Claims-Collection Regulation, 11905-11913 [2021-03385]

Agencies

• Agency for International Development

[Federal Register Volume 86, Number 38 (Monday, March 1, 2021)]
[Proposed Rules]
[Pages 11905-11913]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-03385]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 86, No. 38 / Monday, March 1, 2021 / Proposed 
Rules

[[Page 11905]]



AGENCY FOR INTERNATIONAL DEVELOPMENT

22 CFR Part 213

RIN 0412-AA96


Claims--Collection Regulation

AGENCY: U.S. Agency for International Development.

ACTION: Proposed rule.

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

SUMMARY: The U.S. Agency for International Development (USAID) seeks 
public comment on a proposed rule to revise its regulation on claims 
collection in its entirety to incorporate applicable statutory and 
regulatory provisions and to make other changes. Specifically, an 
amendment made by the Digital Accountability and Transparency Act of 
2014 (DATA Act) requires USAID to refer to the Secretary of the 
Treasury all past-due, legally enforceable, non-tax debt that are over 
120 days delinquent. The changes will maximize the effectiveness of 
USAID's claim-collection procedures.

DATES: Comments must be received no later than March 31, 2021.

ADDRESSES: Address all comments concerning this proposed rule to 
Dorothea Malloy, Office of the Chief Financial Officer, United States 
Agency for International Development, 1300 Pennsylvania Avenue NW, 
USAID Annex, Room 8.80C, Washington, DC 20523. Submit comments, 
identified by title of the action and Regulatory Information Number 
(RIN) by any of the following methods:
    1. Through the Federal eRulemaking Portal at https://www.regulations.gov by following the instructions for submitting 
comments.
    2. By mail, addressed to USAID, Office of the Chief Financial 
Officer, 1300 Pennsylvania Avenue NW, USAID Annex, Room 8.80C, 
Washington, DC 20523.

FOR FURTHER INFORMATION CONTACT: Dorothea Malloy, Telephone: (202) 916-
2518; or Email: [email protected].

SUPPLEMENTARY INFORMATION:

A. Instructions

    All comments must be in writing and submitted through one of the 
methods specified in the ADDRESSES section above. All submissions must 
include the title of the action and RIN for this rulemaking. Please 
include your name, title, organization, postal address, telephone 
number, and email address in the text of the message.
    Please note that USAID recommends sending all comments to the 
Federal eRulemaking Portal because security-screening precautions have 
slowed the delivery and dependability of surface mail to USAID in 
Washington, DC.
    USAID will make comments available at https://www.regulations.gov 
for public review without change, including any personal information 
provided. We recommend that you do not submit information that you 
consider Confidential Business Information (CBI) or any information 
otherwise protected from disclosure by statute.
    USAID will only address substantive comments on the rule. USAID 
might not consider comments that are insubstantial or outside the scope 
of the proposed rule.

B. Request for Comments

    USAID requests comments on its proposed rule to revise our claim-
collection regulations to comply with the Digital Accountability and 
Transparency Act of 2014 (DATA Act) and to update claims-collections 
definitions and references.

I. Background

    This rulemaking proposes revisions to part 213 of title 22 of the 
Code of Federal Regulations (CFR), USAID's claim-collection regulation, 
to conform to a statutory requirement that Federal Departments and 
Agencies must refer all past-due, legally enforceable, non-tax debt 
that is delinquent for more than 120 days, including non-tax debt 
administered by a third party that is acting as an agent for the 
Federal Government, to the Secretary of the Treasury for the purposes 
of administrative offset. The proposed rule also updates claims-
collection definitions to align with the Debt Collection Improvement 
Act of 1996, and specifies that the Bureau of the Fiscal Service is the 
Agency within the U.S. Department of the Treasury to which USAID refers 
delinquent debts. The changes will maximize the effectiveness of 
USAID's claim-collection procedures.

II. Regulatory Findings

Executive Orders 12866, 13563, and 13771

    USAID has drafted this proposed rule in accordance with Executive 
Orders (E.O.s) 12866 and 13563, which direct Federal Departments and 
Agencies to assess all the costs and benefits of available regulatory 
alternatives and, if regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health and safety effects, distributive impacts, 
and equality). E.O. 13563 emphasizes the importance of quantifying both 
costs and benefits, of reducing costs, of harmonizing rules, and of 
promoting flexibility. USAID has reviewed the regulation to ensure its 
consistency with the regulatory philosophy and principles set forth in 
E.O.s 12866 and 13563 and finds that the benefits of issuing this rule 
outweigh any costs, which the Agency assesses to be minimal. The Office 
of Information and Regulatory Affairs within the Office of Management 
and Budget (OMB/OIRA) has determined that this rule is not a 
``significant regulatory action'' as defined in E.O. 12866 and, 
accordingly, has not reviewed it. OMB/OIRA also has determined that 
this rule is not an ``economically significant regulatory action'' 
under Section 3(f)(1) of E.O. 12866. This proposed rule is not subject 
to the requirements of E.O. 13771 because OMB has determined it to be 
non-significant within the meaning of E.O. 12866.

Regulatory Flexibility Act

    USAID certifies that this rule will not have a significant economic 
impact on a substantial number of small entities. Consequently, the 
Agency has not prepared a regulatory-flexibility analysis.

Small Business Regulatory Enforcement Fairness Act

    This rule is not a ``major rule'' as defined by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (Section 804(2) of Title 5 
of the United States Code [U.S.C.]). This rule will not result in an 
annual effect on the U.S. economy of $100 million or more;

[[Page 11906]]

a major increase in costs or prices; or significant adverse effects on 
competition, employment, investment, productivity, innovation, or on 
the ability of U.S.-based companies to compete with foreign-based 
companies in domestic and import markets.

Unfunded Mandates Reform Act

    This proposed rule will not result in the expenditure by State, 
local, and tribal governments, in the aggregate, or by the private 
sector, of $100 million or more in any year, and it will not 
significantly or uniquely affect small governments. Therefore, USAID 
has deemed no actions were necessary under the provisions of the 
Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531 et seq.).

Executive Order 13132

    This rule will not have a substantial direct effect 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. In accordance with E.O. 13132, USAID has 
determined that this rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Summary Impact 
Statement.

Executive Order 12988

    In accordance with E.O. 12988, the Office of the General Counsel at 
USAID has determined that this rule does not unduly burden the judicial 
system and meets the requirements of Sections 3(a) and 3(b)(2) of the 
Executive order.

Executive Order 13175

    USAID has determined that this rule would not have substantial 
direct effects on one or more Indian Tribes, the relationship between 
the Federal Government and Indian Tribes, or the distribution of power 
and responsibilities between the Federal Government and Indian Tribes 
(E.O. 13175).

Paperwork Reduction Act

    This rule does not contain information-collection requirements, and 
therefore a submission to OMB under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.) is not required.

List of Subjects in 22 CFR Part 213

    Claims, Government employees, Income taxes, Wages.

    For the reasons stated in the preamble, USAID proposes to amend 
part 213 of title 22 of the CFR as follows:

PART 213--CLAIMS COLLECTION

0
1. The authority citation for part 213 is revised to read as follows:

    Authority:  22 U.S.C. 2381(a); 31 U.S.C. 902(a); 31 U.S.C. 3701-
3719; 5 U.S.C. 5514; 31 CFR part 285; 31 CFR parts 900 through 904.

0
2. Revise the heading for subpart A to read as follows:

Subpart A--General Provisions

0
3. Revise Sec.  213.1 to read as follows:


Sec.  213.1  Purpose and scope.

    (a) Purpose. This part prescribes standards and procedures for the 
collection and disposal of claims due to the United States from the 
U.S. Agency for International Development (USAID). This part covers 
USAID's administrative actions to collect claims/debts (including 
administrative and salary offsets; compromise; suspension or 
termination of collection actions; transfer and/or referral of claims 
to the U.S. Departments of the Treasury and Justice). The terms 
``claim'' and ``debt'' are synonymous and interchangeable. They refer 
to an amount of money, funds, or property that an appropriate USAID 
official has determined to be due to the United States from any person, 
organization, or entity except another Federal Department or Agency.
    (b) Scope. The standards and procedures in this part are applicable 
to all claims and debts for which a statute, regulation, or contract 
does not prescribe different standards or procedures.
    (c) Applicability. This part does not apply to USAID:
    (1) Claims arising out of loans for which compromise and collection 
authority is conferred by Section 635(g)(2) of the Foreign Assistance 
Act of 1961, as amended;
    (2) Claims arising from investment-guaranty operations for which 
settlement and arbitration authority is conferred by Section 635(l) of 
the Foreign Assistance Act of 1961, as amended;
    (3) Claims against any foreign country or any political subdivision 
thereof, or any public international organization;
    (4) Claims where the Chief Financial Officer (CFO) determines that 
the achievement of the purposes of the Foreign Assistance Act of 1961, 
as amended, or any other provision of law administered by USAID require 
a different course of action;
    (5) Claims owed USAID by other Federal Departments and Agencies. 
Such debts will be resolved by negotiation between the Departments/
Agencies; and
    (6) Claims that appear to be fraudulent, false, or misrepresented 
by a party with an interest in the claim except to the extent provided 
in Sec.  213.4.
0
4. Amend Sec.  213.2 by revising paragraphs (d) through (o) and adding 
paragraphs (p) through (s) to read as follows:


Sec.  213.2  Definitions.

* * * * *
    (d) Claim (or Debt) means an amount of money, funds, or property 
that a USAID official has determined to be due the United States from 
any person, organization, or entity, except another Federal Department 
or Agency. As used in this part, the terms ``debt'' and ``claim'' are 
synonymous and interchangeable.
    (e) CFO means the Chief Financial Officer of USAID or a USAID 
official delegated by the CFO to act on the CFO's behalf.
    (f) Compromise means that the creditor Agency accepts less than the 
full amount of an outstanding debt in full satisfaction of the entire 
amount of the debt.
    (g) Creditor Agency means the Federal Department or Agency to which 
the debt is owed, including a debt-collection center when acting on 
behalf of a creditor Agency in matters pertaining to the collection of 
a debt.
    (h) Debtor means an individual, organization, association, 
corporation, or a State or local government indebted to the United 
States, or a person or entity with legal responsibility for assuming 
the debtor's obligation.
    (i) Delinquent debt means any debt that is past due and is legally 
enforceable. A debt is past due if it has not been paid by the date 
specified in the Agency's initial written demand for payment notice or 
applicable agreement or instrument (including a post-delinquency 
payment agreement) unless the parties involved have made other 
satisfactory payment arrangements.
    (j) Discharge of indebtedness means the release of a debtor from 
personal liability for a debt. Further collection action is prohibited.
    (k) Disposable pay means that part of current basic pay, special 
pay, incentive pay, retired pay, retainer pay, or, in the case of an 
employee not entitled to basic pay, other authorized pay, which remains 
after the deduction of any amount required by law to be withheld (other 
than deductions to execute garnishment orders) in accordance with 5 CFR 
parts 581 and 582. Among the legally required deductions that must be 
applied first to determine disposable pay are levies pursuant to the 
Internal Revenue Code (Title 26 of the United

[[Page 11907]]

States Code) and deductions described in 5 CFR 581.105(b) through (f). 
These deductions include, but are not limited to, Social Security 
withholdings; Federal, State, and local tax withholdings; health-
insurance premiums; retirement contributions; and life-insurance 
premiums.
    (l) Employee means a current U.S. Direct-Hire employee of the 
Federal Government, including a current member of the Armed Forces or a 
Reserve of the Armed Forces.
    (m) Employee salary offset means the administrative collection of a 
debt by deductions at one or more officially established pay intervals 
from the current pay account of an employee without the employee's 
consent.
    (n) Person means an individual, firm, partnership, corporation, 
association, and, except for purposes of administrative offsets under 
subpart C of this part and interest, penalties, and administrative 
costs under subpart B of this part, includes State and local 
governments and Indian tribes and components of tribal governments.
    (o) Recoupment is a special method for adjusting debts that arise 
under the same transaction or occurrence. For example, obligations that 
arise under the same contract generally are subject to recoupment.
    (p) Suspension means the temporary cessation of active debt 
collection pending the occurrence of an anticipated event.
    (q) Termination means the cessation of all active debt-collection 
action for the foreseeable future.
    (r) Waiver means the decision to forgo the collection of a debt 
owed to the United States, as provided for by a specific statute and 
according to the standards set out under that statute.
    (s) Withholding order means any order for the withholding or 
garnishment of pay issued by USAID or a judicial or administrative 
body. For the purposes of this part, ``wage- garnishment order'' and 
``garnishment order'' have the same meaning as ``withholding order.''


Sec.  213.3  [Removed]

0
5. Remove Sec.  213.3.


Sec.  213.4  [Redesignated as Sec.  213.3 and Amended]

0
6. Redesignate Sec.  213.4 as Sec.  213.3, and amend newly redesignated 
Sec.  213.3 by revising paragraph (a) to read as follows:


Sec.  213.3   Other remedies.

    (a) This part does not supersede or require the omission or 
duplication of administrative proceedings required by contract, 
statute, or regulation (e.g., resolution of audit findings under grants 
or contracts; or appeal provisions under grants or contracts).
* * * * *


Sec.  213.5   [Redesignated as Sec.  213.4 and Amended]

0
7. Redesignate Sec.  213.5 as Sec.  213.4 and revise newly redesignated 
Sec.  213.4 to read as follows:


Sec.  213.4   Fraud claims.

    (a) The CFO will refer a claim that appears to be fraudulent, 
false, or misrepresented by a party that has an interest in the claim 
to the USAID Office of Inspector General (OIG). The OIG has the 
responsibility for investigating or referring the matter, where 
appropriate, to the U.S. Department of Justice (DOJ). The OIG has the 
responsibility to provide the results of the investigation on a timely 
basis to the CFO for any further action.
    (b) The CFO will not administratively compromise, terminate, or 
suspend collection action, or otherwise dispose of a claim that appears 
to be fraudulent, false, or misrepresented by a party that has an 
interest in the claim, without the approval of DOJ.


Sec.  213.6   [Redesignated as Sec.  213.5 and Amended]

0
8. Redesignate Sec.  213.6 as Sec.  213.5 and revise newly redesignated 
Sec.  213.5 to read as follows:


Sec.  213.5   Subdivision of claims not authorized.

    USAID will not subdivide a claim to avoid the $100,000 limit on the 
Agency's authority to compromise a claim, suspend collection action on 
a claim, or terminate collection action on a claim. A debtor's 
liability that arises from a particular transaction or contract is a 
single claim.


Sec.  213.7   [Redesignated as Sec.  213.6]

0
9. Redesignate Sec.  213.7 as Sec.  213.6.
0
10. Revise the heading for subpart B to read as follows:

Subpart B--Collection Actions


Sec.  213.8   [Redesignated as Sec.  213.7 and Amended]

0
11. Redesignate Sec.  213.8 as Sec.  213.7 and amend newly redesignated 
Sec.  213.7 by revising paragraph (a) to read as follows:


Sec.  213.7   Collection--general.

    (a) The CFO takes action to collect all debts owed the United 
States that arise out of USAID's activities, and to reduce debt 
delinquencies. Collection actions may include sending at least one 
written demand for payment notice to the debtor's last-known address 
provided in the records of USAID. Other appropriate action may proceed 
the written demand for payment notice, including immediate referral to 
DOJ for litigation, when such action is necessary to protect the 
Federal Government's interest.
* * * * *


Sec.  213.9  [Redesignated as Sec.  213.8 and Amended]

0
12. Redesignate Sec.  213.9 as Sec.  213.8 and amend newly redesignated 
Sec.  213.8 by:
0
a. Revising the section heading and paragraphs (a) introductory text, 
(a)(4), (5), (7), (8), (10), and (11);
0
b. Adding paragraph (a)(12); and
0
c. Revising paragraph (b).
    The revisions and addition read as follows:


Sec.  213.8  Written demand for payment notice.

    (a) When an Agency official determines that a debt is owed to 
USAID, the Agency sends a written demand for payment notice to the 
debtor. Unless otherwise provided by agreement, contract, or order, the 
written demand for payment notice informs the debtor of:
* * * * *
    (4) Any rights available to the debtor to review the debt, or to 
have recovery of the debt waived (by citing the available review or 
waiver authority, the conditions for review or waiver, and the effects 
of the review or waiver request on the collection of the debt);
    (5) The date on which debt payment is due, which will be not more 
than 30 days from the date the written demand-for-payment notice is 
mailed or hand-delivered;
* * * * *
    (7) The debt is considered delinquent if it is not paid on the due 
date provided in the initial written demand-of-payment notice;
    (8) The imposition of interest charges, penalties, and 
administrative costs that USAID may assess against a delinquent debt, 
and the date when such charges apply;
* * * * *
    (10) The Agency will refer delinquent debt unpaid at 90 days from 
the initial written demand for payment notice to the Bureau of the 
Fiscal Service (Fiscal Service) within the U.S. Department of the 
Treasury. Statute requires the referral of delinquent debt to Fiscal 
Service no later than 120 days from the initial written demand-for-
payment notice. Fiscal Service will use means available to the Federal 
Government for collecting a debt, including administrative wage-
garnishment, the use of collection agencies, and reporting

[[Page 11908]]

the indebtedness to a credit-reporting bureau (see Sec.  213.15);
    (11) The address, telephone number, and name of the person 
available to discuss the debt; and
    (12) The possibility of referral to DOJ for litigation if USAID 
cannot collect the debt administratively.
    (b) USAID will respond promptly to written communications from the 
debtor, generally within 30 days of receipt of such a communication.


Sec.  213.10   [Redesignated as Sec.  213.9 and Amended]

0
13. Redesignate Sec.  213.10 as Sec.  213.9 and amend newly 
redesignated Sec.  213.9 by revising the section heading and paragraphs 
(a) and (c) and adding (e) to read as follows:


Sec.  213.9   Agency review requirements.

    (a) For purposes of this section, whenever USAID must afford a 
debtor a review within the Agency, USAID shall provide the debtor with 
a reasonable opportunity for a review when the debtor requests 
reconsideration of the debt in question. The review may include the 
examination of documents, internal discussions with relevant officials, 
and discussion by letter or orally with the debtor, at USAID's 
discretion. For the offset of current Federal salary under 5 U.S.C. 
5514 for certain debts, an employee may request an outside hearing. See 
Sec. Sec.  213.21 and 213.22 when USAID is the creditor Agency.
* * * * *
    (c) This section does not require an oral hearing with respect to 
debt collection in which the agency has determined that review of the 
written record is an adequate means to correct a prior mistake.
* * * * *
    (e) If, after review, USAID either sustains or amends its 
determination, it shall notify the debtor of its intent to collect the 
sustained or amended debt. The notification to collect the sustained or 
amended debt will include accrued interest on the sustained or amended 
debt, calculated from the date of delinquency. If USAID has suspended 
collection actions previously, it will re-institute them unless it 
receives payment of the sustained or amended amount, or the debtor has 
made a proposal for a payment plan to which the Agency agrees, by the 
date specified in the notification of USAID's decision.


Sec.  213.11   [Redesignated as Sec.  213.10 and Amended]

0
14. Redesignate Sec.  213.11 as Sec.  213.10 and amend newly 
redesignated Sec.  213.10 by revising paragraph (b) to read as follows:


Sec.  213.10   Aggressive collection actions; documentation.

* * * * *
    (b) USAID documents all administrative collection actions in the 
claim file, along with the basis for any compromise, termination, or 
suspension of collection actions. USAID retains this documentation, 
which may include the Claims-Collection Litigation Report (CCLR) 
provided in Sec.  213.24, in the appropriate debt file.


Sec.  213.12   [Redesignated as Sec.  213.11 and Amended]

0
15. Redesignate Sec.  213.12 as Sec.  213.11 and amend newly 
redesignated Sec.  213.11 by revising the section heading and 
paragraphs (a)(1) and (e) to read as follows:


Sec.  213.11   Interest, penalties, and administrative costs.

    (a) * * *
    (1) Interest begins to accrue on all delinquent debts starting from 
the day after the payment due date established in the initial written 
demand-for-payment notice to the debtor. USAID will assess an annual 
rate of interest that is equal to the U.S. Department of the Treasury 
Current Value of Funds Rate (CVFR) unless a different rate is necessary 
to protect the interest of the Federal Government. USAID will notify 
the debtor of the basis for its finding that a different rate is 
necessary to protect the interest of the Government.
* * * * *
    (e) Waivers for the collection of interest, penalties, and 
administrative costs. (1) The CFO will waive the collection of interest 
and administrative charges on the portion of the debt paid within 30 
days after the date on which interest begins to accrue. The CFO may 
extend this 30-day period, on a case-by-case basis, when he or she 
determines that such action is in the best interest of the Federal 
Government. A decision to extend or not to extend the payment period is 
final, and is not subject to further review.
    (2) The CFO may (without regard to the amount of the debt) waive 
the collection of all or part of accrued interest, penalties, or 
administrative costs, when he or she determines that--
    (i) A waiver is justified under the standards for the compromise of 
claims under Sec.  213.25; or
    (ii) Collection of these charges would be against equity and good 
conscience, or is not in the best interest of the United States.
    (3) The CFO may make a decision to waive interest, penalties, or 
administrative costs at any time.


Sec.  213.13  [Redesignated as Sec.  213.12 and Amended]

0
16. Redesignate Sec.  213.13 as Sec.  213.12 and revise newly 
redesignated Sec.  213.12 to read as follows:


Sec.  213.12  Interest, penalties, and administrative costs pending 
consideration of debt waiver or review.

    Interest, penalties, and administrative costs will continue to 
accrue on a debt during a review by USAID and during a waiver of 
indebtedness consideration by the Agency; except that USAID will not 
assess interest, penalties, and administrative costs where a statute or 
a regulation specifically prohibits the collection of the debt during 
the period of the Agency's review or consideration of a debt waiver.
0
17. Add new Sec.  213.13 to read as follows:


Sec.  213.13  Waivers of indebtedness.

    The CFO may grant waivers of indebtedness for certain types of debt 
identified in Federal statutes under the following waiver authorities:
    (a) Waiver authorities--(1) Debts that arise out of erroneous 
payments of pay and allowances, and of travel, transportation, and 
relocation expenses and allowances. Title 5 U.S.C. 5584 provides the 
authority for waiving, in whole or in part, debts that arise out of 
erroneous payments of pay or allowances, travel, transportation, or 
relocation expenses and allowances to an employee of USAID, if 
collection would be against equity and good conscience, or not in the 
best interests of the United States:
    (i) The CFO may not grant a waiver if 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 who 
has an interest in obtaining a waiver.
    (ii) Fault is considered to exist if, in light of the 
circumstances, the employee knew, or should have known through the 
exercise of due diligence, that an error existed, but he or she failed 
to take corrective action. What an employee should have known is 
evaluated under a reasonable-person standard. However, employees are 
expected to have a general understanding of the Federal pay system 
applicable to them.
    (iii) An employee with notice that a payment might be erroneous is 
expected to make provisions for eventual repayment. Financial hardship 
is not a basis for granting a waiver for an

[[Page 11909]]

employee who was on notice of an erroneous payment.
    (iv) 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 who has an interest in obtaining a waiver 
of the claim, the employee is not automatically entitled to a waiver. 
Before granting a waiver, the deciding official also must determine 
that collection of the claim against an employee would be against 
equity and good conscience, or 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, or not 
in the best interests of the United States, include, but are not 
limited to, the following:
    (A) Whether collection of the claim would cause serious financial 
hardship to the employee from whom the Agency seeks collection;
    (B) Whether, because of the erroneous payment, the employee either 
has relinquished a valuable right or changed positions for the worse, 
regardless of his or her financial circumstances;
    (C) The time elapsed between the erroneous payment and the 
discovery of the error and notification of the employee;
    (D) Whether failure to make restitution would result in unfair gain 
to the employee; and
    (E) Whether recovery of the claim would be unconscionable under the 
circumstances.
    (2) Debts that arise out of advances in pay (5 U.S.C. 5524a); 
situations of Authorized or Ordered Departures (5 U.S.C. 5522); or 
allowances and differentials for employees stationed abroad (5 U.S.C. 
5922). Title 5 U.S.C. 5524a, 5522, or 5922 provide authority for 
waiving, in whole or in part, a debt that arises out of such an advance 
payment if it is shown that recovery would be against equity and good 
conscience, or against the public interest:
    (i) Factors to consider when determining if recovery of an advance 
payment would be against equity and good conscience, or against the 
public interest, include, but are not limited to, the following:
    (A) Death of the employee;
    (B) Retirement of the employee for disability;
    (C) Inability of the employee to return to duty because of 
disability (supported by an acceptable medical certificate); and
    (D) Whether failure to repay would result in unfair gain to the 
employee.
    (ii) [Reserved]
    (3) Debts that arise out of employee training expenses. Title 5 
U.S.C. 4108 provides the authority for waiving, in whole or in part, a 
debt that arises out of employee training expenses if it is shown that 
recovery would be against equity and good conscience, or against the 
public interest:
    (i) Factors to consider when determining if recovery of a debt that 
arises out of employee training expenses would be against equity and 
good conscience, or against the public interest, include, but are not 
limited to, the following:
    (A) Death of the employee;
    (B) Retirement of the employee for disability;
    (C) Inability of the employee to return to duty because of 
disability (supported by an acceptable medical certificate); and
    (D) Whether failure to repay would result in unfair gain to the 
employee.
    (ii) [Reserved]
    (4) Under-withholding of life-insurance premiums. Title 5 U.S.C. 
8707(d) provides the authority for waiving the collection of unpaid 
deductions that result from the under-withholding of premiums under the 
Federal Employees' Group Life Insurance Program if the individual is 
without fault and recovery would be against equity and good conscience, 
or against the public interest:
    (i) Fault is considered to exist if, in light of the circumstances, 
the employee knew, or should have known through the exercise of due 
diligence, that an error existed, but he or she failed to take 
corrective action:
    (ii) Factors to consider when determining whether the recovery of 
unpaid deduction that results from under-withholding would be against 
equity and good conscience, or against the public interest, include, 
but are not limited to, the following:
    (A) Whether collection of the claim would cause serious financial 
hardship to the individual from whom the Agency seeks collection;
    (B) The time elapsed between the failure to withhold properly and 
the discovery of the failure and notification of the individual;
    (C) Whether failure to make restitution would result in unfair gain 
to the individual; and
    (D) Whether recovery of the claim would be unconscionable under the 
circumstances.
    (5) Student-Loan Repayment Program service agreements. Title 5 
U.S.C. 5379 provides for waiving, in whole or in part, debt that arises 
from the Student-Loan Repayment Program if it is shown that recovery 
would be against equity and good conscience, or against the public 
interest:
    (i) Factors to consider when determining if recovery of a debt that 
arises out of the Student-Loan Repayment Program would be against 
equity and good conscience, or against the public interest, include, 
but are not limited to, the following:
    (A) Death of the employee;
    (B) Retirement of the employee for disability;
    (C) Inability of the employee to return to duty because of 
disability (supported by an acceptable medical certificate); and
    (D) Whether failure to repay would result in unfair gain to the 
employee.
    (ii) [Reserved]
    (b) [Reserved]
0
18. Amend Sec.  213.14 by revising the introductory text to read as 
follows:


Sec.  213.14   Contracting for collection services.

    USAID has entered into a cross-servicing agreement with the Bureau 
of the Fiscal Service (Fiscal Service) of the U.S. Department of the 
Treasury. Fiscal Service is authorized to take all appropriate action 
to enforce the collection of accounts referred to it in accordance with 
applicable statutory and regulatory requirements. Fiscal Service bases 
any applicable fees on the funds collected, and will collect such fees 
from the debtor along with the original amount of the indebtedness. 
After referral, Fiscal Service will be solely responsible for the 
maintenance of the delinquent debtor records in its possession, and for 
updating the accounts as necessary. Fiscal Service may take any of the 
following collection actions on USAID's behalf:
* * * * *
0
19. Amend Sec.  213.15 by revising the section heading, introductory 
text, and paragraphs (b) introductory text, (b)(2)(ii) and (iii), and 
(c) and removing paragraph (d) to read as follows:


Sec.  213.15   Use of credit-reporting bureaus.

    USAID reports delinquent debts owed to it to appropriate credit-
reporting bureaus through the cross-servicing agreement with the Bureau 
of the Fiscal Service (Fiscal Service) at the U.S. Department of the 
Treasury.
* * * * *
    (b) Before referring claims to Fiscal Service and disclosing debt 
information to credit-reporting bureaus, USAID will have done the 
following:
* * * * *
    (2) * * *
    (ii) If the debtor does not pay the debt 90 days after receiving 
the initial written demand-for-payment notice,

[[Page 11910]]

USAID intends to refer the debt to Fiscal Service and disclose to a 
credit-reporting agency the information authorized for disclosure by 
this subpart; and
    (iii) The debtor can request an Agency review or waiver, where 
applicable.
    (c) Before submitting information to a credit-reporting bureau, 
USAID will provide a written statement to Fiscal Service that the 
Agency has taken all required actions. Additionally, Fiscal Service 
thereafter will update the accounts as necessary during the period it 
holds the account information.


Sec.  213.17   [Amended]

0
20. Amend Sec.  213.17 in the first sentence by adding the words ``or 
she'' after the word ``he.''


Sec.  213.19   [Amended]

0
21. Amend Sec.  213.19 in the first sentence of paragraph (a) by 
removing the word ``penalty'' and adding ``penalties,'' in its place.
0
22. Revise the heading for subpart C to read as follows:

Subpart C--Administrative and Salary Offset

0
23. Amend Sec.  213.20 by:
0
a. Revising paragraphs (a)(1), (a)(2)(ii), (a)(3)(i), and (b);
0
b. Removing paragraph (c);
0
c. Redesignating paragraphs (d) through (h) as paragraphs (c) through 
(g);
0
d. Revising newly redesignated paragraphs (d) heading and (d)(1); and
0
e. In newly redesignated paragraphs (f)(1) and (f)(2)(ii), removing 
``creditor agency'' and adding ``creditor Agency'' in its place.
    The revisions read as follows:


Sec.  213.20   Administrative offset of non-employee debts.

* * * * *
    (a) * * *
    (1) The CFO collects debts by administrative offset only after 
USAID has sent the debtor a written demand-for-payment notice that 
outlines the type and amount of the debt, the intention of the Agency 
to use administrative offset to collect the debt, and explaining the 
debtor's rights under 31 U.S.C. 3716.
    (2) * * *
    (ii) The opportunity for a review within USAID of the Agency's 
decision related to the claim(s); and
* * * * *
    (3) * * *
    (i) The offset is in the nature of a recoupment;
* * * * *
    (b) Interagency offset. The CFO may offset a debt owed to another 
Federal Department or Agency from amounts due or payable by USAID to 
the debtor, or may request another Federal Department or Agency to 
offset a debt owed to USAID. The CFO, through USAID's cross-servicing 
arrangement with the Bureau of the Fiscal Service (Fiscal Service) 
within the U.S. Department of the Treasury, may request the Internal 
Revenue Service to offset an overdue debt from a Federal income-tax 
refund due to the debtor. Fiscal Service may also garnish the salary of 
a private-sector employee when reasonable attempts to obtain payment 
have failed. USAID will make interagency offsets from an employee's 
salary in accordance with the procedures contained in Sec. Sec.  213.22 
and 213.23.
* * * * *
    (d) Review of a decision to offset the debt. (1) USAID will not 
offset the debt while a debtor is seeking review of the debt under this 
section, or under another statute, regulation, or contract. However, 
interest, penalties, and administrative costs will continue to accrue 
during this period, unless otherwise waived by the CFO. The CFO may 
initiate offset as soon as practical after the completion of a review, 
or after a debtor waives the opportunity to request review.
* * * * *
0
24. Amend Sec.  213.21 by revising paragraph (b) to read as follows:


Sec.  213.21   Employee salary offset--general.

* * * * *
    (b) Scope. The provisions of this section apply to collection by 
salary offset under 5 U.S.C. 5514 of debts owed USAID and debts owed to 
other Federal Departments and Agencies by USAID's employees. USAID will 
make every effort reasonably and lawfully possible to collect 
administratively any amounts owed by its employees prior to initiating 
collection by salary offset. An amount advanced to an employee for per 
diem or mileage allowances in accordance with 5 U.S.C. 5705, but not 
used for allowable travel expenses, is recoverable from the employee by 
salary offset without regard to the due-process provisions in Sec.  
213.22. This section does not apply to debts for which another statute 
collection explicitly provides for, or prohibits, salary offset (e.g., 
travel advances under 5 U.S.C. 5705 and employee-training expenses 
under 5 U.S.C. 4108).
* * * * *
0
25. Amend Sec.  213.22 by revising the section heading and paragraphs 
(c)(4) and (9), (d), (f) heading, (f)(1), (g), (k)(1), (n) introductory 
text, and (n)(1) and (3) to read as follows:


Sec.  213.22   Salary offset when USAID is the creditor Agency.

* * * * *
    (c) * * *
    (4) An explanation of the requirements concerning interest, 
penalties, and administrative costs;
* * * * *
    (9) That the filing of a request for hearing within 15 days of 
receipt of the original notification will stay the assessment of 
interest, penalties, and administrative costs, and the commencement of 
collection proceedings;
* * * * *
    (d) Request for a hearing. An employee may request a hearing by 
filing a written, signed request to the Office of the Chief Financial 
Officer, United States Agency for International Development, 1300 
Pennsylvania Avenue NW, USAID Annex, Room 8.80D, Washington, DC 20523-
4601. The request must state the basis upon which the employee disputes 
the proposed collection of the debt. The employee must sign the 
request, and USAID must receive it within 15 days of his or her receipt 
of the notification of proposed deductions. The employee should submit, 
in writing, all facts, evidence, and witnesses that support his or her 
position to the CFO within 15 days of the date of the request for a 
hearing. The CFO will arrange for the services of a hearing official 
not under the control of USAID, and will provide the hearing official 
with all documents relating to the claim.
* * * * *
    (f) Form of hearing, written response, and final decision. (1) 
Normally, a hearing will consist of the hearing official's making a 
decision based on a review of the claims file and any materials 
submitted by the debtor. However, in instances in which the hearing 
official determines that the validity of the debt turns on an issue of 
veracity or credibility that the review of documentary evidence cannot 
resolve, the hearing official, at his or her discretion, may afford the 
debtor an opportunity for an oral hearing. Such an oral hearing will 
consist of a conference before a hearing official in which the employee 
and the Agency will have the opportunity to present evidence, 
witnesses, and argument. If desired, the employee may be represented by 
an individual of his or her choice. The Agency shall maintain a summary

[[Page 11911]]

record of oral hearings provided under the procedures in this section.
* * * * *
    (g) Request for waiver. In certain instances, an employee may have 
a statutory right to request a waiver of overpayment of pay or 
allowances (e.g., 5 U.S.C. 5584 or 5 U.S.C. 5724(i)). When an employee 
requests waiver consideration under a right authorized by statute, the 
Agency will suspend further collection on the debt until it makes a 
final administrative decision on the waiver request. However, when it 
appears that an employee's resignation, termination, or other action 
may prejudice the Government's ability to recover the debt, the 
suspension of recovery is not required. During the period of the 
suspension, USAID will not assess interest, penalties, charges, and 
administrative costs against the debt. The Agency will not duplicate, 
for purposes of salary offset, any of the procedures already provided 
the debtor under a request for waiver. See Sec.  213.13.
* * * * *
    (k) * * *
    (1) Deductions to liquidate an employee's debt will begin on the 
date stated in the Agency's written demand-for-payment notice of 
intention to collect, from the employee's current pay unless he or she 
has paid the debt or filed a timely request for a hearing on issues for 
which a hearing is appropriate.
* * * * *
    (n) Interest, penalties, and administrative cost. USAID will assess 
interest, penalties, and administrative costs on debts collected under 
the procedures in this section. Interest, penalties, and administrative 
costs will continue to accrue during the period that the debtor is 
seeking a review of the debt or requesting a waiver. The following 
guidelines apply to the assessment of these costs on debts collected by 
salary offset:
    (1) USAID will start to assess interest on all debts not collected 
by the payment due date specified in the initial written demand-for-
payment notice. USAID will waive the collection of interest and 
administrative charges on the portion of the debt paid within 30 days 
after the date on which interest begins to accrue.
* * * * *
    (3) Deductions by administrative offset normally begin prior to the 
time for assessment of a penalty. Therefore, USAID will not assess a 
penalty charge unless deductions occur more than 90 days from the due 
date in the initial written demand-for-payment notice.
* * * * *
0
26. Amend Sec.  213.23 by:
0
a. Revising the section heading;
0
b. Removing ``creditor agency'' and ``creditor agency's'' and adding 
``creditor Agency'' and ``creditor Agency's'', respectively, in their 
places everywhere they appear; and
0
c. Revising paragraph (b).
    The revisions read as follows:


Sec.  213.23   Salary offset when USAID is not the creditor Agency.

* * * * *
    (b) Requests to USAID by another Agency to offset salary. Requests 
for salary offset must be sent to the Office of the Chief Financial 
Officer, United States Agency for International Development, 1300 
Pennsylvania Avenue NW, USAID Annex, Room 8.80D, Washington, DC 20523-
4601.
* * * * *
0
27. Revise the heading for subpart D to read as follows:

Subpart D--Compromise of Claims

0
28. Revise Sec.  213.24 to read as follows:


Sec.  213.24   General.

    The CFO may compromise claims for money or property when the 
principal balance of a claim, exclusive of interest, penalties, and 
administrative costs, does not exceed $100,000. Where the claim exceeds 
$100,000, the authority to accept the compromise rests with DOJ. The 
CFO may reject an offer of compromise in any amount. DOJ's approval is 
not required if the Agency rejects a compromise offer. When the claim 
exceeds $100,000 and the CFO recommends acceptance of a compromise 
offer, he or she will refer the claim with his or her recommendation to 
DOJ for approval. The referral may be in the form of the Claims-
Collection Litigation Report (CCLR) and will outline the basis for 
USAID's recommendation. USAID refers compromise offers for claims in 
excess of $100,000 to the Commercial Litigation Branch of the Civil 
Division of the Department of Justice, Washington, DC 20530, unless 
otherwise provided by DOJ's delegations or procedures.
0
29. Revise Sec.  213.25 to read as follows:


Sec.  213.25   Standards for the compromise of claims.

    (a) The CFO may compromise a claim pursuant to this section if 
USAID cannot collect the full amount because:
    (1) The debtor is unable to pay the full amount of the debt within 
reasonable time, as verified through credit reports or other financial 
information;
    (2) The Federal Government is unable to collect the debt in full 
within a reasonable time by enforced collection proceedings;
    (3) The cost of collecting the debt does not justify the enforced 
collection of the full amount; or
    (4) There is significant doubt concerning the Government's ability 
to prove its case in court;
    (b) In evaluating the debtor's inability to pay, the CFO may 
consider, among other factors, the following:
    (1) Age and health of the debtor;
    (2) Present and potential income;
    (3) Inheritance prospects;
    (4) The possibility that assets have been concealed or improperly 
transferred by the debtor;
    (5) The availability of assets or income which may be realized by 
enforced collection proceedings; or
    (6) The applicable exemptions available to the debtor under State 
and Federal law in determining the Federal Government's ability to 
enforce collection;
    (c) The CFO may compromise a claim, or recommend acceptance of a 
compromise to DOJ, where there is significant doubt concerning the 
Federal Government's ability to prove its case in court for the full 
amount of the claim, either because of the legal issues involved or 
because of a bona fide dispute as to the facts. The amount accepted in 
compromise in such cases will fairly reflect the probability of 
prevailing on the legal issues involved, considering fully the 
availability of witnesses and other evidentiary data required to 
support the Government's claim. In determining the litigative risks 
involved, USAID will give proportionate weight to the likely amount of 
court costs and attorney fees the Government could incur if it is 
unsuccessful in litigation;
    (d) The CFO may compromise a claim, or recommend acceptance of a 
compromise to DOJ, if the cost of collection does not justify the 
enforced collection of the full amount of the debt. The amount accepted 
in compromise in such cases may reflect an appropriate discount for the 
administrative and litigative costs of collection, taking into 
consideration the time it will take to effect collection. Costs of 
collection might be a substantial factor in the settlement of small 
claims, but normally will not carry great weight in the settlement of 
large claims. In determining whether the cost of collection justifies 
enforced collection of the full amount, USAID may consider the positive 
effect that enforced collection of the claim could have on the 
collection of other similar claims;
    (e) To assess the merits of a compromise offer, the CFO should

[[Page 11912]]

obtain a current financial statement from the debtor, executed under 
penalty of perjury, that shows the debtor's assets, liabilities, income 
and expense; and
    (f) The CFO may compromise statutory penalties, forfeitures, or 
debts established as an aid to enforcement, and to compel compliance, 
when he or she determines that accepting the offer will serve the 
Agency's enforcement policy adequately, in terms of deterrence and 
securing compliance (both present and future).

Subpart E--Suspension or Termination of Collection Action


Sec.  213.29   [Amended]

0
30. Amend Sec.  213.29 by removing ``penalty charges'' and adding 
``penalties,'' in its place.
0
31. Amend Sec.  213.30 by:
0
a. Revising the section heading;
0
b. In paragraph (c), adding the words ``or her'' after ``his''; and
0
c. Revising paragraphs (d) introductory text and (e).
    The revisions read as follows:


Sec.  213.30   Standards for suspension of collection action.

* * * * *
    (d) The CFO may suspend collection activities on debts of $100,000 
or less during the pendency of a permissive waiver or administrative 
review when there is no statutory requirement and he or she determines 
that:
* * * * *
    (e) The CFO will decline to suspend collection when he or she 
determines that the request for waiver or administrative review is 
frivolous, or that the debtor made it primarily to delay collection.


Sec.  213.31   [Amended]

0
32. Amend Sec.  213.31 in the first sentence by removing the word 
``penalty'' and adding ``penalties,'' in its place.
0
33. Amend Sec.  213.32 by revising the section heading and the 
introductory text to read as follows:


Sec.  213.32   Standards for termination of collection action.

    The CFO may terminate collection action on a debt when he or she 
determines that:
* * * * *
0
34. Revise Sec.  213.34 to read as follows:


Sec.  213.34   Debts discharged in bankruptcy.

    The CFO generally terminates collection activity on a debt 
discharged in bankruptcy, regardless of the amount. USAID may continue 
collection activity, however, subject to the provisions of the 
Bankruptcy Code for any payments provided under a plan of 
reorganization. The CFO will seek legal advice by the Office of the 
USAID General Counsel if he or she believes that any claims or offsets 
might have survived the discharge of a debtor.

Subpart F--Discharge of Indebtedness and Reporting Requirements

0
35. Revise Sec.  213.35 to read as follows:


Sec.  213.35   Discharging indebtedness--general.

    (a) Before discharging a delinquent debt (also referred to as a 
close out of the debt), the CFO must take all appropriate steps to 
collect such debt, including (as applicable), the following:
    (1) Administrative offset;
    (2) Tax-refund offset;
    (3) Offset of Federal salary;
    (4) Referral to private collection contractors;
    (5) Referral to Federal Departments or Agencies that are operating 
a debt-collection center;
    (6) Reporting delinquencies to credit-reporting bureaus;
    (7) Garnishing the wages of a delinquent debtor; and
    (8) Litigation or foreclosure.
    (b) The CFO will make a determination that collection action is no 
longer warranted and request that litigation counsel release any liens 
of record that are securing the debt. Discharge of indebtedness is 
distinct from the termination or suspension of collection activity, and 
the Internal Revenue Code might apply. When the CFO suspends or 
terminates collection action on a debt, the debt remains delinquent, 
and USAID may pursue further collection action at a later date in 
accordance with the standards set forth in this part. When a debt is 
discharged in full or in part, further collection action is prohibited, 
and USAID must terminate debt-collection action.
0
36. Revise Sec.  213.36 to read as follows:


Sec.  213.36   Reporting to Department of the Treasury's Internal 
Revenue Service.

    Upon discharge of indebtedness, USAID must report the discharged 
debt as income to the debtor to the IRS in accordance with the 
requirements of 26 U.S.C. 6050P and 26 CFR 1.6050P-1. USAID may request 
Fiscal Service to file such a discharge debt report to the IRS on the 
Agency's behalf.
0
37. Revise the heading for subpart G to read as follows:

Subpart G--Referrals to the U.S. Department of Justice

0
38. Amend Sec.  213.37 by revising the section heading and paragraph 
(a) to read as follows:


Sec.  213.37   Referrals to the U.S. Department of Justice.

    (a) The CFO, through USAID's cross-servicing agreement with Fiscal 
Service and by direct action, refers to DOJ for litigation all claims 
on which the Federal Government has taken aggressive collection actions 
but which could not be collected, compromised, suspended, or 
terminated. USAID makes such referrals as early as possible, consistent 
with aggressive Agency collection action, and within the period for 
bringing a timely suit against the debtor. Unless otherwise provided by 
DOJ's regulations or procedures, USAID refers for litigation debts of 
more than $2,500 but less than $1 million to DOJ's Nationwide Central 
Intake Facility, as required by the instructions for the Claims-
Collection Litigation Report (CCLR). USAID shall refer debts of more 
than $1 million to the Civil Division at DOJ.
* * * * *
0
39. Revise the heading for subpart H to read as follows:

Subpart H--Mandatory Transfer of Delinquent Debt to U.S. Department 
of the Treasury

0
40. Revise Sec.  213.38 to read as follows:


Sec.  213.38   Mandatory transfer of debts to Department of the 
Treasury's Bureau of the Fiscal Service--general.

    (a) USAID's procedures call for the transfer of legally enforceable 
debt to Fiscal Service 90 days from the date provided on the Agency's 
initial written demand-for-payment notice issued to the debtor. A debt 
is legally enforceable if the Agency has made a final determination 
that the debt, in the amount stated, is due and there are no legal bars 
to collection action. A debt is not considered legally enforceable for 
purposes of mandatory transfer to Fiscal Service if a debt is the 
subject of a pending administrative review process required by statute 
or regulation and collection action during the review process is 
prohibited.
    (b) Except as set forth in paragraph (a) of this section, USAID 
will transfer any debt covered by this part that is more than 120 days 
delinquent to Fiscal Service for debt-collection services. A debt is 
considered 120 days delinquent for purposes of this section if it is 
120 days past due and is legally enforceable.
0
41. Amend Sec.  213.39 by:

[[Page 11913]]

0
a. Revising the introductory text; and
0
b. Adding a period at the end of paragraph (f).
    The revision and addition read as follows:


Sec.  213.39   Exceptions to mandatory transfer.

    USAID is not required to transfer a debt to the Financial 
Management Service (FMS) of the U.S. Department of the Treasury 
pursuant to Sec.  214.37(b) during such period of time that the debt:
* * * * *

Kent Kuyumjian,
Deputy Chief Financial Officer.
[FR Doc. 2021-03385 Filed 2-26-21; 8:45 am]
BILLING CODE 6116-01-P