Federal Register / Vol. 62, No. 233 / Thursday, December 4, 1997 / Rules and Regulations 64161

(3) Limit the number of times any

witness may testify, limit repetitious

examination or cross-examination of

witnesses or the extent to which

corroborative or cumulative testimony

shall be accepted.

(4) Exclude irrelevant, immaterial or

unduly repetitious evidence, but the

interested parties shall not be bound by

technical rules of evidence and all

relevant evidence of reasonably

probative value may be received.

(5) Require briefs and oral arguments

to the extent determined necessary

which shall be included as part of the

record unless otherwise ordered by the

Hearing Officer.

§ 401.85 Staff and other expert testimony.

(a) Presentation on behalf of the

Commission. The Executive Director

shall arrange for the presentation of

testimony by the Commission’s

technical staff and other experts, as he

may deem necessary or desirable, to

incorporate in the record or support the

administrative action, determination or

decision which is the subject of the

hearing.

(b) Expert witnesses. An interested

party may submit in writing to the

Hearing Officer the report and proposed

testimony of an expert witness. No

expert report or proposed testimony,

however, shall be included in the record

if the expert is not available for

examination unless the report and

proposed testimony shall have been

provided to the Commission and all

interested parties prior to the hearing

and the Commission and interested

parties have waived the right of crossexamination.

(c) The Executive Director may

designate for inclusion in the record

those records of the Commission which

the Executive Director deems relevant to

a decision in a contested case or to

provide an understanding of applicable

Commission policies, regulations or

other requirements relating to the issues

in the contested case. The designation of

such Commission documents shall be

provided to all interested parties prior

to the hearing.

§ 401.86 Record of proceedings.

A record of the proceedings and

evidence at each hearing shall be made

by a qualified stenographer designated

by the Executive Director. Where

demanded by the applicant, objector, or

any other person who is a party to these

proceedings, or where deemed

necessary by the Hearing Officer, the

testimony shall be transcribed. In those

instances where a transcript of

proceedings is made, two copies shall

be delivered to the Commission. The

applicant, objector, or other persons

who desire copies shall obtain them

from the stenographer at such price as

may be agreed upon by the stenographer

and the person desiring the transcript.

§ 401.87 Assessment of costs; Appeals.

(a) Whenever a hearing is conducted

under this subpart, the costs thereof, as

defined in this subpart, shall be

assessed by the Hearing Officer to the

party requesting the hearing unless

apportioned between the interested

parties where cost sharing is deemed

fair and equitable by the Hearing

Officer. For the purposes of this section

costs include all incremental costs

incurred by the Commission, including,

but not limited to, hearing examiner and

expert consultants reasonably necessary

in the matter, stenographic record,

rental of a hearing room and other

related expenses.

(b) Upon scheduling of a matter for

hearing, the Secretary shall furnish to

the applicant and/or interested parties a

reasonable estimate of the costs to be

incurred under this section. The

applicant and/or interested parties may

be required to furnish security for such

costs either by cash deposit or by a

surety bond of a corporate surety

authorized to do business in a signatory

state.

(c) An appeal of the assessment of

costs may be submitted in writing to the

Commission within ten (10) days of the

assessment. A copy of the appeal shall

be filed with the Secretary and served

on all interested parties. The filing of

said appeal shall not stay the Hearing.

§ 401.88 Findings, report and Commission

review.

(a) The Hearing Officer shall prepare

a report of his findings and

recommendations. In the case of an

objection to a waste load allocation, the

Hearing Officer shall make specific

findings of a recommended allocation

which may increase, reduce or confirm

the Executive Director’s determination.

The report shall be served by personal

service or certified mail (return receipt

requested) upon each party to the

hearing or its counsel unless all parties

have waived service of the report. The

applicant and any objector may file

objections to the report within 20 days

after the service upon him of a copy of

the report. A brief shall be filed together

with any objections. The report of the

Hearing Officer together with objections

and briefs shall be promptly submitted

to the Commission. The Commission

may require or permit oral argument

upon such submission prior to its

decision.

(b) The Executive Director, in

addition to any submission to the

Hearing Officer, may also submit to the

Commission staff comments upon, or a

response to, the Hearing Officer’s

findings and report and, where

appropriate, a draft docket or other

recommended Commission action.

Interested parties shall be served with a

copy of such submission and may have

not less than ten (10) days to respond

before action by the Commission.

§ 401.89 Action by the Commission.

(a) The Commission will act upon the

findings and recommendations of the

Hearing Officer pursuant to law.

(b) Commission Counsel shall assist

the Commission with its review of the

hearing record and the preparation of a

Commission decision to the extent

directed to do so by the Chairman.

(c) The determination of the

Commission will be in writing and shall

be filed together with any transcript of

the hearing, report of the Hearing

Officer, objections thereto, and all plans,

maps, exhibits and other papers, records

or documents relating to the hearing. All

such records, papers and documents

may be examined by any person at the

office of the Commission, and shall not

be removed therefrom except

temporarily upon the written order of

the Secretary after the filing of a receipt

therefor in form prescribed by the

Secretary. Copies of any such records

and papers may be made in the office of

the Commission by any person, subject

to such reasonable safeguards for the

protection of the records as the

Executive Director may require.

§ 401.90 Appeals from final Commission

action; Time for appeals.

Any party participating in a hearing

conducted pursuant to the provisions of

this subpart may appeal any final

Commission action. To be timely, such

an appeal must be filed with an

appropriate federal court, as provided in

Article 15.1(p) of the Commission’s

Compact, within forty-five (45) days of

final Commission action.

Dated: November 21, 1997.

Susan M. Weisman,

Secretary.

[FR Doc. 97–31486 Filed 12–3–97; 8:45 am]

BILLING CODE 6360–01–M

RAILROAD RETIREMENT BOARD

20 CFR Part 255

RIN 3220–AA44

Recovery of Overpayments

AGENCY: Railroad Retirement Board.
64162 Federal Register / Vol. 62, No. 233 / Thursday, December 4, 1997 / Rules and Regulations

ACTION: Final rule.

SUMMARY: The Railroad Retirement

Board (Board) revises part 255 of its

regulations, currently entitled

‘‘Recovery of Erroneous Payments’’, to

clarify and update its regulations with

respect to recovery of overpayments.

The revisions more clearly identify the

individuals from whom recovery may be

sought and under what circumstances

recovery of an overpayment of benefits

will be made. The revisions also cover

the circumstances under which such

recovery may be waived, and the

circumstances under which such

recovery may be terminated or

suspended under the Board’s authority

concerning administrative relief from

recovery.

DATE: Effective December 4, 1997.

ADDRESSES: Secretary to the Board,

Railroad Retirement Board, 844 Rush

Street, Chicago, Illinois 60611.

FOR FURTHER INFORMATION CONTACT:

Thomas W. Sadler, Senior Attorney

Railroad Retirement Board, 844 Rush

Street, Chicago, Illinois 60611, (312)

751–4513, TDD (312) 751–4701.

SUPPLEMENTARY INFORMATION: Part 255 of

the Board’s regulations has not been

revised since 1967. Although section 10

of the Railroad Retirement Act of 1974

(45 U.S.C. 231i) includes provisions for

recovery and waiver of overpayments of

benefits which are substantially the

same provisions included in the

Railroad Retirement Act of 1937 (45

U.S.C. 228i, superseded), internal

procedures dealing with overpayments

of benefits have been developed which

should properly be included in the

regulations of the Board. In addition, in

the Board’s view, waiver should not be

available with respect to certain types of

overpayments and this proposed rule

reflects those proposals.

The title of part 255 is revised to

‘‘Recovery of Overpayments’’. The title,

‘‘Recovery of Erroneous Payments’’,

mistakenly implies that all such

payments were caused by ‘‘fault’’.

Overpayments can and do occur

through no fault of the recipients of

such payments. The purpose of part 255

is to set out regulations to govern those

instances where more than the correct

amount of benefits has been paid,

regardless of whether or not ‘‘fault’’

exists.

Section 255.1 replaces previous

§ 255.1, which sets out statutory

provisions, with an introductory

statement to summarize what is

included in part 255.

Section 255.2 defines ‘‘overpayment’’

using essentially the same language that

is used in previous § 255.2 which

defined ‘‘erroneous payments’’.

Section 255.3 states the general rule

that overpayments shall be recovered in

all cases except where recovery is

waived under § 255.10 or administrative

relief from recovery is granted under

§ 255.16 or where collection is

suspended or terminated under these

regulations or the Federal Claims

Collection Standards.

Section 255.4 replaces previous

§ 255.4, which simply stated in a

summary manner the methods by which

erroneous payments may be recovered,

with a detailed description of those

individuals from whom overpayments

may be recovered.

Sections 255.5–255.8 set out the

methods by which an overpayment of

benefits may be recovered. These

methods include recovery by cash

payment (§ 255.5), recovery by setoff

from any subsequent payment

determined to be payable on the basis of

the same record of compensation

(§ 255.6), recovery by deduction in the

computation of a residual lump-sum

death benefit payable under the

Railroad Retirement Act (§ 255.7), and

recovery by actuarial adjustment of an

annuity (§ 255.8). These sections are

substantially similar to previous

§§ 255.5–255.8. However, § 255.8,

unlike its predecessor, provides that an

actuarial adjustment is not effective

until the overpaid annuitant negotiates

the first check which reflects the

actuarially adjusted rate.

Section 255.9 provides that where

recovery of an overpayment is by setoff

which can be effected within 5 months

and the individual from whom recovery

is sought is an enrollee under Medicare

Part B, the individual’s monthly

Medicare premium will be paid and the

balance of the annuity amount will be

applied toward recovery of the

overpayment. This section is new and is

intended both to save the agency the

administrative costs of billing an

annuitant for his or her Part B Medicare

premium where his or her annuity

would be offset in its entirety to recover

an overpayment and also to avoid a

lapse of Medicare coverage.

Section 255.10 sets out the general

requirements for waiver of recovery of

an overpayment as set forth in the

Railroad Retirement Act and replaces

the present §§ 255.10 and 255.11.

Section 255.11 defines ‘‘fault’’ and

gives examples of when an individual is

or is not at fault based upon past agency

decisions. Section 255.12 defines when

recovery is contrary to the purpose of

the Railroad Retirement Act, based upon

past agency decisions. Section 255.13

defines when recovery is against equity

or good conscience.

Sections 255.14 and 255.15 are new

sections which describe special

situations where waiver of recovery of

an overpayment is not available or is

limited. Specifically, § 255.14 provides

that waiver is not available under

certain circumstances when recovery

can be made from an accrual of social

security benefits. Section 255.15

provides that when considering waiver

to an estate of an individual, recovery

will never be found to be contrary to the

purpose of the Railroad Retirement Act.

Section 255.16 sets out internal Board

policy governing those situations where

recovery of an overpayment may not be

waived under section 10(c) of the

Railroad Retirement Act, thus

extinguishing the debt, but where

recovery will not be sought for equitable

reasons.

Section 255.17 is new and explains

how an overpayment is recovered when

that overpayment was made to a

representative payee under part 266 of

this chapter.

Sections 255.18 and 255.19, which

deal with compromise, suspension, or

termination of the collection of

overpayments are substantively

identical to previous §§ 255.14 and

255.15 with the exception that

references to the Federal Claims

Collection Standards (4 CFR Chapter 2)

have been added.

This rule was published as a proposed

rule on December 28, 1995, (60 FR

67108). The Labor Member of the Board

dissented from publication of the

proposed rule. His reasons for doing so

were published in the supplementary

information section of the proposed rule

(60 FR 67109). Comments on the

proposed rule were invited by January

29, 1996.

Four comments were received; one

from an individual, two from

individuals representing railway labor

organizations and one from an

association of retired railroad workers.

All of the commenters expressed

agreement with the views of the Labor

Member set forth in the proposed rule.

(60 FR 67109). In addition, the Board

received the joint comments of rail labor

and rail management.

Two commenters requested that the

Board adopt the Labor Member’s

suggestion to include in the regulation

a rule under which an individual who

is overpaid because of an incorrect

annuity rate caused by Board error and

where the rate continues for at least 5

months after the Board has been put on

notice of the error, would be presumed

to be without fault for any payments

after the fifth month.
Federal Register / Vol. 62, No. 233 / Thursday, December 4, 1997 / Rules and Regulations 64163

In response to these comments and

suggestions from rail labor and

management the Board has added a new

paragraph (3) to § 255.11(e) which

provides that an individual shall not be

considered at fault with respect to an

overpayment caused by the agency’s

failure to reduce his or her annuity after

he or she has put the Board on notice

of an event which, had the Board acted,

would have triggered the reduction.

Another commenter criticized section

255.12(c)(2), which permits the Board to

consider non-liquid assets in

determining whether an overpaid

individual has the financial ability to

repay the overpayment. The commenter

stated that one should not have to sell

his or her tangible personal property or

real estate to repay an overpayment. The

Board believes that it is not

unreasonable to require an individual

who has received an overpayment of

benefits and who has substantial equity

in real estate or significant holdings in

tangible personal property such as

precious metals, antiques, or art work to

liquidate or borrow against such

holdings to repay the overpayment he or

she received where such repayment

would not affect his or her ability to

meet ordinary and necessary living

expenses. However, the Board has

revised § 255.12(c)(2) to provide that an

individual does not have to sell his or

her principal residence in order to repay

the debt.

A commenter also objected to

Example 1 under section 255.12. In the

commenter’s view, the example

indicated that future medical expenses

could not be taken into consideration

when determining whether an

individual is financially able to repay

the overpayment. In response to this

comment and the suggestions of rail

labor and rail management this example

has been revised to better explain how

medical expenses will be considered in

determining whether waiver is

appropriate.

Another comment was directed

toward section 255.15 which provides

that waiver is not available to an estate.

The commenter argues that waiver

should be available to an estate where

recovery of the overpayment would be

against equity or good conscience.

Based on this comment and the

suggestions of rail labor and rail

management, the Board has modified

the wording of section 255.15 to provide

that recovery from an estate will never

be contrary to the purpose of the

Railroad Retirement Act, but could be

against equity and good conscience.

Finally, another commenter criticized

proposed section 255.16 which provides

that de minimis overpayments

(overpayments under $500) shall not be

waived. The commenter argued that

many of these overpayments are the

result of Board computational error and

that the administrative costs of pursuing

such small amounts—not to mention the

ill will caused—would suggest that

overpayments this small should

automatically be waived. Based on this

comment and the views of rail labor and

management, the Board has removed

this section.

In addition to the comments

discussed above, two persons requested

the Board to delay final action on this

regulation to allow railroad labor and

railroad management to reach agreement

on the substance of the rule. The Board

notes that the promulgation of

regulations is the sole province of the

Board, and although, any agreement

resulting from negotiations between the

parties is not controlling with respect to

the Board’s actions, the Board has

considered and adopted various

suggestions made by rail labor and

management in adopting this rule.

The Office of Management and Budget

determined that this is a significant

regulatory action for purposes of

Executive Order 12866. There are no

information collections associated with

this rule.

List of Subjects in 20 CFR Part 255

Railroad employees, Railroad

retirement.

1. For the reasons set out in the

preamble, title 20, chapter II, part 255 of

the Code of Federal Regulations is

revised as follows:

PART 255—RECOVERY OF

OVERPAYMENTS

Sec.

255.1 Introduction.

255.2 Overpayments.

255.3 When overpayments are to be

recovered.

255.4 Persons from whom overpayments

may be recovered.

255.5 Recovery by cash payment.

255.6 Recovery by setoff.

255.7 Recovery by deduction in

computation of death benefit.

255.8 Recovery by adjustment in

connection with subsequent payments.

255.9 Individual enrolled under

supplementary medical insurance plan.

255.10 Waiver of recovery.

255.11 Fault.

255.12 When recovery is contrary to the

purpose of the Railroad Retirement Act.

255.13 When recovery is against equity or

good conscience.

255.14 Waiver not available when recovery

can be made from accrual of social

security benefits.

255.15 Waiver to an estate.

255.16 Administrative relief from recovery.

255.17 Recovery of overpayments from a

representative payee.

255.18 Compromise of overpayments.

255.19 Suspension or termination of the

collection of overpayments.

Authority: 45 U.S.C. 231f(b)(5); 45 U.S.C.

231i.

§ 255.1 Introduction.

Section 10 of the Railroad Retirement

Act provides for the recovery of an

overpayment of benefits to an

individual. This part explains when an

overpayment must be recovered, from

whom an overpayment may be

recovered, and when recovery of the

overpayment may be waived or

administrative relief from recovery

granted, and circumstances under

which the overpayment may be

compromised, or circumstances under

which recovery of the overpayment may

be suspended or terminated.

§ 255.2 Overpayments.

An overpayment, within the meaning

of this part, is made in any case in

which an individual receives a payment

under the Railroad Retirement Act, all

or part of which payment he or she is

not entitled to receive.

§ 255.3 When overpayments are to be

recovered.

Overpayments shall be recovered in

all cases except those in which recovery

is waived under § 255.10 of this part or

administrative relief from recovery is

granted under § 255.16 of this part, or

where the overpayment is compromised

or recovery is terminated or suspended

under §§ 255.18 or 255.19 of this part.

§ 255.4 Persons from whom overpayments

may be recovered.

(a) Overpaid individual. The Board

may recover an overpayment from the

individual to whom the overpayment

has been made by any method permitted

by this part, or by the Federal Claims

Collection Standards (4 CFR chapter 2)

(Example 1 of this section). If the

overpaid individual dies before recovery

is completed, then recovery may be

effected by recovery from the estate or

the heirs of such individual.

(b) Other than overpaid individual.

The Board may recover an overpayment

from a person other than the overpaid

individual if such person is receiving

benefits based upon the same record of

compensation as the overpaid

individual under a statute administered

by the Board. In such a case, the Board

will ordinarily recover the overpayment

by setoff against such benefits as are

provided for in § 255.6 of this part

(Example 2 of this section). However,

the Board may ask for a cash refund of

the overpayment.
64164 Federal Register / Vol. 62, No. 233 / Thursday, December 4, 1997 / Rules and Regulations

(c) Individual not in the same

household. Recovery under paragraph

(b) of this section may be made from an

individual who was not living in the

same household, as defined in part 216

of this chapter, as the overpaid

individual at the time of the

overpayment, if the individual from

whom recovery is to be made either was

aware that benefits were being paid

incorrectly or benefitted from the

overpayment. (Example 3 of this

section).

(d) Examples. This section may be

illustrated by the following examples:

Example (1). An employee receiving a

disability annuity returns to work without

notifying the Board. The Board discovers that

the employee is working and determines that

the employee has recovered from his

disability and has been overpaid. The Board

requests that the employee repay the

overpayment by cash refund either in one

lump sum or in installment payments. If the

employee refuses, the Board may refer the

debt to a collection agency or the Department

of Justice for civil suit or may collect the debt

in any other manner permitted by law.

Example (2). The employee in Example 1

agrees to refund the overpayment by cash

installment payments. However, the

employee dies before repaying the total

amount of the overpayment. At his death the

employee’s widow, who was living with the

employee at the time the overpayment was

incurred, becomes entitled to a widow’s

annuity. The Board may recover the

remainder of the overpayment from any

benefits due the widow.

Example (3). C, a child of a deceased

employee by his first marriage, is receiving

a disability annuity on the employee’s record

of compensation. W, the employee’s second

wife, is receiving a widow’s annuity on the

employee’s record of compensation. C lives

with his mother, the employee’s first wife. C

marries without notifying the Board.

Marriage terminates a child’s annuity. W is

not aware of C’s marriage. Upon discovery of

C’s marriage, the Board demands that C

refund the overpaid annuities; C refuses.

Even though W is receiving an annuity based

upon the same record of compensation as

that of C, the Board will not recover the

overpayment from W because she is not in

the same household as C, was not aware of

the incorrect benefits paid, and did not

benefit from them.

§ 255.5 Recovery by cash payment.

The Board shall have the right to

require that an overpayment to an

individual be immediately and fully

repaid in cash by that individual.

However, if the Board determines that

the individual is financially unable to

pay the amount of the indebtedness in

a lump sum, payment may be accepted

in regular installments in accordance

with the Federal Claims Collection

Standards, found in 4 CFR chapter 2.

These standards provide that whenever

possible installment payments should

be sufficient in amounts and frequency

to liquidate the debt in not more than

3 years.

§ 255.6 Recovery by setoff.

An overpayment may be recovered by

setoff from any subsequent payment

determined to be payable under any

statute administered by the Board to the

individual who received the

overpayment. An overpayment may be

recovered from someone other than the

overpaid individual by setoff from a

subsequent payment determined to be

payable to that other individual on the

basis of the same record of

compensation as that of the overpaid

individual.

§ 255.7 Recovery by deduction in

computation of death benefit.

In computing the residual lump sum

provided for in part 234, subpart D, of

this chapter, the Board shall include in

the benefits to be deducted from the

applicable percentages of the aggregate

compensation provided for in that part

all overpayments, whether waived

under § 255.10 of this part or otherwise

not recovered, that were paid to the

employee or to his or her spouse or to

his or her survivors with respect to the

employee’s employment.

§ 255.8 Recovery by adjustment in

connection with subsequent payments.

Recovery of an overpayment may be

made by permanently reducing the

amount of any annuity payable to the

individual or individuals from whom

recovery is sought. This method of

recovery is called an actuarial

adjustment of the annuity. The Board

cannot require any individual to take an

actuarial adjustment in order to recover

an overpayment nor is an actuarial

adjustment available as a matter of right.

An actuarial adjustment does not

become effective until the overpaid

individual negotiates the first annuity

check which reflects the annuity rate

after actuarial adjustment.

Example. An annuitant agrees to recovery

of a $5,000 overpayment by actuarial

adjustment. However, the annuitant dies

before negotiating the first annuity check

reflecting the actuarially-reduced rate. The

$5,000 is not considered recovered. If the

annuitant had negotiated the check before he

died, the $5,000 would be considered fully

recovered.

§ 255.9 Individual enrolled under

supplementary medical insurance plan.

Where recovery of the overpayment is

by setoff as provided for in § 255.6 of

this part, and where recovery of the

overpayment by such means will be

accomplished within a period of 5

months, and the individual from whom

recovery is sought is an enrollee under

Part B of Title XVIII of the Social

Security Act (Supplementary Medical

Insurance Benefits for the Aged and

Disabled), an amount of such

individual’s monthly benefit which is

equal to his or her obligation for

supplementary medical insurance

premiums will be applied toward

payment of such premiums, and the

balance of the monthly benefit will be

applied toward recovery of the

overpayment.

§ 255.10 Waiver of recovery.

There shall be no recovery from any

person in any case where more than the

correct amount of annuities or other

benefits has been paid to an individual

or where payment has been made to an

individual not entitled thereto if in the

judgment of the Board:

(a) The overpaid individual is without

fault, and

(b) Recovery would be contrary to the

purpose of the Railroad Retirement Act

or would be against equity or good

conscience.

§ 255.11 Fault.

(a) Before recovery of an overpayment

may be waived, it must be determined

that the overpaid individual was

without fault in causing the

overpayment. If recovery is sought from

other than the overpaid individual but

the overpaid individual was not without

fault, then waiver is not available.

However, see § 255.16 of this part for

provisions as to when administrative

relief from recovery may be granted in

such circumstances.

(b) Fault means a defect of judgment

or conduct arising from inattention or

bad faith. Judgment or conduct is

defective when it deviates from a

standard of reasonable care taken to

comply with the entitlement provisions

of this chapter. Conduct includes both

action and inaction. Unlike fraud, fault

does not require a deliberate intent to

deceive.

(c) Whether an individual is at fault

in causing an overpayment generally

depends on all circumstances

surrounding the overpayment. Among

the factors the Board will consider are:

the ability of the overpaid individual to

understand the reporting requirements

of the Railroad Retirement Act or to

realize that he or she is being overpaid

(e.g., age, education, comprehension,

physical and mental condition); the

particular cause of non-entitlement to

benefits; and the number of instances in

which the individual may have made

erroneous statements.
Federal Register / Vol. 62, No. 233 / Thursday, December 4, 1997 / Rules and Regulations 64165

(d)(1) Circumstances in which the

Board will find an individual at fault

include but are not limited to:

(i) Failure to furnish to the Railroad

Retirement Board information which the

individual knew or should have known

to be material;

(ii) An incorrect statement made by

the individual which he or she knew or

should have known was incorrect

(including furnishing an opinion or

conclusion when asked for facts); and

(iii) Failure to return a payment

which the individual knew or should

have known was incorrect.

(2) Where any of the circumstances

listed in paragraph (d)(1) are found to

have occurred, the individual shall be

presumed to be not without fault. This

presumption may be rebutted, but the

burden of presenting evidence to rebut

the presumption is on the individual.

(3) For purposes of paragraph (d)(1)(i),

furnishing information to the Social

Security Administration or any other

agency shall not be considered to

constitute furnishing information to the

Railroad Retirement Board.

(4) For purposes of this section, an

error on the part of the agency shall not

extinguish fault on the part of the

individual.

(e) Circumstances in which the Board

will find an individual not at fault

include but are not limited to:

(1) The overpayment is the result of

Board error of which the overpaid

individual was not aware and could not

reasonably have been expected to be

aware (Example 1 of this section).

(2) The overpayment is the result of

an adjustment to the overpaid

individual’s annuity because of

entitlement of another individual to an

annuity on the same record of

compensation as that of the overpaid

individual (Example 2 of this section).

(3) The overpayment is the result of

the Board’s continuing to pay an

individual after he or she has notified

the Board of an event which caused or

should have caused a reduction in his

or her benefit; provided that continued

payment of the unreduced benefit led

the individual to believe in good faith

that he or she was entitled to the

payments subsequently received.

(f) The application of this section may

be illustrated by the following

examples:

Example (1). The Board makes a

mathematical error in the computation of an

employee’s annuity, thus giving the

employee a higher rate than he or she is

entitled to but which is sufficiently close to

the estimated rate given the employee at the

time he or she applied for the annuity that

the employee believed, in good faith, that the

amount was correct. The employee is not at

fault in causing the overpayment in this case.

The overpayment may be waived if the

requirements of § 255.12 or § 255.13 of this

part are met.

Example (2). The widow and four minor

children of a railroad employee are receiving

benefits from the Board under the family

maximum. Another minor child not living in

the same household as the above individuals

is also determined to be the child of the

deceased employee. The widow was not

aware of the existence of this child. An

award of benefits to this child causes a

reduction in benefits to the other individuals

under the family maximum benefit provision

of the Social Security Act. Because of normal

administrative delay this reduction does not

take place for a period of 2 months after its

effective date. The widow and her children

are without fault with respect to this

overpayment. The overpayment may be

waived if the requirements of § 255.12 or

§ 255.13 of this part are met.

§ 255.12 When recovery is contrary to the

purpose of the Railroad Retirement Act.

(a) The purpose of the Railroad

Retirement Act is to pay retirement and

survivor annuities and other benefits to

eligible beneficiaries. It is contrary to

the purpose of the Act for an

overpayment to be recovered from

income and resources which the

individual requires to meet ordinary

and necessary living expenses. If either

income or resources, or a combination

thereof, are sufficient to meet such

expenses, recovery of an overpayment is

not contrary to the purpose of the Act.

(b) For purposes of this section,

income includes any funds which may

reasonably be considered available for

the individual’s use, regardless of

source, including inheritance prospects.

Income to the individual’s spouse or

dependents is available to the

individual if the spouse or dependent

lived with the individual at the time

waiver is considered. Types of income

include but are not limited to:

(1) Government benefits, such as

Black Lung, Social Security, Workers’

Compensation, and Unemployment

Compensation benefits;

(2) Wages and self-employment

income;

(3) Regular incoming payments, such

as rent or pensions; and

(4) Investment income.

(c) For purposes of this section,

resources may include:

(1) Liquid assets, such as cash on

hand, the value of stocks, bonds, savings

accounts, mutual funds and the like;

(2) Non-liquid assets (except an

individual’s primary residence) at their

fair market value; and

(3) Accumulated, unpaid Federal

benefits.

(4) For purposes of paragraphs (c)(1)

and (2) of this section, assets concealed

or improperly transferred on and after

the date of notification of the

overpayment, other than cash expended

to meet ordinary and necessary living

expenses, shall be included.

(d) Whether an individual has

sufficient income and resources to meet

ordinary and necessary living expenses

depends not only on the amount of his

or her income and resources, but also on

whether the expenses are ordinary and

necessary. While the level of expenses

which is ordinary and necessary may

vary among individuals, it must be held

at a level reasonable for an individual

who is living on a fixed income. The

Board will consider the discretionary

nature of an expense in determining

whether it is reasonable. Ordinary and

necessary living expenses include:

(1) Fixed living expenses such as food

and clothing, rent, mortgage payments,

utilities, maintenance, insurance (e.g.,

life, accident, and health insurance),

taxes, installment payments, etc.;

(2) Medical, hospital, and other

similar expenses;

(3) Expenses for the support of others

for whom the individual is legally

responsible; and

(4) Miscellaneous expenses (e.g.,

newspapers, haircuts).

(e) Where recovery of the full amount

of an overpayment would be made from

income and resources required to meet

ordinary and necessary living expenses,

but recovery of a lesser amount would

leave income or resources sufficient to

meet such expenses, recovery of the

lesser amount is not contrary to the

purpose of the Act.

(f) This section may be illustrated by

the following examples:

Example (1). A remarried widow, W, is

overpaid $6000 due to receipt of benefits on

the wage records of both her late husbands.

It has been determined that she is without

fault. Her financial disclosure statement

reveals monthly income greater than monthly

expenses, and assets of $12,000, $10,000 of

which is in cash. She claims to be saving

these funds for future medical expenses,

because she has a progressive disease. While

it is not necessarily contrary to the purposes

of the Act to recover the overpayment in

these circumstances, the legitimate medical

expenses associated with the disease must be

considered.

Example (2). A disability annuitant, D, is

overpaid $33,000 because of simultaneous

entitlement to workers’ compensation

payments. He is determined to be without

fault. He claims he has assumed financial

responsibility for his adult child and her

children. A claimed expense for which the

annuitant has no legal obligation to pay does

not make recovery contrary to the purposes

of the Act.
64166 Federal Register / Vol. 62, No. 233 / Thursday, December 4, 1997 / Rules and Regulations

§ 255.13 When recovery is against equity

or good conscience.

(a) Recovery is considered to be

against equity or good conscience if a

person, in reliance on payments made to

him or her or on notice that payment

would be made, relinquished a

significant and valuable right (Example

1 of this section) or changed his or her

position to his or her substantial

detriment (Example 2 of this section).

(b) An individual’s ability to repay an

overpayment is not material to a finding

that recovery would be against equity or

good conscience but is relevant with

respect to the credibility of a claim of

detrimental reliance under paragraph (a)

of this section.

(c) This section may be illustrated by

the following examples:

Example (1). After being informed by the

Board that he had been credited with

sufficient years of railroad service to retire at

age 60, an employee quit his railroad job and

applied for benefits under the Railroad

Retirement Act. He receives benefits for six

months when it is discovered that he had

insufficient railroad service to retire at age 60

and was not entitled to the benefits he

received. His annuity was terminated.

Because the employee gave up his seniority

rights when he quit his railroad job, he

cannot get his job back. It is determined that

the employee was not at fault in causing the

overpayments. In this situation recovery of

the overpayment would be against equity or

good conscience because the overpaid

individual gave up a valuable right.

Example (2). A widow, having been

awarded annuities for herself and her

daughter, entered her daughter in a private

school. The widow did not have substantial

assets and her income, apart from the

annuities she received in the amounts

payable, would not have been sufficient for

her to have undertaken the obligation to send

her daughter to private school. In order to

pay for the schooling she took out a loan and

used the monthly annuities to pay interest

and principal on the loan. After the widow

and her daughter had received payments for

almost a year, the deceased employee was

found not to have been insured under the

Railroad Retirement Act. Therefore, all

payments to the widow and child were

erroneous and the annuities were terminated.

It is determined that the widow was not at

fault in causing the overpayment. Having

incurred a financial obligation (the school

loan) toward which the benefits had been

applied, the widow was in a worse position

financially than if she and her daughter had

never been entitled to benefits. In this

situation, the recovery of the overpayment

would be against equity or good conscience.

§ 255.14 Waiver not available when

recovery can be made from accrual of

social security benefits.

Where the overpayment is the result

of a reduction of benefits payable under

the Railroad Retirement Act due to the

overpaid individual’s entitlement to

social security benefits and recovery of

such overpayment may be made by

offset against an accrual of social

security benefits, it shall not be

considered to be against equity or good

conscience or contrary to the purpose of

the Railroad Retirement Act to recover

the overpayment by offset against the

accrual. Consequently, in such a case

recovery of an overpayment is not

subject to waiver consideration.

§ 255.15 Waiver to an estate.

It shall never be considered contrary

to the purpose of the Railroad

Retirement Act to recover an

overpayment from the estate of an

overpaid individual.

§ 255.16 Administrative relief from

recovery.

(a) Where the Board seeks to recover

an overpayment from someone other

than the overpaid individual, as

provided for in § 255.4 of this part, and

where waiver of recovery, as provided

for in § 255.10 of this part, is not

available because the overpaid

individual was at fault as defined in

§ 255.11 of this part, the Board may

forego recovery of the overpayment

where the individual from whom

recovery is sought was not at fault in

causing the overpayment and where

recovery is contrary to the purpose of

the Railroad Retirement Act as defined

in § 255.12 of this part.

(b) Application of administrative

relief from recovery with respect to a

given person from whom recovery may

be made shall have no effect on the

authority of the Board to recover the

overpayment from anyone else from

whom recovery may be sought.

(c) This section may be illustrated by

the following examples:

Example (1): An employee, through his

own fault, causes an overpayment in his

annuity. The employee dies before the

overpayment can be recovered from him and

he leaves no estate. A widow’s annuity is

payable on the employee’s compensation

record. The widow was not at fault in

causing the overpayment. The Board may

recover the remainder of the overpayment by

setoff against the widow’s annuity. However,

it may forego recovery under this section if

such recovery would be contrary to the

purpose of the Railroad Retirement Act as

defined in § 255.12 of this part. Since this is

not a waiver of the overpayment, the Board

is free to recover the overpayment from the

widow at a later date, for example, if an

accrual of benefits should become payable, or

if it determines that such recovery would not

be against the purpose of the Railroad

Retirement Act.

Example (2): A representative payee for a

retarded child, through her own fault, causes

an overpayment in the child’s annuity. The

overpaid amounts were used for the benefit

of the child. The representative payee dies

before the overpayment can be recovered

from her and she leaves no estate. The Board

may not waive the remainder of the

overpayment with respect to the child since

for purposes of waiver the representative

payee is considered the overpaid individual

(see § 255.17 of this part) and the overpaid

individual was at fault. However, if the child

was not at fault in causing the overpayment

and recovery would be contrary to the

purpose of the Railroad Retirement Act as

defined in § 255.12 of this part, then the

Board may forego recovery of the

overpayment from the child’s annuity under

this section.

§ 255.17 Recovery of overpayments from a

representative payee.

(a) Joint liability. In general, if an

overpayment is made to an individual

receiving benefits as a representative

payee (see part 266 of this chapter) the

Board may recover the overpayment

from either the representative payee or

the beneficiary, or both. If the

beneficiary is currently receiving

benefits, either in his or her own right

or through a representative payee, the

Board will generally propose to recover

the overpayment by setoff against those

benefits as provided for in § 255.6 of

this part. If the beneficiary is not

currently receiving benefits but the

representative payee is receiving

benefits, then the Board will generally

propose to recover the overpayment by

setoff against those benefits.

(b) Waiver of overpayments. For

purposes of § 255.10 of this part (Waiver

of recovery), if it is determined that the

representative payee was at fault in

causing the overpayment there may be

no waiver of the overpayment either as

to the representative payee or the

beneficiary. However, if the beneficiary

was not at fault in causing the

overpayment he or she may be eligible

for administrative relief from recovery

under § 255.16 of this part.

(c) This section may be illustrated by

the following examples:

Example (1). M is receiving a child’s

annuity as a representative payee for her

disabled son, S. With M’s knowledge S

marries. Although both M and S know that

marriage terminates the child’s annuity,

neither of them informs the Board of this

event. Both M and S are liable for any

overpayment caused. Waiver is not available

since M would be considered at fault in

causing the overpayment. Administrative

relief from recovery is not available to S since

he would also be considered at fault.

Example (2). R is a representative payee for

B, who resides in a skilled-care facility. R is

found to be at fault in causing an

overpayment of benefits to B. The Board may

recover the overpayment from either R or B.

Waiver is not available because R was at fault

in causing the overpayment. However, if B

was not at fault in causing the overpayment
Federal Register / Vol. 62, No. 233 / Thursday, December 4, 1997 / Rules and Regulations 64167

he or she may be entitled to administrative

relief from recovery under § 255.16 of this

part.

§ 255.18 Compromise of overpayments.

(a) This section sets forth the

principal standards which the Board

applies in exercising its authority under

31 U.S.C. 3711 to compromise an

overpayment. In addition, the Board

may compromise an overpayment under

the Federal Claims Collection Standards

set forth in 4 CFR part 103.

(b) An overpayment may be

compromised only if it is in the best

interest of the agency. Circumstances

and factors to be considered are:

(1) The overpayment cannot be

collected because of the overpaid

individual’s inability to pay the full

amount of the overpayment within a

reasonable time;

(2) The overpaid individual refuses to

pay the overpayment in full and it

appears that enforced collection

procedures will take an inordinate

amount of time or that the cost of

collecting does not justify the enforced

collection of the full amount; or

(3) There is doubt that the Board

could prove its case in court for the full

amount claimed because of a bona fide

dispute as to the facts or because of the

legal issues involved.

§ 255.19 Suspension or termination of the

collection of overpayments.

This section sets forth the principal

standards which the Board applies in

approving the suspension or

termination of the collection of an

overpayment. In addition the Board may

suspend or terminate collection under

the Federal Claims Collection Standards

set forth in 4 CFR part 104.

(a) Collection action on a Board claim

may be suspended temporarily when

the debtor cannot be located and there

is reason to believe future collection

action may be productive or collection

may be effected by offset in the near

future.

(b) Collection action may be

terminated when:

(1) The debtor is unable to make any

substantial payment;

(2) The debtor cannot be located and

offset is too remote to justify retention

of the claim;

(3) The cost of collection action will

exceed the amount recoverable; or

(4) The claim is legally without merit

or cannot be substantiated by the

evidence.

Dated: November 21, 1997.

By Authority of the Board.

Beatrice Ezerski,

Secretary to the Board.

[FR Doc. 97–31726 Filed 12–03–97; 8:45 am]

BILLING CODE 7905–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 25

[IB Docket No. 96–111; CC Docket No. 93–

23; FCC 97–399]

Non-U.S.-Licensed Satellites Providing

Domestic and International Service in

the United States

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: In this final rule, the Federal

Communications Commission

(Commission) adopts a new standard for

foreign participation in the U.S. satellite

services market consistent with the

United States’ obligations under the

WTO Basic Telecom Agreement. The

common sense rules and procedures we

establish will provide opportunities for

foreign entities to deliver satellite

services in this country. The liberalized

market conditions that will result from

the WTO Basic Telecom Agreement will

allow U.S. companies to enter

previously closed foreign markets.

These joint initiatives will benefit U.S.

consumers by increasing the availability

of various satellite services, providing

more alternatives, reducing prices, and

facilitating technological innovation.

This new environment will encourage a

more competitive satellite market in the

United States, as well as spur

development of broader, more global

satellite systems. It will also foster

greater opportunity for communications

across national boundaries by making it

easier for consumers worldwide to gain

access to people, places, information,

and ideas.

DATES: These amendments contain

information collection requirements

which are not effective until approved

by the Office of Management and

Budget, subject to 5 U.S.C. 801(a)(3).

FCC will publish a document in the

Federal Register announcing the

effective date. Public and agency

comments on the modifications to the

information collections are due on or

before February 2, 1998.

FOR FURTHER INFORMATION CONTACT:

Linda Haller at (202) 418–0760, Tania

Hanna at (202) 418–0762, or Laurie

Sherman at (202) 418–0429 of the

International Bureau. For additional

information concerning the information

collections contained in this Report and

Order, contact Judy Boley at (202) 418–

0214, or via the Internet at

jboley@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s Report

and Order in IB Docket No. 96–111; CC

Docket No. 93–23; FCC 97–399, adopted

November 25, 1997 and released

November 26, 1997. The complete text

of this Report and Order is available for

inspection and copying during normal

business hours in the FCC Reference

Center (Room 239), 1919 M Street, N.W.

Washington, D.C., and also may be

purchased from the Commission’s copy

contractor, International Transcription

Service, Inc. (ITS, Inc.), 1231 20th

Street, N.W., Washington, DC 20036,

telephone: 202–857–3800; facsimile:

202–857–3805.

This Report and Order contains a

modified information collection. The

Commission, as part of its continuing

effort to reduce paperwork burdens,

invites the general public and the Office

of Management and Budget (OMB) to

comment on the information collections

contained in this Report and Order, as

required by the Paperwork Reduction

Act of 1995, Public Law 104–13. Public

and agency comments are due on or

before February 2, 1998; OMB

notification of action is due February 2,

1998. Comments should address: (a)

Whether the collection of information is

necessary for the proper performance of

the functions of the Commission,

including whether the information shall

have practical utility; (b) the accuracy of

the Commission’s burden estimates; (c)

ways to enhance the quality, utility, and

clarity of the information collected; and

(d) ways to minimize the burden of the

collection of information on the

respondents, including the use of

automated collection techniques or

other forms of information technology.

This Report and Order contains

modifications to approved collections

and has been submitted to the Office of

Management and Budget for review

under Section 3507(d) of the Paperwork

Reduction Act (44 U.S.C. 3507(d)). For

copies of the submissions contact Judy

Boley at (202) 418–0214. A copy of any

comments filed with the Office of

Management and Budget should also be

sent to the following address at the

Commission: Federal Communications

Commission, Performance Evaluation

and Records Management Branch, Room

234, Paperwork Reduction Project, OMB

No. 3060–0678, Washington, D.C.

20554. For further information contact

Judy Boley, (202) 418–0214.

OMB Approval Number: 3060–0678.