[Code of Federal Regulations]
[Title 29, Volume 4]
[Revised as of July 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR1450.29]

[Page 90-91]
 
                             TITLE 29--LABOR
 
         CHAPTER XII--FEDERAL MEDIATION AND CONCILIATION SERVICE
 
PART 1450_COLLECTIONS OF CLAIMS OWED THE UNITED STATES--Table of Contents
 
         Subpart D_Interest, Penalties, and Administrative Costs
 
Sec.  1450.29  Assessment.


    (a) Except as provided in paragraph (h) of this section, or Sec.  
1450.30, FMCS shall assess interest, penalties and administrative costs 
on debts owed to the United States pursuant to 31 U.S.C. 3717. Before 
assessing these charges, FMCS will mail or hand-deliver a written notice 
to the debtor. This notice shall include a statement of the agency's 
requirements concerning these charges. (Sections 1450.9 and 1450.21).
    (b) Interest shall accrue from the date on which notice of the debt 
and the interest requirements is first mailed or hand-delivered to the 
debtor, using the most current address that is available to the agency. 
If FMCS should use an ``advance billing'' procedure--that is, if it 
mails a bill before the debt is actually owed--it can include the 
required interest notification in the advance billing, but interest may 
not start to accrue before the debt is actually owed. FMCS will exercise 
care to insure that the notices required by this section are dated and 
mailed or hand-delivered on the same day.
    (c) The rate of interest assessed shall be the rate of the current 
value of funds to the United States Treasury (i.e., the Treasury tax and 
loan account rate), as prescribed and published by the Secretary of the 
Treasury in the Federal Register and the Treasury Fiscal Requirements 
Manual Bulletins annually or quarterly, in accordance with 31 U.S.C. 
3717. FMCS may assess a higher rate of interest if it reasonably 
determines that a higher rate is necessary to protect the interests of 
the United States. 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, FMCS may set a new interest rate which reflects the 
current value of funds to the Treasury at the time the new agreement is 
executed. Interest will not be assessed on interest, penalties, or 
administrative costs required by this section. However, if the debtor 
defaults on a previous repayment agreement, charges which accrued but 
were not collected under the defaulted agreement shall be added to the 
principal to be paid under a new repayment agreement.
    (d) FMCS shall assess against a debtor charges to cover 
administrative costs incurred as a result of a delinquent debt--that is, 
the additional costs incurred in processing and handling the debt 
because it became delinquent. Calculation of administrative costs shall 
be based upon actual costs incurred or upon cost analyses establishing 
an average of actual additional costs incurred by the agency in 
processing and handling claims against other debtors in similar stages 
of delinquency. Administrative costs may include costs incurred in 
obtaining a credit report or in using a private debt collector, to the 
extent they are attributable to delinquency.

[[Page 91]]

    (e) FMCS shall assess a penalty charge, not to exceed 6 percent a 
year, on any portion of a debt that is delinquent for more than 90 days. 
This charge need not be calculated until the 91st day of delinquency, 
but shall accure from the date that the debt became delinquent.
    (f) When a debt is paid in partial or installment payments, amounts 
received by the agency shall be applied first to outstanding penalty and 
administrative cost charges, second to accrued interest, and third to 
outstanding principal.
    (g) FMCS will waive the collection of interest on the debt or any 
portion of the debt which is paid within 30 days after the date on which 
interest began to accrue. FMCS may extend this 30-day period, on a case-
by-case basis, if it reasonably determines that such action is 
appropriate. Also, FMCS may waive, in whole or in part, the collection 
of interest, penalties, and/or administrative costs assessed under this 
section under the criteria specified in part 103 of the Federal Claims 
Collection Standards (4 CFR part 103) relating to the compromise of 
claims (without regard to the amount of the debt), or if the agency 
determines that collection of these charges would be against equity and 
good conscience, or not in the best interests of the United States. 
Waiver under the first sentence of this paragraph (g) is mandatory. 
Under the second and third sentences, it may be exercised under the 
following circumstances:
    (1) Waiver of interest pending consideration of a request for 
reconsideration, administrative review, or waiver of the underlying debt 
under a permissive statute, and
    (2) Waiver of interest where FMCS has accepted an installment plan, 
there is no indication of fault or lack of good faith on the part of the 
debtor, and the amount of interest is large enough in relation to the 
size of the installments that the debtor can reasonably afford to pay, 
that the debt will never be repaid.
    (h) Where a mandatory waiver or review statute applies, interest and 
related charges may not be assessed for those periods during which 
collection action must be suspended under Sec.  104.2(c)(1) of the 
Federal Claims Collection Standards (4 CFR part 104).