[Federal Register Volume 59, Number 128 (Wednesday, July 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15845]


[[Page Unknown]]

[Federal Register: July 6, 1994]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Secretary

24 CFR Part 17

[Docket No. R-94-1738; FR-3595-F-01]
RIN 2501-AB70

 

Administrative Claims

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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SUMMARY: This rule brings up to date the Department's existing 
regulations relating to administrative claims to reflect current 
statutory authority for federal agencies to compromise, terminate or 
suspend collection activities on claims of the Government up to 
$100,000 without prior approval from the Department of Justice. The 
existing regulation limits such collection activities to debts up to 
$20,000. The rule also makes two other technical amendments--one 
relating to the assessment of interest on claims due to the Department 
and one relating to the distribution of certain final decisions on 
indebtedness made by HUD Deputy Assistant Secretaries.

EFFECTIVE DATE: August 5, 1994.

FOR FURTHER INFORMATION CONTACT: Albert M. Miller, Departmental Claims 
Officer, room 2206, Department of Housing and Urban Development, 451 
Seventh Street, SW., Washington, DC 20410, voice (202) 708-3310, TDD 
(202) 708-9300. (These are not toll-free numbers.)

SUPPLEMENTARY INFORMATION: Section 3711(a) of title 31, United States 
Code authorizes the head of an executive or legislative agency to 
compromise (or to suspend or end collection action) on a claim of the 
Government of not more than $100,000 (excluding interest) or such 
higher amount as the Attorney General may from time to time prescribe 
provided that the claim has not been referred to another executive or 
legislative agency for further collection action. Prior to amendment of 
this section by the Administrative Dispute Resolution Act (Pub. L. 101-
552, 104 Stat. 2736, Approved November 15, 1990) this authority of 
agencies to compromise, or to suspend or end collection actions on 
government claims was limited to claims of $20,000 or less.
    Existing HUD regulations (24 CFR Part 17 (Administrative Claims) 
contain a number of provisions setting forth the now out of date dollar 
threshold of $20,000 rather than the $100,000 threshold which the 
statute (31 U.S.C. 3711(a)) currently authorizes. This rule updates HUD 
regulations (Subpart C of 24 CFR Part 17--Procedures for the Collection 
of Claims by the Government) to reflect the new $100,000 statutory 
threshold.
    Current regulations--17 CFR 17.72(e)--provide for assessment of 
interest on claims due the Department at 7 percent. This rule revises 
this provision to provide for the assessment of interest at the 
Treasury rate in effect when the demand for payment is made, as 
provided in the Federal Claims Collection Act of 1966, as amended by 
the Debt Collection Act of 1982, and in the joint regulations of the 
Attorney General and Comptroller General at 4 CFR Parts 101-105 (joint 
regulations).
    The rule also revises section 17.72(e) which currently reads:

    When a debt is paid in installments and interest is collected, 
installment payments will first be applied to the payment of accrued 
interest and then to principal in accordance with the so-called 
``U.S. Rule'' unless a different rule is prescribed by statute, 
contract or regulation.

    The Debt Collection Act of 1982 specifically provides for the 
assessment of interest and, in 1984, the joint regulations were amended 
to reflect the provisions of that Act. Reference to the ``U.S. Rule'' 
was properly deleted from the amended joint regulations and a reference 
to 31 U.S.C. 3717, the statutory provision authorizing agencies to 
assess interest on debts, was substituted. In this rule, as was done in 
the amended joint regulations, the obsolete reference to the so called 
``U.S. Rule'' is deleted.
    Finally, in 24 CFR 17.110, a section relating to final decisions on 
amounts of indebtedness made by HUD Deputy Assistant Secretaries or 
their designees, paragraph (b) providing that copies of the final 
decisions will be distributed to the General Counsel, the Office of 
Finance and Accounting, and the debtors (or their attorneys or 
representatives if applicable) is revised so that it only provides for 
copies to debtors (or their attorneys or representatives, if 
applicable). The change reflects HUD policy that any provisions 
relating to distribution of documents within the Department should not 
be included in a regulation designed to inform the public of its rights 
and obligations. Such provisions are more appropriate in a handbook or 
other internal HUD directive.
    Due to the strictly technical nature of this rule, and the fact 
that the statutory provisions involved are, at any rate, self 
enforcing, the Department has determined that notice and public comment 
procedure under Title 5 of the United States Code is unnecessary and is 
therefore issuing this document as a final rule.

Procedural Matters

Regulatory Flexibility

    In accordance with 5 U.S.C. 605(b) (the Regulatory Flexibility 
Act), the Secretary has reviewed this rule before publication and by 
approving it certifies that this rule does not have a significant 
economic impact on a substantial number of small entities. This rule is 
technical in nature. It effects no substantive changes in HUD programs 
or policies.

Semiannual Agenda

    This rule was listed as item number 1532 in the Department's 
Semiannual Agenda of Regulations published on April 25, 1994 (59 FR 
20424, 20435) under Executive Order 12866 and the Regulatory 
Flexibility Act.

Executive Order 12612, Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that the policies 
contained in this rule do not have Federalism implications and, thus, 
are not subject to review under the Order. No programmatic or policy 
changes result from this rule's promulgation which would affect 
existing relationships between the Federal Government and State and 
local governments.

Executive Order 12606, The Family

    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that this rule does not have 
potential for significant impact on family formation, maintenance, and 
general well-being, and, thus, is not subject to review under the 
Order. The rule is technical in nature and makes no significant change 
in existing HUD policies or programs.

Environment

    An environmental assessment is unnecessary, since internal 
administrative procedures whose content does not constitute a 
development decision affecting the physical condition of specific 
project areas or building sites are categorically excluded from the 
Department's National Environmental Policy Act procedures under 24 CFR 
50.20(k).

List of Subjects in 24 CFR Part 17

    Administration practice and procedure, Claims, Government 
employees, Income taxes, Wages.

    Accordingly, 24 CFR part 17 is amended to read as follows:

PART 17--ADMINISTRATIVE CLAIMS

    1. The authority citation for 24 CFR part 17 is revised to read as 
follows:

    Authority: 28 U.S.C. 2672; 42 U.S.C. 3535(d), unless otherwise 
noted.

    2. Paragraph (a) of Sec. 17.60 is revised to read as follows:


Sec. 17.60  Scope and definitions.

    (a) Scope. This subpart sets forth the regulations of the Secretary 
of Housing and Urban Development implementing the Federal Claims 
Collection Act of 1966, as amended by the Federal Debt Collection Act 
of 1982 (31 U.S.C. 3701 et seq.) (the Act), in conformity with the 
standards jointly promulgated by the Attorney General and the 
Comptroller General in 4 CFR parts 101 through 105. The Act:
    (1) Requires the Secretary or his designee to attempt collection of 
all claims of the United States for money or property arising out of 
the activities of the Department; and
    (2) Authorizes the Secretary or his designee to compromise claims 
that have not been referred to another executive or legislative agency 
for further collection action where the claim does not exceed $100,000 
exclusive of interest, or to suspend or terminate collection action 
where it appears that no person liable on the claim has the present or 
prospective financial ability to pay any significant sum thereon or 
that the cost of collecting the claim is likely to exceed the amount of 
recovery.
* * * * *
    3. Section 17.62 is revised to read as follows:


Sec. 17.62  Subdivision and joining of claims.

    (a) A debtor's liability arising from a particular transaction or 
contract shall be considered as a single claim in determining whether 
the claim is one not exceeding $100,000 exclusive of interest for the 
purpose of compromise or termination of collection action. Such a claim 
may not be subdivided to avoid the monetary ceiling established by the 
Act.
    (b) Joining of two or more single claims in a demand upon a 
particular debtor for payment totaling more than $100,000 does not 
preclude compromise or termination of collection action with respect to 
any one of such claims that does not exceed $100,000 exclusive of 
interest.
    4. Paragraph (a) of Sec. 17.64 is revised to read as follows:


Sec. 17.64  Referral of claims to the Assistant Secretary for 
Administration.

    (a) Authority of the Assistant Secretary for Administration. The 
Assistant Secretary for Administration shall exercise the powers and 
perform the duties of the Secretary to compromise, or to suspend or 
terminate collection action on all Department claims not exceeding 
$100,000 exclusive of interest, except as provided in Sec. 17.65 and 
paragraph (b) of this section. When initial attempts at collection by 
the office having responsibility for such claims have not been fully 
successful, the claim file shall be forwarded to the Assistant 
Secretary for Administration for further administrative collection 
procedures. Claims shall be referred to the Assistant Secretary for 
Administration well within the applicable statute of limitations (28 
U.S.C. 2415 and 2416), but in no event more than 2 years after the 
claims accrued.
* * * * *
    5. Paragraph (b) of Sec. 17.65 is revised to read as follows:


Sec. 17.65  Authority of offices to compromise claims or suspend or 
terminate collection action.

* * * * *
    (b) Claims arising under certain programs. (1) The office primarily 
responsible for the following programs of the Department is authorized, 
in those cases where initial collection attempts are not wholly 
successful, to compromise or to suspend or terminate collection action 
on claims not exceeding $100,000 with respect to:
    (i) A claim under title I of the National Housing Act;
    (ii) A claim on a rehabilitation loan account under section 312 of 
the Housing Act of 1964;
    (iii) A claim against tenants or former tenants of properties 
acquired by, or under the custody of, the Secretary or held by him as 
mortgagee in possession; or
    (iv) A claim arising out of the operational (nonadministrative) 
activities of the Government National Mortgage Association (GNMA).
    (2) However, no office shall undertake to compromise or terminate 
any collection action excluded under Sec. 17.64(b).
    6. Paragraph (e) of Sec. 17.72 is revised to read as follows:


Sec. 17.72  Methods of collection and imposition of late charges.

* * * * *
    (e) Interest. Where prejudgment interest is not mandated by 
statute, contract or regulation, the minimum rate of interest to be 
charged on delinquent debts is the Tax and Loan Account Rate for the 
U.S. Treasury (also known as the Current Value of Funds rate) as 
prescribed and published semiannually by the Secretary of the Treasury 
in the Federal Register, in accordance with 31 U.S.C. 3717. Prejudgment 
interest may be waived as an inducement to voluntary payment. In such 
cases demand letters should inform the debtor that prejudgment interest 
will be collected if suit becomes necessary. When a debt is paid in 
installments and interest is collected, installment payments will first 
be applied to the payment of accrued interest and then to principal 
unless a different rule is prescribed by statute, contract or 
regulation. Prejudgment interest shall not be demanded or collected on 
civil penalty and forfeiture claim unless the statute under which the 
claim arises authorizes the collection of such interest.
* * * * *
    7. Paragraph (b) of Sec. 17.110 is revised to read as follow:


Sec. 17.110  Determination of indebtedness and appeal from 
determination.

* * * * *
    (b) Copies of the DAS decision will be distributed to the debtor 
and the debtor's attorney or other representative, if applicable.

    Dated: June 22, 1994.
Henry G. Cisneros,
Secretary.
[FR Doc. 94-15845 Filed 7-5-94; 8:45 am]
BILLING CODE 4210-32-P