Notice of proposed rulemaking on debt collection (2010)

On February 24, 2010, the Commission published a Notice of Proposed Rulemaking (NPRM) regarding implementation of statutory provisions regarding the collection of debts owed to the U.S. Government. The Commission also proposes integrating its rules regarding the collection of debts arising solely from the Administrative Fine program into the new proposed rules.

Background

The Commission is proposing new rules to implement the Debt Collection Improvement Act of 1996 (DCIA), which governs the federal government’s debt collection activities, and mandates that all nontax debts or claims owed to the United States that have been delinquent for 180 days shall be referred to the U.S. Department of the Treasury or a Treasury-designated collection center for appropriate action to collect or terminate collection of the claim or debt. 31 U.S.C. § 3711(g)(1). 

The Federal Claims Collection Standards (FCCS) were promulgated by the U.S. Department of the Treasury and the U.S. Department of Justice, which prescribe the standards that federal agencies must use in the administrative collection, offset, compromise and suspension or termination of money, funds or property. 31 CFR parts 900-904.

The Commission’s proposed regulations would incorporate by reference the relevant provisions of the DCIA and the FCCS, and the Commission sought comment on all aspects of the proposed rules. The comment period closed on March 26, 2010. 

Proposed rules on collection of administrative debts

The Commission proposes to add new part 8 and new subpart C to 11 CFR Part 111 to provide for debt collection. Together, both parts are designed to cover all types of debt that the Commission must collect. The proposed regulations in part 8 cover only those debts that are either owed to the U.S. government by current or former Commission employees, or arise from the provision of goods or services by contractors or vendors doing business with the Commission. Proposed 11 CFR 8.3 states that the Commission will collect the claims or debts covered by the proposed 11 CFR part 8 in accordance with the DCIA, the FCCS and certain other Treasury regulations governing debt collection. The proposed rule also states that the Commission will refer debts to the Treasury Department no later than 180 days after the debts become delinquent. 11 CFR 8.3(c). During the 180 days before the mandatory transfer of a debt to the Treasury Department, the Commission may take any action authorized by the DCIA, the FCCS and Commission regulations to attempt to collect the debt.

Additionally, the Commission’s proposed rules at 11 CFR part 8 provide for instances where a debtor has sought bankruptcy protection, which may require the Commission to take different action pursuant to bankruptcy law. The Commission shall also assess interest, penalties and administrative costs on debts owed to the United States, in accordance with federal law.

The proposed rules state that the Commission shall waive collection of interest and administrative costs on debts that are paid within 30 days after the date on which interest begins to accrue. The proposed rules also provide that the Commission may, at its discretion, waive collection of interest, penalties or administrative costs on any debt, and sets out the criteria for waiver.

Proposed rules on collection of debts arising from enforcement and administration of campaign finance laws

The Commission proposes to remove current 11 CFR 111.45, which governs debt collection with respect to the Administrative Fine program. Instead, the proposed regulations at 11 CFR part 111, subpart C, would govern the Commission’s collection of debts arising from compliance matters, administrative fines, alternative dispute resolution, repayments of public funds and court judgments arising from the Commission’s enforcement of the campaign finance laws. The proposed regulations cover the collection of debts only, and will be invoked only after the completion of existing Commission processes during which respondents or other parties have had a full and fair opportunity to demonstrate that no civil penalty or repayment should be imposed.

Like proposed 11 CFR part 8, the proposed regulations at 11 CFR part 11, subpart C state that the Commission will collect claims or debts covered by the proposed 11 CFR part 111, subpart C, in accordance with the DCIA, the FCCS and certain other Treasury regulations governing debt collection, and will refer debts to the Treasury Department no later than 180 days after the debts become delinquent. 11 CFR 111.51.

The proposed regulations at 11 CFR part 111, subpart C, also contain the same provisions governing the impact of bankruptcy law on debt collection and assessment and waiver of interest, penalties and administrative costs contained in proposed 11 CFR part 8, discussed above. 11 CFR 111.54 and 111.55.

The proposed regulations also note that nothing in proposed 11 CFR part 111, subpart C, precludes the Commission from filing suit in court to enforce compliance with a conciliation agreement, seek a civil money penalty, petition the court for a contempt order or otherwise exercise its authority to enforce or administer the Federal Election Campaign Act, the Presidential Election Campaign Fund Act or the Presidential Primary Matching Payment Account Act. 11 CFR 111.53.

Additional information

The full text of the NPRM is available on the FEC’s website at http://www.fec.gov/pdf/nprm/debtcollection/notice_2010-04.pdf.