[Federal Register Volume 59, Number 128 (Wednesday, July 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15845]
[[Page Unknown]]
[Federal Register: July 6, 1994]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Secretary
24 CFR Part 17
[Docket No. R-94-1738; FR-3595-F-01]
RIN 2501-AB70
Administrative Claims
AGENCY: Office of the Secretary, HUD.
ACTION: Final rule.
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SUMMARY: This rule brings up to date the Department's existing
regulations relating to administrative claims to reflect current
statutory authority for federal agencies to compromise, terminate or
suspend collection activities on claims of the Government up to
$100,000 without prior approval from the Department of Justice. The
existing regulation limits such collection activities to debts up to
$20,000. The rule also makes two other technical amendments--one
relating to the assessment of interest on claims due to the Department
and one relating to the distribution of certain final decisions on
indebtedness made by HUD Deputy Assistant Secretaries.
EFFECTIVE DATE: August 5, 1994.
FOR FURTHER INFORMATION CONTACT: Albert M. Miller, Departmental Claims
Officer, room 2206, Department of Housing and Urban Development, 451
Seventh Street, SW., Washington, DC 20410, voice (202) 708-3310, TDD
(202) 708-9300. (These are not toll-free numbers.)
SUPPLEMENTARY INFORMATION: Section 3711(a) of title 31, United States
Code authorizes the head of an executive or legislative agency to
compromise (or to suspend or end collection action) on a claim of the
Government of not more than $100,000 (excluding interest) or such
higher amount as the Attorney General may from time to time prescribe
provided that the claim has not been referred to another executive or
legislative agency for further collection action. Prior to amendment of
this section by the Administrative Dispute Resolution Act (Pub. L. 101-
552, 104 Stat. 2736, Approved November 15, 1990) this authority of
agencies to compromise, or to suspend or end collection actions on
government claims was limited to claims of $20,000 or less.
Existing HUD regulations (24 CFR Part 17 (Administrative Claims)
contain a number of provisions setting forth the now out of date dollar
threshold of $20,000 rather than the $100,000 threshold which the
statute (31 U.S.C. 3711(a)) currently authorizes. This rule updates HUD
regulations (Subpart C of 24 CFR Part 17--Procedures for the Collection
of Claims by the Government) to reflect the new $100,000 statutory
threshold.
Current regulations--17 CFR 17.72(e)--provide for assessment of
interest on claims due the Department at 7 percent. This rule revises
this provision to provide for the assessment of interest at the
Treasury rate in effect when the demand for payment is made, as
provided in the Federal Claims Collection Act of 1966, as amended by
the Debt Collection Act of 1982, and in the joint regulations of the
Attorney General and Comptroller General at 4 CFR Parts 101-105 (joint
regulations).
The rule also revises section 17.72(e) which currently reads:
When a debt is paid in installments and interest is collected,
installment payments will first be applied to the payment of accrued
interest and then to principal in accordance with the so-called
``U.S. Rule'' unless a different rule is prescribed by statute,
contract or regulation.
The Debt Collection Act of 1982 specifically provides for the
assessment of interest and, in 1984, the joint regulations were amended
to reflect the provisions of that Act. Reference to the ``U.S. Rule''
was properly deleted from the amended joint regulations and a reference
to 31 U.S.C. 3717, the statutory provision authorizing agencies to
assess interest on debts, was substituted. In this rule, as was done in
the amended joint regulations, the obsolete reference to the so called
``U.S. Rule'' is deleted.
Finally, in 24 CFR 17.110, a section relating to final decisions on
amounts of indebtedness made by HUD Deputy Assistant Secretaries or
their designees, paragraph (b) providing that copies of the final
decisions will be distributed to the General Counsel, the Office of
Finance and Accounting, and the debtors (or their attorneys or
representatives if applicable) is revised so that it only provides for
copies to debtors (or their attorneys or representatives, if
applicable). The change reflects HUD policy that any provisions
relating to distribution of documents within the Department should not
be included in a regulation designed to inform the public of its rights
and obligations. Such provisions are more appropriate in a handbook or
other internal HUD directive.
Due to the strictly technical nature of this rule, and the fact
that the statutory provisions involved are, at any rate, self
enforcing, the Department has determined that notice and public comment
procedure under Title 5 of the United States Code is unnecessary and is
therefore issuing this document as a final rule.
Procedural Matters
Regulatory Flexibility
In accordance with 5 U.S.C. 605(b) (the Regulatory Flexibility
Act), the Secretary has reviewed this rule before publication and by
approving it certifies that this rule does not have a significant
economic impact on a substantial number of small entities. This rule is
technical in nature. It effects no substantive changes in HUD programs
or policies.
Semiannual Agenda
This rule was listed as item number 1532 in the Department's
Semiannual Agenda of Regulations published on April 25, 1994 (59 FR
20424, 20435) under Executive Order 12866 and the Regulatory
Flexibility Act.
Executive Order 12612, Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this rule do not have Federalism implications and, thus,
are not subject to review under the Order. No programmatic or policy
changes result from this rule's promulgation which would affect
existing relationships between the Federal Government and State and
local governments.
Executive Order 12606, The Family
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this rule does not have
potential for significant impact on family formation, maintenance, and
general well-being, and, thus, is not subject to review under the
Order. The rule is technical in nature and makes no significant change
in existing HUD policies or programs.
Environment
An environmental assessment is unnecessary, since internal
administrative procedures whose content does not constitute a
development decision affecting the physical condition of specific
project areas or building sites are categorically excluded from the
Department's National Environmental Policy Act procedures under 24 CFR
50.20(k).
List of Subjects in 24 CFR Part 17
Administration practice and procedure, Claims, Government
employees, Income taxes, Wages.
Accordingly, 24 CFR part 17 is amended to read as follows:
PART 17--ADMINISTRATIVE CLAIMS
1. The authority citation for 24 CFR part 17 is revised to read as
follows:
Authority: 28 U.S.C. 2672; 42 U.S.C. 3535(d), unless otherwise
noted.
2. Paragraph (a) of Sec. 17.60 is revised to read as follows:
Sec. 17.60 Scope and definitions.
(a) Scope. This subpart sets forth the regulations of the Secretary
of Housing and Urban Development implementing the Federal Claims
Collection Act of 1966, as amended by the Federal Debt Collection Act
of 1982 (31 U.S.C. 3701 et seq.) (the Act), in conformity with the
standards jointly promulgated by the Attorney General and the
Comptroller General in 4 CFR parts 101 through 105. The Act:
(1) Requires the Secretary or his designee to attempt collection of
all claims of the United States for money or property arising out of
the activities of the Department; and
(2) Authorizes the Secretary or his designee to compromise claims
that have not been referred to another executive or legislative agency
for further collection action where the claim does not exceed $100,000
exclusive of interest, or to suspend or terminate collection action
where it appears that no person liable on the claim has the present or
prospective financial ability to pay any significant sum thereon or
that the cost of collecting the claim is likely to exceed the amount of
recovery.
* * * * *
3. Section 17.62 is revised to read as follows:
Sec. 17.62 Subdivision and joining of claims.
(a) A debtor's liability arising from a particular transaction or
contract shall be considered as a single claim in determining whether
the claim is one not exceeding $100,000 exclusive of interest for the
purpose of compromise or termination of collection action. Such a claim
may not be subdivided to avoid the monetary ceiling established by the
Act.
(b) Joining of two or more single claims in a demand upon a
particular debtor for payment totaling more than $100,000 does not
preclude compromise or termination of collection action with respect to
any one of such claims that does not exceed $100,000 exclusive of
interest.
4. Paragraph (a) of Sec. 17.64 is revised to read as follows:
Sec. 17.64 Referral of claims to the Assistant Secretary for
Administration.
(a) Authority of the Assistant Secretary for Administration. The
Assistant Secretary for Administration shall exercise the powers and
perform the duties of the Secretary to compromise, or to suspend or
terminate collection action on all Department claims not exceeding
$100,000 exclusive of interest, except as provided in Sec. 17.65 and
paragraph (b) of this section. When initial attempts at collection by
the office having responsibility for such claims have not been fully
successful, the claim file shall be forwarded to the Assistant
Secretary for Administration for further administrative collection
procedures. Claims shall be referred to the Assistant Secretary for
Administration well within the applicable statute of limitations (28
U.S.C. 2415 and 2416), but in no event more than 2 years after the
claims accrued.
* * * * *
5. Paragraph (b) of Sec. 17.65 is revised to read as follows:
Sec. 17.65 Authority of offices to compromise claims or suspend or
terminate collection action.
* * * * *
(b) Claims arising under certain programs. (1) The office primarily
responsible for the following programs of the Department is authorized,
in those cases where initial collection attempts are not wholly
successful, to compromise or to suspend or terminate collection action
on claims not exceeding $100,000 with respect to:
(i) A claim under title I of the National Housing Act;
(ii) A claim on a rehabilitation loan account under section 312 of
the Housing Act of 1964;
(iii) A claim against tenants or former tenants of properties
acquired by, or under the custody of, the Secretary or held by him as
mortgagee in possession; or
(iv) A claim arising out of the operational (nonadministrative)
activities of the Government National Mortgage Association (GNMA).
(2) However, no office shall undertake to compromise or terminate
any collection action excluded under Sec. 17.64(b).
6. Paragraph (e) of Sec. 17.72 is revised to read as follows:
Sec. 17.72 Methods of collection and imposition of late charges.
* * * * *
(e) Interest. Where prejudgment interest is not mandated by
statute, contract or regulation, the minimum rate of interest to be
charged on delinquent debts is the Tax and Loan Account Rate for the
U.S. Treasury (also known as the Current Value of Funds rate) as
prescribed and published semiannually by the Secretary of the Treasury
in the Federal Register, in accordance with 31 U.S.C. 3717. Prejudgment
interest may be waived as an inducement to voluntary payment. In such
cases demand letters should inform the debtor that prejudgment interest
will be collected if suit becomes necessary. When a debt is paid in
installments and interest is collected, installment payments will first
be applied to the payment of accrued interest and then to principal
unless a different rule is prescribed by statute, contract or
regulation. Prejudgment interest shall not be demanded or collected on
civil penalty and forfeiture claim unless the statute under which the
claim arises authorizes the collection of such interest.
* * * * *
7. Paragraph (b) of Sec. 17.110 is revised to read as follow:
Sec. 17.110 Determination of indebtedness and appeal from
determination.
* * * * *
(b) Copies of the DAS decision will be distributed to the debtor
and the debtor's attorney or other representative, if applicable.
Dated: June 22, 1994.
Henry G. Cisneros,
Secretary.
[FR Doc. 94-15845 Filed 7-5-94; 8:45 am]
BILLING CODE 4210-32-P
