31 U.S.C. § 3713 — Priority of Government claims

Page 311 TITLE 31—MONEY AND FINANCE § 3713 In subsection (a), the words ‘‘civil action’’ are sub- stituted for ‘‘proceeding in any court’’, ‘‘court pro- ceeding’’, and ‘‘proceeding’’, and the word ‘‘fiscal’’ is substituted for ‘‘financial’’, for consistency in the re- vised title and with other titles of the United States Code. The words ‘‘Except as provided in this sub- section’’ are added for clarity. The words ‘‘or by an agency or official of the United States’’ are omitted as surplus. The words ‘‘the Postmaster General’’ are omit- ted because of section 4(a) of the Postal Reorganization Act (Pub. L. 91–375, 84 Stat. 773). The words ‘‘the Treas- urer and Assistant Treasurers of the United States’’ are omitted because of the source provisions restated in section 321 of the revised title and Department of the Treasury Order 229 of January 14, 1974 (39 F.R. 2280). The word ‘‘official’’ is substituted for ‘‘officers’’ for consistency in the revised title and with other titles of the Code. The words ‘‘of the United States’’, ‘‘to the Treasurer of the United States or other drawee’’, and ‘‘of such check, checks, warrant, or warrants’’ are omitted as surplus. The text of 31:129(last sentence less proviso) is omitted as unnecessary. The last sentence is substituted for 31:129(last sentence proviso) to elimi- nate unnecessary words. In subsection (b), the words ‘‘at any time’’ in 31:131 are omitted as surplus. The words ‘‘the claim is discov- ered’’ are substituted for ‘‘the United States or any agency or official of the United States who is entitled to bring the same shall discover that the United States or any agency or official of the United States had such cause of action’’ to eliminate unnecessary words. The words ‘‘who is liable to any of the actions mentioned in sections 129 to 131 of this title’’ are omitted as surplus. The words ‘‘officer or employee of the Government’’ are substituted for ‘‘United States or any agency or official of the United States’’ before ‘‘entitled’’ for consistency in the revised title and with other titles of the Code. The words ‘‘although such action would be otherwise barred by the provisions of sections 129 to 131 of this title’’ are omitted as surplus. In subsection (c), the words ‘‘of the United States’’ and ‘‘allow . . . in’’ are omitted as surplus. The word ‘‘appropriate’’ is added for clarity. The word ‘‘Treas- ury’’ is substituted for ‘‘Treasurer of the United States’’ before ‘‘for the amount’’ because of the source provisions restated in section 321 of the revised title and Department of the Treasury Order 229 of January 14, 1974 (39 F.R. 2280). The words ‘‘cannot be brought be- cause notice was not given within the time required under this subsection’’ are substituted for ‘‘shall have been barred pursuant to the provisions of sections 129 to 131 of this title upon a showing that the barring of such proceedings . . . required by the provision of sec- tion 129 of this title’’ for clarity. The word ‘‘Secretary’’ is substituted for ‘‘Treasurer of the United States’’ be- fore ‘‘in failing’’ because of the source provisions re- stated in section 321 of the revised title and Depart- ment of the Treasury Order 229 of January 14, 1974. In subsection (d), the words ‘‘arising from dual pay’’ are substituted for ‘‘arising out of the receipt by such person of compensation . . . in violation of any provi- sion of law prohibiting or restricting the receipt of dual compensation’’ to eliminate unnecessary words and for consistency in the revised title and with other titles of the Code. The words ‘‘including Government owned or controlled corporations’’ are omitted as unnecessary. The words ‘‘or from the government of the District of Columbia’’ are omitted because of sections 102(a), 448, 449, and 761 of the District of Columbia Self-Govern- ment and Governmental Reorganization Act (Pub. L. 93–198, 87 Stat. 777, 801, 836). Editorial Notes AMENDMENTS 1996—Subsec. (e). Pub. L. 104–134 added subsec. (e). 1987—Subsec. (a). Pub. L. 100–86 amended subsec. (a) generally. Prior to amendment, subsec. (a) read as fol- lows: ‘‘Except as provided in this subsection, the United States Government must bring a civil action to enforce the liability of an endorser, transferor, deposi- tary, or fiscal agent on a forged or unauthorized signa- ture or endorsement on, or a change in, a check or war- rant issued by the Secretary of the Treasury, the United States Postal Service, or a disbursing official or agent within 6 years after the check or warrant is pre- sented to the drawee of the check or warrant for pay- ment unless, within that period, written notice of the claim is given to the endorser, transferor, depositary, or fiscal agent. The period for bringing a civil action or giving notice is extended for 180 days if a claim is re- ceived under section 3702(c) of this title.’’ Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1987 AMENDMENT Amendment by Pub. L. 100–86 effective 6 months after Aug. 10, 1987, or on such later date as the Secretary of the Treasury may prescribe in regulations, see section 1006 of Pub. L. 100–86, set out as a note under section 3328 of this title. REGULATIONS For provision permitting Secretary of the Treasury to prescribe rules, regulations, and procedures as nec- essary to implement amendment by section 1004(a) of Pub. L. 100–86, including recertification of Treasury checks which have been canceled or for which a claim has been asserted or barred, see section 1005 of Pub. L. 100–86, set out as a note under section 3328 of this title. § 3713. Priority of Government claims (a)(1) A claim of the United States Govern- ment shall be paid first when— (A) a person indebted to the Government is insolvent and— (i) the debtor without enough property to pay all debts makes a voluntary assignment of property; (ii) property of the debtor, if absent, is at- tached; or (iii) an act of bankruptcy is committed; or (B) the estate of a deceased debtor, in the custody of the executor or administrator, is not enough to pay all debts of the debtor. (2) This subsection does not apply to a case under title 11. (b) A representative of a person or an estate (except a trustee acting under title 11) paying any part of a debt of the person or estate before paying a claim of the Government is liable to the extent of the payment for unpaid claims of the Government. (Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 972.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3713(a) ..... 31:191. R.S. § 3466; Nov. 6, 1978, Pub. L. 95–598, § 322(a), 92 Stat. 2678. 3713(b) ..... 31:192. R.S. § 3467; restated May 10, 1934, ch. 277, § 518(a), 48 Stat. 760; Nov. 6, 1978, Pub. L. 95–598, § 322(b), 92 Stat. 2679. In the section, the word ‘‘claim’’ is substituted for ‘‘debts’’ for consistency. The word ‘‘due’’ is omitted as unnecessary. In subsection (a)(1), before clause (A), the word ‘‘paid’’ is substituted for ‘‘satisfied’’ for consistency. In clause (A)(i), the words ‘‘and the priority established shall extend as well to cases in which’’ are omitted be- cause of the restatement. In clause (A)(ii), the word Page 312 TITLE 31—MONEY AND FINANCE § 3714 ‘‘property’’ is substituted for ‘‘estate and effects’’ to eliminate unnecessary words. The words ‘‘absconding, concealed, or’’ and ‘‘by process of law’’ are omitted as surplus. In subsection (a)(2), the words ‘‘The priority estab- lished under . . . however’’ are omitted as surplus. In subsection (b), the words ‘‘A representative of a person or an estate’’ are substituted for ‘‘executor, ad- ministrator, or assignee, or other’’ for clarity and to eliminate unnecessary words. The words ‘‘for whom or for which he acts’’, ‘‘satisfies and’’, and ‘‘from such per- son or estate’’ are omitted as surplus. The word ‘‘lia- ble’’ is substituted for ‘‘answerable in his own person and estate’’ for consistency. § 3714. Keeping money due States in default The Secretary of the Treasury shall keep the necessary amount of money the United States Government owes a State when the State de- faults in paying principal or interest on invest- ments in stocks or bonds the State issues or guarantees and that the Government holds in trust. The money shall be used to pay the prin- cipal or interest or reimburse, with interest, money the Government advanced for interest due on the stocks or bonds. (Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 972.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3714 ......... 31:207. R.S. § 3481. The word ‘‘amount’’ is substituted for ‘‘whole, or so much thereof’’ for clarity. The word ‘‘owes’’ is sub- stituted for ‘‘due on any account from the . . . to’’ to eliminate unnecessary words. The words ‘‘or either’’ and ‘‘thereon’’ are omitted as surplus. § 3715. Buying real property of a debtor The head of an agency for whom a civil action is brought against a debtor of the United States Government may buy real property of the debtor at a sale on execution of the real property of the debtor resulting from the action. The head of the agency may not bid more for the property than the amount of the judgment for which the property is being sold, and costs. The marshal of the district in which the sale is held shall trans- fer the property to the Government. (Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 972.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3715 ......... 31:195. R.S. § 3470; June 2, 1965, Pub. L. 89–30, § 5, 79 Stat. 119. The words ‘‘by such agent as . . . shall appoint’’ are omitted as unnecessary. The word ‘‘agency’’ is sub- stituted for ‘‘department or independent agency’’ be- cause of the restatement. The words ‘‘for whom a civil action is brought’’ are substituted for ‘‘at whose in- stance suit was instituted’’ for consistency. The words ‘‘real property’’ are substituted for ‘‘lands or tene- ments’’ for clarity and consistency. The words ‘‘in be- half of the United States’’ are omitted as surplus. The words ‘‘for the property’’ are added for clarity. The word ‘‘property’’ is substituted for ‘‘such estate’’ for consistency in the section. The words ‘‘Whenever such purchase is made’’ are omitted as surplus. The words ‘‘transfer the property’’ are substituted for ‘‘make all needful conveyances, assignments, or transfers’’ to eliminate unnecessary words and for clarity. § 3716. Administrative offset (a) After trying to collect a claim from a per- son under section 3711(a) of this title, the head of an executive, judicial, or legislative agency may collect the claim by administrative offset. The head of the agency may collect by adminis- trative offset only after giving the debtor— (1) written notice of the type and amount of the claim, the intention of the head of the agency to collect the claim by administrative offset, and an explanation of the rights of the debtor under this section; (2) an opportunity to inspect and copy the records of the agency related to the claim; (3) an opportunity for a review within the agency of the decision of the agency related to the claim; and (4) an opportunity to make a written agree- ment with the head of the agency to repay the amount of the claim. (b) Before collecting a claim by administrative offset, the head of an executive, judicial, or leg- islative agency must either— (1) adopt, without change, regulations on collecting by administrative offset promul- gated by the Department of Justice, the Gov- ernment Accountability Office, or the Depart- ment of the Treasury; or (2) prescribe regulations on collecting by ad- ministrative offset consistent with the regula- tions referred to in paragraph (1). (c)(1)(A) Except as otherwise provided in this subsection, a disbursing official of the Depart- ment of the Treasury, the Department of De- fense, the United States Postal Service, the De- partment of Health and Human Services, or any other government corporation, or any disbursing official of the United States designated by the Secretary of the Treasury, shall offset at least annually the amount of a payment which a pay- ment certifying agency has certified to the dis- bursing official for disbursement, by an amount equal to the amount of a claim which a creditor agency has certified to the Secretary of the Treasury pursuant to this subsection. (B) An agency that designates disbursing offi- cials pursuant to section 3321(c) of this title is not required to certify claims arising out of its operations to the Secretary of the Treasury be- fore such agency’s disbursing officials offset such claims. (C) Payments certified by the Department of Education under a program administered by the Secretary of Education under title IV of the Higher Education Act of 1965 shall not be subject to administrative offset under this subsection. (2) Neither the disbursing official nor the pay- ment certifying agency shall be liable— (A) for the amount of the administrative off- set on the basis that the underlying obliga- tion, represented by the payment before the administrative offset was taken, was not satis- fied; or (B) for failure to provide timely notice under paragraph (8). (3)(A)(i) Notwithstanding any other provision of law (including sections 207 and 1631(d)(1) of the Social Security Act (42 U.S.C. 407 and 1383(d)(1)), section 413(b) of Public Law 91–173 (30