[Federal Register Volume 67, Number 220 (Thursday, November 14, 2002)]
[Proposed Rules]
[Pages 68965-68971]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-28735]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 284

RIN 0790-AG91


Waiver Procedures for Debts Resulting From Erroneous Payments of 
Pay and Allowances

AGENCY: Defense Office of Hearings and Appeals, Office of the General 
Counsel of the Department of Defense.

ACTION: Proposed rule.

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SUMMARY: This rule proposes policy and prescribes procedures for 
considering waiver applications. The Legislative Branch Appropriations 
Act of 1996 transferred to the Director of the Office of Management and 
Budget (OMB) the Comptroller General's authority to settle claims. The 
OMB Director subsequently delegated some of these authorities to the 
Department of Defense. Later, the General Accounting Office Act of 1996 
codified many of these delegations to the Secretary of Defense and 
others and transferred to the OMB Director the authority of the 
Comptroller General to waive uniformed service member and employee 
debts arising out of the erroneous payment of pay or allowances 
exceeding $1,500. The OMB Director subsequently delegated the authority 
to waive such debts of uniformed service members and DoD employees to 
the Secretary of Defense. The Secretary of Defense further delegated 
his claims settlement and waiver authorities to the General Counsel. 
This rule implements the reassignment of the Comptroller General's 
former duties within the Department of Defense with little impact on 
the public.

DATES: Consideration will be given to all comments received on or 
before January 13, 2003.

ADDRESSES: Send comments to the Defense Office of Hearings and Appeals, 
ATTN: Claims Division, P.O. Box 3656, Arlington, VA 22203-1995.

FOR FURTHER INFORMATION CONTACT: Michael Hipple, 703-696-8510.

SUPPLEMENTARY INFORMATION:

Executive Order 12866, ``Regulatory Planning and Review''

    The Director of the Defense Office of Hearings and Appeals has 
determined that this rule is not a significant rule because it does 
not: (1) Have an annual effect on the economy of $100 million or more 
or adversely affect in a material way the economy; a sector of the 
economy; productivity; competition; jobs; the environment; public 
health or safety; or State, local, or tribal governments or 
communities; (2) create a serious inconsistency or otherwise interfere 
with an action taken or planned by another Agency; (3) materially alter 
the budgetary impact on entitlement, grants, user fees, or loan 
programs, or the rights and obligations of recipients thereof; or (4) 
raise novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in this Executive 
Order.

Public Law 96-354, ``Regulatory Flexibility Act''

    The Director of the Defense Office of Hearings and Appeals has 
certified that this rule does not have a significant economic impact on 
a substantial number of small entities because this rule affects 
members of the Uniformed Services and Federal employees and provides 
procedures by which their claims against the United States will be 
adjudicated.

Public Law 96-511, ``Paperwork Reduction Act''

    The Director of the Defense Office of Hearings and Appeals has 
certified that this rule does not impose information collection 
requirements.

Section 202, Public Law 104-4, ``Unfunded Mandates Reform Act''

    The Director of the Defense Office of Hearings and Appeals has 
certified that this rule does not involve a Federal Mandate that may 
result in the expenditure by State, local and tribal governments, in 
the aggregate, or by the private sector, of $100 million or more and 
that such rulemaking will not significantly or uniquely affect small 
governments.

Executive Order 13132, ``Federalism''

    The Director of the Defense Office of Hearings and Appeals has 
certified that this rule does not have federalism implications. This 
rule does not have substantial direct affects on the States, on the 
relationship between the National Government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.

List of Subjects in 32 CFR Part 284

    Administrative practice and procedure, Armed Forces, Wages.

    Accordingly, 32 CFR part 284 is proposed to be added to subchapter 
M to read as follows:

PART 284--WAIVER PROCEDURES FOR DEBTS RESULTING FROM ERRONEOUS 
PAYMENTS OF PAY AND ALLOWANCES

Sec.
284.1 Purpose.
284.2 Applicability and scope.
284.3 Definitions.
284.4 Policy.
284.5 Responsibilities and functions.
284.6 Standards for waiver determinations.
284.7 Submitting a waiver application.
284.8 Processing a waiver application when the debt is $1500 or 
less.
284.9 Processing a waiver application when the debt is more than 
$1500.
284.10 Appeals.
284.11 Refund of repaid debts that are subsequently waived.
284.12 Publication.
Appendix A to Part 284--Standards for Waiver Determinations.
Appendix B to Part 284--Submitting a Waiver Application.
Appendix C to Part 284--Processing a Waiver Application When the 
Debt is $1500 or less.
Appendix D to Part 284--Processing a Waiver Application When the 
Debt is More Than $1500.
Appendix E to Part 284--Appeals.

    Authority: 5 U.S.C. 552a; 2104, 2105, 5584; 10 U.S.C. 2774; 32 
U.S.C. 716


Sec.  284.1  Purpose.

    This part implements policy under 32 CFR part 283 and prescribes 
procedures for considering waiver applications under 10 U.S.C. 2774, 32 
U.S.C. 716, and 5 U.S.C. 5584.


Sec.  284.2  Applicability and scope.

    This part applies to:
    (a) The Office of the Secretary of Defense, the Military 
Departments, the Chairman of the Joint Chiefs of Staff, the Combatant 
Commands, the Office of the Inspector General of the Department of 
Defense, the Defense Agencies, the Department of Defense Field 
Activities, and all other organizational entities within the Department 
of Defense (hereafter referred to collectively as ``the DoD 
Components'').

[[Page 68966]]

    (b) The Coast Guard, when it is not operating as a Service in the 
Navy, and the Commissioned Corps of the Public Health Service (PHS) and 
the National Oceanic and Atmospheric Administration (NOAA), to the 
extent of the authority provided by law or delegated by the Director, 
Office of Management and Budget (hereafter referred to collectively as 
``the non-DoD Components'').
    (c) This part applies to waiver applications relating to debts 
resulting from erroneous payments of pay and allowances (including 
travel and transportation allowances) to or on behalf of members of the 
Uniformed Services and civilian DoD employees under 10 U.S.C. 2774, 32 
U.S.C. 716, and 5 U.S.C. 5584.


Sec.  284.3  Definitions.

    (a) Committee. The person or persons invested, by order of a proper 
court, with the guardianship of a minor or incompetent person and/or 
the estate of a minor or incompetent person.
    (b) Component concerned. The Component that notifies the individual 
of the debt that is the subject of a waiver application.
    (c) Debt. An amount an individual owes the Government as the result 
of erroneous payments of pay and allowances (including travel and 
transportation allowances) to or on behalf of members of the Uniformed 
Service or civilian DoD employees.
    (d) Employee. A person who is or was an officer or employee as 
defined in 5 U.S.C. 2104 and 2105.
    (e) Erroneous payment. A payment that is not in strict conformity 
with applicable laws or regulations.
    (f) Final action. A finding by the appropriate official under this 
Instruction concerning a waiver application from which there is no 
right to appeal or request reconsideration, or concerning which the 
time limit prescribed in this Instruction for submitting an appeal or 
request for reconsideration has expired without such a submission.
    (g) Member. A member or former member of a Uniformed Service.
    (h) Uniformed Services. The Army, the Navy, the Air Force, the 
Marine Corps, the Coast Guard, and the Commissioned Corps of the PHS 
and the NOAA.
    (i) Waiver application. A request that the United States relinquish 
its claim against an individual for a debt resulting from erroneous 
payments of pay or allowances (including travel and transportation 
allowances) under 10 U.S.C. 2774, 32 U.S.C. 716, or 5 U.S.C. 5584.


Sec.  284.4  Policy.

    It is Department of Defense policy that waiver applications shall 
be processed in accordance with all pertinent statutes and regulations, 
and after consideration of other relevant authorities.


Sec.  284.5  Responsibilities and functions.

    (a) The Head of a Non-DoD Component, or designee, concerning debts 
resulting from the Component's activity:
    (1) May deny or grant all or part of a waiver application, if the 
aggregate amount of the debt is $1,500 or less.
    (2) If the aggregate amount of the debt is more than $1,500, may:
    (i) Deny a waiver application in its entirety, or
    (ii) Refer a waiver application for consideration with a 
recommendation that part or all of the application be granted, in 
accordance with this part.
    (3) Shall process waiver applications, when the aggregate amount of 
the debt is more than $1,500, and appeals in accordance with this part.
    (4) Shall resolve a debt in accordance with the final action that 
results from the waiver application process provided for in this part.
    (b) The Director, Department of Defense Dependents Schools, or 
designee, concerning debts of civilian employees resulting from that 
Component's activity; the Director, National Security Agency, or 
designee, concerning debts resulting from that Component's activity; 
and the Under Secretary of Defense (Comptroller), through the Defense 
Finance and Accounting Service, or other designee, concerning debts 
resulting from all other DoD Components' activities:
    (1) May deny or grant all or part of a waiver application, if the 
aggregate amount of the debt is $1,500 or less.
    (2) If the aggregate amount of the debt is more than $1,500, may:
    (i) Deny a waiver application in its entirety, or
    (ii) Refer a waiver application for consideration with a 
recommendation that part or all of the application be granted, in 
accordance with this part.
    (3) Shall process waiver applications and appeals in accordance 
with this part.
    (4) Shall resolve debts in accordance with the final action that 
results from the waiver application process provided for in this part.
    (c) The Director, Defense Office of Hearings and Appeals (DOHA), or 
designee, under the General Counsel of the Department of Defense (as 
the Director, Defense Legal Services Agency):
    (1) May deny or grant all or part of a waiver application, if the 
aggregate amount of the debt is more than $1,500.
    (2) Shall consider an appeal of an initial determination and 
affirm, modify, reverse, or remand the initial determination, in 
accordance with this part and relevant DoD Office of General Counsel 
opinions.
    (3) Shall process waiver applications and appeals in accordance 
with this part.
    (d) The General Counsel of the Department of Defense, or designee, 
upon the request of the Director, DOHA, shall consult on, or render 
opinions concerning, questions of law or equity that arise in the 
course of the performance of the Director's responsibilities under 
paragraph (c) of this section.
    (e) The Head of a DoD Component, or designee, shall process waiver 
applications in accordance with this part.


Sec.  284.6  Standards for waiver determinations.

    The standards that must be applied in determining whether all or 
part of a waiver application should be granted or denied are at 
Appendix A to this part.


Sec.  284.7  Submitting a waiver application.

    The procedures an applicant must follow to submit a waiver 
application are at Appendix B to this part.


Sec.  284.8  Processing a waiver application when the debt is $1500 or 
less.

    The procedures a Component must follow in processing a waiver 
application when the debt is $1500 or less are at Appendix C to this 
part.


Sec.  284.9  Processing a waiver application when the debt is more than 
$1500.

    The procedures a Component must follow in processing a waiver 
application when the debt is $1500 or more are at Appendix D to this 
part.


Sec.  284.10  Appeals.

    The procedures for appealing initial determinations are at Appendix 
E to this part.


Sec.  284.11  Refund of repaid debts that are subsequently waived.

    When a final action waives all or part of a debt that has been 
repaid, the waiver application shall be construed as an application for 
a refund and the Component concerned shall, to the extent of the 
waiver, refund the amount repaid.


Sec.  284.12  Publication.

    In accordance with 5 U.S.C. 552a, the Director, DOHA, or designee, 
shall make

[[Page 68967]]

redacted copies of responses to requests for reconsideration available 
for public inspection and copying at DOHA's public reading room and on 
the worldwide web.

Appendix A to Part 284--Standards for Waiver Determinations

    (a) Generally, persons who receive a payment erroneously from 
the government acquire no right to the money. They are bound in 
equity and good conscience to make restitution. In other words, if a 
benefit is bestowed by mistake, no matter how careless the act of 
the government may have been, the recipient must make restitution. 
In theory, restitution results in no loss to the recipient because 
the recipient had merely received something for nothing. However, 10 
U.S.C. 2774, 32 U.S.C. 716, and 5 U.S.C. 5584 provide authority to 
waive, under certain conditions, debts individuals owe the 
Government that are the result of erroneous payments of pay and 
allowances (including travel and transportation allowances). Waiver 
is not a matter of right, but is available to provide relief as a 
matter of equity, if the circumstances warrant.
    (b) Debts may be waived only when collection would be against 
equity and good conscience and would not be in the best interests of 
the United States. There must be no indication that the erroneous 
payment was solely or partially the result of the fraud, 
misrepresentation, fault, or lack of good faith of the applicant.
    (c) Administrative error or mistake on the part of the 
Government in making an erroneous payment is a factor for 
consideration in determining whether waiver is appropriate. However, 
the fact that an erroneous payment is solely the result of 
administrative error or mistake on the part of the Government is 
not, in and of itself, sufficient basis for granting a waiver.
    (d) Waiver usually is not appropriate when a recipient knows, or 
reasonably should know, that a payment is erroneous. The recipient 
has a duty to notify an appropriate official and to set aside the 
funds for eventual repayment to the Government, even if the 
Government fails to act after such notification.
    (e) Waiver generally is not appropriate when a recipient of a 
significant unexplained increase in pay or allowances, or of any 
other unexplained payment of pay or allowances, does not attempt to 
obtain a reasonable explanation from an appropriate official. The 
recipient has a duty to ascertain the reason for the payment and to 
set aside the funds in the event that repayment should be necessary.
    (f) Waiver may be inappropriate in cases where a recipient 
questions a payment (which ultimately is determined to be erroneous) 
and is mistakenly advised by an appropriate official that the 
payment is proper, if under the circumstances the recipient knew or 
reasonably should have known that the advice was erroneous.
    (g) The fact that collection of an erroneous payment from a 
recipient might result in financial hardship is not a factor for 
consideration in determining whether waiver is appropriate.
    (h) Waiver determinations under these standards necessarily 
depend upon the facts in each case.

Appendix B to Part 284--Submitting a Waiver Application

    (a) Who May Apply For Waiver. Any person (``applicant'') from 
whom collection is sought for a debt resulting from erroneous 
payments of pay or allowances (including travel and transportation 
allowances) may submit a waiver application. Additionally, an 
authorized official of the component concerned, or the Director, 
DOHA, or designee, may initiate a waiver application during the 
processing of a claim under 32 CFR part 281.
    (b) Where to Submit a Waiver Application. An applicant must 
submit a waiver application to the Component concerned (that is, to 
the Component that notified the applicant of the indebtedness) in 
accordance with the guidance provided by that Component. A waiver 
application that is submitted somewhere other than to the Component 
concerned does not stop the running of the time limit in paragraph 
(f) of this Appendix. It is the applicant's responsibility to submit 
the waiver application properly.
    (c) Format of a Waiver Application. A waiver application must be 
written and signed by the applicant (in the case of an application 
on behalf of a minor or incompetent person, there are additional 
requirements explained at paragraph (e) of this Appendix) or by the 
applicant's authorized agent or attorney (there are additional 
requirements explained at paragraph (d) of this Appendix) and 
should:
    (1) Provide the applicant's mailing address;
    (2) Provide the applicant's telephone number;
    (3) Provide the applicant's social security number;
    (4) State the amount for which waiver is requested;
    (5) Explain why under the facts and circumstances waiver should 
be granted under the standards explained at Appendix A to this part;
    (6) Have attached copies of documents referred to in the 
application; and
    (7) Include or have attached statements (that are attested to be 
true and correct to the best of the individual's knowledge and 
belief) of the applicant or other persons in support of the 
application.
    (d) Waiver Application Submitted by Agent or Attorney. In 
addition to the requirements in paragraph (c) of this Appendix, a 
waiver application submitted by the applicant's agent or attorney 
must include or have attached a duly executed power of attorney or 
other documentary evidence of the agent's or attorney's right to act 
for the applicant.
    (e) Waiver Application Submitted on Behalf of a Minor or 
Incompetent Person. In addition to the requirements in paragraph (c) 
of this Appendix, if a guardian or committee has been appointed, a 
waiver application on behalf of a minor or incompetent person must 
include or have attached a certificate of the court showing the 
appointment and qualification of the guardian or committee. If a 
guardian or committee has not been appointed, a waiver application 
submitted on behalf of a minor or incompetent person must:
    (1) State the applicant's relationship to the minor or 
incompetent person,
    (2) Provide the name and address of the person having care and 
custody of the minor or incompetent person, and
    (3) Include an affirmation that any moneys received will be 
applied to the use and benefit of the minor or incompetent person, 
and that the appointment of a guardian or committee is not 
contemplated.
    (f) When to Submit a Waiver Application. An applicant must 
submit a waiver application so that it is received by the Component 
concerned within 3 years after the erroneous payment is discovered. 
The time limit is set by 10 U.S.C. 2774, 32 U.S.C. 716, or 5 U.S.C. 
5584, whichever applies. The time limit may not be extended or 
waived. Although the issue of timeliness normally will be raised 
upon initial submission (as explained at Appendix C to this part, 
paragraph (b)), the issue may be raised at any point during the 
waiver application consideration process.

Appendix C to Part 294--Processing a Waiver Application When the Debt 
is $1500 or Less

    (a) Initial Component Processing. Upon receipt of a waiver 
application, the Component concerned \1\ must:
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    \1\ Depending on the context, the term ``Component concerned'' 
or ``Component,'' as used in this Appendix, means the official 
designated by the Head of the Component concerned or by Component 
regulations to perform the function or take the action indicated.
---------------------------------------------------------------------------

    (1) Date stamp the application on the date received.
    (2) Determine whether the application was received within 3 
years after the discovery of the erroneous payment, and if the 
application was not timely, follow the procedures in paragraph (b) 
of this Appendix.
    (3) Investigate the circumstances relating to the erroneous 
payment.
    (4) Refer the application to the appropriate determining 
official (see paragraph (c) of this Appendix) for consideration and 
an initial determination.
    (b) Untimely Waiver Applications. When the Component concerned 
finds that a waiver application was not received within 3 years 
after the erroneous payment was discovered, the Component must send 
the applicant a notice of untimely receipt.
    (1) The notice must:
    (i) Cite the applicable statute and explain the reasons for the 
finding of untimely receipt;
    (ii) State that the application was not received within the 
statutory time limit and, therefore, may not be considered, unless 
that finding is reversed;
    (iii) Explain that the applicant may submit a rebuttal to the 
finding of untimely receipt (as explained in paragraph (b)(2) of 
this Appendix); and
    (iv) State that the statutory time limit may not be extended or 
waived.
    (2) An applicant may submit a written rebuttal, signed by the 
applicant or the

[[Page 68968]]

applicant's agent or attorney, to a notice of untimely receipt. The 
Component concerned must receive the rebuttal within 30 days of the 
date of the notice. The Component may grant an extension of up to an 
additional 30 days for good cause shown. The rebuttal should:
    (i) Explain the points of, and reasons for, disagreement with 
the notice;
    (ii) Have attached any documents referred to in the rebuttal; 
and
    (iii) Include or have attached statements (that are attested to 
be true and correct to the best of the individuals's knowledge and 
belief) by the applicant or other persons in support of the 
rebuttal.
    (3) If the applicant does not submit a rebuttal within the time 
permitted, the notice of untimely receipt is a final action and the 
Component must return the application to the applicant with a notice 
that the finding is final and, therefore, the application may not be 
considered. If the applicant submits a timely rebuttal, the 
Component must consider the rebuttal and:
    (i) If the Component finds that the application was received 
within the required time limit, the Component must reverse its 
finding of untimely receipt, notify the applicant in writing, and 
process the application on the merits; or
    (ii) If the Component does not reverse the finding of untimely 
receipt, the Component must forward the record, including the 
application, notice of untimely receipt, and rebuttal, to the 
appropriate determining official (see paragraph (c)(1) of this 
Appendix) for an initial determination on the issue of untimely 
receipt. The Component need not investigate the merits of the 
application before forwarding the record.
    (4) After making an initial determination on the issue of 
untimely receipt, the determining official must follow the 
procedures in paragraph (d) of this Appendix. In addition, if the 
determining official finds that the application was timely, the 
official may either:
    (i) Return the application to the Component concerned for 
processing on the merits in accordance with this appendix, or
    (ii) Consider the application and make an initial determination 
on the merits, in accordance with paragraph (c)(2) of this Appendix.
    (c) Initial Determinations. The standards in Appendix A to this 
part must be applied when considering the merits of a waiver 
application. After making an initial determination, the determining 
official must follow the procedures at paragraph (d) of this 
Appendix.
    (1) The officials listed in this paragraph, and referred to in 
this Appendix as determining officials, shall consider waiver 
applications and take the appropriate action described in paragraph 
(c)(2) of this Appendix with respect to the following debts:
    (i) The head of a non-DoD Component, or designee, for debts 
resulting from that Component's activity.
    (ii) The Director, Department of Defense Dependents Schools, or 
designee, for debts of civilian employees resulting from that 
Component's activity.
    (iii) The Director, National Security Agency, or designee, for 
debts resulting from that Component's activity.
    (iv) The Under Secretary of Defense (Comptroller), through the 
Defense Finance and Accounting Service, or other designee, for debts 
resulting from DoD Component activity not included in paragraphs 
(c)(1)(ii) and (c)(1)(iii) of this Appendix.
    (2) The officials listed in paragraph (c)(1) of this Appendix 
may take the following actions with respect to waiver applications:
    (i) Make an initial determination concerning whether or not a 
waiver application was received within 3 years after the discovery 
of the erroneous payment.
    (ii) Make an initial determination denying a waiver application 
in its entirety.
    (iii) Make an initial determination granting all or part of a 
waiver application.
    (d) Processing After an Initial Determination. After making an 
initial determination, the determining official must:
    (1) Notify the applicant. The notification must explain:
    (i) The determination and the reasons for it;
    (ii) The appropriate Component action to resolve the debt as a 
consequence of the determination, if it is or becomes a final action 
(the finality of an initial determination is explained at paragraph 
(e) of this Appendix); and
    (iii) The appeal process (as explained in Appendix E to this 
part), if the determination does not grant the entire application or 
does not contain a finding of timely receipt, as the case may be.
    (2) Notify the Component concerned, if the determining official 
is not an official of the Component concerned, when and if the 
determination is a final action. The notice must include an 
explanation of:
    (i) The determination and the reasons for it, and
    (ii) The appropriate Component action to resolve the debt as a 
consequence of the determination, if it is or becomes a final action 
(the finality of an initial determination is explained at paragraph 
(e) of this Appendix).
    (e) Finality of an Initial Determination. An initial 
determination that grants the entire waiver application, or that 
finds that the application was timely received, as the case may be, 
is a final action when it is issued. Otherwise, an initial 
determination (including one of untimely receipt) is a final action 
if the determining official does not receive an appeal within 30 
days of the date of the initial determination (plus any extension of 
up to 30 additional days granted by the determining official for 
good cause shown).

Appendix D to Part 284--Processing a Waiver Application When the Debt 
is More Than $1500

    (a) Initial Component Processing. Upon receipt of a waiver 
application, the Component concerned \1\ must:
---------------------------------------------------------------------------

    \1\ Depending on the context, the term ``Component concerned'' 
or ``Component,'' as used in this Appendix, means the official 
designated by the head of the Component concerned or by Component 
regulations to perform the function or take the action indicated.
---------------------------------------------------------------------------

    (1) Date stamp the application on the date received.
    (2) Determine whether the application was received within 3 
years after the discovery of the erroneous payment, and if the 
application was not timely, follow the procedures in paragraph (b) 
of this Appendix.
    (3) Investigate the circumstances relating to the erroneous 
payment.
    (4) Refer the waiver application to the appropriate determining 
official (see Appendix C to this part, paragraph (c)), who after 
applying the standards in Appendix A to this part may either:
    (i) Deny the waiver application in its entirety, if appropriate, 
and follow the procedures in Appendix C to this part, paragraph (d), 
or
    (ii) Refer the application, with a recommendation that part or 
all of the application be granted, to DOHA \2\ for consideration and 
an initial determination under paragraph (c) of this Appendix. The 
determining official must send the entire record and must prepare 
and submit a recommendation and administrative report (as explained 
in paragraphs (d) and (e) of this Appendix) with the application.
---------------------------------------------------------------------------

    \2\ Depending on the context, ``DOHA,'' as used in this 
Appendix, means the Director, Defense Office of Hearings and 
Appeals, or the individual(s) designated by the Director to perform 
the function or take the action indicated.
---------------------------------------------------------------------------

    (b) Untimely Waiver Applications. When the Component concerned 
finds that a waiver application was not received with 3 years after 
the erroneous payment was discovered, the Component must send the 
application a notice of untimely receipt.
    (1) The notice must:
    (i) Cite the applicable statute and explain the reasons for the 
finding of untimely receipt;
    (ii) State that the application was not received within the 
statutory time limit and, therefore, may not be considered, unless 
that finding is reversed;
    (iii) Explain that the applicant may submit a rebuttal to the 
finding of untimely receipt (as explained in paragraph (b)(2) of 
this Appendix.); and
    (iv) State that the statutory time limit may not be extended or 
waived.
    (2) An applicant may submit a written rebuttal, signed by the 
applicant or the applicant's agent or attorney, to a notice of 
untimely receipt. The Component concerned must receive the rebuttal 
within 30 days of the date of the notice. The Component may grant an 
extension of up to an additional 30 days for good cause shown. The 
rebuttal should:
    (i) Explain the points of, and reasons for, disagreement with 
the notice;
    (ii) Have attached any documents referred to in the rebuttal; 
and
    (iii) Include or have attached statements (that are attested to 
be true and correct to the best of the individual's knowledge and 
belief) by the applicant or other persons in support of the 
rebuttal.
    (3) If the applicant does not submit a rebuttal within the time 
permitted, the notice of untimely receipt is a final action and the

[[Page 68969]]

Component must return the application to the applicant with a notice 
that the finding is final and, therefore, the application may not be 
considered. If the applicant submits a timely rebuttal, the 
Component must consider the rebuttal and:
    (i) If the Component finds that the application was received 
within the required time limit, the Component must reverse its 
finding of untimely receipt, notify the applicant in writing, and 
process the application on the merits; or
    (ii) If the Component does not reverse the finding of untimely 
receipt, the Component must forward the record, including the 
application, notice of untimely receipt, and rebuttal, to the 
appropriate official (see Appendix C to this part, paragraph (c)(1)) 
for an initial determination on the issue of untimely receipt. The 
Component need not investigate the merits of the application before 
forwarding the record.
    (4) After making an initial determination on the issue of 
untimely receipt, the determining official must follow the 
procedures in Appendix C to this part, paragraph (d). In addition, 
if the determining official finds that the application was timely, 
the official may either:
    (i) Return the application to the Component concerned from 
processing on the merits in accordance with this part, or
    (ii) Make a recommendation to DOHA to grant all or part of the 
application as described in paragraphs (d) and (e) of this Appendix.
    (c) Initial Determinations. The standards in Appendix A to this 
part must be applied when considering the merits of a waiver 
application. After making an initial determination, DOHA must follow 
the procedures at paragraph (f) of this Appendix. DOHA may take the 
following actions with respect to waiver applications referred under 
paragraph (a)(4)(ii) or (b)(4)(ii) of this Appendix:
    (1) Make an initial determination denying a waiver application 
in its entirety.
    (2) Make an initial determination granting all or part of a 
waiver application.
    (d) Recommendation to DOHA to Grant All or Part of an 
Application. Referrals to DOHA must include the entire record along 
with the recommendation and administration report described in 
paragraph (e) of this Appendix. The record and the report must be 
sent to: Defense Office of Hearings and Appeals, Claims Division, 
P.O. Box 3656, Arlington, VA 22203-1995.
    (e) Recommendation and Administrative Report. The recommendation 
and administrative report required by paragraph (d) of this Appendix 
must describe the recommended action (and the reasons for it), and 
the following:
    (1) The names and mailing addresses of each employee, member, or 
other person from whom collection is sought, or a statement that the 
person cannot reasonably be located;
    (2) The aggregate amount of the debt, including an itemization 
showing the elements of the aggregate amount;
    (3) The date the erroneous payment was discovered;
    (4) The date the recipient was notified of the error, and a 
statement of the erroneous amounts paid before and after receipt of 
such notice;
    (5) A summary of the facts and circumstances describing: how the 
erroneous payment occurred; the recipient's knowledge of the 
erroneous nature of the payment; and the steps the recipient took, 
if any, to bring the matter to the attention of the appropriate 
official; and the Component's response; if any;
    (6) A finding of whether there is any indication of fraud, 
misrepresentation, fault, or lack of good faith on the part of the 
applicant and the reasons for such a finding;
    (7) Legible copies or the originals of supporting documents, 
such as leave and earnings statements, notifications of personnel 
actions, travel authorizations and vouchers, and military orders; 
and
    (8) Statements (that are attested to be true and correct to the 
best of the individual's knowledge and belief) of the applicant or 
other persons in support of the application.
    (f) Processing After an Initial Determination. After making an 
initial determination, DOHA must:
    (1) Notify the applicant. The notice must include an explanation 
of:
    (i) The determination and the reasons for it;
    (ii) The appropriate Component action to resolve the debt as a 
consequence of the determination, if it is or becomes a final action 
(the finality of an initial determination is explained at paragraph 
(g) of this Appendix); and
    (iii) The appeal process (as explained in Appendix E to this 
part), if the determination does not grant the entire application or 
does not contain a finding of timely receipt, as the case may be.
    (2) Notify the Component concerned when and if the determination 
is a final action. The notice must include an explanation of:
    (i) The determination and the reasons for it, and
    (ii) The appropriate Component action to resolve the debt as a 
consequence of the determination, if it is or becomes a final action 
(the finality of an initial determination is explained at paragraph 
(g) of this Appendix).
    (g) Finality of an Initial Determination. An initial 
determination that grants the entire waiver application, or that 
finds that the application was timely received, as the case may be, 
is a final action when it is issued. Otherwise, an initial 
determination (including one of untimely receipt) is a final action 
if the determining official does not receive an appeal within 30 
days of the date of the initial determination (plus any extension of 
up to 30 additional days granted by the determining official for 
good cause shown).

Appendix E to Part 284--Appeals

    (a) Who May Appeal. An applicant may appeal if an initial 
determination denies all or part of a waiver application or finds 
that the application was not received by the Component concerned 
within the time limit required by statute.
    (b) When and Where to Submit an Appeal.
    (1) When the determining official is not in DOHA \1\, they must 
receive an applicant's appeal within 30 days of the date of the 
initial determination. The determining official may extend this 
period for up to an additional 30 days for good cause shown. No 
appeal may be accepted after this time has expired. The appeal will 
be processed under the procedures in paragraph (c) through paragraph 
(k) of this Appendix.
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    \1\ Depending on the context, ``DOHA,'' as used in this 
appendix, means the Director, Defense Office of Hearings and 
Appeals, or the individual(s) designated by the Director to perform 
the function or take the action indicated.
---------------------------------------------------------------------------

    (2) When the determining official is in DOHA, DOHA must receive 
an applicant's appeal within 30 days of the date of the initial 
determination. DOHA may extend this period for up to an additional 
30 days for good cause shown. No appeal may be accepted after this 
time has expired. The appeal will be considered to be a request for 
reconsideration and will be processed under the procedures in 
paragraph (1) through paragraph (q) of this Appendix.
    (c) Content of an Appeal. The appeal must be written and signed 
by the applicant, the applicant's authorized agent, or the 
applicant's attorney, and should:
    (1) Provide the applicant's mailing address;
    (2) Provide the applicant's telephone number;
    (3) Provide the applicant's social security number;
    (4) Identify specific:
    (i) Errors or omissions of material and relevant fact,
    (ii) Legal or equitable (under the standards in Appendix A to 
this part) considerations that were overlooked or misapplied, and
    (iii) Findings that were arbitrary, capricious, or an abuse of 
discretion.
    (5) Present evidence of the correct or additional facts alleged;
    (6) Explain the reasons the findings should be reversed or 
modified;
    (7) Have attached copies of documents referred to in the appeal; 
and
    (8) Include or have attached statements (that are attested to be 
true and correct to the best of the individual's knowledge and 
belief) by the applicant or other persons in support of the appeal.
    (d) Determining Officials' Review. The determining official must 
review an applicant's appeal, and affirm, modify, or reverse the 
initial determination.
    (1) If upon review of an appeal in a case involving a debt in 
the aggregate amount of $1500 or less, the determining official 
grants the entire waiver appeal or grants the application to the 
extent requested in the appeal, the determining official must notify 
the applicant and the Component concerned, if the determining 
official is not an official of the Component concerned. The notice 
must explain the appropriate action to resolve the debt. This is a 
final action.
    (2) If the appeal concerns the untimely receipt of the waiver 
application and, upon the review of the appeal, the determining 
official finds that the application was received within the time 
limit required by statute, the official must notify the applicant in 
writing and take the appropriate action

[[Page 68970]]

under paragraph (b)(4) of Appendix C to this part or paragraph 
(b)(4) of Appendix D to this part, as appropriate.
    (3) In all other cases, the determining official must forward 
the appeal to DOHA in accordance with paragraph (e) of this 
Appendix. The determining official must prepare a recommendation and 
administrative report (as explained in paragraph (f) of this 
Appendix) and send a copy to the applicant, with a notice that the 
applicant may submit a rebuttal to the determining official (as 
explained in paragraph (g) of this Appendix).
    (e) Submission of Appeal to DOHA. No earlier than 31 days after 
the date of the administrative report or the day after the 
applicant's rebuttal period, as extended, expires, the determining 
official must send the entire record along with the recommendation 
and administrative report described in paragraph (f) of this 
Appendix to: Defense Office of Hearings and Appeals, Claims 
Division, P.O. Box 3656, Arlington, Virginia 22203-1995.
    (f) Recommendation and Administrative Report. The recommendation 
and administrative report required by paragraph (d)(3) of this 
Appendix must describe the recommended action (and the reasons for 
it) and, unless included in a report in the record that was prepared 
in the initial determination process as follows:
    (1) The names and mailing addresses of each employee, member, or 
other person from whom collection is sought, or a statement that the 
person cannot reasonably be located;
    (2) The aggregate amount of the debt, including an itemization 
showing the elements of the aggregate amount;
    (3) The date the erroneous payment was discovered;
    (4) The date the recipient was notified of the error, and a 
statement of the erroneous amounts paid before and after receipt of 
such notice;
    (5) A summary of the facts and circumstances describing: how the 
erroneous payment occurred; the recipient's knowledge of the 
erroneous nature of the payment; and the steps the recipient took, 
if any, to bring the matter to the attention of the appropriate 
official, and the Component's response, if any;
    (6) A finding of whether there is any indication of fraud, 
misrepresentation, fault, or lack of good faith on the part of the 
applicant and the reasons for such a finding;
    (7) Legible copies or the originals of supporting documents, 
such as leave and earnings statements, notifications of personnel 
actions, travel authorizations and vouchers; and military orders; 
and
    (8) Statements (that are attested to be true and correct to the 
best of the individual's knowledge and belief) of the applicant or 
other persons in support of the application;
    (g) Applicant's Rebuttal. An applicant may submit a written 
rebuttal, signed by the applicant or the applicant's agent or 
attorney, to the recommendation and administrative report. The 
rebuttal must be submitted to the determining official within 30 
days of the date of the recommendation and administrative report. 
The determining official may grant an extension of up to an 
additional 30 days for good cause shown. The rebuttal should 
include:
    (1) An explanation of the points and reasons for disagreeing 
with the report;
    (2) The file reference number;
    (3) Any documents referred to in the rebuttal; and
    (4) Statements (that are attested to be true and correct to the 
best of the individual's knowledge and belief) by the applicant or 
other persons in support of the rebuttal.
    (h) Action by the Determining Official on Appeal. The 
determining official must:
    (1) Date stamp the applicant's rebuttal on the date it is 
received.
    (2) Send the entire record to DOHA, but no earlier than 31 days 
after the date of the report, or the day after the applicant's 
rebuttal period, as extended, expires (as explained in paragraph (g) 
of this Appendix).
    (i) DOHA Appeal Decision. Except as provided in paragraph (q) of 
this Appendix, DOHA must base its decision on the written record, 
including the recommendation and administrative report and any 
rebuttal by the applicant. The written decision must:
    (1) Affirm, modify, reverse, or remand the initial determination 
and decide the application on the merits or return the application 
to the Component concerned for investigation and processing for an 
initial determination on the merits in accordance with Appendix C to 
this part;
    (2) State the amount of the waiver application that is granted 
and the amount that is denied and/or state that the application was 
or was not received within the statutory time limit, as appropriate; 
and
    (3) Explain the reasons for the decision.
    (j) Processing After the Appeal Decision. After issuing an 
appeal decision, DOHA must:
    (1) Send the applicant the decision and notify the applicant of:
    (i) The appropriate Component action to resolve the debt as a 
consequence of the decision, if it is or becomes a final action (as 
explained in paragraph (k) of this Appendix); and
    (ii) The procedures under this Appendix to request 
reconsideration (as explained in paragraphs (l) through (n) of this 
Appendix), if the decision does not grant the waiver application to 
the extent requested, or does not contain a finding of timely 
receipt, as the case may be.
    (2) Notify Component concerned of the decision, and the 
appropriate Component action to resolve the debt as a consequence of 
the decision.
    (k) Finality of a DOHA Appeal Decision. An appeal decision that 
grants the waiver application to the extent requested on appeal, or 
that finds that the application was timely received, as the case may 
be, is a final action when issued. Otherwise, an appeal decision is 
a final action if DOHA does not receive a request for 
reconsideration within 30 days of the date of the appeal decision 
(plus any extension of up to 30 additional days granted by DOHA for 
good cause shown).

    Note: In the case of a DOHA appeal decision issued before [the 
effective date of this part] that denied all or part of the waiver 
application, a request for reconsideration by the General Counsel of 
the Department of Defense, or designee, may be submitted within 60 
days of [the effective date of this part]. The General Counsel of 
the Department of Defense, or designee, shall consider such requests 
and affirm, modify, reverse, or remand the DOHA appeal decision. 
Requests for reconsideration by the General Counsel of the 
Department of Defense, or designee, received more than 60 days after 
[the effective date of this part] will not be accepted. Requests 
must be submitted to the address in paragraph (e) of this Appendix. 
The provisions of paragraph (n) of this Appendix apply.

    (l) Who May Request Reconsideration. An applicant may request 
reconsideration of a DOHA appeal decision.
    (m) When and Where to Submit a Request for Reconsideration. DOHA 
must receive a request for reconsideration within 30 days of the 
date of the appeal decision.\2\ DOHA may extend this period for up 
to an additional 30 days for good cause down. No request for 
reconsideration may be accepted after this time has expired. A 
request for reconsideration must be sent to DOHA at the address in 
paragraph (e) of this Appendix.
---------------------------------------------------------------------------

    \2\ With respect to appeal decisions issued before [the 
effective date of this part], the request for reconsideration by 
DOHA must be received within 30 days of [the effective date of this 
part].
---------------------------------------------------------------------------

    (n) Content of a Request for Reconsideration. The requirements 
of paragraph (c) of this Appendix concerning the content of an 
appeal, apply to a request for reconsideration.
    (o) DOHA's Review of a Request for Reconsideration. No earlier 
than 31 days after the date of the appeal decision, or the day after 
the last period for submitting a request, as extended, expires, DOHA 
must:
    (1) Consider a request for reconsideration;
    (2) Affirm, modify, or reverse the appeal decision;
    (3) Prepare a response that explains the reasons for the 
finding;
    (4) Send the response to the applicant and the Component 
concerned and notify both of the appropriate action on the debt.
    (p) The response is a final action. It is precedent in the 
consideration of waiver applications covered by this part unless 
otherwise stated in the document.
    (q) Consideration of Appeals and Requests for Reconsideration. 
When considering an appeal or request for reconsideration, DOHA may:
    (1) Consider additional evidence not included in the record as 
presented. The applicant must be provided a copy of the additional 
evidence and must be given a reasonable time to comment.
    (2) Take administrative notice of matters that are generally 
known or are capable of confirmation by resort to sources whose 
accuracy cannot reasonably be questioned.
    (3) Remand a matter to the Component with instructions to 
provide additional information.


[[Page 68971]]


    Dated: November 4, 2002.
Patricia L. Toppings,
Alternate OSD Federal Register Liasion Officer, Department of Defense.

[FR Doc. 02-28735 Filed 11-13-02; 8:45 am]
BILLING CODE 5001-08-M