Regulation

Page 715

§634

TITLE 15---COMMERCE AND TRADE

and management assistance that is not otherwise
available; and
"(5) the use of this expertise in the Small Business
Administration's training delivery system would improve substantially the quantity and quality of the
agency's management assistance programs.
"(b) The purposes of this Act [amending this section
and sections 632 and 637 of this title and enacting provisions set out as notes under this section and sections
631 and 637 of this title] are"(1) to improve the management by small businesses of their information technology,
"(2) to educate and encourage small businesses to
protect such technology from intentional or unintentional manipulation or destruction; and
"(3) to permit cooperation with profitmaking organizations in providing management assistance to
small business. "
AUDIT BY GENERAL ACCOUNTING OFFICE OF SMALL
BUSINESS ADMINISTRATION ; REPORT TO CONGRESS
Pub. L. 93-386, §13, Aug. 23, 1974, 88 Stat. 750, directed
General Accounting Office to conduct a full-scale a udit
of Small Business Administration, including all field
offices and to submit audit to House and Senate not
later than six months from Aug. 23, 1974.
NONAVAILABILITY OF UNOBLIGATED FUNDS AFTER
JUNE 30, 1974
Pub. L. 93-237, §1, Jan . 2, 1974, 87 Stat. 1023, provided
in part that any additional amounts authorized by Pub.
L . 93-237 [amending this section, sections 636 and 639 of
this title, section 1961 of Title 7, Agriculture, and section 3142-1 of Title 42, The Public Health and Welfare ,
and enacting provisions set out as notes under this section, section 636 of this title, and sections 1961 and 1969
of Title 7] which were not obligated by June 30, 1974,
were no longer to be available after that date.
ADDITIONAL CAPITAL FOR REVOLVING FUND
The following acts appropriated additional capital:
1965--$76,000,000-Pub. L. 8~309 , ch. IX, Oct. 31, 1965,
79 Stat. 1151.
$84,000,000-Pub . L . 8~09 , ch. IX, Oct. 31, 1965, 79
Stat. 1151 [effective only upon enactment into law of
authorizing legislation].
$150,000,000-Pub. L. 89-164, title V, Sept. 2, 1965, 79
Stat. 641.
$100,000,000-Pub. L. 8~16, title I, ch. IX, Apr. 30, 1965,
79 Stat. 92.
1964-$45,000,000-Pub. L . 81Hl35, ch. IX, Oct. 7, 1964, 78
Stat. 1032.
1963--$90,000,000-Pub. L . Ba-245, title V, Dec. 30, 1963,
77 Stat. 798.
1962--$300,000,000-Pub. L. 87~43, title V, Oct. 18, 1962,
76 Stat. 1102.
$40,000,000-Pub. L . 87-545, title I , July 25, 1962, 76
Stat. 213.
1961-$160,000,000-Pub. L . 87-332, Sept. 30, 1961, 75
Stat. 742.
$20,000,000-Pub. L. 87-125, title IV, Aug. 3, 1961, 75
Stat. 281.
1960-$50,000,000-Pub. L . 86-451 , title ill, May 13, 1960,
74 Stat. 102.
1959-$150,000,000-Pub. L . 81Hl8, title ill, July 13, 1959,
· 73 Stat. 209.
1958----$200,000,000-Pub. L . 81>-766, ch. II, Aug. 27 , 1958,
72 Stat. 867.
$20,000,000-Pub. L. 81>-457, June 13, 1958, 72 Stat. 186.
1957-$100,000,000-Pub. L. 81>-170, ch. II, Aug. 28, 1957,
71 Stat. 428.
$45,000,000-Pub. L. 81>-19, ch. I, Apr. 20, 1957, 71 Stat.
16.
1956-$50,000,000-Act June 20, 1956, ch. 415, title III, 70
Stat. 325.
BUSINESS LOAN AND INVESTMENT FUND; INCREASE IN
FINANCING FUNCTIONS; MONTHLY REPORTS TO CONGRESS
Pub . L. 91- 151, title ill, Dec. 23, 1969, 83 Stat. 378, provided that: " The Small Business Administration shall

promptly increase the level of its financing functions
utilizing the business loan and investment fund established under section 4(c)(1)(B) of the Small Business
Act (15 U.S.C. 633(c)(1)(B)) [subsec. (c)(1)(B) of this section] by $70,000,000 above the level prevailing at the
time of enactment of this Act [Dec. 23, 1969]. The Small
Business Administration shall submit to Congress a
monthly report of its implementation of this section."
TRANSFER OF FUNDS FOR TRADE ADJUSTMENT LOANS
Pub . L . 89-409, §3(b), May 2, 1966, 80 Stat. 133, provided
in part that any unexpended balances of appropriations
heretofore appropriated for the purposes of such section
[former section 637a of this title] were transferred to
the business loan and investment fund established by
section 4(c)(1 ) of the Small Business Act [subsec. (c)(1)
of this section].
Such transfer of funds as effective July 1, 1966, see
section 3(c) of Pub. L. 89-409, set out as Effective Date
of 1966 Amendment note under section 636 of this title.
§ 633a.

Detailed justification
changes in budget requests

for

proposed

Beginning in fiscal year 2013 and each fiscal
year thereafter, the budget request for the
Small Business Administration shall provide a
detailed justification of any proposed changes
from the enacted level by individual appropriation. The detailed justification shall include at
a minimum a description of each credit and noncredit program including amount of funding and
costs by appropriation account and fiscal year.
For activities funded in multiple appropriations,
the budget justification shall specify the
amount included in each enacted appropriation,
the amount proposed in the budget year and a
justification for any proposed changes.
(Pub. L. 112-74, div. C, title V, §532, Dec. 23, 2011,
125 Stat. 923.)
CODIFICATION
Section was enacted as part of the Financial Services
and General Government Appropriations Act, 2012, and
also as part of the Consolidated Appropriations Act,
2012 , and not as part of the Small Business Act which
comprises this chapter.
§ 634. General powers

(a) Seal; appointment and compensation of personnel; use of other services and facilities

The Administration shall have power to adopt,
alter, and use a seal, which shall be judicially
noticed. The Administrator is authorized, subject to the civil service and classification laws,
to select, employ, appoint, and fix the compensation of such officers, employees, attorneys,
and agents as shall be necessary to carry out the
provisions of this chapter; to define their authority and duties; and to pay the costs of qualification of certain of them as notaries public.
The Administration, with the consent of any
board, commission, independent establishment,
or executive department of the Government,
may avail itself on a reimbursable or nonreimbursable basis of the use of information, services, facilities (including any field service thereof), officers, and employees thereof, in carrying
out the provisions of this chapter.
(b) Powers of Administrator

In the performance of, and with respect to, the
functions, powers, and duties vested in him by
this chapter the Administrator may-

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TITLE 15---COMMERCE AND TRADE

(1) sue and be sued in any court of record of
a State having general jurisdiction, or in any
United States district court, and jurisdiction
is conferred upon such district court to determine such controversies without regard to the
amount in controversy; but no attachment, injunction, garnishment, or other similar process, mesne or final , shall be issued aga inst the
Administrator or his property;
(2) under regulations prescribed by him, assign or sell at public or private sale, or otherwise dispose of for cash or credit, in his discretion and upon such terms and conditions and
for such consideration as the Administrator
shall determine to be reasonable, any evidence
of debt, contract, claim, personal property, or
security assigned to or held by him in connection with the payment of loans granted under
this chapter, and to collect or compromise all
obligations assigned to or held by him and all
legal or equitable rights a ccruing to him in
connection with the payment of such loans
until such time as such obligations may be referred to the Attorney General for suit or collection;
(3) deal with, complete, renovate, improve,
modernize , insure, or rent, or sell for cash or
credit upon such terms and conditions and for
such consideration as the Administrator shall
determine to be reasonable, any real property
conveyed to or otherwise acquired by him in
connection with the payment of loans granted
under this chapter ;
(4) pursue to final collection , by way of compromise or otherwise , all claims against third
parties assigned to the Administrator in connection with loans made by him. This shall include authority to obtain deficiency judgments or otherwise in the case of mortgages
assigned to the Administrator. Section 6101 of
title 41 shall not be construed to apply to any
contract of hazard insurance or to any purchase or contract for services or supplies on
account of property obtained by the Administrator as a result of loans made under this
chapter if the premium therefor or the amount
thereof does not exceed $1,000. The power to
convey and to execute in the name of the Administrator deeds of conveyance, deeds of release, assignments and satisfactions of mortgages, and any other written instrument relating to real property or any interest therein acquired by the Administrator pursuant to the
provisions of this chapter may be exercised by
the Administrator or by any officer or agent
appointed by him without the execution of any
express delegation of power or power of attorney. Nothing in this section shall be construed
to prevent the Administrator from delegating
such power by order or by power of attorney ,
in his discretion, to any officer or agent he
may appoint;
(5) acquire, in any lawful manner, any property (real, personal, or mixed, tangible or intangible), whenever deemed necessary or appropriate to the conduct of the activities authorized in sections 636(a) and 636(b) of this
title;
(6) make such rules and regulations as he
deems necessary to carry out the authority
vested in him by or pursuant to this chapter;

Page 716

(7) in addition to any powers, functions,
privileges and immunities otherwise vested in
him, take any and all actions (including the
procurement of the services of attorneys by
contract in any office where an attorney or attorneys are not or cannot be economically employed full time to render such services) when
he determines such a ctions are necessary or
desirable in making, servicing, compromising,
modifying, liquidating, or otherwise dealing
with or realizing on loans made under the provisions of this chapter: Provided, That with respect to deferred participation loans, the Administrator may, in the discretion of and pursuant to regulations promulgated by the Administrator, authorize participating lending
institutions to take actions relating to loan
servicing on behalf of the Administrator, including determining eligibility and creditworthiness and loan monitoring, collection,
and liquidation ;
(8) pay the transportation expenses and per
diem in lieu of subsistence expenses, in accordance with subchapter I of chapter 57 of title 5,
for travel of any person employed by the Administration to render temporary services not
in excess of six months in connection with any
disaster referred to in section 636(b) of this
title from place of appointment to , and while
at, the disaster area and any other temporary
posts of duty and return upon completion of
the assignment: Provided , That the Administrator may extend the six-month limitation
for an a dditional six months if the Administrator determines the extension is necessary
to continue efficient disaster loan making activities;
(9) a ccept the services and facilities of Federal, State, and local agencies and groups,
both public and private, and utilize such gratuitous services and facilities as may , from
time to time, be necessary, to further the objectives of section 636(b) of this title;
(10) upon purchase by the Administration of
any deferred participation entered into under
section 636 of this title, continue to charge a
rate of interest not to exceed that initially
charged by the participating institution on
the amount so purchased for the remaining
term of the indebtedness;
(11) make such investigations as he deems
necessary to determine whether a recipient of
or participant in any assistance under this
chapter or any other person has engaged or is
about to engage in any acts or practices which
constitute or will constitute a violation of any
provision of this chapter, or of any rule or regulation under this chapter , or of any order issued under this chapter. The Administration
shall permit any person to file with it a statement in writing, under oath or otherwise as
the Administration shall determine, as to all
the facts and circumstances concerning the
matter to be investigated. For the purpose of
any investigation, the Administration is empowered to administer oaths and affirmations,
subpena witnesses, compel their attendance,
take evidence, and require the production of
any books, papers, and documents which are
relevant to the inquiry. Such attendance of
witnesses and the production of any such

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TITLE 15-----COMMERCE AND TRADE

records may be required from any place in the
United States. In case of contumacy by , or refusal to obey a subpena issued to, any person,
including a recipient or participant, the Administration may invoke the aid of any court
of the United States within the jurisdiction of
which such investigation or proceeding is carried on, or where such person resides or carries
on business, in requiring the attendance and
testimony of witnesses and the production of
books, papers, and documents; and such court
may issue an order requiring such person to
appear before the Administration, there to
produce records, if so ordered, or to give testimony touching the matter under investigation. Any failure to obey such order of the
court may be punished by such court as a contempt thereof. All process in any such case
may be served in the judicial district whereof
such person is an inhabitant or wherever he
may be found;
(12) impose, retain, and use only those fees
which are specifically authorized by law or
which are in effect on September 30, 1994, and
in the amounts and at the rates in effect on
such date, except that the Administrator may ,
subject to approval in appropriations Acts, impose, retain, and utilize, additional fees(A) not to exceed $100 for each loan servicing action (other than a loan assumption) requested after disbursement of the loan, including any substitution of collateral, release or substitution of a guarantor, reamortization, or similar action;
(B) not to exceed $300 for loan assumptions;
(C) not to exceed 1 percent of the amount
of requested financings under title III of the
Small Business Investment Act of 1958 [15
U.S.C. 681 et seq.] for which the applicant requests a commitment from the Administration for funding during the following year;
and
(D) to recover the direct, incremental cost
involved in the production and dissemination of compilations of information produced
by the Administration under the authority
of this chapter and the Small Business Investment Act of 1958 [15 U.S.C. 661 et seq.];
(13) collect, retain and utilize , subject to approval in appropriations Acts, any amounts
collected by fiscal transfer agents and not
used by such agent as payment of the cost of
loan pooling or debenture servicing operations, except that amounts collected under
this paragraph and paragraph (12) shall be utilized solely to facilitate the administration of
the program that generated the excess
amounts; and
(14) require any lender authorized to make
loans under section 636 of this title to pay examination and review fees, which shall be deposited in the account for salaries and expenses of the Administration, and shall be
available for the costs of examinations, reviews, and other lender oversight activities.
(c) Procurement of experts and consultants; com·
pensation and expenses

To such extent as he finds necessary to carry
out the provisions of this chapter, the Adminis-

§634

trator is authorized to procure the temporary
(not in excess of one year) or intermittent services of experts or consultants or organizations
thereof, including stenographic reporting services, by contract or appointment, and in such
cases such services shall be without regard to
the civil-service and classification laws and, except in the case of stenographic reporting services by organizations, without regard to section
6101 of title 41. Any individual so employed may
be compensated at a rate not in excess of the
daily equivalent of the highest rate payable
under section 5332 of title 5, including travel
time, and, while such individual is away from
his or her home or regular place of business, he
or she may be allowed travel expenses (including
per diem in lieu of subsistence) as authorized by
section 5703 of title 5.
(d) Safety deposit box rentals

Section 3324(a) and (b) of title 31 shall not
apply to prepayments of rentals made by the
Administration on safety deposit boxes used by
the Administration for the safeguarding of instruments held as security for loans or for the
safeguarding of other documents.
(e) Undertaking or suspension of payment obligation; period; extension of maturity; repay·
ment agreement; "required payments" defined

(1) Subject to the requirements and conditions
contained in this subsection, upon application
by a small business concern which is the recipient of a loan made under this chapter, the Administration may undertake the small business
concern's obligation to make the required payments under such loan or may suspend such obligation if the loan was a direct loan made by
the Administration . While such payments are
being made by the Administration pursuant to
the undertaking of such obligation or while such
obligation is suspended, no such payment with
respect to the loan may be required from the
small business concern.
(2) The Administration may undertake or suspend for a period of not to exceed 5 years any
small business con cern's obligation under this
subsection only i f (A) without such undertaking or suspension
of the obligation, the small business concern
would, in the sole discretion of the Administration, become insolvent or remain insolvent;
(B) with the undertaking or suspension of
the obligation, the small business concern
would, in the sole discretion of the Administration, become or remain a viable small business entity; and
(C) the small business concern executes an
agreement in writing satisfactory to the Administration as provided by paragraph (4).
(3) Notwithstanding the provisions of sections
636(a)(4)(C) and 636(i)(1) of this title, the Administration may extend the maturity of any loan
on which the Administration undertakes or suspends the obligation pursuant to this subsection
for a corresponding period of time.
(4)(A) Prior to the undertaking or suspension
by the Administration of any small business
concern's obligation under this subsection, the
Administration, consistent with the purposes

§634

TITLE 15---COMMERCE AND TRADE

sought to be achieved herein, shall require the
small business concern to agree in writing to
repay to it the aggregate amount of the payments which were required under the loan during the period for which such obligation was
undertaken or suspended, either(i) by periodic payments not less in amount
or less frequently falling due than those which
were due under the loan during such period, or
(ii) pursuant to a repayment schedule agreed
upon by the Administration and the small
business concern, or
(iii) by a combination of the payments described in clause (i) and clause (ii).
(B) In addition to requiring the small business
concern to execute the agreement described in
subparagraph (A), the Administration shall,
prior to the undertaking or suspension of the obligation, take such action, and require the small
business concern to take such action as the Administration deems appropriate in the circumstances, including the provision of such security
as the Administration deems necessary or appropriate to insure that the rights and interests
of the lender (Small Business Administration or
participant) will be safeguarded adequately during and after the period in which such obligation
is so undertaken or suspended.
(5) The term " required payments" with respect to any loan means payments of principal
and interest under the loan .
(f)

Sale of guaranteed portion of loans by lender
or subsequent holder; limitations; secondary
market

(1) The guaranteed portion of any loan made
pursuant to this chapter may be sold by the
lender, and by any subsequent holder, consistent
with regulations on such sales as the Administration shall establish, subject to the following
limitations:
(A) prior to the Administration's approval of
the sale, or upon any subsequent resale, of any
loan guaranteed by the Administration, if the
lender certifies that such loan has been properly closed and that the lender has substantially complied with the provisions of the
guarantee agreement and the regulations of
the Administration, the Administration shall
review and approve only materials not previously approved;
(B) all fees due the Administration on a
guaranteed loan shall have been paid in full
prior to any sale; and
(C) each loan, except each loan made under
section 636(a)(14) of this title, shall have been
fully disbursed to the borrower prior to any
sale.
(2) After a loan is sold in the secondary market, the lender shall remain obligated under its
guarantee agreement with the Administration,
and shall continue to service the loan in a manner consistent with the t erms and conditions of
such agreem ent.
(3) The Administration shall develop such procedures as are necessary for the facilitation, administration, and promotion of secondary mark et operations, and for assessing the increase of
small business access to capital at reasonable
rates and terms as a result of secondary market

Page 718

operations. Beginning on March 31, 1997, the sale
of the unguaranteed portion of any loan made
under section 636(a) of this title shall not be permitted until a final regulation that applies uniformly to both depository institutions and other
lenders is promulgated by the Administration
setting forth the terms and conditions under
which such sales can be permitted, including
maintenance of appropriate reserve requirements and other safeguards to protect the safety
and soundness of the program.
(4) Nothing in this subsection or subsection (g)
of this section shall be interpreted to impede or
extinguish the right of the borrower or the successor in interest to such borrower to prepay (in
whole or in part) any loan made pursuant to section 636(a) of this title, the guaranteed portion
of which may be included in such trust or pool,
or to impede or extinguish the rights of any
party pursuant to section 636(a)(6)(C) of this
title or subsection (e) of this section.
(g) Trust certificates; guarantee of timely payments of principal and interest; full faith and
credit of United States; collection of fees;
subrogation; division of loan guarantees

(1) The Administration is authorized to issue
trust certificates representing ownership of all
or a fractional part of the guaranteed portion of
one or more loans which have been guaranteed
by the Administration under this chapter, or
under section 696 of this title: Provided, That
such trust certificates shall be based on and
backed by a trust or pool approved by the Administration and composed solely of the entire
guaranteed portion of such loans.
(2) The Administration is authorized, upon
such terms and conditions as are deemed appropriate, to guarantee the timely payment of the
principal of and interest on trust certificates issued by the Administration or its agent for purposes of this subsection. Such guarantee shall be
limited to the extent of principal a nd interest
on the guaranteed portions of loans which compose the trust or pool. In the event that a loan
in such trust or pool is prepaid, either voluntarily or in the event of default, the guarantee
of timely payment of principal and interest on
the trust certificates shall be reduced in proportion to the amount of principal and interest
such prepaid loan represents in the trust or pool.
Interest on prepaid or defaulted loans shall accrue and be guaranteed by the Administration
only through the date of payment on the guarantee. During the term of the trust certificate,
it may be called for redemption due to prepayment or default of all loans constituting the
pool.
(3) The full faith and credit of the United
States is pledged to the payment of all amounts
which may be required to be paid under any
guarantee of such trust certificates issued by
the Administration or its agent pursuant to this
subsection.
(4)(A) The Administration may collect a fee
for any loan guarantee sold into the secondary
market under subsection (f) of this section in an
amount equal to not more than 50 percent of the
portion of the sale price that exceeds 110 percent
of the outstanding principal amount of the portion of the loan guaranteed by the Administra-

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TITLE 15-COMMERCE AND TRADE

tion. Any such fee imposed by the Administration shall be collected by the Administration or
by the agent which carries out on behalf of the
Administration the central registration functions required by subsection (h) of this section
and shall be paid to the Administration and used
solely to reduce the subsidy on loans guaranteed
under section 636(a) of this title: Provided, That
such fee shall not be charged to the borrower
whose loan is guaranteed: and, Provided further,
That nothing herein shall preclude any agent of
the Administration from collecting a fee approved by the Administration for the functions
described in subsection (h)(2) 1 of this section.
(B) The Administration is authorized to impose and collect, either directly or through a fiscal and transfer agent, a reasonable penalty on
late payments of the fee authorized under subparagraph (A) in an amount not to exceed 5 percent of such fee per month plus interest.
(C) The Administration may contract with an
agent to carry out, on behalf of the Administration, the assessment and collection of the annual fee established under section 636(a)(23) of
this title . The agent may receive , as compensation for services, any interest earned on the fee
while in the control of the agent before the time
at which the agent is contractually required to
remit the fee to the Administration.
(5)(A) In the event the Administration pays a
claim under a guarantee issued under this subsection, it shall be subrogated fully to the rights
satisfied by such payment.
(B) No State or local law, and no Federal law,
shall preclude or limit the exercise by the Administration of its ownership rights in the portions of loans constituting the trust or pool
against which the trust certificates are issued.
(6) If the amount of the guaranteed portion of
any loan under section 636(a) of this title is
more than $500,000, the Administrator shall,
upon request of a pool assembler, divide the loan
guarantee into increments of $500,000 and 1 increment of any remaining amount less than
$500,000, in order to permit the maximum
amount of any loan in a pool to be not more
than $500,000 . Only 1 increment of any loan guarantee divided under this paragraph may be included in the same pool. Increments of loan
guarantees to different borrowers that are divided under this paragraph may be included in
the same pool.
(h) Central registration of loans and trust certifi·
cates; contracts with agent; disclosures by
sellers of guaranteed portions of loans; regulation of brokers and dealers; electronic registration
(1) Upon the adoption of final rules and regulations, the Administration shall(A) provide for a central registration of all
loans and trust certificates sold pursuant to
subsections (f) and (g) of this section;
(B) contract with an agent to carry out on
behalf of the Administration the central registration functions of this section and the issuance of trust certificates to facilitate pooling. Such agent shall provide a fidelity bond
or insurance in such amounts as the Adminis1

See References in Text note below.

§634

tration determines to be necessary to fully
protect the interest of the Government;
(C) prior to any sale, require the seller to
disclose to a purchaser of the guaranteed portion of a loan guaranteed under this chapter
and to the purchaser of a trust certificate issued pursuant to subsection (g) of this section,
information on the terms, conditions, and
yield of such instrument. As used in this para graph, if the instrument being sold is a loan,
the term "seller" does not include (A) an entity which made the loan or (B) any individual
or entity which sells three or fewer guaranteed loans per year; and
(D) have the authority to regulate brokers
and dealers in guaranteed loans and trust certificates sold pursuant to subsections (f) and
(g) of this section.
(2) The agent described in paragraph (1)(B)
may be compensated through any of the fees assessed under this section and any interest
earned on any funds collected by the agent while
such funds are in the control of the agent and
before the time at which the agent is contractually required to transfer such funds to the Administration or to the holders of the trust certificates, as appropriate.
(3) Nothing in this subsection shall prohibit
the utilization of a book-entry or other electronic form of registration for trust certificates.
The Administration may, with the consent of
the Secretary of the Treasury, use the bookentry system of the Federal Reserve System.
(Pub. L. 85-536, §2[5], July 18, 1958, 72 Stat. 385;
Pub. L . 87-305, §4 , Sept. 26, 1961, 75 Stat. 666;
Pub. L . 87-367, title I , § 103(3), Oct. 4, 1961, 75
Stat. 787; Pub. L. 92-310, title II, §224(a), June 6,
1972, 86 Stat. 206; Pub. L. 93-386, §§ 3(1), 10, Aug.
23, 1974, 88 Stat. 745, 749; Pub . L. 94-305, title II,
§208, June 4, 1976, 90 Stat. 671; Pub. L . 95-89, title
III, § 303, Aug. 4, 1977, 91 Stat. 558; Pub. L. 95-510,
§103, Oct. 24, 1978, 92 Stat. 1781; Pub. L . 9~302,
title I , § 114, July 2, 1980, 94 Stat. 838; Pub. L .
98--352, § 2, July 10, 1984, 98 Stat. 329; Pub . L.
100-590, title I, § 113, Nov. 3, 1988, 102 Stat. 2997;
Pub. L. 102-140, title VI, § 609(a) , Oct. 28, 1991, 105
Stat. 825; Pub. L. 102-564, title III, §307(d), Oct.
28, 1992, 106 Stat. 4264; Pub. L . 103-81, §3(a), Aug.
13, 1993, 107 Stat. 780; Pub. L . 103-282, §2, July 22,
1994, 108 Stat. 1422; Pub. L . 103-403, title VI, § 602,
Oct. 22, 1994, 108 Stat. 4202; Pub. L. 104-36, §4(b),
Oct. 12, 1995, 109 Stat. 297; Pub. L. 104-208, div. D,
title I , § 103(e), title II, §§ 205(a), 208(i)(1), Sept. 30,
1996, 110 Stat. 3009-727, 3009-738, 3009-747; Pub. L.
10~554 , §1(a)(9) [title II, §209], Dec. 21, 2000, 114
Stat. 2763, 2763A-683; Pub. L. 108--306, § 3, Sept. 24,
2004, 118 Stat. 1131; Pub. L . 108--447, div. K, title
I, § 131, Dec. 8, 2004, 118 Stat. 3452; Pub. L. 111-240,
title I, §1117, Sept. 27, 2010, 124 Stat. 2509.)
REFERENCES IN TEXT

The Small Business Investment Act of 1958, referred
to in subsec. (b)(12)(C), (D), is Pub. L. 8~99 , Aug. 21 ,
1958, 72 Stat. 689, which is classified principally to chapter 14B (§661 et seq.) of this title . Title III of the Act
is classified generally to subchapter III (§681 et seq. ) of
chapter 14B of t his title . For complete classification of
this Act to the Code, see Short Title note set out under
section 661 of this title and Tables.
Subsection (h)(2) of this section, referred to in subsec.
(g)(4)(A), was redesignated subsec. (h)(1)(B) by Pub. L .

TITLE 15---COMMERCE AND TRADE

§634

104-208, div. D. title II, §205(a)(l), (2), Sept. 30, 1996, 110
Stat. 3009--738.
CODIFICATION

In subsec. (b)(4) , " Section 6101 of title 41 " substituted
for "Section 3709 of the R evised Statutes, as amended
(41 U.S .C., sec. 5)" on authority of Pub. L . 111-350, §6(c),
Jan. 4, 2011 , 124 Stat. 3854, which Act enacted Title 41,
Public Contracts.
In subsec. (b)(8), "subchapter I of chapter 57 of title
5" substituted for "the Travel Expense Act of 1949" on
authority of Pub. L. 89-554, §7(b), Sept. 6, 1966, 80 Stat.
631, the first section of which enacted Title 5, Government Organization and Employees.
In subsec. (c), "section 6101 of title 41" substituted fo r
"section 3709 of the Revised Statutes, as a mended (41
U.S.C., sec. 5)" on authority of Pub. L . 111-350, §6(c),
Jan. 4, 2011, 124 Stat. 3854, which Act enacted Title 41,
Public Contracts.
In subsec. (d), " Section 3324(a) a nd (b) of title 31 " s ubstituted for "Section 3648 of the Revised Statutes (31
U.S .C. 529)" on authority of Pub. L. 97- 258, §4(b), Sept.
13, 1982, 96 Stat. 1067, t h e first section of which enacted
Title 31, Money and Finance.
PRIOR PROVISIONS

Prior similar provisions were contained in section 205
of act July 30, 1953, ch . 282, title II, 67 Stat. 234, as
amended by act Aug. 9, 1955, ch . 628, §4, 69 Stat. 547,
which was classified to this section. See Codification
note set out under section 631 of this title.
AMENDMENTS

2010-Subsec. (g)(6) . Pub. L . 111- 240 added par. (6) .
2004-Subsec. (b)(14). Pub. L . 108--447 added par. (14).
Subsec. (g)(4)(C) . Pub. L. 108-306, §3(1), added subpar.
(C ).

Subsec. (h)(2), (3). Pub. L. 108-306, §3(2), added par. (2)
and redesignated form er par. (2) as (3).
2000-Subsec. (f)(1)(C). Pub. L . 106-554 amended subpar. (C) generally. Prior to amendment, subpar. (C)
read as follows: " each loan shall have been fully disbursed to the borrower prior to a ny sale ."
1996-Subsec. (b)(7). Pub. L. 104-208, § 208(i)(1), substituted ": Provided, That with respect to deferred participation loans, the Administrator may , in the discretion of and pursuant to regulations promulgated by the
Administrator, authorize participating lending institutions to take actions relating to loan servicing on behalf of the Administrator, including determining eligibility and creditworthiness and loan monitoring, collection, and liquidation" for ": Provided, That nothing
herein shall be constru ed as authorizing the Administrator to contract or otherwise delegate his responsibility for loan servicing to other than Administration personnel, but with respect to deferred participation loans
he may authorize participating lending institutions, in
his discretion pursuant to regulations promulgated by
him, to take such actions on his behalf, including, but
not limited to the determination of eligibility and
creditworthiness, and loan monitoring, collection and
liquidation".
Subsec. (f)(3). Pub. L. 104-208, §103(e), inserted at end
" Beginning on March 31, 1997, the sale of the unguaranteed portion of any loan made under section 636(a) of
this title shall not be permitted until a fina l regulation
that applies uniformly to both depository institutions
and other lenders is promulgated by the Administration setting forth the terms and conditions under
which such sales can be permitted, including maintenance of appropriate reserve requirements and other
safeguards to protect the safety a nd soundness of the
program .''

Subsec. (h) . Pub. L. 104-208, §205(a), designated existing provisions as par. (1) , redesignated former pars. (1)
to (4) as subpars. (A) to (D), respectively, of par. (1), in
subpar. (A) substituted " (A) provide for a central registration of all loans and trust certificates sold pursuant to subsections (f) and (g) of this section;" for " (A)

Page 720

provide for a centra l registration of all loans and trust
certificates sold pursuant to subsections (f) and (g) of
this section. Such central registration shall include,
with respect to each sale, an identification of each
lender who has sold the loan; the interest rate paid by
the borrower to the lender; the lender's servicing fee;
whether the loan is for a fixed rate or variable rate; an
identification of each purchaser of the loan or trust
certificate; the price paid by the purchaser for the loan
or trust certificate; the interest rate paid on the loan
or trust certificate; the fees of an agent for carrying
out the functions described in paragraph (2) below; and
such other information as the Administration deems
appropriate; ", and added par. (2).
1995--Subsec. (g)(4)(A). Pub. L . 104-36 substituted first
sentence for former first sentence which read as follows: " The Administration may collect the followin g
fees for loan guarantees sold into the secondary market
pursuant to the provisions of subsection (f) of this section: an amount equal to (A) not more than "ho of one
percent per year of the outstanding principal amount of
the portion of such loan guaranteed by the Administration, and (B) not more than 50 percent of the portion of
the sale price which is in excess of 110 percent of the
outstanding principal amount of the portion of such
loan guaranteed by the Administration. " , and substituted " such fee" for "such fees" in two places in second sentence.
1994-Subsec. (b)(8). Pub. L . 103-282 inserted
" : Provided, That the Administrator may extend the
six-month limitation for an additional six months if
· the Administrator determines the extension is necessary to continue effi cient disaster loan making activities" before semicolon at end.
Subsec. (b)(12), (13). Pub. L. 103-403 added pars. (12)
and (13).
1993-Subsec. (g)(4). Pub. L . 103-81 added par. (4) and
struck out former par. (4) which read as follows : "The
Administration shall n ot collect any fee for any guarantee under this subsec tion: Provided, That nothing
herein sh a ll preclude any agent of the Administration
from collecting a fee approved by the Administration
for the functions described in subsection (h)(2) of this
section. "
1992--Subsec. (f)(4). Pub. L. 102-564 substituted " section 636(a )(6)(C) of this title or subsection (e) of this
section" for " subsection (e) of this section or section
636(a)(6) or 636(a)(8) of this title".
1991-Subsec. (g)(l ). Pub. L . 102-140 substituted "or
under section 696 of this title" for "except separate
trust certificates shall be issued for loans approved
under section 636(a)(l3) of this title" .
1988-Subsec. (g)(l). Pub. L. 100--590 substituted "except separate trust certificates shall be issued for loans
approved" for " except those".
1984-Subsecs. (f) to (h ). Pub. L . 98-352 added subsecs.
(f) to (h ).
1980-Subsec. (b)(7). Pub. L . 96-302 prohibited an interpretation that authorized the Administrator to contract or otherwise delegate his responsibility for loan
servicing to other than Administration personnel , but
sanctioned, with respect to deferred participation
loans . authority for participating lending institutions
to take action on behalf of t he Administrator determining eligibility and creditworthiness, loan monitoring, coll ection, and liquidation, etc.
1978-Subsec. (c). Pub. L . 95-510 substituted " Any individual so employed may be compensated at a rate not
in excess of the daily equivalent of the highest rate
payable under section 5332 of Title 5, including travel
time, and, while such individual is away from his or her
home or regular place of business, he or she may be allowed travel expenses (including per diem in lieu of
subsistence) as authorized by section 5703 of Title 5" for
" Any individual so employed may be compensated at a
rate not in excess of $50 per diem, and, while such individual is away from his home or regular place of business, h e may be a llowed transportation and not to exceed $15 per diem in lieu of subsistence and other ex. penses'' .

Page 721

§634

TITLE 15-COMMERCE AND TRADE

1977-Subsec. (e). Pub. L. 9~9 added subsec. (e).
1976-Subsec. (e). Pub. L. 94-305 struck out subsec. (e)
which provided for the appointment, by the Administrator, of the Chief Counsel for Advocacy who would
serve as a focal point for complaints and suggestions,
counsel small businessmen, develop proposals for
change, represent interest of small businesses before
federal agencies and enlist the cooperation of public
and private agencies. See sections 634a to 634g of this
title.
1974-Subsec. (b)(10), (11). Pub. L . 93--386, §3(1), added
pars. (10) and (11).
Subsec. (e). Pub. L. 93--386, § 10, added subsec. (e).
1972-Subsec. (a). Pub. L . 92-310 struck out provisions
which authorized the Administrator to provide bonds
for officers, employees, attorneys, and agents.
1961-Subsec. (a). Pub. L . 87~67 struck out authorization for fifteen add! t!onal pos! tions in grades 16, 17, and
18 of the General Schedule of the Classification Act of
1949.
Subsec. (d) . Pub. L. 87~05 added subsec. (d).
EFFECTIVE DATE OF 1996 AMENDMENT
Amendment by sections 103 and 205 of Pub. L. 104-208
effective Oct. 1, 1996, see section 3 of Pub. L . 104-208, set
out as a note under section 633 of this title.
Pub. L. 104-208, d!v. D, title II, §208(j), Sept. 30, 1996,
110 Stat. 3009-747, provided that: " This· section [amending this section, sections 80a-18, 662, 681 to 683, 687, 687b,
687d, 687k to 687m, and 697f of this title, and section 1431
of Title 12, Banks and Banking, repealing sections 687i
and 687j of this title, enacting provisions set out as
notes under sections 681 and 683 of this title, and
amending provisions set out as a note under section 631
of this title) and the amendments made by this section
shall become effective on the date of enactment of this
Act [Sept. 30, 1996) ."
EFFECTIVE DATE OF 1995 AMENDMENT
Pub. L . 10~6. §8, Oc t . 12, 1995, 109 Stat. 297, provided
that:
" (a) IN GENERAL.-Except as provided in subsection
(b), the amendments made by this Act [see Short Title
of 1995 Amendment note set out under section 631 of
th1s title) do not apply with respect to any loan made
or guaranteed under the Small Business Act [15 U.S.C.
631 et seq.] or the Small Business Investment Act of
1958 [15 U.S .C. 661 et seq.] before the date of enactment
of this Act [Oct. 12, 1995).
"(b) EXCEPTIONS.-The amendments made by this Act
apply to a loan made or guaranteed under the Small
Business Act or the Small Business Investment Act of
1958 before the date of enactment of this Act [Oct. 12,
1995], if the loan is refinanced, extended, restructured,
or renewed on or after the date of enactment of this
Act."
EFFECTIVE DATE OF 1993 AMENDMENT
Pub. L. 103-81, §3(b), Aug . 13, 1993, 107 Stat. 781, provided that: "Any new fees imposed by the Administration pursuant to the authority conferred by subsection
(a) [amending this section] shall be applicable only to
loans initially sold in the secondary market pursuant
to the provisions of section 5(f) of the Small Business
Act [subsec. (f) of this section) after August 31, 1993."
Pub. L . 103-81, §7, Aug. 13, 1993, 107 Stat. 782, which
provided that sections 3 and 5 of Pub. L. 103-81, amending this section and section 636 of this title and enacting provisions set out as notes under this section and
section 636 of this title, were repealed on Sept. 30, 1996,
was repealed by Pub. L. 104-208, div. D, title I, §109(a) ,
Sept. 30, 1996, 110 Stat. 3009-733, effective Sept. 29, 1996.
EFFECTIVE DATE OF 1980 AMENDMENT
Amendment by Pub. L. 9~02 effective Oct. 1, 1980,
see section 507 of Pub. L. 9~02, set out as a note under
section 631 of this t! tle.
EFFECTIVE DATE OF 1978 AMENDMENT
Pub. L. 95-510, §105, Oct. 24, 1978, 92 Stat. 1782, provided that: " This Act [amending this section and sec-

tions 636 and 637 of this title and repealing sections
5031, 5032, and 5083 of Title 42, The Public Health and
Welfare] shall be effective October 1, 1979."
REGULATIONS
Pub. L. 93--352, §3, July 10, 1984, 98 Stat. 331, provided
that:
" (a) Within ninety days after the date of enactment
of this Act [July 10, 1984] , the Small Business Administration shall develop and promulgate final rules and
regulations to implement the central registration provisions provided for In section 5(h)(1) of the Small Business Act [15 U.S.C. 634(h)(1)), and shall contract with an
agent for an initial period of not to exceed two years to
carry out the functions provided for in section 5(h)(2) of
such Act.
" (b) Within nine months after the date of enactment
of this Act [July 10, 1984], the Small Business Administration shall consult with representatives of appropriate Federal and State agencies and officials, the securities industry, financial institutions and lenders,
and small business persons, and shall develop and promulgate final rules and regulations to implement this
Act [amending sections 633, 634, and 639 of this title and
enacting provisions set out as notes under sections 631
and 634 of this title] other than as provided for in subsection (a).
" (c) The Small Business Administration shall not implement any of the provisions under section 5(g) of the
Small Business Act, as amended [15 U .S.C. 634(g)], until
final rules and regulations become effective."
ASSET SALES
Pub. L . 105-135, title V, §505, Dec. 2, 1997, 111 Stat.
2624, provided that : " In connection with the Administration 's implementation of a program to sell to the
private sector loans and other assets held by the Administration , the Administration shall provide to the
Committees a copy of the draft and final plans describing the sale and the anticipated benefits resulting from
such sale. "
PREFERRED LENDER STANDARD REVIEW PROGRAM
Pub. L . 104-208, div. D, title I, § 103(h), Sept. 30, 1996,
110 Stat. 3009-728, provided that: " Not later than 90
days after the date of enactment of this Act [Sept. 30,
1996], the Administrator shall commence a standard review program for the Preferred Lender Program established by section 5(b)(7) of the Small Business Act (15
U.S.C. 634(b)(7)), which shall include annual or more
frequent assessments of the participation of the lender
in the program , including defaults, loans, and recoveries of loans made by tha t lender under the authority of
this section. The Administrator shall require such
standard review for each new entrant to the Preferred
Lender Program."
STUDY AND REPORT REGARDING 1993 AMENDMENTS TO
IMPOSE SECONDARY MARKET FEES AND TO REDUCE
LOAN GUARANTEE PERCENTAGES
Pub. L. 103-81, §6, Aug. 13, 1993, 107 Stat. 782, provided
that: " The Administration shall study , monitor and
evaluate the impact of the amendments made by sections 3 and 5 of this Act [amending this section and section 636 of this title) on the ability of small business
concerns and small business concerns owned and controlled by minorities and women , to obtain financing
and the impact of such sections on the effectiveness, viability and growth of the secondary market authorized
by section 5(f) of the Small Business Act [subsec. (f) of
this section). Not later than 16 months after the date of
enactment [Aug. 13, 1993], and annually thereafter , the
Administration shall submit to the Committees on
Small Business of the Senate and the House of Representatives [Committee on Small Business of Senate
now Committee on Small Business and Entrepreneurship of Senate] a report containing the Administration's findings and recommendations on such impact,
specifically including changes in the interest rates on

-.
§634a

TITLE 15-COMMERCE AND TRADE

financings provided to small business concerns and
small business concerns owned and controlled by minorities and women, through the use of the secondary
market. The Administration shall segregate such findings and recommendations in the study according to
the ethnic and gender components in these categories.
Solely for the purposes of the study authorized herein,
the term 'small business concerns owned and controlled
by minorities', includes businesses owned and controlled by individuals belonging to one of the designated groups listed in section 8(d)(3)(C) of the Small
Business Act [15 U.S.C. 637(d)(3)(C)] ."
REFERENCES IN OTHER LAWS TO GS-16, 17, OR 18 PAY
RATES
References in laws to the rates of pay for GS-16 , 17,
or 18, or to maximum rates of pay under the General
Schedule, to be considered references to rates payable
under specified sections of Title 5, Government Organization and Employees, see section 529 [title I, §101(c)(1))
of Pub. L. 101--509, set out in a note under section 5376
of Title 5.
VIABILITY OF SECONDARY MARKETS
Pub. L. 102-366, title II, §226, Sept. 4, 1992, 106 Stat.
1001, provided that: "The Administrator of the Small
Business Administration is authorized and directed to
take such actions in the awarding of contracts as is
deemed necessary to assure the continued long-term viability of the secondary markets in loans, debentures
or other securities guaranteed by the Administration."
SMALL BUSINESS LOAN SECONDARY MARKET STUDY
Pub. L. 102-366, title ill, §311, Sept. 4, 1992, 106 Stat.
1005, directed Secretary of the Treasury, Director of
Congressional Budget Office, and Chairman of Securities and Exchange Commission, in consultation with
Administrator of Small Business Administration, to
conduct a study of potential benefits of, and legal, regulatory , and market-based barriers to, developing a
secondary market for loans to small businesses, specified considerations to be included in the study, andrequired that, not later than 1 year after Sept. 4, 1992, a
report be submitted to Congress on results of the study,
including recommendations for legislation to facilitate
development of a secondary market for loans to small
businesses.
APPROPRIATIONS NOT AUTHORIZED
Pub. L . 98-352, §6, July 10, 1984, 98 Stat. 332, provided
that: " This Act [amending this section and sections 633
and 639 of this title and enacting provisions set out as
notes under this section and section 631 of this title]
does not authorize the appropriation of any funds."
SMALL BUSINESS PROTECTION
Pub. L . 90-104, title III, §§301-J03, Oct. 11, 1967, 81 Stat.
272, authorized Administrator of Small Business Administration to conduct a special study of impact on
small business concerns of robbery, burglary, shoplifting, vandalism, and other criminal activities, and report to President and to Congress results of study, including such recommendations he deemed appropriate
for administrative and legislative action, within one
year after Oct. 11, 1967.
§ 634a. Office of Advocacy within Small Business

Administration; Chief Counsel for Advocacy
There is established within the Small Business
Administration an Office of Advocacy. The management of the Office shall be vested in a Chief
Counsel for Advocacy who shall be appointed
from civilian life by the President, by and with
the advice and consent of the Senate.
(Pub. L . 94-305, title II, § 201, June 4, 1976, 90
Stat. 668.)

Page 722

CODIFICATION
Section was not enacted as part of the Small Business Act which comprises this chapter.
§ 634b. Primary functions of Office of Advocacy

The primary functions of the Office of Advocacy shall be to(1) examine the role of small business in the
American economy and the contribution
which small business can make in improving
competition, encouraging economic and social
mobility for all citizens, restraining inflation,
spurring production, expanding employment
opportunities, increasing productivity, promoting exports, stimulating innovation and
entrepreneurship, and providing an avenue
through which new and untested products and
services can be brought to the marketplace;
(2) assess the effectiveness of existing Federal subsidy and assistance programs for small
business and the desirability of reducing the
emphasis on such existing programs and increasing the emphasis on general assistance
programs designed to benefit all small businesses;
(3) measure the direct costs and other effects
of government regulation on small businesses;
and make legislative and nonlegislative proposals for eliminating excessive or unnecessary regulations of small businesses;
(4) determine the impact of the tax structure
on small businesses and make legislative and
other proposals for altering the tax structure
to enabl e all small businesses to realize their
potential for contributing to the improvement
of the Nation's economic well-being;
(5) study the ability of financial markets
and institutions to meet small business credit
needs and determine the impact of government demands for credit on small businesses;
(6) determine financial resource availability
and to recommend methods for delivery of financial assistance to minority enterprises, including methods for securing equity capital,
for generating markets for goods and services,
for providing effective business education,
more effective management and technical assistance, and training, and for assistance in
complying with Federal, State, and local law;
(7) evaluate the efforts of Federal agencies,
business and industry to assist minority enterprises;
(8) make such other recommendations as
may be appropriate to assist the development
and strengthening of minority and other small
business enterprises;
(9) recommend specific measures for creating an e-nvironment in which all businesses
will have ·the opportunity to complete 1 effectively and expand to their full potential, and
to ascertain the common reasons, if any, for
small business successes and failures;
(10) determine the desirability of developing
a set of rational, objective criteria to be used
to define small business, and to develop such
criteria, if appropriate;
(11) advise, cooperate with, and consult with,
the Chairman of the Administrative Con1

So tn original. Probably should be "compete".

Page 255

TITLE 31-MONEY AND FINANCE

Subsec. (e)(2). Pub. L. 10!Hl5, §1012(2), added par. (2)
and struck out former par. (2) which read as follows:
"Payment of a claim settled under paragraph (1) shall
be subject to the availability of appropriations for payment of that particular claim."
1996-Pub. L . 104-316, §202(n)(1)(A), struck out "of the
Comptroller General" after "Authority" In section
catchllne.
Subsec. (a). Pub. L. 104-316, §202(n)(1)(B), amended
subsec. (a) generally. Prior to amendment, subsec. (a)
read as follows : " Except as provided in this chapter or
another law, the Comptroller General shall settle all
claims of or against the United States Government. A
claim that was not administratively examined before
submission to the Comptroller General shall be examined by 2 officers or employees of the General AccountIng Office Independently of each other."
Subsec. (b)(1). Pub. L. 104-316, § 202(n)(1)(C), In Introductory provisions substituted " The claim must be received by the official responsible under subsection (a)
for settling the claim or by the agency that conducts
the activity from which the claim arises within 6 years
after the claim accrues except-" for " The claim must
be received by the Comptroller General within 6 years
after the claim accrues except-".
Subsec. (b)(2). Pub. L . 104-316, §202(n)(1)(D), substituted "received" for "presented to the Comptroller
General " and " in paragraph" for "in clause".
Subsec. (b)(3). Pub. L. 104-316, §202(n)(1)(E), amended
par. (3) generally. Prior to amendment, par. (3) read as
follows: " The Comptroller General shall return a claim
not received In the time required under this subsection
with a copy of this subsection and no further communication Is required."
Subsec. (d). Pub. L. 104-316, §202(n)(1)(F), substituted
"official responsible under subsection (a) for settling
the claim" for " Comptroller General " before " shall report to Congress" and " official" for " Comptroller General" before " believes" and before period at end.
Subsec. (e). Pub. L. 104-201 added subsec. (e).
1987-Subsec. (c). Pub. L. 10~6 amended subsec. (c)
generally. Prior to amendment, subsec. (c) read as follows: "A claim on a check or warrant that the records
of the Comptroller General or the Secretary of the
Treasury show as being paid must be presented to the
Comptroller General or the Secretary within 6 years
after the check or warrant was issued."
1983-Subsec. (b)(2). Pub. L. 97-452 Inserted "this" before " subsection".
EFFECT!'VE DATE OF 2006 AMENDMENT
Pub. L . 109-163, div. A , title X, §1056(e)(2), Jan . 6, 2006 ,
119 Stat. 3440, as amended by Pub. L. 111--383, div. A,
title X, § 1075(h)(3), Jan . 7, 2011 , 124 Stat. 4377, provided
that the amendment by section 1056(e)(2) is effective as
of Dec. 2, 2002, and as If included In Pub. L. 107- 314 as
enacted.
EFFECT!'VE DATE OF 2002 AMENDMENT
Pub. L. 107--314, div. A, title VI, §635(c), Dec. 2, 2002,
116 Stat. 2574, provided that: " The amendment made by
subsection (a) [amending this section] shall apply with
respect to claims against the United States presented
to the Secretary of Defense under section 3702 of title
31, United States Code , on or after the date of the enactment of this Act [Dec. 2, 2002) ."
EFFECT!'VE DATE OF 1987 AMENDMENT
Amendment by Pub. L . 10~6 effective 6 months after
Aug. 10, 1987, or on such later date as the Secretary of
the Treasury may prescribe in regulations, see section
1006 of Pub. L. 1~6. set out as a note under section
3328 of this title.
EFFECT!'VE DATE OF 1983 AMENDMENT
Amendment effective Sept. 13, 1982, see section 2(1) of
Pub. L. 97-452, set out as a note under section 3331 of
this title.

§3711

REGULATIONS
For provision permitting Secretary of the Treasury
to prescribe rules, regulations, and procedures as necessary to implement amendment by section 1004(b) of
Pub. L . 10~6 . Including recertification of Treasury
checks which have been canceled or for which a claim
has been asserted or barred, see section 1005 of Pub. L .
10~6 . set out as a note under section 3328 of this title.

SUBCHAPTER IT-CLAIMS OF THE UNITED
STATES GOVERNMENT
§ 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 re- ,
quirement 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
(e)(1) When trying to collect a claim of the
Government under a law except the Internal
Revenue Code of 1986 (26 u .s.a. 1 et seq .), the
head of an executive, judicial, or legislative
agen cy shall disclose to a consumer reporting
'So In original. Probably should be " Attorney Gener a l and the
Secretary of the Treasury may prescribe jointly."

§3711

TITLE 31-MONEY AND FINANCE

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

Page 256

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 Homeland Security 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) The Secretary of Veterans Affairs 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 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.
(4) 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

Page 257

TITLE 31-MONEY AND FINANCE

§3711

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

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

Treasury;

this title.

(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 authoiities. 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

(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(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
2 So

In origina l.

§3711

TITLE 31-MONEY AND FINANCE

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)(l),
(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 non tax debt or class of non tax 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 Managem ent
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 defin ed in sections 502(7) and 502(8) , respectively, of the F ederal Credit Reform Act of
1990) the following information shall be reported:

Page 258

(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 (in cluding
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 n et proceeds
that would be received by the Government if
such loan assets were sold.
(v) The marketability of a ll 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, § 1(15), Jan. 12, 1983, 96 Stat. 2470; Pub.
L. 98-216, § 1(5), Feb. 14, 1984, 98 Stat. 4; Pub. L.
99-514, §2, Oct. 22, 1986, 100 Stat. 2095; Pub. L.
101-552, §8(b), Nov. 15, 1990, 104 Stat. 2746; Pub. L.
102-365, §4(a)(4), Sept. 3, 1992, 106 Stat. 973; Pub.
L. 103-272, §5(i)(1), July 5, 1994, 108 Stat. 1375;
Pub. L . 104-106, div. A, title X, § 1089, Feb. 10,
1996, 110 Stat. 459; Pub. L . 104-134, title III,
§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, § 1010,
Sept. 23, 1996, 110 Stat. 2635; Pub. L . 104-316, title
I, § 115(g)(1), Oct. 19, 1996, 110 Stat. 3834; Pub. L .
109-241, title IX, §902(b)(4), July 11, 2006, 120 Stat.
566; Pub. L . 110-389, title VIII, § 801(a), Oct. 10,
2008, 122 Stat. 4185.)
HISTORICAL AND REVISION NOTES

1982 ACT
Revised

Section
37l!(a) .....

Source (U.S. Code)

31:952(a)(less words
between 1st and
2d commas),
(b)(lst sentence
less words between 6th and 7th
commas).
37l!(b) .... . 31:952(b)(2d sentence, last sentence words after
semicolon).
371l(c)(l)
31:952(b)(last sentence words before semicolon).

Source (Statutes at Large)

July 19, 1966, Pub. L. 89-508,
§3, 80 Stat. 309.

Page 259

TITLE 31-MONEY AND FINANCE

HISTORICAL AND REVISIO N NOTES-CONTINUED
1982 ACT
Revised
Section

Source (U.S. Code)

3711(0)(2)

31:952(note).

3711(d) .....
3711(e) .....

31:952(0).
31:952(a)(words be-

Source (Statutes at Large)

July 8, 1976, Pub. L. 94-348,
§3(e). 90 Stat. 818.

tween 1st and 2d

In the section, the words "executive or legislative
agency" are substituted for "agency" because of therestatement. 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
Source (U.S. Code)

3711(!)(1)

31 App.:952(d)(1).

3711(!)(2)
3711(!)(3)

31 App.:952(d)(2).
31 App.:952(d)(3).

REFERENCES IN TEXT
Sections 502(7), 5()2(8), and 504(b) of the Federal Credit
Reform Act of 1990, referred to in subsec. (!)(1), (4)(B),
are c lassified 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, whic h was approved Apr. 26, 1996.

commas). (b)(lst
sentence words
between 6th and
7th commas).

Revised
Section

§3711

Source (Statutes at Large)

July 19, 1966, Pub. L. 89-508, 80
Stat. 308, §3(d )(1}-(3); added
Oct. 25, 1982, Pub. L. 97-365,
§3. 96 Stat. 1749.

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 a ny other
Federal law" .
1984 ACT
This is necessary to reflect the transfer of the nonpositive law provisions of title 49 to title 49 appendix.

AMENDMENTS
2008-Subsec. (f)(3), (4). Pub. L . 110-389 added par. (3)
and redesignated former par. (3) as (4) .
2008-Subsec. (f)(2). Pub. L. 109-241 substituted " Secretary of Homeland Security" for "Secretary of Transportation".
1996--Subsec. (a). Pub. L. 104-134, §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, § 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, §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, § 115(g)(1)(C), redesignated
subsec. (d) as (c). Former subsec. (c) redesignated (b).
Subsec. (c)(1). Pub. L. 104-134, §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, §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, § 115(g)(1)(C), redesignated
subsec. (f) as (e). Former subsec. (e) redesignated (d).
Pub. L. 104-134, §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, § 31001(g)(1)(C), inserted
" , the Secretary of the Treasury," after "Attorney
General ' '.
Subsec. (f). Pub. L. 104-316, § 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, §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 . 104-134, §31001(k)(3),
substituted "the person" for "the individual" wherever
appearing.

§3712

TITLE 31-MONEY AND FINANCE

Subsec. (f)(2). Pub. L . 104-134, §31001(c)(1), (k)(2), (3),
substituted " the head of an executive, judicial, or legislative a gency" for " the head of an executive or legislative agency", " a person" for "an individual", and " the
person" for " the individual" .
Subsec. (f)(3). Pub. L . 104-134, §31001(c)(1), (k)(2), substituted "the head of an executive, judicial, or l egislative agency" for "the head of an executive or l egislative agency" and " a person" for "an individual".
Subsec. (f)(4), (5). Pub. L. 104-134, § 31001(k )(4), added
pars. (4) and (5).
Subsec. (g). Pub. L . 104-316, §115(g)(1)(C), redesign ated
the subsec. (g), relating to authority to suspend or terminate collection actions against deceased members, as
(f) .
Pub. L . 104-134, §31001(m)(1), added subsec. (g) relating to transfer of debt or claim to Secretary of the
Treasury in case of delinquency.
Pub. L . 104-106 added subsec. (g) relating to a u t hority
to suspend or terminate collection actions against deceased members.
Subsec. (g)(1). Pub. L. 104-201, § 1010(1), substituted
"Marine Corps, or Coast Guard during a period when
the Coast Guard is operating as a service in the Navy"
for "or Marine Corps".
Subsec . (g)(2), (3). Pub. L. 104-201, § 1010(2), (3) , added
par. (2) and redesignated former par. (2) as (3).
Subsec. (h ). Pub. L. 104-134, §31001(m)(1), added subsec. (h) .
Subsec. (i). Pub . L. 104-134, §31001(p), added subsec.
(i).

1994-Subsec. (c)(2) . Pub. L. 103-272 substituted "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" for
" section 6 of the Act of March 2, 1893 (45 u.s.a. 6), section 4 of the Act of April 14, 1910 (45 u .s.a. 13), section
9 of the Act of February 17, 1911 (45 U .S.C. 34) , and section 25(h) of the Interstate Commerce Act (49 App.
u.s.a. 26(h))".
1992-Subsec. (c)(2). Pub. L. 102--365 substituted " $500"
for " $250".
1990-Subsec. (a)(2). Pub. L . 101--052 substituted
" $100,000 (excluding interest) or such higher amount as
the Attorney General may from time to time prescribe" for " $20,000 (excluding interest)".
1986--Subsec. (f)(1). Pub. L . 99--014 substituted " Internal Revenue Code of 1986" for " Internal Revenue Code
of 1954".
1984-Subsec. (c)(2). Pub. L . 98-216 substituted "(49
App . u.s.a. 26(h))" for "(49 u .s.a. 26(h))".
1983--Subsec. (f). Pub. L. 97-452 added subsec. (f) .
SAVINGS PROVISION

Section 31001(n ) of Pub. L. 104-134 provided that: " Effective October 1, 1995, section 11 of the Administrative
Dispute Resolution Act (Public Law 101- 552, [former] 5
U.S .C. 571 note) shall not apply to the amendment
made by section 8(b) of such Act [amending this section]. "
GUIDELINES

Section 31001(aa)(1) of Pub. L. 104-134 provided that:
" The Secretary of the Treasury, in consultation with
concerned Federal agencies, may establish guidelines,
including information on outstanding debt, to assist
agencies in the performance and monitoring of debt
collection activities. "
REPORT

Section 31001(aa)(2) of Pub. L . 104-134 provided that:
" Not later than 3 years after the date of enactment of
this Act [Apr. 26, 1996] , the Secretary of the Treasury
shall report to t he Congress on collection services provided by Federal agencies or entities collecting debt on
behalf of other Federal agencies under the authorities
contained in section 3711(g) of title 31, United States
Code, as added by subsection (m) of this section."

Page 260

STANDARDS AND POLICIES FOR COMPROMISING , WRITINGDOWN, FORGIVING, OR DISCHARGING INDEBTEDNESS

Section 31001(bb) of Pub. L. 104-134 provided that:
" The Director of the Office of Management and Budget
shall"(1) review the standards and policies of each Federal agen cy for compromising, writing-down, forgiving, or discharging indebtedness arising from programs of the agency;
"(2) determine whether those standards and policies
are consistent and protect the interests of the United
States;
"(3) in the case of any Federal agen cy standard or
policy that the Director determines is not consistent
or does not protect the interests of the United States,
direct the head of the agency to make appropriate
modifications to the standard or policy; and
"(4) report annually to the Congress on"(A) deficiencies in t he standards and policies of
F ederal agencies for compromising, writing-down,
forgiving, or discharging indebtedness; and
"(B) progress made in improving those standards
and policies."
EXISTING AGENCY AUTHORITY TO LITIGATE , SETTLE,
COMPROMISE, OR CLOSE CLAIMS

Pub. L . 89--008, §4, July 19, 1966, 80 Stat. 309, provided
t hat: " Nothing in this Act [now this section) shall increase or diminish the existing authority of the head of
an agency to litigate claims, or diminish his existing
authority to settle, compromise, or close claims. "
§ 3712. Time limitations for presenting certain

claims of the Government

(a) CLAIMS OVER FORGED OR UNAUTHORIZED ENDORSEMENTS.(1) PERIOD FOR CLAIMS.-If the Secretary of
the Treasury determines that a Treasury
check has been paid over a forged or unauthorized endorsement, the Secretary may reclaim
the amount of such check from the presenting
bank or any other endorser that has breached
its guarantee of endorsements prior to(A) the end of the 1-year period beginning
on the date of payment; or
(B) the expiration of the 180-day period beginning on the close of the period described
in subparagraph (A) if a timely claim is received under section 3702.
(2) CIVIL ACTIONS.-(A) Except as provided in
subparagraph (B), the United States may bring
a civil action to enforce the liability of an endorser, transferor, depository, or fiscal agent
on a forged or unauthorized signature or endorsement on, or a change in, a check or warrant issued by the Secretary of the Treasury,
the United States Postal Service, or any disbursing official or agent not later than 1 year
after a check or warrant is presented to the
drawee for payment.
(B) If the United States has given an endorser written notice of a claim against the
endorser within the time allowed by subparagraph (A), the 1-year period for bringing a civil
action on that claim under subparagraph (A)
shall be extended by 3 years.
(3) EFFECT ON AGENCY AUTHORITY.-Nothing
in this subsection shall be construed to limit
the authority of any agency under subchapter
II of chapter 37 of this title.
(b) Notwithstanding subsection (a) of this section, a civil action may be brought within 2
years after the claim is discovered when an en-