[Code of Federal Regulations]

[Title 20, Volume 1]

[Revised as of April 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 20CFR200.7]



[Page 177-179]

 

                      TITLE 20--EMPLOYEES' BENEFITS

 

                  CHAPTER II--RAILROAD RETIREMENT BOARD

 

PART 200_GENERAL ADMINISTRATION--Table of Contents

 

Sec.  200.7  Assessment or waiver of interest, penalties, and 

administrative costs with respect to collection of certain debts.



    (a) Purpose. The Debt Collection Act of 1982 requires the Board to 

charge interest on claims for money owed the Board, to assess penalties 

on delinquent debts, and to assess charges to cover the costs of 

processing claims for delinquent debts. The Act permits, and in certain 

cases requires, an agency to waive the collection of interest, penalties 

and charges under circumstances which comply with standards enunciated 

jointly by the Comptroller General and the Attorney General. Those 

standards are contained in 4 CFR 102.13. This section contains the 

circumstances under which the Board may either assess or waive interest, 

penalties, and administrative costs which arise from benefit or annuity 

overpayments made under any of the Acts which the Board administers.

    (b)(1) Simple interest shall be assessed once a month on the unpaid 

principal of a debt.

    (2) Interest shall accrue from the date on which notice of the debt 

and



[[Page 178]]



demand for repayment with interest is first mailed or hand-delivered to 

the debtor, or in the case of a debt which is subject to section 10(c) 

of the Railroad Retirement Act or section 2(d) of the Railroad 

Unemployment Insurance Act, interest shall accrue from the date that a 

denial of waiver of recovery is mailed or hand-delivered to the debtor 

or, if waiver has not been requested, upon the expiration of the time 

within which to request waiver, except as otherwise specified in this 

section.

    (3) In the case of a lien for reimbursement of sickness benefits 

pursuant to part 341 of this chapter, interest on the amount of the lien 

shall accrue from the date of settlement or the entry of final judgment.

    (4) The rate of interest assessed shall be the rate of the current 

value of funds to the U.S. Treasury (i.e., the Treasury tax and loan 

account rate) as prescribed and published in the Federal Register and 

the Treasury Financial Manual Bulletins annually or quarterly, in 

accordance with 31 U.S.C. 3717.

    (5) The rate of interest as initially assessed shall remain fixed 

for the duration of the indebtedness, except that where a debtor has 

defaulted on a repayment agreement and seeks to enter into a new 

agreement, a new interest rate may be assessed.

    (c)(1) A penalty charge of 6 percent per year shall be assessed on 

any debt that is delinquent for more than 90 days.

    (2) The penalty charge shall accrue from the date on which the debt 

became delinquent.

    (3) A debt is delinquent if it has not been paid in full by the 30th 

day after the date on which the initial demand letter was first mailed 

or hand-delivered, or, if the debt is being repaid under an installment 

payment agreement, at any time after the debtor fails to satisfy his or 

her obligation for payment thereunder.

    (4) In the case of a lien for reimbursement of sickness benefits 

pursuant to part 341 of this chapter, the amount of the lien is 

delinquent if it has not been paid in full by the 30th day after the 

date of settlement or entry of final judgment.

    (d)(1) Charges shall be assessed against the debtor for 

administrative costs incurred as a result of processing and handling the 

debt because it became delinquent.

    (2) Administrative costs include costs incurred in obtaining a 

credit report and in using a private debt collector.

    (e) When a debt is paid in partial or installment payments, amounts 

received shall be applied first to outstanding penalty and 

administrative cost charges, second to accrued interest, and third to 

outstanding principal. Where a debtor is in default under an installment 

repayment agreement, uncollected interest, penalties and administrative 

cost charges which have accrued under the agreement shall be added to 

the principal to be paid under any new installment repayment agreement 

entered into between the Board and the debtor.

    (f) Exemptions. The assessment of interest, penalties, and 

administrative costs under this section does not apply to debts under 

sections 2(f) and 8(g) of the Railroad Unemployment Insurance Act (45 

U.S.C. 352(f) and 358(g)).

    (g)(1) The Board shall waive the collection of interest under the 

following circumstances:

    (i) When the debt is paid within thirty days after the date on which 

notice of the debt was mailed or personally delivered to the debtor,

    (ii) When, in any case where a decision with respect to waiver of 

recovery of an overpayment must be made:

    (A) The debt is paid within thirty days after the end of the period 

within which the debtor may request waiver of recovery, if no request 

for waiver is received within the prescribed time period; or

    (B) The debt is paid within thirty days after the date on which 

notice was mailed to the debtor that his or her request for waiver of 

recovery has been wholly or partially denied if the debtor requested 

waiver of recovery within the prescribed time limit; however, regardless 

of when the debt is paid, no interest may be charged for any period 

prior to the end of the period within which the debtor may request 

waiver of recovery or, if such request is made, for any period prior to 

the date on which notice was mailed to the debtor that



[[Page 179]]



his or her request for waiver of recovery has been wholly or partially 

denied;

    (iii) When, in the situations described in paragraphs (g)(1) (i) and 

(ii) of this section, the debt is paid within any extension of the 

thirty-day period granted by the Board;

    (iv) With respect to any portion of the debt which is paid within 

the time limits described in paragraphs (g)(1)(i), (g)(1)(ii), or 

(g)(1)(iii) of this section; or

    (v) In regard to any debt the recovery of which is waived.

    (2) The Board may waive the collection of interest, penalties and 

administrative costs in whole or in part in the following circumstances:

    (i) Where, in the judgment of the Board, collecting interest, 

penalty and administrative costs would be against equity and good 

conscience; or

    (ii) Where, in the judgment of the Board, collecting interest, 

penalty and administrative costs would not be in the best interest of 

the United States.

    (h)(1) In making determinations as to when the collection of 

interest, penalty and administrative costs is against equity and good 

conscience the Board will consider evidence on the following factors:

    (i) The fault of the overpaid individual in causing the underlying 

overpayment; and

    (ii) Whether the overpaid individual in reliance on the incorrect 

payment relinquished a valuable right or changed his or her position for 

the worse.

    (2) In rendering a determination as to when the collection of 

interest, penalties and administrative costs is not in the best interest 

of the United States the Board will consider the following factors:

    (i) Whether the collection of interest, penalties and administrative 

costs would result in the debt never being repaid; and

    (ii) Whether the collection of interest, penalties and 

administrative costs would cause undue hardship.

    (i) The Board shall waive the collection of interest, penalties, and 

administrative costs in any case where the debt to be recovered is being 

recovered by full or partial withholding of a current annuity payable 

under the Railroad Retirement Act and the debt was not incurred through 

fraud.



[52 FR 41559, Oct. 29, 1987, as amended at 59 FR 15049, Mar. 31, 1994; 

67 FR 5723, Feb. 7, 2002]