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DEPARTMENT OF AGRICULTURE FOR FURTHER INFORMATION CONTACT: For been in 7 CFR part 792. In addition, information, contact Iris Roseboro; regulations in 7 CFR parts 1951 and Office of the Secretary telephone: (202) 720–6257; email: 1956 have been used by FSA in the [email protected]. Persons with settlement and adjustments of FSA farm 7 CFR Part 3 disabilities who require alternative loans made under the Consolidated means for communication should Farm and Rural Development Act Federal Crop Insurance Corporation contact the USDA Target Center at (202) (ConAct) and debts related to those 720–2600 (voice). loans. This rule removes 7 CFR part 792 7 CFR Part 400 SUPPLEMENTARY INFORMATION: and 7 CFR part 1951, subpart C. Since 7 CFR part 1956 is also used by the Background Farm Service Agency Rural Development of USDA (RD), those The regulations in 7 CFR part 3 (part regulations are not deleted but are 7 CFR Parts 761, 765, 766, 772, and 792 3) specify the general regulations amended to state affirmatively that they applicable to debt collection activities of do not apply to loans made by FSA and Commodity Credit Corporation USDA agencies and specify the amount debts relating to such loans. In those of civil penalties that USDA agencies limited instances where provisions of 7 7 CFR Part 1403 levy as authorized by law. Federal CFR parts 792, 1951, and 1956 will agencies are required by several laws to continue to be used because of their Farm Service Agency collect debts owed to the United States, specific application to FSA debts, the principally DCIA. Several USDA provision has been included in part 3; Rural Housing Service agencies issued debt collection for the provisions that will continue to regulations prior to the enactment of only be used for Farm Loan Programs, Rural Business-Cooperative Service DCIA and the provisions of 7 CFR 3.1(b) the provisions have been included in 7 allow individual USDA agencies to CFR part 761 as subpart F. Rural Utilities Service issue regulations to supplement part 3. RD also has debt settlement authority The Office of the Chief Financial under the ConAct and The Housing Act 7 CFR Parts 1951 and 1956 Officer (OCFO), USDA, is reviewing the of 1949 (Housing Act). The following individual agency regulations and list of RD’s implementing debt [Docket ID USDA–2019–0007] procedures in order to ensure that all settlement regulations authorized by the agencies’ individual debt collection ConAct and the Housing Act that are RIN 0560–AA16 policies align with government-wide excepted from part 3 are: policies, as well as the specific policies • 7 CFR part 1717, subpart Y; Debt Management of the Secretary. For purposes of this • 7 CFR part 1752; review, a ‘‘debt’’ is a delinquent amount • AGENCY: Office of the Secretary, 7 CFR 1782.20; owed to the United States and does not • 7 CFR 1951.213; Commodity Credit Corporation, Farm include the entire outstanding amount • 7 CFR part 1956; Service Agency, Federal Crop Insurance of a loan made by an agency when the • 7 CFR part 3550, subpart F; Corporation, Rural Housing Service, borrower is making scheduled loan • 7 CFR 3560.457; and Rural Business-Cooperative Service, and payments as required by the loan • 7 CFR 3565.56. Rural Utilities Service, USDA. agreement. If a USDA agency Additionally, 7 CFR part 1951, ACTION: Final rule. determines that a borrower is subpart C, RD regulations that delinquent on a loan payment, the previously implemented the Debt SUMMARY: The general debt management delinquent amount will be considered Collection Improvement Act are being regulations of the Department of to be a ‘‘debt’’ for purposes of part 3 and replaced by part 3 and therefore are Agriculture (USDA) provide that the agency will be required to give all being removed, as stated above. individual USDA agencies may issue due process notices prior to proceeding Exceptions are included in the regulations for their own specific debt with debt collection actions, including regulation for CCC and FCIC. CCC and collection activities principally in administrative offset or salary offset and FCIC are wholly-owned government recognition that the agencies conducted referral to the Department of Treasury corporations and each have debt collection activities prior to the for centralized offset. The intent of this independent settlement authority under enactment of the Debt Collection review is to consolidate the debt their respective authorizing laws. Improvement Act of 1996 (DCIA). Many collection and settlement regulations of Accordingly, while the debt collection of the provisions of individual agencies USDA in one location to ensure regulations for these entities have been are redundant to part 3. This rule will consistency and uniformity in deleted, provisions have been included eliminate the debt collection regulations operations of USDA agencies. This in part 3 to recognize the ability of these of the following USDA agencies, and action is not intended to make any corporations to settle and adjust claims part 3 will be revised to include specific substantive changes in USDA policy or without referral to the Department of provisions used by these agencies: the procedure or to impose any additional Justice. In addition, this rule revises part Commodity Credit Corporation (CCC); burden on a person who is indebted to 3 to make clear that, in those instances the Federal Crop Insurance Corporation the United States. where a debt has been incurred by a (FCIC), and the Farm Service Agency The amendments made by this final foreign obligor and is potentially (FSA). In addition, as required by the rule incorporate the results of this susceptible to the bankruptcy or Federal Civil Penalties Inflation review by CCC, FSA, the Foreign insolvency laws of a foreign Adjustment Improvements Act of 2015 Agricultural Service (FAS), FCIC, the jurisdiction, the provisions of part 3 are (the 2015 Civil Penalties Act), this rule Natural Resources Conservation Service not applicable. Principally, these updates the size of civil monetary (NRCS), and the Risk Management instances of foreign debt collection arise penalties to reflect inflationary Agency (RMA). under CCC programs which authorize adjustments for 2020. FSA’s principal debt settlement CCC to make payments to entities who DATES: Effective: June 17, 2020. regulations that supplement part 3 have have financed exports of US agricultural

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products and the foreign obligor does net benefits (including potential regulations and to consolidate current not make full payment to the exporter economic, environmental, public health debt collection regulations of three or the exporter’s assignee. In these and safety effects, distributive impacts, UDSA agencies at one USDA-wide programs, CCC retains the right to and equity). Executive Order 13563 regulation. Accordingly, this action does pursue collection from the obligor, and emphasized the importance of not require an analysis under the often these matters fall within the quantifying both costs and benefits, of National Environmental Policy Act jurisdiction of a foreign court. reducing costs, of harmonizing rules, (NEPA). NRCS, FAS, and RMA do not have and of promoting flexibility. The Executive Order 12372 agency specific debt collection requirements in Executive Orders 12866 regulations and currently follow part 3. and 13573 for the analysis of costs and Executive Order 12372, Accordingly, no action was necessary to benefits apply to rules that are ‘‘Intergovernmental Review of Federal delete existing regulations or revise part determined to be significant. Executive Programs,’’ requires consultation with 3. Order 13777, ‘‘Enforcing the Regulatory State and local officials that would be This rule also revises subpart I of part Reform Agenda,’’ established a federal directly affected by proposed Federal 3 to update the amount of civil policy to alleviate unnecessary financial assistance. The objectives of monetary penalties that may be levied regulatory burdens on the American the Executive Order are to foster an by USDA agencies to reflect inflationary people. intergovernmental partnership and a adjustments for 2020 as required by the The Office of Management and Budget strengthened federalism, by relying on 2015 Civil Penalties Act. As required by (OMB) designated this rule as not State and local processes for State and the 2015 Civil Penalties Act, the annual significant under Executive Order local government coordination and adjustment was made for inflation based 12866, and therefore, OMB has not review of proposed Federal financial on the Consumer Price Index for the reviewed this rule and an analysis of assistance and direct Federal month of October 2019 and rounded to costs and benefits is not required under development. For reasons specified in the nearest dollar after an initial either Executives Orders 12866 or the final rule related notice regarding 7 adjustment. The civil monetary 13563. CFR part 3015, subpart V (48 FR 29115, penalties are listed according to the Executive Order 13771, ‘‘Reducing June 24, 1983), the programs and applicable administering agency. Regulation and Controlling Regulatory activities within this rule are excluded Costs,’’ requires that, in order to manage from the scope of Executive Order Effective Date and Notice and Comment the private costs required to comply 12372. The action taken by this rule: with Federal regulations, for every new Consolidates at 7 CFR part 3 existing significant or economically significant Executive Order 12988 debt collection regulations used by regulation issued, the new costs must be This rule has been reviewed under certain USDA agencies; eliminates offset by the elimination of at least two Executive Order 12988, ‘‘Civil Justice obsolete debt collection regulations; and prior regulations. As this rule is Reform.’’ This rule will not preempt adjusts USDA civil monetary penalties designated not significant, it is not State or local laws, regulations, or as required by the 2015 Civil Penalties subject to Executive Order 13771. In a policies unless they represent an Act. general response to the requirements of irreconcilable conflict with this rule. Because the action to update existing Executive Order 13777, USDA created a The rule will not have retroactive effect. regulations is ministerial and the Regulatory Reform Task Force, and Before any judicial action may be adjustment to civil monetary penalties USDA agencies were directed to remove brought regarding the provisions of this is required by the 2015 Civil Penalties barriers, reduce burdens, and provide rule, the administrative appeal Act, USDA finds that there is good better customer service both as part of provisions identified in 7 CFR part 3 cause under 5 U.S.C. 553(b)(3)(B) that the regulatory reform of existing must be exhausted. opportunity for prior comment is regulations and as an ongoing approach. Executive Order 13132 unnecessary and contrary to the public USDA reviewed this regulation and interest and USDA is issuing this made changes to improve any provision This rule has been reviewed under revised regulation as a final rule. that was determined to be outdated, Executive Order 13132, ‘‘Federalism.’’ The Office of Management and Budget unnecessary, or ineffective. The policies contained in this rule do (OMB) designated this rule as not major not have any substantial direct effect on under the Congressional Review Act, as Regulatory Flexibility Act States, on the relationship between the defined by 5 U.S.C. 804(2). Therefore, The Regulatory Flexibility Act Federal government and the States, or FSA is not required to delay the generally requires an agency to prepare on the distribution of power and effective date for 60 days from the date a regulatory flexibility analysis of any responsibilities among the various of publication to allow for rule whenever the Administrative levels of government, except as required Congressional review. Procedure Act or any other law requires by law. Nor does this rule impose Accordingly, this rule is effective an agency to publish a proposed rule, substantial direct compliance costs on upon publication in the Federal unless the agency certifies that the rule State and local governments. Therefore, Register. will not have a significant economic consultation with the States is not impact on a substantial number of small required. Executive Orders 12866, 13563, 13771, entities. This rule is not subject to the and 13777 Executive Order 13175 Regulatory Flexibility Act because Executive Order 12866, ‘‘Regulatory USDA is not required by Administrative This rule has been reviewed in Planning and Review,’’ and Executive Procedure Act or any law to publish a accordance with the requirements of Order 13563, ‘‘Improving Regulation proposed rule for this rulemaking. Executive Order 13175, ‘‘Consultation and Regulatory Review,’’ direct agencies and Coordination with Indian Tribal to assess all costs and benefits of Environmental Review Governments.’’ Executive Order 13175 available regulatory alternatives and, if The action taken by this rule is requires Federal agencies to consult and regulation is necessary, to select ministerial in nature in that the purpose coordinate with Tribes on a regulatory approaches that maximize of the rule is to eliminate obsolete government-to-government basis on

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policies that have Tribal implications, Paperwork Reduction Act recordkeeping requirements, Rural including regulations, legislative This rule does not create any new areas, Wages. comments, proposed legislation, and information collection requirements as 7 CFR Part 1956 other policy statements or actions that the agencies affected by this rule will Accounting, Business and industry, have substantial direct effects on one or continue to conduct debt collection more Indian Tribes, on the relationship Claims, Loan programs-agriculture, activities in the same manner as before Loan programs-business, Loan between the Federal Government and this rule. Due to the nature of this rule, Indian Tribes or on the distribution of programs-housing and community the information collection is exempted development, Reporting and power and responsibilities between the from the Paperwork Reduction Act as Federal Government and Indian Tribes. recordkeeping requirements, Rural specified in 5 CFR 1320.4(a)(2) because areas. The USDA has assessed the impact of the nature of the information collection Under the authority of 5 U.S.C. 301, this rule on Indian Tribes and activities is that the USDA agency is 7 U.S.C. 1506, and 15 U.S.C. 714b and determined that this rule does not have conducting administrative action as discussed in the preamble, USDA Tribal implications that require Tribal against the individuals or debtors. consultation under Executive Order amends Title 7 of the Code of Federal 13175. If a Tribe requests consultation, List of Subjects Regulations as follows: ■ OCFO will work with USDA’s Office of 7 CFR Part 3 1. Revise part 3 to read as follows: Tribal Relations to ensure meaningful consultation is provided when changes, Administrative practice and PART 3—DEBT MANAGEMENT procedure, Claims, Government additions, and modifications identified Subpart A—General in this rule are not expressly mandated employees, Income taxes, Loan Sec. by legislation. programs-agriculture, Penalties, Reporting and recordkeeping 3.1 Purpose and scope. 3.2 Authority. The Unfunded Mandates Reform Act of requirements, Wages. 1995 3.3 Definitions. 7 CFR Part 400 3.4 Delegations of authority. Title II of the Unfunded Mandates Subpart B—Standards for the Reform Act of 1995 (UMRA) requires Acreage allotments, Administrative practice and procedure, Claims, Crop Administrative Collection and Compromise Federal agencies to assess the effects of of Claims insurance, Fraud, Government their regulatory actions on State, local, 3.10 Aggressive agency collection activity. and Tribal governments or the private employees, Income taxes, Intergovernmental relations, Penalties, 3.11 Demand for payment. sector. Agencies generally must prepare 3.12 Reporting debts to Credit Reporting a written statement, including a cost Reporting and recordkeeping Agencies. benefit analysis, for proposed and final requirements, Wages. 3.14 Suspension or revocation of eligibility rules with Federal mandates that may 7 CFR Part 761 for loans and loan guarantees, licenses, result in expenditures of $100 million or permits, or privileges. Accounting, Loan programs- 3.15 Liquidation of collateral. more in any 1 year for State, local, or agriculture, Rural areas. 3.16 Collection in installments. Tribal governments, in the aggregate, or 3.17 Interest, penalties, and administrative to the private sector. The UMRA 7 CFR Part 765 costs. generally requires agencies to consider Agriculture, Agricultural 3.18 Use and disclosure of mailing alternatives and adopt the more cost addresses. commodities, Credit, Livestock, Loan 3.19 Standards for the compromise of effective or least burdensome alternative programs-agriculture. that achieves the objectives of the rule. claims and debt settlement. 7 CFR Part 766 3.20 Standards for suspending or This rule contains no Federal mandates, terminating collection activities. as defined in Title II of the UMRA, for Agriculture, Agricultural 3.21 Referrals of debts to Justice. State, local, and Tribal governments or commodities, Credit, Livestock, Loan 3.22 CCC withholding of payment. the private sector. Therefore, this rule is programs-agriculture. 3.23 CCC assignment of payment. not subject to the requirements of Subpart C—Referral of Debts to Treasury sections 202 and 205 of the UMRA. 7 CFR Part 772 3.30 General requirements. E-Government Act Compliance Agriculture, Loan programs- 3.31 Mandatory referral for cross-servicing. agriculture, Rural areas. 3.32 Discretionary referral for cross- USDA is committed to complying servicing. with the E-Government Act, to promote 7 CFR Part 792 3.33 Required certification. the use of the internet and other Claims, Income taxes. 3.34 Fees. information technologies to provide Subpart D—Administrative Offset increased opportunities for citizen 7 CFR Part 1403 access to Government information and 3.40 Scope. Claims, Income taxes, Loan programs- 3.41 Procedures for notification of intent to services, and for other purposes. agriculture. collect by administrative offset. Federal Assistance Programs 7 CFR Part 1951 3.42 Debtor rights to inspect or copy records, submit repayment proposals, or This rule does not provide any new Accounting, Agriculture, Claims, request administrative review. Federal Domestic Assistance Program Community facilities, Credit, Disaster 3.43 Non-centralized administrative offset. nor change any of the USDA programs assistance, Government employees, 3.44 Centralized administrative offset. that are in the Catalog of Federal Grant programs-housing and community 3.45 USDA payment authorizing agency Domestic Assistance. This rule development, Housing, Income taxes, offset of pro rata share of payments due entity in which debtor participates. prescribes standards and procedures for Loan programs-agriculture, Loan 3.46 Offset against tax refunds. use by USDA agencies in the collection, programs-housing and community 3.47 Offset against amounts payable from compromise, suspension, or termination development, Low and moderate Civil Service Retirement and Disability of debts owed to the United States. income housing, Reporting and Fund.

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Subpart E—Administrative Wage In such cases the laws and and administrative offset of tax refunds Garnishment implementing regulations that are (31 U.S.C. 3720A). 3.50 Purpose. specifically applicable to claims (b) With respect to agency specific 3.51 Scope. collection activities of a particular provisions of this part, the following 3.52 Definitions. agency generally will take precedence authorities are applicable: 3.53 Procedures. over this part. (1) The Commodity Credit Subpart F—Administrative Reviews for (b) USDA agencies may issue Corporation (CCC): section 4 of the Administrative Offset, Administrative Wage regulations to supplement this part in Commodity Credit Corporation Charter Garnishment, and Disclosure to Credit order to meet the specific requirements Act (15 U.S.C. 714b). Reporting Agencies of individual programs. (2) The Farm Service Agency (FSA): 3.60 Applicability. (c) The regulations of this part will sections 331, 331A, 331D, and 373 of 3.61 Presiding employee. not apply to: the Consolidated Farm and Rural 3.62 Procedures. (1) Collection of debts owed Development Act (ConAct) (7 U.S.C. Subpart G—Federal Salary Offset government travel card contractors by 1981, 1981a, 1981d, and 2008h). USDA employees; (3) The Federal Crop Insurance 3.70 Scope. (2) Collection of debts owed by Corporation (FCIC): section 506(j) of the 3.71 Definitions. 3.72 Coordinating offset with another individual Food Stamp Program Federal Crop Insurance Act (7 U.S.C. Federal agency. recipients for whom debt collection 1506(j)). procedures are provided under § 273.18 3.73 Determination of indebtedness. § 3.3 Definitions. 3.74 Notice requirements before offset. of this title. 3.75 Request for a hearing. (3) Collection of debts owed by For the purpose of this part, except as 3.76 Result if employee fails to meet foreign governments and, sovereign where otherwise specifically provided, deadlines. institutions of foreign governments. the term or terms: 3.77 Hearing. (4) Actions pursuant to the FSA FLP Account means a record of 3.78 Written decision following a hearing. Debt Settlement regulations in part 761, transactions involving the debt, claim, 3.79 Review of USDA records related to the subpart F, of this title are authorized or loan for a particular person or entity, debt. under the Consolidated Farm and Rural including the name, address, taxpayer 3.80 Written agreement to repay debts as identification number, other alternative to salary offset. Development Act (ConAct), which are 3.81 Procedures for salary offset: when independent of the DCIA are excepted information necessary to establish the deductions may begin. from this part. person’s or entity’s identity, the balance, 3.82 Procedures for salary offset: types of (5) Actions pursuant to the following status, history of the debt, and program collection. RD Debt Settlement regulations under which the debt or claim arose. 3.83 Procedures for salary offset: methods authorized under the ConAct and the Administrative charges means the of collection. Housing Act, which are independent of additional costs of processing 3.84 Procedures for salary offset: imposition the DCIA are excepted from this part: delinquent debts against the debtor, to of interest, penalties, and administrative the extent such costs are attributable to costs. (i) 7 CFR part 1717, subpart Y; (ii) 2 CFR part 175; the delinquency. Such costs include, 3.85 Non-waiver of rights. but are not limited to, costs incurred in 3.86 Refunds. (iii) 7 CFR 1782.20; 3.87 Agency regulations. (iv) 7 CFR 1951.213; obtaining a credit report, costs of (v) 7 CFR part 1956; employing commercial firms to locate Subpart H—Cooperation with the Internal (vi) 7 CFR part 3550, subpart F; debtor, costs of employing contractors Revenue Service (vii) 7 CFR 3560.457; and for collection services, and costs of 3.90 Reporting discharged debts to the (viii) 7 CFR 3565.56. selling collateral or property to satisfy Internal Revenue Service. the debt. § 3.2 Authority. Subpart I—Adjusted Civil Monetary Administrative offset means Penalties (a) Generally, the regulations in this withholding funds payable by the part are issued under the Debt 3.91 Adjusted civil monetary penalties. United States (including funds payable Collection Act of 1982, as amended by by the United States on behalf of a State Authority: 5 U.S.C. 301; 7 U.S.C. 1506, the Debt Collection Improvement Act of government) to, or held by the United 1981, 1981a, 1981d, and 2008h; 15 U.S.C. 1996 (DCIA) (31 U.S.C. 3701, 3711– States for, a person to satisfy a debt. 714b; 31 U.S.C. 3701, 3711, 3716–18, and 3720) and the Federal Claims Collection 3720B; and 31 CFR parts 285 and 901–904. This definition is consistent with 31 Standards (FCCS) issued pursuant to the U.S.C. 3701(a)(1). Subpart A—General DCIA by Treasury and Justice (31 CFR Agency means an agency, office, or parts 901–904) that prescribe corporation within USDA subject to the § 3.1 Purpose and scope. government-wide standards for authority or general supervision of the (a)(1) The regulations in this part administrative collection, compromise, Secretary. prescribe standards and procedures for suspension, or termination of agency Borrower and debtor have the same use by USDA agencies in the collection, collection action, disclosure of debt meaning and refer to a person who owes compromise, suspension, or termination information to credit reporting agencies, a delinquent, nontax debt to the United of debts owed to the United States. referral of claims to private collection States. (2) The regulations in this part apply contractors for resolution, and referral to Carrier means a person or other to all debts of the United States subject Justice for litigation to collect debts entity, including but not limited to to collection by USDA agencies, except owed the government. The regulations railroads, motor carriers, ocean carriers as otherwise specified in this part or by under this part also are issued under or inter-modal marketing companies, statute. Treasury regulations implementing that provide transportation or other (3) The regulations in this part do not DCIA (31 CFR part 285) and related transportation-related services for preclude the Secretary from collection, statutes and regulations governing the compensation. compromise, suspension, or termination offset of Federal salaries (5 U.S.C. 5512 CCC means Commodity Credit of debts as otherwise authorized by law. and 5514; 5 CFR part 550, subpart K) Corporation.

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Centralized administrative offset person, organization, or entity, except Late payment interest rate means the means referral of a debt to the Treasury another Federal agency. amount of interest charged on Offset Program (TOP) to collect debts Debt collection center means the delinquent debts and claims in cases that creditor agencies have certified Treasury or other government agency or where the annual rate of interest is not pursuant to 31 U.S.C. 3716(c), 3720A(a), division, designated by the Secretary of established by a promissory note. and applicable regulations for offset of the Treasury with authority to collect Unless otherwise provided by the law, payments made to a debtor by Federal debt on behalf of creditor agencies in regulation, contract, or agreement that agencies other than USDA. Centralized accordance with 31 U.S.C. 3711(g). established the debt, the late payment offset also includes offset of payments Debt record means the account, interest rate will be equal to the higher made by States pursuant to 31 U.S.C. register, balance sheet, file, ledger, data of the Prompt Payment Act interest rate 3716(h) and 31 CFR 285.6. file, or similar record of debts owed to or the standard late payment rate CFO means Chief Financial Officer. any Federal agency with respect to prescribed by 31 U.S.C. 3717, as of the Civil monetary penalties are assessed which collection action is being date the debt became delinquent. for violations and failures to comply pursued. Interest on delinquent debts will accrue with various program requirements. The Debtor means a person who owes a on a daily basis. management and settlement of these delinquent, nontax debt to the United NAD means the USDA National debts are specified in this part, and the States. Appeals Division. applicable laws and program specific Delinquent means a debt that has not Non-centralized administrative offset regulations. been paid by the date specified in the means an agreement between a USDA Claim and debt have the same agency’s initial written demand for creditor agency and a payment meaning and refer to an amount of payment or applicable agreement or authorizing agency to offset the money, funds, or property that has been instrument (including a post- payments made by the payment determined by an agency official to be delinquency payment agreement), authorizing agency to satisfy a USDA owed to the United States from any unless other satisfactory payment debt. The creditor agency and paying person, organization, or entity, except arrangements have been made, or as agency can be the same. another Federal agency. otherwise defined by program specific Offset means withholding funds Compromise means the settlement or statutes or regulations. payable by the United States to or held forgiveness of a debt under 31 U.S.C. Discharged debt means any debt, or by the United States for a person to 3711, in accordance with standards part thereof, that an agency has satisfy a debt owed by the payee. specified in FCCS and applicable determined is uncollectible and has OGC means the USDA Office of the federal law. closed out or, in the case of FSA FLP, General Counsel. Contracting officer has the same means the amount of debt that was Payee means a person who is due a meaning as in 41 U.S.C. 7101. discharged through bankruptcy payment from a payment authorizing Credit reporting agencies (also known proceedings where no further collection agency and includes a person who is as credit bureaus) means major credit actions may be taken on that debt. entitled to all or part of a payment. Disposable pay means that part of the reporting agencies that have signed Payment authorizing agency means a debtor’s compensation (including, but agreements with agencies to receive and Federal agency or USDA agency that is not limited to, salary, bonuses, integrate credit information (data) from authorized to disburse payments to a commissions, and vacation pay) from an voluntary subscribers (Federal agencies recipient. employer remaining after the deduction and private sector entities) into their Penalty charge or penalty interest of health insurance premiums and any respective databases for the purpose of means the additional penalty amount amounts required by law to be withheld generating credit reports for sale to charged on delinquent debts as including social security taxes and other purchasers of credit data. specified in 31 U.S.C. 3717(e)(2) and withholding taxes, but not including Creditor agency means a Federal § 3.17(d). any amount withheld pursuant to a agency or USDA agency to which a Person means an individual, court order. debtor owes a debt, including a debt Federal agency means any department corporation, partnership, association, collection center when acting on behalf or entity within the Executive branch of organization, State or local government, of a creditor agency in matters the government that is not a USDA or any other type of public or private pertaining to collection of the debt. agency. entity other than a Federal agency. Cross-servicing means the centralized Financial statement means a Private Collection Agency means any collection of Federal debt and the statement of financial condition at a organization or corporation that various collection actions taken by given date that accurately reflects the specializes in debt collection is known Treasury on behalf of a Federal agency debtor’s assets, liabilities, income, and as a collection agency or debt collector. in accordance with the provisions of 31 expenses. Recoupment means a special method U.S.C. 3711, 31 U.S.C. 3720D, 31 CFR Fiscal Service means the United for adjusting debts arising under the part 285, and other Treasury States Department of the Treasury’s same transaction or occurrence, such as regulations. Cross-servicing includes, Bureau of the Fiscal Service. obligations arising under the same but is not limited to, the use of debt Foreign debt means debt owed by a contract. collection centers and private collection sovereign or non-sovereign entity, when Reviewing officer means a person contractors. the debt is subject to adjudication in a designated by a creditor agency as Day means calendar day unless non-U.S. jurisdiction. responsible for conducting a hearing or otherwise specified. FSA FLP means the Farm Loan providing documentary review on the DCIA means the Debt Collection Programs of FSA. existence of the debt and the propriety Improvement Act of 1996. Government or Federal government of an administrative collection action. Debt means an amount of money, means the government of the United Salary offset means the deduction of funds, or property that has been States, unless otherwise specified. money from the current pay account of determined by an agency official to be Justice means the United States a present or former Government owed to the United States from any Department of Justice. employee as specified in 5 U.S.C. 5514

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to satisfy a debt that person owes the upon a debtor of the United States in (v) Refer the debt to Justice in Government. terms that inform the debtor of the accordance with § 3.21 to initiate Secretary means the Secretary of consequences of failing to cooperate litigation to collect the debt; Agriculture, unless otherwise specified. with the agency to resolve the debt. The (vi) Refer the debt to Treasury for Settlement or debt settlement means, specific content, timing, and number of collection in accordance with subpart C for the purposes of this part only, the demand letters will depend upon the of this part; final disposition or resolution of a debt type and amount of the debt and the (7) How the debtor may inspect and or claim that results in cancellation of debtor’s response, if any, to the agency’s copy records related to the debt; any remaining balance owed and letters or telephone calls. Where statutes (8) How the debtor may request an reporting of the canceled amount to the or agency regulations are specific as to administrative review of the IRS as specified in § 3.90, and the requirements for demand letters, an determination that the debtor owes a applicable IRS requirements. agency will follow its own procedures debt and present evidence that the debt Tax Identification Number or TIN in formulating demand letters. is not delinquent or legally enforceable means the identification number Generally, one demand letter should (see subpart F of this part); required on tax returns and other suffice. In determining the timing of the (9) How a debtor who is a Federal documents submitted to the Internal demand letter(s), an agency will give employee subject to Federal salary offset Revenue Service; that is, an individual’s due regard to the need to refer debts may request a hearing (see subpart G of social security number (SSN) or promptly to Justice for litigation, in this part); employer identification number (EIN). accordance with 31 CFR 904.1. When (10) How a debtor may request a TOP means Treasury Offset Program, necessary to protect the government’s waiver of the debt, if applicable; which is a centralized offset program interest (for example, to prevent the (11) How the debtor’s spouse may that collects delinquent debts owed to running of a statute of limitations), claim his or her share of a joint income Federal agencies and states. written demand may be preceded by tax refund by filing Form 8379 with the Treasury means the United States other appropriate actions under this Internal Revenue Service (see http:// Department of the Treasury. part, including immediate referral for www.irs.gov); USDA means the United States litigation. (12) How the debtor may exercise Department of Agriculture. other statutory or regulatory rights and (b) In demand letters, the USDA Withholding of payment means the remedies available to the debtor; creditor agency will inform the debtor: action taken to temporarily prevent the (13) That certain debtors may be (1) The nature and amount of the payment of some or all amounts to a ineligible for government loans, debt; and the facts giving rise to the debtor under one or more contracts or guarantees, and insurance (see § 3.14); programs. debt; (14) If applicable, the intention to (2) How interest, penalties, and suspend or revoke licenses, permits, or § 3.4 Delegations of authority. administrative costs are added to the privileges (see § 3.14); and The head of an agency is authorized debt, the date by which payment must (15) That the debtor must advise the to exercise any or all of the functions be made to avoid such charges, and that creditor agency of the filing of any provided by this part with respect to such assessments must be made unless bankruptcy proceedings of the debtor or programs for which the head of the excused in accordance with § 3.17; of another person liable for the debt agency has delegated responsibility and (3) The date by which payment being collected. may delegate and authorize the should be made to avoid the enforced (16) The debtor’s right to appeal the redelegation of any of the functions collection actions described in determination in accordance with vested in the head of the agency by this paragraph (b)(6) of this section; applicable appeal procedures; part, except as otherwise provided by (4) Of any willingness to discuss (17) The debtor’s right to present this part. alternative payment arrangements and evidence that all or part of the debt is how the debtor may enter into a written not past-due or not legally enforceable. Subpart B—Standards for the agreement to repay the debt under terms (c) A USDA creditor agency may omit Administrative Collection and acceptable to the agency (see § 3.16); from a demand letter one or more of the Compromise of Claims (5) The name, address, telephone provisions contained in paragraphs § 3.10 Aggressive agency collection number and email address (optional) of (b)(6) through (17) of this section if the activity. a contact person or office; USDA creditor agency, in consultation An agency will aggressively collect all (6) The intent to enforce collection if with OGC, determines that any debts arising out of activities of, or the debtor fails to pay or otherwise provision is not legally required given referred or transferred for collection resolve the debt, by taking one or more the collection remedies to be applied to services to, that agency. Collection of the following actions: a particular debt. In the case of foreign activities will be undertaken promptly (i) Offset the debtor’s USDA payments debt that is subject to insolvency or with follow-up action taken as and refer the debtor’s debt to TOP for bankruptcy proceedings outside the necessary. offset against other Federal payments, United States, a USDA creditor agency including income tax refunds, in may, in lieu of a demand letter, submit § 3.11 Demand for payment. accordance with subpart D of this part; such documentation necessary to (a) Generally, debt collection is (ii) Refer the debt to a private establish its claim as a creditor. initiated with a written demand for collection agency. (d) Agencies will exercise care to payment to the debtor unless an (iii) Report the debt to a credit ensure that demand letters are mailed or applicable agreement or instrument reporting agency in accordance with delivered (as applicable for the program) (including a post-delinquency payment § 3.12; on the same day that they are dated. agreement) provides otherwise (such as (iv) Refer the debt to Treasury in There is no prescribed format for providing USDA an immediate right to accordance with subpart E of this part demand letters. Agencies will utilize collect upon delinquency). Written for possible collection by garnishing the demand letters and procedures that will demand as described in paragraph (b) of debtor’s wages through administrative lead to the earliest practicable this section will be made promptly wage garnishment; determination of whether the debt can

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be resolved administratively or must be (3) Offset is stayed in most cases by classes of debts from this prohibition referred for litigation. the automatic stay. However, agencies and has prescribed standards defining (e) Agencies will respond promptly to may request legal advice from OGC to when a ‘‘delinquency’’ is ‘‘resolved’’ for communications from debtors, within determine whether their payments to purposes of this prohibition. See 31 CFR 30 days of receipt whenever feasible, the debtor and payments of other 285.13 (Barring Delinquent Debtors from and will advise debtors who dispute agencies available for offset may be Obtaining Federal Loans or Loan debts to furnish available evidence to frozen by the agency until relief from Insurance or Guarantees). support their contentions. the automatic stay can be obtained from (b) Similarly, agencies also are not (f) Prior to the initiation of the the bankruptcy court. Agencies also may permitted to extend financial assistance demand process or at any time during request legal advice from OGC to (either directly or indirectly) in the form or after completion of the demand determine whether recoupment is of grants, loans, or loan guarantees to process, if an agency determines to available. judgment debtors who have a judgment pursue, or is required to pursue, lien placed against their property until § 3.12 Reporting of debts to Credit the judgment is satisfied, unless the administrative offset, the procedures Reporting Agencies. applicable to offset must be followed agency grants a waiver in accordance (see subpart D of this part). The (a) In demand letters to debtors sent with agency regulations. See 31 U.S.C. availability of funds or money for debt in accordance with § 3.11, agencies will 3720B. satisfaction by administrative offset, and inform debtors: (c) In non-bankruptcy cases, agencies the agency’s determination to pursue (1) The intent of the agency to report pursuing the collection of statutory collection by administrative offset, will the delinquent debt to credit reporting penalties, forfeitures, or other types of release the agency from the necessity of agencies after 60 days; claims must consider the suspension or further compliance with paragraphs (a), (2) The specific information to be revocation of licenses, permits, or other (b), and (c) of this section. transmitted (that is, name, address, and privileges for any inexcusable or willful failure of a debtor to pay such a debt in (g) Prior to referring a debt for taxpayer identification number, accordance with the agency’s litigation under 31 CFR part 904, information about the debt); (3) The actions which may be taken regulations or governing procedures. agencies will advise each debtor by the debtor to prevent the reporting The debtor will be advised in the determined to be liable for the debt that, (that is, repayment in full or a agency’s written demand for payment of unless the debt can be collected repayment agreement); and the agency’s ability to suspend or revoke administratively, litigation may be (4) The rights of the debtor to request licenses, permits, or privileges. initiated. This notification complies review of the existence of the debt in (d) Any agency making, guaranteeing, with Executive Order 12988 (58 FR accordance with subpart F of this part. insuring, acquiring, or participating in, 51735, October 4, 1993) and may be (b) Disclosure of delinquent consumer loans must consider suspending or given as part of a demand letter under debts must be consistent with the disqualifying any lender, contractor, or paragraph (b) of this section or in a requirements of 31 U.S.C. 3711(e), the broker from doing further business with separate document. Litigation counsel Privacy Act of 1974 (5 U.S.C. 552a), the the agency or engaging in programs for the government will be advised that Bankruptcy Code, and 31 CFR 901.4. sponsored by the agency if such lender, this notice has been given. In general, (c) When an agency has given a debtor contractor, or broker fails to pay its only one agency should service a debt any of the notices required by this part debts to the government within a at a time; that is, agencies should not and an opportunity for administrative reasonable time or if such lender, simultaneously refer a debt to both review under subpart F of this part, the contractor, or broker has been Treasury and Justice for collection. agency need not duplicate such notice suspended, debarred, or disqualified (h) When an agency learns that a and review opportunities before from participation in a program or bankruptcy petition has been filed with reporting the delinquent debt to credit activity by USDA or another Federal respect to a debtor, before proceeding reporting agencies. agency. Failure to pay a single with further collection action, the (d) Agencies will not disclose a substantial debt, or a number of agency will immediately request legal delinquent debt to a credit reporting outstanding debts (including disallowed advice from OGC concerning the impact agency if a debtor requests review under costs and overrun payments, but not of the Bankruptcy Code on any pending subpart F of this part until a final including sums owed to the government or contemplated collection activities. determination is made by a reviewing under the Internal Revenue Code or as Unless the agency is advised that the official that upholds the agency intent to specified in the appropriations automatic stay imposed at the time of disclose. provisions regarding outstanding tax filing pursuant to 11 U.S.C. 362 has debt in sections 745 and 746 of Division been lifted or is no longer in effect, in § 3.14 Suspension or revocation of E of the Consolidated Appropriations most cases collection activity against the eligibility for loans and loan guarantees, Act, 2016 (Pub. L. 114–113) and debtor must stop immediately. The licenses, permits, or privileges. successor provisions of law) owed to agency should take the following steps: (a) Agencies are not permitted to any Federal agency or instrumentality is (1) After requesting legal advice, a extend financial assistance in the form grounds for non-procurement proof of claim must be filed in most of a loan, loan guarantee, or loan suspension or debarment if the debt is cases with the bankruptcy court or the insurance to any person delinquent on uncontested and the debtor’s legal Trustee. Agencies will refer to the a nontax debt owed to a Federal agency, administrative remedies for review of provisions of 11 U.S.C. 106 relating to except as otherwise authorized by law the debt are exhausted. See 2 CFR the consequences on sovereign or upon waiver of application of this 180.800(c)(3). immunity of filing a proof of claim. section by the USDA Chief Financial (e) The failure of any surety to honor (2) If the agency is a secured creditor, Officer (CFO) or Deputy CFO. This its obligations in accordance with 31 it may request relief from the automatic prohibition does not apply to disaster U.S.C. 9305 will be reported to stay regarding its security, subject to the loans. Agencies may extend credit after Treasury. Treasury will forward to all provisions and requirements of 11 the delinquency has been resolved. The interested agencies notification that a U.S.C. 362. Secretary of the Treasury may exempt surety’s certificate of authority to do

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business with the government has been accept payments in regular installments debtor defaults on a repayment revoked. will obtain a legally enforceable written agreement and requests to enter into a (f) The suspension or revocation of agreement from the debtor that specifies new agreement, the agency may require licenses, permits, or privileges also may all terms of the arrangement and that payment of interest at a new rate that extend to USDA programs or activities contains a provision accelerating the reflects the current value of funds to the that are administered by the States on debt in the event of default. Treasury at the time the new agreement behalf of the government, to the extent (b) The size and frequency of is executed. Interest will not be that they affect the government’s ability installment payments will bear a compounded, that is, interest will not be to collect money or funds owed by reasonable relation to the size of the charged on interest, penalties, or debtors. Therefore, States that manage debt and the debtor’s ability to pay. If administrative costs required by this USDA activities, pursuant to approval possible, the installment payments will section. If, however, a debtor defaults on from the agencies, will ensure that be sufficient in size and frequency to a previous repayment agreement, appropriate steps are taken to safeguard liquidate the debt in 3 years or less. charges that accrued but were not against issuing licenses, permits, or (c) Security for deferred payments collected under the defaulted agreement privileges to debtors who fail to pay will be obtained in appropriate cases. will be added to the principal under the their debts to the government. Agencies may accept installment new repayment agreement. (g) In bankruptcy cases, before payments notwithstanding the refusal of (c) Agencies will assess advising the debtor of an agency’s the debtor to execute a written administrative costs incurred for intention to suspend or revoke licenses, agreement or to give security, at the processing and handling delinquent permits, or privileges, agencies may agency’s option. debts. The calculation of administrative request legal advice from OGC costs will be based on actual costs concerning the impact of the § 3.17 Interest, penalties, and incurred or upon estimated costs as administrative costs. Bankruptcy Code, particularly 11 U.S.C. determined by the assessing agency. 362 and 525, which may restrict such (a) Except as provided in paragraphs (d) Unless otherwise established in a action. (g) and (h) of this section, agencies will contract, repayment agreement, or by charge interest, penalties, and law, agencies will charge a penalty, as § 3.15 Liquidation of collateral. administrative costs on debts owed to specified in 31 U.S.C. 3717(e)(2), not to (a) In accordance with applicable laws the United States as specified in 31 exceed six percent a year on the amount and regulations, agencies may liquidate U.S.C. 3717. If not included in the due on a debt that is delinquent for security or collateral through a sale or agency’s demand notice, an agency will more than 90 days. This charge will a nonjudicial foreclosure and apply the mail or deliver a written notice to the accrue from the date of delinquency. proceeds to the applicable debt(s), if the debtor, at the debtor’s most recent (e) Agencies may increase an debtor fails to pay the debt(s) within a address available to the agency, ‘‘administrative debt’’ by the cost of reasonable time after demand and if explaining the agency’s requirements living adjustment in lieu of charging such action is in the interest of the concerning these charges except where interest and penalties under this United States. Collection from other these requirements are included in a section. ‘‘Administrative debt’’ includes, sources, including liquidation of contractual or repayment agreement. but is not limited to, a debt based on security or collateral, is not a These charges will continue to accrue fines, penalties, and overpayments, but prerequisite to requiring payment by a until the debt is paid in full or does not include a debt based on the surety, insurer, or guarantor unless such otherwise resolved through extension of government credit, such as action is expressly required by statute or compromise, termination, or waiver of those arising from loans and loan contract. the charges. guarantees. The cost of living (b) When an agency learns that a (b) Agencies will charge interest on adjustment is the percentage by which bankruptcy petition has been filed with debts owed the United States except as the Consumer Price Index for the month respect to a debtor, the agency may otherwise required by law and as of June of the calendar year preceding request legal advice from OGC provided in paragraph (i) of this section the adjustment exceeds the Consumer concerning the impact of the for debts owed to CCC and FSA. In Price Index for the month of June of the Bankruptcy Code, including, but not charging such interest, agencies will calendar year in which the debt was limited to, 11 U.S.C. 362, to determine apply the following provisions: determined or last adjusted. Increases to the applicability of the automatic stay (1) Interest will accrue from the date administrative debts will be computed and the procedures for obtaining relief of delinquency, or as otherwise annually. Agencies may use this from such stay prior to proceeding provided by law. alternative only when there is a under paragraph (a) of this section. (2) Unless otherwise established in a legitimate reason to do so, such as when contract, repayment agreement, or by calculating interest and penalties on a § 3.16 Collection in installments. law, the rate of interest charged will be debt would be extremely difficult (a) Whenever feasible, agencies will the rate established annually by the because of the age of the debt. collect the total amount of a debt in one Secretary of the Treasury in accordance (f) When a debt is paid in partial or lump sum. If a debtor is financially with 31 U.S.C. 3717. Pursuant to 31 installment payments, amounts received unable to pay a debt in one lump sum, U.S.C. 3717, an agency may charge a by the agency will be applied first to agencies may accept payment in regular higher rate of interest if it reasonably outstanding penalties, second to installments. Agencies will obtain determines that a higher rate is administrative charges (when financial statements from debtors (or a necessary to protect the rights of the applicable), third to interest, and last to similar statement from foreign debtors) United States. The agency must principal, except as otherwise required who represent that they are unable to document the reason(s) for its by law. pay in one lump sum and determination that the higher rate is (g) Agencies will waive the collection independently verify such necessary. of interest and administrative charges representations whenever possible (see (3) The rate of interest, as initially imposed pursuant to this section (that 31 CFR 902.2(g) for methods of charged, will remain fixed for the is, this does not apply to interest or verification). Agencies that agree to duration of the indebtedness. When a administrative penalties determined by

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an applicable agreement or instrument (4) The provisions of this section do owed to CCC, to the maximum extent such as a loan contract) on the portion not apply to CCC foreign debt. practicable. In addition to the bases for of the debt that is paid within 30 days the termination of collection activities after the date on which interest began to § 3.18 Use and disclosure of mailing specified in 31 CFR 903.3, CCC may addresses. accrue. Agencies may extend this 30- terminate collection activities when the day period on a case-by-case basis. In (a) When attempting to locate a debtor approving official with the authority to addition, agencies may waive interest, in order to collect or compromise a debt terminate collection activities with penalties, and administrative costs under this part or 31 CFR parts 902 regard to the debt has determined that charged under this section, in whole or through 904 or other authority, agencies such action is in the interest of CCC. in part, without regard to the amount of may send a request to Treasury to obtain the debt, either under the criteria a debtor’s mailing address from the § 3.21 Referrals of debts to Justice. specified in the Federal standards for records of the Internal Revenue Service An agency will promptly refer to the compromise of debts (31 CFR part (IRS). Justice for litigation debts on which 902), or if the agency determines that (b) Agencies are authorized to use aggressive collection activity has been collection of these charges is against mailing addresses obtained under taken in accordance with this part, and equity and good conscience or is not in paragraph (a) of this section to enforce that cannot be compromised by the the interest of the United States. collection of a delinquent debt and may agency or on which collection activity (h) Agencies are authorized to impose disclose such mailing addresses to other cannot be suspended or terminated in interest and related charges on debts not agencies and to collection agencies for accordance with 31 CFR parts 902 and subject to 31 U.S.C. 3717, in accordance collection purposes. 903. Agencies will follow the with common law. Agencies will § 3.19 Standards for the compromise of procedures specified in 31 CFR part 904 consult OGC before imposing interest claims and debt settlement. in making such referrals. Agencies will and related charges under common law (a) An agency will follow the consult with OGC on all debts which are for any debt. standards specified in 31 CFR part 902 to be collected in foreign jurisdictions to (i)(1) For debts resulting from CCC for the compromise of debts pursuant to determine how and if a referral to loans made in accordance with chapter 31 U.S.C. 3711 arising out of the Justice will take place. XIV of this title: activities of, or referred or transferred § 3.22 CCC withholding of payment. (i) Late payment interest will begin to for collection services to, that agency, accrue from the date on which a claim except where otherwise authorized or (a) CCC may temporarily withhold is established. In addition, an additional required by law. issuance of payment of some or all charge of 3 percent per year will be (b) For FSA FLP debts, the first amounts to a debtor under one or more assessed on a portion of a debt that instance of debt cancellation is exempt contracts or programs. Withholding of a remains unpaid 60 days after the date from the monetary limits established in payment prior to the completion of an on which a claim was established. Such 31 CFR 902.1. applicable offset procedure may be rate will be assessed retroactively from (c) For CCC debts, CCC will, in made from amounts payable to a debtor the date of claim establishment and exercising its authority pursuant to by CCC to ensure that the interests of apply on a daily basis and will continue section 4 of the CCC Charter Act (15 CCC and the United States will be to be used until the delinquent debt has U.S.C. 714b) to make final and protected as provided in this section. been paid. conclusive settlement and adjustment of (b) A payment may be withheld to (ii) Penalty charges, administrative any CCC claims, follow the standards protect the interests of CCC or the costs and interest will continue to specified in 31 CFR 902.2, 902.3, 902.4, United States if CCC determines that: accrue if a debtor makes a request for 902.6, and 902.7, for the compromise of (1) There has been a serious breach of appeal as provided by any agency or debts owed to CCC, to the maximum contract or violation of program USDA-wide appeal regulation extent practicable. In addition to the requirements and the withholding Collection by offset will continue during bases for the compromise of debts action is considered necessary to protect the appeal process unless prohibited by specified in 31 CFR 902.2, CCC may the financial interests of CCC; statute. If the debtor ultimately wins an compromise a debt when the approving (2) There is substantial evidence of appeal and the debt is found to be official with the authority to violations of criminal or civil fraud laws incorrect, CCC will credit the debtor’s compromise the debt has determined and criminal prosecution or civil fraud debt for the amount of penalty charges, that such action is in the interest of action is of primary importance to administrative costs, and interest that CCC. program operations of CCC; has accrued from the date such charges (3) Prior experience with the debtor were initiated on the portion § 3.20 Standards for suspending or indicates that collection will be difficult determined in the appeal to not be due. terminating collection activities. if amounts payable to the debtor are not (2) Late payment interest provisions (a) An agency will follow the withheld; of this section do not apply to FSA and standards specified in 31 CFR part 903 (4) There is doubt that the debtor will CCC debts owed by Federal agencies for the suspension or termination of be financially able to pay a judgment on and State and local governments. collection activity pursuant to 31 U.S.C. the claim of CCC; Interest on debts owed by such entities 3711, except where otherwise (5) The facts available to CCC are will be assessed at the rate of interest authorized or required by law. insufficient to determine the amount to charged by the U.S. Treasury for funds (b) CCC will, in exercising its be offset or the proper payee; borrowed by CCC on the day the debt authority pursuant to section 4 of the (6) A judgement on a claim of CCC became delinquent. CCC Charter Act (15 U.S.C. 714b) to has been obtained; or (3) Late payment interest, penalty make final and conclusive settlement (7) Such action has been requested by charges, and administrative costs may and adjustment of any CCC claims, Justice. be waived by FSA or CCC in full or in follow the standards specified in 31 CFR part, if it is determined by the agency 903.2, 903.3, 903.4, and 903.5(c) and (d), § 3.23 CCC assignment of payment. that such action is in the Government’s for the suspension or termination of (a) No amounts payable to a debtor by interest. collection activities with regard to debts CCC will be paid to an assignee of the

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debt until amounts owed by the debtor (c) In cases where a debtor has more Secretary of the Treasury that have been collected and applied to the than one FSA FLP loan that has been exemption for a certain class of debt is debt. referred to cross-servicing and Treasury in the interest of the United States. (b) A payment that is assigned as accepts an agreement to compromise or Federal agencies may request that the specified in part 1404 of this title by adjust one loan, or several loans, but not Secretary of the Treasury exempt execution of any CCC assignment form all of the debt, cancellation of any loan specific classes of debts. Any such will be subject to offset for any debt balances remaining on the compromised request by an agency must be sent to the owed to CCC, or any USDA agency, or or adjusted debt will not be processed Fiscal Assistant Secretary of the any other Federal agency, any IRS for the debtor until: Treasury by the USDA CFO. notice of levy, or any judgment in favor (1) All payments have been received of the United States, without regard to as agreed; and (7) Is foreign debt; or the date notice of assignment was (2) All loans referred to the cross- (8) Is FSA FLP debt in which case the accepted by CCC. servicing program for that debtor have delinquent loan servicing procedures (c) Except as provided in 7 CFR been returned to FSA, with or without and appeals process required by the 1404.6(b), any indebtedness owed by payment agreements. ConAct will apply, including the the assignor to CCC will be offset from § 3.31 Mandatory referral for cross- deferral for cross-servicing until all any payment which is owed by CCC if security has been liquidated, and FSA such indebtedness was entered on the servicing. (a) Agencies will transfer to Treasury concludes its review of any pending debt record of the applicable USDA debt settlement application from the office prior to the date of the filing any legally enforceable nontax debt in debtor. Forms CCC–251 (Notice of Assignment) excess of $25, or combination of debts and CCC–252 (Instrument of less than $25 that exceeds $25 (in the (c) A debt is considered 180 days Assignment). case of a debtor whose taxpayer delinquent for purposes of this section identification number (TIN) is unknown if it is 180 days past due and is legally Subpart C—Referral of Debts to the applicable threshold is $100), that enforceable. A debt is past due if it has Treasury has or have been delinquent for a period not been paid by the date specified in of 180 days in accordance with 31 CFR the agency’s initial written demand for § 3.30 General requirements. 285.12 so that Treasury may take (a) Agencies are required by law to payment or applicable agreement or appropriate action on behalf of the instrument (including a post- transfer delinquent, nontax, legally creditor agency to collect or enforceable debts to Treasury for delinquency payment agreement) unless compromise, or to suspend or terminate other satisfactory payment arrangements collection through cross-servicing and collection, of the debt, including use of have been made. A debt is legally through centralized administrative debt collection centers and private enforceable if there has been a final offset with the exception of foreign debt collection contractors to collect the debt agency determination that the debt, in that is exempt from cross-servicing per or terminate collection action. Agencies the Debt Collection Improvement Act of that transfer delinquent debts to Fiscal the amount stated, is due and there are 1996. Additionally, USDA will transfer Service for the purposes of debt no legal bars to collection action. debts to Treasury for collection through collection and that rely on Fiscal Where, for example, a debt is the subject administrative wage garnishment. Service to submit the transferred debts of a pending administrative review Agencies need not make duplicate for administrative offset on the agency’s process required by law or regulation referrals to Treasury for all these behalf must transfer the debts to Fiscal and collection action during the review purposes; a debt may be referred Service no later than 120 days after the process is prohibited, the debt is not simultaneously for purposes of debts become delinquent in order to considered legally enforceable for collection by cross-servicing, satisfy the 120–day notice requirement purposes of mandatory transfer to centralized administrative offset, and for purposes of administrative offset in Treasury and is not to be transferred administrative wage garnishment where accordance with 31 CFR 285.12(c)(1). even if the debt is more than 180 days applicable. However, in some instances For accounting and reporting purposes, past due. When a final agency a debt exempt from collection via cross- the debt remains on the books and determination is made after an servicing may be subject to collection by records of the agency which transferred administrative appeal or review process centralized administrative offset so the debt. (including administrative review under simultaneous referrals are not always (b) The requirement of paragraph (a) subpart F of this part), the creditor the norm. This subpart specifies the of this section does not apply to any agency must transfer such debt to rules applicable to the transfer of debts debt that: Treasury, if more than 180 days to Treasury for collection by cross- (1) Is in litigation or foreclosure (see delinquent, within 30 days after the date servicing. Rules for transfer to Treasury 31 CFR 285.12 (d)(2) for definition); of the final decision. for centralized administrative offset are (2) Will be disposed of under an specified in subpart D of this part, and approved asset sale program (see 31 CFR § 3.32 Discretionary referral for cross- for administrative wage garnishment in 285.12(d)(3)(i) for definition); servicing. subpart E of this part. (3) Has been referred to a private (b) When debts are referred or collection contractor for a period of time Agencies will consider referring transferred to Treasury, or Treasury- acceptable to Treasury; legally enforceable nontax debts that are designated debt collection centers under (4) Is at a debt collection center for a less than 180 days delinquent to the authority of 31 U.S.C. 3711(g), period of time acceptable to Treasury; Treasury or to Treasury-designated Treasury will service, collect, or (5) Will be collected under ‘‘debt collection centers’’ in accordance compromise the debts, or Treasury will administrative offset procedures within with 31 CFR 285.12 to accomplish suspend or terminate the collection 3 years after the debt first became efficient, cost effective debt collection if action, in accordance with the statutory delinquent; no USDA payments will be available to requirements and authorities applicable (6) Is exempt from this requirement collect the debt through administrative to the collection of such debts. based on a determination by the offset under § 3.43.

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§ 3.33 Required certification. (d) In bankruptcy cases, agencies may paid on an installment basis, notice and Agencies referring delinquent debts to request legal advice from OGC opportunity to review under this part Treasury for collection via cross- concerning the impact of the may only be provided once for the life servicing must certify, in writing, that: Bankruptcy Code, particularly 11 U.S.C. of the loan upon the occurrence of the (a) The debts being transferred are 106, 362, and 553 on pending or first delinquent installment. valid and legally enforceable; contemplated collections by offset. Subsequently, if an agency elects this (b) There are no legal bars to option, credit reporting agencies may be § 3.41 Procedures for notification of intent furnished periodically with updates as collection; and to collect by administrative offset. (c) The agency has complied with all to the current or delinquent status of the prerequisites to a particular collection (a) Prior to initiation of collection by loan account and the borrower may action under the laws, regulations or administrative offset, a creditor agency receive notice of referral to TOP for policies applicable to the agency, unless must: delinquent installments without further the agency and Treasury agree that (1) Send the debtor a written Notice opportunity for review. Any interest Treasury will do so on behalf of the of Intent to Collect by Administrative accrued or any installments coming due agency. Offset, by mail or hand-delivery, of the after the offset is initiated also would type and amount of the debt, the not require a new notice and § 3.34 Fees. intention of the agency to use non- opportunity to review. Federal agencies operating Treasury- centralized administrative offset (which (c) The Notice of Intent to Collect by designated debt collection centers are includes a USDA administrative offset) Administrative Offset will be included authorized to charge a fee for services to collect the debt 30 days after the date as part of a demand letter issued under rendered regarding referred or of the Notice, the name of the Federal § 3.11 to advise the debtor of all debt transferred debts. The fee may be paid agency or USDA agency from which the collection possibilities that the agency out of amounts collected and may be creditor agency wishes to collect in the may employ. added to the debt as an administrative case of a non-centralized administrative § 3.42 Debtor rights to inspect or copy cost. offset, the intent to refer the debt to Treasury for collection through records, submit repayment proposals, or Subpart D—Administrative Offset centralized administrative offset request administrative review. (including possible offset of tax refunds) (a) A debtor who intends to inspect or § 3.40 Scope. 60 days after the date of the Notice if the copy agency or USDA records with (a) This subpart specifies the debt is not satisfied by offset within respect to the debt must notify the procedures to be used by agencies in USDA or by agreement with another creditor agency in writing within 30 collecting debts by administrative offset. Federal agency, and an explanation of days of the date of the Notice of Intent (b) This subpart does not apply to: the debtor’s rights under 31 U.S.C. 3716; to Collect by Administrative Offset. In (1) Debts arising under the Social and response, the agency must notify the Security Act, except as provided in 42 (2) Give the debtor the opportunity: debtor of the location, time, and any U.S.C. 404; (i) To inspect and copy agency other conditions, consistent with part 1, (2) Payments made under the Social records related to the debt; subpart A, of this title, for inspecting Security Act, except as provided for in (ii) For a review within the agency of and copying, and that the debtor may be 31 U.S.C. 3716(c) (see 31 CFR 285.4, the determination of indebtedness in liable for reasonable copying expenses. Federal Benefit Offset); accordance with subpart F of this part; A decision by the agency under this (3) Debts arising under, or payments and paragraph will not be subject to review made under, the Internal Revenue Code (iii) To make a written agreement to under subpart F of this part or by NAD (except for offset of tax refunds) or the repay the debt. under part 11 of this title. tariff laws of the United States; (b) The procedures specified in (b) The debtor may, in response to the (4) Offsets against Federal salaries paragraph (a) of this section are not Notice of Intent to Collect by (such offsets are covered by subpart F of required when: Administrative Offset, propose to the this part); (1) The offset is in the nature of a creditor agency a written agreement to (5) Offsets under 31 U.S.C. 3728 recoupment; repay the debt as an alternative to against a judgment obtained by a debtor (2) The debt arises under a contract administrative offset. Any debtor who against the United States; subject to the Contracts Disputes Act; wishes to do this must submit a written (6) Offsets or recoupments under (3) In the case of a non-centralized proposal for repayment of the debt, common law, State law, or Federal laws administrative offset, the agency first which must be received by the creditor specifically prohibiting offsets or learns of the existence of the amount agency within 30 days of the date of the recoupments of particular types of owed by the debtor when there is Notice of Intent to Collect by debts; insufficient time before payment would Administrative Offset or 15 days after (7) Offsets in the course of judicial be made to the debtor/payee to allow for the date of a decision adverse to the proceedings, including bankruptcy; prior notice and an opportunity for debtor under subpart F of this part. In (8) Intracontractual offsets to satisfy review. When prior notice and an response, the creditor agency must contract debts taken by a contracting opportunity for review are omitted, the notify the debtor in writing whether the officer under the Contract Disputes Act, agency will give the debtor such notice proposed agreement is acceptable. In 41 U.S.C. 7101–7109; or and an opportunity for review as soon exercising its discretion, the creditor (9) Foreign Debt. as practicable and will promptly refund agency must balance the government’s (c) Unless otherwise provided for by any money ultimately found not to have interest in collecting the debt against contract or law, debts or payments that been owed to the government; or fairness to the debtor. A decision by the are not subject to administrative offset (4) The agency previously has given a agency under this paragraph will not be under 31 U.S.C. 3716 may be collected debtor any of the notice and review subject to review under subpart F of this by administrative offset under the opportunities required under this part, part or by NAD under part 11 of this common law or other applicable with respect to a particular debt (see, for title. For proposed agreements to pay statutory authority. example, § 3.11). With respect to loans delinquent amounts owed on FSA FLP

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loans, the proposed payments in the (d) Payment authorizing agencies will decision upholding the agency decision agreement must cure the delinquency comply with offset requests by creditor to offset the debt if the debt is more than before the next loan installment is due, agencies to collect debts owed to the 120 days delinquent. or within 90 days, whichever is sooner. United States, unless the offset would (2) For FSA FLP and Rural (c) A debtor must request an not be in the interest of the United Development debt: administrative review of the debt under States with respect to the program of the (i) The delinquent loan servicing subpart F of this part within 30 days of payment authorizing agency or would procedures and timeframes required by the date of the Notice of Intent to Collect otherwise be contrary to law. the ConAct will be followed; and. by Administrative Offset for purposes of Appropriate use should be made of the (ii) Offsets will not occur during any a proposed collection by non- cooperative efforts of other agencies in moratorium required by the ConAct. centralized administrative offset and effecting collection by administrative (b) After the notice and review within 60 days of the date of the Notice offset. opportunity requirements of § 3.41 are of Intent to Collect by Administrative (e) When collecting multiple debts by met, and administrative review under Offset for purposes of a proposed non-centralized administrative offset, subpart F of this part is not sought or collection by referral to Treasury for agencies will apply the recovered is unsuccessful on the part of the debtor, centralized offset against other Federal amounts to those debts in accordance an agency may refer a debt that is less payments that would include tax with the interests of the United States, than 120 days delinquent. (c) Agencies will refer debts to refunds. as determined by the facts and circumstances of the particular case, Treasury for collection in accordance § 3.43 Non-centralized administrative particularly the applicable statute of with Treasury procedures specified in offset. limitations. 31 CFR 285.5. (a) In cooperation with the Federal (f) Debts arising from the shipment of (d) The agencies will ensure that: agency certifying or authorizing commodities procured by CCC are (1) The names and TINs of debtors payments to the debtor, a creditor subject to the following: who owe debts referred to Treasury agency may make a request directly to (1) Debts due CCC from a carrier for under this section will be compared to a payment authorizing agency to offset overcharges will be offset against the names and TINs on payments to be a payment due a debtor to collect a amounts due to the carrier under freight made by Federal disbursing officials. delinquent debt from, for example, a bills involving shipments if: Federal disbursing officials include Federal employee’s lump sum payment (i) The carrier, without reasonable disbursing officials of Treasury, the upon leaving government service in justification, has declined payment of Department of Defense, the United order to pay an unpaid advance. Unless the debt or has failed to pay the debt States Postal Service, other government prohibited by law, when centralized after being given a reasonable corporations, and disbursing officials of administrative offset is not available or opportunity to make payment; and the United States designated by appropriate, past due, legally (ii) The periods of limitation as Treasury. When the name and TIN of a enforceable nontax delinquent debts specified in 49 U.S.C. 11705(f) or 49 debtor match the name and TIN of a may be collected through non- U.S.C. 14705(f) have not expired; payee and all other requirements for centralized administrative offset. (2) Debts due to CCC from a carrier for offset have been met, the payment authorizing agency must offset a (b) A non-centralized administrative loss or damage will be offset against payment to satisfy the debt. offset may start 31 days after the date of amounts due to the carrier under freight bills involving shipments if: (2) Any USDA official serving as a the Notice of Intent to Collect by Federal disbursing official for purposes Administrative Offset, any time after the (i) Timely demand for payment was made on the carrier; of effecting centralized administrative final determination in an administrative offset under this section, or Fiscal review conducted under subpart F of (ii) The carrier has declined payment of the debt without reasonable Service on behalf of the disbursing this part upholds the creditor agency’s official, must notify a debtor or payee in decision to offset, or any time after the justification or has ignored the debt; and (iii) The periods of limitation as writing that an offset has occurred to creditor agency notifies the debtor that specified in 49 U.S.C. 11706(e) or 49 satisfy, in part or in full, a past due, its repayment proposal submitted under U.S.C. 14706(e) have not expired; and legally enforceable delinquent debt. The § 3.42(b) is not acceptable if the 30-day (3) Any overcharge, loss, or damage notice must include the information period for the debtor to request review debt due to CCC on which the specified in paragraph (d)(4) of this of the Notice has expired, unless the applicable period of limitation has section. creditor agency makes a determination expired may be offset against any (3) As described in 31 CFR 285.5(g)(1) under § 3.41(b)(3) that immediate action amounts owed by CCC to the carrier and (2), any USDA official serving as a to effectuate the offset is necessary. which are subject to limitation. Federal disbursing official for purposes (c) A payment authorizing agency of centralized administrative offset may conduct a non-centralized § 3.44 Centralized administrative offset. under this section, or Fiscal Service on administrative offset only after (a)(1) Except as provided in paragraph behalf of the disbursing official, will certification by a creditor agency that: (a)(2) of this section, after the notice and furnish a warning notice to a payee or (1) The debtor has been provided review opportunity requirements of debtor prior to beginning offset of notice and opportunity for review as § 3.41 are met, an agency will refer debts recurring payments. Such warning specified in § 3.41; and which are over 120 days delinquent to notice will include the information (2) The payment authorizing agency Fiscal Service for collection through specified in paragraph (d)(4) of this has received written certification from centralized administrative TOP 61 days section. the creditor agency that the debtor owes after the date of the Notice of Intent to (4) The notice will include a the past due, legally enforceable Collect by Administrative Offset description of the type and amount of delinquent debt in the amount stated, provided in accordance with § 3.41. If the payment from which the offset was and that the creditor agency has fully the debtor requests review under taken, the amount of offset that was complied with its regulations subpart F of this part, referral of the debt taken, the identity of the creditor agency concerning administrative offset. must occur within 30 days of the final requesting the offset, and a contact point

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within the creditor agency who will Subpart E—Administrative Wage but does not include an agency of the respond to questions regarding the Garnishment Federal government. offset. Garnishment means the process of § 3.50 Purpose. (5) The priorities for collecting withholding amounts from an multiple payments owed by a payee or This subpart provides USDA employee’s disposable pay and the debtor will be those specified in 31 CFR procedures for use of administrative paying of those amounts to a creditor in 285.5(f)(3). wage garnishment to garnish a debtor’s satisfaction of a withholding order. disposable pay to satisfy delinquent Withholding order means any order § 3.45 USDA payment authorizing agency nontax debt owed to USDA creditor for withholding or garnishment of pay offset of pro rata share of payments due agencies. issued by an agency, or judicial or entity in which debtor participates. administrative body. For purposes of § 3.51 Scope. (a) A USDA payment authorizing this section, the terms ‘‘wage agency, to satisfy either a non- (a) This subpart applies to any agency garnishment order’’ and ‘‘garnishment centralized or centralized administrative that administers a program that gives order’’ have the same meaning as offset under §§ 3.43 and 3.44, may rise to a delinquent nontax debt owed ‘‘withholding order.’’ offset: to the United States and to any agency that pursues recovery of such debt. § 3.53 Procedures. (1) A debtor’s pro rata share of USDA (b) This subpart will apply (a) USDA has determined to pursue payments due any entity in which the notwithstanding any provision of State administrative wage garnishment of debtor participates, either directly or law. USDA debtors by referral of nontax indirectly, as determined by the creditor (c) Nothing in this subpart precludes legally enforceable debts to Treasury for agency or the payment authorizing the compromise of a debt or the issuance of garnishment orders by agency or: suspension or termination of collection Treasury or its contractors. (2) USDA payments due any entity action in accordance with the (b) As specified in § 3.11, agencies that the debtor has established, or provisions of this part or other must notify debtors of their intent to reorganized, transferred ownership of, applicable law. pursue garnishment of their disposable or changed in some other manner the (d) The receipt of payments pursuant pay through referral of the debt to operation of, for the purpose of avoiding to this subpart does not preclude an Treasury for issuance of an payment on the claim or debt, as agency from pursuing other debt administrative wage garnishment order determined by the creditor agency or the collection remedies under this part. An and provide debtors with the payment authorizing agency. agency may pursue such debt collection opportunity for review of the existence (b) Prior to exercising the authority of remedies separately or in conjunction of the debt under subpart F of this part this section to offset any portion of a with administrative wage garnishment. within 60 days of the date of the payment due an entity, the creditor (e) This subpart does not apply to the demand letter. agency must have provided notice to collection of delinquent nontax debt (c) Upon expiration of the 60-day that entity in accordance with § 3.41 of owed to the United States from the period for review, or upon completion its intent to offset payments to the entity wages of Federal employees from their of a review under subpart F of this part in satisfaction of the debt of an Federal employment. Federal pay is that upholds the agency’s determination individual debtor participating in that subject to the salary offset procedures of of the debt, USDA will transfer the debt entity. subpart G of this part. for collection through administrative (f) Nothing in this subpart requires wage garnishment as well as other § 3.46 Offset against tax refunds. agencies to duplicate notices or means through cross-servicing or USDA will take action to effect administrative proceedings required by centralized administrative offset. administrative offset against tax refunds contract or other laws or regulations, or (d) If Treasury elects to pursue due to debtors under 26 U.S.C. 6402 in other provisions of this part. collection through administrative wage accordance with the provisions of 31 (g) This subpart does not apply to garnishment, Treasury, or its contractor, U.S.C. 3720A through referral for foreign debt. will notify the debtor of its intent to centralized administrative offset under initiate garnishment proceedings and § 3.44. § 3.52 Definitions. provide the debtor with the opportunity As used in this subpart the following to inspect and copy agency records § 3.47 Offset against amounts payable definitions will apply: related to the debt, enter into a from Civil Service Retirement and Disability Disposable pay means that part of the repayment agreement, or request a Fund. debtor’s compensation (including, but hearing as to the existence or amount of Upon providing the Office of not limited to, salary, bonuses, the debt or the terms of the proposed Personnel Management (OPM) written commissions, and vacation pay) from an repayment schedule under the proposed certification that a debtor has been employer remaining after the deduction garnishment order, in accordance with afforded the procedures provided in of health insurance premiums and any 31 CFR 285.11. § 3.41, creditor agencies may request amounts required by law to be withheld. (e) If the debtor requests a hearing at OPM to offset a debtor’s anticipated or For purposes of this section, ‘‘amounts any time, Treasury will forward the future benefit payments under the Civil required by law to be withheld’’ include request to the USDA creditor agency to Service Retirement and Disability Fund amounts for deductions such as social which the debt is owed, and the creditor (Fund) in accordance with regulations security taxes and withholding taxes, agency will contact the Office of the codified at 5 CFR 831.1801 through but do not include any amount withheld CFO (OCFO) for selection of a hearing 831.1808. Upon receipt of such a pursuant to a court order. official. The issuance of proposed request, OPM will identify and ‘‘flag’’ a Employer means a person or entity garnishment orders by Treasury will not debtor’s account in anticipation of the that employs the services of others and be subject to appeal to NAD under part time when the debtor requests, or that pays their wages or salaries. The 11 of this title. Hearings will be becomes eligible to receive, payments term employer includes, but is not conducted in accordance with 31 CFR from the Fund. limited to, State and local governments, 285.11(f).

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(f) OCFO will provide a copy of the in the case of a Notice of Intent to 10 days after the request for review is hearing official’s final decision to Collect by Administrative Offset that received. Treasury for implementation with includes referral to Treasury for offset (g) The hearing procedure will consist respect to the subject garnishment order. against other Federal payments of: including tax refunds and 30 days in the (1) Hearings will be as informal as Subpart F—Administrative Reviews for case of all other notices. possible and will be conducted by a Administrative Offset, Administrative (b) In response, the creditor agency reviewing officer in a fair and Wage Garnishment, and Disclosure to must notify the debtor in writing expeditious manner. The reviewing Credit Reporting Agencies whether the review will be by officer need not use the formal rules of documentary review or by hearing. An evidence with regard to the § 3.60 Applicability. oral hearing is not necessary with admissibility of evidence or the use of (a) This section establishes respect to debt collection systems in evidence once admitted. However, consolidated administrative review which a determination of indebtedness clearly irrelevant material should not be procedures for debts subject to rarely involves issues of credibility or admitted, whether or not any party administrative offset, administrative veracity and the agency has determined objects. Any party to the hearing may wage garnishment, and disclosure to that review of the written record is offer exhibits, such as copies of credit reporting agencies, under ordinarily an adequate means to correct financial records, telephone subparts D and E of this part. A hearing prior mistakes. The agency will provide memoranda, or agreements, provided or review under this section will satisfy the debtor with a reasonable the opposing party is notified at least 5 the required opportunity for opportunity for an oral hearing when days before the hearing. administrative review by the agency of the debtor requests reconsideration of (2) The agency will have the burden the determination of a debt for both the debt and the agency determines that of going forward to prove the existence administrative offset and administrative the question of the indebtedness cannot or amount of the debt. wage garnishment that is required be resolved by review of the (i) Thereafter, if the debtor disputes before transfer to Treasury for collection documentary evidence, for example, the existence or amount of the debt, the or collection by the agency through non- when the validity of the debt turns on debtor must prove by a preponderance centralized administrative offset. an issue of credibility or veracity. If the of the evidence that no debt exists or (b) For debt collection proceedings debtor requests a hearing, and the that the amount of the debt is incorrect. initiated by FSA, CCC, FCIC, the Rural creditor agency decides to conduct a (ii) In addition, the debtor may Housing Service, the Rural Business- documentary review, the agency must present evidence that repayment would Cooperative Service, the Risk notify the debtor of the reason why a cause a financial hardship to the debtor Management Agency, the Natural hearing will not be granted. The agency or that collection of the debt may not be Resources Conservation Service, Rural must also advise the debtor of the pursued due to operation of law. Development, and the Rural Utilities procedures to be used in reviewing the (3) Witnesses must testify under oath Service (but not for programs authorized documentary record, or of the date, or affirmation. by the Rural Electrification Act of 1936 location and procedures to be used if (4) Debtors may represent themselves or the Rural Telephone Bank Act, 7 review is by a hearing. or may be represented at their own U.S.C. 901–950cc–2), part 11 of this title (c) An oral hearing may, at the expense by an attorney or other person. will be applicable and not the debtor’s option, be conducted either in- (5) The substance of all significant provisions of this subpart. person or by telephone conference. All matters discussed at the hearing must be travel expenses incurred by the debtor recorded. No official record or transcript § 3.61 Presiding employee. in connection with an in-person hearing of the hearing need be created, but if a An agency reviewing officer may be will be borne by the debtor. All debtor requested that a transcript be an agency employee, or the agency may telephonic charges incurred during the made, it will be at the debtor’s expense. provide for reviews to be done by hearing will be the responsibility of the (h) In the absence of good cause another agency through an interagency agency. shown, a debtor who fails to appear at agreement. No agency employee may act (d) After the debtor requests a hearing, a hearing scheduled pursuant to as a reviewing officer for the the hearing official will notify the paragraph (d) of this section will be consideration of collection by debtor of: deemed as not having timely filed a administrative offset in a matter for (1) The date and time of a telephonic request for a hearing. which the employee was a contracting hearing; (i) The determination will be made: officer or a debt management officer. (2) The date, time, and location of an (1) Within no more than 30 days after in-person oral hearing; or the hearing or receipt of documentation § 3.62 Procedures. (3) The deadline for the submission of for the documentary review, the (a) A debtor who receives a Notice of evidence for a documentary review. reviewing officer will issue a written Intent to Collect by Administrative (e) Unless otherwise arranged by decision to the debtor and the agency, Offset, Notice of Disclosure to Credit mutual agreement between the debtor including the supporting rationale for Reporting Agencies, or Notice of Intent and the agency, evidenced in writing, the decision. The deadline for issuance to Collect by Administrative Wage any documentary review or hearing will of the decision may be extended by the Garnishment, or more than one of the be conducted not less than 10 days and reviewing officer for good cause for no above simultaneously, may request no more than 45 days after receipt of the more than 30 days. administrative review of the agency’s request for review. (2) The written decision will include: determination that the debt exists and (f) Unless otherwise arranged by (i) A summary of the facts presented; the amount of the debt. Any debtor who mutual agreement between the debtor (ii) The hearing official’s findings, wishes to do this must submit a written and the agency, evidenced in writing, a analysis and conclusions; and explanation of why the debtor disagrees documentary review or hearing will be (iii) Resolution of any significant and requests review. The request must based on agency records plus other procedural matter which was in dispute be received by the creditor agency relevant documentary evidence which before or during the hearing or within 60 days of the date of the notice may be submitted by the debtor within documentary review.

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(j) The reviewing officer’s decision notice before deductions begin and the Salary offset means a reduction of a constitutes final agency action for opportunity to petition for a hearing and debt by offset(s) from the disposable pay purposes of judicial review under the to receive a written decision if a hearing of an employee without his or her Administrative Procedure Act (5 U.S.C. is granted. The rights provided by this consent. 701–703) as to the following issues: section do not extend to: Waiver means the cancellation, (1) All issues of fact relating to the (1) Any adjustment to pay arising out remission, forgiveness, or non-recovery basis of the debt (including the of an employee’s election of coverage or of a debt owed by an employee to an existence of the debt and the propriety a change in coverage under a Federal agency as permitted or required by 5 of administrative offset), in cases where benefits program requiring periodic U.S.C. 5584, 10 U.S.C. 2774, or 32 the debtor previously had not been deductions from pay, if the amount to U.S.C. 716, 5 U.S.C. 8346(b), or any afforded due process; and be recovered was accumulated over four other law. (2) The existence of the debt and the pay periods or less; propriety of administrative offset, in (2) A routine intra-agency adjustment § 3.72 Coordinating offset with another Federal agency. cases where the debtor previously had of pay that is made to correct an been afforded due process as to issues overpayment of pay attributable to (a) When USDA is owed a debt by an of fact relating to the basis of the debt. clerical or administrative errors or employee of another agency, the other (k) The reviewing officer will delays in processing pay documents, if agency will not initiate the requested promptly distribute copies of the the overpayment occurred within the offset until USDA provides the agency decision to the USDA CFO, the agency four pay periods preceding the with a written certification that the CFO (if any), the agency debt adjustment and, at the time of such debtor owes USDA a debt (including the management officer, the debtor, and the adjustment, or as soon thereafter as amount and basis of the debt and the debtor’s representative, if any. practical, the individual is provided due date of the payment) and that USDA written notice of the nature and the has complied with these regulations. Subpart G—Federal Salary Offset amount of the adjustment and point of (b) USDA may use salary offset contact for contesting such adjustment; against one of its employees who is Authority: 5 U.S.C. 5514; and 5 CFR part or indebted to another agency, if requested 550, subpart K. (3) Any adjustment to collect a debt to do so by that agency. Such a request must be accompanied by; § 3.70 Scope. amounting to $50 or less, if, at the time of such adjustment, or as soon thereafter (1) A certification by the requesting (a) The provisions of this subpart as practical, the individual is provided agency that the person owes the debt specify USDA procedures for the written notice of the nature and the (including the amount and basis of the collection of a Federal employee’s pay amount of the adjustment and a point of debt and the due date of the payment). by salary offset to satisfy certain valid contact for contesting such adjustment. (2) That the agency has complied with and past due debts owed the (f) These regulations do not preclude its regulations required by 5 U.S.C. 5514 government. an employee from: and 5 CFR part 550, subpart K. (b) This subpart applies to: (1) Requesting waiver of an erroneous (c) Debts may be referred to Treasury (1) Current USDA employees and overpayment under 5 U.S.C. 5584, 10 under § 3.44 for collection through employees of other agencies who owe U.S.C. 2774, or 32 U.S.C. 716; salary offset in accordance with 31 CFR debts to USDA; and (2) Requesting waiver of any other 285.7. (2) Current USDA employees who type of debt, if waiver is available by owe debts to other agencies. law; or § 3.73 Determination of indebtedness. (c) This subpart does not apply to (3) Questioning the amount or validity (a) In determining that an employee is debts owed by FSA county executive of a debt, in the manner prescribed by indebted to USDA and that 31 CFR parts directors or non-Federal county office this part. 900 through 904 have been satisfied and employees. For debts owed by FSA (g) Nothing in these regulations that salary offset is appropriate, USDA county executive directors or non- precludes the compromise, suspension will review the debt to make sure that Federal county office employees to CCC or termination of collection actions it is valid and past due. or FSA, the salaries of these employees where appropriate under USDA (b) If USDA determines that any of the are subject to administrative offset not regulations contained elsewhere. requirements of paragraph (a) of this to exceed 15 percent of the employee’s section have not been met, no disposable pay. CCC and FSA will § 3.71 Definitions. determination of indebtedness will be follow the notification requirements and As used in this subpart the following made and salary offset will not proceed procedures for collection by definitions will apply: until USDA is assured that the administrative offset as specified in 31 Disposable pay means that part of requirements have been met. CFR part 285 and 31 U.S.C. 3716. current basic pay, special pay, incentive (d) This subpart does not apply to pay, retired pay, retainer pay, or in the § 3.74 Notice requirements before offset. debts or claims arising under the case of an employee not entitled to basic Except as provided in paragraph (b) of Internal Revenue Code of 1986 (26 pay, other authorized pay remaining this section, salary offset will not be U.S.C. 1–8023); the tariff laws of the after the deduction of any amount made unless USDA first provides the United States; or to any case where required by law to be withheld (other employee with a minimum of 30 days collection of a debt by salary offset is than deductions to execute garnishment written notice. This Notice of Intent to explicitly provided for or prohibited by orders in accordance with 5 CFR parts Offset Salary will state: another law (for example travel 581 and 582). Among the legally (a) That USDA has reviewed the advances in 5 U.S.C. 5705 or employee required deductions that must be records relating to the debt and has training expense in 5 U.S.C. 4108). applied first to determine disposable determined that a debt is owed, the (e) This subpart identifies the types of pay are levies pursuant to the Internal amount of the debt, and the facts giving salary offset available to USDA, as well Revenue Code (title 26, United States rise to the debt; as certain rights provided to the Code) and deductions described in 5 (b) USDA’s intention to collect the employee, which include a written CFR 581.105(b) through (f). debt by means of deduction from the

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employee’s current disposable pay until (n) The name and address of an (d) USDA will have the burden of the debt and all accumulated interest official of USDA to whom going forward to prove the existence of are paid in full; communications must be directed. the debt. (c) The approximate beginning date, (e) The employee requesting the § 3.75 Request for a hearing. frequency, and amount of the intended hearing will bear the ultimate burden of deduction (stated as a fixed dollar (a) Except as provided in paragraph proof. amount or as a percentage of pay, not to (c) of this section, an employee must file (f) The evidence presented by the exceed 15 percent of disposable pay), a petition to request a hearing that is employee must prove that no debt exists and the intention to continue the received by USDA not later than 30 days or cast sufficient doubt such that deductions until the debt is paid in full from the date of the USDA notice reasonable minds could differ as to the or otherwise resolved; described in § 3.74, if an employee existence of the debt. (d) An explanation of USDA wants a hearing concerning: requirements concerning interest, (1) The existence or amount of the § 3.78 Written decision following a penalties and administrative costs; debt; or hearing. unless such payments are waived in (2) USDA’s proposed salary offset Written decisions provided after a accordance with 31 U.S.C. 3717 and schedule (including percentage). hearing will include: § 3.17; (b) The petition must be signed by the (a) A statement of the facts presented (e) The employee’s right to inspect employee and must identify and explain at the hearing to support the nature and and copy USDA records relating to the with reasonable specificity and brevity origin of the alleged debt and those debt; the facts, evidence and witnesses which presented to refute the debt; (f) The employee’s right to enter into the employee believes support his or her (b) The hearing officer’s analysis, a written agreement with USDA for a position. If the employee objects to the findings, and conclusions, considering repayment schedule differing from that percentage of disposable pay to be all the evidence presented and the proposed by USDA, so long as the terms deducted from each check, the petition respective burdens of the parties, in of the repayment schedule proposed by must state the objection and the reasons light of the hearing; the employee are agreeable to USDA; for it. (c) The amount and validity of the (g) The employee’s right to a hearing (c) If the employee files a petition for alleged debt determined as a result of conducted by a hearing official on a hearing later than the 30 days as the hearing; USDA’s determination of the debt, the described in paragraph (a) of this (d) The payment schedule (including amount of the debt, or percentage of section, the hearing officer may accept percentage of disposable pay), if disposable pay to be deducted each pay the request if the employee can show applicable; period, so long as a petition is filed by that the delay was because of the employee as prescribed by USDA; (e) The determination that the amount (h) That the timely filing of a petition circumstances beyond his or her control of the debt at this hearing is the final for hearing will stay the collection or because of failure to receive notice of agency action on this matter regarding proceedings; the filing deadline (unless the employee the existence and amount of the debt for (i) That a final decision on the hearing has actual notice of the filing deadline). purposes of executing salary offset under 5 U.S.C. 5514. However, even if will be issued at the earliest practical § 3.76 Result if employee fails to meet date, but not later than 60 days after the deadlines. the hearing official determines that a filing of the petition requesting the debt may not be collected by salary An employee will not be granted a offset, but the creditor agency finds that hearing, unless the employee requests, hearing and will have his or her and the hearing officer grants, a delay in the debt is still valid, the creditor disposable pay offset as specified in agency may still pursue collection of the the proceedings; USDA’s offset schedule if the employee: (j) That any knowingly false or debt by other means authorized by this (a) Fails to file a petition for a hearing frivolous statements, representations, or part; and as prescribed in § 3.75; or evidence may subject the employee to: (f) Notice that the final determination (1) Disciplinary procedures (b) Is scheduled to appear and fails to by the hearing official regarding the appropriate under 5 U.S.C. chapter 75, appear at the hearing. existence and amount of a debt is 5 CFR part 752, or any other applicable § 3.77 Hearing. subject to referral to Treasury under laws or regulations; § 3.33 in the same manner as any other (2) Penalties under the False Claims (a) If an employee timely files a delinquent debt. Act, 31 U.S.C. 3729–3731, or any other petition for a hearing under § 3.75, applicable statutory authority; or USDA will select the time, date, and § 3.79 Review of USDA records related to the debt. (3) Criminal penalties under 18 U.S.C. location for the hearing. 286, 287, 1001, and 1002 or any other (b) A hearing will not be held and (a) Notification by employee. An applicable statutory authority; Federal salary offset will not be pursued employee who intends to inspect or (k) Any other rights and remedies if the cost of the hearing is greater than copy USDA records related to the debt available to the employee under laws or the delinquent debt. must send a letter to USDA stating his regulations governing the program for (c)(1) Hearings will be conducted by or her intention. The letter must be which the collection is being made; the hearing official designated in received by USDA within 30 days of the (l) That amounts paid on or deducted accordance with 5 CFR 550.1107; and date of the Notice of Intent to Offset for the debt which are later waived or (2) Rules of evidence will not be Salary. found not owed to the United States adhered to, but the hearing official will (b) USDA response. In response to the will be promptly refunded to the consider all evidence that he or she timely notice submitted by the debtor as employee, unless there are applicable determines to be relevant to the debt described in paragraph (a) of this contractual or statutory provisions to that is the subject of the hearing and section, USDA will notify the employee the contrary; weigh it accordingly, given all of the of the location and time when the (m) The method and time period for facts and circumstances surrounding the employee may inspect and copy USDA requesting a hearing; and debt. records related to the debt.

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§ 3.80 Written agreement to repay debts as § 3.82 Procedures for salary offset: types (unless expressly prohibited by law or alternative to salary offset. of collection. regulation); or (a)(1) The employee may propose, in A debt will be collected in a lump- (b) USDA is directed by an sum or in installments. Collection will response to a Notice of Intent to Offset administrative or judicial order to be by lump-sum collection unless the Salary, a written agreement to repay the refund amounts deducted from the employee is financially unable to pay in debt as an alternative to salary offset. employee’s current pay. one lump-sum, or if the amount of the Any employee who wishes to do this debt exceeds 15 percent of disposable § 3.87 Agency regulations. must submit a proposed written pay for an ordinary pay period. In these USDA agencies may issue regulations agreement to repay the debt that is cases, deduction will be by installments, or policies not inconsistent with OPM received by USDA within 30 days of the as specified in § 3.83. regulations (5 CFR part 550, subpart K) date of the Notice of Intent to Offset and regulations in this subpart Salary or 15 days after the date of a § 3.83 Procedures for salary offset: governing the collection of a debt by methods of collection. hearing decision issued under § 3.78. salary offset. (2) For FSA FLP debt, an alternative (a) General. A debt will be collected by deductions at officially-established repayment agreement submitted after a Subpart H—Cooperation With the pay intervals from an employee’s hearing decision must include a Internal Revenue Service current pay account, unless the payment schedule similar to the employee and USDA agree to alternative Authority: 26 U.S.C. 61; 31 U.S.C. 3720A. payment schedule in the hearing arrangements for repayment under decision and include payment amounts § 3.80. § 3.90 Reporting discharged debts to the that are at least equal to the payment (b) Installment deductions. Internal Revenue Service. amounts in the hearing decision. Installment deductions will be made When USDA discharges a debt, (b) USDA will notify the employee over a period not greater than the whether for the full value or less, it will whether the employee’s proposed anticipated period of employment. The report the discharge to the Internal written agreement for repayment is size and frequency of installment Revenue Service (IRS) in accordance acceptable. USDA may accept a deductions will bear a reasonable with current IRS instructions. repayment agreement instead of relation to the size of the debt and the proceeding by offset. In making this employee’s ability to pay. However, the Subpart I—Adjusted Civil Monetary Penalties determination, USDA will balance the amount deducted for any period will USDA interest in collecting the debt not exceed 15 percent of the disposable Authority: 28 U.S.C. 2461 note. against hardship to the employee. If the pay from which the deduction is made, debt is delinquent and the employee has unless the employee has agreed in § 3.91 Adjusted civil monetary penalties. writing to the deduction of a greater not disputed its existence or amount, (a) In general—(1) Adjustments. The USDA will accept a repayment amount. If possible, the installment payment will be sufficient in size and Secretary will adjust the civil monetary agreement, instead of offset, for good penalties, listed in paragraph (b) of this cause such as, if the employee is able to frequency to liquidate the debt in no more than 3 years. Installment payments section, to take account of inflation as establish that offset would result in of less than $25 per pay period or $50 mandated by the Federal Civil Penalties undue financial hardship or would be a month will be accepted only in the Inflation Adjustment Act Improvements against equity and good conscience. For most unusual circumstances. Act of 2015, as amended. FSA FLP debt, a decision by USDA (c) Sources of deductions. USDA will (2) Timing. Any increase in the dollar under this paragraph is not subject to make deductions only from basic pay, amount of a civil monetary penalty review by NAD under part 11 of this special pay, incentive pay, retired pay, listed in paragraph (b) of this section title. retainer pay, or in the case of an applies only to violations occurring after employee not entitled to basic pay, June 17, 2020. § 3.81 Procedures for salary offset: when (3) Illustrative purposes. The deductions may begin. other authorized pay. descriptions of the civil monetary (a) Deductions to liquidate an § 3.84 Procedures for salary offset: penalties listed in paragraph (b) of this employee’s debt will be by the method imposition of interest, penalties, and section are for illustrative purposes administrative costs. and in the amount stated in USDA’s only. This section does not amend, Notice of Intent to Offset Salary to Interest, penalties and administrative interpret, implement, or alter in any collect from the employee’s current pay. costs will be charged in accordance with way the statutory provisions in which § 3.17. (b) If the employee filed a petition for the civil monetary penalties listed in a hearing with USDA before the § 3.85 Non-waiver of rights. paragraph (b) of this section are set. Moreover, the descriptions of the civil expiration of the period provided for in So long as there are no statutory or monetary penalties listed in paragraph § 3.75, then deductions will begin after contractual provisions to the contrary, (b) of this section do not necessarily the hearing officer has provided the no employee payment (or all or portion contain a complete description of the employee with a hearing, and a final of a debt) collected under these circumstances (for example, written decision has been rendered in regulations will be interpreted as a requirements regarding the ‘‘state of favor of USDA. waiver of any rights that the employee may have under 5 U.S.C. 5514. mind’’ of the violator(s), requirements (c) If an employee retires or resigns regarding the type of law or issuance before collection of the amount of the § 3.86 Refunds. violated, etc.) under which the penalties indebtedness is completed, the USDA will refund promptly to the are assessed. Persons should consult the remaining indebtedness will be appropriate individual amounts offset statutory text in which the civil collected according to the procedures under these regulations when: monetary penalties are set and any for administrative offset (see subpart D (a) A debt is waived or otherwise implementing regulations to make of this part). found not owed to the United States applicability determinations.

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(b) Penalties—(1) Agricultural Potato Research and Promotion Act, (xxii) Civil penalty for a violation of Marketing Service. (i) Civil penalty for codified at 7 U.S.C. 2621(b)(1), has a a program under the Pork Promotion, improper record keeping codified at 7 minimum of $1,312 and a maximum of Research, and Consumer Information U.S.C. 136i–1(d), has: A maximum of $12,104. Act of 1985, codified at 7 U.S.C. $964 in the case of the first offense, and (xii) Civil penalty for failure to obey 4815(b)(1)(A)(i), has a maximum of a minimum of $1,872 in the case of a cease and desist order under the $2,368. subsequent offenses, except that the Potato Research and Promotion Act, (xxiii) Civil penalty for failure to obey penalty will be less than $1,872 if the codified at 7 U.S.C. 2621(b)(3), has a a cease and desist order under the Pork Secretary determines that the person maximum of $1,312. Each day the Promotion, Research, and Consumer made a good faith effort to comply. violation continues is a separate Information Act of 1985, codified at 7 (ii) Civil penalty for a violation of the violation. U.S.C. 4815(b)(3)(A), has a maximum of unfair conduct rule under the Perishable (xiii) Civil penalty for failure to pay, $1,184. Each day the violation continues Agricultural Commodities Act, in lieu of collect, or remit any assessment or fee is a separate violation. license revocation or suspension, or for a violation of a program under the (xxiv) Civil penalty for failure to pay, codified at 7 U.S.C. 499b(5), has a Egg Research and Consumer Information collect, or remit any assessment or fee maximum of $5,246. Act, codified at 7 U.S.C. 2714(b)(1), has or for a violation of a program under the (iii) Civil penalty for violation of the a minimum of $1,517 and a maximum Watermelon Research and Promotion licensing requirements under the of $15,174. Act, codified at 7 U.S.C. 4910(b)(1), has Perishable Agricultural Commodities (xiv) Civil penalty for failure to obey a minimum of $1,184 and a maximum Act, codified at 7 U.S.C. 499c(a), has a a cease and desist order under the Egg of $11,837. maximum of $1,675 for each such Research and Consumer Information (xxv) Civil penalty for failure to obey offense and not more than $418 for each Act, codified at 7 U.S.C. 2714(b)(3), has a cease and desist order under the day it continues, or a maximum of $418 a maximum of $1,517. Each day the Watermelon Research and Promotion for each offense if the Secretary violation continues is a separate Act, codified at 7 U.S.C. 4910(b)(3), has determines the violation was not violation. a maximum of $1,184. Each day the willful. (xv) Civil penalty for failure to remit violation continues is a separate (iv) Civil penalty in lieu of license any assessment or fee or for a violation violation. (xxvi) Civil penalty for failure to pay, suspension under the Perishable of a program under the Beef Research collect, or remit any assessment or fee Agricultural Commodities Act, codified and Information Act, codified at 7 or for a violation of a program under the at 7 U.S.C. 499h(e), has a maximum U.S.C. 2908(a)(2), has a maximum of Pecan Promotion and Research Act of penalty of $3,348 for each violative $11,837. 1990, codified at 7 U.S.C. 6009(c)(1), has transaction or each day the violation (xvi) Civil penalty for failure to remit a minimum of $1,928 and a maximum continues. any assessment or for a violation of a (v) Civil penalty for a violation of the of $19,268. program regarding wheat and wheat (xxvii) Civil penalty for failure to obey Export Apple Act, codified at 7 U.S.C. foods research, codified at 7 U.S.C. 586, has a minimum of $151 and a a cease and desist order under the Pecan 3410(b), has a maximum of $2,928. Promotion and Research Act of 1990, maximum of $15,300. (xvii) Civil penalty for failure to pay, (vi) Civil penalty for a violation of the codified at 7 U.S.C. 6009(e), has a collect, or remit any assessment or fee Export Grape and Plum Act, codified at maximum of $1,926. or for a violation of a program under the 7 U.S.C. 596, has a minimum of $293 (xxviii) Civil penalty for failure to Floral Research and Consumer and a maximum of $29,276. pay, collect, or remit any assessment or (vii) Civil penalty for a violation of an Information Act, codified at 7 U.S.C. fee or for a violation of a program under order issued by the Secretary under the 4314(b)(1), has a minimum of $1,378 the Mushroom Promotion, Research, Agricultural Adjustment Act, reenacted and a maximum of $13,777. and Consumer Information Act of 1990, with amendments by the Agricultural (xviii) Civil penalty for failure to obey codified at 7 U.S.C. 6107(c)(1), has a Marketing Agreement Act of 1937, a cease and desist order under the Floral minimum of $937 and a maximum of codified at 7 U.S.C. 608c(14)(B), has a Research and Consumer Information $9,365. maximum of $2,928. Each day the Act, codified at 7 U.S.C. 4314(b)(3), has (xxix) Civil penalty for failure to obey violation continues is a separate a maximum of $1,378. Each day the a cease and desist order under the violation. violation continues is a separate Mushroom Promotion, Research, and (viii) Civil penalty for failure to file violation. Consumer Information Act of 1990, certain reports under the Agricultural (xix) Civil penalty for violation of an codified at 7 U.S.C. 6107(e), has a Adjustment Act, reenacted by the order under the Dairy Promotion maximum of $937. Each day the Agricultural Marketing Agreement Act Program, codified at 7 U.S.C. 4510(b), violation continues is a separate of 1937, codified at 7 U.S.C. 610(c), has has a maximum of $2,547. violation. a maximum of $293. (xx) Civil penalty for pay, collect, or (xxx) Civil penalty for failure to pay, (ix) Civil penalty for a violation of a remit any assessment or fee or for a collect, or remit any assessment or fee seed program under the Federal Seed violation of the Honey Research, or for a violation of the Lime Research, Act, codified at 7 U.S.C. 1596(b), has a Promotion, and Consumer Information Promotion, and Consumer Information minimum of $100 and a maximum of Act, codified at 7 U.S.C. 4610(b)(1), has Act of 1990, codified at 7 U.S.C. $1,996. a minimum of $765 and a maximum of 6207(c)(1), has a minimum of $937 and (x) Civil penalty for failure to collect $7,846. a maximum of $9,365. any assessment or fee for a violation of (xxi) Civil penalty for failure to obey (xxxi) Civil penalty for failure to obey the Cotton Research and Promotion Act, a cease and desist order under the a cease and desist order under the Lime codified at 7 U.S.C. 2112(b), has a Honey Research, Promotion, and Research, Promotion, and Consumer maximum of $2,928. Consumer Information Act, codified at 7 Information Act of 1990, codified at 7 (xi) Civil penalty for failure to pay, U.S.C. 4610(b)(3), has a maximum of U.S.C. 6207(e), has a maximum of $937. collect, or remit any assessment or fee $785. Each day the violation continues Each day the violation continues is a for a violation of a program under the is a separate violation. separate violation.

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(xxxii) Civil penalty for failure to pay, $1,625 and a maximum of $16,257 for codified a 7 U.S.C. 1636b(a)(1), has a collect, or remit any assessment or fee each violation. maximum of $15,300 for each violation. or for a violation of a program under the (xlii) Civil penalty for failure to obey (lii) Civil penalty for failure to obey a Soybean Promotion, Research, and a cease and desist order under the cease and desist order under the Consumer Information Act, codified a 7 Commodity Promotion, Research, and Livestock Mandatory Reporting Act of U.S.C. 6307(c)(1)(A), has a maximum of Information Act of 1996, codified at 7 1999, codified a 7 U.S.C. 1636b(g)(3), $1,928. U.S.C. 7419(e), has a minimum of has a maximum of $15,300 for each (xxxiii) Civil penalty for failure to $1,625 and a maximum of $16,257. Each violation. Each day the violation obey a cease and desist order under the day the violation continues is a separate continues is a separate violation. Soybean Promotion, Research, and violation. (liii) Civil penalty for failure to obey Consumer Information Act, codified at 7 (xliii) Civil penalty for a violation of an order of the Secretary issued U.S.C. 6307(e), has a maximum of an order or regulation issued under the pursuant to the Dairy Product $9,593. Each day the violation continues Canola and Rapeseed Research, Mandatory Reporting program, codified is a separate violation. Promotion, and Consumer Information at 7 U.S.C. 1637b(c)(4)(D)(iii), has a (xxxiv) Civil penalty for failure to pay, Act, codified at 7 U.S.C. 7448(c)(1)(A)(i), maximum of $14,790 for each offense. collect, or remit any assessment or fee has a maximum of $1,625 for each (liv) Civil penalty for a willful or for a violation of a program under the violation. Fluid Milk Promotion Act of 1990, violation of the Country of Origin (xliv) Civil penalty for failure to obey Labeling program by a retailer or person codified at 7 U.S.C. 6411(c)(1)(A), has a a cease and desist order under the minimum of $937 and a maximum of engaged in the business of supplying a Canola and Rapeseed Research, covered commodity to a retailer, $9,365, or in the case of a violation that Promotion, and Consumer Information is willful, codified at 7 U.S.C. codified at 7 U.S.C. 1638b(b)(2), has a Act, codified at 7 U.S.C. 7448(e), has a maximum of $1,188 for each violation. 6411(c)(1)(B), has a minimum of maximum of $8,128. Each day the $18,405 and a maximum of $187,296. (lv) Civil penalty for violations of the violation continues is a separate Dairy Research Program, codified at 7 (xxxv) Civil penalty for failure to obey violation. a cease and desist order under the Fluid U.S.C. 4535 and 4510(b), has a (xlv) Civil penalty for violation of an maximum of $2,547 for each violation. Milk Promotion Act of 1990, codified at order or regulation issued under the (lvi) Civil penalty for a packer or 7 U.S.C. 6411(e), has a maximum of National Kiwifruit Research, Promotion, swine contractor violation, codified at 7 $9,639. Each day the violation continues and Consumer Information Act, codified U.S.C. 193(b), has a maximum of is a separate violation. at 7 U.S.C. 7468(c)(1), has a minimum (xxxvi) Civil penalty for knowingly $29,270. of $813 and a maximum of $8,128 for labeling or selling a product as organic each violation. (lvii) Civil penalty for a livestock except in accordance with the Organic (xlvi) Civil penalty for failure to obey market agency or dealer failure to Foods Production Act of 1990, codified a cease and desist order under the register, codified at 7 U.S.C. 203, has a at 7 U.S.C. 6519(c), has a maximum of National Kiwifruit Research, Promotion, maximum of $1,995 and not more than $18,730. and Consumer Information Act, codified $100 for each day the violation (xxxvii) Civil penalty for failure to continues. pay, collect, or remit any assessment or at 7 U.S.C. 7468(e), has a maximum of $813. Each day the violation continues (lviii) Civil penalty for operating fee or for a violation of a program under without filing, or in violation of, a the Fresh Cut Flowers and Fresh Cut is a separate violation. (xlvii) Civil penalty for a violation of stockyard rate schedule, or of a Greens Promotion and Information Act regulation or order of the Secretary of 1993, codified at 7 U.S.C. an order or regulation under the Popcorn Promotion, Research, and made thereunder, codified at 7 U.S.C. 6808(c)(1)(A)(i), has a minimum of $883 207(g), has a maximum of $1,996 and and a maximum of $8,831. Consumer Information Act, codified at 7 U.S.C. 7487(a), has a maximum of not more than $100 for each day the (xxxviii) Civil penalty for failure to violation continues. obey a cease and desist order under the $1,625 for each violation. (lix) Civil penalty for a stockyard Fresh Cut Flowers and Fresh Cut Greens (xlviii) Civil penalty for certain owner, livestock market agency, or Promotion and Information Act of 1993, violations under the Egg Products dealer, who engages in or uses any codified at 7 U.S.C. 6808(e)(1), has a Inspection Act, codified at 21 U.S.C. unfair, unjustly discriminatory, or maximum of $8,831. Each day the 1041(c)(1)(A), has a maximum of $9,365 deceptive practice or device in violation continues is a separate for each violation. connection with determining whether violation. (xlix) Civil penalty for violation of an (xxxix) Civil penalty for a violation of order or regulation issued under the persons should be authorized to operate a program under the Sheep Promotion, Hass Avocado Promotion, Research, and at the stockyards, or with receiving, Research, and Information Act of 1994, Information Act of 2000, codified at 7 marketing, buying, or selling on a codified at 7 U.S.C. 7107(c)(1)(A), has a U.S.C. 7807(c)(1)(A)(i), has a minimum commission basis or otherwise, feeding, maximum of $1,722. of $1,478 and a maximum of $14,790 for watering, holding, delivery, shipment, (xl) Civil penalty for failure to obey a each violation. weighing, or handling of livestock, cease and desist order under the Sheep (l) Civil penalty for failure to obey a codified at 7 U.S.C. 213(b), has a Promotion, Research, and Information cease and desist order under the Hass maximum of $29,270. Act of 1994, codified at 7 U.S.C. 7107(e), Avocado Promotion, Research, and (lx) Civil penalty for a stockyard has a maximum of $860. Each day the Information Act of 2000, codified at 7 owner, livestock market agency, or violation continues is a separate U.S.C. 7807(e)(1), has a maximum of dealer, who knowingly fails to obey any violation. $14,790 for each offense. Each day the order made under the provisions of 7 (xli) Civil penalty for a violation of an violation continues is a separate U.S.C. 211, 212, or 213, codified at 7 order or regulation issued under the violation. U.S.C. 215(a), has a maximum of $1,996. Commodity Promotion, Research, and (li) Civil penalty for violation of (lxi) Civil penalty for live poultry Information Act of 1996, codified at 7 certain provisions of the Livestock dealer violations, codified at 7 U.S.C. U.S.C. 7419(c)(1), has a minimum of Mandatory Reporting Act of 1999, 228b–2(b), has a maximum of $85,150.

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(lxii) Civil penalty for a violation, maximum of the greater of: $70,972 in (xiii) Civil penalty for knowingly and codified at 7 U.S.C. 86(c), has a the case of any individual, except that willfully violating 49 U.S.C. 80502 with maximum of $286,049. the civil penalty may not exceed $1,420 respect to the transportation of animals (lxiii) Civil penalty for failure to in the case of an initial violation of the by any rail carrier, express carrier, or comply with certain provisions of the AHPA by an individual moving common carrier (except by air or water), U.S. Warehouse Act, codified at 7 U.S.C. regulated articles not for monetary gain, a receiver, trustee, or lessee of one of 254, has a maximum of $36,975 per $354,860 in the case of any other person those carriers, or an owner or master of violation if an agricultural product is for each violation, $594,129 for all a vessel, codified at 49 U.S.C. 80502(d), not involved in the violation. violations adjudicated in a single has a minimum of $168 and a maximum (2) Animal and Plant Health proceeding if the violations do not of $860. Inspection Service. (i) Civil penalty for include a willful violation, and (xiv) Civil penalty for a violation of a violation of the imported seed $1,188,259 for all violations adjudicated the Commercial Transportation of provisions of the Federal Seed Act, in a single proceeding if the violations Equine for Slaughter Act, 7 U.S.C. 1901 codified at 7 U.S.C. 1596(b), has a include a willful violation; or twice the note, and its implementing regulations minimum of $100 and a maximum of gross gain or gross loss for any violation, in 9 CFR part 88, as specified in 9 CFR $1,996. forgery, counterfeiting, unauthorized 88.6, has a maximum of $812. Each (ii) Civil penalty for a violation of the use, defacing, or destruction of a horse transported in violation of 9 CFR Animal Welfare Act, codified at 7 U.S.C. certificate, permit, or other document part 88 is a separate violation. 2149(b), has a maximum of $11,883, and provided under the AHPA that results (xv) Civil penalty for knowingly knowing failure to obey a cease and in the person’s deriving pecuniary gain violating section 3(d) or 3(f) of the Lacey desist order has a civil penalty of or causing pecuniary loss to another Act Amendments of 1981, or for $1,782. person. (iii) Civil penalty for any person that violating any other provision provided (vii) Civil penalty for any person that causes harm to, or interferes with, an that, in the exercise of due care, the animal used for the purposes of official violates certain regulations under the violator should have known that the inspection by USDA, codified at 7 Agricultural Bioterrorism Protection Act plant was taken, possessed, transported, U.S.C. 2279e(a), has a maximum of of 2002 regarding transfers of listed or sold in violation of any underlying $14,790. agents and toxins or possession and use law, treaty, or regulation, has a (iv) Civil penalty for a violation of the of listed agents and toxins, codified at maximum of $26,615 for each violation, Swine Health Protection Act, codified at 7 U.S.C. 8401(i)(1), has a maximum of as specified in 16 U.S.C. 3373(a)(1) (but 7 U.S.C. 3805(a), has a maximum of $354,860 in the case of an individual if the plant has a market value of less $29,726. and $709,721 in the case of any other than $356, and involves only the (v) Civil penalty for any person that person. transportation, acquisition, or receipt of violates the Plant Protection Act (PPA), (viii) Civil penalty for violation of the a plant taken or possessed in violation or that forges, counterfeits, or, without Horse Protection Act, codified at 15 of any law, treaty, or regulation of the authority from the Secretary, uses, U.S.C. 1825(b)(1), has a maximum of United States, any Indian tribal law, any alters, defaces, or destroys any $5,856. foreign law, or any law or regulation of certificate, permit, or other document (ix) Civil penalty for failure to obey any State, the penalty will not exceed provided for in the PPA, codified a 7 Horse Protection Act disqualification, the maximum provided for violation of U.S.C. 7734(b)(1), has a maximum of the codified at 15 U.S.C. 1825(c), has a said law, treaty, or regulation, or greater of: $73,950 in the case of any maximum of $11,444. $26,615, whichever is less). individual (except that the civil penalty (x) Civil penalty for knowingly (xvi) Civil penalty for violating may not exceed $1,479 in the case of an violating, or, if in the business as an section 3(f) of the Lacey Act initial violation of the PPA by an importer or exporter, violating, with Amendments of 1981, as specified in 16 individual moving regulated articles not respect to terrestrial plants, any U.S.C. 3373(a)(2), has a maximum of for monetary gain), $369,749 in the case provision of the Endangered Species Act $665. of any other person for each violation, of 1973, any permit or certificate issued (3) Food and Nutrition Service. (i) $594,129 for all violations adjudicated thereunder, or any regulation issued Civil penalty for violating a provision of in a single proceeding if the violations pursuant to section 9(a)(1)(A) through the Food and Nutrition Act of 2008 do not include a willful violation, and (F), (a)(2)(A) through (D), (c), (d) (other (Act), or a regulation under the Act, by $1,188,259 for all violations adjudicated than regulations relating to record a retail food store or wholesale food in a single proceeding if the violations keeping or filing reports), (f), or (g), as concern, codified at 7 U.S.C. 2021(a) include a willful violation; or twice the specified at 16 U.S.C. 1540(a)(1), has a and (c), has a maximum of $118,826 for gross gain or gross loss for any violation, maximum of $53,525 for each violation. each violation. forgery, counterfeiting, unauthorized us, (xi) Civil penalty for knowingly (ii) Civil penalty for trafficking in food defacing, or destruction of a certificate, violating, or, if in the business as an coupons, codified at 7 U.S.C. permit, or other document provided for importer or exporter, violating, with 2021(b)(3)(B), has a maximum of in the PPA that results in the person respect to terrestrial plants, any other $42,819 for each violation, except that deriving pecuniary gain or causing regulation under the Endangered the maximum penalty for violations pecuniary loss to another. Species Act of 1973, as specified at 16 occurring during a single investigation (vi) Civil penalty for any person U.S.C. 1540(a)(1), has a maximum of is $77,106. (except as provided in 7 U.S.C. 8309(d)) $25,632 for each violation. (iii) Civil penalty for the sale of that violates the Animal Health (xii) Civil penalty for violating, with firearms, ammunitions, explosives, or Protection Act (AHPA), or that forges, respect to terrestrial plants, the controlled substances for coupons, counterfeits, or, without authority from Endangered Species Act of 1973, or any codified at 7 U.S.C. 2021(b)(3)(C), has a the Secretary, uses, alters, defaces, or regulation, permit, or certificate issued maximum of $38,553 for each violation, destroys any certificate, permit, or other thereunder, as specified at 16 U.S.C. except that the maximum penalty for document provided under the AHPA, 1540(a)(1), has a maximum of $1,351 for violations occurring during a single codified at 7 U.S.C. 8313(b)(1), has a each violation. investigation is $77,106.

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(iv) Civil penalty for any entity that Conservation and Shortage Relief Act or codified at 7 U.S.C. 7272(g)(5), has a submits a bid to supply infant formula the regulations that implement such Act maximum of $16,257 for each violation. to carry out the Special Supplemental regardless of whether such violation (ii) Civil penalty for willful failure or Nutrition Program for Women, Infants caused the export of unprocessed timber refusal to furnish information or willful and Children and discloses the amount originating from Federal lands, codified furnishing of false data by a processor, of the bid, rebate, or discount practices in 16 U.S.C. 620d(c)(2)(A)(iii), has a refiner, or importer of sugar, syrup and in advance of the bid opening or for any maximum of $963,837. entity that makes a statement prior to (v) Civil penalty for a violation molasses under section 156 of the the opening of bids for the purpose of involving protections of caves, codified Federal Agriculture Improvement and influencing a bid, codified at 42 U.S.C. at 16 U.S. C. 4307(a)(2), has a maximum Reform Act of 1996, codified at 7 U.S.C. 1786(h)(8)(H)(i), has a maximum of of $21,065. 7272(g)(5), has a maximum of $16,257 $181,484,308. (6) [Reserved] for each violation. (v) Civil penalty for a vendor (7) Federal Crop Insurance (iii) Civil penalty for filing a false convicted of trafficking in food Corporation. (i) Civil penalty for any acreage report that exceeds tolerance instruments, codified at 42 U.S.C. person who willfully and intentionally under section 156 of the Federal 1786(o)(1)(A) and 42 U.S.C. provides any false or inaccurate Agriculture Improvement and Reform information to the Federal Crop 1786(o)(4)(B), has a maximum of Act of 1996, codified at 7 U.S.C. Insurance Corporation or to an approved $15,692 for each violation, except that 7272(g)(5), has a maximum of $16,257 the maximum penalty for violations insurance provider with respect to any for each violation. occurring during a single investigation insurance plan or policy that is offered is $62,767. under the authority of the Federal Crop (iv) Civil penalty for knowingly (vi) Civil penalty for a vendor Insurance Act, or who fails to comply violating any regulation of the Secretary convicted of selling firearms, with a requirement of the Federal Crop of the Commodity Credit Corporation ammunition, explosive, or controlled Insurance Corporation, codified in 7 pertaining to flexible marketing substances in exchange for food U.S.C. 1515(h)(3)(A), has a maximum of allotments for sugar under section instruments, codified at 42 U.S.C. the greater of: The amount of the 359h(b) of the Agricultural Adjustment 1786(o)(1)(B) and 42 U.S.C. pecuniary gain obtained as a result of Act of 1938, codified at 7 U.S.C. 1786(o)(4)(B), has a maximum of the false or inaccurate information or 1359hh(b), has a maximum of $11,883 $15,306 for each violation, except that the noncompliance; or $12,502. for each violation. the maximum penalty for violations (ii) [Reserved] (v) Civil penalty for knowing violation occurring during a single investigation (8) Rural Housing Service. (i) Civil is $62,767. penalty for a violation of section 536 of of regulations promulgated by the (4) Food Safety and Inspection Title V of the Housing Act of 1949, Secretary pertaining to cotton insect Service. (i) Civil penalty for certain codified in 42 U.S.C. 1490p(e)(2), has a eradication under section 104(d) of the violations under the Egg Products maximum of $204,891 in the case of an Agricultural Act of 1949, codified at 7 Inspection Act, codified at 21 U.S.C. individual, and a maximum of U.S.C. 1444a(d), has a maximum of 1041(c)(1)(A), has a maximum of $9,365 $2,048,915 in the case of an applicant $14,638 for each offense. for each violation. other than an individual. (11) Office of the Secretary. (i) Civil (ii) [Reserved] (ii) Civil penalty for equity skimming penalty for making, presenting, (5) Forest Service. (i) Civil penalty for under section 543(a) of the Housing Act submitting or causing to be made, willful disregard of the prohibition of 1949, codified in 42 U.S.C. presented or submitted, a false, against the export of unprocessed timber 1490s(a)(2), has a maximum of $36,975. fictitious, or fraudulent claim as defined originating from Federal lands, codified (iii) Civil penalty under section 543b under the Program Fraud Civil at 16 U.S.C. 620d(c)(1)(A), has a of the Housing Act of 1949 for a maximum of $963,837 per violation or violation of regulations or agreements Remedies Act of 1986, codified at 31 three times the gross value of the made in accordance with Title V of the U.S.C. 3802(a)(1), has a maximum of unprocessed timber, whichever is Housing Act of 1949, by submitting false $11,666. greater. information, submitting false (ii) Civil penalty for making, (ii) Civil penalty for a violation in certifications, failing to timely submit presenting, submitting or causing to be disregard of the Forest Resources information, failing to maintain real made, presented or submitted, a false, Conservation and Shortage Relief Act or property in good repair and condition, fictitious, or fraudulent written the regulations that implement such Act failing to provide acceptable statement as defined under the Program regardless of whether such violation management for a project, or failing to Fraud Civil Remedies Act of 1986, caused the export of unprocessed timber comply with applicable civil rights laws codified at 31 U.S.C. 3802(a)(2), has a originating from Federal lands, codified and regulations, codified in 42 U.S.C. maximum of $11,666. in 16 U.S.C. 620d(c)(2)(A)(i), has a 1490s(b)(3)(A), has a maximum of the maximum of $144,576 per violation. greater of: Twice the damages USDA, PART 400—GENERAL (iii) Civil penalty for a person that guaranteed lender, or project that is ADMINISTRATIVE REGULATIONS should have known that an action was secured for a loan under Title V, a violation of the Forest Resources suffered or would have suffered as a ■ 2. The authority citation for part 400 Conservation and Shortage Relief Act or result of the violation; or $73,950 per continues to read as follows: the regulations that implement such Act violation. regardless of whether such violation (9) [Reserved] Authority: 7 U.S.C.1506(l), 1506(o). caused the export of unprocessed timber (10) Commodity Credit Corporation. originating from Federal lands, codified (i) Civil penalty for willful failure or Subpart K [Removed and Reserved] at 16 U.S.C. 620d(c)(2)(A)(ii), has a refusal to furnish information, or willful maximum of $96,384 per violation. furnishing of false information under of ■ 3. Remove and reserve subpart K, (iv) Civil penalty for a willful section 156 of the Federal Agricultural consisting of §§ 400.115 through violation of the Forest Resources Improvement and Reform Act of 1996, 400.142.

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PART 761—FARM LOAN PROGRAMS; OIG Office of the Inspector General, (E) Forgiveness of a YL debt due to GENERAL PROGRAM USDA. circumstances beyond the borrower’s ADMINISTRATION * * * * * control. (b) * * * * * * * * ■ 4. The authority citation for part 761 Adjustment means the settlement of Hearing official. For the purposes of continues to read as follows: an FLP debt for less than the total salary offset, the hearing official is an Authority: 5 U.S.C. 301 and 7 U.S.C. 1989. amount owed. The adjusted amount is Administrative Law Judge of the USDA collected through a series of payments or another individual not under the Subpart A—General Provisions that are scheduled over time. An supervision or control of the USDA. For adjustment is not a final settlement until the purposes of administrative wage ■ 5. Amend § 761.1 by adding all scheduled payments have been garnishment, the hearing official is paragraphs (e), (f), and (g) to read as made. After applying all payments selected pursuant to part 3, subpart E of follows: pursuant to the adjustment agreement, this title. § 761.1 Introduction. any remaining balance is canceled. The * * * * * * * * * * amount canceled is reported to the IRS ■ 7. Add Subpart F to read as follows: (e) Part 3 of this title and 31 CFR part pursuant to § 3.90 of this title and applicable IRS requirements. Subpart F—Farm Loan Programs Debt 285 describe the policies and Settlement * * * * * procedures the Agency will follow for Sec. non-centralized offset (including Alternative repayment agreement is a 761.401 Purpose. administrative offset) and referral to written repayment agreement accepted 761.402 Abbreviations and definitions. Treasury for centralized offset (TOP), by both the borrower and the Agency as 761.403 General. Federal salary offset, Administrative specified in §§ 3.42(b) and 3.80 of this 761.404 Eligibility. Wage Garnishment, and collection title. The agreement may allow for 761.405 Application. through Treasury’s private collection payments to be made from the borrower 761.406 Types of debt settlement. agencies (cross-servicing). Supplemental to the Agency as an alternative to 761.407 Failure to pay. 761.408 Administrator authority. provisions for FLP purposes are collecting the payment amounts through described in part 761, subpart F of this administrative offset, or Federal salary § 761.401 Purpose. title. offset. (a) This subpart describes the (f) Part 3 of this title and 31 CFR parts * * * * * Agency’s policies for debt settlement as 900–904 describe the policies and Cancellation means the final authorized by the Consolidated Farm procedures the Agency will follow for resolution of an FLP debt without and Rural Development Act (CONACT) debt settlement authorities pursuant to receiving payment in full. Any amounts (7 U.S.C. 1921, 7 U.S.C. 1981, 1981a, the Federal Claims Collection still owed, after applying payments in 1981d, and 2008h). Standards. Supplemental provisions for accordance with approved adjustment (b) FLP debts that cannot be debt FLP purposes are described in part 761, and compromise agreements, is settled using CONACT debt settlement subpart F of this title. canceled. The amount canceled is authority such as when a borrower has (g) Part 761, subpart F of this title reported to the IRS pursuant to § 3.90 of received previous debt forgiveness on describes the debt settlement policies this title and applicable IRS another direct loan made under the and procedures for FLP debt pursuant to requirements. CONACT, will be processed as specified the Act. * * * * * in 31 U.S.C. chapter 37 and 31 CFR ■ 6. Amend § 761.2 as follows: Debt forgiveness means the reduction parts 900 through 904. ■ a. In paragraph (a), add in alphabetical or termination of a debt under the Act § 761.402 Abbreviations and definitions. order abbreviations for ‘‘ARA’’, ‘‘FCCS’’, in a manner that results in a loss to the and ‘‘OIG’’; and Agency, through: (a) Abbreviations and definitions for ■ b. In paragraph (b): (i)(A) Writing down or writing off a terms used in this subpart are provided ■ i. Revise the definition for debt pursuant to 7 U.S.C. 2001; in 7 CFR part 3 and § 761.2. (b) Definitions used only in this ‘‘Adjustment’’; (B) Cancellation of remaining subpart include: ■ ii. Add in alphabetical order a amounts owed after compromising, (1) Third party converter means an definition for ‘‘Alternative repayment adjusting, reducing, or charging off a individual or entity who: agreement’’; debt or claim pursuant to 7 U.S.C. 1981; (i) Is in possession of agency security ■ iii. Revise the definitions of (C) Paying a loss pursuant to 7 U.S.C. property, or money from the sale of ‘‘Cancellation’’ and ‘‘Debt forgiveness’’; 2005 on a FLP loan guaranteed by the security, in relation to a loan or other and Agency; debt that the individual or entity was ■ iv. Add in alphabetical order a (D) Discharging a debt as a result of not liable for; or definition for ‘‘Hearing official’’. bankruptcy; or (ii) Assists, or participates knowingly The additions and revisions read as (E) Releases of liability which result or unknowingly, in the transportation or follows: in a loss to the Agency. sale of agency security, in relation to a (ii) Debt forgiveness does not include: § 761.2 Abbreviations and definitions. loan or other debt that the individual or (A) Debt reduction through a entity was not liable for; or * * * * * conservation contract; (iii) Assists, or participates knowingly (a) * * * (B) Any writedown provided as part or unknowingly, in temporarily or ARA Alternative Repayment of the resolution of a discrimination permanently relocating or concealing Agreement. complaint against the Agency; the location of agency security property, * * * * * (C) Prior debt forgiveness that has or money from the sale of agency FCCS Federal Claims Collection been repaid in its entirety; security, in relation to a loan or other Standards. (D) Consolidation, rescheduling, debt that the individual or entity was * * * * * reamortization, or deferral of a loan; and not liable for.

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(2) [Reserved] (3) The debtor’s account is involved who can sign the debt settlement in a fiscal irregularity investigation in application; or compiled by FSA staff § 761.403 General. which final action has not been taken or when a signature cannot be obtained. (a) The Agency will settle debts that the account shows evidence that a (2) The debt may be settled when the result from, except as otherwise shortage may exist and an investigation borrower has no known assets or specified in this section: will be requested; or income from which collection can be (1)(i) Farm Ownership loans (part 764, (d) The Agency will consider made, has disappeared and cannot be subpart D of this chapter), including settlement of a debt only when: located without undue expense, and down payment loans (764, subpart E of (1) All security has been liquidated there is no security remaining for the this chapter); and the proceeds, less any prior lien debt. (ii) Operating loans (part 764, subpart amounts, have been applied to the debt; (3) In cases where the full amount of G of this chapter), including microloans or the Agency received a lump sum the unsecured debt cannot be collected part 764 of this chapter), and youth payment equal to the security’s current in a reasonable time by legal action or loans (part 764, subpart H of this market value, less any prior lien through enforced collection chapter); amounts, and proceedings, the Agency may consider a (iii) Emergency loans (part 764, (2) Payment is received based on the debt settlement offer submitted by a subpart I of this chapter); Agency’s determination of the amount borrower without requiring a complete (iv) Conservation loans (part 764, the borrower can pay to resolve the application. When evaluating these subpart F of this chapter); remaining balance owed on the offers, the Agency will consider the (v) Economic Emergency loans unsecured debt. likelihood of the debtor obtaining a (serviced under parts 761 through 767 of (3) The lump sum payment made larger income or additional assets, this chapter); softwood timber loans; under paragraph (d)(1) of this section for including inheritance prospects within Soil and Water loans; Individual the security’s market value may be 5 years, from which legal or enforced Recreation Loans; Irrigation and submitted by the borrower, an collection could be made. Drainage loans; and Shift-in-land-use individual authorized to act for the (c) A borrower is not eligible for debt (Grazing Association) loans; borrower pursuant to a power of settlement if: (2) Costs associated with servicing a attorney document or court order, or an (1) The borrower is indebted on borrower’s account including, but not individual who is not an obligor on the another active FLP loan that the limited to, Uniform Commercial Code debt but who has an ownership interest borrower cannot or will not debt settle; filing fees, surveys, appraisals, in the security. or protective advances, and liquidation (e) If an FLP loan has been accelerated (2) The debt has been referred to the expenses; and all security has been liquidated, and OIG, OGC, or Justice because of (3) Debts reduced to judgment; the agency has approved an adjustment suspected civil or criminal violation, (4) Non-Program Loans; debt settlement offer in accordance with unless investigation was declined or (5) Amounts the Agency is authorized this subpart, voluntary payments and advice was provided that the debt can to recapture through agreements such as involuntary payments (such as offsets) be canceled, compromised, or adjusted. the Shared Appreciation Agreement will be applied in the following order, § 761.405 Application. (part 766, subpart E of this chapter); as applicable: (6) Loss claims paid on guaranteed (1) Recoverable costs and protective (a) A borrower requesting debt loans (part 762 of this chapter); advances plus interest; settlement must submit complete and (7) Unauthorized assistance; (2) Loan principal; accurate information from which the (8) Amounts the Agency may collect (3) Deferred non-capitalized interest; Agency can make a full determination of from third party converters, or other (4) Accrued deferred interest; and the borrower’s financial circumstances individuals or entities having (5) Interest accrual to date of payment. and repayment ability. Except for the possession of security for FLP loans or (f) Settlement of FLP debt referred to situations listed in § 761.404(b), each monies obtained through the sale of FLP Treasury’s cross-servicing program and liable party, must submit the following: loan security; and returned to the Agency as uncollectible (1) One completed original debt (9) Debt returned to the Agency from will not be processed for the borrower settlement application on the applicable the Treasury cross-servicing program. until all FLP debts referred to the cross- Agency form signed by all parties liable (b) The debtor’s signature is not servicing program for that borrower for the debt; required to process some debt have been returned, with or without (2) A current financial statement; settlement actions. These cases include, payment agreements. (3) A cash flow projection for the next but are not limited to, debts discharged production or earnings period; in bankruptcy and debts returned from § 761.404 Eligibility. (4) Verification of employment or Treasury’s cross-servicing program with (a) A borrower is eligible for debt other earned income, including amounts still owing when no further settlement if the borrower: verification of a nondebtor spouse’s collection can be taken. (1) Meets the requirements for the income which will be included as (c) FSA will not engage in settlement particular type of debt settlement under available to pay family living expenses; of a debt if: this part; and (5) Verification of assets including, (1) Foreclosure of security has been (2) Submits a complete application for but not limited to, cash, checking initiated and is pending with Justice, debt settlement as specified in accounts, savings accounts, certificates unless Justice has advised FSA that it § 761.405. of deposit, individual retirement does not object to the settlement; or (b) All parties liable for the debt must accounts, retirement and pension funds, (2) Debts that have been referred to submit a complete application with the mutual funds, stocks, bonds, and Justice for a judgment, or a judgement following exceptions: accounts receivable; has been obtained by the United States (1) The applicable information (6) Verification of debts greater than Attorney or Justice, unless Justice closes required in § 761.405 can be provided $1,000; its file and releases the judgement back by the administrator or executor of the (7) Copies of complete Federal income to FSA for continued servicing; or Estate, heir, or other authorized person tax returns for the previous 3 years; and

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(8) Any other items requested by the (e) If an agreement is cancelled, any PART 766—FARM LOAN PROGRAMS, Agency to evaluate the debtor’s payments received will be retained as DIRECT LOAN SERVICING—SPECIAL financial condition. payments on the debt owed. (b) [Reserved] ■ § 761.408 Administrator authority. 11. The authority citation for part 766 continues to read as follows: § 761.406 Types of debt settlement. On an individual case basis, the (a) Compromise. The Agency may Agency may consider granting an Authority: 5 U.S.C. 301 and 7 U.S.C. 1989. compromise a debt owed to the Agency exception to any requirement of this Subpart C—Loan Servicing Programs if the requirements of this subpart are part if: met and: (a) The exception is not inconsistent § 766.101 [Amended] (1) The borrower pays a lump sum as with the authorizing statute or other a compromise for the remaining applicable law; and ■ 12. Amend § 766.101 as follows: unsecured debt; and (b) The Agency’s financial interest ■ a. In paragraph (b)(1), remove the (2) The amount is reasonable based on would be adversely affected by acting in words ‘‘(Appendix A to this subpart)’’; the Agency’s determination of what the accordance with this part and granting ■ borrower can pay to settle the debt. an exception would resolve or eliminate b. In paragraph (b)(2), remove the (b) Adjustment. The Agency may the adverse effect upon its financial phrase ‘‘FSA–2510’’ and add the phrase settle a debt owed to the Agency interest. ‘‘FSA–2510 (Appendix A to this through an adjustment agreement if the subpart) or FSA–2510–IA’’ in its place; requirements of this subpart are met PART 765—FARM LOAN PROGRAMS, ■ c. In paragraph (b)(3), remove the and: DIRECT LOAN SERVICING—REGULAR words ‘‘(Appendix C to this subpart)’’; (1) The borrower agrees to pay the and ■ 8. The authority citation for part 765 adjustment amount for a period of time continues to read as follows: ■ d. In paragraph (d)(2), remove the not to exceed 5 years; and phrase ‘‘FSA–2510’’ and add the phrase Authority: 5 U.S.C. 301 and 7 U.S.C. 1989. (2) The amount is reasonable based on ‘‘FSA–2510 or FSA–2510–IA’’ in its the Agency’s determination of what the Subpart D—Borrower Payments place. borrower can pay to settle the debt; and (3) The borrower provides § 765.155 [Amended] § 766.102 [Amended] documentation that funds are, or will ■ 9. Amend § 765.155 in paragraph (d) ■ be, available to pay the adjustment offer 13. Amend § 766.102 in paragraph (c) by removing the words ‘‘attempt to through its term. by removing the words ‘‘subpart B of 7 settle the debt in accordance with (c) Cancellation. The Agency may CFR part 1956’’ and adding the words subpart B of 7 CFR part 1956’’ and cancel a debt owed to the Agency if the ‘‘part 761, subpart F of this chapter’’ in adding the words ‘‘service the debt in requirements of this subpart are met and their place. accordance with part 761, subpart F of the application and supporting this chapter’’ in their place. § 766.103 [Amended] documents indicate that the borrower is unable to pay a compromise or Subpart I—Transfer of Security and ■ 14. Revise § 766.103 in paragraph (b) adjustment offer. Assumption of Debt introductory text by removing the phrase ‘‘FSA–2510’’ and adding the § 761.407 Failure to pay. ■ 10. Amend § 765.406 by revising phrase ‘‘FSA–2510 or FSA–2510–IA’’ in (a) Failure to pay any compromise paragraph (b)(3) to read as follows: its place. amount approved by FSA by the date agreed will result in cancellation of the § 765.406 Release of transferor from ■ 15. Revise appendix A to subpart C to compromise agreement. liability. read as follows: (b) Failure to pay debt adjustment * * * * * Appendix A to Subpart C of Part 766— amounts approved by FSA by the dates (b) * * * FSA–2510, Notice of Availability of agreed will result in cancellation of the (3) If an outstanding balance will Loan Servicing to Borrowers Who Are adjustment agreement. remain and all of the transferor’s 90 Days Past Due (c) A debtor who has entered into an security has been transferred, the agreement under this subpart may transferor may pay the remaining This appendix contains the request that FSA extend a repayment balance or request debt settlement in notification (form letter) that the Farm date for 90 days. The debtor must accordance with part 761 subpart F of Service Agency will send to borrowers provide information that supports the this chapter. If the transferor does not who are at least 90 days past due on basis for the request at the time the resolve the debt by paying the their loan payments. It provides request is made. remaining balance or submitting a debt information about the loan servicing (d) If a debtor is delinquent under the settlement offer that is acceptable to the that is available to the borrower. As terms of an adjustment agreement and Agency, the Agency will service the stated below on the notification, the FSA determines the debtor is likely to debt in accordance with part 3 of this borrower is to respond within 60 days be financially unable to meet the terms title using all applicable collection tools from receiving the notification (see of the agreement, the existing agreement including, but not limited to, § 766.101(b)(2) and (d)(2) for the may be cancelled and the debtor may be administrative offset, AWG, cross- requirements). The notification is allowed to apply for a different type of servicing, Federal salary offset, and provided here as required by 7 U.S.C. settlement more consistent with the TOP. 1981d. debtor’s repayment ability. * * * * * BILLING CODE 3410–KS–P

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■ 16. Revise appendix B to subpart C to Appendix B to Subpart C of Part 766— will send to borrowers with loans in Iowa read as follows: FSA–2510–IA, Notice of Availability of who are at least 90 days past due on their Loan Servicing to Borrowers Who Are loan payments. It provides information about 90 Days Past Due (For Use in Iowa the loan servicing that is available to the Only) borrower. As stated below on the notification, the borrower is to respond This appendix contains the notification within 60 days from receiving the (form letter) that the Farm Service Agency notification (see § 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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BILLING CODE 3410–KS–C conveyance offer if the value of the Authority: 5 U.S.C. 301, 7 U.S.C. 1989, 25 Appendix C to Subpart C of Part 766 property to be conveyed is less than the U.S.C. 490. [Removed] FLP debt. ■ 23. Amend § 772.9 by revising * * * * * ■ 17. Remove appendix C to subpart C. paragraph (c) to read as follows: ■ 21. Amend § 766.357 by revising § 772.9 Releases. Subpart H—Loan Liquidation paragraphs (b)(5) and (c)(3) to read as * * * * * § 766.352 [Amended] follows: (c) Servicing of debt not satisfied ■ 18. Amend § 766.352 in paragraph § 766.357 Involuntary liquidation of real property and chattel. through liquidation. Balances remaining (a)(5) by removing the words ‘‘subpart B after the sale or liquidation of the of 7 CFR part 1956’’ and adding the * * * * * security will be serviced in accordance words ‘‘part 761, subpart F of this (b) * * * with part 761, subpart F of this chapter chapter and part 3 of this title’’ in their (5) If an unpaid balance on the FLP and part 3 of this title. place. loan remains after the foreclosure sale of ■ 24. Revise § 772.13 to read as follows: § 766.353 [Amended] the property, the Agency will service the account in accordance with part ■ 19. Amend § 766.353 in paragraph § 772.13 Delinquent account servicing. 761, subpart F of this chapter and part (a)(8) by removing the words ‘‘subpart B 3 of this title. (a) AMP loans. If the borrower does of 7 CFR part 1956 before or in (c) * * * not make arrangements to cure the conjunction with the’’ and adding the default after notice by the Agency and words ‘‘part 761, subpart F of this (3) If an unpaid balance on the FLP is not eligible for reamortization in chapter before, or in conjunction with, loan remains after the sale of the accordance with § 772.14, the Agency the’’ in their place. repossessed property, the Agency will will liquidate the account in accordance ■ 20. Amend § 766.354 by revising service the account in accordance with with § 772.16. Delinquent AMP loans paragraph (a)(6) to read as follows: part 761, subpart F of this chapter and will be serviced in accordance with part part 3 of this title. § 766.354 Voluntary conveyance of chattel. 761, subpart F of this chapter and part (a) * * * PART 772—FARM LOAN PROGRAMS, 3 of this title. (6) Complete debt settlement SERVICING MINOR PROGRAM LOANS (b) IMP loans. Delinquent IMP loans application in accordance with part 761, will be serviced in accordance with part subpart F of this chapter before, or in ■ 22. The authority citation for part 772 761, subpart F of this chapter and part conjunction with, the voluntary continues to read as follows: 3 of this title.

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PART 792—[REMOVED] PART 1956—DEBT SETTLEMENT Subpart C—Debt Settlement— Community and Business Programs ■ 25. Under the authority of 31 U.S.C. ■ 29. The authority citation for part 3717, remove part 792. 1956 continues to read as follows: ■ 31. Amend § 1956.101 by adding a PART 1403—[REMOVED] Authority: 5 U.S.C. 301; and 7 U.S.C. sentence at the end of the section to 1989. read as follows. ■ 26. Under the authority of 15 U.S.C. Subpart B—Debt Settlement—Farm § 1956.101 Purpose. 714b, remove part 1403. Loan Programs and Multi-Family Housing * * * The provisions of this subpart PART 1951—SERVICING AND do not apply to any program COLLECTIONS ■ 30. Amend § 1956.51 in the first administered by the Farm Service Agency as of June 17, 2020. ■ 27. The authority citation for part sentence by removing the words ‘‘the 1951 continues to read as follows: Farm Credit loan programs of the Farm Robert Johansson, Service Agency (FSA) and’’ and adding Chairman, Federal Crop Insurance Authority: 5 U.S.C. 301; 7 U.S.C 1932 note; a sentence at the end of the section. 7 U.S.C. 1989; 31 U.S.C. 3716; 42 U.S.C. Corporation Board. The addition reads as follows. 1480. Stephen L. Censky, Subpart C [Removed and Reserved] § 1956.51 Purpose. Vice Chairman, Commodity Credit * * * The provisions of this subpart Corporation, and Deputy Secretary of ■ 28. Remove and reserve subpart C, do not apply to any program Agriculture. consisting of §§ 1951.101 through administered by the Farm Service [FR Doc. 2020–09447 Filed 6–16–20; 8:45 am] 1951.150. Agency as of June 17, 2020. BILLING CODE 3410–KS–P

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