Claims-Collection Regulation
| Published date | 11 June 2021 |
| Citation | 86 FR 31139 |
| Record Number | 2021-11245 |
| Section | Rules and Regulations |
| Court | Agency For International Development |
Federal Register, Volume 86 Issue 111 (Friday, June 11, 2021)
[Federal Register Volume 86, Number 111 (Friday, June 11, 2021)]
[Rules and Regulations]
[Pages 31139-31146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11245]
[[Page 31139]]
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AGENCY FOR INTERNATIONAL DEVELOPMENT
22 CFR Part 213
RIN 0412-AA96
Claims--Collection Regulation
AGENCY: U.S. Agency for International Development.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The U.S. Agency for International Development (USAID) is
revising its regulation on claims collection in its entirety to
incorporate applicable statutory and regulatory provisions and to make
other changes. Specifically, an amendment made by the Digital
Accountability and Transparency Act of 2014 (DATA Act) requires USAID
to refer to the Secretary of the Treasury all past-due, legally
enforceable, non-tax debt that are over 120 days delinquent. The
changes will maximize the effectiveness of USAID's claim-collection
procedures.
DATES: Effective July 12, 2021.
FOR FURTHER INFORMATION CONTACT: Dorothea Malloy, Senior Advisor to the
Chief Financial Officer, 202-916-2518, [email protected] for
clarification of content or information pertaining to status or
publication schedules. All communications regarding this rule must cite
RIN No. 0412-AA96
SUPPLEMENTARY INFORMATION: USAID sought public comment on a proposed
rule published on March 1, 2021, to revise its regulations under 22 CFR
part 213, USAID's claim-collection regulation. The final rule's purpose
is to conform to a statutory requirement that Federal Departments and
Agencies must refer all past-due, legally enforceable, non-tax debt
that is delinquent for more than 120 days, including non-tax debt
administered by a third party that is acting as an agent for the
Federal Government, to the Secretary of the Treasury for the purposes
of administrative offset. The final rule also updates claims-collection
definitions to align with the Debt Collection Improvement Act of 1996
and specifies that the Bureau of the Fiscal Service is the Agency
within the U.S. Department of the Treasury to which USAID refers
delinquent debts.
A. Background
USAID published a proposed rule in the Federal Register at 86 FR
11905 (March 1, 2021) to revise its regulation on claims collection in
its entirety to incorporate applicable statutory and regulatory
provisions and to make other changes. The public comment period for
this proposed rule ended on March 31, 2021.
B. Discussion and Analysis
There were no relevant public comments submitted in response to the
proposed rule and no changes were made to the final rule.
C. Regulatory Findings
Executive Orders 12866, 13563, and 13771
USAID has drafted this rule in accordance with Executive Orders
(E.O.s) 12866 and 13563, which direct Federal Departments and Agencies
to assess all the costs and benefits of available regulatory
alternatives and, if regulation is necessary, to select regulatory
approaches that maximize net benefits (including potential economic,
environmental, public health and safety effects, distributive impacts,
and equality). E.O. 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility. USAID has reviewed the regulation to ensure its
consistency with the regulatory philosophy and principles set forth in
E.O.s 12866 and 13563 and finds that the benefits of issuing this rule
outweigh any costs, which the Agency assesses to be minimal. The Office
of Information and Regulatory Affairs within the Office of Management
and Budget (OMB/OIRA) has determined that this rule is not a
``significant regulatory action'' as defined in E.O. 12866 and,
accordingly, has not reviewed it. OMB/OIRA also has determined that
this rule is not an ``economically significant regulatory action''
under Section 3(f)(1) of E.O. 12866. This final rule is not subject to
the requirements of E.O. 13771 because OMB has determined it to be non-
significant within the meaning of E.O. 12866.
Regulatory Flexibility Act
USAID certifies that this rule will not have a significant economic
impact on a substantial number of small entities. Consequently, the
Agency has not prepared a regulatory-flexibility analysis.
Small Business Regulatory Enforcement Fairness Act
This rule is not a ``major rule'' as defined by the Small Business
Regulatory Enforcement Fairness Act of 1996 (Section 804(2) of Title 5
of the United States Code [U.S.C.]). This rule will not result in an
annual effect on the U.S. economy of $100 million or more; a major
increase in costs or prices; or significant adverse effects on
competition, employment, investment, productivity, innovation, or on
the ability of U.S.-based companies to compete with foreign-based
companies in domestic and import markets.
Unfunded Mandates Reform Act
This final rule will not result in the expenditure by State, local,
and tribal governments, in the aggregate, or by the private sector, of
$100 million or more in any year, and it will not significantly or
uniquely affect small governments. Therefore, USAID has deemed no
actions were necessary under the provisions of the Unfunded Mandates
Reform Act of 1995 (2 U.S.C. 1531 et seq.).
Executive Order 13132
This rule will not have a substantial direct effect on the States,
on the relationship between the National Government and the States, or
on the distribution of power and responsibilities among the various
levels of government. In accordance with E.O. 13132, USAID has
determined that this rule does not have sufficient federalism
implications to warrant the preparation of a Federalism Summary Impact
Statement.
Executive Order 12988
In accordance with E.O. 12988, the Office of the General Counsel at
USAID has determined that this rule does not unduly burden the judicial
system and meets the requirements of Sections 3(a) and 3(b)(2) of the
Executive order.
Executive Order 13175
USAID has determined that this rule would not have substantial
direct effects on one or more Indian Tribes, the relationship between
the Federal Government and Indian Tribes, or the distribution of power
and responsibilities between the Federal Government and Indian Tribes
(E.O. 13175).
Paperwork Reduction Act
This rule does not contain information-collection requirements, and
therefore a submission to OMB under the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.) is not required.
List of Subjects in 22 CFR Part 213
Claims, Government employees, Income taxes, Wages.
Accordingly, the Agency for International Development amends 22 CFR
part 213 as follows:
[[Page 31140]]
PART 213--CLAIMS COLLECTION
0
1. The authority citation for part 213 is revised to read as follows:
Authority: 22 U.S.C. 2381(a); 31 U.S.C. 902(a); 31 U.S.C. 3701-
3719; 5 U.S.C. 5514; 31 CFR part 285; 31 CFR parts 900 through 904.
Subpart A--General Provisions
0
2. Revise the heading for subpart A to read as set for above.
0
3. Revise Sec. 213.1 to read as follows:
Sec. 213.1 Purpose and scope.
(a) Purpose. This part prescribes standards and procedures for the
collection and disposal of claims due to the United States from the
U.S. Agency for International Development (USAID). This part covers
USAID's administrative actions to collect claims/debts (including
administrative and salary offsets; compromise; suspension or
termination of collection actions; transfer and/or referral of claims
to the U.S. Departments of the Treasury and Justice). The terms
``claim'' and ``debt'' are synonymous and interchangeable. They refer
to an amount of money, funds, or property that an appropriate USAID
official has determined to be due to the United States from any person,
organization, or entity except another Federal Department or Agency.
(b) Scope. The standards and procedures in this part are applicable
to all claims and debts for which a statute, regulation, or contract
does not prescribe different standards or procedures.
(c) Applicability. This part does not apply to USAID:
(1) Claims arising out of loans for which compromise and collection
authority is conferred by section 635(g)(2) of the Foreign Assistance
Act of 1961, as amended;
(2) Claims arising from investment guaranty operations for which
settlement and arbitration authority is conferred by section 635(l) of
the Foreign Assistance Act of 1961, as amended;
(3) Claims against any foreign country or any political subdivision
thereof, or any public international organization;
(4) Claims where the Chief Financial Officer (CFO) determines that
the achievement of the purposes of the Foreign Assistance Act of 1961,
as amended, or any other provision of law administered by USAID require
a different course of action;
(5) Claims owed USAID by other Federal Departments and Agencies.
Such debts will be resolved by negotiation between the Departments/
Agencies; and
(6) Claims that appear to be fraudulent, false, or misrepresented
by a party with an interest in the claim except to the extent provided
in Sec. 213.4.
0
4. Amend Sec. 213.2 by revising paragraphs (d) through (o) and adding
paragraphs (p) through (s) to read as follows:
Sec. 213.2 Definitions.
* * * * *
(d) Claim (or Debt) means an amount of money, funds, or property
that a USAID official has determined to be due the United States from
any person, organization, or entity, except another Federal Department
or Agency. As used in this part, the terms ``debt'' and ``claim'' are
synonymous and interchangeable.
(e) CFO means the Chief Financial Officer of USAID or a USAID
official delegated by the CFO to act on the CFO's behalf.
(f) Compromise means that the creditor Agency accepts less than the
full amount of an outstanding debt in full satisfaction of the entire
amount of the debt.
(g) Creditor Agency means the Federal Department or Agency to which
the debt is owed, including a debt-collection center when acting on
behalf of a creditor Agency in matters pertaining to the collection of
a debt.
(h) Debtor means an individual, organization, association,
corporation, or a State or local government indebted to the United
States, or a person or entity with legal responsibility for assuming
the debtor's obligation.
(i) Delinquent debt means any debt that is 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 notice or
applicable agreement or instrument (including a postdelinquency payment
agreement) unless the parties involved have made other satisfactory
payment arrangements.
(j) Discharge of indebtedness means the release of a debtor from
personal liability for a debt. Further collection action is prohibited.
(k) 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, which remains
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 of the United States Code) and
deductions described in 5 CFR 581.105(b) through (f). These deductions
include, but are not limited to, Social Security withholdings; Federal,
State, and local tax withholdings; health-insurance premiums;
retirement contributions; and life-insurance premiums.
(l) Employee means a current U.S. Direct-Hire employee of the
Federal Government, including a current member of the Armed Forces or a
Reserve of the Armed Forces.
(m) Employee salary offset means the administrative collection of a
debt by deductions at one or more officially established pay intervals
from the current pay account of an employee without the employee's
consent.
(n) Person means an individual, firm, partnership, corporation,
association, and, except for purposes of administrative offsets under
subpart C of this part and interest, penalties, and administrative
costs under subpart B of this part, includes State and local
governments and Indian tribes and components of tribal governments.
(o) Recoupment is a special method for adjusting debts that arise
under the same transaction or occurrence. For example, obligations that
arise under the same contract generally are subject to recoupment.
(p) Suspension means the temporary cessation of active debt
collection pending the occurrence of an anticipated event.
(q) Termination means the cessation of all active debt-collection
action for the foreseeable future.
(r) Waiver means the decision to forgo the collection of a debt
owed to the United States, as provided for by a specific statute and
according to the standards set out under that statute.
(s) Withholding order means any order for the withholding or
garnishment of pay issued by USAID or a judicial or administrative
body. For the purposes of this part, ``wage garnishment order'' and
``garnishment order'' have the same meaning as ``withholding order.''
Sec. 213.3 [Removed]
0
5. Remove Sec. 213.3.
Sec. 213.4 [Redesignated as Sec. 213.3]
0
6. Redesignate Sec. 213.4 as Sec. 213.3.
0
7. Amend newly redesignated Sec. 213.3 by revising paragraph (a) to
read as follows:
Sec. 213.3 Other remedies.
(a) This part does not supersede or require the omission or
duplication of administrative proceedings required by
[[Page 31141]]
contract, statute, or regulation (e.g., resolution of audit findings
under grants or contracts; or appeal provisions under grants or
contracts).
* * * * *
Sec. 213.5 [Redesignated as Sec. 213.4]
0
8. Redesignate Sec. 213.5 as Sec. 213.4 and revise it to read as
follows:
Sec. 213.4 Fraud claims.
(a) The CFO will refer a claim that appears to be fraudulent,
false, or misrepresented by a party that has an interest in the claim
to the USAID Office of Inspector General (OIG). The OIG has the
responsibility for investigating or referring the matter, where
appropriate, to the U.S. Department of Justice (DOJ). The OIG has the
responsibility to provide the results of the investigation on a timely
basis to the CFO for any further action.
(b) The CFO will not administratively compromise, terminate, or
suspend collection action, or otherwise dispose of a claim that appears
to be fraudulent, false, or misrepresented by a party that has an
interest in the claim, without the approval of DOJ.
Sec. 213.6 [Redesignated as Sec. 213.5]
0
9. Redesignate Sec. 213.6 as Sec. 213.5 and revise it to read as
follows:
Sec. 213.5 Subdivision of claims not authorized.
USAID will not subdivide a claim to avoid the $100,000 limit on the
Agency's authority to compromise a claim, suspend collection action on
a claim, or terminate collection action on a claim. A debtor's
liability that arises from a particular transaction or contract is a
single claim.
Sec. 213.7 [Redesignated as Sec. 213.6]
0
10. Redesignate Sec. 213.7 as Sec. 213.6.
Subpart B--Collection Actions
0
11. Revise the heading for subpart B to read as set forth above.
Sec. 213.8 [Redesignated as Sec. 213.7 and Transferred to Subpart
B]
0
12. Redesignate Sec. 213.8 as Sec. 213.7 and transfer it to subpart
B.
0
13. Amend newly redesignated Sec. 213.7 by revising paragraph (a) to
read as follows:
Sec. 213.7 Collection--general.
(a) The CFO takes action to collect all debts owed the United
States that arise out of USAID's activities, and to reduce debt
delinquencies. Collection actions may include sending at least one
written demand for payment notice to the debtor's last-known address
provided in the records of USAID. Other appropriate action may proceed
the written demand for payment notice, including immediate referral to
DOJ for litigation, when such action is necessary to protect the
Federal Government's interest.
* * * * *
Sec. 213.9 [Redesignated as Sec. 213.8]
0
14. Redesignate Sec. 213.9 as Sec. 213.8.
0
15. Amend newly redesignated Sec. 213.8 by:
0
a. Revising the section heading and paragraphs (a) introductory text
and (a)(4), (5), (7), (8), (10), and (11);
0
b. Adding paragraph (a)(12); and
0
c. Revising paragraph (b).
The revisions and addition read as follows:
Sec. 213.8 Written demand for payment notice.
(a) When an Agency official determines that a debt is owed to
USAID, the Agency sends a written demand for payment notice to the
debtor. Unless otherwise provided by agreement, contract, or order, the
written demand for payment notice informs the debtor of:
* * * * *
(4) Any rights available to the debtor to review the debt, or to
have recovery of the debt waived (by citing the available review or
waiver authority, the conditions for review or waiver, and the effects
of the review or waiver request on the collection of the debt);
(5) The date on which debt payment is due, which will be not more
than 30 days from the date the written demand for-payment notice is
mailed or hand delivered;
* * * * *
(7) The debt is considered delinquent if it is not paid on the due
date provided in the initial written demand-of payment notice;
(8) The imposition of interest charges, penalties, and
administrative costs that USAID may assess against a delinquent debt,
and the date when such charges apply;
* * * * *
(10) The Agency will refer delinquent debt unpaid at 90 days from
the initial written demand for payment notice to the Bureau of the
Fiscal Service (Fiscal Service) within the U.S. Department of the
Treasury. Statute requires the referral of delinquent debt to Fiscal
Service no later than 120 days from the initial written demand-for-
payment notice. Fiscal Service will use means available to the Federal
Government for collecting a debt, including administrative wage-
garnishment, the use of collection agencies, and reporting the
indebtedness to a credit-reporting bureau (see Sec. 213.15);
(11) The address, telephone number, and name of the person
available to discuss the debt; and
(12) The possibility of referral to DOJ for litigation if USAID
cannot collect the debt administratively.
(b) USAID will respond promptly to written communications from the
debtor, generally within 30 days of receipt of such a communication.
Sec. 213.10 [Redesignated as Sec. 213.9]
0
16. Redesignate Sec. 213.10 as Sec. 213.9.
0
17. Amend newly redesignated Sec. 213.9 by revising the section
heading and paragraphs (a) and (c) and adding paragraph (e) to read as
follows:
Sec. 213.9 Agency review requirements.
(a) For purposes of this section, whenever USAID must afford a
debtor a review within the Agency, USAID shall provide the debtor with
a reasonable opportunity for a review when the debtor requests
reconsideration of the debt in question. The review may include the
examination of documents, internal discussions with relevant officials,
and discussion by letter or orally with the debtor, at USAID's
discretion. For the offset of current Federal salary under 5 U.S.C.
5514 for certain debts, an employee may request an outside hearing. See
Sec. Sec. 213.21 and 213.22 when USAID is the creditor Agency.
* * * * *
(c) This section does not require an oral hearing with respect to
debt collection in which the agency has determined that review of the
written record is an adequate means to correct a prior mistake.
* * * * *
(e) If, after review, USAID either sustains or amends its
determination, it shall notify the debtor of its intent to collect the
sustained or amended debt. The notification to collect the sustained or
amended debt will include accrued interest on the sustained or amended
debt, calculated from the date of delinquency. If USAID has suspended
collection actions previously, it will reinstitute them unless it
receives payment of the sustained or amended amount, or the debtor has
made a proposal for a payment plan to which the Agency agrees, by the
date specified in the notification of USAID's decision.
Sec. 213.11 [Redesignated as Sec. 213.10]
0
18. Redesignate Sec. 213.11 as Sec. 213.10.
0
19. Amend newly redesignated Sec. 213.10 by revising paragraph (b) to
read as follows:
[[Page 31142]]
Sec. 213.10 Aggressive collection actions; documentation.
* * * * *
(b) USAID documents all administrative collection actions in the
claim file, along with the basis for any compromise, termination, or
suspension of collection actions. USAID retains this documentation,
which may include the Claims-Collection Litigation Report (CCLR)
provided in Sec. 213.24, in the appropriate debt file.
Sec. 213.12 [Redesignated as Sec. 213.11]
0
20. Redesignate Sec. 213.12 as Sec. 213.11.
0
21. Amend newly redesignated Sec. 213.11 by revising the section
heading and paragraphs (a)(1) and (e) to read as follows:
Sec. 213.11 Interest, penalties, and administrative costs.
(a) * * *
(1) Interest begins to accrue on all delinquent debts starting from
the day after the payment due date established in the initial written
demand-for payment notice to the debtor. USAID will assess an annual
rate of interest that is equal to the U.S. Department of the Treasury
Current Value of Funds Rate (CVFR) unless a different rate is necessary
to protect the interest of the Federal Government. USAID will notify
the debtor of the basis for its finding that a different rate is
necessary to protect the interest of the Government.
* * * * *
(e) Waivers for the collection of interest, penalties, and
administrative costs. (1) The CFO will waive the collection of interest
and administrative charges on the portion of the debt paid within 30
days after the date on which interest begins to accrue. The CFO may
extend this 30-day period, on a case-by case basis, when he or she
determines that such action is in the best interest of the Federal
Government. A decision to extend or not to extend the payment period is
final, and is not subject to further review.
(2) The CFO may (without regard to the amount of the debt) waive
the collection of all or part of accrued interest, penalties, or
administrative costs, when he or she determines that--
(i) A waiver is justified under the standards for the compromise of
claims under Sec. 213.25; or
(ii) Collection of these charges would be against equity and good
conscience, or is not in the best interest of the United States.
(3) The CFO may make a decision to waive interest, penalties, or
administrative costs at any time.
Sec. 213.13 [Redesignated as Sec. 213.12]
0
22. Redesignate Sec. 213.13 as Sec. 213.12 and revise it to read as
follows:
Sec. 213.12 Interest, penalties, and administrative costs pending
consideration of debt waiver or review.
Interest, penalties, and administrative costs will continue to
accrue on a debt during a review by USAID and during a waiver of
indebtedness consideration by the Agency; except that USAID will not
assess interest, penalties, and administrative costs where a statute or
a regulation specifically prohibits the collection of the debt during
the period of the Agency's review or consideration of a debt waiver.
0
23. Add new Sec. 213.13 to read as follows:
Sec. 213.13 Waivers of indebtedness.
The CFO may grant waivers of indebtedness for certain types of debt
identified in Federal statutes under the following waiver authorities:
(a) Waiver authorities--(1) Debts that arise out of erroneous
payments of pay and allowances, and of travel, transportation, and
relocation expenses and allowances. Title 5 U.S.C. 5584 provides the
authority for waiving, in whole or in part, debts that arise out of
erroneous payments of pay or allowances, travel, transportation, or
relocation expenses and allowances to an employee of USAID, if
collection would be against equity and good conscience, or not in the
best interests of the United States:
(i) The CFO may not grant a waiver if there exists in connection
with the claim an indication of fraud, misrepresentation, fault, or
lack of good faith on the part of the employee or any other person who
has an interest in obtaining a waiver.
(ii) Fault is considered to exist if, in light of the
circumstances, the employee knew, or should have known through the
exercise of due diligence, that an error existed, but he or she failed
to take corrective action. What an employee should have known is
evaluated under a reasonable-person standard. However, employees are
expected to have a general understanding of the Federal pay system
applicable to them.
(iii) An employee with notice that a payment might be erroneous is
expected to make provisions for eventual repayment. Financial hardship
is not a basis for granting a waiver for an employee who was on notice
of an erroneous payment.
(iv) If the deciding official finds no indication of fraud,
misrepresentation, fault, or lack of good faith on the part of the
employee or any other person who has an interest in obtaining a waiver
of the claim, the employee is not automatically entitled to a waiver.
Before granting a waiver, the deciding official also must determine
that collection of the claim against an employee would be against
equity and good conscience, or not in the best interests of the United
States. Factors to consider when determining if collection of a claim
against an employee would be against equity and good conscience, or not
in the best interests of the United States, include, but are not
limited to, the following:
(A) Whether collection of the claim would cause serious financial
hardship to the employee from whom the Agency seeks collection;
(B) Whether, because of the erroneous payment, the employee either
has relinquished a valuable right or changed positions for the worse,
regardless of his or her financial circumstances;
(C) The time elapsed between the erroneous payment and the
discovery of the error and notification of the employee;
(D) Whether failure to make restitution would result in unfair gain
to the employee; and
(E) Whether recovery of the claim would be unconscionable under the
circumstances.
(2) Debts that arise out of advances in pay (5 U.S.C. 5524a);
situations of Authorized or Ordered Departures (5 U.S.C. 5522); or
allowances and differentials for employees stationed abroad (5 U.S.C.
5922). Title 5 U.S.C. 5524a, 5522, or 5922 provide authority for
waiving, in whole or in part, a debt that arises out of such an advance
payment if it is shown that recovery would be against equity and good
conscience, or against the public interest:
(i) Factors to consider when determining if recovery of an advance
payment would be against equity and good conscience, or against the
public interest, include, but are not limited to, the following:
(A) Death of the employee;
(B) Retirement of the employee for disability;
(C) Inability of the employee to return to duty because of
disability (supported by an acceptable medical certificate); and
(D) Whether failure to repay would result in unfair gain to the
employee.
(ii) [Reserved]
(3) Debts that arise out of employee training expenses. Title 5
U.S.C. 4108 provides the authority for waiving, in whole or in part, a
debt that arises out of employee training expenses if it is shown that
recovery would be against
[[Page 31143]]
equity and good conscience, or against the public interest:
(i) Factors to consider when determining if recovery of a debt that
arises out of employee training expenses would be against equity and
good conscience, or against the public interest, include, but are not
limited to, the following:
(A) Death of the employee;
(B) Retirement of the employee for disability;
(C) Inability of the employee to return to duty because of
disability (supported by an acceptable medical certificate); and
(D) Whether failure to repay would result in unfair gain to the
employee.
(ii) [Reserved]
(4) Under-withholding of life insurance premiums. Title 5 U.S.C.
8707(d) provides the authority for waiving the collection of unpaid
deductions that result from the underwithholding of premiums under the
Federal Employees' Group Life Insurance Program if the individual is
without fault and recovery would be against equity and good conscience,
or against the public interest:
(i) Fault is considered to exist if, in light of the circumstances,
the employee knew, or should have known through the exercise of due
diligence, that an error existed, but he or she failed to take
corrective action:
(ii) Factors to consider when determining whether the recovery of
unpaid deduction that results from under-withholding would be against
equity and good conscience, or against the public interest, include,
but are not limited to, the following:
(A) Whether collection of the claim would cause serious financial
hardship to the individual from whom the Agency seeks collection;
(B) The time elapsed between the failure to withhold properly and
the discovery of the failure and notification of the individual;
(C) Whether failure to make restitution would result in unfair gain
to the individual; and
(D) Whether recovery of the claim would be unconscionable under the
circumstances.
(5) Student-Loan Repayment Program service agreements. Title 5
U.S.C. 5379 provides for waiving, in whole or in part, debt that arises
from the Student Loan Repayment Program if it is shown that recovery
would be against equity and good conscience, or against the public
interest:
(i) Factors to consider when determining if recovery of a debt that
arises out of the Student-Loan Repayment Program would be against
equity and good conscience, or against the public interest, include,
but are not limited to, the following:
(A) Death of the employee;
(B) Retirement of the employee for disability;
(C) Inability of the employee to return to duty because of
disability (supported by an acceptable medical certificate); and
(D) Whether failure to repay would result in unfair gain to the
employee.
(ii) [Reserved]
(b) [Reserved]
0
24. Amend Sec. 213.14 by revising the introductory text to read as
follows:
Sec. 213.14 Contracting for collection services.
USAID has entered into a cross-servicing agreement with the Bureau
of the Fiscal Service (Fiscal Service) of the U.S. Department of the
Treasury. Fiscal Service is authorized to take all appropriate action
to enforce the collection of accounts referred to it in accordance with
applicable statutory and regulatory requirements. Fiscal Service bases
any applicable fees on the funds collected, and will collect such fees
from the debtor along with the original amount of the indebtedness.
After referral, Fiscal Service will be solely responsible for the
maintenance of the delinquent debtor records in its possession, and for
updating the accounts as necessary. Fiscal Service may take any of the
following collection actions on USAID's behalf:
* * * * *
0
25. Amend Sec. 213.15 by revising the section heading, introductory
text, and paragraphs (b) introductory text, (b)(2)(ii) and (iii), and
(c) and removing paragraph (d).
The revisions read as follows:
Sec. 213.15 Use of credit-reporting bureaus.
USAID reports delinquent debts owed to it to appropriate credit-
reporting bureaus through the cross-servicing agreement with the Bureau
of the Fiscal Service (Fiscal Service) at the U.S. Department of the
Treasury.
* * * * *
(b) Before referring claims to Fiscal Service and disclosing debt
information to credit-reporting bureaus, USAID will have done the
following:
* * * * *
(2) * * *
(ii) If the debtor does not pay the debt 90 days after receiving
the initial written demand-for-payment notice, USAID intends to refer
the debt to Fiscal Service and disclose to a credit-reporting agency
the information authorized for disclosure by this subpart; and
(iii) The debtor can request an Agency review or waiver, where
applicable.
(c) Before submitting information to a credit-reporting bureau,
USAID will provide a written statement to Fiscal Service that the
Agency has taken all required actions. Additionally, Fiscal Service
thereafter will update the accounts as necessary during the period it
holds the account information.
Sec. 213.17 [Amended]
0
26. Amend Sec. 213.17 in the first sentence by adding the words ``or
she'' after the word ``he''.
Sec. 213.19 [Amended]
0
27. Amend Sec. 213.19 in the first sentence of paragraph (a) by
removing the word ``penalty'' and adding ``penalties,'' in its place.
Subpart C--Administrative and Salary Offset
0
28. Revise the heading for subpart C to read as set forth above.
0
29. Amend Sec. 213.20 by:
0
a. Revising paragraphs (a)(1), (a)(2)(ii), (a)(3)(i), and (b);
0
b. Removing paragraph (c);
0
c. Redesignating paragraphs (d) through (h) as paragraphs (c) through
(g);
0
d. Revising the subject heading to newly redesignated paragraph (d) and
revising paragraph (d)(1); and
0
e. In newly redesignated paragraphs (f)(1) and (f)(2)(ii), removing
``creditor agency'' and adding ``creditor Agency'' in its place.
The revisions read as follows:
Sec. 213.20 Administrative offset of nonemployee debts.
* * * * *
(a) * * *
(1) The CFO collects debts by administrative offset only after
USAID has sent the debtor a written demand-for-payment notice that
outlines the type and amount of the debt, the intention of the Agency
to use administrative offset to collect the debt, and explaining the
debtor's rights under 31 U.S.C. 3716.
(2) * * *
(ii) The opportunity for a review within USAID of the Agency's
decision related to the claim(s); and
* * * * *
(3) * * *
(i) The offset is in the nature of a recoupment;
* * * * *
(b) Interagency offset. The CFO may offset a debt owed to another
Federal Department or Agency from amounts due or payable by USAID to
the debtor,
[[Page 31144]]
or may request another Federal Department or Agency to offset a debt
owed to USAID. The CFO, through USAID's cross-servicing arrangement
with the Bureau of the Fiscal Service (Fiscal Service) within the U.S.
Department of the Treasury, may request the Internal Revenue Service to
offset an overdue debt from a Federal income-tax refund due to the
debtor. Fiscal Service may also garnish the salary of a private-sector
employee when reasonable attempts to obtain payment have failed. USAID
will make interagency offsets from an employee's salary in accordance
with the procedures contained in Sec. Sec. 213.22 and 213.23.
* * * * *
(d) Review of a decision to offset the debt. (1) USAID will not
offset the debt while a debtor is seeking review of the debt under this
section, or under another statute, regulation, or contract. However,
interest, penalties, and administrative costs will continue to accrue
during this period, unless otherwise waived by the CFO. The CFO may
initiate offset as soon as practical after the completion of a review,
or after a debtor waives the opportunity to request review.
* * * * *
0
30. Amend Sec. 213.21 by revising paragraph (b) to read as follows:
Sec. 213.21 Employee salary offset--general.
* * * * *
(b) Scope. The provisions of this section apply to collection by
salary offset under 5 U.S.C. 5514 of debts owed USAID and debts owed to
other Federal Departments and Agencies by USAID's employees. USAID will
make every effort reasonably and lawfully possible to collect
administratively any amounts owed by its employees prior to initiating
collection by salary offset. An amount advanced to an employee for per
diem or mileage allowances in accordance with 5 U.S.C. 5705, but not
used for allowable travel expenses, is recoverable from the employee by
salary offset without regard to the due-process provisions in Sec.
213.22. This section does not apply to debts for which another statute
collection explicitly provides for, or prohibits, salary offset (e.g.,
travel advances under 5 U.S.C. 5705 and employee-training expenses
under 5 U.S.C. 4108).
* * * * *
0
31. Amend Sec. 213.22 by revising the section heading and paragraphs
(c)(4) and (9), and (d), the paragraph (f) subject heading, and
paragraphs (f)(1), (g), (k)(1), (n) introductory text, and (n)(1) and
(3) to read as follows:
Sec. 213.22 Salary offset when USAID is the creditor Agency.
* * * * *
(c) * * *
(4) An explanation of the requirements concerning interest,
penalties, and administrative costs;
* * * * *
(9) That the filing of a request for hearing within 15 days of
receipt of the original notification will stay the assessment of
interest, penalties, and administrative costs, and the commencement of
collection proceedings;
* * * * *
(d) Request for a hearing. An employee may request a hearing by
filing a written, signed request to the Office of the Chief Financial
Officer, United States Agency for International Development, 1300
Pennsylvania Avenue NW, USAID Annex, Room 8.80D, Washington, DC 20523-
4601. The request must state the basis upon which the employee disputes
the proposed collection of the debt. The employee must sign the
request, and USAID must receive it within 15 days of his or her receipt
of the notification of proposed deductions. The employee should submit,
in writing, all facts, evidence, and witnesses that support his or her
position to the CFO within 15 days of the date of the request for a
hearing. The CFO will arrange for the services of a hearing official
not under the control of USAID, and will provide the hearing official
with all documents relating to the claim.
* * * * *
(f) Form of hearing, written response, and final decision. (1)
Normally, a hearing will consist of the hearing official's making a
decision based on a review of the claims file and any materials
submitted by the debtor. However, in instances in which the hearing
official determines that the validity of the debt turns on an issue of
veracity or credibility that the review of documentary evidence cannot
resolve, the hearing official, at his or her discretion, may afford the
debtor an opportunity for an oral hearing. Such an oral hearing will
consist of a conference before a hearing official in which the employee
and the Agency will have the opportunity to present evidence,
witnesses, and argument. If desired, the employee may be represented by
an individual of his or her choice. The Agency shall maintain a summary
record of oral hearings provided under the procedures in this section.
* * * * *
(g) Request for waiver. In certain instances, an employee may have
a statutory right to request a waiver of overpayment of pay or
allowances (e.g., 5 U.S.C. 5584 or 5 U.S.C. 5724(i)). When an employee
requests waiver consideration under a right authorized by statute, the
Agency will suspend further collection on the debt until it makes a
final administrative decision on the waiver request. However, when it
appears that an employee's resignation, termination, or other action
may prejudice the Government's ability to recover the debt, the
suspension of recovery is not required. During the period of the
suspension, USAID will not assess interest, penalties, charges, and
administrative costs against the debt. The Agency will not duplicate,
for purposes of salary offset, any of the procedures already provided
the debtor under a request for waiver. See Sec. 213.13.
* * * * *
(k) * * *
(1) Deductions to liquidate an employee's debt will begin on the
date stated in the Agency's written demand-for-payment notice of
intention to collect, from the employee's current pay unless he or she
has paid the debt or filed a timely request for a hearing on issues for
which a hearing is appropriate.
* * * * *
(n) Interest, penalties, and administrative cost. USAID will assess
interest, penalties, and administrative costs on debts collected under
the procedures in this section. Interest, penalties, and administrative
costs will continue to accrue during the period that the debtor is
seeking a review of the debt or requesting a waiver. The following
guidelines apply to the assessment of these costs on debts collected by
salary offset:
(1) USAID will start to assess interest on all debts not collected
by the payment due date specified in the initial written demand-for-
payment notice. USAID will waive the collection of interest and
administrative charges on the portion of the debt paid within 30 days
after the date on which interest begins to accrue.
* * * * *
(3) Deductions by administrative offset normally begin prior to the
time for assessment of a penalty. Therefore, USAID will not assess a
penalty charge unless deductions occur more than 90 days from the due
date in the initial written demand-for-payment notice.
* * * * *
0
32. Amend Sec. 213.23 by:
0
a. Revising the section heading;
0
b. Removing ``creditor agency'' and ``creditor agency's'' and adding in
their places ``creditor Agency'' and ``creditor
[[Page 31145]]
Agency's'', respectively, wherever they appear; and
0
c. Revising paragraph (b).
The revisions read as follows:
Sec. 213.23 Salary offset when USAID is not the creditor Agency.
* * * * *
(b) Requests to USAID by another Agency to offset salary. Requests
for salary offset must be sent to the Office of the Chief Financial
Officer, United States Agency for International Development, 1300
Pennsylvania Avenue NW, USAID Annex, Room 8.80D, Washington, DC 20523-
4601.
* * * * *
Subpart D--Compromise of Claims
0
33. Revise the heading for subpart D to read as set forth above.
0
34. Revise Sec. 213.24 to read as follows:
Sec. 213.24 General.
The CFO may compromise claims for money or property when the
principal balance of a claim, exclusive of interest, penalties, and
administrative costs, does not exceed $100,000. Where the claim exceeds
$100,000, the authority to accept the compromise rests with DOJ. The
CFO may reject an offer of compromise in any amount. DOJ's approval is
not required if the Agency rejects a compromise offer. When the claim
exceeds $100,000 and the CFO recommends acceptance of a compromise
offer, he or she will refer the claim with his or her recommendation to
DOJ for approval. The referral may be in the form of the Claims-
Collection Litigation Report (CCLR) and will outline the basis for
USAID's recommendation. USAID refers compromise offers for claims in
excess of $100,000 to the Commercial Litigation Branch of the Civil
Division of the Department of Justice, Washington, DC 20530, unless
otherwise provided by DOJ's delegations or procedures.
0
35. Revise Sec. 213.25 to read as follows:
Sec. 213.25 Standards for the compromise of claims.
(a) The CFO may compromise a claim pursuant to this section if
USAID cannot collect the full amount because:
(1) The debtor is unable to pay the full amount of the debt within
reasonable time, as verified through credit reports or other financial
information;
(2) The Federal Government is unable to collect the debt in full
within a reasonable time by enforced collection proceedings;
(3) The cost of collecting the debt does not justify the enforced
collection of the full amount; or
(4) There is significant doubt concerning the Government's ability
to prove its case in court;
(b) In evaluating the debtor's inability to pay, the CFO may
consider, among other factors, the following:
(1) Age and health of the debtor;
(2) Present and potential income;
(3) Inheritance prospects;
(4) The possibility that assets have been concealed or improperly
transferred by the debtor;
(5) The availability of assets or income which may be realized by
enforced collection proceedings; or
(6) The applicable exemptions available to the debtor under State
and Federal law in determining the Federal Government's ability to
enforce collection;
(c) The CFO may compromise a claim, or recommend acceptance of a
compromise to DOJ, where there is significant doubt concerning the
Federal Government's ability to prove its case in court for the full
amount of the claim, either because of the legal issues involved or
because of a bona fide dispute as to the facts. The amount accepted in
compromise in such cases will fairly reflect the probability of
prevailing on the legal issues involved, considering fully the
availability of witnesses and other evidentiary data required to
support the Government's claim. In determining the litigative risks
involved, USAID will give proportionate weight to the likely amount of
court costs and attorney fees the Government could incur if it is
unsuccessful in litigation;
(d) The CFO may compromise a claim, or recommend acceptance of a
compromise to DOJ, if the cost of collection does not justify the
enforced collection of the full amount of the debt. The amount accepted
in compromise in such cases may reflect an appropriate discount for the
administrative and litigative costs of collection, taking into
consideration the time it will take to effect collection. Costs of
collection might be a substantial factor in the settlement of small
claims, but normally will not carry great weight in the settlement of
large claims. In determining whether the cost of collection justifies
enforced collection of the full amount, USAID may consider the positive
effect that enforced collection of the claim could have on the
collection of other similar claims;
(e) To assess the merits of a compromise offer, the CFO should
obtain a current financial statement from the debtor, executed under
penalty of perjury, that shows the debtor's assets, liabilities, income
and expense; and
(f) The CFO may compromise statutory penalties, forfeitures, or
debts established as an aid to enforcement, and to compel compliance,
when he or she determines that accepting the offer will serve the
Agency's enforcement policy adequately, in terms of deterrence and
securing compliance (both present and future).
Subpart E--Suspension or Termination of Collection Action
Sec. 213.29 [Amended]
0
36. Amend Sec. 213.29 by removing ``penalty charges'' and adding
``penalties,'' in its place.
0
37. Amend Sec. 213.30 by:
0
a. Revising the section heading;
0
b. Adding the words ``or her'' after ``his'' in paragraph (c); and
0
c. Revising paragraphs (d) introductory text and (e).
The revisions read as follows:
Sec. 213.30 Standards for suspension of collection action.
* * * * *
(d) The CFO may suspend collection activities on debts of $100,000
or less during the pendency of a permissive waiver or administrative
review when there is no statutory requirement and he or she determines
that:
* * * * *
(e) The CFO will decline to suspend collection when he or she
determines that the request for waiver or administrative review is
frivolous, or that the debtor made it primarily to delay collection.
Sec. 213.31 [Amended]
0
38. Amend Sec. 213.31 in the first sentence by removing the word
``penalty'' and adding ``penalties,'' in its place.
0
39. Amend Sec. 213.32 by revising the section heading and the
introductory text to read as follows:
Sec. 213.32 Standards for termination of collection action.
The CFO may terminate collection action on a debt when he or she
determines that:
* * * * *
0
40. Revise Sec. 213.34 to read as follows:
Sec. 213.34 Debts discharged in bankruptcy.
The CFO generally terminates collection activity on a debt
discharged in bankruptcy, regardless of the amount. USAID may continue
collection activity, however, subject to the provisions of the
Bankruptcy Code for any payments provided under a plan of
reorganization. The CFO will seek legal advice by the Office of the
USAID General Counsel if
[[Page 31146]]
he or she believes that any claims or offsets might have survived the
discharge of a debtor.
Subpart F--Discharge of Indebtedness and Reporting Requirements
0
41. Revise Sec. 213.35 to read as follows:
Sec. 213.35 Discharging indebtedness-- general.
(a) Before discharging a delinquent debt (also referred to as a
close out of the debt), the CFO must take all appropriate steps to
collect such debt, including (as applicable), the following:
(1) Administrative offset;
(2) Tax-refund offset;
(3) Offset of Federal salary;
(4) Referral to private collection contractors;
(5) Referral to Federal Departments or Agencies that are operating
a debt-collection center;
(6) Reporting delinquencies to credit-reporting bureaus;
(7) Garnishing the wages of a delinquent debtor; and
(8) Litigation or foreclosure.
(b) The CFO will make a determination that collection action is no
longer warranted and request that litigation counsel release any liens
of record that are securing the debt. Discharge of indebtedness is
distinct from the termination or suspension of collection activity, and
the Internal Revenue Code might apply. When the CFO suspends or
terminates collection action on a debt, the debt remains delinquent,
and USAID may pursue further collection action at a later date in
accordance with the standards set forth in this part. When a debt is
discharged in full or in part, further collection action is prohibited,
and USAID must terminate debt-collection action.
0
42. Revise Sec. 213.36 to read as follows:
Sec. 213.36 Reporting to Department of the Treasury's Internal
Revenue Service.
Upon discharge of indebtedness, USAID must report the discharged
debt as income to the debtor to the IRS in accordance with the
requirements of 26 U.S.C. 6050P and 26 CFR 1.6050P-1. USAID may request
Fiscal Service to file such a discharge debt report to the IRS on the
Agency's behalf.
Subpart G--Referrals to the U.S. Department of Justice
0
43. Revise the heading for subpart G to read as set forth above.
0
44. Amend Sec. 213.37 by revising the section heading and paragraph
(a) to read as follows:
Sec. 213.37 Referrals to the U.S. Department of Justice.
(a) The CFO, through USAID's cross-servicing agreement with Fiscal
Service and by direct action, refers to DOJ for litigation all claims
on which the Federal Government has taken aggressive collection actions
but which could not be collected, compromised, suspended, or
terminated. USAID makes such referrals as early as possible, consistent
with aggressive Agency collection action, and within the period for
bringing a timely suit against the debtor. Unless otherwise provided by
DOJ's regulations or procedures, USAID refers for litigation debts of
more than $2,500 but less than $1 million to DOJ's Nationwide Central
Intake Facility, as required by the instructions for the Claims-
Collection Litigation Report (CCLR). USAID shall refer debts of more
than $1 million to the Civil Division at DOJ.
* * * * *
Subpart H--Mandatory Transfer of Delinquent Debt to U.S. Department
of the Treasury
0
45. Revise the heading for subpart H to read as set forth above.
0
46. Revise Sec. 213.38 to read as follows:
Sec. 213.38 Mandatory transfer of debts to Department of the
Treasury's Bureau of the Fiscal Service--general.
(a) USAID's procedures call for the transfer of legally enforceable
debt to Fiscal Service 90 days from the date provided on the Agency's
initial written demand-for-payment notice issued to the debtor. A debt
is legally enforceable if the Agency has made a final determination
that the debt, in the amount stated, is due and there are no legal bars
to collection action. A debt is not considered legally enforceable for
purposes of mandatory transfer to Fiscal Service if a debt is the
subject of a pending administrative review process required by statute
or regulation and collection action during the review process is
prohibited.
(b) Except as set forth in paragraph (a) of this section, USAID
will transfer any debt covered by this part that is more than 120 days
delinquent to Fiscal Service for debt-collection services. A debt is
considered 120 days delinquent for purposes of this section if it is
120 days past due and is legally enforceable.
0
47. Amend Sec. 213.39 by revising the introductory text and adding a
period at the end of paragraph (f).
The revision reads as follows:
Sec. 213.39 Exceptions to mandatory transfer.
USAID is not required to transfer a debt to the Financial
Management Service (FMS) of the U.S. Department of the Treasury
pursuant to Sec. 214.37(b) during such period of time that the debt:
* * * * *
Kent Kuyumjian,
Deputy Chief Financial Officer.
[FR Doc. 2021-11245 Filed 6-10-21; 8:45 am]
BILLING CODE P
