Debt Management

 
CONTENT
Federal Register, Volume 85 Issue 117 (Wednesday, June 17, 2020)
[Federal Register Volume 85, Number 117 (Wednesday, June 17, 2020)]
[Rules and Regulations]
[Pages 36670-36714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09447]
[[Page 36669]]
Vol. 85
Wednesday,
No. 117
June 17, 2020
Part II
Department of Agriculture
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Federal Crop Insurance Corporation
Farm Service Agency
Commodity Credit Corporation
Farm Service Agency
Rural Housing Service
Rural Business-Cooperative Service
Rural Utilities Service
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7 CFR Parts 3, 400, 761, et al.
Debt Management; Final Rule
Federal Register / Vol. 85, No. 117 / Wednesday, June 17, 2020 /
Rules and Regulations
[[Page 36670]]
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DEPARTMENT OF AGRICULTURE
Office of the Secretary
7 CFR Part 3
Federal Crop Insurance Corporation
7 CFR Part 400
Farm Service Agency
7 CFR Parts 761, 765, 766, 772, and 792
Commodity Credit Corporation
7 CFR Part 1403
Farm Service Agency
Rural Housing Service
Rural Business-Cooperative Service
Rural Utilities Service
7 CFR Parts 1951 and 1956
[Docket ID USDA-2019-0007]
RIN 0560-AA16
Debt Management
AGENCY: Office of the Secretary, Commodity Credit Corporation, Farm
Service Agency, Federal Crop Insurance Corporation, Rural Housing
Service, Rural Business-Cooperative Service, and Rural Utilities
Service, USDA.
ACTION: Final rule.
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SUMMARY: The general debt management regulations of the Department of
Agriculture (USDA) provide that individual USDA agencies may issue
regulations for their own specific debt collection activities
principally in recognition that the agencies conducted debt collection
activities prior to the enactment of the Debt Collection Improvement
Act of 1996 (DCIA). Many of the provisions of individual agencies are
redundant to part 3. This rule will eliminate the debt collection
regulations of the following USDA agencies, and part 3 will be revised
to include specific provisions used by these agencies: the Commodity
Credit Corporation (CCC); the Federal Crop Insurance Corporation
(FCIC), and the Farm Service Agency (FSA). In addition, as required by
the Federal Civil Penalties Inflation Adjustment Improvements Act of
2015 (the 2015 Civil Penalties Act), this rule updates the size of
civil monetary penalties to reflect inflationary adjustments for 2020.
DATES: Effective: June 17, 2020.
FOR FURTHER INFORMATION CONTACT: For information, contact Iris
Roseboro; telephone: (202) 720-6257; email: [email protected].
Persons with disabilities who require alternative means for
communication should contact the USDA Target Center at (202) 720-2600
(voice).
SUPPLEMENTARY INFORMATION:
Background
 The regulations in 7 CFR part 3 (part 3) specify the general
regulations applicable to debt collection activities of USDA agencies
and specify the amount of civil penalties that USDA agencies levy as
authorized by law. Federal agencies are required by several laws to
collect debts owed to the United States, principally DCIA. Several USDA
agencies issued debt collection regulations prior to the enactment of
DCIA and the provisions of 7 CFR 3.1(b) allow individual USDA agencies
to issue regulations to supplement part 3.
 The Office of the Chief Financial Officer (OCFO), USDA, is
reviewing the individual agency regulations and procedures in order to
ensure that all agencies' individual debt collection policies align
with government-wide policies, as well as the specific policies of the
Secretary. For purposes of this review, a ``debt'' is a delinquent
amount owed to the United States and does not include the entire
outstanding amount of a loan made by an agency when the borrower is
making scheduled loan payments as required by the loan agreement. If a
USDA agency determines that a borrower is delinquent on a loan payment,
the delinquent amount will be considered to be a ``debt'' for purposes
of part 3 and the agency will be required to give all due process
notices prior to proceeding with debt collection actions, including
administrative offset or salary offset and referral to the Department
of Treasury for centralized offset. The intent of this review is to
consolidate the debt collection and settlement regulations of USDA in
one location to ensure consistency and uniformity in operations of USDA
agencies. This action is not intended to make any substantive changes
in USDA policy or procedure or to impose any additional burden on a
person who is indebted to the United States.
 The amendments made by this final rule incorporate the results of
this review by CCC, FSA, the Foreign Agricultural Service (FAS), FCIC,
the Natural Resources Conservation Service (NRCS), and the Risk
Management Agency (RMA).
 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 Consolidated Farm and Rural
Development Act (ConAct) and debts related to those loans. This rule
removes 7 CFR part 792 and 7 CFR part 1951, subpart C. Since 7 CFR part
1956 is also used by the Rural Development of USDA (RD), those
regulations are not deleted but are amended to state affirmatively that
they do not apply to loans made by FSA and debts relating to such
loans. In those limited instances where provisions of 7 CFR parts 792,
1951, and 1956 will continue to be used because of their specific
application to FSA debts, the provision has been included in part 3;
for the provisions that will continue to only be used for Farm Loan
Programs, the provisions have been included in 7 CFR part 761 as
subpart F.
 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 Department of Justice. In addition, this rule revises
part 3 to make clear that, in those instances where a debt has been
incurred by a foreign obligor and is potentially susceptible to the
bankruptcy or insolvency laws of a foreign jurisdiction, the provisions
of part 3 are not applicable. Principally, these instances of foreign
debt collection arise under CCC programs which authorize CCC to make
payments to entities who have financed exports of US agricultural
[[Page 36671]]
products and the foreign obligor does not make full payment to the
exporter or the exporter's assignee. In these programs, CCC retains the
right to pursue collection from the obligor, and often these matters
fall within the jurisdiction of a foreign court.
 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 USDA agencies to reflect
inflationary adjustments for 2020 as required by the 2015 Civil
Penalties Act. As required by the 2015 Civil Penalties Act, the annual
adjustment was made for inflation based on the Consumer Price Index for
the month of October 2019 and rounded to the nearest dollar after an
initial adjustment. The civil monetary penalties are listed according
to the applicable administering agency.
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 USDA agencies;
eliminates obsolete debt collection regulations; and adjusts USDA civil
monetary penalties as required by the 2015 Civil Penalties Act.
 Because the action to update existing regulations is ministerial
and the adjustment to civil monetary penalties is required by the 2015
Civil Penalties Act, USDA finds that there is good cause under 5 U.S.C.
553(b)(3)(B) that opportunity for prior comment is unnecessary and
contrary to the public interest and USDA is issuing this revised
regulation as a final rule.
 The Office of Management and Budget (OMB) designated this rule as
not major under the Congressional Review Act, as defined by 5 U.S.C.
804(2). Therefore, FSA is not required to delay the effective date for
60 days from the date of publication to allow for Congressional review.
 Accordingly, this rule is effective upon publication in the Federal
Register.
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.
 The Office of Management and Budget (OMB) designated this rule as
not significant under Executive Order 12866, and therefore, OMB has not
reviewed this rule and an analysis of costs and benefits is not
required under either Executives Orders 12866 or 13563.
 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, USDA created a Regulatory Reform Task Force, and USDA
agencies were directed to remove barriers, reduce burdens, and provide
better customer service both as part of the regulatory reform of
existing regulations and as an ongoing approach. USDA reviewed this
regulation and made changes to improve any provision that was
determined to be outdated, unnecessary, or ineffective.
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 USDA is not required by Administrative Procedure Act or any law
to publish a proposed rule for this rulemaking.
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 USDA-wide regulation. Accordingly, this action does not require
an analysis under the National Environmental Policy Act (NEPA).
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, June
24, 1983), the programs and activities within this rule are excluded
from the scope of Executive Order 12372.
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
[[Page 36672]]
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 USDA has assessed the impact of this rule on Indian Tribes and
determined that this rule does not have Tribal implications that
require Tribal consultation under Executive Order 13175. If a Tribe
requests consultation, OCFO will work with USDA's Office of Tribal
Relations to ensure meaningful consultation is provided when changes,
additions, and modifications identified in this rule are not expressly
mandated by legislation.
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 $100 million or more in any 1 year
for State, local, or Tribal governments, in the aggregate, or to the
private sector. The UMRA generally requires agencies to consider
alternatives and adopt the more cost effective or least burdensome
alternative that achieves the objectives of the rule. This rule
contains no Federal mandates, as defined in Title II of the UMRA, for
State, local, and Tribal governments or the private sector. Therefore,
this rule is not subject to the requirements of sections 202 and 205 of
the UMRA.
E-Government Act Compliance
 USDA is committed to complying with the E-Government Act, to
promote the use of the internet and other information technologies to
provide increased opportunities for citizen access to Government
information and services, and for other purposes.
Federal Assistance Programs
 This rule does not provide any new Federal Domestic Assistance
Program nor change any of the USDA programs that are in the Catalog of
Federal Domestic Assistance. This rule prescribes standards and
procedures for use by USDA agencies in the collection, compromise,
suspension, or termination of debts owed to the United States.
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 USDA agency is conducting administrative action
against the individuals or debtors.
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, USDA amends Title 7 of the Code
of Federal Regulations as follows:
0
1. Revise part 3 to read as follows:
PART 3--DEBT MANAGEMENT
Subpart A--General
Sec.
3.1 Purpose and scope.
3.2 Authority.
3.3 Definitions.
3.4 Delegations of authority.
Subpart B--Standards for the Administrative Collection and Compromise
of Claims
3.10 Aggressive agency collection activity.
3.11 Demand for payment.
3.12 Reporting debts to Credit Reporting Agencies.
3.14 Suspension or revocation of eligibility for loans and loan
guarantees, licenses, permits, or privileges.
3.15 Liquidation of collateral.
3.16 Collection in installments.
3.17 Interest, penalties, and administrative costs.
3.18 Use and disclosure of mailing addresses.
3.19 Standards for the compromise of claims and debt settlement.
3.20 Standards for suspending or terminating collection activities.
3.21 Referrals of debts to Justice.
3.22 CCC withholding of payment.
3.23 CCC assignment of payment.
Subpart C--Referral of Debts to Treasury
3.30 General requirements.
3.31 Mandatory referral for cross-servicing.
3.32 Discretionary referral for cross-servicing.
3.33 Required certification.
3.34 Fees.
Subpart D--Administrative Offset
3.40 Scope.
3.41 Procedures for notification of intent to collect by
administrative offset.
3.42 Debtor rights to inspect or copy records, submit repayment
proposals, or request administrative review.
3.43 Non-centralized administrative offset.
3.44 Centralized administrative offset.
3.45 USDA payment authorizing agency offset of pro rata share of
payments due entity in which debtor participates.
3.46 Offset against tax refunds.
3.47 Offset against amounts payable from Civil Service Retirement
and Disability Fund.
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Subpart E--Administrative Wage Garnishment
3.50 Purpose.
3.51 Scope.
3.52 Definitions.
3.53 Procedures.
Subpart F--Administrative Reviews for Administrative Offset,
Administrative Wage Garnishment, and Disclosure to Credit Reporting
Agencies
3.60 Applicability.
3.61 Presiding employee.
3.62 Procedures.
Subpart G--Federal Salary Offset
3.70 Scope.
3.71 Definitions.
3.72 Coordinating offset with another Federal agency.
3.73 Determination of indebtedness.
3.74 Notice requirements before offset.
3.75 Request for a hearing.
3.76 Result if employee fails to meet deadlines.
3.77 Hearing.
3.78 Written decision following a hearing.
3.79 Review of USDA records related to the debt.
3.80 Written agreement to repay debts as alternative to salary
offset.
3.81 Procedures for salary offset: when deductions may begin.
3.82 Procedures for salary offset: types of collection.
3.83 Procedures for salary offset: methods of collection.
3.84 Procedures for salary offset: imposition of interest,
penalties, and administrative costs.
3.85 Non-waiver of rights.
3.86 Refunds.
3.87 Agency regulations.
Subpart H--Cooperation with the Internal Revenue Service
3.90 Reporting discharged debts to the Internal Revenue Service.
Subpart I--Adjusted Civil Monetary Penalties
3.91 Adjusted 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
Sec. 3.1 Purpose and scope.
 (a)(1) The regulations in this part prescribe standards and
procedures for use by USDA agencies in the collection, compromise,
suspension, or termination of debts owed to the United States.
 (2) The regulations in this part apply to all debts of the United
States subject to collection by USDA agencies, except as otherwise
specified in this part or by statute.
 (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) USDA agencies may issue regulations to supplement this part in
order to meet the specific requirements of individual programs.
 (c) The regulations of this part will not apply to:
 (1) Collection of debts owed government travel card contractors by
USDA employees;
 (2) Collection of debts owed by individual Food Stamp Program
recipients for whom debt collection procedures are provided under Sec.
273.18 of this title.
 (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
Consolidated Farm and Rural Development Act (ConAct), which are
independent of the DCIA are excepted from this part.
 (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.
Sec. 3.2 Authority.
 (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 Treasury and Justice (31 CFR parts 901-904) that prescribe
government-wide standards for administrative collection, compromise,
suspension, or termination of agency collection action, disclosure of
debt information to credit reporting agencies, referral of claims to
private collection contractors for resolution, and referral to Justice
for litigation to collect debts owed the government. The regulations
under this part also are issued under Treasury regulations implementing
DCIA (31 CFR part 285) and related statutes and regulations governing
the offset of Federal salaries (5 U.S.C. 5512 and 5514; 5 CFR part 550,
subpart K) and administrative offset of tax refunds (31 U.S.C. 3720A).
 (b) With respect to agency specific provisions of this part, the
following authorities are applicable:
 (1) The Commodity Credit Corporation (CCC): section 4 of the
Commodity Credit Corporation Charter Act (15 U.S.C. 714b).
 (2) The Farm Service Agency (FSA): sections 331, 331A, 331D, and
373 of the Consolidated Farm and Rural Development Act (ConAct) (7
U.S.C. 1981, 1981a, 1981d, and 2008h).
 (3) The Federal Crop Insurance Corporation (FCIC): section 506(j)
of the Federal Crop Insurance Act (7 U.S.C. 1506(j)).
Sec. 3.3 Definitions.
 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 the United
States (including funds payable by the United States on behalf of a
State government) to, or held by the United States for, a person to
satisfy a debt. This definition is consistent with 31 U.S.C.
3701(a)(1).
 Agency means an agency, office, or corporation within USDA subject
to the authority or general supervision of the Secretary.
 Borrower and debtor have the same meaning and refer to a person who
owes a delinquent, nontax debt to the United States.
 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 Commodity Credit Corporation.
[[Page 36674]]
 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 USDA. Centralized offset also includes offset of payments
made by States pursuant to 31 U.S.C. 3716(h) and 31 CFR 285.6.
 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 the United States from any person, organization,
or entity, except another Federal agency.
 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 USDA agency to which a
debtor owes a debt, including a debt collection center when acting on
behalf of a creditor agency in matters pertaining to collection of the
debt.
 Cross-servicing means the centralized collection of Federal debt
and the various collection actions taken by Treasury on behalf of a
Federal agency in accordance with the provisions of 31 U.S.C. 3711, 31
U.S.C. 3720D, 31 CFR part 285, and other Treasury regulations. Cross-
servicing includes, but is not limited to, the use of debt collection
centers and private collection contractors.
 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 the United States from
any person, organization, or entity, except another Federal agency.
 Debt collection center means the Treasury or other government
agency or division, designated by the Secretary of the Treasury with
authority to collect debt on behalf of creditor agencies in accordance
with 31 U.S.C. 3711(g).
 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 the
United States.
 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 USDA agency.
 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 United States Department of the Treasury's
Bureau of the Fiscal Service.
 Foreign debt means debt owed by a sovereign or non-sovereign
entity, when the debt is subject to adjudication in a non-U.S.
jurisdiction.
 FSA FLP means the Farm Loan Programs of FSA.
 Government or Federal government means the government of the United
States, unless otherwise specified.
 Justice means the United States Department of Justice.
 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 USDA National Appeals Division.
 Non-centralized administrative offset means an agreement between a
USDA creditor agency and a payment authorizing agency to offset the
payments made by the payment authorizing agency to satisfy a USDA debt.
The creditor agency and paying agency can be the same.
 Offset means withholding funds payable by the United States to or
held by the United States for a person to satisfy a debt owed by the
payee.
 OGC means the USDA Office of the General Counsel.
 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 USDA agency
that is authorized to disburse payments to a recipient.
 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 Sec. 3.17(d).
 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.
 Private Collection Agency means any organization or corporation
that specializes in debt collection is known as a collection agency or
debt collector.
 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
[[Page 36675]]
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 IRS as specified in Sec. 3.90, and
applicable IRS requirements.
 Tax Identification Number or TIN means the identification number
required on tax returns and other documents submitted to the Internal
Revenue Service; that is, an individual's social security number (SSN)
or employer identification number (EIN).
 TOP means Treasury Offset Program, which is a centralized offset
program that collects delinquent debts owed to Federal agencies and
states.
 Treasury means the United States Department of the Treasury.
 USDA means the United States Department of Agriculture.
 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.
Sec. 3.4 Delegations of authority.
 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
Sec. 3.10 Aggressive agency collection activity.
 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.
Sec. 3.11 Demand for payment.
 (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 USDA an immediate right to collect upon
delinquency). Written demand as described in paragraph (b) of this
section will be made promptly upon a debtor of the United States in
terms that inform the debtor of the consequences of failing to
cooperate with the agency to resolve the debt. The specific content,
timing, and number of demand letters will depend upon the type and
amount of the debt and the debtor's response, if any, to the agency's
letters or telephone calls. Where statutes or agency regulations are
specific as to the requirements for demand letters, an agency will
follow its own procedures in formulating demand letters. Generally, one
demand letter should suffice. In determining the timing of the demand
letter(s), an agency will give due regard to the need to refer debts
promptly to Justice for litigation, in accordance with 31 CFR 904.1.
When necessary to protect the government's interest (for example, to
prevent the running of a statute of limitations), written demand may be
preceded by other appropriate actions under this part, including
immediate referral for litigation.
 (b) In demand letters, the USDA creditor agency will inform the
debtor:
 (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 Sec. 3.17;
 (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 Sec. 3.16);
 (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 USDA payments and refer the debtor's debt
to TOP for offset against other Federal payments, including income tax
refunds, in accordance with subpart D of this part;
 (ii) Refer the debt to a private collection agency.
 (iii) Report the debt to a credit reporting agency in accordance
with Sec. 3.12;
 (iv) Refer the debt to Treasury in accordance with subpart E of
this part for possible collection by garnishing the debtor's wages
through administrative wage garnishment;
 (v) Refer the debt to Justice in accordance with Sec. 3.21 to
initiate litigation to collect the debt;
 (vi) Refer the debt to Treasury for collection in accordance with
subpart C of this part;
 (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 Internal Revenue Service
(see http://www.irs.gov);
 (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 Sec. 3.14);
 (14) If applicable, the intention to suspend or revoke licenses,
permits, or privileges (see Sec. 3.14); and
 (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 USDA creditor agency may omit from a demand letter one or
more of the provisions contained in paragraphs (b)(6) through (17) of
this section if the USDA creditor agency, in consultation with OGC,
determines that any provision is not legally required given the
collection remedies to be applied to a particular debt. In the case of
foreign debt that is subject to insolvency or bankruptcy proceedings
outside the United States, a USDA creditor agency may, in lieu of a
demand letter, submit such documentation necessary to establish its
claim as a creditor.
 (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
[[Page 36676]]
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, October 4, 1993) and may be given as part of a demand letter
under paragraph (b) of this section or in a separate document.
Litigation counsel for the government will be advised that this notice
has been given. In general, only one agency should service a debt at a
time; that is, agencies should not simultaneously refer a debt to both
Treasury and Justice for collection.
 (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.
Sec. 3.12 Reporting of debts to Credit Reporting Agencies.
 (a) In demand letters to debtors sent in accordance with Sec.
3.11, agencies will inform debtors:
 (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.
Sec. 3.14 Suspension or revocation of eligibility for loans and loan
guarantees, licenses, permits, or privileges.
 (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 USDA Chief Financial Officer (CFO) or Deputy CFO. This
prohibition does not apply to disaster loans. Agencies may extend
credit after the delinquency has been resolved. The Secretary of the
Treasury may exempt classes of debts from this prohibition and has
prescribed standards defining when a ``delinquency'' is ``resolved''
for purposes of this prohibition. See 31 CFR 285.13 (Barring Delinquent
Debtors from Obtaining Federal Loans or Loan Insurance or Guarantees).
 (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 USDA or another Federal agency. Failure to pay a single
substantial debt, or a number of outstanding debts (including
disallowed costs and overrun payments, but not including sums owed to
the government under the Internal Revenue Code or as specified in the
appropriations provisions regarding outstanding tax debt in sections
745 and 746 of Division E of the Consolidated Appropriations Act, 2016
(Pub. L. 114-113) and successor provisions of law) owed to any Federal
agency or instrumentality is grounds for non-procurement suspension or
debarment if the debt is uncontested and the debtor's legal
administrative remedies for review of the debt are exhausted. See 2 CFR
180.800(c)(3).
 (e) The failure of any surety to honor its obligations in
accordance with 31 U.S.C. 9305 will be reported to Treasury. Treasury
will forward to all interested agencies notification that a surety's
certificate of authority to do
[[Page 36677]]
business with the government has been revoked.
 (f) The suspension or revocation of licenses, permits, or
privileges also may extend to USDA programs or activities that are
administered by the States on behalf of the government, to the extent
that they affect the government's ability to collect money or funds
owed by debtors. Therefore, States that manage USDA activities,
pursuant to approval from the agencies, will ensure that appropriate
steps are taken to safeguard against issuing licenses, permits, or
privileges to debtors who fail to pay their debts to the government.
 (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.
Sec. 3.15 Liquidation of collateral.
 (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 the United States. Collection
from other sources, including liquidation of security or collateral, is
not a prerequisite to requiring payment by a surety, insurer, or
guarantor unless such action is expressly required by statute or
contract.
 (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.
Sec. 3.16 Collection in installments.
 (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.
 (c) Security for deferred payments will be obtained in appropriate
cases. Agencies may accept installment payments notwithstanding the
refusal of the debtor to execute a written agreement or to give
security, at the agency's option.
Sec. 3.17 Interest, penalties, and administrative costs.
 (a) Except as provided in paragraphs (g) and (h) of this section,
agencies will charge interest, penalties, and administrative costs on
debts owed to the United States as specified in 31 U.S.C. 3717. If not
included in the agency's demand notice, an agency will mail or deliver
a written notice to the debtor, at the debtor's most recent address
available to the agency, explaining the agency's requirements
concerning these charges except where these requirements are included
in a contractual or repayment agreement. These charges will continue to
accrue until the debt is paid in full or otherwise resolved through
compromise, termination, or waiver of the charges.
 (b) Agencies will charge interest on debts owed the United States
except as otherwise required by law and as provided in paragraph (i) of
this section for debts owed to CCC and FSA. In charging such interest,
agencies will apply the following provisions:
 (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 Treasury in accordance
with 31 U.S.C. 3717. Pursuant to 31 U.S.C. 3717, an agency may charge a
higher rate of interest if it reasonably determines that a higher rate
is necessary to protect the rights of the United States. The agency
must document the reason(s) for its determination that the higher rate
is necessary.
 (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 Treasury at the time the new agreement is
executed. Interest will not be compounded, that is, interest will not
be charged on interest, penalties, or administrative costs required by
this section. If, however, a debtor defaults on a previous repayment
agreement, charges that accrued but were not collected under the
defaulted agreement will be added to the principal under the new
repayment agreement.
 (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
[[Page 36678]]
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 the United States.
 (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 USDA-wide appeal regulation Collection by offset will
continue during the appeal process unless prohibited by statute. If the
debtor ultimately wins an appeal and the debt is found to be incorrect,
CCC will credit the debtor's debt for the amount of penalty charges,
administrative costs, and interest that has accrued from the date such
charges were initiated on the portion determined in the appeal to not
be due.
 (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 U.S. Treasury for funds borrowed
by CCC on the day the debt became delinquent.
 (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.
Sec. 3.18 Use and disclosure of mailing addresses.
 (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 Treasury to obtain a
debtor's mailing address from the records of the Internal Revenue
Service (IRS).
 (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.
Sec. 3.19 Standards for the compromise of claims and debt settlement.
 (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.
Sec. 3.20 Standards for suspending or terminating collection
activities.
 (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.
Sec. 3.21 Referrals of debts to Justice.
 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.
Sec. 3.22 CCC withholding of payment.
 (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 the United States will be
protected as provided in this section.
 (b) A payment may be withheld to protect the interests of CCC or
the United States if CCC determines that:
 (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.
Sec. 3.23 CCC assignment of payment.
 (a) No amounts payable to a debtor by CCC will be paid to an
assignee of the
[[Page 36679]]
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 USDA agency, or any other Federal
agency, any IRS notice of levy, or any judgment in favor of the United
States, without regard to the date notice of assignment was accepted by
CCC.
 (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 USDA office prior to the date of the filing Forms CCC-251
(Notice of Assignment) and CCC-252 (Instrument of Assignment).
Subpart C--Referral of Debts to Treasury
Sec. 3.30 General requirements.
 (a) Agencies are required by law to transfer delinquent, nontax,
legally enforceable debts to Treasury for collection through cross-
servicing and through centralized administrative offset with the
exception of foreign debt that is exempt from cross-servicing per the
Debt Collection Improvement Act of 1996. Additionally, USDA will
transfer debts to Treasury for collection through administrative wage
garnishment. Agencies need not make duplicate referrals to Treasury for
all these purposes; a debt may be referred simultaneously for purposes
of collection by cross-servicing, centralized administrative offset,
and administrative wage garnishment where applicable. However, in some
instances a debt exempt from collection via cross-servicing may be
subject to collection by centralized administrative offset so
simultaneous referrals are not always the norm. This subpart specifies
the rules applicable to the transfer of debts to Treasury for
collection by cross-servicing. Rules for transfer to Treasury for
centralized administrative offset are specified in subpart D of this
part, and for administrative wage garnishment in subpart E of this
part.
 (b) When debts are referred or transferred to Treasury, or
Treasury-designated debt collection centers under the authority of 31
U.S.C. 3711(g), Treasury will service, collect, or compromise the
debts, or Treasury will suspend or terminate the collection action, in
accordance with the statutory requirements and authorities applicable
to the collection of such debts.
 (c) In cases where a debtor has more than one FSA FLP loan that has
been referred to cross-servicing and Treasury accepts an agreement to
compromise or adjust one loan, or several loans, but not all of the
debt, cancellation of any loan balances remaining on the compromised or
adjusted debt will not be processed for the debtor until:
 (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.
Sec. 3.31 Mandatory referral for cross-servicing.
 (a) Agencies will transfer to Treasury any legally enforceable
nontax debt in excess of $25, or combination of debts less than $25
that exceeds $25 (in the case of a debtor whose taxpayer identification
number (TIN) is unknown the applicable threshold is $100), that has or
have been delinquent for a period of 180 days in accordance with 31 CFR
285.12 so that Treasury may take appropriate action on behalf of the
creditor agency to collect or compromise, or to suspend or terminate
collection, of the debt, including use of debt collection centers and
private collection contractors to collect the debt or terminate
collection action. Agencies that transfer delinquent debts to Fiscal
Service for the purposes of debt collection and that rely on Fiscal
Service to submit the transferred debts for administrative offset on
the agency's behalf must transfer the debts to Fiscal Service no later
than 120 days after the debts become delinquent in order to satisfy the
120-day notice requirement for purposes of administrative offset in
accordance with 31 CFR 285.12(c)(1). For accounting and reporting
purposes, the debt remains on the books and records of the agency which
transferred the debt.
 (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 Treasury;
 (4) Is at a debt collection center for a period of time acceptable
to Treasury;
 (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 Treasury that exemption for a certain class of debt is
in the interest of the United States. Federal agencies may request that
the Secretary of the Treasury exempt specific classes of debts. Any
such request by an agency must be sent to the Fiscal Assistant
Secretary of the Treasury by the USDA CFO.
 (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 Treasury and is not to be transferred even if the debt is more than
180 days past due. When a final agency determination is made after an
administrative appeal or review process (including administrative
review under subpart F of this part), the creditor agency must transfer
such debt to Treasury, if more than 180 days delinquent, within 30 days
after the date of the final decision.
Sec. 3.32 Discretionary referral for cross-servicing.
 Agencies will consider referring legally enforceable nontax debts
that are less than 180 days delinquent to Treasury or to Treasury-
designated ``debt collection centers'' in accordance with 31 CFR 285.12
to accomplish efficient, cost effective debt collection if no USDA
payments will be available to collect the debt through administrative
offset under Sec. 3.43.
[[Page 36680]]
Sec. 3.33 Required certification.
 Agencies referring delinquent debts to Treasury for collection via
cross-servicing must certify, in writing, that:
 (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 Treasury agree that Treasury will do
so on behalf of the agency.
Sec. 3.34 Fees.
 Federal agencies operating Treasury-designated debt collection
centers are authorized to charge a fee for services rendered regarding
referred or transferred debts. The fee may be paid out of amounts
collected and may be added to the debt as an administrative cost.
Subpart D--Administrative Offset
Sec. 3.40 Scope.
 (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
the United States;
 (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 the United States;
 (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.
Sec. 3.41 Procedures for notification of intent to collect by
administrative 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 USDA administrative offset) to
collect the debt 30 days after the date of the Notice, the name of the
Federal agency or USDA agency from which the creditor agency wishes to
collect in the case of a non-centralized administrative offset, the
intent to refer the debt to Treasury for collection through centralized
administrative offset (including possible offset of tax refunds) 60
days after the date of the Notice if the debt is not satisfied by
offset within USDA or by agreement with another Federal agency, and an
explanation of the debtor's rights under 31 U.S.C. 3716; and
 (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, Sec. 3.11). With respect to loans
paid on an installment basis, notice and opportunity to review under
this part may only be provided once for the life of the loan upon the
occurrence of the first delinquent installment. Subsequently, if an
agency elects this option, credit reporting agencies may be furnished
periodically with updates as to the current or delinquent status of the
loan account and the borrower may receive notice of referral to TOP for
delinquent installments without further opportunity for review. Any
interest accrued or any installments coming due after the offset is
initiated also would not require a new notice and opportunity to
review.
 (c) The Notice of Intent to Collect by Administrative Offset will
be included as part of a demand letter issued under Sec. 3.11 to
advise the debtor of all debt collection possibilities that the agency
may employ.
Sec. 3.42 Debtor rights to inspect or copy records, submit repayment
proposals, or request administrative review.
 (a) A debtor who intends to inspect or copy agency or USDA records
with respect to the debt must notify the creditor agency in writing
within 30 days of the date of the Notice of Intent to Collect by
Administrative Offset. In response, the agency must notify the debtor
of the location, time, and any other conditions, consistent with part
1, subpart A, of this title, for inspecting and copying, and that the
debtor may be liable for reasonable copying expenses. 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.
 (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
[[Page 36681]]
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 Treasury for centralized offset against other Federal payments that
would include tax refunds.
Sec. 3.43 Non-centralized administrative offset.
 (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 Sec. 3.42(b) is not
acceptable if the 30-day period for the debtor to request review of the
Notice has expired, unless the creditor agency makes a determination
under Sec. 3.41(b)(3) that immediate action to effectuate the offset
is necessary.
 (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 Sec. 3.41; and
 (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 the United States, unless
the offset would not be in the interest of the United States with
respect to the program of the payment authorizing agency or would
otherwise be contrary to law. Appropriate use should be made of the
cooperative efforts of other agencies in effecting collection by
administrative offset.
 (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 the United States, as
determined by the facts and circumstances of the particular case,
particularly the applicable statute of limitations.
 (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.
Sec. 3.44 Centralized administrative offset.
 (a)(1) Except as provided in paragraph (a)(2) of this section,
after the notice and review opportunity requirements of Sec. 3.41 are
met, an agency will refer debts which are over 120 days delinquent to
Fiscal Service for collection through centralized administrative TOP 61
days after the date of the Notice of Intent to Collect by
Administrative Offset provided in accordance with Sec. 3.41. If the
debtor requests review under subpart F of this part, referral of the
debt must occur within 30 days of the final decision upholding the
agency decision to offset the debt if the debt is more than 120 days
delinquent.
 (2) For FSA FLP and Rural Development debt:
 (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 Sec.
3.41 are met, and administrative review under subpart F of this part is
not sought or is unsuccessful on the part of the debtor, an agency may
refer a debt that is less than 120 days delinquent.
 (c) Agencies will refer debts to Treasury for collection in
accordance with Treasury procedures specified in 31 CFR 285.5.
 (d) The agencies will ensure that:
 (1) The names and TINs of debtors who owe debts referred to
Treasury under this section will be compared to the names and TINs on
payments to be made by Federal disbursing officials. Federal disbursing
officials include disbursing officials of Treasury, the Department of
Defense, the United States Postal Service, other government
corporations, and disbursing officials of the United States designated
by Treasury. When the name and TIN of a debtor match the name and TIN
of a payee and all other requirements for offset have been met, the
payment authorizing agency must offset a payment to satisfy the debt.
 (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 USDA official
serving as a Federal disbursing official for purposes of centralized
administrative offset under this section, or Fiscal Service on behalf
of the disbursing official, will furnish a warning notice to a payee or
debtor prior to beginning offset of recurring payments. Such warning
notice will include the information specified in paragraph (d)(4) of
this section.
 (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
[[Page 36682]]
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).
Sec. 3.45 USDA payment authorizing agency offset of pro rata share of
payments due entity in which debtor participates.
 (a) A USDA payment authorizing agency, to satisfy either a non-
centralized or centralized administrative offset under Sec. Sec. 3.43
and 3.44, may offset:
 (1) A debtor's pro rata share of USDA payments due any entity in
which the debtor participates, either directly or indirectly, as
determined by the creditor agency or the payment authorizing agency or:
 (2) USDA payments due any entity that the debtor has established,
or reorganized, transferred ownership of, or changed in some other
manner the operation of, for the purpose of avoiding payment on the
claim or debt, as determined by the creditor agency or the payment
authorizing agency.
 (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 Sec. 3.41 of its
intent to offset payments to the entity in satisfaction of the debt of
an individual debtor participating in that entity.
Sec. 3.46 Offset against tax refunds.
 USDA will take action to effect administrative offset against tax
refunds due to debtors under 26 U.S.C. 6402 in accordance with the
provisions of 31 U.S.C. 3720A through referral for centralized
administrative offset under Sec. 3.44.
Sec. 3.47 Offset against amounts payable from Civil Service
Retirement and Disability Fund.
 Upon providing the Office of Personnel Management (OPM) written
certification that a debtor has been afforded the procedures provided
in Sec. 3.41, creditor agencies may request OPM to offset a debtor's
anticipated or future benefit payments under the Civil Service
Retirement and Disability Fund (Fund) in accordance with regulations
codified at 5 CFR 831.1801 through 831.1808. Upon receipt of such a
request, OPM will identify and ``flag'' a debtor's account in
anticipation of the time when the debtor requests, or becomes eligible
to receive, payments from the Fund.
Subpart E--Administrative Wage Garnishment
Sec. 3.50 Purpose.
 This subpart provides USDA procedures for use of administrative
wage garnishment to garnish a debtor's disposable pay to satisfy
delinquent nontax debt owed to USDA creditor agencies.
Sec. 3.51 Scope.
 (a) This subpart applies to any agency that administers a program
that gives rise to a delinquent nontax debt owed to the United States
and to any agency that pursues recovery of such debt.
 (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 the United States from the wages of Federal
employees from their Federal employment. Federal pay is subject to the
salary offset procedures of subpart G of this part.
 (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.
Sec. 3.52 Definitions.
 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.''
Sec. 3.53 Procedures.
 (a) USDA has determined to pursue administrative wage garnishment
of USDA debtors by referral of nontax legally enforceable debts to
Treasury for issuance of garnishment orders by Treasury or its
contractors.
 (b) As specified in Sec. 3.11, agencies must notify debtors of
their intent to pursue garnishment of their disposable pay through
referral of the debt to Treasury for issuance of an administrative wage
garnishment order and provide debtors with the opportunity for review
of the existence of the debt under subpart F of this part within 60
days of the date of the demand letter.
 (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, USDA will transfer the debt for
collection through administrative wage garnishment as well as other
means through cross-servicing or centralized administrative offset.
 (d) If Treasury elects to pursue collection through administrative
wage garnishment, Treasury, or its contractor, will notify the debtor
of its intent to initiate garnishment proceedings and provide the
debtor with the opportunity to inspect and copy agency records related
to the debt, enter into a repayment agreement, or request a hearing as
to the existence or amount of the debt or the terms of the proposed
repayment schedule under the proposed garnishment order, in accordance
with 31 CFR 285.11.
 (e) If the debtor requests a hearing at any time, Treasury will
forward the request to the USDA creditor agency to which the debt is
owed, and the creditor agency will contact the Office of the CFO (OCFO)
for selection of a hearing official. The issuance of proposed
garnishment orders by Treasury will not be subject to appeal to NAD
under part 11 of this title. Hearings will be conducted in accordance
with 31 CFR 285.11(f).
[[Page 36683]]
 (f) OCFO will provide a copy of the hearing official's final
decision to Treasury for implementation with respect to the subject
garnishment order.
Subpart F--Administrative Reviews for Administrative Offset,
Administrative Wage Garnishment, and Disclosure to Credit Reporting
Agencies
Sec. 3.60 Applicability.
 (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
Treasury for collection or collection by the agency through non-
centralized administrative offset.
 (b) For debt collection proceedings initiated by FSA, CCC, FCIC,
the Rural Housing Service, the Rural Business-Cooperative Service, the
Risk Management Agency, the Natural Resources Conservation Service,
Rural Development, and the Rural Utilities Service (but not for
programs authorized by the Rural Electrification Act of 1936 or the
Rural Telephone Bank Act, 7 U.S.C. 901-950cc-2), part 11 of this title
will be applicable and not the provisions of this subpart.
Sec. 3.61 Presiding employee.
 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.
Sec. 3.62 Procedures.
 (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
Treasury for offset against other Federal payments including tax
refunds and 30 days in the case of all other notices.
 (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.
[[Page 36684]]
 (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.
Sec. 3.70 Scope.
 (a) The provisions of this subpart specify USDA procedures for the
collection of a Federal employee's pay by salary offset to satisfy
certain valid and past due debts owed the government.
 (b) This subpart applies to:
 (1) Current USDA employees and employees of other agencies who owe
debts to USDA; and
 (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 the United States; or to any case where collection of a debt by
salary offset is explicitly provided for or prohibited by another law
(for example travel advances in 5 U.S.C. 5705 or employee training
expense in 5 U.S.C. 4108).
 (e) This subpart identifies the types of salary offset available to
USDA, as well as certain rights provided to the employee, which include
a written notice before deductions begin and the opportunity to
petition for a hearing and to receive a written decision if a hearing
is granted. The rights provided by this section do not extend 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 $50 or less, if,
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 a point of contact for contesting such adjustment.
 (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
USDA regulations contained elsewhere.
Sec. 3.71 Definitions.
 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.
Sec. 3.72 Coordinating offset with another Federal agency.
 (a) When USDA is owed a debt by an employee of another agency, the
other agency will not initiate the requested offset until USDA provides
the agency with a written certification that the debtor owes USDA a
debt (including the amount and basis of the debt and the due date of
the payment) and that USDA has complied with these regulations.
 (b) USDA may use salary offset against one of its employees who is
indebted to another agency, if requested to do so by that agency. Such
a request must be accompanied by;
 (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 Treasury under Sec. 3.44 for
collection through salary offset in accordance with 31 CFR 285.7.
Sec. 3.73 Determination of indebtedness.
 (a) In determining that an employee is indebted to USDA and that 31
CFR parts 900 through 904 have been satisfied and that salary offset is
appropriate, USDA will review the debt to make sure that it is valid
and past due.
 (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 USDA is assured
that the requirements have been met.
Sec. 3.74 Notice requirements before offset.
 Except as provided in paragraph (b) of this section, salary offset
will not be made unless USDA first provides the employee with a minimum
of 30 days written notice. This Notice of Intent to Offset Salary will
state:
 (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) USDA's intention to collect the debt by means of deduction from
the
[[Page 36685]]
employee's current disposable pay until the debt and all accumulated
interest are paid in full;
 (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 USDA requirements concerning interest,
penalties and administrative costs; unless such payments are waived in
accordance with 31 U.S.C. 3717 and Sec. 3.17;
 (e) The employee's right to inspect and copy USDA records relating
to the debt;
 (f) The employee's right to enter into a written agreement with
USDA for a repayment schedule differing from that proposed by USDA, so
long as the terms of the repayment schedule proposed by the employee
are agreeable to USDA;
 (g) The employee's right to a hearing conducted by a hearing
official on USDA's determination of the debt, the amount of the debt,
or percentage of disposable pay to be deducted each pay period, so long
as a petition is filed by the employee as prescribed by USDA;
 (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 the United States will be promptly refunded
to the employee, unless there are applicable contractual or statutory
provisions to the contrary;
 (m) The method and time period for requesting a hearing; and
 (n) The name and address of an official of USDA to whom
communications must be directed.
Sec. 3.75 Request for a hearing.
 (a) Except as provided in paragraph (c) of this section, an
employee must file a petition to request a hearing that is received by
USDA not later than 30 days from the date of the USDA notice described
in Sec. 3.74, if an employee wants a hearing concerning:
 (1) The existence or amount of the debt; or
 (2) USDA's proposed salary offset schedule (including percentage).
 (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).
Sec. 3.76 Result if employee fails to meet deadlines.
 An employee will not be granted a hearing and will have his or her
disposable pay offset as specified in USDA's offset schedule if the
employee:
 (a) Fails to file a petition for a hearing as prescribed in Sec.
3.75; or
 (b) Is scheduled to appear and fails to appear at the hearing.
Sec. 3.77 Hearing.
 (a) If an employee timely files a petition for a hearing under
Sec. 3.75, USDA will select the time, date, and location for the
hearing.
 (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) USDA will have the burden of going forward to prove the
existence of the debt.
 (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.
Sec. 3.78 Written decision following a hearing.
 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
Treasury under Sec. 3.33 in the same manner as any other delinquent
debt.
Sec. 3.79 Review of USDA records related to the debt.
 (a) Notification by employee. An employee who intends to inspect or
copy USDA records related to the debt must send a letter to USDA
stating his or her intention. The letter must be received by USDA
within 30 days of the date of the Notice of Intent to Offset Salary.
 (b) USDA response. In response to the timely notice submitted by
the debtor as described in paragraph (a) of this section, USDA will
notify the employee of the location and time when the employee may
inspect and copy USDA records related to the debt.
[[Page 36686]]
Sec. 3.80 Written agreement to repay debts as alternative to salary
offset.
 (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 USDA within 30 days of the date of the Notice of Intent to Offset
Salary or 15 days after the date of a hearing decision issued under
Sec. 3.78.
 (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) USDA will notify the employee whether the employee's proposed
written agreement for repayment is acceptable. USDA may accept a
repayment agreement instead of proceeding by offset. In making this
determination, USDA will balance the USDA interest in collecting the
debt against hardship to the employee. If the debt is delinquent and
the employee has not disputed its existence or amount, USDA will accept
a repayment agreement, instead of offset, for good cause such as, if
the employee is able to establish that offset would result in undue
financial hardship or would be against equity and good conscience. For
FSA FLP debt, a decision by USDA under this paragraph is not subject to
review by NAD under part 11 of this title.
Sec. 3.81 Procedures for salary offset: when deductions may begin.
 (a) Deductions to liquidate an employee's debt will be by the
method and in the amount stated in USDA's Notice of Intent to Offset
Salary to collect from the employee's current pay.
 (b) If the employee filed a petition for a hearing with USDA before
the expiration of the period provided for in Sec. 3.75, then
deductions will begin after the hearing officer has provided the
employee with a hearing, and a final written decision has been rendered
in favor of USDA.
 (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).
Sec. 3.82 Procedures for salary offset: types of collection.
 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 Sec.
3.83.
Sec. 3.83 Procedures for salary offset: methods of collection.
 (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 USDA agree to alternative arrangements for
repayment under Sec. 3.80.
 (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 $25 per pay period or $50 a month will be
accepted only in the most unusual circumstances.
 (c) Sources of deductions. USDA will make deductions only from
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.
Sec. 3.84 Procedures for salary offset: imposition of interest,
penalties, and administrative costs.
 Interest, penalties and administrative costs will be charged in
accordance with Sec. 3.17.
Sec. 3.85 Non-waiver of rights.
 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.
Sec. 3.86 Refunds.
 USDA will refund promptly to the appropriate individual amounts
offset under these regulations when:
 (a) A debt is waived or otherwise found not owed to the United
States (unless expressly prohibited by law or regulation); or
 (b) USDA is directed by an administrative or judicial order to
refund amounts deducted from the employee's current pay.
Sec. 3.87 Agency regulations.
 USDA agencies may issue regulations or policies not inconsistent
with OPM regulations (5 CFR part 550, subpart K) and regulations in
this subpart governing the collection of a debt by salary offset.
Subpart H--Cooperation With the Internal Revenue Service
 Authority: 26 U.S.C. 61; 31 U.S.C. 3720A.
Sec. 3.90 Reporting discharged debts to the Internal Revenue Service.
 When USDA discharges a debt, whether for the full value or less, it
will report the discharge to the Internal Revenue Service (IRS) in
accordance with current IRS instructions.
Subpart I--Adjusted Civil Monetary Penalties
 Authority: 28 U.S.C. 2461 note.
Sec. 3.91 Adjusted civil monetary penalties.
 (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 June 17, 2020.
 (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.
[[Page 36687]]
 (b) Penalties--(1) Agricultural Marketing Service. (i) Civil
penalty for improper record keeping codified at 7 U.S.C. 136i-1(d),
has: A maximum of $964 in the case of the first offense, and a minimum
of $1,872 in the case of subsequent offenses, except that the penalty
will be less than $1,872 if the Secretary determines that the person
made a good faith effort to comply.
 (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 $5,246.
 (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 $1,675 for each such offense and not more
than $418 for each day it continues, or a maximum of $418 for each
offense if the Secretary determines the violation was not willful.
 (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 $3,348 for each violative transaction or each
day the violation continues.
 (v) Civil penalty for a violation of the Export Apple Act, codified
at 7 U.S.C. 586, has a minimum of $151 and a maximum of $15,300.
 (vi) Civil penalty for a violation of the Export Grape and Plum
Act, codified at 7 U.S.C. 596, has a minimum of $293 and a maximum of
$29,276.
 (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 $2,928. Each day the
violation continues is a separate violation.
 (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
$293.
 (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 $100
and a maximum of $1,996.
 (x) Civil penalty for failure to collect any assessment or fee for
a violation of the Cotton Research and Promotion Act, codified at 7
U.S.C. 2112(b), has a maximum of $2,928.
 (xi) Civil penalty for failure to pay, collect, or remit any
assessment or fee for a violation of a program under the Potato
Research and Promotion Act, codified at 7 U.S.C. 2621(b)(1), has a
minimum of $1,312 and a maximum of $12,104.
 (xii) Civil penalty for failure to obey a cease and desist order
under the Potato Research and Promotion Act, codified at 7 U.S.C.
2621(b)(3), has a maximum of $1,312. Each day the violation continues
is a separate violation.
 (xiii) Civil penalty for failure to pay, collect, or remit any
assessment or fee or for a violation of a program under the Egg
Research and Consumer Information Act, codified at 7 U.S.C. 2714(b)(1),
has a minimum of $1,517 and a maximum of $15,174.
 (xiv) Civil penalty for failure to obey a cease and desist order
under the Egg Research and Consumer Information Act, codified at 7
U.S.C. 2714(b)(3), has a maximum of $1,517. Each day the violation
continues is a separate violation.
 (xv) Civil penalty for failure to remit any assessment or fee or
for a violation of a program under the Beef Research and Information
Act, codified at 7 U.S.C. 2908(a)(2), has a maximum of $11,837.
 (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 $2,928.
 (xvii) Civil penalty for failure to pay, collect, or remit any
assessment or fee or for a violation of a program under the Floral
Research and Consumer Information Act, codified at 7 U.S.C. 4314(b)(1),
has a minimum of $1,378 and a maximum of $13,777.
 (xviii) Civil penalty for failure to obey a cease and desist order
under the Floral Research and Consumer Information Act, codified at 7
U.S.C. 4314(b)(3), has a maximum of $1,378. Each day the violation
continues is a separate violation.
 (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
$2,547.
 (xx) Civil penalty for pay, collect, or remit any assessment or fee
or for a violation of the Honey Research, Promotion, and Consumer
Information Act, codified at 7 U.S.C. 4610(b)(1), has a minimum of $765
and a maximum of $7,846.
 (xxi) Civil penalty for failure to obey a cease and desist order
under the Honey Research, Promotion, and Consumer Information Act,
codified at 7 U.S.C. 4610(b)(3), has a maximum of $785. Each day the
violation continues is a separate violation.
 (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 $2,368.
 (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 $1,184. Each
day the violation continues is a separate violation.
 (xxiv) Civil penalty for failure to pay, collect, or remit any
assessment or fee or for a violation of a program under the Watermelon
Research and Promotion Act, codified at 7 U.S.C. 4910(b)(1), has a
minimum of $1,184 and a maximum of $11,837.
 (xxv) Civil penalty for failure to obey a cease and desist order
under the Watermelon Research and Promotion Act, codified at 7 U.S.C.
4910(b)(3), has a maximum of $1,184. Each day the violation continues
is a separate violation.
 (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 $1,928 and a maximum of $19,268.
 (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 $1,926.
 (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 $937 and a maximum of $9,365.
 (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 $937. Each day the
violation continues is a separate violation.
 (xxx) Civil penalty for failure to pay, collect, or remit any
assessment or fee or for a violation of the Lime Research, Promotion,
and Consumer Information Act of 1990, codified at 7 U.S.C. 6207(c)(1),
has a minimum of $937 and a maximum of $9,365.
 (xxxi) Civil penalty for failure to obey a cease and desist order
under the Lime Research, Promotion, and Consumer Information Act of
1990, codified at 7 U.S.C. 6207(e), has a maximum of $937. Each day the
violation continues is a separate violation.
[[Page 36688]]
 (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 $1,928.
 (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 $9,593. Each day the
violation continues is a separate violation.
 (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 $937 and a maximum of $9,365, or in the case of a violation
that is willful, codified at 7 U.S.C. 6411(c)(1)(B), has a minimum of
$18,405 and a maximum of $187,296.
 (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 $9,639. Each day the violation continues is a
separate violation.
 (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 $18,730.
 (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 $883 and a
maximum of $8,831.
 (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 $8,831. Each day the violation continues is a separate violation.
 (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 $1,722.
 (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 $860. Each day the
violation continues is a separate violation.
 (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 $1,625 and a
maximum of $16,257 for each violation.
 (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 $1,625 and a maximum of
$16,257. Each day the violation continues is a separate violation.
 (xliii) Civil penalty for a violation of an order or regulation
issued under the Canola and Rapeseed Research, Promotion, and Consumer
Information Act, codified at 7 U.S.C. 7448(c)(1)(A)(i), has a maximum
of $1,625 for each violation.
 (xliv) Civil penalty for failure to obey a cease and desist order
under the Canola and Rapeseed Research, Promotion, and Consumer
Information Act, codified at 7 U.S.C. 7448(e), has a maximum of $8,128.
Each day the violation continues is a separate violation.
 (xlv) Civil penalty for violation of an order or regulation issued
under the National Kiwifruit Research, Promotion, and Consumer
Information Act, codified at 7 U.S.C. 7468(c)(1), has a minimum of $813
and a maximum of $8,128 for each violation.
 (xlvi) Civil penalty for failure to obey a cease and desist order
under the National Kiwifruit Research, Promotion, and Consumer
Information Act, codified at 7 U.S.C. 7468(e), has a maximum of $813.
Each day the violation continues is a separate violation.
 (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 $1,625 for each
violation.
 (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 $9,365 for each violation.
 (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 $1,478
and a maximum of $14,790 for each violation.
 (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 $14,790 for
each offense. Each day the violation continues is a separate violation.
 (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 $15,300 for each violation.
 (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 $15,300 for each violation. Each
day the violation continues is a separate violation.
 (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 $14,790 for
each offense.
 (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 $1,188 for each violation.
 (lv) Civil penalty for violations of the Dairy Research Program,
codified at 7 U.S.C. 4535 and 4510(b), has a maximum of $2,547 for each
violation.
 (lvi) Civil penalty for a packer or swine contractor violation,
codified at 7 U.S.C. 193(b), has a maximum of $29,270.
 (lvii) Civil penalty for a livestock market agency or dealer
failure to register, codified at 7 U.S.C. 203, has a maximum of $1,995
and not more than $100 for each day the violation continues.
 (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 $1,996 and not more than $100 for each day the violation continues.
 (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
$29,270.
 (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 $1,996.
 (lxi) Civil penalty for live poultry dealer violations, codified at
7 U.S.C. 228b-2(b), has a maximum of $85,150.
[[Page 36689]]
 (lxii) Civil penalty for a violation, codified at 7 U.S.C. 86(c),
has a maximum of $286,049.
 (lxiii) Civil penalty for failure to comply with certain provisions
of the U.S. Warehouse Act, codified at 7 U.S.C. 254, has a maximum of
$36,975 per violation if an agricultural product is not involved in the
violation.
 (2) Animal and Plant Health Inspection Service. (i) Civil penalty
for a violation of the imported seed provisions of the Federal Seed
Act, codified at 7 U.S.C. 1596(b), has a minimum of $100 and a maximum
of $1,996.
 (ii) Civil penalty for a violation of the Animal Welfare Act,
codified at 7 U.S.C. 2149(b), has a maximum of $11,883, and knowing
failure to obey a cease and desist order has a civil penalty of $1,782.
 (iii) Civil penalty for any person that causes harm to, or
interferes with, an animal used for the purposes of official inspection
by USDA, codified at 7 U.S.C. 2279e(a), has a maximum of $14,790.
 (iv) Civil penalty for a violation of the Swine Health Protection
Act, codified at 7 U.S.C. 3805(a), has a maximum of $29,726.
 (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: $73,950 in the case of any
individual (except that the civil penalty may not exceed $1,479 in the
case of an initial violation of the PPA by an individual moving
regulated articles not for monetary gain), $369,749 in the case of any
other person for each violation, $594,129 for all violations
adjudicated in a single proceeding if the violations do not include a
willful violation, and $1,188,259 for all violations adjudicated in a
single proceeding if the violations include a willful violation; or
twice the gross gain or gross loss for any violation, forgery,
counterfeiting, unauthorized us, defacing, or destruction of a
certificate, permit, or other document provided for in the PPA that
results in the person deriving pecuniary gain or causing pecuniary loss
to another.
 (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: $70,972 in the case of any individual, except that
the civil penalty may not exceed $1,420 in the case of an initial
violation of the AHPA by an individual moving regulated articles not
for monetary gain, $354,860 in the case of any other person for each
violation, $594,129 for all violations adjudicated in a single
proceeding if the violations do not include a willful violation, and
$1,188,259 for all violations adjudicated in a single proceeding if the
violations include a willful violation; or twice the gross gain or
gross loss for any violation, forgery, counterfeiting, unauthorized
use, defacing, or destruction of a certificate, permit, or other
document provided under the AHPA that results in the person's deriving
pecuniary gain or causing pecuniary loss to another person.
 (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 $354,860 in the case of an individual and $709,721 in the
case of any other person.
 (viii) Civil penalty for violation of the Horse Protection Act,
codified at 15 U.S.C. 1825(b)(1), has a maximum of $5,856.
 (ix) Civil penalty for failure to obey Horse Protection Act
disqualification, codified at 15 U.S.C. 1825(c), has a maximum of
$11,444.
 (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 $53,525 for
each violation.
 (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 $25,632 for each
violation.
 (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 $1,351 for each violation.
 (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
$168 and a maximum of $860.
 (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 $812. Each horse transported in violation of 9 CFR
part 88 is a separate violation.
 (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 $26,615 for each violation, as specified in 16 U.S.C. 3373(a)(1)
(but if the plant has a market value of less than $356, and involves
only the transportation, acquisition, or receipt of a plant taken or
possessed in violation of any law, treaty, or regulation of the United
States, any Indian tribal law, any foreign law, or any law or
regulation of any State, the penalty will not exceed the maximum
provided for violation of said law, treaty, or regulation, or $26,615,
whichever is less).
 (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 $665.
 (3) Food and Nutrition Service. (i) Civil penalty for violating a
provision of the Food and Nutrition Act of 2008 (Act), or a regulation
under the Act, by a retail food store or wholesale food concern,
codified at 7 U.S.C. 2021(a) and (c), has a maximum of $118,826 for
each violation.
 (ii) Civil penalty for trafficking in food coupons, codified at 7
U.S.C. 2021(b)(3)(B), has a maximum of $42,819 for each violation,
except that the maximum penalty for violations occurring during a
single investigation is $77,106.
 (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 $38,553 for each violation, except that
the maximum penalty for violations occurring during a single
investigation is $77,106.
[[Page 36690]]
 (iv) Civil penalty for any entity that submits a bid to supply
infant formula to carry out the Special Supplemental Nutrition Program
for Women, Infants and Children and discloses the amount of the bid,
rebate, or discount practices in advance of the bid opening or for any
entity that makes a statement prior to the opening of bids for the
purpose of influencing a bid, codified at 42 U.S.C. 1786(h)(8)(H)(i),
has a maximum of $181,484,308.
 (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 $15,692 for each violation, except that
the maximum penalty for violations occurring during a single
investigation is $62,767.
 (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 $15,306 for each violation, except that
the maximum penalty for violations occurring during a single
investigation is $62,767.
 (4) Food Safety and Inspection Service. (i) 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 $9,365 for each violation.
 (ii) [Reserved]
 (5) Forest Service. (i) Civil penalty for willful disregard of the
prohibition against the export of unprocessed timber originating from
Federal lands, codified at 16 U.S.C. 620d(c)(1)(A), has a maximum of
$963,837 per violation or three times the gross value of the
unprocessed timber, whichever is greater.
 (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 $144,576 per violation.
 (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 $96,384 per violation.
 (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 $963,837.
 (v) Civil penalty for a violation involving protections of caves,
codified at 16 U.S. C. 4307(a)(2), has a maximum of $21,065.
 (6) [Reserved]
 (7) Federal Crop Insurance Corporation. (i) Civil penalty for any
person who willfully and intentionally provides any false or inaccurate
information to the Federal Crop Insurance Corporation or to an approved
insurance provider with respect to any insurance plan or policy that is
offered under the authority of the Federal Crop Insurance Act, or who
fails to comply with a requirement of the Federal Crop Insurance
Corporation, codified in 7 U.S.C. 1515(h)(3)(A), has a maximum of the
greater of: The amount of the pecuniary gain obtained as a result of
the false or inaccurate information or the noncompliance; or $12,502.
 (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 $204,891 in the case of an
individual, and a maximum of $2,048,915 in the case of an applicant
other than an individual.
 (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 $36,975.
 (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 USDA, guaranteed lender, or project that is secured for a loan
under Title V, suffered or would have suffered as a result of the
violation; or $73,950 per violation.
 (9) [Reserved]
 (10) Commodity Credit Corporation. (i) Civil penalty for willful
failure or refusal to furnish information, or willful furnishing of
false information under of section 156 of the Federal Agricultural
Improvement and Reform Act of 1996, codified at 7 U.S.C. 7272(g)(5),
has a maximum of $16,257 for each violation.
 (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 $16,257 for each violation.
 (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
$16,257 for each violation.
 (iv) Civil penalty for knowingly violating any regulation of the
Secretary of the Commodity Credit Corporation pertaining to flexible
marketing allotments for sugar under section 359h(b) of the
Agricultural Adjustment Act of 1938, codified at 7 U.S.C. 1359hh(b),
has a maximum of $11,883 for each violation.
 (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 $14,638 for each offense.
 (11) Office of the Secretary. (i) Civil penalty for making,
presenting, submitting or causing to be made, presented or submitted, a
false, fictitious, or fraudulent claim as defined under the Program
Fraud Civil Remedies Act of 1986, codified at 31 U.S.C. 3802(a)(1), has
a maximum of $11,666.
 (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 $11,666.
PART 400--GENERAL ADMINISTRATIVE REGULATIONS
0
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]
0
3. Remove and reserve subpart K, consisting of Sec. Sec. 400.115
through 400.142.
[[Page 36691]]
PART 761--FARM LOAN PROGRAMS; GENERAL PROGRAM ADMINISTRATION
0
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
0
5. Amend Sec. 761.1 by adding paragraphs (e), (f), and (g) to read as
follows:
Sec. 761.1 Introduction.
* * * * *
 (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 Treasury for
centralized offset (TOP), Federal salary offset, Administrative Wage
Garnishment, and collection through Treasury's private collection
agencies (cross-servicing). Supplemental provisions for FLP purposes
are described in part 761, subpart F of this title.
 (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.
0
6. Amend Sec. 761.2 as follows:
0
a. In paragraph (a), add in alphabetical order abbreviations for
``ARA'', ``FCCS'', and ``OIG''; and
0
b. In paragraph (b):
0
i. Revise the definition for ``Adjustment'';
0
ii. Add in alphabetical order a definition for ``Alternative repayment
agreement'';
0
iii. Revise the definitions of ``Cancellation'' and ``Debt
forgiveness''; and
0
iv. Add in alphabetical order a definition for ``Hearing official''.
 The additions and revisions read as follows:
Sec. 761.2 Abbreviations and definitions.
* * * * *
 (a) * * *
 ARA Alternative Repayment Agreement.
* * * * *
 FCCS Federal Claims Collection Standards.
* * * * *
 OIG Office of the Inspector General, USDA.
* * * * *
 (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 IRS
pursuant to Sec. 3.90 of this title and applicable IRS requirements.
* * * * *
 Alternative repayment agreement is a written repayment agreement
accepted by both the borrower and the Agency as specified in Sec. Sec.
3.42(b) and 3.80 of this title. The agreement may allow for payments to
be made from the borrower to the Agency as an alternative to collecting
the payment amounts through administrative offset, or Federal salary
offset.
* * * * *
 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 IRS
pursuant to Sec. 3.90 of this title and applicable IRS requirements.
* * * * *
 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 USDA or another
individual not under the supervision or control of the USDA. For the
purposes of administrative wage garnishment, the hearing official is
selected pursuant to part 3, subpart E of this title.
* * * * *
0
7. Add Subpart F to read as follows:
Subpart F--Farm Loan Programs Debt Settlement
Sec.
761.401 Purpose.
761.402 Abbreviations and definitions.
761.403 General.
761.404 Eligibility.
761.405 Application.
761.406 Types of debt settlement.
761.407 Failure to pay.
761.408 Administrator authority.
Sec. 761.401 Purpose.
 (a) This subpart describes the Agency's policies for debt
settlement as authorized by the Consolidated Farm and Rural Development
Act (CONACT) (7 U.S.C. 1921, 7 U.S.C. 1981, 1981a, 1981d, and 2008h).
 (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.
Sec. 761.402 Abbreviations and definitions.
 (a) Abbreviations and definitions for terms used in this subpart
are provided in 7 CFR part 3 and Sec. 761.2.
 (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.
[[Page 36692]]
 (2) [Reserved]
Sec. 761.403 General.
 (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 (Grazing Association) loans;
 (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 Treasury cross-servicing
program.
 (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 Treasury's cross-
servicing program with amounts still owing when no further collection
can be taken.
 (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 the United States Attorney or Justice,
unless Justice closes its file and releases the judgement back to FSA
for continued servicing; or
 (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 Treasury's cross-servicing
program and returned to the Agency as uncollectible will not be
processed for the borrower until all FLP debts referred to the cross-
servicing program for that borrower have been returned, with or without
payment agreements.
Sec. 761.404 Eligibility.
 (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 Sec. 761.405.
 (b) All parties liable for the debt must submit a complete
application with the following exceptions:
 (1) The applicable information required in Sec. 761.405 can be
provided by the administrator or executor of the Estate, heir, or other
authorized person who can sign the debt settlement application; or
compiled by FSA staff when a signature cannot be obtained.
 (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.
Sec. 761.405 Application.
 (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 Sec. 761.404(b), each
liable party, must submit the following:
 (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 $1,000;
 (7) Copies of complete Federal income tax returns for the previous
3 years; and
[[Page 36693]]
 (8) Any other items requested by the Agency to evaluate the
debtor's financial condition.
 (b) [Reserved]
Sec. 761.406 Types of debt settlement.
 (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.
Sec. 761.407 Failure to pay.
 (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.
Sec. 761.408 Administrator authority.
 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
0
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
Sec. 765.155 [Amended]
0
9. Amend Sec. 765.155 in paragraph (d) by removing the words ``attempt
to settle the debt in accordance with subpart B of 7 CFR part 1956''
and adding the words ``service the debt in accordance with part 761,
subpart F of this chapter'' in their place.
Subpart I--Transfer of Security and Assumption of Debt
0
10. Amend Sec. 765.406 by revising paragraph (b)(3) to read as
follows:
Sec. 765.406 Release of transferor from liability.
* * * * *
 (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
0
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
Sec. 766.101 [Amended]
0
12. Amend Sec. 766.101 as follows:
0
a. In paragraph (b)(1), remove the words ``(Appendix A to this
subpart)'';
0
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;
0
c. In paragraph (b)(3), remove the words ``(Appendix C to this
subpart)''; and
0
d. In paragraph (d)(2), remove the phrase ``FSA-2510'' and add the
phrase ``FSA-2510 or FSA-2510-IA'' in its place.
Sec. 766.102 [Amended]
0
13. Amend Sec. 766.102 in paragraph (c) by removing the words
``subpart B of 7 CFR part 1956'' and adding the words ``part 761,
subpart F of this chapter'' in their place.
Sec. 766.103 [Amended]
0
14. Revise Sec. 766.103 in paragraph (b) introductory text by removing
the phrase ``FSA-2510'' and adding the phrase ``FSA-2510 or FSA-2510-
IA'' in its place.
0
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 Farm
Service Agency will send to borrowers who are at least 90 days past due
on their loan payments. It provides information about the loan
servicing that is available to the borrower. As stated below on the
notification, the borrower is to respond within 60 days from receiving
the notification (see Sec. 766.101(b)(2) and (d)(2) for the
requirements). The notification is provided here as required by 7
U.S.C. 1981d.
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[[Page 36694]]
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[[Page 36695]]
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[[Page 36696]]
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[[Page 36697]]
[GRAPHIC] [TIFF OMITTED] TR17JN20.004
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[[Page 36699]]
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[[Page 36700]]
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[[Page 36701]]
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0
 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
Farm Service Agency will send to borrowers with loans in Iowa who
are at least 90 days past due on their loan payments. It provides
information about the loan servicing that is available to the
borrower. As stated below on the notification, the borrower is to
respond within 60 days from receiving the notification (see Sec.
766.101(b)(2) and (d)(2) for the requirements). The notification is
provided here as required by 7 U.S.C. 1981d.
[[Page 36704]]
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[[Page 36705]]
[GRAPHIC] [TIFF OMITTED] TR17JN20.012
[[Page 36706]]
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[[Page 36709]]
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[[Page 36710]]
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[[Page 36711]]
[GRAPHIC] [TIFF OMITTED] TR17JN20.018
[[Page 36712]]
[GRAPHIC] [TIFF OMITTED] TR17JN20.019
[[Page 36713]]
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BILLING CODE 3410-KS-C
Appendix C to Subpart C of Part 766 [Removed]
0
17. Remove appendix C to subpart C.
Subpart H--Loan Liquidation
Sec. 766.352 [Amended]
0
18. Amend Sec. 766.352 in paragraph (a)(5) by removing the words
``subpart B of 7 CFR part 1956'' and adding the words ``part 761,
subpart F of this chapter and part 3 of this title'' in their place.
Sec. 766.353 [Amended]
0
19. Amend Sec. 766.353 in paragraph (a)(8) by removing the words
``subpart B of 7 CFR part 1956 before or in conjunction with the'' and
adding the words ``part 761, subpart F of this chapter before, or in
conjunction with, the'' in their place.
0
20. Amend Sec. 766.354 by revising paragraph (a)(6) to read as
follows:
Sec. 766.354 Voluntary conveyance of chattel.
 (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.
* * * * *
0
21. Amend Sec. 766.357 by revising paragraphs (b)(5) and (c)(3) to
read as follows:
Sec. 766.357 Involuntary liquidation of real property and chattel.
* * * * *
 (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
0
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.
0
23. Amend Sec. 772.9 by revising paragraph (c) to read as follows:
Sec. 772.9 Releases.
* * * * *
 (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.
0
24. Revise Sec. 772.13 to read as follows:
Sec. 772.13 Delinquent account servicing.
 (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 Sec. 772.14, the Agency will
liquidate the account in accordance with Sec. 772.16. Delinquent AMP
loans will be serviced in accordance with part 761, subpart F of this
chapter and part 3 of this title.
 (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.
[[Page 36714]]
PART 792--[REMOVED]
0
25. Under the authority of 31 U.S.C. 3717, remove part 792.
PART 1403--[REMOVED]
0
26. Under the authority of 15 U.S.C. 714b, remove part 1403.
PART 1951--SERVICING AND COLLECTIONS
0
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]
0
28. Remove and reserve subpart C, consisting of Sec. Sec. 1951.101
through 1951.150.
PART 1956--DEBT SETTLEMENT
0
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 Multi-Family
Housing
0
30. Amend Sec. 1956.51 in the first sentence by removing the words
``the Farm Credit loan programs of the Farm Service Agency (FSA) and''
and adding a sentence at the end of the section.
 The addition reads as follows.
Sec. 1956.51 Purpose.
 * * * The provisions of this subpart do not apply to any program
administered by the Farm Service Agency as of June 17, 2020.
Subpart C--Debt Settlement--Community and Business Programs
0
31. Amend Sec. 1956.101 by adding a sentence at the end of the section
to read as follows.
Sec. 1956.101 Purpose.
 * * * The provisions of this subpart do not apply to any program
administered by the Farm Service Agency as of June 17, 2020.
Robert Johansson,
Chairman, Federal Crop Insurance Corporation Board.
Stephen L. Censky,
Vice Chairman, Commodity Credit Corporation, and Deputy Secretary of
Agriculture.
[FR Doc. 2020-09447 Filed 6-16-20; 8:45 am]
BILLING CODE 3410-KS-P