§ 3711. — Collection and compromise.
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From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 7, 2003]
[Document not affected by Public Laws enacted between
January 7, 2003 and December 19, 2003]
[CITE: 31USC3711]
TITLE 31--MONEY AND FINANCE
SUBTITLE III--FINANCIAL MANAGEMENT
CHAPTER 37--CLAIMS
SUBCHAPTER II--CLAIMS OF THE UNITED STATES GOVERNMENT
Sec. 3711. Collection and compromise
(a) The head of an executive, judicial, or legislative agency--
(1) shall try to collect a claim of the United States Government
for money or property arising out of the activities of, or referred
to, the agency;
(2) may compromise a claim of the Government of not more than
$100,000 (excluding interest) or such higher amount as the Attorney
General may from time to time prescribe that has not been referred
to another executive or legislative agency for further collection
action, except that only the Comptroller General may compromise a
claim arising out of an exception the Comptroller General makes in
the account of an accountable official; and
(3) may suspend or end collection action on a claim referred to
in clause (2) of this subsection when it appears that no person
liable on the claim has the present or prospective ability to pay a
significant amount of the claim or the cost of collecting the claim
is likely to be more than the amount recovered.
(b)(1) The head of an executive, judicial, or legislative agency may
not act under subsection (a)(2) or (3) of this section on a claim that
appears to be fraudulent, false, or misrepresented by a party with an
interest in the claim, or that is based on conduct in violation of the
antitrust laws.
(2) The Secretary of Transportation may not compromise for less than
$500 a penalty under section 21302 of title 49 for a violation of
chapter 203, 205, or 207 of title 49 or a regulation or requirement
prescribed or order issued under any of those chapters.
(c) A compromise under this section is final and conclusive unless
gotten by fraud, misrepresentation, presenting a false claim, or mutual
mistake of fact. An accountable official is not liable for an amount
paid or for the value of property lost or damaged if the amount or value
is not recovered because of a compromise under this section.
(d) The head of an executive, judicial, or legislative agency acts
under--
(1) regulations prescribed by the head of the agency; and
(2) standards that the Attorney General, the Secretary of the
Treasury, may prescribe.\1\
---------------------------------------------------------------------------
\1\ So in original. Probably should be ``Attorney General and the
Secretary of the Treasury may prescribe jointly.''
(e)(1) When trying to collect a claim of the Government under a law
except the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.), the head
of an executive, judicial, or legislative agency shall disclose to a
consumer reporting agency information from a system of records that a
person is responsible for a claim if--
(A) notice required by section 552a(e)(4) of title 5 indicates
that information in the system may be disclosed to a consumer
reporting agency;
(B) the head of the agency has reviewed the claim and decided
that the claim is valid and overdue;
(C) the head of the agency has notified the person in writing--
(i) that payment of the claim is overdue;
(ii) that, within not less than 60 days after sending the
notice, the head of the agency intends to disclose to a consumer
reporting agency that the person is responsible for the claim;
(iii) of the specific information to be disclosed to the
consumer reporting agency; and
(iv) of the rights the person has to a complete explanation
of the claim, to dispute information in the records of the
agency about the claim, and to administrative repeal or review
of the claim;
(D) the person has not--
(i) repaid or agreed to repay the claim under a written
repayment plan that the person has signed and the head of the
agency has agreed to; or
(ii) filed for review of the claim under paragraph (2) of
this subsection;
(E) the head of the agency has established procedures to--
(i) disclose promptly, to each consumer reporting agency to
which the original disclosure was made, a substantial change in
the condition or amount of the claim;
(ii) verify or correct promptly information about the claim
on request of a consumer reporting agency for verification of
information disclosed; and
(iii) get satisfactory assurances from each consumer
reporting agency that the agency is complying with all laws of
the United States related to providing consumer credit
information; and
(F) the information disclosed to the consumer reporting agency
is limited to--
(i) information necessary to establish the identity of the
person, including name, address, and taxpayer identification
number;
(ii) the amount, status, and history of the claim; and
(iii) the agency or program under which the claim arose.
(2) Before disclosing information to a consumer reporting agency
under paragraph (1) of this subsection and at other times allowed by
law, the head of an executive, judicial, or legislative agency shall
provide, on request of a person alleged by the agency to be responsible
for the claim, for a review of the obligation of the person, including
an opportunity for reconsideration of the initial decision on the claim.
(3) Before disclosing information to a consumer reporting agency
under paragraph (1) of this subsection, the head of an executive,
judicial, or legislative agency shall take reasonable action to locate a
person for whom the head of the agency does not have a current address
to send the notice under paragraph (1)(C).
(4) The head of each executive agency shall require, as a condition
for insuring or guaranteeing any loan, financing, or other extension of
credit under any law to a person, that the lender provide information
relating to the extension of credit to consumer reporting agencies or
commercial reporting agencies, as appropriate.
(5) The head of each executive agency may provide to a consumer
reporting agency or commercial reporting agency information from a
system of records that a person is responsible for a claim which is
current, if notice required by section 552a(e)(4) of title 5 indicates
that information in the system may be disclosed to a consumer reporting
agency or commercial reporting agency, respectively.
(f)(1) The Secretary of Defense may suspend or terminate an action
by the Secretary or by the Secretary of a military department under
subsection (a) to collect a claim against the estate of a person who
died while serving on active duty as a member of the Army, Navy, Air
Force, Marine Corps, or Coast Guard during a period when the Coast Guard
is operating as a service in the Navy if the Secretary determines that,
under the circumstances applicable with respect to the deceased person,
it is appropriate to do so.
(2) The Secretary of Transportation may suspend or terminate an
action by the Secretary under subsection (a) to collect a claim against
the estate of a person who died while serving on active duty as a member
of the Coast Guard if the Secretary determines that, under the
circumstances applicable with respect to the deceased person, it is
appropriate to do so.
(3) In this subsection, the term ``active duty'' has the meaning
given that term in section 101 of title 10.
(g)(1) If a nontax debt or claim owed to the United States has been
delinquent for a period of 180 days--
(A) the head of the executive, judicial, or legislative agency
that administers the program that gave rise to the debt or claim
shall transfer the debt or claim to the Secretary of the Treasury;
and
(B) upon such transfer the Secretary of the Treasury shall take
appropriate action to collect or terminate collection actions on the
debt or claim.
(2) Paragraph (1) shall not apply--
(A) to any debt or claim that--
(i) is in litigation or foreclosure;
(ii) will be disposed of under an asset sales program within
1 year after becoming eligible for sale, or later than 1 year if
consistent with an asset sales program and a schedule
established by the agency and approved by the Director of the
Office of Management and Budget;
(iii) has been referred to a private collection contractor
for collection for a period of time determined by the Secretary
of the Treasury;
(iv) has been referred by, or with the consent of, the
Secretary of the Treasury to a debt collection center for a
period of time determined by the Secretary of the Treasury; or
(v) will be collected under internal offset, if such offset
is sufficient to collect the claim within 3 years after the date
the debt or claim is first delinquent; and
(B) to any other specific class of debt or claim, as determined
by the Secretary of the Treasury at the request of the head of an
executive, judicial, or legislative agency or otherwise.
(3) For purposes of this section, the Secretary of the Treasury may
designate, and withdraw such designation of debt collection centers
operated by other Federal agencies. The Secretary of the Treasury shall
designate such centers on the basis of their performance in collecting
delinquent claims owed to the Government.
(4) At the discretion of the Secretary of the Treasury, referral of
a nontax claim may be made to--
(A) any executive department or agency operating a debt
collection center for servicing, collection, compromise, or
suspension or termination of collection action;
(B) a private collection contractor operating under a contract
for servicing or collection action; or
(C) the Department of Justice for litigation.
(5) Nontax claims referred or transferred under this section shall
be serviced, collected, or compromised, or collection action thereon
suspended or terminated, in accordance with otherwise applicable
statutory requirements and authorities. Executive departments and
agencies operating debt collection centers may enter into agreements
with the Secretary of the Treasury to carry out the purposes of this
subsection. The Secretary of the Treasury shall--
(A) maintain competition in carrying out this subsection;
(B) maximize collections of delinquent debts by placing
delinquent debts quickly;
(C) maintain a schedule of private collection contractors and
debt collection centers eligible for referral of claims; and
(D) refer delinquent debts to the person most appropriate to
collect the type or amount of claim involved.
(6) Any agency operating a debt collection center to which nontax
claims are referred or transferred under this subsection may charge a
fee sufficient to cover the full cost of implementing this subsection.
The agency transferring or referring the nontax claim shall be charged
the fee, and the agency charging the fee shall collect such fee by
retaining the amount of the fee from amounts collected pursuant to this
subsection. Agencies may agree to pay through a different method, or to
fund an activity from another account or from revenue received from the
procedure described under section 3720C of this title. Amounts charged
under this subsection concerning delinquent claims may be considered as
costs pursuant to section 3717(e) of this title.
(7) Notwithstanding any other law concerning the depositing and
collection of Federal payments, including section 3302(b) of this title,
agencies collecting fees may retain the fees from amounts collected. Any
fee charged pursuant to this subsection shall be deposited into an
account to be determined by the executive department or agency operating
the debt collection center charging the fee (in this subsection referred
to in this section \2\ as the ``Account''). Amounts deposited in the
Account shall be available until expended to cover costs associated with
the implementation and operation of Governmentwide debt collection
activities. Costs properly chargeable to the Account include--
---------------------------------------------------------------------------
\2\ So in original.
---------------------------------------------------------------------------
(A) the costs of computer hardware and software, word processing
and telecommunications equipment, and other equipment, supplies, and
furniture;
(B) personnel training and travel costs;
(C) other personnel and administrative costs;
(D) the costs of any contract for identification, billing, or
collection services; and
(E) reasonable costs incurred by the Secretary of the Treasury,
including services and utilities provided by the Secretary, and
administration of the Account.
(8) Not later than January 1 of each year, there shall be deposited
into the Treasury as miscellaneous receipts an amount equal to the
amount of unobligated balances remaining in the Account at the close of
business on September 30 of the preceding year, minus any part of such
balance that the executive department or agency operating the debt
collection center determines is necessary to cover or defray the costs
under this subsection for the fiscal year in which the deposit is made.
(9) Before discharging any delinquent debt owed to any executive,
judicial, or legislative agency, the head of such agency shall take all
appropriate steps to collect such debt, including (as applicable)--
(A) administrative offset,
(B) tax refund offset,
(C) Federal salary offset,
(D) referral to private collection contractors,
(E) referral to agencies operating a debt collection center,
(F) reporting delinquencies to credit reporting bureaus,
(G) garnishing the wages of delinquent debtors, and
(H) litigation or foreclosure.
(10) To carry out the purposes of this subsection, the Secretary of
the Treasury may prescribe such rules, regulations, and procedures as
the Secretary considers necessary and transfer such funds from funds
appropriated to the Department of the Treasury as may be necessary to
meet existing liabilities and obligations incurred prior to the receipt
of revenues that result from debt collections.
(h)(1) The head of an executive, judicial, or legislative agency
acting under subsection (a)(1), (2), or (3) of this section to collect a
claim, compromise a claim, or terminate collection action on a claim may
obtain a consumer report (as that term is defined in section 603 of the
Fair Credit Reporting Act (15 U.S.C. 1681a)) or comparable credit
information on any person who is liable for the claim.
(2) The obtaining of a consumer report under this subsection is
deemed to be a circumstance or purpose authorized or listed under
section 604 of the Fair Credit Reporting Act (15 U.S.C. 1681b).
(i)(1) The head of an executive, judicial, or legislative agency may
sell, subject to section 504(b) of the Federal Credit Reform Act of 1990
and using competitive procedures, any nontax debt owed to the United
States that is delinquent for more than 90 days. Appropriate fees
charged by a contractor to assist in the conduct of a sale under this
subsection may be payable from the proceeds of the sale.
(2) After terminating collection action, the head of an executive,
judicial, or legislative agency shall sell, using competitive
procedures, any nontax debt or class of nontax debts owed to the United
States, if the Secretary of the Treasury determines the sale is in the
best interests of the United States.
(3) Sales of nontax debt under this subsection--
(A) shall be for--
(i) cash, or
(ii) cash and a residuary equity or profit participation, if
the head of the agency reasonably determines that the proceeds
will be greater than sale solely for cash,
(B) shall be without recourse, but may include the use of
guarantees if otherwise authorized, and
(C) shall transfer to the purchaser all rights of the Government
to demand payment of the nontax debt, other than with respect to a
residuary equity or profit participation under subparagraph (A)(ii).
(4)(A) Within one year after the date of enactment of the Debt
Collection Improvement Act of 1996, each executive agency with current
and delinquent collateralized nontax debts shall report to the Congress
on the valuation of its existing portfolio of loans, notes and
guarantees, and other collateralized debts based on standards developed
by the Director of the Office of Management and Budget, in consultation
with the Secretary of the Treasury.
(B) The Director of the Office of Management and Budget shall
determine what information is required to be reported to comply with
subparagraph (A). At a minimum, for each financing account and for each
liquidating account (as those terms are defined in sections 502(7) and
502(8), respectively, of the Federal Credit Reform Act of 1990) the
following information shall be reported:
(i) The cumulative balance of current debts outstanding, the
estimated net present value of such debts, the annual administrative
expenses of those debts (including the portion of salaries and
expenses that are directly related thereto), and the estimated net
proceeds that would be received by the Government if such debts were
sold.
(ii) The cumulative balance of delinquent debts, debts
outstanding, the estimated net present value of such debts, the
annual administrative expenses of those debts (including the portion
of salaries and expenses that are directly related thereto), and the
estimated net proceeds that would be received by the Government if
such debts were sold.
(iii) The cumulative balance of guaranteed loans outstanding,
the estimated net present value of such guarantees, the annual
administrative expenses of such guarantees (including the portion of
salaries and expenses that are directly related to such guaranteed
loans), and the estimated net proceeds that would be received by the
Government if such loan guarantees were sold.
(iv) The cumulative balance of defaulted loans that were
previously guaranteed and have resulted in loans receivables, the
estimated net present value of such loan assets, the annual
administrative expenses of such loan assets (including the portion
of salaries and expenses that are directly related to such loan
assets), and the estimated net proceeds that would be received by
the Government if such loan assets were sold.
(v) The marketability of all debts.
(5) This subsection is not intended to limit existing statutory
authority of agencies to sell loans, debts, or other assets.
(Pub. L. 97-258, Sept. 13, 1982, 96 Stat. 971; Pub. L. 97-452,
Sec. 1(15), Jan. 12, 1983, 96 Stat. 2470; Pub. L. 98-216, Sec. 1(5),
Feb. 14, 1984, 98 Stat. 4; Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100
Stat. 2095; Pub. L. 101-552, Sec. 8(b), Nov. 15, 1990, 104 Stat. 2746;
Pub. L. 102-365, Sec. 4(a)(4), Sept. 3, 1992, 106 Stat. 973; Pub. L.
103-272, Sec. 5(i)(1), July 5, 1994, 108 Stat. 1375; Pub. L. 104-106,
div. A, title X, Sec. 1089, Feb. 10, 1996, 110 Stat. 459; Pub. L. 104-
134, title III, Sec. 31001(c)(1), (g)(1)(C), (k), (m)(1), (p), Apr. 26,
1996, 110 Stat. 1321-359, 1321-363, 1321-365, 1321-366, 1321-371; Pub.
L. 104-201, div. A, title X, Sec. 1010, Sept. 23, 1996, 110 Stat. 2635;
Pub. L. 104-316, title I, Sec. 115(g)(1), Oct. 19, 1996, 110 Stat.
3834.)
Historical and Revision Notes
1982 Act
----------------------------------------------------------------------------------------------------------------
Revised Section Source (U.S. Code) Source (Statutes at Large)
----------------------------------------------------------------------------------------------------------------
3711(a).............................. 31:952(a)(less words between July 19, 1966, Pub. L. 89-508, Sec. 3,
1st and 2d commas), (b)(1st 80 Stat. 309.
sentence less words between
6th and 7th commas).
3711(b).............................. 31:952(b)(2d sentence, last
sentence words after
semicolon).
3711(c)(1)........................... 31:952(b)(last sentence words
before semicolon).
3711(c)(2)........................... 31:952(note). July 8, 1976, Pub. L. 94-348, Sec. 3(e),
90 Stat. 818.
3711(d).............................. 31:952(c).
3711(e).............................. 31:952(a)(words between 1st
and 2d commas), (b)(1st
sentence words between 6th
and 7th commas).
----------------------------------------------------------------------------------------------------------------
In the section, the words ``executive or legislative agency'' are
substituted for ``agency'' because of the restatement. The words ``or
his designee'' are omitted as unnecessary.
In subsection (a), the word ``Government'' is added for consistency.
In clause (2), the words ``including the General Accounting Office'' are
omitted as surplus. In clause (3), the word ``financial'' is omitted as
surplus.
In subsections (b) and (d), the word ``official'' is substituted for
``officer'' for consistency.
In subsection (b), the words ``Comptroller General'' are substituted
for ``General Accounting Office'' for consistency. The words ``has the
same authority that the head of the agency has'' are substituted for
``have the foregoing authority'' for clarity. The words ``by another
agency'' are omitted as surplus. The words ``only . . . may compromise''
are substituted for ``nor shall the head of an agency, other than . . .
have authority to compromise'' to eliminate unnecessary words.
In subsection (c)(1), the words ``that appears to be fraudulent,
false, or misrepresented by'' are substituted for ``as to which there is
an indication of fraud, the presentation of a false claim, or
misrepresentation on the part of'' to eliminate unnecessary words. The
words ``the debtor or . . . other'' and ``in whole or in part'' are
omitted as surplus.
In subsection (c)(2), the words ``Notwithstanding any provision of
the Federal Claims Collection Act of 1966'' are omitted as unnecessary.
The words ``arising'' and ``an amount'' are omitted as surplus.
In subsection (d), the words ``effected . . . authority conferred
by'', ``on the debtor and on all officials, agencies, and courts of the
United States'', ``destroyed'', and ``with a person primarily
responsible'' are omitted as surplus.
In subsection (e), the words ``in conformity with'' are omitted as
surplus.
1983 Act
----------------------------------------------------------------------------------------------------------------
Revised Section Source (U.S. Code) Source (Statutes at Large)
----------------------------------------------------------------------------------------------------------------
3711(f)(1)........................... 31 App.:952(d)(1). July 19, 1966, Pub. L. 89-508, 80 Stat.
308, Sec. 3(d)(1)-(3); added Oct. 25,
1982, Pub. L. 97-365, Sec. 3, 96 Stat.
1749.
3711(f)(2)........................... 31 App.:952(d)(2).
3711(f)(3)........................... 31 App.:952(d)(3).
----------------------------------------------------------------------------------------------------------------
In subsection (f)(1), before clause (A), the word ``Government'' is
substituted for ``United States'' for consistency in the revised title
and with other titles of the United States Code. The words ``subsection
(a) of this section, or under any other'' are omitted as surplus. The
word ``law'' is substituted for ``statutory authority'' to eliminate
unnecessary words. In clause (A), the words ``for the system of
records'' are omitted as surplus. In clause (C)(iii), the word
``intended'' is omitted as surplus. In clause (E)(ii), the words ``as
appropriate'' and ``any or all'' are omitted as surplus. In clause
(E)(iii), the words ``all laws of the United States'' are coextensive
with and substituted for ``the Fair Credit Reporting Act (15 U.S.C. 1681
et seq.) and any other Federal law''.
1984 Act
This is necessary to reflect the transfer of the non-positive law
provisions of title 49 to title 49 appendix.
References in Text
Sections 502(7), 502(8), and 504(b) of the Federal Credit Reform Act
of 1990, referred to in subsec. (i)(1), (4)(B), are classified to
sections 661a(7), 661a(8), and 661c(b), respectively, of Title 2, The
Congress.
The date of enactment of the Debt Collection Improvement Act of
1996, referred to in subsec. (i)(4)(A), is the date of enactment of
section 31001 of Pub. L. 104-134, which was approved Apr. 26, 1996.
Amendments
1996--Subsec. (a). Pub. L. 104-134, Sec. 31001(c)(1), which directed
that this section be amended by substituting ``the head of an executive,
judicial, or legislative agency'' for ``the head of an executive or
legislative agency'' wherever appearing, was executed in introductory
provisions 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. (a)(2). Pub. L. 104-316, Sec. 115(g)(1)(A), inserted ``,
except that only the Comptroller General may compromise a claim arising
out of an exception the Comptroller General makes in the account of an
accountable official'' before ``; and'' at end.
Subsec. (b). Pub. L. 104-316, Sec. 115(g)(1)(B), (C), redesignated
subsec. (c) as (b) and struck out former subsec. (b) which read as
follows: ``The Comptroller General has the same authority that the head
of the agency has under subsection (a) of this section when the claim is
referred to the Comptroller General for further collection action. Only
the Comptroller General may compromise a claim arising out of an
exception the Comptroller General makes in the account of an accountable
official.''
Subsec. (c). Pub. L. 104-316, Sec. 115(g)(1)(C), redesignated
subsec. (d) as (c). Former subsec. (c) redesignated (b).
Subsec. (c)(1). Pub. L. 104-134, Sec. 31001(c)(1), which directed
that this section be amended by substituting ``the head of an executive,
judicial, or legislative agency'' 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. (d). Pub. L. 104-316, Sec. 115(g)(1)(C), (D), redesignated
subsec. (e) as (d) and in par. (2) struck out ``and the Comptroller
General'' before ``may prescribe'' and ``jointly'' after ``prescribe''.
Former subsec. (d) redesignated (c).
Subsec. (e). Pub. L. 104-316, Sec. 115(g)(1)(C), redesignated
subsec. (f) as (e). Former subsec. (e) redesignated (d).
Pub. L. 104-134, Sec. 31001(c)(1), which directed that this section
be amended by substituting ``the head of an executive, judicial, or
legislative agency'' for ``the head of an executive or legislative
agency'' wherever appearing, was executed in introductory provisions 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. (e)(2). Pub. L. 104-134, Sec. 31001(g)(1)(C), inserted ``,
the Secretary of the Treasury,'' after ``Attorney General''.
Subsec. (f). Pub. L. 104-316, Sec. 115(g)(1)(C), redesignated the
subsec. (g), relating to authority to suspend or terminate collection
actions against deceased members, as (f). Former subsec. (f)
redesignated (e).
Subsec. (f)(1). Pub. L. 104-134, Sec. 31001(c)(1), (k)(1), (2), in
introductory provisions substituted ``the head of an executive,
judicial, or legislative agency shall'' for ``the head of an executive
or legislative agency may'' and ``a person'' for ``an individual''.
Subsec. (f)(1)(C), (D), (F). Pub. L. 104-13