[Title 31 CFR ]
[Code of Federal Regulations (annual edition) - July 1, 2014 Edition]
[From the U.S. Government Publishing Office]



[[Page i]]



          Title 31

Money and Finance: Treasury


________________________

Parts 0 to 199

                         Revised as of July 1, 2014

          Containing a codification of documents of general
          applicability and future effect

          As of July 1, 2014
                    Published by the Office of the Federal Register
                    National Archives and Records Administration as a
                    Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 31:
          SUBTITLE A--Office of the Secretary of the Treasury        3
    SUBTITLE B--Regulations Relating to Money and Finance
          Chapter I--Monetary Offices, Department of the
          Treasury                                                 399
  Finding Aids:
      Table of CFR Titles and Chapters........................     441
      Alphabetical List of Agencies Appearing in the CFR......     461
      List of CFR Sections Affected...........................     471

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                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in
                       this volume use title,
                       part and section number.
                       Thus, 31 CFR 0.101 refers
                       to title 31, part 0,
                       section 101.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and
permanent rules published in the Federal Register by the Executive
departments and agencies of the Federal Government. The Code is divided
into 50 titles which represent broad areas subject to Federal
regulation. Each title is divided into chapters which usually bear the
name of the issuing agency. Each chapter is further subdivided into
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual
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    To determine whether a Code volume has been amended since its
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EFFECTIVE AND EXPIRATION DATES

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inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires
Federal agencies to display an OMB control number with their information
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as
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PAST PROVISIONS OF THE CODE

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``[RESERVED]'' TERMINOLOGY

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Federal Regulations. An agency may add regulatory information at a
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INCORPORATION BY REFERENCE

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This material, like any other properly issued regulation, has the force
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alphabetical list of agencies publishing in the CFR are also included in
this volume.

[[Page vii]]

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    Charles A. Barth,
    Director,
    Office of the Federal Register.
    July 1, 2014.







[[Page ix]]



                               THIS TITLE

    Title 31--Money and Finance: Treasury is composed of three volumes.
The parts in these volumes are arranged in the following order: Parts 0-
199, parts 200-499, and part 500 to end. The contents of these volumes
represent all current regulations codified under this title of the CFR
as of July 1, 2014.

    For this volume, Susannah C. Hurley was Chief Editor. The Code of
Federal Regulations publication program is under the direction of John
Hyrum Martinez, assisted by Ann Worley.

[[Page 1]]



                  TITLE 31--MONEY AND FINANCE: TREASURY




                   (This book contains parts 0 to 199)

  --------------------------------------------------------------------
                                                                    Part

SUBTITLE A--Office of the Secretary of the Treasury.........           0

          SUBTITLE B--Regulations Relating to Money and Finance

chapter i--Monetary Offices, Department of the Treasury.....          56


Abbreviation Used in This Chapter:
    C. P. D.= Commissioner of the Public Debt.

[[Page 3]]

           Subtitle A--Office of the Secretary of the Treasury

  --------------------------------------------------------------------

Part                                                                Page
0               Department of the Treasury Employee Rules of
                    Conduct.................................           5
1               Disclosure of records.......................          10
2               National security information...............          82
3               Claims regulations and indemnification of
                    Department of Treasury employees........          85
4               Employees' personal property claims.........          88
5               Treasury debt collection....................          89
6               Applications for awards under the Equal
                    Access to Justice Act...................         106
7               Employee inventions.........................         110
8               Practice before the Bureau of Alcohol,
                    Tobacco and Firearms....................         112
9               Effects of imported articles on the national
                    security................................         126
10              Practice before the Internal Revenue Service         128
11              Operation of vending facilities by the blind
                    on Federal property under the control of
                    the Department of the Treasury..........         169
12              Restriction of sale and distribution of
                    tobacco products........................         171
13              Procedures for providing assistance to State
                    and local governments in protecting
                    foreign diplomatic missions.............         172
14              Right to Financial Privacy Act..............         176
15              Post employment conflict of interest........         178
16              Regulations implementing the Program Fraud
                    Civil Remedies Act of 1986..............         184
17              Enforcement of nondiscrimination on the
                    basis of handicap in programs or
                    activities conducted by the Department
                    of the Treasury.........................         200

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18              Officials designated to perform the
                    functions and duties of certain offices
                    in case of absence, disability, or
                    vacancy.................................         206
19              Governmentwide debarment and suspension
                    (nonprocurement)........................         207
20              Governmentwide requirements for drug-free
                    workplace (financial assistance)........         229
21              New restrictions on lobbying................         235
25              Prepayment of foreign military sales loans
                    made by the Defense Security Assistance
                    Agency and foreign military sales loans
                    made by the Federal Financing Bank and
                    guaranteed by the Defense Security
                    Assistance Agency.......................         246
26              Environmental review of actions by
                    Multilateral Development Bands (MDBs)...         256
27              Civil penalty assessment for misuse of
                    Department of the Treasury names,
                    symbols, etc............................         259
28              Nondiscrimination on the basis of sex in
                    education programs or activities
                    receiving Federal financial assistance..         263
29              Federal benefit payments under certain
                    District of Columbia retirement programs         285
30              TARP standards for compensation and
                    corporate governance....................         321
31              Troubled Asset Relief Program...............         354
32              Payments in lieu of low income housing tax
                    credits.................................         360
33              Waivers for State innovation................         361
50              Terrorism Risk Insurance Program............         366

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PART 0_DEPARTMENT OF THE TREASURY EMPLOYEE RULES OF CONDUCT--Table of
Contents



                      Subpart A_General Provisions

Sec.
0.101 Purpose.
0.102 Policy.
0.103 Definitions.

                            Responsibilities

0.104 Designated Agency Ethics Official and Alternate Designated Agency
          Ethics Official.
0.105 Deputy Ethics Official.
0.106 Bureau Heads.
0.107 Employees.

                       Subpart B_Rules of Conduct

0.201 Political activity.
0.202 Strikes.
0.203 Gifts or gratuities from foreign governments.
0.204 Use of controlled substances and intoxicants.
0.205 Care of documents and data.
0.206 Disclosure of information.
0.207 Cooperation with official inquiries.
0.208 Falsification of official records.
0.209 Use of Government vehicles.
0.210 Conduct while on official duty or on Government property.
0.211 Soliciting, selling and canvassing.
0.212 Influencing legislation or petitioning Congress.
0.213 General conduct prejudicial to the Government.
0.214 Nondiscrimination.
0.215 Possession of weapons and explosives.
0.216 Privacy Act.
0.217 Personal financial interests.

                 Subpart C_Special Government Employees

0.301 Applicability of subpart B.
0.302 Service with other Federal agencies.

                  Subpart D_Advisers to the Department

0.401 Advisers to the Department.

    Authority: 5 U.S.C. 301.

    Source: 60 FR 28535, June 1, 1995, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 0.101  Purpose.

    (a) The Department of the Treasury Employee Rules of Conduct (Rules)
are separate from and additional to the Standards of Ethical Conduct for
Employees of the Executive Branch (Executive Branch-wide Standards) (5
CFR part 2635) and the Supplemental Standards of Ethical Conduct for
Employees of the Department of the Treasury (Treasury Supplemental
Standards) (to be codified at 5 CFR part 3101). The Rules prescribe
employee rules of conduct and procedure and provide for disciplinary
action for the violation of the Rules, the Treasury Supplemental
Standards, the Executive Branch-wide Standards, and any other rule,
regulation or law governing Department employees.
    (b) The Rules are not all-inclusive and may be modified by
interpretive guidelines and procedures issued by the Department's
bureaus. The absence of a specific published rule of conduct covering an
action does not constitute a condonation of that action or indicate that
the action would not result in corrective or disciplinary action.



Sec. 0.102  Policy.

    (a) All employees and officials of the Department are required to
follow the rules of conduct and procedure contained in the Rules, the
Treasury Supplemental Standards, the Executive Branch-wide Standards of
Ethical Conduct, the Employee Responsibilities and Conduct (5 CFR part
735), and any bureau issued rules.
    (b) Employees found in violation of the Rules, the Treasury
Supplemental Standards, the Executive Branch-wide Standards or any
applicable bureau rule may be instructed to take remedial or corrective
action to eliminate the conflict. Remedial action may include, but is
not limited to:
    (1) Reassignment of work duties;
    (2) Disqualification from a particular assignment;
    (3) Divestment of a conflicting interest; or
    (4) Other appropriate action.
    (c) Employees found in violation of the Rules, the Treasury
Supplemental Standards, the Executive Branch-wide Standards or any
applicable bureau rule may be disciplined in proportion to the gravity
of the offense committed, including removal. Disciplinary action will be
taken in accordance with applicable laws and regulations

[[Page 6]]

and after consideration of the employee's explanation and any mitigating
factors. Further, disciplinary action may include any additional penalty
prescribed by law.



Sec. 0.103  Definitions.

    The following definitions are used throughout this part:
    (a) Adviser means a person who provides advice to the Department as
a representative of an outside group and is not an employee or special
Government employee as those terms are defined in Sec. 0.103.
    (b) Bureau means:
    (1) Bureau of Alcohol, Tobacco and Firearms;
    (2) Bureau of Engraving and Printing;
    (3) Bureau of the Public Debt;
    (4) Departmental Offices;
    (5) Federal Law Enforcement Training Center;
    (6) Financial Management Service;
    (7) Internal Revenue Service;
    (8) Legal Division;
    (9) Office of the Comptroller of the Currency;
    (10) Office of the Inspector General;
    (11) Office of Thrift Supervision;
    (12) United States Customs Service;
    (13) United States Mint;
    (14) United States Secret Service; and
    (15) Any organization designated as a bureau by the Secretary
pursuant to appropriate authority.
    (c) Person means an individual, corporation and subsidiaries it
controls, company, association, firm, partnership, society, joint stock
company, or any other organization or institution as specified in 5 CFR
2635.102(k).
    (d) Regular employee or employee means an officer or employee of the
Department of the Treasury but does not include a special Government
employee.
    (e) Special Government employee means an officer or employee who is
retained, designated, appointed, or employed to perform temporary duties
either on a full-time or intermittent basis, with or without
compensation, for a period not to exceed 130 days during any consecutive
365-day period. See 18 U.S.C. 202(a).

                            Responsibilities



Sec. 0.104  Designated Agency Ethics Official and Alternate Designated
Agency Ethics Official.

    The Deputy General Counsel is the Department's Designated Agency
Ethics Official (DAEO). The DAEO is responsible for managing the
Department's ethics program, including coordinating ethics counseling
and interpreting questions of conflicts of interest and other matters
that arise under the Executive Branch-wide Standards and Treasury
Supplemental Standards and Rules. See 5 CFR 2638.203. The Senior Counsel
for Ethics is the Alternate Designated Agency Ethics Official.



Sec. 0.105  Deputy Ethics Official.

    The Chief Counsel or Legal Counsel for a bureau, or a designee, is
the Deputy Ethics Official for that bureau. The Legal Counsel for the
Financial Crimes Enforcement Network is the Deputy Ethics Official for
that organization. It is the responsibility of the Deputy Ethics
Official to give authoritative advice and guidance on conflicts of
interest and other matters arising under the Executive Branch-wide
Standards, Treasury Supplemental Standards, and the Rules.



Sec. 0.106  Bureau Heads.

    Bureau heads or designees are required to:
    (a) Provide all employees with a copy of Executive Order 12674, as
amended by Executive Order 12731, the Executive Branch-wide Standards,
the Treasury Supplemental Standards and the Rules; provide all new
employees with an explanation of the contents and application of the
Executive Branch-wide Standards, Treasury Supplemental Standards and the
Rules; and provide all departing employees with an explanation of the
applicable post-employment restrictions contained in 18 U.S.C. 207 and 5
CFR part 2641 and any other applicable law or regulation.
    (b) Provide guidance and assistance to supervisors and employees in
implementing and adhering to the rules and procedures included in the
Executive Branch-wide Standards and Treasury

[[Page 7]]

Supplemental Standards and Rules; obtain any necessary legal advice or
interpretation from the Designated Agency Ethics Official or a Deputy
Ethics Official; and inform employees as to how and from whom they may
obtain additional clarification or interpretation of the Executive
Branch-wide Standards, Treasury Supplemental Standards, Rules, and any
other relevant law, rule or regulation.
    (c) Take appropriate corrective or disciplinary action against an
employee who violates the Executive Branch-wide Standards, Treasury
Supplemental Standards or Rules, or any other applicable law, rule or
regulation, and against a supervisor who fails to carry out his
responsibilities in taking or recommending corrective or disciplinary
action when appropriate against an employee who has committed an
offense.



Sec. 0.107  Employees.

    (a) Employees are required to:
    (1) Read and follow the rules and procedures contained in the
Executive Branch-wide Standards, Treasury Supplemental Standards, and
Rules;
    (2) Request clarification or interpretation from a supervisor or
ethics official if the application of a rule contained in the Executive
Branch-wide Standards, Treasury Supplemental Standards, or Rules is not
clear;
    (3) Report to the Inspector General or to the appropriate internal
affairs office of the Bureau of Alcohol, Tobacco and Firearms, Customs
Service, Internal Revenue Service, or Secret Service, any information
indicating that an employee, former employee, contractor, subcontractor,
or potential contractor engaged in criminal conduct or that an employee
or former employee violated the Executive Branch-wide Standards or the
Treasury Supplemental Standards or Rules. Legal Division attorneys
acquiring this type of information during the representation of a bureau
shall report it to the appropriate Chief or Legal Counsel or the Deputy
General Counsel, who shall report such information to the Inspector
General or appropriate internal affairs office; and
    (4) Report to the Inspector General information defined in paragraph
(a)(3) of this section relating to foreign intelligence or national
security, as covered in Executive Order 12356. Legal Division attorneys
acquiring this type of information during the representation of a bureau
shall report it to the Deputy General Counsel, who shall report such
information to the Inspector General.
    (b) The confidentiality of the source of the information reported to
the Inspector General or the internal affairs office under this section
will be maintained to the extent appropriate under the circumstances.



                       Subpart B_Rules of Conduct



Sec. 0.201  Political activity.

    (a) Employees may:
    (1) Take an active part in political management or in political
campaigns to the extent permitted by law (5 U.S.C. 7321-7326); and
    (2) Vote as they choose and express their opinions on political
subjects and candidates.
    (b) Employees may not use their official authority or influence to
interfere with or affect election results.
    (c) Employees may be disqualified from employment for knowingly
supporting or advocating the violent overthrow of our constitutional
form of government.

    Note: The Hatch Act Reform Amendments of 1993 significantly reduced
the statutory restrictions on the political activity of most Department
employees. However, career members of the Senior Executive Service and
employees of the Secret Service, the Internal Revenue Service, Office of
Criminal Investigation, the Customs Service, Office of Investigative
Programs, and the Bureau of Alcohol, Tobacco and Firearms, Office of Law
Enforcement, remain subject to significant restrictions on their
political activities.



Sec. 0.202  Strikes.

    Employees shall not strike against the Government.



Sec. 0.203  Gifts or gratuities from foreign governments.

    (a) The United States Constitution prohibits employees from
accepting gifts, emoluments, offices, or titles from a foreign
government without the consent of the Congress. Congress has consented
to an employee accepting

[[Page 8]]

and retaining a gift from a foreign government that is of minimal value
and offered as a souvenir or mark of courtesy, unless otherwise
prohibited by bureau regulation (5 U.S.C. 7342). Minimal value is
prescribed in 41 CFR part 101-49 and was set at $225.00 on the date that
the Rules became effective.
    (b) All gifts exceeding minimal value, the refusal of which would
likely cause offense or embarrassment or otherwise adversely affect the
foreign relations of the United States, shall be accepted and deposited
with the Department within sixty days of acceptance. If the gift is
travel or expenses for travel taking place entirely outside the United
States, it shall be reported within thirty days (see 5 U.S.C.
7342(c)(1)(B)(ii)).
    (c) As used in paragraph (b) of this section, Deposit with the
Department means delivery to the Department Gift Unit or other
depository as authorized by the Treasury Directive on Foreign Gifts
(Treasury Directive 61-04).
    (d) All foreign gifts must be reported as prescribed in the Treasury
Directive on Foreign Gifts (Treasury Directive 61-04).



Sec. 0.204  Use of controlled substances and intoxicants.

    Employees shall not sell, use or possess controlled substances or
intoxicants in violation of the law while on Department property or
official duty, or use a controlled substance or intoxicant in a manner
that adversely affects their work performance.



Sec. 0.205  Care of documents and data.

    (a) Employees shall not conceal, remove, alter, destroy, mutilate or
access documents or data in the custody of the Federal Government
without proper authority.
    (b) Employees are required to care for documents according to
Federal law and regulation, and Department procedure (18 U.S.C. 2071, 5
U.S.C. 552, 552a).
    (c) The term documents includes, but is not limited to, any writing,
recording, computer tape or disk, blueprint, photograph, or other
physical object on which information is recorded.



Sec. 0.206  Disclosure of information.

    Employees shall not disclose official information without proper
authority, pursuant to Department or bureau regulation. Employees
authorized to make disclosures should respond promptly and courteously
to requests from the public for information when permitted to do so by
law (31 CFR 1.9, 1.10, and 1.28(b)).



Sec. 0.207  Cooperation with official inquiries.

    Employees shall respond to questions truthfully and under oath when
required, whether orally or in writing, and must provide documents and
other materials concerning matters of official interest when directed to
do so by competent Treasury authority.



Sec. 0.208  Falsification of official records.

    Employees shall not intentionally make false, misleading or
ambiguous statements, orally or in writing, in connection with any
matter of official interest. Matters of official interest include among
other things: Transactions with the public, government agencies or
fellow employees; application forms and other forms that serve as a
basis for appointment, reassignment, promotion or other personnel
action; vouchers; leave records and time and attendance records; work
reports of any nature or accounts of any kind; affidavits; entry or
record of any matter relating to or connected with an employee's duties;
and reports of any moneys or securities received, held or paid to, for
or on behalf of the United States.



Sec. 0.209  Use of Government vehicles.

    Employees shall not use Government vehicles for unofficial purposes,
including to transport unauthorized passengers. The use of Government
vehicles for transporting employees between their domiciles and places
of employment must be authorized by statute (See, e.g., 31 U.S.C. 1344).



Sec. 0.210  Conduct while on official duty or on Government property.

    Employees must adhere to the regulations controlling conduct when
they are on official duty or in or on Government property, including the
Treasury Building, Treasury Annex Building and grounds; the Bureau of
Engraving and Printing buildings and grounds; the

[[Page 9]]

United States Mint buildings and grounds; the grounds of the Federal Law
Enforcement Training Center; and Treasury-occupied General Services
Administration buildings and grounds (see 31 CFR parts 91, 407, 605,
700).



Sec. 0.211  Soliciting, selling and canvassing.

    Employees shall not solicit, make collections, canvass for the sale
of any article, or distribute literature or advertising in any space
occupied by the Department without appropriate authority.



Sec. 0.212  Influencing legislation or petitioning Congress.

    (a) Employees shall not use Government time, money, or property to
petition a Member of Congress to favor or oppose any legislation. This
prohibition does not apply to the official handling, through the proper
channels, of matters relating to legislation in which the Department of
the Treasury has an interest.
    (b) Employees, individually or collectively, may petition Congress
or Members of Congress or furnish information to either House of
Congress when not using Government time, money or property (5 U.S.C.
7211).



Sec. 0.213  General conduct prejudicial to the Government.

    Employees shall not engage in criminal, infamous, dishonest, or
notoriously disgraceful conduct, or any other conduct prejudicial to the
Government.



Sec. 0.214  Nondiscrimination.

    (a) Employees shall not discriminate against or harass any other
employee, applicant for employment or person dealing with the Department
on official business on the basis of race, color, religion, national
origin, sex, sexual orientation, age, or disability. Sexual harassment
is a form of sex discrimination and is prohibited by this section.
    (b) An employee who engages in discriminatory conduct may be
disciplined under these rules. However, this section does not create any
enforceable legal rights in any person.



Sec. 0.215  Possession of weapons and explosives.

    (a) Employees shall not possess firearms, explosives, or other
dangerous or deadly weapons, either openly or concealed, while on
Government property or official duty.
    (b) The prohibition in paragraph (a) of this section does not apply
to employees who are required to possess weapons or explosives in the
performance of their official duties.



Sec. 0.216  Privacy Act.

    Employees involved in the design, development, operation, or
maintenance of any system of records or in maintaining records subject
to the Privacy Act of 1974, as amended (5 U.S.C. 552a), shall comply
with the conduct regulations delineated in 31 CFR 1.28(b).



Sec. 0.217  Personal financial interests.

    (a) Employees may hold the following financial interests without
violating 18 U.S.C. 208(a):
    (1) The stocks or bonds of a publicly traded corporation with a
value of $1000 or less; and
    (2) The stocks or bonds in the investment portfolio of a diversified
mutual fund in which an employee has invested.
    (b) The Department has found that the financial interests listed in
paragraph (a) of this section are too remote and inconsequential to
affect the integrity of an employee's service.



                 Subpart C_Special Government Employees



Sec. 0.301  Applicability of subpart B.

    The rules of conduct contained in subpart B of this part apply to
special Government employees employed with the Treasury Department. The
regulations contained in Sec. 0.201 of subpart B, concerning political
activity, apply to special Government employees only on the days that
they serve the Department. Treasury bureaus are responsible for
informing special Government employees employed with them of the
applicability of bureau specific statutes or regulations.

[[Page 10]]



Sec. 0.302  Service with other Federal agencies.

    A special Government employee serving concurrently in the Department
and in a Federal agency other than the Department is required to inform
the Department and the agency in which he serves of the arrangement so
that appropriate administrative measures may be taken.



                  Subpart D_Advisers to the Department



Sec. 0.401  Advisers to the Department.

    (a) An adviser or advisory committee member includes an individual
who provides advice to the Department as a representative of an outside
group and is not an employee or special Government employee of the
Department. Questions concerning whether an individual serves the
Department in the capacity of an adviser, employee, or special
Government employee shall be addressed to the Designated Agency Ethics
Official or a Deputy Ethics Official.
    (b) Advisers or advisory committee members are not required to
follow the Rules and are not generally required by the Department to
file financial disclosure statements; nevertheless, they should be
guided by the regulations in this part covering such issues as public
disclosure of official information (Sec. 0.206), conduct (Sec. 0.211
and Sec. 0.213), and gifts or gratuities from Foreign governments
(Sec. 0.203).



PART 1_DISCLOSURE OF RECORDS--Table of Contents



                  Subpart A_Freedom of Information Act

Sec.
1.1 General.
1.2 Information made available.
1.3 Publication in the Federal Register.
1.4 Public inspection and copying.
1.5 Specific requests for other records.
1.6 Business information.
1.7 Fees for services.

Appendix A to Subpart A--Departmental Offices
Appendix B to Subpart A--Internal Revenue Service
Appendix C to Subpart A--United States Customs Service
Appendix D to Subpart A--United States Secret Service
Appendix E to Subpart A--Bureau of Alcohol, Tobacco and Firearms
Appendix F to Subpart A--Bureau of Engraving and Printing
Appendix G to Subpart A--Financial Management Service
Appendix H to Subpart A--United States Mint
Appendix I to Subpart A--Bureau of the Public Debt
Appendix J to Subpart A--Office of the Comptroller of the Currency
Appendix K to Subpart A--Federal Law Enforcement Training Center
Appendix L to Subpart A--Office of Thrift Supervision
Appendix M to Subpart A--Financial Crimes Enforcement Network

                  Subpart B_Other Disclosure Provisions

1.8 Scope.
1.9 Records not to be otherwise withdrawn or disclosed.
1.10 Oral information.
1.11 Testimony or the production of records in a court or other
          proceeding.
1.12 Regulations not applicable to official request.

                          Subpart C_Privacy Act

1.20 Purpose and scope of regulation.
1.21 Definitions.
1.22 Requirements relating to systems of records.
1.23 Publication in the Federal Register--Notices of systems of records,
          general exemptions, specific exemptions, review of all
          systems.
1.24 Disclosure of records to person other than the individual to whom
          they pertain.
1.25 Accounting of disclosures.
1.26 Procedures for notification and access to records pertaining to
          individuals--format and fees for request for access.
1.27 Procedures for amendment of records pertaining to individuals--
          format, agency review and appeal from initial adverse agency
          determination.
1.28 Training, rules of conduct, penalties for non-compliance.
1.29 Records transferred to Federal Records Center or National Archives
          of the United States.
1.30 Application to system of records maintained by Government
          contractors.
1.31 Sale or rental of mailing lists.
1.32 Use and disclosure of social security numbers.
1.34 Guardianship.
1.35 Information forms.
1.36 Systems exempt in whole or in part from provisions of 5 U.S.C. 552a
          and this part.

[[Page 11]]


Appendix A to Subpart C--Departmental Offices
Appendix B to Subpart C--Internal Revenue Service
Appendix C to Subpart C--United States Customs Service
Appendix D to Subpart C--United States Secret Service
Appendix E to Subpart C--Bureau of Alcohol, Tobacco and Firearms
Appendix F to Subpart C--Bureau of Engraving and Printing
Appendix G to Subpart C--Financial Management Service
Appendix H to Subpart C--United States Mint
Appendix I to Subpart C--Bureau of the Public Debt
Appendix J to Subpart C--Office of the Comptroller of the Currency
Appendix K to Subpart C--Federal Law Enforcement Training Center
Appendix L to Subpart C--Office of Thrift Supervision
Appendix M to Subpart C [Reserved]
Appendix N to Subpart C--Financial Crimes Network

    Authority: 5 U.S.C. 301 and 31 U.S.C. 321. Subpart A also issued
under 5 U.S.C. 552, as amended. Subpart C also issued under 5 U.S.C.
552a.

    Source: 52 FR 26305, July 14, 1987, unless otherwise noted.



                  Subpart A_Freedom of Information Act

    Source: 65 FR 40504, June 30, 2000, unless otherwise noted.



Sec. 1.1  General.

    (a) Purpose and scope. (1) This subpart contains the regulations of
the Department of the Treasury implementing the Freedom of Information
Act (FOIA), 5 U.S.C. 552, as amended by the Electronic Freedom of
Information Act Amendments of 1996. The regulations set forth procedures
for requesting access to records maintained by the Department of the
Treasury. These regulations apply to all components of the Department of
the Treasury. Any reference in this subpart to the Department or its
officials, employees, or records shall be deemed to refer also to the
components or their officials, employees, or records. Persons interested
in the records of a particular component should also consult the
appendix to this subpart that pertains to that component. In connection
with such republication, and at other appropriate times, components may
issue supplementary regulations applicable only to the component in
question, which are consistent with these regulations. In the event of
any actual or apparent inconsistency, these Departmental regulations
shall govern. Persons interested in the records of a particular
component should, therefore, also consult the Code of Federal
Regulations for any rules or regulations promulgated specifically with
respect to that component (see Appendices to this subpart for cross
references). The head of each component is hereby authorized to
substitute the officials designated and change the addresses specified
in the appendix to this subpart applicable to the components. The
components of the Department of the Treasury for the purposes of this
subpart are the following offices and bureaus:
    (i) The Departmental Offices, which include the offices of:
    (A) The Secretary of the Treasury, including immediate staff;
    (B) The Deputy Secretary of the Treasury, including immediate staff;
    (C) The Chief of Staff, including immediate staff;
    (D) The Executive Secretary of the Treasury and all offices
reporting to such official, including immediate staff;
    (E) Under Secretary (International Affairs) and all offices
reporting to such official, including immediate staff;
    (F) Assistant Secretary (International Economics and Development)
and all offices reporting to such official, including immediate staff;
    (G) Assistant Secretary (Financial Markets and Investment Policy)
and all offices reporting to such official, including immediate staff;
    (H) Under Secretary (Domestic Finance) and all offices reporting to
such official, including immediate staff;
    (I) Fiscal Assistant Secretary and all offices reporting to such
official, including immediate staff;
    (J) Assistant Secretary (Financial Institutions) and all offices
reporting to such official, including immediate staff;
    (K) Assistant Secretary (Financial Markets) and all offices
reporting to

[[Page 12]]

such official, including immediate staff;
    (L) Assistant Secretary (Financial Stability) and all offices
reporting to such official, including immediate staff;
    (M) Under Secretary (Terrorism & Financial Intelligence) and all
offices reporting to such official, including immediate staff;
    (N) Assistant Secretary (Terrorist Financing) and all offices
reporting to such official, including immediate staff;
    (O) Assistant Secretary (Intelligence and Analysis) and all offices
reporting to such official, including immediate staff;
    (P) General Counsel and all offices reporting to such official,
including immediate staff; except legal counsel to the components listed
in paragraphs (a)(1)(i)(W), (a)(1)(i)(X), (a)(1)(i)(Y), and (a)(1)(ii)
through (x) of this section;
    (Q) Treasurer of the United States including immediate staff;
    (R) Assistant Secretary (Legislative Affairs) and all offices
reporting to such official, including immediate staff;
    (S) Assistant Secretary (Public Affairs) and all offices reporting
to such official, including immediate staff;
    (T) Assistant Secretary (Economic Policy) and all offices reporting
to such official, including immediate staff;
    (U) Assistant Secretary (Tax Policy) and all offices reporting to
such official, including immediate staff;
    (V) Assistant Secretary (Management) and Chief Financial Officer,
and all offices reporting to such official, including immediate staff;
    (W) The Inspector General, and all offices reporting to such
official, including immediate staff;
    (X) The Treasury Inspector General for Tax Administration, and all
offices reporting to such official, including immediate staff;
    (Y) The Special Inspector General for the Troubled Asset Relief
Program, and all offices reporting to such official, including immediate
staff;
    (ii) Alcohol and Tobacco Tax and Trade Bureau.
    (iii) Bureau of Public Debt.
    (iv) Financial Management Service.
    (v) Internal Revenue Service.
    (vi) Comptroller of the Currency.
    (vii) Office of Thrift Supervision.
    (viii) Bureau of Engraving and Printing.
    (ix) United States Mint.
    (x) Financial Crimes Enforcement Network.
    (2) For purposes of this subpart, the office of the legal counsel
for the components listed in paragraphs (a)(1)(i)(W), (a)(1)(i)(X),
(1)(i)(Y) and (a)(1)(ii) through (x) of this section, are to be
considered a part of their respective component. Any office which is now
in existence or may hereafter be established, which is not specifically
listed or known to be a component of any of those listed above, shall be
deemed a part of the Departmental Offices for the purpose of these
regulations.
    (b) Definitions. As used in this subpart, the following terms shall
have the following meanings:
    (1) Agency has the meaning given in 5 U.S.C. 551(1) and 5 U.S.C.
552(f).
    (2) Appeal means a request for a review of an agency's determination
with regard to a fee waiver, category of requester, expedited
processing, or denial in whole or in part of a request for access to a
record or records.
    (3) Bureau means an entity of the Department of the Treasury that is
authorized to act independently in disclosure matters.
    (4) Business information means trade secrets or other commercial or
financial information.
    (5) Business submitter means any entity which provides business
information to the Department of the Treasury or its bureaus and which
has a proprietary interest in the information.
    (6) Computer software means tools by which records are created,
stored, and retrieved. Normally, computer software, including source
code, object code, and listings of source and object codes, regardless
of medium, are not agency records. However, when data are embedded
within the software and cannot be extracted without the software, the
software may have to be treated as an agency record. Proprietary (or
copyrighted) software is not an agency record.

[[Page 13]]

    (7) Confidential commercial information means records provided to
the government by a submitter that arguably contain material exempt from
release under Exemption 4 of the Freedom of Information Act, 5 U.S.C.
552(b)(4), because disclosure could reasonably be expected to cause
substantial competitive harm.
    (8) Duplication refers to the process of making a copy of a record
in order to respond to a FOIA request. Such copies can take the form of
paper copy, microform, audio-visual materials, or machine readable
documentation (e.g., magnetic tape or disk), among others.
    (9) Electronic records means those records and information which are
created, stored, and retrievable by electronic means. This ordinarily
does not include computer software, which is a tool by which to create,
store, or retrieve electronic records.
    (10) Request means any request for records made pursuant to 5 U.S.C.
552(a)(3).
    (11) Requester means any person who makes a request for access to
records.
    (12) Responsible official means a disclosure officer or the head of
the organizational unit having immediate custody of the records
requested, or an official designated by the head of the organizational
unit.
    (13) Review, for fee purposes, refers to the process of examining
records located in response to a commercial use request to determine
whether any portion of any record located is permitted to be withheld.
It also includes processing any records for disclosure; e.g., doing all
that is necessary to excise them and otherwise prepare them for release.
    (14) Search includes all time spent looking for material that is
responsive to a request, including page-by-page or line-by-line
identification of material within records. Searches may be done manually
or by automated means.

[65 FR 40504, June 30, 2000, as amended at 68 FR 55311, Sept. 25, 2003;
75 FR 743, Jan. 6, 2010]



Sec. 1.2  Information made available.

    (a) General. The FOIA (5 U.S.C. 552) provides for access to
information and records developed or maintained by Federal agencies. The
provisions of section 552 are intended to assure the right of the public
to information. Generally, this section divides agency information into
three major categories and provides methods by which each category of
information is to be made available to the public. The three major
categories of information are as follows:
    (1) Information required to be published in the Federal Register
(see Sec. 1.3);
    (2) Information required to be made available for public inspection
and copying or, in the alternative, to be published and offered for sale
(see Sec. 1.4); and
    (3) Information required to be made available to any member of the
public upon specific request (see Sec. 1.5).
    (b) Subject only to the exemptions and exclusions set forth in 5
U.S.C. 552(b) and (c), any person shall be afforded access to
information or records in the possession of any bureau of the Department
of the Treasury, subject to the regulations in this subpart and any
regulations of a bureau implementing or supplementing them.
    (c) Exemptions. (1) The disclosure requirements of 5 U.S.C. 552(a)
do not apply to certain matters which are exempt under 5 U.S.C. 552(b);
nor do the disclosure requirements apply to certain matters which are
excluded under 5 U.S.C. 552(c).
    (2) Even though an exemption described in 5 U.S.C. 552(b) may be
applicable to the information or records requested, a Treasury bureau
may, if not precluded by law, elect under the circumstances of that
request not to apply the exemption. The fact that the exemption is not
applied by a bureau in response to a particular request shall have no
precedential significance in processing other requests, but is merely an
indication that, in the processing of the particular request, the bureau
finds no necessity for applying the exemption.



Sec. 1.3  Publication in the Federal Register.

    (a) Requirement. Subject to the application of the exemptions and
exclusions in 5 U.S.C. 552(b) and (c) and subject to the limitations
provided in 5 U.S.C. 552(a)(1), each Treasury bureau

[[Page 14]]

shall, in conformance with 5 U.S.C. 552(a)(1), separately state, publish
and maintain current in the Federal Register for the guidance of the
public the following information with respect to that bureau:
    (1) Descriptions of its central and field organization and the
established places at which, the persons from whom, and the methods
whereby, the public may obtain information, make submittals or requests,
or obtain decisions;
    (2) Statements of the general course and method by which its
functions are channeled and determined, including the nature and
requirements of all formal and informal procedures available;
    (3) Rules of procedure, descriptions of forms available or the
places at which forms may be obtained, and instructions as to the scope
and contents of all papers, reports, or examinations;
    (4) Substantive rules of general applicability adopted as authorized
by law, and statements of general policy or interpretations of general
applicability formulated and adopted by the bureau; and
    (5) Each amendment, revision, or repeal of matters referred to in
paragraphs (a)(1) through (4) of this section.
    (b) The United States Government Manual. The functions of each
bureau are summarized in the description of the Department and its
bureaus in the United States Government Manual, which is issued annually
by the Office of the Federal Register.



Sec. 1.4  Public inspection and copying.

    (a) In general. Subject to the application of the exemptions and
exclusions described in 5 U.S.C. 552(b) and (c), each Treasury bureau
shall, in conformance with 5 U.S.C. 552(a)(2), make available for public
inspection and copying, or, in the alternative, promptly publish and
offer for sale the following information with respect to the bureau:
    (1) Final opinions, including concurring and dissenting opinions,
and orders, made in the adjudication of cases;
    (2) Those statements of policy and interpretations which have been
adopted by the bureau but are not published in the Federal Register;
    (3) Its administrative staff manuals and instructions to staff that
affect a member of the public;
    (4) Copies of all records, regardless of form or format, which have
been released to any person under 5 U.S.C. 552(a)(3), and which the
bureau determines have become or are likely to become the subject of
subsequent requests for substantially the same records because they are
clearly of interest to the public at large. The determination that
records have become or may become the subject of subsequent requests
shall be made by the Responsible Official (as defined at Sec.
1.1(b)(12)).
    (5) A general index of the records referred to in paragraph (a)(4)
of this section.
    (b) Information made available by computer telecommunications. For
records required to be made available for public inspection and copying
pursuant to 5 U.S.C. 552(a)(2) (paragraphs (a)(1) through (4) of this
section) which are created on or after November 1, 1996, as soon as
practicable but no later than one year after such records are created,
each bureau shall make such records available on the Internet.
    (c) Deletion of identifying details. To prevent a clearly
unwarranted invasion of personal privacy, or pursuant to an exemption in
5 U.S.C. 552(b), a Treasury bureau may delete information contained in
any matter described in paragraphs (a)(1) through (4) of this section
before making such matters available for inspection or publishing it.
The justification for the deletion shall be explained fully in writing,
and the extent of such deletion shall be indicated on the portion of the
record which is made available or published, unless including that
indication would harm an interest protected by the exemption in 5 U.S.C.
552(b) under which the deletion is made. If technically feasible, the
extent of the deletion shall be indicated at the place in the record
where the deletion was made.
    (d) Public reading rooms. Each bureau of the Department of the
Treasury shall make available for public inspection and copying, in a
reading room or otherwise, the material described in paragraphs (a)(1)
through (5) of this section. Fees for duplication shall be charged in
accordance with Sec. 1.7. See

[[Page 15]]

the appendices to this subpart for the location of established bureau
reading rooms.
    (e) Indexes. (1) Each bureau of the Department of the Treasury shall
maintain and make available for public inspection and copying current
indexes identifying any material described in paragraphs (a)(1) through
(3) of this section. In addition, each bureau shall promptly publish,
quarterly or more frequently, and distribute (by sale or otherwise)
copies of each index or supplement unless the head of each bureau (or a
delegate) determines by order published in the Federal Register that the
publication would be unnecessary and impractical, in which case the
bureau shall nonetheless provide copies of the index on request at a
cost not to exceed the direct cost of duplication.
    (2) Each bureau shall make the index referred to in paragraph (a)(5)
of this section available on the Internet by December 31, 1999.



Sec. 1.5  Specific requests for other records.

    (a) In general. (1) Except for records made available under 5 U.S.C.
552(a)(1) and (a)(2), but subject to the application of the exemptions
and exclusions described in 5 U.S.C. 552(b) and (c), each bureau of the
Department of the Treasury shall promptly make the requested records
available to any person in conformance with 5 U.S.C. 552(a)(3). The
request must conform in every respect with the rules and procedures of
this subpart and the applicable bureau's appendix to this subpart. Any
request or appeal from the initial denial of a request that does not
comply with the requirements in this subpart will not be considered
subject to the time constraints of paragraphs (h), (i), and (j) of this
section, unless and until the request is amended to comply. Bureaus
shall promptly advise the requester in what respect the request or
appeal is deficient so that it may be amended and resubmitted for
consideration in accordance with this subpart. If a requester does not
respond within 30 days to a communication from a bureau to amend the
request in order for it to be in conformance with this subpart, the
request file will be considered closed. When the request conforms with
the requirements of this subpart, bureaus shall make every reasonable
effort to comply with the request within the time constraints. If the
description of the record requested is of a type that is not maintained
by the bureau, the requester shall be so advised and the request shall
be returned to the requester.
    (2) This subpart applies only to records in the possession or
control of the bureau at the time of the request. Records considered to
be responsive to the request are those in existence on or before the
date of receipt of the request by the appropriate bureau official.
Requests for the continuing production of records created after the date
of the appropriate bureau official's receipt of the request shall not be
honored. Bureaus shall provide the responsive record or records in the
form or format requested if the record or records are readily
reproducible by the bureau in that form or format. Bureaus shall make
reasonable efforts to maintain their records in forms or formats that
are reproducible for the purpose of disclosure. For purposes of this
section, readily reproducible means, with respect to electronic format,
a record or records that can be downloaded or transferred intact to a
floppy disk, compact disk (CD), tape, or other electronic medium using
equipment currently in use by the office or offices processing the
request. Even though some records may initially be readily reproducible,
the need to segregate exempt from nonexempt records may cause the
releasable material to not be readily reproducible.
    (3) Requests for information classified pursuant to Executive Order
12958, ``Classified National Security Information,'' require the
responsible bureau to review the information to determine whether it
continues to warrant classification. Information which no longer
warrants classification under the Executive Order's criteria shall be
declassified and made available to the requester, unless the information
is otherwise exempt from disclosure.
    (4) When a bureau receives five or more requests for substantially
the same records, it shall place those requests in front of an existing
request backlog that the responsible official

[[Page 16]]

may have. Upon completion of processing, the released records shall be
made available in the bureau's public reading room, and if created on or
after November 1, 1996, shall be made available in the electronic
reading room of the bureau's web site.
    (b) Form of request. In order to be subject to the provisions of
this section, the following must be satisfied.
    (1) The request for records shall be made in writing, signed by the
person making the request, and state that it is made pursuant to the
Freedom of Information Act, 5 U.S.C. 552, or this subpart.
    (2) The request shall indicate whether the requester is a commercial
user, an educational institution, non-commercial scientific institution,
representative of the news media, or ``other'' requester, subject to the
fee provisions described in Sec. 1.7. In order for the Department to
determine the proper category for fee purposes as defined in this
section, a request for records shall also state how the records released
will be used. This information shall not be used to determine the
releasibility of any record or records. A determination of the proper
category of requester shall be based upon a review of the requester's
submission and the bureau's own records. Where a bureau has reasonable
cause to doubt the use to which a requester will put the records sought,
or where that use is not clear from the request itself, bureaus should
seek additional clarification before assigning the request to a specific
category. The categories of requesters are defined as follows:
    (i) Commercial. A commercial use request refers to a request from or
on behalf of one who seeks information for a use or purpose that
furthers the commercial, trade, or profit interests of the requester or
the person on whose behalf the request is made, which can include
furthering those interests through litigation. The bureaus may determine
from the use specified in the request that the requester is a commercial
user.
    (ii) Educational institution. This refers to a preschool, a public
or private elementary or secondary school, an institution of graduate
higher education, an institution of undergraduate higher education, an
institution of professional education, and an institution of vocational
education, which operates a program or programs of scholarly research.
This category does not include requesters wanting records for use in
meeting individual academic research or study requirements.
    (iii) Non-commercial scientific institution. This refers to an
institution that is not operated on a ``commercial'' basis as that term
is defined in paragraph (b)(2)(i) of this section, and which is operated
solely for the purpose of conducting scientific research, the results of
which are not intended to promote any particular product or industry.
    (iv) Representative of the news media. This refers to any person
actively gathering news for an entity that is organized and operated to
publish or broadcast news to the public. The term news means information
that is about current events or that would be of current interest to the
public. Examples of news media entities include television or radio
stations broadcasting to the public at large, and publishers of
periodicals (but only in those instances when they can qualify as
disseminators of ``news'') who make their products available for
purchase or subscription by the general public. These examples are not
intended to be all-inclusive. In the case of ``freelance'' journalists,
they may be regarded as working for a news organization if they can
demonstrate a solid basis for expecting publication through that
organization, even though not actually employed by it. A publication
contract would be the clearest proof, but bureaus may also look to the
past publication record of a requester in making this determination.
    (v) ``Other'' Requester. This refers to a requester who does not
fall within any of the previously described categories.
    (3) The request must be properly addressed to the bureau that
maintains the record. The functions of each bureau are summarized in The
United States Government Manual which is issued annually and is
available from the Superintendent of Documents. Both the envelope and
the request itself should be clearly marked ``Freedom of Information Act
Request.'' See

[[Page 17]]

the appendices to this subpart for the office or officer to which
requests shall be addressed for each bureau. A requester in need of
guidance in defining a request or determining the proper bureau to which
a request should be sent may contact Disclosure Services at 202/622-
0930, or may write to Disclosure Services, Department of the Treasury,
1500 Pennsylvania Avenue, NW, Washington, DC 20220. Requesters may
access the ``FOIA Home Page'' at the Department of the Treasury World
Wide Web site at: http://www.treas.gov.
    (4) The request must reasonably describe the records in accordance
with paragraph (d) of this section.
    (5) The request must set forth the address where the person making
the request wants to be notified about whether or not the request will
be granted.
    (6) The request must state whether the requester wishes to inspect
the records or desires to have a copy made and furnished without first
inspecting them.
    (7) The request must state the firm agreement of the requester to
pay the fees for search, duplication, and review as may ultimately be
determined in accordance with Sec. 1.7. The agreement may state the
upper limit (but not less than $25) that the requester is willing to pay
for processing the request. A request that fees be waived or reduced may
accompany the agreement to pay fees and shall be considered to the
extent that such request is made in accordance with Sec. 1.7(d) and
provides supporting information to be measured against the fee waiver
standard set forth in Sec. 1.7(d)(1). The requester shall be notified
in writing of the decision to grant or deny the fee waiver. A requester
shall be asked to provide an agreement to pay fees when the request for
a fee waiver or reduction is denied and the initial request for records
does not include such agreement. If a requester has an outstanding
balance of search, review, or duplication fees due for FOIA request
processing, the requirements of this paragraph are not met until the
requester has remitted the outstanding balance due.
    (c) Requests for records not in control of bureau; referrals;
consultations. (1) When a requested record is in the possession or under
the control of a bureau of the Department other than the office to which
the request is addressed, the request for the record shall be
transferred to the appropriate bureau and the requester notified. This
referral shall not be considered a denial of access within the meaning
of these regulations. The bureau of the Department to which this
referral is made shall treat this request as a new request addressed to
it and the time limits for response set forth by paragraph (h)(1) of
this section shall begin when the referral is received by the designated
office or officer of the bureau.
    (2) When a requested record has been created by an agency or
Treasury bureau other than the Treasury bureau possessing the record,
the bureau having custody of the record shall refer the record to the
originating agency or Treasury bureau for a direct response to the
requester. The requester shall be informed of the referral unless
otherwise instructed by the originating agency. This is not a denial of
a FOIA request; thus no appeal rights accrue to the requester.
    (3) When a FOIA request is received for a record created by a
Treasury bureau that includes information originated by another bureau
of the Department of the Treasury or another agency, the record shall be
referred to the originating agency or bureau for review and
recommendation on disclosure. The agency or bureau shall respond to the
referring office. The Treasury bureau shall not release any such records
without prior consultation with the originating bureau or agency.
    (4) In certain instances and at the discretion of the Departmental
Offices, requests having impact on two or more bureaus of the Department
may be coordinated by the Departmental Offices.
    (d) Reasonable description of records. The request for records must
describe the records in reasonably sufficient detail to enable employees
who are familiar with the subject area of the request to locate the
records without placing an unreasonable burden upon the Department.
Whenever possible, a request should include specific information about
each record sought, such as the date, title or name, author, recipients,

[[Page 18]]

and subject matter of the record. If the Department determines that the
request does not reasonably describe the records sought, the requester
shall be given an opportunity to provide additional information. Such
opportunity may, when necessary, involve a discussion with knowledgeable
Department of the Treasury personnel. The reasonable description
requirement shall not be used by officers or employees of the Department
of the Treasury to improperly withhold records from the public.
    (e) Requests for expedited processing. (1) When a request for
records includes a request for expedited processing, both the envelope
and the request itself must be clearly marked, ``Expedited Processing
Requested.''
    (2) Records will be processed as soon as practicable when a
requester asks for expedited processing in writing and is granted such
expedited treatment by the Department. The requester must demonstrate a
compelling need for expedited processing of the requested records. A
compelling need is defined as follows:
    (i) Failure to obtain the requested records on an expedited basis
could reasonably be expected to pose an imminent threat to the life or
physical safety of an individual. The requester shall fully explain the
circumstances warranting such an expected threat so that the Department
may make a reasoned determination that a delay in obtaining the
requested records could pose such a threat; or
    (ii) With respect to a request made by a person primarily engaged in
disseminating information, urgency to inform the public concerning
actual or alleged Federal Government activity. A person ``primarily
engaged in disseminating information'' does not include individuals who
are engaged only incidentally in the dissemination of information. The
standard of ``urgency to inform'' requires that the records requested
pertain to a matter of current exigency to the American public and that
delaying a response to a request for records would compromise a
significant recognized interest to and throughout the American general
public. The requester must adequately explain the matter or activity and
why the records sought are necessary to be provided on an expedited
basis.
    (3) A demonstration of a compelling need by a person making a
request for expedited processing shall be made by a statement certified
by the requester to be true and correct to the best of his or her
knowledge and belief. The statement must be in the form prescribed by 28
U.S.C. 1746, ``I declare under penalty of perjury that the foregoing is
true and correct to the best of my knowledge and belief. Executed on
[date].''
    (4) Upon receipt by the appropriate bureau official, a request for
expedited processing shall be considered and a determination as to
whether to grant or deny the request for expedited processing shall be
made, and the requester notified, within 10 calendar days of the date of
the request. However, in no event shall the bureau have fewer than five
days (excluding Saturdays, Sundays, and legal public holidays) from the
date of receipt of the request for such processing. The determination to
grant or deny a request for expedited processing may be made solely on
the information contained in the initial letter requesting expedited
treatment.
    (5) Appeals of initial determinations to deny expedited processing
must be made within 10 calendar days of the date of the initial letter
of determination denying expedited processing. Both the envelope and the
appeal itself shall be clearly marked, ``Appeal for Expedited
Processing.''
    (6) An appeal determination regarding expedited processing shall be
made, and the requester notified, within 10 days (excluding Saturdays,
Sundays, and legal public holidays) from the date of receipt of the
appeal.
    (f) Date of receipt of request. A request for records shall be
considered to have been received on the date on which a complete request
containing the information required by paragraph (b) of this section has
been received. A determination that a request is deficient in any
respect is not a denial of access, and such determinations are not
subject to administrative appeal. Requests shall be stamped with the
date of receipt by the office prescribed in the appropriate appendix. As
soon as the date of receipt has been established, the requester shall be
so informed and shall

[[Page 19]]

also be advised when to expect a response. The acknowledgment of receipt
requirement shall not apply if a disclosure determination will be issued
prior to the end of the 20-day time limit.
    (g) Search for record requested. Department of the Treasury
employees shall search to identify and locate requested records,
including records stored at Federal Records Centers. Searches for
records maintained in electronic form or format may require the
application of codes, queries, or other minor forms of programming to
retrieve the requested records. Wherever reasonable, searches shall be
done by electronic means. However, searches of electronic records are
not required when such searches would significantly interfere with the
operation of a Treasury automated information system or would require
unreasonable effort to conduct. The Department of the Treasury is not
required under 5 U.S.C. 552 to tabulate or compile information for the
purpose of creating a record or records that do not exist.
    (h) Initial determination--(1) In general. The officers designated
in the appendices to this part shall make initial determinations either
to grant or to deny in whole or in part requests for records. Such
officers shall respond in the approximate order of receipt of the
requests, to the extent consistent with sound administrative practice.
These determinations shall be made and the requester notified within 20
days (excepting Saturdays, Sundays, and legal public holidays) after the
date of receipt of the request, as determined in accordance with
paragraph (f) of this section, unless the designated officer invokes an
extension pursuant to paragraph (j)(1) of this section or the requester
otherwise agrees to an extension of the 20-day time limitation.
    (2) Granting of request. If the request is granted in full or in
part, and if the requester wants a copy of the records, a copy of the
records shall be mailed to the requester, together with a statement of
the applicable fees, either at the time of the determination or shortly
thereafter.
    (3) Inspection of records. In the case of a request for inspection,
the requester shall be notified in writing of the determination, when
and where the requested records may be inspected, and of the fees
incurred in complying with the request. The records shall then promptly
be made available for inspection at the time and place stated, in a
manner that will not interfere with Department of the Treasury
operations and will not exclude other persons from making inspections.
The requester shall not be permitted to remove the records from the room
where inspection is made. If, after making inspection, the requester
desires copies of all or a portion of the requested records, copies
shall be furnished upon payment of the established fees prescribed by
Sec. 1.7. Fees may be charged for search and review time as stated in
Sec. 1.7.
    (4) Denial of request. If it is determined that the request for
records should be denied in whole or in part, the requester shall be
notified by mail. The letter of notification shall:
    (i) State the exemptions relied on in not granting the request;
    (ii) If technically feasible, indicate the amount of information
deleted at the place in the record where such deletion is made (unless
providing such indication would harm an interest protected by the
exemption relied upon to deny such material);
    (iii) Set forth the name and title or position of the responsible
official;
    (iv) Advise the requester of the right to administrative appeal in
accordance with paragraph (i) of this section; and
    (v) Specify the official or office to which such appeal shall be
submitted.
    (5) No records found. If it is determined, after a thorough search
for records by the responsible official or his delegate, that no records
have been found to exist, the responsible official will so notify the
requester in writing. The letter of notification will advise the
requester of the right to administratively appeal the Department's
determination that no records exist (i.e., to challenge the adequacy of
the Department's search for responsive records) in accordance with
paragraph (i) of this section. The response shall specify the official
or office to which the appeal shall be submitted for review.
    (i) Administrative appeal. (1)(i) A requester may appeal a
Department of

[[Page 20]]

the Treasury initial determination when:
    (A) Access to records has been denied in whole or in part;
    (B) There has been an adverse determination of the requester's
category as provided in Sec. 1.7(d)(4);
    (C) A request for fee waiver or reduction has been denied;
    (D) It has been determined that no responsive records exist; or
    (E) A request for expedited processing has been denied.
    (ii) An appeal, other than an appeal for expedited processing, must
be submitted within 35 days of the date of the initial determination or
the date of the letter transmitting the last records released, whichever
is later, except in the case of a denial for expedited processing. An
appeal of a denial for expedited processing must be made within 10 days
of the date of the initial determination to deny expedited processing
(see Sec. 1.5(e)(5)). All appeals must be submitted to the official
specified in the appropriate appendix to this subpart whose title and
address should also have been included in the initial determination. An
appeal that is improperly addressed shall be considered not to have been
received by the Department until the office specified in the appropriate
appendix receives the appeal.
    (2) The appeal shall--
    (i) Be made in writing and signed by the requester or his or her
representative;
    (ii) Be addressed to and mailed or hand delivered within 35 days (or
within 10 days when expedited processing has been denied) of the date of
the initial determination, or the date of the letter transmitting the
last records released, whichever is later, to the office or officer
specified in the appropriate appendix to this subpart and also in the
initial determination. (See the appendices to this subpart for the
address to which appeals made by mail should be addressed);
    (iii) Set forth the address where the requester desires to be
notified of the determination on appeal;
    (iv) Specify the date of the initial request and date of the letter
of initial determination, and, where possible, enclose a copy of the
initial request and the initial determination being appealed.
    (3)(i) Appeals shall be stamped with the date of their receipt by
the office to which addressed, and shall be processed in the approximate
order of their receipt. The receipt of the appeal shall be acknowledged
by the office or officer specified in the appropriate appendix to this
subpart and the requester advised of the date the appeal was received
and the expected date of response. The decision to affirm the initial
determination (in whole or in part) or to grant the request for records
shall be made and notification of the determination mailed within 20
days (exclusive of Saturdays, Sundays, and legal public holidays) after
the date of receipt of the appeal, unless extended pursuant to paragraph
(j)(1) of this section. If it is decided that the initial determination
is to be upheld (in whole or in part) the requester shall be--
    (A) Notified in writing of the denial;
    (B) Notified of the reasons for the denial, including the FOIA
exemptions relied upon;
    (C) Notified of the name and title or position of the official
responsible for the determination on appeal; and
    (D) Provided with a statement that judicial review of the denial is
available in the United States District Court for the judicial district
in which the requester resides or has a principal place of business, the
judicial district in which the requested records are located, or the
District of Columbia in accordance with 5 U.S.C. 552(a)(4)(B).
    (ii) If the initial determination is reversed on appeal, the
requester shall be so notified and the request shall be processed
promptly in accordance with the decision on appeal.
    (4) If a determination cannot be made within the 20-day period (or
within a period of extension pursuant to paragraph (j)(1) of this
section), the requester may be invited to agree to a voluntary extension
of the 20-day appeal period. This voluntary extension shall not
constitute a waiver of the right of the requester ultimately to commence
an action in a United States district court.

[[Page 21]]

    (j) Time extensions; unusual circumstances. (1) In unusual
circumstances, the time limitations specified in paragraphs (h) and (i)
of this section may be extended by written notice from the official
charged with the duty of making the determination to the person making
the request or appeal setting forth the reasons for this extension and
the date on which the determination is expected to be sent. As used in
this paragraph, unusual circumstances means, but only to the extent
reasonably necessary to the proper processing of the particular
requests:
    (i) The need to search for and collect the requested records from
field facilities or other establishments that are separate from the
office processing the request;
    (ii) The need to search for, collect, and appropriately examine a
voluminous amount of separate and distinct records which are demanded in
a single request; or
    (iii) The need for consultation, which shall be conducted with all
practicable speed, with another agency having a substantial interest in
the determination of the request, or among two or more bureaus or
components of bureaus of the Department of the Treasury having
substantial subject matter interest therein.
    (2) Any extension or extensions of time shall not cumulatively total
more than 10 days (exclusive of Saturdays, Sundays, and legal public
holidays). However, if additional time is needed to process the request,
the bureau shall notify the requester and provide the requester an
opportunity to limit the scope of the request or arrange for an
alternative time frame for processing the request or a modified request.
The requester shall retain the right to define the desired scope of the
request, as long as it meets the requirements contained in this subpart.
    (3) Bureaus may establish multitrack processing of requests based on
the amount of work or time, or both, involved in processing requests.
    (4) If more than one request is received from the same requester, or
from a group of requesters acting in concert, and the Department
believes that such requests constitute a single request which would
otherwise satisfy the unusual circumstances specified in paragraph
(j)(1) of this section, and the requests involve clearly related
matters, the Department may aggregate these requests for processing
purposes.
    (k) Failure to comply. If a bureau of the Department of the Treasury
fails to comply with the time limits specified in paragraphs (h) or (i)
of this section , or the time extensions of paragraph (j) of this
section, any person making a request for records in accordance with
Sec. 1.5 shall be considered to have exhausted administrative remedies
with respect to the request. Accordingly, the person making the request
may initiate suit as set forth in paragraph (l) of this section.
    (l) Judicial review. If an adverse determination is made upon appeal
pursuant to paragraph (i) of this section, or if no determination is
made within the time limits specified in paragraphs (h) and (i) of this
section, together with any extension pursuant to paragraph (j)(1) of
this section or within the time otherwise agreed to by the requester,
the requester may commence an action in a United States district court
in the district in which he resides, in which his principal place of
business is located, in which the records are situated, or in the
District of Columbia, pursuant to 5 U.S.C. 552(a)(4).
    (m) Preservation of records. Under no circumstances shall records be
destroyed while they are the subject of a pending request, appeal, or
lawsuit under the FOIA.
    (n) Processing requests that are not properly addressed. A request
that is not properly addressed as specified in the appropriate appendix
to this subpart shall be forwarded to the appropriate bureau or bureaus
for processing. If the recipient of the request does not know the
appropriate bureau to forward it to, the request shall be forwarded to
the Departmental Disclosure Officer (Disclosure Services, DO), who will
determine the appropriate bureau. A request not addressed to the
appropriate bureau will be considered to have been received for purposes
of paragraph (f) of this section when the request has

[[Page 22]]

been received by the appropriate bureau office as designated in the
appropriate appendix to this subpart. An improperly addressed request,
when received by the appropriate bureau office, shall be acknowledged by
that bureau.



Sec. 1.6  Business information.

    (a) In general. Business information provided to the Department of
the Treasury by a business submitter shall not be disclosed pursuant to
a Freedom of Information Act request except in accordance with this
section.
    (b) Notice to business submitters. A bureau shall provide a business
submitter with prompt written notice of receipt of a request or appeal
encompassing its business information whenever required in accordance
with paragraph (c) of this section, and except as is provided in
paragraph (g) of this section. Such written notice shall either describe
the exact nature of the business information requested or provide copies
of the records or portions of records containing the business
information.
    (c) When notice is required. The bureau shall provide a business
submitter with notice of receipt of a request or appeal whenever:
    (1) The business submitter has in good faith designated the
information as commercially or financially sensitive information, or
    (2) The bureau has reason to believe that disclosure of the
information could reasonably be expected to cause substantial
competitive harm.
    (3) Notice of a request for business information falling within
paragraph (c)(1) or (2) of this section shall be required for a period
of not more than ten years after the date of submission unless the
business submitter requests, and provides acceptable justification for,
a specific notice period of greater duration.
    (4) The submitter's claim of confidentiality should be supported by
a statement by an authorized representative of the company providing
specific justification that the information in question is in fact
confidential commercial or financial information and has not been
disclosed to the public.
    (d) Opportunity to object to disclosure. (1) Through the notice
described in paragraph (b) of this section, a bureau shall afford a
business submitter ten days from the date of the notice (exclusive of
Saturdays, Sundays, and legal public holidays) to provide the bureau
with a detailed statement of any objection to disclosure. Such statement
shall specify all grounds for withholding any of the information under
any exemption of the Freedom of Information Act and, in the case of
Exemption 4, shall demonstrate why the information is considered to be a
trade secret or commercial or financial information that is privileged
or confidential. Information provided by a business submitter pursuant
to this paragraph may itself be subject to disclosure under the FOIA.
    (2) When notice is given to a submitter under this section, the
requester shall be advised that such notice has been given to the
submitter. The requester shall be further advised that a delay in
responding to the request may be considered a denial of access to
records and that the requester may proceed with an administrative appeal
or seek judicial review, if appropriate. However, the requester will be
invited to agree to a voluntary extension of time so that the bureau may
review the business submitter's objection to disclose.
    (e) Notice of intent to disclose. A bureau shall consider carefully
a business submitter's objections and specific grounds for nondisclosure
prior to determining whether to disclose business information. Whenever
a bureau decides to disclose business information over the objection of
a business submitter, the bureau shall forward to the business submitter
a written notice which shall include:
    (1) A statement of the reasons for which the business submitter's
disclosure objections were not sustained;
    (2) A description of the business information to be disclosed; and
    (3) A specified disclosure date which is not less than ten days
(exclusive of Saturdays, Sundays, and legal public holidays) after the
notice of the final decision to release the requested information has
been mailed to the submitter. Except as otherwise prohibited by law, a
copy of the disclosure notice

[[Page 23]]

shall be forwarded to the requester at the same time.
    (f) Notice of FOIA lawsuit. Whenever a requester brings suit seeking
to compel disclosure of business information covered by paragraph (c) of
this section, the bureau shall promptly notify the business submitter.
    (g) Exception to notice requirement. The notice requirements of this
section shall not apply if:
    (1) The bureau determines that the information shall not be
disclosed;
    (2) The information lawfully has been published or otherwise made
available to the public; or
    (3) Disclosure of the information is required by law (other than 5
U.S.C. 552).



Sec. 1.7  Fees for services.

    (a) In general. This fee schedule is applicable uniformly throughout
the Department of the Treasury and pertains to requests processed under
the Freedom of Information Act. Specific levels of fees are prescribed
for each of the following categories of requesters. Requesters are asked
to identify the applicable fee category they belong to in their initial
request in accordance with Sec. 1.5(b).
    (1) Commercial use requesters. These requesters are assessed charges
which recover the full direct costs of searching for, reviewing, and
duplicating the records sought. Commercial use requesters are not
entitled to two hours of free search time or 100 free pages of
duplication of documents. Moreover, when a request is received for
disclosure that is primarily in the commercial interest of the
requester, the Department is not required to consider a request for a
waiver or reduction of fees based upon the assertion that disclosure
would be in the public interest. The Department may recover the cost of
searching for and reviewing records even if there is ultimately no
disclosure of records, or no records are located.
    (2) Educational and Non-Commercial Scientific Institution
Requesters. Records shall be provided to requesters in these categories
for the cost of duplication alone, excluding charges for the first 100
pages. To be eligible, requesters must show that the request is made
under the auspices of a qualifying institution and that the records are
not sought for a commercial use, but are sought in furtherance of
scholarly (if the request is from an educational institution) or
scientific (if the request is from a non-commercial scientific
institution) research. These categories do not include requesters who
want records for use in meeting individual academic research or study
requirements.
    (3) Requesters who are Representatives of the News Media. Records
shall be provided to requesters in this category for the cost of
duplication alone, excluding charges for the first 100 pages.
    (4) All Other Requesters. Requesters who do not fit any of the
categories described above shall be charged fees that will recover the
full direct cost of searching for and duplicating records that are
responsive to the request, except that the first 100 pages of
duplication and the first two hours of search time shall be furnished
without charge. The Department may recover the cost of searching for
records even if there is ultimately no disclosure of records, or no
records are located. Requests from persons for records about themselves
filed in the Department's systems of records shall continue to be
treated under the fee provisions of the Privacy Act of 1974 which permit
fees only for duplication, after the first 100 pages are furnished free
of charge.
    (b) Fee waiver determination. Where the initial request includes a
request for reduction or waiver of fees, the responsible official shall
determine whether to grant the request for reduction or waiver before
processing the request and notify the requester of this decision. If the
decision does not waive all fees, the responsible official shall advise
the requester of the fact that fees shall be assessed and, if
applicable, payment must be made in advance pursuant to Sec. 1.7(e)(2).
    (c) When fees are not charged. (1) No fee shall be charged for
monitoring a requester's inspection of records.
    (2) Fees shall be charged in accordance with the schedule contained
in paragraph (g) of this section for services rendered in responding to
requests for records, unless any one of the following applies:

[[Page 24]]

    (i) Services were performed without charge;
    (ii) The cost of collecting a fee would be equal to or greater than
the fee itself; or,
    (iii) The fees were waived or reduced in accordance with paragraph
(d) of this section.
    (d) Waiver or reduction of fees. (1) Fees may be waived or reduced
on a case-by-case basis in accordance with this paragraph by the
official who determines the availability of the records, provided such
waiver or reduction has been requested in writing. Fees shall be waived
or reduced by this official when it is determined, based upon the
submission of the requester, that a waiver or reduction of the fees is
in the public interest because furnishing the information is likely to
contribute significantly to public understanding of the operations or
activities of the government and is not primarily in the commercial
interest of the requester. Fee waiver/reduction requests shall be
evaluated against the fee waiver policy guidance issued by the
Department of Justice on April 2, 1987.
    (2) Normally no charge shall be made for providing records to state
or foreign governments, international governmental organizations, or
local government agencies or offices.
    (3) Appeals from denials of requests for waiver or reduction of fees
shall be decided in accordance with the criteria set forth in paragraph
(d)(1) of this section by the official authorized to decide appeals from
denials of access to records. Appeals shall be addressed in writing to
the office or officer specified in the appropriate appendix to this
subpart within 35 days of the denial of the initial request for waiver
or reduction and shall be decided within 20 days (excluding Saturdays,
Sundays, and legal public holidays).
    (4) Appeals from an adverse determination of the requester's
category as described in Sec. 1.5(b)(2) and provided in Sec. 1.5(i)(1)
shall be decided by the official authorized to decide appeals from
denials of access to records and shall be based upon a review of the
requester's submission and the bureau's own records. Appeals shall be
addressed in writing to the office or officer specified in the
appropriate appendix to this subpart within 35 days of the date of the
bureau's determination of the requester's category and shall be decided
within 20 days (excluding Saturdays, Sundays, and legal public
holidays).
    (e) Advance notice of fees. (1) When the fees for processing the
request are estimated to exceed the limit set by the requester, and that
amount is less than $250, the requester shall be notified of the
estimated costs. The requester must provide an agreement to pay the
estimated costs; however, the requester shall also be given an
opportunity to reformulate the request in an attempt to reduce fees.
    (2) If the requester has failed to state a limit and the costs are
estimated to exceed $250.00, the requester shall be notified of the
estimated costs and must pre-pay such amount prior to the processing of
the request, or provide satisfactory assurance of full payment if the
requester has a history of prompt payment of FOIA fees. The requester
shall also be given an opportunity to reformulate the request in such a
way as to constitute a request for responsive records at a reduced fee.
    (3) When the Department or a bureau of the Department acts under
paragraphs (e)(1) or (2) of this section, the administrative time limits
of 20 days (excluding Saturdays, Sundays, and legal public holidays)
from receipt of initial requests or appeals, plus extensions of these
time limits, shall begin only after fees have been paid, a written
agreement to pay fees has been provided, or a request has been
reformulated.
    (f) Form of payment. (1) Payment may be made by check or money order
payable to the Treasury of the United States or the relevant bureau of
the Department of the Treasury.
    (2) The Department of the Treasury reserves the right to request
prepayment after a request is processed and before documents are
released.
    (3) When costs are estimated or determined to exceed $250, the
Department shall either obtain satisfactory assurance of full payment of
the estimated cost where the requester has a history of prompt payment
of FOIA fees or require a requester to make an

[[Page 25]]

advance payment of the entire estimated or determined fee before
continuing to process the request.
    (4) If a requester has previously failed to pay a fee within 30 days
of the date of the billing, the requester shall be required to pay the
full amount owed plus any applicable interest, and to make an advance
payment of the full amount of the estimated fee before the Department
begins to process a new request or the pending request. Whenever
interest is charged, the Department shall begin assessing interest on
the 31st day following the day on which billing was sent. Interest shall
be at the rate prescribed in 31 U.S.C. 3717. In addition, the Department
shall take all steps authorized by the Debt Collection Act of 1982, as
amended by the Debt Collection Improvement Act of 1996, including
administrative offset pursuant to 31 CFR Part 5, disclosure to consumer
reporting agencies and use of collection agencies, to effect payment.
    (g) Amounts to be charged for specific services. The fees for
services performed by a bureau of the Department of the Treasury shall
be imposed and collected as set forth in this paragraph.
    (1) Duplicating records. All requesters, except commercial
requesters, shall receive the first 100 pages duplicated without charge.
Absent a determination to waive fees, a bureau shall charge requesters
as follows:
    (i) $.20 per page, up to 8\1/2\x14, made by photocopy or
similar process.
    (ii) Photographs, films, and other materials--actual cost of
duplication.
    (iii) Other types of duplication services not mentioned above--
actual cost.
    (iv) Material provided to a private contractor for copying shall be
charged to the requester at the actual cost charged by the private
contractor.
    (2) Search services. Bureaus shall charge for search services
consistent with the following:
    (i) Searches for other than electronic records. The Department shall
charge for search time at the salary rate(s) (basic pay plus 16 percent)
of the employee(s) making the search. However, where a single class of
personnel is used exclusively (e.g., all administrative/clerical, or all
professional/executive), an average rate for the range of grades
typically involved may be established. This charge shall include
transportation of personnel and records necessary to the search at
actual cost. Fees may be charged for search time as prescribed in Sec.
1.7, even if the search does not yield any responsive records, or if
records are denied.
    (ii) Searches for electronic records. The Department shall charge
for actual direct cost of the search, including computer search time,
runs, and the operator's salary. The fee for computer output shall be
actual direct costs. For requesters in the ``all other'' category, when
the cost of the search (including the operator time and the cost of
operating the computer to process a request) equals the equivalent
dollar amount of two hours of the salary of the person performing the
search (i.e., the operator), the charge for the computer search will
begin.
    (3) Review of records. The Department shall charge commercial use
requesters for review of records at the salary rate(s) (i.e., basic pay
plus 16 percent) of the employee(s) making the review. However, when a
single class of personnel is used exclusively (e.g., all administrative/
clerical, or all professional/executive), an average rate for the range
of grades typically involved may be established. Fees may be charged for
review time as prescribed in Sec. 1.7, even if records ultimately are
not disclosed.
    (4) Inspection of records. Fees for all services provided shall be
charged whether or not copies are made available to the requester for
inspection.
    (5) Other services. Other services and materials requested which are
not covered by this part nor required by the FOIA are chargeable at the
actual cost to the Department. This includes, but is not limited to:
    (i) Certifying that records are true copies;
    (ii) Sending records by special methods such as express mail, etc.
    (h) Aggregating requests. When the Department or a bureau of the
Department reasonably believes that a requester or group of requesters
is attempting to break a request down into a series of requests for the
purpose of evading the assessment of fees, the agency shall aggregate
any such requests and charge accordingly.

[[Page 26]]



      Sec. Appendix A to Subpart A of Part 1--Departmental Offices

    1. In general. This appendix applies to the Departmental Offices as
defined in 31 CFR 1.1(a)(1).
    2. Public reading room. The public reading room for the Departmental
Offices is the Treasury Library. The Library is located in the Main
Treasury Building, 1500 Pennsylvania Avenue, NW., Washington, DC 20220.
For building security purposes, visitors are required to make an
appointment by calling 202-622-0990.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h)
as to whether to grant requests for records of the Departmental Offices
will be made by the head of the organizational unit having immediate
custody of the records requested or the delegate of such official.
Requests for records should be addressed to: Freedom of Information
Request, DO, Director, Disclosure Services, Department of the Treasury,
1500 Pennsylvania Avenue, NW, Washington, DC 20220.
    4. Administrative appeal of initial determination to deny records.
    (i) Appellate determinations under 31 CFR 1.5(i) with respect to
records of the Departmental Offices will be made by the Secretary,
Deputy Secretary, Under Secretary, General Counsel, Inspector General,
Treasury Inspector General for Tax Administration, Special Inspector
General for Troubled Assets Relief Program, Treasurer of the United
States, or Assistant Secretary having jurisdiction over the
organizational unit which has immediate custody of the records
requested, or the delegate of such officer.
    (ii) Appellate determinations with respect to requests for expedited
processing shall be made by the Deputy Assistant Secretary for Privacy
and Treasury Records.
    (iii) Appeals should be addressed to:

Freedom of Information Appeal, DO, Director, Disclosure Services,
Department of the Treasury, 1500 Pennsylvania Avenue, NW., Washington,
DC 20220.

    5. Delivery of process. Service of process will be received by the
General Counsel of the Department of the Treasury or the delegate of
such officer and shall be delivered to the following location: General
Counsel, Department of the Treasury, Room 3000, Main Treasury Building,
1500 Pennsylvania Avenue, NW., Washington, DC 20220.

[52 FR 26305, July 14, 1987, as amended at 75 FR 744, Jan. 6, 2010]



    Sec. Appendix B to Subpart A of Part 1--Internal Revenue Service

    1. In general. This appendix applies to the Internal Revenue
Service. See also 26 CFR 601.702.
    2. Public reading room. The public reading rooms for the Internal
Revenue Service are maintained at the following location:

                             National Office

                             Mailing Address

Freedom of Information Reading Room, PO Box 795, Ben Franklin Station,
Washington, DC 20044

                             Walk-In Address

Room 1621, 1111 Constitution Avenue, NW., Washington, DC

                            Northeast Region

                             Mailing Address

Freedom of Information Reading Room, PO Box 5138, E:QMS:D, New York, NY
10163

                             Walk-In Address

11th Floor, 110 W. 44th Street, New York, NY

                            Midstates Region

                             Mailing Address

Freedom of Information Reading Room, Mail Code 7000 DAL, 1100 Commerce
Street, Dallas, TX 75242

                             Walk-In Address

10th Floor, Rm. 10B37, 1100 Commerce Street, Dallas, TX

                            Southeast Region

                             Mailing Address

401 W. Peachtree Street, NW., Stop 601D, Room 868, Atlanta, GA 30365

                             Walk-In Address

Same as mailing address

                             Western Region

                             Mailing Address

1301 Clay Street, Stop 800-S, Oakland, CA 94612

                             Walk-In Address

8th Floor, 1301 Clay Street, Oakland, CA

    3. Requests for records. Initial determinations under 31 CFR 1.5(h)
as to whether to grant requests for records of the Internal Revenue
Service, grant expedited processing, grant a fee waiver, or determine
requester category will be made by those officials specified in 26 CFR
601.702.
    4. Administrative appeal of initial determination to deny records.
Appellate eterminations under 31 CFR 1.5(i) with respect to records of
the Internal Revenue Service will be made by the Commissioner of
Internal Revenue or

[[Page 27]]

the delegate of such officer. Appeals made by mail should be addressed
to:

Freedom of Information Appeal, Commissioner of Internal Revenue Service,
c/o Ben Franklin Station, PO Box 929, Washington, DC 20044.

    Appeals may be delivered personally to the Assistant Chief Counsel
(Disclosure Litigation) CC:EL:D, Office of the Chief Counsel, Internal
Revenue Building, 1111 Constitution Avenue NW., Washington, D.C.
    5. Delivery of process. Service of process shall be effected
consistent with Rule 4 of the Federal Rule of Civil Procedure, and
directed to the Commissioner of Internal Revenue at the following
address:

Commissioner, Internal Revenue Service, 1111 Constitution Avenue NW.,
Washington, DC 20224. Attention: CC:EL:D.



  Sec. Appendix C to Subpart A of Part 1--United States Customs Service

    1. In general. This appendix applies to the United States Customs
Service.
    2. Public reading room. The public reading room for the United
States Customs Service is maintained at the following location:

United States Customs Service, 1300 Pennsylvania Avenue NW., Washington,
DC 20229.

    3. Requests for records.
    (a) Headquarters--Initial determinations under 31 CFR 1.5(h) as to
whether to grant requests for records will be made by the appropriate
Division Director at Customs Service Headquarters having custody of or
functional jurisdiction over the subject matter of the requested
records. If the request relates to records maintained in an office which
is not within a division, the initial determination shall be made by the
individual designated for that purpose by the Assistant Commissioner
having responsibility for that office. Requests may be mailed or
delivered in person to:

Freedom of Information Act, Chief, Disclosure Law Branch, U.S. Customs
Service, 1300 Pennsylvania Avenue, NW., Washington, DC 20229.

    (b) Field Offices--Initial determinations under 31 CFR 1.5(h) as to
whether to grant requests for records maintained by the Office of
Investigations will be made by the Special Agent in Charge in whose
office the records are maintained. Initial determinations of records
maintained in Customs Ports of Entry as to whether or not to grant
requests for records will be made by the Port Director of the Customs
Service Port having jurisdiction over the Port of Entry in which the
records are maintained. Requests may be mailed or faxed to or delivered
personally to the respective Special Agents in Charge or Port Directors
of the Customs Service Ports at the following locations:

               Offices of Special Agents in Charge (SACS)

                              Atlanta--SAC

1691 Phoenix Blvd., Suite 250, Atlanta, Georgia 30349, Phone (770) 994-
2230, FAX (770) 994-2262

                              Detroit--SAC

McNamara Federal Building, 477 Michigan Avenue, Room 350, Detroit,
Michigan 8226-2568, Phone (313) 226-3166, FAX (313) 226-6282

                             Baltimore--SAC

40 South Gay Street, 3rd Floor Baltimore, Maryland 21202, Phone (410)
962-2620, FAX (410) 962-3469

                              El Paso--SAC

9400 Viscount Blvd., Suite 200, El Paso, Texas 79925, Phone (915) 540-
5700, FAX (915) 540-5754

                               Boston--SAC

10 Causeway Street, Room 722, Boston, MA 02222-1054, Phone (617) 565-
7400, FAX (617) 565-7422

                              Houston--SAC

4141 N. Sam Houston Pkwy, E., Houston, Texas 77032, Phone (281) 985-
0500, FAX (281) 985-0505

                              Buffalo--SAC

111 West Huron Street, Room 416, Buffalo, New York 14202, Phone (716)
551-4375, FAX (716) 551-4379

                            Los Angeles--SAC

300 South Ferry St., Room 2037, Terminal Island, CA 90731, Phone (310)
514-6231, FAX (310) 514-6280

                              Chicago--SAC

610 South Canal Street, Room 1001, Chicago, Illinois 60607, Phone (312)
353-8450, FAX (312) 353-8455

                               Miami--SAC

8075 NW 53rd Street, Scranton Building, Miami, Florida 33166, Phone
(305) 597-6030, FAX (305) 597-6227

                               Denver--SAC

115 Inverness Drive, East, Suite 300, Englewood, CO 80112-5131, Phone
(303) 84-6480, FAX (303) 784-6490

[[Page 28]]

                            New Orleans--SAC

423 Canal Street, Room 207, New Orleans, LA 70130, Phone (504) 670-2416,
FAX (504) 589-2059

                              New York--SAC

6 World Trade Center, New York, New York 10048-0945, Phone (212) 466-
2900, FAX (212) 466-2903

                              San Juan--SAC

1, La Puntilla Street, Room 110, San Juan, PR 00901, Phone
(787) 729-6975 FAX (787) 729-6646

                            San Antonio--SAC

10127 Morocco, Suite 180, San Antonio, Texas 78216, Phone (210) 229-
4561, FAX (210) 229-4582

                              Seattle--SAC

1000--2nd Avenue, Suite 2300, Seattle, Washington, 98104, Phone (206)
553-7531, FAX (206) 553-0826

                             San Diego--SAC

185 West ``F'' Street, Suite 600, San Diego, CA 92101, Phone (619) 57-
6850, FAX (619) 557-5109

                               Tampa--SAC

2203 North Lois Avenue, Suite 600, Tampa, Florida 33607, Phone (813)
348-1881, FAX (813) 348-1871

                           San Francisco--SAC

1700 Montgomery Street, Suite 445, San Francisco, CA 94111, Phone (415)
705-4070, FAX (415) 705-4065

                               Tucson--SAC

555 East River Road, Tucson, Arizona 85704, Phone (520) 670-6026, FAX
(520) 70-6233

                          Customs Service Ports

Anchorage: 605 West Fourth Avenue Anchorage, AK 99501. Phone: (907) 271-
2675; FAX: (907) 271-2684.
Minneapolis: 110 South Street Minneapolis, MN 55401. Phone: (612) 348-
1690; FAX: (612) 348-1630.
Baltimore: 200 St. Paul Place Baltimore, MD 21202. Phone: (410) 962-
2666; FAX: (410) 962-9335.
Mobile: 150 North Royal Street Mobile, AL 36602. Phone: (205) 441-5106;
FAX: (205) 441-6061.
Blaine: 9901 Pacific Highway Blaine, WA 98230. Phone: (360) 332-5771;
FAX: (360) 332-4701.
New Orleans: 423 Canal Street New Orleans, LA 70130. Phone: (504) 589-
6353; FAX: (504) 589-7305.
Boston: 10 Causeway Street Boston, MA 02222-1059. Phone: (617) 565-6147;
FAX: (617) 565-6137.
New York: 6 World Trade Center New York, NY 10048. Phone: (212) 466-
4444; FAX: (212) 455-2097.
Buffalo: 111 West Huron Street Buffalo, NY 14202-22378. Phone: (716)
551-4373; FAX: (716) 551-5011.
New York-JFK Area: Building 77 Jamaica, NY 11430. Phone: (718)
553-1542; FAX: (718) 553-0077.
Champlain: 35 West Service Road Rts. 1 & 9 South Champlain, NY 12919.
Phone: (518) 298-8347; FAX: (518) 298-8314.
New York-NY/Newark Area: Hemisphere Center, Newark, NJ 07114. Phone:
(201) 645-3760; FAX: (201) 645-6634.
Charleston: 200 East Bay Street Charleston, SC 29401. Phone: (803) 727-
4296; FAX: (803) 727-4043.
Nogales: 9 North Grand Avenue Nogales, AZ 85621. Phone: (520) 287-1410;
FAX: (520) 287-1421.
Charlotte: 1801-K Cross Beam Drive Charlotte, NC 28217. Phone: (704)
329-6101; FAX: (704) 329-6103.
Norfolk: 200 Granby Street Norfolk, VA 23510. Phone: (804) 441-3400;
FAX: (804) 441-6630.
Charlotte/Amalie: Main Post OFC-Sugar Estate St. Thomas, VI 00801.
Phone: (809) 774-2511; FAX: (809) 776-3489.
Pembina: PO Box 610 Pembina, ND 58271. Phone: (701) 825-6201; FAX: (701)
825-6473.
Chicago: 610 South Canal Street Chicago, IL 60607. Phone: (312) 353-
6100; FAX: (312) 353-2337.
Philadelphia: 2nd & Chestnut Streets Philadelphia, PA 19106. Phone:
(215) 597-4605; FAX: (215) 597-2103.
Cleveland: 56 Erieview Plaza Cleveland, OH 44114. Phone: (216) 891-3804;
FAX: (216) 891-3836.
Portland, Oregon: 511 NW Broadway Portland, OR 97209. Phone: (503) 326-
2865; FAX: (503) 326-3511.
Dallas/Fort Worth: PO Box 61905 Dallas/Fort Worth Airport, TX 75261.
Phone: (972) 574-2170; FAX: (972) 574-4818.
Providence: 49 Pavilion Avenue Providence, RI 02905. Phone: (401) 941-
6326; FAX: (401) 941-6628.
Denver: 4735 Oakland Street Denver, CO 80239. Phone: (303) 361-0715;
FAX: (303) 361-0722.
San Diego: 610 West Ash Street San Diego, CA 92188. Phone: (619) 557-
6758; FAX: (619) 557-5314.
Detroit: 477 Michigan Avenue Detroit, MI 48226. Phone: (313) 226-3178;
FAX: (313) 226-3179.
San Francisco: 555 Battery Avenue San Francisco, CA 94111. Phone: (415)
744-7700; FAX: (415) 744-7710.

[[Page 29]]

Duluth: 515 West 1st Street Duluth, MN 55802-1390. Phone: (218) 720-
5201; FAX: (218) 720-5216.
San Juan: 1 La Puntilla San Juan, PR 00901. Phone: (809) 729-
6965; FAX: (809) 729-6978.
El Paso: 9400 Viscount Boulevard El Paso, TX 79925. Phone: (915) 540-
5800; FAX: (915) 540-3011.
Savannah: 1 East Bay Street Savannah, GA 31401. Phone: (912) 652-4256;
FAX: (912) 652-4435.
Great Falls: 300 2nd Avenue South Great Falls, MT 59403. Phone: (406)
453-7631; FAX: (406) 453-7069.
Seattle: 1000 2nd Avenue Seattle, WA 98104-1049. Phone: (206) 553-0770;
FAX: (206) 553-2970.
Honolulu: 335 Merchant Street Honolulu, HI 96813. Phone: (808) 522-8060;
FAX: (808) 522-8060.
St. Albans: P.O. Box 1490 St. Albans, VT 05478. Phone: (802) 524-7352;
FAX: (802) 527-1338.
Houston/Galveston: 1717 East Loop Houston, TX 77029. Phone: (713) 985-
6712; FAX: (713) 985-6705.
St. Louis: 4477 Woodson Road St. Louis, MO 63134-3716. Phone: (314) 428-
2662; FAX: (314) 428-2889.
Laredo/Colombia: P.O. Box 3130 Laredo, TX 78044. Phone: (210) 726-2267;
FAX: (210) 726-2948.
Tacoma: 2202 Port of Tacoma Road, Tacoma, WA 98421. Phone: (206) 593-
6336; FAX: (206) 593-6351.
Los Angeles: 300 South Ferry Street Terminal Island, CA 90731. Phone:
(310) 514-6001; FAX: (310) 514-6769.
Tampa: 4430 East Adamo Drive Tampa, FL 33605. Phone: (813) 228-2381;
FAX: (813) 225-7309.
Miami Airport: 6601 West 25th Street Miami, FL 33102-5280. Phone: (305)
869-2800; FAX: (305) 869-2822.
Washington, DC: P.O. Box 17423 Washington, DC. 20041. Phone: (703) 318-
5900; FAX: (703) 318-6706.
Milwaukee: P.O. Box 37260 Milwaukee, WI 53237-0260. Phone: (414) 571-
2860; FAX: (414) 762-0253.

    (c) All such requests should be conspicuously labeled on the face of
the envelope, ``Freedom of Information Act Request'' or ``FOIA
Request''.
    4. Administrative appeal of initial determination to deny records.
Appellate determinations under 31 CFR 1.5(i) will be made by the
Assistant Commissioner of Customs (Office of Regulations and Rulings),
or his designee, and all such appeals should be mailed, faxed (202/927-
1873) or personally delivered to the United States Customs Service, 1300
Pennsylvania Avenue, NW., Washington, DC 20229. If possible, a copy of
the initial letter of determination should be attached to the appeal.
    5. Delivery of process. Service of process will be received by the
Chief Counsel, United States Customs Service, 1300 Pennsylvania Avenue,
NW., Washington, DC 20229.



  Sec. Appendix D to Subpart A of Part 1--United States Secret Service

    1. In general. This appendix applies to the United States Secret
Service.
    2. Public reading room. The United States Secret Service will
provide a room on an ad hoc basis when necessary. Contact the Disclosure
Officer, Room 720, 1800 G Street, NW., Washington, DC 20223 to make
appointments.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h)
as to whether to grant requests for records of the United States Secret
Service will be made by the Freedom of Information and Privacy Acts
Officer, United States Secret Service. Requests may be mailed or
delivered in person to:

Freedom of Information Act Request, FOIA and Privacy Acts Officer, U.S.
Secret Service, oom 720, 1800 G Street, NW., Washington, DC 20223.

    4. Administrative appeal of initial determination to deny records.
Appellate determinations under 31 CFR 1.5(i) with respect to records of
the United States Secret Service will be made by the Deputy Director,
United States Secret Service. Appeals should be addressed to:

Freedom of Information Appeal, Deputy Director, U.S. Secret Service,
Room 800, 1800 G Street, NW., Washington, DC 20223.

    5. Delivery of Process. Service of process will be received by the
United States Secret Service Chief Counsel at the following address:

Chief Counsel, U.S. Secret Service, Room 842, 1800 G Street, NW.,
Washington, DC 20223.



 Sec. Appendix E to Subpart A of Part 1--Bureau of Alcohol, Tobacco and
                                Firearms

    1. In general. This appendix applies to the Bureau of Alcohol,
Tobacco and Firearms.
    2. Public reading room. The Bureau of Alcohol, Tobacco and Firearms
will make materials available for review on an ad hoc basis when
necessary. Contact the Chief, Disclosure Division, Bureau of Alcohol,
Tobacco, and Firearms, 650 Massachusetts Avenue, NW., Washington, DC
20226.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h)
as to whether to grant requests for records of the Bureau of Alcohol,
Tobacco, and Firearms will be made by the Chief, Disclosure Division,
Office of Assistant Director (Liaison and Public Information) or the
delegate of such officer. Requests may be mailed or delivered in person
to:


[[Page 30]]


Freedom of Information Act Request, Chief, Disclosure Division, Bureau
of Alcohol, Tobacco, and Firearms, 650 Massachusetts Avenue, NW.,
Washington, DC 20226.

    4. Administrative appeal of initial determination to deny records.
Appellate determinations under 31 CFR 1.5(i) with respect to records of
the Bureau of Alcohol, Tobacco and Firearms will be made by the
Assistant Director, Liaison and Public Information, Bureau of Alcohol,
Tobacco, and Firearms or the delegate of such officer.
    Appeals may be mailed or delivered in person to:

Freedom of Information Appeal, Assistant Director, Liaison and Public
Information, Bureau of Alcohol, Tobacco, and Firearms, 650 Massachusetts
Avenue, NW., Washington, DC 20226.

    5. Delivery of process. Service of process will be received by the
Director of the Bureau of Alcohol, Tobacco, and Firearms at the
following location:

Bureau of Alcohol, Tobacco, and Firearms, 650 Massachusetts Avenue, NW.,
Washington, DC 20226, Attention: Chief Counsel.



Sec. Appendix F to Subpart A of Part 1--Bureau of Engraving and Printing

    1. In general. This appendix applies to the Bureau of Engraving and
Printing.
    2. Public reading room. Contact the Disclosure Officer, 14th and C
Streets, SW., Washington, DC 20228, to make an appointment.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h)
as to whether to grant requests for records of the Bureau of Engraving
and Printing will be made by the Assistant to the Director. Requests may
be mailed or delivered in person to:

Freedom of Information Act Request, Disclosure Officer, (Assistant to
the Director), Room 112-M, Bureau of Engraving and Printing, Washington,
DC 20228.

    4. Administrative appeal of initial determination to deny records.
Appellate determinations under 31 CFR 1.5(i) with respect to records of
the Bureau of Engraving and Printing will be made by the Director of the
Bureau of Engraving and Printing or the delegate of the Director.
Appeals may be mailed or delivered in person to:

Freedom of Information Appeal, Director, Bureau of Engraving and
Printing, 14th and C Streets, SW., Room 119-M, Washington, DC 20228.

    5. Delivery of process. Service of process will be received by the
Chief Counsel or the delegate of such officer at the following location:

Chief Counsel, Bureau of Engraving and Printing, 14th and C Streets,
SW., Room 04-24 M, Washington, DC 20228.



  Sec. Appendix G to Subpart A of Part 1--Financial Management Service

    1. In general. This appendix applies to the Financial Management
Service.
    2. Public reading room. The public reading room for the Financial
Management Service is maintained at the following location:

Library, Main Treasury Building, 1500 Pennsylvania Avenue NW.,
Washington, DC 20220.

    For building security purposes, visitors are required to make an
appointment by calling 202/622-0990.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h)
whether to grant requests for records will be made by the Disclosure
Officer, Financial Management Service. Requests may be mailed or
delivered in person to:

Freedom of Information Request, Disclosure Officer, Financial Management
Service, 401 14th Street, SW., Washington, DC 20227.

    4. Administrative appeal of initial determination to deny records.
Appellate determinations under 31 CFR 1.5(i) will be made by the
Commissioner, Financial Management Service. Appeals may be mailed to:

Freedom of Information Appeal (FOIA), Commissioner, Financial Management
Service, 401 14th Street, SW., Washington, DC 20227.

    Appeals may be delivered personally to the Office of the
Commissioner, Financial Management Service, 401 14th Street, SW.,
Washington, DC.
    5. Delivery of process. Service of process will be received by the
Commissioner, Financial Management Service, and shall be delivered to:

Commissioner, Financial Management Service, Department of the Treasury,
401 14th Street, SW., Washington, DC 20227.



       Sec. Appendix H to Subpart A of Part 1--United States Mint

    1. In general. This appendix applies to the United States Mint.
    2. Public reading room. The U.S. Mint will provide a room on an ad
hoc basis when necessary. Contact the Freedom of Information/Privacy Act
Officer, United States Mint, Judiciary Square Building, 7th floor, 633
3rd Street, NW., Washington, DC 20220.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h)
as to whether to grant requests for records of the United States Mint
will be made by the Freedom of Information/Privacy Act Officer, United
States Mint. Requests may be mailed or delivered in person to:

Freedom of Information Act Request, Freedom of Information/Privacy Act
Officer, United States Mint, Judiciary Square

[[Page 31]]

Building, 7th Floor, 633 3rd Street, NW., Washington, DC 20220.

    4. Administrative appeal of initial determination to deny records.
Appellate determinations under 31 CFR 1.5(i) with respect to records of
the United States Mint will be made by the Director of the Mint. Appeals
made by mail should be addressed to:

Freedom of Information Appeal, Director, United States Mint, Judiciary
Square Building, 7th Floor, 633 3rd Street, NW., Washington, DC 20220.

    5. Delivery of process. Service of process will be received by the
Director of the Mint and shall be delivered to:

Chief Counsel, United States Mint, Judiciary Square Building, 7th Floor,
633 3rd Street, NW., Washington, D.C. 20220.



    Sec. Appendix I to Subpart A of Part 1--Bureau of the Public Debt

    1. In general. This appendix applies to the Bureau of the Public
Debt.
    2. Public reading room. The public reading room for the Bureau of
the Public Debt is maintained at the following location:

Library, Main Treasury Building, 1500 Pennsylvania Avenue, NW,
Washington, DC 20220.

    For building security purposes, visitors are required to make an
appointment by calling 202/622-0990.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h)
whether to grant requests for records will be made by the Disclosure
Officer of the Bureau of the Public Debt. Requests may be sent to:

    Freedom of Information Act Request, Disclosure Officer,
Administrative Resource Center, Bureau of the Public Debt, Department of
the Treasury, 200 Third Street, Room 211, Parkersburg, WV 26101-5312.

    4. Administrative appeal of initial determination to deny records.
Appellate determinations under 31 CFR 1.5(i) with respect to records of
the Bureau of the Public Debt will be made by the Executive Director,
Administrative Resource Center, Bureau of the Public Debt. Appeals may
be sent to:

Freedom of Information Act Appeal, Executive Director, Administrative
Resource Center, Bureau of the Public Debt, Department of the Treasury,
200 Third Street, Room 211, Parkersburg, WV 26101-5312.

    5. Delivery of process. Service of process will be received by the
Chief Counsel, Bureau of the Public Debt, or the delegate of such
officer, and shall be delivered to the following location:

Chief Counsel's Office, Bureau of the Public Debt, 200 Third Street,
Room G-15, Parkersburg, WV 26106-1328.

[65 FR 40504, June 30, 2000, as amended at 67 FR 34402, May 14, 2002]



Sec. Appendix J to Subpart A of Part 1--Office of the Comptroller of the
                                Currency

    1. In general. This appendix applies to the Office of the
Comptroller of the Currency.
    2. Public reading room. The Office of the Comptroller of the
Currency will make materials available through its Public Information
Room at 250 E Street, SW., Washington, DC 20219.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h)
as to whether to grant requests for records of the Office of the
Comptroller of the Currency will be made by the Disclosure Officer or
the official so designated. Requests may be mailed or delivered in
person to:

Freedom of Information Act Request, Disclosure Officer, Communications
Division, 3rd Floor, Comptroller of the Currency, 250 E Street, SW.,
Washington, DC 20219.

    4. Administrative appeal of initial determination to deny records.
Appellate determinations under 31 CFR 1.5(i) with respect to records of
the Office of the Comptroller of the Currency will be made by the Chief
Counsel or delegates of such person. Appeals made by mail should be
addressed to:

Communications Division, Comptroller of the Currency, 250 E Street, SW.,
Washington, DC 20219.

    Appeals may be delivered personally to the Communications Division,
Comptroller of the Currency, 250 E Street, SW., Washington, DC.
    5. Delivery of process. Service of process will be received by the
Director, Litigation Division, Comptroller of the Currency, and shall be
delivered to such officer at the following location:

Litigation Division, Comptroller of the Currency, 250 E Street, SW.,
Washington, DC 20219.



Sec. Appendix K to Subpart A of Part 1--Federal Law Enforcement Training
                                 Center

    1. In general. This appendix applies to the Federal Law Enforcement
Training Center.
    2. Public reading room. The public reading room for the Federal Law
Enforcement Training Center is maintained at the following location:

Library, Building 262, Federal Law Enforcement Training Center, Glynco,
GA 31524.

    3. Requests for records. Initial determinations under 31 CFR 1.5(h)
as to whether to

[[Page 32]]

grant requests for records will be made by the Chief, Management
Analysis Division, Federal Law Enforcement Training Center. Requests
made by mail should be addressed to:

Freedom of Information Act Request, Freedom of Information Act Officer,
Federal Law Enforcement Training Center, Department of the Treasury,
Building 94, Glynco, GA 31524.

    Requests may be delivered personally to the Management Analysis
Division, Federal Law Enforcement Training Center, Building 94, Glynco,
GA.
    4. Administrative appeal of initial determination to deny records.
Appellate determinations under 31 CFR 1.5(i) with respect to records of
the consolidated Federal Law Enforcement Training Center will be made by
the Director, Federal Law Enforcement Training Center. Appeals may be
mailed to:

Freedom of Information Appeal, Federal Law Enforcement Training Center,
Department of the Treasury, Building 94, Glynco, GA 31524.

    5. Delivery of process. Service of process will be received by the
Legal Counsel of the Federal Law Enforcement Training Center, or his
delegate, and shall be delivered to such officer at the following
location:

Legal Counsel, Federal Law Enforcement Training Center, Department of
the Treasury, Building 94, Glynco, GA 31524.



  Sec. Appendix L to Subpart A of Part 1--Office of Thrift Supervision

    1. In general. This appendix applies to the Office of Thrift
Supervision (OTS). OTS regulatory handbooks and other publications are
available for sale. Information may be obtained by calling the OTS Order
Department at 301/645-6264. OTS regulatory handbooks and other
publications may be purchased by forwarding a request, along with a
check to: OTS Order Department, PO Box 753, Waldorf, MD 20604 or by
calling 301/645-6264 to pay by VISA or MASTERCARD.
    2. Public reading room. The public reading room for the Office of
Thrift Supervision is maintained at the following location:

1700 G Street, NW., Washington, DC 20552.

    3. Requests for records. Initial determinations under 31 CFR 1.5(h)
as to whether to grant requests for records of the Office of Thrift
Supervision will be made by the Director, OTS Dissemination Branch.
Requests for records should be addressed to: Freedom of Information
Request, Manager, Dissemination Branch, Records Management & Information
Policy Division, Office of Thrift Supervision, 1700 G Street, NW.,
Washington, DC 20552.
    Requests for records may be delivered in person to:

Public Reference Room, Office of Thrift Supervision, 1700 G Street, NW.,
Washington, DC.

    4. Administrative appeal of initial determination to deny records.
Appellate determinations under 31 CFR 1.5(i) with respect to records of
the Office of Thrift Supervision will be made by the Director, Records
Management & Information Policy, Office of Thrift Supervision, or their
designee. Appeals made by mail should be addressed to: Freedom of
Information Appeal, Director, Records Management & Information Policy
Division, Office of Thrift Supervision, 1700 G Street, NW., Washington,
DC 20552.
    Appeals may be delivered in person to:

Public Reference Room, Office of Thrift Supervision, 1700 G Street, NW.,
Washington, DC.

    5. Delivery of process. Service of process will be received by the
Corporate Secretary of the Office of Thrift Supervision or their
designee and shall be delivered to the following location:

Corporate Secretary, Office of Thrift Supervision, 1700 G Street, NW.,
Washington, DC 20552.



  Sec. Appendix M to Subpart A of Part 1--Financial Crimes Enforcement
                                 Network

    1. In general. This appendix applies to the Financial Crimes
Enforcement Network (FinCEN).
    2. Public Reading Room. FinCEN will provide a room on an ad hoc
basis when necessary. Contact Office of Regulatory Programs, FinCEN,
(202) 354-6400.
    3. Requests for records. Initial determinations under 31 CFR 1.5(h)
as to whether to grant requests for records of FinCEN will be made by
the Freedom of Information Act/Privacy Act Officer, FinCEN. Requests for
records may be mailed to: Freedom of Information Act/Privacy Act
Request, Financial Crimes Enforcement Network, Post Office Box 39,
Vienna, VA 22183.
    4. Administrative appeal of initial determinations to deny records.
Appellate determinations under 31 CFR 1.5(i) with respect to the records
of FinCEN will be made by the Director of FinCEN or the delegate of the
Director. Appeals should be mailed to: Freedom of Information Appeal,
Post Office Box 39, Vienna, VA 22183.
    5. Delivery of process. Service of process will be received by the
Chief Counsel of FinCEN and shall be delivered to: Chief Counsel,
Financial Crimes Enforcement Network, Post Office Box 39, Vienna, VA
22183.

[68 FR 55310, Sept. 25, 2003]

[[Page 33]]



                  Subpart B_Other Disclosure Provisions



Sec. 1.8  Scope.

    The regulations in this subpart concern access to information and
records other than under 5 U.S.C. 552. This subpart is applicable to the
Departmental Offices and to the bureaus of the Department as defined in
Sec. 1.1(a) of this part, except to the extent that bureaus of the
Department have adopted separate guidance governing the subject matter
of a provision of this subpart.

[69 FR 54003, Sept. 7, 2004]



Sec. 1.9  Records not to be otherwise withdrawn or disclosed.

    Except in accordance with this part, or as otherwise authorized,
Treasury Department officers and employees are prohibited from making
records or duplicates available to any person who is not an officer or
employee of the Department, and are prohibited from withdrawing any such
records or duplicates from the files, possession or control of the
Department.

[69 FR 54003, Sept. 7, 2004]



Sec. 1.10  Oral information.

    (a) Officers and employees of the Department may, in response to
requests, orally provide information contained in records of the
Department that are determined to be available to the public. If the
obtaining of such information requires a search of records, a written
request and the payment of the fee for a record search set forth in
Sec. 1.6 will be required.
    (b) Information with respect to activities of the Department not a
matter of record shall not be disclosed if the information involves
matters exempt from disclosure under 5 U.S.C. 552 or the regulations in
this part, or if the disclosure of such information would give the
person requesting the information advantages not accorded to other
citizens.

[69 FR 54003, Sept. 7, 2004]



Sec. 1.11  Testimony or the production of records in a court or other
proceeding.

    (a) Applicability. (1) This section sets forth the policies and
procedures of the Department regarding the testimony of employees and
former employees as witnesses in legal proceedings and the production or
disclosure of information contained in Department documents for use in
legal proceedings pursuant to a request, order, or subpoena
(collectively referred to in this subpart as a demand).
    (2) This section does not apply to any legal proceeding in which an
employee is to testify while on leave status regarding facts or events
that are unrelated to the official business of the Department.
    (3)(i) Nothing in this section affects the rights and procedures
governing public access to records pursuant to the Freedom of
Information Act (5 U.S.C. 552) or the Privacy Act (5 U.S.C. 552a).
    (ii) Demands in legal proceedings for the production of records, or
for the testimony of Department employees regarding information
protected by the Privacy Act (5 U.S.C. 552a), the Trade Secrets Act (18
U.S.C. 1905) or other confidentiality statutes, must satisfy the
requirements for disclosure set forth in those statutes and the
applicable regulations of this part before the records may be provided
or testimony given.
    (4) This section is intended only to provide guidance for the
internal operations of the Department and to inform the public about
Department procedures concerning the service of process and responses to
demands or requests, and the procedures specified in this section, or
the failure of any Treasury employee to follow the procedures specified
in this section, are not intended to, do not, and may not be relied upon
to create a right or benefit, substantive or procedural, enforceable at
law by a party against the United States.
    (b) Definitions. For purposes of this section:
    (1) Agency counsel means:
    (i) With respect to the Departmental Offices, the General Counsel or
his or her designee; or

[[Page 34]]

    (ii) With respect to a bureau or office of the Department, the Chief
Counsel or Legal Counsel (or his or her designee) of such bureau or
office.
    (2) Demand means a request, order, or subpoena for testimony or
documents related to or for possible use in a legal proceeding.
    (3) Department means the United States Department of the Treasury.
    (4) Document means any record or other property, no matter what
media and including copies thereof, held by the Department, including
without limitation, official letters, telegrams, memoranda, reports,
studies, calendar and diary entries, maps, graphs, pamphlets, notes,
charts, tabulations, analyses, statistical or informational
accumulations, any kind of summaries of meetings and conversations, film
impressions, magnetic tapes and sound or mechanical reproductions.
    (5) Employee means all employees or officers of the Department,
including contractors and any other individuals who have been appointed
by, or are subject to the supervision, jurisdiction or control of the
Secretary, as well as the Secretary of the Treasury. The procedures
established within this subpart also apply to former employees of the
Department where specifically noted.
    (6) General Counsel means the General Counsel of the Department or
other Department employee to whom the General Counsel has delegated
authority to act under this subpart.
    (7) Legal proceeding means all pretrial, trial and post trial stages
of all existing or reasonably anticipated judicial or administrative
actions, hearings, investigations, or similar proceedings before courts,
commissions, boards, grand juries, or other tribunals, foreign or
domestic. This phrase includes all phases of discovery as well as
responses to formal or informal requests by attorneys or others involved
in legal proceedings.
    (8) Official business means the authorized business of the
Department.
    (9) Secretary means the Secretary of the Treasury.
    (10) Testimony means a statement in any form, including personal
appearances before a court or other legal tribunal, interviews,
depositions, telephonic, televised, or videotaped statements or any
responses given during discovery or similar proceedings, which response
would involve more than the production of documents.
    (c) Department policy. No current or former employee shall, in
response to a demand, produce any Department documents, provide
testimony regarding any information relating to or based upon Department
documents, or disclose any information or produce materials acquired as
part of the performance of that employee's official duties or official
status, without the prior authorization of the General Counsel or the
appropriate agency counsel.
    (d) Procedures for demand for testimony or production of documents.
(1) A demand directed to the Department for the testimony of a
Department employee or for the production of documents shall be served
in accordance with the Federal Rules of Civil Procedure, Federal Rules
of Criminal Procedure, or applicable state procedures and shall be
directed to the General Counsel, Department of the Treasury, 1500
Pennsylvania Avenue, NW., Washington, DC 20220, or to the Chief or Legal
Counsel of the concerned Department component. Acceptance of a demand
shall not constitute an admission or waiver with respect to
jurisdiction, propriety of service, improper venue, or any other defense
in law or equity available under the applicable laws or rules.
    (2) A subpoena or other demand for testimony directed to an employee
or former employee shall be served in accordance with the Federal Rules
of Civil or Criminal Procedure or applicable State procedure and a copy
of the subpoena shall be sent to agency counsel.
    (3)(i) In court cases in which the United States or the Department
is not a party, where the giving of testimony or the production of
documents by the Department, or a current or former employee is desired,
an affidavit (or if that is not feasible, a statement) by the litigant
or the litigant's attorney, setting forth the information with respect
to which the testimony or production is desired, must be submitted

[[Page 35]]

in order to obtain a decision concerning whether such testimony or
production will be authorized. Such information shall include: the title
of the legal proceeding, the forum, the requesting party's interest in
the legal proceeding, the reason for the demand, a showing that other
evidence reasonably suited to the requester's needs is not available
from any other source and, if testimony is requested, the intended use
of the testimony, a general summary of the desired testimony, and a
showing that no document could be provided and used in lieu of
testimony. The purpose of this requirement is to assist agency counsel
in making an informed decision regarding whether testimony or the
production of document should be authorized. Permission to testify or
produce documents will, in all cases, be limited to the information set
forth in the affidavit or statement, or to such portions thereof as may
be deemed proper.
    (ii) Agency counsel may consult or negotiate with an attorney for a
party, or the party if not represented by an attorney, to refine or
limit a demand so that compliance is less burdensome or obtain
information necessary to make the determination required by paragraph
(e) of this section. Failure of the attorney or party to cooperate in
good faith to enable agency counsel to make an informed determination
under this subpart may serve, where appropriate, as a basis for a
determination not to comply with the demand.
    (iii) A determination under this subpart to comply or not to comply
with a demand is without prejudice as to any formal assertion or waiver
of privilege, lack of relevance, technical deficiency or any other
ground for noncompliance.
    (4)(i) Employees shall immediately refer all inquiries and demands
made on the Department to agency counsel.
    (ii) An employee who receives a subpoena shall immediately forward
the subpoena to agency counsel. Agency counsel will determine the manner
in which to respond to the subpoena.
    (e) Factors to be considered by agency counsel. (1) In deciding
whether to authorize the release of official information or the
testimony of personnel concerning official information (hereafter
referred to as ``the disclosure'') agency counsel shall consider the
following factors:
    (i) Whether the request or demand is unduly burdensome;
    (ii) Whether the request would involve the Department in
controversial issues unrelated to the Department's mission;
    (iii) Whether the time and money of the United States would be used
for private purposes;
    (iv) The extent to which the time of employees for conducting
official business would be compromised;
    (v) Whether the public might misconstrue variances between personal
opinions of employees and Department policy;
    (vi) Whether the request demonstrates that the information requested
is relevant and material to the action pending, genuinely necessary to
the proceeding, unavailable from other sources, and reasonable in its
scope;
    (vii) Whether the number of similar requests would have a cumulative
effect on the expenditure of agency resources;
    (viii) Whether disclosure otherwise would be inappropriate under the
circumstances; and
    (ix) Any other factor that is appropriate.
    (2) Among those demands and requests in response to which compliance
will not ordinarily be authorized are those with respect to which any of
the following factors exists:
    (i) The disclosure would violate a statute, Executive order, or
regulation;
    (ii) The integrity of the administrative and deliberative processes
of the Department would be compromised;
    (iii) The disclosure would not be appropriate under the rules of
procedure governing the case or matter in which the demand arose;
    (iv) The disclosure, including release in camera, is not appropriate
or necessary under the relevant substantive law concerning privilege;
    (v) The disclosure, except when in camera and necessary to assert a
claim of privilege, would reveal information properly classified or
other matters exempt from unrestricted disclosure; or
    (vi) The disclosure would interfere with ongoing enforcement
proceedings,

[[Page 36]]

compromise constitutional rights, reveal the identity of an intelligence
source or confidential informant, or disclose trade secrets or similarly
confidential commercial or financial information.
    (f) Requests for opinion or expert testimony. (1) Subject to 5 CFR
2635.805, an employee or former employee shall not provide, with or
without compensation, opinion or expert testimony concerning official
information, subjects, or activities, except on behalf of the United
States or a party represented by the Department of Justice, without
written approval of agency counsel.
    (2) Upon a showing by the requestor of exceptional need or unique
circumstances and that the anticipated testimony will not be adverse to
the interests of the Department or the United States, agency counsel
may, in writing, grant authorization for an employee, or former
employee, to appear and testify at no expense to the United States.
    (3) Any expert or opinion testimony by a former employee of the
Department shall be excepted from Sec. 1.11(f)(1) where the testimony
involves only general expertise gained while employed at the Department.
    (g) Procedures when agency counsel directs an employee not to
testify or provide documents. (1) If agency counsel determines that an
employee or former employee should not comply with a subpoena or other
request for testimony or the production of documents, agency counsel
will so inform the employee and the party who submitted the subpoena or
made the request.
    (2) If, despite the determination of the agency counsel that
testimony should not be given and/or documents not be produced, a court
of competent jurisdiction or other appropriate authority orders the
employee or former employee to testify and/or produce documents, the
employee shall notify agency counsel of such order.
    (i) If agency counsel determines that no further legal review of, or
challenge to, the order will be sought, the employee or former employee
shall comply with the order.
    (ii) If agency counsel determines to challenge the order, or that
further legal review is necessary, the employee or former employee
should not comply with the order. Where necessary, the employee should
appear at the time and place set forth in the subpoena. If legal counsel
cannot appear on behalf of the employee, the employee should produce a
copy of this subpart and respectfully inform the legal tribunal that he/
she has been advised by counsel not to provide the requested testimony
and/or produce documents. If the legal tribunal rules that the subpoena
must be complied with, the employee shall respectfully decline to
comply, citing this section and United States ex rel. Touhy v. Ragen,
340 U.S. 462 (1951).

[69 FR 54003, Sept. 7, 2004]



Sec. 1.12  Regulations not applicable to official request.

    The regulations in this part shall not be applicable to official
requests of other governmental agencies or officers thereof acting in
their official capacities, unless it appears that granting a particular
request would be in violation of law or inimical to the public interest.
Cases of doubt should be referred for decision to agency counsel (as
defined in Sec. 1.11(b)(1)).

[69 FR 54003, Sept. 7, 2004]



                          Subpart C_Privacy Act



Sec. 1.20  Purpose and scope of regulation.

    The regulations in this subpart are issued to implement the
provisions of the Privacy Act of 1974 (5 U.S.C. 552a). The regulations
apply to all records which are contained in systems of records
maintained by the Department of the Treasury and which are retrieved by
an individual's name or personal identifier. They do not relate to those
personnel records of Government employees, which are under the
jurisdiction of the Office of Personnel Management to the extent such
records are subject to regulations issued by such OPM. The regulations
apply to all components of the Department of the Treasury. Any reference
in this subpart to the Department or its officials, employees, or
records shall be deemed to refer also to the components or their
officials, employees, or records. The regulations set forth the
requirements

[[Page 37]]

applicable to Department of the Treasury employees maintaining,
collecting, using or disseminating records pertaining to individuals.
They also set forth the procedures by which individuals may request
notification of whether the Department of the Treasury maintains or has
disclosed a record pertaining to them or may seek access to such records
maintained in any nonexempt system of records, request correction of
such records, appeal any initial adverse determination of any request
for amendment, or may seek an accounting of disclosures of such records.
For the convenience of interested persons, the components of the
Department of the Treasury may reprint these regulations in their
entirety (less any appendices not applicable to the component in
question) in those titles of the Code of Federal Regulations which
normally contain regulations applicable to such components. In
connection with such republication, and at other appropriate times,
components may issue supplementary regulations applicable only to the
component in question, which are consistent with these regulations. In
the event of any actual or apparent inconsistency, these Departmental
regulations shall govern. Persons interested in the records of a
particular component should, therefore, also consult the Code of Federal
Regulations for any rules or regulations promulgated specifically with
respect to that component (see Appendices to this subpart for cross
references). The head of each component is hereby also authorized to
substitute other appropriate officials for those designated and correct
addresses specified in the appendix to this subpart applicable to the
component. The components of the Department of the Treasury for the
purposes of this subpart are the following offices and bureaus:
    (a) The Departmental Offices, which include the offices of:
    (1) The Secretary of the Treasury, including immediate staff;
    (2) The Deputy Secretary of the Treasury, including immediate staff;
    (3) The Chief of Staff, including immediate staff;
    (4) The Executive Secretary of the Treasury and all offices
reporting to such official, including immediate staff;
    (5) Under Secretary (International Affairs) and all offices
reporting to such official, including immediate staff;
    (6) Assistant Secretary (International Economics and Development)
and all offices reporting to such official, including immediate staff;
    (7) Assistant Secretary (Financial Markets and Investment Policy)
and all offices reporting to such official, including immediate staff;
    (8) Under Secretary (Domestic Finance) and all offices reporting to
such official, including immediate staff;
    (9) Fiscal Assistant Secretary and all offices reporting to such
official, including immediate staff;
    (10) Assistant Secretary (Financial Institutions) and all offices
reporting to such official, including immediate staff;
    (11) Assistant Secretary (Financial Markets) and all offices
reporting to such official, including immediate staff;
    (12) Assistant Secretary (Financial Stability) and all offices
reporting to such official, including immediate staff;
    (13) Under Secretary (Terrorism & Financial Intelligence) and all
offices reporting to such official, including immediate staff;
    (14) Assistant Secretary (Terrorist Financing) and all offices
reporting to such official, including immediate staff;
    (15) Assistant Secretary (Intelligence and Analysis) and all offices
reporting to such official, including immediate staff;
    (16) General Counsel and all offices reporting to such official,
including immediate staff; except legal counsel to the components listed
in paragraphs (a)(23), (a)(24), and (a)(25) and (b) through (j) of this
section;
    (17) Treasurer of the United States including immediate staff;
    (18) Assistant Secretary (Legislative Affairs) and all offices
reporting to such official, including immediate staff;
    (19) Assistant Secretary (Public Affairs) and all offices reporting
to such official, including immediate staff;

[[Page 38]]

    (20) Assistant Secretary (Economic Policy) and all offices reporting
to such official, including immediate staff;
    (21) Assistant Secretary (Tax Policy) and all offices reporting to
such official, including immediate staff;
    (22) Assistant Secretary (Management) and Chief Financial Officer,
and all offices reporting to such official, including immediate staff;
    (23) The Inspector General, and all offices reporting to such
official, including immediate staff;
    (24) The Treasury Inspector General for Tax Administration, and all
offices reporting to such official, including immediate staff;
    (25) The Special Inspector General for the Troubled Asset Relief
Program, and all offices reporting to such official, including immediate
staff;
    (b) Alcohol and Tobacco Tax and Trade Bureau.
    (c) Bureau of Public Debt.
    (d) Financial Management Service.
    (e) Internal Revenue Service.
    (f) Comptroller of the Currency.
    (g) Office of Thrift Supervision.
    (h) Bureau of Engraving and Printing.
    (i) United States Mint.
    (j) Financial Crimes Enforcement Network.

For purposes of this subpart, the office of the legal counsel for the
components listed in paragraphs (a)(23), (a)(24), (a)(25), (b) through
(j) of this section are to be considered a part of such components. Any
office, which is now in existence or may hereafter be established, which
is not specifically listed or known to be a component of any of those
listed above, shall be deemed a part of the Departmental Offices for the
purpose of these regulations.

[52 FR 26305, July 14, 1987, as amended at 60 FR 31633, June 16, 1995;
65 FR 2333, Jan. 14, 2000; 68 FR 55311, Sept. 25, 2003; 73 FR 51221,
Sept. 2, 2008; 75 FR 744, Jan. 6, 2010; 75 FR 36535, June 28, 2010]



Sec. 1.21  Definitions.

    (a) The term agency means agency as defined in 5 U.S.C. 552(e);
    (b) The term individual means a citizen of the United States or an
alien lawfully admitted for permanent residence;
    (c) The term maintain includes maintain, collect, use, or
disseminate;
    (d) The term record means any item, collection, or grouping of
information about an individual that is maintained by the Department of
the Treasury or component of the Department. This includes, but is not
limited to, the individual's education, financial transactions, medical
history, and criminal or employment history and that contains the name,
or an identifying number, symbol, or other identifying particular
assigned to the individual, such as a finger or voice print or a
photograph;
    (e) The term system of records means a group of any records under
the control of the Department of the Treasury or any component from
which information is retrieved by the name of the individual or by some
identifying number, symbol, or other identifying particular assigned to
the individual;
    (f) The term statistical record means a record in a system of
records maintained for statistical research or reporting purposes only
and not used in whole or part in making any determination about an
identifiable individual, except as provided by 13 U.S.C. 8.
    (g) The term routine use means the disclosure of a record that is
compatible with the purpose for which the record was collected;
    (h) The term component means a bureau or office of the Department of
the Treasury as set forth in Sec. 1.20 and in the appendices to these
regulations. (See 5 U.S.C. 552a(a).)
    (i) The term request for access means a request made pursuant to 5
U.S.C. 552a(d)(1).
    (j) The term request for amendment means a request made pursuant to
5 U.S.C. 552a(d)(2).
    (k) The term request for accounting means a request made pursuant to
5 U.S.C. 552a(c)(3).



Sec. 1.22  Requirements relating to systems of records.

    (a) In general. Subject to 5 U.S.C. 552a (j) and (k) and Sec.
1.23(c), each component shall, in conformance with 5 U.S.C. 552a:
    (1) Maintain in its records only such information about an
individual as is

[[Page 39]]

relevant and necessary to accomplish a purpose of the agency required to
be accomplished by the statute or by Executive order of the President
(See 5 U.S.C. 552a(e)(1)).
    (2) Collect information to the greatest extent practicable directly
from the subject individual when the information may result in adverse
determinations about an individual's rights, benefits, and privileges
under Federal programs. (See 5 U.S.C. 552a(e)(2)).
    (b) Requests for information from individuals. Subject to 5 U.S.C.
552a(j) and Sec. 1.23(c)(1), each component of the Treasury shall
inform each individual whom it asks to supply information, on the form
which it uses to collect the information or on a separate form that can
be retained by the individual:
    (1) The authority (whether granted by statute, or by Executive order
of the President) which authorizes the solicitation of the information
and whether disclosure of such information is mandatory or voluntary;
    (2) The principal purpose or purposes for which the information is
intended to be used;
    (3) The routine uses which may be made of the information, as
published pursuant to 5 U.S.C. 552a(e)(4)(D); and
    (4) The effects on such individual, if any, of not providing all or
any part of the requested information. (See 5 U.S.C. 552a(e)(3)).
    (c) Report on new systems. Each component of the Treasury shall
provide adequate advance notice to Congress and the Office of Management
and Budget through the Disclosure Branch and Administration Section of
the Office of the General Counsel of any proposal to establish or alter
any system of records in order to permit an evaluation of the probable
or potential effect of such proposal on the privacy and other personal
or property rights of individuals or the disclosure of information
relating to such individuals, and its effect on the preservation of the
constitutional principles of federalism and separation of powers. (See 5
U.S.C. 552a(o)).
    (d) Accurate and secure maintenance of records. Each component
shall:
    (1) Subject to 5 U.S.C. 552a(j) and Sec. 1.23(c)(1), maintain all
records which are used in making any determination about any individual
with such accuracy, relevance, timeliness, and completeness as is
reasonably necessary to assure fairness to the individual in the
determination (see 5 U.S.C. 552a(e)(5);
    (2) Prior to disseminating any record about an individual to any
person other than an agency, unless the dissemination is made pursuant
to 5 U.S.C. 552 (see 31 CFR part 1, subpart A), make reasonable efforts
to assure that such records are accurate, complete, timely, and relevant
for Department of the Treasury purposes (see 5 U.S.C. 552a(e)(6)) and
    (3) Establish appropriate administrative, technical, and physical
safeguards to insure the security and confidentiality of records and to
protect against any anticipated threats or hazards to their security or
integrity which could result in substantial harm, embarrassment,
inconvenience, or unfairness to any individual on whom information is
maintained. (See 5 U.S.C. 552a(e)(10)).
    (i) System managers, with the approval of the head of their offices
within a component, shall establish administrative and physical
controls, consistent with Department regulations, to insure the
protection of records systems from unauthorized access or disclosure and
from physical damage or destruction. The controls instituted shall be
proportional to the degree of sensitivity of the records but at a
minimum must insure that records other than those available to the
general public under the Freedom of Information Act (5 U.S.C. 552), are
protected from public view, that the area in which the records are
stored is supervised during all business hours and physically secure
during nonbusiness hours to prevent unauthorized personnel from
obtaining access to the records. Automated systems shall comply with the
security standards promulgated by the National Bureau of Standards.
    (ii) System managers, with the approval of the head of their offices
within a component, shall adopt access restrictions to insure that only
those individuals within the agency who have a need to have access to
the records for the performance of their duties have access to them.
Procedures shall also

[[Page 40]]

be adopted to prevent accidental access to, or dissemination of,
records.
    (e) Prohibition against maintenance of records concerning First
Amendment rights. No component shall maintain a record describing how
any individual exercises rights guaranteed by the First Amendment (e.g.
speech), unless the maintenance of such record is:
    (1) Expressly authorized by statute, or
    (2) Expressly authorized by the individual about whom the record is
maintained, or
    (3) Pertinent to and within the scope of an authorized law
enforcement activity. (See 5 U.S.C. 552a (e)(7))
    (f) Notification of disclosure under compulsory legal process.
Subject to 5 U.S.C. 552a(j) and Sec. 1.23(c)(1), when records
concerning an individual are subpoenaed by a Grand Jury, Court, or
quasi-judicial agency, or disclosed in accordance with an ex parte court
order pursuant to 26 U.S.C. 6103(i), the official served with the
subpoena or court order shall make reasonable efforts to assure that
notice of any disclosure is provided to the individual. Notice shall be
provided within five working days of making the records available under
compulsory legal process or, in the case of a Grand Jury subpoena or an
ex parte order, within five days of its becoming a matter of public
record. Notice shall be mailed to the last known address of the
individual and shall contain the following information: the date and
authority to which the subpoena is, or was returnable, or the date of
and court issuing the ex parte order, the name and number of the case or
proceeding, and the nature of the information sought and provided.
Notice of the issuance of a subpoena or an ex parte order is not
required if the system of records has been exempted from the notice
requirement of 5 U.S.C. 552a (e)(8) and this section, pursuant to 5
U.S.C. 552a (j) and Sec. 1.23 (c)(1), by a Notice of Exemption
published in the Federal Register. (See 5 U.S.C. 552a (e)(8)).
    (g) Emergency disclosure. If information concerning an individual
has been disclosed to any person under compelling circumstances
affecting health or safety, the individual shall be notified at the last
known address within 5 days of the disclosure (excluding Saturdays,
Sundays, and legal public holidays). Notification shall include the
following information: The nature of the information disclosed, the
person or agency to whom it was disclosed, the date of disclosure, and
the compelling circumstances justifying the disclosure. Notification
shall be given by the officer who made or authorized the disclosure.
(See 5 U.S.C. 552a (b)(8)).



Sec. 1.23  Publication in the Federal Register--Notices of systems of
records, general exemptions, specific exemptions, review of all systems.

    (a) Notices of systems of records to be published in the Federal
Register. (1) The Department shall publish a notice of the existence and
character of all systems of records every 3 years in the Federal
Register. An annual notice of systems of records is required to be
published by the Office of the Federal Register in the publication
entitled ``Privacy Act Issuances'', as specified in 5 U.S.C. 552a(f).
    (2) Minor changes to systems of records shall be published annually.
(See paragraph (d)(8) of this section)
    (3) In addition, the Department shall publish in the Federal
Register upon establishment or revision a notice of the existence and
character of any new or revised systems of records. Unless otherwise
instructed, each notice shall include:
    (i) The name and location of the system;
    (ii) The categories of individuals on whom records are maintained in
the system;
    (iii) The categories of records maintained in the system;
    (iv) Each routine use of the records contained in the system,
including the categories of users and the purpose of such use;
    (v) The policies and practices of the component regarding storage,
retrievability, access controls, retention, and disposal of the records;
    (vi) The title and business address of the Treasury official who is
responsible for the system of records;
    (vii) The procedures of the component whereby an individual can be
notified if the system of records contain a

[[Page 41]]

record pertaining to the individual, including reasonable times, places,
and identification requirements.
    (viii) The procedures of the component whereby an individual can be
notified on how to gain access to any record pertaining to such
individual that may be contained in the system of records, and how to
contest its content; and
    (ix) The categories of sources of records in the system. (See 5
U.S.C. 552a(e)(4))
    (b) Notice of new or modified routine uses to be published in the
Federal Register. At least 30 days prior to a new use or modification of
a routine use, as published under paragraph (a)(3)(iv) of this section,
each component shall publish in the Federal Register notice of such new
or modified use of the information in the system and provide an
opportunity for interested persons to submit written data, views, or
arguments to the components. (See 5 U.S.C. 552a(e)(11))
    (c) Promulgation of rules exempting systems from certain
requirements--(1) General exemptions. In accordance with existing
procedures applicable to a Treasury component's issuance of regulations,
the head of each such component may adopt rules, in accordance with the
requirements (including general notice) of 5 U.S.C. 553 (b) (1), (2),
and (3), (c) and (e), to exempt any system of records within the
component from any part of 5 U.S.C. 552a and these regulations except
subsections (b) (sec. 1.24, conditions of disclosure), (c)(1) (sec.
1.25, keep accurate accounting of disclosures), (c)(2) (sec. 1.25,
retain accounting for five years or life of record), (e)(4) (A) through
(F) (paragraph (a) of this section, publication of annual notice of
systems of records), (e)(6) (sec. 1.22(d), accuracy of records prior to
dissemination), (e)(7) (sec. 1.22(e), maintenance of records on First
Amendment rights), (e)(9) (sec. 1.28, establish rules of conduct),
(e)(10) (sec. 1.22(d)(3), establish safeguards for records), (e)(11)
(paragraph (c) of this section, publish new intended use), and (i) (sec.
1.28(c), criminal penalties) if the systems of records maintained by the
component which performs as its principal function any activity
pertaining to the enforcement of criminal laws, including police efforts
to prevent, control, or reduce crime or to apprehend criminals, and the
activities of prosecutors, courts, correctional, probation, pardon, or
parole authorities, and which consists of:
    (i) Information compiled for the purpose of identifying individual
criminal offenders and alleged offenders and consisting only of
identifying data and notations of arrests, the nature and disposition of
criminal charges, sentencing, confinement, release, and parole, and
probation status;
    (ii) Information compiled for the purpose of a criminal
investigation, including reports of informants and investigators, and
associated with an identifiable individual; or
    (iii) Reports identifiable to an individual compiled at any stage of
the process of enforcement of the criminal laws from arrest or
indictment through release from supervision. (See 5 U.S.C. 552a(j))
    (2) Specific exemptions. In accordance with existing procedures
applicable to a Treasury component's issuance of regulations, the head
of each such component may adopt rules, in accordance with the
requirements (including general notice) of 5 U.S.C. 553 (b) (1), (2),
and (3), (c), and (e), to exempt any system of records within the
component from 5 U.S.C. 552a(c)(3) (sec. 1.25(c)(2), accounting of
certain disclosures available to the individual), (d) (sec. 1.26(a),
access to records), (e)(1) (sec. 1.22(a)(1), maintenance of information
to accomplish purposes authorized by statute or executive order only),
(e)(4)(G) (paragraph (a)(7) of this section, publication of procedures
for notification), (e)(4)(H) (paragraph (a)(8) of this section,
publication of procedures for access and contest), (e)(4)(I) (paragraph
(a)(9) of this section, publication of sources of records), and (f)
(sec. 1.26, promulgate rules for notification, access and contest), if
the system of records is:
    (i) Subject to the provisions of 5 U.S.C. 552(b)(1);
    (ii) Investigatory material compiled for law enforcement purposes,
other than material within the scope of subsection (j)(2) of 5 U.S.C.
552a and paragraph (a)(1) of this section. If any individual is denied
any right, privilege, or

[[Page 42]]

benefit that such individual would otherwise be entitled to by Federal
law, or for which such individual would otherwise be eligible, as a
result of the maintenance of this material, such material shall be
provided to the individual, except to the extent that the disclosure of
the material would reveal the identity of a source who furnished
information to the Government under an express promise that the identity
of the source would be held in confidence, or prior to September 27,
1975, under an implied promise that the identity of the source would be
held in confidence;
    (iii) Maintained in connection with providing protective services to
the President of the United States or other individuals pursuant to 18
U.S.C. 3056;
    (iv) Required by statute to be maintained and used solely as
statistical records;
    (v) Investigatory material compiled solely for the purpose of
determining suitability, eligibility, or qualifications for Federal
civilian employment, military service, Federal contracts, or access to
classified information, but only to the extent that the disclosure of
such material would reveal the identity of a source who furnished
information to the Government under an express promise that the identity
of the source would be held in confidence, or, prior to September 27,
1975, under an implied promise that the identity of the source would be
held in confidence;
    (vi) Testing or examination material used solely to determine
individual qualifications for appointment or promotion in the Federal
service the disclosure of which would compromise the objectivity or
fairness of the testing or examination process; or
    (vii) Evaluation material used to determine potential for promotion
in the armed services, but only to the extent that the disclosure of
such material would reveal the identity of a source who furnished
information to the Government under an express promise that the identity
of the source would be held in confidence, or, prior to September 27,
1975, under an implied promise that the identity of the source would be
held in confidence.
    (3) At the time that rules under this subsection are adopted, the
head of the component shall include in the statement required under 5
U.S.C. 553(c) the reasons why the system of records is to be exempted
from a provision of 5 U.S.C. 552a and this part. (See 5 U.S.C. 552a (j)
and (k))
    (d) Review and report to OMB. The Department shall ensure that the
following reviews are conducted as often as specified below by each of
the components who shall be prepared to report to the Departmental
Disclosure Branch upon request the results of such reviews and any
corrective action taken to resolve problems uncovered. Each component
shall:
    (1) Review every two years a random sample of the component's
contracts that provide for the maintenance of a system of records on
behalf of the component to accomplish a function of the component, in
order to ensure that the working of each contract makes the provisions
of the Act apply. (5 U.S.C. 552a(m)(1))
    (2) Review annually component's recordkeeping and disposal policies
and practices in order to assure compliance with the Act.
    (3) Review routine use disclosures every 3 years, that are
associated with each system of records in order to ensure that the
recipient's use of such records continues to be compatible with the
purpose for which the disclosing agency originally collected the
information.
    (4) Review every three years each system of records for which the
component has issued exemption rules pursuant to section (j) or (k) of
the Privacy Act in order to determine whether the exemption is needed.
    (5) Review annually each ongoing matching program in which the
component has participated during the year, either as a source or as a
matching agency in order to assure that the requirements of the Act, the
OMB Matching Guidelines, and the OMB Model Control System and checklist
have been met.
    (6) Review component's training practices annually to ensure that
all component personnel are familiar with the requirements of the Act,
these regulations and Departmental directives.
    (7) Review annually the actions of component personnel that have
resulted either in the agency being found

[[Page 43]]

civilly liable under section (g) of the Act, or an employee being found
criminally liable under the provisions of section (i) of the Act, in
order to determine the extent of the problem and to prevent future
recurrences.
    (8) Review annually each system of records notice to ensure that it
accurately describes the system. Where minor changes are needed, publish
an amended notice in the Federal Register. Minor changes shall be
consolidated in one annual comprehensive publication. The term ``minor
change to a system of records'' means a change that does not
significantly change the system. More specifically, a minor change does
not affect the character or purpose of the system and does not affect
the ability of an individual to gain access to a record about the
individual or to any information pertaining to such individual which is
contained in the system; for example, changing the title of the system
manager or the location of the system.



Sec. 1.24  Disclosure of records to person other than the individual to
whom they pertain.

    (a) Conditions of disclosure. No component of Treasury shall
disclose any record which is contained in a system of records maintained
by it by any means of communication to any person, or to another agency,
except pursuant to a written request by, or with the prior written
consent of, the individual to whom the record pertains, or the parent,
if a minor, or legal guardian, if incompetent, of such individual,
unless disclosure of the record would be:
    (1) To those offices and employees of the Department of the Treasury
who have a need for the record in the performance of their duties;
    (2) Retired under 5 U.S.C. 552 (subpart A of this part);
    (3) For a routine use as defined in 5 U.S.C. 552a(a)(7) and Sec.
1.21(g) and as described under 5 U.S.C. 552a(e)(4)(D) and Sec.
1.23(a)(4);
    (4) To the Bureau of the Census for purposes of planning or carrying
out a census or survey or related activity pursuant to the provisions of
title 13 of the U.S. Code;
    (5) To a recipient who has provided the component with advance
adequate written assurance that the record will be used solely as a
statistical research or reporting record, and the record is to be
transferred in a form that is not individually identifiable;
    (6) To the National Archives of the United States as a record which
has sufficient historical or other value to warrant its continued
preservation by the United States Government, or for evaluation by the
Administrator of General Services or the designee of such official to
determine whether the record has such value;
    (7) To another agency or to an instrumentality of any governmental
jurisdiction within or under the control of the United States for a
civil or criminal law enforcement activity.
    (i) If the activity is authorized by law; and
    (ii) If the head of the agency or instrumentality has made a written
request to the Department of the Treasury specifying the particular
portion desired and the law enforcement activities for which the record
is sought;
    (8) To a person pursuant to a showing of compelling circumstances
affecting the health or safety of an individual, if upon such
disclosure, notification is transmitted to the last known address of
such individual;
    (9) To either House of Congress, or, to the extent of matter within
its jurisdiction, any committee or subcommittee thereof, any joint
committee of Congress or subcommittee of any such joint committee.
    (10) To the Comptroller General, or the authorized representatives
of such official, in the course of the performance of the duties of the
General Accounting Office; or
    (11) Pursuant to the order of a court of competent jurisdiction.
(See 5 U.S.C. 552a(b))



Sec. 1.25  Accounting of disclosures.

    (a) Accounting of certain disclosures. Each component, with respect
to each system of records under its control, shall:
    (1) Keep an accurate accounting of: (i) The date, nature, and
purpose of each disclosure of a record to any person or to an agency
made under 5

[[Page 44]]

U.S.C. 552a (b) and Sec. 1.24; and (ii) the name and address of the
person or agency to whom the disclosure is made;
    (2) Retain the accounting made under paragraph (a)(1) of this
section for at least five years or the life of the record, whichever is
longer, after the disclosure for which the accounting is made; and
    (3) Inform any person or other agency about any correction or
notation of dispute made by the constitutent unit in accordance with 5
U.S.C. 552a (d) and Sec. 1.28 of any record that has been disclosed to
the person or agency if an accounting of the disclosure was made. (See 5
U.S.C. 552(c).)
    (b) Accounting systems. To permit the accounting required by
paragraph (a) of this section, system managers, with the approval of the
head of their offices within a component, shall establish or implement,
a system of accounting for all disclosures of records, either orally or
in writing, made outside the Department of the Treasury. Accounting
records shall:
    (1) Be established in the least expensive and most convenient form
that will permit the system manager to advise individuals, promptly upon
request, what records concerning them have been disclosed and to whom:
    (2) Provide, as a minimum, the identification of the particular
record disclosed, the name and address of the person or agency to whom
or to whom or to which disclosed, and the date, nature and purpose of
the disclosure; and
    (3) Be maintained for 5 years or until the record is destroyed or
transferred to the National Archives and Records Service for storage in
records centers, in which event, the accounting pertaining to those
records, unless maintained separately, shall be transferred with the
records themselves.
    (c) Exemptions from accounting requirements. No accounting is
required for disclosure of records:
    (1) To those officers and employees of the Department of the
Treasury who have a need for the record in the performance of their
duties; or
    (2) If disclosure would be required under 5 U.S.C. 552 and Subpart A
of this part.
    (d) Access to accounting by individual. (1) Subject to paragraphs
(c) and (d)(2) of this section, each component shall establish and set
forth in the appendix to this subpart applicable to the component,
procedures for making the accounting required under paragraph (a) of
this section available to the individual to whom the record pertains and
shall thereafter make such accounting available in accordance therewith
at the request of the individual. The procedures may require the
requester to provide reasonable identification.
    (2) Access accountings of disclosure may be withheld from the
individual named in the record only if the disclosures were (i) made
under 5 U.S.C. 552a (b)(7) and Sec. 1.24 (a)(7), or (ii) under a system
of records exempted from the requirements of 5 U.S.C. 552a(c)(3) in
accordance with 5 U.S.C. 552 (j) or (k) and Sec. 1.23(c). (See 5 U.S.C.
552a(c))



Sec. 1.26  Procedures for notification and access to records pertaining
to individuals--format and fees for request for access.

    (a) Procedures for notification and access. Each component shall
establish, in accordance with the requirements of 5 U.S.C. 553, and set
forth in the appendix to this subpart applicable to such component
procedures whereby an individual can be notified, in response to a
request, if any system of records named by the individual contains a
record pertaining to that individual. In addition, such procedures shall
set forth the requirements for access to such records. As a minimum such
procedures shall specify the times during, and the places at which
access will be accorded, together with such identification as may be
required of the individual before access. (See 5 U.S.C. 552a(f) (1), (2)
and (3))
    (b) Access. Each component in accordance with the procedures
prescribed under paragraph (a) of this section, shall allow an
individual to gain access to records or to any information pertaining to
such individual which is contained in the system of records upon
request. The individual shall be permitted to review the record and have
a copy made of all or any portion of the

[[Page 45]]

record in a form that is comprehensible. The individual will also be
permitted to be accompanied by any person of the individual's choosing
to review the record, except that the agency may require the individual
to furnish a written statement authorizing discussion of that
individual's record in the accompanying person's presence. (See 5 U.S.C.
552a(d)(1))
    (c) Exceptions. Neither the procedures prescribed under paragraph
(a) of this section nor the requirements for access under paragraph (b)
of this section shall be applicable to--(1) systems of records exempted
pursuant to 5 U.S.C. 552a (j) and (k) and Sec. 1.23(c); (2) information
compiled in reasonable anticipation of a civil action or proceeding (See
5 U.S.C. 552(d)(5)); or (3) information pertaining to an individual
which is contained in, and inseparable from, another individual's
record.
    (d) Format of request. (1) A record for notification of whether a
record exists shall:
    (i) Be made in writing and signed by the person making the request,
who must be the individual about whom the record is maintained, or such
individual's duly authorized representative (See Sec. 1.34);
    (ii) State that it is made pursuant to the Privacy Act, 5 U.S.C.
552a or these regulations, have marked ``Privacy Act Request'' on the
request and on the envelope;
    (iii) Give the name of the system or subsystem or categories of
records to which access is sought, as specified in ``Privacy Act
Issuances'' published by the Office of the Federal Register and
referenced in the appendices to this subpart;
    (iv) Describe the nature of the record(s) sought in sufficient
detail to enable Department personnel to locate the system of records
containing the record with a reasonable amount of effort. Whenever
possible, a request for access should describe the nature of the record
sought, the date of the record or the period in which the record was
compiled.
    (v) Provide such identification of the requester as may be specified
in the appropriate appendix to this subpart; and
    (vi) Be addressed or delivered in person to the office or officer of
the component indicated for the particular system or subsystem or
categories of records the individual wishes access to, as specified in
``Privacy Act Issuances'' published by the Office of the Federal
Register and referenced in the appendices to this subpart. Assistance in
ascertaining the appropriate component or in preparing a request for
notification may be obtained by a written request to this effect
addressed as specified in Appendix A of this part, as the address for
the Departmental Offices for ``Request for notification and access to
records and accountings of disclosures''.
    (2) A request for access to records shall, in addition to complying
with paragraph (a)(1)(i) through (vi) of this section:
    (i) State whether the requester wishes to inspect the records or
desires to have a copy made and furnished without first inspecting them;
    (ii) If the requester desires to have a copy made, state the firm
agreement of the requester to pay the fees for duplication ultimately
determined in accordance with (31 CFR 1.6) Subpart A of this title,
unless such fees are waived pursuant to that section by the system
manager or other appropriate official as indicated in the appropriate
appendix to these regulations; and
    (iii) Comply with any other requirement set forth in the applicable
appendix to this subpart or the ``Notice of Records Systems'' applicable
to the system in question. Requesters are hereby advised that any
request for access which does not comply with the foregoing requirements
and those set forth elsewhere in this Subpart C, will not be deemed
subject to the time constraints of this section, unless and until
amended so as to comply. However, components shall advise the requester
in what respect the request is deficient so that it may be processed.
This section applies only to records which are contained in a system of
records and which are in the possession or control of the component.
(See 5 U.S.C. 552a (d) and (f))
    (e) Requests for records not in control of component. (1) Treasury
employees shall make reasonable efforts to assist an oral requester to
ascertain to which office or officer a written request

[[Page 46]]

should be sent. When the request is for a record which is not in the
possession or control of any component of the Department of the
Treasury, the requester shall be so advised.
    (2) Where the record requested was created by a Department or agency
other than the Department of the Treasury or a component of the
Department and has been classified (e.g. National Defense or
Intelligence Information) or otherwise restrictively endorsed (e.g.
Office of Personnel Management records of FBI reports) by such other
Department or agency, and a copy is in the possession of a component of
the Department of the Treasury, that portion of the request shall be
referred to the originating agency for determination as to all issues in
accordance with the Privacy Act. In the case of a referral to another
agency under this paragraph, the requester shall be notified that such
portion of the request has been so referred and that the requester may
expect to hear from that agency.
    (3) When information sought from a system manager or other
appropriate official in the Department of the Treasury includes
information furnished by other Federal agencies not classified or
otherwise restrictively endorsed, the system manager or other
appropriate official receiving the request shall consult with the
appropriate agency prior to making a decision to disclose or not to
disclose the record. The decision as to whether the record shall be
disclosed shall be made, in the first instance by the system manager or
other appropriate official maintaining the record. (See 5 U.S.C. 552a
(d) and (f))
    (f) Date of receipt of request. A request for notification or access
to records shall be considered to have been received for purposes of
this subpart on the date on which the requirements of paragraph (d) of
this section have been satisfied. Requests for notification or access to
records and any separate agreement to pay shall be stamped or endorsed
with the date of receipt by the receiving office. The latest of such
stamped dates will be deemed to be the date of receipt of the request
for the purposes of this subpart. (See 5 U.S.C. 552a (d) and (f))
    (g) Notification of determination--(1) In general. Notification of
determinations as to notification of whether a record exists or as to
whether to grant access to records requested will be made by the
officers designated in the appendices to this subpart. The notification
of the determination shall be mailed within 30 days (excluding
Saturdays, Sundays and legal public holidays) after the date of receipt
of the request, as determined in accordance with paragraph (f) of this
section. If it is not possible to respond within 30 days, the designated
officer shall inform the requester, stating the reason for the delay
(e.g. volume of records requested, scattered location of the records,
need to consult other agencies, or the difficulty of the legal issues
involved) and when a response will be dispatched. (See 5 U.S.C. 552a (d)
and (f))
    (2) Granting of access. When it has been determined that the request
for access will be granted--(i) and a copy requested; such copy in a
form comprehensible to the requester shall be furnished promptly,
together with a statement of the applicable fees for duplication; and
(ii) and the right to inspect has been requested, the requester shall be
promptly notified in writing of the determination, and when and where
the requested records may be inspected. An individual seeking to inspect
such records may be accompanied by another person of such individual's
choosing. The individual seeking access shall be required to sign the
required form indicating that the Department of the Treasury is
authorized to discuss the contents of the subject record in the
accompanying person's presence. If, after making the inspection, the
individual making the request desires a copy of all or a portion of the
requested records, such copy in a form comprehensible to the individual
shall be furnished upon payment of the applicable fees for duplication.
Fees to be charged are as prescribed by 31 CFR part 1, Subpart A, Sec.
1.6 Fees shall not be charged where they would amount, in the aggregate,
to less than $3.00. (See 5 U.S.C. 552a (d) and (f))
    (3) Requirements for access to medical records. When access is
requested to medical records, including psychological records, the
responsible official

[[Page 47]]

may determine that such release could have an adverse effect on the
individual and that release will be made only to a physician authorized
in writing to have access to such records by the individual making the
request. Upon receipt of the authorization the physician will be
permitted to review the records or to receive copies of the records by
mail, upon proper verification of identity. (See 5 U.S.C. 552a (f) (3))
    (4) Denial of request. When it is determined that the request for
notification of whether a record exists or access to records will be
denied (whether in whole or part or subject to conditions or
exceptions), the person making the request shall be so notified by mail
in accordance with paragraph (g)(1) of this section. The letter of
notification shall specify the city or other location where the
requested records are situated (if known), contain a statement of the
reasons for not granting the request as made, set forth the name and
title or position of the responsible official and advise the individual
making the request of the right to file suit in accordance with 5 U.S.C.
552a (g)(1)(B).
    (5) Prohibition against the use of 5 U.S.C. 552 (b) exemptions.
Exemptions from disclosure under 5 U.S.C. 552 (b) (31 CFR part 1,
Subpart A, Sec. 1.2 (c)), may not be invoked for the purpose of
withholding from an individual any record which is otherwise accessible
to such individual under the Privacy Act, 5 U.S.C. 552a and this
subpart. (See 5 U.S.C. 552a (q))
    (6) Records exempt in whole or in part. (i) When an individual
requests notification as to whether a record exists or access to records
concerning the individual which have been exempted from individual
access pursuant to 5 U.S.C. 552a (j) or which have been compiled in
reasonable anticipation of a civil action or proceeding in either a
court or before an administrative tribunal and the assertion of the
exemption is deemed necessary, the Department of the Treasury will
neither confirm nor deny the existence of the record but shall advise
the individual only that no record available to the individual pursuant
to the Privacy Act of 1974 has been identified.
    (ii) Requests from individuals for access to records which have been
exempted from access pursuant to 5 U.S.C. 552a (k) shall be processed as
follows:
    (A) Requests for information classified pursuant to Executive Orders
12958, 13526, or successor or prior Executive Orders require the
responsible component of the Department to review the information to
determine whether it continues to warrant classification pursuant to an
Executive Order. Information which no longer warrants classification
under these criteria shall be declassified and made available to the
individual. If the information continues to warrant classification, the
individual shall be advised that the information sought is classified,
that it has been reviewed and continues to warrant classification, and
that it has been exempted from access pursuant to 5 U.S.C. 552 (b)(1)
and 5 U.S.C. 552a (k)(1). Information which has been exempted pursuant
to 5 U.S.C. 552a (j) and which is also classified shall be reviewed as
required by this paragraph but the response to the individual shall be
in the form prescribed by paragraph (g)(6)(i) of this section.
    (B) Requests for information which has been exempted from disclosure
pursuant to 5 U.S.C. 552a (k)(2) shall be responded to in the manner
provided in paragraph (g)(6)(i) of this section unless the requester
shows that the information has been used or is being used to deny the
individual any right, privilege or benefit for which he is eligible or
to which he would otherwise be entitled under federal law. In that
event, the individual shall be advised of the existence of the
information but such information as would identify a confidential source
shall be extracted or summarized in a manner which protects the source
to the maximum degree possible and the summary extract shall be provided
to the requesting individual.
    (C) Information compiled as part of an employee background
investigation which has been exempted pursuant to 5 U.S.C. 552a (k)(5)
shall be made available to an individual upon request except to the
extent that it identifies the confidential source. Material identifying
the confidential sources shall be

[[Page 48]]

extracted or summarized in a manner which protects the source to the
maximum degree possible and the summary or extract shall be provided to
the requesting individual.
    (D) Testing or examination material which has been exempted pursuant
to 5 U.S.C. 552a (k)(6) shall not be made available to an individual if
disclosure would compromise the objectivity or fairness of the testing
or examination process; but may be made available if no such compromise
possibility exists. (See 5 U.S.C. 552a (d)(5), (j) and (k)).

[52 FR 26305, July 14, 1987, as amended at 76 FR 4817, Jan. 27, 2011]



Sec. 1.27  Procedures for amendment of records pertaining to
individuals--format, agency review and appeal from initial adverse

agency determination.

    (a) In general. Subject to the application of exemptions promulgated
by the head of each component, in accordance with Sec. 1.23(c), and
subject to Sec. 1.27(f), each component of the Department of the
Treasury, shall in conformance with 5 U.S.C. 552a(d)(2), permit an
individual to request amendment of a record pertaining to such
individual. Any request for amendment of records or any appeal that does
not fully comply with the requirements of this section and any
additional specific requirements imposed by the component in the
applicable appendix to this subpart will not be deemed subject to the
time constraints of paragraph (e) of this section, unless and until
amended so as to comply. However, components shall advise the requester
in what respect the request or appeal is deficient so that it may be
resubmitted or amended. (See 5 U.S.C. 552a (d) and (f))
    (b) Form of request to amend records. In order to be subject to the
provisions of this section, a request to amend records shall:
    (1) Be made in writing and signed by the person making the request,
who must be the individual about whom the record is maintained, or the
duly authorized representative of such individual;
    (2) State that it is made pursuant to the Privacy Act, 5 U.S.C. 552a
or these regulations, have marked ``Privacy Act Amendment Request'' on
the request and on the envelope;
    (3) Be addressed to the office or officer of the component specified
for such purposes in ``Privacy Act Issuances'' published by the Office
of the Federal Register and referenced in the appendices to this subpart
for that purpose; and
    (4) Reasonably describe the records which the individual desires to
have amended, including, to the best of the requester's knowledge, dates
of letters requesting access to such records previously and dates of
letters in which notification concerning access was made, if any, and
the individual's documentation justifying the correction. (See U.S.C.
552a (d) and (f))
    (c) Date of receipt of request. A request for amendment of records
pertaining to an individual shall be deemed to have been received for
purposes of this subpart when the requirements of paragraph (b) of this
section have been satisfied. The receiving office or officer shall stamp
or otherwise endorse the date of receipt of the request. (See 5 U.S.C.
552a (d) and (f))
    (d) Review of requests to amend records. Officials responsible for
review of requests to amend records pertaining to an individual, as
specified in the appropriate appendix to this subpart, shall:
    (1) Not later than 10 days (excluding Saturdays, Sundays, and legal
public holidays) after the date of receipt of such request, acknowledge
in writing such receipt; and
    (2) Promptly, either--(i) Make any correction of any portion which
the individual believes and the official agrees is not accurate,
relevant, timely, or complete; or
    (ii) Inform the individual of the refusal to amend the record in
accordance with the individual's request, the reason for the refusal,
and the name and business address of the officer designated in the
applicable appendix to this subpart, as the person who is to review such
refusal. (See 5 U.S.C. 552a (d) and (f))
    (e) Administrative appeal--(1) In general. Each component shall
permit individuals to request a review of initial decisions made under
paragraph (d) of this section, when an individual disagrees with a
refusal to amend this

[[Page 49]]

record. (See 5 U.S.C. 552a (d), (f), and (g)(1))
    (2) Form of request for administrative review of refusal to amend
record. At any time within 35 days after the date of the notification of
the initial decision described in paragraph (d)(2)(ii) of this section,
the requester may submit an administrative appeal from such refusal to
the official specified in the notification of the initial decision and
the appropriate appendix to this subpart. The appeal shall:
    (i) Be made in writing stating any arguments in support thereof and
be signed by the person to whom the record pertains, or the duly
authorized representative of such official;
    (ii) Be addressed to and mailed or hand delivered within 35 days of
the date of the initial decision, to the office or officer specified in
the appropriate appendix to this subpart and in the notification. (See
the appendices to this subpart for the address to which appeals made by
mail should be addressed);
    (iii) Have clearly marked on the appeal and on the envelope,
``Privacy Act Amendment Appeal'';
    (iv) Reasonably describe the records requested to be amended; and
    (v) Specify the date of the initial request, to amend records, and
the date of the letter giving notification that the request was denied.
(See 5 U.S.C. 552a (d) and (f))
    (3) Date of receipt. Appeals shall be promptly stamped with the date
of their receipt by the office to which addressed and such stamped date
will be deemed to be the date of receipt for all purposes of this
subpart. The receipt of the appeal shall be acknowledged within 10 days
(excluding Saturdays, Sundays, and legal public holidays) from the date
of the receipt (unless the determination on appeal is dispatched in 10
days, in which case, no acknowledgement is required) by the responsible
official and the requester advised of the date of receipt established by
the foregoing and when a response is due in accordance with this
paragraph. (See 5 U.S.C. 552a (d) and (f))
    (4) Review of administrative appeals from denial of requests to
amend records. Officials responsible for deciding administrative appeals
from denials of requests to amend records pertaining to an individual,
as specified in the appendices to this subpart shall: Complete the
review, and notify the requester of the final agency decision within 30
days (exclusive of Saturdays, Sundays and legal public holidays) after
the date of receipt of such appeal, unless the time is extended by the
head of the agency or the delegate of such official, for good cause
shown. If such final agency decision is to refuse to amend the record,
in whole or in part, the requester shall also be advised of the right--
(i) to file a concise ``Statement of Disagreement'' setting forth the
reasons for his disagreement with the decision which shall be filed
within 35 days of the date of the notification of the final agency
decision and (ii) to judicial review of the final agency decision under
5 U.S.C. 552a(g)(1)(A). (See 5 U.S.C. 552a (d), (f) and (g)(1))
    (5) Notation on record and distribution of statements of
disagreement. The system manager is responsible, in any disclosure
containing information about which an individual has filed a ``Statement
of Disagreement'', occurring after the filing of the statement under
paragraph (e)(4) of this section, for clearly noting any portion of the
record which is disputed and providing copies of the statement and, if
deemed appropriate, a concise statement of the component's reasons for
not making the amendments requested to persons or other agencies to whom
the disputed record has been disclosed. (See 5 U.S.C. 552a(d)(4))
    (f) Records not subject to correction under the Privacy Act. The
following records are not subject to correction or amendment by
individuals:
    (1) Transcripts or written statements made under oath; and
    (2) Transcripts of Grand Jury proceedings, judicial or quasi-
judicial proceedings which form the official record of those
proceedings; and
    (3) Pre-sentence reports comprising the property of the courts but
maintained in agency files; and
    (4) Records pertaining to the determination, the collection and the
payment of the Federal taxes; and
    (5) Records duly exempted from correction by notice published in the
Federal Register; and

[[Page 50]]

    (6) Records compiled in reasonable anticipation of a civil action or
proceeding.



Sec. 1.28  Training, rules of conduct, penalties for non-compliance.

    (a) Training. Subject to policy guidance and regulations issued by
the Deputy Secretary, who has Departmentwide responsibility therefor,
each component shall institute a training program to instruct employees
and employees of Government contractors covered by 5 U.S.C. 552a(m), who
are involved in the design, development, operation or maintenance of any
system of records, on a continuing basis with respect to the duties and
responsibilities imposed on them and the rights conferred on individuals
by the Privacy Act, the regulations in this subpart, including the
appendices thereto, and any other related regulations. Such training
shall provide suitable emphasis on the civil and criminal penalties
imposed on the Department and the individual employees by the Privacy
Act for non-compliance with specified requirements of the Act as
implemented by the regulations in this subpart. (See 5 U.S.C.
552a(e)(9))
    (b) Rules of conduct. In addition, to the Standards of Conduct
published in part O of this title, particularly 31 CFR 0.735-44, the
following are applicable to employees of the Department of the Treasury
(including, to the extent required by the contract or 5 U.S.C. 552a(m),
Government contractors and employees of such contractors), who are
involved in the design, development, operation or maintenance of any
system of records, or in maintaining any records, for or on behalf of
the Department, including any component thereof.
    (1) The head of each office of a component of the Department shall
be responsible for assuring that employees subject to such official's
supervision are advised of the provisions of the Privacy Act, including
the criminal penalties and civil liabilities provided therein, and the
regulations in this subpart, and that such employees are made aware of
their individual and collective responsibilities to protect the security
of personal information, to assure its accuracy, relevance, timeliness
and completeness, to avoid unauthorized disclosure either orally or in
writing, and to insure that no information system concerning
individuals, no matter how small or specialized is maintained without
public notice.
    (2) Employees of the Department of the Treasury involved in the
design, development, operation, or maintenance of any system of records,
or in maintaining any record shall:
    (i) Collect no information of a personal nature from individuals
unless authorized to collect it to achieve a function or carry out a
responsibility of the Department;
    (ii) Collect from individuals only that information which is
necessary to Department functions or responsibilities, unless related to
a system exempted under 5 U.S.C. 552a (j) or (k):
    (iii) Collect information, wherever possible, directly from the
individual to whom it relates, unless related to a system exempted under
5 U.S.C. 552a(j);
    (iv) Inform individuals from whom information is collected about
themselves of the authority for collection, the purposes thereof, the
use that will be made of the information, and the effects, both legal
and practical, of not furnishing the information. (While this provision
does not explicitly require it, where feasible, third party sources
should be informed of the purposes for which information they are asked
to provide will be used.);
    (v) Neither collect, maintain, use nor disseminate information
concerning an individual's religious or political beliefs or activities
or membership in associations or organizations, unless (A) the
individual has volunteered such information for the individual's own
benefits; (B) the information is expressly authorized by statute to be
collected, maintained, used or disseminated; or (C) the activities
involved are pertinent to and within the scope of an authorized
investigation, adjudication or correctional activity;
    (vi) Advise their supervisors of the existence or contemplated
development of any record system which is capable of retrieving
information about individuals by individual identifier;
    (vii) Disseminate no information concerning individuals outside the
Department except when authorized by 5

[[Page 51]]

U.S.C. 552a or pursuant to a routine use published in the Federal
Register;
    (viii) Assure that an accounting is kept in the prescribed form, of
all dissemination of personal information outside the Department,
whether made orally or in writing, unless disclosed under 5 U.S.C. 552
and subpart A of this part;
    (ix) Maintain and process information concerning individuals with
care in order to insure that no inadvertent disclosure of the
information is made either within or without the Department; and
    (x) Assure that the proper Department authorities are aware of any
information in a system maintained by the Department which is not
authorized to be maintained under the provisions of the Privacy Act of
1974, including information on First Amendment Activities, information
that is inaccurate, irrelevant or so incomplete as to risk unfairness to
the individual concerned.
    (3) Heads of components within the Department or their delegates
shall, at least annually, review the record systems subject to their
supervision to insure compliance with the provisions of the Privacy Act
of 1974 and the regulations in this subpart. (See 5 U.S.C. 552a (e)(9),
(i) and (m))
    (c) Criminal penalties. (1) The Privacy Act imposes criminal
penalties on the conduct of Government officers or employees as follows:
Any officer or employee of an agency (which term includes the Department
of the Treasury):
    (i) Who by virtue of the official's employment or official position,
has possession of, or access to, agency records which contain
individually identifiable information the disclosure of which is
prohibited by this section (5 U.S.C. 552a) or regulations established
thereunder, and who knowing that disclosure of the specific material is
so prohibited, willfully discloses the material in any manner to any
person or agency not entitled to receive it, or
    (ii) Who willfully maintains a system of records without meeting the
notice requirements of paragraph (e)(4) of this section (5 U.S.C.
552a)--shall be guilty of a misdemeanor and fined not more than $5,000.
    (2) The Act also imposes a collateral criminal penalty on the
conduct of any person as follows:

    ``Any person who knowingly and willfully requests or obtains any
record concerning an individual from an agency under false pretenses
shall be guilty of a misdemeanor and fined not more than $5,000.''

    (3) For the purposes of 5 U.S.C. 552a (i), the provisions of
paragraph (c)(1) of this section are applicable to Government
contractors and employees of such contractors who by contract, operate
by or on behalf of the Department of the Treasury a system of records to
accomplish a Departmental function. Such contractor and employees are
considered employees of the Department of the Treasury for the purposes
of 5 U.S.C. 552a(i). (See 5 U.S.C. 552a (i) and (m).)



Sec. 1.29  Records transferred to Federal Records Center or National
Archives of the United States.

    (a) Records transferred to the Administrator of General Services for
storage in the Federal Records Center. Records pertaining to an
identifiable individual which are transferred to the Federal Records
Center in accordance with 44 U.S.C. 3103 shall, for the purposes of the
Privacy Act, 5 U.S.C. 552a, be considered to be maintained by the
component which deposited the record and shall be subject to the
provisions of the Privacy Act and this subpart. The Administrator of
General Services shall not disclose such records except to the
Department of the Treasury or to others under rules consistent with the
Privacy Act which may be established by the Department of the Treasury
or a component. If such records are retrieved for the purpose of making
a determination about an individual, they must be reviewed for accuracy,
relevance, timeliness, and completeness.
    (b) Records transferred to the National Archives of the United
States. (1) Records transferred to National Archives prior to September
27, 1975. Records pertaining to an identifiable individual transferred
to the National Archives prior to September 27, 1975, as a record which
has sufficient historical or other

[[Page 52]]

value to warrant its continued preservation by the United States
Government shall be considered to be maintained by the National
Archives, and
    (i) Shall not be subject to 5 U.S.C. 552a,
    (ii) Except, that a statement describing such records [modeled after
5 U.S.C. 552a (e)(4) (A) through (G)] shall be published in the Federal
Register.
    (2) Records transferred to National Archives on or after September
27, 1975. Records pertaining to an identifiable individual transferred
to the National Archives as a record which has sufficient historical or
other value to warrant its continued preservation by the United States
Government, on or after September 27, 1975, shall be considered to be
maintained by the National Archives, and
    (i) Shall not be subject to 5 U.S.C. 552a,
    (ii) Except, that a statement describing such records in accordance
with 5 U.S.C. 552a (e)(4) (A) through (G) shall be published in the
Federal Register and rules of conduct and training in accordance with 5
U.S.C. 552 (e) (9) are to be established by the National Archives. (See
5 U.S.C. 552a (e))



Sec. 1.30  Application to system of records maintained by Government
contractors.

    When a component contracts for the operation of a system of records,
to accomplish a Departmental function, the provisions of the Privacy
Act, 5 U.S.C. 552a, and this subpart shall be applicable to such system.
The component shall have responsibility for insuring that the contractor
complies with the contract requirements relating to privacy.



Sec. 1.31  Sale or rental of mailing lists.

    (a) In general. An individual's name and address shall not be sold
or rented by a component unless such action is specifically authorized
by law.
    (b) Withholding of names and addresses. This section shall not be
construed to require the withholding of names and addresses otherwise
permitted to be made public. (See 5 U.S.C. 552a (n)).



Sec. 1.32  Use and disclosure of social security numbers.

    (a) In general. An individual shall not be denied any right,
benefit, or privilege provided by law by a component because of such
individual's refusal to disclose his social security number.
    (b) Exceptions. The provisions of paragraph (a) of this section
shall not apply with respect to:
    (1) Any disclosure which is required by Federal statute, or
    (2) The disclosure of a social security number to any Federal,
State, or local agency maintaining a system of records in existence and
operating before January 1, 1975, if such disclosure was required under
statute or regulation adopted prior to such date to verify the identity
of an individual.
    (c) Requests for disclosure of social security number. Any component
which requests an individual to disclose his or her social security
account number shall inform that individual whether:
    (1) Disclosure is mandatory or voluntary.
    (2) By what statutory or other authority such number is solicited,
and
    (3) What uses will be made of it. (See section 7 of the Privacy Act
of 1974 set forth at 5 U.S.C. 552a, note.)



Sec. 1.34  Guardianship.

    The parent or guardian of a minor or a person judicially determined
to be incompetent shall, in addition to establishing the identity of the
minor or other person represented, establish parentage or guardianship
by furnishing a copy of a birth certificate showing parentage or a court
order establishing the guardianship and may thereafter, act on behalf of
such individual. (See 5 U.S.C. 552a (h))



Sec. 1.35  Information forms.

    (a) Review of forms. Except for forms developed and used by
constituent units, the Deputy Assistant Secretary for Administration
shall be responsible for reviewing all forms developed and used by the
Department of the Treasury to collect information from and about
individuals. The heads of components shall each be responsible for the
review of forms used by such component to collect information from and
about individuals.

[[Page 53]]

    (b) Scope of review. The responsible officers shall review each form
for the purpose of eliminating any requirement for information that is
not relevant and necessary to carry out an agency function and to
accomplish the following objectives;
    (1) To insure that no information concerning religion, political
beliefs or activities, association memberships (other than those
required for a professional license), or the exercise of First Amendment
rights is required to be disclosed unless such requirement of disclosure
is expressly authorized by statute or is pertinent to, and within the
scope of, any authorized law enforcement activity;
    (2) To insure that the form or a separate form that can be retained
by the individual makes clear to the individual which information he is
required by law to disclose and the authority for that requirement and
which information is voluntary;
    (3) To insure that the form or a separate form that can be retained
by the individual states clearly the principal purpose or purposes for
which the information is being collected, and summarizes concisely the
routine uses that will be made of the information;
    (4) To insure that the form or a separate form that can be retained
by the individual clearly indicates to the individual the effect in
terms of rights, benefits or privileges of not providing all or part of
the requested information; and
    (5) To insure that any form requesting disclosure of a Social
Security Number, or a separate form that can be retained by the
individual, clearly advises the individual of the statute or regulation
requiring disclosure of the number or clearly advises the individual
that disclosure is voluntary and that no consequence will follow from
the refusal to disclose it, and the uses that will be made of the number
whether disclosed mandatorily and voluntarily.
    (c) Revision of forms. Any form which does not meet the objectives
specified in the Privacy Act and in this section, shall be revised to
conform thereto. A separate statement may be used in instances when a
form does not conform. This statement will accompany a form and shall
include all the information necessary to accomplish the objectives
specified in the Privacy Act and this section.



Sec. 1.36  Systems exempt in whole or in part from provisions of 5
U.S.C. 552a and this part.

    (a) In General. In accordance with 5 U.S.C. 552a(j) and (k) and
Sec. 1.23(c), the Department of the Treasury hereby exempts the systems
of records identified below from the following provisions of the Privacy
Act for the reasons indicated.
    (b) Authority. These rules are promulgated pursuant to the authority
vested in the Secretary of the Treasury by 5 U.S.C. 552a(j) and (k) and
pursuant to the authority of Sec. 1.23(c).
    (c) General exemptions under 5 U.S.C. 552a(j)(2). (1) Under 5 U.S.C.
552a(j)(2), the head of any agency may promulgate rules to exempt any
system of records within the agency from certain provisions of the
Privacy Act if the agency or component thereof that maintains the system
performs as its principal function any activities pertaining to the
enforcement of criminal laws. Certain components of the Department of
the Treasury have as their principal function activities pertaining to
the enforcement of criminal laws. This paragraph applies to the
following systems of records maintained by the Department of the
Treasury:
    (i) Treasury.
    (ii) Departmental Offices:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
DO .190......................  Investigation Data Management System.
DO .220......................  SIGTARP Hotline Database.
DO .221......................  SIGTARP Correspondence Database.
DO .222......................  SIGTARP Investigative MIS Database.
DO .223......................  SIGTARP Investigative Files Database.
DO .224......................  SIGTARP Audit Files Database.
DO .303......................  TIGTA General Correspondence.
DO .307......................  TIGTA Employee Relations Matters,
                                Appeals, Grievances, and Complaint
                                Files.
DO .308......................  TIGTA Data Extracts.
DO .309......................  TIGTA Chief Counsel Case Files.

[[Page 54]]


DO .310......................  TIGTA Chief Counsel Disclosure Section
                                Records.
DO .311......................  TIGTA Office of Investigations Files.
------------------------------------------------------------------------

    (iii) Alcohol and Tobacco Tax and Trade Bureau.
    (iv) Comptroller of the Currency:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
CC .110......................  Reports of Suspicious Activities.
CC .120......................  Bank Fraud Information System.
CC .500......................  Chief Counsel's Management Information
                                System.
CC .510......................  Litigation Information System.
OTS .001.....................  Confidential Individual Information
                                System.
OTS .004.....................  Criminal Referral Database.
------------------------------------------------------------------------

    (v) Bureau of Engraving and Printing.
    (vi) Financial Management Service.
    (vii) Internal Revenue Service:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
Treasury/IRS 46.002..........  Management Information System and Case
                                Files, Criminal Investigation.
Treasury/IRS 46.003..........  Confidential Informant Records, Criminal
                                Investigation.
Treasury/IRS 46.005..........  Electronic Surveillance and Monitoring
                                Records, Criminal Investigation.
Treasury/IRS 46.015..........  Relocated Witness Records, Criminal
                                Investigation.
Treasury/IRS 46.050..........  Automated Information Analysis and
                                Recordkeeping, Criminal Investigation.
IRS 90.001...................  Chief Counsel Management Information
                                System Records.
IRS 90.003...................  Chief Counsel Litigation and Advice
                                (Criminal) Records.
IRS 90.004...................  Chief Counsel Legal Processing Division
                                Records.
IRS 90.005...................  Chief Counsel Library Records.
------------------------------------------------------------------------

    (viii) U.S. Mint.
    (ix) Bureau of the Public Debt.
    (x) Financial Crimes Enforcement Network:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
FinCEN .001..................  FinCEN Database.
FinCEN .002..................  Suspicious Activity Reporting System.
FinCEN .003..................  Bank Secrecy Act Reports System.
------------------------------------------------------------------------

    (2) The Department hereby exempts the systems of records listed in
paragraphs (c)(1)(i) through (x) of this section from the following
provisions of 5 U.S.C. 552a, pursuant to 5 U.S.C. 552a(j)(2): 5 U.S.C.
552a(c)(3) and (4), 5 U.S.C. 552a(d)(1), (2), (3), (4), 5 U.S.C.
552a(e)(1), (2) and (3), 5 U.S.C. 552a(e)(4)(G), (H), and (I), 5 U.S.C.
552a(e)(5) and (8), 5 U.S.C. 552a(f), and 5 U.S.C. 552a(g).
    (d) Reasons for exemptions under 5 U.S.C. 552a(j)(2). (1) 5 U.S.C.
552a(e)(4)(G) and (f)(l) enable individuals to inquire whether a system
of records contains records pertaining to them. Application of these
provisions to the systems of records would give individuals an
opportunity to learn whether they have been identified as suspects or
subjects of investigation. As further described in the following
paragraph, access to such knowledge would impair the Department's
ability to carry out its mission, since individuals could:
    (i) Take steps to avoid detection;
    (ii) Inform associates that an investigation is in progress;
    (iii) Learn the nature of the investigation;
    (iv) Learn whether they are only suspects or identified as law
violators;
    (v) Begin, continue, or resume illegal conduct upon learning that
they are not identified in the system of records; or

[[Page 55]]

    (vi) Destroy evidence needed to prove the violation.
    (2) 5 U.S.C. 552a(d)(1), (e)(4)(H) and (f)(2), (3) and (5) grant
individuals access to records pertaining to them. The application of
these provisions to the systems of records would compromise the
Department's ability to provide useful tactical and strategic
information to law enforcement agencies.
    (i) Permitting access to records contained in the systems of records
would provide individuals with information concerning the nature of any
current investigations and would enable them to avoid detection or
apprehension by:
    (A) Discovering the facts that would form the basis for their
arrest;
    (B) Enabling them to destroy or alter evidence of criminal conduct
that would form the basis for their arrest; and
    (C) Using knowledge that criminal investigators had reason to
believe that a crime was about to be committed, to delay the commission
of the crime or commit it at a location that might not be under
surveillance.
    (ii) Permitting access to either on-going or closed investigative
files would also reveal investigative techniques and procedures, the
knowledge of which could enable individuals planning crimes to structure
their operations so as to avoid detection or apprehension.
    (iii) Permitting access to investigative files and records could,
moreover, disclose the identity of confidential sources and informants
and the nature of the information supplied and thereby endanger the
physical safety of those sources by exposing them to possible reprisals
for having provided the information. Confidential sources and informants
might refuse to provide criminal investigators with valuable information
unless they believe that their identities will not be revealed through
disclosure of their names or the nature of the information they
supplied. Loss of access to such sources would seriously impair the
Department's ability to carry out its mandate.
    (iv) Furthermore, providing access to records contained in the
systems of records could reveal the identities of undercover law
enforcement officers who compiled information regarding the individual's
criminal activities and thereby endanger the physical safety of those
undercover officers or their families by exposing them to possible
reprisals.
    (v) By compromising the law enforcement value of the systems of
records for the reasons outlined in paragraphs (d)(2)(i) through (iv) of
this section, permitting access in keeping with these provisions would
discourage other law enforcement and regulatory agencies, foreign and
domestic, from freely sharing information with the Department and thus
would restrict the Department's access to information necessary to
accomplish its mission most effectively.
    (vi) Finally, the dissemination of certain information that the
Department maintains in the systems of records is restricted by law.
    (3) 5 U.S.C. 552a(d)(2), (3) and (4), (e)(4)(H), and (f)(4) permit
an individual to request amendment of a record pertaining to him or her
and require the agency either to amend the record, or to note the
disputed portion of the record and to provide a copy of the individual's
statement of disagreement with the agency's refusal to amend a record to
persons or other agencies to whom the record is thereafter disclosed.
Since these provisions depend on the individual having access to his or
her records, and since these rules exempt the systems of records from
the provisions of 5 U.S.C. 552a relating to access to records, for the
reasons set out in paragraph (d)(2) of this section, these provisions
should not apply to the systems of records.
    (4) 5 U.S.C. 552a(c)(3) requires an agency to make accountings of
disclosures of a record available to the individual named in the record
upon his or her request. The accountings must state the date, nature,
and purpose of each disclosure of the record and the name and address of
the recipient.
    (i) The application of this provision would impair the ability of
law enforcement agencies outside the Department of the Treasury to make
effective use of information provided by the Department. Making
accountings of disclosures available to the subjects of an investigation
would alert them to the

[[Page 56]]

fact that another agency is conducting an investigation into their
criminal activities and could reveal the geographic location of the
other agency's investigation, the nature and purpose of that
investigation, and the dates on which that investigation was active.
Individuals possessing such knowledge would be able to take measures to
avoid detection or apprehension by altering their operations, by
transferring their criminal activities to other geographical areas, or
by destroying or concealing evidence that would form the basis for
arrest. In the case of a delinquent account, such release might enable
the subject of the investigation to dissipate assets before levy.
    (ii) Moreover, providing accountings to the subjects of
investigations would alert them to the fact that the Department has
information regarding their criminal activities and could inform them of
the general nature of that information. Access to such information could
reveal the operation of the Department's information-gathering and
analysis systems and permit individuals to take steps to avoid detection
or apprehension.
    (5) 5 U.S.C. 552(c)(4) requires an agency to inform any person or
other agency about any correction or notation of dispute that the agency
made in accordance with 5 U.S.C. 552a(d) to any record that the agency
disclosed to the person or agency if an accounting of the disclosure was
made. Since this provision depends on an individual's having access to
and an opportunity to request amendment of records pertaining to him or
her, and since these rules exempt the systems of records from the
provisions of 5 U.S.C. 552a relating to access to and amendment of
records, for the reasons set out in paragraph (f)(3) of this section,
this provision should not apply to the systems of records.
    (6) 5 U.S.C. 552a(e)(4)(I) requires an agency to publish a general
notice listing the categories of sources for information contained in a
system of records. The application of this provision to the systems of
records could compromise the Department's ability to provide useful
information to law enforcement agencies, since revealing sources for the
information could:
    (i) Disclose investigative techniques and procedures;
    (ii) Result in threats or reprisals against informants by the
subjects of investigations; and
    (iii) Cause informants to refuse to give full information to
criminal investigators for fear of having their identities as sources
disclosed.
    (7) 5 U.S.C. 552a(e)(1) requires an agency to maintain in its
records only such information about an individual as is relevant and
necessary to accomplish a purpose of the agency required to be
accomplished by statute or executive order. The term ``maintain,'' as
defined in 5 U.S.C. 552a(a)(3), includes ``collect'' and
``disseminate.'' The application of this provision to the systems of
records could impair the Department's ability to collect and disseminate
valuable law enforcement information.
    (i) In many cases, especially in the early stages of investigation,
it may be impossible to immediately determine whether information
collected is relevant and necessary, and information that initially
appears irrelevant and unnecessary often may, upon further evaluation or
upon collation with information developed subsequently, prove
particularly relevant to a law enforcement program.
    (ii) Not all violations of law discovered by the Department fall
within the investigative jurisdiction of the Department of the Treasury.
To promote effective law enforcement, the Department will have to
disclose such violations to other law enforcement agencies, including
State, local and foreign agencies, that have jurisdiction over the
offenses to which the information relates. Otherwise, the Department
might be placed in the position of having to ignore information relating
to violations of law not within the jurisdiction of the Department of
the Treasury when that information comes to the Department's attention
during the collation and analysis of information in its records.
    (8) 5 U.S.C. 552a(e)(2) requires an agency to collect information to
the greatest extent practicable directly from the subject individual
when the information may result in adverse determinations about an
individual's

[[Page 57]]

rights, benefits, and privileges under Federal programs. The application
of this provision to the systems of records would impair the
Department's ability to collate, analyze, and disseminate investigative,
intelligence, and enforcement information.
    (i) Most information collected about an individual under criminal
investigation is obtained from third parties, such as witnesses and
informants. It is usually not feasible to rely upon the subject of the
investigation as a source for information regarding his criminal
activities.
    (ii) An attempt to obtain information from the subject of a criminal
investigation will often alert that individual to the existence of an
investigation, thereby affording the individual an opportunity to
attempt to conceal his criminal activities so as to avoid apprehension.
    (iii) In certain instances, the subject of a criminal investigation
may assert his/her constitutional right to remain silent and refuse to
supply information to criminal investigators upon request.
    (iv) During criminal investigations it is often a matter of sound
investigative procedure to obtain information from a variety of sources
to verify information already obtained from the subject of a criminal
investigation or other sources.
    (9) 5 U.S.C. 552a(e)(3) requires an agency to inform each individual
whom it asks to supply information, on the form that it uses to collect
the information or on a separate form that the individual can retain, of
the agency's authority for soliciting the information; whether
disclosure of information is voluntary or mandatory; the principal
purposes for which the agency will use the information; the routine uses
that may be made of the information; and the effects on the individual
of not providing all or part of the information. The systems of records
should be exempted from this provision to avoid impairing the
Department's ability to collect and collate investigative, intelligence,
and enforcement data.
    (i) Confidential sources or undercover law enforcement officers
often obtain information under circumstances in which it is necessary to
keep the true purpose of their actions secret so as not to let the
subject of the investigation or his or her associates know that a
criminal investigation is in progress.
    (ii) If it became known that the undercover officer was assisting in
a criminal investigation, that officer's physical safety could be
endangered through reprisal, and that officer may not be able to
continue working on the investigation.
    (iii) Individuals often feel inhibited in talking to a person
representing a criminal law enforcement agency but are willing to talk
to a confidential source or undercover officer whom they believe are not
involved in law enforcement activities.
    (iv) Providing a confidential source of information with written
evidence that he or she was a source, as required by this provision,
could increase the likelihood that the source of information would be
subject to retaliation by the subject of the investigation.
    (v) Individuals may be contacted during preliminary information
gathering, surveys, or compliance projects concerning the administration
of the internal revenue laws before any individual is identified as the
subject of an investigation. Informing the individual of the matters
required by this provision would impede or compromise subsequent
investigations.
    (10) 5 U.S.C. 552a(e)(5) requires an agency to maintain all records
it uses in making any determination about any individual with such
accuracy, relevance, timeliness, and completeness as is reasonably
necessary to assure fairness to the individual in the determination.
    (i) Since 5 U.S.C. 552a(a)(3) defines ``maintain'' to include
``collect'' and ``disseminate,'' application of this provision to the
systems of records would hinder the initial collection of any
information that could not, at the moment of collection, be determined
to be accurate, relevant, timely, and complete. Similarly, application
of this provision would seriously restrict the Department's ability to
disseminate information pertaining to a possible violation of law to law
enforcement and regulatory agencies. In collecting information during a
criminal investigation, it is often impossible or

[[Page 58]]

unfeasible to determine accuracy, relevance, timeliness, or completeness
prior to collection of the information. In disseminating information to
law enforcement and regulatory agencies, it is often impossible to
determine accuracy, relevance, timeliness, or completeness prior to
dissemination because the Department may not have the expertise with
which to make such determinations.
    (ii) Information that may initially appear inaccurate, irrelevant,
untimely, or incomplete may, when collated and analyzed with other
available information, become more pertinent as an investigation
progresses. In addition, application of this provision could seriously
impede criminal investigators and intelligence analysts in the exercise
of their judgment in reporting results obtained during criminal
investigations.
    (11) 5 U.S.C. 552a(e)(8) requires an agency to make reasonable
efforts to serve notice on an individual when the agency makes any
record on the individual available to any person under compulsory legal
process, when such process becomes a matter of public record. The
systems of records should be exempted from this provision to avoid
revealing investigative techniques and procedures outlined in those
records and to prevent revelation of the existence of an ongoing
investigation where there is need to keep the existence of the
investigation secret.
    (12) 5 U.S.C. 552a(g) provides for civil remedies to an individual
when an agency wrongfully refuses to amend a record or to review a
request for amendment, when an agency wrongfully refuses to grant access
to a record, when an agency fails to maintain accurate, relevant,
timely, and complete records which are used to make a determination
adverse to the individual, and when an agency fails to comply with any
other provision of 5 U.S.C. 552a so as to adversely affect the
individual. The systems of records should be exempted from this
provision to the extent that the civil remedies may relate to provisions
of 5 U.S.C. 552a from which these rules exempt the systems of records,
since there should be no civil remedies for failure to comply with
provisions from which the Department is exempted. Exemption from this
provision will also protect the Department from baseless civil court
actions that might hamper its ability to collate, analyze, and
disseminate investigative, intelligence, and law enforcement data.
    (e) Specific exemptions under 5 U.S.C. 552a(k)(1). (1) Under 5
U.S.C. 552a(k)(1), the head of any agency may promulgate rules to exempt
any system of records within the agency from certain provisions of the
Privacy Act to the extent that the system contains information subject
to the provisions of 5 U.S.C. 552(b)(1). This paragraph applies to the
following systems of records maintained by the Department of the
Treasury:
    (i) Departmental Offices:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
DO .120......................  Records Related to Office of Foreign
                                Assets Control Economic Sanctions.
------------------------------------------------------------------------

    (ii) Financial Crimes Enforcement Network:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
FinCEN .001..................  FinCEN Database.
------------------------------------------------------------------------

    (2) The Department of the Treasury hereby exempts the systems of
records listed in paragraph (e)(1)(i) and (ii) of this section from the
following provisions of 5 U.S.C. 552a, pursuant to 5 U.S.C. 552a(k)(1):
5 U.S.C. 552a(c)(3), 5 U.S.C. 552a(d)(1), (2), (3), and (4), 5 U.S.C.
552a(e)(1), 5 U.S.C. 552a(e)(4)(G), (H), and (I), and 5 U.S.C. 552a(f).

[[Page 59]]

    (f) Reasons for exemptions under 5 U.S.C. 552a(k)(1). The reason for
invoking the exemption is to protect material authorized to be kept
secret in the interest of national defense or foreign policy pursuant to
Executive Orders 12958, 13526, or successor or prior Executive Orders.
    (g) Specific exemptions under 5 U.S.C. 552a(k)(2). (1) Under 5
U.S.C. 552a(k)(2), the head of any agency may promulgate rules to exempt
any system of records within the agency from certain provisions of the
Privacy Act if the system is investigatory material compiled for law
enforcement purposes and for the purposes of assuring the safety of
individuals protected by the Department pursuant to the provisions of 18
U.S.C. 3056. This paragraph applies to the following systems of records
maintained by the Department of the Treasury:
    (i) Treasury:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
Treasury .013................  Department of the Treasury Civil Rights
                                Complaints and Compliance Review Files.
------------------------------------------------------------------------

    (ii) Departmental Offices:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
DO .120......................  Records Related to Office of Foreign
                                Assets Control Economic Sanctions.
DO .144......................  General Counsel Litigation Referral and
                                Reporting System.
DO .190......................  Investigation Data Management System.
DO .220......................  SIGTARP Hotline Database.
DO .221......................  SIGTARP Correspondence Database.
DO .222......................  SIGTARP Investigative MIS Database.
DO .223......................  SIGTARP Investigative Files Database.
DO .224......................  SIGTARP Audit Files Database.
DO.225.......................  TARP Fraud Investigation Information
                                System.
DO .303......................  TIGTA General Correspondence.
DO .307......................  TIGTA Employee Relations Matters,
                                Appeals, Grievances, and Complaint
                                Files.
DO .308......................  TIGTA Data Extracts.
DO .309......................  TIGTA Chief Counsel Case Files.
DO .310......................  TIGTA Chief Counsel Disclosure Section
                                Records.
DO .311......................  TIGTA Office of Investigations Files.
------------------------------------------------------------------------

    (iii) Alcohol and Tobacco Tax and Trade Bureau:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
TTB .001.....................  Regulatory Enforcement Record System.
------------------------------------------------------------------------

    (iv) Comptroller of the Currency:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
CC .100......................  Enforcement Action Report System.
CC .110......................  Reports of Suspicious Activities.
CC .120......................  Bank Fraud Information System.
CC .220......................  Section 914 Tracking System.
CC .500......................  Chief Counsel's Management Information
                                System.
CC .510......................  Litigation Information System.
CC .600......................  Consumer Complaint Inquiry and
                                Information System.
OTS .001.....................  Confidential Individual Information
                                System.
OTS .004.....................  Criminal Referral Database.
------------------------------------------------------------------------

    (v) Bureau of Engraving and Printing:

[[Page 60]]



------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
BEP .021.....................  Investigative files.
------------------------------------------------------------------------

    (vi) Financial Management Service.
    (vii) Internal Revenue Service:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
IRS 00.002...................  Correspondence File-Inquiries about
                                Enforcement Activities.
IRS 00.007...................  Employee Complaint and Allegation
                                Referral Records.
IRS 00.334...................  Third Party Contact Reprisal Records.
IRS 22.061...................  Wage and Information Returns Processing
                                (IRP).
IRS 24.047...................  Audit Underreporter Case Files.
IRS 26.001...................  Acquired Property Records.
IRS 26.006...................  Form 2209, Courtesy Investigations.
IRS 26.012...................  Offer in Compromise (OIC) Files.
IRS 26.013...................  One-hundred Per Cent Penalty Cases.
IRS 26.019...................  TDA (Taxpayer Delinquent Accounts).
IRS 26.020...................  TDI (Taxpayer Delinquency Investigations)
                                Files.
IRS 26.021...................  Transferee Files.
IRS 34.037...................  IRS Audit Trail and Security Records
                                System.
IRS 37.007...................  Practitioner Disciplinary Records.
IRS 37.009...................  Enrolled Agents Records.
IRS 42.001...................  Examination Administrative File.
IRS 42.002...................  Excise Compliance Programs.
IRS 42.005...................  Whistleblower Office Records.
IRS 42.008...................  Audit Information Management System
                                (AIMS).
IRS 42.016...................  Classification and Examination Selection
                                Files.
IRS 42.017...................  International Enforcement Program Files.
IRS 42.021...................  Compliance Programs and Projects Files.
IRS 42.031...................  Anti-Money Laundering/Bank Secrecy Act
                                (BSA) and Form 8300 Records.
IRS 44.001...................  Appeals Case Files.
Treasury/IRS 46.050..........  Automated Information Analysis and
                                Recordkeeping, Criminal Investigation.
IRS 48.001...................  Disclosure Records.
IRS 49.001...................  Collateral and Information Requests
                                System.
IRS 49.002...................  Component Authority and Index Card
                                Microfilm Retrieval System.
IRS 50.222...................  Tax Exempt Government Entities Case
                                Management Records.
IRS 60.000...................  Employee Protection System Records.
IRS 90.001...................  Chief Counsel Management Information
                                System Records.
IRS 90.002...................  Chief Counsel Litigation and Advice
                                (Civil) Records.
IRS 90.004...................  Chief Counsel Legal Processing Division
                                Records.
IRS 90.005...................  Chief Counsel Library Records.
------------------------------------------------------------------------

    (viii) U.S. Mint:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
Mint .008....................  Criminal investigation files.
------------------------------------------------------------------------

    (ix) Bureau of the Public Debt:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
BPD.009......................  U.S. Treasury Securities Fraud
                                Information System.
------------------------------------------------------------------------

    (x) Financial Crimes Enforcement Network:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
FinCEN .001..................  FinCEN Database.
FinCEN .002..................  Suspicious Activity Reporting System.
FinCEN .003..................  Bank Secrecy Act Reports System.
------------------------------------------------------------------------


[[Page 61]]

    (2) The Department hereby exempts the systems of records listed in
paragraphs (g)(1)(i) through (x) of this section from the following
provisions of 5 U.S.C. 552a, pursuant to 5 U.S.C. 552a(k)(2): 5 U.S.C.
552a(c)(3), 5 U.S.C. 552a(d)(1), (2), (3), (4), 5 U.S.C. 552a(e)(1), 5
U.S.C. 552a(e)(4)(G), (H), and (I), and 5 U.S.C. 552a(f).
    (h) Reasons for exemptions under 5 U.S.C. 552a(k)(2). (1) 5 U.S.C.
552a(c)(3) requires an agency to make accountings of disclosures of a
record available to the individual named in the record upon his or her
request. The accountings must state the date, nature, and purpose of
each disclosure of the record and the name and address of the recipient.
    (i) The application of this provision would impair the ability of
the Department of the Treasury and of law enforcement agencies outside
the Department to make effective use of information maintained by the
Department. Making accountings of disclosures available to the subjects
of an investigation would alert them to the fact that an agency is
conducting an investigation into their illegal activities and could
reveal the geographic location of the investigation, the nature and
purpose of that investigation, and the dates on which that investigation
was active. Individuals possessing such knowledge would be able to take
measures to avoid detection or apprehension by altering their
operations, by transferring their illegal activities to other
geographical areas, or by destroying or concealing evidence that would
form the basis for detection or apprehension. In the case of a
delinquent account, such release might enable the subject of the
investigation to dissipate assets before levy.
    (ii) Providing accountings to the subjects of investigations would
alert them to the fact that the Department has information regarding
their illegal activities and could inform them of the general nature of
that information.
    (2) 5 U.S.C. 552a(d)(1), (e)(4)(H) and (f)(2), (3) and (5) grant
individuals access to records pertaining to them. The application of
these provisions to the systems of records would compromise the
Department's ability to utilize and provide useful tactical and
strategic information to law enforcement agencies.
    (i) Permitting access to records contained in the systems of records
would provide individuals with information concerning the nature of any
current investigations and would enable them to avoid detection or
apprehension by:
    (A) Discovering the facts that would form the basis for their
detection or apprehension;
    (B) Enabling them to destroy or alter evidence of illegal conduct
that would form the basis for their detection or apprehension, and
    (C) Using knowledge that investigators had reason to believe that a
violation of law was about to be committed, to delay the commission of
the violation or commit it at a location that might not be under
surveillance.
    (ii) Permitting access to either on-going or closed investigative
files would also reveal investigative techniques and procedures, the
knowledge of which could enable individuals planning non-criminal acts
to structure their operations so as to avoid detection or apprehension.
    (iii) Permitting access to investigative files and records could,
moreover, disclose the identity of confidential sources and informants
and the nature of the information supplied and thereby endanger the
physical safety of those sources by exposing them to possible reprisals
for having provided the information. Confidential sources and informants
might refuse to provide investigators with valuable information unless
they believed that their identities would not be revealed through
disclosure of their names or the nature of the information they
supplied. Loss of access to such sources would seriously impair the
Department's ability to carry out its mandate.
    (iv) Furthermore, providing access to records contained in the
systems of records could reveal the identities of undercover law
enforcement officers or other persons who compiled information regarding
the individual's illegal activities and thereby endanger the physical
safety of those undercover officers, persons, or their families by
exposing them to possible reprisals.
    (v) By compromising the law enforcement value of the systems of
records

[[Page 62]]

for the reasons outlined in paragraphs (h)(2)(i) through (iv) of this
section, permitting access in keeping with these provisions would
discourage other law enforcement and regulatory agencies, foreign and
domestic, from freely sharing information with the Department and thus
would restrict the Department's access to information necessary to
accomplish its mission most effectively.
    (vi) Finally, the dissemination of certain information that the
Department may maintain in the systems of records is restricted by law.
    (3) 5 U.S.C. 552a(d)(2), (3) and (4), (e)(4)(H), and (f)(4) permit
an individual to request amendment of a record pertaining to him or her
and require the agency either to amend the record, or to note the
disputed portion of the record and to provide a copy of the individual's
statement of disagreement with the agency's refusal to amend a record to
persons or other agencies to whom the record is thereafter disclosed.
Since these provisions depend on the individual having access to his or
her records, and since these rules exempt the systems of records from
the provisions of 5 U.S.C. 552a relating to access to records, these
provisions should not apply to the systems of records for the reasons
set out in paragraph (h)(2) of this section.
    (4) 5 U.S.C. 552a(e)(1) requires an agency to maintain in its
records only such information about an individual as is relevant and
necessary to accomplish a purpose of the agency required by statute or
executive order. The term ``maintain,'' as defined in 5 U.S.C.
552a(a)(3), includes ``collect'' and ``disseminate.'' The application of
this provision to the system of records could impair the Department's
ability to collect, utilize and disseminate valuable law enforcement
information.
    (i) In many cases, especially in the early stages of investigation,
it may be impossible immediately to determine whether information
collected is relevant and necessary, and information that initially
appears irrelevant and unnecessary often may, upon further evaluation or
upon collation with information developed subsequently, prove
particularly relevant to a law enforcement program.
    (ii) Not all violations of law discovered by the Department analysts
fall within the investigative jurisdiction of the Department of the
Treasury. To promote effective law enforcement, the Department will have
to disclose such violations to other law enforcement agencies, including
State, local and foreign agencies that have jurisdiction over the
offenses to which the information relates. Otherwise, the Department
might be placed in the position of having to ignore information relating
to violations of law not within the jurisdiction of the Department of
the Treasury when that information comes to the Department's attention
during the collation and analysis of information in its records.
    (5) 5 U.S.C. 552a(e)(4)(G) and (f)(1) enable individuals to inquire
whether a system of records contains records pertaining to them.
Application of these provisions to the systems of records would allow
individuals to learn whether they have been identified as suspects or
subjects of investigation. As further described in the following
paragraph, access to such knowledge would impair the Department's
ability to carry out its mission, since individuals could:
    (i) Take steps to avoid detection;
    (ii) Inform associates that an investigation is in progress;
    (iii) Learn the nature of the investigation;
    (iv) Learn whether they are only suspects or identified as law
violators;
    (v) Begin, continue, or resume illegal conduct upon learning that
they are not identified in the system of records; or
    (vi) Destroy evidence needed to prove the violation.
    (6) 5 U.S.C. 552a(e)(4)(I) requires an agency to publish a general
notice listing the categories of sources for information contained in a
system of records. The application of this provision to the systems of
records could compromise the Department's ability to complete or
continue investigations or to provide useful information to law
enforcement agencies, since revealing sources for the information could:
    (i) Disclose investigative techniques and procedures;

[[Page 63]]

    (ii) Result in threats or reprisals against informants by the
subjects of investigations; and
    (iii) Cause informants to refuse to give full information to
investigators for fear of having their identities as sources disclosed.
    (i) Specific exemptions under 5 U.S.C. 552a(k)(4). (1) Under 5
U.S.C. 552a(k)(4), the head of any agency may promulgate rules to exempt
any system of records within the agency from certain provisions of the
Privacy Act if the system is required by statute to be maintained and
used solely as statistical records. This paragraph applies to the
following system of records maintained by the Department, for which
exemption is claimed under 5 U.S.C. 552a(k)(4).
    Internal Revenue Service:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
IRS 70.001...................  Statistics of Income--Individual Tax
                                Returns.
------------------------------------------------------------------------

    (2) The Department hereby exempts the system of records listed in
paragraph (i)(1) of this section from the following provisions of 5
U.S.C. 552a, pursuant to 5 U.S.C. 552a(k)(4): 5 U.S.C. 552a(c)(3), 5
U.S.C. 552a(d)(1), (2), (3), and (4), 5 U.S.C. 552a(e)(1), 5 U.S.C.
552a(e)(4)(G), (H), and (I), and 5 U.S.C. 552a(f).
    (3) The system of records is maintained under section 6108 of the
Internal Revenue Code, which provides that ``the Secretary or his
delegate shall prepare and publish annually statistics reasonably
available with respect to the operation of the income tax laws,
including classifications of taxpayers and of income, the amounts
allowed as deductions, exemptions, and credits, and any other facts
deemed pertinent and valuable.''
    (j) Reasons for exemptions under 5 U.S.C. 552a(k)(4). The reason for
exempting the system of records is that disclosure of statistical
records (including release of accounting for disclosures) would in most
instances be of no benefit to a particular individual since the records
do not have a direct effect on a given individual.
    (k) Specific exemptions under 5 U.S.C. 552a(k)(5). (1) Under 5
U.S.C. 552a(k)(5), the head of any agency may promulgate rules to exempt
any system of records within the agency from certain provisions of the
Privacy Act if the system is investigatory material compiled solely for
the purpose of determining suitability, eligibility, and qualifications
for Federal civilian employment or access to classified information, but
only to the extent that the disclosure of such material would reveal the
identity of a source who furnished information to the Government under
an express promise that the identity of the source would be held in
confidence, or, prior to September 27, 1975, under an implied promise
that the identity of the source would be held in confidence. Thus to the
extent that the records in this system can be disclosed without
revealing the identity of a confidential source, they are not within the
scope of this exemption and are subject to all the requirements of the
Privacy Act. This paragraph applies to the following systems of records
maintained by the Department or one of its bureaus:
    (i) Treasury:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
Treasury .007................  Personnel Security System.
------------------------------------------------------------------------

    (ii) Departmental Offices:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
DO .306......................  TIGTA Recruiting and Placement.
------------------------------------------------------------------------


[[Page 64]]

    (iii) Alcohol and Tobacco Tax and Trade Bureau.
    (iv) Comptroller of the Currency.
    (v) Bureau of Engraving and Printing.
    (vi) Financial Management Service.
    (vii) Internal Revenue Service:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
IRS 34.021...................  Personnel Security Investigations,
                                National Background Investigations
                                Center.
IRS 34.022...................  Automated Background Investigations
                                System (ABIS).
IRS 90.006...................  Chief Counsel Human Resources and
                                Administrative Records.
------------------------------------------------------------------------

    (viii) U.S. Mint.
    (ix) Bureau of the Public Debt.
    (x) Financial Crimes Enforcement Network.
    (2) The Department hereby exempts the systems of records listed in
paragraph (k)(1)(i) through (x) of this section from the following
provisions of 5 U.S.C. 552a, pursuant to 5 U.S.C. 552a(k)(5): 5 U.S.C.
552a(c)(3), 5 U.S.C. 552a(d)(1), (2), (3), and (4), 5 U.S.C. 552a(e)(1),
5 U.S.C. 552a(e)(4)(G), (H), and (I), and 5 U.S.C. 552a(f).
    (l) Reasons for exemptions under 5 U.S.C. 552a(k)(5). (1) The
sections of 5 U.S.C. 552a from which the systems of records are exempt
include in general those providing for individuals' access to or
amendment of records. When such access or amendment would cause the
identity of a confidential source to be revealed, it would impair the
future ability of the Department to compile investigatory material for
the purpose of determining suitability, eligibility, or qualifications
for Federal civilian employment, Federal contracts, or access to
classified information. In addition, the systems shall be exempt from 5
U.S.C. 552a(e)(1) which requires that an agency maintain in its records
only such information about an individual as is relevant and necessary
to accomplish a purpose of the agency required to be accomplished by
statute or executive order. The Department believes that to fulfill the
requirements of 5 U.S.C. 552a(e)(1) would unduly restrict the agency in
its information gathering inasmuch as it is often not until well after
the investigation that it is possible to determine the relevance and
necessity of particular information.
    (2) If any investigatory material contained in the above-named
systems becomes involved in criminal or civil matters, exemptions of
such material under 5 U.S.C. 552a(j)(2) or (k)(2) is hereby claimed.
    (m) Exemption under 5 U.S.C. 552a(k)(6). (1) Under 5 U.S.C.
552a(k)(6), the head of any agency may promulgate rules to exempt any
system of records that is testing or examination material used solely to
determine individual qualifications for appointment or promotion in the
Federal service the disclosure of which would compromise the objectivity
or fairness of the testing or examination process. This paragraph
applies to the following system of records maintained by the Department,
for which exemption is claimed under 5 U.S.C. 552a(k)(6).
    Departmental Officers:

------------------------------------------------------------------------
            Number                            System name
------------------------------------------------------------------------
DO .306......................  TIGTA Recruiting and Placement Records.
------------------------------------------------------------------------

    (2) The Department hereby exempts the system of records listed in
paragraphs (m)(1) of this section from the following provisions of 5
U.S.C. 552a, pursuant to 5 U.S.C. 552a(k)(6): 5 U.S.C. 552a(c)(3), 5
U.S.C. 552a(d)(1), (2), (3), and (4), 5 U.S.C. 552a(e)(1), 5 U.S.C.
552a(e)(4)(G), (H), and (I), and 5 U.S.C. 552a(f).
    (n) Reasons for exemptions under 5 U.S.C. 552a(k)(6). The reason for
exempting the system of records is that disclosure of the material in
the system would compromise the objectivity or fairness of the
examination process.
    (o) Exempt information included in another system. Any information
from a

[[Page 65]]

system of records for which an exemption is claimed under 5 U.S.C.
552a(j) or (k) which is also included in another system of records
retains the same exempt status such information has in the system for
which such exemption is claimed.

[77 FR 28479, May 15, 2012, as amended at 77 FR 59548, Sept. 28, 2012;
79 FR 12944, Mar. 7, 2014]



      Sec. Appendix A to Subpart C of Part 1--Departmental Offices

    1. In general. This appendix applies to the Departmental Offices as
defined in 31 CFR part 1, subpart C, Sec. 1.20. It sets forth specific
notification and access procedures with respect to particular systems of
records, identifies the officers designated to make the initial
determinations with respect to notification and access to records, the
officers designated to make the initial and appellate determinations
with respect to requests for amendment of records, the officers
designated to grant extensions of time on appeal, the officers with whom
``Statement of Disagreement'' may be filed, the officer designated to
receive service of process and the addresses for delivery of requests,
appeals, and service of process. In addition, it references the notice
of systems of records and notices of the routine uses of the information
in the system required by 5 U.S.C. 552a(e)(4) and (11) and published
annually by the Office of the Federal Register in ``Privacy Act
Issuances''.
    2. Requests for notification and access to records and accountings
of disclosures. Initial determinations under 31 CFR 1.26, whether to
grant requests for notification and access to records and accountings of
disclosures for the Departmental Offices, will be made by the head of
the organizational unit having immediate custody of the records
requested, or the delegate of such official. This information is
contained in the appropriate system notice in the ``Privacy Act
Issuances'', published annually by the Office of the Federal Register.
Requests for information and specific guidance on where to send requests
for records should be addressed to:
    Privacy Act Request, DO, Director, Disclosure Services Department of
the Treasury, 1500 Pennsylvania Avenue, NW., Washington, DC 20220.
    3. Requests for amendments of records. Initial determinations under
31 CFR 1.27(a) through (d) with respect to requests to amend records for
records maintained by the Departmental Offices will be made by the head
of the organization or unit having immediate custody of the records or
the delegate of such official. Requests for amendment of records should
be addressed as indicated in the appropriate system notice in ``Privacy
Act Issuances'' published by the Office of the Federal Register.
Requests for information and specific guidance on where to send these
requests should be addressed to: Privacy Act Amendment Request, DO,
Director, Disclosure Services Department of the Treasury, 1500
Pennsylvania Avenue, NW., Washington, DC 20220.
    4. Administrative appeal of initial determination refusing to amend
record. Appellate determinations under 31 CFR 1.27(e) with respect to
records of the Departmental Offices, including extensions of time on
appeal, will be made by the Secretary, Deputy Secretary, Under
Secretary, General Counsel, Special Inspector General for Troubled
Assets Relief Program, or Assistant Secretary having jurisdiction over
the organizational unit which has immediate custody of the records, or
the delegate of such official, as limited by 5 U.S.C. 552a(d) (2) and
(3). Appeals made by mail should be addressed as indicated in the letter
of initial decision or to:
    Privacy Act Amendment Request, DO, Director, Disclosure Services
Department of the Treasury, 1500 Pennsylvania Avenue, NW., Washington,
DC 20220.
    5. Statements of disagreement. ``Statements of Disagreement'' as
described in 31 CFR 1.27(e)(4) shall be filed with the official signing
the notification of refusal to amend at the address indicated in the
letter of notification within 35 days of the date of notification and
should be limited to one page.
    6. Service of process. Service of process will be received by the
General Counsel of the Department of the Treasury or the delegate of
such official and shall be delivered to the following location:
    General Counsel, Department of the Treasury, Room 3000, Main
Treasury Building, 1500 Pennsylvania Avenue, NW., Washington, DC 20220.
    7. Annual notice of systems of records. The annual notice of systems
of records required to be published by the Office of the Federal
Register in the publication entitled ``Privacy Act Issuances'', as
specified in 5 U.S.C. 552a (f). Any specific requirements for access,
including identification requirements, in addition to the requirements
set forth in 31 CFR 1.26 and 1.27 and 8 of this appendix, and locations
for access are indicated in the notice for the pertinent system.
    8. Verification of identity. An individual seeking notification or
access to records, or seeking to amend a record, must satisfy one of the
following identification requirements before action will be taken by the
Departmental Offices on any such request:
    (i) An individual seeking notification or access to records in
person, or seeking to amend a record in person, may establish identity
by the presentation of a single official document bearing a photograph
(such as a passport or identification badge) or by the

[[Page 66]]

presentation of two items of identification which do not bear a
photograph but do bear both a name and signature (such as a driver's
license or credit card).
    (ii) An individual seeking notification or access to records by
mail, or seeking to amend a record by mail, may establish identity by a
signature, address, and one other identifier such as a photocopy of a
driver's license or other official document bearing the individual's
signature.
    (iii) Notwithstanding subdivisions (i) and (ii) of this
subparagraph, an individual seeking notification or access to records by
mail or in person, or seeking to amend a record by mail or in person,
who so desires, may establish identity by providing a notarized
statement, swearing or affirming to such individual's identity and to
the fact that the individual understands the penalties provided in 5
U.S.C. 552a(i)(3) for requesting or obtaining access to records under
false pretenses.
Notwithstanding subdivision (i), (ii), or (iii) of this subparagraph, a
designated official may require additional proof of an individual's
identity before action will be taken on any request, if such official
determines that it is necessary to protect against unauthorized
disclosure of information in a particular case. In addition, a parent of
any minor or a legal guardian of any individual will be required to
provide adequate proof of legal relationship before such person may act
on behalf of such minor or such individual.

[52 FR 26305, July 14, 1987, as amended at 75 FR 745, Jan. 6, 2010]



    Sec. Appendix B to Subpart C of Part 1--Internal Revenue Service

    1. Purpose. The purpose of this section is to set forth the
procedures that have been established by the Internal Revenue Service
for individuals to exercise their rights under the Privacy Act of 1974
(88 Stat. 1896) with respect to systems of records maintained by the
Internal Revenue Service, including the Office of the Chief Counsel. The
procedures contained in this section are to be promulgated under the
authority of 5 U.S.C. 552a(f). The procedures contained in this section
relate to the following:
    (a) The procedures whereby an individual can be notified in response
to a request if a system of records named by the individual contains a
record pertaining to such individual (5 U.S.C. 552a(f)(1)).
    (b) The procedures governing reasonable times, places, and
requirements for identifying an individual who requests a record of
information pertaining to such individual before the Internal Revenue
Service will make the record or information available to the individual
(5 U.S.C. 552a (f)(2)).
    (c) The procedures for the disclosure to an individual upon a
request of a record of information pertaining to such individual,
including special procedures for the disclosure to an individual of
medical records, including psychological records. (5 U.S.C. 552a
(f)(3)).
    (d) The procedures for reviewing a request from an individual
concerning the amendment of any record or information pertaining to the
individual, for making a determination on the request, for an appeal
within the Internal Revenue Service of an initial adverse agency
determination, and for whatever additional means may be necessary for
individuals to be able to exercise fully their right under 5 U.S.C. 552a
(5 U.S.C. 552a (f)(4)).
    Any individual seeking to determine whether a system of records
maintained by any office of the Internal Revenue Service contains a
record or information pertaining to such individual, or seeking access
to, or amendment of, such a record, must comply fully with the
applicable procedure contained in paragraph (3) or (4) of this section
before the Internal Revenue Service will act on the request. Neither the
notification and access (or accounting of disclosures) procedures under
paragraph (3) of this section nor the amendment procedures under
paragraph (4) of this section are applicable to (i) systems of records
exempted pursuant to 5 U.S.C. 552a (j) and (k), (ii) information
compiled in reasonable anticipation of a civil action or proceeding (see
5 U.S.C. 552a (d)(5)), or (iii) information pertaining to an individual
which is contained in, and inseparable from, another individual's
record.
    2. Access to and amendment of tax records. The provisions of the
Privacy Act of 1974 may not be used by an individual to amend or correct
any tax record. The determination of liability for taxes imposed by the
Internal Revenue Service Code, the collection of such taxes, and the
payment (including credits or refunds of overpayments) of such taxes are
governed by the provisions of the Internal Revenue Service Code and by
the procedural rules of the Internal Revenue Service. These provisions
set forth the established procedures governing the determination of
liability for tax, the collection of such taxes, and the payment
(including credits or refunds of overpayments) of such taxes. In
addition, these provisions set forth the procedures (including
procedures for judicial review) for resolving disputes between taxpayers
and the Internal Revenue Service involving the amount of tax owed, or
the payment or collection of such tax. These procedures are the
exclusive means available to an individual to contest the amount of any
liability for tax or the payment or collection thereof. See, for
example, 26 CFR 601.103 for summary of general tax procedures.
Individuals are advised that Internal Revenue Service procedures permit
the examination of tax records during the course of an investigation,
audit, or collection activity. Accordingly, individuals

[[Page 67]]

should contact the Internal Revenue Service employee conducting an audit
or effecting the collection of tax liabilities to gain access to such
records, rather than seeking access under the provisions of the Privacy
Act. Where, on the other hand, an individual desires information or
records not in connection with an investigation, audit, or collection
activity, the individual may follow these procedures.
    3. Procedures for access to records--(a) In general. This paragraph
sets forth the procedure whereby an individual can be notified in
response to a request if a system of records named by the individual
which is maintained by the Internal Revenue Service contains a record
pertaining to such individual. In addition, this paragraph sets forth
the procedure for the disclosure to an individual upon a request of a
record or information pertaining to such individual, including the
procedures for verifying the identity of the individual before the
Internal Revenue Service will make a record available, and the procedure
for requesting an accounting of disclosures of such records. An
individual seeking to determine whether a particular system of records
contains a record or records pertaining to such individual and seeking
access to such records (or seeking an accounting of disclosures of such
records) shall make a request for notification and access (or a request
for an accounting of disclosures) in accordance with the rules provided
in paragraph 3(b) of this section.
    (b) Form of request for notification and access or request for an
accounting of disclosures. (i) A request for notification and access (or
request for an accounting of disclosures) shall be made in writing and
shall be signed by the person making the request.
    (ii) Such request shall be clearly marked, ``Request for
notification and access,'' or ``Request for accounting of disclosures.''
    (iii) Such a request shall contain a statement that it is being made
under the provisions of the Privacy Act of 1974.
    (iv) Such request shall contain the name and address of the
individual making the request. In addition, if a particular system
employs an individual's social security number as an essential means of
accessing the system, the request must include the individual's social
security number. In the case of a record maintained in the name of two
or more individuals (e.g., husband and wife), the request shall contain
the names, addresses, and social security numbers (if necessary) of both
individuals.
    (v) Such request shall specify the name and location of the
particular system of records (as set forth in the Notice of Systems) for
which the individual is seeking notification and access (or an
accounting of disclosures), and the title and business address of the
official designated in the access section for the particular system (as
set forth in the Notice of Systems). In the case of two or more systems
of records which are under the control of the same designated official
at the same systems location, a single request may be made for such
systems. In the case of two or more systems of records which are not in
the control of the same designated official at the same systems
location, a separate request must be made for each such system.
    (vi) If an individual wishes to limit a request for notification and
access to a particular record or records, the request should identify
the particular record. In the absence of a statement to the contrary, a
request for notification and access for a particular system of records
shall be considered to be limited to records which are currently
maintained by the designated official at the systems location specified
in the request.
    (vii) If such request is seeking notification and access to material
maintained in a system of records which is exempt from disclosure and
access under 5 U.S.C. 552a (k)(2), the individual making the request
must establish that such individual has been denied a right, privilege,
or benefit that such individual would otherwise be entitled to under
Federal law as a result of the maintenance of such material.
    (viii) Such request shall state whether the individual wishes to
inspect the record in person, or desires to have a copy made and
furnished without first inspecting it. If the individual desires to have
a copy made, the request must include an agreement to pay the fee for
duplication ultimately determined to be due. If the individual does not
wish to inspect a record, but merely wishes to be notified whether a
particular system or records contains a record pertaining to such
individual, the request should so state.
    (c) Time and place for making a request. A request for notification
and access to records under the Privacy Act (or a request for accounting
of disclosures) shall be addressed to or delivered in person to the
office of the official designated in the access section for the
particular system of records for which the individual is seeking
notification and access (or an accounting of disclosures). The title and
office address of such official is set forth for each system of records
in the Notice of Systems of Records. A request delivered to an office in
person must be delivered during the regular office hours of that office.
    (d) Sample request for notification and access to records. The
following are sample requests for notification and access to records
which will satisfy the requirements of this paragraph:

         Request for Notification and Access to Records by Mail

    I, John Doe, of 100 Main Street, Boston, MA 02108 (soc. sec. num.
000-00-0000) request under the Privacy Act of 1974 that the following
system of records be examined and

[[Page 68]]

that I be furnished with a copy of any record (or a specified record)
contained therein pertaining to me. I agree that I will pay the fees
ultimately determined to be due for duplication of such record. I have
enclosed the necessary information.

System Name:
System Location:
Designated Official:

________________________________________________________________________
                                                                John Doe

        Request for Notification and Access to Records in Person

    I, John Doe, of 100 Main Street, Boston, MA 02108 (soc. sec. num.
000-00-0000) request under the provisions of the Privacy Act of 1974,
that the following system of records be examined and that I be granted
access in person to inspect any record (or a specified record) contained
therein pertaining to me. I have enclosed the necessary identification.

System Name:
System Location:
Designated Official:

________________________________________________________________________
                                                                John Doe

    (e) Processing a request for notification and access to records or a
request for an accounting of disclosures. (i) If a request for
notification and access (or request for an accounting of disclosures)
omits any information which is essential to processing the request, the
request will not be acted upon and the individual making the request
will be promptly advised of the additional information which must be
submitted before the request can be processed.
    (ii) Within 30 days (not including Saturdays, Sundays, and legal
public holidays) after the receipt of a request for notification and
access (or a request for an accounting of disclosures), to a particular
system of records by the designated official for such system, a
determination will be made as to whether the particular system of
records is exempt from the notification and access provisions of the
Privacy Act, and if such system is not exempt, whether it does or does
not contain a record pertaining to the individual making the request. If
a determination cannot be made within 30 days, the individual will be
notified of the delay, the reasons therefor, and the approximate time
required to make a determination. If it is determined by the designated
official that the particular system of records is exempt from the
notification and access provisions of the Privacy Act, the individual
making the request will be notified of the provisions of the Privacy Act
under which the exemption is claimed. On the other hand, if it is
determined by the designated official that the particular system of
records is not exempted from the notification and access provisions of
the Privacy Act and that such system contains a record pertaining to the
individual making the request, the individual will be notified of the
time and place where inspection may be made. If an individual has not
requested that access be granted to inspect the record in person, but
merely requests that a copy of the record be furnished, or if it is
determined by the designated official that the granting of access to
inspect a record in person is not feasible in a particular case, then
the designated official will furnish a copy of the record with the
notification, or if a copy cannot be furnished at such time, a statement
indicating the approximate time such copy will be furnished. If the
request is for an accounting of disclosures from a system of records
which is not exempt from the accounting of disclosure provisions of the
Privacy Act, the individual will be furnished with an accounting of such
disclosures.
    (f) Granting of access. Normally, an individual will be granted
access to inspect a record in person within 30 days (excluding
Saturdays, Sundays, and legal public holidays) after the receipt for a
request for notification and access by the designated official. If
access cannot be granted within 30 days, the notification will state the
reasons for the delay and the approximate time such access will be
granted. An individual wishing to inspect a record may be accompanied by
another person of his choosing. Both the individual seeking access and
the individual accompanying him may be required to sign a form supplied
by the IRS indicating that the Service is authorized to disclose or
discuss the contents of the record in the presence of both individuals.
See 26 CFR 601.502 for requirements to be met by taxpayer's
representatives in order to discuss the contents of any tax records.
    (g) Medical records. When access is requested to medical records
(including psychological records), the designated official may determine
that release of such records will be made only to a physician designated
by the individual to have access to such records.
    (h) Verification of identity. An individual seeking notification or
access to records, or seeking to amend a record, must satisfy one of the
following identification requirements before action will be taken by the
IRS on any such request:
    (i) An individual seeking notification or access to records in
person, or seeking to amend a record in person, may establish identity
by the presentation of a single document bearing a photograph (such as a
passport or identification badge) or by the presentation of two items of
identification which do not bear a photograph but do bear both a name
and signature (such as a driver's license or credit card).

[[Page 69]]

    (ii) An individual seeking notification or access to records by
mail, or seeking to amend a record by mail, may establish identity by a
signature, address, and one other identifier such as a photocopy of a
driver's license or other document bearing the individual's signature.
    (iii) Notwithstanding subdivisions (i) and (ii) of this
subparagraph, an individual seeking notification or access to records by
mail or in person, or seeking to amend a record by mail or in person,
who so desires, may establish identity by providing a notarized
statement, swearing or affirming to such individual's identity and to
the fact that the individual understands the penalties provided in 5
U.S.C. 552a(i)(3) for requesting or obtaining access to records under
false pretenses.
    (iv) Notwithstanding subdivisions (i), (ii), or (iii) of this
subparagraph, a designated official may require additional proof of an
individual's identity before action will be taken on any request if such
official determines that it is necessary to protect unauthorized
disclosure of information in a particular case. In addition, a parent of
any minor or a legal guardian of any individual will be required to
provide adequate proof of legal relationship before such person may act
on behalf of such minor or such individual.
    (i) Fees. The fee for costs required of the IRS in copying records
pursuant to this paragraph is $0.15 per page. However, no fee will be
charged if the aggregate costs required of the IRS in copying records is
less than $3.00. If an individual who has requested access to inspect a
record in person is denied such access by the designated official
because it would not be feasible in a particular case, copies of such
record will be furnished to the individual without payment of the fees
otherwise required under this subparagraph. If the IRS estimates that
the total fees for costs incurred in complying with a request for copies
of records will amount to $50 or more, the individual making the request
may be required to enter into a contract for the payment of the actual
fees with respect to the request before the Service will furnish the
copies requested. Payment of fees for copies of records should be made
by check or money order payable to the Internal Revenue Service.
    4. Procedures for amendment of records. (a) In general. This
paragraph sets forth the procedures for reviewing a request from an
individual concerning the amendment of any record or information
pertaining to such individual, for making a determination on the
request, for making an appeal within the IRS of an initial adverse
determination, and for judicial review of a final determination.
    (b) Amendment of record. Under 5 U.S.C. 552a(d)(2), an individual
who has been granted access to a record pertaining to such individual
may, after inspecting the record, request that the record be amended to
make any correction of any portion thereof which the individual believes
is not accurate, relevant, timely, or complete. An individual may seek
to amend a record in accordance with the rules provided in paragraph
(d)(3) of this section. See paragraph (b) of this section for
prohibition against amendment of tax records.
    (c) Form of request for amendment of record. (i) A request for
amendment of a record shall be in writing and shall be signed by the
individual making the request.
    (ii) Such request shall be clearly marked ``Request for amendment of
record.''
    (iii) Such request shall contain a statement that it is being made
under the provisions of the Privacy Act of 1974.
    (iv) Such request shall contain the name and address of the
individual making the request. In addition, if a particular system
employs an individual's social security number as an essential means of
accessing the system, the request must include the individual's social
security number. In the case of a record maintained in the name of two
or more individuals (e.g., husband and wife), the request shall contain
the names, addresses, and social security numbers (if necessary) of both
individuals.
    (v) Such request shall specify the name and location of the system
of records (as set forth in the Notice of Systems) in which such record
is maintained, and the title and business address of the official
designated in the access section for such system (as set forth in the
Notice of Systems).
    (vi) Such request shall specify the particular record in the system
which the individual is seeking to amend.
    (vii) Such request shall clearly state the specific changes which
the individual wishes to make in the record and a concise explanation of
the reasons for the changes. If the individual wishes to correct or add
any information, the request shall contain specific language making the
desired correction or addition.
    (d) Time and place for making request. A request to amend a record
under the Privacy Act shall be addressed to or delivered in person to
the office of the official designated in the access section for the
particular system of records. The title and office address of such
official is set forth for each system of records in the Notice of
Systems of Records. A request delivered to an office in person must be
delivered during the regular office hours of that office.
    (e) Processing a request for amendment of a record. (i) Within 10
days (not including Saturdays, Sundays, and legal public holidays) after
the receipt of a request to amend a record by the designated official,
the individual will be sent a written acknowledgement that will state
that the request has been received, that action is being taken

[[Page 70]]

thereon, and that the individual will be notified within 30 days (not
including Saturdays, Sundays, and legal public holidays) after the
receipt of the request whether the requested amendments will or will not
be made. If a request for amendment of a record omits any information
which is essential to processing the request, the request will not be
acted upon and the individual making the request will be promptly
advised on the additional information which must be submitted before the
request can be processed.
    (ii) Within 30 days (not including Saturdays, Sundays, and legal
public holidays) after the receipt of a request to amend a record by the
designated official, a determination will be made as to whether to grant
the request in whole or part. The individual will then be notified in
writing of the determination. If a determination cannot be made within
30 days, the individual will be notified in writing within such time of
the reasons for the delay and the approximate time required to make a
determination. If it is determined by the designated official that the
request will be granted, the requested changes will be made in the
record and the individual will be notified of the changes. In addition,
to the extent an accounting was maintained, all prior recipients of such
record will be notified of the changes. Upon request, an individual will
be furnished with a copy of the record, as amended, subject to the
payment of the appropriate fees. On the other hand, if it is determined
by the designated official that the request, or any portion thereof,
will not be granted, the individual will be notified in writing of the
adverse determination. The notification of an adverse determination will
set forth the reasons for refusal to amend the record. In addition, the
notification will contain a statement informing the individual of such
individual's right to request an independent review of the adverse
determination by a reviewing officer in the national office of the IRS
and the procedures for requesting such a review.
    (f) Administrative review of adverse determination. Under 5 U.S.C.
552a (d)(3), an individual who disagrees with the refusal of the agency
to amend a record may, within 35 days of being notified of the adverse
determination, request an independent review of such refusal by a
reviewing officer in the national office of the IRS. The reviewing
officer for the IRS is the Commission of Internal Revenue, the Deputy
Commissioner, or an Assistant Commissioner. In the case of an adverse
determination relating to a system of records maintained by the Office
of General Counsel for the IRS, the reviewing officer is the Chief
Counsel or his delegate. An individual seeking a review of an adverse
determination shall make a request for review in accordance with the
rules provided in paragraph (d)(7) of this section.
    (g) Form of request for review. (i) A request for review of an
adverse determination shall be in writing and shall be signed by the
individual making the request.
    (ii) Such request shall be clearly marked ``Request for review of
adverse determination''.
    (iii) Such request shall contain a statement that it is being made
under the provisions of the Privacy Act of 1974.
    (iv) Such request shall contain the name and address of the
individual making the request. In addition, if a particular system
employs an individual's social security number as an essential means of
accessing the system, the request must include the individual's social
security number. In the case of a record maintained in the name of two
or more individuals (e.g. husband and wife), the request shall contain
the names, addresses, and social security numbers (if necessary) of both
individuals.
    (v) Such request shall specify the particular record which the
individual is seeking to amend, the name and location of the system of
records (as set forth in the Notice of Systems) in which such record is
maintained, and the title and business address of the designated
official for such system (as set forth in the Notice of Systems).
    (vi) Such request shall include the date of the initial request for
amendment of the record, and the date of the letter notifying the
individual of the initial adverse determination with respect to such
request.
    (vii) such request shall clearly state the specific changes which
the individual wishes to make in the record and a concise explanation of
the reasons for the changes. If the individual wishes to correct or add
any information, the request shall contain specific language making the
desired correction or addition.
    (h) Time and place for making the request. A request for review of
an adverse determination under the Privacy Act shall be addressed to or
delivered in person to the Director, Office of Disclosure, Attention:
OP:EX:D Internal Revenue Service, 1111 Constitution Avenue, NW,
Washington, DC 20224. A request for review of an adverse determination
will be promptly referred by the Director, Office of Disclosure to the
appropriate reviewing officer for his review and final determination.
    (i) Processing a request for review of adverse determination. Within
30 days (not including Saturdays, Sundays, and legal public holidays)
after the receipt of a request for review of an adverse determination by
the appropriate reviewing officer, the reviewing officer will review the
initial adverse determination, make a final determination whether to
grant the request to amend the record in whole or in part, and notify
the individual in writing of the final determination. If a final
determination cannot be made within 30

[[Page 71]]

days, the Commissioner of Internal Revenue may extend such 30-day
period. The individual will be notified in writing within the 30 day
period of the cause for the delay and the approximate time required to
make a final determination. If it is determined by the reviewing officer
that the request to amend the record will be granted, the reviewing
officer will cause the requested changes to be made and the individual
will be so notified. Upon request, an individual will be furnished with
a copy of the record as amended subject to the payment of appropriate
fees. On the other hand, if it is determined by the reviewing officer
that the request to amend the record, or any portion thereof, will not
be granted, the individual will be notified in writing of the final
adverse determination. The notification of a final adverse determination
will set forth the reasons for the refusal of the reviewing officer to
amend the record. The notification shall include a statement informing
the individual of the right to submit a concise statement for insertion
in the record setting forth the reasons for the disagreement with the
refusal of the reviewing officer to amend the record. In addition, the
notification will contain a statement informing the individual of the
right to seek judicial review by a United States district court of a
final adverse determination.
    (j) Statement of disagreement. Under 5 U.S.C. 552a (d)(3), an
individual who disagrees with a final adverse determination not to amend
a record subject to amendment under the Privacy Act may submit a concise
statement for insertion in the record setting forth the reasons for
disagreement with the refusal of the reviewing officer to amend the
record. A statement of disagreement should be addressed to or delivered
in person to the Director, Office of Disclosure, Attention: OP:EX:D,
Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC
20224. The Director, Office of Disclosure will foward the statement of
disagreement to the appropriate designated official who will cause the
statement to be inserted in the individual's record. Any such statement
will be available to anyone to whom the record is subsequently disclosed
and the prior recipients of the record will be provided with a copy of
the statement of disagreement, to the extent an accounting of
disclosures was maintained.
    (k) Judicial review. If, after a review and final determination on a
request to amend a record by the appropriate reviewing officer, the
individual is notified that the request will not be granted, or if,
after the expiration of 30 days (not including Sundays, Saturdays, and
legal public holidays) from the receipt of such request by the Director,
Disclosure Operations Division, action is not taken thereon in
accordance with the requirements of paragraph (d)(9) of this section, an
individual may commence an action within the time prescribed by law in a
U.S. District Court pursuant to 5 U.S.C. 552a (g)(1). The statute
authorizes an action only against the agency. With respect to records
maintained by the IRS, the agency is the Internal Revenue Service, not
an officer or employee thereof. Service of process in such an action
shall be in accordance with the Federal Rules of Civil Procedure (28
U.S.C. App.) applicable to actions against an agency of the United
States. Where provided in such Rules, delivery of process upon the IRS
must be directed to the Commissioner of Internal Revenue, Attention:
CC:GLS, 1111 Constitution Avenue, NW, Washington, DC 20224. The district
court will determine the matter de novo.
    5. Records transferred to Federal Records Centers. Records
transferred to the Administrator of General Services for storage in a
Federal Records Center are not used by the Internal Revenue Service in
making any determination about any individual while stored at such
location and therefore are not subject to the provisions of 5 U.S.C.
552a (e)(5) during such time.



  Sec. Appendix C to Subpart C of Part 1--United States Customs Service

    1. In general. This appendix applies to the United States Customs
Service. It sets forth specific notification and access procedures with
respect to particular systems of records, identifies the officer
designated to make the initial determinations with respect to
notification and access to records and accountings of disclosures of
records. This appendix also sets forth the specific procedures for
requesting amendment of records and identifies the officers designated
to make the initial and appellate determinations with respect to
requests for amendment of records. It identifies the officers designated
to grant extensions of time on appeal, the officers with whom
``Statements of Disagreement may be filed, the officer designated to
receive service of process and the addresses for delivery of requests,
appeals, and service of process. In addition, it references the notice
of systems of records and notices of the routine uses of the information
in the system required by 5 U.S.C. 552a(e) (4) and (11) and published
annually by the Office of the Federal Register in ``Privacy Act
Issuances''.
    2. Requests for notification and access to records and accounting of
disclosures. (a) For records which are maintained at the United States
Customs Service Headquarters, initial requests for notification and
access to records and accountings of disclosures under 31 CFR 1.26,
should be mailed or personally delivered to the Director, Office of
Regulations & Rulings, U.S. Customs Service, 1301 Constitution Avenue
NW., Washington, DC 20229. The official who has authority over the

[[Page 72]]

maintenance of the file will have the authority to grant or deny the
request.
    (b) For records maintained at Regional Offices, initial requests for
notification and access to records and accountings of disclosures under
31 CFR 1.26, should be mailed or personally delivered to the Regional
Commissioner of Customs in whose region the records are located. This
official shall have the authority to grant the request or deny the
request. The appropriate location of the regional offices is specified
in Customs Appendix A in ``Privacy Act Issuances'' published annually by
the Office of the Federal Register.
    (c) Each request shall comply with the identification and other
requirements set forth in 31 CFR 1.26, and in the appropriate system
notice in the ``Privacy Act Issuances'' published annually by the Office
of the Federal Register. Each request should be conspicuously labeled on
the face of the envelope ``Privacy Act Request''.
    3. Request for amendment of records. (a) For records which are
maintained at Customs Service Headquarters, initial requests for
amendment of records under 31 CFR 1.27 (a) through (d) should be mailed
or personally delivered to the Director, Office of Regulations &
Rulings, U.S. Customs Service, 1301 Constitution Avenue NW., Washington,
DC 20229. The official who has authority over the maintenance of the
file will have the authority to grant or deny the request.
    (b) For records not maintained at Customs Service Headquarters,
initial requests for amendment of records under 31 CFR 1.27 (a) through
(d) should be mailed or personally delivered to the Regional
Commissioner of Customs in whose region the records are located. This
official shall have the authority to grant or deny the request. A
request directed to a Regional Commissioner should be mailed to or
personally delivered at the appropriate location specified in Customs
Appendix A in ``Privacy Act Issuances'' published annually by the Office
of the Federal Register.
    (c) Each request shall comply with the identification and other
requirements set forth in 31 CFR 1.27, and in the appropriate system
notice in ``Privacy Act Issuance published by the Office of the Federal
Register. Each request should be conspicuously labeled on the face of
the envelope ``Privacy Act Amendment Request''.
    4. Administrative appeal of initial determination refusing to amend
records. Appellate determinations (including extensions of time on
appeal under 31 CFR 1.27 (e) with respect to all Customs Service records
will be made by the Director, Office of Regulations & Rulings or the
delegate of such official. All such appeals should be mailed or
personally delivered to the United States Customs Service, Office of
Regulations & Rulings, 1301 Constitution Avenue NW., Washington, DC
20229. Each appeal should be conspicuously labeled on the face of the
envelope ``Privacy Act Amendment Appeal''.
    5. Statements of disagreement. ``Statements of Disagreement''
pursuant to 31 CFR 1.27 (e)(4)(i) shall be filed with the official
signing the notification of refusal to amend at the address indicated in
the letter of notification within 35 days of the date of such
notification and should be limited to one page.
    6. Service of process. Service of process will be received by the
Chief Counsel, United States Customs Service, 1301 Constitution Avenue
NW., Washington, DC 20229.
    7. Annual notice of systems of records. The annual notice of the
United States Customs Service systems of records required to be
published by the Office of the Federal Register, as specified in 5
U.S.C. 552a(f), is included in the publication entitled ``Privacy Act
Issuances''.
    8. Verification of identity. Each request shall comply with the
identification and other requirements set forth in 31 CFR 1.26 and in
the appropriate system notice published by the Office of the Federal
Register. Each request should be conspicuously labeled on the face of
the envelope ``Privacy Act Request''.



  Sec. Appendix D to Subpart C of Part 1--United States Secret Service

    1. In general. This appendix applies to the United States Secret
Service. It sets forth specific notification and access procedures with
respect to particular systems of records including identification
requirements, and time and places where records may be reviewed;
identifies the officers designated to make the initial determinations
with respect to notification and access to records and accountings of
disclosures of records. This appendix also sets forth the specific
procedures for requesting amendment of records and identifies the
officers designated to make the initial and appellate determinations
with respect to requests for amendment of records. It identifies the
officers designated to grant extensions of time on appeal, the officers
with whom ``Statements of Disagreement may be filed, the officer
designated to receive service of process and the addresses for delivery
of requests, appeals, and service of process. In addition, it references
the notice of systems of records and notices of the routine uses of the
information in the system required by 5 U.S.C. 552a(e) (4) and (11) and
published annually by the Office of the Federal Register in ``Privacy
Act Issuances''.
    2. Requests for notification and access to records and accountings
of disclosures. Initial determinations under 31 CFR 1.26, whether to
grant requests for notification and access to records and accountings of
disclosures for the United States Secret Service, will be made by the
Freedom of Information and Privacy Act Officer, United States Secret

[[Page 73]]

Service. Requests for notification should be made by mail or delivered
personally between the hours of 9:00 a.m. and 5:30 of any day excluding
Saturdays, Sundays, and legal holidays to: Privacy Act Request, Freedom
of Information and Privacy Act Officer, United States Secret Service,
Suite 3000, 950 H Street, NW., Washington, DC 20373-5802.
    a. Identification requirements. In addition to the requirements
specified in 31 CFR 1.26, each request for notification, access or
amendment of records made by mail shall contain the requesting
individual's date and place of birth and a duly notarized statement
signed by the requester asserting his or her identity and stipulating
that the requesting individual understands that knowingly or willfully
seeking or obtaining access to records about another person under false
pretences is punishable by a fine of up to $5,000.
    b. Individuals making requests in person. Individuals making
requests in person will be required to exhibit acceptable identifying
documents such as employee identification numbers, drivers licenses,
medical cards or other documents sufficient to verify the identity of
the requester.
    c. Physical inspection of records. Upon determining that a request
for the physical inspection of records is to be granted, the requester
shall be notified in writing of the determination, and when and where
the requested records may be inspected. The inspection of records will
be conducted at the Secret Service field office or other facility
located nearest to the residence of the individual making the request.
Such inspection shall be conducted during the regular business hours of
the Secret Service Field Office or other facility where the disclosure
is made. A person of his or her own choosing may accompany the
individual making the request provided the individual furnishes a
written statement authorizing the disclosure of that individual's record
in the accompanying person's presence. Any disclosure of a record will
be made in the presence of a representative of the United States Secret
Service.
    3. Requests for amendment of records. Initial determination under 31
CFR part 1, whether to grant requests to amend records will be made by
the Freedom of Information and Privacy Act Officer. Requests should be
mailed or delivered personally between the hours of 9:00 a.m. and 5:30
p.m. to: Privacy Act Amendment Request, Freedom of Information and
Privacy Acts Officer, United States Secret Service, Suite 3000, 950 H
Street, NW., Washington, DC 20373-5802.
    4. Administrative appeal of initial determinations refusing
amendment of records. Appellate determinations, including extensions of
time on appeal, with respect to records of the United States Secret
Service will be made by the Deputy Director, United States Secret
Service. Appeals may be mailed or delivered personally to: Privacy Act
Amendment Appeal, Deputy Director, United States Secret Service, 950 H
Street, NW., Suite 8300, Washington, DC 20373-5802.
    5. Statements of disagreement. ``Statements of Disagreements'' under
31 CFR 1.27 (e)(4)(i) shall be filed with the official signing of the
notification of refusal to amend at the address indicated in the letter
of notification within 35 days of the date of such notification and
should be limited to one page.
    6. Service of process. Service of process will be received by the
United States Secret Service General Counsel and shall be delivered to
the following location: General Counsel, United States Secret Service,
Suite 8300, 950 H Street, NW., Washington, DC 20373-5802.
    7. Annual notice of systems of records. The annual notice of systems
of records is published by the Office of the Federal Register, as
specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy Act
Issuances''. Any specific requirements for access, including
identification requirements, in addition to the requirements set forth
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent
system.

[52 FR 26305, July 14, 1987, as amended at 66 FR 9959, Feb. 13, 2001]



  Sec. Appendix E to Subpart C of Part 1--Alcohol and Tobacco Tax and
                              Trade Bureau

    1. In general. This appendix applies to the Alcohol and Tobacco Tax
and Trade Bureau. It sets forth specific notification and access
procedures with respect to particular systems of records, identifies the
officers designated to make the initial determinations with respect to
notification and access to records and accountings of disclosures of
records. This appendix also sets forth the specific procedures for
requesting amendment of records and identifies the officers designated
to make the initial and appellate determinations with respect to
requests for amendment of records. It identifies the officers designated
to grant extensions of time on appeal, the officers with whom
``Statements of Disagreement'' may be filed, the officer designated to
receive service of process and the addresses for delivery of requests,
appeals, and service of process. In addition, it references the notice
of systems of records and notices of the routine uses of the information
in the system required by 5 U.S.C. 552a(3), (4) and (11) and published
annually by the Office of the Federal Register in ``Privacy Act
Issuances''.
    2. Requests for notification and access to records and accountings
of disclosures. Initial determination under 31 CFR 1.26, whether to
grant requests for notification and access to records and accountings of
disclosures for

[[Page 74]]

the Alcohol and Tobacco Tax and Trade Bureau, will be made by the
Director, Regulations and Rulings Division, or the delegate of such
officer. Requests may be mailed or delivered in person to:
    Privacy Act Request, Director, Regulations and Rulings Division,
Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street, NW., Box 12,
Washington, DC 20005. Requests may also be faxed to 202-453-2331.
    3. Requests for amendment of record. Initial determinations under 31
CFR 1.27 (a) through (d) with respect to requests to amend records
maintained by the Alcohol and Tobacco Tax and Trade Bureau will be made
by the Director, Regulations and Rulings Division. Requests for
amendment of records may be mailed or delivered in person to:
    Privacy Act Request, Director, Regulations and Rulings Division,
Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., Box 12,
Washington, DC 20005. Requests may also be faxed to 202-453-2331. The
Bureau will process a faxed request when the request meets the identity
verification requirements outlined in paragraph 4(a) of this Appendix.
    4. Verification of identity. (a) In addition to the requirements
specified in 31 CFR 1.26(d) of this appendix, each request for
notification, access or amendment of records made by mail or fax shall
contain the requesting individual's date and place of birth and a
statement signed by the requester asserting his or her identity and
stipulating that the requester understands that knowingly or willfully
seeking or obtaining access to records about another person under false
pretenses is a misdemeanor and punishable by a fine of up to $5,000
provided, that the Alcohol and Tobacco Tax and Trade Bureau may require
a signed notarized statement verifying the identity of the requester.
    (b) Individuals making requests in person will be required to
exhibit at least two acceptable identifying documents such as employee
identification cards, driver's license, medical cards, or other
documents sufficient to verify the identity of the requester.
    (c) The parent or guardian of a minor or a person judicially
determined to be incompetent, shall in addition to establishing the
identity of the minor or other person he represents as required in (a)
and (b), establish his own parentage or guardianship by furnishing a
copy of a birth certificate showing parentage (or other satisfactory
documentation) or a court order establishing the guardianship.
    5. Request for physical inspection of records. Upon determining that
a request for the physical inspection of records is to be granted, the
requester shall be notified in writing of the determination, and when
and where the records may be inspected. The inspection of records will
be made at the Alcohol and Tobacco Tax and Trade Bureau Field Office or
other facility located nearest to the residence of the individual making
the request. Such inspection shall be conducted during the regular
business hours of the field office or other facility where the
disclosure is made. A person of the requester's own choosing may
accompany the requester provided the requester furnishes a written
statement authorizing the disclosure of the requester's record in the
accompanying person's presence. The record inspection will be made in
the presence of a representative of the Bureau. Following the inspection
of the record, the individual will acknowledge in writing the fact that
he or she had an opportunity to inspect the requested record.
    6. Requests for copies of records without prior physical inspection.
Upon determining that an individual's request for copies of his or her
records without prior physical inspection is to be granted, the
requester shall be notified in writing of the determination, and the
location and time for his or her receipt of the requested copies. The
copies will be made available at the Alcohol and Tobacco Tax and Trade
Bureau field office or other facility located nearest to the residence
of the individual making the request, unless the individual requests
that the documents be sent by mail. Copies shall be received by the
requester during the regular business hours of the field office or other
facility where the disclosure is made. Transfer of the copies to the
individual shall be conditioned upon payment of copying costs and his
presentation of at least two acceptable identifying documents such as
employee identification cards, driver's license, medical cards, or other
documents sufficient to verify the identity of the requester. Following
the receipt of the copies in person, the individual will acknowledge
receipt in writing.
    7. Administrative appeal of initial determination refusing to amend
record. Appellate determinations under 31 CFR 1.27(e) with respect to
records of the Alcohol and Tobacco Tax and Trade Bureau, including
extensions of time on appeal, will be made by the Administrator or the
delegate of such officer. Appeals should be addressed to, or delivered
in person to:
    Privacy Act Amendment Appeal, Administrator, Alcohol and Tobacco Tax
and Trade Bureau, 1310 G Street, NW., Box 12, Washington, DC 20005.
    8. Statements of disagreement. ``Statements of Disagreement'' as
described in 31 CFR 1.27(e)(4) shall be filed with the official signing
the notification within 35 days of the date of such notification and
should be limited to one page.
    9. Service of process. Service of process will be received by the
Administrator of the Alcohol and Tobacco Tax and Trade Bureau or the
delegate of such official and shall be delivered to the following
location:
    Administrator, Alcohol and Tobacco Tax and Trade Bureau, 1310 G
Street, NW., Box

[[Page 75]]

12, Washington, DC 20005, Attention: Chief Counsel.
    10. Annual notice of systems of records. The annual notice of
systems of records is published by the Office of the Federal Register,
as specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy
Act Issuances''. Any specific requirements for access, including
identification requirements, in addition to the requirements set forth
in 31 CFR 1.26 and 1.27 are indicated in the notice for each pertinent
system.

[76 FR 62298, Oct. 7, 2011]



Sec. Appendix F to Subpart C of Part 1--Bureau of Engraving and Printing

    1. In general. This appendix applies to the Bureau of Engraving and
Printing. It sets forth specific notification and access procedures with
respect to particular systems of records including identification
requirements, identifies the officers designated to make the initial
determinations with respect to notification and access to records and
accountings of disclosures of records. This appendix also sets forth the
specific procedures for requesting amendment of records and identifies
the officers designated to make the initial and appellate determinations
with respect to requests for amendment of records. It identifies the
officers designated to grant extensions of time on appeal, the officers
with whom ``Statements of Disagreement may be filed, the officer
designated to receive service of process and the addresses for delivery
of requests, appeals, and service of process. In addition, it references
the notice of systems of records and notices of the routine uses of the
information in the system required by 5 U.S.C. 552a (e) (4) and (11) and
published annually by the Office of the Federal Register in ``Privacy
Act Issuances.''
    2. Requests for notification and access to records and accountings
of disclosures. Initial determinations under 31 CFR 1.26, whether to
grant requests for notification and access to records and accountings of
disclosures for the Bureau of Engraving and Printing, will be made by
the head of the organizational unit having immediate custody of the
records requested, or the delegate of such official. Requests for access
to records contained within a particular system of records should be
submitted to the address indicated for that system in the access section
of the notices published by the Office of the Federal Register in
``Privacy Act Issuances.'' Requests for information and specific
guidance should be addressed to: Privacy Act Request, Disclosure Officer
(Executive Assistant to the Director), Room 104-18M, Bureau of Engraving
and Printing, Washington, DC 20228.
    3. Requests for amendment of records. Initial determination under 31
CFR 1.27 (a) through (d), whether to grant request to amend records will
be made by the head of the organizational unit having immediate custody
of the records or the delegate of such official. Requests for amendment
should be addressed as indicated in the appropriate system notice in
``Privacy Act Issuances'' published by the Office of the Federal
Register. Requests for information and specific guidance on where to
send requests for amendment should be addressed to: Privacy Act
Amendment Request, Disclosure Officer (Executive Assistant to the
Director), Bureau of Engraving and Printing, Room 104-18M, Washington,
DC 20228.
    4. Administrative appeal of initial determinations refusing
amendment of records. Appellate determinations refusing amendment of
records under 31 CFR 1.27(e) including extensions of time on appeal,
with respect to records of the Bureau of Engraving and Printing will be
made by the Director of the Bureau or the delegate of such officer.
Appeals made by mail should be addressed to, or delivered personally to:
Privacy Act Amendment Appeal, Disclosure Officer (Executive Assistant to
the Director), Room 104-18M, Bureau of Engraving and Printing,
Washington, DC 20228.
    5. Statements of disagreement. ``Statements of Disagreement'' under
31 CFR 1.27(e)(4)(8) shall be filed with the official signing the
notification of refusal to amend at the address indicated in the letter
of notification within 35 days of the date of such notification and
should be limited to one page.
    6. Service of process. Service of process will be received by the
Chief Counsel of the Bureau of Engraving and Printing and shall be
delivered to the following location: Chief Counsel, Bureau of Engraving
and Printing, Room 109-M, 14th and C Streets, SW., Washington, DC 20228.
    7. Verification of identity. An individual seeking notification or
access to records, or seeking to amend a record, or seeking an
accounting of disclosures, must satisfy one of the following
identification requirements before action will be taken by the Bureau of
Engraving and Printing on any such request:
    (i) An individual appearing in person may establish identity by the
presentation of a single document bearing a photograph (such as a
passport or identification badge) or by the presentation of two items of
identification which do not bear a photograph, but do bear both a name
and signature (such as a credit card).
    (ii) An individual may establish identity through the mail by a
signature, address, and one other identifier such as a photocopy of a
driver's license or other document bearing the individual's signature.
    (iii) Notwithstanding subdivisions (i) and (ii) of this
subparagraph, an individual who

[[Page 76]]

so desires, may establish identity by providing a notarized statement,
swearing or affirming to such individual's identity and to the fact that
the individual understands the penalties provided in 5 U.S.C. 552a(1)(3)
for requesting or obtaining access to records under false pretenses.
    Notwithstanding subdivision (i), (ii), or (iii) of this
subparagraph, the Executive Assistant or other designated official may
require additional proof of an individual's identity before action will
be taken on any request if such official determines that it is necessary
to protect against unauthorized disclosure of information in a
particular case. In addition, a parent of any minor or a legal guardian
of any individual will be required to provide adequate proof of legal
relationship before such person may act on behalf of such minor or such
individual.
    8. Annual notice of systems of records. The annual notice of systems
of records is published by the Office of the Federal Register, as
specified in 5 U.S.C. 522a(f). The publication is entitled ``Privacy Act
Issuances''. Any specific requirements for access, including
identification requirements, in addition to the requirements set forth
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent
system.



  Sec. Appendix G to Subpart C of Part 1--Financial Management Service

    1. In general. This appendix applies to the Financial Management
Service. It sets forth specific notification and access procedures with
respect to particular systems of records, identifies the officers
designated to make the initial determinations with respect to
notification and access to records and accountings of disclosures of
records. This appendix also sets forth the specific procedures for
requesting amendment of records and identifies the officers designated
to make the initial and appellate determinations with respect to
requests for amendment of records. It identifies the officers designated
to grant extensions of time on appeal, the officers with whom
``Statements of Disagreement'' may be filed, the officer designated to
receive service of process and the addresses for delivery of requests,
appeals, and service of process. In addition, it references the notice
of systems of records and notices of the routine uses of the information
in the system required by 5 U.S.C. 552a(e) (4) and (11) and published
annually by the Office of the Federal Register in ``Privacy Act
Issuances''.
    2. Requests for notification and access to records and accountings
of disclosures. Initial determinations under 31 CFR 1.26, whether to
grant requests for notification and access to records and accountings of
disclosures for the Financial Management Service, will be made by the
head of the organizational unit having immediate custody of the records
requested or an official designated by this official. This is indicated
in the appropriate system notice in ``Privacy Act Issuances'' published
annually by the Office of the Federal Register. Requests for information
and specific guidance on where to send requests for records may be
mailed or delivered personally to: Privacy Act Request, Disclosure
Officer, Financial Management Service, Room 108, Treasury Department
Annex No. 1, Pennsylvania Avenue and Madison Place, NW., Washington, DC
20226.
    3. Requests for amendment of records. Initial determination under 31
CFR 1.27(a) through (d), whether to grant requests to amend records will
be made by the head of the organzational unit having immediate custody
of the records or the delegate of such official. Requests for amendment
should be addressed as indicated in the appropriate system notice in
``Privacy Act Issuances'' published by the Office of the Federal
Register. Requests for information and specific guidance on where to
send requests for amendment should be addressed to: Privacy Act
Amendment Request, Disclosure Officer, Financial Management Service,
Department of the Treasury, Treasury Annex No. 1, Washington, DC 20226.
    4. Administrative appeal of initial determinations refusing
amendment of records. Appellate determinations refusing amendment of
records under 31 CFR 1.27(e) incuding extensions of time on appeal, with
respect to records of the Financial Management Service will be made by
the Commissioner or the delegate of such official. Appeals made by mail
should be addressed to, or delivered personally to: Privacy Act
Amendment Appeal Commissioner, Financial Management Service (Privacy),
Department of the Treasury, Room 618, Treasury Annex No. 1, Pennsylvania
Avenue and Madison Place, NW., Washington, DC 20226.
    5. Statements of disagreement. ``Statements of Disagreement'' under
31 CFR 1.27(e)(4)(i) shall be filed with the official signing the
notification of refusal to amend at the address indicated in the letter
of notification within 35 days of the date of such notification and
should be limited to one page.
    6. Service of process. Service of process will be received by the
Commissioner, Financial Management Service or the delegate of such
official and shall be delivered to the following location: Commissioner,
Financial Management Service (Privacy), Department of the Treasury, Room
618, Treasury Annex No. 1, Pennsylvania Avenue and Madison Place, NW,
Washington, DC 20226.
    7. Annual notice of systems of records. The annual notice of systems
of records is published by the Office of the Federal Register, as
specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy Act
Issuances''. Any specific requirements for access, including
identification requirements, in addition

[[Page 77]]

to the requirements set forth in 31 CFR 1.26 and 1.27 are indicated in
the notice for the pertinent system.



       Sec. Appendix H to Subpart C of Part 1--United States Mint

    1. In general. This appendix applies to the United States Mint. It
sets forth specific notification and access procedures with respect to
particluar systems of records, identifies the officers designated to
make the initial determinations with respect to notification and access
to records and accountings of disclosures of records. This appendix also
sets forth the specific procedures for requesting amendment of records
and identifies the officers designated to make the initial and appellate
determinations with respect to requests for amendment of records. It
identifies the officers designated to grant extensions of time on
appeal, the officers with whom ``Statements of Disagreement'' may be
filed, the officer designated to receive service of process and the
addresses for delivery of requests, appeals, and service of process. In
addition, it references the notice of systems of records and notices of
the routine uses of the information in the system required by 5 U.S.C.
552a(e) (4) and (11) and published annually by the Office of the Federal
Register in ``Privacy Act Issuances''.
    2. Requests for notification and access to records and accountings
of disclosures. Initial determinations under 31 CFR 1.26, whether to
grant requests for notification and access to records and accountings of
disclosures for the United States Mint will be made by the head of the
organizational unit having immediate custody of the records requested or
an official designated by this official. This is indicated in the
appropriate system notice in ``Privacy Act Issuances'' published
annually by the Office of the Federal Register. Requests should be
directed to the Superintendent or Officer in charge of the facility in
which the records are located or to the Chief, Administrative Programs
Division. Requests for information and specific guidance on where to
send requests for records may be mailed or delivered personally to:
Privacy Act Request, Chief, Administrative Programs Division, United
States Mint, Judiciary Square Building, 633 3rd Street, N.W, Washington,
DC 20220.
    3. Requests for amendment of records. Initial determination under 31
CFR 1.27 (a) through (d), whether to grant requests to amend records
will be made by the head of the Mint installation having immediate
custody of the records or the delegated official. Requests should be
mailed or delivered personally to: Privacy Act Amendment Request,
Freedom of Information and Privacy Acts Officer, United States Mint,
Judiciary Square Building, 633 3rd Street, Washington, DC 20220.
    4. Administrative appeal of initial determinations refusing
amendment of records. Appellate determinations refusing amendment of
records under 31 CFR 1.27 including extensions of time on appeal, with
respect to records of the United States Mint will be made by the
Director of the Mint or the delegate of the Director. Appeals made by
mail should be addressed to, or delivered personally to: Privacy Act
Amendment Appeal, United States Mint, Judiciary Square Building, 633 3rd
Street, NW, Washington, DC 20220.
    5. Statements of disagreement. ``Statements of Disagreement'' under
31 CFR 1.27 (e)(4)(i) shall be filed with the official signing the
notification of refusal to amend at the address indicated in the letter
of notification within 35 days of the date of such notification and
should be limited to one page.
    6. Service of process. Service of process will be received by the
Director of the Mint and shall be delivered to the following location:
Director of the Mint, Judiciary Square Building, 633 3rd street, NW.,
Washington, DC 20220.
    7. Annual notice of systems of records. The annual notice of systems
of records is published by the Office of the Federal Register, as
specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy Act
Issuances''. Any specific requirements for access, including
identification requirements, in addition to the requirements set forth
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent
system.



    Sec. Appendix I to Subpart C of Part 1--Bureau of the Public Debt

    1. In general. This appendix applies to the Bureau of the Public
Debt. It sets forth specific notification and access procedures with
respect to particular systems of records, identifies the officers
designated to make the initial determinations with respect to
notification and access to records and accountings of disclosures of
records. This appendix also sets forth the specific procedures for
requesting amendment of records and identifies the officers designated
to make the initial and appellate determinations with respect to
requests for amendment of records. It identifies the officer designated
to grant extension of time on appeal, the officers with whom
``Statements of Disagreement'' may be filed, the officer designated to
receive service of process and the addresses for delivery of requests,
appeals, and service of process. In addition, it references the notice
of systems of records and notices of the routine uses of the information
in the system required by 5 U.S.C. 552a(e) (4) and (11) and published
annually by the Office of the Federal Register in ``Privacy Act
Issuances''.
    2. Requests for notification and access to records and accountings
of disclosures. Initial

[[Page 78]]

determinations under 31 CFR 1.26, whether to grant requests for
notification and access to records and accountings of disclosures for
the Bureau of Public Debt, will be made by the head of the
organizational unit having immediate custody of the records requested or
an official designated by this official. This is indicated in the
appropriate system notice in ``Privacy Act Issuances'' published
annually by the Office of the Federal Register. Requests for information
and specific guidance on where to send requests for records may be
mailed or delivered personally to: Privacy Act Request, Disclosure
Officer, Administrative Resource Center, Bureau of the Public Debt,
Department of the Treasury, 200 Third Street, Room 211, Parkersburg, WV
26101-5312.
    3. Requests for amendment of records. Initial determination under 31
CFR 1.27 (a) through (d), whether to grant requests to amend records
will be made by the head of the organizational unit having immediate
custody of the records or the delegate of such official. Requests for
amendment should be addressed as indicated in the appropriate system
notice in ``Privacy Act Issuances'' published by the Office of the
Federal Register. Requests for information and specific guidance on
where to send requests for amendment should be addressed to: Privacy Act
Amendment Request, Disclosure Officer, Administrative Resource Center,
Bureau of the Public Debt, Department of the Treasury, 200 Third Street,
Room 211, Parkersburg, WV 26101-5312.
    4. Administrative appeal of initial determinations refusing
amendment of records. Appellate determinations refusing amendment of
records under 31 CFR 1.27(e) including extensions of time on appeal,
with respect to records of the Bureau of the Public Debt will be made by
the Executive Director, Administrative Resource Center, Bureau of the
Public Debt or the delegate of such officer. Appeals made by mail should
be addressed to, or delivered personally to: Privacy Act Amendment
Appeal, Chief Counsel, Bureau of the Public Debt, Department of the
Treasury, Executive Director, Administrative Resource Center, Bureau of
the Public Debt.
    5. Statements of disagreement. ``Statements of Disagreement'' under
31 CFR 1.27 (e)(4)(i) shall be filed with the official signing the
notification of refusal to amend at the address indicated in the letter
of notification within 35 days of the date of such notification and
should be limited to one page.
    6. Service of process. Service of process will be received by the
Chief Counsel of the Bureau of the Public Debt and shall be delivered to
the following location: Chief Counsel, Bureau of the Public Debt,
Department of the Treasury, 200 Third Street, Room G-15, Parkersburg, WV
26106-1328.
    7. Annual notice of systems of records. The annual notice of systems
of records is published by the Office of the Federal Register, as
specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy Act
Issuances''. Any specific requirements for access, including
identification requirements, in addition to the requirements set forth
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent
system.



Sec. Appendix J to Subpart C of Part 1--Office of the Comptroller of the
                                Currency

    1. In general. This appendix applies to the Office of the
Comptroller of the Currency. It sets forth specific notification and
access procedures with respect to particular systems of records,
identifies the officers designated to make the initial determinations
with respect to notification and access to records and accountings of
disclosures of records. This appendix also sets forth the specific
procedures for requesting amendment of records and identifies the
officers designated to make the intial and appellate determinations with
respect to requests for amendment of records. It identifies the officers
designated to grant extensions of time on appeal, the officers with whom
``Statements of Disagreement'' may be filed, the officer designated to
receive service of process and the addresses for delivery of requests,
appeals, and service of process. In addition, it references the notice
of systems of records and notices of the routine uses of the information
in the system required by 5 U.S.C. 552a(e) (4) and (11) and published
annually by the Office of the Federal Register in ``Privacy Act
Issuances''.
    2. Requests for notification and access to records and accountings
of disclosures. Initial determinations under 31 CFR 1.26 whether to
grant requests for notification and access to records and accountings of
disclosures for the Office of the Comptroller of the Currency will be
made by the head of the organizational unit having immediate custody of
the records requested or the delegate of that official. This is
indicated in the appropriate system notice in ``Privacy Act Issuances''
published biennially by the Office of the Federal Register. Requests for
information and specific guidance on where to send requests for records
shall be mailed or delivered personally to: Disclosure Officer,
Communications Division, Office of the Comptroller of the Currency, 250
E Street, SW, Washington, DC 20219.
    3. Requests for amendment of records. Initial determinations under
31 CFR 1.27 (a) through (d) whether to grant requests to amend records
will be made by the Comptroller's delegate or the head of the
organizational unit having immediate custody of the records or the
delegate of that official. Requests for amendment shall be mailed or
delivered personally to: Disclosure Officer,

[[Page 79]]

Communications Division, Office of the Comptroller of the Currency, 250
E Street, SW., Washington, DC 20219.
    4. Administrative appeal of initial determinations refusing
amendment of records. Appellate determinations refusing amendment of
records under 31 CFR 1.27(e) including extensions of time on appeal,
with respect to records of the Office of the Comptroller of the Currency
will be made by the Comptroller of the Currency or the Comptroller's
delegate. Appeals shall be mailed or delivered personally to: Disclosure
Officer, Communications Division, Office of the Comptroller of the
Currency, 250 E Street, SW., Washington, DC 20219.
    5. Statements of disagreement. ``Statements of Disagreement'' under
31 CFR 1.27(e)(4)(i) shall be filed with the OCC's Director of
Communications at the address indicated in the letter of notification
within 35 days of the date of such notification and should be limited to
one page.
    6. Service of process. Service of process shall be delivered to the
Chief Counsel or the Chief Counsel's delegate at the following location:
Office of the Comptroller of the Currency, 250 E Street, SW.,
Washington, DC 20219.
    7. Annual notice of systems of records. The annual notice of systems
of records is published by the Office of the Federal Register, as
specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy Act
Issuances''. Any specific requirements for access, including
identification requirements, in addition to the requirements set forth
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent
system.

[52 FR 26305, July 14, 1987, as amended at 60 FR 57333, Nov. 15, 1995;
67 FR 34402, May 14, 2002]



Sec. Appendix K to Subpart C of Part 1--Federal Law Enforcement Training
                                 Center

    1. In general. This appendix applies to the Federal Law Enforcement
Training Center. It sets forth specific notification and access
procedures with respect to particular systems of records, identifies the
officers designated to make the initial determinations with respect to
notification and access to records and accountings of disclosure of
records. This appendix also sets forth the specific procedures for
requesting amendment of records and identifies the officers designated
to make the initial and appellate determinations with respect to
requests for amendment of records. It identifies the officers designated
to grant extensions of time on appeal, the officers with whom
``Statements of Disagreement'' may be filed, the officer designated to
receive service of process and the addresses for delivery of requests,
appeals, and service of process. In addition, it references the notice
of systems of records and notices of the routine uses of the information
in the system required by 5 U.S.C. 552a(e) (4) and (11) and published
annually by the Office of the Federal Register, in ``Privacy Act
Issuances''.
    2. Requests for notification and access to records and accounting of
disclosures. Initial determinations under 31 CFR 1.26, whether to grant
requests for notification and acess to records and accounting of
disclosures for the Federal Law Enforcement Training Center, will be
made by the head of the organizational unit having immediate custody of
the records requested or an official designated by this official. This
is indicated in the appropriate system notice in ``Privacy Act
Issuances'' published annually by the Office of the Federal Register.
Requests for information and specific guidance on where to send requests
for records may be mailed or delivered personally to: Privacy Act
Request, Library Building 262, Federal Law Enforcement Training Center,
Glynco, Georgia 31524.
    3. Requests for amendment of records. Initial determinations under
31 CFR 1.27 (a) through (d), whether to grant requests to amend records
will be made by the head of the organizational unit having immediate
custody of the records or the delegate of such official. Requests for
amendment should be addressed as indicated in the appropriate system
notice in ``Privacy Act Issuances'' published by the Office of the
Federal Register. Requests for information and specific guidance on
where to send requests for amendment should be addressed to: Privacy Act
Amendment Request, Federal Law Enforcement Training Center, Glynco,
Georgia 31524.
    4. Administrative appeal of initial determinations refusing
amendment of records. Appellate determinations refusing amendment of
records under 31 CFR 1.27(e) including extensions of time on appeal,
with respect to records of the Federal Law Enforcement Training Center
will be made by the Assistant Secretary (Enforcement), Department of the
Treasury or the delegate of such officer. Appeals made by mail should be
addressed to, or delivered personally to: Privacy Act Amendment Appeal,
FLETC, Assistant Secretary (Enforcement), Department of the Treasury,
1500 Pennsylvania Avenue, NW., Room 4312, Washington, DC 20220.
    5. Statements of disagreement. ``Statements of Disagreement'' under
31 CFR 1.27(e)(4)(i) shall be filed with the official signing the
notification of refusal to amend at the address indicated in the letter
of notification within 35 days of the date of such notification and
should be limited to one page.
    6. Service of process. Service of process will be received by the
General Counsel of the Department of the Treasury or the delegate of

[[Page 80]]

such official and shall be delivered to the following location: General
Counsel, Department of the Treasury, Room 3000, Main Treasury Building,
1500 Pennsylvania Avenue, NW., Washington, DC 20220.
    7. Annual notice of systems of records. The annual notice of systems
of records is published by the Office of the Federal Register, as
specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy Act
Issuances''. Any specific requirements for access, including
identification requirements, in addition to the requirements set forth
in 31 CFR 1.26 and 1.27 are indicated in the notice for the pertinent
system.

[52 FR 26305, July 14, 1987. Redesignated at 65 FR 2334, Jan. 14, 2000]



  Sec. Appendix L to Subpart C of Part 1--Office of Thrift Supervision

    1. In general. This appendix applies to the Office of Thrift
Supervision. It sets forth specific notification and access procedures
with respect to particular systems of records, and identifies the
officers designated to make the initial determinations with respect to
notification and access to records, the officers designated to make the
initial and appellate determinations with respect to requests for
amendment of records, the officers designated to grant extensions of
time on appeal, the officers with whom ``Statement of Disagreement'' may
be filed, the officer designated to receive services of process and the
addresses for delivery of requests, appeals, and service of process. In
addition, it references the notice of systems of records and notices of
the routine uses of the information in the system required by 5 U.S.C.
552a(e) (4) and (11) and published biennially by the Office of the
Federal Register in ``Privacy Act Issuances.''
    2. Requests for notification and access to records and accounting of
disclosures. Initial determinations under 31 CFR 1.26, whether to grant
requests for notification and access to records and accountings of
disclosures for the Office of Thrift Supervision, will be made by the
head of the organizational unit having immediate custody of the records
requested, or the delegate of such official. This information is
contained in the appropriate system notice in the ``Privacy Act
Issuances,'' published biennially by the Office of the Federal Register.
Requests for information and specific guidance on where to send requests
for records should be addressed to: Privacy Act Request, Chief,
Disclosure Branch, Information Services Division, Office of Thrift
Supervision, 1700 G Street, NW., Washington, DC 20552.
    Requests may be delivered in person to: Office of Thrift
Supervision, Information Services Division, 1700 G Street, NW.,
Washington, DC.
    3. Requests for amendments of records. Initial determinations under
31 CFR 1.27 (a) through (d) with respect to requests to amend records
maintained by the Office of Thrift Supervision will be made by the head
of the organization or unit having immediate custody of the records or
the delegates of such official. Requests for amendment of records should
be addressed as indicated in the appropriate system notice in ``Privacy
Act Issuances'' published by the Office of the Federal Register.
Requests for information and specific guidance on where to send these
requests should be addressed to: Privacy Act Amendment Request, Chief,
Disclosure Branch, Information Services Division, Office of Thrift
Supervision, 1700 G Street, NW., Washington, DC 20552.
    Privacy Act Amendment Requests may be delivered in person to: Office
of Thrift Supervision, Information Services Division, 1700 G Street,
NW., Washington, DC.
    4. Administrative appeal of initial determination refusing to amend
record. Appellate determination under 31 CFR 1.27(e) with respect to
records of the Office of Thrift Supervision, including extensions of
time on appeal, will be made by the Director, Public Affairs, Office of
Thrift Supervision, or the delegate of such official, as limited by 5
U.S.C. 552a(d) (2) and (3). Appeals made by mail should be addressed as
indicated in the letter of initial decision or to: Privacy Act Amendment
Request, Chief, Disclosure Branch, Information Services Division, Office
of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.
    Appeals may be delivered in person to: Office of Thrift Supervision,
Information Services Division, 1700 G Street, NW., Washington, DC.
    5. Statements of Disagreement. ``Statements of Disagreement'' as
described in 31 CFR 1.27(e)(4) shall be filed with the official signing
the notification of refusal to amend at the address indicated in the
letter of notification within 35 days of the date of notification and
should be limited to one page.
    6. Service of process. Service of process will be received by the
Corporate Secretary of the Office of Thrift Supervision or the delegate
of such official and shall be delivered to the following location:
Corporate Secretary, Office of Thrift Supervision, 1700 G Street, NW.,
Washington, DC 20552.
    7. Annual notice of systems of record. The annual notice of systems
of records required to be published by the Office of the Federal
Register is included in the publication entitled ``Privacy Act
Issuances,'' as specified in 5 U.S.C. 552a(f). Any specific requirements
for access, including identification requirements, in addition to the
requirements set forth in 31 CFR 1.26 and 1.27 and (8) below, and
locations for access are indicated in the notice for the pertinent
system.

[[Page 81]]

    8. Verification of identity. An individual seeking notification or
access to records, or seeking to amend a record, must satisfy one of the
following identification requirements before action will be taken by the
Office of Thrift Supervision on any such request:
    (i) An individual seeking notification or access to records in
person, or seeking to amend a record in person, may establish identity
by the presentation of a single official document bearing a photograph
(such as a passport or identification badge) or by the presentation of
two items of identification which do not bear a photograph but do bear
both a name and signature (such as a driver's license or credit card).
    (ii) An individual seeking notification or access to records by
mail, or seeking to amend a record by mail, may establish identity by a
signature, address, and one other identifier such as a photocopy of a
driver's license or other official document bearing the individual's
signature.
    (iii) Notwithstanding subdivisions (i) and (ii) of this
subparagraph, an individual seeking notification or access to records by
mail or in person, or seeking to amend a record by mail or in person,
who so desires, may establish identity by providing a notarized
statement, swearing or affirming to such individual's identity and to
the fact that the individual understands the penalties provided in 5
U.S.C. 552a(i)(3) for requesting or obtaining access to records under
false pretenses. Alternatively, an individual may provide a statement
that the individual understands the penalties provided in 5 U.S.C.
552a(i)(3) for requesting or obtaining access to records under false
pretenses which is subscribed by the individual as true and correct
under penalty of perjury pursuant to 28 U.S.C. 1746. Notwithstanding
subdivision (i), (ii), or (iii) of this subparagraph, a designated
official may require additional proof of an individual's identity before
action will be taken on any request, if such official determines that it
is necessary to protect against unauthorized disclosure of information
in a particular case. In addition, a parent of any minor or a legal
guardian of any individual will be required to provide adequate proof of
legal relationship before such person may act on behalf of such minor or
such individual.

[60 FR 31633, June 16, 1995. Redesignated at 65 FR 2334, Jan. 14, 2000]



            Sec. Appendix M to Subpart C of Part 1 [Reserved]



  Sec. Appendix N to Subpart C of Part 1--Financial Crimes Enforcement
                                 Network

    1. In general. This appendix applies to the Financial Crimes
Enforcement Network (FinCEN). It sets forth specific notification and
access procedures with respect to particular systems of records, and
identifies the officers designated to make the initial determinations
with respect to notification and access to records and accountings of
disclosures of records. This appendix also sets forth the specific
procedures for requesting amendment of records and identifies the
officers designated to make the initial and appellate determinations
with respect to requests for amendment of records. It identifies the
officers designated to grant extensions of time on appeal, the officers
with whom ``Statements of Disagreement'' may be filed, the officer
designated to receive service of process and the addresses for delivery
of requests, appeals, and service of process. In addition, it references
the notice of systems of records and notices of the routine uses of the
information in the system required by 5 U.S.C. 552a(4) and (11) and
published biennially by the Office of the Federal Register in ``Privacy
Act Issuances.''
    2. Requests for notification and access to records and accountings
of disclosures. Initial determinations under 31 CFR 1.26, whether to
grant requests for notification and access to records and accountings of
disclosures for FinCEN will be made by the Freedom of Information/
Privacy Act officer, FinCEN. Requests may be mailed to: Privacy Act
Request, Financial Crimes Enforcement Network, Post Office Box 39,
Vienna, VA 22183.
    3. Requests for amendments of records. Initial determinations under
31 CFR 1.27(a) through (d) whether to grant requests to amend records
maintained by FinCEN will be made by the Freedom of Information/Privacy
Act officer, FinCEN. Requests may be mailed to: Privacy Act Request,
Financial Crimes Enforcement Network, Post Office Box 39, Vienna, VA
22183.
    4. Verification of Identity. An individual seeking notification or
access to records, or seeking to amend a record, or seeking an
accounting of disclosures, must satisfy one of the following
identification requirements before action will be taken by FinCEN on any
such request:
    (i) An individual may establish identity through the mail by a
signature, address, and one other identifier such as a photocopy of a
driver's license or other official document bearing the individual's
signature.
    (ii) Notwithstanding this paragraph (4)(i), an individual may
establish identity by providing a notarized statement, swearing or
affirming to such individual's identity and to the fact that the
individual understands the penalties provided in 5 U.S.C. 552a(i)(3) for
requesting or obtaining access to records under false pretenses.
    (iii) Notwithstanding this paragraph (4)(i) and (ii), the Freedom of
Information Act/Privacy Act Officer or other designated official may
require additional proof of an individual's identity before action will
be taken on

[[Page 82]]

any request, if such official determines that it is necessary to protect
against unauthorized disclosure of information in a particular case. In
addition, a parent of any minor or a legal guardian of any individual
will be required to provide adequate proof of legal relationship before
such person may act on behalf of such minor or such individual.
    5. Administrative appeal of initial determinations refusing
amendment of records. Appellate determinations refusing amendment of
records under 31 CFR 1.27(e) including extensions of time on appeal with
respect to the records of FinCEN will be made by the Director of FinCEN
or the delegate of the Director. Appeals should be addressed to: Privacy
Act Amendment Appeal, Financial Crimes Enforcement Network, Post Office
Box 39, Vienna, VA 22183.
    6. Statements of Disagreement. ``Statements of Disagreement'' as
described in 31 CFR 1.27(e)(4) shall be filed with the official signing
the notification of refusal to amend at the address indicated in the
letter of notification within 35 days of the date of such notification
and should be limited to one page.
    7. Service of Process. Service of process will be received by the
Chief Counsel of FinCEN and shall be delivered to the following
location: Office of Chief Counsel, Financial Crimes Enforcement Network,
Post Office Box 39, Vienna, VA 22183.
    8. Biennial notice of systems of records. The biennial notice of
systems of records is published by the Office of the Federal Register,
as specified in 5 U.S.C. 552a(f). The publication is entitled ``Privacy
Act Issuances.'' Any specific requirements for access, including
identification requirements, in addition to the requirements set forth
in 31 CFR 1.26 and 1.27 and paragraph 4 of this appendix are indicated
in the notice for the pertinent system.

[68 FR 55311, Sept. 25, 2003]



PART 2_NATIONAL SECURITY INFORMATION--Table of Contents



Sec.
2.1 Processing of mandatory declassification review requests.
2.2 Access to classified information by historical researchers, former
          Treasury Presidential and Vice Presidential appointees, and
          former Presidents and Vice Presidents.

    Authority: 31 U.S.C. 321, E.O. 12958, 60 FR 19825, E.O. 13292, 68 FR
15315.

    Source: 72 FR 63104, Nov. 8, 2007, unless otherwise noted.



Sec. 2.1  Processing of mandatory declassification review requests.

    (a) Except as provided by section 3.4(b) of Executive Order 13292,
Further Amendment to Executive Order 12958, as amended, Classified
National Security Information, all information classified by the
Department of the Treasury under these Orders or any predecessor
Executive Order shall be subject to mandatory declassification review by
the Department, if:
    (1) The request for a mandatory declassification review describes
the document or material containing the information with sufficient
specificity to enable Treasury personnel to locate it with a reasonable
amount of effort;
    (2) The information is not exempt from search and review under
sections 105C, 105D, or 701 of the National Security Act of 1947 (50
U.S.C. 431, 432 and 432a); and
    (3) The information has not been reviewed for declassification
within the past 2 years or the information is not the subject of pending
litigation.
    (b) Requests for classified records originated by the Department of
the Treasury shall be directed to the Office of Security Programs,
Attention: Assistant Director (Information Security), 1500 Pennsylvania
Avenue, NW., Washington, DC 20220. Upon receipt of each request for
mandatory declassification review, pursuant to section 3.5 of Executive
Order 13292, the following procedures will apply:
    (1) The Office of Security Programs will acknowledge receipt of the
request.
    (2)(i) A mandatory declassification review request need not identify
the requested information by date or title of the responsive records,
but must be of sufficient specificity to allow Treasury personnel to
locate records containing the information sought with a reasonable
amount of effort. Whenever a request does not reasonably describe the
information sought, the requester will be notified by the Office of
Security Programs that unless additional information is provided or the
scope of the request is narrowed, no further action will be undertaken
with respect to the request.
    (ii) If Treasury has reviewed the information within the past 2
years and

[[Page 83]]

determined that all or part thereof remains classified, or the
information is the subject of pending litigation, the requester shall be
so informed and advised of the requester's appeal rights.
    (3) The Office of Security Programs will determine the appropriate
Treasury offices or bureaus to conduct the mandatory declassification
review. The Office of Security Programs will also advise Treasury and/or
bureau reviewing officials concerning the mandatory declassification
review process. Classified information relating to intelligence
activities (including special activities), intelligence sources or
methods, or cryptology will also be coordinated with the Office of the
Assistant Secretary (Intelligence and Analysis). As appropriate, the
Office of Security Programs will refer requests to other Federal
departments and agencies having a direct interest in the requested
documents.
    (4)(i) Treasury personnel undertaking a mandatory declassification
review shall make reasonable efforts to determine if particular
information may be declassified. Reviewing officials may rely on
applicable exemption criteria under the Freedom of Information Act, the
Privacy Act, and any other applicable law that authorizes the
withholding of information. Reviewing officials shall also identify the
amount of search and review time required to process each request.
Barring extenuating circumstances, mandatory declassification reviews
for reasonably small volumes of records should be completed in a timely
fashion. A final determination regarding large volumes of records should
ordinarily be made within one year of Treasury's receipt of any
mandatory declassification review request.
    (ii) If the Director, Office of Security Programs determines that a
Treasury office or bureau responsible for conducting a mandatory
declassification review is not making reasonable efforts to review
classified information subject to a mandatory declassification request,
the Director may authorize Treasury-and/or bureau-originated information
to be declassified in consultation with the Department's Senior Agency
Official.
    (iii) If information cannot be declassified in its entirety,
reasonable efforts, consistent with applicable law, will be made to
release those declassified portions of the requested information that
constitute a coherent segment. Upon the denial or partial denial of a
declassification request, the requester will be so informed by the
Office of Security Programs and advised of the requester's appeal
rights.
    (5)(i) If Treasury receives a mandatory declassification review
request for information in its possession that were originated by
another Federal department or agency, the Office of Security Programs
will forward the request to that department or agency for a
declassification determination, together with a copy of the requested
records, a recommendation concerning a declassification determination,
and a request to be advised of that department's or agency's
declassification determination. The Office of Security Programs may,
after consultation with the originating department or agency, inform any
requester of the referral unless such association is itself classified
under Executive Order 13292 or prior orders.
    (ii) Mandatory declassification review requests concerning
classified information originated by a Treasury office or bureau that
has been transferred to another Federal department or agency will be
forwarded to the appropriate successor department or agency for a
declassification determination.
    (6) If another Federal department or agency forwards a mandatory
declassification review request to Treasury for information in its
custody that was classified by Treasury, the Office of Security Programs
will:
    (i) Advise the referring department or agency as to whether it may
notify the requester of the referral; and
    (ii) Respond to the Federal department, agency, or requester, as
applicable, in accordance with the requirements of this section.
    (7)(i) Upon the denial, in whole or in part, of a request for the
mandatory declassification review of information, the Office of Security
Programs will so notify the requester in writing and will

[[Page 84]]

inform the requester of the right to appeal the classification
determination within 60 calendar days of the receipt of the
classification determination. The notice will also advise the requester
of the name and address of the Treasury official who will be responsible
for deciding an appeal (the Deciding Official). The Office of Security
Programs will coordinate appeals with the appropriate Treasury offices
and bureaus.
    (ii) The Deciding Official should make a determination on an appeal
within 30 working days following the receipt of the appeal, or within 60
working days following receipt if the Deciding Official determines that
additional time is required to make a determination and so notifies the
requester. The Deciding Official should notify the requester in writing
of Treasury's determination on appeal and, if applicable, the reasons
for any whole or partial denial of the appeal. The Office of Security
Programs will also notify the requester of their right of a final appeal
to the Interagency Security Classification Appeals Panel, as
appropriate, under 32 CFR 2001.33.
    (8)(i) Treasury may charge fees for search, review, and duplicating
costs in connection with a mandatory declassification review request.
    (A) The fee for services of Treasury personnel involved in locating
and/or reviewing records will be charged at the rate of a GS-11, Step 1
employee, in the Washington-Baltimore Federal pay area, in effect when
the mandatory declassification review request is received by the Office
of Security Programs for searches that take more than two hours or for
review times that are greater than two hours. Fees may be waived, in
writing, by a bureau head or the equivalent Treasury official at the
Assistant Secretary level.
    (B) There is no fee for duplicating the first 100 pages of fully or
partially releasable documents. The cost of additional pages is 20 cents
per page. No charges shall be levied for search and/or review time
requiring less than 2 hours.
    (ii) If it is estimated that the fees associated with a mandatory
declassification review will exceed $100, the Office of Security
Programs will notify the requester in writing of the estimated costs and
shall obtain satisfactory written assurance of full payment or require
the requester to make an advance payment of the entire estimated fee
before proceeding to process the request. Treasury may request pre-
payment where the fee is likely to exceed $500. After 60 calendar days
without receiving the requester's written assurance of full payment or
agreement to make pre-payment of estimated fees (or to amend the
mandatory declassification review request in a manner as to result in
fees acceptable to the requester), Treasury may administratively
terminate the mandatory declassification review request. Failure of a
requester to pay fees after billing will result in future requests not
being honored. Nothing in this paragraph will preclude Treasury from
taking any other lawful action to recover payment for costs incurred in
processing a mandatory declassification review request.
    (iii) Payment of fees shall be made by check or money order to the
Treasurer of the United States. Fees charged by Treasury for mandatory
declassification review are separate and distinct from any other fees
that may be imposed by a Presidential Library, the National Archives and
Records Administration, or another Federal department or agency.



Sec. 2.2  Access to classified information by historical researchers,
former Treasury Presidential and Vice Presidential appointees, and

former Presidents and Vice Presidents.

    (a) Access to classified information may be granted only to
individuals who have a need-to-know the information. This requirement
may be waived, however, for individuals who:
    (1) Are engaged in historical research projects;
    (2) Previously occupied a position in the Treasury to which they
were appointed by the President under 3 U.S.C. 105(a)(2)(A), or the Vice
President under 3 U.S.C. 106(a)(1)(A); or
    (3) Served as President or Vice President.
    (b) Access to classified information may be granted to individuals
described in paragraph (a) of this section upon:

[[Page 85]]

    (1) A written determination by Treasury's Senior Agency Official,
under Section 5.4(d) of Executive Order 13292, that access is consistent
with the interest of the national security; and
    (2) Receipt of the individual's written agreement to safeguard
classified information, including taking all appropriate steps to
protect classified information from unauthorized disclosure or
compromise. This written agreement must also include the individual's
consent to have any and all notes (including those prepared or stored in
electronic media, whether written or oral) reviewed by authorized
Treasury personnel to ensure that no classified information is contained
therein and, if so, that the classified information is not published.
    (c)(i)(A) A historical researcher is not authorized to have access
to foreign government information or information classified by another
Federal department or agency.
    (B) A former Treasury Presidential or Vice Presidential appointee is
only authorized access to classified information that the former
official originated, reviewed, signed or received while serving as such
an appointee.
    (C) A former President or Vice President is only authorized access
to classified information that was prepared by Treasury while that
individual was serving as President or Vice President.
    (ii) Granting access to classified information pursuant to this
section does not constitute the granting of a security clearance for
access to classified information.
    (d) Treasury personnel will coordinate access to classified
information by individuals described in paragraph (a) of this section
with the Director, Office of Security Programs, who will ensure that the
written agreement described in paragraph (b)(2) of this section is
signed as a condition of being granted access to classified information.
    (e) Any review of classified information by an individual described
in paragraph (a) of this section shall take place in a location
designated by the Director, Office of Security Programs. Such persons
must be accompanied at all times by appropriately authorized Treasury
personnel authorized to have access to the classified information being
reviewed. All notes (including those prepared or stored in electronic
media, whether written or oral) made by an individual described in
paragraph (a) of this section shall remain in the custody of the Office
of Security Programs pending a determination by appropriately cleared
subject matter experts that no classified information is contained
therein.
    (f) An individual described in paragraph (a) of this section is
subject to search, as are all packages or carrying cases prior to
entering or leaving Treasury. Access to Treasury-originated classified
information at another Federal department or agency, as may be
authorized by the Director, Office of Security Programs shall be
governed by security protocols in effect at the other Federal department
or agency.
    (g) Treasury personnel must perform a physical verification and an
accounting of all classified information each time such information is
viewed by an individual described in paragraph (a) of this section.
Physical verification and an accounting of all classified information
shall be made both prior to and after viewing. Any discrepancy must be
immediately reported to the Director, Office of Security Programs.
    (h) An individual described in paragraph (a) of this section may be
charged reasonable fees for services rendered by Treasury in connection
with the review of classified information under this section. To the
extent such services involve searching, reviewing, and copying material,
the provisions of Sec. 2.1(b)(8) shall apply.



PART 3_CLAIMS REGULATIONS AND INDEMNIFICATION OF DEPARTMENT OF
TREASURY EMPLOYEES--Table of Contents



           Subpart A_Claims Under the Federal Tort Claims Act

Sec.
3.1 Scope of regulations.
3.2 Filing of claims.
3.3 Legal review.
3.4 Approval of claims not in excess of $25,000.
3.5 Limitations on authority to approve claims.
3.6 Final denial of a claim.

[[Page 86]]

3.7 Action on approved claims.
3.8 Statute of limitations.

               Subpart B_Claims Under the Small Claims Act

3.20 General.
3.21 Action by claimant.
3.22 Legal review.
3.23 Approval of claims.
3.24 Statute of limitations.

      Subpart C_Indemnification of Department of Treasury Employees

3.30 Policy.

    Authority: 28 U.S.C. 2672; 28 CFR part 14; 5 U.S.C. 301.

    Source: 35 FR 6429, Apr. 22, 1970, unless otherwise noted.



           Subpart A_Claims Under the Federal Tort Claims Act



Sec. 3.1  Scope of regulations.

    (a) The regulations in this part shall apply to claims asserted
under the Federal Tort Claims Act, as amended, 28 U.S.C. 2672, accruing
on or after January 18, 1967, for money damages against the United
States for injury to or loss of property or personal injury or death
caused by the negligent or wrongful act or omission of an employee of
the Department while acting within the scope of his office or
employment, under circumstances where the United States if a private
person, would be liable to the claimant for such damage, loss, injury,
or death, in accordance with the law of the place where the act or
omission occurred. The regulations in this subpart do not apply to any
tort claims excluded from the Federal Tort Claims Act, as amended, under
28 U.S.C. 2680.
    (b) Unless specifically modified by the regulations in this part,
procedures and requirements for filing and handling claims under the
Federal Tort Claims Act shall be in accordance with the regulations
issued by the Department of Justice, at 28 CFR part 14, as amended.



Sec. 3.2  Filing of claims.

    (a) When presented. A claim shall be deemed to have been presented
upon the receipt from a claimant, his duly authorized agent or legal
representative of an executed Standard Form 95 or other written
notification of an incident, accompanied by a claim for money damages in
a sum certain for injury to or loss of property, or personal injury, or
death alleged to have occurred by reason of the incident.
    (b) Place of filing claim. Claims shall be submitted directly or
through the local field headquarters to the head of the bureau or office
of the Department out of whose activities the incident occurred, if
known; or if not known, to the General Counsel, Treasury Department,
Washington, DC 20220.
    (c) Contents of claim. The evidence and information to be submitted
with the claim shall conform to the requirements of 28 CFR 14.4.



Sec. 3.3  Legal review.

    Any claim that exceeds $500, involves personal injuries or
automobile damage, or arises out of an incident that is likely to result
in multiple claimants, shall be forwarded to the legal division of the
bureau or office out of whose activities the claim arose. The claim,
together with the reports of the employee and the investigation, shall
be reviewed in the legal division which shall thereupon make a
recommendation that the claim be approved, disapproved, or compromised,
and shall advise on the need for referral of the claim to the Department
of Justice. This recommendation and advice, together with the file,
shall be forwarded to the head of the bureau or office or his designee.

[35 FR 6429, Apr. 22, 1970, as amended at 48 FR 16253, Apr. 15, 1983]



Sec. 3.4  Approval of claims not in excess of $25,000.

    (a) Claims not exceeding $25,000 and not otherwise requiring
consultation with the Department of Justice pursuant to 28 CFR 14.6(b)
shall be approved, disapproved, or compromised by the head of the bureau
or office or his designee, taking into consideration the recommendation
of the legal division.



Sec. 3.5  Limitations on authority to approve claims.

    (a) All proposed awards, compromises or settlements in excess of
$25,000 require the prior written approval of the Attorney General.

[[Page 87]]

    (b) All claims which fall within the provisions of 28 CFR 14.6(b)
require referral to and consultation with the Department of Justice.
    (c) Any claim which falls within paragraph (a) or (b) of this
section shall be reviewed by the General Counsel. If the claim, award,
compromise, or settlement receives the approval of the General Counsel
and the head of the bureau or office or his designee, a letter shall be
prepared for the signature of the General Counsel transmitting to the
Assistant Attorney General, Civil Division, Department of Justice, the
case for approval or consultation as required by 28 CFR 14.6. Such
letter shall conform with the requirements set forth in 28 CFR 14.7.



Sec. 3.6  Final denial of a claim.

    The final denial of an administrative claim shall conform with the
requirements of 28 CFR 14.9 and shall be signed by the head of the
bureau or office, or his designee.



Sec. 3.7  Action on approved claims.

    (a) Any award, compromise, or settlement in an amount of $2,500 or
less shall be processed for payment from the appropriations of the
bureau or office out of whose activity the claim arose.
    (b) Payment of an award, compromise, or settlement in excess of
$2,500 and not more than $100,000 shall be obtained by the bureau or
office by forwarding Standard Form 1145 to the Claims Division, General
Accounting Office.
    (c) Payment of an award, compromise, or settlement in excess of
$100,000 shall be obtained by the bureau by forwarding Standard Form
1145 to the Bureau of Government Financial Operations, Department of the
Treasury, which will be responsible for transmitting the award,
compromise, or settlement to the Bureau of the Budget for inclusion in a
deficiency appropriation bill.
    (d) When an award is in excess of $25,000, Standard Form 1145 must
be accompanied by evidence that the award, compromise, or settlement has
been approved by the Attorney General or his designee.
    (e) When the use of Standard Form 1145 is required, it shall be
executed by the claimant. When a claimant is represented by an attorney,
the voucher for payment shall designate both the claimant and his
attorney as payees; the check shall be delivered to the attorney, whose
address shall appear on the voucher.
    (f) Acceptance by the claimant, his agent, or legal representative,
of any award, compromise or settlement made pursuant to the provisions
of section 2672 or 2677 of title 28, United States Code, shall be final
and conclusive on the claimant, his agent or legal representative and
any other person on whose behalf or for whose benefit the claim has been
presented, and shall constitute a complete release of any claim against
the United States and against any employee of the Government whose act
or omission gave rise to the claim, by reason of the same subject
matter.

[35 FR 6429, Apr. 22, 1970, as amended at 39 FR 19470, June 3, 1974]



Sec. 3.8  Statute of limitations.

    Claims under this subpart must be presented in writing to the
Department within 2 years after the claim accrued.



               Subpart B_Claims Under the Small Claims Act



Sec. 3.20  General.

    The Act of December 28, 1922, 42 Stat. 1066, the Small Claims Act,
authorized the head of each department and establishment to consider,
ascertain, adjust, and determine claims of $1,000 or less for damage to,
or loss of, privately owned property caused by the negligence of any
officer or employee of the Government acting within the scope of his
employment. The Federal Tort Claims Act superseded the Small Claims Act
with respect to claims that are allowable under the former act.
Therefore, claims that are not allowable under the Federal Tort Claims
Act, for example, claims arising abroad, may be allowable under the
Small Claims Act.

[[Page 88]]



Sec. 3.21  Action by claimant.

    Procedures and requirements for filing claims under this section
shall be the same as required for filing claims under the Federal Tort
Claims Act as set forth in Subpart A of this part.



Sec. 3.22  Legal review.

    Claims filed under this subpart shall be forwarded to the legal
division of the bureau or office out of whose activities the claim
arose. The claim, together with the reports of the employee and the
investigation, shall be reviewed in the legal division which shall
thereupon make a recommendation that the claim be approved, disapproved
or compromised.



Sec. 3.23  Approval of claims.

    Claims shall be approved, disapproved, or compromised by the head of
the bureau or office or his designee, taking into consideration the
recommendation of the legal division.



Sec. 3.24  Statute of limitations.

    No claim will be considered under this subpart unless filed within 1
year from the date of the accrual of said claim.



      Subpart C_Indemnification of Department of Treasury Employees

    Source: 56 FR 42938, Aug. 30, 1991, unless otherwise noted.



Sec. 3.30  Policy.

    (a) The Department of the Treasury may indemnify, in whole or in
part, a Department employee (which for purposes of this regulation shall
include a former employee) for any verdict, judgment or other monetary
award rendered against such employee, provided the Secretary or his or
her designee determines that (1) the conduct giving rise to such
verdict, judgment or award was within the scope of his or her employment
and (2) such indemnification is in the interest of the Department of the
Treasury.
    (b) The Department of the Treasury may pay for the settlement or
compromise of a claim against a Department employee at any time,
provided the Secretary or his or her designee determines that (1) the
alleged conduct giving rise to the claim was within the scope of the
employee's employment and (2) such settlement or compromise is in the
interest of the Department of the Treasury.
    (c) Absent exceptional circumstances, as determined by the Secretary
or his or her designee, the Department will not entertain a request to
indemnify or to pay for settlement of a claim before entry of an adverse
judgment, verdict or other determination.
    (d) When a Department employee becomes aware that he or she has been
named as a party in a proceeding in his or her individual capacity as a
result of conduct within the scope of his or her employment, the
employee should immediately notify his or her supervisor that such an
action is pending. The supervisor shall promptly thereafter notify the
chief legal officer of the employee's employing component. The employee
shall immediately apprise the chief legal officer of his or her
employing component of any offer to settle the proceeding.
    (e) A Department employee may request indemnification to satisfy a
verdict, judgment or monetary award entered against the employee or to
compromise a claim pending against the employee. The employee shall
submit a written request, with appropriate documentation including a
copy of the verdict, judgment, award or other order or settlement
proposal, in a timely manner to the Secretary or his or her designee for
decision.
    (f) Any payment under this section either to indemnify a Department
employee or to settle a claim shall be contingent upon the availability
of appropriated funds for the payment of salaries and expenses of the
employing component.



PART 4_EMPLOYEES' PERSONAL PROPERTY CLAIMS--Table of Contents



    Authority: 31 U.S.C. 3721(j).

    Source: 62 FR 18518, Apr. 16, 1997, unless otherwise noted.

[[Page 89]]



Sec. 4.1  Procedures.

    The procedures for filing a claim with the Treasury Department for
personal property that is lost or damaged incident to service are
contained in Treasury Directive 32-13, ``Claims for Loss or Damage to
Personal Property,'' and Treasury Department Publication 32-13,
``Policies and Procedures For Employees' Claim for Loss or Damage to
Personal Property Incident to Service.''



PART 5_TREASURY DEBT COLLECTION--Table of Contents



                      Subpart A_General Provisions

Sec.
5.1 What definitions apply to the regulations in this part?
5.2 Why is the Treasury Department issuing these regulations and what do
          they cover?
5.3 Do these regulations adopt the Federal Claims Collection Standards
          (FCCS)?

             Subpart B_Procedures To Collect Treasury Debts

5.4 What notice will Treasury entities send to a debtor when collecting
          a Treasury debt?
5.5 How will Treasury entities add interest, penalty charges, and
          administrative costs to a Treasury debt?
5.6 When will Treasury entities allow a debtor to pay a Treasury debt in
          installments instead of one lump sum?
5.7 When will Treasury entities compromise a Treasury debt?
5.8 When will Treasury entities suspend or terminate debt collection on
          a Treasury debt?
5.9 When will Treasury entities transfer a Treasury debt to the Treasury
          Department's Financial Management Service for collection?
5.10 How will Treasury entities use administrative offset (offset of
          non-tax Federal payments) to collect a Treasury debt?
5.11 How will Treasury entities use tax refund offset to collect a
          Treasury debt?
5.12 How will Treasury entities offset a Federal employee's salary to
          collect a Treasury debt?
5.13 How will Treasury entities use administrative wage garnishment to
          collect a Treasury debt from a debtor's wages?
5.14 How will Treasury entities report Treasury debts to credit bureaus?
5.15 How will Treasury entities refer Treasury debts to private
          collection agencies?
5.16 When will Treasury entities refer Treasury debts to the Department
          of Justice?
5.17 Will a debtor who owes a Treasury debt be ineligible for Federal
          loan assistance or Federal licenses, permits or privileges?
5.18 How does a debtor request a special review based on a change in
          circumstances such as catastrophic illness, divorce, death, or
          disability?
5.19 Will Treasury entities issue a refund if money is erroneously
          collected on a debt?

   Subpart C_Procedures for Offset of Treasury Department Payments To
              Collect Debts Owed to Other Federal Agencies

5.20 How do other Federal agencies use the offset process to collect
          debts from payments issued by a Treasury entity?
5.21 What does a Treasury entity do upon receipt of a request to offset
          the salary of a Treasury entity employee to collect a debt
          owed by the employee to another Federal agency?

Appendix A to Part 5--Treasury Directive 34-01--Waiving Claims Against
          Treasury Employees for Erroneous Payments

    Authority: 5 U.S.C. 5514; 26 U.S.C. 6402; 31 U.S.C. 321, 3701, 3711,
3716, 3717, 3718, 3720A, 3720B, 3720D.

    Source: 67 FR 65845, Oct. 28, 2002, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 5.1  What definitions apply to the regulations in this part?

    As used in this part:
    Administrative offset or offset means withholding funds payable by
the United States (including funds payable by the United States on
behalf of a State Government) to, or held by the United States for, a
person to satisfy a debt owed by the person. The term ``administrative
offset'' includes, but is not limited to, the offset of Federal salary,
vendor, retirement, and Social Security benefit payments. The terms
``centralized administrative offset'' and ``centralized offset'' refer
to the process by which the Treasury Department's Financial Management
Service offsets Federal payments through the Treasury Offset Program.
    Administrative wage garnishment means the process by which a Federal
agency orders a non-Federal employer

[[Page 90]]

to withhold amounts from a debtor's wages to satisfy a debt, as
authorized by 31 U.S.C. 3720D, 31 CFR 285.11, and this part.
    Agency or Federal agency means a department, agency, court, court
administrative office, or instrumentality in the executive, judicial, or
legislative branch of the Federal Government, including government
corporations.
    Creditor agency means any Federal agency that is owed a debt.
    Debt means any amount of money, funds or property that has been
determined by an appropriate official of the Federal Government to be
owed to the United States by a person. As used in this part, the term
``debt'' does not include debts arising under the Internal Revenue Code
of 1986 (26 U.S.C. 1 et seq.).
    Debtor means a person who owes a debt to the United States.
    Delinquent debt means a debt that has not been paid by the date
specified in the agency's initial written demand for payment or
applicable agreement or instrument (including a post-delinquency payment
agreement) unless other satisfactory payment arrangements have been
made.
    Delinquent Treasury debt means a delinquent debt owed to a Treasury
entity.
    Disposable pay has the same meaning as that term is defined in 5 CFR
550.1103.
    Employee or Federal employee means a current employee of the
Treasury Department or other Federal agency, including a current member
of the Armed Forces, Reserve of the Armed Forces of the United States,
or the National Guard.
    FCCS means the Federal Claims Collection Standards, which were
jointly published by the Departments of the Treasury and Justice and
codified at 31 CFR parts 900-904.
    Financial Management Service means the Financial Management Service,
a bureau of the Treasury Department, which is responsible for the
centralized collection of delinquent debts through the offset of Federal
payments and other means.
    Payment agency or Federal payment agency means any Federal agency
that transmits payment requests in the form of certified payment
vouchers, or other similar forms, to a disbursing official for
disbursement. The ``payment agency'' may be the agency that employs the
debtor. In some cases, the Treasury Department may be both the creditor
agency and payment agency.
    Person means an individual, corporation, partnership, association,
organization, State or local government, or any other type of entity
other than a Federal agency.
    Salary offset means a type of administrative offset to collect a
debt owed by a Federal employee from the current pay account of the
employee.
    Secretary means the Secretary of the Treasury.
    Tax refund offset is defined in 31 CFR 285.2(a).
    Treasury debt means a debt owed to a Treasury entity by a person.
    Treasury Department means the United States Department of the
Treasury.
    Treasury entity means the Office of Inspector General, the Office of
Inspector General for Tax Administration, or a bureau of the Treasury
Department, including the Departmental Offices, responsible for the
collection of the applicable Treasury debt. Departmental Offices
include, but are not limited to, the Office of D.C. Pensions, the
Community Development Financial Institution Fund, the Executive Office
of Asset Forfeiture, and the Office of Foreign Assets Control. Other
bureaus include, but are not limited to, the Bureau of Public Debt;
Bureau of Engraving and Printing; U.S. Mint; U.S. Secret Service;
Customs Service; Financial Management Service; Internal Revenue Service;
Bureau of Alcohol, Tobacco, and Firearms; Office of Comptroller of the
Currency; the Office of Thrift Supervision; Federal Law Enforcement
Training Center; and the Financial Crimes Enforcement Network.



Sec. 5.2  Why is the Treasury Department issuing these regulations and
what do they cover?

    (a) Scope. This part provides procedures for the collection of
Treasury debts. This part also provides procedures for collection of
other debts owed to the United States when a request for

[[Page 91]]

offset of a Treasury payment is received by the Treasury Department from
another agency (for example, when a Treasury Department employee owes a
debt to the United States Department of Education).
    (b) Applicability. (1) This part applies to the Treasury Department
when collecting a Treasury debt, to persons who owe Treasury debts, and
to Federal agencies requesting offset of a payment issued by the
Treasury Department as a payment agency (including salary payments to
Treasury Department employees).
    (2) This part does not apply to tax debts nor to any debt for which
there is an indication of fraud or misrepresentation, as described in
Sec. 900.3 of the FCCS, unless the debt is returned by the Department
of Justice to the Treasury Department for handling.
    (3) This part does not apply to the Financial Management Service
when acting on behalf of other Federal agencies and states to collect
delinquent debt referred to the Financial Management Service for
collection action as required or authorized by Federal law. See 31 CFR
part 285.
    (4) Nothing in this part precludes collection or disposition of any
debt under statutes and regulations other than those described in this
part. See, for example, 5 U.S.C. 5705, Advancements and Deductions,
which authorizes Treasury entities to recover travel advances by offset
of up to 100% of a Federal employee's accrued pay. See, also, 5 U.S.C.
4108, governing the collection of training expenses. To the extent that
the provisions of laws, other regulations, and Treasury Department
enforcement policies differ from the provisions of this part, those
provisions of law, other regulations, and Treasury Department
enforcement policies apply to the remission or mitigation of fines,
penalties, and forfeitures, and debts arising under the tariff laws of
the United States, rather than the provisions of this part.
    (c) Additional policies and procedures. Treasury entities may, but
are not required to, promulgate additional policies and procedures
consistent with this part, the FCCS, and other applicable Federal law,
policies, and procedures.
    (d) Duplication not required. Nothing in this part requires a
Treasury entity to duplicate notices or administrative proceedings
required by contract, this part, or other laws or regulations.
    (e) Use of multiple collection remedies allowed. Treasury entities
and other Federal agencies may simultaneously use multiple collection
remedies to collect a debt, except as prohibited by law. This part is
intended to promote aggressive debt collection, using for each debt all
available collection remedies. These remedies are not listed in any
prescribed order to provide Treasury entities with flexibility in
determining which remedies will be most efficient in collecting the
particular debt.



Sec. 5.3  Do these regulations adopt the Federal Claims Collection
Standards (FCCS)?

    This part adopts and incorporates all provisions of the FCCS. This
part also supplements the FCCS by prescribing procedures consistent with
the FCCS, as necessary and appropriate for Treasury Department
operations.



             Subpart B_Procedures To Collect Treasury Debts



Sec. 5.4  What notice will Treasury entities send to a debtor when
collecting a Treasury debt?

    (a) Notice requirements. Treasury entities shall aggressively
collect Treasury debts. Treasury entities shall promptly send at least
one written notice to a debtor informing the debtor of the consequences
of failing to pay or otherwise resolve a Treasury debt. The notice(s)
shall be sent to the debtor at the most current address of the debtor in
the records of the Treasury entity collecting the debt. Generally,
before starting the collection actions described in Sec. Sec. 5.5 and
5.9 through 5.17 of this part, Treasury entities will send no more than
two written notices to the debtor. The purpose of the notice(s) is to
explain why the debt is owed, the amount of the debt, how a debtor may
pay the debt or make alternate repayment arrangements, how a debtor may
review documents related to the debt, how a debtor may dispute the debt,
the

[[Page 92]]

collection remedies available to Treasury entities if the debtor refuses
to pay the debt, and other consequences to the debtor if the debt is not
paid. Except as otherwise provided in paragraph (b) of this section, the
written notice(s) shall explain to the debtor:
    (1) The nature and amount of the debt, and the facts giving rise to
the debt;
    (2) How interest, penalties, and administrative costs are added to
the debt, the date by which payment should be made to avoid such
charges, and that such assessments must be made unless excused in
accordance with 31 CFR 901.9 (see Sec. 5.5 of this part);
    (3) The date by which payment should be made to avoid the enforced
collection actions described in paragraph (a)(6) of this section;
    (4) The Treasury entity's willingness to discuss alternative payment
arrangements and how the debtor may enter into a written agreement to
repay the debt under terms acceptable to the Treasury entity (see Sec.
5.6 of this part);
    (5) The name, address, and telephone number of a contact person or
office within the Treasury entity;
    (6) The Treasury entity's intention to enforce collection if the
debtor fails to pay or otherwise resolve the debt, by taking one or more
of the following actions:
    (i) Offset. Offset the debtor's Federal payments, including income
tax refunds, salary, certain benefit payments (such as Social Security),
retirement, vendor, travel reimbursements and advances, and other
Federal payments (see Sec. Sec. 5.10 through 5.12 of this part);
    (ii) Private collection agency. Refer the debt to a private
collection agency (see Sec. 5.15 of this part);
    (iii) Credit bureau reporting. Report the debt to a credit bureau
(see Sec. 5.14 of this part);
    (iv) Administrative wage garnishment. Garnish the debtor's wages
through administrative wage garnishment (see Sec. 5.13 of this part);
    (v) Litigation. Refer the debt to the Department of Justice to
initiate litigation to collect the debt (see Sec. 5.16 of this part);
    (vi) Treasury Department's Financial Management Service. Refer the
debt to the Financial Management Service for collection (see Sec. 5.9
of this part);
    (7) That Treasury debts over 180 days delinquent must be referred to
the Financial Management Service for the collection actions described in
paragraph (a)(6) of this section (see Sec. 5.9 of this part);
    (8) How the debtor may inspect and copy records related to the debt;
    (9) How the debtor may request a review of the Treasury entity's
determination that the debtor owes a debt and present evidence that the
debt is not delinquent or legally enforceable (see Sec. Sec. 5.10(c)
and 5.11(c) of this part);
    (10) How a debtor may request a hearing if the Treasury entity
intends to garnish the debtor's private sector (i.e., non-Federal) wages
(see Sec. 5.13(a) of this part), including:
    (i) The method and time period for requesting a hearing;
    (ii) That the timely filing of a request for a hearing on or before
the 15th business day following the date of the notice will stay the
commencement of administrative wage garnishment, but not necessarily
other collection procedures; and
    (iii) The name and address of the office to which the request for a
hearing should be sent.
    (11) How a debtor who is a Federal employee subject to Federal
salary offset may request a hearing (see Sec. 5.12(e) of this part),
including:
    (i) The method and time period for requesting a hearing;
    (ii) That the timely filing of a request for a hearing on or before
the 15th calendar day following receipt of the notice will stay the
commencement of salary offset, but not necessarily other collection
procedures;
    (iii) The name and address of the office to which the request for a
hearing should be sent;
    (iv) That the Treasury entity will refer the debt to the debtor's
employing agency or to the Financial Management Service to implement
salary offset, unless the employee files a timely request for a hearing;
    (v) That a final decision on the hearing, if requested, will be
issued at the earliest practical date, but not later

[[Page 93]]

than 60 days after the filing of the request for a hearing, unless the
employee requests and the hearing official grants a delay in the
proceedings;
    (vi) That any knowingly false or frivolous statements,
representations, or evidence may subject the Federal employee to
penalties under the False Claims Act (31 U.S.C. 3729-3731) or other
applicable statutory authority, and criminal penalties under 18 U.S.C.
286, 287, 1001, and 1002, or other applicable statutory authority;
    (vii) That unless prohibited by contract or statute, amounts paid on
or deducted for the debt which are later waived or found not owed to the
United States will be promptly refunded to the employee; and
    (viii) That proceedings with respect to such debt are governed by 5
U.S.C. 5514 and 31 U.S.C. 3716;
    (12) How the debtor may request a waiver of the debt, if applicable
(see, for example, Treasury Directive 34-01 (Waiving Claims Against
Treasury Employees for Erroneous Payments), set forth at Appendix A of
this part and at http://www.treas.gov/regs);
    (13) How the debtor's spouse may claim his or her share of a joint
income tax refund by filing Form 8379 with the Internal Revenue Service
(see http://www.irs.gov)
    (14) How the debtor may exercise other statutory or regulatory
rights and remedies available to the debtor;
    (15) That certain debtors may be ineligible for Federal Government
loans, guaranties and insurance (see 31 U.S.C. 3720B, 31 CFR 285.13, and
Sec. 5.17(a) of this part);
    (16) If applicable, the Treasury entity's intention to suspend or
revoke licenses, permits or privileges (see Sec. 5.17(b) of this part);
and
    (17) That the debtor should advise the Treasury entity of a
bankruptcy proceeding of the debtor or another person liable for the
debt being collected.
    (b) Exceptions to notice requirements. A Treasury entity may omit
from a notice to a debtor one or more of the provisions contained in
paragraphs (a)(6) through (a)(17) of this section if the Treasury
entity, in consultation with its legal counsel, determines that any
provision is not legally required given the collection remedies to be
applied to a particular debt.
    (c) Respond to debtors; comply with FCCS. Treasury entities should
respond promptly to communications from debtors and comply with other
FCCS provisions applicable to the administrative collection of debts.
See 31 CFR part 901.



Sec. 5.5  How will Treasury entities add interest, penalty charges,
and administrative costs to a Treasury debt?

    (a) Assessment and notice. Treasury entities shall assess interest,
penalties and administrative costs on Treasury debts in accordance with
the provisions of 31 U.S.C. 3717 and 31 CFR 901.9, on Treasury debts.
Interest shall be charged in accordance with the requirements of 31
U.S.C. 3717(a). Penalties shall accrue at the rate of 6% per year, or
such other higher rate as authorized by law. Administrative costs, that
is the costs of processing and handling a delinquent debt, shall be
determined by the Treasury entity collecting the Treasury debt. Treasury
entities may have additional policies regarding how interest, penalties,
and administrative costs are assessed on particular types of debts.
Treasury entities are required to explain in the notice to the debtor
described in Sec. 5.4 of this part how interest, penalties, costs, and
other charges are assessed, unless the requirements are included in a
contract or repayment agreement.
    (b) Waiver of interest, penalties, and administrative costs. Unless
otherwise required by law, Treasury entities may not charge interest if
the amount due on the debt is paid within 30 days after the date from
which the interest accrues. See 31 U.S.C. 3717(d). Treasury entities may
waive interest, penalties, and administrative costs, or any portion
thereof, when it would be against equity and good conscience or not in
the Treasury entity's best interest to collect such charges, in
accordance with Treasury guidelines for waiving claims against Treasury
employees for erroneous overpayments. See Treasury Directive 34-01
(Waiving Claims Against Treasury Employees for Erroneous Payments) set
forth at Appendix A of this part and at http://

[[Page 94]]

www.treas.gov/regs. Legal counsel approval is not required to waive such
charges. Cf., Sec. Sec. 5.7 and 5.8 of this part, which require legal
counsel approval when compromising a debt or terminating debt collection
activity on a debt.
    (c) Accrual during suspension of debt collection. In most cases,
interest, penalties and administrative costs will continue to accrue
during any period when collection has been suspended for any reason (for
example, when the debtor has requested a hearing). Treasury entities may
suspend accrual of any or all of these charges when accrual would be
against equity and good conscience or not in the Treasury entity's best
interest, in accordance with Treasury guidelines for waiving claims
against Treasury employees for erroneous overpayments. See Treasury
Directive 34-01 (Waiving Claims Against Treasury Employees for Erroneous
Payments), set forth at Appendix A of this part and http://
www.treas.gov/regs.



Sec. 5.6  When will Treasury entities allow a debtor to pay a Treasury
debt in installments instead of one lump sum?

    If a debtor is financially unable to pay the debt in one lump sum, a
Treasury entity may accept payment of a Treasury debt in regular
installments, in accordance with the provisions of 31 CFR 901.8 and the
Treasury entity's policies and procedures.



Sec. 5.7  When will Treasury entities compromise a Treasury debt?

    If a Treasury entity cannot collect the full amount of a Treasury
debt, the Treasury entity may compromise the debt in accordance with the
provisions of 31 CFR part 902 and the Treasury entity's policies and
procedures. Legal counsel approval to compromise a Treasury debt is
required as described in Treasury Directive 34-02 (Credit Management and
Debt Collection), which may be found at http://www.treas.gov/regs.



Sec. 5.8  When will Treasury entities suspend or terminate debt
collection on a Treasury debt?

    If, after pursuing all appropriate means of collection, a Treasury
entity determines that a Treasury debt is uncollectible, the Treasury
entity may suspend or terminate debt collection activity in accordance
with the provisions of 31 CFR part 903 and the Treasury entity's
policies and procedures. Legal counsel approval to terminate debt
collection activity is required as described in Treasury Directive 34-02
(Credit Management and Debt Collection), which may be found at http://
www.treas.gov/regs.



Sec. 5.9  When will Treasury entities transfer a Treasury debt to the
Treasury Department's Financial Management Service for collection?

    (a) Treasury entities will transfer any eligible debt that is more
than 180 days delinquent to the Financial Management Service for debt
collection services, a process known as ``cross-servicing.'' See 31
U.S.C. 3711(g) and 31 CFR 285.12. Treasury entities may transfer debts
delinquent 180 days or less to the Financial Management Service in
accordance with the procedures described in 31 CFR 285.12. The Financial
Management Service takes appropriate action to collect or compromise the
transferred debt, or to suspend or terminate collection action thereon,
in accordance with the statutory and regulatory requirements and
authorities applicable to the debt and the collection action to be
taken. See 31 CFR 285.12(b)(2). Appropriate action includes, but is not
limited to, contact with the debtor, referral of the debt to the
Treasury Offset Program, private collection agencies or the Department
of Justice, reporting of the debt to credit bureaus, and administrative
wage garnishment.
    (b) At least sixty (60) days prior to transferring a Treasury debt
to the Financial Management Service, Treasury entities will send notice
to the debtor as required by Sec. 5.4 of this part. Treasury entities
will certify to the Financial Management Service, in writing, that the
debt is valid, delinquent, legally enforceable, and that there are no
legal bars to collection. In addition, Treasury entities will certify
their compliance with all applicable due process and other requirements
as described in this part and other Federal laws. See 31 CFR 285.12(i)
regarding the certification requirement.

[[Page 95]]

    (c) As part of its debt collection process, the Financial Management
Service uses the Treasury Offset Program to collect Treasury debts by
administrative and tax refund offset. See 31 CFR 285.12(g). The Treasury
Offset Program is a centralized offset program administered by the
Financial Management Service to collect delinquent debts owed to Federal
agencies and states (including past-due child support). Under the
Treasury Offset Program, before a Federal payment is disbursed, the
Financial Management Service compares the name and taxpayer
identification number (TIN) of the payee with the names and TINs of
debtors that have been submitted by Federal agencies and states to the
Treasury Offset Program database. If there is a match, the Financial
Management Service (or, in some cases, another Federal disbursing
agency) offsets all or a portion of the Federal payment, disburses any
remaining payment to the payee, and pays the offset amount to the
creditor agency. Federal payments eligible for offset include, but are
not limited to, income tax refunds, salary, travel advances and
reimbursements, retirement and vendor payments, and Social Security and
other benefit payments.



Sec. 5.10  How will Treasury entities use administrative offset (offset
of non-tax Federal payments) to collect a Treasury debt?

    (a) Centralized administrative offset through the Treasury Offset
Program. (1) In most cases, the Financial Management Service uses the
Treasury Offset Program to collect Treasury debts by the offset of
Federal payments. See Sec. 5.9(c) of this part. If not already
transferred to the Financial Management Service under Sec. 5.9 of this
part, Treasury entities will refer any eligible debt over 180 days
delinquent to the Treasury Offset Program for collection by centralized
administrative offset. See 31 U.S.C. 3716(c)(6); 31 CFR part 285,
subpart A; and 31 CFR 901.3(b). Treasury entities may refer any eligible
debt less than 180 days delinquent to the Treasury Offset Program for
offset.
    (2) At least sixty (60) days prior to referring a debt to the
Treasury Offset Program, in accordance with paragraph (a)(1) of this
section, Treasury entities will send notice to the debtor in accordance
with the requirements of Sec. 5.4 of this part. Treasury entities will
certify to the Financial Management Service, in writing, that the debt
is valid, delinquent, legally enforceable, and that there are no legal
bars to collection by offset. In addition, Treasury entities will
certify their compliance with the requirements described in this part.
    (b) Non-centralized administrative offset for Treasury debts. (1)
When centralized administrative offset through the Treasury Offset
Program is not available or appropriate, Treasury entities may collect
past-due, legally enforceable Treasury debts through non-centralized
administrative offset. See 31 CFR 901.3(c). In these cases, Treasury
entities may offset a payment internally or make an offset request
directly to a Federal payment agency. If the Federal payment agency is
another Treasury entity, the Treasury entity making the request shall do
so through the Deputy Chief Financial Officer as described in Sec.
5.20(c) of this part.
    (2) At least thirty (30) days prior to offsetting a payment
internally or requesting a Federal payment agency to offset a payment,
Treasury entities will send notice to the debtor in accordance with the
requirements of Sec. 5.4 of this part. When referring a debt for offset
under this paragraph (b), Treasury entities making the request will
certify, in writing, that the debt is valid, delinquent, legally
enforceable, and that there are no legal bars to collection by offset.
In addition, Treasury entities will certify their compliance with these
regulations concerning administrative offset. See 31 CFR
901.3(c)(2)(ii).
    (c) Administrative review. The notice described in Sec. 5.4 of this
part shall explain to the debtor how to request an administrative review
of a Treasury entity's determination that the debtor owes a Treasury
debt and how to present evidence that the debt is not delinquent or
legally enforceable. In addition to challenging the existence and amount
of the debt, the debtor may seek a review of the terms of repayment. In
most cases, Treasury entities will provide the debtor with a

[[Page 96]]

``paper hearing'' based upon a review of the written record, including
documentation provided by the debtor. Treasury entities shall provide
the debtor with a reasonable opportunity for an oral hearing when the
debtor requests reconsideration of the debt and the Treasury entity
determines that the question of the indebtedness cannot be resolved by
review of the documentary evidence, for example, when the validity of
the debt turns on an issue of credibility or veracity. Unless otherwise
required by law, an oral hearing under this section is not required to
be a formal evidentiary hearing, although Treasury entities should
carefully document all significant matters discussed at the hearing.
Treasury entities may suspend collection through administrative offset
and/or other collection actions pending the resolution of a debtor's
dispute. Each Treasury entity will have its own policies and procedures
concerning the administrative review process consistent with the FCCS
and the regulations in this section.
    (d) Procedures for expedited offset. Under the circumstances
described in 31 CFR 901.3(b)(4)(iii), Treasury entities may effect an
offset against a payment to be made to the debtor prior to sending a
notice to the debtor, as described in Sec. 5.4 of this part, or
completing the procedures described in paragraph (b)(2) and (c) of this
section. Treasury entities shall give the debtor notice and an
opportunity for review as soon as practicable and promptly refund any
money ultimately found not to have been owed to the Government.



Sec. 5.11  How will Treasury entities use tax refund offset to collect
a Treasury debt?

    (a) Tax refund offset. In most cases, the Financial Management
Service uses the Treasury Offset Program to collect Treasury debts by
the offset of tax refunds and other Federal payments. See Sec. 5.9(c)
of this part. If not already transferred to the Financial Management
Service under Sec. 5.9 of this part, Treasury entities will refer to
the Treasury Offset Program any past-due, legally enforceable debt for
collection by tax refund offset. See 26 U.S.C. 6402(d), 31 U.S.C. 3720A
and 31 CFR 285.2.
    (b) Notice. At least sixty (60) days prior to referring a debt to
the Treasury Offset Program, Treasury entities will send notice to the
debtor in accordance with the requirements of Sec. 5.4 of this part.
Treasury entities will certify to the Financial Management Service's
Treasury Offset Program, in writing, that the debt is past-due and
legally enforceable in the amount submitted and that the Treasury
entities have made reasonable efforts to obtain payment of the debt as
described in 31 CFR 285.2(d). In addition, Treasury entities will
certify their compliance with all applicable due process and other
requirements described in this part and other Federal laws. See 31
U.S.C. 3720A(b) and 31 CFR 285.2.
    (c) Administrative review. The notice described in Sec. 5.4 of this
part shall provide the debtor with at least 60 days prior to the
initiation of tax refund offset to request an administrative review as
described in Sec. 5.10(c) of this part. Treasury entities may suspend
collection through tax refund offset and/or other collection actions
pending the resolution of the debtor's dispute.



Sec. 5.12  How will Treasury entities offset a Federal employee's
salary to collect a Treasury debt?

    (a) Federal salary offset. (1) Salary offset is used to collect
debts owed to the United States by Treasury Department and other Federal
employees. If a Federal employee owes a Treasury debt, Treasury entities
may offset the employee's Federal salary to collect the debt in the
manner described in this section. For information on how a Federal
agency other than a Treasury entity may collect debt from the salary of
a Treasury Department employee, see Sec. Sec. 5.20 and 5.21, subpart C,
of this part.
    (2) Nothing in this part requires a Treasury entity to collect a
Treasury debt in accordance with the provisions of this section if
Federal law allows otherwise. See, for example, 5 U.S.C. 5705 (travel
advances not used for allowable travel expenses are recoverable from the
employee or his estate by setoff against accrued pay and other means)
and 5 U.S.C. 4108 (recovery of training expenses).

[[Page 97]]

    (3) Treasury entities may use the administrative wage garnishment
procedure described in Sec. 5.13 of this part to collect a debt from an
individual's non-Federal wages.
    (b) Centralized salary offset through the Treasury Offset Program.
As described in Sec. 5.9(a) of this part, Treasury entities will refer
Treasury debts to the Financial Management Service for collection by
administrative offset, including salary offset, through the Treasury
Offset Program. When possible, Treasury entities should attempt salary
offset through the Treasury Offset Program before applying the
procedures in paragraph (c) of this section. See 5 CFR 550.1109.
    (c) Non-centralized salary offset for Treasury debts. When
centralized salary offset through the Treasury Offset Program is not
available or appropriate, Treasury entities may collect delinquent
Treasury debts through non-centralized salary offset. See 5 CFR
550.1109. In these cases, Treasury entities may offset a payment
internally or make a request directly to a Federal payment agency to
offset a salary payment to collect a delinquent debt owed by a Federal
employee. If the Federal payment agency is another Treasury entity, the
Treasury entity making the request shall do so through the Deputy Chief
Financial Officer as described in Sec. 5.20(c) of this part. At least
thirty (30) days prior to offsetting internally or requesting a Federal
agency to offset a salary payment, Treasury entities will send notice to
the debtor in accordance with the requirements of Sec. 5.4 of this
part. When referring a debt for offset, Treasury entities will certify
to the payment agency, in writing, that the debt is valid, delinquent
and legally enforceable in the amount stated, and there are no legal
bars to collection by salary offset. In addition, Treasury entities will
certify that all due process and other prerequisites to salary offset
have been met. See 5 U.S.C. 5514, 31 U.S.C. 3716(a), and this section
for a description of the due process and other prerequisites for salary
offset.
    (d) When prior notice not required. Treasury entities are not
required to provide prior notice to an employee when the following
adjustments are made by a Treasury entity to a Treasury employee's pay:
    (1) Any adjustment to pay arising out of any employee's election of
coverage or a change in coverage under a Federal benefits program
requiring periodic deductions from pay, if the amount to be recovered
was accumulated over four pay periods or less;
    (2) A routine intra-agency adjustment of pay that is made to correct
an overpayment of pay attributable to clerical or administrative errors
or delays in processing pay documents, if the overpayment occurred
within the four pay periods preceding the adjustment, and, at the time
of such adjustment, or as soon thereafter as practical, the individual
is provided written notice of the nature and the amount of the
adjustment and point of contact for contesting such adjustment; or
    (3) Any adjustment to collect a debt amounting to $50 or less, if,
at the time of such adjustment, or as soon thereafter as practical, the
individual is provided written notice of the nature and the amount of
the adjustment and a point of contact for contesting such adjustment.
    (e) Hearing procedures--(1) Request for a hearing. A Federal
employee who has received a notice that his or her Treasury debt will be
collected by means of salary offset may request a hearing concerning the
existence or amount of the debt. The Federal employee also may request a
hearing concerning the amount proposed to be deducted from the
employee's pay each pay period. The employee must send any request for
hearing, in writing, to the office designated in the notice described in
Sec. 5.4. See Sec. 5.4(a)(11). The request must be received by the
designated office on or before the 15th calendar day following the
employee's receipt of the notice. The employee must sign the request and
specify whether an oral or paper hearing is requested. If an oral
hearing is requested, the employee must explain why the matter cannot be
resolved by review of the documentary evidence alone. All travel
expenses incurred by the Federal employee in connection with an in-
person hearing will be borne by the employee.
    (2) Failure to submit timely request for hearing. If the employee
fails to submit

[[Page 98]]

a request for hearing within the time period described in paragraph
(e)(1) of this section, the employee will have waived the right to a
hearing, and salary offset may be initiated. However, Treasury entities
should accept a late request for hearing if the employee can show that
the late request was the result of circumstances beyond the employee's
control or because of a failure to receive actual notice of the filing
deadline.
    (3) Hearing official. Treasury entities must obtain the services of
a hearing official who is not under the supervision or control of the
Secretary. Treasury entities may contact the Deputy Chief Financial
Officer as described in Sec. 5.20(c) of this part or an agent of any
agency designated in Appendix A to 5 CFR part 581 (List of Agents
Designated to Accept Legal Process) to request a hearing official.
    (4) Notice of hearing. After the employee requests a hearing, the
designated hearing official shall inform the employee of the form of the
hearing to be provided. For oral hearings, the notice shall set forth
the date, time and location of the hearing. For paper hearings, the
notice shall notify the employee of the date by which he or she should
submit written arguments to the designated hearing official. The hearing
official shall give the employee reasonable time to submit documentation
in support of the employee's position. The hearing official shall
schedule a new hearing date if requested by both parties. The hearing
official shall give both parties reasonable notice of the time and place
of a rescheduled hearing.
    (5) Oral hearing. The hearing official will conduct an oral hearing
if he or she determines that the matter cannot be resolved by review of
documentary evidence alone (for example, when an issue of credibility or
veracity is involved). The hearing need not take the form of an
evidentiary hearing, but may be conducted in a manner determined by the
hearing official, including but not limited to:
    (i) Informal conferences with the hearing official, in which the
employee and agency representative will be given full opportunity to
present evidence, witnesses and argument;
    (ii) Informal meetings with an interview of the employee by the
hearing official; or
    (iii) Formal written submissions, with an opportunity for oral
presentation.
    (6) Paper hearing. If the hearing official determines that an oral
hearing is not necessary, he or she will make the determination based
upon a review of the available written record, including any
documentation submitted by the employee in support of his or her
position.
    (7) Failure to appear or submit documentary evidence. In the absence
of good cause shown (for example, excused illness), if the employee
fails to appear at an oral hearing or fails to submit documentary
evidence as required for a paper hearing, the employee will have waived
the right to a hearing, and salary offset may be initiated. Further, the
employee will have been deemed to admit the existence and amount of the
debt as described in the notice of intent to offset. If the Treasury
entity representative fails to appear at an oral hearing, the hearing
official shall proceed with the hearing as scheduled, and make his or
her determination based upon the oral testimony presented and the
documentary evidence submitted by both parties.
    (8) Burden of proof. Treasury entities will have the initial burden
to prove the existence and amount of the debt. Thereafter, if the
employee disputes the existence or amount of the debt, the employee must
prove by a preponderance of the evidence that no debt exists or that the
amount of the debt is incorrect. In addition, the employee may present
evidence that the proposed terms of the repayment schedule are unlawful,
would cause a financial hardship to the employee, or that collection of
the debt may not be pursued due to operation of law.
    (9) Record. The hearing official shall maintain a summary record of
any hearing provided by this part. Witnesses will testify under oath or
affirmation in oral hearings.

[[Page 99]]

    (10) Date of decision. The hearing official shall issue a written
opinion stating his or her decision, based upon documentary evidence and
information developed at the hearing, as soon as practicable after the
hearing, but not later than 60 days after the date on which the request
for hearing was received by the Treasury entity. If the employee
requests a delay in the proceedings, the deadline for the decision may
be postponed by the number of days by which the hearing was postponed.
When a decision is not timely rendered, the Treasury entity shall waive
penalties applied to the debt for the period beginning with the date the
decision is due and ending on the date the decision is issued.
    (11) Content of decision. The written decision shall include:
    (i) A statement of the facts presented to support the origin,
nature, and amount of the debt;
    (ii) The hearing official's findings, analysis, and conclusions; and
    (iii) The terms of any repayment schedules, if applicable.
    (12) Final agency action. The hearing official's decision shall be
final.
    (f) Waiver not precluded. Nothing in this part precludes an employee
from requesting waiver of an overpayment under 5 U.S.C. 5584 or 8346(b),
10 U.S.C. 2774, 32 U.S.C. 716, or other statutory authority.
    (g) Salary offset process--(1) Determination of disposable pay. The
office of the Deputy Chief Financial Officer will consult with the
appropriate Treasury entity payroll office to determine the amount of a
Treasury Department employee's disposable pay (as defined in Sec. 5.1
of this part) and will implement salary offset when requested to do so
by a Treasury entity, as described in paragraph (c) of this section, or
another agency, as described in Sec. 5.20 of this part. If the debtor
is not employed by the Treasury Department, the agency employing the
debtor will determine the amount of the employee's disposable pay and
will implement salary offset upon request.
    (2) When salary offset begins. Deductions shall begin within three
official pay periods following receipt of the creditor agency's request
for offset.
    (3) Amount of salary offset. The amount to be offset from each
salary payment will be up to 15 percent of a debtor's disposable pay, as
follows:
    (i) If the amount of the debt is equal to or less than 15 percent of
the disposable pay, such debt generally will be collected in one lump
sum payment;
    (ii) Installment deductions will be made over a period of no greater
than the anticipated period of employment. An installment deduction will
not exceed 15 percent of the disposable pay from which the deduction is
made unless the employee has agreed in writing to the deduction of a
greater amount or the creditor agency has determined that smaller
deductions are appropriate based on the employee's ability to pay.
    (4) Final salary payment. After the employee has separated either
voluntarily or involuntarily from the payment agency, the payment agency
may make a lump sum deduction exceeding 15 percent of disposable pay
from any final salary or other payments pursuant to 31 U.S.C. 3716 in
order to satisfy a debt.
    (h) Payment agency's responsibilities. (1) As required by 5 CFR
550.1109, if the employee separates from the payment agency from which a
Treasury entity has requested salary offset, the payment agency must
certify the total amount of its collection and notify the Treasury
entity and the employee of the amounts collected. If the payment agency
is aware that the employee is entitled to payments from the Civil
Service Retirement Fund and Disability Fund, the Federal Employee
Retirement System, or other similar payments, it must provide written
notification to the payment agency responsible for making such payments
that the debtor owes a debt, the amount of the debt, and that the
Treasury entity has complied with the provisions of this section.
Treasury entities must submit a properly certified claim to the new
payment agency before the collection can be made.
    (2) If the employee is already separated from employment and all
payments due from his or her former payment agency have been made,
Treasury entities may request that money due and payable to the employee
from the

[[Page 100]]

Civil Service Retirement Fund and Disability Fund, the Federal Employee
Retirement System, or other similar funds, be administratively offset to
collect the debt. Generally, Treasury entities will collect such monies
through the Treasury Offset Program as described in Sec. 5.9(c) of this
part.
    (3) When an employee transfers to another agency, Treasury entities
should resume collection with the employee's new payment agency in order
to continue salary offset.



Sec. 5.13  How will Treasury entities use administrative wage
garnishment to collect a Treasury debt from a debtor's wages?

    (a) Treasury entities are authorized to collect debts from a
debtor's wages by means of administrative wage garnishment in accordance
with the requirements of 31 U.S.C. 3720D and 31 CFR 285.11. This part
adopts and incorporates all of the provisions of 31 CFR 285.11
concerning administrative wage garnishment, including the hearing
procedures described in 31 CFR 285.11(f). Treasury entities may use
administrative wage garnishment to collect a delinquent Treasury debt
unless the debtor is making timely payments under an agreement to pay
the debt in installments (see Sec. 5.6 of this part). At least thirty
(30) days prior to initiating an administrative wage garnishment,
Treasury entities will send notice to the debtor in accordance with the
requirements of Sec. 5.4 of this part, including the requirements of
Sec. 5.4(a)(10) of this part. For Treasury debts referred to the
Financial Management Service under Sec. 5.9 of this part, Treasury
entities may authorize the Financial Management Service to send a notice
informing the debtor that administrative wage garnishment will be
initiated and how the debtor may request a hearing as described in Sec.
5.4(a)(10) of this part. If a debtor makes a timely request for a
hearing, administrative wage garnishment will not begin until a hearing
is held and a decision is sent to the debtor. See 31 CFR 285.11(f)(4).
If a debtor's hearing request is not timely, Treasury entities may
suspend collection by administrative wage garnishment in accordance with
the provisions of 31 CFR 285.11(f)(5). All travel expenses incurred by
the debtor in connection with an in-person hearing will be borne by the
debtor.
    (b) This section does not apply to Federal salary offset, the
process by which Treasury entities collect debts from the salaries of
Federal employees (see Sec. 5.12 of this part).



Sec. 5.14  How will Treasury entities report Treasury debts to credit
bureaus?

    Treasury entities shall report delinquent Treasury debts to credit
bureaus in accordance with the provisions of 31 U.S.C. 3711(e), 31 CFR
901.4, and the Office of Management and Budget Circular A-129,
``Policies for Federal Credit Programs and Nontax Receivables.'' For
additional information, see Financial Management Service's ``Guide to
the Federal Credit Bureau Program,'' which may be found at http://
www.fms.treas.gov/debt. At least sixty (60) days prior to reporting a
delinquent debt to a consumer reporting agency, Treasury entities will
send notice to the debtor in accordance with the requirements of Sec.
5.4 of this part. Treasury entities may authorize the Financial
Management Service to report to credit bureaus those delinquent Treasury
debts that have been transferred to the Financial Management Service
under Sec. 5.9 of this part.



Sec. 5.15  How will Treasury entities refer Treasury debts to private
collection agencies?

    Treasury entities will transfer delinquent Treasury debts to the
Financial Management Service to obtain debt collection services provided
by private collection agencies. See Sec. 5.9 of this part.



Sec. 5.16  When will Treasury entities refer Treasury debts to the
Department of Justice?

    (a) Compromise or suspension or termination of collection activity.
Treasury entities shall refer Treasury debts having a principal balance
over $100,000, or such higher amount as authorized by the Attorney
General, to the Department of Justice for approval of any compromise of
a debt or suspension or termination of collection activity. See
Sec. Sec. 5.7 and 5.8 of this part; 31 CFR 902.1; 31 CFR 903.1.

[[Page 101]]

    (b) Litigation. Treasury entities shall promptly refer to the
Department of Justice for litigation delinquent Treasury debts on which
aggressive collection activity has been taken in accordance with this
part and that should not be compromised, and on which collection
activity should not be suspended or terminated. See 31 CFR part 904.
Treasury entities may authorize the Financial Management Service to
refer to the Department of Justice for litigation those delinquent
Treasury debts that have been transferred to the Financial Management
Service under Sec. 5.9 of this part.



Sec. 5.17  Will a debtor who owes a Treasury debt be ineligible for
Federal loan assistance or Federal licenses, permits or privileges?

    (a) Delinquent debtors barred from obtaining Federal loans or loan
insurance or guaranties. As required by 31 U.S.C. 3720B and 31 CFR
901.6, Treasury entities will not extend financial assistance in the
form of a loan, loan guarantee, or loan insurance to any person
delinquent on a debt owed to a Federal agency. This prohibition does not
apply to disaster loans. Treasury entities may extend credit after the
delinquency has been resolved. See 31 CFR 285.13 for standards defining
when a ``delinquency'' is ``resolved'' for purposes of this prohibition.
    (b) Suspension or revocation of eligibility for licenses, permits,
or privileges. Unless prohibited by law, Treasury entities should
suspend or revoke licenses, permits, or other privileges for any
inexcusable or willful failure of a debtor to pay a debt. The Treasury
entity responsible for distributing the licenses, permits, or other
privileges will establish policies and procedures governing suspension
and revocation for delinquent debtors. If applicable, Treasury entities
will advise the debtor in the notice required by Sec. 5.4 of this part
of the Treasury entities' ability to suspend or revoke licenses, permits
or privileges. See Sec. 5.4(a)(16) of this part.



Sec. 5.18  How does a debtor request a special review based on a change
in circumstances such as catastrophic illness, divorce, death, or

disability?

    (a) Material change in circumstances. A debtor who owes a Treasury
debt may, at any time, request a special review by the applicable
Treasury entity of the amount of any offset, administrative wage
garnishment, or voluntary payment, based on materially changed
circumstances beyond the control of the debtor such as, but not limited
to, catastrophic illness, divorce, death, or disability.
    (b) Inability to pay. For purposes of this section, in determining
whether an involuntary or voluntary payment would prevent the debtor
from meeting essential subsistence expenses (costs incurred for food,
housing, clothing, transportation, and medical care), the debtor shall
submit a detailed statement and supporting documents for the debtor, his
or her spouse, and dependents, indicating:
    (1) Income from all sources;
    (2) Assets;
    (3) Liabilities;
    (4) Number of dependents;
    (5) Expenses for food, housing, clothing, and transportation;
    (6) Medical expenses; and
    (7) Exceptional expenses, if any.
    (c) Alternative payment arrangement. If the debtor requests a
special review under this section, the debtor shall submit an
alternative proposed payment schedule and a statement to the Treasury
entity collecting the debt, with supporting documents, showing why the
current offset, garnishment or repayment schedule imposes an extreme
financial hardship on the debtor. The Treasury entity will evaluate the
statement and documentation and determine whether the current offset,
garnishment, or repayment schedule imposes extreme financial hardship on
the debtor. The Treasury entity shall notify the debtor in writing of
such determination, including, if appropriate, a revised offset,
garnishment, or payment schedule. If the special review results in a
revised offset, garnishment, or repayment schedule, the Treasury entity
will notify the appropriate agency or other persons about the new terms.



Sec. 5.19  Will Treasury entities issue a refund if money is erroneously
collected on a debt?

    Treasury entities shall promptly refund to a debtor any amount
collected

[[Page 102]]

on a Treasury debt when the debt is waived or otherwise found not to be
owed to the United States, or as otherwise required by law. Refunds
under this part shall not bear interest unless required by law.



   Subpart C_Procedures for Offset of Treasury Department Payments To
              Collect Debts Owed to Other Federal Agencies



Sec. 5.20  How do other Federal agencies use the offset process to
collect debts from payments issued by a Treasury entity?

    (a) Offset of Treasury entity payments to collect debts owed to
other Federal agencies. (1) In most cases, Federal agencies submit
eligible debts to the Treasury Offset Program to collect delinquent
debts from payments issued by Treasury entities and other Federal
agencies, a process known as ``centralized offset.'' When centralized
offset is not available or appropriate, any Federal agency may ask a
Treasury entity (when acting as a ``payment agency'') to collect a debt
owed to such agency by offsetting funds payable to a debtor by the
Treasury entity, including salary payments issued to Treasury entity
employees. This section and Sec. 5.21 of this subpart C apply when a
Federal agency asks a Treasury entity to offset a payment issued by the
Treasury entity to a person who owes a debt to the United States.
    (2) This subpart C does not apply to Treasury debts. See Sec. Sec.
5.10 through 5.12 of this part for offset procedures applicable to
Treasury debts.
    (3) This subpart C does not apply to the collection of non-Treasury
debts through tax refund offset. See 31 CFR 285.2 for tax refund offset
procedures.
    (b) Administrative offset (including salary offset); certification.
A Treasury entity will initiate a requested offset only upon receipt of
written certification from the creditor agency that the debtor owes the
past-due, legally enforceable debt in the amount stated, and that the
creditor agency has fully complied with all applicable due process and
other requirements contained in 31 U.S.C. 3716, 5 U.S.C. 5514, and the
creditor agency's regulations, as applicable. Offsets will continue
until the debt is paid in full or otherwise resolved to the satisfaction
of the creditor agency.
    (c) Where a creditor agency makes requests for offset. Requests for
offset under this section shall be sent to the U.S. Department of the
Treasury, ATTN: Deputy Chief Financial Officer, 1500 Pennsylvania
Avenue, NW., Attention: Metropolitan Square, Room 6228, Washington, DC
20220. The Deputy Chief Financial Officer will forward the request to
the appropriate Treasury entity for processing in accordance with this
subpart C.
    (d) Incomplete certification. A Treasury entity will return an
incomplete debt certification to the creditor agency with notice that
the creditor agency must comply with paragraph (b) of this section
before action will be taken to collect a debt from a payment issued by a
Treasury entity.
    (e) Review. A Treasury entity is not authorized to review the merits
of the creditor agency's determination with respect to the amount or
validity of the debt certified by the creditor agency.
    (f) When Treasury entities will not comply with offset request. A
Treasury entity will comply with the offset request of another agency
unless the Treasury entity determines that the offset would not be in
the best interests of the United States, or would otherwise be contrary
to law.
    (g) Multiple debts. When two or more creditor agencies are seeking
offsets from payments made to the same person, or when two or more debts
are owed to a single creditor agency, the Treasury entity that has been
asked to offset the payments may determine the order in which the debts
will be collected or whether one or more debts should be collected by
offset simultaneously.
    (h) Priority of debts owed to Treasury entity. For purposes of this
section, debts owed to a Treasury entity generally take precedence over
debts owed to other agencies. The Treasury entity that has been asked to
offset the payments may determine whether to pay debts owed to other
agencies before paying a debt owed to a Treasury entity. The Treasury
entity that has been

[[Page 103]]

asked to offset the payments will determine the order in which the debts
will be collected based on the best interests of the United States.



Sec. 5.21  What does a Treasury entity do upon receipt of a request to
offset the salary of a Treasury entity employee to collect a debt owed

by the employee to another Federal agency?

    (a) Notice to the Treasury employee. When a Treasury entity receives
proper certification of a debt owed by one of its employees, the
Treasury entity will begin deductions from the employee's pay at the
next officially established pay interval. The Treasury entity will send
a written notice to the employee indicating that a certified debt claim
has been received from the creditor agency, the amount of the debt
claimed to be owed by the creditor agency, the date deductions from
salary will begin, and the amount of such deductions.
    (b) Amount of deductions from Treasury employee's salary. The amount
deducted under Sec. 5.20(b) of this part will be the lesser of the
amount of the debt certified by the creditor agency or an amount up to
15% of the debtor's disposable pay. Deductions shall continue until the
Treasury entity knows that the debt is paid in full or until otherwise
instructed by the creditor agency. Alternatively, the amount offset may
be an amount agreed upon, in writing, by the debtor and the creditor
agency. See Sec. 5.12(g) (salary offset process).
    (c) When the debtor is no longer employed by the Treasury entity--
(1) Offset of final and subsequent payments. If a Treasury entity
employee retires or resigns or if his or her employment ends before
collection of the debt is complete, the Treasury entity will continue to
offset, under 31 U.S.C. 3716, up to 100% of an employee's subsequent
payments until the debt is paid or otherwise resolved. Such payments
include a debtor's final salary payment, lump-sum leave payment, and
other payments payable to the debtor by the Treasury entity. See 31
U.S.C. 3716 and 5 CFR 550.1104(l) and 550.1104(m).
    (2) Notice to the creditor agency. If the employee is separated from
the Treasury entity before the debt is paid in full, the Treasury entity
will certify to the creditor agency the total amount of its collection.
If the Treasury entity is aware that the employee is entitled to
payments from the Civil Service Retirement and Disability Fund, Federal
Employee Retirement System, or other similar payments, the Treasury
entity will provide written notice to the agency making such payments
that the debtor owes a debt (including the amount) and that the
provisions of 5 CFR 550.1109 have been fully complied with. The creditor
agency is responsible for submitting a certified claim to the agency
responsible for making such payments before collection may begin.
Generally, creditor agencies will collect such monies through the
Treasury Offset Program as described in Sec. 5.9(c) of this part.
    (3) Notice to the debtor. The Treasury entity will provide to the
debtor a copy of any notices sent to the creditor agency under paragraph
(c)(2) of this section.
    (d) When the debtor transfers to another Federal agency--(1) Notice
to the creditor agency. If the debtor transfers to another Federal
agency before the debt is paid in full, the Treasury entity will notify
the creditor agency and will certify the total amount of its collection
on the debt. The Treasury entity will provide a copy of the
certification to the creditor agency. The creditor agency is responsible
for submitting a certified claim to the debtor's new employing agency
before collection may begin.
    (2) Notice to the debtor. The Treasury entity will provide to the
debtor a copy of any notices and certifications sent to the creditor
agency under paragraph (d)(1) of this section.
    (e) Request for hearing official. A Treasury entity will provide a
hearing official upon the creditor agency's request with respect to a
Treasury entity employee. See 5 CFR 550.1107(a).



  Sec. Appendix A to Part 5--Treasury Directive 34-01--Waiving Claims
            Against Treasury Employees for Erroneous Payments

                        Treasury Directive 34-01

    Date: July 12, 2000.
    Sunset Review: July 12, 2004.
    Subject: Waiving Claims Against Treasury Employees for Erroneous
Payments.

[[Page 104]]

                               1. Purpose

    This Directive establishes the Department of the Treasury's policies
and procedures for waiving claims by the Government against an employee
for erroneous payments of: (1) Pay and allowances (e.g., health and life
insurance) and (2) travel, transportation, and relocation expenses and
allowances.

                              2. Background

    a. 5 U.S.C. Sec. 5584 authorizes the waiver of claims by the United
States in whole or in part against an employee arising out of erroneous
payments of pay and allowances, travel, transportation, and relocation
expenses and allowances. A waiver may be considered when collection of
the claim would be against equity and good conscience and not in the
best interest of the United States provided that there does not exist,
in connection with the claim, an indication of fraud, misrepresentation,
fault, or lack of good faith on the part of the employee or any other
person having an interest in obtaining a waiver of the claim.
    b. The General Accounting Office Act of 1996 (Pub. L. 104-316),
Title I, Sec. 103(d), enacted October 19, 1996, amended 5 U.S.C. Sec.
5584 by transferring the authority to waive claims for erroneous
payments exceeding $1,500 from the Comptroller General of the United
States to the Office of Management and Budget (OMB). OMB subsequently
redelegated this waiver authority to the executive agency that made the
erroneous payment. The authority to waive claims not exceeding $1,500,
which was vested in the head of each agency prior to the enactment of
Pub. L. 104-316, was unaffected by the Act.
    c. 5 U.S.C. Sec. 5514 authorizes the head of each agency, upon a
determination that an employee is indebted to the United States for
debts to which the United States is entitled to be repaid at the time of
the determination, to deduct up to 15%, or a greater amount if agreed to
by the employee, from the employee's pay at officially established pay
intervals in order to repay the debt.

                              3. Delegation

    a. The Deputy Assistant Secretary (Administration), the heads of
bureaus, the Inspector General, and the Inspector General for Tax
Administration are delegated the authority to waive, in whole or in
part, a claim of the United States against an employee for an erroneous
payment of pay and allowances, travel, transportation, and relocation
expenses and allowances, aggregating less than $5,000 per claim, in
accordance with the limitations and standards in 5 U.S.C. Sec. 5584.
    b. Treasury's Deputy Chief Financial Officer is delegated the
authority to waive, in whole or in part, a claim of the United States
against an employee for an erroneous payment of pay and allowances,
travel, transportation, and relocation expenses and allowances,
aggregating $5,000 or more per claim, in accordance with the limitations
and standards in 5 U.S.C. Sec. 5584.

                               4. Appeals

    a. Requests for waiver of claims aggregating less than $5,000 per
claim which are denied in whole or in part may be appealed to the Deputy
Chief Financial Officer for the Department of the Treasury.
    b. Requests for waiver of claims aggregating $5,000 or more per
claim which are denied in whole or in part may be appealed to the
Assistant Secretary (Management)/Chief Financial Officer.

                             5. Redelegation

    The Deputy Assistant Secretary (Administration), the heads of
bureaus, the Inspector General, and the Inspector General for Tax
Administration may redelegate their respective authority and
responsibility in writing no lower than the bureau deputy chief
financial officer unless authorized by Treasury's Deputy Chief Financial
Officer. Copies of each redelegation shall be submitted to the
Department's Deputy Chief Financial Officer.

                           6. Responsibilities

    a. The Deputy Assistant Secretary (Administration), the heads of
bureaus, the Inspector General, and the Inspector General for Tax
Administration shall:
    (1) Promptly notify an employee upon discovery of an erroneous
payment to that employee;
    (2) Promptly act to collect the erroneous overpayment, following
established debt collection policies and procedures;
    (3) Establish time frames for employees to request a waiver in
writing and for the bureau to review the waiver request. These time
frames must take into consideration the responsibilities of the United
States to take prompt action to pursue enforced collection on overdue
debts, which may arise from erroneous payments.
    (4) Notify employees whose requests for waiver of claims aggregating
less than $5,000 per claim are denied in whole or in part of the basis
for the denial and the right to appeal the denial to the Deputy Chief
Financial Officer of the Department of the Treasury. All such appeals
shall:
    (a) Be made in writing;
    (b) Specify the basis for the appeal;
    (c) Include a chronology of the events surrounding the erroneous
payments;
    (d) Include a statement regarding any mitigating factors; and
    (e) Be submitted to the official who denied the waiver request no
later than 60 days from receipt by the employee of written notice of the
denial of the waiver; and

[[Page 105]]

    (f) Attach at least the following documents: the employee's original
request for a waiver; the bureau's denial of the request; any personnel
actions, e.g., promotions, demotions, step increases, etc. that relate
to the overpayment.
    (5) Forward to Treasury's Deputy Chief Financial Officer the appeal
and supporting documentation, the bureau's recommendation as to why the
appeal should be approved or denied; and a statement as to the action
taken by the bureau to avoid a recurrence of the error.
    (6) Pay a refund when appropriate if a waiver is granted;
    (7) Fulfill all labor relations responsibilities when implementing
this directive; and
    (8) Fulfill any other responsibility of the agency imposed by 5
U.S.C. Sec. 5584, or other applicable laws and regulations.
    b. Treasury's Deputy Chief Financial Officer shall advise employees
whose requests for waiver of claims aggregating $5,000 or more per claim
are denied in whole or in part of the basis for the denial and the right
to appeal the denial to the Assistant Secretary (Management)/Chief
Financial Officer. All such appeals shall be in the format and contain
the information and documentation described in subsection 6.a.(4),
above. The Deputy Chief Financial Officer shall forward to Assistant
Secretary (Management)/Chief Financial Officer the appeal and supporting
documentation, his/her recommendation as to why the appeal should be
approved or denied, and a statement obtained from the bureau from which
the claim arose as to the action taken by the bureau to avoid a
recurrence of the error.

                        7. Reporting Requirements

    a. Each bureau, the Deputy Assistant Secretary (Administration) for
Departmental Offices, the Inspector General, and the Inspector General
for Tax Administration shall maintain a register of waiver actions
subject to Departmental review. The register shall cover each fiscal
year and be prepared by December 31 of each year for the preceding
fiscal year. The register shall contain the following information:
    (1) The total amount waived by the bureau;
    (2) The number and dollar amount of waiver applications granted in
full;
    (3) The number and dollar amount of waiver applications granted in
part and denied in part, and the dollar amount of each;
    (4) The number and dollar amount of waiver applications denied in
their entirety;
    (5) The number of waiver applications referred to the Deputy Chief
Financial Officer for initial action or for appeal;
    (6) The dollar amount refunded as a result of waiver action by the
bureau; and
    (7) The dollar amount refunded as a result of waiver action by the
Deputy Chief Financial Officer or the Assistant Secretary (Management)/
Chief Financial Officer.
    b. Each bureau, the Deputy Assistant Secretary (Administration) for
Departmental Offices, the Inspector General, and the Inspector General
for Tax Administration shall retain a written record of each waiver
action for 6 years and 3 months. At a minimum, the written record shall
contain:
    (1) The bureau's summary of the events surrounding the erroneous
payment;
    (2) Any written comments submitted by the employee from whom
collection is sought;
    (3) An account of the waiver action taken and the reasons for such
action; and
    (4) Other pertinent information such as any action taken to refund
amounts repaid.

                     8. Effect of Request for Waiver

    A request for a waiver of a claim shall not affect an employee's
opportunity under 5 U.S.C. Sec. 5514(a)(2)(D) for a hearing on the
determination of the agency concerning the existence or the amount of
the debt, or the terms of the repayment schedule. A request by an
employee for a hearing under 5 U.S.C. Sec. 5514(a)(2)(D) shall not
affect an employee's right to request a waiver of the claim. The
determination whether to waive a claim may be made at the discretion of
the deciding official either before or after a final decision is
rendered pursuant to 5 U.S.C. Sec. 5514(a)(2)(D) concerning the
existence or the amount of the debt, or the terms of the repayment
schedule.

                 9. Guidelines for Determining Requests

    a. A request for a waiver shall not be granted if the deciding
official determines there exists, in connection with the claim, an
indication of fraud, misrepresentation, fault, or lack of good faith on
the part of the employee or any other person having an interest in
obtaining a waiver of the claim. There are no exceptions to this rule
for financial hardship or otherwise.
    (1) ``Fault'' exists if, in light of all the circumstances, it is
determined that the employee knew or should have known that an error
existed, but failed to take action to have it corrected. Fault can
derive from an act or a failure to act. Unlike fraud, fault does not
require a deliberate intent to deceive. Whether an employee should have
known about an error in pay is determined from the perspective of a
reasonable person. Pertinent considerations in finding fault include
whether:
    (a) The payment resulted from the employee's incorrect, but not
fraudulent, statement that the employee should have known was incorrect;
    (b) The payment resulted from the employee's failure to disclose
material facts in the

[[Page 106]]

employee's possession which the employee should have known to be
material; or
    (c) The employee accepted a payment, which the employee knew or
should have known to be erroneous.
    (2) Every case must be examined in light of its particular facts.
For example, where an employee is promoted to a higher grade but the
step level for the employee's new grade is miscalculated, it may be
appropriate to conclude that there is no fault on the employee's part
because employees are not typically expected to be aware of and
understand the rules regarding determination of step level upon
promotion. On the other hand, a different conclusion as to fault
potentially may be reached if the employee in question is a personnel
specialist or an attorney who concentrates on personnel law.
    b. If the deciding official finds an indication of fraud,
misrepresentation, fault, or lack of good faith on the part of the
employee or any other person having an interest in obtaining a waiver of
the claim, then the request for a waiver must be denied.
    c. If the deciding official finds no indication of fraud,
misrepresentation, fault, or lack of good faith on the part of the
employee or any other person having an interest in obtaining a waiver of
the claim, the employee is not automatically entitled to a waiver.
Before a waiver can be granted, the deciding official must also
determine that collection of the claim against an employee would be
against equity and good conscience and not in the best interests of the
United States. Factors to consider when determining if collection of a
claim against an employee would be against equity and good conscience
and not in the best interests of the United States include, but are not
limited to:
    (1) Whether collection of the claim would cause serious financial
hardship to the employee from whom collection is sought.
    (2) Whether, because of the erroneous payment, the employee either
has relinquished a valuable right or changed positions for the worse,
regardless of the employee's financial circumstances.
    (a) To establish that a valuable right has been relinquished, it
must be shown that the right was, in fact, valuable; that it cannot be
regained; and that the action was based chiefly or solely on reliance on
the overpayment.
    (b) To establish that the employee's position has changed for the
worse, it must be shown that the decision would not have been made but
for the overpayment, and that the decision resulted in a loss.
    (c) An example of a ``detrimental reliance'' would be a decision to
sign a lease for a more expensive apartment based chiefly or solely upon
reliance on an erroneous calculation of salary, and the funds spent for
rent cannot be recovered.
    (3) The cost of collecting the claim equals or exceeds the amount of
the claim;
    (4) The time elapsed between the erroneous payment and discovery of
the error and notification of the employee;
    (5) Whether failure to make restitution would result in unfair gain
to the employee;
    (6) Whether recovery of the claim would be unconscionable under the
circumstances.
    d. The burden is on the employee to demonstrate that collection of
the claim would be against equity and good conscience and not in the
best interest of the United States.

                             10. Authorities

    a. 5 U.S.C. Sec. 5584, ``Claims for Overpayment of Pay and
Allowances, and of Travel, Transportation and Relocation Expenses and
Allowances.''
    b. 31 U.S.C. Sec. 3711, ``Collection and Compromise.''
    c. 31 U.S.C. Sec. 3716, ``Administrative Offset.''
    d. 31 U.S.C. Sec. 3717, ``Interest and Penalty on Claims.''
    e. 5 CFR Part 550, subpart K, ``Collection by Offset from Indebted
Government Employees.''
    f. 31 CFR Part 5, subpart B, ``Salary Offset.''
    g. Determination with Respect to Transfer of Functions Pursuant to
Public Law 104-316, OMB, December 17, 1996.

                            11. Cancellation

    TD 34-01, ``Waiver of Claims for Erroneous Payments,'' dated October
25, 1995, is superseded.

                     12. Office of Primary Interest

    Office of Accounting and Internal Control.



PART 6_APPLICATIONS FOR AWARDS UNDER THE EQUAL ACCESS TO JUSTICE
ACT--Table of Contents



                      Subpart A_General Provisions

Sec.
6.1 Purpose of these rules.
6.2 When the Act applies.
6.3 Proceedings covered.
6.4 Eligibility of applicants.
6.5 Standards for awards.
6.6 Allowable fees and other expenses.
6.7 Delegations of authority.

             Subpart B_Information Required From Applicants

6.8 Contents of application.
6.9 Net worth exhibit.
6.10 Documentation of fees and expenses.
6.11 When an application may be filed.

[[Page 107]]

            Subpart C_Procedures for Considering Applications

6.12 Filing and service of documents.
6.13 Answer to application.
6.14 Decision.
6.15 Agency review.
6.16 Judicial review.
6.17 Payment of award.

    Authority: Sec. 203(a)(1), Pub. L. 96-481, 94 Stat. 2325 (5 U.S.C.
504(c)(1)).

    Source: 47 FR 20765, May 14, 1982, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 6.1  Purpose of these rules.

    The Equal Access to Justice Act, 5 U.S.C. 504 (called ``the Act'' in
this part), provides for the award of attorney fees and other expenses
to eligible individuals and entities who are parties to certain
administrative proceedings (called ``adversary adjudications'') before
agencies of the Government of the United States. An eligible party may
receive an award when it prevails over an agency, unless the agency's
position in the proceeding was substantially justified or special
circumstances make an award unjust. The rules in this part describe the
parties eligible for awards and the proceedings that are covered. They
also explain how to apply for awards, and the procedures and standards
that the Treasury Department will use to make them.



Sec. 6.2  When the Act applies.

    The Act applies to any adversary adjudication pending before an
agency at any time between October 1, 1981 and September 30, 1984. This
includes proceedings begun before October 1, 1981, if final agency
action has not been taken before that date, and proceedings pending on
September 30, 1984, regardless of when they were initiated or when final
agency action occurs.



Sec. 6.3  Proceedings covered.

    The Act applies to adversary adjudications required to be conducted
by the Treasury Department under 5 U.S.C. 554. Within the Treasury
Department, these proceedings are:
    (a) Bureau of Alcohol, Tobacco and Firearms: (1) Permit proceedings
under the Federal Alcohol Administration Act (27 U.S.C. 204); (2) Permit
proceedings under the Internal Revenue Code of 1954 (26 U.S.C. 5171,
5271, 5713); (3) License and permit proceedings under the Federal
Explosives Laws (18 U.S.C. 843).
    (b) Comptroller of the Currency:

All proceedings conducted under 12 CFR part 19, subpart A.



Sec. 6.4  Eligibility of applicants.

    (a) To be eligible for an award of attorney fees and other expenses
under the Act, the applicant must be a party to the adversary
adjudication for which it seeks an award. The term ``party'' is defined
in 5 U.S.C. 551(3). The applicant must show that it meets all conditions
of eligibility set out in this subpart and has complied with the
requirements in Subpart B of this part.
    (b) The types of eligible applicants are as follows:
    (1) An individual with a net worth of not more than $1 million;
    (2) The sole owner of an unincorporated business who has a net worth
of not more than $5 million, including both personal and business
interests, and not more than 500 employees;
    (3) A charitable or other tax-exempt organization described in
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3))
with not more than 500 employees;
    (4) A cooperative association as defined in section 15(a) of the
Agricultural Marketing Act (12 U.S.C. 1141(a)) with not more than 500
employees, or
    (5) Any other partnership, corporation, association, or public or
private organization with a net worth of not more than $5 million and
not more than 500 employees.
    (c) For the purpose of eligibility, the net worth and number of
employees of an applicant shall be determined as of the date the
proceeding was initiated.
    (d) An applicant who owns an unincorporated business will be
considered as an ``individual'' rather than a ``sole owner of an
unincorporated business'' if the matter in controversy is primarily
related to personal interests rather than to business interests.
    (e) The employees of an applicant include all persons who regularly
perform services for remuneration for the

[[Page 108]]

applicant, under the applicant's direction and control. Part-time
employees shall be included.
    (f) The net worth and number of employees of the applicant and all
of its affiliates shall be aggregated to determine eligibility. Any
individual or group of individuals, corporation or other entity that
directly or indirectly controls or owns a majority of the voting shares
of another business, or controls in any manner the election of a
majority of that business's board of directors, trustees, or other
persons exercising similar functions, will be considered an affiliate of
that business for purposes of this part, unless the adjudicative officer
determines that such treatment would be unjust and contrary to the
purposes of the Act in light of the actual relationship between the
affiliated entities. In addition, the adjudicative officer may determine
that financial relationships of the applicant other than those described
in this paragraph constitute special circumstances that would make an
award unjust.
    (g) An applicant that participates in a proceeding primarily on
behalf of one or more other persons or entities that would be ineligible
is not itself eligible for an award.



Sec. 6.5  Standards for awards.

    (a) A prevailing applicant may receive an award for fees and
expenses incurred in connection with the final disposition of a
proceeding, unless (1) the position of the agency was substantially
justified, or (2) special circumstances make the award unjust. No
presumption arises that the agency's position was not substantially
justified simply because the agency did not prevail.
    (b) An award will be reduced or denied if the applicant has unduly
or unreasonably protracted the proceeding or if special circumstances
make the award sought unjust.



Sec. 6.6  Allowable fees and other expenses.

    (a) The following fees and other expenses are allowable under the
Act:
    (1) Reasonable expenses of expert witnesses;
    (2) Reasonable cost of any study, analysis, engineering report,
test, or project which the agency finds necessary for the preparation of
the party's case;
    (3) Reasonable attorney or agent fees.
    (b) The amount of fees awarded will be based upon the prevailing
market rates for the kind and quality of services furnished, except that
    (1) Compensation for an expert witness will not exceed the highest
rate paid by the agency for expert witnesses; and
    (2) Attorney or agent fees will not be in excess of $75 per hour.



Sec. 6.7  Delegations of authority.

    The Director, Bureau of Alcohol, Tobacco and Firearms and the
Comptroller of the Currency are authorized to take final action on
matters pertaining to the Equal Access to Justice Act, 5 U.S.C. 504, in
proceedings listed in Sec. 6.3 under the respective bureau or office.
The Secretary of the Treasury may by order delegate authority to take
final action on matters pertaining to the Equal Access to Justice Act in
particular cases to other subordinate officials.



             Subpart B_Information Required From Applicants



Sec. 6.8  Contents of application.

    (a) An application for an award of fees and expenses under the Act
shall identify the applicant and the proceeding for which an award is
sought. The application shall show that the applicant has prevailed and
identify the position of the agency in the proceeding that the applicant
alleges was not substantially justified. The application shall state the
basis for the applicant's belief that the position was not substantially
justified. Unless the applicant is an individual, the application shall
also state the number of employees of the applicant and describe briefly
the type and purpose of its organization or business.
    (b) The application shall also include a statement that the
applicant's net worth does not exceed $1 million (if an individual) or
$5 million (for all other applicants, including their affiliates).

[[Page 109]]

However, an applicant may omit this statement if:
    (1) It attaches a copy of a ruling by the Internal Revenue Service
that it qualifies as an organization described in section 501(c)(3) of
the Internal Revenue Code (26 U.S.C. 501(c)(3)) or, in the case of a
tax-exempt organization not required to obtain a ruling from the
Internal Revenue Service on its exempt status, a statement that
describes the basis for the applicant's belief that it qualifies under
such section; or
    (2) It states that it is a cooperative association as defined in
section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)).
    (c) The application shall itemize the amount of fees and expenses
for which an award is sought.
    (d) The application may also include any other matters that the
applicant wishes the agency to consider in determining whether and in
what amount an award should be made.
    (e) The application shall be signed by the applicant or an
authorized officer with respect to the eligibility of the applicant and
by the attorney of the applicant with respect to fees and expenses
sought. It shall also contain or be accompanied by a written
verification under oath or under penalty of perjury that the information
provided in the application is true and correct.

(Approved by the Office of Management and Budget under control number
1512-0444, for applications filed with the Bureau of Alcohol, Tobacco
and Firearms)

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[47 FR 20765, May 14, 1982, as amended at 49 FR 14944, Apr. 16, 1984]



Sec. 6.9  Net worth exhibit.

    (a) Each applicant except a qualified tax-exempt organization, or
cooperative association must provide with its application a detailed
exhibit showing the net worth of the applicant and any affiliates (as
defined in Sec. 6.4(f)) when the proceeding was initiated. In the case
of national banking associations, ``net worth'' shall be considered to
be the total capital and surplus as reported, in conformity with the
applicable instructions and guidelines, on the bank's last Consolidated
Report of Condition filed before the initiation of the underlying
proceeding.
    (b) The exhibit may be in any form convenient to the applicant that
provides full disclosure of the applicant's and its affiliates assets
and liabilities and is sufficient to determine whether the applicant
qualifies under the standards in this part. The adjudicative officer may
require an applicant to file additional information to determine its
eligibility for an award.



Sec. 6.10  Documentation of fees and expenses.

    (a) The application shall be accompanied by full documentation of
the fees and expenses, including the cost of any study, engineering
report, test, or project, for which an award is sought.
    (b) The documentation shall include an affidavit from any attorney,
agent, or expert witness representing or appearing in behalf of the
party, stating the actual time expended and the rate at which fees and
other expenses were computed and describing the specific services
performed.
    (1) The affidavit shall state the services performed. In order to
establish the hourly rate, the affidavit shall state the hourly rate
which is billed and paid by the majority of clients during the relevant
time periods.
    (2) If not hourly rate is paid by the majority of clients because,
for instance, the attorney or agent represents most clients on a
contingency basis, the attorney or agent shall provide information about
two attorneys or agents with similar experience, who perform similar
work, stating their hourly rate.
    (c) The documentation shall also include a description of any
expenses for which reimbursement is sought and a statement of the
amounts paid and payable by the applicant or by any other person or
entity for the services provided.
    (d) The adjudicative officer may require the applicant to provide
vouchers, receipts, or other substantiation for any expenses claimed.



Sec. 6.11  When an application may be filed.

    (a) An application may be filed whenever the applicant has prevailed
in the

[[Page 110]]

proceeding but in no case later than 30 days after the agency's final
disposition of the proceeding.
    (b) If review or reconsideration is sought or taken of a decision as
to which an applicant believes it has prevailed, proceedings for the
award of fees shall be stayed pending final disposition of the
underlying controversy.



            Subpart C_Procedures for Considering Applications



Sec. 6.12  Filing and service of documents.

    Any application for an award or other pleading or document related
to an application shall be filed and served on all parties to the
proceeding in the same manner as other pleadings in the proceeding.



Sec. 6.13  Answer to application.

    (a) Within 30 days after service of an application, counsel
representing the agency against which an award is sought shall file an
answer to the application.
    (b) If agency counsel and the applicant believe that the issues in
the fee application can be settled, they may jointly file a statement of
their intent to negotiate a settlement. The filing of this statement
shall extend the time for filing an answer for an additional 60 days and
further extensions may be granted by the adjudicative officer upon
request by agency counsel and the applicant.
    (c) The answer shall explain any objections to the award requested
and identify the facts relied on in support of agency counsel's
position. If the answer is based on any alleged facts not already in the
record of the proceeding, agency counsel shall include with the answer
supporting affidavits.



Sec. 6.14  Decision.

    The adjudicative officer shall issue an initial decision on the
application within 60 days after completion of proceedings on the
application. The decision shall include written findings and conclusions
on the applicant's eligibility and status as a prevailing party, and an
explanation of the reasons for any difference between the amount
requested and the amount awarded. The decision shall also include, if at
issue, findings on whether the agency's position was substantially
justified, whether the applicant unduly protracted the proceedings, or
whether special circumstances make an award unjust.



Sec. 6.15  Agency review.

    Either the applicant or agency counsel may seek review of the
initial decision on the fee application, or the agency may decide to
review the decision on its own initiative. If neither the applicant nor
agency counsel seeks a review and the agncy does not take review on its
own initiative, the initial decision on the application shall become a
final decision of the agency 30 days after it is issued. Whether to
review a decision is a matter within the discretion of the agency. If
review is taken, the agency will issue a final decision on the
application or remand the application to the adjudicative officer for
further proceedings.



Sec. 6.16  Judicial review.

    Judicial review of final agency decisions on awards may be sought as
provided in 5 U.S.C. 504(c)(2).



Sec. 6.17  Payment of award.

    An applicant seeking payment of an award shall submit to the agency
a copy of the agency's final decision granting the award, accompanied by
a statement that the applicant will not seek review of the decision in
the United States courts. An applicant shall be paid the amount awarded
unless judicial review of the award or of the underlying decision of the
adversary adjudication has been sought by the applicant or any other
party to the proceeding.



PART 7_EMPLOYEE INVENTIONS--Table of Contents



Sec.
7.1 Purpose.
7.2 Responsibilities of the Department.
7.3 Responsibilities of heads of offices.
7.4 Responsibilities of the General Counsel.
7.5 Responsibilities of employees.
7.6 Effect of awards.
7.7 Appeals.
7.8 Delegation.

    Authority: 80 Stat. 379; 5 U.S.C. 301, sec. 6, E.O. 10096; 3 CFR,
1949-1953 Comp., p. 292, as amended by E.O. 10930; 3 CFR, 1959-1963
Comp., p. 456.

[[Page 111]]


    Source: 33 FR 10088, July 13, 1968, unless otherwise noted.



Sec. 7.1  Purpose.

    Provisions defining the right, title, and interest of the Government
in and to an invention made by a Government employee under various
circumstances and the duties of Government agencies with respect thereto
are set forth in Executive Order 10096, 15 FR 389, as amended (35 U.S.C.
266 note). Further definition of the circumstances under which the
Government will acquire the right to a patent in such an invention or a
nonexclusive, irrevocable, royalty-free license in the invention, and
the procedures for the determination of these interests, are set forth
in the regulations issued under that Executive order by the Patent
Office, 37 CFR part 100. The purpose of this part 7 is to implement for
the Treasury Department the foregoing Executive order and regulations of
the Patent Office by (a) bringing to the attention of Treasury employees
the law and procedure governing their rights to, and interest in,
inventions made by them, (b) defining responsibility within the
Department for making the necessary determinations, and, (c)
establishing internal procedures for action in conformity with the
Executive order and the Patent Office regulations.



Sec. 7.2  Responsibilities of the Department.

    The responsibilities of the Treasury Department are to determine
initially (a) the occurrence of an invention by an employee, (b) his
rights in the invention and the rights of the Government therein, and
(c) whether patent protection will be sought in the United States by the
Department, and to furnish the required reports to the Patent Office.



Sec. 7.3  Responsibilities of heads of offices.

    (a) Heads of bureaus or offices in the Department shall be
responsible for determining initially whether the results of research,
development, or other activity of an employee within that bureau or
office constitute an invention which falls within the purview of
Executive Order 10096, as amended, and is to be handled in accordance
with the regulations in this part.
    (b) Heads of bureaus or offices are responsible for obtaining from
the employee the necessary information and, if the determination under
paragraph (a) of this section is affirmative, preparing on behalf of the
bureau or office a description of the invention and its relationship to
the employee's duties and work assignments.
    (c) Heads of bureaus or offices, after such examination and
investigation as may be necessary, shall refer to the General Counsel
all information obtained concerning the invention and such determination
as the head of the bureau or office has made with respect to the
character of the activity as an invention. These reports shall include
any determination as to the giving of a cash award to the employee for
his performance relating to that invention.



Sec. 7.4  Responsibilities of the General Counsel.

    (a) The General Counsel shall be responsible for determining,
subject to review by the Commissioner of Patents, the respective rights
of the Government and of the inventor in and to any invention made by an
employee of the Department.
    (b) On the basis of the foregoing determination, the General Counsel
shall determine whether patent protection will be sought by the
Department for such an invention.
    (c) The General Counsel will prepare and furnish to the Patent
Office the reports required by the regulations of that Office and will
serve as the liaison officer between the Department and the Commissioner
of Patents.



Sec. 7.5  Responsibilities of employees.

    All employees are required to report to the heads of their bureaus
or offices any result of research, development, or other activity on
their part which may constitute an invention and the circumstances under
which this possible invention came into being.



Sec. 7.6  Effect of awards.

    The acceptance by an employee of a cash award for performance which
constitutes an invention shall, in accordance with 5 U.S.C. 4502(c),
constitute

[[Page 112]]

an agreement that the use by the Government of the idea, method, or
device for which the award is made does not form the basis of any
further claim against the Government by the employee, his heirs or
assigns.



Sec. 7.7  Appeals.

    (a) Any employee who is aggrieved by a determination made by the
head of his bureau or office under this part may obtain a review of the
determination by filing an appeal with the General Counsel within 30
days after receiving the notice of the determination complained of.
    (b) Any employee who is aggrieved by a determination made by the
General Counsel under this part may obtain a review of the determination
by filing a written appeal with the Commissioner of Patents within 30
days after receiving notice of the determination complained of, or
within such longer period as the Commissioner may provide. The appeal to
the Commissioner shall be processed in accordance with the provisions in
the regulations of the Patent Office for an appeal from an agency
determination.



Sec. 7.8  Delegation.

    The heads of bureaus or offices and the General Counsel may
delegate, as appropriate, the performance of the responsibilities
assigned to them under this part.



PART 8_PRACTICE BEFORE THE BUREAU OF ALCOHOL, TOBACCO AND
FIREARMS--Table of Contents



                     Subpart A_General Requirements

Sec.
8.1 Scope.
8.2 Persons who may practice.
8.3 Conference and practice requirements.
8.4 Director of Practice.
8.5 Records.
8.6 Special orders.

                          Subpart B_Definitions

8.11 Meaning of terms.

                     Subpart C_Enrollment Procedures

8.21 Eligibility for enrollment.
8.22 Application for enrollment.
8.23 Denial of enrollment; appeal.
8.24 Enrollment cards.
8.25 Renewal of enrollment card.
8.26 Change in enrollment.
8.27 Enrollment registers.
8.28 Termination of enrollment.
8.29 Limited practice without enrollment.

         Subpart D_Duties and Restrictions Relating to Practice

8.31 Furnishing of information.
8.32 Prompt disposition of pending matters.
8.33 Accuracy.
8.34 Knowledge of client's omission.
8.35 Assistance from disbarred or suspended persons and former Treasury
          employees.
8.36 Practice by partners of Government employees.
8.37 Practice by former Government employees.
8.38 Notaries.
8.39 Fees.
8.40 Conflicting interests.
8.41 Solicitation.
8.42 Practice of law.

                   Subpart E_Disciplinary Proceedings

8.51 Authority to disbar or suspend.
8.52 Disreputable conduct.
8.53 Initiation of disciplinary proceedings.
8.54 Conferences.
8.55 Contents of complaint.
8.56 Service of complaint and other papers.
8.57 Answer.
8.58 Supplemental charges.
8.59 Proof; variance; amendment of pleadings.
8.60 Motions and requests.
8.61 Representation.
8.62 Administrative Law Judge.
8.63 Hearings.
8.64 Evidence.
8.65 Depositions.
8.66 Transcript.
8.67 Proposed findings and conclusions.
8.68 Decision of Administrative Law Judge.
8.69 Appeal to the Secretary.
8.70 Decision of the Secretary.
8.71 Effect of disbarment or suspension.
8.72 Petition for reinstatement.

    Authority: Sec. 3, 23 Stat. 258 (31 U.S.C. 1026); 5 U.S.C. 301, 500,
551-559; and Reorganization Plan No. 26 of 1950, 15 FR 4935, 64 Stat.
1280, as amended.

    Source: 42 FR 33026, June 29, 1977, unless otherwise noted.



                     Subpart A_General Requirements



Sec. 8.1  Scope.

    This part contains rules governing the recognition of attorneys,
certified public accountants, enrolled practitioners, and other persons
representing

[[Page 113]]

clients before the Bureau of Alcohol, Tobacco and Firearms.



Sec. 8.2  Persons who may practice.

    (a) Attorneys. Any attorney who is not currently under suspension or
disbarment from practice before the Bureau of Alcohol, Tobacco and
Firearms, may practice before the Bureau upon filing a written
declaration with the Bureau, that he or she is currently qualified as an
attorney and is authorized to represent the particular party on whose
behalf he or she acts.
    (b) Certified public accountants. Any certified public accountant
who is not currently under suspension or disbarment before the Bureau of
Alcohol, Tobacco and Firearms, may practice before the Bureau upon
filing a written declaration with the Bureau, that he or she is
currently qualified as a certified public accountant and is authorized
to represent the particular party on whose behalf he or she acts.
    (c) Enrollment practitioners. Any person enrolled as a practitioner
under the provisions of subpart C of this part and who is not under
suspension or disbarment from enrollment may practice before the Bureau.
    (d) Limited practitioners. Any person qualified for limited practice
without enrollment under the provisions of Sec. 8.29 may practice
before the Bureau.
    (e) Restrictions on Government officers and employees. Any officer
or employee of the United States in the executive, legislative, or
judicial branch of the Government, or in any agency of the United
States, including the District of Columbia, who is otherwise eligible to
practice under the provisions of this part, may represent parties before
the Bureau when doing so in the conduct of his or her official duties. A
Government officer or employee may not otherwise practice before the
Bureau except that, subject to the requirements of 18 U.S.C. 205, he or
she may represent a member of his or her immediate family or a person or
estate for which he or she serves as guardian, executor, administrator,
trustee or other personal fiduciary. Member of Congress or Resident
Commissioners (elect or serving) may not practice before the Bureau in
connection with any matter for which they directly or indirectly seek
any compensation.
    (f) Restrictions on State officers and employees. No officer or
employee of any State, or subdivision thereof, whose official
responsibilities require him or her to pass upon, investigate, or deal
with any State law or regulation concerning alcohol, tobacco, firearms,
explosives matters or wagering, may practice before the Bureau if his or
her official responsibility may disclose pertinent facts or information
relating to matters administered by the Bureau.
    (g) Customhouse brokers. Customhouse brokers, licensed by the
Commissioner of Customs according to 19 CFR part 111, may represent a
party for whom they have acted as a customhouse broker before the Bureau
with respect to matters relating to the importation or exportation of
merchandise under customs or intenal revenue laws.

(Approved by the Office of Management and Budget under control number
1512-0418)

(18 U.S.C. 203, 205; 5 U.S.C. 552(a) (80 Stat. 383, as amended))

[42 FR 33026, June 29, 1977, as amended at 49 FR 14944, Apr. 16, 1984]



Sec. 8.3  Conference and practice requirements.

    Conference and practice requrements of the Bureau of Alcohol,
Tobacco and Firearms, including requirements for powers of attorney are
set forth in:
    (a) 26 CFR part 601, subpart E (or those regulations as recodified
in 27 CFR part 71 subsequent to the effective date of these regulations,
31 CFR part 8) with respect to all representations before the Bureau
except those concerning license or permit proceedings;
    (b) 27 CFR part 200 with respect to proceedings concerning permits
issued under the Federal Alcohol Administration Act or the Internal
Revenue Code;
    (c) 27 CFR 47.44 with respect to proceedings concerning licenses
issued under the Arms Export Control Act (22 U.S.C. 2778);
    (d) 27 CFR part 178, subpart E, with respect to proceedings
concerning licenses issued under the Gun Control Act of 1968 (18 U.S.C.
Chapter 44); and

[[Page 114]]

    (e) 27 CFR part 181, subpart E, with respect to proceedings
concerning licenses or permits issued under the Organized Crime Control
Act of 1970 (18 U.S.C. Chapter 40).



Sec. 8.4  Director of Practice.

    (a) Appointment. The Secretary shall appoint the Director of
Practice. In the event of the absence of the Director of Practice or a
vacancy in that office, the Secretary shall designate an officer or
employee of the Treasury Department to act as Director of Practice.
    (b) Duties. The Director of Practice, Office of the Secretary of the
Treasury, shall: Act upon appeals from decisions of the Director denying
applications for enrollment to practice before the Bureau; institute and
provide for the conduct of disciplinary proceedings relating to
attorneys, certified public accountants, and enrolled practitioners;
make inquiries with respect to matters under his or her jurisdiction;
and perform other duties as are necessary or appropriate to carry out
his or her functions under this part or as are prescribed by the
Secretary.



Sec. 8.5  Records.

    (a) Availability. Registers of all persons admitted to practice
before the Bureau, and of all persons disbarred or suspended from
practice, which are required to be maintained by the director under the
provisions of Sec. 8.27, will be available for public inspection at the
Office of the Director. Other records may be disclosed upon specific
request in accordance with the disclosure regulations of the Bureau (27
CFR part 71) and the Office of the Secretary.
    (b) Disciplinary proceedings. The Director, may grant a request by
an attorney, certified public accountant, or enrolled practitioner to
make public a hearing in a disciplinary proceeding, conducted under the
provisions of subpart E of this part concerning the attorney, certified
public accountant or enrolled practioner, and to make the record of the
proceeding available for public inspection by interested persons, if an
agreement is reached by stipulation in advance to prevent disclosure of
any information which is confidential, in accordance with applicable
laws and regulations.



Sec. 8.6  Special orders.

    The secretary reserves the power to issue special orders as he or
she may deem proper in any cases within the scope of this part.



                          Subpart B_Definitions



Sec. 8.11  Meaning of terms.

    As used in this part, terms shall have the meaning given in this
section. Words in the plural shall include the singular, and vice versa.
The terms include and including do not exclude things not enumerated
which are in the same general class.
    Administrative Law Judge. The person appointed pursuant to 5 U.S.C.
3105, designated to preside over any administrative proceedings under
this part.
    Attorney. A person who is a member in good standing of the bar of
the highest court of any State, possession, territory, Commonwealth, or
the District of Columbia.
    Bureau. The Bureau of Alcohol, Tobacco and Firearms, the Department
of the Treasury, Washington, DC 20226.
    Certified public accountant. Any person who is qualified to practice
as a certified public accountant in any State, possession, territory,
Commonwealth, or the District of Columbia.
    CFR. The Code of Federal Regulations.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the
Department of the Treasury, Washington, DC.
    Enrolled practitioner. Any person enrolled to practice before the
Bureau of Alcohol, Tobacco and Firearms pursuant to Subpart C of this
part.
    Practice before the Bureau. This comprehends all matters connected
with presentation to the Bureau or any of its officers or employees
relating to a client's rights, privileges or liabilities under laws or
regulations administered by the Bureau. Presentations include the
preparation and filing of necessary documents, correspondence with and
communications to the Bureau, and the representation of a client at
conferences, hearings, and meetings. Preparation of a tax return,
appearance of an individual as a witness for any party, or furnishing
information at the

[[Page 115]]

request of the Bureau of any of its officers or employees is not
considered practice before the Bureau.
    Secretary. The Secretary of the Treasury.
    U.S.C. The United States Code.



                     Subpart C_Enrollment Procedures



Sec. 8.21  Eligibility for enrollment.

    (a) General qualifications. The Director may grant enrollment to
practice to any person who has not engaged in conduct which would
justify the disbarment or suspension of any attorney, certified public
accountant, or enrolled practioner. Each person shall demonstrate to the
satisfaction of the Director that he or she possesses the necessary
technical qualifications to enable him or her to render valuable service
before the Bureau, and that he or she is otherwise competent to advise
and assists in the presentation of matters before the Bureau.
    (b) Technical qualifications. The Director may grant enrollment to
practice only to persons possessing technical knowledge of the laws and
regulations administered by the Bureau.
    (1) Minimum criteria required of an enrolled practioner will consist
of: 5 years employment with the Treasury Department in a responsible
position which would familiarize the person with applicable laws and
regulations; or 5 years employment in a regulated industry in a
responsible position which would familiarize the person with applicable
laws and regulations; or possession of a law degree; or other
significant experience such as the prior respresentation of persons
before the Internal Revenue Service or the Bureau of Alcohol, Tobacco
and Firearms.
    (2) An enrolled paractioner may demonstrate technical knowledge in
one or more of the several areas of laws and regulations administered by
the Bureau (alcohol, tobacco firearms, or explosives matters).
    (c) Natural persons. Enrollment to practice may only be granted to
natural persons who have become 18 years of age.
    (d) Attorneys, certified public accountants. Enrollment if not
available to persons who are attorneys or certified public accountants
who qualify to practice without enrollment under Sec. 8.2 (a) or (b).

[42 FR 33026, June 29, 1977; 42 FR 36455, July 15, 1977]



Sec. 8.22  Application for enrollment.

    (a) Information to be furnished. An applicant for enrollment to
practice shall state his or her name, address, and business address,
citizenship, and age on the application. The applicant shall also state
if he or she has ever been suspended or disbarred as an attorney or
certified public accountant, or if the applicant's right to practice has
ever been revoked by any court, commission, or administrative agency in
any jurisdiction. The applicant shall set forth his or her technical
qualifications as required by Sec. 8.21(b) which enable him or her to
render valuable service before the Bureau. The applicant shall indicate
which area or areas of Bureau matters in which he or she desires to
practice (alcohol, tobacco, firearms, or explosives matters).
    (b) Fee. Each application for enrollment will be accompanied by a
check or money order in the amount of $25, payable to the Bureau of
Alcohol, Tobacco and Firearms. This fee will be retained by the United
States whether or not the applicant is granted enrollment. Agents who
are enrolled to practice before the Internal Revenue Service prior to
September 27, 1977, need not include this fee and should indicate their
enrollment number on the application.
    (c) Execution under oath. All applications for enrollment will be
executed under oath or affirmation.
    (d) Filing. Applications for enrollment will be filed with the
Assistant Director, Regulatory Enforcement, Bureau of Alcohol, Tobacco
and Firearms, 1200 Pensylvania Avenue NW., Washington, DC 20226.
    (e) Additional information. The Director, as a condition to
consideration for enrollment, may require the applicant to file
additional information as necessary to determine if the applicant is
qualified. The Director shall, upon written request, afford an applicant
the

[[Page 116]]

opportunity to be heard with respect to his or her application for
enrollment.

(Approved by the Office of Management and Budget under control number
1512-0418)

(Sec. 501, Pub. L. 82-137, 65 Stat. 290 (31 U.S.C. 483a); 5 U.S.C.
552(a) (80 Stat. 383, as amended))

[42 FR 33026, June 29, 1977; 42 FR 36455, July 15, 1977, as amended at
49 FR 14944, Apr. 16, 1984]



Sec. 8.23  Denial of enrollment; appeal.

    (a) The Director, in denying an application for enrollment, shall
inform the applicant as to the reasons. The applicant may, within 30
days after receipt of the notice of denial, file a written appeal
together with reasons in support thereof, with the Director of Practice.
The Director of Practice shall render a decision on the appeal as soon
as practicable.
    (b) An applicant may, within 30 days after receipt of the decision
of the Director of Practice in sustaining a denial of enrollment, appeal
the decision to the Secretary.



Sec. 8.24  Enrollment cards.

    The Director shall issue an enrollment card to each practitioner who
is enrolled to practice before the Bureau. Each enrollment card is valid
for a period of 5 years as long as the holder remains enrolled and in
good standing before the Bureau. Unless advised to the contrary by the
Director, any officer or employee of the Bureau may consider the holder
of an unexpired enrollment card to be authorized to practice before the
Bureau in the subject area or areas indicated upon the card (alcohol,
tobacco, firearms, or explosives matters).



Sec. 8.25  Renewal of enrollment card.

    (a) Period of renewal. An enrolled practitioner may apply for
renewal of his or her enrollment card during a 12-month period prior to
the expiration of the enrollment card.
    (b) Application. Each enrolled practitioner applying for a renewal
of enrollment shall apply to the Director. The enrolled practitioner
shall include in the application all information required by Sec. 8.22
except information relating to technical qualifications unless the
enrolled practitioner is applying for enrollment in a subject area or
areas in which he or she was not previously qualified to practice.
    (c) Fee. Each application for renewal of enrollment will be
accompanied by a check or money order in the amount of $5, payable to
the Bureau of Alcohol, Tobacco and Firearms.

(Approved by the Office of Management and Budget under control number
1512-0418)

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[42 FR 33026, June 29, 1977, as amended at 49 FR 14944, Apr. 16, 1984]



Sec. 8.26  Change in enrollment.

    (a) Change in area of practice. At any time during a period of
enrollment, an enrolled practitioner may apply to practice in a subject
area or areas in which he or she was not previously qualified to
practice (alcohol, tobacco, firearms, or explosives matters).
    (b) Application. Each enrolled practitioner applying for a change in
enrollment shall apply to the Director. The enrolled practitioner shall
include in the application all information required by Sec. 8.22 but
shall include information relating to technical qualifications only in
those additional subject areas in which he or she is applying to
practice.
    (c) Fee. Each application for change in enrollment will be
accompanied by a check or money order in the amount of $5, payable to
the Bureau of Alcohol, Tobacco and Firearms.

(Approved by the Office of Management and Budget under control number
1512-0418)

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[42 FR 33026, June 29, 1977, as amended at 49 FR 14944, Apr. 16, 1984]



Sec. 8.27  Enrollment registers.

    The Director shall maintain, for public inspection, a register of
all persons enrolled to practice before the Bureau and the subject areas
in which each person is enrolled to practice, a register of all persons
disbarred or suspended from practice, and a register of all persons
whose applications for enrollment before the Bureau have been denied.

[[Page 117]]



Sec. 8.28  Termination of enrollment.

    (a) Attorneys, certified public accountants. The enrollment of a
practitioner to whom an enrollment card has been issued will terminate
when that person becomes eligible to practice without enrollment under
Sec. 8.2 (a) or (b), and that person shall surrender his or her
enrollment card to the Director for cancellation.
    (b) Expiration of enrollment. The enrollment of any person will
automatically terminate after the date indicated on the enrollment card
unless, during the 12-month period prior to the expiration date, that
person applies for renewal of enrollment with the Director as provided
in Sec. 8.25. In this case, the person may continue to practice before
the Bureau until his or her application has been finally determined.



Sec. 8.29  Limited practice without enrollment.

    (a) General. Individuals may appear on their own behalf and may
otherwise appear without enrollment, providing they present satisfactory
identification, in the following classes of cases:
    (1) An individual may represent another individual who is his or her
regular full-time employer, may represent a partnership of which he or
she is a member or a regular full-time employee, of may represent
without compensation a member of his or her immediate family.
    (2) Corporations (including parent corporations, subsidiaries or
affiliated corporations), trusts, estates, associations, or organized
groups may be represented by bona fide officers or regular full-time
employees.
    (3) Trusts, receiverships, guardianships, or estates may be
represented by their trustees, receivers, guardians, administrators,
executors, or their regular full-time employees.
    (4) Any government unit, agency, or authority may be represented by
an officer or regular employee in the course of his or her official
duties.
    (5) Unenrolled persons may participate in rulemaking as provided in
5 U.S.C. 553.
    (b) Special appearances. The Director, subject to conditions he or
she deems appropriate, may authorize any person to represent a party
without enrollment, for the purpose of a particular matter.



         Subpart D_Duties and Restrictions Relating to Practice



Sec. 8.31  Furnishing of information.

    (a) To the Bureau. No attorney, certified public accountant, or
enrolled practitioner may neglect or refuse promptly to submit records
or information in any matter before the Bureau, upon proper and lawful
request by an authorized officer or employee of the Bureau, or may
interfere, or attempt to interfere, with any proper and lawful effort by
the Bureau or its officers or employees, to obtain the requested record
or information, unless he or she believes in good faith and on
reasonable grounds that the record or information is privileged or that
the request for, or effort to obtain, that record or information is of
doubtful legality.
    (b) To the Director of Practice. It is the duty of an attorney or
certified public accountant, who practices before the Bureau, or
enrolled practitioner when requested by the Director of Practice, to
provide the Director of Practice with any information he or she may have
concerning violation of the regulations in this part by any person, and
to testify thereto in any proceeding instituted under this part for the
disbarment or suspension of an attorney, certified public accountant, or
enrolled practitioner, unless he or she believes in good faith and on
reasonable grounds that that information is privileged or that the
request is of doubtful legality.



Sec. 8.32  Prompt disposition of pending matters.

    No attorney, certified public accountant, or enrolled practitioner
may unreasonably delay the prompt disposition of any matter before the
Bureau.



Sec. 8.33  Accuracy.

    Each attorney, certified public accountant, and enrolled
practitioner shall exercise due diligence in:
    (a) Preparing or assisting in the preparation of, approving, and
filing returns, documents, affidavits, and other papers relating to
Bureau matters;

[[Page 118]]

    (b) Determining the correctness of any representations made by him
or her to the Bureau; and
    (c) Determining the correctness of any information which he or she
imparts to a client with reference to any matter administered by the
Bureau.



Sec. 8.34  Knowledge of client's omission.

    Each attorney, certified public accountant, or enrolled practitioner
who knows that a client has not complied with applicable law, or has
made an error in or omission from any document, affidavit, or other
paper which the law requires the client to execute, shall advise the
client promptly of the fact of such noncompliance, error, or omission.



Sec. 8.35  Assistance from disbarred or suspended persons and former
Treasury employees.

    No attorney, certified public accountant or enrolled practitioner
shall, in practice before the Bureau, knowingly and directly or
indirectly:
    (a) Employ or accept assistance from any person who is under
disbarment or suspension from practice before any agency of the Treasury
Department;
    (b) Accept employment as associate, correspondent, or subagent from,
or share fees with, any such person;
    (c) Accept assistance in a specific matter from any person who
participated personally and substantially in the matter as an employee
of the Treasury Department.

[44 FR 47059, Aug. 10, 1979]



Sec. 8.36  Practice by partners of Government employees.

    No partner of an officer or employee of the executive branch of the
U.S. Government, of any independent agency of the United States, or of
the District of Columbia, may represent anyone in any matter
administered by the Bureau in which the Government employee participates
or has participated personally and substantially as a Government
employee, or which is the subject of that employee's official
responsibility.



Sec. 8.37  Practice by former Government employees.

    (a) Violation of law. No former officer or employee of the U.S.
Government, of any independent agency of the United States, or of the
District of Columbia, may represent anyone in any matter administered by
the Bureau if the representation would violate any of the laws of the
United States.
    (b) Personal and substantial participation. No former officer or
employee of the executive branch of the U.S. Government, of any
independent agency of the United States, or of the District of Columbia,
may represent anyone with repect to any matter under the administration
of the Bureau, if he or she participated personally and substantially in
that matter as a Government employee.
    (c) Official responsibility. No former officer or employee of the
executive branch of the U.S. Government, of any indepenednt agency of
the United States, or of the District of Columbia, may within one year
after his or her employment has ceased, appear personally as a
practitioner before the Bureau with respect to any matter administered
by the Bureau if that representation involves a specific matter under
the former employee's official responsibility as a Government employee,
within a one-year period prior to the termination of that
responsibility.
    (d) Aid or assistance. No former officer or employee of the Bureau,
who is eligible to practice before the Bureau, may aid or assist any
person in the representation of a specific matter in which the former
officer or employee participated personally and substantially as an
officer or employee of the Bureau.

(18 U.S.C. 207)



Sec. 8.38  Notaries.

    No attorney, certified public accountant, or enrolled practitioner
may, with respect to any matter administered by the Bureau, take
acknowledgements, administer oaths, certify papers, or perform any
official act in connection with matters in which he or she is employed
as counsel, attorney, or practioner, or in which he or she

[[Page 119]]

may be in any way interested before the Bureau.

(26 Op. Atty. Gen. 236)



Sec. 8.39  Fees.

    No attorney, certified public accountant, or enrolled practitioner
may charge an unconscionable fee for representing a client in any matter
before the Bureau.



Sec. 8.40  Conflicting interests.

    No attorney, certified public accountant, or enrolled practitioner
may represent conflicting interests in practice before the Bureau,
except by express consent of all directly interested parties after full
disclosure has been made.



Sec. 8.41  Solicitation.

    (a) Advertising and solicitation restrictions. (1) No attorney,
certified public accountant or enrolled practitioner shall, with respect
to any Bureau matter, in any way use or participate in the use of any
form of public communication containing a false, fraudulent, misleading,
deceptive, unduly influencing, coercive or unfair statement or claim.
For the purposes of this subsection, the prohibition includes, but is
not limited to, statements pertaining to the quality of services
rendered unless subject to factual verification, claims of specialized
expertise not authorized by State or Federal agencies having
jurisdiction over the practitioner, and statements or suggestions that
the ingenuity and/or prior record of a representative rather than the
merit of the matter are principal factors likely to determine the result
of the matter.
    (2) No attorney, certified public accountant or enrolled
practitioner shall make, directly or indirectly, an uninvited
solicitation of employment, in matters related to the Bureau.
Solicitation includes, but is not limited to, in-person contacts,
telephone communications, and personal mailings directed to the specific
circumstances unique to the recipient. This restriction does not apply
to: (i) Seeking new business from an existing or former client in a
related matter; (ii) solicitation by mailings, the contents of which are
designed for the general public; or (iii) non-coercive in-person
solicitation by those eligible to practice before the Bureau while
acting as an employee, member, or officer of an exempt organization
listed in sections 501(c) (3) or (4) of the Internal Revenue Code of
1954 (26 U.S.C.).
    (b) Permissible advertising. (1) Attorneys, certified public
accountants and enrolled practitioners may publish, broadcast, or use in
a dignified manner through any means of communication set forth in
paragraph (d) of this section:
    (i) The name, address, telephone number, and office hours of the
practitioner or firm.
    (ii) The names of individuals associated with the firm.
    (iii) A factual description of the services offered.
    (iv) Acceptable credit cards and other credit arrangements.
    (v) Foreign language ability.
    (vi) Membership in pertinent, professional organizations.
    (vii) Pertinent professional licenses.
    (viii) A statement that an individual's or firm's practice is
limited to certain areas.
    (ix) In the case of an enrolled practitioner, the phrase ``enrolled
to practice before the Bureau of Alcohol, Tobacco and Firearms.''
    (x) Other facts relevant to the selection of a practitioner in
matters related to the Bureau which are not prohibited by these
regulations.
    (2) Attorneys, certified public accountants and enrolled
practitioners may use, to the extent they are consistent with the
regulations in this section, customary biographical insertions in
approved law lists and reputable professional journals and directories,
as well as professional cards, letterheads and announcements: Provided,
That (i) attorneys do not violate applicable standards of ethical
conduct adopted by the American Bar Association, (ii) certified public
accountants do not violate applicable standards of ethical conduct
adopted by the American Institute of Certified Public Accountants, and
(iii) enrolled practitioners do not violate applicable standards of
ethical conduct adopted by the

[[Page 120]]

National Society of Public Accountants.
    (c) Fee information. (1) Attorneys, certified public accountants and
enrolled practitioners may disseminate the following fee information:
    (i) Fixed fees for specific routine services.
    (ii) Hourly rates.
    (iii) Range of fees for particular services.
    (iv) Fee charged for an initial consultation.
    (2) Attorneys, certified public accountants and enrolled
practitioners may also publish the availability of a written schedule of
fees.
    (3) Attorneys, certified public accountants and enrolled
practitioners shall be bound to charge the hourly rate, the fixed fee
for specific routine services, the range of fees for particular
services, or the fee for an initial consultation published for a
reasonable period of time, but no less than thirty days from the last
publication of such hourly rate or fees.
    (d) Communications. Communications, including fee information, shall
be limited to professional lists, telephone directories, print media,
permissible mailings as provided in these regulations, radio and
television. In the case of radio and television broadcasting, the
broadcast shall be pre-recorded and the practitioner shall retain a
recording of the actual audio transmission.
    (e) Improper associations. An attorney, certified public accountant
or enrolled practitioner may, in matters related to the Bureau, employ
or accept employment or assistance as an associate, correspondent, or
subagent from, or share fees with, any person or entity who, to the
knowledge of the practitioner, obtains clients or otherwise practices in
a manner forbidden under this section: Provided, That an attorney,
certified public accountant or enrolled practitioner does not, directly
or indirectly, act or hold himself out as authorized to practice before
the Bureau in connection with that relationship. Nothing herein shall
prohibit an attorney, certified public accountant, or enrolled
practitioner from practice before the Bureau in a capacity other than
that described above.

[44 FR 47060, Aug. 10, 1979]



Sec. 8.42  Practice of law.

    Nothing in the regulations in this part may be construed as
authorizing persons not members of the bar to practice law.



                   Subpart E_Disciplinary Proceedings



Sec. 8.51  Authority to disbar or suspend.

    The Secretary, after due notice and opportunity for hearing, may
suspend or disbar from practice before the Bureau any attorney,
certified public accountant, or enrolled practitioner shown to be
incompetent, disreputable or who refuses to comply with the rules and
regulations in this part or who shall, with intent to defraud, in any
manner willfully and knowingly deceive, mislead, or threaten any client
or prospective client, by word, circular, letter, or by advertisement.

(Sec. 3, 23 Stat. 258 (31 U.S.C. 1026))



Sec. 8.52  Disreputable conduct.

    Disreputable conduct for which an attorney, certified public
accountant, or enrolled practitioner may be disbarred or suspended from
practice before the Bureau includes, but is not limited to:
    (a) Conviction of any criminal offense under the revenue laws of the
United States; under any other law of the United States which the Bureau
enforces pursuant to Treasury Department Order No. 221 (37 FR 11696)
effective July 1, 1972; or for any offense involving dishonesty or
breach of trust.
    (b) Giving false or misleading information, or participating in any
way in the giving of false or misleading information, to the Bureau or
any officer or employee thereof, or to any tribunal authorized to pass
upon matters administered by the Bureau in connection with any matter
pending or likely to be pending before them, knowing the information to
be false or misleading. Facts or other matters contained in testimony,
Federal tax returns, financial statements, applications for enrollment,
affidavits, declarations, or any other document or statement, written or
oral, are included in the term ``information''.

[[Page 121]]

    (c) Solicitation of employment as prohibited under Sec. 8.41, the
use of false or misleading representations with intent to deceive a
client or a prospective client in order to procure employment, or
intimating that the practitioner is able improperly to obtain special
consideration or action from the Bureau or an officer or employee
thereof.
    (d) Willfully failing to make a Federal tax return in violation of
the revenue laws of the United States, or evading, attempting to evade,
or participating in any way in evading or attempting to evade any
Federal tax or payment thereof; knowingly counseling or suggesting to a
client or prospective client an illegal plan to evade Federal taxes or
payment thereof, or concealing assets of himself or herself, or of
another in order to evade Federal taxes or payment thereof.
    (e) Misappropriation of, or failure properly and promptly to remit
funds received from a client for the purpose of payment of taxes or
other obligations due the United States.
    (f) Directly or indirectly attempting to influence, or offering or
agreeing to attempt to influence, the official action of any officer or
employee of the Bureau by the use of threats, false accusations, duress
or coercion, by the offer of any special inducement or promise of
advantage or by the bestowing of any gift, favor, or thing of value.
    (g) Disbarment or suspension from practice as an attorney or
certified public accountant by any duly constituted authority of any
State, possession, Commonwealth, the District of Columbia, or by any
Federal court of record.
    (h) Disbarment or suspension from practice as an attorney, certified
public accountant, or other person admitted to practice before the
Internal Revenue Service.
    (i) Knowingly aiding and abetting another person to practice before
the Bureau during a period of suspension, disbarment, or ineligibility
of the other person. Maintaining a partnership for the practice of law,
accountancy, or other related professional service with a person who is
under disbarment from practice before the Bureau or the Intenal Revenue
Service is presumed to be a violation of this provision.
    (j) Contemptuous conduct in connection with practice before the
Bureau, including the use of abusive language, making false accusations
and statements knowing them to be false, or circulating or publishing
malicious or libelous matter.
    (k) Willful violatin of any of the regulations contained in this
part.

[42 FR 33026, June 29, 1977; 42 FR 36455, July 15, 1977]



Sec. 8.53  Initiation of disciplinary proceedings.

    (a) Receipt of information. If an officer or employee of the Bureau
has reason to believe that an attorney, certified public accountant, or
enrolled practitioner has violated any of the provisions of this part or
engaged in any disreputable conduct as defined in Sec. 8.52, the
employee shall promptly make a report thereof which will be forwarded to
the Director of Practice. Any other person possessing information
concerning violations or disreputable conduct may make a report thereof
to the Director of Practice or to any officer or employee of the Bureau.
    (b) Institution of proceeding. When the Director of Practice has
reason to believe that any attorney, certified public accountant, or
enrolled practitioner has violated any provisions of the laws or
regulations governing practice before the Bureau, he or she may
reprimand the person or institute a proceeding for the disbarment or
suspension of that person. The proceeding will be instituted by a
complaint which names the respondent and is signed by the Director of
Practice and filed in his or her office. Except in cases of willfulness,
or when time, the nature of the proceeding, or the public interest does
not permit, the Director of Practice may not institute a proceeding
until he or she has called to the attention of the proposed respondent,
in writing, facts or conduct which warrant institution of a proceeding,
and has accorded the proposed respondent the opportuity to demonstrate
or achieve compliance with all lawful requirements.

[[Page 122]]



Sec. 8.54  Conferences.

    (a) General. The Director of Practice may confer with an attorney,
certified public accountant, or enrolled practioner concerning
allegations of misconduct whether or not a proceeding for disbarment or
suspension has been instituted. If a conference results in a stipulation
in connection with a proceeding in which that person is the respondent,
the stipulation may be entered in the record at the instance of either
party to the proceeding.
    (b) Resignation or voluntary suspension. An attorney, certified
public accountant, or enrolled practitioner, in order to avoid the
institution or conclusion of a disbarment or suspension proceeding, may
offer his or her consent to suspension from practice before the Bureau.
An enrolled practitioner may also offer a resignation. The Director of
Practice, at his or her discretion, may accept the offered resignation
of an enrolled practitioner and may suspend an attorney, certified
public accountant, or enrolled practitioner in accordance with the
consent offered.



Sec. 8.55  Contents of complaint.

    (a) Charges. A complaint will give a plain and concise description
of the allegations which constitute the basis for the proceeding. A
complaint will be deemed sufficient if it fairly informs the respondent
of the charges to that he or she is able to prepare a defense.
    (b) Demand for answer. The complaint will give notification of the
place and time prescribed for the filing of an answer by the respondent;
that time will be not less than 15 days from the date of service of the
complaint. Notice will be given that a decision by default may be
rendered against the respondent if the complaint is not answered as
required.



Sec. 8.56  Service of complaint and other papers.

    (a) Complaint. A copy of the complaint may be served upon the
respondent by certified mail or by first-class mail. The copy of the
complaint may be delivered to the respondent or the respondent's
attorney or agent of record either in person or by leaving it at the
office or place of business of the respondent, attorney or agent, or the
complaint may be delivered in any manner which has been agreed to by the
respondent. If the service is by certified mail, the post office receipt
signed by or on behalf of the respondent will be proof of service. If
the certified matter is not claimed or accepted by the respondent and is
returned undelivered, complete service may be made upon the respondent
by mailing the complaint to him or her by first-class mail, addressed to
the respondent at the address under which he or she is enrolled or at
the last address known to the Director of Practice. If service is made
upon the respondent or the respondent's attorney or agent in person, or
by leaving the complaint at the office or place of business of the
respondent, attorney or agent, the verified return by the person making
service, setting forth the manner of service, will be proof of service.
    (b) Service of other papers. Any paper other than the complaint may
be served upon an attorney, certified public accountant, or enrolled
practitioner as provided in paragraph (a) of this section, or by mailing
the paper by first-class mail to the respondent at the last address
known to the Director of Practice, or by mailing the paper by first-
class mail to the respondent's attorney or agent of record. This mailing
will constitute complete service. Notices may be served upon the
respondent or his attorney or agent by telegram.
    (c) Filing of papers. When the filing of a paper is required or
permitted in connection with a disbarment or suspension proceeding, and
the place of filing is not specified by this subpart or by rule or order
of the Administrative Law Judge, the papers will be filed with the
Director of Practice, Treasury Department, Washington, DC 20220. All
papers will be filed in duplicate.



Sec. 8.57  Answer.

    (a) Filing. The respondent shall file the answer in writing within
the time specified in the complaint or notice of institution of the
proceeding, unless on application the time is extended by the Director
of Practice or the Administrative Law Judge. The respondent shall file
the answer in duplicate with the director of Practice.

[[Page 123]]

    (b) Contents. The respondent shall include in the answer a statement
of facts which constitute the grounds of defense, and shall specifically
admit or deny each allegation set forth in the complaint, except that
the respondent shall not deny a material allegation in the complaint
which he or she knows to be true, or state that he or she is without
sufficient information to form a belief when in fact the respondent
possesses that information. The respondent may also state affirmatively
special matters of defense.
    (c) Failure to deny or answer allegations in the complaint. Every
allegation in the complaint which is not denied in the answer is deemed
to be admitted and may be considered as proven, and no further evidence
in respect of that allegation need be adduced at a hearing. Failure to
file an answer within the time prescribed in the notice to the
respondent, except as the time for answer is extended by the Director of
Practice or the Administrative Law Judge, will constitute an admission
of the allegations of the complaint and a waiver of hearing, and the
Administrative Law Judge may make a decision by default without a
hearing or further procedure.
    (d) Reply by Director of Practice. No reply to the respondent's
answer is required, and new matter in the answer will be deemed to be
denied, but the Director of Practice may file a reply at his or her
discretion or at the request of the Administrative Law Judge.



Sec. 8.58  Supplemental charges.

    If it appears that the respondent in his or her answer, falsely and
in bad faith, denies a material allegation of fact in the complaint or
states that the respondent has no knowledge sufficient to form a belief,
when he or she in fact possesses that information, or if it appears that
the respondent has knowingly introduced false testimony during
proceedings for his or her disbarment or suspension, the Director of
Practice may file supplemental charges against the respondent. These
supplemental charges may be tried with other charges in the case,
provided the respondent is given due notice and is afforded an
opportunity to prepare to a defense to them.



Sec. 8.59  Proof; variance; amendment of pleadings.

    In the case of a variance between the allegations in a pleading, the
Administrative Law Judge may order or authorize amendment of the
pleading to conform to the evidence. The party who would otherwise be
prejudiced by the amendment will be given reasonable opportunty to meet
the allegation of the pleading as amended, and the Administrative Law
Judge shall make findings on an issue presented by the pleadings as so
amended.



Sec. 8.60  Motions and requests.

    Motions and requests may be filed with the Director of Practice or
with the Administrative Law Judge.



Sec. 8.61  Representation.

    A respondent or proposed respondent may appear in person or be
represented by counsel or other representative who need not be enrolled
to practice before the Bureau. The Director of Practice may be
represented by an Attorney or other employee of the Treasury Department.



Sec. 8.62  Administrative Law Judge.

    (a) Appointment. An Administrative Law Judge, appointed as provided
by 5 U.S.C. 3105, shall conduct proceedings upon complaints for the
disbarment or suspension of attorneys, certified public accountants, or
enrolled practitioners.
    (b) Responsibilities. The Administrative Law Judge in connection
with any disbarment or suspension proceeding shall have authority to:
    (1) Administer oaths and affirmation;
    (2) Make rulings upon motions and requests; these rulings may not be
appealed prior to the close of the hearing except at the discretion of
the Administrative Law Judge in extraordinary circumstances;
    (3) Rule upon offers of proof, receive relevant evidence, and
examine witnesses;
    (4) Take or authorize to the taking of depositions;
    (5) Determine the time and place of hearing and regulate its course
and conduct;

[[Page 124]]

    (6) Hold or provide for the holding of conferences to settle or
simplify the issues by consent of the parties;
    (7) Receive and consider oral or written arguments on facts or law;
    (8) Make initial decisions;
    (9) Adopt rules of procedure and modify them from time to time as
occasion requires for the orderly disposition of proceedings; and
    (10) Perform acts and take measures as necessary to promote the
efficient conduct of any proceeding.



Sec. 8.63  Hearings.

    (a) Conduct. The Administrative Law Judge shall preside at the
hearing on a complaint for the disbarment or suspension of an attorney,
certified public accountant, or enrolled practitioner. Hearings will be
stenographically recorded and transcribed and the testimony of witnesses
will be received under oath or affirmation. The Administrative Law Judge
shall conduct hearings pursuant to 5 U.S.C. 556.
    (b) Failure to appear. If either party to the proceedings fails to
appear at the hearing, after due notice has been sent, the
Administrative Law Judge may deem them to have waived the right to a
hearing and may make a decision against the absent party by default.



Sec. 8.64  Evidence.

    (a) Rules of evidence. The rules of evidence prevailing in courts of
law and equity are not controlling in hearings. However, the
Administrative Law Judge shall exclude evidence which is irrelevant,
immaterial, or unduly repetitious.
    (b) Depositions. Depositions of witnesses taken pursuant to Sec.
8.65 may be admitted as evidence.
    (c) Government documents. Official documents, records, and papers of
the Bureau of Alcohol, Tobacco and Firearms and the Office of the
Director of Practice are admissible in evidence without the prouction of
an officer or employee to authenticate them. These documents, records
and papers may be evidenced by a copy attested or identified by an
officer or employee of the Bureau or the Treasury Department.
    (d) Exhibits. If any document, record, or other paper is introduced
in evidence as an exhibit, the Administrative Law Judge may authorize
the withdrawal of the exhibit subject to any conditions he or she deems
proper.
    (e) Objections. Objections to evidence will be in short form,
stating the grounds of objection and the record may not include
arguments thereon, except as ordered by the Administrative Law Judge.
Rulings on objections will be a part of the record. No exception to the
ruling is necessary to preserve the rights of the parties.



Sec. 8.65  Depositions.

    Depositions for use at a hearing may, with the written approval of
the Administrative Law Judge, be taken by either the Director of
Practice or the respondent or their authorized representatives.
Depositions may be taken upon oral or written questioning, upon not less
than 10 days' written notice to the other party before any officer
authorized to administer an oath for general purposes or before an
officer or employee of the Bureau authorized to administer an oath
pursuant to 27 CFR 70.35. The written notice will state the names of the
witnesses and the time and place where the depositions are to be taken.
The requirement of 10 days' notice may be waived by the parties in
writing, and depositions may then be taken from the persons and at the
times and places mutually agreed to by the parties. When a deposition is
taken upon written questioning, any cross-examination will be upon
written questioning. Copies of the written questioning will be served
upon the other party with the notice, and copies of any written cross-
interrogation will be mailed or delivered to the opposing party at least
5 days before the date of taking the depositions, unless the parties
mutually agree otherwise. A party on whose behalf a deposition is taken
must file it with the Administrative Law Judge and serve one copy upon
the opposing party. Expenses in the reproduction of depositions will be
borne by the party at whose instance the deposition is taken.



Sec. 8.66  Transcript.

    In cases in which the hearing is stenographically reported by a
Government contract reporter, copies of the

[[Page 125]]

transcript may be obtained from the reporter at rates not to exceed the
maximum rates fixed by contract between the Government and the reporter.
If the hearing is stenographically reported by a regular employee of the
Bureau, a copy of the hearing will be supplied to the respondent either
without charge or upon the payment of a reasonable fee. Copies of
exhibits introduced at the hearing or at the taking of depositions will
be supplied to the parties upon the payment of a reasonable fee.

(Sec. 501, Pub. L. 82-137, 65 Stat. 290 (31 U.S.C. 483a))



Sec. 8.67  Proposed findings and conclusions.

    Except in cases when the respondent has failed to answer the
complaint or when a party has failed to appear at the hearing, the
Administrative Law Judge, prior to making his or her decision, shall
afford the parties a reasonable opportunity to submit proposed findings
and conclusions and their supporting reasons.



Sec. 8.68  Decision of Administrative Law Judge.

    As soon as practicable after the conclusion of a hearing and the
receipt of any proposed findings and conclusions timely submitted by the
parties, the Administrative Law Judge shall make the initial decision in
the case. The decision will include (a) a statement of findings and
conclusions, as well as the reasons or basis therefor, upon all the
material issues of fact, law, or discretion presented on the record, and
(b) an order of disbarment, suspension, or reprimand or an order of
dismissal of the complaint. The Administrative Law Judge shall file the
decision with the Director of Practice and shall transmit a copy to the
respondent or the respondent's attorney of record. In the absence of an
appeal to the Secretary, or review of the decision upon motion of the
Secretary, the decision of the Administrative Law Judge will, without
further proceedings, become the decision of the Secretary of the
Treasury 30 days from the date of the Administrative Law Judge's
decision.



Sec. 8.69  Appeal to the Secretary.

    Within 30 days from the date of the Administrative Law Judge's
decision, either party may appeal to the Secretary. The appeal will be
filed with the Director of Practice in duplicate and will include
exceptions to the decision of the Administrative Law Judge and
supporting reasons for those exceptions. If the Director of Practice
files the appeal, he or she shall transmit a copy of it to the
respondent. Within 30 days after receipt of an appeal or copy thereof,
the other party may file a reply brief in duplicate with the Director of
Practice. If the Director of Practice files the reply brief, he or she
shall transmit a copy of it to the respondent. Upon the filing of an
appeal and a reply brief, if any, the Director of Practice shall
transmit the entire record to the Secretary.



Sec. 8.70  Decision of the Secretary.

    On appeal from or review of the intial decision of the
Administrative Law Judge, the Secretary shall make the agency decision.
In making this decision, the Secretary shall review the record or those
portions of the records as may be cited by the parties in order to limit
the issues. The Director of Prasctice shall transmit a copy of the
Secretary's decision to the respondent.



Sec. 8.71  Effect of disbarment or suspension.

    (a) Disbarment. If the final order against the respondent is for
disbarment, the respondent will not thereafter be permitted to practice
before the Bureau unless authorized to do so by the Director of Practice
pursuant to Sec. 8.72.
    (b) Suspension. If the final order against the respondent is for
suspension, the respondent will not thereafter be permitted to practice
before the Bureau during the period of suspension.
    (c) Surrender of enrollment card. If an enrolled practitioner is
disbarred or suspended, he or she shall surrender the enrollment card to
the Director of Practice for cancellation, in the case of disbarment, or
for retention during the period of suspension.
    (d) Notice of disbarment or suspension. Upon the issuance of a final
order for suspension or disbarment, the Director

[[Page 126]]

of Practice shall give notice of the order to appropriate officers and
employees of the Bureau of Alcohol, Tobacco and Firearms and to
interested departments and agencies of the Federal Government. The
Director of Practice may also give notice as he or she may determine to
the proper authorities of the State in which the disbarred or suspended
person was licensed to practice as an attorney or certified public
accountant.



Sec. 8.72  Petition for reinstatement.

    The Director of Practice may entertain a petition for reinstatement
from any person disbarred from practice before the Bureau after the
expiration of 5 years following disbarment. The director of Practice may
not grant reinstatement unless he or she is satisfied that the
petitioner is not likely to conduct himself or herself contrary to the
regulations in this part, and that granting reinstatement would not be
contrary to the public interest.



PART 9_EFFECTS OF IMPORTED ARTICLES ON THE NATIONAL SECURITY--Table of
Contents



Sec.
9.2 Definitions.
9.3 General.
9.4 Criteria for determining effects of imports on national security.
9.5 Applications for investigation.
9.6 Confidential information.
9.7 Conduct of investigation.
9.8 Emergency action.
9.9 Report.

    Authority: Sec. 232, as amended, 76 Stat. 877, 80 Stat. 369 (19
U.S.C. 1862); 5 U.S.C. 301; Reorg. Plan No. 1 of 1973; and E.O. 11725,
June 27, 1973 (38 FR 17175).



Sec. 9.2  Definitions.

    As used herein, Secretary means the Secretary of the Treasury and
Assistant Secretary means the Assistant Secretary of the Treasury
(Enforcement, Operations, and Tariff Affairs).

[40 FR 50717, Oct. 31, 1975]



Sec. 9.3  General.

    (a) Upon request of the head of any Government department or agency,
upon application of an interested party, or upon his own motion, the
Assistant Secretary shall set in motion an immediate investigation to
determine the effects on the national security of imports of any
article.
    (b) The Secretary shall report the findings of his investigation
under paragraph (a) of this section with respect to the effect of the
importation of such article in such quantities or under such
circumstances upon the national security and, based on such findings,
his recommendation for action or inaction to the President within one
year after receiving an application from an interested party or
otherwise beginning an investigation under this section.

[39 FR 10898, Mar. 22, 1974, as amended at 40 FR 50717, Oct. 31, 1975]



Sec. 9.4  Criteria for determining effects of imports on national security.

    (a) In determining the effect on the national security of imports of
the article which is the subject of the investigation, the Secretary is
required to take into consideration the following:
    (1) Domestic production needed for projected national defense
requirements including restoration and rehabilitation.
    (2) The capacity of domestic industries to meet such projected
requirements, including existing and anticipated availabilities of:
    (i) Human resources.
    (ii) Products.
    (iii) Raw materials.
    (iv) Production equipment and facilities.
    (v) Other supplies and services essential to the national defense.
    (3) The requirement of growth of such industries and such supplies
and services including the investment, exploration and development
necessary to assure capacity to meet projected defense requirements.
    (4) The effect which the quantities, availabilities, character and
uses of imported goods have or will have on such industries and the
capacity of the United States to meet national security requirements.
    (5) The economic welfare of the Nation as it is related to our
national security, including the impact of foreign competition on the
economic welfare of

[[Page 127]]

individual domestic industries. In determining whether such impact may
impair the national security, any substantial unemployment, decrease in
revenues of government, loss of skills or investment, or other serious
effects shall be considered.
    (b) The Secretary shall also consider other relevant factors in
determining whether the national security is affected by imports of the
article.

[39 FR 10898, Mar. 22, 1974]



Sec. 9.5  Applications for investigation.

    (a) Applications shall be in writing. Twenty-five copies shall be
filed by mail with the Assistant Secretary (Enforcement, Operations, and
Tariff Affairs), Department of the Treasury, Washington, DC 20220.
    (b) Applications shall describe how the quantities or circumstances
of imports of the particular article affect the national security and
shall contain the following information:
    (1) Identification of the person, partnership, association,
corporation, or other entity on whose behalf the application is filed.
    (2) A precise description of the article.
    (3) Description of the applicant and the domestic industry
concerned, including pertinent information regarding companies and their
plants, locations, capacity and current output of the domestic industry
concerned with the article in question.
    (4) Pertinent statistics showing the quantities and values of both
imports and production in the United States.
    (5) Nature, sources, and degree of the competition created by
imports of the article in question.
    (6) The effect, if any, of imports of the article in question upon
the restoration of domestic production capacity in an emergency.
    (7) Employment and special skills involved in the domestic
production of the article.
    (8) Extent to which investment and specialized productive capacity
is or will be adversely affected.
    (9) Revenues of Federal, State, or local Governments which are or
may be affected by the volume or circumstances of imports of the
article.
    (10) Defense or defense supporting uses of the article including
data on defense contracts or sub-contracts, both past and current.
    (c) Statistical material presented should be on a calendar-year
basis for sufficient periods of time to indicate trends and afford the
greatest possible assistance to the Assistant Secretary. Monthly or
quarterly data for the latest complete years should be included as well
as any other breakdowns which may be pertinent to show seasonal or
short-term factors.

[39 FR 10898, Mar. 22, 1974, as amended at 40 FR 50717, Oct. 31, 1975]



Sec. 9.6  Confidential information.

    Information submitted in confidence which the Assistant Secretary
determines would disclose trade secrets and commercial or financial
information obtained from a person and privileged, within the meaning of
5 U.S.C. 552 and 31 CFR part 1, will be accorded confidential treatment.
All information submitted in confidence must be on separate pages marked
``Business Confidential.''

[40 FR 50717, Oct. 31, 1975]



Sec. 9.7  Conduct of investigation.

    (a) The investigation by the Assistant Secretary or by such official
or agency as he may designate, shall be such as to enable the Secretary
to arrive at a fully informed opinion as to the effect on the national
security of imports of the article in question.
    (b) If the Assistant Secretary determines that it is appropriate to
hold public hearings or otherwise afford interested parties an
opportunity to present information and advice relevant to an
investigation, he shall issue a public notice which shall be published
in the Federal Register. Such notice shall include a statement of the
time, place and nature of any public hearing or shall solicit from any
interested party written comments, opinions, or data relative to the
investigation, to be submitted to the Assistant Secretary within the
time period specified in the notice. Rebuttal to material so submitted
may be filed with the Assistant Secretary within such

[[Page 128]]

time as is specified in the public notice. All data, comments and
opinions shall be submitted with 25 copies.
    (c) All applications filed and all comments, opinions, and data
submitted pursuant to paragraph (b) of this section, except information
determined to be confidential as provided in Sec. 9.6, will be
available for inspection and copying at the Office of the Assistant
Secretary (Enforcement, Operations, and Tariff Affairs), Department of
the Treasury, in Washington, DC. The Assistant Secretary will maintain a
roster of persons who have submitted materials.
    (d) The Assistant Secretary or his designee may also request further
data from other sources through the use of questionnaires,
correspondence, or other means.
    (e) The Assistant Secretary or his delegate shall, in the course of
the investigation, seek information or advice from, and consult with,
the Secretary of Defense, the Secretary of Commerce, or their delegates,
and any other appropriate officer of the United States as the Assistant
Secretary shall determine.
    (f) In addition, the Assistant Secretary, or his designee, may, when
he deems it appropriate, hold public hearings to elicit further
information. If a hearing is held:
    (1) The time and place thereof will be published in the Federal
Register.
    (2) It will be conducted by the Assistant Secretary or his designee,
and the full record will be considered by the Secretary in arriving at
his determination.
    (3) Interested parties may appear, either in person or by
representation, and produce oral or written evidence relevant and
material to the subject matter of the investigation.
    (4) After a witness has testified the Assistant Secretary or his
designee may question the witness. Questions submitted to the Assistant
Secretary or his designee in writing by any interested party may, at the
discretion of the Assistant Secretary or his designee, be posed to the
witness for reply for the purpose of assisting the Assistant Secretary
in obtaining the material facts with respect to the subject matter of
the investigation.
    (5) The hearing will be stenographically reported. The Assistant
Secretary will not cause transcripts of the record of the hearing to be
distributed to the interested parties, but a transcript may be inspected
at the Office of the Assistant Secretary (Enforcement, Operations, and
Tariff Affairs), Department of the Treasury, in Washington, DC, or
purchased from the reporter.

[39 FR 10898, Mar. 22, 1974, as amended at 40 FR 50717, Oct. 31, 1975]



Sec. 9.8  Emergency action.

    In emergency situations or when in his judgment national security
interests require it, the Secretary may vary or dispense with any of the
procedures set forth above and may formulate his views without following
such procedures.

[39 FR 10898, Mar. 22, 1974]



Sec. 9.9  Report.

    A report will be made and published in the Federal Register upon the
disposition of each request, application or motion under Sec. 9.3.
Copies of the report will be available at the Office of the Assistant
Secretary (Enforcement, Operations, and Tariff Affairs), Department of
the Treasury.

[40 FR 50718, Oct. 31, 1975]



PART 10_PRACTICE BEFORE THE INTERNAL REVENUE SERVICE--Table of Contents



Sec.
10.0 Scope of part.

             Subpart A_Rules Governing Authority to Practice

10.1 Offices.
10.2 Definitions.
10.3 Who may practice.
10.4 Eligibility to become an enrolled agent, enrolled retirement plan
          agent, or registered tax return preparer.
10.5 Application to become an enrolled agent, enrolled retirement plan
          agent, or registered tax return preparer.
10.6 Term and renewal of status as an enrolled agent, enrolled
          retirement plan agent, or registered tax return preparer.
10.7 Representing oneself; participating in rulemaking; limited
          practice; and special appearances.
10.8 Return preparation and application of rules to other individuals.

[[Page 129]]

10.9 Continuing education providers and continuing education programs.

   Subpart B_Duties and Restrictions Relating to Practice Before the
                        Internal Revenue Service

10.20 Information to be furnished.
10.21 Knowledge of client's omission.
10.22 Diligence as to accuracy.
10.23 Prompt disposition of pending matters.
10.24 Assistance from or to disbarred or suspended persons and former
          Internal Revenue Service employees.
10.25 Practice by former government employees, their partners and their
          associates.
10.26 Notaries.
10.27 Fees.
10.28 Return of client's records.
10.29 Conflicting interests.
10.30 Solicitation.
10.31 Negotiation of taxpayer checks.
10.32 Practice of law.
10.33 Best practices for tax advisors.
10.34 Standards with respect to tax returns and documents, affidavits
          and other papers.
10.35 Competence.
10.36 Procedures to ensure compliance.
10.37 Requirements for written advice.
10.38 Establishment of advisory committees.

          Subpart C_Sanctions for Violation of the Regulations

10.50 Sanctions.
10.51 Incompetence and disreputable conduct.
10.52 Violations subject to sanction.
10.53 Receipt of information concerning practitioner.

         Subpart D_Rules Applicable to Disciplinary Proceedings

10.60 Institution of proceeding.
10.61 Conferences.
10.62 Contents of complaint.
10.63 Service of complaint; service of other papers; service of evidence
          in support of complaint; filing of papers.
10.64 Answer; default.
10.65 Supplemental charges.
10.66 Reply to answer.
10.67 Proof; variance; amendment of pleadings.
10.68 Motions and requests.
10.69 Representation; ex parte communication.
10.70 Administrative Law Judge.
10.71 Discovery.
10.72 Hearings.
10.73 Evidence.
10.74 Transcript.
10.75 Proposed findings and conclusions.
10.76 Decision of Administrative Law Judge.
10.77 Appeal of decision of Administrative Law Judge.
10.78 Decision on review.
10.79 Effect of disbarment, suspension, or censure.
10.80 Notice of disbarment, suspension, censure, or disqualification.
10.81 Petition for reinstatement.
10.82 Expedited suspension.

                      Subpart E_General Provisions

10.90 Records.
10.91 Saving provision.
10.92 Special orders.
10.93 Effective date.

    Authority: Sec. 3, 23 Stat. 258, secs. 2-12, 60 Stat. 237 et seq.; 5
U.S.C. 301, 500, 551-559; 31 U.S.C. 321; 31 U.S.C. 330; Reorg. Plan No.
26 of 1950, 15 FR 4935, 64 Stat. 1280, 3 CFR, 1949-1953 Comp., p. 1017.

    Source: Department Circular 230, Revised, 31 FR 10773, Aug. 13,
1966, unless otherwise noted.

    Editorial Note: Nomenclature changes to part 10 appear by T.D. 9359,
72 FR 54544, Sept. 26, 2007.



Sec. 10.0  Scope of part.

    (a) This part contains rules governing the recognition of attorneys,
certified public accountants, enrolled agents, enrolled retirement plan
agents, registered tax return preparers, and other persons representing
taxpayers before the Internal Revenue Service. Subpart A of this part
sets forth rules relating to the authority to practice before the
Internal Revenue Service; subpart B of this part prescribes the duties
and restrictions relating to such practice; subpart C of this part
prescribes the sanctions for violating the regulations; subpart D of
this part contains the rules applicable to disciplinary proceedings; and
subpart E of this part contains general provisions relating to the
availability of official records.
    (b) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9527, 76 FR 32300, June 3, 2011]

[[Page 130]]



             Subpart A_Rules Governing Authority to Practice

    Source: T.D. 9011, 67 FR 48765, July 26, 2002, unless otherwise
noted.



Sec. 10.1  Offices.

    (a) Establishment of office(s). The Commissioner shall establish the
Office of Professional Responsibility and any other office(s) within the
Internal Revenue Service necessary to administer and enforce this part.
The Commissioner shall appoint the Director of the Office of
Professional Responsibility and any other Internal Revenue official(s)
to manage and direct any office(s) established to administer or enforce
this part. Offices established under this part include, but are not
limited to:
    (1) The Office of Professional Responsibility, which shall generally
have responsibility for matters related to practitioner conduct and
shall have exclusive responsibility for discipline, including
disciplinary proceedings and sanctions; and
    (2) An office with responsibility for matters related to authority
to practice before the Internal Revenue Service, including acting on
applications for enrollment to practice before the Internal Revenue
Service and administering competency testing and continuing education.
    (b) Officers and employees within any office established under this
part may perform acts necessary or appropriate to carry out the
responsibilities of their office(s) under this part or as otherwise
prescribed by the Commissioner.
    (c) Acting. The Commissioner will designate an officer or employee
of the Internal Revenue Service to perform the duties of an individual
appointed under paragraph (a) of this section in the absence of that
officer or employee or during a vacancy in that office.
    (d) Effective/applicability date. This section is applicable
beginning August 2, 2011, except that paragraph (a)(1) is applicable
beginning June 12, 2014.

[T.D. 9527, 76 FR 32300, June 3, 2011, as amended by T.D. 9668, 79 FR
33692, June 12, 2014]



Sec. 10.2  Definitions.

    (a) As used in this part, except where the text provides otherwise--
    (1) Attorney means any person who is a member in good standing of
the bar of the highest court of any state, territory, or possession of
the United States, including a Commonwealth, or the District of
Columbia.
    (2) Certified public accountant means any person who is duly
qualified to practice as a certified public accountant in any state,
territory, or possession of the United States, including a Commonwealth,
or the District of Columbia.
    (3) Commissioner refers to the Commissioner of Internal Revenue.
    (4) Practice before the Internal Revenue Service comprehends all
matters connected with a presentation to the Internal Revenue Service or
any of its officers or employees relating to a taxpayer's rights,
privileges, or liabilities under laws or regulations administered by the
Internal Revenue Service. Such presentations include, but are not
limited to, preparing documents; filing documents; corresponding and
communicating with the Internal Revenue Service; rendering written
advice with respect to any entity, transaction, plan or arrangement, or
other plan or arrangement having a potential for tax avoidance or
evasion; and representing a client at conferences, hearings, and
meetings.
    (5) Practitioner means any individual described in paragraphs (a),
(b), (c), (d), (e), or (f) of Sec. 10.3.
    (6) A tax return includes an amended tax return and a claim for
refund.
    (7) Service means the Internal Revenue Service.
    (8) Tax return preparer means any individual within the meaning of
section 7701(a)(36) and 26 CFR 301.7701-15.
    (b) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9359, 72 FR 54544, Sept. 26, 2007, as amended by T.D. 9527, 76 FR
32300, June 3, 2011]



Sec. 10.3  Who may practice.

    (a) Attorneys. Any attorney who is not currently under suspension or
disbarment from practice before the Internal Revenue Service may
practice

[[Page 131]]

before the Internal Revenue Service by filing with the Internal Revenue
Service a written declaration that the attorney is currently qualified
as an attorney and is authorized to represent the party or parties.
Notwithstanding the preceding sentence, attorneys who are not currently
under suspension or disbarment from practice before the Internal Revenue
Service are not required to file a written declaration with the IRS
before rendering written advice covered under Sec. 10.37, but their
rendering of this advice is practice before the Internal Revenue
Service.
    (b) Certified public accountants. Any certified public accountant
who is not currently under suspension or disbarment from practice before
the Internal Revenue Service may practice before the Internal Revenue
Service by filing with the Internal Revenue Service a written
declaration that the certified public accountant is currently qualified
as a certified public accountant and is authorized to represent the
party or parties. Notwithstanding the preceding sentence, certified
public accountants who are not currently under suspension or disbarment
from practice before the Internal Revenue Service are not required to
file a written declaration with the IRS before rendering written advice
covered under Sec. 10.37, but their rendering of this advice is
practice before the Internal Revenue Service.
    (c) Enrolled agents. Any individual enrolled as an agent pursuant to
this part who is not currently under suspension or disbarment from
practice before the Internal Revenue Service may practice before the
Internal Revenue Service.
    (d) Enrolled actuaries. (1) Any individual who is enrolled as an
actuary by the Joint Board for the Enrollment of Actuaries pursuant to
29 U.S.C. 1242 who is not currently under suspension or disbarment from
practice before the Internal Revenue Service may practice before the
Internal Revenue Service by filing with the Internal Revenue Service a
written declaration stating that he or she is currently qualified as an
enrolled actuary and is authorized to represent the party or parties on
whose behalf he or she acts.
    (2) Practice as an enrolled actuary is limited to representation
with respect to issues involving the following statutory provisions in
title 26 of the United States Code: sections 401 (relating to
qualification of employee plans), 403(a) (relating to whether an annuity
plan meets the requirements of section 404(a)(2)), 404 (relating to
deductibility of employer contributions), 405 (relating to qualification
of bond purchase plans), 412 (relating to funding requirements for
certain employee plans), 413 (relating to application of qualification
requirements to collectively bargained plans and to plans maintained by
more than one employer), 414 (relating to definitions and special rules
with respect to the employee plan area), 419 (relating to treatment of
funded welfare benefits), 419A (relating to qualified asset accounts),
420 (relating to transfers of excess pension assets to retiree health
accounts), 4971 (relating to excise taxes payable as a result of an
accumulated funding deficiency under section 412), 4972 (relating to tax
on nondeductible contributions to qualified employer plans), 4976
(relating to taxes with respect to funded welfare benefit plans), 4980
(relating to tax on reversion of qualified plan assets to employer),
6057 (relating to annual registration of plans), 6058 (relating to
information required in connection with certain plans of deferred
compensation), 6059 (relating to periodic report of actuary), 6652(e)
(relating to the failure to file annual registration and other
notifications by pension plan), 6652(f) (relating to the failure to file
information required in connection with certain plans of deferred
compensation), 6692 (relating to the failure to file actuarial report),
7805(b) (relating to the extent to which an Internal Revenue Service
ruling or determination letter coming under the statutory provisions
listed here will be applied without retroactive effect); and 29 U.S.C.
1083 (relating to the waiver of funding for nonqualified plans).
    (3) An individual who practices before the Internal Revenue Service
pursuant to paragraph (d)(1) of this section is subject to the
provisions of this part in the same manner as attorneys, certified
public accountants, enrolled agents, enrolled retirement plan agents,
and registered tax return preparers.

[[Page 132]]

    (e) Enrolled Retirement Plan Agents--(1) Any individual enrolled as
a retirement plan agent pursuant to this part who is not currently under
suspension or disbarment from practice before the Internal Revenue
Service may practice before the Internal Revenue Service.
    (2) Practice as an enrolled retirement plan agent is limited to
representation with respect to issues involving the following programs:
Employee Plans Determination Letter program; Employee Plans Compliance
Resolution System; and Employee Plans Master and Prototype and Volume
Submitter program. In addition, enrolled retirement plan agents are
generally permitted to represent taxpayers with respect to IRS forms
under the 5300 and 5500 series which are filed by retirement plans and
plan sponsors, but not with respect to actuarial forms or schedules.
    (3) An individual who practices before the Internal Revenue Service
pursuant to paragraph (e)(1) of this section is subject to the
provisions of this part in the same manner as attorneys, certified
public accountants, enrolled agents, enrolled actuaries, and registered
tax return preparers.
    (f) Registered tax return preparers. (1) Any individual who is
designated as a registered tax return preparer pursuant to Sec. 10.4(c)
of this part who is not currently under suspension or disbarment from
practice before the Internal Revenue Service may practice before the
Internal Revenue Service.
    (2) Practice as a registered tax return preparer is limited to
preparing and signing tax returns and claims for refund, and other
documents for submission to the Internal Revenue Service. A registered
tax return preparer may prepare all or substantially all of a tax return
or claim for refund of tax. The Internal Revenue Service will prescribe
by forms, instructions, or other appropriate guidance the tax returns
and claims for refund that a registered tax return preparer may prepare
and sign.
    (3) A registered tax return preparer may represent taxpayers before
revenue agents, customer service representatives, or similar officers
and employees of the Internal Revenue Service (including the Taxpayer
Advocate Service) during an examination if the registered tax return
preparer signed the tax return or claim for refund for the taxable year
or period under examination. Unless otherwise prescribed by regulation
or notice, this right does not permit such individual to represent the
taxpayer, regardless of the circumstances requiring representation,
before appeals officers, revenue officers, Counsel or similar officers
or employees of the Internal Revenue Service or the Treasury Department.
A registered tax return preparer's authorization to practice under this
part also does not include the authority to provide tax advice to a
client or another person except as necessary to prepare a tax return,
claim for refund, or other document intended to be submitted to the
Internal Revenue Service.
    (4) An individual who practices before the Internal Revenue Service
pursuant to paragraph (f)(1) of this section is subject to the
provisions of this part in the same manner as attorneys, certified
public accountants, enrolled agents, enrolled retirement plan agents,
and enrolled actuaries.
    (g) Others. Any individual qualifying under Sec. 10.5(e) or Sec.
10.7 is eligible to practice before the Internal Revenue Service to the
extent provided in those sections.
    (h) Government officers and employees, and others. An individual,
who is an officer or employee of the executive, legislative, or judicial
branch of the United States Government; an officer or employee of the
District of Columbia; a Member of Congress; or a Resident Commissioner
may not practice before the Internal Revenue Service if such practice
violates 18 U.S.C. 203 or 205.
    (i) State officers and employees. No officer or employee of any
State, or subdivision of any State, whose duties require him or her to
pass upon, investigate, or deal with tax matters for such State or
subdivision, may practice before the Internal Revenue Service, if such
employment may disclose facts or information applicable to Federal tax
matters.
    (j) Effective/applicability date. Paragraphs (a), (b), and (g) of
this section are applicable beginning June 12, 2014. Paragraphs (c)
through (f), (h), and (i)

[[Page 133]]

of this section are applicable beginning August 2, 2011.

[T.D. 9011, 67FR 48765, July 26, 2002, as amended by T.D. 9359, 72 FR
54545, Sept. 26, 2007; T.D. 9527, 76 FR 32300, June 3, 2011; T.D. 9668,
79 FR 33693, June 12, 2014]



Sec. 10.4  Eligibility to become an enrolled agent, enrolled retirement
plan agent, or registered tax return preparer.

    (a) Enrollment as an enrolled agent upon examination. The
Commissioner, or delegate, will grant enrollment as an enrolled agent to
an applicant eighteen years of age or older who demonstrates special
competence in tax matters by written examination administered by, or
administered under the oversight of, the Internal Revenue Service, who
possesses a current or otherwise valid preparer tax identification
number or other prescribed identifying number, and who has not engaged
in any conduct that would justify the suspension or disbarment of any
practitioner under the provisions of this part.
    (b) Enrollment as a retirement plan agent upon examination. The
Commissioner, or delegate, will grant enrollment as an enrolled
retirement plan agent to an applicant eighteen years of age or older who
demonstrates special competence in qualified retirement plan matters by
written examination administered by, or administered under the oversight
of, the Internal Revenue Service, who possesses a current or otherwise
valid preparer tax identification number or other prescribed identifying
number, and who has not engaged in any conduct that would justify the
suspension or disbarment of any practitioner under the provisions of
this part.
    (c) Designation as a registered tax return preparer. The
Commissioner, or delegate, may designate an individual eighteen years of
age or older as a registered tax return preparer provided an applicant
demonstrates competence in Federal tax return preparation matters by
written examination administered by, or administered under the oversight
of, the Internal Revenue Service, or otherwise meets the requisite
standards prescribed by the Internal Revenue Service, possesses a
current or otherwise valid preparer tax identification number or other
prescribed identifying number, and has not engaged in any conduct that
would justify the suspension or disbarment of any practitioner under the
provisions of this part.
    (d) Enrollment of former Internal Revenue Service employees. The
Commissioner, or delegate, may grant enrollment as an enrolled agent or
enrolled retirement plan agent to an applicant who, by virtue of past
service and technical experience in the Internal Revenue Service, has
qualified for such enrollment and who has not engaged in any conduct
that would justify the suspension or disbarment of any practitioner
under the provisions of this part, under the following circumstances:
    (1) The former employee applies for enrollment on an Internal
Revenue Service form and supplies the information requested on the form
and such other information regarding the experience and training of the
applicant as may be relevant.
    (2) The appropriate office of the Internal Revenue Service provides
a detailed report of the nature and rating of the applicant's work while
employed by the Internal Revenue Service and a recommendation whether
such employment qualifies the applicant technically or otherwise for the
desired authorization.
    (3) Enrollment as an enrolled agent based on an applicant's former
employment with the Internal Revenue Service may be of unlimited scope
or it may be limited to permit the presentation of matters only of the
particular specialty or only before the particular unit or division of
the Internal Revenue Service for which the applicant's former employment
has qualified the applicant. Enrollment as an enrolled retirement plan
agent based on an applicant's former employment with the Internal
Revenue Service will be limited to permit the presentation of matters
only with respect to qualified retirement plan matters.
    (4) Application for enrollment as an enrolled agent or enrolled
retirement plan agent based on an applicant's former employment with the
Internal Revenue Service must be made within

[[Page 134]]

three years from the date of separation from such employment.
    (5) An applicant for enrollment as an enrolled agent who is
requesting such enrollment based on former employment with the Internal
Revenue Service must have had a minimum of five years continuous
employment with the Internal Revenue Service during which the applicant
must have been regularly engaged in applying and interpreting the
provisions of the Internal Revenue Code and the regulations relating to
income, estate, gift, employment, or excise taxes.
    (6) An applicant for enrollment as an enrolled retirement plan agent
who is requesting such enrollment based on former employment with the
Internal Revenue Service must have had a minimum of five years
continuous employment with the Internal Revenue Service during which the
applicant must have been regularly engaged in applying and interpreting
the provisions of the Internal Revenue Code and the regulations relating
to qualified retirement plan matters.
    (7) For the purposes of paragraphs (d)(5) and (6) of this section,
an aggregate of 10 or more years of employment in positions involving
the application and interpretation of the provisions of the Internal
Revenue Code, at least three of which occurred within the five years
preceding the date of application, is the equivalent of five years
continuous employment.
    (e) Natural persons. Enrollment or authorization to practice may be
granted only to natural persons.
    (f) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9527, 76 FR 32301, June 3, 2011]



Sec. 10.5  Application to become an enrolled agent, enrolled retirement
plan agent, or registered tax return preparer.

    (a) Form; address. An applicant to become an enrolled agent,
enrolled retirement plan agent, or registered tax return preparer must
apply as required by forms or procedures established and published by
the Internal Revenue Service, including proper execution of required
forms under oath or affirmation. The address on the application will be
the address under which a successful applicant is enrolled or registered
and is the address to which all correspondence concerning enrollment or
registration will be sent.
    (b) Fee. A reasonable nonrefundable fee may be charged for each
application to become an enrolled agent, enrolled retirement plan agent,
or registered tax return preparer. See 26 CFR part 300.
    (c) Additional information; examination. The Internal Revenue
Service may require the applicant, as a condition to consideration of an
application, to file additional information and to submit to any written
or oral examination under oath or otherwise. Upon the applicant's
written request, the Internal Revenue Service will afford the applicant
the opportunity to be heard with respect to the application.
    (d) Compliance and suitability checks. (1) As a condition to
consideration of an application, the Internal Revenue Service may
conduct a Federal tax compliance check and suitability check. The tax
compliance check will be limited to an inquiry regarding whether an
applicant has filed all required individual or business tax returns and
whether the applicant has failed to pay, or make proper arrangements
with the Internal Revenue Service for payment of, any Federal tax debts.
The suitability check will be limited to an inquiry regarding whether an
applicant has engaged in any conduct that would justify suspension or
disbarment of any practitioner under the provisions of this part on the
date the application is submitted, including whether the applicant has
engaged in disreputable conduct as defined in Sec. 10.51. The
application will be denied only if the results of the compliance or
suitability check are sufficient to establish that the practitioner
engaged in conduct subject to sanctions under Sec. Sec. 10.51 and
10.52.
    (2) If the applicant does not pass the tax compliance or suitability
check, the applicant will not be issued an enrollment or registration
card or certificate pursuant to Sec. 10.6(b) of this part. An applicant
who is initially denied enrollment or registration for failure to

[[Page 135]]

pass a tax compliance check may reapply after the initial denial if the
applicant becomes current with respect to the applicant's tax
liabilities.
    (e) Temporary recognition. On receipt of a properly executed
application, the Commissioner, or delegate, may grant the applicant
temporary recognition to practice pending a determination as to whether
status as an enrolled agent, enrolled retirement plan agent, or
registered tax return preparer should be granted. Temporary recognition
will be granted only in unusual circumstances and it will not be
granted, in any circumstance, if the application is not regular on its
face, if the information stated in the application, if true, is not
sufficient to warrant granting the application to practice, or the
Commissioner, or delegate, has information indicating that the
statements in the application are untrue or that the applicant would not
otherwise qualify to become an enrolled agent, enrolled retirement plan
agent, or registered tax return preparer. Issuance of temporary
recognition does not constitute either a designation or a finding of
eligibility as an enrolled agent, enrolled retirement plan agent, or
registered tax return preparer, and the temporary recognition may be
withdrawn at any time.
    (f) Protest of application denial. The applicant will be informed in
writing as to the reason(s) for any denial of an application. The
applicant may, within 30 days after receipt of the notice of denial of
the application, file a written protest of the denial as prescribed by
the Internal Revenue Service in forms, guidance, or other appropriate
guidance. A protest under this section is not governed by subpart D of
this part.
    (g) Effective/applicability date. This section is applicable to
applications received on or after August 2, 2011.

[T.D. 9527, 63 FR 32302, June 3, 2011, as amended at 76 FR 49650, Aug.
11, 2011]



Sec. 10.6  Term and renewal of status as an enrolled agent, enrolled
retirement plan agent, or registered tax return preparer.

    (a) Term. Each individual authorized to practice before the Internal
Revenue Service as an enrolled agent, enrolled retirement plan agent, or
registered tax return preparer will be accorded active enrollment or
registration status subject to renewal of enrollment or registration as
provided in this part.
    (b) Enrollment or registration card or certificate. The Internal
Revenue Service will issue an enrollment or registration card or
certificate to each individual whose application to practice before the
Internal Revenue Service is approved. Each card or certificate will be
valid for the period stated on the card or certificate. An enrolled
agent, enrolled retirement plan agent, or registered tax return preparer
may not practice before the Internal Revenue Service if the card or
certificate is not current or otherwise valid. The card or certificate
is in addition to any notification that may be provided to each
individual who obtains a preparer tax identification number.
    (c) Change of address. An enrolled agent, enrolled retirement plan
agent, or registered tax return preparer must send notification of any
change of address to the address specified by the Internal Revenue
Service within 60 days of the change of address. This notification must
include the enrolled agent's, enrolled retirement plan agent's, or
registered tax return preparer's name, prior address, new address, tax
identification number(s) (including preparer tax identification number),
and the date the change of address is effective. Unless this
notification is sent, the address for purposes of any correspondence
from the appropriate Internal Revenue Service office responsible for
administering this part shall be the address reflected on the
practitioner's most recent application for enrollment or registration,
or application for renewal of enrollment or registration. A
practitioner's change of address notification under this part will not
constitute a change of the practitioner's last known address for
purposes of section 6212 of the Internal Revenue Code and regulations
thereunder.
    (d) Renewal--(1) In general. Enrolled agents, enrolled retirement
plan agents, and registered tax return preparers must renew their status
with the Internal Revenue Service to maintain eligibility to practice
before the Internal Revenue Service. Failure to receive notification
from the Internal

[[Page 136]]

Revenue Service of the renewal requirement will not be justification for
the individual's failure to satisfy this requirement.
    (2) Renewal period for enrolled agents. (i) All enrolled agents must
renew their preparer tax identification number as prescribed by forms,
instructions, or other appropriate guidance.
    (ii) Enrolled agents who have a Social Security number or tax
identification number that ends with the numbers 0, 1, 2, or 3, except
for those individuals who received their initial enrollment after
November 1, 2003, must apply for renewal between November 1, 2003, and
January 31, 2004. The renewal will be effective April 1, 2004.
    (iii) Enrolled agents who have a social security number or tax
identification number that ends with the numbers 4, 5, or 6, except for
those individuals who received their initial enrollment after November
1, 2004, must apply for renewal between November 1, 2004, and January
31, 2005. The renewal will be effective April 1, 2005.
    (iv) Enrolled agents who have a social security number or tax
identification number that ends with the numbers 7, 8, or 9, except for
those individuals who received their initial enrollment after November
1, 2005, must apply for renewal between November 1, 2005, and January
31, 2006. The renewal will be effective April 1, 2006.
    (v) Thereafter, applications for renewal as an enrolled agent will
be required between November 1 and January 31 of every subsequent third
year as specified in paragraph (d)(2)(i), (d)(2)(ii), or (d)(2)(iii) of
this section according to the last number of the individual's Social
Security number or tax identification number. Those individuals who
receive initial enrollment as an enrolled agent after November 1 and
before April 2 of the applicable renewal period will not be required to
renew their enrollment before the first full renewal period following
the receipt of their initial enrollment.
    (3) Renewal period for enrolled retirement plan agents. (i) All
enrolled retirement plan agents must renew their preparer tax
identification number as prescribed by the Internal Revenue Service in
forms, instructions, or other appropriate guidance.
    (ii) Enrolled retirement plan agents will be required to renew their
status as enrolled retirement plan agents between April 1 and June 30 of
every third year subsequent to their initial enrollment.
    (4) Renewal period for registered tax return preparers. Registered
tax return preparers must renew their preparer tax identification number
and their status as a registered tax return preparer as prescribed by
the Internal Revenue Service in forms, instructions, or other
appropriate guidance.
    (5) Notification of renewal. After review and approval, the Internal
Revenue Service will notify the individual of the renewal and will issue
the individual a card or certificate evidencing current status as an
enrolled agent, enrolled retirement plan agent, or registered tax return
preparer.
    (6) Fee. A reasonable nonrefundable fee may be charged for each
application for renewal filed. See 26 CFR part 300.
    (7) Forms. Forms required for renewal may be obtained by sending a
written request to the address specified by the Internal Revenue Service
or from such other source as the Internal Revenue Service will publish
in the Internal Revenue Bulletin (see 26 CFR 601.601(d)(2)(ii)(b)) and
on the Internal Revenue Service webpage (http://www.irs.gov).
    (e) Condition for renewal: continuing education. In order to qualify
for renewal as an enrolled agent, enrolled retirement plan agent, or
registered tax return preparer, an individual must certify, in the
manner prescribed by the Internal Revenue Service, that the individual
has satisfied the requisite number of continuing education hours.
    (1) Definitions. For purposes of this section--
    (i) Enrollment year means January 1 to December 31 of each year of
an enrollment cycle.
    (ii) Enrollment cycle means the three successive enrollment years
preceding the effective date of renewal.
    (iii) Registration year means each 12-month period the registered
tax return preparer is authorized to practice before the Internal
Revenue Service.
    (iv) The effective date of renewal is the first day of the fourth
month following

[[Page 137]]

the close of the period for renewal described in paragraph (d) of this
section.
    (2) For renewed enrollment as an enrolled agent or enrolled
retirement plan agent--(i) Requirements for enrollment cycle. A minimum
of 72 hours of continuing education credit, including six hours of
ethics or professional conduct, must be completed during each enrollment
cycle.
    (ii) Requirements for enrollment year. A minimum of 16 hours of
continuing education credit, including two hours of ethics or
professional conduct, must be completed during each enrollment year of
an enrollment cycle.
    (iii) Enrollment during enrollment cycle--(A) In general. Subject to
paragraph (e)(2)(iii)(B) of this section, an individual who receives
initial enrollment during an enrollment cycle must complete two hours of
qualifying continuing education credit for each month enrolled during
the enrollment cycle. Enrollment for any part of a month is considered
enrollment for the entire month.
    (B) Ethics. An individual who receives initial enrollment during an
enrollment cycle must complete two hours of ethics or professional
conduct for each enrollment year during the enrollment cycle. Enrollment
for any part of an enrollment year is considered enrollment for the
entire year.
    (3) Requirements for renewal as a registered tax return preparer. A
minimum of 15 hours of continuing education credit, including two hours
of ethics or professional conduct, three hours of Federal tax law
updates, and 10 hours of Federal tax law topics, must be completed
during each registration year.
    (f) Qualifying continuing education--(1) General--(i) Enrolled
agents. To qualify for continuing education credit for an enrolled
agent, a course of learning must--
    (A) Be a qualifying continuing education program designed to enhance
professional knowledge in Federal taxation or Federal tax related
matters (programs comprised of current subject matter in Federal
taxation or Federal tax related matters, including accounting, tax
return preparation software, taxation, or ethics); and
    (B) Be a qualifying continuing education program consistent with the
Internal Revenue Code and effective tax administration.
    (ii) Enrolled retirement plan agents. To qualify for continuing
education credit for an enrolled retirement plan agent, a course of
learning must--
    (A) Be a qualifying continuing education program designed to enhance
professional knowledge in qualified retirement plan matters; and
    (B) Be a qualifying continuing education program consistent with the
Internal Revenue Code and effective tax administration.
    (iii) Registered tax return preparers. To qualify for continuing
education credit for a registered tax return preparer, a course of
learning must--
    (A) Be a qualifying continuing education program designed to enhance
professional knowledge in Federal taxation or Federal tax related
matters (programs comprised of current subject matter in Federal
taxation or Federal tax related matters, including accounting, tax
return preparation software, taxation, or ethics); and
    (B) Be a qualifying continuing education program consistent with the
Internal Revenue Code and effective tax administration.
    (2) Qualifying programs--(i) Formal programs. A formal program
qualifies as a continuing education program if it--
    (A) Requires attendance and provides each attendee with a
certificate of attendance;
    (B) Is conducted by a qualified instructor, discussion leader, or
speaker (in other words, a person whose background, training, education,
and experience is appropriate for instructing or leading a discussion on
the subject matter of the particular program);
    (C) Provides or requires a written outline, textbook, or suitable
electronic educational materials; and
    (D) Satisfies the requirements established for a qualified
continuing education program pursuant to Sec. 10.9.
    (ii) Correspondence or individual study programs (including taped
programs). Qualifying continuing education programs include
correspondence or individual study programs that are conducted by
continuing education providers and completed on an individual basis by
the enrolled individual. The

[[Page 138]]

allowable credit hours for such programs will be measured on a basis
comparable to the measurement of a seminar or course for credit in an
accredited educational institution. Such programs qualify as continuing
education programs only if they--
    (A) Require registration of the participants by the continuing
education provider;
    (B) Provide a means for measuring successful completion by the
participants (for example, a written examination), including the
issuance of a certificate of completion by the continuing education
provider;
    (C) Provide a written outline, textbook, or suitable electronic
educational materials; and
    (D) Satisfy the requirements established for a qualified continuing
education program pursuant to Sec. 10.9.
    (iii) Serving as an instructor, discussion leader or speaker. (A)
One hour of continuing education credit will be awarded for each contact
hour completed as an instructor, discussion leader, or speaker at an
educational program that meets the continuing education requirements of
paragraph (f) of this section.
    (B) A maximum of two hours of continuing education credit will be
awarded for actual subject preparation time for each contact hour
completed as an instructor, discussion leader, or speaker at such
programs. It is the responsibility of the individual claiming such
credit to maintain records to verify preparation time.
    (C) The maximum continuing education credit for instruction and
preparation may not exceed four hours annually for registered tax return
preparers and six hours annually for enrolled agents and enrolled
retirement plan agents.
    (D) An instructor, discussion leader, or speaker who makes more than
one presentation on the same subject matter during an enrollment cycle
or registration year will receive continuing education credit for only
one such presentation for the enrollment cycle or registration year.
    (3) Periodic examination. Enrolled Agents and Enrolled Retirement
Plan Agents may establish eligibility for renewal of enrollment for any
enrollment cycle by--
    (i) Achieving a passing score on each part of the Special Enrollment
Examination administered under this part during the three year period
prior to renewal; and
    (ii) Completing a minimum of 16 hours of qualifying continuing
education during the last year of an enrollment cycle.
    (g) Measurement of continuing education coursework. (1) All
continuing education programs will be measured in terms of contact
hours. The shortest recognized program will be one contact hour.
    (2) A contact hour is 50 minutes of continuous participation in a
program. Credit is granted only for a full contact hour, which is 50
minutes or multiples thereof. For example, a program lasting more than
50 minutes but less than 100 minutes will count as only one contact
hour.
    (3) Individual segments at continuous conferences, conventions and
the like will be considered one total program. For example, two 90-
minute segments (180 minutes) at a continuous conference will count as
three contact hours.
    (4) For university or college courses, each semester hour credit
will equal 15 contact hours and a quarter hour credit will equal 10
contact hours.
    (h) Recordkeeping requirements. (1) Each individual applying for
renewal must retain for a period of four years following the date of
renewal the information required with regard to qualifying continuing
education credit hours. Such information includes--
    (i) The name of the sponsoring organization;
    (ii) The location of the program;
    (iii) The title of the program, qualified program number, and
description of its content;
    (iv) Written outlines, course syllibi, textbook, and/or electronic
materials provided or required for the course;
    (v) The dates attended;
    (vi) The credit hours claimed;
    (vii) The name(s) of the instructor(s), discussion leader(s), or
speaker(s), if appropriate; and
    (viii) The certificate of completion and/or signed statement of the
hours of

[[Page 139]]

attendance obtained from the continuing education provider.
    (2) To receive continuing education credit for service completed as
an instructor, discussion leader, or speaker, the following information
must be maintained for a period of four years following the date of
renewal--
    (i) The name of the sponsoring organization;
    (ii) The location of the program;
    (iii) The title of the program and copy of its content;
    (iv) The dates of the program; and
    (v) The credit hours claimed.
    (i) Waivers. (1) Waiver from the continuing education requirements
for a given period may be granted for the following reasons--
    (i) Health, which prevented compliance with the continuing education
requirements;
    (ii) Extended active military duty;
    (iii) Absence from the United States for an extended period of time
due to employment or other reasons, provided the individual does not
practice before the Internal Revenue Service during such absence; and
    (iv) Other compelling reasons, which will be considered on a case-
by-case basis.
    (2) A request for waiver must be accompanied by appropriate
documentation. The individual is required to furnish any additional
documentation or explanation deemed necessary. Examples of appropriate
documentation could be a medical certificate or military orders.
    (3) A request for waiver must be filed no later than the last day of
the renewal application period.
    (4) If a request for waiver is not approved, the individual will be
placed in inactive status. The individual will be notified that the
waiver was not approved and that the individual has been placed on a
roster of inactive enrolled agents, enrolled retirement plan agents, or
registered tax return preparers.
    (5) If the request for waiver is not approved, the individual may
file a protest as prescribed by the Internal Revenue Service in forms,
instructions, or other appropriate guidance. A protest filed under this
section is not governed by subpart D of this part.
    (6) If a request for waiver is approved, the individual will be
notified and issued a card or certificate evidencing renewal.
    (7) Those who are granted waivers are required to file timely
applications for renewal of enrollment or registration.
    (j) Failure to comply. (1) Compliance by an individual with the
requirements of this part is determined by the Internal Revenue Service.
The Internal Revenue Service will provide notice to any individual who
fails to meet the continuing education and fee requirements of
eligibility for renewal. The notice will state the basis for the
determination of noncompliance and will provide the individual an
opportunity to furnish the requested information in writing relating to
the matter within 60 days of the date of the notice. Such information
will be considered in making a final determination as to eligibility for
renewal. The individual must be informed of the reason(s) for any denial
of a renewal. The individual may, within 30 days after receipt of the
notice of denial of renewal, file a written protest of the denial as
prescribed by the Internal Revenue Service in forms, instructions, or
other appropriate guidance. A protest under this section is not governed
by subpart D of this part.
    (2) The continuing education records of an enrolled agent, enrolled
retirement plan agent, or registered tax return preparer may be reviewed
to determine compliance with the requirements and standards for renewal
as provided in paragraph (f) of this section. As part of this review,
the enrolled agent, enrolled retirement plan agent or registered tax
return preparer may be required to provide the Internal Revenue Service
with copies of any continuing education records required to be
maintained under this part. If the enrolled agent, enrolled retirement
plan agent or registered tax return preparer fails to comply with this
requirement, any continuing education hours claimed may be disallowed.
    (3) An individual who has not filed a timely application for
renewal, who has not made a timely response to the notice of
noncompliance with the renewal requirements, or who has not satisfied
the requirements of eligibility for renewal will be placed on a roster
of

[[Page 140]]

inactive enrolled individuals or inactive registered individuals. During
this time, the individual will be ineligible to practice before the
Internal Revenue Service.
    (4) Individuals placed in inactive status and individuals ineligible
to practice before the Internal Revenue Service may not state or imply
that they are eligible to practice before the Internal Revenue Service,
or use the terms enrolled agent, enrolled retirement plan agent, or
registered tax return preparer, the designations ``EA'' or ``ERPA'' or
other form of reference to eligibility to practice before the Internal
Revenue Service.
    (5) An individual placed in inactive status may be reinstated to an
active status by filing an application for renewal and providing
evidence of the completion of all required continuing education hours
for the enrollment cycle or registration year. Continuing education
credit under this paragraph (j)(5) may not be used to satisfy the
requirements of the enrollment cycle or registration year in which the
individual has been placed back on the active roster.
    (6) An individual placed in inactive status must file an application
for renewal and satisfy the requirements for renewal as set forth in
this section within three years of being placed in inactive status.
Otherwise, the name of such individual will be removed from the inactive
status roster and the individual's status as an enrolled agent, enrolled
retirement plan agent, or registered tax return preparer will terminate.
Future eligibility for active status must then be reestablished by the
individual as provided in this section.
    (7) Inactive status is not available to an individual who is the
subject of a pending disciplinary matter before the Internal Revenue
Service.
    (k) Inactive retirement status. An individual who no longer
practices before the Internal Revenue Service may request to be placed
in an inactive retirement status at any time and such individual will be
placed in an inactive retirement status. The individual will be
ineligible to practice before the Internal Revenue Service. An
individual who is placed in an inactive retirement status may be
reinstated to an active status by filing an application for renewal and
providing evidence of the completion of the required continuing
education hours for the enrollment cycle or registration year. Inactive
retirement status is not available to an individual who is ineligible to
practice before the Internal Revenue Service or an individual who is the
subject of a pending disciplinary matter under this part.
    (l) Renewal while under suspension or disbarment. An individual who
is ineligible to practice before the Internal Revenue Service by virtue
of disciplinary action under this part is required to conform to the
requirements for renewal of enrollment or registration before the
individual's eligibility is restored.
    (m) Enrolled actuaries. The enrollment and renewal of enrollment of
actuaries authorized to practice under paragraph (d) of Sec. 10.3 are
governed by the regulations of the Joint Board for the Enrollment of
Actuaries at 20 CFR 901.1 through 901.72.
    (n) Effective/applicability date. This section is applicable to
enrollment or registration effective beginning August 2, 2011.

[T.D. 9527, 76 FR 32302, June 3, 2011]



Sec. 10.7  Representing oneself; participating in rulemaking; limited
practice; and special appearances.

    (a) Representing oneself. Individuals may appear on their own behalf
before the Internal Revenue Service provided they present satisfactory
identification.
    (b) Participating in rulemaking. Individuals may participate in
rulemaking as provided by the Administrative Procedure Act. See 5 U.S.C.
553.
    (c) Limited practice--(1) In general. Subject to the limitations in
paragraph (c)(2) of this section, an individual who is not a
practitioner may represent a taxpayer before the Internal Revenue
Service in the circumstances described in this paragraph (c)(1), even if
the taxpayer is not present, provided the individual presents
satisfactory identification and proof of his or her authority to
represent the taxpayer. The circumstances described in this paragraph
(c)(1) are as follows:

[[Page 141]]

    (i) An individual may represent a member of his or her immediate
family.
    (ii) A regular full-time employee of an individual employer may
represent the employer.
    (iii) A general partner or a regular full-time employee of a
partnership may represent the partnership.
    (iv) A bona fide officer or a regular full-time employee of a
corporation (including a parent, subsidiary, or other affiliated
corporation), association, or organized group may represent the
corporation, association, or organized group.
    (v) A regular full-time employee of a trust, receivership,
guardianship, or estate may represent the trust, receivership,
guardianship, or estate.
    (vi) An officer or a regular employee of a governmental unit,
agency, or authority may represent the governmental unit, agency, or
authority in the course of his or her official duties.
    (vii) An individual may represent any individual or entity, who is
outside the United States, before personnel of the Internal Revenue
Service when such representation takes place outside the United States.
    (2) Limitations. (i) An individual who is under suspension or
disbarment from practice before the Internal Revenue Service may not
engage in limited practice before the Internal Revenue Service under
paragraph (c)(1) of this section.
    (ii) The Commissioner, or delegate, may, after notice and
opportunity for a conference, deny eligibility to engage in limited
practice before the Internal Revenue Service under paragraph (c)(1) of
this section to any individual who has engaged in conduct that would
justify a sanction under Sec. 10.50.
    (iii) An individual who represents a taxpayer under the authority of
paragraph (c)(1) of this section is subject, to the extent of his or her
authority, to such rules of general applicability regarding standards of
conduct and other matters as prescribed by the Internal Revenue Service.
    (d) Special appearances. The Commissioner, or delegate, may, subject
to conditions deemed appropriate, authorize an individual who is not
otherwise eligible to practice before the Internal Revenue Service to
represent another person in a particular matter.
    (e) Fiduciaries. For purposes of this part, a fiduciary (for
example, a trustee, receiver, guardian, personal representative,
administrator, or executor) is considered to be the taxpayer and not a
representative of the taxpayer.
    (f) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9011, 67 FR 48765, July 26, 2002, as amended by T.D. 9359, 72 FR
54544, 54547, Sept. 26, 2007; T.D. 9527, 76 FR 32305, June 3, 2011]



Sec. 10.8  Return preparation and application of rules to other
individuals.

    (a) Preparing all or substantially all of a tax return. Any
individual who for compensation prepares or assists with the preparation
of all or substantially all of a tax return or claim for refund must
have a preparer tax identification number. Except as otherwise
prescribed in forms, instructions, or other appropriate guidance, an
individual must be an attorney, certified public accountant, enrolled
agent, or registered tax return preparer to obtain a preparer tax
identification number. Any individual who for compensation prepares or
assists with the preparation of all or substantially all of a tax return
or claim for refund is subject to the duties and restrictions relating
to practice in subpart B, as well as subject to the sanctions for
violation of the regulations in subpart C.
    (b) Preparing a tax return and furnishing information. Any
individual may for compensation prepare or assist with the preparation
of a tax return or claim for refund (provided the individual prepares
less than substantially all of the tax return or claim for refund),
appear as a witness for the taxpayer before the Internal Revenue
Service, or furnish information at the request of the Internal Revenue
Service or any of its officers or employees.
    (c) Application of rules to other individuals. Any individual who
for compensation prepares, or assists in the preparation of, all or a
substantial portion of a document pertaining to any taxpayer's tax
liability for submission to the Internal Revenue Service is subject

[[Page 142]]

to the duties and restrictions relating to practice in subpart B, as
well as subject to the sanctions for violation of the regulations in
subpart C. Unless otherwise a practitioner, however, an individual may
not for compensation prepare, or assist in the preparation of, all or
substantially all of a tax return or claim for refund, or sign tax
returns and claims for refund. For purposes of this paragraph, an
individual described in 26 CFR 301.7701-15(f) is not treated as having
prepared all or a substantial portion of the document by reason of such
assistance.
    (d) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9527, 76 FR 32306, June 3, 2011]



Sec. 10.9  Continuing education providers and continuing education
programs.

    (a) Continuing education providers--(1) In general. Continuing
education providers are those responsible for presenting continuing
education programs. A continuing education provider must--
    (i) Be an accredited educational institution;
    (ii) Be recognized for continuing education purposes by the
licensing body of any State, territory, or possession of the United
States, including a Commonwealth, or the District of Columbia;
    (iii) Be recognized and approved by a qualifying organization as a
provider of continuing education on subject matters within Sec. 10.6(f)
of this part. The Internal Revenue Service may, at its discretion,
identify a professional organization, society or business entity that
maintains minimum education standards comparable to those set forth in
this part as a qualifying organization for purposes of this part in
appropriate forms, instructions, and other appropriate guidance; or
    (iv) Be recognized by the Internal Revenue Service as a professional
organization, society, or business whose programs include offering
continuing professional education opportunities in subject matters
within Sec. 10.6(f) of this part. The Internal Revenue Service, at its
discretion, may require such professional organizations, societies, or
businesses to file an agreement and/or obtain Internal Revenue Service
approval of each program as a qualified continuing education program in
appropriate forms, instructions or other appropriate guidance.
    (2) Continuing education provider numbers--(i) In general. A
continuing education provider is required to obtain a continuing
education provider number and pay any applicable user fee.
    (ii) Renewal. A continuing education provider maintains its status
as a continuing education provider during the continuing education
provider cycle by renewing its continuing education provider number as
prescribed by forms, instructions or other appropriate guidance and
paying any applicable user fee.
    (3) Requirements for qualified continuing education programs. A
continuing education provider must ensure the qualified continuing
education program complies with all the following requirements--
    (i) Programs must be developed by individual(s) qualified in the
subject matter;
    (ii) Program subject matter must be current;
    (iii) Instructors, discussion leaders, and speakers must be
qualified with respect to program content;
    (iv) Programs must include some means for evaluation of the
technical content and presentation to be evaluated;
    (v) Certificates of completion bearing a current qualified
continuing education program number issued by the Internal Revenue
Service must be provided to the participants who successfully complete
the program; and
    (vi) Records must be maintained by the continuing education provider
to verify the participants who attended and completed the program for a
period of four years following completion of the program. In the case of
continuous conferences, conventions, and the like, records must be
maintained to verify completion of the program and attendance by each
participant at each segment of the program.
    (4) Program numbers--(i) In general. Every continuing education
provider is required to obtain a continuing education provider program
number and

[[Page 143]]

pay any applicable user fee for each program offered. Program numbers
shall be obtained as prescribed by forms, instructions or other
appropriate guidance. Although, at the discretion of the Internal
Revenue Service, a continuing education provider may be required to
demonstrate that the program is designed to enhance professional
knowledge in Federal taxation or Federal tax related matters (programs
comprised of current subject matter in Federal taxation or Federal tax
related matters, including accounting, tax return preparation software,
taxation, or ethics) and complies with the requirements in paragraph
(a)(2)of this section before a program number is issued.
    (ii) Update programs. Update programs may use the same number as the
program subject to update. An update program is a program that instructs
on a change of existing law occurring within one year of the update
program offering. The qualifying education program subject to update
must have been offered within the two year time period prior to the
change in existing law.
    (iii) Change in existing law. A change in existing law means the
effective date of the statute or regulation, or date of entry of
judicial decision, that is the subject of the update.
    (b) Failure to comply. Compliance by a continuing education provider
with the requirements of this part is determined by the Internal Revenue
Service. A continuing education provider who fails to meet the
requirements of this part will be notified by the Internal Revenue
Service. The notice will state the basis for the determination of
noncompliance and will provide the continuing education provider an
opportunity to furnish the requested information in writing relating to
the matter within 60 days of the date of the notice. The continuing
education provider may, within 30 days after receipt of the notice of
denial, file a written protest as prescribed by the Internal Revenue
Service in forms, instructions, or other appropriate guidance. A protest
under this section is not governed by subpart D of this part.
    (c) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9527, 76 FR 32306, June 3, 2011]



   Subpart B_Duties and Restrictions Relating to Practice Before the
                        Internal Revenue Service

    Source: T.D. 9011, 67 FR 48771, July 26, 2002, unless otherwise
noted.



Sec. 10.20  Information to be furnished.

    (a) To the Internal Revenue Service. (1) A practitioner must, on a
proper and lawful request by a duly authorized officer or employee of
the Internal Revenue Service, promptly submit records or information in
any matter before the Internal Revenue Service unless the practitioner
believes in good faith and on reasonable grounds that the records or
information are privileged.
    (2) Where the requested records or information are not in the
possession of, or subject to the control of, the practitioner or the
practitioner's client, the practitioner must promptly notify the
requesting Internal Revenue Service officer or employee and the
practitioner must provide any information that the practitioner has
regarding the identity of any person who the practitioner believes may
have possession or control of the requested records or information. The
practitioner must make reasonable inquiry of his or her client regarding
the identity of any person who may have possession or control of the
requested records or information, but the practitioner is not required
to make inquiry of any other person or independently verify any
information provided by the practitioner's client regarding the identity
of such persons.
    (3) When a proper and lawful request is made by a duly authorized
officer or employee of the Internal Revenue Service, concerning an
inquiry into an alleged violation of the regulations in this part, a
practitioner must provide any information the practitioner has
concerning the alleged violation and testify regarding this information
in any proceeding instituted under this part, unless the practitioner
believes in good faith and on reasonable grounds that the information is
privileged.

[[Page 144]]

    (b) Interference with a proper and lawful request for records or
information. A practitioner may not interfere, or attempt to interfere,
with any proper and lawful effort by the Internal Revenue Service, its
officers or employees, to obtain any record or information unless the
practitioner believes in good faith and on reasonable grounds that the
record or information is privileged.
    (c) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9011, 67 FR 48771, July 26, 2002, as amended by T.D. 9527, 76 FR
32307, June 3, 2011]



Sec. 10.21  Knowledge of client's omission.

    A practitioner who, having been retained by a client with respect to
a matter administered by the Internal Revenue Service, knows that the
client has not complied with the revenue laws of the United States or
has made an error in or omission from any return, document, affidavit,
or other paper which the client submitted or executed under the revenue
laws of the United States, must advise the client promptly of the fact
of such noncompliance, error, or omission. The practitioner must advise
the client of the consequences as provided under the Code and
regulations of such noncompliance, error, or omission.



Sec. 10.22  Diligence as to accuracy.

    (a) In general. A practitioner must exercise due diligence--
    (1) In preparing or assisting in the preparation of, approving, and
filing tax returns, documents, affidavits, and other papers relating to
Internal Revenue Service matters;
    (2) In determining the correctness of oral or written
representations made by the practitioner to the Department of the
Treasury; and
    (3) In determining the correctness of oral or written
representations made by the practitioner to clients with reference to
any matter administered by the Internal Revenue Service.
    (b) Reliance on others. Except as modified by Sec. Sec. 10.34 and
10.37, a practitioner will be presumed to have exercised due diligence
for purposes of this section if the practitioner relies on the work
product of another person and the practitioner used reasonable care in
engaging, supervising, training, and evaluating the person, taking
proper account of the nature of the relationship between the
practitioner and the person.
    (c) Effective/applicability date. Paragraph (a) of this section is
applicable on September 26, 2007. Paragraph (b) of this section is
applicable beginning June 12, 2014.

[T.D. 9011, 67 FR 48765, July 26, 2002, as amended by T.D. 9359, 72 FR
54547, Sept. 26, 2007; T.D. 9668, 79 FR 33693, June 12, 2014]



Sec. 10.23  Prompt disposition of pending matters.

    A practitioner may not unreasonably delay the prompt disposition of
any matter before the Internal Revenue Service.



Sec. 10.24  Assistance from or to disbarred or suspended persons and
former Internal Revenue Service employees.

    A practitioner may not, knowingly and directly or indirectly:
    (a) Accept assistance from or assist any person who is under
disbarment or suspension from practice before the Internal Revenue
Service if the assistance relates to a matter or matters constituting
practice before the Internal Revenue Service.
    (b) Accept assistance from any former government employee where the
provisions of Sec. 10.25 or any Federal law would be violated.



Sec. 10.25  Practice by former government employees, their partners and
their associates.

    (a) Definitions. For purposes of this section--
    (1) Assist means to act in such a way as to advise, furnish
information to, or otherwise aid another person, directly, or
indirectly.
    (2) Government employee is an officer or employee of the United
States or any agency of the United States, including a special
Government employee as defined in 18 U.S.C. 202(a), or of the District
of Columbia, or of any State, or a member of Congress or of any State
legislature.
    (3) Member of a firm is a sole practitioner or an employee or
associate

[[Page 145]]

thereof, or a partner, stockholder, associate, affiliate or employee of
a partnership, joint venture, corporation, professional association or
other affiliation of two or more practitioners who represent
nongovernmental parties.
    (4) Particular matter involving specific parties is defined at 5 CFR
2637.201(c), or superseding post-employment regulations issued by the
U.S. Office of Government Ethics.
    (5) Rule includes Treasury regulations, whether issued or under
preparation for issuance as notices of proposed rulemaking or as
Treasury decisions, revenue rulings, and revenue procedures published in
the Internal Revenue Bulletin (see 26 CFR 601.601(d)(2)(ii)(b)).
    (b) General rules--(1) No former Government employee may, subsequent
to Government employment, represent anyone in any matter administered by
the Internal Revenue Service if the representation would violate 18
U.S.C. 207 or any other laws of the United States.
    (2) No former Government employee who personally and substantially
participated in a particular matter involving specific parties may,
subsequent to Government employment, represent or knowingly assist, in
that particular matter, any person who is or was a specific party to
that particular matter.
    (3) A former Government employee who within a period of one year
prior to the termination of Government employment had official
responsibility for a particular matter involving specific parties may
not, within two years after Government employment is ended, represent in
that particular matter any person who is or was a specific party to that
particular matter.
    (4) No former Government employee may, within one year after
Government employment is ended, communicate with or appear before, with
the intent to influence, any employee of the Treasury Department in
connection with the publication, withdrawal, amendment, modification, or
interpretation of a rule the development of which the former Government
employee participated in, or for which, within a period of one year
prior to the termination of Government employment, the former government
employee had official responsibility. This paragraph (b)(4) does not,
however, preclude any former employee from appearing on one's own behalf
or from representing a taxpayer before the Internal Revenue Service in
connection with a particular matter involving specific parties involving
the application or interpretation of a rule with respect to that
particular matter, provided that the representation is otherwise
consistent with the other provisions of this section and the former
employee does not utilize or disclose any confidential information
acquired by the former employee in the development of the rule.
    (c) Firm representation--(1) No member of a firm of which a former
Government employee is a member may represent or knowingly assist a
person who was or is a specific party in any particular matter with
respect to which the restrictions of paragraph (b)(2) of this section
apply to the former Government employee, in that particular matter,
unless the firm isolates the former Government employee in such a way to
ensure that the former Government employee cannot assist in the
representation.
    (2) When isolation of a former Government employee is required under
paragraph (c)(1) of this section, a statement affirming the fact of such
isolation must be executed under oath by the former Government employee
and by another member of the firm acting on behalf of the firm. The
statement must clearly identify the firm, the former Government
employee, and the particular matter(s) requiring isolation. The
statement must be retained by the firm and, upon request, provided to
the office(s) of the Internal Revenue Service administering or enforcing
this part.
    (d) Pending representation. The provisions of this regulation will
govern practice by former Government employees, their partners and
associates with respect to representation in particular matters
involving specific parties where actual representation commenced before
the effective date of this regulation.

[[Page 146]]

    (e) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9359, 72 FR 54548, Sept. 26, 2007, as amended by T.D. 9527, 76 FR
32307, June 3, 2011]



Sec. 10.26  Notaries.

    A practitioner may not take acknowledgments, administer oaths,
certify papers, or perform any official act as a notary public with
respect to any matter administered by the Internal Revenue Service and
for which he or she is employed as counsel, attorney, or agent, or in
which he or she may be in any way interested.



Sec. 10.27  Fees.

    (a) In general. A practitioner may not charge an unconscionable fee
in connection with any matter before the Internal Revenue Service.
    (b) Contingent fees--(1) Except as provided in paragraphs (b)(2),
(3), and (4) of this section, a practitioner may not charge a contingent
fee for services rendered in connection with any matter before the
Internal Revenue Service.
    (2) A practitioner may charge a contingent fee for services rendered
in connection with the Service's examination of, or challenge to--
    (i) An original tax return; or
    (ii) An amended return or claim for refund or credit where the
amended return or claim for refund or credit was filed within 120 days
of the taxpayer receiving a written notice of the examination of, or a
written challenge to the original tax return.
    (3) A practitioner may charge a contingent fee for services rendered
in connection with a claim for credit or refund filed solely in
connection with the determination of statutory interest or penalties
assessed by the Internal Revenue Service.
    (4) A practitioner may charge a contingent fee for services rendered
in connection with any judicial proceeding arising under the Internal
Revenue Code.
    (c) Definitions. For purposes of this section--
    (1) Contingent fee is any fee that is based, in whole or in part, on
whether or not a position taken on a tax return or other filing avoids
challenge by the Internal Revenue Service or is sustained either by the
Internal Revenue Service or in litigation. A contingent fee includes a
fee that is based on a percentage of the refund reported on a return,
that is based on a percentage of the taxes saved, or that otherwise
depends on the specific result attained. A contingent fee also includes
any fee arrangement in which the practitioner will reimburse the client
for all or a portion of the client's fee in the event that a position
taken on a tax return or other filing is challenged by the Internal
Revenue Service or is not sustained, whether pursuant to an indemnity
agreement, a guarantee, rescission rights, or any other arrangement with
a similar effect.
    (2) Matter before the Internal Revenue Service includes tax planning
and advice, preparing or filing or assisting in preparing or filing
returns or claims for refund or credit, and all matters connected with a
presentation to the Internal Revenue Service or any of its officers or
employees relating to a taxpayer's rights, privileges, or liabilities
under laws or regulations administered by the Internal Revenue Service.
Such presentations include, but are not limited to, preparing and filing
documents, corresponding and communicating with the Internal Revenue
Service, rendering written advice with respect to any entity,
transaction, plan or arrangement, and representing a client at
conferences, hearings, and meetings.
    (d) Effective/applicability date. This section is applicable for fee
arrangements entered into after March 26, 2008.

[T.D. 9359, 72 FR 54548, Sept. 26, 2007]



Sec. 10.28  Return of client's records.

    (a) In general, a practitioner must, at the request of a client,
promptly return any and all records of the client that are necessary for
the client to comply with his or her Federal tax obligations. The
practitioner may retain copies of the records returned to a client. The
existence of a dispute over fees generally does not relieve the
practitioner of his or her responsibility under this section.
Nevertheless, if applicable

[[Page 147]]

state law allows or permits the retention of a client's records by a
practitioner in the case of a dispute over fees for services rendered,
the practitioner need only return those records that must be attached to
the taxpayer's return. The practitioner, however, must provide the
client with reasonable access to review and copy any additional records
of the client retained by the practitioner under state law that are
necessary for the client to comply with his or her Federal tax
obligations.
    (b) For purposes of this section, Records of the client include all
documents or written or electronic materials provided to the
practitioner, or obtained by the practitioner in the course of the
practitioner's representation of the client, that preexisted the
retention of the practitioner by the client. The term also includes
materials that were prepared by the client or a third party (not
including an employee or agent of the practitioner) at any time and
provided to the practitioner with respect to the subject matter of the
representation. The term also includes any return, claim for refund,
schedule, affidavit, appraisal or any other document prepared by the
practitioner, or his or her employee or agent, that was presented to the
client with respect to a prior representation if such document is
necessary for the taxpayer to comply with his or her current Federal tax
obligations. The term does not include any return, claim for refund,
schedule, affidavit, appraisal or any other document prepared by the
practitioner or the practitioner's firm, employees or agents if the
practitioner is withholding such document pending the client's
performance of its contractual obligation to pay fees with respect to
such document.



Sec. 10.29  Conflicting interests.

    (a) Except as provided by paragraph (b) of this section, a
practitioner shall not represent a client before the Internal Revenue
Service if the representation involves a conflict of interest. A
conflict of interest exists if--
    (1) The representation of one client will be directly adverse to
another client; or
    (2) There is a significant risk that the representation of one or
more clients will be materially limited by the practitioner's
responsibilities to another client, a former client or a third person,
or by a personal interest of the practitioner.
    (b) Notwithstanding the existence of a conflict of interest under
paragraph (a) of this section, the practitioner may represent a client
if--
    (1) The practitioner reasonably believes that the practitioner will
be able to provide competent and diligent representation to each
affected client;
    (2) The representation is not prohibited by law; and
    (3) Each affected client waives the conflict of interest and gives
informed consent, confirmed in writing by each affected client, at the
time the existence of the conflict of interest is known by the
practitioner. The confirmation may be made within a reasonable period
after the informed consent, but in no event later than 30 days.
    (c) Copies of the written consents must be retained by the
practitioner for at least 36 months from the date of the conclusion of
the representation of the affected clients, and the written consents
must be provided to any officer or employee of the Internal Revenue
Service on request.
    (d) Effective/applicability date. This section is applicable on
September 26, 2007.

[T.D. 9359, 72 FR 54549, Sept. 26, 2007]



Sec. 10.30  Solicitation.

    (a) Advertising and solicitation restrictions. (1) A practitioner
may not, with respect to any Internal Revenue Service matter, in any way
use or participate in the use of any form of public communication or
private solicitation containing a false, fraudulent, or coercive
statement or claim; or a misleading or deceptive statement or claim.
Enrolled agents, enrolled retirement plan agents, or registered tax
return preparers, in describing their professional designation, may not
utilize the term ``certified'' or imply an employer/employee
relationship with the Internal Revenue Service. Examples of acceptable
descriptions for enrolled agents are ``enrolled to represent taxpayers
before the Internal Revenue Service,'' ``enrolled to practice before the
Internal Revenue Service,'' and

[[Page 148]]

``admitted to practice before the Internal Revenue Service.'' Similarly,
examples of acceptable descriptions for enrolled retirement plan agents
are ``enrolled to represent taxpayers before the Internal Revenue
Service as a retirement plan agent'' and ``enrolled to practice before
the Internal Revenue Service as a retirement plan agent.'' An example of
an acceptable description for registered tax return preparers is
``designated as a registered tax return preparer by the Internal Revenue
Service.''
    (2) A practitioner may not make, directly or indirectly, an
uninvited written or oral solicitation of employment in matters related
to the Internal Revenue Service if the solicitation violates Federal or
State law or other applicable rule, e.g., attorneys are precluded from
making a solicitation that is prohibited by conduct rules applicable to
all attorneys in their State(s) of licensure. Any lawful solicitation
made by or on behalf of a practitioner eligible to practice before the
Internal Revenue Service must, nevertheless, clearly identify the
solicitation as such and, if applicable, identify the source of the
information used in choosing the recipient.
    (b) Fee information. (1)(i) A practitioner may publish the
availability of a written schedule of fees and disseminate the following
fee information--
    (A) Fixed fees for specific routine services.
    (B) Hourly rates.
    (C) Range of fees for particular services.
    (D) Fee charged for an initial consultation.
    (ii) Any statement of fee information concerning matters in which
costs may be incurred must include a statement disclosing whether
clients will be responsible for such costs.
    (2) A practitioner may charge no more than the rate(s) published
under paragraph (b)(1) of this section for at least 30 calendar days
after the last date on which the schedule of fees was published.
    (c) Communication of fee information. Fee information may be
communicated in professional lists, telephone directories, print media,
mailings, electronic mail, facsimile, hand delivered flyers, radio,
television, and any other method. The method chosen, however, must not
cause the communication to become untruthful, deceptive, or otherwise in
violation of this part. A practitioner may not persist in attempting to
contact a prospective client if the prospective client has made it known
to the practitioner that he or she does not desire to be solicited. In
the case of radio and television broadcasting, the broadcast must be
recorded and the practitioner must retain a recording of the actual
transmission. In the case of direct mail and e-commerce communications,
the practitioner must retain a copy of the actual communication, along
with a list or other description of persons to whom the communication
was mailed or otherwise distributed. The copy must be retained by the
practitioner for a period of at least 36 months from the date of the
last transmission or use.
    (d) Improper associations. A practitioner may not, in matters
related to the Internal Revenue Service, assist, or accept assistance
from, any person or entity who, to the knowledge of the practitioner,
obtains clients or otherwise practices in a manner forbidden under this
section.
    (e) Effective/applicability date. This section is applicable
beginning August 2, 2011.

(Approved by the Office of Management and Budget under Control No. 1545-
1726)

[T.D. 9011, 67 FR 48765, July 26, 2002, as amended by T.D. 9359, 72 FR
54549, Sept. 26, 2007; T.D. 9527, 76 FR 32307, June 3, 2011]



Sec. 10.31  Negotiation of taxpayer checks.

    (a) A practitioner may not endorse or otherwise negotiate any check
(including directing or accepting payment by any means, electronic or
otherwise, into an account owned or controlled by the practitioner or
any firm or other entity with whom the practitioner is associated)
issued to a client by the government in respect of a Federal tax
liability.
    (b) Effective/applicability date. This section is applicable
beginning June 12, 2014.

[T.D. 9668, 79 FR 33693, June 12, 2014]

[[Page 149]]



Sec. 10.32  Practice of law.

    Nothing in the regulations in this part may be construed as
authorizing persons not members of the bar to practice law.



Sec. 10.33  Best practices for tax advisors.

    (a) Best practices. Tax advisors should provide clients with the
highest quality representation concerning Federal tax issues by adhering
to best practices in providing advice and in preparing or assisting in
the preparation of a submission to the Internal Revenue Service. In
addition to compliance with the standards of practice provided elsewhere
in this part, best practices include the following:
    (1) Communicating clearly with the client regarding the terms of the
engagement. For example, the advisor should determine the client's
expected purpose for and use of the advice and should have a clear
understanding with the client regarding the form and scope of the advice
or assistance to be rendered.
    (2) Establishing the facts, determining which facts are relevant,
evaluating the reasonableness of any assumptions or representations,
relating the applicable law (including potentially applicable judicial
doctrines) to the relevant facts, and arriving at a conclusion supported
by the law and the facts.
    (3) Advising the client regarding the import of the conclusions
reached, including, for example, whether a taxpayer may avoid accuracy-
related penalties under the Internal Revenue Code if a taxpayer acts in
reliance on the advice.
    (4) Acting fairly and with integrity in practice before the Internal
Revenue Service.
    (b) Procedures to ensure best practices for tax advisors. Tax
advisors with responsibility for overseeing a firm's practice of
providing advice concerning Federal tax issues or of preparing or
assisting in the preparation of submissions to the Internal Revenue
Service should take reasonable steps to ensure that the firm's
procedures for all members, associates, and employees are consistent
with the best practices set forth in paragraph (a) of this section.
    (c) Applicability date. This section is effective after June 20,
2005.

[T.D. 9011, 67 FR 48771, July 26, 2002, as amended by T.D. 9165, 69 FR
75841, Dec. 20, 2004]



Sec. 10.34  Standards with respect to tax returns and documents,
affidavits and other papers.

    (a) Tax returns. (1) A practitioner may not willfully, recklessly,
or through gross incompetence--
    (i) Sign a tax return or claim for refund that the practitioner
knows or reasonably should know contains a position that--
    (A) Lacks a reasonable basis;
    (B) Is an unreasonable position as described in section 6694(a)(2)
of the Internal Revenue code (Code) (including the related regulations
and other published guidance); or
    (C) Is a willful attempted by the practitioner to understate the
liability for tax or a reckless or intentional disregard of rules or
regulations by the practitioner as described in section 6694(b)(2) of
the Code (including the related regulations and other published
guidance).
    (ii) Advise a client to take a position on a tax return or claim for
refund, or prepare a portion off a tax return or claim for refund
containing a position, that--
    (A) Lacks a reasonable basis;
    (B) Is an unreasonable position as described in section 6694(a)(2)
of the Code (including the related regulations and other published
guidance); or
    (C) Is a willful attempt by the practitioner to understate the
liability for tax or a reckless or intentional disregard of rules or
regulations by the practitioner as described in section 6694(b)(2) of
the Code (including the related regulations and other published
guidance).
    (2) A pattern of conduct is a factor that will be taken into account
in determining whether a practitioner acted willfully, recklessly, or
through gross incompetence.
    (b) Documents, affidavits and other papers--(1) A practitioner may
not advise a client to take a position on a document, affidavit or other
paper submitted to the Internal Revenue Service unless the position is
not frivolous.

[[Page 150]]

    (2) A practitioner may not advise a client to submit a document,
affidavit or other paper to the Internal Revenue Service--
    (i) The purpose of which is to delay or impede the administration of
the Federal tax laws;
    (ii) That is frivolous; or
    (iii) That contains or omits information in a manner that
demonstrates an intentional disregard of a rule or regulation unless the
practitioner also advises the client to submit a document that evidences
a good faith challenge to the rule or regulation.
    (c) Advising clients on potential penalties--(1) A practitioner must
inform a client of any penalties that are reasonably likely to apply to
the client with respect to--
    (i) A position taken on a tax return if--
    (A) The practitioner advised the client with respect to the
position; or
    (B) The practitioner prepared or signed the tax return; and
    (ii) Any document, affidavit or other paper submitted to the
Internal Revenue Service.
    (2) The practitioner also must inform the client of any opportunity
to avoid any such penalties by disclosure, if relevant, and of the
requirements for adequate disclosure.
    (3) This paragraph (c) applies even if the practitioner is not
subject to a penalty under the Internal Revenue Code with respect to the
position or with respect to the document, affidavit or other paper
submitted.
    (d) Relying on information furnished by clients. A practitioner
advising a client to take a position on a tax return, document,
affidavit or other paper submitted to the Internal Revenue Service, or
preparing or signing a tax return as a preparer, generally may rely in
good faith without verification upon information furnished by the
client. The practitioner may not, however, ignore the implications of
information furnished to, or actually known by, the practitioner, and
must make reasonable inquiries if the information as furnished appears
to be incorrect, inconsistent with an important fact or another factual
assumption, or incomplete.
    (e) Effective/applicability date. Paragraph (a) of this section is
applicable for returns or claims for refund filed, or advice provided,
beginning August 2, 2011. Paragraphs (b) through (d) of this section are
applicable to tax returns, documents, affidavits, and other papers filed
on or after September 26, 2007.

[T.D. 9359, 72 FR 54549, Sept. 26, 2007, as amended by T.D. 9527, 76 FR
32307, June 3, 2011]



Sec. 10.35  Competence.

    (a) A practitioner must possess the necessary competence to engage
in practice before the Internal Revenue Service. Competent practice
requires the appropriate level of knowledge, skill, thoroughness, and
preparation necessary for the matter for which the practitioner is
engaged. A practitioner may become competent for the matter for which
the practitioner has been engaged through various methods, such as
consulting with experts in the relevant area or studying the relevant
law.
    (b) Effective/applicability date. This section is applicable
beginning June 12, 2014.

[T.D. 9668, 79 FR 33693, June 12, 2014]



Sec. 10.36  Procedures to ensure compliance.

    (a) Any individual subject to the provisions of this part who has
(or individuals who have or share) principal authority and
responsibility for overseeing a firm's practice governed by this part,
including the provision of advice concerning Federal tax matters and
preparation of tax returns, claims for refund, or other documents for
submission to the Internal Revenue Service, must take reasonable steps
to ensure that the firm has adequate procedures in effect for all
members, associates, and employees for purposes of complying with
subparts A, B, and C of this part, as applicable. In the absence of a
person or persons identified by the firm as having the principal
authority and responsibility described in this paragraph, the Internal
Revenue Service may identify one or more individuals subject to the
provisions of this part responsible for compliance with the requirements
of this section.

[[Page 151]]

    (b) Any such individual who has (or such individuals who have or
share) principal authority as described in paragraph (a) of this section
will be subject to discipline for failing to comply with the
requirements of this section if--
    (1) The individual through willfulness, recklessness, or gross
incompetence does not take reasonable steps to ensure that the firm has
adequate procedures to comply with this part, as applicable, and one or
more individuals who are members of, associated with, or employed by,
the firm are, or have, engaged in a pattern or practice, in connection
with their practice with the firm, of failing to comply with this part,
as applicable;
    (2) The individual through willfulness, recklessness, or gross
incompetence does not take reasonable steps to ensure that firm
procedures in effect are properly followed, and one or more individuals
who are members of, associated with, or employed by, the firm are, or
have, engaged in a pattern or practice, in connection with their
practice with the firm, of failing to comply with this part, as
applicable; or
    (3) The individual knows or should know that one or more individuals
who are members of, associated with, or employed by, the firm are, or
have, engaged in a pattern or practice, in connection with their
practice with the firm, that does not comply with this part, as
applicable, and the individual, through willfulness, recklessness, or
gross incompetence fails to take prompt action to correct the
noncompliance.
    (c) Effective/applicability date. This section is applicable
beginning June 12, 2014.

[T.D. 9668, 79 FR 33693, June 12, 2014]



Sec. 10.37  Requirements for written advice.

    (a) Requirements. (1) A practitioner may give written advice
(including by means of electronic communication) concerning one or more
Federal tax matters subject to the requirements in paragraph (a)(2) of
this section. Government submissions on matters of general policy are
not considered written advice on a Federal tax matter for purposes of
this section. Continuing education presentations provided to an audience
solely for the purpose of enhancing practitioners' professional
knowledge on Federal tax matters are not considered written advice on a
Federal tax matter for purposes of this section. The preceding sentence
does not apply to presentations marketing or promoting transactions.
    (2) The practitioner must--
    (i) Base the written advice on reasonable factual and legal
assumptions (including assumptions as to future events);
    (ii) Reasonably consider all relevant facts and circumstances that
the practitioner knows or reasonably should know;
    (iii) Use reasonable efforts to identify and ascertain the facts
relevant to written advice on each Federal tax matter;
    (iv) Not rely upon representations, statements, findings, or
agreements (including projections, financial forecasts, or appraisals)
of the taxpayer or any other person if reliance on them would be
unreasonable;
    (v) Relate applicable law and authorities to facts; and
    (vi) Not, in evaluating a Federal tax matter, take into account the
possibility that a tax return will not be audited or that a matter will
not be raised on audit.
    (3) Reliance on representations, statements, findings, or agreements
is unreasonable if the practitioner knows or reasonably should know that
one or more representations or assumptions on which any representation
is based are incorrect, incomplete, or inconsistent.
    (b) Reliance on advice of others. A practitioner may only rely on
the advice of another person if the advice was reasonable and the
reliance is in good faith considering all the facts and circumstances.
Reliance is not reasonable when--
    (1) The practitioner knows or reasonably should know that the
opinion of the other person should not be relied on;
    (2) The practitioner knows or reasonably should know that the other
person is not competent or lacks the necessary qualifications to provide
the advice; or

[[Page 152]]

    (3) The practitioner knows or reasonably should know that the other
person has a conflict of interest in violation of the rules described in
this part.
    (c) Standard of review. (1) In evaluating whether a practitioner
giving written advice concerning one or more Federal tax matters
complied with the requirements of this section, the Commissioner, or
delegate, will apply a reasonable practitioner standard, considering all
facts and circumstances, including, but not limited to, the scope of the
engagement and the type and specificity of the advice sought by the
client.
    (2) In the case of an opinion the practitioner knows or has reason
to know will be used or referred to by a person other than the
practitioner (or a person who is a member of, associated with, or
employed by the practitioner's firm) in promoting, marketing, or
recommending to one or more taxpayers a partnership or other entity,
investment plan or arrangement a significant purpose of which is the
avoidance or evasion of any tax imposed by the Internal Revenue Code,
the Commissioner, or delegate, will apply a reasonable practitioner
standard, considering all facts and circumstances, with emphasis given
to the additional risk caused by the practitioner's lack of knowledge of
the taxpayer's particular circumstances, when determining whether a
practitioner has failed to comply with this section.
    (d) Federal tax matter. A Federal tax matter, as used in this
section, is any matter concerning the application or interpretation of--
    (1) A revenue provision as defined in section 6110(i)(1)(B) of the
Internal Revenue Code;
    (2) Any provision of law impacting a person's obligations under the
internal revenue laws and regulations, including but not limited to the
person's liability to pay tax or obligation to file returns; or
    (3) Any other law or regulation administered by the Internal Revenue
Service.
    (e) Effective/applicability date. This section is applicable to
written advice rendered after June 12, 2014.

[T.D. 9668, 79 FR 33693, June 12, 2014]



Sec. 10.38  Establishment of advisory committees.

    (a) Advisory committees. To promote and maintain the public's
confidence in tax advisors, the Internal Revenue Service is authorized
to establish one or more advisory committees composed of at least six
individuals authorized to practice before the Internal Revenue Service.
Membership of an advisory committee must be balanced among those who
practice as attorneys, accountants, enrolled agents, enrolled actuaries,
enrolled retirement plan agents, and registered tax return preparers.
Under procedures prescribed by the Internal Revenue Service, an advisory
committee may review and make general recommendations regarding the
practices, procedures, and policies of the offices described in Sec.
10.1.
    (b) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9527, 76 FR 32308, June 3, 2011]



          Subpart C_Sanctions for Violation of the Regulations

    Source: T.D. 9011, 67 FR 48774, July 26, 2002, unless otherwise
noted.



Sec. 10.50  Sanctions.

    (a) Authority to censure, suspend, or disbar. The Secretary of the
Treasury, or delegate, after notice and an opportunity for a proceeding,
may censure, suspend, or disbar any practitioner from practice before
the Internal Revenue Service if the practitioner is shown to be
incompetent or disreputable (within the meaning of Sec. 10.51), fails
to comply with any regulation in this part (under the prohibited conduct
standards of Sec. 10.52), or with intent to defraud, willfully and
knowingly misleads or threatens a client or prospective client. Censure
is a public reprimand.
    (b) Authority to disqualify. The Secretary of the Treasury, or
delegate, after due notice and opportunity for hearing, may disqualify
any appraiser for a violation of these rules as applicable to
appraisers.

[[Page 153]]

    (1) If any appraiser is disqualified pursuant to this subpart C, the
appraiser is barred from presenting evidence or testimony in any
administrative proceeding before the Department of Treasury or the
Internal Revenue Service, unless and until authorized to do so by the
Internal Revenue Service pursuant to Sec. 10.81, regardless of whether
the evidence or testimony would pertain to an appraisal made prior to or
after the effective date of disqualification.
    (2) Any appraisal made by a disqualified appraiser after the
effective date of disqualification will not have any probative effect in
any administrative proceeding before the Department of the Treasury or
the Internal Revenue Service. An appraisal otherwise barred from
admission into evidence pursuant to this section may be admitted into
evidence solely for the purpose of determining the taxpayer's reliance
in good faith on such appraisal.
    (c) Authority to impose monetary penalty--(1) In general. (i) The
Secretary of the Treasury, or delegate, after notice and an opportunity
for a proceeding, may impose a monetary penalty on any practitioner who
engages in conduct subject to sanction under paragraph (a) of this
section.
    (ii) If the practitioner described in paragraph (c)(1)(i) of this
section was acting on behalf of an employer or any firm or other entity
in connection with the conduct giving rise to the penalty, the Secretary
of the Treasury, or delegate, may impose a monetary penalty on the
employer, firm, or entity if it knew, or reasonably should have known,
of such conduct.
    (2) Amount of penalty. The amount of the penalty shall not exceed
the gross income derived (or to be derived) from the conduct giving rise
to the penalty.
    (3) Coordination with other sanctions. Subject to paragraph (c)(2)
of this section--
    (i) Any monetary penalty imposed on a practitioner under this
paragraph (c) may be in addition to or in lieu of any suspension,
disbarment or censure and may be in addition to a penalty imposed on an
employer, firm or other entity under paragraph (c)(1)(ii) of this
section.
    (ii) Any monetary penalty imposed on an employer, firm or other
entity may be in addition to or in lieu of penalties imposed under
paragraph (c)(1)(i) of this section.
    (d) Authority to accept a practitioner's consent to sanction. The
Internal Revenue Service may accept a practitioner's offer of consent to
be sanctioned under Sec. 10.50 in lieu of instituting or continuing a
proceeding under Sec. 10.60(a).
    (e) Sanctions to be imposed. The sanctions imposed by this section
shall take into account all relevant facts and circumstances.
    (f) Effective/applicability date. This section is applicable to
conduct occurring on or after August 2, 2011, except that paragraphs
(a), (b)(2), and (e) apply to conduct occurring on or after September
26, 2007, and paragraph (c) applies to prohibited conduct that occurs
after October 22, 2004.

[T.D. 9359, 72 FR 54549, Sept. 26, 2007, as amended by T.D. 9527, 76 FR
32308, June 3, 2011]



Sec. 10.51  Incompetence and disreputable conduct.

    (a) Incompetence and disreputable conduct. Incompetence and
disreputable conduct for which a practitioner may be sanctioned under
Sec. 10.50 includes, but is not limited to--
    (1) Conviction of any criminal offense under the Federal tax laws.
    (2) Conviction of any criminal offense involving dishonesty or
breach of trust.
    (3) Conviction of any felony under Federal or State law for which
the conduct involved renders the practitioner unfit to practice before
the Internal Revenue Service.
    (4) Giving false or misleading information, or participating in any
way in the giving of false or misleading information to the Department
of the Treasury or any officer or employee thereof, or to any tribunal
authorized to pass upon Federal tax matters, in connection with any
matter pending or likely to be pending before them, knowing the
information to be false or misleading. Facts or other matters contained
in testimony, Federal tax returns, financial statements, applications
for enrollment, affidavits, declarations, and any other document or

[[Page 154]]

statement, written or oral, are included in the term ``information.''
    (5) Solicitation of employment as prohibited under Sec. 10.30, the
use of false or misleading representations with intent to deceive a
client or prospective client in order to procure employment, or
intimating that the practitioner is able improperly to obtain special
consideration or action from the Internal Revenue Service or any officer
or employee thereof.
    (6) Willfully failing to make a Federal tax return in violation of
the Federal tax laws, or willfully evading, attempting to evade, or
participating in any way in evading or attempting to evade any
assessment or payment of any Federal tax.
    (7) Willfully assisting, counseling, encouraging a client or
prospective client in violating, or suggesting to a client or
prospective client to violate, any Federal tax law, or knowingly
counseling or suggesting to a client or prospective client an illegal
plan to evade Federal taxes or payment thereof.
    (8) Misappropriation of, or failure properly or promptly to remit,
funds received from a client for the purpose of payment of taxes or
other obligations due the United States.
    (9) Directly or indirectly attempting to influence, or offering or
agreeing to attempt to influence, the official action of any officer or
employee of the Internal Revenue Service by the use of threats, false
accusations, duress or coercion, by the offer of any special inducement
or promise of an advantage, or by the bestowing of any gift, favor or
thing of value.
    (10) Disbarment or suspension from practice as an attorney,
certified public accountant, public accountant or actuary by any duly
constituted authority of any State, territory, or possession of the
United States, including a Commonwealth, or the District of Columbia,
any Federal court of record or any Federal agency, body or board.
    (11) Knowingly aiding and abetting another person to practice before
the Internal Revenue Service during a period of suspension, disbarment
or ineligibility of such other person.
    (12) Contemptuous conduct in connection with practice before the
Internal Revenue Service, including the use of abusive language, making
false accusations or statements, knowing them to be false or circulating
or publishing malicious or libelous matter.
    (13) Giving a false opinion, knowingly, recklessly, or through gross
incompetence, including an opinion which is intentionally or recklessly
misleading, or engaging in a pattern of providing incompetent opinions
on questions arising under the Federal tax laws. False opinions
described in this paragraph (a)(13) include those which reflect or
result from a knowing misstatement of fact or law, from an assertion of
a position known to be unwarranted under existing law, from counseling
or assisting in conduct known to be illegal or fraudulent, from
concealing matters required by law to be revealed, or from consciously
disregarding information indicating that material facts expressed in the
opinion or offering material are false or misleading. For purposes of
this paragraph (a)(13), reckless conduct is a highly unreasonable
omission or misrepresentation involving an extreme departure from the
standards of ordinary care that a practitioner should observe under the
circumstances. A pattern of conduct is a factor that will be taken into
account in determining whether a practitioner acted knowingly,
recklessly, or through gross incompetence. Gross incompetence includes
conduct that reflects gross indifference, preparation which is grossly
inadequate under the circumstances, and a consistent failure to perform
obligations to the client.
    (14) Willfully failing to sign a tax return prepared by the
practitioner when the practitioner's signature is required by the
Federal tax laws unless the failure is due to reasonable cause and not
due to willful neglect.
    (15) Willfully disclosing or otherwise using a tax return or tax
return information in a manner not authorized by the Internal Revenue
Code, contrary to the order of a court of competent jurisdiction, or
contrary to the order of an administrative law judge in a proceeding
instituted under Sec. 10.60.
    (16) Willfully failing to file on magnetic or other electronic media
a tax return prepared by the practitioner when the practitioner is
required to do

[[Page 155]]

so by the Federal tax laws unless the failure is due to reasonable cause
and not due to willful neglect.
    (17) Willfully preparing all or substantially all of, or signing, a
tax return or claim for refund when the practitioner does not possess a
current or otherwise valid preparer tax identification number or other
prescribed identifying number.
    (18) Willfully representing a taxpayer before an officer or employee
of the Internal Revenue Service unless the practitioner is authorized to
do so pursuant to this part.
    (b) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9359, 72 FR 54550, Sept. 26, 2007, as amended by T.D. 9527, 76 FR
32308, June 3, 2011]



Sec. 10.52  Violations subject to sanction.

    (a) A practitioner may be sanctioned under Sec. 10.50 if the
practitioner--
    (1) Willfully violates any of the regulations (other than Sec.
10.33) contained in this part; or
    (2) Recklessly or through gross incompetence (within the meaning of
Sec. 10.51(a)(13)) violates Sec. Sec. 10.34, 10.35, 10.36 or 10.37.
    (b) Effective/applicability date. This section is applicable to
conduct occurring on or after September 26, 2007.

[T.D. 9359, 72 FR 54551, Sept. 26, 2007]



Sec. 10.53  Receipt of information concerning practitioner.

    (a) Officer or employee of the Internal Revenue Service. If an
officer or employee of the Internal Revenue Service has reason to
believe a practitioner has violated any provision of this part, the
officer or employee will promptly make a written report of the suspected
violation. The report will explain the facts and reasons upon which the
officer's or employee's belief rests and must be submitted to the
office(s) of the Internal Revenue Service responsible for administering
or enforcing this part.
    (b) Other persons. Any person other than an officer or employee of
the Internal Revenue Service having information of a violation of any
provision of this part may make an oral or written report of the alleged
violation to the office(s) of the Internal Revenue Service responsible
for administering or enforcing this part or any officer or employee of
the Internal Revenue Service. If the report is made to an officer or
employee of the Internal Revenue Service, the officer or employee will
make a written report of the suspected violation and submit the report
to the office(s) of the Internal Revenue Service responsible for
administering or enforcing this part.
    (c) Destruction of report. No report made under paragraph (a) or (b)
of this section shall be maintained unless retention of the report is
permissible under the applicable records control schedule as approved by
the National Archives and Records Administration and designated in the
Internal Revenue Manual. Reports must be destroyed as soon as
permissible under the applicable records control schedule.
    (d) Effect on proceedings under subpart D. The destruction of any
report will not bar any proceeding under subpart D of this part, but
will preclude the use of a copy of the report in a proceeding under
subpart D of this part.
    (e) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9527, 76 FR 32308, June 3, 2011]



         Subpart D_Rules Applicable to Disciplinary Proceedings

    Source: T.D. 9011, 67 FR 48774, July 26, 2002, unless otherwise
noted.



Sec. 10.60  Institution of proceeding.

    (a) Whenever it is determined that a practitioner (or employer, firm
or other entity, if applicable) violated any provision of the laws
governing practice before the Internal Revenue Service or the
regulations in this part, the practitioner may be reprimanded or, in
accordance with Sec. 10.62, subject to a proceeding for sanctions
described in Sec. 10.50.
    (b) Whenever a penalty has been assessed against an appraiser under
the Internal Revenue Code and an appropriate officer or employee in an
office

[[Page 156]]

established to enforce this part determines that the appraiser acted
willfully, recklessly, or through gross incompetence with respect to the
proscribed conduct, the appraiser may be reprimanded or, in accordance
with Sec. 10.62, subject to a proceeding for disqualification. A
proceeding for disqualification of an appraiser is instituted by the
filing of a complaint, the contents of which are more fully described in
Sec. 10.62.
    (c) Except as provided in Sec. 10.82, a proceeding will not be
instituted under this section unless the proposed respondent previously
has been advised in writing of the law, facts and conduct warranting
such action and has been accorded an opportunity to dispute facts,
assert additional facts, and make arguments (including an explanation or
description of mitigating circumstances).
    (d) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9011, 67 FR 48765, July 26, 2002, as amended by T.D. 9359, 72 FR
54544, 54551, Sept. 26, 2007; T.D. 9527, 76 FR 32309, June 3, 2011; 76
FR 49650, Aug. 11, 2011]



Sec. 10.61  Conferences.

    (a) In general. The Commissioner, or delegate, may confer with a
practitioner, employer, firm or other entity, or an appraiser concerning
allegations of misconduct irrespective of whether a proceeding has been
instituted. If the conference results in a stipulation in connection
with an ongoing proceeding in which the practitioner, employer, firm or
other entity, or appraiser is the respondent, the stipulation may be
entered in the record by either party to the proceeding.
    (b) Voluntary sanction--(1) In general. In lieu of a proceeding
being instituted or continued under Sec. 10.60(a), a practitioner or
appraiser (or employer, firm or other entity, if applicable) may offer a
consent to be sanctioned under Sec. 10.50.
    (2) Discretion; acceptance or declination. The Commissioner, or
delegate, may accept or decline the offer described in paragraph (b)(1)
of this section. When the decision is to decline the offer, the written
notice of declination may state that the offer described in paragraph
(b)(1) of this section would be accepted if it contained different
terms. The Commissioner, or delegate, has the discretion to accept or
reject a revised offer submitted in response to the declination or may
counteroffer and act upon any accepted counteroffer.
    (c) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9359, 72 FR 54551, Sept. 26, 2007, as amended by T.D. 9527, 76 FR
32309, June 3, 2011]



Sec. 10.62  Contents of complaint.

    (a) Charges. A complaint must name the respondent, provide a clear
and concise description of the facts and law that constitute the basis
for the proceeding, and be signed by an authorized representative of the
Internal Revenue Service under Sec. 10.69(a)(1). A complaint is
sufficient if it fairly informs the respondent of the charges brought so
that the respondent is able to prepare a defense.
    (b) Specification of sanction. The complaint must specify the
sanction sought against the practitioner or appraiser. If the sanction
sought is a suspension, the duration of the suspension sought must be
specified.
    (c) Demand for answer. The respondent must be notified in the
complaint or in a separate paper attached to the complaint of the time
for answering the complaint, which may not be less than 30 days from the
date of service of the complaint, the name and address of the
Administrative Law Judge with whom the answer must be filed, the name
and address of the person representing the Internal Revenue Service to
whom a copy of the answer must be served, and that a decision by default
may be rendered against the respondent in the event an answer is not
filed as required.
    (d) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9527, 76 FR 32309, June 3, 2011]

[[Page 157]]



Sec. 10.63  Service of complaint; service of other papers; service of
evidence in support of complaint; filing of papers.

    (a) Service of complaint--(1) In general. The complaint or a copy of
the complaint must be served on the respondent by any manner described
in paragraphs (a)(2) or (3) of this section.
    (2) Service by certified or first class mail. (i) Service of the
complaint may be made on the respondent by mailing the complaint by
certified mail to the last known address (as determined under section
6212 of the Internal Revenue Code and the regulations thereunder) of the
respondent. Where service is by certified mail, the returned post office
receipt duly signed by the respondent will be proof of service.
    (ii) If the certified mail is not claimed or accepted by the
respondent, or is returned undelivered, service may be made on the
respondent, by mailing the complaint to the respondent by first class
mail. Service by this method will be considered complete upon mailing,
provided the complaint is addressed to the respondent at the
respondent's last known address as determined under section 6212 of the
Internal Revenue Code and the regulations thereunder.
    (3) Service by other than certified or first class mail. (i) Service
of the complaint may be made on the respondent by delivery by a private
delivery service designated pursuant to section 7502(f) of the Internal
Revenue Code to the last known address (as determined under section 6212
of the Internal Revenue Code and the regulations thereunder) of the
respondent. Service by this method will be considered complete, provided
the complaint is addressed to the respondent at the respondent's last
known address as determined under section 6212 of the Internal Revenue
Code and the regulations thereunder.
    (ii) Service of the complaint may be made in person on, or by
leaving the complaint at the office or place of business of, the
respondent. Service by this method will be considered complete and proof
of service will be a written statement, sworn or affirmed by the person
who served the complaint, identifying the manner of service, including
the recipient, relationship of recipient to respondent, place, date and
time of service.
    (iii) Service may be made by any other means agreed to by the
respondent. Proof of service will be a written statement, sworn or
affirmed by the person who served the complaint, identifying the manner
of service, including the recipient, relationship of recipient to
respondent, place, date and time of service.
    (4) For purposes of this section, respondent means the practitioner,
employer, firm or other entity, or appraiser named in the complaint or
any other person having the authority to accept mail on behalf of the
practitioner, employer, firm or other entity, or appraiser.
    (b) Service of papers other than complaint. Any paper other than the
complaint may be served on the respondent, or his or her authorized
representative under Sec. 10.69(a)(2) by:
    (1) Mailing the paper by first class mail to the last known address
(as determined under section 6212 of the Internal Revenue Code and the
regulations thereunder) of the respondent or the respondent's authorized
representative,
    (2) Delivery by a private delivery service designated pursuant to
section 7502(f) of the Internal Revenue Code to the last known address
(as determined under section 6212 of the Internal Revenue Code and the
regulations thereunder) of the respondent or the respondent's authorized
representative, or
    (3) As provided in paragraphs (a)(3)(ii) and (a)(3)(iii) of this
section.
    (c) Service of papers on the Internal Revenue Service. Whenever a
paper is required or permitted to be served on the Internal Revenue
Service in connection with a proceeding under this part, the paper will
be served on the Internal Revenue Service's authorized representative
under Sec. 10.69(a)(1) at the address designated in the complaint, or
at an address provided in a notice of appearance. If no address is
designated in the complaint or provided in a notice of appearance,
service will be made on the office(s) established to enforce this part
under the authority of Sec. 10.1,

[[Page 158]]

Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC
20224.
    (d) Service of evidence in support of complaint. Within 10 days of
serving the complaint, copies of the evidence in support of the
complaint must be served on the respondent in any manner described in
paragraphs (a)(2) and (3) of this section.
    (e) Filing of papers. Whenever the filing of a paper is required or
permitted in connection with a proceeding under this part, the original
paper, plus one additional copy, must be filed with the Administrative
Law Judge at the address specified in the complaint or at an address
otherwise specified by the Administrative Law Judge. All papers filed in
connection with a proceeding under this part must be served on the other
party, unless the Administrative Law Judge directs otherwise. A
certificate evidencing such must be attached to the original paper filed
with the Administrative Law Judge.
    (f) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9011, 67 FR 48765, July 26, 2002, as amended by T.D. 9359, 72 FR
54544, 54552, Sept. 26, 2007; T.D. 9527, 76 FR 32309, June 3, 2011]



Sec. 10.64  Answer; default.

    (a) Filing. The respondent's answer must be filed with the
Administrative Law Judge, and served on the Internal Revenue Service,
within the time specified in the complaint unless, on request or
application of the respondent, the time is extended by the
Administrative Law Judge.
    (b) Contents. The answer must be written and contain a statement of
facts that constitute the respondent's grounds of defense. General
denials are not permitted. The respondent must specifically admit or
deny each allegation set forth in the complaint, except that the
respondent may state that the respondent is without sufficient
information to admit or deny a specific allegation. The respondent,
nevertheless, may not deny a material allegation in the complaint that
the respondent knows to be true, or state that the respondent is without
sufficient information to form a belief, when the respondent possesses
the required information. The respondent also must state affirmatively
any special matters of defense on which he or she relies.
    (c) Failure to deny or answer allegations in the complaint. Every
allegation in the complaint that is not denied in the answer is deemed
admitted and will be considered proved; no further evidence in respect
of such allegation need be adduced at a hearing.
    (d) Default. Failure to file an answer within the time prescribed
(or within the time for answer as extended by the Administrative Law
Judge), constitutes an admission of the allegations of the complaint and
a waiver of hearing, and the Administrative Law Judge may make the
decision by default without a hearing or further procedure. A decision
by default constitutes a decision under Sec. 10.76.
    (e) Signature. The answer must be signed by the respondent or the
respondent's authorized representative under Sec. 10.69(a)(2) and must
include a statement directly above the signature acknowledging that the
statements made in the answer are true and correct and that knowing and
willful false statements may be punishable under 18 U.S.C. 1001.
    (f) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9011, 67 FR 48774, July 26, 2002, as amended by T.D. 9527, 76 FR
32309, June 3, 2011]



Sec. 10.65  Supplemental charges.

    (a) In general. Supplemental charges may be filed against the
respondent by amending the complaint with the permission of the
Administrative Law Judge if, for example--
    (1) It appears that the respondent, in the answer, falsely and in
bad faith, denies a material allegation of fact in the complaint or
states that the respondent has insufficient knowledge to form a belief,
when the respondent possesses such information; or
    (2) It appears that the respondent has knowingly introduced false
testimony during the proceedings against the respondent.
    (b) Hearing. The supplemental charges may be heard with other

[[Page 159]]

charges in the case, provided the respondent is given due notice of the
charges and is afforded a reasonable opportunity to prepare a defense to
the supplemental charges.
    (c) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9359, 72 FR 54552, Sept. 26, 2007, as amended by T.D. 9527, 76 FR
32309, June 3, 2011]



Sec. 10.66  Reply to answer.

    (a) The Internal Revenue Service may file a reply to the
respondent's answer, but unless otherwise ordered by the Administrative
Law Judge, no reply to the respondent's answer is required. If a reply
is not filed, new matter in the answer is deemed denied.
    (b) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9527, 76 FR 32309, June 3, 2011]



Sec. 10.67  Proof; variance; amendment of pleadings.

    In the case of a variance between the allegations in pleadings and
the evidence adduced in support of the pleadings, the Administrative Law
Judge, at any time before decision, may order or authorize amendment of
the pleadings to conform to the evidence. The party who would otherwise
be prejudiced by the amendment must be given a reasonable opportunity to
address the allegations of the pleadings as amended and the
Administrative Law Judge must make findings on any issue presented by
the pleadings as amended.



Sec. 10.68  Motions and requests.

    (a) Motions--(1) In general. At any time after the filing of the
complaint, any party may file a motion with the Administrative Law
Judge. Unless otherwise ordered by the Administrative Law Judge, motions
must be in writing and must be served on the opposing party as provided
in Sec. 10.63(b). A motion must concisely specify its grounds and the
relief sought, and, if appropriate, must contain a memorandum of facts
and law in support.
    (2) Summary adjudication. Either party may move for a summary
adjudication upon all or any part of the legal issues in controversy. If
the non-moving party opposes summary adjudication in the moving party's
favor, the non-moving party must file a written response within 30 days
unless ordered otherwise by the Administrative Law Judge.
    (3) Good Faith. A party filing a motion for extension of time, a
motion for postponement of a hearing, or any other non-dispositive or
procedural motion must first contact the other party to determine
whether there is any objection to the motion, and must state in the
motion whether the other party has an objection.
    (b) Response. Unless otherwise ordered by the Administrative Law
Judge, the nonmoving party is not required to file a response to a
motion. If the Administrative Law Judge does not order the nonmoving
party to file a response, and the nonmoving party files no response, the
nonmoving party is deemed to oppose the motion. If a nonmoving party
does not respond within 30 days of the filing of a motion for decision
by default for failure to file a timely answer or for failure to
prosecute, the nonmoving party is deemed not to oppose the motion.
    (c) Oral motions; oral argument--(1) The Administrative Law Judge
may, for good cause and with notice to the parties, permit oral motions
and oral opposition to motions.
    (2) The Administrative Law Judge may, within his or her discretion,
permit oral argument on any motion.
    (d) Orders. The Administrative Law Judge should issue written orders
disposing of any motion or request and any response thereto.
    (e) Effective/applicability date. This section is applicable on
September 26, 2007.

[T.D. 9359, 72 FR 54552, Sept. 26, 2007]



Sec. 10.69  Representation; ex parte communication.

    (a) Representation. (1) The Internal Revenue Service may be
represented in proceedings under this part by an attorney or other
employee of the Internal Revenue Service. An attorney or an employee of
the Internal Revenue Service representing the Internal Revenue Service
in a proceeding under this part may sign the complaint or any

[[Page 160]]

document required to be filed in the proceeding on behalf of the
Internal Revenue Service.
    (2) A respondent may appear in person, be represented by a
practitioner, or be represented by an attorney who has not filed a
declaration with the Internal Revenue Service pursuant to Sec. 10.3. A
practitioner or an attorney representing a respondent or proposed
respondent may sign the answer or any document required to be filed in
the proceeding on behalf of the respondent.
    (b) Ex parte communication. The Internal Revenue Service, the
respondent, and any representatives of either party, may not attempt to
initiate or participate in ex parte discussions concerning a proceeding
or potential proceeding with the Administrative Law Judge (or any person
who is likely to advise the Administrative Law Judge on a ruling or
decision) in the proceeding before or during the pendency of the
proceeding. Any memorandum, letter or other communication concerning the
merits of the proceeding, addressed to the Administrative Law Judge, by
or on behalf of any party shall be regarded as an argument in the
proceeding and shall be served on the other party.
    (c) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9527, 76 FR 32310, June 3, 2011, as amended by 76 FR 49650, Aug.
11, 2011]



Sec. 10.70  Administrative Law Judge.

    (a) Appointment. Proceedings on complaints for the sanction (as
described in Sec. 10.50) of a practitioner, employer, firm or other
entity, or appraiser will be conducted by an Administrative Law Judge
appointed as provided by 5 U.S.C. 3105.
    (b) Powers of the Administrative Law Judge. The Administrative Law
Judge, among other powers, has the authority, in connection with any
proceeding under Sec. 10.60 assigned or referred to him or her, to do
the following:
    (1) Administer oaths and affirmations;
    (2) Make rulings on motions and requests, which rulings may not be
appealed prior to the close of a hearing except in extraordinary
circumstances and at the discretion of the Administrative Law Judge;
    (3) Determine the time and place of hearing and regulate its course
and conduct;
    (4) Adopt rules of procedure and modify the same from time to time
as needed for the orderly disposition of proceedings;
    (5) Rule on offers of proof, receive relevant evidence, and examine
witnesses;
    (6) Take or authorize the taking of depositions or answers to
requests for admission;
    (7) Receive and consider oral or written argument on facts or law;
    (8) Hold or provide for the holding of conferences for the
settlement or simplification of the issues with the consent of the
parties;
    (9) Perform such acts and take such measures as are necessary or
appropriate to the efficient conduct of any proceeding; and
    (10) Make decisions.
    (c) Effective/applicability date. This section is applicable on
September 26, 2007.

[T.D. 9011, 67 FR 48765, July 26, 2002, as amended by T.D. 9359, 72 FR
54552, Sept. 26, 2007]



Sec. 10.71  Discovery.

    (a) In general. Discovery may be permitted, at the discretion of the
Administrative Law Judge, only upon written motion demonstrating the
relevance, materiality and reasonableness of the requested discovery and
subject to the requirements of Sec. 10.72(d)(2) and (3). Within 10 days
of receipt of the answer, the Administrative Law Judge will notify the
parties of the right to request discovery and the timeframes for filing
a request. A request for discovery, and objections, must be filed in
accordance with Sec. 10.68. In response to a request for discovery, the
Administrative Law Judge may order--
    (1) Depositions upon oral examination; or
    (2) Answers to requests for admission.
    (b) Depositions upon oral examination--(1) A deposition must be
taken before an officer duly authorized to administer an oath for
general purposes or

[[Page 161]]

before an officer or employee of the Internal Revenue Service who is
authorized to administer an oath in Federal tax law matters.
    (2) In ordering a deposition, the Administrative Law Judge will
require reasonable notice to the opposing party as to the time and place
of the deposition. The opposing party, if attending, will be provided
the opportunity for full examination and cross-examination of any
witness.
    (3) Expenses in the reporting of depositions shall be borne by the
party at whose instance the deposition is taken. Travel expenses of the
deponent shall be borne by the party requesting the deposition, unless
otherwise authorized by Federal law or regulation.
    (c) Requests for admission. Any party may serve on any other party a
written request for admission of the truth of any matters which are not
privileged and are relevant to the subject matter of this proceeding.
Requests for admission shall not exceed a total of 30 (including any
subparts within a specific request) without the approval from the
Administrative Law Judge.
    (d) Limitations. Discovery shall not be authorized if--
    (1) The request fails to meet any requirement set forth in paragraph
(a) of this section;
    (2) It will unduly delay the proceeding;
    (3) It will place an undue burden on the party required to produce
the discovery sought;
    (4) It is frivolous or abusive;
    (5) It is cumulative or duplicative;
    (6) The material sought is privileged or otherwise protected from
disclosure by law;
    (7) The material sought relates to mental impressions, conclusions,
or legal theories of any party, attorney, or other representative, of a
party prepared in anticipation of a proceeding; or
    (8) The material sought is available generally to the public,
equally to the parties, or to the party seeking the discovery through
another source.
    (e) Failure to comply. Where a party fails to comply with an order
of the Administrative Law Judge under this section, the Administrative
Law Judge may, among other things, infer that the information would be
adverse to the party failing to provide it, exclude the information from
evidence or issue a decision by default.
    (f) Other discovery. No discovery other than that specifically
provided for in this section is permitted.
    (g) Effective/applicability date. This section is applicable to
proceedings initiated on or after September 26, 2007.

[T.D. 9359, 72 FR 54552, Sept. 26, 2007]



Sec. 10.72  Hearings.

    (a) In general--(1) Presiding officer. An Administrative Law Judge
will preside at the hearing on a complaint filed under Sec. 10.60 for
the sanction of a practitioner, employer, firm or other entity, or
appraiser.
    (2) Time for hearing. Absent a determination by the Administrative
Law Judge that, in the interest of justice, a hearing must be held at a
later time, the Administrative Law Judge should, on notice sufficient to
allow proper preparation, schedule the hearing to occur no later than
180 days after the time for filing the answer.
    (3) Procedural requirements. (i) Hearings will be stenographically
recorded and transcribed and the testimony of witnesses will be taken
under oath or affirmation.
    (ii) Hearings will be conducted pursuant to 5 U.S.C. 556.
    (iii) A hearing in a proceeding requested under Sec. 10.82(g) will
be conducted de novo.
    (iv) An evidentiary hearing must be held in all proceedings prior to
the issuance of a decision by the Administrative Law Judge unless--
    (A) The Internal Revenue Service withdraws the complaint;
    (B) A decision is issued by default pursuant to Sec. 10.64(d);
    (C) A decision is issued under Sec. 10.82(e);
    (D) The respondent requests a decision on the written record without
a hearing; or
    (E) The Administrative Law Judge issues a decision under Sec.
10.68(d) or rules on another motion that disposes of the case prior to
the hearing.
    (b) Cross-examination. A party is entitled to present his or her
case or defense by oral or documentary evidence, to submit rebuttal
evidence, and to

[[Page 162]]

conduct cross-examination, in the presence of the Administrative Law
Judge, as may be required for a full and true disclosure of the facts.
This paragraph (b) does not limit a party from presenting evidence
contained within a deposition when the Administrative Law Judge
determines that the deposition has been obtained in compliance with the
rules of this subpart D.
    (c) Prehearing memorandum. Unless otherwise ordered by the
Administrative Law Judge, each party shall file, and serve on the
opposing party or the opposing party's representative, prior to any
hearing, a prehearing memorandum containing--
    (1) A list (together with a copy) of all proposed exhibits to be
used in the party's case in chief;
    (2) A list of proposed witnesses, including a synopsis of their
expected testimony, or a statement that no witnesses will be called;
    (3) Identification of any proposed expert witnesses, including a
synopsis of their expected testimony and a copy of any report prepared
by the expert or at his or her direction; and
    (4) A list of undisputed facts.
    (d) Publicity--(1) In general. All reports and decisions of the
Secretary of the Treasury, or delegate, including any reports and
decisions of the Administrative Law Judge, under this subpart D are,
subject to the protective measures in paragraph (d)(4) of this section,
public and open to inspection within 30 days after the agency's decision
becomes final.
    (2) Request for additional publicity. The Administrative Law Judge
may grant a request by a practitioner or appraiser that all the
pleadings and evidence of the disciplinary proceeding be made available
for inspection where the parties stipulate in advance to adopt the
protective measures in paragraph (d)(4) of this section.
    (3) Returns and return information--(i) Disclosure to practitioner
or appraiser. Pursuant to section 6103(l)(4) of the Internal Revenue
Code, the Secretary of the Treasury, or delegate, may disclose returns
and return information to any practitioner or appraiser, or to the
authorized representative of the practitioner or appraiser, whose rights
are or may be affected by an administrative action or proceeding under
this subpart D, but solely for use in the action or proceeding and only
to the extent that the Secretary of the Treasury, or delegate,
determines that the returns or return information are or may be relevant
and material to the action or proceeding.
    (ii) Disclosure to officers and employees of the Department of the
Treasury. Pursuant to section 6103(l)(4)(B) of the Internal Revenue
Code, the Secretary of the Treasury, or delegate, may disclose returns
and return information to officers and employees of the Department of
the Treasury for use in any action or proceeding under this subpart D,
to the extent necessary to advance or protect the interests of the
United States.
    (iii) Use of returns and return information. Recipients of returns
and return information under this paragraph (d)(3) may use the returns
or return information solely in the action or proceeding, or in
preparation for the action or proceeding, with respect to which the
disclosure was made.
    (iv) Procedures for disclosure of returns and return information.
When providing returns or return information to the practitioner or
appraiser, or authorized representative, the Secretary of the Treasury,
or delegate, will--
    (A) Redact identifying information of any third party taxpayers and
replace it with a code;
    (B) Provide a key to the coded information; and
    (C) Notify the practitioner or appraiser, or authorized
representative, of the restrictions on the use and disclosure of the
returns and return information, the applicable damages remedy under
section 7431 of the Internal Revenue Code, and that unauthorized
disclosure of information provided by the Internal Revenue Service under
this paragraph (d)(3) is also a violation of this part.
    (4) Protective measures--(i) Mandatory protective order. If
redaction of names, addresses, and other identifying information of
third party taxpayers may still permit indirect identification of any
third party taxpayer, the Administrative Law Judge will issue a
protective order to ensure that the identifying information is available
to the parties and the Administrative Law

[[Page 163]]

Judge for purposes of the proceeding, but is not disclosed to, or open
to inspection by, the public.
    (ii) Authorized orders. (A) Upon motion by a party or any other
affected person, and for good cause shown, the Administrative Law Judge
may make any order which justice requires to protect any person in the
event disclosure of information is prohibited by law, privileged,
confidential, or sensitive in some other way, including, but not limited
to, one or more of the following--
    (1) That disclosure of information be made only on specified terms
and conditions, including a designation of the time or place;
    (2) That a trade secret or other information not be disclosed, or be
disclosed only in a designated way.
    (iii) Denials. If a motion for a protective order is denied in whole
or in part, the Administrative Law Judge may, on such terms or
conditions as the Administrative Law Judge deems just, order any party
or person to comply with, or respond in accordance with, the procedure
involved.
    (iv) Public inspection of documents. The Secretary of the Treasury,
or delegate, shall ensure that all names, addresses or other identifying
details of third party taxpayers are redacted and replaced with the code
assigned to the corresponding taxpayer in all documents prior to public
inspection of such documents.
    (e) Location. The location of the hearing will be determined by the
agreement of the parties with the approval of the Administrative Law
Judge, but, in the absence of such agreement and approval, the hearing
will be held in Washington, D.C.
    (f) Failure to appear. If either party to the proceeding fails to
appear at the hearing, after notice of the proceeding has been sent to
him or her, the party will be deemed to have waived the right to a
hearing and the Administrative Law Judge may make his or her decision
against the absent party by default.
    (g) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9011, 67 FR 48765, July 26, 2002. Redesignated and amended by T.D.
9359, 72 FR 54552, 54553, Sept. 26, 2007; T.D. 9527, 76 FR 32310, June
3, 2011]



Sec. 10.73  Evidence.

    (a) In general. The rules of evidence prevailing in courts of law
and equity are not controlling in hearings or proceedings conducted
under this part. The Administrative Law Judge may, however, exclude
evidence that is irrelevant, immaterial, or unduly repetitious,
    (b) Depositions. The deposition of any witness taken pursuant to
Sec. 10.71 may be admitted into evidence in any proceeding instituted
under Sec. 10.60.
    (c) Requests for admission. Any matter admitted in response to a
request for admission under Sec. 10.71 is conclusively established
unless the Administrative Law Judge on motion permits withdrawal or
modification of the admission. Any admission made by a party is for the
purposes of the pending action only and is not an admission by a party
for any other purpose, nor may it be used against a party in any other
proceeding.
    (d) Proof of documents. Official documents, records, and papers of
the Internal Revenue Service and the Office of Professional
Responsibility are admissible in evidence without the production of an
officer or employee to authenticate them. Any documents, records, and
papers may be evidenced by a copy attested to or identified by an
officer or employee of the Internal Revenue Service or the Treasury
Department, as the case may be.
    (e) Withdrawal of exhibits. If any document, record, or other paper
is introduced in evidence as an exhibit, the Administrative Law Judge
may authorize the withdrawal of the exhibit subject to any conditions
that he or she deems proper.
    (f) Objections. Objections to evidence are to be made in short form,
stating the grounds for the objection. Except as ordered by the
Administrative Law Judge, argument on objections will not be recorded or
transcribed. Rulings on objections are to be a part of the

[[Page 164]]

record, but no exception to a ruling is necessary to preserve the rights
of the parties.
    (g) Effective/applicability date. This section is applicable on
September 26, 2007.

[T.D. 9011, 67 FR 48765, July 26, 2002. Redesignated and amended by T.D.
9359, 72 FR 54552, 54554, Sept. 26, 2007]



Sec. 10.74  Transcript.

    In cases where the hearing is stenographically reported by a
Government contract reporter, copies of the transcript may be obtained
from the reporter at rates not to exceed the maximum rates fixed by
contract between the Government and the reporter. Where the hearing is
stenographically reported by a regular employee of the Internal Revenue
Service, a copy will be supplied to the respondent either without charge
or upon the payment of a reasonable fee. Copies of exhibits introduced
at the hearing or at the taking of depositions will be supplied to the
parties upon the payment of a reasonable fee (Sec. 501, Public Law 82-
137)(65 Stat. 290)(31 U.S.C. 483a).



Sec. 10.75  Proposed findings and conclusions.

    Except in cases where the respondent has failed to answer the
complaint or where a party has failed to appear at the hearing, the
parties must be afforded a reasonable opportunity to submit proposed
findings and conclusions and their supporting reasons to the
Administrative Law Judge.



Sec. 10.76  Decision of Administrative Law Judge.

    (a) In general--(1) Hearings. Within 180 days after the conclusion
of a hearing and the receipt of any proposed findings and conclusions
timely submitted by the parties, the Administrative Law Judge should
enter a decision in the case. The decision must include a statement of
findings and conclusions, as well as the reasons or basis for making
such findings and conclusions, and an order of censure, suspension,
disbarment, monetary penalty, disqualification, or dismissal of the
complaint.
    (2) Summary adjudication. In the event that a motion for summary
adjudication is filed, the Administrative Law Judge should rule on the
motion for summary adjudication within 60 days after the party in
opposition files a written response, or if no written response is filed,
within 90 days after the motion for summary adjudication is filed. A
decision shall thereafter be rendered if the pleadings, depositions,
admissions, and any other admissible evidence show that there is no
genuine issue of material fact and that a decision may be rendered as a
matter of law. The decision must include a statement of conclusions, as
well as the reasons or basis for making such conclusions, and an order
of censure, suspension, disbarment, monetary penalty, disqualification,
or dismissal of the complaint.
    (3) Returns and return information. In the decision, the
Administrative Law Judge should use the code assigned to third party
taxpayers (described in Sec. 10.72(d)).
    (b) Standard of proof. If the sanction is censure or a suspension of
less than six months' duration, the Administrative Law Judge, in
rendering findings and conclusions, will consider an allegation of fact
to be proven if it is established by the party who is alleging the fact
by a preponderance of the evidence in the record. If the sanction is a
monetary penalty, disbarment or a suspension of six months or longer
duration, an allegation of fact that is necessary for a finding against
the practitioner must be proven by clear and convincing evidence in the
record. An allegation of fact that is necessary for a finding of
disqualification against an appraiser must be proven by clear and
convincing evidence in the record.
    (c) Copy of decision. The Administrative Law Judge will provide the
decision to the Internal Revenue Service's authorized representative,
and a copy of the decision to the respondent or the respondent's
authorized representative.
    (d) When final. In the absence of an appeal to the Secretary of the
Treasury or delegate, the decision of the Administrative Law Judge will,
without further proceedings, become the decision of the agency 30 days
after the date of the Administrative Law Judge's decision.

[[Page 165]]

    (e) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9359, 72 FR 54554, Sept. 26, 2007, as amended by T.D. 9527, 76 FR
32310, June 3, 2011]



Sec. 10.77  Appeal of decision of Administrative Law Judge.

    (a) Appeal. Any party to the proceeding under this subpart D may
appeal the decision of the Administrative Law Judge by filing a notice
of appeal with the Secretary of the Treasury, or delegate deciding
appeals. The notice of appeal must include a brief that states
exceptions to the decision of Administrative Law Judge and supporting
reasons for such exceptions.
    (b) Time and place for filing of appeal. The notice of appeal and
brief must be filed, in duplicate, with the Secretary of the Treasury,
or delegate deciding appeals, at an address for appeals that is
identified to the parties with the decision of the Administrative Law
Judge. The notice of appeal and brief must be filed within 30 days of
the date that the decision of the Administrative Law Judge is served on
the parties. The appealing party must serve a copy of the notice of
appeal and the brief to any non-appealing party or, if the party is
represented, the non-appealing party's representative.
    (c) Response. Within 30 days of receiving the copy of the
appellant's brief, the other party may file a response brief with the
Secretary of the Treasury, or delegate deciding appeals, using the
address identified for appeals. A copy of the response brief must be
served at the same time on the opposing party or, if the party is
represented, the opposing party's representative.
    (d) No other briefs, responses or motions as of right. Other than
the appeal brief and response brief, the parties are not permitted to
file any other briefs, responses or motions, except on a grant of leave
to do so after a motion demonstrating sufficient cause, or unless
otherwise ordered by the Secretary of the Treasury, or delegate deciding
appeals.
    (e) Additional time for briefs and responses. Notwithstanding the
time for filing briefs and responses provided in paragraphs (b) and (c)
of this section, the Secretary of the Treasury, or delegate deciding
appeals, may, for good cause, authorize additional time for filing
briefs and responses upon a motion of a party or upon the initiative of
the Secretary of the Treasury, or delegate deciding appeals.
    (f) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9527, 76 FR 32310, June 3, 2011]



Sec. 10.78  Decision on review.

    (a) Decision on review. On appeal from or review of the decision of
the Administrative Law Judge, the Secretary of the Treasury, or
delegate, will make the agency decision. The Secretary of the Treasury,
or delegate, should make the agency decision within 180 days after
receipt of the appeal.
    (b) Standard of review. The decision of the Administrative Law Judge
will not be reversed unless the appellant establishes that the decision
is clearly erroneous in light of the evidence in the record and
applicable law. Issues that are exclusively matters of law will be
reviewed de novo. In the event that the Secretary of the Treasury, or
delegate, determines that there are unresolved issues raised by the
record, the case may be remanded to the Administrative Law Judge to
elicit additional testimony or evidence.
    (c) Copy of decision on review. The Secretary of the Treasury, or
delegate, will provide copies of the agency decision to the authorized
representative of the Internal Revenue Service and the respondent or the
respondent's authorized representative.
    (d) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9359, 72 FR 54555, Sept. 26, 2007, as amended by T.D. 9527, 76 FR
32310, June 3, 2011]



Sec. 10.79  Effect of disbarment, suspension, or censure.

    (a) Disbarment. When the final decision in a case is against the
respondent (or the respondent has offered his or her consent and such
consent has been

[[Page 166]]

accepted by the Internal Revenue Service) and such decision is for
disbarment, the respondent will not be permitted to practice before the
Internal Revenue Service unless and until authorized to do so by the
Internal Revenue Service pursuant to Sec. 10.81.
    (b) Suspension. When the final decision in a case is against the
respondent (or the respondent has offered his or her consent and such
consent has been accepted by the Internal Revenue Service) and such
decision is for suspension, the respondent will not be permitted to
practice before the Internal Revenue Service during the period of
suspension. For periods after the suspension, the practitioner's future
representations may be subject to conditions as authorized by paragraph
(d) of this section.
    (c) Censure. When the final decision in the case is against the
respondent (or the Internal Revenue Service has accepted the
respondent's offer to consent, if such offer was made) and such decision
is for censure, the respondent will be permitted to practice before the
Internal Revenue Service, but the respondent's future representations
may be subject to conditions as authorized by paragraph (d) of this
section.
    (d) Conditions. After being subject to the sanction of either
suspension or censure, the future representations of a practitioner so
sanctioned shall be subject to specified conditions designed to promote
high standards of conduct. These conditions can be imposed for a
reasonable period in light of the gravity of the practitioner's
violations. For example, where a practitioner is censured because the
practitioner failed to advise the practitioner's clients about a
potential conflict of interest or failed to obtain the clients' written
consents, the practitioner may be required to provide the Internal
Revenue Service with a copy of all consents obtained by the practitioner
for an appropriate period following censure, whether or not such
consents are specifically requested.
    (e) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9527, 76 FR 32310, June 3, 2011]



Sec. 10.80  Notice of disbarment, suspension, censure, or
disqualification.

    (a) In general. On the issuance of a final order censuring,
suspending, or disbarring a practitioner or a final order disqualifying
an appraiser, notification of the censure, suspension, disbarment or
disqualification will be given to appropriate officers and employees of
the Internal Revenue Service and interested departments and agencies of
the Federal government. The Internal Revenue Service may determine the
manner of giving notice to the proper authorities of the State by which
the censured, suspended, or disbarred person was licensed to practice.
    (b) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9527, 76 FR 32311, June 3, 2011]



Sec. 10.81  Petition for reinstatement.

    (a) In general. A practitioner disbarred or suspended under Sec.
10.60, or suspended under Sec. 10.82, or a disqualified appraiser may
petition for reinstatement before the Internal Revenue Service after the
expiration of 5 years following such disbarment, suspension, or
disqualification (or immediately following the expiration of the
suspension or disqualification period, if shorter than 5 years).
Reinstatement will not be granted unless the Internal Revenue Service is
satisfied that the petitioner is not likely to engage thereafter in
conduct contrary to the regulations in this part, and that granting such
reinstatement would not be contrary to the public interest.
    (b) Effective/applicability date. This section is applicable
beginning June 12, 2014.

[T.D. 9668, 79 FR 33694, June 12, 2014]



Sec. 10.82  Expedited suspension.

    (a) When applicable. Whenever the Commissioner, or delegate,
determines that a practitioner is described in paragraph (b) of this
section, the expedited procedures described in this section may be used
to suspend the practitioner from practice before the Internal Revenue
Service.
    (b) To whom applicable. This section applies to any practitioner
who, within 5 years prior to the date that a show

[[Page 167]]

cause order under this section's expedited suspension procedures is
served:
    (1) Has had a license to practice as an attorney, certified public
accountant, or actuary suspended or revoked for cause (not including
failure to pay a professional licensing fee) by any authority or court,
agency, body, or board described in Sec. 10.51(a)(10).
    (2) Has, irrespective of whether an appeal has been taken, been
convicted of any crime under title 26 of the United States Code, any
crime involving dishonesty or breach of trust, or any felony for which
the conduct involved renders the practitioner unfit to practice before
the Internal Revenue Service.
    (3) Has violated conditions imposed on the practitioner pursuant to
Sec. 10.79(d).
    (4) Has been sanctioned by a court of competent jurisdiction,
whether in a civil or criminal proceeding (including suits for
injunctive relief), relating to any taxpayer's tax liability or relating
to the practitioner's own tax liability, for--
    (i) Instituting or maintaining proceedings primarily for delay;
    (ii) Advancing frivolous or groundless arguments; or
    (iii) Failing to pursue available administrative remedies.
    (5) Has demonstrated a pattern of willful disreputable conduct by--
    (i) Failing to make an annual Federal tax return, in violation of
the Federal tax laws, during 4 of the 5 tax years immediately preceding
the institution of a proceeding under paragraph (c) of this section and
remains noncompliant with any of the practitioner's Federal tax filing
obligations at the time the notice of suspension is issued under
paragraph (f) of this section; or
    (ii) Failing to make a return required more frequently than
annually, in violation of the Federal tax laws, during 5 of the 7 tax
periods immediately preceding the institution of a proceeding under
paragraph (c) of this section and remains noncompliant with any of the
practitioner's Federal tax filing obligations at the time the notice of
suspension is issued under paragraph (f) of this section.
    (c) Expedited suspension procedures. A suspension under this section
will be proposed by a show cause order that names the respondent, is
signed by an authorized representative of the Internal Revenue Service
under Sec. 10.69(a)(1), and served according to the rules set forth in
Sec. 10.63(a). The show cause order must give a plain and concise
description of the allegations that constitute the basis for the
proposed suspension. The show cause order must notify the respondent--
    (1) Of the place and due date for filing a response;
    (2) That an expedited suspension decision by default may be rendered
if the respondent fails to file a response as required;
    (3) That the respondent may request a conference to address the
merits of the show cause order and that any such request must be made in
the response; and
    (4) That the respondent may be suspended either immediately
following the expiration of the period within which a response must be
filed or, if a conference is requested, immediately following the
conference.
    (d) Response. The response to the show cause order described in this
section must be filed no later than 30 calendar days following the date
the show cause order is served, unless the time for filing is extended.
The response must be filed in accordance with the rules set forth for
answers to a complaint in Sec. 10.64, except as otherwise provided in
this section. The response must include a request for a conference, if a
conference is desired. The respondent is entitled to the conference only
if the request is made in a timely filed response.
    (e) Conference. An authorized representative of the Internal Revenue
Service will preside at a conference described in this section. The
conference will be held at a place and time selected by the Internal
Revenue Service, but no sooner than 14 calendar days after the date by
which the response must be filed with the Internal Revenue Service,
unless the respondent agrees to an earlier date. An authorized
representative may represent the respondent at the conference.

[[Page 168]]

    (f) Suspension--(1) In general. The Commissioner, or delegate, may
suspend the respondent from practice before the Internal Revenue Service
by a written notice of expedited suspension immediately following:
    (i) The expiration of the period within which a response to a show
cause order must be filed if the respondent does not file a response as
required by paragraph (d) of this section;
    (ii) The conference described in paragraph (e) of this section if
the Internal Revenue Service finds that the respondent is described in
paragraph (b) of this section; or
    (iii) The respondent's failure to appear, either personally or
through an authorized representative, at a conference scheduled by the
Internal Revenue Service under paragraph (e) of this section.
    (2) Duration of suspension. A suspension under this section will
commence on the date that the written notice of expedited suspension is
served on the practitioner, either personally or through an authorized
representative. The suspension will remain effective until the earlier
of:
    (i) The date the Internal Revenue Service lifts the suspension after
determining that the practitioner is no longer described in paragraph
(b) of this section or for any other reason; or
    (ii) The date the suspension is lifted or otherwise modified by an
Administrative Law Judge or the Secretary of the Treasury, or delegate
deciding appeals, in a proceeding referred to in paragraph (g) of this
section and instituted under Sec. 10.60.
    (g) Practitioner demand for Sec. 10.60 proceeding. If the Internal
Revenue Service suspends a practitioner under the expedited suspension
procedures described in this section, the practitioner may demand that
the Internal Revenue Service institute a proceeding under Sec. 10.60
and issue the complaint described in Sec. 10.62. The demand must be in
writing, specifically reference the suspension action under Sec. 10.82,
and be made within 2 years from the date on which the practitioner's
suspension commenced. The Internal Revenue Service must issue a
complaint demanded under this paragraph (g) within 60 calendar days of
receiving the demand. If the Internal Revenue Service does not issue
such complaint within 60 days of receiving the demand, the suspension is
lifted automatically. The preceding sentence does not, however, preclude
the Commissioner, or delegate, from instituting a regular proceeding
under Sec. 10.60 of this part.
    (h) Effective/applicability date. This section is generally
applicable beginning June 12, 2014, except that paragraphs (b)(1)
through (4) of this section are applicable beginning August 2, 2011.

[T.D. 9011, 67 FR 48774, July 26, 2002, as amended by T.D. 9359, 72 FR
54555, Sept. 26, 2007; T.D. 9527, 76 FR 32311, June 3, 2011; T.D. 9668,
79 FR 33694, June 12, 2014]



                      Subpart E_General Provisions

    Source: T.D. 9011, 67 FR 48774, July 26, 2002, unless otherwise
noted.



Sec. 10.90  Records.

    (a) Roster. The Internal Revenue Service will maintain and make
available for public inspection in the time and manner prescribed by the
Secretary, or delegate, the following rosters--
    (1) Individuals (and employers, firms, or other entities, if
applicable) censured, suspended, or disbarred from practice before the
Internal Revenue Service or upon whom a monetary penalty was imposed.
    (2) Enrolled agents, including individuals--
    (i) Granted active enrollment to practice;
    (ii) Whose enrollment has been placed in inactive status for failure
to meet the requirements for renewal of enrollment;
    (iii) Whose enrollment has been placed in inactive retirement
status; and
    (iv) Whose offer of consent to resign from enrollment has been
accepted by the Internal Revenue Service under Sec. 10.61.
    (3) Enrolled retirement plan agents, including individuals--
    (i) Granted active enrollment to practice;
    (ii) Whose enrollment has been placed in inactive status for failure
to meet the requirements for renewal of enrollment;

[[Page 169]]

    (iii) Whose enrollment has been placed in inactive retirement
status; and
    (iv) Whose offer of consent to resign from enrollment has been
accepted under Sec. 10.61.
    (4) Registered tax return preparers, including individuals--
    (i) Authorized to prepare all or substantially all of a tax return
or claim for refund;
    (ii) Who have been placed in inactive status for failure to meet the
requirements for renewal;
    (iii) Who have been placed in inactive retirement status; and
    (iv) Whose offer of consent to resign from their status as a
registered tax return preparer has been accepted by the Internal Revenue
Service under Sec. 10.61.
    (5) Disqualified appraisers.
    (6) Qualified continuing education providers, including providers--
    (i) Who have obtained a qualifying continuing education provider
number; and
    (ii) Whose qualifying continuing education number has been revoked
for failure to comply with the requirements of this part.
    (b) Other records. Other records of the Director of the Office of
Professional Responsibility may be disclosed upon specific request, in
accordance with the applicable law.
    (c) Effective/applicability date. This section is applicable
beginning August 2, 2011.

[T.D. 9359, 72 FR 54555, Sept. 26, 2007, as amended by T.D. 9527, 76 FR
32311, June 3, 2011; 76 FR 49650, Aug. 11, 2011]



Sec. 10.91  Saving provision.

    Any proceeding instituted under this part prior to June 12, 2014,
for which a final decision has not been reached or for which judicial
review is still available is not affected by these revisions. Any
proceeding under this part based on conduct engaged in prior to June 12,
2014, which is instituted after that date, will apply subpart D and E of
this part as revised, but the conduct engaged in prior to the effective
date of these revisions will be judged by the regulations in effect at
the time the conduct occurred.

[T.D. 9668, 79 FR 33695, June 12, 2014]



Sec. 10.92  Special orders.

    The Secretary of the Treasury reserves the power to issue such
special orders as he or she deems proper in any cases within the purview
of this part.



Sec. 10.93  Effective date.

    Except as otherwise provided in each section and subject to Sec.
10.91, Part 10 is applicable on July 26, 2002.

[T.D. 9011, 67 FR 48771, July 26, 2002, as amended by T.D. 9165, 69 FR
75845, Dec. 20, 2004]



PART 11_OPERATION OF VENDING FACILITIES BY THE BLIND ON FEDERAL PROPERTY
UNDER THE CONTROL OF THE DEPARTMENT OF THE TREASURY--Table of Contents



Sec.
11.1 Purpose.
11.2 Policy.
11.3 Definitions.
11.4 Establishing vending facilities.
11.5 Application for permit.
11.6 Terms of permit.
11.7 Enforcement procedures.
11.8 Reports.

    Authority: 49 Stat. 1559, as amended by Act of Aug. 3, 1954, Pub. L.
83-565, 68 Stat. 663, as further amended by Pub. L. 93-516, 88 Stat.
1622, (20 U.S.C. 107).

    Source: 58 FR 57560, Oct. 26, 1993, unless otherwise noted.



Sec. 11.1  Purpose.

    This part contains policy and procedures to ensure the priority of
blind vendors in operating vending facilities on property controlled by
the Department of the Treasury. The provisions of this part apply to all
bureaus, the Departmental Offices and the Office of Inspector General.



Sec. 11.2  Policy.

    Blind vendors licensed by State licensing agencies designated by the
Secretary of Education under the provisions of the Randolph-Sheppard Act
(20 U.S.C. 107 et seq.) shall be given priority in the location and
operation of vending facilities, including vending machines, on property
controlled by the Department of the Treasury, provided the location or
operation of such facility would not adversely affect the

[[Page 170]]

interests of the United States. Treasury bureaus shall ensure that the
collection and distribution of vending machine income from vending
machines on Treasury-controlled property shall be in compliance with the
regulations set forth in 34 CFR 395.32. Blind vendors shall also be
given priority on Treasury-controlled property in the operation of
cafeterias according to 34 CFR 395.33.



Sec. 11.3  Definitions.

    Terms used are defined in 34 CFR 395.1, except that as used in this
part, the following terms shall have the following meanings:
    (a) Department of the Treasury controlled property means any Federal
building, land, or other real property owned, leased, or occupied by a
bureau or office of the Department of the Treasury, of which the
maintenance, operation, and protection is under the control of the
Department of the Treasury.
    (b) The term bureau means any bureau or office of the Department of
the Treasury and such comparable administrative units as may hereafter
be created or made a part of the Department, and includes the
Departmental Offices and the Office of Inspector General. The ``head of
the bureau'' for the Departmental Offices is the Deputy Assistant
Secretary (Administration).



Sec. 11.4  Establishing vending facilities.

    (a) Treasury bureaus shall not acquire a building by ownership,
rent, or lease, or occupy a building to be constructed, substantially
altered, or renovated unless it is determined that such buildings
contain or will contain a ``satisfactory site,'' as defined in 34 CFR
395.1(q), for the location and operation of a blind vending facility.
    (b) In accordance with 34 CFR 395.31, Treasury bureaus shall provide
the appropriate State licensing agency with written notice of the
intention to acquire or otherwise occupy such building. Providing
notification shall be the responsibility of the bureau on-site property
management official.



Sec. 11.5  Application for permit.

    Applications for permits for the operation of vending facilities
other than cafeterias shall be made in writing and submitted for the
review and approval of the head of the appropriate Treasury bureau or
that official's designee.



Sec. 11.6  Terms of permit.

    Every permit shall describe the location of the vending facility,
including any vending machines located on other than facility premises,
and shall be subject to the following provisions:
    (a) The permit shall be issued in the name of the applicant State
licensing agency which shall perform the responsibilities set forth in
34 CFR 395.35 (a);
    (b) The permit shall be issued for an indefinite period of time
subject to suspension or termination on the basis of compliance or
noncompliance with agreed upon terms.
    (c) The permit shall provide that:
    (1) No charge shall be made to the State licensing agency for normal
cleaning, maintenance, and repair of the building structure in and
adjacent to the vending facility areas;
    (2) Cleaning necessary for sanitation; the maintenance of vending
facilities and vending machines in an orderly condition at all times;
the installation, maintenance, repair, replacement, servicing, and
removal of vending facility equipment shall be without cost to the
Department of the Treasury; and
    (3) Articles sold at vending facilities operated by blind licensees
may consist of newspapers, periodicals, publications, confections,
tobacco products, foods, beverages, chances for any lottery authorized
by State law and conducted by an agency of a State within such State,
and other articles or services as are determined by the State licensing
agency, in consultation with the appropriate Treasury bureau, to be
suitable for a particular location. Such articles and services may be
dispensed automatically or manually and may be prepared on or off the
premises.
    (d) The permit shall further provide that vending facilities shall
be operated in compliance with applicable health, sanitation, and
building codes or ordinances.
    (e) The permit shall further provide that installation,
modification, relocation, removal, and renovation of vending facilities
shall be subject to the prior approval and supervision of the

[[Page 171]]

bureau on-site property management officer of the appropriate Treasury
bureau and the State licensing agency; that costs of relocations
initiated by the State licensing agency shall be paid by the State
licensing agency; that costs of relocations initiated by a Treasury
bureau shall be paid by the Treasury bureau; and that all plumbing,
electrical, and mechanical costs related to the renovation of existing
facilities shall be paid by the appropriate Treasury bureau.
    (f) The operation of a cafeteria by a blind vendor shall be covered
by a contractual agreement and not by a permit. The State licensing
agency shall be expected to perform under the same contractual
arrangement applicable to commercial cafeteria operators.



Sec. 11.7  Enforcement procedures.

    (a) The State licensing agency shall attempt to resolve day-to-day
problems pertaining to the operation of the vending facility in an
informal manner with the participation of the blind vendor and the on-
site property management officials of the respective Treasury bureaus
who are responsible for the Treasury-controlled property.
    (b) Unresolved disagreements concerning the terms of the permit, the
Act, or the regulations in this part and any other unresolved matters
shall be reported in writing to the State licensing agency supervisory
personnel by the bureau on-site supervisory property management official
in an attempt to resolve the issue.



Sec. 11.8  Reports.

    This section establishes a Department of the Treasury reporting
requirement to comply with 34 CFR 395.38. At the end of each fiscal
year, each property managing bureau shall submit a report to the
Director, Office of Management Support Systems, Departmental Offices,
containing the elements set forth in 34 CFR 395.38. The Director, Office
of Management Support Systems, shall submit a consolidated report to the
Secretary of Education after the end of the fiscal year.



PART 12_RESTRICTION OF SALE AND DISTRIBUTION OF TOBACCO PRODUCTS--Table
of Contents



Sec.
12.1 Purpose.
12.2 Definitions.
12.3 Sale of tobacco products in vending machines prohibited.
12.4 Distribution of free samples of tobacco products prohibited.
12.5 Prohibitions not applicable in areas designated by the Secretary of
          the Treasury.

    Authority: Sec. 636, Pub. L. 104-52, 109 Stat. 507.

    Source: 61 FR 25396, May 21, 1996, unless otherwise noted.



Sec. 12.1  Purpose.

    This part contains regulations implementing the ``Prohibition of
Cigarette Sales to Minors in Federal Buildings Act,'' Public Law 104-52,
Section 636, with respect to buildings under the jurisdiction of the
Department of the Treasury.



Sec. 12.2  Definitions.

    As used in this part--
    (1) The term Federal building under the jurisdiction of the
Secretary of the Treasury includes the real property on which such
building is located;
    (2) The term minor means an individual under the age of 18 years;
and
    (3) The term tobacco product means cigarettes, cigars, little
cigars, pipe tobacco, smokeless tobacco, snuff, and chewing tobacco.



Sec. 12.3  Sale of tobacco products in vending machines prohibited.

    The sale of tobacco products in vending machines located in or
around any Federal building under the jurisdiction of the Secretary of
the Treasury is prohibited, except in areas designated pursuant to Sec.
12.5 of this part.



Sec. 12.4  Distribution of free samples of tobacco products prohibited.

    The distribution of free samples of tobacco products in or around
any Federal building under the jurisdiction of the Secretary of the
Treasury is prohibited, except in areas designated pursuant to Sec.
12.5 of this part.

[[Page 172]]



Sec. 12.5  Prohibitions not applicable in areas designated by the
Secretary of the Treasury.

    The prohibitions set forth in this part shall not apply in areas
designated by the Secretary as exempt from the prohibitions, but all
designated areas must prohibit the presence of minors.



PART 13_PROCEDURES FOR PROVIDING ASSISTANCE TO STATE AND LOCAL
GOVERNMENTS IN PROTECTING FOREIGN DIPLOMATIC MISSIONS--Table of Contents



Sec.
13.1 Purpose.
13.2 Definitions.
13.3 Eligibility to receive protection or reimbursement.
13.4 Requests for protection and advance notices of reimbursement
          requests.
13.5 Utilization of the services, personnel, equipment, and facilities
          of State and local governments.
13.6 Reimbursement of State and local governments.
13.7 Reimbursement when the Assistant Secretary makes no determination
          to utilize State and local government services, personnel,
          equipment and facilities.
13.8 Protection for motorcades and other places associated with a visit
          qualifying under section 202(7) of Title 3, U.S. Code.

Appendix I(F) to Part 13--Estimated Overhead and Administrative Costs
Appendix II(F) to Part 13--Overhead and Administrative Costs
Appendix I to Part 13--Form of Request for Assistance
Appendix II to Part 13--Form of Bill for Reimbursement

    Authority: Secs. 202 and 208, Title 3, U.S. Code, as amended and
added, respectively by Pub. L. 94-196 (89 Stat. 1109); 5 U.S.C. 301.

    Source: 41 FR 55179, Dec. 17, 1976, unless otherwise noted.



Sec. 13.1  Purpose.

    This part prescribes the procedures governing protective and
financial assistance to State and local governments when an
extraordinary protective need requires the protection of foreign
diplomatic missions as authorized by sections 202 and 208 of Title 3,
U.S. Code, as amended and added, respectively, by Pub. L. 94-196 (89
Stat. 1109).



Sec. 13.2  Definitions.

    As used in this part, these terms shall have the following meaning:
    (a) The term Assistant Secretary means the Assistant Secretary of
the Treasury (Enforcement and Operations).
    (b) The term extraordinary protective need means a need for
protection requiring measurable reinforcements of police personnel or
equipment, or both, significantly beyond the ordinary deployment of the
State or local government, arising out of actual or potential violence
related to: (1) Confrontations between nationalist or other groups, (2)
threats or acts of violence by terrorist or other groups, (3) a specific
diplomatic event or visit, or (4) a specific international event.
    (c) The term foreign diplomatic mission means a mission (including
foreign consular offices) of a foreign country located in the United
States.
    (d) The term full time officers means permanent officers whose
duties as foreign diplomatic officers occupy their full time.
    (e) The term international organization means those international
organizations designated by Presidential Executive Order as being
entitled to the privileges, immunities, and exemptions accorded under
the International Organization Immunities Act of December 29, 1945 (22
U.S.C. 288).
    (f) The term metropolitan area means a city in the United States
(other than the District of Columbia) and those areas contiguous to it.
    (g) The term observer mission means a mission invited to participate
in the work of an international organization by that organization. The
invitation to participate shall be extended by the international
organization pursuant to the same internal rules of the international
organization as are applicable to any permanent mission.
    (h) The term permanent mission means a fixed continuing mission
staffed by full time officers and maintained by a member state of an
international organization.
    (i) The term temporary domicile means a domicile of limited duration
of a visiting foreign dignitary or officer in connection with a visit to
a permanent

[[Page 173]]

or observer mission to an international organization in a metropolitan
area.

[41 FR 55179, Dec. 17, 1976, as amended at 45 FR 30621, May 9, 1980]



Sec. 13.3  Eligibility to receive protection or reimbursement.

    (a) Protection, as determined by the Assistant Secretary, will be
provided by the United States Secret Service Uniformed Division,
pursuant to section 202 of Title 3, U.S. Code, as amended by Pub. L. 94-
196, only to foreign diplomatic missions located in metropolitan areas
(other than the District of Columbia) where there are located twenty or
more such missions, as determined by the Secretary of State, which are
headed by full time officers. According to present State Department
figures, the following metropolitan areas have 20 or more such foreign
diplomatic missions: Chicago, Houston, Los Angeles, Miami, New York
City, New Orleans and San Francisco. The protection provided by State or
local governments rather than the United States Secret Service Uniformed
Division will be reimbursed pursuant to section 208(a) of Title 3, U.S.
Code and Sec. Sec. 13.6, 13.7 and 13.8 of this part.
    (b) Protection or reimbursement will be provided for the
metropolitan areas described in paragraph (a) of this section only if:
    (1) The affected metropolitan area requests such protection or
reimbursement;
    (2) The Assistant Secretary determines that an extraordinary
protective need exists; and
    (3) The extraordinary need arises in association with a visit to or
occurs at or, pursuant to Sec. 13.6, in the vicinity of: (i) A
permanent mission to an international organization of which the United
States is a member, (ii) an observer mission invited to participate in
the work of an international organization of which the United States is
a member, or (iii) in the case of a visit by a foreign official or
dignitary to participate in an activity of an international organization
of which the United States is a member, a foreign diplomatic mission,
including a consular office of the same country as the visitor.
    (c) Protection (or reimbursement) may be extended at places of
temporary domicile in connection with a visit under paragraph (b) of
this section.
    (d) Where an extraordinary protective need exists, protection (or
reimbursement) may be extended to missions as described in Sec. Sec.
13.3(b)(3) (i) and (ii) whether or not associated with a visit by a
foreign dignitary.

[45 FR 30621, May 9, 1980]



Sec. 13.4  Requests for protection and advance notices of reimbursement
requests.

    (a) In cases where they believe that an extraordinary protective
need exists, the State or local governments may request that protection
be provided by the United States Secret Service Uniformed Division; or
they may give advance notice of their intention to provide, on a
reimbursable basis, all or part of the protection themselves.
    (1) Requests for protection or advance notices of reimbursement
requests shall be made to: Assistant Secretary (Enforcement and
Operations), Department of the Treasury, Washington, DC 20220. Each
government requesting the protection authorized pursuant to section 202
of Title 3, U.S. Code, as amended by Pub. L. 94-196, or which intends to
seek reimbursement pursuant to section 208(a) of Title 3, U.S. Code and
Sec. Sec. 13.6 and 13.7 of this part, shall submit an application
describing the extraordinary protective need. Applications made pursuant
to this section shall be submitted to the Assistant Secretary 14 days
before the extraordinary protective need arises. In association with a
visit, the application shall include the name and title of the visiting
foreign official or dignitary, the country he represents, and the name
and location of the international organization or mission he will be
visting. The application shall also include, if available, the temporary
domicile of the visiting official or dignitary and his schedule,
including dates and times of arrival and departure from the United
States. If the extraordinary protective need occurs at a permanent
mission to an international organization of which the

[[Page 174]]

United States is a member or an observer mission invited to participate
in the work of such organization, or if another foreign diplomatic
mission of the country qualifies under Sec. 13.3 (b) or (d), the
application shall include the name and location of the mission.
    (b) State and local governments shall also indicate on the
application whether they are requesting the use of the United States
Secret Service Uniformed Division or whether they are giving advance
notice of their intention to provide, on a reimbursable basis, all or
part of the protection themselves. In order to assist the Assistant
Secretary in determining whether to utilize the United States Secret
Service Uniformed Division to meet all or part of the extraordinary
protective need, or to utilize, with their consent, the services,
personnel, equipment, and facilities of the State or local government,
or both, the application must include an estimate of the approximate
number of personnel by grade and rank, the services, equipment, and
facilities required, along with an estimate of the cost of such
personnel, services, equipment and facilities. This application must be
submitted in a format consistent with that illustrated in Appendix I of
this part.
    (1) Upon receipt of a request for protection pursuant to paragraph
(a)(1) of this section and for the purposes of reimbursement pursuant to
Sec. Sec. 13.6 and 13.7, the Assistant Secretary will determine whether
an extraordinary protective need exists and whether the United States
Secret Service Uniformed Division will be used for all, part or none of
the protection. In making determinations, the Assistant Secretary may
consult with appropriate Federal, State and local government agencies.

[45 FR 30621, May 9, 1980]



Sec. 13.5  Utilization of the services, personnel, equipment, and
facilities of State and local governments.

    The Assistant Secretary may decide to utilize, on a reimbursable
basis, the services, personnel, equipment, and facilities of State and
local governments of the affected metropolitan area desiring to provide
protection, or he may utilize the United States Secret Service Uniformed
Division, or both. If the United States Secret Service Uniformed
Division is utilized to meet all the extraordinary protective need, the
governments of the affected metropolitan area will not be reimbursed. If
the United States Secret Service Uniformed Division is utilized to meet
part of the extraordinary protective needs, the governments of the
affected metropolitan area will be reimbursed for that qualifying
portion of the protection which is provided by State and local police
authorities. If the Assistant Secretary decides to utilize, with their
consent, the services, personnel, equipment, and facilities of such
State and local governments to meet the extraordinary protective need,
he will so notify the government as soon as possible after receipt of a
request for protection or an advance notice of a reimbursement request
made pursuant to Sec. 13.4.

[45 FR 30622, May 9, 1980]



Sec. 13.6  Reimbursement of State and local governments.

    (a) State and local governments providing services, personnel,
equipment, or facilities to the affected metropolitan area pursuant to
Sec. 13.5 may forward to the Assistant Secretary a bill for
reimbursement for the personnel, equipment, facilities, and services
utilized in meeting the extraordinary protective need. The bill shall be
in accordance with the format in Appendix II of this part. The Assistant
Secretary will reimburse only those costs directly related to the
extraordinary protective need including personnel and equipment costs
resulting from assignments made to assist in providing security at an
otherwise qualified location in connection with the arrival, departure,
or during the visit of a foreign dignitary. Reimbursable costs will also
include the costs for establishing both fixed posts at a qualified
location and protective perimeters outside of a qualified location when
it is clearly established to the satisfaction of the Assistant Secretary
that such assignments were necessary to assure the safety of the
qualified location. Overhead and administrative costs associated with an
extraordinary protective need are

[[Page 175]]

reimbursable as either a flat 18 percent of the total extraordinary
protective need costs, or, if such costs can be clearly segregated from
routine police costs, on a dollar-for-dollar basis. The jurisdiction
seeking such reimbursement may select either method but may not use
both. For the purposes of reimbursement the Assistant Secretary will, in
all cases, determine when the extraordinary protective need began and
terminated.

[45 FR 30622, May 9, 1980]



Sec. 13.7  Reimbursement when the Assistant Secretary makes no
determination to utilize State and local government services, personnel,

equipment and facilities.

    (a) Where events require the State or local governments of the
affected metropolitan area to provide protection to meet an
extraordinary protective need otherwise qualifying for reimbursement,
such reimbursement may be made even if the provisions of Sec. Sec. 13.4
and 13.5 have not been complied with fully. In such circumstances the
provisions of Sec. 13.6 shall apply.
    (b) In cases where State or local governments, or both, utilized
their own services, personnel, equipment, and facilities to provide
protection for an extraordinary protective need, and no request for
protective assistance pursuant to Sec. 13.4 was made because the
extraordinary protective need occurred prior to the promulgation of this
part but after July 1, 1974, an application by such government to the
Assistant Secretary for reimbursement otherwise conforming to the
requirements of this part will be considered.

[41 FR 55179, Dec. 17, 1976, as amended at 45 FR 30622, May 9, 1980]



Sec. 13.8  Protection for motorcades and other places associated with
a visit qualifying under section 202(7) of Title 3, U.S. Code.

    (a) State and local governments furnishing services, personnel,
equipment, and facilities to provide protection for motorcades and at
other places associated with a visit qualifying under section 202(7) of
Title 3, U.S. Code may forward to the Assistant Secretary a bill for
reimbursement for the personnel, equipment, facilities, and services
utilized in providing such protection.
    (b) Requests for payments under this section shall conform to the
procedures established elsewhere in this part governing reimbursements
arising out of an extraordinary protective need.

[45 FR 30622, May 9, 1980]



  Sec. Appendix I(F) to Part 13--Estimated Overhead and Administrative
                                  Costs

Date:___________________________________________________________________

                         Select Only One Method

    ------ 1. Reimbursement for overhead and administrative costs will
be requested as a flat 18 percent of the total extraordinary protective
need cost as provided in section 13.6 of these regulations.
    ------ 2. Reimbursement for overhead and administrative costs will
be requested on a dollar-for-dollar basis. Computation of these costs
will be made using the below described method:

(Explain in detail how all of these costs can be directly and
exclusively attributed to the extraordinary protective need.)

[45 FR 30622, May 9, 1980]



    Sec. Appendix II(F) to Part 13--Overhead and Administrative Costs

Date:___________________________________________________________________

                         Select Only One Method

    ------ 1. Reimbursement for overhead and administrative costs is
requested as a flat 18 percent of the total extraordinary protective
need costs as provided in section 13.6 of these regulations.
    ------ 2. Reimbursement for overhead and administrative costs is
requested on a dollar-for-dollar basis. Computation of these costs has
been made using the below described method:

(Explain and show in detail how all of these costs have been directly
and exclusively attributed extraordinary protective need costs).

Dated:__________________________________________________________________

[45 FR 30622, May 9, 1980]



       Sec. Appendix I to Part 13--Form of Request for Assistance

    I hereby request assistance from the Department of the Treasury
pursuant to Section 202 of Title 3, U.S. Code, as amended by Pub. L. 94-
196. This assistance is needed to enable the affected metropolitan area
of

[[Page 176]]

------------ to meet an extraordinary protective need, which is expected
to arise on ------------ (date).
    The nature of the extraordinary protective need prompting this
request is as follows:
    (If in association with a visit, include the name and title of the
visiting foreign official or dignitary, the country represented and the
name and location of the international organization involved and/or
mission to be visited. The temporary domicile of the visiting official
or dignitary and his schedule, including dates and times of arrival and
departure from the United States, if available, must also be included.
If the extraordinary protective need occurs at or, pursuant to Sec.
13.6 of 31 CFR part 13, in the vicinity of, a permanent mission to an
international organization of which the United States is a member or at
an observer mission invited to participate in the work of the
organization, the application shall include the name and location of the
mission. If the extraordinary protective need occurs at a foreign
diplomatic mission, including a consular office, in conjunction with a
qualifying visit by a foreign official or dignitary of the same country
as that mission, the application shall include the name and location of
the mission or office. If, pursuant to Sec. 13.8, the visiting foreign
official is to travel by motorcade and/or visit locations other than his
foreign mission or temporary domicile, the application shall include a
description of the anticipated motorcade routes and all stops on the
routes as well as the name (or description) and location of any other
places to be visited.
    The ------------ (Government entity) ------------ (is or is not) --
---------- prepared to provide ------------ (all or a portion of) the
protection required to meet this need. Attached is an estimate of the
appropriate number of personnel, by grade and rank, and the specific
services, equipment and facilities which will be required to meet this
extraordinary protective need, along with an estimate of the cost of
such personnel, services, equipment, and facilities.
(Date)__________________________________________________________________
________________________________________________________________________
(State or local government of the affected metropolitan area)
________________________________________________________________________
(Signature)
________________________________________________________________________
(Title)

[45 FR 30622, May 9, 1980]



       Sec. Appendix II to Part 13--Form of Bill for Reimbursement

    I hereby request that ------------ (Governmental entity) be
reimbursed by the Department of the Treasury pursuant to sections 202
and 208 of Title 3, U.S. Code, as amended and added, respectively, by
Public Law 94-196 (89 Stat. 1109) (and/or pursuant to Public Law 96-74)
for expenses incurred while providing an adequate level of protection
during the extraordinary protective need arising in association with a
visit of ------------ (Official or dignitary's name and title) of ------
------ (Country) to participate in the work of ------------
(International Organization) or occurring at the --------------
(Permanent or observer mission) to ------------ (International
organization) during the period ------------ (Date) through ------------
(Date).
    I certify that the level of protection provided was both reasonable
and necessary; that the costs herein billed are only those direct costs
associated with meeting the extraordinary protective need; and that the
costs herein billed are not costs of an indirect nature such as
administrative costs, overhead, and depreciation, except as provided in
Sec. 13.6(a) of 31 CFR 13.
    Access to all records, accounts, receipts, etc., pertaining to the
costs herein billed will be accorded to representatives of the Assistant
Secretary (Enforcement and Operations) and the General Accounting Office
at such reasonable times and places as may be mutually agreed upon by
said representatives and ------------ (Governmental entity).
Date:___________________________________________________________________
________________________________________________________________________
(Signature)
________________________________________________________________________
(Title)

[45 FR 30623, May 9, 1980]



PART 14_RIGHT TO FINANCIAL PRIVACY ACT--Table of Contents



Sec.
14.1 Definitions.
14.2 Purpose.
14.3 Authorization.
14.4 Contents of request.
14.5 Certification.

    Authority: Sec. 1108, Right to Financial Privacy Act of 1978, 92
Stat. 3697 et seq., 12 U.S.C. 3401 et seq.; (5 U.S.C. 301); and
Reorganization Plan No. 26 of 1950.

    Source: 44 FR 16909, Mar. 20, 1979, unless otherwise noted.



Sec. 14.1  Definitions.

    For purposes of this regulation, the term:
    (a) Financial institution means any office of a bank, savings bank,
card issuer as defined in section 103 of the Consumer Credit Protection
Act (15 U.S.C. 1602(n)), industrial loan company, trust company, savings
and loan,

[[Page 177]]

building and loan, or homestead association (including cooperative
bank), credit union, or consumer financial institution, located in any
State or territory of the United States, the District of Columbia,
Puerto Rico, Guam, American Samoa, or the Virgin Islands.
    (b) Financial record means an original of, a copy of, or information
known to have been derived from, any record held by a financial
institution pertaining to a customer's relationship with the financial
institution.
    (c) Person means an individual or a partnership of five or fewer
individuals.
    (d) Customer means any person or authorized representative of that
person who utilized or is utilizing any service of a financial
institution, or for whom a financial institution is acting or has acted
as a fiduciary, in relation to an account maintained in the person's
name.
    (e) Law enforcement inquiry means a lawful investigation or official
proceeding inquiring into a violation of or failure to comply with any
criminal or civil statute or any regulation, rule, or order issued
pursuant thereto.
    (f) Departmental unit means those offices, divisions, bureaus, or
other components of the Department of the treasury authorized to conduct
law enforcement inquiries.
    (g) Act means the Right to Financial Privacy Act of 1978.



Sec. 14.2  Purpose.

    The purpose of these regulations is to authorize Departmental units
to request financial records from a financial institution pursuant to
the formal written request procedure authorized by section 1108 of the
Act, and to set forth the conditions under which such requests may be
made.



Sec. 14.3  Authorization.

    Departmental units are hereby authorized to request financial
records of any customer from a financial institution pursuant to a
formal written request under the Act only if:
    (a) No administrative summons or subpoena authority reasonably
appears to be available to the Departmental unit to obtain financial
records for the purpose for which the records are sought;
    (b) There is reason to believe that the records sought are relevant
to a legitimate law enforcement inquiry and will further that inquiry;
    (c) The request is issued by a supervisory official of a rank
designated by the head of the requesting Departmental unit. Officials so
designated shall not delegate this authority to others;
    (d) The request adheres to the requirements set forth in Sec. 14.4;
and
    (e) The notice requirements set forth in section 1108(4) of the Act,
or the requirements pertaining to delay of notice in section 1109 of the
Act are satisfied, except in situations where no notice is required.
(e.g., section 1113(g))



Sec. 14.4  Contents of request.

    The formal written request shall be in the form of a letter or
memorandum to an appropriate official of the financial institution from
which financial records are requested. The request shall be signed by an
issuing official of the requesting Department unit. It shall set forth
that official's name, title, business address and business phone number.
The request shall also contain the following:
    (a) The identity of the customer or customers to whom the records
pertain;
    (b) A reasonable description of the records sought;
    (c) Any other information that the issuing official deems
appropriate, e.g., the date on which the requesting Departmental unit
expects to present a certificate of compliance with the applicable
provisions of the Act, the name and title of the individual to whom
disclosure is to be made, etc.

In cases where customer notice is delayed by a court order, a copy of
the court order shall be attached to the formal written request.



Sec. 14.5  Certification.

    Prior to obtaining the requested records pursuant to a formal
written request, an official of a rank designated by the head of the
requesting Departmental unit shall certify in writing to the financial
institution

[[Page 178]]

that the Departmental unit has complied with the applicable provisions
of the Act.



PART 15_POST EMPLOYMENT CONFLICT OF INTEREST--Table of Contents



                      Subpart A_General Provisions

Sec.
15.737-1 Scope.
15.737-2 Definitions.
15.737-3 Director of Practice.
15.737-4 Other discipline.
15.737-5 Records.

 Subpart B_Rules Applicable to Post Employment Practice by Officers and
                       Employees of the Department

15.737-6 Interpretative standards.

            Subpart C_Administrative Enforcement Proceedings

15.737-7 Authority to prohibit practice.
15.737-8 Special orders.
15.737-9 Receipt of information concerning former Treasury employee.
15.737-10 Conferences.
15.737-11 Institution of proceeding.
15.737-12 Contents of complaint.
15.737-13 Service of complaint and other papers.
15.737-14 Answer.
15.737-15 Reply to answer.
15.737-16 Proof; variance; amendment of pleadings.
15.737-17 Motions and requests.
15.737-18 Representation.
15.737-19 Administrative Law Judge.
15.737-20 Hearings.
15.737-21 Evidence.
15.737-22 Depositions.
15.737-23 Transcript.
15.737-24 Proposed findings and conclusions.
15.737-25 Decision of the Administrative Law Judge.
15.737-26 Appeal to the General Counsel.
15.737-27 Decision of the General Counsel.
15.737-28 Notice of disciplinary action.

                Subpart D_Other Departmental Proceedings

15.737-29 Review by the General Counsel.

    Authority: 92 Stat. 1864 (18 U.S.C. 207), as amended.

    Source: 45 FR 39842, June 12, 1980, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 15.737-1  Scope.

    This part contains rules governing discipline of a former officer or
employee of the Department of the Treasury because of a post employment
conflict of interest. Such discipline may include prohibition from
practice before the Department or a separate statutory agency thereof as
those terms are defined in this part.



Sec. 15.737-2  Definitions.

    For the purpose of this part--(a) The term Department means the
Department of the Treasury and includes the separate statutory agencies
thereof.
    (b) The term Director means the Director of Practice.
    (c) The term General Counsel means the General Counsel of the
Department.
    (d) The term practice means any informal or formal appearance
before, or, with the intent to influence, any oral or written
communication to the Department or, where applicable, to a separate
statutory agency thereof on a pending matter of business on behalf of
any other person (except the United States).
    (e) The term separate statutory agency thereof means an agency or
bureau within the Department designated by rule by the Director, Office
of Government Ethics, as a separate agency or bureau. The Internal
Revenue Service, Bureau of Alcohol, Tobacco and Firearms, United States
Secret Service, Bureau of the Mint, United States Customs Service,
Bureau of Engraving and Printing, and Comptroller of the Currency were
so designated effective July 1, 1979.



Sec. 15.737-3  Director of Practice.

    There is, in the Office of the Secretary of the Treasury, the Office
of Director of Practice. The Director shall institute and provide for
the conduct of disciplinary proceedings involving former employees of
the Department as authorized by 18 U.S.C. 207(j), and perform such other
duties as are necessary or appropriate to carry out his/her functions
under this part.

[[Page 179]]



Sec. 15.737-4  Other discipline.

    For activity alleged to violate 18 U.S.C. 207 (a), (b) or (c), the
Director may also bring a disciplinary proceeding pursuant to the
regulations governing practice before the Bureau of Alcohol, Tobacco and
Firearms or the Internal Revenue Service as found in 31 CFR part 8 and
31 CFR part 10, respectively. Such proceeding may be consolidated with
any proceeding brought pursuant to this part.



Sec. 15.737-5  Records.

    There are made available to public inspection at the Office of
Director of Practice the roster of all persons prohibited from practice
before the Department. Other records may be disclosed upon specific
request, in accordance with appropriate disclosure regulations of the
Department.



 Subpart B_Rules Applicable to Post Employment Practice by Officers and
                       Employees of the Department



Sec. 15.737-6  Interpretative standards.

    A determination that a former officer or employee of the Department
violated 18 U.S.C. 207 (a), (b) or (c) will be made in conformance with
the standards established in the interpretative regulations promulgated
by the Office of Government Ethics and published at 5 CFR part 737.



            Subpart C_Administrative Enforcement Proceedings



Sec. 15.737-7  Authority to prohibit practice.

    Pursuant to 18 U.S.C. 207(j), if the General Counsel finds, after
notice and opportunity for a hearing, that a former officer or employee
of the Department violated 18 U.S.C. 207 (a), (b) or (c), the General
Counsel in his/her discretion may prohibit that person from engaging in
practice before the Department or a separate statutory agency thereof
for a period not to exceed five years, or may take other appropriate
disciplinary action.



Sec. 15.737-8  Special orders.

    The General Counsel may issue special orders as he/she may consider
proper in any case within the purview of this part.



Sec. 15.737-9  Receipt of information concerning former Treasury
employee.

    If an officer or employee of the Department has reason to believe
that a former officer or employee of the Department has violated 18
U.S.C. 207 (a), (b) or (c), or if any such officer or employee receives
information to that effect, he/she shall promptly make a written report
thereof, which report or a copy thereof shall be forwarded to the
Inspector General, Department of the Treasury. If any other person has
information of such violations, he/she may make a report thereof to the
Inspector General or to any officer or employee of the Department. The
Inspector General shall refer any information he/she deems warranted to
the Director.



Sec. 15.737-10  Conferences.

    (a) In general. The Director may confer with a former officer or
employee concerning allegations of misconduct irrespective of whether an
administrative disciplinary proceeding has been instituted against him/
her. If such conference results in a stipulation in connection with a
proceeding in which such person is the respondent, the stipulation may
be entered in the record at the instance of either party to the
proceeding.
    (b) Voluntary suspension. A former officer or employee, in order to
avoid the institution or conclusion of a proceeding, may offer his/her
consent to suspension from practice before the Department or a separate
statutory agency thereof. The Director in his/her discretion, may
suspend a former officer or employee in accordance with the consent
offered.



Sec. 15.737-11  Institution of proceeding.

    (a) Whenever the Director has reason to believe that any former
officer or employee of the Department has violated 18 U.S.C. 207 (a),
(b) or (c), he/she may reprimand such person or institute an
administrative disciplinary proceeding for that person's suspension

[[Page 180]]

from practice before the Department or a separate statutory agency
thereof. The proceeding shall be instituted by a complaint which names
the respondent and is signed by the Director and filed in his/her
office. Except in cases of willfulness, or where time, the nature of the
proceeding, or the public interest does not permit, a proceeding will
not be instituted under this section until facts or conduct which may
warrant such action have been called to the attention of the proposed
respondent in writing and he/she has been accorded the opportunity to
provide his/her position on the matter.
    (b) The Director shall coordinate proceedings under this part with
the Department of Justice in cases where it initiates criminal
prosecution.



Sec. 15.737-12  Contents of complaint.

    (a) Charges. A complaint shall give a plain and concise description
of the allegations which constitute the basis for the proceeding. A
complaint shall be deemed sufficient if it fairly informs the respondent
of the charges against him/her so that the respondent is able to prepare
a defense.
    (b) Demand for answer. In the complaint, or in a separate paper
attached to the complaint, notification shall be given of the place and
time within which the respondent shall file his/her answer, which time
shall not be less than 15 days from the date of service of the
complaint, and notice shall be given that a decision by default may be
rendered against the respondent in the event he/she fails to file an
answer as required.



Sec. 15.737-13  Service of complaint and other papers.

    (a) Complaint. The complaint or a copy thereof may be served upon
the respondent by certified mail, or first-class mail as hereinafter
provided; by delivering it to the respondent or his/her attorney or
agent of record either in person or by leaving it at the office or place
of business of the respondent, attorney or agent; or in any other manner
which has been agreed to by the respondent. Where the service is by
certified mail, the return post office receipt duly signed by or on
behalf of the respondent shall be proof of service. If the certified
mail is not claimed or accepted by the respondent and is returned
undelivered, complete service may be made upon the respondent by mailing
the complaint to him/her by first-class mail, addressed to him/her at
the last address known to the Director. If service is made upon the
respondent or his/her attorney or agent of record in person or by
leaving the complaint at the office or place of business of the
respondent, attorney or agent, the verified return by the person making
service, setting forth the manner of service, shall be proof of such
service.
    (b) Service of papers other than complaint. Any paper other than the
complaint may be served upon a respondent as provided in paragraph (a)
of this section or by mailing the paper by first-class mail to the
respondent at the last address known to the Director, or by mailing the
paper by first-class mail to the respondent's attorney or agent of
record. Such mailing shall constitute complete service. Notices may be
served upon the respondent or his/her attorney or agent of record by
telegraph.
    (c) Filing of papers. Whenever the filing of a paper is required or
permitted in connection with a proceeding, and the place of filing is
not specified by this subpart or by rule or order of the Administrative
Law Judge, the paper shall be filed with the Director of Practice,
Department of the Treasury, Washington, DC 20220. All papers shall be
filed in duplicate.



Sec. 15.737-14  Answer.

    (a) Filing. The respondent's answer shall be filed in writing within
the time specified in the complaint, unless on application the time is
extended by the Director or the Administrative Law Judge. The answer
shall be filed in duplicate with the Director.
    (b) Contents. The answer shall contain a statement of facts which
constitute the grounds of defense, and it shall specifically admit or
deny each allegation set forth in the complaint, except that the
respondent shall not deny a material allegation in the complaint which
he/she knows to be true, or state that he/she is without sufficient
information to form a belief when

[[Page 181]]

in fact he/she possesses such information. The respondent may also state
affirmatively special matters of defense.
    (c) Failure to deny or answer allegations in the complaint. Every
allegation in the complaint which is not denied in the answer shall be
deemed to be admitted and may be considered as proved, and no further
evidence in respect of such allegation need be adduced at a hearing.
Failure to file an answer within the time prescribed in the notice to
the respondent, except as the time for answer is extended by the
Director or the Administrative Law Judge, shall constitute an admission
of the allegations of the complaint and a waiver of hearing, and the
Administrative Law Judge may make his/her decision by default without a
hearing or further procedure.



Sec. 15.737-15  Reply to answer.

    No reply to the respondent's answer shall be required, and new
matter in the answer shall be deemed to be denied, but the Director may
file a reply in his/her discretion or at the request of the
Administrative Law Judge.



Sec. 15.737-16  Proof; variance; amendment of pleadings.

    In the case of a variance between the allegations in a pleading and
the evidence adduced in support of the pleading, the Administrative Law
Judge may order or authorize amendment of the pleading to conform to the
evidence: Provided, That the party who would otherwise be prejudiced by
the amendment is given reasonable opportunity to meet the allegations of
the pleading as amended; and the Administrative Law Judge shall make
findings on any issue presented by the pleadings as so amended.



Sec. 15.737-17  Motions and requests.

    Motions and requests may be filed with the Director or with the
Administrative Law Judge.



Sec. 15.737-18  Representation.

    A respondent or proposed respondent may appear in person or he/she
may be represented by counsel or other representative. The Director may
be represented by an attorney or other employee of the Department.



Sec. 15.737-19  Administrative Law Judge.

    (a) Appointment. An Administrative Law Judge appointed as provided
by 5 U.S.C. 3105 (1966), shall conduct proceedings upon complaints for
the administrative disciplinary proceedings under this part.
    (b) Power of Administrative Law Judge. Among other powers, the
Administrative Law Judge shall have authority, in connection with any
proceeding assigned or referred to him/her, to do the following:
    (1) Administer oaths and affirmations;
    (2) Make rulings upon motions and requests, which rulings may not be
appealed from prior to the close of a hearing except, at the discretion
of the Administrative Law Judge, in extraordinary circumstances;
    (3) Determine the time and place of hearing and regulate its course
and conduct;
    (4) Adopt rules of procedure and modify the same from time to time
as occasion requires for the orderly disposition of proceedings;
    (5) Rule upon offers of proof, receive relevant evidence, and
examine witnesses;
    (6) Take or authorize the taking of depositions;
    (7) Receive and consider oral or written argument on facts or law;
    (8) Hold or provide for the holding of conferences for the
settlement or simplification of the issues by consent of the parties;
    (9) Assess the responsible party extraordinary costs attributable to
the location of a hearing;
    (10) Perform such acts and take such measures as are necessary or
appropriate to the efficient conduct of any proceeding; and
    (11) Make initial decisions.



Sec. 15.737-20  Hearings.

    (a) In general. The Administrative Law Judge shall preside at the
hearing on a complaint for the suspension of a former officer or
employee from practice before the Department. Hearings shall be
stenographically recorded and transcribed and the testimony of witnesses
shall be taken under oath or affirmation. Hearings will be conducted
pursuant to 5 U.S.C. 556.

[[Page 182]]

    (b) Public access to hearings. Hearings will be closed unless an
open hearing is requested by the respondent, except that if classified
information or protected information of third parties (such as tax
information) is likely to be adduced at the hearing, it will remain
closed. A request for an open hearing must be included in the answer to
be considered.
    (c) Failure to appear. If either party to the proceeding fails to
appear at the hearing, after due notice thereof has been sent to him/
her, he/she shall be deemed to have waived the right to a hearing and
the Administrative Law Judge may make a decision against the absent
party by default.



Sec. 15.737-21  Evidence.

    (a) In general. The rules of evidence prevailing in courts of law
and equity are not controlling in hearings on complaints for the
suspension of a former officer or employee from practice before the
Department. However, the Administrative Law Judge shall exclude evidence
which is irrelevant, immaterial, or unduly repetitious.
    (b) Depositions. The deposition of any witness taken pursuant to
Sec. 15.737-22 of this part may be admitted.
    (c) Proof of documents. Official documents, records and papers of
the Department shall be admissible in evidence without the production of
an officer or employee to authenticate them. Any such documents,
records, and papers may be evidenced by a copy attested or identified by
an officer or employee of the Department.
    (d) Exhibits. If any document, record, or other paper is introduced
in evidence as an exhibit, the Administrative Law Judge may authorize
the withdrawal of the exhibit subject to any conditions which he/she
deems proper.
    (e) Objections. Objections to evidence shall be in short form,
stating the grounds of objection relied upon, and the record shall not
include argument thereon, except as ordered by the Administrative Law
Judge. Rulings on such objections shall be a part of the record. No
exception to the ruling is necessary to preserve the rights of the
parties.



Sec. 15.737-22  Depositions.

    Depositions for use at a hearing may, with the consent of the
parties in writing or the written approval of the Administrative Law
Judge, be taken by either the Director or the respondent or their duly
authorized representatives. Depositions may be taken upon oral or
written interrogatories, upon not less than 10 days' written notice to
the other party before any officer duly authorized to administer an oath
for general purposes or before an officer or employee of the Department
who is authorized to administer an oath. Such notice shall state the
names of the witnesses and the time and place where the depositions are
to be taken. The requirement of 10 days' notice may be waived by the
parties in writing, and depositions may then be taken from the persons
and at the times and places mutually agreed to by the parties. When a
deposition is taken upon written interrogatories, any cross-examination
shall be upon written interrogatories. Copies of such written
interrogatories shall be served upon the other party with the notice,
and copies of any written cross-interrogation shall be mailed or
delivered to the opposing party at least 5 days before the date of
taking the depositions, unless the parties mutually agree otherwise. A
party upon whose behalf a deposition is taken must file it with the
Administrative Law Judge and serve one copy upon the opposing party.
Expenses in the reporting of depositions shall be borne by the party at
whose instance the deposition is taken.



Sec. 15.737-23  Transcript.

    In cases where the hearing is stenographically reported by a
Government contract reporter, copies of the transcript may be obtained
from the reporter at rates not to exceed the maximum rates fixed by
contract between the Government and the reporter or from the Department
at actual cost of duplication. Where the hearing is stenographically
reported by a regular employee of the Department, a copy thereof will be
supplied to the respondent either without charge or upon payment of a
reasonable fee. Copies of exhibits introducted at the hearing or at

[[Page 183]]

the taking of depositions will be supplied to the parties upon the
payment of a reasonable fee (Sec. 501, Pub. L. 82-137, 65 Stat. 290 (31
U.S.C. 483a)).



Sec. 15.737-24  Proposed findings and conclusions.

    Except in cases where the respondent has failed to answer the
complaint or where a party has failed to appear at the hearing, the
Administrative Law Judge prior to making his/her decision, shall afford
the parties a reasonable opportunity to submit proposed findings and
conclusions and supporting reasons therefor.



Sec. 15.737-25  Decision of the Administrative Law Judge.

    As soon as practicable after the conclusion of a hearing and the
receipt of any proposed findings and conclusions timely submitted by the
parties, the Administrative Law Judge shall make the initial decision in
the case. The decision shall include (a) a statement of findings and
conclusions, as well as the reasons or basis therefor, upon all the
material issues of fact, law, or discretion presented on the record, and
(b) an order of suspension from practice before the Department or
separate statutory agency thereof or other appropriate disciplinary
action, or an order of dismissal of the complaint. The Administrative
Law Judge shall file the decision with the Director and shall transmit a
copy thereof to the respondent or his/her attorney of record. In the
absence of an appeal to the General Counsel or review of the decision
upon motion of the General Counsel, the decision of the Administrative
Law Judge shall without further proceedings become the decision of the
General Counsel 30 days from the date of the Administrative Law Judge's
decision.



Sec. 15.737-26  Appeal to the General Counsel.

    Within 30 days from the date of the Administrative Law Judge's
decision, either party may appeal to the General Counsel. The appeal
shall be filed with the Director in duplicate and shall include
exceptions to the decision of the Administrative Law Judge and
supporting reasons for such exceptions. If an appeal is filed by the
Director, he/she shall transmit a copy thereof to the respondent. Within
30 days after receipt of an appeal or copy thereof, the other party may
file a reply brief in duplicate with the Director. If the reply brief is
filed by the Director, he/she shall transmit a copy of it to the
respondent. Upon the filing of an appeal and a reply brief, if any, the
Director shall transmit the entire record to the General Counsel.



Sec. 15.737-27  Decision of the General Counsel.

    On appeal from or review of the initial decision of the
Administrative Law Judge, the General Counsel will make the agency
decision. In making his/her decision, the General Counsel will review
the record or such portions thereof as may be cited by the parties to
permit limiting of the issues. A copy of the General Counsel's decision
shall be transmitted to the respondent by the Director.



Sec. 15.737-28  Notice of disciplinary action.

    (a) Upon the issuance of a final order suspending a former officer
or employee from practice before the Department or a separate statutory
agency thereof, the Director shall give notice thereof to appropriate
officers and employees of the Department. Officers and employees of the
Department shall refuse to participate in any appearance by such former
officer or employee or to accept any communication which constitutes the
prohibited practice before the Department or separate statutory agency
thereof during the period of suspension.
    (b) The Director shall take other appropriate disciplinary action as
may be required by the final order.



                Subpart D_Other Departmental Proceedings



Sec. 15.737-29  Review by the General Counsel.

    In my proceeding before the Department, if an initial decision is
made with respect to the disqualification of a representative or
attorney for a party on the grounds of 18 U.S.C. 207(a), (b) or (c),
such decision may be appealed to

[[Page 184]]

the General Counsel, who will make the agency decision on the issue.



PART 16_REGULATIONS IMPLEMENTING THE PROGRAM FRAUD CIVIL REMEDIES ACT OF
1986--Table of Contents



Sec.
16.1 Basis and purpose.
16.2 Definitions.
16.3 Basis for civil penalties and assessments.
16.4 Investigation.
16.5 Review by the reviewing official.
16.6 Prerequisites for issuing a complaint.
16.7 Complaint.
16.8 Service of complaint.
16.9 Answer.
16.10 Default upon failure to file an answer.
16.11 Referral of complaint and answer to the ALJ.
16.12 Notice of hearing.
16.13 Parties to the hearing.
16.14 Separation of functions.
16.15 Ex parte contacts.
16.16 Disqualification of reviewing official or ALJ.
16.17 Rights of parties.
16.18 Authority of the ALJ.
16.19 Prehearing conferences.
16.20 Disclosure of documents.
16.21 Discovery.
16.22 Exchange of witness lists, statements, and exhibits.
16.23 Subpoenas for attendance at hearing.
16.24 Protective order.
16.25 Fees.
16.26 Form, filing and service of papers.
16.27 Computation of time.
16.28 Motions.
16.29 Sanctions.
16.30 The hearing and burden of proof.
16.31 Determining the amount of penalties and assessments.
16.32 Location of hearing.
16.33 Witnesses.
16.34 Evidence.
16.35 The record.
16.36 Post-hearing briefs.
16.37 Initial decision.
16.38 Reconsideration of initial decision.
16.39 Appeal to authority head.
16.40 Stays ordered by the Department of Justice.
16.41 Stay pending appeal.
16.42 Judicial review.
16.43 Collection of civil penalties and assessments.
16.44 Right to administrative offset.
16.45 Deposit in Treasury of United States.
16.46 Compromise or settlement.
16.47 Limitations.

    Authority: 31 U.S.C. 3801-3812.

    Source: 52 FR 35071, Sept. 17, 1987, unless otherwise noted.



Sec. 16.1  Basis and purpose.

    (a) Basis. This part implements the Program Fraud Civil Remedies Act
of 1986, Pub. L. 99-509, sections 6101-6104, 100 Stat. 1874 (October 21,
1986), to be codified at 31 U.S.C. 3801-3812. 31 U.S.C. 3809 requires
each authority head to promulgate regulations necessary to implement the
provisions of the statute.
    (b) Purpose. This part
    (1) Establishes administrative procedures for imposing civil
penalties and assessments against persons who make, submit, or present,
or cause to be made, submitted, or presented, false, fictitious, or
fraudulent claims or written statements to authorities or to their
agents, and
    (2) Specifies the hearing and appeal rights of persons subject to
allegations of liability for such penalties and assessments.



Sec. 16.2  Definitions.

    ALJ means an Administrative Law Judge in the authority appointed
pursuant to 5 U.S.C. 3105 or detailed to the authority pursuant to 5
U.S.C. 3344.
    Authority means the Department of the Treasury.
    Authority head means the Assistant Secretary of the Treasury for
Management.
    Benefit, when used in the context of false statements made with
respect to a benefit, means anything of value including but not limited
to any advantage, preference, privilege, license, permit, favorable
decision, ruling, status, or loan guarantee. This definition should be
distinguished from the limitations on coverage of these regulations with
respect to beneficiaries of specific benefit programs which are found in
Sec. 16.3(c) of this part.
    Claim means any request, demand, or submission--
    (a) Made to the authority for property, services, or money
(including money representing grants, loans, insurance, or benefits);
    (b) Made to a recipient of property, services, or money from the
authority or to a party to a contract with the authority--
    (1) For property or services if the United States--

[[Page 185]]

    (i) Provided such property or services;
    (ii) Provided any portion of the funds for the purchase of such
property or services; or
    (iii) Will reimburse such recipient or party for the purchase of
such property or services; or
    (2) For the payment of money (including money representing grants,
loans, insurance, or benefits) if the United States--
    (i) Provided any portion of the money requested or demanded; or
    (ii) Will reimburse such recipient or party for any portion of the
money paid on such request or demand; or
    (c) Made to the authority which has the effect of decreasing an
obligation to pay or account for property, services, or money, except
that such term does not include any claim made in any return of tax
imposed by the Internal Revenue Code of 1954.
    Complaint means the administrative complaint served by the reviewing
official on the defendant under Sec. 16.7 of this part.
    Defendant means any person alleged in a complaint under Sec. 16.7
to be liable for a civil penalty or assessment under Sec. 16.3.
    Department means the Department of the Treasury.
    Government means the United States Government.
    Individual means a natural person.
    Initial decision means the written decision of the ALJ required by
Sec. 16.10 or Sec. 16.37, and includes a revised initial decision
issued following a remand or a motion for reconsideration.
    Investigating official means the Inspector General of the Department
of the Treasury.
    Knows or has reason to know, means that a person, with respect to a
claim or statement--
    (a) Has actual knowledge that the claim or statement is false,
fictitious, or fraudulent;
    (b) Acts in deliberate ignorance of the truth or falsity of the
claim or statement; or
    (c) Acts in reckless disregard of the truth or falsity of the claim
or statement.
    Makes, wherever it appears, shall include the terms ``presents,''
``submits,'' and ``causes to be made, presented,'' or ``submitted.'' As
the context requires, making or made, shall likewise include the
corresponding forms of such terms.
    Person means any individual, partnership, corporation, association,
private organization, State, political subdivision of a State,
municipality, county, district, and Indian tribe, and includes the
plural of that term.
    Presiding officer means an administrative law judge appointed in the
authority pursuant to 5 U.S.C. 3105 or detailed to the authority
pursuant to section 3344 of such title.
    Representative means an attorney designated in writing by a
defendant to appear on his or her behalf in administrative hearings
before the Department and to represent a defendant in all other legal
matters regarding a complaint made pursuant to these regulations.
    Reviewing official means the General Counsel, or another individual
in the Legal Division of the Department designated by the General
Counsel, who is--
    (a) Serving in a position for which the rate of basic pay is not
less than the minimum rate of basic pay for grade GS-16; and
    (b) Is not subject to supervision by, or required to report to, the
investigating official; and
    (c) Is not employed in the organization unit of the authority in
which the investigating official is employed.
    Statement means any representation, certification, affirmation,
document, record, or accounting or bookkeeping entry made--
    (a) With respect to a claim or to obtain the approval or payment of
a claim (including relating to eligibility to make a claim); or
    (b) With respect to (including relating to eligibility for)--
    (1) A contract with, or a bid or proposal for a contract with; or
    (2) A grant, loan, or benefit from, the authority, or any State,
political subdivision of a State, or other party, if the United States
Government provides any portion of the money or property under such
contract or for such grant, loan, or benefit, or if the government will
reimburse such State, political subdivision, or party of any portion of

[[Page 186]]

the money or property under such contract or for such grant, loan, or
benefit, except that such term does not include any claim made in any
return of tax imposed by the Internal Revenue Code of 1954.



Sec. 16.3  Basis for civil penalties and assessments.

    (a) Claims. (1) Except as provided in paragraph (c) of this section,
any person who makes a claim that the person knows or has reason to
know--
    (i) Is false, fictitious, or fraudulent;
    (ii) Includes or is supported by any written statement which asserts
a material fact which is false, fictitious, or fraudulent;
    (iii) Includes or is supported by any written statement that--
    (A) Omits a material fact;
    (B) Is false, fictitious, or fraudulent as a result of such
omission; and
    (C) Is a statement in which the person making such statement has a
duty to include such material fact; or
    (iv) Is for payment for the provision of property or services which
the person has not provided as claimed, shall be subject, in addition to
any other remedy that may be prescribed by law, to a civil penalty of
not more than $5,000 for each such claim.
    (2) Each voucher, invoice, claim form, or other individual request
or demand for property, services, or money constitutes a separate claim.
    (3) A claim shall be considered made to an authority, recipient, or
party when such claim is actually made to an agent, fiscal intermediary,
or other entity, including any State or political subdivision thereof,
acting for or on behalf of such authority, recipient, or party.
    (4) Each claim for property, services, or money is subject to a
civil penalty under these regulations regardless of whether such
property, services, or money is actually delivered or paid.
    (5) If the government has made any payment (including transferred
property or provided services) on a claim, a person subject to a civil
penalty under paragraph (a)(1) of this section shall also be subject to
an assessment of not more than twice the amount of such claim or that
portion thereof that is determined to be in violation of paragraph
(a)(1) of this section. Such assessment shall be in lieu of damages
sustained by the Government because of such claim.
    (b) Statements. (1) Except as provided in paragraph (c) of this
section, any person who makes a written statement that--
    (i) The person knows or has reason to know--
    (A) Asserts a material fact which is false, fictitious, or
fraudulent; or
    (B) Is false, fictitious, or fraudulent because it omits a material
fact that the person making the statement has a duty to include in such
statement; and
    (ii) Includes or is accompanied by an express certification or
affirmation of the truthfulness and accuracy of the content of the
statement,

shall be subject, in addition to any other remedy that may be prescribed
by law, to a civil penalty of not more than $5,000 for each such
statement.
    (2) Each written representation, certification, or affirmation
constitutes a separate statement.
    (3) A statement shall be considered made to an authority when such
statement is actually made to an agent, fiscal intermediary, or other
entity, including any State or political subdivision thereof, acting for
or on behalf of such authority.
    (c)(1) In the case of any claim or statement made by any individual
relating to any of the benefits listed in paragraph (c)(2) of this
section, received by such individual, such individual may be held liable
for penalties and assessments under this section only if such claim or
statement is made by such individual in making application for such
benefits with respect to such individual's eligibility to receive such
benefits.
    (2) For purposes of this paragraph, the term benefits means--
    (i) Benefits under the food stamp program (as defined in section
3(h) of the Food Stamp Act of 1977);
    (ii) Benefits under Chapters 11, 13, 15, 17, and 21 of Title 38;
    (iii) Benefits under the Black Lung Benefits Act;
    (iv) Any authority or other benefit under the Railroad Retirement
Act of 1974;

[[Page 187]]

    (v) Benefits under the National School Lunch Act;
    (vi) Benefits under any housing assistance program for lower income
families or elderly or handicapped persons which is administered by the
Secretary of Housing and Urban Development or the Secretary of
Agriculture;
    (vii) Benefits under the special supplemental food program for
women, infants, and children established under section 17 of the Child
Nutrition Act of 1966;
    (viii) Benefits under part A of the Energy Conservation in Existing
Buildings Act of 1976;
    (ix) Benefits under the supplemental security income program under
title XVI of the Social Security Act;
    (x) Old age, survivors, and disability insurance benefits under
title II of the Social Security Act;
    (xi) Benefits under title XVIII of the Social Security Act;
    (xii) Aid to families with dependent children under a State plan
approved under section 402(a) of the Social Security Act;
    (xiii) Medical assistance under a State plan approved under section
1902(a) of the Social Security Act;
    (xiv) Benefits under title XX of the Social Security Act;
    (xv) Benefits under section 336 of the Older Americans Act; or
    (xvi) Benefits under the Low-Income Home Energy Assistance Act of
1981, which are intended for the personal use of the individual who
receives the benefits or for a member of the individual's family.
    (d) No proof of specific intent to defraud is required to establish
liability under this section.
    (e) In any case in which it is determined that more than one person
is liable for making a claim or statement under this section, each such
person may be held liable for a civil penalty under this section.
    (f) In any case in which it is determined that more than one person
is liable for making a claim under this section, and on which the
Government has made payment (including transferred property or provided
services), an assessment may be imposed against any such person or
jointly and severally against any combination of such persons.



Sec. 16.4  Investigation.

    (a) If an investigating official concludes that a subpoena pursuant
to the authority conferred by 31 U.S.C. 3804(a) is warranted--
    (1) The subpoena so issued shall notify the person to whom it is
addressed of the authority under which the subpoena is issued and shall
identify the information, records, or documents sought;
    (2) The investigating official may designate a person to act on his
behalf to receive the information, records, or documents sought; and
    (3) The person receiving such subpoena shall be required to tender
to the investigating official or to the person designated to receive the
information, records, or documents, a certification that the
information, records, or documents sought have been produced, or that
such information, records, or documents are not available and the
reasons therefor, or that such information, records, or documents,
suitably identified, have been withheld based upon the assertion of an
identified legal privilege.
    (b) If the investigating official concludes that an action under the
Program Fraud Civil Remedies Act may be warranted, the investigating
official shall report the findings and conclusions of such investigation
to the reviewing official.
    (c) Nothing in this section shall preclude or limit the
investigating official's discretion to refer allegations directly to the
Department of Justice for suit under the False Claims Act, 31 U.S.C.
3729-3731, or for other civil relief, or to preclude or limit such
official's discretion to defer or postpone a report or referral to avoid
interference with an investigation into criminal misconduct or a
criminal prosecution.
    (d) Nothing in this section modifies any responsibility of the
investigating official to report violations of criminal law to the
Attorney General.



Sec. 16.5  Review by the reviewing official.

    (a) If, based on the report of the investigating official under
Sec. 16.4(b), the reviewing official determines that

[[Page 188]]

there is adequate evidence to believe that a person is liable under
Sec. 16.3 of this part, the reviewing official shall transmit to the
Attorney General a written notice of the reviewing official's intention
to issue a complaint under Sec. 16.7.
    (b) Such notice shall include--
    (1) A statement of the reviewing official's reasons for issuing a
complaint;
    (2) A statement specifying the evidence that supports the
allegations of liability;
    (3) A description of the claims or statements upon which the
allegations of liability are based;
    (4) An estimate of the amount of money or the value, if any, of
property, services, or other benefits requested or demanded in violation
of Sec. 16.3 of this part; or, if no monetary value can be put on the
property, service or benefit, a statement regarding the non-monetary
consequences to the agency of a false statement.
    (5) A statement of any exculpatory or mitigating circumstances that
may relate to the claims or statements known by the reviewing official
or the investigating official; and
    (6) A statement that there is a reasonable prospect of collecting an
appropriate amount of penalties and assessments. Such a statement may be
based upon information then known or an absence of any information
indicating that the person may be unable to pay such an amount.



Sec. 16.6  Prerequisites for issuing a complaint.

    (a) The reviewing official may issue a complaint under Sec. 16.7
only if--
    (1) The Department of Justice approves the issuance of a complaint
in a written statement described in 31 U.S.C. 3803(b)(l), and
    (2) In the case of allegations of liability under Sec. 16.3(a) with
respect to a claim, the reviewing official determines that, with respect
to such claim or a group of related claims submitted at the same time
such claim is submitted (as defined in paragraph (b) of this section),
the amount of money or the value of property or services demanded or
requested in violation of Sec. 16.3(a) does not exceed $150,000.
    (b) For the purposes of this section, a related group of claims
submitted at the same time shall include only those claims arising from
the same transaction (e.g., grant, loan, application, or contract) that
are submitted simultaneously as part of a single request, demand, or
submission.
    (c) Nothing in this section shall be construed to limit the
reviewing official's authority to join in a single complaint against a
person, claims that are unrelated or were not submitted simultaneously,
regardless of the amount of money or the value of property or services
demanded or requested, as long as the total amount for each claim does
not exceed $150,000.



Sec. 16.7  Complaint.

    (a) On or after the date the Attorney General or his designee
approves the issuance of a complaint in accordance with 31 U.S.C.
3803(b)(1), the reviewing official may serve a complaint on the
defendant, as provided in Sec. 16.8.
    (b) The complaint shall state--
    (1) The allegations of liability against the defendant, including
the statutory basis for liability, an identification of the claims or
statements that are the basis for the alleged liability, and the reasons
why liability allegedly arises from such claims or statements;
    (2) The maximum amount of penalties and assessments for which the
defendant may be held liable;
    (3) Instructions for filing an answer to request a hearing,
including a specific statement of the defendant's right to request a
hearing by filing an answer and to be represented by an attorney;
    (4) That the defendant has a right to review and obtain certain
information pursuant to Section 16.20 herein; and
    (5) That failure to file an answer within 30 days of service of the
complaint will result in the imposition of the maximum amount of
penalties and assessments without right to appeal.
    (c) At the same time the reviewing official serves the complaint on
the defendant(s), he or she shall serve the defendant with a copy of
these regulations.

[[Page 189]]



Sec. 16.8  Service of complaint.

    (a) Service of a complaint must be made by a certified or registered
mail or by delivery in any manner authorized by Rule 4(d) of the Federal
Rules of Civil Procedure.
    (b) Proof of service, stating the name and address of the person on
whom the complaint was served, and the manner and date of service, may
be made by--
    (1) Affidavit of the individual making service;
    (2) An acknowledged United States Postal Service return receipt
card; or
    (3) Written acknowledgement of the defendant or his representative.



Sec. 16.9  Answer.

    (a) The defendant may request a hearing by filing an answer with the
reviewing official within 30 days of service of the complaint. An answer
shall be deemed to be a request for hearing.
    (b) In the answer, the defendant--
    (1) Shall admit or deny each of the allegations of liability made in
the complaint;
    (2) Shall state any defense on which the defendant intends to rely;
    (3) May state any reasons why the defendant contends that the
penalties and assessments should be less than the statutory maximum; and
    (4) Shall state whether the defendant has authorized an attorney to
act as defendant's representative, and shall state the name, address,
and telephone number of the representative.



Sec. 16.10  Default upon failure to file an answer.

    (a) If the defendant does not file an answer within the time
prescribed in Sec. 16.9(a), the reviewing official may refer the
complaint to the ALJ for initial decision.
    (b) Upon the referral of the complaint, the ALJ shall promptly serve
on defendant in the manner prescribed in Sec. 16.8, a notice that an
initial decision will be issued under this section.
    (c) If the defendant fails to file a timely answer, the ALJ shall
assume the facts alleged in the complaint to be true and, if such facts
eatablish liability under Sec. 16.3, the ALJ shall issue an initial
decision imposing the maximum amount of penalties and assessments
allowed under the statute.
    (d) Except as otherwise provided in this section, by failing to file
a timely answer, the defendant waives any right to further review of the
penalties and assessments imposed under paragraph (c) of this section,
and the initial decision shall become final and binding upon the parties
30 days after it is issued.
    (e) If, before such an initial decision becomes final, the defendant
files a motion with the ALJ, and serves a copy on the agency, seeking to
reopen on the grounds that extraordinary circumstances prevented the
defendant from filing a timely answer, the initial decision shall be
stayed pending the ALJ's decision on the motion. The ALJ shall permit
the agency a reasonable amount of time, not less than 15 calendar days,
to respond to the defendant's motion.
    (f) If, on such motion, the defendant can demonstrate extraordinary
circumstances excusing the failure to file a timely answer, the ALJ
shall withdraw the initial decision, if such a decision has been issued
pursuant to paragraph (c) of this section, and shall grant the defendant
an opportunity to answer the complaint.
    (g) A decision of the ALJ denying a defendant's motion under
paragraph (e) of this section is not subject to reconsideration under
Sec. 16.38.
    (h) The defendant may appeal to the authority head the decision
denying a motion to reopen by filing a notice of appeal with the
authority head within 15 days after the ALJ denies the motion. The
timely filing of a notice of appeal shall stay the initial decision
until the authority head decides the issue.
    (i) If the defendant files a timely notice of appeal with the
authority head, the ALJ shall forward the record of the proceeding to
the authority head.
    (j) The authority head shall decide expeditiously, and based solely
on the record before the ALJ, whether extraordinary circumstances excuse
the defendant's failure to file a timely answer.
    (k) If the authority head decides that extraordinary circumstances
excuse the defendant's failure to file a timely

[[Page 190]]

answer, the authority head shall remand the case to the ALJ with
instructions to grant the defendant an opportunity to file an answer.
    (l) If the authority head decides that the defendant's failure to
file a timely answer is not excused, the authority head shall reinstate
the initial decision of the ALJ, which shall become final and binding
upon the parties 30 days after the authority head issues such decision.



Sec. 16.11  Referral of complaint and answer to the ALJ.

    Upon receipt of an answer, the reviewing official shall file the
complaint and answer with the ALJ.



Sec. 16.12  Notice of hearing.

    (a) When the ALJ receives the complaint and answer, the ALJ shall
promptly serve a notice of hearing upon the defendant and the agency
representative in the manner prescribed by Sec. 16.8.
    (b) Such notice shall include--
    (1) The tentative time and place, and the nature of the hearing;
    (2) The legal authority and jurisdiction under which the hearing is
to be held;
    (3) The matters of fact and law to be asserted;
    (4) A description of the procedures for the conduct of the hearing;
    (5) The names, addresses, and telephone numbers of the
representatives of the Government and of the defendant, if any; and
    (6) Such other matters as the ALJ deems appropriate.



Sec. 16.13  Parties to the hearing.

    (a) The parties to the hearing shall be the defendant and the
authority.
    (b) Pursuant to 31 U.S.C. 3730(c)(5), a private plaintiff under the
False Claims Act may participate in these proceedings to the extent
authorized by the provisions of that Act.



Sec. 16.14  Separation of functions.

    (a) The investigating official, the reviewing official, and any
employee or agent of the authority who takes part in investigating,
preparing, or presenting a particular case may not, in such case or a
factually related case--
    (1) Participate in the hearing as the ALJ;
    (2) Participate or advise in the initial decision or the review of
the initial decision by the authority head, except as a witness or a
representative in public proceedings; or
    (3) Make the collection of penalties and assessments under 31 U.S.C.
3806.
    (b) The ALJ shall not be responsible to, or subject to the
supervision or direction of the investigating official or the reviewing
official.
    (c) Except as provided in paragraph (a) of this section, the
representative for the Government may be an attorney employed anywhere
in the Legal Division of the Department, or an attorney employed in the
offices of either the investigating official or the reviewing official;
however the representative of the Government may not participate or
advise in the review of the initial decision by the authority head.



Sec. 16.15  Ex parte contacts.

    No party or person (except employees of the ALJ's office) shall
communicate in any way with the ALJ on any matter at issue in a case,
unless on notice and opportunity for all parties to participate. This
provision does not prohibit a person or party from inquiring about the
status of a case or asking routine questions concerning administrative
functions or procedures.



Sec. 16.16  Disqualification of reviewing official or ALJ.

    (a) A reviewing official or ALJ in a particular case may disqualify
himself or herself at any time.
    (b) A party may file with the ALJ a motion for disqualification of a
reviewing official or an ALJ. Such motion shall be accompanied by an
affidavit alleging personal bias or other reason for disqualification.
    (c) Such motion and affidavit shall be filed promptly upon the
party's discovery of reasons requiring disqualification, or such
objections shall be deemed waived.
    (d) Such affidavit shall state specific facts that support the
party's assertion that personal bias or other reason for
disqualification exists and the time

[[Page 191]]

and circumstances of the party's discovery of such facts. It shall be
accompanied by a certificate of the representative of record that it is
made in good faith.
    (e) Upon the filing of such a motion and affidavit, the ALJ shall
proceed no further in the case until he or she resolves the matter of
disqualification in accordance with paragrpah (f) of this section.
    (f)(1) If the ALJ determines that a reviewing official is
disqualified, the ALJ shall dismiss the complaint without prejudice.
    (2) If the ALJ disqualifies himself or herself, the agency shall
seek to have the case promptly reassigned to another ALJ.
    (3) If the ALJ denies a motion to disqualify, the authority head may
determine the matter only as part of his or her review of the initial
decision upon appeal, if any.



Sec. 16.17  Rights of parties.

    Except as otherwise limited by this part, all parties may--
    (a) Be accompanied, represented, and advised by an attorney;
    (b) Participate in any conference held by the ALJ;
    (c) Conduct discovery;
    (d) Agree to stipulations of fact or law, which shall be made part
of the record;
    (e) Present evidence relevant to the issues at the hearing;
    (f) Present and cross-examine witnesses;
    (g) Present oral arguments at the hearing as permitted by the ALJ;
and
    (h) Submit written beliefs and proposed findings of fact and
conclusions of law after the hearing.



Sec. 16.18  Authority of the ALJ.

    (a) The ALJ shall conduct a fair and impartial hearing, avoid delay,
maintain order, and assure that a record of the proceeding is made.
    (b) The ALJ has the authority to--
    (1) Set and change the date, time, and place of the hearing upon
reasonable notice to the parties;
    (2) Continue or recess the hearing in whole or in part for a
reasonable period of time;
    (3) Hold conferences to identify or simplify the issues, or to
consider other matters that may aid in the expeditious disposition of
the proceeding;
    (4) Administer oaths and affirmations;
    (5) Issue subpoenas requiring the attendance of witnesses and the
production of documents at depositions or at hearings;
    (6) Rule on motions and other procedural matters;
    (7) Regulate the scope and timing of discovery;
    (8) Regulate the course of the hearing and the conduct of
representatives and parties;
    (9) Examine witnesses;
    (10) Receive, rule on, exclude, or limit evidence;
    (11) Upon motion of a party, take official notice of facts;
    (12) Upon motion of a party, decide cases, in whole or in part, by
summary judgment where there is no disputed issue of material fact;
    (13) Conduct any conference, argument, or hearing on motions in
person or by telephone; and
    (14) Exercise such other authority as is necessary to carry out the
responsibilities of the ALJ under this part.
    (c) The ALJ does not have the authority to make any determinations
regarding the validity of Federal statutes or regulations, or
Departmental orders, Directives, or other published rules.



Sec. 16.19  Prehearing conferences.

    (a) The ALJ may schedule prehearing conferences as appropriate.
    (b) Upon the motion of any party, the ALJ shall schedule at least
one prehearing conference at a reasonable time in advance of the
hearing.
    (c) The ALJ may use prehearing conferences to discuss the following:
    (1) Simplification of the issues;
    (2) The necessity or desirability of amendments to the pleadings,
including the need for a more definite statement;
    (3) Stipulations, admissions of fact or the content and authenticity
of documents;
    (4) Whether the parties can agree to submission of the case on a
stipulated record;

[[Page 192]]

    (5) Whether a party chooses to waive appearance at an oral hearing
and to submit only documentary evidence (subject to the objection of
other parties) and written argument;
    (6) Limitation of the number of witnesses;
    (7) Scheduling dates for the exchange of witness lists and of
proposed exhibits;
    (8) Discovery;
    (9) The time and place for the hearing; and
    (10) Such other matters as may tend to expedite the fair and just
disposition of the proceedings.
    (d) The ALJ may issue an order containing all matters agreed upon by
the parties or ordered by the ALJ at a prehearing conference.



Sec. 16.20  Disclosure of documents.

    (a) Upon written request to the reviewing official, the defendant
may review any relevant and material documents, transcripts, records,
and other material that relate to the allegations set out in the
complaint and upon which the findings and conclusions of the
investigating official under Sec. 16.4(b) are based unless such
documents are subject to a privilege under Federal law. The Department
shall schedule such review at a time and place convenient to it. Upon
payment of fees for duplication, the defendant may obtain copies of such
documents.
    (b) Upon written request to the reviewing official, the defendant
also may obtian a copy of all exculpatory information in the possession
of the reviewing official or investigating official relating to the
allegations in the complaint, even if it is contained in a document that
would otherwise be privileged. If the document would otherwise be
privileged, only that portion containing exculpatory information must be
disclosed.
    (c) The notice sent to the Attorney General from the reviewing
official as described in Sec. 16.5 is not discoverable under any
circumstances.
    (d) The defendant may file a motion to compel disclosure of the
documents subject to the provisions of this section. Such a motion may
only be filed with the ALJ following the filing of an answer pursuant to
Sec. 16.9.



Sec. 16.21  Discovery.

    (a) The following types of discovery are authorized:
    (1) Requests for production of documents for inspection and copying;
    (2) Requests for admissions of the authenticity of any relevant
document or of the truth of any relevant fact;
    (3) Written interrogatories; and
    (4) Depositions.
    (b) For the purposes of this section and Sec. Sec. 16.22 and 16.23,
the term ``documents'' includes information, documents, reports,
answers, records, accounts, papers, and other data, either paper or
electronic, and other documentary evidence. Nothing contained herein
shall be interpreted to require the creation of a document.
    (c) Unless mutually agreed to by the parties, discovery is available
only as ordered by the ALJ. The ALJ shall regulate the timing of
discovery.
    (d) Motions for discovery. (1) A party seeking discovery may file a
motion with the ALJ if it is not made available by another party on an
informal basis. Such a motion shall be accompanied by a copy of the
requested discovery, or in the case of depositions, a summary of the
scope of the proposed deposition, and a description of the efforts which
have been made by the party to obtain discovery.
    (2) Within ten days of service, a party may file an opposition to
the motion and/or a motion for protective order as provided in Sec.
16.24.
    (3) The ALJ may grant a motion for discovery only if he or she finds
that the discovery sought--
    (i) Is necessary for the expeditious, fair, and reasonable
consideration of the issues;
    (ii) Is not unduly costly or burdensome;
    (iii) Will not unduly delay the proceeding; and
    (iv) Does not seek privileged information.
    (4) The burden of showing that discovery should be allowed is on the
party seeking discovery.
    (5) The ALJ may grant discovery subject to a protective order under
Sec. 16.24.
    (e) Depositions. (1) If a motion for deposition is granted, the ALJ
shall issue a subpoena for the deponent, which may require the deponent
to produce

[[Page 193]]

documents. The subpoena shall specify the time and place at which the
deposition will be held.
    (2) The party seeking to depose shall serve the subpoena in the
manner prescribed in Sec. 16.8.
    (3) The deponent may file with the ALJ a motion to quash the
subpoena or a motion for a protective order within ten days of service.
    (4) The party seeking to depose shall provide for the taking of a
verbatim transcript of the deposition, which it shall make available to
all other parties for inspection and copying.
    (f) Each party shall bear its own costs of discovery.



Sec. 16.22  Exchange of witness lists, statements, and exhibits.

    (a) At least 15 days before the hearing or at such other time as may
be ordered by the ALJ, the parties shall exchange witness lists, copies
of prior statements of proposed witnesses, and copies of proposed
hearing exhibits, including copies of any written statements that the
party intends to offer in lieu of live testimony in accordance with
Sec. 16.33(b). At the time the above documents are exchanged, any party
that intends to rely on the transcript of deposition testimony in lieu
of live testimony at the hearing, if permitted by the ALJ, shall provide
each party with a copy of the specific pages of the transcript it
intends to introduce into evidence.
    (b) If a party objects, the ALJ shall not admit into evidence the
testimony of any witness whose name does not appear on the witness list
or any exhibit not provided to the opposing party as provided above
unless the ALJ finds good cause and that there is no prejudice to the
objecting party.
    (c) Unless another party objects within the time set by the ALJ,
documents exchanged in accordance with paragraph (a) of this section,
shall be deemed to be authentic for the purpose of admissibility at the
hearing.



Sec. 16.23  Subpoenas for attendance at hearing.

    (a) A party wishing to procure the appearance and testimony of any
individual at the hearing may request that the ALJ issue a subpoena.
    (b) A subpoena requiring the attendance and testimony of an
individual may also require the individual to produce documents at the
hearing.
    (c) A party seeking a subpoena shall file a written request therefor
not less than 15 days before the date fixed for the hearing unless
otherwise allowed by the ALJ for good cause shown. Such request shall
specify any documents to be produced and shall designate the witnesses
and describe the address and location thereof with sufficient
particularity to permit such witnesses to be found.
    (d) The subpoena shall specify the time and place at which the
witness is to appear and any documents the witness is to bring with him
or her.
    (e) The party seeking the subpoena shall serve it in the manner
prescribed in Sec. 16.8. A subpoena on a party or upon an individual
under the control of a party may be served by first class mail.
    (f) A party or the individual to whom the subpoena is directed may
file with the ALJ a motion to quash the subpoena within ten days after
service or on or before the time specified in the subpoena for
compliance if it is less than ten days after service.



Sec. 16.24  Protective order.

    (a) A party or a prospective witness or deponent may file a motion
for a protective order with respect to discovery sought by an opposing
party or with respect to the hearing, seeking to limit the availability
or disclosure of evidence.
    (b) In issuing a protective order, the ALJ may make any order which
justice requires to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense, including one or
more of the following:
    (1) That the discovery not be had;
    (2) That the discovery may be had only on specified terms and
conditions, including a designation of the time or place;
    (3) That the discovery may be had only through a method of discovery
other than that requested;
    (4) That certain matters not be inquired into, or that the scope of
discovery be limited to certain matters;

[[Page 194]]

    (5) That discovery be conducted with no one present except persons
designated by the ALJ;
    (6) That the contents of discovery or evidence be sealed;
    (7) That a deposition after being sealed be opened only by order of
the ALJ;
    (8) That a trade secret or other confidential research, development,
commercial information, or facts pertaining to any criminal
investigation, proceeding, or other administrative investigation not be
disclosed or be disclosed only in a designated way; or
    (9) That the parties simultaneously file specified documents or
information enclosed in sealed envelopes to be opened as directed by the
ALJ.



Sec. 16.25  Fees.

    The party requesting a subpoena shall pay the cost of the fees and
mileage of any witness subpoenaed in the amounts that would be payable
to a witness in a proceeding in United States District Court. A check
for witness fees and mileage shall accompany the subpoena when served,
except that when a subpoena is issued on behalf of the authority, a
check for witness fees and mileage need not accompany the subpoena.



Sec. 16.26  Form, filing and service of papers.

    (a) Form. (1) Documents filed with the ALJ shall include an original
and two copies.
    (2) Every pleading and paper filed in the proceeding shall contain a
caption setting forth the title of the action, the case number assigned
by the ALJ, and a designation of the paper (e.g., motion to quash
subpoena).
    (3) Every pleading and paper shall be signed by, and shall contain
the address and telephone number of the party or the person on whose
behalf the paper was filed, or his or her representative.
    (4) Papers are considered filed when they are mailed. Date of
mailing may be etablished by a certificate from the party or its
representative or by proof that the document was sent by certified or
registered mail.
    (b) Service. A party filing a document with the ALJ shall, at the
time of filing, serve a copy of such document on every other party.
Service upon any party of any document other than the complaint or
notice of hearing shall be made by delivering or mailing a copy to the
party's last known address. When a party is represented by an attorney,
service shall be made upon such representative in lieu of the actual
party.
    (c) Proof of service. A certificate of the individual serving the
document by personal delivery or by mail, setting forth the manner of
service, shall be proof of service.



Sec. 16.27  Computation of time.

    (a) In computing any period of time under this part or in an order
issued thereunder, the time begins with the day following the act,
event, or default, and includes the last day of the period, unless it is
a Saturday, Sunday, or legal holiday observed by the Federal Government,
in which event it includes the next business day.
    (b) When the period of time allowed is less than seven days,
intermediate Saturdays, Sundays, and legal holidays observed by the
Federal Government shall be excluded from the computation. When the
period of time allowed is more than seven days, all intervening calendar
days are included in the computation.
    (c) Where a document has been served or issued by mail, an
additional five days will be added to the time permitted for any
response.



Sec. 16.28  Motions.

    (a) Any application to the ALJ for an order or ruling shall be by
motion. Motions shall state the relief sought, the authority relied
upon, and the facts alleged, and shall be filed with the ALJ and served
on all other parties.
    (b) Except for motions made during a prehearing conference or at the
hearing, all motions shall be in writing. The ALJ may require that oral
motions be reduced to writing.
    (c) Within 15 days after a written motion is served, or such other
time as may be fixed by the ALJ, any party may file a response to such
motion.
    (d) The ALJ may not grant a written motion before the time for
filing responses thereto has expired, except

[[Page 195]]

upon consent of the parties or following a hearing on the motion, but
may overrule or deny such motion without awaiting a response.
    (e) The ALJ shall make a reasonable effort to dispose of all
outstanding motions prior to the beginning of the hearing.



Sec. 16.29  Sanctions.

    (a) The ALJ may sanction a person, including any party or
representative for--
    (1) Failing to comply with an order, rule, or procedure governing
the proceeding;
    (2) Failing to prosecute or defend an action; or
    (3) Engaging in other misconduct that interferes with the speedy,
orderly, or fair conduct of the hearing.
    (b) Any such sanction, including but not limited to those listed in
paragraphs (c), (d), and (e) of this section, shall reasonably relate to
the nature of the failure or misconduct.
    (c) When a party fails to comply with an order, including an order
for taking a deposition, the production of evidence within the party's
control, or a request for admission, the ALJ may--
    (1) Draw an inference in favor of the requesting party with regard
to the information sought;
    (2) In the case of requests for admission, deem each matter of which
an admission is requested to be admitted;
    (3) Prohibit the party failing to comply with such order from
introducing evidence concerning, or otherwise relying upon testimony
relating to the information sought; and
    (4) Strike any part of the pleadings or other submissions of the
party failing to comply with such request.
    (d) If a party fails to prosecute or defend an action under this
part commenced by service of a notice of hearing, the ALJ may dismiss
the action or may issue an initial decision imposing penalties and
assessments.
    (e) The ALJ may refuse to consider any motion, request, response,
brief or other document which is not filed in a timely fashion.



Sec. 16.30  The hearing and burden of proof.

    (a) The ALJ shall conduct a hearing on the record in order to
determine whether the defendant is liable for a civil penalty or
assessment under Sec. 16.3 and, if so, the appropriate amount of any
such civil penalty or assessment considering any aggravating or
mitigating factors.
    (b) The authority shall have the burden of proving defendant's
liability and any aggravating factors by a preponderance of the
evidence.
    (c) The defendant shall have the burden of proving any affirmative
defenses and any mitigating factors by a preponderance of the evidence.
    (d) The hearing shall be open to the public unless otherwise ordered
by the ALJ for good cause shown.



Sec. 16.31  Determining the amount of penalties and assessments.

    (a) In determining an appropriate amount of civil penalties and
assessements, the ALJ and upon appeal, the authority head, should
evaluate any circumstances that mitigate or aggravate the violation and
should articulate in their opinions the reasons that support the
penalties and assessments they impose. Because of the intangible costs
of fraud, the expense of investigating such conduct, and the need to
deter others who might be similarly tempted, double damages and a
significant civil penalty ordinarily should be imposed.
    (b) Although not exhaustive, the following factors are among those
that may influence the ALJ and the authority head in determining the
amount of penalties and assessments to impose with respect to the
misconduct (i.e., the false, fictitious, or fraudulent claims or
statements) charged in the complaint:
    (1) The number of false, fictitious, or fraudulent claims or
statements;
    (2) The time period over which such claims or statements were made;
    (3) The degree of the defendant's culpability with respect to the
misconduct;
    (4) The amount of money or the value of the property, services, or
benefit falsely claimed;

[[Page 196]]

    (5) The value of the Government's actual loss as a result of the
misconduct, including foreseeable consequential damages and the costs of
investigation;
    (6) The relationship of the amount imposed as civil penalties to the
amount of the Government's loss;
    (7) The potential or actual impact of the misconduct upon national
defense, public health or safety, or public confidence in the management
of Government programs and operations;
    (8) Whether the defendant has engaged in a pattern of the same or
similar misconduct;
    (9) Whether the defendant attempted to conceal the misconduct;
    (10) The degree to which the defendant has involved others in the
misconduct or in concealing it;
    (11) Where the misconduct of employees or agents is imputed to the
defendant, the extent to which the defendant's practices fostered or
attempted to preclude such misconduct;
    (12) Whether the defendant cooperated in or obstructed an
investigation of the misconduct;
    (13) Whether the defendant assisted in identifying and prosecuting
other wrongdoers;
    (14) The complexity of the program or transaction, and the degree of
the defendant's sophistication with respect to it, including the extent
of the defendant's prior participation in the program or in similar
transactions;
    (15) Whether the defendant has been found, in any criminal, civil,
or administrative proceeding to have engaged in similar misconduct or to
have dealt dishonestly with the Government of the United States or of a
State, directly or indirectly; and
    (16) The need to deter the defendant and others from engaging in the
same or similar misconduct.
    (c) Nothing in this section shall be construed to limit the ALJ or
the authority head from considering any other factors that in any given
case may mitigate or aggravate the offense for which penalties and
assessments are imposed.



Sec. 16.32  Location of hearing.

    (a) The hearing may be held--
    (1) In any judicial district of the United States in which the
defendant resides or transacts business;
    (2) In any judicial district of the United States in which the claim
or statement in issue was made; or
    (3) In such other place as may be agreed upon by the defendant and
the ALJ.
    (b) Each party shall have the opportunity to present argument with
respect to the location of the hearing.
    (c) The hearing shall be held at the place and at the time ordered
by the ALJ.



Sec. 16.33  Witnesses.

    (a) Except as provided in paragraph (b) of this section, testimony
at the hearing shall be given orally by witnesses under oath or
affirmation.
    (b) At the discretion of the ALJ, testimony may be admitted in the
form of a written statement or deposition. Any such written statement
must be provided to all other parties along with the last known address
of such witness, in a manner which allows sufficient time for other
parties to subpoena such witness for cross-examination at the hearing.
Prior written statements of witnesses proposed to testify at the hearing
and deposition transcripts shall be exchanged as provided in Sec.
16.22(a).
    (c) The ALJ shall exercise reasonable control over the mode and
order of interrogating witnesses and presenting evidence so as to--
    (1) Make the interrogation and presentation effective for the
ascertainment of the truth,
    (2) Avoid needless consumption of time, and
    (3) Protect witnesses from harassment or undue embarrassment.
    (d) The ALJ shall permit the parties to conduct such cross
examination as may be required for a full and true disclosure of the
facts.
    (e) At the discretion of the ALJ, a witness may be cross-examined on
matters relevant to the proceeding without regard to the scope of his or
her direct examination. To the extent permited

[[Page 197]]

by the ALJ, cross-examination on matters outside the scope of direct
examination shall be conducted in the manner of direct examination and
may proceed by leading questions only if the witness is a hostile
witness, an adverse party, or a witness identified with an adverse
party.
    (f) Upon motion of any party, the ALJ shall order witnesses excluded
so that they cannot hear the testimony of other witnesses. This rule
does not authorize exclusion of--
    (1) A party who is an individual;
    (2) In the case of a party that is not an individual, an officer or
employee of the party designated by the party's representative; or
    (3) An individual whose presence is shown by a party to be essential
to the presentation of its case, including an individual employed by the
Government engaged in assisting the representative for the Government.



Sec. 16.34  Evidence.

    (a) The ALJ shall determine the admissibility of evidence.
    (b) Except as provided herein, the ALJ shall not be bound by the
Federal Rules of Evidence. However, the ALJ may apply the Federal Rules
of Evidence where appropriate, e.g., to exclude unreliable evidence.
    (c) The ALJ shall exclude irrelevant, immaterial, or incompetent
evidence.
    (d) Although relevant, evidence may be excluded if its probative
value is substantially outweighed by the danger of unfair prejudice,
confusion of the issues, or by considerations of undue delay or needless
presentation of cumulative evidence.
    (e) Although relevant, evidence may be excluded if it is privileged
under Federal law.
    (f) Evidence concerning offers of compromise or settlement shall be
inadmissible to the extent provided in Rule 408 of the Federal Rules of
Evidence.
    (g) The ALJ shall permit the parties to introduce rebuttal witnesses
and evidence.
    (h) All documents and other evidence offered or taken for the record
shall be open to examination by all parties, unless otherwise ordered by
the ALJ pursuant to Sec. 16.24.



Sec. 16.35  The record.

    (a) The hearing will be recorded and transcribed. Transcripts may be
obtained following the hearing from the ALJ at a cost not to exceed the
actual cost of duplication.
    (b) The transcript of testimony, exhibits and other evidence
admitted at the hearing, and all papers and requests filed in the
proceeding constitute the record for the decision by the ALJ and the
authority head.
    (c) The record may be inspected and copied (upon payment of a
reasonable fee) by anyone, unless otherwise ordered by the ALJ pursuant
to Sec. 16.24.



Sec. 16.36  Post-hearing briefs.

    The ALJ may require the parties to file post-hearing briefs. The ALJ
shall fix the time for filing such briefs, not to exceed 60 days from
the date the parties receive the transcript of the hearing or, if
applicable, the stipulated record. Such briefs may be accompanied by
proposed findings of fact and conclusions of law. The ALJ may permit the
parties to file reply briefs.



Sec. 16.37  Initial decision.

    (a) The ALJ shall issue an initial decision, based solely on the
record, which shall contain findings of fact, conclusion of law, and the
amount of any penalties and assessments imposed.
    (b) The findings of fact shall include a finding on each of the
following issues:
    (1) Whether the claims or statements identified in the complaint, or
any portions thereof, violate Sec. 16.3;
    (2) If the person is liable for penalties of assessments, the
appropriate amount of any such penalties or assessments considering any
mitigating or aggravating factors that he or she finds in the case, such
as those described in Sec. 16.31.
    (c) The ALJ shall promptly serve the initial decision on all parties
within 90 days after the time for submission of post-hearing briefs and
reply briefs (if permitted) has expired. The ALJ shall at the same time
serve all defendants with a statement describing the right of any
defendant determined to be liable for a civil penalty or assessment to
file a motion for reconsideration with

[[Page 198]]

the ALJ or a notice of appeal with the authority head. If the ALJ fails
to meet the deadline contained in this paragraph, he or she shall notify
the parties of the reason for the delay and shall set a new deadline.
    (d) Unless the initial decision of the ALJ is timely appealed to the
authority head, or a motion for reconsideration of the initial decision
is timely filed, the initial decision shall constitute the final
decision of the authority head and shall be final and binding on the
parties 30 days after it is issued by the ALJ.



Sec. 16.38  Reconsideration of initial decision.

    (a) Except as provided in paragraph (d) of this section, any party
may file a motion for reconsideration of the initial decision within 20
days of receipt of the initial decision. If service was made by mail,
receipt will be presumed to be five days from the date of mailing in the
absence of contrary proof.
    (b) Every such motion must set forth the matters claimed to have
been erroneously decided and the nature of the alleged errors. Such
motion shall be accompanied by a supporting brief.
    (c) Responses to such motions shall be allowed only upon request of
the ALJ.
    (d) No party may file a motion for reconsideration of an initial
decision that has been revised in response to a previous motion for
reconsideration.
    (e) The ALJ may dispose of a motion for reconsideration by denying
it or by issuing a revised initial decision.
    (f) When a motion for reconsideration is made, the time periods for
appeal to the authority head contained in Sec. 16.38, and for finality
of the initial decision in Sec. 16.36(d), shall begin on the date the
ALJ issues the denial of the motion for reconsideration or a revised
initial decision, as appropriate.



Sec. 16.39  Appeal to authority head.

    (a) Any defendant who has filed a timely answer and who is
determined in an initial decision to be liable for a civil penalty or
assessment may appeal such decision to the authority head by filing a
notice of appeal with the authority head in accordance with this
section.
    (b)(1) No notice of appeal may be filed until the time period for
filing a motion for reconsideration under Sec. 16.38 has expired.
    (2) If a motion for reconsideration is timely filed, a notice of
appeal must be filed within 30 days after the ALJ denies the motion or
issues a revised initial decision, whichever applies.
    (3) If no motion for reconsideration is timely filed, a notice of
appeal must be filed within 30 days after the ALJ issues the initial
decision.
    (4) The authority head may extend the initial 30 days period for an
additional 30 days if the defendant files with the authority head a
request for extension within the initial 30 days period and shows good
cause.
    (c) If the defendant files a timely notice of appeal with the
authority head, the ALJ shall forward the notice of appeal and record of
the proceeding to the authority head.
    (d) A notice of appeal shall be accompanied by a written brief
specifying exceptions to the initial decision and reasons supporting the
exceptions.
    (e) The representative for the agency may file a brief in opposition
to exceptions within 30 days of receiving the notice of appeal and
accompanying brief.
    (f) There is no right to appear personally before the authority
head.
    (g) There is right to appeal any interlocutory ruling by the ALJ.
    (h) In reviewing the initial decision, the authority head shall not
consider any objection that was not raised before the ALJ unless a
demonstration is made of extraordinary circumstances causing the failure
to raise the objection.
    (i) If any party demonstrates to the satisfaction of the authority
head, prior to the issuance of the authority head's decision that
additional evidence not presented at such hearing is material and that
there were reasonable grounds for the failure to present such evidence
at the hearing, the authority head shall remand the matter to the ALJ
for consideration of such additional evidence.
    (j) The authority head may affirm, reduce, reverse, compromise,
remand, or settle any penalty or assessment,

[[Page 199]]

determined by the ALJ in any initial decision.
    (k) The authority head shall promptly serve each party to the appeal
to the ALJ with a copy of the decision of the authority head. At the
same time the authority head shall serve the defendant with a statement
describing the defendant's right to seek judicial review.
    (l) Unless a petition for judicial review is filed as provided in 31
U.S.C. 3805 after a defendant has exhausted all administrative remedies
under this part and within 60 days after the date on which the authority
head serves the defendant with a copy of the authority head's decision,
a determination that a defendant is liable under Sec. 16.3 is final and
is not subject to judicial review.



Sec. 16.40  Stays ordered by the Department of Justice.

    If at any time the Attorney General or an Assistant Attorney General
designated by the Attorney General transmits to the authority head a
written finding that continuation of the administrative process
described in this part with respect to a claim or statement may
adversely affect any pending or potential criminal or civil action
related to such claim or statement, the authority head shall stay the
process immediately. In such a case, the authority head may order the
process resumed only upon receipt of the written authorization of the
Attorney General.



Sec. 16.41  Stay pending appeal.

    (a) An initial decision is stayed automatically pending disposition
of a motion for reconsideration or of an appeal to the authority head.
    (b) No administrative stay is available following a final decision
of the authority head.



Sec. 16.42  Judicial review.

    Section 3805 of title 31, United States Code, authorizes judicial
review by an appropriate United States District Court of a final
decision of the authority head imposing penalties or assessments under
this part and specifies the procedures for such review.



Sec. 16.43  Collection of civil penalties and assessments.

    Sections 3806 and 3808(b) of title 31, United States Code, authorize
actions for collection of civil penalties and assessments imposed under
this part and specify the procedures for such actions.



Sec. 16.44  Right to administrative offset.

    The amount of any penalty or assessment which has become final, or
for which a judgment has been entered under Sec. 16.42 or Sec. 16.43,
or any amount agreed upon in a compromise or settlement under Sec.
16.46, may be collected by administrative offset under 31 U.S.C. 3716,
except that an administrative offset may not be made under this
subsection against a refund of an overpayment of Federal taxes, then or
later owing by the United States to the defendant.



Sec. 16.45  Deposit in Treasury of United States.

    All amounts collected pursuant to this part shall be deposited as
miscellaneous receipts in the Treasury of the United States, except as
provided in 31 U.S.C. 3806(g).



Sec. 16.46  Compromise or settlement.

    (a) Parties may make offers of compromise or settlement at any time.
    (b) The reviewing official has the exclusive authority to compromise
or settle a case under this part at any time after the date on which the
reviewing official is permitted to issue a complaint and before the date
on which the ALJ issues an initial decision.
    (c) The authority head has exclusive authority to compromise or
settle a case under this part at any time after the date on which the
ALJ issues an initial decision, except during the pendency of any review
under Sec. 16.42 or during the pendency of any action to collect
penalties and assessments under Sec. 16.43.
    (d) The Attorney General has exclusive authority to compromise or
settle a case under this part during the pendency of any review under
Sec. 16.42 or of any action to recover penalties and assessments under
31 U.S.C. 3806.
    (e) The investigating official may recommend settlement terms to the
reviewing official, the authority head, or

[[Page 200]]

the Attorney General, as appropriate. The reviewing official may
recommend settlement terms to the authority head, or the Attorney
General, as appropriate.
    (f) Any compromise or settlement must be in writing and signed by
all parties and their representatives.



Sec. 16.47  Limitations.

    (a) The notice of hearing with respect to a claim or statement must
be served in the manner specified in Sec. 16.8 within 6 years after the
date on which such claim or statement is made.
    (b) If the defendant fails to file a timely answer, service of a
notice under Sec. 16.10(b) shall be deemed a notice of hearing for
purposes of this section.
    (c) The time limits of this statute of limitations may be extended
by agreement of the parties.



PART 17_ENFORCEMENT OF NONDISCRIMINATION ON THE BASIS OF HANDICAP IN
PROGRAMS OR ACTIVITIES CONDUCTED BY THE DEPARTMENT OF THE

TREASURY--Table of Contents



Sec.
17.101 Purpose.
17.102 Application.
17.103 Definitions.
17.104-17.109 [Reserved]
17.110 Self-evaluation.
17.111 Notice.
17.112-17.129 [Reserved]
17.130 General prohibitions against discrimination.
17.131-17.139 [Reserved]
17.140 Employment.
17.141-17.148 [Reserved]
17.149 Program accessibility: Discrimination prohibited.
17.150 Program accessibility: Existing facilities.
17.151 Program accessibility: New construction and alterations.
17.152-17.159 [Reserved]
17.160 Communications.
17.161-17.169 [Reserved]
17.170 Compliance procedures.
17.171-17.999 [Reserved]

    Authority: 29 U.S.C. 794.

    Source: 56 FR 40788, Aug. 16, 1991, unless otherwise noted.



Sec. 17.101  Purpose.

    The purpose of this part is to effectuate section 119 of the
Rehabilitation, Comprehensive Services, and Developmental Disabilities
Amendments of 1978, which amended section 504 of the Rehabilitation Act
of 1973 (``section 504'') to prohibit discrimination on the basis of
handicap in programs or activities conducted by Executive agencies or
the United States Postal Service.



Sec. 17.102  Application.

    This part applies to all programs or activities conducted by the
agency, except for programs or activities conducted outside the United
States that do not involve individuals with handicaps in the United
States.



Sec. 17.103  Definitions.

    For purposes of this part, the term--
    (a) Agency means the Department of the Treasury.
    (b) Assistant Attorney General means the Assistant Attorney General,
Civil Rights Division, United States Department of Justice.
    (c) Auxiliary aids means services or devices that enable persons
with impaired sensory, manual, or speaking skills to have an equal
opportunity to participate in, and enjoy the benefits of, programs or
activities conducted by the agency. For example, auxiliary aids useful
for persons with impaired vision include readers, Brailled materials,
audio recordings and other similar services and devices. Auxiliary aids
useful for persons with impaired hearing include telephone handset
amplifiers, telephones compatible with hearing aids, telecommunications
devices for deaf persons (TDD's), interpreters, notetakers, written
materials and other similar services and devices.
    (d) Complete complaint means a written statement that contains the
complainant's name and address, and describes the agency's alleged
discriminatory action in sufficient detail to inform the agency of the
nature and date of the alleged violation of section 504. It shall be
signed by the complainant or by someone authorized to do so on his or
her behalf. Complaints filed on behalf of classes of individuals with
handicaps shall also identify (where

[[Page 201]]

possible) the alleged victims of discrimination.
    (e) Facility means all or any portion of a building, structure,
equipment, road, walk, parking lot, rolling stock, or other conveyance,
or other real or personal property.
    (f) Individual with handicaps means any person who has a physical or
mental impairment that substantially limits one or more of the
individual's major life activities, has a record of such an impairment,
or is regarded as having such an impairment. As used in this definition,
the phrase: (1) Physical or mental impairment includes: (i) Any
physiological disorder or condition, cosmetic disfigurement, or
anatomical loss affecting one or more of the following body systems:
Neurological; musculoskeletal; special sense organs; respiratory,
including speech organs, cardiovascular; reproductive, digestive;
genitourinary; hemic and lymphatic; skin; and endocrine; or (ii) any
mental or psychological disorder such as mental retardation, organic
brain syndrome, emotional or mental illness, and specific learning
disabilities. The term physical or mental impairment includes, but is
not limited to, such diseases and conditions as orthopedic, visual,
speech and hearing impairments, cerebral palsy, epilepsy, muscular
dystrophy, multiple sclerosis, cancer, heart disease, diabetes, mental
retardation, emotional illness, drug addiction and alcoholism.
    (2) Major life activities includes functions such as caring for
one's self, performing manual tasks, walking, seeing, hearing, speaking,
breathing, learning, and working.
    (3) Has a record of such an impairment means has a history of, or
has been misclassified as having, a mental or physical impairment that
substantially limits one or more of the individual's major life
activities.
    (4) Is regarded as having an impairment means--
    (i) Has a physical or mental impairment that does not substantially
limit major life activities but is treated by the agency as constituting
such a limitation;
    (ii) Has a physical or mental impairment that substantially limits
major life activities only as a result of the attitudes of others toward
such impairment; or
    (iii) Has none of the impairments defined in subparagraph (1) of
this definition but is treated by the agency as having such an
impairment.
    (g) Qualified individual with handicaps means--(1) With respect to
an agency program or activity under which a person is required to
perform services or to achieve a level of accomplishment, an individual
with handicaps who meets the essential eligibility requirements and who
can achieve the purpose of the program or activity without modifications
in the program or activity that the agency can demonstrate would result
in a fundamental alteration in the nature of the program; and
    (2) With respect to any other program or activity, an individual
with handicaps who meets the essential eligibility requirements for
participation in, or receipt of benefits from, that program or activity;
and
    (3) For purposes of employment, ``qualified handicapped person'' is
defined in 29 CFR 1613.702(f), which is made applicable to this part by
Sec. 17.140.
    (h) Section 504 means section 504 of the Rehabilitation Act of 1973
(Pub. L. 93-112, 87 Stat. 394 (29 U.S.C. 794)), as amended. As used in
this part, section 504 applies only to programs or activities conducted
by Executive agencies and not to federally assisted programs.



Sec. Sec. 17.104-17.109  [Reserved]



Sec. 17.110  Self-evaluation.

    (a) The agency shall, by two years after the effective date of this
part, evaluate its current policies and practices, and the effects
thereof, to determine if they meet the requirements of this part. To the
extent modification of any such policy and practice is required, the
agency shall proceed to make the necessary modifications.
    (b) The agency shall provide an opportunity to interested persons,
including individuals with handicaps or organizations representing
individuals with handicaps, to participate in the self-evaluation
process.
    (c) The agency shall, until three years following the completion of
the self-evaluation, maintain on file and make available for public
inspection:

[[Page 202]]

    (1) A description of areas examined and any problems identified; and
    (2) A description of any modifications made; and
    (3) A list of participants in the self-evaluation process.



Sec. 17.111  Notice.

    The agency shall make available to all Treasury employees, and to
all interested persons, as appropriate, information regarding the
provisions of this part and its applicability to the programs or
activities conducted by the agency, and make such information available
to them in such a manner as is necessary to apprise them of the
protections against discrimination assured them by section 504 and this
part.



Sec. Sec. 17.112-17.129  [Reserved]



Sec. 17.130  General prohibitions against discrimination.

    (a) No qualified individual with handicaps in the United States,
shall, by reason of his or her handicap, be excluded from the
participation in, be denied the benefits of, or otherwise be subjected
to discrimination under any program or activity conducted by the agency.
    (b)(1) The agency, in providing any aid, benefit, or service, may
not directly or through contractual, licensing, or other arrangements,
on the basis of handicap--
    (i) Deny a qualified individual with handicaps the opportunity to
participate in or benefit from the aid, benefit, or service;
    (ii) Afford a qualified individual with handicaps an opportunity to
participate in or benefit from the aid, benefit, or service that is not
equal to that afforded others;
    (iii) Provide a qualified individual with handicaps with an aid,
benefit, or service that is not as effective in affording equal
opportunity to obtain the same result, to gain the same benefit, or to
reach the same level of achievement as that provided to others;
    (iv) Provide different or separate aid, benefits or services to
individuals with handicaps or to any class of individuals with handicaps
than is provided to others unless such action is necessary to provide
qualified individuals with handicaps with aid, benefits or services that
are as effective as those provided to others;
    (v) Deny a qualified individual with handicaps the opportunity to
participate as a member of planning or advisory boards; or
    (vi) Otherwise limit a qualified individual with handicaps in the
enjoyment of any right, privilege, advantage, or opportunity enjoyed by
others receiving the aid, benefit, or service.
    (2) For purposes of this part, aids, benefits, and services, to be
equally effective, are not required to produce the identical result or
level of achievement for individuals with handicaps and for
nonhandicapped persons, but must afford individuals with handicaps equal
opportunity to obtain the same result, to gain the same benefit, or to
reach the same level of achievement in the most integrated setting
appropriate to the individual's needs.
    (3) Even if the agency is permitted, under paragraph (b)(1)(iv) of
this section, to operate a separate or different program for individuals
with handicaps or for any class of individuals with handicaps, the
agency must permit any qualified individual with handicaps who wishes to
participate in the program that is not separate or different to do so.
    (4) The agency may not, directly or through contractual or other
arrangements, utilize criteria or methods of administration the purpose
or effect of which would--
    (i) Subject qualified individuals with handicaps to discrimination
on the basis of handicap; or
    (ii) Defeat or substantially impair accomplishment of the objectives
of a program or activity with respect to individuals with handicaps.
    (5) The agency may not, in determining the site or location of a
facility, make selections the purpose or effect of which would--
    (i) Exclude individuals with handicaps from, deny them the benefits
of, or otherwise subject them to discrimination under any program or
activity conducted by the agency; or
    (ii) Defeat or substantially impair the accomplishment of the
objectives of a program or activity with respect to individuals with
handicaps.

[[Page 203]]

    (6) The agency, in the selection of procurement contractors, may not
use criteria that subject qualified individuals with handicaps to
discrimination on the basis of handicap.
    (7) The agency may not administer a licensing or certification
program in a manner that subjects qualified individuals with handicaps
to discrimination on the basis of handicap, nor may the agency establish
requirements for the programs or activities of licensees or certified
entities that subject qualified individuals with handicaps to
discrimination on the basis of handicap. However, the programs or
activities of entities that are licensed or certified by the agency are
not, themselves, covered by this part.
    (c) The exclusion of nonhandicapped persons from the benefits of a
program limited by Federal statute or Executive order to individuals
with handicaps or the exclusion of a specific class of individuals with
handicaps from a program limited by Federal statute or Executive order
to a different class of individuals with handicaps is not prohibited by
this part.
    (d) The agency shall administer programs and activities in the most
integrated setting appropriate to the needs of qualified individuals
with handicaps.



Sec. Sec. 17.131-17.139  [Reserved]



Sec. 17.140  Employment.

    No qualified individual with handicaps shall, on the basis of
handicap, be subjected to discrimination in employment under any program
or activity conducted by the Department. The definitions, requirements
and procedures of section 501 of the Rehabilitation Act of 1973 (29
U.S.C. 791), as established by the Equal Employment Opportunity
Commission in 29 CFR part 1613, shall apply to employment of federally
conducted programs or activities.



Sec. Sec. 17.141-17.148  [Reserved]



Sec. 17.149  Program accessibility: Discrimination prohibited.

    Except as otherwise provided in Sec. 17.150, no qualified
individual with handicaps shall, because the agency's facilities are
inaccessible to or unusable by individuals with handicaps, be denied the
benefits of, be excluded from participation in, or otherwise be
subjected to discrimination under any program or activity conducted by
the agency.



Sec. 17.150  Program accessibility; Existing facilities.

    (a) General. The agency shall operate each program or activity so
that the program or activity, when viewed in its entirety, is readily
accessible to and usable by individuals with handicaps. This paragraph
does not require the agency--
    (1) To make structural alterations in each of its existing
facilities in order to make them accessible to and usable by individuals
with handicaps where other methods are effective in achieving compliance
with this section; or
    (2) To take any action that it can demonstrate would result in a
fundamental alteration in the nature of a program or activity or in
undue financial and administrative burdens. In those circumstances where
agency personnel believe that the proposed action would fundamentally
alter the program or activity or would result in undue financial and
administrative burdens, the agency has the burden of proving that
compliance with the Sec. 17.150(a) would result in such alteration or
burdens. The decision that compliance would result in such alteration or
burdens must be made by the agency head or his or her designee after
considering all agency resources available for use in the funding and
operation of the conducted program or activity and must be accompanied
by a written statement of the reasons for reaching that conclusion. If
an action would result in such an alteration or such burdens, the agency
shall take any other action that would not result in such an alteration
or such burdens but would nevertheless ensure that individuals with
handicaps receive the benefits and services of the program or activity.
    (b) Methods. The agency may comply with the requirements of this
section through such means as redesign of equipment, reassignment of
services to accessible buildings, assignment of

[[Page 204]]

aides to beneficiaries, home visits, delivery of services at alternate
accessible sites, alteration of existing facilities and construction of
new facilities, use of accessible rolling stock, or any other methods
that result in making its programs or activities readily accessible to
and usable by individuals with handicaps. The agency, in making
alterations to existing buildings, shall meet accessibility requirements
to the extent compelled by the Architectural Barriers Act of 1968, as
amended (42 U.S.C. 4151-4157), and any regulations implementing it. In
choosing among available methods for meeting the requirements of this
section, the agency shall give priority to those methods that offer
programs and activities to qualified individuals with handicaps in the
most integrated setting appropriate.
    (c) Time period for compliance. The agency shall comply with the
obligations established under this section within sixty (60) days of the
effective date of this part except that where structural changes in
facilities are undertaken, such changes in facilities are undertaken,
such changes shall be made within three years of the effective date of
this part, but in any event as expeditiously as possible.
    (d) Transition plan. In the event that structural changes to
facilities will be undertaken to achieve program accessibility, the
agency shall develop within six months of the effective date of this
part, a transition plan setting forth the steps necessary to complete
such changes. The agency shall provide an opportunity to interested
persons, including individuals with handicaps or organizations
representing individuals with handicaps, to participate in the
development of the transition plan by submitting comments (both
telephonic and written). A copy of the transition plan shall be made
available for public inspection. The plan shall at a minimum--
    (1) Identify physical obstacles in the agency's facilities that
limit the physical accessibility of its programs or activities to
individuals with handicaps;
    (2) Describe in detail the methods that will be used to make the
facilities accessible;
    (3) Specify the schedule for taking the steps necessary to achieve
compliance with this section and, if the time period of the transition
plan is longer than one year, identify steps that will be taken during
each year of the transition period; and
    (4) Indicate the official responsible for implementation of the
plan.



Sec. 17.151  Program accessibility: New construction and alterations.

    Each building or part of a building that is constructed or altered
by, on behalf of, or for the use of the agency shall be designed,
constructed, or altered so as to be readily accessible to and usable by
individuals with handicaps. The definitions, requirements, and standards
of the Architectural Barriers Act (42 U.S.C. 4151-4157), as established
in 41 CFR 101-19.600 through 101-19.607 apply to buildings covered by
this section.



Sec. Sec. 17.152-17.159  [Reserved]



Sec. 17.160  Communications.

    (a) The agency shall take appropriate steps to effectively
communicate with applicants, participants, personnel of other Federal
entities, and members of the public.
    (1) The agency shall furnish appropriate auxiliary aids where
necessary to afford an individual with handicaps an equal opportunity to
participate in, and enjoy the benefits of, a program or activity
conducted by the agency.
    (i) In determining what type of auxiliary aid is necessary, the
agency shall give primary consideration to the requests of the
individual with handicaps.
    (ii) The agency need not provide individually prescribed devices,
readers for personal use or study, or other devices of a personal nature
to applicants or participants in programs.
    (2) Where the agency communicates with applicants and beneficiaries
by telephone, the agency shall use telecommunication devices for deaf
persons (TDD's) or equally effective telecommunication systems to
communicate with persons with impaired hearing.

[[Page 205]]

    (b) The agency shall make available to interested persons, including
persons with impaired vision or hearing, information as to the existence
and location of accessible services, activities, and facilities.
    (c) The agency shall post notices at a primary entrance to each of
its inaccessible facilities, directing users to an accessible facility,
or to a location at which they can obtain information about accessible
facilities. The international symbol for accessibility shall be used at
each primary entrance of an accessible facility.
    (d) This section does not require the agency to take any action that
it can demonstrate would result in a fundamental alteration in the
nature of a program or activity or in undue financial and administrative
burdens.
    In those circumstances where agency personnel believe that the
proposed action would fundamentally alter the program or activity or
would result in undue financial and administrative burdens, the agency
has the burden of proving that compliance with Sec. 17.160 would result
in such alteration or burdens. The decision that compliance would result
in such alteration or burdens must be made by the agency head or his or
her designee after considering all resources available for use in the
funding and operation of the conducted program or activity and must be
accompanied by a written statement of the reasons for reaching that
conclusion. If an action required to comply with this section would
result in such an alteration or such burdens, the agency shall take any
other action that would not result in such an alteration or such burdens
but would nevertheless ensure that, to the maxium extent possible,
individuals with handicaps receive the benefits and services of the
program or activity.



Sec. Sec. 17.161-17.169  [Reserved]



Sec. 17.170  Compliance procedures.

    (a) Except as provided in paragraph (b) of this section, this
section applies to all allegations of discrimination on the basis of
handicap in programs and activities conducted by the agency.
    (b) The agency shall process complaints alleging violations of
section 504 with respect to employment according to the procedures
established by the Equal Employment Opportunity Commission in 29 CFR
part 1613 pursuant to section 501 of the Rehabilitation Act of 1973 (29
U.S.C. 791).
    (c) All other complaints alleging violations of section 504 may be
sent to the Director, Office of Equal Opportunity Program, Department of
the Treasury, 1500 Pennsylvania Avenue, NW., Washington, DC 20220. The
Deputy Assistant Secretary for Departmental Finance and Management shall
be responsible for coordinating implementation of this section.
    (d)(1) Any person who believes that he or she has been subjected to
discrimination prohibited by this part may by him or herself or by his
or her authorized representative file a complaint. Any person who
believes that any specific class of persons has been subjected to
discrimination prohibited by this part and who is a member of that class
or the authorized representative of a member of that class may file a
complaint.
    (2) The agency shall accept and investigate all complete complaints
over which it has jurisdiction.
    (3) All complete complaints must be filed within 180 days of the
alleged act of discrimination. The agency may extend this time period
for good cause.
    (e) If the agency receive a complaint over which it does not have
jurisdiction, it shall promptly notify the complainant and shall make
reasonable efforts to refer the complaint to the appropriate government
entity.
    (f) The agency shall notify the Architectural and Transportation
Barriers Compliance Board upon receipt of any complaint alleging that a
building or facility that is subject to the Architectural Barriers Act
of 1968, as amended (42 U.S.C. 4151-4157), is not readily accessible to
and usable by individuals with handicaps.
    (g)(1) Within 180 days of the receipt of a complete complaint over
which it has jurisdiction, the agency shall notify the complainant of
the results of the investigation in a letter containing--
    (i) Findings of fact and conclusions of law;
    (ii) A description of a remedy for each violation found; and

[[Page 206]]

    (iii) A notice of the right to appeal.
    (2) Agency employees are required to cooperate in the investigation
and attempted resolution of complaints. Employees who are required to
participate in any investigation under this section shall do so as part
of their official duties and during the course of regular duty hours.
    (3) If a complaint is resolved informally, the terms of the
agreement shall be reduced to writing and made part of the complaint
file, with a copy of the agreement provided to the complainant. The
written agreement shall describe the subject matter of the complaint and
any corrective action to which the parties have agreed.
    (h) Appeals of the findings of fact and conclusions of law or
remedies must be filed by the complainant within 60 days of receipt from
the agency of the letter required by Sec. 17.170(g). The agency may
extend this time for good cause.
    (i) Timely appeals shall be accepted and processed by the Director,
Human Resources Directorate, or his or her designee, who will issue the
final agency decision which may include appropriate corrective action to
be taken by the agency.
    (j) The agency shall notify the complainant of the results of the
appeal within 30 days of the receipt of the appeal. If the agency
determines that it needs additional information from the complainant, it
shall have 30 days from the date it received the additional information
to make its determination on the appeal.
    (k) The time limits cited in paragraphs (g) and (j) of this section
may be extended for an individual case when the Assistant Secretary for
Departmental Finance and Management determines that there is good cause,
based on the particular circumstances of that case, for the extension.
    (l) The agency may delegate its authority for conducting complaint
investigations to other Federal agencies or may contract with a
nongovernment investigator to perform the investigation, but the
authority for making the final determination may not be delegated to
another agency.



Sec. Sec. 17.171-17.999  [Reserved]



PART 18_OFFICIALS DESIGNATED TO PERFORM THE FUNCTIONS AND DUTIES OF
CERTAIN OFFICES IN CASE OF ABSENCE, DISABILITY, OR VACANCY--Table of

Contents



Sec.
18.1 Designation of First Assistants.
18.2 Exceptions.

    Authority: 5 U.S.C. 301; 31 U.S.C. 321.

    Source: 64 FR 62112, Nov. 16, 1999, unless otherwise noted.



Sec. 18.1  Designation of First Assistants.

    Except as provided in Sec. 18.2, every office within the Department
of the Treasury (including its bureaus) to which appointment is required
to be made by the President with the advice and consent of the Senate
(``PAS Office'') may have a First Assistant within the meaning of 5
U.S.C. 3345-3349d.
    (a) Where there is a position of principal deputy to the PAS Office,
the principal deputy shall be the First Assistant.
    (b) Where there is only one deputy position to the PAS Office, the
official in that position shall be the First Assistant.
    (c) Where neither paragraph (a) nor (b) of this section is
applicable to the PAS Office, the Secretary of the Treasury may
designate in writing the First Assistant.



Sec. 18.2  Exceptions.

    (a) Section 18.1 shall not apply:
    (1) When a statute which meets the requirements of 5 U.S.C. 3347(a)
prescribes another means for authorizing an officer or employee to
perform the functions and duties of a PAS Office in the Department
temporarily in an acting capacity; and
    (2) To the office of a member of the Internal Revenue Service
Oversight Board.
    (b) The Inspector General of the Department of the Treasury shall
determine any arrangements for the temporary performance of the
functions and duties of the Inspector General of the Department of the
Treasury when that office is vacant.

[[Page 207]]

    (c) The Treasury Inspector General for Tax Administration shall
determine any arrangements for the temporary performance of the
functions and duties of the Treasury Inspector General for Tax
Administration when that office is vacant.



PART 19_GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)--Table
of Contents



Sec.
19.25 How is this part organized?
19.50 How is this part written?
19.75 Do terms in this part have special meanings?

                            Subpart A_General

19.100 What does this part do?
19.105 Does this part apply to me?
19.110 What is the purpose of the nonprocurement debarment and
          suspension system?
19.115 How does an exclusion restrict a person's involvement in covered
          transactions?
19.120 May we grant an exception to let an excluded person participate
          in a covered transaction?
19.125 Does an exclusion under the nonprocurement system affect a
          person's eligibility for Federal procurement contracts?
19.130 Does exclusion under the Federal procurement system affect a
          person's eligibility to participate in nonprocurement
          transactions?
19.135 May the Department of the Treasury exclude a person who is not
          currently participating in a nonprocurement transaction?
19.140 How do I know if a person is excluded?
19.145 Does this part address persons who are disqualified, as well as
          those who are excluded from nonprocurement transactions?

                     Subpart B_Covered Transactions

19.200 What is a covered transaction?
19.205 Why is it important to know if a particular transaction is a
          covered transaction?
19.210 Which nonprocurement transactions are covered transactions?
19.215 Which nonprocurement transactions are not covered transactions?
19.220 Are any procurement contracts included as covered transactions?
19.225 How do I know if a transaction in which I may participate is a
          covered transaction?

    Subpart C_Responsibilities of Participants Regarding Transactions

                    Doing Business With Other Persons

19.300 What must I do before I enter into a covered transaction with
          another person at the next lower tier?
19.305 May I enter into a covered transaction with an excluded or
          disqualified person?
19.310 What must I do if a Federal agency excludes a person with whom I
          am already doing business in a covered transaction?
19.315 May I use the services of an excluded person as a principal under
          a covered transaction?
19.320 Must I verify that principals of my covered transactions are
          eligible to participate?
19.325 What happens if I do business with an excluded person in a
          covered transaction?
19.330 What requirements must I pass down to persons at lower tiers with
          whom I intend to do business?

            Disclosing Information--Primary Tier Participants

19.335 What information must I provide before entering into a covered
          transaction with the Department of the Treasury?
19.340 If I disclose unfavorable information required under Sec.
          19.335, will I be prevented from participating in the
          transaction?
19.345 What happens if I fail to disclose the information required under
          Sec. 19.335?
19.350 What must I do if I learn of the information required under Sec.
          19.335 after entering into a covered transaction with the
          Department of the Treasury?

             Disclosing Information--Lower Tier Participants

19.355 What Information must I provide to a higher tier participant
          before entering into a covered transaction with that
          participant?
19.360 What happens if I fail to disclose the information required under
          Sec. 19.355?
19.365 What must I do if I learn of information required under Sec.
          19.355 after entering into a covered transaction with a higher
          tier participant?

   Subpart D_Responsibilities of Department of the Treasury Officials
                         Regarding Transactions

19.400 May I enter into a transaction with an excluded or disqualified
          person?
19.405 May I enter into a covered transaction with a participant if a
          principal of the transaction is excluded?

[[Page 208]]

19.410 May I approve a participant's use of the services of an excluded
          person?
19.415 What must I do if a Federal agency excludes the participant or a
          principal after I enter into a covered transaction?
19.420 May I approve a transaction with an excluded or disqualified
          person at a lower tier?
19.425 When do I check to see if a person is excluded or disqualified?
19.430 How do I check to see if a person is excluded or disqualified?
19.435 What must I require of a primary tier participant?
19.440 What method do I use to communicate those requirements to
          participants?
19.445 What action may I take if a primary tier participant knowingly
          does business with an excluded or disqualified person?
19.450 What action may I take if a primary tier participant fails to
          disclose the information required under Sec. 19.335?
19.455 What may I do if a lower tier participant fails to disclose the
          information required under Sec. 19.355 to the next higher
          tier?

                 Subpart E_Excluded Parties List System

19.500 What is the purpose of the Excluded Parties List System (EPLS)?
19.505 Who uses the EPLS?
19.510 Who maintains the EPLS?
19.515 What specific information is in the EPLS?
19.520 Who places the information into the EPLS?
19.525 Whom do I ask if I have questions about a person in the EPLS?
19.530 Where can I find the EPLS?

   Subpart F_General Principles Relating to Suspension and Debarment
                                 Actions

19.600 How do suspension and debarment actions start?
19.605 How does suspension differ from debarment?
19.610 What procedures does the Department of the Treasury use in
          suspension and debarment actions?
19.615 How does the Department of the Treasury notify a person of a
          suspension and debarment action?
19.620 Do Federal agencies coordinate suspension and debarment actions?
19.625 What is the scope of a suspension or debarment action?
19.630 May the Department of the Treasury impute the conduct of one
          person to another?
19.635 May the Department of the Treasury settle a debarment or
          suspension action?
19.640 May a settlement include a voluntary exclusion?
19.645 Do other Federal agencies know if the Department of the Treasury
          agrees to a voluntary exclusion?

                          Subpart G_Suspension

19.700 When may the suspending official issue a suspension?
19.705 What does the suspending official consider in issuing a
          suspension?
19.710 When does a suspension take effect?
19.715 What notice does the suspending official give me if I am
          suspended?
19.720 How may I contest a suspension?
19.725 How much time do I have to contest a suspension?
19.730 What information must I provide to the suspending official if I
          contest a suspension?
19.735 Under what conditions do I get an additional opportunity to
          challenge the facts on which the suspension is based?
19.740 Are suspension proceedings formal?
19.745 How is fact-finding conducted?
19.750 What does the suspending official consider in deciding whether to
          continue or terminate my suspension?
19.755 When will I know whether the suspension is continued or
          terminated?
19.760 How long may my suspension last?

                           Subpart H_Debarment

19.800 What are the causes for debarment?
19.805 What notice does the debarring official give me if I am proposed
          for debarment?
19.810 When does a debarment take effect?
19.815 How may I contest a proposed debarment?
19.820 How much time do I have to contest a proposed debarment?
19.825 What information must I provide to the debarring official if I
          contest a proposed debarment?
19.830 Under what conditions do I get an additional opportunity to
          challenge the facts on which the proposed debarment is based?
19.835 Are debarment proceedings formal?
19.840 How is fact-finding conducted?
19.845 What does the debarring official consider in deciding whether to
          debar me?
19.850 What is the standard of proof in a debarment action?
19.855 Who has the burden of proof in a debarment action?
19.860 What factors may influence the debarring official's decision?
19.865 How long may my debarment last?
19.870 When do I know if the debarring official debars me?
19.875 May I ask the debarring official to reconsider a decision to
          debar me?
19.880 What factors may influence the debarring official during
          reconsideration?
19.885 May the debarring official extend a debarment?

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                          Subpart I_Definitions

19.900 Adequate evidence.
19.905 Affiliate.
19.910 Agency.
19.915 Agent or representative.
19.920 Civil judgment.
19.925 Conviction.
19.930 Debarment.
19.935 Debarring official.
19.940 Disqualified.
19.945 Excluded or exclusion.
19.950 Excluded Parties List System.
19.955 Indictment.
19.960 Ineligible or ineligibility.
19.965 Legal proceedings.
19.970 Nonprocurement transaction.
19.975 Notice.
19.980 Participant.
19.985 Person.
19.990 Preponderance of the evidence.
19.995 Principal.
19.1000 Respondent.
19.1005 State.
19.1010 Suspending official.
19.1015 Suspension.
19.1020 Voluntary exclusion or voluntarily excluded.

Subpart J [Reserved]

Appendix to Part 19--Covered Transactions

    Authority: Sec. 2455, Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C.
6101 note); E.O. 11738 (3 CFR, 1973 Comp., p. 799); E.O. 12549 (3 CFR,
1986 Comp., p. 189); E.O. 12689 (3 CFR, 1989 Comp., p. 235).

    Source: 68 FR 66544, 66605, 66607, Nov. 26, 2003, unless otherwise
noted.



Sec. 19.25  How is this part organized?

    (a) This part is subdivided into ten subparts. Each subpart contains
information related to a broad topic or specific audience with special
responsibilities, as shown in the following table:

------------------------------------------------------------------------
       In subpart . . .        You will find provisions related to . . .
------------------------------------------------------------------------
A............................  general information about this rule.
B............................  the types of Department of the Treasury
                                transactions that are covered by the
                                Governmentwide nonprocurement suspension
                                and debarment system.
C............................  the responsibilities of persons who
                                participate in covered transactions.
D............................  the responsibilities of Department of the
                                Treasury officials who are authorized to
                                enter into covered transactions.
E............................  the responsibilities of Federal agencies
                                for the Excluded Parties List System
                                (Disseminated by the General Services
                                Administration).
F............................  the general principles governing
                                suspension, debarment, voluntary
                                exclusion and settlement.
G............................  suspension actions.
H............................  debarment actions.
I............................  definitions of terms used in this part.
J............................  [Reserved]
------------------------------------------------------------------------

    (b) The following table shows which subparts may be of special
interest to you, depending on who you are:

------------------------------------------------------------------------
             If you are . . .                   See subpart(s) . . .
------------------------------------------------------------------------
(1) a participant or principal in a         A, B, C, and I.
 nonprocurement transaction.
(2) a respondent in a suspension action...  A, B, F, G and I.
(3) a respondent in a debarment action....  A, B, F, H and I.
(4) a suspending official.................  A, B, D, E, F, G and I.
(5) a debarring official..................  A, B, D, E, F, H and I.
(6) a (n) Department of the Treasury        A, B, D, E and I.
 official authorized to enter into a
 covered transaction.
(7) Reserved..............................  J.
------------------------------------------------------------------------



Sec. 19.50  How is this part written?

    (a) This part uses a ``plain language'' format to make it easier for
the general public and business community to use. The section headings
and text, often in the form of questions and answers, must be read
together.
    (b) Pronouns used within this part, such as ``I'' and ``you,''
change from subpart to subpart depending on the audience being
addressed. The pronoun ``we'' always is the Department of the Treasury.
    (c) The ``Covered Transactions'' diagram in the appendix to this
part shows the levels or ``tiers'' at which the Department of the
Treasury enforces an exclusion under this part.



Sec. 19.75  Do terms in this part have special meanings?

    This part uses terms throughout the text that have special meaning.
Those terms are defined in Subpart I of this part. For example, three
important terms are--

[[Page 210]]

    (a) Exclusion or excluded, which refers only to discretionary
actions taken by a suspending or debarring official under this part or
the Federal Acquisition Regulation (48 CFR part 9, subpart 9.4);
    (b) Disqualification or disqualified, which refers to prohibitions
under specific statutes, executive orders (other than Executive Order
12549 and Executive Order 12689), or other authorities.
Disqualifications frequently are not subject to the discretion of an
agency official, may have a different scope than exclusions, or have
special conditions that apply to the disqualification; and
    (c) Ineligibility or ineligible, which generally refers to a person
who is either excluded or disqualified.



                            Subpart A_General



Sec. 19.100  What does this part do?

    This part adopts a governmentwide system of debarment and suspension
for Department of the Treasury nonprocurement activities. It also
provides for reciprocal exclusion of persons who have been excluded
under the Federal Acquisition Regulation, and provides for the
consolidated listing of all persons who are excluded, or disqualified by
statute, executive order, or other legal authority. This part satisfies
the requirements in section 3 of Executive Order 12549, ``Debarment and
Suspension'' (3 CFR 1986 Comp., p. 189), Executive Order 12689,
``Debarment and Suspension'' (3 CFR 1989 Comp., p. 235) and 31 U.S.C.
6101 note (Section 2455, Public Law 103-355, 108 Stat. 3327).



Sec. 19.105  Does this part apply to me?

    Portions of this part (see table at Sec. 19.25(b)) apply to you if
you are a(n)--
    (a) Person who has been, is, or may reasonably be expected to be, a
participant or principal in a covered transaction;
    (b) Respondent (a person against whom the Department of the Treasury
has initiated a debarment or suspension action);
    (c) Department of the Treasury debarring or suspending official; or
    (d) Department of the Treasury official who is authorized to enter
into covered transactions with non-Federal parties.



Sec. 19.110  What is the purpose of the nonprocurement debarment and
suspension system?

    (a) To protect the public interest, the Federal Government ensures
the integrity of Federal programs by conducting business only with
responsible persons.
    (b) A Federal agency uses the nonprocurement debarment and
suspension system to exclude from Federal programs persons who are not
presently responsible.
    (c) An exclusion is a serious action that a Federal agency may take
only to protect the public interest. A Federal agency may not exclude a
person or commodity for the purposes of punishment.



Sec. 19.115  How does an exclusion restrict a person's involvement in
covered transactions?

    With the exceptions stated in Sec. Sec. 19.120, 19.315, and 19.420,
a person who is excluded by the Department of the Treasury or any other
Federal agency may not:
    (a) Be a participant in a(n) Department of the Treasury transaction
that is a covered transaction under subpart B of this part;
    (b) Be a participant in a transaction of any other Federal agency
that is a covered transaction under that agency's regulation for
debarment and suspension; or
    (c) Act as a principal of a person participating in one of those
covered transactions.



Sec. 19.120  May we grant an exception to let an excluded person
participate in a covered transaction?

    (a) The Secretary of the Treasury may grant an exception permitting
an excluded person to participate in a particular covered transaction.
If the Secretary of the Treasury grants an exception, the exception must
be in writing and state the reason(s) for deviating from the
governmentwide policy in Executive Order 12549.
    (b) An exception granted by one agency for an excluded person does
not extend to the covered transactions of another agency.

[[Page 211]]



Sec. 19.125  Does an exclusion under the nonprocurement system affect
a person's eligibility for Federal procurement contracts?

    If any Federal agency excludes a person under its nonprocurement
common rule on or after August 25, 1995, the excluded person is also
ineligible to participate in Federal procurement transactions under the
FAR. Therefore, an exclusion under this part has reciprocal effect in
Federal procurement transactions.



Sec. 19.130  Does exclusion under the Federal procurement system affect
a person's eligibility to participate in nonprocurement transactions?

    If any Federal agency excludes a person under the FAR on or after
August 25, 1995, the excluded person is also ineligible to participate
in nonprocurement covered transactions under this part. Therefore, an
exclusion under the FAR has reciprocal effect in Federal nonprocurement
transactions.



Sec. 19.135  May the Department of the Treasury exclude a person who is
not currently participating in a nonprocurement transaction?

    Given a cause that justifies an exclusion under this part, we may
exclude any person who has been involved, is currently involved, or may
reasonably be expected to be involved in a covered transaction.



Sec. 19.140  How do I know if a person is excluded?

    Check the Excluded Parties List System (EPLS) to determine whether a
person is excluded. The General Services Administration (GSA) maintains
the EPLS and makes it available, as detailed in subpart E of this part.
When a Federal agency takes an action to exclude a person under the
nonprocurement or procurement debarment and suspension system, the
agency enters the information about the excluded person into the EPLS.



Sec. 19.145  Does this part address persons who are disqualified, as
well as those who are excluded from nonprocurement transactions?

    Except if provided for in Subpart J of this part, this part--
    (a) Addresses disqualified persons only to--
    (1) Provide for their inclusion in the EPLS; and
    (2) State responsibilities of Federal agencies and participants to
check for disqualified persons before entering into covered
transactions.
    (b) Does not specify the--
    (1) Department of the Treasury transactions for which a disqualified
person is ineligible. Those transactions vary on a case-by-case basis,
because they depend on the language of the specific statute, Executive
order, or regulation that caused the disqualification;
    (2) Entities to which the disqualification applies; or
    (3) Process that the agency uses to disqualify a person. Unlike
exclusion, disqualification is frequently not a discretionary action
that a Federal agency takes.



                     Subpart B_Covered Transactions



Sec. 19.200  What is a covered transaction?

    A covered transaction is a nonprocurement or procurement transaction
that is subject to the prohibitions of this part. It may be a
transaction at--
    (a) The primary tier, between a Federal agency and a person (see
appendix to this part); or
    (b) A lower tier, between a participant in a covered transaction and
another person.



Sec. 19.205  Why is it important if a particular transaction is a
covered transaction?

    The importance of a covered transaction depends upon who you are.
    (a) As a participant in the transaction, you have the
responsibilities laid out in Subpart C of this part. Those include
responsibilities to the person or Federal agency at the next higher tier
from whom you received the transaction, if any. They also include
responsibilities if you subsequently enter into other covered
transactions with persons at the next lower tier.
    (b) As a Federal official who enters into a primary tier
transaction, you have the responsibilities laid out in subpart D of this
part.

[[Page 212]]

    (c) As an excluded person, you may not be a participant or principal
in the transaction unless--
    (1) The person who entered into the transaction with you allows you
to continue your involvement in a transaction that predates your
exclusion, as permitted under Sec. 19.310 or Sec. 19.415; or
    (2) A(n) Department of the Treasury official obtains an exception
from the Secretary of the Treasury to allow you to be involved in the
transaction, as permitted under Sec. 19.120.



Sec. 19.210  Which nonprocurement transactions are covered transactions?

    All nonprocurement transactions, as defined in Sec. 19.970, are
covered transactions unless listed in Sec. 19.215. (See appendix to
this part.)



Sec. 19.215  Which nonprocurement transactions are not covered
transactions?

    The following types of nonprocurement transactions are not covered
transactions:
    (a) A direct award to--
    (1) A foreign government or foreign governmental entity;
    (2) A public international organization;
    (3) An entity owned (in whole or in part) or controlled by a foreign
government; or
    (4) Any other entity consisting wholly or partially of one or more
foreign governments or foreign governmental entities.
    (b) A benefit to an individual as a personal entitlement without
regard to the individual's present responsibility (but benefits received
in an individual's business capacity are not excepted). For example, if
a person receives social security benefits under the Supplemental
Security Income provisions of the Social Security Act, 42 U.S.C. 1301 et
seq., those benefits are not covered transactions and, therefore, are
not affected if the person is excluded.
    (c) Federal employment.
    (d) A transaction that the Department of the Treasury needs to
respond to a national or agency-recognized emergency or disaster.
    (e) A permit, license, certificate, or similar instrument issued as
a means to regulate public health, safety, or the environment, unless
the Department of the Treasury specifically designates it to be a
covered transaction.
    (f) An incidental benefit that results from ordinary governmental
operations.
    (g) Any other transaction if the application of an exclusion to the
transaction is prohibited by law.



Sec. 19.220  Are any procurement contracts included as covered
transactions?

    (a) Covered transactions under this part--
    (1) Do not include any procurement contracts awarded directly by a
Federal agency; but
    (2) Do include some procurement contracts awarded by non-Federal
participants in nonprocurement covered transactions (see appendix to
this part).
    (b) Specifically, a contract for goods or services is a covered
transaction if any of the following applies:
    (1) The contract is awarded by a participant in a nonprocurement
transaction that is covered under Sec. 19.210, and the amount of the
contract is expected to equal or exceed $25,000.
    (2) The contract requires the consent of a(n) Department of the
Treasury official. In that case, the contract, regardless of the amount,
always is a covered transaction, and it does not matter who awarded it.
For example, it could be a subcontract awarded by a contractor at a tier
below a nonprocurement transaction, as shown in the appendix to this
part.
    (3) The contract is for federally-required audit services.



Sec. 19.225  How do I know if a transaction in which I may participate
is a covered transaction?

    As a participant in a transaction, you will know that it is a
covered transaction because the agency regulations governing the
transaction, the appropriate agency official, or participant at the next
higher tier who enters into the transaction with you, will tell you that
you must comply with applicable portions of this part.

[[Page 213]]



    Subpart C_Responsibilities of Participants Regarding Transactions

                    Doing Business With Other Persons



Sec. 19.300  What must I do before I enter into a covered transaction
with another person at the next lower tier?

    When you enter into a covered transaction with another person at the
next lower tier, you must verify that the person with whom you intend to
do business is not excluded or disqualified. You do this by:
    (a) Checking the EPLS; or
    (b) Collecting a certification from that person if allowed by this
rule; or
    (c) Adding a clause or condition to the covered transaction with
that person.



Sec. 19.305  May I enter into a covered transaction with an excluded or
disqualified person?

    (a) You as a participant may not enter into a covered transaction
with an excluded person, unless the Department of the Treasury grants an
exception under Sec. 19.120.
    (b) You may not enter into any transaction with a person who is
disqualified from that transaction, unless you have obtained an
exception under the disqualifying statute, Executive order, or
regulation.



Sec. 19.310  What must I do if a Federal agency excludes a person with
whom I am already doing business in a covered transaction?

    (a) You as a participant may continue covered transactions with an
excluded person if the transactions were in existence when the agency
excluded the person. However, you are not required to continue the
transactions, and you may consider termination. You should make a
decision about whether to terminate and the type of termination action,
if any, only after a thorough review to ensure that the action is proper
and appropriate.
    (b) You may not renew or extend covered transactions (other than no-
cost time extensions) with any excluded person, unless the Department of
the Treasury grants an exception under Sec. 19.120.



Sec. 19.315  May I use the services of an excluded person as a
principal under a covered transaction?

    (a) You as a participant may continue to use the services of an
excluded person as a principal under a covered transaction if you were
using the services of that person in the transaction before the person
was excluded. However, you are not required to continue using that
person's services as a principal. You should make a decision about
whether to discontinue that person's services only after a thorough
review to ensure that the action is proper and appropriate.
    (b) You may not begin to use the services of an excluded person as a
principal under a covered transaction unless the Department of the
Treasury grants an exception under Sec. 19.120.



Sec. 19.320  Must I verify that principals of my covered transactions
are eligible to participate?

    Yes, you as a participant are responsible for determining whether
any of your principals of your covered transactions is excluded or
disqualified from participating in the transaction. You may decide the
method and frequency by which you do so. You may, but you are not
required to, check the EPLS.



Sec. 19.325  What happens if I do business with an excluded person in a
covered transaction?

    If as a participant you knowingly do business with an excluded
person, we may disallow costs, annul or terminate the transaction, issue
a stop work order, debar or suspend you, or take other remedies as
appropriate.



Sec. 19.330  What requirements must I pass down to persons at lower
tiers with whom I intend to do business?

    Before entering into a covered transaction with a participant at the
next lower tier, you must require that participant to--
    (a) Comply with this subpart as a condition of participation in the
transaction. You may do so using any method(s), unless Sec. 19.440
requires you to use specific methods.
    (b) Pass the requirement to comply with this subpart to each person
with whom the participant enters into a

[[Page 214]]

covered transaction at the next lower tier.

            Disclosing Information--Primary Tier Participants



Sec. 19.335  What information must I provide before entering into a
covered transaction with the Department of the Treasury?

    Before you enter into a covered transaction at the primary tier, you
as the participant must notify the Department of the Treasury office
that is entering into the transaction with you, if you know that you or
any of the principals for that covered transaction:
    (a) Are presently excluded or disqualified;
    (b) Have been convicted within the preceding three years of any of
the offenses listed in Sec. 19.800(a) or had a civil judgment rendered
against you for one of those offenses within that time period;
    (c) Are presently indicted for or otherwise criminally or civilly
charged by a governmental entity (Federal, State or local) with
commission of any of the offenses listed in Sec. 19.800(a); or
    (d) Have had one or more public transactions (Federal, State, or
local) terminated within the preceding three years for cause or default.



Sec. 19.340  If I disclose unfavorable information required under
Sec. 19.335, will I be prevented from participating in the transaction?

    As a primary tier participant, your disclosure of unfavorable
information about yourself or a principal under Sec. 19.335 will not
necessarily cause us to deny your participation in the covered
transaction. We will consider the information when we determine whether
to enter into the covered transaction. We also will consider any
additional information or explanation that you elect to submit with the
disclosed information.



Sec. 19.345  What happens if I fail to disclose information required
under Sec. 19.335?

    If we later determine that you failed to disclose information under
Sec. 19.335 that you knew at the time you entered into the covered
transaction, we may--
    (a) Terminate the transaction for material failure to comply with
the terms and conditions of the transaction; or
    (b) Pursue any other available remedies, including suspension and
debarment.



Sec. 19.350  What must I do if I learn of information required under
Sec. 19.335 after entering into a covered transaction with the

Department of the Treasury?

    At any time after you enter into a covered transaction, you must
give immediate written notice to the Department of the Treasury office
with which you entered into the transaction if you learn either that--
    (a) You failed to disclose information earlier, as required by Sec.
19.335; or
    (b) Due to changed circumstances, you or any of the principals for
the transaction now meet any of the criteria in Sec. 19.335.

             Disclosing Information--Lower Tier Participants



Sec. 19.355  What information must I provide to a higher tier
participant before entering into a covered transaction with that

participant?

    Before you enter into a covered transaction with a person at the
next higher tier, you as a lower tier participant must notify that
person if you know that you or any of the principals are presently
excluded or disqualified.



Sec. 19.360  What happens if I fail to disclose the information required
under Sec. 19.355?

    If we later determine that you failed to tell the person at the
higher tier that you were excluded or disqualified at the time you
entered into the covered transaction with that person, we may pursue any
available remedies, including suspension and debarment.



Sec. 19.365  What must I do if I learn of information required under
Sec. 19.355 after entering into a covered transaction with a higher tier

participant?

    At any time after you enter into a lower tier covered transaction
with a

[[Page 215]]

person at a higher tier, you must provide immediate written notice to
that person if you learn either that--
    (a) You failed to disclose information earlier, as required by Sec.
19.355; or
    (b) Due to changed circumstances, you or any of the principals for
the transaction now meet any of the criteria in Sec. 19.355.



   Subpart D_Responsibilities of Department of the Treasury Officials
                         Regarding Transactions



Sec. 19.400  May I enter into a transaction with an excluded or
disqualified person?

    (a) You as an agency official may not enter into a covered
transaction with an excluded person unless you obtain an exception under
Sec. 19.120.
    (b) You may not enter into any transaction with a person who is
disqualified from that transaction, unless you obtain a waiver or
exception under the statute, Executive order, or regulation that is the
basis for the person's disqualification.



Sec. 19.405  May I enter into a covered transaction with a participant
if a principal of the transaction is excluded?

    As an agency official, you may not enter into a covered transaction
with a participant if you know that a principal of the transaction is
excluded, unless you obtain an exception under Sec. 19.120.



Sec. 19.410  May I approve a participant's use of the services of an
excluded person?

    After entering into a covered transaction with a participant, you as
an agency official may not approve a participant's use of an excluded
person as a principal under that transaction, unless you obtain an
exception under Sec. 19.120.



Sec. 19.415  What must I do if a Federal agency excludes the participant
or a principal after I enter into a covered transaction?

    (a) You as an agency official may continue covered transactions with
an excluded person, or under which an excluded person is a principal, if
the transactions were in existence when the person was excluded. You are
not required to continue the transactions, however, and you may consider
termination. You should make a decision about whether to terminate and
the type of termination action, if any, only after a thorough review to
ensure that the action is proper.
    (b) You may not renew or extend covered transactions (other than no-
cost time extensions) with any excluded person, or under which an
excluded person is a principal, unless you obtain an exception under
Sec. 19.120.



Sec. 19.420  May I approve a transaction with an excluded or
disqualified person at a lower tier?

    If a transaction at a lower tier is subject to your approval, you as
an agency official may not approve--
    (a) A covered transaction with a person who is currently excluded,
unless you obtain an exception under Sec. 19.120; or
    (b) A transaction with a person who is disqualified from that
transaction, unless you obtain a waiver or exception under the statute,
Executive order, or regulation that is the basis for the person's
disqualification.



Sec. 19.425  When do I check to see if a person is excluded or
disqualified?

    As an agency official, you must check to see if a person is excluded
or disqualified before you--
    (a) Enter into a primary tier covered transaction;
    (b) Approve a principal in a primary tier covered transaction;
    (c) Approve a lower tier participant if agency approval of the lower
tier participant is required; or
    (d) Approve a principal in connection with a lower tier transaction
if agency approval of the principal is required.



Sec. 19.430  How do I check to see if a person is excluded or
disqualified?

    You check to see if a person is excluded or disqualified in two
ways:
    (a) You as an agency official must check the EPLS when you take any
action listed in Sec. 19.425.
    (b) You must review information that a participant gives you, as
required by

[[Page 216]]

Sec. 19.335, about its status or the status of the principals of a
transaction.



Sec. 19.435  What must I require of a primary tier participant?

    You as an agency official must require each participant in a primary
tier covered transaction to--
    (a) Comply with subpart C of this part as a condition of
participation in the transaction; and
    (b) Communicate the requirement to comply with Subpart C of this
part to persons at the next lower tier with whom the primary tier
participant enters into covered transactions.



Sec. 19.440  What method do I use to communicate those requirements to
participants?

    To communicate the requirements, you must include a term or
condition in the transaction requiring the participants' compliance with
subpart C of this part and requiring them to include a similar term or
condition in lower-tier covered transactions.

[68 FR 66607, Nov. 26, 2003]



Sec. 19.445  What action may I take if a primary tier participant
knowingly does business with an excluded or disqualified person?

    If a participant knowingly does business with an excluded or
disqualified person, you as an agency official may refer the matter for
suspension and debarment consideration. You may also disallow costs,
annul or terminate the transaction, issue a stop work order, or take any
other appropriate remedy.



Sec. 19.450  What action may I take if a primary tier participant fails
to disclose the information required under Sec. 19.335?

    If you as an agency official determine that a participant failed to
disclose information, as required by Sec. 19.335, at the time it
entered into a covered transaction with you, you may--
    (a) Terminate the transaction for material failure to comply with
the terms and conditions of the transaction; or
    (b) Pursue any other available remedies, including suspension and
debarment.



Sec. 19.455  What may I do if a lower tier participant fails to disclose
the information required under Sec. 19.355 to the next higher tier?

    If you as an agency official determine that a lower tier participant
failed to disclose information, as required by Sec. 19.355, at the time
it entered into a covered transaction with a participant at the next
higher tier, you may pursue any remedies available to you, including the
initiation of a suspension or debarment action.



                 Subpart E_Excluded Parties List System



Sec. 19.500  What is the purpose of the Excluded Parties List System
(EPLS)?

    The EPLS is a widely available source of the most current
information about persons who are excluded or disqualified from covered
transactions.



Sec. 19.505  Who uses the EPLS?

    (a) Federal agency officials use the EPLS to determine whether to
enter into a transaction with a person, as required under Sec. 19.430.
    (b) Participants also may, but are not required to, use the EPLS to
determine if--
    (1) Principals of their transactions are excluded or disqualified,
as required under Sec. 19.320; or
    (2) Persons with whom they are entering into covered transactions at
the next lower tier are excluded or disqualified.
    (c) The EPLS is available to the general public.



Sec. 19.510  Who maintains the EPLS?

    In accordance with the OMB guidelines, the General Services
Administration (GSA) maintains the EPLS. When a Federal agency takes an
action to exclude a person under the nonprocurement or procurement
debarment and suspension system, the agency enters the information about
the excluded person into the EPLS.



Sec. 19.515  What specific information is in the EPLS?

    (a) At a minimum, the EPLS indicates--

[[Page 217]]

    (1) The full name (where available) and address of each excluded or
disqualified person, in alphabetical order, with cross references if
more than one name is involved in a single action;
    (2) The type of action;
    (3) The cause for the action;
    (4) The scope of the action;
    (5) Any termination date for the action;
    (6) The agency and name and telephone number of the agency point of
contact for the action; and
    (7) The Dun and Bradstreet Number (DUNS), or other similar code
approved by the GSA, of the excluded or disqualified person, if
available.
    (b)(1) The database for the EPLS includes a field for the Taxpayer
Identification Number (TIN) (the social security number (SSN) for an
individual) of an excluded or disqualified person.
    (2) Agencies disclose the SSN of an individual to verify the
identity of an individual, only if permitted under the Privacy Act of
1974 and, if appropriate, the Computer Matching and Privacy Protection
Act of 1988, as codified in 5 U.S.C. 552(a).



Sec. 19.520  Who places the information into the EPLS?

    Federal officials who take actions to exclude persons under this
part or officials who are responsible for identifying disqualified
persons must enter the following information about those persons into
the EPLS:
    (a) Information required by Sec. 19.515(a);
    (b) The Taxpayer Identification Number (TIN) of the excluded or
disqualified person, including the social security number (SSN) for an
individual, if the number is available and may be disclosed under law;
    (c) Information about an excluded or disqualified person, generally
within five working days, after--
    (1) Taking an exclusion action;
    (2) Modifying or rescinding an exclusion action;
    (3) Finding that a person is disqualified; or
    (4) Finding that there has been a change in the status of a person
who is listed as disqualified.



Sec. 19.525  Whom do I ask if I have questions about a person in the
EPLS?

    If you have questions about a person in the EPLS, ask the point of
contact for the Federal agency that placed the person's name into the
EPLS. You may find the agency point of contact from the EPLS.



Sec. 19.530  Where can I find the EPLS?

    (a) You may access the EPLS through the Internet, currently at
http://epls.arnet.gov.
    (b) As of November 26, 2003, you may also subscribe to a printed
version. However, we anticipate discontinuing the printed version. Until
it is discontinued, you may obtain the printed version by purchasing a
yearly subscription from the Superintendent of Documents, U.S.
Government Printing Office, Washington, DC 20402, or by calling the
Government Printing Office Inquiry and Order Desk at (202) 783-3238.



   Subpart F_General Principles Relating to Suspension and Debarment
                                 Actions



Sec. 19.600  How do suspension and debarment actions start?

    When we receive information from any source concerning a cause for
suspension or debarment, we will promptly report and investigate it. We
refer the question of whether to suspend or debar you to our suspending
or debarring official for consideration, if appropriate.



Sec. 19.605  How does suspension differ from debarment?

    Suspension differs from debarment in that--

------------------------------------------------------------------------
      A suspending official . . .           A debarring official . . .
------------------------------------------------------------------------
(a) Imposes suspension as a temporary    Imposes debarment for a
 status of ineligibility for              specified period as a final
 procurement and nonprocurement           determination that a person is
 transactions, pending completion of an   not presently responsible.
 investigation or legal proceedings.

[[Page 218]]


(b) Must--.............................  Must conclude, based on a
(1) Have adequate evidence that there     preponderance of the evidence,
 may be a cause for debarment of a        that the person has engaged in
 person; and.                             conduct that warrants
(2) Conclude that immediate action is     debarment.
 necessary to protect the Federal
 interest.
(c) Usually imposes the suspension       Imposes debarment after giving
 first, and then promptly notifies the    the respondent notice of the
 suspended person, giving the person an   action and an opportunity to
 opportunity to contest the suspension    contest the proposed
 and have it lifted.                      debarment.
------------------------------------------------------------------------



Sec. 19.610  What procedures does the Department of the Treasury use in
suspension and debarment actions?

    In deciding whether to suspend or debar you, we handle the actions
as informally as practicable, consistent with principles of fundamental
fairness.
    (a) For suspension actions, we use the procedures in this subpart
and subpart G of this part.
    (b) For debarment actions, we use the procedures in this subpart and
subpart H of this part.



Sec. 19.615  How does the Department of the Treasury notify a person of
a suspension or debarment action?

    (a) The suspending or debarring official sends a written notice to
the last known street address, facsimile number, or e-mail address of--
    (1) You or your identified counsel; or
    (2) Your agent for service of process, or any of your partners,
officers, directors, owners, or joint venturers.
    (b) The notice is effective if sent to any of these persons.



Sec. 19.620  Do Federal agencies coordinate suspension and debarment
actions?

    Yes, when more than one Federal agency has an interest in a
suspension or debarment, the agencies may consider designating one
agency as the lead agency for making the decision. Agencies are
encouraged to establish methods and procedures for coordinating their
suspension and debarment actions.



Sec. 19.625  What is the scope of a suspension or debarment?

    If you are suspended or debarred, the suspension or debarment is
effective as follows:
    (a) Your suspension or debarment constitutes suspension or debarment
of all of your divisions and other organizational elements from all
covered transactions, unless the suspension or debarment decision is
limited--
    (1) By its terms to one or more specifically identified individuals,
divisions, or other organizational elements; or
    (2) To specific types of transactions.
    (b) Any affiliate of a participant may be included in a suspension
or debarment action if the suspending or debarring official--
    (1) Officially names the affiliate in the notice; and
    (2) Gives the affiliate an opportunity to contest the action.



Sec. 19.630  May the Department of the Treasury impute conduct of one
person to another?

    For purposes of actions taken under this rule, we may impute conduct
as follows:
    (a) Conduct imputed from an individual to an organization. We may
impute the fraudulent, criminal, or other improper conduct of any
officer, director, shareholder, partner, employee, or other individual
associated with an organization, to that organization when the improper
conduct occurred in connection with the individual's performance of
duties for or on behalf of that organization, or with the organization's
knowledge, approval or acquiescence. The organization's acceptance of
the benefits derived from the conduct is evidence of knowledge, approval
or acquiescence.
    (b) Conduct imputed from an organization to an individual, or
between individuals. We may impute the fraudulent, criminal, or other
improper conduct of any organization to an individual, or from one
individual to another individual, if the individual to whom the improper
conduct is imputed either participated in, had knowledge of, or

[[Page 219]]

reason to know of the improper conduct.
    (c) Conduct imputed from one organization to another organization.
We may impute the fraudulent, criminal, or other improper conduct of one
organization to another organization when the improper conduct occurred
in connection with a partnership, joint venture, joint application,
association or similar arrangement, or when the organization to whom the
improper conduct is imputed has the power to direct, manage, control or
influence the activities of the organization responsible for the
improper conduct. Acceptance of the benefits derived from the conduct is
evidence of knowledge, approval or acquiescence.



Sec. 19.635  May the Department of the Treasury settle a debarment or
suspension action?

    Yes, we may settle a debarment or suspension action at any time if
it is in the best interest of the Federal Government.



Sec. 19.640  May a settlement include a voluntary exclusion?

    Yes, if we enter into a settlement with you in which you agree to be
excluded, it is called a voluntary exclusion and has governmentwide
effect.



Sec. 19.645  Do other Federal agencies know if the Department of the
Treasury agrees to a voluntary exclusion?

    (a) Yes, we enter information regarding a voluntary exclusion into
the EPLS.
    (b) Also, any agency or person may contact us to find out the
details of a voluntary exclusion.



                          Subpart G_Suspension



Sec. 19.700  When may the suspending official issue a suspension?

    Suspension is a serious action. Using the procedures of this subpart
and subpart F of this part, the suspending official may impose
suspension only when that official determines that--
    (a) There exists an indictment for, or other adequate evidence to
suspect, an offense listed under Sec. 19.800(a), or
    (b) There exists adequate evidence to suspect any other cause for
debarment listed under Sec. 19.800(b) through (d); and
    (c) Immediate action is necessary to protect the public interest.



Sec. 19.705  What does the suspending official consider in issuing a
suspension?

    (a) In determining the adequacy of the evidence to support the
suspension, the suspending official considers how much information is
available, how credible it is given the circumstances, whether or not
important allegations are corroborated, and what inferences can
reasonably be drawn as a result. During this assessment, the suspending
official may examine the basic documents, including grants, cooperative
agreements, loan authorizations, contracts, and other relevant
documents.
    (b) An indictment, conviction, civil judgment, or other official
findings by Federal, State, or local bodies that determine factual and/
or legal matters, constitutes adequate evidence for purposes of
suspension actions.
    (c) In deciding whether immediate action is needed to protect the
public interest, the suspending official has wide discretion. For
example, the suspending official may infer the necessity for immediate
action to protect the public interest either from the nature of the
circumstances giving rise to a cause for suspension or from potential
business relationships or involvement with a program of the Federal
Government.



Sec. 19.710  When does a suspension take effect?

    A suspension is effective when the suspending official signs the
decision to suspend.



Sec. 19.715  What notice does the suspending official give me if I am
suspended?

    After deciding to suspend you, the suspending official promptly
sends you a Notice of Suspension advising you--
    (a) That you have been suspended;
    (b) That your suspension is based on--
    (1) An indictment;
    (2) A conviction;
    (3) Other adequate evidence that you have committed irregularities
which

[[Page 220]]

seriously reflect on the propriety of further Federal Government
dealings with you; or
    (4) Conduct of another person that has been imputed to you, or your
affiliation with a suspended or debarred person;
    (c) Of any other irregularities in terms sufficient to put you on
notice without disclosing the Federal Government's evidence;
    (d) Of the cause(s) upon which we relied under Sec. 19.700 for
imposing suspension;
    (e) That your suspension is for a temporary period pending the
completion of an investigation or resulting legal or debarment
proceedings;
    (f) Of the applicable provisions of this subpart, Subpart F of this
part, and any other Department of the Treasury procedures governing
suspension decision making; and
    (g) Of the governmentwide effect of your suspension from procurement
and nonprocurement programs and activities.



Sec. 19.720  How may I contest a suspension?

    If you as a respondent wish to contest a suspension, you or your
representative must provide the suspending official with information in
opposition to the suspension. You may do this orally or in writing, but
any information provided orally that you consider important must also be
submitted in writing for the official record.



Sec. 19.725  How much time do I have to contest a suspension?

    (a) As a respondent you or your representative must either send, or
make rrangements to appear and present, the information and argument to
the suspending official within 30 days after you receive the Notice of
Suspension.
    (b) We consider the notice to be received by you--
    (1) When delivered, if we mail the notice to the last known street
address, or five days after we send it if the letter is undeliverable;
    (2) When sent, if we send the notice by facsimile or five days after
we send it if the facsimile is undeliverable; or
    (3) When delivered, if we send the notice by e-mail or five days
after we send it if the e-mail is undeliverable.



Sec. 19.730  What information must I provide to the suspending official
if I contest a suspension?

    (a) In addition to any information and argument in opposition, as a
respondent your submission to the suspending official must identify--
    (1) Specific facts that contradict the statements contained in the
Notice of Suspension. A general denial is insufficient to raise a
genuine dispute over facts material to the suspension;
    (2) All existing, proposed, or prior exclusions under regulations
implementing E.O. 12549 and all similar actions taken by Federal, state,
or local agencies, including administrative agreements that affect only
those agencies;
    (3) All criminal and civil proceedings not included in the Notice of
Suspension that grew out of facts relevant to the cause(s) stated in the
notice; and
    (4) All of your affiliates.
    (b) If you fail to disclose this information, or provide false
information, the Department of the Treasury may seek further criminal,
civil or administrative action against you, as appropriate.



Sec. 19.735  Under what conditions do I get an additional opportunity to
challenge the facts on which the suspension is based?

    (a) You as a respondent will not have an additional opportunity to
challenge the facts if the suspending official determines that--
    (1) Your suspension is based upon an indictment, conviction, civil
judgment, or other finding by a Federal, State, or local body for which
an opportunity to contest the facts was provided;
    (2) Your presentation in opposition contains only general denials to
information contained in the Notice of Suspension;
    (3) The issues raised in your presentation in opposition to the
suspension are not factual in nature, or are not material to the
suspending official's initial decision to suspend, or the official's
decision whether to continue the suspension; or

[[Page 221]]

    (4) On the basis of advice from the Department of Justice, an office
of the United States Attorney, a State attorney general's office, or a
State or local prosecutor's office, that substantial interests of the
government in pending or contemplated legal proceedings based on the
same facts as the suspension would be prejudiced by conducting fact-
finding.
    (b) You will have an opportunity to challenge the facts if the
suspending official determines that--
    (1) The conditions in paragraph (a) of this section do not exist;
and
    (2) Your presentation in opposition raises a genuine dispute over
facts material to the suspension.
    (c) If you have an opportunity to challenge disputed material facts
under this section, the suspending official or designee must conduct
additional proceedings to resolve those facts.



Sec. 19.740  Are suspension proceedings formal?

    (a) Suspension proceedings are conducted in a fair and informal
manner. The suspending official may use flexible procedures to allow you
to present matters in opposition. In so doing, the suspending official
is not required to follow formal rules of evidence or procedure in
creating an official record upon which the official will base a final
suspension decision.
    (b) You as a respondent or your representative must submit any
documentary evidence you want the suspending official to consider.



Sec. 19.745  How is fact-finding conducted?

    (a) If fact-finding is conducted--
    (1) You may present witnesses and other evidence, and confront any
witness presented; and
    (2) The fact-finder must prepare written findings of fact for the
record.
    (b) A transcribed record of fact-finding proceedings must be made,
unless you as a respondent and the Department of the Treasury agree to
waive it in advance. If you want a copy of the transcribed record, you
may purchase it.



Sec. 19.750  What does the suspending official consider in deciding
whether to continue or terminate my suspension?

    (a) The suspending official bases the decision on all information
contained in the official record. The record includes--
    (1) All information in support of the suspending official's initial
decision to suspend you;
    (2) Any further information and argument presented in support of, or
opposition to, the suspension; and
    (3) Any transcribed record of fact-finding proceedings.
    (b) The suspending official may refer disputed material facts to
another official for findings of fact. The suspending official may
reject any resulting findings, in whole or in part, only after
specifically determining them to be arbitrary, capricious, or clearly
erroneous.



Sec. 19.755  When will I know whether the suspension is continued or
terminated?

    The suspending official must make a written decision whether to
continue, modify, or terminate your suspension within 45 days of closing
the official record. The official record closes upon the suspending
official's receipt of final submissions, information and findings of
fact, if any. The suspending official may extend that period for good
cause.



Sec. 19.760  How long may my suspension last?

    (a) If legal or debarment proceedings are initiated at the time of,
or during your suspension, the suspension may continue until the
conclusion of those proceedings. However, if proceedings are not
initiated, a suspension may not exceed 12 months.
    (b) The suspending official may extend the 12 month limit under
paragraph (a) of this section for an additional 6 months if an office of
a U.S. Assistant Attorney General, U.S. Attorney, or other responsible
prosecuting official requests an extension in writing. In no event may a
suspension exceed 18 months without initiating proceedings under
paragraph (a) of this section.

[[Page 222]]

    (c) The suspending official must notify the appropriate officials
under paragraph (b) of this section of an impending termination of a
suspension at least 30 days before the 12 month period expires to allow
the officials an opportunity to request an extension.



                           Subpart H_Debarment



Sec. 19.800  What are the causes for debarment?

    We may debar a person for--
    (a) Conviction of or civil judgment for--
    (1) Commission of fraud or a criminal offense in connection with
obtaining, attempting to obtain, or performing a public or private
agreement or transaction;
    (2) Violation of Federal or State antitrust statutes, including
those proscribing price fixing between competitors, allocation of
customers between competitors, and bid rigging;
    (3) Commission of embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements, tax
evasion, receiving stolen property, making false claims, or obstruction
of justice; or
    (4) Commission of any other offense indicating a lack of business
integrity or business honesty that seriously and directly affects your
present responsibility;
    (b) Violation of the terms of a public agreement or transaction so
serious as to affect the integrity of an agency program, such as--
    (1) A willful failure to perform in accordance with the terms of one
or more public agreements or transactions;
    (2) A history of failure to perform or of unsatisfactory performance
of one or more public agreements or transactions; or
    (3) A willful violation of a statutory or regulatory provision or
requirement applicable to a public agreement or transaction;
    (c) Any of the following causes:
    (1) A nonprocurement debarment by any Federal agency taken before
October 1, 1988, or a procurement debarment by any Federal agency taken
pursuant to 48 CFR part 9, subpart 9.4, before August 25, 1995;
    (2) Knowingly doing business with an ineligible person, except as
permitted under Sec. 19.120;
    (3) Failure to pay a single substantial debt, or a number of
outstanding debts (including disallowed costs and overpayments, but not
including sums owed the Federal Government under the Internal Revenue
Code) owed to any Federal agency or instrumentality, provided the debt
is uncontested by the debtor or, if contested, provided that the
debtor's legal and administrative remedies have been exhausted;
    (4) Violation of a material provision of a voluntary exclusion
agreement entered into under Sec. 19.640 or of any settlement of a
debarment or suspension action; or
    (5) Violation of the provisions of the Drug-Free Workplace Act of
1988 (41 U.S.C. 701); or
    (d) Any other cause of so serious or compelling a nature that it
affects your present responsibility.



Sec. 19.805  What notice does the debarring official give me if I am
proposed for debarment?

    After consideration of the causes in Sec. 19.800 of this subpart,
if the debarring official proposes to debar you, the official sends you
a Notice of Proposed Debarment, pursuant to Sec. 19.615, advising you--
    (a) That the debarring official is considering debarring you;
    (b) Of the reasons for proposing to debar you in terms sufficient to
put you on notice of the conduct or transactions upon which the proposed
debarment is based;
    (c) Of the cause(s) under Sec. 19.800 upon which the debarring
official relied for proposing your debarment;
    (d) Of the applicable provisions of this subpart, Subpart F of this
part, and any other Department of the Treasury procedures governing
debarment; and
    (e) Of the governmentwide effect of a debarment from procurement and
nonprocurement programs and activities.



Sec. 19.810  When does a debarment take effect?

    A debarment is not effective until the debarring official issues a
decision. The debarring official does not issue a

[[Page 223]]

decision until the respondent has had an opportunity to contest the
proposed debarment.



Sec. 19.815  How may I contest a proposed debarment?

    If you as a respondent wish to contest a proposed debarment, you or
your representative must provide the debarring official with information
in opposition to the proposed debarment. You may do this orally or in
writing, but any information provided orally that you consider important
must also be submitted in writing for the official record.



Sec. 19.820  How much time do I have to contest a proposed debarment?

    (a) As a respondent you or your representative must either send, or
make arrangements to appear and present, the information and argument to
the debarring official within 30 days after you receive the Notice of
Proposed Debarment.
    (b) We consider the Notice of Proposed Debarment to be received by
you--
    (1) When delivered, if we mail the notice to the last known street
address, or five days after we send it if the letter is undeliverable;
    (2) When sent, if we send the notice by facsimile or five days after
we send it if the facsimile is undeliverable; or
    (3) When delivered, if we send the notice by e-mail or five days
after we send it if the e-mail is undeliverable.



Sec. 19.825  What information must I provide to the debarring official
if I contest a proposed debarment?

    (a) In addition to any information and argument in opposition, as a
respondent your submission to the debarring official must identify--
    (1) Specific facts that contradict the statements contained in the
Notice of Proposed Debarment. Include any information about any of the
factors listed in Sec. 19.860. A general denial is insufficient to
raise a genuine dispute over facts material to the debarment;
    (2) All existing, proposed, or prior exclusions under regulations
implementing E.O. 12549 and all similar actions taken by Federal, State,
or local agencies, including administrative agreements that affect only
those agencies;
    (3) All criminal and civil proceedings not included in the Notice of
Proposed Debarment that grew out of facts relevant to the cause(s)
stated in the notice; and
    (4) All of your affiliates.
    (b) If you fail to disclose this information, or provide false
information, the Department of the Treasury may seek further criminal,
civil or administrative action against you, as appropriate.



Sec. 19.830  Under what conditions do I get an additional opportunity
to challenge the facts on which a proposed debarment is based?

    (a) You as a respondent will not have an additional opportunity to
challenge the facts if the debarring official determines that--
    (1) Your debarment is based upon a conviction or civil judgment;
    (2) Your presentation in opposition contains only general denials to
information contained in the Notice of Proposed Debarment; or
    (3) The issues raised in your presentation in opposition to the
proposed debarment are not factual in nature, or are not material to the
debarring official's decision whether to debar.
    (b) You will have an additional opportunity to challenge the facts
if the debarring official determines that--
    (1) The conditions in paragraph (a) of this section do not exist;
and
    (2) Your presentation in opposition raises a genuine dispute over
facts material to the proposed debarment.
    (c) If you have an opportunity to challenge disputed material facts
under this section, the debarring official or designee must conduct
additional proceedings to resolve those facts.



Sec. 19.835  Are debarment proceedings formal?

    (a) Debarment proceedings are conducted in a fair and informal
manner. The debarring official may use flexible procedures to allow you
as a respondent to present matters in opposition. In so doing, the
debarring official is not

[[Page 224]]

required to follow formal rules of evidence or procedure in creating an
official record upon which the official will base the decision whether
to debar.
    (b) You or your representative must submit any documentary evidence
you want the debarring official to consider.



Sec. 19.840  How is fact-finding conducted?

    (a) If fact-finding is conducted--
    (1) You may present witnesses and other evidence, and confront any
witness presented; and
    (2) The fact-finder must prepare written findings of fact for the
record.
    (b) A transcribed record of fact-finding proceedings must be made,
unless you as a respondent and the Department of the Treasury agree to
waive it in advance. If you want a copy of the transcribed record, you
may purchase it.



Sec. 19.845  What does the debarring official consider in deciding
whether to debar me?

    (a) The debarring official may debar you for any of the causes in
Sec. 19.800. However, the official need not debar you even if a cause
for debarment exists. The official may consider the seriousness of your
acts or omissions and the mitigating or aggravating factors set forth at
Sec. 19.860.
    (b) The debarring official bases the decision on all information
contained in the official record. The record includes--
    (1) All information in support of the debarring official's proposed
debarment;
    (2) Any further information and argument presented in support of, or
in opposition to, the proposed debarment; and
    (3) Any transcribed record of fact-finding proceedings.
    (c) The debarring official may refer disputed material facts to
another official for findings of fact. The debarring official may reject
any resultant findings, in whole or in part, only after specifically
determining them to be arbitrary, capricious, or clearly erroneous.



Sec. 19.850  What is the standard of proof in a debarment action?

    (a) In any debarment action, we must establish the cause for
debarment by a preponderance of the evidence.
    (b) If the proposed debarment is based upon a conviction or civil
judgment, the standard of proof is met.



Sec. 19.855  Who has the burden of proof in a debarment action?

    (a) We have the burden to prove that a cause for debarment exists.
    (b) Once a cause for debarment is established, you as a respondent
have the burden of demonstrating to the satisfaction of the debarring
official that you are presently responsible and that debarment is not
necessary.



Sec. 19.860  What factors may influence the debarring official's
decision?

    This section lists the mitigating and aggravating factors that the
debarring official may consider in determining whether to debar you and
the length of your debarment period. The debarring official may consider
other factors if appropriate in light of the circumstances of a
particular case. The existence or nonexistence of any factor, such as
one of those set forth in this section, is not necessarily determinative
of your present responsibility. In making a debarment decision, the
debarring official may consider the following factors:
    (a) The actual or potential harm or impact that results or may
result from the wrongdoing.
    (b) The frequency of incidents and/or duration of the wrongdoing.
    (c) Whether there is a pattern or prior history of wrongdoing. For
example, if you have been found by another Federal agency or a State
agency to have engaged in wrongdoing similar to that found in the
debarment action, the existence of this fact may be used by the
debarring official in determining that you have a pattern or prior
history of wrongdoing.
    (d) Whether you are or have been excluded or disqualified by an
agency of the Federal Government or have not been allowed to participate
in State or local contracts or assistance agreements on a basis of
conduct similar to

[[Page 225]]

one or more of the causes for debarment specified in this part.
    (e) Whether you have entered into an administrative agreement with a
Federal agency or a State or local government that is not governmentwide
but is based on conduct similar to one or more of the causes for
debarment specified in this part.
    (f) Whether and to what extent you planned, initiated, or carried
out the wrongdoing.
    (g) Whether you have accepted responsibility for the wrongdoing and
recognize the seriousness of the misconduct that led to the cause for
debarment.
    (h) Whether you have paid or agreed to pay all criminal, civil and
administrative liabilities for the improper activity, including any
investigative or administrative costs incurred by the government, and
have made or agreed to make full restitution.
    (i) Whether you have cooperated fully with the government agencies
during the investigation and any court or administrative action. In
determining the extent of cooperation, the debarring official may
consider when the cooperation began and whether you disclosed all
pertinent information known to you.
    (j) Whether the wrongdoing was pervasive within your organization.
    (k) The kind of positions held by the individuals involved in the
wrongdoing.
    (l) Whether your organization took appropriate corrective action or
remedial measures, such as establishing ethics training and implementing
programs to prevent recurrence.
    (m) Whether your principals tolerated the offense.
    (n) Whether you brought the activity cited as a basis for the
debarment to the attention of the appropriate government agency in a
timely manner.
    (o) Whether you have fully investigated the circumstances
surrounding the cause for debarment and, if so, made the result of the
investigation available to the debarring official.
    (p) Whether you had effective standards of conduct and internal
control systems in place at the time the questioned conduct occurred.
    (q) Whether you have taken appropriate disciplinary action against
the individuals responsible for the activity which constitutes the cause
for debarment.
    (r) Whether you have had adequate time to eliminate the
circumstances within your organization that led to the cause for the
debarment.
    (s) Other factors that are appropriate to the circumstances of a
particular case.



Sec. 19.865  How long may my debarment last?

    (a) If the debarring official decides to debar you, your period of
debarment will be based on the seriousness of the cause(s) upon which
your debarment is based. Generally, debarment should not exceed three
years. However, if circumstances warrant, the debarring official may
impose a longer period of debarment.
    (b) In determining the period of debarment, the debarring official
may consider the factors in Sec. 19.860. If a suspension has preceded
your debarment, the debarring official must consider the time you were
suspended.
    (c) If the debarment is for a violation of the provisions of the
Drug-Free Workplace Act of 1988, your period of debarment may not exceed
five years.



Sec. 19.870  When do I know if the debarring official debars me?

    (a) The debarring official must make a written decision whether to
debar within 45 days of closing the official record. The official record
closes upon the debarring official's receipt of final submissions,
information and findings of fact, if any. The debarring official may
extend that period for good cause.
    (b) The debarring official sends you written notice, pursuant to
Sec. 19.615 that the official decided, either--
    (1) Not to debar you; or
    (2) To debar you. In this event, the notice:
    (i) Refers to the Notice of Proposed Debarment;
    (ii) Specifies the reasons for your debarment;
    (iii) States the period of your debarment, including the effective
dates; and
    (iv) Advises you that your debarment is effective for covered
transactions and contracts that are subject to the

[[Page 226]]

Federal Acquisition Regulation (48 CFR chapter 1), throughout the
executive branch of the Federal Government unless an agency head or an
authorized designee grants an exception.



Sec. 19.875  May I ask the debarring official to reconsider a decision
to debar me?

    Yes, as a debarred person you may ask the debarring official to
reconsider the debarment decision or to reduce the time period or scope
of the debarment. However, you must put your request in writing and
support it with documentation.



Sec. 19.880  What factors may influence the debarring official during
reconsideration?

    The debarring official may reduce or terminate your debarment based
on--
    (a) Newly discovered material evidence;
    (b) A reversal of the conviction or civil judgment upon which your
debarment was based;
    (c) A bona fide change in ownership or management;
    (d) Elimination of other causes for which the debarment was imposed;
or
    (e) Other reasons the debarring official finds appropriate.



Sec. 19.885  May the debarring official extend a debarment?

    (a) Yes, the debarring official may extend a debarment for an
additional period, if that official determines that an extension is
necessary to protect the public interest.
    (b) However, the debarring official may not extend a debarment
solely on the basis of the facts and circumstances upon which the
initial debarment action was based.
    (c) If the debarring official decides that a debarment for an
additional period is necessary, the debarring official must follow the
applicable procedures in this subpart, and subpart F of this part, to
extend the debarment.



                          Subpart I_Definitions



Sec. 19.900  Adequate evidence.

    Adequate evidence means information sufficient to support the
reasonable belief that a particular act or omission has occurred.



Sec. 19.905  Affiliate.

    Persons are affiliates of each other if, directly or indirectly,
either one controls or has the power to control the other or a third
person controls or has the power to control both. The ways we use to
determine control include, but are not limited to--
    (a) Interlocking management or ownership;
    (b) Identity of interests among family members;
    (c) Shared facilities and equipment;
    (d) Common use of employees; or
    (e) A business entity which has been organized following the
exclusion of a person which has the same or similar management,
ownership, or principal employees as the excluded person.



Sec. 19.910  Agency.

    Agency means any United States executive department, military
department, defense agency, or any other agency of the executive branch.
Other agencies of the Federal government are not considered ``agencies''
for the purposes of this part unless they issue regulations adopting the
governmentwide Debarment and Suspension system under Executive orders
12549 and 12689.



Sec. 19.915  Agent or representative.

    Agent or representative means any person who acts on behalf of, or
who is authorized to commit, a participant in a covered transaction.



Sec. 19.920  Civil judgment.

    Civil judgment means the disposition of a civil action by any court
of competent jurisdiction, whether by verdict, decision, settlement,
stipulation, other disposition which creates a civil liability for the
complained of wrongful acts, or a final determination of liability under
the Program Fraud Civil Remedies Act of 1988 (31 U.S.C. 3801-3812).



Sec. 19.925  Conviction.

    Conviction means--
    (a) A judgment or any other determination of guilt of a criminal
offense by any court of competent jurisdiction,

[[Page 227]]

whether entered upon a verdict or plea, including a plea of nolo
contendere; or
    (b) Any other resolution that is the functional equivalent of a
judgment, including probation before judgment and deferred prosecution.
A disposition without the participation of the court is the functional
equivalent of a judgment only if it includes an admission of guilt.



Sec. 19.930  Debarment.

    Debarment means an action taken by a debarring official under
subpart H of this part to exclude a person from participating in covered
transactions and transactions covered under the Federal Acquisition
Regulation (48 CFR chapter 1). A person so excluded is debarred.



Sec. 19.935  Debarring official.

    (a) Debarring official means an agency official who is authorized to
impose debarment. A debarring official is either--
    (1) The agency head; or
    (2) An official designated by the agency head.
    (b) [Reserved]



Sec. 19.940  Disqualified.

    Disqualified means that a person is prohibited from participating in
specified Federal procurement or nonprocurement transactions as required
under a statute, Executive order (other than Executive Orders 12549 and
12689) or other authority. Examples of disqualifications include persons
prohibited under--
    (a) The Davis-Bacon Act (40 U.S.C. 276(a));
    (b) The equal employment opportunity acts and Executive orders; or
    (c) The Clean Air Act (42 U.S.C. 7606), Clean Water Act (33 U.S.C.
1368) and Executive Order 11738 (3 CFR, 1973 Comp., p. 799).



Sec. 19.945  Excluded or exclusion.

    Excluded or exclusion means--
    (a) That a person or commodity is prohibited from being a
participant in covered transactions, whether the person has been
suspended; debarred; proposed for debarment under 48 CFR part 9, subpart
9.4; voluntarily excluded; or
    (b) The act of excluding a person.



Sec. 19.950  Excluded Parties List System.

    Excluded Parties List System (EPLS) means the list maintained and
disseminated by the General Services Administration (GSA) containing the
names and other information about persons who are ineligible. The EPLS
system includes the printed version entitled, ``List of Parties Excluded
or Disqualified from Federal Procurement and Nonprocurement Programs,''
so long as published.



Sec. 19.955  Indictment.

    Indictment means an indictment for a criminal offense. A
presentment, information, or other filing by a competent authority
charging a criminal offense shall be given the same effect as an
indictment.



Sec. 19.960  Ineligible or ineligibility.

    Ineligible or ineligibility means that a person or commodity is
prohibited from covered transactions because of an exclusion or
disqualification.



Sec. 19.965  Legal proceedings.

    Legal proceedings means any criminal proceeding or any civil
judicial proceeding, including a proceeding under the Program Fraud
Civil Remedies Act (31 U.S.C. 3801-3812), to which the Federal
Government or a State or local government or quasi-governmental
authority is a party. The term also includes appeals from those
proceedings.



Sec. 19.970  Nonprocurement transaction.

    (a) Nonprocurement transaction means any transaction, regardless of
type (except procurement contracts), including, but not limited to the
following:
    (1) Grants.
    (2) Cooperative agreements.
    (3) Scholarships.
    (4) Fellowships.
    (5) Contracts of assistance.
    (6) Loans.
    (7) Loan guarantees.
    (8) Subsidies.
    (9) Insurances.
    (10) Payments for specified uses.
    (11) Donation agreements.
    (b) A nonprocurement transaction at any tier does not require the
transfer of Federal funds.

[[Page 228]]



Sec. 19.975  Notice.

    Notice means a written communication served in person, sent by
certified mail or its equivalent, or sent electronically by e-mail or
facsimile. (See Sec. 19. 615.)



Sec. 19.980  Participant.

    Participant means any person who submits a proposal for or who
enters into a covered transaction, including an agent or representative
of a participant.



Sec. 19.985  Person.

    Person means any individual, corporation, partnership, association,
unit of government, or legal entity, however organized.



Sec. 19.990  Preponderance of the evidence.

    Preponderance of the evidence means proof by information that,
compared with information opposing it, leads to the conclusion that the
fact at issue is more probably true than not.



Sec. 19.995  Principal.

    Principal means--
    (a) An officer, director, owner, partner, principal investigator, or
other person within a participant with management or supervisory
responsibilities related to a covered transaction; or
    (b) A consultant or other person, whether or not employed by the
participant or paid with Federal funds, who--
    (1) Is in a position to handle Federal funds;
    (2) Is in a position to influence or control the use of those funds;
or,
    (3) Occupies a technical or professional position capable of
substantially influencing the development or outcome of an activity
required to perform the covered transaction.



Sec. 19.1000  Respondent.

    Respondent means a person against whom an agency has initiated a
debarment or suspension action.



Sec. 19.1005  State.

    (a) State means--
    (1) Any of the states of the United States;
    (2) The District of Columbia;
    (3) The Commonwealth of Puerto Rico;
    (4) Any territory or possession of the United States; or
    (5) Any agency or instrumentality of a state.
    (b) For purposes of this part, State does not include institutions
of higher education, hospitals, or units of local government.



Sec. 19.1010  Suspending official.

    (a) Suspending official means an agency official who is authorized
to impose suspension. The suspending official is either:
    (1) The agency head; or
    (2) An official designated by the agency head.
    (b) [Reserved]



Sec. 19.1015  Suspension.

    Suspension is an action taken by a suspending official under subpart
G of this part that immediately prohibits a person from participating in
covered transactions and transactions covered under the Federal
Acquisition Regulation (48 CFR chapter 1) for a temporary period,
pending completion of an agency investigation and any judicial or
administrative proceedings that may ensue. A person so excluded is
suspended.



Sec. 19.1020  Voluntary exclusion or voluntarily excluded.

    (a) Voluntary exclusion means a person's agreement to be excluded
under the terms of a settlement between the person and one or more
agencies. Voluntary exclusion must have governmentwide effect.
    (b) Voluntarily excluded means the status of a person who has agreed
to a voluntary exclusion.

Subpart J [Reserved]

[[Page 229]]

                Appendix to Part 19--Covered Transactions
[GRAPHIC] [TIFF OMITTED] TR26NO03.000



PART 20_GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (FINANCIAL
ASSISTANCE)--Table of Contents



                     Subpart A_Purpose and Coverage

Sec.
20.100 What does this part do?
20.105 Does this part apply to me?
20.110 Are any of my Federal assistance awards exempt from this part?
20.115 Does this part affect the Federal contracts that I receive?

      Subpart B_Requirements for Recipients Other Than Individuals

20.200 What must I do to comply with this part?
20.205 What must I include in my drug-free workplace statement?
20.210 To whom must I distribute my drug-free workplace statement?
20.215 What must I include in my drug-free awareness program?
20.220 By when must I publish my drug-free workplace statement and
          establish my drug-free awareness program?
20.225 What actions must I take concerning employees who are convicted
          of drug violations in the workplace?
20.230 How and when must I identify workplaces?

        Subpart C_Requirements for Recipients Who Are Individuals

20.300 What must I do to comply with this part if I am an individual
          recipient?
20.301 [Reserved]

[[Page 230]]

   Subpart D_Responsibilities of Department of the Treasury Awarding
                                Officials

20.400 What are my responsibilities as an Department of the Treasury
          awarding official?

           Subpart E_Violations of This Part and Consequences

20.500 How are violations of this part determined for recipients other
          than individuals?
20.505 How are violations of this part determined for recipients who are
          individuals?
20.510 What actions will the Federal Government take against a recipient
          determined to have violated this part?
20.515 Are there any exceptions to those actions?

                          Subpart F_Definitions

20.605 Award.
20.610 Controlled substance.
20.615 Conviction.
20.620 Cooperative agreement.
20.625 Criminal drug statute.
20.630 Debarment.
20.635 Drug-free workplace.
20.640 Employee.
20.645 Federal agency or agency.
20.650 Grant.
20.655 Individual.
20.660 Recipient.
20.665 State.
20.670 Suspension.

    Authority: 41 U.S.C. 701, et seq.

    Source: 68 FR 66557, 66607, Nov. 26, 2003, unless otherwise noted.



                     Subpart A_Purpose and Coverage



Sec. 20.100  What does this part do?

    This part carries out the portion of the Drug-Free Workplace Act of
1988 (41 U.S.C. 701 et seq., as amended) that applies to grants. It also
applies the provisions of the Act to cooperative agreements and other
financial assistance awards, as a matter of Federal Government policy.



Sec. 20.105  Does this part apply to me?

    (a) Portions of this part apply to you if you are either--
    (1) A recipient of an assistance award from the Department of the
Treasury; or
    (2) A(n) Department of the Treasury awarding official. (See
definitions of award and recipient in Sec. Sec. 20.605 and 20.660,
respectively.)
    (b) The following table shows the subparts that apply to you:

------------------------------------------------------------------------
            If you are . . .                    see subparts . . .
------------------------------------------------------------------------
(1) A recipient who is not an            A, B and E.
 individual.
(2) A recipient who is an individual...  A, C and E.
(3) A(n) Department of the Treasury      A, D and E.
 awarding official.
------------------------------------------------------------------------



Sec. 20.110  Are any of my Federal assistance awards exempt from this
part?

    This part does not apply to any award that the Secretary of the
Treasury determines that the application of this part would be
inconsistent with the international obligations of the United States or
the laws or regulations of a foreign government.



Sec. 20.115  Does this part affect the Federal contracts that I receive?

    It will affect future contract awards indirectly if you are debarred
or suspended for a violation of the requirements of this part, as
described in Sec. 20. 510(c). However, this part does not apply
directly to procurement contracts. The portion of the Drug-Free
Workplace Act of 1988 that applies to Federal procurement contracts is
carried out through the Federal Acquisition Regulation in chapter 1 of
Title 48 of the Code of Federal Regulations (the drug-free workplace
coverage currently is in 48 CFR part 23, subpart 23.5).



      Subpart B_Requirements for Recipients Other Than Individuals



Sec. 20.200  What must I do to comply with this part?

    There are two general requirements if you are a recipient other than
an individual.
    (a) First, you must make a good faith effort, on a continuing basis,
to maintain a drug-free workplace. You must agree to do so as a
condition for receiving any award covered by this part.

[[Page 231]]

The specific measures that you must take in this regard are described in
more detail in subsequent sections of this subpart. Briefly, those
measures are to--
    (1) Publish a drug-free workplace statement and establish a drug-
free awareness program for your employees (see Sec. Sec. 20.205 through
20.220); and
    (2) Take actions concerning employees who are convicted of violating
drug statutes in the workplace (see Sec. 20.225).
    (b) Second, you must identify all known workplaces under your
Federal awards (see Sec. 20.230).



Sec. 20.205  What must I include in my drug-free workplace statement?

    You must publish a statement that--
    (a) Tells your employees that the unlawful manufacture,
distribution, dispensing, possession, or use of a controlled substance
is prohibited in your workplace;
    (b) Specifies the actions that you will take against employees for
violating that prohibition; and
    (c) Lets each employee know that, as a condition of employment under
any award, he or she:
    (1) Will abide by the terms of the statement; and
    (2) Must notify you in writing if he or she is convicted for a
violation of a criminal drug statute occurring in the workplace and must
do so no more than five calendar days after the conviction.



Sec. 20.210  To whom must I distribute my drug-free workplace statement?

    You must require that a copy of the statement described in Sec.
20.205 be given to each employee who will be engaged in the performance
of any Federal award.



Sec. 20.215  What must I include in my drug-free awareness program?

    You must establish an ongoing drug-free awareness program to inform
employees about--
    (a) The dangers of drug abuse in the workplace;
    (b) Your policy of maintaining a drug-free workplace;
    (c) Any available drug counseling, rehabilitation, and employee
assistance programs; and
    (d) The penalties that you may impose upon them for drug abuse
violations occurring in the workplace.



Sec. 20.220  By when must I publish my drug-free workplace statement and
establish my drug-free awareness program?

    If you are a new recipient that does not already have a policy
statement as described in Sec. 20.205 and an ongoing awareness program
as described in Sec. 20.215, you must publish the statement and
establish the program by the time given in the following table:

------------------------------------------------------------------------
                If . . .                          then you . . .
------------------------------------------------------------------------
(a) The performance period of the award  must have the policy statement
 is less than 30 days.                    and program in place as soon
                                          as possible, but before the
                                          date on which performance is
                                          expected to be completed.
(b) The performance period of the award  must have the policy statement
 is 30 days or more.                      and program in place within 30
                                          days after award.
(c) You believe there are extraordinary  may ask the Department of the
 circumstances that will require more     Treasury awarding official to
 than 30 days for you to publish the      give you more time to do so.
 policy statement and establish the       The amount of additional time,
 awareness program.                       if any, to be given is at the
                                          discretion of the awarding
                                          official.
------------------------------------------------------------------------



Sec. 20.225  What actions must I take concerning employees who are
convicted of drug violations in the workplace?

    There are two actions you must take if an employee is convicted of a
drug violation in the workplace:
    (a) First, you must notify Federal agencies if an employee who is
engaged in the performance of an award informs you about a conviction,
as required by Sec. 20.205(c)(2), or you otherwise learn of the
conviction. Your notification to the Federal agencies must--
    (1) Be in writing;
    (2) Include the employee's position title;
    (3) Include the identification number(s) of each affected award;

[[Page 232]]

    (4) Be sent within ten calendar days after you learn of the
conviction; and
    (5) Be sent to every Federal agency on whose award the convicted
employee was working. It must be sent to every awarding official or his
or her official designee, unless the Federal agency has specified a
central point for the receipt of the notices.
    (b) Second, within 30 calendar days of learning about an employee's
conviction, you must either--
    (1) Take appropriate personnel action against the employee, up to
and including termination, consistent with the requirements of the
Rehabilitation Act of 1973 (29 U.S.C. 794), as amended; or
    (2) Require the employee to participate satisfactorily in a drug
abuse assistance or rehabilitation program approved for these purposes
by a Federal, State or local health, law enforcement, or other
appropriate agency.



Sec. 20.230  How and when must I identify workplaces?

    (a) You must identify all known workplaces under each Department of
the Treasury award. A failure to do so is a violation of your drug-free
workplace requirements. You may identify the workplaces--
    (1) To the Department of the Treasury official that is making the
award, either at the time of application or upon award; or
    (2) In documents that you keep on file in your offices during the
performance of the award, in which case you must make the information
available for inspection upon request by Department of the Treasury
officials or their designated representatives.
    (b) Your workplace identification for an award must include the
actual address of buildings (or parts of buildings) or other sites where
work under the award takes place. Categorical descriptions may be used
(e.g., all vehicles of a mass transit authority or State highway
department while in operation, State employees in each local
unemployment office, performers in concert halls or radio studios).
    (c) If you identified workplaces to the Department of the Treasury
awarding official at the time of application or award, as described in
paragraph (a)(1) of this section, and any workplace that you identified
changes during the performance of the award, you must inform the
Department of the Treasury awarding official.



        Subpart C_Requirements for Recipients Who Are Individuals



Sec. 20.300  What must I do to comply with this part if I am an
individual recipient?

    As a condition of receiving a(n) Department of the Treasury award,
if you are an individual recipient, you must agree that--
    (a) You will not engage in the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance in conducting
any activity related to the award; and
    (b) If you are convicted of a criminal drug offense resulting from a
violation occurring during the conduct of any award activity, you will
report the conviction:
    (1) In writing.
    (2) Within 10 calendar days of the conviction.
    (3) To the Department of the Treasury awarding official or other
designee for each award that you currently have, unless Sec. 20.301 or
the award document designates a central point for the receipt of the
notices. When notice is made to a central point, it must include the
identification number(s) of each affected award.



Sec. 20.301  [Reserved]



   Subpart D_Responsibilities of Department of the Treasury Awarding
                                Officials



Sec. 20.400  What are my responsibilities as a(n) Department of the
Treasury awarding official?

    As a(n) Department of the Treasury awarding official, you must
obtain each recipient's agreement, as a condition of the award, to
comply with the requirements in--
    (a) Subpart B of this part, if the recipient is not an individual;
or
    (b) Subpart C of this part, if the recipient is an individual.

[[Page 233]]



           Subpart E_Violations of this Part and Consequences



Sec. 20.500  How are violations of this part determined for recipients
other than individuals?

    A recipient other than an individual is in violation of the
requirements of this part if the Secretary of the Treasury determines,
in writing, that--
    (a) The recipient has violated the requirements of subpart B of this
part; or
    (b) The number of convictions of the recipient's employees for
violating criminal drug statutes in the workplace is large enough to
indicate that the recipient has failed to make a good faith effort to
provide a drug-free workplace.



Sec. 20.505  How are violations of this part determined for recipients
who are individuals?

    An individual recipient is in violation of the requirements of this
part if the Secretary of the Treasury determines, in writing, that--
    (a) The recipient has violated the requirements of subpart C of this
part; or
    (b) The recipient is convicted of a criminal drug offense resulting
from a violation occurring during the conduct of any award activity.



Sec. 20.510  What actions will the Federal Government take against a
recipient determined to have violated this part?

    If a recipient is determined to have violated this part, as
described in Sec. 20.500 or Sec. 20.505, the Department of the
Treasury may take one or more of the following actions--
    (a) Suspension of payments under the award;
    (b) Suspension or termination of the award; and
    (c) Suspension or debarment of the recipient under 22 CFR Part 19,
for a period not to exceed five years.



Sec. 20.515  Are there any exceptions to those actions?

    The Secretary of the Treasury may waive with respect to a particular
award, in writing, a suspension of payments under an award, suspension
or termination of an award, or suspension or debarment of a recipient if
the Secretary of the Treasury determines that such a waiver would be in
the public interest. This exception authority cannot be delegated to any
other official.



                          Subpart F_Definitions



Sec. 20.605  Award.

    Award means an award of financial assistance by the Department of
the Treasury or other Federal agency directly to a recipient.
    (a) The term award includes:
    (1) A Federal grant or cooperative agreement, in the form of money
or property in lieu of money.
    (2) [Reserved]
    (b) The term award does not include:
    (1) Technical assistance that provides services instead of money.
    (2) Loans.
    (3) Loan guarantees.
    (4) Interest subsidies.
    (5) Insurance.
    (6) Direct appropriations.
    (7) Veterans' benefits to individuals (i.e., any benefit to
veterans, their families, or survivors by virtue of the service of a
veteran in the Armed Forces of the United States).



Sec. 20.610  Controlled substance.

    Controlled substance means a controlled substance in schedules I
through V of the Controlled Substances Act (21 U.S.C. 812), and as
further defined by regulation at 21 CFR 1308.11 through 1308.15.



Sec. 20.615  Conviction.

    Conviction means a finding of guilt (including a plea of nolo
contendere) or imposition of sentence, or both, by any judicial body
charged with the responsibility to determine violations of the Federal
or State criminal drug statutes.



Sec. 20.620  Cooperative agreement.

    Cooperative agreement means an award of financial assistance that,
consistent with 31 U.S.C. 6305, is used to enter into the same kind of
relationship as a grant (see definition of grant in Sec. 20.650),
except that substantial involvement is expected between the Federal
agency and the recipient when carrying out the activity contemplated

[[Page 234]]

by the award. The term does not include cooperative research and
development agreements as defined in 15 U.S.C. 3710a.



Sec. 20.625  Criminal drug statute.

    Criminal drug statute means a Federal or non-Federal criminal
statute involving the manufacture, distribution, dispensing, use, or
possession of any controlled substance.



Sec. 20.630  Debarment.

    Debarment means an action taken by a Federal agency to prohibit a
recipient from participating in Federal Government procurement contracts
and covered nonprocurement transactions. A recipient so prohibited is
debarred, in accordance with the Federal Acquisition Regulation for
procurement contracts (48 CFR part 9, subpart 9.4) and the common rule,
Government-wide Debarment and Suspension (Nonprocurement), that
implements Executive Order 12549 and Executive Order 12689.



Sec. 20.635  Drug-free workplace.

    Drug-free workplace means a site for the performance of work done in
connection with a specific award at which employees of the recipient are
prohibited from engaging in the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance.



Sec. 20.640  Employee.

    (a) Employee means the employee of a recipient directly engaged in
the performance of work under the award, including--
    (1) All direct charge employees;
    (2) All indirect charge employees, unless their impact or
involvement in the performance of work under the award is insignificant
to the performance of the award; and
    (3) Temporary personnel and consultants who are directly engaged in
the performance of work under the award and who are on the recipient's
payroll.
    (b) This definition does not include workers not on the payroll of
the recipient (e.g., volunteers, even if used to meet a matching
requirement; consultants or independent contractors not on the payroll;
or employees of subrecipients or subcontractors in covered workplaces).



Sec. 20.645  Federal agency or agency.

    Federal agency or agency means any United States executive
department, military department, government corporation, government
controlled corporation, any other establishment in the executive branch
(including the Executive Office of the President), or any independent
regulatory agency.



Sec. 20.650  Grant.

    Grant means an award of financial assistance that, consistent with
31 U.S.C. 6304, is used to enter into a relationship--
    (a) The principal purpose of which is to transfer a thing of value
to the recipient to carry out a public purpose of support or stimulation
authorized by a law of the United States, rather than to acquire
property or services for the Federal Government's direct benefit or use;
and
    (b) In which substantial involvement is not expected between the
Federal agency and the recipient when carrying out the activity
contemplated by the award.



Sec. 20.655  Individual.

    Individual means a natural person.



Sec. 20.660  Recipient.

    Recipient means any individual, corporation, partnership,
association, unit of government (except a Federal agency) or legal
entity, however organized, that receives an award directly from a
Federal agency.



Sec. 20.665  State.

    State means any of the States of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, or any territory or
possession of the United States.



Sec. 20.670  Suspension.

    Suspension means an action taken by a Federal agency that
immediately prohibits a recipient from participating in Federal
Government procurement contracts and covered nonprocurement transactions
for a temporary period, pending completion of

[[Page 235]]

an investigation and any judicial or administrative proceedings that may
ensue. A recipient so prohibited is suspended, in accordance with the
Federal Acquisition Regulation for procurement contracts (48 CFR part 9,
subpart 9.4) and the common rule, Government-wide Debarment and
Suspension (Nonprocurement), that implements Executive Order 12549 and
Executive Order 12689. Suspension of a recipient is a distinct and
separate action from suspension of an award or suspension of payments
under an award.



PART 21_NEW RESTRICTIONS ON LOBBYING--Table of Contents



                            Subpart A_General

Sec.
21.100 Conditions on use of funds.
21.105 Definitions.
21.110 Certification and disclosure.

                  Subpart B_Activities by Own Employees

21.200 Agency and legislative liaison.
21.205 Professional and technical services.
21.210 Reporting.

            Subpart C_Activities by Other Than Own Employees

21.300 Professional and technical services.

                   Subpart D_Penalties and Enforcement

21.400 Penalties.
21.405 Penalty procedures.
21.410 Enforcement.

                          Subpart E_Exemptions

21.500 Secretary of Defense.

                        Subpart F_Agency Reports

21.600 Semi-annual compilation.
21.605 Inspector General report.

Appendix A to Part 21--Certification Regarding Lobbying
Appendix B to Part 21--Disclosure Form to Report Lobbying

    Authority: Sec. 319, Pub. L. 101-121 (31 U.S.C. 1352); 31 U.S.C.
321.

    Source: 55 FR 6737, 6751, Feb. 26, 1990, unless otherwise noted.

    Cross Reference: See also Office of Management and Budget notice
published at 54 FR 52306, December 20, 1989.



                            Subpart A_General



Sec. 21.100  Conditions on use of funds.

    (a) No appropriated funds may be expended by the recipient of a
Federal contract, grant, loan, or cooperative ageement to pay any person
for influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with any of the following
covered Federal actions: the awarding of any Federal contract, the
making of any Federal grant, the making of any Federal loan, the
entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement.
    (b) Each person who requests or receives from an agency a Federal
contract, grant, loan, or cooperative agreement shall file with that
agency a certification, set forth in Appendix A, that the person has not
made, and will not make, any payment prohibited by paragraph (a) of this
section.
    (c) Each person who requests or receives from an agency a Federal
contract, grant, loan, or a cooperative agreement shall file with that
agency a disclosure form, set forth in Appendix B, if such person has
made or has agreed to make any payment using nonappropriated funds (to
include profits from any covered Federal action), which would be
prohibited under paragraph (a) of this section if paid for with
appropriated funds.
    (d) Each person who requests or receives from an agency a commitment
providing for the United States to insure or guarantee a loan shall file
with that agency a statement, set forth in Appendix A, whether that
person has made or has agreed to make any payment to influence or
attempt to influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with that loan insurance or guarantee.
    (e) Each person who requests or receives from an agency a commitment
providing for the United States to insure or guarantee a loan shall file
with

[[Page 236]]

that agency a disclosure form, set forth in Appendix B, if that person
has made or has agreed to make any payment to influence or attempt to
influence an officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress
in connection with that loan insurance or guarantee.



Sec. 21.105  Definitions.

    For purposes of this part:
    (a) Agency, as defined in 5 U.S.C. 552(f), includes Federal
executive departments and agencies as well as independent regulatory
commissions and Government corporations, as defined in 31 U.S.C.
9101(1).
    (b) Covered Federal action means any of the following Federal
actions:
    (1) The awarding of any Federal contract;
    (2) The making of any Federal grant;
    (3) The making of any Federal loan;
    (4) The entering into of any cooperative agreement; and,
    (5) The extension, continuation, renewal, amendment, or modification
of any Federal contract, grant, loan, or cooperative agreement.

Covered Federal action does not include receiving from an agency a
commitment providing for the United States to insure or guarantee a
loan. Loan guarantees and loan insurance are addressed independently
within this part.
    (c) Federal contract means an acquisition contract awarded by an
agency, including those subject to the Federal Acquisition Regulation
(FAR), and any other acquisition contract for real or personal property
or services not subject to the FAR.
    (d) Federal cooperative agreement means a cooperative agreement
entered into by an agency.
    (e) Federal grant means an award of financial assistance in the form
of money, or property in lieu of money, by the Federal Government or a
direct appropriation made by law to any person. The term does not
include technical assistance which provides services instead of money,
or other assistance in the form of revenue sharing, loans, loan
guarantees, loan insurance, interest subsidies, insurance, or direct
United States cash assistance to an individual.
    (f) Federal loan means a loan made by an agency. The term does not
include loan guarantee or loan insurance.
    (g) Indian tribe and tribal organization have the meaning provided
in section 4 of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450B). Alaskan Natives are included under the definitions
of Indian tribes in that Act.
    (h) Influencing or attempting to influence means making, with the
intent to influence, any communication to or appearance before an
officer or employee or any agency, a Member of Congress, an officer or
employee of Congress, or an employee of a Member of Congress in
connection with any covered Federal action.
    (i) Loan guarantee and loan insurance means an agency's guarantee or
insurance of a loan made by a person.
    (j) Local government means a unit of government in a State and, if
chartered, established, or otherwise recognized by a State for the
performance of a governmental duty, including a local public authority,
a special district, an intrastate district, a council of governments, a
sponsor group representative organization, and any other instrumentality
of a local government.
    (k) Officer or employee of an agency includes the following
individuals who are employed by an agency:
    (1) An individual who is appointed to a position in the Government
under title 5, U.S. Code, including a position under a temporary
appointment;
    (2) A member of the uniformed services as defined in section 101(3),
title 37, U.S. Code;
    (3) A special Government employee as defined in section 202, title
18, U.S. Code; and,
    (4) An individual who is a member of a Federal advisory committee,
as defined by the Federal Advisory Committee Act, title 5, U.S. Code
appendix 2.
    (l) Person means an individual, corporation, company, association,
authority, firm, partnership, society, State, and local government,
regardless of whether such entity is operated for profit or not for
profit. This term

[[Page 237]]

excludes an Indian tribe, tribal organization, or any other Indian
organization with respect to expenditures specifically permitted by
other Federal law.
    (m) Reasonable compensation means, with respect to a regularly
employed officer or employee of any person, compensation that is
consistent with the normal compensation for such officer or employee for
work that is not furnished to, not funded by, or not furnished in
cooperation with the Federal Government.
    (n) Reasonable payment means, with respect to perfessional and other
technical services, a payment in an amount that is consistent with the
amount normally paid for such services in the private sector.
    (o) Recipient includes all contractors, subcontractors at any tier,
and subgrantees at any tier of the recipient of funds received in
connection with a Federal contract, grant, loan, or cooperative
agreement. The term excludes an Indian tribe, tribal organization, or
any other Indian organization with respect to expenditures specifically
permitted by other Federal law.
    (p) Regularly employed means, with respect to an officer or employee
of a person requesting or receiving a Federal contract, grant, loan, or
cooperative agreement or a commitment providing for the United States to
insure or guarantee a loan, an officer or employee who is employed by
such person for at least 130 working days within one year immediately
preceding the date of the submission that initiates agency consideration
of such person for receipt of such contract, grant, loan, cooperative
agreement, loan insurance commitment, or loan guarantee commitment. An
officer or employee who is employed by such person for less than 130
working days within one year immediately preceding the date of the
submission that initiates agency consideration of such person shall be
considered to be regularly employed as soon as he or she is employed by
such person for 130 working days.
    (q) State means a State of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, a territory or possession of
the United States, an agency or instrumentality of a State, and a multi-
State, regional, or interstate entity having governmental duties and
powers.



Sec. 21.110  Certification and disclosure.

    (a) Each person shall file a certification, and a disclosure form,
if required, with each submission that initiates agency consideration of
such person for:
    (1) Award of a Federal contract, grant, or cooperative agreement
exceeding $100,000; or
    (2) An award of a Federal loan or a commitment providing for the
United States to insure or guarantee a loan exceeding $150,000.
    (b) Each person shall file a certification, and a disclosure form,
if required, upon receipt by such person of:
    (1) A Federal contract, grant, or cooperative agreement exceeding
$100,000; or
    (2) A Federal loan or a commitment providing for the United States
to insure or guarantee a loan exceeding $150,000, unless such person
previously filed a certification, and a disclosure form, if required,
under paragraph (a) of this section.
    (c) Each person shall file a disclosure form at the end of each
calendar quarter in which there occurs any event that requires
disclosure or that materially affects the accuracy of the information
contained in any disclosure form previously filed by such person under
paragraph (a) or (b) of this section. An event that materially affects
the accuracy of the information reported includes:
    (1) A cumulative increase of $25,000 or more in the amount paid or
expected to be paid for influencing or attempting to influence a covered
Federal action; or
    (2) A change in the person(s) or individual(s) influencing or
attempting to influence a covered Federal action; or,
    (3) A change in the officer(s), employee(s), or Member(s) contacted
to influence or attempt to influence a covered Federal action.
    (d) Any person who requests or receives from a person referred to in
paragraph (a) or (b) of this section:
    (1) A subcontract exceeding $100,000 at any tier under a Federal
contract;

[[Page 238]]

    (2) A subgrant, contract, or subcontract exceeding $100,000 at any
tier under a Federal grant;
    (3) A contract or subcontract exceeding $100,000 at any tier under a
Federal loan exceeding $150,000; or,
    (4) A contract or subcontract exceeding $100,000 at any tier under a
Federal cooperative agreement, shall file a certification, and a
disclosure form, if required, to the next tier above.
    (e) All disclosure forms, but not certifications, shall be forwarded
from tier to tier until received by the person referred to in paragraph
(a) or (b) of this section. That person shall forward all disclosure
forms to the agency.
    (f) Any certification or disclosure form filed under paragraph (e)
of this section shall be treated as a material representation of fact
upon which all receiving tiers shall rely. All liability arising from an
erroneous representation shall be borne solely by the tier filing that
representation and shall not be shared by any tier to which the
erroneous representation is forwarded. Submitting an erroneous
certification or disclosure constitutes a failure to file the required
certification or disclosure, respectively. If a person fails to file a
required certification or disclosure, the United States may pursue all
available remedies, including those authorized by section 1352, title
31, U.S. Code.
    (g) For awards and commitments in process prior to December 23,
1989, but not made before that date, certifications shall be required at
award or commitment, covering activities occurring between December 23,
1989, and the date of award or commitment. However, for awards and
commitments in process prior to the December 23, 1989 effective date of
these provisions, but not made before December 23, 1989, disclosure
forms shall not be required at time of award or commitment but shall be
filed within 30 days.
    (h) No reporting is required for an activity paid for with
appropriated funds if that activity is allowable under either subpart B
or C.



                  Subpart B_Activities by Own Employees



Sec. 21.200  Agency and legislative liaison.

    (a) The prohibition on the use of appropriated funds, in Sec.
21.100 (a), does not apply in the case of a payment of reasonable
compensation made to an officer or employee of a person requesting or
receiving a Federal contract, grant, loan, or cooperative agreement if
the payment is for agency and legislative liaison activities not
directly related to a covered Federal action.
    (b) For purposes of paragraph (a) of this section, providing any
information specifically requested by an agency or Congress is allowable
at any time.
    (c) For purposes of paragraph (a) of this section, the following
agency and legislative liaison activities are allowable at any time only
where they are not related to a specific solicitation for any covered
Federal action:
    (1) Discussing with an agency (including individual demonstrations)
the qualities and characteristics of the person's products or services,
conditions or terms of sale, and service capabilities; and,
    (2) Technical discussions and other activities regarding the
application or adaptation of the person's products or services for an
agency's use.
    (d) For purposes of paragraph (a) of this section, the following
agencies and legislative liaison activities are allowable only where
they are prior to formal solicitation of any covered Federal action:
    (1) Providing any information not specifically requested but
necessary for an agency to make an informed decision about initiation of
a covered Federal action;
    (2) Technical discussions regarding the preparation of an
unsolicited proposal prior to its official submission; and,
    (3) Capability presentations by persons seeking awards from an
agency pursuant to the provisions of the Small Business Act, as amended
by Pub. L. 95-507 and other subsequent amendments.
    (e) Only those activities expressly authorized by this section are
allowable under this section.

[[Page 239]]



Sec. 21.205  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec.
21.100 (a), does not apply in the case of a payment of reasonable
compensation made to an officer or employee of a person requesting or
receiving a Federal contract, grant, loan, or cooperative agreement or
an extension, continuation, renewal, amendment, or modification of a
Federal contract, grant, loan, or cooperative agreement if payment is
for professional or technical services rendered directly in the
preparation, submission, or negotiation of any bid, proposal, or
application for that Federal contract, grant, loan, or cooperative
agreement or for meeting requirements imposed by or pursuant to law as a
condition for receiving that Federal contract, grant, loan, or
cooperative agreement.
    (b) For purposes of paragraph (a) of this section, ``professional
and technical services'' shall be limited to advice and analysis
directly applying any professional or technical discipline. For example,
drafting of a legal document accompanying a bid or proposal by a lawyer
is allowable. Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment rendered
directly in the negotiation of a contract is allowable. However,
communications with the intent to influence made by a professional (such
as a licensed lawyer) or a technical person (such as a licensed
accountant) are not allowable under this section unless they provide
advice and analysis directly applying their professional or technical
expertise and unless the advice or analysis is rendered directly and
solely in the preparation, submission or negotiation of a covered
Federal action. Thus, for example, communications with the intent to
influence made by a lawyer that do not provide legal advice or analysis
directly and solely related to the legal aspects of his or her client's
proposal, but generally advocate one proposal over another are not
allowable under this section because the lawyer is not providing
professional legal services. Similarly, communications with the intent
to influence made by an engineer providing an engineering analysis prior
to the preparation or submission of a bid or proposal are not allowable
under this section since the engineer is providing technical services
but not directly in the preparation, submission or negotiation of a
covered Federal action.
    (c) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation, or reasonably expected to be required by law or regulation,
and any other requirements in the actual award documents.
    (d) Only those services expressly authorized by this section are
allowable under this section.



Sec. 21.210  Reporting.

    No reporting is required with respect to payments of reasonable
compensation made to regularly employed officers or employees of a
person.



            Subpart C_Activities by Other Than Own Employees



Sec. 21.300  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec.
21.100 (a), does not apply in the case of any reasonable payment to a
person, other than an officer or employee of a person requesting or
receiving a covered Federal action, if the payment is for professional
or technical services rendered directly in the preparation, submission,
or negotiation of any bid, proposal, or application for that Federal
contract, grant, loan, or cooperative agreement or for meeting
requirements imposed by or pursuant to law as a condition for receiving
that Federal contract, grant, loan, or cooperative agreement.
    (b) The reporting requirements in Sec. 21.110 (a) and (b) regarding
filing a disclosure form by each person, if required, shall not apply
with respect to professional or technical services rendered directly in
the preparation, submission, or negotiation of any commitment providing
for the United States to insure or guarantee a loan.

[[Page 240]]

    (c) For purposes of paragraph (a) of this section, ``professional
and technical services'' shall be limited to advice and analysis
directly applying any professional or technical discipline. For example,
drafting or a legal document accompanying a bid or proposal by a lawyer
is allowable. Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment rendered
directly in the negotiation of a contract is allowable. However,
communications with the intent to influence made by a professional (such
as a licensed lawyer) or a technical person (such as a licensed
accountant) are not allowable under this section unless they provide
advice and analysis directly applying their professional or technical
expertise and unless the advice or analysis is rendered directly and
solely in the preparation, submission or negotiation of a covered
Federal action. Thus, for example, communications with the intent to
influence made by a lawyer that do not provide legal advice or analysis
directly and solely related to the legal aspects of his or her client's
proposal, but generally advocate one proposal over another are not
allowable under this section because the lawyer is not providing
professional legal services. Similarly, communications with the intent
to influence made by an engineer providing an engineering analysis prior
to the preparation or submission of a bid or proposal are not allowable
under this section since the engineer is providing technical services
but not directly in the preparation, submission or negotiation of a
covered Federal action.
    (d) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation, or reasonably expected to be required by law or regulation,
and any other requirements in the actual award documents.
    (e) Persons other than officers or employees of a person requesting
or receiving a covered Federal action include consultants and trade
associations.
    (f) Only those services expressly authorized by this section are
allowable under this section.



                   Subpart D_Penalties and Enforcement



Sec. 21.400  Penalties.

    (a) Any person who makes an expenditure prohibited herein shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such expenditure.
    (b) Any person who fails to file or amend the disclosure form (see
Appendix B) to be filed or amended if required herein, shall be subject
to a civil penalty of not less than $10,000 and not more than $100,000
for each such failure.
    (c) A filing or amended filing on or after the date on which an
administrative action for the imposition of a civil penalty is commenced
does not prevent the imposition of such civil penalty for a failure
occurring before that date. An administrative action is commenced with
respect to a failure when an investigating official determines in
writing to commence an investigation of an allegation of such failure.
    (d) In determining whether to impose a civil penalty, and the amount
of any such penalty, by reason of a violation by any person, the agency
shall consider the nature, circumstances, extent, and gravity of the
violation, the effect on the ability of such person to continue in
business, any prior violations by such person, the degree of culpability
of such person, the ability of the person to pay the penalty, and such
other matters as may be appropriate.
    (e) First offenders under paragraphs (a) or (b) of this section
shall be subject to a civil penalty of $10,000, absent aggravating
circumstances. Second and subsequent offenses by persons shall be
subject to an appropriate civil penalty between $10,000 and $100,000, as
determined by the agency head or his or her designee.
    (f) An imposition of a civil penalty under this section does not
prevent the United States from seeking any other remedy that may apply
to the same conduct that is the basis for the imposition of such civil
penalty.

[[Page 241]]



Sec. 21.405  Penalty procedures.

    Agencies shall impose and collect civil penalties pursuant to the
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C.
sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and
3812, insofar as these provisions are not inconsistent with the
requirements herein.



Sec. 21.410  Enforcement.

    The head of each agency shall take such actions as are necessary to
ensure that the provisions herein are vigorously implemented and
enforced in that agency.



                          Subpart E_Exemptions



Sec. 21.500  Secretary of Defense.

    (a) The Secretary of Defense may exempt, on a case-by-case basis, a
covered Federal action from the prohibition whenever the Secretary
determines, in writing, that such an exemption is in the national
interest. The Secretary shall transmit a copy of each such written
exemption to Congress immediately after making such a determination.
    (b) The Department of Defense may issue supplemental regulations to
implement paragraph (a) of this section.



                        Subpart F_Agency Reports



Sec. 21.600  Semi-annual compilation.

    (a) The head of each agency shall collect and compile the disclosure
reports (see Appendix B) and, on May 31 and November 30 of each year,
submit to the Secretary of the Senate and the Clerk of the House of
Representatives a report containing a compilation of the information
contained in the disclosure reports received during the six-month period
ending on March 31 or September 30, respectively, of that year.
    (b) The report, including the compilation, shall be available for
public inspection 30 days after receipt of the report by the Secretary
and the Clerk.
    (c) Information that involves intelligence matters shall be reported
only to the Select Committee on Intelligence of the Senate, the
Permanent Select Committee on Intelligence of the House of
Representatives, and the Committees on Appropriations of the Senate and
the House of Representatives in accordance with procedures agreed to by
such committees. Such information shall not be available for public
inspection.
    (d) Information that is classified under Executive Order 12356 or
any successor order shall be reported only to the Committee on Foreign
Relations of the Senate and the Committee on Foreign Affairs of the
House of Representatives or the Committees on Armed Services of the
Senate and the House of Representatives (whichever such committees have
jurisdiction of matters involving such information) and to the
Committees on Appropriations of the Senate and the House of
Representatives in accordance with procedures agreed to by such
committees. Such information shall not be available for public
inspection.
    (e) The first semi-annual compilation shall be submitted on May 31,
1990, and shall contain a compilation of the disclosure reports received
from December 23, 1989 to March 31, 1990.
    (f) Major agencies, designated by the Office of Management and
Budget (OMB), are required to provide machine-readable compilations to
the Secretary of the Senate and the Clerk of the House of
Representatives no later than with the compilations due on May 31, 1991.
OMB shall provide detailed specifications in a memorandum to these
agencies.
    (g) Non-major agencies are requested to provide machine-readable
compilations to the Secretary of the Senate and the Clerk of the House
of Representatives.
    (h) Agencies shall keep the originals of all disclosure reports in
the official files of the agency.



Sec. 21.605  Inspector General report.

    (a) The Inspector General, or other official as specified in
paragraph (b) of this section, of each agency shall prepare and submit
to Congress each year, commencing with submission of the President's
Budget in 1991, an evaluation of the compliance of that agency with, and
the effectiveness of, the requirements herein. The evaluation may
include any recommended changes that

[[Page 242]]

may be necessary to strengthen or improve the requirements.
    (b) In the case of an agency that does not have an Inspector
General, the agency official comparable to an Inspector General shall
prepare and submit the annual report, or, if there is no such comparable
official, the head of the agency shall prepare and submit the annual
report.
    (c) The annual report shall be submitted at the same time the agency
submits its annual budget justifications to Congress.
    (d) The annual report shall include the following: All alleged
violations relating to the agency's covered Federal actions during the
year covered by the report, the actions taken by the head of the agency
in the year covered by the report with respect to those alleged
violations and alleged violations in previous years, and the amounts of
civil penalties imposed by the agency in the year covered by the report.



      Sec. Appendix A to Part 21--Certification Regarding Lobbying

 Certification for Contracts, Grants, Loans, and Cooperative Agreements

    The undersigned certifies, to the best of his or her knowledge and
belief, that:
    (1) No Federal appropriated funds have been paid or will be paid, by
or on behalf of the undersigned, to any person for influencing or
attempting to influence an officer or employee of an agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with the awarding of any Federal contract, the
making of any Federal grant, the making of any Federal loan, the
entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment, or modification of any Federal
contract, grant, loan, or cooperative agreement.
    (2) If any funds other than Federal appropriated funds have been
paid or will be paid to any person for influencing or attempting to
influence an officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress
in connection with this Federal contract, grant, loan, or cooperative
agreement, the undersigned shall complete and submit Standard Form-LLL,
``Disclosure Form to Report Lobbying,'' in accordance with its
instructions.
    (3) The undersigned shall require that the language of this
certification be included in the award documents for all subawards at
all tiers (including subcontracts, subgrants, and contracts under
grants, loans, and cooperative agreements) and that all subrecipients
shall certify and disclose accordingly.
    This certification is a material representation of fact upon which
reliance was placed when this transaction was made or entered into.
Submission of this certification is a prerequisite for making or
entering into this transaction imposed by section 1352, title 31, U.S.
Code. Any person who fails to file the required certification shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such failure.

            Statement for Loan Guarantees and Loan Insurance

    The undersigned states, to the best of his or her knowledge and
belief, that:
    If any funds have been paid or will be paid to any person for
influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with this commitment
providing for the United States to insure or guarantee a loan, the
undersigned shall complete and submit Standard Form-LLL, ``Disclosure
Form to Report Lobbying,'' in accordance with its instructions.
    Submission of this statement is a prerequisite for making or
entering into this transaction imposed by section 1352, title 31, U.S.
Code. Any person who fails to file the required statement shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such failure.

[[Page 243]]

        Appendix B to Part 21--Disclosure Form To Report Lobbying
[GRAPHIC] [TIFF OMITTED] TC21OC91.002


[[Page 244]]


[GRAPHIC] [TIFF OMITTED] TC21OC91.003


[[Page 245]]


[GRAPHIC] [TIFF OMITTED] TC21OC91.004


[[Page 246]]





PART 25_PREPAYMENT OF FOREIGN MILITARY SALES LOANS MADE BY THE DEFENSE
SECURITY ASSISTANCE AGENCY AND FOREIGN MILITARY SALES LOANS MADE BY THE

FEDERAL FINANCING BANK AND GUARANTEED BY THE DEFENSE SECURITY ASSISTANCE
AGENCY--Table of Contents



                            Subpart A_General

Sec.
25.100 Definitions.
25.101 OMB control number.

                 Subpart B_Qualifications for Prepayment

25.200 General rules.

                          Subpart C_Procedures

25.300 Application procedure.
25.301 Approval procedure.
25.302 Application withdrawal; effect of approval.
25.303 Closing procedure.

                     Subpart D_Form of Private Loan

25.400 Loan provisions.
25.401 Fees.
25.402 Transferability.
25.403 Registration.
25.404 Non-separability.
25.405 Form of guaranty.
25.406 Savings clause.

    Authority: Title III, Pub. L. 100-202; 31 U.S.C. 321.

    Source: 53 FR 25426, July 6, 1988, unless otherwise noted.



                            Subpart A_General



Sec. 25.100  Definitions.

    In this part, unless the context indicates otherwise:
    (a) Act means the provisions entitled ``Foreign Military Sales Debt
Reform,'' of Title III, entitled ``Military Assistance,'' of an act
entitled ``Foreign Operations, Export Financing and Related Programs
Appropriations Act, 1988'' (Pub. L. 100-202), enacted December 22, 1987.
    (b) AECA means the Arms Export Control Act, as amended (22 U.S.C.
2751 et seq.).
    (c) Borrower means the obligor on an FMS Advance.
    (d) Closing date means:
    (1) With respect to the prepayment of the amounts permitted by this
part to be prepaid of FMS Loans held by DSAA, the date designated by the
mutual agreement of both the Borrower and DSAA on which the Guaranty
will be attached to the Private Loan Note or the Private Loan Portion
Notes, as the case may be, the Private Loan will be funded, and the
Total Permitted Prepayment Amount, or the portion thereof which the
Borrower has selected to prepay, will be prepaid; and
    (2) With respect to the prepayment of the amounts permitted by this
part to be prepaid of FMS Loans held by the FFB and guaranteed by DSAA,
the date designated by the mutual agreement of the Borrower, the FFB,
and DSAA on which the Guaranty will be attached to the Private Loan Note
or the Private Loan Portion Notes, as the case may be, the Private Loan
will be funded, and the Total Permitted Prepayment Amount, or Portion
thereof which the Borrower has selected to prepay, will be prepaid.
    (e) Derivative means any right, interest, instrument or security
issued or traded on the credit of the Private Loan or any Private Loan
Portion, including but not limited to:
    (1) Any participation share of, or undivided ownership or other
equity interest in, the Private Loan or any Private Loan Portion;
    (2) Any note, bond or other debt instrument or obligation which is
collateralized or otherwise secured by a pledge of, or secruity interest
in, the Private Loan or any Private Loan Portion; or
    (3) Any such interest in such an interest or any such instrument
secured by such an instrument.
    (f) DSAA means the Defense Security Assistance Agency, an agency
within the Department of Defense.
    (g) Eligible FMS advance means any FMS Advance which:
    (1) Was outstanding on December 22, 1987;
    (2) Has principal amounts becoming due and payable after September
30, 1989; and
    (3) Bears interest at a rate equal to or greater than 10 percentum
per annum.


[[Page 247]]



Eligible FMS Advance may include FMS Advances meeting the criteria of
Eligible FMS Advance which are made on account of FMS Loans even when
such FMS Loans do not, in themselves, meet the criteria of Eligible FMS
Loan.
    (h) Eligible FMS loan means any FMS Loan which:
    (1) Was outstanding on December 22, 1987;
    (2) Has principal amounts becoming due and payable after September
30, 1989; and
    (3) Bears interest pursuant to the terms of the loan agreement
relating thereto at a consolidated rate equal to or greater than 10
percentum per annum.

Eligible FMS Loans may include FMS Advances which are made on account of
FMS Loans meeting the criteria of Eligible FMS Loan even when such FMS
Advances do not, in themselves, meet the criteria of Eligible FMS
Advance.
    (i) Eligible private lender means either:
    (1) Any of the following entities:
    (i) Any banking, savings, or lending institution, or any subsidiary
or affiliate thereof, chartered or otherwise lawfully organized under
the laws of any State, the District of Columbia, the United States or
any territory or possession of the United States, including, but not
limited to, any bank, trust company, industrial bank, investment banking
company, savings association, savings and loan association, building and
loan association, savings bank, credit union, or finance company, which
is doing business in the United States;
    (ii) Any broker or dealer registered with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934;
    (iii) Any company lawfully organized as an insurance company, and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a State; or
    (iv) Any United States pension fund; or
    (2) Any trust or other special purpose financing entity which is
funded initially by an entity or entities of the type described in
paragraph (i)(1) of this section.
    (j) FFB means the Federal Financing Bank, and instrumentality and
wholly-owned corporation of the United States.
    (k) FMS means Foreign Military Sales.
    (l) FMA advance means:
    (1) A disbursement of funds made pursuant to a loan agreement
between the Borrower and DSAA, which loan agreement provides for making
of an FMS Loan; or
    (2) A disbursement of funds made pursuant to a loan agreement
between the Borrower and the FFB, which loan agreement provides for the
making of an FMS Loan.
    (m) FMS loan means either:
    (1) A loan made directly by the Secretary of Defense pursuant to
section 23 of AECA; or
    (2) A loan made by the FFB and guaranteed by the Secretary of
Defense pursuant to section 24 of AECA; and ``FMS Loans'' mean the
aggregate of such loans made to or for the account of a Borrower.
    (n) Guaranteed-amount debt derivative means any note, bond or other
debt instrument or obligation which is collateralized or otherwise
secured by a pledge of, or security interest in, the Private Loan Note
or any Private Loan Portion Note or any Derivative, as the case may be,
which has an exclusive or preferred claim to the Guaranteed Loan Amount
or the respective Guaranteed Loan Portion Amount or the respective
Guaranteed-Amount Equivalent, as the case may be.
    (o) Guaranteed-amount equity derivative means any participation
share of, or undivided ownership or other equity interest in, the
Private Loan or any Private Loan Portion or any Derivative, as the case
may be, which has an exclusive or preferred claim to the Guaranteed Loan
Amount or the respective Guaranteed Loan Portion Amount or the
respective Guaranteed-Amount Equivalent, as the case may be.
    (p) Guaranteed-amount equivalent means:
    (1) With respect to any Derivative which is equal in principal
amount to the Private Loan or any Private Loan Portion, that amount of
payment on account of such Derivative which is

[[Page 248]]

equal to the Guaranteed Loan Amount or the respective Guaranteed Loan
Portion Amount, as the case may be; or
    (2) With respect to any Derivatives which in the aggregate are equal
in principal amount to the Private Loan or any Private Loan Portion,
that amount of payment on account of such derivatives which is equal to
the Guaranteed Loan Amount or the respective Guaranteed Loan Portion
Amount, as the case may be.
    (q) Guaranteed loan amount means that amount of payment on account
of the Private Loan which is guaranteed under the terms of the Guaranty.
    (r) Guaranteed loan portion amount means that amount of payment on
account of any Private Loan Portion which is guaranteed under the terms
of the Guaranty.
    (s) Guaranty means either a new guaranty of the United States issued
by DSAA or an existing guaranty of the United States transferred by
DSAA, in the form of guaranty set forth in Sec. 25.405, which guaranty
will be attached to a Private Loan Note or Private Loan Portion Note.
    (t) Interest rate difference means the difference between:
    (1) The cost of funds to the Borrower for the Private Loan
(expressed in terms of the true rate of interest applicable to the
Private Loan) if paragraph (a) of Sec. 25.404 applies to the Private
Loan; and
    (2) The cost of funds to the Borrower for the Private Loan
(expressed in terms of the true rate of interest applicable to the
Private Loan) if paragraph (a) of Sec. 25.404 does not apply to the
Private Loan.
    (u) Non-registered obligation means a bearer obligation which does
not comply with all of the registration requirements of the Internal
Revenue Code.
    (v) Permitted arrears prepayment amount means the sum of all
arrears, if any, on all FMS Loans, which arrears are outstanding on the
Closing Date.
    (w) Permitted guaranty holder means:
    (1) An individual domiciled in the United States;
    (2) A corporation incorporated, chartered or otherwise organized in
the United States; or
    (3) A partnership or other juridical entity doing business in the
United States.
    (x) Permitted P&I prepayment amount means, with respect to each
Eligible FMS Loan or Eligible FMS Advance, as the case may be, the sum
of:
    (1) All principal amounts which become due and payable after
September 30, 1989, on the respective Eligible FMS Loan or Eligible FMS
Advance; and
    (2) All unpaid interest, if any, on the respective Eligible FMS Loan
or Eligible FMS Advance accrued as of the Closing Date.
    (y) Private loan means, collectively, the loan or loans that is or
are obtained by the Borrower from an Eligible Private Lender to prepay
the Total Permitted Prepayment Amount, or the portion thereof which the
Borrower has selected to prepay.
    (z) Private loan note means, collectively, the note or notes
executed and delivered by the Borrower to evidence the Private Loan.
    (aa) Private loan portion means any portion of the Private Loan.
    (bb) Private loan portion note means any note executed and delivered
by the Borrower to evidence a Private Loan Portion.
    (cc) Total permitted prepayment amount means the sum of:
    (1) The aggregate of the respective Permitted P&I Prepayment amount
for all Eligible FMS Loans and all Eligible FMS Advances on account of
FMS Loans which FMS Loans do not, in themselves, meet the criteria of
Eligible FMS Loans; and
    (2) The Permitted Arrears Prepayment Amount.
    (dd) Unguaranteed-amount equivalent means all amounts of payment on
account of any Derivative other than the respective Guaranteed-Amount
Equivalent.
    (ee) Unguaranteed loan amount means all amounts of payment on
account of the Private Loan other than the Guaranteed Amount.
    (ff) Unguaranteed loan portion amount means all amounts of payment
on account of any Private Loan Portion other than the respective
Guaranteed Loan Portion Amount.

[[Page 249]]



Sec. 25.101  OMB control number.

    The reporting requirements in this part have been approved under the
Office of Management and Budget control number 1505-0109.



                 Subpart B_Qualifications for Prepayment



Sec. 25.200  General rules.

    (a) To qualify for a loan prepayment at par pursuant to subsection
(a) of the Act, a Borrower must have an Eligible FMS Loan or an Eligible
FMS Advance.
    (b) A Borrower may prepay the Total Permitted Prepayment Amount in
portions using more than one closing; however, all prepayments of the
Total Permitted Prepayment Amount must have a Closing Date that is not
later than September 30, 1991.
    (c) A Borrower may prepay all or a portion of the Total Permitted
Prepayment Amount; however, if a Borrower selects to prepay any
Permitted P&I Prepayment Amount of an FMS Advance, the Borrower must
prepay the entire Permitted P&I Prepayment Amount of such FMS Advance.
    (d) If the payment billings of an FMS Loan have been consolidated in
accordance with the terms of the respective loan agreement, and if any
principal payments have been made on account of the FMS Loan, then the
outstanding principal balances of any Eligible FMS Advances shall be
determined in accordance with the principal of ``first disbursed, first
repaid,'' that is, advances on account of the FMS Loan shall be deemed
to have been repaid in the chronological order in which they were
disbursed.



                          Subpart C_Procedures



Sec. 25.300  Application procedure.

    (a) Each Borrower that wishes to prepay at par the Total Permitted
Prepayment Amount, or any portion thereof, must submit a written
prepayment application. To be considered complete, a prepayment
application must contain the following information and materials:
    (1) Part I of the prepayment application shall be the identification
of each Eligible FMS Loan or Eligible FMS Advance, as the case may be,
with respect to which the Borrower has selected to prepay the amount
thereof permitted by this part to be prepaid, setting forth with respect
to each such Eligible FMS Loan or Eligible FMS Advance:
    (i) The date on which the Eligible FMS Advance was made or the date
on which the Eligible FMS Loan was signed;
    (ii) The original amount of the Eligible FMS Loan or Eligible FMS
Advance;
    (iii) The principal and interest payment schedule of the Eligible
FMS Loan or Eligible FMS Advance; and
    (iv) The maturity of the Eligible FMS Loan or Eligible FMS Advance.
    (2) Part II of the prepayment application shall be the Borrower's
estimate of the Permitted Arrears Prepayment Amount calculated as of the
date of the application;
    (3) Part III of the prepayment application shall be a description of
each Private Loan, 90 percent of which the Borrower seeks to have
guaranteed, setting forth with respect to each Private Loan:
    (i) The total amount of the Private Loan,
    (ii) The proposed principal and interest payment schedule of the
Private Loan,
    (iii) The proposed maturity of the Private Loan, and
    (iv) The identity of each Eligible FMS Loan or Eligible FMS Advance
with respect to which amount thereof permitted by this part to be
prepaid is to be prepaid with the proceeds of the Private Loan;
    (4) Part IV of the prepayment application shall be all material
transaction documents, in substantially final form, relating to the
prepayment of the Total Permitted Prepayment Amount, or the portion
thereof which the Borrower has selected to prepay, with the proceeds of
the Private Loan; and
    (5) Part V of the prepayment application shall be the name, address,
and telephone number of the Borrower's contact person with whom the FFB
or DSAA will communicate to arrange for prepayment and closing.
    (b) Each prepayment application shall be submitted in triplicate to

[[Page 250]]

DSAA at the following address: Defense Security Assistance Agency, The
Pentagon, Washington, DC 20301-2800, Attention: Deputy Comptroller.
    (c) A Borrower wishing to obtain preliminary, nonbinding review of a
plan to prepay at par the Total Permitted Prepayment Amount, or any
portion thereof, may, at the Borrower's option, prior to submitting a
prepayment application in accordance with paragraph (a) of this section,
submit to DSAA, at the address set forth in paragraph (b) of this
section, a written plan of prepayment. To qualify for review, a plan of
prepayment must include a detailed description of the proposed financing
structure clearly addressing the terms and conditions of the proposed
Private Loan. DSAA will review each plan of prepayment submitted by
Borrowers and may engage in informal, non-binding discussions with each
Borrower that submitted a plan of prepayment to assist such Borrower in
preparing a prepayment application.



Sec. 25.301  Approval procedure.

    (a) Distribution, Review, and Processing by DSAA. (1) Upon receipt
of three copies of a completed prepayment application from a Borrower,
DSAA will promptly deliver one copy of Parts I and II of the prepayment
application to the State Department and one copy of Parts I, II, and V
of the prepayment application to the Treasury Department.
    (2) DSAA will review each completed prepayment application to ensure
that the Private Loan complies with the requirements of this part,
including without limitation the requirements of Sec. 25.400. DSAA will
also review each completed prepayment application to ensure that the
provisions of subsection (d) of the Act (Purposes and Reports) are
considered. DSAA will process each completed prepayment application
within 16 days after receipt by DSAA of the respective completed
application from a Borrower.
    (3) After DSAA has processed a completed prepayment application,
DSAA will either:
    (i) Return the application to the Borrower; or
    (ii) Deliver to the State Department written evidence of the
approval of the prepayment application by DSAA.
    (b) Review and Processing by the State Department. (1) The State
Department will review Parts I and II of each prepayment application
received by the State Department from DSAA to ensure that the provisions
of subsection (d) of the Act (Purposes and Reports) are considered. The
State Department will process Parts I and II of each prepayment
application within 7 days after receipt by the State Department of
written evidence of the approval of the prepayment application by DSAA.
    (2) After the State Department has processed Parts I and II of a
prepayment application, the State Department will either:
    (i) Return the parts of the application to DSAA for return to the
Borrower; or
    (ii) Deliver to the Treasury Department written evidence of the
approvals of the prepayment application by DSAA and the State
Department.
    (c) Processing by the Treasury Department--(1) FMS Loans held by
DSAA. (i) The Treasury Department will process Parts I and II of each
prepayment application regarding an Eligible FMS Loan made by DSAA or an
Eligible FMS Advance on account of an FMS Loan made by DSAA, as the case
may be, within 7 days after receipt by the Treasury Department of
written evidence of the approvals of the prepayment application by DSAA
and the State Department;
    (ii) After the Treasury Department has processed Parts I and II of a
prepayment application, the Treasury Department will return the parts of
the application to DSAA, and thereupon DSAA will commence the Closing
Procedures described in Sec. 25.303(a) with respect to the application.
    (2) FMS Loans held by the FFB. (i) The Treasury Department will
process Parts I and II of each prepayment application regarding an
Eligible FMS Loan made by the FFB and guaranteed by DSAA or an Eligible
FMS Advance on account of an FMS Loan made by the FFB and guaranteed by
DSAA, as the case may be, within 7 days after receipt by the Treasury
Department from the State Department of written evidence of the
approvals of the prepayment application by DSAA and the State
Department; and

[[Page 251]]

    (ii) After the Treasury Department has processed Parts I and II of a
prepayment application, the Treasury Department will commence the
Closing Procedures described in Sec. 25.303(b) with respect to the
application.



Sec. 25.302  Application withdrawal; effect of approval.

    A Borrower that submits a prepayment application may withdraw the
prepayment application at any time prior to its approval. Even after a
Borrower's prepayment application has been approved, the Borrower is not
obligated to prepay its Eligible FMS Loans or Eligible FMS Advances.



Sec. 25.303  Closing procedure.

    (a) FMS loans held by DSAA. (1) After the Treasury has processed
Parts I and II of a prepayment application regarding an Eligible FMS
Loan made by DSAA or an Eligible FMS Advance on account of an FMS Loan
made by DSAA, as the case may be, DSAA will communicate with the
Borrower's contact person identified in Part V of the prepayment
application to establish a Closing Date mutually agreeable to the
Borrower and DSAA. DSAA will inform the Borrower of the final amount of
the Total Permitted Prepayment Amount, or the portion thereof which the
Borrower has selected to prepay, as of the Closing Date established. The
determination by DSAA of the final amount of the Total Permitted
Prepayment Amount, or the portion thereof which the Borrower has
selected to prepay, shall be conclusive.
    (2) On the Closing Date, the Guaranty will be attached to the
Private Loan Note or the Private Loan Portion Notes, as the case may be,
the Private Loan shall be funded, and the Total Permitted Prepayment
Amount, or the portion thereof which the Borrower has selected to
prepay, will be prepaid.
    (3) The attachment of the Guaranty to the Private Loan Note or the
Private Loan Portion Notes, as the case may be, will take place at such
location as may be designated by the mutual agreement of the Borrower
and DSAA.
    (4) Prior to 1:00 p.m. prevailing local time in New York, New York,
on the Closing Date, immediately available funds in amounts sufficient
to prepay the Total Permitted Prepayment Amount, or the portion thereof
which the Borrower has selected to prepay, shall be transferred by
electronic funds transfer to DSAA at the Treasury Department account at
the Federal Reserve Bank of New York. The funds transfer message must
include the following credit information:

United States Treasury, New York, New York, 021030004, TREAS NYC/
(5037).
For credit to the Defense Security Assistance Agency, The Pentagon,
Washington, DC 20301-2800.


This information must be exactly in this form (including spacing between
words and numbers) to insure timely receipt by the DSAA. Checks, drafts,
and other orders for payment will not be accepted.
    (b) FMS Loans held by the FFB. (1) After the Treasury Department has
processed Parts I and II of a prepayment application regarding an
Eligible FMS Loan made by the FFB and guaranteed by DSAA or an Eligible
FMS Advance on account of an FMS Loan made by the FFB and guaranteed by
DSAA, as the case may be, the FFB will communicate with the Borrower's
contact person identified in Part V of the prepayment application to
establish a Closing Date mutually agreeable to the Borrower, the FFB,
and DSAA. The FFB will inform the Borrower of the final amount of the
Total Permitted Prepayment Amount, or the portion thereof which the
Borrower has selected to prepay, as of the Closing Date established. The
determination by the FFB of the final amount of the Total Permitted
Prepayment Amount, or the portion thereof which the Borrower has
selected to prepay, shall be conclusive.
    (2) On the Closing Date, the Guaranty will be attached to the
Private Loan Note or the Private Loan Portion Notes, as the case may be,
the Private Loan will be funded, and the Total Permitted Prepayment
Amount, or the portion thereof which the Borrower has selected to
prepay, will be prepaid.
    (3) The attachment of the Guaranty to the Private Loan Note or the
Private Loan Portion Notes, as the case

[[Page 252]]

may be, will take place at such location as may be designated by the
mutual agreement of the Borrower and DSAA.
    (4) Prior to 1:00 p.m. prevailing local time in New York, New York,
on the Closing Date, immediately available funds in amounts sufficient
to prepay at par the Permitted Prepayment Amount, or the portion thereof
which the Borrower has selected to prepay, shall be transferred by
electronic funds transfer to the Treasury Department account at the
Federal Reserve Bank of New York. The funds transfer message must
include the following credit information:

United States Treasury, New York, New York, 021030004, TREAS NYC/
(20180006).
For credit to the Federal Financing Bank, Room 143, Liberty Center
Building, 401 14th Street SW., Washington, DC 20227.


This information must be exactly in this form (including spacing between
words and numbers) to insure timely receipt by the FFB. Checks, drafts,
and others for payment will not be accepted.
    (c) Changes in the closing date. If a Borrower does not prepay the
Total Permitted Prepayment Amount or the portion thereof which the
Borrower has selected to prepay, on the mutually agreed upon Closing
Date, the Borrower may prepay the Total Permitted Prepayment Amount, or
the portion thereof which the Borrower has selected to prepay, on a new
Closing Date, provided that the new Closing Date is mutually agreeable
to all interested parties, and provided, further, that the Borrower
prepays such amount in accordance with the approved prepayment
application, adjusted for changes in accrued interest.



                     Subpart D_Form of Private Loan



Sec. 25.400  Loan provisions.

    (a) Subject to the provisions of paragraph (b) of this section, the
principal and interest payment schedule and maturity of the Private Loan
must be the same as the payment schedules and maturities of the Eligible
FMS Loans or Eligible FMS Advances, as the case may be, which the
Borrower has selected to prepay with the proceeds of the Private Loan.
    (b) Notwithstanding the preceding paragraph, an Eligible Private
Lender that proposes to make a Private Loan, the proceeds of which will
be used to prepay Eligible FMS Loans or Eligible FMS Advances, as the
case may be, having differing payment structures and maturities, may:
    (1) Consolidate the differing payment structures of the Eligible FMS
Loans or the Eligible FMS Advances, as the case may be, into a single
payment structure which complies with the following criteria:
    (i) The Private Loan shall have one set of semi-annual payment
dates;
    (ii) Interest on and principal of the Private Loan shall be payable
semi-annually; and
    (iii) The amount of principal to be paid each year on account of the
Private Loan shall be equal (rounded to the nearest $1,000.00 if
desired, except for the final payment) to the aggregate amount of
principal that is scheduled to be paid in such year on account of the
respective Eligible FMS Loans or Eligible FMS Advances; or
    (2) Consolidate the differing payment structures and maturities of
the Eligible FMS Loans or the Eligible FMS Advances, as the case may be,
into a single payment structure and maturity complying with the
following criteria:
    (i) The final maturity date of the Private Loan shall be the
approximate weighted average of the final maturity dates of the Eligible
FMS Loans or the Eligible FMS Advances with respect to which the
Borrower has selected to prepay amounts thereof permitted by this part
to be prepaid;
    (ii) The initial principal payment date of the Private Loan shall
occur no later than the earliest scheduled principal payment date of the
Eligible FMS Loans or the Eligible FMS Advances with respect to which
the Borrower has selected to prepay amounts thereof permitted by this
part to be prepaid;
    (iii) The Private Loan shall have one set of semi-annual payment
dates;
    (iv) Interest on the Private Loan shall be payable semi-annually;
and
    (v) The principal of the Private Loan shall be payable in equal
installments

[[Page 253]]

(rounded to the nearest $1,000.00 if desired, except for the final
payment) and shall be payable either semi-annually or annually.



Sec. 25.401  Fees.

    The interest rate on the Private Loan may include compensation for
costs at prevailing market rates with the agreement of the Borrower and
the Eligible Private Lender selected by the Borrower.



Sec. 25.402  Transferability.

    Each Private Loan Note, with the Guaranty attached, shall be fully
and freely transferable to any Permitted Guaranty Holder.



Sec. 25.403  Registration.

    The Guaranty shall cease to be effective with respect to the Private
Loan or any Private Loan Portion or any Derivative to the extent that
the Private Loan or the respective Private Loan Portion or the
respective Derivative, as the case may be, is used to provide
significant support for a Non-Registered Obligation.



Sec. 25.404  Non-separability.

    (a) The Guaranty shall cease to be effective with respect to any
Guaranteed Loan Amount or any Guaranteed Loan Portion Amount or any
Guaranteed-Amount Equivalent to the extent that:
    (1) The Guaranteed Amount or the respective Guaranteed Loan Portion
Amount or the respective Guaranteed-Amount Equivalent, as the case may
be, is separated at any time from the Unguaranteed Loan Amount or the
respective Unguaranteed Loan Portion Amount or the respective
Unguaranteed-Amount Equivalent, as the case may be, in any way, directly
or through the issuance of any Guaranteed-Amount Equity Derivative or
any Guaranteed-Amount Debt Derivative; or
    (2) Any holder of the Private Loan Note or any Private Loan Portion
Note or any Derivative, as the case may be, having a claim to payments
on the Private Loan receives more than 90 percent of any payment due to
such holder from payments made under the Guaranty at any time during the
term of the Private Loan.
    (b) Notwithstanding the preceding paragraph, if any Guaranteed-
Amount Debt Derivative is issued, the Guaranty shall not cease to be
effective with respect to any Guaranteed Loan Amount or any Guaranteed
Loan Portion Amount or any Guaranteed-Amount Equivalent, as the case may
be, if both of the circumstances described in paragraphs (b)(1) and
(b)(2) of this section.
    (1) A Borrower shall have delivered to the Secretary of the treasury
evidence, in form and substance satisfactory to the Secretary of the
Treasury, that the Interest Rate Difference will be substantial.
    (i) To be considered, the evidence must meet the following
requirements:
    (A) The Borrower must show that the Interest Rate Difference is
directly attributable to paragraph (a) of this section being applied to
the Private Loan, that is, that the Interest Rate Difference will exist
even when all other financing terms of the Private Loan, including any
collateralization of the Unguaranteed Loan Amount or the respective
Unguaranteed Loan Portion Amount or the respective Unguaranteed-Amount
Equivalent, as the case may be, are identical;
    (B) When calculating the Interest Rate Difference, the Borrower must
assume that the Unguaranteed Loan Amount or the respective Unguaranteed
Loan Portion Amount or the respective Unguaranteed-Amount Equivalent, as
the case may be, will be collateralized by securities backed by the full
faith and credit of the United States, unless the Borrower is legally
prohibited from so collateralizing the Unguaranteed Loan Amount or the
respective Unguaranteed Loan Portion Amount or the respective
Unguaranteed-Amount Equivalent, as the case may be, or the Borrower has
demonstrated to the satisfaction of the Secretary of the Treasury that
the Borrower is unable to so collateralize the Unguaranteed Loan Amount
or the respective Unguaranteed Loan Portion Amount or the respective
Unguaranteed-Amount Equivalent;
    (C) If the Borrower is legally prohibited from collateralizing the
Unguaranteed Loan Amount or the respective Loan Guaranteed Portion

[[Page 254]]

Amount or the respective Unguaranteed-Amount Equivalent, as the case may
be, with securities backed by the full faith and credit of the United
States or has demonstrated to the satisfaction of the Secretary of the
Treasury that the Borrower is unable to so collateralize the
Unguaranteed Loan Amount or the respective Unguaranteed Loan Portion
Amount or the respective Unguaranteed-Amount Equivalent, as the case may
be, then the Borrower may calculate the Interest Rate Difference using
whatever collateralization assumptions the Borrower elects;
    (D) If the Borrower delivers evidence to the Secretary of the
Treasury respecting the Interest Rate Difference, which evidence assumes
either that the Unguaranteed Loan Amount or the respective Unguaranteed
Loan Portion Amount or the respective Unguaranteed-Amount Equivalent, as
the case may be, will not be collateralized at all or that the
Unguaranteed Loan Amount or the respective Unguaranteed Loan Portion
Amount or the respective Unguaranteed-Amount Equivalent, as the case may
be, will be collateralized, but not by securities backed by the full
faith and credit of the United States, then the Borrower must also
deliver to the Secretary of the Treasury the written agreement of the
Borrower, which agreement shall be in form and substance satisfactory to
the Secretary of the Treasury, that the Borrower will not collateralize
the Unguaranteed Loan Amount or the respective Unguaranteed Loan Portion
Amount or the respective Unguaranteed-Amount Equivalent, as the case may
be, at any time during the term of the Private Loan in any way different
from the assumptions used in calculating the Interest Rate Difference;
and
    (E) The Borrower must deliver to the Secretary of the Treasury the
evidence pertaining to the Interest Rate Difference at the time that the
Borrower submits to DSAA its plan for prepayment, if any, if no plan of
prepayment is submitted, then no later than 10 days prior to the time
that the Borrower submits to DSAA its prepayment application.
    (ii) If the Secretary of the Treasury determines that the evidence
submitted by the Borrower pertaining to the Interest Rate Difference is
satisfactory in form and in substance, and that the Interest Rate
Difference is substantial, a modified version of the Guaranty (deleting
therefrom the provision that the Guaranty shall cease to be effective if
any Guaranteed-Amount Debt Derivative is issued) will be attached to the
Private Loan Note or the Private Loan Portion Notes, as the case may be.
    (2) The Secretary of the Treasury shall have determined, in the sole
discretion of the Secretary of the Treasury, that the respective
Borrower's loan prepayment at par pursuant to subsection (a) of the Act
through the issuance of any Guaranteed-Amount Debt Derivative is
necessary to achieve the international economic policy interests of the
United States.



Sec. 25.405  Form of guaranty.

    (a) The Guaranty that will be attached to the Private Loan Note on
the Closing Date shall be in the following form (except that the
bracketed words shall be deleted if the conditions specified in Sec.
25.404(b) shall have occurred):

    For Value Received, the Defense Security Assistance Agency of the
Department of Defense (``DSAA''), hereby guarantees to (Name of Lender)
(``Lender''), incorporated under the laws of (U.S. State or other U.S.
jurisdiction) or if not so incorporated or organized, then the principal
place of doing business is (U.S. location, address, and zip code), under
the authority of Section 24 of the Arms Export Control Act, as amended
(``Act''), the due and punctual payment of ninety percent (90%) of
amounts due: (1) on the promissory note (``Note'') in the principal
amount of up to $------ dated ------ issued to the Lender by the
Government of (Name of Borrower) (``Borrower'') pursuant to the Loan
Agreement between the Lender and the Borrower dated the ----th day of --
---- (``Agreement''); and (2) the Lender from the Borrower pursuant to
the Agreement.
    This Guaranty is a guaranty of payment covering all political and
credit risks of nonpayment, including any nonpayment arising out of any
claim which the Borrower may now or hereafter have against any person,
corporation, or other entity (including without limitation, the United
States, the Lender, and any supplier of defense items) in connection
with any transaction, for any reason whatsoever. This Guaranty shall
inure to the

[[Page 255]]

benefit of and shall be enforceable by the Lender and any Permitted
Guaranty Holder (as hereinafter defined). This Guaranty shall not be
impaired by any law, regulation or decree of the Borrower now or
hereafter in effect which might in any manner change any of the terms of
the Note or Agreement. The obligation of DSAA hereunder shall be binding
irrespective of the irregularity, invalidity or unenforceability under
any laws, regulations or decrees of the Borrower of the Note, the
Agreement or other instruments related thereto.
    DSAA hereby waives diligence, demand, protest, presentment and any
requirement that the Lender exhaust any right or power to take any
action against the Borrower and any notice of any kind whatsoever other
than the demand for payment required to be given to DSAA hereunder in
the event of default on a payment due under the Note.
    In the event of failure of the Borrower to make payment, when and as
due, of any installment of principal or interest under the Note, the
DSAA shall make payment immediately to the Lender upon demand to the
DSAA after the Borrower's failure to pay has continued for 10 calendar
days. The amount payable under this Guaranty shall be ninety percent
(90%) of the amount of the overdue installment of principal and
interest, plus ninety percent (90%) of any and all late charges and
interest thereon as provided in the Agreement. Upon payment by DSAA to
the Lender, the Lender will assign to DSAA, without recourse or
warranty, ninety percent (90%) of all of its rights in the Note and the
Agreement with respect to such payment.
    In the event of a default under the Agreement or the Note by the
Borrower and so long as this Guaranty is in effect and the DSAA is not
in default hereunder:
    (i) The Lender or other Permitted Guaranty Holder shall not
accelerate or reschedule payment of the principal or interest on the
Note or any other note of the Borrower guaranteed by DSAA except with
the written approval of DSAA; and
    (ii) The Lender or other Permitted Guaranty Holder shall, if so
directed by DSAA, invoke the default provisions of the Agreement.
    Subject to the limitations set forth below, the Lender's rights
under this Guaranty may be assigned to any ``Permitted Guaranty
Holder,'' that is: (1) An individual domiciled in the United States; (2)
a corporation incorporated, chartered or otherwise organized in the
United States; or (3) a partnership or other juridical entity doing
business in the United States. In the event of such assignment DSAA
shall be promptly notified. The Lender will not agree to any material
amendment of the Agreement or Note or consent to any material deviation
from the provisions thereof without the prior written consent of DSAA.
    Permitted Guaranty Holders shall be severally bound by, and shall be
severally entitled to, the rights and obligations of the Lender under
the Note, the Agreement, and this Guaranty. The Lender shall maintain a
current, accurate written record of the names, addresses, amount of
financial interest in the Note and Agreement, and date of acquisition of
such interest of each Permitted Guaranty Holder and shall furnish DSAA a
copy of such record on its demand without charge. No assignment by the
Lender or by any Permitted Guaranty Holder shall be effective for
purposes of this Guaranty unless and until so recorded by the Lender.
    The total amount of this Guaranty shall not at any time exceed
ninety percent (90%) of the outstanding principal, unpaid accrued
interest and arrearages, if any, under the Agreement and the Note,
including any portion of the Note, or any derivative of the Note or any
portion of the Note.
    This Guaranty shall cease to be effective with respect to the
guaranteed amount of the total amount of the Note (the ``Guaranteed Loan
Amount'') or with respect to the guaranteed amount of any portion of the
Note (the ``Guaranteed Loan Portion Amount'') [or with respect to the
amount of any derivative or derivatives of the Note or any portion of
the Note equal, or in the aggregate equal, in principal amount to the
total amount of the Note or such portion of the Note, as the case may
be, which amount of such derivative or derivatives is equal to the
respective Guaranteed Loan Amount or Guaranteed Loan Portion Amount, as
the case may be (the ``Guaranteed-Amount Equivalent'')] to the extent
that (1) the Guaranteed Loan Amount or the respective Guaranteed Loan
Portion Amount [or the respective Guaranteed-Amount Equivalent], as the
case may be, is at any time separated from the unguaranteed amount of
the total amount of the Note or the unguaranteed amount of the
respective portion of the Note [or the amount of such derivative or
derivatives of the Note which is not the amount which is equal to the
Guaranteed Loan Amount or Guaranteed Loan Portion Amount, as the case
may be], in any way, (a) directly, or (b) through the issuance of
participation shares of, or undivided ownership or other equity
interests in, the Note, or any portion of the Note, or any derivative of
the Note or any portion of the Note, which have an exclusive or
preferred claim to the Guaranteed Loan Amount or the respective
Guaranteed Loan Portion Amount [or the respective Guaranteed-Amount
Equivalent], as the case may be [or (c) through the issuance of

[[Page 256]]

notes, bonds or other debt instruments or obligations which are
collateralized or otherwise secured by a pledge of, or security interest
in, the Note, or any portion of the Note or any derivative of the Note
or any portion of the Note, which has an exclusive or preferred claim to
the Guaranteed Loan Amount or the respective Guaranteed Loan Portion
Amount or the respective Guaranteed-Amount Equivalent, as the case may
be]; or (2) any holder of the Note, or any portion of the Note, or any
derivative of the Note or any portion of the Note, as the case may be,
having claim to payment made on the Note, receives more than ninety
percent of any payment due to such holder from payments made under this
Guaranty at any time during the term of the Note or the Agreement.
    This Guaranty is fully and freely transferable to any Permitted
Guaranty Holder, except that it shall cease to be effective with respect
to the Agreement or the Note, or any portion of the Note, or any
derivative of the Note or any portion of the Note, to the extent that
the Agreement or the Note, or the respective portion of the Note, or the
respective derivative of the Note or any portion of the Note, as the
case may be, is used to provide significant support for any non-
registered obligation.
    The full faith and credit of the United States is pledged to the
performance of this Guaranty. No claim which the United States may now
or hereafter have against the Lender or any Permitted Guaranty Holder
for any reason whatsoever shall affect in any way the right of the
Lender or any Permitted Guaranty Holder to receive full and prompt
payment of any amount otherwise due under this Guaranty. The United
States represents and warrants that (a) it has full power, authority and
legal right to execute, deliver and perform this Guaranty, (b) this
Guaranty has been executed in accordance with and pursuant to the terms
and provisions of section 24 of the Act, the provisions of the Foreign
Operations, Export Financing, and Related Programs Appropriations Act,
1988, under the hearing ``Foreign Military Sales Debt Reform,'' and
title 31, part 25, of the Code of Federal Regulations, (c) this Guaranty
has been duly executed and delivered by a duly authorized representative
of DSAA, and (d) this Guaranty constitutes the valid and legally binding
obligations of the United States, enforceable in accordance with the
terms hereof.
    Any notice, demand, or other communication hereunder shall be deemed
to have been given if in writing and actually delivered to the
Comptroller, DSAA, the Pentagon, Washington, DC 20301-2800, or the
successor, or such other place as may be designated in writing by the
Comptroller, DSAA or the successor thereof.
    By acceptance of the Note, the Lender agrees to the terms and
conditions of this Guaranty.

Dated:__________________________________________________________________

By:_____________________________________________________________________
    Director, DSAA.

    (b) The obligations of DSAA under the Guaranty are expressly limited
to those obligations contained in the form of Guaranty set forth in
paragraph (a) of this section. Any provisions of any agreement relating
to the Private Loan purporting to create obligations on the part of DSAA
which are inconsistent with the terms of the Guaranty or any other
provision of this part be unenforceable against DSAA.



Sec. 25.406  Savings clause.

    Nothing in this rule is intended to authorize any person or entity
to engage in any activity not otherwise authorized or permitted for such
person or entity under any applicable laws of the United States, any
territory or possession of the United States, any State, or the District
of Columbia.



PART 26_ENVIRONMENTAL REVIEW OF ACTIONS BY MULTILATERAL DEVELOPMENT
BANDS (MDBs)--Table of Contents



Sec.
26.1 Purpose.
26.2 Availability of project listings.
26.3 Availability of Environmental Impact Assessment Summaries (EIA
          Summaries) and Environmental Impact Assessments (EIAs).
26.4 Comments on MDB projects.
26.5 Upgrades and additional environmental information.

    Authority: 22 U.S.C. 262m-7, 31 U.S.C. 321.

    Source: 57 FR 24545, June 10, 1992, unless otherwise noted.



Sec. 26.1  Purpose.

    This part prescribes procedures for the environmental review of, and
comment by Federal agencies and the public on, proposed projects of
multilateral development banks (MDBs).



Sec. 26.2  Availability of project listings.

    (a) The Office of Multilateral Development Banks of the Department
of the Treasury (hereinafter ``MDB Office'') will ensure that the
Environmental Protection Agency (EPA), the

[[Page 257]]

Council on Environmental Quality (CEQ), the Department of State, the
Agency for International Development (AID), the National Oceanic and
Atmospheric Administration (NOAA), and the Bank Information Center (BIC)
(which is a private, nongovernmental organization located in Washington,
DC), receive copies from each multilateral development bank (MDB) of
project listings describing future MDB projects and assigning
environmental categories based on the environmental impact of each
project. If an MDB has not provided a project listing to one of these
entities, these entities may obtain the project listing by contacting
the MDB Office, 1500 Pennsylvania Avenue NW., Washington, DC 20220,
(202) 622-0765.
    (b)(1) Members of the public may obtain copies of project listings
from the BIC, 2025 Eye Street NW., suite 522, Washington, DC 20006
((202) 466-8191, not a toll-free call).
    (2) If a copy is not available from the BIC, members of the public
may arrange to review and/or copy a project listing by contacting the
MDB Office which will make a copy available at the Department of the
Treasury Library, 1500 Pennsylvania Avenue NW., Washington, DC ((202)
622-0990, not a toll-free call). Members of the public are advised that
they must make an appointment with the Treasury Library before they
visit and that a charge (currently 15 cents per page) is imposed for the
use of the library photocopier.



Sec. 26.3  Availability of Environmental Impact Assessment Summaries
(EIA Summaries) and Environmental Impact Assessments (EIAs).

    (a) EIA summaries. (1) The MDB Office will provide for the
distribution of EIA Summaries to the entities identified in section
26.2(a).
    (2) (i) Members of the public may obtain copies of EIA Summaries
from the BIC, 2025 Eye Street, NW., suite 522, Washington, DC 20006
((202) 466-8191, not a toll-free call).
    (ii) If a copy of an EIA Summary is not available from the BIC,
members of the public may arrange to review and/or copy an EIA Summary
by contacting the MDB Office at (202) 622-0765 (not a toll-free call),
which will make a copy available at the Department of the Treasury
Library, 1500 Pennsylvania Avenue NW., Washingon, DC. Members of the
public are advised that they must make an appointment with the Treasury
Library (202) 622-0990) before they visit, and that a charge (currently
15 cents per page) is imposed for the use of the library photocopier. To
the extent possible, EIA Summaries will be available for review and
copying at least 120 days before scheduled consideration of a project by
the MDB Executive Directors.
    (b) EIAs--(1) The African Development Bank, the European Bank for
Reconstruction and Development, and the Asian Development Bank.
Arrangements to review an EIA may be made by contacting the MDB Office
((202) 622-0765 (not a toll-free call)), which will obtain a copy of the
EIA through the Office of the United States Executive Director of the
appropriate MDB and make it available for review and copying in the
Department of the Treasury Library. Members of the public are advised
that they must make an appointment with the Treasury Library, ((202)
622-0900 (not a toll-free call), before they visit, and that a charge
(currently 15 cents per page) is imposed for the use of the library
photocopier.
    (2) The International Bank for Reconstruction and Development, the
International Development Association, and the Inter-American
Development Bank. (i) Members of the public may review EIAs at the
public reading room of the concerned MDB.
    (ii) If a particular MDB does not have a public reading room,
members of the public may arrange to review and/or copy an EIA by
contacting the MDB Office ((202) 622-0765 (not a toll-free call)), which
will obtain a copy through the Office of the United States Executive
Director of the concerned MDB and make it available in the Department of
the Treasury Library, 1500 Pennsylvania Avenue NW., Washington, DC.
Members of the public are advised that they must make an appointment
with the Treasury Library ((202) 622-0990 not a toll-free call) before
they visit, and that a charge (currently 15 cents per page) is imposed
for the use of the library photocopier.

[[Page 258]]



Sec. 26.4  Comments on MDB projects.

    (a) Public comments--(1) Written comments (i) A member of the public
wishing to provide written comments on a MDB project must provide 2
copies of the comments to the Office of Multilateral Development Banks,
U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW., room
5400, Washington, DC 20220. Written comments should be submitted not
later than two weeks after the member of the public has access to the
particular document on which it wishes to offer comments--either the
project listing, the EIA Summary, or the EIA for a particular project.
Written public comments will be provided by the MDB Office to the U.S.
Government agencies participating in meetings of the Working Group for
Multilateral Assistance (WGMA), which meetings are described in Sec.
26.4(c). The WGMA is an intergovernmental subcommittee of the
Development Coordination Committee whose functions are set forth in the
Presidential announcement of May 19, 1978, Vol. 14, No. 20, p. 932 of
the Weekly Compilation of Presidential Documents. The WGMA meets to
discuss the U.S. position on upcoming MDB projects.
    (ii) All written comments will be available for inspection and
copying in their entirety in the Department of the Treasury Library,
1500 Pennsylvania Avenue NW., Washington, DC ((202) 622-0990). Members
of the public are advised that they must make an appointment with the
Treasury Library before they visit, and that a charge (currently 15
cents per page) is imposed for the use of the library photocopier.
    (2) Oral comments. Oral comments from a member of the public may be
made in periodic meetings convened by the BIC. Information concerning
these meetings may be obtained by contacting the BIC or the MDB Office.
The MDB Office will summarize and present such comments in the WGMA
meetings described in Sec. 26.4(c).
    (b) U.S. agency comments. Comments from U.S. agencies shall be
provided through the WGMA.
    (c) Consideration of comments. The WGMA will consider all comments
made by the public and U.S. agencies. The WGMA may review a project up
to three times. The first review will consider whether the project has
been assigned the appropriate environmental category by the MDB. This
review will take place as far in advance as possible of Board
consideration of the project. The second review will consider the EIA
Summary or the EIA (or information discussed in Sec. 26.5(b)(1)), and
comments received from the public on such documentation. The third WGMA
review, which will take place shortly before Board consideration of the
project, will consider the position of the U.S. Government on the
project.



Sec. 26.5  Upgrades and additional environmental information.

    (a) Environmental category upgrades. If the WGMA and the Department
of the Treasury determine that a project would have a significant impact
on the human environment, but that the level of environmental analysis
planned by the MDB is insufficient, the Department of the Treasury will
instruct the United States Executive Director of the concerned MDB to
request that the MDB upgrade the project to an environmental category
requiring additional environmental analysis. Members of the public may
call the MDB Office to inquire about upgrade requests for specific
projects.
    (b) Additional environmental information. (1) If the WGMA and the
Department of the Treasury determine on the basis of the first WGMA
review that:
    (i) A MDB project would have a significant impact on the human
environment, and
    (ii) The MDB appears to have made an appropriate decision that such
project merits environmental analysis, but less than a full-fledged
environmental impact assessment as defined by that MDB's own procedures,
the Department of the Treasury will obtain, through the United States
Executive Director of the concerned MDB, such environmental information
from the MDB (e.g., environmental chapters from project feasibility
studies or environmental data sheets) which contains this environmental
analysis. The MDB Office will provide this environmental information to
the entities described in Sec. 26.2(a).

[[Page 259]]

    (2) If such environmental information is insufficient to provide an
adequate basis for analyzing the environmental impact of the proposed
project and alternatives to the proposed project, the Department of the
Treasury will instruct the United States Executive Director of the
concerned MDB not to vote in favor of the project.



PART 27_CIVIL PENALTY ASSESSMENT FOR MISUSE OF DEPARTMENT OF THE
TREASURY NAMES, SYMBOLS, ETC.--Table of Contents



Sec.
27.1 Purpose.
27.2 Definitions.
27.3 Assessment of civil penalties.
27.4 Factors to be considered.
27.5 Initial Notice of Assessment.
27.6 Written response.
27.7 Final Notice of Assessment.
27.8 Judicial review.

    Authority: 31 U.S.C. 321, 333.

    Source: 62 FR 42213, Aug. 6, 1997, unless otherwise noted.



Sec. 27.1  Purpose.

    (a) The regulations in this part implement the provisions of 31
U.S.C. 333(c), which authorizes the Secretary of the Treasury to assess
a civil penalty against any person who has misused the words, titles,
abbreviations, initials, symbols, emblems, seals, or badges of the
Department of the Treasury or any subdivision thereof in violation of 31
U.S.C. 333(a), in accordance with that section and this part.
    (b) The regulations in this part do not apply to the extent that the
Secretary or his/her designee has specifically authorized the person to
manufacture, produce, sell, possess, or use the words, titles,
abbreviations, initials, symbols, emblems, seals, or badges by written
contract, agreement, or letter.



Sec. 27.2  Definitions.

    (a) The term ``assessing official'' means:
    (1) The head of a bureau or other subdivision of the Department of
the Treasury who has been delegated the authority to assess civil
penalties under 31 U.S.C. 333(c); or
    (2) An officer or employee of a bureau or subdivision at the grade
of GS-15 or above to whom such authority has been redelegated by the
head of such bureau or subdivision.
    (b) The term ``broadcast'' or ``telecast'' mean widespread
dissemination by electronic transmission or method, whether audio and/or
visual.
    (c) The term ``civil penalty'' means:
    (1) A civil monetary penalty; and
    (2) Any other civil or equitable remedy deemed necessary to rectify
the potential for a continued misuse or harm from an activity found to
have been in violation of 31 U.S.C. 333 or this part.
    (d) The term ``date of offense'' means the later of--
    (1) The date that the misuse occurred;
    (2) The date that the misuse had the effect of conveying the false
impression that the activity was associated with or approved, endorsed,
sponsored or authorized by the Department or any of its subdivisions or
officers or employees; or
    (3) If the violation is a continuing one, the date on which the
misuse of the words, titles, abbreviations, initials, symbols, emblems,
seals, or badges protected by this part last occurred.
    (e) The term ``days'' means calendar days, unless otherwise stated.
    (f) The term ``person'' means an individual, partnership,
association, corporation, company, business, firm, manufacturer, or any
other organization or institution.



Sec. 27.3  Assessment of civil penalties.

    (a) General Rule. An assessing official may impose a civil penalty
on any person--
    (1) Who uses in connection with, or as a part of, any advertisement,
solicitation, business activity, or product, whether alone or with other
words, letters, symbols, or emblems;
    (i) The words ``Department of the Treasury,'' ``United States Secret
Service,'' ``United States Customs Service,'' ``Internal Revenue
Service,'' ``Bureau of Alcohol, Tobacco and Firearms,'' ``Bureau of the
Public Debt,'' ``Bureau of Engraving and Printing,'' ``Comptroller of
the Currency,'' ``Federal Law

[[Page 260]]

Enforcement Training Center,'' ``Financial Crimes Enforcement Network,''
``United States Mint,'' or the name of any service, bureau, office, or
other subdivision of the Department of the Treasury;
    (ii) The titles ``Secretary of the Treasury,'' ``Treasurer of the
United States,'' ``Director of the Secret Service,'' ``Commissioner of
Customs,'' ``Commissioner of Internal Revenue,'' ``Director, Bureau of
Alcohol, Tobacco and Firearms,'' ``Commissioner of the Public Debt,''
``Director of the Bureau of Engraving and Printing,'' ``Comptroller of
the Currency,'' ``Director of the Federal Law Enforcement Training
Center,'' ``Director of the Financial Crimes Enforcement Network,''
``Director of the United States Mint,'' or the title of any other
officer or employee of the Department of the Treasury or subdivision
thereof;
    (iii) The abbreviations or initials of any entity or title referred
to in paragraph (a)(1)(i) or (a)(1)(ii) of this section, including but
not limited to ``USSS,'' ``USCS,'' ``IRS,'' ``ATF,'' or ``BATF,''
``BPD,'' ``FLETC,'' ``FINCEN'' or ``FinCEN,''and ``SBMO'';
    (iv) The words ``United States Savings Bond,'' including any
variation thereof, or the name of any other security, obligation, or
financial instrument issued by the Department of the Treasury or any
subdivision thereof;
    (v) Any symbol, emblem, seal, or badge of an entity referred to in
paragraph (a)(1)(i) of this section (including the design of any
envelope, stationery, or identification card used by such an entity); or
    (vi) Any colorable imitation of any such words, titles,
abbreviations, initials, symbol, emblem, seal, or badge; and
    (2) Where such use is in a manner that could reasonably be
interpreted or construed as conveying the false impression that such
advertisement, solicitation, business activity, or product is in any
manner approved, endorsed, sponsored, or authorized by, or associated
with the Department of the Treasury or any entity referred to in
paragraph (a)(1)(i) of this section, or any officer, or employee
thereof.
    (b) Disclaimers. Any determination of whether a person has violated
the provisions of paragraph (a) of this section shall be made without
regard to any use of a disclaimer of affiliation with the United States
Government or any particular agency or instrumentality thereof.
    (c) Civil Penalty. An assessing official may impose a civil penalty
on any person who violates the provisions of paragraph (a) of this
section. The amount of a civil monetary penalty shall not exceed $5,000
for each and every use of any material in violation of paragraph (a),
except that such penalty shall not exceed $25,000 for each and every use
if such use is in a broadcast or telecast.
    (d) Time Limitations. (1) Civil penalties imposed under this part
must be assessed before the end of the three year period beginning on
the date of offense charged.
    (2) An assessing official may commence a civil action to recover or
enforce any civil penalty imposed in a Final Notice of Assessment issued
pursuant to Sec. 27.7 at any time before the end of the two year period
beginning on the date of the Final Notice of Assessment. If judicial
review of the Final Notice of Assessment is sought, the two year period
begins to run from the date that a final and unappealable court order is
issued.
    (e) Criminal Proceeding. No civil penalty may be imposed under this
part with respect to any violation of paragraph (a) of this section
after a criminal proceeding on the same violation has been commenced by
indictment or information under 31 U.S.C. 333(d).



Sec. 27.4  Factors to be considered.

    The assessing official will consider relevant factors when
determining whether to assess or impose a civil penalty under this part,
and the amount of a civil monetary penalty. Those factors may include,
but are not limited to, the following:
    (a) The scope of the misuse;
    (b) The purpose and/or nature of the misuse;
    (c) The extent of the harm caused by the misuse;
    (d) The circumstances of the misuse; and
    (e) The benefit intended to be derived from the misuse.

[[Page 261]]



Sec. 27.5  Initial Notice of Assessment.

    The assessing official shall serve an Initial Notice of Assessment
by United States mail or other means upon any person believed to be in
violation of Sec. 27.3 and otherwise subject to a civil penalty. The
notice shall provide the name and telephone number of an agency officer
or employee who can provide information concerning the notice and the
provisions of this part, and shall include the following:
    (a) A specific reference to the provisions of Sec. 27.3 violated;
    (b) A concise statement of the facts that support the conclusion
that such a violation occurred;
    (c) The amount of the penalty proposed, and/or any other proposed
civil or equitable remedy;
    (d) A notice informing the person alleged to be in violation of
Sec. 27.3 that he/she:
    (1) May, within 30 days of the date of the notice, pay the proposed
civil monetary penalty and consent to each proposed civil or equitable
remedy, thereby waiving the right to make a written response under Sec.
27.6 and to seek judicial review under Sec. 27.8:
    (i) By electronic funds transfer (EFT) in accordance with
instructions provided in the notice, or
    (ii) By means other than EFT only with the written approval of the
assessing official;
    (2) May make a written response within 30 days of the date of the
notice asserting, as appropriate:
    (i) Why a civil monetary penalty and/or other civil or equitable
remedy should not be imposed;
    (ii) Why a civil monetary penalty should be in a lesser amount than
proposed; and
    (iii) Why the terms of a proposed civil or equitable remedy should
be modified;
    (3) May be represented by an attorney or other representative,
provided that a designation of representative signed by the person
alleged to be in violation is received by the assessing official; and
    (4) May request, within 20 days of the date of the notice, a copy of
or opportunity to review any documents and/or other evidence compiled
and relied on by the agency in determining to issue the notice (the
assessing official reserves the right to assert privileges available
under law and may decline to disclose certain documents and/or other
evidence); and
    (e) The Initial Notice of Assessment shall also inform the person
that:
    (1) If no written response is received within the time allowed in
Sec. 27.6(b), a Final Notice of Assessment may be issued without a
presentation by the person;
    (2) If a written response has been made and it is deemed necessary,
the assessing official may request, orally or in writing, additional
information from the respondent;
    (3) A Final Notice of Assessment may be issued in accordance with
Sec. 27.7 requiring that the civil monetary penalty be paid and
compliance with the terms of any other civil or equitable remedy;
    (4) A Final Notice of Assessment is subject to judicial review in
accordance with 5 U.S.C. 701 et seq.; and
    (5) All submissions sent in response to the Initial
    Notice of Assessment must be transmitted to the address specified in
the notice and include the name, address, and telephone number of the
respondent.



Sec. 27.6  Written response.

    (a)(1) A person served with an Initial Notice of Assessment may make
a written response explaining why the civil penalty should not be
imposed, explaining why a civil monetary penalty should be in a lesser
amount than proposed and/or explaining why the terms of a proposed civil
or equitable remedy should be modified. The written response must
provide:
    (i) A reference to and specifically identify the Initial Notice of
Assessment involved;
    (ii) The full name of the person charged;
    (iii) If not a natural person, the name and title of the head of the
organization charged; and
    (iv) If a representative of the person charged is filing the written
response, a copy of the duly executed designation as representative.
    (2) The written response must admit or deny each violation of Sec.
27.3 charged

[[Page 262]]

in the Initial Notice of Assessment. Any charge not specifically denied
will be presumed to be admitted. Where a charge is denied, the
respondent shall specifically set forth the legal or factual basis upon
which the charge is denied. If the basis of the written response is that
the person charged is not the person responsible for the misuse(s)
charged, the written response must set forth sufficient information to
allow the agency to determine the truth of such an assertion. The
written response should include any and all documents and/or other
information that the respondent believes should be a part of the
administrative record on the matter.
    (b) Time. (1) Except as provided in paragraph (b)(2) of this
section, any written response made under this paragraph must be received
not later than 30 days after the date of the Initial Notice of
Assessment.
    (2) If a request for documents or other evidence is made pursuant to
Sec. 27.5(d)(4), the written response must be received not later than
20 days after the date of the Department's response to the request.
    (3)(i) In computing the number of days allowed for filing a written
response under this paragraph, the first day counted is the day after
the date of the Initial Notice of Assessment. If the last date on which
the response is required to be filed by this paragraph is a Saturday,
Sunday or Federal holiday, the response will be due on the next weekday
after that date.
    (ii) If a response is transmitted by United States mail, it will be
deemed timely filed if postmarked on or before the due date.
    (4) The assessing official may extend the period for making a
written response under paragraphs (b)(1) and (b)(2) for good cause
shown. Generally, failure to obtain representation in a timely manner
will not be considered good cause.
    (c) Filing. A written response will be considered filed on the date
received at the address specified in the Initial Notice of Assessment.
The response may be sent by personal delivery, United States mail or
commercial delivery. At the discretion of the assessing official, filing
may be accomplished by facsimile or any other method deemed appropriate.
    (d) The assessing official will fully consider the facts and
arguments submitted by the respondent in the written response and any
other documents filed pursuant to this paragraph in determining whether
to issue a Final Notice of Assessment under Sec. 27.7, the appropriate
amount of the civil monetary penalty imposed and the terms of any other
appropriate civil or equitable remedy.



Sec. 27.7  Final Notice of Assessment.

    (a) In making a final determination whether to impose a penalty, the
assessing official shall take into consideration all available
information in the administrative record on the matter, including all
information provided in or with a written response timely filed by the
respondent and any additional information provided pursuant to Sec.
27.5(e)(2). The assessing official will determine whether:
    (1) The facts warrant a conclusion that no violation has occurred;
or
    (2) The facts warrant a conclusion that one or more violations have
occurred; and
    (3) The facts and violations found justify the conclusion that a
civil penalty should be imposed.
    (b) If the assessing official determines that no violation has
occurred, the official shall promptly send a letter indicating that
determination to the person served with an Initial Notice of Assessment
and to any designated representative of such person.
    (c)(1) If it has been determined that a violation has occurred, the
assessing official shall issue a Final Notice of Assessment to the
person served with an Initial Notice of Assessment and to any designated
representative of such person.
    (2) The assessing official may, in his/her discretion:
    (i) Impose a civil monetary penalty and/or any civil or equitable
remedy deemed necessary to rectify the potential for a continued misuse
or harm from the violation(s);
    (ii) Not impose a civil monetary penalty and/or civil or equitable
remedy; or

[[Page 263]]

    (iii) Impose a civil monetary penalty and/or civil or equitable
remedy and condition payment of the civil monetary penalty on the
violator's future compliance with 31 U.S.C. 333, this part and any civil
or equitable remedy contained in the Final Notice of Assessment. If a
civil monetary penalty is imposed, the assessing official shall
determine the appropriate amount of the penalty in accordance with 31
U.S.C. 333(c)(2).
    (3) The Final Notice of Assessment shall:
    (i) Include:
    (A) A specific reference to the provisions of Sec. 27.3 found to
have been violated;
    (B) A concise statement of the facts warranting a conclusion that a
violations has occurred;
    (C) An analysis of how the facts and violation(s) justify the
conclusion that a civil monetary penalty and/or civil or equitable
remedy should be imposed; and
    (D) The amount of each civil monetary penalty imposed, a statement
as to how the amount of each penalty was determined, and the terms of
any civil or equitable remedy deemed necessary to rectify the potential
for a continued misuse or harm from the violation(s); and
    (ii) Inform the person that:
    (A) Payment of a civil monetary penalty imposed by the Final Notice
of Assessment must be made within 30 days of the date of the notice, and
that any civil or equitable remedy imposed must be complied with as
provided in the Final Notice of Assessment;
    (B) Payment of a civil monetary penalty imposed by the Final Notice
of Assessment shall be by EFT in accordance with instructions provided
in the notice, unless the assessing official has given written approval
to have payment made by other means;
    (C) payment of a civil monetary penalty imposed by the Final Notice
of Assessment constitutes consent by the person to comply with the terms
of any civil or equitable remedy contained in the notice;
    (D) If payment of a civil monetary penalty imposed by the Final
Notice of Assessment has been waived on the condition that the person
comply with the terms of any civil or equitable remedy contained in the
notice or comply in the future with 31 U.S.C. 333 and this part, failure
by the person to so comply will make the civil monetary penalty payable
on demand;
    (E) If a civil monetary penalty is not paid within 30 days of the
date of the Final Notice of Assessment (or on demand under paragraph
(C)(3)(ii)(D) of this sectiion), or if a civil or equitable remedy is
not complied with in accordance with the terms of the notice, a civil
action to collect the penalty or enforce compliance may be commenced at
any time within two years of the date of the Final Notice of Assessment;
and
    (F) Any civil monetary penalty and civil or equitable remedy imposed
by the Final Notice of Assessment may be subject to judicial review in
accordance with 5 U.S.C. 701 et seq.

[62 FR 42213, Aug. 6, 1997; 62 FR 44036, Aug. 18, 1997]



Sec. 27.8  Judicial review.

    A final Notice of Assessment issued under this party may be subject
to judicial review pursuant to 5 U.S.C. 701 et seq.



PART 28_NONDISCRIMINATION ON THE BASIS OF SEX IN EDUCATION PROGRAMS OR
ACTIVITIES RECEIVING FEDERAL FINANCIAL ASSISTANCE--Table of Contents



                         Subpart A_Introduction

Sec.
28.100 Purpose and effective date.
28.105 Definitions.
28.110 Remedial and affirmative action and self-evaluation.
28.115 Assurance required.
28.120 Transfers of property.
28.125 Effect of other requirements.
28.130 Effect of employment opportunities.
28.135 Designation of responsible employee and adoption of grievance
          procedures.
28.140 Dissemination of policy.

                           Subpart B_Coverage

28.200 Application.
28.205 Educational institutions and other entities controlled by
          religious organizations.
28.210 Military and merchant marine educational institutions.

[[Page 264]]

28.215 Membership practices of certain organizations.
28.220 Admissions.
28.225 Educational institutions eligible to submit transition plans.
28.230 Transition plans.
28.235 Statutory amendments.

     Subpart C_Discrimination on the Basis of Sex in Admission and
                         Recruitment Prohibited

28.300 Admission.
28.305 Preference in admission.
28.310 Recruitment.

 Subpart D_Discrimination on the Basis of Sex in Education Programs or
                          Activities Prohibited

28.400 Education programs or activities.
28.405 Housing.
28.410 Comparable facilities.
28.415 Access to course offerings.
28.420 Access to schools operated by LEAs.
28.425 Counseling and use of appraisal and counseling materials.
28.430 Financial assistance.
28.435 Employment assistance to students.
28.440 Health and insurance benefits and services.
28.445 Marital or parental status.
28.450 Athletics.
28.455 Textbooks and curricular material.

Subpart E_Discrimination on the Basis of Sex in Employment in Education
                    Programs or Activities Prohibited

28.500 Employment.
28.505 Employment criteria.
28.510 Recruitment.
28.515 Compensation.
28.520 Job classification and structure.
28.525 Fringe benefits.
28.530 Marital or parental status.
28.535 Effect of state or local law or other requirements.
28.540 Advertising.
28.545 Pre-employment inquiries.
28.550 Sex as a bona fide occupational qualification.

                          Subpart F_Procedures

28.600 Notice of covered programs.
28.605 Compliance information.
28.610 Conduct of investigations.
28.615 Procedure for effecting compliance.
28.620 Hearings.
28.625 Decisions and notices.
28.630 Judicial review.
28.635 Forms and instructions; coordination.

    Authority: 20 U.S.C. 1681, 1682, 1683, 1685, 1686, 1687, 1688.

    Source: 65 FR 52865, 52881, Aug. 30, 2000, unless otherwise noted.



                         Subpart A_Introduction



Sec. 28.100  Purpose and effective date.

    The purpose of these Title IX regulations is to effectuate Title IX
of the Education Amendments of 1972, as amended (except sections 904 and
906 of those Amendments) (20 U.S.C. 1681, 1682, 1683, 1685, 1686, 1687,
1688), which is designed to eliminate (with certain exceptions)
discrimination on the basis of sex in any education program or activity
receiving Federal financial assistance, whether or not such program or
activity is offered or sponsored by an educational institution as
defined in these Title IX regulations. The effective date of these Title
IX regulations shall be September 29, 2000.



Sec. 28.105  Definitions.

    As used in these Title IX regulations, the term:
    Administratively separate unit means a school, department, or
college of an educational institution (other than a local educational
agency) admission to which is independent of admission to any other
component of such institution.
    Admission means selection for part-time, full-time, special,
associate, transfer, exchange, or any other enrollment, membership, or
matriculation in or at an education program or activity operated by a
recipient.
    Applicant means one who submits an application, request, or plan
required to be approved by an official of the Federal agency that awards
Federal financial assistance, or by a recipient, as a condition to
becoming a recipient.
    Department means Department of the Treasury.
    Designated agency official means Assistant Secretary for Management
and Chief Financial Officer.
    Educational institution means a local educational agency (LEA) as
defined by 20 U.S.C. 8801(18), a preschool, a private elementary or
secondary school, or an applicant or recipient that is an institution of
graduate higher education, an institution of undergraduate higher
education, an institution of professional education, or an institution
of

[[Page 265]]

vocational education, as defined in this section.
    Federal financial assistance means any of the following, when
authorized or extended under a law administered by the Federal agency
that awards such assistance:
    (1) A grant or loan of Federal financial assistance, including funds
made available for:
    (i) The acquisition, construction, renovation, restoration, or
repair of a building or facility or any portion thereof; and
    (ii) Scholarships, loans, grants, wages, or other funds extended to
any entity for payment to or on behalf of students admitted to that
entity, or extended directly to such students for payment to that
entity.
    (2) A grant of Federal real or personal property or any interest
therein, including surplus property, and the proceeds of the sale or
transfer of such property, if the Federal share of the fair market value
of the property is not, upon such sale or transfer, properly accounted
for to the Federal Government.
    (3) Provision of the services of Federal personnel.
    (4) Sale or lease of Federal property or any interest therein at
nominal consideration, or at consideration reduced for the purpose of
assisting the recipient or in recognition of public interest to be
served thereby, or permission to use Federal property or any interest
therein without consideration.
    (5) Any other contract, agreement, or arrangement that has as one of
its purposes the provision of assistance to any education program or
activity, except a contract of insurance or guaranty.
    Institution of graduate higher education means an institution that:
    (1) Offers academic study beyond the bachelor of arts or bachelor of
science degree, whether or not leading to a certificate of any higher
degree in the liberal arts and sciences;
    (2) Awards any degree in a professional field beyond the first
professional degree (regardless of whether the first professional degree
in such field is awarded by an institution of undergraduate higher
education or professional education); or
    (3) Awards no degree and offers no further academic study, but
operates ordinarily for the purpose of facilitating research by persons
who have received the highest graduate degree in any field of study.
    Institution of professional education means an institution (except
any institution of undergraduate higher education) that offers a program
of academic study that leads to a first professional degree in a field
for which there is a national specialized accrediting agency recognized
by the Secretary of Education.
    Institution of undergraduate higher education means:
    (1) An institution offering at least two but less than four years of
college-level study beyond the high school level, leading to a diploma
or an associate degree, or wholly or principally creditable toward a
baccalaureate degree; or
    (2) An institution offering academic study leading to a
baccalaureate degree; or
    (3) An agency or body that certifies credentials or offers degrees,
but that may or may not offer academic study.
    Institution of vocational education means a school or institution
(except an institution of professional or graduate or undergraduate
higher education) that has as its primary purpose preparation of
students to pursue a technical, skilled, or semiskilled occupation or
trade, or to pursue study in a technical field, whether or not the
school or institution offers certificates, diplomas, or degrees and
whether or not it offers full-time study.
    Recipient means any State or political subdivision thereof, or any
instrumentality of a State or political subdivision thereof, any public
or private agency, institution, or organization, or other entity, or any
person, to whom Federal financial assistance is extended directly or
through another recipient and that operates an education program or
activity that receives such assistance, including any subunit,
successor, assignee, or transferee thereof.
    Reviewing authority means that component of the Department delegated
authority to review the decisions of hearing officers in cases arising
under these Title IX regulations.

[[Page 266]]

    Secretary means Secretary of the Treasury.
    Student means a person who has gained admission.
    Title IX means Title IX of the Education Amendments of 1972, Public
Law 92-318, 86 Stat. 235, 373 (codified as amended at 20 U.S.C. 1681-
1688) (except sections 904 and 906 thereof), as amended by section 3 of
Public Law 93-568, 88 Stat. 1855, by section 412 of the Education
Amendments of 1976, Public Law 94-482, 90 Stat. 2234, and by Section 3
of Public Law 100-259, 102 Stat. 28, 28-29 (20 U.S.C. 1681, 1682, 1683,
1685, 1686, 1687, 1688).
    Title IX regulations means the provisions set forth at Sec. Sec.
28.100 through 28.635.
    Transition plan means a plan subject to the approval of the
Secretary of Education pursuant to section 901(a)(2) of the Education
Amendments of 1972, 20 U.S.C. 1681(a)(2), under which an educational
institution operates in making the transition from being an educational
institution that admits only students of one sex to being one that
admits students of both sexes without discrimination.

[65 FR 52865, 52881, 52882, Aug. 30, 2000]



Sec. 28.110  Remedial and affirmative action and self-evaluation.

    (a) Remedial action. If the designated agency official finds that a
recipient has discriminated against persons on the basis of sex in an
education program or activity, such recipient shall take such remedial
action as the designated agency official deems necessary to overcome the
effects of such discrimination.
    (b) Affirmative action. In the absence of a finding of
discrimination on the basis of sex in an education program or activity,
a recipient may take affirmative action consistent with law to overcome
the effects of conditions that resulted in limited participation therein
by persons of a particular sex. Nothing in these Title IX regulations
shall be interpreted to alter any affirmative action obligations that a
recipient may have under Executive Order 11246, 3 CFR, 1964-1965 Comp.,
p. 339; as amended by Executive Order 11375, 3 CFR, 1966-1970 Comp., p.
684; as amended by Executive Order 11478, 3 CFR, 1966-1970 Comp., p.
803; as amended by Executive Order 12086, 3 CFR, 1978 Comp., p. 230; as
amended by Executive Order 12107, 3 CFR, 1978 Comp., p. 264.
    (c) Self-evaluation. Each recipient education institution shall,
within one year of September 29, 2000:
    (1) Evaluate, in terms of the requirements of these Title IX
regulations, its current policies and practices and the effects thereof
concerning admission of students, treatment of students, and employment
of both academic and non-academic personnel working in connection with
the recipient's education program or activity;
    (2) Modify any of these policies and practices that do not or may
not meet the requirements of these Title IX regulations; and
    (3) Take appropriate remedial steps to eliminate the effects of any
discrimination that resulted or may have resulted from adherence to
these policies and practices.
    (d) Availability of self-evaluation and related materials.
Recipients shall maintain on file for at least three years following
completion of the evaluation required under paragraph (c) of this
section, and shall provide to the designated agency official upon
request, a description of any modifications made pursuant to paragraph
(c)(2) of this section and of any remedial steps taken pursuant to
paragraph (c)(3) of this section.



Sec. 28.115  Assurance required.

    (a) General. Either at the application stage or the award stage,
Federal agencies must ensure that applications for Federal financial
assistance or awards of Federal financial assistance contain, be
accompanied by, or be covered by a specifically identified assurance
from the applicant or recipient, satisfactory to the designated agency
official, that each education program or activity operated by the
applicant or recipient and to which these Title IX regulations apply
will be operated in compliance with these Title IX regulations. An
assurance of compliance with these Title IX regulations shall not be
satisfactory to the designated agency official if the applicant or
recipient to whom such assurance applies fails to commit itself to take
whatever remedial action is

[[Page 267]]

necessary in accordance with Sec. 28.110(a) to eliminate existing
discrimination on the basis of sex or to eliminate the effects of past
discrimination whether occurring prior to or subsequent to the
submission to the designated agency official of such assurance.
    (b) Duration of obligation. (1) In the case of Federal financial
assistance extended to provide real property or structures thereon, such
assurance shall obligate the recipient or, in the case of a subsequent
transfer, the transferee, for the period during which the real property
or structures are used to provide an education program or activity.
    (2) In the case of Federal financial assistance extended to provide
personal property, such assurance shall obligate the recipient for the
period during which it retains ownership or possession of the property.
    (3) In all other cases such assurance shall obligate the recipient
for the period during which Federal financial assistance is extended.
    (c) Form. (1) The assurances required by paragraph (a) of this
section, which may be included as part of a document that addresses
other assurances or obligations, shall include that the applicant or
recipient will comply with all applicable Federal statutes relating to
nondiscrimination. These include but are not limited to: Title IX of the
Education Amendments of 1972, as amended (20 U.S.C. 1681-1683, 1685-
1688).
    (2) The designated agency official will specify the extent to which
such assurances will be required of the applicant's or recipient's
subgrantees, contractors, subcontractors, transferees, or successors in
interest.



Sec. 28.120  Transfers of property.

    If a recipient sells or otherwise transfers property financed in
whole or in part with Federal financial assistance to a transferee that
operates any education program or activity, and the Federal share of the
fair market value of the property is not upon such sale or transfer
properly accounted for to the Federal Government, both the transferor
and the transferee shall be deemed to be recipients, subject to the
provisions of Sec. Sec. 28.205 through 28.235(a).



Sec. 28.125  Effect of other requirements.

    (a) Effect of other Federal provisions. The obligations imposed by
these Title IX regulations are independent of, and do not alter,
obligations not to discriminate on the basis of sex imposed by Executive
Order 11246, 3 CFR, 1964-1965 Comp., p. 339; as amended by Executive
Order 11375, 3 CFR, 1966-1970 Comp., p. 684; as amended by Executive
Order 11478, 3 CFR, 1966-1970 Comp., p. 803; as amended by Executive
Order 12087, 3 CFR, 1978 Comp., p. 230; as amended by Executive Order
12107, 3 CFR, 1978 Comp., p. 264; sections 704 and 855 of the Public
Health Service Act (42 U.S.C. 295m, 298b-2); Title VII of the Civil
Rights Act of 1964 (42 U.S.C. 2000e et seq.); the Equal Pay Act of 1963
(29 U.S.C. 206); and any other Act of Congress or Federal regulation.
    (b) Effect of State or local law or other requirements. The
obligation to comply with these Title IX regulations is not obviated or
alleviated by any State or local law or other requirement that would
render any applicant or student ineligible, or limit the eligibility of
any applicant or student, on the basis of sex, to practice any
occupation or profession.
    (c) Effect of rules or regulations of private organizations. The
obligation to comply with these Title IX regulations is not obviated or
alleviated by any rule or regulation of any organization, club, athletic
or other league, or association that would render any applicant or
student ineligible to participate or limit the eligibility or
participation of any applicant or student, on the basis of sex, in any
education program or activity operated by a recipient and that receives
Federal financial assistance.



Sec. 28.130  Effect of employment opportunities.

    The obligation to comply with these Title IX regulations is not
obviated or alleviated because employment opportunities in any
occupation or profession are or may be more limited for members of one
sex than for members of the other sex.

[[Page 268]]



Sec. 28.135  Designation of responsible employee and adoption of
grievance procedures.

    (a) Designation of responsible employee. Each recipient shall
designate at least one employee to coordinate its efforts to comply with
and carry out its responsibilities under these Title IX regulations,
including any investigation of any complaint communicated to such
recipient alleging its noncompliance with these Title IX regulations or
alleging any actions that would be prohibited by these Title IX
regulations. The recipient shall notify all its students and employees
of the name, office address, and telephone number of the employee or
employees appointed pursuant to this paragraph.
    (b) Complaint procedure of recipient. A recipient shall adopt and
publish grievance procedures providing for prompt and equitable
resolution of student and employee complaints alleging any action that
would be prohibited by these Title IX regulations.



Sec. 28.140  Dissemination of policy.

    (a) Notification of policy. (1) Each recipient shall implement
specific and continuing steps to notify applicants for admission and
employment, students and parents of elementary and secondary school
students, employees, sources of referral of applicants for admission and
employment, and all unions or professional organizations holding
collective bargaining or professional agreements with the recipient,
that it does not discriminate on the basis of sex in the educational
programs or activities that it operates, and that it is required by
Title IX and these Title IX regulations not to discriminate in such a
manner. Such notification shall contain such information, and be made in
such manner, as the designated agency official finds necessary to
apprise such persons of the protections against discrimination assured
them by Title IX and these Title IX regulations, but shall state at
least that the requirement not to discriminate in education programs or
activities extends to employment therein, and to admission thereto
unless Sec. Sec. 28.300 through 28.310 do not apply to the recipient,
and that inquiries concerning the application of Title IX and these
Title IX regulations to such recipient may be referred to the employee
designated pursuant to Sec. 28.135, or to the designated agency
official.
    (2) Each recipient shall make the initial notification required by
paragraph (a)(1) of this section within 90 days of September 29, 2000 or
of the date these Title IX regulations first apply to such recipient,
whichever comes later, which notification shall include publication in:
    (i) Newspapers and magazines operated by such recipient or by
student, alumnae, or alumni groups for or in connection with such
recipient; and
    (ii) Memoranda or other written communications distributed to every
student and employee of such recipient.
    (b) Publications. (1) Each recipient shall prominently include a
statement of the policy described in paragraph (a) of this section in
each announcement, bulletin, catalog, or application form that it makes
available to any person of a type, described in paragraph (a) of this
section, or which is otherwise used in connection with the recruitment
of students or employees.
    (2) A recipient shall not use or distribute a publication of the
type described in paragraph (b)(1) of this section that suggests, by
text or illustration, that such recipient treats applicants, students,
or employees differently on the basis of sex except as such treatment is
permitted by these Title IX regulations.
    (c) Distribution. Each recipient shall distribute without
discrimination on the basis of sex each publication described in
paragraph (b)(1) of this section, and shall apprise each of its
admission and employment recruitment representatives of the policy of
nondiscrimination described in paragraph (a) of this section, and shall
require such representatives to adhere to such policy.



                           Subpart B_Coverage



Sec. 28.200  Application.

    Except as provided in Sec. Sec. 28.205 through 28.235(a), these
Title IX regulations apply to every recipient and to each education
program or activity operated by such recipient that receives Federal
financial assistance.

[[Page 269]]



Sec. 28.205  Educational institutions and other entities controlled by
religious organizations.

    (a) Exemption. These Title IX regulations do not apply to any
operation of an educational institution or other entity that is
controlled by a religious organization to the extent that application of
these Title IX regulations would not be consistent with the religious
tenets of such organization.
    (b) Exemption claims. An educational institution or other entity
that wishes to claim the exemption set forth in paragraph (a) of this
section shall do so by submitting in writing to the designated agency
official a statement by the highest-ranking official of the institution,
identifying the provisions of these Title IX regulations that conflict
with a specific tenet of the religious organization.



Sec. 28.210  Military and merchant marine educational institutions.

    These Title IX regulations do not apply to an educational
institution whose primary purpose is the training of individuals for a
military service of the United States or for the merchant marine.



Sec. 28.215  Membership practices of certain organizations.

    (a) Social fraternities and sororities. These Title IX regulations
do not apply to the membership practices of social fraternities and
sororities that are exempt from taxation under section 501(a) of the
Internal Revenue Code of 1954, 26 U.S.C. 501(a), the active membership
of which consists primarily of students in attendance at institutions of
higher education.
    (b) YMCA, YWCA, Girl Scouts, Boy Scouts, and Camp Fire Girls. These
Title IX regulations do not apply to the membership practices of the
Young Men's Christian Association (YMCA), the Young Women's Christian
Association (YWCA), the Girl Scouts, the Boy Scouts, and Camp Fire
Girls.
    (c) Voluntary youth service organizations. These Title IX
regulations do not apply to the membership practices of a voluntary
youth service organization that is exempt from taxation under section
501(a) of the Internal Revenue Code of 1954, 26 U.S.C. 501(a), and the
membership of which has been traditionally limited to members of one sex
and principally to persons of less than nineteen years of age.



Sec. 28.220  Admissions.

    (a) Admissions to educational institutions prior to June 24, 1973,
are not covered by these Title IX regulations.
    (b) Administratively separate units. For the purposes only of this
section, Sec. Sec. 28.225 and 28.230, and Sec. Sec. 28.300 through
28.310, each administratively separate unit shall be deemed to be an
educational institution.
    (c) Application of Sec. Sec. 28.300 through .310. Except as
provided in paragraphs (d) and (e) of this section, Sec. Sec. 28.300
through 28.310 apply to each recipient. A recipient to which Sec. Sec.
28.300 through 28.310 apply shall not discriminate on the basis of sex
in admission or recruitment in violation of Sec. Sec. 28.300 through
28.310.
    (d) Educational institutions. Except as provided in paragraph (e) of
this section as to recipients that are educational institutions,
Sec. Sec. 28.300 through 28.310 apply only to institutions of
vocational education, professional education, graduate higher education,
and public institutions of undergraduate higher education.
    (e) Public institutions of undergraduate higher education.
Sec. Sec. 28.300 through 28.310 do not apply to any public institution
of undergraduate higher education that traditionally and continually
from its establishment has had a policy of admitting students of only
one sex.



Sec. 28.225  Educational institutions eligible to submit transition plans.

    (a) Application. This section applies to each educational
institution to which Sec. Sec. 28.300 through 28.310 apply that:
    (1) Admitted students of only one sex as regular students as of June
23, 1972; or
    (2) Admitted students of only one sex as regular students as of June
23, 1965, but thereafter admitted, as regular students, students of the
sex not admitted prior to June 23, 1965.
    (b) Provision for transition plans. An educational institution to
which this section applies shall not discriminate

[[Page 270]]

on the basis of sex in admission or recruitment in violation of
Sec. Sec. 28.300 through 28.310.



Sec. 28.230  Transition plans.

    (a) Submission of plans. An institution to which Sec. 28.225
applies and that is composed of more than one administratively separate
unit may submit either a single transition plan applicable to all such
units, or a separate transition plan applicable to each such unit.
    (b) Content of plans. In order to be approved by the Secretary of
Education, a transition plan shall:
    (1) State the name, address, and Federal Interagency Committee on
Education Code of the educational institution submitting such plan, the
administratively separate units to which the plan is applicable, and the
name, address, and telephone number of the person to whom questions
concerning the plan may be addressed. The person who submits the plan
shall be the chief administrator or president of the institution, or
another individual legally authorized to bind the institution to all
actions set forth in the plan.
    (2) State whether the educational institution or administratively
separate unit admits students of both sexes as regular students and, if
so, when it began to do so.
    (3) Identify and describe with respect to the educational
institution or administratively separate unit any obstacles to admitting
students without discrimination on the basis of sex.
    (4) Describe in detail the steps necessary to eliminate as soon as
practicable each obstacle so identified and indicate the schedule for
taking these steps and the individual directly responsible for their
implementation.
    (5) Include estimates of the number of students, by sex, expected to
apply for, be admitted to, and enter each class during the period
covered by the plan.
    (c) Nondiscrimination. No policy or practice of a recipient to which
Sec. 28.225 applies shall result in treatment of applicants to or
students of such recipient in violation of Sec. Sec. 28.300 through
28.310 unless such treatment is necessitated by an obstacle identified
in paragraph (b)(3) of this section and a schedule for eliminating that
obstacle has been provided as required by paragraph (b)(4) of this
section.
    (d) Effects of past exclusion. To overcome the effects of past
exclusion of students on the basis of sex, each educational institution
to which Sec. 28.225 applies shall include in its transition plan, and
shall implement, specific steps designed to encourage individuals of the
previously excluded sex to apply for admission to such institution. Such
steps shall include instituting recruitment programs that emphasize the
institution's commitment to enrolling students of the sex previously
excluded.



Sec. 28.235  Statutory amendments.

    (a) This section, which applies to all provisions of these Title IX
regulations, addresses statutory amendments to Title IX.
    (b) These Title IX regulations shall not apply to or preclude:
    (1) Any program or activity of the American Legion undertaken in
connection with the organization or operation of any Boys State
conference, Boys Nation conference, Girls State conference, or Girls
Nation conference;
    (2) Any program or activity of a secondary school or educational
institution specifically for:
    (i) The promotion of any Boys State conference, Boys Nation
conference, Girls State conference, or Girls Nation conference; or
    (ii) The selection of students to attend any such conference;
    (3) Father-son or mother-daughter activities at an educational
institution or in an education program or activity, but if such
activities are provided for students of one sex, opportunities for
reasonably comparable activities shall be provided to students of the
other sex;
    (4) Any scholarship or other financial assistance awarded by an
institution of higher education to an individual because such individual
has received such award in a single-sex pageant based upon a combination
of factors related to the individual's personal appearance, poise, and
talent. The pageant, however, must comply with other nondiscrimination
provisions of Federal law.

[[Page 271]]

    (c) Program or activity or program means:
    (1) All of the operations of any entity described in paragraphs
(c)(1)(i) through (iv) of this section, any part of which is extended
Federal financial assistance:
    (i)(A) A department, agency, special purpose district, or other
instrumentality of a State or of a local government; or
    (B) The entity of such State or local government that distributes
such assistance and each such department or agency (and each other State
or local government entity) to which the assistance is extended, in the
case of assistance to a State or local government;
    (ii)(A) A college, university, or other postsecondary institution,
or a public system of higher education; or
    (B) A local educational agency (as defined in section 8801 of title
20), system of vocational education, or other school system;
    (iii)(A) An entire corporation, partnership, or other private
organization, or an entire sole proprietorship--
    (1) If assistance is extended to such corporation, partnership,
private organization, or sole proprietorship as a whole; or
    (2) Which is principally engaged in the business of providing
education, health care, housing, social services, or parks and
recreation; or
    (B) The entire plant or other comparable, geographically separate
facility to which Federal financial assistance is extended, in the case
of any other corporation, partnership, private organization, or sole
proprietorship; or
    (iv) Any other entity that is established by two or more of the
entities described in paragraphs (c)(1)(i), (ii), or (iii) of this
section.
    (2)(i) Program or activity does not include any operation of an
entity that is controlled by a religious organization if the application
of 20 U.S.C. 1681 to such operation would not be consistent with the
religious tenets of such organization.
    (ii) For example, all of the operations of a college, university, or
other postsecondary institution, including but not limited to
traditional educational operations, faculty and student housing, campus
shuttle bus service, campus restaurants, the bookstore, and other
commercial activities are part of a ``program or activity'' subject to
these Title IX regulations if the college, university, or other
institution receives Federal financial assistance.
    (d)(1) Nothing in these Title IX regulations shall be construed to
require or prohibit any person, or public or private entity, to provide
or pay for any benefit or service, including the use of facilities,
related to an abortion. Medical procedures, benefits, services, and the
use of facilities, necessary to save the life of a pregnant woman or to
address complications related to an abortion are not subject to this
section.
    (2) Nothing in this section shall be construed to permit a penalty
to be imposed on any person or individual because such person or
individual is seeking or has received any benefit or service related to
a legal abortion. Accordingly, subject to paragraph (d)(1) of this
section, no person shall be excluded from participation in, be denied
the benefits of, or be subjected to discrimination under any academic,
extracurricular, research, occupational training, employment, or other
educational program or activity operated by a recipient that receives
Federal financial assistance because such individual has sought or
received, or is seeking, a legal abortion, or any benefit or service
related to a legal abortion.



     Subpart C_Discrimination on the Basis of Sex in Admission and
                         Recruitment Prohibited



Sec. 28.300  Admission.

    (a) General. No person shall, on the basis of sex, be denied
admission, or be subjected to discrimination in admission, by any
recipient to which Sec. Sec. 28.300 through Sec. Sec. 28.310 apply,
except as provided in Sec. Sec. 28.225 and Sec. Sec. 28.230.
    (b) Specific prohibitions. (1) In determining whether a person
satisfies any policy or criterion for admission, or in making any offer
of admission, a recipient to which Sec. Sec. 28.300 through 28.310
apply shall not:
    (i) Give preference to one person over another on the basis of sex,
by ranking

[[Page 272]]

applicants separately on such basis, or otherwise;
    (ii) Apply numerical limitations upon the number or proportion of
persons of either sex who may be admitted; or
    (iii) Otherwise treat one individual differently from another on the
basis of sex.
    (2) A recipient shall not administer or operate any test or other
criterion for admission that has a disproportionately adverse effect on
persons on the basis of sex unless the use of such test or criterion is
shown to predict validly success in the education program or activity in
question and alternative tests or criteria that do not have such a
disproportionately adverse effect are shown to be unavailable.
    (c) Prohibitions relating to marital or parental status. In
determining whether a person satisfies any policy or criterion for
admission, or in making any offer of admission, a recipient to which
Sec. Sec. 28.300 through 28.310 apply:
    (1) Shall not apply any rule concerning the actual or potential
parental, family, or marital status of a student or applicant that
treats persons differently on the basis of sex;
    (2) Shall not discriminate against or exclude any person on the
basis of pregnancy, childbirth, termination of pregnancy, or recovery
therefrom, or establish or follow any rule or practice that so
discriminates or excludes;
    (3) Subject to Sec. 28.235(d), shall treat disabilities related to
pregnancy, childbirth, termination of pregnancy, or recovery therefrom
in the same manner and under the same policies as any other temporary
disability or physical condition; and
    (4) Shall not make pre-admission inquiry as to the marital status of
an applicant for admission, including whether such applicant is ``Miss''
or ``Mrs.'' A recipient may make pre-admission inquiry as to the sex of
an applicant for admission, but only if such inquiry is made equally of
such applicants of both sexes and if the results of such inquiry are not
used in connection with discrimination prohibited by these Title IX
regulations.



Sec. 28.305  Preference in admission.

    A recipient to which Sec. Sec. 28.300 through 28.310 apply shall
not give preference to applicants for admission, on the basis of
attendance at any educational institution or other school or entity that
admits as students only or predominantly members of one sex, if the
giving of such preference has the effect of discriminating on the basis
of sex in violation of Sec. Sec. 28.300 through 28.310.



Sec. 28.310  Recruitment.

    (a) Nondiscriminatory recruitment. A recipient to which Sec. Sec.
28.300 through 28.310 apply shall not discriminate on the basis of sex
in the recruitment and admission of students. A recipient may be
required to undertake additional recruitment efforts for one sex as
remedial action pursuant to Sec. 28.110(a), and may choose to undertake
such efforts as affirmative action pursuant to Sec. 28.110(b).
    (b) Recruitment at certain institutions. A recipient to which
Sec. Sec. 28.300 through 28.310 apply shall not recruit primarily or
exclusively at educational institutions, schools, or entities that admit
as students only or predominantly members of one sex, if such actions
have the effect of discriminating on the basis of sex in violation of
Sec. Sec. 28.300 through 28.310.



 Subpart D_Discrimination on the Basis of Sex in Education Programs or
                          Activities Prohibited



Sec. 28.400  Education programs or activities.

    (a) General. Except as provided elsewhere in these Title IX
regulations, no person shall, on the basis of sex, be excluded from
participation in, be denied the benefits of, or be subjected to
discrimination under any academic, extracurricular, research,
occupational training, or other education program or activity operated
by a recipient that receives Federal financial assistance. Sections
28.400 through 28.455 do not apply to actions of a recipient in
connection with admission of its students to an education program or
activity of a recipient to which Sec. Sec. 28.300 through 28.310 do not
apply, or an entity, not a recipient, to which Sec. Sec. 28.300 through
28.310 would not apply if the entity were a recipient.

[[Page 273]]

    (b) Specific prohibitions. Except as provided in Sec. Sec. 28.400
through 28.455, in providing any aid, benefit, or service to a student,
a recipient shall not, on the basis of sex:
    (1) Treat one person differently from another in determining whether
such person satisfies any requirement or condition for the provision of
such aid, benefit, or service;
    (2) Provide different aid, benefits, or services or provide aid,
benefits, or services in a different manner;
    (3) Deny any person any such aid, benefit, or service;
    (4) Subject any person to separate or different rules of behavior,
sanctions, or other treatment;
    (5) Apply any rule concerning the domicile or residence of a student
or applicant, including eligibility for in-state fees and tuition;
    (6) Aid or perpetuate discrimination against any person by providing
significant assistance to any agency, organization, or person that
discriminates on the basis of sex in providing any aid, benefit, or
service to students or employees;
    (7) Otherwise limit any person in the enjoyment of any right,
privilege, advantage, or opportunity.
    (c) Assistance administered by a recipient educational institution
to study at a foreign institution. A recipient educational institution
may administer or assist in the administration of scholarships,
fellowships, or other awards established by foreign or domestic wills,
trusts, or similar legal instruments, or by acts of foreign governments
and restricted to members of one sex, that are designed to provide
opportunities to study abroad, and that are awarded to students who are
already matriculating at or who are graduates of the recipient
institution; Provided, that a recipient educational institution that
administers or assists in the administration of such scholarships,
fellowships, or other awards that are restricted to members of one sex
provides, or otherwise makes available, reasonable opportunities for
similar studies for members of the other sex. Such opportunities may be
derived from either domestic or foreign sources.
    (d) Aids, benefits or services not provided by recipient. (1) This
paragraph (d) applies to any recipient that requires participation by
any applicant, student, or employee in any education program or activity
not operated wholly by such recipient, or that facilitates, permits, or
considers such participation as part of or equivalent to an education
program or activity operated by such recipient, including participation
in educational consortia and cooperative employment and student-teaching
assignments.
    (2) Such recipient:
    (i) Shall develop and implement a procedure designed to assure
itself that the operator or sponsor of such other education program or
activity takes no action affecting any applicant, student, or employee
of such recipient that these Title IX regulations would prohibit such
recipient from taking; and
    (ii) Shall not facilitate, require, permit, or consider such
participation if such action occurs.



Sec. 28.405  Housing.

    (a) Generally. A recipient shall not, on the basis of sex, apply
different rules or regulations, impose different fees or requirements,
or offer different services or benefits related to housing, except as
provided in this section (including housing provided only to married
students).
    (b) Housing provided by recipient. (1) A recipient may provide
separate housing on the basis of sex.
    (2) Housing provided by a recipient to students of one sex, when
compared to that provided to students of the other sex, shall be as a
whole:
    (i) Proportionate in quantity to the number of students of that sex
applying for such housing; and
    (ii) Comparable in quality and cost to the student.
    (c) Other housing. (1) A recipient shall not, on the basis of sex,
administer different policies or practices concerning occupancy by its
students of housing other than that provided by such recipient.
    (2)(i) A recipient which, through solicitation, listing, approval of
housing, or otherwise, assists any agency, organization, or person in
making housing available to any of its students, shall

[[Page 274]]

take such reasonable action as may be necessary to assure itself that
such housing as is provided to students of one sex, when compared to
that provided to students of the other sex, is as a whole:
    (A) Proportionate in quantity; and
    (B) Comparable in quality and cost to the student.
    (ii) A recipient may render such assistance to any agency,
organization, or person that provides all or part of such housing to
students of only one sex.



Sec. 28.410  Comparable facilities.

    A recipient may provide separate toilet, locker room, and shower
facilities on the basis of sex, but such facilities provided for
students of one sex shall be comparable to such facilities provided for
students of the other sex.



Sec. 28.415  Access to course offerings.

    (a) A recipient shall not provide any course or otherwise carry out
any of its education program or activity separately on the basis of sex,
or require or refuse participation therein by any of its students on
such basis, including health, physical education, industrial, business,
vocational, technical, home economics, music, and adult education
courses.
    (b)(1) With respect to classes and activities in physical education
at the elementary school level, the recipient shall comply fully with
this section as expeditiously as possible but in no event later than one
year from September 29, 2000. With respect to physical education classes
and activities at the secondary and post-secondary levels, the recipient
shall comply fully with this section as expeditiously as possible but in
no event later than three years from September 29, 2000.
    (2) This section does not prohibit grouping of students in physical
education classes and activities by ability as assessed by objective
standards of individual performance developed and applied without regard
to sex.
    (3) This section does not prohibit separation of students by sex
within physical education classes or activities during participation in
wrestling, boxing, rugby, ice hockey, football, basketball, and other
sports the purpose or major activity of which involves bodily contact.
    (4) Where use of a single standard of measuring skill or progress in
a physical education class has an adverse effect on members of one sex,
the recipient shall use appropriate standards that do not have such
effect.
    (5) Portions of classes in elementary and secondary schools, or
portions of education programs or activities, that deal exclusively with
human sexuality may be conducted in separate sessions for boys and
girls.
    (6) Recipients may make requirements based on vocal range or quality
that may result in a chorus or choruses of one or predominantly one sex.



Sec. 28.420  Access to schools operated by LEAs.

    A recipient that is a local educational agency shall not, on the
basis of sex, exclude any person from admission to:
    (a) Any institution of vocational education operated by such
recipient; or
    (b) Any other school or educational unit operated by such recipient,
unless such recipient otherwise makes available to such person, pursuant
to the same policies and criteria of admission, courses, services, and
facilities comparable to each course, service, and facility offered in
or through such schools.



Sec. 28.425  Counseling and use of appraisal and counseling materials.

    (a) Counseling. A recipient shall not discriminate against any
person on the basis of sex in the counseling or guidance of students or
applicants for admission.
    (b) Use of appraisal and counseling materials. A recipient that uses
testing or other materials for appraising or counseling students shall
not use different materials for students on the basis of their sex or
use materials that permit or require different treatment of students on
such basis unless such different materials cover the same occupations
and interest areas and the use of such different materials is shown to
be essential to eliminate sex bias. Recipients shall develop and use
internal procedures for ensuring that such materials do not discriminate
on the basis

[[Page 275]]

of sex. Where the use of a counseling test or other instrument results
in a substantially disproportionate number of members of one sex in any
particular course of study or classification, the recipient shall take
such action as is necessary to assure itself that such disproportion is
not the result of discrimination in the instrument or its application.
    (c) Disproportion in classes. Where a recipient finds that a
particular class contains a substantially disproportionate number of
individuals of one sex, the recipient shall take such action as is
necessary to assure itself that such disproportion is not the result of
discrimination on the basis of sex in counseling or appraisal materials
or by counselors.



Sec. 28.430  Financial assistance.

    (a) General. Except as provided in paragraphs (b) and (c) of this
section, in providing financial assistance to any of its students, a
recipient shall not:
    (1) On the basis of sex, provide different amounts or types of such
assistance, limit eligibility for such assistance that is of any
particular type or source, apply different criteria, or otherwise
discriminate;
    (2) Through solicitation, listing, approval, provision of
facilities, or other services, assist any foundation, trust, agency,
organization, or person that provides assistance to any of such
recipient's students in a manner that discriminates on the basis of sex;
or
    (3) Apply any rule or assist in application of any rule concerning
eligibility for such assistance that treats persons of one sex
differently from persons of the other sex with regard to marital or
parental status.
    (b) Financial aid established by certain legal instruments. (1) A
recipient may administer or assist in the administration of
scholarships, fellowships, or other forms of financial assistance
established pursuant to domestic or foreign wills, trusts, bequests, or
similar legal instruments or by acts of a foreign government that
require that awards be made to members of a particular sex specified
therein; Provided, that the overall effect of the award of such sex-
restricted scholarships, fellowships, and other forms of financial
assistance does not discriminate on the basis of sex.
    (2) To ensure nondiscriminatory awards of assistance as required in
paragraph (b)(1) of this section, recipients shall develop and use
procedures under which:
    (i) Students are selected for award of financial assistance on the
basis of nondiscriminatory criteria and not on the basis of availability
of funds restricted to members of a particular sex;
    (ii) An appropriate sex-restricted scholarship, fellowship, or other
form of financial assistance is allocated to each student selected under
paragraph (b)(2)(i) of this section; and
    (iii) No student is denied the award for which he or she was
selected under paragraph (b)(2)(i) of this section because of the
absence of a scholarship, fellowship, or other form of financial
assistance designated for a member of that student's sex.
    (c) Athletic scholarships. (1) To the extent that a recipient awards
athletic scholarships or grants-in-aid, it must provide reasonable
opportunities for such awards for members of each sex in proportion to
the number of students of each sex participating in interscholastic or
intercollegiate athletics.
    (2) A recipient may provide separate athletic scholarships or
grants-in-aid for members of each sex as part of separate athletic teams
for members of each sex to the extent consistent with this paragraph (c)
and Sec. 28.450.



Sec. 28.435  Employment assistance to students.

    (a) Assistance by recipient in making available outside employment.
A recipient that assists any agency, organization, or person in making
employment available to any of its students:
    (1) Shall assure itself that such employment is made available
without discrimination on the basis of sex; and
    (2) Shall not render such services to any agency, organization, or
person that discriminates on the basis of sex in its employment
practices.
    (b) Employment of students by recipients. A recipient that employs
any of its students shall not do so in a manner that violates Sec. Sec.
28.500 through 28.550.

[[Page 276]]



Sec. 28.440  Health and insurance benefits and services.

    Subject to Sec. 28.235(d), in providing a medical, hospital,
accident, or life insurance benefit, service, policy, or plan to any of
its students, a recipient shall not discriminate on the basis of sex, or
provide such benefit, service, policy, or plan in a manner that would
violate Sec. Sec. 28.500 through 28.550 if it were provided to
employees of the recipient. This section shall not prohibit a recipient
from providing any benefit or service that may be used by a different
proportion of students of one sex than of the other, including family
planning services. However, any recipient that provides full coverage
health service shall provide gynecological care.



Sec. 28.445  Marital or parental status.

    (a) Status generally. A recipient shall not apply any rule
concerning a student's actual or potential parental, family, or marital
status that treats students differently on the basis of sex.
    (b) Pregnancy and related conditions. (1) A recipient shall not
discriminate against any student, or exclude any student from its
education program or activity, including any class or extracurricular
activity, on the basis of such student's pregnancy, childbirth, false
pregnancy, termination of pregnancy, or recovery therefrom, unless the
student requests voluntarily to participate in a separate portion of the
program or activity of the recipient.
    (2) A recipient may require such a student to obtain the
certification of a physician that the student is physically and
emotionally able to continue participation as long as such a
certification is required of all students for other physical or
emotional conditions requiring the attention of a physician.
    (3) A recipient that operates a portion of its education program or
activity separately for pregnant students, admittance to which is
completely voluntary on the part of the student as provided in paragraph
(b)(1) of this section, shall ensure that the separate portion is
comparable to that offered to non-pregnant students.
    (4) Subject to Sec. 28.235(d), a recipient shall treat pregnancy,
childbirth, false pregnancy, termination of pregnancy and recovery
therefrom in the same manner and under the same policies as any other
temporary disability with respect to any medical or hospital benefit,
service, plan, or policy that such recipient administers, operates,
offers, or participates in with respect to students admitted to the
recipient's educational program or activity.
    (5) In the case of a recipient that does not maintain a leave policy
for its students, or in the case of a student who does not otherwise
qualify for leave under such a policy, a recipient shall treat
pregnancy, childbirth, false pregnancy, termination of pregnancy, and
recovery therefrom as a justification for a leave of absence for as long
a period of time as is deemed medically necessary by the student's
physician, at the conclusion of which the student shall be reinstated to
the status that she held when the leave began.



Sec. 28.450  Athletics.

    (a) General. No person shall, on the basis of sex, be excluded from
participation in, be denied the benefits of, be treated differently from
another person, or otherwise be discriminated against in any
interscholastic, intercollegiate, club, or intramural athletics offered
by a recipient, and no recipient shall provide any such athletics
separately on such basis.
    (b) Separate teams. Notwithstanding the requirements of paragraph
(a) of this section, a recipient may operate or sponsor separate teams
for members of each sex where selection for such teams is based upon
competitive skill or the activity involved is a contact sport. However,
where a recipient operates or sponsors a team in a particular sport for
members of one sex but operates or sponsors no such team for members of
the other sex, and athletic opportunities for members of that sex have
previously been limited, members of the excluded sex must be allowed to
try out for the team offered unless the sport involved is a contact
sport. For the purposes of these Title IX regulations, contact sports
include boxing, wrestling, rugby, ice hockey, football, basketball, and
other sports the purpose or major activity of which involves bodily
contact.

[[Page 277]]

    (c) Equal opportunity. (1) A recipient that operates or sponsors
interscholastic, intercollegiate, club, or intramural athletics shall
provide equal athletic opportunity for members of both sexes. In
determining whether equal opportunities are available, the designated
agency official will consider, among other factors:
    (i) Whether the selection of sports and levels of competition
effectively accommodate the interests and abilities of members of both
sexes;
    (ii) The provision of equipment and supplies;
    (iii) Scheduling of games and practice time;
    (iv) Travel and per diem allowance;
    (v) Opportunity to receive coaching and academic tutoring;
    (vi) Assignment and compensation of coaches and tutors;
    (vii) Provision of locker rooms, practice, and competitive
facilities;
    (viii) Provision of medical and training facilities and services;
    (ix) Provision of housing and dining facilities and services;
    (x) Publicity.
    (2) For purposes of paragraph (c)(1) of this section, unequal
aggregate expenditures for members of each sex or unequal expenditures
for male and female teams if a recipient operates or sponsors separate
teams will not constitute noncompliance with this section, but the
designated agency official may consider the failure to provide necessary
funds for teams for one sex in assessing equality of opportunity for
members of each sex.
    (d) Adjustment period. A recipient that operates or sponsors
interscholastic, intercollegiate, club, or intramural athletics at the
elementary school level shall comply fully with this section as
expeditiously as possible but in no event later than one year from
September 29, 2000. A recipient that operates or sponsors
interscholastic, intercollegiate, club, or intramural athletics at the
secondary or postsecondary school level shall comply fully with this
section as expeditiously as possible but in no event later than three
years from September 29, 2000.



Sec. 28.455  Textbooks and curricular material.

    Nothing in these Title IX regulations shall be interpreted as
requiring or prohibiting or abridging in any way the use of particular
textbooks or curricular materials.



Subpart E_Discrimination on the Basis of Sex in Employment in Education
                    Programs or Activities Prohibited



Sec. 28.500  Employment.

    (a) General. (1) No person shall, on the basis of sex, be excluded
from participation in, be denied the benefits of, or be subjected to
discrimination in employment, or recruitment, consideration, or
selection therefor, whether full-time or part-time, under any education
program or activity operated by a recipient that receives Federal
financial assistance.
    (2) A recipient shall make all employment decisions in any education
program or activity operated by such recipient in a nondiscriminatory
manner and shall not limit, segregate, or classify applicants or
employees in any way that could adversely affect any applicant's or
employee's employment opportunities or status because of sex.
    (3) A recipient shall not enter into any contractual or other
relationship which directly or indirectly has the effect of subjecting
employees or students to discrimination prohibited by Sec. Sec. 28.500
through 28.550, including relationships with employment and referral
agencies, with labor unions, and with organizations providing or
administering fringe benefits to employees of the recipient.
    (4) A recipient shall not grant preferences to applicants for
employment on the basis of attendance at any educational institution or
entity that admits as students only or predominantly members of one sex,
if the giving of such preferences has the effect of discriminating on
the basis of sex in violation of these Title IX regulations.
    (b) Application. The provisions of Sec. Sec. 28.500 through 28.550
apply to:
    (1) Recruitment, advertising, and the process of application for
employment;

[[Page 278]]

    (2) Hiring, upgrading, promotion, consideration for and award of
tenure, demotion, transfer, layoff, termination, application of nepotism
policies, right of return from layoff, and rehiring;
    (3) Rates of pay or any other form of compensation, and changes in
compensation;
    (4) Job assignments, classifications, and structure, including
position descriptions, lines of progression, and seniority lists;
    (5) The terms of any collective bargaining agreement;
    (6) Granting and return from leaves of absence, leave for pregnancy,
childbirth, false pregnancy, termination of pregnancy, leave for persons
of either sex to care for children or dependents, or any other leave;
    (7) Fringe benefits available by virtue of employment, whether or
not administered by the recipient;
    (8) Selection and financial support for training, including
apprenticeship, professional meetings, conferences, and other related
activities, selection for tuition assistance, selection for sabbaticals
and leaves of absence to pursue training;
    (9) Employer-sponsored activities, including social or recreational
programs; and
    (10) Any other term, condition, or privilege of employment.



Sec. 28.505  Employment criteria.

    A recipient shall not administer or operate any test or other
criterion for any employment opportunity that has a disproportionately
adverse effect on persons on the basis of sex unless:
    (a) Use of such test or other criterion is shown to predict validly
successful performance in the position in question; and
    (b) Alternative tests or criteria for such purpose, which do not
have such disproportionately adverse effect, are shown to be
unavailable.



Sec. 28.510  Recruitment.

    (a) Nondiscriminatory recruitment and hiring. A recipient shall not
discriminate on the basis of sex in the recruitment and hiring of
employees. Where a recipient has been found to be presently
discriminating on the basis of sex in the recruitment or hiring of
employees, or has been found to have so discriminated in the past, the
recipient shall recruit members of the sex so discriminated against so
as to overcome the effects of such past or present discrimination.
    (b) Recruitment patterns. A recipient shall not recruit primarily or
exclusively at entities that furnish as applicants only or predominantly
members of one sex if such actions have the effect of discriminating on
the basis of sex in violation of Sec. Sec. 28.500 through 28.550.



Sec. 28.515  Compensation.

    A recipient shall not make or enforce any policy or practice that,
on the basis of sex:
    (a) Makes distinctions in rates of pay or other compensation;
    (b) Results in the payment of wages to employees of one sex at a
rate less than that paid to employees of the opposite sex for equal work
on jobs the performance of which requires equal skill, effort, and
responsibility, and that are performed under similar working conditions.



Sec. 28.520  Job classification and structure.

    A recipient shall not:
    (a) Classify a job as being for males or for females;
    (b) Maintain or establish separate lines of progression, seniority
lists, career ladders, or tenure systems based on sex; or
    (c) Maintain or establish separate lines of progression, seniority
systems, career ladders, or tenure systems for similar jobs, position
descriptions, or job requirements that classify persons on the basis of
sex, unless sex is a bona fide occupational qualification for the
positions in question as set forth in Sec. 28.550.



Sec. 28.525  Fringe benefits.

    (a) ``Fringe benefits'' defined. For purposes of these Title IX
regulations, fringe benefits means: Any medical, hospital, accident,
life insurance, or retirement benefit, service, policy or plan, any
profit-sharing or bonus plan, leave, and any other benefit or service

[[Page 279]]

of employment not subject to the provision of Sec. 28.515.
    (b) Prohibitions. A recipient shall not:
    (1) Discriminate on the basis of sex with regard to making fringe
benefits available to employees or make fringe benefits available to
spouses, families, or dependents of employees differently upon the basis
of the employee's sex;
    (2) Administer, operate, offer, or participate in a fringe benefit
plan that does not provide for equal periodic benefits for members of
each sex and for equal contributions to the plan by such recipient for
members of each sex; or
    (3) Administer, operate, offer, or participate in a pension or
retirement plan that establishes different optional or compulsory
retirement ages based on sex or that otherwise discriminates in benefits
on the basis of sex.



Sec. 28.530  Marital or parental status.

    (a) General. A recipient shall not apply any policy or take any
employment action:
    (1) Concerning the potential marital, parental, or family status of
an employee or applicant for employment that treats persons differently
on the basis of sex; or
    (2) Which is based upon whether an employee or applicant for
employment is the head of household or principal wage earner in such
employee's or applicant's family unit.
    (b) Pregnancy. A recipient shall not discriminate against or exclude
from employment any employee or applicant for employment on the basis of
pregnancy, childbirth, false pregnancy, termination of pregnancy, or
recovery therefrom.
    (c) Pregnancy as a temporary disability. Subject to Sec. 28.235(d),
a recipient shall treat pregnancy, childbirth, false pregnancy,
termination of pregnancy, recovery therefrom, and any temporary
disability resulting therefrom as any other temporary disability for all
job-related purposes, including commencement, duration, and extensions
of leave, payment of disability income, accrual of seniority and any
other benefit or service, and reinstatement, and under any fringe
benefit offered to employees by virtue of employment.
    (d) Pregnancy leave. In the case of a recipient that does not
maintain a leave policy for its employees, or in the case of an employee
with insufficient leave or accrued employment time to qualify for leave
under such a policy, a recipient shall treat pregnancy, childbirth,
false pregnancy, termination of pregnancy, and recovery therefrom as a
justification for a leave of absence without pay for a reasonable period
of time, at the conclusion of which the employee shall be reinstated to
the status that she held when the leave began or to a comparable
position, without decrease in rate of compensation or loss of
promotional opportunities, or any other right or privilege of
employment.



Sec. 28.535  Effect of state or local law or other requirements.

    (a) Prohibitory requirements. The obligation to comply with
Sec. Sec. 28.500 through 28.550 is not obviated or alleviated by the
existence of any State or local law or other requirement that imposes
prohibitions or limits upon employment of members of one sex that are
not imposed upon members of the other sex.
    (b) Benefits. A recipient that provides any compensation, service,
or benefit to members of one sex pursuant to a State or local law or
other requirement shall provide the same compensation, service, or
benefit to members of the other sex.



Sec. 28.540  Advertising.

    A recipient shall not in any advertising related to employment
indicate preference, limitation, specification, or discrimination based
on sex unless sex is a bona fide occupational qualification for the
particular job in question.



Sec. 28.545  Pre-employment inquiries.

    (a) Marital status. A recipient shall not make pre-employment
inquiry as to the marital status of an applicant for employment,
including whether such applicant is ``Miss'' or ``Mrs.''
    (b) Sex. A recipient may make pre-employment inquiry as to the sex
of an applicant for employment, but only if such inquiry is made equally
of such applicants of both sexes and if the results of such inquiry are
not used in connection with discrimination prohibited by these Title IX
regulations.

[[Page 280]]



Sec. 28.550  Sex as a bona fide occupational qualification.

    A recipient may take action otherwise prohibited by Sec. Sec.
28.500 through 28.550 provided it is shown that sex is a bona fide
occupational qualification for that action, such that consideration of
sex with regard to such action is essential to successful operation of
the employment function concerned. A recipient shall not take action
pursuant to this section that is based upon alleged comparative
employment characteristics or stereotyped characterizations of one or
the other sex, or upon preference based on sex of the recipient,
employees, students, or other persons, but nothing contained in this
section shall prevent a recipient from considering an employee's sex in
relation to employment in a locker room or toilet facility used only by
members of one sex.



                          Subpart F_Procedures



Sec. 28.600  Notice of covered programs.

    Within 60 days of September 29, 2000, each Federal agency that
awards Federal financial assistance shall publish in the Federal
Register a notice of the programs covered by these Title IX regulations.
Each such Federal agency shall periodically republish the notice of
covered programs to reflect changes in covered programs. Copies of this
notice also shall be made available upon request to the Federal agency's
office that enforces Title IX.



Sec. 28.605  Compliance information.

    (a) Cooperation and assistance. The designated agency official shall
to the fullest extent practicable seek the cooperation of recipients in
obtaining compliance with these Title IX regulations and shall provide
assistance and guidance to recipients to help them comply voluntarily
with these Title IX regulations.
    (b) Compliance reports. Each recipient shall keep such records and
submit to the designated agency official (or designee) timely, complete,
and accurate compliance reports at such times, and in such form and
containing such information, as the designated agency official (or
designee) may determine to be necessary to enable the official to
ascertain whether the recipient has complied or is complying with these
Title IX regulations. In the case of any program under which a primary
recipient extends Federal financial assistance to any other recipient,
such other recipient shall also submit such compliance reports to the
primary recipient as may be necessary to enable the primary recipient to
carry out its obligations under these Title IX regulations.
    (c) Access to sources of information. Each recipient shall permit
access by the designated agency official (or designee) during normal
business hours to such of its books, records, accounts, and other
sources of information, and its facilities as may be pertinent to
ascertain compliance with these Title IX regulations. Where any
information required of a recipient is in the exclusive possession of
any other agency, institution or person and this agency, institution or
person shall fail or refuse to furnish this information the recipient
shall so certify in its report and shall set forth what efforts it has
made to obtain the information. Asserted considerations of privacy or
confidentiality may not operate to bar the Department from evaluating or
seeking to enforce compliance with these Title IX regulations.
Information of a confidential nature obtained in connection with
compliance evaluation or enforcement shall not be disclosed except where
necessary in formal enforcement proceedings or where otherwise required
by law.
    (d) Information to beneficiaries and participants. Each recipient
shall make available to participants, beneficiaries, and other
interested persons such information regarding the provisions of these
Title IX regulations and their applicability to the program for which
the recipient receives Federal financial assistance, and make such
information available to them in such manner, as the designated agency
official finds necessary to apprise such persons of the protections
against discrimination assured them by Title IX and these Title IX
regulations.

[65 FR 52882, Aug. 30, 2000]

[[Page 281]]



Sec. 28.610  Conduct of investigations.

    (a) Periodic compliance reviews. The designated agency official (or
designee) shall from time to time review the practices of recipients to
determine whether they are complying with these Title IX regulations.
    (b) Complaints. Any person who believes himself or herself or any
specific class of individuals to be subjected to discrimination
prohibited by these Title IX regulations may by himself or herself or by
a representative file with the designated agency official (or designee)
a written complaint. A complaint must be filed not later than 180 days
from the date of the alleged discrimination, unless the time for filing
is extended by the designated agency official (or designee).
    (c) Investigations. The designated agency official (or designee)
will make a prompt investigation whenever a compliance review, report,
complaint, or any other information indicates a possible failure to
comply with these Title IX regulations. The investigation should
include, where appropriate, a review of the pertinent practices and
policies of the recipient, the circumstances under which the possible
noncompliance with these Title IX regulations occurred, and other
factors relevant to a determination as to whether the recipient has
failed to comply with these Title IX regulations.
    (d) Resolution of matters. (1) If an investigation pursuant to
paragraph (c) of this section indicates a failure to comply with these
Title IX regulations, the designated agency official (or designee) will
so inform the recipient and the matter will be resolved by informal
means whenever possible. If it has been determined that the matter
cannot be resolved by informal means, action will be taken as provided
for in Sec. 28.615.
    (2) If an investigation does not warrant action pursuant to
paragraph (d)(1) of this section the designated agency official (or
designee) will so inform the recipient and the complainant, if any, in
writing.
    (e) Intimidatory or retaliatory acts prohibited. No recipient or
other person shall intimidate, threaten, coerce, or discriminate against
any individual for the purpose of interfering with any right or
privilege secured by Title IX or these Title IX regulations, or because
he or she has made a complaint, testified, assisted, or participated in
any manner in an investigation, proceeding or hearing under these Title
IX regulations. The identity of complainants shall be kept confidential
except to the extent necessary to carry out the purposes of these Title
IX regulations, including the conduct of any investigation, hearing, or
judicial proceeding arising under these Title IX regulations.

[65 FR 52882, Aug. 30, 2000]



Sec. 28.615  Procedure for effecting compliance.

    (a) General. If there appears to be a failure or threatened failure
to comply with these Title IX regulations, and if the noncompliance or
threatened noncompliance cannot be corrected by informal means,
compliance with these Title IX regulations may be effected by the
suspension or termination of or refusal to grant or to continue Federal
financial assistance or by any other means authorized by law. Such other
means may include, but are not limited to:
    (1) A reference to the Department of Justice with a recommendation
that appropriate proceedings be brought to enforce any rights of the
United States under any law of the United States, or any assurance or
other contractual undertaking; and
    (2) Any applicable proceeding under State or local law.
    (b) Noncompliance with Sec. 28.115. If an applicant fails or
refuses to furnish an assurance or otherwise fails or refuses to comply
with a requirement imposed by or pursuant to Sec. 28.115, Federal
financial assistance may be refused in accordance with the procedures of
paragraph (c) of this section. The Department shall not be required to
provide assistance in such a case during the pendency of the
administrative proceedings under paragraph (c) of this section except
that the Department shall continue assistance during the pendency of
such proceedings where such assistance is due and payable pursuant to an
application therefor approved prior to September 29, 2000.
    (c) Termination of or refusal to grant or to continue Federal
financial assistance.

[[Page 282]]

(1) No order suspending, terminating or refusing to grant or continue
Federal financial assistance shall become effective until:
    (i) The designated agency official has advised the applicant or
recipient of its failure to comply and has determined that compliance
cannot be secured by voluntary means;
    (ii) There has been an express finding on the record, after
opportunity for hearing, of a failure by the applicant or recipient to
comply with a requirement imposed by or pursuant to these Title IX
regulations; and
    (iii) The expiration of 30 days after the Secretary has filed with
the committee of the House, and the committee of the Senate having
legislative jurisdiction over the program involved, a full written
report of the circumstances and the grounds for such action.
    (2) Any action to suspend or terminate or to refuse to grant or to
continue Federal financial assistance shall be limited to the particular
political entity, or part thereof, or other applicant or recipient as to
whom such a finding has been made and shall be limited in its effect to
the particular program, or part thereof, in which such noncompliance has
been so found.
    (d) Other means authorized by law. (1) No action to effect
compliance by any other means authorized by law shall be taken until:
    (i) The designated agency official has determined that compliance
cannot be secured by voluntary means;
    (ii) The recipient has been notified of its failure to comply and of
the action to be taken to effect compliance; and
    (iii) The expiration of at least 10 days from the mailing of such
notice to the recipient.
    (2) During this period of at least 10 days additional efforts shall
be made to persuade the recipient to comply with these Title IX
regulations and to take such corrective action as may be appropriate.

[65 FR 52883, Aug. 30, 2000]



Sec. 28.620  Hearings.

    (a) Opportunity for hearing. Whenever an opportunity for a hearing
is required by Sec. 28.615(c), reasonable notice shall be given by
registered or certified mail, return receipt requested, to the affected
applicant or recipient. This notice shall advise the applicant or
recipient of the action proposed to be taken, the specific provision
under which the proposed action against it is to be taken, and the
matters of fact or law asserted as the basis for this action, and
either:
    (1) Fix a date not less than 20 days after the date of such notice
within which the applicant or recipient may request of the designated
agency official that the matter be scheduled for hearing; or
    (2) Advise the applicant or recipient that the matter in question
has been set down for hearing at a stated place and time. The time and
place so fixed shall be reasonable and shall be subject to change for
cause. The complainant, if any, shall be advised of the time and place
of the hearing. An applicant or recipient may waive a hearing and submit
written information and argument for the record. The failure of an
applicant or recipient to request a hearing for which a date has been
set shall be deemed to be a waiver of the right to a hearing under 20
U.S.C. 1682 and Sec. 28.615(c) and consent to the making of a decision
on the basis of such information as may be filed as the record.
    (b) Time and place of hearing. Hearings shall be held at the offices
of the Department in Washington, DC, at a time fixed by the designated
agency official unless the official determines that the convenience of
the applicant or recipient or of the Department requires that another
place be selected. Hearings shall be held before a hearing officer
designated in accordance with 5 U.S.C. 556(b).
    (c) Right to counsel. In all proceedings under this section, the
applicant or recipient and the Department shall have the right to be
represented by counsel.
    (d) Procedures, evidence, and record. (1) The hearing, decision, and
any administrative review thereof shall be conducted in conformity with
5 U.S.C. 554-557 (sections 5-8 of the Administrative Procedure Act), and
in accordance with such rules of procedure as are proper (and not
inconsistent with this section) relating to the conduct of the hearing,
giving of notices subsequent to those provided for in paragraph (a) of
this

[[Page 283]]

section, taking of testimony, exhibits, arguments and briefs, requests
for findings, and other related matters. Both the Department and the
applicant or recipient shall be entitled to introduce all relevant
evidence on the issues as stated in the notice for hearing or as
determined by the hearing officer at the outset of or during the
hearing. Any person (other than a Government employee considered to be
on official business) who, having been invited or requested to appear
and testify as a witness on the Government's behalf, attends at a time
and place scheduled for a hearing provided for by these Title IX
regulations, may be reimbursed for his or her travel and actual expenses
of attendance in an amount not to exceed the amount payable under the
standardized travel regulations to a Government employee traveling on
official business.
    (2) Technical rules of evidence shall not apply to hearings
conducted pursuant to these Title IX regulations, but rules or
principles designed to assure production of the most credible evidence
available and to subject testimony to test by cross-examination shall be
applied where reasonably necessary by the hearing officer. The hearing
officer may exclude irrelevant, immaterial, or unduly repetitious
evidence. All documents and other evidence offered or taken for the
record shall be open to examination by the parties and opportunity shall
be given to refute facts and arguments advanced on either side of the
issues. A transcript shall be made of the oral evidence except to the
extent the substance thereof is stipulated for the record. All decisions
shall be based upon the hearing record and written findings shall be
made.
    (e) Consolidated or Joint Hearings. In cases in which the same or
related facts are asserted to constitute noncompliance with these Title
IX regulations with respect to two or more programs to which these Title
IX regulations apply, or noncompliance with these Title IX regulations
and the regulations of one or more other Federal departments or agencies
issued under Title IX, the designated agency official may, by agreement
with such other departments or agencies where applicable, provide for
the conduct of consolidated or joint hearings, and for the application
to such hearings of rules of procedures not inconsistent with these
Title IX regulations. Final decisions in such cases, insofar as these
Title IX regulations are concerned, shall be made in accordance with
Sec. 28.625.

[65 FR 52883, Aug. 30, 2000]



Sec. 28.625  Decisions and notices.

    (a) Decisions by hearing officers. After a hearing is held by a
hearing officer such hearing officer shall either make an initial
decision, if so authorized, or certify the entire record including
recommended findings and proposed decision to the reviewing authority
for a final decision, and a copy of such initial decision or
certification shall be mailed to the applicant or recipient and to the
complainant, if any. Where the initial decision referred to in this
paragraph or in paragraph (c) of this section is made by the hearing
officer, the applicant or recipient or the counsel for the Department
may, within the period provided for in the rules of procedure issued by
the designated agency official, file with the reviewing authority
exceptions to the initial decision, with the reasons therefor. Upon the
filing of such exceptions the reviewing authority shall review the
initial decision and issue its own decision thereof including the
reasons therefor. In the absence of exceptions the initial decision
shall constitute the final decision, subject to the provisions of
paragraph (e) of this section.
    (b) Decisions on record or review by the reviewing authority.
Whenever a record is certified to the reviewing authority for decision
or it reviews the decision of a hearing officer pursuant to paragraph
(a) or (c) of this section, the applicant or recipient shall be given
reasonable opportunity to file with it briefs or other written
statements of its contentions, and a copy of the final decision of the
reviewing authority shall be given in writing to the applicant or
recipient and to the complainant, if any.
    (c) Decisions on record where a hearing is waived. Whenever a
hearing is waived pursuant to Sec. 28.620, the reviewing authority
shall make its final decision on the record or refer the matter to a

[[Page 284]]

hearing officer for an initial decision to be made on the record. A copy
of such decision shall be given in writing to the applicant or
recipient, and to the complainant, if any.
    (d) Rulings required. Each decision of a hearing officer or
reviewing authority shall set forth a ruling on each finding,
conclusion, or exception presented, and shall identify the requirement
or requirements imposed by or pursuant to these Title IX regulations
with which it is found that the applicant or recipient has failed to
comply.
    (e) Review in certain cases by the Secretary of the Treasury. If the
Secretary has not personally made the final decision referred to in
paragraph (a), (b), or (c) of this section, a recipient or applicant or
the counsel for the Department may request the Secretary to review a
decision of the reviewing authority in accordance with rules of
procedure issued by the designated agency official. Such review is not a
matter of right and shall be granted only where the Secretary determines
there are special and important reasons therefor. The Secretary may
grant or deny such request, in whole or in part. The Secretary also may
review such a decision upon his own motion in accordance with rules of
procedure issued by the designated agency official. In the absence of a
review under this paragraph (e), a final decision referred to in
paragraph (a), (b), or (c) of this section shall become the final
decision of the Department when the Secretary transmits it as such to
congressional committees with the report required under 20 U.S.C. 1682.
Failure of an applicant or recipient to file an exception with the
reviewing authority or to request review under this paragraph (e) shall
not be deemed a failure to exhaust administrative remedies for the
purpose of obtaining judicial review.
    (f) Content of orders. The final decision may provide for suspension
or termination of, or refusal to grant or continue Federal financial
assistance, in whole or in part, to which these Title IX regulations
apply, and may contain such terms, conditions, and other provisions as
are consistent with and will effectuate the purposes of Title IX and
these Title IX regulations, including provisions designed to assure that
no Federal financial assistance to which these Title IX regulations
apply will thereafter be extended under such law or laws to the
applicant or recipient determined by such decision to be in default in
its performance of an assurance given by it pursuant to these Title IX
regulations, or to have otherwise failed to comply with these Title IX
regulations unless and until it corrects its noncompliance and satisfies
the designated agency official that it will fully comply with these
Title IX regulations.
    (g) Post-termination proceedings. (1) An applicant or recipient
adversely affected by an order issued under paragraph (f) of this
section shall be restored to full eligibility to receive Federal
financial assistance if it satisfies the terms and conditions of that
order for such eligibility or if it brings itself into compliance with
these Title IX regulations and provides reasonable assurance that it
will fully comply with these Title IX regulations. An elementary or
secondary school or school system that is unable to file an assurance of
compliance shall be restored to full eligibility to receive Federal
financial assistance if it files a court order or a plan for
desegregation that meets the applicable requirements and provides
reasonable assurance that it will comply with the court order or plan.
    (2) Any applicant or recipient adversely affected by an order
entered pursuant to paragraph (f) of this section may at any time
request the designated agency official to restore fully its eligibility
to receive Federal financial assistance. Any such request shall be
supported by information showing that the applicant or recipient has met
the requirements of paragraph (g)(1) of this section. If the designated
agency official determines that those requirements have been satisfied,
the official shall restore such eligibility.
    (3) If the designated agency official denies any such request, the
applicant or recipient may submit a request for a hearing in writing,
specifying why it believes such official to have been in error. It shall
thereupon be given an expeditious hearing, with a decision on the
record, in accordance with rules of procedure issued by the designated

[[Page 285]]

agency official. The applicant or recipient will be restored to such
eligibility if it proves at such hearing that it satisfied the
requirements of paragraph (g)(1) of this section. While proceedings
under this paragraph (g) are pending, the sanctions imposed by the order
issued under paragraph (f) of this section shall remain in effect.

[65 FR 52884, Aug. 30, 2000]



Sec. 28.630  Judicial review.

    Action taken pursuant to 20 U.S.C. 1682 is subject to judicial
review as provided in 20 U.S.C. 1683.

[65 FR 52885, Aug. 30, 2000]



Sec. 28.635  Forms and instructions; coordination.

    (a) Forms and instructions. The designated agency official shall
issue and promptly make available to interested persons forms and
detailed instructions and procedures for effectuating these Title IX
regulations.
    (b) Supervision and coordination. The designated agency official may
from time to time assign to officials of the Department, or to officials
of other departments or agencies of the Government with the consent of
such departments or agencies, responsibilities in connection with the
effectuation of the purposes of Title IX and these Title IX regulations
(other than responsibility for review as provided in Sec. 28.625(e)),
including the achievements of effective coordination and maximum
uniformity within the Department and within the Executive Branch of the
Government in the application of Title IX and these Title IX regulations
to similar programs and in similar situations. Any action taken,
determination made, or requirement imposed by an official of another
department or agency acting pursuant to an assignment of responsibility
under this section shall have the same effect as though such action had
been taken by the designated official of this Department.

[65 FR 52885, Aug. 30, 2000]



PART 29_FEDERAL BENEFIT PAYMENTS UNDER CERTAIN DISTRICT OF COLUMBIA
RETIREMENT PROGRAMS--Table of Contents



                      Subpart A_General Provisions

Sec.
29.101 Purpose and scope.
29.102 Related regulations.
29.103 Definitions.
29.104 Schedule for Federal Benefit Payments.
29.105 Computation of time.
29.106 Representative payees.

           Subpart B_Coordination With the District Government

29.201 Purpose and scope.
29.202 Definitions. [Reserved]
29.203 Service of Process.

Appendix A to Subpart B of Part 29--Addresses for Service of Process
          Under Sec. 29.203

                        Subpart C_Split Benefits

29.301 Purpose and scope.
29.302 Definitions.

 General Principles for Determining Service Credit To Calculate Federal
                            Benefit Payments

29.311 Credit only for service performed on or before June 30, 1997.
29.312 All requirements for credit must be satisfied by June 30, 1997.
29.313 Federal Benefit Payments are computed based on retirement
          eligibility as of the separation date and service creditable
          as of June 30, 1997.

                  Service Performed After June 30, 1997

29.321 General principle.
29.322 Disability benefits.

     All Requirements for Credit Must Be Satisfied by June 30, 1997

29.331 General principle.
29.332 Unused sick leave.
29.333 Military service.
29.334 Deposit service.
29.335 Refunded service.

          Calculation of the Amount of Federal Benefit Payments

29.341 General principle.
29.342 Computed annuity exceeds the statutory maximum.
29.343 Disability benefits.
29.344 Survivor benefits.
29.345 Cost-of-living adjustments.
29.346 Reduction for survivor benefits.

[[Page 286]]

   Calculation of the Split of Refunds of Employee Contributions and
                                Deposits

29.351 General principle.
29.352 Refunded contributions.
29.353 Refunded deposits.

Appendix A to Subpart C of Part 29--Examples

                 Subpart D_Claims and Appeals Procedures

29.401 Purpose.
29.402 Definitions.
29.403 Applications filed with the Benefits Administrator.
29.404 Initial benefit determinations and reconsideration by the
          Benefits Administrator.
29.405 Appeals to the Department.
29.406 Judicial review.
29.407 Competing claimants.

           Subpart E_Debt Collection and Waivers of Collection

29.501 Purpose; incorporation by reference; scope.
29.502 Definitions.
29.503 Prohibition against collection of debts.
29.504 Status of debts.
29.505 Compromise of claims; termination and suspension of collection
          actions.
29.506 Recovery of other debts owed to the United States.

                       Collection of Overpayments

29.511 Demand letters.
29.512 Reconsideration by the Benefits Administrator.
29.513 Appeals to the Department.
29.514 Requests for waiver and/or compromise.
29.515 Judicial review.
29.516 Collection of overpayments.
29.517 Collection by offset.
29.518 Reporting delinquent debts to credit bureaus.
29.519 Referral to a collection agency.
29.520 Referral for litigation.

                  Standards for Waiver of Overpayments

29.521 Conditions for waiver and other adjustments.
29.522 Fault.
29.523 Equity and good conscience.
29.524 Financial hardship.
29.525 Ordinary and necessary living expenses.
29.526 Waiver precluded.

    Authority: Subtitle A and Chapter 3 of Subtitle H, of Pub. L. 105-
33, 111 Stat. 712-731 and 786-787; as amended.

    Source: 65 FR 77501, Dec. 12, 2000, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 29.101  Purpose and scope.

    (a) This part contains the Department's regulations implementing
Subtitle A, Subchapter B of Chapter 4 of Subtitle C, and Chapter 3 of
Subtitle H, of Title XI of the Balanced Budget Act of 1997, Public Law
105-33, 111 Stat. 251, 712-731, 756-759, enacted August 5, 1997, as
amended.
    (b) This subpart contains general information to assist in the use
of this part including--
    (1) Information about related regulations (Sec. 29.102),
    (2) Definitions of terms used in more than one subpart of this part
(Sec. 29.103), and
    (3) The Department's general rules and procedures, applicable to the
retirement plans for District of Columbia teachers, police and fire
fighters, and judges that concern the administration of Federal Benefit
Payments (Sec. Sec. 29.104-29.106).
    (c) This part applies to Federal Benefit Payments.
    (d) This part does not apply to the program of annuities, other
retirement benefits, or medical benefits for members and officers,
retired members and officers, and survivors thereof, of the United
States Park Police force, the United States Secret Service, or the
United States Secret Service Uniformed Division.
    (e) This part does not apply to the District of Columbia replacement
plan, which covers payments based on service accrued after June 30,
1997, pursuant to section 11042 of the Act.

[65 FR 77501, Dec. 12, 2000, as amended at 70 FR 60004, Oct. 14, 2005]



Sec. 29.102  Related regulations.

    (a) This part contains the following subparts:
    (1) General Provisions (Subpart A);
    (2) Coordination with the District Government (Subpart B);
    (3) Split Benefits (Subpart C); \1\
---------------------------------------------------------------------------

    \1\ The effective date for section 29.102(a)(3) and Subpart C,
originally scheduled for March 31, 2001, has been postponed
indefinitely.
---------------------------------------------------------------------------

    (4) Claims and Appeals Procedures (Subpart D); and

[[Page 287]]

    (5) Debt Collection and Waivers of Collection (Subpart E).
    (b) Part 581 of Title 5, Code of Federal Regulations, contains
information about garnishment of certain Federal payments to enforce
awards of alimony or child support.
    (c) Part 831 of Title 5, Code of Federal Regulations, contains
information about benefits under the Civil Service Retirement System.
    (d) Part 870 of Title 5, Code of Federal Regulations, contains
information about benefits under the Federal Employees Group Life
Insurance Program.
    (e) Part 890 of Title 5, Code of Federal Regulations, contains
information about benefits under the Federal Employees Health Benefits
Program.
    (f) Parts 835 and 845 and subparts M, N, and R of part 831 of title
5, Code of Federal Regulations, contain information about debt
collection and waiver of collection under the Civil Service Retirement
System and the Federal Employees Retirement System.

[65 FR 77501, Dec. 12, 2000, as amended at 65 FR 80753, Dec. 22, 2000;
66 FR 36705, July 13, 2001]



Sec. 29.103  Definitions.

    (a) In this part--
    Act means Subtitle A, Subchapter B of Chapter 4 of Subtitle C, and
Chapter 3 of Subtitle H, of Title XI of the Balanced Budget Act of 1997,
Public Law 105-33, 111 Stat. 251, 712-731, 756-759, as amended.
    Benefits Administrator means:
    (1) For the Teachers Plan and the Police and Firefighters Plan under
section 11041(a) of the Act:
    (i) During the interim benefits administration period, the District
of Columbia government; or
    (ii) After the end of the interim benefits administration period:
    (A) The Trustee selected by the Department under sections 11035(a)
or 11085(a) of the Act;
    (B) The Department, if a determination is made under sections
11035(d) or 11085(d) of the Act that, in the interest of economy and
efficiency, the function of the Trustee shall be performed by the
Department rather than the Trustee; or
    (C) Any other agent of the Department designated to make initial
benefit determinations and/or to recover or recoup or waive recovery or
recoupment of overpayments of Federal Benefit Payments, or to recover or
recoup debts owed to the Federal Government by annuitants; or
    (2) For the Judges Plan under section 11252(b) of the Act:
    (i) During the interim benefits administration period, the District
of Columbia government; or
    (ii) After the end of the interim benefits administration period for
the Judges Plan:
    (A) The Trustee selected by the Department under section 11251(a) of
the Act;
    (B) The Department, if a determination is made under section
11251(a) of the Act that, in the interest of economy and efficiency, the
function of the Trustee shall be performed by the Department rather than
the Trustee; or
    (C) Any other agent of the Department designated to make initial
benefit determinations and/or to recover or recoup or waive recovery or
recoupment of overpayments of Federal Benefit Payments, or to recover or
recoup debts owed to the Federal Government by annuitants.
    District government means the government of the District of
Columbia.
    Department means the United States Department of the Treasury.
    Federal Benefit Payment means a payment for which the Department is
responsible under the Act, to which an individual is entitled under the
Judges Plan, the Police and Firefighters Plan, or the Teachers Plan, in
such amount and under such terms and conditions as may apply under such
plans, including payments made under these plans before, on, or after
the October 1, 1997, effective date of the Act. Service after June 30,
1997, shall not be credited for purposes of determining the amount of
any Federal Benefit Payment under the Teachers Plan and the Police and
Firefighters Plan.
    Freeze date means June 30, 1997.
    Judges Plan means the retirement program (under subchapter III of
chapter 15 of title 11 of the D.C. Code) for judges of the District of
Columbia Court of Appeals or Superior Court or with judicial service
with the former

[[Page 288]]

Juvenile Court of the District of Columbia, District of Columbia Tax
Court, police court, municipal court, Municipal Court of Appeals, or
District of Columbia Court of General Sessions.
    OPM means the United States Office of Personnel Management.
    Police and Firefighters Plan means any of the retirement programs
(under chapter 6 of title 4 of the D.C. Code) for members of the
Metropolitan Police Force and Fire Department in effect on June 29,
1997.
    Reconsideration means the process of reexamining an individual's
entitlement to benefits or liability for a debt to determine whether--
    (1) The law and regulations were properly applied; and/or
    (2) The mathematical computation of the benefit or liability is
correct.
    Retirement Funds means the District of Columbia Teachers, Police
Officers, and Firefighters Federal Pension Fund established under
section 11081 of the Act, the District of Columbia Judicial Retirement
and Survivors Annuity Fund established under section 11252 of the Act,
and their predecessor funds.
    Secretary means the Secretary of the United States Department of the
Treasury or his or her designee.
    Teachers Plan means any of the retirement programs for teachers
(under chapter 12 of title 31 of the D.C. Code) in effect on June 29,
1997.
    (b) In this subpart--
    Legal process means--
    (1) Any document that qualifies as legal process as defined in Sec.
581.103 of Title 5, Code of Federal Regulations; or
    (2) Any court order that Federal or District of Columbia law permits
to cause all or any portion of a payment under the Judges Plan, the
Police and Firefighters Plan, or the Teachers Plan to be made to a
former spouse under chapter 30 of title 1 of the D.C. Code (1997).
    Representative payee means a fiduciary to whom a payment under the
Judges Plan, the Police and Firefighters Plan, or the Teachers Plan is
made for the benefit of a plan participant or a survivor.

[65 FR 77501, Dec. 12, 2000, as amended at 66 FR 36705, July 13, 2001;
70 FR 60004, Oct. 14, 2005]



Sec. 29.104  Schedule for Federal Benefit Payments.

    Federal Benefit Payments are payable on the first business day of
the month following the month in which the benefit accrues. (See Sec.
29.105(b).)



Sec. 29.105  Computation of time.

    (a) For filing documents. In computing the number of days allowed
for filing a document, the first day counted is the day after the action
or event from which the period begins to run. If the date that
ordinarily would be the last day for filing falls on a Saturday, a
Sunday, a Federal holiday, or a District holiday, the period runs until
the end of the next day that is not a Saturday, a Sunday, or a Federal
or a District holiday.
    (b) For benefit accrual. (1) Annuity accrues on a daily basis; one-
thirtieth of the monthly rate constitutes the daily rate.
    (2) Annuity does not accrue on the 31st day of any month except that
annuity accrues on the 31st day of the initial month if the employee's
annuity commences on the 31st day of a 31-day month.
    (3) For accrual purposes the last day of a 28-day month counts as 3
days and the last day of a 29-day month counts as 2 days.
    (c) For counting unused sick leave. (1) For annuity computation
purposes--
    (i) The service of a participant under the Police and Firefighters
Plan who retires on an immediate annuity is increased by the number of
days of unused sick leave to the participant's credit under a formal
leave system; and
    (ii) The service of a participant under the Teachers Plan who
retires on an immediate annuity or dies leaving a survivor entitled to
an annuity is increased by the number of days of unused sick leave to
the participant's credit under a formal leave system.
    (2) In general, 8 hours of unused sick leave increases total service
by 1 day. In cases where more or less than 8 hours of sick leave would
be charged for a day's absence, total service is increased by the number
of days in the period between the date of separation and the date that
the unused sick leave would have expired had the employee used it
(except that holidays falling

[[Page 289]]

within the period are treated as work days, and no additional leave
credit is earned for that period).
    (3) If an employee's tour of duty changes from part time to full
time or full time to part time within 180 days before retirement, the
credit for unused sick leave is computed as though no change had
occurred.
    (d) For counting leave without pay (LWOP) that is creditable
service. (1) Under the Police and Firefighters Plan, credit is allowed
for no more than 6 months of LWOP in each calendar year.
    (2)(i) Under the Teachers Plan, credit is allowed for no more than 6
months of LWOP in each fiscal year.
    (ii)(A) For years prior to fiscal year 1976, each fiscal year
started on July 1 and ended on the following June 30.
    (B) Fiscal year 1976 started on July 1, 1975, and ended on September
30, 1976.
    (C) For years starting in fiscal year 1977, each fiscal year starts
on October 1 and ends on the following September 30.



Sec. 29.106  Representative payees.

    For Federal Benefit Payments, representative payees will be
authorized to the same extent and under the same circumstances as each
plan permits for non-Federal Benefit Payments under the plan. (See e.g.,
section 4-629(b) of the D.C. Code (1997) (applicable to the Police and
Firefighters Plan).)



           Subpart B_Coordination With the District Government



Sec. 29.201  Purpose and scope.

    This subpart contains information concerning the relationship
between the Department and the District government in the administration
of the Act and the functions of each in the administration of that Act.

[70 FR 60005, Oct. 14, 2005]



Sec. 29.202  Definitions. [Reserved]



Sec. 29.203  Service of Process.

    To affect Federal Benefit Payments--
    (a) Service must be made upon the Department at the address provided
in appendix A to this subpart for--
    (1) Legal process under section 659 of title 42, United States Code,
and part 581 of Title 5, Code of Federal Regulations, or
    (2) Any request for or notice of appointment of a custodian,
guardian, or other fiduciary to receive Federal Benefit Payments as
representative payees under Sec. 29.106;
    (b) All other process regarding Federal Benefit Payments (including
requests for judicial review under Sec. 29.406) must be served upon the
United States in accordance with applicable law.
    (c) All other process regarding Federal Benefit Payments must be
served upon the United States in accordance with applicable law.



  Sec. Appendix A to Subpart B of Part 29--Addresses for Service Under
                              Sec. 29.203

    1. The mailing address for delivery of documents described in Sec.
29.203(a) by the United States Postal Service is: Office of DC Pensions,
Department of the Treasury, Metropolitan Square Building, Room 6250,
1500 Pennsylvania Avenue, NW., Washington, DC 20220.
    2. The address for delivery of documents described in Sec.
29.203(a) by process servers, express carriers, or other forms of
handcarried delivery is: Office of DC Pensions, Department of the
Treasury, Metropolitan Square Building, Room 6250, 655 15th Street (F
Street side), NW., Washington, DC.

[65 FR 77501, Dec. 12, 2000, as amended at 65 FR 80753, Dec. 22, 2000]



                        Subpart C_Split Benefits

    Source: 77 FR 64225, Oct. 19, 2012, unless otherwise noted.



Sec. 29.301  Purpose and scope.

    (a) The purpose of this subpart is to addresses the legal and policy
issues that affect the calculation of the Federal and District of
Columbia portions of benefits under subtitle A of Title XI of the
Balanced Budget Act of 1997, Public Law 105-33, 111 Stat. 251, 712-731,
and 786-787 enacted August 5, 1997, as amended.
    (1) This subpart states general principles for the calculation of
Federal Benefit Payments in cases in which the Department and the
District government are both responsible for paying a portion of an
employee's total retirement benefits under the Police and Firefighters
Plan or the Teachers Plan.

[[Page 290]]

    (2) This subpart provides illustrative examples of sample
computations to show the application of the general principles to
specific problems.
    (b)(1) This subpart applies only to benefits under the Police and
Firefighters Plan or the Teachers Plan for individuals who have
performed service creditable under these programs on or before June 30,
1997.
    (2) This subpart addresses only those issues that affect the split
of fiscal responsibility for retirement benefits (that is, the
calculation of Federal Benefit Payments).
    (3) Issues relating to determination and review of eligibility and
payments, and financial management, are beyond the scope of this
subpart.
    (c) This subpart does not apply to benefit calculations under the
Judges Plan.



Sec. 29.302  Definitions.

    In this subpart (including appendix A of this subpart)--
    Deferred retirement means retirement under section 4-623 of the D.C.
Code (1997) (under the Police and Firefighters Plan) or section 31-
1231(a) of the D.C. Code (1997) (under the Teachers Plan).
    Deferred retirement age means the age at which a deferred annuity
begins to accrue, that is, age 55 under the Police and Firefighters Plan
and age 62 under the Teachers Plan.
    Department service or departmental service means any period of
employment in a position covered by the Police and Firefighters Plan or
Teachers Plan. Department service or departmental service may include
certain periods of military service that interrupt a period of
employment under the Police and Firefighters Plan or the Teachers Plan.
    Disability retirement means retirement under section 4-615 or
section 4-616 of the D.C. Code (1997) (under the Police and Firefighters
Plan) or section 31-1225 of the D.C. Code (1997) (under the Teachers
Plan), regardless of whether the disability was incurred in the line of
duty.
    Enter on duty means commencement of employment in a position covered
by the Police and Firefighters Plan or the Teachers Plan.
    Excess leave without pay or excess LWOP means a period of time in a
non-pay status that in any year is greater than the amount creditable as
service under Sec. 29.105(d).
    Hire date means the date the employee entered on duty.
    Military service means-
    (1) For the Police and Firefighters Plan, military service as
defined in section 4-607 of the D.C. Code (1997) that is creditable as
other service under section 4-602 or section 4-610 of the D.C. Code
(1997); and
    (2) For the Teachers Plan, military service as described in section
31-1230(a)(4) of the D.C. Code (1997).
    Optional retirement means regular longevity retirement under section
4-618 of the D.C. Code (1997) (under the Police and Firefighters Plan)
or section 31-1224(a) of the D.C. Code (1997) (under the Teachers Plan).
    Other service means any period of creditable service other than
departmental service or unused sick leave. Other service includes
service that becomes creditable upon payment of a deposit, such as
service in another school system (under section 31-1208 of the D.C. Code
(1997)) (under the Teachers Plan) or prior governmental service (under
the Teachers Plan and the Police and Firefighters Plan); and service
that is creditable without payment of a deposit, such as military
service occurring prior to employment (under the Teachers Plan and the
Police and Firefighters Plan).
    Pre-80 hire means an individual whose annuity is computed using the
formula under the Police and Firefighters Plan applicable to individuals
hired before February 15, 1980.
    Pre-96 hire means an individual whose annuity is computed using the
formula under the Teachers Plan applicable to individuals hired before
November 1, 1996.
    Sick leave means unused sick leave, which is creditable in a
retirement computation, as calculated under Sec. 29.105(c).

[[Page 291]]

 General Principles for Determining Service Credit To Calculate Federal
                            Benefit Payments



Sec. 29.311  Credit only for service performed on or before June 30, 1997.

    Only service performed on or before June 30, 1997, is credited
toward Federal Benefit Payments.



Sec. 29.312  All requirements for credit must be satisfied by June 30, 1997.

    Service is counted toward Federal Benefit Payments only if all
requirements for the service to be creditable are satisfied as of June
30, 1997.



Sec. 29.313  Federal Benefit Payments are computed based on retirement
eligibility as of the separation date and service creditable as of

June 30, 1997.

    Except as otherwise provided in this subpart, the amount of Federal
Benefit Payments is computed based on retirement eligibility as of the
separation date and service creditable as of June 30, 1997.

                  Service Performed After June 30, 1997



Sec. 29.321  General principle.

    Any service performed after June 30, 1997, may never be credited
toward Federal Benefit Payments.



Sec. 29.322  Disability benefits.

    If an employee separates for disability retirement after June 30,
1997, and, on the date of separation, the employee--
    (a) Satisfies the age and service requirements for optional
retirement, the Federal Benefit Payment commences immediately, that is,
the Federal Benefit Payment is calculated as though the employee retired
under optional retirement rules using only service through June 30, 1997
(See examples 7A and 7B of appendix A of this subpart); or
    (b) Does not satisfy the age and service requirements for optional
retirement, the Federal Benefit Payment begins when the disability
retiree reaches deferred retirement age. (See Sec. 29.343.)

     All Requirements for Credit Must Be Satisfied by June 30, 1997



Sec. 29.331  General principle.

    To determine whether service is creditable for the computation of
Federal Benefit Payments under this subpart, the controlling factor is
whether all requirements for the service to be creditable under the
Police and Firefighters Plan or the Teachers Plan were satisfied as of
June 30, 1997.



Sec. 29.332  Unused sick leave.

    (a) For employees separated for retirement as of June 30, 1997,
Federal Benefit Payments include credit for any unused sick leave that
is creditable under the applicable plan.
    (b) For employees separated for retirement after June 30, 1997, no
unused sick leave is creditable toward Federal Benefit Payments.



Sec. 29.333  Military service.

    (a) For employees who entered on duty on or before June 30, 1997,
and whose military service was performed prior to that date, credit for
military service is included in Federal Benefit Payments under the terms
and conditions applicable to each plan.
    (b) For employees who enter on duty after June 30, 1997, military
service is not creditable toward Federal Benefit Payments, even if
performed as of June 30, 1997.
    (c) For employees who entered on duty on or before June 30, 1997,
but who perform military service after that date, the credit for
military service is not included in Federal Benefit Payments.



Sec. 29.334  Deposit service.

    (a) Teachers Plan. (1) Periods of civilian service that were not
subject to retirement deductions at the time they were performed are
creditable for Federal Benefit Payments under the Teachers Plan if the
deposit for the service was paid in full to the Teachers Plan as of June
30, 1997.
    (2) No credit is allowed for Federal Benefit Payments under the
Teachers Plan for any period of civilian service that was not subject to
retirement deductions at the time it was performed

[[Page 292]]

if the deposit for the service was not paid in full as of June 30, 1997.
    (3) If the deposit for the service was paid in installments, but was
not paid in full as of June 30, 1997, Treasury shall transfer to the
District an amount equal to the portion of the deposit completed prior
to June 30, 1997.
    (b) Police and Firefighters Plan. No credit is allowed for Federal
Benefit Payments under the Police and Firefighters Plan for any period
of civilian service that was not subject to retirement deductions at the
time that the service was performed. (See definition of ``governmental
service'' at D.C. Code section 4-607(15) (1997).)



Sec. 29.335  Refunded service.

    (a) Periods of civilian service that were subject to retirement
deductions but for which the deductions were refunded to the employee
are creditable for Federal Benefit Payments if the redeposit for the
service was paid in full to the District government as of June 30, 1997.
    (b) No credit is allowed for Federal Benefit Payments for any period
of civilian service that was subject to retirement deductions but for
which the deductions were refunded to the employee if the redeposit for
the service was not paid in full to the District government as of June
30, 1997.
    (c) If the redeposit for the service was paid in installments, but
was not paid in full as of June 30, 1997, Treasury shall transfer to the
District an amount equal to the portion of the redeposit completed prior
to June 30, 1997.

          Calculation of the Amount of Federal Benefit Payments



Sec. 29.341  General principle.

    (a) Where service is creditable both before and after June 30, 1997,
Federal Benefit Payments are computed under the rules of the applicable
plan as though--
    (1) The employee were eligible to retire effective July 1, 1997,
under the same conditions as the actual retirement (that is, using the
annuity computation formula that applies under the plan in effect on
June 29, 1997, and the retirement age, including any applicable age
reduction, based on the age at actual retirement);
    (2) The service that became creditable after June 30, 1997, did not
exist; and
    (3) The average salary is the average salary at separation.
    (b) Exceptions to the general principle apply where:
    (1) Congress amends the terms of the District Retirement Program in
effect on June 29, 1997. For example, see section 11012(e) & (f) of the
Balanced Budget Act of 1997, as amended by Public Laws 106-554, 107-290,
and 108-133 (codified at D.C. Code section 1-803.02(e) and (f));
    (2) The retirement is based on disability after June 30, 1997 (see
29.343); or
    (3) The benefit is based on the death of an employee after June 30,
1997 and the survivor benefit is not based on years of service (see
29.344).

    Note to Sec. 29.341: See examples 7B, 9, and 13 of appendix A of
this subpart.



Sec. 29.342  Computed annuity exceeds the statutory maximum.

    (a) In cases in which the total computed annuity exceeds the
statutory maximum:
    (1) Federal Benefit Payments may equal total benefits even if the
employee had service after June 30, 1997.
    (2) If the employee had sufficient service as of June 30, 1997, to
qualify for the maximum annuity under the plan, the Federal Benefit
Payment is the maximum annuity under the plan. This will be the entire
benefit except for any amount in excess of the normal maximum due to
unused sick leave, which is the responsibility of the District. (See
example 3, of appendix A of this subpart.)
    (b) If the employee did not perform sufficient service as of June
30, 1997, to reach the statutory maximum benefit, but has sufficient
service at actual retirement to exceed the statutory maximum, the
Federal Benefit Payment is the amount earned through June 30, 1997. The
District benefit payment is the amount by which the total benefit
payable exceeds the Federal Benefit Payment.

[[Page 293]]



Sec. 29.343  Disability benefits.

    (a) The general rule that Federal Benefit Payments are calculated
under the applicable retirement plan as though the employee were
eligible for optional retirement and separated on June 30, 1997, does
not apply to disability benefits prior to optional retirement age.
    (b) In cases involving disability benefits prior to optional
retirement age, no Federal Benefit Payment is payable until the retiree
reaches the age of eligibility to receive a deferred annuity (age 55
under the Police and Firefighters Plan and age 62 under the Teachers
Plan). When the age for deferred annuity is reached, the Federal Benefit
Payment is paid using creditable service accrued as of June 30, 1997,
and average salary (computed under the rules for the applicable plan) as
of the date of separation. (See examples 6 and 7 of appendix A of this
subpart.)
    (c) In no case will the amount of the Federal Benefit Payment exceed
the amount of the total disability annuity.



Sec. 29.344  Survivor benefits.

    (a) The general rule that Federal Benefit Payments are calculated
under the applicable retirement plan as though the employee were
eligible for optional retirement and separated on June 30, 1997, applies
to death benefits that are determined by length of service. In these
cases, the survivor's Federal Benefit Payment is calculated by
multiplying the survivor's total benefit by the ratio of the deceased
retiree or employee's Federal Benefit Payment to the deceased retiree or
employee's total annuity. (See examples 13A and B of appendix A of this
subpart.)
    (b) The general rule that Federal Benefit Payments are calculated
under the applicable retirement plan as though the employee were
eligible for optional retirement and separated on June 30, 1997, does
not apply to death benefits that are not determined by length of
service. In these cases, the survivor's Federal Benefit Payment is
calculated by multiplying the survivor's total benefit by the deceased
retiree or employee's number of full months of service through June 30,
1997, and then dividing by the retiree or employee's number of months of
total service at retirement. (See examples 13C-F of appendix A of this
subpart.)
    (c) In cases involving a disability or early voluntary retiree who
dies before reaching the age at which a Federal Benefit Payment is
payable, the survivor's Federal Benefit Payment is calculated as though
the employee had not retired from service, but had separated from
service with eligibility to receive a deferred annuity. (See examples
13G and 13H of appendix A of this subpart.)



Sec. 29.345  Annuity adjustments.

    (a) In cases in which the total annuity and the Federal Benefit
Payment are equally impacted by a cost-of-living adjustment, the new
Federal Benefit Payment is determined by applying the federal percentage
of the total annuity to the new total annuity. (See examples 14A-G of
appendix A of this subpart.)
    (b) In cases in which the total annuity and the Federal Benefit
Payment are not equally impacted by a change, such as a new plan
provision or service-based adjustment, the Federal Benefit Payment is
recalculated where applicable, and the federal percentage of the total
annuity used to determine subsequent Federal Benefit Payments is
recalculated. (See example 14H of appendix A of this subpart.)



Sec. 29.346  Reduction for survivor benefits.

    If a retiree elects a reduction for a survivor annuity, the ratio of
the unreduced Federal Benefit Payment to the unreduced total annuity is
multiplied by the reduced total annuity to determine the reduced Federal
Benefit Payment. (See example 10 of appendix A of this subpart.)

   Calculation of the Split of Refunds of Employee Contributions and
                                Deposits



Sec. 29.351  General principle.

    Treasury will fund refunds of employee contributions and purchase of
service deposits paid by or on behalf of a covered employee to the
District of Columbia Police Officers' and Firefighters' Retirement Fund
or District

[[Page 294]]

of Columbia Teachers' Retirement Fund on or before June 30, 1997.



Sec. 29.352  Refunded contributions.

    For any given pay period, employee contributions are considered to
have been made before the freeze date if the pay date was on or before
June 30, 1997. As a result, for calendar year 1997, Treasury will fund
refunds of employee contributions made by teachers through pay period 12
and fund refunds of employee contributions made by police officers and
firefighters through pay period 13. If pay period records are
unavailable for calendar year 1997, and the participant separated on or
before June 30, 1997, Treasury will fund 100 percent of the refund of
retirement contributions. If pay period records are unavailable for
calendar year 1997, and the participant was hired before January 1,
1997, and separated after December 31, 1997, Treasury will fund 50
percent of the refund of retirement contributions made to teachers in
calendar year 1997, and 48 percent of the retirement contributions made
to police officers or firefighters in calendar year 1997. Otherwise, if
the participant separated after June 30, 1997, the percent of
contributions made in calendar year 1997 funded by Treasury is assumed
to be the ratio where the numerator is the number of days before July 1
the participant was employed in calendar year 1997 and the denominator
is the number of days the participant was employed in calendar year
1997.



Sec. 29.353  Refunded deposits.

    Treasury will fund refunds of purchase of service deposits made by
employees by lump sum payment or by installment payments on or before
June 30, 1997.



            Sec. Appendix A to Subpart C of Part 29--Examples

    This appendix contains sample calculations of Federal Benefit
Payments in a variety of situations.

                      Optional Retirement Examples

                     Example 1: No Unused Sick Leave

    A. In this example, an individual covered by the Police and
Firefighters Plan hired before 1980 retires in October 1997. At
retirement, he is age 51 with 20 years and 3 days of departmental
service plus 3 years, 4 months, and 21 days of military service that
preceded the departmental service. The Federal Benefit Payment begins at
retirement. It is based on the 19 years, 8 months, and 22 days of
departmental service and 3 years, 4 months, and 21 days of military
service performed as of June 30, 1997. Thus, the Federal Benefit Payment
is based on 23 years and 1 month of service, all at the 2.5 percent
accrual rate. The total annuity is based on 23 years and 4 months of
service, all at the 2.5 percent accrual rate.

                       Example 1A--Police Optional
                              [Pre-80 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/10/46
Hire date: 10/09/77
Separation date: 10/11/97
Department service: 20/00/03
Other service: 03/04/21
Sick leave:
.025 service: 23.333333
.03 service:
Average salary: $45,680.80
Total: $26,647.12
Total/month: $2,221.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 9/10/46
Hire date: 10/09/77
Freeze date: 06/30/97
Department service: 19/08/22
Other service: 03/04/21
Sick leave:
.025 service: 23.083333
.03 service:
Average salary: $45,680.80
Total: $26,361.61
Total/month: $2,197.00
Total federal/month / total/month: 0.989194
------------------------------------------------------------------------

    B. In this example, the individual covered by the Police and
Firefighters Plan was hired earlier than in example 1A and thus
performed more service as of both June 30, 1997, and retirement in
October 1997. At retirement, he is age 51 with 21 years, 11 months and
29 days of departmental service plus 3 years, 4 months, and 21 days of
military service that preceded the departmental service. The Federal
Benefit Payment begins at retirement. It is based on the 21 years, 8
months, and 18 days of departmental service and 3 years, 4 months, and
21 days of military service performed as of June 30, 1997. Thus, the
Federal Benefit Payment is based on 25 years and 1 month of service, 1
year

[[Page 295]]

and 8 months at the 3.0 percent accrual rate and 23 years and 5 months
at the 2.5 percent accrual rate (including 1 month consisting of 18 days
of departmental service and 21 days of other service). The total annuity
is based on 25 years and 4 months of service, 1 year and 11 months at
the 3.0 percent accrual rate and 23 years and 5 months at the 2.5
percent accrual rate (including 1 month consisting of 29 days of
departmental service and 21 days of other service).

                       Example 1B--Police Optional
                              [Pre-80 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/10/46
Hire date: 10/13/75
Separation date: 10/11/97
Department service: 21/11/29
Other service: 03/04/21
Sick leave:
.025 service: 23.416667
.03 service: 1.916667
Average salary: $45,680.80
Total: $29,368.96
Total/month $2,447.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 09/10/46
Hire date: 10/13/75
Freeze date: 06/30/97
Department service: 21/08/18
Other service: 03/04/21
Sick leave:
.025 service: 23.416667
.03 service: 1.666667
Average salary: $45,680.80
Total: $29,026.36
Total/month: $2,419.00
Total federal/month / total/month: 0.988557
------------------------------------------------------------------------

                   Example 2: Unused Sick Leave Credit

    In this example, an individual covered by the Police and
Firefighters Plan and hired before 1980 retires in March 1998. At
retirement, she is age 48 with 24 years, 8 months, and 6 days of
departmental service plus 6 months and 4 days of other service (deposit
paid before June 30, 1997) and 11 months and 11 days of unused sick
leave. For a police officer (or a non-firefighting division firefighter)
such an amount of sick leave would be 1968 hours (246 days, based on a
260-day year, times 8 hours per day). For a firefighting division
firefighter, such an amount would be 2,069 hours (341 days divided by
360 days per year times 2,184 hours per year). The Federal Benefit
Payment begins at retirement. It is based on the 23 years, 11 months,
and 23 days of departmental service performed as of June 30, 1997, and 6
months and 4 days of other service. Thus, the Federal Benefit Payment is
based on 20 years departmental and 6 months of other service at the 2.5
percent accrual rate and 3 years and 11 months of service at the 3.0
percent accrual rate. The total annuity is based on 20 years and 6
months of service at the 2.5 percent accrual rate and 5 years and 7
months of service at the 3 percent accrual rate.

                       Example 2--Police Optional
                              [Pre-80 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 05/01/49
Hire date: 07/08/73
Separation date: 03/13/98
Department service: 24/08/06
Other service: 00/06/04
Sick leave: 00/11/11
.025 service: 20.5
.03 service: 5.583333
Average salary: $61,264.24
Total: $41,659.68
Total/month: $3,472.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 05/01/49
Hire date: 07/08/73
Freeze date: 06/30/97
Department service: 23/11/23
Other service: 00/06/04
Sick leave:
.025 service: 20.5
.03 service: 3.916667
Average salary: $61,264.24
Total: $38,596.47
Total/month: $3,216.00
Total federal/month / total/month: 0.926267
------------------------------------------------------------------------

         Example 3: Calculated Benefit Exceeds Statutory Maximum

    A. In this example, an individual covered by the Police and
Firefighters Plan hired before 1980 retires in March 1998. At
retirement, he is age 55 with 32 years and 17 days of departmental
service. The Federal Benefit Payment begins at retirement. It is based
on the 31 years, 3 months, and 17 days of departmental service performed
as of June 30, 1997. Thus, the Federal Benefit Payment is based on 20
years of service at the 2.5 percent accrual rate and 11 years and 3
months of service at the 3.0 percent accrual rate. However, the annuity
is limited to 80 percent of the average salary at time of retirement.
(This limitation does not apply to the unused sick leave credit.) The
annuity computed as of

[[Page 296]]

June 30, 1997, equals the full benefit payable; therefore, the Federal
Benefit Payment is the total benefit.

                       Example 3A--Police Optional
                              [Pre-80 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 06/12/42
Hire date: 03/14/66
Separation date: 03/30/98
Department service: 32/00/17
Other service:
Sick leave:
.025 service: 20
.03 service: 12
Average salary: $75,328.30
Total: $64,782.34
Total/month: $5,399.00
Maximum: $60,262.64
Maximum/month: $5,022.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 06/12/42
Hire date: 03/14/66
Freeze date: 03/30/97
Department service: 31/03/17
Other service:
Sick leave:
.025 service: 20
.03 service: 11.25
Average salary: $75,328.30
Total: $63,087.45
Total/month: $5,257.00
Maximum: $60,262.64
Maximum/month: $5,022.00
Total federal/month / total/month: 1.0
------------------------------------------------------------------------

    B. In this example, the individual in example 3A also has 6 months
of unused sick leave at retirement. The sick leave credit is not subject
to the 80% limitation and does not become creditable service until the
date of separation. For a police officer (or a non-firefighting division
firefighter) such an amount of sick leave would be 1040 hours (130 days,
based on a 260-day year, times 8 hours per day). For a firefighting
division firefighter, such an amount would be 1092 hours (180 days
divided by 360 days per year times 2184 hours per year). Six months of
unused sick leave increases the annual total benefit by 1.5 percent of
the average salary, or in the example by $94 per month. The District is
responsible for the portion of the annuity attributable to the unused
sick leave because it became creditable at retirement, that is, after
June 30, 1997.

                       Example 3B--Police Optional
                              [Pre-80 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 06/12/42
Hire date: 03/14/66
Separation date: 03/30/98
Department service: 32/00/17
Other service:
Sick leave: 00/06/00
.025 service: 20
.03 service: 12
Average salary: $75,328.30
Total wo/sl credit: $64,782.34
Total/month: $5,399.00
Max wo/sl credit: $60,262.64
Max w/sl credit: $61,392.57
Monthly benefit: $5,116.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 06/12/42
Hire date: 03/14/66
Freeze date: 06/30/97
Department service: 31/03/17
Other service:
Sick leave: none
.025 service: 20
.03 service: 11.25
Average salary: $75,328.30
Total: $63,087.45
Total/month: $5,257.00
Maximum: $60,262.64
Monthly benefit: $5,022.00
Total federal/month / total/month: 0.981626
------------------------------------------------------------------------

                   Example 4: Excess Leave Without Pay

    In this example, an individual covered by the Teachers Plan hired
before 1996 retires in February 1998. At retirement, she is age 64 with
27 years of departmental service and 6 years, 7 months, and 28 days of
other service (creditable before June 30, 1997). However, only 6 months
of leave in a fiscal year without pay may be credited toward retirement
under the Teachers Plan. She had 3 months and 18 days of excess leave
without pay as of June 30, 1997. Since the excess leave without pay
occurred before June 30, 1997, the time attributable to the excess leave
without pay is subtracted from the service used in both the Federal
Benefit Payment and the total benefit computations. The Federal Benefit
Payment begins at retirement. It is based on the 32 years and 8 months
of service (32 years, 11 months, and 28 days minus 3 months and 18 days
and the partial month dropped); 5 years of service at the 1.5 percent
accrual rate, 5 years of service at the 1.75 percent accrual rate, and
22 years and 8

[[Page 297]]

months of service at the 2 percent accrual rate. The total annuity is
based on 33 years and 4 months of service (33 years, 7 months and 28
days minus 3 months and 18 days and the partial month dropped) 5 years
of service at the 1.5 percent accrual rate, 5 years of service at the
1.75 percent accrual rate and 23 years and 4 months of service at the 2
percent accrual rate.

    Note: For the Teachers Plan, section 1230(a) of title 31 of the D.C.
Code (1997) allows for 6 months leave without pay in any fiscal year.
For the Police and Firefighters Plan, section 610(d) of title 4 of the
D.C. Code (1997) allows for 6 months leave without pay in any calendar
year.

                      Example 4--Teachers Optional
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/04/33
Hire date: 03/01/71
Separation date: 02/28/98
Department service: 27/00/00
Other service: 06/07/28
Excess LWOP: 00/03/18
.015 service: 5
.0175 service: 5
.02 service: 23.333333
Average salary: $53,121.00
Total: $33,421.98
Total/month: $2,785.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/04/33
Hire date: 03/01/71
Freeze date: 06/30/97
Department service: 26/04/00
Other service: 06/07/28
Excess LWOP: 00/03/18
.015 service: 5
.0175 service: 5
.02 service: 22.666667
Average salary: $53,121.00
Total: $32,713.66
Total/month: $2,726.00
Total federal/month / total/month: 0.978815
------------------------------------------------------------------------

                   Example 5: Service Credit Deposits

    A. An individual covered by the Teachers Plan hired before 1996
retires in October 1997. At retirement, he is age 61 with 30 years and 3
days of departmental service plus 3 years, 4 months, and 21 days of
other service that preceded the departmental service for which the
deposit was fully paid on or before June 30, 1997. The Federal Benefit
Payment begins at retirement. It is based on the 29 years, 8 months, and
22 days of departmental service and 3 years, 4 months, and 21 days of
service performed as of June 30, 1997. Thus, the Federal Benefit Payment
is based on 33 years and 1 month of service; 5 years of service at the
1.5 percent accrual rate, 5 years of service at the 1.75 percent accrual
rate, and 23 years and 1 month of service at the 2 percent accrual rate.
The total annuity is based on 33 years and 4 months of service; 5 years
of service at the 1.5 percent accrual rate, 5 years of service at the
1.75 percent accrual rate and 23 years and 4 months of service at the 2
percent accrual rate.

                      Example 5A--Teachers Optional
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/10/36
Hire date: 10/09/67
Separation date: 10/11/97
Department Service: 30/00/03
Other service: 03/04/21
Deposit paid before freeze date:
Other service credit allowed:
Sick leave:
.015 service: 5
.0175 service: 5
.02 service: 23.333333
Average salary: $45,680.80
Total: $28,740.85
Total/month: $2,395.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 09/10/36
Hire date: 10/09/67
Freeze date: 06/30/97
Department service: 29/08/22
Other service: 03/04/21
Deposit paid before freeze date:
Other service credit allowed:
Sick Leave:
.015 service: 5
.0175 service: 5
.02 service: 23.08333; 13 days
dropped
Average salary: $45,680.80
Total: $28,512.45
Total/month: $2,376.00
Total federal/month / total/month: 0.992067
------------------------------------------------------------------------

    B. In this example, the employee in example 5A did not pay any of
the deposit to obtain credit for the 3 years, 4 months, and 21 days of
other service as of June 30, 1997. Thus, none of the other service is
used in the computation of the Federal Benefit Payment. An individual
covered by the Teachers Plan hired before 1996 retires in October 1997.

[[Page 298]]

At retirement, he is age 61 with 30 years and 3 days of departmental
service plus 3 years, 4 months, and 21 days of other service that
preceded the departmental service for which the deposit was paid in full
in October 1997 (at retirement). The Federal Benefit Payment begins at
retirement. It is based on only the 29 years, 8 months, and 22 days of
departmental service performed as of June 30, 1997; 5 years of service
at the 1.5 percent accrual rate, 5 years of service at the 1.75 percent
accrual rate, and 19 years and 8 months of service at the 2 percent
accrual rate. The total annuity is based on 33 years and 4 months of
service; 5 years of service at the 1.5 percent accrual rate, 5 years of
service at the 1.75 percent accrual rate and 23 years and 4 months of
service at the 2 percent accrual rate.

                      Example 5B--Teachers Optional
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/10/36
Hire date: 10/09/67
Separation date: 10/11/97
$0.00
Department service: 30/00/03
Other service: 03/04/21
Total deposit paid after 6/30/97:
Sick leave:
.015 service: 5
.0175 service: 5
.02 service: 23.333333
Average salary: $45,680.80
Total: $28,740.85
Total/month: $2,395.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 09/10/36
Hire date: 10/09/67
Freeze date: 06/30/97
Department service: 29/08/22
Other service: none
Total deposit paid after 6/30/97:
Sick leave:
.015 service: 5
.0175 service: 5
.02 service: 19.666667; 22 days dropped
Average salary: $45,680.80
Total: $25,390.90
Total/month: $2,116.00
Total federal/month / total/month: 0.883507
------------------------------------------------------------------------

    C. In this example, the employee in examples 5A and B began
installment payments on the deposit to obtain credit for the 3 years, 4
months, and 21 days of other service as of June 30, 1997, but did not
complete the deposit until October 1997 (at retirement). The other
service is not used in the computation of the Federal Benefit Payment
because the payment was not completed as of June 30, 1997. Thus, the
result is the same as in example 5B.

                      Example 5C--Teachers Optional
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/10/36
Hire date: 10/09/67
Separation date: 10/11/97
Department service: 30/00/03
Other service: 03/04/21
Partial deposit paid as of 6/30/97:
Deposit completed after 6/30/97:
Sick leave:
.015 service: 5
.0175 service: 5
.02 service: 23.333333
Average salary: $45,680.80
Total: $28,740.85
Total/month: $2,395.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 09/10/36
Hire date: 10/09/67
Freeze date: 06/30/97
Department service: 29/08/22
Other service: none
Partial deposit paid as of 6/30/97:
Deposit completed after 6/30/97:
Sick leave:
.015 service: 5
.0175 service: 5
.02 service: 19.666667; 22 days dropped
Average salary: $45,680.80
Total: $25,390.90
Total/month: $2,116.00
Total federal/month / total/month: 0.883507
------------------------------------------------------------------------

                     Disability Retirement Examples

 Example 6: Disability Occurs Before Eligibility for Optional Retirement

    A. In this example, an individual covered by the Police and
Firefighters Plan hired before 1980 retires based on a disability in the
line of duty in October 1997. At retirement, he is age 45 with 18 years,
5 months, and 11 days of departmental service. Since he had performed
less than 20 years of service and had not reached the age of eligibility
for an optional retirement, the Federal Benefit Payment does not begin
at retirement. When the disability annuitant reaches age 55, he
satisfies the age and service requirements

[[Page 299]]

for deferred retirement. At that time (August 20, 2007), the Federal
Benefit Payment begins. It is based on the 18 years, 1 month, and 17
days of departmental service performed as of June 30, 1997, all at the
2.5 percent accrual rate.

          Example 6A--Police Disability in Line of Duty, Age 45
                              [Pre-80 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 08/20/52
Hire date: 05/14/79
Separation date: 10/24/97
Department service: 18/05/11
Other service:
Sick leave:
.025 service: 18.416667
.03 service:
Average salary: $47,788.64
Final salary: $50,938.00
Total: $22,002.70
Total/month: $1,834.00
2/3 of average pay: $31,859.11
Monthly: $2,655.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 08/20/52
Hire date: 05/14/79
Freeze date: 06/30/97
Department service: 18/01/17
Other service:
Sick leave:
.025 service: 18.083333
.03 service:
Average salary: $47,788.64
Final salary: $50,938.00
Total: $21,604.43
Total/month: $1,800.00; deferred
Total federal/month / total/month: 0.0 (at time of retirement)
------------------------------------------------------------------------

    B. In this example, an individual covered by the Teachers Plan hired
before 1996 retires based on a disability in December 1997. At
retirement, she is age 49 with 27 years and 4 months of departmental
service which includes 3 years, 3 months and 14 days of excess leave
without pay (prior to June 30, 1997). Since she does not qualify for
optional retirement at separation, the Federal Benefit Payment does not
begin at separation. When the disability annuitant reaches age 62, she
will satisfy the age and service requirements for deferred retirement.
At that time (March 9, 2010), the Federal Benefit Payment begins. The
time attributable to the excess leave without pay is subtracted from the
service used to compute the Federal Benefit Payment. Since the excess
leave without pay occurred before June 30, 1997, the deferred Federal
Benefit Payment is based on the 23 years and 6 months of service; 5
years of service at the 1.5 percent accrual rate, 5 years of service at
the 1.75 percent accrual rate, and 13 and 6 months of service at the 2
percent accrual rate.

                 Example 6B--Teachers Disability Age 49
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 03/09/48
Hire date: 09/01/70
Separation date: 12/31/97
Department service: 27/04/00
Other service:
Excess LWOP: 03/03/14
.015 service: 5
.0175 service: 5
.02 service: 14
Average salary: $53,121.00
Total: $23,506.04
Total/month: $1,959.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 03/09/48
Hire date: 09/01/70
Freeze date: 06/30/97
Department service: 26/10/00
Other service:
Excess LWOP: 03/03/14
.015 service: 5
.0175 service: 5
.02 service: 13.5
Average salary: $53,121.00
Total: $22,974.83
Total/month: $1,915.00; deferred
Total federal/month / total/month: 0.0 (at time of retirement)
------------------------------------------------------------------------

 Example 7: Disability Occurs After Eligibility for Optional Retirement

    A. In this example, an individual covered by the Police and
Firefighters Plan hired before 1980 retires based on a disability in the
line of duty in October 1997. At retirement, she is age 55 with 24
years, 5 months, and 11 days of departmental service. Since she was also
eligible for optional retirement at the time of separation, the Federal
Benefit Payment commences at retirement. It is based on the 24 years, 1
month, and 17 days of departmental service performed as of June 30,
1997. Thus, the Federal Benefit Payment is based on 20 years of service
at the 2.5 percent accrual rate and 4 years and 1 month of service at
the 3 percent accrual rate. The total

[[Page 300]]

annuity is based on the disability formula and is equal to two-thirds of
average pay because that amount is higher than the 63.25 percent payable
based on total service.

          Example 7A--Police Disability in Line of Duty Age 55
                              [Pre-80 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 10/01/42
Hire date: 05/14/73
Separation date: 10/24/97
Department service: 24/05/11
Other service:
Sick leave:
.025 service: 20
.03 service: 4.416667
Average salary: $47,788.64
Final salary: $50,938.00
Total: $30,226.31
Total/month: $2,519.00
2/3 of average pay: $31,859.11
Monthly: $2,655.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 10/01/42
Hire date: 05/14/73
Freeze date: 06/30/97
Department service: 24/01/17
Other service:
Sick leave:
.025 service: 20
.03 service: 4.083333
Average salary: $47,788.64
Final salary: $50,938.00
Total: $29,748.43
Total/month: $2,479.00
Total federal/month / total/month: 0.984121
------------------------------------------------------------------------

    B. In this example, an individual covered by the Teachers Plan hired
before 1996 retires based on a disability in December 1997. At
retirement, he is age 60 with 27 years and 4 months of departmental
service which includes 3 years, 3 months and 14 days of excess leave
without pay (prior to June 30, 1997). Since he qualifies for optional
retirement at separation, the Federal Benefit Payment begins at
retirement. Since the excess leave without pay occurred before June 30,
1997, and the total annuity is based on actual service (that is, exceeds
the guaranteed disability minimum), the time attributable to the excess
leave without pay is subtracted from the service used to compute the
Federal Benefit Payment and total benefit. The Federal Benefit Payment
is based on 23 years and 6 months of service; 5 years of service at the
1.5 percent accrual rate, 5 years of service at the 1.75 percent accrual
rate, and 13 years and 6 months of service at the 2 percent accrual
rate. The total annuity payable is based on 24 years of service; 5 years
of service at the 1.5 percent accrual rate, 5 years of service at the
1.75 percent accrual rate, and 14 years of service at the 2 percent
accrual rate.

                 Example 7B--Teachers Disability Age 60
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 03/09/37
Hire date: 09/01/70
Separation date: 12/31/97
Department service: 27/04/00
Other service:
Excess LWOP: 03/03/14
.015 service: 5
.0175 service: 5
.02 service: 14
Average salary: $53,121.00
Total: $23,506.04
Total/month: $1,959.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 03/09/37
Hire date: 09/01/70
Freeze date: 06/30/97
Department service: 26/10/00
Other service:
Excess LWOP: 03/03/14
.015 service: 5
.0175 service: 5
.02 service: 13.5
Average salary: $53,121.00
Total: $22,974.83
Total/month: $1,915.00
Total federal/month / total/month: 0.977540
------------------------------------------------------------------------

                      Deferred Retirement Examples

               Example 8: All Service Before June 30, 1997

    In this example, an individual covered by the Police and
Firefighters Plan hired before 1980 separated in March 1986 with title
to a deferred annuity. In November 1997, he reaches age 55 and becomes
eligible for the deferred annuity based on his 15 years, 9 months, and 8
days of departmental service, all at the 2.5 percent accrual rate. The
total annuity is based on the same 15 years, 9 months, and 8 days of
service all at the 2.5 percent accrual rate. Since all the service is
creditable as of June 30, 1997, the Federal Benefit Payment equals the
total annuity.

[[Page 301]]



                       Example 8--Police Deferred
                              [Pre-80 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/20/42
Hire date: 06/01/70
Separation date: 03/08/86
Department service: 15/09/08
Other service:
Sick leave:
.025 service: 15.75
.03 service: 0
Average salary: $30,427.14
Final salary: $45,415.00
Total: $11,980.69; deferred
Total/month: $998.00; deferred
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/20/42
Hire date: 06/01/70
Freeze date: 03/08/86
Department service: 15/09/08
Other service:
Sick leave:
.025 service: 15.75
.03 service: 0
Average salary: $30,427.14
Final salary: $45,415.00
Total: $11,980.69; deferred
Total/month: $998.00; deferred
Total federal/month / total/month: 1.0; deferred
------------------------------------------------------------------------

               Example 9: Service Straddles June 30, 1997

    In this example, an individual covered by the Police and
Firefighters Plan hired before 1980 separated in December 1997 with
title to a deferred annuity. In November 2007, he will reach age 55 and
becomes eligible to receive a deferred annuity. At that time, the
Federal Benefit Payment begins. It is based on the 18 years and 1 month
of departmental service performed as of June 30, 1997, all at the 2.5
percent accrual rate. The total annuity begins at the same time, based
on his 18 years, 6 months, and 8 days of departmental service, all at
the 2.5 percent accrual rate.

                       Example 9--Police Deferred
                              [Pre-80 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/20/52
Hire date: 06/01/79
Separation date: 12/08/97
Department service: 18/06/08
Other service:
Sick leave:
.025 service: 18.5
.03 service: 0
Average salary: $30,427.14
Final salary: $45,415.00
Total: $14,072.55; deferred
Total/month: $1,173.00; deferred
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/20/52
Hire date: 06/01/79
Freeze date: 06/30/97
Department service: 18/01/00
Other service:
Sick leave:
.025 service: 18.083333
.03 service: 0
Average salary: $30,427.14
Final salary: $45,415.00
Total: $13,755.60; deferred
Total/month: $1,146.00; deferred
Total federal/month / total/month: 0.976982; deferred
------------------------------------------------------------------------

            Reduction To Provide a Survivor Annuity Examples

               Example 10: Survivor Reduction Calculations

    Both of the following examples involve a former teacher who elected
a reduced annuity to provide a survivor benefit:
    A. In this example, the employee elects to provide full survivor
benefits of 55% of the employee's unreduced annuity. The total annuity
is reduced by 2[frac12] percent of the first $3600 and 10 percent of the
balance. The reduced Federal Benefit Payment is determined by
multiplying the reduced total annuity (rounded) by the ratio of the
unreduced Federal Benefit Payment to the unreduced total annuity.
Military service occurred prior to June 30, 1997 and purchase of other
service was completed prior to June 30, 1997.

           Example 10A--Teachers Optional W/Survivor Reduction
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 11/01/68
Separation date: 12/31/97
Department service: 29/02/00
Other service: 03/09/18

[[Page 302]]


Military: 00/09/11
.015 service: 5
.0175 service: 5
.02 service: 23.666667
Average salary: $66,785.00
Total unreduced: $42,464.13
Total unreduced/month: $3,539.00
Reduction: $3,976.41
Total: $38,487.72
Total/month: $3,207.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 11/01/68
Freeze date: 06/30/97
Department service: 28/08/00
Other service: 03/09/18
Military: 00/09/11
.015 service: 5
.0175 service: 5
.02 service: 23.166667
Average salary: $66,785.00
Total federal unreduced: $41,796.28
Total federal unreduced/month: $3,483.00
Total federal unreduced/month / total unreduced/month: 0.984176
Total federal/month: $3,156.00
------------------------------------------------------------------------

    B. In this example, the employee elects to provide a partial
survivor annuity of 26% of the employee's unreduced annuity. The total
annuity is reduced by 2[frac12] percent of the first $3,600 of
$20,073.95 and 10 percent of the balance. The reduced Federal Benefit
Payment is determined by multiplying the reduced total annuity (rounded)
by the ratio of the unreduced Federal Benefit Payment to the unreduced
total annuity.

           Example 10B--Teachers Optional W/Survivor Reduction
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 11/01/68
Separation date: 12/31/97
Department service: 29/02/00
Other service: 03/09/18
Military: 00/09/11
.015 service: 5
.0175 service: 5
.02 service: 23.666667
Average salary: $66,785.00
Total unreduced: $42,464.13
Total unreduced/month: $3,539.00
Reduction: $1,737.40
Total reduced: $40,726.73
Total reduced/month: $3,394.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire Date: 11/01/68
Freeze date: 06/30/97
Department service: 28/08/00
Other service: 03/09/18
Military: 00/09/11
.015 service: 5
.0175 service: 5
.02 service: 23.166667
Average salary: $66,785.00
Total federal unreduced: $41,796.28
Total federal unreduced/month: $3,483.00
Total federal unreduced/month / total unreduced/month: 0.984176
Total federal reduced/month: $3,340.00
------------------------------------------------------------------------

            Early Optional or Involuntary Retirement Examples

              Example 11: Early Optional With Age Reduction

    In this example, an individual covered by the Teachers Plan hired
before 1996 retires voluntarily in February 1998, under a special
program that allows early retirement with at least 20 years of service
at age 50 older, or at least 25 years of service at any age. At
retirement, she is 6 full months short of age 55. She has 25 years and 5
months of departmental service; 6 years, 2 months, and 19 days of other
service (creditable before June 30, 1997); and 2 months and 9 days of
unused sick leave. Since she is not eligible for optional retirement and
she is eligible to retire voluntarily only because of the District-
approved special program, the Federal Benefit Payment is calculated
similar to a disability retirement. It does not begin until she becomes
eligible for a deferred annuity at age 62. When it commences the Federal
Benefit Payment will be based on the service creditable as of June 30,
1997: 30 years and 11 months of service; 5 years of service at the 1.5
percent accrual rate, 5 years of service at the 1.75 percent accrual
rate, and 20 years and 11 months of service at the 2 percent accrual
rate. The total annuity is based on 5 years of service at the 1.5
percent accrual rate, 5 years of service at the 1.75 percent accrual
rate and 21 years and 9 months of service at the 2 percent accrual rate
(including

[[Page 303]]

the unused sick leave). Because the Federal Benefit Payment is based on
the deferred annuity, rather than the early voluntary retirement, it is
not reduced by the age reduction factor used to compute the total
benefit.

             Example 11--Teachers Early Out W/Age Reduction
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/20/43
Hire date: 10/01/72
Separation date: 02/28/98
Department service: 25/05/00
Other service: 06/02/19
Sick leave: 00/02/09
.015 service: 5
.0175 service: 5
.02 service: 21.75
Average salary: $69,281.14
Total unreduced: $41,395.48
Age reduction factor: 0.990000
Total reduced: $40,981.53
Total/month: $3,415.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 09/20/43
Hire date: 10/01/72
Freeze date: 06/30/97
Department service: 24/09/00
Other service: 06/02/19
.015 service: 5
.0175 service: 5
.02 service: 20.916667
Average salary: $69,281.14
Total unreduced: $40,240.80; deferred
Reduction factor: 1.000000 no reduction
Total reduced: $40,240.80; deferred
Total/month: $3,353.00 deferred
Total federal unreduced/month / Total unreduced/month: 0.0 (at time of
 retirement)
------------------------------------------------------------------------

               Example 12: Involuntary With Age Reduction

    In this example, an individual covered by the Teachers Plan hired
before 1996 retires involuntarily in February 1998. At retirement, she
is 6 full months short of age 55. She has 25 years and 5 months of
departmental service; 6 years, 2 months, and 19 days of other service
(creditable before June 30, 1997); and 2 months and 9 days of unused
sick leave. The Federal Benefit Payment begins at retirement. It is
based on the 30 years and 11 months of service; 5 years of service at
the 1.5 percent accrual rate, 5 years of service at the 1.75 percent
accrual rate, and 20 years and 11 months of service at the 2 percent
accrual rate. The total annuity is based on 5 years of service at the
1.5 percent accrual rate, 5 years of service at the 1.75 percent accrual
rate and 21 years and 9 months of service at the 2 percent accrual rate
(including the unused sick leave). Both the Federal Benefit Payment and
the total benefit are reduced by the age reduction factor.

            Example 12--Teachers Involuntary W/Age Reduction
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 09/20/43
Hire date: 10/01/72
Separation date: 02/28/98
Department service: 25/05/00
Other service: 06/02/19
Sick leave: 00/02/09
.015 service: 5
.0175 service: 5
.02 service: 21.75
Average salary: $69,281.14
Total unreduced: $41,395.48
Age reduction factor: 0.990000
Total reduced: $40,981.53
Total/month: $3,415.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 09/20/43
Hire date: 10/01/72
Freeze date: 06/30/97
Department service: 24/09/00
Other service: 06/02/19
.015 service: 5
.0175 service: 5
.02 service: 20.916667
Average salary: $69,281.14
Total unreduced: $40,240.80
Age reduction factor: 0.990000
Total reduced: $39,838.39
Total/month: $3,320.00
Total federal/month / total/month: 0.972182
------------------------------------------------------------------------

                         Death Benefits Example

                 Example 13: Death Benefits Calculation

    Examples A and B involve service-based death benefits calculations.
Examples C-F involve non-service-based death benefits calculations.
Examples G and H involve disability death benefit calculations.
    A. In this example, an individual covered by the Teachers Plan
retires in December 1997 and elects to provide a full survivor annuity.
He dies in June 1998. The survivor's

[[Page 304]]

Federal Benefit Payment is 98.4 percent ($3,483 / $3,539) of the total
survivor benefit.

                  Example 13A--Teachers Death Benefits
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 11/01/68
Separation date: 12/31/97
Death date: 06/24/98
Department service: 29/02/00
Other service: 03/09/18
Military: 00/09/11
Average salary: $66,785.00
Total unreduced/month (retiree): $3,539.00
Total/month (survivor): $1,946.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 11/01/68
Freeze date: 06/30/97
Death date: 06/24/98
Department service: 28/08/00
Other service: 03/09/18
Military: 00/09/11
Average salary: $66,785.00
Total federal unreduced/month (retiree): $3,483.00
Total federal unreduced/month (retiree) / total unreduced/month
 (retiree): 0.984176
Total federal/month (survivor): $1,915.00
------------------------------------------------------------------------

    B. In this example, a teacher dies in service on June 30, 1998 after
31 years of departmental service. Since the survivor annuity is based on
actual service, the Federal Benefit Payment is 96.5 percent ($1,818 /
$1,883) of the total survivor benefit.

                  Example 13B--Teachers Death Benefits
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 07/01/39
Hire date: 07/01/67
Separation date: 06/30/98
Death date: 06/30/98
Department service: 31/00/00
Average salary: $38,787.88
Total (retiree): $22,593.94
Total/month (retiree): $1,883.00
Total/month (survivor): $1,036.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 07/01/39
Hire date: 07/01/67
Freeze date: 06/30/97
Death date: 06/30/98
Department service: 30/00/00
Average salary: $38,787.88
Total federal (retiree): $21,818.18
Total federal/month (retiree): $1,818.00
Total federal/month (retiree) / total/month (retiree): 0.965481
Total federal/month (survivor): $1,000.00
------------------------------------------------------------------------

    C. In this example, as in Example A, an individual covered by the
Teachers Plan retires in December 1997 but elects to provide a survivor
annuity of $12,000. He dies in June 1998. Because the amount of the
survivor annuity is not service-based, the Federal Benefit Payment is a
prorated portion of the total benefit. Since the teacher had 398 months
of service as of the freeze date and 404 months of service, at
retirement, the Federal Benefit Payment equals 398/404ths of the total
benefit.

                  Example 13C--Teachers Death Benefits
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 11/01/68
Separation date: 12/31/97
Death date: 06/24/98
Department service: 29/02/00
Other service: 03/09/18
Military: 00/09/11
Months of service: 404
Total: $12,000.00
Total/month: $1,000.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 11/01/68
Freeze date: 06/30/97
Death date: 06/24/98
Department service: 28/08/00
Other service: 03/09/18
Military: 00/09/11
Months of service: 398
Federal service / total service: 0.985149
Total: $11,820.00
Total/month: $985.00
------------------------------------------------------------------------

    D. In this example, a teacher dies in service on April 1, 1998 after
14 years and 6 months of departmental service. Because the

[[Page 305]]

survivor annuity is based on the guaranteed minimum, the Federal Benefit
Payment is a prorated portion of the total benefit. Since the teacher
had 165 months of service as of the freeze date and 180 months of
service, including unused sick leave, at death, the Federal Benefit
Payment equals 165/180ths of the total benefit.

                  Example 13D--Teachers Death Benefits
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 04/01/61
------------------------------------------------------------------------
Hire date: 10/01/83
Separation date: 04/01/98
Death date: 04/01/98
Department service: 14/06/01
Unused Sick Leave: 00/06/00
Average salary: $36,000.00
Months of service: 180
Total: $7,920.00
Total/month: $660.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 04/01/61
Hire date: 04/01/83
Freeze date: 06/30/97
Death date: 04/01/98
Department Service: 13/09/00
Average salary: $36,000.00
Months of service: 165
Federal service / total service: 0.916667
Total: $7,260.00
Total/month: $605.00
------------------------------------------------------------------------

    E. In this example, as in the prior example, a teacher dies in
service on April 1, 1998 after 15 years of departmental service.
However, in this example, the teacher was age 40 on the hire date. The
amount of service used in the survivor annuity calculation equals the
amount of service that the teacher would have had if the teacher
continued covered employment until age 60. Because the survivor annuity
is based on projected service, a form of the guaranteed minimum, the
Federal Benefit Payment is a prorated portion of the total benefit.
Since the teacher had 171 months of service as of the freeze date and
180 months of service at death, the Federal Benefit Payment equals 171/
180ths of the total benefit.

                  Example 13E--Teachers Death Benefits
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 04/01/43
Hire date: 04/01/83
Separation date: 04/01/98
Death date: 04/01/98
Department service: 15/00/01
Departmental Service projected to age 60: 20/00/01
.015 service: 5
.0175 service: 5
.02 service: 10
Average salary: $36,000.00
Months of service: 180
Total: $7,177.50
Total/month: $598.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 04/01/43
Hire date: 04/01/83
Freeze date: 06/30/97
Death date: 04/01/98
Department service: 14/03/00
Average salary: $36,000.00
Months of service: 171
Federal service / total service: 0.950000
Total: $6,818.63
Total/month: $568.00
------------------------------------------------------------------------

    F. In this example, a police officer dies in the line of duty on
July 31, 2001 after 18 years of departmental service. The survivor
annuity is equal to 100 percent of the officer's pay at the time of
death, as provided by District legislation effective October 1, 2000.
However, the Federal Benefit Payment is calculated based on plan
provisions in effect on June 29, 1997, which provided for a survivor
annuity equal to 40 percent of the officer's pay at the time of death.
Because the Federal Benefit Payment is not service-based and the officer
had 167 months of service as of the freeze date and 216 months of
service, including unused sick leave, at death, the Federal Benefit
Payment equals 167/216ths of the total benefit calculated according to
plan provisions in effect on July 1, 1997. The difference between the
total benefit paid and the Federal Benefit Payment calculated according
to plan provisions in effect on June 29, 1997 is the responsibility of
the District government.

[[Page 306]]



                   Example 13F--Police Death Benefits
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 07/13/62
Hire date: 08/01/83
Death date: 07/31/2001
Department service: 18/00/00
Average salary: $54,000.00
Final salary: $56,000.00
Months of service: 216
Total: $56,004.00
Total/month: $4,667.00
Total based on July 1, 1997 provisions: $21,600.00
Total/month based on July 1, 1997 provisions: $1,800.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 07/13/62
Hire date: 08/01/83
Freeze date: 06/30/97
Death date: 07/31/2001
Department service: 13/11/00
Months of service: 167
Federal service / total service: 0.773148
Total: $16,704.00
Total/month: $1,392.00
------------------------------------------------------------------------

    G. In this example, a firefighter dies on July 1, 1999 at age 47
after retiring based on a disability in the line of duty in November
1997. At separation, the firefighter was not eligible for optional
retirement but was eligible to receive a deferred retirement annuity at
age 55. Therefore, the survivor's Federal Benefit Payment is calculated
based on the plan rules for deferred retirees. Under the Police and
Firefighters Plan, if a separated police officer or firefighter eligible
for deferred retirement dies before reaching age 55, the survivor is
eligible to receive an annuity. The survivor annuity is based on the
firefighter's adjusted average pay. Therefore, the survivor's Federal
Benefit Payment is a prorated portion of the survivor annuity. Since the
firefighter had 217 months of service as of the freeze date and 222
months of service at retirement, the survivor's Federal Benefit Payment
equals 217/222nds of the total survivor benefit.

   Example 13G--Firefighters Disability/Early Voluntary Death Benefits
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 08/20/52
Hire date: 05/14/79
Separation date: 11/28/97
Death date: 07/01/99
Department service: 18/06/15
Adjusted average salary: $45,987.00
Months of service: 222
Total: $18,396.00
Total/month: $1,533.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 08/20/52
Hire date: 05/14/79
Freeze date: 06/30/97
Death date: 07/01/99
Department service: 18/01/17
Adjusted average salary: $45,987.00
Months of service: 217
Federal service / total service: .977477
Total: $17,976.00
Total/month: $1,498.00
------------------------------------------------------------------------

    H. In this example, a teacher dies on August 3, 1999 at age 58 after
retiring based on a disability in April 1998. At separation, the teacher
was not eligible for optional retirement but was eligible to receive a
deferred retirement annuity at age 62. Therefore, the survivor's Federal
Benefit Payment is calculated based on the plan rules for deferred
retirees. Under the Teachers Plan, if a separated teacher eligible for
deferred retirement dies before reaching age 62, the survivor is not
eligible to receive an annuity. Therefore, the survivor's Federal
Benefit Payment is zero and the survivor annuity is the full
responsibility of the District.

     Example 13H--Teachers Disability/Early Voluntary Death Benefits
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 08/01/41
Hire date: 07/01/76
Separation date: 04/30/98
Death date: 08/03/99
Total: $21,888.00
Total/month: $1,824.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 08/01/41
Hire date: 07/01/76
Separation date: 04/30/98
Death date: 08/03/99
Total: $0.00
Total/month: $0.00
Total federal/month / total/month: 0.0
------------------------------------------------------------------------


[[Page 307]]

                Cost of Living Adjustment (COLA) Examples

          Example 14: Application of Cost of Living Adjustments

    In cases in which the District plan applies the same cost of living
adjustment that is provided for the Federal Benefit Payment, the federal
percentage is applied to the new total benefit after the adjustment to
determine the new Federal Benefit Payment after the adjustment.
    A. In this example, a teacher retiree receives a cost of living
adjustment that is the same for the federal and District portions of the
total benefit. The federal percentage for the retiree is applied to the
new total benefit after the adjustment to determine the new Federal
Benefit Payment after the adjustment.

        Example 14A--Teachers COLA--Retiree W/Survivor Reduction
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                   Benefit Computation (at retirement)
------------------------------------------------------------------------
Total unreduced: $42,464.13
Total unreduced/month: $3,539.00
Total/month: $3,207.00
Federal unreduced: $41,796.28
Federal unreduced/month: $3,483.00
Federal percentage = federal unreduced/month / total unreduced/month:
 0.984176
------------------------------------------------------------------------
                            COLA Computation
------------------------------------------------------------------------
District and Federal COLA rate 5%:
Total COLA: $160.00
New total/month: $3,367.00
New federal benefit/month = new total benefit/month x federal percentage
 = $3,314.00
------------------------------------------------------------------------

    B. In this example, a survivor of a deceased teacher retiree
receives a cost of living adjustment that is the same for the federal
and District portions of the total benefit. Since the survivor benefit
is service related, the federal percentage for the retiree is applied to
the new total benefit of the survivor after the adjustment to determine
the new Federal Benefit Payment after the adjustment.

             Example 14B--Teachers COLA--Survivor of Retiree
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
   Benefit Computation (at death of retiree whose annuity was based on
                 service--percentage survivor election)
------------------------------------------------------------------------
Total/month: $2,043.00
Federal percentage (retiree): 0.984176
Federal/month: $2,011.00
------------------------------------------------------------------------
                            COLA Computation
------------------------------------------------------------------------
District and Federal COLA rate 4.5%:
Total COLA: $92.00
New total/month: $2,135.00
New federal benefit/month = new total benefit/month x federal percentage
 = $2,101.00
------------------------------------------------------------------------

    C. In this example, a survivor of a deceased teacher retiree
receives a cost of living adjustment that is the same for the federal
and District portions of the total benefit. Since the survivor annuity
is non-service related, the federal percentage for the survivor is
applied to the new total benefit of the survivor after the adjustment to
determine the new Federal Benefit Payment after the adjustment.

             Example 14C--Teachers COLA--Survivor of Retiree
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
Benefit Computation (at death of retiree--flat amount survivor election)
------------------------------------------------------------------------
Total months of service: 404
Federal months of service: 398
Total/month: $1,000.00
Federal percentage = federal service / total service: 0.985149
Federal/month: $985.00
------------------------------------------------------------------------
                            COLA Computation
------------------------------------------------------------------------
District and Federal COLA rate 4.5%:
Total COLA: $45.00
New total/month: $1,045.00
New federal benefit/month = new total benefit/month x federal percentage
 = $1,029.00
------------------------------------------------------------------------
Note: This method also applies to a percentage survivor election by a
  retiree whose annuity was based on a guaranteed minimum.

    D. In this example, a survivor of a deceased teacher receives a cost
of living adjustment that is the same for the federal and District

[[Page 308]]

portions of the total benefit. Since the survivor annuity is service
related, the federal percentage based on the deceased teacher's service
is applied to the new total benefit of the survivor after the adjustment
to determine the new Federal Benefit Payment after the adjustment.

            Example 14D--Teachers COLA--Survivor of Employee
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
            Benefit Computation (at death--based on service)
------------------------------------------------------------------------
Total/month: $1,036.00
Federal/month: $1,000.00
Federal percentage = federal/month / total/month: 0.965251
------------------------------------------------------------------------
                            COLA Computation
------------------------------------------------------------------------
District and Federal COLA rate: 5%
Total COLA: $52.00
New total benefit/month: $1,088.00
New federal benefit/month = new total benefit/month x federal percentage
 = $1,050.00
------------------------------------------------------------------------

    E. In this example, a survivor of a deceased teacher receives a cost
of living adjustment that is the same for the federal and District
portions of the total benefit. Since the survivor annuity is non-service
related, the federal percentage for the survivor is applied to the new
total benefit of the survivor after the adjustment to determine the new
Federal Benefit Payment after the adjustment.

            Example 14E--Teachers COLA--Survivor of Employee
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
           Benefit Computation (at death--guaranteed minimum)
------------------------------------------------------------------------
Total months of service: 180
Federal months of service: 171
Total/month: $598.00
Federal percentage = federal service / total service: 0.950000
Federal/month: $568.00
------------------------------------------------------------------------
                            COLA Computation
------------------------------------------------------------------------
District and Federal COLA rate 5%:
Total COLA: $30.00
New total/month: $628.00
New federal benefit/month: = new total benefit/month x federal
 percentage = $597.00
------------------------------------------------------------------------

    F. In this example, a survivor of a deceased retired police officer
receives a cost of living adjustment that is the same for the federal
and District portions of the total benefit. Since the survivor annuity
is non-service related, the federal percentage for the survivor is
applied to the new total benefit of the survivor after the adjustment to
determine the new Federal Benefit Payment after the adjustment.

              Example 14F--Police COLA--Survivor of Retiree
------------------------------------------------------------------------

-------------------------------------------------------------------------
                Benefit Computation (at death of retiree)
------------------------------------------------------------------------
Total months of service: 240
Federal months of service: 236
Total/month: $1,614.00
Federal percentage = federal service / total service: 0.983333
Federal/month: $1,587.00
------------------------------------------------------------------------
                            COLA Computation
------------------------------------------------------------------------
District and Federal COLA rate 5%:
Total COLA: $81.00
New total/month: $1,695.00
New federal benefit/month = new total benefit/month x federal percentage
 = $1,667.00
------------------------------------------------------------------------

    G. In this example, a survivor of a deceased firefighter receives a
cost of living adjustment that is the same for the federal and District
portions of the total benefit. Since the survivor annuity is non-service
related, the federal percentage for the survivor is applied to the new
total benefit of the survivor after the adjustment to determine the new
Federal Benefit Payment after the adjustment.

           Example 14G--Firefighter COLA--Survivor of Employee
------------------------------------------------------------------------

-------------------------------------------------------------------------
     Benefit Computation (at death of employee in the line of duty)
------------------------------------------------------------------------
Total/month: $4,667.00
Federal/month: $1,867.00
Federal percentage = federal/month
/ Total/month: 0.400043
------------------------------------------------------------------------
                            COLA Computation
------------------------------------------------------------------------
District and Federal COLA rate 4.5%:
Total COLA: $210.00
New total benefit/month: $4,877.00

[[Page 309]]


New federal benefit/month = New total benefit/month x federal percentage
 = $1,951.00
------------------------------------------------------------------------

    H. In this example, a new District plan provision applies a
different cost of living adjustment than is provided for the Federal
Benefit Payment. In Variation 1, the federal cost of living adjustment
is applied to the Federal Benefit Payment and the District cost of
living adjustment is applied to the total benefit. In Variation 2, the
federal cost of living adjustment is applied to the Federal Benefit
Payment and the District cost of living adjustment is applied to the
District benefit payment. A new federal percentage equal to the ratio of
the Federal Benefit Payment to the total benefit is established after
the adjustments.

                       Example 14H--Teachers COLA
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                   Benefit Computation (at retirement)
------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/04/48
Hire date: 03/01/86
Separation date: 02/28/2013
Department service: 27/00/00
Other service paid in 1995: 06/07/28
Excess LWOP in 1990: 00/03/18
.015 service: 5
.0175 service: 5
.02 service: 23.333333
Average salary: $53,121.00
Total: $33,421.96
Total/month: $2,785.00
------------------------------------------------------------------------
                   Benefit Computation (at retirement)
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/04/48
Hire date: 03/01/86
Freeze date: 06/30/1997
Department service: 11/04/00
Other service paid in 1995: 06/07/28
Excess LWOP in 1990: 00/03/18
.015 service: 5
.0175 service: 5
.02 service: 7.666667
Average salary: $53,121.00
Total: $16,777.38
Total/month: $1,398.00
Federal percentage: 0.501975
------------------------------------------------------------------------
                 COLA Computation Variations Variation 1
------------------------------------------------------------------------
District COLA rate 5% applied to total benefit:
Total COLA: $139.00
New total benefit/month: $2,924.00
Federal COLA rate 4%
Federal COLA: $56.00
New federal benefit/month: $1,454.00
New federal percentage: 0.497264
------------------------------------------------------------------------
                               Variation 2
------------------------------------------------------------------------
District COLA rate 5% applied to District benefit:
Old District benefit/month: $1,387.00
District COLA: $69.00
New District benefit/month: $1,456.00
Federal COLA rate 4%:
Federal COLA: $56.00
New federal benefit/month: $1,454.00
New total benefit/month: $2,910.00
New federal percentage: 0.499656
------------------------------------------------------------------------

             Retroactive Payment of Accrued Annuity Example

             Example 15: Accrual of Federal Benefit Payment

    The Federal Benefit Payment begins to accrue on the annuity
commencing date, regardless of whether the employee is added to the
annuity roll in time for the regular payment cycle. If the employee is
due a retroactive payment of accrued annuity, the portion of the
retroactive payment that would have been a Federal Benefit Payment (if
it were made in the regular payment cycle) is still a Federal Benefit
Payment. In this example, a teacher retired effective September 11,
1998. She was added to the retirement rolls on the pay date November 1,
1998 (October 1 to October 31 accrual cycle). Her Federal Benefit
Payment is $3000 per month and her total benefit payment is $3120 per
month. Her initial check is $5200 because it includes a prorated payment
for 20 days (September 11 to September 30). The Federal Benefit Payment
is $5000 of the initial check ($3000 for the October cycle and $2000 for
the September cycle).

                  Example 15--Teachers Accrued Benefit
                              [Pre-96 hire]
------------------------------------------------------------------------

-------------------------------------------------------------------------
                        Total Annuity Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 09/01/66

[[Page 310]]


Separation date: 09/10/98
Department service: 32/00/10
.015 service: 5
.0175 service: 5
.02 service: 22
Average salary: $62,150.00
Total: $37,445.38
Total/month: $3,120.00
Sept 11-30: $2,080.00
Oct 1-31: $3,120.00
Nov 1-30: $3,120.00
------------------------------------------------------------------------
                   Federal Benefit Payment Computation
------------------------------------------------------------------------
Birth date: 11/01/42
Hire date: 09/01/66
Freeze date: 06/30/97
Department service: 30/10/00
.15 service: 5
.0175 service: 5
.02 service: 20.833333
Average salary: $62,150.00
Total: $35,995.21
Total/month: $3,000.00
Sept 11-30: $2,000.00
Oct 1-31: $3,000.00
Nov 1-30: $3,000.00
------------------------------------------------------------------------



                 Subpart D_Claims and Appeals Procedures

    Source: 65 FR 80753, Dec. 22, 2000, unless otherwise noted.



Sec. 29.401  Purpose.

    (a) This subpart explains--
    (1) The procedures that participants and beneficiaries in the Judges
Plan, Police and Firefighters Plan, and the Teachers Plan must follow in
applying for Federal Benefit Payments;
    (2) The procedures for determining an individual's eligibility for a
Federal Benefit Payment and the amount and form of an individual's
Federal Benefit Payment as required by sections 11021 and 11251(a)
(codified at DC Official Code section 11-1570(c)(2)(a)) of the Act;
    (3) The appeal rights available under section 11022(a) of the Act
and section 3 of the 2004 Act (codified at DC Official Code section 11-
1570(c)(3)) to claimants whose claim for Federal Benefit Payments is
denied in whole or in part; and
    (4) The special rules for processing competing claimant cases.
    (b) This subpart does not apply to processing collection of debts
due to the United States.
    (c) This part does not apply to claims and appeals filed before
October 1, 1997. Such claims must be pursued with the District of
Columbia.

[65 FR 80753, Dec. 22, 2000, as amended at 70 FR 60005, Oct. 14, 2005]



Sec. 29.402  Definitions.

    In this subpart--
    Beneficiary means an individual designated by a participant, or by
the terms of the Judges Plan, Police and Firefighters Plan, or Teachers
Plan, who is or may become entitled to a benefit under those plans.
    Claimant means any person seeking a benefit for themselves or
another under the Judges Plan, Police and Firefighters Plan, or Teachers
Plan.
    Department means the Secretary of the Treasury or a designee
authorized to exercise the Secretary's authority with respect to Federal
Benefit Payments under the Act.
    Participant means an individual who is or may become eligible to
receive a benefit under the Police and Firefighters Plan or the Teachers
Plan based on credit for service accrued as of June 30, 1997, or under
the Judges Plan, or whose beneficiaries may be eligible to receive any
such benefit.

[65 FR 80753, Dec. 22, 2000, as amended at 70 FR 60005, Oct. 14, 2005]



Sec. 29.403  Applications filed with the Benefits Administrator.

    All claimants for Federal Benefit Payments must file applications
for benefits (including applications for retirement, refunds of
contributions, and death benefits) with the Benefits Administrator.



Sec. 29.404  Initial benefit determinations and reconsideration by the
Benefits Administrator.

    (a) Initial benefit determinations. The Benefits Administrator will
process applications for Federal Benefit Payments and determine the
eligibility for and the amount and form of Federal Benefit Payments. All
initial benefit determination decisions which may

[[Page 311]]

reasonably be construed as a denial (in whole or part) of a claim for
Federal Benefit Payments must be in writing, must advise claimants of
their right to request reconsideration under paragraph (b), of this
section and must state the time limits applicable to such a request.
    (b) Claimant's right to reconsideration of benefit denials. (1)
Except as provided in paragraph (b)(2) of this section, claimants who
disagree with the amount or form of a Federal Benefit Payment
determination and wish to contest the determination must first request
the Benefits Administrator to reconsider its determination.
    (2) A decision to collect a debt is not a denial of a benefit claim
under this section.
    (c) Form and timing of requests for reconsideration. (1) A request
for reconsideration must be in writing, must include the claimant's
name, address, date of birth and claim number, if applicable, and must
state the basis for the request.
    (2) A request for reconsideration must be received by the Benefits
Administrator within 30 calendar days from the date of the written
notice of the initial benefit determination.
    (d) Reconsideration decisions. A reconsideration decision by the
Benefits Administrator denying (in whole or part) a claim for a Federal
Benefit Payment must--
    (1) Be in writing;
    (2) Provide adequate notice of such denial, setting forth the
specific reason for the denial in a manner calculated to be understood
by the average participant; and
    (3) Provide notice of the right to appeal the Benefit
Administrator's decision to the Department, the address to which such an
appeal must be submitted, and the time limits applicable to such an
appeal.
    (e) Appeal of reconsideration decisions. The Department will review
an appeal of a reconsideration decision under Sec. 29.405.



Sec. 29.405  Appeals to the Department.

    (a) Who may file. Any claimant whose claim for a Federal Benefit
Payment has been denied (in whole or part) by the Benefits Administrator
in a reconsideration decision under Sec. 29.404(d) may appeal that
decision to the Department.
    (b) Form of appeal. An appeal must be in writing, must include the
claimant's name, address, date of birth and claim number, if applicable,
and must state the basis for the appeal.
    (c) Time limits on Appeals. (1) An appeal must be received by the
Department within 30 calendar days from the date of the reconsideration
decision under Sec. 29.404(d).
    (2) The Department may extend the time limit for filing when the
claimant shows that he or she was not notified of the time limit and was
not otherwise aware of it, or that he or she was prevented by
circumstances beyond his or her control from making the request within
the time limit, or for other good and sufficient reason.
    (d) Final decision. After consideration of the appeal, the
Department will issue a final decision. The Department's decision must
be in writing, must fully set forth the Department's findings and
conclusions on the appeal, and must contain notice of the right to
judicial review provided in Sec. 29.406. Copies of the final decision
must be sent to the claimant seeking appeal, to any competing claimants
(see Sec. 29.407) and to the Benefits Administrator.



Sec. 29.406  Judicial review.

    An individual whose claim for a Federal Benefit Payment has been
denied (in whole or part) in a final decision by the Department under
Sec. 29.405 may, within 180 days of the date of the final decision,
file a civil action in the United States District Court for the District
of Columbia. Any such civil action must be filed in accordance with the
rules of that court.



Sec. 29.407  Competing claimants.

    (a) Competing claimants are applicants for survivor benefits based
on the service of a participant when--
    (1) A benefit is payable based on the service of the participant;
    (2) Two or more claimants have applied for benefits based on the
service of the participant; and
    (3) A decision in favor of one claimant will adversely affect
another claimant(s).

[[Page 312]]

    (b)(1) When a competing claimant files a request for reconsideration
under this section, the other competing claimants shall be notified of
the request and given an opportunity to submit written substantiation of
their claim.
    (2) When the Benefits Administrator receives an application from a
competing claimant(s) before any payments are made based upon the
service of the participant, and an initial determination of benefits in
favor of one claimant adversely affects another claimant, all known
claimants concerned will be notified in writing of that decision and
those adversely affected will be given an opportunity to request
reconsideration under the procedures and time limitations set forth in
Sec. 29.404(c). The Benefits Administrator must not execute its
decision until the time limit for filing a request for reconsideration
has expired, or, if a reconsideration decision is made, until the time
limit for filing an appeal to the Department has expired or the
Department has issued a final decision on a timely appeal, whichever is
later.
    (3) When the Benefits Administrator does not receive an application
from a competing claimant(s) until after another person has begun to
receive payments based upon the service of the participant, the payments
will continue until the time limit for filing a request for
reconsideration has expired, or, if a reconsideration decision is made,
until the time limit for filing an appeal to the Department has expired
or the Department has issued a final decision on a timely appeal,
whichever is later.



           Subpart E_Debt Collection and Waivers of Collection

    Source: 66 FR 36705, July 13, 2001, unless otherwise noted.



Sec. 29.501  Purpose; incorporation by reference; scope.

    (a) This subpart regulates--
    (1) The recovery of overpayments of Federal Benefit Payments;
    (2) The standards for waiver of recovery of overpayments of Federal
Benefit Payments; and
    (3) The use of Federal Benefit Payments to recover certain other
debts due the United States.
    (b) The regulations of this subpart incorporate by this reference
all provisions of the Federal Claims Collection Standards (FCCS) (parts
900-904 of Title 31, Code of Federal Regulations), and supplement those
regulations by the prescription of procedures and directives necessary
and appropriate for the operation and administration of the Retirement
Funds. To the extent they are not inconsistent with the regulations
contained in this subpart, the regulations in part 5 of title 31, Code
of Federal Regulations, also apply to the collection of debts under this
subpart.
    (c)(1) Debts based on fraud, misrepresentation, or the presentation
of a false claim. This subpart does not apply to any overpayments of
Federal Benefit Payments which arose, in whole or in part, due to fraud,
misrepresentation, or the presentation of a false claim by the debtor or
any party having an interest in the claim. Such debts should be referred
by the Benefits Administrator immediately to the U.S. Justice Department
for action pursuant to 31 CFR 900.3.
    (2) Tax debts. This subpart does not apply to tax debts.
    (d)(1) Sections 29.501 through 29.506 state the rules of general
applicability to this subpart.
    (2) Sections 29.511 through 29.520 prescribe procedures to be
followed by the Benefits Administrator which are consistent with the
FCCS in the collection of debts owed to the Retirement Funds.
    (3) Sections 29.521 through 29.526 prescribe the standards that the
Department will apply in decisions to waive recoupment or recovery of
overpayments from the Retirement Funds under sections 11021(3) and
11251(c)(2)(B) of the Act.
    (e) This part does not apply to debt collection claims asserted and
requests for waivers of collection initiated before October 1, 1997.
Such debt collection claims must be pursued by the District of Columbia
and such requests for waivers of collection must be pursued with the
District of Columbia.

[66 FR 36705, July 13, 2001, as amended at 70 FR 60005, Oct. 14, 2005]

[[Page 313]]



Sec. 29.502  Definitions.

    For purposes of this subpart--
    Additional charges means interest, penalties, and/or administrative
costs owed on a debt.
    Administrative offset, as defined in 31 U.S.C. 3701(a)(1), means
withholding funds payable by the United States to, or held by the United
States for, a person to satisfy a debt the person owes the United
States.
    Agency means:
    (1) An Executive agency as defined in section 105 of title 5, United
States Code, including the U.S. Postal Service and the U.S. Postal Rate
Commission;
    (2) A military department, as defined in section 102 of title 5,
United States Code;
    (3) An agency or court in the judicial branch, including a court as
defined in section 610 of title 28, United States Code, the District
Court for the Northern Mariana Islands, and the Judicial Panel on
Multidistrict Litigation;
    (4) An agency of the legislative branch, including the U.S. Senate
and the U.S. House of Representatives; and
    (5) Other independent establishments that are entities of the
Federal Government.
    Annuitant means a retired participant, former spouse, spouse,
widow(er), child or other beneficiary receiving recurring Federal
Benefit Payments.
    Annuity means the monthly benefit (including a retirement salary
under the Judges Plan) of indefinite duration payable to an annuitant.
    Anticipated expenses means expenditures which are expected to occur
and for which the debtor can provide documentation of the estimated
cost.
    Beneficiary means an individual designated by a participant, or by
the terms of the Judges Plan, Police Officers and Firefighters Plan, or
Teachers Plan, who is or may become entitled to a benefit under those
plans.
    Change of position for the worse means an individual would be left
in a worse financial position after recovery of the overpayment than
prior to the receipt of the overpayment because the individual
reasonably relied on the amount of the overpayment to his or her
detriment. For example, an individual has ``changed position for the
worse'' if he or she made expenditures or assumed new liabilities that
he or she would not have otherwise done, and he or she is unable to
withdraw from the commitment without incurring significant financial
loss.
    Compromise means accepting less than payment in full in satisfaction
of a debt.
    Consent means the debtor has agreed in writing to administrative
offset of one or more Federal Benefit Payments after receiving notice of
the available rights under 31 U.S.C. 3716 and this subpart; to Federal
salary offset after receiving notice of the available rights under 5
U.S.C. 5514 and 31 CFR part 5; and to judgment offset under section 124
of Public Law 97-276, 96 Stat. 1195-1196.
    Credit bureau has the same meaning as the definition of ``consumer
reporting agency'' provided in 31 U.S.C. 3701(a)(3).
    Creditor agency means the agency to which a debt is owed.
    Debt has the same meaning as the definition of ``debt'' provided in
31 U.S.C. 3701(b)(1), and includes an overpayment of Federal Benefit
Payments.
    Debtor means a person who owes a debt or from whom a debt is to be
recovered, including an annuitant.
    Delinquent means delinquent as defined in 31 CFR 900.2(b).
    Department means the Secretary of the Treasury or a designee
authorized to exercise the Secretary's authority with respect to Federal
Benefit Payments under the Act.
    FCCS means the Federal Claims Collection Standards (parts 900-904 of
Title 31, Code of Federal Regulations).
    Liquid asset means cash or other property readily convertible into
cash with little or no loss of value.
    Lump-sum credit means:
    (1) Under the Judges Plan, the Police Officers and Firefighters
Plan, and the Teachers Plan, the unrefunded amount consisting of--
    (i) Retirement contributions from the basic salary of a participant;
    (ii) Amounts deposited covering earlier creditable service; and
    (iii) Such interest as authorized by statute to be included in the
payment of refunds of retirement contributions; and

[[Page 314]]

    (2) Under the Judges Plan, ``lump-sum credit for survivor annuity''
is defined in section 11-1561(10) of the D.C. Code.
    Offset means to withhold the amount of a debt, or a portion of that
amount, from one or more payments due the debtor. Offset also means the
amount withheld in this manner.
    Ordinary and necessary living expenses means such expenses as rent,
mortgage payments, utilities, maintenance, food (including expenses for
dining out), clothing, insurance (life, health, and accident), taxes,
installment payments, medical expenses, reasonable expenses for
recreation and vacations, expenses for support of a dependent when the
debtor holds primary or joint legal responsibility for such support, and
other miscellaneous expenses that the debtor can establish as being
ordinary and necessary.
    Overpayment or overpayment debt means a payment of one or more
Federal Benefit Payments to an individual in the absence of entitlement
or in excess of the amount to which an individual is properly entitled.
    Participant means an individual who is or may become eligible to
receive a benefit under the Police Officers and Firefighters Plan or
Teachers Plan based on credit for service accrued as of June 30, 1997,
or under the Judges Plan, or whose beneficiaries may be eligible to
receive any such benefit.
    Refund means the payment of a lump-sum credit to an individual who
meets all requirements for payment and files an application for it.
    Relinquish a valuable right means the individual has relinquished a
valuable privilege, claim, entitlement, or benefit having monetary worth
because of the overpayment or because of notice that such a payment
would be made.
    Repayment schedule means the amount of each payment and the number
of payments to be made to liquidate the debt as determined by the
Department or the Benefits Administrator.
    Salary offset means any offset authorized by 5 U.S.C. 5514 and 31
U.S.C. 3716.
    Substantially all, as used in Sec. 29.524, means that a debtor's
income is less than or equal to his or her ordinary and necessary
expenses plus a reasonable monthly allowance for unexpected or emergency
expenses and does not allow for the deduction of a reasonable monthly
installment payment to recover the debt.
    Voluntary repayment agreement means an agreement wherein the debtor
makes installment payments to repay an overpayment debt in accordance
with a repayment schedule agreed to by the Benefits Administrator or the
Department.
    Waiver means a decision not to recover all or part of an overpayment
debt owed to the Retirement Funds under authority of sections 11021(3)
or 11251(c)(2)(B) of the Act.



Sec. 29.503  Prohibition against collection of debts.

    (a) Debts may be collected from Federal Benefit Payments only to the
extent expressly authorized by Federal debt collection statutes and any
other applicable Federal law.
    (b) When collection of a debt from Federal Benefit Payments is
authorized under paragraph (a) of this section, the collection will be
made in accordance with this subpart and other applicable federal law.



Sec. 29.504  Status of debts.

    A payment of a Federal Benefit Payment to a debtor because of an
error on the part of the Department or Benefits Administrator, or the
failure of the creditor agency to properly and/or timely submit a debt
claim, does not erase the debt or affect the validity of the claim by
the creditor agency.



Sec. 29.505  Compromise of debts; termination and suspension of
collection actions.

    The procedures for compromise of a claim for an overpayment or the
termination or suspension of a collection action seeking to recover an
overpayment, other than waiver of an overpayment under Sec. Sec. 29.521
through 29.526, are controlled exclusively by the FCCS and 31 CFR part
5.



Sec. 29.506  Recovery of other debts owed to the United States.

    (a) Procedures for Creditor Agencies. Agencies seeking to recover a
debt by offset of Federal Benefit Payments

[[Page 315]]

payable to the debtor must comply with the offset procedures set forth
in 31 U.S.C. 3716 and the FCCS. A creditor agency may seek to collect a
debt through offset of Federal Benefit Payments pursuant to the
Department's procedures for administrative offset set forth in 31 CFR
part 5.
    (b) Offset by the Benefits Administrator. As required by 31 U.S.C.
3716(c), the Benefits Administrator must compare payment records of the
Retirement Funds with records of debts submitted to the Financial
Management Service for collection by administrative offset, and must
offset payments to satisfy, in whole or in part, debts owed by any
annuitant.

                       Collection of Overpayments



Sec. 29.511  Demand letters.

    Except as provided in Sec. 29.516(e), before starting collection
action to recover an overpayment, the Benefits Administrator must send a
demand letter that informs the debtor in writing--
    (a) That an overpayment has occurred, the amount of the overpayment,
and the facts giving rise to the overpayment;
    (b) The date by which payment of the debt should be made to avoid
additional charges (i.e., interest, penalties and administrative costs)
permitted by the FCCS and enforced collection;
    (c) The requirement that any overpayment debt delinquent for more
than 180 days be transferred to the Department of the Treasury's
Financial Management Service for collection;
    (d) The name, address, and phone number of the appropriate person or
office the debtor may contact about the debt;
    (e) The remedies which may be used to enforce payment of the debt,
including assessment of interest, administrative costs and penalties;
administrative wage garnishment; the use of collection agencies; Federal
salary offset; tax refund offset; administrative offset; and litigation.
    (f) Whether offset is available and, if so, the types of payment(s)
to be offset or eligible for offset, the repayment schedule (if any),
the right to request an adjustment in the repayment schedule, and the
right to request a voluntary repayment agreement in lieu of offset;
    (g) An explanation of the Department's policy on interest,
penalties, and administrative costs as set forth in 31 CFR part 5, the
FCCS, and 31 U.S.C. 3717, including a statement that such assessments
must be made unless excused in accordance with the FCCS;
    (h) The debtor's opportunity to request repayment in installments if
the debtor can show an inability to repay the debt in one lump sum;
    (i) The debtor's opportunity to inspect and/or receive a copy of the
records relating to the overpayment;
    (j) The method and time period (60 calendar days) for requesting
reconsideration, waiver, and/or compromise of the overpayment;
    (k) That all requests for waiver or compromise must be accompanied
by a disclosure of the debtor's financial condition and ability to pay
the debt;
    (l) The standards used by the Department in deciding requests for
waiver (set forth in Sec. Sec. 29.521 through 29.526) and compromise
(set forth in 31 CFR 902.2); and
    (m) The fact that a timely filing of a request for reconsideration,
waiver and/or compromise, or a subsequent timely appeal of a
reconsideration decision, will stop collection proceedings, unless--
    (1) Failure to take the offset would substantially prejudice the
Federal Government's ability to collect the debt; and
    (2) The time before the payment is to be made does not reasonably
permit the completion of these procedures.



Sec. 29.512  Reconsideration by the Benefits Administrator.

    (a) Right to reconsideration of overpayment determinations.
Individuals who receive a demand letter and who wish to contest the
existence or amount of the overpayment may ask the Benefits
Administrator to reconsider the determination.
    (b) Requests for waiver or compromise. Individuals who wish to seek
waiver or compromise of the overpayment may file such requests with the
Department under Sec. 29.514. An individual may file a request for
reconsideration in addition to a request for waiver or compromise.

[[Page 316]]

    (c) Form and timing of requests for reconsideration. (1) A request
for reconsideration must be in writing and must state the basis for the
request. Individuals requesting reconsideration will be given a full
opportunity to present any pertinent information and documentation
supporting their position and should, to the extent possible, include
such information and documentation in their request.
    (2) A request for reconsideration must be received by the Benefits
Administrator within 60 calendar days of the date of the demand letter.
The Department may extend the time limit for filing when the individual
shows that he or she was not notified of the time limit and was not
otherwise aware of it, or that he or she was prevented by circumstances
beyond his or her control from making the request within the time limit,
or for other good and sufficient reason.
    (3) When a request for reconsideration covered by this subpart is
properly filed before the death of the debtor, it will be processed to
completion unless the relief sought is nullified by the debtor's death.
    (d) Reconsideration decisions. (1) The Benefits Administrator's
decision on a request for reconsideration will be based upon the
individual's written submissions, evidence of record, and other
pertinent available information.
    (2) A reconsideration decision by the Benefits Administrator must--
    (i) Be in writing;
    (ii) Provide notice of the extent of the individual's liability for
the overpayment, if any;
    (iii) If the individual is determined to be liable for all or a
portion of the overpayment, reaffirm or modify the conditions for the
collection of the overpayment previously proposed in the demand letter;
    (iv) Provide notice of the right to appeal the Benefits
Administrator's decision to the Department, the address to which such an
appeal must be submitted, and the time limits applicable to such an
appeal; and
    (v) State that a timely appeal of the Benefits Administrator's
decision to the Department will suspend action to collect the debt.
    (e) Appeal of reconsideration decisions. The Department will review
an appeal of a reconsideration decision under Sec. 29.513.



Sec. 29.513  Appeals to the Department.

    (a) Form of appeal. An appeal of a reconsideration decision under
Sec. 29.512 must be in writing and must state the basis for the appeal.
    (b) Time limits on appeals. (1) An appeal must be received by the
Department within 60 calendar days from the date of the reconsideration
decision.
    (2) The Department may extend the time limit for filing when the
individual shows that he or she was not notified of the time limit and
was not otherwise aware of it, or that he or she was prevented by
circumstances beyond his or her control from making the request within
the time limit, or for other good and sufficient reason.
    (c) Final decision. After consideration of the appeal, the
Department will issue a final decision. The Department's decision will
be in writing, will fully set forth the Department's findings and
conclusions on the appeal, and will contain notice of the right to
judicial review provided in Sec. 29.515. If the Department determines
that the individual is liable for all or a portion of the overpayment,
the decision also will contain the conditions for the collection of the
overpayment. Copies of the final decision will be sent to the individual
seeking appeal and to the Benefits Administrator.



Sec. 29.514  Requests for waiver and/or compromise.

    (a) Right to request waiver and/or compromise. Individuals who
receive a demand letter regarding an overpayment may ask the Department
to waive and/or compromise, in whole or part, the amount of the
overpayment.
    (b) Requests for reconsideration. Individuals who have filed a
request for reconsideration under Sec. 29.512 may also request a waiver
and/or compromise under this section.
    (c) Form and timing of requests for waiver and/or compromise. (1) A
request for waiver and/or compromise must be in writing and must state
the basis for the request. Individuals making such

[[Page 317]]

requests will be given a full opportunity to present any pertinent
information and documentation supporting their position and should, to
the extent possible, include such information and documentation in their
request. Individuals seeking waiver or compromise of an overpayment must
also submit required financial information identified in the demand
letter.
    (2) A request for waiver or compromise must be filed with the
Department. If the request is sent by mail, it must be postmarked within
60 calendar days of the date of the demand letter. If the request is
hand delivered or delivered electronically, it must be received within
60 calendar days of the date of the demand letter. The Department may
extend the time limit for filing when the individual shows that he or
she was not notified of the time limit and was not otherwise aware of
it, or that he or she was prevented by circumstances beyond his or her
control from making the request within the time limit, or for other good
and sufficient reason.
    (3) When a request for waiver and/or compromise under this section
is properly filed before the death of the debtor, it will be processed
to completion unless the relief sought is nullified by the debtor's
death.
    (d) Waiver and/or compromise decisions. (1) The Department's
decision on a request for waiver and/or compromise will be based upon
the individual's written submissions, evidence of record, and other
pertinent available information. An individual's request for waiver will
be evaluated by the standards set forth in Sec. 29.521 through Sec.
29.526. An individual's request for compromise will be evaluated by the
standards set forth in the FCCS in 31 CFR part 902.
    (2) A waiver or compromise decision by the Department will--
    (i) Be in writing;
    (ii) Provide notice of whether the overpayment will be waived or
compromised, and the extent to which the individual is still liable for
the overpayment, if at all;
    (iii) If the individual is determined to be liable for all or a
portion of the overpayment, reaffirm or modify the conditions for the
collection of the overpayment previously proposed in the demand letter;
and
    (iv) Be issued within 120 calendar days from the Department's
receipt of a timely request for waiver and/or compromise. This time
limit does not apply to requests for compromise that are referred to the
Department of Justice for consideration pursuant to 31 CFR 902.1(b).



Sec. 29.515  Judicial review.

    An individual whose request for reconsideration has been denied (in
whole or part) in a final decision by the Department under Sec. 29.513
may, within 180 days of the date of the final decision, file a civil
action in the United States District Court for the District of Columbia.
Any such civil action must be filed in accordance with the rules of that
court.



Sec. 29.516  Collection of overpayments.

    (a) Means of collection. Collection of an overpayment may be made by
means of offset under Sec. 29.517, or under any statutory provision
providing for offset of money due the debtor from the Federal Government
including, but not limited to, Federal Benefit Payments. Collection may
also be effected by referral to the Justice Department for litigation,
as provided in Sec. 29.520, or referral to a collection agency as
provided in Sec. 29.519, or by other means authorized by federal law.
    (b) Additional charges. Interest, penalties, and administrative
costs will be assessed on the overpayment in accordance with standards
established in 31 U.S.C. 3717 and 31 CFR 901.9. Additional charges will
be waived when required by the FCCS. The Department will waive the
collection of interest on the overpayment pending the Benefits
Administrator's consideration of a request for reconsideration and the
Department's consideration of a request for waiver and/or compromise or
the appeal of a reconsideration decision. In addition, such charges may
be waived when the Department determines--
    (1) Collection of those charges would be against equity and good
conscience under the standards prescribed in Sec. Sec. 29.523 through
29.525; or

[[Page 318]]

    (2) Waiver of those charges would be in the best interest of the
United States.
    (c) Collection in installments. (1) Whenever feasible, overpayments
will be collected in one lump sum.
    (2) However, installment payments may be effected when--
    (i) The debtor establishes that he or she is financially unable to
pay in one lump sum; or
    (ii)(A) The benefit payable is insufficient to make collection in
one lump sum;
    (B) The debtor fails to respond to a demand for full payment; and
    (C) Offset is available.
    (d) Offset Amount. (1) The amount offset from a monthly Federal
Benefit Payment will be the lesser of:
    (i) The amount of the debt, including any interest, penalties and
administrative costs;
    (ii) An amount equal to 15 percent of the monthly Federal Benefit
Payment; or
    (iii) The amount, if any, by which the monthly Federal Benefit
Payment exceeds $750.
    (2) For purposes of this subsection, the ``monthly Federal Benefit
Payment'' is the amount of the gross monthly benefit after any
reductions or deductions required under law, including reductions made
to recover overpayments of Federal Benefit Payments.
    (e) Commencement of collection. (1) Except as provided in paragraph
(e)(2) of this section, collection will begin after the time limits for
requesting further rights stated in Sec. 29.512 through Sec. 29.514
expire and no such requests have been made, or after the Benefits
Administrator and/or the Department have issued decisions on all timely
requests for or appeals of those rights, unless failure to make an
offset would substantially prejudice the Department's ability to collect
the overpayment and the time before the payment is to be made does not
reasonably permit the completion of the proceedings in Sec. 29.511
through Sec. 29.514 or litigation. When offset begins without
completion of the administrative review process, these procedures will
be completed promptly, and amounts recovered by offset but later found
not owed will be refunded promptly.
    (2) The procedures identified in Sec. 29.511 through Sec. 29.514
will not be applied when the overpayment is caused by--
    (i) A retroactive adjustment in the periodic rate of annuity or any
deduction taken from annuity when the adjustment is a result of the
annuitant's election of different entitlements under law, if the
adjustment is made within 120 days of the effective date of the
election; or
    (ii) interim estimated payments made before the formal determination
of entitlement to annuity, if the amount is recouped from the total
annuity payable on the first day of the month following the later of--
    (A) The last interim payment or
    (B) The date the formal determination is made.
    (f) Collection of delinquent debts--(1) Debts delinquent over 180
days. The Benefits Administrator must refer all overpayment debts that
are over 180 days delinquent to the Secretary for collection pursuant to
31 U.S.C. 3711(g) and 3716, and 31 CFR part 901.
    (2) Debts delinquent less than 180 days. Once an overpayment debt
becomes delinquent, the Benefits Administrator should refer it to the
Secretary for collection by centralized administrative offset pursuant
to 31 CFR 901.3, unless collection of the debt by some other means is
likely to occur in a more timely and efficient manner.
    (3) Once a debt is referred under this subsection, the Benefits
Administrator has no further obligation to collect the debt.



Sec. 29.517  Collection by offset.

    (a) Offset from retirement payments. An overpayment may be collected
in whole or in part from any refund payment or recurring Federal Benefit
Payments.
    (b) Offset from other payments--(1) Administrative offset. When
offset under subsection (a) is not available, an overpayment may be
offset from other Federal payments due the debtor from other agencies
under the procedures set forth in 31 CFR part 5 and 31 CFR 901.3(c).

[[Page 319]]

    (2) Salary offset. When the debtor is an employee of the Federal
Government, the Department may effect collection of an overpayment by
offset of the debtor's pay in accordance with regulations published to
implement such offsets under 5 U.S.C. 5514 (see 5 CFR part 550, subpart
K; 31 CFR 285.7; and 31 CFR Part 5). Due process described in the
federal salary offset regulations of 31 CFR part 5 will apply. When the
debtor did not receive a hearing under those regulations and requests
such a hearing, one will be conducted in accordance with 5 CFR part 550,
subpart K and 31 CFR part 5.
    (3) Tax refund offset. The Department may effect collection of an
overpayment by offset of the debtor's tax refund in accordance with the
Department's tax refund offset regulations found at 31 CFR part 5.



Sec. 29.518  Reporting delinquent debts to credit bureaus.

    (a) Notice. If a debtor's response to the demand letter does not
result in payment in full, payment by offset, or payment in accordance
with a voluntary repayment agreement or other repayment schedule
acceptable to the Benefits Administrator, and the debtor's rights under
Sec. 29.512 through Sec. 29.514 have been exhausted, the Benefits
Administrator must report the debtor to a credit bureau. In addition, a
debtor's failure to make subsequent payments in accordance with a
repayment schedule must result in a report to a credit bureau. Before
making a report to a credit bureau, the Benefits Administrator must
notify the debtor in writing that--
    (1) The payment is overdue;
    (2) The Benefits Administrator intends, after 60 days, to make a
report as described in paragraph (b) of this section to a credit bureau;
    (3) The debtor's right to dispute the liability has been exhausted
under Sec. 29.512 through Sec. 29.514; and
    (4) The debtor may avoid having the Benefits Administrator report
the debtor to a credit bureau by paying the debt in one lump sum or
making payments current under a repayment schedule.
    (b) Report. If, after being sent the notice described in paragraph
(a) of this section, the debtor does not pay the overpayment debt or
make payments current under a repayment schedule or fails to respond to
the notice, and 60 days have elapsed since the notice was mailed, the
Benefits Administrator will report to a credit bureau that the debtor is
responsible for an unpaid debt and provide the following information:
    (1) The debtor's name, address, taxpayer identification number, and
any other information necessary to establish the identity of the
individual;
    (2) The amount, status, and history of the debt; and
    (3) The fact that the debt arose in connection with the
administration of Federal Benefit Payments under a District Retirement
Fund.
    (c) Subsequent reports. The Benefits Administrator must update its
report to the credit bureau whenever it has knowledge of events that
substantially change the status or the amount of the liability.
    (d) Other reporting of delinquent debts. Pursuant to 31 CFR 901.4,
delinquent overpayment debts should be reported to the Department of
Housing and Urban Development's Credit Alert Interactive Voice Response
System (CAIVRS).
    (e) Privacy Act considerations. A delinquent debt may not be
reported under this section unless a notice issued pursuant to the
Privacy Act, 5 U.S.C. 552a(e)(4), authorizes the disclosure of
information about the debtor to a credit bureau or CAIVRS.



Sec. 29.519  Referral to a collection agency.

    (a) The Department retains the responsibility for resolving
disputes, compromising debts, referring overpayment debts for
litigation, and suspending or terminating collection action.
    (b) The Department may not refer overpayment debts to commercial
collection agencies until all procedures required by or requested under
Sec. 29.511 through Sec. 29.514 have been completed.

[[Page 320]]



Sec. 29.520  Referral for litigation.

    The Department may refer to the Justice Department for litigation
overpayment debts which cannot be compromised or waived, or on which
collection activity cannot be suspended or terminated, and which the
Department has been unable to recover pursuant to the collection
activity described in Sec. 29.511 through Sec. 29.519. (See 31 CFR
part 904.) Such debts should be referred to the Justice Department as
early as possible, but at least within 1 year of the date such debts
last became delinquent. In the case of overpayments arising from fraud,
misrepresentation, or the presentation of a false claim, referral should
be made to the Justice Department immediately. (See 31 CFR 900.3(a).)
Referral of a debt to the Justice Department will suspend processing
under Sec. 29.511 through Sec. 29.519 of this subpart.

                  Standards for Waiver of Overpayments



Sec. 29.521  Conditions for waiver and other adjustments.

    (a) General. Overpayments made from the Retirement Funds will be
recovered unless there is substantial evidence that the individual from
whom recovery is to be made is eligible for waiver.
    (b) Waiver. The Department may waive an overpayment from the
Retirement Funds (provided there is no indication of fraud,
misrepresentation, or lack of good faith on the part of the debtor)
under sections 11021(3) or 11251(c)(2)(B) of the Act when it is
established by substantial evidence that the individual from whom
recovery is to be made--
    (1) Is not at fault in causing or contributing to the overpayment,
and
    (2) Recovery would be against equity and good conscience.
    (c) Adjustment in the installment schedule. (1)(i) An overpayment
will not be waived because of financial hardship if a reasonable
installment schedule can be established for repayment of the debt by
adjusting the installment schedule originally established.
    (ii) For example, if the Department finds that the original
installment schedule--24 installments at $125 each--causes the debtor
financial hardship, but that repayment in 60 installments at $50 each
does not, it may adjust the installments and recover the debt in full.
    (2) Where it has been determined that an individual is ineligible
for a waiver, but the individual has shown that collection action
pursuant to the original installment schedule would cause him or her
financial hardship, the Department may--
    (i) Adjust the installment schedule if the individual shows that it
would cause him or her financial hardship to make payments at the rate
initially scheduled by the Department; or
    (ii) Terminate the collection action under 31 CFR 903.3 if the costs
of collecting the debt are anticipated to exceed the amount recoverable.



Sec. 29.522  Fault.

    (a) General rule. A debtor is considered to be at fault if he or
she, or any other person having an interest in obtaining a waiver of the
claim, caused or contributed to the accrual of the overpayment. The
Department considers a debtor or any other person having an interest in
obtaining a waiver of the claim to have caused or contributed to the
accrual of an overpayment if--
    (1) Payment resulted from the individual's incorrect but not
fraudulent statement, which the individual knew or should have known to
be incorrect; or
    (2) Payment resulted from the individual's failure to disclose facts
in his or her possession which the individual knew or should have known
were material, when the Department has identified that the individual
has a duty to report and has clearly notified the individual of this
reporting requirement.
    (3) The following factors may affect the decision as to whether the
debtor is or is not at fault where the debtor submitted an incorrect
statement, or the debtor failed to disclose material facts in his or her
possession--
    (i) The debtor's age;
    (ii) The debtor's physical and/or mental condition; and
    (iii) The availability and nature of the information provided to the
debtor by the Department.
    (b) Knowledge of an overpayment. (1) Individuals who are aware that
they

[[Page 321]]

are not entitled to a payment or are aware that a payment is higher than
the payment to which they are entitled are not considered to have
contributed to the overpayment if they promptly contact the Benefits
Administrator and question the correctness of the payment and take no
further action in reliance of the overpayment.
    (2) Any contact made with the Benefits Administrator concerning the
overpayment within 60 days of receipt (if the overpayment is a recurring
payment, contact must be made within 60 days of the initial payment)
will satisfy the prompt notification requirement.
    (c) Reasonable person standard. The Department will use a reasonable
person standard to determine whether an individual should have known
that a statement was incorrect or that material facts in the
individual's possession should have been disclosed. The reasonable
person standard will take into account the objective factors set forth
is paragraph (a)(3) of this section.



Sec. 29.523  Equity and good conscience.

    Recovery is against equity and good conscience when there is
substantial evidence that--
    (a) It would cause financial hardship to the person from whom it is
sought no matter what the amount and length of the proposed installment;
    (b) The recipient of the overpayment can show (regardless of his or
her financial circumstances) that due to the notice that such payment
would be made or because of the incorrect payment he or she either has
relinquished a valuable right or has changed positions for the worse; or
    (c) Recovery would be unconscionable under the circumstances.



Sec. 29.524  Financial hardship.

    Financial hardship may be deemed to exist when the debtor needs
substantially all of his or her current and anticipated income and
liquid assets to meet current and anticipated ordinary and necessary
living expenses during the projected period of collection. Financial
hardship will not be found to exist when the debtor merely establishes
that the repayment causes a financial burden, i.e., when it is
inconvenient to repay the debt. If there are anticipated changes in
income or expenses that would allow for the recovery of the overpayment
at a later date, the Department may suspend collection action until a
future date.
    (a) Considerations. Pertinent considerations in determining whether
recovery would cause financial hardship include the following:
    (1) The debtor's financial ability to pay at the time collection is
scheduled to be made, and
    (2) Income to other family member(s), if such member's ordinary and
necessary living expenses are included in expenses reported by the
debtor.



Sec. 29.525  Ordinary and necessary living expenses.

    An individual's ordinary and necessary living expenses include rent,
mortgage payments, utilities, maintenance, transportation, food,
clothing, insurance (life, health, and accident), taxes, installment
payments for which the individual is already liable, medical expenses,
support expenses for which the individual is legally responsible, and
other miscellaneous expenses that the individual can establish as being
ordinary and necessary.



Sec. 29.526  Waiver precluded.

    Waivers will not be offered or granted when--
    (1) The overpayment was obtained by fraud, misrepresentation, or by
improper negotiation of checks or withdrawal of electronic fund transfer
payments after the death of the payee; or
    (2) The overpayment was made to an estate and a timely demand for
repayment is made prior to the final disbursement by the administrator
or executor of the estate.



PART 30_TARP STANDARDS FOR COMPENSATION AND CORPORATE GOVERNANCE--Table
of Contents



Sec.
30.0 Executive compensation and corporate governance.
30.1 Q-1: What definitions apply in this part?
30.2 Q-2: To what entities does this part apply?
30.3 Q-3: How are the SEOs and the most highly compensated employees
          identified

[[Page 322]]

          for purposes of compliance with this part?
30.4 Q-4: What actions are necessary for a TARP recipient to comply with
          the standards established under sections 111(b)(3)(A),
          111(b)(3)(E), 111(b)(3)(F) and 111(c) of EESA (evaluation of
          employee plans and potential to encourage excessive risk or
          manipulation of earnings)?
30.5 Q-5: How does a TARP recipient comply with the requirements under
          Sec. 30.4 (Q-4) of this part that the compensation committee
          discuss, evaluate, and review the SEO compensation plans and
          other employee compensation plans to ensure that the SEO
          compensation plans do not encourage the SEOs to take
          unnecessary and excessive risks that threaten the value of the
          TARP recipient, or that the employee compensation plans pose
          unnecessary risks to the TARP recipient?
30.6 Q-6: How does a TARP recipient comply with the requirement under
          Sec. 30.4 (Q-4) of this part that the compensation committee
          discuss, evaluate, and review the employee compensation plans
          to ensure that these plans do not encourage the manipulation
          of reported earnings of the TARP recipient to enhance the
          compensation of any of the TARP recipient's employees?
30.7 Q-7: How does a TARP recipient comply with the certification and
          disclosure requirements under Sec. 30.4 (Q-4) of this part?
30.8 Q-8: What actions are necessary for a TARP recipient to comply with
          the standards established under section 111(b)(3)(B) of EESA
          (the ``clawback'' provision requirement)?
30.9 Q-9: What actions are necessary for a TARP recipient to comply with
          the standards established under section 111(b)(3)(C) of EESA
          (the prohibition on golden parachute payments)?
30.10 Q-10: What actions are necessary for a TARP recipient to comply
          with section 111(b)(3)(D) of EESA (the limitation on bonus
          payments)?
30.11 Q-11: Are TARP recipients required to meet any other standards
          under the executive compensation and corporate governance
          standards in section 111 of EESA?
30.12 Q-12: What actions are necessary for a TARP recipient to comply
          with section 111(d) of EESA (the excessive or luxury
          expenditures policy requirement)?
30.13 Q-13: What actions are necessary for a TARP recipient to comply
          with section 111(e) of EESA (the shareholder resolution on
          executive compensation requirement)?
30.14 Q-14: How does section 111 of EESA operate in connection with an
          acquisition, merger, or reorganization?
30.15 Q-15: What actions are necessary for a TARP recipient to comply
          with the certification requirements of section 111(b)(4) of
          EESA?
30.16 Q-16: What is the Office of the Special Master for TARP Executive
          Compensation, and what are its powers, duties and
          responsibilities?
30.17 Q-17: How do the effective date provisions apply with respect to
          the requirements under section 111 of EESA?

    Authority: 12 U.S.C. 5221; 31 U.S.C. 321.

    Source: 74 FR 28405, June 15, 2009, unless otherwise noted.



Sec. 30.0  Executive compensation and corporate governance.

    The following questions and answers reflect the executive
compensation and corporate governance requirements of section 111 of the
Emergency Economic Stabilization Act of 2008, as amended (12 U.S.C.
5221) (EESA), with respect to participation in the Troubled Assets
Relief Program (TARP) established by the Department of the Treasury
(Treasury) thereunder.



Sec. 30.1  Q-1: What definitions apply in this part?

    Affiliate. The term ``affiliate'' means an ``affiliate'' as that
term is defined in Rule 405 of the Securities Act of 1933 (17 CFR
230.405).
    Annual compensation. (1) General rule. The term ``annual
compensation'' means, except as otherwise explicitly provided in this
part, the dollar value for total compensation for the applicable fiscal
year as determined pursuant to Item 402(a) of Regulation S-K under the
Federal securities laws (17 CFR 229.402(a)). Accordingly, for this
purpose the amounts required to be disclosed pursuant to paragraph
(c)(2)(viii) of Item 402(a) of Regulation S-K (actuarial increases in
pension plans and above market earnings on deferred compensation) are
not required to be included in annual compensation.
    (2) Application to private TARP recipients. For purposes of
determining annual compensation, a TARP recipient that does not have
securities registered with the SEC pursuant to the Federal securities
laws must follow the requirements set forth in paragraph (1) of this
definition.
    ARRA. The term ``ARRA'' means the American Recovery and Reinvestment
Act of 2009 (Pub. L. 111-5).

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    Benefit plan. The term ``benefit plan'' means any plan, contract,
agreement or other arrangement that is an ``employee welfare benefit
plan'' as that term is defined in section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended (29 U.S.C. 1002(1)),
or other usual and customary plans such as dependent care, tuition
reimbursement, group legal services or cafeteria plans; provided,
however, that this term does not include:
    (1) Any plan that is a deferred compensation plan; or
    (2) Any severance pay plan, whether or not nondiscriminatory, or any
other arrangement that provides for payment of severance benefits to
eligible employees upon voluntary termination for good reason,
involuntary termination, or termination under a window program as
defined in 26 CFR 1.409A-1(b)(9)(vi).
    Bonus. The term ``bonus'' means any payment in addition to any
amount payable to an employee for services performed by the employee at
a regular hourly, daily, weekly, monthly, or similar periodic rate. Such
term generally does not include payments to or on behalf of an employee
as contributions to any qualified retirement plan (as defined in section
4974(c) of the Internal Revenue Code (26 U.S.C. 4974(c)), benefits under
a broad-based benefit plan, bona fide overtime pay, or bona fide and
routine expense reimbursements. In addition, provided that the rate of
commission is pre-established and reasonable, and is applied
consistently to the sale of substantially similar goods or services,
commission compensation will not be treated as a bonus. For this
purpose, a bonus may include a contribution to, or other increase in
benefits under, a nonqualified deferred compensation plan, regardless of
when the actual payment will be made under the plan. A bonus may also
qualify as a retention award or as incentive compensation.
    Bonus payment. For purposes of this part, except where otherwise
noted, the term ``bonus payment'' includes a payment that is, or is in
the nature of, a bonus, incentive compensation, or retention award.
Whether a payment is a bonus payment, or whether the right to a payment
is a right to a bonus payment, is determined based upon all the facts
and circumstances, and a payment may be a bonus payment regardless of
the characterization of such payment by the TARP recipient or the
employee. For purposes of this part, a bonus payment may include the
forgiveness of a loan or other amount that otherwise may be required to
be paid by the employee to the employer.
    Commission compensation. (1) Definition. The term ``commission
compensation'' means:
    (i) Compensation or portions of compensation earned by an employee
consistent with a program in existence for that type of employee as of
February 17, 2009, if a substantial portion of the services provided by
this employee consists of the direct sale of a product or service to an
unrelated customer, these sales occur frequently and in the ordinary
course of business of the TARP recipient (but not a specified
transaction, such as an initial public offering or sale or acquisition
of a specified entity or entities), the compensation paid by the TARP
recipient to the employee consists of either a portion of the purchase
price for the product or service sold to the unrelated customer or an
amount substantially all of which is calculated by reference to the
volume of sales to the unrelated customers, and payment of the
compensation is either contingent upon the TARP recipient receiving
payment from the unrelated customer for the product or service or, if
applied consistently to all similarly situated employees, is contingent
upon the closing of the sales transaction and such other requirements as
may be specified by the TARP recipient before the closing of the sales
transaction with the unrelated customer;
    (ii) Compensation or portions of compensation earned by an employee
that meet the requirements of paragraph (1)(i) of this definition except
that the transaction occurs with a related customer, provided that
substantial sales from which commission compensation arises are made, or
substantial services from which commission compensation arises are
provided, to unrelated customers by the service recipient, the sales and
service arrangement and the commission arrangement with respect

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to the related customer are bona fide, arise from the service
recipient's ordinary course of business, and are substantially the same,
both in term and in practice, as the terms and practices applicable to
unrelated customers to which individually or in the aggregate
substantial sales are made or substantial services provided by the
service recipient; or
    (iii) Compensation or portions of compensation earned by an employee
consistent with a program in existence for that type of employee as of
February 17, 2009, if a substantial portion of the services provided by
this employee to the TARP recipient consists of sales of financial
products or other direct customer services with respect to unrelated
customer assets or unrelated customer asset accounts that are generally
intended to be held indefinitely (and not customer assets intended to be
used for a specific transaction, such as an initial public offering, or
sale or acquisition of a specified entity or entities), the unrelated
customer retains the right to terminate the customer relationship and
may move or liquidate the assets or asset accounts without undue delay
(which may be subject to a reasonable notice period), the compensation
consists of a portion of the value of the unrelated customer's overall
assets or asset account balance, an amount substantially all of which is
calculated by reference to the increase in the value of the overall
assets or account balance during a specified period, or both, or is
calculated by reference to a contractual benchmark (such as a securities
index or peer results), and the value of the overall assets or account
balance and commission compensation is determined at least annually. For
purposes of this definition, a customer is treated as an unrelated
customer if the person would not be treated as related to the TARP
recipient under 26 CFR 1.409A-1(f)(2)(ii) and the person would not be
treated as providing management services to the TARP recipient under 26
CFR 1.409A-1(f)(2)(iv).
    (2) Examples. The following examples illustrate the provisions of
paragraph (1) of this definition:

    Example 1. Employee A is an employee of TARP recipient. Among TARP
recipient's businesses is the sale of life insurance policies, and TARP
recipient buys and sells such policies frequently as part of its
ordinary course of business. Employee A's primary duties consist of
selling life insurance policies to customers unrelated to the TARP
recipient. Under a commission program existing for all TARP Recipient
employees selling life insurance policies as of February 17, 2009,
Employee A is entitled to receive an amount equal to 75% of the total
first year's premium paid by an unrelated customer to whom Employee A
has sold a life insurance policy. The payments to Employee A under the
program constitute commission compensation.
    Example 2. The same facts as Example 1, except that under the
program, the rate of commission increases to 80% of the total first
year's premium paid by a customer once Employee A has sold $10 million
in policies in a year. Provided that 80% is a reasonable commission, the
payments to Employee A under the program constitute commission
compensation.
    Example 3. Employee B is an employee of TARP recipient. Among TARP
recipient's businesses is the investment management of unrelated
customer asset accounts, and TARP recipient provides such services
routinely and in the ordinary course of business. Employee B's primary
duties as an employee consist of managing the investments of the asset
accounts of specified unrelated customers who have deposited amounts
with the TARP recipient. Under a program in existence on February 17,
2009, Employee B is entitled to receive an amount equal to 1% of the
aggregate account balances of the assets under management, as determined
each December 31. The payments to Employee B constitute commission
compensation.
    Example 4. TARP recipient employs Employee C. As part of Employee
C's duties, Employee C is responsible for specified aspects of any
acquisition of an unrelated entity by TARP Recipient. As part of an
acquisition in 2009, Employee C is entitled to 1% of the purchase price
if and when the transaction closes. Regardless of whether such an
arrangement was customary or established under a specific program as of
February 17, 2009, the amount is not commission compensation because the
compensation relates to a specified transaction, in this case the
purchase of the entity. Accordingly, the compensation is incentive
compensation.
    Example 5. TARP recipient employs Employee D. As part of Employee
D's duties, Employee D is responsible for managing the initial public
offerings of securities of unrelated customers of TARP recipient. As
part of an initial public offering in 2009, Employee D is entitled to 1%
of the purchase price if and when the initial public offering closes.
Regardless of whether such an arrangement

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was customary or established under a specific program as of February 17,
2009, the amount is not commission compensation because the compensation
relates to a specified transaction, in this case the initial public
offering. Accordingly, the compensation is incentive compensation.

    Compensation means all remuneration for employment, including but
not limited to salary, commissions, tips, welfare benefits, retirement
benefits, fringe benefits and perquisites.
    Compensation committee. (1) General rule. The term ``compensation
committee'' means a committee of independent directors, whose
independence is determined pursuant to Item 407(a) of Regulation S-K
under the Federal securities laws (17 CFR 229.407(a)).
    (2) Application to private TARP recipients. For purposes of
determining director independence, a TARP recipient that does not have
securities registered with the SEC pursuant to the Federal securities
laws must follow the requirements set forth in Item 407(a)(1)(ii) of
Regulation S-K under the Federal securities laws (17 CFR
229.407(a)(1)(ii)).
    Compensation structure. The term ``compensation structure'' means
the characteristics of the various forms of total compensation that an
employee receives or may receive, including the amounts of such
compensation or potential compensation relative to the amounts of other
types of compensation or potential compensation, the amounts of such
compensation or potential compensation relative to the total
compensation over the relevant period, and how such various forms of
compensation interrelate to provide the employee his or her ultimate
total compensation. These characteristics include, but are not limited
to, whether the compensation is provided as salary, short-term incentive
compensation, or long-term incentive compensation, whether the
compensation is provided as cash compensation, equity-based
compensation, or other types of compensation (such as executive
pensions, other benefits or perquisites), and whether the compensation
is provided as current compensation or deferred compensation.
    Deferred compensation plan. The term ``deferred compensation plan''
means
    (1) Any plan, contract, agreement, or other arrangement under which
an employee voluntarily elects to defer all or a portion of the
reasonable compensation, wages, or fees paid for services rendered which
otherwise would have been paid to the employee at the time the services
were rendered (including a plan that provides for the crediting of a
reasonable investment return on such elective deferrals), provided that
the TARP recipient either:
    (i) Recognizes a compensation expense and accrues a liability for
the benefit payments according to GAAP; or
    (ii) Segregates or otherwise sets aside assets in a trust which may
only be used to pay plan and other benefits, except that the assets of
this trust may be available to satisfy claims of the TARP recipient's
creditors in the case of insolvency; or
    (2) A nonqualified deferred compensation or supplemental retirement
plan, other than an elective deferral plan established by a TARP
recipient:
    (i) Primarily for the purpose of providing benefits for a select
group of directors, management, or highly compensated employees in
excess of the limitations on contributions and benefits imposed by
sections 415, 401(a)(17), 402(g) or any other applicable provision of
the Internal Revenue Code (26 U.S.C. 415, 401(a)(17), 402(g)); or
    (ii) Primarily for the purpose for providing supplemental retirement
benefits or other deferred compensation for a select group of directors,
management or highly compensated employees (excluding severance
payments).
    EESA. The term ``EESA'' means the Emergency Economic Stabilization
Act of 2008, as amended.
    Employee. The term ``employee'' means an individual serving as a
servant in the conventional master-servant relationship as understood by
the common-law agency doctrine. In general, a partner of a partnership,
a member of a limited liability company, or other similar owner in a
similar type of entity, will not be treated as an employee for this
purpose. However, to the extent that the primary purpose for the
creation or utilization of such partnership, limited liability company,
or other similar type of entity is to avoid or evade any or all of the
requirements

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of section 111 of EESA or these regulations with respect to a partner,
member or other similar owner, the partner, member or other similar
owner will be treated as an employee. In addition, a personal service
corporation or similar intermediary between the TARP recipient and an
individual providing services to the TARP recipient will be disregarded
for purposes of determining whether such individual is an employee of
the TARP recipient.
    Employee compensation plan. The term ``employee compensation plan''
means ``plan'' as that term is defined in Item 402(a)(6)(ii) of
Regulation S-K under the Federal securities laws (17 CFR
229.402(a)(6)(ii)), but only any employee compensation plan in which two
or more employees participate and without regard to whether an executive
officer participates in the employee compensation plan.
    Exceptional financial assistance. The term ``exceptional financial
assistance'' means any financial assistance provided under the Programs
for Systemically Significant Failing Institutions, the Targeted
Investment Program, the Automotive Industry Financing Program, and any
new program designated by the Secretary as providing exceptional
financial assistance.
    Excessive or luxury expenditures. The term ``excessive or luxury
expenditures'' means excessive expenditures on any of the following to
the extent such expenditures are not reasonable expenditures for staff
development, reasonable performance incentives, or other similar
reasonable measures conducted in the normal course of the TARP
recipient's business operations:
    (1) Entertainment or events;
    (2) Office and facility renovations;
    (3) Aviation or other transportation services; and
    (4) Other similar items, activities, or events for which the TARP
recipient may reasonably anticipate incurring expenses, or reimbursing
an employee for incurring expenses.
    Excessive or luxury expenditures policy. The term ``excessive or
luxury expenditures policy'' means written standards applicable to the
TARP recipient and its employees that address the four categories of
expenses set forth in the definition of ``excessive or luxury
expenditures'' (entertainment or events, office and facility
renovations, aviation or other transportation services, and other
similar items, activities or events), and that are reasonably designed
to eliminate excessive and luxury expenditures. Such written standards
must:
    (1) Identify the types or categories of expenditures which are
prohibited (which may include a threshold expenditure amount per item,
activity, or event or a threshold expenditure amount per employee
receiving the item or participating in the activity or event);
    (2) Identify the types or categories of expenditures for which prior
approval is required (which may include a threshold expenditure amount
per item, activity, or event or a threshold expenditure amount per
employee receiving the item or participating in the activity or event);
    (3) Provide reasonable approval procedures under which an
expenditure requiring prior approval may be approved;
    (4) Require PEO and PFO certification that the approval of any
expenditure requiring the prior approval of any SEO, any executive
officer of a substantially similar level of responsibility, or the TARP
recipient's board of directors (or a committee of such board of
directors), was properly obtained with respect to each such expenditure;
    (5) Require the prompt internal reporting of violations to an
appropriate person or persons identified in this policy; and
    (6) Mandate accountability for adherence to this policy.
    Executive officer. The term ``executive officer'' means an
``executive officer'' as that term is defined in Rule 3b-7 of the
Securities Exchange Act of 1934 (Exchange Act) (17 CFR 240.3b-7).
    Financial assistance. (1) Definition. The term ``financial
assistance'' means any funds or fund commitment provided through the
purchase of troubled assets under the authority granted to Treasury
under section 101 of EESA or the insurance of troubled assets under the
authority granted to Treasury under section 102 of EESA, provided that
the term ``financial assistance''

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does not include any loan modification under sections 101 and 109 of
EESA. A change in the form of previously received financial assistance,
such as a conversion of convertible preferred stock to common stock, is
not treated as new or additional financial assistance.
    (2) Examples. The following examples illustrate the provisions of
paragraph (1) of this definition:

    Example 1. Company A sells $500,000,000 of preferred stock to
Treasury through the Capital Purchase Program. Company A has received
financial assistance.
    Example 2. Company B posts collateral to and receives a loan from
the Federal Reserve special purpose vehicle under the Term Asset-Backed
Security Loan Facility program. Company B has neither sold troubled
assets to Treasury, nor insured troubled assets through Treasury, and
therefore has not received financial assistance.
    Example 3. LP C is a limited partnership established for the purpose
of participating in the Public Private Investment Program. LP C has a
general partner (GP) that makes management decisions on behalf of LP C.
A limited liability company controlled by an affiliate of GP (LLC
partner) raises $55,000,000 from twenty investors, with each investing
equal shares, joins LP C as a limited partner, and invests those funds
for a 55% equity interest in LP C. LP C sells a $45,000,000 equity
interest to Treasury. LP C, at the direction of the GP, will buy and
sell securities as investments and manage those investments. LP C will
contract for investment advice from an investment advisor that is an
affiliate of GP. LP C has received financial assistance. LLC partner has
received financial assistance because it is treated as the same employer
as LP C according to the standards set forth in paragraph (1)(ii) of the
definition of ``TARP recipient''. The investors in the LLC partner have
not received financial assistance because they are not treated as the
same employer as LP C according to the standards set forth in paragraph
(1)(ii) of the definition of ``TARP recipient''. GP is not an employee
of LP C pursuant to the definition of ``employee'' in this rule, and is
not treated as the same employer as LP C according to the standards set
forth in paragraph (1)(ii) of the definition of ``TARP recipient''. The
investment advisor-contractor to LP C has not received financial
assistance. Entities that sell securities to or buy securities from LP C
have neither sold troubled assets to Treasury nor insured troubled
assets through Treasury, and therefore have not received financial
assistance.
    Example 4. Company D, a servicer of mortgage loans or mortgaged-
backed securities, issues a financial instrument to Treasury's financial
agent in which Company D commits to modify mortgages it is servicing
consistent with guidelines established by Treasury under the Home
Affordable Modification Program. Treasury, through its financial agent,
commits to pay up to $800,000,000 in incentive payments and credit
enhancements for Company E's commitment to modify mortgages. Company E
has not received financial assistance.

    GAAP. The term ``GAAP'' means U.S. generally accepted accounting
principles.
    Golden parachute payment. (1) General rule. The term ``golden
parachute payment'' means any payment for the departure from a TARP
recipient for any reason, or any payment due to a change in control of
the TARP recipient or any entity that is included in a group of entities
treated as one TARP recipient, except for payments for services
performed or benefits accrued. For this purpose, a change in control
includes any event that would qualify as a change in control event as
defined in 26 CFR 1.280G-1, Q&A-27 through Q&A-29 or as a change in
control event as defined in 26 CFR 1.409A-3(i)(5)(i). For this purpose,
a golden parachute payment includes the acceleration of vesting due to
the departure or the change in control event, as applicable. A golden
parachute payment is treated as paid at the time of departure or change
in control event, and is equal to the aggregate present value of all
payments made for a departure or a change in control event (including
the entire aggregate present value of the payment if the vesting period
was not otherwise completed but was accelerated due to departure,
regardless of whatever portion of the required vesting period the
employee had completed). Thus, a golden parachute payment may include a
right to amounts actually payable after the TARP period.
    (2) Exclusions. For purposes of this part, a golden parachute
payment does not include any of the following:
    (i) Any payment made pursuant to a pension or retirement plan which
is qualified (or is intended within a reasonable period of time to be
qualified) under section 401 of the Internal Revenue Code (26 U.S.C.
401) or pursuant to a pension or other retirement plan which is governed
by the laws of any foreign country;

[[Page 328]]

    (ii) Any payment made by reason of the departure of the employee due
to the employee's death or disability; or
    (iii) Any severance or similar payment which is required to be made
pursuant to a State statute or foreign law (independent of any terms of
a contract or other agreement) which is applicable to all employers
within the appropriate jurisdiction (with the exception of employers
that may be exempt due to their small number of employees or other
similar criteria).
    (3) Payments for services performed or benefits accrued. (i) General
rules. Except as otherwise provided for payments made under a deferred
compensation plan or a benefit plan in paragraph (4) of this definition,
a payment made, or a right to a payment arising under a plan, contract,
agreement, or other arrangement (including the acceleration of any
vesting conditions) is for services performed or benefits accrued only
if the payment was made, or the right to the payment arose, for current
or prior services to the TARP recipient (except that an appropriate
allowance may be made for services for a predecessor employer). Whether
a payment is for services performed or benefits accrued is determined
based on all the facts and circumstances. However, a payment, or a right
to a payment, generally will be treated as a payment for services
performed or benefits accrued only if the payment would be made
regardless of whether the employee departs or the change in control
event occurs, or if the payment is due upon the departure of the
employee, regardless of whether the departure is voluntary or
involuntary (other than reasonable restrictions, such as the forfeiture
of the right to a payment for an involuntary departure for cause, but
not restrictions relating to whether the departure was a voluntary
departure for good reason or subsequent to a change in control).
    (ii) Examples. The following examples illustrate the general rules
in paragraph (3)(i) of this definition:

    Example 1. Employee A is a SEO of Entity B at all relevant times. On
September 1, 2007, Employee A received a stock appreciation right
granting him the right to appreciation on the underlying shares that
would vest 25% for every twelve months of continued services. Under the
terms of the grant, the stock appreciation right would be immediately
exercised and payable upon termination of employment. Entity B becomes a
TARP recipient in December 2008. On September 1, 2009, Entity B
involuntarily terminates Employee A, at which time Employee A receives a
payment equal to the post-September 1, 2007 appreciation on 50% of the
shares under the stock appreciation right (the portion of the shares
that had vested before the termination of employment). The payment is
treated as a payment for services performed and does not constitute a
golden parachute payment.
    Example 2. The facts are the same as the facts in Example 1, except
that under Employee A's employment agreement, Employee A is entitled to
accelerate vesting if Employee A is terminated involuntarily other than
for cause. If Entity B pays Employee A the post-September 1, 2007
appreciation on 100% of the shares under the stock appreciation right,
the portion of the payment representing the additional 50% accelerated
vesting due to the termination of employment would not be for services
performed and would be a golden parachute payment.

    (4) Payments from benefit plans and deferred compensation plans. A
payment from a benefit plan or a deferred compensation plan is treated
as a payment for services performed or benefits accrued only if the
following conditions are met:
    (i) The plan was in effect at least one year prior to the employee's
departure;
    (ii) The payment is made pursuant to the plan and is made in
accordance with the terms of the plan as in effect no later than one
year before the departure and in accordance with any amendments to the
plan during this one year period that do not increase the benefits
payable hereunder;
    (iii) The employee has a vested right, as defined under the
applicable plan document, at the time of the departure or the change in
control event (but not due to the departure or the change in control
event) to the payments under the plan;
    (iv) Benefits under the plan are accrued each period only for
current or prior service rendered to the TARP recipient (except that an
appropriate allowance may be made for service for a predecessor
employer);

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    (v) Any payment made pursuant to the plan is not based on any
discretionary acceleration of vesting or accrual of benefits which
occurs at any time later than one year before the departure or the
change in control event; and
    (vi) With respect to payments under a deferred compensation plan,
the TARP recipient has previously recognized compensation expense and
accrued a liability for the benefit payments according to GAAP or
segregated or otherwise set aside assets in a trust which may only be
used to pay plan benefits, except that the assets of this trust may be
available to satisfy claims of the TARP recipient's creditors in the
case of insolvency and payments pursuant to the plan are not in excess
of the accrued liability computed in accordance with GAAP.
    Gross-up. The term ``gross-up'' means any reimbursement of taxes
owed with respect to any compensation, provided that a gross-up does not
include a payment under a tax equalization agreement, which is an
agreement, method, program, or other arrangement that provides payments
intended to compensate an employee for some or all of the excess of the
taxes actually imposed by a foreign jurisdiction on the compensation
paid by the TARP recipient to the employee over the taxes that would be
imposed if the compensation were subject solely to U.S. Federal, State,
and local income tax, or some or all of the excess of the U.S. Federal,
State, and local income tax actually imposed on the compensation paid by
the TARP recipient to the employee over the taxes that would be imposed
if the compensation were subject solely to taxes in the applicable
foreign jurisdiction, provided that the payment made under such
agreement, method, program, or other arrangement may not exceed such
excess and the amount necessary to compensate for the additional taxes
on the amount paid under the agreement, method, program, or other
arrangement.
    Incentive compensation. The term ``incentive compensation'' means
compensation provided under an incentive plan.
    Incentive plan. (1) Definition. The term ``incentive plan'' means an
``incentive plan'' as that term is defined in Item 402(a)(6)(iii) of
Regulation S-K under the Federal securities laws (17 CFR
229.402(a)(6)(iii)), and any plan providing stock or options as defined
in Item 402(a)(6)(i) of Regulation S-K under the Federal securities laws
(17 CFR 229.402(a)(6)(i)) or other equity-based compensation such as
restricted stock units or stock appreciation rights, except for the
payment of salary or other permissible payments in stock, stock units,
or other property as described in paragraph (2) of this definition. An
incentive plan does not include the payment of salary, but does include
an arrangement under which an employee would earn compensation in the
nature of a commission, unless such compensation qualifies as commission
compensation (as defined above). Accordingly, an incentive plan includes
an arrangement under which an employee receives compensation only upon
the completion of a specified transaction, such as an initial public
offering or sale or acquisition of a specified entity or entities,
regardless of how such compensation is measured. For examples, see the
definition of ``commission compensation,'' above. An incentive plan, or
a grant under an incentive plan, may also qualify as a bonus or a
retention award.
    (2) Salary or other permissible payments paid in property. The term
``incentive plan'' does not include an arrangement under which an
employee receives salary or another permissible payment in property,
such as TARP recipient stock, provided that such property is not subject
to a substantial risk of forfeiture (as defined in 26 CFR 1.83-3(c)) or
other future period of required services, the amount of the payment is
determinable as a dollar amount through the date such compensation is
earned (for example, an agreement that salary payments will be made in
stock equal to the value of the cash payment that would otherwise be
due), and the amount of stock or other property accrues at the same time
or times as the salary or other permissible payments would otherwise be
paid in cash. The term ``incentive plan'' also does not include an
arrangement under which an employee receives a restricted stock

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unit that is analogous to TARP recipient stock, that otherwise meets the
requirements of the previous sentence. For this purpose, a unit is
analogous to stock if the unit is based upon stock of the TARP
recipient, or is applied as if the applicable entity, division, or other
unit were a corporation with one class of stock and the number of units
of stock granted is determined based on a fixed percentage of the
overall value of this corporation, and the term ``TARP recipient stock''
with respect to a particular employee recipient means the stock of a
corporation (or the entity, division, or other unit the value of which
forms the basis for the unit) that is an ``eligible issuer of service
recipient stock'' under 26 CFR 1.409A-1(b)(5)(iii)(E) (applied by
analogy to non-corporate entities).
    (3) Examples. The following examples illustrate the provisions of
paragraph (2) of this definition.

    Example 1. Employee is an employee of TARP recipient. For 2010, TARP
recipient agrees to pay a salary of $15,000, payable monthly. At each
salary payment date Employee will receive a $10,000 payment in cash, and
be transferred a number of shares of common stock of TARP recipient
equal to $5,000 divided by the fair market value of a share of common
stock on the salary payment date. The arrangement is for the payment of
salary, and is not an incentive plan.
    Example 2. Same facts as Example 1, except that pursuant to a valid
elective deferral election, Employee elects to defer 20% of each salary
payment into a nonqualified deferred compensation plan. At each salary
payment date Employee will receive an $8,000 payment in cash, be
transferred a number of shares of common stock of TARP recipient equal
to $4,000 divided by the fair market value of a share of common stock on
the salary payment date, and a $3,000 contribution to an account under a
nonqualified deferred compensation plan. The arrangement is for the
payment of salary, and is not an incentive plan.
    Example 3. Employee is an employee of TARP recipient. For 2010, TARP
recipient agrees to pay a salary of $15,000, payable monthly. At each
salary payment date, Employee will receive a $10,000 payment in cash,
and accrue a right to a number of shares of common stock of TARP
recipient equal to $5,000 divided by the fair market value of a share of
common stock on the salary payment date. At the end of the year, TARP
recipient will transfer the total number of accrued shares to Employee,
subject to a multi-year holding period (a restriction that the shares
may not be transferred or otherwise disposed of by Employee for a
specified number of years). If Employee's employment with the TARP
recipient terminates during the holding period, the termination will not
affect the duration or application of the holding period or Employee's
right to retain the shares and to transfer or otherwise dispose of them
at the end of the holding period. The arrangement is for the payment of
salary, and is not an incentive plan. The arrangement would also be for
the payment of salary, and not an incentive plan, if the arrangement
provided that the holding period was to last until the later of a
specified time period or a specified time following Employee's
retirement or other termination of employment.
    Example 4. Employee is an employee of TARP recipient. For 2010, TARP
recipient agrees to pay a salary of $15,000, payable monthly. At each
salary payment date, Employee will receive a $10,000 payment in cash,
and accrue a right to a contribution to an account equal to $5,000
divided by the fair market value of a share on the salary payment date.
The account balance will be subject to notional gains and losses based
on the investment return on TARP recipient common stock. The amount will
be payable upon the last day of the second year immediately following
the year the services are performed. The arrangement is for the payment
of salary, and is not an incentive plan. However, the arrangement
generally will provide deferred compensation for purposes of section
409A of the Internal Revenue Code.

    Internal Revenue Code. The term ``Internal Revenue Code'' means the
Internal Revenue Code of 1986, as amended.
    Long-term restricted stock. The term ``long-term restricted stock''
means restricted stock or restricted stock units that include the
following features:
    (1) The restricted stock or restricted stock units are issued with
respect to common stock of the TARP recipient. For this purpose, a
restricted stock unit includes a unit that is payable, or may be
payable, in cash or stock, provided that the value of the payment is
equal to the value of the underlying stock. With respect to a specified
division or other unit within a TARP recipient or a TARP recipient that
is not a stock corporation, a unit analogous to common stock may be
used. For this purpose, a unit is analogous to common stock if applied
as if the entity, division, or other unit were a corporation with one
class of common stock and the number of units of common stock granted is
determined based on a

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fixed percentage of the overall value of this corporation.
Notwithstanding the foregoing, with respect to a particular employee
recipient, the corporation the stock of which is utilized (or the
entity, division, or other unit the value of which forms the basis for
the unit) must be an ``eligible issuer of service recipient stock''
under 26 CFR 1.409A-1(b)(5)(iii)(E) (applied by analogy to non-corporate
entities).
    (2) The restricted stock or restricted stock unit may not become
transferable (as defined in 26 CFR 1.83-3(d)), or payable as applied to
a restricted stock unit, at any time earlier than permitted under the
following schedule (except as necessary to reflect a merger or
acquisition of the TARP recipient):
    (i) 25% of the shares or units granted at the time of repayment of
25% of the aggregate financial assistance received.
    (ii) An additional 25% of the shares or units granted (for an
aggregate total of 50% of the shares or units granted) at the time of
repayment of 50% of the aggregate financial assistance received.
    (iii) An additional 25% of the shares or units granted (for an
aggregate total of 75% of the shares or units granted) at the time of
repayment of 75% of the aggregate financial assistance received.
    (iv) The remainder of the shares or units granted at the time of
repayment of 100% of the aggregate financial assistance received.
    (3) Notwithstanding the foregoing, in the case of restricted stock
for which the employee does not make an election under section 83(b) of
the Internal Revenue Code (26 U.S.C. 83(b)), at any time beginning with
the date upon which the stock becomes substantially vested (as defined
in 26 CFR 1.83-3(b)) and ending on December 31 of the calendar year
including that date, a portion of the restricted stock may be made
transferable as may reasonably be required to pay the Federal, State,
local, or foreign taxes that are anticipated to apply to the income
recognized due to this vesting, and the amounts made transferable for
this purpose shall not count toward the percentages in the schedule
above.
    (4) The employee must be required to forfeit the restricted stock or
restricted stock unit if the employee does not continue performing
substantial services for the TARP recipient for at least two years from
the date of grant, other than due to the employee's death or disability,
or a change in control event (as defined in 26 CFR 1.280G-1, Q&A-27
through Q&A-29 or as defined in 26 CFR 1.409A-3(i)(5)(i)) with respect
to the TARP recipient before the second anniversary of the date of
grant.
    (5) Nothing in paragraphs (1), (2), (3), and (4) of this definition
is intended to prevent the placement on such restricted stock or
restricted stock unit of any additional restrictions, conditions, or
limitations that are not inconsistent with the requirements of these
paragraphs.
    Most highly compensated employee. (1) In general. The terms ``most
highly compensated employee'' or ``most highly compensated employees''
mean the employee or employees of the TARP recipient whose annual
compensation is determined to be the highest among all employees of the
TARP recipient, provided that, solely for purposes of identifying the
employees who are subject to any rule applicable to both the SEOs and
one or more of the most highly compensated employees of the TARP
recipient, SEOs of the TARP recipient are excluded when identifying the
most highly compensated employee(s). For this purpose, a former employee
who is no longer employed as of the first date of the relevant fiscal
year of the TARP recipient is not a most highly compensated employee
unless it is reasonably anticipated that such employee will return to
employment with the TARP recipient during such fiscal year.
    (2) Application to new entities. For an entity that is created or
organized in the same year that the entity becomes a TARP recipient, a
most highly compensated employee for the first year includes the person
that the TARP recipient determines will be the most highly compensated
employee for the next year based upon a reasonable, good faith
determination of the projected annual compensation of such person earned
during that year. This

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determination must be made as of the later of the date the entity is
created or organized or the date the entity becomes a TARP recipient,
and must be made only once. However, a person need not yet be an
employee to be treated as a most highly compensated employee, if it is
reasonably anticipated that the person will become an employee of the
TARP recipient during the first year.
    Obligation. (1) Definition. The term ``obligation'' means a
requirement for, or an ability of, a TARP recipient to repay financial
assistance received from Treasury, as provided in the terms of the
applicable financial instrument and related agreements, through the
repayment of a debt obligation or the redemption or repurchase of an
equity security, but not including warrants to purchase common stock of
the TARP recipient.
    (2) Examples. The following examples illustrate the provisions of
paragraph (1) of this definition.

    Example 1. TARP recipient sells $500 million of preferred stock to
Treasury, and provides warrants to Treasury for the purchase of $75
million of common stock. The TARP recipient has an ability to redeem the
preferred stock and thus maintains an outstanding obligation to
Treasury.
    Example 2. Same facts as Example 1, except that TARP recipient
redeems the $500 million of preferred stock, so that Treasury holds only
the $75 million of warrants to purchase common stock outstanding. TARP
recipient does not maintain an outstanding obligation to Treasury.
    Example 3. TARP recipient sells $120 million of securities backed by
Small Business Administration-guaranteed loans to Treasury through the
Consumer and Business Lending initiative, and provides warrants to
Treasury for the purchase of $10 million of common stock. Because the
TARP recipient does not as a result of this transaction owe a debt
obligation or have a requirement or right to redeem or repurchase an
equity security (other than the warrants to purchase common stock
provided to the Treasury), the TARP recipient does not have an
outstanding obligation to Treasury as a result of this transaction.

    PEO. The term ``PEO'' means the principal executive officer or an
employee acting in a similar capacity.
    Perquisite. The term ``perquisite'' means a ``perquisite or other
personal benefit'' the amount of which is required to be included in the
amount reported under Item 402(c)(2)(ix)(A) of Regulation S-K under the
Federal securities laws (17 CFR 229.402(c)(2)(ix)(A)) (Column (i) of the
Summary Compensation Table (All Other Compensation)), modified to also
include any such perquisite or other personal benefit provided to a most
highly compensated employee subject to Sec. 30.11(b) (Q-11).
    PFO. The term ``PFO'' means the principal financial officer or an
employee acting in a similar capacity.
    Primary regulatory agency. The term ``primary regulatory agency''
means the Federal regulatory agency that has primary supervisory
authority over the TARP recipient. For a TARP recipient that is a State-
chartered bank that does not have securities registered with the SEC
pursuant to the Federal securities laws, the primary regulatory agency
is the TARP recipient's primary Federal banking regulator. If a TARP
recipient is not subject to the supervision of a Federal regulatory
agency, the term ``primary regulatory agency'' means the Treasury.
    Repayment. The term ``repayment'' means satisfaction of an
obligation.
    Retention award. (1) General definition. The term ``retention
award'' means any payment to an employee, other than a payment of
commission compensation, a payment made pursuant to a pension or
retirement plan which is qualified (or is intended within a reasonable
period of time to be qualified) under section 401 of the Internal
Revenue Code (26 U.S.C. 401), a payment made pursuant to a benefit plan,
or a payment of a fringe benefit, overtime pay, or reasonable expense
reimbursement that:
    (i) Is not payable periodically to an employee for services
performed by the employee at a regular hourly, daily, weekly, monthly,
or similar periodic rate (or would not be payable in such manner absent
an elective deferral election);
    (ii) Is contingent on the completion of a period of future service
with the TARP recipient or the completion of a specific project or other
activity of the TARP recipient; and

[[Page 333]]

    (iii) Is not based on the performance of the employee (other than a
requirement that the employee not be separated from employment for
cause) or the business activities or value of the TARP recipient.
    (2) New hires. With respect to newly hired employees, a payment that
will be made only if the new hire continues providing services for a
specified period generally constitutes a retention award. For example, a
signing bonus that must be repaid unless the newly hired employee
completes a certain period of service is a retention award. Similarly, a
``make-whole'' agreement under which a newly hired employee is provided
benefits intended to make up for benefits foregone at his former
employer, where these new benefits are subject to a continued service
period vesting requirement (such as a continuation of the vesting period
at the former employer), is a retention award.
    (3) Deferred compensation plans. Whether a benefit under a deferred
compensation plan that is subject to a service vesting period is a
retention award depends on all the facts and circumstances. However, to
the extent an employee continues to accrue, or becomes eligible to
accrue, a benefit under a plan the benefits under which have not been
materially enhanced for a significant period of time prior to the
employee becoming an SEO or most highly compensated employee (including
through expansion of the eligibility for such plan), the benefits
accrued generally will not be a retention award. However, to the extent
the plan is amended to materially enhance the benefits provided under
the plan or to make such employee eligible to participate in such plan,
and such benefits are subject to a requirement of a continued period of
service, such an amendment generally will be a retention award.
    SEC. The term ``SEC'' means the U.S. Securities and Exchange
Commission.
    Senior executive officer or SEO. (1) General definition. The term
``senior executive officer'' or ``SEO'' means a ``named executive
officer'' as that term is determined pursuant to Instruction 1 to Item
402(a)(3) of Regulation S-K under the Federal securities laws (17 CFR
229.402(a)) who is an employee of the TARP recipient.
    (2) Application to smaller reporting company. A TARP recipient that
is a smaller reporting company must identify SEOs pursuant to paragraph
(1) of this definition. Such a TARP recipient must identify at least
five SEOs, even if only three named executive officers are provided in
the disclosure pursuant to Item 402(m)(2) of Regulation S-K under the
Federal securities laws (17 CFR 229.402(m)(2)), provided that no
employee must be identified as a SEO if the employee's total annual
compensation does not exceed $100,000 as defined in Item 402(a)(3)(1) of
Regulation S-K under the Federal securities laws (17 CFR
229.402(a)(3)(1)).
    (3) Application to private TARP recipients. A TARP recipient that
does not have securities registered with the SEC pursuant to the Federal
securities laws must identify SEOs in accordance with rules analogous to
the rules in paragraph (1) of this definition.
    SEO compensation plan. The term ``SEO compensation plan'' means
``plan'' as that term is defined in Item 402(a)(6)(ii) of Regulation S-K
under the Federal securities laws (17 CFR 229.402(a)(6)(ii)), but only
with regard to a SEO compensation plan in which a SEO participates.
    Senior risk officer. The term ``senior risk officer'' means a senior
risk executive officer or employee acting in a similar capacity.
    Smaller reporting company. The term ``smaller reporting company''
means a ``smaller reporting company'' as that term is defined in Item
10(f) of Regulation S-K under the Federal securities laws (17 CFR
229.10(f)).
    Sunset date. The term ``sunset date'' means the date on which the
authorities provided under EESA section 101 and 102 terminate, pursuant
to EESA section 120, taking into account any extensions pursuant to EESA
section 120(b).
    TARP. The term ``TARP'' means the Troubled Asset Relief Program,
established pursuant to EESA.
    TARP fiscal year. The term ``TARP fiscal year'' means a fiscal year
of a TARP recipient, or the portion of a fiscal year of a TARP
recipient, that is also a TARP period.
    TARP period. The term ``TARP period'' means the period beginning
with

[[Page 334]]

the TARP recipient's receipt of any financial assistance and ending on
the last date upon which any obligation arising from financial
assistance remains outstanding (disregarding any warrants to purchase
common stock of the TARP recipient that the Treasury may hold).
    TARP recipient. (1) General definition. The term ``TARP recipient''
means
    (i) Any entity that has received or holds a commitment to receive
financial assistance; and
    (ii) Any entity that would be treated as the same employer as an
entity receiving financial assistance based on the rules in sections
414(b) and 414(c) of the Internal Revenue Code (26 U.S.C. 414(b) or
(c)), but modified by substituting ``50%'' for ``80%'' in each place it
appears in section 414(b) or 414(c) and the accompanying regulations.
However, for purposes of applying the aggregation rules to determine the
applicable employer, the rules for brother-sister controlled groups and
combined groups are disregarded (including disregarding the rules in
section 1563(a)(2) and (a)(3) of the Internal Revenue Code (26 U.S.C.
1563(a)(2) and (a)(3)) with respect to corporations and the parallel
rules that are in 26 CFR 1.414(c)-2(c) with respect to other
organizations conducting trades or businesses).
    (2) Certain excluded entities. Neither any entity receiving funds
under TARP pursuant to section 109 of EESA nor any Federal Reserve bank
as that term is used in the Federal Reserve Act (12 U.S.C. 221 et seq.)
will be treated as a TARP recipient subject to section 111 of EESA and
any rules and regulations promulgated thereunder.
    (3) Anti-abuse rule. Notwithstanding paragraph (1) of this
definition, the term ``TARP recipient'' means any entity that has
received, or holds a commitment to receive, financial assistance; and
any entity related to such TARP recipient to the extent that the primary
purpose for the creation or utilization of such entity is to avoid or
evade any or all of the requirements of section 111 of EESA or these
regulations.
    Treasury. The term ``Treasury'' means the U.S. Department of the
Treasury.
    Valid employment contract. The term ``valid employment contract''
means a written employment contract that is:
    (1)(i) A material contract as determined pursuant to Item
601(b)(10)(iii)(A) of Regulation S-K under the Federal securities laws
(17 CFR 229.601(b)(10)(iii)(A)); or
    (ii) A contract that would be deemed a material contract as
determined pursuant to Item 601(b)(10)(iii) of Regulation S-K under the
Federal securities laws (17 CFR 229.601(b)(10)(iii)), but for the fact
that the material contract relates to one or more employee who is not an
executive officer; and
    (2) Is enforceable under the law of the applicable jurisdiction.

[74 FR 28405, June 15, 2009, as amended at 74 FR 63992, Dec. 7, 2009]



Sec. 30.2  Q-2: To what entities does this part apply?

    This part applies to any TARP recipient, provided that the
requirements of sections 111(b) (portions of Sec. 30.4 (Q-4), Sec.
30.5 (Q-5) and Sec. 30.7 (Q-7), as applicable, Sec. 30.6 (Q-6), and
Sec. 30.8 (Q-8) through Sec. 30.11 (Q-11), and Sec. 30.15 (Q-15)),
and section 111(e) (Sec. 30.13 (Q-13)) apply only during the period
during which any obligation to the Federal government arising from
financial assistance provided under the TARP remains outstanding. For a
TARP recipient that has had an obligation to the Federal government
arising from financial assistance provided under the TARP, and no
further financial assistance under the TARP, the requirements of section
111(c) (including portions of Sec. 30.4 (Q-4), Sec. 30.5 (Q-5) and
Sec. 30.7 (Q-7), as applicable) and section 111(d) (Sec. 30.12 (Q-12))
apply through the last day of the period during which that obligation
remains outstanding; for a TARP recipient that has never had an
obligation to the Federal government arising from financial assistance
provided under the TARP, the requirements of section 111(c) (including
portions of Sec. 30.4 (Q-4), Sec. 30.5 (Q-5) and Sec. 30.7 (Q-7), as
applicable) and section 111(d) (Sec. 30.12 (Q-12)) apply through the
last day of the TARP recipient's fiscal year including the sunset date.
For this purpose, an obligation includes the ownership by

[[Page 335]]

the Federal government of common stock of a TARP recipient.

[74 FR 28405, June 15, 2009, as amended at 74 FR 63992, Dec. 7, 2009]



Sec. 30.3  Q-3: How are the SEOs and most highly compensated employees
identified for purposes of compliance with this part?

    (a) Identification. The SEOs for a year are the ``named executive
officers'' who are employees and are identified in the TARP recipient's
annual report on Form 10-K or annual meeting proxy statement for that
year (reporting the SEOs' compensation for the immediately preceding
year). These employees are considered the SEOs throughout that entire
year. For purposes of the standards in this part applicable to the most
highly compensated employees, the determination of whether an employee
is a most highly compensated employee in a current fiscal year looks
back to the annual compensation for the last completed fiscal year
without regard to whether the compensation is includible in the
employee's gross income for Federal income tax purposes.
    (b) Compliance. Regardless of when during the current fiscal year
the TARP recipient determines the SEOs or the most highly compensated
employees, the TARP recipient must ensure that any of the SEOs or
employees potentially subject to the requirements in this part for the
current fiscal year complies with the requirements in this part as
applicable.



Sec. 30.4  Q-4: What actions are necessary for a TARP recipient to
comply with the standards established under sections 111(b)(3)(A),

111(b)(3)(E), 111(b)(3)(F) and 111(c) of EESA (evaluation of employee
plans and potential to encourage excessive risk or manipulation of
earnings)?

    (a) General rule. To comply with the standards established under
sections 111(b)(3)(A), 111(b)(3)(E), 111(b)(3)(F) and 111(c) of EESA, a
TARP recipient must establish a compensation committee by the later of
ninety days after the closing date of the agreement between the TARP
recipient and Treasury or September 14, 2009, and maintain a
compensation committee during the remainder of the TARP period. If a
compensation committee is already established before the later of the
closing date or September 14, 2009, the TARP recipient must maintain its
compensation committee. During the remainder of the TARP period after
the later of ninety days after the closing date of the agreement between
the TARP recipient and Treasury or September 14, 2009, the compensation
committee must:
    (1) Discuss, evaluate, and review at least every six months with the
TARP recipient's senior risk officers the SEO compensation plans to
ensure that the SEO compensation plans do not encourage SEOs to take
unnecessary and excessive risks that threaten the value of the TARP
recipient;
    (2) Discuss, evaluate, and review with senior risk officers at least
every six months employee compensation plans in light of the risks posed
to the TARP recipient by such plans and how to limit such risks;
    (3) Discuss, evaluate, and review at least every six months the
employee compensation plans of the TARP recipient to ensure that these
plans do not encourage the manipulation of reported earnings of the TARP
recipient to enhance the compensation of any of the TARP recipient's
employees;
    (4) At least once per TARP recipient fiscal year, provide a
narrative description of how the SEO compensation plans do not encourage
the SEOs to take unnecessary and excessive risks that threaten the value
of the TARP recipient, including how these SEO compensation plans do not
encourage behavior focused on short-term results rather than long-term
value creation, the risks posed by employee compensation plans and how
these risks were limited, including how these employee compensation
plans do not encourage behavior focused on short-term results rather
than long-term value creation, and how the TARP recipient has ensured
that the employee compensation plans do not encourage the manipulation
of reported earnings of the TARP recipient to enhance the compensation
of any of the TARP recipient's employees; and
    (5) Certify the completion of the reviews of the SEO compensation
plans

[[Page 336]]

and employee compensation plans required under paragraphs (a)(1), (2),
and (3) of this section.
    (b) Exclusion of TARP recipients with no employees or no affected
employees. For any period during which a TARP recipient has no
employees, or has no SEO or compensation plan subject to the review
process, the TARP recipient is not subject to the requirements of
paragraph (a) of this section.
    (c) Application to private TARP recipients. The rules provided in
paragraph (a) of this section are also applicable to TARP recipients
that do not have securities registered with the SEC pursuant to the
Federal securities laws. A TARP recipient that does not have securities
registered with the SEC pursuant to the Federal securities laws and has
received $25,000,000 or less in financial assistance is subject to
paragraph (a) of this section, except that, in lieu of establishing and
maintaining a compensation committee, such a TARP recipient is permitted
to ensure that all the members of the board of directors carry out the
duties of the compensation committee as described in paragraph (a) of
this section. However, such a TARP recipient will be required to
establish and maintain a compensation committee satisfying the
requirements of paragraph (a) of this section for the first fiscal year
following a fiscal year during which the TARP recipient either registers
securities with the SEC pursuant to the Federal securities laws or has
received more than $25,000,000 in financial assistance, and during
subsequent years of the TARP period.
    (d) Application to TARP recipients that have never had an
outstanding obligation. For TARP recipients that have never had an
outstanding obligation, only paragraphs (a)(2), (a)(4), (a)(5) (but for
the narrative and certification requirements of (a)(4) and (a)(5),
applied only to the requirements of paragraph (a)(2)), (b) and (c) of
this Sec. 30.4 (Q-4) shall apply.



Sec. 30.5  Q-5: How does a TARP recipient comply with the requirements
under Sec. 30.4 (Q-4) of this part that the compensation committee

discuss, evaluate, and review the SEO compensation plans and employee
compensation plans to ensure that the SEO compensation plans do not
encourage the SEOs to take unnecessary and excessive risks that threaten
the value of the TARP recipient, or that the employee compensation plans
do not pose unnecessary risks to the TARP recipient?

    At least every six months, the compensation committee must discuss,
evaluate, and review with the TARP recipient's senior risk officers any
risks (including long-term as well as short-term risks) that the TARP
recipient faces that could threaten the value of the TARP recipient. The
compensation committee must identify the features in the TARP
recipient's SEO compensation plans that could lead SEOs to take these
risks and the features in the employee compensation plans that pose
risks to the TARP recipient, including any features in the SEO
compensation plans and the employee compensation plans that would
encourage behavior focused on short-term results and not on long-term
value creation. The compensation committed is required to limit these
features to ensure that the SEOs are not encouraged to take risks that
are unnecessary or excessive and that the TARP recipient is not
unnecessarily exposed to risks.



Sec. 30.6  Q-6: How does a TARP recipient comply with the requirement
under Sec. 30.4 (Q-4) of this part that the compensation committee

discuss, evaluate,and review the employee compensation plans to ensure
that these plans do not encourage the manipulation of reported earnings
of the TARP recipient to enhance the compensation of any of the TARP
recipient's employees?

    The compensation committee must discuss, evaluate, and review at
least every six months the terms of each employee compensation plan and
identify and eliminate the features in these plans that could encourage
the manipulation of reported earnings of the TARP recipient to enhance
the compensation of any employee.

[[Page 337]]



Sec. 30.7  Q-7: How does a TARP recipient comply with the certification
and disclosure requirements under Sec. 30.4 (Q-4) of this part?

    (a) Certification. The compensation committee must provide the
certifications required by Sec. 30.4 (Q-4) of this part stating that it
has reviewed, with the TARP recipient's senior risk officers, the SEO
compensation plans to ensure that these plans do not encourage SEOs to
take unnecessary and excessive risks, the employee compensation plans to
limit any unnecessary risks these plans pose to the TARP recipient, and
the employee compensation plans to eliminate any features of these plans
that would encourage the manipulation of reported earnings of the TARP
recipient to enhance the compensation of any employee. For any period
during which no obligation arising from financial assistance provided
under the TARP remains outstanding, the requirements under this
paragraph shall be modified to be consistent with Sec. 30.4(d) (Q-
4(d)). Providing a statement similar to the following and in the manner
provided in paragraphs (c) and (d) of this section, as applicable, would
satisfy this standard: ``The compensation committee certifies that:
    (1) It has reviewed with senior risk officers the senior executive
officer (SEO) compensation plans and has made all reasonable efforts to
ensure that these plans do not encourage SEOs to take unnecessary and
excessive risks that threaten the value of [identify TARP recipient];
    (2) It has reviewed with senior risk officers the employee
compensation plans and has made all reasonable efforts to limit any
unnecessary risks these plans pose to the [identify TARP recipient]; and
    (3) It has reviewed the employee compensation plans to eliminate any
features of these plans that would encourage the manipulation of
reported earnings of [identify TARP recipient] to enhance the
compensation of any employee.''
    (b) Disclosure. At least once per TARP recipient fiscal year, the
compensation committee must provide a narrative description identifying
each SEO compensation plan and explaining how the SEO compensation plan
does not encourage the SEOs to take unnecessary and excessive risks that
threaten the value of the TARP recipient. The compensation committee
must also identify each employee compensation plan, explain how any
unnecessary risks posed by the employee compensation plan have been
limited, and further explain how the employee compensation plan does not
encourage the manipulation of reported earnings to enhance the
compensation of any employee.
    (c) Location. For TARP recipients with securities registered with
the SEC pursuant to the Federal securities law, the compensation
committee must provide these certifications and disclosures in the
Compensation Committee Report required pursuant to Item 407(e) of
Regulation S-K under the Federal securities laws (17 CFR 229.407(e)) and
to Treasury. These disclosures must be provided in the Compensation
Committee Report for any disclosure pertaining to any fiscal year any
portion of which is a TARP period (for a TARP recipient with an
obligation), or for any disclosure pertaining to any fiscal year
including a date on or before the sunset date (for a TARP recipient that
has never had an obligation). Within 120 days of the completion of a
fiscal year during any part of which is a TARP period (for a TARP
recipient with an obligation), or the completion of a fiscal year
including a date on or before the sunset date (for a TARP recipient that
has never had an obligation), a TARP recipient that is a smaller
reporting company must provide the certifications of the compensation
committee to its primary regulatory agency and to Treasury.
    (d) Application to private TARP recipients. The rules provided in
paragraphs (a), (b), and (c) of this section are also applicable to TARP
recipients that do not have securities registered with the SEC pursuant
to the Federal securities laws. Within 120 days of the completion of the
fiscal year during any part of which is a TARP period (for a TARP
recipient with an obligation), or the completion of a fiscal year
including a date on or before the sunset date (for a TARP recipient that
has never had an obligation), a private TARP recipient

[[Page 338]]

must provide the certification of the compensation committee (or board
of directors, as applicable under Sec. 30.4 (Q-4)) to its primary
regulatory agency and to Treasury.



Sec. 30.8  Q-8: What actions are necessary for a TARP recipient to
comply with the standards established under section 111(b)(3)(B) of EESA

(the ``clawback'' provision requirement)?

    To comply with the standards established under section 111(b)(3)(B)
of EESA, a TARP recipient must ensure that any bonus payment made to a
SEO or the next twenty most highly compensated employees during the TARP
period is subject to a provision for recovery or ``clawback'' by the
TARP recipient if the bonus payment was based on materially inaccurate
financial statements (which includes, but is not limited to, statements
of earnings, revenues, or gains) or any other materially inaccurate
performance metric criteria. Whether a financial statement or
performance metric criteria is materially inaccurate depends on all the
facts and circumstances. However, for this purpose, a financial
statement or performance metric criteria shall be treated as materially
inaccurate with respect to any employee who knowingly engaged in
providing inaccurate information (including knowingly failing to timely
correct inaccurate information) relating to those financial statements
or performance metrics. Otherwise, with respect to a performance
criteria, whether the inaccurate measurement of the performance or
inaccurate application of the performance to the performance criteria is
material depends on whether the actual performance or accurate
application of the actual performance to the performance criteria is
materially different from the performance required under the performance
criteria or the inaccurate application of the actual performance to the
performance criteria. The TARP recipient must exercise its clawback
rights except to the extent it demonstrates that it is unreasonable to
do so, such as, for example, if the expense of enforcing the rights
would exceed the amount recovered. For the purpose of this section, a
bonus payment is deemed to be made to an individual when the individual
obtains a legally binding right to that payment.



Sec. 30.9  Q-9: What actions are necessary for a TARP recipient to
comply with the standards established under section 111(b)(3)(C) of EESA

(the prohibition on golden parachute payments)?

    (a) Prohibition on golden parachute payments. To comply with the
standards established under section 111(b)(3)(C) of EESA, a TARP
recipient must prohibit any golden parachute payment to a SEO and any of
the next five most highly compensated employees during the TARP period.
A golden parachute payment is treated as paid at the time of departure
and is equal to the aggregate present value of all payments made for a
departure. Thus, a golden parachute payment during the TARP period may
include a right to amounts actually payable after the TARP period.
    (b) Examples. The following examples illustrate the provisions of
paragraph (a) of this section:

    Example 1. Employee A is a SEO of a TARP recipient. Employee A is
entitled to a payment of three times his annual compensation upon an
involuntary termination of employment or voluntary termination of
employment for good reason, but such amount is not payable unless and
until the TARP period expires with respect to TARP recipient. Employee A
terminates employment during the TARP period. Because, for purposes of
the prohibition on golden parachute payments, the payment is made at the
time of departure, Employee A may not obtain the right to the payment
upon the termination of employment.
    Example 2. Employee B involuntarily terminated employment on July 1,
2008, at which time Employee B was a SEO of a financial institution.
Employee B's employment agreement provided that if Employee B were
involuntarily terminated or voluntarily terminated employment for good
reason, Employee B would be entitled to a series of five equal annual
payments. After the first payment, but before any subsequent payment,
the entity became a TARP recipient. Because, for purposes of the
prohibition on golden parachute payments, all of the five payments are
deemed to have occurred at termination of employment and because, in
this case, termination of employment occurred before the beginning of
the applicable TARP period, the payment of the four remaining payments
due under the agreement

[[Page 339]]

will not violate the requirements of this section.



Sec. 30.10  Q-10: What actions are necessary for a TARP recipient to
comply with section 111(b)(3)(D) of EESA (the limitations on bonus

payments)?

    (a) General rule. To comply with section 111(b)(3)(D) of EESA,
pursuant to the schedule under paragraph (b) of this section and subject
to the exclusions under paragraph (e) of this section, a TARP recipient
must prohibit the payment or accrual of any bonus payment during the
TARP period to or by the employees identified pursuant to paragraph (b)
of this section.
    (b)(1) Schedule. The prohibition required under paragraph (a) of
this section applies as follows to:
    (i) The most highly compensated employee of any TARP recipient
receiving less than $25,000,000 in financial assistance;
    (ii) At least the five most highly compensated employees of any TARP
recipient receiving $25,000,000 but less than $250,000,000 in financial
assistance;
    (iii) The SEOs and at least the ten next most highly compensated
employees of any TARP recipient receiving $250,000,000 but less than
$500,000,000 in financial assistance; and
    (iv) The SEOs and at least the twenty next most highly compensated
employees of any TARP recipient receiving $500,000,000 or more in
financial assistance.
    (2) Changes in level of financial assistance. The determination of
which schedule in paragraph (b) of this section is applicable to a TARP
recipient during the TARP period is determined by the gross amount of
all financial assistance provided to the TARP recipient, valued at the
time the financial assistance was received. Whether a TARP recipient's
financial assistance has increased during a fiscal year to the point in
the schedule under paragraph (b) of this section that the SEOs or a
greater number of the most highly compensated employees will be subject
to the requirements under paragraph (a) of this section is determined as
of the last day of the TARP recipient's fiscal year, and the increase in
coverage is effective for the subsequent fiscal year.
    (3) Application to first year of financial assistance. For employers
who become TARP recipients after June 15, 2009, the bonus payment
limitation provision under this paragraph (b) does not apply to bonus
payments paid or accrued by TARP recipients or their employees before
the first date of the TARP period. Certain bonus payments may relate to
a service period beginning before and ending after the first date of the
TARP period. In these circumstances, the employee will not be treated as
having accrued the bonus payment on or after the first date of the TARP
period if the bonus payment is reduced to reflect at least the portion
of the service period that occurs on or after the first date of the TARP
period. However, if the employee is a SEO or most highly compensated
employee at the time the amount would otherwise be paid, the bonus
payment amount as reduced in accordance with the previous sentence still
may not be paid until such time as bonus payments to that employee are
permitted.
    (c) Accrual. (1) General rule. Whether an employee has accrued a
bonus payment is determined based on the facts and circumstances. An
accrual may include the granting of service credit (whether toward the
calculation of the benefit or any vesting requirement) or credit for the
compensation received (or that otherwise would have been received)
during the period the employee was subject to the restriction under
paragraph (a) of this section. For application of this rule to the
fiscal year including June 15, 2009, see Sec. 30.17 (Q-17).
    (2) Payments or accruals after the employee is no longer a SEO or
most highly compensated employee. If after the employee is no longer a
SEO or most highly compensated employee, the employee is paid a bonus
payment or provided a legally binding right to a bonus payment that is
based upon services performed or compensation received during the period
the employee was a SEO or most highly compensated employee, the employee
will be treated as having accrued such bonus payment during the period
the employee was a SEO or most highly compensated employee. For example,
if the employee is retroactively granted service credit under an
incentive plan (whether for

[[Page 340]]

vesting or benefit calculation purposes) for the period in which the
employee was a SEO or most highly compensated employee, the employee
will be treated as having accrued that benefit during the period the
employee was a SEO or most highly compensated employee.
    (3) Multi-year service periods. Certain bonus payments may relate to
a multi-year service period, during some portion of which the employee
is a SEO or most highly compensated employee subject to paragraph (a) of
this section, and during some portion of which the employee is not. In
these circumstances, the employee will not be treated as having accrued
the bonus payment during the period the employee was a SEO or most
highly compensated employee if the bonus payment is at least reduced to
reflect the portion of the service period that the employee was a SEO or
most highly compensated employee. If the employee is a SEO or most
highly compensated employee at the time the net bonus payment amount
after such reduction would otherwise be paid, the amount still may not
be paid until such time as bonus payments to that employee are
permitted.
    (d) Examples. The following examples illustrate the rules of
paragraphs (a) through (c) of this section:

    Example 1. Employee A is a SEO of a TARP recipient in 2010, but not
in 2011. The TARP recipient maintains an annual bonus program, generally
paying bonus payments in March of the following year. Employee A may not
be paid a bonus payment in 2010 (for services performed in 2009 or any
other year). In addition, Employee A may not be paid a bonus payment in
2011 to the extent such bonus payment is based on services performed in
2010.
    Example 2. Same facts as in Example 1, provided further that
Employee A receives a salary increase for 2011. The salary increase
equals the same percentage as similarly situated executive officers,
with an additional percentage increase which, over the course of twelve
months, equals the bonus that would have been payable to Employee A in
2011 (for services performed in 2010), except for application of
paragraph (a) of this section. Under these facts and circumstances, the
additional percentage increase will be treated as a bonus payment
accrued in 2010 and Employee A may not be paid this bonus payment.
    Example 3. Same facts as in Example 1, provided further that on
March 1, 2011, Employee A is granted a stock option under the TARP
recipient stock incentive plan with a value approximately equal to the
bonus that would have been payable to Employee A in 2011 (for services
performed in 2010), except for application of paragraph (a) of this
section. Other similarly situated employee not covered by the bonus
limitation for 2010 do not receive such a grant. Under these facts and
circumstances, the stock option grant will be treated as a bonus payment
accrued in 2010 and will not be permitted to be paid to Employee A.
    Example 4. Employee B is not a SEO or a most highly compensated
employee of a TARP recipient during 2009. On July 1, 2009, Employee B is
granted the right to a bonus payment of $50,000 if Employee B is
employed by the TARP recipient through July 1, 2011 (two years).
Employee B is a SEO of a TARP recipient during 2010, but is not a SEO or
a most highly compensated employee of the TARP recipient during 2011.
Employee B is employed by the TARP recipient on July 1, 2011. Thus,
Employee B was a SEO or most highly compensated employee during one-half
of the two-year required service period. Provided that Employee B is
paid not more than half of the otherwise payable bonus payment, or
$25,000, Employee B will not be treated as having accrued a bonus
payment while Employee B was a SEO or a most highly compensated
employee.

    (e) Exclusions--(1) Long-term restricted stock--(i) General rule.
The TARP recipient is permitted to award long-term restricted stock to
the employees whose compensation is limited according to the schedule
under paragraph (b) of this section, provided that the value of this
grant may not exceed one third of the employee's annual compensation as
determined for that fiscal year (that is, not using the look-back method
for the prior year). For purposes of this paragraph, in determining an
employee's annual compensation, all equity-based compensation granted in
fiscal years ending after June 15, 2009 will only be included in the
calculation in the year in which it is granted at its total fair market
value on the grant date, and all equity-based compensation granted in
fiscal years ending prior to June 15, 2009 will not be included in the
calculation of annual compensation for any subsequent fiscal year. For
purposes of this paragraph, in determining the value of the long-term
restricted stock grant, the long-term restricted stock granted in
accordance with this paragraph will only be included in the calculation
in the year in

[[Page 341]]

which the restricted stock is granted at its total fair market value on
the grant date.

    (ii) Example.

     During 2008, Employee A receives compensation of $1 million salary
and a $1,200,000 long-term restricted stock grant subject to a three-
year vesting period. During 2009, Employee A received compensation of $1
million salary and no grant of long-term restricted stock. During 2010,
Employee A receives compensation of $600,000 salary and a $300,000 long-
term restricted stock grant subject to a three-year vesting period.
Under the general SEC compensation disclosure rules used to define
annual compensation in Sec. 30.1 (Q-1) of this part, the compensation
related to the long-term restricted stock grants would be allocated over
the vesting period. Assume for this purpose, that for 2010, $400,000 of
the 2008 long-term restricted stock grant is allocated as compensation,
and $100,000 of the 2010 long-term restricted stock grant is allocated
as compensation, so that the total annual compensation is $1,100,000
($600,000 salary + $400,000 + $100,000). However, for purposes of
determining Employee A's annual compensation to apply the limit on the
value of the long-term restricted stock that may be granted to Employee
A in 2010, the entire $300,000 value of the 2010 grant is included but
the $400,000 value attributed to the 2008 grant is excluded.
Accordingly, Employee A's adjusted annual compensation is $900,000
($1,100,000 - $100,000 + $300,000 - $400,000). In addition, the entire
fair market value of the 2010 long-term restricted stock grant is
included for purposes of determining whether the limit has been
exceeded. Because the $300,000 adjusted value of the long-term
restricted stock grant does not exceed one-third of the $900,000
adjusted annual compensation, the grant complies with paragraph
(e)(1)(i).

    (2) Legally binding right under valid employment contracts--(i)
General rule. The prohibition under paragraph (a) of this section does
not apply to bonus payments required to be paid under a valid employment
contract if the employee had a legally binding right under the contract
to a bonus payment as of February 11, 2009. For purposes of determining
whether an employee had a legally binding right to a bonus payment, see
26 CFR 1.409A-1(b)(i). In addition, the bonus payment must be made in
accordance with the terms of the contract as of February 11, 2009 (which
may include application of an elective deferral election under a
qualified retirement plan or a nonqualified deferred compensation plan),
such that any subsequent amendment to the contract to increase the
amount payable, accelerate any vesting conditions, or otherwise
materially enhance the benefit available to the employee under the
contract will result in the bonus payment being treated as not made
under the employment contract executed on or before February 11, 2009.
However, amendment of a valid employment contract executed on or before
February 11, 2009 under which an employee has a legally binding right to
a bonus payment to reduce the amount of the bonus payment or to enhance
or include service-based or performance-based vesting requirements or
holding period requirements will not result in this treatment. The
amended employment contract would still be deemed a valid employment
contract and the employee would still be treated as having a legally
binding right to the bonus payment under the original employment
contract. The TARP recipient and the employees of the TARP recipient
should be cognizant of the restrictions under section 409A of the
Internal Revenue Code (26 U.S.C. 409A) in the case of an amendment
described in the preceding sentence.
    (ii) Examples. The following examples illustrate the provisions of
this paragraph (2).

    Example 1. TARP recipient sponsors a written restricted stock unit
plan. Under the plan, restricted stock units are traditionally granted
each July 1, and are subject to a three-year vesting requirement.
Employee A, a SEO of TARP recipient, received grants on July 1, 2007,
July 1, 2008, and July 1, 2009. The July 1, 2007 and July 1, 2008 grants
are excluded from the limitation on payments, because although the
awards were subject to a continuing service vesting requirement,
Employee A retained a legally binding right to the restricted stock
units as of February 11, 2009. However, regardless of the fact that the
restricted stock unit program was in existence on February 11, 2009,
Employee A did not retain a legally binding right to a restricted stock
unit for 2009 as of February 11, 2009, but rather obtained the legally
binding right only when the restricted stock unit was granted on July 1,
2009. Accordingly, the July 1, 2009 grant is subject to the limitation
and is not permitted to be accrued or paid (unless such grant complies
with the exception for certain grants of long-term restricted stock).

[[Page 342]]

    Example 2. TARP recipient sponsors an annual bonus program
documented in a written plan. Under the bonus program, the board of
directors retains the discretion to eliminate or reduce the bonus of any
employee in the bonus pool. Employees B and C, both SEOs, are in the
bonus pool for 2008. On January 15, 2009, the compensation committee
determines the bonuses to which the employees of the division in which
Employee B works are entitled, and awards Employee B a $10,000 bonus
payable on June 1. Employee B has a legally binding right to the bonus
as of February 11, 2009 and payment of the bonus is not subject to the
limitation. However, as of February 11, 2009, the board of directors has
not met to determine which employees of the division in which Employee C
works will be entitled to a bonus or the amount of such bonus.
Accordingly, Employee C did not have a legally binding right to a bonus
as of February 11, 2009 and may be subject to the bonus payment
limitation.
    Example 3. TARP recipient sponsors a written stock option plan under
which stock options may be granted to SEOs designated by the
compensation committee. Designations and grants typically occur at a
meeting in August of every year, and no meeting occurred in 2009 before
August. Regardless of the existence of the general plan, no SEO had a
legally binding right to a stock option grant for 2009 as of February
11, 2009 because no grants had been made under the plan. Accordingly,
any 2009 grant will be subject to the limitation and is not permitted to
be made.
    Example 4. Employee D is an SEO of a TARP recipient. Under Employee
D's written employment agreement executed before February 11, 2009,
Employee D is entitled to the total of whatever bonuses are made
available to Employee E and Employee F. As of February 11, 2009,
Employee E had a legally binding right to a $100,000 bonus. Employees E
and F are never at any time SEOs or highly compensated employees subject
to the limitation. As of February 11, 2009, Employee F had no legally
binding right to a bonus, but was eligible to participate in a bonus
pool and was ultimately awarded a bonus of $50,000. As of February 11,
2009, Employee D had a legally binding right to a $100,000 bonus, so
that bonus is not subject to the limitation. However, as of February 11,
2009, Employee D did not have a legally binding right to the additional
$50,000 bonus, so that bonus is subject to the bonus payment limitation
and, if not paid before June 15, 2009 is not permitted to be paid.

    (f) Application to private TARP recipients. The rules set forth in
this section are also applicable to TARP recipients that do not have
securities registered with the SEC pursuant to the Federal securities
laws.



Sec. 30.11  Q-11: Are TARP recipients required to meet any other
standards under the executive compensation and corporate governance

standards in section 111 of EESA?

    (a) Approval of compensation payments to, and compensation
structures for, certain employees of TARP recipients receiving
exceptional financial assistance. For any period during which a TARP
recipient is designated as a TARP recipient that has received
exceptional financial assistance, the TARP recipient must obtain the
approval by the Special Master of all compensation payments to, and
compensation structures for, SEOs and most highly compensated employees
subject to paragraph (b) of Sec. 30.10 (Q-10). TARP recipients that
receive exceptional financial assistance must also receive approval by
the Special Master for all compensation structures for other employees
who are executive officers (as defined under the Securities and Exchange
Act, Rule 3b-7) or one of the 100 most highly compensated employees of a
TARP recipient receiving exceptional assistance (or both), who are not
subject to the bonus limitations under Sec. 30.10 (Q-10). For this
purpose, compensation payments and compensation structures may include
awards or other rights to compensation which an employee has already
received but not yet been paid or, in some instances, fully accrued.
Accordingly, the Special Master has the authority to require that such
compensation payments or compensation structures be altered to meet the
standards set forth in Sec. 30.16 (Q-16). However, this approval
requirement is not applicable to payments that are not subject to
paragraph (a) of Sec. 30.10 (Q-10) due to the application of paragraph
(e)(2) of Sec. 30.10 (Q-10) or the effective date provisions of Sec.
30.17 (Q-17), though the Special Master will take such payments into
account in reviewing the compensation structure and amounts payable, as
applicable, that are subject to review. Notwithstanding any of the
foregoing, approval is not required with respect to an employee not
subject to the bonus payment limitations to the extent that the
employee's annual compensation, as modified

[[Page 343]]

in Sec. 30.16 (Q-16) to include certain deferred compensation and
pension accruals but to disregard any grant of long-term restricted
stock, is limited to $500,000 or less, and any further compensation is
provided in the form of long-term restricted stock. For details, see
Sec. 30.16 (Q-16).
    (b) Perquisite disclosure--(1) General rule. TARP recipients must
annually disclose during the TARP period any perquisite whose total
value for the TARP recipient's fiscal year exceeds $25,000 for each of
the SEOs and most highly compensated employees that are subject to
paragraph (a) of Sec. 30.10 (Q-10). TARP recipients must provide a
narrative description of the amount and nature of these perquisites, the
recipient of these perquisites, and a justification for offering these
perquisites (including a justification for offering the perquisite, and
not only for offering the perquisite with a value that exceeds $25,000).
Such disclosure must be provided within 120 days of the completion of a
fiscal year any part of which is a TARP period.
    (2) Location. A TARP recipient must provide this disclosure to
Treasury and to its primary regulatory agency.
    (c) Compensation consultant disclosure--(1) General rule. The
compensation committee of the TARP recipient must provide annually a
narrative description of whether the TARP recipient, the board of
directors of the TARP recipient, or the compensation committee has
engaged a compensation consultant; and all types of services, including
non-compensation related services, the compensation consultant or any of
its affiliates has provided to the TARP recipient, the board, or the
compensation committee during the past three years, including any
``benchmarking'' or comparisons employed to identify certain percentile
levels of compensation (for example, entities used for benchmarking and
a justification for using these entities and the lowest percentile level
proposed for compensation). Such disclosure must be provided within 120
days of the completion of a fiscal year any part of which is a TARP
period.
    (2) Application to TARP recipients not required to maintain
compensation committees. For those TARP recipients not required to
establish and maintain compensation committees under Sec. 30.4(c) (Q-
4), the board of directors must provide the disclosure under Sec.
30.4(c)(1).
    (3) Location. A TARP recipient must provide this disclosure to
Treasury and to its primary regulatory agency.
    (d) Prohibition on gross-ups. Except as explicitly permitted under
this part, TARP recipients are prohibited from providing (formally or
informally) gross-ups to any of the SEOs and next twenty most highly
compensated employees during the TARP period. For this purpose,
providing a gross-up includes providing a right to a payment of such a
gross-up at a future date, for example a date after the TARP period.



Sec. 30.12  Q-12: What actions are necessary for a TARP recipient to
comply with section 111(d) of EESA (the excessive or luxury expenditures

policy requirement)?

    To comply with section 111(d) of EESA, by the later of ninety days
after the closing date of the agreement between the TARP recipient and
Treasury or September 14, 2009, the board of directors of the TARP
recipient must adopt an excessive or luxury expenditures policy, provide
this policy to Treasury and its primary regulatory agency, and post the
text of this policy on its Internet Web site, if the TARP recipient
maintains a company Web site. After adoption of the policy, the TARP
recipient must maintain the policy during the remaining TARP period (if
the TARP recipient has an obligation), or through the last day of the
TARP recipient's fiscal year including the sunset date (if the TARP
recipient has never had an obligation). If, after adopting an excessive
or luxury expenditures policy, the board of directors of the TARP
recipient makes any material amendments to this policy, within ninety
days of the adoption of the amended policy, the board of directors must
provide the amended policy to Treasury and its primary regulatory agency
and post the amended policy on its Internet Web site, if the TARP
recipient maintains a company Web site. This disclosure must continue
through the TARP period (if the TARP recipient has an obligation), or
through the last day of the TARP recipient's fiscal

[[Page 344]]

year that includes the sunset date (if the TARP recipient has never had
an obligation).



Sec. 30.13  Q-13: What actions are necessary for a TARP recipient to
comply with section 111(e) of EESA (the shareholder resolution on

executive compensation requirement)?

    As provided in section 111(e) of EESA, any proxy or consent or
authorization for an annual or other meeting of the shareholders of any
TARP recipient that occurs during the TARP period must permit a separate
shareholder vote to approve the compensation of executives, as required
to be disclosed pursuant to the Federal securities laws (including the
compensation discussion and analysis, the compensation tables, and any
related material). To meet this standard, a TARP recipient must comply
with any rules, regulations, or guidance promulgated by the SEC that are
applicable to the TARP recipient.

[74 FR 63992, Dec. 7, 2009]



Sec. 30.14  Q-14: How does section 111 of EESA operate in connection
with an acquisition, merger, or reorganization?

    (a) Special rules for acquisitions, mergers, or reorganizations. In
the event that a TARP recipient (target) is acquired by an entity that
is not an affiliate of the target (acquirer) in an acquisition of any
form, including a purchase of substantially all of the assets of the
target, such that the acquirer after the transaction would have been
treated as a TARP recipient if the target had received the TARP funds
immediately after the transaction, acquirer will not become subject to
section 111 of EESA merely as a result of the acquisition. If the
acquirer is not subject to section 111 of EESA immediately after the
transaction, then any employees of the acquirer immediately after the
transaction (including target employees who were SEOs or most highly
compensated employees immediately prior to the transaction and became
acquirer employees as a result of the transaction) will not be subject
to section 111 of EESA.
    (b) Anti-abuse rule. Notwithstanding the provisions of paragraph (a)
of this section, if the primary purpose of a transaction involving the
acquisition, in any form, of a TARP recipient is to avoid or evade the
application of any of the requirements of section 111 of EESA, the
acquirer will be treated as a TARP recipient immediately upon such
acquisition. In such a case, the SEOs and the most highly compensated
employees to whom any of the requirements of section 111 of EESA and
this Interim Final Rule apply shall be redetermined as of the date of
the acquisition. The redetermined SEOs and most highly compensated
employees of the post-acquisition acquirer shall consist of the PEO and
PFO of the post-acquisition acquirer, plus the applicable number of next
most highly compensated employees determined by aggregating the post-
acquisition employees of the acquirer (to include the pre-acquisition
employees of the target employed by the acquirer, or anticipated to be
employed by the acquirer), and ranking such employees in order of
compensation for the immediately preceding fiscal year of the pre-
acquisition target or pre-acquisition acquirer, as appropriate. In the
case of an asset acquisition, the entity or entities to whom the
target's assets are transferred shall be treated as the direct recipient
of the financial assistance for purposes of determining which other
related entities are treated, in the aggregate, as the TARP recipient
under the definition of ``TARP recipient'' in Sec. 30.1 (Q-1).



Sec. 30.15  Q-15: What actions are necessary for a TARP recipient to
comply with certification requirements of section 111(b)(4) of EESA?

    (a) Certification Requirements--(1) General. To comply with section
111(b)(4) of EESA, the PEO and the PFO of the TARP recipient must
provide the following certifications with respect to the compliance of
the TARP recipient with section 111 of EESA as implemented under this
part:
    (2) First Fiscal Year Certification. (i) Within ninety days of the
completion of the first annual fiscal year of the TARP recipient any
portion of which is a TARP period, the PEO and the PFO of the TARP
recipient must provide

[[Page 345]]

certifications similar to the model provided in appendix A to this
section.
    (ii) If the first annual fiscal year of a TARP recipient any portion
of which is a TARP period ends within thirty days after the closing date
of the applicable agreement between the TARP recipient and Treasury, the
TARP recipient shall have an additional sixty days beginning on the day
after the end of the fiscal year during which it can establish the
compensation committee, if not already established, and during which the
compensation committee shall meet with senior risk officers to discuss,
review, and evaluate the SEO compensation plans and employee
compensation plans in accordance with Sec. 30.4 (Q-4) of this part. The
certifications of the PEO and the PFO of the TARP recipient must be
amended to reflect the timing of the establishment and reviews of the
compensation committee.
    (3) Years Following First Fiscal Year Certification. Within ninety
days of the completion of each TARP fiscal year of the TARP recipient
after the first TARP fiscal year, the PEO and the PFO of the TARP
recipient must provide a certification similar to the model provided in
Appendix B to this section.
    (4) Location. A TARP recipient with securities registered with the
SEC pursuant to the Federal securities law must provide these
certifications as an exhibit (pursuant to Item 601(b)(99)(i) of
Regulation S-K under the Federal securities laws (17 CFR
229.601(b)(99)(i)) to the TARP recipient's annual report on Form 10-K
and to Treasury. To the extent that the PEO or the PFO of the TARP
recipient is unable to provide any of these certifications in a timely
manner, the PEO or the PFO must provide Treasury an explanation of the
reason such certification has not been provided. These certifications
are in addition to the compensation committee certifications required by
Sec. 30.5 (Q-5) of this part.
    (5) Application to private TARP recipients. The rules provided in
this section are also applicable to TARP recipients that do not have
securities registered with the SEC pursuant to the Federal securities
laws, except that the certifications under Appendix A, paragraph (x) and
Appendix B, paragraph (x) of this section are not required for such TARP
recipients. A private TARP recipient must provide these certifications
to its primary regulatory agency and to Treasury.
    (6) Application to TARP recipients that have never had an
obligation. For those TARP recipients that have never had an obligation,
the PEO and PFO must provide the certifications pursuant to this
paragraph (a) only with respect to the requirements applicable to a TARP
recipient that has never had an obligation (generally certain
compensation committee reviews of employee compensation plans and the
issuance of, and compliance with, an excessive or luxury expenses
policy).
    (b) Recordkeeping requirements. The TARP recipient must preserve
appropriate documentation and records to substantiate each certification
required under paragraph (a) of this section for a period of not less
than six years after the date of the certification, the first two years
in an easily accessible place. The TARP recipient must furnish promptly
to Treasury legible, true, complete, and current copies of the
documentation and records that are required to be preserved under
paragraph (b) of this section that are requested by any representative
of Treasury.
    (c) Penalties for making or providing false or fraudulent
Statements. Any individual or entity that provides information or makes
a certification to Treasury pursuant to the Interim Final Rule or as
required pursuant to 31 CFR Part 30 may be subject to 18 U.S.C. 1001,
which generally prohibits the making of any false or fraudulent
statement in a matter within the jurisdiction of the Federal government.
Upon receipt of information indicating that any individual or entity has
violated any provision of title 18 of the U.S. Code or other provision
of Federal law, Treasury shall refer such information to the Department
of Justice and the Special Inspector General for the Troubled Asset
Relief Program.

  Appendix A to Sec. 30.15--Model Certification for First Fiscal Year
                              Certification

    ``I, [identify certifying individual], certify, based on my
knowledge, that:

[[Page 346]]

    (i) The compensation committee of [identify TARP recipient] has
discussed, reviewed, and evaluated with senior risk officers at least
every six months during the period beginning on the later of September
14, 2009, or ninety days after the closing date of the agreement between
the TARP recipient and Treasury and ending with the last day of the TARP
recipient's fiscal year containing that date (the applicable period),
the senior executive officer (SEO) compensation plans and the employee
compensation plans and the risks these plans pose to [identify TARP
recipient];
    (ii) The compensation committee of [identify TARP recipient] has
identified and limited during the applicable period any features of the
SEO compensation plans that could lead SEOs to take unnecessary and
excessive risks that could threaten the value of [identify TARP
recipient], and during that same applicable period has identified any
features of the employee compensation plans that pose risks to [identify
TARP recipient] and has limited those features to ensure that [identify
TARP recipient] is not unnecessarily exposed to risks;
    (iii) The compensation committee has reviewed, at least every six
months during the applicable period, the terms of each employee
compensation plan and identified any features of the plan that could
encourage the manipulation of reported earnings of [identify TARP
recipient] to enhance the compensation of an employee, and has limited
any such features;
    (iv) The compensation committee of [identify TARP recipient] will
certify to the reviews of the SEO compensation plans and employee
compensation plans required under (i) and (iii) above;
    (v) The compensation committee of [identify TARP recipient] will
provide a narrative description of how it limited during any part of the
most recently completed fiscal year that included a TARP period the
features in
    (A) SEO compensation plans that could lead SEOs to take unnecessary
and excessive risks that could threaten the value of [identify TARP
recipient];
    (B) Employee compensation plans that unnecessarily expose [identify
TARP recipient] to risks; and
    (C) Employee compensation plans that could encourage the
manipulation of reported earnings of [identify TARP recipient] to
enhance the compensation of an employee;
    (vi) [Identify TARP recipient] has required that bonus payments, as
defined in the regulations and guidance established under section 111 of
EESA (bonus payments), of the SEOs and twenty next most highly
compensated employees be subject to a recovery or ``clawback'' provision
during any part of the most recently completed fiscal year that was a
TARP period if the bonus payments were based on materially inaccurate
financial statements or any other materially inaccurate performance
metric criteria;
    (vii) [Identify TARP recipient] has prohibited any golden parachute
payment, as defined in the regulations and guidance established under
section 111 of EESA, to an SEO or any of the next five most highly
compensated employees during the period beginning on the later of the
closing date of the agreement between the TARP recipient and Treasury or
June 15, 2009 and ending with the last day of the TARP recipient's
fiscal year containing that date;
    (viii) [Identify TARP recipient] has limited bonus payments to its
applicable employees in accordance with section 111 of EESA and the
regulations and guidance established thereunder during the period
beginning on the later of the closing date of the agreement between the
TARP recipient and Treasury or June 15, 2009 and ending with the last
day of the TARP recipient's fiscal year containing that date, [for
recipients of exceptional assistance: and has received or is in the
process of receiving approvals from the Office of the Special Master for
TARP Executive Compensation for compensation payments and structures as
required under the regulations and guidance established under section
111 of EESA, and has not made any payments inconsistent with those
approved payments and structures];
    (ix) The board of directors of [identify TARP recipient] has
established an excessive or luxury expenditures policy, as defined in
the regulations and guidance established under section 111 of EESA, by
the later of September 14, 2009, or ninety days after the closing date
of the agreement between the TARP recipient and Treasury; this policy
has been provided to Treasury and its primary regulatory agency;
[identify TARP recipient] and its employees have complied with this
policy during the applicable period; and any expenses that, pursuant to
this policy, required approval of the board of directors, a committee of
the board of directors, an SEO, or an executive officer with a similar
level of responsibility were properly approved;
    (x) [Identify TARP recipient] will permit a non-binding shareholder
resolution in compliance with any applicable Federal securities rules
and regulations on the disclosures provided under the Federal securities
laws related to SEO compensation paid or accrued during the period
beginning on the later of the closing date of the agreement between the
TARP recipient and Treasury or June 15, 2009 and ending with the last
day of the TARP recipient's fiscal year containing that date;
    (xi) [Identify TARP recipient] will disclose the amount, nature, and
justification for the offering during the period beginning on the

[[Page 347]]

later of the closing date of the agreement between the TARP recipient
and Treasury or June 15, 2009 and ending with the last day of the TARP
recipient's fiscal year containing that date of any perquisites, as
defined in the regulations and guidance established under section 111 of
EESA, whose total value exceeds $25,000 for any employee who is subject
to the bonus payment limitations identified in paragraph (viii);
    (xii) [Identify TARP recipient] will disclose whether [identify TARP
recipient], the board of directors of [identify TARP recipient], or the
compensation committee of [TARP recipient] has engaged during the period
beginning on the later of the closing date of the agreement between the
TARP recipient and Treasury or June 15, 2009 and ending with the last
day of the TARP recipient's fiscal year containing that date, a
compensation consultant; and the services the compensation consultant or
any affiliate of the compensation consultant provided during this
period;
    (xiii) [Identify TARP recipient] has prohibited the payment of any
gross-ups, as defined in the regulations and guidance established under
section 111 of EESA, to the SEOs and the next twenty most highly
compensated employees during the period beginning on the later of the
closing date of the agreement between the TARP recipient and Treasury or
June 15, 2009 and ending with the last day of the TARP recipient's
fiscal year containing that date;
    (xiv) [Identify TARP recipient] has substantially complied with all
other requirements related to employee compensation that are provided in
the agreement between [identify TARP recipient] and Treasury, including
any amendments;
    (xv) [Identify TARP recipient] has submitted to Treasury a complete
and accurate list of the SEOs and the twenty next most highly
compensated employees for the current fiscal year and the most recently
completed fiscal year, with the non-SEOs ranked in descending order of
level of annual compensation, and with the name, title, and employer of
each SEO and most highly compensated employee identified; and[.]
    (xvi) I understand that a knowing and willful false or fraudulent
statement made in connection with this certification may be punished by
fine, imprisonment, or both. (See, for example, 18 U.S.C. 1001.)''

Appendix B to Sec. 30.15--Model Certification for Years Following First
                        Fiscal Year Certification

    ``I, [identify certifying individual], certify, based on my
knowledge, that:
    (i) The compensation committee of [identify TARP recipient] has
discussed, reviewed, and evaluated with senior risk officers at least
every six months during any part of the most recently completed fiscal
year that was a TARP period, senior executive officer (SEO) compensation
plans and employee compensation plans and the risks these plans pose to
[identify TARP recipient];
    (ii) The compensation committee of [identify TARP recipient] has
identified and limited during any part of the most recently completed
fiscal year that was a TARP period any features of the SEO compensation
plans that could lead SEOs to take unnecessary and excessive risks that
could threaten the value of [identify TARP recipient] and has identified
any features of the employee compensation plans that pose risks to
[identify TARP recipient] and has limited those features to ensure that
[identify TARP recipient] is not unnecessarily exposed to risks;
    (iii) The compensation committee has reviewed, at least every six
months during any part of the most recently completed fiscal year that
was a TARP period, the terms of each employee compensation plan and
identified any features of the plan that could encourage the
manipulation of reported earnings of [identify TARP recipient] to
enhance the compensation of an employee, and has limited any such
features;
    (iv) The compensation committee of [identify TARP recipient] will
certify to the reviews of the SEO compensation plans and employee
compensation plans required under (i) and (iii) above;
    (v) The compensation committee of [identify TARP recipient] will
provide a narrative description of how it limited during any part of the
most recently completed fiscal year that was a TARP period the features
in
    (A) SEO compensation plans that could lead SEOs to take unnecessary
and excessive risks that could threaten the value of [identify TARP
recipient];
    (B) Employee compensation plans that unnecessarily expose [identify
TARP recipient] to risks; and
    (C) Employee compensation plans that could encourage the
manipulation of reported earnings of [identify TARP recipient] to
enhance the compensation of an employee;
    (vi) [Identify TARP recipient] has required that bonus payments to
SEOs or any of the next twenty most highly compensated employees, as
defined in the regulations and guidance established under section 111 of
EESA (bonus payments), be subject to a recovery or ``clawback''
provision during any part of the most recently completed fiscal year
that was a TARP period if the bonus payments were based on materially
inaccurate financial statements or any other materially inaccurate
performance metric criteria;
    (vii) [Identify TARP recipient] has prohibited any golden parachute
payment, as defined in the regulations and guidance established under
section 111 of EESA, to a SEO or

[[Page 348]]

any of the next five most highly compensated employees during any part
of the most recently completed fiscal year that was a TARP period;
    (viii) [Identify TARP recipient] has limited bonus payments to its
applicable employees in accordance with section 111 of EESA and the
regulations and guidance established thereunder during any part of the
most recently completed fiscal year that was a TARP period [for
recipients of exceptional assistance] and has received or is in the
process of receiving approvals from the Office of the Special Master for
TARP Executive Compensation for compensation payments and structures as
required under the regulations and guidance established under section
111 of EESA, and has not made any payments inconsistent with those
approved payments and structures;
    (ix) [Identify TARP recipient] and its employees have complied with
the excessive or luxury expenditures policy, as defined in the
regulations and guidance established under section 111 of EESA, during
any part of the most recently completed fiscal year that was a TARP
period; and any expenses that, pursuant to the policy, required approval
of the board of directors, a committee of the board of directors, an
SEO, or an executive officer with a similar level of responsibility were
properly approved;
    (x) [Identify TARP recipient] will permit a non-binding shareholder
resolution in compliance with any applicable Federal securities rules
and regulations on the disclosures provided under the Federal securities
laws related to SEO compensation paid or accrued during any part of the
most recently completed fiscal year that was a TARP period;
    (xi) [Identify TARP recipient] will disclose the amount, nature, and
justification for the offering, during any part of the most recently
completed fiscal year that was a TARP period, of any perquisites, as
defined in the regulations and guidance established under section 111 of
EESA, whose total value exceeds $25,000 for any employee who is subject
to the bonus payment limitations identified in paragraph (viii);
    (xii) [Identify TARP recipient] will disclose whether [identify TARP
recipient], the board of directors of [identify TARP recipient], or the
compensation committee of [identify TARP recipient] has engaged during
any part of the most recently completed fiscal year that was a TARP
period a compensation consultant; and the services the compensation
consultant or any affiliate of the compensation consultant provided
during this period;
    (xiii) [Identify TARP recipient] has prohibited the payment of any
gross-ups, as defined in the regulations and guidance established under
section 111 of EESA, to the SEOs and the next twenty most highly
compensated employees during any part of the most recently completed
fiscal year that was a TARP period;
    (xiv) [Identify TARP recipient] has substantially complied with all
other requirements related to employee compensation that are provided in
the agreement between [identify TARP recipient] and Treasury, including
any amendments;
    (xv) [Identify TARP recipient] has submitted to Treasury a complete
and accurate list of the SEOs and the twenty next most highly
compensated employees for the current fiscal year, with the non-SEOs
ranked in descending order of level of annual compensation, and with the
name, title, and employer of each SEO and most highly compensated
employee identified; and''.
    (xvi) I understand that a knowing and willful false or fraudulent
statement made in connection with this certification may be punished by
fine, imprisonment, or both. (See, for example 18 U.S.C. 1001.)''

[74 FR 28405, June 15, 2009, as amended at 74 FR 63992, Dec. 7, 2009]



Sec. 30.16  Q-16: What is the Office of the Special Master for TARP
Executive Compensation, and what are its powers, duties and

responsibilities?

    (a) The Office of the Special Master for TARP Executive
Compensation. The Secretary of the Treasury shall establish the Office
of the Special Master for TARP Executive Compensation (Special Master).
The Special Master shall serve at the pleasure of the Secretary, and may
be removed by the Secretary without notice, without cause, and prior to
the naming of any successor Special Master. The Special Master shall
have the following powers, duties and responsibilities:
    (1) Interpretative authority. The Special Master shall have
responsibility for interpreting section 111 of EESA, these regulations,
and any other applicable guidance, to determine how the requirements
under section 111 of EESA, these regulations, and any other applicable
guidance, apply to particular facts and circumstances. Accordingly, the
Special Master shall make all determinations, as required, as to the
meaning of such guidance and whether such requirements have been met in
any particular circumstances. In addition, a TARP recipient or a TARP
recipient employee may submit a request, in accordance with paragraph
(c)(3) of this section, for an advisory opinion with respect to the
requirements under section 111 of EESA,

[[Page 349]]

these regulations and any other applicable guidance.
    (2) Review of prior payments to employees. Section 111(f) of EESA
provides that the Secretary shall review bonuses, retention awards, and
other compensation paid before February 17, 2009, to employees of each
entity receiving TARP assistance before February 17, 2009, to determine
whether any such payments were inconsistent with the purposes of section
111 of EESA or TARP, or otherwise contrary to the public interest.
Section 111(f) of EESA provides that, if the Secretary makes such a
determination, the Secretary shall seek to negotiate with the TARP
recipient and the subject employee for appropriate reimbursements to the
Federal Government with respect to compensation or bonuses. The Special
Master shall have the responsibility for administering these provisions,
including the identification of the payments that are inconsistent with
the purposes of EESA or TARP, or otherwise contrary to the public
interest, and the Special Master shall have responsibility for the
negotiation with the TARP recipient and the subject employee for
appropriate reimbursements to the Federal Government with respect to
compensation or bonuses. The Special Master shall make this
determination by application of the principles outlined in paragraph (b)
of this section. The Special Master's administration of these provisions
may provide for the scope of review by the Special Master of a payment,
including a limited review or no review, depending on the payment
amount, the type of payment, the overall compensation earned by the
employee during the relevant period, a combination thereof, or such
other factors as the Special Master may determine, where the Special
Master determines that such factors demonstrate that such payments are
not, or are highly unlikely to be, inconsistent with the purposes of
section 111 of EESA or TARP, or otherwise contrary to the public
interest, or that renegotiation of such payments is not in the public
interest. The Special Master may request in writing any information from
TARP recipients necessary to carry out the review of prior compensation
required under section 111(f) of EESA. TARP recipients must submit any
requested information to the Special Master within 30 days of the
request.
    (3) Approval of certain payments to employees of TARP recipients
receiving exceptional financial assistance. (i) SEOs and most highly
compensated employees. The Special Master shall determine whether the
compensation structure for each SEO or most highly compensated employee
of a TARP recipient receiving exceptional assistance, including the
amounts payable or potentially payable under such compensation
structure, will or may result in payments that are inconsistent with the
purposes of section 111 of EESA or TARP, or are otherwise contrary to
the public interest. The Special Master shall make such determinations
by applying the principles outlined in paragraph (b) of this section,
subject to the requirement that the compensation structure and payments
satisfy the applicable limitations under Sec. 30.10 (Q-10). This
requirement shall apply to any compensation accrued or paid during any
period the SEO or most highly compensated employee is subject to the
limitations under Sec. 30.10 (Q-10). Initial requests for such approval
must be submitted no later than August 14, 2009. The Special Master's
administration of these provisions may provide for the Special Master's
scope of review, including a limited review or no review, of a portion
of a compensation structure or payment depending on the amount of such
payments, the type of such payments, the overall compensation earned by
the employee during the relevant period, a combination thereof, or such
other factors as the Special Master determines, if the Special Master
has determined that such factors demonstrate that such payments are not,
or are highly unlikely to be, inconsistent with the purposes of section
111 of EESA or TARP, or otherwise contrary to the public interest. The
Special Master shall issue a determination within 60 days of the receipt
of a substantially complete submission. The TARP recipient must make a
further request for approval to the extent the compensation structure
for any SEO or most highly compensated employee, including the amounts
that are

[[Page 350]]

or may be payable, for any SEO or highly compensated employee is
materially modified. In reviewing compensation structures and
compensation payments for any period subject to Special Master review,
the Special Master may take into account other compensation structures
and other compensation earned, accrued or paid, including such
compensation and compensation structures that are not subject to the
restrictions of Section 111 of EESA pursuant to section
111(b)(3)(D)(iii) (see Sec. 30.10(e)(2) (Q-30.10(e)(2) (certain legally
binding rights under valid written employment contracts)), and amounts
that were accrued or paid prior to June 15, 2009 and are therefore not
subject to review by the Special Master.
    (ii) Other executive officers and most highly compensated employees.
With respect to any employee who is either an executive officer (as
defined under the Securities and Exchange Act Rule 3b-7) or one of the
100 most highly compensated employees of a TARP recipient receiving
exceptional assistance (or both), who is not subject to the bonus
limitations under Sec. 30.10 (Q-10), the Special Master shall determine
whether the compensation structure for such employees will or may result
in payments that are inconsistent with the purposes of section 111 of
EESA or TARP, or are otherwise contrary to the public interest. The
Special Master shall make such determination through application of the
principles outlined in paragraph (b) of this section. With respect to
the scope of the required review, the Special Master shall determine
only whether the compensation arrangements are adequately structured,
and is not required to rule with respect to the amounts that are or may
be payable thereunder. However, the TARP recipient may also request an
advisory opinion with respect to the amounts that are or may be payable,
which the Special Master may provide in his sole discretion.
Notwithstanding the foregoing, if the total annual compensation to an
employee complies with the rules applicable to an SEO under Sec. 30.10
(Q-10) applied without any limits on the grant of long-term restricted
stock, and the annual compensation other than long-term restricted stock
does not exceed $500,000 (or for 2009, $500,000 prorated to reflect the
remaining portion of 2009 after June 15, 2009), the compensation
structure will automatically be deemed to meet the requirements and no
prior approval by the Special Master will be required. For purposes of
the $500,000 limit, in determining annual compensation, all equity-based
compensation granted in fiscal years ending after June 15, 2009 will be
included in the calculation only in the year in which they are granted
at their total fair market value on the grant date and all equity-based
compensation granted in fiscal years ending prior to June 15, 2009 will
not be included in the calculation of annual compensation. In addition,
solely for purposes of applying the limit (and not for purposes of
identifying the most highly compensated employees), the term annual
compensation includes amounts required to be disclosed under paragraph
(viii) of Item 402(a) of Regulation S-K of the Federal securities laws
(change in the actuarial present value of benefits under a pension plan
and above-market earnings on deferred compensation). The Special
Master's administration of these provisions may provide for limited or
no review of a portion of a compensation structure by the Special Master
depending on the amount of potential payments, the type of such
payments, the overall compensation earned by the employee during the
relevant period, a combination thereof, or such other factors as the
Special Master determines, where the Special Master has determined that
such factors demonstrate that such payments are not, or are highly
unlikely to be, inconsistent with the purposes of section 111 of EESA or
TARP, or otherwise contrary to the public interest. Initial requests for
such approval must be submitted no later than 120 days after publication
of the final rule. Separate requests need not be submitted for each
individual covered employee, but should be submitted for identified
groups of employees subject to the same compensation structures to the
extent possible as long as sufficient detail regarding individual
compensation awards are provided as necessary to

[[Page 351]]

evaluate such employee's compensation structure. The Special Master
shall issue a determination within 60 days of the receipt of a
substantially complete submission. The TARP recipient must make a
further request for approval to the extent the compensation structure,
including the amounts that are or may be payable, for any executive
officer is materially amended. In reviewing compensation structures for
any period subject to Special Master review, the Special Master may take
into account other compensation structures and other compensation
earned, accrued or paid, including such compensation and compensation
structures that are not subject to the restrictions of Section 111 of
EESA pursuant to section 111(b)(3)(D)(iii) (see Sec. 30.10(e)(2) (Q-
30.10(e)(2) (certain legally binding rights under valid written
employment contracts)), and amounts that were accrued or paid prior to
June 15, 2009 and are therefore not subject to review by the Special
Master.
    (iii) Period from June 15, 2009 through final determination. For the
period from June 15, 2009 through the date of the Special Master's final
determination, the TARP recipient will be treated as complying with this
section if, with respect to employees covered by paragraph (a)(3)(i) of
this section, the TARP recipient continues to pay compensation to such
employees in accordance with the terms of employment as of June 14, 2009
to the extent otherwise permissible under this Interim Final Rule (for
example, continued salary payments but not any bonus payments) and if,
with respect to employees covered by paragraph (a)(3)(ii) of this
section, the TARP recipient continues to pay compensation to such
employees under the compensation structure established as of June 14,
2009, and if in addition the TARP recipient promptly complies with any
modifications that may be required by the Special Master's final
determination. However, the Special Master may take into account the
amounts paid to an employee during such period in determining the
appropriate compensation amounts and compensation structures, as
applicable, for the remainder of the year.
    (4) Advisory opinions on compensation structures or compensation
payments to employees of TARP recipients. A TARP recipient or TARP
recipient employee may request an advisory opinion from the Special
Master as to whether a compensation structure is, or will or may result
in payments that are, inconsistent with the purposes of EESA or TARP, or
otherwise contrary to the public interest. In addition, the Special
Master may become aware of compensation structures or payments at any
TARP recipient for which it may be useful to provide an advisory opinion
as to whether such structure or payments meets this standard.
Accordingly, the Special Master shall have the authority to render
advisory opinions upon request or at the Special Master's initiative, as
to whether a compensation structure is, or will or may result in
payments to an employee that are inconsistent with the purposes of
section 111 of EESA or TARP, or otherwise contrary to the public
interest, or whether a compensation payment made, or to be made, was or
will be inconsistent with the purposes of section 111 of EESA or TARP,
or otherwise contrary to the public interest. If the Special Master
renders an adverse opinion, the Special Master shall have the authority
to seek to negotiate with the TARP recipient and the subject employee
for appropriate reimbursements to the TARP recipient or the Federal
government. Any advisory opinion shall reflect the Special Master's
application of the principles outlined in paragraph (b) of this section.
The Special Master shall not be required to render an advisory opinion
in every instance, but may do so only where the Special Master deems
appropriate and feasible in the context of the Special Master's other
responsibilities. In any case, the Special Master shall render an
opinion, or affirmatively decline to render an advisory opinion, within
60 days of the receipt of a substantially complete submission. The
Special Master shall not be required to explain any decision to decline
to render an advisory opinion.
    (5) Other designated duties and powers. The Special Master shall
have such other duties and powers related to the application of
compensation issues

[[Page 352]]

arising in the administration of EESA or TARP as the Secretary or the
Secretary's designate may delegate to the Special Master, including, but
not limited to, the interpretation or application of contractual
provisions between the Federal government and a TARP recipient as those
provisions relate to the compensation paid to, or accrued by, an
employee of such TARP recipient.
    (b) Determination of whether compensation is inconsistent with the
purposes of section 111 of EESA or TARP or is otherwise contrary to the
public interest--(1) Principles. In reviewing a compensation structure
or a compensation payment to determine whether it is inconsistent with
the purposes of section 111 of EESA or TARP or is otherwise contrary to
the public interest, the Special Master shall apply the principles
enumerated below. The principles are intended to be consistent with
sound compensation practices appropriate for TARP recipients, and to
advance the purposes and considerations described in EESA sections 2 and
103, including the maximization of overall returns to the taxpayers of
the United States and providing stability and preventing disruptions to
financial markets. The Special Master has discretion to determine the
appropriate weight or relevance of a particular principle depending on
the facts and circumstances surrounding the compensation structure or
payment under consideration, such as whether a payment occurred in the
past or is proposed for the future, the role of the employee within the
TARP recipient, the situation of the TARP recipient within the
marketplace and the amount and type of financial assistance provided. To
the extent that two or more principles may appear inconsistent in a
particular situation, the Special Master will determine the relative
weight to be accorded each principle. In the case of any review of
payments already made under paragraph (c)(2) of this section, or of any
rights to bonuses, awards, or other compensation already granted, the
Special Master shall apply these principles by considering the facts and
circumstances at the time the compensation was granted, earned, or paid,
as appropriate.
    (i) Risk. The compensation structure should avoid incentives to take
unnecessary or excessive risks that could threaten the value of the TARP
recipient, including incentives that reward employees for short-term or
temporary increases in value, performance, or similar measure that may
not ultimately be reflected by an increase in the long-term value of the
TARP recipient. Accordingly, incentive payments or similar rewards
should be structured to be paid over a time horizon that takes into
account the risk horizon so that the payment or reward reflects whether
the employee's performance over the particular service period has
actually contributed to the long-term value of the TARP recipient.
    (ii) Taxpayer return. The compensation structure, and amount payable
where applicable, should reflect the need for the TARP recipient to
remain a competitive enterprise, to retain and recruit talented
employees who will contribute to the TARP recipient's future success,
and ultimately to be able to repay TARP obligations.
    (iii) Appropriate allocation. The compensation structure should
appropriately allocate the components of compensation such as salary,
short-term and long-term incentives, as well as the extent to which
compensation is provided in cash, equity or other types of compensation
such as executive pensions, other benefits, or perquisites, based on the
specific role of the employee and other relevant circumstances,
including the nature and amount of current compensation, deferred
compensation, or other compensation and benefits previously paid or
awarded. The appropriate allocation may be different for different
positions and for different employees, but generally, in the case of an
executive or other senior level position a significant portion of the
overall compensation should be long-term compensation that aligns the
interest of the employee with the interests of shareholders and
taxpayers.
    (iv) Performance-based compensation. An appropriate portion of the
compensation should be performance-based over a relevant performance
period. Performance-based compensation should be determined through
tailored

[[Page 353]]

metrics that encompass individual performance and/or the performance of
the TARP recipient or a relevant business unit taking into consideration
specific business objectives. Performance metrics may relate to employee
compliance with relevant corporate policies. In addition, the likelihood
of meeting the performance metrics should not be so great that the
arrangement fails to provide an adequate incentive for the employee to
perform, and performance metrics should be measurable, enforceable, and
actually enforced if not met. The appropriate allocation and the
appropriate performance metrics may be different for different positions
and for different employees, but generally a significant portion of
total compensation should be performance-based compensation, and
generally that portion should be greater for positions that exercise
higher levels of responsibility.
    (v) Comparable structures and payments. The compensation structure,
and amount payable where applicable, should be consistent with, and not
excessive, taking into account compensation structures and amounts for
persons in similar positions or roles at similar entities that are
similarly situated, including, as applicable, entities competing in the
same markets and similarly situated entities that are financially
distressed or that are contemplating or undergoing reorganization.
    (vi) Employee contribution to TARP recipient value. The compensation
structure, and amount payable where applicable, should reflect the
current or prospective contributions of an employee to the value of the
TARP recipient, taking into account multiple factors such as revenue
production, specific expertise, compliance with company policy and
regulation (including risk management), and corporate leadership, as
well as the role the employee may have had with respect to any change in
the financial health or competitive position of the TARP recipient.
    (2) Further guidance. The Secretary reserves the discretion to
modify or amend the foregoing principles through notice, announcement or
other generally applicable guidance, provided that such guidance shall
apply only prospectively from its date of publication and shall not
provide a basis for reconsideration of a determination of the Special
Master, except as the Special Master deems appropriate in light of such
modification or amendment.
    (c) Special Master determinations--(1) Initial determinations. The
Special Master shall provide an initial determination in writing, within
60 days of the receipt of a substantially complete submission, setting
forth the facts and analysis that formed the basis for the
determination. The TARP recipient shall have 30 days to request in
writing that the Special Master reconsider the initial determination.
The request for reconsideration must specify a factual error or relevant
new information not previously considered, and must demonstrate that
such error or lack of information resulted in a material error in the
initial determination. The Special Master must provide a final
determination in writing within 30 days, setting forth the facts and
analysis that formed the basis for the determination. If a TARP
recipient does not request reconsideration within 30 days, the initial
determination shall be treated as a final determination.
    (2) Final determinations. In the case of any final determination
that the TARP recipient is required to receive, the final determination
of the Special Master shall be final and binding and treated as the
determination of the Treasury.
    (3) Advisory Opinions. An advisory opinion of the Special Master
shall not be binding upon any TARP recipient or employee, but may be
relied upon by a TARP recipient or employee if the advisory opinion
applies to the TARP recipient and the employee and the TARP recipient
and employee comply in all respects with the advisory opinion.
    (d) Submissions to the Special Master--(1) Submission procedures.
Submissions to the Special Master may be made under such procedures as
the Special Master shall determine. The Special Master may reserve the
right to request further information at any time and a submission shall
not be treated as substantially complete unless the Special Master has
so designated.

[[Page 354]]

    (2) Disclosure procedures. Materials submitted to the Special Master
and the initial and final determinations of the Special Master are
subject to disclosure under the standards provided in the Freedom of
Information Act (FOIA, (5 U.S.C. 552 et seq.)). In addition, the final
determinations of the Special Master shall be disclosed to the public.
The Special Master shall promulgate procedures for ensuring that
disclosed materials have been subject to appropriate redaction to
protect personal privacy, privileged or confidential commercial or
financial information or other appropriate redactions permissible under
the FOIA, which may include a procedure for the person or entity making
the submission to request redactions and to review and request
reconsideration of any proposed redactions before such redacted
materials are released.



Sec. 30.17  Q-17: How do the effective date provisions apply with
respect to the requirements under section 111 of EESA?

    (a) General rule. The requirements under this part with respect to
sections 111(b), 111(c), 111(d) and 111(f) are effective upon June 15,
2009. The guidance under this part with respect to those sections
supersedes any previous guidance applicable to a TARP recipient to the
extent that guidance is inconsistent with those requirements, but
supersedes that guidance only as of June 15, 2009. To the extent
previous contractual provisions are not inconsistent with ARRA or the
guidance under this part, those contractual provisions remain in effect
and continue to apply in accordance with their terms.
    (b) Bonus payment limitation. The bonus payment limitation provision
under Sec. 30.10 (Q-10) of this part does not apply to bonus payments
paid or accrued by TARP recipients or their employees before June 15,
2009. Certain bonus payments may relate to a service period beginning
before and ending after June 15, 2009. In these circumstances, the
employee will not be treated as having accrued the bonus payment on or
after June 15, 2009 if the bonus payment is at least reduced to reflect
the portion of the service period that occurs after June 15, 2009. If
the employee is an SEO or most highly compensated employee at the time
the net bonus payment after such reduction would otherwise be paid, the
amount still may not be paid until such time as bonus payments to that
employee are permitted.



PART 31_TROUBLED ASSET RELIEF PROGRAM--Table of Contents



Sec.
31.1 General.

Subpart A [Reserved]

                     Subpart B_Conflicts of Interest

31.200 Purpose and scope.
31.201 Definitions.
31.211 Organizational conflicts of interest.
31.212 Personal conflicts of interest.
31.213 General standards.
31.214 Limitations on concurrent activities.
31.215 Grant of waivers.
31.216 Communications with Treasury employees.
31.217 Confidentiality of information.
31.218 Enforcement.

    Authority: 31 U.S.C. 321; Pub. L. 110-343; 122 Stat. 3765.

    Source: 76 FR 61049, Oct. 3, 2011, unless otherwise noted.



Sec. 31.1  General.

    This part sets forth regulations to implement and administer the
Emergency Economic Stabilization Act of 2008 (Pub. L. 110-343; 122 Stat.
3765).

Subpart A [Reserved]



                     Subpart B_Conflicts of Interest



Sec. 31.200  Purpose and scope.

    (a) Purpose. This regulation sets forth standards to address and
manage or to prohibit conflicts of interest that may arise in connection
with the administration and execution of the authorities under the
Troubled Asset Relief Program (TARP), established under sections 101 and
102 of the Emergency Economic Stabilization Act of 2008 (EESA).
    (b) Scope. This regulation addresses actual and potential conflicts
of interest, or circumstances that give rise to the appearance of a
conflict of interest,

[[Page 355]]

that may arise from contracts and financial agency agreements between
private sector entities and the Treasury for services under the TARP,
other than administrative services identified by the TARP Chief
Compliance Officer.



Sec. 31.201  Definitions.

    As used in this part:
    Arrangement means a contract or financial agency agreement between a
private sector entity and the Treasury for services under the TARP,
other than administrative services identified by the TARP Chief
Compliance Officer.
    Dependent child means a son, daughter, stepson or stepdaughter who
is either (a) Unmarried, under age 21, and living in the individual's
house, or (b) considered a ``dependent'' of the individual under the
U.S. tax code.
    EESA means the Emergency Economic Stabilization Act of 2008, as
amended.
    Key individual means an individual providing services to a private
sector entity who participates personally and substantially, through,
for example, decision, approval, disapproval, recommendation, or the
rendering of advice, in the negotiation or performance of, or monitoring
for compliance under, the arrangement with the Treasury. For purposes of
the definition of key individual, the words ``personally and
substantially'' shall have the same meaning and interpretation as such
words have in 5 CFR 2635.402(b)(4).
    Organizational conflict of interest means a situation in which the
retained entity has an interest or relationship that could cause a
reasonable person with knowledge of the relevant facts to question the
retained entity's objectivity or judgment to perform under the
arrangement, or its ability to represent the Treasury. Without limiting
the scope of this definition, organizational conflicts of interest may
include the following situations:
    (1) A prior or current arrangement between the Treasury and the
retained entity that may give the retained entity an unfair competitive
advantage in obtaining a new arrangement with Treasury.
    (2) The retained entity is, or represents, a party in litigation
against the Treasury relating to activities under the EESA.
    (3) The retained entity provides services for Treasury relating to
the acquisition, valuation, disposition, or management of troubled
assets at the same time it provides those services for itself or others.
    (4) The retained entity gains, or stands to gain, an unfair
competitive advantage in private business arrangements or investments by
using information provided under an arrangement or obtained or developed
pursuant to an arrangement with Treasury.
    (5) The retained entity is a potential candidate for relief under
EESA, is currently participating in an EESA program, or has a financial
interest that could be affected by its performance of the arrangement.
    (6) The retained entity maintains a business or financial
relationship with institutions that have received funds from Treasury
pursuant to the EESA.
    Personal conflict of interest means a personal, business, or
financial interest of an individual, his or her spouse or any dependent
child that could adversely affect the individual's ability to perform
under the arrangement, his or her objectivity or judgment in such
performance, or his or her ability to represent the interests of the
Treasury.
    Related entity means the parent company and subsidiaries of a
retained entity, any entity holding a controlling interest in the
retained entity, and any entity in which the retained entity holds a
controlling interest.
    Retained entity means the individual or entity seeking an
arrangement with the Treasury or having such an arrangement with the
Treasury, but does not include special government employees. A
``retained entity'' includes the subcontractors and consultants it hires
to perform services under the arrangement.
    Special government employee means an officer or employee serving the
Treasury, serving with or without compensation, for a period not to
exceed 130 days during any 365-day period on a full-time or intermittent
basis.
    Treasury means the United States Department of the Treasury.
    Treasury employee means an officer or employee of the Treasury,
including a

[[Page 356]]

special government employee, or an employee of any other government
agency who is properly acting on behalf of the Treasury.
    Troubled assets, for purposes of this rule, shall have the same
meaning as set forth in 12 U.S.C. 5202(9).



Sec. 31.211  Organizational conflicts of interest.

    (a) Retained entity's responsibility. A retained entity working
under an arrangement shall not permit an actual or potential
organizational conflict of interest (including a situation in which the
retained entity has an interest or relationship that could cause a
reasonable person with knowledge of the relevant facts to question the
retained entity's objectivity or judgment to perform under the
arrangement or its ability to represent the Treasury), unless the
conflict has been disclosed to Treasury under this Section and mitigated
under a plan approved by Treasury, or Treasury has waived the conflict.
With respect to arrangements for the acquisition, valuation, management,
or disposition of troubled assets, the retained entity shall maintain a
compliance program reasonably designed to detect and prevent violations
of federal securities laws and organizational conflicts of interest.
    (b) Information required about the retained entity. As early as
possible before entering an arrangement to perform services for Treasury
under the EESA, a retained entity shall provide Treasury with sufficient
information to evaluate any organizational conflicts of interest. The
information shall include the following:
    (1) The retained entity's relationship to any related entities.
    (2) The categories of troubled assets owned or controlled by the
retained entity and its related entities, if the arrangement relates to
the acquisition, valuation, disposition, or management of troubled
assets.
    (3) Information concerning all other business or financial interests
of the retained entity, its proposed subcontractors, or its related
entities, which could conflict with the retained entity's obligations
under the arrangement with Treasury.
    (4) A description of all organizational conflicts of interest and
potential conflicts of interest.
    (5) A written detailed plan to mitigate all organizational conflicts
of interest, along with supporting documents.
    (6) Any other information or documentation about the retained
entity, its proposed subcontractors, or its related entities that
Treasury may request.
    (c) Plans to mitigate organizational conflicts of interest. The
steps necessary to mitigate a conflict may depend on a variety of
factors, including the type of conflict, the scope of work under the
arrangement, and the organizational structure of the retained entity.
Some conflicts may be so substantial and pervasive that they cannot be
mitigated. Retained entities should consider the following measures when
designing a mitigation plan:
    (1) Adopting, implementing, and enforcing appropriate information
barriers to prevent unauthorized people from learning nonpublic
information relating to the arrangement and isolate key individuals from
learning how their performance under the arrangement could affect the
financial interests of the retained entity, its clients, and related
entities.
    (2) Divesting assets that give rise to conflicts of interest.
    (3) Terminating or refraining from business relationships that give
rise to conflicts of interest.
    (4) If consistent with the terms of the arrangement and permitted by
Treasury, refraining from performing specific types of work under the
arrangement.
    (5) Any other steps appropriate under the circumstances.
    (d) Certification required. When the retained entity provides the
information required by paragraph (b) of this section, the retained
entity shall certify that the information is complete and accurate in
all material respects.
    (e) Determination required. Prior to entering into any arrangement,
the Treasury must conclude that no organizational conflict of interest
exists that has not been adequately mitigated, or if a conflict cannot
be adequately mitigated, that Treasury has

[[Page 357]]

expressly waived it. Once Treasury has approved a conflicts mitigation
plan, the plan becomes an enforceable term under the arrangement.
    (f) Subsequent notification. The retained entity has a continuing
obligation to search for, report, and mitigate any and all potential
organizational conflicts of interest that have not already been
disclosed to Treasury under a plan approved by Treasury or previously
waived by Treasury. The retained entity shall search regularly for
conflicts and shall, within five (5) business days after learning of a
potential organizational conflict of interest, disclose the potential
conflict of interest in writing to the TARP Chief Compliance Officer.
The disclosure shall describe the steps it has taken or proposes to take
to mitigate the potential conflict or request a waiver from Treasury.
    (g) Periodic Certification. No later than one year after the
arrangement's effective date, and at least annually thereafter, the
retained entity shall certify in writing that it has no organizational
conflicts of interest, or explain in detail the extent to which it can
certify, and describe the actions it has taken and plans to take to
mitigate any conflicts. Treasury may require more frequent
certifications, depending on the arrangement.
    (h) Retention of information. A retained entity shall retain the
information needed to comply with this section and to support the
certifications required by this section for three (3) years following
termination or expiration of the arrangement, and shall make that
information available to Treasury upon request. Such retained
information shall include, but is not limited to, written documentation
regarding the factors the retained entity considered in its mitigation
plan as well as written documentation addressing the results of the
retained entities' periodic review of the mitigation plan.



Sec. 31.212  Personal conflicts of interest.

    (a) Retained entity's responsibility. A retained entity shall ensure
that all key individuals have no personal conflicts of interest
(including a situation that would cause a reasonable person with
knowledge of the relevant facts to question the individual's ability to
perform, his or her objectivity or judgment in such performance, or his
or her ability to represent the interests of the Treasury), unless
mitigation measures have neutralized the conflict, or Treasury has
waived the conflict.
    (b) Information required. Before key individuals begin work under an
arrangement, a retained entity shall obtain information from each of
them in writing about their personal, business, and financial
relationships, as well as those of their spouses and dependent children
that would cause a reasonable person with knowledge of the relevant
facts to question the individual's ability to perform, his or her
objectivity or judgment in such performance, or his or her ability to
represent the interests of the Treasury. When the arrangement concerns
the acquisition, valuation, management, or disposition of troubled
assets, the information shall be no less extensive than that required of
certain new federal employees under Office of Government Ethics Form
450. Treasury may extend the time necessary to meet these requirements
in urgent and compelling circumstances.
    (c) Disqualification. The retained entity shall disqualify key
individuals with personal conflicts of interest from performing work
pursuant to the arrangement unless mitigation measures have neutralized
the conflict to the satisfaction of the TARP Chief Compliance Officer.
The retained entity may seek a waiver from the TARP Chief Compliance
Officer to allow a key individual with a personal conflict of interest
to work under the arrangement.
    (d) Initial certification. No later than ten business days after the
effective date of the arrangement, the retained entity shall certify to
the Treasury that all key individuals performing services under the
arrangement have no personal conflicts of interest, or are subject to a
mitigation plan or waiver approved by Treasury. In making this
certification, the retained entity may rely on the information obtained
pursuant to paragraph (b) of this section, unless the retained entity
knows or should have known that the information provided is false or
inaccurate. Treasury may extend the time necessary to meet these
requirements

[[Page 358]]

where the retained entity has a large number of key individuals, or in
other appropriate circumstances.
    (e) Periodic certification. No later than one year after the
arrangement's effective date, and at least annually thereafter, the
retained entity shall renew the certification required by paragraph (d)
of this section. The retained entity shall provide more frequent
certifications to Treasury when requested.
    (f) Retained entities' responsibilities. The retained entity shall
adopt and implement procedures designed to search for, report, and
mitigate personal conflicts of interest on a continuous basis.
    (g) Subsequent notification. Within five business days after
learning of a personal conflict of interest, the retained entity shall
notify Treasury of the conflict and describe the steps it has taken and
will take in the future to neutralize the conflict.
    (h) Retention of information. A retained entity shall retain the
information needed to comply with this section and to support the
certifications required by this section for three years following
termination or expiration of the arrangement, and shall make that
information available to Treasury upon request.



Sec. 31.213  General standards.

    (a) During the time period in which a retained entity is seeking an
arrangement and during the term of any arrangement:
    (1) The retained entity's officers, partners, or employees
performing work under the arrangement shall not accept or solicit
favors, gifts, or other items of monetary value above $20 from any
individual or entity whom the retained entity, officer, partner, or
employee knows is seeking official action from the Treasury in
connection with the arrangement or has interests which may be
substantially affected by the performance or nonperformance of duties to
the Treasury under the arrangement, provided that the total value of
gifts from the same person or entity does not exceed $50 in any calendar
year.
    (2) The retained entity and its officers and partners, and its
employees shall not improperly use or allow the improper use of Treasury
property for the personal benefit of any individual or entity other than
the Treasury.
    (3) The retained entity and its officers and partners, and its
employees shall not make any unauthorized promise or commitment on
behalf of the Treasury.
    (b) Any individual who acts for or on behalf of the Treasury
pursuant to an arrangement shall comply with 18 U.S.C. 201, which
generally prohibits the direct or indirect acceptance by a public
official of anything of value in return for being influenced in, or
because of, an official act. Violators are subject to criminal
penalties.
    (c) Any individual or entity that provides information or makes a
certification to the Treasury that is relating to services under EESA or
required pursuant to 31 CFR Part 31 is subject to 18 U.S.C. 1001, which
generally prohibits the making of any false or fraudulent statement to a
federal officer. Upon receipt of information indicating that any
individual or entity has violated any provision of title 18 of the U.S.
Code or other provision of criminal law, Treasury shall refer such
information to the Department of Justice and the Special Inspector
General for the Troubled Asset Relief Program (SIGTARP).
    (d) A retained entity shall disclose to the SIGTARP, any credible
evidence, in connection with the designation, services, or closeout of
the arrangement, that an employee, or contractor of the retained entity
has committed a violation of Federal criminal law involving fraud,
conflict of interest, bribery, or gratuity violations found in Title 18
of the United States Code, or a violation of the civil False Claims Act
(31 U.S.C. 3729-3733).



Sec. 31.214  Limitations on concurrent activities.

    Treasury has determined that certain market activities by a retained
entity during the arrangement are likely to cause impermissible
conflicts of interest. Accordingly, the following restrictions shall
apply unless waived pursuant to section 31.215, or Treasury agrees in
writing to specific mitigation measures.
    (a) If the retained entity assists Treasury in the acquisition,
valuation,

[[Page 359]]

management, or disposition of specific troubled assets, the retained
entity and key individuals shall not purchase or offer to purchase such
assets from Treasury, or assist anyone else in purchasing or offering to
purchase such troubled assets from the Treasury, during the term of its
arrangement.
    (b) If the retained entity advises Treasury with respect to a
program for the purchase of troubled assets, the retained entity and key
individuals shall not, during the term of the arrangement, sell or offer
to sell, or act on behalf of anyone with respect to a sale or offer to
sell, any asset to Treasury under the terms of that program.



Sec. 31.215  Grant of waivers.

    The TARP Chief Compliance Officer may waive a requirement under this
Part that is not otherwise imposed by law when it is clear from the
totality of the circumstances that a waiver is in the government's
interest.



Sec. 31.216  Communications with Treasury employees.

    (a) Prohibitions. During the course of any process for selecting a
retained entity (including any process using non-competitive
procedures), a retained entity participating in the process and its
representatives shall not:
    (1) Directly or indirectly make any offer or promise of future
employment or business opportunity to, or engage directly or indirectly
in any discussion of future employment or business opportunity with, any
Treasury employee with personal or direct responsibility for that
procurement.
    (2) Offer, give, or promise to offer or give, directly or
indirectly, any money, gratuity, or other thing of value to any Treasury
employee, except as permitted by the Standards of Conduct for Employees
of the Executive Branch, 5 CFR part 2635.
    (3) Solicit or obtain from any Treasury employee, directly or
indirectly, any information that is not public and was prepared for use
by Treasury for the purpose of evaluating an offer, quotation, or
response to enter into an arrangement.
    (b) Certification. Before a retained entity enters a new
arrangement, the retained entity must certify to the following:
    (1) The retained entity is aware of the prohibitions of paragraph
(a) of this section and, to the best of its knowledge after making
reasonable inquiry, the retained entity has no information concerning a
violation or possible violation of paragraph (a) of this section.
    (2) Each officer, employee, and representative of the retained
entity who participated personally and substantially in preparing and
submitting a bid, offer, proposal, or request for modification of the
arrangement has certified that he or she:
    (i) Is familiar with and will comply with the requirements of
paragraph (a) of this section; and
    (ii) Has no information of any violations or possible violations of
paragraph (a) of this section, and will report immediately to the
retained entity any subsequently gained information concerning a
violation or possible violation of paragraph (a) of this section.



Sec. 31.217  Confidentiality of information.

    (a) Nonpublic information defined. Any information that Treasury
provides to a retained entity under an arrangement, or that the retained
entity obtains or develops pursuant to the arrangement, shall be deemed
nonpublic until the Treasury determines otherwise in writing, or the
information becomes part of the body of public information from a source
other than the retained entity.
    (b) Prohibitions. The retained entity shall not:
    (1) Disclose nonpublic information to anyone except as required to
perform the retained entity's obligations pursuant to the arrangement,
or pursuant to a lawful court order or valid subpoena after giving prior
notice to Treasury.
    (2) Use or allow the use of any nonpublic information to further any
private interest other than as contemplated by the arrangement.
    (c) Retained entity's responsibility. A retained entity shall take
appropriate measures to ensure the confidentiality of nonpublic
information and to prevent its inappropriate use. The retained entity
shall document these

[[Page 360]]

measures in sufficient detail to demonstrate compliance, and shall
maintain this documentation for three years after the arrangement has
terminated. The retained entity shall notify the TARP Chief Compliance
Officer in writing within five business days of detecting a violation of
the prohibitions in paragraph (b), above. The security measures required
by this paragraph shall include:
    (1) Security measures to prevent unauthorized access to facilities
and storage containers where nonpublic information is stored.
    (2) Security measures to detect and prevent unauthorized access to
computer equipment and data storage devices that store or transmit
nonpublic information.
    (3) Periodic training to ensure that persons receiving nonpublic
information know their obligation to maintain its confidentiality and to
use it only for purposes contemplated by the arrangement.
    (4) Programs to ensure compliance with federal securities laws,
including laws relating to insider trading, when the arrangement relates
to the acquisition, valuation, management, or disposition of troubled
assets.
    (5) A certification from each key individual stating that he or she
will comply with the requirements in section 31.217(b). The retained
entity shall obtain this certification, in the form of a nondisclosure
agreement, before a key individual performs work under the arrangement,
and then annually thereafter.
    (d) Certification. No later than ten business days after the
effective date of the arrangement, the retained entity shall certify to
the Treasury that it has received a certification form from each key
individual stating that he or she will comply with the requirements in
Sec. 31.217(b). In making this certification, the retained entity may
rely on the information obtained pursuant to paragraph (b) of this
section, unless the retained entity knows or should have known that the
information provided is false or inaccurate.



Sec. 31.218  Enforcement.

    (a) Compliance with these rules concerning conflicts of interest is
of the utmost importance. In the event a retained entity or any
individual or entity providing information pursuant to 31 U.S.C. part 31
violates any of these rules, Treasury may impose or pursue one or more
of the following sanctions:
    (1) Rejection of work tainted by an organizational conflict of
interest or a personal conflict of interest and denial of payment for
that work.
    (2) Termination of the arrangement for default.
    (3) Debarment of the retained entity for Federal government
contracting and/or disqualification of the retained entity from future
financial agency agreements.
    (4) Imposition of any other remedy available under the terms of the
arrangement or at law.
    (5) In the event of violation of a criminal statute, referral to the
Department of Justice for prosecution of the retained entity and/or its
officers or employees. In such cases, the Department of Justice may make
direct and derivative use of any statements and information provided by
any entity, its representatives and employees or any individual, to the
extent permitted by law.
    (b) To the extent Treasury has discretion in selecting or imposing a
remedy, it will give significant consideration to a retained entity's
prompt disclosure of any violation of these rules.



PART 32_PAYMENTS IN LIEU OF LOW INCOME HOUSING TAX CREDITS--Table of
Contents



    Authority: Public Law 111-5.



Sec. 32.1  Timing of disbursements.

    (a) State housing credit agencies that receive funds under section
1602 of Division B of the American Recovery and Reinvestment Tax Act of
2009 must make subawards to subawardees to finance the construction or
acquisition and rehabilitation of low-income housing no later than
December 31, 2010. Any funds that are not used to make subawards by
December 31, 2010, must be returned to the Treasury by January 1, 2011.
    (b) The requirement in subsection (a) above does not prevent State
housing

[[Page 361]]

credit agencies from continuing to disburse funds to subawardees after
December 31, 2010 provided:
    (1) A subaward has been made to the subawardee on or before December
31, 2010;
    (2) The subawardee has, by the close of 2010, paid or incurred at
least 30 percent of the subawardee's total adjusted basis in land and
depreciable property that is reasonably expected to be part of the low-
income housing project; and
    (3) Any funds not disbursed to the subawardee by December 31, 2011,
must be returned to the Treasury by January 1, 2012.

[74 FR 44752, Aug. 31, 2009]



PART 33_WAIVERS FOR STATE INNOVATION--Table of Contents



Sec.
33.100 Basis and purpose.
33.102 Coordinated waiver process.
33.104 Definitions.
33.108 Application procedures.
33.112 State public notice requirements.
33.116 Federal public notice and approval process.
33.120 Monitoring and compliance.
33.124 State reporting requirements.
33.128 Periodic evaluation requirements.

    Authority: Sec. 1332, Pub. L. 111-148, 124 Stat. 119.

    Source: 77 FR 11715, Feb. 27, 2012, unless otherwise noted.



Sec. 33.100  Basis and purpose.

    (a) Statutory basis. This part implements provisions of section 1332
of the Patient Protection and Affordable Care Act (Affordable Care Act),
Public Law 111-148, relating to Waivers for State Innovation, which the
Secretary may authorize for plan years beginning on or after January 1,
2017. Section 1332 of the Affordable Care Act requires the Secretary to
issue regulations that provide for all of the following:
    (1) A process for public notice and comment at the State level,
including public hearings, sufficient to ensure a meaningful level of
public input.
    (2) A process for the submission of an application that ensures the
disclosure of all of the following:
    (i) The provisions of law that the State involved seeks to waive.
    (ii) The specific plans of the State to ensure that the waiver will
meet all requirements specified in section 1332 of the Affordable Care
Act.
    (3) A process for the provision of public notice and comment after a
waiver application is received by the Secretary of Health and Human
Services, that is sufficient to ensure a meaningful level of public
input and that does not impose requirements that are in addition to, or
duplicative of, requirements imposed under the Administrative Procedures
Act, or requirements that are unreasonable or unnecessarily burdensome
with respect to State compliance.
    (4) A process for the submission of reports to the Secretary by a
State relating to the implementation of a waiver.
    (5) A process for the periodic evaluation by the Secretary of
programs under waivers.
    (b) Purpose. This part sets forth certain procedural requirements
for Waivers for State Innovation under section 1332 of the Affordable
Care Act.



Sec. 33.102  Coordinated waiver process.

    (a) Coordination with applications for waivers under other Federal
laws. A State may submit a single application to the Secretary of Health
and Human Services for a waiver under section 1332 of the Affordable
Care Act and a waiver under one or more of the existing waiver processes
applicable under titles XVIII, XIX, and XXI of the Social Security Act,
or under any other Federal law relating to the provision of health care
items or services, provided that such application is consistent with the
procedures described in this part, the procedures for demonstrations
under section 1115 of the Social Security Act, if applicable, and the
procedures under any other applicable Federal law under which the State
seeks a waiver.
    (b) Coordinated process for section 1332 waivers. A State seeking a
section 1332 waiver must submit a waiver application to the Secretary of
Health and Human Services. Any application submitted to the Secretary of
Health and Human Services that requests to waive sections 36B, 4980H, or
5000A of the Internal Revenue Code, in accordance with section
1332(a)(2)(D) of the Affordable Care Act, shall upon receipt be

[[Page 362]]

transmitted by the Secretary of Health and Human Services to the
Secretary to be reviewed in accordance with this part.



Sec. 33.104  Definitions.

    For the purposes of this part:
    Complete application means an application that has been submitted
and for which the Secretary and the Secretary of Health and Human
Services have made a preliminary determination that it includes all
required information and satisfies all requirements that are described
in Sec. 33.108(f).
    Public notice means a notice issued by a government agency or
legislative body that contains sufficient detail to notify the public at
large of a proposed action consistent with Sec. 33.112.
    Section 1332 waiver means a Waiver for State Innovation under
section 1332 of the Affordable Care Act.



Sec. 33.108  Application procedures.

    (a) Acceptable formats for applications. Applications for initial
approval of a section 1332 waiver shall be submitted in electronic
format to the Secretary of Health and Human Services.
    (b) Application timing. Applications for initial approval of a
section 1332 waiver must be submitted sufficiently in advance of the
requested effective date to allow for an appropriate implementation
timeline.
    (c) Preliminary review. Each application for a section 1332 waiver
will be subject to a preliminary review by the Secretary and the
Secretary of Health and Human Services, who will make a preliminary
determination that the application is complete. A submitted application
will not be deemed received until the Secretary and the Secretary of
Health and Human Services have made the preliminary determination that
the application is complete.
    (1) The Secretary and the Secretary of Health and Human Services
will complete the preliminary review of the application within 45 days
after it is submitted.
    (2) If the Secretary and the Secretary of Health and Human Services
determine that the application is not complete, the Secretary of Health
and Human Services will send the State a written notice of the elements
missing from the application.
    (3) The preliminary determination that an application is complete
does not preclude a finding during the 180-day Federal decision-making
period that a necessary element of the application is missing or
insufficient.
    (d) Notification of preliminary determination. Upon making the
preliminary determination that an application is complete, as defined in
this part, the Secretary of Health and Human Services will send the
State a written notice informing the State that the Secretary and the
Secretary of Health and Human Services have made such a preliminary
determination. That date will also mark the beginning of the Federal
public notice process and the 180-day Federal decision-making period.
    (e) Public notice of completed application. Upon receipt of a
complete application for an initial section 1332 waiver, the Secretary
of Health and Human Services will--
    (1) Make available to the public the application, and all related
State submissions, including all supplemental information received from
the State following the receipt of a complete application for a section
1332 waiver.
    (2) Indicate the status of the application.
    (f) Criteria for a complete application. An application for initial
approval of a section 1332 waiver will not be considered complete unless
the application meets all of the following conditions:
    (1) Complies with paragraphs (a) through (f) of this section.
    (2) Provides written evidence of the State's compliance with the
public notice requirements set forth in Sec. 33.112, including a
description of the key issues raised during the State public notice and
comment period.
    (3) Provides all of the following:
    (i) A comprehensive description of the State legislation and program
to implement a plan meeting the requirements for a waiver under section
1332;
    (ii) A copy of the enacted State legislation that provides the State
with authority to implement the proposed waiver, as required under
section 1332(a)(1)(C) of the Affordable Care Act;

[[Page 363]]

    (iii) A list of the provisions of law that the State seeks to waive,
including a description of the reason for the specific requests; and
    (iv) The analyses, actuarial certifications, data, assumptions,
analysis, targets and other information set forth in paragraph (f)(4) of
this section sufficient to provide the Secretary and the Secretary of
Health and Human Services with the necessary data to determine that the
State's proposed waiver:
    (A) As required under section 1332(b)(1)(A) of the Affordable Care
Act (the comprehensive coverage requirement), will provide coverage that
is at least as comprehensive as the coverage defined in section 1302(b)
of the Affordable Care Act and offered through Exchanges established
under the Affordable Care Act as certified by the Office of the Actuary
of the Centers for Medicare & Medicaid Services based on sufficient data
from the State and from comparable States about their experience with
programs created by the Affordable Care Act and the provisions of the
Affordable Care Act that the State seeks to waive;
    (B) As required under section 1332(b)(1)(B) of the Affordable Care
Act (the affordability requirement), will provide coverage and cost
sharing protections against excessive out-of-pocket spending that are at
least as affordable as the provisions of Title I of the Affordable Care
Act would provide;
    (C) As required under section 1332(b)(1)(C) of the Affordable Care
Act (the scope of coverage requirement), will provide coverage to at
least a comparable number of its residents as the provisions of Title I
of the Affordable Care Act would provide; and
    (D) As prohibited under section 1332(b)(1)(D) of the Affordable Care
Act (the Federal deficit requirement), will not increase the Federal
deficit.
    (4) Contains the following supporting information:
    (i) Actuarial analyses and actuarial certifications. Actuarial
analyses and actuarial certifications to support the State's estimates
that the proposed waiver will comply with the comprehensive coverage
requirement, the affordability requirement, and the scope of coverage
requirement.
    (ii) Economic analyses. Economic analyses to support the State's
estimates that the proposed waiver will comply with the comprehensive
coverage requirement, the affordability requirement, the scope of
coverage requirement and the Federal deficit requirement, including:
    (A) A detailed 10-year budget plan that is deficit neutral to the
Federal government, as prescribed by section 1332(a)(1)(B)(ii) of the
Affordable Care Act, and includes all costs under the waiver, including
administrative costs and other costs to the Federal government, if
applicable; and
    (B) A detailed analysis regarding the estimated impact of the waiver
on health insurance coverage in the State.
    (iii) Data and assumptions. The data and assumptions used to
demonstrate that the State's proposed waiver is in compliance with the
comprehensive coverage requirement, the affordability requirement, the
scope of coverage requirement and the Federal deficit requirement,
including:
    (A) Information on the age, income, health expenses and current
health insurance status of the relevant State population; the number of
employers by number of employees and whether the employer offers
insurance; cross-tabulations of these variables; and an explanation of
data sources and quality; and
    (B) An explanation of the key assumptions used to develop the
estimates of the effect of the waiver on coverage and the Federal
budget, such as individual and employer participation rates, behavioral
changes, premium and price effects, and other relevant factors.
    (iv) Implementation timeline. A detailed draft timeline for the
State's implementation of the proposed waiver.
    (v) Additional information. Additional information supporting the
State's proposed waiver, including:
    (A) An explanation as to whether the waiver increases or decreases
the administrative burden on individuals, insurers, and employers, and
if so, how and why;
    (B) An explanation of how the waiver will affect the implementation
of the provisions of the Affordable Care Act which the State is not
requesting to

[[Page 364]]

waive in the State and at the Federal level;
    (C) An explanation of how the waiver will affect residents who need
to obtain health care services out-of-State, as well as the States in
which such residents may seek such services;
    (D) If applicable, an explanation as to how the State will provide
the Federal government with all information necessary to administer the
waiver at the Federal level; and
    (E) An explanation of how the State's proposal will address
potential individual, employer, insurer, or provider compliance, waste,
fraud and abuse within the State or in other States.
    (vi) Reporting targets. Quarterly, annual, and cumulative targets
for the comprehensive coverage requirement, the affordability
requirement, the scope of coverage requirement, and the Federal deficit
requirement.
    (vii) Other information. Other information consistent with guidance
provided by the Secretary and the Secretary of Health and Human
Services.
    (g) Additional supporting information. (1) During the Federal review
process, the Secretary may request additional supporting information
from the State via the Secretary of Health and Human Services as needed
to address public comments or to address issues that arise in reviewing
the application.
    (2) Requests for additional information, and responses to such
requests, will be made available to the public in the same manner as
information described in Sec. 33.116(b).



Sec. 33.112  State public notice requirements.

    (a) General. (1) Prior to submitting an application for a new
section 1332 waiver to the Secretary of Health and Human Services for
review and consideration, a State must provide a public notice and
comment period sufficient to ensure a meaningful level of public input
for the application for a section 1332 waiver.
    (2) Such public notice and comment period shall include, for a State
with one or more Federally-recognized Indian tribes within its borders,
a separate process for meaningful consultation with such tribes.
    (b) Public notice and comment period. The State shall make available
at the beginning of the public notice and comment period, through its
Web site or other effective means of communication, and shall update as
appropriate, a public notice that includes all of the following:
    (1) A comprehensive description of the application for a section
1332 waiver to be submitted to the Secretary of Health and Human
Services including information and assurances related to all statutory
requirements and other information consistent with guidance provided by
the Secretary and the Secretary of Health and Human Services.
    (2) Information relating to where copies of the application for a
section 1332 waiver are available for public review and comment.
    (3) Information relating to how and where written comments may be
submitted and reviewed by the public, and the timeframe during which
comments will be accepted.
    (4) The location, date, and time of public hearings that will be
convened by the State to seek public input on the application for a
section 1332 waiver.
    (c) Public hearings. (1) After issuing the public notice and prior
to submitting an application for a new section 1332 waiver, a State must
conduct public hearings regarding the State's application.
    (2) Such public hearings shall provide an interested party the
opportunity to learn about and comment on the contents of the
application for a section 1332 waiver.
    (d) Submission of initial application. After the State public notice
and comment period has concluded, the State may submit an application to
the Secretary of Health and Human Services for an initial waiver in
accordance with the requirements set forth in Sec. 33.108.



Sec. 33.116  Federal public notice and approval process.

    (a) General. The Federal public notice and approval process begins
on the first business day after the Secretary and the Secretary of
Health and Human Services determine that all elements

[[Page 365]]

for a complete application were documented and submitted to the
Secretary of Health and Human Services.
    (b) Public notice and comment period. (1) Following a determination
that a State's application for a section 1332 waiver is complete, the
Secretary and the Secretary of Health and Human Services will provide
for a public notice and comment period that is sufficient to ensure a
meaningful level of public input and that does not impose requirements
that are in addition to, or duplicative of, requirements imposed under
the Administrative Procedures Act, or requirements that are unreasonable
or unnecessarily burdensome with respect to State compliance.
    (2) At the beginning of the Federal notice and comment period, the
Secretary of Health and Human Services will make available through its
Web site and otherwise, and shall update as appropriate, public notice
that includes all of the following:
    (i) The complete application for a section 1332 waiver, updates for
the status of the State's application, and any supplemental materials
received from the State prior to and during the Federal public notice
and comment period.
    (ii) Information relating to where copies of the application for a
section 1332 waiver are available for public review and comment.
    (iii) Information relating to how and where written comments may be
submitted and reviewed by the public, and the timeframe during which
comments will be accepted.
    (iv) Any public comments received during the Federal public notice
and comment period.
    (c) Approval of a section 1332 waiver application. The final
decision of the Secretary and the Secretary of Health and Human Services
on a State application for a section 1332 waiver will be issued by the
Secretary of Health and Human Services no later than 180 days after the
determination by the Secretary and the Secretary of Health and Human
Services that a complete application was received in accordance with
Sec. 33.108.



Sec. 33.120  Monitoring and compliance.

    (a) General. (1) Following the issuance of a final decision to
approve a section 1332 waiver by the Secretary and the Secretary of
Health and Human Services, a State must comply with all applicable
Federal laws, regulations, interpretive policy statements and
interpretive guidance unless expressly waived. A State must, within the
timeframes specified in law, regulation, policy, or guidance, come into
compliance with any changes in Federal law, regulation, or policy
affecting section 1332 waivers, unless the provision changed is
expressly waived.
    (2) A State must comply with the terms and conditions of the
agreement between the Secretary, the Secretary of Health and Human
Services, and the State to implement a section 1332 waiver.
    (b) Implementation reviews. (1) The terms and conditions of an
approved section 1332 waiver will provide that the State will perform
periodic reviews of the implementation of the section 1332 waiver.
    (2) The Secretary and the Secretary of Health and Human Services
will review documented complaints that a State is failing to comply with
requirements specified in the terms and conditions of any approved
section 1332 waiver.
    (3) The Secretary and the Secretary of Health and Human Services
will promptly share with a State any complaint that the Secretary and
the Secretary of Health and Human Services has received and will also
provide notification of any applicable monitoring and compliance issues.
    (c) Post award. Within 6 months after the implementation date of a
section 1332 waiver and annually thereafter, a State must hold a public
forum to solicit comments on the progress of a section 1332 waiver. The
State must hold the public forum at which members of the public have an
opportunity to provide comments and must provide a summary of the forum
to the Secretary of Health and Human Services as part of the quarterly
report specified in Sec. 33.124(a) that is associated with the quarter
in which the forum was held, as well as in the annual report specified
in Sec. 33.124(b) that is associated with the year in which the forum
was held.
    (1) The State must publish the date, time, and location of the
public forum

[[Page 366]]

in a prominent location on the State's public Web site, at least 30 days
prior to the date of the planned public forum.
    (2) [Reserved]
    (d) Terminations and suspensions. The Secretary and the Secretary of
Health and Human Services reserve the right to suspend or terminate a
section 1332 waiver in whole or in part, at any time before the date of
expiration, whenever the Secretaries determine that a State has
materially failed to comply with the terms of a section 1332 waiver.
    (e) Closeout costs. If all or part of a section 1332 waiver is
terminated or suspended, or if a portion of a section 1332 waiver is
withdrawn, Federal funding is limited to normal closeout costs
associated with an orderly termination, suspension, or withdrawal,
including service costs during any approved transition period, and
administrative costs of disenrolling participants.
    (f) Federal evaluators. (1) A State must fully cooperate with the
Secretary, the Secretary of Health and Human Services, or an independent
evaluator selected by the Secretary or the Secretary of Health and Human
Services to undertake an independent evaluation of any component of a
section 1332 waiver.
    (2) As part of this required cooperation, a State must submit all
requested data and information to the Secretary, the Secretary of Health
and Human Services, or the independent evaluator.



Sec. 33.124  State reporting requirements.

    (a) Quarterly reports. A State must submit quarterly reports to the
Secretary of Health and Human Services in accordance with the terms and
conditions of the State's section 1332 waiver. These quarterly reports
must include, but are not limited to, reports of any ongoing operational
challenges and plans for and results of associated corrective actions.
    (b) Annual reports. A State must submit an annual report to the
Secretary of Health and Human Services documenting all of the following:
    (1) The progress of the section 1332 waiver.
    (2) Data on compliance with section 1332(b)(1)(A) through (D) of the
Affordable Care Act.
    (3) A summary of the annual post-award public forum, held in
accordance with Sec. 33.120(c), including all public comments received
at such forum regarding the progress of the section 1332 waiver and
action taken in response to such concerns or comments.
    (4) Other information consistent with the State's approved terms and
conditions.
    (c) Submitting and publishing annual reports. A State must submit a
draft annual report to the Secretary of Health and Human Services no
later than 90 days after the end of each waiver year, or as specified in
the waiver's terms and conditions.
    (1) Within 60 days of receipt of comments from the Secretary of
Health and Human Services, a State must submit to the Secretary of
Health and Human Services a final annual report for the waiver year.
    (2) The draft and final annual reports are to be published on a
State's public Web site within 30 days of submission to and approval by
the Secretary of Health and Human Services, respectively.



Sec. 33.128  Periodic evaluation requirements.

    (a) The Secretary and the Secretary of Health and Human Services
shall periodically evaluate the implementation of a program under a
section 1332 waiver consistent with guidance published by the Secretary
and the Secretary of Health and Human Services and any terms and
conditions governing the section 1332 waiver.
    (b) Each periodic evaluation must include a review of the annual
report or reports submitted by the State in accordance with Sec. 33.124
that relate to the period of time covered by the evaluation.



PART 50_TERRORISM RISK INSURANCE PROGRAM--Table of Contents



                      Subpart A_General Provisions

Sec.
50.1 Authority, purpose and scope.
50.2 Responsible office.
50.4 Mandatory participation in Program.

[[Page 367]]

50.5 Definitions.
50.6 Rules of construction for dates.
50.7 Special rules for Interim Guidance Safe Harbors.
50.8 Procedure for requesting determinations of controlling influence.
50.9 Procedure for requesting general interpretations of statute.

         Subpart B_Disclosures as Conditions for Federal Payment

50.10 General disclosure requirements.
50.11 Definition.
50.12 Clear and conspicuous disclosure.
50.13 Offer, purchase, and renewal.
50.14 Separate line item.
50.15 Cap disclosure.
50.17 Use of model forms.
50.18 Notice required by reinstatement provision.
50.19 General disclosure requirements for State residual market
          insurance entities and State workers' compensation funds.

                    Subpart C_Mandatory Availability

50.20 General mandatory availability requirements.
50.21 Make available.
50.23 No material difference from other coverage.
50.24 Applicability of State law requirements.

      Subpart D_State Residual Market Insurance Entities; Workers'
                           Compensation Funds

50.30 General participation requirements.
50.33 Entities that do not share profits and losses with private sector
          insurers.
50.35 Entities that share profits and losses with private sector
          insurers.
50.36 Allocation of premium income associated with entities that do
          share profits and losses with private sector insurers.

Subpart E--Self-Insurance Arrangements; Captives [Reserved]

                       Subpart F_Claims Procedures

50.50 Federal share of compensation.
50.51 Adjustments to the Federal share of compensation.
50.52 Initial Notice of Insured Loss.
50.53 Loss certifications.
50.54 Payment of Federal share of compensation.
50.55 Determination of Affiliations.

              Subpart G_Audit and Investigative Procedures

50.60 Audit Authority
50.61 Recordkeeping

              Subpart H_Recoupment and Surcharge Procedures

50.70 Mandatory and discretionary recoupment.
50.71 Determination of recoupment amounts.
50.72 Establishment of Federal Terrorism Policy Surcharge.
50.73 Notification of recoupment.
50.74 Collecting the surcharge.
50.75 Remitting the surcharge.
50.76 Insurer responsibility.

       Subpart I_Federal cause of action; Approval of settlements

50.80 Federal cause of action and remedy.
50.81 State causes of action preempted.
50.82 Advance approval of settlements.
50.83 Procedure for requesting approval of proposed settlements.
50.84 Subrogation.
50.85 Amendment related to settlement approval.

                    Subpart J_Cap on Annual Liability

50.90 Cap on annual liability.
50.91 Notice to Congress.
50.92 Determination of pro rata share.
50.93 Application of pro rata share.
50.94 Data call authority.
50.95 Final amount.

    Authority: 5 U.S.C. 301; 31 U.S.C. 321; Title I, Pub. L. 107-297,
116 Stat. 2322, as amended by Pub. L. 109-144, 119 Stat. 2660 and Pub.
L. 110-160, 121 Stat. 1839 (15 U.S.C. 6701 note).

    Source: 68 FR 9811, Feb. 28, 2003, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 50.1  Authority, purpose and scope.

    (a) Authority. This part is issued pursuant to authority in Title I
of the Terrorism Risk Insurance Act of 2002, Public Law 107-297, 116
Stat. 2322, as amended by the Terrorism Risk Insurance Extension Act of
2005, Public Law 109-144, 119 Stat. 2660, and the Terrorism Risk
Insurance Program Reauthorization Act of 2007, Public Law 110-160, 121
Stat. 1839.
    (b) Purpose. This Part contains rules prescribed by the Department
of the Treasury to implement and administer the Terrorism Risk Insurance
Program.

[[Page 368]]

    (c) Scope. This Part applies to insurers subject to the Act and
their policyholders.

[68 FR 9811, Feb. 28, 2003, as amended at 71 FR 27569, May 11, 2006; 73
FR 53363, Sept. 16, 2008]



Sec. 50.2  Responsible office.

    The office responsible for the administration of the Terrorism Risk
Insurance Act in the Department of the Treasury is the Terrorism Risk
Insurance Program Office. The Treasury Assistant Secretary for Financial
Institutions prescribes the regulations under the Act.

[68 FR 41264, July 11, 2003.]



Sec. 50.4  Mandatory participation in Program.

    Any entity that meets the definition of an insurer under the Act is
required to participate in the Program.



Sec. 50.5  Definitions.

    For purposes of this Part:
    (a) Act means the Terrorism Risk Insurance Act of 2002.
    (b) Act of terrorism--(1) In general. The term act of terrorism
means any act that is certified by the Secretary, in concurrence with
the Secretary of State and the Attorney General of the United States:
    (i) To be an act of terrorism;
    (ii) To be a violent act or an act that is dangerous to human life,
property, or infrastructure;
    (iii) To have resulted in damage within the United States, or
outside of the United States in the case of:
    (A) An air carrier (as defined in 49 U.S.C. 40102) or a United
States flag vessel (or a vessel based principally in the United States,
on which United States income tax is paid and whose insurance coverage
is subject to regulation in the United States); or
    (B) The premises of a United States mission; and
    (iv) To have been committed by an individual or individuals as part
of an effort to coerce the civilian population of the United States or
to influence the policy or affect the conduct of the United States
Government by coercion.
    (2) Limitations. The Secretary is not authorized to certify an act
as an act of terrorism if:
    (i) The act is committed as part of the course of a war declared by
the Congress (except with respect to any coverage for workers'
compensation); or
    (ii) property and casualty losses resulting from the act, in the
aggregate, do not exceed $5,000,000.
    (3) Judicial review precluded. The Secretary's certification of an
act of terrorism, or determination not to certify an act as an act of
terrorism, is final and is not subject to judicial review.
    (c)(1) Affiliate means, with respect to an insurer, any entity that
controls, is controlled by, or is under common control with the insurer.
An affiliate must itself meet the definition of insurer to participate
in the Program.
    (2) For purposes of paragraph (c)(1) of this section, an insurer has
control over another insurer for purposes of the Program if:
    (i) The insurer directly or indirectly or acting through one or more
other persons owns, controls, or has power to vote 25 percent or more of
any class of voting securities of the other insurer;
    (ii) The insurer controls in any manner the election of a majority
of the directors or trustees of the other insurer; or
    (iii) The Secretary determines, after notice and opportunity for
hearing, that an insurer directly or indirectly exercises a controlling
influence over the management or policies of the other insurer, even if
there is no control as defined in paragraph (c)(2)(i) or (c)(2)(ii) of
this section.
    (3) An insurer described in paragraph (c)(2)(i) or (c)(2)(ii) of
this section is conclusively deemed to have control.
    (4) For purposes of a determination of controlling influence under
paragraph (c)(2)(iii) of this section, if an insurer is not described in
paragraph (c)(2)(i) or (c)(2)(ii) of this section, the following
rebuttable presumptions will apply:
    (i) If an insurer controls another insurer under any State law, and
at least one of the factors listed in paragraph (c) (4)(iv) of this
section applies, there is a rebuttable presumption that the insurer that
has control under State law exercises a controlling influence

[[Page 369]]

over the management or policies of the other insurer for purposes of
paragraph (c)(2)(iii) of this section.
    (ii) If an insurer provides 25 percent or more of another insurer's
capital (in the case of a stock insurer), policyholder surplus (in the
case of a mutual insurer), or corporate capital (in the case of other
entities that qualify as insurers), and at least one of the factors
listed in paragraph (c)(4)(iv) of this section applies, there is a
rebuttable presumption that the insurer providing such capital,
policyholder surplus, or corporate capital exercises a controlling
influence over the management or policies of the receiving insurer for
purposes of paragraph (c)(2)(iii) of this section.
    (iii) If an insurer, at any time during a Program Year, supplies 25
percent or more of the underwriting capacity for that year to an insurer
that is a syndicate consisting of a group including incorporated and
individual unincorporated underwriters, and at least one of the factors
in paragraph (c)(4)(iv) of this section applies, there is a rebuttable
presumption that the insurer exercises a controlling influence over the
syndicate for purposes of paragraph (c)(2)(iii) of this section.
    (iv) If paragraphs (c)(4)(i) through (c)(4)(iii) of this section are
not applicable, but two or more of the following factors apply to an
insurer, with respect to another insurer, there is a rebuttable
presumption that the insurer exercises a controlling influence over the
management or policies of the other insurer for purposes of paragraph
(c)(2)(iii) of this section:
    (A) The insurer is one of the two largest shareholders of any class
of voting stock;
    (B) The insurer holds more than 35 percent of the combined debt
securities and equity of the other insurer;
    (C) The insurer is party to an agreement pursuant to which the
insurer possesses a material economic stake in the other insurer
resulting from a profit-sharing arrangement, use of common names,
facilities or personnel, or the provision of essential services to the
other insurer;
    (D) The insurer is party to an agreement that enables the insurer to
influence a material aspect of the management or policies of the other
insurer;
    (E) The insurer would have the ability, other than through the
holding of revocable proxies, to direct the votes of more than 25
percent of the other insurer's voting stock in the future upon the
occurrence of an event;
    (F) The insurer has the power to direct the disposition of more than
25 percent of a class of voting stock of the other insurer in a manner
other than a widely dispersed or public offering;
    (G) The insurer and/or the insurer's representative or nominee
constitute more than one member of the other insurer's board of
directors; or
    (H) The insurer or its nominee or an officer of the insurer serves
as the chairman of the board, chairman of the executive committee, chief
executive officer, chief operating officer, chief financial officer or
in any position with similar policymaking authority in the other
insurer.
    (5) An insurer that is not described in paragraph (c)(2)(i) or
(c)(2)(ii) of this section may request a hearing in which the insurer
may rebut a presumption of controlling influence under paragraph
(c)(4)(i) through (c)(4)(iv) of this section or otherwise request a
determination of controlling influence by presenting and supporting its
position through written submissions to Treasury, and in Treasury's
discretion, through informal oral presentations, in accordance with the
procedure in Sec. 50.8.
    (6) See Sec. 50.55 of this part for determination of an insurer's
affiliates for purposes of subpart F.
    (d) Aggregate Federal share of compensation means the aggregate
amount paid by Treasury for the Federal share of compensation for
insured losses in a Program Year.
    (e) Assessment period means a period, established by Treasury,
during which policyholders of property and casualty insurance policies
must pay, and insurers must collect, the Federal Terrorism Policy
Surcharge for remittance to Treasury.
    (f) Direct earned premium means direct earned premium for all
commercial property and casualty insurance issued by any insurer for
insurance against all losses, including losses from an act of terrorism,
occurring at the locations

[[Page 370]]

described in section 102(5)(A) and (B) of the Act.
    (1) State licensed or admitted insurers. For a State licensed or
admitted insurer that reports to the NAIC, direct earned premium is the
premium information for commercial property and casualty insurance
reported by the insurer on column 2 of the NAIC Exhibit of Premiums and
Losses of the NAIC Annual Statement (commonly known as Statutory Page
14). (See definition of property and casualty insurance.)
    (i) Premium information as reported to the NAIC should be included
in the calculation of direct earned premiums for purposes of the Program
only to the extent it reflects premiums for commercial property and
casualty insurance issued by the insurer against losses occurring at the
locations described in section 102(5)(A) and (B) of the Act.
    (ii) Premiums for personal property and casualty insurance
(insurance primarily designed to cover personal, family or household
risk exposures, with the exception of insurance written to insure 1 to 4
family rental dwellings owned for the business purpose of generating
income for the property owner), or premiums for any other insurance
coverage that does not meet the definition of commercial property and
casualty insurance, should be excluded in the calculation of direct
earned premiums for purposes of the Program.
    (iii) Personal property and casualty insurance coverage that
includes incidental coverage for commercial purposes is primarily
personal coverage, and therefore premiums may be fully excluded by an
insurer from the calculation of direct earned premium. For purposes of
the Program, commercial coverage is incidental if less than 25 percent
of the total direct earned premium is attributable to commercial
coverage. Commercial property and casualty insurance against losses
occurring at locations other than the locations described in section
102(5)(A) and (B) of the Act, or other insurance coverage that does not
meet the definition of commercial property and casualty insurance, but
that includes incidental coverage for commercial risk exposures at such
locations, is primarily not commercial property and casualty insurance,
and therefore premiums for such insurance may also be fully excluded by
an insurer from the calculation of direct earned premium. For purposes
of this section, commercial property and casualty insurance for losses
occurring at the locations described in section 102(5)(A) and (B) of the
Act is incidental if less than 25 percent of the total direct earned
premium for the insurance policy is attributable to coverage at such
locations. Also for purposes of this section, coverage for commercial
risk exposures is incidental if it is combined with coverages that
otherwise do not meet the definition of commercial property and casualty
insurance and less than 25 percent of the total direct earned premium
for the insurance policy is attributable to the coverage for commercial
risk exposures.
    (iv) If a property and casualty insurance policy covers both
commercial and personal risk exposures, insurers may allocate the
premiums in accordance with the proportion of risk between commercial
and personal components in order to ascertain direct earned premium. If
a policy includes insurance coverage that meets the definition of
commercial property and casualty insurance for losses occurring at the
locations described in section 102(5)(A) and (B) of the Act, but also
includes other coverage, insurers may allocate the premiums in
accordance with the proportion of risk attributable to the components in
order to ascertain direct earned premium.
    (2) Insurers that do not report to NAIC. An insurer that does not
report to the NAIC, but that is licensed or admitted by any State (such
as certain farm or county mutual insurers), should use the guidance
provided in paragraph (f)(1) of this section to assist in ascertaining
its direct earned premium.
    (i) Direct earned premium may be ascertained by adjusting data
maintained by such insurer or reported by such insurer to its State
regulator to reflect a breakdown of premiums for commercial and personal
property and casualty exposure risk as described in paragraph (f)(1) of
this section and, if

[[Page 371]]

necessary, re-stated to reflect the accrual method of determining direct
earned premium versus direct premium.
    (ii) Such an insurer should consider other types of payments that
compensate the insurer for risk of loss (contributions, assessments,
etc.) as part of its direct earned premium.
    (3) Certain eligible surplus line carrier insurers. An eligible
surplus line carrier insurer listed on the NAIC Quarterly Listing of
Alien Insurers must ascertain its direct earned premium as follows:
    (i) For policies that were in-force as of November 26, 2002, or
entered into prior to January 1, 2003, direct earned premiums are to be
determined with reference to the definition of property and casualty
insurance and the locations described in section 102(5)(A) and (B) of
the Act by allocating the appropriate portion of premium income for
losses for property and casualty insurance at such locations. The same
allocation methodologies contained within the NAIC's ``Allocation of
Surplus Lines and Independently Procured Insurance Premium Tax on Multi-
State Risks Model Regulation'' for allocating premium between coverage
for property and casualty insurance for losses occurring at the
locations described in section 102(5)(A) and (B) of the Act and all
other coverage, to ascertain the appropriate percentage of premium
income to be included in direct earned premium, may be used.
    (ii) For policies issued after January 1, 2003, premium for
insurance that meets the definition of property and casualty insurance
for losses occurring at the locations described in section 102(5)(A) and
(B) of the Act, must be priced separately by such eligible surplus line
carriers.
    (4) Federally approved insurers. A federally approved insurer under
section 102(6)(A)(iii) of the Act should use a methodology similar to
that specified for eligible surplus line carrier insurers in paragraph
(f)(3) of this section to calculate its direct earned premium. Such
calculation should be adjusted to reflect the limitations on scope of
insurance coverage under the Program (i.e., to the extent of federal
approval of commercial property and casualty insurance in connection
with maritime, energy or aviation activities).
    (g) Direct written premium means the premium information for
commercial property and casualty insurance as defined in paragraph (u)
of this section that is included by an insurer in column 1 of the
Exhibit of Premiums and Losses of the NAIC Annual Statement or in an
equivalent reporting requirement. The Federal Terrorism Policy Surcharge
is not included in amounts reported as direct written premium.
    (h) Discretionary recoupment amount means such amount of the
aggregate Federal share of compensation in excess of the mandatory
recoupment amount that the Secretary has determined will be recouped
pursuant to section 103(e)(7)(D) of the Act.
    (i) Federal Terrorism Policy Surcharge means the amount established
by Treasury under section 103(e)(8) of the Act which is imposed as a
policy surcharge on property and casualty insurance policies, expressed
as a percentage of the written premium.
    (j) Insurance marketplace aggregate retention amount means an amount
for a Program Year as set forth in section 103(e)(6) of the Act. For any
Program Year beginning with 2008 through 2014, such amount is the lesser
of $27,500,000,000 and the aggregate amount, for all insurers, of
insured losses from Program Trigger Events during the Program Year.
    (k) Insured loss. (1) The term insured loss means any loss resulting
from an act of terrorism (including an act of war, in the case of
workers' compensation) that is covered by primary or excess property and
casualty insurance issued by an insurer if the loss:
    (i) Occurs within the United States;
    (ii) Occurs to an air carrier (as defined in 49 U.S.C. 40102), to a
United States flag vessel (or a vessel based principally in the United
States, on which United States income tax is paid and whose insurance
coverage is subject to regulation in the United States), regardless of
where the loss occurs; or
    (iii) Occurs at the premises of any United States mission.
    (2)(i) A loss that occurs to an air carrier (as defined in 49 U.S.C.
40102), to a United States flag vessel, or a vessel

[[Page 372]]

based principally in the United States, on which United States income
tax is paid and whose insurance coverage is subject to regulation in the
United States, is not an insured loss under section 102(5)(B) of the Act
unless it is incurred by the air carrier or vessel outside the United
States.
    (ii) An insured loss to an air carrier or vessel outside the United
States under section 102(5)(B) of the Act does not include losses
covered by third party insurance contracts that are separate from the
insurance coverage provided to the air carrier or vessel.
    (3) The term insured loss includes reasonable loss adjustment
expenses, incurred by an insurer in connection with insured losses, that
are allocated and identified by claim file in insurer records, including
expenses incurred in the investigation, adjustment and defense of
claims, but excluding staff salaries, overhead, and other insurer
expenses that would have been incurred notwithstanding the insured loss.
    (4) The term insured loss does not include:
    (i) Punitive or exemplary damages awarded or paid in connection with
the Federal cause of action specified in section 107(a)(1) of the Act.
The term ``punitive or exemplary damages'' means damages that are not
compensatory but are an award of money made to a claimant solely to
punish or deter; or
    (ii) Extra contractual damages awarded against, or paid by, an
insurer; or
    (iii) Payments by an insurer in excess of policy limits.
    (l) Insurer means any entity, including any affiliate of the entity,
that meets the following requirements:
    (1)(i) The entity must fall within at least one of the following
categories:
    (A) It is licensed or admitted to engage in the business of
providing primary or excess insurance in any State, (including, but not
limited to, State licensed captive insurance companies, State licensed
or admitted risk retention groups, and State licensed or admitted farm
and county mutuals), and, if a joint underwriting association, pooling
arrangement, or other similar entity, then the entity must:
    (1) Have gone through a process of being licensed or admitted to
engage in the business of providing primary or excess insurance that is
administered by the State's insurance regulator, which process generally
applies to insurance companies or is similar in scope and content to the
process applicable to insurance companies;
    (2) Be generally subject to State insurance regulation, including
financial reporting requirements, applicable to insurance companies
within the State; and
    (3) Be managed independently from other insurers participating in
the Program;
    (B) It is not licensed or admitted to engage in the business of
providing primary or excess insurance in any State, but is an eligible
surplus line carrier listed on the Quarterly Listing of Alien Insurers
of the NAIC, or any successor to the NAIC;
    (C) It is approved or accepted for the purpose of offering property
and casualty insurance by a Federal agency in connection with maritime,
energy, or aviation activity, but only to the extent of such federal
approval of commercial property and casualty insurance coverage offered
by the insurer in connection with maritime, energy, or aviation
activity;
    (D) It is a State residual market insurance entity or State workers'
compensation fund; or
    (E) As determined by the Secretary, it falls within any other class
or type of captive insurer or other self-insurance arrangement by a
municipality or other entity, to the extent provided in Treasury
regulations issued under section 103(f) of the Act.
    (ii) If an entity falls within more than one category described in
paragraph (f)(1)(i) of this section, the entity is considered to fall
within the first category within which it falls for purposes of the
Program.
    (2) The entity must receive direct earned premiums for any type of
commercial property and casualty insurance coverage, except in the case
of:
    (i) State residual market insurance entities and State workers'
compensation funds, to the extent provided in Treasury regulations; and
    (ii) Other classes or types of captive insurers and other self-
insurance arrangements by municipalities and

[[Page 373]]

other entities, if such entities are included in the Program by Treasury
under regulations in this Part.
    (3) The entity must meet any other criteria as prescribed by
Treasury.
    (m) Insurer deductible means:
    (1) For an insurer that has had a full year of operations during the
calendar year immediately preceding the applicable Program Year:
    (i) For the Transition Period (November 26, 2002 through December
31, 2002), the value of an insurer's direct earned premiums over
calendar 2001, multiplied by 1 percent;
    (ii) For Program Year 1 (January 1, 2003 through December 31, 2003),
the value of an insurer's direct earned premiums over calendar year
2002, multiplied by 7 percent;
    (iii) For Program Year 2 (January 1, 2004 through December 31,
2004), the value of an insurer's direct earned premiums over calendar
year 2003, multiplied by 10 percent;
    (iv) For Program Year 3 (January 1, 2005 through December 31, 2005),
the value of an insurer's direct earned premiums over calendar year
2004, multiplied by 15 percent;
    (v) For Program Year 4 (January 1, 2006 through December 31, 2006),
the value of an insurer's direct earned premiums over calendar year
2005, multiplied by 17.5 percent;
    (vi) For Program Year 5 (January 1, 2007 through December 31, 2007),
or any Program Year thereafter, the value of an insurer's direct earned
premiums over the calendar year immediately preceding that Program Year,
multiplied by 20 percent; and
    (2) For an insurer that has not had a full year of operations during
the calendar year immediately preceding the applicable Program Year, the
insurer deductible will be based on data for direct earned premiums for
the applicable Program Year multiplied by the specified percentage for
the insurer deductible for the applicable Program Year. If the insurer
does not have a full year of operations during the applicable Program
Year, the direct earned premiums for the applicable Program Year will be
annualized to determine the insurer deductible.
    (n) Mandatory recoupment amount means the difference between the
insurance marketplace aggregate retention amount for a Program Year and
the uncompensated insured losses during such Program Year. The mandatory
recoupment amount shall be zero, however, if the amount of such
uncompensated insured losses is greater than the insurance marketplace
aggregate retention amount.
    (o) NAIC means the National Association of Insurance Commissioners.
    (p) Person means any individual, business or nonprofit entity
(including those organized in the form of a partnership, limited
liability company, corporation, or association), trust or estate, or a
State or political subdivision of a State or other governmental unit.
    (q) Professional liability insurance means insurance coverage for
liability arising out of the performance of professional or business
duties related to a specific occupation, with coverage being tailored to
the needs of the specific occupation. Examples include abstracters,
accountants, insurance adjusters, architects, engineers, insurance
agents and brokers, lawyers, real estate agents, stockbrokers and
veterinarians. For purposes of this definition, professional liability
insurance does not include directors and officers liability insurance.
    (r) Program means the Terrorism Risk Insurance Program established
by the Act.
    (s) Program Trigger event means a certified act of terrorism that
occurs after March 31, 2006, for which the aggregate industry insured
losses resulting from such act exceed $50,000,000 with respect to such
insured losses occurring in 2006 or $100,000,000 with respect to such
insured losses occurring in 2007 and any Program Year thereafter.
    (t) Program Years means the Transition Period (November 26, 2002
through December 31, 2002), Program Year 1 (January 1, 2003 through
December 31, 2003), Program Year 2 (January 1, 2004 though December 31,
2004), Program Year 3 (January 1, 2005 through December 31, 2005),
Program Year 4 (January 1, 2006 through December 31, 2006), Program Year
5 (January 1, 2007 through December 31, 2007), and any Program Year
thereafter (calendar years 2008 through 2014).

[[Page 374]]

    (u) Property and casualty insurance means commercial lines of
property and casualty insurance, including excess insurance, workers'
compensation insurance, and directors and officers liability insurance,
and:
    (1) Means commercial lines within only the following lines of
insurance from the NAIC's Exhibit of Premiums and Losses (commonly known
as Statutory Page 14): Line 1--Fire; Line 2.1--Allied Lines; Line 5.1--
Commercial Multiple Peril (non-liability portion); Line 5.2--Commercial
Multiple Peril (liability portion); Line 8--Ocean Marine; Line 9--Inland
Marine; Line 16--Workers' Compensation; Line 17--Other Liability; Line
18--Products Liability; Line 22--Aircraft (all perils); and Line 27--
Boiler and Machinery; and
    (2) Does not include:
    (i) Federal crop insurance issued or reinsured under the Federal
Crop Insurance Act (7 U.S.C. 1501 et seq.), or any other type of crop or
livestock insurance that is privately issued or reinsured (including
crop insurance reported under either Line 2.1--Allied Lines or Line
2.2--Multiple Peril (Crop) of the NAIC's Exhibit of Premiums and Losses
(commonly known as Statutory Page 14);
    (ii) Private mortgage insurance (as defined in section 2 of the
Homeowners Protection Act of 1988) (12 U.S.C. 4901) or title insurance;
    (iii) Financial guaranty insurance issued by monoline financial
guaranty insurance corporations;
    (iv) Insurance for medical malpractice;
    (v) Health or life insurance, including group life insurance;
    (vi) Flood insurance provided under the National Flood Insurance Act
of 1968 (42 U.S.C. 4001 et seq.) or earthquake insurance reported under
Line 12 of the NAIC's Exhibit of Premiums and Losses (commonly known as
Statutory Page 14);
    (vii) Reinsurance or retrocessional reinsurance;
    (viii) Commercial automobile insurance, including insurance reported
under Lines 19.3 (Commercial Auto No-Fault (personal injury
protection)), 19.4 (Other Commercial Auto Liability) and 21.2
(Commercial Auto Physical Damage) of the NAIC's Exhibit of Premiums and
Losses (commonly known as Statutory Page 14);
    (ix) Burglary and theft insurance, including insurance reported
under Line 26 (Burglary and Theft) of the NAIC's Exhibit of Premiums and
Losses (commonly known as Statutory Page 14);
    (x) Surety insurance, including insurance reported under Line 24
(Surety) of the NAIC's Exhibit of Premiums and Losses (commonly known as
Statutory Page 14);
    (xi) Professional liability insurance as defined in section 50.5(j);
or
    (xii) Farmowners multiple peril insurance, including insurance
reported under Line 3 (Farmowners Multiple Peril) of the NAIC's Exhibit
of Premiums and Losses (commonly known as Statutory Page 14).
    (v) Secretary means the Secretary of the Treasury.
    (w) State means any State of the United States, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, American Samoa, Guam, each of the United
States Virgin Islands, and any territory or possession of the United
States.
    (x) Surcharge means the Federal Terrorism Policy Surcharge as
defined in paragraph (i) of this section.
    (y) Surcharge effective date means the date established by Treasury
that begins the assessment period.
    (z) Treasury means the United States Department of the Treasury.
    (aa) Uncompensated insured losses--means the aggregate amount of
insured losses, from Program Trigger Events, of all insurers in a
Program Year that is not compensated by the Federal Government because
such losses:
    (1) Are within the insurer deductibles of insurers, or
    (2) Are within the portions of losses in excess of insurer
deductibles that are not compensated through payments made as a result
of claims for the Federal share of compensation.
    (bb) United States means the several States, and includes the
territorial sea and the continental shelf of the United States, as those
terms are defined in

[[Page 375]]

the Violent Crime Control and Law Enforcement Act of 1994 (18 U.S.C.
2280 and 2281).

[68 FR 9811, Feb. 28, 2003, as amended at 68 FR 41264, July 11, 2003; 68
FR 48281, Aug. 13, 2003; 69 FR 39306, June 29, 2004; 70 FR 7404, Feb.
14, 2005; 70 FR 34351, June 14, 2005; 71 FR 27569, May 11, 2006; 73 FR
53363, Sept. 16, 2008:74 FR 66057, Dec. 14, 2009]



Sec. 50.6  Rule of construction for dates.

    Unless otherwise expressly provided in the regulation, any date in
these regulations is intended to be applied so that the day begins at
12:01 a.m. and ends at midnight on that date.



Sec. 50.7  Special Rules for Interim Guidance Safe Harbors.

    (a) An insurer will be deemed to be in compliance with the
requirements of the Act to the extent the insurer reasonably relied on
Interim Guidance prior to the effective date of applicable regulations.
    (b) For purposes of this section, Interim Guidance means the
following documents, which are also available from the Department of the
Treasury at http://www.treasury.gov/trip:
    (1) Interim Guidance I issued by Treasury on December 3, 2002, and
published at 67 FR 76206 (December 11, 2002);
    (2) Interim Guidance II issued by Treasury on December 18, 2002, and
published at 67 FR 78864 (December 26, 2002);
    (3) Interim Guidance III issued by Treasury on January 22, 2003, and
published at 68 FR 4544 (January 29, 2003);
    (4) Interim Guidance IV issued by Treasury on December 29, 2005, and
published at 71 FR 648 (January 5, 2006); and
    (5) Interim Guidance issued by Treasury on January 22, 2008, and
published at 73 FR 5264 (January 29, 2008).

[71 FR 27570, May 11, 2006, as amended at 73 FR 53364, Sept. 16, 2008]



Sec. 50.8  Procedure for requesting determinations of controlling
influence.

    (a) An insurer or insurers not having control over another insurer
under Sec. 50.5(c)(2)(i) or (c)(2)(ii) may make a written submission to
Treasury to rebut a presumption of controlling influence under Sec.
50.5(c)(4)(i) through (iv) or otherwise to request a determination of
controlling influence. Such submissions shall be made to the Terrorism
Risk Insurance Program Office, Department of the Treasury, Suite 2110,
1425 New York Ave NW, Washington, D.C. 20220. The submission should be
entitled, ``Controlling Influence Submission,'' and should provide the
full name and address of the submitting insurer(s) and the name, title,
address and telephone number of the designated contact person(s) for
such insurer(s).
    (b) Treasury will review submissions and determine whether Treasury
needs additional written or orally presented information. In its
discretion, Treasury may schedule a date, time and place for an oral
presentation by the insurer(s).
    (c) An insurer or insurers must provide all relevant facts and
circumstances concerning the relationship(s) between or among the
affected insurers and the control factors in Sec. 50.5(c)(4)(i) through
(iv); and must explain in detail any basis for why the insurer believes
that no controlling influence exists (if a presumption is being
rebutted) in light of the particular facts and circumstances, as well as
the Act's language, structure and purpose. Any confidential business or
trade secret information submitted to Treasury should be clearly marked.
Treasury will handle any subsequent request for information designated
by an insurer as confidential business or trade secret information in
accordance with Treasury's Freedom of Information Act regulations at 31
CFR Part 1.
    (d) Treasury will review and consider the insurer submission and
other relevant facts and circumstances. Unless otherwise extended by
Treasury, within 60 days after receipt of a complete submission,
including any additional information requested by Treasury, and
including any oral presentation, Treasury will issue a final
determination of whether one insurer has a controlling influence over
another insurer for purposes of the Program. The determination shall set
forth Treasury's basis for its determination.

[[Page 376]]

    (e) This Sec. 50.8 supersedes the Interim Guidance issued by
Treasury in a notice published on March 27, 2003 (68 FR 15039).

(Approved by the Office of Management & Budget under control number
1505-0190)

[68 FR 41266, July 11, 2003]



Sec. 50.9  Procedure for requesting general interpretations of statute.

    Persons actually or potentially affected by the Act or regulations
in this Part may request an interpretation of the Act or regulations by
writing to the Terrorism Risk Insurance Program Office, Suite 2110,
Department of the Treasury, 1425 New York Ave NW, Washington, DC 20220,
giving a detailed explanation of the facts and circumstances and the
reason why an interpretation is needed. A requester should segregate and
mark any confidential business or trade secret information clearly.
Treasury in its discretion will provide written responses to requests
for interpretation. Treasury reserves the right to decline to provide a
response in any case. Except in the case of any confidential business or
trade secret information, Treasury will make written requests for
interpretations and responses publicly available at the Treasury
Department Library, on the Treasury Web site, or through other means as
soon as practicable after the response has been provided. Treasury will
handle any subsequent request for information that had been designated
by a requester as confidential business or trade secret information in
accordance with Treasury's Freedom of Information Act regulations at 31
CFR Part 1.

[68 FR 41266, July 11, 2003]



         Subpart B_Disclosures as Conditions for Federal Payment

    Source: 68 FR 19306, Apr. 18, 2003, unless otherwise noted.



Sec. 50.10  General disclosure requirements.

    (a) All policies. As a condition for federal payments under section
103(b) of the Act, the Act requires that an insurer provide clear and
conspicuous disclosure to the policyholder of:
    (1) The premium charged for insured losses covered by the Program;
and
    (2) The federal share of compensation for insured losses under the
Program.
    (b) Policies in force on the date of enactment. For policies issued
before November 26, 2002, the disclosure required by the Act must be
provided within 90 days of November 26, 2002 (no later than February 24,
2003).
    (c) Policies issued within 90 days of the date of enactment. For
policies issued within the 90-day period beginning on November 26, 2002
through February 24, 2003, the disclosure required by the Act must be
provided at the time of offer, purchase, and renewal of the policy.
    (d) Policies issued more than 90 days after the date of enactment.
For policies issued on or after February 25, 2003, the disclosure
required by the Act must be made on a separate line item in the policy,
at the time of offer, purchase, and renewal of the policy. For policies
issued in late 2005 with coverage extending into 2006, see Sec.
50.12(e)(2).

[68 FR 19306, Apr. 18, 2003, as amended at 71 FR 27570, May 11, 2006]



Sec. 50.11  Definition.

    For purposes of this subpart, unless the context indicates
otherwise, the term ``disclosure'' or ``disclosures'' refers to the
disclosure described in section 103(b)(2) of the Act and Sec. 50.10.
The term ``cap disclosure'' refers to the disclosure required by section
103(b)(3) of the Act and Sec. 50.15.

[73 FR 53364, Sept. 16, 2008]



Sec. 50.12  Clear and conspicuous disclosure.

    (a) General. Whether a disclosure is clear and conspicuous depends
on the totality of the facts and circumstances of the disclosure. See
Sec. 50.17 for model forms.
    (b)(1) Description of premium. An insurer may describe the premium
charged for insured losses covered by the Program as a portion or
percentage of an annual premium, if consistent with standard business
practice. An insurer may not describe the premium in a manner that is
misleading in the context of the Program, such as by characterizing the
premium as a ``surcharge.''

[[Page 377]]

    (2) Premium to reflect definition of act of terrorism. If an insurer
makes an initial offer of coverage, or offers to renew an existing
policy on or after December 26, 2007, the disclosure provided to the
policyholder must reflect the premium charged for insured losses covered
by the Act, consistent with the definition of an act of terrorism as
amended by the Terrorism Risk Insurance Program Reauthorization Act of
2007, Public Law 110-160, 121 Stat. 1839.
    (c) Method of disclosure. An insurer may provide disclosures using
normal business practices, including forms and methods of communication
used to communicate similar policyholder information to policyholders.
    (d) Use of producer. If an insurer normally communicates with a
policyholder through an insurance producer or other intermediary, an
insurer may provide disclosures through such producer or other
intermediary. If an insurer elects to make the disclosures through an
insurance producer or other intermediary, the insurer remains
responsible for ensuring that the disclosures are provided by the
insurance producer or other intermediary to policyholders in accordance
with the Act.
    (e) Demonstration of compliance. (1) An insurer may demonstrate that
it has satisfied the requirement to provide clear and conspicuous
disclosure as described in Sec. 50.10 through use of appropriate
systems and normal business practices that demonstrate a practice of
compliance.
    (2) If an insurer made available coverage for insured losses in a
new policy or policy renewal in Program Year 3 for coverage becoming
effective in Program Year 4, but did not provide a disclosure at the
time of offer, purchase or renewal, then the insurer must be able to
demonstrate to Treasury's satisfaction that it has provided a disclosure
as soon as possible following January 1, 2006.
    (3) If an insurer made available coverage for insured losses in a
new policy or policy renewal in 2007 or in the first three months of
2008 for coverage becoming effective in 2008, but did not provide a
disclosure at the time of offer, purchase or renewal of the policy, then
the insurer must be able to demonstrate to Treasury's satisfaction that
it has provided a disclosure as soon as possible following January 1,
2008.
    (f) Certification of compliance. An insurer must certify that it has
complied with the requirement to provide disclosure to the policyholder
on all policies that form the basis for any claim that is submitted by
an insurer for federal payment under the Program.

[68 FR 19306, Apr. 18, 2003, as amended at 68 FR 59727, Oct. 17, 2003;
71 FR 27570, May 11, 2006; 73 FR 53364, Sept. 16, 2008]



Sec. 50.13  Offer, purchase, and renewal.

    An insurer is deemed to be in compliance with the requirement of
providing disclosure ``at the time of offer, purchase, and renewal of
the policy'' under Sec. 50.10(c) and (d) if the insurer:
    (a) Makes the disclosure no later than the time the insurer first
formally offers to provide insurance coverage or renew a policy for a
current policyholder; and
    (b) Makes clear and conspicuous reference back to that disclosure,
as well as the final terms of terrorism insurance coverage, at the time
the transaction is completed.



Sec. 50.14  Separate line item.

    An insurer is deemed to be in compliance with the requirement of
providing disclosure on a ``separate line item in the policy'' under
Sec. 50.10(d) if the insurer makes the disclosure:
    (a) On the declarations page of the policy;
    (b) Elsewhere within the policy itself; or
    (c) In any rider or endorsement, or other document that is made a
part of the policy.

[68 FR 59727, Oct. 17, 2003]



Sec. 50.15  Cap disclosure.

    (a) General. Under section 103(e)(2) of the Act, if the aggregate
insured losses exceed $100,000,000,000 during any Program Year, the
Secretary shall not make any payment for any portion of the amount of
such losses that exceeds $100,000,000,000, and no insurer that has met
its insurer deductible shall be liable for the payment of any portion of
the amount of such losses that exceeds $100,000,000,000.

[[Page 378]]

    (b) Other requirements. As a condition for federal payments under
section 103(b) of the Act, in the case of any policy that is issued
after December 26, 2007, an insurer must provide clear and conspicuous
disclosure to the policyholder of the existence of the $100,000,000,000
cap under section 103(e)(2). The cap disclosure must be made at the time
of offer, purchase, and renewal of the policy.
    (c) Demonstration of compliance. For policies issued after December
26, 2007, if an insurer does not provide a cap disclosure by the time of
the first offer, purchase or renewal of the policy after December 26,
2007, then the insurer must be able to demonstrate to Treasury's
satisfaction that it has provided the disclosure as soon as possible
following December 26, 2007.
    (d) Other applicable rules. The rules in Sec. 50.12(a), (c), (d),
(e)(1), and (f) (relating to clear and conspicuous disclosure) and in
Sec. 50.13 (relating to offer, purchase, and renewal) apply to the cap
disclosure.

[73 FR 53364, Sept. 16, 2008]



Sec. 50.17  Use of model forms.

    (a) Policies in force on the date of enactment. (1) An insurer that
is required to make the disclosure under Sec. 50.10(b) and that makes
no change in the existing premium, is deemed to be in compliance with
the disclosure requirement if it uses NAIC Model Disclosure Form No. 2.
    (2) An insurer that is required to make the disclosure under Sec.
50.10(b) and that makes a change in the existing premium, is deemed to
be in compliance with the disclosure requirement if it uses NAIC Model
Disclosure Form No. 1. Such an insurer may also use the same NAIC Model
Disclosure Form No. 1 to comply with the notice requirement of section
105(c) of the Act. See Sec. 50.18.
    (b) Policies issued within 90 days of the date of enactment. An
insurer that is required to make the disclosure under Sec. 50.10(c) is
deemed to be in compliance with the disclosure requirement if it uses
either NAIC Model Disclosure Form No. 1 or NAIC Model Disclosure Form
No. 2, as long as the form used is modified as appropriate for the
particular policy.
    (c) Policies issued more than 90 days after the date of enactment.
An insurer that is required to make the disclosure under Sec. 50.10(d)
may continue to use NAIC Model Disclosure Form No. 1 or NAIC Model
Disclosure Form No. 2 if appropriate, or other disclosures that meet the
requirements of Sec. Sec. 50.10(a) and 50.14 may be developed.
    (d) Not exclusive means of compliance. An insurer is not required to
use NAIC Model Disclosure Form No. 1 or NAIC Model Disclosure Form No. 2
to satisfy the disclosure requirement. An insurer may use other means to
comply with the disclosure requirement, as long as the disclosure
comports with the requirements of the Act.
    (e) Cap disclosure. An insurer may use NAIC Model Disclosure Form
No. 1 or NAIC Model Disclosure Form No. 2 dated December 19, 2007, or as
subsequently modified in accordance with paragraph (f) of this section,
to satisfy the cap disclosure requirement, or another disclosure that
meets the requirements of Sec. 50.15 may be developed.
    (f) Definitions. For purposes of this section, references to NAIC
Model Disclosure Form No. 1 and NAIC Model Disclosure Form No. 2 refer
to such forms as were in existence on April 18, 2003, or as subsequently
modified by the NAIC, provided Treasury has stated that usage by
insurers of the subsequently modified forms is deemed to satisfy the
disclosure requirements of the Act and the insurer uses the most current
forms that are available at the time of disclosure. These forms may be
found on the Treasury Web site at http://www.treasury.gov/trip.

[68 FR 19306, Apr. 18, 2003, as amended at 71 FR 27570, May 11, 2006; 73
FR 53364, Sept. 16, 2008]



Sec. 50.18  Notice required by reinstatement provision.

    (a) Nullification of terrorism exclusion. Any terrorism exclusion in
a contract for property and casualty insurance that was in force on
November 26, 2002, is void to the extent it excludes losses that would
otherwise be insured losses.
    (b) Reinstatement of terrorism exclusion. Notwithstanding paragraph
(a) of this section, an insurer may reinstate a preexisting provision in
a contract for property and casualty insurance that

[[Page 379]]

was in force on November 26, 2002, and that excludes coverage for an act
of terrorism only if:
    (1) The insurer has received a written statement from the insured
that affirmatively authorizes such reinstatement; or
    (2) The insurer provided notice at least 30 days before any such
reinstatement of the increased premium for such terrorism coverage and
the rights of the insured with respect to such coverage, including the
date upon which the exclusion would be reinstated if no payment is
received, and the insured fails to pay any increased premium charged by
the insurer for providing such terrorism coverage.

[68 FR 19306, Apr. 18, 2003, as amended at 68 FR 59727, Oct. 17, 2003]



Sec. 50.19  General disclosure requirements for State residual market
insurance entities and State worker's compensation funds.

    (a) Policies in force on October 17, 2003, or renewed or issued on
or before January 15, 2004. For policies in force on October 17, 2003,
or renewed or issued on or before January 15, 2004, the disclosure
required by section 103(b) of the Act as a condition for Federal payment
is waived for those State residual market insurance entities and State
workers' compensation funds that since November 26, 2002, have not
provided disclosures to policyholders, until January 15, 2004, after
which disclosures are to be made to policyholders for policies then in
force and subsequently issued.
    (b) Residual Market Mechanism Disclosure. A State residual market
insurance entity or State workers' compensation fund may provide the
disclosures required by this subpart B to policyholders using normal
business practices, including forms and methods of communication used to
communicate similar policyholder information to policyholders. The
disclosures may be made by the State residual market insurance entity or
State workers' compensation fund itself, the individual insurers that
participate in the State residual market insurance entity or a State
workers' compensation fund, or its servicing carriers. The ultimate
responsibility for ensuring that the disclosure requirements have been
met rests with the insurer filing a claim under the Program.
    (c) Other requirements. Except as provided in this section, all
other disclosure requirements set out in this subpart B apply to State
residual insurance market entities and State workers' compensation
funds.
    (d) Prior safe harbor superseded. This section supersedes the
disclosure safe harbor provisions found at paragraph C.4 of the Interim
Guidance issued by Treasury in a notice published on December 18, 2002,
and published at 67 FR 78864 (December 26, 2002).

[68 FR 59719, Oct. 17, 2003]



                    Subpart C_Mandatory Availability

    Source: 68 FR 19307, Apr. 18, 2003, unless otherwise noted.



Sec. 50.20  General mandatory availability requirements.

    (a) Transition Period and Program Years 1 and 2--period ending
December 31, 2004. Under section 103(c) of the Act (unless the time is
extended by the Secretary as provided in that section) during the period
beginning on November 26, 2002 and ending on December 31, 2004 (the last
day of Program Year 2), an insurer must:
    (1) Make available, in all of its property and casualty insurance
policies, coverage for insured losses; and
    (2) Make available property and casualty insurance coverage for
insured losses that does not differ materially from the terms, amounts,
and other coverage limitations applicable to losses arising from events
other than acts of terrorism.
    (b) Program Year 3--calendar year 2005. In accordance with the
determination of the Secretary announced June 18, 2004, an insurer must
comply with paragraphs (a)(1) and (a)(2) of this section during Program
Year 3.
    (c) Program Years 4 and 5--calendar years 2006 and 2007. Under
section 103(c) of the Act, an insurer must comply with paragraphs (a)(1)
and (a)(2) of this section during Program Years 4 and 5.
    (d) Program Years thereafter. Under section 103(c) of the Act, an
insurer must comply with paragraphs (a)(1)

[[Page 380]]

and (a)(2) of this section during Program Years 2008 through 2014.
    (e) Beyond 2014. Notwithstanding paragraph (a)(2) of this section
and Sec. 50.23(a), property and casualty insurance coverage for insured
losses does not have to be made available beyond December 31, 2014, even
if the policy period of insurance coverage for losses from events other
than acts of terrorism extends beyond that date.

[71 FR 27570, May 11, 2006, as amended at 73 FR 53364, Sept. 16, 2008]



Sec. 50.21  Make available.

    (a) General. The requirement to make available coverage as provided
in Sec. 50.20 applies to policies in existence on November 26, 2002,
and new policies issued and renewals of existing policies during the
period beginning on November 26, 2002 and ending on December 31, 2002,
and in any Program Year thereafter. Except as provided in paragraph (c)
of this section, the requirement applies at the time an insurer makes
the initial offer of coverage as well as at the time an insurer makes an
initial offer of renewal of an existing policy.
    (b) Offer consistent with amended definition of act of terrorism. An
insurer must make available coverage for insured losses in a policy of
property and casualty insurance consistent with the definition of an act
of terrorism as amended by the Terrorism Risk Insurance Program
Reauthorization Act of 2007 beginning with the first initial offer of
coverage or offer of renewal of the policy made on or after December 26,
2007. Notwithstanding this requirement, if an insurer makes an offer of
coverage on or after December 26, 2007 on a policy that is in mid term,
then the insurer must make available coverage for insured losses
consistent with the definition of an act of terrorism.
    (c) Rules concerning extension of Program. (1) Special Program Year
4 requirement for certain new policies issued and renewals of existing
policies in Program Year 3. If coverage for insured losses under a
policy of property and casualty insurance (as defined by the Act, as
amended) expired as of December 31, 2005, but the remainder of coverage
under the policy continued in force in Program Year 4, then an insurer
must make available coverage as provided in Sec. 50.20 for insured
losses for the remaining portion of the policy term in the manner
specified in paragraphs (e)(1) and (e)(2) of this section. This
requirement does not apply if during Program Year 3 a policyholder
declined an offer of coverage for insured losses made at the time of the
initial offer of coverage or offer of renewal of the existing policy.
    (2) Special 2008 requirement for certain policies where coverage
expired. If coverage for insured losses under a policy of property and
casualty insurance expired as of December 31, 2007, but the remainder of
coverage under the policy continued in force in 2008, then an insurer
must make available coverage as provided in Sec. 50.20 for insured
losses for the remaining portion of the policy term in the manner
specified in paragraphs (e)(1) and (e)(4) of this section. However, if a
policyholder declined an offer made by an insurer for such coverage
expiring as of December 31, 2007, then the insurer is not required to
make a new offer of coverage for insured losses before any offer of
renewal.
    (d) Changes negotiated subsequent to initial offer. If an insurer
satisfies the requirement to ``make available'' coverage as described in
Sec. 50.20 by first making an offer with coverage for insured losses
that does not differ materially from the terms, amounts, and other
coverage limitations applicable to losses arising from events other than
acts of terrorism, which the policyholder declines, the insurer may
negotiate with the policyholder an option of partial coverage for
insured losses at a lower amount of coverage if permitted by any
applicable State law. An insurer is not required by the Act to offer
partial coverage if the policyholder declines full coverage. See Sec.
50.24.
    (e) Demonstrations of compliance. (1) No contract. If an insurer
makes an offer of insurance but no contract of insurance is concluded,
the insurer may demonstrate that it has satisfied the requirement to
make available coverage as described in Sec. 50.20 through use of
appropriate systems and normal business practices that demonstrate a
practice of compliance.

[[Page 381]]

    (2) Policy periods beginning in Program Year 3. If an insurer must
make available coverage for insured losses as required by paragraph
(c)(1) of this section for a policy whose coverage period began in
Program Year 3 but extends into Program Year 4, then the insurer must be
able to demonstrate to Treasury's satisfaction that it has offered such
coverage by January 1, 2006, or as soon as possible following that date.
    (3) Coverage becoming effective in Program Year 4. If an insurer
processed a new policy or policy renewal in Program Year 3 for coverage
becoming effective in Program Year 4, but did not make available
coverage for insured losses as required by Sec. 50.20 by January 1,
2006, then the insurer must be able to demonstrate to Treasury's
satisfaction that it has provided an offer of coverage for insured
losses as soon as possible following that date.
    (4) Coverage expired as of December 31, 2007. If an insurer must
make available coverage for insured losses under the circumstances
described in paragraph (c)(2) of this section, the insurer must be able
to demonstrate to Treasury's satisfaction that it has offered such
coverage as soon as possible following January 1, 2008.
    (5) Coverage becoming effective in 2008. (i) No coverage. If an
insurer processed a new policy or policy renewal in 2007 or in the first
three months of 2008 for coverage becoming effective in 2008, but did
not make available coverage for insured losses as required by Sec.
50.20(a), then the insurer must be able to demonstrate to Treasury's
satisfaction that it has provided an offer of coverage for insured
losses as soon as possible following January 1, 2008.
    (ii) Not consistent with amended definition of act of terrorism. If
an insurer made an initial offer of coverage or offer of renewal on or
after December 26, 2007 for a policy term becoming effective in 2008,
and made available coverage for insured losses, but the scope of the
coverage for insured losses in the offer was not consistent with the
definition of an act of terrorism as amended by the Terrorism Risk
Insurance Program Reauthorization Act of 2007, then the insurer must be
able to demonstrate to Treasury's satisfaction that it has provided a
new offer of coverage as soon as possible following January 1, 2008. If
an insurer made an initial offer of coverage or offer of renewal before
December 26, 2007, for a policy term becoming effective in 2008, and the
insurer made available coverage for insured losses in compliance with
the Act and the definition of an act of terrorism in effect at the time
of the offer, then the insurer is not required to make a new offer of
coverage before the policy is due to be renewed by its terms, regardless
of whether the offer was accepted or rejected.

[73 FR 53364, Sept. 16, 2008]



Sec. 50.23  No material difference from other coverage.

    (a) Terms, amounts, and other coverage limitations. As provided in
Sec. 50.20(a)(2), an insurer must offer coverage for insured losses
resulting from an act of terrorism that does not differ materially from
the terms, amounts, and other coverage limitations (including
deductibles) applicable to losses from other perils. For purposes of
this requirement, ``terms'' excludes price.
    (b) Limitations on types of risk. If an insurer does not cover all
types of risks, then it is not required to cover the excluded risks in
satisfying the requirement to make available coverage for losses
resulting from an act of terrorism that does not differ materially from
the terms, amounts, and other coverage limitations applicable to losses
arising from events other than acts of terrorism. For example, if an
insurer does not cover all types of risks, either because the insurer is
outside of direct State regulatory oversight, or because a State permits
certain exclusions for certain types of losses, such as nuclear,
biological, or chemical events, then the insurer is not required to make
such coverage available.



Sec. 50.24  Applicability of State law requirements.

    (a) General. After satisfying the requirement to make available
coverage for insured losses that does not differ materially from the
terms, amounts, and other coverage limitations applicable to losses
arising from events other than acts of terrorism, if coverage is

[[Page 382]]

rejected an insurer may then offer coverage that is on different terms,
amounts, or coverage limitations, as long as such an offer does not
violate any applicable State law requirements.
    (b) Examples. (1) If an insurer subject to State regulation first
makes available coverage in accordance with Sec. 50.20 and the State
has a requirement that an insurer offer full coverage without any
exclusion, then the requirement would continue to apply and the insurer
may not subsequently offer less than full coverage or coverage with
exclusions.
    (2) If an insurer subject to State regulation first makes available
coverage in accordance with Sec. 50.20 and the State permits certain
exclusions or allows for other limitations, or an insurance policy is
not governed by State law requirements, then the insurer may
subsequently offer limited coverage or coverage with exclusions.



      Subpart D_State Residual Market Insurance Entities; Workers'
                           Compensation Funds



Sec. 50.30  General participation requirements.

    (a) Insurers. As defined in Sec. 50.5(f), all State residual market
insurance entities and State workers' compensation funds are insurers
under the Program even if such entities do not receive direct earned
premiums.
    (b) Mandatory Participation. State residual market insurance
entities and State workers' compensation funds that meet the
requirements of Sec. 50.5(f) are mandatory participants in the Program
subject to the rules issued in this Subpart.
    (c) Identification. Treasury will release and maintain a list of
State residual market insurance entities and State workers' compensation
funds at www.treasury.gov/trip. Procedures for providing comments and
updates to that list will be posted with the list.

[68 FR 59720, Oct. 17, 2003]



Sec. 50.33  Entities that do not share profits and losses with private
sector insurers.

    (a) Treatment. A State residual market insurance entity or a State
workers' compensation fund that does not share profits and losses with a
private sector insurer is deemed to be a separate insurer under the
Program.
    (b) Premium calculation. A State residual market insurance entity or
a State workers' compensation fund that is deemed to be a separate
insurer should follow the guidelines specified in Sec. 50.5(d)(1) or
50.5(d)(2) for the purposes of calculating the appropriate measure of
direct earned premium.

[68 FR 59720, Oct. 17, 2003]



Sec. 50.35  Entities that share profits and losses with private sector
insurers.

    (a) Treatment. A State residual market insurance entity or a State
workers' compensation fund that shares profits and losses with a private
sector insurer is not deemed to be a separate insurer under the Program.
    (b) Premium and loss calculation. A State residual market insurance
entity or a State workers' compensation fund that is not deemed to be a
separate insurer should continue to report, in accordance with normal
business practices, to each participant insurer its share of premium
income and insured losses, which shall then be included respectively in
the participant insurer's direct earned premium or insured loss
calculations.

[68 FR 59720, Oct. 17, 2003]



Sec. 50.36  Allocation of premium income associated with entities that
do share profits and losses with private sector insurers.

    (a) Servicing Carriers. For purposes of this Subpart, a servicing
carrier is an insurer that enters into an agreement to place and service
insurance contracts for a State residual market insurance entity or a
State workers' compensation fund and to cede premiums associated with
such insurance contracts to the State residual market insurance entity
or State workers' compensation fund. Premiums written by a servicing
carrier on behalf of a State residual market insurance entity or State
workers' compensation fund that are ceded to such an entity or fund
shall not be included as direct earned premium (as described in Sec.
50.5(d)(1) or 50.5(d)(2)) of the servicing carrier.

[[Page 383]]

    (b) Participant Insurers. For purposes of this Subpart, a
participant insurer is an insurer that shares in the profits and losses
of a State residual market insurance entity or a State workers'
compensation fund. Premium income that is distributed to or assumed by
participant insurers in a State residual market insurance entity or
State workers' compensation fund (whether directly or as quota share
insurers of risks written by servicing carriers), shall be included in
direct earned premium (as described in Sec. 50.5(d)(1) or 50.5(d)(2))
of the participant insurer.

Subpart E--Self-Insurance Arrangements; Captives [Reserved]



                       Subpart F_Claims Procedures



Sec. 50.50  Federal share of compensation.

    (a) General. (1) The Treasury will pay the Federal share of
compensation for insured losses as provided in section 103 of the Act
once a Certification of Loss required by Sec. 50.53 is deemed
sufficient. The Federal share of compensation under the Program shall
be:
    (i) 90 percent of that portion of the insurer's aggregate insured
losses that exceed its insurer deductible during each Program Year
through Program Year 4, and
    (ii) 85 percent of that portion of the insurer's aggregate insured
losses that exceed its insurer deductible during Program Year 5 and any
Program Year thereafter.
    (2) The percentages in paragraphs (a)(1)(i) and (ii) are both
subject to any adjustments in Sec. 50.51 and the cap of $100 billion as
provided in section 103(e)(2) of the Act.
    (b) Program Trigger amounts. Notwithstanding paragraph (a) or
anything in this Subpart to the contrary, no Federal share of
compensation will be paid by Treasury unless the aggregate industry
insured losses resulting from a certified act of terrorism occurring
after March 31, 2006 exceed the following amounts:
    (1) For a certified act of terrorism occurring after March 31, 2006
and before January 1, 2007: $50 million;
    (2) For a certified act of terrorism occurring in 2007 and any
Program Year thereafter: $100 million.
    (c) Insured losses after March 31, 2006. For all purposes of subpart
F, insured loss or insured losses or aggregate insured losses resulting
from acts of terrorism after March 31, 2006 shall be limited to those
insured losses resulting from Program Trigger events.
    (d) Conditions for payment of Federal share. Subject to paragraph
(e) of this section, Treasury shall pay the appropriate amount of the
Federal share of compensation to an insurer upon a determination that:
    (1) The insurer is an entity, including an affiliate thereof, that
meets the requirements of Sec. 50.5(f);
    (2) The insurer's insured losses, as defined in Sec. 50.5(e) and
limited by Sec. 50.50(c) (including the allocated dollar value of the
insurer's proportionate share of insured losses from a State residual
market insurance entity or State workers' compensation fund as described
in Sec. 50.35), have exceeded its insurer deductible as defined in
Sec. 50.5(g);
    (3) The insurer has paid or is prepared to pay an underlying insured
loss, based on a filed claim for the insured loss;
    (4) Neither the insurer's claim for Federal payment nor any
underlying claim for an insured loss is fraudulent, collusive, made in
bad faith, dishonest or otherwise designed to circumvent the purposes of
the Act and regulations;
    (5) The insurer had provided a clear and conspicuous disclosure as
required by Sec. Sec. 50.10 through 50.19 and a cap disclosure as
required by Sec. 50.15;
    (6) The insurer offered coverage for insured losses and the offer
was accepted by the insured prior to the occurrence of the loss;
    (7) The insurer took all steps reasonably necessary to properly and
carefully investigate the underlying insured loss and otherwise
processed the underlying insured loss using appropriate insurance
business practices;
    (8) The insured losses submitted for payment are within the scope of
coverage issued by the insurer under the terms and conditions of the
policies for commercial property and casualty insurance as defined in
Sec. 50.5(n); and

[[Page 384]]

    (9) The procedures specified in this Subpart have been followed and
all conditions for payment have been met.
    (e) Adjustments. Treasury may subsequently adjust, including
requiring repayment of, any payment made under paragraph (d) of this
section in accordance with its authority under the Act.
    (f) Suspension of payment for other insured losses. Upon a
determination by Treasury that an insurer has failed to meet any of the
requirements for payment specified in paragraph (d) of this section for
a particular insured loss, Treasury may suspend payment of the Federal
share of compensation for all other insured losses of the insurer
pending investigation and audit of the insurer's insured losses.
    (g) Aggregate industry losses. Treasury will determine the amount of
aggregate industry insured losses resulting from a certified act of
terrorism. If such aggregate industry insured losses exceed the
applicable Program Trigger amounts specified in paragraph (b) of this
section, Treasury will publish notice in the Federal Register that the
act of terrorism is a Program Trigger event.

[71 FR 27571, May 11, 2006, as amended at 73 FR 53365, Sept. 16, 2008]



Sec. 50.51  Adjustments to the Federal share of compensation.

    (a) Aggregate amount of insured losses. The aggregate amount of
insured losses of an insurer in a Program Year used to calculate the
Federal share of compensation shall be reduced by any amounts recovered
by the insurer as salvage or subrogation for its insured losses in the
Program Year.
    (b) Amount of Federal share of compensation. The Federal share of
compensation shall be adjusted as follows:
    (1) No excess recoveries. For any Program Year, the sum of the
Federal share of compensation paid by Treasury to an insurer and the
insurer's recoveries for insured losses from other sources shall not be
greater than the insurer's aggregate amount of insured losses for acts
of terrorism in that Program Year. Amounts recovered for insured losses
in excess of an insurer's aggregate amount of insured losses in a
Program Year shall be repaid to Treasury within 45 days after the end of
the month in which total recoveries of the insurer, from all sources,
become excess. For purposes of this paragraph, amounts recovered from a
reinsurer pursuant to an agreement whereby the reinsurer's right to any
excess recovery has priority over the rights of Treasury shall not be
considered a recovery subject to repayment to Treasury.
    (2) Reduction of amount payable. The Federal share of compensation
for insured losses under the Program shall be reduced by the amount of
other compensation provided by other Federal programs to an insured or a
third party to the extent such other compensation duplicates the
insurance indemnification for those insured losses.
    (i) Other Federal program compensation. For purposes of this
section, compensation provided by other Federal programs for insured
losses means compensation that is provided by Federal programs
established for the purpose of compensating persons for losses in the
event of emergencies, disasters, acts of terrorism, or similar events.
Compensation provided by Federal programs for insured losses excludes
benefit or entitlement payments, such as those made under the Social
Security Act, under laws administered by the Secretary of Veteran
Affairs, railroad retirement benefit payments, and other similar types
of benefit payments.
    (ii) Insurer due diligence. Each insurer shall inquire of each of
its policyholders, insureds, and claimants whether the person receiving
insurance proceeds for an insured loss has received, expects to receive,
or is entitled to receive compensation from another Federal program for
the insured loss, and if so, the source and the amount of the
compensation received or expected. The response, source, and such
amounts shall be reported with each underlying claim on the bordereau
specified in Sec. 50.53(b)(1).



Sec. 50.52  Initial Notice of Insured Loss.

    Each insurer shall submit to Treasury an Initial Notice of Insured
Loss, on a form prescribed by Treasury, whenever the insurer's aggregate
insured losses (including reserves for ``incurred but not reported''
losses) within a Program Year exceed an

[[Page 385]]

amount equal to 50 percent of the insurer's deductible as specified in
Sec. 50.5(g). Insurers are advised the form for the Initial Notice of
Insured Loss will include an initial estimate of aggregate losses for
the Program Year, the amount of the insurer deductible and an estimate
of the Federal share of compensation for the insurer's aggregate insured
losses. In the case of an affiliated group of insurers, the form for the
Initial Notice of Insured Loss will include the name and address of a
single designated insurer within the affiliated group that will serve as
the single point of contact for the purpose of providing loss and
compliance certifications as required in Sec. 50.53 and for receiving,
disbursing, and distributing payments of the Federal share of
compensation in accordance with Sec. 50.54. An insurer, at its option,
may elect to include with its Initial Notice of Insured Loss the
certification of direct earned premium required by Sec. 50.53(b)(3).



Sec. 50.53  Loss certifications.

    (a) General. When an insurer has paid aggregate insured losses that
exceed its insurer deductible, the insurer may make claim upon Treasury
for the payment of the Federal share of compensation for its insured
losses. The insurer shall file an Initial Certification of Loss, on a
form prescribed by Treasury, and thereafter such Supplementary
Certifications of Loss, on a form prescribed by Treasury, as may be
necessary to receive payment for the Federal share of compensation for
its insured losses.
    (b) Initial Certification of Loss. An insurer shall use its best
efforts to file with the Program the Initial Certification of Loss
within 45 days following the last calendar day of the month when an
insurer has paid aggregate insured losses that exceed its insurer
deductible. The Initial Certification of Loss will include the
following:
    (1) A bordereau, on a form prescribed by Treasury, that includes
basic information about each underlying insured loss. For purposes of
this section, a ``bordereau'' is a report of basic information about an
insurer's underlying claims that, in the aggregate, constitute the
insured losses of the insurer. The bordereau will include, but may not
be limited to:
    (i) A listing of each underlying insured loss by catastrophe code
and line of business;
    (ii) The total amount of reinsurance recovered from other sources;
    (iii) A calculation of the aggregate insured losses sustained by the
insurer above its insurer deductible for the Program Year; and
    (iv) The amount the insurer claims as the Federal share of
compensation for its aggregate insured losses.
    (2) A certification that the insurer is in compliance with the
provisions of section 103(b) of the Act and this part, including
certifications that:
    (i) The underlying insured losses listed on the bordereau filed
pursuant to Sec. 50.53(b)(1) either: Have been paid by the insurer; or
will be paid by the insurer upon receipt of an advance payment of the
Federal share of compensation as soon as possible, consistent with the
insurer's normal business practices, but not longer than five business
days after receipt of the Federal share of compensation;
    (ii) The underlying claims for insured losses were filed by persons
who suffered an insured loss, or by persons acting on behalf of such
persons;
    (iii) The underlying claims for insured losses were processed in
accordance with appropriate business practices and the procedures
specified in this subpart;
    (iv) The insurer has complied with the disclosure requirements of
Sec. Sec. 50.10 through 50.19, and the cap disclosure requirement of
Sec. 50.15, for each underlying insured loss that is included in the
amount of the insurer's aggregate insured losses; and
    (v) The insurer has complied with the mandatory availability
requirements of Sec. Sec. 50.20 through 50.24.
    (3) A certification of the amount of the insurer's ``direct earned
premium'' as defined in Sec. 50.5(d), together with the calculation of
its ``insurer deductible'' as defined in Sec. 50.5(g) (provided this
certification was not submitted previously with the Initial Notice of
Insured Loss specified in Sec. 50.52).
    (4) A certification that the insurer will disburse payment of the
Federal

[[Page 386]]

share of compensation in accordance with this subpart.
    (5) A certification that if Treasury has determined a Pro rata Loss
Percentage (PRLP) (see Sec. 50.92), the insurer has complied with
applying the PRLP to insured loss payments, where required.
    (c) Supplementary Certification of Loss. If the total amount of the
Federal share of compensation due an insurer for insured losses under
the Act has not been determined at the time an Initial Certification of
Loss has been filed, the insurer shall file monthly, or on a schedule
otherwise determined by Treasury, Supplementary Certifications of Loss
updating the amount of the Federal share of compensation owed for the
insurer's insured losses. Supplementary Certifications of Loss will
include the following:
    (1) A bordereau described in Sec. 50.53(b)(1); and
    (2) A certification as described in Sec. 50.53(b)(2).
    (d) Supplementary information. In addition to the information
required in paragraphs (b) and (c) of this section, Treasury may require
such additional supporting documentation as required to ascertain the
Federal share of compensation for the insured losses of any insurer.
    (e) State Residual Market Insurance Entities and State Workers'
Compensation Funds. A State residual market insurance entity or State
workers' compensation fund described in Sec. 50.35 shall provide the
Certifications of Loss described in Sec. Sec. 50.53(b) and 50.53(c) for
all its insured losses to each participating insurer at the time it
provides the allocated dollar value of the participating insurer's
proportionate share of insured losses. In addition, at such time the
State residual market insurance entity or State workers' compensation
fund shall provide the certification described in Sec. 50.53(b)(2) to
Treasury. Participating insurers shall treat the allocated dollar value
of their proportionate share of insured losses from a State residual
market insurance entity or State workers' compensation fund as an
insured loss for the purpose of their own reporting to Treasury in
seeking the Federal share of compensation.

[68 FR 9811, Feb. 28, 2003, as amended at 73 FR 53365, Sept. 16, 2008;
74 FR 66067, Dec. 14, 2009]



Sec. 50.54  Payment of Federal share of compensation.

    (a) Timing. Treasury will promptly pay to an insurer the Federal
share of compensation due the insurer for its insured losses. Payment
shall be made in such installments and on such conditions as determined
by the Treasury to be appropriate. Any overpayments by Treasury of the
Federal share of compensation will be offset from future payments to the
insurer or returned to Treasury within 45 days.
    (b) Payment process. Payment of the Federal share of compensation
for insured losses will be made to the insurer designated on the Initial
Notice of Loss required by Sec. 50.52. An insurer that requests payment
of the Federal share of compensation for insured losses must receive
payment through electronic funds transfer. The insurer must establish
either an account for reimbursement as described in paragraph (c) of
this section (if the insurer only seeks reimbursement) or a segregated
account as described in paragraph (d) of this section (if the insurer
seeks advance payments or a combination of advance payments and
reimbursement). Applicable procedures will be posted at
www.treasury.gov/trip or otherwise will be made publicly available.
    (c) Account for reimbursement. An insurer shall designate an account
for the receipt of reimbursement of the Federal share of compensation at
an institution eligible to receive payments through the Automated
Clearing House (ACH) network.
    (d) Segregated account for advance payments. An insurer that seeks
advance payments of the Federal share of compensation as certified
according to Sec. 50.53(b)(2)(i)(B) shall establish an interest-bearing
segregated account into which Treasury will make advance payments as
well as reimbursements to the insurer.
    (1) Definition of segregated account. For purposes of this section,
a segregated account is an interest-bearing

[[Page 387]]

separate account established by an insurer at a financial institution
eligible to receive payments through the ACH network. Such an account is
limited to the purposes of:
    (i) Receiving payments of the Federal share of compensation;
    (ii) Disbursing payments to insureds and claimants; and
    (iii) Transferring payments to the insurer or affiliated insurers
for insured losses reported on the bordereau as already paid.
    (2) Remittance of interest. All interest earned on advance payments
in the segregated account must be remitted at least quarterly to
Treasury's Office of Financial Management or as otherwise prescribed in
applicable procedures.
    (e) Denial or withholding of advance payment. Treasury may deny or
withhold advance payments of the Federal share of compensation to an
insurer if Treasury determines that the insurer has not properly
disbursed previous advances of the Federal share of compensation or
otherwise has not complied with the requirements for advance payment as
provided in this subpart.
    (f) Affiliated group. In the case of an affiliated group of
insurers, Treasury will make payment of the Federal share of
compensation for the insured losses of the affiliated group to the
insurer designated in the Initial Notice of Insured Loss to receive
payment on behalf of the affiliated group. The designated insurer
receiving payment from Treasury must distribute payment to affiliated
insurers in a manner that ensures that each insurer in the affiliated
group is compensated for its share of insured losses, taking into
account a reasonable and fair allocation of the group deductible among
affiliated insurers. Upon payment of the Federal share of compensation
to the designated insurer, Treasury's payment obligation to the insurers
in the affiliated group with respect to any insured losses covered on
the applicable bordereau is discharged to the extent of the payment.



Sec. 50.55  Determination of Affiliations.

    For the purposes of subpart F, an insurer's affiliates for any
Program Year shall be determined by the circumstances existing on the
date of occurrence of the act of terrorism that is the first act of
terrorism in a Program Year to be certified by the Secretary for that
Program Year. Provided, however, if such act of terrorism occurs after
March 31, 2006, the act of terrorism must also be a Program Trigger
event to determine affiliations as provided in this section.

[71 FR 27572, May 11, 2006]



              Subpart G_Audit and Investigative Procedures



Sec. 50.60  Audit authority.

    The Secretary of the Treasury, or an authorized representative,
shall have, upon reasonable notice, access to all books, documents,
papers and records of an insurer that are pertinent to amounts paid to
the insurer as the Federal share of compensation for insured losses, or
pertinent to any Federal Terrorism Policy Surcharge that is imposed
pursuant to subpart H of this part, for the purpose of investigation,
confirmation, audit and examination.

[74 FR 66058, Dec. 14, 2009]



Sec. 50.61  Recordkeeping.

    (a) Each insurer that seeks payment of a Federal share of
compensation under subpart F of this part shall retain such records as
are necessary to fully disclose all material matters pertinent to
insured losses and the Federal share of compensation sought under the
Program, including, but not limited to, records regarding premiums and
insured losses for all commercial property and casualty insurance issued
by the insurer and information relating to any adjustment in the amount
of the Federal share of compensation payable. Insurers shall maintain
detailed records for not less than five (5) years from the termination
dates of all reinsurance agreements involving commercial property and
casualty insurance subject to the Act. Records relating to premiums
shall be retained and available for review for not less than three (3)
years following the conclusion of the policy year. Records relating to
underlying claims shall be retained for

[[Page 388]]

not less than five (5) years following the final adjustment of the
claim.
    (b) Each insurer that collects a Federal Terrorism Policy Surcharge
as required by subpart H of this part shall retain records related to
such Surcharge, including records of the property and casualty insurance
premiums subject to the Surcharge, the amount of the Surcharge imposed
on each policy, aggregate Federal Terrorism Policy Surcharges collected,
and aggregate Federal Terrorism Policy Surcharges remitted to Treasury
during each assessment period. Such records shall be retained and kept
available for review for not less than three (3) years following the
conclusion of the assessment period or settlement of accounts with
Treasury, whichever is later.

[74 FR 66058, Dec. 14, 2009]



              Subpart H_Recoupment and Surcharge Procedures

    Source: 74 FR 66059, Dec. 14, 2009, unless otherwise noted.



Sec. 50.70  Mandatory and discretionary recoupment.

    (a) Pursuant to section 103 of the Act, the Secretary shall impose,
and insurers shall collect, such Federal Terrorism Policy Surcharges as
needed to recover 133 percent of the mandatory recoupment amount for any
Program Year.
    (b) In the Secretary's discretion, the Secretary may recover any
portion of the aggregate Federal share of compensation that exceeds the
mandatory recoupment amount through a Federal Terrorism Policy Surcharge
based on the factors set forth in section 103(e)(7)(D) of the Act.
    (c) If the Secretary is required to impose a Federal Terrorism
Policy Surcharge as provided in paragraph (a) of this section, then the
required amounts, based on the extent to which payments for the Federal
share of compensation have been made by the collection deadlines in
section 103(e)(7)(E) of the Act, shall be collected in accordance with
such deadlines:
    (1) For any act of terrorism that occurs on or before December 31,
2010, the Secretary shall collect all required amounts by September 30,
2012;
    (2) For any act of terrorism that occurs between January 1 and
December 31, 2011, the Secretary shall collect 35 percent of any
required amounts by September 30, 2012, and the remainder by September
30, 2017; and
    (3) For any act of terrorism that occurs on or after January 1,
2012, the Secretary shall collect all required amounts by September 30,
2017.



Sec. 50.71  Determination of recoupment amounts.

    (a) If payments for the Federal share of compensation have been made
for a Program Year, and Treasury determines that insured loss
information is sufficiently developed and credible to serve as a basis
for calculating recoupment amounts, Treasury will make an initial
determination of any mandatory or discretionary recoupment amounts for
that Program Year.
    (b)(1) Within 90 days after certification of an act of terrorism,
the Secretary shall publish in the Federal Register an estimate of
aggregate insured losses which shall be used as the basis for initially
determining whether mandatory recoupment will be required.
    (2) If at any time Treasury projects that payments for the Federal
share of compensation will be made for a Program Year, and that in order
to meet the collection timing requirements of section 103(e)(7)(E) of
the Act it is necessary to use an estimate of such payments as a basis
for calculating recoupment amounts, Treasury will make an initial
determination of any mandatory recoupment amounts for that Program Year.
    (c) Following the initial determination of recoupment amounts for a
Program Year, Treasury will recalculate any mandatory or discretionary
recoupment amount as necessary and appropriate, and at least annually,
until a final recoupment amount for the Program Year is determined.
Treasury will compare any recalculated recoupment amount to amounts
already remitted and/or to be

[[Page 389]]

remitted to Treasury for a Federal Terrorism Policy Surcharge previously
established to determine whether any additional amount will be recouped
by Treasury.
    (d) For the purpose of determining initial or recalculated
recoupment amounts, Treasury may issue a data call to insurers for
insurer deductible and insured loss information by Program Year.
Treasury's determination of the aggregate amount of insured losses from
Program Trigger Events of all insurers for a Program Year will be based
on the amounts reported in response to a data call and any other
information Treasury in its discretion considers appropriate. Submission
of data in response to a data call shall be on a form promulgated by
Treasury.



Sec. 50.72  Establishment of Federal Terrorism Policy Surcharge.

    (a) Treasury will establish the Federal Terrorism Policy Surcharge
based on the following factors and considerations:
    (1) In the case of a mandatory recoupment amount, the requirement to
collect 133 percent of that amount;
    (2) The total dollar amount to be recouped as a percentage of the
latest available annual aggregate industry direct written premium
information;
    (3) The adjustment factors for terrorism loss risk-spreading
premiums described in section 103(e)(8)(D) of the Act;
    (4) The annual 3 percent limitation on terrorism loss risk-spreading
premiums collected on a discretionary basis as provided in section
103(e)(8)(C) of the Act;
    (5) A preferred minimum initial assessment period of one full year
and subsequent extension periods in full year increments;
    (6) The collection timing requirements of section 103(e)(7)(E) of
the Act;
    (7) The likelihood that the amount of the Federal Terrorism Policy
Surcharge may result in the collection of an aggregate recoupment amount
in excess of the planned recoupment amount; and
    (8) Such other factors as the Secretary considers important.
    (b) The Federal Terrorism Policy Surcharge shall be the obligation
of the policyholder and is payable to the insurer with the premium for a
property and casualty insurance policy in effect during the assessment
period established by Treasury. See Sec. 50.74(c).



Sec. 50.73  Notification of recoupment.

    (a) Treasury will provide notifications of recoupment through
publication of notices in the Federal Register or in another manner
Treasury deems appropriate, based upon the circumstances of the act of
terrorism under consideration.
    (b) Treasury will provide reasonable advance notice to insurers of
any initial Federal Terrorism Policy Surcharge effective date. This
effective date shall be January 1, unless such date would not provide
for sufficient notice of implementation while meeting the collection
timing requirements of section 103(e)(7)(E) of the Act.
    (c) Treasury will provide reasonable advance notice to insurers of
any modification or cessation of the Federal Terrorism Policy Surcharge.
    (d) Treasury will provide notification to insurers annually as to
the continuation of the Federal Terrorism Policy Surcharge.



Sec. 50.74  Collecting the Surcharge.

    (a) Insurers shall collect a Federal Terrorism Policy Surcharge from
policyholders as required by Treasury.
    (b) Policies subject to the Federal Terrorism Policy Surcharge are
those for which direct written premium is reported on commercial lines
of business on the NAIC's Exhibit of Premiums and Losses of the NAIC
Annual Statement (commonly known as Statutory Page 14) as provided in
Sec. 50.5(u)(1), or equivalently reported.
    (c) For policies subject to the Federal Terrorism Policy Surcharge,
the Surcharge shall be imposed and collected on a written premium basis
for policies that incept or renew during the assessment period. All new,
renewal, mid-term, and audit premiums for a policy term are subject to
the Surcharge in effect on the policy term effective date.
Notwithstanding this paragraph, if the premium for a policy term that
would otherwise be subject to the Surcharge is revised after the end of
the reporting period described in Sec. 50.75(e), then any

[[Page 390]]

additional premium attributable to such revision is not subject to the
Surcharge. For purposes of this subpart:
    (1) Written premium basis means the premium amount charged a
policyholder by an insurer for property and casualty insurance as
defined in Sec. 50.5(u), including all premiums, policy expense
constants and fees defined as premium pursuant to the Statements of
Statutory Accounting Principles established by the National Association
of Insurance Commissioners, as adopted by the state for which the
premium will be reported.
    (2) In the case of a policy providing multiple insurance coverages,
if an insurer cannot identify the premium amount charged a policyholder
specifically for property and casualty insurance under the policy, then:
    (i) If the insurer estimates that the portion of the premium amount
charged for coverage other than property and casualty insurance is de
minimis to the total premium for the policy, the insurer may impose and
collect from the policyholder a Surcharge amount based on the total
premium for the policy, but
    (ii) If the insurer estimates that the portion of the premium amount
charged for coverage other than property and casualty insurance is not
de minimis, the insurer shall impose and collect from the policyholder a
Surcharge amount based on a reasonable estimate of the premium amount
for the property and casualty insurance coverage under the policy.
    (3) The Federal Terrorism Policy Surcharge is not considered
premium.
    (d) A policyholder must pay the applicable Federal Terrorism Policy
Surcharge when due. The insurer shall have such rights and remedies to
enforce the collection of the Surcharge that are the equivalent to those
that exist under applicable state or other law for nonpayment of
premium.
    (e) When an insurer returns an unearned premium, or otherwise
refunds premium to a policyholder, it shall also return any Federal
Terrorism Policy Surcharge collected that is attributable to the
refunded premium. Notwithstanding this paragraph, if the written premium
for a policy is revised and refunded after the end of the reporting
period described in Sec. 50.75(e), then the insurer is not required to
refund any Surcharge that is attributable to the refunded premium.
    (f) Notwithstanding paragraphs (a), (b), and (c) of this section, if
the expense of collecting the Federal Terrorism Policy Surcharge from
all policyholders of an insurer during an assessment period exceeds the
amount of the Surcharges anticipated to be collected, such insurer may
satisfy its obligation to collect by omitting actual collection and
instead remitting to Treasury the amount otherwise due.
    (g) The Federal Terrorism Policy Surcharge is repayment of Federal
financial assistance in an amount required by law. No fee or commission
shall be charged on the Federal Terrorism Policy Surcharge.



Sec. 50.75  Remitting the surcharge.

    (a) Each insurer shall provide a statement of direct written premium
and Federal Terrorism Policy Surcharge to Treasury on a monthly basis,
starting with the first month within the assessment period, through
November of the calendar year and on an annual basis as of the last
month of the calendar year. Reporting will be on a form prescribed by
Treasury and will be due according to the following schedule:
    (1) For each month beginning in the first month of the assessment
period through November, the last business day of the calendar month
following the month for which premium is reported, and
    (2) March 1 for the calendar year.
    (b) The monthly statements provided to Treasury will include the
following:
    (1) Cumulative calendar year direct written premium adjusted for
premium not subject to the Federal Terrorism Policy Surcharge,
summarized by policy year.
    (2) The aggregate Federal Terrorism Policy Surcharge amount
calculated by applying the established Surcharge percentage to the
insurer's adjusted direct written premium by policy year.
    (3) Insurer certification of the submission.
    (c) The annual statements to be provided to Treasury will include
the following:

[[Page 391]]

    (1) Direct written premium as defined in Sec. 50.5(g), adjusted for
premium not subject to the Federal Terrorism Policy Surcharge,
summarized by policy year and by commercial line of insurance as
specified in Sec. 50.5(u).
    (2) The aggregate Federal Terrorism Policy Surcharge amount
calculated by applying the established Surcharge percentage to the
insurer's adjusted direct written premium by policy year.
    (3) In the case of an insurer that has chosen not to collect the
Federal Terrorism Policy Surcharge from its policyholders as provided in
Sec. 50.74(f), a certification that the expense of collecting the
Surcharge during the assessment period would have exceeded the amount of
the Surcharges collected over the assessment period.
    (4) Insurer certification of the submission.
    (d) The calculated aggregate Federal Terrorism Policy Surcharge
amount, as described in paragraphs (b)(2) and (c)(2) of this section,
shall be remitted to Treasury upon submission of each monthly and annual
statement. Through its submitted statements, an insurer obtains credit
for a refund of any Federal Terrorism Policy Surcharge previously
remitted to Treasury that was subsequently returned by the insurer to a
policyholder as attributable to refunded premium under Sec. 50.74(e). A
negative calculated amount in a monthly or annual statement indicates
payment from Treasury is due to the insurer.
    (e) Reporting shall continue for the one-year period following the
end of the assessment period established by Treasury, unless otherwise
permitted by Treasury.



Sec. 50.76  Insurer responsibility.

    For purposes of the collection, reporting and remittance of Federal
Terrorism Policy Surcharges to Treasury, an ``insurer,'' as defined in
Sec. 50.5(l), shall not include any affiliate of the insurer.



       Subpart I_Federal Cause of Action; Approval of Settlements

    Source: 69 FR 44941, July 28, 2004, unless otherwise noted.



Sec. 50.80  Federal cause of action and remedy.

    (a) General. If the Secretary certifies an act as an act of
terrorism pursuant to section 102 of the Act, there shall exist a
Federal cause of action for property damage, personal injury, or death
arising out of or resulting from such act of terrorism, pursuant to
section 107 of the Act, which shall be the exclusive cause of action and
remedy for claims for property damage, personal injury, or death arising
out of or relating to such act of terrorism, except as provided in
paragraph (c) of this section.
    (b) Effective period. The exclusive Federal cause of action and
remedy described in paragraph (a) of this section shall exist only for
causes of action for property damage, personal injury, or death that
arise out of or result from acts of terrorism that occur or occurred
during the effective period of the Program.
    (c) Rights not affected. Nothing in section 107 of the Act or this
Subpart shall in any way:
    (1) Limit the liability of any government, organization, or person
who knowingly participates in, conspires to commit, aids and abets, or
commits any act of terrorism;
    (2) Affect any party's contractual right to arbitrate a dispute; or
    (3) Affect any provision of the Air Transportation Safety and System
Stabilization Act (Pub. L. 107-42; 49 U.S.C. 40101 note).



Sec. 50.81  State causes of action preempted.

    All State causes of action of any kind for property damage, personal
injury, or death arising out of or resulting from an act of terrorism
that are otherwise available under State law are preempted, except that,
pursuant to section 107(b) of the Act, nothing in this section shall
limit in any way the liability of any government, organization, or
person who knowingly participates in, conspires to commit, aids and
abets, or commits the act of terrorism certified by the Secretary.

[[Page 392]]



Sec. 50.82  Advance approval of settlements.

    (a) Mandatory submission of settlements for advance approval. An
insurer shall submit to Treasury for advance approval any proposed
agreement to settle or compromise any Federal cause of action for
property damage, personal injury, or death, asserted by a third-party or
parties against an insured, involving an insured loss, all or part of
the payment of which the insurer intends to submit as part of its claim
for Federal payment under the Program, when:
    (1) Any portion of the proposed settlement amount that is
attributable to an insured loss or losses involving personal injury or
death in the aggregate is $2 million or more per third-party claimant,
regardless of the number of causes of action or insured losses being
settled; or
    (2) Any portion of the proposed settlement amount that is
attributable to an insured loss or losses involving property damage
(including loss of use) in the aggregate is $10 million or more per
third-party claimant, regardless of the number of causes of action or
insured losses being settled.
    (b) Discretionary review of other settlements. Notwithstanding
paragraph (a), Treasury may require that an insurer submit for review
and advance approval any proposed agreement to settle or compromise any
Federal cause of action for property damage, personal injury, or death,
asserted by a third-party or parties against an insured, involving an
insured loss, all or part of the payment of which the insurer intends to
submit as part of its claim for Federal payment under the Program where
the settlement amounts are below the applicable monetary thresholds
identified in paragraphs (a)(1) and (2) of this section.
    (c) Factors. In determining whether to approve a proposed
settlement, Treasury will consider the nature of the loss, the facts and
circumstances surrounding the loss, and other factors such as whether:
    (1) The proposed settlement compensates for a third-party's loss,
the liability for which is an insured loss under the terms and
conditions of the underlying commercial property and casualty insurance
policy, as certified by the insurer pursuant to Sec. 50.83(d)(2);
    (2) Any amount of the proposed settlement is attributable to
punitive or exemplary damages intended to punish or deter (whether or
not specifically so described as such damages);
    (3) The settlement amount offsets amounts received from the United
States pursuant to any other Federal program;
    (4) The settlement amount does not include any items such as fees
and expenses of attorneys, experts, and other professionals that have
caused the insured losses under the underlying commercial property and
casualty insurance policy to be overstated; and
    (5) Any other criteria that Treasury may consider appropriate,
depending on the facts and circumstances surrounding the settlement,
including the information contained in Sec. 50.83.
    (d) Settlement without seeking advance approval or despite
disapproval. If an insurer settles a cause of action or agrees to the
settlement of a cause of action without submitting the proposed
settlement for Treasury's advance approval in accordance with paragraph
(a) or (b) of this section, and in accordance with Sec. 50.83 or
despite Treasury's disapproval of the proposed settlement, the insurer
will not be entitled to include the paid settlement amount (or portion
of the settlement amount, to the extent partially disapproved) in its
aggregate insured losses for purposes of calculating the Federal share
of compensation of its insured losses, unless the insurer can
demonstrate, to the satisfaction of Treasury, extenuating circumstances.



Sec. 50.83  Procedure for requesting approval of proposed settlements.

    (a) Submission of notice. Insurers must request advance approval of
a proposed settlement by submitting a notice of the proposed settlement
and other required information in writing to the Terrorism Risk
Insurance Program Office or its designated representative. The address
where notices are to be submitted will be available at http://
www.treasury.gov/trip following any certification of an act of terrorism
pursuant to section 102(1) of the Act.

[[Page 393]]

    (b) Complete notice. Treasury will review requests for advance
approval and determine whether additional information is needed to
complete the notice.
    (c) Treasury response or deemed approval. Within 30 days after
Treasury's receipt of a complete notice, or as extended in writing by
Treasury, Treasury may issue a written response and indicate its partial
or full approval or rejection of the proposed settlement. If Treasury
does not issue a response within 30 days after Treasury's receipt of a
complete notice, unless extended in writing by Treasury, the request for
advance approval is deemed approved by Treasury. Any settlement is still
subject to review under the claim procedures pursuant to Sec. 50.50.
    (d) Notice format. A notice of a proposed settlement should be
entitled, ``Notice of Proposed Settlement--Request for Approval,'' and
should provide the full name and address of the submitting insurer and
the name, title, address, and telephone number of the designated contact
person. An insurer must provide all relevant information, including the
following, as applicable:
    (1) A brief description of the insured's underlying claim, the
insured's loss, the amount of the claim, the operative policy terms,
defenses to coverage, and all damages sustained;
    (2) A certification by the insurer that the settlement is for a
third-party's loss the liability for which is an insured loss under the
terms and conditions of the underlying commercial property and casualty
insurance policy;
    (3) An itemized statement of all damages by category (i.e., actual,
economic and non-economic loss, punitive damages, etc.);
    (4) A statement from the insurer or its attorney in support of the
settlement.;
    (5) The total dollar amount of the proposed settlement;
    (6) Indication as to whether the settlement was negotiated by
counsel;
    (7) The amount to be paid that will compensate for any items such as
fees and expenses of attorneys, experts, and other professionals for
their services and expenses related to the insured loss and/or
settlement and the net amount to be received by the third-party after
such payment;
    (8) The amount received from the United States pursuant to any other
Federal program for compensation of insured losses related to an act of
terrorism;
    (9) The proposed terms of the written settlement agreement,
including release language and subrogation terms;
    (10) If requested by Treasury, other relevant agreements, including:
    (i) Admissions of liability or insurance coverage;
    (ii) Determinations of the number of occurrences under a commercial
property and casualty insurance policy;
    (iii) The allocation of paid amounts or amounts to be paid to
certain policies, or to specific policy, coverage and/or aggregate
limits; and
    (iv) Any other agreement that may affect the payment or amount of
the Federal share of compensation to be paid to the insurer;
    (11) A statement indicating whether the proposed settlement has been
approved by the Federal court or is subject to such approval and whether
such approval is expected or likely; and
    (12) Such other information that is related to the insured loss as
may be requested by Treasury that it deems necessary to evaluate the
proposed settlement.



Sec. 50.84  Subrogation.

    An insurer shall not waive its rights of subrogation under its
property and casualty insurance policy and preserve the subrogation
right of the United States as provided by section 107(c) of the Act by
not taking any action that would prejudice the United States' right of
subrogation.



Sec. 50.85  Amendment related to settlement approval.

    Section 107(a)(6) of the Act, added December 22, 2005, provides that
procedures and requirements established by the Secretary under Sec.
50.82 (as in effect on the date of issuance of that section in final
form) shall apply to any cause of action described in section 107(a)(1)
of the Act.

[71 FR 27572, May 11, 2006]

[[Page 394]]



                    Subpart J_Cap on Annual Liability

    Source: 74 FR 66067, Dec. 14, 2009, unless otherwise noted.



Sec. 50.90  Cap on annual liability.

    Pursuant to Section 103 of the Act, if the aggregate insured losses
exceed $100,000,000,000 during any Program Year:
    (a) The Secretary shall not make any payment for any portion of the
amount of such losses that exceeds $100,000,000,000;
    (b) No insurer that has met its insurer deductible shall be liable
for the payment of any portion of the amount of such losses that exceeds
$100,000,000,000; and
    (c) The Secretary shall determine the pro rata share of insured
losses to be paid by each insurer that incurs insured losses under the
Program.



Sec. 50.91  Notice to Congress.

    Pursuant to section 103(e)(3) of the Act, the Secretary shall
provide an initial notice to Congress within 15 days of the
certification of an act of terrorism, stating whether the Secretary
estimates that aggregate insured losses will exceed $100,000,000,000 for
the Program Year in which the event occurs. Such initial estimate shall
be based on insured loss amounts as compiled by insurance industry
statistical organizations and any other information the Secretary in his
or her discretion considers appropriate. The Secretary shall also notify
Congress if estimated or actual aggregate insured losses exceed
$100,000,000,000 during any Program Year.



Sec. 50.92  Determination of pro rata share.

    (a) Pro rata loss percentage (PRLP) is the percentage determined by
the Secretary to be applied by an insurer against the amount that would
otherwise be paid by the insurer under the terms and conditions of an
insurance policy providing property and casualty insurance under the
Program if there were no cap on annual liability under section
103(e)(2)(A) of the Act.
    (b) Except as provided in paragraph (e) of this section, if Treasury
estimates that aggregate insured losses may exceed the cap on annual
liability for a Program Year, then Treasury will determine a PRLP. The
PRLP applies to insured loss payments by insurers for insured losses
incurred in the subject Program Year, as specified in Sec. 50.93, from
the effective date of the PRLP, as established by Treasury, until such
time as Treasury provides notice that the PRLP is revised. Treasury will
determine the PRLP based on the following considerations:
    (1) Estimates of insured losses from insurance industry statistical
organizations;
    (2) Any data calls issued by Treasury (see Sec. 50.94);
    (3) Expected reliability and accuracy of insured loss estimates and
likelihood that insured loss estimates could increase;
    (4) Estimates of insured losses and expenses not included in
available statistical reporting;
    (5) Such other factors as the Secretary considers important.
    (c) Treasury shall provide notice of the determination of the PRLP
through publication in the Federal Register, or in another manner
Treasury deems appropriate, based upon the circumstances of the act of
terrorism under consideration.
    (d) As appropriate, Treasury will determine any revision to a PRLP
based on the same considerations listed in paragraph (b) of this
section, and will provide notice for its application to insured loss
payments.
    (e) If Treasury estimates based on an initial act of terrorism or
subsequent act of terrorism within a Program Year that aggregate insured
losses may exceed the cap on annual liability, but an appropriate PRLP
cannot yet be determined, Treasury will provide notification advising
insurers of this circumstance and, after consulting with the relevant
State authorities, may initiate the action described in either paragraph
(e)(1) or (e)(2) of this section.
    (1) Call a hiatus in insurer loss payments for insured losses of up
to two weeks. In such a circumstance, Treasury will determine a PRLP as
quickly as possible. The PRLP, as later determined, will be effective
retroactively

[[Page 395]]

as of the start of the hiatus. Any insured losses submitted in support
of an insurer's claim for the Federal share of compensation will be
reviewed for the insurer's compliance with pro rata payments in
accordance with the effective date of the PRLP.
    (2) Determine an interim PRLP. (i) An interim PRLP is an amount
determined without the availability of information necessary for
consideration of all factors listed in Sec. 50.92(b). It is a
conservatively low percentage amount determined in order to facilitate
initial partial claim payments by insurers after an act of terrorism and
prior to the time that information becomes available to determine a PRLP
based on consideration of the factors listed in Sec. 50.92(b).
    (ii) In such a circumstance, Treasury will determine a PRLP to
replace the interim PRLP as quickly as possible. The PRLP, as later
determined, will be effective retroactively as of the effective date of
the interim PRLP. Any insured losses submitted in support of an
insurer's claim for the Federal share of compensation will be reviewed
for the insurer's compliance with pro rata payments in accordance with
the effective date of the interim PRLP, or as later replaced by the PRLP
as appropriate.



Sec. 50.93  Application of pro rata share.

    An insurer shall apply the PRLP to determine the pro rata share of
each insured loss to be paid by the insurer on all insured losses where
there is not an agreement on a complete and final settlement as
evidenced by a signed settlement agreement or other means reviewable by
a third party as of the effective date established by Treasury. Payments
based on the application of the PRLP and determination of the pro rata
share satisfy the insurer's liability for payment under the Program.
Application of the PRLP and the determination of the pro rata share are
the exclusive means for calculating the amount of insured losses for
Program purposes. The pro rata share is subject to the following:
    (a) The pro rata share is determined based on the estimated or
actual final claim settlement amount that would otherwise be paid.
    (b) All policies. If partial payments have already been made as of
the effective date of the PRLP, then the pro rata share for that loss is
the greater of the amount already paid as of the effective date of the
PRLP or the amount computed by applying the PRLP to the estimated or
actual final claim settlement amount that would otherwise be paid.
    (c) Certain workers' compensation insurance policies. If an
insurer's payments under a workers' compensation policy cumulatively
exceed the amount computed by applying the PRLP to the estimated or
actual final claim settlement amount that would otherwise be paid
because such estimated or actual final settlement amount is reduced from
a previous estimate, then the insurer may request a review and
adjustment by Treasury in the calculation of the Federal share of
compensation. In requesting such a review, the insurer must submit
information to supplement its Certification of Loss demonstrating a
reasonable estimate invalidated by unexpected conditions differing from
prior assumptions including, but not limited to, an explanation and the
basis for the prior assumptions.
    (d) If an insurer has not yet made payments in excess of its insurer
deductible, the rules in this paragraph apply.
    (1) If the insurer estimates that it will exceed its insurer
deductible making payments based on the application of the PRLP to its
insured losses, then the insurer shall apply the PRLP as of the
effective date specified in Sec. 50.92(b).
    (2)(i) If the insurer estimates that it will not exceed its insurer
deductible making payments based on the application of the PRLP to its
insured losses, then the insurer may make payments on the same basis as
prior to the effective date of the PRLP. The insurer may also make
payments on the basis of applying some other pro rata amount it
determines that is greater than the PRLP, where the insurer estimates
that application of such other pro rata amount will result in it not
exceeding its insurer deductible. The insurer remains liable for losses
in accordance with Sec. 50.95(c).

[[Page 396]]

    (ii) If an insurer estimates that it will not exceed its insurer
deductible and has made payments on the basis provided in (2)(i), but
thereafter reaches its insurer deductible, then the insurer shall apply
the PRLP to any remaining insured losses. When such an insurer submits a
claim for the Federal share of compensation, the amount of the insurer's
losses will be deemed to be the amount it would have paid if it had
applied the PRLP as of the effective date, and the Federal share of
compensation will be calculated on that amount. However, an insurer may
request an exception if it can demonstrate that its estimate was
invalidated as a result of insured losses from a subsequent act of
terrorism.



Sec. 50.94  Data call authority.

    For the purpose of determining initial or recalculated PRLPs,
Treasury may issue a data call to insurers for insured loss information.
Submission of data in response to a data call shall be on a form
promulgated by Treasury.



Sec. 50.95  Final amount.

    (a) Treasury shall determine if, as a final proration, remaining
insured loss payments, as well as adjustments to previous insured loss
payments, can be made by insurers based on an adjusted PLRP, and
aggregate insured losses still remain within the cap on annual
liability. In such a circumstance, Treasury will notify insurers as to
the final PRLP and its application to insured losses.
    (b) If paragraph (a) of this section applies, Treasury may require,
as part of the insurer submission for the Federal share of compensation
for insured losses, a supplementary explanation regarding how additional
payments will be provided on previously settled insured losses.
    (c) An insurer that has prorated its insured losses, but that has
not met its insurer deductible, remains liable for loss payments that in
the aggregate bring the insurer's total insured loss payments up to an
amount equal to the lesser of its insured losses without proration or
its insurer deductible.

[[Page 397]]

          Subtitle B--Regulations Relating to Money and Finance

[[Page 399]]



         CHAPTER I--MONETARY OFFICES, DEPARTMENT OF THE TREASURY




  --------------------------------------------------------------------


  Editorial Note: For a document summarizing part 103's removal and
distribution into 31 CFR chapter X, see 75 FR 65812, Oct. 26, 2010.
Part                                                                Page
51-55

[Reserved]

56              Domestic gold and silver operations sale of
                    silver..................................         401
82              5-Cent and one-cent coin regulations........         401
91              Regulations governing conduct in or on the
                    Bureau of the Mint buildings and grounds         402
92              United States Mint operations and procedures         404
100             Exchange of paper currency and coin.........         411
101             Mitigation of forfeiture of counterfeit gold
                    coins...................................         416
123

[Reserved]

128             Reporting of international capital and
                    foreign-currency transactions and
                    positions...............................         417
129             Portfolio investment survey reporting.......         421
130-131

[Reserved]

132             Prohibition on funding of unlawful Internet
                    gambling................................         422
133-148

[Reserved]

149             Calculation of maximum obligation limitation         432
150             Financial research fund.....................         433
151-199

[Reserved]

[[Page 401]]

                         PARTS 51	55 [RESERVED]



PART 56_DOMESTIC GOLD AND SILVER OPERATIONS SALE OF SILVER--Table of
Contents



Sec.
56.1 Conditions upon which silver will be sold.
56.2 Sales price.

    Authority: Sec. 209, 79 Stat. 257; 31 U.S.C. 405a-1.



Sec. 56.1  Conditions upon which silver will be sold.

    The General Services Administration, as agent for the Treasury
Department, will conduct periodic sales of silver as agreed upon between
GSA and the Treasury Department. Sales will be under competitive bidding
procedures established by agreement between GSA and the Treasury
Department. Details of the bidding and selling procedures are obtainable
by telephone or by writing to General Services Administration, Property
Management and Disposal Service, Industry Materials Division, Metals
Project, Washington, DC 20405.

[32 FR 13380, Sept. 22, 1967]



Sec. 56.2  Sales price.

    Sales of silver will be at prices offered through the competitive
bidding procedures referred to in Sec. 56.1, and accepted by the GSA.

[32 FR 13380, Sept. 22, 1967]



PART 82_5-CENT AND ONE-CENT COIN REGULATIONS--Table of Contents



Sec.
82.1 Prohibitions.
82.2 Exceptions.
82.3 Definitions.
82.4 Penalties.

    Authority: 31 U.S.C. 5111(d).

    Source: 72 FR 61055, Oct. 29, 2007, unless otherwise noted.



Sec. 82.1  Prohibitions.

    Except as specifically authorized by the Secretary of the Treasury
(or designee) or as otherwise provided in this part, no person shall
export, melt, or treat:
    (a) Any 5-cent coin of the United States; or
    (b) Any one-cent coin of the United States.



Sec. 82.2  Exceptions.

    (a) The prohibition contained in Sec. 82.1 against the exportation
of 5-cent coins and one-cent coins of the United States shall not apply
to:
    (1) The exportation in any one shipment of 5-cent coins and one-cent
coins having an aggregate face value of not more than $100 that are to
be legitimately used as money or for numismatic purposes. Nothing in
this paragraph shall be construed to authorize export for the purpose of
sale or resale of coins for melting or treatment by any person.
    (2) The exportation of 5-cent coins and one-cent coins carried on an
individual, or in the personal effects of an individual, departing from
a place subject to the jurisdiction of the United States, when the
aggregate face value is not more than $5, or when the aggregate face
value is not more than $25 and it is clear that the purpose for
exporting such coins is for legitimate personal numismatic, amusement,
or recreational use.
    (b) The prohibition contained in Sec. 82.1 against the treatment of
5-cent coins and one-cent coins shall not apply to the treatment of
these coins for educational, amusement, novelty, jewelry, and similar
purposes as long as the volumes treated and the nature of the treatment
makes it clear that such treatment is not intended as a means by which
to profit solely from the value of the metal content of the coins.
    (c) The prohibition contained in Sec. 82.1 against the exportation,
melting, or treatment of 5-cent and one-cent coins of the United States
shall not apply to coins exported, melted, or treated incidental to the
recycling of other materials so long as--
    (1) Such 5-cent and one-cent coins were not added to the other
materials for their metallurgical value;
    (2) The volumes of the 5-cent coins and one-cent coins, relative to
the volumes of the other materials recycled, makes it clear that the
presence of such coins is merely incidental; and

[[Page 402]]

    (3) The separation of the 5-cent and one-cent coins from the other
materials would be impracticable or cost prohibitive.
    (d) The prohibition contained in Sec. 82.1 against the exportation,
melting, or treatment of 5-cent coins shall not apply to 5-cent coins
inscribed with the years 1942, 1943, 1944, or 1945 that are composed of
an alloy comprising copper, silver and manganese.
    (e) The prohibition contained in Sec. 82.1 against the exportation
of 5-cent coins and one-cent coins shall not apply to 5-cent coins and
one-cent coins exported by a Federal Reserve Bank or a domestic
depository institution, or to a foreign central bank, when the
exportation of such 5-cent coins and one-cent coins is for use as
circulating money.
    (f)(1) The prohibition contained in Sec. 82.1 against exportation,
melting, or treatment of 5-cent coins and one-cent coins of the United
States shall not apply to coins exported, melted, or treated under a
written license issued by the Secretary of the Treasury (or designee).
    (2) Applications for licenses should be transmitted to the Director,
United States Mint, 801 9th Street, NW., Washington, DC 20220.



Sec. 82.3  Definitions.

    (a) 5-cent coin of the United States means a 5-cent coin minted and
issued by the Secretary of the Treasury pursuant to 31 U.S.C.
5112(a)(5).
    (b) One-cent coin of the United States means a one-cent coin minted
and issued by the Secretary of the Treasury pursuant to 31 U.S.C.
5112(a)(6).
    (c) Export means to remove, send, ship, or carry, or to take any
action with the intent to facilitate a person's removing, sending,
shipping, or carrying, from the United States or any place subject to
the jurisdiction thereof, to any place outside of the United States or
to any place not subject to the jurisdiction thereof.
    (d) Person means any individual, partnership, association,
corporation, or other organization, but does not include an agency of
the Government of the United States.
    (e) Treat or treatment means to smelt, refine, or otherwise treat by
heating, or by a chemical, electrical, or mechanical process.



Sec. 82.4  Penalties.

    (a) Any person who exports, melts, or treats 5-cent coins or one-
cent coins of the United States in violation of Sec. 82.1 shall be
subject to the penalties specified in 31 U.S.C. 5111(d), including a
fine of not more than $10,000 and/or imprisonment of not more than 5
years.
    (b) In addition to the penalties prescribed by 31 U.S.C. 5111(d), a
person violating the prohibitions of this part may be subject to other
penalties provided by law, including 18 U.S.C. 1001(a).



PART 91_REGULATIONS GOVERNING CONDUCT IN OR ON THE BUREAU OF THE MINT
BUILDINGS AND GROUNDS--Table of Contents



Sec.
91.1 Authority.
91.2 Applicability.
91.3 Recording presence.
91.4 Preservation of property.
91.5 Compliance with signs and directions.
91.6 Nuisances.
91.7 Gambling.
91.8 Alcoholic beverages, narcotics, hallucinogenic and dangerous drugs.
91.9 Soliciting, vending, debt collection, and distribution of
          handbills.
91.10 Photographs.
91.11 Dogs and other animals.
91.12 Vehicular and pedestrian traffic.
91.13 Weapons and explosives.
91.14 Penalties and other law.

    Authority: 5 U.S.C. 301, by delegation from the Administrator of
General Services, 35 FR 14426, and Treasury Department Order 177-25
(Revision 2), 38 FR 21947.

    Source: 34 FR 503, Jan. 14, 1969, unless otherwise noted.



Sec. 91.1  Authority.

    The regulations in this part governing conduct in and on the Bureau
of the Mint buildings and grounds located as follows: U.S. Mint, Colfax,
and Delaware Streets, Denver, Colorado; U.S. Bullion Depository, Fort
Knox, Kentucky; U.S. Assay Office, 32 Old Slip New York, New York; U.S.
Mint, 5th and Arch Streets, Philadelphia, Pennsylvania; U.S. Assay
Office, 155 Hermann Street, and the Old U.S. Mint

[[Page 403]]

Building, 88 Fifth Street, San Francisco, California; and U.S. Bullion
Depository, West Point, New York; are promulgated pursuant to the
authority vested in the Secretary of the Treasury, including 5 U.S.C.
301, and that vested in him by delegation from the Administrator of
General Services, 38 FR 20650 (1973), and in accordance with the
authority vested in the Director of the Mint by Treasury Department
Order No. 177-25 Revision 2), dated August 8, 1973, 38 FR 21947 (1973).

[38 FR 24897, Sept. 11, 1973]



Sec. 91.2  Applicability.

    The regulations in this part apply to the buildings and grounds of
the Bureau of the Mint located as follows: U.S. Mint, Colfax and
Delaware Streets, Denver, Colorado; U.S. Bullion Depository, Fort Knox,
Kentucky; U.S. Assay Office, 32 Old Slip, New York, New York; U.S. Mint,
Fifth and Arch Streets, Philadelphia, Pennsylvania; U.S. Assay Office,
155 Hermann Street, and the Old U.S. Mint Building, 88 Fifth Street, San
Francisco, California; and U.S. Bullion Depository, West Point, New
York; and to all persons entering in or on such property. Unless
otherwise stated herein, the Bureau of the Mint buildings and grounds
shall be referred to in these regulations as the ``property''.

[38 FR 24897, Sept. 11, 1973]



Sec. 91.3  Recording presence.

    Except as otherwise ordered, the property shall be closed to the
public during other than normal working hours. The property shall also
be closed to the public when, in the opinion of the senior supervising
official of any Bureau of the Mint establishment covered by these
regulations, or his delegate, an emergency situation exists, and at such
other times as may be necessary for the orderly conduct of the
Government's business. Admission to the property during periods when
such property is closed to the public will be limited to authorized
individuals who will be required to sign the register and/or display
identification documents when requested by the guard.



Sec. 91.4  Preservation of property.

    It shall be unlawful for any person without proper authority to
wilfully destroy, damage, deface, or remove property or any part thereof
or any furnishings therein.



Sec. 91.5  Compliance with signs and directions.

    Persons in and on the property shall comply with the instructions of
uniformed Bureau of the Mint guards (U.S. Special Policemen), other
authorized officials, and official signs of a prohibitory or directory
nature.



Sec. 91.6  Nuisances.

    The use of loud, abusive, or profane language, unwarranted
loitering, unauthorized assembly, the creation of any hazard to persons
or things, improper disposal of rubbish, spitting, prurient prying, the
commission of any obscene or indecent act, or any other disorderly
conduct on the property is prohibited. The throwing of any articles of
any kind in, upon, or from the property and climbing upon any part
thereof, is prohibited. The entry, without specific permission, upon any
part of the property to which the public does not customarily have
access, is prohibited.



Sec. 91.7  Gambling.

    (a) Participating in games for money or other property, the
operation of gambling devices, the conduct of a lottery or pool, the
selling or purchasing of numbers tickets, or any other gambling in or on
the property, is prohibited.
    (b) Possession in or on the property of any numbers slip or ticket,
record, notation, receipt, or other writing of a type ordinarily used in
any illegal form of gambling such as a tip sheet or dream book, unless
explained to the satisfaction of the head of the bureau or his delegate,
shall be prima facie evidence that there is participation in an illegal
form of gambling in or on such property.

[34 FR 503, Jan. 14, 1969, as amended at 36 FR 3523, Feb. 26, 1971]

[[Page 404]]



Sec. 91.8  Alcoholic beverages, narcotics, hallucinogenic and dangerous
drugs.

    Entering or being on the property, or operating a motor vehicle
thereon by a person under the influence of alcoholic beverages,
narcotics, hallucinogenic or dangerous drugs is prohibited. The use of
any narcotic, hallucinogenic or dangerous drug in or on the property is
prohibited. The use of alcoholic beverages in or on the property is
prohibited except on occasions and on property upon which the Director
of the Mint has for appropriate official uses granted and exemption
permit in writing.

[38 FR 24898, Sept. 11, 1973]



Sec. 91.9  Soliciting, vending, debt collection, and distribution of
handbills.

    The unauthorized soliciting of alms and contributions, the
commercial soliciting and vending of all kinds, the display or
distribution of commercial advertising, or the collecting of private
debts, in or on the property, is prohibited. This rule does not apply to
Bureau of the Mint concessions or notices posted by authorized employees
on the bulletin boards. Distribution of material such as pamphlets,
handbills, and flyers is prohibited without prior approval from the
Director of the Mint, or the delegate of the Director.



Sec. 91.10  Photographs.

    The taking of photographs on the property is prohibited, without the
written permission of the Director of the Mint.



Sec. 91.11  Dogs and other animals.

    Dogs and other animals, except seeing-eye dogs, shall not be brought
upon the property for other than official purposes.



Sec. 91.12  Vehicular and pedestrian traffic.

    (a) Drivers of all vehicles in or on the property shall drive in a
careful and safe manner at all times and shall comply with the signals
and directions of guards and all posted traffic signs.
    (b) The blocking of entrances, driveways, walks, loading platforms,
or fire hydrants in or on the property is prohibited.
    (c) Parking in or on the property is not allowed without a permit or
specific authority. Parking without authority, parking in unauthorized
locations or in locations reserved for other persons or continuously in
excess of 8 hours without permission, or contrary to the direction of a
uniformed Bureau of the Mint guard, or of posted signs, is prohibited.
    (d) This paragraph may be supplemented from time to time with the
approval of the Director of the Mint, or the delegate of the Director,
by the issuance and posting of such specific traffic directives as may
be required and when so issued and posted such directives shall have the
same force and effect as if made a part hereof.



Sec. 91.13  Weapons and explosives.

    No person while on the property shall carry firearms, other
dangerous or deadly weapons, or explosives, either openly or concealed,
except for official purposes.



Sec. 91.14  Penalties and other law.

    Whoever shall be found guilty of violating any of the regulations in
this part while on the property is subject to a fine of not more than
$50, or imprisonment of not more than 30 days, or both (40 U.S.C. 318c).
Nothing contained in the regulations in this part shall be construed to
abrogate any other Federal laws or regulations or those of any State or
municipality applicable to the property referred to in Sec. 91.2 and
governed by the regulations in this part.



PART 92_UNITED STATES MINT OPERATIONS AND PROCEDURES--Table of Contents



Sec.

                     Subpart A_Numismatic Operations

92.1 Manufacture of medals.
92.2 Sale of ``list'' medals.
92.3 Manufacture and sale of ``proof'' coins.
92.4 Uncirculated Mint Sets.

                    Subpart B_Availability of Records

92.5 Procedure governing availability of Bureau of the Mint records.

[[Page 405]]

92.6 Appeal.

 Subpart C_Assessment of Civil Penalties for Misuse of Words, Letters,
              Symbols, or Emblems of the United States Mint

92.11 Purpose.
92.12 Definitions.
92.13 Assessment of civil penalties.
92.14 Initiation of action.
92.15 Initial notice of assessment.
92.16 Written response.
92.17 Final action.
92.18 Judicial review.

    Authority: 5 U.S.C. 301, 31 U.S.C. 321 and 333.

    Source: 47 FR 56353, Dec. 16, 1982, unless otherwise noted.



                     Subpart A_Numismatic Operations



Sec. 92.1  Manufacture of medals.

    With the approval of the Director of the Mint, dies for medals of a
national character designated by Congress may be executed at the
Philadelphia Mint, and struck in such field office of the Mints and
Assay Offices as the Director shall designate.



Sec. 92.2  Sale of ``list'' medals.

    Medals on the regular Mint list, when available, are sold to the
public at a charge sufficient to cover their cost, and to include
mailing cost when mailed. Copies of the list of medals available for
sale and their selling prices may be obtained from the Director of the
Mint, Washington, DC.



Sec. 92.3  Manufacture and sale of ``proof'' coins.

    ``Proof'' coins, i.e., coins prepared from blanks specially polished
and struck, are made as authorized by the Director of the Mint and are
sold at a price sufficient to cover their face value plus the additional
expense of their manufacture and sale. Their manufacture and issuance
are contingent upon the demands of regular operations. Information
concerning availability and price may be obtained from the Director of
the Mint, Treasury Department, Washington, DC 20220.



Sec. 92.4  Uncirculated Mint Sets.

    Uncirculated Mint Sets, i.e., specially packaged coin sets
containing one coin of each denomination struck at the Mints at
Philadelphia and Denver, and the Assay Office at San Francisco, will be
made as authorized by the Director of the Mint and will be sold at a
price sufficient to cover their face value plus the additional expense
of their processing and sale. Their manufacture and issuance are
contingent upon demands of regular operations. Information concerning
availability and price may be obtained from the Director of the Mint,
Treasury Department, Washington, DC 20220.



                    Subpart B_Availability of Records



Sec. 92.5  Procedure governing availability of Bureau of the Mint
records.

    (a) Regulations of the Office of the Secretary adopted. The
regulations on the Disclosure of Records of the Office of the Secretary
and other bureaus and offices of the Department issued under 5 U.S.C.
301 and 552 and published as part 1 of this title, 32 FR No. 127, July
1, 1967, except for Sec. 1.7 of this title entitled ``Appeal,'' shall
govern the availability of Bureau of the Mint records.
    (b) Determination of availability. The Director of the Mint
delegates authority to the following Mint officials to determine, in
accordance with part 1 of this title, which of the records or
information requested is available, subject to the appeal provided in
Sec. 92.6: The Deputy Director of the Mint, Division Heads in the
Office of the Director, and the Superintendent or Officer in Charge of
the field office where the record is located.
    (c) Requests for identifiable records. A written request for an
identifiable record shall be addressed to the Director of the Mint,
Washington, DC 20220. A request presented in person shall be made in the
public reading room of the Treasury Department, 15th Street and
Pennsylvania Avenue, NW, Washington, DC, or in such other office
designated by the Director of the Mint.



Sec. 92.6  Appeal.

    Any person denied access to records requested under Sec. 92.5 may
file an appeal to the Director of the Mint within 30 days after
notification of such denial. The appeal shall provide the name

[[Page 406]]

and address of the appellant, the identification of the record denied,
and the date of the original request and its denial.



 Subpart C_Assessment of Civil Penalties for Misuse of Words, Letters,
              Symbols, or Emblems of the United States Mint

    Source: 72 FR 60776, Oct. 26, 2007, unless otherwise noted.



Sec. 92.11  Purpose.

    (a) The procedures in this subpart implement the provisions of 31
U.S.C. 333(c), which authorize the Secretary of the Treasury to assess a
civil penalty against any person who has misused the words, titles,
abbreviations, initials, symbols, emblems, seals, or badges of the
United States Mint in violation of 31 U.S.C. 333(a).
    (b) The procedures in this subpart do not apply to the extent that
the Secretary of the Treasury, the Director of the United States Mint,
or their authorized designees have specifically granted to the person
express permission, in writing, to manufacture, produce, sell, possess,
or use the words, titles, abbreviations, initials, symbols, emblems,
seals, or badges in a contract, agreement, license, letter, memorandum,
or similar document.
    (c) The procedures in this subpart are limited to actions initiated
by the United States Mint to enforce the provisions of 31 U.S.C. 333.
The procedures herein do not affect the provisions of 31 CFR Part 27.
Therefore, this subpart shall not be construed as the exclusive means
for the Secretary of the Treasury to enforce 31 U.S.C. 333 insofar as a
covered misuse affects the United States Mint.



Sec. 92.12  Definitions.

    (a) Assessing official means the Director of the United States Mint
or his designee.
    (b) Examining official means an employee of the United States Mint
appointed by the Director of the United States Mint (or an employee of
the Treasury Department appointed by the Director of the United States
Mint with the concurrence of the head of that employee's organization),
to administer the procedures in this subpart in a particular case and to
propose findings and recommendations in that case to the assessing
official. The examining official must be:
    (1) An employee of the Treasury Department in the grade of GS-15 or
higher; and
    (2) Capable of examining the matter without actual or apparent
conflict of interest.
    (c) Broadcast or telecast means widespread dissemination by
electronic transmission or method, whether audio and/or visual.
    (d) Civil penalty means a civil monetary penalty
    (e) Date of offense means the later of:
    (1) The date that the misuse occurred;
    (2) The date that the misuse had the effect of conveying the false
impression that the activity was associated with or approved, endorsed,
sponsored or authorized by the United States Mint or its officers or
employees; or
    (3) If the violation is a continuing one, the date on which the
misuse of the words, titles, abbreviations, initials, symbols, emblems,
seals, or badges protected by 31 U.S.C. 333 or the procedures in this
subpart last occurred.
    (f) Days means calendar days, unless otherwise stated.
    (g) Person means an individual, partnership, association,
corporation, company, business, firm, manufacturer, or any other
organization, entity, or institution.
    (h) Respondent means a person named in an Initial Notice of
Assessment.
    (i) Symbol means any design or graphic used by the United States
Mint or the Treasury Department to represent themselves or their
products. A design or graphic may include
    (1) A trademark, designation of origin, or mark of identification,
or
    (2) A stylized depiction comprising letters, words, or numbers.



Sec. 92.13  Assessment of civil penalties.

    (a) General rule. The assessing official may impose a civil penalty
on any person when the following two conditions are met:

[[Page 407]]

    (1) That person uses in connection with, or as a part of, any
advertisement, solicitation, business activity, or product, whether
alone or with other words, letters, symbols, or emblems--
    (i) The words ``Department of the Treasury,'' ``United States
Mint,'' or ``U.S. Mint'';
    (ii) The titles ``Secretary of the Treasury,'' ``Treasurer of the
United States,'' ``Director of the United States Mint,'' or ``Director
of the U.S. Mint'';
    (iii) The abbreviations or initials of any entity or title referred
to in paragraph (a)(1)(i) or (a)(1)(ii) of this section;
    (iv) Any symbol, emblem, seal, or badge of an entity referred to in
paragraph (a)(1)(i) of this section (including the design of any
envelope, stationery, or identification card used by such an entity); or
    (v) Any colorable imitation of any such words, titles,
abbreviations, initials, symbols, emblems, seals, or badges; and
    (2) That person's use is in a manner that could reasonably be
interpreted or construed as conveying the false impression that such
advertisement, solicitation, business activity, or product is in any
manner approved, endorsed, sponsored, authorized by, or associated with
the United States Mint, or any officer, or employee thereof.
    (b) Disclaimers. Any determination of whether a person has violated
the provisions of paragraph (a) of this section shall be made without
regard to any use of a disclaimer of affiliation with the United States
Government or any particular agency or instrumentality thereof.
    (c) Civil penalty. The assessing official may impose a civil penalty
on any person who violates the provisions of paragraph (a) of this
section. The amount of a civil penalty shall not exceed $5,000 for each
and every use of any material in violation of paragraph (a) of this
section, except that such penalty shall not exceed $25,000 for each and
every use if such use is in a broadcast or telecast.
    (d) Time limitations. (1) Civil penalties imposed under the
procedures in this subpart must be assessed before the end of the three-
year period beginning on the date of offense.
    (2) The assessing official may commence a civil action to recover or
enforce any civil penalty imposed in a Final Notice of Assessment issued
pursuant to Sec. 92.17 at any time before the end of the two-year
period beginning on the date of the Final Notice of Assessment. If
judicial review of the Final Notice of Assessment is sought, the two-
year period begins to run from the date that a final and unappealable
court order is issued.
    (e) Criminal Proceeding. No civil penalty may be imposed under the
procedures in this subpart with respect to any violation of paragraph
(a) of this section after a criminal proceeding on the same violation
has been commenced by indictment or information under 31 U.S.C. 333(d).



Sec. 92.14  Initiation of action.

    (a) When an employee of the United States Mint learns of or
discovers a potential violation of 31 U.S.C. 333 or this subpart, he or
she will refer the matter, with all available evidence, to the assessing
official.
    (b) The assessing official will consider relevant factors when
determining whether to initiate an action to impose a civil penalty
under the procedures in this subpart. Those factors may include, but are
not limited to, the following:
    (1) The scope of the misuse;
    (2) The purpose and/or nature of the misuse;
    (3) The extent of the harm caused by the misuse;
    (4) The circumstances of the misuse;
    (5) The commercial benefit intended to be derived from the misuse;
and
    (6) The repeated nature of the misuse.
    (c) If the assessing official decides to initiate an action to
impose a civil penalty under the procedures in this subpart, he or she
will, in writing:
    (1) Appoint an examining official; and
    (2) Delegate to the examining official the authority to prepare,
sign, and serve an Initial Notice of Assessment on behalf of the
assessing official.



Sec. 92.15  Initial notice of assessment.

    The examining official shall review all immediately available
evidence on

[[Page 408]]

the matter; determine a proposed civil penalty based on the factors
listed under Sec. 92.16(d)(2)(iii); and prepare and serve an Initial
Notice of Assessment by United States mail or other means upon the
person believed to be in violation of Sec. 92.13 and otherwise subject
to a civil penalty. The notice shall provide the name and telephone
number of the examining official, who can provide information concerning
the notice and the procedures in this subpart. The notice shall include
the following:
    (a) A specific reference to the provisions of Sec. 92.13 violated;
    (b) A concise statement of the facts that support the conclusion
that such a violation occurred;
    (c) The amount of the civil penalty proposed and the maximum amount
of the potential civil penalty that the assessing official could impose;
    (d) A notice informing the person alleged to be in violation of
Sec. 92.13 that he or she:
    (1) May, within 30 days of the date of the notice, pay the proposed
civil penalty, thereby waiving the right to make a written response
under Sec. 92.16 and to seek judicial review under Sec. 92.18:
    (i) By electronic funds transfer (EFT) in accordance with
instructions provided by the examining official in the Initial Notice of
Assessment; or
    (ii) By means other than EFT only with the written approval of the
assessing official;
    (2) May make a written response in accordance with Sec. 92.16
within 30 days of the date of the notice addressing, as appropriate:
    (i) Why a civil penalty should not be imposed; and
    (ii) Why a civil penalty should be in a lesser amount than proposed.
    (3) May be represented by an attorney or other representative,
provided that a designation of representative signed by the person
alleged to be in violation is received by the examining official; and
    (4) May request, within 20 days of the date of the notice, a copy of
or opportunity to review any documents and/or other evidence that the
United States Mint compiled and relied on in determining to issue the
notice (the assessing official reserves the right to assert privileges
available under law and may decline to disclose certain documents and/or
other evidence protected by such privileges; however, any documents or
other evidence withheld from disclosure shall be expunged from the
record and shall not be considered by the examining and assessing
officials in arriving at their respective recommendations and
decisions); and
    (e) An advisement of the following:
    (1) If no written response is received within the time allowed in
Sec. 92.16(b), a Final Notice of Assessment may be issued without a
presentation by the person;
    (2) If a written response has been made and the examining official
deems it necessary, the examining official may request, orally or in
writing, additional information from the respondent;
    (3) A Final Notice of Assessment may be issued in accordance with
Sec. 92.17 requiring that the proposed civil penalty be paid;
    (4) A Final Notice of Assessment is subject to judicial review in
accordance with 5 U.S.C. 701 et seq.; and
    (5) All submissions sent in response to the Initial Notice of
Assessment must be transmitted to the address specified in the notice
and include the name, address, and telephone number of the respondent.



Sec. 92.16  Written response.

    (a) Form and contents. (1) The written response submitted by a
person pursuant to Sec. 92.15(d)(2) must provide the following:
    (i) A reference to and specific identification of the Initial Notice
of Assessment involved;
    (ii) The full name of the person against whom the Initial Notice of
Assessment has been made;
    (iii) If the respondent is not a natural person, the name and title
of the officer authorized to act on behalf of the respondent; and
    (iv) If a representative of the person named in the Initial Notice
of Assessment is filing the written response, a copy of the duly
executed designation as representative.
    (2) The written response must admit or deny each violation of Sec.
92.13 set

[[Page 409]]

forth in the Initial Notice of Assessment. Any violation not
specifically denied will be presumed to be admitted. Where a violation
is denied, the respondent shall specifically set forth the legal or
factual basis upon which the allegation is denied. If the basis of the
written response is that the respondent is not the person responsible
for the alleged violation, the written response must set forth
sufficient information to allow the examining and assessing officials to
determine the truth of such an assertion. The written response should
include any and all documents and other information that the respondent
believes should be a part of the administrative record on the matter.
    (b) Time. (1) Except as provided in paragraph (b)(2) of this
section, any written response made under this section must be submitted
not later than 30 days after the date of the Initial Notice of
Assessment.
    (2) If a request for documents or other evidence is made pursuant to
Sec. 92.15(d)(4), the written response must be submitted not later than
20 days after the date of the United States Mint's response to the
request.
    (3)(i) In computing the number of days allowed for filing a written
response under this paragraph, the first day counted is the day after
the date of the Initial Notice of Assessment is issued. If the last date
on which the response is required to be filed by this paragraph is a
Saturday, Sunday or Federal holiday, the response will be due on the
next business day after that date.
    (ii) If a response is transmitted by United States mail, it will be
deemed timely filed if postmarked on or before the due date.
    (4) The examining official may extend the period for making a
written response under paragraphs (b)(1) and (b)(2) of this section for
up to ten days for good cause shown. Requests for extensions beyond ten
days must be approved by the assessing official and must be based on
good cause shown. Generally, failure to obtain representation in a
timely manner will not be considered good cause.
    (c) Filing. The response may be sent by personal delivery, United
States mail or commercial delivery. A written response transmitted by
means other than United States mail will be considered filed on the date
received at the address specified in the Initial Notice of Assessment.
    (d) Review and Recommendation. The examining official will fully
consider the facts and arguments submitted by the respondent in the
written response, any other documents filed by the respondent pursuant
to this subpart, and the evidence in the United States Mint's record on
the matter. If the respondent waives the right to submit a written
response in accordance with Sec. 92.15(d)(1), or declines to submit a
written response by the end of the 30-day response period, the examining
official will fully consider the evidence in the United States Mint's
record on the matter.
    (1) In fully considering the matter, the examining official will not
consider any evidence introduced into the record by the United States
Mint after the date of the Initial Notice of Assessment unless and until
the respondent has been notified that such additional evidence will be
considered, and has had an opportunity to request, review and comment on
such evidence.
    (2) The examining official will prepare a concise report, addressed
to the assessing official, which will contain the following:
    (i) The entire administrative record on the matter, including all
information provided in or with a written response timely filed by the
respondent and any additional information provided pursuant to Sec.
92.15(e)(2), as well as all evidence upon which the Initial Notice of
Assessment was based, and any additional evidence as provided for in
Sec. 92.16(d)(1).
    (ii) A finding, based on the preponderance of the evidence, as to
each alleged violation specified in the Initial Notice of Assessment;
    (iii) For each violation that the examining official determines to
have occurred, a recommendation as to the appropriate amount of a civil
penalty to be imposed which, upon additional consideration of the
evidence, may be the same as, more than, or less than the amount
initially proposed by the examining official pursuant to Sec. 92.15. In

[[Page 410]]

making this recommendation, the examining official will consider all
relevant factors including, but not limited to, the following:
    (A) The scope of the misuse;
    (B) The purpose and/or nature of the misuse;
    (C) The extent of the harm caused by the misuse;
    (D) The circumstances of the misuse;
    (E) The commercial benefit intended to be derived from the misuse;
and
    (F) The repeated nature of the misuse.
    (iv) If the examining official determines that a violation has
occurred, a proposed Final Notice of Assessment that incorporates his or
her findings and recommendations.
    (v) Any additional information or considerations that the assessing
officer should consider in a decision whether to issue a Final Notice of
Assessment under Sec. 92.17.



Sec. 92.17  Final action.

    (a) In making a final determination whether to impose a penalty, the
assessing official shall take into consideration the entire report
prepared by the examining official. Although the assessing official
should accord appropriate weight to the findings and recommendations of
the examining official, the assessing official is not bound by them. The
assessing official may approve, disapprove, modify, or substitute any or
all of the examining official's findings and recommendations if, in his
or her judgment, the evidence in the record supports such a decision.
The assessing official will determine whether:
    (1) The facts warrant a conclusion that no violation has occurred;
or
    (2)(i) The facts warrant a conclusion that one or more violations
have occurred; and
    (ii) The facts and violations found justify the conclusion that a
civil penalty should be imposed.
    (b) If the assessing official determines that no violation has
occurred, the official shall promptly send a letter indicating that
determination to the person served with an Initial Notice of Assessment
and to any designated representative of such person.
    (c) If the assessing official determines that a violation has
occurred:
    (1) The assessing official shall issue a Final Notice of Assessment
to the person served with an Initial Notice of Assessment and to any
designated representative of such person.
    (2) The assessing official may, in his or her discretion:
    (i) Impose a civil penalty;
    (ii) Not impose a civil penalty; or
    (iii) Impose a civil penalty and suspend the payment of all or some
of the civil penalty, conditioned on the violator's future compliance
with 31 U.S.C. 333.
    (3) If a civil penalty is imposed under Sec. 92.17(c)(2)(i) or
(iii), the assessing official shall determine the appropriate amount of
the penalty in accordance with 31 U.S.C. 333(c)(2). In determining the
amount of a civil penalty, the assessing official will consider relevant
factors including, but not limited to, the following:
    (i) The scope of the misuse;
    (ii) The purpose and/or nature of the misuse;
    (iii) The extent of the harm caused by the misuse;
    (iv) The circumstances of the misuse;
    (v) The commercial benefit intended to be derived from the misuse;
and
    (vi) The repeated nature of the misuse.
    (4) The Final Notice of Assessment shall:
    (i) Include the following:
    (A) A specific reference to each provision of Sec. 92.13 found to
have been violated;
    (B) A concise statement of the facts supporting a conclusion that
each violation has occurred;
    (C) An analysis of how the facts and each violation justifies the
conclusion that a civil penalty should be imposed; and
    (D) The amount of each civil penalty imposed and a statement as to
how the amount of each penalty was determined; and
    (ii) Inform the person of the following:
    (A) Payment of a civil penalty imposed by the Final Notice of
Assessment must be made within 30 days of the date of the notice;

[[Page 411]]

    (B) Payment of a civil penalty imposed by the Final Notice of
Assessment shall be paid by EFT in accordance with instructions provided
in the notice, unless the assessing official has given written approval
to have payment made by other means;
    (C) If payment of a civil penalty imposed by the Final Notice of
Assessment has been suspended on the condition that the person comply in
the future with 31 U.S.C. 333 and this subpart, the failure by the
person to so comply will make the civil penalty payable on demand;
    (D) If a civil penalty is not paid within 30 days of the date of the
Final Notice of Assessment (or on demand under paragraph (c)(3)(ii)(D)
of this section), a civil action to collect the penalty or enforce
compliance may be commenced at any time within two years of the date of
the Final Notice of Assessment; and
    (E) Any civil penalty imposed by the Final Notice of Assessment may
be subject to judicial review in accordance with 5 U.S.C. 701 et seq.



Sec. 92.18  Judicial review.

    A Final Notice of Assessment issued under the procedures in this
subpart may be subject to judicial review pursuant to 5 U.S.C. 701 et
seq.



PART 100_EXCHANGE OF PAPER CURRENCY AND COIN--Table of Contents



Sec.
100.2 Scope of regulations; transactions effected through Federal
          Reserve banks and branches; distribution of coin and
          currencies.

                          Subpart A_In General

100.3 Lawfully held coins and currencies in general.
100.4 Gold coin and gold certificates in general.

  Subpart B_Request for Examination of Mutilated Currency for Possible
                               Redemption

100.5 Mutilated paper currency.
100.6 Destroyed paper currency.
100.7 Treasury's redemption process.
100.8 Packaging and shipping of mutilated currency.
100.9 Notices.

                       Subpart C_Exchange of Coin

100.10 Exchange of uncurrent coins.
100.11 Exchange of bent and partial coins.
100.12 Exchange of fused and mixed coins.
100.13 Criminal penalties.

                       Subpart D_Other Information

100.16 Exchange of paper and coin to be handled through Federal Reserve
          banks and branches.
100.17 Location of Federal Reserve banks and branches.
100.18 Counterfeit notes to be marked; ``redemption'' of notes
          wrongfully so marked.
100.19 Disposition of counterfeit notes and coins.

    Authority: 31 U.S.C. 321.

    Source: 47 FR 32044, July 23, 1982, unless otherwise noted.



Sec. 100.2  Scope of regulations; transactions effected through Federal
Reserve banks and branches; distribution of coin and currencies.

    The regulations in this part govern the exchange of the coin and
paper currency of the United States (including national bank notes and
Federal Reserve bank notes in process of retirement and Federal Reserve
notes). Under authorization in the Act approved May 29, 1920, 41 Stat.
655 (31 U.S.C. 476), the Secretary of the Treasury transferred to the
Federal Reserve banks and branches the duties and functions performed by
the former Assistant Treasurers of the United States in connection with
the exchange of paper currency and coin of the United States. Except for
the duties in this respect to be performed by the Treasurer of the
United States and the Director of the Mint, as may be indicated from
time to time by the Secretary of the Treasury, exchanges of the paper
currency and coin of the United States and the distribution and
replacement thereof will, so far as practicable, be effected through the
Federal Reserve banks and branches. The Federal Reserve banks and
branches are authorized to distribute available supplies of coin and
currency to depository institutions, as that term is defined in section
103 of the Monetary Control Act of 1980 (Pub. L. 96-221). As authorized
by section 107 of the Act, transportation of coin and currency and coin
wrapping

[[Page 412]]

services will be provided according to a schedule of fees established by
the Board of Governors of the Federal Reserve System. Inquiries by
depository institutions regarding distribution and related services
should be addressed to the Federal Reserve bank of the district where
the institution is located.



                          Subpart A_In General



Sec. 100.3  Lawfully held coin and currencies in general.

    The official agencies of the Department of the Treasury will
continue to exchange lawfully held coins and currencies of the United
States, dollar for dollar, for other coins and currencies which may be
lawfully acquired and are legal tender for public and private debts.
Paper currency of the United States which has been falsely altered and
coins altered to render them for use as other denominations will not be
redeemed since such currency and coins are subject to forfeiture under
Title 18, United States Code, section 492. Persons receiving such
currency and coins should notify immediately the nearest local office of
the U.S. Secret Service of the Department of the Treasury, and hold the
same pending advice from the Service.



Sec. 100.4  Gold coin and gold certificates in general.

    Gold coins, and gold certificates of the type issued before January
30, 1934, are exchangeable, as provided in this part, into other
currency or coin which may be lawfully issued.



  Subpart B_Request for Examination of Mutilated Currency for Possible
                               Redemption

    Source: 79 FR 30725, May 29, 2014, unless otherwise noted.



Sec. 100.5  Mutilated paper currency.

    (a) General. Lawfully held mutilated paper currency of the United
States may be submitted for examination in accord with the provisions in
this subpart. Such currency may be redeemed at face amount if sufficient
remnants of any relevant security feature and clearly more than one-half
of the original note remains. Fragments of such mutilated currency which
are not clearly more than one-half of the original whole note or are
lacking sufficient remnants of any relevant security feature will be
redeemed at face value only if the Director, Bureau of Engraving and
Printing, Department of the Treasury, is satisfied that the missing
portions have been totally destroyed. The Director's judgment shall be
based on such evidence of total destruction as is necessary and shall be
final. Any submission under this subpart shall be deemed an acceptance
of all provisions contained herein.
    (b) Definitions. The following definitions are used in this subpart:
    Mutilated currency is currency which has been damaged to the extent
that:(i) One-half or less of the original note remains; or
    (ii) Its condition is such that its value is questionable and the
currency must be forwarded to the Department of the Treasury for the
examination by trained experts before any redemption is made.
    Unfit currency is currency which is unfit for further circulation
because of its physical condition such as torn, dirty, limp, worn or
defaced. Unfit currency should not be forwarded to the Department of the
Treasury, but may be exchanged at commercial banks.



Sec. 100.6  Destroyed paper currency.

    No relief will be granted on account of lawfully held paper currency
which has been totally destroyed.



Sec. 100.7  Treasury's redemption process.

    (a) Lawful holders of mutilated currency may receive a redemption at
full value when:
    (1) Clearly more than 50% of a note identifiable as United States
currency is present along with sufficient remnants of any relevant
security feature; or
    (2) Fifty percent or less of a note identifiable as United States
currency is present and the method of mutilation and supporting evidence
demonstrate to the satisfaction of the Treasury that the missing
portions have been totally destroyed.
    (b) No redemption will be made when:

[[Page 413]]

    (1) A submission, or any portion thereof, demonstrates a pattern of
intentional mutilation or an attempt to defraud the United States. In
such instances, the entire submission will be destroyed or retained as
evidence.
    (2) A submission appears to be part of, or intended to further, any
criminal scheme. In such instances, the entire submission will be
destroyed or retained as evidence.
    (3) A submission contains a material misrepresentation of facts.
    (4) Fragments and remnants presented are not identifiable as United
States currency; or
    (5) Fragments and remnants presented which represent 50% or less of
a note are identifiable as United States currency but the method of
destruction and supporting evidence do not satisfy the Treasury that the
missing portion has been totally destroyed.
    (c) Lawfully held mutilated currency in a submission that also
contains counterfeit currency may be destroyed or retained as evidence,
at the discretion of the Director of the Bureau of Engraving and
Printing.
    (d) All cases will be handled under proper procedures to safeguard
the funds and interests of the submitter of lawfully held mutilated
currency. In some cases, the amount redeemed will be less than the
amount estimated by the submitter. In other cases, the amount redeemed
may be greater. The amount redeemed will be determined by an examination
made by trained mutilated currency examiners and governed by the above
criteria.
    (e) The Director of the Bureau of Engraving and Printing shall have
final authority with respect to redemptions of mutilated currency
submissions.
    (f) All submissions for review shall include an estimate of the
value of the currency and an explanation of how it came to be mutilated.
The submission should also contain the bank account number and routing
number for an account of a United States bank since all redemptions of
$500 or more shall be made through Electronic Funds Transfer (EFT).



Sec. 100.8  Packaging and shipping of mutilated currency.

    Mutilated currency examiners are best able to determine the value of
the currency when it has been carefully packed and boxed as described
below. As a result, failure to follow the directions in this section may
result in a denial of redemption:
    (a) Regardless of the condition of the currency, do not disturb the
fragments more than is absolutely necessary.
    (b) If the currency is brittle or inclined to fall apart, pack it
carefully in cotton and box it as found, without disturbing the
fragments, if possible.
    (c) If the currency was in a purse, box, or other container when
mutilated, it should be left therein, if possible, in order to prevent
further deterioration of the fragments or from their being lost.
    (d) If it is absolutely necessary to remove the fragments from the
container, send the container with the currency and any other contents
found, except as noted in paragraph (g) of this section.
    (e) If the currency was flat when mutilated, do not roll, fold,
laminate, tape, glue or in any other way alter the currency in an
attempt to preserve it.
    (f) If the currency was in a roll when mutilated, do not attempt to
unroll or straighten.
    (g) If coin or any other metal is mixed with the currency, remove
carefully. Do not send coin or other metal in the same package with
mutilated paper currency, as the metal will break up the currency. Coin
should be exchanged in accordance with subpart C of this part.
    (h) Mutilated currency shipments must be addressed as follows:
    (1) USPS Delivery--Department of the Treasury, Bureau of Engraving
and Printing, MCD/OFM, Room 344A, Post Office Box 37048, Washington, DC
20013.
    (2) Non Postal Courier (FEDEX/UPS)--Department of the Treasury,
Bureau of Engraving and Printing, MCD/OFM, Room 344-A, 14th & C Streets
SW., Washington, DC 20228.



Sec. 100.9  Notices.

    (a) The Director may provide information pertaining to any mutilated

[[Page 414]]

currency submission to law enforcement officials or other third parties
for purposes of investigation of related criminal activity or for
purposes of seeking a civil judgment.
    (b) Whoever mutilates currency with the intent to render it unfit to
be reissued may be fined and/or imprisoned. 18 U.S.C. 333.
    (c) Whoever intentionally files a false claim seeking reimbursement
for mutilated currency may be held criminally liable under a number of
statutes including 18 U.S.C. 287 and 18 U.S.C. 1341 and may be held
civilly liable under 31 U.S.C. 3729, et seq.



                       Subpart C_Exchange of Coin



Sec. 100.10  Exchange of uncurrent coins.

    (a) Definition. Uncurrent coins are whole U.S. coins which are
merely worn or reduced in weight by natural abrasion yet are readily and
clearly recognizable as to genuineness and denomination and which are
machine countable.
    (b) Redemption basis. Uncurrent coins will be redeemed at face
value.
    (c) Criteria for acceptance. Uncurrent coins, forwarded for
redemption at face value, must be shipped at the expense and risk of the
owner. Shipments of subsidiary or minor coins for redemption at face
value should be sorted by denomination into packages in sums of
multiples of $20. Not more than $1,000 in any silver or clad coin, $200
in 5-cent pieces, or $50 in 1-cent pieces should be shipped in one bag
or package.
    (d) Redemption sites. Uncurrent coins will be redeemed only at the
Federal Reserve banks and branches listed in Sec. 100.17.



Sec. 100.11  Exchange of bent and partial coins.

    (a) Definitions. (1) Bent coins are U.S. coins which are bent or
deformed so as to preclude normal machine counting but which are readily
and clearly identifiable as to genuineness and denomination.
    (2) Partial coins are U.S. coins which are not whole; partial coins
must be readily and clearly identifiable as to genuineness and
denomination.
    (b) Redemption basis. Bent and partial coins shall be presented
separately by denomination category in lots of at least one pound for
each category. Bent and partial coins shall be redeemed on the basis of
their weight and denomination category rates (which is the weight
equivalent of face value). If not presented separately by denomination
category, bent and partial coins will not be accepted for redemption.
Denomination categories and rates are Cents, @ $1.4585 per pound;
Nickels, @ $4.5359 per pound; Dimes, Quarters, Halves, and Eisenhower
Dollars @ $20.00 per pound; and Anthony Dollars @ $56.00 per pound.
Copper plated zinc cents shall be redeemed at the face value equivalent
of copper one cent coins.
    (c) Redemption site. Bent and partial coins will be redeemed only at
the United States Mint, P.O. Box 400, Philadelphia, PA 19105. Coins are
shipped at sender's risk and expense.

[47 FR 32044, July 23, 1982, as amended at 64 FR 39920, July 23, 1999]



Sec. 100.12  Exchange of fused and mixed coins.

    (a) Definitions. (1) Fused coins are U.S. coins which are melted to
the extent that they are bonded together and the majority of which are
readily and clearly identifiable as U.S. coins.
    (2) Mixed coins are U.S. coins of several alloy categories which are
presented together, but are readily and clearly identifiable as U.S.
coins.
    (b) The United States Mint will not accept fused or mixed coins for
redemption.
    (c) Criteria for acceptance. (1) A minimum of two pounds of fused
and mixed coins is required for redemption.
    (2) Fused and mixed coins containing lead, solder, or other
substance which will render them unsuitable for coinage metal will not
be accepted.
    (d) Redemption site. Fused and mixed coins will be redeemed only at
the United States Mint, P.O. Box 400, Philadelphia, PA 19105. Coins are
shipped at sender's risk and expense.

[47 FR 32044, July 23, 1982, as amended at 64 FR 39920, July 23, 1999]



Sec. 100.13  Criminal penalties.

    Criminal penalties connected with the defacement or mutilation of
U.S.

[[Page 415]]

coins are provided in the United States Code, Title 18, section 331.



                       Subpart D_Other Information



Sec. 100.16  Exchange of paper and coin to be handled through Federal
Reserve banks and branches.

    Other than as provided in this document all transactions including
the exchange of paper currency and coin shall be handled through the
Federal Reserve banks and branches.



Sec. 100.17  Location of Federal Reserve banks and branches.

                    Federal Reserve Bank and Address

Boston--600 Atlantic Avenue, Boston, MA 02106
New York--33 Liberty Street (Federal Reserve P.O. Station), New York, NY
10045
Buffalo Branch--160 Delaware Avenue (P.O. Box 961), Buffalo, NY 14240
Philadelphia--Ten Independence Mall (P.O. Box 66), Philadelphia, PA
19105
Cleveland--1455 East Sixth Street (P.O. Box 6387), Cleveland, OH 44101
Cincinnati Branch--150 East Fourth Street (P.O. Box 999), Cincinnati, OH
45201
Pittsburgh Branch--717 Grant Street (P.O. Box 867), Pittsburgh, PA 15230
Richmond--701 East Byrd Avenue (P.O. Box 27622), Richmond, VA 23261
Baltimore Branch--114-120 East Lexington Street (P.O. Box 1378),
Baltimore, MD 21203
Charlotte Branch--530 East Trade Street (P.O. Box 30248), Charlotte, NC
28230
Atlanta--104 Marietta Street, NW., Atlanta, GA 30303
Birmingham Branch--1801 Fifth Avenue, North (P.O. Box 830447),
Birmingham, AL 35283-0447
Jacksonville Branch--800 Water Street (P.O. Box 929) Jacksonville, FL
32231-0044
Miami Branch--9100 NW., 36th Street (P.O. Box 520847), Miami, FL 33152
Nashville Branch--301 Eighth Avenue, North, Nashville, TN 37203
New Orleans Branch--525 St. Charles Avenue (P.O. Box 61630), New
Orleans, LA 70161
Chicago--230 South LaSalle Street (P.O. Box 834), Chicago, IL 60690
Detroit Branch--160 Fort Street, West (P.O. Box 1059), Detroit, MI 48231
St. Louis--411 Locust Street (P.O. Box 442), St. Louis, MO 63166
Little Rock Branch--325 West Capitol Avenue (P.O. Box 1261), Little
Rock, AR 72203
Louisville Branch--410 South Fifth Street (P.O. Box 32710), Louisville,
KY 40232
Memphis Branch--200 North Main Street (P.O. Box 407), Memphis, TN 38101
Minneapolis--250 Marquette Avenue, Minneapolis, MN 55480
Helena Branch--400 North Park Avenue, Helena, MT 59601
Kansas City--925 Grand Avenue (Federal Reserve Station), Kansas City, MO
64198
Denver Branch--1020 16th Street (P.O. Box 5228, Terminal Annex), Denver,
CO 80217
Oklahoma City Branch--226 Dean A. McGee Street (P.O. Box 25129),
Oklahoma City, OK 73125
Omaha Branch--2201 Farnam Street (P.O. Box 3958), Omaha, NB 68103
Dallas--400 South Akard Street (Station K), Dallas, TX 75222
El Paso Branch--301 East Main Street (P.O. Box 100), El Paso, TX 79999
Houston Branch--1701 San Jacinto Street (P.O. Box 2578), Houston, TX
77001
San Antonio Branch--126 East Nueva Street (P.O. Box 1471), San Antonio,
TX 78295
San Francisco--400 Sansome Street (P.O. Box 7702), San Francisco, CA
94120
Los Angeles Branch--950 South Grand Avenue (Terminal Annex, P.O. Box
2077), Los Angeles CA 90051
Portland Branch--915 SW Stark Street (P.O. Box 3436), Portland, OR 97208
Salt Lake City Branch--120 South State Street (P.O. Box 30780), Salt
Lake City, UT 84125
Seattle Branch--1015 Second Avenue (P.O. Box 3567), Seattle, WA 98124

[47 FR 32044, July 23, 1982, as amended at 56 FR 10170, Mar. 11, 1991]



Sec. 100.18  Counterfeit notes to be marked; ``redemption'' of notes
wrongfully so marked.

    The Act of June 30, 1876 (19 Stat. 4; 31 U.S.C. 424), provides that
all U.S. Officers charged with the receipt or disbursement of public
moneys, and all officers of national banks, shall stamp or write in
plain letters the word ``counterfeit,'' ``altered,'' or ``worthless''
upon all fraudulent notes issued in the form of, and intended to
circulate as money, which shall be presented at their places of
business; and if such officers shall wrongfully stamp any genuine note
of the United States, or of the national bank, they shall, upon
presentation, ``redeem'' such notes at the face amount thereof.



Sec. 100.19  Disposition of counterfeit notes and coins.

    All counterfeit notes and coin found in remittances are cancelled
and delivered to the U.S. Secret Service of the Department of the
Treasury or to the nearest local office of that Service, a receipt for
the same being forwarded to

[[Page 416]]

the sender. Communications with respect thereto should be addressed to
the Director, U.S. Secret Service, Department of the Treasury,
Washington, DC 20223.



PART 101_MITIGATION OF FORFEITURE OF COUNTERFEIT GOLD COINS--Table of
Contents



Sec.
101.1 Purpose and scope.
101.2 Petitions for mitigation.
101.3 Petitions reviewed by Assistant Secretary, Enforcement,
          Operations, Tariff Affairs.
101.4 Extraction of gold bullion from the counterfeit coins.
101.5 Payment of smelting costs.
101.6 Return of the bullion.
101.7 Exceptions.
101.8 Discretion of the Secretary.

    Authority: 18 U.S.C. 492.

    Source: 42 FR 1472, Jan. 7, 1977, unless otherwise noted.



Sec. 101.1  Purpose and scope.

    The purpose of this part is to establish a policy whereby certain
purchasers or holders of gold coins who have forfeited them to the
United States because they were counterfeit may, in the discretion of
the Secretary of the Treasury, recover the gold bullion from the coins.
This part sets forth the procedures to be followed in implementing this
policy.



Sec. 101.2  Petitions for mitigation.

    (a) Who may file. Any person may petition the Secretary of the
Treasury for return of the gold bullion of counterfeit gold coins
forfeited to the United States, if:
    (1) The petitioner innocently purchased or received the coins and
held them without the knowledge that they were counterfeit; and,
    (2) The petitioner voluntarily submitted the coins to the Treasury
Department for a determination of whether they were legitimate or
counterfeit; and,
    (3) The coins were determined to be counterfeit and were seized by
the Treasury Department and forfeited to the United States.
    (b) To whom addressed. Petitions for mitigation of the forfeiture of
counterfeit gold coins should be addressed to the Assistant Secretary,
Enforcement, Operations, Tariff Affairs, Department of Treasury, 15th
and Pennsylvania Avenue, NW., Washington, DC 20220.
    (c) Form. The petition need not be in any particular form, but must
be under oath, and set forth at least the following:
    (1) The full name and address of the petitioner;
    (2) A description of the coin or coins involved;
    (3) The name and address of the person from whom the coins were
received or purchased by the petitioner;
    (4) The date and place where they were voluntarily submitted for
examination;
    (5) Any other circumstances relied upon by the petitioner to justify
the mitigation;
    (6) A statement that the petitioner purchased or received and held
the coins without the knowledge that they were counterfeit.



Sec. 101.3  Petitions reviewed by Assistant Secretary, Enforcement,
Operations, Tariff Affairs.

    (a) The Assistant Secretary will receive and review all petitions
for mitigation of the forfeiture of counterfeit gold coins. He shall
conduct such further investigation, and may request such further
information from the petitioner as he deems necessary. Petitions will be
approved if the Assistant Secretary determines that:
    (1) The gold coins have not been previously disposed of by normal
procedures;
    (2) The petitioner was an innocent purchaser or holder of the gold
coins and is not under investigation in connection with the coins at the
time of submission or thereafter;
    (3) The coins are not needed and will not be needed in the future in
any investigation or as evidence in legal proceedings; and
    (4) Mitigation of the forfeiture is in the best interest of the
Government.



Sec. 101.4  Extraction of gold bullion from the counterfeit coins.

    If the petition is approved, the Assistant Secretary shall then
forward the gold coins to the Bureau of the

[[Page 417]]

Mint where, if economically feasible, the gold bullion will be extracted
from the counterfeit coins. The Bureau of the Mint will then return the
bullion to the Assistant Secretary.



Sec. 101.5  Payment of smelting costs.

    The petitioner shall be required to pay all reasonable costs
incurred in extracting the bullion from the counterfeit coins, as shall
be determined by the Assistant Secretary. Payment must be made prior to
the return of the gold bullion to the petitioner.



Sec. 101.6  Return of the bullion.

    After receiving the gold bullion from the Bureau of the Mint, the
Assistant Secretary shall notify the petitioner that his petition has
been approved and that payment of the smelting costs in an amount set
forth in such notice must be made prior to the return of the bullion.



Sec. 101.7  Exceptions.

    The provisions of this part shall not apply where the cost of
smelting the gold coins exceeds the value of the gold bullion to be
returned.



Sec. 101.8  Discretion of the Secretary.

    The Secretary of the Treasury retains complete discretion to deny
any claim of any petitioner when the Secretary believes it is not in the
best interest of the Government to return the bullion to the petitioner
or when the Secretary is not convinced that the petitoner was an
innocent purchaser or holder without knowledge that the gold coins were
counterfeit.

                           PART 123 [RESERVED]



PART 128_REPORTING OF INTERNATIONAL CAPITAL AND FOREIGN-CURRENCY
TRANSACTIONS AND POSITIONS--Table of Contents



                      Subpart A_General Information

Sec.
128.1 General reporting requirements.
128.2 Manner of reporting.
128.3 Use of information reported.
128.4 Penalties.
128.5 Recordkeeping requirements.

  Subpart B_Reports on International Capital Transactions and Positions

128.11 Purpose of reports.
128.12 Periodic reports.
128.13 Special survey reports.

             Subpart C_Reports on Foreign Currency Positions

128.21 Purpose of reports.
128.22 Periodic reports.
128.23 Special survey reports.

Appendix A to Part 128--Determination Made by National Advisory Council
          Pursuant to Section 2(a) and (b) of E.O. 10033

    Authority: 22 U.S.C. 286f and 3101 et seq.; 31 U.S.C. 5315 and 5321.

    Source: 58 FR 58495, Nov. 2, 1993, unless otherwise noted.



                      Subpart A_General Information



Sec. 128.1  General reporting requirements.

    (a) International capital transactions and positions. (1) In order
to implement the International Investment and Trade in Services Survey
Act, as amended (22 U.S.C. 3101 et seq.); and E.O. 11961, and to obtain
information requested by the International Monetary Fund under the
articles of agreement of the Fund pursuant to section 8(a) of the
Bretton Woods Agreements Act (22 U.S.C. 286f) and E.O. 10033, persons
subject to the jurisdiction of the United States are required to report
information pertaining to--
    (i) United States claims on, and liabilities to, foreigners;
    (ii) Transactions in securities and other financial assets with
foreigners; and
    (iii) The monetary reserves of the United States.
    (2) Data pertaining to direct investment transactions are not
required to be reported under this Part.
    (3) Reports shall be made in such manner and at such intervals as
specified by the Secretary of the Treasury. See subpart B of this part
for additional requirements concerning these reports.
    (b) Foreign currency positions. (1) In order to provide data on the
nature and source of flows of mobile capital, including transactions by
large United

[[Page 418]]

States business enterprises (as determined by the Secretary) and their
foreign affiliates as required by 31 U.S.C. 5315, persons subject to the
jurisdiction of the United States are required to report information
pertaining to--
    (i) Transactions in foreign exchange;
    (ii) Transfers of credit that are, in whole or part, denominated in
a foreign currency; and
    (iii) The creation or acquisition of claims that reference
transactions, holdings, or evaluations of foreign exchange.
    (2) Reports shall be made in such manner and at such intervals as
specified by the Secretary. See subpart C of this part for additional
requirements concerning these reports.
    (c) Notice of reports. Notice of reports required by this part,
specification of persons required to file report, and forms to be used
to file reports will be published in the Federal Register. Persons
currently required to file reports shall continue to file such reports
using existing Treasury International Capital Forms BL-1/BL-1(SA), BL-2/
BL-2(SA), BL-3, BC/BC(SA), BQ-1, BQ-2, CM, CQ-1, CQ-2, S, and existing
Treasury Foreign Currency Forms FC-1, FC-2, FC-3, and FC-4 until further
notice is published in the Federal Register.



Sec. 128.2  Manner of reporting.

    (a) Methods of reporting--(1) Prescribed forms. (i) Except as
provided in Sec. 128.2(a)(2), reports required by this part shall be
made on forms prescribed by the Secretary. The forms and accompanying
instructions will be published in accordance with Sec. 128.1(c).
    (ii) Copies of forms and instructions prescribed by the Secretary
for reporting under this Part may be obtained from any Federal Reserve
Bank, or from the Office of the Assistant Secretary (Economic Policy),
Department of the Treasury, Washington, DC 20220.
    (2) Alternative methods of reporting. In lieu of reporting on forms
prescribed by the Secretary pursuant to this part, reports may be filed
on magnetic tape or other media acceptable to, and approved in writing
by, the Federal Reserve district bank with which the report is filed, or
by the Assistant Secretary (Economic Policy) in the case of a special
exception filing pursuant to Sec. 128.2(b)(3). The Secretary may
require that magnetic tape or other machine-readable media, or other
rapid means of communication be used for filing special survey reports
under subpart B or C of this part.
    (b) Filing of periodic reports--(1) Banks and other depository
institutions, International Banking Facilities, and bank holding
companies. Except as provided in Sec. 128.2(b)(3), each bank,
depository institution, International Banking Facility, and bank holding
company in the United States required to file periodic reports under
subpart B or C of this part shall file such reports with the Federal
Reserve bank of the district in which such bank, depository institution,
International Banking Facility or bank holding company has its principal
place of business in the United States.
    (2) Nonbanking enterprises and other persons. Except as provided in
Sec. 128.2(b)(3), nonbanking enterprises and other persons in the
United States required to file periodic reports under subpart B or C of
this part shall file such reports with the Federal Reserve Bank of New
York.
    (3) Special exceptions. If a respondent described in Sec.
128.2(b)(1) or (2) is unable to file with a Federal Reserve district
bank, such respondent shall file periodic reports with the Office of the
Assistant Secretary (Economic Policy), Department of the Treasury,
Washington, DC 20220, or as otherwise provided in the instructions to
the periodic report forms.
    (c) Filing of special survey reports. All respondents required to
file special survey reports under subpart B or C of this part file such
reports as provided in Sec. 128.2(b) unless otherwise provided in the
instructions to the special survey reports.



Sec. 128.3  Use of information reported.

    (a) Except for use in violation and enforcement proceedings pursuant
to the International Investment and Trade in Services Survey Act, 22
U.S.C. 3101 et seq., information submitted by any individual respondent
on reports required under subpart B of this part may be used only for
analytical and statistical

[[Page 419]]

purposes within the United States Government and will not be disclosed
publicly by the Department of the Treasury, or by any other Federal
agency or Federal Reserve district bank having access to the information
as provided herein. Aggregate data derived from these forms may be
published or otherwise publicly disclosed only in a manner which will
not reveal the amounts reported by any individual respondent. The
Department may furnish information from these forms to the Federal
Reserve Board and to Federal agencies to the extent permitted by
applicable law.
    (b) The information submitted by any individual respondent on
reports required under subpart C of this part will not be disclosed
publicly. Aggregated data may be published or disclosed only in a manner
which will not reveal the information reported by any individual
respondent. The Department may furnish to Federal agencies, the Board of
Governors of the Federal Reserve System, and to Federal Reserve district
banks data reported pursuant to subpart C of this part to the extent
permitted by applicable law.



Sec. 128.4  Penalties.

    (a) Whoever fails to file a report required by subpart B of this
part shall be subject to a civil penalty of not less than $2,500 and not
more than $25,000
    (b) Whoever willfully fails to file a report required by subpart B
of this part may be criminally prosecuted and upon conviction fined not
more than $10,000 and, if an individual (including any officer,
director, employee, or agent of any corporation who knowingly
participates in such violation), may be imprisoned for not more than one
year, or both.
    (c) Whoever fails to file a report required by subpart C of this
part shall be subject to a civil penalty of not more than $10,000.



Sec. 128.5  Recordkeeping requirements.

    Banks, other depository institutions, International Banking
Facilities, bank holding companies, brokers and dealers, and nonbanking
enterprises subject to the jurisdiction of the United States shall
maintain all information necessary to make a complete report pursuant to
this Part for not less than three years from the date such report is
required to be filed or was filed, whichever is later, or for such
shorter period as may be specified in the instructions to the applicable
report form.

(Approved by the Office of Management and Budget under control number
1505-0149)



  Subpart B_Reports on International Capital Transactions and Positions



Sec. 128.11  Purpose of reports.

    Reports on international capital transactions and positions provide
timely and reliable information on international portfolio capital
movements by U.S. persons. This information is needed for preparation of
the capital accounts of the United States balance of payments and the
international investment position of the United States.



Sec. 128.12  Periodic reports.

    (a) International capital positions. (1) Banks and other depository
institutions, International Banking Facilities, bank holding companies,
and brokers and dealers in the United States shall file monthly,
quarterly and semiannual reports with respect to specified claims and
liabilities positions with foreigners held for their own account and for
the accounts of their customers.
    (2) Nonbanking enterprises in the United States not described in
Sec. 128.12(a)(1) shall file monthly and quarterly reports with respect
to deposits and certificates of deposit with banks outside the United
States and specified claims and liabilities positions with unaffiliated
foreigners.
    (b) Transactions in certain domestic and foreign long-term
securities. Banks and nonbanking enterprises in the United States shall
file monthly reports on their transactions in domestic and foreign long-
term securities or other financial assets with foreign residents.
    (c) Notice of periodic reports. Notice of periodic reports will be
published in accordance with Sec. 128.1(c).

[[Page 420]]



Sec. 128.13  Special survey reports.

    The Secretary may prescribe special survey reports at such times as
the Secretary determines there is a need for detailed information on the
aggregate data derived from current periodic reports or to provide
additional qualitative information with respect to such data. Notice of
special survey reports will be published in accordance with Sec.
128.1(c).



             Subpart C_Reports on Foreign Currency Positions



Sec. 128.21  Purpose of reports.

    Reports by respondents on foreign currency positions provide data on
the nature and source of flows of mobile capital, including transactions
by large United States business enterprises (as determined by the
Secretary) and their foreign affiliates as required by 31 U.S.C. 5315.



Sec. 128.22  Periodic reports.

    Respondents shall file reports weekly, monthly and quarterly on the
value of such items as outstanding foreign exchange contracts, dealing
positions, derivative foreign currency instruments, and other assets and
liabilities denominated in the currencies specified on the forms. Notice
of periodic reports will be published in accordance with Sec. 128.1(c).



Sec. 128.23  Special survey reports.

    The Secretary may prescribe special survey reports with respect to
foreign exchange positions and related information at such times as the
Secretary determines that there is a need for prompt or expanded
information on current conditions in the foreign exchange markets.
Notice of special survey reports will be published in accordance with
Sec. 128.1(c).



  Sec. Appendix A to Part 128--Determination Made by National Advisory
         Council Pursuant to Section 2 (a) and (b) of E.O. 10033

I. Determination of the National Advisory Council pursuant to E.O. 10033

    In an action dated September 7, 1965, the National Advisory Council
on International Monetary and Financial Problems made the following
determination pursuant to section 2(a) of E.O. 10033 of February 8,
1949.
    Action 65 (E.O.)-49. The National Advisory Council, having consulted
with the Director of the Bureau of the Budget, determines the current
information with respect to international capital movements, derived
from data on U.S. liabilities to and claims on foreigners and
transactions in securities with foreigners, and current information with
respect to U.S. gold holdings, foreign-currency holdings, and dollar
liabilities to foreigners, are essential in order that the United States
may comply with official requests of the International Monetary Fund for
information with respect to the U.S. balance of payments and monetary
reserves.
    Action No. 320, March 17, 1949 is superseded by this determination
and is hereby revoked.
    II. Designation of the Treasury Department by the Director of the
Bureau of the Budget pursuant to section 2(b) of E.O. 10033.
    On December 1, 1965, the Treasury Department was designated,
pursuant to section 2(b) of E.O. 10033 of February 8, 1949, to collect
information for the International Monetary Fund under the National
Advisory Council determination of September 7, 1965. The letter
containing the designation reads as follows:

                            December 1, 1965.

Hon. Henry H. Fowler,
Secretary of the Treasury, Washington, DC 20220.

    Dear Mr. Secretary: On September 7, 1965, the National Advisory
Council after consultation with this Bureau in accordance with section
2(a) of Executive Order 10033, made the following determination (Action
65 (E.O.)-49:
    ``The National Advisory Council, having consulted with the Director
of the Bureau of the Budget, determines that current information with
respect to international capital movements, derived from data on U.S.
liabilities to claims on foreigners and transactions in securities with
foreigners, and current information with respect to U.S. gold holdings,
foreign-currency holdings, and dollar liabilities to foreigners, are
essential in order that the United States may comply with official
requests of the International Monetary Fund for information with respect
to the U.S. balance of payments and monetary reserves.''
    It is hereby determined pursuant to section 2(b) of Executive Order
10033, that the Treasury Department shall collect information pertaining
to capital movements between the United States and foreign countries and
pertaining to the monetary reserves of the United States, except
information pertaining to direct-investment transactions, U.S.
Government foreign lending operations, and claims and liabilities of
U.S.

[[Page 421]]

Government agencies (other than public debt obligations), which is
collected by the Department of Commerce.
    This letter supersedes the earlier determination as to the
responsibilities of the Treasury Department in this area, dated April
21, 1949, as amended May 4, 1950.

                            Sincerely yours,

Raymond T. Bowman,
Assistant Director for Statistical Standards.



PART 129_PORTFOLIO INVESTMENT SURVEY REPORTING--Table of Contents



Sec.
129.1 Purpose.
129.2 Definitions.
129.3 Reporting requirements.
129.4 Recordkeeping requirements.
129.5 Confidentiality.
129.6 Penalties specified by law.

    Authority: 22 U.S.C. 3101 et seq.; E.O. 11961, 42 FR 4321, 3 CFR,
1977 Comp., p. 86.

    Source: 58 FR 30707, May 27, 1993, unless otherwise noted.



Sec. 129.1  Purpose.

    The purpose of this part is to provide general information on
portfolio investment survey data collection programs and analyses under
the International Investment and Trade in Services Survey Act ((formerly
the International Investment Survey Act of 1976) (the ``Act'')). The
purpose of the Act is to provide for the collection of comprehensive and
reliable information concerning international investment, including
portfolio investment. The Act specifies that regular data collection
programs and surveys specified by the Act or deemed necessary by the
Secretary of the Treasury shall be conducted to secure information on
international capital flows and other information related to
international portfolio investment, including information that may be
necessary for computing and analyzing the United States balance of
payments.



Sec. 129.2  Definitions.

    For purposes of the Act and for reporting requirements under this
Part:
    (a) United States, when used in a geographic sense, means the
several States, the District of Columbia, the Commonwealth of Puerto
Rico, and the territories and possessions of the United States.
    (b) Foreign, when used in a geographic sense, means that which is
situated outside the United States or which belongs to or is
characteristic of a country other than the United States.
    (c) Person means any individual, branch, partnership, associated
group, association, estate, trust, corporation, or other organization
(whether or not organized under the laws of any State), and any
government (including a foreign government, the United States
Government, a State or local government, and any agency, corporation,
financial institution, or other entity or instrumentality thereof,
including a government-sponsored agency).
    (d) United States person means any person resident in the United
States or subject to the jurisdiction of the United States.
    (e) Foreign person means any person resident outside the United
States or subject to the jurisdiction of a country other than the United
States.
    (f) Foreign parent means any foreign person who owns or controls,
directly or indirectly, 10 percent or more of the voting securities of
an incorporated United States business enterprise, or an equivalent
interest in an unincorporated United States business enterprise.
    (g) Reporter means a United States person required to file a report.
    (h) Foreign official institution means central governments of
foreign countries and their possessions, including recognized central
banks of issue.



Sec. 129.3  Reporting requirements.

    (a) Notice of specific reporting requirements, including who is
required to report, the information to be reported, the manner of
reporting, and the time and place of filing reports, will be published
by the Secretary of the Treasury in the Federal Register prior to the
implementation of each survey or study.
    (b) Written responses are required from all reporters.
    (c) Information required from reporters shall be furnished under
oath.

[[Page 422]]



Sec. 129.4  Recordkeeping requirement.

    Reporters shall maintain all information used in preparing a report
under this part for the period specified in the notice published by the
Secretary of the Treasury pursuant to section 129.3, and shall make this
information available for review and inspection at the request of the
Department of the Treasury.



Sec. 129.5  Confidentiality.

    (a) Information collected pursuant to the Act will be kept in
confidence.
    (b) Access to information collected pursuant to the Act shall be
available only to officials and employees (including consultants and
contractors and their employees) designated by the Secretary of the
Treasury to perform functions under the Act.
    (c) Nothing in this part shall be construed to require any Federal
agency to disclose information otherwise protected by law.
    (d) No person can compel the submission or disclosure of reports, or
constituent parts thereof, or copies of such reports or constituents
parts thereof, prepared pursuant to this part, without the prior written
consent of the person who maintained or who furnished the report and the
customer of the person who furnished the report, where the information
supplied is identifiable as being derived from the records of the
customer. As required by the Act, any published reports issued by the
Treasury based upon information pursuant to this part will only contain
data aggregated in such a way that neither the person supplying the
information nor the investor can be identified.



Sec. 129.6  Penalties specified by law.

    Reporters are advised that the Act provides the following penalties:
    (a) Civil Penalties. Whoever fails to furnish any information
required under the Act, whether required to be furnished in the form of
a report or otherwise, or to comply with any other rule, regulation,
order, or instruction promulgated under the Act, shall be subject to a
civil penalty of not less than $2,500 and not more than $25,000.
    (b) Criminal Penalties. Whoever willfully violates any rule,
regulation, order, or instruction promulgated under the Act, upon
conviction, shall be fined not more than $10,000 and, if an individual,
may be imprisoned for not more than one year, or both, and any officer,
director, employee, or agent of any corporation who knowingly
participates in such violation, upon conviction, may be punished by a
like fine, imprisonment or both.

                        PARTS 130	131 [RESERVED]



PART 132_PROHIBITION ON FUNDING OF UNLAWFUL INTERNET GAMBLING--Table
of Contents



Sec.
132.1 Authority, purpose, and incorporation by reference.
132.2 Definitions.
132.3 Designated payment systems.
132.4 Exemptions.
132.5 Policies and procedures required.
132.6 Non-exclusive examples of policies and procedures.
132.7 Regulatory enforcement.

Appendix A to Part 132--Model Notice

    Authority: 31 U.S.C. 321 and 5364.

    Source: 73 FR 69405, Nov. 18, 2008, unless otherwise noted.



Sec. 132.1  Authority, purpose, collection of information, and
incorporation by reference.

    (a) Authority. This part is issued jointly by the Board of Governors
of the Federal Reserve System (Board) and the Secretary of the
Department of the Treasury (Treasury) under section 802 of the Unlawful
Internet Gambling Enforcement Act of 2006 (Act) (enacted as Title VIII
of the Security and Accountability For Every Port Act of 2006, Pub. L.
No. 109-347, 120 Stat. 1884, and codified at 31 U.S.C. 5361-5367). The
Act states that none of its provisions shall be construed as altering,
limiting, or extending any Federal or State law or Tribal-State compact
prohibiting, permitting, or regulating gambling within the United
States. See 31 U.S.C. 5361(b). In addition, the Act states that its
provisions are not intended to change which activities related to
horseracing may or may not be allowed under Federal law, are not
intended to change the existing relationship between the Interstate
Horseracing Act of 1978 (IHA) (15 U.S.C. 3001 et seq.) and

[[Page 423]]

other Federal statutes in effect on October 13, 2006, the date of the
Act's enactment, and are not intended to resolve any existing
disagreements over how to interpret the relationship between the IHA and
other Federal statutes. See 31 U.S.C. 5362(10)(D)(iii). This part is
intended to be consistent with these provisions.
    (b) Purpose. The purpose of this part is to issue implementing
regulations as required by the Act. The part sets out necessary
definitions, designates payment systems subject to the requirements of
this part, exempts certain participants in designated payment systems
from certain requirements of this part, provides nonexclusive examples
of policies and procedures reasonably designed to identify and block, or
otherwise prevent and prohibit, restricted transactions, and sets out
the Federal entities that have exclusive regulatory enforcement
authority with respect to the designated payments systems and non-exempt
participants therein.
    (c) Collection of information. The Office of Management and Budget
(OMB) has approved the collection of information requirements in this
part for the Department of the Treasury and assigned OMB control number
1505-0204. The Board has approved the collection of information
requirements in this part under the authority delegated to the Board by
OMB, and assigned OMB control number 7100-0317.
    (d) Incorporation by reference--relevant definitions from ACH rules.
(1) This part incorporates by reference the relevant definitions of ACH
terms as published in the ``2008 ACH Rules: A Complete Guide to Rules &
Regulations Governing the ACH Network'' (the ``ACH Rules''). The
Director of the Federal Register approves this incorporation by
reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies
of the ``2008 ACH Rules'' are available from the National Automated
Clearing House Association, Suite 100, 13450 Sunrise Valley Drive,
Herndon, Virginia 20171, http://nacha.org, (703) 561-1100. Copies also
are available for public inspection at the Department of Treasury
Library, Room 1428, Main Treasury Building, 1500 Pennsylvania Avenue,
NW., Washington, DC 20220, and the National Archives and Records
Administration (NARA). Before visiting the Treasury library, you must
call (202) 622-0990 for an appointment. For information on the
availability of this material at NARA, call (202) 741-6030, or go to:
http://www.archives.gov/federal--register/code--of--federal--
regulations/ibr--locations.html 20002.
    (2) Any amendment to definitions of the relevant ACH terms in the
ACH Rules shall not apply to this part unless the Treasury and the Board
jointly accept such amendment by publishing notice of acceptance of the
amendment to this part in the Federal Register. An amendment to the
definition of a relevant ACH term in the ACH Rules that is accepted by
the Treasury and the Board shall apply to this part on the effective
date of the rulemaking specified by the Treasury and the Board in the
joint Federal Register notice expressly accepting such amendment.



Sec. 132.2  Definitions.

    The following definitions apply solely for purposes of this part:
    (a) Actual knowledge with respect to a transaction or commercial
customer means when a particular fact with respect to that transaction
or commercial customer is known by or brought to the attention of:
    (1) An individual in the organization responsible for the
organization's compliance function with respect to that transaction or
commercial customer; or
    (2) An officer of the organization.
    (b) Automated clearing house system or ACH system means a funds
transfer system, primarily governed by the ACH Rules, which provides for
the clearing and settlement of batched electronic entries for
participating financial institutions. When referring to ACH systems, the
terms in this regulation (such as ``originating depository financial
institution,'' ``operator,'' ``originating gateway operator,''
``receiving depository financial institution,'' ``receiving gateway
operator,'' and ``third-party sender'') are defined as those terms are
defined in the ACH Rules.

[[Page 424]]

    (c) Bet or wager. (1) Means the staking or risking by any person of
something of value upon the outcome of a contest of others, a sporting
event, or a game subject to chance, upon an agreement or understanding
that the person or another person will receive something of value in the
event of a certain outcome;
    (2) Includes the purchase of a chance or opportunity to win a
lottery or other prize (which opportunity to win is predominantly
subject to chance);
    (3) Includes any scheme of a type described in 28 U.S.C. 3702;
    (4) Includes any instructions or information pertaining to the
establishment or movement of funds by the bettor or customer in, to, or
from an account with the business of betting or wagering (which does not
include the activities of a financial transaction provider, or any
interactive computer service or telecommunications service); and
    (5) Does not include--
    (i) Any activity governed by the securities laws (as that term is
defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(47)) for the purchase or sale of securities (as that term
is defined in section 3(a)(10) of that act (15 U.S.C. 78c(a)(10));
    (ii) Any transaction conducted on or subject to the rules of a
registered entity or exempt board of trade under the Commodity Exchange
Act (7 U.S.C. 1 et seq.);
    (iii) Any over-the-counter derivative instrument;
    (iv) Any other transaction that--
    (A) Is excluded or exempt from regulation under the Commodity
Exchange Act (7 U.S.C. 1 et seq.); or
    (B) Is exempt from State gaming or bucket shop laws under section
12(e) of the Commodity Exchange Act (7 U.S.C. 16(e)) or section 28(a) of
the Securities Exchange Act of 1934 (15 U.S.C. 78bb(a));
    (v) Any contract of indemnity or guarantee;
    (vi) Any contract for insurance;
    (vii) Any deposit or other transaction with an insured depository
institution;
    (viii) Participation in any game or contest in which participants do
not stake or risk anything of value other than--
    (A) Personal efforts of the participants in playing the game or
contest or obtaining access to the Internet; or
    (B) Points or credits that the sponsor of the game or contest
provides to participants free of charge and that can be used or redeemed
only for participation in games or contests offered by the sponsor; or
    (ix) Participation in any fantasy or simulation sports game or
educational game or contest in which (if the game or contest involves a
team or teams) no fantasy or simulation sports team is based on the
current membership of an actual team that is a member of an amateur or
professional sports organization (as those terms are defined in 28
U.S.C. 3701) and that meets the following conditions:
    (A) All prizes and awards offered to winning participants are
established and made known to the participants in advance of the game or
contest and their value is not determined by the number of participants
or the amount of any fees paid by those participants.
    (B) All winning outcomes reflect the relative knowledge and skill of
the participants and are determined predominantly by accumulated
statistical results of the performance of individuals (athletes in the
case of sports events) in multiple real-world sporting or other events.
    (C) No winning outcome is based--
    (1) On the score, point-spread, or any performance or performances
of any single real-world team or any combination of such teams, or
    (2) Solely on any single performance of an individual athlete in any
single real-world sporting or other event.
    (d) Block means to reject a particular transaction before or during
processing, but it does not require freezing or otherwise prohibiting
subsequent transfers or transactions regarding the proceeds or account.
    (e) Card issuer means any person who issues a credit card, debit
card, pre-paid card, or stored value card, or the agent of such person
with respect to such card.
    (f) Card system means a system for authorizing, clearing and
settling transactions in which credit cards, debit cards, pre-paid
cards, or stored value cards (such cards being issued or

[[Page 425]]

authorized by the operator of the system), are used to purchase goods or
services or to obtain a cash advance. The term includes systems both in
which the merchant acquirer, card issuer, and system operator are
separate entities and in which more than one of these roles are
performed by the same entity.
    (g) Check clearing house means an association of banks or other
payors that regularly exchange checks for collection or return.
    (h) Check collection system means an interbank system for
collecting, presenting, returning, and settling for checks or intrabank
system for settling for checks deposited in and drawn on the same bank.
When referring to check collection systems, the terms in this regulation
(such as ``paying bank,'' ``collecting bank,'' ``depositary bank,''
``returning bank,'' and ``check'') are defined as those terms are
defined in 12 CFR 229.2. For purposes of this part, ``check'' also
includes an electronic representation of a check that a bank agrees to
handle as a check.
    (i) Commercial customer means a person that is not a consumer and
that contracts with a non-exempt participant in a designated payment
system to receive, or otherwise accesses, payment transaction services
through that non-exempt participant.
    (j) Consumer means a natural person.
    (k) Designated payment system means a system listed in Sec. 132.3.
    (l) Electronic fund transfer has the same meaning given the term in
section 903 of the Electronic Fund Transfer Act (15 U.S.C. 1693a),
except that such term includes transfers that would otherwise be
excluded under section 903(6)(E) of that act (15 U.S.C. 1693a(6)(E)),
and includes any funds transfer covered by Article 4A of the Uniform
Commercial Code, as in effect in any State.
    (m) Financial institution means a State or national bank, a State or
Federal savings and loan association, a mutual savings bank, a State or
Federal credit union, or any other person that, directly or indirectly,
holds an account belonging to a consumer. The term does not include a
casino, sports book, or other business at or through which bets or
wagers may be placed or received.
    (n) Financial transaction provider means a creditor, credit card
issuer, financial institution, operator of a terminal at which an
electronic fund transfer may be initiated, money transmitting business,
or international, national, regional, or local payment network utilized
to effect a credit transaction, electronic fund transfer, stored value
product transaction, or money transmitting service, or a participant in
such network, or other participant in a designated payment system.
    (o) Foreign banking office means:
    (1) Any non-U.S. office of a financial institution; and
    (2) Any non-U.S. office of a foreign bank as described in 12 U.S.C.
3101(7).
    (p) Interactive computer service means any information service,
system, or access software provider that provides or enables computer
access by multiple users to a computer server, including specifically a
service or system that provides access to the Internet and such systems
operated or services offered by libraries or educational institutions.
    (q) Internet means the international computer network of
interoperable packet switched data networks.
    (r) Internet gambling business means the business of placing,
receiving or otherwise knowingly transmitting a bet or wager by any
means which involves the use, at least in part, of the Internet, but
does not include the performance of the customary activities of a
financial transaction provider, or any interactive computer service or
telecommunications service.
    (s) Intrastate transaction means placing, receiving, or otherwise
transmitting a bet or wager where--
    (1) The bet or wager is initiated and received or otherwise made
exclusively within a single State;
    (2) The bet or wager and the method by which the bet or wager is
initiated and received or otherwise made is expressly authorized by and
placed in accordance with the laws of such State, and the State law or
regulations include--
    (i) Age and location verification requirements reasonably designed
to

[[Page 426]]

block access to minors and persons located out of such State; and
    (ii) Appropriate data security standards to prevent unauthorized
access by any person whose age and current location has not been
verified in accordance with such State's law or regulations; and
    (3) The bet or wager does not violate any provision of--
    (i) The Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.);
    (ii) 28 U.S.C. chapter 178 (professional and amateur sports
protection);
    (iii) The Gambling Devices Transportation Act (15 U.S.C. 1171 et
seq.); or
    (iv) The Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.).
    (t) Intratribal transaction means placing, receiving or otherwise
transmitting a bet or wager where--
    (1) The bet or wager is initiated and received or otherwise made
exclusively--
    (i) Within the Indian lands of a single Indian tribe (as such terms
are defined under the Indian Gaming Regulatory Act (25 U.S.C. 2703)); or
    (ii) Between the Indian lands of two or more Indian tribes to the
extent that intertribal gaming is authorized by the Indian Gaming
Regulatory Act (25 U.S.C. 2701 et seq.);
    (2) The bet or wager and the method by which the bet or wager is
initiated and received or otherwise made is expressly authorized by and
complies with the requirements of--
    (i) The applicable tribal ordinance or resolution approved by the
Chairman of the National Indian Gaming Commission; and
    (ii) With respect to class III gaming, the applicable Tribal-State
compact;
    (3) The applicable tribal ordinance or resolution or Tribal-State
compact includes--
    (i) Age and location verification requirements reasonably designed
to block access to minors and persons located out of the applicable
Tribal lands; and
    (ii) Appropriate data security standards to prevent unauthorized
access by any person whose age and current location has not been
verified in accordance with the applicable tribal ordinance or
resolution or Tribal-State Compact; and
    (4) The bet or wager does not violate any provision of--
    (i) The Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.);
    (ii) 28 U.S.C. chapter 178 (professional and amateur sports
protection);
    (iii) The Gambling Devices Transportation Act (15 U.S.C. 1171 et
seq.); or
    (iv) The Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.).
    (u) Money transmitting business has the meaning given the term in 31
U.S.C. 5330(d)(1) (determined without regard to any regulations
prescribed by the Secretary of the Treasury thereunder).
    (v) Operator of a designated payment system means an entity that
provides centralized clearing and delivery services between participants
in the designated payment system and maintains the operational framework
for the system. In the case of an automated clearinghouse system, the
term ``operator'' has the same meaning as provided in the ACH Rules.
    (w) Participant in a designated payment system means an operator of
a designated payment system, a financial transaction provider that is a
member of, or has contracted for financial transaction services with, or
is otherwise participating in, a designated payment system, or a third-
party processor. This term does not include a customer of the financial
transaction provider, unless the customer is also a financial
transaction provider otherwise participating in the designated payment
system on its own behalf.
    (x) Reasoned legal opinion means a written expression of
professional judgment by a State-licensed attorney that addresses the
facts of a particular client's business and the legality of the client's
provision of its services to relevant customers in the relevant
jurisdictions under applicable federal and State law, and, in the case
of intratribal transactions, applicable tribal ordinances, tribal
resolutions, and Tribal-State compacts. A written legal opinion will not
be considered ``reasoned'' if it does nothing more than recite the facts
and express a conclusion.

[[Page 427]]

    (y) Restricted transaction means any of the following transactions
or transmittals involving any credit, funds, instrument, or proceeds
that the Act prohibits any person engaged in the business of betting or
wagering (which does not include the activities of a financial
transaction provider, or any interactive computer service or
telecommunications service) from knowingly accepting, in connection with
the participation of another person in unlawful Internet gambling--
    (1) Credit, or the proceeds of credit, extended to or on behalf of
such other person (including credit extended through the use of a credit
card);
    (2) An electronic fund transfer, or funds transmitted by or through
a money transmitting business, or the proceeds of an electronic fund
transfer or money transmitting service, from or on behalf of such other
person; or
    (3) Any check, draft, or similar instrument that is drawn by or on
behalf of such other person and is drawn on or payable at or through any
financial institution.
    (z) State means any State of the United States, the District of
Columbia, or any commonwealth, territory, or other possession of the
United States, including the Commonwealth of Puerto Rico, the
Commonwealth of the Northern Mariana Islands, American Samoa, Guam, and
the Virgin Islands.
    (aa) Third-party processor means a service provider that--
    (1) In the case of a debit transaction payment, such as an ACH debit
entry or card system transaction, has a direct relationship with the
commercial customer that is initiating the debit transfer transaction
and acts as an intermediary between the commercial customer and the
first depository institution to handle the transaction;
    (2) In the case of a credit transaction payment, such as an ACH
credit entry, has a direct relationship with the commercial customer
that is to receive the proceeds of the credit transfer and acts as an
intermediary between the commercial customer and the last depository
institution to handle the transaction; and
    (3) In the case of a cross-border ACH debit or check collection
transaction, is the first service provider located within the United
States to receive the ACH debit instructions or check for collection.
    (bb) Unlawful Internet gambling means to place, receive, or
otherwise knowingly transmit a bet or wager by any means which involves
the use, at least in part, of the Internet where such bet or wager is
unlawful under any applicable Federal or State law in the State or
Tribal lands in which the bet or wager is initiated, received, or
otherwise made. The term does not include placing, receiving, or
otherwise transmitting a bet or wager that is excluded from the
definition of this term by the Act as an intrastate transaction or an
intra-tribal transaction, and does not include any activity that is
allowed under the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et
seq.; see Sec. 132.1(a)). The intermediate routing of electronic data
shall not determine the location or locations in which a bet or wager is
initiated, received, or otherwise made.
    (cc) Wire transfer system means a system through which an
unconditional order to a bank to pay a fixed or determinable amount of
money to a beneficiary upon receipt, or on a day stated in the order, is
transmitted by electronic or other means through the network, between
banks, or on the books of a bank. When referring to wire transfer
systems, the terms in this regulation (such as ``bank,'' ``originator's
bank,'' ``beneficiary's bank,'' and ``intermediary bank'') are defined
as those terms are defined in 12 CFR part 210, appendix B.



Sec. 132.3  Designated payment systems.

    The following payment systems could be used by participants in
connection with, or to facilitate, a restricted transaction:
    (a) Automated clearing house systems;
    (b) Card systems;
    (c) Check collection systems;
    (d) Money transmitting businesses solely to the extent they
    (1) Engage in the transmission of funds, which does not include
check cashing, currency exchange, or the issuance or redemption of money
orders, travelers' checks, and other similar instruments; and

[[Page 428]]

    (2) Permit customers to initiate transmission of funds transactions
remotely from a location other than a physical office of the money
transmitting business; and
    (e) Wire transfer systems.



Sec. 132.4  Exemptions.

    (a) Automated clearing house systems. The participants processing a
particular transaction through an automated clearing house system are
exempt from this regulation's requirements for establishing written
policies and procedures reasonably designed to prevent or prohibit
restricted transactions with respect to that transaction, except for--
    (1) The receiving depository financial institution and any third-
party processor receiving the transaction on behalf of the receiver in
an ACH credit transaction;
    (2) The originating depository financial institution and any third-
party processor initiating the transaction on behalf of the originator
in an ACH debit transaction; and
    (3) The receiving gateway operator and any third-party processor
that receives instructions for an ACH debit transaction directly from a
foreign sender (which could include a foreign banking office, a foreign
third-party processor, or a foreign originating gateway operator).
    (b) Check collection systems. The participants in a particular check
collection through a check collection system are exempt from this
regulation's requirements for establishing written policies and
procedures reasonably designed to prevent or prohibit restricted
transactions with respect to that check collection, except for the
depositary bank.
    (c) Money transmitting businesses. The participants in a money
transmitting business are exempt from this regulation's requirements for
establishing written policies and procedures reasonably designed to
prevent or prohibit restricted transactions, except for the operator.
    (d) Wire transfer systems. The participants in a particular wire
transfer through a wire transfer system are exempt from this
regulation's requirements for establishing written policies and
procedures reasonably designed to prevent or prohibit restricted
transactions with respect to that transaction, except for the
beneficiary's bank.



Sec. 132.5  Policies and procedures required.

    (a) All non-exempt participants in designated payment systems shall
establish and implement written policies and procedures reasonably
designed to identify and block or otherwise prevent or prohibit
restricted transactions.
    (b) A non-exempt financial transaction provider participant in a
designated payment system shall be considered to be in compliance with
the requirements of paragraph (a) of this section if--
    (1) It relies on and complies with the written policies and
procedures of the designated payment system that are reasonably designed
to--
    (i) Identify and block restricted transactions; or
    (ii) Otherwise prevent or prohibit the acceptance of the products or
services of the designated payment system or participant in connection
with restricted transactions; and
    (2) Such policies and procedures of the designated payment system
comply with the requirements of this part.
    (c) For purposes of paragraph (b)(2) in this section, a participant
in a designated payment system may rely on a written statement or notice
by the operator of that designated payment system to its participants
that states that the operator has designed or structured the system's
policies and procedures for identifying and blocking or otherwise
preventing or prohibiting restricted transactions to comply with the
requirements of this part as conclusive evidence that the system's
policies and procedures comply with the requirements of this part,
unless the participant is notified otherwise by its Federal functional
regulator or, in the case of participants that are not directly
supervised by a Federal functional regulator, the Federal Trade
Commission.
    (d) As provided in the Act, a person that identifies and blocks a
transaction, prevents or prohibits the acceptance of its products or
services in

[[Page 429]]

connection with a transaction, or otherwise refuses to honor a
transaction, shall not be liable to any party for such action if--
    (1) The transaction is a restricted transaction;
    (2) Such person reasonably believes the transaction to be a
restricted transaction; or
    (3) The person is a participant in a designated payment system and
blocks or otherwise prevents the transaction in reliance on the policies
and procedures of the designated payment system in an effort to comply
with this regulation.
    (e) Nothing in this part requires or is intended to suggest that
designated payment systems or participants therein must or should block
or otherwise prevent or prohibit any transaction in connection with any
activity that is excluded from the definition of ``unlawful Internet
gambling'' in the Act as an intrastate transaction, an intratribal
transaction, or a transaction in connection with any activity that is
allowed under the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et
seq.; see Sec. 132.1(a)).
    (f) Nothing in this part modifies any requirement imposed on a
participant by other applicable law or regulation to file a suspicious
activity report to the appropriate authorities.
    (g) The requirement of this part to establish and implement written
policies and procedures applies only to the U.S. offices of participants
in designated payment systems.



Sec. 132.6  Non-exclusive examples of policies and procedures.

    (a) In general. The examples of policies and procedures to identify
and block or otherwise prevent or prohibit restricted transactions set
out in this section are non-exclusive. In establishing and implementing
written policies and procedures to identify and block or otherwise
prevent or prohibit restricted transactions, a non-exempt participant in
a designated payment system is permitted to design and implement
policies and procedures tailored to its business that may be different
than the examples provided in this section. In addition, non-exempt
participants may use different policies and procedures with respect to
different business lines or different parts of the organization.
    (b) Due diligence. If a non-exempt participant in a designated
payment system establishes and implements procedures for due diligence
of its commercial customer accounts or commercial customer relationships
in order to comply, in whole or in part, with the requirements of this
regulation, those due diligence procedures will be deemed to be
reasonably designed to identify and block or otherwise prevent or
prohibit restricted transactions if the procedures include the steps set
out in paragraphs (b)(1), (b)(2), and (b)(3) of this section and subject
to paragraph (b)(4) of this section.
    (1) At the establishment of the account or relationship, the
participant conducts due diligence of a commercial customer and its
activities commensurate with the participant's judgment of the risk of
restricted transactions presented by the customer's business.
    (2) Based on its due diligence, the participant makes a
determination regarding the risk the commercial customer presents of
engaging in an Internet gambling business and follows either paragraph
(b)(2)(i) or (b)(2)(ii) of this section.
    (i) The participant determines that the commercial customer presents
a minimal risk of engaging in an Internet gambling business.
    (ii) The participant cannot determine that the commercial customer
presents a minimal risk of engaging in an Internet gambling business, in
which case it obtains the documentation in either paragraph
(b)(2)(ii)(A) or (b)(2)(ii)(B) of this section--
    (A) Certification from the commercial customer that it does not
engage in an Internet gambling business; or
    (B) If the commercial customer does engage in an Internet gambling
business, each of the following--
    (1) Evidence of legal authority to engage in the Internet gambling
business, such as--
    (i) A copy of the commercial customer's license that expressly
authorizes the customer to engage in the Internet gambling business
issued by the appropriate State or Tribal authority or, if the
commercial customer does

[[Page 430]]

not have such a license, a reasoned legal opinion that demonstrates that
the commercial customer's Internet gambling business does not involve
restricted transactions; and
    (ii) A written commitment by the commercial customer to notify the
participant of any changes in its legal authority to engage in its
Internet gambling business.
    (2) A third-party certification that the commercial customer's
systems for engaging in the Internet gambling business are reasonably
designed to ensure that the commercial customer's Internet gambling
business will remain within the licensed or otherwise lawful limits,
including with respect to age and location verification.
    (3) The participant notifies all of its commercial customers,
through provisions in the account or commercial customer relationship
agreement or otherwise, that restricted transactions are prohibited from
being processed through the account or relationship.
    (4) With respect to the determination in paragraph (b)(2)(i) of this
section, participants may deem the following commercial customers to
present a minimal risk of engaging in an Internet gambling business--
    (i) An entity that is directly supervised by a Federal functional
regulator as set out in Sec. 132.7(a); or
    (ii) An agency, department, or division of the Federal government or
a State government.
    (c) Automated clearing house system examples. (1) The policies and
procedures of the originating depository financial institution and any
third party processor in an ACH debit transaction, and the receiving
depository financial institution and any third party processor in an ACH
credit transaction, are deemed to be reasonably designed to identify and
block or otherwise prevent or prohibit restricted transactions if they--
    (i) Address methods to conduct due diligence in establishing a
commercial customer account or relationship as set out in Sec.
132.6(b);
    (ii) Address methods to conduct due diligence as set out in Sec.
132.6(b)(2)(ii)(B) in the event that the participant has actual
knowledge that an existing commercial customer of the participant
engages in an Internet gambling business; and
    (iii) Include procedures to be followed with respect to a commercial
customer if the originating depository financial institution or third-
party processor has actual knowledge that its commercial customer has
originated restricted transactions as ACH debit transactions or if the
receiving depository financial institution or third-party processor has
actual knowledge that its commercial customer has received restricted
transactions as ACH credit transactions, such as procedures that
address--
    (A) The circumstances under which the commercial customer should not
be allowed to originate ACH debit transactions or receive ACH credit
transactions; and
    (B) The circumstances under which the account should be closed.
    (2) The policies and procedures of a receiving gateway operator and
third-party processor that receives instructions to originate an ACH
debit transaction directly from a foreign sender are deemed to be
reasonably designed to prevent or prohibit restricted transactions if
they include procedures to be followed with respect to a foreign sender
if the receiving gateway operator or third-party processor has actual
knowledge, obtained through notification by a government entity, such as
law enforcement or a regulatory agency, that such instructions included
instructions for restricted transactions. Such procedures may address
sending notification to the foreign sender, such as in the form of the
notice contained in appendix A to this part.
    (d) Card system examples. The policies and procedures of a card
system operator, a merchant acquirer, third-party processor, or a card
issuer, are deemed to be reasonably designed to identify and block or
otherwise prevent or prohibit restricted transactions, if the policies
and procedures--
    (1) Provide for either--
    (i) Methods to conduct due diligence--
    (A) In establishing a commercial customer account or relationship as
set out in Sec. 132.6(b); and

[[Page 431]]

    (B) As set out in Sec. 132.6(b)(2)(ii)(B) in the event that the
participant has actual knowledge that an existing commercial customer of
the participant engages in an Internet gambling business; or
    (ii) Implementation of a code system, such as transaction codes and
merchant/business category codes, that are required to accompany the
authorization request for a transaction, including--
    (A) The operational functionality to enable the card system operator
or the card issuer to reasonably identify and deny authorization for a
transaction that the coding procedure indicates may be a restricted
transaction; and
    (B) Procedures for ongoing monitoring or testing by the card system
operator to detect potential restricted transactions, including--
    (1) Conducting testing to ascertain whether transaction
authorization requests are coded correctly; and
    (2) Monitoring and analyzing payment patterns to detect suspicious
payment volumes from a merchant customer; and
    (2) For the card system operator, merchant acquirer, or third-party
processor, include procedures to be followed when the participant has
actual knowledge that a merchant has received restricted transactions
through the card system, such as--
    (i) The circumstances under which the access to the card system for
the merchant, merchant acquirer, or third-party processor should be
denied; and
    (ii) The circumstances under which the merchant account should be
closed.
    (e) Check collection system examples. (1) The policies and
procedures of a depositary bank are deemed to be reasonably designed to
identify and block or otherwise prevent or prohibit restricted
transactions, if they--
    (i) Address methods for the depositary bank to conduct due diligence
in establishing a commercial customer account or relationship as set out
in Sec. 132.6(b);
    (ii) Address methods for the depositary bank to conduct due
diligence as set out in Sec. 132.6(b)(2)(ii)(B) in the event that the
depositary bank has actual knowledge that an existing commercial
customer engages in an Internet gambling business; and
    (iii) Include procedures to be followed if the depositary bank has
actual knowledge that a commercial customer of the depositary bank has
deposited checks that are restricted transactions, such as procedures
that address--
    (A) The circumstances under which check collection services for the
customer should be denied; and
    (B) The circumstances under which the account should be closed.
    (2) The policies and procedures of a depositary bank that receives
checks for collection from a foreign banking office are deemed to be
reasonably designed to identify and block or otherwise prevent or
prohibit restricted transactions if they include procedures to be
followed by the depositary bank when it has actual knowledge, obtained
through notification by a government entity, such as law enforcement or
a regulatory agency, that a foreign banking office has sent checks to
the depositary bank that are restricted transactions. Such procedures
may address sending notification to the foreign banking office, such as
in the form of the notice contained in the appendix to this part.
    (f) Money transmitting business examples. The policies and
procedures of an operator of a money transmitting business are deemed to
be reasonably designed to identify and block or otherwise prevent or
prohibit restricted transactions if they--
    (1) Address methods for the operator to conduct due diligence in
establishing a commercial customer relationship as set out in Sec.
132.6(b);
    (2) Address methods for the operator to conduct due diligence as set
out in Sec. 132.6(b)(2)(ii)(B) in the event that the operator has
actual knowledge that an existing commercial customer engages in an
Internet gambling business;
    (3) Include procedures regarding ongoing monitoring or testing by
the operator to detect potential restricted transactions, such as
monitoring and analyzing payment patterns to detect suspicious payment
volumes to any recipient; and

[[Page 432]]

    (4) Include procedures when the operator has actual knowledge that a
commercial customer of the operator has received restricted transactions
through the money transmitting business, that address--
    (i) The circumstances under which money transmitting services should
be denied to that commercial customer; and
    (ii) The circumstances under which the commercial customer account
should be closed.
    (g) Wire transfer system examples. The policies and procedures of
the beneficiary's bank in a wire transfer are deemed to be reasonably
designed to identify and block or otherwise prevent or prohibit
restricted transactions if they--
    (1) Address methods for the beneficiary's bank to conduct due
diligence in establishing a commercial customer account as set out in
Sec. 132.6(b);
    (2) Address methods for the beneficiary's bank to conduct due
diligence as set out in Sec. 132.6(b)(2)(ii)(B) in the event that the
beneficiary's bank has actual knowledge that an existing commercial
customer of the bank engages in an Internet gambling business;
    (3) Include procedures to be followed if the beneficiary's bank
obtains actual knowledge that a commercial customer of the bank has
received restricted transactions through the wire transfer system, such
as procedures that address
    (i) The circumstances under which the beneficiary bank should deny
wire transfer services to the commercial customer; and
    (ii) The circumstances under which the commercial customer account
should be closed.



Sec. 132.7  Regulatory enforcement.

    The requirements under this part are subject to the exclusive
regulatory enforcement of--
    (a) The Federal functional regulators, with respect to the
designated payment systems and participants therein that are subject to
the respective jurisdiction of such regulators under section 505(a) of
the Gramm-Leach-Bliley Act (15 U.S.C. 6805(a)) and section 5g of the
Commodity Exchange Act (7 U.S.C. 7b-2); and
    (b) The Federal Trade Commission, with respect to designated payment
systems and participants therein not otherwise subject to the
jurisdiction of any Federal functional regulators (including the
Commission) as described in paragraph (a) of this section.



                Sec. Appendix A to Part 132--Model Notice

[Date]
[Name of foreign sender or foreign banking office]
[Address]
Re: U.S. Unlawful Internet Gambling Enforcement Act Notice

Dear [Name of foreign counterparty]:

    On [date], U.S. government officials informed us that your
institution processed payments through our facilities for Internet
gambling transactions restricted by U.S. law on [dates, recipients, and
other relevant information if available].
    We provide this notice to comply with U.S. Government regulations
implementing the Unlawful Internet Gambling Enforcement Act of 2006
(Act), a U.S. federal law. Our policies and procedures established in
accordance with those regulations provide that we will notify a foreign
counterparty if we learn that the counterparty has processed payments
through our facilities for Internet gambling transactions restricted by
the Act. This notice ensures that you are aware that we have received
information that your institution has processed payments for Internet
gambling restricted by the Act.
    The Act is codified in subchapter IV, chapter 53, title 31 of the
U.S. Code (31 U.S.C. 5361 et seq.). Implementing regulations that
duplicate one another can be found at part 233 of title 12 of the U.S.
Code of Federal Regulations (12 CFR part 233) and part 132 of title 31
of the U.S. Code of Federal Regulations (31 CFR part 132).

                        PARTS 133	148 [RESERVED]



PART 149_CALCULATION OF MAXIMUM OBLIGATION LIMITATION--Table of Contents



Sec.
149.1 Authority and purpose.
149.2 Definitions.
149.3 Maximum obligation limitation.

    Authority: 31 U.S.C. 321 and 12 U.S.C. 5390.

    Source: 77 FR 37558, June 22, 2012, unless otherwise noted.

[[Page 433]]



Sec. 149.1  Authority and purpose.

    (a) Authority. This part is issued by the Federal Deposit Insurance
Corporation (FDIC) and the Secretary of the Department of the Treasury
(Treasury) under section 210(n)(7) of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (Act).
    (b) Purpose. The purpose of this part is to issue implementing
regulations as required by the Act. The part governs the calculation of
the maximum obligation limitation which limits the aggregate amount of
outstanding obligations the FDIC may issue or incur in connection with
the orderly liquidation of a covered financial company.



Sec. 149.2  Definitions.

    As used in this part:
    Fair value. The term ``fair value'' means the expected total
aggregate value of each asset, or group of assets that are managed
within a portfolio of a covered financial company on a consolidated
basis if such asset, or group of assets, was sold or otherwise disposed
of in an orderly transaction.
    Most recent financial statement available. (1) The term ``most
recent financial statement available'' means a covered financial
company's--
    (i) Most recent financial statement filed with the Securities and
Exchange Commission or any other regulatory body;
    (ii) Most recent financial statement audited by an independent CPA
firm; or
    (iii) Other available financial statements.
    (2) The FDIC and the Treasury will jointly determine the most
pertinent of the above financial statements, taking into consideration
the timeliness and reliability of the statements being considered.
    Obligation. The term ``obligation'' means, with respect to any
covered financial company--
    (1) Any guarantee issued by the FDIC on behalf of the covered
financial company;
    (2) Any amount borrowed pursuant to section 210(n)(5)(A) of the Act;
and
    (3) Any other obligation with respect to the covered financial
company for which the FDIC has a direct or contingent liability to pay
any amount.
    Total consolidated assets of each covered financial company that are
available for repayment. The term ``total consolidated assets of each
covered financial company that are available for repayment'' means the
difference between:
    (1) The total assets of the covered financial company on a
consolidated basis that are available for liquidation during the
operation of the receivership; and
    (2) To the extent included in paragraph (1) of this definition, all
assets that are separated from, or made unavailable to, the covered
financial company by a statutory or regulatory barrier that prevents the
covered financial company from possessing or selling assets and using
the proceeds from the sale of such assets.



Sec. 149.3  Maximum obligation limitation.

    The FDIC shall not, in connection with the orderly liquidation of a
covered financial company, issue or incur any obligation, if, after
issuing or incurring the obligation, the aggregate amount of such
obligations outstanding for each covered financial company would
exceed--
    (a) An amount that is equal to 10 percent of the total consolidated
assets of the covered financial company, based on the most recent
financial statement available, during the 30-day period immediately
following the date of appointment of the FDIC as receiver (or a shorter
time period if the FDIC has calculated the amount described under
paragraph (b) of this section); and
    (b) The amount that is equal to 90 percent of the fair value of the
total consolidated assets of each covered financial company that are
available for repayment, after the time period described in paragraph
(a) of this section.



PART 150_FINANCIAL RESEARCH FUND--Table of Contents



Sec.
150.1 Scope.
150.2 Definitions.
150.3 Determination of assessed companies.
150.4 Calculation of assessment basis.
150.5 Calculation of assessments.
150.6 Notice and payment of assessments.

    Authority: 12 U.S.C. 5345; 31 U.S.C. 321.

[[Page 434]]


    Source: 77 FR 29894, May 21, 2012, unless otherwise noted.



Sec. 150.1  Scope.

    The assessments contained in this part are made pursuant to the
authority contained in 12 U.S.C. 5345.



Sec. 150.2  Definitions.

    As used in this part:
    Assessed company means:
    (1) A bank holding company that has $50 billion or more in total
consolidated assets, based on the average of total consolidated assets
as reported on the bank holding company's four most recent quarterly
Consolidated Financial Statements for Bank Holding Companies (or, in the
case of a foreign banking organization, based on the average of total
assets at end of period as reported on such company's four most recent
quarterly Capital and Asset Information for the Top-tier Consolidated
Foreign Banking Organization submissions if filed quarterly, or two most
recent annual submissions if filed annually, as appropriate); or
    (2) A nonbank financial company required to be supervised by the
Board under section 113 of the Dodd-Frank Act.
    Assessment basis means, for a given assessment period, an estimate
of the total expenses that are necessary or appropriate to carry out the
responsibilities of the Office and the Council as set out in the Dodd-
Frank Act (including an amount necessary to reimburse reasonable
implementation expenses of the Corporation that shall be treated as
expenses of the Council pursuant to section 210(n)(10) of the Dodd-
Frank).
    Assessment fee rate, with regard to a particular assessment period,
means the rate published by the Department for the calculation of
assessment fees for that period.
    Assessment payment date means:
    (1) For the initial assessment period, July 20, 2012;
    (2) For any semiannual assessment period ending on March 31 of a
given calendar year, September 15 of the prior calendar year; and
    (3) For any semiannual assessment period ending on September 30 of a
given calendar year, March 15 of the same year.
    Assessment period means any of:
    (1) The initial assessment period; or
    (2) Any semiannual assessment period.
    Bank holding company means:
    (1) A bank holding company as defined in section 2 of the Bank
Holding Company Act of 1956 (12 U.S.C. 1841); or
    (2) A foreign banking organization.
    Board means the Board of Governors of the Federal Reserve System.
    Corporation means the Federal Deposit Insurance Corporation.
    Council means the Financial Stability Oversight Council established
by section 111 of the Dodd-Frank Act.
    Department means the Department of the Treasury.
    Determination date means:
    (1) For the initial assessment period, December 31, 2011.
    (2) For any semiannual assessment period ending on March 31 of a
given calendar year, May 31 of the prior calendar year.
    (3) For any semiannual assessment period ending on September 30 of a
given calendar year, November 30 of the prior calendar year.
    Dodd-Frank Act means the Dodd-Frank Wall Street Reform and Consumer
Protection Act.
    Foreign banking organization means a foreign bank or company that is
treated as a bank holding company for purposes of the Bank Holding
Company Act of 1956, pursuant to section 8(a) of the International
Banking Act of 1978 (12 U.S.C. 3106(a)).
    Initial assessment period means the period of time beginning on July
20, 2012 and ending on March 31, 2013.
    Office means the Office of Financial Research established by section
152 of the Dodd-Frank Act.
    Semiannual assessment period means:
    (1) Any period of time beginning after the initial assessment period
on October 1 and ending on March 31 of the following calendar year; or
    (2) Any period of time beginning after the initial assessment period
on April 1 and ending on September 30 of the same calendar year.
    Total assessable assets means:
    (1) For a bank holding company other than a foreign banking
organization,

[[Page 435]]

the average of total consolidated assets for the four quarters preceding
the determination date, as reported on the bank holding company's four
most recent FR Y-9C filings;
    (2) For any other bank holding company that has $50 billion or more
in total consolidated assets, the average of the company's total assets
of combined U.S. operations for the four quarters preceding the
determination date, based on the combined total assets of the foreign
banking organization's U.S. branches, agencies, and subsidiaries as
reported on the foreign banking organization's four most recent
quarterly financial reports, or, if the company only files financial
reports annually, the average of the company's total assets of combined
U.S. operations for the two years preceding the determination date,
based on the combined total assets of the foreign banking organization's
U.S. branches, agencies, and subsidiaries as reported on the foreign
banking organization's two most recent annual financial reports; or
    (3) For a nonbank financial company supervised by the Board under
section 113 of the Dodd-Frank Act, either the average of total
consolidated assets for the four quarters preceding the determination
date, if the company is a U.S. company, or the average of total assets
of combined U.S. operations for the four quarters preceding the
determination date, if the company is a foreign company.



Sec. 150.3  Determination of assessed companies.

    (a) The determination that a bank holding company or a nonbank
financial company is an assessed company will be made by the Department.
    (b) The Department will apply the following principles in
determining whether a company is an assessed company:
    (1) For tiered bank holding companies for which a holding company
owns or controls, or is owned or controlled by, other holding companies,
the assessed company shall be the top-tier, regulated holding company.
    (2) In situations where more than one top-tier, regulated bank
holding company has a legal authority for control of a U.S. bank, each
of the top-tier regulated holding companies shall be designated as an
assessed company.
    (3) In situations where a company has not filed four consecutive
quarters of the financial reports referenced above for the most recent
quarters (or two consecutive years for annual filers of the FR Y-7Q or
successor form), such as may be true for companies that recently
converted to a bank holding company, the Department will use, at its
discretion, other financial or annual reports filed by the company, such
as Securities and Exchange Commission (SEC) filings, to determine a
company's total consolidated assets.
    (4) In situations where a company does not report total consolidated
assets in its public reports or where a company uses a financial
reporting methodology other than U.S. GAAP to report on its U.S.
operations, the Department will use, at its discretion, any comparable
financial information that the Department may require from the company
for this determination.
    (c) Any company that the Department determines is an assessed
company on a given determination date will be an assessed company for
the entire assessment period related to such determination date, and
will be subject to the full assessment fee for that assessment period,
regardless of any changes in the company's assets or other attributes
that occur after the determination date.



Sec. 150.4  Calculation of assessment basis.

    (a) For the initial assessment period, the Department will calculate
the assessment basis such that it is equivalent to the sum of:
    (1) Budgeted operating expenses for the Office for the period
beginning July 21, 2012 and ending March 31, 2013;
    (2) Budgeted operating expenses for the Council for the period
beginning July 21, 2012 and ending March 31, 2013;
    (3) Capital expenses for the Office for the period beginning July
21, 2012 and ending April 30, 2013; and
    (4) Capital expenses for the Council for the period beginning July
21, 2012 and ending April 30, 2013; and

[[Page 436]]

    (5) An amount necessary to reimburse reasonable implementation
expenses of the Federal Deposit Insurance Corporation as provided under
section 210(n)(10) of the Dodd-Frank Act.
    (b) For each subsequent assessment period, the Department will
calculate an assessment basis that shall be sufficient to replenish the
Financial Research Fund to a level equivalent to the sum of:
    (1) Budgeted operating expenses for the Office for the applicable
assessment period;
    (2) Budgeted operating expenses for the Council for the applicable
assessment period;
    (3) Budgeted capital expenses for the Office for the 12-month period
beginning on the first day of the applicable assessment period;
    (4) Budgeted capital expenses for the Council for the 12-month
period beginning on the first day of the applicable assessment period;
and
    (5) An amount necessary to reimburse reasonable implementation
expenses of the Federal Deposit Insurance Corporation as provided under
section 210(n)(10) of the Dodd-Frank Act.



Sec. 150.5  Calculation of assessments.

    (a) For each assessed company, the Department will calculate the
total assessable assets in accordance with the definition in Sec.
150.2.
    (b) The Department will allocate the assessment basis to the
assessed companies in the following manner:
    (1) Based on the sum of all assessed companies' total assessable
assets, the Department will calculate the assessment fee rate necessary
to collect the assessment basis for the applicable assessment period.
    (2) The assessment payable by an assessed company for each
assessment period shall be equal to the assessment fee rate for that
assessment period multiplied by the total assessable assets of such
assessed company.
    (3) Foreign banking organizations with less than $50 billion in
total assessable assets shall not be assessed.



Sec. 150.6  Notice and payment of assessments.

    (a) No later than fifteen calendar days after the determination date
(or, in the case of the initial assessment period, no later than seven
days after the publication date of this rule), the Department will send
to each assessed company a statement that:
    (1) Confirms that such company has been determined by the Department
to be an assessed company; and
    (2) States the total assessable assets that the Department has
determined will be used for calculating the company's assessment.
    (b) If a company that is required to make an assessment payment for
a given semiannual assessment period believes that the statement
referred to in paragraph (a) of this section contains an error, the
company may provide the Department with a written request for a revised
statement. Such request must be received by the Department via email
within one month and must include all facts that the company requests
the Department to consider. The Department will respond to all such
requests within 21 calendar days of receipt thereof.
    (c) No later than the 14 calendar days prior to the payment date for
a given assessment period, the Department will send an electronic
billing notification to each assessed company, containing the final
assessment that is required to be paid by such assessed company.
    (d) For the purpose of making the payments described in Sec. 150.5,
each assessed company shall designate a deposit account for direct debit
by the Department through www.pay.gov or successor Web site. No later
than the later of 30 days prior to the payment date for an assessment
period, or the effective date of this rule, each such company shall
provide notice to the Department of the account designated, including
all information and authorizations required by the Department for direct
debit of the account. After the initial notice of the designated
account, no further notice is required unless the company designates a
different account for assessment debit by the Department, in which case
the requirements of the preceding sentence apply.

[[Page 437]]

    (e) Each assessed company shall take all actions necessary to allow
the Department to debit assessments from such company's designated
deposit account. Each such company shall, prior to each assessment
payment date, ensure that funds in an amount at least equal to the
amount on the relevant electronic billing notification are available in
the designated deposit account for debit by the Department. Failure to
take any such action or to provide such funding of the account shall be
deemed to constitute nonpayment of the assessment. The Department will
cause the amount stated in the applicable electronic billing
notification to be directly debited on the appropriate payment date from
the deposit account so designated.
    (f) In the event that, for a given assessment period, an assessed
company materially misstates or misrepresents any information that is
used by the Department in calculating that company's total assessable
assets, the Department may at any time re-calculate the assessment
payable by that company for that assessment period, and the assessed
company shall take all actions necessary to allow the Department to
immediately debit any additional payable amounts from such assessed
company's designated deposit account.
    (g) If a due date under this section falls on a date that is not a
business day, the applicable date shall be the next business day.

                        PARTS 151	199 [RESERVED]

[[Page 439]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 441]]



                    Table of CFR Titles and Chapters




                      (Revised as of July 1, 2014)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
       III  Administrative Conference of the United States (Parts 
                300--399)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 2--199)
        II  Office of Management and Budget Guidance (Parts 200--
                299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
       III  Department of Health and Human Services (Parts 300--
                399)
        IV  Department of Agriculture (Parts 400--499)
        VI  Department of State (Parts 600--699)
       VII  Agency for International Development (Parts 700--799)
      VIII  Department of Veterans Affairs (Parts 800--899)
        IX  Department of Energy (Parts 900--999)
        XI  Department of Defense (Parts 1100--1199)
       XII  Department of Transportation (Parts 1200--1299)
      XIII  Department of Commerce (Parts 1300--1399)
       XIV  Department of the Interior (Parts 1400--1499)
        XV  Environmental Protection Agency (Parts 1500--1599)
     XVIII  National Aeronautics and Space Administration (Parts 
                1800--1899)
        XX  United States Nuclear Regulatory Commission (Parts 
                2000--2099)
      XXII  Corporation for National and Community Service (Parts 
                2200--2299)
     XXIII  Social Security Administration (Parts 2300--2399)
      XXIV  Housing and Urban Development (Parts 2400--2499)
       XXV  National Science Foundation (Parts 2500--2599)
      XXVI  National Archives and Records Administration (Parts 
                2600--2699)
     XXVII  Small Business Administration (Parts 2700--2799)
    XXVIII  Department of Justice (Parts 2800--2899)

[[Page 442]]

       XXX  Department of Homeland Security (Parts 3000--3099)
      XXXI  Institute of Museum and Library Services (Parts 3100--
                3199)
     XXXII  National Endowment for the Arts (Parts 3200--3299)
    XXXIII  National Endowment for the Humanities (Parts 3300--
                3399)
     XXXIV  Department of Education (Parts 3400--3499)
      XXXV  Export-Import Bank of the United States (Parts 3500--
                3599)
    XXXVII  Peace Corps (Parts 3700--3799)
     LVIII  Election Assistance Commission (Parts 5800--5899)

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--199)
        II  Recovery Accountability and Transparency Board (Parts 
                200--299)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Parts 2100--2199)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Parts 3200--
                3299)
     XXIII  Department of Energy (Parts 3300--3399)
      XXIV  Federal Energy Regulatory Commission (Parts 3400--
                3499)
       XXV  Department of the Interior (Parts 3500--3599)
      XXVI  Department of Defense (Parts 3600--3699)
    XXVIII  Department of Justice (Parts 3800--3899)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)

[[Page 443]]

    XXXIII  Overseas Private Investment Corporation (Parts 4300--
                4399)
     XXXIV  Securities and Exchange Commission (Parts 4400--4499)
      XXXV  Office of Personnel Management (Parts 4500--4599)
    XXXVII  Federal Election Commission (Parts 4700--4799)
        XL  Interstate Commerce Commission (Parts 5000--5099)
       XLI  Commodity Futures Trading Commission (Parts 5100--
                5199)
      XLII  Department of Labor (Parts 5200--5299)
     XLIII  National Science Foundation (Parts 5300--5399)
       XLV  Department of Health and Human Services (Parts 5500--
                5599)
      XLVI  Postal Rate Commission (Parts 5600--5699)
     XLVII  Federal Trade Commission (Parts 5700--5799)
    XLVIII  Nuclear Regulatory Commission (Parts 5800--5899)
      XLIX  Federal Labor Relations Authority (Parts 5900--5999)
         L  Department of Transportation (Parts 6000--6099)
       LII  Export-Import Bank of the United States (Parts 6200--
                6299)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Parts 6400--6499)
        LV  National Endowment for the Arts (Parts 6500--6599)
       LVI  National Endowment for the Humanities (Parts 6600--
                6699)
      LVII  General Services Administration (Parts 6700--6799)
     LVIII  Board of Governors of the Federal Reserve System 
                (Parts 6800--6899)
       LIX  National Aeronautics and Space Administration (Parts 
                6900--6999)
        LX  United States Postal Service (Parts 7000--7099)
       LXI  National Labor Relations Board (Parts 7100--7199)
      LXII  Equal Employment Opportunity Commission (Parts 7200--
                7299)
     LXIII  Inter-American Foundation (Parts 7300--7399)
      LXIV  Merit Systems Protection Board (Parts 7400--7499)
       LXV  Department of Housing and Urban Development (Parts 
                7500--7599)
      LXVI  National Archives and Records Administration (Parts 
                7600--7699)
     LXVII  Institute of Museum and Library Services (Parts 7700--
                7799)
    LXVIII  Commission on Civil Rights (Parts 7800--7899)
      LXIX  Tennessee Valley Authority (Parts 7900--7999)
       LXX  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 8000--8099)
      LXXI  Consumer Product Safety Commission (Parts 8100--8199)
    LXXIII  Department of Agriculture (Parts 8300--8399)
     LXXIV  Federal Mine Safety and Health Review Commission 
                (Parts 8400--8499)
     LXXVI  Federal Retirement Thrift Investment Board (Parts 
                8600--8699)
    LXXVII  Office of Management and Budget (Parts 8700--8799)
      LXXX  Federal Housing Finance Agency (Parts 9000--9099)
   LXXXIII  Special Inspector General for Afghanistan 
                Reconstruction (Parts 9300--9399)

[[Page 444]]

    LXXXIV  Bureau of Consumer Financial Protection (Parts 9400--
                9499)
    LXXXVI  National Credit Union Administration (Parts 9600--
                9699)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Parts 
                9700--9799)
     XCVII  Council of the Inspectors General on Integrity and 
                Efficiency (Parts 9800--9899)

                      Title 6--Domestic Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 1--99)
         X  Privacy and Civil Liberties Oversight Board (Parts 
                1000--1099)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)

[[Page 445]]

      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)
       XXV  Office of Advocacy and Outreach, Department of 
                Agriculture (Parts 2500--2599)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  National Institute of Food and Agriculture (Parts 
                3400--3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)

[[Page 446]]

        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1300--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Parts 1800--1899)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)
        II  Election Assistance Commission (Parts 9400--9499)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
         X  Bureau of Consumer Financial Protection (Parts 1000--
                1099)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XII  Federal Housing Finance Agency (Parts 1200--1299)
      XIII  Financial Stability Oversight Council (Parts 1300--
                1399)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
       XVI  Office of Financial Research (Parts 1600--1699)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

[[Page 447]]

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--1199)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

[[Page 448]]

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  U.S. Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  U.S. Immigration and Customs Enforcement, Department 
                of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 1000--1099)

[[Page 449]]

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board (Parts 900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
      XIII  Millennium Challenge Corporation (Parts 1300--1399)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)

[[Page 450]]

        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XV  Emergency Mortgage Insurance and Loan Programs, 
                Department of Housing and Urban Development (Parts 
                2700--2799)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
      XXIV  Board of Directors of the HOPE for Homeowners Program 
                (Parts 4000--4099)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)

[[Page 451]]

        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Parts 1200--1299)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--End)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)

[[Page 452]]

      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Bureau of Safety and Environmental Enforcement, 
                Department of the Interior (Parts 200--299)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
         V  Bureau of Ocean Energy Management, Department of the 
                Interior (Parts 500--599)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)
       XII  Office of Natural Resources Revenue, Department of the 
                Interior (Parts 1200--1299)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)
         X  Financial Crimes Enforcement Network, Department of 
                the Treasury (Parts 1000--1099)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)

[[Page 453]]

         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
      XVII  Office of the Director of National Intelligence (Parts 
                1700--1799)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education (Parts 700--799) 
                [Reserved]
            Subtitle C--Regulations Relating to Education
        XI  National Institute for Literacy (Parts 1100--1199)
       XII  National Council on Disability (Parts 1200--1299)

[[Page 454]]

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
        VI  [Reserved]
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Parts 1500--
                1599)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  U.S. Copyright Office, Library of Congress (Parts 
                200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                300--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--199)
        II  Armed Forces Retirement Home (Parts 200--299)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Regulatory Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)

[[Page 455]]

       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle A--Federal Procurement Regulations System 
                [Note]
            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
   62--100  [Reserved]
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
  103--104  [Reserved]
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
  129--200  [Reserved]
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--599)

[[Page 456]]

         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 400--999)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10099)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)

[[Page 457]]

       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)
        IV  National Telecommunications and Information 
                Administration, Department of Commerce, and 
                National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 400--499)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Health and Human Services (Parts 300--399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  Agency for International Development (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)

[[Page 458]]

        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399) 
                [Reserved]
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  Civilian Board of Contract Appeals, General Services 
                Administration (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)

[[Page 459]]

         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation (Parts 1400--1499) 
                [Reserved]
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

[[Page 461]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of July 1, 2014)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Administrative Conference of the United States    1, III
Advisory Council on Historic Preservation         36, VIII
Advocacy and Outreach, Office of                  7, XXV
Afghanistan Reconstruction, Special Inspector     22, LXXXIII
     General for
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development              2, VII; 22, II
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            2, IV; 5, LXXIII
  Advocacy and Outreach, Office of                7, XXV
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Economic Research Service                       7, XXXVII
  Energy Policy and New Uses, Office of           2, IX; 7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  National Institute of Food and Agriculture      7, XXXIV
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII, L
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV, L
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII, L
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII

[[Page 462]]

Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase from People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Bureau of Ocean Energy Management, Regulation,    30, II
     and Enforcement
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chemical Safety and Hazardous Investigation       40, VI
     Board
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       5, LXVIII; 45, VII
Civil Rights, Office for                          34, I
Council of the Inspectors General on Integrity    5, XCVIII
     and Efficiency
Court Services and Offender Supervision Agency    5, LXX
     for the District of Columbia
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               2, XIII; 44, IV; 50, VI
  Census Bureau                                   15, I
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III, IV
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Financial Protection Bureau              5, LXXXIV; 12, X
Consumer Product Safety Commission                5, LXXI; 16, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    2, XXII; 45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    5, LXX; 28, VIII
     for the District of Columbia
Customs and Border Protection                     19, I

[[Page 463]]

Defense Contract Audit Agency                     32, I
Defense Department                                2, XI; 5, XXVI; 32, 
                                                  Subtitle A; 40, VII
  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Acquisition Regulations System          48, 2
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 2, XI; 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          5, LXX; 28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          2, XXXIV; 5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Election Assistance Commission                    2, LVIII; 11, II
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             2, IX; 5, XXIII; 10, II, 
                                                  III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   2, XV; 5, LIV; 40, I, IV, 
                                                  VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                2, Subtitle A; 5, III, 
                                                  LXXVII; 14, VI; 48, 99

[[Page 464]]

  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           2, XXXV; 5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       5, XXXVII; 11, I
Federal Emergency Management Agency               44, I
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Agency                    5, LXXX; 12, XII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority                 5, XIV, XLIX; 22, XIV
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Financial Crimes Enforcement Network              31, X
Financial Research Office                         12, XVI
Financial Stability Oversight Council             12, XIII
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV

[[Page 465]]

Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102
  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          2, III; 5, XLV; 45, 
                                                  Subtitle A,
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  2, XXX; 6, I; 8, I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection                   19, I
  Federal Emergency Management Agency             44, I
  Human Resources Management and Labor Relations  5, XCVII
       Systems
  Immigration and Customs Enforcement Bureau      19, IV
  Transportation Security Administration          49, XII
HOPE for Homeowners Program, Board of Directors   24, XXIV
     of
Housing and Urban Development, Department of      2, XXIV; 5, LXV; 24, 
                                                  Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Customs Enforcement Bureau        19, IV
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V

[[Page 466]]

Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII, XV
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department                               2, XIV
  American Indians, Office of the Special         25, VII
       Trustee
  Bureau of Ocean Energy Management, Regulation,  30, II
       and Enforcement
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Natural Resource Revenue, Office of             30, XII
  Ocean Energy Management, Bureau of              30, V
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            2, XIV; 43, Subtitle A
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
Investment Security, Office of                    31, VIII
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                2, XXVIII; 5, XXVIII; 28, 
                                                  I, XI; 40, IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI

[[Page 467]]

  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Office of Workers' Compensation Programs        20, VII
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Royalty Board                         37, III
  U.S. Copyright Office                           37, II
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II, LXIV
Micronesian Status Negotiations, Office for       32, XXVII
Millennium Challenge Corporation                  22, XIII
Mine Safety and Health Administration             30, I
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
Museum and Library Services, Institute of         2, XXXI
National Aeronautics and Space Administration     2, XVIII; 5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   2, XXII; 45, XII, XXV
National Archives and Records Administration      2, XXVI; 5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              5, LXXXVI; 12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Endowment for the Arts                   2, XXXII
National Endowment for the Humanities             2, XXXIII
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 47, VI; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Food and Agriculture        7, XXXIV
National Institute of Standards and Technology    15, II
National Intelligence, Office of Director of      32, XVII
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII

[[Page 468]]

National Science Foundation                       2, XXV; 5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III, IV
     Administration
National Transportation Safety Board              49, VIII
Natural Resources Conservation Service            7, VI
Natural Resource Revenue, Office of               30, XII
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     2, XX; 5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Ocean Energy Management, Bureau of                30, V
Offices of Independent Counsel                    28, VI
Office of Workers' Compensation Programs          20, VII
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       2, XXXVII; 22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Human Resources Management and Labor Relations  5, XCVII
       Systems, Department of Homeland Security
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Regulatory Commission                      5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Privacy and Civil Liberties Oversight Board       6, X
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Recovery Accountability and Transparency Board    4, II
Refugee Resettlement, Office of                   45, IV
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII, L
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV, L
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII, L
Saint Lawrence Seaway Development Corporation     33, IV

[[Page 469]]

Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                5, XXXIV; 17, II
Selective Service System                          32, XVI
Small Business Administration                     2, XXVII; 13, I
Smithsonian Institution                           36, V
Social Security Administration                    2, XXIII; 20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  2, VI; 22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     2, XII; 5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 47, IV; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection                   19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Claims Collection Standards             31, IX
  Federal Law Enforcement Training Center         31, VII
  Financial Crimes Enforcement Network            31, X
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  Investment Security, Office of                  31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
U.S. Copyright Office                             37, II

[[Page 470]]

Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       2, VIII; 38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 471]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations (CFR) that 
were made by documents published in the Federal Register since January 
1, 2009 are enumerated in the following list. Entries indicate the 
nature of the changes effected. Page numbers refer to Federal Register 
pages. The user should consult the entries for chapters, parts and 
subparts as well as sections for revisions.
For changes to this volume of the CFR prior to this listing, consult the 
annual edition of the monthly List of CFR Sections Affected (LSA). The 
LSA is available at www.fdsys.gov. For changes to this volume of the CFR 
prior to 2001, see the ``List of CFR Sections Affected, 1949-1963, 1964-
1972, 1973-1985, and 1986-2000'' published in 11 separate volumes. The 
``List of CFR Sections Affected 1986-2000'' is available at 
www.fdsys.gov.

                                  2009

31 CFR
                                                                   74 FR
                                                                    Page
Subtitle A
30 Revised; interim................................................28405
    Technical correction...........................................63990
30.1 Correctly amended; interim....................................63992
30.2 Correctly amended; interim....................................63992
30.13 Correctly revised; interim...................................63992
30.15 (a)(5) and Appendices A and B correctly amended; interim.....63992
31 Added; interim...................................................3433
32 Added; interim..................................................44752
50 Regulation at 73 FR 53363 confirmed.............................18138
    Authority citation revised.....................................66057
50.1 Regulation at 73 FR 53363 confirmed...........................18138
50.5 Regulation at 73 FR 53363 confirmed...........................18138
    (d) through (r) redesignated as (f), (k), (l), (m), (o) 
through (w), (z) and (bb); new (d), (e), (g) through (j), (n), 
(x), (y) and (aa) added; new (f) revised...........................66057
50.7 Regulation at 73 FR 53364 confirmed...........................18138
50.11 Regulation at 73 FR 53364 confirmed..........................18138
50.12 Regulation at 73 FR 53364 confirmed..........................18138
50.15 Regulation at 73 FR 53364 confirmed..........................18138
50.17 Regulation at 73 FR 53364 confirmed..........................18138
50.18 Regulation at 73 FR 53364 confirmed..........................18138
50.20 Regulation at 73 FR 53364 confirmed..........................18138
50.21 Regulation at 73 FR 53364 confirmed..........................18138
50.50 Regulation at 73 FR 53365 confirmed..........................18138
50.53 Regulation at 73 FR 53365 confirmed..........................18138
50.60 Revised......................................................66058
50.61 Revised......................................................66058
50.70--50.76 (Subpart H) Added.....................................66059
Chapter I
103.85 Revised.....................................................59098
103 Appendix A removed.............................................59098
132 Regulation at 73 FR 69405 compliance date extended to 6-1-10 
                                                                   62687

                                  2010

31 CFR
                                                                   75 FR
                                                                    Page
Subtitle A
1.1 (a) revised......................................................743
1.1--1.7 (Subpart A) Appendix A amended..............................744

[[Page 472]]

1.20 Heading, introductory text and (a) through (j) revised..........744
    (j) correctly revised; (k), (l) and (m) correctly removed; 
concluding text correctly amended..................................36535
    Regulation at 73 FR 51221 confirmed............................64147
1.36 (g)(1)(viii) amended.....................................745, 65230
    (c)(1)(i) table and (g)(1)(i) table amended....................36536
    (g)(1)(i) table amended........................................61994
    Regulation at 73 FR 51221 confirmed............................64147
1.20--1.36 (Subpart C) Appendix A amended............................745
Chapter I
103 Removed........................................................65812
    Policy statement...............................................75607
103.11 (n)(9) revised; (n)(10) and (ccc) added.....................19245
103.15 (c) amended; (d), (e) and (f) revised.......................75602
103.16 (e) amended; (g), (h) and (i) redesignated as (h), (i) and 
        (j); new (g) added; (f) and new (h) revised................75603
103.17 (d) amended; (e), (f) and (g) revised.......................75603
103.18 (d) amended; (e) and (f) revised; (g) added.................75604
103.19 (d) amended; (e), (f) and (g) revised.......................75605
103.20 (c) amended; (e) and (f) redesignated as (f) and (g); new 
        (e) added; (d) and new (f) revised.........................75605
103.21 (d) amended; (f) and (g) redesignated as (g) and (h); new 
        (f) added; (e) and new (g) revised.........................75606
103.33 (e)(6)(i)(I) and (f)(6)(i)(I) revised; (e)(6)(i)(J) and 
        (f)(6)(i)(J) added.........................................19245
    Regulation at 75 FR 19245 compliance date extended to 4-10-11 
                                                                   63382
103.56 (b)(8) revised..............................................19245
103.90 (a) revised..................................................6569
103.100 (b)(2), (3) and (4) redesignated as (b)(3), (4) and (5); 
        (a)(4) and new (b)(2) added; (b)(1), new (3)(i) 
        introductory text, new (iv)(B)(1), new (2), new (C), new 
        (4) and new (5) revised.....................................6569
103.130 (a) revised................................................19245

                                  2011

31 CFR
                                                                   76 FR
                                                                    Page
Subtitle A
1.26 (g)(6)(ii)(A) amended..........................................4817
1.36 (e) and (f) revised............................................4817
    (c)(1)(viii) table, (g)(1)(viii) table and (m)(1)(viii) table 
amended............................................................70644
    (g)(1)(i) table amended........................................44802
1.20--1.36 (Subpart C) Appendix E revised..........................62298
10 Authority citation revised; eff. 8-2-11.........................32300
10.0 Revised; eff. 8-2-11..........................................32300
10.1 Revised; eff. 8-2-11..........................................32300
10.2 (a)(4), (5) and (b) revised; (a)(8) added; eff. 8-2-11........32300
10.3 (f) through (i) redesignated as (g) through (j); new (f) 
        added; (d)(3), (e)(3) and new (j) revised; eff. 8-2-11.....32300
10.4 Revised; eff. 8-2-11..........................................32301
10.5 Revised; eff. 8-2-11..........................................32302
    (g) correctly revised..........................................49650
10.6 Revised; eff. 8-2-11..........................................32302
10.7 (c)(1)(viii) and (e) removed; (f) and (g) redesignated as new 
        (e) and (f); heading, (c)(2), (d) and new (e) and (f) 
        revised; eff. 8-2-11.......................................32305
10.8 Revised; eff. 8-2-11..........................................32306
10.9 Added; eff. 8-2-11............................................32306
10.20 (b) and (c) redesignated as (a)(3) and (b) and revised; new 
        (c) added; eff. 8-2-11.....................................32307
10.25 (c)(2) and (e) revised; eff. 8-2-11..........................32307
10.30 (a)(1) and (e) revised; eff. 8-2-11..........................32307
10.34 (a) added; (f) redesignated as (e) and revised; eff. 8-2-11 
                                                                   32307
10.36 (b) redesignated as (c) and revised; new (b) added; eff. 8-
        2-11.......................................................32308
10.38 Revised; eff. 8-2-11.........................................32308
10.50 (d) and (e) redesignated as (e) and (f); new (d) added; 
        (b)(1) and new (f) revised; eff. 8-2-11....................32308
10.51 (a)(16), (17) and (18) added; (b) revised; eff. 8-2-11.......32308
10.53 Revised; eff. 8-2-11.........................................32308
10.60 (a), (b) and (d) revised; eff. 8-2-11........................32309
    (a) and (b) correctly revised..................................49650
10.61 (a), (b)(2) and (c) revised; eff. 8-2-11.....................32309
10.62 Revised; eff. 8-2-11.........................................32309

[[Page 473]]

10.63 (c) and (f) revised; eff. 8-2-11.............................32309
10.64 (a) revised; (f) added; eff. 8-2-11..........................32309
10.65 (a) and (c) revised; eff. 8-2-11.............................32309
10.66 Revised; eff. 8-2-11.........................................32309
10.69 Revised; eff. 8-2-11.........................................32310
    (a) correctly revised..........................................49650
10.72 (a)(3)(iv)(A), (d)(1) and (g) revised; eff. 8-2-11...........32310
10.76 (c) and (e) revised; eff. 8-2-11.............................32310
10.77 Revised; eff. 8-2-11.........................................32310
10.78 (c) and (d) revised; eff. 8-2-11.............................32310
10.79 Revised; eff. 8-2-11.........................................32310
10.80 Revised; eff. 8-2-11.........................................32311
10.81 Revised; eff. 8-2-11.........................................32311
10.82 (a), (c) introductory text, (3) and (d) through (h) revised; 
        eff. 8-2-11................................................32311
10.90 Second (b) redesignated as (c); (a) and new (c) revised; 
        eff. 8-2-11................................................32311
(a)(6)(1) correctly revised........................................49650
31 Revised.........................................................61049

                                  2012

31 CFR
                                                                   77 FR
                                                                    Page
Subtitle A
1.36 (c)(1)(ii) table correctly amended............................59548
1.36 (g)(1)(i) through (xiii) redesignated as (g)(1)(ii) through 
        (xiv); new (g)(1)(i) added..................................1633
    (g)(1)(viii) table corrected....................................9847
    Revised........................................................28479
29 Authority citation revised......................................64225
29.301--29.353 (Subpart C) Revised.................................64225
33 Added...........................................................11715
Chapter I
149 Added; eff. 7-23-12............................................37558
150 Added; eff. 7-20-12............................................29893

                                  2013

                       (No regulations published)

                                  2014

   (Regulations published from January 1, 2014, through July 1, 2014)

31 CFR
                                                                   79 FR
                                                                    Page
Subtitle A
1.36 (c)(1)(vii) table amended.....................................12944
10.1 (a)(1) and (d) revised........................................33692
10.3 (a), (b), (g) and (j) revised.................................33693
10.22 (b) and (c) revised..........................................33693
10.31 Revised......................................................33693
10.35 Revised......................................................33693
10.36 Revised......................................................33693
10.37 Revised......................................................33693
10.81 Revised......................................................33694
10.82 (a), (b) introductory text and (c) through (h) revised; 
        (b)(5) added...............................................33694
10.91 Revised......................................................33695
Chapter I
100.5--100.9 (Subpart B) Revised; interim..........................30725


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