[Code of Federal Regulations]
[Title 49, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 49CFR89.21]

[Page 716-717]
 
                        TITLE 49--TRANSPORTATION
 
          Subtitle A--Office of the Secretary of Transportation
 
PART 89_IMPLEMENTATION OF THE FEDERAL CLAIMS COLLECTION ACT--Table of Contents
 
                     Subpart B_Collection of Claims
 
Sec.  89.21  Administrative collection.


    Except as provided differently by the DOT operating elements 
pursuant to Sec.  89.3:
    (a) DOT shall send a debtor a total of three progressively stronger 
written demands at not more than 30-day intervals, unless a response to 
the first or second demand indicates that a further demand would be 
futile or the debtor's response does not require rebuttal, or other 
pertinent information indicates that additional written demands would be 
unnecessary.
    (b) The initial written demand for payment (and the notice of offset 
under Sec.  89.25) shall inform the debtor of:
    (1) The basis for the indebtedness and the debtor's right to obtain 
review (see Sec.  89.21(f) for details on review).
    (2) The amount of the claim;
    (3) That domestic and overseas payment in excess of ten thousand 
dollars or more shall be made by wire transfer through the Federal 
Reserve communications, commonly known as Fedwire, to the account of the 
U.S. Treasury in accordance with the instructions provided in the demand 
letter; payments originating in foreign countries shall be made by wire 
transfer to the extent practicable.
    (4) The delinquency date, or the date by which payment is to be made 
(30 days from the date of mailing or hand delivery of the initial demand 
letter);
    (5) The standard for interest, penalties, and administrative charges 
in accordance with 31 U.S.C. 3717, if payment is not received by the due 
date (see Sec.  89.23 for details regarding interest, collection 
charges, and late payment penalty charges);
    (6) Where a notice of offset is concerned, the right to make 
voluntary payment before collection by offset begins (see Sec.  89.25).
    (7) The possible reporting of the claim to commercial credit bureaus 
and consumer reporting agencies; however a notice of offset should not 
include this warning.
    (8) The possibility that DOT will forward the claim to a collection 
agency, the General Accounting Office, the Department of Justice, or 
private counsel

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contracting with the Department of Justice for collection; however a 
notice of offset should not include this warning.
    (c) If the debtor fails to respond to the demands for payment by the 
due date specified in the notice, the Department may take further action 
under this part or the FCCS under 4 CFR parts 101 through 105, pursuant 
to 31 U.S.C. 3701-3720A. These actions may include reports to commercial 
credit bureaus, consumer reporting agencies, contracts with commercial 
collection agencies, revocation of licenses, or the use of 
administrative offset, as authorized in 31 U.S.C. 3701-3720A.
    (d) DOT may collect by administrative offset, (see Sec.  89.25, 
Collection by administrative offset), if the debtor:
    (1) Has not made payment by the payment due date;
    (2) Has not requested a review of the claim within the agency as set 
out in paragraph (f) of this section; or
    (3) Has not made an arrangement for payment by the payment due date;
    (e) Except for information that may properly be withheld under 49 
CFR part 7, the debtor may inspect and copy the records of the agency 
related to the claim. Any reasonable costs associated with the copying 
and inspection of the records shall be borne by the debtor. (Payment of 
cost is governed by 49 CFR part 7, subpart I.) The debtor shall give 
reasonable notice in advance to the agency of the date on which it 
intends to inspect and copy the records involved;
    (f)(1) Except for debts established by settlement agreement, court 
order or judgment, or final administrative decision, the debtor may 
request review of the validity or amount of a claim. To do so, the 
debtor shall make a request in writing for review of the claim prior to 
it becoming delinquent. (See 4 CFR 101.2 for definition of when a debt 
is considered delinquent.) The debtor's written response shall state the 
basis for the dispute, and provide all factual information, documents, 
citation to authority, argument and any other matters to be considered. 
If only part of the claim is disputed, the undisputed portion shall be 
paid by the delinquency date stated in the initial demand. During the 
period that the claim is being reviewed, the amount of the debt is owed, 
but the accrual of interest and accrual of time to delinquency may be 
suspended on the disputed portion of the debt.
    (2) Review of claims shall be based upon the written record unless 
an oral hearing is required by 4 CFR 102.3(c). Upon completion of 
review, within 30 days whenever feasible, the Department shall advise 
the debtor whether the debt has been found to be valid in any amount, or 
that collection will be terminated. If the claim is found to be valid in 
any amount, the accrual of interest and time to delinquency shall 
commence 15 days after mailing of the notification of the review 
results. The notification of the review may also include notice of a 
specific collection action to be undertaken if payment is not received.
    (g) The debtor may offer to make a written agreement to pay the 
amount of the claim. The acceptance of such an agreement is 
discretionary with DOT. If the debtor requests an installment payment 
arrangement because a lump sum payment would create a financial 
hardship, DOT may agree to a written installment payment schedule with 
the debtor (see 4 CFR 102.11(a)). The debtor shall execute a confess-
judgment note which specifies all of the terms of the arrangement and 
includes a provision accelerating the debt in the event the debtor 
defaults. The size and frequency of installment payments shall bear a 
reasonable relation to the size of the debt and the debtor's ability to 
pay. Interest shall be provided in the note (see Sec.  89.23). The 
debtor shall be provided with a written explanation of the consequences 
of signing a confess-judgment note. The debtor shall sign a statement 
acknowledging receipt of the written explanation, which shall recite 
that the statement was read and understood before execution of the note 
and that the note is being signed knowingly and voluntarily. Evidence of 
these facts shall be maintained in DOT's file on the debtor in 
accordance with the practice of the DOT operating element.

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