[Federal Register Volume 71, Number 200 (Tuesday, October 17, 2006)]
[Rules and Regulations]
[Pages 60848-60852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-17229]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 256

RIN 1510-AA52


Obtaining Payments From the Judgment Fund and Under Private 
Relief Bills

AGENCY: Financial Management Service, Fiscal Service, Treasury.

ACTION: Final rule.

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SUMMARY: The Financial Management Service (FMS) is revising 31 CFR part 
256, governing how Federal government agencies (agencies) obtain 
payments from the Judgment Fund, 31 U.S.C. 1304, and how individuals 
obtain payments under private relief acts. The revision reflects 
current rules and procedures; it does not include any substantive 
changes.

[[Page 60849]]


DATES: This rule is effective on October 17, 2006.

FOR FURTHER INFORMATION CONTACT: Kevin McIntrye, Manager, Judgment Fund 
Branch, at (202) 874-6664 or [email protected]; or William 
J. Erle, Senior Counsel, at (202) 874-6680 or 
[email protected].

SUPPLEMENTARY INFORMATION: 

Background

    FMS is the Treasury Department bureau that administers and 
certifies payments from the Judgment Fund, 31 U.S.C. 1304. Pursuant to 
Public Law 104-53 (November 19, 1995), the Judgment Fund function was 
transferred from the General Accounting Office (GAO), now known as the 
Government Accountability Office, to the Office of Management and 
Budget (OMB). OMB delegated this responsibility to the Treasury 
Department.
    We are revising 31 CFR part 256, in part, to clarify that Judgment 
Fund payment requests are no longer submitted to GAO, to remove the 
reference to obsolete processing requirements for awards that are above 
$100,000 (this statutory ceiling was removed in 1977 by Public Law 95-
26), to provide guidance on the kinds of awards that are properly 
payable from the Judgment Fund, and to provide information on the 
current procedures for obtaining such payments. This rule seeks to 
provide guidance to agencies government-wide that submit requests for 
payments from the Judgment Fund for paying litigative and 
administrative awards. Additionally, it provides direction to private 
attorneys regarding filing requirements necessary to preserve the right 
to interest.

Regulatory Analyses

    Administrative Procedure Act. This rule reflects provisions that 
are already in effect as a matter of law and provides information on 
the current procedures for obtaining payments from the Judgment Fund. 
Under 5 U.S.C. 553(b)(B), this rule is exempt from notice and comment 
rulemaking requirements on the grounds that the amendments are non-
substantive and further delay in making these amendments is unnecessary 
and contrary to the public interest. Likewise, for the same reasons a 
delayed effective date is not required.
    Clarity of Regulations. Executive Order 12866 requires each agency 
to write regulations that are easy to understand. We invite comment on 
how to make this rule clearer. For example, you may wish to discuss: 
(1) Whether we have organized the material to suit your needs; (2) 
whether the requirements of the rule are clear; or (3) whether there is 
something else we could do to make this rule easier to understand.
    Executive Order 12866. FMS has determined that this rulemaking is 
not a significant regulatory action as defined in Executive Order 
12866. Therefore, a regulatory assessment is not required.
    Regulatory Flexibility Act. Because no notice of proposed 
rulemaking is required, the provisions of the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.) do not apply.

List of Subjects in 31 CFR Part 256

    Awards, Claims, Costs, Interest, Judgment Fund, Judgments, Tort 
claims.


0
For the reasons stated in the preamble, part 256 of title 31 of the 
Code of Federal Regulations is revised as follows:

PART 256--OBTAINING PAYMENTS FROM THE JUDGMENT FUND AND UNDER 
PRIVATE RELIEF BILLS

Subpart A--General Information
Sec.
256.0 What does this part cover?
256.1 What is Treasury's role in paying awards and settlements from 
the Judgment Fund?
256.2 Where can I find more information about, and forms for, 
Judgment Fund payments?
Subpart B--Requesting Payments
256.10 Who may request payment from the Judgment Fund?
256.11 How do agencies request payments?
256.12 What supporting documentation must agencies submit to FMS 
when requesting a payment from the Judgment Fund?
256.13 Are agencies required to supply a taxpayer identification 
number (TIN) when submitting a request for payment?
256.14 What happens if I submit an incomplete request for payment?
Subpart C--Debt Collection
256.20 How does an agency indicate that a debt is to be offset from 
a Judgment Fund payment?
256.21 Are Judgment Fund payments offset to collect administrative 
debts?
256.22 How does FMS set off an award under 31 U.S.C. 3728?
Subpart D--Interest and Litigation Costs
256.30 When does the Judgment Fund pay interest?
256.31 How does FMS compute interest on payments?
256.32 What documentation must be submitted to the Judgment Fund 
Branch to preserve the right to seek interest under 31 U.S.C. 
1304(b) in a case where the government has taken an appeal?
256.33 For what period of time is interest computed under 31 U.S.C. 
1304(b)?
256.34 Does the Judgment Fund pay all litigation costs?
Subpart E--Reimbursements to the Judgment Fund
256.40 When must an agency reimburse the Judgment Fund?
256.41 When is reimbursement due for CDA and No FEAR payments?
Subpart F--Additional Provisions
256.50 How does FMS process back pay awards?
256.51 Does FMS report Judgment Fund payments to the IRS as income 
to the payee on IRS Form 1099?
256.52 How does FMS issue a payment?
256.53 How does the submitting agency know when payment is made?
256.54 What happens if FMS denies a request for payment?
Subpart G--Private Relief Bills
256.60 How do I get paid for a Private Relief Bill?

    Authority: 31 U.S.C. 1304, 3728; 41 U.S.C. 612; 5 U.S.C. 2301 
note.

Subpart A--General Information


Sec.  256.0  What does this part cover?

    This part applies to payments made by the U.S. Department of the 
Treasury (Treasury) pursuant to the Judgment Fund statute, 31 U.S.C. 
1304.


Sec.  256.1  What is Treasury's role in paying awards and settlements 
from the Judgment Fund?

    (a) The Judgment Fund is a permanent, indefinite appropriation 
which is available to pay many judicially and administratively ordered 
monetary awards against the United States. In addition, amounts owed 
under compromise agreements negotiated by the U.S. Department of 
Justice in settlement of claims arising under actual or imminent 
litigation are normally paid from the Judgment Fund, if a judgment on 
the merits would be payable from the Judgment Fund. Treasury's 
Financial Management Service (FMS) certifies payments from the Judgment 
Fund when the following four tests have been met: (1) Awards or 
settlements are final; (2) Awards or settlements are monetary; (3) One 
of the authorities specified in 31 U.S.C. 1304(a)(3) provides for 
payment of the award or settlement; and (4) Payment may not legally be 
made from any other source of funds.
    (b) Additionally, FMS requires that requests for payment identify 
the statute that forms the basis of the underlying claim. The award or 
settlement must comply with the statutory and regulatory requirements 
that authorize the award or settlement. For example, interest is 
payable on Judgment Fund awards only if there is an express statutory 
provision, contractual

[[Page 60850]]

agreement or constitutional waiver of sovereign immunity authorizing 
the assessment of interest against the United States. Also, a tort 
under the Federal Tort Claims Act (FTCA) is payable from the Judgment 
Fund only when the award amount exceeds $2,500 (for administrative 
awards) and is in compliance with the regulatory requirements at 28 CFR 
part 14.


Sec.  256.2  Where can I find more information about, and forms for, 
Judgment Fund payments?

    Detailed information related to Judgment Fund payments, including 
copies of all forms, can be found in the Treasury Financial Manual 
(TFM), Volume I, Part 6, Chapter 3100. The TFM is available on the 
Judgment Fund Web site at http://www.fms.treas.gov/judgefund. Contact 
information for the Judgment Fund Branch is also available on the Web 
site.

Subpart B--Requesting Payments


Sec.  256.10  Who may request payment from the Judgment Fund?

    (a) Court judgments and settlements of litigation. The Department 
of Justice must normally submit the request for payment from the 
Judgment Fund. Agencies that have independent litigating authority may 
submit a request for payment themselves if the Department of Justice is 
not responsible for the case.
    (b) Administrative awards. The program agency that is authorized to 
approve the award must submit the request for payment.


Sec.  256.11  How do agencies request payments?

    Agencies must submit requests for payments from the Judgment Fund 
on FMS's Judgment Fund payment request forms or by using other approved 
methods as provided for on the Judgment Fund Web site at http://www.fms.treas.gov/judgefund. FMS provides forms and detailed 
information about Judgment Fund payments in the TFM, Volume I, Part 6, 
Chapter 3100. The TFM is also available on the Judgment Fund Web site. 
The submitting agency must complete and sign all required Judgment Fund 
forms and must attach all required supporting documents.


Sec.  256.12  What supporting documentation must agencies submit to FMS 
when requesting a payment from the Judgment Fund?

    (a) All payments. The submitting agency must submit a copy of the 
judgment or settlement agreement, as applicable, in addition to the 
request for payment from the Judgment Fund. The request for payment 
must be on the appropriate Judgment Fund payment request forms.
    (b) Awards to minors. For awards to claimants that are minors, the 
submitting agency must include in its submission to FMS documentation 
establishing that the payee, if different from the claimant, is legally 
authorized to act on behalf of the claimant. Documentation of court 
approvals (Federal, State, or foreign) that are legally required for 
payment must be submitted along with the request for payment from the 
Judgment Fund. State law typically specifies when money awards to 
minors require the appointment of a guardian. Agencies must list the 
appropriate controlling state law citation on the payment request 
forms.
    (c) Awards of costs. For awards of costs, the submitting agency 
must include a copy of the ``bill of costs'' or the Court's order 
awarding costs. Only those items expressly enumerated under the cost 
statute, 28 U.S.C. 1920, or other governing statute specific to the 
award, are payable from the Judgment Fund.
    (d) Payments to multiple claimants/payees in a single award. For 
awards where multiple payees are to receive separate payments, the 
submitting agency must complete separate Judgment Fund Vouchers for 
Payment for each payee. When there are multiple claimants in an 
administrative tort matter, each claimant's award must independently 
exceed the mandatory $2,500 threshold in order for payment to be made 
from the Judgment Fund. A claimant's threshold can be satisfied by 
combining amounts awarded for personal and property damage under the 
FTCA.
    (e) Awards of back pay. For awards of back pay where the judgment 
does not specifically state the principal amounts to be paid and 
withholdings to be made, the submitting agency must include a 
spreadsheet indicating precisely which amounts are allocable to net 
pay, deductions, and interest.


Sec.  256.13  Are agencies required to supply a taxpayer identification 
number (TIN) when submitting a request for payment?

    Yes, agencies must include a valid TIN on all requests for 
payments, unless the situation meets one of the exceptions listed in 
the FMS TIN Policy, which may be found on the FMS Web site at: http://www.fms.treas.gov/tinpolicy/regulations.html. For an individual, the 
TIN is the Social Security Number. For a business, the TIN is the 
Employer Identification Number issued by IRS. The TIN provided must be 
for the party entitled to the payment, whether or not that party is the 
payee. Failure to include a required TIN results in an incomplete 
request for payment.


Sec.  256.14  What happens if I submit an incomplete request for 
payment?

    FMS may return, without action, any request for payment that is 
incomplete. If a request for payment is returned for lack of necessary 
information, the submitting agency may resubmit the request for payment 
once all the required information is available.

Subpart C--Debt Collection


Sec.  256.20  How does an agency indicate that a debt is to be offset 
from a Judgment Fund payment?

    The submitting agency must identify on the appropriate Judgment 
Fund form any known debt owed to the United States that FMS is expected 
to collect by setoff against the award. Such a debt will be offset 
pursuant to the provisions of 31 U.S.C. 3728.


Sec.  256.21  Are Judgment Fund payments offset to collect 
administrative debts?

    Yes, separate and apart from its role as administrator of the 
Judgment Fund, FMS, in its capacity as disbursing official for the 
executive branch, offsets Judgment Fund payments to collect delinquent, 
nontax Federal debts through the Treasury Offset Program (TOP). This 
rule applies only to the setoff of Judgment Fund payments prior to 
payment certification, pursuant to 31 U.S.C. 3728, and not to 
disbursing official offsets pursuant to other authorities. (See 31 CFR 
285.5 for requirements for disbursing official offset of past-due 
delinquent, nontax debts pursuant to the authority set forth in 31 
U.S.C. 3716.)


Sec.  256.22  How does FMS set off an award under 31 U.S.C. 3728?

    The setoff statute establishes a two-step process to collect debts 
that are owed to the United States. If an agency notifies FMS of a debt 
for which a court has issued a judgment against a debtor in favor of 
the United States, or for which the IRS has issued a tax levy pursuant 
to 26 U.S.C. 6331, then FMS will automatically set off the debt from 
the payment. If the debt owed to the United States has not been 
judicially determined, then FMS must notify the claimant of the debt 
and request the debtor's consent to a setoff. If the debtor consents, 
then FMS will set off the debt. If the debtor does not consent, then 
FMS will withhold from payment an amount equal to the debt. FMS also 
may withhold an amount sufficient to pay

[[Page 60851]]

the cost of litigating the debt to judgment. FMS then will consult with 
the underlying agency and the Department of Justice regarding the 
necessity for a civil action to reduce the debt to judgment. If 
litigation proceeds and is successful, FMS will set off the debt. If 
the suit is unsuccessful, FMS will pay the withheld amount with 
interest accruing from the date when payment would have been made.

Subpart D--Interest and Litigation Costs


Sec.  256.30  When does the Judgment Fund pay interest?

    Interest is paid when it is ordered in the judgment pursuant to a 
statutory, contractual or constitutional waiver of sovereign immunity. 
Such waivers may include interest as set forth under 41 U.S.C. 611 
(Contract Disputes Act), 5 U.S.C. 5596 (Back Pay Act), or Title VII, 42 
U.S.C. 2000e-16 (Civil Rights Act of 1991). In addition, post-judgment 
interest is paid on awards eligible for interest under 31 U.S.C. 
1304(b) (unsuccessful appeal by the Government).


Sec.  256.31  How does FMS compute interest on payments?

    FMS computes interest according to the terms of the statute that 
waives sovereign immunity for interest to be awarded against the 
Federal government. The statute that allows interest must be cited on 
the appropriate Judgment Fund form.


Sec.  256.32  What documentation must be submitted to the Judgment Fund 
Branch to preserve the right to seek interest under 31 U.S.C. 1304(b) 
in a case where the government has taken an appeal?

    31 U.S.C. 1304(b) specifies that a ``transcript of the judgment'' 
must be filed with the Secretary of the Treasury. This means that a 
copy of the judgment must be filed with the Judgment Fund Branch for 
interest to accrue on a judgment of a federal district court, the Court 
of Appeals for the Federal Circuit, or the United States Court of 
Federal Claims. By practice, the successful plaintiff files a copy of 
the judgment. Whoever submits the judgment should include a cover 
letter explaining that it is being submitted to preserve interest 
rights under 31 U.S.C. 1304. A copy of the judgment and cover letter 
must be sent to the Financial Management Service, Judgment Fund Branch, 
at the address indicated on the Judgment Fund Web site at http://www.fms.treas.gov/judgefund.


Sec.  256.33  For what period of time is interest computed under 31 
U.S.C. 1304(b)?

    Interest is computed from the date that FMS receives the copy of 
the judgment until the date preceding the appellate court's affirmative 
ruling. If the United States files a Notice of Appeal which it later 
withdraws, interest is paid on the award through the date before the 
withdrawal of the Notice of Appeal.


Sec.  256.34  Does the Judgment Fund pay all litigation costs?

    FMS certifies for payment only those costs that are enumerated in 
the cost statute, 28 U.S.C. 1920, or as set forth under a statute that 
specifically governs payment of the award.

Subpart E--Reimbursements to the Judgment Fund


Sec.  256.40  When must an agency reimburse the Judgment Fund?

    Agencies are required to reimburse the Judgment Fund for payments 
made pursuant to the Contract Disputes Act (CDA), 41 U.S.C. 612, and 
payments made pursuant to the Notification and Federal Employees 
Antidiscrimination and Retaliation Act of 2002 (No FEAR), 5 U.S.C. 2301 
note. The TFM, available on the Judgment Fund Web site at http://www.fms.treas.gov/judgefund, contains more information about how FMS 
bills agencies and collects such reimbursements.


Sec.  256.41  When is reimbursement due for CDA and No FEAR payments?

    Reimbursement for a CDA or No FEAR payment should be made promptly 
upon notification from FMS of the amount due. If the agency is unable 
to timely reimburse FMS, the agency must contact FMS to establish a 
reimbursement plan. Under Office of Personnel Management (OPM) 
regulations, No FEAR reimbursements or payment reimbursement plans must 
be made within 45 days of the request for reimbursement. See 5 CFR part 
724. Agencies that do not meet this requirement will be listed on FMS's 
public Web site.

Subpart F--Additional Provisions


Sec.  256.50  How does FMS process back pay awards?

    (a) The submitting agency may request one of two methods to process 
back pay awards. One method has three parts. The first part is a 
payment of net back pay (and interest if authorized), which is sent to 
the plaintiff or to the plaintiff's attorney, as directed by the 
submitting agency. The second part is a payment to the agency of 
deductions from the net back pay. The third part is a payment of 
attorney fees, which is sent directly to the attorney.
    (b) Under the second method, FMS pays the entire back pay award to 
the agency out of whose actions the claim arose. The agency then issues 
amounts representing back pay (and interest if authorized) to the 
plaintiff and retains amounts representing deductions. FMS pays the 
attorney fees directly to the attorney.


Sec.  256.51  Does FMS report Judgment Fund payments to the IRS as 
income to the payee on IRS Form 1099?

    No, FMS does not report Judgment Fund payments as potential taxable 
income to the IRS. FMS does not have sufficient information about the 
payment to determine if a Form 1099 must be issued or to prepare such a 
form when required. To the extent any Form 1099 needs to be issued, it 
is the responsibility of the agency submitting the payment request to 
do so.


Sec.  256.52  How does FMS issue a payment?

    Pursuant to 31 CFR part 208, Judgment Fund payments are to be made 
by electronic funds transfer (EFT). FMS will issue an electronic 
payment to the payee's account as specified on the appropriate Judgment 
Fund form. If a submitting agency determines that a waiver (in 
accordance with 31 CFR part 208) to the requirement for payment by EFT 
is appropriate, FMS will issue a payment by check. The Voucher for 
Payment must direct payment to the payee designated in the judgment or 
settlement agreement.


Sec.  256.53  How does the submitting agency know when payment is made?

    FMS will e-mail the agency contact when payment is disbursed, if 
the agency contact has provided an email address on the appropriate 
Judgment Fund form. Also, FMS maintains an on-line payment status 
system that the submitting agency can access to determine the status of 
a payment. The payment reporting system can be accessed from the 
Judgment Fund Web site at http://www.fms.treas.gov/judgefund.


Sec.  256.54  What happens if FMS denies a request for payment?

    FMS must deny any request for payment that fails to satisfy the 
requirements of 31 U.S.C. 1304. The submitting agency may request 
reconsideration of a payment denial. The submitting agency must provide 
an explanation of how the request for payment meets the four tests 
contained in section 256.1 of this part. If applicable, requests for 
reconsideration

[[Page 60852]]

must contain a reference to the agency's program authority and include 
specific funding provisions that pertain to the program activity that 
resulted in the claim. If, upon reconsideration, FMS determines that 
payment from the Judgment Fund is appropriate, and the agency has 
already made payment to the plaintiff or claimant, FMS will reimburse 
the agency from the Judgment Fund.

Subpart G--Private Relief Bills


Sec.  256.60  How do I get paid for a Private Relief Bill?

    You may apply for payment by sending a request letter along with 
supporting documentation, to include a copy of the private relief act 
and proof of your identity, to the address specified on the FMS Web 
site at http://www.fms.treas.gov/privaterelief.

    Dated: October 11, 2006.
Kenneth R. Papaj,
Commissioner.
[FR Doc. E6-17229 Filed 10-16-06; 8:45 am]
BILLING CODE 4810-35-P