation of a program under the
(xxv) Civil penalty for failure to obey a cease and desist order under the
(xxvi) Civil penalty for failure to pay, collect, or remit any assessment or fee or for a violation of a program under the Pecan Promotion and Research Act of 1990, codified at 7 U.S.C. 6009(c)(1), has a minimum of
(xxvii) Civil penalty for failure to obey a cease and desist order under the Pecan Promotion and Research Act of 1990, codified at 7 U.S.C. 6009(e), has a maximum of
(xxviii) Civil penalty for failure to pay, collect, or remit any assessment or fee or for a violation of a program under the Mushroom Promotion, Research, and Consumer Information Act of 1990, codified at 7 U.S.C. 6107(c)(1), has a minimum of
(xxix) Civil penalty for failure to obey a cease and desist order under the Mushroom Promotion, Research, and Consumer Information Act of 1990, codified at 7 U.S.C. 6107(e), has a maximum of
(xxx) Civil penalty for failure to pay, collect, or remit any assessment or fee or for a violation of the
(xxxi) Civil penalty for failure to obey a cease and desist order under the
(xxxii) Civil penalty for failure to pay, collect, or remit any assessment or fee or for a violation of a program under the Soybean Promotion, Research, and Consumer Information Act, codified a 7 U.S.C. 6307(c)(1)(A), has a maximum of
(xxxiii) Civil penalty for failure to obey a cease and desist order under the Soybean Promotion, Research, and Consumer Information Act, codified at 7 U.S.C. 6307(e), has a maximum of
(xxxiv) Civil penalty for failure to pay, collect, or remit any assessment or fee or for a violation of a program under the Fluid Milk Promotion Act of 1990, codified at 7 U.S.C. 6411(c)(1)(A), has a minimum of
(xxxv) Civil penalty for failure to obey a cease and desist order under the Fluid Milk Promotion Act of 1990, codified at 7 U.S.C. 6411(e), has a maximum of
(xxxvi) Civil penalty for knowingly labeling or selling a product as organic except in accordance with the Organic Foods Production Act of 1990, codified at 7 U.S.C. 6519(c), has a maximum of
(xxxvii) Civil penalty for failure to pay, collect, or remit any assessment or fee or for a violation of a program under the Fresh Cut Flowers and Fresh Cut Greens Promotion and Information Act of 1993, codified at 7 U.S.C. 6808(c)(1)(A)(i), has a minimum of
(xxxviii) Civil penalty for failure to obey a cease and desist order under the Fresh Cut Flowers and Fresh Cut Greens Promotion and Information Act of 1993, codified at 7 U.S.C. 6808(e)(1), has a maximum of
(xxxix) Civil penalty for a violation of a program under the Sheep Promotion, Research, and Information Act of 1994, codified at 7 U.S.C. 7107(c)(1)(A), has a maximum of
(xl) Civil penalty for failure to obey a cease and desist order under the Sheep Promotion, Research, and Information Act of 1994, codified at 7 U.S.C. 7107(e), has a maximum of
(xli) Civil penalty for a violation of an order or regulation issued under the Commodity Promotion, Research, and Information Act of 1996, codified at 7 U.S.C. 7419(c)(1), has a minimum of
(xlii) Civil penalty for failure to obey a cease and desist order under the Commodity Promotion, Research, and Information Act of 1996, codified at 7 U.S.C. 7419(e), has a minimum of
(xliii) Civil penalty for a violation of an order or regulation issued under the
(xliv) Civil penalty for failure to obey a cease and desist order under the
(xlv) Civil penalty for violation of an order or regulation issued under the
(xlvi) Civil penalty for failure to obey a cease and desist order under the
(xlvii) Civil penalty for a violation of an order or regulation under the Popcorn Promotion, Research, and Consumer Information Act, codified at 7 U.S.C. 7487(a), has a maximum of
(xlviii) Civil penalty for certain violations under the Egg Products Inspection Act, codified at 21 U.S.C. 1041(c)(1)(A), has a maximum of
(xlix) Civil penalty for violation of an order or regulation issued under the Hass Avocado Promotion, Research, and Information Act of 2000, codified at 7 U.S.C. 7807(c)(1)(A)(i), has a minimum of
(l) Civil penalty for failure to obey a cease and desist order under the Hass Avocado Promotion, Research, and Information Act of 2000, codified at 7 U.S.C. 7807(e)(1), has a maximum of
(li) Civil penalty for violation of certain provisions of the Livestock Mandatory Reporting Act of 1999, codified a 7 U.S.C. 1636b(a)(1), has a maximum of
(lii) Civil penalty for failure to obey a cease and desist order under the Livestock Mandatory Reporting Act of 1999, codified a 7 U.S.C. 1636b(g)(3), has a maximum of
(liii) Civil penalty for failure to obey an order of the Secretary issued pursuant to the Dairy Product Mandatory Reporting program, codified at 7 U.S.C. 1637b(c)(4)(D)(iii), has a maximum of
(liv) Civil penalty for a willful violation of the Country of Origin Labeling program by a retailer or person engaged in the business of supplying a covered commodity to a retailer, codified at 7 U.S.C. 1638b(b)(2), has a maximum of
(lv) Civil penalty for violations of the Dairy Research Program, codified at 7 U.S.C. 4535 and 4510(b), has a maximum of
(lvi) Civil penalty for a packer or swine contractor violation, codified at 7 U.S.C. 193(b), has a maximum of
(lvii) Civil penalty for a livestock market agency or dealer failure to register, codified at 7 U.S.C. 203, has a maximum of
(lviii) Civil penalty for operating without filing, or in violation of, a stockyard rate schedule, or of a regulation or order of the Secretary made thereunder, codified at 7 U.S.C. 207(g), has a maximum of
(lix) Civil penalty for a stockyard owner, livestock market agency, or dealer, who engages in or uses any unfair, unjustly discriminatory, or deceptive practice or device in connection with determining whether persons should be authorized to operate at the stockyards, or with receiving, marketing, buying, or selling on a commission basis or otherwise, feeding, watering, holding, delivery, shipment, weighing, or handling of livestock, codified at 7 U.S.C. 213(b), has a maximum of
(lx) Civil penalty for a stockyard owner, livestock market agency, or dealer, who knowingly fails to obey any order made under the provisions of 7 U.S.C. 211, 212, or 213, codified at 7 U.S.C. 215(a), has a maximum of
(lxi) Civil penalty for live poultry dealer violations, codified at 7 U.S.C. 228b-2(b), has a maximum of
(lxii) Civil penalty for a violation, codified at 7 U.S.C. 86(c), has a maximum of
(lxiii) Civil penalty for failure to comply with certain provisions of the
(2)
(ii) Civil penalty for a violation of the Animal Welfare Act, codified at 7 U.S.C. 2149(b), has a maximum of
(iii) Civil penalty for any person that causes harm to, or interferes with, an animal used for the purposes of official inspection by
(iv) Civil penalty for a violation of the Swine Health Protection Act, codified at 7 U.S.C. 3805(a), has a maximum of
(v) Civil penalty for any person that violates the Plant Protection Act (PPA), or that forges, counterfeits, or, without authority from the Secretary, uses, alters, defaces, or destroys any certificate, permit, or other document provided for in the PPA, codified a 7 U.S.C. 7734(b)(1), has a maximum of the greater of:
(vi) Civil penalty for any person (except as provided in 7 U.S.C. 8309(d)) that violates the Animal Health Protection Act (AHPA), or that forges, counterfeits, or, without authority from the Secretary, uses, alters, defaces, or destroys any certificate, permit, or other document provided under the AHPA, codified at 7 U.S.C. 8313(b)(1), has a maximum of the greater of:
(vii) Civil penalty for any person that violates certain regulations under the Agricultural Bioterrorism Protection Act of 2002 regarding transfers of listed agents and toxins or possession and use of listed agents and toxins, codified at 7 U.S.C. 8401(i)(1), has a maximum of
(viii) Civil penalty for violation of the Horse Protection Act, codified at 15 U.S.C. 1825(b)(1), has a maximum of
(ix) Civil penalty for failure to obey Horse Protection Act disqualification, codified at 15 U.S.C. 1825(c), has a maximum of
(x) Civil penalty for knowingly violating, or, if in the business as an importer or exporter, violating, with respect to terrestrial plants, any provision of the Endangered Species Act of 1973, any permit or certificate issued thereunder, or any regulation issued pursuant to section 9(a)(1)(A) through (F), (a)(2)(A) through (D), (c), (d) (other than regulations relating to record keeping or filing reports), (f), or (g), as specified at 16 U.S.C. 1540(a)(1), has a maximum of
(xi) Civil penalty for knowingly violating, or, if in the business as an importer or exporter, violating, with respect to terrestrial plants, any other regulation under the Endangered Species Act of 1973, as specified at 16 U.S.C. 1540(a)(1), has a maximum of
(xii) Civil penalty for violating, with respect to terrestrial plants, the Endangered Species Act of 1973, or any regulation, permit, or certificate issued thereunder, as specified at 16 U.S.C. 1540(a)(1), has a maximum of
(xiii) Civil penalty for knowingly and willfully violating 49 U.S.C. 80502 with respect to the transportation of animals by any rail carrier, express carrier, or common carrier (except by air or water), a receiver, trustee, or lessee of one of those carriers, or an owner or master of a vessel, codified at 49 U.S.C. 80502(d), has a minimum of
(xiv) Civil penalty for a violation of the Commercial Transportation of Equine for Slaughter Act, 7 U.S.C. 1901 note, and its implementing regulations in 9 CFR part 88, as specified in 9 CFR 88.6, has a maximum of
(xv) Civil penalty for knowingly violating section 3(d) or 3(f) of the Lacey Act Amendments of 1981, or for violating any other provision provided that, in the exercise of due care, the violator should have known that the plant was taken, possessed, transported, or sold in violation of any underlying law, treaty, or regulation, has a maximum of
(xvi) Civil penalty for violating section 3(f) of the Lacey Act Amendments of 1981, as specified in 16 U.S.C. 3373(a)(2), has a maximum of
(3)
(ii) Civil penalty for trafficking in food coupons, codified at 7 U.S.C. 2021(b)(3)(B), has a maximum of
(iii) Civil penalty for the sale of firearms, ammunitions, explosives, or controlled substances for coupons, codified at 7 U.S.C. 2021(b)(3)(C), has a maximum of
(iv) Civil penalty for any entity that submits a bid to supply infant formula to carry out the
(v) Civil penalty for a vendor convicted of trafficking in food instruments, codified at 42 U.S.C. 1786(o)(1)(A) and 42 U.S.C. 1786(o)(4)(B), has a maximum of
(vi) Civil penalty for a vendor convicted of selling firearms, ammunition, explosive, or controlled substances in exchange for food instruments, codified at 42 U.S.C. 1786(o)(1)(B) and 42 U.S.C. 1786(o)(4)(B), has a maximum of
(4)
(ii) [Reserved]
(5)
(ii) Civil penalty for a violation in disregard of the Forest Resources Conservation and Shortage Relief Act or the regulations that implement such Act regardless of whether such violation caused the export of unprocessed timber originating from Federal lands, codified in 16 U.S.C. 620d(c)(2)(A)(i), has a maximum of
(iii) Civil penalty for a person that should have known that an action was a violation of the Forest Resources Conservation and Shortage Relief Act or the regulations that implement such Act regardless of whether such violation caused the export of unprocessed timber originating from Federal lands, codified at 16 U.S.C. 620d(c)(2)(A)(ii), has a maximum of
(iv) Civil penalty for a willful violation of the Forest Resources Conservation and Shortage Relief Act or the regulations that implement such Act regardless of whether such violation caused the export of unprocessed timber originating from Federal lands, codified in 16 U.S.C. 620d(c)(2)(A)(iii), has a maximum of
(v) Civil penalty for a violation involving protections of caves, codified at 16 U.S. C. 4307(a)(2), has a maximum of
(6) [Reserved]
(7)
(ii) [Reserved]
(8) Rural Housing Service. (i) Civil penalty for a violation of section 536 of Title V of the Housing Act of 1949, codified in 42 U.S.C. 1490p(e)(2), has a maximum of
(ii) Civil penalty for equity skimming under section 543(a) of the Housing Act of 1949, codified in 42 U.S.C. 1490s(a)(2), has a maximum of
(iii) Civil penalty under section 543b of the Housing Act of 1949 for a violation of regulations or agreements made in accordance with Title V of the Housing Act of 1949, by submitting false information, submitting false certifications, failing to timely submit information, failing to maintain real property in good repair and condition, failing to provide acceptable management for a project, or failing to comply with applicable civil rights laws and regulations, codified in 42 U.S.C. 1490s(b)(3)(A), has a maximum of the greater of: Twice the damages
(9) [Reserved]
(10)
(ii) Civil penalty for willful failure or refusal to furnish information or willful furnishing of false data by a processor, refiner, or importer of sugar, syrup and molasses under section 156 of the Federal Agriculture Improvement and Reform Act of 1996, codified at 7 U.S.C. 7272(g)(5), has a maximum of
(iii) Civil penalty for filing a false acreage report that exceeds tolerance under section 156 of the Federal Agriculture Improvement and Reform Act of 1996, codified at 7 U.S.C. 7272(g)(5), has a maximum of
(iv) Civil penalty for knowingly violating any regulation of the Secretary of the
(v) Civil penalty for knowing violation of regulations promulgated by the Secretary pertaining to cotton insect eradication under section 104(d) of the Agricultural Act of 1949, codified at 7 U.S.C. 1444a(d), has a maximum of
(11)
(ii) Civil penalty for making, presenting, submitting or causing to be made, presented or submitted, a false, fictitious, or fraudulent written statement as defined under the Program Fraud Civil Remedies Act of 1986, codified at 31 U.S.C. 3802(a)(2), has a maximum of
PART 400--GENERAL ADMINISTRATIVE REGULATIONS
2. The authority citation for part 400 continues to read as follows:
Authority:7 U.S.C.1506(l), 1506(o).
Subpart K [Removed and Reserved]
3. Remove and reserve subpart K, consisting of [Sec.]
PART 761--FARM LOAN PROGRAMS; GENERAL PROGRAM ADMINISTRATION
4. The authority citation for part 761 continues to read as follows:
Authority: 5 U.S.C. 301 and 7 U.S.C. 1989.
Subpart A--General Provisions
5. Amend
*****
(e) Part 3 of this title and 31 CFR part 285 describe the policies and procedures the Agency will follow for non-centralized offset (including administrative offset) and referral to
(f) Part 3 of this title and 31 CFR parts 900-904 describe the policies and procedures the Agency will follow for debt settlement authorities pursuant to the Federal Claims Collection Standards. Supplemental provisions for FLP purposes are described in part 761, subpart F of this title.
(g) Part 761, subpart F of this title describes the debt settlement policies and procedures for FLP debt pursuant to the Act.
6. Amend
a. In paragraph (a), add in alphabetical order abbreviations for "ARA", "FCCS", and "OIG"; and
b. In paragraph (b):
i. Revise the definition for "Adjustment";
ii. Add in alphabetical order a definition for "Alternative repayment agreement";
iii. Revise the definitions of "Cancellation" and "Debt forgiveness"; and
iv. Add in alphabetical order a definition for "Hearing official".
The additions and revisions read as follows:
*****
(a) * * *
ARA Alternative Repayment Agreement.
*****
FCCS Federal Claims Collection Standards.
*****
*****
(b) * * *
Adjustment means the settlement of an FLP debt for less than the total amount owed. The adjusted amount is collected through a series of payments that are scheduled over time. An adjustment is not a final settlement until all scheduled payments have been made. After applying all payments pursuant to the adjustment agreement, any remaining balance is canceled. The amount canceled is reported to the
*****
Alternative repayment agreement is a written repayment agreement accepted by both the borrower and the Agency as specified in [Sec.]
*****
Cancellation means the final resolution of an FLP debt without receiving payment in full. Any amounts still owed, after applying payments in accordance with approved adjustment and compromise agreements, is canceled. The amount canceled is reported to the
*****
Debt forgiveness means the reduction or termination of a debt under the Act in a manner that results in a loss to the Agency, through:
(i)(A) Writing down or writing off a debt pursuant to 7 U.S.C. 2001;
(B) Cancellation of remaining amounts owed after compromising, adjusting, reducing, or charging off a debt or claim pursuant to 7 U.S.C. 1981;
(C) Paying a loss pursuant to 7 U.S.C. 2005 on a FLP loan guaranteed by the Agency;
(D) Discharging a debt as a result of bankruptcy; or
(E) Releases of liability which result in a loss to the Agency.
(ii) Debt forgiveness does not include:
(A) Debt reduction through a conservation contract;
(B) Any writedown provided as part of the resolution of a discrimination complaint against the Agency;
(C) Prior debt forgiveness that has been repaid in its entirety;
(D) Consolidation, rescheduling, reamortization, or deferral of a loan; and
(E) Forgiveness of a YL debt due to circumstances beyond the borrower's control.
*****
Hearing official. For the purposes of salary offset, the hearing official is an Administrative Law Judge of the
*****
7. Add Subpart F to read as follows:
Subpart F--Farm Loan Programs Debt Settlement
Sec.
761.401Purpose.
761.402Abbreviations and definitions.
761.403General.
761.404Eligibility.
761.405Application.
761.406Types of debt settlement.
761.407Failure to pay.
761.408Administrator authority.
(a) This subpart describes the Agency's policies for debt settlement as authorized by the
(b) FLP debts that cannot be debt settled using CONACT debt settlement authority such as when a borrower has received previous debt forgiveness on another direct loan made under the CONACT, will be processed as specified in 31 U.S.C. chapter 37 and 31 CFR parts 900 through 904.
(a) Abbreviations and definitions for terms used in this subpart are provided in 7 CFR part 3 and
(b) Definitions used only in this subpart include:
(1) Third party converter means an individual or entity who:
(i) Is in possession of agency security property, or money from the sale of security, in relation to a loan or other debt that the individual or entity was not liable for; or
(ii) Assists, or participates knowingly or unknowingly, in the transportation or sale of agency security, in relation to a loan or other debt that the individual or entity was not liable for; or
(iii) Assists, or participates knowingly or unknowingly, in temporarily or permanently relocating or concealing the location of agency security property, or money from the sale of agency security, in relation to a loan or other debt that the individual or entity was not liable for.
(2) [Reserved]
(a) The Agency will settle debts that result from, except as otherwise specified in this section:
(1)(i) Farm Ownership loans (part 764, subpart D of this chapter), including down payment loans (764, subpart E of this chapter);
(ii) Operating loans (part 764, subpart G of this chapter), including microloans part 764 of this chapter), and youth loans (part 764, subpart H of this chapter);
(iii) Emergency loans (part 764, subpart I of this chapter);
(iv) Conservation loans (part 764, subpart F of this chapter);
(v) Economic Emergency loans (serviced under parts 761 through 767 of this chapter); softwood timber loans; Soil and Water loans; Individual Recreation Loans; Irrigation and Drainage loans; and Shift-in-land-use (
(2) Costs associated with servicing a borrower's account including, but not limited to, Uniform Commercial Code filing fees, surveys, appraisals, protective advances, and liquidation expenses;
(3) Debts reduced to judgment;
(4) Non-Program Loans;
(5) Amounts the Agency is authorized to recapture through agreements such as the Shared Appreciation Agreement (part 766, subpart E of this chapter);
(6) Loss claims paid on guaranteed loans (part 762 of this chapter);
(7) Unauthorized assistance;
(8) Amounts the Agency may collect from third party converters, or other individuals or entities having possession of security for FLP loans or monies obtained through the sale of FLP loan security; and
(9) Debt returned to the Agency from the
(b) The debtor's signature is not required to process some debt settlement actions. These cases include, but are not limited to, debts discharged in bankruptcy and debts returned from
(c) FSA will not engage in settlement of a debt if:
(1) Foreclosure of security has been initiated and is pending with Justice, unless Justice has advised FSA that it does not object to the settlement; or
(2) Debts that have been referred to Justice for a judgment, or a judgement has been obtained by
(3) The debtor's account is involved in a fiscal irregularity investigation in which final action has not been taken or the account shows evidence that a shortage may exist and an investigation will be requested; or
(d) The Agency will consider settlement of a debt only when:
(1) All security has been liquidated and the proceeds, less any prior lien amounts, have been applied to the debt; or the Agency received a lump sum payment equal to the security's current market value, less any prior lien amounts, and
(2) Payment is received based on the Agency's determination of the amount the borrower can pay to resolve the remaining balance owed on the unsecured debt.
(3) The lump sum payment made under paragraph (d)(1) of this section for the security's market value may be submitted by the borrower, an individual authorized to act for the borrower pursuant to a power of attorney document or court order, or an individual who is not an obligor on the debt but who has an ownership interest in the security.
(e) If an FLP loan has been accelerated and all security has been liquidated, and the agency has approved an adjustment debt settlement offer in accordance with this subpart, voluntary payments and involuntary payments (such as offsets) will be applied in the following order, as applicable:
(1) Recoverable costs and protective advances plus interest;
(2) Loan principal;
(3) Deferred non-capitalized interest;
(4) Accrued deferred interest; and
(5) Interest accrual to date of payment.
(f) Settlement of FLP debt referred to
(a) A borrower is eligible for debt settlement if the borrower:
(1) Meets the requirements for the particular type of debt settlement under this part; and
(2) Submits a complete application for debt settlement as specified in
(b) All parties liable for the debt must submit a complete application with the following exceptions:
(1) The applicable information required in
(2) The debt may be settled when the borrower has no known assets or income from which collection can be made, has disappeared and cannot be located without undue expense, and there is no security remaining for the debt.
(3) In cases where the full amount of the unsecured debt cannot be collected in a reasonable time by legal action or through enforced collection proceedings, the Agency may consider a debt settlement offer submitted by a borrower without requiring a complete application. When evaluating these offers, the Agency will consider the likelihood of the debtor obtaining a larger income or additional assets, including inheritance prospects within 5 years, from which legal or enforced collection could be made.
(c) A borrower is not eligible for debt settlement if:
(1) The borrower is indebted on another active FLP loan that the borrower cannot or will not debt settle; or
(2) The debt has been referred to the OIG, OGC, or Justice because of suspected civil or criminal violation, unless investigation was declined or advice was provided that the debt can be canceled, compromised, or adjusted.
(a) A borrower requesting debt settlement must submit complete and accurate information from which the Agency can make a full determination of the borrower's financial circumstances and repayment ability. Except for the situations listed in
(1) One completed original debt settlement application on the applicable Agency form signed by all parties liable for the debt;
(2) A current financial statement;
(3) A cash flow projection for the next production or earnings period;
(4) Verification of employment or other earned income, including verification of a nondebtor spouse's income which will be included as available to pay family living expenses;
(5) Verification of assets including, but not limited to, cash, checking accounts, savings accounts, certificates of deposit, individual retirement accounts, retirement and pension funds, mutual funds, stocks, bonds, and accounts receivable;
(6) Verification of debts greater than
(7) Copies of complete Federal income tax returns for the previous 3 years; and
(8) Any other items requested by the Agency to evaluate the debtor's financial condition.
(b) [Reserved]
(a) Compromise. The Agency may compromise a debt owed to the Agency if the requirements of this subpart are met and:
(1) The borrower pays a lump sum as a compromise for the remaining unsecured debt; and
(2) The amount is reasonable based on the Agency's determination of what the borrower can pay to settle the debt.
(b) Adjustment. The Agency may settle a debt owed to the Agency through an adjustment agreement if the requirements of this subpart are met and:
(1) The borrower agrees to pay the adjustment amount for a period of time not to exceed 5 years; and
(2) The amount is reasonable based on the Agency's determination of what the borrower can pay to settle the debt; and
(3) The borrower provides documentation that funds are, or will be, available to pay the adjustment offer through its term.
(c) Cancellation. The Agency may cancel a debt owed to the Agency if the requirements of this subpart are met and the application and supporting documents indicate that the borrower is unable to pay a compromise or adjustment offer.
(a) Failure to pay any compromise amount approved by FSA by the date agreed will result in cancellation of the compromise agreement.
(b) Failure to pay debt adjustment amounts approved by FSA by the dates agreed will result in cancellation of the adjustment agreement.
(c) A debtor who has entered into an agreement under this subpart may request that FSA extend a repayment date for 90 days. The debtor must provide information that supports the basis for the request at the time the request is made.
(d) If a debtor is delinquent under the terms of an adjustment agreement and FSA determines the debtor is likely to be financially unable to meet the terms of the agreement, the existing agreement may be cancelled and the debtor may be allowed to apply for a different type of settlement more consistent with the debtor's repayment ability.
(e) If an agreement is cancelled, any payments received will be retained as payments on the debt owed.
On an individual case basis, the Agency may consider granting an exception to any requirement of this part if:
(a) The exception is not inconsistent with the authorizing statute or other applicable law; and
(b) The Agency's financial interest would be adversely affected by acting in accordance with this part and granting an exception would resolve or eliminate the adverse effect upon its financial interest.
PART 765--FARM LOAN PROGRAMS, DIRECT LOAN SERVICING--REGULAR
8. The authority citation for part 765 continues to read as follows:
Authority: 5 U.S.C. 301 and 7 U.S.C. 1989.
Subpart D--Borrower Payments
9. Amend
Subpart I--Transfer of Security and Assumption of Debt
10. Amend
*****
(b) * * *
(3) If an outstanding balance will remain and all of the transferor's security has been transferred, the transferor may pay the remaining balance or request debt settlement in accordance with part 761 subpart F of this chapter. If the transferor does not resolve the debt by paying the remaining balance or submitting a debt settlement offer that is acceptable to the Agency, the Agency will service the debt in accordance with part 3 of this title using all applicable collection tools including, but not limited to, administrative offset, AWG, cross-servicing, Federal salary offset, and TOP.
*****
PART 766--FARM LOAN PROGRAMS, DIRECT LOAN SERVICING--SPECIAL
11. The authority citation for part 766 continues to read as follows:
Authority: 5 U.S.C. 301 and 7 U.S.C. 1989.
Subpart C--Loan Servicing Programs
12. Amend
a. In paragraph (b)(1), remove the words "(Appendix A to this subpart)";
b. In paragraph (b)(2), remove the phrase "FSA-2510" and add the phrase "FSA-2510 (Appendix A to this subpart) or FSA-2510-IA" in its place;
c. In paragraph (b)(3), remove the words "(Appendix C to this subpart)"; and
d. In paragraph (d)(2), remove the phrase "FSA-2510" and add the phrase "FSA-2510 or FSA-2510-IA" in its place.
13. Amend
14. Revise
15. Revise appendix A to subpart C to read as follows:
Appendix A to Subpart C of Part 766--FSA-2510, Notice of Availability of Loan Servicing to Borrowers Who Are 90 Days Past Due This appendix contains the notification (form letter) that the
BILLING CODE 3410-KS-P
See illustration in Original Document.
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See illustration in Original Document.
See illustration in Original Document.
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See illustration in Original Document.
See illustration in Original Document.
16. Revise appendix B to subpart C to read as follows:
Appendix B to Subpart C of Part 766--FSA-2510-IA, Notice of Availability of Loan Servicing to Borrowers Who Are 90 Days Past Due (For Use in Iowa Only)
This appendix contains the notification (form letter) that the
See illustration in Original Document.
See illustration in Original Document.
See illustration in Original Document.
See illustration in Original Document.
See illustration in Original Document.
See illustration in Original Document.
See illustration in Original Document.
See illustration in Original Document.
See illustration in Original Document.
See illustration in Original Document.
BILLING CODE 3410-KS-C
Appendix C to Subpart C of Part 766 [Removed]
17. Remove appendix C to subpart C.
Subpart H--Loan Liquidation
18. Amend
19. Amend
20. Amend
(a) * * *
(6) Complete debt settlement application in accordance with part 761, subpart F of this chapter before, or in conjunction with, the voluntary conveyance offer if the value of the property to be conveyed is less than the FLP debt.
*****
21. Amend
*****
(b) * * *
(5) If an unpaid balance on the FLP loan remains after the foreclosure sale of the property, the Agency will service the account in accordance with part 761, subpart F of this chapter and part 3 of this title.
(c) * * *
(3) If an unpaid balance on the FLP loan remains after the sale of the repossessed property, the Agency will service the account in accordance with part 761, subpart F of this chapter and part 3 of this title.
PART 772--FARM LOAN PROGRAMS, SERVICING MINOR PROGRAM LOANS
22. The authority citation for part 772 continues to read as follows:
Authority:5 U.S.C. 301, 7 U.S.C. 1989, 25 U.S.C. 490.
23. Amend
*****
(c) Servicing of debt not satisfied through liquidation. Balances remaining after the sale or liquidation of the security will be serviced in accordance with part 761, subpart F of this chapter and part 3 of this title.
24. Revise
(a) AMP loans. If the borrower does not make arrangements to cure the default after notice by the Agency and is not eligible for reamortization in accordance with
(b) IMP loans. Delinquent IMP loans will be serviced in accordance with part 761, subpart F of this chapter and part 3 of this title.
PART 792--[REMOVED]
25. Under the authority of 31 U.S.C. 3717, remove part 792.
PART 1403--[REMOVED]
26. Under the authority of 15 U.S.C. 714b, remove part 1403.
PART 1951--SERVICING AND COLLECTIONS
27. The authority citation for part 1951 continues to read as follows:
Authority:5 U.S.C. 301; 7 U.S.C 1932 note; 7 U.S.C. 1989; 31 U.S.C. 3716; 42 U.S.C. 1480.
Subpart C [Removed and Reserved]
28. Remove and reserve subpart C, consisting of [Sec.]
PART 1956--DEBT SETTLEMENT
29. The authority citation for part 1956 continues to read as follows:
Authority: 5 U.S.C. 301; and 7 U.S.C. 1989.
Subpart B--Debt Settlement--Farm Loan Programs and
30. Amend
The addition reads as follows.
* * * The provisions of this subpart do not apply to any program administered by the
Subpart C--Debt Settlement--Community and Business Programs
31. Amend
* * * The provisions of this subpart do not apply to any program administered by the
Chairman, Federal Crop Insurance Corporation Board.
Vice Chairman,
[FR Doc. 2020-09447 Filed 6-16-20;
BILLING CODE 3410-KS-P
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