31 U.S.C. § 3717 — Interest and penalty on claims

Page 316 TITLE 31—MONEY AND FINANCE § 3717 1 So in original. Probably should be ‘‘, judicial, or’’. (f) The Secretary shall, to the extent permitted by law, share with the Secretary of Health and Human Services any information contained in payment certifi- cation records of persons who are delinquent in child support obligations that would assist in the collection of such debts, whether or not an administrative offset is conducted. SEC. 2. Denial of Federal Assistance. (a) The Secretary shall, to the extent permitted by law, ensure that infor- mation concerning individuals whose payments are subject to administrative offset because of delinquent child support obligations is made available to the head of each executive department and agency that provides Federal financial assistance to individuals. (b) In conformance with section 2(e) of this order, the head of each executive department and agency shall, with respect to any individuals whose payments are subject to administrative offset because of a delinquent child support obligation, promptly implement proce- dures to deny Federal financial assistance to such indi- viduals. (c) The Attorney General, in consultation with the Secretary of Health and Human Services and other af- fected agencies, shall promptly issue guidelines for de- partments and agencies concerning minimum due-proc- ess standards to be included in the procedures required by subsection (b) of this section. (d) For purposes of this section, Federal financial as- sistance means any Federal loan (other than a disaster loan), loan guarantee, or loan insurance. (e)(1) A class of Federal financial assistance shall not be subject to denial if the head of the concerned depart- ment or agency determines: (A) in consultation with the Attorney General and the Secretary of Health and Human Services, that such action: (i) is not permitted by law; or (ii) would likely result in valid legal claims for dam- ages against the United States; (B) that such action would be inconsistent with the best interests of the child or children with respect to whom a child support obligation is owed; or (C) that such action should be waived. (2) The head of each executive department and agen- cy shall provide written notification to the Secretary upon determining that the denial of a class of Federal financial assistance is not permitted by law or should be waived. (f) The head of each executive department and agency shall: (1) review all laws under the jurisdiction of the de- partment or agency that do not permit the denial of Federal financial assistance to individuals and whose payments are subject to administrative offset because of a delinquent child support obligation and, where ap- propriate, transmit to the Director of the Office of Management and Budget recommendations for statu- tory changes; and (2) to the extent practicable, review all rules, regula- tions, and procedures implementing laws under the ju- risdiction of the department or agency governing the provision of any Federal financial assistance to individ- uals and, where appropriate, conform such rules, regu- lations, and procedures to the provisions of this order and the rules, regulations, and procedures issued by the Secretary pursuant to section 1 of this order. SEC. 3. Reports. (a) The head of each executive depart- ment and agency shall provide to the Secretary such information as the Secretary may request concerning the implementation of this order, the provisions of the Debt Collection Improvement Act of 1996 applicable to delinquent child support obligations, and the rules, reg- ulations, and procedures issued by the Secretary pursu- ant to section 1 of this order. (b) The Secretary shall report annually to the Presi- dent concerning the implementation by departments and agencies of this order and the provisions of the Debt Collection Improvement Act of 1996 applicable to delinquent child support obligations. SEC. 4. Judicial Review. This order does not create any right or benefit, substantive or procedural, enforceable at law by a party against the United States, its agen- cies, its officers, or any person. WILLIAM J. CLINTON. § 3717. Interest and penalty on claims (a)(1) The head of an executive, judicial, or legislative agency shall charge a minimum an- nual rate of interest on an outstanding debt on a United States Government claim owed by a person that is equal to the average investment rate for the Treasury tax and loan accounts for the 12-month period ending on September 30 of each year, rounded to the nearest whole percent- age point. The Secretary of the Treasury shall publish the rate before November 1 of that year. The rate is effective on the first day of the next calendar quarter. (2) The Secretary may change the rate of in- terest for a calendar quarter if the average in- vestment rate for the 12-month period ending at the close of the prior calendar quarter, rounded to the nearest whole percentage point, is more or less than the existing published rate by 2 per- centage points. (b) Interest under subsection (a) of this section accrues from the date— (1) on which notice is mailed after October 25, 1982, if notice was first mailed before Octo- ber 25, 1982; or (2) notice of the amount due is first mailed to the debtor at the most current address of the debtor available to the head of the execu- tive or 1 legislative agency, if notice is first mailed after October 24, 1982. (c) The rate of interest charged under sub- section (a) of this section— (1) is the rate in effect on the date from which interest begins to accrue under sub- section (b) of this section; and (2) remains fixed at that rate for the dura- tion of the indebtedness. (d) Interest under subsection (a) of this section may not be charged if the amount due on the claim is paid within 30 days after the date from which interest accrues under subsection (b) of this section. The head of an executive, judicial, or legislative agency may extend the 30-day pe- riod. (e) The head of an executive, judicial, or legis- lative agency shall assess on a claim owed by a person— (1) a charge to cover the cost of processing and handling a delinquent claim; and (2) a penalty charge of not more than 6 per- cent a year for failure to pay a part of a debt more than 90 days past due. (f) Interest under subsection (a) of this section does not accrue on a charge assessed under sub- section (e) of this section. (g) This section does not apply— (1) if a statute, regulation required by stat- ute, loan agreement, or contract prohibits charging interest or assessing charges or ex- plicitly fixes the interest or charges; and (2) to a claim under a contract executed be- fore October 25, 1982, that is in effect on Octo- ber 25, 1982. Page 317 TITLE 31—MONEY AND FINANCE § 3718 (h) In conformity with standards prescribed jointly by the Attorney General, the Secretary of the Treasury, and the Comptroller General, the head of an executive, judicial, or legislative agency may prescribe regulations identifying circumstances appropriate to waiving collection of interest and charges under subsections (a) and (e) of this section. A waiver under the regula- tions is deemed to be compliance with this sec- tion. (i)(1) The head of an executive, judicial, or leg- islative agency may increase an administrative claim by the cost of living adjustment in lieu of charging interest and penalties under this sec- tion. Adjustments under this subsection will be computed annually. (2) For the purpose of this subsection— (A) the term ‘‘cost of living adjustment’’ means the percentage by which the Consumer Price Index for the month of June of the cal- endar year preceding the adjustment exceeds the Consumer Price Index for the month of June of the calendar year in which the claim was determined or last adjusted; and (B) the term ‘‘administrative claim’’ in- cludes all debt that is not based on an exten- sion of Government credit through direct loans, loan guarantees, or insurance, including fines, penalties, and overpayments. (Added Pub L. 97–452, § 1(16)(A), Jan. 12, 1983, 96 Stat. 2472; amended Pub. L. 104–134, title III, § 31001(c)(1), (g)(1)(C), (q), Apr. 26, 1996, 110 Stat. 1321–359, 1321–363, 1321–372.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 3717(a) ..... 31 App.:952(e)(1) (1st–3d sentences). July 19, 1966, Pub. L. 89–508, 80 Stat. 308, § 3(e)(1) (1st–3d sentences), (2)–(7); added Oct. 25, 1982, Pub. L. 97–365, § 11, 96 Stat. 1755. 3717(b), (c). 31 App.:952(e)(5). 3717(d) ..... 31 App.:952(e)(6). 3717(e) ..... 31 App.:952(e)(2). 3717(f) ..... 31 App.:952(e)(7). 3717(g)(1) 31 App.:952(e)(3) (1st sentence). 3717(g)(2) 31 App.:952(e)(4). 3717(h) .... 31 App.:952(e)(3) (2d, last sentences). In subsection (a), the words ‘‘percentage point’’ and ‘‘percentage points’’ are substituted for ‘‘per centum’’ for clarity. In subsections (a)(1) and (e), the words ‘‘Except as provided in paragraph (3)’’ are omitted as surplus. In subsection (a)(2), the words ‘‘for a calendar quar- ter’’ are substituted for ‘‘quarterly’’, and the words ‘‘prior calendar quarter’’ are substituted for ‘‘that cal- endar quarter’’, for clarity. In subsection (b), before clause (1), the words ‘‘Sub- ject to paragraph (6)’’ and ‘‘except as provided in sub- paragraph (B)’’ are omitted as surplus. In clause (2), the words ‘‘on the claim’’ are omitted as surplus. The words ‘‘if notice is first mailed after October 24, 1982’’ are added for clarity. In subsection (c), the words ‘‘on a claim’’ are omitted as surplus. In subsection (g)(1), the words ‘‘applicable’’ and ‘‘ei- ther’’ are omitted as surplus. The word ‘‘assessing’’ is added for clarity. The words ‘‘that apply to claims in- volved’’ are omitted as surplus. In subsection (h), the words ‘‘under this section’’ are added for clarity. Editorial Notes AMENDMENTS 1996—Subsec. (a)(1). Pub. L. 104–134, § 31001(c)(1), which directed that this section be amended by substituting ‘‘the head of an executive, judicial, or legislative agen- cy’’ for ‘‘the head of an executive or legislative agency’’ wherever appearing, was executed by substituting ‘‘The head of an executive, judicial, or legislative agency’’ for ‘‘The head of an executive or legislative agency’’, to reflect the probable intent of Congress. Subsecs. (d), (e). Pub. L. 104–134, § 31001(c)(1), which di- rected that this section be amended by substituting ‘‘the head of an executive, judicial, or legislative agen- cy’’ for ‘‘the head of an executive or legislative agency’’ wherever appearing, was executed by substituting ‘‘The head of an executive, judicial, or legislative agency’’ for ‘‘The head of an executive or legislative agency’’, to reflect the probable intent of Congress. Subsec. (h). Pub. L. 104–134, § 31001(c)(1), (g)(1)(C), in- serted ‘‘, the Secretary of the Treasury,’’ after ‘‘Attor- ney General’’ and substituted ‘‘the head of an execu- tive, judicial, or legislative agency’’ for ‘‘the head of an executive or legislative agency’’. Subsec. (i). Pub. L. 104–134, § 31001(q), added subsec. (i). § 3718. Contracts for collection services (a) Under conditions the head of an executive, judicial, or legislative agency considers appro- priate, the head of the agency may enter into a contract with a person for collection service to recover indebtedness owed, or to locate or re- cover assets of, the United States Government. The head of an agency may not enter into a con- tract under the preceding sentence to locate or recover assets of the United States held by a State government or financial institution unless that agency has established procedures approved by the Secretary of the Treasury to identify and recover such assets. The contract shall provide that— (1) the head of the agency retains the au- thority to resolve a dispute, compromise a claim, end collection action, and refer a mat- ter to the Attorney General to bring a civil ac- tion; and (2) the person is subject to— (A) section 552a of title 5, to the extent provided in section 552a(m); and (B) laws and regulations of the United States Government and State governments related to debt collection practices. (b)(1)(A) The Attorney General may make con- tracts retaining private counsel to furnish legal services, including representation in negotia- tion, compromise, settlement, and litigation, in the case of any claim of indebtedness owed the United States. Each such contract shall include such terms and conditions as the Attorney Gen- eral considers necessary and appropriate, includ- ing a provision specifying the amount of the fee to be paid to the private counsel under such con- tract or the method for calculating that fee. The amount of the fee payable for legal services fur- nished under any such contract may not exceed the fee that counsel engaged in the private prac- tice of law in the area or areas where the legal services are furnished typically charge clients for furnishing legal services in the collection of claims of indebtedness, as determined by the At- torney General, considering the amount, age, and nature of the indebtedness and whether the